avantium-2022-12-31-en

Contents


	Page
About This Report ....................................................................................................................................

Avantium at a Glance ................................................................................................	4
Company Highlights 2022 .....................................................................................................................	5
Key Financials 2022 ................................................................................................................................	6
Key Events 2022 ......................................................................................................................................	7
Message from the CEO ...........................................................................................................................	8
Who We Are .............................................................................................................................................	11
Our Business Units ..................................................................................................................................	13
Our Technologies .....................................................................................................................................	14

Management Report .................................................................................................	18
How We Create Value ............................................................................................................................	19
Value Creation Model ..............................................................................................................................	20
The World Around Us .............................................................................................................................	22
Stakeholders and Materiality ................................................................................................................	24
Our Strategy ..............................................................................................................................................	26
Value We Created in 2022 ....................................................................................................................	31
Financial Performance in 2022 (including Going Concern) ............................................................	58
Investor Relations and Share Performance .......................................................................................	62
Risk and Opportunity Management .....................................................................................................	65


	Page
Governance ................................................................................................................	78
Management Team .................................................................................................................................	79
Supervisory Board ...................................................................................................................................	82
Report of the Supervisory Board ..........................................................................................................	84
Remuneration Report 2022 ...................................................................................................................	90
Corporate Governance ...........................................................................................................................	113

Financial Statements 2022 ......................................................................................	118

Other information .....................................................................................................	167
Articles of Association Governing Appropriation of Profit ..............................................................	167
Independent Auditor’s Report ...............................................................................................................	168

Sustainability Statements ........................................................................................	176
Sustainability Strategy ...........................................................................................................................	177
Sustainability Governance .....................................................................................................................	177
Boundaries ................................................................................................................................................	177
Scope ..........................................................................................................................................................	177
References .................................................................................................................................................	181

Supplementary Information ....................................................................................	184
GRI Content Index ....................................................................................................................................	185
Glossary .....................................................................................................................................................	189


	2

About This Report

Scope of the Annual Report

This Annual Report covers Avantium N.V., including all our

consolidated entities as stated in ‘Note 2.2.1 subsidiaries’.

Our financial and non-financial results are presented in one

report and relate to all consolidated entities for the period of 1

January until 31 December 2022, unless stated otherwise.

Reporting Guidelines

Integrated reporting and transparency have become

increasingly important over the past few years. As such,

Avantium prepared this Annual Report in line with the IIRC

Integrated Reporting (IR) framework.

For the non-financial information included in this report, we

followed the Global Reporting Initiative (GRI) Standards (GRI 1:

Foundation 2021). A GRI content index shows where in the

Annual Report information can be found.

The consolidated financial statements of Avantium N.V. have

been prepared in accordance with International Financial

Reporting Standards (IFRS) as adopted by the European Union.

The consolidated financial statements have been prepared

under the historical cost convention unless otherwise stated.

Reporting Structure

This Annual Report outlines how Avantium creates value for our

stakeholders in the long term. Our value creation model is

presented at the beginning of the report, showing how our

vision, mission and actions create a positive impact for our direct

value chain and beyond. We present the cohesion of the

different elements of our strategy, material topics, sustainability

targets, KPIs and related risks and of the UN’s Sustainable

Development Goals.

Assurance

Currently, the financial data and related information included in

the financial statements are covered by external assurance.

Although we further enhanced our non-financial reporting to

increase alignment with our strategic focus, we opted not to

seek external assurance for non-financial information at this

time.

Audience

This report is intended to inform stakeholder groups that have

an impact on or are impacted by our business. This includes

partners, investors and shareholders, employees and society as

a whole. It aims to give our stakeholders a balanced overview of

our activities and Avantium’s ability to create sustainable long-

term value. Additional disclosures are available on our website

www.avantium.com

Safe Harbor Statement

This Annual Report may include forward-looking statements.

Other than reported financial results and historical information,

all statements featured in this Annual Report, including, without

limitation, those regarding our financial position, business

strategy and management plans and objectives for future

operations, are forward-looking statements. These forward-

looking statements are based on our current expectations and

projections about future events and are subject to risks and

uncertainties that could cause actual results to differ materially

from those expressed in the forward-looking statements. Many

of these risks and uncertainties relate to factors that are beyond

Avantium’s ability to control or estimate precisely, such as future

market conditions, the behaviour of other market participants

and the actions of governmental regulators. Readers are

cautioned not to place undue reliance on these forward-looking

statements, which speak only as of the date of this Annual

Report and are subject to change without notice. Other than as

required by applicable law or the applicable rules of any

exchange on which our securities may be traded, we have no

intention or obligation to update forward-looking statements.


	3

Key Financials 2022


(€1,000)	2022	2021	% change
Revenues	17,826	10,917	63%
Other income from government grants	7,626	6,686	14%
Net operating expenses	(43,138)	(33,687)	28%
EBITDA	(17,687)	(16,084)	10%

Depreciation, amortisation and impairment charge	(8,578)	(7,837)	9%
Finance costs - net	(2,448)	(495)	394%

Loss for the financial year	(31,554)	(24,416)	29%
Cash flow from operating activities	30,150	11,806	155%
Cash flow from investing activities	(23,399)	(3,932)	495%
Cash flow from financing activities	54,762	24,830	121%
Net cash flow	29,959	8,288	261%
Cash position	64,870	34,911	86%

Segment revenues
R&D Solutions	11,301	10,029	13%
Renewable Chemistries	100	500	-80%
Renewable Polymers	6,056	388	1461%
Support	369	—	100%
Total segment revenue	17,826	10,917	63%

Other income from government grants
R&D Solutions	279	279	—%
Renewable Chemistries	3,536	3,610	-2%
Renewable Polymers	3,660	2,683	36%
Support	150	114	32%
Total segment other income	7,626	6,686	14%


	6

Key Events 2022

January

Avantium shareholders give the green light for the construction of the FDCA Flagship Plant.

March

Avantium announces its 2021 financial results.

A Retail Investor Day takes place at Avantium’s YXY® Technology Pilot Plant in Geleen.

Avantium reaches Financial Close for its FDCA Flagship Plant.

April

Avantium raises €45 million via a public offering of shares.

Sukano signs an offtake agreement to develop masterbatches for PEF.

The First Piling Ceremony takes place for the FDCA Flagship Plant in Delfzijl.

The EPBP endorses PET/PEF recycling for three years.

May

The EU awards Avantium’s Volta Technology a €3 million grant.

June

Avantium launches its PEF Textile Community.

Carlsberg signs an offtake agreement for PEF; Carlsberg launches consumer testing of its PEF-

containing Fibre Bottle.

August

Avantium announces its half-year financial results.

AmBev signs an offtake agreement for PEF for use in soft drink bottles.

LVMH signs an offtake agreement for PEF for use in its cosmetics packaging.

October

Avantium Catalysis becomes Avantium R&D Solutions, expanding its focus to R&D for sustainable

chemistry.

A life-cycle assessment shows Avantium’s plantMPG™ has a significantly lower carbon footprint in

comparison with its incumbents.

December

Monosuisse signs an offtake agreement for PEF for making industrial fibres.

January 2023

Boudewijn van Schaïk takes over from Bart Welten as Chief Financial Officer.

Henkel signs an offtake agreement for FDCA for adhesives to be used in electronics applications.

February 2023

Yap Chie Cheung becomes Managing Director of Avantium Renewable Chemistries.

Avantium enters into its first industrial technology license agreement and an offtake agreement with

Origin Materials to accelerate the mass production of FDCA and PEF.


	7

Dear Stakeholder,

If 2021 was a decisive year for Avantium, 2022 was a year of

transformation. I am delighted to be able to report that our

transition from a research and development (R&D) company into

a commercial organisation is well underway. In what was

certainly a highlight for our company – and, I know, for many of

our stakeholders – our FDCA Flagship Plant began to materialise

in 2022. We have now quite literally laid the foundations upon

which we will turn our ambitions into reality.

Building a Better Future

Avantium is building something unique: the world’s first

commercial plant for furandicarboxylic acid (FDCA), the key

building block for our plant-based, fully recyclable plastic:

polyethylene furanoate (PEF). We are therefore moving closer to

bringing both a new monomer and a new polymer to the market.


	8

This is not something that happens every day, especially when

these products have the potential to revolutionise sustainability. I

am certain that all my colleagues and all Avantium’s partners are

as proud as I am of our progress. Exciting as it was, however, to

watch our FDCA Flagship Plant start to take shape in 2022 (see

page 28), the facility itself – due to become operational in 2024 –

is not Avantium’s end goal; rather, it is a stepping stone towards

executing our technology licensing strategy. In turn, this will

expand the reach and impact of PEF and enable us to realise our

ambitious business goals. I am therefore pleased to report a

strong start to 2023, thanks to February's landmark

announcement of our partnership with the US-based Origin

Materials. Avantium will provide an industrial technology license

for our YXY® Technology to Origin, with this agreement giving

Origin access to relevant parts of Avantium’s process technology

to enable the conversion of CMF (chloromethylfurfural) derivatives

made from sustainable wood residues into FDCA at a facility with

an annual capacity of 100 kilotonnes. We expect our partnership

with Origin to accelerate the mass production of FDCA and PEF –

supporting the global transition to large-scale sustainable

materials made from non-fossil sources.

As well as our first license deal, Avantium Renewable Polymers

signed eight new FDCA and PEF offtake agreements with major

brand names for a range of applications in 2022 and early 2023

(see page 29). These agreements are the best possible validation

of the market potential of PEF, the next-generation sustainable

and circular plastic – and I believe we are only just scratching the

surface of what PEF can achieve. Our focus for 2023 is therefore

to attract more brand owners and pursue additional offtake

agreements and licensing deals.

Progress in Our Pipeline

Turning to our other business units, I am pleased to report a

positive year across the board. In Avantium Renewable

Chemistries, we put Ray Technology™ back on track after a

difficult 2021 and began preparing to scale-up our plants-to-

glycols technology (see page 30). We also received the results of

life-cycle assessments (LCAs) on Avantium’s plant-based mono-

ethylene glycol (plantMEG™) and plant-based mono-propylene

glycol (plantMPG™), demonstrating their significant sustainability

benefits versus fossil incumbents. At our Dawn Technology™

pilot biorefinery, we continued our work on new feedstocks such

as waste textiles (see page 32). Meanwhile, Volta Technology,

our carbon capture and utilisation (CCU) platform, went from

strength to strength: in 2022, we successfully operated two

demonstration units in real-world conditions and used a third to

explore opportunities for producing carbon-negative plastic from

CO2 (see page 32).

Elsewhere, Avantium Catalysis not only saw its revenues return

to growth, but also underwent a transformation of its own: now

called Avantium R&D Solutions, this business unit adopted a new

growth strategy in 2022, focusing on sustainable chemistry

solutions for customers (see page 33). We are confident that this

new direction, which has been positively received by our

stakeholders, marks a logical and exciting step forward for the

business.

Overcoming Obstacles

We achieved all this in spite of challenging global circumstances

in 2022. The outbreak of war in Ukraine caused not just a

humanitarian crisis but also a wave of turmoil that rocked

European markets and supply chains, and inevitably had a

significant impact on Avantium. High inflation created a difficult

backdrop to the start of our FDCA Flagship Plant construction

project; nevertheless, I believe we handled the situation in 2022

well, with construction progressing well, even if material costs

have been higher than anticipated.

Very significantly, however, we successfully raised €45 million in

the midst of the economic turbulence in April – an exceptional

achievement given the state of the financial markets. This capital,

which will help us develop the next-generation technologies in

our portfolio, proves that investors see Avantium as an attractive

investment opportunity in a chemistry landscape which we are

helping to make greener than ever.

Sustainable by Nature

We are proud to be part of this ever-greener landscape. Even five

years ago, we at Avantium often had to convince potential

partners and other actors that we must de-fossilise the chemical

industry and pivot from fossil feedstocks to circular materials.

Today, the need for change is clear to everyone.

The question now is how fast we can achieve the transition. Much

of the answer depends on the willingness of the chemical

industry to respond to calls from brands and consumers for more

sustainable feedstocks and circular products. At Avantium, these

solutions are in our DNA. Our vision of a fossil-free world sits at

the heart of all we do, and our technologies and products are

designed to revolutionise the chemical industry and reshape a

broad range of high-value markets – from packaging to fibres

and beyond.

Changing Ourselves; Changing Our World

As we turn our plans into action, pivoting away from pure R&D

and becoming a commercial business, the company itself is also

changing. In Avantium Renewable Polymers, for example, we

recruited more colleagues with engineering and manufacturing

backgrounds in 2022, in preparation for commissioning our FDCA

Flagship Plant. It is encouraging to see that, despite the

competitive labour market in our sector, Avantium continues to

attract the highest calibre of talent. For me, this proves the appeal

of our vision, the strength of our purpose and the power of our

reputation as an innovative company where people can make an

impact, contributing to progress towards a fossil-free world.

What has not changed is Avantium’s culture. We strive to provide

an inclusive and welcoming place to work for people from a

diverse array of backgrounds – counting 25 nationalities among

our employees in 2022 – where we celebrate our differences,

promote collaboration and support colleagues to feel safe and

empowered. It was a pleasure to be able to spend more time with

each other in person in 2022 after so many months of separation

due to the COVID-19 pandemic.

We did, however, have to say farewell to our Chief Financial

Officer, Bart Welten, who retired from his role on our

Management Board at the end of the year. I would like to thank

him for his outstanding work during a critical time for our

company and wish him all the best. I am also delighted to

welcome his replacement, Boudewijn van Schaïk, as we write the


	9

next chapter of Avantium’s story. In addition, there were some

personnel changes to our Supervisory Board in 2022, with

Cynthia Arnold and Trudy Schoolenberg stepping down. I wish to

thank them both for their very valuable contributions. In early

2023, we nominated Dirk Van Meirvenne and Peter Williams to

replace them, and with the appointment of two new members,

the Supervisory Board will be back to full strength, ready to help

us navigate the journey ahead.

Leading the Way Together

That journey may not be easy, but it will certainly be worthwhile. I

am confident that with the support of our stakeholders, we can

realise our ambitious goals. I want to thank our talented and

dedicated employees for a year of outstanding achievements in

difficult circumstances, and am also grateful to our FDCA offtake

partners and investors for their belief, patience and support as we

drive our exciting business forward.

By working together to commercialise our technology solutions,

we can help tackle climate change, reduce plastic waste and

accelerate the transition to a circular, bio-based economy. We

believe that our efforts will not only create long-term, sustainable

value for all our stakeholders, but also, ultimately, help realise the

vision of a fossil-free world.

Tom van Aken

Chief Executive Officer


	10

Who we are

We believe in a fossil-free world. Let's go!

Our vision speaks for itself. At Avantium,

sustainability is not an afterthought; it is in our

nature. With our products and technologies,

we can help de-fossilise the chemical industry,

drive the transition to a circular economy and

build a more sustainable world.


	12

Our Technologies

YXY® Technology

Our lead technology converts industrial sugars into

furandicarboxylic acid (FDCA), a key ingredient for making the

polymer known as polyethylene furanoate (PEF).

A Next-Generation Polymer

PEF is 100% plant based, and outperforms traditional

packaging materials such as conventional plastic, glass and

aluminium. It has superior barrier properties (meaning longer

food and drink shelf lives), higher mechanical strength (enabling

thinner packaging), higher heat resistance and a lower

processing temperature (needing less energy).

PEF is fully recyclable. Furthermore, a 2021 life-cycle

assessment (LCA) for single-layer PEF and multilayer PET/PEF

bottles showed a significant reduction in greenhouse gas (GHG)

emissions of around 35% over the life cycle of the bottles

compared to bottles made from polyethylene terephthalate

(PET) (for details, see our corporate website).

Realising the Potential of PEF

PEF has huge potential in the packaging, film and textile sectors,

which are growing markets already worth over US$200 billion

per year. Construction is underway on our FDCA Flagship Plant

in Delfzijl, the Netherlands. Meanwhile, we are working to

optimise YXY® Technology, grow our operational capabilities

and prepare for the commercial launch of PEF, planned for

2024.

Our Product: FDCA

FDCA is the key building block for the high-performance plant-

based plastic PEF. For a long time, an economically viable way

to manufacture FDCA remained out of reach, leading to it being

labelled ‘the sleeping giant of the chemicals industry’ – but that

has all changed with the development of Avantium’s YXY®

Technology. As a monomer, FDCA can realise exciting

opportunities to create a wide range of useful and sustainable

polymers. The most important of these is PEF – a 100% plant-

based and recyclable polyester made with FDCA and plant-

based mono-ethylene glycol (MEG). In the future, we will explore

other FDCA-based polyesters, co-polyesters, polyamides,

polyurethanes and coating resins.

Waking the Sleeping Giant

We believe we can now fully unlock the potential of this product

to shape the value chain of PEF. Having built the first-ever Pilot

Plant for FDCA back in 2011, we are now constructing the

world's first full-scale plant, where we will use plant sugars to

produce 5 kilotonnes of FDCA per year. We expect to start

operations at our FDCA Flagship Plant in 2024.

The business model of the FDCA Flagship Plant is based on

sales of FDCA and PEF to offtake partners. In addition, we

intend to sell technology licenses to industrial partners who are

expected to build production capacities of (over) 100 kilotonnes

per annum based on the knowledge and experience derived

from our operation of the FDCA Flagship Plant. In early 2023,

we entered into an industrial technology license agreement with

the US-based Origin Materials, under which we grant Origin a

non-exclusive license to use certain parts of Avantium’s

proprietary YXY® Technology process (including certain patent

rights) to enable the conversion of CMF (chloromethylfurfural)

derivatives made from sustainable wood residues into FDCA at

a 100-kilotonne-per-annum-scale facility.


	14

Ray Technology™

Our proprietary Ray Technology™ also has an important role to

play in PEF production. PEF’s other essential building block,

alongside FDCA, is mono-ethylene glycol (MEG), traditionally

made from fossil sources. With Ray Technology™, however,

we can turn industrial sugars into plant-based MEG in a single

step process. As a core component of PEF and PET, this

plantMEG™ can accelerate the transition to the fully green and

circular production of plastic materials and textiles.

Our Product: plantMEG™

With Ray Technology™, Avantium has found a way to produce

MEG from plant-based feedstocks, rather than fossil sources.

We call this plant-derived compound plantMEG™, and we see it

as a key stepping stone towards a greener materials industry.

MEG is a fundamental chemical building block for textiles like

clothing and household upholstery, plastic packaging and de-

icing products and coolants. With such a wide range of end

applications – and a market with a compound annual growth

rate of 4.8% between 2005 and 2022 – it is vital that we make

the production of this commodity more sustainable.

A More Sustainable Way Forward

Demand for MEG is projected to grow to 50 million tonnes by

2040. With more than 99% of this MEG currently made from

fossil sources, it is more important than ever to reshape the

market with our disruptive Ray Technology™.

LCA results from 2021 show that, using beet sugar, Ray

Technology™ can produce plantMEG™ with up to 83% lower

CO2 emissions than traditional fossil-based methods.

Ray Technology™ also produces plantMPG™ (plant-based

mono-propylene glycol), a versatile chemical intermediate. The

LCA study from 2022 showed a similar lifetime emissions

reduction of up to 81% for plantMPG™ versus its incumbents

(for details, see our corporate website). Crucially, with

Avantium's far more sustainable alternatives, there is no

compromise on quality or performance.

Planting the Seed for plantMEG™

Following the successful commissioning of our Ray

Technology™ demonstration plant in 2020, we want to go

further. By 2025, we plan to take a Final Investment Decision on

the scale-up to an industrial-scale facility and rolling out the

technology licensing business model. To this end, we have

joined forces with Cosun Beet Company, planning to jointly

construct and operate the first commercial plant for producing

plant-based glycols using Ray Technology™.

A Green Game-Changer

Ray Technology’s single-step catalytic process means that

plantMEG™ is competitive with fossil-based alternatives.

Moreover, plantMEG™ is also identical to the petroleum-based

incumbent in performance and quality. In view of such clear

benefits, and not forgetting its significantly lower carbon

emissions, we believe plantMEG™ is the game-changer we need

to shape a greener future.


	15

Dawn Technology™

Dawn Technology™ is Avantium’s biorefinery technology and

the second of the three Renewable Chemistries technologies.

A radically improved and modernised upgrade on a 100-year-

old method, Dawn Technology™ converts non-food plant-based

feedstocks – like forestry and agricultural residues – into

industrial sugars (as used in our YXY® Technology and Ray

Technology™) and lignin (an energy-dense co-product).

A Bio-Based Technology

As the only viable alternative to fossil-based feedstocks,

biomass is an essential solution to a fossil-free industry and a

bio-based economy. The resulting industrial sugars can replace

petroleum as a carbon source, which in turn makes them

excellent raw materials for sustainable chemical and industrial

processes.

The global demand for alternative feedstock streams and

conversion technologies is on the rise. As we continue to

develop, optimise and scale up this technology, we are blazing a

trail towards a collective greener future for our industry.

Valorising Our Products

Since opening our pilot biorefinery in 2018, we have worked to

optimise the technology, test new feedstocks and ensure Dawn

Technology™ is economically scalable.

Our Products: Industrial Sugars and Lignin

If the chemical industry is to successfully make the switch to

plant-based feedstocks, new sources of carbon will be required

to meet global product demands. Industrial sugars, such as

those produced by Dawn Technology™, are an ideal solution, as

they can be used in place of petroleum-based feedstocks as the

starting material for any product.

A Climate-Friendly Co-Product

In our biorefining process, lignin is the mass remaining after the

sugars have been removed from the raw material. With an

energy content up to 40% higher than the original wood chips,

lignin is an extremely efficient material for energy generation.

We are also exploring other high-value applications for this

underused polymer, including water purification and bio-

asphalt. Asphalt is traditionally made using bitumen, derived

from crude oil, so replacing this bitumen with lignin would

deliver crucial CO2 savings for the road construction industry.

Dawn Drive, the first-ever test road made from bio-asphalt

using Avantium lignin, continued to perform well in real-world

conditions in 2022 (see page 32).


	16

Volta Technology

Our fourth proprietary technology, and another member of the

Renewable Chemistries family, Volta Technology takes a

different approach in our quest for a circular economy.

Where our other technologies use plant sources as their raw

materials, Volta Technology uses electrochemistry to harness

the power of air-based CO2.

By using carbon from the air, our technology converts a waste

greenhouse gas into a raw material for a broad range of

intermediate and final chemical products, such as formic acid,

oxalic acid and glycolic acid. The latter two are key building

blocks for polyesters and other materials, allowing for the

production of CO2-negative plastics.

A Cleaner, Greener Approach

Avantium’s cutting-edge electrocatalytic platform unlocks CO2

as a new carbon source for the chemical industry, enables

cleaner processes through its use of electrons as reagents and

allows industrial parties to reduce their CO2 emissions. By not

only capturing CO2 that would otherwise contribute to global

warming but also using it to make products that would

traditionally be made from fossil carbon, Volta Technology

means we can set our sights on a circular future sooner.

Going Mobile

As one of the world’s most advanced carbon capture and

utilisation (CCU) technologies, Volta Technology shows

enormous promise. In the short term, we remain focused on

proving the value of Volta Technology through our three mobile

demonstration units, two of which were successfully deployed

at industrial sites in Europe in 2022.

Our Products: CO2-Based Chemicals and Polyesters

Through the electrochemical conversion of CO2, Avantium can

produce formic acid and oxalic acid, as well as derivatives

including glycolic acid. These high-value chemicals have a wide

range of applications. The polylactic glycolic acid (PLGA) co-

polymers we are developing with the support of Avantium's

Corporate Technology team, for example, show enhanced

barrier properties against both oxygen and moisture compared

to most other polymers.

Avantium is also developing a new family of proprietary oxalic

acid-based polyesters (PISOX) with an unprecedented

combination of properties: engineering plastics with outstanding

mechanical and thermal properties that are also fully marine

degradable, even at low temperatures in the dark. There are

currently no materials on the market offering this combination of

valuable properties. What is more, when renewable energy and

non-fossil CO2 is used as the feedstock, these PISOX materials

are unique in having a negative carbon footprint. They are

therefore able to offset residual emissions and accelerate our

quest for net-zero emissions.


	17

How We Create Value

Avantium creates value by focusing on

developing and commercialising

technologies to accelerate the transition

from fossil-based to renewable and

circular plastics. We manage risk and

strive to transform our capital resources

to create value for the environment,

society and our investors.

Our capital lies in the talent and expertise of our employees,

our intellectual assets portfolio and innovative processes, our

feedstocks and sources, our laboratories and plants, our

partnerships with industry leaders and our cash position, grants

and investments. Our value creation model shows how our

vision, mission and actions create a positive impact on our direct

value chain and beyond.


	19

The World Around Us

Despite COVID-19 loosening its grip on

many parts of the world in 2022, any

optimism was countered by the outbreak

of war in Ukraine and its broader

impacts in Europe and beyond. But even

during a year of humanitarian and

economic crisis, efforts to address the

ever-worsening climate emergency could

not be abandoned.

Environment on the Agenda

No matter what other challenges we face as a society, the

environmental breakdown remains our biggest threat. From

storms in southern Africa and Japan, to floods in Pakistan and

Australia, to heatwaves and wildfires across Europe and the

USA, extreme weather events continued to devastate huge

swathes of our planet in 2022. Today, it is undeniable that the

frequency and severity of such occurrences are caused by

decades of unchecked, unsustainable human behaviour. As

these events worsen, so do their secondary impacts: there is

evidence that diseases such as cholera are already spreading

more freely among affected communities, reversing years of

progress. Meanwhile, human actions – including resource

overconsumption, pollution and the perpetuation of the linear

economy – are also destroying environments and threatening

biodiversity.

Some promising shoots of progress emerged during the year: at

the COP27 climate summit, private sector leaders pledged to

work towards limiting global heating to 1.5°C, while an

agreement reached at the COP15 biodiversity summit will see

governments taking steps to prevent further biodiversity loss.

Elsewhere, member states of the United Nations Environmental

Assembly (UNEA) agreed to begin negotiations on a global

plastics treaty that will consider the entire plastic life cycle,

promoting sustainable production and recycling. At Avantium,

we welcome this commitment and support the development of a

collaborative approach to tackling the global plastic problem.

Answering the Call for Sustainable Plastic

After all, the problem is not plastic itself – a material with

valuable properties in all kinds of applications – but the way we

make, use and dispose of it. Bio-based feedstocks, for example,

are used to make only 1% of the enormous quantities our

society produces. Around 400 million tonnes of plastic waste are

created every year. And the plastic life cycle also contributes

significantly to global greenhouse gas emissions (1.8 billion

tonnes in 2019, with that number expected to more than double

by 2060).

With plastic production expected to keep rising, we need

change. Recycling alone is not enough: we need upstream

innovation to loosen the grip of single-use plastics on our

society. Decoupling the industry from fossil feedstocks and

ensuring the circularity of plastic products are two essential

steps for protecting our planet and its people – and the sooner

the better.

However, 2022 was another year in which progress in the

plastics industry was slower than in others. More bans on

single-use plastics and further regulations on recycled plastic

content are important, but a true transition requires the current

level of political engagement to go further and faster.

Introducing new solutions is just one part of the answer: for a

real sustainability transformation, we must also create a

roadmap for phasing out the materials we need to replace (in

the same way that, for example, the energy industry is phasing

out coal). Otherwise, innovative and sustainable solutions will

forever compete against cheap and well-established fossil

alternatives.


	22

The first step, however, is to make those innovative, sustainable

solutions available – and that is where Avantium comes in,

making our technologies based on plant- and air-carbon

sources viable on an industrial scale. Our solutions can support

global brand owners to fulfil their net-zero pledges by 2050.

Given that an estimated 44% of plastic is used in packaging

applications, it is clear that plant-based and recyclable plastic

like Avantium’s high-quality PEF has an extremely valuable part

to play in de-fossilising the chemical industry. Fortunately, public

awareness of the plastic problem is growing – and the louder

the demand from consumers for more sustainable plastics, the

more pressure is placed on retailers, and in turn on plastic

producers, to reject fossil incumbents in favour of bio-based

alternatives. With our disruptive technologies and game-

changing products, we are answering the call.

Conflict and Costs

Against this backdrop, society confronted other challenges in

2022. Like the rest of the world, Avantium was appalled by the

outbreak of conflict in Ukraine in February and remains horrified

by the ongoing violence in the region. With many hundreds of

thousands of lives estimated to have been lost, and millions

more uprooted, the human toll continues to mount up into 2023.

During 2022, the impact of the war was also felt by many more

people across Europe and further afield, with already-high

energy prices spiking and inflation rates soaring. At Avantium,

these pressures were relevant not only for our colleagues as

they navigated rising costs in their everyday lives, but also for

our business as we began realising our scale-up plans.

The impact was especially clear in relation to the construction of

our FDCA Flagship Plant, much of the purchasing for which took

place in early 2022, just as war took hold in Ukraine. As a

company operating within a global value chain, we are

unavoidably affected by developments in our ecosystem and in

the global markets. While, however, the challenging economic

environment and related supply chain disruption led to

increased costs and some delays during the year, we worked to

mitigate these issues as best we could through prudent

planning, internal efficiency projects and open dialogues with

suppliers and other partners – showing the value of

collaboration when it comes to tackling major challenges. What

is more, in April, at the height of the market turmoil caused by

the crisis, Avantium successfully raised €45 million in new

capital, demonstrating our investors’ trust in our strategy and

belief in our mission.

Of course, challenging times often act as a catalyst for change.

The energy crisis in particular stands as yet further proof of the

need to work together to reduce our reliance on finite fossil

feedstocks and deliver viable commercial alternatives.

Consequently, as awareness grows, Avantium’s two-fold

mission to attract talent in a fast-changing global labour market

and to convince industry partners of the importance of our

sustainability objectives becomes easier. While the landscape of

2022 may have been difficult to navigate, we therefore head

into 2023 better placed than ever to execute our strategy, bring

our sustainable solutions to the market and help chart a course

to the fossil-free chemical industry our world needs.


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Stakeholders and Materiality

It is essential that we maintain an

ongoing dialogue with our stakeholders

concerning the strategy, developments

and activities of Avantium. We define our

stakeholders as those individuals, groups

or organisations that can affect or be

affected by our business. We create value

for our stakeholders by working towards

our mission to transition the chemical

industry to renewable feedstocks and to

secure a sustainable future for all. We

also work with our ecosystem of strategic,

commercial and financial partners, expert

suppliers and service providers and

academia to drive better results.

Our Stakeholder Groups

We recognise six stakeholder groups: employees; partners and

customers; shareholders; suppliers and contractors; governments

and authorities; and society. The varied interests and variable

expectations of these stakeholder groups determine Avantium’s

strategy, and each group is affected by Avantium’s business

activities and performance in a different way.

Employees

Our employees and their talents and motivation are our biggest

competitive advantage. We provide a safe and vibrant workplace

where everyone can thrive and contribute to our goals. We aim to

be a magnet for the best people from a diverse array of

backgrounds. Safety is always our number-one priority: we strive

for an incident- and accident-free environment.

Partners and Customers

An integral part of Avantium’s strategy and commercialisation

roadmap is our collaboration with partners throughout the entire

value chain. We bring our technologies to the market in

collaboration with like-minded companies who complement our

skills and knowledge and increase our chances of success.

We bring forward innovative solutions that benefit our customers

and help them achieve their sustainability goals. We conduct

dialogues with our partners and customers in order to explore

common ground for building partnerships and create ecosystems

for our innovations around the world. With a global customer

base that includes industry leaders, we are well placed to provide

tailored services and deliver meaningful results.

Shareholders

Our shareholders rely on Avantium to successfully execute its

strategy and create maximum value. By monetising our

innovative technologies and bringing our game-changing

products to market, we are able to deliver this value to our

shareholders, for example through partnerships and licensing.

We also develop and capitalise on our extensive intellectual

assets portfolio. Our Avantium R&D Solutions business unit

generates revenue and profits by providing extensive service

projects and highly advanced catalyst testing systems.

Suppliers and Contractors

Our suppliers and contractors are integral as partners in the

efficient and seamless scale-up of our technologies and in

delivering on our customer commitments. We are committed to a

responsible and sustainable supply chain.

Governments and Authorities

Governments and regulation authorities develop and implement

legislation and associated regulations that can significantly affect

Avantium. Moreover, European, national and local governments

and authorities provide subsidies and grant permits. We therefore

engage regularly with these bodies.

Society

Avantium also considers a range of other stakeholders when

conducting business. We align our business strategy and

sustainability goals with the needs of broader society, looking

beyond our direct value chain. We also engage with students at

schools and universities, sharing our expertise and exciting the

next generation about sustainable and renewable chemistry (for

full details, see the Our People section). We have an active

dialogue with local communities, industry associations, media

and non-governmental organisations (NGOs).


	24

Materiality

Avantium’s 2022 materiality assessment identified and prioritised

the sustainability topics and issues that are most material to our

business and stakeholders, in line with the GRI Standards, the

Sustainability Accounting Standards Board (SASB) and the UN

Sustainable Development Goals (SDGs).

Avantium’s leadership, colleagues and key internal and external

partners (including business partners, NGOs and investors) rated

these topics according to (i) the level of risk and opportunity they

present to Avantium's business and (ii) the extent to which they

influence our impact on society and the environment. This

informed the finalisation and prioritisation of the key topics.

See the Sustainability Statements section (page 176) for more

details on our materiality assessment.


	25

Our Strategy

Avantium’s overarching strategy is founded on the four pillars of

our mission: creating disruptive technologies, bringing them to

the world with partners, accelerating the transition to renewable

and circular products and providing a safe and vibrant place to

make an impact.

Our goal is to be a world leader in renewable and sustainable

chemistry technology solutions and to commercialise them

through partnerships and licensing. To achieve this, Avantium’s

strategy centres on our extensive portfolio of renewable

technologies with a focus on sustainable polyesters.

An integral part of Avantium’s strategy and commercialisation

roadmap is close collaboration with strong partners throughout

the entire value chain. We work with companies who share our

values and want to build a better world for future generations.

This helps us develop innovative solutions that deliver

sustainability benefits to customers and beyond.


	26

Our Business Model

We have multiple strategic routes for monetising our innovative

proprietary technologies. These include (i) licensing them to third

parties, (ii) applying them in our production plants, partnerships

or joint ventures and (iii) divesting them to third parties.

Licensing is especially important: as well as being the most

capital-efficient way to commercialise our technologies, we

believe it is the fastest way to bring our sustainable solutions to

market.

Our management processes allow us to manage risk and

increase shareholder value. We know we must manage, plan

and allocate our resources in the way that best serves all

Avantium’s stakeholders while enabling us to fulfil our

objectives.

Business Unit Strategies

Avantium Renewable Polymers

Avantium Renewable Polymers is responsible for developing

and commercialising YXY® Technology, which catalytically

converts plant-based sugars into furandicarboxylic acid (FDCA),

the main building block of polyethylene furanoate (PEF): a 100%

plant-based, fully recyclable plastic material with significant

performance benefits and a significantly lower carbon footprint

than fossil-based plastics.

The Avantium Renewable Polymers strategy can be broken

down into four parts: (i) to continue developing the market for

PEF by working with partners to generate global demand, (ii) to

prove the technology at commercial scale at our FDCA Flagship

Plant, which is on track to become operational in 2024, (iii) to

ensure global availability of PEF via technology licenses and (iv)

to maintain our technology leadership regarding our YXY®

Technology through ongoing research and key partner

collaborations.

Avantium Renewable Chemistries

In Avantium Renewable Chemistries, we aim to develop and

commercialise Ray Technology™, Dawn Technology™ and

Volta Technology.

For Ray Technology™, Avantium has formed a partnership with

Cosun Beet Company, with the aim of accelerating the

commercial potential of plantMEG™ and plantMPG™ and take

further steps towards the scale-up to a commercial facility. We

intend to form a joint venture that will acquire a Ray

Technology™ license from Avantium. As part of its licensing

business model, Avantium will continue to develop and license

its Ray Technology™ globally.

Avantium runs a pilot biorefinery based on Dawn Technology™

in Delfzijl, the Netherlands, producing industrial sugars and

lignin from forestry and agricultural residues. We see industrial

sugars made from second-generation, non-food biomass as

imperative to a successful future bio-economy.

As well as creating technologies that use plant-based carbon

sources, Avantium aspires to develop materials using carbon

dioxide (CO2) as a feedstock. Our Volta Technology, a carbon

capture and utilisation technology, is an electrocatalytic

platform that converts CO2 into chemical building blocks and

high-value products. For Volta Technology, the focus is on

finding industrial partners that are interested in scaling up our

demonstration units for further on-site testing before we

commercialise the technology.

Avantium R&D Solutions

Avantium R&D Solutions (formerly Avantium Catalysis) is our

revenue-generating business. In 2022, we adopted a new

strategic direction in response to the growing industry demand

for R&D solutions in sustainable chemistry.

Accordingly, we have extended our offering to target four

emerging markets in sustainable chemistry – green hydrogen,

chemical plastic recycling, adsorption and sustainable chemical

building blocks – providing R&D units and services in these four

fields to existing customers while also planning to grow our

business with new customers. Meanwhile, we continue to

provide our proprietary advanced catalysis R&D systems and

services to customers worldwide. The extended offering means

this business unit is now more fully aligned with Avantium's

overarching sustainability purpose: to help transition the

chemical industry to sustainable and circular solutions.


	27

Our Innovation Funnel

Our development activities use a stringent stage-gate process

to manage the innovation funnel from ideation to business

launch, as outlined below. Our strategic aim is to advance our

technologies to the point of selling products and licensing our

technologies to industrial parties who are expected to build

industrial-scale production capacities.


	28

Innovation Funnel

Avantium’s innovation funnel is used to assess and decide on

the ideas to pursue as well as to enable the appropriate

allocations of resources towards projects at the various phases

of development. It consists of six stages.

Stage 1: Ideation

In the ideation stage, our chemists and engineers share new

developments in a safe and stimulating environment. We use 19

criteria to assess the likelihood of technical and commercial

success and we evaluate the strategic fit of the idea for

Avantium.

Stage 2: Feasibility

The highest-scoring ideas progress to the feasibility stage,

where we conduct ‘proof of concept’ laboratory experiments.

We write 'invention disclosures' to accurately and methodically

record ideas for further development. We also perform a pre-

market analysis and seek external validation.

Stage 3: Development

The most promising projects will progress to the development

stage. Here, we prepare a preliminary business case as well as

a budget and operational plan for the new technology. We also

identify partners with whom we could take the technology

further. Based on a comprehensive project plan, resources are

allocated and the plan is executed. Significant stage gates are

held with the Management Team, which decides if the new

technology will advance to the pilot stage or if other options are

more appropriate.

Stage 4: Pilot Plant

In the pilot stage, we develop a Pilot Plant design. When we

have secured financial investment, our Supervisory Board

reviews the Management Team’s recommendation to build the

Pilot Plant. Once it is approved, the new proprietary technology

is then tested and demonstrated at the Pilot Plant. The objective

is to scale up the novel technology from laboratory to

demonstration size, to further optimise the technology and

validate applications.

Stage 5: Flagship Plant

Once successful, we proceed – on a stand-alone basis or in

partnership – to the Flagship Plant stage, where we begin

production at commercial scale. First, we embark on the

engineering phase, with the concept development (process

design package) followed by the front-end-engineering and

design (FEED) stage of the Flagship Plant. Construction starts

once a Final Investment Decision is taken, based on three pillars:

(i) technology readiness including engineering, (ii) commercial

coverage and (iii) financing.

Stage 6: Industrial Take-Off

Once the Flagship Plant is operational and the technology

validated, Avantium can license its technology to industrial

partners for broader scale deployment and market adoption.


	30

Value We Created in 2022

From breaking ground at the site of our

new FDCA Flagship Plant to

implementing a new strategy for

Avantium R&D Solutions, 2022 was a

year of transformation for our company.

Across our technologies, operations,

people and leadership, we continued to

deliver long-term value with a positive

impact on our various stakeholders.

Our value creation model shows how we act to bring to life our

ultimate vision: a chemicals industry decoupled from fossil

feedstocks. It also illustrates how our sustainability ethos is

interwoven into every aspect of our work. Through our actions,

we aim to create value for all our stakeholders – from employees

and investors to partners, customers and society.

In this chapter, we report on our progress in 2022, beginning

with the year's highlights for each of Avantium's three business

units. Using the four pillars of our Chain Reaction 2030

sustainability plan – Technologies; Operations; People;

Leadership and Governance – as our compass, we then explore

the value we created in 2022 in relation to our specific

sustainability targets, taking into account our progress on the

topics we have identified as being most material to our business

(for more details on this process, see Stakeholders and

Materiality).

We remain committed to making a positive contribution to the

United Nations Sustainable Development Goals (SDGs), which

governments worldwide have adopted with the aim of ending

poverty, protecting the planet and ensuring prosperity for all by

2030. Both in this chapter and under Sustainability Statements,

we report on our SDG contribution in relation to each material

topic.


	31

Business Highlights

Within our three business units, we made

further strategic progress towards the

commercialisation of our proprietary

technologies in 2022.

Avantium Renewable Polymers

YXY® Technology

For YXY® Technology and our lead product FDCA, 2022 was the

year when our plans to build a FDCA Flagship Plant began to

actually materialise. Having confirmed our positive Final

Investment Decision for the world's first FDCA Flagship Plant in

December 2021, and having received the support of Avantium’s

shareholders at an Extraordinary General Meeting in January

2022, we reached Financial Close on 31 March 2022, paving the

way for construction to begin.

Upon Financial Close, our engineering partner Worley and

investment partner Bio Plastics Investment Groningen (formerly

the Groningen Consortium) became minority shareholders in

Avantium Renewable Polymers. They now hold a combined

share of 22.6%, while Avantium N.V. retains 77.4% of the

equity. Avantium Renewable Polymers received a €20 million

cash investment from Bio Plastics Investment Groningen at

Financial Close. Worley’s €10 million equity investment in

Avantium Renewable Polymers is structured as (i) an

investment in kind and (ii) a 50%–50% risk-sharing mechanism

for the engineering, procurement and construction (EPC) phase

of the FDCA Flagship Plant. The risk-sharing agreement ensures

that costs incurred beyond the agreed EPC contract will be

shared between Avantium and Worley, excluding any changes

to the scope of the FDCA Flagship Plant design.

On Financial Close, Avantium also entered into a €90 million

Debt Facilities Agreement with a consortium of Dutch banks,

comprising ABN AMRO Bank, ASN Bank, ING Bank and

Rabobank, as well as with the Dutch government-backed

impact investment fund Invest-NL. Each bank has committed

€15 million as a bank loan. Invest-NL has committed €30 million

debt. The Debt Facilities Agreement has multiple tranches. In

November 2022, the first drawdown of €15 million on the Debt

Facilities Agreement took place.

Building a Sustainable Future for Plastic

Having reached Financial Close, attention turned to our

construction site at Chemie Park Delfzijl. In April, we held our

First Piling Ceremony, inviting Bio Plastics Investment Groningen

and Worley, FDCA and PEF customers, local representatives,

grant and debt providers and other stakeholders to celebrate

this landmark occasion. By the end of 2022, more than 700 piles

had been driven into the ground and the civil works had been

completed, including installing the foundations, floors, piping,

roads and walls. In addition, a significant portion of the steel

construction and storage tanks have already been erected.

Despite the challenges posed by global supply chain disruption

and inflation during the year, construction is progressing well,

thanks to close constructive interactions with contracting

partners and a careful programme of procurement and technical

mitigation measures. After a thorough review of the project

execution plans and the expected delivery and installation of

equipment, the timeline of mechanical completion for the FDCA

Flagship Plant is now expected to be in the first quarter of 2024.

In 2022, Avantium announced that it anticipates that the FDCA

Flagship Plant CAPEX will be materially higher, due

predominantly to inflation as well as scope changes.

At our Pilot Plant in Geleen, our technical and innovation teams

continued to enhance our proprietary YXY® Technology, which

underpins the future success of our FDCA Flagship Plant. At our

Pilot Plant in Geleen and laboratories in Amsterdam, our process

technology development teams began preparing the first

engineering package for licensee facilities with capacity up to

100 kilotonnes. In February 2023, we announced that we

entered into non-exclusive industrial technology license

agreement with Origin Materials, providing Origin access to

relevant parts of Avantium’s YXY® Technology to enable the

conversion of Origin-produced CMF (chloromethylfurfural)

derivatives into FDCA at a 100 kilotonnes per annum scale

facility. This will enable the use of second generation, renewable

feedstocks for the production of FDCA and PEF. The license

agreement marks a key step in opening up new revenue

streams and bringing our commercialisation strategy to fruition.

In 2022, we also held several successful PEF polymerisation

trials (using our FDCA and plantMEG™) at the site of our partner

Selenis in Portugal.

Putting PEF into the Hands of Consumers

On the commercial side, Avantium secured eight new offtake

agreements for FDCA and PEF in 2022 and early 2023, taking

the total to 13. Our new customers include LVMH Group

(cosmetics packaging), Sukano (masterbatches), Carlsberg

(drinks packaging), AmBev (soft-drink bottles), Monosuisse

(industrial yarns), Henkel (adhesives), Origin Materials

(sustainable chemicals and materials) and an undisclosed brand

owner. The signing of the agreement with Brazilian brewing

company AmBev marks Avantium’s first offtake commitment in

South America, adding to our existing customer base across

North America, Europe and Asia.


	32

Avantium and its PEF offtake community also took further steps

towards bringing more sustainable plastics to the world. In

March, LVMH Beauty, part of LVMH Group, became the first

luxury cosmetics company to join the PEFerence consortium,

supporting the commercial introduction of PEF to the cosmetics

market. Over the summer, Carlsberg tested 8,000 of its PEF-

lined Fibre Bottles in a real-world setting for the first time: an

exciting development. With AmBev also planning to use PEF in

the packaging for soft drinks, we see this as proof of the trust

our customers have in our product. In a key regulatory

development, meanwhile, Avantium was awarded a three-year

endorsement for PEF by the European PET Bottle Platform

(EPBP) in April. This allows the recycling of multilayer PET/PEF

packaging in the European bottle recycling market.

Furthermore, our agreement with Monosuisse means we are

now primed to enter a significant new sector: fibres. PEF, in its

capacity as a plant-based polyester fibre, is an extremely

promising solution for this high-volume market, which is

confronting major sustainability challenges. To support progress

in this area, Avantium also launched a new PEF Textile

Community in June 2022, together with Antex (a producer of

yarns made from PEF) and four other partners who will use

Antex’s yarn to develop PEF fabric applications in different

market segments, including industrial fibres, sportswear and

fashion clothing. With all members committed to

environmentally friendly processes and technologies, we aim to

collaborate with and learn from one another to further develop

the application of PEF in the textile industry.

From Development to Execution

The year’s developments – at our FDCA Flagship Plant and

beyond – are all part of a major transition for Avantium

Renewable Polymers, as we move from pure R&D to commercial

execution. Nevertheless, our core technology and innovation

efforts remain at the heart of what we do. The life-cycle

assessment (LCA) results we received for PEF in February 2022

clearly show its potential to contribute to curbing global

warming, making the commercialisation of YXY® Technology

more important than ever.

To support this, we began strengthening our organisation and

capabilities in 2022, especially in relation to the running of our

full-scale FDCA Flagship Plant. As well as working on plans and

procedures for commissioning, safety and more, we also made a

strong start in hiring the new colleagues we need. Given the

high level of competition for talent in the north of the

Netherlands, which is a hub for chemistry initiatives, we believe

this proves Avantium’s attractiveness as a sustainable

employer.

In this area, as in the entire Avantium Renewable Polymers

ecosystem, we anticipate further strong progress in 2023 –

meaning that, in 2024, we will be fully prepared to introduce our

game-changing PEF to the market and start realising our vision

of a more sustainable plastics industry.

