XAMS:CRBN ESEF Annual Report
Corbion N.V. (XAMS:CRBN)
Contact
If you have any questions or remarks regarding this report, we kindly invite you to contact us.
Corbion nv
P.O. Box 349
1000 AH Amsterdam
The Netherlands
Telephone: +31 20 590 69 11
E-mail: [email protected]
Website: www.corbion.com
Registered office: Amsterdam
Registered Amsterdam no. 33006580
This document is the PDF/printed version of the 2021 Annual Report of Corbion nv in the European single electronic reporting format (ESEF) and has been prepared for ease of use. The ESEF reporting package is available on the Corbion website. In any case of discrepancies between this PDF version and the ESEF reporting package, the latter prevails.
- At a glance
- Message from the CEO
- Company highlights
- Report of the Board of Management
- Who we are and what we do
- The world around us
- Our strategy: Advance 2025
- Our value creation model
- Our performance
- Business performance
- Financial performance
- Sustainability performance
- How we safeguard long-term value
- Board of Management and Executive Committee
- Supervisory Board
- Corporate governance
- Risk management
- Report of the Supervisory Board
- Remuneration report
- Financial Statements
- Sustainability Statements
- Materiality and stakeholder engagement
- GRI Index
- UN Global Compact
- Other information
- Group structure
- Five years in figures
- Investor Relations
At a glance
At Corbion, we preserve what matters.
We are the global market leader in lactic acid and its derivatives and a leading supplier of emulsifiers, functional enzyme blends, minerals, vitamins, and algae ingredients. We use our unique expertise in fermentation and other processes to deliver sustainable solutions for preserving food and food production, health, and our planet. For over 100 years, we have been uncompromising in our commitment to safety, quality, innovation, and performance. Drawing on our deep application and product knowledge, we work side-by-side with customers to make our cutting-edge technologies work for them. Our solutions help differentiate products in markets such as food, home & personal care, animal nutrition, pharmaceuticals, medical devices, and bioplastics.
In manufacturing, we have a long history of excellence in developing and operating sustainable, resource-efficient production processes. We use these in four key areas: fermentation to organic acids and algae products, polymers, emulsifiers, and functional systems.
Corbion’s strategy and all aspects of our operations are built around advancing sustainability underpinned by high ethical standards, whether this relates to the management of our global supply chain, responsible procurement of our raw materials, or the safety and well-being of our people.
In 2021, Corbion generated annual sales of € 1,070.8 million and had a workforce of 2,493 FTEs. Corbion is listed on Euronext Amsterdam.
Three lines of business
At Corbion, we distinguish between three lines of business, each with a different set of characteristics: Sustainable Food Solutions, Lactic Acid & Specialties, and Incubator.
Sustainable Food Solutions
Sustainable Food Solutions comprises Preservation, Functional Systems, and Single Ingredients. We are a global supplier of food ingredient solutions for leading food manufacturers. We excel at using natural mechanisms and processes to help them create food products that stay fresh, safe, and delicious longer.
What we do helps to preserve what matters: a nutritious, high-quality eating experience consumers can share with friends and family; our planet’s resources, which we aim to source responsibly and preserve by helping to minimize food waste; and access to affordable foods, which we make possible by enabling more efficient production in the bakery, meat, beverage, confectionery, and dairy markets.
Lactic Acid & Specialties
Lactic Acid & Specialties comprises Biochemicals (lactic acid, lactate salts, esters, and other specialties), Biomaterials (polymers for medical applications), and Total Corbion PLA (our joint venture with TotalEnergies for the production and marketing of Luminy® PLA).
The value to our customers comes from the inherent safety, sustainability, and performance of our products, delivered through the commitment of our teams to provide solutions that create new opportunities for our customers. Leveraging our rich heritage in fermentation and the application of lactic-acid-based technologies, we provide performance through functionalities offered with these product lines and technologies using renewable resources.
Our solutions offer benefits in biochemical applications spanning a wide array of industries, including chemicals, electronics, pharmaceuticals, home & personal care products, agrochemicals, and animal health. We continuously explore and develop new ways to enhance the functionalities our products bring to customers’ applications. In Biomaterials, our focus on resorbable polymers for medical applications enables the development of controlled-release pharmaceutical products, patient-friendly orthopedic devices, and more. Through the Total Corbion PLA joint venture, we play an enabling role in the fast-growing global bioplastics market.
Incubator
Our Incubator, where we develop early-stage initiatives, currently accommodates three main product categories: algae-based omega-3, algae ingredients, and our co-polymers platform.
We develop new business platforms to deliver long-term value through our Incubator, applying disruptive technologies built on our vast experience in fermentation and industrial-scale manufacturing. Collaborating with like-minded partners, we support our customers in making conscious choices to create better, more sustainable products based on renewable resources. We believe in a circular economy, where our innovations can help improve the quality of life – both today and for future generations.
Our global presence
We market our products through a worldwide network of sales offices and distributors and have a global supply chain with manufacturing facilities in the US, Thailand, Brazil, Mexico, the Netherlands, and Spain. Our innovation centers are located across the globe and our headquarters is based in the Netherlands.
Message from the CEO
What a year it has been… again! I thought that we would be out of the pandemic turbulence by the end of 2021. But entering a new year, the COVID-19 virus is still determining almost everything we do. This has once more presented all of us with tremendous challenges. I can only be very proud of what has happened in 2021 in our company, how I have seen our people stand strong, deliver, and look after each other.
The year 2021 has been a year that has tested our resilience more than ever. The sprint has turned into an ultra-marathon – testing our business model, but particularly our people and organization. In the first pandemic year, we saw key parts of our portfolio, ingredients for food and pharma, stay firm by nature, as ‘essential industries’. Hats off to our operations and logistics functions, Corbion managed to continue to deliver, and as a result we grew our sales ahead of the market as well as our own strategic timeline.
This past year, we have seen new challenges and the way our colleagues across the world faced them has been nothing short of fantastic. Growing at a pace three to four times faster than the market comes with growing pains. Driving big expansion projects or the roll out of our new SAP system, with travel restrictions limiting mobility, has been a true tour de force. Then, add the complexity of skyrocketing raw material prices and a global container shortage, and it will be clear it has not been a smooth ride. As a result, we see our margin under pressure and, in addition to driving continuous improvements in operational efficiency, we are taking firm pricing action to ensure it will not endanger our multi-year strategic ambition.
The sales growth in 2021 has been excellent and well ahead of our strategic plan. In Sustainable Food Solutions we saw the investments in building up a solid pipeline really paying off, with high conversion rates. Going from strength to strength, we are leveraging fermentation into our flourishing Preservation business, amongst others, for mold inhibition. In Functional Systems we are integrating more biotech solutions, for example in the area of enzymes. Importantly, we have shown strong reliability despite the logistics and other challenges, which helped expand our customer base.
In Lactic Acid & Specialties the main driver of our strong sales growth has been the bioplastics joint venture Total Corbion PLA. While container issues sometimes impeded growth, we focused on maximizing production in Thailand and preparing for the next PLA plant in Europe. Other key drivers of growth in our lactic acid unit were electronics and pharma. Biomaterials also performed well, with new technology for slow-release drug delivery gaining traction and non-elective surgeries partly recovering from COVID-19 lows.
Our Algae Ingredients business continued to deliver on expectations and is on track to reach its EBITDA break-even target in 2022. We achieved massive volume growth due to our new pricing strategy combined with the launch of a new much higher-yielding strain, which was rapidly progressed from pilot to plant by our teams in San Francisco and Orindiúva. We expanded our portfolio and enlarged our customer base, now that our algae-based feed product for aquaculture has proven itself to be a sustainable and price-competitive alternative to fish oil.
We continue to invest in innovation across our business areas, both in our processes and in expanding our sustainable offering for our customers. To amplify our efforts, we are stepping up in Open Innovation, which will help us fill our pipeline further, through partners, and with an open eye for adjacent technologies.
While our people were working extremely hard to run and grow our company, we did not compromise on our sustainability ambitions, which actually start with the health and safety of our people. We have made great strides on our safety journey, with less recordables and the roll-out of a global safety program focused on mindset and behavioral changes.
I feel very strongly about mental well-being. We have been missing out on social events, holidays, and simple human interaction to recharge our batteries, and at the same time so much more is asked from us in our roles at Corbion. This demanding mix has led to some degree of mental fatigue for most of us. Our strong culture, built on our core values Care, Courage, Commitment, and Collaboration, has helped us here tremendously. Also, we have taken it upon ourselves to help our people to take care of their mental health, for example by providing full access to Headspace, a science-based well-being app for everyone.
In line with our purpose Preserving What Matters we continue to focus on protecting our planet and its species and on fighting climate change, and we show it can be done.
In 2021, we achieved a 27% reduction of our GHG emissions per ton of product compared to 2016, overachieving our intermediate 2025 target ahead of plan, giving us the confidence we can do more. Given the high level of urgency expressed in the latest IPCC report, we committed to boost the ambition level of our existing 2030 science-based target and to reach net zero emissions in our value chain by no later than 2050.
Our leadership in sustainability was recognized by EcoVadis (Platinum) and CDP (A on Supplier engagement, A- on Climate, B for Water and Forests).
We feel privileged and proud to be part of such a strong and resilient company, with amazing people, that work so hard for a better Corbion and a better world. We will be looking after all our colleagues in these testing times, as we continue our successful Advance 2025 journey. On behalf of my colleagues, I want to express our gratitude to our customers, suppliers, partners, and shareholders for their continued trust in Corbion.
On behalf of the Executive Committee
Olivier Rigaud
Who we are and what we do
The world around us
At Corbion, we focus our resources and capabilities on addressing the global megatrends of population growth, food security, climate change, and resource scarcity while responding to evolving consumer needs and preferences. With more than 100 years of experience and expertise in creating innovative solutions for our customers, we are well-positioned to help address the impact of these trends. This will not only safeguard our commercial future, but it will also benefit society at large.
Shifting demographics driven by a growing middle class and an aging population create a more educated and health-conscious consumer population focused on nutrition, food safety, and transparency. Increasing demand for more natural alternatives and antimicrobial solutions gives shape and direction to many of our innovation programs, and heightened awareness of climate change and resource depletion is illuminating the value our sustainable solutions deliver.
To create a future with sufficient resources for a growing population, the world needs to adopt circular systems, where material flows are recovered and re-used. Corbion’s biobased products are inherently circular and critical enablers of the circular economy, as they reduce the use of fossil resources that cannot be replenished.
A sustainable bioeconomy can only be realized if we consider the full value chain, from raw material sourcing to manufacturing, use, and end of life. Our biobased resources depend on agriculture, one of the largest contributors to environmental and social impacts. Implementation of sustainable agriculture is vital to maintaining economic performance while minimizing the damage to the environment and creating thriving farming communities.
The advancements in technology and, more specifically, biotechnology are critical drivers for developing our new platforms. They also function as new enablers in our continuous improvement programs in R&D and operations, where big data and manufacturing intelligence contribute to more efficiency, better insights, and improved safety performance. In executing our strategy, we continue to be guided by our company purpose, which articulates the role that Corbion envisions to play.
Our strategy: Advance 2025
Our Advance 2025 strategy builds on Corbion’s fundamentals and strengths by bringing further focus to the business portfolio well aligned with global market trends. This will be achieved by increased investments in key growth areas such as natural food preservation and lactic acid while at the same time reducing the breadth of our business portfolio. Given our purpose, “preserving what matters: food and food production, health, and the planet,” sustainability is at the heart of what we do, and hence we are very well positioned to benefit from the worldwide drive for more sustainable products and solutions. We have aligned our Advance 2025 strategy with the United Nations Sustainable Development Goals (SDGs), specifically with SDG 2 Zero hunger, SDG 3 Good health and well-being, and SDG 12 Responsible consumption and production. These are the goals where we believe we can create the most significant impact, given our footprint, the nature of our business, and the environment in which we operate.
Our business and reporting structure has three business units.
Sustainable Food Solutions
Sustainable Food Solutions comprises three segments: Preservation, Functional Systems, and Single Ingredients.
In Preservation, we will expand our natural preservation offerings beyond the meat industry into other markets, including the bakery and savory foods segments. Within the meat segment, we continue collaborating with producers to develop better plant-based meat alternatives, which present safety and freshness challenges similar to more traditional meat products. New, patented natural ferments based on vegetables and fruits will further extend and diversify our already strong portfolio of Verdad® vinegars, ferments, and multifunctional solutions, and open up exciting opportunities to deliver value in a wider array of applications.
In Functional Systems, we continue to focus on delivering more natural solutions, such as natural pH modulation in bakery, and texture and stability enhancers in other markets like savory foods and dairy. Corbion is well-known in this area for its leadership, expertise, and capabilities. Nevertheless, in any of these segments, bolt-on acquisitions may prove to be strategically advantageous in expanding our reach. Meanwhile, internal efforts are underway to develop new functional systems that build on our applications, enzymes, and industry knowledge.
Our emulsifiers portfolio will continue to be managed for value. We have exited other all non-core activities, such as blend co-packing and frozen dough manufacturing.
Lactic Acid & Specialties
Lactic Acid & Specialties encompasses Biochemicals (lactic acid, lactate salts, esters, and other specialties), Biomaterials (polymers for medical applications), and Total Corbion PLA (our joint venture with TotalEnergies for the production and marketing of Luminy® PLA).
In Biochemicals, we enable brand owners to commercialize safe performance products using our lactic-acid-based products and technology. Corbion leads the global lactic acid market in terms of technology, production, breadth of portfolio, and geographic coverage. We fuel our customers' success by creating specialties for many markets and applications, based on deep knowledge and advanced capabilities.
In Biomaterials, the Advance 2025 strategy enables us to expand and contribute to a sustainable and accessible healthcare system. In support of implantable technologies such as cardiovascular devices, orthopedic implants, tissue regeneration scaffolds, drug delivery, and wound management systems, we offer a proven family of resorbable polymers. Our strategy focused on safe and resorbable polymers aligns well with current trends in healthcare that point to continued opportunities in this sector.
To further strengthen our position in attractive growth markets, we are building a new lactic acid plant at our existing site in Rayong Province, Thailand. The new plant is expected to be operational in 2023, producing 125,000 metric tons of lactic acid annually. It will be using state-of-the-art technology to the highest sustainability standards, and will be our most competitive plant to date.
Total Corbion PLA
Total Corbion PLA, our 50/50 joint venture with TotalEnergies for the production and marketing of Luminy® PLA is experiencing a surging demand. The additional investment in lactic acid demonstrates our continuing commitment to supporting both our current customers and the Total Corbion PLA joint venture. In 2020 Corbion and Total announced the intention to build a new PLA bioplastics plant in France. Combined with the offering of an innovative portfolio that includes high-heat Luminy® PLA resins and recycled PLA which was added to the portfolio in 2021, and extensive application development, this new plant will help to establish Total Corbion PLA's leadership position in PLA bioplastics.
Incubator
Our three main initiatives in Incubator are algae-based omega-3 (starting with fish feed applications), algae ingredients, and our co-polymers platform. In our Incubator, we plan to bring omega-3 DHA to break even in 2022 and realize further profitable growth beyond 2022, while we stay committed to investing in initiatives with a longer time horizon. The co-polymers platform is a lactic-acid-based, controlled-release co-polymer technology, which builds on our (medical) polymer expertise. Due to lack of strategic fit, the FDCA program was terminated in 2021.
Research and development initiatives
We live in a rapidly changing world, where critical success factors include agility to respond to change, strong collaborative networks, and (open) innovation. Increasingly, business development is executed with partners in the value chain that rely on their suppliers for innovation and provision of R&D services. In addition, there is a strong desire in multiple markets to provide scientific evidence for functionality claims. Similarly, increased awareness in society and the marketplace of the burden we place on our planet has fueled the demand for science-based proof and solutions to reduce the environmental impact of manufacturing and use of products.
Both the trend toward collaborative innovation and the need for evidence of functionality and sustainability provide an opportunity for Corbion. To capture these opportunities we have refocused in-house R&D to support accelerated execution of Advance 2025 and increasingly pursue new opportunities via open innovation. Several opportunities for outside-in innovation have been identified in the six focus areas of Advance 2025.
Our strategy for 2020-2025 projects R&D spend at 4% of net sales.
Investments over strategy period
Having established a leading global position in lactic acid and lactic acid derivatives, it is of strategic importance that we maintain a differentiated position. Increased demand for lactic acid, mainly driven by its crucial role in PLA production, will lead us to invest in expansions of all our existing lactic acid facilities and to construct a new lactic acid plant in Thailand that uses our new circular production technology. Next to that, together with TotalEnergies we have announced the intention to build a new 100,000 metric tons per annum PLA bioplastics plant in France through the Total Corbion PLA joint venture. Our Algae Ingredients business will also require further investment as we continue to improve existing products and to develop new products with this platform. Other technology investments will enable us to enhance our readiness to use next-generation feedstocks such as second-generation sugars from agricultural residues as soon as they become available. We will strengthen our workforce capabilities to advance key strategic initiatives, such as continuing to develop and implement our solutions model in food, expanding our bakery operations in Latin America, and delivering on our medical biomaterials and biochemicals initiatives. The strategy period also encompasses a significant multi-year investment in a new Enterprise Resource Planning platform (SAP S/4HANA) which, in concert with the execution of various excellence programs, will help drive progress toward our strategic objectives.
Targets Advance 2025
Sustainable development targets
2025 1 | 2030 1 | |
Preserving food and food production | ||
% of cane sugar verified responsibly sourced2 | 100% | 100% |
% of verified deforestation-free key agricultural raw materials3,4 | 100% | 100% |
% of Product Social Metrics5 coverage for products contributing to preserving food and food production6 | 50% | 100% |
Preserving health | ||
Total Recordable Injury Rate7 | < 0.5 | < 0.25 |
% of Product Social Metrics5 coverage for products contributing to preserving health6 | 50% | 100% |
Preserving the planet | ||
Renewable electricity | 100% | 100% |
Reduction of Scope I, II, III emissions (SBTi-approved target)8 | 20% | 33% |
% recycled by-products9 | 100% | 100% |
Landfill of waste | 0 kT | 0 kT |
% of Life Cycle Assessment10 coverage for products contributing to preserving the planet6 | 100% | 100% |
Preserving what matters | ||
% of products11 contributing to preserving food and food production, health, and/or the planet6 | > 70% | > 80% |
- 1 Targets based on current manufacturing footprint; to be reviewed in case of acquisitions / major changes. Bonsucro-certified or meeting the requirements of Corbion’s cane sugar code verified by third-party audits, by quantity.
- 2 Bonsucro-certified or meeting the requirements of Corbion’s cane sugar code verified by third-party audits, by quantity. See our cane sugar policy for more information
- 3 Key agricultural raw materials include cane sugar, dextrose derived from corn, palm oil and derivatives, soy-bean oil and derivatives, and wheat, by quantity.
- 4 Through Bonsucro certification, RSPO certification or other certification covering deforestation; or demonstrated to be deforestation-free based on satellite data, third-party audits (e.g. Corbion cane sugar code audit), and/or country of origin statements, by quantity.
- 5 The Product Social Metrics assessment is done according to the methodology described in the Handbook for Product Social Impact Assessment, published by the Roundtable for Product Social Metrics and applies to products manufactured at Corbion sites (outsourcing is excluded). By quantity.
- 6 Products for which there is evidence that the product contributes to the identified impact categories. See Sustainability statements for more details.
- 7 Based on OSHA guidelines. Including contractors.
- 8 Per metric ton of product. Our science-based target includes Scope I emissions from direct production (from natural gas), Scope II emissions from purchased energy (electricity and purchased steam, market-based), and Scope III emissions related to key raw materials and transport. Our 2030 target is approved by the Science Based Targets initiative. Progress is reported compared to 2016 as base year.
- 9 By quantity.
- 10 Life Cycle Assessment (LCA) is peer reviewed according to the ISO 14040/44 standards for Corbion’s core products (such as lactic acid) or done according to the “LCA Approach for Corbion’s Product Portfolio: Lactic acid derivative plants, Corbion 2017,” which has been externally reviewed against and is considered to be in line with the principles of the ISO 14040/44 standards. Applies to products manufactured at Corbion sites (outsourcing is excluded). By quantity.
- 11 By revenue.
Financial guidance
The Advance 2025 strategy aims to deliver organic sales growth of between 4 and 7 percent annually for Corbion’s core activities.
Financial targets (Core activities) | Target | |
Corbion | Organic net sales growth | 4 - 7% |
Corbion | EBITDA margin | >17% from 2025 |
Underlying ambitions | ||
Sustainable Food Solutions | Organic sales growth | ~3% |
Lactic Acid & Specialties | Organic sales growth | ~7% |
Incubator: omega-3 | EBITDA | Break-even by 2022 |
Incubator: other | EBITDA investment | 0.5 - 1.5% of Corbion sales |
Corbion | Capex recurring | € 60 - 70 mln |
Corbion | Capex new plants | 2020-2022 avg. € 55 mln p.a. |
Corbion | ROCE | >WACC |
Our performance
Business performance
Sustainable Food Solutions
Through our Sustainable Food Solutions business, Corbion serves as a global provider of value-adding ingredient solutions for the world’s leading food manufacturers. We partner with our customers to create delicious foods of consistent quality that meet the demands of today’s consumers, while giving manufacturers what they need to achieve sustainable business success. This year in particular highlighted the relevance of our core competencies in Sustainable Food Solutions to many of our customers' key challenges. Never before has global business been confronted with such a varied and extensive aggregation of risk, including risks in the supply chain, in agricultural crops/yields due to climate conditions, in material availability, in the supply/demand balance, in the labor force, in personal safety, and in business continuity. By providing complete solutions or risk reduction measures, Corbion’s Sustainable Food Solutions business unit has made it possible for our customers to continue putting food on grocery store shelves across the world, in spite of an uncertain business climate.
In the bakery segment, our solutions enabled customers to quickly and successfully reformulate their consumer products in response to breakdowns as they occurred at various points along the supply chain, including shortages caused by climate impacts on agricultural crops. For example, we rapidly prototyped and launched Pristine® 3000 to help bakers respond to the undersupply of vital wheat gluten, a critical raw material in the baking industry. We allowed customers to reduce their economic risks by providing effective alternatives to high-priced ingredients, in addition to helping them create simpler, more understandable food formulations, as consumers increasingly associate these products with better health, a stronger body, and stronger immunity. Corbion’s functional systems and preservation technologies continued their growth trajectory in this market environment. With both sugar costs and consumer interest in better-for-you foods rising, bakers continue to turn to us for help in reducing sugar in their product formulations. We drew on our expertise in antimicrobials and our understanding of spoilage organisms and applications to deliver innovative, natural mold inhibitors that further extend the shelf life of bakery products with ingredients that feel familiar and comfortable to consumers.
We continued to execute our strategy of investing to expand the services we provide, constructing new labs in China and Singapore, and adding a dairy lab to our existing Lenexa applications laboratories. These additions now enable us to deliver full service to our customers in all major regions of the world, and to develop new applications and solutions in proximity to markets that have a regional and cultural influence on consumer trends and preferences. In addition, Granotec do Mexico, acquired in June 2021, is now a fully integrated part of Corbion. It provides us with a production base in Mexico and aligns with our strategy to acquire assets in specific geographies to meet the growing customer demand for functional blends. In combination with the Brazilian blending plant we acquired previously, we now have a solid presence in the growing, opportunity-rich Latin American region. Also, as part of our strategy, we exited the Frozen Dough business in January 2021 to enable a sharper focus on ingredient solutions.
The consumer movement favoring products made with more natural and familiar ingredients, as well as those perceived as more sustainable, has persisted through the COVID-19 pandemic. Accordingly, we continued to focus on natural meat preservation, expanding efforts into more applications, including dips, sauces and chilled foods. Early successes in this area include sales of our natural mold inhibitors for culinary sauces and dressings, as well as ready-to-eat deli salads. The pandemic has prompted a number of significant changes in consumer shopping patterns – stocking up, making fewer retail visits, increased online purchasing, and food deliveries left on the doorstep – all predicted to continue in the foreseeable future. These changes create steep challenges for manufacturers as they work to ensure their products remain safe and fresh. Increased market demand for natural solutions has contributed to global supply chain issues for all players in this market. Even so, our Verdad® Vinegars and Verdad® Avanta preservation solutions grew during this time as Corbion was able to meet the growing demand; our diversified supplier base and global production footprint provided us a competitive advantage, enabling us to adapt quickly and gain market share by keeping our customers’ production running. In addition, we invested to expand production capacity for our natural ferment products at our Peoria, US plant.
Also illuminated by the pandemic is consumers’ desire for greater balance in all areas of life, including food. While health and wellness remain a priority, the market has seen a noticeable uptick in the demand for premium foods and indulgence. The timeliness and relevance of our coated acid (PPMA) product in light of that demand can be seen in its growth last year; PPMA helps confectioners create sour acid-sanded candies that offer innovative sensory experiences, distinctive sourness, and enhanced stability. Such solutions are helping key global confectionery customers continue to innovate, and market success is bringing them back to Corbion for additional volume.
Lactic Acid & Specialties
Biochemicals
In the home and personal care market, we continue to see increased demand for hygiene and cleaning products triggered by the COVID-19 pandemic. We have seen that our PURAC® Sanilac solution helps brand owners meet the market’s urgent need for effective sanitizing solutions.
In the electronics industry, the semiconductor business is driving growth in our PURASOLV® esters portfolio. This market is growing fast with the continued rise in data processing – 5G, Internet of Things, electric vehicles, Big Data, and Industry 4.0 all stimulating demand for chips and memory, pushing the trend toward ever-higher performance at nano scale. By focusing on leadership in product quality and purity, Corbion’s strategy aligns with the need for continuous improvement on the part of the semiconductor material industry. In 2021, we successfully completed a major capacity extension for this product range to enable us to further support growth of the electronic industry.
Market requirements in the pharma segment are becoming more stringent every year. Our PURASAL® pharma line is produced according to strict cGMP guidelines and complies with the highest quality standards, as demanded by the industry. Corbion enables its customers to continue meeting increasingly rigorous standards by delivering proven, consistent product quality, providing a transparent and reliable supply chain, and offering customization options and increased service levels. In 2021, we benefitted from a strong underlying growth dynamic supported by the move to home dialysis.
The agrochemicals market was also lightly affected by the COVID-19 pandemic, albeit indirectly, causing some volatility at Corbion’s customers and changing ordering patterns in anticipation of supply chain risks. Favorable wet weather conditions resulted in relatively strong demand for our solvents in 2021 despite regulatory headwinds in the EU triggering some phase-outs of end products in which PURASOLV® is formulated. In line with our strategy, we continue to focus on helping customers create environmentally-friendly biopesticide products using our PURASOLV® green solvents, which are well aligned with industry trends.
Biomaterials
In the orthopedic segment of the healthcare market, a gradual recovery of the business has been observed from the second quarter of the year onwards, after a drop in demand for our products caused by a decline in elective surgeries during 2020 and the early part of 2021. Furthermore, development projects that customers had either postponed or slowed down due to the COVID-19 pandemic, were re-initiated. Next to that, customer development efforts contributed to increasing sales and new enquiries for our resorbable polymers as from the second quarter of 2021.
In the area of drug delivery, we continue to see strong demand and further interest in our products, leading to a growing pipeline of projects. We keep working closely together with our pharmaceutical customers to improve the quality of life of patients worldwide and increase the number of patient-friendly and cost-effective treatment solutions available to them.
A significant milestone was achieved in August for our CM Biomaterials joint venture with the French pharmaceutical company Medincell. Jointly with their partner Teva Pharmaceuticals, they announced the first New Drug Application (NDA) with the US Food and Drug Administration (FDA) of a product that incorporates polymers supplied by the CM Biomaterials joint venture and manufactured by Corbion.
In addition, a range of applications based on major active pharmaceutical ingredients and our PURASORB® polymers are currently advancing through different phases of (clinical) testing, covering both the use of existing controlled-release technologies (e.g. long-acting injectables) and enabling innovative dosage forms, in different clinical indications and delivery routes, contributing to 2021 sales and projected to grow strongly during the Advance 2025 strategy period.
We have been able to develop a process to make our new fiber-reinforced polymer composite FiberLive® available for testing, although we have seen delays in this project’s progress.
Total Corbion PLA joint venture
The Total Corbion PLA joint venture continued to perform well in 2021, as Luminy® PLA production in Thailand continues to ramp up and strong market demand supports healthy price levels. In 2020, Corbion and TotalEnergies announced their intention to build the first world-scale PLA bioplastics production facility in Europe through the Total Corbion PLA joint venture. This plant, which will be constructed in Grandpuits, France, is currently in the engineering phase and is expected to be operational in 2024. Corbion will continue to be the supplier of lactic acid to the Total Corbion PLA joint venture. This additional PLA investment further accelerates plans to expand lactic acid production, with Europe being the likely site of a future facility. This is currently under investigation both in terms of technology and location.
Incubator
In our Incubator we develop new technologies, products, and business with a longer term development perspective. Examples of such incubation projects are algae-based omega-3, algae ingredients, and our co-polymers platform.
Algae Ingredients
In 2021, Algae Ingredients experienced significant growth in the algae-based omega-3 business in aquaculture and expanded into new categories including pet food and production animal feed. It further drove its mission to unleash the power of microalgae through fermentation to preserve the planet’s limited resources.
Aquaculture plays a prominent role in addressing food security, while contributing to ocean protection and economic prosperity. To meet the ocean action agenda goals, it is stated that growth of aquaculture will be dependent on the ability to reduce its impact on the ecosystem and a key element will be the sustainability of feed.
Corbion Algae Ingredients partnered with Nofima and other leading organizations across the value chain to form the Millennial Salmon project. The goal of the four-year project is to create the most sustainably farmed salmon using novel ingredients from the circular economy and with a low carbon footprint while addressing the initiative’s “millennial principles of life” – living healthy, leading a purposeful life, trusting peers, and considering their societal and environmental impacts.
In 2021 we had the results of our AlgaPrime LCA (Life Cycle Assessment) study peer reviewed and published. The results indicate that when comparing AlgaPrime DHA to traditional sources of fish oil on an omega-3 basis, AlgaPrime DHA has a lower carbon footprint. This analysis, and the low carbon footprint of AlgaPrime DHA are critical for customers who are working to meet carbon reduction goals for their own operations and for their customers.
We continued to leverage Corbion’s unique expertise in large-scale industrial fermentation to supply algae omega-3s at scale, affordably and sustainably. Our plant in Brazil has ample capacity to facilitate fast growth for the next 5-10 years and we have a program in place for de-bottlenecking and process optimization to improve output.
Other projects
Co-polymers platform
In the world of polymers and materials we see an increased need for new functionalities that enable our customers’ products to achieve required performance targets while reducing environmental impact through biodegradability. Through SENTIALL®, a versatile co-polymers platform that delivers specific, high-value functionalities such as adhesion and controlled release we are able to address these needs in the market. In 2021 we made significant progress in developing new lactic-acid-based co-polymers functionalities and demonstrated prototype products.
Open Innovation
The Open Innovation team aims to accelerate growth by feeding the front-end of the innovation funnel and boosting the innovation hit rate. For Corbion, Open innovation is a business model that feeds the business units and Incubator with transformational innovation, converting breakthrough ideas into new products and business. The Open Innovation team is scouting and vetting selected external partners in focused domains of interest, chosen for their potential to grow the business in the long run, including beyond the Advance 2025 strategic period.
Open innovation is critical to accelerate access to technical and application competencies that enable our growth. At the same time we feel it is our responsibility to provide young entrepreneurs with an opportunity to test and grow their ideas, adding to the credibility and impact of their ventures. Similarly, open innovation is essential in the transition toward a world in which our planet's natural boundaries are respected.
