EXPLORING INNOVATIVE TECHNOLOGIES
FOR A SUSTAINABLE FUTURE
ANNUAL REPORT 2021
2 | 2021 ANNUAL REPORT
ABOUT NEWAYS
REPORT OF THE
BOARD OF DIRECTORS
GOVERNANCE
REPORT OF THE
SUPERVISORY BOARD
FINANCIAL
STATEMENTS
OTHER
INFORMATION
ABOUT NEWAYSABOUT NEWAYS
Foreword 3
About Neways 5
Company profile 5
Our mission 5
Key figures and performance indicators 6
International presence and business model 8
Activities 10
Markets and trends 13
Value creation model 17
Ambition and strategy 18
Report of the Board of Directors 21
2021 - Accelerating our transformation 21
Management agenda and outlook 26
Organisation and employees 27
Corporate Social Responsibility 31
Governance and compliance 37
Supervisory Board, Board of Directors and management team 37
Corporate Governance 40
Risks and risk management 48
Board of Directors’ statement of responsibilities for the financial report 52
Shares in Neways 54
Report of the Supervisory Board 56
2021 Financial Statements 60
Consolidated statement of financial position 62
Consolidated statement of profit or loss and comprehensive income 64
Consolidated cash flow statement 65
Consolidated statement of changes in equity 66
Notes to the consolidated financial statements 67
Separate statement of financial position 100
Separate statement of profit or loss 101
Notes to the separate financial statements 102
Other information 107
Independent auditor’s opinion 107
Trade register 114
Provisions in the Articles of Association governing the appropriation of profit 114
Key figures and five-year summary 2017–2021 115
Address details 117
CONTENTS
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The year 2021 was an intense year in many ways, a year in which we prepared
ourselves for the fact that the coronavirus may remain among us for a longer
time. I would like to compliment all Neways employees and express my great
admiration on how everyone has dealt with this situation. We kept our work
environment safe and we continued to build trust with our existing and new
customers without business interruption.
It was also a year in which we have launched a new strategy and a major transformation
of our global organisation. Furthermore, we continuously managed the unprecedented
worldwide shortage of materials, and in 2021 we have welcomed Infestos as our new
majority shareholder.
I am very proud to see how, under these challenging and sometimes hectic circumstances,
we find pragmatic solutions and collaborate both internally and externally with our business
partners on the sustainable future of Neways. Having a balanced customer portfolio across
a wide range of growing market sectors has really paid off. It helped to improve our outlook
by refining our positioning as a System Innovator and by accelerating our growth in the
coming years.
What struck me most is that all of the above has brought us closer together. I am impressed
by the flexibility to adapt to new situations and the inventiveness it has unleashed in our
organisation. We do not think in terms of problems: we think in terms of solutions – together
with our customers. It is very promising to see that many of the competencies that we want
to strengthen during our transformation to a recognised System Innovator already emerged
during the past year.
Adjusting the organisation
The adjustment of the organisation that was started in 2020 was fully completed this year.
We have succeeded in putting several parts of our organisation back on a competitive
footing. We also rationalized our customer base, positioning ourselves to grow with new
and existing customers where our expertise is distinctive and we add value as a System
Innovator.
Eric Stodel
CEO
FOREWORD
Exploring innovative technologies for
a sustainable future
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Foreword
Impact of component shortages
In addition to the direct effects of the pandemic, we saw that the stretched supply chains
had difficulty adapting quickly to sudden changes in demand. The pandemic has
accelerated the digitalisation of the world, and the reopening of the economy has led
to an impressive recovery in demand in various sectors. The worldwide shortage of
materials, and semiconductors in particular, has not put us off. Quite the contrary. We have
made every effort to optimally serve our customers, and we are very grateful for the close
collaboration with our supply chain partners and customers. While we expect the supply
chain to become more balanced over the coming years, we will strive to continue the close
collaboration with our partners in the supply chain.
New System Innovator strategy
Based on strong customer guidance we launched a new strategy this year with the ambition
of gaining a leading position as a System Innovator. We are increasingly concentrating on
developing new innovative technological systems with a higher added value for our
customers. We aim to focus in particular on energy transition and other ESG related topics.
I am extremely proud that more and more customers are asking us for System Innovator
solutions, also earlier in the supply chain.
All our target markets are expected to grow very fast in the coming years, also as a result
of the sustained strong increase customer demand for electronics. It is very inspiring to see
that our order books are growing strongly again and that we are able to attract many new
customers. We have demonstrated that we can realise more efficient and durable solutions
by working closely with our customers on the development of new systems. We have won
several new System Innovator projects with both new and existing customers, which will
generate additional profitable revenue over the coming years.
We will structure and expand this way of operating in 2022. The first pilar of our strategic
ambition is to develop technology roadmaps and set up competence centres, where we
bring together engineers from various research fields to develop integral design and build
solutions. The main drivers for this transformation are intensifying internal collaboration and
stimulating the exchange of knowledge. The second pilar of our strategic ambition is to
become OneNeways, which is all about connecting the dots in our organisation, between
our people and processes.
We organise our operations to present one face to the customer with cross-functional teams
across all of our businesses. In addition we structure our key processes for commercial,
operational and aftermarket excellence.
Onboarding of a new major shareholder
In 2021 we also held intensive talks about the future of Neways and the shareholder
structure. In Infestos we have found a solid partner who has great confidence in our
new strategy and fully supports our strategic goals. Together we are well positioned to
accelerate the transformation to System Innovator, to attract scarce talent, and to acquire
new customers.
Infestos has a strong track record when it comes to investing in companies that can play
an important role in perhaps the greatest challenge of our time: the energy transition.
Intensive collaboration between companies and sectors is a prerequisite for this and it is
precisely here that a System Innovator like Neways can play a differentiating role. We are
in an excellent position to explore innovative technologies for a sustainable future that
can be applied in all our target market sectors.
Ultimately, our employees will make the real difference in Neways becoming
a successful System Innovator. We will therefore continue to invest in leadership and
professional talent development and in fostering knowledge sharing. We will continue
to be curious and eager to deeply understand what makes our customers really successful.
What are the key developments in our customers’ end markets? What applications make
a system truly distinctive and how can they be improved? How can we make the design,
production, assembly and lifecycle management processes more efficient? What does the
global supply chain picture look like and how can we make it smarter? These are just some
of the key questions that we will continue to ask ourselves.
I am satisfied with how we have been able to close 2021 under such challenging conditions
and I am confident that, in 2022 and the years to come, we are on the right track to become
a leading System Innovator in our target markets. This will pave the way to becoming
a long-term strategic partner for our customers, which is expected to drive profitable
growth for a sustainable future.
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About Neways / Company Profile and Our mission
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Company profile
Neways is a top 5 player in the European market for Electronic Manufacturing Services
(EMS). The company is committed to growing its position as a System Innovator for
high-end electronics solutions.
We operate as a development, production and aftermarket partner, working in close
collaboration with our customers across the entire lifecycle. We focus primarily on the
high-tech sectors Semiconductor, Automotive, Industrial, and Medical. We do this with
approximately 2,600 employees at fourteen companies in Europe, Asia and North America.
Neways’ head office is located in Brainport Eindhoven, a top technology cluster in and
around the city of Eindhoven in the Netherlands. This close proximity to key technology
ecosystems in combination with our pool of about 500 engineers puts us in an excellent
competitive position for producing differentiated technology solutions.
Our mission
Neways aims to be a leading System Innovator that plays at the top of its market,
partnering with customers in order to offer advanced technology solutions across the
entire lifecycle of their endproducts. Our OneNeways project will enable us to connect
all the dots in our organisation, between our people and our processes and lead the
market with pride.
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About Neways / Key figures and performance indicators6 | 2021 ANNUAL REPORT
Key figures and performance indicators
Interest coverage
ratio
compared
2021 to 2020
8.5
123.7%
Equity
(€ millions)
compared
2021 to 2020
111.8
9.6%
Normalised
profit*
(€ millions)
compared
2021 to 2020
10.2
191.4%
Revenue (€ millions)
compared
2021 to 2020
469.5
-1.9%
Normalised
operating profit*
(€ millions)
compared
2021 to 2020
14.7
86.1%
Net cash flow**
(€ millions)
compared
2021 to 2020
-33.4
-188.8%
* Excluding exceptional income and exceptional costs (see page 22).
** Net cash flow means cash flow from operating activities, plus cash flow from investment activities.
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About Neways / Key figures and performance indicators7 | 2021 ANNUAL REPORT
Key figures and performance indicators
Net debt/
EBITDA ratio
compared
2021 to 2020
2.5
66.7%
Solvency
Equity
as a % of the
balance sheet total
compared
2021 to 2020
37.7
-13.5%
Normalised
earnings
per share*
compared
2021 to 2020
0.83
186.2%
Average number of
employees
expressed as FTEs
compared
2021 to 2020
2,542
6.0%
Revenue split by market sector
in millions of euros
€2
€131
Semiconductor 38%
Industrial 28%
Automotive 23%
Medical 11%
Other 0%
€106
€50
€181
Omzetverdeling per marktsector in miljoenen euro’s
Geographical revenue split
in millions of euros
€18
€22
€128
The Netherlands 49%
Germany 27%
Europe (other) 15%
America 5%
Asia 4%
€71
€231
Geografische omzetverdeling in miljoenen euro’s
291
1.897
Western Europe 75%
Eastern-Europe 22%
Asia 3%
America 0%
552
Geografische verdeling medewerkers op fulltime basis
* Excluding exceptional income and exceptional costs (see page 22).
Geographical split of employees
expressed as FTEs
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About Neways / International presence and business model8 | 2021 ANNUAL REPORT
International presence and business model
Western EuropeNorth America
Number of employees 1,897Number of employees 2 Number of employees 552 Number of employees 91
Eastern Europe Asia
The Netherlands
Son Echt Leeuwarden Enschede
Germany
Riesa Erfurt Neunkirchen
Czech Republic
De
c
ín
Slovakia
Nová Dubnica
US
Milpitas
China
Wuxi
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About Neways / Business model
Business model
Our company's activities encompass several facets in the business-to-business segment,
from designing and manufacturing advanced electronics and box-build assemblies
to aftermarket services and remanufacturing products in order to extend their lifetime
(as shown in the figure below).
System Innovator roles mapped along product lifecycle and value chain
With our versatile technological knowledge and experience, we provide our customers
the best possible support throughout the lifecycle of their products. As a System Innovator,
we are involved in all phases of the development of a product, from the early stages of the
technology and its design and development to the final product and after-market support.
Our operating companies are based in strategic locations in close proximity to our
customers, with optimal cost-performance ratios and proximity to local knowledge
ecosystems. This places us in an ideal position to facilitate long-term relationships with
our customers and knowledge institutions.
The intensive cooperation between our operating companies – which will become even
more intensive and efficient as a result of the OneNeways project – and the harmonisation
of work processes enable us to combine competencies with differentiating capabilities and
deliver economies of scale and scope for our customers.
•
WESTERN EUROPE
In Europe, our operating companies carry out Neways' strategy as a System Innovator
with deep technology expertise and product lifecycle capabilities. We use our specialist
knowledge to support customers in the development of high-grade systems and deliver
complex electronic components and systems. Neways has strong market positions in the key
industrial and technological regions of the Netherlands and in Germany, by far the largest
market for EMS in Europe. Neways holds a strong position in these key markets, with solid
connections to leading technology institutes and universities to the benefit of technology
partnership developments and future workforce development.
•
EASTERN EUROPE
In Slovakia and the Czech Republic, Neways has strong manufacturing capabilities in high
mix-low volume and mid mix-mid volume segments. This is part of our lifecycle approach
to offering customers optimal cost performance in the mature production phases. Neways
is targeting further growth and will expand into new facilities, equipment and capacity in
Slovakia and the Czech Republic.
•
ASIA
In Asia, Neways operates with one company that focuses on manufacturing of electronics
and system assembly. This business targets both the Asian and European markets. This
provides our customer a strategic sourcing solution and entrance to the Asian markets.
For the coming year, Neways plans to expand within Asia to respond to growing customer
demand in that region.
•
NORTH AMERICA
In North America, Neways operates with one company in the heart of Silicon Valley
(California). This location places us close to some of our key customers, enabling us to
get in at the early stages of their product development and lifecycle, where we focus
on project management, product development and prototyping.
Downstream Upstream Manufacturing
PCBA
System
System up-scale
1
2
3
Prototyping,
design for
excellence
Aftermarket,
circularity,
reuse
System up-scale
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About Neways / Activities
Activities
Development
PCB/product
assembly
Engineering/
prototyping System construction
Cable production/
assembly
Microelectronics
development/production
Neways Advanced Applications
Son
• • •
Neways Cable & Wire Solutions
Echt
• •
Neways Industrial Systems
Son
• • •
Neways Leeuwarden
Leeuwarden
• •
Neways Technologies
Son - Erfurt - Enschede - Echt
•
Neways Micro Electronics
Echt
• •
Neways Neunkirchen
Neunkirchen
• •
Neways Electronics
Riesa
• • •
Neways Slovakia
Nová Dubnica
• • •
Neways Electronics
Decín
•
Neways Wuxi
Wuxi
•
Neways Electronics US, INC.
Milpitas
•
AUTOMOTIVE MEDICAL INDUSTRIAL SEMI-
CONDUCTOR
11 | 2021 ANNUAL REPORT
Cleaning Technologies
Cleaning Technologies encompass the technologies and facilities at Neways aimed at
minimising the concentration of particulates that can contaminate a product. On the
one hand, some of the printed circuit boards (PCBs) at Neways are assembled in clean
rooms designed to prevent any form of contamination happening during the production
process. On the other hand, Neways has specialist equipment for the final cleaning of
products which have not been produced in clean rooms or that have been used outside
a clean room.
The semiconductor industry, photonics and the production of PCBs for electrical systems
used in life sciences are segments that demand the highest standard of cleanliness.
The strictest standards include the prevention of ionic contamination, i.e. any ionic residue
that can interfere with functionality and reliability of a system. For products that operate
in a high-vacuum environment, such as electron microscopes, an important source of
contamination that needs to be prevented is outgassing, which occurs when air trapped
in a PCB during production is released.
The expertise that Neways has built in both domains by supplying clients that built
photolithography machines and electron microscopes can be deployed in other sectors
as well. A good example is the automotive industry. The complexity of electrical systems
in cars is increasing and technical cleanliness requirements are becoming ever more
rigorous. With our experience and our ability to comply with the highest standards of
cleanliness – a must in the semiconductor industry – Neways is very well equipped to
boost the technical cleanliness of products in other sectors as well.
The current energy transition, which is partly driven by IoT solutions and the electrification
of all sectors, is increasing the demand for electrical systems across the board. An innovation
that is particularly relevant for cleaning technologies is the rise of photonics as a means
for transferring information. The optical transfer of data is more vulnerable to
contamination, as light needs to be transferred without interruption. Our cleaning
technology competencies have enabled us to respond to this transition in good time.
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Elekta
As a global leader in precision radiation therapy, Swedish company Elekta is committed to ensuring
every patient with cancer has access to the best possible care. Elekta has been working with Neways
since 2017, and in 2019 the company made Neways part of its tier one supply chain.
Neways provides a number of electrical components for power distribution, safety interlock mechanisms
and network distribution for Elekta’s Unity system, a groundbreaking cancer treatment system that
integrates MR imaging, linear accelerator technologies and advanced treatment planning into a single
platform. Unity can acquire rich, highly detailed images that enable specialists to accurately identify the
location of a tumour. From there the radiation delivery platform takes over, providing a dose of radiation
to the exact location of the tumour. A benefit of this technology is its high precision, which minimises
radiating healthy tissue or organs. It enables the patient to have the best possible outcome with minimal
side effects.
Unity relies on a global supply chain, with a significant number of Elekta’s suppliers based in the
Netherlands, including Neways. Currently, 50 Unity systems have been installed throughout North
America, Europe, Asia Pacific, Middle East & Africa, and China. And with strong, stable demand,
Elekta is expecting Unity’s momentum to continue in the coming years.
Elekta worked in close collaboration with Neways during the project development phase, through to
commercial release of the Unity system. These products are fully tested at sub-assembly level and
packaged at Neways, ready for distribution to a central warehouse, then on to a local warehouse near
the hospital ‘bunker’ (radiation therapy treatment facility) where the Unity system is built. Due to Unity’s
remote manufacturing location, Elekta relies on Neways’ commitment to quality as any problems found
during building can have a major impact on project timescales and delivery to the customer. Over the
last couple of years there have been great examples of collaboration between both parties involving
Neways engineers travelling to hospital sites to resolve problems with the Elekta engineers.
‘Neways has a strong relationship with Elekta as a strategic supplier,’ says Ben King, Senior Supplier
Development Engineer at Elekta. ‘Especially during the past year when the supply chain issue was
substantial and recurring. Neways has managed this global challenge very well. They continued to
deliver even though the world was dealing with material shortages and extended lead times. We’ve
relied on Neways’ ability to work with their supply chains and engineering departments to come up with
solutions for significant challenges, and they did. We’ve had continuous meetings with Neways to keep
our production going and together we have overcome every obstacle that has being thrown at us.’
AUTOMOTIVE MEDICAL INDUSTRIAL SEMI-
CONDUCTOR
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About Neways / Markets and trends
There is a growing awareness that economies have become so intertwined
that many of the present-day challenges can only be addressed through global
cooperation. In 2021, we have seen that this interdependency makes global
supply chains fragile and that the consequences of a shortage of components
in one sector has spillover effects to almost all other sectors. Technology
connects people and can be utilised to solve problems. However, in the past
two years we have also seen that technological innovation is not enough on
its own: behavioural change is always required for this to succeed.
The decarbonisation of the economy to limit global warming is one of the biggest
challenges, one that requires a structural change in society and depends on a high level
of technological ingenuity. The European Commission introduced targets to achieve
net-zero emissions by 2050. The 2030 Climate Target Plan states that by 2030 greenhouse
gas emissions in the European Union need to be cut by at least 55% below 1990 levels.
1
The Netherlands Environmental Assessment Agency (PBL) has concluded that, in order to
achieve the government’s target for 2030, annual emission reductions need to double,
from 3 megatonnes per year in the 2010–2019 period to 6 megatonnes per year
between 2020 and 2030.
2
The electrification of transport and industrial production are important pillars in the
reduction of carbon emissions, while the internet of things and the proliferation of
interconnected systems helps us use energy and scarce resources more efficiently. Smarter
technology means more complexity and higher demand for electronic components that
are smaller, more precise, more powerful and more efficient. As complexity increases, so
does the amount of electronics in our customers’ products. Besides lowering the carbon
footprint of our own operations, Neways’ expertise in power and energy can help clients
across all sectors to develop technologies designed to accelerate the energy transition.
At the start of 2022, Neways is well positioned for further growth. In 2021, we have seen
the global economic recovery continue despite new waves of the coronavirus pandemic.
The global economy grew by 6 percent compared to the previous year. For 2022, the IMF
forecasts 4.4 percent growth.
3
Markets and trends
• Automotive
• Semiconductor
• Medical
• Industrial
• Markets Industrial and professional growth sector
• Customer base Mainly Western European OEMs
• Main presence Industrial & Technology regions
• Relationship OEM first-tier partners
• Range Complete product life cycle management
• Added value High
• Batch production Low and medium to high volume batches
• Assembly complexity Medium to high mix
• Communication
• Automotive
• Semiconductor
• Medical
• Computer
• Energy/Renewables
• Industrial
• Aerospace & Defence
Neways’ growth sector focus Specialised niche playerEMS market sectors
1
https://ec.europa.eu/clima/eu-action/european-green-deal/2030-climate-target-plan_en
2
https://www.pbl.nl/en/news/2020/climate-and-energy-outlook-2020-achieving-urgenda-reduction-target-2020-is-uncertain-cabinet-target-for-2030-not-yet
3
https://www.imf.org/en/Publications/WEO/Issues/2022/01/25/world-economic-outlook-update-january-2022
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About Neways / Markets and trends
Shifting consumer demand
The shortage of components and the increasing complexity of systems put higher demands
on Original Equipment Manufacturers (OEMs) and their supply chains. Customers are raising
their technical requirements and looking for reliable partners. They need suppliers who
understand their systems and can offer creative solutions for challenges such as improving
energy efficiency or addressing the shortage of materials. Another notable shift in consumer
demand is the reshoring of production to Europe. Due to the fragility of international supply
chains and the increasing costs of transport fuelled by rising energy prices, manufacturers
are looking for means to shorten their supply chains.
In our sector and key account plans we have set out how we will deepen and strengthen our
positioning as a System Innovator in the years to come. We have established different
centres of expertise that are relevant across the four strategic growth sectors.
For example, in the ‘High-speed Data Processing Technology’ roadmap for Sensors &
Control, Neways explores methods that will enable faster and more accurate exchange of
data. In the ‘Charging Technology’ roadmap and ‘Inverter Technology’ roadmap, both part
of Power Management, we are working on technologies that foster the electrification of
vehicles and autonomous vehicles or battery-powered robots.
Quality
As the complexity of systems increases, quality assurance and minimising error margins
become more important. Our knowledge of production frameworks and quality standards
for technical cleanliness in the Automotive and Semiconductor sectors can be applied in
other sectors as well. The Neways Advanced Product Quality Planning (APQP) framework,
originally developed for Automotive clients, provides an effective framework for industrial
production techniques and procedures at Original Equipment Manufacturers (OEMs) and
their suppliers. The framework ensures standardisation of production methods between
OEMs and suppliers, and the highly process-focused approach and planning procedures
Market challenges
• Increasing complexity in the supply chain
• Smaller and smaller components and shorter product life cycles
• Fluctuations in demand caused by economic volatility and cyclicity
• Greater attention for sustainability and corporate social responsibility
• Shortage of specific components and technically trained staff
• Technology expertise
• Product life cycle management
• System integration expertise
• Reliable quality and delivery
• Supply chain management support
• Flexible planning and production
• Short lines and open communication
• Close to the market and customers
• Compliant with regulations and standards
• Product traceability
• Ability to share risk and invest jointly
Unique characteristics
Neways’ expertise/competencies
Greater need
for agility and full-
service solutions
More outsourcing
to trusted partners
that add value
OEMs
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About Neways / Markets and trends
guarantee the desired quality when introducing complex products. Neways’ expertise in
clean technologies, which originates from the strict quality requirement for supplying
Semiconductor clients, is considered an important asset for customers in the Medical,
Automotive and Industrial sectors as well.
Innovation
Demand for customised solutions is growing and Neways is focussing on technology
development to meet this demand. In the four strategic growth sectors, we respond to
the need for fast time to market and the greater general level of complexity by developing
reference designs. These designs contain the essential functionalities of a system that can
be adapted to specific customer requests.
Flexibility
We use our supply chain management expertise and understanding of our customers’
products to take control of the supply chain. In 2021, close collaboration with customers and
our ability to search out viable alternatives helped us to maintain production and minimise
delivery problems in an extremely challenging environment. In some cases the re-use and
refurbishment of components can also be a viable option. Our expertise and experience in
upgrading or replacing certain parts of a system to extend the lifecycle of products, without
compromising reliability or quality, are at the core of these solutions.
Developments in the strategic growth sectors
Neways operates in four strategic sectors with attractive long-term growth prospects, these
being Semiconductor, Automotive, Medical, and Industrial. Electrification and demographic
changes are the common growth drivers, and cross-pollination between the four sectors
enriches the products and services we offer to our clients.
Semiconductor
We have seen that the sudden shift to a ‘working-from-home’ economy spurred the demand
for electronic devices and accelerated the adaptation of new applications such as video
conferencing. The decentralisation of work requires more computing power, driving growth
in every part of the Semiconductor value chain. However, the rapid growth has been
somewhat tempered by the shortage of components, for which the sector has to compete
with producers in other industries as well.
In the coming years, we do not expect a cyclical downturn for the sector, as underlying
trends such as the rollout of 5G and the expansion of IoT applications will continue to drive
demand for computing power, while reshoring of production might bring parts of the
semiconductor supply chain back to Europe.
Medical
The aging population in the developed economies and China is driving growth in the
Medical sector. Sensing technologies for monitoring and diagnostics that can be used at
home and for remote diagnostics are important tools in controlling costs and reducing the
burden on hospitals. The coronavirus pandemic has increased demand for analytics, while
there is also a growth in medical applications that provide both diagnostics and treatment.
As validation of medical technology is a very rigorous process, the time to market is longer
than in other sectors.
Automotive
In 2021, the automotive sector was still feeling the effects of the production shutdown in
2020, as component suppliers shifted to new clients and were unable to fulfil all orders.
Following the rapid growth of new incumbents in the market for electric vehicles, traditional
car manufacturers are now all shifting investments towards electrification. Thanks to our
pioneering role in charging technology in and outside vehicles, we are well positioned to
respond to this trend. For the coming years, our expertise in the area of interoperability
between different IoT solutions offers growth potential in autonomous driving solutions.
The rollout of the 5G network will accelerate the development of autonomous cars, given
how this allows cars to communicate more intensively with each other.
Industrial
The industrial sector has taken more time to recover from the impact of the coronavirus
pandemic, but is now catching up in terms of economic performance. The Manufacturing
Purchasing Managers Index remained strong in 2021, demonstrating confidence in the
continuation of the economic recovery. The pressure from investors and government on
manufacturers to lower the carbon footprint of production is driving demand for more
efficient and sustainable systems.
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REPORT OF THE
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REPORT OF THE
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STATEMENTS
OTHER
INFORMATION
About Neways / Markets and trends
Power & energy
As a result of the energy transition, the increasing popularity of e-mobility and the
greater share of renewable energy in the energy mix, the energy grid is becoming
more decentralised. This requires more control and monitoring. A higher control load
on the grid means greater demand for smart systems.
Additionally, the robotisation of production and distribution is accelerating. With our
Power-Management-related technology roadmaps we are well positioned to help our
customers integrate battery-powered robots into their production process.
Agriculture
To comply with the stricter limits set for carbon and nitrogen emissions the agricultural
industry is turning to high-tech solutions. Sensing technologies and systems for the storage
and filtering of emissions can limit the use of fertilisers and pesticides and reduce the
ecological footprint of the sector. Robots are, for example, used to separate solid and
fluid manure, resulting in a significant reduction in nitrogen emissions from livestock.
Industrial automation
Through the remote monitoring of our customers’ installed base, we can predict more
precisely when maintenance is needed, thus lowering the total cost of ownership of
high-tech equipment for our customers. Furthermore, industrial process automation is
continuing to spread to more and more sectors. On the one hand, the demand for
robotics is growing, while on the other there is an increasing need for data collection
to assess, monitor and improve the performance of processes.
Value Creation Model
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OTHER
INFORMATION
Financial resources
• Net debt /EBITDA 2.5
• Interest coverage 8.5
• Solvency 37.7%
Production facilities
• High-tech facilities in
the Netherlands (6), Germany (3),
Slovakia (1), Czech Republic (1)
and China (1).
Intellectual resources
• > 50 years technology knowledge
• > 500 engineers
Human resources
• 2,600 employees
Social resources
• Network of suppliers
Natural resources
• Energy consumption 80.67 TJ
• Water consumption 19.663 m
3
Financial
(in €mln)
• Net revenue €469.5
• Order portfolio €364.3
• Order intake €613.5
Production
• Chain control
• Innovation
• Operational excellence
• Global footprint
Intellectual
• 30 technology leaderships
Human
• 150 high-quality technology
training and E-learning modules
• Zero major incidents
• 3.6% Sickness absence rate
Natural
• Energy efficiency ratio 0.171
(TJ/€ millions revenue)
• Water efficiency ratio 41.88
(m
3
/€ millions revenue)
Contribution to
Semiconductors
Electrification
in Automotive
High tech system
solutions in Medical Care
Industrial Automation
Perform
Grow
System
Innovator
Position
Upstream
Solutions
System
Scale-up
Downstream
Solutions
Customer
Intimacy
Added value Outcome & ImpactInput Output
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About Neways / Ambition and strategy
We have the capacity to lead and make our customers more successful
with our knowledge and expertise. This is what we call system innovation.
System refers to our ability to have an in-depth understanding of our
customers’ integrated products and systems. As an innovator we leverage
our expertise and experience to contribute to a more competitive product,
from design & development to assembly, and ultimately to integrated
lifecycle management.
To truly understand our customers’ needs and offer innovative solutions we will continue to
invest in our own expertise, and we will also build strong relationships with key knowledge
partners, resulting in growing interdependence in the supply chain. We aim to leverage our
technological knowledge gained in high-tech growth sectors to become an indispensable
partner as a System Innovator. One of the ways we will do this is by using our knowledge
to shape use cases with applications in various sectors, helping our customers to become
more successful. The main drivers for this transformation are professionalising our processes,
intensifying internal cooperation, and stimulating the exchange of knowledge. This is why
the second pillar of our strategic ambition is to become OneNeways.
OneNeways is about connecting the dots in our organisation, between our people and our
processes. We organise our operations such that we can present one face to the customer,
with cross-functional teams across all of our businesses. In addition we structure our key
processes for operational and service & support excellence. This is organised in the
OneNeways operating model.
OneNeways operating model
In 2021 Neways produced the following deliverables:
• A clear operating model defined
• Six cross-functional segment teams established, presenting one face to the customer
• Operational and service & support excellence deployed for key global functions with
benchmark performance
• Operational processes and performance management standardised.
Deployment
To accelerate the deployment of our strategy for System Innovator we designed
a transformation programme. This programme is organised into 5 work streams:
1. Strategic objectives and strategy deployment process
2. Change communications & Culture programme
3. Control model and performance management
4. Operational & Support Excellence
5. Commercial & Technology Excellence
Ambition and strategy
System
Innovator
Advanced and
differentiated
technology
solutions across
the entire
lifecycle
System Innovator Solutions
Automotive
Industrial
Medical
Semicon
Sales & NBD
Global Supporting Functions
Procurement
Operations
Engineering & Quality
All other supporting functions,
Finance, HR, IT, Legal, etc.
Customer solutions
Supporting functions
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About Neways / Ambition and strategy
System Innovator roles mapped along product lifecycle and value chain
Strategic objectives and strategy deployment process
We use our global footprint to offer our customers a broader range of services and we
utilise our centres of expertise to develop new products. We develop and produce
prototypes, pilot projects and more complex products in our knowledge-intensive
operating companies and we have offshore high-volume production at our operating
companies in the Czech Republic, Slovakia and China.
We are currently starting up a prototype production facility in Silicon Valley in the US. With
our global footprint, we not only offer customers optimal pricing during the lifecycle of their
products, we can also support them continuously via production sites that align with their
strategic and geographic markets. The objective of this stream is to assure that all our
entities across the globe and our functional departments work with a clear strategy, with
aligned focus areas. This way we assure that all our improvement initiatives are aligned and
accelerated in the same direction.
01
Strategic objectives and strategy deployment process (accelerate)
• 5-year strategy plan
• Management agenda top teams
• Hoshin Kanri deployed up to TL level
• Culture programme launched (values & behaviour)
• Leading coalitions built
• Story and proof points changed for clarity on operating model
• Performance mgt system aligned for shop floor up to board level
• Reporting system matrix with operational and support (functions) views
implemented
• OC transformations complete (Riesa, Next)
• OneNeways project deployed
• Optimised service/cost balance per function
• Lean, PM & S&OP standards implemented
• Segments and teams implemented
• 2 scores SI cases, 25% 2023, 50% 2025
• Tech roadmaps implemented
Work streams
Output deliverable
02
Change communications & culture programme
03
Control model and performance management
04
Operational & support excellence (Key E2E processes)
05
Commercial & technology excellence (System Innovator)
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About Neways / Ambition and strategy
Change communications & Culture programme
Neways is a people-oriented company, one with attention for each employee and their
personal development. We are strengthening the management expertise in the operating
companies and have initiated programmes to stimulate and facilitate the exchange of
knowledge. By streamlining internal communication, we improve allocation and optimise
the use of production capacity in our operating companies. Through standardisation of
our business processes, procedures and systems and harmonisation of our corporate
culture, we can present our company and products to our customers in a unified way:
OneNeways.
We use the successes of our System Innovator strategy as proof points in our
communications with external stakeholders, creating a change story that provides
clarity on our operating model. The objective of this stream is to make sure we enable
our people to lead and participate in this change with pride and energy so that they
can contribute to the company’s ambition in a coherent way.