A Complementary Breakthrough

Researchers at the Industrial Sustainable Chemistry group of

the University of Amsterdam, led by Chief Technology Officer

Gert-Jan Gruter and including a number of PhD students, made

an important PEF-related breakthrough during the year. The

team successfully solved the longstanding challenge of

incorporating isosorbide, a glucose-derived monomer, into

polymers like PEF and PET to produce polyethylene-co-

isosorbide furanoate (PEIF) and polyethylene-co-isosorbide

terephthalate (PEIT). These are more rigid and have a higher

glass transition temperature than conventional plastics, making

them better suited to reuse and refill applications as part of a

circular economy. Polymers based on plant-derived isosorbide

like PEIF and PEIT also have promising barrier and mechanical

properties that can outperform common fossil-based materials.

This exciting project, the results of which were published in

November in the journal Nature Communications, was

supported by LEGO as part of its search for non-fossil

alternative plastics. We plan to continue exploring the

isosorbide route as a path to stronger and more sustainable

plastics such as PEIF and PEIT, which have interesting business

potential in their own right.

Avantium Renewable Chemistries

Ray Technology™

Avantium has restarted the Ray demonstration plant as

operations were temporarily paused during 2021 due to an

accident. The technology programme is back on track, our

operations are on stream and working well. We remain excited

about the potential of our plant-based glycols technology and of

our two key products: plantMEG™, a core building block for

polyesters such as our plant-based PEF, and plantMPG™, the

applications of which include functional fluids and unsaturated

polyester resins.

Securing the Foundations for Commercialisation

For the first few months of the year, operations remained on

hold while we continued our extensive post-accident safety

analyses, changed the design of the demonstration plant, and

worked to strengthen our safety systems, training and

procedures at the site. In the second quarter of 2022, we

restarted the Ray demonstration plant. With the plant running

successfully throughout the rest of the year, we gathered key

data that we can now feed into the engineering plans for our

planned Ray Technology Flagship Plant.

This commercial plant is planned to be constructed as part of a

Joint Venture with the sugar manufacturer (and feedstock

supplier) Cosun Beet Company. The spike in prices of sugar,

energy and hydrogen in 2022, caused us to re-examine the

long-term Ray business case, and both parties remain fully

committed to moving forward with our goals, which we see as a

key stepping stone on the journey towards a more sustainable

chemical industry. We are still in the process of selecting the

optimal site in Northwest Europe for the construction and

operation of a Ray Flagship Plant. Together with Cosun Beet

Company, we recruited a Commercial Director in 2022 who

confirmed our conviction that Ray Technology™ is perfectly

positioned to serve the plant-based glycols sector, a strong and

growing market that is increasingly looking to adopt more

sustainable solutions. We have also initiated further action to


	33

explore new partnerships using other feedstock sources and

targeting markets outside of Europe.

Validating the Sustainability Potential of Our Products

Following the publication of the ISO-certified LCA results for

plantMEG™ in February 2022, Avantium released the similarly

exceptional results of our ISO-certified LCA for plantMPG™ in

October. Compared to incumbent MPG production routes, plant-

based MPG using beet sugar from the Cosun Beet Company

generates 50–81% fewer greenhouse gas emissions over the

cradle-to-grave life cycle of the product. PlantMPG™ also

strongly outperforms its counterparts on water use (up to 99%

less) and non-renewable primary energy demand (up to 82%

less).

The LCA results for both plantMEG™ and plantMPG™ show the

significant potential of Ray Technology™ to help lower the

industry’s carbon footprint and contribute to a reduction in

global warming. These validations are further motivation for

Avantium to commercialise our innovative technology, via a

licensing approach, as quickly and widely as possible. We are

confident that we are now better placed to realise this goal after

the progress we made in 2022.


	34

Dawn Technology™

In 2022, we continued optimising our biorefinery technology: a

promising solution for de-fossilising the chemical industry

through the conversion of agricultural and forestry residues to

sugars and other fractions for the production of high-value

chemicals and materials. In parallel, we kept working to identify

new feedstocks and ensure all co-products can be strategically

valorised. Meanwhile, under the European grant programme

IMPRESS, we explored options for making Dawn Technology™

economically scalable. This included the successful completion

of the conceptual process design and process economics, in

partnership with an external engineering company.

Turning to Textiles

We made further progress on new feedstock testing during the

year, a focus that will continue in 2023. We are especially

interested in waste textiles, and, in particular, cotton/polyester

blends, which make up the highest volume of non-recyclable

waste textiles. Avantium’s Dawn Technology™ converts cotton

(cellulose) into glucose, liberating the polyester for recycling.

To this end, a MIWATEX consortium led by the University of

Amsterdam’s Industrial Sustainable Chemistry department

(headed up by Gert-Jan Gruter) was awarded a €1 million Dutch

research council (NWO) grant in June 2022 to develop a new

pathway towards circularity in textiles. The consortium aims to

upcycle mixed cotton/polyester textile waste into high-quality

molecular building blocks for the production of chemicals and

polymers. Two PhD students from the University of Amsterdam

(Avantium’s long-time research partner) began working on the

project in November as members of Avantium’s Corporate

Technology department. A third student will research the related

consumer psychology, looking at whether consumers are willing

both to sort their waste textiles and to buy textiles containing

recycled components.

Proving Our High-Performing Bio-Asphalt

As well as making valuable industrial sugars, Dawn

Technology™ produces lignin as a high-value co-product. This

organic polymer has several exciting sustainability applications

in heavily carbonised industries, including energy and

construction.

Avantium and CHAPLIN XL consortium member Roelofs opened

Dawn Drive, made from bio-asphalt containing lignin produced

by Dawn Technology™, in 2021. In 2022, the road continued to

perform well, both in the real-world conditions of Groningen and

in LCA testing. Lignin-based asphalt has a substantially lower

carbon footprint than its fossil-based counterpart; moreover, we

are continuing to evaluate whether our bio-asphalt also delivers

energy savings during processing. In 2023, we will keep working

with Roelofs and other partners to investigate the impact of

different feedstocks (for example, hardwood versus softwood)

and identify the next step for our promising collaboration.

Volta Technology

It was another exciting year for Volta Technology, our carbon

capture and utilisation (CCU) solution. In the plastic industry,

unlike the energy sector, there is no alternative to carbon – and

with CO2 being one of the only non-fossil carbon sources

available, it is crucial we develop the means to make this a

viable alternative feedstock. We took important steps towards

this ambition in 2022, focusing on the conversion of CO2 to

formic acid, oxalic acid and glycolic acid. Not only do these

chemicals have high market value, but they also, when made via

CCU, have strong sustainability potential in a wide range of

polymer and other material applications.

From OCEAN to WaterProof

2022 was the last year of the R&D programme OCEAN, funded

by the European Union in collaboration with companies and

academic partners across Europe, through which Avantium

worked with partners to develop a Volta Technology

demonstration unit to produce formate. This mobile unit –

containing the largest cell of this type of technology anywhere in

the world – was installed at an RWE power plant in Germany in

January 2022 and operated successfully until the close-out in

October. Indeed, the cell’s performance exceeded all

expectations, converting CO2 at a rate of 250–500 g/hour for

more than 1,000 hours. Meanwhile, we are preparing for the

next phase of Volta Technology – namely, the step up to pilot

scale which will be achieved by adding more cells and linking

them together.

We also deployed a second CCU unit in 2022, this time at a

Titan cement plant in Greece, using waste CO2 to make formic

acid that can then be added into the cement to improve its

quality. The success of this unit is particularly encouraging as it

produces formic acid in a more cost-efficient way, hosting two

chemical reactions in a single cell (a process known as paired

electrolysis). Cost-efficient technologies like this will be a key

factor in promoting the uptake of more sustainable solutions in

the chemical industry.

In May, Avantium was awarded a €3 million grant by the EU

Horizon Europe programme as part of our involvement in the

WaterProof consortium.1 This four-year programme, which aims

to demonstrate the full value chain of a closed carbon cycle, will

see us use our proprietary Volta Technology to convert CO2 from

wastewater purification and waste incineration into formic acid.

This formic acid can then be used to make new consumer

products. Through this project, we intend to further strengthen

our business case for Volta Technology as a viable and

profitable commercial technology.


	35

1 Grant number 101058578 provided by the Horizon Europe Framework Programme.

The Carbon-Negative Polymers of the Future

Our third Volta Technology demonstration unit converts CO2 into

oxalic acid. In a proprietary second, separate process step, this

is then turned into glycolic acid. Avantium believes this

approach holds significant promise. By combining this glycolic

acid with some lactic acid, we can produce polylactic-co-glycolic

acid (PLGA), a polymer with valuable characteristics: it has an

excellent barrier against oxygen and moisture, has good

mechanical properties and is both home compostable and

marine degradable. This makes PLGA a more sustainable and

cost-effective alternative to, for example, non-degradable,

fossil-based ethylene in paper coating applications. Most

excitingly, using non-fossil CO2 and renewable energy results in

a carbon-negative plastic – meaning it could make a significant

contribution to global efforts to reach net zero. In 2022,

Avantium began discussions with interested companies for the

further evaluation of PLGA. We aim to secure several

collaborations before we ramp up this Volta Technology to pilot

stage.

Avantium R&D Solutions

In October, our Avantium Catalysis business unit launched a

new strategy and a new name – Avantium R&D Solutions –

marking a strategic shift towards R&D in sustainable chemistry.

This decision is not only a response to changing industry

demand, but also a means of better aligning this business unit

with Avantium’s overall strategic direction and purpose: to help

transition industry to more sustainable and circular solutions.

Expanding Our Impact

We see a compelling opportunity to apply our decades of

experience in R&D products and services to the rapidly growing

field of sustainable chemistry. As well as continuing to provide

our advanced catalysis systems and services to customers

around the world, Avantium R&D Solutions will therefore

expand its business focus to four sustainable chemistry markets:

i) green hydrogen via water electrolysis, ii) chemical plastic

recycling via pyrolysis, iii) adsorption and iv) sustainable

chemical building blocks. These markets have been selected for

their current (multi-billion dollar) size, further growth potential

and natural fit with Avantium R&D Solutions’ existing expertise

and/or customer base. We therefore view this as a low-risk

strategy that enables us rapidly to further grow our business

while also making a valuable contribution to these markets and

accelerating the industry’s sustainability transition.

Since there is currently no market consensus on optimal

technologies in these segments, our strategy is to offer custom-

made units to customers, meaning we can support a diverse

range of R&D processes. We have built such units for many

years, mostly for use in Avantium’s own R&D, but on occasion

for use by customers. In recent years, the volume of requests for

sustainable R&D support has risen, and with our new strategy in

place we will now be better able to meet that demand.

At the end of 2022, we had already secured the first commercial

contracts for custom-made units for adsorption and chemical

building blocks, and we intend to identify and establish more

collaborations in 2023. As part of the execution of our expanded

strategy, we also aim to increase capacity by recruiting more

people during the year, supporting our new direction as an

expert partner in R&D for sustainable chemistry.

Overcoming Global Challenges

Meanwhile, we will continue to develop our existing

programmes: (i) R&D Systems with our Flowrence® technology

(proprietary catalyst testing) and Batchington unit (small-scale,

multiple-parallel batch testing), (ii) R&D Services and (iii)

Refinery Catalyst Testing. In 2022, we continued to carefully

manage the after-effects of COVID-19 on all three programmes.

Overall, total revenue from Avantium R&D Solutions increased

13% and amounted to €11.3 million in 2022, compared to €10.0

million in 2021.

While demand for Flowrence® systems has yet to fully recover,

revenue from our Systems business in 2022 amounted to €8.4

million (2021: €6.8 million). In other developments, our first

Batchington platform was sold and delivered in 2022. The

commercialisation of this technology, which we planned to

launch in 2020, has been heavily impacted by COVID-19,

making this a significant milestone. Ongoing travel restrictions in

China also hindered our installation and commissioning plans,

but with the recent changes there is now light at the end of the

tunnel.

Our Services business saw a slightly lower level of demand than

in 2021, and generated €2.9 million in revenue (2021: €3.2

million).


	36

Our Technologies

With our four main proprietary

technologies and tailored R&D services,

Avantium is committed to becoming a

world leader in sustainable chemistry.

Our solutions make a valuable

contribution to the shift towards a fossil-

free chemical industry and to the future

of people and planet alike.

Reducing Industry CO2 Emissions

By 2030, our technologies and products will deliver 1.5

million tonnes of CO2 savings across the chemical

industry.

Most of the reductions we need in order to reach this target will

only become possible once our commercial plants are

operational and technology licenses are provided to partners,

meaning we cannot currently materially quantify our progress

towards achieving this goal. Nevertheless, our existing projects

at Avantium are already creating value via a range of CO2

emission reduction means.

Currently, Avantium has three Pilot Plants operational, for our

YXY® Technology, our Ray Technology™ and our Dawn

Technology™. While the capacity of these Pilot Plants is

significantly smaller than the capacity of a commercial plant,

there are already CO2 savings taking place using the respective

technologies. For example, the YXY® Technology Pilot Plant in

Geleen has a capacity of approximately 10,000 tonnes of FDCA

per year. FDCA is the key building block for PEF. The CO2

savings for PEF in comparison with PET are calculated via a

Life-Cycle Assessment (LCA).

Life-Cycle Assessment Highlights

In recent years, LCAs have been carried out on the

environmental impact of our YXY® Technology and Ray

Technology™ (for details, see our corporate website). Dawn

Technology™, which is further behind in Avantium’s

development pipeline, has not yet undergone an LCA. Volta

Technology, meanwhile, clearly contributes both to circularity

and to CO2 reductions by using captured CO2 emissions as its

feedstock.

•Bottles made using Avantium’s PEF (via our YXY®

Technology) showed a Greenhouse Gas (GHG) reduction of

up to 35% over the full product life cycle when compared

with PET.

•Avantium’s plantMEG™ (made using our Ray Technology™)

shows a reduction of up to 83% in GHG emissions over the

full life cycle when compared with incumbents.

•Avantium’s plantMPG™ (also made using Ray

Technology™) shows a reduction of up to 81% in GHG

emissions over the full life cycle when compared with

incumbents.


	37

Licensing Agreements

Avantium’s strategy is to license our technologies to other

companies who will, in turn, be able to multiply the positive

effects of our technologies. We believe this has the potential to

be a turning point in the fossil intensity of the chemical industry:

based on the results of our various LCAs, effective and far-

reaching licensing programmes could lead to CO2 emission

savings beyond Avantium’s target of 1.5 million tonnes.

Carbon Capture and Utilisation

Avantium’s Volta Technology is a leading electro-catalytic

platform developing CO2 utilisation solutions for a circular

future. It converts CO2 into higher-value chemicals. In 2022, the

Volta Technology team worked on several projects:

•As part of the EU Horizon 2020 project OCEAN, we installed

a container unit on site at an RWE power plant in

Niederaussem, Germany. During 2022, we converted 30.4

kg of CO2 emissions to 120 kg of formate.

•Under the RECODE project, we also ran a container at Titan

Cement in Greece, an industrial site with hot and dusty

conditions. Due to technical difficulties unrelated to our Volta

Technology, it was not possible to measure how much CO2

was converted.

•In 2022, we embarked on the WaterProof project, through

which we will design and build equipment for the conversion

of CO2 emissions from urban wastewater and waste

treatment facilities. The demonstration is expected to take

place in 2025/2026 at Waternet in Amsterdam and HVC in

Alkmaar (both in the Netherlands). We plan to make formic

acid that will be used in the production of consumer cleaning

products and as an ingredient in leather tanning.

Improved Catalyst Testing

Catalysts increase the rate of chemical reactions and can

therefore make a wide variety of chemical processes more

efficient. As a result, they play an essential role in limiting the

environmental harm of the chemical industry. With its expertise

in catalysis, Avantium R&D Solutions supports customers’

businesses in becoming more sustainable, carrying out 27

catalysis-related projects and engaging with 34 different

customers in 2022. While we cannot report on the resulting CO2

reductions at our partners’ facilities, our support enables them to

improve their processes and accelerate their transition to lower-

emission operations.


	38

Closing the Loop on Circularity

By 2030, we will become a circular business.

Achieving our circularity target depends on process

improvements at all stages of the product life cycle, including

energy, input materials, production, distribution, use, disposal,

waste and emission leakage. Avantium has therefore pledged

to:

•Design products that use sustainably sourced renewable

materials in minimum possible amounts.

•Develop products that are durable and recyclable.

•Enable production scalability via the efficient use of licensing

models for our technologies.

Design-related decisions are taken at the very beginning of the

Innovation Funnel (see page 27), when 19 criteria are used to

assess the likelihood of technical and commercial success and to

evaluate the idea’s strategic fit for Avantium. The design phase

of our technologies and products is critical to the success of any

circular economy: if products are not specifically developed to be

renewable, reusable and recyclable, the circle will inevitably

break down. Avantium’s technologies all run on plant-based or

air-based feedstocks whose supply can be renewed, rather than

consuming finite resources.

End-of-Life

As for our products, such as PEF and plantMEG™, recent LCAs

provide evidence of their circular credentials regarding

recyclability and end-of-life. Our main product PEF has some

distinct circularity benefits compared to other polymers; for

instance, it degrades much faster than conventional plastics

when exposed to fungi and bacteria under industrial

composting conditions, as assessed by the Belgian company

Organic Waste Systems.

In addition, not only has PEF been proved fit for purpose with

existing technologies for PET recycling, but it also can easily be

distinguished and sorted from PET and other plastics using a

common near-infrared sorting technique. In 2022, in accordance

with the European PET Bottle Platform (EPBP) protocol, an

independent third party (PTI Europe Sàrl) conducted an

evaluation to determine the effect of multilayer PET bottles

containing 10% PEF on the PET recycling stream. The results

showed that PET/PEF multilayer bottles have no negative

impact on haze and other properties of the resulting recycled

PET products at a market penetration of 5%, even taking

potential local accumulation into account. Based on this, the

EPBP awarded an interim endorsement to Avantium’s PEF resin

in 2022.

Product Stewardship

In 2022, we developed and launched a product stewardship

strategy, which sets out Avantium’s responsibility for minimising

our products’ environmental impact throughout the entire life

cycle, including end-of-life management. This strategy

incorporates four main activities: regulatory compliance,

sustainable sourcing and supply chain consistency, certifications

and product sustainability. We will provide a Regulatory Data

Sheet (RDS) for every commercial product, confirming the

product’s status regarding each of these activities.

Using Sustainable Feedstocks

By 2030, 100% of our plant-based feedstock for

Avantium Renewable Polymers and Avantium

Renewable Chemistries will come from sustainable

sources.

Avantium currently uses mainly first-generation feedstocks;

namely, fructose and glucose from the agriculture supply chain.

We work with suppliers who can ensure they provide us with

sustainable materials, sourcing low-value fructose and glucose,

for example, from farmers who feed their higher-value plant

proteins into the food industry. Meanwhile, we are working to

develop technologies that will allow us to increase our use of

second-generation feedstocks (i.e., non-food biomass) and

third-generation feedstocks (i.e., already-emitted CO2).

Monitoring Supplier Sustainability

Overall, Avantium works with more than 600 different suppliers,

most of whom provide goods and services to help run our offices

and day-to-day processes with very limited environmental and

social impacts. In 2022, we identified a handful of our key

suppliers – our most important in terms of either volume or

budget spend or their critical role in our processes – whose

impacts are much more significant, and with whom we will work

to reduce these impacts.

In 2022, we have launched a sustainable procurement plan,

which includes securing and monitoring the compliance of

Avantium's key suppliers - with the greatest impact on our

wider supply chain for bio-based materials - with our new

Sustainable Supplier Code, which can be found on our website.

The new Sustainable Supplier Code is founded on the

conventions of the International Labour Organisation (ILO), the

Ethical Trading Initiative (ETI) and the principles of the

Sustainable Agriculture Initiative (SAI) Platform. The Code

provides a consistent set of criteria for assessing how suppliers,

and if applicable the farmers who supply them, are progressing

on matters of sustainability. It can also be used to benchmark

external standards and make decisions on sustainable sourcing.

The Code covers important sustainability issues including legal

compliance, respect for human rights and labour standards, safe

working environments, environmental responsibility and the

management of bio-based feedstocks.

As part of the preparations for opening our FDCA Flagship

Plant, we worked to recruit key suppliers throughout 2022. All

have been assessed according to the social and environmental

norms as described in the Supplier Code of Conduct and none

has so far been identified as having a negative environmental or

social impact. If this should occur, Avantium will discuss with the

supplier ways of improving their working procedures and work

with them to define a plan. Should the supplier continue to

deviate from the Avantium Sustainable Supplier Code, Avantium


	39

will decline to recruit the potential supplier or, in the case of

existing suppliers, re-assess at the leadership team level

whether the collaboration should be continued.

In 2023, we will ask our key suppliers to comply with our

Sustainable Supplier Code, starting with those most relevant for

Avantium Renewable Polymers. We also aim to make strong

progress with Avantium’s remaining suppliers during the year. In

the longer term, following their initial assessment and adoption

of the Code, our key suppliers – with the greatest impact on our

wider supply chain for bio-based materials – will be asked to

review the Code and reconfirm and evaluate their compliance on

a regular basis from 2024 onwards.


	40

Our Operations

At Avantium, we create disruptive

technologies to support the chemical

industry’s transition away from fossil

feedstocks. At the same time, we remain

conscious of the potential impact of our

own operations and work to mitigate any

adverse effects on the world around us.

Our Sites

We currently run operations at four different locations. Most of

Avantium’s work is carried out in the offices and laboratories at

our headquarters in Amsterdam, close to many other chemistry-

and technology-related companies as well as the port of

Amsterdam. Our second site, also a combination of offices and

laboratories, is hosted by the University of Amsterdam at the

Amsterdam Science Park.

We have Pilot Plants where we validate our technologies with a

view to ensuring their market readiness: one for YXY®

Technology at the Chemelot site in Geleen (in the south-east of

the Netherlands), a second for Ray Technology™ at Chemie

Park Delfzijl (in the north-east of the Netherlands) and a third for

Dawn Technology™, also at Chemie Park Delfzijl. On a

completely different scale, however, is the FDCA Flagship Plant

we are currently building – the world’s first commercial facility –

to house our YXY® Technology at Chemie Park Delfzijl:

scheduled to become our fifth operational site in 2024, this plant

will have an annual capacity of 5 kilotonnes of FDCA.

Chemie Park Delfzijl

Chemie Park Delfzijl is part of Chemport Europe. an innovative

ecosystem for chemicals and materials in the Northern

Netherlands. Companies, government and knowledge institutes

work together towards a shared ambition: changing the nature

of chemistry. It is the ambition of Chemport Europe to be the first

chemical cluster in the Netherlands (and perhaps in Europe)

with zero CO2 emissions and minimum environmental impact.

The entire Chemport Europe industry cluster will only use

renewable energy and feedstock by 2050.

Brightlands Chemelot

Brightlands Chemelot is much more than an industrial park in

South Limburg. The unique chemistry and materials site is of

strategic importance for many of the companies present. At

least as important: Chemelot is a growth engine for the entire

region. Brightlands Chemelot is a unique chemical and materials

community that ensures accelerated business growth through

the open exchange of ideas. Since 2018, it has been recognised

as one of the leading chemical sites in Europe. Its goal is to

become circular, sustainable and completely climate neutral by

2050.

Amsterdam Science Park

Amsterdam Science Park has one of the largest concentrations

of academic education and research facilities in Europe. It is a

major hub for research, innovation and entrepreneurship, thanks

to its world-class research institutes, universities and some 170

companies. It features particularly strong representation in the

fields of ICT, life sciences, sustainable chemistry and advanced

instrumentation.


	41

Providing Safe and Healthy Workplaces

By 2023, all our plants plan to achieve an ISO 45001

certification.

As a chemical company, we prioritise safety above all else.

Occupational health and safety (OHS) is managed by our

Quality, Health, Safety and Environment (QSHE) department

and involves very strict policies and management systems. The

team ensures that proper onboarding, training and work

practices are followed, while procedures, risk assessments and

monitoring are maintained on an ongoing basis. Our main OHS

management tool, the Integrated Management System (IMS),

covers the operational aspects of quality, OHS, process safety

and environment. It contains sets of rules (relating to working

methods, for instance) that are described in policies, procedures

and instructions to be followed by everyone at Avantium. This

ensures we create a safe and effective working environment.

Enhancing OHS

In 2022, Avantium began implementing various ISO

(International Organization for Standardization) and NTA

(Nederlandse Technische Afspraak – Dutch Technical

Agreement) standards to align the OHS policies and processes

of our laboratories and plants and thus create a single,

company-wide OHS system. The scope of this work includes

legal requirements; risk management and/or management

system standards and guidelines; procedures for reporting

work-related hazards and hazardous situations; processes for

identifying and assessing work-related hazards and risks (both

routine and non-routine); and processes for investigating work-

related incidents.

Our goal is to achieve certification in line with four different

standards:

•ISO 9001 sets out the criteria for a quality management

system, ensuring good-quality products and services.

•ISO 14001 is a set of standards designed to help

organisations increase their environmental sustainability.

•ISO 45001 is an international standard for health and safety

at work. It requires an OHS management system, supports

Avantium's OHS performance and provides guidance on

healthy and safe workplaces.

•NTA 8620 sets out requirements for a safety management

system to prevent major accidents involving one or more

hazardous substances and to control their consequences.

We aim to finish implementing this project at all our operating

locations by the end of 2023, in line with our target. In due

course, our FDCA Flagship Plant will also be added to this

scope.

Practices and Protocols

In addition to promoting Avantium's list of Golden Safety Rules,

we deliver formalised training to every new joiner, as well as a

comprehensive OHS reading list. Employees and visitors

entering our Pilot Plants must follow a short training course and

answer a list of questions before accessing operational areas.

Avantium company meetings always begin with a safety

update, where we discuss incidents and the measures taken to

prevent their recurrence. We also have a Safety Culture Team,

comprising employees and management, which meets

periodically to influence the behaviour of employees through

safety campaigns and related communications. In 2022, the

Safety Culture Team introduced a new focus topic: Hazard and

Risk Recognition. At Avantium, we have policies, procedures

and memos dedicated to risk identification and assessment that

help us stay safe and avoid accidents, but we recognise that it is

equally important to always stay alert to possible safety risks

arising as a result of behaviour. To grow awareness of possible

hazards and safety risks, all Avantium employees were invited

to join a presentation by an external subject matter expert. The

Safety Culture Team also organised a ‘Hazard Hunt', where

employees worked in teams to spot and report as many hazards

as they could.

We also continued to work with the certified OHS service

provider ArboUnie in 2022, with its work contracted and

supervised by the QSHE department. Every three years,

ArboUnie performs an overall Risk Inventory and Evaluation

assessment whereby work spots are inspected and work-

associated mental and physical risks are identified.

Accidents and Incidents

At Avantium, we strive to be an accident- and incident-free

workplace, but we also recognise that the nature of our work as

an innovative company in the chemical industry brings certain

risks. We therefore foster a no-blame culture, promoting

openness about unwanted events by encouraging employees to

report accidents and incidents and allowing us to continuously

improve our safety and environmental performance.

No work-related fatalities or serious injuries were recorded in

2022, although we recorded 43 incidents (2021: 29). Of these

incidents, most were related to leakages or spillages, with the

root cause being equipment or behaviour. None of the incidents

required first aid.

In 2022, we further analysed the accident that took place at our

Ray Technology™ demonstration plant in Delfzijl in 2021. We


	42

conducted extensive safety assessments and implemented

improved process safety measures, including adjustments to the

design of the demonstration plant. We are in the final stages of

concluding the investigations and the resulting consequences. In

the first half of 2022, we organised a company-wide meeting to

discuss what we had learnt. Avantium successfully restarted

operations at the plant.

Managing Waste from Our Operations

By 2025, we will send zero non-hazardous waste to

incineration and landfill.

Avantium generates both hazardous and non-hazardous waste,

with the management of hazardous waste strictly regulated by

the Dutch government. Avantium has strict guidelines for

employees to follow when handling (potentially) hazardous

materials. We also enact a safety policy based on the Hierarchy

of Control (a system for controlling risks in the workplace), in

which our first action is to eliminate the use of hazardous

materials whenever possible. When this cannot be done, we

recycle hazardous waste residues where we can, and the

remainder is sent for incineration. In both cases, we partner with

waste experts to ensure the safe disposal of materials that

could pose a risk to people or habitats. Often, our partners can

recover energy from this waste thanks to thermal processing. In

2022, Avantium produced 124,336 kg of hazardous waste.

While it is clear from our 2022 materiality assessment that the

topic of non-hazardous waste has become less material to our

stakeholders, we are nevertheless taking steps to achieve our

sustainability target for this topic, with practices in place to help

us manage non-hazardous waste in the way that best supports

our environment.

In 2022, we held a series of discussions at our different locations

about the main impacts of waste, including noise,

inconvenience, CO2 generation, unpleasant odours, toxic

emissions and water contamination. When it comes to

managing these impacts at Avantium, the first and best option

is to avoid generating this waste in the first place; thereafter our

goal is to find ways to recycle or reuse waste materials. In our

headquarters at Zekeringstraat in Amsterdam for instance, we

collect and separate the following materials for recycling

purposes: paper and cardboard, confidential paper, wood,

construction waste, coffee residues and cups, glass, plastic,

drinking cartons, tins, metal and chemical waste from

laboratories. At all our locations, we are one of many tenants,

and waste is managed centrally. For waste that cannot be

prevented, reused or recycled, Avantium therefore relies on

these waste management services to mitigate any possible

impacts. In 2022, the volume of non-hazardous waste produced

at our sites was 46,661 kg.

“Despite increasing production, we have successfully reduced

our waste, mainly thanks to our improved recycling loop for

acetic acid in the oxidation and re-slurry process.” Roger van

den Beuken, QHSE Manager at Avantium's Pilot Plant in Geleen.

Waste from Operations 2022: Hazardous Waste


in kg	2022
	Amount	%
Amsterdam (Zekeringstraat and Science Park)
Incineration	6,084	52%
Incineration with energy recovery	3,335	28%
Re-use or recycling	2,300	20%
Total Amsterdam	11,719

Pilot plant Geleen
Incineration with energy recovery	74,377	93%
Re-use or recycling	5,766	7%
Total Geleen	80,143

Pilot plants Delfzijl
Incineration with energy recovery	32,474	100%
Re-use or recycling	0	—%
Total Delfzijl	32,474

Total hazardous waste	124,336


	43

Waste from Operations 2022: Non-Hazardous Waste


in kg	2022
	Amount	%
Amsterdam (Zekeringstraat and Science Park)
Incineration with energy recovery	10,389	39%
Re-use or recycling	16,172	61%
Total Amsterdam	26,561

Pilot plant Geleen
Incineration with energy recovery	2,141	82%
Re-use or recycling	459	18%
Total Geleen	2,600

Pilot plants Delfzijl
Incineration with energy recovery	13,000	74%
Re-use or recycling	4,500	26%
Total Delfzijl	17,500

Total non-hazardous waste	46,661

Reducing Emissions from Our Operations

By 2030, our own operations will achieve net-zero

carbon emissions

Reducing GHG emissions and achieving net zero is very high on

Avantium’s agenda. Not only do our technologies themselves

enable significant emission reductions, but we also aim to

minimise emissions from the development of our technologies at

our own sites. The first step is to identify where emissions occur

in our operations, as shown in the table. We already report on

Scope 1 and Scope 2 emissions and have established systems

to allow us to track and report on Scope 3 emissions in the

future. We estimate that Scope 3 emissions will rise once

Avantium’s new FDCA Flagship Plant becomes operational, and

we will in due course assess the significance of their impact and

address them as necessary.

Emissions from Our Operations 2022


	2022
	Usage in kg	CO2 emissions in tonnes
Scope 1 (direct emissions)
Amsterdam Zekeringstraat	0	0
Amsterdam Science Park	0	0
Geleen Pilot Plant	n/a	0.436
CO2	n/a	0.326
VOC	n/a	0.110
Delfzijl Pilot Plant	0	0
Delfzijl Flagship Plant	0	0
Total Scope 1	0	0.436


	2022
	Usage in kg	CO2 emissions in tonnes
Scope 2 (indirect emissions)
Amsterdam Zekeringstraat
Electricity – fossil (MWh)	0	0
Sustainable electricity (MWh)	1,552	0
Gas for heating (m3)	68,638	136
District heating (Gj)	0	0
Total Amsterdam Zekeringstraat		136

Geleen Pilot Plant
Steam (GJ)	1146	71
Electricity – fossil (MWh)	0	0
Sustainable electricity (MWh)	1,090	0
Gas for heating (m3)	0	0
District heating (Gj)	0	0
Total Geleen Pilot plant		71

Delfzijl Pilot Plant
Steam (GJ)	770	152
Electricity – fossil (MWh)	446	289
Sustainable electricity (MWh)	0	0
Gas for heating (m3)	0	0
District heating (Gj)	0	0
Total Delfzijl Pilot Plant		442
Total Scope 2		649

In addition to CO2, our Pilot Plants also emit volatile organic

compounds (VOCs). In 2022, VOC emissions at Delfzijl were

insignificant; in Geleen they were estimated at 0.110 tonnes.

Avantium also deploys various energy saving measures, such as

the introduction of LED light bulbs across our sites to cut down


	44

our electricity usage – a step that delivered energy savings of

9,301 kWh in Delfzijl in 2022. In other locations, it was not

possible to measure the results of this initiative, owing to

changes in business activities and the implementation of other

measures.

In 2022, our Amsterdam Zekeringstraat offices and laboratories

switched to a solely green electricity supply (following the lead

of our Pilot Plant in Geleen), delivering a significant emissions

reduction of more than 700 tonnes. The annual total estimated

emissions for Scope 1 and Scope 2 across all locations was 649

tonnes CO2e.


	45

Our People

Our diverse team of 264 people is united

and inspired by our common purpose of

making a lasting, positive impact on the

world. We aim to attract and retain

talented colleagues and foster a

workplace where everyone feels they

belong, so they are in turn empowered to

contribute to the execution of our

ambitious strategy.

Our overall approach to HR management is laid out in various

company principles and policies, including our Employee

Conditions Handbook and the Code of Good Business Conduct

(see Responsible Business Principles on page 52).

Culture and Core Values

At Avantium, we are united by a common goal: to make a positive

and lasting impact on our world. Our employees are highly

motivated to contribute to this mission to transition the chemical

industry to a sustainable, fossil-free future. Setting high ambitions

and daring to take on big challenges is deeply ingrained in our

culture, because we know that innovation is not a linear process

but is characterised by highs and lows. Bringing successful

innovation to the market therefore requires perseverance,

creativity, flexibility and focus – traits that are common to

Avantium’s people and culture alike.

Our people are guided by five core values that define what we

stand for and how we work with colleagues, customers and

partners. These core values are not only central to our culture but

also enable the execution of our strategy.

1.We make a lasting impact: We think big. We understand our

customers through and through. We improve the world

around us. We drive – and thrive on – change. We have an

impact on the environmental footprint of the wider industry.

2.We are determined team players: We embrace challenges.

We value complementary talents and diverse perspectives.

We actively engage with partners. We work in teams to solve

problems. We go the extra mile to deliver results.

3.We do the right things right: We behave ethically. We make

bold choices. We take responsibility for our actions. We

operate safely.

4.We are pragmatic idealists: We always find a way. We think

outside the box, but never lose sight of reality. We keep our

feet on the ground. We always sail towards our destination,

while adjusting course when necessary.

5.We have fun and the rest of the world is a little bit weird: We

disrupt. We appreciate unconventional solutions. We

celebrate success and learn from setbacks. We view things

with a positive eye and an open mind.

We aim to live up to these values as we carry out our daily

activities. The qualities of honesty, integrity, openness and

respect are also enshrined in our Code of Good Business Conduct.

Communication plays a key role in this regard, and we strive to

maintain strong communication through company-wide

information and consultation procedures, including company

meetings, internal communication channels and formal

procedures (such as Avantium’s Works Council).


	46

Becoming a Top-10 Place to Work

By 2030, Avantium will be one of the 10 best

companies to work for in the Netherlands.

Our people are key to our success at Avantium, enabling us to

aim further and go higher. In turn, to support our workforce, we

pay significant attention to HR, recruitment, talent management

and other people-related matters, with the goal of becoming

one of the best employers in the Netherlands. Our reputation as

a sustainable chemistry disruptor makes us attractive to

potential employees – 10% of start-up employees in the

Netherlands work at an impact company like Avantium2 – but to

ensure that we also retain the talented people we need, we

strive to foster an inclusive and inspiring workplace where

everyone can explore and reach their potential. This involves

promoting, among other things, diversity, equal opportunities,

engagement, trainings, company culture and career

development.

Great Place to Work Programme

We carried out our first Trust Index survey with Great Place to

Work in December 2021. Our first goals were to identify

Avantium’s strengths as an employer and find areas where we

can do better – thus establishing a baseline for improvements in

the years to come. Our initial Trust Index score did not yet

qualify us for a Great Place to Work certification, but in 2022,

guided by the survey results, our Great Place to Work project

group organised round table sessions across all our locations

and business units to gather ideas on how to reach our 2030

target. In 2023, the project group will use these ideas to define

short-, medium- and long-term goals to help us gain

certification and become a top-10 place to work. We aim not

only to improve in areas where people have asked for more

support, but also to challenge ourselves to keep building on

areas in which we are already strong. In the first quarter of

2024, we will repeat the Great Place to Work survey, allowing

us to measure our progress against the current baseline.

Works Council

Avantium's Works Council (Ondernemings Raad) is composed

of eight members, chosen from different business units and sites

to ensure even representation of employees. New members

were chosen in 2022. During the year, the Works Council gave

advice on two topics and consent on one topic, as required by

the Works Council Act. One milestone was the successful

negotiation of the Job Grading Process, where the Works

Council represented employees and contributed to a fairer

system. The Works Council also discussed general topics, such

as safety, budget and vitality, with the Management Team, and

members used their everyday contacts to stay informed about

employees’ concerns. Many of these concerns have been

incorporated into the Works Council's 2023 agenda.

Health and Well-Being

We are committed to providing safe and healthy working

conditions for all our employees. Our chemical operations and

related activities come with inherent risks, and safety is

therefore always top of the agenda at Avantium (see page 39).

Meanwhile, as part of our everyday operations, we provide

guidance on ergonomics in the workplace, offer a voluntary

medical assessment and collaborate with a certified OHS union,

ArboUnie, to support our business and employees in matters

related to health, illness and absence.

The absenteeism rate in 2022 was 7.3% (2021: 6.1%). Even

though 31.82% of all employees recorded no absence due to

illness in 2022 (2021: 45.1%), the high rate of absenteeism has

our full attention. Our social medical team holds regular

consultations with our company doctor and involved leadership,

with the aim of supporting recovery and reintegration and, as a

result, reducing the absenteeism rate due to illness. By the end

of 2022, our HR department, in collaboration with ArboUnie,

had started line manager trainings with the aim of supporting

them in preventing and managing absenteeism.

We also recognise that mental well-being is a crucial

component of the health of our people, and, in turn, of our ability

to carry out our strategy. In 2022, we continued to foster a

working environment built on inclusion, support, trust, respect

and responsibility. We paid extra attention to social safety on

the work floor in 2022, with a message from Avantium's CEO

emphasising the importance of social safety and outlining the

procedures and actions colleagues can take should they

experience or witness discrimination, harassment, bullying or

victimisation. We have strong mechanisms in place to guard

against and address bullying, discrimination and other

unacceptable behaviour, including our Confidant initiative and

Whistleblower Policy. Employees who feel they have suffered or

witnessed harassment, discrimination, bullying or victimisation,

or who are struggling with related dilemmas, can contact one of

our Confidants to address their situation and/or follow

Avantium’s complaints procedure. The Confidant acts according

to our Confidant Regulations, giving advice while keeping all

discussions strictly confidential.

Performance Management and Training

At Avantium, we aim to ensure that every employee, no matter

their role in our company, is able to reach their full potential. At

the beginning of each year, all colleagues set their business and

personal goals in consultation with their line manager. Business

unit goals provide guidance for individual objectives, which

should include contributions to Avantium’s goals as well as


	47

2 https://www.techleap.nl/reports/netherlands-startup-employment-2022-report/

targets for self-development and learning. Employees and line

managers meet regularly to discuss progress on the goals, with

half-year meetings offering a chance to reflect on individual

performance, focus on development and aspirations and make

any necessary adjustments. At the end of the year, a final

appraisal meeting takes place.

Our portfolio of training and development programmes is

designed to help our colleagues enhance their personal and

professional skills and capabilities. All Avantium employees, for

instance, can access the GoodHabitz learning platform, which is

home to more than 80 development programmes. An online test

guides users towards the topics most relevant for them,

empowering individuals to drive their own learning journey. In

2022, our people followed courses to develop their IT, social

media and feedback skills, among many others.

We are committed to providing equal opportunities to our staff,

our contractors and agents of and applicants to the company,

and to not discriminating on the basis of age, gender, race,

disability, faith, beliefs or sexual orientation. Avantium aims to

ensure that its employees are selected, trained, compensated,

promoted or transferred solely on the basis of abilities,

qualifications and merit.

To prevent unconscious bias in our Performance & Development

Review cycle, all line managers receive briefing documents that

include information about, and guidance on avoiding

unconscious bias. To avoid bias in our recruitment processes,

interviewers use standardised recruitment scorecards to

evaluate candidates on their suitability for the vacancy. The

hiring team compares the compiled scorecards to identify the

strongest candidate.

Talent Attraction and Retention

Fostering a safe and vibrant workplace where people can make

an impact is a key pillar of our strategy. To support and enable

this, we offer a number of benefits to our employees, beginning

with our remuneration policy. Naturally, recognising and

rewarding our people for their work and achievements is an

important part of our approach to providing a great place to

work. Employee remuneration increases are dependent on

performance, position in the salary scale and results,

encouraging our people to aim higher, take on new challenges

and make a real, lasting impact through their work.

In 2022, our HR department concluded a job-grading exercise,

supported by external advisor Willis Towers Watson. Each

medium-level job title within our organisation was assigned a

job family and weighed based on seven criteria: Job Functional

Knowledge, Business Expertise, Leadership, Problem Solving,

Nature of Impact, Area of Impact and Interpersonal Skills. The

results were calibrated within and across our business units and

at Management Team level. The resulting job family matrix

depicts the relative structure of job titles in our organisation and

will be the backbone of all future HR instruments. Whenever

new job titles are identified, they will be graded and calibrated

using the same grading method.

Our new job family matrix served as the basis for a subsequent

salary benchmark, which was performed against our general

industry. With the help of Willis Towers Watson, we designed a

salary structure setting out a salary range per global grade. In

April 2022, all employees received confirmation of their job title

and grade, together with their personal relative salary position

within the applicable salary range.

Other employee benefits at Avantium include company pension

contributions and reduced health insurance costs. We also have

an Avantium Mobility Plan, which supports greener employee

travel through NS Business cards for public transport and a

company-wide bicycle scheme, which brings benefits for

employees’ mental and physical well-being as well as for the

environment.

Avantium has a highly educated workforce of experts across a

wide range of chemistry and engineering specialisms. In

preparation for the next phase of our strategy execution –

commercialising our renewable chemistry technologies and

constructing our FDCA Flagship Plant – we have broadened our

talent pool in terms of expertise in recent years, shifting our

focus from competencies such as innovation and creativity

towards the skills required for engineering, deployment and

commercialisation.

We believe the level of interest shown in Avantium by potential

candidates reflects positively on our company, in terms of both

the work we do and the way we do it. On average, we receive

2,290 applications every year – approximately 29 applications

per vacancy, including internal vacancies (2021: 43) – and it

takes us an average of 84 days to fill a vacancy.

In 2022, the Avantium team expanded considerably, with 64

new joiners on employee contracts (twice the number of

leavers). All in all, our workforce increased by 16.30%, for a total

of 264 people at the end of the year. In addition, we have 44

people on non-employee contracts: 23 with flexible contracts,

five with internship agreements, four with PhD agreements and

12 with self-employed contractor agreements. Diversity is a key

factor in the depth of our talent pool, and Avantium is proud to

attract candidates from all over the world: at the end of 2022,

we employed colleagues representing 25 different nationalities

(2021: 20).

Promoting Diversity, Equity and Inclusion

By 2025, we will improve upon our baseline of being

an inclusive and diverse company, ensuring we are

representative of the societies and communities we

operate within.

We aspire to maintain a safe and open culture where colleagues

of all backgrounds feel included, valued and supported. As part

of this, Avantium aims to provide equal opportunities to all

employees, ensuring people are selected, trained, compensated,

promoted and transferred solely based on the qualifications and

abilities needed to perform the work in question. Given the fact

that our operation fall under Dutch law, the risk of diversity-

related discrimination or unequal or unethical treatment is

limited; nevertheless, we take steps to promote diversity within

our team, especially with regard to age, nationality and gender.


	48

Celebrating Our Differences

In line with our company values, we strive to make the best

possible use of our people at all stages of their working life, in a

way that does justice to their well-being, motivation, experience

and knowledge. Avantium therefore has an age-conscious

personnel policy in place to guide the sustainable employment

of every colleague, regardless of age. The policy has four parts,

addressing different career stages: the development phase

(early-career employees), the rush-hour phase (career growth;

changing family composition), the balance phase (positive

work–life balance) and the senior phase (changes in physical

capacity; opportunities for older employees). To this end,

Avantium has several initiatives in place to help employees

balance their work and family lives, such as care leave and

parental leave. In 2022, 23 colleagues used their right to take

parental leave and another 10 returned from parental leave.

At the end of 2022, Avantium's workforce included people of 25

nationalities (2021:20). While English and Dutch are most

commonly used, tens of languages are spoken across the team.

As a result, we have an extremely diverse workforce that can

draw on a variety of backgrounds and experiences in support of

its work. Indeed, we are proud to have long been a very

international organisation where respect for diversity is not only

a moral obligation but also a business driver, ensuring the

attraction and retention of highly qualified people with the

specific abilities we need to bring our vision to life.

At the same time, we are aware that we operate within an

industry in which women have historically been

underrepresented. We therefore pay close attention to our

gender balance at Avantium. In 2022, 27% of our employees

were women (2021: 26.1%), while at the decision-making level,

50% of the Supervisory Board (2021: 80%), 17% of the

Management Team which has increased to 29% with the start

of Yap Chie Cheung in February 2023 (2021: 14%) and 41% of

senior management directly reporting to the Management Team

(2021: 28%) were women. We are committed to raising these

numbers and improving our company’s overall gender balance,

and have therefore set the following stringent diversity, equality

and inclusion targets for the next two years, against our 2021

baseline:

•Ensure at least 33% of our Supervisory Board are women

and at least 33% are men.

•Ensure at least 33% of our Management Team are women

and at least 33% are men.

•Ensure a minimum 2% year-on-year increase of women in

senior management who report directly to the Management

Team.

•Ensure a minimum 2% year-on-year increase of women in

our total workforce.

•Maintain the diversity of nationalities within our company.

•Ensure equal pay for equal work (as assessed by an

independent external party every three years).

•Conduct a Trust Index survey with Great Place to Work

every two years. In the Diversity & Inclusion module, we

measure progress within the organisation against the

following statements:

I.People here are treated fairly regardless of their age.

II.People here are treated fairly regardless of their race.

III.People here are treated fairly regardless of their gender

IV.People here are treated fairly regardless of their sexual

orientation.

V.If I am unfairly treated, I believe I will be given a fair shake if

I appeal.

Meeting these targets is especially important as we pursue the

scale-up of our lead technology to commercialisation and

continue to grow our workforce, which is broken down by

seniority level, age group, nationality and gender diversity in the

table.

Employee Diversity in 2022


	Manage- ment Team	Leadership positions	Non- leadership positions
	Manage- ment Team	Leadership positions	Non- leadership positions
Female	17%	41%	26%
Male	83%	59%	74%

<30 years old	—%	—%	12%
30–50 years old	—%	41%	56%
>50 years old	100%	59%	31%

Dutch	100%	77%	77%
Non-Dutch	—%	23%	23%

The basic salary ratios of women to men vary per location and

seniority level. In general, the ratio for non-Management Team

positions is approximately 0.90.