With that in mind we invested in SHIFT III, the largest seed and early-stage impact investor in the Netherlands, and in the European Circular Bioeconomy Fund (ECBF), the first venture fund exclusively focused on the circular bioeconomy in Europe. Participating in these funds has already enabled us to connect to other sustainability-focused corporates and start-ups, which we expect to contribute to the volume and acceleration of our innovations.
Financial performance
Key figures
Millions of euros | 2021 | 2020 |
Net sales | 1,070.8 | 986.5 |
Operating result | 82.0 | 104.1 |
Adjusted EBITDA 1 | 135.8 | 158.8 |
Result after taxes | 78.3 | 73.1 |
Earnings per share in euros 2 | 1.33 | 1.24 |
Diluted earnings per share in euros 2 | 1.32 | 1.23 |
Number of issued ordinary shares | 59,242,792 | 59,242,792 |
Number of ordinary shares with dividend rights | 58,950,269 | 58,871,671 |
Weighted average number of outstanding ordinary shares | 58,926,368 | 58,851,367 |
Price as at 31 December | 41.44 | 46.15 |
Highest price in calendar year | 53.60 | 46.70 |
Lowest price in calendar year | 37.72 | 22.54 |
Market capitalization as at 31 December 3 | 2,443 | 2,717 |
Other key data | ||
Cash flow from operating activities | 22.4 | 109.0 |
Cash flow from operating activities per ordinary share, in euros 2 | 0.38 | 1.85 |
Free cash flow 4 | -97.0 | 32.1 |
Depreciation/amortization (in)tangible fixed assets | 64.1 | 60.3 |
Capital expenditure on (in)tangible fixed assets | 165.0 | 89.7 |
Equity per share in euros 5 | 9.40 | 8.76 |
Regular dividend in euros per ordinary share (reporting year) | 0.56 | 0.56 |
Ratios | ||
ROCE % 6 | 9.6 | 12.9 |
Adjusted EBITDA margin % 7 | 12.7 | 16.1 |
Result after taxes/net sales % | 7.3 | 7.4 |
Number of employees at closing date (FTE) | 2,493 | 2,267 |
Covenant net debt position/covenant EBITDA 8 | 2.6 | 1.7 |
Interest cover 9 | 14.6 | 16.5 |
Statement of financial position | ||
Non-current assets | 836.6 | 689.4 |
Current assets excluding cash and cash equivalents | 462.3 | 333.5 |
Non-interest-bearing current liabilities | 227.5 | 173.8 |
Covenant net debt position 10 | 361.6 | 284.2 |
Total net debt position 11 | 461.0 | 284.2 |
Other non-current liabilities | 16.9 | 18.5 |
Provisions | 39.4 | 30.4 |
Equity | 554.1 | 516.0 |
Capital employed 12 | 1,032.0 | 818.7 |
Average capital employed 12 | 935.8 | 841.8 |
Balance sheet total : equity | 1:0.4 | 1:0.5 |
Net debt position : equity | 1:1.2 | 1:1.8 |
Current assets : current liabilities | 1:0.6 | 1:0.6 |
- 1 Adjusted EBITDA is the operating result before depreciation, amortization, impairment of (in)tangible fixed assets and after adjustments.
- 2 Per ordinary share in euros after deduction of dividend on financing preference shares.
- 3 Market capitalization is calculated by multiplying the number of ordinary shares with dividend rights by the share price at the closing date.
- 4 Free cash flow comprises cash flow from operating activities and cash flow from investment activities.
- 5 Equity per share is equity divided by the number of shares with dividend rights.
- 6 Return on capital employed (ROCE) is defined by Corbion as adjusted operating result, including results from joint ventures and associates, divided by the average capital employed x 100.
- 7 Adjusted EBITDA margin % is adjusted EBITDA as defined above divided by net sales x 100
- 8 Covenant EBITDA is adjusted EBITDA as defined above, increased by cash dividend of joint ventures received and annualization effect of newly acquired and/or divested subsidiaries.
- 9 Interest cover is covenant EBITDA as defined above divided by net interest income and charges.
- 10 Covenant net debt position comprises borrowings (excluding subordinated loans), and lease liabilities less cash and cash equivalents, including third-party guarantees which are required to be included under the debt covenants.
- 11 Total net debt position comprises borrowings and lease liabilities less cash and cash equivalents, including third-party guarantees which are required to be included under the debt covenants.
- 12 Capital employed and average capital employed are based on balance sheet book values.
Results
Financial guidance Advance 2025
Financial targets (Core activities) | Target | Results 2021 | |
Corbion | Organic net sales growth | 4 - 7% | 15.0% |
Corbion | EBITDA margin | >17% from 2025 | 12.7% |
Underlying ambitions | |||
Sustainable Food Solutions | Organic sales growth | ~3% | 10.8% |
Lactic Acid & Specialties | Organic sales growth | ~7% | 17.0% |
Incubator: omega-3 | EBITDA | Break-even by 2022 | -8.4 |
Incubator: other | EBITDA investment | 0.5 - 1.5% of Corbion sales | 0.4% |
Corbion | Capex recurring | € 60 - 70 mln | 100.1 |
Corbion | Capex new plants | 2020-2022 avg. € 55 mln p.a. | 64.9 |
Corbion | ROCE | >WACC | 9.6% |
Net sales
Net sales in 2021 increased by 8.5% to € 1,070.8 million (2020: € 986.5 million), due to a 14.7% organic increase, a currency impact of -4.1%, and net divestments of -2.1%.
Full year 2021 compared to full year 2020
Net sales | Volume | Price/Mix | Organic | Currency | Acquisitions/ (Divestments) | Total growth |
Core | 9.6% | 4.9% | 15.0% | -4.1% | 0.1% | 11.0% |
- Sustainable Food Solutions | 4.5% | 6.0% | 10.8% | -3.9% | 0.1% | 7.0% |
- Lactic Acid & Specialties | 14.4% | 2.3% | 17.0% | -3.8% | 0.0% | 13.2% |
- Incubator | 109.7% | 18.2% | 147.8% | -18.7% | 0.0% | 129.1% |
Non-core | 5.5% | 6.9% | 12.8% | -4.0% | -14.0% | -5.2% |
Total | 9.0% | 5.2% | 14.7% | -4.1% | -2.1% | 8.5% |
Net sales 2021
Raw materials
Carbohydrates share as % of the total raw material spend was flat compared to 2020. The relative share of fats, oils and waxes increased due to a rapeseed oil increase in our Algae business and relatively strong price increase in the oils in the US (renewable diesel). Due to a strong increase in oils, the other category became a relative smaller bucket compared to 2020.
Raw materials break down
EBITDA
Adjusted EBITDA decreased by 14.5% to € 135.8 million in 2021. Organic growth of -7.6%, the currency effect was -4.0%, and the net divestment effect was -2.9%.
€ million | 2021 | 2020 |
Net sales | ||
Core | 927.2 | 835.0 |
- Sustainable Food Solutions | 584.2 | 545.8 |
- Lactic Acid & Specialties | 312.3 | 275.8 |
- Incubator | 30.7 | 13.4 |
Non-core | 143.6 | 151.5 |
Total net sales | 1,070.8 | 986.5 |
Adjusted EBITDA | ||
Core | 118.1 | 135.3 |
- Sustainable Food Solutions | 69.3 | 92.7 |
- Lactic Acid & Specialties | 60.5 | 61.0 |
- Incubator | -11.7 | -18.4 |
Non-core | 17.7 | 23.5 |
Total Adjusted EBITDA | 135.8 | 158.8 |
Adjustments | 35.6 | 6.9 |
Total EBITDA | 171.4 | 165.7 |
Sustainable Food Solutions
€ million | 2021 | 2020 |
Net sales | 584.2 | 545.8 |
Organic growth | 10.8% | 6.8% |
EBITDA | 82.9 | 92.4 |
Adjusted EBITDA | 69.3 | 92.7 |
Adjusted EBITDA margin | 11.9% | 17.0% |
Net sales in Sustainable Food Solutions, increased organically by 10.8% in 2021.
For Preservation, 2021 was yet another strong year. Even though our largest end-market, the US processed meat market, was in decline, the trend to natural preservatives continues to gain ground. The strongest growth was seen in newer solutions such as vinegar powders and natural mold inhibitors for bread. We have begun to expand production capacity for natural ferments in Peoria, US.
Functional Systems was the fastest growing segment within Sustainable Food Solutions. Growth was driven by a higher than historic average win-rate. Growth was seen across categories at both existing customers and new customers. Innovation initiatives such as dough conditioning systems Pristine have also added to the growth rate.
Single Ingredients grew substantially in markets such as beverages and confectionery.
The Adjusted EBITDA margin decreased substantially from 17.0% to 11.9% due to higher input costs not yet reflected in the sales price, and increased fixed costs due to an investment in organizational capabilities (Advance 2025 related).
Lactic Acid & Specialties
€ million | 2021 | 2020 |
Net sales | 312.3 | 275.8 |
Organic growth | 17.0% | 6.2% |
EBITDA | 71.8 | 74.2 |
Adjusted EBITDA | 60.5 | 61.0 |
Adjusted EBITDA margin | 19.4% | 22.1% |
Net sales in Lactic Acid & Specialties in 2021 increased organically by 17.0%.
All product segments grew. Most of the growth was driven by sales of lactic acid to the Total Corbion PLA joint venture. Biopolymers started to recover as from the second quarter with double digit growth rates and finished the year strongly. We partially impaired the FiberLive technology due to slower than expected technological developments. We continue to see strong growth in pharma-grade lactates for the renal and IV markets, primarily driven by home hemodialysis. Esters (solvents) increased as the higher demand from the semiconductor market more than offset the decline in the agrochemicals market.
The Adjusted EBITDA margin decreased from 22.1% to 19.4% due to higher input costs not yet reflected in the sales price and an increase in fixed costs (especially related to investments in organizational capabilities in medical biopolymers, in-line with our Advance 2025 strategy.
Incubator
€ million | 2021 | 2020 |
Net sales | 30.7 | 13.4 |
Organic growth | 147.8% | 33.9% |
EBITDA | -12.4 | -19.4 |
Adjusted EBITDA | -11.7 | -18.4 |
Adjusted EBITDA margin | -38.1% | -137.3% |
Net sales in Incubator increased organically by 147.8% in 2021 driven by significant growth in AlgaPrime DHA (algae-based omega-3). The adoption of AlgaPrime DHA grew significantly with multiple leading aquaculture feed companies. We were able to deliver gains in algae strain efficiency and higher volumes that helped to offset the higher costs of materials and transport. In addition to the salmon market, we expanded into new categories including shrimp and pet food.
The Adjusted EBITDA loss in 2021 improved to € -11.7 million (2020: € -18.4 million) due to the growth in sales.
Non-core activities
€ million | 2021 | 2020 |
Net sales | 143.6 | 151.5 |
Organic growth | 12.8% | -1.1% |
EBITDA | 29.1 | 18.5 |
Adjusted EBITDA | 17.7 | 23.5 |
Adjusted EBITDA margin | 12.3% | 15.5% |
Non-core activities (Emulsifiers) organic growth was 12.8% in 2021. As our plants remained operational during the COVID-19 pandemic we were able to gain market share. Frozen Dough was divested on 11 January 2021. Due to lack of strategic fit, the FDCA program was terminated in 2021. The Adjusted EBITDA margin decreased from 15.5% to 12.3% as input costs (mostly soybean oil related) accelerated rapidly during 2021.
Total Corbion PLA joint venture
€ million * | 2021 | 2020 |
Net sales | 159.8 | 129.3 |
EBITDA | 54.6 | 47.7 |
EBITDA margin | 34.2% | 36.9% |
- * Results on 100% basis. Corbion owns 50% of Total Corbion PLA
Sales increased by 23.6% in 2021 (organic growth of 28.1%). Demand for PLA continues to be robust. The EBITDA margin decreased from 36.9% to 34.2% as higher plant utilization rates were offset by higher lactic acid costs, higher freight rates, and investments in organization.
Depreciation, amortization, and impairment
Depreciation, amortization, and impairment of fixed assets amounted to € 89.4 million compared to € 61.6 million in 2020.
Operating result
Adjusted operating result decreased by € 26.8 million to € 71.7 million in 2021 (2020: € 98.5 million).
Adjustments
In 2021, total adjustments of € 18.6 million were recorded (at Result after tax level), consisting of the following components:
-
-
Gain of € 18.4 million related to the sale of a plot of land in the Dutch municipality of Breda
-
Gain of € 11.3 million related to the sale of the Frozen Dough activities
-
Gain of € 6.1 million related to recognition of VAT receivable positions in Brazil
-
Gain of € 2.9 million related to received insurance proceeds for inventory write-down in prior years
-
Loss of € 16.6 million related to an impairment on the FiberLive development
-
Loss of € 3.7 million related to an impairment on the FDCA development
-
Loss of € 2.9 million related to incremental cost as a result of the production outage in our Blair facility
-
Loss of € 1.3 million related to settlement of a tax claim in the US and to de-risk a defined benefit pension scheme.
-
Loss of € 0.9 million related to the acquisition of Granotec Mexico
-
Loss of € 0.8 million related to restructuring costs
-
Loss of € 0.7 million as a result of a litigation claims
-
Loss of € 0.6 million related to demolition costs
-
Fair value adjustment of € 0.2 million on the contingent consideration payable related to the Algae acquisition
-
Tax effects on the above of € 7.6 million
-
Financial income and charges
Net financial charges decreased with € 6.7 million to € 14.2 million, mainly as a result of decreased exchange rate differences.
Taxes
The tax charge on our operations in 2021 amounted to € 8.2 million compared to a charge of € 14.6 million in 2020. In 2021, the effective tax rate of 9.5% was mainly the result of the application of the participation exemption on the positive results of the Total Corbion PLA joint venture which are not taxable under the provision of the Dutch participation exemption, as well as the recognition of a previously unrecognized deferred tax asset which materialized as a result of the sale of a plot of land in the Dutch municipality of Breda.
For 2022, we expect a normalized effective tax rate (excluding the joint venture results which are exempt under the participation exemption) of approximately 25% in line with the tax rates in the main jurisdictions where Corbion has its operations.
Statement of financial position
Capital employed increased, compared to year-end 2020, by € 213.3 million to € 1,032.0 million. The movements were:
€ million | |
Capital expenditure on (in)tangible fixed assets | 165.0 |
Lease contract movements | 21.4 |
Acquisition Granotec Mexico | 11.1 |
Divestment Frozen Dough business | -8.6 |
Disposal of fixed assets | -3.1 |
Depreciation / amortization / impairment of (in)tangible fixed assets | -89.4 |
Change in operating working capital | 61.9 |
Change in provisions, other working capital and financial assets/ accruals | -2.0 |
Movements related to joint ventures | 7.1 |
Taxes | 21.0 |
Exchange rate differences | 28.9 |
Major capital expenditure projects were investments related to our new 125kt lactic acid plant in Thailand, our lactic acid capacity expansion, and capex amounts related to our new SAP ERP platform.
Operating working capital increased by € 76.1 million, mainly driven by an operational increase of € 61.9 million This increase was mainly caused by higher inventories as a result of higher raw material prices, higher safety stocks, and longer lead times in the supply chain. Additional components were spare parts reclassification from tangible fixed assets to inventory of € 2.6 million, acquisition and divestment effects related to Granotec Mexico and Frozen Dough of € 1.8 million, and currency effects of € 9.8 million.
Shareholders' equity increased by € 38.1 million to € 554.1 million. The movements were:
-
-
The positive result after taxes of € 78.3 million;
-
A decrease of € 33.0 million related to the cash dividend for financial year 2020;
-
Positive exchange rate differences of € 5.3 million due to the translation of equity denominated in currencies other than the euro;
-
Positive movement of € 3.6 million in the hedge reserve;
-
Negative remeasurement effect of defined benefit arrangement of € 20.1 million;
-
Net share-based remuneration movement of € 0.4 million;
-
Negative tax effects of € 3.6 million.
-
At year-end 2021 the ratio between balance sheet total and equity was 1:0.4 (2020 year-end: 1:0.5).
Cash flow/Financing
Cash flow from operating activities decreased compared to year-end 2020 by € 86.6 million to € 22.4 million. This is the balance of the lower operational cash flow before movements in working capital of € 11.6 million, a negative impact of the movement in working capital and provisions of € 58.6 million, and higher taxes and interest paid of € 16.4 million.
The cash flow required for investment activities increased compared to 2020 by € 42.5 million to € 119.4 million. Capital expenditures (€ 148.7 million) accounted for most of this cash outflow together with the acquisition of the assets of Granotec Mexico, partly compensated by dividend from the Total Corbion PLA joint venture, the proceeds from the sale of our Frozen Dough activities, the sales of a plot of land in the Dutch municipality Breda and payments received related to the sale (in 2017) of the subsidiary Total Corbion PLA (Thailand) Limited to the joint venture Total Corbion PLA bv.
The total net debt position at year-end 2021 was € 461.0 million, an increase of € 176.8 million compared to year-end 2020, mainly caused by the dividend payment, capital expenditures, and increased working capital positions, partly compensated by the positive cash flow from operating activities. The covenant net debt (excluding the subordinated loan) was € 361.6 million at year end 2021.
At year-end 2021, the ratio of covenant net debt to covenant EBITDA was 2.6x (end of 2020: 1.7x ). The interest cover for 2020 was 14.6x (end of 2020: 16.5x), well within the limits of our financing covenants.
Subsequent events
On 11 January 2022, Corbion sold a warehouse in Totowa (US), classified as held for sale in the 2021 Consolidated financial statements. The sales price amounted to $ 11.5 million (€ 9.7 million) and the expected pre-tax result on the transaction amounts to around $ 10.2 million (€ 8.6 million) to be recognized in the 2022 financial statements.
Reservation and dividend policy
Corbion’s reservation policy is aimed at creating and retaining sufficient financial capacity and flexibility to realize our strategic objectives while maintaining healthy balance sheet ratios. Corbion intends to add the profit (or charge the loss) to the company reserves after deduction of the proposed dividend on ordinary shares. Events potentially impacting our financing requirements such as acquisitions, divestments, reorganizations, or other strategic considerations can lead to adjustments in the reservation amount and the reservation policy. As regards Corbion’s dividend policy, the amount and structure of dividend on ordinary shares that the company will pay to its shareholders depend on the financial results of the company, the market environment, the outlook, and other relevant factors. The dividend policy has the ambition to annually pay out a stable to gradually increasing absolute cash dividend amount per share (progressive regular dividend policy), subject to annual review of the outlook of the covenant net debt/covenant EBITDA ratio development. This review will be based on multiple criteria such as major investments, timing of M&A, or divestment initiatives.
Dividend proposal
A proposal to distribute an unchanged, regular dividend in cash of € 0.56 per ordinary share (2020: € 0.56) will be submitted for approval to the annual General Meeting of Shareholders, to be held on 18 May 2022. This represents 43% of our 2020 Adjusted result after taxes. The dividend will be charged to the Corbion reserves.
Sustainability performance
Sustainability performance indicators
Preserving what matters | ||||
KPI | 2030 Target1 | 2025 Target1 | 2021 | 2020 |
% of products2 contributing to preserving food and food production, health, and/or the planet3,4 √ | > 80% | > 70% | 60% | 61% |
% of innovation projects contributing to preserving food and food production, health, and/or the planet4,5 √ | 100% | 100% | ||
% of raw materials covered by generic supplier code6 √ | > 90% | > 90% | 100% | 99% |
% of raw material/supplier combinations with high sustainability risk7 | < 10% | < 10% | 11% | 10% |
% of high-risk raw materials/supplier combinations with mitigation plan7 | > 90% | > 90% | 99% | 96% |
Code of Business Conduct training completion rate | 100% | 100% | 99% (1,781 | 100% (1,592) |
Anti-corruption training completion rate (% and number) | 100% | 100% | 100% (479) | n/a |
Competition law training completion rate (% and number) | 100% | 100% | n/a | 100% (476) |
Number of Speak Up/whistleblowing contacts - internal / external | 20/0 | 26/0 | ||
Number of Speak Up/whistleblowing contacts with merit – internal / external | 12/0 | 16/0 |
Preserving food and food production | ||||
KPI | 2030 Target1 | 2025 Target1 | 2021 | 2020 |
% of cane sugar verified responsibly sourced4,8 √ | 100% | 100% | 73% | 66% |
% of verified deforestation-free key agricultural raw materials4,9 √ | 100% | 100% | 82% | 83% |
% of products2 contributing to preserving food and food production3,4 √ | - | - | 30% | 29% 16 |
% of innovation projects contributing to preserving food and food production4,5 √ | - | - | 62% | 67% |
% of Product Social Metrics10 coverage for products contributing to preserving food and food production3,4 √ | 100% | 50% | 34% | 1% |
Preserving health | ||||
KPI | 2030 Target1 | 2025 Target1 | 2021 | 2020 |
Total Recordable Injury Rate4,11 √ | < 0.25 | < 0.5 | 0.66 | 0.84 16 |
% of sites certified according to internationally recognized food safety management system standards4,12 √ | 100% | 100% | 100% | 100% |
# of SIN list13 chemicals produced | 0 | 0 | 0 | 0 |
# of EU REACH Candidate List chemicals produced | 0 | 0 | 0 | 0 |
# of EU REACH Authorization List chemicals produced | 0 | 0 | 0 | 0 |
% of products2 contributing to preserving health3,4 √ | - | - | 34% | 33% 16 |
% of innovation projects contributing to preserving health4,5 √ | - | - | 77% | 87% |
% of Product Social Metrics10 coverage for products contributing to preserving health3,4 √ | 100% | 50% | 35% | 1% |
Preserving the planet | ||||
KPI | 2030 Target1 | 2025 Target1 | 2021 | 2020 |
% biobased raw materials6 √ | > 95% | > 95% | 98% | 98% |
Renewable electricity √ | 100% | 90% | 79% | 71% |
Reduction of Scope I, II emissions14 √ | - | - | 40% | 32% 17 |
Reduction of Scope I, II, III emissions (SBTi-approved target) 14 √ | 33% | 20% | 27% | 20% 17 |
% recycled by-products6 √ | 100% | 100% | 97% | 98% |
Landfill of waste √ | 0 | - | 1.8 kT | 1.8 kT |
% of products2 contributing to preserving the planet3,4 √ | - | - | 49% | 49% 16 |
% of innovation projects contributing to preserving the planet4,5 √ | - | - | 62% | 73% |
% of Life Cycle Assessment15 coverage for products contributing to preserving the planet3,4 √ | 100% | 100% | 86% | 80% |
- 1 Targets based on current manufacturing footprint; to be reviewed in case of acquisitions / major changes.
- 2 By revenue.
- 3 Products for which there is evidence that the product contributes to the identified impact categories. See Sustainability statements for more details.
- 4 Not included in review by external auditor in 2020
- 5 Innovation projects targeting the development of products that contribute to the identified impact categories, by number of projects. Only adjacent and transformational innovations are included. Projects aimed at optimizing existing value propositions for existing customers are not included. See Sustainability statements for more details. The 2020 data have been restated, because we adjusted the definition of the denominator (in 2020 defined as expected revenues in 5 years).
- 6 By quantity.
- 7 By number, based on Corbion’s security-of-supply assessment methodology.
- 8 Bonsucro-certified or meeting the requirements of Corbion’s cane sugar code verified by third-party audits, by quantity.
- 9 Through Bonsucro certification, RSPO certification, or other certification covering deforestation; or demonstrated to be deforestation-free based on satellite data, third-party audits (e.g. Corbion cane sugar code audit), and/or country of origin statements, by quantity. Key agricultural raw materials include cane sugar, dextrose derived from corn, palm oil and derivatives, soy-bean oil and derivatives, and wheat, by quantity
- 10 The Product Social Metrics assessment is done according to the methodology described in the Handbook for Product Social Impact Assessment, published by the Roundtable for Product Social Metrics and applies to products manufactured at Corbion sites (outsourcing is excluded). By quantity.
- 11 Based on OSHA guidelines. Including contractors. In 2020 excluding our facility in Araucária (Granotec do Brazil) which was acquired in 2019.
- 12 Applies to sites where food ingredients are produced, by number. Standards recognized by the Global Food Safety Initiative (GFSI): BRC, FSCC22000, SQF.
- 13 The Substitute It Now (SIN) list is a list of hazardous chemicals that have been identified as being Substances of Very High Concern, based on the criteria defined within REACH, the EU chemicals legislation. The SIN list is developed by the non-profit organization ChemSec.
- 14 We report our emissions in accordance with the Greenhouse Gas Protocol per metric ton of product. Our Science Based Target includes Scope I emissions from direct production (from natural gas), Scope II emissions from purchased energy (electricity and purchased steam, market-based), and Scope III emissions related to key raw materials and transport. Our full Scope III emissions and biogenic emissions are reported in the Sustainability statements. Our 2030 target is approved by the Science Based Targets initiative. Progress is reported against 2016 as base year.
- 15 Life Cycle Assessment (LCA) is peer reviewed according to ISO 14040/44 standards for Corbion’s core products (such as lactic acid) or done according to the “LCA Approach for Corbion’s Product Portfolio: Lactic acid derivative plants, Corbion 2017,” which has been externally reviewed against and is considered to be in line with the principles of the ISO 14040/44 standards. Applies to products manufactured at Corbion sites (outsourcing is excluded). By quantity.
- 16 Restated due to data quality improvements.
- 17 Restated due to data quality improvements and updated scope. In line with the requirements of the Science Based Targets initiative, the scope is corrected for acquisitions and divestments.
- √ = reviewed by external auditor
Preserving what matters
Corbion’s impact on the Sustainable Development Goals
In preparation for our strategy update Advance 2025 we assessed our entire product portfolio and our value chain with a view to the potential – positive and negative – impact on the Sustainable Development Goals. From this assessment, we learned that SDG 2 (Zero hunger), SDG 3 (Good health and well-being), and SDG 12 (Responsible consumption and production) are the goals where we can have the most significant positive impact given our business activities. These SDGs have been linked to the three preservation themes of the Advance 2025 strategy, namely preserving food and food production (SDG 2), preserving health (SDG 3), and preserving the planet (SDG 12). We also recognize that our operations can (potentially) harm some of the SDGs. This includes the potential impact of Corbion’s manufacturing processes and use of raw materials on occupational health and safety (SDG 3), greenhouse gas emissions (SDG 13), deforestation (SDG 15), food security and agricultural impacts (SDG 2), and waste (SDG 12). Corbion’s Advance 2025 strategy includes ambitious targets (see Sustainability performance indicators) to minimize these adverse impacts. Our purpose is to preserve what matters by maximizing our positive impact and by minimizing any negative effects. See our Measuring what matters white paper that describes the SDG assessment in detail.
To monitor our impact, we track the overall contribution to the SDGs as a percentage of Corbion’s total revenues. In 2021, 60% of Corbion’s net sales contributed to preserving food and food production, health, and/or the planet. To increase this percentage in the years to come, we also assess our innovation projects on their (potential) SDG contribution as part of the innovation stage-gate process. Projects that do not contribute to the SDGs are adjusted or potentially cancelled. At the end of 2021, 100% of our innovation projects contributed to preserving food and food production, health, and/or the planet .
Human rights and labor conditions
Corbion is committed to respecting and upholding human rights and labor standards. We act in accordance with internationally declared human rights and adhere to applicable laws within the framework of our business activities. Our policies integrate principles from the United Nations Universal Declaration of Human Rights, the key conventions of the International Labour Organization, the OECD guidelines, and we are a signatory to the United Nations Global Compact.
Our Code of Business Conduct covers amongst others health and safety; inclusion, diversity, and equal employment opportunity; harassment; child and forced labor; working hours and compensation; and freedom of association. All Corbion employees are paid a living wage.
Corbion utilizes the Supplier Ethical Data Exchange (SEDEX) platform and the SEDEX Members Ethical Trade Audit (SMETA) to monitor the social performance and compliance of its manufacturing sites. SMETA assesses each site on four pillars: labor, health and safety, environment, and business ethics. Audits are conducted by an external third-party auditor at least every three years. Findings are monitored by global and site coordinators and corrective actions are implemented in case of non-compliance with our standards.
Through our supplier code and our cane sugar code, we expect our suppliers to respect human rights in their operations. See the sections on Sustainable sourcing and Sustainable agriculture in this chapter for more information on these codes and the governance thereof.
To understand Corbion's impact on human rights in our own operations and our supply chain, we conduct Product Social Impact Assessments. See the section on Product Social Impact Assessment in this chapter for more information.
Sustainable sourcing
A significant part of our value chain’s environmental and social impact is upstream of our operations. To safeguard our sustainable solutions’ overall positive environmental and social impact, we need to ensure our raw materials are sourced responsibly. We require all of our raw material suppliers to sign our supplier code for confirmation or demonstrate commitment to our code by compliance with company policies that embrace the standards included in our code. Our supplier code defines Corbion’s expectations in respect of our suppliers meeting our responsible sourcing commitment. The code consists of principles and criteria for business ethics, human rights and labor conditions, and environmental practices, based on the OECD Guidelines for Multinational Enterprises and the eight fundamental conventions defined by the ILO, including freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labor, the effective abolition of child labor, and the elimination of discrimination in respect of employment and occupation.
We assess all of our raw materials and suppliers on potential risks related to sustainability in our security-of-supply assessment, which is updated annually. This risk assessment is based on RepRisk, a tool that systematically identifies material ESG risks by analyzing information from public sources and stakeholders. Next to this, specific risk elements such as the use of SIN-listed raw materials and potential conflict minerals are considered. The risk assessment results in a high, medium, or low score for each raw material/supplier combination. For all high-risk items, mitigation actions will be taken.
In our 2021 assessment, 11% of the raw material/supplier combinations were classified as high risk. For 99% of these, mitigation plans have been created. Mitigation actions include supplier engagement, additional traceability investigation, SEDEX registration, SMETA audits, or identification of alternative raw materials or suppliers. Through these actions, we aim to reduce the number of high-risk raw material/supplier combinations, however, we also realize that it is not feasible to eliminate these risks entirely. Therefore, we update the assessment and mitigation plans annually to ensure constant attention and preparedness for potential issues.
Business ethics
Corbion’s Business Conduct Program combines the legal requirements of the countries where we operate and international standards, resulting in a framework that regulates how all Corbion employees interact with colleagues, business partners, governments, and communities. We translate these legal requirements and standards into our Code of Business Conduct, internal policies, and procedures to make this information accessible to everyone. Often we go beyond what is required by local legislation to create a single global integrity approach within Corbion.
Every year, all Corbion employees need to follow a mandatory training on our Code of Business Conduct, which is available in six languages. Employees receive training through an online course or a classroom session. Course materials are updated yearly, based on the most relevant risks at the time of the release, and touching on the topics which were brought up in Speak Up reports in the previous year. Corbion has a strict policy on attendance to the Code of Business Conduct training, with a 99% completion rate in 2021. In addition, selected groups of employees must follow every two years mandatory e-learning trainings with respect to anti-corruption and competition law. In 2021, 479 employees (from the sales and procurement departments, and senior management) participated in the anti-corruption e-learning training, which had a 100% completion rate.
Under the Corbion Speak Up Policy, Corbion employees can report misconduct and (potential) violations of the Code of Business Conduct and underlying policies to their manager, their local HR contact, the regional Business Conduct Coordinator, or, anonymously, to the Corbion Speak Up Line. We also invite our external stakeholders (customers, suppliers, communities, distributors, and agents) to raise concerns about (suspected) violations of the Corbion Code of Business Conduct, Corbion’s Supplier Code, Corbion’s Cane Sugar Code, or any applicable laws through our External Speak Up platform.