Control model and performance management
Neways controls robust and effective global supply chains that perform at the highest level
and that are aimed at achieving continuous improvement in quality, delivery reliability,
technology deployment, efficiency and sustainability (QLTCS
1
). With the increasing demand
for circular production and more sustainable production processes, there is more demand
for Neways’ expertise in the field of maintenance and extending the lifespan of products.
The objective of this stream is to design, implement and utilise a coherent performance
management system that supports the effectiveness of our operating model. Given that
our operating model is based on the principles of the matrix organisation, our control
model combines performance management in our operating entities (local firepower)
with functional control over the different areas of the operating model (global control).
Operational & Support Excellence
With the rollout of OneNeways, the processes and best practices in our group are unified
and uniformly organised. Examples of this are the rigorous technical standards that apply to
suppliers for the Automotive sector and the highest standards for technical cleanliness from
the Semiconductor sector. Neways meets these high production standards and also
introduces these methods in other areas of expertise to continuously minimise the rate of
failure of our products. The objective of this stream is to come to standardised processes
and functions, executed to world class performance standards, supported by global IT
systems.
Commercial & Technology Excellence
Understanding the customer and operating with a ‘one face to the customer’ approach is
essential to achieve commercial excellence. Neways’ high level of involvement as a System
Innovator means that customers are in close contact with one single Neways team that
understands their product and can support them at every stage of the lifecycle of a product.
With the instalment of six cross-functional segment teams we also present one face to
the customer and support them in becoming more successful. We do this developing
applications and minimum viable products in the field of our centres of expertise such as
Power Management, Sensing & Control, and Connectivity. The objective of this stream
is to install cross-functional, market-oriented teams who bring our technological roadmaps
to the markets and position Neways as a System Innovator.
1
Quality, logistics, technology, costs and sustainability
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Report of the Board of Directors / 2021 - Accelerating our transformation
REPORT OF THE BOARD OF DIRECTORS
2021 - Accelerating our transformation
2021 was a year of both recovery and acceleration. The coronacrisis has
impacted all businesses and the effects on the economy, especially through
material shortages and later price increases, will also be felt in the coming year.
In this recovering world, still struggling with opening up, we have successfully
accelerated our transformation. We saw a strong improvement in our margin,
primarily as a result of more deliberate choices, positive mix effects and
a strong focus on offering higher added value. We also managed to limit
the impact of international supply chain disruptions on our margins. This
in combination with our OneNeways transformation, led to the recovery
and improvement in our profitability.
Thanks to the downsizing of less profitable turnover, this was slightly lower in 2021 than
in 2020 and turnover growth with existing clients was limited by shortages of materials
and supply chain disruptions. On the other hand, strong demand resulted in a well-filled
order book at the start of the new year. The recovery in the Automotive market is continuing
and the number of long-term projects in other market sectors, including Medical, are now
starting to translate into higher order intake. The demand in the Semiconductor sector is
still very strong and we expect this to continue in the year ahead.
In terms of our strategy, we are well on schedule. We are making increasing headway in
our positioning as a System Innovator, in which we are focusing increasingly on providing
our clients with greater added value. For instance, we gained a number of new clients last
year, divided across all our strategic market sectors, and at the same time saw continued
growth in our pipeline of prospects. We also made solid progress in our transformation
to OneNeways, which is helping to make our organisation more efficient and to optimise
the delivery of our services to our clients.
In 2022, the ongoing supply chain disruptions, high energy costs and rising inflation
could have a dampening effect on our turnover growth and/or our profitability. Despite
this, we are in a good starting position for 2022. Our order portfolio is well filled and we
will continue to offer high-grade solutions to continue to strengthen our competitive
position and to improve our profitability. We are seeing increasing demand for these
solutions from our clients and we will continue to invest in distinctive innovative
technologies that contribute to the energy transition, the growth of the semiconductor
industry and high-grade medical solutions.
Board of Directors
From left to right:
Eric Stodel (CEO),
Steven Soederhuizen (COO),
Paul de Koning (CFO)
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Report of the Board of Directors
Financial and operational overview
€ million unless otherwise stated 2021 2020 Δ
Net revenue 469.5 478.6 -1.9%
Order portfolio (at year-end) 364.3 225.0 61.9%
Order intake 613.5 416.4 47.4%
Book-to-bill (ratio) 1.31 0.87 50.2%
We deliberately chose to bid farewell to several clients with less profitable turnover.
Continued turnover growth with our existing clients was limited due to the impact of
persistent material shortages, especially in the Automotive sector. Our order intake
increased by 47.4%, driven by increasing demand from the Automotive and Medical
sectors and continued strong demand from the Semiconductor sector. We are seeing
a continuation of that recovery in 2022.
Net turnover – per market sector
€ million unless otherwise stated 2021 2020 Δ
Industrial 131,1 144,3 -9.2%
Semiconductor 180,9 162,2 11.5%
Automotive 106,3 114,3 -7.0%
Medical 50,1 52,8 -5.1%
Other 1,1 5,0 -77.1%
Total 469,5 478,6 -1.9%
In the Semiconductor sector, turnover was up 11.5%, driven by continued strong demand
for electronic components. The decline in the Automotive and Industrial sectors was
primarily due to the downscaling of loss-making clients. Turnover growth with our existing
clients in these sectors was limited by persistent supply chain disruptions. However, we saw
a strong increase in order intake in all these sectors compared with 2020.
€ million unless otherwise stated 2021 2020 Δ
Gross margin 183.9 175.6 4.7%
Gross margin as % of net turnover 39.2% 36.7% n/a
Normalised EBITDA
1)
27.5 21.7 26.7%
Normalised EBITDA als % of net turnover 5.9% 4.5% n/a
Normalised operating result
2)
14.7 7.9 86.1%
Normalised EBIT margin
2)
3.1% 1.7% n/a
1) 2021: Excluding consultancy costs public bids (€1.6 million) and release of reorganisation charge (€-/-0.2 mln); 2020: Excluding
one-off reorganization charge (€9.6 million).
2) 2021: Excluding PPA effect (€0.7 million), consultancy costs public bids (€1.6 million) and release of reorganisation charge
(€-/-0.2 million); 2020: Excluding PPA effect (€0.7 million) and one-off reorganization charge (€9.6 million). The PPA is related
to the acquisition of BuS Groep in 2014.
As a percentage of turnover, the gross margin improved to 39.2% from 36.7%. This was
largely due to positive mix effects and a stronger focus on higher added value activities.
Neways managed to limit the impact of higher material and logistics costs in connection
with the disruptions in the supply chain thanks to strict chain management, close
cooperation and improved agreements with clients.
Neways’ operating expenses, excluding depreciation and amortisation, increased by 1.6%
to €156.4 million. Personnel expenses rose by 2.0% to €130.1 million. In 2021, Neways
completed the reorganisation in Germany and the integration of two units in the
Netherlands, and this led to a reduction in the number of employees of around 170 FTEs.
To meet the strong demand, Neways also opted for a targeted increase in capacity using
both permanent and flexible staff. On balance, the total number of FTEs at year end was
around the same as at year-end 2020. Operating costs are excluding €1.6 million in one-off
consultancy costs related to the public bids and a €0.2 million release from the previous
year’s reorganisation charge.
Normalised EBITDA increased by 26.7% to €27.5 million in 2021 due to the focus on
profitable turnover growth. The normalised operating result rose by 86.1% to €14.7 million,
which corresponds with an operating margin of 3.1%.
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Report of the Board of Directors
€ million unless otherwise stated 2021 2020 Δ
Financing expenses (net) 1.7 2.1 -16.6%
Tax rate 19.7% –13.7% n/a
Net profit 8.7 –3.9 n/a
Earnings per share (€) 0.71 –0.32 n/a
Financing expenses declined by €0.4 million as a result of lower credit use in the first half
of the year. The tax rate increased to 19.7% in 2021. The tax rate was lower due to tax loss
carry-forwards in Germany at a higher tax rate. In 2020, Neways recognised a tax asset as
a result of the losses in Germany and the tax asset was added to the provision for tax loss
carry-forwards. The number of outstanding ordinary shares stood at 12,270,134 at year-end
2021, which resulted in earnings per share of €0.71.
Dividend
Since the General Meeting of Shareholders held in 2015, Neways dividend policy has been
to pay out a maximum of 40% of its profit after tax as dividend. In view of the current, much
simplified shareholder structure, with a shareholder that holds virtually the entire issued
capital following a public bid, the Board of Directors and the Supervisory Board believe it
would be appropriate to deviate from this dividend policy. The proposed dividend pay-out
falls within the parameters laid down in the articles of association, the legal framework and
agreements laid down in the company’s bank financing.
Neways will propose that the General Meeting of Shareholders pay out a dividend of
€1.06 per share for 2021, to be paid from the retained earnings reserve recognised in the
financial statements. Neways will also propose to the General Meeting that, as stated at
the General Meetings of Shareholders held in 2020 and 2021, it pay out the dividend for
2019, of €0.28 per share, to be paid from the retained earnings reserve. The latter dividend
proposal was withdrawn on 16 April 2020, due to the uncertain situation at the time
regarding the Covid-19 pandemic.
Financial condition
€ million unless otherwise stated 2021 2020 Δ
Operational cash flow -29.0 40.9 -170.9%
Net working capital 112.0 60.4 85.4%
Investments -4.4 –3.3 33.3 %
Net cash flow -33.4 37.6 -188.8 %
The net cash flow came in at a negative €33.4 million, due among other things to higher
working capital utilisation and higher cash out in connection with the reorganisation in
Germany and the combination of two units in the Netherlands announced at the end of
2020, plus the payment of taxes to the government that were deferred in early 2021 due
to Covid-19.
Net working capital increased by 85.4% to €112.0 million, compared with €60.4 million at
year-end 2020. This was driven by an increase in inventories in anticipation of stronger
demand, persistent supply chain disruptions, the scarcity of components and the deliberate
choice, in consultation with our clients, to lay in extra inventories to guarantee deliveries.
This had resulted in an inventory turnover rate, measured in days of realised turnover, of 110
days at year-end 2021, compared with 69 days at year-end 2020. The number of days sales
outstanding had risen to 41 days, six days higher than at year-end 2020, largely driven by
higher turnover in December. The number of outstanding days payable ended at 56 days,
six days higher than at year-end 2020. Neways expects the scarcity of components to
continue for a large part of 2022, and our focus will therefore be on strict working capital
management to control the impact of this scarcity.
Besides the start of the construction of a new production facility of approximately 15,000m
2
in Slovakia, no large changes in our investment plans are expected in 2022.
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Report of the Board of Directors
€ million unless otherwise stated
Year-end
2021
Year-end
2020
Net debt / EBITDA 2.5 1.5
Interest coverage
1)
8.5 3.8
Solvency
2)
37.7% 43.6%
1) EBIT divided by interest expenses
2) Shareholders’ equity divided by the balance sheet total
The improvement in the interest coverage was a direct consequence of the improved
profitability and the lower interest expenses due to the limited use of credit in the first half
of the year. The decline in solvency at year-end 2021 was due to the sharp rise in working
capital utilisation, which was offset only to a limited degree by the increase in shareholders’
equity. At the start of 2022, the current credit facility was increased to €80 million from
€65 million, with covenants unchanged.
After working as a product manager in the protective packaging industry, I joined Neways
as an account project manager at Neways Cable & Wire Solutions in December 2020.
My ambitions and interests lay more in the area of sales, for which I got the opportunity
at Neways. Getting acquainted with the world of connectivity is something I really enjoy;
I never knew how important cables can be!
The role of account project manager is diverse and challenging, I am intensively involved
with our clients on a day-to-day basis. Because of that close involvement and knowing their
industry, we understand their needs and we attune our actions pro-actively. This enables us
to identify opportunities or problems at an early stage. We try to think along with the
customer in order to optimise their product. In my role, it is also important to constantly
monitor the process and ensure that we deliver on the KPIs that were set on the outset
of a project. Of course there is also a bit of new business that you explore as an account
project manager.
It was challenging to start at Neways during the coronavirus pandemic, but fortunately new
employees were allowed to come to the office a few days a week, which made it possible
to meet new colleagues and get to understand the sense of my role and the nature of the
company itself.
I am really glad that I have joined Neways. We operate in a very interesting market and,
as an extra, you work for a company where there is a nice, warm family feeling. Despite
the fact that we all have different functions and work from different locations, it really feels
like one team.
Customer Contact
EXPLORING NEW TECHNOLOGIES
SILVIA VREULS
ACCOUNT PROJECT MANAGER
NEWAYS CABLE & WIRE
SOLUTIONS
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Neways is in a strong position for 2022. Our order book is well filled and we
will continue to offer more high-grade solutions to improve our competitive
position even further and to increase our profitability. We are seeing increasing
client demand for our System Innovator solutions and we will continue to invest
in distinctive innovative technologies that contribute to the energy transition,
the growth of the semiconductor industry and high-grade medical solutions.
At the same time, continued supply chain disruptions, high energy costs and
rising prices for electronic components could have a dampening effect on our
turnover growth and/or results in 2022.
Exploring technologies for a sustainable future
Together with our new shareholder Infestos, we are looking to accelerate our transition and
we will focus even more expressly on innovative systems that help create a more sustainable
economy. Under pressure from the energy transition, we will see a rapid increase in demand
for complex and smart electronic systems in all our end markets.
At the same time, via our OneNeways transformation, we will invest in intensifying the
collaboration between our operating companies and the harmonisation of our operating
processes. We started the roll-out of this transformation in 2021 and we will continue with
this process in 2022. In the coming months, we will provide more information on our
chosen strategy and our priorities for the years ahead.
Outlook
If we look beyond the immediate future, Neways is in an excellent position in its
strategic growth sectors, with increasing demand for more and more complex systems
and high-grade technological innovations. We have every faith that we are on the right
path to using our know-how and expertise to provide our clients with a broader range of
products and services in the years ahead. Strengthening our long-term partnerships with
clients even further puts us in an excellent position to take maximum advantage of this
position and by doing so take Neways’ profitability to a structurally higher level in 2022
and the years beyond.
Report of the Board of Directors
Management agenda and outlook
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Report of the Board of Directors / Organisation and employees
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Neways’ transition towards a role as System Innovator requires a new way of
working. As our organisation took shape through the integration of multiple
companies – now comprising fourteen locations on three continents – we
gathered a wide range of compatible areas of expertise. To enhance one way
of working and stimulate the exchange of knowledge between operating
companies, we have established the values and goals that bind us, forming
the ‘Neways DNA’. Halfway through 2021, our transformation programme,
aimed at rolling out our new strategy, was brought to life. The overarching
goal is to bring about the necessary behavioural changes within the company,
to perform as OneNeways, and be the System Innovator within the top 5
players in the EMS market.
Organisation
The Neways holding company is responsible for the strategic and financial management
of the group. In 2021, two change managers were appointed to drive and accelerate
the transformation programme, together with the 5 workstream leaders responsible
for, respectively, Strategy Deployment, Culture Change & Communication, Control
and Performance, Operational and Service & Support Excellence, and Commercial and
Technology Excellence.
Our people make the difference and will help us implement the new strategy, which is
why one workstream focusses specifically on Culture Change & Communication. With
new values and matching behaviours, our leaders – who will participate in a leadership
programme – are empowered to develop their team and boost its performance.
Each operating company has its own HR manager who, under the leadership of Corporate
HR, works together with the others to further develop Neways and its employees.
Staff mix
At year-end 2021, Neways employed approximately 2,600 people, with 2,400 of these on
the Neways payroll and the remainder employed through agencies. Of the total 55% are
male and 45% female. Neways aims for a balanced workforce and maintains a flexible team
who can be called in to respond to fluctuations in demand. For 2022, Neways expects
a slight increase in number of employees.
Organisation and employees
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Report of the Board of Directors / Organisation and employees
People development
Each year we select a group of young potentials among the Neways employees to join the
‘Young Impact Program’. During this twelve-month programme, the participants work in
groups on improvement projects focused on Neways and work individually on their personal
and professional growth. In 2021, the second edition of this group-wide/international Young
Impact Program was a great success, despite limitations to organising regular, in-person
group sessions due to Covid-19. The 14 young potentials who participated in the edition
held between November 2020 and November 2021 worked on their personal development
and on two impactful projects. For one of the projects, Future Work Environment, several
working groups comprising talents from various operating companies focused on the
future working environment of Neways. Their output can be used by leaders at Neways for
inspiration or as a guide for the future. The other project – New ways of getting connected –
was all about increasing intercompany communication between specialists at various sites in
order to expand knowledge sharing within Neways.
The group of young potentials is guided by their superiors and a personal mentor, who all
attended a series of courses to assist the group in the learning process. Young potential
Douwe Kuipers elaborates on the different aspects of the training programme and his
personal experience on page 30.
To encourage everyone at Neways to learn new job-specific skills or work on their personal
development we launched the Neways Academy. Even more so in these times of Covid-19,
we encourage personal development via digital e-learning modules. All employees have
access to a wide variety of high-quality courses in English, German and Dutch. We added an
extra e-learning tool to our learning management system Ozone, a platform we share with
other industrial companies related to our type of business. The good thing is that we as a
company also learn from this collaborative platform. We use the courses for onboarding and
to train our workforce on technical knowledge, company policies, processes, instructions,
health & safety, leadership, communication, sales, project management, and more.
Our courses are available to both new hires and seasoned employees, and we focus on each
employee individually. In addition, we have developed leadership training programmes,
such as train-the-trainer, to stimulate managers and engineers to become the change
facilitators of the System Innovator strategy.
Employee participation
Employee participation in the Netherlands is organised per operating company into
several works councils that are represented at the central level in the Central Works Council
(COR). In the past year they’ve met 12 times. In 2021, the COR successfully participated in
the formation of a home working scheme, where it is arranged that working from home will
still be facilitated once the government has dropped its advice concerning working from
home due to the Covid pandemic. Another matter for the COR last year was a request for
consent to enter into a new agreement with an occupational health and safety service.
Here, too, the COR committee worked together to arrive at a well-considered decision.
Report of the Central Works Council
In April the COR was informed that a takeover bid had been submitted by the VDL group.
The Supervisory Board did not support this bid, based on independent research that was
carried out. In mid-May Neways therefore announced that the talks with the VDL group
concerning a possible takeover had ended. At the end of June, investment company
Infestos submitted a takeover bid, which was supported by the Board of Directors and
Supervisory Board of Neways. After a COR consultation meeting, the Board of Directors
submitted an official request for advice on the Infestos' bid, which they recommended
accepting. The COR submitted an extensive questionnaire to Infestos and also received
answers from the owner of Infestos in a face-to-face meeting with the entire COR.
The COR is very pleased with the open and constructive way in which both the Board
of Directors of Neways and the people responsible at Infestos communicated and
worked with the COR. The COR has therefore given a positive recommendation.
Employer attraction
In the area of employment, too, sustainability is an important topic for us. We participate
in multiple projects organised by universities in the Netherlands and Germany to develop
future-proof and low-carbon technologies. Examples of collaborations are attending job
fairs, sponsoring projects like a solar boat project for students in technical studies at
a selective secondary school, offering regular and graduate internships, and the
development of an electronics pre-switching program.
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The OneNeways project continues to be carefully rolled out within all parts of the
organisation. Leadership training courses have also been developed so that managers
can implement our new culture within their teams. The first leadership training courses
have been successfully conducted at a number of operating companies. Based on the
train-the-trainer principle, the managers who have completed this course are expected
to act as change facilitators in the organisation to bring about the culture change within
their team.
We are always looking for highly skilled technical talent and, despite the scarcity in this field,
we are successful in hiring and retaining people. We offer a welcoming non-hierarchical
working environment, which offers new talent more flexibility to be entrepreneurial and
creative and quickly develop themselves.
Engagement
As well as communicating externally (e.g. LinkedIn) and within our organisation via intranet
(Neways4U), we are increasingly using co-creation between various people at Neways
(an approach also referred to as ‘social innovation’). In this process, people from the Works
Council, management, and specialists at various levels work together to revitalise and/or
adjust policies, processes, etc. In this way, together we create a pleasant environment with
policies that fit in well with our employee base.
Adjustments in the organisation
In the course of 2020, a critical examination of the composition of teams was carried out in
the Netherlands and Germany. Following this examination, a number of adjustments were
made to align the size of the workforce to the economic reality at that time.
The reorganisation was finalised in 2021 and affected the Netherlands and Germany. For the
Netherlands we were able to guide everybody as well as possible in finding a new job. We
invested in outplacement and we successfully redeployed a number of employees internally.
For Germany, the social plan consisted of several parts. Older employees were able to retire
a little earlier, for others a voluntary departure scheme was developed and the principle of
balanced representation was applied. Because many people chose to retire earlier or
decided to leave the company voluntarily, fewer people needed to be laid off.
Coronavirus Taskforce
The Coronavirus Taskforce has been in place since March 2020. This taskforce closely
monitors the situation concerning Covid-19 in the regions where we are located, discusses
the various measures to take, and keeps Neways personnel updated on all of this. They
keep a close eye on the local guidelines for all operating companies and also conduct
contact tracing in the event of a Covid-19 infection among Neways personnel. This taskforce
meets frequently to monitor the coronavirus situation as closely as possible and to provide
guidance in the organisation so that our people can continue to work safely and proceed
with their daily tasks in the best possible way.
Since 1 November 2021, our official remote working policy has been implemented in the
Netherlands; the other countries will follow in 2022.
In 2012, I got a job as a developer at a small technology company, where I completed my graduation project
for my Bachelor’s in electrical engineering. Later that year, this company was acquired by Neways. At Neways
Technologies I started as a designer, where I was responsible for developing embedded systems. I really liked
the interaction with customers and so I was asked to be the lead designer in several projects. Every client
requires a different approach, and by collaborating closely you come to understand how to fulfil the clients’
needs and wishes and develop the best product for them. Three years ago I was asked to fulfil the role of
project manager, to which my answer was a heartfelt yes.
Last year, I felt really flattered to be asked to participate in the Young Potential Impact Programme. For me the
impact programme has been extremely interesting and insightful. For twelve months, we focused on bringing
our leadership skills and people-focused skills to a higher level, we received feedback on our behaviour and
way of thinking and had to carry out assignments to practice and improve our skills. This was all guided by
a coach, my personal mentor, and my leader.
The programme participants were assigned to work on self-conceived improvement projects. Two projects
were developed, one of which was called ‘New ways of getting connected’, which focused on improving
knowledge sharing between our different OCs. The other project, which I joined, was called ‘Future working
environment’, which was all about the future working environment of Neways. The output was a manifesto
containing powerful statements on this topic, which our leaders can use as guidance and inspiration.
At the end of the year we were all asked to present our ‘impact journey’ in front of a large audience, including
our Board of Directors. It was very impressive to hear how everybody experienced the programme and to
see how everyone had grown on a personal and professional level. I think I can speak for all programme
participants when I say that the presentation was another highlight and a wonderful ending to a year that
really impacted our lives.
During the coming year I would like to take the time to apply the knowledge and skills I have gained. The
Impact Programme revealed a number of aspects that I would like to develop further to continue my personal
and professional growth and be ready to take the next step in my career. In the meantime we are working on
challenging projects with edge computing and smart grid technologies, contributing to the energy transition.
Regarding these projects, I really see our added value as a System Innovator and in the way we interact with
our customers. We continue to explore new technologies, and I see great opportunities for us at Neways.
Young Impact Program
EXPLORING NEW TECHNOLOGIES
DOUWE KUIPERS
PROJECT MANAGER
NEWAYS TECHNOLOGIES
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At Neways we explore technologies that contribute to a more sustainable
future and we strive to limit the environmental impact of our operations.
For us corporate social responsibility is about being committed to the
communities we work and live in. This means that we offer a safe working
environment with attractive jobs for local talent, we are constantly looking
for ways to increase the local sourcing of materials, we conscientiously use
scarce resources through the reuse of materials, and we are committed to
reducing our carbon footprint and water usage.
Every year we assess and compare our performance to previous years on the following
performance indicators, with 2018 as base year:
• Safe working environment
• Efficient use of energy and water
• Waste management and reuse of materials
In addition to these performance indicators, we monitor the percentage of components
sourced locally and undertake due diligence to ensure suppliers are not using conflict
minerals. As part of our commitment to a sustainable future we also want to share our
passion for technology with the next generation and encourage young people to choose
a career in technology.
Safe working environment and healthy employees
Providing a safe working environment and protecting the health of our employees is a top
priority at Neways. In 2020, we modified the work place to enable social distancing and we
introduced and continued contact tracing to minimise health risks for employees at the
workplace. At the same time, working from home for a longer period of time was also
specifically addressed, given the potential risk to employees’ physical and mental health.
Our policy with regards to COVID-19 is more extensively discussed in the ‘Organisation
and Employees’ section on page 29.
The table below shows the number of injuries and near-misses and the sickness absence
rate for the entire Neways group in 2021. This report is based on the Global Reporting
Initiative (GRI) guidelines. We encourage all employees from every operating company
to report all unsafe situations, incidents and injuries to their management.
Injuries can be categorised as recordable and non-recordable. Non-recordable injuries are
those that do not result in sickness absence and only require standard first aid treatment.
Recordable injuries are those that require medical intervention or lead to sickness absence.
Serious injuries are by definition recordable.
• In 2021, 13 of the 132 injuries were recordable
• There were no serious injuries in 2021
• The number of injuries in 2021 was lower than in 2020
The Total Recordable Injury Frequency Rate (TRIFR) compares the total number of
recordable injuries to the total number of hours worked during the same year. The TRIFR for
Neways came to 0.50 in 2021, which is a slight improvement relative to the 0.56 in 2020.
In 2021, 110 near-misses were identified. The higher number of near misses in 2021 can be
attributed in part to the fact that more attention is being paid to reporting unsafe situations.
Incidents and sickness absence 2021 2020 2019 2018
Serious injuries 0 0 0 0
Minor injuries 132 150 118 110
Near-misses 110 46 79 67
Sickness absence rate 3.6% 4.3% 4.2% 4.8%
Employee commitment and education play an essential role in preventing and resolving
incidents and preventing long-term sickness absence. We aim to increase safety awareness
throughout the organisation by raising our employees’ awareness of health and safety risks
and making it easier to report incidents and injuries – including minor ones – and near-
misses.
In 2021, we invested in training motivated employees as Safety Officers. Regularly
scheduled safety audits and recording safety notifications have been implemented at all
companies. The face-to-face briefings regarding safety at work, which were conducted
online in 2020 due to COVID-19, were reintroduced last year.
Corporate Social Responsibility
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Based on the incident reports we continue to improve our safety measures, such as
measures aimed at preventing slip, trip and fall accidents, and posting additional signs for
specific hazards at work, such as noise in the work area and working with ultraviolet light.
The safety policy is regularly assessed by the management teams at the individual operating
companies. Members of the Safety, Health, Welfare and Environment Committee at the
individual sites regularly perform safety inspections at their facilities accompanied by
a representative of the management and a member of the Company Emergency Response
Team (CERT). Other safety activities include regular Company Emergency Response and
First Aid training courses and regular evacuation drills to ensure that everybody can respond
adequately should an emergency arise.
In the Code of Conduct, we record our commitment to respecting human rights and good
working conditions, interacting with each other respectfully, and integrity and ethical
conduct. All our employees embrace the values described in the Neways Code of Conduct,
which is included in our e-learning environment and available for reference on the corporate
website (www.newayselectronics.com).
Efficient use of energy and water
In addition to exploring technologies that can accelerate the energy transition, we also
strive to reduce our own carbon footprint and limit the use of water in our production
processes. When building new production facilities, we ensure compliance with modern
energy efficiency standards and we continue to develop our existing facilities to improve
energy efficiency and install more capacity for the generation of renewable energy.
Energy
Based on the findings of the energy audit performed in 2019 in accordance with the EU
Energy Efficiency Directive, Neways has implemented a range of energy-saving measures
over the past two years. We assess the results annually and in 2021 we implemented
the following energy saving measures:
• replacing traditional lights with LEDs at several locations
• implementing good housekeeping practices, such as instructions for energy efficient
use of equipment
• installing timers to control equipment
• optimising HVAC systems
• performing energy surveys to further reduce power and gas consumption
In 2022, we will continue to replace traditional lighting with LEDs and introduce smart
kWh measurement devices to improve visibility into our energy consumption. The rollout
of CO
2
-controlled ventilation will further reduce energy consumption and will help ventilate
our operating facilities by adjusting the CO
2
level to the number of people present in
a given space.
In 2021, Neways added the annual figures of our Czech site to the group total. These figures
had not previously been included. As a consequence our total energy consumption
increased, and the energy efficiency ratio increased to 0.17 (TJ/€ millions). For the other
sites the energy efficiency ratio remained at the same level as in 2020.
Energy consumption 2021 2020 2019 2018
Energy consumption (TJ) 80.67* 74.92 79.26 80.29
Energy efficiency ratio (TJ/€ millions) 0.171* 0.157 0.149 0.158
* Includes the energy consumption of one extra site
As per November 2021 all sites in the Netherlands are using green electricity, which avoids
the use of fossil fuels and the generation of combustion emissions. Neways reduces carbon
emmission by approximately 3,400 tonnes of the greenhouse gas CO
2
annually.
In addition to reducing the use of fossil fuels, the company’s lease car policy in the
Netherlands recommends the use of electric vehicles, and charging points are available
in the car parks at sites in the Netherlands. Furthermore, working from home and the use
of video conferencing has reduced commuting and business travel, which in turn reduces
fuel consumption and combustion emissions (including CO
2
).
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Water
Reducing our water usage is a priority for Neways.
The table on this page shows the absolute water usage within the group and the relative
usage based on revenue. Our objective is to achieve a better water efficiency ratio,
i.e. the number of cubic meters (m
3
) divided by the revenue in millions of euros.
The water efficiency ratio showed an improvement in 2021. Water is mostly used for
cleaning and sanitary activities. Water usage declined due to a lower staffing level and
people working from home due to COVID-19.
Water consumption 2021* 2020 2019 2018
Water usage (m
3
) 19,663 23,936 27,583 25,336
Water efficiency ratio (m
3
/€ millions) 41.88 50.01 51.75 49.99
* Includes the water usage of one extra site
Waste and reuse
Neways limits its use of raw materials and consumables by making production processes
more efficient and by recycling waste to the greatest extent possible. During the past year,
waste figures for some sites were based on actual weight instead of using an average weight
per volume. We continuously monitor the effects of waste reduction initiatives in terms of
the total reduction of waste in our waste streams, and we roll out successful projects to the
other operating companies.
At Neways Leeuwarden (NEL), a new stencil cleaning agent was introduced, which increases
the tool’s service life, hence reduces waste.
The table below shows Neways’ waste streams, split into chemical and industrial waste.
The figures include both total quantities and the percentage of the plastic and other
materials that Neways recycles as a group. Chemical waste showed an increase due to
adding the waste streams of an additional site.
Waste and recycling 2021* 2020 2019 2018
Waste (total) x 1,000 kg 890 1,008.6 1,011.8 936.8
Chemical waste x 1,000 kg 33.3 24.1 35.8 35.3
Industrial waste x 1,000 kg 857 674.7 737.8 764.8
Recycled waste (total) x 1,000 kg 441 779.6 751.8 598.6
Plastic waste (% of total) 13.3 14.2 11.5 12.2
Other materials waste (% of total) 49.5 63.1 62.8 51.7
* Includes the waste of one extra site
During the course of the year, Neways regularly checks its production emissions for the
presence of hazardous substances. Where possible, Neways is replacing hazardous
materials by less harmful materials, such as replacing ethanol by isopropanol. In addition,
the small quantities of dangerous substances we require for our work are kept in a locked,
explosion-proof room and each substance is stored in separate leak-proof containers.
Neways does not require environmental permits to carry out its operating activities.
Local sourcing of components
We are committed to making the supply chain more sustainable and strive to collaborate
with local partners. One of our objectives is to act as an advisor to our customers with
regard to limiting the carbon footprint of the supply chain. As a knowledge partner, we offer
authoritative guidance on responsible and sustainable production methods and compliance
with applicable laws and regulations relating to working conditions and the environment.