	49

Inspiring the Next Generation

By 2030, we will have engaged 100,000 students

about using chemistry to create a fossil-free world.

At Avantium, we believe sustainable chemistry is something we

can all be excited about. We aim to use our position as a leader

in the field to excite the next generation of scientists, helping to

build a pipeline of motivated and talented people who are keen

to make a difference in the chemical sector. This approach also

helps grow awareness among young people – also as the

consumers of tomorrow –, in particular of the need to transition

away from a fossil-based, linear economy towards a

sustainable, circular future.

Building on our many years of student outreach and

engagement initiatives, we began to develop a more formalised

engagement programme in 2022. Avantium already had a

student engagement team in place, as well as more than 10

employees with direct engagement experience, several valuable

connections with major educational institutions and content

archives full of engagement materials. With this established, we

strengthened our tracking and management system by

updating our activity tracking form and sharing our master

tracker with the entire company on a quarterly basis. We have

also adjusted our outreach strategy, with the result that our

target team will now regularly discuss ideas for new activities

with ongoing and broader reach, such as videos. Our aim is to

accelerate our student engagement in 2023 and beyond,

through partnerships with subject matter organisations as well

as social media campaigns – including Chemie Is Leuk

(‘Chemistry Is Fun’) – to boost audience engagement.

We believe this approach will help us inspire the next

generation of scientists and engage with 100,000 students by

2030. In 2022, we made important progress towards this goal,

reaching almost 18,000 students via a range of different

activities.

Outreach and Engagement in 2022


Activity	Description of activity	# engaged
Open days	Large-scale events during which organisations open their doors to students (e.g., National Weekend of Science, Chemelot Open Day, Chemie Park Delfzijl Open Day)	3,093
Programmes with industry organisations and subject matter organisations	Wij Zijn Chemie ('We Are Chemistry') campaign by Centre for Youth Communication Chemistry (C3) and the Royal Association of the Dutch Chemical Industry (VNCI) where chemical industry employees provide (online) guest lectures in education	89
Social media including Avantium's website	Student-related posts on social media, videos and views of website pages	Website: 449 Videos: 1,071 LinkedIn: 12,344 Twitter: 311
Guest lectures	Avantium employees speak at a school or university	321
Site visits to Avantium offices and plants	Visits as part of a course, where students and teachers receive a lecture and tour of the laboratories or Pilot Plant	62
Interns	Students do their internship at Avantium	18


Activity	Description of activity	# engaged
RDS units	Units are manufactured and installed by Avantium R&D Solutions at universities for educational purposes	42
Other	Seminars, webinars, school projects, etc.	126

National Weekend of Science

In the Netherlands, the National Weekend of Science (Weekend

van de Wetenschap) takes place every year in early October.

Avantium has participated in events in Amsterdam since 2019,

with 2022 marking our first time taking part in Geleen. At

Amsterdam Science Park, we collaborated with the University of

Amsterdam, with our Senior Scientist Bart van den Bosch and

PhD student Noë Watson welcoming four groups of chemistry

enthusiasts – young and old – who learned about

environmentally friendly ways of using CO2 and were introduced

to our Volta Technology.

In Geleen, meanwhile, we joined forces with our Chemelot

neighbours for the Brightlands Chemelot Campus Open Day.

Our FDCA Pilot Plant was the only facility open for guided tours

during the event, hosting approximately 2,000 visitors in a single

day. As well as giving visitors an insight into our FDCA

production, we took the opportunity to showcase some exciting

examples of real-world PEF applications.


	50

To nurture and accelerate innovation, we also collaborate and

establish partnerships with universities and academic institutes.

This gives us access to a large pool of scientists, students and

academics, and presents opportunities for scouting new talent

for our company. Our Chief Technology Officer, Gert-Jan Gruter,

is Extraordinary Professor of Industrial Sustainable Chemistry at

the Van ’t Hoff Institute for Molecular Sciences, one of the eight

research institutes of the University of Amsterdam Faculty of

Science. He also leads Avantium’s Corporate Technology team,

which explores all aspects of polymer materials transitions,

acting as an early-stage pipeline of new ideas for existing and

future technologies. PhD students form the core of the team,

with eight working on their theses at Avantium in 2022 (2021:

nine) while contributing to the development of our technologies.

We are proud that all four of the PhD students who graduated

in 2022 are now Avantium employees.

Avantium also works with the University of Amsterdam’s

Psychology Research Institute, where PhD students in Social

Psychology research sustainable consumer behaviour.

Investigating the psychology of green consumer habits, such as

the public’s willingness to pay a premium for greener packaging,

is vital if we are to successfully commercialise new sustainable

materials and decouple our industry from fossil feedstocks.

Furthermore, Avantium regularly offers internships to university

or high-school students. In 2022, 18 students completed an

internship at Avantium.


	51

Our Leadership and Governance

At Avantium, we believe we have a

responsibility to make our voice heard.

We are determined advocates for a

sustainable chemical sector, engaging

with different stakeholders to deliver the

innovation and collaboration we need to

make the global transition a success.

Advocating for a Fossil-Free Industry

In order to advocate for changes that support the transition to

circular and sustainable chemicals and materials, Avantium

regularly gives interviews and publishes thought leadership

articles. In 2022, 46 interviews and thought leadership articles

were published by Avantium employees (2021: 43) about our

technologies and the way they address the climate crisis and

plastic waste pollution. We also advocated for change in the

chemical industry and called for partnerships and collaborations

to tackle the climate crisis. 27 papers by Avantium employees

were published in peer-reviewed journals and other publications

in 2022 (2021: 17), including the prestigious scientific journal

Nature Communications. Furthermore, we participated in 56

conferences, speaker events and webinars in 2022 (2021: 40),

giving presentations at around half of these events.

Avantium actively engages in and works through partnerships

and collaborations. We work with stakeholders across the

plastics value chain, for instance in industry associations such

as European BioPlastics (EUPB), Industry Table Northern

Netherlands and the Royal Association of the Dutch Chemical

Industry (VNCI). Avantium is also a member of several corporate

social responsibility initiatives and consortia in Europe, including

the Renewable Carbon Initiative, aiming to support and speed

up the transition from fossil to renewable carbon for all organic

chemicals and materials; the Bio-based Industries Consortium, a

non-profit organisation focused on strengthening the bio-based

industries sector in Europe; and CO2 Value Europe, the non-

profit association representing the carbon capture and

utilisation community in Europe.

Meanwhile, Avantium's CEO Tom van Aken is the representative

for small and medium enterprises in the Chemistry Top Team in

the Netherlands, aiming to stimulate good cooperation between

science, industry and government; Ed de Jong, our Vice

President Development, is a board member of and

representative for the chemical industry in the Top Consortium

for Knowledge and Innovation for the Biobased Economy in the

Netherlands; and, in 2022, our Communications Director

Caroline van Reedt Dortland has become chair of the board of

the Centre for Youth Communication Chemistry (C3), which

introduces chemistry and life sciences to children and young

people in the Netherlands.


	52

Stakeholder Engagement

Continuous stakeholder engagement, in which we embrace

open dialogue and knowledge-sharing, is important in an

innovation-driven industry and helps us to identify areas for

improvement.


Stakeholder	Form and frequency of dialogue	Topics discussed	Effect of dialogue on Avantium
Employees	•Social intranet (YIP) •Company meetings with all employees (every two months or when appropriate) •Leadership Team meetings (every two months or when appropriate) •Business unit town hall meetings (every two months or when appropriate) •Performance reviews (twice a year) •Training and development programmes (when appropriate) •Works Council (at least every two months or when appropriate) •Onboarding programme for new employees (when appropriate)	•Strategy •Business highlights and performance •Health and safety •Human Resources-related topics, including vitality •Diversity and inclusion •Training and development	With a continuous and open dialogue, we aim to help our employees embrace our values and familiarise themselves with our strategy and mission. We celebrate our successes and share our challenges and setbacks. We believe employee engagement is key to Avantium’s business, and that our success is built on the commitment, ambition and expertise of our people.
(Prospective) Partners and customers	•Business meetings and site visits, joint (research) projects and business development (when appropriate) •Phone and video calls, email exchanges and virtual tours by commercial or technical teams (daily) •Conferences, symposia and special events (when appropriate)	•Technologies, lead products and services •Business development and innovation •Customer support and quality •Technology licences •Environmental, social and governance (ESG) targets (e.g., circular business models, carbon footprint)	An integral part of Avantium’s strategy and our commercialisation roadmap is close collaboration with strong partners and customers throughout the entire value chain. We work with companies who share our values and want to build a better world for future generations. This helps us develop innovative solutions that deliver sustainability benefits to customers and beyond.
Shareholders	•Direct interaction with Investor Relations, CEO or CFO in (video and audio) calls, email exchanges, site visits (daily) •Annual General Meeting (annually) •Extraordinary General Meeting (when appropriate) •Capital Markets Day (Technology & Markets Day/Retail Investors Day) (annually or when appropriate) •Annual or half-year results presentation and press release (bi- annually) •Investor conferences and roadshows (when appropriate)	•Strategy, business activities and performance •Financial results •Funding options •Market outlook •Company roadmap and technology portfolio •Lead products and end-market •ESG performance •Board composition and remuneration	This group consist of current shareholders, potential investors and financial analysts. We aim to help them understand the (long-term) investment opportunities Avantium offers. With shareholders, we discuss our strategy and business model, financial performance and outlook, funding strategies and opportunities, as well as our sustainable solutions.

We communicate with our stakeholders through various

channels and at a variety of levels. Our methods of engagement

vary depending on the stakeholder, the key issues and the

purpose of engagement.

The following tables provide an overview of our main

stakeholder groups, the ways we communicate with them and

the topics most relevant to them.


	53


Stakeholder	Form and frequency of dialogue	Topics discussed	Effect of dialogue on Avantium
Suppliers and contractors	•Direct interaction via supplier account teams/procurement in calls, email exchanges, virtual meetings (daily) •Site visits at Avantium and/or at the supplier’s office (when appropriate)	•Products and technology •Innovation •Supply chain of renewable feedstock •Supplier performance and risk management •Health and safety •Compliance •Human rights and labour standards •Environmental topics, including biodiversity •IP/information security •Business continuity	We rely heavily on our supplier network. Our suppliers and contractors are integral as partners in the efficient and seamless scale-up of our technologies and in delivering on our customer commitments. We are committed to a responsible and sustainable supply chain, as laid out in our Sustainable Suppliers Code.
Governments and authorities	•(Pro)active dialogue with government, regulators and authorities and municipalities (when appropriate) •Safety and compliance reporting (when appropriate)	•Our technologies and lead products •Strengthening innovation in the industry and society where we operate •Compliance •Safety •Permitting	Avantium takes part in open dialogues with relevant governments and authorities. We have regular meetings with government bodies, authorities and local municipalities to discuss Avantium's business, opportunities and challenges, with the aim of strengthening our license to operate and generally promoting an environment conducive to investment and development, as well as to mitigate regulatory and political risk.
Society	Industry associations •Member conferences, regular meetings, round tables of relevant industry associations (when appropriate) Community, universities, media, NGOs and other •www.avantium.com (continuously) •Avantium's social media channels (continuously/when appropriate) •Press releases, interviews, engagement calls/meetings (when appropriate) •Collaboration with University of Amsterdam (continuously) •Community engagement programmes (when appropriate) •Company visits (when appropriate)	•Our technologies and lead products •Strengthening innovation in the industry, society and where we operate •Compliance •Circular economy •Community engagement •Our people •Exciting the next generation about renewable chemistry •Local developments	We align our business strategy and sustainability goals with the needs of our wider society, beyond our direct value chain. We also engage with students at schools and universities, sharing our expertise and exciting the next generation about sustainable and renewable chemistry.


	54

Intellectual Assets and Data Protection

Responsible, active management of our intellectual assets and

data, including those of employees, clients and suppliers, is of

vital importance to Avantium. We have a dedicated team to

protect our intellectual assets, with in-house patent attorneys

who proactively seek protection in accordance with the

intellectual asset strategy of each of our three business units.

These strategies are aligned with and support the overall

business strategy and ensure we can exploit and leverage the

value of our technologies and maximise their sustainable

impact.

Throughout our innovation process, we report technology

improvements, seek patent protection and actively safeguard

our freedom to operate to attain our strategic objectives – a

critical factor in Avantium’s success. To protect our proprietary

technologies and products, we have developed, and continue to

maintain and strengthen, an extensive patent portfolio.

Avantium has solid protection in place for its proprietary

technologies, with 156 patent families containing more than 900

patent rights. This not only helps safeguard Avantium’s leading

position as a technology development company and a

frontrunner in renewable chemistry, but also plays a pivotal role

in our licensing strategy. Avantium has an active intellectual

asset management programme, which includes regularly

reviewing competitors' patent publications to stay informed of

external developments and discussing new internal inventions

with Avantium technicians, filing patent applications as

appropriate. In order to expand our freedom to operate, we also

file third-party observations and lodge oppositions. Furthermore,

we investigate the potential opportunities of acquiring the right

to practise under the patent rights of third parties ('non-sertion').

Patents and Patent Applications in 2022


Business unit	Intellectual asset portfolio	Current number of patent families (incl. newly filed patent applications)3	Newly filed patent applications in 20224	Newly granted patents in Europe (EPO) or the USA in 2022	Newly reported inventions in 20225
Renewable Polymers	YXY Technology	65	6	16	15
Renewable Chemistries	Ray Technology	17	3	3	11
Renewable Chemistries	Dawn Technology	9	0	4	0
Renewable Chemistries	Volta Technology6	35	1	0	7
R&D Solutions	RDS7	11	0	0	10
Corporate Technology	Early stage	19	8	1	9
	Total	156	18	24	52


	55

3 A patent family is a collection of several national and/or regional patents and/or patent applications covering the same invention

4 A patent application is a request pending at a patent office for the grant of a patent for an invention. Once the patent application complies with the laws of the country or region concerned, a patent may be granted for the invention

5 Newly reported inventions may mature into a publication or patent application or may be kept as a trade secret

6 Including former Liquid Light patent families

7 Formerly called Avantium Catalysis

Data Management

Data and data systems are vital assets for Avantium. Having

improved our data systems, including our firewalls, in 2021, we

made adjustments to our information technology (IT) policies

and governance in 2022. We now have in place an IT

Committee, under the leadership of our CFO, which discusses

important IT changes, ensures proper IT project planning and

assesses new or changed regulations and their impact for

Avantium.

IT risk assessments are scheduled and conducted on an annual

basis, especially those relating to cyber security. The results of

our cyber security risk assessments are presented to the IT

Committee, alongside recommendations for the prioritisation of

implementing additional controls. The same Committee

establishes and documents cyber risk acceptance and tolerance

criteria and sets up processes for managing cyber risks.

Increasing our resilience to cybercrime remains an important

point of attention. In 2022, we started a cybersecurity

awareness programme, which continues to run in 2023. The

programme consists of a knowledge assessment, computer-

based trainings and tests. Based on the assessment results,

specific trainings are assigned to relevant target groups, from

individual IT users to all Avantium employees. The training

content covers a range of areas – including email phishing,

password strength, social engineering, physical security, safe

web browsing, travel security and social media – and is adjusted

to ever-changing threats.

In 2022, we suffered one IT security incident. An unknown and

unauthorised person accessed and used an Avantium email

account, sending a fake SharePoint link and inviting the

recipients to use their log-in credentials. The fake SharePoint

link was blocked by our firewall. The affected email account was

also blocked, and the password reset. As a result, no harm was

caused by this phishing attempt, but we immediately informed

our colleagues and spent time discussing this incident and the

lessons learnt in a company meeting. Our IT department has

now made multi-factor authentication a standard requirement

for all Avantium accounts.

We protect our data privacy in line with General Data Protection

Regulation (GDPR) requirements. In 2022, we did not receive

any substantiated complaints concerning breaches of customer

privacy or losses of customer data.

Climate-Related Regulation

We actively engage with governments and authorities to help

shape climate policy and plastic regulations. We do this both as

Avantium and in collaboration with industry organisations,

partners in grant consortia and other like-minded partners.

Corporate Partnerships

Partnerships are at the heart of our strategy. We are always

actively exploring partnerships across the entire value chain of

our technologies and have ongoing partnerships with industry

leaders and brand owners to develop, scale and commercialise

our technologies and make our innovations globally successful.

We collaborate with multiple partners within the value chain,

including feedstock providers looking to diversify their markets,

converters and chemical companies aiming to transition to

fossil-free chemicals and materials and consumer brands

seeking plant- or air-based solutions for packaging, textiles and

more.

Avantium works closely with other companies in various grant

consortia. One example is PEFerence, a consortium of

organisations aiming to replace a significant share of fossil-

based polyesters with 100% plant-based PEF. Members include,

among others, Carlsberg Group, LVMH, Henkel, LEGO and

Nestlé Waters.

Responsible Licensing

As part of its commercialisation strategy, Avantium is actively

exploring technology licensing opportunities for the future large-

scale production of its technologies. We incorporate sustainable

sourcing requirements into our license agreements.

Responsible Business Principles

The following areas are fundamental to embedding

responsibility into the core of our day-to-day business

operations. They are foundational pillars for our continued

success and we take them seriously:

•Five core values: These define what we stand for and how

we work with colleagues, customers and partners (see page

42).

•Code of Good Business Conduct: This Code is a reflection of

our beliefs and values as a business that acts with integrity

and respect for all its stakeholders. Our priority is to be a

successful business, which means investing in growth and

balancing short-term and long-term interests. We care

about our customers, our employees, our shareholders, our

business partners and the world we live in. Every employee

must therefore follow the letter and the spirit of this Code in

their day-to-day work. The Code covers a range of areas

including but not limited to integrity at work, age

discrimination, working conditions, equal opportunities,

conflicts of interest, privacy, financial practices,

discrimination, harassment and bullying and complaints

procedures.

Labour and Human Rights

As the driving force behind Avantium’s success, our people are

at the heart of everything we do. We therefore safeguard our

people's rights to health and safety as well as labour and

human rights. The following principles and policies help to

ensure this:

•Employee Conditions Handbook: This details the workplace

standards and rules of engagement at Avantium, including

our health and safety policy, complaints procedure,

performance and job descriptions, staff regulations (e.g.,

working hours, administrative matters), contract


	56

management, employee benefits, illness and absence,

pension arrangements and other relevant matters.

•Whistleblower Policy: This sets out the procedures under

which employees can and must report relevant irregularities,

including suspicions about bribery or unethical conduct.

•Employee Promotion Policy: This explains Avantium’s

approach and procedures in relation to promotions and

career growth, including consideration of background,

nationality, religion, race, gender, disability, sexual

orientation and age.

•Works Council Regulations: These explain the consultation

process in the case of significant reorganisations, mergers or

investments, or of changes in staff regulations.

•Diversity, Equity and Inclusion at Avantium: This document

explains the Avantium culture and values and highlights our

commitment to considering diversity and inclusion, such as

through equal opportunities, training and development, a

supportive working environment for different phases of life,

embedding diversity and inclusion in teams, the Code of

Good Business Conduct and the Whistleblower Policy.

•Sustainable Supplier Code: This code confirms that

Avantium operates under Dutch law, which prohibits child or

forced labour, and that Avantium's suppliers are also

required not to use child labour (as defined by ILO

Conventions 138 and 182) or the forced or compulsory

labour of both permanent and contracted workers (as

defined by ILO Conventions 29 and 105).

•QHSE Corporate Policy: This describes how Avantium

manages risks in line with its Safety First philosophy and its

obligations to comply with laws and regulations. Other

procedures and work instructions provide further detail.

•Golden Safety Rules: We strive to be an accident- and

incident-free workplace. All our employees commit to

Avantium’s Golden Safety Rules.

Ethics

We uphold high standards in matters of business ethics, such as

bribery, fraud and anti-corruption. Our Code of Good Business

Conduct covers ethical business practices in a wide range of

areas. Avantium also ensures that its agreements and other

engagement documentation with business partners include

appropriate provisions on money laundering and required

actions or countermeasures. In protection of its proprietary and

innovative technologies, it enters, where necessary, into Mutual

Confidentiality and Material Transfer Agreement when

processing and sharing confidential information and material

with third parties.

At every meeting of the Audit Committee, Avantium's

Compliance Officer gives an update to the members on fraud

and irregularities, including whistleblowing cases. In 2022, there

were no confirmed incidents of corruption, no legal actions

taken against anti-competitive behaviour or anti-trust and no

incidents of discrimination reported.

Transparency

We are transparent about our technologies, products and

processes, and have a number of mechanisms for enabling and

ensuring this transparency:

•Bilateral Contacts Policy: This covers contact and

information-sharing with shareholders.

•Life cycle assessments (LCAs): These provide transparency

about the impact of our products over their whole lifetime.

We believe not only that it is crucial for us to be open about

this information to our stakeholders, but we that LCAs

should be carried out as standard throughout our industry

(see page 34).

Governance and Accountability

Avantium’s corporate governance framework is based on the

requirements of the Dutch Civil Code, the Dutch Corporate

Governance Code, the company’s Articles of Association of 14

March 2017, the applicable securities laws and the regulations

concerning the Management Board and the Supervisory Board.

More information on how Avantium is governed can be found in

the Corporate Governance chapter on page 106. Documents

relating to good corporate governance are available on

Avantium's website and include the company’s Articles of

Association, Supervisory Board Terms of Reference and

regulations governing the activities of the Audit,

Industrialisation, Nomination and Remuneration Committees.


	57

Financial Performance in 2022

Income Statement

Revenue


in millions of €	2022	2021	% change
R&D Solutions	11.3	10.0	13%
Renewable Chemistries	0.1	0.5	-80%
Renewable Polymers	6.1	0.4	1461%
Unallocated	0.4	0.0	100%
Total revenue	17.8	10.9	63%

In 2022, Avantium's consolidated revenue increased by 63% from

€10.9 million in 2021 to €17.8 million. The increase in revenue was

driven by Avantium Renewable Polymers, mainly due to the initial

payment received from Origin Materials upon the initiation of non-

refundable technical due diligence activities performed in 2022.

Revenue in Avantium R&D Solutions increased by 13% owing to the

delivery of several components and modules for Flowrence®

systems and contract R&D projects during the year.

Other Income: Government Grants

Income from government grants showed an increase of 14%, from

€6.7 million in 2021 to €7.6 million in 2022. The higher grant

recognition was predominantly in Avantium Renewable Polymers

coming from previously awarded grant programmes (PEFerence,

IMPRESS and DEI+) and is related to the progress made in

connection with the start of the construction of the FDCA Flagship

Plant. Avantium successfully secured an additional grant in 2022, to

support its participation in the four-year R&D programme

WaterProof (for more details, see page 32).

EBITDA8


in millions of €	2022	2021	% change
R&D Solutions	2.3	2.7	-15%
Renewable Chemistries	-3.6	-2.3	57%
Renewable Polymers	-6.9	-7.1	-3%
Company overheads/other	-9.5	-9.4	1%
EBITDA	(17.7)	(16.1)	10%

In Avantium R&D Solutions, the decrease in EBITDA for 2022 related

to higher raw materials and contract costs in the market. In addition

and as planned, we have invested in additional FTE resulting in

higher employee benefit expenses.

The lower EBITDA of Avantium Renewable Chemistries was mainly

due to the lower income from government grants and lower

revenues.

Avantium Renewable Polymers showed an improved EBITDA in

2022 as a result of higher revenues, which were partly offset by an

increase in costs being expenditures incurred for Financial Close

which took place in March 2022, legal and advisory costs related to

the debt facility, and an increase in costs related to support

activities contracted from Avantium. For further information on the

EBITDA of Avantium's business segments, please refer to note 21 in

the financial statements.

Total EBITDA for Avantium decreased from €-16.1 million in 2021 to

€-17.7 million in 2022.

Operating Expenses


in millions of €	2022	2021	% change
Raw materials and contract costs	(3.8)	(3.0)	27%
Employee benefit expenses	(23.4)	(19.2)	22%
Office and housing expenses	(3.1)	(2.0)	55%
Patent, licence, legal and advisory expenses	(6.8)	(4.3)	58%
Laboratory expenses	(3.3)	(2.9)	14%
Advertising and representation expenses	(1.3)	(0.7)	86%
Other operating expenses	(1.5)	(1.6)	-6%
Net operating expenses	(43.1)	(33.7)	28%

Net operating expenses amounted to €43.1 million in 2022, an

increase of €9.5 million compared to 2021 (€33.7 million). This

increase is due to the planned increase in FTE during 2022, growth

in patent, license, legal and advisory costs, as well as the costs

related to the professional and advisory services in connection with

the Debt Facilities Agreement which are in place for the construction

of the FDCA Flagship Plant.


	58

8EBITDA is an important measurement of the company's financial performance before taking the cost of capital, depreciation and taxes into consideration. EBITDA margins provide a view of operational efficiency and enable a more accurate

and relevant comparison between peer companies.

Financial Position and Balance Sheet

Cash Position and Cash Flow

The total cash balance (including restricted cash9) as at 31

December 2022 was €64.9 million (31 December 2021: €34.9

million). During 2022, Avantium's cash position improved

substantially, which was the result of a number of extraordinary

transactions that took place during the year. Firstly, the successful

capital raise by means of a public offering of shares in Avantium

N.V. that took place in April 2022, which generated net proceeds of

€41.6 million. In addition, Avantium Renewable Polymers received a

€20.0 million cash investment from Bio Plastics Investment

Groningen for the shareholding it acquired in Avantium Renewable

Polymers at Financial Close. Furthermore, in November 2022, the

first drawdown on the Debt Facilities Agreement took place,

resulting in a €15.0 million increase in the cash position.

Avantium’s cash outflow increased by €28.5 million (excluding

extraordinary cash flows) to €46.6 million in 2022, versus €18.1

million in 2021. The cash outflow in 2022 mainly related to a €38.1

million increase of planned investments in capital expenditure for

the engineering and construction of the FDCA Flagship Plant.

The increased capital expenditure was partially compensated by a

net-positive movement of €17.0 million in working capital, compared

with €3.2 million in 2021. The positive movement in working capital

is the result of €18.7 million higher trade & other payables, partially

offset by €1.4 higher trade & other receivables. Trade & other

payables increased mainly due to the increased capital expenditure

for the construction of the FDCA Flagship Plant. Furthermore,

Avantium received pre-financing for a number of grant programmes

during 2022, for which most of the work is yet to be performed.

The following table provides an overview of the net cash outflow

during the year excluding extraordinary cash flows:


in millions of €	2022	2021	% change
EBITDA	(17.7)	(16.1)	10%
Lease payments	(1.9)	(1.7)	17%
Working capital movement	17.0	3.2	431%
Capital expenditures	(43.4)	(5.3)	725%
Interest and commitment fees from borrowings	(1.5)	—	100%
Other10	1.0	1.7	-44%
Net cash outflow	(46.6)	(18.1)	157%

Balance sheet

Total assets increased to €162.0 million (2021: €77.7 million), mainly

as a result of the planned investment if the FDCA Flagship Plant.

Total equity increased to €91.2 million (2021: €50.0 million) as a

result of the equity issuance in 2022.

Total borrowings increased to €12.9 million (2021: nil), which relates

to the first drawdown that took place under the Debt Facilities

agreement, which is measured at amortised cost.

Financial lease obligations increased to €11.9 million (2021: €10.7

million), and primarily consist of lease agreements on offices, plants

and laboratory facilities. This increase relates to new lease

agreements concluded as well as the extension of a number of

existing lease agreements during the year.

Non-current assets increased from €34.6 million in 2021 to €87.6

million in 2022, primarily as a result of the planned investment in the

construction of the FDCA Flagship Plant.


	59

9 For more information refer to note 10 of the consolidated financial statements.

10 Other includes non-cash movements related to share-based payments.

Going Concern

The financial statements have been prepared on a going

concern basis.

Avantium N.V. (“Avantium”)

Avantium is a leading technology company in renewable

chemistry, dedicated to developing and commercialising

breakthrough technologies for the production of chemicals from

renewable sources and circular plastic materials.

Avantium consists of three business segments in various stages

of maturity: Avantium R&D Solutions, Avantium Renewable

Polymers and Avantium Renewable Chemistries.

•Avantium R&D Solutions is our main revenue-generating

business unit, providing R&D solutions in the field of

sustainable chemistry and advanced catalyst testing

systems and services for international blue-chip players.

•Avantium Renewable Polymers commercialises its YXY®

Technology for the production of furandicarboxylic acid

(FDCA), which is a key ingredient for polyethylene furanoate

(PEF). PEF is a novel, 100% plant-based and fully recyclable

polymer with the potential to outperform today’s packaging

materials, such as plastic, glass and aluminium, especially in

the packaging, film and textile sectors, which are large and

growing markets. Avantium Renewable Polymers has

operated a Pilot Plant in Geleen since 2011 and is currently

constructing its FDCA Flagship Plant at the Chemie Park

Delfzijl site in Groningen, with a capacity of 5 kilotonnes per

annum. Handover from engineering to operations is

scheduled for the first quarter of 2024, after which we

expect to commission and start up the FDCA Flagship Plant

for the commercial production of FDCA and PEF.

•Avantium entered into a non-exclusive industrial technology

license agreement with Origin Materials, providing Origin

access to relevant parts of Avantium’s YXY® Technology to

enable the conversion of Origin-produced CMF

(chloromethylfurfural) derivatives into FDCA at a 100

kilotonnes per annum scale facility. This will enable the use

of second generation, renewable feedstocks for the

production of FDCA and PEF. Under the agreement,

Avantium is eligible to receive license fee milestone

payments and royalties for each metric ton of FDCA

produced at the licensed plant, in line with industry

practices. Avantium received a non-refundable payment of

€5 million in 2022. As a result of signing the industrial

technology license agreement, Origin Materials paid

Avantium a milestone fee of €7.5 million in February 2023.

•Avantium Renewable Chemistries develops, among other

technologies, plantMEG™ (mono-ethylene glycol), which is a

plant-based and competitive alternative for fossil-based

MEG. This is an important chemical building block for PET

and PEF resin, both of which are used in bottles and

packaging; fibres for clothing, furniture and the automotive

industry; and solvents and coolants. Avantium Renewable

Chemistries opened a demonstration plant in Delfzijl in

2019, which became fully operational in 2020. Avantium

plans to scale up the plantMEG™ technology in order to

subsequently implement its licensing business model.

Funding Avantium

Avantium's consolidated cash position was €64.9 million as at

31 December 2022. Excluding Avantium Renewable Polymers,

Avantium's cash position was €47.9 million. Included in the

€47.9 million is a €5.0 million cash deposit reserve held in the

name of Avantium N.V. for any potential future equity funding

needs during the construction of the FDCA Flagship Plant. It has

been agreed with the consortium of lenders that Avantium

Renewable Polymers B.V. will at all times have sufficient

funding available for the construction of the FDCA Flagship

Plant. The reserved cash is available to meet any funding

shortfall that may arise, and this is assessed together with the

Lenders upon each utilization of the debt facility. The cash in

this deposit account remains at all times in full control and

ownership of Avantium and its consolidated group.

With the funding obtained in April 2022 from the capital raise,

the material uncertainty that existed on the company's ability to

continue as a going concern was resolved in April 2022.

In addition to this, Avantium successfully secured debt financing

in December 2021, with the first and second drawdowns taking

place in November 2022 and January 2023, respectively.

Avantium Renewable Polymers expects to meet the conditions

precedent to drawdown on the loan in the upcoming period.

Avantium therefore expects to have sufficient cash flow to meet

the requirements for working capital, capital expenditures and

R&D for at least 12 months after the signing date of these

financial statements.

In light of the above, management has assessed the going

concern assumption on the basis of which Avantium’s financial

statements for 2022 have been prepared. The company

continues to adopt the going concern basis in preparing its

consolidated financial statements.

Due to Avantium’s nature as a technology development

company, with significant R&D expenses, and the need to invest

in scaling our novel technologies and to demonstrate them at

commercial scale, the company remains dependent on

attracting additional external funding, in particular as the

significant income growth from our own operations and

licensing is expected to be a few years away. Avantium

therefore continues to explore and evaluate various funding

options to strengthen its financial position.


	60

Investor Relations and Share Performance

Investor Relations

Avantium values its strong relationship with shareholders and

the broader investment community. We therefore set high

standards for our communications strategy to ensure that we

always provide transparent, accurate and relevant information

to our shareholders and investors, thereby helping them make

informed investment decisions. We are committed to providing

consistent and high-quality information to all stakeholders

timely and simultaneously to ensure that the public market also

has access to this information. To that end, Avantium regularly

updates the markets on our performance, the progress we are

making on the execution of our strategy and any other relevant

developments in the company, through press releases,

webcasts, conference calls and other forms of communication.

All activities comply with the rules and regulations of Euronext

Amsterdam and the Dutch Authority for the Financial Markets

(AFM). More information about investor relations can be found

on our website.

Dialogue with the Investment Community

To ensure we maintain an open and continuous dialogue with

the financial community, we engage with investors extensively

through (virtual) roadshows, investor meetings and conferences.

We also accommodate meeting requests from the financial

community wherever feasible and in adherence with all

applicable regulatory and confidentiality obligations.

When we publish our annual and half-yearly results, or when

we provide an update on significant strategic events, our Chief

Executive Officer (CEO) and Chief Financial Officer (CFO) host a

conference call for research analysts to discuss our recent

business and financial performance. We release transcripts of

these calls or other price-sensitive information on our website

immediately thereafter. We also use events to inform both retail

and institutional investors about our business and strategy.

Our policy is to have at least two representatives of Avantium

present at each conversation with shareholders and investors,

where possible. Bilateral meetings and conference calls with

analysts, investors and shareholders are not held during ‘closed

periods’, which normally start one month prior to the publication

of Avantium’s annual or half-yearly results. Our policy of holding

bilateral meetings with shareholders is set out in the Bilateral

Contact Policy that can be found in the corporate governance

section of our website.

In 2022, we participated in various investor conferences,

organised by BofAML, Berenberg, Bryan Garnier, Degroof

Petercam and Kepler Cheuvreux. We also organised various

Virtual Management Roadshows ahead of our capital increase

and following the release of our full-year and half-year results.

During these digital and physical investor meetings, our CEO,

CFO and Investor Relations team engaged with more than 155

UK, US, Benelux and European investors.

On 28 March 2022, we held a Retail Investor Day at our Pilot

Plant in Geleen. The main topics discussed were the realisation

of our FDCA Flagship Plant in Delfzijl and the partnerships

signed for Avantium Renewable Polymers, including the offtake

agreements on FDCA and PEF.

General Meetings of Shareholders

Avantium organises an Annual General Meeting of Shareholders

(AGM) once a year. Extraordinary General Meetings of

Shareholders (EGMs) are held as often as the Management

Board or Supervisory Board deems desirable. No later than 42

days before the AGM or EGM, Avantium announces the date

and the agenda and other meeting documents on the Investor

Relations section of its website.

On 25 January 2022, we held a virtual EGM to ask our

shareholders for approval on items related to the positive Final

Investment Decision (taken in December 2021) on the

construction of our FDCA Flagship Plant. Approval was granted

to authorise the Management Board to issue 2.84 million

warrants to a consortium of banks as part of a €90 million Debt

Facilities Agreement, as well as to authorise the Management

Board to issue €45 million in ordinary shares. The EGM also

adopted the amended Articles of Association to increase the

authorised share capital of Avantium to allow for the issuances

of ordinary shares. Moreover, the EGM approved the

appointment of Nils Björkman as member of the Supervisory

Board. More information about the meeting, including the

minutes, voting results and attendance, can be found on our

website.

On 18 May 2022, an AGM took place at Avantium's

headquarters in Amsterdam. Avantium’s shareholders granted

the requested approvals on all items on the agenda, including

the adoption of the 2021 financial statements and the re-

appointment of PricewaterhouseCoopers Accountants N.V. as

the external independent auditor of Avantium for the financial

year 2022. More information about the 2022 AGM, including the

minutes, voting results and attendance, can be found on our

website.

On 30 November 2022, we held another EGM at our

headquarters in Amsterdam. The agenda item was the

appointment of Boudewijn van Schaïk to the position of CFO

and member of the Management Board, effective 1 January

2023. Avantium’s shareholders unanimously endorsed the


	62

appointment of Boudewijn van Schaïk as CFO until the end of

the AGM in 2027.

Capital Raise

On 14 April 2022, Avantium successfully raised €45 million by

means of a public offering with a priority allocation for its

existing shareholders, a retail offering and a private placement.

The company issued 11,250,000 new shares, which represented

36% of the issued share capital. Pricing of the capital increase

was fixed at €4.00 per share, a 20% discount versus the

previous closing price. The net proceeds of the equity raise are

primarily used to further develop Avantium's Ray Technology™

and other technologies and to scale-up towards further

commercialisation via technology licensing, in addition to

general corporate purposes.

Listing and Indices

Avantium’s shares are listed and traded on both Euronext

Amsterdam and Euronext Brussels, under the ticker symbol

AVTX. Avantium is included in the Euronext Amsterdam

SmallCap Index (AScX), which consists of the 25 listed

companies ranked 51–75 (in terms of size) on Euronext

Amsterdam.

Share Capital and Voting Rights

At the end of 2022, the number of issued and outstanding

ordinary shares amounted to 42,605,893. The ordinary shares

issued and outstanding have equal voting rights (one share =

one vote).

Indicative Free Float

Avantium's free float amounted to approximately 55% at the

end of 2022.

Major Shareholders

The Dutch Financial Markets Supervision Act requires

Avantium’s investors who hold a (potential) capital and/or

voting interest of 3% or more to disclose this to the Netherlands

Authority for the Financial Markets (AFM). The AFM publishes

these major shareholding disclosures in its publicly available

Subsequent to the capital increase, APG Asset Management

N.V. remains our largest shareholder and currently holds up to

9.3% of our registered shares. We saw a significant increase in

shares held by retail shareholders represented by Wierda &

Partners Vermogensbeheer. Their holding currently represents c.

8.9% of our capital. During 2022, a number of shareholders

decreased their holding; among others, PMV Comm VA and

Capricorn Cleantech Fund, which lowered their stake to 5.3%

and 4.4% respectively.

In 2022, Avantium continued to have a large shareholder base

of Dutch and Belgian retail investors who actively trade

Avantium stock.


	63

Share Price Performance and Liquidity

Avantium’s share price ended the year 2022 at €3.65, a 32%

nominal decline versus 31 December 2021. Avantium's market

capitalisation on 31 December 2022 was €156 million,

compared to €169 million at year-end 2021. Companies with

above-average risk profiles such as Avantium underperformed

in the first half of 2022, as the war in Ukraine started, gas prices

surged and inflation increased significantly. Our share recovered

somewhat during the second half of the year, when the rate of

inflation growth decreased and developments regarding a

potential recession in the US and Europe were somewhat better

than expected.

Overall, we saw an increase in trading in our share over the

year. The total number of Avantium shares traded in 2022

amounted to circa 44.4 million shares (24.9 million shares in

2021). Velocity (the total number of shares traded divided by the

average number of shares issued) was 104.2%, compared to

79.6% in 2021. The start of the year was marked by a positive

decision by shareholders to build the world's first commercial

FDCA Flagship Plant, and we saw significant volumes traded on

the back of this news. We saw even higher volume during early

April, when we announced a €45 million capital raise. In

addition, we saw significant trading volumes after the

publication of the offtake agreements signed with Carlsberg in

June and AmBev and LMVH in August.

Analyst Recommendations

Avantium is currently covered by six analysts, one more than in

2021. The research recommendations at the end of 2022 were

as follows:


Bank	Target price	Recommendation
ABN AMRO - Oddo BHF	€5.20	Neutral
Berenberg	€4.40	Buy
Bryan Garnier	€10.00	Buy
ING	€10.95	Buy
Kepler Cheuvreux	€3.95	Hold
Degroof Petercam	€6.00	Buy

Dividend Policy

Avantium intends to retain any future profits for the foreseeable

future to expand the growth and development of its business.

Therefore, the company does not anticipate paying dividends to

its shareholders in the foreseeable future.


	64

Risk and Opportunity Management

Framework

Risk management is one of the key responsibilities of Avantium’s Management Team and Supervisory

Board. Avantium’s principal risks and uncertainties – whether under our control or not – are highly

dynamic and our assessment of and responses to them are critical to the company’s future business

and prospects. Avantium’s approach to risk management is framed by the ongoing challenge of

understanding the risks that the company is exposed to, the assessment of the company’s risk

appetite and how these risks change over time. This section provides an overview of Avantium’s Risk

and Control Framework and its effectiveness, in order to substantiate the Risk and Control Statement.

Risk Appetite

The Management Team determines Avantium’s risk appetite, monitors Avantium’s risk exposure and

sets the group-wide targets, which are reviewed on an ongoing basis. This process is supported and

supervised by the Supervisory Board. Avantium manages its risks and opportunities through the

boundaries defined by the risk appetite. Our risk appetite is broken down into the following risk areas:


Risk areas	Description of risk areas	Appetite
Strategy and Technology	Avantium develops new technologies through R&D projects, which are ‘industry disruptive’. In doing so, Avantium seeks to protect its proprietary technology. We aim to demonstrate scale-up of these technologies from laboratory scale via a Pilot Plant to a Flagship Plant, and subsequently to sell technology licenses. Funding these technologies is inherently risky.	High
Operations	Avantium’s operational risk is related to managing its laboratories and offices, starting up and operating its Pilot Plants and building and operating a Flagship Plant.	Low (Safety and Quality) Medium (Scale up technology)
Finance and Reporting	Avantium has a conservative financial strategy and strives to ensure that there are no reporting errors.	Low
Legal and Compliance	Avantium strives to avoid non-compliance with laws and regulations, which include health and safety regulations, competition law and environmental laws, and aims to limit any liability risk and to avoid fraud and bribery.	Low


	65

Control Environment

The control environment relates to our standards, processes, culture and structures.

At the top of Avantium, the Management Team sets the tone on the importance of internal risk control

by demonstrating its commitment to integrity and ethical values. Avantium’s Code of Good Business

Conduct supports this open culture.

Avantium is committed to adequate business controls and disciplined processes. Business controls are

incorporated into our automated systems as far as possible. The focus of financial reporting is on cash

management and bottom-up cash forecasting.

Avantium regularly reviews our insurable risk and our insurance policies together with our insurance

broker to determine whether we have sufficient coverage.

Assessments and Audits

The audit function supports Avantium in accomplishing its objectives by providing an independent and

professional view on its processes and controls.

The Management Board has decided, in consultation with the Audit Committee, that the company is

too small to install its own dedicated internal audit officer. Senior staff members in the company’s

Finance department are partially dedicated to risk and control management. The CFO oversees risk

management tasks. An update on risk management activities, findings, conclusions and actions are

provided to the Audit Committee, where priorities are set and guidance is provided to follow up on

identified areas of concern and to further enhance risk and control management. This internal audit

function is further supported by the relevant subject matter experts throughout the company.

The Technology Board is established and appointed by the Management Board to act in an advisory

capacity. The Technology Board provides advice and recommendations to the Management Board

regarding technology aspects of major investment decisions, as well as technology strategies the

company is pursuing or plans to implement, including risks and risk mitigation strategies.

The Industrialisation Committee of Avantium serves as its advisory and risk review forum for (i) the

company’s technology strategy, (ii) its industrialisation roadmaps and (iii) its technology portfolio, all as

determined, formulated and executed by the company’s Management Board and Management Team.

Professional external operational auditing is brought in on a case-by-case basis. Based on this

information and communication technology (ICT) audit, the company started the ICT Security Project in

2021. During 2022 the improvements identified were implemented. The improvements are focused on

technical improvements relating to ICT security and on awareness training for our employees.

In 2022, a risk assessment was performed by an external consultancy, to review and evaluate the

Internal Control Framework of the engineering, procurement and construction of the FDCA Flagship

Plant. There were findings identified but none were deemed critical. For the findings identified, an

action plan for areas of improvement has been agreed on. A specific action from the risk assessment

was to perform regular internal audits on the engineering, procurement and construction of the FDCA

Flagship Plant. Avantium is conducting periodic internal audits on the construction project of the

Flagship Plant in line with this recommendation.

In 2022, Avantium conducted an internal risk assessment on our Intellectual Property. Intellectual

Property is a core part of the business and it forms part of the most important assets of Avantium. The

objective of the internal audit performed on the Intellectual Property of Avantium was to identify the

risks relating to the licenses and patents of the business, the international exposure of Avantium and

create strategic interest and protection. There were multiple risks identified, but none of these risks

were deemed critical. An action plan for areas of improvement has been agreed for the outcomes

identified.

In light of the serious environmental situation we face, Avantium has assessed the possible effects of

climate change on its financial position. Based on the various positive developments in the

groundbreaking technologies we develop (as shared throughout this report), Avantium's management

has concluded that climate change does not negatively impact the financial position of the company.

On the contrary, climate change may accelerate the demand for alternative renewable materials and

provide further opportunities for Avantium.

Risk Assessment

The Management Team, the business units and the functional department heads are responsible for

their respective risk management; they perform an integral risk assessment at least once a year. These

assessments are supported and prepared by senior staff members of the Finance department. The risk

assessment for 2022 was presented and approved by the Management Team on 5 December 2022.

The 2023 risk plan was subsequently presented to the Audit Committee for endorsement on 8

December 2022.

These risk assessments identify risks, taking into account the likelihood of risks occurring and the

impact on the company, both reputational and financial. Mitigating actions are subsequently defined

and monitored. Material conclusions of these assessments are shared with and analysed by the Audit

Committee.


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Key Risks in 2022

The key risks identified are those that threaten the achievement of Avantium’s objectives.

Below is an overview of the key risk factors and mitigating actions. These risk factors are viewed by

Avantium’s Management Team as being the most relevant. The company has put in place mitigating

actions to counter the identified risks, which are categorised as follows: Strategy and Technology;

Operations; Finance and Reporting; and Legal and Compliance.


	67

Strategy and Technology


	Risks		Mitigating factors
	Financing •Avantium may fail to timely obtain the necessary equity, grants or debt funding, thereby preventing the company from continuing as a going concern, violating loan covenants, as well as preventing the company from executing its strategy, delivering on its commitments and obligations towards partners, lenders and in grant programmes, retaining key employees and meeting payment obligations. Capital markets can be very volatile and it is possible that this will make it difficult for Avantium to complete a successful capital raise at the appropriate and relevant time. •Not meeting certain loan conditions, overspending on capital expenditure and/or operational costs or having major project delays can result in higher funding needs, which can trigger bank guarantees, pledges, sales of assets at depressed prices, capital raises at steep discounts or even bankruptcy. •Avantium may not be able to refinance its loans when due at acceptable rates or may be unable to refinance at all. Failure to refinance can trigger bank guarantees, pledges, sales of assets at depressed prices, capital raises at steep discounts or even bankruptcy. •Avantium may continue to incur financial losses for the foreseeable future and may never achieve or sustain profitability.		•Executing commercial, technical and business plans by strict project management, adequate staffing, project governance and oversight. •Actively managing relationships with all relevant stakeholders, including existing shareholders, potential new investors/partners, financial institutions, customers and licensees. •Managing cash prudently, without jeopardising strategic progress or compromising the safety of employees or the security of the company's technologies and freedom to operate. •Constantly monitoring the national/international grant landscape for new opportunities. Actively monitoring commitments and compliance under grant programmes. •Managing portfolios and prioritising scarce resources. •Maintaining dialogue with banks and prospective investors and actively seeking strategic opportunities to raise new funding, and obtaining the flexibility to raise new equity when market conditions are optimal.
	Commercial validation of YXY® Technology •Avantium Renewable Polymers may not be able to commercialise its YXY® Technology through the production and sale of its products FDCA and PEF and may not be able to subsequently execute its licensing strategy. This may be due to a variety of factors, including unforeseen operational challenges for which Avantium Renewable Polymers is unable to develop a workable solution, that may result in significant additional costs or that could even prevent production of FDCA at sufficient volumes, in sufficient quality and in accordance with the planned timelines.		•Actively managing a sales funnel process targeting and engaging potential and future customers. •Implementing a market entrance strategy based on YXY Technology's value propositions in different applications and market segments. In time, when volumes increase and cost price decreases, additional segments become accessible. •Selling licenses for larger, industrial-scale plants. Due to economies of scale, operational excellence and continuous technology development, cost price will decrease further. •Developing a detailed marketing plan for licensing the technology. •Reviewing the commercial strategy and licensing model across the organisation to ensure that market, business and financial assumptions remain valid and robust.