In 2021, 20 complaints with respect to the Code of Business Conduct were reported internally, of which 12 had merits. Appropriate measures have been taken by management. In 2021 Corbion has not received any reports via the external Speak Up channels.
See Risk management/Business conduct program for more details.
Advocacy and public affairs
We believe biotechnology and sustainable innovations can provide an essential contribution to the challenges the world is facing. Our purpose-driven public affairs efforts are aimed at showing regulators and policymakers that it is possible to do sustainable business while making healthy profits. Together with like-minded organizations we advocate for regulatory conditions that support sustainable frontrunners.
Preserving food and food production
Preserving food and food production (SDG 2 Zero hunger) is about creating a sustainable food system capable of feeding a growing population, given the boundaries of our planet. Corbion’s solutions for shelf-life extension, food safety, animal health, and aquaculture support this ambition. We also collaborate with our agriculture-derived raw material suppliers to promote sustainable agriculture. In 2021, 30% of our revenues contributed to preserving food and food production.
Sustainable agriculture
A sustainable agricultural supply chain is crucial to our business as we rely on agriculture for our biobased raw materials. It is also vital to the communities in which we operate and to our planet’s resources. We recognize that intensive agriculture can have negative consequences for people and the environment. The agricultural sector is the second-largest source of greenhouse gas (GHG) emissions globally, and farming of sugarcane and palm oil has been linked to forced and child labor issues. Sustainable agriculture, however, has the potential to protect the planet, enhance the economic viability of the agricultural sector, and support the livelihoods and well-being of farmers and the communities they work in. Our Sustainable Agriculture Policy describes our vision and fundamental principles, including respecting human rights, protecting biodiversity, eliminating deforestation, stewardship of the air, soil and water, and mitigating climate change.
Corbion is not directly involved with the growing, harvesting, and processing of the crops used to make our raw materials. We partner with our direct suppliers, conservation solution providers and engage with other stakeholders involved in our agricultural supply chains to promote our vision for sustainable agriculture. We also implement relevant certification schemes, including Bonsucro and RSPO.
Sugar
Our Cane Sugar Code defines the specific requirements for producing sustainable cane sugar, based on the definitions for sustainable sugarcane and derived products as set out by Bonsucro. Globally, some 6% of the sugarcane growing areas are Bonscuro-certified, and for our main sourcing area, Thailand, this is just over 2%. We, therefore, audit our cane sugar suppliers against the Corbion Cane Sugar Code if they are not yet able to deliver Bonsucro-certified sugar. See our Cane Sugar Policy for more detail on our audit program. In 2021, we verified that 73% of our total cane sugar consumption meets the requirements of our code compared to 66% in 2020. This includes around 17% Bonsucro-certified sugar.
Palm oil
Our statement on Palm oil describes our requirements for responsible sourcing of palm oil, including no deforestation, no peat, and no exploitation. Since 2020, 100% of our palm oil and primary oleochemicals is RSPO certified. In 2021, we continued the implementation of RSPO for our secondary oleochemicals and achieved 90% RSPO certification for our total use of palm oil and derivatives.
Other key agricultural raw materials
To support our science-based target, we collaborate with several partners to implement regenerative agriculture practices within Corbion’s US corn and soybean supply sheds. Regenerative agriculture has the potential to improve soil health and store more carbon in the soil, which reduces GHG emissions. In addition, farms see improved profitability because better soil health creates better yields, and less is spent on chemicals and fuel. Improved land utilization frees up less-profitable acres for conservation. Improved nutrient utilization helps preserve and protect water quality. Reduced chemical use lowers health risks for farmers and consumers. Soils rich in organic matter are better able to manage moisture when faced with extreme events like floods and drought.
Together with Truterra, and local agricultural retailer Central Valley Ag (CVA), we work with farmers in Corbion’s soy sourcing region in the US to collect crop production insights, including learnings from Corbion-sponsored innovation trials. Leveraging the Truterra sustainability tool, farmers use this information to establish a sustainability baseline for each field, identify improvement opportunities, and model the impact of various conservation practices for specific portions of their land. The Truterra digital platform creates a framework for continuous improvements that helps protect natural resources while enhancing profitability for the farmer and creating a more sustainable supply chain. The Truterra tool will also be used to track, aggregate, and report on environmental impact over time, including greenhouse gas emissions, nutrient use efficiency, and soil health. In 2021, after conducting a baseline study, regenerative agricultural practices were chosen, and the first cycle of the innovation trials project was implemented. The trials compare plots under “business as usual” management with plots where enhanced nitrogen management practices, such as variable rate technology, are applied next to the use of cover crops in combination with integrated grazing. Data is being collected and the results for the first year will be reported following harvest and analysis.
We work with Cargill and Practical Farmers of Iowa on a soil health program targeting corn growers in the sourcing region surrounding Corbion’s manufacturing facility in Blair, US. The program focuses on adopting soil health practices, including no-till, planting of cover crops, and nutrient management. It aims to reduce GHG emissions, increase soil organic matter, increase farmer resilience, improve water quality, and leverage technical assistance and farmer-farmer networks to drive change. In 2021, around 1500 acres were enrolled in the program. In the first year, environmental outcomes included reduced CO2 emissions and soil erosion as well as reduced run-off and leaching of nitrogen and phosphorous.
Preserving health
Preserving health (SDG3 Good health and well-being) is about supporting healthy lives and promoting well-being at all ages. Corbion’s solutions for health care, pharma, nutrition, and hygiene contribute to some of the underlying targets defined for SDG3. We also care for the health and well-being of our own employees and supply chain partners. In 2021, 34% of our revenues contributed to preserving health.
Environment, health, and safety
Corbion aims to create a safe and healthy workspace with zero incidents because we believe no job is so important that it cannot be done safely and with minimal environmental impact. Therefore, we operate with the greatest care for safety, health, and the environment for our employees and the communities we engage with. Our activities are supported by a management system that includes policies, procedures, training, and feedback, which ascertain that we comply with laws and regulations applicable to our operations and act in line with our company standards and codes. Corbion management and employees are committed to achieving a zero-incident culture. Corbion fosters an open and transparent culture by encouraging all employees to report, amongst others, all near misses and events in order to improve our safety and environmental performance continuously. Our Environmental, Health, and Safety (EHS) framework clarifies the specific responsibilities of the local sites versus the global EHS platform.
In 2021, we recorded 23 recordable incidents across all regions. Our Total Recordable Injury Rate (TRIR) for both Corbion and contractor employees was 0.66, a good step up compared to last year (0.841). Similar to last year no fatalities occurred in 2021.
- 1 restated due to data quality improvements
During 2021, Corbion has launched the Corbion Safety Excellence Program, and completed a safety leadership training program for Senior leadership, as well as starting a behavior-based safety project that will be implemented across all locations in the coming years. By the end of 2021, 8 manufacturing sites were ISO 45001, or OSHAS certified, representing about 77% of Corbion’s production volume and 5 sites were ISO 14001 certified, representing about 55% of Corbion’s production volume.
Our employee absentee rate was 2.7% overall compared to 2.4% in 2020.
Product quality and safety
We are committed to delivering high-quality solutions that safely meet our customer expectations and fulfill our customer promise through quality and manufacturing systems and processes.
On a local level we operate in compliance with local regulations and legislation, while ensuring certifications are in place to meet customer and industry-adopted standards and requirements, such as ISO 9001, GFSI (BRC, FSCC22000, SQF), GMP+, GMP Pharma (ICHQ7), Halal, Kosher, non-GMO, Organic, and FSMA. For our Sustainable Food Solutions, food safety is a key priority in terms of production quality, spoilage, contamination, supply chain traceability, and allergy labeling. All manufacturing sites that produce food ingredients (11 out of 12) are certified against a GFSI-recognized standard. Three of our manufacturing sites have a pharmaceutical registration. In addition, we host customer audits predominantly from our international pharmaceutical customers and large food clients. These, and our self-assessment audits performed by our global quality platform, ensure that we continue to improve our operational standards for quality and food safety. In 2021, we maintained all certifications and started harmonizing the quality management of the different Corbion sites by introducing a Global Quality Manual. This document underlines our drive for continuous quality improvement and food risk reduction.
Chemicals safety and stewardship
Chemicals safety and stewardship is a critical issue as the use of chemicals might potentially impact human health or the environment. Corbion’s biochemicals offer safer alternatives for chemicals of concern. To make our chemicals-safety performance more transparent and demonstrate the low-hazard profile of our portfolio, we use three chemicals-safety KPIs:
-
The number of chemicals produced on the REACH Authorization List of the EU. Substances on this list are selected from the REACH Candidate List. They cannot be launched on the market or used after a given date (“sunset date”), unless authorization for their specific use or exemption from authorization is granted.
-
The number of REACH Candidate List chemicals produced. The REACH Candidate List of the EU is the first step toward stringent regulation of Substances of Very High Concern (SVHCs).
-
The number of SIN list chemicals produced. The Substitute It Now (SIN list), developed by the non-profit organization ChemSec, lists very hazardous chemicals that may be placed on the REACH Candidate List.
None of Corbion’s products are included in any of the above lists. Our priority is to keep it this way, to meet our promise to preserve what matters, and to minimize risks related to regulatory measures, workers’ health, consumer exposure, and potential accidents and spills.
Next to this, Corbion does not produce or use in its production processes any of the substances listed below anywhere in the world:
-
Prior Informed Consent (PIC) substances based on Rotterdam Convention;
-
Persistent Organic Pollutants (POP) substances based on Stockholm Convention;
-
Highly Hazardous Pesticides (HHP) based on Pesticide Action Network (PAN) Europe list.
We apply strict cut-off criteria for developing new products (SVHC criteria) and adhere to the 12 principles of Green Chemistry. All Corbion products that are within the scope of REACH have been registered accordingly.
Preserving the planet
Preserving our planet (SDG12 Responsible production and consumption) is about moving toward a circular economy. Biobased ingredients and materials from Corbion play an essential role in promoting SDG12 and help to create a circular economy. SDG12 also includes food waste reduction as a sub-target, and we contribute to this goal as well through our work to create zero waste, improve energy efficiency, reduce greenhouse gas emissions, and implement our new circular production technology in our manufacturing plants.
Biobased raw materials
In 2021, 98% of our raw materials were biobased, derived from renewable, agricultural sources such as sugarcane, corn, soy, wheat, and palm oil. The use of biobased raw materials instead of fossil-based resources to produce specialty chemicals supports the transition to a circular economy as biobased raw materials are renewable by nature, insofar as their production is sustainably managed. According to the Bioplastic feedstock alliance, a sustainable biobased feedstock is legally sourced, conforms to the Universal Declaration of Human Rights (UDHR), does not adversely impact food security, and does not result in deforestation. Corbion’s sustainable agriculture policy describes our key principles for the production of biobased raw materials. At the current level of bioplastic production, land use is minimal and does not compete with food. Over the following decades, the world population will grow, and global demand for crops for food and industrial applications is expected to increase. Next-generation feedstocks such as second-generation sugars from agricultural residues and C1 carbon sources can help address this concern, and Corbion is following this closely. Our R&D teams continue to work on new production processes that support the production of biochemicals and biobased plastics made from alternative feedstocks, including non-food crops, agricultural by-products and waste streams, CO2 , and other C1 feedstocks. Corbion actively engages with external parties who have the potential to supply second-generation feedstocks to Corbion assets. Through open collaboration with technology providers and sugar suppliers, and the provision of feed and off-take options, we aim to stimulate the development of commercial-scale supply chains of alternative generation sugar feedstocks in the coming decades. However, at the moment the scale is still small and technology readiness is low.
Forests and biodiversity
Humans depend on healthy ecosystems as these stabilize the climate, provide food, clean water and air, and raw materials, and protect coastlines. Deforestation and biodiversity loss are threatening earth’s capacity to maintain healthy ecosystems. Business activities can contribute to deforestation and biodiversity loss. As we source raw materials from sectors that are at risk of contributing to these issues we are committed to do as much as possible to limit our negative impacts and contribute to regenerative projects.
To provide more transparency on the risk of deforestation in our agriculture supply chains, we track the percentage of key agricultural raw materials purchased verified deforestation-free. About 50% of our key agricultural raw materials is sourced in North America, where deforestation is not an issue. According to the Agri-footprint database, which is based on FAO statistics, no land transformation from forest has occurred in the sourcing areas of Corbion’s dextrose, soy bean oil, and wheat suppliers in the US. For sugar and palm oil, the absence of deforestation is verified through audits, satellite studies, and Bonsucro or RSPO certification. Combined, we verified that at least 82% of our key-raw materials are deforestation-free globally.
To better understand the potential impact of Corbion’s business activities on biodiversity and to demonstrate our commitment to address these, we joined the Science Based Targets Network (SBTN) corporate engagement program. Within this program, we work with other stakeholders to co-create methods and tools for integrated target setting, in line with the best available science.
Greenhouse gas emissions and renewable electricity
In 2019, Corbion committed to reducing its Scope I, II, and III GHG emissions by 33% per metric ton of product by 2030 with 2016 as the base year. The Science Based Targets initiative has approved this target. In 2021, we achieved a 27% reduction, a significant improvement compared to last year and overachieving our intermediate 2025 target ahead of plan. This reduction is primarily driven by the increased use of renewable electricity, the implementation of energy savings projects, and product mix effects. Overall, we are clearly on track to achieve our existing 2030 reduction target. We therefore committed to boost the ambition level of this target and to reach net zero GHG emissions in our value chain by no later than 2050. We will announce our updated 2030 target in the course of 2022.
One of the key initiatives to achieve our target is the transition to renewable electricity. By now, 9 of our 12 manufacturing sites are fully powered by renewable electricity. Compared to 2020, we included our site in Araucária, Brazil. In 2021, we also started the transition to renewable electricity in Thailand by sourcing some 25% of our total electricity consumption from several solar farms in the country. As a member of RE100, a global initiative to accelerate change toward zero-carbon grids at scale, we are committed to achieving 100% renewable electricity, and we have raised our ambition to already achieve this by 2025.
In 2021, we initiated the implementation of a major energy savings project at our facility in Blair, US. This project is part of the 40% capacity expansion announced in January of the year under review. Thanks to the investment in more efficient, sustainable technology, the 40% capacity expansion will come with no increase in the site’s total energy-related CO2 emissions. In fact, upon completion of the project, the cradle-to-gate carbon footprint per metric ton of lactic acid produced at the Blair plant will be reduced by 9%. Our capital expenditure plan for the next five years includes similar energy savings opportunities and the implementation of the new circular technology for lactic acid production in Rayong, Thailand. The circular technology will reduce cradle-to-gate CO2 emissions per metric ton of lactic acid by 19% compared to conventional technology.
We also established an R&D program to identify new technologies to implement in our manufacturing facilities, including electrification, low-carbon energy sources, and recycling. As part of this program, Corbion participates in various external research programs focused on developing low-carbon technologies. Examples include the Dutch hydrogen consortium’s work on reducing CO2 emissions from manufacturing processes and VoltaChem’s research on industrial electrification. The R&D program is managed by the Sustainability Council, led by the CSSO, which includes representatives from Operations, R&D, and Finance. The council is responsible for the management of the stage-gate process and priority setting.
Partnerships with our key raw material suppliers are essential to achieve the targeted Scope III reductions. In 2021, we continued our engagement with key suppliers of cane sugar, dextrose, lime, and soybean oil. The goal is to better understand the footprints of these raw materials and identify GHG reduction opportunities. These reduction opportunities could be found within our suppliers’ manufacturing operations or captured by implementing sustainable agriculture practices on the farms our suppliers source from. The projects developed in collaboration with Cargill and Truterra (see Sustainable agriculture) resulted from these engagement activities. In addition to supplier engagement, another approach is to implement third-party sourcing certifications, such as Roundtable for Sustainable Palm Oil (RSPO) certification and Bonsucro, where GHG emissions are reduced by complying with the certification’s stringent environmental standards.
We use internal carbon pricing to manage and understand the financial impact of GHG emissions on our business. Corbion uses three scenarios with carbon prices of € 80, € 100, and € 150 per metric ton, respectively, by 2030.
Water
Water is an essential resource for people and vital for industry, agriculture, and energy production. Most of the water consumption in Corbion’s value chain is in agriculture (see Sustainable agriculture). In our manufacturing processes, fermentation is the most water-intensive step. A large part of the water used is recovered in the purification process and re-used or discharged for wastewater treatment. The net water consumption includes only water evaporation in the cooling towers and water in (by-)products.
In 2021, we updated the risk assessment for our manufacturing sites using Aqueduct. Aqueduct is a data platform run by the World Resources Institute, an environmental research organization. Aqueduct comprises tools that help companies, governments, and civil society understand and respond to water risks – such as water stress, variability from season to season, pollution, and water access. Based on the Aqueduct overall water risk assessment, none of the 12 Corbion sites is located in a high or extremely high water risk area. Regarding water stress, some 16% of our water withdrawals come from high-stress areas. Within the SBTN corporate engagement program, we will further investigate our impact on water to begin prioritizing locations for action.
Waste
Corbion is committed to managing the waste generated in our operations in a responsible way. Our waste program focuses on 1) the valorization of by-products, 2) waste reduction, re-use, and recycling, and 3) innovation.
In our lactic acid production process, we generate significant quantities of valuable by-products, such as gypsum. Per metric ton of lactic acid, almost two tons of by-products are produced. The majority of these by-products are valorized, but occasionally they do end up in a landfill. Since implementing a new valorization option for gypsum at our lactic acid plant in the US in 2017, we have increased the recycling of by-products to 98-99%. For our site in Spain, there are legislative barriers that we need to overcome to achieve our target of 100% recycling. In 2021, the Spanish environmental authorities approved one new outlet, but this does not yet offer sufficient potential to fully eliminate the landfill of by-products in Spain. In 2022, at least two alternative valorization routes will be explored that have the potential to absorb the full by-product output.
Our new circular lactic acid manufacturing process eliminates both the need for lime as input material and the generation of gypsum as a by-product. Our new factory in Rayong, Thailand, that is currently under construction and will become operational in 2023 will utilize this process, expanding our production with as little impact on our footprint as currently technologically feasible.
Measuring what matters
Life Cycle Assessment
Corbion uses Life Cycle Assessments (LCAs) as a tool to understand the environmental impact of a product from the extraction of resources to their use and end of life. To enable our customers to make conscious choices, we will conduct cradle-to-gate LCAs for all products that can contribute to preserving the planet by 2025. Using this data, we can work side-by-side with customers to help them improve their environmental footprint and substantiate their sustainability claims.
In 2021, we performed LCAs for the lactic acid and derivatives produced at our facility in Campos, Brazil. With this additional study, we assessed 86% of our products that contribute to preserving the planet. Our LCA of AlgaPrime DHA was recently published in Algal Research.
Product Social Impact Assessment
Corbion is committed to performing a Product Social Impact Assessment for all products that contribute to preserving food and food production and/or preserving health by 2030. To positively impact people, we need to understand the social impact of business activities throughout our supply chain and how they affect our stakeholders. In 2017, Corbion joined the Partnership for Product Social Impact Assessment. Together with the other partners, we developed a methodology for measuring social impacts, available in the Roundtable’s handbook. The handbook provides a framework, an overview of data collection tools, and a scoring approach to assess social impacts. In 2021, we applied the methodology to our manufacturing facility in Blair, US. We assessed the impact of Corbion’s own operations and our supply chain on employees and local communities. For our preserving food and food production and/or health products, we also assessed the impact of our solutions on the end-user. In 2022, we will publish a white paper with more information on this assessment.
Sustainability assessment of innovation projects
To ensure the alignment of our innovation projects with our sustainability ambitions, we assess new product and process development projects against the relevant material themes in our sustainability strategy and on their potential contribution to the Sustainable Development Goals. The assessment is integrated into our innovation stage-gate process and guides the project team on sustainability-related matters. This warrants that sustainability is an integrated part of the product and process design and that potential issues can be tackled early. The assessment includes an evaluation of resource and energy efficiency, chemicals safety, and the project’s potential impact on Corbion’s GHG emissions. If a significant negative impact is identified, the project team has to mitigate this within the project. If this is not feasible, R&D is requested to investigate alternative options to reduce the impact elsewhere.
Sustainability assessment at different stages of the innovation funnel
Board of Management and Executive Committee
Olivier Rigaud was appointed Chief Executive Officer at the extraordinary General Meeting of Shareholders in August 2019. His current term of office runs from 2019 – 2023.
Before joining Corbion, Olivier Rigaud was Chief Executive Officer of Naturex, worked for Tate & Lyle, and started his career at Amylum.
Olivier Rigaud holds the French nationality and was born in 1964.
Eddy van Rhede van der Kloot was appointed Chief Financial Officer at the annual General Meeting of Shareholders in May 2014. His current term of office runs from 2018 – 2022. He was re-appointed at the annual General Meeting of Shareholders in May 2021 for a third term of four years, starting after the annual General Meeting of Shareholders in 2022.
Before becoming CFO, Eddy van Rhede van der Kloot was SVP Finance at Corbion and served for seven years as CFO of Purac, a division of CSM. Prior to joining Corbion, he was divisional finance director for chemicals in the European region at Van Ommeren and, after the merger with Pakhoed, at Vopak. Prior to that, he held several technical and finance roles at Unilever.
Eddy van Rhede van der Kloot holds the Dutch nationality and was born in 1963.
Marco Bootz is President Lactic Acid & Specialties and responsible for the business unit Lactic Acid & Specialties; he is a member of the Executive Committee since April 2020.
Before becoming President Lactic Acid & Specialties, Marco Bootz was Regional Vice President Sales for EMEA, SVP Biochemicals, Head of the global chemical and pharma business, and Commercial Director for Latin America at Corbion. Prior to joining Corbion, he worked for Perfetti van Melle and Unilever in business development and sales.
Marco Bootz holds the Dutch nationality and was born in 1972.
Aurélie Dalbiez is Chief Human Resources Officer and responsible for human resources; she is a member of the Executive Committee since July 2021.
Before joining Corbion, Aurélie Dalbiez was Head of HR for the Capsules and Health Ingredients business at Lonza. Prior to that, she worked for 12 years in various HR roles at Novartis. She started her career at Deutsche Bank before working for Capital International, a global investment company.
Aurélie Dalbiez holds the French nationality and was born in 1977.
Jacqueline van Lemmen is Chief Operations Officer and responsible for Corbion’s global operations; she is a member of the Executive Committee since April 2017.
Before joining Corbion, Jacqueline van Lemmen was VP Operations for DSM Biobased Products and Services after holding the same position for DSM Food Specialties. Before that she held several mostly manufacturing-related positions in different countries for DSM. She started her career at ICI.
Jacqueline van Lemmen holds the Dutch nationality and was born in 1961.
Andy Muller is President Sustainable Food Solutions and responsible for the business unit Sustainable Food Solutions; he is a member of the Executive Committee since January 2015.
Before joining Corbion, Andy Muller served as SVP Global Sales, Innovation and Marketing at DuPont. Before that, he held several other positions in marketing and sales within Sensient and DuPont Nutrition & Health, formerly Danisco.
Andy Muller holds both the Argentinian and US nationality and was born in 1965.
Ruud Peerbooms is President Algae Ingredients and responsible for the business unit Algae Ingredients; he is a member of the Executive Committee since April 2020.
Before becoming President Algae Ingredients, Ruud Peerbooms was SVP Food at Corbion. Prior to joining Corbion, he worked at Kerry Group and Unilever in business development and sales. He started his career at Akzo Nobel.
Ruud Peerbooms holds the Dutch nationality and was born in 1969.
Marcel Wubbolts is Chief Science and Sustainability Officer and responsible for Corbion’s global science and innovation portfolio; he is a member of the Executive Committee since November 2016.
Before joining Corbion, Marcel Wubbolts served as Chief Technology Officer at DSM. Before that, he held several other positions at DSM. He started his career at the Institute of Biotechnology at the ETH in Zürich.
Marcel Wubbolts holds the Dutch nationality and was born in 1963.
Supervisory Board
Mathieu Vrijsen was appointed at the annual General Meeting of Shareholders in May 2013. His current term of office runs from 2021 – 2023.
Mathieu Vrijsen served as Senior Vice President Global Operations and Engineering at DuPont. Prior to that, he held various positions at DuPont. Currently, he serves as Chair of Broadview Holding, and the Philharmonic Chamber Orchestra of Belgium, and as Board Member of the Antwerp Spring Festival.
Mathieu Vrijsen holds the Dutch nationality and was born in 1947.
Rudy Markham was appointed at the annual General Meeting of Shareholders in May 2010. His current term of office runs from 2020 – 2022.
Rudy Markham served as Executive Director and Chief Finance Officer at Unilever. Currently, he serves as Non-Executive Director of United Parcel Services, US, and Director of Leverhulme Trust, UK.
Rudy Markham holds the British nationality and was born in 1946.
Liz Doherty was appointed at the annual General Meeting of Shareholders in May 2015. Her current term of office runs from 2019 – 2023.
Liz Doherty served as CFO and Executive Director at Reckit Benckiser, UK and prior to that as CFO and Executive Director at Brambles, Australia. Currently, she serves as Audit Committee Chair and Non-Executive Director of Novartis, Switzerland, and as Supervisory Board member of Royal Philips. She is also an advisor to Agrolimen, subsidiaries GB Foods and Affinity Petcare, Spain.
Liz Doherty holds the British and Irish nationalities and was born in 1957.
Ilona Haaijer was appointed at the annual General Meeting of Shareholders in June 2020. Her current term of office runs from 2020 – 2024.
Ilona Haaijer served as President and CEO of DSM Food Specialties, President of DSM Personal Care, CEO of Philips AVENT, Vice President Corporate Strategy of Royal Philips Electronics, and as Consultant of The Boston Consulting Group. Currently, she serves as Chair of the Supervisory Board of MusicalMakers and as Chair of the Committee for Digital Transformation of the Cultural and Creative Sector, a committee of the Dutch Council for Culture of the Ministry of Education, Science and Culture.
Ilona Haaijer holds the Dutch nationality and was born in 1969.
Steen Riisgaard was appointed at the annual General Meeting of Shareholders in May 2014. His current term of office runs from 2018 – 2022.
Steen Riisgaard served as President & CEO of Novozymes. Currently, he serves as Chair of Alk-Abello, Denmark, member of Århus University, Denmark, member of the Board of Novo Nordisk Foundation, Denmark, Vice-Chair of Novo Holding, Denmark, Vice-Chair of Villum Foundation, Denmark, and Chair of Xellia, Denmark.
Steen Riisgaard holds the Danish nationality and was born in 1951.
Dessi Temperley was appointed at the annual General Meeting of Shareholders in May 2021. Her current term of office runs from 2021 – 2025.
Dessi Temperley served as Group CFO of Beiersdorf, and before that, she was CFO of Nestle South East Europe, CFO of Nestle Purina EMENA, and Head of Investor Relations of Nestle. Prior to this, she held finance roles with Cable & Wireless. Currently, she serves as Supervisory Director Coca Cola Europacific Partners, Philip Morris International, and Cimpress.
Dessi Temperley holds the Bulgarian and British nationalities and was born in 1973.
Corporate governance
Our corporate governance structure is designed to best support our business, meet the needs of our stakeholders, and comply with laws and regulations. This section provides an overview of our corporate governance structure and includes information required under the Dutch Corporate Governance Code, as amended and published on 8 December 2016 (the “Code”), the Decree Additional Requirements for Management Reports, the Decree Article 10 EU Takeover Directive, and the Decree Disclosure Non-Financial Information.
Structure
Corbion nv (the “company” or “Corbion”) is a Dutch public limited company with its registered office in Amsterdam. It acts as the (indirect) holding company for the Dutch and foreign operating companies of the company. The company’s shares are listed on Euronext Amsterdam. Corbion is an international holding company as described in Section 153, Subsection 3 under b, of Book 2 of the Dutch Civil Code. Therefore, the “large company” regime does not apply to the company.
Corbion’s corporate governance framework is based on the requirements of the Dutch Civil Code, the Code, the company’s Articles of Association, applicable securities laws, and the rules and regulations of Euronext Amsterdam.
The company is organized in a so-called two-tier system, comprising a Board of Management, solely composed of executive directors, and a Supervisory Board, solely composed of non-executive directors. The Supervisory Board supervises the Board of Management and Executive Committee (which includes the Board of Management) and ensures that external experience and knowledge is embedded in the company’s conduct. The two boards are independent of each other and are accountable to the general meeting of shareholders of the company (the “General Meeting of Shareholders”).
Board of Management/Executive Committee
General
The Board of Management (composed of the Chief Executive Officer and the Chief Financial Officer) is entrusted with the management of the company. A number of key officers have been appointed to manage the company together with the Board of Management. The members of the Board of Management and these key officers together constitute the Executive Committee. For the purpose of this corporate governance section, where the Executive Committee is mentioned it also includes the Board of Management unless the context requires otherwise.
The Executive Committee has been operational since 1 January 2015. With the set-up of this leadership team, Corbion is well positioned to drive a common agenda across the business, to set clear priorities, and to enhance the execution of its strategy. Members of the Supervisory Board regularly met with the members of the Executive Committee during 2021. The Supervisory Board and the Board of Management held several meetings in 2021 to review the progress of the strategy. Next to the members of the Board of Management, other members of the Executive Committee were invited to give presentations on their area of responsibility to the Supervisory Board and its committees.
Under the chair of the CEO, the members of the Executive Committee share responsibility for developing and executing the strategic plan for the company aimed at delivering long-term value creation, aligning and prioritizing (strategic) initiatives, determining the risk profile, and implementing strategic and operational policies. The Board of Management has ultimate responsibility for the company’s management and the external reporting and is answerable to shareholders of the company at the annual General Meeting of Shareholders. In performing its duties, the Executive Committee is guided by the interests of the company and its affiliated enterprise, taking into consideration the interests of the company’s stakeholders.
For a more detailed description of the responsibilities of the Board of Management and the Executive Committee, please refer to the Rules of the Board of Management/Executive Committee, which are available on Corbion’s website.
Composition and appointment
The Board of Management consists of two or more members, which number is to be determined by the Supervisory Board. The CEO determines the number of members of the Executive Committee. The composition of the Executive Committee and brief resumes of its members are available under the sections How we safeguard long-term value/Board of Management and Executive Committee in this report.
The members of the Board of Management are appointed by the General Meeting of Shareholders on the basis of nominations by the Supervisory Board. The Corbion Articles of Association state that the General Meeting of Shareholders can overrule any such nomination by an absolute majority of the votes cast, provided the said majority represents at least one-third of the issued capital. No second meeting will be convened if there is no quorum, as a second meeting is not required by Dutch law.
The Supervisory Board is authorized at all times to suspend a member of the Board of Management. The General Meeting of Shareholders may decide to suspend or dismiss a member of the Board of Management by an absolute majority of the votes cast, provided the said majority represents at least one-third of the issued capital. This quorum requirement does not apply if the proposal for suspension or dismissal is submitted by the Supervisory Board. No second meeting will be convened if there is no quorum, as a second meeting is not required by Dutch law.
Each member of the Board of Management is appointed for a maximum period of four years with the possibility of re-appointment for consecutive four-year terms in accordance with the Code. The other members of the Executive Committee are appointed, suspended, and dismissed by the CEO, subject to consultation with the Supervisory Board.
Remuneration
The remuneration for the individual members of the Board of Management is determined by the Supervisory Board on the proposal of the Remuneration Committee of the Supervisory Board, and must be consistent with the policy thereon as adopted by the General Meeting of Shareholders. The current remuneration policy applicable to the Board of Management was adopted by the annual General Meeting of Shareholders in 2020, and is published on Corbion’s website. A full and detailed description of the composition of the remuneration for the individual members of the Board of Management is included in the Remuneration report in this report. The remuneration for the other individual members of the Executive Committee shall be determined by the CEO, subject to consultation with the Supervisory Board.