We set up our supply chains as efficiently as possible and try to limit their ecological
footprint by reducing the distances components have to travel. Where possible, Neways
collaborates with local suppliers: 77% of all materials and parts procured in 2021 were
purchased locally, compared to 65% in 2020. This is the percentage of the procurement
budget spent with suppliers within a distance of 600km from a Neways operating company.
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Fair supply chain and conscious choice of materials
Our Code of Conduct also explicitly prevents Neways from doing business with
organisations that violate fundamental human rights or do not operate in an ecologically
responsible manner. We have supplier selection and management processes in place that
include assessments on multiple criteria, including environmental aspects and the presence
of an environmental management system. The contracts we enter into with our suppliers
require them to comply with all applicable laws and regulations relating to working
conditions, corruption, the environment and other aspects.
We are particularly vigilant with regards to the procurement of tungsten, tin, tantalum
and gold, also known as 3TG, which may originate from conflict zones. Neways complies
with its supply chain due diligence obligation under the Conflict Minerals Regulation
(EU Regulation 2017/812), and with all other relevant regulations, as set out by the
Electronic Industry Citizenship Coalition (EICC), the American Dodd-Frank Act, and the
Responsible Business Alliance.
We help customers by identifying suppliers that may be using conflict minerals. We report
the findings of the mandatory due diligence checks using the Conflict Minerals Reporting
Template (CMRT). In 2021, 96.4% of our suppliers were known not to sell components
containing conflict minerals, a decrease of 1.4 percentage point compared to last year’s
97.5%. It is thought that the main reason for this decrease is related to component
shortages or, alternatively, fewer audits having been done due to COVID-19, which could
perhaps result in expired certificates not yet being renewed.
Getting young people interested in technology
Neways wants to raise society’s interest in science and technology and encourage pupils
and students to choose science, technology, engineering en mathematic subjects.
Neways and the City of Leeuwarden, in collaboration with the regional training centres
Friese Poort and Friesland College, implemented a unique training programme, the
Electronics preparatory course. Eight candidates attended school one day a week for ten
weeks and worked at Neways on the other four days. The school day consisted of theory
lessons and practical exercises such as in soldering. The training took place at the various
schools and at Neways. Many of the candidates were offered a job at Neways afterwards.
EU Taxonomy Regulation
Introduction
Regulation (EU) 2020/852 (Taxonomy) on the establishment of a framework to facilitate
sustainable investment (the EU Taxonomy Regulation) has introduced a classification
system for environmentally sustainable economic activities. This framework will create a
common language that investors and businesses can use when investing in projects and
economic activities that have a substantial positive impact on the climate and the
environment.
The EU Taxonomy Regulation sets out, and continues to develop, screening criteria
for economic activities that make a substantive contribution to six environmental
objectives, being:
1) climate change mitigation
2) climate change adaptation
3) the sustainable use and protection of water and marine resources
4) the transition to a circular economy
5) pollution prevention and control; and
6) the protection and restoration of biodiversity and ecosystems.
The European Commission has currently published screening criteria for the first two
objectives only. Based on these criteria Neways performed her eligibility assessment.
From 2023 onwards, Neways is obliged to report the alignment of its business activities
with the six environmental obligations. To this end, we will continue to assess whether
our business activities contribute to any of these six environmental objectives based on
(upcoming) screening criteria. In respect of the financial year 2021, we are obliged to
disclose the proportion of Taxonomy-eligible and Taxonomy non-eligible economic
activities in our total revenue, capital expenditure and operational expenditure.
Neways’ eligibility assessment
Whilst our electronic components are used across various industries in a wide-variety of
products that aim to contribute to a more sustainable environment, such as innovative
technologies in ‘power electronics’ and ‘energy conversion’, our current revenue, capital
expenditure and operational expenditure are not Taxonomy-eligible under the (current)
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screening criteria for the first two objectives of the EU Taxonomy Regulation. Being
Taxonomy-eligible is merely an indication that the EU Taxonomy Regulation indicates that
a certain activity could make a substantial contribution to one of the six environmental
objectives, i.e. the eligibility of an activity implies that it is included in either one of the
screening criteria of the first two objectives, climate change mitigation or climate change
adaptation. Whether an activity is Taxonomy-eligible or not does not necessarily say
something about the (un)sustainability of that activity.
Looking ahead
The EU Taxonomy Regulation continues to develop. The European Commission has set
up a permanent expert group that is inter alia tasked with advice on expanding and revising
the screening criteria, based on stakeholder feedback. A greater number of activities,
including those in which we engage, may become Taxonomy-eligible. We, for example,
are supporting the electric infrastructure for the electrification of transport as we produce
electronics that are used in electric vehicle (EV) charging stations, an activity that is referred
to in an updated screening criteria pack from this expert group. Therefore we will continue
our assessment in 2022 taking into account our strategy and sustainability reporting.
AUTOMOTIVE MEDICAL INDUSTRIAL SEMI-
CONDUCTOR
36 | 2021 ANNUAL REPORT
Electrically assisted turbocharger
The automotive sector is in a state of upheaval. Electrification of vehicles may be the biggest
change in the 100-year-plus history of the industry. Nowadays, not all cars are conventional
internal combustion engine (ICE) vehicles anymore: there’s a range of new electrically
supported variants like battery-powered electric vehicles (BEV) and plug-in hybrid electric
vehicles (PHEV).
As part of its ambition to be a technology leader and System Innovator, Neways wants
to participate and invest in this electrification trend.
As part of the ‘Neways Technology Road Mapping’, one of the key technologies that
Neways is investing in is the e-charger. Neways has successfully developed a prototype
e-charger which electrically assists a conventional mechanical turbocharger system.
Where a conventional turbocharger traditionally experiences turbo lag, the electrically
assisted turbocharger closes that gap, providing full turbo power immediately on demand.
In essence, the e-charger bridges the gap between old and new technology, allowing
hybrids to have access to power faster. However (and this is likely news to most), the
e-charger is a clean technology, helping reduce the carbon footprint of hybrid vehicles
by providing electrically generated turbo power.
To develop this innovative technology, Neways has brought together competencies and
expertise from multiple disciplines and sectors, allowing the technology to be further
adapted to the needs of our customers. And on a higher level, power electronics is a key
segment where we will be able to make an impact for our customers, thanks to the potential
of clean technology in general. This in turn serves our main goal of becoming recognised
as a System Innovator in all the key markets.
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Governance and compliance / Supervisory Board, Board of Directors and management team
SUPERVISORY BOARD*
Henk Scheepers (1949) (m) Chairman
Hans Büthker (1964) (m)
Deputy Chair
Karin de Jong (1979) (f)
Frank van Roij (1982) (m)
Erwin Riefel (1966) (m)
Henk Scheepers (m)
Appointed as Chairman in 2015
First appointment in 2012, Deputy Chair
Current appointment until 2022
Nationality: Dutch
Positions: Former Senior Vice President, ASML/Member of
the Executive Committee/Director, ASML Netherlands BV
Member of the Advisory Board, Trymax Holding BV
Hans Büthker (m) Appointed as Deputy Chairman in 2020
First appointment in 2020
Current appointment until 2024
Nationality: Dutch
Positions: Board member, FME (Dutch employers’
organisation in the technology industry) (until 1/5/2021)
Board member for High Tech Materials TKI-HTSM
(+ audit committee)
Board member of VNO-NCW (until 1/5/2021)
Member of the Advisory Committee for R&D Mobility
Sectors (RvO Rijksdienst)
Karin de Jong (f) First appointment in 2020
Current appointment until 2024
Nationality: Dutch
Position: CFO and member of the Board of Directors of
Fagron NV
Frank van Roij (m) First appointment in 2021
Current appointment until 2025
Nationality: Dutch
Positions: Investment Director Infestos Nederland B.V.
Managing Director ESG Core Investments B.V.
Erwin Riefel (m) First appointment in 2021
Current appointment until 2025
Nationality: Dutch
Positions: Investment Director Infestos Nederland B.V.
Chairman Supervisory board ESG Core Investments B.V.
Supervisory Board, Board of Directors and management team
Situation as at 31 December 2021
GOVERNANCE AND COMPLIANCE
* As of 5 November 2021, the Supervisory Board has been expanded with two additional members. Furthermore, it is proposed
to the general meeting of shareholders to add another member. The Supervisory Board has installed a Remuneration, Selection
and Appointment Committee and an Audit Committee in accordance with best practice provision 2.3.2 of the Dutch Corporate
Governance Code. The Supervisory Board has also installed a (voluntary) Strategy Committee. The duty of these committees is to
prepare decision-making within the Supervisory Board on the respective topics.
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BOARD OF DIRECTORS
Eric Stodel (1965) (m) CEO effective from 1/1/2020
Other positions:
Member of the Supervisory Board of TKI-HTSM
Topconsortium voor Kennis en Innovatie (TKI) -
High Tech Systemen & Materialen (HTSM)
Paul de Koning (1963) (m)
CFO
Other positions:
Member of the Supervisory Board,
Stichting Elkerliek Ziekenhuis
Steven Soederhuizen (1970) (m)
Interim COO effective from 01/01/2021
COO effectieve from 19/04/2021
Other positions:
None
NEWAYS SENIOR MANAGEMENT TEAM
Michael Berger (1969) (m) Managing Director, Neways Neunkirchen
Gerard Jacobs (1967) (m)
Managing Director, Neways Cable & Wire Solutions
Hans Ketelaars (1957) (m)
Managing Director, Neways Technologies
Bob Konings (1971) (m)
Managing Director, Neways Industrial Systems
Robert Loijen (1976) (m)
Managing Director, Neways Advanced Applications
Michel Postma (1972) (m)
Managing Director, Neways Leeuwarden
Erik Ziegler (1964) (m)
Managing Director, Neways Electronics Riesa
Wendy van der Bij-Hereijgers
(1977) (f)
Corporate Head of Business Improvement &
Internal Control
Freek Deelen (1971) (m)
Corporate Head of Strategy & Communication
Joop Kempe (1963) (m)
Corporate Head of ICT
Kees Klaasen (1955) (m)
Corporate Head of Sales
Joan Leeuwenburg (1969) (f)
Corporate Head of Human Resources
Ruud Meeren (1983) (m)
Corporate Head of Legal Affairs
Geert Scheepers (1962) (m)
Corporate Head of Operations
Edgar Snelders (1972) (m)
Corporate Head of Engineering
Menno Wolf (1970) (m)
Corporate Head of Procurement
Peter Wisse (1959) (m)
Group Controller
In 2005, I joined Neways in my hometown of Wuxi after completing my study at the
Electronics University. In my role as Procurement/NPI Manager, I focus on procurement
and on new product introduction (NPI) management. For the main part, my role focusses
on Neways Wuxi, but also partly on the other Neways divisions.
The year 2021 was a challenging year in every respect. We were lucky that the city and
country didn’t need to be closed down due to Covid, but some supplying countries did
face a lockdown, which was an organizational challenge for us at times. In terms of
exporting, we were faced with other challenges: shipment providers introduced a new
weight limit of 50kg per shipment, which we adapted to very quickly by shipping our
products on a daily basis instead of on a weekly basis in order to spread the weight.
The shift to OneNeways is very visible for me and my team. Every week we have team
meetings with people from other divisions within Neways to exchange information and
discuss supply chain issues on a global level. This global meeting is very helpful, and even
though we do not use the exact same systems as in Europe, it’s still helpful to talk about
certain topics and exchange insights.
For the new year I expect a lot of promising customer assignments, given the very positive
customer forecast for 2022. The level of demand is increasing and so is our budget. This
shows that the market is currently in a good place. One continuing challenge is the
shortage of components in specific sectors, which we do not expect to be completely
solved in 2022. Luckily we’ve been able to maintain our rhythm of working – we’ve become
accustomed to this issue.
My ambition for the next year is to work even more closely with my colleagues in Wuxi
and other countries – to work even more as one team. I look forward to exchanging more
information with them.
OneNeways
EXPLORING NEW TECHNOLOGIES
JASON CHEN
PROCUREMENT/NPI MANAGER
NEWAYS CHINA WUXI
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Corporate Governance
Neways is a listed company with a two-tier board structure and does not have
protective or control arrangements place in the form of a trust office
or depositary receipts for shares.
Our corporate governance is based on the Dutch Civil Code Book 2, the company’s articles of
association and the Dutch Corporate Governance Code (the Code). The relevant regulations
and reports are available on our corporate website. The Supervisory Board, together with the
Board of Directors (jointly the Boards) is responsible for the company’s governance. The
Boards periodically review and evaluate the effectiveness of Neways’ governance framework.
Neways endorses the importance of continuously striking a balance between the interests of
the various stakeholders. As such, we feel a strong commitment to good governance and the
principles as set forth in the Code. Wherever possible and relevant, Neways complies with
the best practices of the Code.
Corporate governance statement
The corporate governance statement is a statement within the meaning of Section 2a
of the Dutch Decree establishing further instructions concerning the content of annual
reports (dated 20 March 2009). The information that must be included in this statement
pursuant to Sections 3, 3a and 3b of said decree can be found in the following sections
of this report:
• compliance with the Code’s principles and best practice provisions – page 40
• the principal features of the risk management and control systems for the group’s
financial reporting process, described under ‘Risks and risk management’ – page 48
• functioning of the General Meeting of Shareholders, its principal powers, and the
rights of the shareholders and how these can be exercised – page 44
• composition and tasks of the Board of Directors – page 43 and 58
• composition and tasks of the Supervisory Board – page 44 and page 58
• rules for appointing and replacing members of the Board of Directors and
Supervisory Board – pages 43 and 44
• rules for amending the company’s articles of association – page 44
• powers of the of Board of Directors to issue and repurchase shares – page 44
• transactions with associated parties – page 93.
Compliance with the Code
The following should be noted with respect to compliance with the Code and the public
offers for Neways received from VDL and Infestos, respectively, in 2021:
Principle 2.8
The Board of Directors and Supervisory Board ensured that the interests of all stakeholders
involved in the respective takeover bids by VDL and Infestos were carefully considered.
For this purpose, the Supervisory Board had its own independent financial advisor.
The actions of the Board of Directors and the Supervisory Board were always guided by
the continued success and long-term value creation of the company and its business,
with a focus on the interests of its shareholders, in particular its minority shareholders,
its customers, suppliers and its employees.
Best practice provision 2.8.1
From the first moment of interaction with potential bidders in a takeover bid the Board
of Directors ensured that the Supervisory Board was closely involved in the process.
Best practice provision 2.8.2
The Board of Directors disclosed the takeover bids by VDL and Infestos to the Supervisory
Board without delay.
Deviation from the Code
Due to the limited company size, we consider it in the company’s interest to deviate
from a few best practice provisions. In accordance with the ‘comply or explain’ principle,
we describe these deviations below.
Best practice provisions 2.1.5 and 2.1.6
When selecting nominees for membership of the Supervisory Board or the Board of
Directors, diversity is sought in terms of background and work experience, technical
expertise and competencies, nationality, ethnicity, gender and age.
Following the public offer by Infestos being declared unconditional, on 5 November 2021
Erwin Riefel and Frank van Roij were appointed as new members of the Supervisory Board
for a four-year term. The Supervisory Board has since consisted of five members, four male
and one female. All members are Dutch nationals. Following this Supervisory Board
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expansion, Neways no longer complies with the best practice provision 2.1.6 for diversity
in the Supervisory Board. However, it is proposed to the General Meeting of Shareholders
to appoint an additional female member following which Neways will comply with this best
practice provision and Dutch law.
The Board of Directors consists of three male members, all three of which have Dutch
nationality. The ratio of diversity within Neways as a whole and within the management
teams of the various operating companies has continuously improved.
Best practice provision 2.1.7 and 2.1.8
In connection with the takeover bid by Infestos, new members of the Supervisory Board
Erwin Riefel and Frank van Roij have been nominated by Infestos and are regarded as not
independent within the meaning of the Code. It is noted that they are also actively involved
with Neways’ business as part of the consultancy agreement with Infestos. They do not
receive remuneration from Neways in their role as Supervisory Board members.
The other three Supervisory Board members are Henk Scheepers (Chair), Hans Büthker
and Karin de Jong. Henk Scheepers is not independent within the meaning of the Code
Hans Büthker and Karin de Jong are independent. In accordance with the merger protocol,
with reaching more than 70% shares by Infestos, the Chair is considered to be dependent.
Best practice provision 2.2.1
Members of the Board of Directors who joined the board before 2019 are appointed for
an indefinite term. Currently this only applies to Paul de Koning (CFO).
On 1 January 2021, Steven Soederhuizen (COO) was appointed as interim director.
On 19 April 2021, he was appointed as member of the Board of Directors by the General
Meeting for a period of four years.
Best practice provision 2.2.2
After serving on the Supervisory Board for eight years, Henk Scheepers’ third term ends on
21 April 2022. The Supervisory Board intends to nominate Mr. Scheepers for a fourth and
final two-year term as member of the Supervisory Board in the role of Chair at the upcoming
General Meeting of Shareholders. The reason for the reappointment is to ensure full and
proper performance of the non-financial covenants protecting the business and the minority
shareholders as included in the merger protocol with Infestos.
Best practice provision 2.3.2
In 2021, the full Supervisory Board carried out the duties of the Selection and Appointment
Committee, the Remuneration Committee and the Audit Committee. Given that the
Supervisory Board comprised five members only since November 2021, there was
insufficient time to install the standing committees before the end of the financial year
and therefore no separate committees have been formed.
Now since – with the addition of two new members as per November 2021 – the
Supervisory Board comprises five members , the Board has decided the installment of three
committees: a Remuneration, Selection & Appointment Committee, an Audit Committee
and a Strategy Committee.
Best practice provision 4.2.3
Due to the second wave of the coronavirus pandemic in the Netherlands, the 2020 annual
results were discussed in a fully virtual meeting. The 2021 semi-annual results were
discussed in a hybrid meeting where analysts and media could attend the meeting either
in person or via webcast. Extra hygiene and safety measures were observed at this meeting.
For the second year in a row the General Meeting of Shareholders was held completely
virtually. The Extraordinary General Meeting of Shareholders was held in person.
Neways has a preference for in-person meetings over virtual meetings. In light of the
successful public offer by Infestos, Neways will reconsider the appropriate format for such
meetings and the use of webcasts, depending on the circumstances.
Public offer by Infestos
On 24 June 2021, Neways and Infestos agreed on an all cash offer of €14.55 per share.
The Board of Directors and Supervisory Board unanimously recommended the offer, taking
into account the benefits it provides the company and all its stakeholders. Infestos provides
Neways with a stable shareholder base to shape the transformation into a System Innovator
and to accelerate the rollout of the ‘OneNeways’ strategy. Infestos sees the potential for
Neways to become a best in class electronic manufacturing services company.
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In accordance with its statutory duty, the Supervisory Board has acted in the interests of
all Neways’ stakeholders and the continued success of the business. To ensure a careful
process, the Supervisory Board also sought independent advice from AXECO Corporate
Finance and legal advice from AKD to assess the bid on its merits. ABN AMRO issued
a fairness opinion confirming that the premium of 33.5% over the closing price of Neways
on 29 April 2021 (the last trading day prior to the announcement of VDL’s indicative offer)
is fair to shareholders from a financial point of view. It represents a premium of 74.6% to
the volume-weighted average price (VWAP) per share over a period of 12 months preceding
the reference price at 29 April 2021.
The interests of all stakeholders have been safeguarded through non-financial covenants
agreed with Infestos, which are described in the offer memorandum available on our
corporate website. The Works Council issued a positive advice (opinion) on Infestos’ offer,
the agreements made in that context, and the recommendation made by both the Board
of Directors and the Supervisory Board. The existing rights and benefits of our employees
will not be affected. There will be no reorganisations or restructuring plans of material
importance that would result in significant redundancies as a direct consequence of the
offer. Furthermore, the collaboration with Infestos creates opportunities for our employees
to grow with the company. Infestos does not intend to break up Neways or pursue any
divestments of business units. Neways’ headquarters, central management and its key
support functions will remain at the current location, and the company will maintain its
corporate identity, values and culture.
As long as the shares remain listed on Euronext Amsterdam, Neways is committed to
comply with the current Dutch Corporate Governance Code, beyond the current deviations
and deviations that find their basis in the Merger Protocol (as described in the Offer
Memorandum available on our corporate website).
Remuneration
No transaction bonus or similar arrangement applied to the Board of Directors. The Board
of Directors tendered their shares under the offer and received the same amount per
Neways share as all other shareholders. As long as Neways shares remain listed on Euronext
Amsterdam, unvested shares held by the Board of Directors and other Neways’ executives
can vest and be converted into actual shares. For a detailed overview we refer to Section 6.8
(Shareholdings of the members of the Boards) (a), (b) and (c) of the Offer Memorandum
available on our corporate website.
Code of Conduct
The Code of Conduct specifies the standard guidelines relating to the health and safety of
the employees and sets out guidelines on the conduct expected of our employees and the
company as a whole regarding our impact on the local community and the environment.
In 2021, no changes were made to the Code of Conduct.
In 2019, in light of the new data protection legislation (GDPR) the Code of Conduct was
updated to include additional guidelines on how to deal with data and privacy. Neways
employees are expected to have a thorough knowledge of the Code of Conduct and carry
out their work in accordance with the standards, values and guidelines set out in this code.
The Code of Conduct is available for reference on our corporate website.
The Board of Directors monitors compliance with the Code of Conduct during an annual
assessment of the design and operation of the systems. This monitoring relates to all
material control measures directed at strategic, operational, compliance and reporting risks.
This review takes into account, among other things, identified weaknesses and irregularities,
signals from whistleblowers, lessons learned, and findings of the internal audit function and
external auditor. Where necessary, improvements in internal risk management and control
systems are implemented.
IT security
In accordance with best practice provision 1.2.3, the Board of Directors assesses the design
and operation of the IT framework and systems on an ongoing basis. This review takes into
account identified weaknesses and irregularities, signals from whistleblowers, lessons
learned, and findings of the IT internal control assessment. Where necessary, improvements
in internal risk management and control systems are implemented.
Whistleblower policy
The whistleblower policy remained unchanged in 2021. The policy was last amended in
2019, in consultation with the Central Works Council, when a facility was added to allow
employees to report suspected improprieties and irregularities in a safe and structured way.
We have a strict policy for reporting incidents and safety hazards, aiming not to score as low
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as possible, but as comprehensively as possible. We want to encourage employees to
report all irregularities to prevent unsafe situations.
In the event of a suspected irregularity we carry out an internal investigation to determine
whether that suspicion can be allayed. Only if this is not possible, or does not result in an
improvement, will the matter be reported to an external authority. The whistleblower policy
is available for reference on our intranet.
Language and annual report
As Neways is an international tech company and the standards for reporting are laid down
internationally in the IFRS guidelines, we have decided to publish the annual report in
English only for the first time this year. The shareholders were notified about the proposed
change at the General Meeting on 19 April 2021.
Board of Directors
Tasks
Neways’ Board of Directors is responsible for the group’s strategy, central management, and
performance. The Board of Directors receives detailed weekly and monthly progress reports
and is responsible for compliance with all relevant legislation and regulations and effective
operation of the internal risk management and control systems.
These tasks are carried out under the watchful eye of the Supervisory Board. The Board of
Directors provides all information in a timely manner and makes the necessary resources
available for proper performance of the Supervisory Board’s monitoring tasks.
Appointment
The Supervisory Board appoints the members of the Board of Directors. From 2019 onward,
members of the Board of Directors are appointed for a period of four years, as per best
practice provision 2.2.1. The General Meeting of Shareholders must be notified of a
proposed appointment. Members of the Board of Directors may not serve on more than
two supervisory boards nor serve as the Chair of a supervisory board. More information on
the composition of the Board of Directors in 2021 is provided in the ‘Supervisory Board,
Board of Directors and management team’ section on page 37 of this annual report.
Suspension and dismissal
The members of the Board of Directors cannot be dismissed directly by the General
Meeting of Shareholders. The Supervisory Board periodically evaluates the performance
of the members of the Board of Directors and has the right to suspend or dismiss the
members of the Board of Directors. Neways’ remuneration policy for the Board of Directors
focuses on value creation in the long term. In line with the new Dutch legislation based
on the EU Shareholder Rights Directive II (SRD II), the remuneration policy for the Board
of Directors has been revised and amended in a number of areas. This amended
remuneration policy was approved during the General Meeting of Shareholders of
16 April 2020. The remuneration policy has not been changed since and is available
for reference on the corporate website (www.newayselectronics.com).
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The 2021 remuneration report is also available for reference on the corporate website and
will be submitted as an advisory document to the General Meeting of Shareholders on
21 April 2022. More information on the remuneration of the Board of Directors in 2021 is
also provided in the financial statements on page 94 of this report.
Supervisory Board
Tasks
The Supervisory Board monitors the policies and performance of the Board of Directors.
In addition, the Supervisory Board has an advisory function, with a focus on the best
interests of the company, taking into account the relevant interests of the various
stakeholders. The basic principles of corporate social responsibility serve as the guideline
for this.
The Supervisory Board and the individual members perform their supervisory and advisory
tasks based on the extensive information required for this purpose that is provided by the
Board of Directors. In addition, the Supervisory Board obtains information from other
internal company officers, external parties that advise Neways and, if necessary, the
Supervisory Board’s own advisers. Neways provides the resources required for this purpose.
Appointment
Members of the Supervisory Board are appointed by the General Meeting of Shareholders
for a period of four years. They can subsequently be reappointed for a second term of four
years and a third term of two years.
The Central Works Council has an ‘enhanced right of recommendation’ for one third of the
number of supervisory directors. This recommendation can be adopted by the Supervisory
Board. The Supervisory Board appoints a Chair and a Deputy Chair. The Chair may not be
a former member of the Board of Directors of Neways. In view of the size of the company,
there is no formal onboarding programme for Supervisory Board members. More
information on the composition and relevant other positions of the Supervisory Board
in 2021 is provided in the ‘Supervisory Board, Board of Directors and management team’
section on page 37 of this annual report.
Dismissal
The General Meeting of Shareholders has the right to dismiss the complete Supervisory
Board. Individual members of the Supervisory Board cannot be dismissed directly by the
General Meeting of Shareholders.
Remuneration
The General Meeting of Shareholders can, in line with a proposal submitted by the
Supervisory Board, approve the remuneration policy for the members of the Supervisory
Board. This remuneration does not depend on the company’s results. The renumeration
policy is available for reference on the corporate website (www.newayselectronics.com).
The adjustment of the remuneration for the Supervisory Board was approved and adopted
by the General Meeting of Shareholders of 19 April 2021. More information on the
remuneration is provided in the financial statements on page 96 of this report.
General Meeting of Shareholders
The General Meeting of Shareholders is convened at least once a year and chaired by the
Chair of the Supervisory Board. At this year’s virtual General Meeting of Shareholders,
participants were given the opportunity of asking questions online. Advance voting was
permitted and shareholders were also able to vote by proxy. The minutes of the General
Meeting of Shareholders are available for reference on the corporate website.
Decision-making process
All resolutions are adopted based on the principle of ‘one share, one vote’. Important
management decisions that involve a change in the identity or character of the company
or its business must be approved and adopted by the General Meeting of Shareholders.
This applies, in any case, to all management decisions relating to the transfer of the entire
company or virtually the entire company, entering into or terminating long-term
partnerships, and the acquisition or disposal of participations with a value of at least one
third of Neways’ assets according to the consolidated statement of financial position.
The policy on profit sharing and dividend is submitted separately to the shareholders.
This also applies to substantial changes in the corporate governance policy, including any
changes in the remuneration policy for the Board of Directors or the Supervisory Board.
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Extraordinary General Meeting of Shareholders
An Extraordinary General Meeting of Shareholders may be convened whenever necessary
or when the Supervisory Board or Board of Directors deems it desirable. With the current
structure of shareholders, Infestos is the only shareholder that can submit a request for an
Extraordinary General Meeting of Shareholders to the Supervisory Board and the Board of
Directors. In this request they must state the matters to be discussed.
Powers of the General Meeting of Shareholders
The General Meeting of Shareholders has the power to:
• adopt the annual accounts;
• grant discharge to the Board of Directors in respect of the policy it has pursued in the
financial year in question;
• grant discharge to the Supervisory Board in respect of its supervision of that policy;
• adopt profit sharing/dividend payment proposals;
• approve management decisions relating to a significant change in the company’s identity
or character;
• adopt significant changes in the company’s corporate governance policy;
• appoint members of the Supervisory Board;
• dismiss the entire Supervisory Board;
• adopt the remuneration policy for the Board of Directors and the Supervisory Board;
• approve the remuneration of the individual members of the Supervisory Board;
• take decisions on the issue of shares and on granting rights to subscribe for shares
(option rights), or on giving the Board of Directors decision-making authority in this
respect for a certain period of time, possibly subject to waiver of the shareholders’
pre-emptive right;
• appoint the external auditor;
• pass a resolution to amend the articles of association based on a proposal submitted
by the Board of Directors;
• authorise the Board of Directors to purchase shares in the company.
The agenda and explanatory notes for the annual General Meeting of Shareholders to be
held on 21 April 2022 have been posted on Neways’ corporate website.
46 | 2021 ANNUAL REPORT
Mahle
MAHLE is a leading international development partner and supplier to the automotive
industry. The technology group, which was founded in 1920, is now broadly positioned in
the areas of powertrain technology and thermal management. Committed to playing an
active role in transforming the mobility of the future, MAHLE is working both on technologies
that will help the fuel cell and e-mobility achieve broad acceptance in the markets and on
the intelligent combustion engine for the use of hydrogen and other non-fossil fuels.
The group’s product portfolio addresses all the crucial aspects of the powertrain and air
conditioning technology. Half of all vehicles in the world now contain MAHLE components.
In 2020, MAHLE generated sales of approximately EUR 9.8 billion and is represented in
over 30 countries with more than 72,000 employees in 160 production locations and 12 major
research and development centres.
The collaboration between MAHLE and Neways started many years ago. Since then, MAHLE
and Neways have successfully been working together on the production of electronic
components. ‘The benefit of our collaboration is that Neways has a global footprint which
enables them to support us in various regions and various processes. Also, the sales
department is doing a great job for us. They prove to be very proactive and supportive,’
says Gregor Franic, Global Lead Buyer at MAHLE. ‘Over the past year we have been
exploring additional competencies in which Neways can support us, outside the pure
EMS business. We have identified these multiple areas of potential additional cooperation,
which look very promising.’
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47 | 2021 ANNUAL REPORT Governance and compliance / Risks and risk management
Market and commercial risks
Cyclical fluctuations
• Spread across market sectors
• Reduce dependency on cyclical sectors
• Expand activities in stable sectors
Volatility of customer
demand
• Good positioning and adequate scale to respond
quickly to changing customer demand
• Improvement programme increases proximity to
customers to allow better anticipation of new
customer requirements
• Close scrutiny of customer conditions to ensure a
desirable outcome for the customer and in terms of
internal risk policy
Shortage of technically
trained talent
• Employer branding policy that highlights our positive
work culture and personal development opportunities
• Competitive salaries and fringe benefits
Increasing regulatory
pressure
• Compliant with all relevant product and environmental
requirements
• Intensify collaboration with suppliers to improve
product traceability and the sustainability of
purchased materials
Price competition
• Focus on life cycle management and optimal cost of
technology
• Group-wide strategy aimed at climbing to a higher
level in the value chain
• ‘System Innovator’ strategy implementation
Operational risks
Health risks
• Structure and measures implemented to prevent
spread and mitigate the impact of coronavirus
Supply chain complexity
• Standardised materials procurement
• Reduced number of suppliers
• Close monitoring of timely deliveries
• Spread of risks and costs throughout the logistics
chain
• Improve logistics agreements and models
• Solid escalation structure and procedures for resolving
bottlenecks in the logistics chain
ICT systems
• Internal and external backup systems
• Phased implementation of new systems and changes
based on previous lessons learned
Production continuity
• Invest in and monitor safety and security at production
facilities
Financial risks
Liquidity and solvency
• Conservative and solid financing policy
• Tight control of cash flow
• Favourable supplier finance agreements to achieve
faster payment
• Extended group facility in place until early 2024
Accounts receivable
• Careful assessment and minimisation of credit risk
when setting up new customer accounts
• Credit insurance
• Close monitoring of debtors
Inventories
• Monitor and manage inventories through better
logistics contracts
• Introduce system for unique item coding
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Neways is an internationally operating, listed company focused on long-
term value creation. The vulnerability of international supply chains and the
continuing impact of the coronavirus on trade show that doing business
involves both market risks and company-specific risks. In this section we discuss
how Neways mitigates these risks and what initiatives we have developed to
strengthen our risk management.