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Strategy and Technology (continued)


	Risks		Mitigating factors
	Commercialise Ray Technology™ •Avantium Renewable Chemistries may not be able to commercialise its Ray Technology™ through the licensing and subsequent production and sale of plantMEG™ at the right specifications, quality, yields, cost price or volumes. •Technology challenges may delay the commercialisation.		•Optimising Avantium's Ray Technology™ and the production of plantMEG™ in the operating Pilot Plant in Delfzijl, the Netherlands. These activities assist in narrowing down and optimising operational parameters, such as yields and required capital expenditures. •Continuing to apply a strict portfolio management and stage-gate approach, to bring projects from ideation, via proof-of-principle, to a fully developed business case that forms the basis for finding like-minded partners and attracting funding. •Monitoring competitors' technologies and accommodate market entrance strategies for Ray Technology™. •Maintaining Avantium's strong connections with partners in the plantMEG™ value chain to de-risk the sourcing of feedstock, operations, financing and commercialisation of plantMEG™.
	Realisation of Ray Technology™ industrial scale factory in Europe •Incorporation of the joint venture may be delayed by factors outside Avantium's control. These factors could include items impacting the business case, such as a continued volatile geopolitical environment driving up energy and feedstock prices and inflation. •Incorporation of the joint venture may be delayed by factors outside Avantium's control. These factors could include items impacting the business case, such as a continued volatile geopolitical environment driving up energy prices and inflation. •Due to financing (grant and equity), setup of the joint venture or obtaining insufficient offtake agreements, the Ray Technology™ industrial scale factory may not be built. •A delay in the timeline of setting up the joint venture may cause difficulties in attracting partners.		•Co-operating with our announced joint venture partner on fine-tuning the business case, site selection and funding. •Negotiating offtake agreements with other parties, with a strict portfolio and pipeline approach. •Ensuring an organisational focus on the success of this joint venture; sufficient qualified resources to be made available for this key project. •Optimising and stabilising Avantium's Ray Technology™ and the production of plantMEG™ in the operating Pilot Plant in Delfzijl, the Netherlands. These activities assist in narrowing down the required capital expenditures. •Maintaining Avantium's strong connections with partners in the plantMEG™ value chain to de-risk the sourcing of feedstock, operations, financing and commercialisation of plantMEG™.
	Competition •The technologies Avantium is developing may not be competitive with other new emerging technologies and systems, which provide similar functions, lower cost or better solutions for potential customers. Avantium may not have full oversight of the technologies developed by competitors.		•Keeping up continuous technology development to maintain competitiveness. •Maintaining strong industry and business partner relationships. •Monitoring and analysing competitors through various sources (trade associations, universities, banks, etc.) and their IP filings. •Actively maintaining, protecting and expanding our current IP portfolio. •Warning potential violators on infringement and the consequences.


	69

Operations


	Risks		Mitigating factors
	Recruit, retain, develop and engage employees •Avantium may not be able to recruit and/or retain the highly skilled and engaged employees it needs, which will have a direct negative impact on reaching its strategic objectives and may result in business interruptions. •Avantium may not be able to find a desired balance between experience and age, which will have a direct negative impact on reaching its strategic objectives and may result in safety incidents and business interruption.		•Offering employees competitive compensation, the opportunity to make a direct business impact, autonomy, an inspiring culture and colleagues and a multitude of learning and development opportunities. •Using Avantium’s sustainability plan, titled Chain Reaction 2030, as a communication instrument for engaging new and existing talents. •Initiating learning workshops where people can share knowledge on a variety of topics to promote development. Avantium invests in skill development courses, management trainings and leadership programmes to enable the personal and professional growth of all our employees. •Securing equal opportunities and a feel-safe culture.
	Construction and operations of FDCA Flagship Plant •Due to operational, environmental and/or technical reasons, or in the context of geopolitical developments, Avantium Renewable Polymers may not be able to start up and operate its Flagship Plant for the production of FDCA on time, within budget or within specification. •If construction and commissioning of the FDCA Flagship Plant takes longer than expected, Avantium Renewable Polymers may not be able to meet the demands of (potential) customers, which may hamper and/or delay the commercialisation of FDCA and PEF products.		•Ensuring effective and strict project management; supervision, forecasting, risk and cost (spending) control; adequate resourcing including staffing; and quality of the engineering, procurement and construction (EPC) contract. Risk sharing is an important element, as foreseen in the EPC contract. •Ensuring, by hiring the appropriate expertise, that the FDCA Flagship Plant operates robustly after commissioning, covering all disciplines including staffing, systems, safety, logistics, regulations and finance. •Assessing risks: establishing and continuous monitoring an appropriate risk register. Managing construction and operation risks diligently together with constant monitoring of their potential influence on capital and operational expenditure.
	Intellectual property (IP) protection •Avantium may not be successful in adequately protecting its proprietary technology, products and processes, information, trade secrets and know-how.		•Actively maintaining, protecting and expanding Avantium’s IP portfolio in line with the company's IP strategy. •Actively monitoring and analysing worldwide trends and technology developments, especially with respect to the patent landscape. •Ensuring regular reviews with the technical teams and committees to consider proactively publishing or seeking patent protection. •Imposing IP assignment obligations for employees (and – if applicable – consultants, interns and secondees). •Maintaining adequate ICT and HR security and IP protection controls. •Providing recurring confidentiality and IP protection awareness training to Avantium staff.


	70

Operations (continued)


	Risks		Mitigating factors
	Freedom to operate •Avantium may not be able to ensure and maintain its required freedom to operate, and/or Avantium may inadvertently infringe the IP rights of third parties in its commercial operations. •Litigation or third-party claims of alleged IP infringement could require substantial time and money to resolve even if proven unfounded. •Unfavourable outcomes in these proceedings could limit Avantium in commercialising its lead technologies.		•Actively maintaining, protecting and expanding our current IP portfolio, for use, if required, in cross-licensing. •Publishing on technologies for which exclusivity is not desired. •Actively monitoring and analysing the patent landscape, reviewing competitors’ patent portfolios, lodging oppositions and filing third-party observations where appropriate.
	Food safety •Food safety is an important qualifier for many of our future customers. Inability to adhere to food contact materials regulations may negatively affect the company’s ultimate ability to sell products for the desired applications and to sell subsequent licenses under the company’s licensing strategy. Avantium may not be able to obtain or maintain the required food contact approvals worldwide.		•Continue the registering of Avantium products in accordance with applicable regulations and directives allowing the manufacture, distribution and use of these products in the jurisdictions of interest. •Co-operating closely with customers to ensure appropriate product application testing to support the food contact approvals and compliance investigations. Where possible, the company aims to obtain initial food contact approval with the material produced at pilot-plant phase and validate materials produced at commercial scale, which has been successful for Europe and now being applied for in other jurisdictions. •Retaining reputable consultants to support the food contact approval submission process in different jurisdictions of interest for our customers. •Following strict manufacturing protocols and quality assurance procedures in future operations to ensure that our products are fully in line with specifications according to regulations and customer needs. •Where possible, including liability caps in customer contracts. •Establishing product liability insurance to partially cover the risk.
	Cybersecurity and ICT •ICT security risks are changing rapidly. Not keeping ICT infrastructure, systems, procedures and user awareness up to date may result in security risks, business interruptions, information loss or leakage and reporting omissions.		•Implementing recommendations on Avantium’s ICT infrastructure and security. •Regularly updating ICT security and data governance policies. Actively managing compliance with these through preventive, monitoring and detection controls. •Providing compulsory training for employees and building their awareness on cybersecurity. •Making daily backups of our critical systems/servers and conducting regular restore tests. •Keeping hardware, software and firewall solutions and accessibility up to date. •Upgrading the enterprise resource planning system (planned as part of the scale-up of Avantium Renewable Polymers and the FDCA Flagship Plant project).
	Permits and regulations •Risks such as (i) new or changing regulations, (ii) non-compliance with Avantium’s current permits and/or environmental regulations applicable to an Avantium location or company sub-contractors or (iii) unwanted (unintentional) emissions and/or wastewater release.		•Regularly engaging with the relevant regulatory bodies and other stakeholders. •Diligently and swiftly acting upon observations and recommendations made during inspections by line management, staff, consultants and relevant regulatory bodies.


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Operations (continued)


	Risks		Mitigating factors
	Handling hazardous substances •Handling hazardous substances within Avantium's operations brings a risk of spills (environmental damage) and personal exposure (health damage). Inherent health, safety and environmental hazards in our operations and insufficient awareness of unsafe plant conditions can lead to injuries, casualties or environmental consequences and a (temporary) plant shutdown. •Construction of the FDCA Flagship Plant - if an accident occurs on-site, this may result in severe health consequences, severe personal trauma and prolonged shutdown of construction activities.		•Applying strict design criteria for the factories handling hazardous substances. Special attention for hazardous substances is given in our Chemical Hazard Assessments (CHA) wherefrom safe usage of these chemicals can be inducted into design as well as into prognoses operational activities. •Ensuring that for all planned operational activities hazard and risk assessments are performed, allowing for proper preventive and mitigating measures (Lines of Defence – LOD). •Implementing work method to ensure mechanical integrity of installations as well as installing systems and sensors to detect loss of containment (LOC) to prohibit incidents and accidents. •Prior to commencing any operational activities, carrying out thorough assessments in which all eventualities are considered and necessary preventive measures are implemented. •Maintaining a system to register all (hazardous) chemicals in process streams and inventories. •Giving every employee (and students, interns and hired specialists such as contractor and consultant) adequate safety training at the start of their engagement as well as a list of all standard operating policies that apply to their relevant activities and locations (laboratory/office/ plant), including the proper use of personal protective equipment. •Creating awareness for HSE issues through leadership engagement, training procedures, safety systems, internal memos, instructions and company meetings, as well as a continuous safety culture programme across the company. •Monthly reporting of all safety incidents and non-conformities (events) to monitor safety performance, maximise learnings by implementing corrective or preventive measures. •Implementation of an ISO-certified quality programme to promote standard operating procedures and working instructions for day-to-day operations whereby the content of training will improve and supervision for safe execution of extraordinary activities (such as maintenance and troubleshooting). •In recent years, the company hired specialists to improve on its knowledge regarding specifically occupational hygiene and process safety. For other fields, specialists like toxicologist will be hired on project base.
	Inflation and rising commodity costs, energy costs and supply chain •Failure to manage inflation and price increases in supply chain (subcontractors, materials and services) and insufficient access to qualified and cost-effective vendors may result in increased operational and financing cost which may adversely affect Avantium's business cases.		•Management will continue to closely monitor market developments. Through monitoring, the company may better anticipate and assess any impact on the relevant parts of its supply chain and business activities. •More frequent reviews of the budget and forecasts by management will provide insight on the effect of any increased cost on the company's supply chain and business. •Continuous review of alternatives for sourcing, actively negotiating applicable terms,(pro-) active and transparent dialogue with business partners, vendors and subcontractors. •For the construction of the FDCA Flagship Plant an EPC contract with Worley is in place, including a contractual sourcing strategy, actively managed by joint project teams, which includes.


	72

Operations (continued)


	Risks		Mitigating factors
	Sustainability - Feedstock •Avantium currently uses agricultural crops as feedstock for its YXY® Technology and Ray Technology™. The agricultural sector is one of the most sensitive sectors to climate change; it could impact crop growth and yields. This could lead to significant price increases. •Using agricultural crops as feedstock for the YXY® Technology and Ray Technology™ could have negative connotations amongst the general public.		•Avantium's technologies are feedstock flexible, allowing the company to switch to other second generation agricultural feedstock if necessary. •The impact originated by the plant-based feedstock could be further reduced by a switch to lignocellulosic feedstocks such as originating from second generation biomass. Avantium’s Dawn Technology™ converts non-food biomass into industrial sugars and lignin in order to help transition the chemicals and materials industries to non-fossil resources. Avantium runs a pilot biorefinery in Delfzijl, the Netherlands, based on the Dawn Technology™. The use of second generation feedstock is already tested at Avantium Renewable Polymers in the framework of the BBI-JU PEFerence project, and should confirm that the YXY® process can use second generation biomass when it becomes available at commercial volumes and pricing.
	Sustainability - Climate Change •Avantium's laboratories, offices and Pilot Plants depend on energy and aim to use sustainable energy in the future. Energy security issue is becoming increasingly important and demand for renewable energy is increasing. Access to reliable weather, water and climate information which might be hindered due to physical impacts of climate change is critical for access to sustainable energy. •Climate change - and the extreme weather events that accompany it - could disrupt global supply chains, exacerbate shortages, delay deliveries and lead to higher prices.		•Avantium's business model and product designs aim to incorporate sustainability principles to be less dependent on conventional energy. The Delfzijl location is strategically chosen to promote access to variety of sustainable energy sources - wind energy, hydrogen and other. •Continuous review of alternatives for sourcing, actively negotiating applicable terms,(pro-) active and transparent dialogue with business partners, vendors and subcontractors.


	73

Finance and Reporting


	Risks		Mitigating factors
	Interest rate •Increases in benchmark interest rates could lead to higher interest rate charges in case of debt instruments with a floating interest rate.		•If applicable and not cost prohibitive, the use of interest rate hedges prevent exposure to the costs already factored in the higher interest rate environment. After careful consideration of timing and circumstances, the company has not opted for entering into an interest rate hedge.
	Safeguarding Avantium's cash •The banks and/or financial institutions where Avantium deposits its cash may experience disruptions or defaults, leading to a situation where cash is no longer accessible to Avantium.		•Regularly checking the risk profiles of the financial institutions where we have deposited cash. •Following the company policy of not speculating with its cash reserves.
	IFRS and sustainability compliance •Non-compliance with International Financial Reporting Standards (IFRS) and sustainability reporting requirements. Not informing our shareholders and other stakeholders in conformity with reporting might lead to a loss of trust, reputational damage, a declining share price and, possibly, legal claims.		•Maintaining corporate accounting policies and making them available across the company. Our control framework includes financial reporting controls for compliance with IFRS. •Using external expert advice if necessary. •Implementing a sustainability reporting roadmap. •Through timeline integration of standards and collection of data we are able keep up with the required sustainability disclosure and provide investors and other stakeholders with the information they need.
	Grant reporting •Non-compliance with internal process and external grant rules and regulations may result in a correction (at least) or pay-back of the full amount received (in the worst-case scenario) or missed opportunities under grant programmes.		•Maintaining grant policies and communicating them across the company. •Working actively to train employees on internal processes (e.g. time writing) and external regulations, including monitoring compliance on the processes.


	74

Legal and Compliance


	Risks		Mitigating factors
	New laws and regulations •New government laws, regulations or measures, including increased regulations on the production and use of sustainable versus oil-based products, may have a major impact on our business and financial position, and could lead to a threat to our activities.		•Monitoring and adapting to relevant (changes in) rules and regulations. •Maintaining a dialogue with authorities, where possible.
	Sanction regulation compliance •Avantium may unknowingly or unwilfully have partners, customers, agents, consultants or other company contacts in breach of sanctions regulations which could adversely affect our business.		•Continuing to adhere to (sanctions) laws and regulations, with Avantium’s policies, procedures and ethics codes prohibiting us from entering into business with sanctioned parties. •Using up-to-date sanctions-screening software tools for business relationships the company enters into.
	Bribery, corruption and money laundering •Avantium may be exposed to bribery, corruption and money laundering.		•Managing a stringent approach to bribery and corruption with internal controls, coordinated by the Finance and Legal teams. •Retaining an external, independent organisation to assist, where necessary, in monitoring interactions with suppliers, agents and distributors. •Including clauses on anti-bribery, corruption, anti-money laundering clauses and appropriate remedial actions in many different agreements the company enters into. •Avantium has a whistleblower procedure in place to report corruption, bribery and anti-money laundering. •Avantium has an Anti-Money Laundering, Anti-Bribery and Anti-Corruption Policy in place. •Avantium performs regular risk assessments on corruption, bribery and anti-money laundering and reports those assessments to the Audit Committee on a regular basis. •The Avantium Code of Business Conduct contains a specific procedure for sensitive transactions (e.g. gifts).
	Fraud •Avantium may be subject to fraudulent activities.		•Clearly setting the tone at the top that any fraud is not tolerated. •Implementing segregation of duties and other internal control activities. •Continuous awareness communication and training. •Encouraging employees to safely report any suspicion of non-compliance with our ethics code. Following a report, any potential violation will be investigated. The outcome may lead to disciplinary action, the severity of which is determined by the nature and circumstances of the incident. Impacts may include termination of employment. If necessary, the company takes additional action to prevent similar incidents in the future. •Using the processes described in the Whistleblower and Confidant policies. •Including clauses on fraud and appropriate remedial actions in many different agreements the company enters into.


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Legal and Compliance (continued)


	Risks		Mitigating factors
	Confidential information •An employee or former employee of Avantium or a third party may, intentionally or otherwise, disclose unauthorised confidential information belonging to Avantium, or confidential information received from a customer or business partner.		•Entering into a non-disclosure agreement (NDA) with each employee and where necessary with any third party (such as business partners, customers, suppliers and consultants), to cover the protection of the company’s confidential information. In most cases the company NDA template is used (governed by Dutch law). •Creating awareness and ensuring that employees understand their confidentiality obligations. Employees are educated during in-house training sessions on the handling of Avantium’s confidential information. •Making employees aware that it is important to strictly limit the disclosure of Avantium’s confidential information only to the particular third parties concerned. •Using the standard operating procedure policy stipulating how to handle confidential information (belonging either to Avantium or to a third party).
	Compliance with market abuse regulation •Avantium, or a (former) employee of Avantium, may fail to comply with market abuse regulations, and may misuse and/or disclose Avantium’s inside information (intentionally or unintentionally).		•Creating employee awareness around adherence to Avantium’s insider trading policy and legislation through training programmes and communication. •Establishing timely log files on classified information that will likely develop to become inside information. •Establishing and maintaining insider lists of Avantium employees who have access to and knowledge of insider information. •Having an appropriate meeting schedule (in terms of frequency) for the Disclosure Committee, which reports to the Management Board and Supervisory Board. •If applicable, notifying insiders, in a timely manner, about their obligations, creating explicit status acceptance. •Disclosing inside information to the market when appropriate.


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In-Control Statement

Avantium’s assessment is that there are no major failings in its internal risk management and control

systems in the reporting year.

It should be noted that the above does not imply that our systems and procedures provide certainty as

to the realisation of strategic, operational, compliance and reporting objectives, nor that they can

prevent all misstatements, inaccuracies, errors, fraud and non-compliance with laws and regulations.

On this basis, Avantium’s Management Board states that to the best of its knowledge:

•the Annual Report provides sufficient insight into the effectiveness of Avantium’s internal risk

management and control systems;

•the aforementioned risk management and control systems provide reasonable assurance that the

financial reporting does not contain any material inaccuracies; and

•based on the current state of affairs, financial reporting on a going concern basis is justified (refer

to going concern note).

In accordance with provision 1.4.3. of the Dutch Corporate Governance Code and Article 5:25c of the

Financial Supervision Act, the Management Board declares that, to the best of its knowledge:

•the sections in the Report of the Management Board as included in this report provide sufficient

insights into any deficiencies in the effectiveness of Avantium’s internal risk management and

control systems;

•the financial reporting systems provide reasonable assurance that Avantium’s financial reporting

does not contain any material errors;

•based on Avantium’s current state of affairs, it is justified that the financial reporting is prepared

on a going concern basis (refer to going concern note);

•the sections in the Report of the Management Board list those material risks and uncertainties

relevant to expectations regarding Avantium’s continuity for the period of 12 months after the

preparation of the Report of the Management Board;

•the financial statements as included in this report provide a true and fair view of the assets,

liabilities, financial position and results for the financial year of both Avantium and the group

companies included in the consolidation; and

•the sections in the Report of the Management Board provide a true and fair view of the situation

on the balance sheet date and the business development during the financial year of Avantium

and of our affiliated group companies included in the financial statements.

Amsterdam, 21 March 2023

Tom van AkenBoudewijn van Schaïk

Chief Executive OfficerChief Financial Officer


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Management Team

Tom van Aken (1970, Dutch)

Chief Executive Officer (CEO) and member of the

Management Board

•Joined Avantium in 2002

•Appointed CEO of Avantium in 2005

•Current term of appointment 2021–2025

Tom van Aken joined Avantium in 2002 as Vice President of

Business Development. In 2004, he became Vice President of

Global Marketing and Sales before being appointed Avantium’s

CEO in 2005. Prior to joining Avantium, Tom was Business

Development Director at DSM Fine Chemicals. He earned a

master’s degree in Chemistry from the University of Utrecht (the

Netherlands).

Ancillary positions

•Chair of the Supervisory Board for Plantics B.V.

•Member of Top Team Chemistry.NL (SME representative)

•Member of the Board of Directors TKI Green Chemistry &

Circularity

•Chair of the Supervisory Board TKI BBE (Biobased Economy)

Bart Welten (1960, Dutch)

Chief Financial Officer (CFO) and member of the

Management Board

•Joined Avantium in 2020

•Appointed CFO of Avantium in 2020

•Term of appointment 2020–2022

Bart Welten served as Avantium’s CFO until 31 December 2022.

Before joining Avantium, Bart was CFO of Centrient

Pharmaceuticals (formerly a joint venture between DSM and

Sinochem) in Singapore. Before leaving Centrient, he oversaw

the sale of the company to Bain Capital. Prior to this, he was

CFO of DSM Resins and DSM Anti-Infectives. Bart holds a Law

degree from Leiden University (the Netherlands) and an MBA

from Boston College (USA).

Ancillary positions

Member of the Supervisory Board for Sanquin

Boudewijn van Schaïk (1979, Dutch)

Chief Financial Officer (CFO) and member of the

Management Board

•Joined Avantium in 2023

•Appointed CFO of Avantium in 2023

•Current term of appointment 2023–2027

Boudewijn van Schaïk joined Avantium as CFO on 1 January

2023. Prior to this, he served as Corporate Finance Director, and

held other senior roles in Treasury, Strategy and M&A, at SBM

Offshore (2013–2022). Other previous roles include various

senior finance positions at NIBC Bank, ABN AMRO Bank, Main

Corporate Finance and Alexander Forbes Financial Services.

Boudewijn holds a Business Science degree (Accounting and

Corporate Finance) from the University of Cape Town (South

Africa).

Ancillary positions

None


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Gert-Jan Gruter (1963, Dutch)

Chief Technology Officer (CTO)

•Joined Avantium in 2000

•Appointed CTO of Avantium in 2004

Gert-Jan Gruter has been Avantium’s CTO since 2004, before

which he was responsible for setting up the Chemicals Service

Business (2000–2004) and was a Group Leader in New Catalyst

Research at DSM (1993–2000). Gert-Jan holds a master's

degree in Organic Chemistry and a PhD in Organometallic

Chemistry & Catalysis from the Vrije Universiteit in Amsterdam

(both in the Netherlands). He is the inventor on more than 100

patents and was elected CTO of the Year Europe in 2014.

Ancillary positions

•Professor of Industrial Sustainable Chemistry at the

University of Amsterdam

•Visiting Professor at Chulalongkorn University Bangkok,

Thailand.

Carmen Portocarero (1967, Dutch)

General Counsel

•Joined Avantium in 2012

•Appointed General Counsel in 2012

Carmen Portocarero joined Avantium in 2012. Prior to this,

Carmen held various corporate legal positions, including during

more than 17 years at US telecommunications company AT&T.

She holds a master's degree in Law from the Catholic University

of Nijmegen (the Netherlands) and completed various law

programmes at Harvard University to obtain her US

qualifications.

Ancillary positions

None

Steven Olivier (1964, Dutch)

Managing Director Avantium R&D Solutions

•Joined Avantium in 2015

•Appointed Managing Director of Avantium R&D Solutions in

2015

Steven Olivier joined Avantium in 2015 as Managing Director of

the Avantium R&D Solutions business unit, which was known as

Avantium Catalysis until 2022. Prior to joining Avantium, Steven

worked at Albemarle (2005–2014) and AkzoNobel (1994–2004)

in a range of senior executive and commercial roles in the

catalyst industry. From 2011 to 2013, he was a representative

director of Nippon Ketjen (Japan). He holds a master’s degree in

Chemistry from Leiden University (the Netherlands).

Ancillary positions

None


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Bas Blom (1964, Dutch)

Managing Director Avantium Renewable Polymers

•Joined Avantium in 2021

•Appointed Managing Director of Avantium Renewable

Polymers in 2021

Bas Blom has been Managing Director of the Avantium

Renewable Polymers business unit since 2021. Prior to joining

Avantium, Bas held various P&L and commercial leadership

roles in global listed companies such as GE, SABIC and Renewi,

where he focused on profitable growth in engineering plastics

and sustainable products. Bas holds a master’s degree in

Aerospace Engineering from Delft University of Technology (the

Netherlands) as well as an MBA in Information Management

from Business School Netherlands and is a GE Certified

SixSigma Master Black Belt.

Ancillary positions

External Advisor at Bain Advisor Network

Yap Chie Cheung (1974, Dutch)

Managing Director Avantium Renewable Chemistries

•Joined Avantium in 2023

•Appointed Managing Director of Avantium Renewable

Chemistries in 2023

Prior to joining Avantium, Yap Chie Cheung was Global Business

Unit Director at the Nourish Division of International Flavors &

Fragrances (IFF) (2020–2023) and Director Bioindustrial and

Proteins Europe at Cargill (2015–2020). Between 1998 and

2015, she also held several marketing and business positions at

DSM, including in its Bio-based Products & Services division.

Yap Chie holds a master’s degree in Business Economics from

the Vrije Universiteit in Amsterdam (the Netherlands).

Ancillary positions

None


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Supervisory Board

Edwin Moses (1954, British)

Chair of the Supervisory Board

•Member of the Supervisory Board since 2019

•Chair of the Nomination Committee, Chair of the

Remuneration Committee, Member of the Audit Committee

•Current term of appointment 2019−2023

Background

Edwin Moses is a serial entrepreneur and value creator in

European life science companies. He has expertise in high-value

service provision to the pharmaceutical industry and in drug

discovery and development. His primary focus is on high-growth

businesses and change management, with 25 years of board-

level experience in more than 15 companies, mostly as Chair.

Ancillary positions

•Chair of the Supervisory Board Achilles Therapeutic plc

•Chair of the Supervisory Board LabGenius Ltd

•Member of the Advisory Board GIMV Life Sciences

Michelle Jou (1969, Taiwanese)

•Member of the Supervisory Board since 2020

•Member of the Nomination Committee, the Remuneration

Committee and the Industrialisation Committee

•Current term of appointment 2020−2024

Background

Michelle Jou serves as Chief Executive Officer at Castrol (part of

the BP group). Prior to this, she worked for around 19 years at

Covestro (formerly Bayer Material Science) in various senior

management positions in Asia and Europe. In her last role at

Covestro, she was President of Covestro’s global

Polycarbonates Segment (Shanghai). She holds a BA in French

from Fu-Jen University (Taiwan) and an MBA from the EMLYON

Business School (France).

Ancillary positions

CEO, Castrol (part of the BP group)

Margret Kleinsman (1963, Dutch)

•Member of the Supervisory Board since 2017

•Chair of the Audit Committee

•Current term of appointment 2021−2025

Background

Margret Kleinsman, CFO of Agrifirm, graduated from the

University of Twente and completed her post-doctoral research

at the Vrije Universiteit in Amsterdam (both in the Netherlands).

She was CFO of Holland Colours N.V. from 2014 until 2020.

Before this, she worked for AkzoNobel, with particular

responsibilities in the areas of chemicals, fibres and coatings,

and including two longer-term assignments in the USA.

Ancillary positions

CFO of Agrofirm


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Nils Björkman (1954, Swedish)

•Member of the Supervisory Board since 2022

•Chair of the Industrialisation Committee, Member of the

Nomination Committee, the Remuneration Committee

•Current term of appointment 2022−2026

Background

Nils Björkman worked for 33 years at food processing and

packaging solutions company Tetra Pak Group in a variety of

senior positions around the world, including Sweden, Canada,

the USA, the UK and Switzerland. His last position was

Executive Vice President of all commercial operations of the

Tetra Pak Group, which he held until his retirement in March

2015. He has worked as a non-executive board member for

several companies and holds an MBA from the Stockholm

School of Economics (Sweden).

Ancillary positions

None


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Report of the Supervisory Board

Introduction

This report explains how Avantium’s Supervisory Board fulfilled its responsibilities in 2022. The Report

of the Supervisory Board should be read in conjunction with the Corporate Governance section, which

provides information on the company’s corporate governance structure.

Composition, Diversity and Independence

The Supervisory Board currently consists of four members: Edwin Moses (Chair), Michelle Jou, Margret

Kleinsman and Nils Björkman. The biographies of the Supervisory Board members are available on the

preceding pages of this report and on the Avantium website.

In August 2021, the Supervisory Board proposed the appointment of Mr Nils Björkman as a member of

the Supervisory Board. At the Extraordinary General Meeting (EGM) held on 25 January 2022, Nils

Björkman was appointed as Supervisory Board member for a term of four years.

Two members of our Supervisory Board stepped down in 2022, with Cynthia Arnold and Trudy

Schoolenberg resigning for personal reasons in March 2022 and September 2022, respectively. In early

2023, Avantium nominated Dirk Van Meirvenne and Peter Williams to replace them. The Supervisory

Board will propose their appointments to the Annual General Meeting on 10 May 2023.

As described under Diversity & Inclusion in the Our People section, Avantium aspires to be an inclusive

and diverse company with an open and inspiring culture. This also applies to the composition of the

Supervisory Board. The Supervisory Board seeks to promote diversity among its members in terms of

age, gender, nationality, experience within the industry, background, skills, knowledge and insights. As

far as possible, we aim to create a balance among the Supervisory Board’s members where this

diversity is represented. The objective is to comply with the Supervisory Board Profile that can be

found on Avantium’s website. In 2022, the percentage of women on the Supervisory Board was 50%,

complying with our own Diversity, Equality and Inclusion target as described on page 45 as well as

with the target of at least 33% male or female Supervisory Board members prescribed by Dutch

legislation on gender balance.

Diversity Profile


Name	Year of birth	Nationality	Expertise and experience	Gender
E. Moses	1954	British and Belgian	•Scaling up innovative companies •Executive and non-executive experience •International experience	Male
M.B.B. Jou	1969	Taiwanese	•International executive experience, especially Asian region •Commercial experience from chemicals and plastics industries	Female
M.G. Kleinsman	1963	Dutch	•Financial expertise in chemicals and plastics industries •International experience	Female
N. Björkman	1954	Swedish	•International expertise in the packaging innovations business •International industry experience	Male

Retirement and Re-Election Schedule


Name	(Re-)appointment date	Year of possible re-election	End of final term
E. Moses	20 December 2019	2023	2031
M.B.B. Jou	14 May 2020	2024	2032
M.G. Kleinsman	19 May 2021	2025	2029
N. Björkman	25 January 2022	2026	2034

All members of the Supervisory Board are deemed independent. In the Supervisory Board’s opinion,

the composition of the Supervisory Board is such that the members can act critically and

independently from one another and from the Management Board, as stipulated in the Dutch


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Corporate Governance Code (principles 2.1.7 to 2.1.9). This means that the tasks of the Supervisory

Board as laid down in Avantium’s Articles of Association can be fulfilled, including providing the

Management Board with solicited and unsolicited advice and support.

In 2022, there was no actual or potential conflict of interest between Avantium and any Supervisory

Board member. In line with legislation and as part of the key control framework of the company,

members of the Supervisory Board (as well as the Management Board) are required to annually state

their related parties and transactions, if any, between these related parties and the company. It was

confirmed that no related-party transactions occurred in 2022, except for those cases in which

members of the Supervisory Board use a management company to invoice their related directors' fees

to Avantium.

Education and Self-Evaluation

Ongoing education is an important part of good governance. Members of the Supervisory Board

regularly visit Avantium's offices to meet with senior management and to develop deeper knowledge

of operations, opportunities and challenges. Direct, one-on-one contact between Supervisory Board

members and Management Team members generally follows naturally from discussions in the

meetings of the Supervisory Board. These discussions draw on the expertise of individual Supervisory

Board members, whose advice is sought on a wide range of specialist topics as required.

Each year, based upon the Dutch Corporate Governance Code and Section 2.2 of the Supervisory

Board Regulations of Avantium N.V., the Supervisory Board evaluates the composition, competence

and functioning of the Supervisory Board and its committees, the relationship between the Supervisory

Board and the Board of Management, its committees, its individual members, the chairs of both the

Supervisory Board and the committees, as well as the composition and functioning of the Board of

Management and its individual members. The 2022 evaluation was particularly centred around the

composition of the Supervisory Board after two of the Supervisory Board members had stepped down

in 2022. Another focus point was the composition of the Management Board, in response to the

announced retirement of Chief Financial Officer Bart Welten. The chairman of the Supervisory Board

held one-on-one meetings with all individual Supervisory Board members. The overall conclusion of

the self-assessment was that Avantium has a well-functioning Supervisory Board. The Supervisory

Board has an open and constructive relationship with the Management Board. It was decided to

recruit two new Supervisory Board members to replace Cynthia Arnold and Trudy Schoolenberg in

order to bring additional expertise, in particular in the area of chemical manufacturing, large

investment projects, technology and innovation management.

Supervisory Board Meetings in 2022

Meetings and Attendance

Supervisory Board meetings are held regularly to discuss the company’s achievements and plans, the

functioning and composition of the Supervisory Board and the performance of the Management Board.

In its oversight capacity, Avantium’s Supervisory Board has frequent communications with the

Management Board, both in and between Supervisory Board meetings. The Supervisory Board met

five times and had seven additional update calls in 2022. All meetings were also attended by the full

Management Board, apart from the closed sessions of the Supervisory Board under the agenda item

‘Supervisory Board only’. Additionally, the Supervisory Board had several informal dinners together

with the Management Board in 2022, following or in advance of the regular Supervisory Board

meetings.

The individual attendance per meeting can be found in the table below.


Name	Supervisory Board meeting	Audit Committee meeting	Industria- lisation Committee meeting	Nomination Committee meeting	Remuneration Committee meeting
E. Moses	12/12	5/5	6/6	10/10	3/3
C.A. Arnold11	1/12	n.a.	n.a.	n.a	n.a
M.B.B. Jou	12/12	n.a.	6/6	10/10	3/3
M.G. Kleinsman	11/12	5/5	n.a.	3/1012	n.a.
G.E. Schoolenberg13	4/12	2/5	n.a.	n.a.	n.a.
N. Björkman14	10/12	n.a.	6/6	10/10	3/3


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11 Cynthia Arnold stepped down from the Supervisory Board in March 2022.

12 Margret Kleinsman - in her role of chair of the Audit Committee - was extensively involved in the recruitment process of the new Chief Financial Officer and therefore attended the Nomination Committee meetings on several occasions.

13 Trudy Schoolenberg stepped down from the Supervisory Board in September 2022.

14 Nils Björkman was appointed as member of the Supervisory Board as per 25 January 2022; meetings that he attended as an observer in 2021 are taken into account.

Topics Discussed in 2022

The Supervisory Board meets at least five times a year and always prior to the publication of

Avantium’s annual and half-year results, which are discussed with the Management Board along with

related documents, such as the draft press release and the independent auditor's report on procedures

performed. These results and related documents are discussed by the Audit Committee prior to the

Supervisory Board meeting. The external independent auditor was present for the discussion of the

2022 Annual Report and accounts.

In addition to the standard agenda items for meetings, such as the development of financials and the

business performance throughout the year, the Supervisory Board discussed (with the Management

Board) the following topics in 2022:

•topics related to safety and the aftermath of the accident at the Ray demonstration plant in Delfzijl

in 2021;

•detailed progress reports on individual business units' results and progress on strategic milestones;

•the equity financing that took place in April 2022

•financial planning, equity and debt financing;

•new technology developments;

•the assessment of strategic and technological, operational, financial and legal risks and control

and compliance issues;

•Avantium’s sustainable value creation and capital allocation strategy;

•the preparation, evaluation and follow-up of the General Meetings;

•topics related to sustainability;

•the views of analysts and investors, as well as changes in the shareholder structure and base;

•initiatives related to public relations and thought leadership;

•senior leadership performance, organisational changes and senior management appointments;

•the budget for the second half of 2022 and the budget for 2023.

The following topics in particular were discussed extensively by the Supervisory Board.

Progress on the Construction of the FDCA Flagship Plant

The construction of the FDCA Flagship Plant and the related capital expenditures, staffing, governance

and timing was discussed at length in the Supervisory Board meetings in 2022. The discussion in the

Supervisory Board meetings on this topic was often prepared by one of the committees, in particular

the Industrialisation Committee.

High inflation and supply chain disruptions as a result of the war in Ukraine formed a difficult

backdrop to the start of the FDCA Flagship Plant construction in April 2022. The Supervisory Board

gave careful consideration to the impact thereof on the schedule and costs. The Supervisory Board of

Avantium N.V. also supervises, in its capacity as Supervisory Board to Avantium Renewable Polymers’

major shareholder, the business of Avantium Renewable Polymers B.V. and in particular the

engineering, construction and commissioning of the FDCA Flagship Plant. It therefore received reports

on the findings of the meetings of the Project Oversight Board and the Shareholders' Committee of

Avantium Renewable Polymers (details on the governance of Avantium Renewable Polymers B.V. can

be found in Corporate Governance on page 109). The Supervisory Board also discussed the risk

assessment, performed by an external consultant, to review and evaluate the Internal Control

Framework of the engineering, procurement and construction of the FDCA Flagship Plant. Avantium is

conducting periodic internal audits on the construction project of the FDCA Flagship Plant, the

outcomes of which are also shared with Supervisory Board.

Equity Capital Raise

The Supervisory Board and management also spent significant time on funding options and funding

scenarios based on short- and medium-term operational cashflow forecasts and required minimum

cash balances. In April 2022, Avantium raised €45 million through a public offering of new Avantium

shares - a great accomplishment given the situation of the financial markets in the first half of 2022. In

several meetings, the Supervisory Board extensively discussed and endorsed the proposed process,

structure and timelines of this capital raise. It approved the process of wall-crossing Avantium's

existing major shareholders on the back of other preparatory meetings held by Avantium and its

advisors after the full-year 2021 results publication in March 2022. It also discussed at length with the

Management Board the number of Offer Shares to be issued and the minimum issue price per Offer

Share.

Strategic Partnerships

In 2022, the Supervisory Board paid close attention to the negotiations with various strategic partners.

It monitored the progress on the commercial offtake agreements on FDCA and PEF and discussed and

mandated the key terms of those agreements. The Board also spent significant time monitoring and

discussing the negotiations with the US-based company Origin Materials in the second half of 2022

and the start of 2023. It mandated the key terms of the industrial technology license agreement, the

offtake agreement and ancillary arrangements with Origin Materials.

Avantium Renewable Chemistries Technologies

The Supervisory Board also engaged in important discussions with the Management Board about the

overall technology portfolio within Avantium Renewable Chemistries and the strategic choices for

each technology. The Supervisory Board closely monitored and approved developments regarding Ray

Technology™, Volta Technology, Dawn Technology™ and the developments within the Corporate

Technology team led by Gert-Jan Gruter.

Avantium R&D Solutions

In 2022, the Supervisory Board also discussed the strategic shift of Avantium Catalysis - now named

Avantium R&D Solutions - towards R&D in sustainable chemistry, in addition to providing advanced

catalysis R&D systems and services to customers worldwide. The Board weighted the risks and

opportunities of this strategic shift and endorsed the extended offering of Avantium R&D Solutions to

target emerging markets for sustainable chemistry.


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Safety

The Supervisory Board spent significant time discussing safety at Avantium, including the

implementation of various ISO (International Organization for Standardization) and NTA (Nederlandse

Technische Afspraak – Dutch Technical Agreement) standards at Avantium and the safety culture at

Avantium. In addition, the Supervisory Board discussed the aftermath of the accident that took place

at Avantium's demonstration plant in Delfzijl in 2021, to ensure that appropriate actions were

undertaken to avoid such an accident from happening again.

Stakeholder Management

The Supervisory Board takes an active interest in understanding Avantium’s stakeholders, their

perceptions and their positions on various topics related to the company's areas of business. The

Supervisory Board was informed of stakeholders’ positions by the Management Board, and also

collected such information through its own network.

Supervisory Board Committee Activities in 2022

The Supervisory Board divides its tasks among four committees: the Audit Committee, the

Industrialisation Committee, the Remuneration Committee and the Nomination Committee. These

Committees are responsible for preparing specific topics on which the respective committee makes

recommendations for decisions to be made in the plenary meetings of the Supervisory Board.

At the end of 2022, the composition of the Supervisory Board committees was as follows:


Audit Committee	Industrialisation Committee	Remuneration Committee	Nomination Committee
Margret Kleinsman (Chair)	Nils Björkman (Chair)	Edwin Moses (Chair)	Edwin Moses (Chair)
Edwin Moses	Michelle Jou	Michelle Jou	Michelle Jou
		Nils Björkman	Nils Björkman

Report of the Audit Committee

The Audit Committee supports the Supervisory Board in its responsibility to oversee Avantium’s

financing, financial reporting process and financial statements, and its internal control, risk

management and audit systems. In 2022, the Audit Committee met five times (2021: four) and held

two calls to approve the annual and half-year results. The meetings were also attended by the CEO,

the CFO, the Compliance Officer, the Head of Accounting and Reporting and the external independent

auditor. Minutes of all meetings were submitted to the Supervisory Board. At each meeting, the Audit

Committee discussed relevant financial reporting and accounting topics, including the impact of the

high inflation and supply chain disruptions as a result of the war in Ukraine on the 2022 financials and

operations of Avantium. Extensive time was spent on discussing the rapid changes in the requirements

with regard to reporting on ESG topics and the new Sustainability Reporting Directive.

The Audit Committee also discussed Risk Management targets and the findings of internal and

external risk assessments. This included an internal risk assessment on Avantium's Intellectual

Property (IP), as well as a risk assessment performed by an external consultancy, to review and

evaluate the Internal Control Framework of the engineering, procurement and construction of the

FDCA Flagship Plant. There were findings identified but none were deemed critical.

Moreover, the Audit Committee monitored the company's progress on risk identification and

implementation of risk mitigation actions and approved the 2023 Risk Planning. The Audit Committee

spent significant time on business ethics, such as bribery, fraud and anti-corruption. At every meeting

of the Audit Committee, Avantium's Compliance Officer gave an update on fraud and irregularities,

including whistleblowing cases. In 2022, there were no confirmed incidents of corruption, no legal

actions taken against anti-competitive behaviour or anti-trust and no incidents of discrimination

reported. IT Security and Cybercrime also remained an important topic in 2022.

Report of the Industrialisation Committee

The Industrialisation Committee serves as the Supervisory Board's advisory and risk review forum in

providing oversight of (i) the company's technology strategy; (ii) industrialisation roadmaps; and (iii)

technology portfolio, all as determined, formulated, and executed by the company's Management

Board and senior management. The Industrialisation Committee met six times in 2022 (2021: eight)

and discussed in detail the commercialisation strategy for YXY® Technology and the progress on the

construction of the FDCA Flagship Plant. The Industrialisation Committee primarily focussed in 2022

on the review of the development and execution of Avantium's technology portfolio and roadmap. For

Avantium YXY® Technology and Ray Technology™, the Industrialisation Committee thoroughly

reviewed the business case and financial model, application development, market outlook, competitive

landscape, the IP position, the technology and the licensing technology roadmap. The Committee also

prepared the discussion for the full Supervisory Board on the strategic shift for Avantium R&D

Solutions towards R&D for sustainable chemistry, in addition to its existing offering of advanced

catalysis R&D systems and services. Time was also spent on the business case, the IP position and

competitive landscape, the technological roadmap and business development of Volta Technology.

The Supervisory Board is grateful for the services of Cynthia Arnold, who continued to help the

Industrialisation Committee after stepping down from Avantium's Supervisory Board - her involvement

was governed by a consultancy agreement that expired at the end of 2022.

Report of the Remuneration Committee

The Remuneration Committee is responsible for advising the Supervisory Board on remuneration. One

of its standard duties is to assess whether the Management Board’s performance targets have been

achieved. The Remuneration Committee met three times in 2022 (2021: three) to discuss and

formulate proposals for the remuneration of the individual members of the Management Board. The


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Remuneration Committee presented its findings and proposals to the Supervisory Board, which then

finalised the performance appraisals and related remuneration of the individual Management Board

members.

Bart Welten retired as Chief Financial Officer and member of the Management Board on 31 December

2022. He did not receive a severance payment in connection with his retirement. The Remuneration

Committee discussed the compensation and benefits package for the new CFO Boudewijn van Schaïk.

Avantium and Boudewijn van Schaïk have entered into a management services agreement

(overeenkomst van opdracht) within the meaning of Article 7:400 of the Dutch Civil Code. The contents

of the Agreement are in line with the provisions of the prevailing Dutch Corporate Governance Code

and in line with Avantium’s remuneration policy. More information on the remuneration package of

Boudewijn van Schaïk can be found in the Remuneration Report on page 84.

Report of the Nomination Committee

The Nomination Committee’s standard duties include assessing the composition of the Supervisory

Board and the Management Board, evaluating the functioning of individual members, succession

planning and monitoring corporate governance. The meetings of the Nomination Committee are

attended by the CEO, except when issues relating to his performance and remuneration are discussed.

The Nomination Committee met ten times in 2022 (2021:three). This relatively high number was

necessary to extensively discuss and prepare for the succession of Chief Financial Officer Bart Welten,

who had notified Avantium of his intention to retire as CFO for personal reasons by the end of

2022.The Nomination Committee developed a detailed profile for this position and subsequently

interviewed multiple potential candidates in the course of 2022, The Committee worked closely with

the full Supervisory Board and in particular with the chair of the Audit Committee, the CEO and the

General Counsel on this appointment and consulted the Works Council as appropriate. The search

was supported by a well-respected executive search agency. In an Extraordinary General Meeting on

30 November 2022, the Supervisory Board was pleased to propose the appointment of Boudewijn van

Schaïk as CFO and member of the Management Board effective as of 1 January 2023.

The Nomination Committee was also involved in the recruitment process of the new Managing

Director for Avantium Renewable Chemistries. This process was facilitated by an external recruitment

agency. In November 2022, Avantium announced the appointment of Yap Chie Cheung as Managing

Director for the Renewable Chemistries business unit. Yap Chie joined Avantium on 1 February 2023.

Another key activity for the Nomination Committee in 2022 was selecting two new members for the

Supervisory Board, after Cynthia Arnold and Trudy Schoolenberg stepped down in March 2022 and

September 2022, respectively. Also in this search process, the Committee developed detailed profiles

for each of the positions and assessed all the candidates, working closely with the full Supervisory

Board and consulting with the Works Council as appropriate. In early 2023, Avantium nominated Dirk

Van Meirvenne and Peter Williams for appointment to the Supervisory Board. The Supervisory Board

will propose the appointments to the Annual General Meeting on 10 May 2023.

Report of the General Meetings of Shareholders 2022

At the Extraordinary General Meeting of Shareholders held on 25 January 2022, Avantium requested

approval from its shareholders to authorise the Management Board to issue 2.84 million warrants to a

consortium of banks as part of a €90 million debt financing package related to the construction of the

FDCA Flagship Plant. Avantium also requested approval to authorise the Management Board to issue

€45 million in ordinary shares. It was furthermore proposed to amend Avantium's Articles of

Association to increase the authorised share capital of Avantium to allow for the issuances of ordinary

shares. The General Meeting granted the requested approvals for all items, allowing Avantium to

execute all relevant documentation to complete the transaction (“Financial Close”) for the FDCA

Flagship Plant) and to start the construction. In this same General Meeting, Nils Björkman was

appointed to the Supervisory Board for a term of four years, ending at the close of the Annual General

Meeting to be held in 2026.