Conflict of interest
Members of the Executive Committee must report any (potential) conflict of interest to the Chair of the Supervisory Board. The Supervisory Board shall decide whether a conflict of interest exists. The member of the Executive Committee who has a (potential) conflict of interest shall not participate in discussions and decision-making on a subject or transaction in relation to which the member has a conflict of interest with the company. Decisions to enter into transactions in which members of the Executive Committee have conflicts of interest that are of material significance to the company and/or to the relevant member(s) of the Executive Committee, require the approval of the Supervisory Board. In accordance with best-practice provision 2.7.4 of the Code, the company reports that in 2021 there were no transactions involving a conflict of interest with members of the Executive Committee that was of material significance and that required approval of the Supervisory Board.
Supervisory Board
General
The Supervisory Board, acting in the interests of the company and its affiliated enterprise and taking into account the relevant interests of the company’s stakeholders, supervises and advises the Board of Management and Executive Committee in performing their management tasks. From among its members, the Supervisory Board has appointed an Audit Committee, an Appointment and Governance Committee, a Remuneration Committee, and a Science and Technology Committee.
Corbion’s Articles of Association require the approval of the Supervisory Board for certain major resolutions proposed to be taken by the Board of Management, including issuance of shares, repurchase of shares, reduction of the issued share capital, amendment of the Articles of Association, and significant changes in the identity or nature of the company or its enterprise.
For a more detailed description of the responsibilities of the Supervisory Board and its committees, please refer to the Rules of the Supervisory Board and the Charters of its committees, which are available on Corbion’s website.
Composition and appointment
The Supervisory Board consists of three or more members to be determined by the Supervisory Board. The composition of the Supervisory Board and brief resumes of its members are available under the section How we safeguard long-term value/Supervisory Board in this report.
The members of the Supervisory Board are appointed by the General Meeting of Shareholders on the basis of nominations by the Supervisory Board. The Corbion Articles of Association state that the General Meeting of Shareholders can overrule any such nomination by an absolute majority of the votes cast, provided the said majority represents at least one-third of the issued capital. No second meeting will be convened if there is no quorum, as a second meeting is not required by law.
The Supervisory Board is authorized at all times to suspend a member of the Supervisory Board. The General Meeting of Shareholders may decide to suspend or dismiss a member of the Supervisory Board by an absolute majority of the votes cast, provided the said majority represents at least one-third of the issued capital. This quorum requirement does not apply if the proposal for suspension or dismissal is submitted by the Supervisory Board. No second meeting will be convened if there is no quorum, as a second meeting is not required by law.
Each member of the Supervisory Board is appointed for a maximum period of four years with the possibility of re-appointment for consecutive terms in accordance with the Code. The members of the Supervisory Board retire periodically in accordance with a schedule of resignation, which is available on Corbion’s website.
Conflict of interest
Members of the Supervisory Board must report any (potential) conflict of interest to the Chair of the Supervisory Board (and the Chair to the Vice-Chair). The Supervisory Board shall decide whether a conflict of interest exists. The member of the Supervisory Board who has a (potential) conflict of interest shall not participate in discussions and decision-making on a subject or transaction in relation to which the member has a conflict of interest with the company. Decisions to enter into transactions in which members of the Supervisory Board have conflicts of interest that are of material significance to the company and/or to the relevant member(s) of the Supervisory Board, require the approval of the Supervisory Board. In accordance with best-practice provision 2.7.4 of the Code, the company reports that in 2021 there were no transactions in which there was a conflict of interest with members of the Supervisory Board that was of material significance and that required approval of the Supervisory Board.
In accordance with best-practice provision 2.7.5 of the Code, the company reports that no transactions between the company and legal or natural persons who hold at least 10% of the shares in the company occurred in 2021.
Diversity, values, and Code of Business Conduct
Diversity
Corbion adopted a diversity policy for the Supervisory Board and the Executive Committee in 2017. Given the business environment in which Corbion operates, this policy contains longer-term objectives for gender diversity and geographical diversity, the latter to reflect the majority of our business being in the Americas.
The gender diversity targets for the Supervisory Board are that at least one member should be female if the board consists of five members and that at least two members should be female if the board consists of six members. The second target applies as the current board has six members. Corbion complies with this target as Liz Doherty, Ilona Haaijer, and Dessi Temperley are members of the Supervisory Board.
The geographical diversity target for the Supervisory Board is that at least one member of the Supervisory Board has (had) relevant Americas experience and/or exposure. Corbion complies with this target as Mathieu Vrijsen qualifies as such.
The gender diversity target for the Executive Committee is that at least two members should be female if the committee consists of six or seven members. Corbion’s Executive Committee has two female members, Jacqueline van Lemmen and Aurélie Dalbiez, and so complied with this target in 2021. In 2021, one position became vacant in the Executive Committee and that position has been filled by a female.
The geographical diversity target for the Executive Committee is that at least two members of the Executive Committee have (had) relevant Americas experience and/or exposure. Corbion complies with this target as Andy Muller and Marco Bootz qualify as such.
In the case of vacant or new positions on the Supervisory Board or the Executive Committee, the company’s diversity policy will be applied when selecting persons for appointment as member of the Supervisory Board or the Executive Committee.
Values and Code of Business Conduct
The Corbion values Care, Courage, Collaboration, and Commitment were introduced in 2018 and implemented globally in 2019 and 2020, through communication campaigns, Executive Committee sponsored events and workshops held across the world. In 2021, our values were further reinforced through various initiatives such as Values Showcases, the launch of free full access to the mindfulness app Headspace for all our employees, and the creation of a Preserve What Matters platform to connect our people to initiatives around sustainability and community involvement. Along with the Corbion behaviors, the values guide and underpin the business strategy of Corbion. They form an integral part of our engagement and performance management programs and our global training and development initiatives.
Information about the effectiveness of, and compliance with, the Corbion Code of Business Conduct is available under the section Risk management/Business conduct program in this report.
Shares and shareholder rights
General Meetings of Shareholders
The annual General Meeting of Shareholders will be held within six months of the close of the financial year. Extraordinary General Meetings of Shareholders will be held as often as the Board of Management and Supervisory Board deem necessary. An extraordinary General Meeting of Shareholders will also be held if one or more shareholders who collectively represent at least ten percent of the issued capital submit a written request to this effect to the Board of Management or the Supervisory Board enclosing a detailed list of agenda items. If neither the Board of Management nor the Supervisory Board – which have equal powers in this matter – respond in such a way that this extraordinary General Meeting of Shareholders can be convened within six weeks of the request, the applicants are at liberty to convene the meeting themselves and appoint a chairman.
Meetings are convened by public notice or via Corbion’s website and registered shareholders are notified by letter, at least forty-two days prior to the (extraordinary) General Meeting of Shareholders. If requests are received from shareholders who individually or collectively represent at least one percent of the issued capital to place items on the General Meeting of Shareholders agenda, these will be honored provided they are submitted to Corbion at least forty-five days prior to the date of the meeting.
Pursuant to Dutch law, the record date for the exercise of voting rights and rights relating to General Meetings of Shareholders is set as the 28th day prior to the day of the meeting. Shareholders registered on such date are entitled to attend the meeting and to exercise the other shareholder rights (in the meeting in question) notwithstanding subsequent sale of their shares thereafter. This date will be published in advance of every General Meeting of Shareholders.
Main powers of the General Meeting of Shareholders
The main powers of the General Meeting of Shareholders relate to:
-
the appointment, suspension, and dismissal of members of the Board of Management and Supervisory Board;
-
approval of the remuneration policy for the Board of Management;
-
approval of the remuneration policy for the Supervisory Board;
-
the adoption of the annual Financial Statements and approval of dividends;
-
discharge from liability of the members of the Board of Management and Supervisory Board;
-
issuance of shares or rights to shares, restriction or exclusion of pre-emptive rights of shareholders, and repurchase or cancellation of shares;
-
the appointment of the external auditor;
-
amendments to the Articles of Association;
-
approval of decisions of the Board of Management that would entail a significant change in the identity or character of Corbion or its business.
Voting rights
Shareholders have voting rights in proportion to the number of shares held and there are no restrictions on the voting rights on the company’s shares. Each share is entitled to one vote.
Subject to certain exceptions provided by Dutch law or the Corbion Articles of Association (as outlined below), decisions at the General Meeting of Shareholders will be taken by an absolute majority of the votes cast without a requirement for a quorum.
According to Dutch law and the company’s Articles of Association, the following decisions of the General Meeting of Shareholders require a larger majority or a quorum:
-
Unless proposed by all members of the Supervisory Board or Board of Management, any resolution to amend the Articles of Association or to wind up the company, shall require a majority of at least three-quarters of the votes cast provided at least two-thirds of the issued capital is represented.
-
Any resolution to restrict or exclude the pre-emptive right in respect of ordinary shares or to designate the Board of Management, shall require a majority of at least two-thirds of the votes cast if less than half of the issued capital is represented at the meeting.
-
Any resolution to make a binding nomination for the appointment of a member of the Supervisory Board or Board of Management non-binding, shall require an absolute majority of the votes cast, provided that majority represents more than one-third of the issued capital. If a nomination has been made non-binding, the General Meeting of Shareholders may only appoint a person other than the nominees by a resolution adopted by an absolute majority of the votes cast, provided that majority represents more than one-third of the issued capital.
-
Any resolution to suspend or dismiss a member of the Supervisory Board or Board of Management, shall require an absolute majority of the votes cast, provided that majority represents more than one-third of the issued capital.
-
Any resolution to approve (amendments to) the remuneration policy of the Board of Management, shall require a majority of at least three-quarters of the votes cast.
-
Any resolution to approve (amendments to) the remuneration policy of the Supervisory Board, shall require a majority of at least three-quarters of the votes cast.
Amendment of the Articles of Association
Decisions to amend the Articles of Association of the company may only be taken at a General Meeting of Shareholders in which at least two-thirds of the issued capital is represented and by a majority of at least three-quarters of the votes cast, unless the proposal has been submitted by all members of the Board of Management in office with the collective approval of all members of the Supervisory Board in office, in which case the decision may be taken by an absolute majority of votes, regardless of the represented capital.
Issuance and repurchase of shares
At the 2021 annual General Meeting of Shareholders it was resolved to authorize the Board of Management, subject to the approval of the Supervisory Board, to issue shares or grant rights to acquire shares in the company as well as to restrict or exclude the pre-emptive right accruing to shareholders up to and including 19 November 2022. This authorization is limited to a maximum of 10% of the number of shares issued as at 19 May 2021. Furthermore, an authorization to issue shares or grant rights to acquire shares in the company was granted for another 10% of the number of shares issued as at 19 May 2021 in the event of mergers, acquisitions, and/or strategic alliances.
Furthermore, at the 2021 annual General Meeting of Shareholders it was resolved to authorize the Board of Management, subject to the approval of the Supervisory Board, to acquire shares in the company within the limits of the Articles of Association and within a certain price range up to and including 19 November 2022. This authorization is limited to a maximum of 10% of the number of shares issued as at 19 May 2021.
External auditor
An independent audit firm is appointed by the General Meeting of Shareholders. The external auditor is responsible for auditing the Financial Statements of Corbion. On 29 June 2020, the General Meeting of Shareholders appointed KPMG Accountants N.V. as external auditor for the company for the financial year 2021.
Capital structure
As at 31 December 2021, 59,242,792 ordinary shares of € 0.25 each had been issued, including 290,753 ordinary shares held by Corbion. The ordinary shares are listed on Euronext Amsterdam. No restrictions apply to the transfer of shares.
Substantial shareholdings
Pursuant to the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht), the following notifications of capital interest in Corbion as at 31 December 2021 were reported:
Capital interest | Voting interest | ||
1 | NN Group N.V. | 13.03% | |
2 | Artemis Investment Management LLP | 4.99% | |
3 | ASR Nederland N.V. | 4.99% | |
4 | Blackrock Inc. | 3.38% | 3.44% |
5 | Paradice Investment Management PTY | 3.07% | 2.44% |
6 | Impax Asset Management Group PLC | 3.00% | |
7 | J.O. Hambro Capital Management Limited | 2.99% | |
8 | FMR LLC | 2.97% | 2.93% |
9 | RWC European Focus Master Inc. | 2.97% | |
10 | Norges Bank | 2.96% | |
11 | Kabouter International Opportunities Fund II LLC | 2.92% | |
12 | Lansdowne Partners Limited | 2.89% | |
13 | T. Rowe Price Group Inc. | 2.85% | |
14 | BNP Paribas Investment Partners SA/ | 2.82% | 2.74% |
15 | Kabouter Management LLC | 0% | 2.83% |
Please note: As at 31 December 2021 Corbion had a capital interest of 0.49%.
Compliance with the Code
Corbion is committed to embedding the Code principles within the company, thereby abiding by the core concepts of good business practices, integrity, openness, and transparent and well-supervised management. Important changes in the corporate governance structure are presented to the General Meeting of Shareholders for discussion. With the exception of the deviations outlined in the paragraphs below, Corbion endorses and adheres to the principles and best practices of the Code.
With respect to best-practice provision 3.1.2 vi of the Code, Corbion applies share ownership requirements instead of holding restrictions. The Supervisory Board believes that a mandatory share ownership leads to a more sustainable build-up and alignment of the interests of the members of the Board of Management and the shareholders. As long as a member of the Board of Management does not comply with the share ownership requirements, vested shares received under share plans will be kept in a restricted account and cannot be traded. Corbion departs furthermore with regard to the possible financing of income tax on vested shares under the share plan by allowing selling part of the vested shares in deviation from the share ownership requirements.
With respect to cancelling the binding nature of a nomination or dismissal (best-practice provision 4.3.3), Corbion deviates as follows. The members of the Supervisory Board and the Board of Management are appointed by the General Meeting of Shareholders on the basis of nominations by the Supervisory Board. The Corbion Articles of Association state that the General Meeting of Shareholders can overrule any such nomination by an absolute majority of the votes cast, provided the said majority represents at least one-third of the issued capital. In contrast with the Code, no second meeting will be convened if there is no quorum, as a second meeting is not required by Dutch law.
The General Meeting of Shareholders may decide to suspend or dismiss a member of the Board of Management or Supervisory Board by an absolute majority of the votes cast, provided the said majority represents at least one-third of the issued capital. This quorum requirement does not apply if the proposal for suspension or dismissal is submitted by the Supervisory Board. In contrast with the Code, no second meeting will be convened if there is no quorum, as a second meeting is not required by Dutch law.
The full text of the Code applicable to the company in 2021 can be viewed at: www.commissiecorporategovernance.nl.
Decree Additional Requirements for Management Reports/Corporate Governance Statement
Section 2a of the Decree Additional Requirements for Management Reports (Vaststellingsbesluit nadere voorschriften inhoud bestuursverslag) requires companies to publish a statement on their approach to corporate governance and compliance with the Code. The information required to be included in this corporate governance statement as described in Sections 3, 3a, and 3b of this decree is included in this corporate governance section.
The information on the company’s risk management and control frameworks relating to the financial reporting process, as required by Section 3a sub a of this decree, can be found in the risk management section.
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 and the notes referred to in this section, as well as the paragraph below.
The contractual conditions of most of the company’s key financing agreements and notes issued (potentially) entitle the banks and noteholders respectively to claim early repayment of the amounts borrowed by the company in the event of a change of control over the company (as defined in the respective agreement). With respect to agreements entered into with members of the Board of Management that provide for payment upon termination of their employment following a public bid, please refer to the description of the remuneration policy on Corbion’s website.
Decree Disclosure Non-Financial Information
Section 2 Subsection 1 of the Decree Disclosure Non-Financial Information (Besluit bekendmaking niet-financiële informatie) requires companies to publish a statement concerning non-financial information. The information required to be included in the management report as described in Section 3 of this decree, which is incorporated and repeated here by reference, can be found in the following sections of the Annual Report:
A description of the business model of the company can be found in the section Who we are and what we do/Our strategy Advance 2025.
A description of the company’s non-financial key performance indicators relevant to the company’s activities can be found in the sections Who we are and what we do/Our strategy Advance 2025, Our performance/Sustainability performance, and Sustainability Statements.
A description of the company’s policy including the applied security measures regarding environmental matters as well as the main risks related thereto and how the company manages these risks, can be found in the sections Our performance/Sustainability performance, How we safeguard long-term value/Risk management/Corbion top risks, and Sustainability Statements
A description of the company’s policy including the applied security measures regarding social and employee matters as well as the main risks related thereto and how the company manages these risks, can be found in the sections Our performance/Sustainability performance and Sustainability statements/Human capital.
A description of the company’s policy including the applied security measures regarding respect for human rights as well as the main risks related thereto and how the company manages these risks, can be found in the sections Our performance/Sustainability performance and Sustainability statements/Human rights.
A description of the company’s policy including the applied security measures regarding anti-corruption and anti-bribery matters as well as the main risks related thereto and how the company manages these risks, can be found in the section How we safeguard long-term value/Risk management/Anti-bribery and anti-corruption.
Risk management
Framework
Our approach to risk management
Given the complexity of worldwide operations in various markets and jurisdictions, Corbion needs to ensure timely identification and effective management of all significant risks inherent to the execution of its strategy to support the realization of its objectives. Corbion has an enterprise-wide risk management (ERM) program in place to preserve its reputation, assets, competitive edge, and profits. ERM is the process of systematically identifying, analyzing, evaluating, and addressing risks that may impact the achievement of Corbion’s objectives.
Our approach to risk management aims to achieve a reasonable level of assurance to realize our objectives, in line with the Enterprise Risk Management framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our approach aims to embed risk awareness and risk management at all levels of Corbion to ensure that decisions are taken with due consideration of the inherent risks in relation to the risk appetite. Risk management is an integral part of running the business and therefore owned by line management (first line of defense). Our risk management approach covers strategic, operations, compliance, and reporting risks, as illustrated below.
The implementation of the main COSO framework elements is explained below.
Control environment
The control environment is the set of standards, processes, culture, and structures that provide the basis for carrying out internal control across the organization. The Executive Committee sets the tone at the top as to the importance of internal control including expected standards of conduct. An important principle of the control environment is the commitment of the Executive Committee to integrity and ethical values, which is demonstrated by the programs mentioned below.
Business conduct / compliance
Business Conduct Program
Corbion’s Business Conduct Program combines the legal requirements of the countries where we operate and international standards, resulting in a framework that regulates how all Corbion employees interact with colleagues, business partners, governments, and communities. We translate these legal requirements and standards into our Code of Business Conduct, internal policies, and procedures to make them accessible to everyone. Often, we go beyond what is required by local legislation to create a single global integrity approach within Corbion.
The Executive Committee has overall responsibility for the Business Conduct Program and oversees its execution. To this end, they establish effective global business conduct governance and ensure allocation of appropriate resources for the upkeep and further development of the Business Conduct Program.
Corbion’s Legal & Compliance Department supports the execution of the Business Conduct Program as a second line of defense and, as such, has a coordinating role. The Legal & Compliance Department works closely with other departments (e.g. Risk Management, Internal Audit, HR, Finance, Customer Service, Procurement, Communications) and external stakeholders (e.g. law firms, consultants, compliance software providers) to enable the proper roll-out of the Business Conduct Program throughout the organization.
As a third line of defense, Internal Audit offers independent reviews. The business is in the front line and is responsible for the day-to-day execution of the risk management strategy and Business Conduct Program.
Each year, Corbion’s Compliance Officer reports to the Audit Committee of the Supervisory Board on the status of the Business Conduct Program. In the event of significant incidents, the Audit Committee is immediately informed by the Executive Committee.
Code of Business Conduct and policies
At the heart of our Business Conduct Program is the Corbion Code of Business Conduct. Our Code states the values and principles that guide our work at Corbion and sets out the expected standard of behavior for everyone working for Corbion. Our Code applies to all activities we perform on behalf of Corbion wherever they take place, and to everyone working for our company.
Guided by the principles of the UN Global Compact and the OECD Guidelines for Multinational Enterprises, our Code of Business Conduct describes principles with respect to personal and business conduct, asset protection, employment standards, and our commitment to sustainability.
Our Code is available in six languages and was comprehensively revised in 2019 to include how Corbion’s new values relate to our purpose, and to extend our commitment to sustainability.
Our Code serves as an umbrella for underlying policies which cover in more detail areas such as competition law, anti-bribery, anti-corruption, conflicts of interest, privacy, economic sanctions, and insider trading.
Corbion has a network of regional Business Conduct Coordinators who help embed the Code of Business Conduct and the underlying policies into local operations. Besides this, they are a local point of contact for management and employees.
Speak Up channels
Under the Corbion Speak Up Policy, Corbion employees can report misconduct and (potential) violations of the Code of Business Conduct and underlying policies to their manager, their local HR contact, or the regional Business Conduct Coordinator.
Next to that, the Corbion Speak Up channels are available 24/7 to enable employees to report issues directly to the Business Conduct Committee, which is composed of the Chief Human Resources Officer, the VP Legal & Compliance, and the Director Internal Audit. Corbion Speak Up channels include a toll-free phone number and a global webservice which are operated by an independent service provider to ensure the confidentiality of the report.
Any misconduct and (potential) violations can be reported anonymously. In 2019, Corbion launched its External Speak Up platform, a dedicated channel available to Corbion’s external stakeholders, including customers, suppliers, communities, distributors, and agents. The Corbion External Speak Up platform can be used to raise concerns about (suspected) violations of the Corbion Code of Business Conduct, Corbion’s Supplier Code, Corbion’s Cane Sugar Code, or any applicable laws.
Breaches of the Code of Business Conduct may lead to disciplinary actions, including termination of employment. The outcome of the investigations as well as any disciplinary measures taken are documented accordingly and reported to the Executive Committee and Audit Committee twice a year.
Business Conduct training
Every year, all Corbion employees follow a mandatory training on our Code of Business Conduct. Employees receive training in their local language through an e-learning course or a classroom session. Course materials are updated yearly, based on the most relevant risks at the time of the release and on the topics which were brought up in Speak Up reports in the previous year. Corbion has a strict policy on attendance to the Code of Business Conduct training.
In addition, selected groups of employees need to follow every two years mandatory e-learning trainings with respect to anti-corruption and competition law.
Compliance statement
Every year, at the time of the annual Code of Business Conduct training, employees confirm their compliance with the Code and underlying policies by signing a compliance statement.
In January of each year, the members of the Supervisory Board and Executive Committee as well as the direct reports of the Executive Committee, confirm their compliance with the Conflicts of Interest Policy by signing a compliance statement. They also fill out a questionnaire disclosing their close relationships and memberships in other companies, as well as related-party transactions.
In terms of our onboarding program, our standard employment contracts contain a clause with respect to adherence to the Code of Business Conduct. New hires are introduced to our Code as soon as they join Corbion and are required to complete the Code of Business Conduct training in the first 6 weeks of employment.
Anti-bribery and anti-corruption
As a listed company operating worldwide, compliance with anti-bribery and anti-corruption laws is key. Given its importance, compliance with our policy is overseen by the Executive Committee. Our policy with respect to anti-bribery and anti-corruption is laid down in our Gifts, Entertainment, and Third-Party Payments Policy. This policy is available in 6 languages and covers the (i) prohibition of offering, authorizing, or accepting bribes, (ii) rules on how to deal with giving and receiving gifts and entertainment, and (iii) rules on how to deal with third-party payments (agents and distributors, facilitation payments, sponsorships, political contributions).
All Corbion colleagues as well as our agents, distributors, and other representatives are prohibited from offering, authorizing, or accepting bribes of any kind. Any gifts and entertainment must be for legitimate business purposes, of a reasonable value, appropriate to the business relationship, and be given or accepted at an appropriate time. If the nominal value of a gift exceeds a certain threshold, prior approval of the employee’s manager is required. Prior management approval is always required for entertainment (with the exception of business meals) and travel and overnight accommodation.
Corbion has an anti-bribery and anti-corruption procedure in place to screen prospective agents and distributors, who are required to complete due-diligence questionnaires to be assessed by the Legal & Compliance Department and, in some cases, by an external party. Furthermore, higher-management approval is required prior to engagement. The agent or distributor is required to sign an agency or distribution agreement and accept the Corbion anti-corruption and anti-bribery clauses contained therein.
Economic sanctions
Corbion is committed to complying with economic sanctions laws and regulations. According to the Corbion Economic Sanctions Policy, prior to onboarding, each prospective business partner is subject to screening against applicable restricted parties and sanctioned countries lists to ensure compliance with economic sanctions laws and regulations.
Alongside this pre-screening of business partners, Corbion has appropriate tools to ensure ongoing screening of all active business partners and to prevent shipment of our products to embargoed countries and regions.
Privacy and data protection
In light of the European regulation on data protection (GDPR), Corbion has created a robust privacy program in 2018. Following its initial implementation, Corbion has further developed and localized its privacy program to reflect newly enacted privacy regulations in the countries where we operate, such as the CCPA/CPRA in California, the LGPD in Brazil, the PDPA in Thailand, and the PIPL in China.
Enforcement actions
Corbion has not been the subject of any investigation into business conduct violations (e.g. competition, privacy, bribery) by competent governmental authorities to date.
Risk appetite
Part of the control environment is defining the risk appetite of the company by the Executive Committee. Our risk appetite is the level of risk we are willing to accept to achieve our strategic goals. This requires adequate understanding and awareness of potential risks and their magnitude within the company. The level of risk appetite is set by the Executive Committee. Our risk appetite can be summarized as follows.
A 1% change in net sales, costs, profit, and currency rates can have the following impact on EBITDA (in millions of euros).
Risk appetite
Change | Approx. EBITDA impact (millions of euros) | |
Net sales | +1% / -1% | +/- 4.8 |
Gross profit | +1% / -1% | +/- 3.1 |
Operating costs (= selling expenses + R&D costs + G&A expenses) | +1% / -1% | +/- 1.7 |
USD | +1% / -1% | +/- 1.3 |
JPY | +1% / -1% | +/- 0.2 |
THB | -1 | +/- 0.3 |
BRL | -1 | +/- 0.1 |
Risk assessment
As an integral part of the strategy review, the Executive Committee annually performs an entity-wide risk assessment to assess the strategic risks, with a mid-year update for significant changes. Furthermore, risk assessment is an integral part of the project stage-gate methodology applied at Corbion for strategic initiatives and related investments.
Based on the strategic risks, the Executive Committee selects a number of key management activities with an increased focus on further strengthening our control framework. This is discussed with the Audit Committee and the Supervisory Board.
Operations, reporting, and compliance risks are considered throughout the organization, with ownership lying with the line organization (first line of defense). Risk committees have been established to monitor specific risks to stay within Corbion’s risk appetite (Treasury Risk Committee, Commodity Pricing Risk Committee).
The financial reporting risks are assessed on a regular basis and the outcome of these assessments forms the input for the Corbion internal control framework over financial reporting (see section Internal control systems). For more information on financial risk management and financial instruments see Note 27 of the Financial Statements.
Key risk areas
The table below summarizes the top risks that have the focused attention of the Executive Committee to support the realization of the strategic targets. For each risk, the table lists the potential impact as well as a summary of mitigation measures taken to minimize the risk. There may be other risks currently unknown to Corbion, or currently believed not to be material, which could ultimately have a major impact on Corbion’s business, objectives, revenues, income, assets, liquidity, or capital resources.