Procurement taskforce
In March 2020, a procurement taskforce was set up in close consultation with our suppliers
and clients. This taskforce tracks down components by any means possible. This includes
exhaustively escalating to our suppliers and manufacturers, if needed with the involvement
of the customer and/or end customer, combing the market worldwide for alternative
sources, and carrying out technical assessments to propose alternative components.
With this approach Neways has been able to solve hundreds of material shortages during
the year, improving supply to nearly all customers in every sector that we serve.
Neways has a solid escalation structure and procedure for solving bottlenecks in the supply
chain, ensuring the involvement of the right level of management according to the urgency
and severity of the situation. In several cases, this approach – where we make clear the
importance of the continued supply of components for Neways and our end customer – has
had a bearing on the allocation decisions of manufacturers and resulted in our shipments
being prioritised above those of others.
Due to lockdowns and various travel restrictions, in 2021 we continued to face challenges
with material and component suppliers. Fortunately, we ensure a healthy spread of risk
by making good agreements with our suppliers regarding holding onto inventory.
The sudden transition to a ‘remote working economy’ in 2020 created a huge demand for
consumer electronics across the globe. After the first wave of the coronavirus had passed
in the Netherlands in the summer of 2020, this was followed by the reopening of production
facilities that needed to clear their production backlog. Due to the complete shutdown
in Automotive, the sector was confronted with scarcity of components, while sectors that
remained operational during the first wave had already submitted their orders for months
ahead. In the course of 2021 the procurement of components, especially semiconductors,
remained challenging. For 2022, we expect that the world will continue to face shortages.
Risk control mechanism
Through internal risk management and control systems, we monitor risks relevant to the
organisation at strategic, tactical and operational level. In 2019 we initiated the rollout of the
redesigned management and control systems based on COSO ERM
1
. In 2021 we continued
the rollout and implemented these systems within most of our operating companies.
The Board of Directors is responsible for managing the risks relating to the group’s business
activities and for ensuring the adequacy of internal control. It regularly discusses these
matters with the Supervisory Board. As part of this management risk assessment risks of
fraud and non-compliance with laws and regulations are assessed.
In 2021, Neways’ internal risk management and control systems were strengthened and
harmonised. From 2022 the holding will coordinate all general IT controls centrally. The
transition to remote working during the pandemic went very smoothly and no vulnerabilities
surfaced. By sharing examples of security risks and conducting awareness tests in the
organisation we ensure that all employees are constantly reminded of potential pitfalls.
Risk management systems
Each operating company monitors and manages risks, and the holding company handles
central coordination, direction and control.
The Corporate Head of Business Improvement and Internal Control is responsible for
the internal audit function. This officer reports directly to the CFO and has direct access to
the Supervisory Board. The internal audit function monitors compliance with legislation,
assesses the quality of the risk management systems and initiates improvements in business
processes.
Risks and risk management
1
COSO Enterprise Risk Management is a widely used framework for assessing and setting up risk management
ASML award
In 2021 we received the Scarcity Excellence Award from ASML in recognition of our
excellent collaboration in managing component shortages. ASML presented the award
to the key supplier in their global electronics supply base, who provided the full range
of electronics manufacturing services such as PCBAs, computer systems, interconnects,
racks and cabinets across Europe, Asia and the US.
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We have set up a GDPR project group to ensure the protection of personal data.
We closely monitor the GDPR registry and implement the processes and actions involved.
We document every incident that could indicate (a) data breach(es) and maintain a log of
these. The GDPR project group meets to consult at least once every two months.
Each operating company reports its revenue, its order intake figure and logistics parameters
on a daily basis. Each month, they provide an overview of the financial and operational
results, including a consolidated statement of financial position and statement of profit or
loss. These consolidated monthly reports are reviewed by the Board of Directors. Members
of the Board of Directors visit all the operating companies every two months and during
these visits discuss the main operational aspects, areas requiring improvement and other
important matters.
Using one standardised ERP system provides us with more control over the business
processes. These have been designed to be harmonised for the operating companies
wherever possible. The Neways-wide Kernel was designed on the basis of input from all
the operating companies. Business processes have been standardised and the system will
replace the three ERP systems which are currently operating in parallel.
A reassessment of the ERP system implementation was conducted in 2021. Based on this
reassessment, several actions have been defined to sharpen the focus of the project, i.e.
ensuring faster decision-making, securing end-to-end processes and architecture, and
implementing a new structure for the project governance. Furthermore, in 2021 we
launched several data conversion projects, we conducted pilot conversions and we defined
convention rules needed to carry out the data conversion in a relatively short time at the
time of the actual rollout. Learnings from these projects are used to optimise subsequent
conversions.
Coronavirus taskforce
In 2021, our coronavirus taskforce remained in operation to closely monitor the situation
around the Covid pandemic and provide regular updates through internal channels on
health guidance, safe working practices and home working requirements.
We have developed various scenarios that are deployed according to the Covid situation
in each country. We monitor the available national data and information received per branch
and adjust our policies and measures accordingly. We communicate regularly through
the central taskforce to all stakeholders, employees, visitors, applicants, customers and
suppliers. To ensure we can guarantee the safety of our employees, safeguard our
production and deliver to our customers we also keep records across the group of all data
relating to the number of infections, Covid-related absences and sickness absence in
general. All resources to protect employees, such as tests and masks, are freely available
and employees may schedule vaccinations during working hours.
The coronavirus taskforce reports on the situation within the various operating companies
once every two weeks. When the number of infections rises we meet weekly to monitor
the situation more closely and, if necessary, take extra measures and provide additional
updates.
Market and commercial risks
Volatility of customer demand
In 2021, we have seen that the aftermath of the first wave of the corona pandemic severely
impacted international trade. It became apparent that global supply chains could not
absorb the quick recovery in demand combined with more rigorous border controls. The
incident with the container ship Evergreen in the Suez Canal showed once more how
intertwined the various economies are, and how quickly customer demand can change.
In 2020, production in Automotive came to a complete standstill. Demand quickly recovered
in the course of 2021, though materials shortages at suppliers – suppliers of semiconductor
components in particular – put pressure on all sectors. Thanks to the establishment of our
procurement taskforce we have been able to serve our clients, though lead times for the
delivery of components are increasing across the board.
Despite disruptions in the supply chain, we maintained a balanced spread across the various
market sectors; this ensures adequate protection against the volatility in customer demand.
Thanks to centralised procurement and close collaboration with our clients we were able
to absorb the sharp fluctuations in demand. What was very evident to us was that the
harmonisation of our ERP systems and our spread over the four sectors helped us to
maintain stable revenue and orders in 2021.
System Innovator
The initiatives we launched in 2020 to enhance customer intimacy were continued in 2021
and further evaluated and incorporated into our System Innovator strategy.
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Increasing regulatory pressure
Regulatory requirements in the areas of financial reporting and sustainability reporting are
increasing, with also a stricter focus on ESG reporting and monitoring of the company’s
progress in these areas.
The ongoing coronavirus pandemic has also required us to draw up additional guidelines
to safeguard the health of employees and to prevent Covid outbreaks. These guidelines are
set out in Covid protocols that apply to all operating companies, in compliance with the
local laws and regulations.
In 2021, we continued with the ongoing improvement of our performance in the area of
quality, environment, safety and health (QESH). We implemented measures that reduced
energy consumption, our carbon footprint and waste. In November 2021 the Dutch
operating companies switched to using green electricity (electricity generated by wind
power). This will reduce the carbon footprint of our Dutch operations by approximately
3,400 tonnes of CO
2
per year. We have started a carbon footprint analysis of our operations,
based on Scope 1 and 2 emissions. Neways has also signed a collaboration letter with ASML
to support their Supplier Sustainability Program.
In 2022, we will continue to focus on further reducing our waste, energy consumption
and carbon emissions and on improving safety further. Neways will also develop its
‘sustainability roadmap’.
Neways complies with all relevant product and environmental requirements (REACH, RoHS,
and laws and regulations concerning export and conflict minerals) and continuously works to
identify areas requiring improvement and to implement the improvements. We focus on
replacing CMR substances –substances that are carcinogenic (can cause cancer), mutagenic
(can cause genetic mutations) or reprotoxic (can damage the reproductive process) – by
safer alternatives in order to protect our employees and the environment. In 2021 we
replaced one CMR substance; in 2022 we will continue phasing out the use of CMR
substances.
Price competitiveness
In 2021, materials shortages at suppliers (suppliers of semiconductor components in
particular) – combined with the uncertainties relating to the Delta and Omicron variants
of the coronavirus – put significant pressure on our margin. We have seen that our role as
System Innovator and long-term partner with a focus on reliability and quality strengthens
our trading position, allowing us to efficiently pass on price increases. The Neways sales
force focused on close cooperation with customers and discussed how price increases could
be taken into account, despite fixed contract agreements. The production plant has also
been working more efficiently and awareness of the gross margin has increased inside the
company. In 2022, these actions will be continued and further deployed throughout the
organisation.
The strategic diversification in the various sectors also protects us from acute short-term
price fluctuations more.
Climate change
In 2021, in our risk assessment we included the potential impact of climate change on our
business model and strategy. With an external partner we launched an analysis of our
activities and products to identify which of our clients’ end products are directed at fighting
climate change. Based on the assessment we conclude that the effect of climate-related
risks do not have a material impact on accounts and disclosures in the financial statements
as at 31 December 2021. We plan to conduct an assessment of our activities in 2022 so
that we can proceed with our alignment with the six environmental obligations from the EU
classification framework. More information is discussed in the ‘Corporate Social
Responsibility' section on page 31.
Operational risks
Scarcity of technically skilled talent
The competition for highly skilled technical talent is fierce and a talent crunch poses a risk
for Neways’ performance. Neways is actively engaging with young talent and doing what it
takes to attract them to the company for the long term. In 2021, Neways launched multiple
initiatives to attract, retain and train the right talent; these initiatives are discussed in the
‘Organisation and employees’ section.
Serious disruptions of business systems
In 2019, we developed a Business Continuity Plan which sets out how to manage major
incidents that threaten the continuity of our business systems. The continuity plan, which
identifies which production, assembly and testing processes are critical for the business,
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has been tested and rolled out at several of the operating companies. In 2022, we expect to
implement this standard at all our operating companies.
When a production or IT system fails, this can result in disruptions to operations and/or to
internal and external reporting. A data breach or hack at Neways, should this occur, will
immediately be handled with the highest priority.
In 2021, Neways reinforced its measures relating to the security of internal and external
systems. Cybersecurity is subject to continuous improvement and monitoring. Measures
including multi-factor authentication, zero trust network protection and extended monitoring
were introduced. Tightening up the safeguards is based on best practices in IT security from
a working group set up by Brainport Eindhoven, in which Neways and other technology
companies in the region participate. Neways is part of the Eindhoven Cyber Security Group
(ECSG) and the Cyber Resilience Centre Brainport.
Safe work environment
Major incidents and other unforeseen circumstances in the production facilities not only
potentially jeopardise production continuity, they can also put the safety of individual
employees at risk.
Neways invests continuously in the safety of production facilities by implementing
preventive control measures for work procedures and introducing protocols. The recording
of incidents is discussed in the ‘Corporate Social Responsibility’ section.
Financial risks
Liquidity and solvency
We apply a conservative and solid financing policy, coupled with strong cash flow
management. Supplier finance arrangements have been agreed in a number of long-term
partnerships. As a result, we also receive payment faster on average. This allows Neways to
benefit from favourable conditions offered by suppliers for fast payment. The group credit
facility provides adequate financial resources, resulting in a limited liquidity risk. The change
of control in 2021 did trigger repayment of the outstanding balance on the credit facility,
for which we obtained a waiver from the banks, with the result that the facility agreement
continued unchanged.
We performed the annual going-concern analysis and a goodwill impairment test.
The goodwill impairment test did not result in write-downs.
Payment default
If Neways customers were to be unable to meet their payment obligations this could result
in financial loss. Accordingly, the debt portfolio is closely monitored. In 2021 we focused
strongly on working capital and debtors.
Uncommitted inventories
ATP (available to promise) inventory, i.e. the on-hand inventory of raw materials and
consumables not covered by orders or contracts, are a risk for Neways and can increase
working capital requirements and put pressure on cash flow and margins.
Neways and its suppliers in the chain devote a great deal of attention to monitoring and
controlling inventories. The initiatives in the field of supply chain management must
contribute to a structural reduction of inventory levels.
Several KPIs have been defined to continuously monitor the inventory levels at the
operating companies. Additionally, to keep the non-committed inventory as low as possible
concrete actions have been defined and are followed up by an interdisciplinary team, which
includes representatives from operations, procurement and logistics.
In control statement
Based on the above, the Board of Directors declares that, to the best of its knowledge,
Neways’ internal risk management and control systems functioned properly in 2021 and that
these provide a reasonable degree of certainty that the reporting is free from material
misstatement. The Board of Directors also declares that, to the best of its knowledge and
based on the current state of affairs, it is justified in drawing up the financial statements on
the assumption that Neways can continue as a going concern. There are no indications that
Neways' continuity will be adversely affected in the twelve months following the publication
of this annual report.
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Governance and compliance / Board of Directors’ statement of responsibilities for the financial report
Board of Directors’ statement
of responsibilities for the financial report
pursuant to Section 5:25c of the Financial Supervision Act
(Wet Financieel Toezicht/Wft).
The Board of Directors of Neways Electronics International N.V. declares that, to the best
of its knowledge:
The 2021 financial statements in this annual report give a true and fair view of the assets,
liabilities, the financial position as at 31 December 2021 and the 2021 profit of Neways
Electronics International N.V. and the undertakings included in the consolidation as a whole.
The 2021 annual report gives a true and fair view of the position as at 31 December 2021
and of the developments and performance during the financial year 2021 of Neways
Electronics International N.V. and the undertakings included in the consolidation as
a whole and describes the principal risks that Neways Electronics International N.V. faces.
Son, 24 February 2022
Eric Stodel - CEO
Paul de Koning - CFO
Steven Soederhuizen - COO
Immediately after I graduated as a chemist, in 2011 I started in the technology department at Bus Elektronik Riesa
(former name of Neways Electronics Riesa) as a specialist in hazardous/auxiliary substances. I have since been
supporting our Hazardous Substances Officer by checking the compliance of the substances used in accordance with
REACH – Regulation (EC) 1907/2006. In the meantime, I have mainly developed into a process engineer at Neways.
With a team of ten colleagues, we support ongoing manufacturing processes and are also responsible for the set-up
of new processes, equipment procurement and configuration. Currently, my tasks mainly focus on processes where
technology and chemistry come together, such as in the cleaning of electronic assemblies or automatic gluing.
Many automotive customers require components to be mechanically attached to the circuit board with adhesives.
Our challenge is to find out which solution best suits our customers’ requirements and how this solution can be
implemented in an automated process.
In recent years, technical cleanliness has become an important issue in the automotive industry as components and
critical isolation distances become smaller. Particulate contamination can have a significant negative impact on the
functioning of a system. Even miniscule particles can cause electrical failures or other malfunctions. With the support
of experts, I started analysing the cleanliness of assembly in NER back in 2014. We were able to implement
measures to reduce contamination in the production area to meet the growing demands of our valued customers.
What I like most about this task is that it is an interdisciplinary challenge involving many departments working closely
together to provide the customer the best possible support. We have gained a lot of valuable experience and are
always happy when we are able to improve quality step by step.
We work closely with our customers to innovate on existing technologies. A good example is the use of jet
technology to apply solder paste. Prior to this, we had only used the Mycronic MY700 (jet valve) to apply
SMT adhesive. However, we were able to use this equipment successfully for a new product with special
solder paste printing requirements. This application is particularly efficient when dealing with flexible
substrates or assemblies where a step stencil must be used. This year, I have already put our second MY700
into operation successfully.
For the coming years, I also see exciting new opportunities for Neways in the field of energy transition. We
have a sustainability working group, and energy management is one of our main topics. We are constantly
adapting our production processes to reduce power consumption and the environmental impact, for
example by selecting environmentally friendly cleaning agents and minimising chemical waste. It feels good
to be able to contribute to a better future.
Best solutions
EXPLORING NEW TECHNOLOGIES
JULIA STUKERT
PROCESS ENGINEER
NEWAYS ELECTRONICS RIESA
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Governance / Shares in Neways
Shares in Neways
Neways shares are partly listed on the Euronext Amsterdam stock exchange
and have been included in the Tech40 Index since 2016. The Tech40 is
made up of 320 tech companies listed on all Euronext markets. The Tech40
Index is compiled annually.
Neways’ share structure
Neways’ share capital consists solely of ordinary shares with a nominal value of €0.50 per
share. On balance, the issued share capital at the end of 2021 consisted of 12,270,134
shares. Employee share options were exercised and performance shares were vested during
2021, increasing the share capital by 96.097.
2021 2020
Year-end 12,270,134 12,174,037
Weighted average 12,215,431 12,165,020
Price movement and key figures
2021 2020
Highest price €14.95
(31 December)
€10.20
(2 January)
Lowest price €8.00
(4 January)
€4.75
(16 March)
Closing price €14.15 €8.00
Basic earnings per share €0.71 €–0.32
Dividend 1.06 0
Price/earnings ratio at financial year-end 19.9 –25.0
Market capitalisation at financial year-end €173,622,396 €97,392,296
Price movement (in €)
Shareholders
Pursuant to the Dutch Act on the Disclosure of Major Holdings in Listed Companies
(Wet Melding Zeggenschap/WMZ), the Dutch Authority for the Financial Markets (AFM)
must be notified of interests of 3% or more in Neways’ issued capital. At year-end 2021,
Infestos was the only major shareholder. VDL Beleggingen, Stg. Administratiekantoor
Tymen, Menor Investments B.V., OtterBrabant Beheer, Add Value Fund N.V. and Value8 N.V.
all offered their shares to Infestos under the offer.
Dividend policy
As of the Annual Meeting of Shareholders held in 2015 the dividend policy is a dividend
payment of 40% of the net profit. Considering the current highly simplified shareholder
structure with one shareholder owning almost all Neways shares, after a public offer, the
Board of Directors and Supervisory Board are of the opinion that a deviation from this
dividend policy is appropriate. The proposed dividend payment falls within the limit of the
statutory borders, the legal framework and the credit agreements with the banks.
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Governance / Shares in Neways
In 2021, Neways realised € 0.71 earnings per share. On 30 March 2020, Neways took
the precautionary measure of withdrawing its dividend proposal of €0.28 per share
for 2019 in response to the uncertainty caused by the Covid pandemic.
To the General Meeting of Shareholders will be proposed to pay a dividend of
€1.06 per share for the 2021 financial year. Furthermore it will be proposed to still
pay the dividend for 2019 of €0.28 per share at the expense of the retained earnings.
Share options and performance shares
With the aim of maximising long-term value creation for shareholders, Neways applies
a remuneration policy. The General Meeting of Shareholders of 16 April 2020 approved
and adopted the current remuneration policy. This policy provides for a Performance Share
Plan, whereby the number of long-term performance shares that vest is contingent upon
the achievement of predetermined profit margin targets, over a three-year performance
period.
The Board of Directors and the managers that held vested shares in Neways have offered
their shares to Infestos under the offer. Unvested shares that still have to be granted to
the Board of Directors or executives will remain.
The Supervisory Board decides annually whether or not to grant performance shares to
the members of the Board of Directors and to a number of other key company officers.
This resolution is submitted to the General Meeting of Shareholders for approval. The full
details of the remuneration policy are available for reference on the corporate website.
The option plan has been phased out; in 2017 options were granted for the last time to the
members of the Board of Directors and other key company officers. In 2021 all remaining
share options were exercised.
Further information on the performance shares granted to the Board of Directors can be
found in note 16 to the financial statements.
The General Meeting of Shareholders will be held on 21 April 2022.
Prevention of misuse of insider information
The latest regulations on how to deal with price-sensitive information internally and
externally, as laid down in the Model Code, are periodically evaluated by the company
and tightened where necessary by issuing further internal guidelines. The regulations relate
to the Supervisory Board and to the Board of Directors, as well as to the management layer
below the Board of Directors and all central employees who may have access to price-
sensitive information. Neways employs a compliance officer to supervise and ensure proper
compliance with the regulations.
More information about shares in Neways is available on newayselectronics.com. You can
also contact us as follows:
E: info@newayselectronics.com
T: +31 (0)40 267 92 01
56 | 2021 ANNUAL REPORT56 | 2021 ANNUAL REPORT Report of the Supervisory Board
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Supervisory Board
From left to right:
Erwin Riefel
Hans Büthker,
Henk Scheepers,
Karin de Jong,
Frank van Roij
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In the performance of our duties as the Supervisory Board, we supervised the
implementation of the Neways strategy and its actions to create long-term
value in 2021, and we assessed the public offers by VDL and Infestos.
Our supervisory tasks are set out by law and in the company’s articles of
association. In our advisory and monitoring capacity, we oversaw all major
decisions of the Board of Directors, which they submitted to us for our
approval. In the opinion of the Supervisory Board, the requirements relating to
independence of action, as specified in best practice provisions 2.1.7 to 2.1.9
inclusive of the Corporate Governance Code, have been satisfied.
The year 2021 was an extraordinary and challenging year for Neways. The Covid-19
pandemic continued to have an enormous impact on people’s daily lives as well as on
economies and businesses. From the outset, Neways also had to redouble its efforts to deal
with global component shortages and a broad surge in customer demand. At the same time,
it was also a remarkable and intense year in which we ultimately welcomed Infestos as our
new majority shareholder.
The Supervisory Board is proud of how Neways managed the Covid-19 crisis throughout
the year in respect of its customers and, especially, with regard to its employees. A safe
work environment and the wellbeing of Neways employees – whether they work from
home or on site – have been top priorities for all managers at Neways during these
unprecedented times.
Public offers and change in shareholder structure
On 30 April 2021, Dutch industrial conglomerate VDL, a committed major shareholder of
Neways and long-term business partner, expressed its intention to make a public offer for
all issued and outstanding shares in the capital of Neways.
As Supervisory Board, we thoroughly reviewed the proposal, taking into consideration the
interests of all Neways’ stakeholders, including other minority shareholders. First on our own
and then jointly with the Board of Directors we entered into conversations with VDL to
further explore their intentions. At the start of this process, we also hired our own
independent financial advisor in order to fulfil our fiduciary duties as Supervisory Board and
help inform our decision-making in the best interest of all our stakeholders.
Given our strong ties and highly valued long-standing relation with VDL, conversations
always took place in a respectful manner. On 19 May 2021, Neways officially announced
that they would end talks with VDL. Together with the Board of Directors, we came to the
conclusion that the VDL proposal did not sufficiently reflect the Neways’ value creation
principles and was therefore not in the best interests of its stakeholders. Nonetheless,
on 28 May 2021 VDL announced that it would proceed with its intended public offer
at an offer price of €13.00 per share (cum dividend).
Meanwhile, Neways received an expression of interest from Dutch investment firm Infestos
for a potential alternative offer. In close consultation with the Board of Directors and
external advisors we evaluated the merits of such an offer and entered into conversations
to assess and consider the merits of Infestos’ proposal. During these talks, Infestos
expressed great confidence in our System Innovator strategy as well as our strategic goals
and further highlighted its intention for a recommended public offer for all issued and
outstanding shares in order to at least acquire a significant majority stake in Neways.
As Supervisory Board, we carefully assessed how the offer and non-financial covenants
would add to the continued success of Neways and how it would impact our employees,
other shareholders, customers, suppliers and creditors. In particular, we paid attention to
the protection of the interests of Neways’ minority shareholders. As such, we also compared
the Infestos alternative with the current shareholder structure and with the intended public
offer by VDL.
With speed of the essence, we focused on running a highly diligent process with Infestos
during which principals were set, deal conditions were negotiated and due diligence was
carried out. In the end, we unanimously concluded Infestos’ non-financial covenants and
offer price to be superior and fair. With Infestos on board we can accelerate our System
Innovator strategy as an independent company. Moreover, Infestos has a strong track record
when it comes to investing in companies that can play a key role in the energy transition,
one of the biggest challenges the world will face in the coming decades. On 24 June 2021,
we jointly announced that we had reached agreement on a recommended all-cash public
offer of €14.55 per share (cum dividend) by Infestos for all Neways shares. Subsequently,
on 6 July 2021 VDL announced that it would abandon its own public offer for all Neways
shares.
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After an intensive process during the remainder of 2021, with further deal and public offer
preparations, the offer launch and the Extraordinary General Meeting of Shareholders
convened to consider this matter, Infestos acquired 98.22% of all outstanding shares in
Neways.
The deal marks the start of a new phase of development for Neways, with Infestos as
a strong and resourceful new majority shareholder and partner to further drive the
transition to System Innovator and accelerate growth.
Composition of the Board of Directors
At the end of December 2020, Adrie van Bragt stepped down from the Board of Directors
and was succeeded by Steven Soederhuizen as Neways’ interim COO. On 19 April, he was
officially appointed to the Board of Directors for a term of four years.
Steven has worked more than 25 years for internationally operating engineering companies,
with many years of experience in the supervision of transformation processes. In our opinion,
the Board of Directors has the right mix of knowledge and skills to manage the transition to
System Innovator and increase Neways potential for value creation.
With the appointment of Eric Stodel as new CEO at the start of 2020 and Steven’s
appointment this year, Neways now has a Board of Directors in place with fresh impetus and
the right leadership skills to further drive implementation of its System Innovator strategy.
Name Ter m
Start of
current term
End of
current term Role
Eric Stodel 1
st
2020 2023 CEO
Paul de Koning 1
st
2015 N/A
1
CFO
Steven Soederhuizen 1
st
2021 2024 COO
1
Permanent contract of employment
Composition of the Supervisory Board
The composition of the Supervisory Board changed two times in 2021. We entered the year
with a temporarily expanded board of four members in order to ensure a smooth transition
of tasks to the two new members who were appointed in 2020.
After the General Meeting held on 19 April 2021, Peter van Bommel stepped down from the
Supervisory Board. From that moment the Supervisory Board again consisted of three members.
Following the successful public offer by Infestos, on 5 November 2021 Erwin Riefel and
Frank van Roij, both representing Infestos, were officially appointed as new members of the
Supervisory Board. From that moment the Supervisory Board consisted of five members.
Name Ter m
Start of
current term
End of
current term Role
Henk Scheepers 3
rd
2020 2022 Chair - dependent
Hans Büthker 1
st
2020 2024 Vice chair - independent
Karin de Jong 1
st
2020 2024 Member - independent
Erwin Riefel 1
st
2021 2025 Member - dependent
Frank van Roij 1
st
2021 2025 Member - dependent
Committees
The Supervisory Board had no committees in place in 2021. With Infestos as our new
majority shareholder and the expansion of the Supervisory Board to five members, the
board reassessed the need for such committees and decided to install three committees
as of 2022: an audit committee, with members Karin de Jong and Erwin Riefel;
a remuneration committee, with Henk Scheepers and Erwin Riefel; and a strategy
committee, with Frank van Roij and Hans Büthker.
Board remuneration
The remuneration policy for the Board of Directors was revised in 2020 in line with the
EU Shareholder Rights Directive II (SRD II) and adopted during the General Meeting of
Shareholders of 16 April 2020. The policy remained unchanged in 2021.
In 2021, the General Meeting of Shareholders approved and adopted an adjustment to
the fixed remuneration of the Supervisory Board. The adjustments are in line with Neways’
remuneration policy and reflect the increased responsibility and intensity of the Board’s
supervisory tasks. The remuneration does not apply to the two Supervisory Board members
representing Infestos. For their membership of the Supervisory Board they will not receive
a remuneration from Neways.
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The remuneration policy and the full remuneration report for 2021 are available for reference
on the corporate website (www.newayselectronics.com). The remuneration report will be
submitted to the upcoming General Meeting of Shareholders for an advisory vote. More
details regarding the remuneration of the Board of Directors and the Supervisory Board are
also provided in the financial statements on pages 93 to 96 of this report.
Plenary meetings and consultations
In the regular plenary Supervisory Board meetings, which were held both in person and
virtually, main topics discussed with the Board of Directors included Neways’ ability to
follow and ultimately exceed market growth against the backdrop of the ongoing global
component shortages. All Board members attended the regular meetings.
Other main topics that were discussed in depth included the progress booked with the
new System Innovator strategy launched this year as well as the progress booked with
the OneNeways project aimed at improving the flexibility of the entire organisation,
streamlining processes and reducing imbalances in capacity utilisation.
Special attention was paid to the progress made with the operational adjustments in
Germany and the Netherlands and the related downscaling of unprofitable revenue.
As Supervisory Board, we visited the German operating company concerned and spoke
with local management to get a better understanding of the business dynamics, the
challenges and the solutions. And finally, cost controls, working capital and cash flow
management also received more attention during the year, given the uncertain Covid-19
trajectory, restrictions and the ongoing global component shortages.
In addition to the regular plenary meetings and the associated agenda items, the
Supervisory Board was highly involved with all the dealings regarding the public offer
made by VDL and by Infestos, respectively. Over an extensive period the Supervisory Board
held weekly meetings (in person or virtually) with the Board of Directors to discuss the
approach and subsequent actions with regard to the offers of both parties. The Supervisory
Board also teamed up with members of the Board of Directors during their conversations
with VDL and Infestos.
Adoption of the 2021 financial statements
The 2021 financial statements have been submitted to us for review and discussed in detail
with KPMG as Neways’ independent auditor. KPMG has audited the financial statements
and issued an unqualified opinion, dated 24 February 2022. This opinion has been included
in the Other Information section (page 107) of this report.
We recommend that the shareholders adopt the 2021 financial statements at the General
Meeting of Shareholders to be held on 21 April 2022. Furthermore, we propose that the
General Meeting of Shareholders discharge the members of the Board of Directors and
Supervisory Board for responsibility for their management and supervision, respectively,
in the 2021 financial year.
Dividends
The proposed total dividend for 2019 and 2021 combined is €16.4 million. For further
explanation on the dividend policy see page 23.
Word of appreciation
We would like to express our gratitude and appreciation to all stakeholders who continued
to support Neways in 2021. Most notably, we would like to thank our highly professional
and resourceful employees. Their resilience, agility and dedication under these extraordinary
circumstances have not gone unnoticed and form the basis for the company’s results and
the progress it made in 2021, and which it will continue to make in the years to come.
We are confident that with the leadership team now in place and the support from Infestos,
Neways can further accelerate the implementation of its System Innovator strategy and its
growth plans in the coming years by delivering value-added solutions at the interface of
innovative technologies and the energy transition.
Son, 24 February 2022
Supervisory Board
Henk Scheepers (Chair)
Hans Büthker
Karin de Jong
Erwin Riefel
Frank van Roij
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GOVERNANCE
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FINANCIAL STATEMENTS
2021 Financial Statements 61
Consolidated statement of financial position 62
Consolidated statement of profit or loss and comprehensive income 64
Consolidated cash flow statement 65
Consolidated statement of changes in equity 66
Notes to the consolidated financial statements 67
Separate statement of financial position 100
Separate statement of profit or loss 101
Notes to the separate financial statements 102
Other information 107
Independent auditor's opinion 107
Trade Register 114
Provisions in the Articles of Association governing the appropriation of profit 114
Key figures and five-year summary 2017–2021 115
Address details 117
2021 FINANCIAL STATEMENTS
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Consolidated statement of financial position
Amounts x €1,000 as at 31 December Note 2021 2020
Fixed assets
Property, plant and equipment
Buildings and land
5 37,843 42,666
Machinery and equipment
5 21,901 25,484
Assets under construction
5 3,479 1,256
Intangible fixed assets
Software
6 2,381 3,032
Goodwill
6 2,754 2,754
Customer relationships
6 616 1,131
Equity-accounted investees 5 5
Deferred tax assets
7 8,292 6,878
Total non-current assets 77,271 83,206
Amounts x €1,000 as at 31 December Note 2021 2020
Current assets
Inventories
Raw materials and consumables
8 111,189 59,710
Work in progress
8 26,814 19,927
Finished goods
8 2,878 2,667
Receivables
Contract assets 6,956 10,129
Trade and other receivables
9 66,275 56,179
Taxes and social security premiums 930 327
Corporate income tax 0 28
Cash and cash equivalents
10 4,001 2,043
Total current assets 219,043 151,010
Total assets 296,314 234,216
Notes 1 to 26 are an integral part of these consolidated financial statements.