Following the Dutch government’s Temporary COVID-19 Justice and Safety Act (the ‘Emergency Act’),

Avantium decided to make the Extraordinary General Meeting on 25 January 2022 accessible to

shareholders only via electronic means, namely a live webcast hosted on Avantium’s website.

Shareholders could therefore attend the Extraordinary General Meeting online but were not granted

physical access; however, Avantium provided shareholders with the opportunity to participate

interactively and to exercise their shareholders’ rights in line with the Emergency Act.

As the COVID-19 measures were lifted in the spring of 2022, Avantium was able to organise the

Annual General Meeting on 18 May 2022 in person again, at Avantium's headquarters in Amsterdam.

At this General Meeting, the CEO and CFO reported on key business matters relating to Avantium in

2021. The General Meeting adopted the 2021 financial statements and gave positive advice on the

Remuneration Report 2021. The members of the Management Board were granted discharge of

liability for their management in 2021, and the members of the Supervisory Board for their supervision

thereof. The General Meeting also approved the proposal to authorise the Management Board to issue

up to 4% ordinary shares in connection with the company’s long-term incentive and share-based

compensation plans. PricewaterhouseCoopers Accountants N.V. (PwC) in the Netherlands was

appointed external independent auditor for the financial year 2022. As in previous years, the Chair of

the Audit Committee elaborated on the work of the Audit Committee in 2021, on the company's

collaboration with PwC and on other items relevant in the past year. The lead partner of PwC was

given the floor to elaborate on the audit procedure and the independent auditor's report for 2021.

In the Extraordinary General Meeting on 30 November 2022, also held in person at Avantium's

headquarters, Avantium's shareholders confirmed the appointment of Boudewijn van Schaïk for the

position of Chief Financial Officer and member of the Management Board, effective 1 January 2023

and until the end of the Annual General Meeting in 2027.


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Financial Statements 2022 and Profit Appropriation

The financial statements for the financial year 2022 were prepared by the Management Board in

compliance with Articles 20 and 21 of the Articles of Association. Attached to these statements was

the unqualified report from the independent auditor PwC. The financial statements and the outcome of

the external audit were discussed by the Audit Committee with the Management Board in the

presence of the external independent auditor.

The 2022 financial statements were endorsed by all Management Board and Supervisory Board

members and are, together with PwC’s independent auditor’s report, included in this Annual Report.

The Management Board will present the 2022 financial statements at the Annual General Meeting on

10 May 2023.

The Supervisory Board requests that the Annual General Meeting grants discharge to the members of

the Management Board and to the members of the Supervisory Board for their respective duties in

2022.

Gratitude

The Supervisory Board wishes to thank all Avantium employees for their outstanding contributions

and continuing dedication, enabling Avantium to accelerate the commercialisation of the plants-to-

plastics YXY® Technology as well as demonstrating the commercial potential of Avantium's other

proprietary technologies. The Supervisory Board is very grateful to the Management Board and senior

management of Avantium for their strong leadership and for their constructive dialogues with the

Supervisory Board.

Amsterdam, 21 March 2023

On behalf of the Supervisory Board,

Edwin Moses, Chair

Michelle Jou

Margret Kleinsman

Nils Björkman


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Remuneration Report 2022

Letter from the Chair of the Remuneration Committee

On behalf of the Remuneration Committee, I am pleased to present the 2022 Remuneration Report,

which provides a summary of the remuneration policies for the Board of Management and the

Supervisory Board. The following pages explain how these policies were applied in 2022.

In the sections below, I will reflect on the company performance in 2022 and the resulting pay

outcomes, as well as the Remuneration Committee's key activities in 2022 and the outlook for 2023.

2022 company performance and remuneration outcomes

Looking back, 2022 was a transformative year for Avantium in its journey from being solely an R&D

company to one that will have large-scale commercial operations:

Strategic progress

•Having received the support of Avantium’s shareholders at an Extraordinary General Meeting in

January 2022, Avantium reached Financial Close on 31 March 2022, paving the way for

construction of the FDCA Flagship Plant. On Financial Close, Avantium entered into a €90 million

Debt Facilities Agreement with a consortium of Dutch banks, comprising ABN AMRO Bank, ASN

Bank, ING Bank and Rabobank, as well as with the Dutch government-backed impact investment

fund Invest-NL. Each bank has committed €15 million, and Invest-NL has committed €30 million

under the Debt Facilities Agreement. In November 2022, the first drawdown of €15 million from

the Debt Facilities Agreement took place, and a further €15 million drawdown occurred in January

2023.

•In February 2023, Avantium entered into a partnership with Origin Materials to accelerate the

mass production of FDCA and PEF. The partnership includes a non-exclusive industrial technology

license agreement, providing Origin Materials access to relevant parts of Avantium’s YXY®

Technology to enable the conversion of Origin-produced CMF (chloromethylfurfural) derivatives

into FDCA at a 100 kilotonnes per annum scale facility. This will accelerate the mass production of

FDCA and PEF and enable the use of second generation, renewable feedstocks for the production

of FDCA and PEF. In support of the industrial technology license agreement, Origin Materials and

Avantium have also entered into a conditional offtake agreement for FDCA and PEF. Under the

terms of this overall transaction, Avantium received an upfront payment of €5 million in 2022.

•In the second quarter of 2022, Avantium restarted the Ray demonstration plant. With the plant

running successfully throughout the rest of the year, key data were gathered which help inform

engineering plans for the design of a Ray Technology™ Flagship Plant. This commercial plant is

envisaged to be constructed as part of a joint venture with sugar beet processor (and Ray

Technology™ feedstock supplier) Cosun Beet Company. The spike in prices of sugar, energy and

hydrogen in 2022 caused Avantium and Cosun Beet Company to closely re-examine the long-term

Ray business case, and the outcome is that both parties remain fully committed to moving

forward.

•For the Volta Technology, Avantium successfully operated two demonstration units in real-world

conditions and used a third to explore opportunities for producing carbon-negative plastic from

CO2.

•Avantium successfully raised €45 million from equity in April – an exceptional achievement given

the state of the financial markets.

Commercial progress

•In 2022 and early 2023, Avantium Renewable Polymers signed eight new FDCA and PEF offtake

agreements with major brand owners for a range of applications.

•Avantium Catalysis not only saw its revenues return to growth, but also underwent a

transformation of its own: now called Avantium R&D Solutions, this business unit adopted a new

growth strategy in 2022, focusing on sustainable chemistry solutions for customers.

Operational progress

•For Avantium Renewable Polymers, the start of the construction of the FDCA Flagship Plant has

been a significant milestone, providing the platform for the commercial launch of the plant-based,

recyclable and high-performance polymer PEF to customers worldwide and for the sale of

technology licenses for global deployment and monetisation. Despite the challenges posed by

global supply chain disruption and inflation during the year, the construction of the FDCA Flagship

Plant is progressing well. By the end of 2022, more than 700 piles had been driven into the ground,

and Avantium had completed civil works by installing the foundations, floors, piping, roads and

walls. In addition, a significant portion of the steel construction and storage tanks have already

been erected. After a thorough review of the project execution plans and the expected delivery and

installation of equipment, mechanical completion of the FDCA Flagship Plant is now expected in

the first quarter of 2024.


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ESG

•Avantium received the results of life-cycle assessments (LCAs) on Avantium’s plant-based mono-

ethylene glycol (plantMEG™) and plant-based mono-propylene glycol (plantMPG™),

demonstrating their significant sustainability benefits versus incumbents. Already in 2021, a LCA

for single-layer PEF and multilayer PET/PEF bottles showed a significant reduction in greenhouse

gas (GHG) emissions over the life cycle of the bottles compared to bottles made just from PET.

•Avantium started to report on Scope 1 (direct emissions from owned or controlled sources) and

Scope 2 emissions (indirect emissions from the generation of purchased electricity, steam, heating

and cooling). Avantium has established systems to track and report on Scope 3 emissions (indirect

emissions, occurring in the company's value chain) in the future.

•Avantium has set diversity, equality and inclusion targets for the next two years, against the 2021

baseline.

•In 2022, a product stewardship strategy was developed and launched, which sets out Avantium’s

responsibility for minimising its products’ environmental impact throughout their entire life cycle,

including end-of-life management. In 2022, Avantium also developed and launched a new

Sustainable Supplier Code.

•In 2022, Avantium began implementing various ISO (International Organization for

Standardization) and NTA (Nederlandse Technische Afspraak – Dutch Technical Agreement)

standards to align the occupational health & safety (OHS) policies and processes for our

laboratories and plants and thus create a single, company-wide OHS system. No work-related

fatalities or serious injuries were recorded in 2022.

The Remuneration Committee has carefully weighed all aspects of events in 2022, and has taken care

to ensure that their impact was reflected in a fair application of the remuneration policy and the

assessment of this year’s achievement of targets. The fact that Avantium made significant strategic,

commercial and operational progress in the delivery of its business plan, and was able to meet

important ESG targets, is reflected in the remuneration to be paid to the Management Board.

After careful consideration and following the assessment made by the Remuneration Committee on

the level of achievement for each of the goals for 2022, the Supervisory Board made the following

decisions:

•There was an average total company achievement of 83% of the 2022 targets.

•The 83% achievement assessment of the company’s 2022 targets will form the basis for the cash

incentive bonus payment to all staff, and will be used to determine the Management Board and

senior management’s annual performance related cash bonus component (Short-Term Incentive)

and the non-cash long term annual variable incentive component (Long-Term Incentive).

•The timing of the (cash) pay-out of the Bonus will be Q2 2023.

2022 Remuneration Committee focus areas

In 2022, the Remuneration Committee met three times. In addition to detailed discussions on the

corporate targets, and then assessment of their level of subsequent achievement, special attention

was paid to:

•Further refining the target-setting for non-financial key performance indicators (KPIs)

As per the remuneration policy, the performance measures represent a balanced mix of strategic,

commercial and operational performance targets, which together ensure a focus on both the

performance of the company in the short-term and on the attainment of its long-term strategic

objectives. For 2022, the Remuneration Committee added environmental, social and governance

(ESG) targets to the mix of performance measures.

•The Remuneration Committee has selected and determined the 2023 targets based on financial

performance (55%) and non-financial performance (45%). These targets are set taking into

account Avantium’s strategy and five-year business plan. As an important element thereof, these

goals aim to drive the company’s performance on ESG criteria. As a technology leader in

sustainable and circular chemicals and plastics, Avantium aims to meet ESG standards and report

in a transparent way on its progress in implementing its sustainability plan Chain Reaction 2030.

•Increasing level of disclosure

The Remuneration Committee also considered the extent to which the targets could be more

transparently communicated externally, without releasing commercially sensitive information.

•Dialogue with shareholders

In 2022, the company and the Remuneration Committee had an extensive dialogue with its major

shareholders and shareholder representative bodies to discuss Avantium’s remuneration policy

and Remuneration Report. We have carefully considered this feedback, as reflected in this 2022

Remuneration Report.

Looking forward

The Remuneration Committee had previously intended to propose a revision of Avantium’s

remuneration policy in 2023. After careful consideration, the Remuneration Committee concluded not

to endorse any revisions this year but take more time to complete a more thorough review during

2023. This will include any updates to address further developments in remuneration practices, and

take into consideration any adjustments resulting from remuneration benchmark assessments and

feedback received from shareholders. A revised remuneration policy will be submitted for approval at

the 2024 Annual General Meeting of Shareholders. We remain committed to remuneration practices

and policies that allow us to attract, retain and motivate high-performing employees while paying

close attention to appropriate alignment with all stakeholders.


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I look forward to discussing the policy and actual remuneration practices in the 2023 Annual General

Meeting of Shareholders, and will be happy to answer any questions you may have.

Edwin Moses

Chair of the Remuneration Committee


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Introduction

This Remuneration Report provides a summary of the remuneration policies of Avantium’s

Management Board and Supervisory Board, as well as an overview of the remuneration of the

members of the Management Board and the Supervisory Board paid in the financial year 2022. This

Remuneration Report is prepared in accordance with the relevant parts of Section 135, Book 2 of the

Dutch Civil Code, in line with the EU guidelines based on the EU Shareholders' Rights Directive. The

remuneration is furthermore determined in accordance with the remuneration policy adopted at the

Annual General Meeting on 14 May 2020, with an effective date of 1 January 2020. After approval by

the Supervisory Board, the Remuneration Report will be submitted to the General Meeting on 10 May

2023 for an advisory vote of our shareholders, in line with Section 135b subsection 2, Book 2 of the

Dutch Civil Code.

The Remuneration Report for the financial year 2021 was submitted to the Annual General Meeting of

2022 for an advisory vote and received a positive advisory vote. As part of our efforts to further

improve transparency, we have added the ex-post the ex-ante disclosure of the 2023 targets. We

have also provided further disclosure on the actual achievement levels. An exception is made in the

case of sensitive information where disclosure is not in the interests of the company or our

shareholders.

Remuneration Policy

Introduction and Governance of the Remuneration Policy

The last update of the remuneration policy was adopted by the General Meeting on 14 May 2020 and

became effective as per 1 January 2020.

The remuneration policy supports the purpose, long-term development and strategy of the company,

while aiming to respect all stakeholders’ requirements and maintaining an acceptable risk profile. The

Supervisory Board ensures that the policy and its implementation are linked to Avantium’s strategic

goals and objectives. The remuneration structure is aimed at achieving a balance between short-term

and long-term results and objectives, and is designed to encourage behaviour that is focused on long-

term value creation for all stakeholders, while ensuring that the highest standards of integrity and

good corporate governance are maintained. It is aimed at motivating the accomplishment of

outstanding achievements, using a combination of financial and non-financial performance measures.

At Avantium, sustainability is at the heart of the company’s strategy. Avantium’s vision of a fossil-free

world sits at the heart of all Avantium does, and Avantium’s technologies and products are designed

to revolutionise the chemical industry and reshape a broad range of high-value markets. Avantium’s

long-term and short-term sustainability objectives are increasingly linked to the company’s

remuneration structure.

The Remuneration Committee previously intended to propose a revision of Avantium’s remuneration

policy in 2023. After careful consideration, the Remuneration Committee concluded not to endorse any

revisions this year but take more time to complete a thorough review during 2023 and submit a

revised remuneration policy for approval at the 2024 Annual General Meeting of Shareholders.

Revisions this year would have primarily comprised adjustments resulting from the Committee’s due

consideration of the feedback received from shareholders on the Remuneration Report 2021 and the

remuneration policy for the members of the Management Board and the Supervisory Board. The

Remuneration Committee concluded that the adjusted approach in reporting, including its level of

reporting transparency on target setting and achievement, both retroactively for 2022 and in advance

for 2023, would be addressed in the Remuneration Report 2022. It furthermore concluded that during

2023, the company would continue to work on linking variable remuneration more directly to its

sustainability objectives. As a technology leader in sustainable and circular chemicals and plastics,

Avantium has to meet environmental, social and governance (ESG) standards and report in a

transparent way on its progress in implementing its sustainability plan Chain Reaction 2030.

The Remuneration Committee additionally concluded that given that the Management Board’s and

senior management’s remuneration continues to fall within a competitive range of approximately 20%

around the median market levels payable within the reference groups of industrial companies in our

sector, it is also not necessary to propose any adjustments at this time.

Based on feedback from shareholders on the remuneration policy and the Remuneration Report 2021,

as discussed during and after the 2022 Annual General Meeting, the Remuneration Committee

continued to assess Avantium’s need to be restrictive in the disclosure of the Management Board's

exact actual targets, both in advance and retrospectively. The Committee maintains its view that these

are strategically and commercially sensitive information. It however understands that more

transparency towards its external stakeholders is strongly desired and continues to give this due

consideration. This Remuneration Report includes the Remuneration Committee’s assessment of the

goal achievement level for 2022.

The 2023 targets represent a list of long- and short-term goals that are aligned with the company’s

business strategy. As an important element thereof, these goals should reflect the company’s ESG

criteria. In anticipation of a revised Remuneration Policy, the Remuneration Committee has selected

and determined the 2023 targets based on financial performance (55%) and non-financial

performance (45%). These targets are set taking into account Avantium’s strategy and five-year

business plan.

The Remuneration Committee maintains its view on the one-off fixed award of share options to

members of the Supervisory Board upon their appointment. The remuneration package for its

Supervisory Board members should enable Avantium to attract and retain diverse members with a

broad international background and the right balance of personal skills, competences and experience

required to oversee Avantium’s (execution of its) long-term strategy and performance. The one-off


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fixed award of share options contributes to Avantium’s long-term value creation and serves as a long-

term investment in Avantium, aiming to align the members’ respective interests with those of the other

shareholders. In order to assess more explicitly the shareholders’ perspective on this remuneration

element for Supervisory Board members, any such one-off fixed awards of share options to new

member of the Supervisory Board upon their appointment will be submitted for approval by the

General Meeting as a separate remuneration element from the annual fee.

The Supervisory Board is responsible for the execution of the remuneration policy. The Remuneration

Committee will continue to regularly assess the remuneration policy and advise the Supervisory Board

on the need for any changes.

The Remuneration Committee intends to submit an updated version of Avantium’s remuneration policy

for the Management Board and the Supervisory Board for approval during the 2024 Annual General

Meeting of Shareholders. This will include any updates to address further developments in

remuneration practices and take into consideration any adjustments resulting from remuneration

benchmark assessments and feedback received from shareholders during and prior to the General

Meeting.

External Perspective: Reference Group and Market Positioning

As with the remuneration philosophy for all Avantium employees, the remuneration of the

Management Board should be competitive compared with a relevant reference market. To define this

market, a reference group has been approved by the Supervisory Board, consisting of companies that

are selected on criteria such as geography, governance framework, scope and type of industry. In

principle, a benchmark is conducted at least once every four years. In the years without a new

benchmarking exercise, the Supervisory Board considers the appropriateness of any change of base

salary based on the market environment, as is also the case concerning salary adjustments for other

Avantium employees.

As a guiding principle, the total direct remuneration of the Management Board is set at or around the

median of the reference market.

In 2021, in line with the remuneration policy, the Supervisory Board conducted a remuneration

benchmark assessment of the market competitiveness of the current compensation package of the

members of the Management Board. The Supervisory Board carefully reviewed the reference group for

the benchmark assessment and amended it according to the above-mentioned criteria.

Geographically, the amended reference group consists primarily of listed western European companies

and, exceptionally, some non-European companies that are highly relevant from a talent market

perspective or industry perspective. Furthermore, the weighting of UK, US and Swiss companies does

not exceed 50% of the reference group. From a scope and type-of-industry point of view, the reference

group includes companies of comparable size that are primarily active in the (specialty) chemicals and

materials, and biotechnology industries.

The companies in the reference group for the Management Board remuneration benchmark

assessment performed in 2021 were:

•Accsys Technologies PLC (UK)

•Amyris Inc (US)

•BRAIN Biotechnology Research and Information Network AG (DE)

•Carbios SA (FR)

•Evolva Holding SA (CH)

•Global Bioenergies SA (FR)

•Holland Colours NV (NL)

•IBU-tec advanced materials AG (DE)

•Iofina PLC (UK)

•Isagro SpA (IT)

•Metabolic Explorer SA (FR)

•Nabaltec AG (DE)

•SICIT Group SpA (IT)

•Treatt PLC (UK)

•Versarien PLC (UK)

•Zotefoams PLC (UK)

The remuneration benchmark assessment was performed on the following compensation elements:

•Base salary

•Target short-term incentive (STI)

•Total cash compensation (TCC) – base salary plus STI

•Annualised expected value of the long-term incentive (LTI)

•Total direct compensation (TDC) – TCC plus LTI

The outcome of the 2021 benchmark resulted in the conclusion that for all of the compensation

elements, the Management Board remuneration for 2022 falls within a competitive range of +/-20%

around the median market levels payable within the reference group, which is in line with our

remuneration policy. During 2023, the Supervisory Board intends to conduct a remuneration

benchmark assessment of the market competitiveness of the current compensation package of the

members of the Management Board, in preparation for submitting the remuneration policy to the

Annual General Meeting for approval in 2024. As part thereof, the Supervisory Board will also review

the reference group for the benchmark assessment and will amend where necessary according to the

previously mentioned criteria.


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Management Board Remuneration 2022

The remuneration paid to the members of the Management Board in 2022 was based on Avantium’s

remuneration policy.

The remuneration of the members of the Management Board consists of the following components:

i)fixed annual base salary;

ii)short-term annual variable remuneration (in cash);

iii)long-term annual variable remuneration in the form of shares (LTIP) and options (employee stock

option plan, or ESOP); and

iv)allowance for pension and fringe benefits.

Avantium does not grant any personal loans, guarantees or advance payments to members of the

Management Board.

i) Fixed Annual Base Salary

The objective of the fixed annual base salary is to compensate for the performance of day-to-day

activities. The fixed annual base salary of the members of the Management Board is based on the level

of responsibility and performance and is set at or around the median of the remuneration levels

payable within the reference group.

In line with the remuneration policy, in 2022 the full year base salary of the CEO, Tom van Aken,

increased by 2.0% to an annual base salary of €273,179. The full year base salary for the CFO, Bart

Welten, increased by 2.1% to an annual base salary of €239,969.

ii) Short-Term Annual Variable Remuneration

The objective of the short-term annual variable remuneration is to ensure that the members of the

Management Board focus on realising their short-term operational objectives, leading to longer-term

value creation.

The bonus refers to the annual performance-related cash and non-cash incentive that is applicable to

the members of the Management Board and comprises (i) a cash component consisting of no more

than 50% of the aggregate bonus, if any, and (ii) a non-cash component equivalent to the cash

component which must be invested in Investment Shares (see under iii.a Long-Term Investment Plan

in the Form of Matching Shares).

The Supervisory Board has the discretionary power to adjust the incentive pay-out up- or downwards

if it feels that the outcome is unreasonable due to exceptional circumstances during the performance

period, such as by taking into account the long-term interests and sustainability of the company as a

whole. Scenario analyses of the possible outcomes of the variable remuneration components and their

effect on the remuneration of the Management Board are conducted. This power was not used for

adjustments of the incentive pay-out over 2022, nor was any remuneration recovered from present or

former Management Board members.

Performance Measures

The performance measures form a balanced mix of ESG, strategic, commercial and operational

performance targets, which together ensure a focus on both the performance of the company in the

short-term and the company's long-term strategic objectives. For each of the performance measures,

the Supervisory Board sets challenging, but realistic, targets and target levels.

The performance targets are specific and measurable and are formulated and communicated at the

beginning of each financial year (except for circumstances where the Supervisory Board considers

semi-annual target-setting more appropriate), although the Supervisory Board may adjust the targets

and their relative weighting if required by significantly changed strategic priorities in any given year.

Following a presentation by the Management Board, the Supervisory Board sets the targets, based on

progress on sustainability targets, commercial performance and operational performance, in relation to

Avantium’s strategy and long-term objectives, as set out in the remuneration policy

(www.avantium.com/corporate-governance/#remuneration). When the performance criteria are set,

the interests of all stakeholders are considered.

In order to achieve alignment in the remuneration structure of the Management Board and other

Avantium employees, a subset of the bonus performance measures, target-setting and pay-out

schemes as set out in the remuneration policy is applicable to Avantium employees.

The strategic progress targets are based on value-creation for shareholders and realising strategic

focus, including securing financing and strategic partnerships and achieving strategic milestones The

targets for commercial performance are based on securing strategic partnerships for the

commercialisation of technology programmes and reaching the commercialisation phase of the

different technology programmes (path from laboratory scale to demonstration scale and finally

commercialisation scale). The operational performance targets are based on and reaching the

operational milestones of the different technology programmes (path from laboratory scale to

demonstration scale and finally commercialisation scale). The ESG targets are based on the company’s

roadmap for execution of its sustainability plan Chain Reaction 2030.

Although Avantium maintains its view that detailed targets qualify as strategically and commercially

sensitive information, it understands that more transparency towards its external stakeholders is

strongly desired, both in advance of target setting and retrospectively, and will continue to give this

matter careful consideration.


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For the annual bonus 2022, the on-target bonus, i.e. the bonus in case of on-target performance, is

equal to 100% of (i) 70% of base salary for the CEO and (ii) 50% of base salary for the CFO. The

maximum bonus, i.e. the bonus in case of above-target performance, is equal to 150% of the on-target

bonus. If performance is below a pre-defined threshold level, no bonus will be paid out. The members

of the Management Board are, together with senior management, obligated to invest the total non-

cash component of their (net) bonus in Investment Shares. The non-cash component percentage of the

bonus is 50%. The cash component of the bonus may, at the discretion of the relevant member of the

Management Board, also be invested in investment shares.

The bonus pay-out levels are prorated upon the level of achievement of the aforementioned

performance targets.

For the annual bonus 2022, the performance targets and their relative weighting were set as follows:


Name	Weight factor	Target
T.B. van Aken	60%	Strategic
	15%	Commercial
	15%	Operational
	10%	ESG
B.J.J.V. Welten	40%	Strategic
	15%	Commercial
	35%	Operational
	10%	ESG

The Remuneration Committee has carefully weighed all aspects of this year’s events to ensure a fair

application of the remuneration policy and assessment of the 2022 goals. The fact that Avantium

made significant strategic, commercial and operational progress on the delivery of its business plan,

and was able to meet important ESG targets, is reflected in the remuneration to be paid to the

Management Board.

After careful consideration and following the proposal made by the Remuneration Committee on the

target achievements for each of the goals identified for 2022, the Supervisory Board made the

following decisions:

•There was an average total company achievement of 83% of the 2022 targets.

•The 83% achievement assessment of the company’s 2022 targets will form the basis for the cash

incentive bonus payment to all staff, and will be used to determine the Management Board and

senior management’s annual performance related cash bonus component (Short-Term Incentive)

and the non-cash long term annual variable incentive component (Long-Term Incentive).

•The timing of the (cash) pay-out of the Bonus will be Q2 2023.

In line with Avantium's performance in 2022, as set out in the section 'The Value We Created in 2022',

it was concluded that Strategic Differentiator targets were partially achieved, Commercial targets

were partially achieved and Operational Performance targets were partially achieved. This resulted in

the conclusion of the Supervisory Board that the average total company performance was 83%. The

total company performance represents an average achievement score, as members of Avantium’s

employees are paid 50% on basis of company achievements and 50% on the achievements of their

respective business unit, being more granular financial, commercial, operational and organisational

targets relevant for the specific business unit. For 2022, the scores of certain business units were lower

than the company targets, given that certain, specific goals in these business units were not achieved.

For that reason the average total company score of Avantium employees for 2022 was slightly lower

than for the members of the Management Board.

The table below sets out the performance per target. The Supervisory Board used upwards discretion

with respect to the operational target related to delivery of the EPC milestones for the FDCA Flagship

Plant (on target and on budget), which it deemed partially achieved, taking into account the

challenging conditions such as high inflation rates and the supply change challenges under which the

team performed.

With respect to the ESG target Chain Reaction 2030 implementation (Operations): calculate direct

GHG emissions from our Avantium Renewable Polymers FDCA Flagship Plant, Pilot Plants and

laboratory activities, and improve on the baseline: the partial achievement is a result of the completion

of the baseline calculations for the Pilot Plants and laboratories having been completed and

improvements were realised (please refer to the Avantium Annual Report on page 41). The

calculations for the FDCA Flagship Plant have not been completed yet.

The Management Board members are paid a bonus on the basis of achievements of the company on

ESG, strategic, operational and commercial goals. The targets for the CEO furthermore included

additional specific strategic targets, related to the strengthening of the Management Team for the next

phase of commercialisation. The overall average achievement of the CEO and CFO for performance

year 2022 amounts to 86.24% and 84.38% respectively of the maximum achievable bonus. Reference

is made to the table below.

The maximum achievable bonus for Tom van Aken is 70% (therefore resulting in a variable

remuneration for 2022 of 60% of his annual base salary). The maximum achievable bonus for Bart


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Welten is 50% (therefore resulting in a variable remuneration for 2022 of 21% of his annual base

salary).


Name	Weight factor	Target	Measured performance	Total performance in 2022
T.B. van Aken	60%	Strategic	58%	86%
	15%	Commercial	8%
	15%	Operational	13%
	10%	ESG	8%
B.J.J.V. Welten	40%	Strategic	38%	84%
	15%	Commercial	8%
	35%	Operational	31%
	10%	ESG	8%


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Performance measure	Objective	Target	Performance
Strategic	Secure financing and partnerships	1.Ensure that the group's business operations are timely, prudently and sufficiently funded, on the basis of obtaining the mandate from its shareholders to raise €45 million in equity capital and against satisfactory conditions. 2.Secure sustainable progress in the area of partnerships.	1.Achieved 2.Achieved
Strategic	Achieve strategic milestones	1.Timely execute Financial Close following Renewable Polymers' positive FID. 2.Meet strategic milestones in relation to the Cosun Beet Company joint venture partnering.	1.Achieved 2.Not achieved
Strategic	Business & Technology Planning	1.Meet strategic milestones in relation to Avantium's earlier-stage technologies.	1.Achieved
Commercial	Drive commercial performance	1.Meet strategic milestones on Renewable Polymers offtake commitments. 2.Meet Catalysis business performance parameters.	1.Achieved 2.Not achieved
Operational	Drive operational performance	1.Meet FDCA Flagship Plant EPC milestones and financials. 2.Meet Ray Technology™ operational milestones.	1.Partially achieved 2.Achieved
ESG	Chain Reaction 2030 implementation	1.Ecological: complete certified LCAs for YXY Technology (PEF) and Ray Technology™ (plantMEG™, plantMPG™). 2.Operations: calculate direct GHG emissions from our FDCA Flagship Plant, Pilot Plants and laboratory activities and improve on the baseline. 3.Supply chain: develop and initiate a supplier code of conduct and product stewardship plan. 4.People: establish a diversity and inclusion plan (including KPIs) and improve on the baseline.	1.Achieved 2.Partially achieved 3.Achieved 4.Achieved
ESG	Safety and health	1.Safety #1 organisation: 0 accidents using OSHA LTI classification. 2.Engage staff and minimise staff turnover <10% (FY).	1.Achieved 2.Achieved


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iii) Long-Term Variable Remuneration in the Form of Shares (LTIP) and Options

(ESOP)

On 5 October 2016, Avantium adopted the ESOP for all key employees, senior management and

members of the Management Board and the LTIP for the members of the Management Board and the

management team (collectively, the Incentive Plans). The ESOP furthermore allows for participation by

members of the Supervisory Board. The Incentive Plans encourage a long-term focus and alignment

with Avantium’s strategy.

iii.a) Long-Term Investment Plan in the Form of Matching Shares

The members of the Management Board are obligated to invest the total non-cash component of their

(net) bonus in shares to be delivered by the company (Investment Shares). The non-cash component

percentage is 50%. The cash component of the bonus may, at the discretion of the relevant member of

the Management Board, also be invested in Investment Shares. The Investment Shares are subject to a

retention period of five years following the investment date. After the end of the retention period,

Avantium will match the Investment Shares in a 1:1 ratio (Matching Shares); that is, one Matching

Share is granted for each Investment Share. These Matching Shares are delivered by the company at

the end of the five-year retention (lock-up) period of the Investment Shares. Only in the event that the

member of the Management Board is no longer engaged by the company at the end of the retention

period will the number of Matching Shares be decreased as provided for in the LTIP (depending on the

employment termination date and cause of leave, the number of Matching Shares will be decreased

pro rata parte, based on the number of full months of the Management Board member not being

engaged).

The objective of the plan is that Management Board members build an equity position in the company,

creating long-term value for, and so aligning their interests with, the company’s stakeholders.

Based on the feedback from shareholders on the remuneration policy and the Remuneration Report

2021, the Remuneration Committee considers to adjust the 1:1 ratio for Matching Shares, to arrive at a

mechanism in which Matching Shares are awarded conditionally subject to the achievement of the

company’s long-term strategic objectives upon which the Matching Shares will be released, including

the ability for the Supervisory Board to determine an upward adjustment of the 1:1 ratio when such

achievement exceeds the pre-determined objectives. Such will be reviewed in the context of the

Remuneration Policy to be submitted for approval to the General Meeting in 2024. The LTIP plan rules

will in such case need to be amended accordingly.

iii.b) Long-Term Variable Remuneration in the Form of Share Options (under the

ESOP)

On an annual basis, share options under the ESOP (Options) may be awarded to members of the

Management Board in accordance with the performance parameters pre-determined by the

Supervisory Board. These parameters are consistent with the performance measures applied for the

senior management and key employees of Avantium, to ensure optimal alignment with the employees

of Avantium who receive Options. Options are awarded within a pre-determined range, as stated in

the remuneration policy (Section 4.6), where the actual annual award is set by the Supervisory Board.

Based on the feedback from shareholders, the Remuneration Committee wishes to clarify that the pre-

determined performance parameters consist of a combination of (i) the company short-term and long-

term targets, (ii) the performance targets that are determined for each of Avantium’s technologies and

(iii) individual targets for the members of the Members of the Management Board.

The Options are fully vesting on the third anniversary following the date of the award. The exercise

period of the Options will be up to five years after the date of vesting. The Options vest at the end of a

three-year vesting term and not on an annual pro rata basis during this three-year vesting period. Only

in the event that the member of the Management Board is no longer employed by the company at the

date of vesting will the number of options be decreased as provided for in the ESOP (depending on the

employment termination date and cause of leave, the number of share options will be decreased pro

rata parte, based on the number of full months of the Management Board member not being engaged

during the three-year vesting period). Any required clarifications to the ESOP plan rules will be

reviewed in the context of the Remuneration Policy to be submitted for approval to the General

Meeting in 2024, and the ESOP plan rules will need to be amended accordingly.

iii.c) Adjustments to Variable Remuneration

In line with Dutch law, the variable remuneration of the members of the Management Board may be

reduced, or Management Board members may be obliged to repay (part of) their remuneration to the

company, if one of the circumstances as described in Section 5 (Management Board Remuneration:

Adjustments to Variable Remuneration) of the remuneration policy apply. In 2022, no adjustments

based upon this section of the remuneration policy were made.


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iv) Allowance for Pension and Fringe Benefits

The members of the Management Board are allowed to participate in Avantium’s pension plan,

available to all Avantium employees, whereby Avantium carries the employer’s contribution of the

pension contributions. The pension plan is based on a defined contribution system. Legislation in 2015

reduced the maximum pension accrued to 1.875% (from 2.15%) of the full pensionable salary. The

members of the Management Board can choose to build up the part of the pensionable salary above

€110,111 (2020) in a separate defined contribution plan. There are no arrangements for early

retirement.

The members of the Management Board are entitled to additional remuneration elements, such as

company car costs, travel expenses, social security costs and a contribution to health and disability

insurance, all in line with Avantium policies, plans and arrangements as applicable to Avantium’s

employees. The table hereafter provides a breakdown of the aggregate remuneration of the members

of the Management Board in 2022.

Employment Agreements and Severance Payments

The members of the Management Board continued their current employment agreements with

Avantium Support B.V., a subsidiary of the company. These agreements are for an indefinite period of

time and do not contain severance payment provisions. On 30 November 2022, the General Meeting

appointed Boudewijn van Schaïk as CFO with an effective date of 1 January 2023, pursuant to a

management services agreement (the Agreement), being a services agreement (overeenkomst van

opdracht) within the meaning of Article 7:400 of the Dutch Civil Code. This follows Article 2:132(3) of

the Dutch Civil Code, which stipulates that agreements concluded between a Dutch listed company

and a member of its management board cannot be qualified as an employment agreement.

The Supervisory Board may determine that a member of the Management Board is entitled to a

severance payment for the loss of income resulting from a non-voluntary termination as Management

Board member. In line with the Dutch Corporate Governance Code, any severance payment is limited

to one year’s base salary.


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Total Remuneration Received by Members of the Management Board


(In €1,000)	Fixed remuneration		Variable
Management Board member	Salary	Other benefits15	Short-term bonus16	Long-term award17	Post-employee benefits	Total remuneration	% of fixed remuneration	% of variable remuneration
T.B. van Aken
2022	273	24	165	71	20	553	57%	43%
2021	268	25	157	119	20	589	53%	47%
B.J.J.V. Welten
2022	240	24	51	21	28	364	80%	20%
2021	235	27	98	25	27	411	70%	30%
Total - 2022	513	48	215	92	48	917	66%	34%
Total - 2021	503	52	255	144	46	1,000	60%	40%

The total remuneration based on IFRS in 2022 for Tom van Aken amounted to €597,000 (2021:

€584,000) due to the share-based payment expenses of €115,000 recognised during the year (2021:

€114,000). The total remuneration based on IFRS in 2022 for Bart Welten amounted to €374,000

(2021: €439,000) due to the share-based payment expenses of €31,000 recognised during the year

(2021: €52,000).

Internal Pay Ratio

In setting the remuneration policy for the members of the Management Board, the Supervisory Board

also takes into account the internal pay ratio. The internal pay ratio between the average pay of

Avantium employees vis-à-vis the average pay of the CEO is calculated based on the average 2022

remuneration of all Avantium employees vis-à-vis the 2022 remuneration of the CEO. Since 2020, we

have also included pension contributions and long-term incentive components.

The 2022 pay ratio is 6:1 (2021: 6:1) for the CEO. The pay ratio 2022 and 2021 is based on the specific

guidance provided by the Monitoring Commissie Corporate Governance Code in December 2020 on

the calculation methodology of the pay ratio.18

The following table provides an overview of the remuneration of the members of the Management

Board compared with the average total remuneration of an Avantium employee (defined as gross

wages, holiday allowance, other benefits, pension, Bonus and long-term awards) and company

performance since the listing of the company’s shares in 2017.


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15 Other benefits mainly include contributions to social security plans and benefits in kind such as company cars, medical expenses and legal expenses.

16 Including the cash and non-cash part of the awarded bonus for the specific performance year.

17 Including the value of the various performance share-based plans that vested during the year. The value of the LTIP reward is calculated based on the number of matching shares that have vested and of the share price at the date of vesting.

The value of the ESOP reward is calculated based on the number of share options that have vested during the year and the net of the share price at vesting date less the exercise price.

18 Starting as of 1 January 2021, the value of the share-based component of the remuneration is determined at the time of assignment in accordance with the applicable rules under IFRS. Before 1 January 2021, the value of the share-based

component of the remuneration was determined based on the value of the options that vested during the year and the net of the share price at vesting date less the exercise price.


(In €1,000)	2022	% change	2021	% change	2020	% change	2019	% change	2018	% change	2017
Management Board member
T.B. van Aken	553	-6%	589	34%	440	2%	432	41%	306	-17%	368
B.J.J.V. Welten	364	-12%	411	35%	304	0%	—	0%	—	0%	—
F.C.H. Roerink (former CFO)	—	0%	—	0%	—	-100%	616	120%	280	-13%	321
Average employee salary	96	6%	91	12%	81	15%	70	0%	70	7%	66


	2022	% change	2021	% change	202019	% change	2019	% change	2018	% change	2017
Total company performance	83%	-1%	84%	100%	0%	-100%	65%	122%	29%	-66%	86%

The tables includes information on a five-year period as of 2017, the year Avantium became a publicly

traded company.

It is noted that Frank Roerink's severance payment is included in his total remuneration for the year

2019.

The average total company performance over 2022 was 83%. The total company performance

represents an average achievement score, as members of Avantium’s employees are paid 50% on

basis of company achievements (Strategic, Commercial, Operational and ESG target achievement) and

50% on the achievements of their respective business unit, being more granular financial, commercial,

operational and organisational targets relevant for the specific business unit.


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19 The company’s performance and achievement of the performance measures for 2020 was set to zero percent herein; as the Management Board and senior management decided to forfeit their respective annual cash bonus, the company

elected not to disclose the realised achievement of the 2020 performance targets.

Number of Investment Shares and Matching Shares Outstanding and Awarded to the Management Board


	The main conditions of share plans						Information regarding the reported financial year
Management Board member	Specification of plan	Performance period	Award date	Vesting date	End of retention period	Number of awards outstanding 1 January	Shares allocated during the year	Shares forfeited during the year	Shares vested during the year	Value of matching shares vested during the year in EUR20	Matching shares unvested as at 31 December	Shares subject to retention period as at 31 December	Matching shares vested as at 31 December
T.B. van Aken, CEO	LTIP- Investment shares	2017-2018	16/3/2018	16/3/2018	16/3/2023	7,441	—	—	—	—	—	7,441	—
		2019-2020	14/5/2020	14/5/2023	14/5/2025	15,365	—	—	—	—	—	15,365	—
		2021-2022	18/5/2022	18/5/2025	18/5/2025	—	20,630	—	—	—	—	20,630	—
	LTIP- Matching shares	n/a	16/3/2018	16/3/2021	16/3/2023	7,441	—	—	—	—	—	—	7,441
		n/a	14/5/2020	14/5/2023	14/5/2025	15,365	—	—	5,122	15,493	5,122	—	10,243
		n/a	18/5/2022	18/5/2025	18/5/2025	—	20,630	—	4,584	14,051	16,046	—	4,584
B.J.J.V. Welten, CFO	LTIP- Investment shares	2021-2022	18/5/2022	18/5/2025	18/5/2025	—	9,947	—	—	—	—	9,947	—
	LTIP- Matching shares	n/a	18/5/2022	18/5/2025	18/5/2025	—	9,947	(7,737)	2,210	6,775	—	—	2,210
F.C.H. Roerink, former CFO	LTIP- Investment shares	2017-2018	16/3/2018	16/3/2018	16/3/2023	5,789	—	—	—	—	—	5,789	—
	LTIP- Matching shares	n/a	16/3/2018	16/3/2021	16/3/2023	1,930	—	—	—	—	—	1,930	1,930
		Total Management Board members				45,612	61,154	(7,737)	11,917	36,319	21,167	53,383	24,478
		Total former Management Board members				7,719	—	—	—	—	—	7,719	1,930


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20 The value of matching shares vested during the year is expressed in EUR and is determined by the share price at vesting date.

Number of Options Outstanding and Awarded to the Management Board


	The main conditions of share option plans					Information regarding the reported financial year
Management Board member	Specification of plan	Award date	Vesting date	Exercise period	Exercise price of the option in EUR	Number of options outstanding as at 1 January	Share options granted during the year	Share options forfeited during the year	Share options vested during the year	Value of share options vested during the year21	Share options unvested as at 31 December	Share options vested as at 31 December
T.B. van Aken, CEO	ESOP	19/10/2006	19/10/2009	10 years	7.60	20,230	—	—	—	—	—	20,230
		1/10/2008	1/10/2011	10 years	0.10	20,657	—	—	—	—	—	20,657
		1/5/2009	1/5/2012	10 years	0.10	35,000	—	—	—	—	—	35,000
		1/5/2010	1/5/2013	10 years	0.10	29,770	—	—	—	—	—	29,770
		4/11/2010	4/11/2013	10 years	0.10	28,000	—	—	—	—	—	28,000
		30/11/2011	30/11/2014	10 years	0.10	135,000	—	—	—	—	—	135,000
		1/10/2015	15/3/2017	10 years	0.10	22,000	—	—	—	—	—	22,000
		1/10/2015	15/3/2017	10 years	9.80	7,500	—	—	—	—	—	7,500
		2/3/2017	15/3/2017	10 years	0.10	13,000	—	—	—	—	—	13,000
		2/3/2017	15/3/2017	10 years	9.80	18,000	—	—	—	—	—	18,000
		17/5/2017	17/5/2020	8 years	10.58	50,000	—	—	—	—	—	50,000
		28/3/2018	28/3/2021	8 years	5.34	50,000	—	—	—	—	—	50,000
		16/5/2019	16/5/2022	8 years	2.60	100,000	—	—	11,111	19,165	—	100,000
		14/5/2020	14/5/2023	8 years	3.59	50,000	—	—	16,667	19,237	5,556	44,444
		19/5/2021	19/5/2024	8 years	4.56	50,000	—	—	16,667	—	22,222	27,778
		18/5/2022	19/5/2025	8 years	3.07	—	50,000	—	11,111	3,111	38,889	11,111
B.J.J.V Welten, CFO	ESOP	14/5/2020	14/5/2023	8 years	3.59	50,000	—	(5,556)	16,667	19,237	—	44,444
		19/5/2021	19/5/2024	8 years	4.56	30,000	—	(13,333)	10,000	—	—	16,667
		18/5/2022	19/5/2025	8 years	3.07	—	30,000	(23,333)	6,667	1,867	—	6,667
		Total Management Board members				709,157	80,000	(42,222)	88,889	62,617	66,667	680,268

In 2022, 80,000 additional share options were granted to the Management Board. Boudewijn van

Schaïk (appointed by the General meeting on 30 November 2022, with an effective date of 1 January

2023) was awarded 50,000 share options on 30 December 2022 at an exercise price of €3.68 per

option. The amount of share options that vested during the year amounted to 33 options.

The share-based payment expenses of the Management Board of €146,000 comprise the part of the

share-based compensation (note 13) attributable to the share options granted in previous years.


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21 The value of share options vested during the year is expressed in EUR and is determined by the share price at vesting date less the exercise price.

Number of Options Outstanding and Awarded to Former Management Board

Member


	The main conditions of share option plans					Information regarding the reported financial year
Management Board member	Specification of plan	Award date	Vesting date	Exercise period	Exercise price of the option in EUR	Number of options outstanding as at 1 January	Share options exercised during the year	Share options forfeited during the year	Share options vested during the year	Value of share options exercised during the year22	Share options unvested as at 31 December	Share options vested as at 31 December
F.C.H. Roerink, former CFO	ESOP	16/5/2019	16/5/2022	8 years	2.60	13,333	—	—	—	—	—	13,333
		Total former Management Board members				13,333	—	—	—	—	—	13,333


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22 The value of share options exercised during the year is expressed in EUR and is determined by the share price at exercise date less the exercise price.

Management Board Remuneration 2023

The Remuneration Committee intended to propose a revision of Avantium’s remuneration policy in

2023. After careful consideration, the Remuneration Committee concluded not to endorse any

revisions this year but take more time to complete a more thorough review during 2023 and submit a

revised remuneration policy for approval at the Annual General Meeting of 2024. Revisions this year

would have primarily comprised adjustments resulting from the Committee’s due consideration to the

feedback received from shareholders on the Remuneration Report 2021 and the remuneration policy

for the members of the Management Board and the Supervisory Board. The Remuneration Committee

concluded that the adjusted approach in reporting, including its level of reporting transparency on

target setting and achievement, both retroactively for 2022 and in advance for 2023, may be

addressed in the Remuneration Report 2022. It furthermore concluded that during 2023, the company

is setting its next step in its journey to linking variable remuneration more directly to its sustainability

objectives. As a technology leader in sustainable and circular chemicals and plastics, Avantium has to

meet environmental, social and governance (ESG) standards and reports in a transparent way its

progress of implementing its Sustainability Plan Chain Reaction 2030.

The Remuneration Committee furthermore concluded that given that the Management Board’s and

senior management’s remuneration continues to fall within a competitive range of approximately 20%

around the median market levels payable within the reference groups of industrial companies in our

sector, it is also not required to propose any adjustments to the Remuneration Policy at this time.

For 2023, salary increases for the Management Board and senior management have not yet been

considered; such may be addressed in due course. Any such adjustment should not result in

significantly exceeding the median of the reference group, whereby the Supervisory Board is allowed

to apply a purchasing power adjustment during the applicable tenures (as opposed to applying those

only at the start of such tenures). During the years in which a benchmarking exercise is not performed,

the Supervisory Board continues to be informed on any executive remuneration developments and

receives market survey reports generally made available for the relevant industry and similarly

situated companies.

These targets are only being disclosed to the extent they are not share-price or competition sensitive.

For this reason, some of these targets are reflected with a generic description.

The maximum achievable bonus for Tom van Aken is 70% of his annual base salary. The maximum

achievable bonus for Boudewijn van Schaïk is 50% of his annual base salary.