Corbion top risks
Risk event | Cause and potential impact | Mitigation actions |
Strategic risks | ||
Capacity | Due to favorable developments of PLA and the lactic acid market, our lactic acid production facilities run at maximum capacity. Significant interruptions would immediately result in lost sales impacting the realization of the strategic goals. | The construction of a new lactic acid plant in Thailand has been announced. The plant will be operational in 2023. Meanwhile, an extensive debottlenecking program is in place at existing lactic acid plants. In addition, we regularly expand our capacity incrementally in our derivatives plants. |
Climate change | Climate change could affect Corbion in all areas of business through transition and physical risks. Transition risks include, amongst others carbon pricing, changing consumer behavior, and changing regulations, while physical risks manifest through increased intensity and frequency of extreme weather events and chronic climatic changes. Climate risk has an increasing impact on likelihood of several other risks, e.g. business continuity, raw material availability and price volatility, regulations, customer behavior. | Transitional risks are addressed through our strategy development process, with the use of scenario analysis, monitoring developments, and emerging risks and opportunities. Physical risks are addressed through mitigating actions as mentioned in this table at the relevant risk affected by climate change. |
COVID-19 | Supply-chain disruption (inbound and outbound) | We are continuously managing our in- and outbound supply chain and taking appropriate action to mitigate risk. We are adapting the inventory levels of strategic raw materials and have arranged for multi-sourced supply alternatives wherever possible. |
Adverse cash flow impact | Our covenant net debt/covenant EBITDA ratio at the end of 2021 was 2.6, well below the limits of our loan covenants (3.75x). Adverse cash flow impacts may occur when multiple customers do not pay or pay late; or when business is declining due to an economic downturn, or due to production disruption issues within Corbion (see below). We continuously monitor our debtor payment behavior and actively manage any materializing overdue positions. We have credit facilities available (e.g. undrawn portion of the RCF facility) to cater for potential cash flow funding requirements. | |
Economic downturn | Generally, the food and pharma businesses are relatively less sensitive to economic downturns, although the long-term consequences of the COVID-19 pandemic for future consumer behavior patterns are unknown. We stepped up our monitoring of business developments and payment behavior of customers to enable timely measures in case of worsening trends. | |
Production disruption | Because of our position as a key supplier in the food and pharma supply chains, our plants in most countries are qualified as “essential,” enabling our people and contractors to come to the plant and continue their activities, and enabling us to serve our customers in the best possible way. We have taken extensive preventive measures to reduce contamination risk on the shop floor and ensured redundancy in our shift planning. |
Competition | With lactic acid demand exceeding supply, the possibility of new market entrants increases. | By investing in R&D Corbion intends to keep its competitive edge. The new circular lactic acid production technology is an example of the innovative strength of Corbion. In 2020 Corbion made the decision to build the first plant industrial scale with this new technology in Thailand, resulting in reduced production costs (operational in 2023). |
Business development underperformance | Business development is one of the key drivers of Corbion's Advance 2025 strategy. Corbion is investing in new platforms of growth such as PLA, for which the pace of market adoption is inherently uncertain given the early development stage of these initiatives. | Corbion is following a disciplined investment approach to these major business development initiatives through actions like: |
Business interruption due to new ERP platform | Corbion embarked on a multi-year (2017 - 2023) project to replace the existing ERP systems by a new, global ERP platform (project CUBE, based on SAP S/4HANA). As this new system addresses nearly all of the core transactional processes, such transition if not prepared and/or managed well, could lead to major business interruptions. | Corbion considers project CUBE as one of the key initiatives for change management which will be implemented in the years to come. The project is staffed with dedicated experienced project management (resources from both internal and external system integrator), follows strict project governance procedures, and reports to an Executive Committee-led steering committee. |
Inability to find, develop, and retain skilled talent | To execute the Advance 2025 strategy, Corbion requires a pool of skilled talent. | Corbion has robust compensation and performance management processes in place. |
Raw material, energy, and carbon price volatility and availability | Failure to manage the price volatility risk of raw materials, chemicals, energy, and carbon which cannot be directly passed on to customers due to market conditions or lack of contractual enforcement, may result in adversely impacted gross margins. Climate-change-related events may cause more volatility in respect of our key raw material components (sugar, corn) and carbon pricing. | Our global procurement organization, with dedicated finance support, has developed adequate measures to secure contract positions and obtain financial instruments to minimize or delay exposure to cost fluctuations due to changing raw material prices that might impact our margins negatively. These measures include early warnings of possible impact on our organization and our customers. Also, the trade in and availability of CO2-emission rights are actively managed. |
To improve assurance on availability, we have implemented a multiple-supplier sourcing policy for our most critical raw materials. | ||
Overall raw material risks are mitigated by actively taking longer-term contract positions where necessary, by sourcing from different locations/key raw materials, and in the longer run, by considering alternative or second-generation feedstocks and greenhouse gas emissions reduction. | ||
Various measures are applied to actively manage our margins, e.g. through the inclusion of price formulas in sales contracts and timing alignment between sourcing price exposure and sales contract duration. |
Changing customer behavior toward food and changing product regulations in all industries in which Corbion is active | Our industry is inherently subject to uncertainties including evolving diets, reflecting perceptions with respect to health and sustainability issues, and subsequent policy responses (regulations). | Corbion works closely with its customers to identify trends and develop the right portfolio of solutions to address evolving trends. |
Operations risks | ||
Safety incidents | Inherent health and safety hazards in our operations and insufficient awareness of unsafe operational conditions can lead to injuries or casualties and, potentially, a temporary plant shutdown. | Safety is an integral part of new design and change in product formulations and production processes. We rolled out a new policy focused on safety core beliefs, followed by participative workshops, and a program focused on life-changing safety rules, supported by e-learning and awareness campaigns. In 2021, Corbion continued the awareness campaigns, in addition to the roll-out of the ISO 45001 safety standards. Next to that, a specialized consultancy firm assessed our safety culture and a roadmap was developed to further strengthen our safety performance. |
Food safety | Food safety is of utmost importance to Corbion. Customers need to fully trust the safety of our products. Any issue can have significant impact on the reputation of the company and can result in significant costs of resolving the issue (for example, in case of a major recall). | Corbion has comprehensive quality assurance and control processes in place to ensure food safety and to track and trace our products in case of any issue. Every site is certified for food safety. |
Business interruption | An external hazardous event (e.g. floods, riots, fires) or internal disruption (e.g. availability of critical spare parts, global supply chain complexity) may result in a significant period of plant shutdown or disruption and hence in delayed/non-delivery of our products to internal and/or external customers, ultimately leading to adverse financial and reputational consequences. Climate-change-related events may increase the risk of business or supply chain interruption. | Business continuity and crisis management plans including contingency sourcing are in place with ongoing evaluation, based amongst other things on highly credible incident identifications for each site. Climate change (e.g. extreme weather events) is considered using scenario analysis. |
Cybersecurity breach | A breach of our IT security might lead to loss of information, business disruption, or unauthorized access to or corruption of our data and systems. | We have implemented an IT governance structure including a dedicated corporate information security officer and an information security governance board. The IT general control framework has been updated to include amended IT policies. On a frequent basis we perform penetration tests, helping us to identify and correct potential IT security weaknesses. The outcome of these tests helps us to further strengthen our IT security levels. In addition, we reduce our risk exposure by continuously raising IT security awareness with our people (e.g. through e-learning, communications). In 2021 we continued to have a strong IT control environment with our focus on timely application of patches, full implementation of multi-factor authentication, running a Security Operating Center, and segmentation of Corbion’s IT network. From time to time we experience cybersecurity attacks on our information technology systems, and the techniques used for such attacks are increasingly becoming more sophisticated. In 2021, we identified one cybersecurity attack on our information technology systems. However, this attack has not materially impacted our business or operations. Nevertheless, any system failure, accident or security breach could result in business disruption, theft of our intellectual property and trade secrets, or unauthorized access to or corruption of our data and systems. |
Confidential information leakage | Failure to protect sensitive information adequately due to limited physical protective measures, inadequate user behavior, or potential cyberattacks may result in loss of valuable or sensitive information such as trade secrets or intellectual property. | All mitigation actions mentioned above under Cybersecurity breach are geared to keep our sensitive information confidential. |
Compliance risks | ||
Non-compliance with applicable tax laws | Failure to timely detect and anticipate changes in a wide variety of tax laws or in the application thereof could adversely affect our financial results. | An adequate quarterly reporting system is in place, we hold regular tax meetings, and review tax compliance of our operating companies. Our global tax control framework warrants compliance. Transfer pricing policy and documentation are in place as well. We seek the advice of external tax experts in compliance matters. |
Non-compliance with legislative and regulatory environment | Failure to comply with (changing) laws and regulations in the markets we operate in and/or lack of insight into and/or awareness of relevant laws and regulations and their requirements may result in suspension of activities, reputational damage, and exposure to criminal and financial lawsuits. | Global legal and regulatory compliance programs are in place, including related awareness trainings, and we monitor, review, and report on changes in laws and regulations. We seek the advice of external experts in compliance matters. |
Reporting risks | ||
Sustainability reporting | There is an increasing number of new, existing and emerging regulations concerning climate change and other sustainability-related disclosures. These regulations or initiatives can be either voluntary or obligatory and can be aimed at investors or required by governing bodies. This includes, but is not limited to, the EU Taxonomy, CSRD, TCFD, TNFD, IFRS/ISSB prototype standards, science-based targets, and CDP. Failure to report sufficient information might potentially lead to a lack of trust, reputational damage, loss of customers, and legal claims. | Corbion aims to be a frontrunner in sustainable business practices. To communicate this effectively and reliably there is a need for adequate disclosures. We are therefore constantly monitoring development in this field and try to anticipate upcoming regulation. Through timely integration of standards and collection of data we are able to keep up with the required disclosures and provide investors and other stakeholders with the information they need. |
Non-compliance with International Financial Reporting Standards (IFRS) | Not informing our shareholders and other stakeholders in conformity with IFRS might lead to a lack of trust, reputational damage, and legal claims. | Corporate accounting policies are maintained and made available via the Corbion intranet. Our global control framework includes financial reporting controls that warrant compliance with IFRS. For significant entities, the effectiveness is self-assessed every quarter. |
Internal control systems
Corbion applies the 3-lines-of-defense model for internal controls. The first line (line management) is responsible for the operational effectiveness of the internal control framework. The second line coordinates, advises, and monitors line management regarding their responsibilities for internal control. The third line is represented by the internal audit department which is independently reviewing the control framework.
Our internal control framework is not limited to the elements outlined below as these are a summary of the controls implemented at local and corporate levels. We apply several control elements, of which the effectiveness is self-assessed or monitored by the second and third lines of defense.
Business control framework
Business controls cover a broad range of policies, procedures, systems, and other measures. They provide reasonable assurance on the effectiveness and efficiency of our operational processes and ensure the output is as expected to support the realization of the company strategy and objectives. On entity level, important elements of the framework are the business planning process and management review.
In addition, the business controls ensure the reliability of non-financial information. Providing non-financial information to our stakeholders becomes increasingly important, most notably on Sustainability. The control framework over non-financial information is still less mature than the framework over financial reporting and therefore limited assurance is given by KPMG. Corbion is closely monitoring the outside developments in sustainability reporting standard setting and in conjunction with these developments improving the control framework over sustainability reporting.
Business planning, budgeting, and management review
Based on Corbion’s strategy and plans, targets are set for the annual budget. After determining these budgets, the targets are rolled out to the responsibility areas (business units, operations, etc.) within Corbion.
Quarterly updated estimates are made based on a forecast until the end of the year. Forecasts are specifically discussed between responsibility area leaders and the Executive Committee during quarterly business review meetings. The Executive Committee monitors business performance on a monthly and quarterly basis using a defined set of key performance indicators and reviews of actual results versus budgets, quarterly estimates, and the previous year.
Local entities are visited frequently. Operational management meets at least once a month to discuss their business activities and related risks, the actual performance versus budget, and other significant matters in their respective areas.
Legal and regulatory review
Local management is responsible for compliance with laws and regulations. The Legal and Compliance Department is consulted by local management on an ongoing basis. Every six months, local management reports the main open legal issues with a potential gross exposure of each exceeding € 100,000 to Corporate Legal and Corporate Finance.
Internal control framework over financial reporting
General
Corbion is committed to maintaining high-quality, reliable financial reporting, and a good control environment. All reporting entities assess the operating effectiveness of their financial closing and reporting processes, at mid-year and end-of-year, confirming compliance with the relevant guidelines and IFRS.
During 2021, our main legal entities performed quarterly self-assessments of the design and implementation of their key financial process controls. Special attention was paid to entities that migrated to the new ERP system. For these entities, the control set was re-designed, including a shift from manual controls to automated controls where possible. Self-assessment also includes tax governance and treasury internal controls. Improvement recommendations based on audit and self-assessment findings are followed up by local management, the status of which is being monitored regularly by the Executive Committee.
Together with the Letters of Representation, this provides reasonable assurance on the integrity of our financial reporting.
Letters of Representation
Every six months, managing directors and finance directors of each reporting entity or, where applicable, other senior staff, provide a Letter of Representation to the Board of Management. This letter represents compliance with financial reporting and internal controls.
Tax principles
Corbion considers paying taxes an important part of our corporate social responsibility. Based on this and derived from our Code of Business Conduct as part of our corporate governance structure, we have adopted the following tax principles. These principles deal with all different types of taxes which we are obliged to report and pay in the jurisdictions in which we operate, including taxes on profits, value added taxes, wage taxes, duties, and various other taxes.
Tax strategy
Corbion’s tax strategy follows from and is aligned with the Corbion business strategy and objectives and the Corbion values Care, Courage, Collaboration, and Commitment. The tax strategy is an integral part of the Corbion Tax Policy, which is updated annually and reviewed and approved by the Board of Management. Furthermore, implementation and execution of the tax strategy is monitored by the Audit Committee of the Supervisory Board and discussed during regular meetings with the Audit Committee.
Business rationale and arm’s length principle
We aim to pay the appropriate amount of tax depending on where value is created in each of the jurisdictions we operate in, following the normal course of commercial activity, and in accordance with domestic and international rules and standards. All our intercompany transfer pricing and policies are based on the “arm’s length principle.” Corbion abstains from setting up structures in countries on the EU list of non-cooperative tax jurisdictions or in countries that have been designated as uncooperative tax havens by the OECD Committee on Fiscal Affairs.
Relationship with tax authorities
We seek to develop mutually respectful relationships with the various national tax authorities based on trust and transparency. To accomplish this, we aim for an open and constructive dialogue with the various tax authorities on the basis of disclosure of all relevant facts and circumstances. Within this context, Corbion may apply for advance tax rulings or advance pricing agreements on the tax treatment of specific transactions in order to obtain advance certainty on the relevant tax consequences. In the Netherlands we concluded a so-called tax covenant (“horizontal monitoring”) with the Dutch tax authorities. Such covenant entails that the tax authorities can rely on Corbion to provide upfront disclosure of all relevant information, while it allows Corbion to get upfront confirmation of applicable tax treatment.
Tax governance
Within the governance framework, the conduct of the group’s tax affairs and the management of tax risks are delegated to the group’s tax department with support and assistance from the group and local finance departments. The group’s tax affairs are carried out in line with the Corbion values, the Corbion Code of Business Conduct, and the Corbion Tax Policy. This also applies to potential ethical issues related to tax, which are covered by the Code of Business Conduct and the related annual training programs, and which can be addressed under the Corbion Speak Up Policy. The Audit Committee supervises the activities of the Board of Management with respect to the tax governance framework.
Compliance
We aim to act at all times in accordance with the letter and the spirit of all applicable tax laws, in which we are guided by the relevant local and international standards. Compliance is monitored within a global tax control framework. Corbion complies with its statutory obligations and aims to file all required tax-relevant information with the appropriate tax authorities in a timely, transparent, and complete manner. Tax-related disclosures are made in accordance with the relevant domestic regulations, as well as applicable reporting requirements under IFRS.
Insurance
Insurance is an integral part of our risk management approach as it is an instrument to manage the financial consequences of risks. The choice to obtain external insurance cover depends on the cost efficiency of the instrument. The coverage of insurances is monitored and benchmarked regularly.
IT general control framework
An information technology general control (ITGC) framework is in place which aims to ensure the proper management of IT governance in general, projects and programs, computer operations, and access management.
From an IT security perspective, the Information Security Board (composed of representatives from the Executive Committee and senior management) sets the IT security roadmap. Risk-reducing initiatives in the past years included amongst others a company-wide security awareness program, multi-factor authentication, penetration tests, yearly disaster recovery plan testing for selected systems, and implementation of a security policy and a Security Operating Center. In addition, Corbion continued to strengthen the network segmentation. In case of data security incidents, the Data Breach Committee is notified to ensure proper action and communication with authorities.
Audit
Internal audit
Internal audit supports the organization in accomplishing its objectives by providing a systematic, disciplined approach for the evaluation and improvement of the effectiveness of our internal control and governance processes. The Internal Audit Charter is approved by the Executive Committee and the Audit Committee. The objective of internal audit is to provide a broad range of audit services designed to assist the Executive Committee in controlling the business operations. Internal audit evaluates risks and assesses that the controls in place are adequate to mitigate the risks identified by management, identifying best practices, and recommending improvement opportunities to management. The audit plan is prepared, discussed, and agreed with relevant stakeholders including the Executive Committee and the Audit Committee. The audit plan is approved annually by the Board of Management and Supervisory Board. The plan has a rolling character so changes in priorities may be applied. Changes are discussed with the Audit Committee. A summary of all audit reports and the follow-up of open internal audit items are reported to and discussed with the Executive Committee and Audit Committee on a regular basis.
External audit and assurance
Our external financial audit engagement ensures that our financial statements give a true and fair view of our financial position as at year-end and of our result and our cash flows for the year then ended. In 2021, the external auditor reviewed the sustainability indicators marked with "√." Contrary to the audit of our financial statements, this sustainability review is only aimed at obtaining a limited level of assurance.
Governance / risk management and responsibility statement
Corbion has defined a governance model that identifies clear reporting and accountability structures in line with the Dutch Corporate Governance Code. The Executive Committee is responsible for:
-
identifying and analyzing the risks associated with Corbion’s strategy and activities;
-
establishing the risk appetite, as well as ensuring that mitigating measures are being put in place;
-
the design, implementation, and operation of Corbion’s internal risk management and control systems; and
-
monitoring the operation of the internal risk management and control systems and assessing the design and effectiveness thereof.
The Board of Management discusses the effectiveness of the design and operation of the internal risk management and control systems with the Audit Committee and the Supervisory Board annually.
The Executive Committee carried out an assessment of the design and effectiveness of the internal risk management and control systems, covering strategic, operations, reporting, and compliance risks. Elements that were taken into account included reports from the internal audit function and the external auditor, findings reported under one of our control frameworks, matters reported by the Legal Department, and reports received under our Speak Up Policy. The outcome of this assessment was that no major failings were observed in the internal risk management and control systems in the year under review, and that no significant changes have been made to these systems. The findings of the assessment have been discussed with the Audit Committee and the Supervisory Board. Corbion is continuously strengthening its internal risk management and control systems through various improvement initiatives – for 2022, no major improvements have been identified. In 2022, concurrently with the roll-out of the new SAP-based ERP system, Corbion will assess the impact of the SAP implementation on Corbion’s control framework and, where possible, implement improvements by optimally using the application controls of SAP.
Risk management statement
Corbion’s risk management and internal control systems are designed to identify in a timely manner the risks inherent to our strategic, operations, compliance, and reporting objectives and to determine appropriate risk responses as described above. Risk management and actions taken in the year under review were reported to and discussed by the Audit Committee and the Supervisory Board. Internal representations received from management, regular management reviews, evaluations of the design and implementation of our risk management and internal control systems, and business and Audit Committee reviews are an integral part of Corbion’s risk management approach.
It should be noted that the above does not imply that these systems and procedures provide absolute certainty as to the realization of strategic, operations, compliance, and reporting objectives, nor that they can prevent all misstatements, inaccuracies, errors, fraud, and non-compliance with laws and regulations.
On the basis thereof, and as explained in the section Risk management in this report, the Board of Management, with reference to best-practice provision 1.4.3 of the Dutch Corporate Governance Code, states that to the best of its knowledge:
-
the Annual Report provides sufficient insight into material failings in the effectiveness of the internal risk management and control systems;
-
the aforementioned systems provide reasonable assurance that the financial reporting does not contain any material inaccuracies;
-
based on the current state of affairs, it is justified that the financial reporting is prepared on a going concern basis; and
-
the Annual Report states those material risks and uncertainties that are relevant to the expectation of the company’s continuity for the period of twelve months after the preparation of the Annual Report.
Responsibility statement
With reference to Section 25c Subsection 2 sub c of Chapter 5 of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht), the Board of Management states that to the best of its knowledge:
-
the Financial Statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position, and earnings of Corbion and its group companies included in the Financial Statements; and
-
the Annual Report gives a true and fair view of the position of Corbion as at the balance sheet date, the developments during the financial year of Corbion and its group companies included in the Financial Statements, and a description of principal risks that Corbion faces.
Amsterdam, the Netherlands, 24 February 2022
Board of Management
Olivier Rigaud, Chief Executive Officer
Eddy van Rhede van der Kloot, Chief Financial Officer
Report of the Supervisory Board
The Supervisory Board supervises and advises the Board of Management and Executive Committee in performing their management tasks and setting the direction of the business of Corbion. In performing its duties, the Supervisory Board is guided by the interests of the company and its stakeholders. The Rules of the Supervisory Board are available on Corbion's website.
Overview 2021
In 2021, the COVID-19 pandemic again had a huge impact on everybody’s personal life and business situation. The Supervisory Board is impressed by how the Executive Committee and the rest of the organization continued to deal with this crisis: protecting the health and safety of our people as our first priority, working very hard to achieve continuity in raw-material supply, production, and timely transportation to our customers.
Eddy van Rhede van der Kloot, CFO, was re-appointed by the General Meeting of Shareholders in May 2021 for a third term (May 2022 - May 2026). The Supervisory Board is pleased that it was able to secure continuity in leadership to further drive the Advance 2025 strategy, execute our investment program to enhance value creation for our shareholders and other stakeholders, and further develop Corbion as an innovative sustainable ingredient solutions company with sustainability at the heart of our Preserving What Matters purpose.
Dessi Temperley was appointed by the General Meeting of Shareholders in May 2021 as member of the Supervisory Board. The Supervisory Board is pleased that Dessi Temperley further strengthens its expertise with her financial and accounting experience, and her commercial insight and knowledge of European markets. Her appointment also further enhances the diversity of the Supervisory Board.
From a financial perspective, 2021 was an extraordinary year for Corbion in a volatile business environment. Our strong organic net sales growth of 15% for core - mostly driven by volume growth - was achieved under challenging circumstances, and was supported by the business units Sustainable Food Solutions, Lactic Acid & Specialties, and Incubator (AlgaPrime DHA). On the other hand our Adjusted EBITDA margin was adversely impacted by higher input costs not yet reflected in the sales prices, and increased fixed costs due to investments in organizational capabilities in line with our Advance 2025 strategy.
Especially in such a challenging year, the Supervisory Board would like to thank the Executive Committee and all Corbion employees around the world for their care, commitment, resilience, and hard work in 2021.
Composition of the Supervisory Board
The current members of the Supervisory Board are Mathieu Vrijsen (Chair), Rudy Markham (Vice-Chair), Liz Doherty, Ilona Haaijer, Steen Riisgaard, and Dessi Temperley. Brief resumes of the members of the Supervisory Board are available under the section Corporate governance/Supervisory Board in this report. The profile and diversity policy of the Supervisory Board are available on Corbion's website.
Mathieu Vrijsen was re-appointed as member of the Supervisory Board at the annual General Meeting of Shareholders on 19 May 2021. He was appointed for a new term of two years, as this is his third term. The reasons for the re-appointment of Mathieu Vrijsen were that during his first two terms, he has made an important contribution to the Supervisory Board’s work, amongst others as Chair of the Supervisory Board, Chair of the Appointment & Governance Committee, and member of the Remuneration Committee and the Science & Technology Committee. Mathieu Vrijsen’s broad knowledge of the (bio)chemical industry and his extensive experience acquired as Senior Vice President, responsible for Global Operations & Engineering, and member of the management team of a major international company are of great value to Corbion and contribute to a well-balanced composition of Corbion’s Supervisory Board.
On 19 May 2021, Dessi Temperley was appointed by the General Meeting of Shareholders as Supervisory Board member. Jack de Kreij stepped down from the Supervisory Board on 19 May 2021 after 10 years of distinguished service to the company as Supervisory Board member and Chair of the Audit Committee.
At the annual General Meeting of Shareholders in 2022 Rudy Markham will step down from the Supervisory Board after 11 years of distinguished service to the company. Starting in February 2011 (when the company was still CSM), Mr. Markham played a pivotal role in the strategic reorientation of the company which resulted in the transition from CSM into Corbion (which was effectuated in 2013). Over the years, Rudy Markham has made excellent contributions to the Supervisory Board, amongst others as Chair and Vice-Chair of the Supervisory Board, Chair of the Remuneration Committee, and member of the Appointment and Governance Committee.
The Supervisory Board has benefited immensely from his strategic thinking, deep financial expertise, knowledge of the financial markets, and his broad and international background in major listed internationally operating companies. His legacy, both as a founding father and a driver of the successful development of Corbion, will live on. Mathieu Vrijsen on behalf of the whole Supervisory Board would like to sincerely thank Rudy Markham for his contributions to Corbion during his 11 years of service, as well as for being an inspiring and pleasant team member, and wish him all the best in his future endeavors. Ilona Haaijer will be succeeding Rudy Markham as Vice-Chair of the Supervisory Board.
In the opinion of the Supervisory Board, the independence requirements referred to in best-practice provisions 2.1.7 to 2.1.9 of the Dutch Corporate Governance Code have been fulfilled.
Diversity and competence matrix for the Supervisory Board
Mathieu Vrijsen | Rudy Markham | Liz Doherty | Ilona Haaijer | Steen Riisgaard | Dessi Temperley | |
Diversity | ||||||
Nationality | Dutch | British | British | Dutch | Danish | Bulgarian and British |
Year of birth | 1947 | 1946 | 1957 | 1969 | 1951 | 1973 |
Gender | M | M | F | F | M | F |
Competences | ||||||
Company | Geographical | ||||||
Listed company experience | x | x | x | x | x | x |
Worked in businesses comparable to Corbion: (food) ingredients and biochemicals | x | x | x | x | x | |
International experience | x | x | x | x | x | x |
Lived in other geographical area | x | x | x | x | x | x |
Functional management | ||||||
General management | x | x | x | x | x | x |
Strategy development | x | x | x | x | x | x |
Commercial experience | x | x | ||||
Finance/IT | x | x | x | |||
Internal audit | x | x | ||||
Operations/Manufacturing | x | x | x | |||
R&D/Innovation | x | x | x | x | ||
Human resources | x | x | x | |||
Sustainability | x | x | x | x | ||
Governance/Compliance | x | x | x | x | x | x |
Risk management | x | x | x | x | x | x |
Meetings of the Supervisory Board
During the year under review, the Supervisory Board held seven regular meetings. Due to COVID-19 restrictions the Supervisory Board could only meet in person at the September and October meetings, and, as a consequence, five meetings were held online. Next to these, one other conference-call meeting was held. The Board of Management attended these meetings. The Supervisory Board also met regularly in the absence of the Board of Management to discuss, amongst others, developments in the financial results and the composition and functioning of the Supervisory Board and Board of Management. Members of the Supervisory Board regularly met with the members of the Executive Committee, business leaders, and members of corporate staff. The external auditor attended the meeting of 4 March 2021, at which the 2020 Annual Report and Financial Statements were recommended for adoption by the annual General Meeting of Shareholders.
The Chair and Vice-Chair of the Supervisory Board regularly met with the CEO and CFO either in person or by phone, for bilateral discussions about the progress of the company on a variety of matters.
Attendance at the in-person meetings held in 2021 was 100%. Attendance at the conference-call meetings was almost 100%; Steen Riisgaard was not able to attend one meeting. He provided his input beforehand to the Chair of the Supervisory Board. As in previous years all members of the Supervisory Board were able to make themselves sufficiently available to give adequate attention to the needs of Corbion.
Activities of the Supervisory Board
The discussions at the Supervisory Board meetings covered frequently recurring topics, such as safety, reports of its committees, the Advance 2025 strategy, developments in financial results, business developments, quarterly interim management statements, acquisitions and divestments, key investments, annual budget, internal risk management and control systems, succession planning of the Supervisory Board and Board of Management, remuneration for the members of the Board of Management, corporate governance, investor relations, culture and values, the science-based targets, the Financial Statements, and the Annual Report. In addition, the Supervisory Board discussed (the impact of) COVID-19, the ERP migration project, the innovation portfolio, and the construction of a new lactic acid plant in Thailand.
The Supervisory Board and the Executive Committee held one physical meeting to review the progress of the long-term strategy, Advance 2025, and to visit the plant in Montmeló, Spain, where they met with local management and other colleagues.
Evaluation
The Supervisory Board conducted a self-evaluation of its own functioning, the functioning of its committees, and that of its members, supported by an independent external specialist. Included was also its relation to and with the Board of Management and its members. This was done by means of surveys, followed by structured interviews with all members of the Supervisory Board. A report of the evaluation, including observations and recommendations, was discussed by the Supervisory Board. General observations are in line with previous years, indicating a positive, open and constructive interaction between members of the Supervisory Board focused on the business at hand and taking timely decisions when required. The Supervisory Board feels sufficiently informed and involved by the Board of Management, and is positive about the interaction and dynamics while the committees function as expected with experienced Supervisory Board members. The self-evaluation underlined the importance of aligned priorities between the Supervisory Board and Board of Management, especially in view of the implementation of the Advance 2025 strategy. The main topics for the 2022 agenda are geared toward safety, monitoring and evaluating the implementation of Advance 2025 and the key strategic projects and initiatives, reviewing organizational capability and development, and further building awareness of the stakeholder and market dynamics.
The Board of Management also conducted a self-evaluation of the functioning of the Board of Management and that of its members, supported by an independent external specialist. Included was also its relation to and with the Supervisory Board and its members. This was done by means of a survey followed by in-depth structured interviews with all members of the Board of Management and several members of the Executive Committee. General observations are that the members of the Board of Management are positive about their overall performance, that the size and composition of the Executive Committee are appropriate, and that there is a right balance between distance and involvement with the Supervisory Board. The main topics for the 2022 agenda are geared toward safety, executing the updated strategy Advance 2025 with a focus on margin recovery, the construction of our new lactic acid plant in Thailand, Algae Ingredients reaching EBITDA break-even, and continued focus on employee development and wellbeing.
Committees of the Supervisory Board
The Supervisory Board has appointed from among its members an Audit Committee, a Remuneration Committee, an Appointment and Governance Committee, and a Science and Technology Committee. The committees’ role is to prepare the decision-making of the Supervisory Board. The charters of the committees are available on Corbion's website.
Audit Committee
The members of the Audit Committee are Liz Doherty (Chair), Ilona Haaijer, and Dessi Temperley; Jack de Kreij served as Chair until May 2021. In 2021, the Audit Committee met five times in the presence of the external auditor, the CFO, the VP Finance Control, and the Senior Director Internal Audit. Other heads of departments (e.g. Treasury, Tax, Legal, and IT) were invited when the Audit Committee deemed it necessary and appropriate. The Audit Committee also held private individual meetings with the CFO, the Senior Director Internal Audit, and the external auditor, respectively. The attendance rate at the meetings held in 2021 was 100%. Due to COVID-19 restrictions, all meetings were held online, except for the meeting in October.
The agenda at the Audit Committee meetings covered, amongst other subjects, annual and half-year figures, interim management statements, accounting matters (including the impairment analysis for Algae Ingredients and FiberLive), IFRS changes, sustainability reporting, internal risk management and control systems, tax matters (including tax control framework), financing, treasury and insurance, pensions, IT (including cybersecurity), the ERP migration project, status of legal claims and litigations, status of the Business Conduct program, notifications received under the whistleblower procedure, internal audit plan, the management letter, reports of the internal and external auditors, and (the impact of) COVID-19. Furthermore, several presentations by members of the Executive Committee and other representatives of the organization were held about business updates and certain key risks for Corbion.
The core task of the Audit Committee is to extensively review the financial reports and budget as well as to evaluate the assessment from the Board of Management of the internal risk management and control systems before consideration by the full Supervisory Board. Both Liz Doherty and Dessi Temperley (continued to) act as financial experts (as defined in Clause 2.6 of the Charter of the Audit Committee). The effectiveness of the Audit Committee was reviewed as part of the 2021 overall evaluation of the Supervisory Board confirming that the Audit Committee continues to function in line with the requirements in this respect.
The Audit Committee closely monitors the independence of the external auditor. It evaluates the performance of the external auditor on a yearly basis and where appropriate recommends to the Supervisory Board the replacement of the external auditor. Furthermore, the Audit Committee submits a proposal to the Supervisory Board with respect to the fees for all audit services to be performed by the external auditor as requested by the Board of Management.
Appointment and Governance Committee
The Appointment and Governance Committee consists of Mathieu Vrijsen (Chair), Rudy Markham, and Steen Riisgaard. The Appointment and Governance Committee met five times in 2021 in the presence of the Chief Human Resources Officer and the Company Secretary. The CEO was invited to join certain parts of these meetings. The attendance rate at the meetings held in 2021 was 100%. Due to COVID-19 restrictions, all meetings were held online, except for the meeting in October.
The Appointment and Governance Committee discussed, amongst other subjects, the size and composition of the Supervisory Board and the Board of Management, the succession plans for the Supervisory Board (including transition periods) and the members of the Board of Management and Executive Committee, the performance of the Board of Management and its members, talent management, succession planning for senior management, people strategy, culture and values, the profile of the Supervisory Board, and the diversity policy for the Supervisory Board and Executive Committee, as well as governance matters.
Remuneration Committee
The Remuneration Committee consists of Rudy Markham (Chair), Mathieu Vrijsen, and Steen Riisgaard. The Remuneration Committee met six times in 2021 in the presence of the Chief Human Resources Officer and the Company Secretary. The CEO was invited to join certain parts of these meetings. The attendance rate at the meetings held in 2021 was 100%. Due to COVID-19 restrictions, all meetings were held online, except for the meeting in October.
The Remuneration Committee discussed, amongst other subjects, the remuneration report, the remuneration for the members of the Board of Management, the level of achievement of the 2020 Short-Term Incentive Plan (STIP) targets for the members of the Board of Management, the progress of the 2021 STIP targets and the targets of the running Long-Term Incentive Plan (LTIP) programs, and the target setting for the STIP 2022 and LTIP 2022-2024. The members of the Board of Management gave a view on their own remuneration, and the remuneration levels of the Executive Committee were reviewed.
Science and Technology Committee
The Science and Technology Committee consists of Steen Riisgaard (Chair), Ilona Haaijer, and Mathieu Vrijsen. The Science and Technology Committee met four times in 2021 in the presence of the Chief Science and Sustainability Officer, other members of the Executive Committee, and members of the R&D leadership team. The attendance rate at the meetings held in 2021 was 100%. Due to COVID-19 restrictions, all meetings were held online.
The agenda at these meetings covered, amongst other subjects, the innovation strategy, Lactic Acid & Specialties and its key R&D projects, Sustainable Food Solutions and its key R&D projects, and Algae Ingredients and its key R&D projects.