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Consolidated statement of financial position
For the portrait view of
the consolidated statement of financial position, click here.
Amounts x €1,000 as at 31 December Note 2021 2020
Equity
Issued and paid-in capital
11 6,135 6,087
Share premium 46,376 45,913
Retained earnings 58,467 49,225
Currency translation reserve
11 775 778
Equity attributable to holders
of equity instruments
in the company 111,753 102,003
Non-current liabilities
Lease liabilities
13 22,154 25,764
Provisions
14 1,284 0
Provisions for employee benefits
15 4,987 5,628
Deferred tax liabilities
7 662 1,146
Amounts x €1,000 as at 31 December Note 2021 2020
Current liabilities
Overdraft facility
13 45,002 4,587
Lease liabilities
13 5,286 5,148
Contract liabilities 8,188 3,388
Trade and other payables
17 88,934 65,332
Taxes and social security premiums 5,942 9,362
Corporate income tax 1,259 3,227
Provisions
14 863 8,631
Total equity and liabilities 296,314 234,216
Notes 1 to 26 are an integral part of these consolidated financial statements.
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Consolidated statement of financial position
For the portrait view of
the consolidated statement of financial position, click here.
Amounts x €1,000 Note 2021 2020
Revenue 469,535 478,571
Raw materials and consumables –285,627 –304,734
Personnel costs
18 –129,932 –134,587
Depreciation and amortisation
19 –13,541 –14,488
Impairment loss on trade receivables and contract
assets
9 580 –526
Other expenses –28,415 –26,701
Operating profit / (loss) 12,600 –2,465
Finance costs
20 –1,726 –2,071
Profit / (loss) before tax
Tax income / (expense)
7 –2,145 621
Profit / (loss) for the period 8,729 –3,915
Other comprehensive income
To be reclassified to profit or loss
in subsequent periods:
Foreign currency translation differences for foreign
operations –3 77
Amounts x €1,000 Note 2021 2020
Total other comprehensive income
to be reclassified to profit or loss
in following periods –3 77
Items not to be reclassified to profit or loss in
subsequent periods:
Remeasurement of the defined-benefit pension
obligation
15 374 –280
Related tax
7 –114 84
Total 260 –196
Total other comprehensive income
not to be reclassified to profit or loss
in following periods 260 –196
Other comprehensive income for the period,
net of tax 257 –119
Total comprehensive income for the period,
net of tax 8,986 –4,034
Earnings per share (in €)
21
- Basic earnings per share 0.71 –0.32
- Diluted earnings per share 0.71 –0.32
Consolidated statement of profit or loss and comprehensive income
Notes 1 to 26 are an integral part of these consolidated financial statements.
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Consolidated statement of profit or loss and comprehensive income
For the portrait view of the consolidated statement of profit or loss
and comprehensive income, click here.
Amounts x €1,000 Note 2021 2020
Operating activities
Result before tax 10,874 –4,536
Adjusted for:
Depreciation of property, plant and equipment
5 12,361 12,867
Amortisation of intangible fixed assets
6 1,180 1,621
Equity-settled share-based payment transactions
16 –29 –70
Finance costs
20 1,726 2,071
Movements in provisions and pension obligations –6,756 6,924
Movements in working capital
*
–41,211 24,941
–21,855 43,818
Other changes:
Interest paid –1,164 –1,604
Corporate income tax paid –5,982 –1,347
Cash flow from operating activities –29,001 40,867
Investing activities
Payments to acquire intangible assets
6 –14 0
Payments to acquire property, plant and equipment
5 –4,350 –3,317
Proceeds from sale of property, plant and equipment
5 0 0
Cash flow from investing activities –4,364 –3,317
Consolidated cash flow statement
Notes 1 to 26 are an integral part of these consolidated financial statements.
*
Amounts x €1,000 Note 2021 2020
Financing activities
Repayments of interest-bearing borrowings
13 0 0
Payments of lease liabilities –5,803 –5,849
Increase / (decrease) in overdraft facility
13 40,415 –31,958
Dividend paid to holders of ordinary shares
12 0 0
Proceeds from exercise of options 793 18
Cash flow from financing activities 35,405 –37,789
Change in cash and cash equivalents 2,040 –239
Effect of movements in exchange rates on cash held –82 42
Cash and cash equivalents as at 1 January 2,043 2,240
Cash and cash equivalents as at 31 December 4,001 2,043
Movements in working capital
Inventories –58,577 18,339
Contract assets 3,173 3,438
Trade and other receivables –10,096 14,724
Contract liabilities 4,800 3,388
Trade and other payables 23,511 –16,759
Taxes and social security premiums –4,022 1,811
–41,211 24,941
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Consolidated cash flow statement
For the portrait view of
the consolidated cash flow statement, click here.
Amounts x €1,000 Note
Issued and
paid-up
capital
Share
premium
Retained
earnings
Currency
translation
reserve
Total
equity
Balance as at 1 January 2020 6,075 46,313 53,000 701 106,089
Profit / (loss) for the financial year 0 0 –3,915 0 –3,915
Other comprehensive income 0 0 –196 77 –119
Total comprehensive income
for the period 0 0 –4,111 77 –4,034
Exercise of options
16 1 17 0 0 18
Award of share options 0 11 0 0 11
Award of performance shares 0 128 0 0 128
Issue of shares 11 –556 336 0 –209
Dividends
12 0 0 0 0 0
Total transactions with holders of
shares in the company 12 –400 336 0 –52
Balance as at 31 December 2020 6,087 45,913 49,225 778 102,003
Amounts x €1,000 Note
Issued and
paid-up
capital
Share
premium
Retained
earnings
Currency
translation
reserve
Total
equity
Profit / (loss) for the financial year 0 0 8,729 0 8,729
Other comprehensive income 0 0 260 –3 257
Total comprehensive income
for the period 0 0 8,989 –3 8,986
Exercise of options
16 39 754 0 0 793
Award of performance shares 0 98 0 0 98
Issue of shares 9 –389 253 0 –127
Dividends
12 0 0 0 0 0
Total transactions with holders of
shares in the company 48 463 253 0 764
Balance as at 31 December 2021 6,135 46,376 58,467 775 111,753
Consolidated statement of changes in equity
Notes 1 to 26 are an integral part of these consolidated financial statements.
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Consolidated statement of changes in equity
For the portrait view of the consolidated
statement of changes in equity, click here
Notes to the consolidated financial statements
1. GENERAL
Reporting entity and relationship with parent company
The consolidated financial statements of Neways Electronics International N.V . as at
31 December 2021 will be presented for adoption by the General Meeting of Shareholders
to be held on 21 April 2022. Neways Electronics International N.V . is a company that is
incorporated and domiciled in the Netherlands and its shares are publicly traded on the
Euronext Amsterdam stock exchange (symbol: NEWAY). The company has its registered
office in Eindhoven and its actual head office is located in Son.
Following a successfull public offer, Infestos Sustainable Solutions B.V . became the majority
shareholder as of 5 November 2021. Since that date, the ultimate parent of the Company
is B.V . Infestos S.a.r .l. in Luxemburg.
These consolidated financial statements comprise Neways Electronics International N.V.
and its subsidiaries (collectively the ‘Group’).
Reporting period
These financial statements relate to the year 2021, which ended on the balance sheet
date of 31 December 2021.
Continuity
Neways Electronics International N.V. has not identified any material uncertainty that might
cast reasonable doubt on the entity's ability to continue to do business as a going concern.
These financial statements have been prepared based on the assumption that the business
will continue to trade as a going concern.
Company financial statements
These financial statements have been prepared in accordance with Title 9, Book 2 of the
Dutch Civil Code, using the accounting principles adopted by the European Union and
applied in the consolidated financial statements. Correct interpretation of these statutory
financial statements requires the consolidated financial statements of the Company to be
read in conjunction with the company financial statements, as set out on pages 100 to 106.
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS
2.1 Basis of presentation of the financial statements
Statement of compliance
The consolidated financial statements of Neways Electronics International N.V. have been
prepared in accordance with the International Financial Reporting Standards, as adopted by
the European Union (EU-IFRSs) and as in effect at the start of the financial year, and in
accordance with Book 2, Section 362(9) of the Dutch Civil Code. Changes in key accounting
principles are described in the notes under point 2.2.
These consolidated financial statements were approved for publication by the Board of
Directors and the Supervisory Board on 24 February 2022.
Accounting principles
The consolidated financial statements have been prepared based on historical cost.
The consolidated financial statements are presented in euros.
Consolidation principles
The Group has consistently applied the following financial reporting principles to all
periods presented in these consolidated financial statements.
The consolidated financial statements include the financial data of Neways Electronics
International N.V. and its subsidiaries as at 31 December.
This data has been processed in accordance with the full consolidation method based on
uniform accounting principles. Adjustments have been made to bring any differences in
valuation principles in line with those of the company, Neways Electronics International N.V..
As a result, 100% of the financial data relating to the group companies has been included in
the consolidation. All assets, liabilities, equity, income, expenses and cash flows arising from
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transactions within the group are completely eliminated during consolidation. Subsidiaries
are businesses where Neways Electronics International N.V. exercises effective control.
A new subsidiary is included in the consolidation from the time when effective control
is acquired. Consolidation continues until effective control is lost. A change in the ownership
interest in a subsidiary without loss of effective control is recognised administratively
as an equity transaction. The Group changes the measurement of the remaining additions
to the fair value from the time when significant control is no longer exercised.
The companies included in the consolidation are listed in note 22.
2.2. Summary of key accounting principles
Changes in key accounting principles
Application of the revised standards and interpretations had no material impact on the
equity and the Group’s result.
Operational segments
The Group’s long-term strategy is aimed at strengthening its position as a one-stop
provider of electronic components, increasingly offering its System Innovator capabilities
to its customers. Intensive collaboration and clear communication between the different
Neways operating companies ensures that customers in this market are optimally served,
with all customer contacts being channelled through a designated point of contact. Neways’
Western European operating companies play an important role in promoting the company’s
one-stop-provider strategy. These operating companies are close to their customers, both in
terms of customer contact and geographically. The operating companies in Eastern Europe
and Asia focus primarily on producing high-volume, less complex and stable series with
a view to achieving cost benefits for customers. This production is usually commissioned
by sister companies in Western Europe.
Continuous improvement in the collaboration at all levels in the organisation is essential in
order to operate in respect of customers as a homogeneous, integrated group of companies
with a coherent quality policy, recognisable culture and a shared vision.
The Group’s management takes decisions based on its own assessments and direct
communication with all those involved. Financial management is based on consolidated
information. Neways is therefore only active in one operating segment as defined in IFRS 8.
Of the total revenue of €469.5 million in 2021 (2020: €478.6 million), a single customer was
responsible for a revenue of €113.1 million (2020: €101.9 million) and a second customer
generated a revenue of €31.5 million (2020: €29.2 million). The terms of the contracts are
in general less than 1 year. The breakdown of revenue by market sectors and geographical
areas is as follows:
Revenue split by market sector
Amounts x €1,000,000 2021 2020
Industrial 131 144
Semiconductor 181 162
Automotive 106 114
Medical 50 53
Other 2 6
Total 470 479
Geographical revenue split
Amounts x €1,000,000 2021 2020
Germany 128 164
Netherlands 231 210
Europe (other) 71 68
America 22 23
Asia 18 14
Total 470 479
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Notes to the consolidated financial statements
Geographical split of non-current assets*
Amounts x €1,000,000 2021 2020
Germany 24 29
Netherlands 33 35
Europe (other) 9 7
America 0 0
Asia 3 5
Total 69 76
* Non-current assets exclude financial investments (other than equity-accounted investees) and deferred tax assets.
Consolidated cash flow statement
The consolidated cash flow statement has been prepared using the indirect method.
Cash flows in foreign currencies are translated at the average foreign exchange rate.
Foreign exchange differences relating to cash and cash equivalents are shown separately in
the cash flow statement. Interest paid and income taxes are recognised under operational
cash flows. The cash flow statement also takes into account effects ensuing from the sale
and acquisition of group companies and participations included in the consolidated
accounts for the first time.
Business combinations and goodwill
Business combinations are recognised based on the acquisition method, which involves
recognising the identifiable assets and the liabilities and contingent liabilities assumed
at fair value, including those not previously recognised by the acquiree. Costs (excluding
finance costs) that relate to the acquisition are charged directly to the statement of profit
or loss. Finance costs incurred to set up loans to finance the acquisition are capitalised and
amortised over the terms of the loans. If the business combination comes into being in
different stages, the fair value of the acquirer's previously held interest in the acquiree is
recalculated at the acquisition date and the change in value recognised in the statement
of profit or loss.
Goodwill that arises as a result of a business combination is initially recognised at purchase
price (i.e. the difference between the purchase price of the business combination and
the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities). If the purchase price of a business combination is lower than the net fair value
of the assets and liabilities acquired, the difference is recognised directly in the statement
of profit or loss, as a bargain purchase gain on the acquisition date.
The goodwill is subsequently valued at cost, net of any cumulative impairment losses.
Goodwill is assessed for impairment each year, or more often if events or changing
circumstances give cause to believe that the carrying amount may have been subject to
an impairment. For the purpose of this impairment assessment, the goodwill ensuing from
a business combination is allocated from the acquisition date to the Group’s cash-
generating units or groups of cash-generating units that are expected to benefit from the
synergies of the business combination, irrespective of whether other assets or liabilities of
the Group are allocated to those units or groups of units. An impairment is determined by
assessing the realisable value of the cash-generating unit (or group of cash-generating units)
to which the goodwill relates. The realisable value is determined as either the value in use or
the direct realisable value minus the selling costs, whichever is higher. If the realisable value
of the cash-generating unit (or group of cash-generating units) is lower than the carrying
amount, an impairment is recognised. Impairment of goodwill is not reversed if the
realisable value increases at a later date.
Translation of foreign currencies
The consolidated financial statements are presented in euros, which is also the Group's
functional and reporting currency. Each group entity determines its own functional currency,
and the items that are recognised in the financial statements of each entity are valued based
on this functional currency.
I) Transactions and balance sheet items
Transactions in a foreign currency are recognised initially at the exchange rate for the
functional currency on the transaction date. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency exchange rate in force on the
balance sheet date. All differences are charged to the statement of profit or loss, except for
the differences relating to permanently invested loans to foreign participations that serve
to finance these foreign participations, and for which no repayments are scheduled and/or
immediately foreseen. These differences are recognised directly in equity until the net
addition in question is disposed of, at which time they are recognised in the statement of
profit or loss. Non-monetary items that are valued at historical cost in a foreign currency are
translated at the prevailing foreign exchange rates as at the date of the original transactions
Non-monetary items that are valued at fair value in a foreign currency are translated at
the prevailing foreign exchange rates as at the date of determination of the fair value.
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II) Group companies
On the reporting date, the assets and liabilities of the foreign entities are translated to
the Group’s reporting currency (i.e. euros) at the foreign exchange rate on the balance sheet
date, and to the statement of profit or loss at the foreign exchange rate on the date of
the transactions.
The exchange differences ensuing from translating equity and the borrowings of
participations are directly recognised as a separate equity component in the translation
reserve. On disposal of a foreign entity, the deferred cumulative amount recognised for that
foreign entity in the equity is then recognised in the statement of profit or loss.
Financial instruments
Financial assets
Financial assets are measured at fair value on initial recognition.
The Group’s financial assets comprise cash and cash equivalents, trade and other
receivables. Following initial recognition, trade and other receivables are recognised at
the amortised cost, if necessary net of any impairments.
Derecognition of financial assets on the balance sheet
A financial asset (or, if applicable, part of a financial asset or part of a group of similar
financial assets) is derecognised if the Group is no longer entitled to the cash flows from this
asset, or if the Group has transferred its rights to the cash flows from this asset, or (a) has
transferred all the risks and benefits associated with this asset, or (b) has not substantially
transferred all the risks and benefits of this asset, but has instead transferred control.
Impairment of financial instruments and contract assets
The Group recognises provisions for expected credit losses relating to:
• financial assets valued at amortised cost; and
• contract assets.
The Group values provisions for credit losses at an amount equal to the expected credit
losses during the entire term of the asset, with the exception of the following, which are
valued at an amount equal to the expected credit losses in the coming 12 months:
• debt instruments that are determined to have a low credit risk on the reporting date;
and
• other debt instruments and bank balances for which the credit risk (i.e. the risk of default
during the expected life of the financial instrument) has not significantly increased since
initial recognition.
Provisions for credit losses relating to trade receivables and contract assets are always
valued at an amount equal to the expected credit losses during the entire term of the asset.
When determining whether the credit risk associated with a financial asset has substantially
increased since initial recognition and when estimating expected credit losses, the Group
uses reasonable supporting information that is relevant and available without incurring
disproportionate cost or effort. This includes both quantitative and qualitative information
and analysis, based on the Group’s historical experience and the credit assessment made
by the Group, including forward-looking information.
The Group considers a financial asset to be in default if it is unlikely that the borrower will
be able to fully meet its credit obligations towards the Group, without the Group taking
recourse to debt-recovery actions such as invoking guarantees (if present).
Measurement of expected credit losses
The expected credit losses are a probability-weighted estimate of credit losses. Credit
losses are expressed as the present value of all cash deficits (i.e. the difference between
the cash flows payable to the entity under the contract and the cash flows that the Group
expects to receive). The expected credit losses are discounted at the effective interest rate
of the financial asset.
Presentation on the balance sheet of the provision for expected credit losses
Provisions for credit losses for financial assets valued at amortised cost are deducted from
the gross carrying amount for the asset.
Write-downs
The gross carrying amount of a financial asset is written down if the Group does not have
a reasonable expectation of collecting all or part of it. In the case of corporate customers,
the group makes an individual assessment of the timing and extent of write-down, based
on whether there is a reasonable expectation of collection. The Group does not expect any
significant recovery of amounts that have already been written down. However, in the case
of derecognised financial assets, activities may still be carried out in order to comply with
the Group’s procedures for collecting defaulted amounts.
Financial liabilities
Financial liabilities are initially recognised at fair value, including directly attributable
transaction costs in the case of borrowings. The Group’s financial liabilities comprise trade
and other payables, bank overdrafts and lease liabilities. After initial recognition, the
financial liabilities are recognised and valued at amortised cost based on the effective
interest method.
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Notes to the consolidated financial statements
Derecognition of financial liabilities on the balance sheet
A financial liability is derecognised on the balance sheet when the contractual obligations
arising from this are discharged or cancelled, or expire. If an existing financial liability is
replaced by another in respect of the same lender but under substantially different terms,
or the terms of the existing liability are changed significantly, any such replacement or
change is treated as derecognition of the original liability on the balance sheet and a
new liability is recognised. The difference in the associated carrying amounts is included
in the statement of profit or loss.
Netting of financial instruments
Financial assets and financial liabilities are only offset against each other and reported at
the net amount on the consolidated statement of financial position when there is a legally
enforceable right to offset the amounts and an intention to net the amounts, or to realise
the assets and settle the liability simultaneously.
Property, plant and equipment
Plant and equipment are recognised at cost, less the accumulated depreciation and
the accumulated impairment.
The cost of daily maintenance is recognised directly in the statement of profit or loss.
The cost of replacing parts of this plant and equipment is only recognised on the balance
sheet if it is likely that the resulting future economic benefits will accrue to the Group.
The carrying amount for plant and equipment is reviewed for impairment if events or
changes in circumstances indicate that the carrying amount may not be realisable.
Buildings and land are recognised at cost, net of accumulated depreciation on the
buildings and the accumulated impairment.
Land and assets under construction are not depreciated. Depreciation is calculated
using the straight line method based on the useful life and estimated residual value of
the asset in question, as follows:
• buildings 10 to 25 years
• plant and equipment 5 to 10 years
Structural alterations and improvements to buildings that are leased are also recognised
under buildings. Property, plant and equipment are derecognised on the balance sheet
when disposed of or if no future economic benefits are expected from their use or disposal.
Any gains or losses arising from removal of the asset from the balance sheet (which is
calculated as the difference between the net proceeds on disposal and the carrying amount
of the asset) is recognised in the statement of profit and loss during the year in which the
asset is derecognised. The asset’s residual value, useful life and the valuation methods are
assessed at the end of each financial year and adjusted if necessary.
Leases
Determining whether an arrangement is, or contains, a lease, is based on the terms of the
arrangement at the time of agreeing the lease arrangement. The agreement is (or contains)
a lease if fulfilment of the agreement depends on the use of one or more specific assets and
the agreement contains the right to use the asset(s) in exchange for a fee, even if that right
is not explicitly stated in an arrangement.
At the beginning, or upon reassessment, of a contract that contains a lease component, the
Group allocates the consideration under the contract to a lease and a non-lease component
based on the relative stand-alone prices.
The right-of-use asset and the lease liability are recognised from the commencement date
of the lease. The right-of-use asset is initially recognised at cost and subsequently at cost
less the accumulated amortisation and depreciation, using the linear method, and
accumulated impairment, adjusted based on specific recalculations of the lease liability.
In the case of some leases of plant and equipment with a low asset value and leases agreed
for a term of less than 12 months, the Group has decided not to recognise a right-of-use
asset and a lease liability on the balance sheet. The lease payments related to these leases
are recognised under other operating expenses on a linear basis during the term of the
contract.
At the time of initial recognition, the lease liability is valued based on the present value of
the lease payments that still have to be made, discounted at the interest rate implicit in the
lease in question, or if this interest rate cannot be determined, the Group’s incremental
borrowing rate. In general, the Group uses the incremental borrowing rate as the discount
rate. Following measurement at the time of initial recognition, the lease liability is increased
by the interest expenses and reduced by the lease instalments paid on each subsequent
occasion. Recalculation takes place when the future lease payments change due to a change
in an index or rate, a change in the estimated payable amount in relation to a residual value
guarantee, or, if applicable, a change in the expectation that a purchase option or renewal
option will be exercised, or if it is expected that a termination option will be exercised.
If the lease liability is recalculated in this way, a corresponding adjustment is made to the
measurement of the right-of-use asset, or recognised in the statement of profit or loss
when the carrying amount of the asset is reduced to nil.
The Group classifies the right of use associated with assets in the balance sheet under
property, plant and equipment and lease liabilities under lease liabilities.
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The Group has exercised its own judgement when determining the lease term for some
leases with renewal options. The estimation whether the Group will, with a reasonable
degree of certainty, make use of such options has an effect on the lease term, which in
turn significantly affects the amount of the lease liability and the right-of-use asset.
Intangible fixed assets (excluding goodwill)
Separately acquired intangible fixed assets are initially recognised at cost. Expenditure
after initial recognition is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. After initial measurement, intangible fixed
assets are measured at cost less accumulated amortisation and any accumulated losses due
to impairment. Intangible fixed assets with a definable useful life are amortised over the
useful life and assessed for impairment if there are indications that the intangible fixed asset
may have been subject to an impairment. The amortisation period and method for an
intangible fixed asset with a definable useful life are assessed at the end of each financial
year at the latest. Changes in the expected useful life or in the expected pattern of future
economic benefits of the asset are recognised by changing the amortisation period or
method and treated as a change in the accounting estimate.
The amortisation charge relating to intangible fixed assets is recognised as follows in
the statement of profit or loss:
• software 5 to 10 years
• customer relationships 5 to 10 years
Gains or losses arising from removal of an intangible fixed asset from the balance sheet are
calculated as the difference between the net proceeds on disposal and the carrying amount
of the asset, and recognised in the statement of profit and loss at the time of derecognition.
Impairment of non-financial assets (excluding goodwill)
The Group assesses whether there are indications that an asset has been subject to an
impairment on each reporting date. If any such indication exists, or if annual impairment
assessment of an asset is required, the Group estimates the asset’s realisable value.
The realisable value of an asset is the value in use, or the immediate realisable value of an
asset when sold, or the cash-generating unit net of the selling costs, whichever is higher.
The realisable value is determined for each asset individually, unless the asset does not
generate cash flows that are largely independent of those of other assets or groups of
assets. If the carrying amount of an asset exceeds the realisable value, the asset is deemed
to have been subject to an impairment and is written down to the realisable value.
The realisable value is the value in use or the direct realisable value minus the selling costs,
whichever is higher. When assessing the value in use, the estimated future cash flows are
discounted to their present value using a post-tax discount rate that reflects the current
market assessments of the time value of money and the specific risks associated with the
asset. Impairments losses of continuing operations are included in the statement of profit
or loss in the expense category that corresponds to the function of the impaired asset.
In the case of assets (excluding goodwill), an assessment is made on each reporting date to
determine whether there are indications that a previously recognised loss due to impairment
no longer exists or has decreased, and if so an estimation is made of the realisable value.
A previously recognised loss due to impairment is only reversed if a change has arisen in
the assumptions used to determine the realisable value of the asset since the last
impairment loss was recognised. If this is the case, the asset’s carrying amount is increased
to the realisable value. This increased amount may not exceed the carrying amount that
would have been determined, net of amortisation and depreciation, if no loss due to
impairment had been recognised for the asset in previous years. Any such reversal is
recognised in the statement of profit or loss.
Inventories
Inventories are valued at either cost or net realisable value, whichever is lower.
The cost includes the following cost items:
Raw materials and consumables – Purchase price on a first-in/first-out basis
Work in progress and finished goods – Direct costs of materials and labour, plus a portion
of the fixed production costs based on the normal
operating capacity, but excluding finance costs
The net realisable value is the estimated selling price in the ordinary course of business,
minus the estimated costs of completion and the estimated costs of finalising the sale.
Cash and cash equivalents
Cash and cash equivalents on the balance sheet consist of bank balances and cash.
For the purposes of the consolidated cash flow statement, the cash and cash equivalents
are as defined here.
Provisions
General
A provision is recognised if the Group has a current (contractual or constructive) obligation
as a result of an event in the past, if it is probable that an outflow of resources will be
required to settle a liability and if a reliable estimate can be made of the amount of the
liability. If the Group expects that a provision or a part of that provision will be reimbursed,
e.g. under an insurance contract, the reimbursement is only recognised as a separate asset
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if reimbursement is virtually certain. The expense associated with a provision is recognised
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 to their present
value at a post-tax discount rate that reflects the specific risks associated with the liability,
if applicable. If discounting takes place, the increase in the provision due to the passage of
time is recognised as finance costs.
Provision for onerous contracts
A provision for onerous contracts is recognised for expected losses incurred in relation to
an ongoing contract and valued at the present value of the expected costs of terminating
the contract or, if lower, at the present value of the expected net costs associated with
continuing the contract, determined based on the incremental costs required for fulfilling
the obligation pursuant to the contract. The Group recognises any loss due to impairment
for the assets that are related to the contract first, before a provision is made.
Provision for claims
A provision for claims is made if a ruling against the Group is likely in a legal dispute.
The provision represents the best estimate of the amount for which the liability can be
settled, and also includes legal costs.
Provision for restructuring
A restructuring provision is recognised when the Group has approved a detailed and
formal restructuring plan, and a start has been made on implementation of the restructuring
exercise, or when it has been announced publicly. A provision is not made for future
operating losses. For more information, refer to note 14.
Pensions and other post-employment benefits
The Group has a defined contribution plan based on the career-average system for employees
of the Dutch participations, for which amounts must be paid into the separately managed
industry-wide pension fund ‘Pensioenfonds Metalektro’. Other legal entities also contribute to
this pension plan. The participating businesses do not have any obligation to make good any
shortfalls in this pension fund, and also have no claim to possible surpluses. For these reasons,
this pension plan is treated as a defined contribution plan in the financial statements.
The Group has defined-benefit pension plans and early retirement plans for employees and
former employees of a number of German participations. The costs of the defined-benefit
pension plans and early retirement plans are determined annually in accordance with actuarial
practice by a qualified actuary using the ‘projected unit credit method’. Revaluations, which
include actuarial gains and losses, are recognised in other comprehensive income.
Revaluations are not transferred to the statement of profit or loss in the following periods.
The Group does not have any plan assets. The interest surplus is calculated by applying the
discount rate to the net liability under the pension plan that exists at the beginning of the
financial year, taking into account changes in the net liability during the financial year as a
result of pension plan contributions and payouts. Interest expenses and other costs related
to the defined-benefit and early retirement plans are recognised in the statement of profit
or loss. In the event of a change to or curtailment of a pension plan or early retirement plan,
the resulting changes in past service costs are recognised in the statement of profit or loss
on the effective date of the change or curtailment.
Long-service provisions
Employees of the Dutch participations receive additional remuneration upon reaching
a certain number of years in employment. The costs of these long-service bonuses are
determined based on actuarial calculations.
Please refer to note 15 for the assumptions used in this respect.
Short-term employee benefits
Short-term employee benefits are recognised as an expense upon performance of the
related service. A liability is recognised for the amount that is expected to be paid if
the Group has a legal or constructive obligation to pay this amount as a result of services
performed by the employee and the liability can be determined in a reliable manner.
Share-based payment transactions
Members of the Board of Directors and some other officers of the Group receive
remunerations in the form of share-based payment transactions where these employees
provide services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The costs of equity-settled transactions with employees are valued at fair value on the grant
date. The fair value is determined based on the Black & Scholes model (see note 16 for
more information). The plans that are in operation consist of a share option plan and a
performance share plan. Performance conditions are not taken into account when measuring
equity-settled transactions in the case of the share option plan. Performance conditions are
taken into account when measuring equity-settled transactions in the case of the
performance share plan.
The costs of equity-settled transactions, together with an equal increase in equity, are
recognised in the period in which the conditions for performance and/or the service are
fulfilled, ending on the date on which the employees concerned become fully entitled to
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the award (i.e. the date on which they become unconditional). These costs are recognised
as personnel costs. The cumulative costs recognised for equity-settled transactions as at
the reporting date reflect 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 amount
charged to the statement of profit or loss for a specific period reflects the changes in the
cumulative expense that is recognised at the beginning and end of that period. If a
commitment settled in equity instruments is cancelled, it is treated as if it has become
unconditional as of the cancellation date, and any expense not yet recognised for this
commitment is recognised immediately. However, if the cancelled commitment is replaced
by a new commitment and the latter is designated as a replacement commitment on the
grant date, the cancelled and the new commitments are treated as though they are changes
to the original commitment, as set out in the previous paragraph. The dilution effect on the
existing options and performance shares is reflected as an additional dilution of the shares
when calculating the diluted earnings per share (see also note 21).
Revenue recognition
Revenues are valued based on the fee specified in a contract with the customer. The Group
recognises revenues at the time when it transfers control of the goods or services to the
customer. For the types of products listed below, information about the nature and time of
meeting performance obligations in contracts with customers, including key payment terms
and the associated principles for revenue recognition, is provided.
Standard products
Customers acquire the right of disposal of standard products when the goods are delivered
to and accepted at their premises. This is also the time when revenues are recognised.
Invoices are generated at that time and are usually payable within 30 to 90 days. For some
customers, it has been agreed that the goods be delivered as consignment stock to the
customer’s warehouse. The revenues are recognised when the goods are withdrawn from
the customer’s consignment stock. Invoices are generated at that time and are usually
payable within 30 to 90 days.
Products made to order
In the case of products made to order, the Group has determined that the customer
has right of disposal of the finished goods when the products have been manufactured.
This is due to the fact that products made under these contracts are produced to
a customer’s specifications and, if a contract is terminated by the customer, the Group
is entitled to reimbursement of the costs incurred up to that date, including a reasonable
margin. The resulting uninvoiced amounts are presented as contract assets. Revenues and
the associated costs are recognised over time, in this case before the goods are delivered
to the customer. The related margin is realised at the time when production has been
completed and the product is in stock as a finished item.
Contract assets
The contract assets relate to the Group’s rights to reimbursement for work completed for
products made to order, which has not been invoiced on the reporting date. The contract
assets are reclassified as receivables when the rights become unconditional. In general,
this occurs when the Group sends an invoice to the customer.
Work in progress
The Group carries out development, prototyping and engineering projects for the customer.
The projects run for different periods.
Revenues are recognised over time based on the cost-to-complete method. The related
costs are recognised in the profit or loss statement when they are incurred. Advances that
have been received are included under the contract liabilities.