Performance measure	CEO	CFO
Strategic	30%	30%
Commercial	23%	23%
Operational	38%	38%
ESG	10%	10%
Total performance	100%	100%


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Performance measure	Objective	Target	Weight Management Board	Financial	Non-Financial
ESG	Safety & Health	1.Zero accidents and Zero loss of containments as per Avantium’s newly approved incident classification. 2.Achieve Ecological, Operations, Suppliers and People targets (smart ESG targets have been defined)	5.0%	0.0%	5.0%
ESG	Chain Reaction 2030 implementation	1.Define and plan how technologies impact carbon emission reduction, calculate and report reductions achieved 2.Map scope 1, 2 and 3 emissions and implement ISO certified management systems (ISO 45001) 3.Commitment of key suppliers for Code of Conduct 4.Implement organization code of business conduct; implement KPI for diversity and improve on baseline	5.0%	0.0%	5.0%
Strategic	Portfolio & Team	1.Reach engineering stage gate decision as next step of Ray Technology™ commercialisation 2.Determine and execute technology portfolio changes in line with company strategy 3.Strengthening of executive team to prepare company for next phase of commercialisation	30.0%	0.0%	30.0%
Commercial	Drive commercial performance	1.Ensure full capacity loading for FDCA Flagship Plant 2.Avantium Renewable Polymers: enter into licensing deal in line with company strategy 3.Avantium R&D Solutions: execution of growth strategy (to be measured in revenues) 4.Avantium Renewable Chemistries: enter into Ray Technology™ licensing deal in line with company strategy 5.Attract industrial partners for commercialisation of Volta technology	22.5%	22.5%	0.0%
Operational	Drive financial performance	1.Keep the FDCA Flagship Plant construction on track in terms of costs and schedule 2.Realise significant increase of topline compared to 2022 3.Ensure the company is sufficiently funded for execution of strategy 4.Control of expenses and company cash flows	32.5%	32.5%	0.0%
Operational	Drive organizational performance	1.Staff retention: ensure staff turnover below 10% 2.Recruitment: hiring of staff for FDCA Flagship Plant and Avantium R&D Solutions growth strategy	5.0%	0.0%	5.0%
Total			100.0%	55.0%	45.0%

Lower threshold: for 2023, the Supervisory Board has set the lower performance threshold, at which the award of short-term annual variable remuneration (and subsequent ability to become eligible for

participation in the long term variable remuneration (in the form of shares (LTIP) and share options (ESOP)) as follows: if (i) performance score of financial targets is below 20%; and (ii) the performance score on

non-financial targets is below 15%, there will be no variable remuneration pay-out to the Management Board.


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Supervisory Board Remuneration 2022

Remuneration Policy for the Supervisory Board

The remuneration of the members of the Supervisory Board consists of the following components:

i.annual fee;

ii.travel expenses and other expenses; and

iii.one-off fixed awards of share options (“Options”, pursuant to ESOP) related to the member’s

appointment.

i) Annual Fee

The remuneration policy determines the annual (gross) fees for each position of the Supervisory Board,

separated into membership and chairpersonship of the Supervisory Board and membership and

chairpersonship of a committee.

In line with the remuneration policy, the members of the Supervisory Board received the following

annual (gross) fees:

•Membership of the Supervisory Board: €40,000;

•Chairpersonship of the Supervisory Board: €35,000 (additional);

•Membership of a committee of the Supervisory Board: €5,000 (per committee); and

•Chairpersonship of the Audit Committee of the Supervisory Board: €5,000 (additional).

The table hereafter provides a breakdown of the Supervisory Board members’ remuneration in 2022.

Avantium does not grant any personal loans, guarantees or advance payments to members of the

Supervisory Board.

ii) Travel Expenses and Other Expenses

Supervisory Board members are reimbursed for all reasonable costs incurred in connection with their

attendance of meetings. Travel costs are reimbursed in line with Avantium’s travel policy. Any other

expenses are only reimbursed, either in whole or in part, if incurred with the prior consent of the Chair

of the Supervisory Board.

iii) One-Off Fixed Awards of Options (ESOP) Related to the Member’s Appointment

The ESOP allows for participation by members of the Supervisory Board. A member is, upon such

member’s appointment entitled to thirty thousand (30,000) Options. The Chair of the Supervisory

Board is entitled to eighty five thousand (85,000) Options. A member may choose not to receive the

award.

Based on the feedback by shareholders and in order to assess more explicitly the shareholders’

perspective [/view] on this remuneration element for Supervisory Board members, any such one-off

fixed awards of share options to new member of the Supervisory Board upon their appointment will be

submitted for approval by the General Meeting as a separate remuneration element from the annual

fee. The Options vest at the end of a three-year vesting term and not on an annual pro rata basis

during this three-year vesting period. Only if the membership of a member of the Supervisory Board is

terminated or has ended prior to the date of vesting will the number of options be decreased as

provided for in the ESOP (depending on the reasons for such earlier termination, on a monthly pro rata

basis during a period of three years). A lock-up period of four (4) years applies from the date of the

award, with the exception of a limited right of sale for sell to cover purpose. The exercise period of the

Options will be up to four (4) years after the date that the awarded Options have fully vested.

Based on the General Meeting’s perspective and shareholders’ feedback following the 2023 General

Meeting, the Remuneration Policy and ESOP plan rules (which may then need to be amended

accordingly) will be reconsidered and to the extent required be reviewed prior to submission of the

Supervisory Board Remuneration Policy for approval to the General Meeting in 2024.


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Total Overview of Supervisory Board Remuneration 2022


(In €1,000)	Fixed remuneration		Variable remuneration
	Membership	Committees	Other compensation23	Long-term award24	Total remuneration	% of fixed remuneration	% of variable remuneration
E. Moses	75	15	—	33	123	73%	27%
M.B.B. Jou	40	15	—	12	67	82%	18%
C.A. Arnold	10	4	3	—	17	82%	18%
M.G. Kleinsman	40	10	—	—	50	100%	—%
G.E. Schoolenberg	20	5	—	—	25	100%	—%
N. Björkman	40	15	—	2	57	96%	4%
Total - 2022	225	64	4	46	339	85%	15%

The following table provides detail on the total remuneration received by each Supervisory Board member in accordance with the period the company's shares are traded on Euronext:


(In €1,000)	2022	2021	2020	2019	2018	2017
E. Moses	123	121	133	3	—	—
M.G. Kleinsman	50	50	50	50	50	27
M.B.B. Jou	67	70	47	—	—	—
N. Björkman	57	—	—	—	—	—
Total Supervisory Board members	297	241	230	53	50	27

Remuneration of former Supervisory Board members
C.A. Arnold (member until 31 March 2022)	17	53	14	—	—	—
G.E. Schoolenberg (member until 1 September 2022)	25	44	13	—	—	—
D.J. Lucquin (member until 30 September 2020)	—	—	44	50	50	53
R.W. van Leen (member until 31 December 2019)	—	—	—	30	—	—
K. Verhaar (member until 20 December 2019)	—	—	—	90	80	6
G.E.A Rijnen (member until 15 May 2019)	—	—	—	21	55	50
J.S. Wolfson (member until 15 May 2019)	—	—	—	18	50	45
Total former Supervisory Board members	42	97	71	209	235	154
Total remuneration	339	338	301	262	285	181


	109

23 Other compensation includes expenditures related to travel.

24 Long-term award includes the value of the ESOP plan. The value of the ESOP reward is calculated based on the number of share options that have vested during the year and the net of the share price at vesting date less the exercise price.

The total remuneration based on IFRS in 2022 for Edwin Moses amounted to €112,000 (2021:

€130,000) due to the share-based payment expenses of €22,000 recognised during the year (2021:

€51,000). The total remuneration based on IFRS in 2022 for Michelle Jou amounted to €63,000 (2021:

€73,000) due to the share-based payment expenses of €8,000 recognised during the year (2021:

€18,000). The total remuneration based on IFRS in 2022 for Nils Björkman amounted to €78,000

(2021: €14,000) due to the share-based payment expenses of €22,000 recognised during the year

(2021: €nil). The total remuneration based on IFRS in 2022 for Cynthia Arnold amounted to €26,000

(2021: €93,000) due to the share-based payment expenses of €9,000 recognised during the year

(2021: €40,000).

Number of Options Supervisory Board


	The main conditions of share option plans
	Specification of plan	Award date	Vesting date	Exercise period	Exercise price of the option in EUR
E. Moses	ESOP	14/5/2020	14/5/2023	8 years	3.59
M.B.B. Jou	ESOP	14/5/2020	14/5/2023	8 years	3.59
N. Björkman	ESOP	18/5/2022	19/5/2025	8 years	3.07
C.A. Arnold (former member)	ESOP	30/9/2020	30/9/2023	8 years	5.78
J.S. Wolfson (former member)	ESOP	2/3/2017	2/3/2020	10 years	9.80
J.M. van der Eijk (former member)	ESOP	2/3/2017	2/3/2020	10 years	9.80


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		Information regarding the reported financial year
	Specification of plan	Number of options outstanding 1 January	Share options granted during the year	Share options exercised during the year	Share options forfeited during the year	Share options vested during the year	Value of share options vested during the year25	Value of share options exercised during the year26	Share options unvested as at 31 December	Share options vested as at 31 December
E. Moses	ESOP	85,000	—	—	—	28,333	32,703	—	9,444	75,556
M.B.B. Jou	ESOP	30,000	—	—	—	10,000	11,542	—	3,333	26,667
N. Björkman	ESOP	—	30,000	—	—	6,667	1,867	—	23,333	6,667
C.A. Arnold (former member)	ESOP	30,000	—	—	(15,000)	1,667	—	—	15,000	—
J.S. Wolfson (former member)	ESOP	4,000	—	—	—	—	—	—	—	4,000
J.M. van der Eijk (former member)	ESOP	4,000	—	—	—	—	—	—	—	4,000
Total Supervisory Board members		115,000	30,000	—	—	45,000	46,112	—	36,111	108,889
Total former Supervisory Board members		38,000	—	—	(15,000)	1,667	—	—	15,000	8,000

As per 31 December 2022, the following Supervisory Board members held Options:

•Edwin Moses, Chair of the Supervisory Board: eighty-five thousand (85,000) options;

•Michelle Jou, member of the Supervisory Board: thirty thousand (30,000) options; and

•Nils Björkman, member of the Supervisory Board: thirty thousand (30,000) options.

Margret Kleinsman chose not to receive the Options award.

Deviation from the Dutch Corporate Governance Code

Best Practice Provision 3.3.2: Remuneration of Supervisory Board Members

Best Practice Provision 3.3.2 states that Supervisory Board members may not be awarded

remuneration in the form of shares and/or rights to shares. To continue to attract and retain top talent

in a competitive global environment, and to help the Supervisory Board create sustainable added

value, Avantium included in its Remuneration Policy, as adopted by Avantium's General Meeting of

Shareholders on 14 May 2020, the option for Supervisory Board members to receive upon

appointment a on-off fixed award of share options. Avantium's Employee Stock Option Plan, as

adopted on 5 October 2016, allows for such award.

Based on the feedback from shareholders on the remuneration policy, the company, in particular the

Remuneration Committee, understands that this deviation from the Dutch Corporate Governance Code

Best Practice Provision 3.3.2 continues to be a controversial remuneration topic. The company would

like to continue the dialogue on this topic in view of an updated remuneration policy. In order to assess

more explicitly the shareholders’ perspective [/view] on this remuneration element for Supervisory

Board members, any such one-off fixed awards of share options to new member of the Supervisory

Board upon their appointment will be submitted for approval by the General Meeting as a separate

remuneration element from the annual fee.


	111

25 The value of share options vested during the year is expressed in EUR and is determined by the share price at vesting date less the exercise price.

26 The value of share options exercised during the year is expressed in EUR and is determined by the share price at exercise date less the exercise price.

Deviation from the Dutch Corporate Governance Code Best Practice Provision

2.3.4: Composition of the Committees

Under this provision, the role of Chair of the Audit Committee or the Remuneration Committee may not

be filled by the Chair of the Supervisory Board, nor by a former member of the Management Board of

the company. Due to the size of Avantium’s Supervisory Board, the chairmanship of the Remuneration

Committee was filled by the Chair of the Supervisory Board in 2022. The Chair of the Supervisory

Board has significant subject matter expertise on remuneration topics and is assisted in the

Remuneration Committee by two Supervisory Board members with similar subject matter expertise.

Where necessary, the Remuneration Committee is assisted by external advisors on relevant topics.

The Supervisory Board will reconsider the composition of the Remuneration Committee in 2023, when

the Supervisory Board will again consist of more than four people.


	112

Corporate Governance

General

Avantium N.V. is a Dutch public limited company based and

registered in Amsterdam, the Netherlands. Avantium’s shares are

listed on Euronext Amsterdam and Euronext Brussels (symbol:

AVTX).

We have a two-tier governance structure consisting of the

Management Board and the Supervisory Board. There is also a

third governing body: the General Meeting of Shareholders. In the

following sections, we provide information on these governing

bodies and their responsibilities and duties. Sustainable long-

term value creation is the key consideration for the Management

Board and Supervisory Board when determining strategy and

making decisions, with stakeholder interests taken into careful

consideration.

Since the financial year 2017, Avantium has been subject to the

2016 Dutch Corporate Governance Code (the Dutch Code), most

recently updated on 20 December 2022. The Dutch Code

regulates the relationships between the Management Board,

Supervisory Board and General Meeting of Shareholders. Listed

companies in the Netherlands must render account for their

compliance with the Dutch Code. Below, we give information on

how Avantium applies the Dutch Code.

Avantium’s corporate governance framework is based on the

requirements of the Dutch Civil Code, the Dutch Code, the

company’s Articles of Association as amended on 25 January

2022, the applicable securities laws and the regulations

concerning the Management Board and the Supervisory Board.

Our Articles of Association, which are published online, include

most of the Dutch Code’s principles and best practice provisions

applicable to a two-tier governance structure.

Management Board

The Management Board is the statutory executive body and,

together with the Management Team, is responsible for the day-

to-day management of Avantium. It formulates and implements

our (business) strategy and policies in line with the associated

risk profile and takes responsibility for internal control systems.

The Management Board’s duties may be divided among its

members.

The Management Board may take any actions necessary or

useful for achieving Avantium’s objectives, except those

prohibited by or expressly attributed to the General Meeting or

Supervisory Board by law or by the Articles of Association.

In performing its duties, the Management Board must consider

the interests of Avantium’s stakeholders (including shareholders,

employees, partners and customers) as well as the sustainability

issues relevant to the business. The Management Board must

submit certain important decisions to the Supervisory Board or

the General Meeting for approval. The Management Board must,

in a timely way, provide the Supervisory Board with all the

information it needs to carry out its own duties.


Name	Years in Management Board	Date of initial appointment	Date of re-appointment	Term ends in
Tom van Aken	17	2005	AGM 2021	AGM 2025
Boudewijn van Schaïk	n.a.	1 January 2023	n.a.	AGM 2027

Resigned Management Board member
Bart Welten	2	AGM 2020	n.a.

Composition of the Management Board

The Management Board consists of at least two members. The

Supervisory Board is authorised to make binding nominations for

the appointment of a Management Board member to the General

Meeting. Each Management Board member is appointed for no

more than four years, with their appointment period ending

immediately after the General Meeting held in the fourth calendar

year after their initial appointment. A Management Board

member may be reappointed for a term of no more than four

years at a time.

On 30 September 2022, Avantium announced the nomination of

Boudewijn van Schaïk as a member of the Management Board

and CFO of Avantium, effective 1 January 2023. Bart Welten

retired as CFO of Avantium on 31 December 2022. On 30

November 2022, an Extraordinary General Meeting of

Shareholders confirmed the appointment of Boudewijn van

Schaïk to the position of CFO and as a member of the

Management Board, for a term ending directly after the General

Meeting of 2027.


	113

Evaluation

At least once a year, the Management Board evaluates itself and

its individual members. The performance of the Management

Board and its individual members is also evaluated at every

closed session of the Supervisory Board, with the findings

communicated by the Chair to the Management Board.

Remuneration

Information on the remuneration policy for Management Board

members and their individual remunerations can be found in the

Remuneration Report 2022 (page 84).

Supervisory Board

The Supervisory Board supervises and advises the Management

Board and guides the general course of company affairs and

business. In performing their duties, the Supervisory Board

members act in accordance with the interests of the company,

considering stakeholder interests. It furthermore focuses on the

effectiveness of internal risk management and control systems

and the integrity and quality of the financial reporting.

The Supervisory Board is responsible for nominating and

supervising an external accountant who audits, reports on and

issues a statement concerning the company’s annual financial

statements to the General Meeting.

Composition of the Supervisory Board

Our Supervisory Board consists of at least three members and is

authorised to make binding nominations for the appointment of a

Supervisory Board member. It appoints one of its members to be

Chair. In line with the Dutch Code, each member is appointed for

no more than four years, with their appointment period ending

immediately after the General Meeting held in the fourth calendar

year after their initial appointment. The Supervisory Board

member may then be reappointed for up to two further two-year

periods. For an appointment to continue beyond eight years,

justification should be given in the consultative Report of the

Supervisory Board.

In 2022, there were several changes to the composition of the

Supervisory Board. Nils Björkman was appointed as a

Supervisory Board member on 25 January 2022. Cynthia Arnold

resigned as a Supervisory Board member as of 31 March 2022.

Trudy Schoolenberg stepped down as Supervisory Board member

as of 31 August 2022.

Retirement and re-Election Schedule


Name	(Re-)appointment date	Year of possible re-election	End of final term
E. Moses	20 December 2019	2023	2031
M.B.B. Jou	14 May 2020	2024	2032
M.G. Kleinsman	19 May 2021	2025	2029
N. Björkman	25 January 2022	2026	2034

Diversity and Inclusion

Avantium aspires to be an inclusive and diverse company with an

open and inspiring culture, where people feel safe to develop and

share ideas. The Avantium Diversity & Inclusion (D&I) Policy is

published on our corporate website. More information on the

results of our D&I Policy can be found on page 45.

The Supervisory Board has drawn up a profile for its size and

composition, setting out (i) the size of the Supervisory Board, (ii)

the desired expertise and backgrounds represented in the

Supervisory Board, (iii) the desired diversity among Supervisory

Board members and the desired independence of Supervisory

Board members and (iv) the qualifications of the Supervisory

Board. Avantium’s Supervisory Board Profile can be found on our

website.

The Supervisory Board seeks to promote diversity among its

members in terms of age, sex, nationality, industry experience,

background, skills, knowledge and insights. As far as possible, we

aim to create a balance among the Supervisory Board’s members

where this diversity is represented. To comply with Dutch

legislation on gender balance, the Supervisory Board should

consist of at least one-third female and at least one-third male

members. At the end of 2022, the composition of the Supervisory

Board met this gender ratio, with 50% female and 50% male

members.

Evaluation

At least once a year, the Supervisory Board evaluates its own

performance as well as the performance of its Committees, the

Management Board and all individual members thereof. More

information on the evaluation of the Supervisory Board in 2022

can be found in the Report of the Supervisory Board (page 79).


	114

Supervisory Board Committees

The Supervisory Board’s Audit Committee, Industrialisation

Committee, Remuneration Committee and Nomination Committee

advise the Supervisory Board and inform its decision-making,

although the Supervisory Board remains collectively responsible

for the fulfilment of the duties delegated to its committees. The

Committee Regulations are published on Avantium’s website.

Audit Committee

The Audit Committee assists the Supervisory Board in overseeing

the integrity and quality of our financial reporting and the

effectiveness of our internal risk management and control

systems, including supervising the enforcement of the relevant

legislation and regulations and the effect of codes of conduct. The

Audit Committee supervises the financing of the company,

assessing the external independent audit process and the scope

and approach of the external auditor as well as monitoring

progress and performance. The relationship with the external

independent auditor is evaluated annually. Together with the

Management Board, the Audit Committee reviews half-year and

full-year financial statements, independent auditor reports and

the Management Letter. The Audit Committee supervises the

company’s policy on tax planning and the applications of

information and communication technology (ICT), including risks

relating to cybersecurity.

Remuneration Committee

The Remuneration Committee reviews and makes

recommendations regarding the remuneration policy for the

Management Board and the Supervisory Board, for adoption by

the General Meeting. The approved policy then forms the basis for

the fixed and variable remuneration of the Management Board.

Nomination Committee

The Nomination Committee is tasked with advising on candidates

to fill vacancies in the Management Board and Supervisory

Board, assessing the functioning of both Boards and their

members, supervising the policy of the Management Board on the

selection criteria and appointment procedures for senior

management and ensuring long-term succession planning.

Industrialisation Committee

The Industrialisation Committee has been established to serve as

the Supervisory Board's advisory and risk review forum in

providing oversight of the company’s (i) technology strategy, (ii)

industrialisation roadmaps and (iii) technology portfolio, all as

determined, formulated and executed by the company's

Management Board and senior management.

Board Compliance

Both the Management Board and the Supervisory Board,

including the committees of the Supervisory Board, have their

own regulations, which set rules regarding duties and

responsibilities, composition and working methods. These

regulations are available on our website.

In line with the Supervisory Board Regulations, the Management

Board Regulations and the Dutch Code, Board members must

immediately report any real or potential conflict of interest to the

Chair of the Supervisory Board and/or to the other members of

the Management Board. In 2022, there were no reports of

potential conflicts of interest relating to members of the

Supervisory Board and Management Board. The Supervisory

Board was also able to carry out its tasks independently pursuant

to principles 2.1.7 to 2.1.9 of the Dutch Code.

Annual General Meetings of Shareholders

An Annual General Meeting of Shareholders (General Meeting) is

held within six months of the end of every financial year. The

main purpose of the General Meeting is to decide on matters as

specified in Avantium’s Articles of Association and under Dutch

law, such as the adoption of the financial statements and the

discharge of the Management Board and Supervisory Board

members of their respective management and supervision duties.

Extraordinary General Meetings (EGMs) are held if the

Management Board and Supervisory Board deem it necessary or

at the request of one or more shareholders who, alone or jointly,

represent at least one-tenth of Avantium’s issued share capital.

A General Meeting is called by a convening notice sent by the

Management Board or the Supervisory Board. Shareholders who,

alone or jointly, represent at least 0.03% of the company’s issued

capital may ask for items to be added to the agenda. Every

shareholder may attend, speak at and vote at the General

Meeting. Unless Dutch law or the Articles of Association require a

larger majority, resolutions of the General Meeting are adopted by

a simple majority of the votes cast. Certain resolutions require a

qualified majority of two-thirds of the votes cast, if less than half

of the issued share capital is represented at the General Meeting.

The draft minutes must be published on our corporate website no

later than three months after the General Meeting or EGM.

Shareholders are given three months to respond to the draft

minutes, which are subsequently adopted and signed by the

Chair of the Supervisory Board and the General Counsel, acting

as the secretary to the General Meeting or EGM.

Governance Avantium Renewable

Polymers B.V.

Avantium Renewable Polymers B.V., a 77.4% owned subsidiary

of Avantium N.V., is a Dutch limited liability company based and

registered in Amsterdam, the Netherlands. It acts as the holding

company for Avantium RNP Flagship Plant B.V., which entity

constructs the world’s first commercial furandicarboxylic acid

(FDCA) manufacturing plant, which will be operated by the

Avantium Renewable Polymers group and is being located in

Delfzijl, the Netherlands (the “FDCA Flagship Plant”).

In view of the equity participation by the Bio Plastics Investment

Groningen Consortium B.V. and Worley Nederland B.V., Avantium

N.V. entered into a shareholders’ agreement (“SHA”) which

governs the relationship between the shareholders of Avantium

Renewable Polymers B.V. The SHA contains a number of specific

governance mechanisms, in addition to the customary

arrangements on governance matters.


	115

Supervisory Board Avantium N.V.

The Supervisory Board of Avantium N.V. will, in its capacity as

Supervisory Board to Avantium Renewable Polymers’ major

shareholder, also supervise the business of Avantium Renewable

Polymers B.V. and in particular the engineering, construction and

commissioning of the FDCA Flagship Plant. Avantium will procure

that at least one of the members of the Supervisory Board of

Avantium will have specific competences in this area of expertise.

Project Oversight Board

Avantium Renewable Polymers has installed a project oversight

board (the “Project Oversight Board”), which representatives will

be appointed and dismissed in accordance with the Project

Oversight Board’s regulations. During the engineering,

construction and commissioning of the FDCA Flagship Plant, the

Project Oversight Board will meet at least once per two months.

The minutes of the meetings of the Project Oversight Board will

be provided to the shareholders of Avantium Renewable

Polymers.

Shareholders’ Committee

Avantium Renewable Polymers has a Shareholders’ Committee

consisting of one representative of each shareholder, which

representative will be appointed and dismissed by such

shareholder. The Shareholders’ Committee meets at least once

per three months. The Managing Director (or his replacement

within the Management Board) attends these meetings and

informs the members of the shareholders’ committee of the

progress and all other relevant matters regarding the FDCA

Flagship Plant and Avantium Renewable Polymers’ business in

general.

Corporate Governance Statement

Since being listed on Euronext Amsterdam, Avantium has been

required to abide by the Dutch Code. Avantium acknowledges the

importance of good corporate governance and agrees with the

principles of the Dutch Code. We have taken, and will take,

further appropriate steps to apply its principles and best practice

provisions.

Compliance with the Dutch Code

Avantium is committed to applying the principles and best

practice provisions of the Dutch Code. Below, we list the

principles and best practice provisions where we deviate from the

Dutch Code.

Principle 1.3.6: Absence of Internal Audit Department

Avantium’s internal audit function assesses the design and

operation of our internal risk management and control systems.

The Management Board is responsible for the internal audit

function; the Supervisory Board oversees this function and

maintains regular contact with the people involved. In 2022, the

duties and responsibilities of the internal audit function were

allocated to various senior support staff functions within the

company (e.g., Legal and Finance). These support staff functions

have direct access to the Audit Committee and the external

independent auditor. Minutes are taken to record how the Audit

Committee is informed by the internal audit function. The

Supervisory Board annually assesses whether or not the

allocation to various senior support functions within the company

is still adequate. The senior staff members rely on external

subject matter expertise where appropriate.

Best Practice Provision 2.3.4: Composition of the

Committees

Under this provision, the role of Chair of the Audit Committee or

the Remuneration Committee may not be filled by the Chair of the

Supervisory Board, nor by a former member of the Management

Board of the company. Due to the size of Avantium’s Supervisory

Board, the chairmanship of the Remuneration Committee was

filled by the Chair of the Supervisory Board in 2022. The Chair of

the Supervisory Board has significant subject matter expertise on

remuneration topics and is assisted in the Remuneration

Committee by two Supervisory Board members with relevant

experience and background. Where necessary, the Remuneration

Committee is assisted by external advisors. The Supervisory

Board will reconsider the composition of the Remuneration

Committee in 2023, when it is anticipated that the Supervisory

Board will again consist of more than four people.

Best Practice Provision 3.3.2: Remuneration of

Supervisory Board Members

This provision states that Supervisory Board members may not

receive remuneration in the form of shares and/or rights to

shares. To continue to attract and retain top talent in a

competitive global environment, and to help the Supervisory

Board create sustainable added value, Avantium included in its

Remuneration Policy, as adopted by Avantium's General Meeting

of Shareholders on 14 May 2020, the option for Supervisory

Board members to receive upon appointment a one-off fixed

award of share options. Avantium's Employee Stock Option Plan,

as adopted on 5 October 2016, allows for such award.

The Chairperson is entitled to 85,000 options, and the other

members are entitled to 30,000 options. A member may decline

the award. It may be proposed to the General Meeting to make

the foregoing fixed award once more upon re-appointment of a

member for a period of four (4) years. Any Avantium Options or

shares held by the Supervisory Board members serve as a long-

term investment in Avantium and align members’ interests with

those of other shareholders. The company does not grant loans to

members of the Supervisory Board. Reference is furthermore

made to the Remuneration Report 2022.

Best Practice Provision 4.3.3: Cancelling the Binding

Nature of a Nomination or Dismissal

This provision states that General Meetings of a company that

does not have statutory two-tier status (‘structuurregime’) may,

by an absolute majority of the votes cast, cancel the binding

nature of a nomination for the appointment and/or dismissal of a

Management Board or Supervisory Board member. It may be

provided that this majority should represent a given proportion

(maximum one-third) of the issued capital. If this proportion is not

represented at the meeting, but an absolute majority of the votes

cast is in favour of a resolution to cancel the binding nature of a

nomination or dismissal, a new General Meeting may be

convened where the resolution may be passed by an absolute

majority of the votes cast, regardless of the proportion of the

capital represented at the new meeting.


	116

Avantium’s Articles of Association allow the Supervisory Board to

make binding nominations. If it makes a binding nomination for

the appointment of a Management Board or Supervisory Board

member, the nominee shall be appointed regardless of the

majority of the votes cast in favour. The General Meeting may

override the binding nature of such a nomination by a majority of

two-thirds of the votes cast, when these votes represent more

than half of the issued share capital.

If the Supervisory Board has not made a binding nomination, the

General Meeting can appoint a member of the Management

Board or Supervisory Board at its discretion by a simple majority

representing at least one-third of the issued share capital. In line

with the company’s Articles of Association, the General Meeting

may at any time dismiss a member of the Management Board or

the Supervisory Board. To pass, the resolution needs a two-thirds

majority of the votes cast, representing more than half of the

issued share capital. However, if the dismissal is proposed by the

Supervisory Board, a simple majority is sufficient. Avantium

deviates from the Dutch Code on this provision in order to

safeguard the continuity of the company.

Decree Article 10 EU Takeover Directive

The information required by the Decree Article 10 EU Takeover

Directive (Besluit artikel 10 overnamerichtlijn), to the extent

applicable to the company, is included in this corporate

governance section, as well as in the Investor Relations section of

this annual report.

The contractual conditions of the company’s key financing

agreements (potentially) entitle the banks to claim early

repayment of the amounts borrowed by the company and its

subsidiaries in the event of a change of control over the company

(as defined in the respective agreement).

In connection with the debt financing of €90 million committed

from ABN AMRO Bank N.V. and its subsidiaries, ING Sustainable

Investments B.V., Invest-NL Capital N.V., De Volksbank N.V.

(trading as ASN Bank), and Coöperatieve Rabobank U.A. (the

Lenders), the company issued approximately 2.84 million

warrants, convertible into the company’s ordinary shares with a

1:1 conversion ratio for an exercise price of €0.10 per share (the

Warrants) to the Lenders pursuant to the Warrant Agreement.

The Warrants had anti-dilution protection for the equity raise of

up to €45.0 million by the company in the offering of April 2022.

The Warrants will become exercisable when the FDCA Flagship

Plant is operational or when other additional conditions included

in the Warrant Agreement have been met. Such additional

conditions include, a change of control, certain joint ventures,

permitted acquisitions, disposals and certain other events.

Certain government grants and subsidies are subject to

restrictions, such as change of control clauses and other

requirements, that could potentially lead to the amount of such

grants or subsidies being reduced.


	117

Contents


	Page
Consolidated Financial Statements 2022	120
Consolidated Statement of Financial Position	120
Consolidated Statement of Comprehensive Income	122
Consolidated Statement of Changes in Equity	123
Consolidated Statement of Cash Flows	125

Main Notes to the Consolidated Financial Statements	126
1. General Information	126
2. Summary of Significant Accounting Policies	127
3. Financial Risk Management	136
4. Critical Accounting Estimates and Judgments	139

Notes to the Consolidated Statement of Financial Position	141
5. Property, plant and equipment	141
6. Intangible assets	142
7. Leases	143
8. Inventories	144
9. Trade and other receivables	144
10. Cash and cash equivalents	145
11. Share capital and other reserves	145
12. Non-controlling interest	145
13. Share-Based Payments	146


	Page
14. Earnings per Share	148
15. Trade and Other Payables	149
16. Borrowings	149
17. Provisions for Other Liabilities and Charges	150
18. Financial Liability	150

Notes to the Consolidated Statement of Comprehensive Income	151
19. Revenues	151
20. Other Income	152
21. Segment Information	152
22. Expenses by Nature	154
23. Employee Benefits	154
24. Finance Income and Costs	155
25. Income Tax Expense	155
26. Dividends	155

Other Notes to the Consolidated Financial Statements	156
27. Contingencies	156
28. Commitments & Guarantees	156
29. Related-Party Transactions	156
30. Proposed Appropriation of Result	158
31. Events After the Balance Sheet Date	158


	Page
Company Financial Statements 2022	160
Company Balance Sheet	160
Company Income Statement	161

Notes to the Company Financial Statements	162
32. General Information	162
33. Equity Attributable to Equity Holders of the Company	162
34. Financial Fixed Assets	162
35. Receivables from group companies	163
36. Cash and Cash equivalents	163
37. Payables to group companies	163
38. Provisions	163
39. Borrowings	163
40. Financial Liability	165
41. Commitment and Contingencies	165
42. Audit Fees	165
43. Remuneration of the Management Board and the Supervisory Board	165
44. Employee Information	166

Other information	167
Independent Auditor's Report	168


	119

Consolidated Financial Statements 2022

Consolidated Statement of Financial Position

As at December 31


in Euro x 1,000	Notes	2022	2021
ASSETS
Non-current assets
Property, plant and equipment	5	60,394	23,324
Intangible assets	6	1,974	1,835
Right-of-use assets	7	9,945	9,479
Non-current prepayments	9	15,248	—
Total non-current assets		87,561	34,638
Current assets
Inventories	8	1,567	1,238
Trade and other receivables	9	8,035	6,888
Cash and cash equivalents	10	64,870	34,911
Total current assets		74,472	43,037

Total assets		162,033	77,675


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in Euro x 1,000	Notes	2022	2021

EQUITY
Equity attributable to owners of the parent
Ordinary shares	11	4,261	3,129
Share premium		270,829	230,252
Other reserves	11	12,785	11,936
Accumulated losses		(206,747)	(195,291)
Total equity attributable to the owners of the parent		81,128	50,026
Non-controlling interest	12	10,042	—
Total equity		91,170	50,026
LIABILITIES
Non-current liabilities
Borrowings	16	12,856	—
Financial liability	18	14,091	—
Lease liabilities	7	10,046	9,099
Total non-current liabilities		36,993	9,099
Current liabilities
Lease liabilities	7	1,897	1,604
Trade and other payables	15	31,738	16,750
Provisions for other liabilities and charges	17	236	196
Total current liabilities		33,870	18,550

Total liabilities		70,863	27,649

Total equity and liabilities		162,033	77,675

The accompanying notes are an integral part of these consolidated financial statements.


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Consolidated Statement of Comprehensive Income

For the financial year ended December 31


in Euro x 1,000	Notes	2022	2021
Revenues	19	17,826	10,917
Other income	20	7,626	6,686
Total revenues and other income		25,452	17,603
Operating expenses
Raw materials and contract costs	22	(3,770)	(3,042)
Employee benefit expenses	22; 23	(23,401)	(19,226)
Office and housing expenses	22	(3,062)	(1,968)
Patent, license, legal and advisory expenses	22	(6,766)	(4,312)
Laboratory expenses	22	(3,272)	(2,864)
Advertising and representation expenses	22	(1,329)	(707)
Other operating expenses	22	(1,538)	(1,568)
Net operating expenses		(43,138)	(33,687)

EBITDA27		(17,687)	(16,084)
Depreciation, amortisation and impairment charge	22	(8,578)	(7,837)
EBIT28		(26,265)	(23,921)
Finance income	24	12	2
Finance costs	24	(2,459)	(497)
Fair value remeasurement	18	(2,841)	—
Loss before income tax		(31,554)	(24,416)
Income tax expense	25	—	—
Loss for the period		(31,554)	(24,416)


in Euro x 1,000	Notes	2022	2021
Other comprehensive income		—	—
Total comprehensive expense for the year		(31,554)	(24,416)
Loss attributable to:
Owners of the parent		(29,583)	(24,416)
Owners of Non-controlling interest		(1,970)	—
		(31,554)	(24,416)
Total comprehensive expense attributable to:
Owners of the parent		(29,583)	(24,416)
Owners of Non-controlling interest		(1,970)	—
		(31,554)	(24,416)


in Euro	Note	2022	2021
Earnings per share for loss from continuing operations attributable to the ordinary equity holders of the company
Basic earnings per share	14	(0.80)	(0.82)
Diluted earnings per share	14	(0.80)	(0.82)

Earnings per share for loss attributable to the ordinary equity holders of the company
Basic earnings per share	14	(0.80)	(0.82)
Diluted earnings per share	14	(0.80)	(0.82)

The accompanying notes are an integral part of these consolidated financial statements.


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27 EBITDA is an important measurement of the company's financial performance before taking the cost of capital, depreciation and taxes into consideration. EBITDA margins provide a view of operational efficiency and enable a more accurate

and relevant comparison between peer companies.

28 EBIT: Earnings Before Interest and Taxes is used in the annual report as a measure, since it provides a view on the core operations of the company alone without the capital structure and tax expenses.

Consolidated Statement of Changes in Equity

For the year ended December 31


in Euro x 1,000	Attributable to equity holders of the company
	Ordinary shares	Share premium	Other reserves	Accumulated losses	Non- controlling interest	Total Equity
Balance at 1 January 2021	2,591	204,296	10,407	(171,057)	—	46,238
Comprehensive expense
Result for the year	—	—	—	(24,416)	—	(24,416)
Other Comprehensive expense for the year	—	—	—	—	—	—
Total Comprehensive expense for the year	—	—	—	(24,416)	—	(24,416)
Transactions with owners
–Employee share schemes - value of Employee services	—	—	828	—	—	828
–Share-based payment - purchase of intangible assets	—	—	884	—	—	884
–Transfer value share scheme to accumulated losses	—	—	(183)	183	—	—
–Issue of ordinary shares due to capital raise	521	25,855	—	—	—	26,376
–Issue of ordinary shares option plan	17	101	—	—	—	117
Total transactions with owners	537	25,956	1,528	183	—	28,205
Balance at 31 December 2021	3,129	230,252	11,936	(195,291)	—	50,026


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in Euro x 1,000	Attributable to equity holders of the company
	Ordinary shares	Share premium	Other reserves	Accumulated losses	Non- controlling interest	Total Equity
Balance at 1 January 2022	3,129	230,252	11,936	(195,291)	—	50,026
Comprehensive expense
Result for the year	—	—	—	(29,583)	(1,970)	(31,554)
Other Comprehensive expense for the year	—	—	—	—	—	—
Total Comprehensive expense for the year	—	—	—	(29,583)	(1,970)	(31,554)
Transactions with owners
–Employee share schemes- value of Employee services	—	—	809	—	—	809
–Employee share schemes – LTIP investment shares granted	—	—	180	—	—	180
–Transfer value share scheme to accumulated losses	—	—	(139)	139	—	—
–Issue of ordinary shares from the capital raise	1,125	40,427	—	—	—	41,552
–Issue of ordinary shares from share option plan	7	151	—	—	—	158
Total transactions with owners	1,132	40,577	849	139	—	42,698
Disposal of subsidiary	—	—	—	17,987	12,013	30,000
Balance at 31 December 2022	4,261	270,829	12,785	(206,747)	10,042	91,170

The accompanying notes are an integral part of these consolidated financial statements.


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Consolidated Statement of Cash Flows

For the year ended December 31


in Euro x 1,000	Notes	2022	2021
Cash flows from operating activities
Loss for the year from continuing operations		(31,554)	(24,416)
Adjustments for:
–Depreciation of property, plant and equipment	5	5,721	5,778
–Amortisation	6	35	56
–Depreciation of right of use assets	7	2,387	2,003
–Share-based payment	13	809	1,711
–Finance costs - net	24	2,448	495
–Fair value remeasurement	18	2,841	—
–Impairment of property, plant and equipment	5	435	22
–Lease adjustment		—	28
Changes in working capital (excluding exchange differences on consolidation):
–Increase in inventories	8	(329)	(12)
–(Increase)/decrease in trade and other receivables	9	(1,422)	456
–Increase in trade and other payables	15	18,728	1,429
–Increase in provisions	17	40	51
		139	(12,398)
Interest paid on current accounts	24	—	(120)
Interest received on current accounts	24	12	2
Other interest and bank charges		(1,554)	(94)


in Euro x 1,000	Notes	2022	2021
Net cash used in operating activities		(1,404)	(12,610)
Cash flows from investing activities
Purchases of property, plant and equipment (PPE)	5	(43,226)	(3,926)
Purchases of intangible assets	6	(174)	(6)
Transaction with non-controlling interest	12	20,002	—
Net cash used in investing activities		(23,399)	(3,932)
Cash flows from financing activities
Net proceeds from Capital raise		41,552	26,376
Net proceeds of option exercises		158	117
Proceeds from borrowings	16	15,000	—
Principal elements of lease payments	7	(1,947)	(1,663)
Net cash generated from financing activities		54,762	24,830

Net increase in cash and cash equivalents		29,959	8,288
Cash and cash equivalents at beginning of the year	10	34,911	26,626
Effect of exchange rate changes	24	(1)	(2)
Cash and cash equivalents from continuing operations at end of financial year	10	64,870	34,911

Cash and cash equivalents at end of financial year	10	64,870	34,911

The accompanying notes are an integral part of these consolidated financial statements.


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Main Notes to the Consolidated Financial Statements

1. General Information

Avantium N.V. (‘the company’) is a company incorporated and domiciled in the Netherlands, with its

statutory seat at Zekeringstraat 29-31, 1014 BV in Amsterdam. The company is listed on Euronext

Amsterdam and Brussels. The consolidated financial statements of the company for the year ended 31

December 2022 comprise of the company and its subsidiaries (together referred to as 'the group'). The

company is also the ultimate parent of the group.

The company is primarily involved in developing and commercialising next generation bio-based

plastics and chemicals based on our unique technological capabilities in advanced catalysis research &

development. Avantium also provides R&D solutions in the field of sustainable chemistry and is the

leading provider of advanced catalyst testing technology and services to accelerate catalyst R&D.

For setting the principles for the recognition and measurement of assets and liabilities and

determination of the result of its company financial statements, Avantium N.V. makes use of the option

provided in Section 2:362 (8) of the Dutch Civil Code. This means that the principles of the recognition

and measurements of assets and liabilities and determination of the result (hereafter referred to as

accounting policies) of the company financial statements of Avantium N.V. are the same as those

applied for the consolidated financial statements under IFRS (refer to note 2). By applying this option,

reconciliation is maintained between the group’s and the company’s equity.

These consolidated financial statements were approved for issue by both the Supervisory Board and

the Management Board on 21 March 2023.

2. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the years presented, unless

otherwise stated.

2.1. Basis of Preparation

The consolidated financial statements of Avantium N.V. have been prepared in accordance with

International Financial Reporting Standards (IFRS) as adopted by the European Union. The

consolidated financial statements have been prepared under the historical cost convention unless

otherwise stated.

2.1.1 Going Concern

The financial statements have been prepared on a going concern basis.

Avantium N.V. ("Avantium")

Avantium is a leading technology company in renewable chemistry, dedicated to developing and

commercialising breakthrough technologies for the production of chemicals from renewable sources

and circular plastic materials.

Avantium consists of three business segments in various stages of maturity: Avantium R&D Solutions,

Avantium Renewable Polymers and Avantium Renewable Chemistries.

Avantium R&D solutions is our main revenue-generating business unit, providing R&D solutions in the

field of sustainable chemistry and advanced catalyst testing systems and services for international

blue-chip players.

Avantium Renewable Polymers commercialises its YXY® Technology for the production of

furandicarboxylic acid (FDCA), which is a key ingredient for polyethylene furanoate (PEF). PEF is a

novel, 100% plant-based and fully recyclable polymer with the potential to outperform today’s

packaging materials, such as plastic, glass and aluminium, especially in the packaging, film and textile

sectors, which are large and growing markets. Avantium Renewable Polymers has operated a Pilot

Plant in Geleen since 2011 and is currently constructing its FDCA Flagship Plant at the Chemie Park

Delfzijl site in Groningen, with a capacity of 5 kilotonnes per annum. Handover from engineering to

operations is scheduled for the first quarter of 2024, after which we expect to commission and start up

the FDCA Flagship Plant for the commercial production of FDCA and PEF.

Avantium entered into a non-exclusive industrial technology license agreement with Origin Materials,

providing Origin access to relevant parts of Avantium’s YXY® Technology to enable the conversion of

Origin-produced CMF (chloromethylfurfural) derivatives into FDCA at a 100 kilotonnes per annum

scale facility. This will enable the use of second generation, renewable feedstocks for the production of

FDCA and PEF. Under the agreement, Avantium is eligible to receive license fee milestone payments

and royalties for each metric ton of FDCA produced at the licensed plant, in line with industry

practices. Avantium received a non-refundable payment of €5 million in 2022. As a result of signing


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the industrial technology license agreement, Origin Materials paid Avantium a milestone fee of €7.5

million in February 2023.

Avantium Renewable Chemistries develops, among other technologies, plantMEG™ (mono-ethylene

glycol), which is a plant-based and competitive alternative for fossil-based MEG. This is an important

chemical building block for PET and PEF resin, both of which are used in bottles and packaging; fibres

for clothing, furniture and the automotive industry; and solvents and coolants. Avantium Renewable

Chemistries opened a demonstration plant in Delfzijl in 2019, which became fully operational in 2020.

Avantium plans to scale up the plantMEG™ technology in order to subsequently implement its

licensing business model.

Funding Avantium

Avantium's consolidated cash position was €64.9 million as at 31 December 2022. Excluding

Avantium Renewable Polymers, Avantium's cash position was €47.9 million. Included in the €47.9

million is a €5.0 million cash deposit reserve held in the name of Avantium N.V. for any potential future

equity funding needs during the construction of the FDCA Flagship Plant. It has been agreed with the

consortium of lenders that Avantium Renewable Polymers B.V. will at all times have sufficient funding

available for the construction of the FDCA Flagship Plant. The reserved cash is available to meet any

funding shortfall that may arise, and this is assessed together with the Lenders upon each utilization

of the debt facility. The cash in this deposit account remains at all times in full control and ownership

of Avantium and its consolidated group.

With the funding obtained in April 2022 from the capital raise, the material uncertainty that existed on

the company's ability to continue as a going concern was resolved in April 2022.

In addition to this, Avantium successfully secured debt financing in December 2021, with the first and

second drawdowns taking place in November 2022 and January 2023, respectively. Avantium

Renewable Polymers expects to meet the conditions precedent to drawdown on the loan in the

upcoming period.

Avantium therefore expects to have sufficient cash flow to meet the requirements for working capital,

capital expenditures and R&D for at least 12 months after the signing date of these financial

statements.

In light of the above, management has assessed the going concern assumption on the basis of which

Avantium’s financial statements for 2022 have been prepared. The company continues to adopt the

going concern basis in preparing its consolidated financial statements.

Due to Avantium’s nature as a technology development company, with significant R&D expenses, and

the need to invest in scaling our novel technologies and to demonstrate them at commercial scale, the

company remains dependent on attracting additional external funding, in particular as the significant

income growth from our own operations and licensing is expected to be a few years away. Avantium

therefore continues to explore and evaluate various funding options to strengthen its financial position.

2.1.2 Changes in Accounting Policy and Disclosures

New Standards, Amendments and Interpretations not yet Adopted

There were no changes to the financial reporting requirements this year that affected the disclosures

in the financial statements of the Group.

New Standards, Amendments and Interpretations not yet Adopted

A number of new standards and amendments to standards and interpretations have been published

that are not mandatory for 31 December 2022 reporting periods and have not been early adopted by

the company. These standards are not expected to have a material impact on the company in the

current or future reporting periods and on foreseeable future transactions.

Use of Estimates

The preparation of financial statements in accordance with IFRS requires the use of certain accounting

estimates. It also requires management to exercise its judgement in the process of applying the

group's accounting policies. Estimates and judgments are continually evaluated, and are based on

historical experience and other factors, including expectations of future events that are believed to be

reasonable under the circumstances.