Financial Statements 2021
The Financial Statements prepared by the Board of Management for the financial year 2021 have been audited by KPMG Accountants N.V. The auditor’s findings on the Financial Statements have been discussed with the Board of Management, the Audit Committee, and the Supervisory Board. The Supervisory Board has accepted the Financial Statements and recommends that they be adopted by the General Meeting of Shareholders. The members of the Supervisory Board have signed the Financial Statements pursuant to their statutory obligation under Section 101 Subsection 2 of Book 2 of the Dutch Civil Code.
Amsterdam, the Netherlands, 24 February 2022
Supervisory Board
Mathieu Vrijsen, Chair
Rudy Markham, Vice-Chair
Liz Doherty
Ilona Haaijer
Steen Riisgaard
Dessi Temperley
Remuneration Board of Management
Remuneration policy and its implementation in 2021
To ensure Corbion’s development as a successful sustainable ingredient solutions company, the objective of the remuneration policy for the Board of Management is to create internationally competitive remuneration packages and employment conditions, which align the interests of the Board of Management with the strategic direction and horizon of the company, with a strong emphasis on performance-related pay and long-term value creation. The policy is in place since 2020 following approval by the annual General Meeting of Shareholders in that same year. The full remuneration policy is available on our website. This section describes how the remuneration policy has been implemented in 2021.
The implementation of the remuneration policy contributes to long-term value creation, as the long-term incentive for the Board of Management is aimed at longer-term value creation in line with stakeholder interests, measured over a performance period of three calendar years. To ensure that short-term performance also leads to sustainable long-term value creation, the short-term and long-term incentive performance metrics are aligned (with the long-term incentive having two additional metrics). The reward for long-term performance is deliberately set higher than the short-term award to emphasize the priority of value creation and sustainability for the long term. In implementing the remuneration policy scenario analyses have been taken into consideration.
Remuneration reference levels
The total remuneration levels – base salary, benefits allowance, short-term incentive, and long-term incentive – are based on a combined international reference group of more than twenty companies, selected based on size, all within the international guidelines as set by leading shareholder advisors (ISS). Included are nine European biotechnology companies that are active in the same or comparable industries as the company. In addition, eleven Dutch general industry companies have been selected that operate within the same governance system and societal context. Every two years a reference check is performed to independently benchmark the total compensation levels against market levels.
Base salary
Members of the Board of Management are entitled to a base salary. Based on median market data the base salary for the CEO will be set between € 525,000 and € 625,000. For the CFO base pay is set between € 325,000 and € 425,000. The Supervisory Board will review these ranges every two years and adjust them if the median market data of the reference group justifies any such adjustment. The individual pay of the Board members will be determined by the Supervisory Board within the boundaries of the above ranges (from time to time), based on personal performance delivery. There are no automatic annual increases in the base salary levels.
As per 1 April 2021, the annual base salary for Olivier Rigaud (CEO) amounted to € 575,000 and that for Eddy van Rhede van der Kloot (CFO) amounted to € 415,000.
Benefits allowance
Corbion does not provide (social) benefits such as a company car, individual retirement, medical or life insurance to members of the Board of Management. Therefore, and in accordance with the management services agreements, each member of the Board of Management is provided with a benefits allowance. This is a fixed annual amount of € 200,000 for the CEO and € 150,000 for the CFO to cover the cost of these types of expenses.
Short-Term Incentive Plan (STIP)
Entitlements and performance measures
Members of the Board of Management are eligible for a short-term incentive. The STIP rewards operational execution and is aimed at strengthening and growing the Corbion business. The short-term incentive is paid out in cash. In case of additional overperformance the STIP part related to that is paid out in Corbion shares which are subject to a three-year lock-up period. The STIP pay-out at-target level is set at 60% of base salary for the CEO, and 50% for the CFO.
The performance measures are organic net sales growth, adjusted EBITDA (both as defined in the remuneration policy), and sustainability. Organic net sales growth and adjusted EBITDA each account for a weight of 40%. The remaining 20% is determined by sustainability targets which are in line with Corbion’s focus areas, being safety performance and sustainability performance (verified responsibly sourced cane sugar, reduction of Scope I and II emissions, Product Social Metrics assessment for products contributing to Preserving food and/or health, and Total Recordable Injury Rate).
Performance targets and pay-out levels
Annually, at the beginning of the year, the Supervisory Board sets a target level for each performance measure, based on previous-year performance, the annual budget, and the longer-term strategic plan. A threshold performance level is determined below which no pay-out is granted and a maximum performance level where maximum pay-out is reached.
The performance levels and performance bandwidths are as follows.
Metric | Performance level | Performance bandwidth* |
Adjusted EBITDA | Threshold – maximum | Linear between 90% - 110% of at-target performance |
Overperformance | Linear between 110% - 120% of at-target performance | |
Organic net sales growth | Threshold – maximum | Linear with a range of 600 bps around at-target performance (equally divided below and above at-target) |
Overperformance | Linear up to 300 bps above maximum performance level | |
Sustainability | Threshold | 1 out of the 4 targets is met |
Target | 2 out of the 4 targets are met | |
Maximum | 3 out of the 4 targets are met | |
Overperformance | All 4 targets are met |
- * The Supervisory Board may determine narrower percentage ranges.
Pay-out for STIP 2021
For 2021, the Supervisory Board applied the performance bandwidth as stated above. An actual pay-out level of 200% has been achieved for organic net sales growth, 59.8% for adjusted EBITDA, and 200% for sustainability. This has led to a total pay-out of 143.9% of the at-target STIP for both Olivier Rigaud and Eddy van Rhede van der Kloot. This resulted in (i) a payment in cash of € 392,955 for Olivier Rigaud and of € 236,342 for Eddy van Rhede van der Kloot, and (ii) a payment in shares of 2959 shares for Olivier Rigaud (representing a value of € 103,500 at the time of vesting (based on a vesting price of € 34.98)) and 1780 shares for Eddy van Rhede van der Kloot (representing a value of € 62,250 at the time of vesting (based on a vesting price of € 34.98)).
Long-Term Incentive Plan (LTIP)
Entitlements and performance measures
Members of the Board of Management are eligible for a long-term incentive. The LTIP is aimed at long-term value creation in line with the interests of all stakeholders of Corbion, measured over a performance period of three calendar years. The long-term incentive is paid out in Corbion shares which are subject to a shareholding requirement. Each year, members of the Board of Management are entitled to a conditional grant of shares. The value of the conditional grant is 120% of base salary for the CEO, and 100% for the CFO.
The performance measures are relative total shareholder return (TSR) (30%), organic net sales growth (25%), adjusted EBITDA (20%), sustainability (12.5%), and return on capital employed (ROCE) (12.5%).
Performance targets and pay-out levels
Prior to each conditional grant the Supervisory Board sets target levels for the performance measures TSR, organic net sales growth, adjusted EBITDA, ROCE, and sustainability (for the 2021-2023 series: verified responsibly sourced cane sugar, reduction of Scope I, II, and III emissions, Product Social Metrics assessment for products contributing to Preserving food and/or health, and Total Recordable Injury Rate). A threshold performance level is determined below which no pay-out is granted and a maximum performance level where maximum pay-out is reached.
The performance levels and performance bandwidths are as follows.
Metric | Performance level | Performance bandwidth* |
TSR | Threshold – maximum | See below |
Adjusted EBITDA | Threshold – maximum | Linear between 75% - 125% of at-target performance |
Organic net sales growth** | Threshold – maximum | Linear with a range of 600 bps around at-target performance (equally divided below and above at-target) |
ROCE*** | Threshold – maximum | Linear between 75% - 125% of at-target performance, whereby the threshold level will be set at the weighted average of the pre-tax WACC(s) as reported in the Annual Report |
Sustainability | Threshold | 1 out of the 4 targets is met |
Target | 2 or 3 out of the 4 targets are met | |
Maximum | All 4 targets are met |
- * The Supervisory Board may determine narrower percentage ranges.
- ** The performance over a 3-year period will be calculated as the average of the annual organic net sales growth rates as reported in the respective annual reports for those 3 years.
- *** The performance over a 3-year period will be calculated as the average of the annual ROCE results as reported in the respective annual reports for those 3 years.
The Supervisory Board may determine narrower percentage ranges.
The performance over a 3-year period will be calculated as the average of the annual organic net sales growth rates as reported in the respective annual reports for those 3 years.
The performance over a 3-year period will be calculated as the average of the annual ROCE results as reported in the respective annual reports for those 3 years.
For relative TSR performance, threshold pay-out is set at meeting the eighth position in the peer group. Target pay-out is achieved at the fourth and fifth position in the peer group and maximum pay-out is achieved at reaching the first and second position in the peer group. The following table illustrates the ranking and the corresponding vesting percentage.
Ranking | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9-16 |
Percentage of TSR-metric-linked performance shares vesting | 150% | 150% | 125% | 100% | 100% | 75% | 50% | 50% | 0% |
At the end of the three-year performance period, relative TSR performance of the company versus the TSR peer group will be independently assessed by a leading bank in the Netherlands.
Pay-out for the LTIP 2018-2020 series and granted shares for the LTIP 2021-2023 series
The number of conditionally granted but not yet vested shares as per 1 January 2021 for each of the members of the Board of Management is as follows.
Name, position | Specification of the plan | Shares awarded, not vested per 1 January 2021 |
O. Rigaud, CEO | LTIP 2018-2020 | 0 |
E. van Rhede van der Kloot, CFO | 12,259 | |
O. Rigaud, CEO | LTIP 2019-2021 | 20,865 |
E. van Rhede van der Kloot, CFO | 12,140 | |
O. Rigaud, CEO | LTIP 2020-2022 | 22,260 |
E. van Rhede van der Kloot, CFO | 13,491 |
The LTIP 2018-2020 series was based on the following performance measures: EBITDA (60%), Earnings per Share (EPS) (20%), and TSR (20%). For the LTIP shares conditionally granted under this plan to Eddy van Rhede van der Kloot, an actual pay-out level of 112.9% has been achieved for the EBITDA target, 101.6% for EPS, and 150% for TSR as Corbion ranked 1st in the peer group. This has led to a total pay-out of 118.1% of the at-target LTIP for Eddy van Rhede van der Kloot. The number of vested shares received by Eddy van Rhede van der Kloot is 14,478 representing a value of € 688,284 at the time of vesting (based on a vesting price of € 47.54). Eddy van Rhede van der Kloot used the option of selling shares to finance the income tax due on the vested shares.
The number of performance shares conditionally granted to Olivier Rigaud in 2021 (possible vesting in 2024) is 14,722 representing a value of € 690,020 at the time of the grant (based on a grant price of € 46.87). The number of performance shares conditionally granted to Eddy van Rhede van der Kloot in 2021 (possible vesting in 2024) amounts to 8,854 representing a value of € 414,987 at the time of the grant (based on a grant price of € 46.87).
The overview below shows the number of conditionally granted but not yet vested shares as per 31 December 2021 for each of the members of the Board of Management, the grant price of the granted shares, and the remaining vesting period.
Name, position | Specification of the plan | Grant price | Shares awarded, not vested as per 31 December 2021 | Vesting date |
O. Rigaud, CEO | LTIP 2019-2021 | 26.36 | 20,865 | May 2022 |
E. van Rhede van der Kloot, CFO | 12,140 | |||
O. Rigaud, CEO | LTIP 2020-2022 | 29.65 | 22,260 | May 2023 |
E. van Rhede van der Kloot, CFO | 13,491 | |||
O. Rigaud, CEO | LTIP 2021-2023 | 46.87 | 14,722 | May 2024 |
E. van Rhede van der Kloot, CFO | 8,854 |
Overview remuneration
The total annual remuneration for the Board of Management in 2021 amounted to € 2.8 million including STIP over 2021 (2020: € 2.4 million). The table below shows the amounts the respective member of the Board of Management (i) received/was entitled to in 2021 (base salary, STIP, benefits allowance) and (ii) received/was entitled to in 2021 by way of vesting (LTIP).
Thousands of euros | Year | Base salary | STIP | LTIP | Benefits allowance | Other compensation | Relocation | Total |
O. Rigaud*, CEO | 2021 | 569 | 496 | 200 | 1,265 | |||
2020 | 550 | 501 | 200 | 1,251 | ||||
E. van Rhede van der Kloot, CFO | 2021 | 411 | 299 | 688 | 150 | 1,548 | ||
2020 | 400 | 303 | 318 | 150 | 1,171 | |||
Total | 2021 | 980 | 795 | 688 | 350 | 2,813 | ||
Total | 2020 | 950 | 804 | 318 | 350 | 2,422 |
- * Olivier Rigaud as of 1 July 2019
The ratio of the fixed remuneration (base salary and benefits allowance) versus the variable remuneration (STIP, LTIP, and other compensation) is for Olivier Rigaud 61% versus 39%, and for Eddy van Rhede van der Kloot 36% versus 64%.
The table below shows the remuneration costs based on the applicable IFRS standard and does not necessarily reflect the actual amounts paid.
IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | ||
Thousands of euros | 2021 | Base salary* | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | |
O. Rigaud | 779 | 496 | 542 | 1,817 | ||||
E. van Rhede van der Kloot | 572 | 299 | 391 | 1,262 | ||||
Total Board of Management | 1,351 | 795 | 933 | 3,079 | ||||
IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | ||
Thousands of euros | 2020 | Base salary* | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | |
O. Rigaud ** | 760 | 501 | 369 | 1,630 | ||||
E. van Rhede van der Kloot | 560 | 303 | 363 | 1,226 | ||||
Total Board of Management | 1,320 | 804 | 732 | 2,856 | ||||
T. de Ruiter | 323 | 171 | 279 | 13 | 786 | |||
Total former Board of Management | 323 | 171 | 279 | 13 | 786 | |||
- * Base salary also includes social security contributions and compensation, mainly allowances for expenses
The total remuneration for each (former) member of the Board of Management complies with the remuneration policy for the Board of Management, as it stays within the boundaries of this policy paid by Corbion nv; they did not receive any remuneration from a subsidiary or other company whose financials are consolidated by Corbion nv. Corbion does not grant loans, advances, or guarantees to members of the Board of Management. Corbion did not revise or claw back any variable remuneration. No severance payment has been made to members of the Board of Management.
Internal pay ratios and five-year performance overview
In line with good corporate governance practices regarding remuneration policies, Corbion measures the internal pay ratios within the company on a yearly basis. More specifically, Corbion has calculated the pay ratio of the Board of Management relative to the average company employee. For the Board of Management, the total remuneration cost (based on IFRS) is used. The average remuneration of all Corbion employees is calculated as the total remuneration of all Corbion employees on IFRS basis (see Note 6 to the consolidated financial statements) divided by the average number of Corbion employees on an FTE basis. The average number of FTEs is calculated on a monthly basis. The average remuneration of all Corbion employees in 2021 amounted to € 85,981 (2020: € 87,415).
For the CEO, the pay ratio to the average employee is 21.1 (2020: 18.6) and for the CFO it is 14.7 (2020: 14.0).
The overview below shows, for the last five financial years, the total remuneration (based on IFRS) of the current and former CEO (as the current CEO started in July 2019), the CFO, the average remuneration of all Corbion employees, the internal pay ratios, and the adjusted EBITDA and EPS of Corbion.
Name, position | 2017 | 2018 | 2019 | 2020 | 2021 |
O. Rigaud, CEO (A)* | 1,629 (20%***) | 1,817 (12%) | |||
E. van Rhede van der Kloot, CFO (B) | 989 (10%) | 788 (-20%) | 1,146 (45%) | 1,226 (7%) | 1,262 (3%) |
T. de Ruiter, (former) CEO (C)** | 2,273 (0%) | 1,805 (-21%) | 2,470 (37%) | ||
Average salary employees (D) | 82 (-3%) | 77 (-6%) | 82 (6%) | 87 (7%) | 86 (-1%) |
Internal pay ratio (A/D) | 16.6*** | 18.6 | 21.1 | ||
Internal pay ratio (B/D) | 12.0 | 10.2 | 14.0 | 14.0 | 14.7 |
Internal pay ratio (C/D) | 27.6 | 23.4 | 30.1 | ||
Adjusted EBITDA | 164.1 (-4%) | 131.6 (-20%) | 145.9 (11%) | 158.8 (9%) | 135.8 (-14%) |
EPS | 1.46 (-16%) | 0.93 (-36%) | 0.44 (-53%) | 1.24 (182%) | 1.33 (7%) |
- * Olivier Rigaud as of 1 July 2019
- ** Tjerk de Ruiter until 8 August 2019
- *** On an annualized basis as Olivier Rigaud started on 1 July 2019
Shares in the capital of the company
As at 31 December 2021, Corbion had a capital interest of 0.49%, amounting to 292,523 shares. In 2021, Corbion has neither issued new shares nor repurchased shares for the LTIP programs for the Board of Management and (senior) management and there are no intentions to that effect in 2022.
Share plans for employees
Corbion has an LTIP program for (senior) management, composed of around 77 employees, and an LTIP program for the Executive Committee members (not being members of the Board of Management). The long-term incentive covers a performance period of three calendar years. The LTIP performance measures are the same as for the Board of Management: TSR (30%), organic net sales growth (25%), adjusted EBITDA (20%), sustainability (12.5%), and ROCE (12.5%). For a certain categories of (senior) management, part of the LTIP is not performance related and is only restricted to continued employment for three years.
The total number of conditionally granted but not yet vested shares as per 1 January 2021 for (senior) management and Executive Committee members (not being members of the Board of Management) is as follows.
Specification of the plan | Shares awarded, not vested as 1 January 2021 |
LTIP 2018-2020 | 72,236 |
LTIP 2019-2021 | 74,291 |
LTIP 2020-2022 | 84,726 |
The LTIP 2018-2020 series was based on the following performance measures: EBITDA (60%), Earnings per Share (EPS) (20%), and TSR (20%). For the LTIP shares conditionally granted under this plan to the employees jointly, an actual pay-out level of 85% has been achieved for the EBITDA target, 101.6% for EPS, and 150% for TSR as Corbion ranked 1st in the peer group. This has led to a total pay-out of 118.1% of the at-target LTIP for the Executive Committee members (not being members of the Board of Management). As 30% of the total LTIP is not performance related and is only restricted to continued employment for three years, the actual pay-out for (senior) management is 100.9%. The total number of vested shares received by (senior) management and Executive Committee members (not being members of the Board of Management) is 79,970 representing a value of € 3,801,774 at the time of vesting (based on a vesting price of € 47.54).
The total number of performance shares conditionally granted to (senior) management and Executive Committee members (not being members of the Board of Management) in 2021 (possible vesting in 2024) is 70,410 representing a value of € 3,347,291 at the time of the grant (based on a grant price of € 47.54).
The table below shows the number of conditionally granted but not yet vested shares as at 31 December 2021 for (senior) management and Executive Committee members (not being members of the Board of Management) jointly, the grant price of the granted shares, and the remaining vesting period.
Specification of the plan | Grant price | Shares awarded, not vested as per 31 December 2021 | Vesting date |
LTIP 2019-2021 | 26.36 | 68,606 | May 2022 |
LTIP 2020-2022 | 29.65 | 78,054 | May 2023 |
LTIP 2021-2023 | 47.54 | 67,570 | May 2024 |
Remuneration for the Supervisory Board
Total remuneration for the members of the Supervisory Board in 2021 amounted to € 0.4 million (2020: € 0.4 million).
Each member of the Supervisory Board receives an annual base fee of € 50,000; the Vice-Chair receives € 60,000 and the Chair € 70,000.
For membership of the Audit Committee an additional fee of € 10,000 applies and for the Chair € 15,000. Members of the Appointment and Governance Committee, Remuneration Committee, or Science and Technology Committee receive an additional € 7,000 in fee; the fee for the Chair of these committees amounts to € 9,000. In addition, members receive reimbursement of expenses.
Breakdown remuneration Supervisory Board | ||||
IAS 24.17 category | Short-term employee benefits1 | Total | ||
Thousands of euros | Year | Base fee | Committee fee | |
Mathieu Vrijsen, Chair (Chair Appointment & Governance Committee / member Remuneration Committee / member Science and Technology Committee) | 2021 | 70 | 23 | 93 |
2020 | 70 | 23 | 93 | |
Rudy Markham, Vice-Chair (Chair Remuneration Committee / member Appointment and Governance Committee) | 2021 | 60 | 16 | 76 |
2020 | 60 | 16 | 76 | |
Liz Doherty (member Audit Committee until May 2021 / Chair Audit Committee as of May 2021) | 2021 | 50 | 15 | 65 |
2020 | 50 | 10 | 60 | |
Ilona Haaijer (member Audit Committee / member Science and Technology Committee) | 2021 | 50 | 17 | 67 |
2020 | 25 | 4 | 29 | |
Jack de Kreij (Chair Audit Committee until May 2021) | 2021 | 19 | 6 | 25 |
2020 | 50 | 15 | 65 | |
Steen Riisgaard (Chair Science and Technology Committee / member Remuneration Committee / member Appointment and Governance Committee) | 2021 | 50 | 23 | 73 |
2020 | 50 | 23 | 73 | |
Stefanie Schmitz (member Audit Committee from June until September 2020) | 2020 | 15 | 15 | |
Dessi Temperley (Member Audit Committee as of May 2021) | 2021 | 31 | 6 | 37 |
2020 | ||||
Total 2021 | 330 | 106 | 436 | |
Total 2020 | 320 | 91 | 411 |
- * Excluding expenses
Members of the Supervisory Board are neither entitled to variable remuneration nor to shares in the company or any option rights relating thereto. The total remuneration for each (former) member of the Supervisory Board complies with the remuneration policy for the Supervisory Board, as it stays within the boundaries of this policy and no deviations from this policy have been applied. Members of the Supervisory Board are paid by Corbion nv; they did not receive remuneration from a subsidiary or another company whose financials are consolidated by Corbion nv. Corbion does not grant loans, advances, or guarantees to members of the Supervisory Board.
Remuneration former member of the Board of Management
Mr. Tjerk de Ruiter stepped down as CEO and Chair of the Board of Management as at 8 August 2019. The contract of assignment with Mr. De Ruiter expired on 12 May 2020.
The LTIP 2018-2020 series was based on the following performance measures: EBITDA (60%), Earnings per Share (EPS) (20%), and TSR (20%). For the LTIP shares conditionally granted under this plan to Tjerk de Ruiter, an actual pay-out level of 112.9% has been achieved for the EBITDA target, 101.6% for EPS, and 150% for TSR as Corbion ranked 1th in the peer group. This has led to a total pay-out of 118.1% of the at-target LTIP for Tjerk de Ruiter. The number of vested shares received by Tjerk de Ruiter is 20,109 (based on a pro-rata entitlement until 12 May 2020). Tjerk de Ruiter used the option of selling shares to finance the income tax due on the vested shares.
The table below shows the amounts Tjerk de Ruiter (i) received/was entitled to in 2021 (base salary, STIP, benefits allowance) and (ii) received/was entitled to in 2021 by way of vesting (LTIP).
Thousands of euros | Year | Base salary | STIP | LTIP | Benefits allowance | Special share award | Other compensation | Relocation | Total |
T. de Ruiter (former CEO) | 2021 | 956 | 956 | ||||||
2020* | 225 | 171 | 591 | 75 | 40 | 1,102 |
- * Until 12 May 2020
- Consolidated financial statements
- Consolidated income statement
- Consolidated statement of comprehensive income
- Consolidated statement of financial position
- Consolidated statement of changes in equity
- Consolidated statement of cash flows
- Notes to the consolidated financial statements
- 1. Accounting information
- 2. Accounting principles
- 3. Consolidated income statement adjustments
- 4. Segment information
- 5. Net sales disaggregation
- 6. Income and expenses
- 7. Financial income and charges
- 8. Taxes
- 9. Earnings per ordinary share
- 10. Property, plant, and equipment
- 11. Leases
- 12. Intangible fixed assets
- 13. Investments in joint ventures and associates
- 14. Other non-current financial assets
- 15. Inventories
- 16. Receivables
- 17. Cash and cash equivalents
- 18. Disposal group held for sale
- 19. Equity
- 20. Provisions
- 21. Long-term employee benefits
- 22. Deferred tax
- 23. Borrowings
- 24. Other non-current liabilities
- 25. Other current liabilities
- 26. Acquisitions and disposals
- 27. Financial risk management and financial instruments
- 28. Related-party transactions
- 29. Share-based compensation
- 30. Off-balance sheet commitments
- 31. Events after balance sheet date
- Company financial statements
- Company statement of financial position
- Company income statement
- Notes to the company financial statements
- General
- 32. Financial fixed assets
- 33. Taxes
- 34. Receivables
- 35. Cash and cash equivalents
- 36. Equity
- 37. Other non-current liabilities
- 38. Interest-bearing current liabilities
- 39. Non-interest-bearing current liabilities
- 40. Off-balance sheet commitments
- 41. Personnel
- 42. Audit fees
Consolidated financial statements
Consolidated income statement
Millions of euros | Note | 2021 | 2020 |
Net sales | 4 | ||
Cost of sales | - | - | |
Gross profit | |||
Selling expenses | - | - | |
Research and development costs | - | - | |
General and administrative expenses | - | - | |
Other gains and losses | 6 | ||
Operating result | |||
Financial income | 7 | ||
Financial charges | 7 | - | - |
Results from joint ventures and associates | 13 | ||
Result before taxes | |||
Income tax expense | 8 | - | - |
Result after taxes | |||
Result attributable to non-controlling interests | |||
Result attributable to equity holders of Corbion nv | |||
Per ordinary share in euros | 9 | ||
Basic earnings | |||
Diluted earnings |
Consolidated statement of comprehensive income
Millions of euros | Note | 2021 | 2020 |
Result after taxes | |||
Other comprehensive results to be recycled to the income statement | |||
Foreign operations – foreign currency translation differences | 19 | - | |
Net investment hedge – net movement | 19 | - | |
Hedge reserve | 19 | ||
Taxes relating to other comprehensive results to be recycled to the income statement | 19 | - | |
Total other comprehensive results to be recycled to the income statement | - | ||
Other comprehensive results not to be recycled to the income statement | |||
Remeasurement defined benefit arrangements | 21 | - | - |
Taxes relating to other comprehensive results not to be recycled to the income statement | |||
Total other comprehensive results not to be recycled to the income statement | - | - | |
Total other comprehensive results | - | - | |
Total comprehensive result after taxes | |||
Comprehensive result attributable to non-controlling interests | |||
Comprehensive result attributable to equity holders of Corbion nv |
Consolidated statement of financial position
Before profit appropriation, millions of euros | Note | As at 31-12-2021 | As at 31-12-2020 |
Assets | |||
Property, plant, and equipment | 10 | ||
Right-of-use assets | 11 | ||
Intangible fixed assets | 12 | ||
Investments in joint ventures and associates | 13 | ||
Long-term employee benefits | 21 | ||
Other non-current financial assets | 14 | ||
Deferred tax assets | 22 | ||
Total non-current assets | |||
Inventories | 15 | ||
Trade receivables | 16 | ||
Other receivables | 16 | ||
Income tax receivables | |||
Cash and cash equivalents | 17 | ||
Assets held for sale | 18 | ||
Total current assets | |||
Total assets | |||
Equity and liabilities | |||
Equity | 19 | ||
Borrowings | 23 | ||
Lease liabilities | 11 | ||
Long-term employee benefits | 21 | ||
Deferred tax liabilities | 22 | ||
Other non-current liabilities | 24 | ||
Total non-current liabilities | |||
Borrowings | 23 | ||
Lease liabilities | 11 | ||
Provisions | 20 | ||
Income tax payables | |||
Trade payables | |||
Other current liabilities | 25 | ||
Liabilities directly associated with assets held for sale | 18 | ||
Total current liabilities | |||
Total liabilities | |||
Total equity and liabilities |
Consolidated statement of changes in equity
Before profit appropriation, millions of euros | Note | Share capital | Share premium reserve | Other reserves | Retained earnings | Total |
As at 1 January 2020 | ||||||
Result after taxes 2020 | ||||||
Other comprehensive result after taxes 2020 | - | - | - | |||
Total comprehensive result after taxes 2020 | - | |||||
Cash dividend | - | - | ||||
Share-based remuneration transfers | 29 | - | - | |||
Share-based remuneration charged to result | 29 | |||||
Transfers to/from Other reserves | 19 | - | ||||
Total transactions with shareholders | - | - | ||||
Total increase (decrease) in equity | - | - | ||||
As at 31 December 2020 | ||||||
Result after taxes 2021 | ||||||
Other comprehensive result after taxes 2021 | - | - | ||||
Total comprehensive result after taxes 2021 | ||||||
Cash dividend | - | - | ||||
Share-based remuneration transfers | 29 | - | - | |||
Share-based remuneration charged to result | 29 | |||||
Transfers to/from Other reserves | 19 | - | ||||
Total transactions with shareholders | - | - | - | |||
Total increase (decrease) in equity | ||||||
As at 31 December 2021 |
Consolidated statement of cash flows
Millions of euros | Note | 2021 | 2020 |
Cash flow from operating activities | |||
Operating result | |||
Adjusted for: | |||
- Depreciation/amortization of (in)tangible fixed assets | 6 | ||
- Impairment of fixed assets | 10/12 | ||
- Result from divestments of fixed assets | - | ||
- Other adjustments for which cash effects are investing or financing cash flow | 6 | - | - |
- Share-based remuneration | |||
Total adjustments to reconcile operating result with net cash generated by (used for) operating activities | |||
Cash flow from operating activities before movements in working capital and provisions | |||
Movement in provisions | - | - | |
Movements in operating working capital: | |||
- Trade receivables | - | - | |
- Inventories | - | - | |
- Trade payables | |||
Movements in other working capital | - | - | |
Cash flow from business operations | |||
Interest received | |||
Interest paid | - | - | |
Tax paid on profit | - | - | |
Cash flow from operating activities | |||
Cash flow from investment activities | |||
Acquisition of group companies | 26 | - | |
Dividends received from joint ventures and associates | |||
Investment other financial assets | - | - | |
Repayment other financial assets | |||
Capital expenditure on (in)tangible fixed assets | - | - | |
Divestment of businesses | |||
Divestment of (in)tangible fixed assets | |||
Cash flow from investment activities | - | - | |
Cash flow from financing activities | |||
Proceeds from interest-bearing debts | |||
Repayment of interest-bearing debts | - | - | |
Payment of lease liabilities | - | - | |
Paid-out dividend | - | - | |
Cash flow from financing activities | - | ||
Net cash flow | - | ||
Effects of exchange rate differences on cash and cash equivalents | - | ||
Increase/(decrease) cash and cash equivalents | - | ||
Cash and cash equivalents at start of financial year | |||
Cash and cash equivalents at close of financial year | 17 |
Notes to the consolidated financial statements
1. Accounting information
General
Corbion is the global market leader in lactic acid and lactic acid derivatives, and a leading company in emulsifiers, functional enzyme blends, minerals, vitamins, and algae ingredients.
The company delivers high-performance sustainable ingredient solutions made from renewable resources and applied in global markets such as food, home & personal care, animal nutrition, pharmaceuticals, medical devices, and bioplastics. Its products add differentiating functionality to a wide variety of consumer products worldwide.
Corbion is based in Amsterdam, the Netherlands and listed on Euronext Amsterdam.
These consolidated financial statements cover the year 2021, which ended at the balance sheet date of 31 December 2021. The consolidated financial statements drawn up by the Board of Management have been approved by the Supervisory Board on 24 February 2022. They will be presented to the annual General Meeting of Shareholders for adoption on 18 May 2022. The Supervisory Board will give a preliminary recommendation regarding the consolidated financial statements to the annual General Meeting of Shareholders.
Reported amounts
Unless stated otherwise all amounts in the financial statements are reported in millions of euros.