Revenues from work in progress amounted to approximately 5% of the total revenues of
the Group in the 2021 financial year (2020: approximately 5%).
Contract liabilities
The contract liabilities relate to the advance consideration received from customers
in relation to purchase of materials, for which revenue is recognised upon realization of
the end product for the customer.
Finance costs
The interest expenses listed below are recognised based on the amortised cost using the
effective interest method.
Taxation
Current tax and deferred tax
Current tax and deferred tax assets and liabilities for the current and previous years are
valued at the amount that is expected to be recovered from or paid to the tax authorities.
The amount of taxation is calculated based on the tax rates and applicable tax legislation,
as determined by law on the reporting date, in the countries in which the Group generates
taxable income. Current income tax that relates to items recognised directly in equity is
accounted for as equity and not in the statement of profit or loss. Management periodically
evaluates the positions taken in tax returns in situations where different interpretations are
possible and makes provisions where necessary.
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Deferred taxation
A provision for deferred tax liabilities is formed based on the temporary differences as at
the balance sheet date between the fiscal carrying amount of the assets and liabilities and
the carrying amount assigned to them in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences, other than in
the following cases:
• If the deferred tax liability arises from the initial recognition of goodwill or the initial
recognition of an asset or liability in a transaction that is not a business combination and
that, at the time of the transaction, does not have any influence on the profit before tax
or the fiscal result.
• In respect of taxable temporary differences pertaining to additions to subsidiaries,
if the time of resolution can be controlled wholly independently and it is probable that
the temporary difference will not be resolved in the near future.
Deferred tax assets are recognised for all deductible temporary differences, unused tax
facilities and tax losses available for offset, insofar as it is probable that taxable profit will
be available against which the deductible temporary difference can be offset, and the
deductible temporary differences, unused tax facilities and tax losses available for offset
can be utilised, except:
• If the deferred tax asset arises from the initial recognition of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction,
does not have any influence on the profit before tax or the taxable result.
• For deductible differences relating to additions to subsidiaries, to the extent that it is
probable that the temporary difference will be resolved in the near future and taxable
profit will be available against which the temporary difference can be offset.
The carrying amount for the deferred tax assets is assessed on the balance sheet date and
reduced to the extent that it is not probable that adequate taxable profit will be available
against which the temporary difference can be fully or partially offset. Unrecognised
deferred tax assets are reassessed on the balance sheet date and recognised to the extent
that it is probable that taxable profit will be available in the future against which these
deferred assets can be offset. Deferred tax assets and liabilities are valued at the tax rates
that are expected to apply to the period in which the asset will be realised or the liability
settled, based on the tax rates determined by law and prevailing tax legislation. The tax
on items recognised directly in equity is accounted for as equity instead of in the statement
of profit or loss.
Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable
right to set off tax assets against tax liabilities and the deferred taxation relates to the
same taxable entity and the same tax authority.
Government grants
Government grants are recognised if there is a reasonable degree of certainty that the grant
will be received and that all relevant conditions will be met. If the grant relates to a cost
item, the grant is recognised as income for the period necessary for allocating it
systematically to the costs for which the grant is intended. If the grant relates to an asset,
the fair value is credited to an accrual that is released to the statement of profit or loss in
equal annual instalments during the expected useful life of the asset concerned.
3. KEY ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
When preparing the Group’s financial statements, management has a duty to make
judgements, estimates and assumptions on the balance sheet date that affect the reported
amounts of revenues, expenses, assets, liabilities and off-balance sheet commitments.
However, the inherent uncertainty relating to these assumptions and estimates may lead
to outcomes that require material amendments to the carrying amount for the asset or
liability in question.
Judgements
When applying the Group’s financial reporting principles, the following judgements made
by management are those that have the most significant effect on the amounts recognised
in the financial statements.
Pensions
The pension plan for the employees in the Netherlands has been placed with an industry-
wide pension fund. This is a collective plan based on the career-average system and other
legal entities participate in it. This plan is administered by ‘Bedrijfstakpensioenfonds
Metalektro’. The participating businesses do not have any obligation to make good any
shortfalls in this pension fund, and also have no claim to possible surpluses. For these
reasons, this pension plan is treated as a contribution plan in the financial statements.
Lease liabilities – renewal options
A number of building leases contain renewal options that can be exercised by the Group up
to one year before the end of the non-cancellable contract period. The renewal options can
only be exercised by the Group and not by the lessors. The Group determines during the
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term of the lease whether it is reasonably certain that the renewal options will be exercised.
The group re-assesses whether it is reasonably certain that the options will be exercised in
the case of an important event, or important changes in circumstances that the Group itself
controls. The Group has estimated that, if it were to exercise the renewal options of
a maximum of 5 years, the potential future lease payments would result in an increase
of €14.8 million in the lease liabilities.
Revenue recognition
Please refer to ‘Revenue recognition’ under note 2.2 ‘Summary of key accounting principles'
for details of when the Group’s revenues are recognised, over time or at a specific moment
in time.
Estimates and assumptions
The key assumptions regarding the future and other significant sources of estimation
uncertainty on the balance sheet date, and which by their nature have a significant risk
of requiring a material adjustment to the carrying amount of assets and liabilities in the
next financial year, are set out below.
Fair value of assets and liabilities
Contingent consideration balances arising from business combinations are valued at fair
value on the acquisition date, as part of the business combination. If the contingent
consideration satisfies the definition of a financial liability, revaluation at fair value takes
place subsequently on each reporting date.
The fair value is based on the cash flows after they have been discounted to their
present value.
The key assumptions take into account the likelihood of the performance targets being
met, and the discount rate.
Property, plant and equipment
The asset’s residual value, useful life and the valuation methods are assessed at the end
of each financial year and adjusted if necessary. No adjustments were made during the
financial year.
Impairment of goodwill
The Group determines at least once a year whether goodwill has been subject to
impairment. This requires an estimate of the value in use of the cash-generating units to
which goodwill is allocated. To assess the value in use, the Group makes an assessment of
the expected future cash flows from the cash-generating unit and also determines a suitable
discount rate in order to calculate the present value of those cash flows. The carrying
amount of the goodwill as at 31 December 2021 was €2.8 million (2020: €2.8 million).
For more information, refer to note 6.
Deferred tax assets
Deferred tax assets relating to tax losses carried forward are recognised to the extent that
it is likely that taxable profits will be available against which the losses can be offset.
Determining the amount of deferred tax assets that can be recognised requires significant
management judgement based on the probable timing and level of future taxable profits,
in combination with future tax planning strategies and the impact of change of control.
The carrying amount of the deferred tax asset for tax losses as at 31 December 2021 was
€8.6 million (2020: €6.2 million). For more information, refer to note 7.
Inventories
When measuring inventories, an estimate is made of possible obsolescence. This involves
making estimates based on both historical and future revenue. Future revenue is based
on secured orders in the future. As at 31 December 2021, the provision for inventory
write-downs amounted to €15.3 million (2020: €13.6 million). For more information, refer
to note 8.
Provision for onerous contracts
When determining the amount of this provision, assumptions and estimates have been
made in relation to the expected costs of continuing the contracts until the time of delivery.
For more information, refer to note 14.
Restructuring provision
When determining the amount of this provision, assumptions and estimates have been
made in relation to the expected restructuring costs, including severance pay and
consultancy fees. For more information, refer to note 14.
Pension plans and long-service bonuses
The costs of defined-benefit pension plans, early retirement plans and long-service bonus
arrangements are determined using actuarial methods. The actuarial methods include
making assumptions about discount rates, future salary increases, mortality rates and future
indexation of pension benefits. Due to the long-term nature of these arrangements, these
estimates are subject to considerable uncertainty. All assumptions are reviewed on each
reporting date. The net commitment as at 31 December 2021 amounted to €5.0 million
(2020: €5.6 million). For more information, refer to note 15.
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Share based payments
The expenses to be recognised in the statement of profit or loss are based on the fair
value of the performance shares granted during the financial year. When determining
the fair value various assumptions are used, such as dividend yield, expected volatility of
the share, the risk-free interest rate, expected term of the performance shares and the
expected percentage which will vest.
4. AS YET UNADOPTED STANDARDS AND INTERPRETATIONS
A number of new standards are effective for financial years starting after 1 January 2021,
but may be applied earlier. However, when preparing its consolidated financial statements,
the Group has not opted for early application of any new or amended standards.
The following amended standards and interpretations are not expected to have a significant
effect on the Group's consolidated financial statements.
• Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37).
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12).
• COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16).
• Annual improvements to IFRS Standards 2018-2020.
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16).
• Reference to Conceptual Framework (Amendments to IFRS 3).
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
• IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts.
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2).
• Definition of Accounting Estimates (Amendments to IAS 8).
As the aforementioned amended standards and interpretations are not expected to have
a significant impact on the Group's consolidated financial statements, the estimated
quantitative and/or qualitative impact has/have not been explained further.
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5. PROPERTY, PLANT AND EQUIPMENT
The changes in property, plant and equipment are shown in the table below
Amounts x €1,000
Buildings and
land
Plant and
equipment
Assets under
construction Total
Cost:
Balance as at 1 January 2020 62,312 102,820 847 165,979
Additions 412 2,433 1,218 4,063
Disposals –2,246 –14,792 0 –17,038
Reclassification 217 326 –809 –266
Currency translation differences –109 103 0 –6
Balance as at 31 December 2020 60,586 90,890 1,256 152,732
Additions 720 3,055 2,429 6,204
Disposals –565 –5,451 0 –6.016
Reclassification 6 210 –210 6
Currency translation differences 455 480 4 939
Balance as at 31 December 2021 61,202 89,184 3,479 153,865
Assets under construction are not depreciated. Machinery and equipment and assets under
construction have been pledged to the lenders as security €19.2 mln (2020: €22.9 mln).
For more information, refer to note 13.
Property, plant and equipment includes €26.7 million (2020: €30.3 million) for
right-of-use assets.
Information about lease liabilities is provided in note 23.
Amounts x €1,000
Buildings and
land
Plant and
equipment
Assets under
construction Total
Depreciation and impairment:
Balance as at 1 January 2020 14,746 72,940 0 87,686
Depreciation charge for the financial year 5,457 7,411 0 12,868
Disposals –2,246 –14,722 0 –16,968
Reclassification 2 –296 0 –294
Currency translation differences –39 73 0 34
Balance as at 31 December 2020 17,920 65,406 0 83,326
Depreciation charge for the financial year 5,572 6,789 0 12,361
Disposals –312 –5,355 0 –5,667
Reclassification 6 0 0 6
Currency translation differences 173 443 0 616
Balance as at 31 December 2021 23,359 67,283 0 90,642
Carrying amount:
As at 31 December 2021 37,843 21,901 3,479 63,223
As at 31 December 2020 42,666 25,484 1,256 69,406
As at 1 January 2020 47,566 29,880 847 78,293
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6. INTANGIBLE FIXED ASSETS
The changes in intangible fixed assets are shown in the table below:
Amounts x €1,000 Software Goodwill
Customer
relationships Total
Cost:
Balance as at 1 January 2020 12,164 2,798 8,386 23,348
Additions 34 0 0 34
Disposals –1,387 0 –3,908 –5,295
Reclassification 7 0 0 7
Currency translation differences 4 0 0 4
Balance as at 31 December 2020 10,822 2,798 4,478 18,087
Additions 22 0 0 22
Disposals –8 0 0 –8
Reclassification 2 0 0 2
Currency translation differences 10 0 0 10
Balance as at 31 December 2021 10,848 2,798 4,478 18,124
Amounts x €1,000 Software Goodwill
Customer
relationships Total
Amortisation and impairment:
Balance as at 1 January 2020 8,024 44 6,740 14,808
Amortisation 1,106 0 515 1,621
Amortisation and depreciation on disposals –1,336 0 –3,908 –5,244
Reclassification –4 0 0 –4
Currency translation differences 0 0 0 0
Balance as at 31 December 2020 7,790 44 3,347 11,181
Amortisation 665 0 515 1,180
Amortisation and depreciation on disposals –1 0 0 –1
Reclassification 2 0 0 2
Currency translation differences 11 0 0 11
Balance as at 31 December 2021 8,467 44 3,862 12,373
Carrying amount:
As at 31 December 2021 2,381 2,754 616 5,751
As at 31 December 2020 3,032 2,754 1,131 6,917
As at 1 January 2020 4,140 2,754 1,646 8,540
The customer relationships acquired through business combinations in 2014, resulting from
the process of recognising and identifying all identifiable intangible assets acquired at the
time of the acquisition. Customer relationships are amortised over a period of 5 to 10 years.
The estimated amortisation on customer relationships in the coming three years is as
follows:
2022: €0.3 million
2023: €0.2 million
2024: €0.1 million
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The software is amortised on a linear basis over a period of 5 to 10 years. If there are
indications of an impairment, an estimate is made of the realisable value and an impairment
is recognised if the realisable value is lower than the carrying amount.
Assessment of impairment of goodwill
The production companies within the Group are the cash-generating unit to which this
goodwill arising from business combinations is allocated. All the legal entities within
the Group are inextricably linked, meaning that there is only one cash-generating unit.
The Group carried out its annual impairment assessment as at 31 December 2021.
The realisable value of the goodwill is determined based on value in use.
The future cash flows are used to calculate this value, in line with the cash-generating
unit’s financial budgets and forecasts over a period of five years. The discount rate
used in this case (before tax) is 13.1% (2020: 13%).
Key assumptions when calculating the value in use
The following assumptions have the greatest effect on the calculation of the value in
use of the cash-generating unit.
• Operating result
• Discount rates
• The growth rate used to extrapolate cash flows beyond the budgetary period.
Operating result
The operating result as a percentage of revenue is based on the current margin taken into
account some limited efficiency improvements expected during the budgetary period.
Discount rates
Discount rates reflect management’s current assessment of the specific market risks relating
to the cash-generating unit. It is the measure used by management to assess operational
performance and proposals for future additions. The discount rate before tax used in this
case is 13.1% (2020: 13.0%) and reflects the weighted average cost of capital (WACC).
Growth rate
The cash flows after the 5-year period have been extrapolated using a growth rate
of 0% (2020: 0%).
Sensitivity to changes in assumptions
When assessing the value in use of the cash-generating unit, management believes that
a reasonable and possible change to one or more of the key assumptions above would not
cause the carrying amount of the cash-generating unit to materially exceed its realisable
value. The calculated value in use is substantially higher than the cash-generating unit’s
carrying amount. The consequences of the key assumptions for the realisable value are
explained in detail below.
• Operating result: A decrease in the relative operating result of up to 0.7% per year from
2022 would not lead to an impairment.
• Discount rates: An increase in the discount rate (after tax) of 1% would not lead to an
impairment.
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Notes to the consolidated financial statements
7. TAXATION
Amounts x €1,000
Consolidated statement of
financial position
Consolidated statement
of profit or loss Other comprehensive income
2021 2020 2021 2020 2021 2020
Deferred tax assets
Available from unused tax losses 8,579 6,177 2,402 2,391
Intangible fixed assets 141 166 –25 –43
Financial fixed assets 198 187 11 14
Pensions 470 631 –47 –40 –114 84
Other provisions 0 818 –818 818
Other valuation differences 855 319 536 52
Total deferred tax assets 10,243 8,298 2,059 3,192 –114 84
Deferred tax liabilities
Intangible fixed assets –497 –466 –31 –103
Customer relationships –185 –339 154 155
Property, plant and equipment –735 –732 –3 –161
Inventories –408 –264 –144 –26
Other provisions –289 0 –289 224
Proceeds from revenue recognised over time –400 –656 256 253
Other valuation differences –99 –109 10 0
Total deferred tax liabilities –2,613 –2,566 –47 342 0
Net deferred tax asset 7,630 5,732 2,012 3,534 –114 84
Recognised as follows on the balance sheet:
Deferred tax assets 8,292 6,878
Deferred tax liabilities –662 –1,146
Net deferred tax asset 7,630 5,732
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The tax burden in the consolidated statement of profit or loss breaks down as follows:
Amounts x €1,000 2021 2020
Income tax for the current financial year
Current tax charge –4,536 –2,068
Changes in estimates related to prior years 379 –845
Deferred taxation:
Origination and reversal of temporary differences –390 1,143
Recognistion of current year tax losses 2,402 2,391
Income tax included in the consolidated statement of profit
or loss –2,145 621
Deferred taxation on items recognised in other comprehensive
income during the financial year:
Tax income / (expense) on defined-benefit pension plans –114 84
Income tax included in other comprehensive income –114 84
The adjustment to the tax rate for prior years relates to adjustments following a tax audit of
the German participations
The reconciliation between taxation at the rate applicable in the Netherlands and the
effective tax rate for the Group is as follows:
Amounts x €1,000 2021 2020
Result before taxes 10,874 –4,536
Taxation at the rate of 25% applicable in the Netherlands –2,695 1,151
Effect of other tax rates that apply for foreign participations 292 817
Tax charge adjustment in respect of previous years 379 –845
Non-deductible expense –109 –447
Losses in the current financial year for which no deferred tax
receivable has been recognised 0 –5
Effect of a higher tax rate on deferred tax liabilities –12 –50
Income tax included in the consolidated statement of profit
or loss –2,145 621
The Group has recognised deferred tax assets at a total of €8.6 million (31 December 2020:
€6.2 million), which relate entirely to tax loss carryforward, representing a total amount of
unused losses of approximately €28 million (31 December 2020: approximately €20 million).
The entire receivable of €8.6 million relates to tax loss carryforward in Germany. All unused
tax losses in Germany are recognised on the balance sheet as at 31 December 2021.
The relevant unused losses in Germany, generated by Neways Deutschland GmbH, can
be carried forward in time indefinitely. Management evaluated and concluded that the
change in control in 2021 did not impact the existance of the unused tax losses. A valuation
report has been drawn up to support the losses that can be carried forward after the change
of control. Management is of the opinion that the unused tax losses can be further used to
offset against future profits.
The German tax authorities imposed tax adjustmens following the tax audits performed over
the years 2015 up to and including 2017. The impact of the non-deductibility of certain costs
charged by the parent company to the German participations is considered in the local
German financial figures as an additional tax expense of €0.8 million. To avoid double
taxation, Neways will initiate a Mutual Agreement Procedure (‘MAP’). Under European Union
(‘EU’) Law, in the form of the EU Arbitration Convention, relevant states (in this
case Germany and the Netherlands) are obliged to come to a resolution and to eliminate
the double taxation in the case of a transfer pricing adjustment.
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Neways recorded the corresponding tax benefit against the (lower) Dutch corporate
income tax rate of 25%. Accordingly, the corresponding income tax benefit recognised
amounts to €0.7 million.
Furthermore, as at 31 December 2020 no deferred tax assets have been recognised on
the balance sheet for unused losses that could potentially be carried forward in China,
which amounted to €0.3 million. As at 31 December 2021 all losses were utilised against
the 2021 profit.
The company, together with the 100% participations established in the Netherlands, is
part of a single 'fiscal unity' for corporate income tax. The company, together with these
participations, is jointly and severally liable for all corporate income tax debts.
The effective tax rate, i.e. the ratio between total tax and the profit before corporate income
tax, amounts to 19.7% (2020: 13.7%). The regions where the Group operates are the
Netherlands, Germany, Slovakia, the Czech Republic, China and the United States, where
the following tax rates applied in 2021: the Netherlands 25%, Germany 30%, Slovakia 21%,
Czech Republic 19%, China 25% and the United States 27%.
8. INVENTORIES
The provision included for inventory write-downs amounts to €15.3 million
(2020: €13.6 million). The net change in the provision is €1.7 million (2020:€3.3 million).
The increase of inventories is largely an effect of increased scarcity of components in the
market and the deliberate choice, in consultation with our clients, to build up inventories
in certain sectors to guarantee deliveries. The provision mainly relates to materials for
products that are no longer manufactured and delivered and for which there is no longer
any demand on the balance sheet date, but which are still held in stock and used
occasionally. Inventories have been pledged to the lenders as security. For more
information, refer to note 13.
9. TRADE AND OTHER RECEIVABLES
Amounts x €1,000 2021 2020
Trade and other receivables 66,275 50,680
Related parties 0 5,499
Total 66,275 56,179
For the conditions relating to receivables due from related parties, refer to note 22.
The trade receivables do not include receivables with a remaining term in excess of one
year. Trade receivables have been pledged to the lenders as security. Trade receivables
are not interest-bearing and generally subject to a payment term of 30 to 90 days.
As at 31 December 2021, trade receivables with a nominal value of €0,8 million
(2020: €1.4 million) were subject to an impairment and a provision had been made
for this. An individual provision is made for each receivable.
The changes in the provision for impairment of receivables are as follows (see note 25 for
further information on credit risk):
Amounts x €1,000 2021 2020
Balance as at 1 January 1,416 942
Expenses for the financial year 180 722
Write-downs 2 –52
Unused amounts reversed –760 –196
Balance as at 31 December 838 1,416
The analysis of overdue but unimpaired receivables as at 31 December is as follows:
Amounts x €1,000 Overdue but not subject to impairment
Total
Not overdue
nor subject to
impairment < 30 days
30–60
days
60–90
days
90–120
days > 120 days
2021 66,275 57,878 6,398 698 303 379 619
2020 56,179 50,996 3,007 985 303 239 649
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Notes to the consolidated financial statements
10. CASH AND CASH EQUIVALENTS
The cash and cash equivalents are freely available during 2020 and 2021.
11. EQUITY
For details of the different equity components and the changes in equity between
31 December 2020 and 31 December 2021, please refer to the consolidated statement
of changes in equity.
Capital
As at 31 December 2021, the authorised share capital amounted to €15,000,000
(as at 31 December 2020: €15,000,000), consisting of 30,000,000 ordinary shares with
a nominal value of €0.50 per share.
As at 31 December 2021, 12,270,134 of these ordinary shares had been issued and paid
in full (31 December 2020: 12,174,037), resulting in a paid-up capital of €6,135,067
(31 December 2020: €6,087,019). The breakdown of the increase in the number of issued
and fully paid-in ordinary shares during the 2020 and 2021 financial years is as follows:
Number x 1,000
Ordinary shares issued
and paid-in
1 January 2020 12,150
Issued in exchange for cash payment upon exercise of
share options 2
Issued due to final award of performance shares 22
31 December 2020 12,174
Issued in exchange for cash payment upon exercise of
share options 78
Issued due to final award of performance shares 18
31 December 2021 12,270
Share premium
The amounts contributed by shareholders in excess of the nominal share capital are
recognised as share premium. This also includes additional capital contributions made
by existing shareholders without any issue of shares, or issue of rights to subscribe for
or acquire shares in the business. The share premium reserve includes an amount of
€54,000 as the share-based remuneration reserve.
Currency translation reserve
Currency translation reserve comprises both the translation differences arising from
the translation of the financial statements of foreign participations and the translation
differences arising from the translation of permanently invested loans to foreign participations
that serve to finance these foreign participations and for which no repayments are foreseen.
12. DIVIDEND PAID AND PROPOSED
As of the Annual Meeting of Shareholders held in 2015 the dividend policy is a dividend
payment of 40% of the net profit. Considering the current highly simplified shareholder
structure with one shareholder owning almost all Neways shares, after a public offer, the
Board of Directors and Supervisory Board are of the opinion that a deviation from this
dividend policy is appropriate. The proposed dividend payment falls within the limit of the
statutory borders, the legal framework and the credit agreements with the banks.
On 5 March 2020, it was proposed that a dividend be paid on ordinary Neways shares for
the 2019 financial year. This dividend would become payable as per 4 May 2020. Due to the
COVID-19 pandemic, it was decided to revoke this dividend resolution on 16 April 2020.
At the upcoming General Meeting of Shareholders, at the 21 April 2022, Neways proposes
that the dividend for the 2019 financial year of €0.28 per share will yet be distributed to the
shareholders. The net loss for the 2020 financial year is deducted from the retained
earnings. The Board of Directors further proposes that a dividend of €1.06 per share
will be distributed for the 2021 financial year.
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The dividend will be paid in cash.
Amounts x €1,000 2021 2020
Approved and paid during the year
Dividend on ordinary shares:
Final dividend for 2020: No dividend 0 0
Proposed for approval by the General Meeting of Shareholders
Dividend on ordinary shares:
Final dividend for 2021: €1.06 13,006 0
Final dividend for 2019: €0.28 3,436 0
13. OTHER FINANCIAL LIABILITIES
Amounts x €1,000
Effective
interest rate Maturity date
Outstanding
amount
Outstanding
amount
2021 2020
Short-term
Overdraft facility
Euribor +
(1.3% – 2.2%) 11 Feb. 2024 45,002 4,587
Lease liabilities (1.3% - 6.0%) 31 Dec. 2029 5,286 5,148
Total current interest-bearing
borrowings 50,288 9,735
Long-term
Lease liabilities (1.3% - 6.0%) 31 Dec. 2029 22,154 25,674
Total long-term interest-bearing
borrowings 22,154 25,674
Bank credit facilities
The credit facility available as at 31 December 2021 (overdraft and bank guarantee facility)
amounted to a total of €65 million (interest charge: 1-month Euribor + 1.3% to 2.2%,
depending on the senior net debt/EBITDA ratio). On the balance sheet date,
€48.1 million of this amount was used for the bank overdraft and bank guarantees
(31 December 2020: €7.7 million). As security for the repayment of the debts to the
financial institutions, a pledge has been established on business inventory, machinery,
assets under construction, inventories, receivables (excluding contract assets) and on the
rights under the credit insurance policy of the Dutch and German group companies.
The total value of the pledge as at 31 December 2021 was approximately €94 million.
On behalf of the Company, all Dutch and German group companies have issued a joint
and several liability statement in respect of the financial institutions.
Furthermore, the financial institutions require the guaranteed capital (adjusted for the
net deferred tax assets and intangible fixed assets) as at 31 December 2021 to be at
least €55 million and an EBITDA, corrected for the allocation to the restructuring provisions
in the financial year, of €12.5 million or more.
The movement in the overdraft facility does not include non-cash changes.
More information about the bank covenants with financial institutions is provided in note 25.
Lease liabilities (1.3% - 6.0%)
This relates to the present value of the remaining lease instalments, discounted at the
Group’s incremental borrowing rate.
Fair value
The fair value for each financial instrument of the Group approximates the carrying amount.
The fair value of cash and cash equivalents, trade receivables, other receivables, trade
payables and other payables approximates the carrying amount, mainly due to their short
terms to maturity. Bank overdrafts are payable on demand.
Hierarchy in fair values
The Group uses the following hierarchy when determining and reporting financial
instruments, split out by valuation method.
Level 1: quoted (unadjusted) prices on active markets for identical assets or liabilities.
Level 2: other methods where all variables have a significant effect on the recognised fair
value, and are directly or indirectly observable.
Level 3: methods where all variables are used that have a significant effect on the fair value
measurement, but which are not based on observable market information.
During the 2020 and 2021 financial years, the Group did not make use of financial
instruments measured at fair value.
In the case of recurring assets and liabilities recognised in the financial statements, the
Group reassesses these at the end of each review period to determine whether there has
been a change in classification within the hierarchy (based on the input at the lowest level
with significance for the entire measurement). No transfers took place between Level 1
and Level 2 during the period under review.
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14. PROVISIONS
In 2021, movements in the provisions item were as follows:
Amounts x €1,000
Onerous
contracts
Claims
provision
Restructuring
provision Total
Balance as at 1 January 2020 810 820 0 1,630
Arising during the year 0 1,117 7,106 8,223
Utilised –656 –231 0 –887
Released 0 –335 0 –335
Balance as at 31 December 2020 154 1,371 7,106 8,631
Arising during the year 0 250 454 704
Utilised –154 0 –6,316 –6,470
Released 0 –561 –157 –718
Balance as at 31 December 2021 0 1,060 1,087 2,147
Current 0 60 803 863
Long-term 0 1,000 284 1,284
Onerous contracts
The provision for onerous contracts relates to expected losses on ongoing development
projects and other onerous contracts.
Claims provision
The provision for claims relates to disputes in which the business is involved.
The claims are expected to be settled in 2022 and 2023.
Restructuring provision
This provision was formed in 2020 for the restructuring exercise relating to three operating
companies. In the Netherlands, two operating companies have been restructured to better
position the organisation for future growth. In Germany, production capacity is structurally
scaled down as a result of reduced demand from the Automotive sector due to the
pandemic. Following the announcement of the plans, the Group recognised a provision
for expected restructuring costs, including severance pay and consultancy fees.
The restructuring exercises are completed. Expected payments will continue till 2024.
15. PENSIONS, EARLY RETIREMENT PLANS AND LONG-SERVICE BONUSES
Pension provisions
The Neways Group has pension plans for its employees in the Netherlands and for some
of its employees in Germany.
The pension plan for the certain employees in the Netherlands has been placed with an
industry-wide pension fund. This is a collective plan based on the career-average system
and other legal entities participate in it. This plan is administered by ‘Bedrijfstakpensioen-
fonds Metalektro’. The participating businesses do not have any obligation to make good
any shortfalls in this pension fund, and also have no claim to possible surpluses. For these
reasons, this pension plan is treated as a defined contribution plan in the financial
statements. At the end of 2021, the funding ratio of Bedrijfstakpensioenfonds Metalektro
was 107.9% (2020: 97.2%). The funding ratio is lower than the funding ratio required under
the recovery plan. The pension fund has an approved recovery plan, which aims to achieve
recovery of the funding ratio through measures such as foregoing future indexation of
pensions, scaling back pension payments, and increasing pension contributions. In the
light of this, no additional contribution is required from the business.
A top-up pension plan, administered by Zwitserleven, applies to some employees in the
Netherlands. This pension plan is classed as a defined contribution plan. There is no
obligation to make good any shortfalls.
The pension plan for certain employees in Germany is a self-administered commitment that
is classed as a defined-benefit plan (without plan assets). The pension plan is a final pay
plan, where the amount of the benefit depends on the period of service and the salary on
the retirement date.
The participants do not have to pay contributions into the pension plan. To guarantee future
payment of accrued pension rights, the employer pays the statutory contributions to the
pension benefits guarantee fund (‘Pensionsversicherungsverein’), which takes over a
company’s outstanding pension obligations in the event of insolvency. The pension
obligations are determined and recognised in accordance with IAS 19. The pension plan is
exposed to interest-rate risk and changes in the life expectancy of the pensioners.
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Early retirement plans
There is an early retirement plan for some of the employees in Germany. The early retirement benefits and contributions are recognised
in accordance with IAS 19.
Provision for long-service bonuses
The employees in the Netherlands receive additional remuneration upon reaching a certain number of years of employment. The obligations
relating to these long-service bonuses are recognised in accordance with IAS 19.
The changes in the present value of the liability for defined benefits, early retirement benefits and long-service bonuses during the financial
year were as follows:
Amounts x €1,000
Defined benefit
obligation
Early retirement
provisions
Provision for long-service
bonuses Total
2021 2020 2021 2020 2021 2020 2021 2020
Balance as at 1 January 4,495 4,410 75 33 1,058 983 5,628 5,426
Costs allocated to the financial
year 17 15 –14 42 72 192 75 249
Interest expense 5 25 0 0 0 0 5 25
Amounts paid out –199 –196 0 0 –122 –117 –321 –313
Employer contributions –26 –39 0 0 0 0 –26 –39
Total –203 –195 –14 42 –50 75 –267 –78
Revaluation of (profit) / losses
included in other comprehensive
income:
Adjustments due to changes
in the financial assumptions –345 281 0 0 0 0 –345 281
Experience adjustments –29 –1 0 0 0 0 –29 –1
Demographic adjustments 0 0 0 0 0 0 0 0
Total –374 280 0 0 0 0 –374 280
Balance as at 31 December 3,918 4,495 61 75 1,008 1,058 4,987 5,628
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The total expense in the consolidated statement of profit or loss and comprehensive income for the plans and arrangements relating to
defined benefits, early retirement and long-service can be broken down as follows:
Amounts x €1,000
Defined
benefit obligation
Early retirement
plans
Provision for
long-service bonuses Total
2021 2020 2021 2020 2021 2020 2021 2020
Expenditure charged to the
statement of profit or loss
Costs allocated to the financial
year 17 15 –14 42 72 192 75 249
Interest expense 5 25 0 0 0 0 5 25
Subtotal in the statement of
profit or loss 22 40 –14 42 72 192 80 274
Revaluation of (profit)/losses
included in other comprehensive
income:
Adjustments due to changes in the
financial assumptions –345 281 0 0 0 0 –345 281
Experience adjustments –29 –1 0 0 0 0 –29 –1
Demographic adjustments 0 0 0 0 0 0 0 0
Total pension and long-service
expenses –352 320 –14 42 72 192 –294 554
In 2022, the Group expects to contribute €21,000 (2021: €39,000) to the defined-benefit pension plans. The average term of the obligation
under the defined-benefit pension plans as at 31 December 2021 amounted to 10.5 years (2020: 11.3 years). The adjustments due to
changes in financial assumptions reflect a 0.6% increase in the discount rate.