2.2 Consolidation

2.2.1 Subsidiaries

Subsidiaries are all entities over which the group has control. The group controls an entity when the

group is exposed to, or has rights to, variable returns from its involvement with the entity and has the

ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from

the date on which control is transferred to the group. They are deconsolidated from the date that

control ceases.

The consolidated companies are listed below (indicating the consolidation percentage):

•Avantium Technologies B.V., Amsterdam (100%)

•Avantium Support B.V., Amsterdam (100%)

•Renewable Technologies B.V. Amsterdam (100%)

•Avantium Chemicals B.V., Amsterdam (100%)

•Avantium Knowledge Centre B.V., Amsterdam (100%)

•Furanix Technologies B.V., Amsterdam (100%)

•YXY Technologies B.V., Amsterdam (100%)

•Stichting Administratiekantoor Avantium, Amsterdam (100%)


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•Stichting Stock Options Avantium, Amsterdam (100%)

•Feedstock Technologies B.V., Amsterdam (100%)

•Avantium Renewable Polymers B.V., Amsterdam (100%)

•Avantium RNP Flagship Plant B.V., Amsterdam (100%)

•Avantium Japan K.K., Tokyo (100%)

•Synvina C.V., Amsterdam (100%)

Inter-company transactions, balances and unrealised gains on transactions between group companies

are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by

subsidiaries have been adjusted to conform to the group’s accounting policies.

2.2.2 Changes in Ownership Interests in Subsidiaries Without

Change of Control

Transactions with non-controlling interest that do not result in loss of control are accounted for as

equity transactions. The difference between fair value of any consideration paid and the relevant

share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or

losses on disposals to non-controlling interest are also recorded in equity.

On 31 March 2022, there was a change in ownership of Avantium Renewable Polymers B.V., a

subsidiary of Avantium N.V. Worley Nederland B.V. and Bio Plastics Investment Groningen B.V.

together have acquired a 22.6% shareholding in Avantium Renewable Polymers B.V., while Avantium

continues to hold 77.4% of the equity. The change in shareholding did not result in Avantium N.V.

losing control over the subsidiary Avantium Renewable Polymers B.V. This resulted in an amount of

€18.0 million to be presented as a profit in the Consolidated Statement of Changes in Equity. The

details of the transactions between the equity participants are as follows:


	(In Euro x 1,000)	31 March 2022
	Fair value of the consideration received	30,000
	Increase in the non-controlling interest	(12,013)
	Adjustment to equity attributable to owners of the parents	17,987

2.2.3 Disposal of Subsidiaries

When the group ceases to have control, any retained interest in the entity is remeasured to its fair

value at the date when control is lost with the change in carrying amount recognised in profit or loss.

The fair value is the initial carrying amount for the purposes of subsequently accounting for the

retained interest as an associate, joint venture or financial asset. In addition, any amounts previously

recognised in other comprehensive income in respect of that entity are accounted for as if the group

had directly disposed of the related assets or liabilities. This may mean that amounts previously

recognised in other comprehensive income are reclassified to profit or loss.

2.2.4 Non-Controlling interest

Non-controlling interest are measured at their proportionate share of the acquiree's identifiable net

assets at the date of acquisition.

2.2.5 Principles of Consolidation and Equity Accounting

When the group ceases to consolidate or equity account for an investment because of a loss of control,

joint control or significant influence, any retained interest in the entity is remeasured to its fair value

with the change in carrying amount recognised in profit or loss. This fair value becomes the initial

carrying amount for the purposes of subsequently accounting for the retained interest as an associate,

joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive

income in respect of that entity are accounted for as if the group had directly disposed of the related

assets or liabilities. This may mean that amounts previously recognised in other comprehensive income

are reclassified to profit or loss.

If the ownership interest in a joint venture or an associate is reduced but joint control or significant

influence is retained, only a proportionate share of the amounts previously recognised in other

comprehensive income are reclassified to profit or loss where appropriate.

2.2.6 Segment Reporting

Operating segments are reported in a manner consistent with the business responsibilities and

internal reporting. The Management Board has appointed the management team which assesses the

financial performance and position of the group, and makes strategic decisions. The management

team, consists of the Chief Executive officer, the Chief Financial Officer, the Chief Technology Officer,

the Group Legal Counsel, the Managing Director of Avantium Renewable Chemistries, the Managing

Director of Avantium R&D Solutions and the Managing Director of Avantium Renewable Polymers.

2.3 Foreign Currency Translation

Functional and Presentation Currency

Items included in the financial statements of each of the group’s entities are measured using the

currency of the primary economic environment in which the entity operates (‘the functional currency’).

The consolidated financial statements are presented in euros, which is the company’s functional

currency.

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates

prevailing at the dates of the transactions or valuations where items are remeasured. Foreign

exchange gains and losses resulting from the settlement of such transactions and from the translation

at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are

recognised in the statement of comprehensive income.


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Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are

presented in the statement of comprehensive income within ‘finance income or cost’.

Group Companies

The results and financial position of all the group entities (none of which has the currency of a hyper-

inflationary economy) that have a functional currency different from the presentation currency are

translated into the presentation currency as follows:

•Assets and liabilities for each balance sheet presented are translated at the closing rate at the

date of that balance sheet.

•Income and expenses for each statement of comprehensive income are translated at the average

exchange rates.

•All resulting exchange differences are recognised as a separate component of other

comprehensive income.

2.4 Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities, disclosure of contingencies at

the date of the financial statements and the reported amounts of revenues and expenses during the

reporting period. The use of estimates is or could be a significant factor affecting the reported carrying

values of property, plant and equipment, intangibles, trade and other receivables and trade and other

payables. Despite management’s best efforts to accurately estimate such amounts, future results

could materially differ from those estimates.

2.5 Property, Plant and Equipment

Property, plant and equipment comprise mainly of laboratory equipment, hardware and leasehold

improvements. Leasehold improvements include machinery that is located in at the various Pilot Plant

sites. All property, plant and equipment is stated at historical cost less accumulated depreciation.

Historical cost includes expenditures that are directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item will flow

to the group and the cost of the item can be measured reliably. All other repairs and maintenance

charges are expensed in the financial period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate their cost of the assets to their

residual values over their estimated useful lives as follows:


•Leasehold improvements	5-20 years
•Machinery, laboratory equipment and vehicles	5 -7 years
•Computer hardware	3 years
•Office furniture and equipment	3-5 years

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount.

Gains and losses are included in the consolidated statement of comprehensive income.

2.6 Intangible Assets

Research and Development

Research expenditures are recognised as expenses as incurred. Development costs that are directly

attributable to the design and testing of identifiable and unique products controlled by the group are

recognised as intangible assets when the following criteria are fulfilled:

•It is technically feasible to complete the intangible asset so that it will be available for use or sale.

•Management intends to complete the intangible asset and use or sell it.

•There is an ability to use or sell the intangible asset.

•It can be demonstrated how the intangible asset will generate probable future economic benefits.

•Adequate technical, financial and other resources to complete the development and to use or sell

the intangible asset are available.

•The expenditure attributable to the intangible asset during its development can be reliably

measured.

Other development expenditures that do not meet these criteria are recognised as an expense as

incurred. Development costs previously recognised as an expense are not recognised as an asset in a

subsequent period. Capitalised development costs are recorded as intangible assets and amortised

from the point at which the asset is ready for use on a straight-line basis over its estimated useful life

of five years. Intangible assets not ready for use are tested for impairment at least on an annual basis.

Amortisation of development costs is included in depreciation, amortisation and impairment charge in

the statement of comprehensive income. All development costs arose from internal development.

Computer Software and Other Intangibles

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and

use the specific software. These costs are amortised straight-line over their estimated useful lives of

three years.

Costs associated with developing or maintaining computer software programmes are recognised as

expenses as incurred. Development costs that are directly attributable to the design and testing of


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identifiable and unique software products controlled by the group, that will probably generate

economic benefits exceeding costs beyond one year, are recognised as intangible assets.

Other intangibles consisting of an in-kind contribution of a shareholder for their software at the

foundation of the group and compensation paid to a third party to exclusively use parts of their

technology. Amortisation is calculated using the straight-line method over the estimated useful life of

three years.

Intellectual Property

Following the acquisition of Liquid Light on 30 December 2016, the company records intellectual

property (patent portfolio acquired) on its consolidated balance sheet. The intellectual property is

stated at historical cost, which will subsequently be lowered with accumulated amortisation in the

following years, when the technology on which the intellectual property is filed is ready to deploy

commercially.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item will flow

to the group and the cost of the item can be measured reliably.

Amortisation is calculated using the straight-line method to allocate their cost of the assets to their

residual values over their estimated useful lives (average lifetime of patent portfolio) as follows:


•Intellectual property	5-20 years

License rights

Acquired licenses that grants the company the right to use technologies not owned/developed by the

company are recorded on its consolidated balance sheet. The license rights are stated at historical

cost, which will subsequently be lowered with accumulated amortisation in the following years.

License rights contain variable royalty fee payment terms that are linked to production of the License

Products once the FDCA Flagship Plant is constructed and starts production. The fees will equal to $20

USD per metric ton of Licensed Products produced from the FDCA Flagship Plant. Variable royalty fee

payments that depend on the volume of production of the Licensed Products will be recognised in

profit or loss in the period in which the condition that triggers those payments.

Amortisation is calculated using the straight-line method to allocate their cost of the assets to their

residual values over their estimated useful lives (average lifetime of license rights) as follows:


•License rights	5-20 years

2.7 Impairment of Non-Financial Assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount may not be recoverable. An impairment loss is

recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The

recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the

purposes of assessing impairment, assets are grouped at the lowest levels for which there are

separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill

that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.8 Non-Current Assets (or Disposal Groups) Held for Sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying

amount is to be recovered principally through a sale transaction and a sale is considered highly

probable. They are stated at the lower of carrying amount and fair value less costs to sell.

2.9 Financial Assets

2.9.1 Classification

The group classifies its financial assets in assets to be measured at amortised cost.

The classification depends on the company’s business model for managing the financial assets and

the contractual terms of the cash flows. Management determines the classification of its financial

assets at initial recognition. The group classifies its financial assets as assets held for collection of

contractual cash flows.

2.9.2 Recognition and Measurement

Regular purchases and sales of financial assets are recognised on the trade-date, the date on which

the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to

receive cash flows from the financial assets expire or if the company transfers the financial asset to

another party and does not retain control or substantially all risks and rewards of the asset. Financial

liabilities are derecognised when the company’s obligations specified in the contract expire or are

discharged or cancelled.

Financial assets that are held for collection of contractual cash flows where those cash flows

represent solely payments of principal and interest are measured at amortised cost. Interest income

from these financial assets is included in finance income using the effective interest rate method. Any

gain or loss arising on derecognition is recognised directly in the statement of comprehensive income

and presented in other gains/ (losses). Impairment losses are presented as separate line item in the

statement of comprehensive income.


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2.10 Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there

is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a

net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must

not be contingent on future events and must be enforceable in the normal course of business and in

the event of default, insolvency or bankruptcy of the company or the counterparty.

2.11 Impairment of Financial Assets

Assets Carried at Amortised Cost

Impairment provisions for trade receivables are recognised based on the simplified approach within

IFRS 9 to measuring expected credit losses which uses a lifetime expected loss allowance for all trade

receivables and contract assets.

To measure the expected credit losses, trade receivables and contract assets have been grouped

based on shared credit risk characteristics and the days past due. The contract assets relate to

unbilled work in progress and have substantially the same risk characteristics as the trade receivables

for the same types of contracts. The group has therefore concluded that the expected loss rates for

trade receivables are a reasonable approximation of the loss rates for the contract assets.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be

related objectively to an event occurring after the impairment was recognised (such as an

improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is

recognised in the consolidated statement of comprehensive income.

Other assets are tested for impairment whenever events or changes in circumstances indicate that the

carrying amount may not be recoverable. An impairment loss is recognised for the amount by which

the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of

an asset’s fair value less costs of disposal. For the purposes of assessing impairment, assets are

grouped at the lowest levels for which there are separately identifiable cash inflows which are largely

independent of the cash inflows from other assets or groups of assets (cash-generating units).

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-

in, first-out (FIFO) method. The cost of raw materials, finished goods and work in progress comprises

all purchase costs including charges incurred to bring inventories to their current location and into their

current state. It excludes borrowing costs. Net realisable value is the estimated selling price in the

ordinary course of business, less applicable variable selling expenses.

2.13 Trade Receivables

Trade receivables are amounts due from customers for products sold or services performed in the

ordinary course of business. If collection is expected in one year or less (or in the normal operating

cycle of the business if longer), they are classified as current assets. If not, they are presented as non-

current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost

using the effective interest method, less provision for impairment. Refer to note 2.11 for further

information about the group’s impairment policy on financial assets.

2.14 Cash and Cash Equivalents

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand,

deposits held at call with banks, other short-term highly liquid investments with original maturities of

three months or less and bank overdrafts. In the consolidated statement of financial position, bank

overdrafts are shown within borrowings in current liabilities.

Restricted Cash

The restricted cash includes cash deposits, which is measured at an amount equal to the current

outstanding bank guarantees issued to third parties and/or cash deposits held in designated accounts

for an equity reserve as agreed with lenders. The restricted cash is not available for use by the

company to meet the short-term cash obligations. In the consolidated statement of financial position

the restricted cash is shown within cash and cash equivalents as current assets.

2.15 Share Capital

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new

ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Treasury Shares

Where any group company or liquidity provider appointed by the group, purchases the company’s

equity share capital (treasury shares), the consideration paid, including any directly attributable

incremental costs (net of income taxes), is deducted from equity attributable to the company’s equity

holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently

reissued, any consideration received, net of any directly attributable incremental transaction costs and

the related income tax effects, is included in equity attributable to the company’s equity holders. No

gain or loss is recognised in the statement of comprehensive income on the purchase, sale, issuance or

cancellation of the company’s own equity instruments.


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2.16 Trade and Other Payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary

course of business from suppliers. Accounts payable are classified as current liabilities if payment is

due within one year or less (or in the normal operating cycle of the business if longer). If not, they are

presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost

using the effective interest method.

2.17 Current and Deferred Income Tax

The tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of

comprehensive income, except to the extent that it relates to items recognised in other comprehensive

income or directly in equity. In this case, the tax is also recognised in other comprehensive income or

directly in equity respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively

enacted at the balance sheet date in the countries where the company’s subsidiaries and associates

operate and generate taxable income. Management periodically evaluates positions taken in tax

returns with respect to situations in which applicable tax regulation is subject to interpretation. It

establishes provisions where appropriate on the basis of amounts expected to be paid to the tax

authorities.

Deferred income tax is recognised, using the liability method, on temporary differences arising

between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial

statements. However, the deferred income tax is not accounted for if it arises from initial recognition of

an asset or liability in a transaction other than a business combination that at the time of the

transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined

using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date

and are expected to apply when the related deferred income tax asset is realised or the deferred

income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable

profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset

current tax assets against current tax liabilities and when the deferred income tax assets and liabilities

relate to income taxes levied by the same taxation authority on either the taxable entity or different

taxable entities where there is an intention to settle the balances on a net basis.

2.18 Employee Benefits

Pension Obligations

The group operates a defined contribution pension plan for all employees funded through payments to

an insurance company. The group has no legal or constructive obligations to pay further contributions

if the plan does not hold sufficient assets to pay all employees the benefits relating to employee

service in the current and prior years. The contributions are recognised as employee benefit expense

when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund

or a reduction in the future payments is available.

Share-Based Payments

The group operates a share-based compensation plans for its employees, which consist of an

Employee Stock Option Plan (ESOP) and a Long-term Incentive Plan (LTIP), also refer to note 13. These

plans are classified as an equity-settled share-based payment plans.

Share options granted to employees are measured at the fair value of the equity instruments granted

under the indirect method of measurement. Fair value is determined through the use of an option-

pricing model considering, amongst others, the following variables:

a)The exercise price of the option

b)The expected life of the option

c)The current value of the underlying shares

d)The expected volatility of the share price

e)The dividends expected on the shares

f)The risk-free interest rate for the life of the option

For the company’s share option plan, management’s judgment is that the Black-Scholes valuation

model is most appropriate for determining fair values as this model allows accounting for non-

transferability and early exercise. Since the company became listed in March 2017, there is published

share price information available to determine the fair value of its shares and the expected volatility of

that value. These assumptions and estimates are further discussed in note 13 to the IFRS consolidated

financial statements. The result of the share option valuations and the related compensation expense

is dependent on the model and input parameters used.

For the equity-settled Avantium ESOP, the fair value of the grant is determined at the grant date. For

the LTIP, the fair value is determined by the share price of the award at the grant date.

The fair value of the employee services received in exchange for the grant of the awards is recognised

as an expense. For share-based payments that do not vest until the employees have completed a

specified period of service, the group recognises the cost of services received as the employees render

service during that period.


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At each balance sheet date, the company revises its estimates of the number of awards that are

expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in

the statement of comprehensive income and a corresponding adjustment to equity.

The proceeds received from exercised options net of any directly attributable transaction costs are

credited to share capital (nominal value) and share premium.

Profit-sharing and Bonus Plans

The group recognises a liability and an expense for bonuses and profit-sharing where contractually

obliged or where there is a past practice that has created a constructive obligation.

Termination Benefits

Termination benefits are payable when employment is terminated by the group before the normal

retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits.

The group recognises termination benefits at the earlier of the following dates: (a) when the group can

no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a

restructuring that is within the scope of IAS 37 and involves the payment of terminations benefits. In

the case of an offer made to encourage voluntary redundancy, the termination benefits are measured

based on the number of employees expected to accept the offer. Benefits falling due more than 12

months after the end of the reporting period are discounted to present value.

2.19 Provisions

Provisions are recognised when the group has a present legal or constructive obligation as a result of

past events; it is probable that an outflow of resources will be required to settle the obligation; and the

amount can be reliably estimated.

The group provides for the estimated cost of product warranties at the time revenue is recognised and

the group has a constructive obligation. Warranty provision is established based on the group’s best

estimates of the amounts necessary to settle future and existing claims on products sold as of the

balance sheet date.

Provisions are measured at the present value of the expenditures expected to be required to settle the

obligation using a pre-tax rate that reflects current market assessments of the time value of money

and the risks specific to the obligation.

2.20 Revenue Recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and

services in the ordinary course of the group’s activities. Revenue is shown net of value-added tax,

returns, rebates and discounts and after eliminating sales within the group.

The group recognises revenue when specific criteria have been met for each of the group’s activities as

described below. The group bases its estimates on historical results, taking into consideration the type

of customer, the type of transaction and the specifics of each arrangement.

Sales of Goods

For the supply of goods, revenue is recognised at a point in time, as soon as the control relating to the

title of the goods have been transferred to the customer and the entity has a present right to payment.

In practice, this is at the shipment date or after installation (if applicable). Contracts related to sale of

goods are typically the following:

–System parts

–Consumables

–Material offtake and collaboration agreements originating from Avantium Renewable Polymers,

Avantium Renewable Chemistries and other early stage technologies.

A receivable is recognised when the goods are shipped as this is the point in time that the

consideration is unconditional because only the passage of time is required before the payment is due.

Construction Contracts

Revenue and expenses related to Flowrence systems are accounted over time, which recognises

revenue as performance of the contract progresses. The company satisfies the criteria prescribed

under IFRS 15 for recognising revenue over time, since each sales contract agreed with a customer

relates to the creation of a Flowrence system, a tailor-made machine, with varying components for the

various chemistries which cannot be used for alternative purposes by the company and the company

has an enforceable right to payment for the performance completed to date. The customer has full

control over the Flowrence as it is being created. The customer can direct the specifics of how the

asset is to be used and has input on the varying components of the Flowrence being created. The

stage of completion is measured by referring to the contract costs incurred up to the end of the

reporting period as a percentage of total estimated costs for each contract. Costs incurred in the year

in connection with future activity on a contract are excluded from contract costs in determining the

stage of completion.

On the balance sheet, the group reports the net contract position for each contract as either a contract

asset or a contract liability. A contract represents a contract asset where costs incurred plus

recognised profits (less recognised losses) exceed progress billings; a contract represents a contract

liability where the opposite is the case.

Variations in contract work, claims and incentive payments are included in contract revenue to the

extent that may have been agreed with the customer and can be reliably measured.


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Where the income of a revenue contract cannot be estimated reliably, contract revenue that is likely to

be recovered is recognised to the extent of contract costs incurred. Contract costs are recognised as

expenses in the period in which they are incurred.

Multiple Element Arrangements

In certain circumstances, it is necessary to apply the recognition criteria to the separately identifiable

components of a single transaction in order to reflect the substance of the transaction. Conversely, the

recognition criteria are applied to two or more transactions together when they are linked in such a

way that the commercial effect cannot be understood without reference to the series of transactions

as a whole.

The group offers arrangements whereby a customer purchases systems and installations services

under one arrangement. When such multiple element arrangements exist, an element is accounted for

as a separable element if it has value to the customer on a standalone basis and the fair value can be

determined objectively and reliably. The transaction price is allocated to each separate element based

on the stand-alone selling prices.

When Catalysis systems revenues and installation service revenues are identified as separable

elements in a multiple element transaction, the systems revenue recognised is determined based on

the standalone selling price of the systems in relation to the transaction price of the arrangement

taken as a whole and is recognised as discussed above. The revenue relating to the installation service

element, which represents the standalone selling price of the installation services in relation to the

transaction price of the arrangement, is recognised on completion of the installation services.

This separation is justified due to the fact that the supply and installation of the goods are offered to

the customer separately as the installation can also be executed by an independent third party.

Timing of payment by the customer from the supply of goods is based on the contractual identified

instalments. This could result, on a product by product basis, in advanced payments. These amounts

are reported as contract liabilities on the balance sheet under other current liabilities.

Sales of Services

Revenue from the sales of services is recognised over time recognising revenue based on the actual

services provided to the end of the accounting period as a proportion of the total services to be

performed.

Timing of payment by the customer from sale of services is based on the contractual identified

technical milestones. This could result, on a project by project basis, in contract assets or contract

liabilities. These amounts are reported on the balance sheet under other receivables or other current

liabilities.

As part of the Renewable Chemistries business development agreements, which constitute solely a

step-in, management identified this as one-off revenue recognition at moment of signing the

agreements, in accordance with IFRS 15, since it is deemed that once the agreement is signed, no

future obligation is to be fulfilled.

As part of the Renewable Polymers business non-refundable technical due diligence procedures were

performed. At the completion of the technical due diligence procedures revenue was recognised.

If circumstances arise that may change the original estimates of revenues, costs or extent of progress

toward completion, estimates are revised. These revisions may result in increases or decreases in

estimated revenues or costs and are reflected in income in the period in which the circumstances that

give rise to the revision become known by management.

2.21 Grants

Grants and subsidies from third parties are recognised at their fair value when there is a reasonable

assurance that the grant will be received, and the group will comply with all attached conditions. Any

outstanding receivables related to these grants are recorded as other receivables under current

receivables.

Government grants pre-financed amounts received are deferred and recognised in the income

statement over the period necessary to match them with the costs that they are intended to

compensate.

Government grants relating to property, plant and equipment are included in non-current liabilities as

deferred government grants and are credited to the income statement on a straight-line basis over the

expected lives of the related assets.

2.22 Interest Income and Expense

Interest income and interest expense is recognised using the effective interest method. When a loan or

receivable is impaired, the group reduces the carrying amount to its recoverable amount, being the

estimated future cash flow discounted at the original effective interest rate of the instrument and

continues unwinding the discount as interest income. Interest income on impaired loan and receivables

is recognised using the original effective interest rate.

All borrowing costs are recognised in the income statement using the effective interest rate method.


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2.23 Leases

The group leases various offices and a number of vehicles. Rental contracts are generally made for

fixed periods of 3 to 10 years but may have extension options. Lease terms are negotiated on an

individual basis and contain a wide range of different terms and conditions. The lease agreements do

not impose any covenants, but leased assets may not be used as security for borrowing purposes.

Contracts may contain both lease and non-lease components. The group allocates the consideration in

the contract to the lease and non-lease components based on their relative stand-alone prices.

Leases are recognised as right-of-use asset and a corresponding liability at the date at which the

leased asset is available for use by the group. Each lease payment is allocated between the lease

liability and finance cost. The finance cost is charged to the statement of comprehensive income over

the lease period so as to produce a constant periodic rate of interest on the remaining balance of the

liability for each period. Right-of-use asset are depreciated on a straight-line basis over the remaining

term of the lease or over the remaining economic life of the asset, if this is judged to be shorter than

the lease term.

Assets and liabilities arising from a lease are initially measured on a present value basis.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and

conditions. The lease agreements do not impose any covenants other than the security deposits in the

leased assets that are held by the lessor. Leased assets may not be used as security for borrowing

purposes.

Lease Liability

Lease liabilities include the net present value of the following lease payments:

–fixed payments (including in-substance fixed payments), less any lease incentives receivable;

–variable lease payments are based on an index or a rate - decommissioning costs; and

–payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that

option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be

determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have

to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic

environment with similar terms and conditions.

The group is exposed to potential future increases in variable lease payments based on an index or

rate, which are not included in the lease liability until they take effect. When adjustments to lease

payments based on an index or rate take effect, the lease liability is reassessed and adjusted against

the right-of-use asset.

Right-of-Use Assets

Right-of-use assets are measured at cost comprising the following:

–the amount of the initial measurement of the lease liability;

–any lease payments made at or before the commencement date less any lease incentives received

- any initial direct costs; and

–onerous contract provisions.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease

term on a straight-line basis. If the group is reasonably certain to exercise a purchase option, the right-

of-use asset is depreciated over the underlying asset's useful life.

Payments associated with short-term leases and leases of low-value assets are recognised on a

straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12

months or less. Low-value assets comprise IT-equipment and small items of office furniture.

The group has no financial lease obligations.

2.24. Financial Liability

Financial liabilities are recognised when the group becomes a party to the contractual provision of a

financial instrument. Financial liabilities are derecognised when the group's obligations specified in the

contract expire or are discharged or cancelled.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net

of directly attributable transaction costs.


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2.24.1 Classification

The Group classifies all financial liabilities as subsequently measured at amortised cost, except for

derivatives. Any difference between the proceeds and redemption value is recognised in the income

statement over the period of the loans and short-term borrowings using the effective interest method.

Financial liabilities are classified as current liabilities unless the Group has an unconditional right to

defer settlement of the liability for at least 12 months after the balance sheet date.

2.24.2 Recognition and Measurement

The derivatives are measured initially and subsequently at fair value through profit or loss at each

reporting date. Gains and losses resulting from the fair value remeasurement are recognised in the

income statement as fair value gains(losses) on financial instruments.

2.25 Earnings per Share

Basic Earnings per Share

Basic earnings per share is calculated by dividing:

–The profit attributable to owners of the company, excluding any costs of servicing equity other

than ordinary shares

–By the weighted average number of ordinary shares outstanding during the financial year,

excluding treasury shares (note 14).

Diluted Earnings per Share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to

take into account:

–The after-income tax effect of interest and other financing costs associated with dilutive potential

ordinary shares

–The weighted average number of additional ordinary shares that would have been outstanding

assuming the conversion of all dilutive potential ordinary shares.

2.26 Cash Flow Statement

The cash flow statement is presented using the indirect method. Cash flow in foreign currencies are

converted at the exchange rate on the date of the cash flow, or based on the average rate. A

distinction is made in the cash flow statement between the cash flows from operating, investment and

financing activities.

3. Financial Risk Management

3.1 Financial Risk Factors

The group’s activities expose it to a variety of financial risks: market risk (including currency risk,

interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The group’s

risk management programme focuses on the unpredictable nature of financial markets and seeks to

limit any potential adverse effects on financial performance.

Risk management is carried out by the central Finance & Accounting department (Group F&A) under

policies approved by the Management Board. Group F&A identifies, evaluates and covers financial

risks in close cooperation with the group’s operating units. The board provides principles for overall

risk management, as well as written policies covering specific areas such as foreign-exchange risk,

interest rate risk, credit risk, use of non-derivative financial instruments, and investment of excess

liquidity.

Financial instrument by category

Non-Current Financial assets as at December 31:


in Euro x 1,000	Notes	2022	2021
Prepayments	9	15,248	—

Non-Current Financial liabilities as at December 31:


in Euro x 1,000	Notes	2022	2021
Borrowings	16	12,856	—
Lease liability	7	10,046	9,099
Financial liability	18	14,091	—


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Current Financial assets as at December 31:


in Euro x 1,000	Notes	2022	2021
Trade receivables	9	2,634	1,015
Prepayments	9	1,179	367
Other receivables	9	4,372	5,657
Cash and cash equivalents	10	64,870	34,911

Current Financial liabilities as at December 31:


in Euro x 1,000	Notes	2022	2021
Trade payables	15	8,628	4,714
Other liabilities	15	14,614	7,123
Deferred government grant	15	8,496	4,913
Lease liabilities	7	1,897	1,604

The carrying amounts of these financial assets and liabilities are assumed to approximate their fair

values due to their short-term nature. Also refer to note 15 for an overview of trade and other

payables.

Interest Rate Risk

The most significant interest rate risk for the company relates to borrowings (refer to note 16). As at 31

December 2022 the borrowings of the company consisted of a first drawdown on a three-year Debt

Facilities Agreement amounting to €15.0 million. This Debt Facilities Agreement is based on EURIBOR.

The accrued cash and PIK interest expense at 31 December 2022 amounted to €182,000.

Interest rate risk is the risk that changes in the market interest rates affect the fair value or cash flows

of a financial instrument. If market interest rates had been 50 basis points higher on average during

2022, with all other variables held constant, net interest expenses for the year would have been

€8,125 higher (2021: nil). The opposite applies in the case of a 50 basis points decrease in the interest

rates.

Currency Risk

The group operates internationally and is exposed to foreign exchange risk primarily in relation to the

US dollar. Foreign exchange risk arises from future commercial transactions, recognised assets and

liabilities. Management has set up a policy that requires group companies to manage their foreign

exchange risk against their functional currency. The group companies are required to close commercial

transactions in euros. Certain US-based customers negotiate US-dollar contracts. There are a limited

number of these contracts, and the group companies can only close these with management’s written

approval. The group’s operations are therefore not subject to significant foreign exchange rate risks.

Foreign exchange risk arises when future commercial transactions or recognised assets and liabilities

are denominated in a currency that is not the entity’s functional currency.

The group outstanding trade receivables in US dollars of $3,000 (2021: $nil). The group had no trade

receivables in another foreign currency. The group had outstanding trade payables in US dollars of

$65,000 (2021: $1,545,000), in British pound of £13,000 (2021: £13,000) and in Japanese Yen of

¥347,000 (2021: ¥8,404,000).

If at 31 December 2022, the euro had weakened by 10% against the US dollar with all other variables

held constant, post-tax result for the year would have been €6,000 higher (2021: €132,000 higher).

The US dollar cash position as at 31 December 2022 is $19,039 (2021: $26,069). The Japanese Yen

cash position as at 31 December 2022 is ¥2,907,000 (2021: ¥5,134,000). the group had no cash

position in other foreign currencies.

Credit Risk

Credit risk is managed on group basis. The group does not have any significant concentrations of

credit risk and is limited to outstanding trade receivables, cash and cash equivalents. On 31 December

2022, the largest single client exposure consisted of 24% of the outstanding trade receivables. The

group clients are subject to creditworthiness tests. Sales are subject to payment conditions varying

between payments in advance and 30 days after invoice date. For certain projects, deviations to this

rule may apply only after approval of group F&A, in which case additional security, including

guarantees and documentary credits, may be required. Management does not expect any losses from

non-performance by its clients nor from concentration of this risk.

In 2022, €0 (2021: €0) of trade or other receivables was written off; €1,837,000 was past due, of

which 58% had been paid before 4 March 2023.

The amount of trade and other receivables past due as at December 31, were as follows:


in Euro x 1,000	2022	2021
More than 1 month past due	1,425	181
More than 3 months past due	65	—
More than 6 months past due	347	283
	1,837	464


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Impairment provisions for trade receivables are recognised based on the simplified approach within

IFRS 9 to measuring expected credit losses which uses a lifetime expected loss allowance for all trade

receivables and contract assets.

To measure the expected credit losses, trade receivables and contract assets have been grouped

based on shared credit risk characteristics and the days past due. The contract assets relate to

unbilled work in progress and have substantially the same risk characteristics as the trade receivables

for the same types of contracts. The group has therefore concluded no provision for credit losses is

required on trade receivables and contract assets, since after careful consideration of each customer’s

payment profile and likelihood to default on payments, the credit losses was deemed to be immaterial.

Trade receivables and contract assets are written off where there is no reasonable expectation of

recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the

failure of a customer to engage in a repayment plan with the group, and a failure to make contractual

payment for a period of greater than 6 months past due. Management has therefore concluded that a

provision of doubtful debt of €150,000 on the trade receivables had to be recognised as at 31

December 2021. As at 31 December 2022 this position remained unchanged.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of

receivable mentioned above. The group does not hold any collateral as security. The long-term credit

ratings of banks used by the group, as at 31 December 2022 at Moody’s and S&P subsequently, are as

follows. Group funds are held at Rabobank with a long-term credit rating of Aa2 and A+, ABN AMRO

bank with a long-term credit rating of between A1 and A, and at ING Bank with a long-term credit

rating between A- and A+.

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the

availability of funding through an adequate amount of committed credit facilities and the ability to

close out market positions.

The table below analyses the group’s financial liabilities into relevant maturity groupings based on the

remaining period at the balance sheet to the contractual maturity. The amounts disclosed in the table

are the contractual discounted cash flows for continuing operations. The specific time buckets are not

mandated by the standard but are based on a choice of management. The tables include both interest

and principal cash flows:

As at December 31, 2022:


in Euro x 1,000	Less than 1 year	Between 1 and 2 years	Between 2 and 5 year	Over 5 years	Total
Borrowings	—	—	(12,856)	—	(12,856)
Lease liabilities	(1,897)	(1,791)	(6,378)	(1,877)	(11,943)
Financial liability	—	(14,091)	—	—	(14,091)
Trade payables	(8,628)	—	—	—	(8,628)
Deferred government grant	(8,496)	—	—	—	(8,496)
Other current liabilities	(14,614)	—	—	—	(14,614)
	(33,634)	(15,882)	(19,234)	(1,877)	(70,627)

As at December 31, 2021:


in Euro x 1,000	Less than 1 year	Between 1 and 2 years	Between 2 and 5 year	Over 5 years	Total
Lease liabilities	(1,604)	(1,497)	(5,408)	(2,194)	(10,703)
Trade payables	(4,714)	—	—	—	(4,714)
Deferred government grant	(4,913)	—	—	—	(4,913)
Other current liabilities	(7,123)	—	—	—	(7,123)
	(18,354)	(1,497)	(5,408)	(2,194)	(27,453)

The carrying amounts of these financial liabilities are assumed to approximate their fair values due to

their short-term nature.

Fair value

The group applies the following hierarchy for determining and disclosing the fair value of the financial

instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: Valuation techniques whereby the lowest-level input as significant for valuation at fair value is

directly or indirectly observable;


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Level 3: Valuation techniques whereby the lowest level input as significant for valuation at fair value is

not observable.

Changes in the fair value of the financial instruments measured at fair value are recognised in the

Income Statement.

Trade and Other Receivables, Payables to Suppliers, Other liabilities due to expire within one year are

included in the financial statements at amortized cost. The amortized cost is considered to be a

reflection of fair value due to the short duration.

The fair value measurement for borrowings are categorized within level 3 of the fair value hierarchy.

The fair value is determined based on the discounted cash flow method.

The financial liability (warrants) are categorized within level 2 of the fair value hierarchy as this is not a

trading instrument.

3.2 Capital Management

The group’s objective when managing capital is to safeguard its ability to continue as a going concern

(also refer to 2.1.1) in order to provide returns for shareholders and benefits for other stakeholders, and

to maintain an optimal capital structure to reduce the cost of capital. To maintain or adjust the capital

structure, the group monitors capital on the basis of its adjusted solvency ratio. This ratio is calculated

as adjusted equity divided by the adjusted balance sheet total.

The adjusted equity is calculated as equity:

–Minus the intangible assets, participating interests and receivables from shareholders

The adjusted balance sheet total is calculated as total assets:

–Minus the intangible assets, participating interest, receivables from shareholders and shares held

in the own company

The adjusted solvency ratios as at December 31, were as follows:


in Euro x 1,000	2022	2021
Equity attributable to owners of the parent	81,128	50,026
Intangible assets	(1,974)	(1,835)
Adjusted equity total	79,154	48,191
Adjusted balance sheet total	160,059	75,840
Adjusted solvency ratio	49%	64%

4. Critical Accounting Estimates and Judgments

The preparation of financial statements in accordance with IFRS requires the use of certain accounting

estimates. It also requires management to exercise its judgement in the process of applying the

group's accounting policies. Estimates and judgments are continually evaluated, and are based on

historical experience and other factors, including expectations of future events that are believed to be

reasonable under the circumstances.

The resulting accounting estimates will, by definition, seldom equal the related actual results.

The estimates and assumptions that have a significant risk of causing a material adjustment to the

carrying amounts of assets and liabilities within the next financial year are addressed below.

Income Taxes

The group, which has a history of recent tax losses, recognises deferred tax assets arising from unused

tax losses or tax credits only to the extent that the relevant fiscal unity has sufficient taxable

temporary differences or there is convincing other evidence that sufficient taxable profit will be

available against which the unused tax losses or unused tax credits can be utilised by the fiscal unity.

Management’s judgment is that there is not a high degree of certainty that sufficient profits will be

earned to utilise the losses. Consequently, based on management’s judgment, sufficient convincing

other evidence is not available, and a deferred tax asset is therefore not recognised.

Share-based Payments

Share options granted to employees are measured at the fair value of the options granted (indirect

method of measurement). For the company’s share option plan, management’s judgment is that the

Black-Scholes valuation method is most appropriate for determining fair values. The assumptions and

estimates used in the valuation are further discussed in note 13 to the consolidated financial

statements.


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The result of the share option valuations and the related compensation expense is dependent on the

model and input parameters used. Even though management considers the fair values reasonable and

defensible based on the methodologies applied and the information available, others might derive at a

different fair value for the options granted under the company’s share option plan.

Research and Development Expenditures

The project stage forms the basis in the decision of whether costs made for the group’s product

development programmes should be capitalised or not. Management judgment is required in

determining when the group should start capitalising development costs as intangible assets.

Management determined that for a system, commercial feasibility is, in general, probable when the

group has built a successful prototype and has interested customers for the commercial product.

Management determined that for product development, (note 2.6) commercial feasibility is, in general,

probable when the group has successfully completed essential testing phases and are in a late stage

of discussions with potential partners for commercialisation opportunities.

Revenue Recognition

The group recognises revenue over time or at point in time depending on the agreed contract

performance obligations. For Flowrence® systems and services contracts the group recognises

revenue over time as performance of the contract progresses. The performance on a contract relates

to fixed-price contracts to construct tailor-made Flowrence® systems which the customers control and

cannot be of alternative use to the company. For the Flowrence® systems, the stage of completion is

measured by reference to the total contract costs incurred up to the end of the reporting period as a

percentage of total estimated costs for each contract. Value is delivered to customers up to each of

these points. For services, in order to recognise revenue over time, the group is required to estimate the

series of distinct services performed to date as a proportion of the total services to be performed,

where also stage gates are present, and value is added up to that point. To define the recognised

revenues, the group estimates the required total costs (Flowrence®) or man-hours (services) to

complete each project. On a regular basis a review of the total costs or man-hours is performed.

Going Concern

For the critical accounting judgment with regard to the going concern assumption, see note 2.1.1.

Government Grants

The group uses the percentage-of-completion (POC) method in accounting for its government grants it

has been awarded. For grant programmes, use of the POC method requires the group to estimate the

services/actions performed to date as a proportion of the total services or actions to be performed. For

further considerations and assumptions with regard to the critical accounting estimate in relation to

government grants, see note 2.21.

Impairment

Judgments and estimates are required, not only to determine whether there is an indication that an

asset may be impaired, but also whether indications exist that impairment losses previously

recognized may no longer exist or may have decreased (impairment reversal). After indications of

impairment have been identified, judgments and estimates are also involved in the determination of

the recoverable amount of a non-current asset. The recoverable amount is determined based on the

higher of the fair value less cost to sell and the value-in-use. These involve estimates of expected

future cash flows (based on future growth rates and remaining useful life) and residual value

assumptions, as well as discount rates to calculate the present value of the future cash flows.


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Notes to the Consolidated Statement of Financial Position

5. Property, Plant and Equipment


in Euro x 1,000	Leasehold improvements	Laboratory equipment	Hardware	Office furniture and equipment	Construction in progress	Total
At 1 January 2021
Cost	25,364	34,519	3,174	2,127	4,060	69,244
Accumulated depreciation	(12,305)	(26,999)	(2,712)	(2,030)	—	(44,045)
Net book amount	13,058	7,521	463	97	4,060	25,198
Year ended 31 December 2021
Opening net book amount	13,058	7,521	463	97	4,060	25,199
Additions	847	166	55	3	2,855	3,926
Disposals	—	(80)	—	—	—	(80)
Transfers	—	137	—	—	(137)	—
Accumulated depreciation on disposals	—	59	—	—	—	59
Impairment charge	—	—	—	—	—	—
Depreciation charge	(3,377)	(2,154)	(182)	(66)	—	(5,778)
Closing net book amount	10,528	5,649	336	34	6,777	23,325
At 31 December 2021
Cost	26,209	34,743	3,229	2,131	6,777	73,089
Accumulated depreciation	(15,682)	(29,094)	(2,893)	(2,096)	—	(49,765)
Net book amount	10,528	5,649	336	34	6,777	23,324
Year ended 31 December 2022
Opening net book amount	10,528	5,649	336	34	6,777	23,324
Additions	48	21	75	76	43,006	43,226
Disposals	—	—	—	—	—	—
Transfers	—	107	3	—	(110)	—
Accumulated depreciation on disposals	—	—	—	—	—	—
Impairment charge	(355)	(66)	(11)	(3)	—	(435)
Depreciation charge	(3,501)	(2,018)	(161)	(42)	—	(5,721)
Closing net book amount	6,720	3,693	242	66	49,674	60,394
At 31 December 2022
Cost	25,902	34,804	3,296	2,204	49,674	115,880
Accumulated depreciation	(19,182)	(31,112)	(3,054)	(2,138)	—	(55,486)
Net book amount	6,720	3,693	242	66	49,674	60,394

The additions in property plant and equipment during 2022 predominantly related to investments made by the Avantium Renewable Polymers segment as the construction of the FDCA Flagship Plant started in April 2022. The Avantium

Renewable Chemistries segment invested mainly in safety related upgrades for the Pilot Plant in Delfzijl and the Avantium R&D Solutions segment invested in product innovation and equipment upgrades. On 31 December 2022 an impairment

loss was recognised which predominantly related to an impairment of leasehold improvements in the Pilot Plant in Delfzijl. The leasehold improvement was no longer operating as intended by management.

The property, plant and equipment of €60,394,000 are pledged under the Debt Facilities Agreement.


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6. Intangible Assets


(In Euro x 1,000)	Development costs	Software	Intellectual Property	License rights	Other	Total
At 1 January 2021
Cost	2,159	7,193	433	—	1,064	10,848
Accumulated amortization and impairment	(2,159)	(7,163)	—	—	(967)	(10,289)
Net book amount	—	30	433	—	97	559
Year ended 31 December 2021
Opening net book amount	—	30	433	—	97	559
Additions	—	6	—	1,326	—	1,331
Amortization charge	—	(36)	—	—	(20)	(56)
Closing net book amount	—	—	433	1,326	77	1,835
At 31 December 2021
Cost	2,159	7,199	433	1,326	1,064	12,180
Accumulated amortization and impairment	(2,159)	(7,199)	—	—	(987)	(10,345)
Net book amount	—	—	433	1,326	77	1,835
Year ended 31 December 2022
Opening net book amount	—	—	433	1,326	77	1,835
Additions	—	174	—	—	—	174
Transfers	—	77	—	—	(77)	—
Amortization charge	—	(35)	—	—	—	(35)
Closing net book amount	—	216	433	1,326	—	1,974
At 31 December 2022
Cost	2,159	7,450	433	1,326	987	12,354
Accumulated amortization and impairment	(2,159)	(7,234)	—	—	(987)	(10,380)
Net book amount	—	216	433	1,326	—	1,974

The additions in intangible assets during 2022 predominantly relate to the implementation of a new ERP software package for the company.

The Intellectual Property of €433,000 is pledged under the Debt Facilities Agreement.


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Development Costs

The development costs consist of the development and prototype expenses of the Flowrence system

and are all fully amortised.

Software and Other Intangibles

Software mainly comprises purchased general laboratory and office-related software.

Other intangibles are the in-kind contribution of a shareholder relating to software at the foundation of

the group and compensation paid to a third party to exclusively use parts of their technology.

Intellectual Property

Following the Liquid Light acquisition in 2016, the company records intellectual property (patent

portfolio acquired) on its consolidated balance sheet, which will subsequently be lowered with

accumulated amortisation the following years, when the technology on which the intellectual property

is filed, is ready to deploy commercially. As at 31 December 2022, the recoverable amount of the

intellectual property exceeds the carrying amount.

Total of research expenditures recognised as an expense in the consolidated statement of

comprehensive income amounted to €1,037,000 (2021: €1,011,000) and mainly constitute of early

stage research trials.

License Rights

The license rights consists of the licenses acquired for technologies not owned or developed by the

company.

Included in the license rights is the Eastman license acquired by Avantium Renewable Polymers during

2021. As part of the license agreement, royalty fees will be payable to Eastman. The fees will equal to

$20 USD per metric ton of Licensed Products produced from the FDCA Flagship Plant. The

commencement of the operations will be in 2024. The foregoing running royalty will be payable by

Avantium in shares of Avantium N.V. (in equivalent value) on a semi-annual basis for the first two

years of operation of the FDCA Flagship Plant, after which all such payments will be paid in cash.

Avantium may decide how it proposes to settle the royalty fees for the first two years.

7. Leases

This note provides information for leases where the group is a lessee.

Amounts Recognised in the Balance Sheet

The balance sheet shows the following amounts relating to leases:


in Euro x 1,000	31-12-2022	31-12-2021
Properties	9,893	9,372
Motor vehicles	52	107
Total right-of-use assets	9,945	9,479


in Euro x 1,000	31-12-2022	31-12-2021
Current lease liabilities	1,897	1,604
Non-current lease liabilities	10,046	9,099
Total Lease liabilities	11,943	10,703

Additions to the right-of-use assets during the 2022 financial year were €1,183,138 (2021: nil). The

increase in the right-of-use assets are due to new lease agreements and modifications in the existing

lease agreements. The lease modifications are due to lease terms being modified and lease

assumptions changing.

Amounts Recognised in the Statement of Comprehensive Income

The statement of comprehensive income shows the following amounts relating to leases:


in Euro x 1,000	2022	2021
Properties	2,323	1,842
Motor vehicles	64	161
Total depreciation charge of right-of-use assets	2,387	2,003


in Euro x 1,000	2022	2021
Interest expense included in finance cost	316	230
Total interest charge on lease liabilities	316	230


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The cash flow net of VAT related to principal elements of the lease payments amounted to €1,947,457

(2021: €1,663,000).

Some of the lease agreements contain variable lease elements that are linked to the usage of the

lease, which is not included in the measurement of the lease liability. The variable lease payments for

the year not included in the measurement of the lease liability amounted to €810,000 (2021:

€349,000).

The short term and low value lease expenses for 2022 amounted to €67,000 (2021: €54,000) .

8. Inventories


(In Euro x 1,000)	31-12-2022	31-12-2021
Raw materials	1,136	883
Work in progress	431	355
	1,567	1,238

The costs of inventories recognised as an expense and included in raw materials and contract costs,

amounted to €316,000 (2021: €260,000).