Exchange rates of main currencies in euros
Average exchange rate 2021 | Average exchange rate 2020 | Exchange rate 31-12-2021 | Exchange rate 31-12-2020 | |
US dollar | 1.18 | 1.14 | 1.13 | 1.23 |
Japanese yen | 129.85 | 121.78 | 130.44 | 126.57 |
Brazilian real | 6.38 | 5.88 | 6.37 | 6.36 |
Thai baht | 37.82 | 35.68 | 37.87 | 36.77 |
2. Accounting principles
Basis of preparation
The consolidated financial statements of Corbion nv have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union.
New and amended standards adopted by the group
In 2021, Corbion applied all the new and amended standards and interpretations published by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), if and insofar as these applied to Corbion and were effective as at 1 January 2021. Corbion did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.
Accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2021 reporting periods and have not been early adopted by Corbion. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. The main effective changes after 1 January 2022 are:
-
IFRS 17 Insurance Contracts
-
Amendments to IAS 1 Presentation of Financial Statements, IFRS 3 Business Combinations; IAS 16 Property, Plant, and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets as well as Annual Improvements.
Consolidation
The consolidation includes the financial data of Corbion nv and its group companies (together “Corbion”). All inter-company receivables, debts, and transactions have been eliminated. Group companies are companies in which Corbion nv exercises control. The results of acquisitions and divestments are recognized from the moment that control is obtained or transferred.
Control is achieved when Corbion:
-
has power over the investee;
-
is exposed, or has rights to variable returns from its involvement with the investee; and
-
is able to use its power to affect the investee’s returns.
Corbion reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
When Corbion loses control over a group company, it derecognizes the assets and liabilities of the group company, and any related non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former group company is measured at fair value when control is lost.
Foreign currency
The consolidated financial statements are in euros. The euro is Corbion nv’s functional and presentation currency. The functional currency is the currency of the primary environment where the group company operates and may therefore differ from one company to another. Transactions in other than the functional currency are translated at the exchange rates that apply on the transaction date. Any monetary assets and liabilities resulting from such transactions are translated at the exchange rates as at the balance sheet date. Any exchange rate differences are recognized in the income statement, except when deferred in other comprehensive income (OCI) as qualifying cash flow hedges and net investment hedges.
The assets and liabilities of consolidated foreign group companies and the long-term foreign-currency loans, which have been taken out to finance these subsidiaries, are converted to euros as at the balance sheet date, taking taxes into account. The subsequent currency translation differences are incorporated in the translation reserve in equity. The results of the foreign group companies are translated to euros on the basis of average exchange rates. The difference between net profit on the basis of average exchange rates and net profit on the basis of the exchange rates as at the balance sheet date is incorporated in the translation reserve in equity. The same applies to exchange rate differences arising from borrowings and other financial instruments if they hedge the currency risk related to net investments. If a foreign operation is divested or scaled down the associated cumulative currency translation differences are recognized as result in the income statement.
Property, plant, and equipment
Land, buildings, machinery and equipment, and other operating assets are valued at the acquisition price or the cost of production, subject to straight-line depreciation calculated over the estimated economic life, the estimated residual value, and any accumulated impairment losses. The cost of production includes the cost of materials and direct labor and an attributable part of the indirect costs. Land and assets under construction are not depreciated. Grants are deducted from the acquisition price or the production costs of the assets to which the grant relates. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to Corbion. Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.
Leased assets and liabilities
At inception of a contract, the group assesses whether a contract conveys the right to control the use of an identified asset for a period in exchange for consideration, in which case it is classified as a lease.
The group recognizes a right-of-use asset (lease asset) and a lease liability at the lease commencement date. The asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to restore the underlying asset, less any lease incentives received.
The lease asset is subsequently depreciated using the straight-line method from the commencement date to the end of the useful life of the right-of-use asset, considered to be indicated by the lease term. The lease asset is periodically adjusted for certain remeasurements of the lease liability and impairment losses (if any).
The lease liability is initially measured at the present value of outstanding lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group’s incremental borrowing rate. Generally, Corbion uses its incremental borrowing rate as the discount rate.
The lease liability is measured at amortized cost using the effective interest method and is remeasured when there is a change in future lease payments arising from a change in an index or rate or if the group changes its assessment of whether it will exercise a purchase, extension, or termination option. A corresponding adjustment is made to the carrying amount of the right-of-use asset with any excess over the carrying amount of the asset being recognized in profit or loss.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss.
Intangible fixed assets
Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Goodwill is determined based on a comprehensive purchase price allocation analysis supported by subject matter expert calculations.
Goodwill is valued at cost less impairment. Goodwill is tested for impairment annually – or more often if there are indications for impairment. Impairment is the amount by which the book value of the goodwill of a cash-generating unit exceeds the recoverable amount, being the higher of (a) value in use and (b) fair value less cost to sell. The value in use is the present value of the cash flows which the unit is expected to generate. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. If impairment is incurred, the impairment is charged to the income statement. An impairment loss recognized for goodwill is not reversed in subsequent periods.
When an entity or activity is sold or closed down the goodwill allocated to the entity or activity is included in the calculations for the result of the sale.
Customer base
The customer base comprises the part of the paid acquisition sum which, upon acquisition, is allocated to the value of the acquired customer base. It is valued at fair value as at the acquisition date and amortized using a straight-line method over the estimated economic life. Amortization charges arising from the customer base are recognized in selling expenses.
Brands and licenses
Brands and licenses comprise the part of the paid acquisition sum which is allocated to the value of the acquired trademarks and product licenses. Brands and licenses are valued at fair value as at the acquisition date and subject to straight-line amortization calculated over the estimated economic life. Amortization charges arising from brands and licenses are recognized in selling expenses.
Research and development costs
Research and development costs comprise the part of the paid acquisition sum which is allocated to the value of the acquired research and development costs. These costs are valued at fair value as at the acquisition date. Own research costs are not capitalized, but charged to the income statement. Own development costs are capitalized if the appropriate criteria are met. Research and development costs are valued at cost and amortized using a straight-line method over the estimated economic life. Amortization charges arising from research and development costs are recognized in research and development costs.
Other intangible fixed assets
Other intangible fixed assets consist primarily of capitalized or acquired third-party software and licenses and directly attributable personnel costs.
Other intangible fixed assets are valued at historical cost if capitalized or at fair value if acquired and amortized on a straight-line basis over the estimated economic life. Software and licenses amortization charges are recognized in general and administrative expenses. Emission rights are not recognized in the statement of financial position as cost is zero.
Impairment of non-current assets other than goodwill
At each reporting date an assessment is made whether there is any indication that non-current assets may be impaired. If indicators of impairment exist, the recoverable amount of the asset is estimated.
If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which it belongs is estimated. Irrespective of whether there is any indication of impairment, Corbion also tests an intangible asset with an indefinite useful life or an intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and the asset’s value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks inherent to the asset. An impairment loss is recognized in the income statement to the amount by which the asset’s carrying amount exceeds its recoverable amount.
In subsequent years, an assessment is made whether indications exist that impairment losses previously recognized for non-current assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amount of that asset is recalculated and, if required, its carrying amount is increased to the revised recoverable amount. The increase is recognized in operating result as an impairment reversal. An impairment reversal is recognized only if it arises from a change in the assumptions that were used to calculate the recoverable amount. The increase in an asset’s carrying amount due to an impairment reversal is limited to the depreciated amount that would have been recognized had the original impairment not occurred.
Investments in joint arrangements and associates
Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. Joint operations arise where Corbion has rights to the assets and obligations relating to the arrangement and therefore accounts for its share of assets, liabilities, revenue, and expenses. Joint ventures arise where Corbion has rights to the net assets of the arrangement and therefore equity accounts for its interest.
Associates are entities over which Corbion has significant influence but not control, generally involving a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over those policies. Associates are accounted for using the equity method.
Under the equity method, investments in joint ventures and associates are measured initially at cost and subsequently adjusted for post-acquisition changes in Corbion’s share of the net assets of the investment (net of any accumulated impairment in the value of individual investments). Where necessary, adjustments are made to the financial figures of joint ventures and associates for group reporting purposes to ensure consistency with the accounting policies of Corbion.
Unrealized gains on transactions between Corbion and its joint ventures and associates are eliminated to the extent of Corbion’s stake in these investments. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred.
Deferred taxes
Deferred taxes relate to tax loss carry forward and liabilities and assets arising from temporary differences between the tax bases and their carrying amounts in the consolidated financial statements. Deferred taxes are determined using tax rates that have been enacted at the balance sheet date and are expected to apply when the related deferred income tax is realized or the deferred tax liability is settled. Deferred tax assets are recognized if and insofar that it is likely that future taxable profit will be available against which the temporary difference and tax loss carry forward can be utilized.
Tax assets and liabilities are netted when there is a legal right and the intention to offset. Deferred tax assets and liabilities with the same term and relating to the same fiscal unities and same tax authority are offset against each other.
Inventories
Inventories of raw materials, consumables, technical materials, and packaging are stated at the lower of cost (first in, first out) and net realizable value. Inventories of work in progress and finished products are stated at the lower of production cost and net realizable value. Total cost of production includes payroll costs and materials and an attributable part of the indirect production costs.
Financial instruments
Recognition and initial measurement
Trade receivables and debt securities issued are initially recognized upon origination. All other financial assets and financial liabilities are initially recognized when Corbion becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
Classification and subsequent measurement of financial assets
On initial recognition, a financial asset is classified as measured at amortized cost, at fair value through other comprehensive income (“FVOCI”) – debt investment, at FVOCI – equity investment, or at FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless Corbion changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
-
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
-
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
-
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
-
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, Corbion may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI (see above) are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
Financial assets at amortized cost are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.
Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and never reclassified to profit or loss.
Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, if it is a derivative, or designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
Derecognition
Financial assets
Corbion derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction through which substantially all of the risks and rewards of ownership of the financial asset are transferred or through which Corbion neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
If, however, Corbion enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
Financial liabilities
Corbion derecognizes a financial liability when its contractual obligations are discharged, cancelled, or expired. Corbion also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
Derivative financial instruments and hedge accounting
Corbion holds derivative financial instruments to hedge its foreign currency and commodity risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.
Corbion designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates, commodities, and certain non-derivative financial liabilities that hedge the foreign exchange risk associated with a net investment in a foreign operation.
At inception of designated hedging relationships, Corbion documents the risk management objective and strategy for undertaking the hedge. Corbion also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the hedge reserve in equity. The effective portion of changes in the fair value of the derivative that is recognized in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.
When the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in the hedge reserve and the cost of the hedge reserve are included directly in the initial cost of the non-financial item when it is recognized.
For all other hedged forecast transactions, the amount accumulated in the hedge reserve and the cost of the hedge reserve are reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument expires, is sold, terminated, or exercised, hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedge reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss for the period(s) in which the hedged expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, the amounts that have been accumulated in the hedge reserve and the cost of the hedge reserve are immediately reclassified to profit or loss.
Net investment hedges
When a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge for a net investment in a foreign operation, the effective portion, for a derivative, of changes in the fair value of the hedging instrument or, for a non-derivative, of foreign exchange gains and losses is recognized in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognized immediately in profit or loss. The amount recognized in other comprehensive income is reclassified to profit or loss as a reclassification adjustment upon disposal of the foreign operation.
Equity
Incremental costs directly attributable to the issue of ordinary shares and share options are recognized as an equity deduction, net of tax. The price paid for repurchased shares (treasury shares) is deducted from equity until the shares are cancelled or reissued. Dividend to be distributed to the holders of ordinary shares is recognized as a liability upon approval of the profit appropriation by the annual General Meeting of Shareholders.
Corbion runs share plans for the Board of Management and senior management. The fair value of the right to shares on the date of allocation is recognized in the income statement as payroll costs over the vesting period of the awards with a corresponding increase in equity.
Pension and other post-employment benefits
Pension and early-retirement schemes
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate pension plan or insurance company and will have no legal or constructive obligation to pay further amounts. Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurements, comprising actuarial gains and losses, the effect of changes to the asset ceiling (if applicable), and the return on plan assets (excluding interest), are reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income for the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past-service costs are recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
-
Service cost (including current-service cost, past-service cost, as well as gains and losses on curtailments and settlements)
-
Net interest expense or income
-
Remeasurements
The first two components of defined benefit costs are presented in profit or loss. Curtailment gains and losses are accounted for as past-service costs.
The retirement benefit obligation in the consolidated statement of financial position represents the actual deficit or surplus in the defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
Corbion accounts for its multi-employer defined benefit plan as if it were a defined contribution plan for the following reasons:
-
Corbion is affiliated to an industry-wide pension fund and uses the pension scheme in common with other participating companies.
-
Under the regulations of the pension plan, the only obligation these participating companies have towards the pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever to pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses.
Other long-term employee benefit commitments
The other long-term employee commitments relate mainly to anniversary commitments, past-service commitments, conditional incentive plans, and health insurance. These provisions are recognized on the basis of estimates that are consistent with the estimates used for the defined benefit obligations. However, all actuarial gains and losses are recognized in the income statement immediately.
Provisions
Provisions relate to a legal or constructive obligation as a result of a past event, the amount of which is uncertain but can be estimated reliably and of which it is more likely than not that an outflow of resources is required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flow at a pre-tax rate that reflects the current market assessments of time value of money and the risks specific to the liability. A provision for reorganization is recognized after Corbion has approved a detailed and formal restructuring plan and the restructuring has either commenced or been announced publicly. A provision for a legal claim is recognized if a reliable estimate can be made of the expected outcome of the claim, measuring the claim as a weighting of all possible outcomes against their probabilities. A provision for an onerous contract is recognized when the expected benefits to be derived from the contract are lower than the unavoidable costs of fulfilling its terms and conditions. Unless the possibility of an outflow of resources embodying economic benefits is remote, a contingent liability is disclosed at the balance sheet.
Liabilities
Interest-bearing liabilities are recognized initially at fair value and subsequently at amortized cost using the effective interest method. Upon sale or settlement of interest-bearing liabilities any profits or losses are directly recognized in the income statement.
Segment reporting
An operating segment is an entity that engages in business activities from which it earns revenues and incurs expenses. All operating segments are reviewed regularly by the Board of Management to make decisions about resources to be allocated to the segments and assess their performance for which discrete financial information is available.
Net sales
Net sales comprises the proceeds of goods delivered to third parties less discounts and value-added tax.
Revenue from the sale of goods in the normal course of business is recognized at a point in time when the performance obligation is met and based on the amount of the transaction price that is allocated to the performance obligation. The transaction price is the amount of the consideration to which the company expects to be entitled in exchange for transferring the promised goods to the customer. The consideration expected by the company may include fixed and/or variable amounts which can be impacted by sales returns, trade discounts, and volume rebates. Revenue from the sale of goods is recognized when control of the asset is transferred to the buyer and only when it is highly probable that a significant reversal of revenue will not occur as uncertainties related to a variable consideration have been resolved.
Costs of sales
Cost of sales contains the following components:
-
Costs of raw materials and consumables which relate to the cost of consumption of raw materials, consumables, and packaging materials. Costs of raw materials and consumables are recognized in the income statement when the risks and rewards of ownership of the goods sold have been transferred to a party outside the group. These costs include the purchase price of all raw materials, consumables, and all directly attributable costs.
-
Production costs which are the costs relating to production operations.
-
Warehousing and distribution costs which relate to the costs of warehousing and transport, including transport insurance.
Selling expenses
Selling expenses relate to the costs of marketing and sales.
General and administrative expenses
General and administrative expenses relate to the costs of administration, management, and IT.
Financial income and charges
Financial income comprises interest income on cash and cash equivalents and interest income on loans to other parties. Interest income is recognized in the period to which it relates, using the effective interest method.
Financial charges comprise interest expenses and exchange differences on borrowings, leases, impairments of available-for-sale assets, and other financial expenses. All borrowing costs are recognized in the income statement using the effective interest method.
Income taxes
Tax on the result is calculated on the basis of the result before taxes, taking account of untaxed profit elements, non- and part-deductible costs, and fiscal facilities. The prevailing nominal tax rates are applied. Non-recoverable withholding taxes on foreign dividends are taken into account.
Taxes in the income statement for the year comprise current and deferred taxes. Taxes are recognized in the income statement unless they relate to items directly recognized in equity or other comprehensive income. Current tax is the expected tax rate payable on the taxable income for the year, using statutory tax rates at the balance sheet date, and any adjustment to tax payable in respect of previous years. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. Corbion measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
Cash flow statement
The consolidated cash flow statement is drawn up using the indirect method. The items in the consolidated income statement and consolidated statement of the financial position have been adjusted for changes that do not impact cash inflow and outflow in the reporting year. Cash flows in foreign currencies are translated to the functional currency at the average foreign exchange rates unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case cash flows are translated at the rate on the dates of the transactions.
Critical accounting estimates and judgments
Corbion makes use of accounting estimates and judgments. The inputs into our estimates and assumptions consider the economic implications of COVID-19 on our critical accounting estimates. Corbion believes that the critical accounting estimates and assumptions are appropriate in light of the increased uncertainties surrounding the severity and duration of the impact of COVID-19 and will continue to monitor the impacts of COVID-19 and incorporate them into accounting estimates.
Described below are the estimates and judgments as at the balance sheet date that carry a substantial risk of a material adjustment to the book value of assets and liabilities in the next financial year.
Acquisitions
Corbion has a process in place to identify all assets and liabilities acquired, including intangible fixed assets. The judgments made in identifying all acquired assets, determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the results of operations. Estimated fair values are based on information available around the acquisition date and on expectations and assumptions of anticipated discounted cash flows that have been assessed as reasonable by Corbion. For more information on acquisitions see Note 26.
Goodwill impairment
Every year, Corbion tests the goodwill for impairment based on the higher of fair value less cost to sell and the value-in-use method. The value in use is calculated on the basis of estimates and judgments of the expected cash flows which are discounted on a WACC basis. For a description of the main estimates, valuation assumptions, and a sensitivity analysis of the applied assumptions see Note 12.
Valuation and impairment testing (in)tangible fixed assets
(In)tangible fixed assets are tested for sustained impairment if there is an indication of possible impairment. This applies to intangible assets with indefinite useful lives or assets not yet available for use. A key factor is the recoverable amount which is calculated on the basis of estimates and assumptions of anticipated discounted cash flows, on the one hand, and an estimate of the fair value less cost to sell, on the other. For more information on impairments see Notes 10 and 12.
Pension and early-retirement schemes
Actuarial calculations are used to determine provisions for group personnel arrangements and net receivables or obligations from group pension plans. These calculations use assumptions in respect of future developments in salary, mortality, staff turnover, return on investments et cetera. Changes to these estimates and assumptions can lead to actuarial gains and losses which are recognized in the consolidated statement of comprehensive income. For more information on the applied assumptions see Note 21.
Taxes
Corbion is subject to various tax systems across the world. Estimates and judgments are used to determine the tax items in the financial statements. Interpretation differences in tax liabilities are also taken into account. For more information on taxes see Note 22.
3. Consolidated income statement adjustments
The adjusted consolidated income statement for financial years 2021 and 2020 (non-IFRS financial measures) can be presented as follows.
2021 | 2020 | |||||
Adjusted figures | Adjustments | IFRS figures | Adjusted figures | Adjustments | IFRS figures | |
Net sales | 1,070.8 | 1,070.8 | 986.5 | 986.5 | ||
Cost of sales | -801.8 | -3.2 | -805.0 | -710.6 | -6.1 | -716.7 |
Gross profit | 269.0 | -3.2 | 265.8 | 275.9 | -6.1 | 269.8 |
Selling expenses | -66.1 | -1.4 | -67.5 | -62.0 | -0.7 | -62.7 |
Research and development costs | -42.6 | -23.2 | -65.8 | -37.2 | -37.2 | |
General and administrative expenses | -88.6 | 3.1 | -85.5 | -78.2 | -1.7 | -79.9 |
Other proceeds | 35.0 | 35.0 | 14.1 | 14.1 | ||
Operating result | 71.7 | 10.3 | 82.0 | 98.5 | 5.6 | 104.1 |
Less: depreciation/amortization/impairment (in)tangible fixed assets | 64.1 | 25.3 | 89.4 | 60.3 | 1.3 | 61.6 |
EBITDA | 135.8 | 35.6 | 171.4 | 158.8 | 6.9 | 165.7 |
Depreciation/amortization/impairment (in)tangible fixed assets | -64.1 | -25.3 | -89.4 | -60.3 | -1.3 | -61.6 |
Operating result | 71.7 | 10.3 | 82.0 | 98.5 | 5.6 | 104.1 |
Financial income | 1.9 | 0.5 | 2.4 | 3.0 | 3.0 | |
Financial charges | -16.6 | -16.6 | -22.2 | -1.7 | -23.9 | |
Results from joint ventures and associates | 18.5 | 0.2 | 18.7 | 10.5 | -6.0 | 4.5 |
Result before taxes | 75.5 | 11.0 | 86.5 | 89.8 | -2.1 | 87.7 |
Taxes | -15.8 | 7.6 | -8.2 | -12.9 | -1.7 | -14.6 |
Result after taxes | 59.7 | 18.6 | 78.3 | 76.9 | -3.8 | 73.1 |
Adjustments relate to significant items in the income statement of such size, nature, or incidence that in view of management require disclosure to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. These items include amongst others write-down of inventories to net realizable value, reversals of write-downs, impairments, reversals of impairments, additions to and releases from provisions for restructuring and reorganization, results on assets sold, gains on the sale of subsidiaries, joint ventures and associates, and any other provision being formed or released. Restructuring costs are defined as the estimated costs of initiated reorganizations, which have been approved by the Executive Committee, and which generally involve the realignment of certain parts of the organization. The company only adjusts for items when the aggregate amount of the events per line item of the income statement exceeds a yearly threshold of € 0.5 million as well as adjustments, each above € 0.1 million, in relation to previously recognized adjustments.
In 2021, total adjustments of € 18.6 million were recorded, consisting of the following components:
-
Gain of € 18.4 million related to the sale of a plot of land in the Dutch municipality of Breda.
-
Gain of € 11.3 million related to the sale of the Frozen Dough activities.
-
Gain of € 6.1 million related to recognition of VAT receivable positions in Brazil.
-
Gain of € 2.9 million related to received insurance proceeds for inventory write-down in prior years.
-
Loss of € 16.6 million related to an impairment on the FiberLive development, partly compensated by a release of a contingent liability related to FiberLive.
-
Loss of € 3.7 million related to an impairment on the FDCA development.
-
Loss of € 2.9 million related to incremental cost as a result of the production outage in our Blair facility.
-
Loss of € 1.3 million related to settlement of a tax claim in the US and to de-risk a defined benefit pension scheme.
-
Loss of € 0.9 million related to the acquisition of Granotec Mexico.
-
Loss of € 0.8 million related to restructuring costs.
-
Loss of € 0.7 million as a result of litigation claims.
-
Loss of € 0.6 million related to demolition costs.
-
Fair value adjustment of € 0.2 million on the contingent consideration payable related to the Algae acquisition.
-
Tax effects on the above of € 7.6 million.
In 2020, total adjustments of € 3.8 million were recorded, consisting of the following components:
-
Gain of € 6.9 million related to the remeasurement of the sales price of the subsidiary Total Corbion PLA (Thailand) Limited to the joint venture Total Corbion PLA bv. The amount consists of a gain of € 12.9 million positive reported in Other proceeds, partly offset by a loss of € 6.0 million reported in Results from joint ventures and associates.
-
Loss of € 4.6 million related to a write-down of inventory in our Algae Ingredients business.
-
Loss of € 4.4 million as a result of a provision for a tax claim after a US tax audit.
-
Loss of € 1.3 million related to an impairment of assets for preparation of the new lactic acid plant in Thailand.
-
Loss of € 1.3 million related to restructuring costs.
-
Loss of € 0.9 million related to advice costs for a US tax audit and to de-risk a defined benefit pension scheme.
-
Loss of € 0.3 million related to inventory write down in the US.
-
Tax effects on the above of € 2.1 million.
4. Segment information
In line with the management responsibilities and internal management reporting for its strategic decision-making process Corbion distinguishes between the segments Sustainable Food Solutions, Lactic Acid & Specialties and Incubator (together "Core"), and Non-core.
In Sustainable Food Solutions, Corbion has evolved increasingly from an ingredients business into a solutions business. We plan to expand on this solutions model with natural food preservation and functional systems as our core capabilities, enabling us to accelerate growth in close adjacencies.
In our Lactic Acid & Specialties business, we aim to capitalize on our market and technology leadership in lactic acid and lactic acid derivatives. Corbion leads the lactic acid market in technology, production capacity, geographic coverage, and breadth of portfolio.
In our Incubator, where we develop early-stage initiatives, the three main initiatives are: Algae-based omega-3, algae ingredients, and our co-polymers platform. This platform is a lactic acid-based controlled-release co-polymers technology, expanding on our (medical) polymer expertise.
Non-core activities comprise emulsifiers which will have a declining strategic fit going forward and will be managed for value.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.
Segment information by business area
Sustainable Food Solutions | Lactic Acid & Specialties | Incubator | Core 1 | Non-core | Corbion total operations | |||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
Income statement information | ||||||||||||
Net sales | 584.2 | 545.8 | 312.3 | 275.8 | 30.7 | 13.4 | 927.2 | 835.0 | 143.6 | 151.5 | 1,070.8 | 986.5 |
Operating result | 47.1 | 59.8 | 35.8 | 59.6 | -18.2 | -24.3 | 64.7 | 95.1 | 17.3 | 9.0 | 82.0 | 104.1 |
Adjustments to operating result | -13.6 | 1.2 | 10.3 | -12.8 | 0.7 | 1.0 | -2.6 | -10.6 | -7.7 | 5.0 | -10.3 | -5.6 |
Adjusted operating result | 33.5 | 61.0 | 46.1 | 46.8 | -17.5 | -23.3 | 62.1 | 84.5 | 9.6 | 14.0 | 71.7 | 98.5 |
Alternative non-IFRS performance measures | ||||||||||||
EBITDA | 82.9 | 92.4 | 71.8 | 74.2 | -12.4 | -19.4 | 142.3 | 147.2 | 29.1 | 18.5 | 171.4 | 165.7 |
Adjustments to EBITDA | -13.6 | 0.3 | -11.3 | -13.2 | 0.7 | 1.0 | -24.2 | -11.9 | -11.4 | 5.0 | -35.6 | -6.9 |
Adjusted EBITDA | 69.3 | 92.7 | 60.5 | 61.0 | -11.7 | -18.4 | 118.1 | 135.3 | 17.7 | 23.5 | 135.8 | 158.8 |
Ratios alternative non-IFRS performance measures | ||||||||||||
EBITDA margin % | 14.2 | 16.9 | 23.0 | 26.9 | -40.4 | -144.8 | 15.3 | 17.6 | 20.3 | 12.2 | 16.0 | 16.8 |
Adjusted EBITDA margin % | 11.9 | 17.0 | 19.4 | 22.1 | -38.1 | -137.3 | 12.7 | 16.2 | 12.3 | 15.5 | 12.7 | 16.1 |
- 1 Includes Sustainable Food Solutions, Lactic Acid & Specialties, and Incubator
Corbion generates almost all of its revenues from the sale of goods.
Information on the use of alternative non-IFRS performance measures
In the above table and elsewhere in the financial statements a number of non-IFRS performance measures are presented. Management is of the opinion that these so-called alternative performance measures might be useful for the readers of these financial statements. Corbion management uses these performance measures to make financial, operational, and strategic decisions and evaluate performance of the segments. The alternative performance measures can be calculated as follows:
-
EBITDA is the operating result before depreciation, amortization, and impairment of (in)tangible fixed assets.
-
EBITDA margin is EBITDA divided by net sales x 100.
For a full overview of alternative performance measures used by Corbion, reference is made to the 'Other information' section.
Segment information by geographical region
Net sales | ||
2021 | 2020 | |
The Netherlands | 24.9 | 22.0 |
Rest of EMEA | 191.8 | 171.1 |
US | 499.2 | 478.5 |
Rest of North America | 77.4 | 67.4 |
Latin America | 83.7 | 76.7 |
Asia | 193.8 | 170.8 |
Corbion total operations | 1,070.8 | 986.5 |
The above sales information is based on the location of the end customer.
Non-current assets | ||
2021 | 2020 | |
The Netherlands | 197.0 | 192.4 |
Rest of EMEA | 27.2 | 23.4 |
US | 259.0 | 218.5 |
Rest of North America | 9.4 | 0.2 |
Brazil | 73.4 | 67.8 |
Thailand | 144.8 | 83.9 |
Rest of Asia | 3.2 | 1.3 |
Corbion total operations | 714.0 | 587.5 |
The above information is based on the geographical location of the assets. Non-current assets exclude those relating to financial instruments, deferred tax assets, and post-employment benefit assets.
5. Net sales disaggregation
Net sales | ||
2021 | 2020 | |
Preservation | 248.2 | 234.4 |
Functional systems | 256.4 | 236.0 |
Single ingredients | 79.6 | 75.4 |
Sustainable Food Solutions | 584.2 | 545.8 |
Lactic acid | 147.4 | 117.7 |
Lactate esters | 55.8 | 53.7 |
Lactates | 44.0 | 43.7 |
Biopolymers | 37.3 | 32.2 |
Other | 27.8 | 28.5 |
Lactic Acid & Specialties | 312.3 | 275.8 |
Incubator | 30.7 | 13.4 |
Non-core activities | 143.6 | 151.5 |
Corbion total operations | 1,070.8 | 986.5 |
6. Income and expenses
Other gains and losses
2021 | 2020 | |
Bookprofit on sale of a plot of land in the Dutch municipality of Breda | 18.4 | |
Bookprofit on sale of the Frozen Dough activities | 11.8 | |
Release of milestone as a result of impairment on the FiberLive development | 5.0 | |
Result remeasurement of the sales price of the subsidiary Total Corbion PLA (Thailand) Limited to the joint venture Total Corbion PLA bv | 12.9 | |
Insurance proceeds | 1.2 | |
Remeasurement contingent purchase price SB Renewable Oils | -0.2 | |
Total | 35.0 | 14.1 |
Payroll and social insurance
2021 | 2020 | |
Payroll | 169.5 | 158.8 |
Pension expenses – defined benefit pension plans | 0.5 | 0.6 |
Pension expenses – defined contribution pension plans | 13.0 | 12.2 |
Other social insurance | 18.1 | 16.9 |
Share-based remuneration | 3.5 | 3.9 |
Total | 204.6 | 192.4 |
Depreciation/amortization/impairment of (in)tangible fixed assets
2021 | 2020 | |
Depreciation of property, plant, and equipment | 51.0 | 50.1 |
Amortization of intangible fixed assets | 13.1 | 10.2 |
Impairment of (in)tangible fixed assets | 25.3 | 1.3 |
Total | 89.4 | 61.6 |
8. Taxes
2021 | 2020 | |
Current tax | 10.6 | 18.5 |
Current tax (prior-year adjustments) | -0.6 | -1.9 |
Deferred tax | -1.8 | -2.0 |
Tax charge (income) | 8.2 | 14.6 |
Reconciliation of result before taxes and tax charge
2021 | 2020 | |
Result before taxes | 86.5 | 87.7 |
Applicable tax charge at average statutory tax rate | 21.4 | 20.7 |
Income not subject to tax | -7.6 | -7.8 |
Expenses not deductible for tax purposes | 2.4 | 2.2 |
Effect of the reversal of tax assets | -8.1 | 1.5 |
Currency effects | 1.9 | -5.1 |
Additions to/releases from tax provision | -0.9 | 3.6 |
Changes in tax rates | -0.5 | 0.3 |
Other effects | -0.4 | -0.8 |
Tax charge (income) | 8.2 | 14.6 |
Average tax rate on operations | 9.5% | 16.6% |
The average statutory tax rate is the average of the statutory tax rates in the countries where Corbion operates, weighted on the basis of the result before taxes in each of these countries.