Key assumptions used in the actuarial calculations for the plans in respect of the pension obligations for the German employees:
2021 2020
Discount rate 0.7% 0.1%
Future salary increases 0.0% 0.0%
Future pension increases 1.75% 1.75%
Estimated remaining life expectancy of pensioners (years) 10.5 11.3
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Quantitative sensitivity analysis of the key assumptions used in the actuarial calculations for the German employee plans
as at 31 December 2020:
Amounts x €1,000 Discount rate
Future
salary increases
Future
pension increases
Life
expectancy of pensioners
Sensitivity
0.5%
increase
0.5%
decrease
0.5%
increase
0.5%
decrease
0.5%
increase
0.5%
decrease
Increase
of 1 year
Decrease
of 1 year
Impact on the liability –241 264 0 0 266 –246 300 –289
Key assumptions used in the actuarial calculations for the plans in respect of the long-service bonus obligations relating to the Dutch
employees:
2021 2020
Discount rate 0.7% 0.1%
Departure rate 43% 42%
Quantitative sensitivity analysis of the key assumptions used in the actuarial calculations for the Dutch employee plans
as at 31 December 2021:
Amounts x €1,000 Discount rate Departure rate
Sensitivity 0.5% increase 0.5% decrease 5% increase 5% decrease
Impact on the liability –39 42 –84 84
The above sensitivity analyses have been prepared on the basis of extrapolation of the effect that reasonable changes in the key assumptions
at the end of the reporting period will have on the defined-benefit pension obligation and the jubilee obligations. The expense in 2021 for
the pension plan recognised as a defined-contribution plan for the employees in the Netherlands amounts to €5,218,000 (2020: €5,049,000).
A slight increase in payments is expected in 2022.
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Notes to the consolidated financial statements
16. SHARE-BASED PAYMENT AGREEMENTS
Up to 2017, Neways Group offered a share option plan for the members of the Board of
Directors and a select group of key company officers who had been employed by Neways
Group for at least one year prior to the year in which the options were granted. This plan
has resulted in the allocation of non-transferable options on Neways shares. The options
become vested three years after the grant date and may be exercised during a two-year
period from that date, meaning that the total term is five years. The options may only be
exercised by converting them into shares. If an option holder leaves the company, his/her
option rights lapse.
During the financial year, 202,500 options were exercised. The fair value of the options
granted before 31 December 2019 is €249,492. The weighted average fair value per option
is €1.30. No expense has been recognised in the statement of profit or loss (2020: €11,975).
The average share price of shares in Neways in 2021 was €12.59 (2020: €7.66).
The table below shows the changes and the exercise price of the share options.
Option holders
Balance as at
31/12/2020
Lapsed
2021
Exercised
2021
Balance as at
31/12/2021
Exercise price
(in €)
P.H.J. de Koning 15,000 –15,000 0 11.71
Former director
H.W.T. van der Vrande
3
125,000 –125,000
2
0
15,000 –15,000 0 7.10
15,000 –15,000 0 11.71
Other company officers
employed by the business 10,000 –10,000 0 7.10
27,500 –5,000 –22,500 0 11.71
Total 207,500 –5,000 –202,500 0
1) The weighted average price on the dates when these options were exercised was €12.81.
2) Options held by former shareholders. The exercise of these options did not have impact on Neways share capital.
3) Mr H.W.T van der Vrande stepped down from the Board of Directors with effect from 1 January 2020.
1
Following adoption by the General Meeting of Shareholders on 18 April 2017, the Group
introduced a ‘performance share plan’ under which the members of the Board of Directors
and a select group of key company officers are conditionally awarded performance shares in
the company. Note 22 details the allocation per member of the Board of Directors and per
key company officer.
Performance shares vest at the end of a three-year performance period, subject to
(i) the achievement of predetermined financial targets that adequately reflect the Company’s
long-term strategy and (ii) the holder continuing to work as a member of the Board of
Directors or, as applicable, as a key company officer (‘participant’). The award percentage is
determined on a linear basis between the minimum level (50% grant) and
the maximum level (200% grant). If a participant leaves the company during the three-year
performance period, any unvested performance shares for that participant will lapse.
Prior to awarding, performance shares do not give the holder any rights on those shares,
such as dividend or voting rights. Vested performance shares must be held by the
participants for a period of two years from the date of vesting. In 2021 all vested shares
relating to the 2017 and 2018 performance awards which were still subject to the two-year
lock-up period were tendered under the offer of Infestos (the ‘Offer’) under the conditions of
the offer memorandum. Consequently 40,600 shares have been offered and settled against
the offer price of €14,55 per share on 5 November 2021 and was considered to
be a deviation from the best practice provision as contained in the Code, however,
deemed appropriate in the light of the Offer. All other outstanding conditional awards
remain outstanding and are not affected by the Offer.
During the financial year, 43,986 performance shares (based on 100% achievement of
target) were awarded (2020: 21,076). The total fair value of the performance shares granted
during the financial year is €238,854 (2020: €0). The fair value per performance share is
€8.58 (2020: €5.09). In total, €96,340 (2020: €128,711) has been recognised as an
expense in the statement of profit or loss.
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The following table shows the changes in the number of outstanding performance shares
upon achievement of the desired performance level.
Numbers 2021 2020
Balance as at 1 January 68,920 104,712
Awarded during the year 43,986 21,076
Lapsed during the year due to departure –10,340 –21,164
Fully vested performance shares for for 2018 (2017) –27,589 –35,704
Balance as at 31 December 74,977 68,920
In respect to the performance shares issued in 2020, the performance criteria were not
met in 2020, and the shares issued are therefore not expected to vest. However, as the
Supervisory Board has the discretionary power required for nonetheless vesting shares up to
the end of the performance periods, the performance shares issued continue to be noted in
the table of outstanding performance shares.
The table below shows the assumptions used to calculate the fair value of the allocated
performance shares in the financial year.
2021 2020
Dividend yield (%) 4.57 6.69
Expected volatility of the share (%) 37.74 37.82
Risk-free interest rate (%) –0.69 –0.68
Expected term of the performance shares (in years) 3.00 3.00
Expected to vest (%) 100.00 100.00
The Black & Scholes model was used to determine the fair value of the options and the
performance shares on the grant date. The expected share volatility is based on the
assumption that past volatility is indicative of the future trend. The expected term is based
on historical data regarding lapsing of options and performance shares. Management
believes that a possible change in one or more of the above assumptions would not cause
the fair value of the share options or performance shares to differ materially from the
calculated fair value.
17. TRADE AND OTHER PAYABLES
Amounts x €1,000 2021 2020
Trade payables 67,347 44,262
Other payables 11,745 9,465
Personnel costs 9,621 8,302
Repayment obligation for NOW government grant 0 2,663
Interest payable 193 142
Related parties 28 498
Total 88,934 65,332
This item includes €949,000 (31 December 2020: €677,000) in non-current liabilities.
The following conditions apply to these financial liabilities:
• Trade payables are not interest-bearing and generally subject to a payment term
of around 60 days.
• Other payables are not interest-bearing and subject to an average payment term
of 6 months.
• The interest payable is normally settled quarterly during the financial year.
• For the conditions for related parties, refer to note 22.
• For an explanation of the credit risk policy within the Group, refer to note 25.
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Notes to the consolidated financial statements
18. PERSONNEL COSTS
Amounts x €1,000 Note 2021 2020
Wages and salaries 108,952 112,441
Pension costs 5,347 5,172
Other social security costs 15,537 16,833
Costs of share option and performance share plans
16 96 141
Total employee costs 129,932 134,587
The personnel costs included the following items:
• ‘Kurzarbeit’ government grant received for short-time working, amounting to
€2,096,000 (2020: €4,290,000).
• Restructuring costs benefit in 2021 amounting to €157.000 (2020: €6,930,000).
During 2021, the Group employed an average of 2,542 people (2020: 2,705). This also
includes temporary staff. In total, an average of 2,281 people were employed by Neways
(2020: 2,476). Of the total workforce, an average of 1,496 people including temporary staff
were employed by foreign participations (2019: 1,653). The split by job role group was
as follows:
Average number expressed in FTEs 2021 2020
General administrative 376 402
Engineering and development 454 471
Logistics 97 99
Production 1,405 1,514
Warehouse 210 219
Total 2,542 2,705
19. DEPRECIATION AND AMORTISATION
Amounts x €1,000 2021 2020
Depreciation of property, plant and equipment 12,361 12,867
Amortisation of intangible fixed assets 1,180 1,621
Total amortisation and depreciation 13,541 14,488
20. FINANCE COSTS
Amounts x €1,000 2021 2020
Interest on borrowings and bank overdrafts 775 989
Interest on lease liabilities 507 596
Other 445 486
Total finance costs 1,727 2,071
21. EARNINGS PER SHARE
Basic earnings per share
The basic earnings per share are calculated by dividing the net profit attributable to holders
of ordinary shares by the weighted average number of ordinary shares in issue during the
financial year.
Diluted earnings per share
This represents net profit attributable to ordinary shareholders, divided by the sum of the
weighted average number of ordinary shares in issue during the year and the weighted
average number of ordinary shares that would have been issued upon conversion into
ordinary shares of all dilutive potential ordinary shares. In the case of negative earnings
per share, the diluted earnings per share will show no improvement.
92 | 2021 ANNUAL REPORT
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As at 31 December 2021, the diluted earnings per share were €0.71 (2020: €–0.32).
The table below shows the net profit and number of shares taken as the basis for calculating
the basic and diluted earnings per share:
Number x 1,000 2021 2020
Net profit attributable to holders of ordinary shares,
adjusted for the effect of dilution 8,729 –3,915
Number x 1,000 2021 2020
Weighted average number of ordinary shares 12,215 12,165
Effect of dilution:
Share options 32 25
Performance shares 79 56
Adjusted weighted average number of ordinary shares for the
purpose of calculating the diluted earnings per share 12,326 12,246
No other transactions in ordinary shares or potential ordinary shares took place between
the reporting date and the date on which these financial statements were prepared.
22. INFORMATION ABOUT RELATED PARTIES
The consolidated financial statements include the financial data of Neways Electronics
International N.V. and its subsidiaries as listed in the table below:
% participation
Domicile/country
2021 2020
Neways B.V. Son, The Netherlands 100 100
Neways Industrial Systems B.V. Son, The Netherlands 100 100
Neways Technologies B.V. Son, The Netherlands 100 100
Neways Advanced Applications B.V. Son, The Netherlands 100 100
Neways Micro Electronics B.V. Echt, The Netherlands 100 100
Neways Cable & Wire Solutions B.V. Echt, The Netherlands 100 100
Neways Leeuwarden B.V.
Leeuwarden,
The Netherlands 100 100
Neways Deutschland GmbH Riesa, Germany 100 100
Neways Neunkirchen GmbH Neunkirchen, Germany 100 100
Neways Vertriebs GmbH Neunkirchen, Germany 100 100
Neways Electronics Riesa GmbH
& Co. KG Riesa, Germany 100 100
Neways Technologies GmbH Erfurt Erfurt, Germany 100 100
Neways Electronics De
cín s.r.o. Decín, Czech Republic 100 100
Neways Slovakia a.s. Nová Dubnica, Slovakia 100 100
Neways Wuxi Electronics Co. Ltd. Wuxi, China 100 100
Neways Electronics US Inc. Wilmington, USA 100 100
Neways Holdco B.V. Son, The Netherlands 100 0
Neways Sub B.V. Son, The Netherlands 100 0
The Group holds a minority interest in the following entity:
% participation
Domicile/country
2021 2020
Qualifizierungszentrum
Region Riesa GmbH Riesa, Germany 5.26 5.26
ˇˇ ˇˇ
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Notes to the consolidated financial statements
The table below shows the total number of transactions with related parties for the financial
year in question (for information about the outstanding balance as at 31 December 2021
and 31 December 2020, see notes 9 and 17):
Amounts x €1,000 Sales to
Purchases/
services from Owed by Owed to
Entity with significant influence
on the Group:
Infestos
2021,
as of 5 November 0 23 0 28
VDL Groep
2021,
until 5 November 26,804 3,792 0 0
VDL Groep 2020 29,131 3,590 5,499 498
Entity with significant influence on the Group
Infestos: As at 31 December 2021, Infestos Sustainability B.V. held 97.8 % of the issued
shares in Neways Electronics International N.V. (31 December 2020: less than 3.0%).
VDL Groep: VDL Beleggingen B.V. held shares in Neways Electronics International N.V. until
5 November 2021. On 5 November, VDL Beleggingen B.V. sold all its shares to Infestos
(31 December 2020: 27.4%).
Conditions governing transactions with related parties
With Infestos a consultancy agreement is closed as of 5 November 2021 to provide
Neways with management support and advisory services. These services are provided by
employees of Infestos. Infestos receives a fixed yearly fee of €150,000 for these services.
All transactions with related parties take place subject to conditions that are equivalent to
those that apply between independent parties. Outstanding balances at the end of the
financial year are not secured by arm’s length collateral, are not interest-bearing and are
settled in cash.
No guarantees have been given or received for the receivables owed by, or the payables
owed to the related parties. At the end of 2021, the Group did not recognise a provision
for bad debts in connection with the receivables owed by related parties (2020: zero). This
assessment is carried out each financial year based on an analysis of the related party’s
financial position and the market in which it operates.
Remuneration of Board of Directors members
A new remuneration policy came into effect from 16 April 2020.
The remuneration of the members of the Board of Directors comprises a basic salary
component and an annual bonus. The Supervisory Board determines the remuneration
annually, within the framework set by the remuneration policy. The basic salaries are not
subject to any automatic pay rises under a collective agreement. Each year, the Supervisory
Board determines a bonus arrangement for the reporting year. The bonus arrangement is
linked to achievement of predetermined quantitative performance targets. The bonuses
awarded are recognised in the relevant reporting year and are based on the performance
targets achieved in the financial year. The bonuses are paid after the financial statements
have been adopted.
Furthermore, the remuneration policy consists of a ‘performance share plan’ under which
the members of the Board of Directors are conditionally awarded performance shares in the
company each year. The number of performance shares that will vest at the end of a three-
year performance period depends on the extent to which the target set for profit margin
growth for that period is met. Note 16 provides more information about the ‘performance
share plan’ and the number of performance shares that have been allocated.
Up to 2017, a share option plan was in place for the members of the Board of Directors.
The value of the share options is based on the fair value of the share options allocated in
the financial year. More information on the number of options to purchase shares allocated
as a result of Board members' participation in the share option plan and the determination
of the fair value of the options is provided in note 16.
The pensions of the members of the Board of Directors have been placed with the industry-
wide pension fund administered by Bedrijfstakpensioenfonds Metalektro. This pension plan,
which includes an early retirement component, is based on average salary.
The ratio between the remuneration of the members of the Board of Directors and the
average remuneration of the other employees during 2021 was 9:1 (in 2020, this ratio was
8:1). This ratio is based on the average remuneration of €392,000 paid to the members of
the Board of Directors in 2021 (2020: €330,000) as stated in the summary of remuneration
paid to the members of the Board of Directors compared to the average remuneration
of all employees in the operating companies in Western Europe, which is €45,000
(2020: €43,000). This average remuneration is based on the wages and salaries plus
bonuses, options and performance shares of the employees in Western Europe, divided
by the average number of employees in Western Europe.
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The remuneration of the members of the Board of Directors and other key company officers
is as follows (amounts x €1,000):
2021
Basic
salary
Pension
charges
Social
security
costs Bonuses
Long-term
remuneration Other Total
E.M. Stodel 342 40 15 113 11 27 548
P.H.J. de Koning 296 39 13 92 20 24 484
S. Soederhuizen 202 27 11 89 10 18 357
Total remuneration of the Board of Directors 840 106 39 294 41 69 1,389
Former director
H.W.T. van der Vrande 12 12
Other key company officers 2,134 234 196 429 43 223 3,259
2020
Basic
salary
Pension
charges
Social
security
costs Bonuses
Long-term
remuneration Other Total
E.M. Stodel 330 38 14 33 0 41 456
P.H.J. de Koning 286 38 12 29 41 39 445
A.A.H. van Bragt 286 38 12 29 –41 38 362
Total remuneration of the Board of Directors 902 114 38 91 0 118 1,263
Former director
H.W.T. van der Vrande 47 47
Other key company officers 2,322 255 205 457 94 227 3,560
* The other remuneration includes a pension supplement and the comparative figures have been adjusted accordingly.
In the financial year, an amount of €337,000 (2020: €25,000) in severance payments for
former director and other key company officers was included in the personnel costs.
*
*
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Notes to the consolidated financial statements
The balance of the conditionally granted performance shares at the end of the financial year
is as follows:
2021 2020 2019
Number Number Number Range of award
E. M. Stodel 6,015 7,695 0 17/04/2020 20/04/2021
P. H. J. de Koning 5,203 6,690 5,857 12/04/2019 20/04/2021
S. Soederhuizen 5,037 0 0 20/04/2021
Total Board of Directors 16,255 14,385 12,553
Other key company
officers 11,587 0 14,388 12/04/2019 20/04/2021
The performance shares vest three years after they have been awarded, subject to the
condition that the employee is still employed by Neways, or was employed by Neways
at the time of the employee’s retirement.
Remuneration of the Supervisory Board
The members of the Supervisory Board receive fixed remuneration that does not depend
on the results, except for D.W.E. Riefel and F.C.P. van Roij, who are unpaid members.
The members of the Supervisory Board received the following remuneration:
Amounts x €1,000 2021 2020
H.P.N. Scheepers (chairman) 60 40
P.A.M. van Bommel (up to 19 April 2021) 14 30
H. Büthker 42 23
C.N. de Jong 42 23
R.G.M. Penning de Vries (up to 16 April 2020) 0 8
D.W.E. Riefel (from 5 November 2021) 0 0
F.C.P. van Roij (from 5 November 2021) 0 0
Total 158 124
23. LEASES
Leases in which the company is the lessee (IFRS 16)
Rental contracts
The Group has leases for the majority of the buildings it uses. On average, these leases
run for between 5 and 15 years, with an option to renew at the end of that period. Some
leases include provisions for making annual adjustments to the rent based on price indexes.
Other leases
The Group has lease contracts for some of its operating assets. On average, these leases
are for between 3 and 5 years.
Information about leases where the Group is the lessee are shown below.
Right-of-use assets
Right-of-use assets in respect of leased buildings and other operating assets are recognised
as property, plant and equipment.
Amounts x €1,000
Buildings and
land
Plant and
equipment Total
Balance as at 1 January 32,952 1,600 34,552
Depreciation charge for the financial year –4,489 –889 –5,378
Right-of-use asset additions 373 937 1,310
Disposals in right-of-use assets 0 –58 –58
Currency translation differences relating to right-of-
use assets –85 0 –85
Balance as at 31 December 2020 28,751 1,590 30,341
Depreciation charge for the financial year -4,610 -838 -5,448
Right-of-use asset additions 659 990 1,649
Disposals in right-of-use assets 0 -95 -95
Currency translation differences relating to
right-of-use assets 236 0 236
Balance as at 31 December 2021 25,036 1,647 26,683
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Financial lease liabilities
Lease liabilities are payable as follows:
Amounts x €1,000
Present value of minimum
lease payments
2021 2020
Less than 1 year 5,286 5,148
Between 1 and 5 years 17,969 17,666
More than 5 years 4,185 8,098
27,440 30,912
Amounts recognised in the statement of profit or loss
Amounts x €1,000 2021 2020
Interest on lease liabilities 507 597
Short-term lease costs and low-value assets 152 184
Amounts recognised in the cash flow statement
Amounts x €1,000 2021 2020
Total cash flow for lease expenses 5,803 5,849
24. CONTINGENT EVENTS AND OBLIGATIONS
Guarantees
The Group has issued bank guarantees for an amount of €3.1 million (2020: €3.1 million)
in respect of credit provided by foreign banks.
Claims
As part of the normal course of business, the Group is occasionally involved in legal
proceedings. The results are not expected to have a substantial impact on equity and profit.
25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICY
The Group’s main financial liabilities are bank overdrafts and trade payables. The main
purpose of these financial instruments is to provide finance for the Group’s business
activities. The Group has a range of financial assets, the principal financial instruments being
trade receivables and cash and cash equivalents that arise directly from operating activities.
The main risks associated with the Group’s financial instruments are market risks (interest
rate risks on cash flows and currency risks), liquidity risks, and credit risks. The Group’s
management reviews and approves the policy for controlling these risks (see the summary
below).
Market risk
The sensitivity analyses presented in the following sections are based on the assumption
that the amount of net debt, the ratio between fixed and variable rate debt, and the
proportion of derivatives denominated in foreign currencies remain constant.
The following assumptions were used when calculating the sensitivity analyses:
• The sensitivity relating to equity is based on the effect that the assumed changes in
the US dollar exchange rate have on the participation in China.
• The sensitivity relating to the statement of profit or loss consists of the effect of the
assumed changes in the relevant market risks, based on the financial assets and financial
liabilities as at 31 December 2021 and 2020.
Interest rate risk
The Group’s risk exposure due to fluctuations in market interest rates mainly relates to
the Group’s overdraft facilities. The Group’s debts are associated with a variable interest
rate, which is linked to the 1-month Euribor rate. Due the nature of the financing of working
capital, the interest rate included in the credit arrangement is floating. For a summary of
the interest rates, refer to note 13.
Interest rate risk table
The following table shows the sensitivity of the Group’s profit after taxation (based on the
effect of bank overdrafts) to a reasonable and possible change in interest rates, with all other
variables assumed to be constant. This does not materially affect the Group’s equity.
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Notes to the consolidated financial statements
Increase/decrease
in basis points
Effect on profit
before tax
(x €1,000)
2021 +15 –75
–10 50
2020 +15 –86
–10 57
Currency risk
The Group is exposed to currency risks on transactions. These risks relate to purchases or
sales made by the business units in currencies other than the functional currency.
As the majority of the transactions are settled in Euros, the currency risk exposure is limited.
The Group’s policy is to keep the purchase volume in currencies other than the functional
currency at approximately the same level as the sales volume in the same currencies.
This is a continuous process throughout the year, which has the effect of mitigating the risk
of a mismatch between incoming and outgoing foreign currency cash flows to the greatest
possible extent.
Exchange rate sensitivity
The following table shows the sensitivity of the Group’s profit after taxation (based on
changes in the fair value of monetary assets and liabilities) and equity to a reasonably
possible change in the US dollar exchange rate, assuming all other variables remain
constant. The impact on the Group of exchange rate fluctuations in respect of all other
currencies is not material.
Change in
USD exchange
rate
Effect on result
before tax
(x €1,000)
Effect on
equity
(x €1,000)
2021 +10% 1,237 –140
–10% –1,511 172
2020 +10% 793 –107
–10% –970 135
The change in the effect after taxation results from the change in the fair value of the
monetary assets and liabilities denominated in US dollars in view of the fact that the entity's
functional currency is the euro. The change in equity results from changes in the US dollar-
denominated participation in China.
Liquidity risk
The Group monitors its risk of a shortage of funds through frequent reviews of the bank
balances and projected cash flows from the Group’s operating activities. The table below
shows the maturity dates of the Group’s financial liabilities as at 31 December 2021,
based on contractually agreed nominal payments.
As at 31 December 2021
Amounts x €1,000 Due < 3 months
3 to 12
months
1 to 5
years > 5 years Total
Lease liabilities and
overdraft facility 0 1,338 3,948 62,971 4,185 72,442
Trade and other payables 7,049 72,279 8,657 949 0 88,934
Total 7,049 73,616 12,605 63,920 4,185 161,376
As at 31 December 2020
Amounts x €1,000 Due < 3 months
3 to 12
months
1 to 5
years > 5 years Total
Lease liabilities and
overdraft facility 0 1,299 3,849 22,253 8,098 35,499
Trade and other payables 7,059 50,307 7,289 677 0 65,332
Total 7,059 51,606 11,138 22,930 8,098 100,831
The overdraft facilities have a term until the beginning of 2024 and are not payable to the
bank on demand. Changes to these overdrafts are based on working capital requirements
mainly due to increase of inventories.
For a summary of the interest-bearing borrowings, refer to note 13.
Credit risk
The Group's policy is to subject all customers who wish to trade on credit terms to credit
verification procedures. In addition, the outstanding balances are continuously monitored to
ensure that the Group’s exposure to bad-debt risks remains low. The Group also has credit
insurance for a large part of its accounts receivable portfolio.
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The maximum exposure to credit risk is the carrying amount stated in note 9. Fifteen of
the Group’s customers account for approximately 75% of the balance of outstanding trade
receivables. However, because these receivables are largely insured or associated with short
credit terms under supplier finance programmes, management feels that the risk exposure is
not unusually high. Furthermore, no payment problems with these customers have occurred
in the recent past. The Group’s credit risk exposure in relation to the other financial assets,
which consist of cash and cash equivalents, is limited to their carrying amount.
Capital management
The primary objective of the Group’s capital management strategy is to maintain a good
credit rating and healthy solvency to support the Group’s activities and maximise
shareholder value.
The Group manages its capital structure and adjusts it in response to changes in the
economic climate. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to shareholders, repay capital to shareholders, or issue new shares.
In financial years 2021 and 2020, no changes were made to the objectives, policy or
processes.
The Group monitors its capital based on the solvency ratio, i.e. the guaranteed capital
divided by the balance sheet total. The Group’s policy is to maintain a solvency ratio of
at least 35%. As per 31 December 2021 solvency ratio is 37.7%.
Bank covenants
The current providers of bank overdrafts have set requirements for the Group’s capital
management. These covenants are specified in the credit agreements and are periodically
monitored. The current credit agreement was agreed with the lenders in 2016 and renewed
in early 2020 for a term of 1 year until early 2023, increasing the available credit facility to
€65 million. In early 2021, the credit agreement was again extended for a term of one year
until the beginning of 2024. Beginning 2022, the current credit facility is increased to
€80 million. The covenants remain unchanged.
The change of control upon Infestos acquiring the majority of the shares in the second
half year could trigger repayment of the outstanding balance of the facility agreement.
The Group received a waiver from the financial institutions which results in unchanged
covenants and continuation of the facility agreement.
The covenants include a minimum LTM EBITDA (earnings before interest, tax, amortisation
and depreciation over the last 12 months) of €12.5 million (excluding the effect of IFRS
15/16 and corrected for the allocation to the restructuring provisions in the financial year)
and a minimum adjusted guaranteed capital of €55 million as at 31 December 2020 and
subsequent years. The lenders define the adjusted guaranteed capital as the issued and
paid-in capital, plus reserves and loans subordinated to the banks (and possibly other
parties), minus intangible fixed assets, deferred tax assets, associated participations and
receivables from shareholders and/or management and shares held by the company in its
own capital.
The interest payable on the credit facility is the 1-month Euribor + 1.3% to 2.2%, depending
on the senior net debt/EBITDA ratio.
The corrected guaranteed capital as at 31 December 2021 amounted to €96.4 million.
The Group exercises tight control over the working capital to improve solvency. If, and for as
long as the corrected guaranteed capital is lower than the minimum amount of corrected
guaranteed capital specified in the conditions, no profit distributions may be made in any
form whatsoever. The LTM EBITDA, excluding the effect of IFRS 15/16, amounted to
€21.5 million as at 31 December. After adjustment for the addition to the restructuring
provisions recognised in the financial year, the LTM EBITDA is €21.3 million.
Failure to meet the minimum required amount of adjusted guaranteed capital and/or the
LTM EBITDA results in the outstanding loans becoming immediately due and payable.
As at 31 December 2021, the Group complies with all the credit agreement covenants set
by the financial institutions.
26. EVENTS AFTER THE BALANCE SHEET DATE
Beginning 2022, the current credit facility is increased to €80 million. The covenants
remain unchanged.
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Notes to the consolidated financial statements
Assets x €1,000 as at 31 December Note 2021 2020
Fixed assets
Intangible fixed assets
2 734 734
Financial fixed assets
Participations in group companies
3 35,817 29,941
Loans to group companies
3 40,834 40,947
75,651 70,888
Current assets
Receivables
Receivables from group companies
4 4,394 5,674
Taxes and social security premiums 930 0
Other receivables 216 390
5,540 6,064
Cash and cash equivalents
6 51,187 31,902
Total assets 134,112 109,588
Liabilities x €1,000 as at 31 December Note 2021 2020
Equity
5
Issued and paid-in capital 6,135 6,087
Share premium 46,376 45,913
Currency translation reserve 775 778
Other legal reserves 2,283 2,764
Other reserves 47,455 50,376
Result for financial year 8,729 –3,915
111,753 102,003
Non-current liabilities
Deferred tax liabilities 561 731
Current liabilities
Overdraft facility
7 20,675 3,972
Payables to group companies
8 0 0
Corporate income tax 901 2,737
Other payables 222 145
21,798 6,854
Total equity and liabilities 134,112 109,588
Separate statement of financial position (before appropriation of result)
Notes 1 to 15 are an integral part of these company financial statements.
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Company statement of financial position
For the portrait view of
the company balance sheet, click here.
Separate statement of profit or loss
Amounts x €1,000 Note 2021 2020
Personnel costs
9 –265 –148
Other expenses –53 –204
Operating result –318 –352
Finance income 1,318 1,077
Finance costs –286 –393
Net finance charges 1,032 684
Result from participations
10 8,190 –4,115
Result before tax 8,904 –3,783
Tax income/(expense)
11 –175 –132
Net result 8,729 –3,915
Notes 1 to 15 are an integral part of these company financial statements.
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Company statement of profit or loss
1. GENERAL
These separate financial statements and the consolidated financial statements together
form the statutory financial statements of Neways Electronics International N.V. (hereinafter:
‘the Company‘). The financial information relating to the Company is included in the
consolidated financial statements of the Company. The company financial statements
of Neways Electronics International N.V. have been prepared based on Title 9, Book 2
of the Dutch Civil Code (Burgerlijk Wetboek/BW).
The Company also avails itself of the option provided for in Book 2, Section 362(8) of
the Dutch Civil Code when determining the accounting principles for measuring the assets
and liabilities and profit or loss in its company financial statements. This means that the
accounting principles for measuring the assets and liabilities and profit or loss (hereinafter
referred to as the ‘accounting principles’) in the Company’s company financial statements
are the same as those applied to the consolidated EU-IFRS financial statements.
These consolidated EU-IFRS financial statements have been prepared in accordance with
the standards approved by the International Accounting Standards Board and adopted by
the European Union (hereinafter ‘EU-IFRS’). Refer to note 2 of the consolidated financial
statements for a description of these accounting principles. All amounts in the company
financial statements are presented in euros, unless stated otherwise.
Participations in group companies
Group companies are all entities in which the company directly or indirectly exerts dominant
control. The company has dominant control over an entity when it is exposed to, or has
rights to, variable revenue from its involvement in group companies and has the ability to
influence such revenue through its control of the group company. Group companies are
included in the consolidation scope from the date on which the Company obtains control
and are removed from the consolidation scope from the date on which the Company ceases
to control the group company.
The participations in which significant influence is exercised on the business and financial
policy are valued using the equity method based on the net asset value. The accounting
principles of the business are used to determine the net asset value. Results on transactions
involving transfers of assets and liabilities between the business and its participations and
between participations themselves are eliminated to the extent that these can be deemed
not to have been realised.
Participations interests with a negative net asset value are valued at zero. However, where
the business guarantees all or part of the debts of a participation, or has a constructive
obligation (relative to its share) to enable the participation to pay its debts, a provision is
formed for the amount of the business' projected payments on behalf of the participation.
The provision is charged primarily to the long-term receivables from the participation, which
must be identified as an expansion of the net addition. The remainder is recognised under
provisions.