9. Trade and Other Receivables


(In Euro x 1,000)	31-12-2022	31-12-2021
Trade receivables	2,634	1,015
Less: Allowance for doubtful debt	(150)	(150)
Social security and other taxes	997	881
Prepayments: Non-current and current	16,427	367
Contract assets	2,379	3,514
Other receivables	996	1,262
Non-current and Current portion	23,283	6,888

Prepayments includes a contribution in kind recognised by Avantium RNP Flagship B.V. on 31 March

2022, which consists of shares in Avantium Renewable Polymers B.V. paid upfront to Worley for

services that will delivered under the contraction agreement for the FDCA Flagship plant. The

prepayment is released equally over 24 months starting from April 2022. As at 31 December 2022, the

remaining balance is €6.2 million. Prepayments also includes a prepaid expense of €11.3 million

recognised by Avantium N.V. The prepaid expense relates to the warrants issued, as part of the debt

financing agreement, to the respective banks. The prepayment will be expensed as a finance cost at

each drawdown of the facility on a pro-rata basis. As at 31 December 2022 the prepaid expense

balance relating to the warrants is €9.0 million. Refer to note 3.1 for the split between the non-current

and current prepayments.

Contract assets relating to systems contracts are unbilled revenues, where the company has

recognised revenue to date under the percentage-of completion method, however is not yet in the

position to bill these revenues to customers as the invoicing milestone has not yet been reached.

Contract assets relating to services are unbilled revenues, where the company has rendered particular

services over time for which the invoicing milestone has not yet been reached.

The other receivables comprise primarily of funding to be received in relation to government grants

where the company has already complied with the attached conditions under the specific grant

program (€576,000) and deposits held at third parties (€336,000).

In 2022, €0 (2021: €0) of trade receivables was written off and €1,837,000 (30 days or more after

invoice date) was past due, of which 58% was paid before 4 March 2023 and of the remaining 42%,

19% is for a customer for which a provision for doubtful debt was recognised.

Trade receivables and contract assets are written off where there is no reasonable expectation of

recovery. The company assessed the trade receivables balance as at 31 December 2022 and

concluded that the provision for doubtful debt of €150,000 recognised during 2020 still represents the

expectation of recovery (see also note 3.1). The carrying amounts of these financial assets are

assumed to approximate their fair values.

Impairment provisions for trade receivables are recognised based on the simplified approach within

IFRS 9 to measuring expected credit losses which uses a lifetime expected loss allowance for all trade

receivables and contract assets.

To measure the expected credit losses, trade receivables and contract assets have been grouped

based on shared credit risk characteristics and the days past due. The contract assets relate to

unbilled work in progress and have substantially the same risk characteristics as the trade receivables

for the same types of contracts. The group has therefore concluded no provision for credit losses is

required on trade receivables and contract assets, since after careful consideration of each customer’s

payment profile and likelihood to default on payments, the credit losses was deemed to be immaterial.

Trade receivables of €2,634,000 are pledged under the Debt Facilities Agreement.


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10. Cash and Cash Equivalents


(In Euro x 1,000)	31-12-2022	31-12-2021
Cash at bank and on hand	58,370	33,411
Restricted cash	6,500	1,500
Cash and cash equivalents for cash flow purposes	64,870	34,911

The carrying amounts of these financial assets are assumed to approximate their fair values. A

notional cash pool agreement is in place for all Rabobank accounts where balances are netted on a

daily basis. Within the cash pool, there are €0 overdrafts.

The cash and cash equivalents presented in the consolidated statement of financial position and the

consolidated statement of cash flow include restricted cash of €6.5 million. Of the €6.5 million, €5.0

million relates to a cash deposit held in the name of Avantium N.V. for any potential future equity

funding needs during the construction of the FDCA Flagship Plant. It has been agreed with the

consortium of lenders that Avantium Renewable Polymers B.V. will at all times have sufficient funding

available for the construction of the FDCA Flagship Plant. The reserved cash is available to meet any

funding shortfall that may arise, and this is assessed together with the Lenders upon each utilization

of the debt facility. The cash in this deposit account remains at all times in full control and ownership

of Avantium and its consolidated group. The residual €1.5 million, relates to a deposit held with

Rabobank, which represents an amount equal to the estimated required guarantee capacity for the

short term needs of the company. As at 31 December 2022, €772,000 of this guarantee capacity has

utilised for issued bank guarantees to third parties. For further information on commitments issued to

third parties, refer to note 28.

11. Share Capital and Other Reserves

Avantium N.V. listed on Euronext Amsterdam and Euronext Brussels.

11.1 Ordinary Shares

On 14 April 2022, Avantium successfully raised €45.0 million by means of a public offering with a

priority allocation for its existing shareholders, a retail offering and a private placement. The company

issued 11,250,000 new shares, which represented 36% of the issued share capital. Pricing of the

capital increase was fixed at €4.00 per share, a 20% discount versus the previous closing price.

The authorised share capital at 31 December 2022 therefore amounted to €10,000,000 consisting of

100,000,000 ordinary shares, with a nominal value of €0.10 each. The issued share capital at 31

December 2022 comprises 42,605,893 ordinary shares (2021: 31,286,447). In 2022, 69,446 options

were exercised by employees, from these option exercises, 69,446 resulted in additional ordinary

shares issued. At 31 December 2022, zero (2021: zero) shares were held by the Stichting

Administratiekantoor Avantium (the Foundation) and nil employee shares were repurchased. All

42,605,893 shares issued are fully paid and stated at its par value of €0.10 each.

11.2 Other Reserves

The costs of equity settled share-based payments to employees are recognised in the statement of

comprehensive income, together with a corresponding increase in equity during the vesting period,

taking into account (deferral of) corporate income taxes. The accumulated expense of the share

incentive plan recognised in the statement of comprehensive income is shown as part of the equity

category ‘other reserves’ in the consolidated statement of changes in equity.

Additionally, included in the "other reserve " category is the share-based payment for the Eastman

license acquired in 2021. The settlement of the share-based payment will be in two equal instalments.

The first instalment will be made at the starting date of construction of the FDCA Flagship Plant or 8

months after the Final Investment Decision, which ever is sooner. The second instalment will be made

at the completion date of construction of the FDCA Flagship Plant or 24 months after the Final

Investment decision, which ever is sooner. Avantium has the option to settle the outstanding amounts

in shares or cash.

On 31 March 2022, a profit was recognised on the sale of the 22.6% shareholding to the non-

controlling interest parties. Refer to note 2.2.2. for the detail on the change in ownership in Avantium

Renewable Polymers B.V.

11.3 Currency Translation Difference

The group does not hold a company reporting in any other currency than euros and therefore does not

hold a currency translation reserve.

11.4 Treasury Shares

The total value of treasury shares outstanding at 31 December 2022 is €616,000 (2021: €616,000).

12. Non-controlling interest

The table summarises the information relating to the Group's subsidiary, Avantium Renewable

Polymers B.V., that has a Non-Controlling Interest amounting to 22.64%.


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On 31 March 2022, there was a change in ownership of Avantium Renewable Polymers B.V., a

subsidiary of Avantium N.V. Worley Nederland B.V. and Bio Plastics Investment Groningen B.V.

together have acquired a 22.6% shareholding in Avantium Renewable Polymers B.V., while Avantium

continues to hold 77.4% of the equity.

Summarised balance sheet

Avantium Renewable Polymers B.V.


	(In Euro x 1,000)	31-12-2022
	Non-current assets	61,993
	Non-current liabilities	(17,244)
	Net non-current assets	44,749

	Current assets	21,995
	Current liabilities	(22,389)
	Net current assets	(394)

	Accumulated Non-Controlling interest	10,042

Summarised Statement of Comprehensive Income

Avantium Renewable Polymers B.V.


	(In Euro x 1,000)	2022
	Revenue	6,056
	Other Income	3,660
	Net operating expenses	(16,633)
	EBITDA	(6,917)
	Loss for the period	(11,026)

	Loss allocated to Non-Controlling interest	(1,970)

The loss allocated to Non-Controlling interest constitutes to 22.64% of the loss for the period for

Avantium Renewable Polymers B.V.

Summarised Statement of Cash Flow

Avantium Renewable Polymers B.V.


	(In Euro x 1,000)	2022
	Cash flows from operating activities	5,244
	Cash flows from investing activities	(42,366)
	Cash flows from financing activities	47,930
	Net increase in cash and cash equivalents	10,808

13. Share-based Payment

The group operates share-based compensation plans for its employees, which consists of an

Employee Share Option Plan (ESOP) and a Long-term Incentive Plan (LTIP). These plans are classified

as equity-settled share-based payment plans.

Long-term Investment Plan (LTIP)

The members of the Management Team are obligated to invest a percentage of their (net) bonus in

(depositary receipts for) shares to be delivered by the company under the LTIP. Each Investment share

relates to one share. The cash component of the bonus may, at the discretion of the relevant member

of the Management Team, also be invested in Investment shares. The Investment shares are subject to

a retention period of five years, during which the investment shares cannot be sold. After the end of

the retention period, the company will match the (depository receipts for) shares granted under the

LTIP at a 1:1 ratio, i.e. one Matching share is granted for each Investment share.

The entitlement to receive Matching shares will be reduced as follows in the case of termination: 100%

if the termination date is prior to the first anniversary of the date of Award; 66.67% if the termination

date is prior to the second anniversary but after the first anniversary of the date of Award; 33.33% if

the termination date is prior to the third anniversary but after the second anniversary of the date of

Award.

In 2022, 145,172 additional were granted under the Long term Investment Plan (LTIP). These awards

consist of 72,586 Investment shares and 72,586 Matching shares.

The movements in outstanding LTIP awards with the Management Board and senior management

can be summarised as follows:


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Long-term Investment Plan	2022		2021
	Number of awards	Weighted Average share price at grant date (in Euro)	Number of awards	Weighted Average share price at grant date (in Euro)
Number of awards outstanding 1 January	175,755	4.49	179,494	4.45
Number of matching shares forfeited	(7,737)	2.50	(3,739)	2.93
Number of awards granted (including matching shares)	145,172	3.07	—	—
Number of awards outstanding 31 December	313,190	3.88	175,755	4.49

LTIP awards outstanding at the end of the year had the following share price at grant date:


Grant date	Share price at grant date in Euro	Number of awards
1 July 2017	10.50	5,418
16 March 2018	5.36	65,155
21 March 2019	2.64	16,681
14 May 2020	3.59	88,501
18 May 2022	3.07	137,435
At 31 December 2022		313,190

The fair value of LTIP awards under the Long-term Investment Plan is determined by the share price at

grant date and the weighted average fair value of LTIP awards granted during 2022 was €3.07 per

award.

Employee Share Option Plan (ESOP)

On an annual basis and on certain other occasions set out in the plan rules, options under the

Employee Share Option Plan (ESOP) may be conditionally granted to eligible employees of the

company. The options will vest yearly over a three-year vesting period. The vested options have an

exercise period of five years after vesting, after which the option expires.

In 2022, 520,000 share options were granted. In 2022, 69,446 options were exercised with a

weighted-average share price of €3.57 at the date of exercise by the employees.

Further details on the grants in 2022 can be found in the table below.


Grant date	Plan	Number of ESOP options granted	Exercise price in Euro per option
19 May 2022	ESOP	459,000	3.07
30 December 2022	ESOP	61,000	3.65

The movements in outstanding options with the Management Board, senior management and certain

other employees can be summarised as follows:


Share Option	2022		2021
	Number of options	Weighted Average exercise price (in Euro)	Number of options	Weighted Average exercise price (in Euro)
Number of options outstanding 1 January	2,717,985	2.52	2,500,324	2.44
Number of options exercised	(69,446)	3.57	(167,688)	6.13
Number of options forfeited	(87,531)	4.27	(32,151)	4.25
Number of options granted	520,000	3.13	417,500	4.56
Number of options outstanding 31 December	3,081,008	2.55	2,717,985	2.52

Share options outstanding at December 31, 2022, amounted to 3,081,008. The exercise prices range

from €0.10 to €10.58. The weighted average remaining contractual term for options outstanding at

December 31, 2022, was 4.1 years.

Avantium N.V. has issued shares resulting from the exercise of options to the Stichting

Administratiekantoor Avantium (the Foundation).

The Foundation has issued depository receipts to members of the Management Board, senior

management and certain other employees. The Foundation is a consolidated special purpose entity set

up by Avantium N.V. The shares held by the Foundation, however, only represent the voting rights

associated with the issued shares and depository receipts representing all economic benefits issued by

the Foundation to members of the Management Board, senior management and certain other

employees, and consequently the shares held by the Foundation are not considered treasury shares.


	147

The number of options which are exercisable at the end of the period (i.e. vested, but not yet exercised)

amounted to 1,647,835.

The fair value of options under the equity-settled share-based payment plans is determined using the

Black-Scholes valuation model and the weighted average fair value of options granted during 2022

was €1.53 per option (2021: €1.98).

The significant inputs into this model were as follows:


	30 December 2022	19 May 2022
Exercise price	€3.65	€3.07
Volatility	45%	45%
Risk free interest rate	2.51%	1.03%
Dividend yield	—	—
Expected life	7.6 years	7.6 years
Early exercise rate	5%	5%

The historical volatility used is based on the volatility of the company’s own shares in combination

with the historical volatility of a peer group (five companies in total which are considered to be

comparable listed companies), of which the daily stock returns over a period equal to the maturities of

each plan related to the valuation dates was used.

During the year, a reclassification was made from other reserves to retained earnings, totalling

€139,147, to reflect the effect of exercised and expired options in 2022.

14. Earnings per Share

Earnings per Share

Earnings per share for the years 2022 and 2021 are derived below:


In Euro	31-12-2022	31-12-2021

Loss from continuing operations	(31,553,590)	(24,416,470)
Loss for the period - basic	(31,553,590)	(24,416,470)

Dilutive adjustments	—	—
Loss for the period - diluted	(31,553,590)	(24,416,470)

Weighted average number of ordinary shares -basic	39,390,687	29,756,527
Number
Options per end of the year	3,081,008	2,717,985
LTIP awards per end of the year	313,190	175,755
Effect of anti-dilutive securities	3,394,198	2,893,740

Weighted average number of shares - diluted	39,390,687	29,756,527
In Euro
Earnings per share - basic	(0.80)	(0.82)
Earnings per share - diluted	(0.80)	(0.82)

Basic earnings per share are calculated by dividing the net result for the period by the weighted

average number of ordinary shares. Diluted earnings per share are calculated by dividing the net

results for the period on a diluted basis by the weighted average number of shares on a diluted basis.

As the company is in a loss-making position, the options and LTIP awards have an antidilutive impact

on the diluted earnings per share, for this reason the options and LTIP awards for the year are not

considered in the calculation of diluted earnings per share.


	148

15. Trade and Other payables


(In Euro x 1,000)	31-12-2022	31-12-2021
Trade payables	8,628	4,714
Interest payable on borrowings	182	—
Social security and other taxes	776	360
Holiday pay and holiday days	1,463	1,338
Contract liabilities	1,623	1,328
Deferred government grants	8,496	4,913
Other current liabilities	10,569	4,096
	31,738	16,750

The other current liabilities comprise primarily of other staff pay related accruals (€2,232,000) and

accrued expenses (€7,654,000). Deferred government grants comprise of advances received in relation

to government grants. The carrying amounts of these financial liabilities are assumed to approximate

their fair values.

Contract liabilities relating to systems contracts are balances due to customers under construction

contracts. These arise if a particular milestone payment exceeds the revenue recognised to date under

the percentage-of-completion method. Contract liabilities relating to services are balances due to

customers under services contracts. These arise if particular services are to be rendered over time for

which a prepayment has been received.

The following table shows how much of the revenue recognised in the current reporting period relates

to carried-forward contract liabilities:


In Euro x 1,000)	2022	2021
Revenue recognized that was included in the contract liability balance at the beginning of the period
–Systems contracts	287	110
–Services contracts	(14)	385
–Renewable chemistries	—	—
	273	495

16. Borrowings


	In Euro x 1,000)	2022
	Balance as at 1 January 2022	—
	Debt Facilities drawdown	12,750
	Effective Interest	106
	Repayment of Debt Facilities	—
	Balance as at 31 December 2022	12,856


	In Euro x 1,000)	31-12-2022
	Current Debt Facilities	—
	Non-current Debt Facilities	12,856
	Total Debt Facilities	12,856

A three-year Debt Facilities Agreement of €90.0 million was signed with a consortium of lenders on 31

March 2022. This financing consists of three facilities. Facility A, €30.0 million, which is borrowed by

Avantium N.V. and passed through to Avantium Renewable Polymers B.V. as an intercompany loan.

Facility B1 and Facility B2, amounting to €45.0 million and €15.0 million, respectively, are borrowed

directly by Avantium Renewable Polymers B.V. The interest on the Debt Facilities Agreement consists

of three components: cash interest, accrued interest and warrants (refer to note 18). Cash and accrued

interest is EURIBOR based. The repayment of the loan amount is due on 31 March 2025. The cash

interest is paid on a quarterly basis and PIK interest is capitalised on the principal balance of the

Facility on a quarterly basis starting as of 21 February 2023 for Facility A.

The Debt Facilities Agreement contains customary technical and commercial conditions precedent and

a customary security package including amongst others security on: all material assets, IP rights,

receivables of Avantium, Avantium Renewable Polymers B.V., the holding entity of the FDCA Flagship

Plant, and of several other group companies, the shares in Avantium Renewable Polymers B.V. and

these other group entities, the loan(s) of Avantium and Avantium Renewable Polymers B.V. to

Avantium RNP Flagship B.V. and the FDCA Flagship Plant itself and the FDCA Pilot Plant.

The carrying amounts of the fixed, intangible assets, trade receivables pledged as security for current

and non-current borrowings are disclosed in note 5, 6 and 9.


	149

On 21 November 2022 the first drawdown of the loan was executed for €15.0 million. On this date, the

Debt Facilities Agreement was amended and restated reflecting the current status of the business. The

annual effective interest rate on the first drawdown is 12%. As at 31 December 2022 the fair value of

the loan equals the carrying amount (refer to note 3.1).

During 2022 annual commitment fees of €1.5 million were paid to the relevant banks.

During 2022 Avantium complied with the financial and other required covenants confirmed on a

monthly basis to the lenders. This confirmation will continue to take place on a monthly basis in 2023.

Bank Overdrafts

As at 31 December 2022, the group had no overdraft facilities with any bank.

17. Provisions for Other Liabilities and Charges


	(In Euro x 1,000)	Warranty provision
	Balance at 1 January 2021	145
	Additional provision	78
	Unused amounts reversed	(21)
	Settlement of provision	—
	Used during the year	(5)
	At Balance at 31 December 2021	196

	Balance at 1 January 2022	196
	Additional provision	79
	Unused amounts reversed	(28)
	Used during the year	(12)
	Balance at 31 December 2022	236

Warranty

The provision for warranty consists of estimated costs for repairs of installed products during the

warranty period of one year. This estimate is based on historical experience of broken or repaired units

and the costs associated with that. This provision is current (shorter than one year). Unused amounts

are reversed after expiration of the warranty period.

18. Financial Liability


	In Euro x 1,000)	2022
	Balance as at 1 January 2022	—
	Warrants issued	11,250
	Fair value remeasurement	2,841
	Balance as at 31 December 2022	14,091

On 31 March 2022, Avantium N.V. issued 2.84 million warrants to the consortium of banks as part of

the €90 million debt financing package for the FDCA Flagship Plant. The warrants are convertible into

the company's ordinary shares with a 1:1 conversion ratio for an exercise price of €0.10 per share.

The warrants had an anti-dilution protection for the equity raise that took place in April 2022. As a

result, on 14 April 2022, 1.02 million additional warrants were issued to the warrant holders, to

compensate for the dilutive effect of the equity offering according to the debt financing agreement

with the lenders.

The warrants will become exercisable when the FDCA Flagship Plant is operational or when other

additional conditions included in the warrant Agreement have been met. Such additional conditions

include, a change of control, certain joint ventures, permitted acquisitions, disposals and certain other

events.

The initial recognition of the warrants amounted to €11.3 million. The warrants are recognised under

IFRS 9 Financial Instruments as a Financial Liability. The warrants are measured subsequently at fair

value through profit or loss at each reporting date.

The fair value of the warrants on 31 December 2022 is €14.1 million. The increase in the share price of

€0.74 resulted in the increase in the fair value of the warrants. The subsequent fair value

remeasurement of the warrants resulted in a loss for the year ended 31 December 2022 of €2.8

million, recognised under fair value remeasurement in the Statement of Comprehensive Income. Refer

to note 3.1.


	150

Notes to the Consolidated Statement of Comprehensive Income

19. Revenues

Reported consolidated revenue from continuing operations increased by 63% from €10.9 million in

2021 to €17.8 million in 2022. All revenue is recognised at a point in time, except for revenues from

Systems and Services contracts in R&D solutions were revenue is generated over time (see note 2.20

for further information). Revenues per segment are reported under note 21.

All revenue reported originates in the Netherlands.

Avantium Renewable Polymers, received a non-refundable payment of €5.0 million for technical due

diligence procedures performed during 2022.

The following table depicts the disaggregation of revenue from contracts with customers:


2022 (in Euro x 1,000)	R&D Solutions services revenue	R&D Solutions systems revenue	Renewable Chemistry development agreements	Renewable Polymers agreements	Un- allocated revenue	Total
Segment revenue	2,904	8,397	100	6,056	369	17,826
Revenue from external customers	2,904	8,397	100	6,056	369	17,826
Timing of revenue recog- nision
–At a point in time	—	821	100	6,056	369	7,346
–Over time	2,904	7,576	—	—	—	10,480
Total	2,904	8,397	100	6,056	369	17,826


2021 (in Euro x 1,000)	R&D Solutions services revenue	R&D Solutions systems revenue	Renewable Chemistry development agreements	Renewable Polymers agreements	Un- allocated revenue	Total
Segment revenue	3,227	6,802	500	388	—	10,917
Revenue from external customers	3,227	6,802	500	388	—	10,917
Timing of revenue recog- nision
–At a point in time	—	599	500	388	—	1,487
–Over time	3,227	6,203	—	—	—	9,430
Total	3,227	6,802	500	388	—	10,917

As of 31 December 2022, the aggregate amount of the transaction price in R&D Solutions allocated to

the remaining performance obligations is €6.2 million (2021: €6.1 million) and the group will recognise

this revenue as the progress on each contract is completed, which is estimated to occur over the next

9–24 months.


	151

20. Other Income


(In Euro x 1,000)	2022	2021
Grants recognised	7,626	6,686
	7,626	6,686

The group recognised total government grants of €7,626,000 (2021: €6,686,000) to contribute to

Avantium’s development programmes, where efforts are focused on developing a new catalytic

process for making plant-based mono-ethylene glycol and for developing an economical viable

chemical process to convert ligno-cellulosic biomass into high quality glucose as feedstock for bio-

based chemical in Avantium Renewable chemistries. In Avantium Renewable Polymers efforts are

focussed on its plant-to-plastics YXY® Technology to build the FDCA Flagship Plant and to develop a

wide range of FDCA and PEF applications.

EU grants attributable to the Volta technology, enables Avantium to perform R&D work to accelerate

the progress on converting CO2 to higher value chemicals and eventually syngas.

21. Segment Information

Description of the Segments and Principal Activities

In the company, the Management Team consists of the Chief Executive Officer, Chief Financial Officer,

Chief Technology Officer, Group Legal Counsel, and the Managing Directors of Avantium Renewable

Chemistries, Avantium R&D Solutions, and Avantium Renewable Polymers. It has identified three

separate business segments:

•In October, our Avantium Catalysis business unit launched a new strategy and a new name –

Avantium R&D Solutions – marking a decisive shift towards R&D in sustainable chemistry. This

decision is not only a response to changing industry demand, but also a means of better aligning

this business unit with Avantium’s overall strategic direction and purpose: to help transition

industry to more sustainable and circular solutions. Avantium R&D Solutions Avantium also

provides R&D solutions in the field of sustainable chemistry and is the leading provider of

advanced catalyst testing technology and services to accelerate catalyst R&D. With the scalable

catalyst testing system, Flowrence®, Avantium R&D Solutions helps customers reach their

sustainability, profit and growth targets.

•Avantium Renewable Chemistries develops and commercialises plantMEG™. PlantMEG™ is a

plant-based and competitive alternative for fossil-based MEG – an important chemical building

block for PET and PEF resin, both of which are used in bottles and packaging; fibres for clothing,

furniture and the automotive industry; and solvents and coolants. The common basis, on which

each activity rests, is formed by Avantium’s unique technological capabilities that have been

validated through the execution of millions of experiments, covering a broad range of chemistries,

including highly complex and challenging R&D projects. The portfolio of programmes includes the

Volta programme, and the Dawn Technology™ and Ray Technology™.

•Avantium Renewable Polymers aims to commercialise our YXY® plants-to-plastics Technology.

This technology catalytically converts plant-based sugars into FDCA (furandicarboxylic acid) and

materials such as the new plant-based packaging material PEF (polyethylene furanoate). PEF is a

100% plant-based, 100% recyclable plastic with superior performance properties compared to

today’s widely used petroleum-based packaging materials.

Avantium has one employee employed in Japan, all other employees of Avantium are employed in the

Netherlands. The average number of full time equivalent employees of the group per business segment

and other departments is as follows:


(in full time equivalent employees)	2022	2021
R&D Solutions	48	48
Renewable Chemistries	69	69
Renewable Polymers	63	55
Unallocated	46	40
Total average number of FTE during the year	226	213

EBITDA

The main KPI of the company within the profit & loss account is EBITDA. Note that the EBITDA figure

excludes company overheads and shared service activities.

The EBITDA is calculated in the following manner: Profit/loss for the period plus Finance costs-net plus

depreciation, amortisation and impairment charge.

The EBITDA figures of the business segments are as follows.


(In Euro x 1,000)	2022	2021
R&D Solutions	2,326	2,705
Renewable Chemistries	(3,624)	(2,320)
Renewable Polymers	(6,917)	(7,094)
Total EBITDA of business segments	(8,215)	(6,708)


	152

Revenues per Segment


(In Euro x 1,000)	2022	2021
R&D Solutions	11,301	10,029
Renewable Chemistries	100	500
Renewable Polymers	6,056	388
Unallocated items	369	—
Total segment revenue	17,826	10,917

Revenue is only generated from external customers and no transactions with other segments have

taken place.

Other Income per Segment


(In Euro x 1,000)	2022	2021
R&D Solutions	279	279
Renewable Chemistries	3,536	3,610
Renewable Polymers	3,660	2,683
Unallocated items	150	114
Total segment other income	7,626	6,686

Reconciliation


(In Euro x 1,000)	2022	2021
Total EBITDA of business segments	(8,215)	(6,708)
Amortisation	(35)	(56)
Depreciation of property, plant and equipment	(5,721)	(5,778)
Depreciation of right of use assets	(2,387)	(2,003)
Impairment of property, plant and equipment (PPE)	(435)	—
Finance costs - net	(2,448)	(495)
Share based compensation	(1,114)	(828)
Rent	(984)	(241)
Fair value remeasurement	(2,841)	—
Company overheads/other	(7,374)	(8,307)
Loss before income tax from continuing operations	(31,554)	(24,416)

The ‘Other’ costs category comprises mainly of company overhead costs.

Depreciation and Amortisation


(In Euro x 1,000)	2022	2021
R&D Solutions	(332)	(396)
Renewable Chemistries	(3,617)	(3,547)
Renewable Polymers	(2,203)	(1,932)
Unallocated items	(1,991)	(1,962)
Total Depreciation and amortisation	(8,143)	(7,837)


	153

22. Expenses by Nature

Net operating expenses in 2022 amounted to €43.1 million (2021: €33.7 million). The increase is

predominantly the result of higher employee benefit expenses, increased spend on patent, license,

legal and advisory expenses and higher office and housing expenses.

Employee benefit expenses in 2022 amounted to €23,401,000 (2021: €19,226,000) and includes

wages and salaries, social security costs, share options granted to directors and employees, pension

costs, and government grants received. The increase is mainly as a result of the planned increase in

staffing as the average FTE count during the year increased with approximately 13 FTE YoY.

Furthermore, there was a substantial increase in temporary staffing and external recruitment services

as a result of the scale up of the FDCA Flagship Plant activities.

Patent, license, legal and advisory costs in 2022 amounted to €6,766,000 (2021: €4,312,000). The

increase predominantly related to the professional services and bank and advisory fees incurred for

Debt Facilities Agreement obtained in relation to the construction of the FDCA Flagship Plant.

Office and housing expenses in 2022 amounted to €3,062,000 (2021: €1,968,000) and comprises of

short-term rental agreements, other facility related costs, telephony and other IT related office

materials and costs. The increase in office and housing expenses is predominantly related to an

increase in short-term leases and an increase in utilities as a result of rising gas and electricity prices

during 2022.

Laboratory expenses in 2022 amounted to €3,272,000 (2021: €2,864,000) and comprises of

laboratory consumables, spare parts, maintenance and repair work in the laboratory, and small

laboratory projects. The increase in laboratory expenses is mainly a result of the restart of the Pilot

Plant in Delfzijl in the second quarter of 2022, after the Pilot Plant was shut down due to the accident

that took place in the first quarter of 2021.

Other operating expenses in 2022 amounted to €1,538,000 (2021: €1,568,000) and comprises of

external development costs, such as trials, and other general costs including company insurances. The

decrease is mainly related to lower cost for insurances, as the prior year included a number of one-off

settlements.

Advertising and representation expenses in 2022 amounted to €1,329,000 (2021: €707,000) and

comprises of external and internal marketing, communications, and business development efforts,

including travel. Wages for internal business development staff is excluded, as this is included under

employee benefit expenses. The increase is due to travel again possible to most countries after the

relaxation of travel restrictions in relation to COVID-19.

Depreciation, amortisation and impairment charges increased to €8,578,000 (2021: €7,837,000).

During 2022, the company impaired Property, Plant and equipment, which resulted in a net

impairment loss of €435,000. The depreciation of right of use assets increased in 2022 and is mainly

the result of an increase and/or modification in the lease portfolio of the company during the year.

Raw materials and contract costs in 2022 amounted to €3,770,000 (2021: €3,042,000 ) and comprises

of cost of goods sold, costs of laboratory consumables directly attributable to revenue projects, and

other specific costs related to revenues. The increase is mainly as a result of the higher revenues

recorded for the year in the R&D solutions business segment.

23. Employee Benefit Expenses


(In Euro x 1,000)	2022	2021
Wages and salaries	22,574	18,776
Government grants R&D (WBSO)	(3,791)	(3,316)
Social security costs	2,405	1,990
ESOP expense (note 13)	808	828
LTIP awards expense (note 13)	306	—
Pension costs - defined contribution plans	1,099	948
	23,401	19,226

Number of full time equivalent employees at the end of the year	249	213

The average number of FTEs during 2022 was 226 (2021: 213).

In 2022, €3,791,000 (2021: €3,316,000) government grants in the form of WBSO were recognised

directly as an offset of employee benefit expenses.


	154

24. Finance Income and Costs


(In Euro x 1,000)	2022	2021
Finance costs:
Net foreign exchange (gains) loss	20	2
Interest current accounts	—	120
Financing component of lease payments	316	230
Interest on borrowings	182	—
Other bank and commitment fees	1,547	—
Effective interest	106	—
Other finance costs	288	144
Finance costs	2,459	497

Finance income:
Interest current accounts	(12)	(2)
Finance income	(12)	(2)
Finance costs - net	2,448	495

25. Income Tax Expense

The company forms a tax group with its subsidiaries for corporate income tax purposes (fiscal unity).

Under the standard conditions, the members of the tax group are jointly and severally liable for income

taxes payable by the group.

The company does not recognise any deferred tax asset in relation to the losses carried forward as it is

not considered probable that there will be sufficient taxable profit against which the unused tax losses

can be utilised in the following year(s).

No tax charge or tax income were recognised in 2022, since the company recorded a net loss of €29.6

million. The company did record a taxable profit in 2021, which amounted to €32.2 million. The 2021

taxable profit was the consequence of Avantium Renewable Polymers B.V. and Furanix Technologies

B.V. leaving the Avantium N.V. fiscal unity, resulting in a taxable revaluation of certain assets within

the Avantium N.V. fiscal unity. This tax profit was fully compensated by existing carry forward tax

losses of the Avantium N.V. fiscal unity.

Avantium Renewable Polymers B.V., Furanix Technologies B.V. and Avantium RNP Flagship Plant B.V.

formed a new fiscal unity starting 1 January 2022 (the Avantium Renewable Polymers B.V. fiscal

unity). The Avantium N.V. fiscal unity transferred €40.6 million of its carry forward tax losses to

Avantium Renewable Polymers B.V. and Furanix Technologies B.V. who left the Avantium N.V. fiscal

unity on 31 December 2021. The total tax losses carry forward for the Avantium Renewable Polymers

B.V. fiscal unity as of 31 December 2022 is approximately €51.6 million.

Total remaining amount of tax losses carry forward for the Avantium N.V. fiscal unity as of 31

December 2022 is approximately €126.1 million (2021: €146.2 million).

These losses are subject to the new tax loss utilisation rules which applied as of 1 January 2022. As

part of the new rules, an indefinite carry forward loss set-off will apply as of 1 January 2022 (the

current carry- forward period is six years, the carry-back period is and will remain one year). However,

tax losses will only be fully available for carry-forward and carry-back set off up to an amount of €1

million of taxable profit per year. In the case of a profit which is higher than €1 million, the amount

above €1 million can only be set off up to 50% of that higher taxable profit.

The company does not use contrived or abnormal tax structures that are intended for tax avoidance.


(In Euro x 1,000)	2022	2021
Loss before tax	(31,554)	(24,416)

Tax at applicable tax rate in the Netherlands of 25.8% (2021: 25%)	8,141	6,104

Non-deductable expenses	748	590
Subtotal	8,889	6,694

Derecognition of deferred tax assets	(8,889)	—
Tax profit as a result from revaluation of certain assets	—	(13,970)
Utilisation of previously unrecognised deferred tax assets	—	7,276
Tax charge	—	—

The nominal tax rates and amount in 2022 are 15% up to €395,000 and 25.8% over €395,000.

26. Dividends

The company declared no dividends for any of the years presented in these consolidated financial

statements.


	155

Other Notes to the Consolidated Financial Statements

27. Contingencies

During 2022, the company had no contingencies to report.

28. Commitments & Guarantees

Commitments

Purchase commitments for property, plant and equipment aggregated €47,519,000.

Guarantees

The company has a €3.0 million cash-collateralised guarantee facility in place.

This guarantee facility is also disclosed as part of the cash equivalents in note 10, which represents an

amount equal to the current guarantees issued to third parties totalling €772,000. These guarantees

are predominantly issued in relation to payments from customers following a systems deal for which a

bank guarantee had to be issued.

29. Related-party Transactions

Identification of Related Parties

Key management is defined as those persons having legal authority and responsibility for planning,

directing and controlling the activities of the entity, directly or indirectly, including any director (whether

executive or otherwise) of that entity. Our key management comprises the members of the

Management Board and the Supervisory Board.

Key Management Changes 2022

At the Extraordinary General Meeting of Shareholders (EGM) held on 25 January 2022, Nils Björkman

was appointed as a member of the supervisory board for a term of four years.

Cynthia Arnold resigned as Supervisory Board member per end of March 2022.

Trudy Schoolenberg resigned as Supervisory Board member per September 2022.

The following persons were members of the Supervisory Board on 31 December 2022:

•Edwin Moses, Chairperson

•Margret Kleinsman, Vice Chairperson

•Michelle Jou

•Nils Björkman

Key Management Remuneration Policy

Avantium does not grant its key management with any personal loans, guarantees or advance

payments. For further information on the remuneration policy refer to the Remuneration Report.

Key Management Remuneration 2022

The total remuneration paid to members of the Management Board and independent members of the

Supervisory Board amounted to €971,000 (2021: €1,023,000) and €354,000 (2021: €403,000)

respectively.


	156

The following table provides a breakdown of the remuneration in 2022 of the members of the

Management Board:


(In Euro x 1,000) Management Board	Salary	Other benefits1	Cash bonus	Investment share bonus	Share-based payments	Post-employee benefits	Severance payments	Total Remuneration
T.B. van Aken
2022	273	24	82	82	115	20	—	597
2021	268	25	78	78	114	20	—	584
B.J.J.V. Welten
2022	240	24	51	—	31	28	—	374
2021	235	27	49	49	52	27	—	439
Total - 2022	513	48	133	82	146	48	—	971
Total - 2021	503	52	128	128	167	46	—	1,023


	157

1 Other benefits mainly include contributions to social security plans, benefits in kind such as company cars, medical expenses and legal expenses.

The following table provides a breakdown of the remuneration in 2022 of the members of the Supervisory Board:


(In Euro x 1,000)	Annual fee2		Share-based payments		Travel expenses		Total
Supervisory Board member	2022	2021	2022	2021	2022	2021	2022	2021
E. Moses	90	79	22	51	—	—	112	130
M.G. Kleinsman	50	50	—	—	—	—	50	50
M.B.B. Jou	55	55	8	18	—	—	63	73
N. Björkman	55	13	22	—	—	—	78	14
Total Supervisory Board members	250	197	52	69	—	—	302	267

Former Supervisory Board members
CA. Arnold	14	48	9	40	3	5	26	93
G.E. Schoolenberg	25	44	—	—	—	—	25	44
Total former Supervisory Board members	39	92	9	40	3	5	51	137

2 The membership fee included within the annual fee excludes the fee covering the onboarding period prior to the respective appointments, being equal to the prorated base membership fee (€40,000 on pro rate

basis).

30. Proposed Appropriation of Result

In anticipation of the Annual General Meeting’s adoption of the annual accounts, the net loss for the

year of €29,583,197 has been added to accumulated losses.

31. Events After the Balance Sheet Date

On 21 February 2023, Avantium Renewable Polymers and Origin Materials Inc. entered into a

technology partnership, which includes a non exclusive industrial technology license agreement, a

conditional offtake agreement, as well as certain ancillary arrangements to accelerate the mass

production of FDCA and PEF for use in advanced chemicals and plastics. Under the terms of the

transaction, Avantium received an upfront payment of €5.0 million in 2022. As a result of signing the

industrial technology license agreement, Origin Materials has paid Avantium a milestone fee of €7.5

million.

An additional loan of €2.5 million was provided by Stichting Fonds Leefbaarheid, Zorg en Energie

Groningen (Fonds Nieuwe Doen) to Avantium RNP Flagship Plant B.V. The proceeds from the


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borrowing was received in February 2023. The interest rate on the loan is 4.75% payable on monthly

basis. The maturity of the loan is 36 months.

On 30 January 2023, Avantium N.V. and Avantium Renewable Polymers fulfilled all conditions

precedent to execute the second drawdown of €15.0 million under the Debt Facilities Agreement and

subsequently received the proceeds from the borrowings.


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Company Financial Statements 2022

Company Balance Sheet

As at December 31

The balance sheet has been prepared after appropriation of current year result.


(In Euro x 1,000)	Note	2022	2021
ASSETS
Non-current assets
Financial fixed assets	34	46,648	3,902
Receivables from group companies	35	63,368	72,473
Right-of-use assets		6,697	7,210
Other receivables		9,000	—
Total non-current assets		125,713	83,585

Current assets
Other receivables		32	419
Cash and cash equivalents	36	45,416	28,506
Total current assets		45,448	28,925
Total assets		171,162	112,510

EQUITY
Equity attributable to owners of the parent
Ordinary shares	11	4,261	3,129
Share premium		270,829	230,252
Other reserves	11	12,785	11,936
Accumulated losses		(206,747)	(195,291)
Total equity		81,128	50,026



LIABILITIES
Non-current liabilities
Payables to group companies	37	52,264	52,284
Provisions	38	24	1,729
Borrowings	39	12,856	—
Financial liability	40	14,091	—
Lease liabilities		7,904	8,028
Total Non-current liabilities		87,139	62,040

Current liabilities
Trade payables		263	229
Other current liabilities		2,631	215
Total current liabilities		2,894	444
Total liabilities		90,034	62,484

Total equity and liabilities		171,162	112,510


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Company Income Statement

For the financial year ended December 31


in Euro x 1,000	2022	2021
Other revenues	—	—
Operating expenses
Employee benefit expenses	(822)	(848)
Office and housing expenses	(9)	13
Patent, license, legal and advisory expenses	(199)	(188)
Reversal due for onerous contract	—	—
Other operating expenses	(27)	(23)
Depreciation, amortisation and impairment charge	(1,350)	(1,313)
Operating loss	(2,407)	(2,359)
Fair value measurement	(2,841)	—
Finance costs - net	(467)	(382)
Result before income tax	(5,715)	(2,741)
Income tax expense	—	—
Result subsidiaries	(23,868)	(21,676)
Loss for the period	(29,583)	(24,416)


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Notes to the Company Financial Statements

32. General Information

The company statements are part of the 2022 financial statements of Avantium N.V.

The financial statements of the company are prepared in accordance with the provision of Part 9, Book

2 of the Dutch Civil Code. For setting the principles for the recognition and measurement of assets and

liabilities and determination of the result of its company financial statements, Avantium N.V. makes

use of the option provided in Section 2:362 (8) of the Dutch Civil Code. These principles also include the

classification and presentation of financial instruments, being equity instruments or financial liabilities.

This means that the principles of the recognition and measurements of assets and liabilities and

determination of the result (hereinafter referred to as accounting policies) of the company financial

statements of Avantium N.V. are the same as those applied for the consolidated financial statements

under IFRS (refer to note 2). By applying this option, reconciliation is maintained between the group’s

equity and the company’s equity.

In the company financial statements, investments in group companies are stated as net asset value, in

accordance with the equity method, if the company effectively exercises influence of significance over

the operational and financial activities of these investments. The net asset value is determined on the

basis of the accounting principles applied by the company. In case the net asset value of an

investment in a group company is negative, any existing loans to group companies considered as net

investment are impaired. A provision for any remaining equity deficit is recognised when an outflow of

resources is probable and can be reliably estimated.

The consolidated financial statements have been prepared in accordance with International Financial

Reporting Standards (IFRS) as adopted by the European Union. Please refer to the notes to the

consolidated financial statements for a description of these principles.

33. Equity Attributable to Equity Holders of the Company

For details of the movements in and components of equity, reference is made to the consolidated

statement of changes in equity of the consolidated financial statements and the notes to these.

34. Financial Fixed Assets

The company directly held interests in the following subsidiaries on 31 December 2022:

–Avantium Technologies B.V., Amsterdam (100%)

–Renewable Technologies B.V., Amsterdam (100%)

–Avantium Support B.V., Amsterdam (100%)

–Avantium Knowledge Centre B.V., Amsterdam (100%)

–Feedstock Technologies B.V., Amsterdam (100%)

–Avantium Renewable Polymers B.V., Amsterdam (77.4%)

–Synvina C.V., Amsterdam (100%)

On 31 March 2022, there was a change in ownership of Avantium Renewable Polymers B.V., a

subsidiary of Avantium N.V. Worley Nederland B.V. and Bio Plastics Investment Groningen B.V.

together have acquired a 22.6% shareholding in Avantium Renewable Polymers B.V., while Avantium

continued to hold 77.4% of the equity. The change in shareholding did not result in Avantium N.V.

losing control over the subsidiary, Avantium Renewable Polymers B.V.

At Financial Close on 31 March 2022, Avantium N.V. fulfilled the total committed equity investment

into Avantium Renewable Polymers B.V. of €45.0 million.


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The movements in financial fixed assets can be summarised as follows:


	(In Euro x 1,000)	Financial fixed assets
	On 1 January 2021	31,585
	Share of loss in group companies	(3,651)
	Other equity movements in subsidiaries	(24,032)
	On December 31, 2021	3,902


	(In Euro x 1,000)	Financial fixed assets
	On January 1, 2022	3,902
	Share of loss in group companies	(14,624)
	Other equity movements in subsidiaries	57,370
	On December 31, 2022	46,648

35. Receivables from group companies


(In Euro x 1,000)	2022	2021
Group receivables outstanding 1 January	72,473	44,300
Movements in receivables from group companies	(9,105)	28,173
Group receivables outstanding 31 December	63,368	72,473

The fair value of the intercompany amounts in Avantium N.V. to group companies approximates their

book values.

The movement in group receivables includes the loan of €15.0 million to Avantium Renewable

Polymers B.V. The loan is repayable to Avantium N.V. on 31 March 2025. Refer to note 39 for

Borrowings.

At Financial Close on 31 March 2022, Avantium N.V. fulfilled the total committed equity investment

into Avantium Renewable Polymers B.V. of €45.0 million. With this also a number of group receivables

between the group entities and Avantium Renewable Polymers B.V. where distributed and assigned to

Avantium N.V.

36. Cash and Cash equivalents


(In Euro x 1,000)	31-12-2022	31-12-2021
Cash at bank and on hand	38,916	27,006
Restricted cash	6,500	1,500
Cash and cash equivalents for cash flow purposes	45,416	28,506

The cash and cash equivalents include restricted cash of €6.5 million. Of the €6.5 million, €5.0 million

relates to a cash deposit held in the name of Avantium N.V. for any potential future equity funding

needs during the construction of the FDCA Flagship Plant. It has been agreed with the consortium of

lenders that Avantium Renewable Polymers B.V. will at all times have sufficient funding available for

the construction of the FDCA Flagship Plant. The reserved cash is available to meet any funding

shortfall that may arise, and this is assessed together with the Lenders upon each utilization of the

debt facility. The cash in this deposit account remains at all times in full control and ownership of

Avantium and its consolidated group. The residual €1.5 million, relates to a deposit held with

Rabobank, which represents an amount equal to the estimated required guarantee capacity for the

short term needs of the company. As at 31 December 2022, €772,000 of this guarantee capacity has

utilised for issued bank guarantees to third parties.

37. Payables to group companies


(In Euro x 1,000)	2022	2021
Group payables outstanding 1 January	(52,284)	(51,896)
Movements in payables to group companies	19	(387)
Group payables outstanding 31 December	(52,264)	(52,284)

The fair value of the intercompany amounts in Avantium N.V. to group companies approximates their

book values.


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38. Provisions

a) Provisions for the year were as follows:


	(In Euro x 1,000)	Provisions
	On 1 January 2021	(24)
	Share of loss in group companies	—
	Movements in provisions	(1,705)
	On December 31, 2021	(1,729)


	(In Euro x 1,000)	Provisions
	On January 1, 2022	(1,729)
	Share of loss in group companies	—
	Movements in provisions	1,705
	On December 31, 2022	(24)

The provisions for financial fixed assets with a negative net equity as at 31 December 2022 relate to

the following:

–Equity deficit of Feedstock Technologies B.V. of €24,000 (2021: €24,000)

–Equity deficit of Avantium Renewable Polymers B.V. of €nil (2021: €1,704,000)

39. Borrowings


	In Euro x 1,000)	2022
	Balance as at 1 January 2022	—
	Debt Facilities drawdown	12,750
	Effective Interest	106
	Repayment of Debt Facilities	—
	Balance as at 31 December 2022	12,856


	In Euro x 1,000)	31-12-2022
	Current Debt Facilities	—
	Non-current Debt Facilities	12,856
	Total Debt Facilities	12,856


in Euro x 1,000	Less than 1 year	Between 1 and 2 years	Between 2 and 5 year	Over 5 years	Total
Borrowings	—	—	12,856	—	12,856
	—	—	12,856	—	12,856

A three-year Debt Facilities Agreement of €90.0 million was signed with a consortium of lenders on 31

March 2022 . This financing consists of three facilities. Facility A, €30.0 million, which is borrowed by

Avantium N.V. and passed through to Avantium Renewable Polymers B.V. as an intercompany loan.

Facility B1 and Facility B2, amounting to €45.0 million and €15.0 million, respectively, are borrowed

directly by Avantium Renewable Polymers BV. The interest on the Debt Facilities Agreement consists

of three components: cash interest, accrued interest and warrants (refer to note 40). Cash and accrued