The other assets and liabilities are measured in accordance with the accounting principles
set out in the notes to the consolidated financial statements. The same applies to the method
used to determine the profit or loss. As a result, Neways Electronics International N.V.’s equity
and net profit/loss are the same as that stated in the consolidated financial statements.
Result from participations
The share in the profit or loss of businesses in which there is a participating interest is
the Company's share in the profit or loss of these participations. Results on transactions
involving transfers of assets and liabilities between the Company and its participations and
between participations themselves are eliminated to the extent that these can be deemed
not to have been realised.
The Company uses the option to eliminate expected credit losses on the carrying amount
of loans and receivables owed to the Company by participations, instead of eliminating
them at the level of the carrying amount of the participations based on the equity method/
net asset value.
Notes to the separate financial statements
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Notes to the company financial statements
Other legal reserve
A legal reserve has been formed for capitalised development costs. This reserve is equal
to their carrying amount at €2.3 million (2020: €2.8 million).
Taxation
The Company is the head of the fiscal unity. Corporate income tax is included for the part
that the business would be liable to pay as an independent taxpayer, taking into account
the allocation of the benefits of the fiscal unity. Netting within the fiscal unity between
the Company and its subsidiaries takes place via the current account relationships.
2. INTANGIBLE FIXED ASSETS
This concerns the goodwill associated with the acquisition of the shares in
Neways Slovakia a.s.
3. FINANCIAL FIXED ASSETS
Participations in group companies
The changes in participations in group companies were as follows:
Amounts x €1,000 2021 2020
Balance as at 1 January 29,941 46,310
Changes
Result from participations after tax 8,190 –4,115
Other comprehensive income from participations after taxation 260 –196
Dividends received from participations –2,750 –12,000
Exchange differences 176 –58
5,876 –16,369
Balance as at 31 December 35,817 29,941
The list of equity interests of the Company has been included in note 22 to the consolidated
financial statements.
Loans to group companies
The development of the loans to group companies item was as follows:
Amounts x €1,000 2021 2020
Balance as at 1 January 40,947 41,447
Changes
Additions 65 72
Repayments 0 –705
Exchange differences –178 133
–113 –500
Balance as at 31 December 40,834 40,947
Amounts x €1,000 Interest rate
Outstanding
amount 2021
Outstanding
amount 2020
Loan to Neways Deutschland GmbH 2% 36,467 36,467
Loan to Neways Wuxi Electronics Co. Ltd. 1.75% 4,367 4,480
Total 40,834 40,947
Both loans are long-term and non-redeemable.
4. RECEIVABLES FROM GROUP COMPANIES
The receivables from group companies relate to receivables from participations in which the
Group can exercise significant influence. These amounts do not include receivables with a
remaining term in excess of 1 year.
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Notes to the company financial statements
5. EQUITY
For details of the consolidated statement of changes in equity, refer to the notes to the
consolidated statement of changes in equity. The other legal reserves relate to a reserve
for capitalised development costs at a participation.
The development of the other equity items (presented as retained earnings in the
consolidated financial statements) is as follows:
Amounts x €1,000 Other reserves
Profit
for financial
year
Other
legal
reserves
Balance as at 1 January 2020 41,237 8,518 3,245
Profit appropriation 8,518 –8,518
Loss for financial year –3,915
Other comprehensive income –196
Amortisation of development costs 481 –481
Issue of shares 336
Balance as at 31 December 2020 50,376 –3,915 2,764
Profit appropriation –3,915 3,915
Profit for financial year 8,729
Other comprehensive income 260
Amortisation of development costs 481 –481
Issue of shares 253
Balance as at 31 December 2021 47,455 8,729 2,283
Proposed result appropriation in 2021
The Board of Directors, with the approval of the Supervisory Board, proposes to the General
Meeting that the after-tax result for 2021 be appropriated as follows: the full amount will be
paid out as dividend. For more information, refer to note 12 to the consolidated financial
statements.
The business can only pay dividend to the shareholders and other entitled parties from
profits eligible for distribution to the extent that its equity exceeds the amount of the paid-
up and called-up part of the capital plus the reserves that have to be maintained by law or
under the articles of association.
6. CASH AND CASH EQUIVALENTS
The recognised cash and cash equivalents are freely available. The credit facility available
as at 31 December 2021 (overdraft and bank guarantee facility) amounted to a total of
€65 million (interest charge: Euribor + 1.3% to 2.2%, depending on the net debt/EBITDA
ratio). Of this amount, €48.1 million was used for the bank overdraft and bank guarantees on
the balance sheet date (31 December 2020: €7.7 million). As security for the repayment of
the debts to the financial institutions, a pledge has been established on business inventory,
machinery, assets under construction, inventories, receivables and on the rights under
the credit insurance policy of the Dutch and German group companies.
The total value of the pledge as at 31 December 2021 was approximately €94 million.
On behalf of the Company, all Dutch and German group companies have issued a joint and
several liability statement in respect of the financial institutions. Furthermore, the financial
institutions require the guaranteed capital (adjusted for the deferred tax assets and
intangible fixed assets) as at 31 December 2021 to be at least €55 million and an EBITDA,
corrected for the allocation to the restructuring provisions in the financial year, of
€12.5 million or more. Beginning 2022, the current credit facility is increased to €80 million.
The covenants remain unchanged. More information about the bank covenants with
financial institutions is provided in note 25 to the consolidated financial statements.
7. OVERDRAFT FACILITY
This concerns the use of the available credit facility. For more information, refer to note 6.
8. PAYABLES TO GROUP COMPANIES
The payables to group companies (2020: zero) do not include amounts with a remaining
term in excess of 1 year.
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Notes to the company financial statements
9. PERSONNEL COSTS
The company does not have any employees. The personnel costs reflect the remuneration
of the Supervisory Board and the costs of the share-based payment arrangements.
For further details, refer to notes 16 and 22 to the consolidated financial statements.
For costs of share-based payment arrangements, an amount of €0.1 million (2020: €0.1
million) has been recognised as an expense in the statement of profit or loss.
10. RESULT FROM PARTICIPATIONS
The share in the profit or loss of businesses in which there is a participating interest is the
Company's share in the profit or loss of these participations.
11. TAXATION
Taxation during the financial year amounted to 24.5% (2020: 39.8%). The rate of taxation
applicable in the Netherlands is 25%. Differences are caused by non-deductible costs for
tax purposes. For more information, refer to note 7.
12. REMUNERATION OF THE BOARD OF DIRECTORS AND OF THE
SUPERVISORY BOARD
With the exception of the share-based payment arrangements, the remuneration
of the members of the Board of Directors is recognised in Neways B.V.
Refer to note 22 to the consolidated financial statements for the remuneration
of the members of the Board of Directors and the Supervisory Board.
13. AUDITOR’S FEES
The following fees of KPMG Accountants N.V. have been charged to the business.
Amounts x €1,000
KPMG
Accountants N.V.
2021
Audit of the financial statements 360
Other audit engagements 83
Tax consultancy services 0
Other assurance services 65
Other non-audit services 0
Total 508
Amounts x €1,000
KPMG
Accountants N.V.
2020
Audit of the financial statements 360
Other audit engagements 0
Tax consultancy services 0
Other assurance services 0
Other non-audit services 0
Total 360
The fees stated in the table for auditing the 2021 financial statements (2020) relate to the
total fees for auditing the 2021 financial statements (2020), regardless of whether the work
had already been performed during the 2021 financial year (2020).
Other audit engagements include the review report in relation to the six months ended
30 June 2021. Other assurance services related to the report on the Neways summary
financial statements included in the Infestos Offering Memorandum and the audit reports
required by BW2 of the Dutch Civil Code in relation to the pre-wired merger proposals.
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Notes to the company financial statements
14. FINANCIAL INSTRUMENTS
Interest rate risk
The Company’s risk exposure due to fluctuations in market interest rates mainly relates to
the Company’s bank overdrafts and variable-rate non-current liabilities. The Company’s
debts are associated with a variable interest rate, which is linked to the 1-month Euribor
rate.
For other risks, refer to the consolidated financial statements, note 25.
15. OFF-BALANCE SHEET COMMITMENTS
The Company, together with the Dutch Group Companies, is part of a fiscal unity for
corporate income tax and VAT. The company is jointly and severally liable for debts arising
pursuant to these taxes.
Pursuant to Section 403 of Book 2 of the Dutch Civil Code, the Company has assumed
liability for the debts arising from legal acts of the Dutch group companies. The Company
has also assumed liability for debts arising from legal acts of the German participation,
Neways Deutschland GmbH.
The Company has issued bank guarantees for an amount of €1.5 million (2020: €1.5 million)
in respect of credit provided by foreign banks.
Son, 24 February 2022
Supervisory Board Board of Directors
Henk Scheepers Eric Stodel
Hans Büthker Paul de Koning
Karin de Jong Steven Soederhuizen
Erwin Riefel
Frank van Roij
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Notes to the company financial statements
Independent auditor’s opinion
To: the General Meeting of Shareholders and the Supervisory Board of Neways Electronics
International N.V.
Report on the audit of the financial statements 2021 included in
the annual report
Our opinion
In our opinion:
• the accompanying consolidated financial statements give a true and fair view of the
financial position of Neways Electronics International N.V. (herein referred to as "the
Company" or "Neways") as at 31 December 2021 and of its result and its cash flows for
the year then ended, in accordance with International Financial Reporting Standards as
adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil
Code.
• the accompanying separate financial statements give a true and fair view of the financial
position of Neways Electronics International N.V. as at 31 December 2021 and of its
result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil
Code.
What we have audited
We have audited the financial statements 2021 of Neways based in Son. The financial
statements include the consolidated financial statements and the separate financial
statements.
The consolidated financial statements comprise:
1 the consolidated statement of financial position as at 31 December 2021;
2 the following consolidated statements for the year 2021: the statements of profit or loss
and comprehensive income, changes in equity and cash flow statement; and
3 the notes comprising a summary of the significant accounting policies and other
explanatory information.
The separate financial statements comprise:
1 the separate statement of financial position as at 31 December 2021;
2 the separate statement of profit or loss for the year 2021; and
3 the notes comprising a summary of the accounting policies and other explanatory
information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards
on Auditing. Our responsibilities under those standards are further described in the
‘Our responsibilities for the audit of the financial statements’ section of our report.
We are independent of Neways in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the
‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
Our audit procedures were determined in the context of our audit of the financial statements
as a whole. Our observations in respect of going concern, fraud and non-compliance with
laws and regulations, climate change and the key audit matters should be viewed in that
context and not as separate opinions or conclusions.
We believe the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
OTHER INFORMATION
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Audit approach
Summary
Materiality
- Materiality of EUR 2.0 million
- 0.4% of revenue
Group audit
- Audit coverage of 90% of total assets
- Audit coverage of 92% of revenue
Going concern, Fraud/Noclar and Climate change
- Going concern: no significant going concern risks identified
- Fraud & Non-compliance with laws and regulations (Noclar): We identified significant
risks of fraud with respect to management override of controls and cut-off of revenues.
- Climate change: the response of the Board of Directors to possible future effects of
climate change have been disclosed at high level. We have considered the impact of
climate-related risks on our identification and assessment of risks of material
misstatement in the financial statements.
Key audit matters
- Cut-off of revenues
- Estimates with respect to the provision for obsolete inventory
Opinion
Unqualified
Materiality
Based on our professional judgement we determined the materiality for the financial
statements as a whole at EUR 2.0 million (2020: EUR 1.8 million). The materiality is
determined with reference to revenue of EUR 469.5 million in 2021. The materiality of
EUR 2.0 million represents 0.4% of revenue. We consider revenue as the most appropriate
benchmark because of the volatility in profit before tax in the past years. Materiality changed
compared to last year due to the increased profitability. We have also taken into account
misstatements and/or possible misstatements that in our opinion are material for the users
of the financial statements for qualitative reasons.
We agreed with the Supervisory Board that unadjusted misstatements identified during our
audit in excess of EUR 80 thousand would be reported to them, as well as smaller
misstatements that in our view must be reported on qualitative grounds.
Scope of the group audit
Neways is at the head of a group of components. The financial information of this group is
included in the financial statements of Neways.
Our group audit mainly focused on significant components that are (i) of individual financial
significance to the group, or (ii) that, due to their specific nature or circumstances, are likely
to include significant risks of material misstatement of the group financial statements.
We have performed an audit of the full reporting package ourselves at Neways Advanced
Applications B.V., Neways Industrial Systems B.V., Neways B.V. and Neways Electronics
International N.V. We have performed an audit of the specific items inventories, trade
receivables, revenue, cost of raw materials and consumables and personnel costs at Neways
Cable & Wire Solutions B.V. and Neways Leeuwarden B.V. We made use of the work of local
KPMG auditors in Germany for the audit of the complete reporting packages of Neways
Electronics Riesa GmbH and Neways Neunkirchen GmbH.
We sent instructions to KPMG Germany and received reporting back from them. We have
taken notice of their findings and with respect to both Neways Electronics Riesa GmbH and
Neways Neunkirchen GmbH we have discussed these together with KPMG Germany with
local management.
For the residual population not in scope we performed analytical procedures in order to
corroborate that our scoping remained appropriate throughout the audit.
By performing the procedures mentioned above at group components, together with
additional procedures at group level, we have been able to obtain sufficient and appropriate
audit evidence about the group’s financial information to provide an opinion about the
financial statements.
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The audit coverage as stated in the section summary can be further specified as follows:
Audit response to going concern – no significant going concern risks identified
The Board of Directors has performed its going concern assessment and has not identified
any significant going concern risks. To assess the Board of Directors’ assessment, we have
performed, inter alia, the following procedures:
• we considered whether the Board of Directors’ assessment of the going concern risks
includes all relevant information of which we are aware as a result of our audit;
• we inspected the financing agreement in terms of conditions that could lead to
significant going concern risks, including the term of the agreement and any covenants;
• we analyzed the operating results forecast and the related cash flows compared to the
previous financial year, developments in the business sector and any information of
which we are aware as a result of our audit;
• we analyzed the company’s financial position as at year-end and compared it to the
previous financial year in terms of indicators that could identify significant going concern
risks.
The outcome of our risk assessment procedures did not give reason to perform additional
audit procedures on the Board of Directors’ going concern assessment.
Audit response to the risk of fraud and non-compliance with laws and regulations
In the chapter “Risks and risk management” of the Annual Report, the Board of Directors
describes its procedures in respect of the risks of fraud and non-compliance with legislation.
As part of our audit, we have gained insights into the Company and its business
environment, and assessed the design and implementation of the Company’s risk
management in relation to fraud and non-compliance. Our procedures included, among
other things, assessing the Company’s code of conduct, whistleblowing procedure, and
inspection of the incidents register. Furthermore, we performed relevant inquiries with the
Board of Directors, Supervisory Board, and other relevant functions, such as Internal Audit,
Legal Counsel and the Compliance Officer. As part of our audit procedures, we:
• assessed other positions held by Board of Directors members and/or other employees
and paid special attention to procedures and governance/compliance in view of possible
conflicts of interest;
• evaluated correspondence with supervisory authorities and regulators as well as legal
confirmation letters.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to Neways and identified the areas that are most likely to
have a material effect on the financial statements, including legislation with an indirect effect
such as competition legislation, employment legislation, contract law, GDPR and health and
safety legislation.
We, together with our forensic specialists, evaluated the fraud and non-compliance risk
factors, such as pressure to meet targets and bank covenants, related party transactions and
the disrupted supply chain, to consider whether those factors indicate a risk of material
misstatement in the financial statements.
Based on the above and on the auditing standards, we identified the following fraud risks
that are relevant to our audit, including the relevant presumed risks laid down in the auditing
standards, and responded as follows:
Revenue recognition, in relation to cut-off of revenues
• Our procedures to address fraud risk related to cut-off of revenues are included in
the key audit matter.
70%
Audit of the
complete reporting
package
78 %
Audit of the
complete reporting
package
20 %
Audit of specific
items
Total assets
Revenue
1 4%
Audit of specific
items
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Management override of controls
Risk:
• Board of Directors is in a unique position to manipulate accounting records and prepare
fraudulent financial statements by overriding controls that otherwise appear to be
operating effectively.
Responses:
• We evaluated the design and the implementation of internal controls that mitigate fraud
risks, such as the controls related to journal entries.
• We performed data analysis of high-risk journal entries. Where we identified instances of
unexpected journal entries through our data analytics, we performed additional audit
procedures to address each identified risk. These procedures also included testing of
transactions back to source information.
• We verified the accuracy of post-closing entries recorded in the general ledger.
• We evaluated key estimates and judgments for bias by the company’s management
including retrospective reviews of prior year’s estimates with respect to inventory and
deferred tax assets. We assessed the appropriateness of changes compared with the
prior year to the methods and underlying assumptions used to prepare accounting
estimates.
• We evaluated the appropriateness of the accounting for significant transactions such as
the impact of the acquisition by Infestos that are outside the company’s normal course of
business, or are otherwise unusual.
• incorporated elements of unpredictability in our audit, such as adding an additional
component for inventory testing and performing inquiries with non financial employees
regarding the disrupted supply chain and impact on sales and purchase contract terms.
Our procedures to address identified risks of fraud and related to non-compliance with laws
and regulations did not result in any other key audit matter.
We communicated our risk assessment, audit responses and results to the Board of
Directors and the Supervisory Board.
Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-
compliance that are considered material for our audit.
Audit response to climate-related risks
The Board of Directors is responsible for preparing the financial statements in accordance
with the applicable financial reporting framework, including considering whether the
implications from climate-related risks and commitments have been appropriately accounted
for and disclosed.
The Board of Directors has performed its analysis of the impact of climate-related risks on
the Company’s business and operations going forward and on its accounting in the current
financial statements. In the climate change paragraph of the “Risks and risk management”
chapter of the annual report, the Board of Directors concluded that the effect of climate-
related risks does not have a material impact on accounts and disclosures in the financial
statements as at 31 December 2021.
The evaluation of the effectiveness of Board of Directors’ strategy against internal or external
goals set is not in scope of our audit of the financial statements. As part of our audit we
consider potential effects of climate-related risks on the accounts and disclosures as at
31 December 2021 in the current year’s financial statements to determine whether the
financial statements are free from material misstatements. This includes discussion of the
Company’s strategy in relation to climate change with the Board of Directors, and inspecting
minutes and external communications for significant climate related commitments,
strategies and plans made by the Board of Directors.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements. We have communicated the key audit
matters to the Supervisory Board. The key audit matters are not a comprehensive reflection
of all matters discussed. The key audit matters did not change compared to prior year.
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Cut-off of revenues
Description
The cut-off of revenues as disclosed in paragraph “Revenue recognition” in the basis of
preparation of the financial statements for products made to order is not supported by the
systems of the company. Since the correct cut-off is determined manually there is an
increased risk of material misstatements to the financial statements due to error. This is
also a presumed fraud risk in the Auditing Standards and therefore significant to our audit.
Our response
We have performed substantive audit procedures to verify the correct application of
EU-IFRS. We evaluated the reasonableness of management’s key judgements and
estimates made in applying EU-IFRS, including selection of assumptions and data
sources. We assessed the appropriateness of management’s revenue recognition under
EU-IFRS for a sample of contracts. The accuracy and relevance of data was verified
through involvement of our IT-specialists and through a sample.
Our observation
Based on our procedures performed the cut-off of revenues at year-end is in accordance
with EU-IFRS.
Estimate with respect to the provision for obsolete inventory
Description
Significant inventories of raw materials exist at specific group components. This results in
an increased risk of obsolete inventories. Uncertainties are inherent to the assessment of
the provision for obsolete inventories. Since this assessment requires judgement and
considering the significance of the inventories for the financial statements and increased
inventory levels caused by the effect of the unbalanced supply chain as a result of the
material shortage in the year 2021, this was significant to our audit.
Our response
We have performed substantive audit procedures. We have performed a retrospective
analysis to evaluate the historical accuracy of management’s estimates, from which no
significant differences appeared. We have reperformed the calculation of the provision for
obsolete inventories prepared by management. We assessed the reliability of information
used by management, which includes data such as historical usage and future use
through involvement of our IT-specialists. We evaluated the reasonableness of
management’s key judgements and estimates made in respect of the provision for
obsolete inventories. In our assessment we have also taken into consideration our
observations from meetings with management, observation during inventory counts and
expectations of management for 2022.
Our observation
We assess the assumptions applied by management with respect to the provision for
obsolete inventories to fall within a reasonable range.
Non audit service rendered during our audit engagement
Except for the below we have not provided prohibited non-audit services as referred to in
Article 5(1) of the EU Regulation 537/2014 on specific requirements regarding statutory
audits of public-interest entities.
At 5 November 2021, the date that BV Infestos Sarl obtained control over Neways, a KPMG
network firm performed tax advisory services for Infestos entities in the chain of control of
Neways. The KPMG network firm engagement team was not involved in the audit of the
financial statements of Neways. The tax advisory engagements did not have any impact on
the Neways financial statements. Consequently, KPMG would not have to audit its own work
and would not have a mutual or conflicting interest with Neways.
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111 | 2021 ANNUAL REPORT Other information
After a thorough analysis of independence implications including article 14 of the ViO, the
Supervisory Board of Neways requested in writing to finalize these ongoing engagements
within three months after the acquisition date at the latest. Both KPMG and the audit
committee assessed that KPMG’s independence would not be compromised and the
Supervisory Board requested to continue the audit engagement of Neways. The respective
tax advisory engagements have been terminated. After completion of the tax advisory
engagements we have re-assessed the potential impact on our independence together with
the Audit Committee of the Supervisory Board and concluded that our independence indeed
has not been compromised and has not affected our opinion as an independent auditor.
Report on the other information included in the annual report
In addition to the financial statements and our auditor’s report thereon, the annual report
contains other information. Additionally, other information includes the remuneration report
that will be published as a separate document.
Based on the following procedures performed, we conclude that the other information:
• is consistent with the financial statements and does not contain material misstatements;
and
• contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the
management report and other information.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the financial statements or otherwise, we have considered whether the
other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of
the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is
less than the scope of those performed in our audit of the financial statements.
The Board of Directors is responsible for the preparation of the other information, including
the information as required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the General Meeting of Shareholders as auditors of Neways on 16
April 2015, as of the for the year 2015 and have operated as statutory auditor ever since that
financial year.
European Single Electronic Format (ESEF)
Neways has prepared its annual report in ESEF. The requirements for this format are set out
in the Commission Delegated Regulation (EU) 2019/815 with regard to regulatory technical
standards on the specification of a single electronic reporting format (these requirements are
hereinafter referred to as: the RTS on ESEF).
In our opinion, the annual report prepared in the XHTML format, including the partially
tagged consolidated financial statements as included in the reporting package by Neways,
has been prepared in all material respects in accordance with the RTS on ESEF.
The Board of Directors is responsible for preparing the annual report including the financial
statements in accordance with the RTS on ESEF, whereby the Board of Directors combines
the various components into a single reporting package. Our responsibility is to obtain
reasonable assurance for our opinion whether the annual report in this reporting package, is
in accordance with the RTS on ESEF.
Our procedures taking into consideration Alert 43 of NBA (the Netherlands Institute of
Chartered Accountants), included amongst others:
• obtaining an understanding of the entity's financial reporting process, including the
preparation of the reporting package;
• obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL instance document and the XBRL
extension taxonomy files have been prepared in accordance with the technical
specifications as included in the RTS on ESEF;
• examining the information related to the consolidated financial statements in the
reporting package to determine whether all required taggings have been applied and
whether these are in accordance with the RTS on ESEF.
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Description of responsibilities regarding the financial statements
Responsibilities of the Board of Directors and the Supervisory Board for the financial
statements
The Board of Directors is responsible for the preparation and fair presentation of the financial
statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, the Board of Directors is responsible for such internal control as the Board of
Directors determines is necessary to enable the preparation of the financial statements that
are free from material misstatement, whether due to fraud or error. In that respect the Board
of Directors, under supervision of the Supervisory Board, is responsible for the prevention
and detection of fraud and non-compliance with laws and regulations, including determining
measures to resolve the consequences of it and to prevent recurrence.
As part of the preparation of the financial statements, the Board of Directors is responsible
for assessing the Company’s ability to continue as a going concern. Based on the financial
reporting frameworks mentioned, the Management Board should prepare the financial
statements using the going concern basis of accounting unless the Board of Directors either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to
do so. The Board of Directors should disclose events and circumstances that may cast
significant doubt on the company’s ability to continue as a going concern in the financial
statements.
The Supervisory Board is responsible for overseeing the Company’s financial reporting
process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to
obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which
means we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements. The materiality affects the nature,
timing and extent of our audit procedures and the evaluation of the effect of identified
misstatements on our opinion.
A further description of our responsibilities for the audit of the financial statements is located
at the website of de ‘Koninklijke Nederlandse Beroepsorganisatie van Accountants’ (NBA,
Royal Netherlands Institute of Chartered Accountants) at eng_oob_01.pdf (nba.nl). This
description forms part of our auditor’s report.
Amstelveen, 24 February 2022
KPMG Accountants N.V.
L.A. Ekkels RA
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Trade register
The two-tier company is listed in the Commercial Register of the Chamber of Commerce for
East Brabant (Kamer van Koophandel Oost Brabant) under number 17036989.
Provisions in the Articles of Association governing the appropriation of profit
Article 31 of the company's articles of association states that the company may only pay out
distributable profit insofar as its equity exceeds the paid-up and called-up part of the capital
plus the legal reserves. After gaining the prior approval of the Supervisory Board, the Board
of Directors may add the profit to the reserves, in whole or in part. The profit not added to
the reserves is placed at the disposal of the General Meeting of Shareholders.
Based on a proposal put forward by the Board of Directors and approved by the Supervisory
Board, the General Meeting of Shareholders may resolve to distribute profit from a reserve
available for profit distribution. The General Meeting of Shareholders may, pursuant to a
proposal put forward by the Board of Directors and approved by the Supervisory Board,
resolve to distribute profit in the form of shares in the company, without prejudice to the
provisions of the company's articles of association regarding the issue of shares.
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Key figures and five-year summary 2017 – 2021
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506.8
438.7
2020201920182017
533.4
478.6
469.5
0
90
180
270
360
450
540
2021
Revenue in millions of euros
38.2 37.7
2021
0
9
18
27
36
45
54
41.5
43.6
41.6
2020201920182017
Solvency Equity as % of the balance sheet total
201920182017 2021
15.1
12.6
2020
Bedrijfsresultaat in miljoenen euro’s*
0
4
8
12
16
20
24
21.0
–2.5
14.3
Operating profit in millions of euros
2,705
2,750
2,542
2021
2,940
2,943
500
0
1.000
1.500
2.000
2.500
3.000
2020201920182017
Average number of employees
Amounts in millions of euros, unless otherwise
stated
2021 2020 2019
*
2018 2017
Revenue 469.5 478.6 533.4 506.8 438.7
Gross margin 183.9 173.8 196.6 195.2 171.3
Operating result exclusive of
exceptional income and costs 14.7 7.9 16.0 22.0 15.3
Operating result 12.6 –2.5 15.1 21.0 14.3
Net profit exclusive of exceptional
income and costs 10.2 3.5 9.1 15.1 10.0
Net profit 8.7 –3.9 8.5 14.4 9.9
Net cash flow
**
–33.4 37.6 16.4 –4.5 –3.4
Equity 111.8 102.0 106.1 101.6 84.4
Guaranteed capital
***
111.8 102.0 106.1 102.7 89.3
Balance sheet total 296.3 234.2 277.7 245.0 204.4
Capitalised goodwill 2.8 2.8 2.8 2.8 2.8
Interest coverage ratio
****
8.5 3.8 5.4 11.2 10.2
Net Debt/EBITDA ratio
****
2.5 1.5 2.2 1.4 1.6
Solvency ratio
Equity as a % of the balance sheet
total 37.7 43.6 38.2 41.5 41.6
Guaranteed capital as a %
of the balance sheet total 37.7 43.6 38.2 41.9 44.0
Profitability ratios
****
Return on equity 9.1 2.9 8.6 14.9 11.8
Operating result as a % of revenue 3.1 1.5 3.0 4.3 3.5
Net profit as a % of revenue 2.2 0.6 1.7 3.0 2.3
Operating result as a % of invested
capital 11.1 6.1 11.5 21.0 16.5
Amounts in millions of euros, unless otherwise
stated
2021 2020 2019
*
2018 2017
Figures per employee
Average number of employees (FTEs) 2,542 2,705 2,940 2,943 2,750
Revenue per employee (x 1,000) 185 177 181 172 160
Gross margin per employee (x 1,000) 72.3 64.3 66.9 66.3 62.3
Figures per ordinary share, in euros
(based on the number of shares at
year-end)
Net profit 0.71 –0.32 0.70 1.20 0.86
Net profit
****
0.83 0.29 0.75 1.26 0.87
Equity 9.11 8.38 8.73 8.50 7.35
Net cash flow –2.72 3.08 1.35 –0.38 –0.30
Dividend 1.06 0.00 0.28 0.48 0.35
Dividend as a % of net profit 149.3 0.0 40.0 40.0 40.0
Number of shares at year-end x 1,000 12,270 12,174 12,150 11,958 11,481
Highest price 14.95 10.20 14.00 18.60 14.21
Lowest price 8.00 4.75 9.30 9.88 9.20
Price as at 31 December 14.15 8.00 9.96 10.10 13.65
* The Group initially adopted IFRS 16 with effect from 1 January 2019, using the modified retrospective approach, which means that
the cumulative effect of the initial adoption of IFRS 16 has been recognised as an adjustment to the opening balance sheet, with no
restatement of comparative information.
** Net cash flow means cash flow from operating activities, plus cash flow from investing activities.
*** Including subordinated borrowings.
**** Key indicators are based on the figures excluding exceptional income and costs.
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Address details
The Netherlands Neways Advanced Applications B.V. Slovakia United States
Robert Loijen
Neways Leeuwarden B.V. Science Park Eindhoven 5004 Neways Slovakia PCBA division Neways Electronics US, INC.
Michel Postma 5692 EA Son Peter Cibulka 1880 Milmont Drive
Simon Vestdijkwei 2 Tel. +31 40 267 3500 PO Hviezdoslava 791/23 Milpitas, CA 95035–2512
8914 AX Leeuwarden 01851 Nová Dubnica Tel. +1 408 618 4789
Tel. +31 58 215 4700 Germany Tel. +421 42 4660 111
Neways Industrial Systems B.V. Neways Technologies GmbH Neways Slovakia Cable & Cabinet Assembly
division
NEWAYS ELECTRONICS INTERNATIONAL N.V.
Bob Konings Hans Ketelaars Science Park Eindhoven 5010
Science Park Eindhoven 5010 Fichtenweg 8 Eva Rybarova 5692 EA Son, The Netherlands
5692 EA Son 99098 Erfurt Trancianska 864/68 PO Box 69, 5690 AB Son
Tel. +31 40 267 3000 Tel. +49 36203 960 01851 Nová Dubnica Tel. +31 40 267 9200
Tel. +421 42 4441 911 www.newayselectronics.com
Neways Technologies B.V. Neways Electronics Riesa GmbH Email info@newayselectronics.com
Hans Ketelaars Erik Ziegler Czech Republic
Science Park Eindhoven 5709 Bayern-und-Sachsen-Strasse 1 Neways Electronics International N.V. is listed
on the Euronext Amsterdam stock exchange5692 EP Son 01589 Riesa Neways Electronics Decín s.r.o.
Tel. +31 40 267 9333 Tel. +49 3525 60060 Geert Scheepers
Benešovská 1455/4
Neways Cable & Wire Solutions B.V. Neways Neunkirchen GmbH 405 02 Decín II - Nové Mesto
Gerard Jacobs Michael Berger Tel. +49 3525 60060
Voltaweg 10 Am Gneisenauflöz 6
6101 XK Echt 66538 Neunkirchen China
Tel. +31 47 541 8200 Tel. +49 682 198 080
Neways Wuxi Electronics Co., Ltd
Neways Micro Electronics B.V. James Xu
Bob Konings North Block of Xijin Road (No.59)
Voltaweg 12 West of State Road 312
6101 XK Echt Shuofang Town 214029
Tel. +31 47 541 9500 New District, Wuxi
Jiangsu Province, PRC
Tel. +86 510 85212371
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