The main impact of income not subject to tax is caused by the positive result recognized with respect to the joint venture with TotalEnergies which is not subject to tax under the provisions of the participation exemption (impact € -4.7 million). The impact of investments deductions and other non-taxable income amount to € -2.9 million.
Expenses not deductible for tax purposes include the effect of non-deductible costs in multiple jurisdictions (impact € 2.4 million).
The effect of the reversal of tax assets is mainly caused by the recognition of a previously unrecognized deferred tax asset which materialized as a result of the sale of a plot of land in the municipality of Breda. (impact € -9.3 million). Other effects are the write-off of tax credits which cannot be effectively utilized (impact € 1.7 million), and the release of the reversal of tax assets in other jurisdictions (impact € -0.5 million).
The impact of currency effects (€ 1.9 million) is caused by reporting entities which have a tax reporting currency which deviates from their functional currency.
The release of the tax provision relates to the finalization of a tax audit and the subsequent release of part of the provision which has been formed in respect thereof.
The change in tax rates in 2021 is caused by the increase of the Dutch corporate income rate from 25% to 25.8% as per 1 January 2022.
Other effects include adjustments in respect of current-year events and the impact of changes to relevant regulations, facts, or other factors compared to those used in establishing the current tax position or deferred tax balance in previous years (impact € -0.4 million).
The difference between the average tax rates 2021 (9.5%) and 2020 (16.6%) is mainly attributable to the effect in 2021 of the recognition of the previously unrecognized deferred tax asset which materialized as a result of the sale of the plot of land in Breda.
The realization of deferred tax assets depends on the expected future profitability. Deferred tax assets are not recognized if it is not probable that a tax benefit can be realized.
Breakdown of the tax charge recognized in equity
2021 | 2020 | |
Tax liability due to loan-related exchange rate differences | -4.5 | 1.3 |
Tax liability due to hedge results of financial instruments | 0.9 | 1.3 |
Tax charge (income) recognized in equity | -3.6 | 2.6 |
9. Earnings per ordinary share
Earnings per ordinary share are calculated by dividing the profit available for holders of ordinary shares by the weighted average number of outstanding ordinary shares in Corbion nv.
Diluted earnings per ordinary share are calculated by dividing the profit available for holders of ordinary shares by the weighted average number of outstanding ordinary shares in Corbion nv adjusted for the effects of potential exercise of share rights by the Board of Management and senior management.
2021 | 2020 | |
Result after taxes | 78.3 | 73.1 |
Profit available for holders of ordinary shares (A) | 78.3 | 73.1 |
Weighted average number of outstanding ordinary shares (B) | 58.9 | 58.9 |
Plus: ordinary shares related to share rights | 0.5 | 0.6 |
Weighted average number of outstanding ordinary shares after dilution (C) | 59.4 | 59.5 |
Per ordinary share in euros | ||
Basic earnings (A/B) | 1.33 | 1.24 |
Diluted earnings (A/C) | 1.32 | 1.23 |
10. Property, plant, and equipment
Land | Buildings | Machinery and equipment | Other fixed assets | Under construction | Total | |
1 January 2020 | ||||||
Acquisition prices | 20.0 | 195.2 | 669.0 | 71.6 | 58.8 | 1,014.6 |
Cumulative depreciation/impairments | -81.6 | -524.4 | -40.4 | -646.4 | ||
Book value | 20.0 | 113.6 | 144.6 | 31.2 | 58.8 | 368.2 |
Movements | ||||||
Capital expenditure | 0.9 | 0.5 | 71.9 | 73.3 | ||
Divestments | -0.1 | -0.1 | ||||
Exchange rate differences | -1.8 | -13.8 | -10.1 | -5.2 | -7.4 | -38.3 |
Depreciation | -6.4 | -26.9 | -4.4 | -37.7 | ||
Impairment | -1.3 | -1.3 | ||||
Assets classified as held for sale | -3.9 | -1.9 | -2.9 | -8.7 | ||
Other | 1.2 | 61.4 | -3.5 | -59.1 | ||
Net movement in book value | -5.7 | -22.2 | 22.4 | -12.7 | 5.4 | -12.8 |
31 December 2020 | ||||||
Acquisition prices | 14.3 | 178.6 | 653.3 | 65.9 | 64.2 | 976.3 |
Cumulative depreciation/impairments | -87.2 | -486.3 | -47.4 | -620.9 | ||
Book value | 14.3 | 91.4 | 167.0 | 18.5 | 64.2 | 355.4 |
Movements | ||||||
Capital expenditure | 0.1 | 0.7 | 0.4 | 149.7 | 150.9 | |
Divestments | -0.9 | -0.1 | -1.0 | |||
Exchange rate differences | 1.6 | 4.0 | 0.2 | 1.9 | 7.7 | |
Acquisition of group companies | 0.3 | 0.2 | 0.5 | |||
Depreciation | -6.0 | -30.1 | -4.1 | -40.2 | ||
Impairment | -2.0 | -2.0 | ||||
Assets classified as held for sale | -0.6 | -0.5 | -1.1 | |||
Other | 0.6 | 11.2 | 45.9 | 0.7 | -61.8 | -3.4 |
Net movement in book value | 6.4 | 17.9 | -2.7 | 89.8 | 111.4 | |
31 December 2021 | ||||||
Acquisition prices | 14.3 | 189.8 | 707.0 | 63.6 | 154.0 | 1,128.7 |
Cumulative depreciation/impairments | -92.0 | -522.1 | -47.8 | -661.9 | ||
Book value | 14.3 | 97.8 | 184.9 | 15.8 | 154.0 | 466.8 |
Depreciation rates | 2.5 - 4% | 6.7-12.5% | 20-50% |
The 'Other' line item relates to transfers from Under construction to other categories within Property, plant, and equipment and transfers to Intangible fixed assets and Inventories.
The impairment recorded in 2021 relates to the FiberLive development. An impairment has been recorded of € 2.0 million, reported on the income statement line item 'Cost of sales'. Further, an impairment of € 19.6 million has been recorded on Intangible fixed assets related to the FiberLive development for which reference is made to Note 12.
For the Algae Ingredients business, management has identified triggers to reassess the valuation of tangible fixed assets because of developments in the WACC. The cash flow projections are derived from the financial and business plans for 2022 which have been approved by the Board of Management. The key assumptions in the cash flow projections are related to revenue projections, EBITDA developments, the rates used for discounting cash flows and the terminal growth rate. In 2021 no additional impairment loss or a reversal of an impairment was recognized.
11. Leases
Right-of-use assets
Land | Buildings | Machinery and equipment | Other fixed assets | Total | |
Book value 31 December 2020 | 0.2 | 44.7 | 0.9 | 5.3 | 51.1 |
Additions | 2.9 | 1.0 | 2.5 | 6.4 | |
Modification to lease term | 14.9 | 0.2 | 15.1 | ||
Exchange rate differences | 4.0 | 0.1 | 4.1 | ||
Acquisition of group companies | 0.2 | 0.2 | |||
Depreciation | -7.1 | -0.8 | -2.9 | -10.8 | |
Book value 31 December 2021 | 0.2 | 59.6 | 1.1 | 5.2 | 66.1 |
Lease liabilities
The maturity of the lease liabilities is as follows.
As at 31-12-2021 | As at 31-12-2020 | |
Current | 9.9 | 9.0 |
Non-current | 59.5 | 44.9 |
Total lease liabilities | 69.4 | 53.9 |
Corbion's main leases are contracts for office locations, warehouses, and leased vehicles (the main category in Other fixed assets). Some property leases contain extension options exercisable by Corbion. Corbion assesses at the lease commencement date whether it is reasonably certain that the extension options will be exercised. Corbion reassesses whether it is reasonably certain that the extension options will be exercised if there is a significant event or significant change in circumstances within its control. As at 31 December 2021, potential future cash outflows of € 67.8 million (undiscounted) have not been included in the lease liability because it is not reasonably certain that the leases will be extended. Lease payments are in substance fixed and the group had no leases with variable lease payments.
12. Intangible fixed assets
Goodwill | Customer base | Brands and licenses | Development costs | Other intangible fixed assets | Total | |
1 January 2020 | ||||||
Acquisition prices | 83.8 | 26.0 | 34.1 | 56.5 | 52.3 | 252.7 |
Cumulative amortization/impairments | -3.4 | -17.2 | -8.9 | -25.0 | -25.3 | -79.8 |
Book value | 80.4 | 8.8 | 25.2 | 31.5 | 27.0 | 172.9 |
Movements | ||||||
Capital expenditure | 2.6 | 13.7 | 16.3 | |||
Exchange rate differences | -10.3 | -2.2 | -0.2 | -0.3 | -0.3 | -13.3 |
Amortization | -1.8 | -0.5 | -2.4 | -5.5 | -10.2 | |
Net movement in book value | -10.3 | -4.0 | -0.7 | -0.1 | 7.9 | -7.2 |
31 December 2020 | ||||||
Acquisition prices | 73.2 | 22.6 | 33.2 | 41.6 | 64.9 | 235.5 |
Cumulative amortization/impairments | -3.1 | -17.8 | -8.7 | -10.2 | -30.0 | -69.8 |
Book value | 70.1 | 4.8 | 24.5 | 31.4 | 34.9 | 165.7 |
Movements | ||||||
Capital expenditure | 2.6 | 11.5 | 14.1 | |||
Exchange rate differences | 4.5 | 0.1 | 0.2 | 0.5 | 0.2 | 5.5 |
Acquisition of group companies | 3.1 | 2.0 | 0.1 | 2.9 | 8.1 | |
Amortization | -0.8 | -0.5 | -3.3 | -8.5 | -13.1 | |
Impairment | -19.9 | -3.4 | -23.3 | |||
Other | 0.9 | 0.9 | ||||
Net movement in book value | 7.6 | 1.3 | -20.1 | -0.7 | 4.1 | -7.8 |
31 December 2021 | ||||||
Acquisition prices | 81.0 | 25.6 | 34.1 | 47.9 | 75.5 | 264.1 |
Cumulative amortization/impairments | -3.3 | -19.5 | -29.7 | -17.2 | -36.5 | -106.2 |
Book value | 77.7 | 6.1 | 4.4 | 30.7 | 39.0 | 157.9 |
Amortization rates | 7 - 20% | 5 - 10% | 5 - 33.3% | 33.3% |
The 'Other' line item relates to transfers from Property, plant, and equipment.
Goodwill impairment test
Goodwill is allocated to Corbion's cash-generating units identified as the operating segments. The operating segments Sustainable Food Solutions and Lactic Acid & Specialties represent the levels to which company goodwill is allocated for the purposes of impairment testing. Incubator does not contain any goodwill.
Key reasons for this approach are:
-
It represents a non-arbitrary, reasonable, and consistent basis for the allocation of goodwill.
-
The allocation is in line with the expected synergies at the time of an acquisition with benefits for more than one entity.
-
The allocation represents the lowest level where goodwill is monitored by the Board of Management, while not being larger than the operating segments.
Breakdown of the book value of the goodwill by segment
As at 31-12-2021 | As at 31-12-2020 | |
Sustainable Food Solutions | 75.5 | 67.9 |
Lactic Acid & Specialties | 2.2 | 2.2 |
Total operations | 77.7 | 70.1 |
The recoverable amount of both segments is determined using a value-in-use method. The main assumptions used are derived from the financial and business plans for 2022 which have been approved by the Board of Management. From 2023 onwards a stable growth of 1% is taken into account in combination with a relatively constant cost structure.
The future cash flows are discounted on the basis of the WACC before tax.
Overview of the WACC used
As at 31-12-2021 | As at 31-12-2020 | |||
pre-tax | post-tax | pre-tax | post-tax | |
Sustainable Food Solutions | 6.9% | 5.8% | 8.2% | 6.7% |
Lactic Acid & Specialties | 7.2% | 5.8% | 8.5% | 6.7% |
In addition, sensitivity analyses have been carried out in respect of the assumptions using:
-
A terminal value growth of 0%.
-
A discount rate of +1%.
Both assumptions applicable at the same time would not lead to any impairment.
Given the above assumptions and the outcome of analyses, the Board of Management has concluded that the value in use of both segments is not lower than the book value of the segments including goodwill.
Impairment testing other intangible fixed assets
In 2021, the following impairments were recorded:
FiberLive
A partial impairment of € 19.6 million (recorded partly in the 'Brands and licenses' and partly in the 'Development costs' category) related to our FiberLive activities (part of the Lactic Acid & Specialties segment). This was based on a reassessment of volume development and timing due to slower than expected technological developments. The impairment on the intangible fixed assets has been recorded on the income statement line item 'Research and development costs'. Further, an impairment of € 2.0 million on Property, plant, and equipment has been recorded on the income statement line item 'Cost of sales' for which reference is made to Note 10.
The post-tax discount rate used is 5.8%. No terminal growth rate has been applied. The recoverable amount (based on value in use) of the projected cash flows underlying the impairment calculation amounts to € 2.4 million and is sensitive to various assumptions, especially the volume, technological and price development.
FDCA
A full impairment of € 3.8 million (recorded in the 'Brands and licenses' category) related to our FDCA business (part of the Incubator segment) based on a reassessment of volume development and timing due to slower than expected technological developments. The impairment has been recorded on the income statement line item 'Research and development costs'.
13. Investments in joint ventures and associates
Set out below is the joint venture of the group as at 31 December 2021 which, in the opinion of management, is material to the group. The entity listed below has share capital consisting solely of ordinary shares, which are held directly by the group. The proportion of ownership interest is the same as the proportion of voting rights held.
Name of entity | Country of incorporation | % of ownership interest | Nature of relationship | Measurement method | Carrying amount | |
2021 | 2020 | |||||
Total Corbion PLA bv | The Netherlands | 50% | Joint venture | Equity method | 23.2 | 15.2 |
Total Corbion PLA is a global leader in marketing, sale, and production of Polylactic Acid (PLA). The principal places of business are the Netherlands for marketing and sales activities and Thailand for the main production activities.
As it is a private entity no quoted fair value price is available.
The tables below provide summarized financial information on the joint ventures and associates that are material to the group. The information disclosed reflects the amounts presented in the financial statements of the respective joint ventures and associates, rather than Corbion's share of those amounts. They have been amended to reflect adjustments made by the entity when using the equity method, including fair value adjustments and modifications for differences in accounting policy.
Summarized balance sheet
Total Corbion PLA bv | 2021 | 2020 |
Current assets | ||
Cash and cash equivalents | 31.7 | 29.0 |
Other current assets | 63.3 | 32.7 |
Total current assets | 95.0 | 61.7 |
Non-current assets | 128.1 | 111.5 |
Current liabilities | ||
Other current liabilities | 44.5 | 23.1 |
Total current liabilities | 44.5 | 23.1 |
Non-current liabilities | 129.2 | 119.8 |
Net assets | 49.4 | 30.3 |
Reconciliation to carrying amounts | ||
Opening net assets | 30.3 | 30.0 |
Comprehensive income for the period | 32.8 | 16.2 |
Dividends declared | -16.9 | -13.1 |
Exchange rate differences | 3.2 | -2.8 |
Closing net assets | 49.4 | 30.3 |
Group's share (50%) | 24.7 | 15.2 |
Elimination of unrealised profit on downstream sales | -1.5 | |
Carrying amount | 23.2 | 15.2 |
Summarized statement of comprehensive income | ||
Revenue | 159.8 | 129.3 |
Operating result | 47.8 | 42.0 |
Depreciation and amortization | -6.8 | -5.7 |
Interest expense | -4.0 | -5.2 |
Income tax expense | -10.9 | -8.5 |
Profit for the period | 32.9 | 16.3 |
Other comprehensive income | -0.1 | -0.1 |
Total comprehensive income | 32.8 | 16.2 |
Dividends received by Corbion | 4.2 | 4.4 |
The agreement between shareholders stipulates an equal distribution of dividends between shareholders. For 2020 and 2021, the shareholders agreed to an uneven distribution, in such a way that the shareholders will each receive an equal cumulative amount of (interim) dividend over those two years, but that amounts per shareholder in an individual year can differ.
In December 2021 a dividend of $ 15 million was declared (of which $ 7.5 million to be distributed to Corbion) which will be received in 2022.
The table below shows the balances for joint ventures that are not considered material to the group.
2021 | 2020 | |
Carrying amount of interests | 0.1 | |
Share of total profit or loss | -1.6 |
15. Inventories
As at 31-12-2021 | As at 31-12-2020 | |
Raw materials, consumables, technical materials, and packaging | 56.7 | 46.8 |
Work in progress | 11.2 | 9.0 |
Finished product | 167.0 | 113.6 |
Impairment provision | -4.9 | -4.6 |
Total | 230.0 | 164.8 |
This increase in inventories is a result of higher raw material prices, higher safety stocks, and longer lead times in the supply chain.
16. Receivables
As at 31-12-2021 | As at 31-12-2020 | |
Trade receivables | 164.4 | 125.1 |
Impairment provision | -1.2 | -1.4 |
Total trade receivables | 163.2 | 123.7 |
Other receivables | 39.4 | 18.3 |
Derivatives | 10.1 | 6.6 |
Prepayments and accrued income | 8.7 | 6.5 |
Total other receivables | 58.2 | 31.4 |
Total receivables | 221.4 | 155.1 |
Trade receivables are not interest-bearing and generally have an average term of credit of 30-90 days. The group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables.
Breakdown of expired credit terms trade receivables (net of impairment provision)
Total | < 30 days | 30-60 days | 60-90 days | > 90 days | |
Sustainable Food Solutions | 17.2 | 12.0 | 2.2 | 1.7 | 1.3 |
Lactic Acid & Specialties | 7.3 | 5.1 | 0.9 | 0.7 | 0.6 |
Incubator | 0.5 | 0.5 | |||
Total | 25.0 | 17.6 | 3.1 | 2.3 | 1.9 |
Movements in trade receivables impairment provision
2021 | 2020 | |
As at 1 January | -1.4 | -1.3 |
Additions/releases | -0.5 | -0.6 |
Use | 0.8 | 0.4 |
Exchange rate differences | -0.1 | 0.1 |
As at 31 December | -1.2 | -1.4 |
The additions to/releases from the trade receivables impairment provision are recognized as selling expenses.
18. Disposal group held for sale
As at 31-12-2021 | As at 31-12-2020 | |
Property, plant, and equipment | 1.1 | 8.7 |
Inventories | 0.6 | |
Trade and other receivables | 2.5 | |
Total assets held for sale | 1.1 | 11.8 |
Trade and other payables | 1.1 | |
Liabilities held for sale | 1.1 |
No impairment loss was recognized upon reclassification as held for sale as the fair value less costs to sell is higher than the carrying amount. The held for sale item in 2021 relates to a warehouse in Totowa (US) which has been sold in January 2022. Reference is made to Note 31.
19. Equity
Share capital
As at 31 December 2021, the authorized share capital totaled € 45.5 million, consisting of 182 million ordinary shares with a nominal value of € 0.25 each.
Movements in number of issued shares
Ordinary shares | |
As at 1 January 2021 | 59,242,792 |
As at 31 December 2021 | 59,242,792 |
Movements in number of shares with dividend rights
Ordinary shares | |
As at 1 January 2021 | 58,871,671 |
Share-based remuneration | 81,452 |
Acquired shares | -2,854 |
As at 31 December 2021 | 58,950,269 |
Movements in treasury stock ordinary shares
Number | |
As at 1 January 2021 | 371,121 |
Share-based remuneration | -81,452 |
Acquired shares | 2,854 |
As at 31 December 2021 | 292,523 |
As at 31 December 2021, Corbion had a treasury stock of 292,523 ordinary shares at its disposal with a nominal value of € 0.25 each (representing 0.49% of the total share capital issued). Treasury stock shares have no dividend rights.
Other reserves
Movements in legal reserves | |||||
Translation reserve | Hedge reserve | Development costs | Share plan reserve | Total | |
As at 1 January 2020 | 53.8 | 1.5 | 31.5 | 5.3 | 92.1 |
• Net investment hedge | |||||
- Exchange rate differences foreign currency loan | 17.1 | 17.1 | |||
- Tax effect | -4.3 | -4.3 | |||
• Translation difference | |||||
- Foreign group companies | -70.6 | -70.6 | |||
- Tax effect | 3.0 | 3.0 | |||
• Cash flow hedge | |||||
- Fluctuations in fair value derivatives | 5.3 | 5.3 | |||
- Tax effect | -1.4 | -1.4 | |||
• Share-based remuneration charged to result | 3.9 | 3.9 | |||
• Share-based remuneration transfers | -2.6 | -2.6 | |||
• Movement in capitalization of development costs | -0.1 | -0.1 | |||
As at 31 December 2020 | -1.0 | 5.4 | 31.4 | 6.6 | 42.4 |
• Net investment hedge | |||||
- Exchange rate differences foreign currency loan | -20.1 | -20.1 | |||
- Tax effect | 5.0 | 5.0 | |||
• Translation difference | |||||
- Foreign group companies | 25.4 | 25.4 | |||
- Tax effect | -0.5 | -0.5 | |||
• Cash flow hedge | |||||
- Fluctuations in fair value derivatives | 3.6 | 3.6 | |||
- Tax effect | -0.9 | -0.9 | |||
• Share-based remuneration charged to result | 3.5 | 3.5 | |||
• Share-based remuneration transfers | -3.8 | -3.8 | |||
• Movement in capitalization of development costs | -0.7 | -0.7 | |||
As at 31 December 2021 | 8.8 | 8.1 | 30.7 | 6.3 | 53.9 |
In specific circumstances legal reserves must be created in accordance with Part 9, Book 2 of the Dutch Civil Code. The legal reserves comprise the translation reserve, hedge reserve, and development cost reserve. Whenever a legal reserve has a negative value no payments can be made from the retained earnings up to the level of the negative value(s). The positive legal reserves as at 31 December 2021 amount to € 47.6 million.
A reserve for non-transferable profits is not applicable as Corbion has no restrictions to transfer profits from its operations in the different countries.
Nature and purpose of reserves
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as the effective portion of any foreign currency differences arising from hedges of a net investment in a foreign operation.
Hedge reserve
The hedge reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss as the hedged cash flows or items affect profit or loss.
Development cost reserve
The development cost reserve comprises a statutory reserve for capitalized development expenditure in accordance with the Dutch Civil Code.
Share plan reserve
The share plan reserve comprises all movements in equity-settled share-based remuneration plans.
20. Provisions
As at 31-12-2021 | As at 31-12-2020 | |
Reorganization and restructuring | 0.5 | 0.8 |
Other | 8.4 | 7.9 |
Total | 8.9 | 8.7 |
Movements in provisions
Reorganization and restructuring | Other | Total | |
As at 1 January 2021 | 0.8 | 7.9 | 8.7 |
Addition charged to result | 1.3 | 0.7 | 2.0 |
Release credited to result | -0.1 | -0.1 | |
Withdrawal for intended purpose | -1.7 | -0.5 | -2.2 |
Exchange rate differences | 0.1 | 0.4 | 0.5 |
As at 31 December 2021 | 0.5 | 8.4 | 8.9 |
Other
The other provisions relate mainly to loss-making contracts, legal disputes, and other litigation risks. The majority of the cash outflows are expected to occur within the next 2 years. An amount of € 7.6 million was recorded in other receivables related to expected reimbursement for insurance claims.
21. Long-term employee benefits
As at 31-12-2021 | As at 31-12-2020 | |
Net defined benefit asset | -0.5 | -15.1 |
Net defined benefit liability | 3.7 | 5.2 |
Other long-term employee benefit commitments | 1.4 | 1.2 |
Total | 4.6 | -8.7 |
Net defined benefit assets and liabilities
Net defined benefit assets and liabilities relate to post-employment defined benefit arrangements.
Other long-term employee benefit commitments
Other long-term employee benefit commitments relate mainly to anniversary commitments, conditional incentive plans, and health insurance.
Main characteristics of the defined benefit plans
Corbion sponsors defined benefit pension plans in the US and the UK. Both plans are closed schemes and based on final pay. Further, Corbion sponsors a legal severance payment plan in Thailand. All plans have been established in accordance with the legal requirements of the countries involved. The defined benefit plans are administered by a separate fund that is legally separated from the entity. The board of the pension fund is composed of an equal number of representatives from both employers and (former) employees.
The plans typically expose the group to actuarial risks such as investment risk, interest rate risk, and longevity risk.
-
Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high-quality corporate bond yields; if the return on plan assets falls below this rate, it will create a plan deficit.
-
Interest rate risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partly offset by an increase in the return on the plan's debt investments.
-
Longevity risk - The present value of the defined benefit liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
The defined benefit obligation as per year-end consisted for the vast majority of the UK plan and is summarized below:
-
The Normal Retirement Age (NRA) is 65; however, Section 1 members are able to take their benefits in respect of pre 1 October 2003 service unreduced from age 60.
-
Pensions in deferment increase in line with statutory revaluation with the exception of pre 1 October 2003 benefits for Section 1 members, which have an underpin linked to the level of pension increases in payment (which are linked to Consumer Price Index (CPI)).
-
Pensions in payment increase in line with CPI capped at 5% for benefits in respect of pre 1 January 2006 service and CPI capped at 2.5% for benefits in respect of post 31 December 2005 service.
In 2021, an insurance policy was acquired to fund all the employee benefits in the UK plan. Corbion retained the legal obligation to pay further amounts if the insurer does not pay the employee benefits specified in the insurance policy.
The average duration of the defined benefit obligation as at 31 December 2021 is 22 years.
Breakdown of the amounts recognized in respect of defined benefit pension plans in the income statement and statement of comprehensive income
2021 | 2020 | |
Current-service costs | 0.5 | 0.6 |
Net interest income | -0.1 | -0.3 |
Total pension costs recognized in income statement | 0.4 | 0.3 |
Remeasurements net defined benefit liability | ||
- Return on plan assets (excluding amounts included in interest income) | 23.8 | -12.6 |
- Actuarial (gains)/losses arising from changes in demographic assumptions | -0.2 | 0.7 |
- Actuarial (gains)/losses arising from changes in financial assumptions | -4.5 | 17.9 |
- Actuarial (gains)/losses arising from experience adjustments | 1.0 | -0.9 |
Total pension costs recognized in other comprehensive income | 20.1 | 5.1 |
Total | 20.5 | 5.4 |
Breakdown of the amounts recognized in the statement of financial position
As at 31-12-2021 | As at 31-12-2020 | |
Present value of defined benefit obligations | 92.9 | 97.5 |
Fair value of plan assets | -89.7 | -107.4 |
Funded status | 3.2 | -9.9 |
Restrictions on assets recognized | ||
Net liability/ (asset) | 3.2 | -9.9 |
Movements in defined benefit obligation
2021 | 2020 | |
As at 1 January | 97.5 | 87.5 |
Current-service costs | 0.5 | 0.6 |
Interest charges | 1.5 | 1.7 |
Pension payments | -10.0 | -4.4 |
Remeasurement (gains)/losses | ||
- Actuarial (gains)/losses arising from changes in demographic assumptions | -0.2 | 0.7 |
- Actuarial (gains)/losses arising from changes in financial assumptions | -4.5 | 17.9 |
- Actuarial (gains)/losses arising from experience adjustments | 1.0 | -0.9 |
Exchange rate differences | 7.1 | -5.6 |
As at 31 December | 92.9 | 97.5 |
Movements in fair value of plan assets
2021 | 2020 | |
As at 1 January | 107.4 | 99.4 |
Interest income | 1.6 | 2.0 |
Pension payments | -10.0 | -4.4 |
Contributions from the employer | 6.7 | 3.9 |
Remeasurement gains/(losses) | ||
- Return on plan assets (excluding amounts included in interest income) | -23.8 | 12.6 |
Exchange rate differences | 7.8 | -6.1 |
As at 31 December | 89.7 | 107.4 |
The return on plan assets (excluding amounts included in interest income) of € 23.8 million was significantly influenced by the acquired insurance policy to fund all the employee benefits in the UK plan. The buy-in resulted in an asset loss of approximately € 25 million when comparing the difference between the premium paid of € 103.5 million and the value of the liabilities insured using IAS 19 assumptions as at 31 December of € 78.5 million. Excluding this effect, the actual return on plan assets (including amounts included in interest income) was € 2.8 million in the year under review (2020: € 14.6 million).
The investment strategy is based on the composition of the obligations of the pension schemes. Based on Asset Liability Management models analyses have been performed on a regular basis to define the investment portfolio. At year-end the asset allocation was as follows.
Plan asset classes
As at 31-12-2021 | As at 31-12-2020 | |
Bonds | 0.4 | 93.7 |
Equities | 8.6 | 5.8 |
Other | 80.7 | 7.9 |
Total assets | 89.7 | 107.4 |
The main weighted average actuarial assumptions
2021 | 2020 | |
Discount rate | 2.0% | 1.6% |
Pension growth rate | 2.8% | 2.1% |
Sensitivity of the defined benefit obligation to changes in the weighted principal assumptions
Change in assumption | Increase in assumption | Decrease in assumption | |
Discount rate | 0.50% | (9.1) | 10.5 |
Pension growth rate | 0.50% | 5.3 | (5.3) |
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. To calculate the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method is applied (calculation of the present value of the defined benefit obligation using the projected unit credit method at the end of the reporting period) which is also used to calculate the pension liability recognized within the consolidated statement of financial position.
The anticipated contributions to the defined benefit pension plans in the coming year will amount to € 0.2 million.
22. Deferred tax
Breakdown of deferred tax assets and liabilities
2021 | 2020 | |
Deferred tax liabilities | 15.3 | 13.4 |
Deferred tax assets | -13.1 | -10.7 |
As at 1 January | 2.2 | 2.7 |
Tax charge in income statement | -1.8 | -2.0 |
Translation differences foreign group companies | 1.3 | -1.1 |
Tax charge movements in equity | -3.6 | 2.6 |
As at 31 December | -1.9 | 2.2 |
Deferred tax liabilities | 25.4 | 15.3 |
Deferred tax assets | -27.3 | -13.1 |
As at 31 December | -1.9 | 2.2 |
Breakdown of deferred tax assets and liabilities by type
As at 31-12-2021 | As at 31-12-2020 | |||
Deferred tax assets | Deferred tax liabilities | Deferred tax assets | Deferred tax liabilities | |
Property, plant, and equipment | -1.3 | 26.6 | -6.4 | 21.7 |
Intangible fixed assets | -5.8 | 13.4 | -1.3 | 11.7 |
Current assets/liabilities | -19.2 | 2.2 | -17.9 | 0.5 |
Tax loss carry forward | -17.7 | -4.4 | ||
Provisions | -2.8 | -2.8 | ||
Financial instruments | 2.7 | 1.1 | ||
-46.8 | 44.9 | -32.8 | 35.0 | |
Netting | 19.5 | -19.5 | 19.7 | -19.7 |
Total | -27.3 | 25.4 | -13.1 | 15.3 |
The short-term part of deferred tax assets, after write-down and netting with the short-term part of deferred tax liabilities, amounts to € 5.3 million (2020: € 8.3 million).
Breakdown of deferred taxes due to tax loss carry forward
As at 31-12-2021 | As at 31-12-2020 | |
Total tax loss carry forward | 168.2 | 120.3 |
Tax loss carry forward not qualified as deferred tax asset | -103.0 | -105.6 |
Tax loss carry forward qualified as deferred tax asset | 65.2 | 14.7 |
Average tax rate | 27.1% | 29.6% |
Deferred tax asset | 17.7 | 4.4 |
Expiry dates of tax losses carry forward not qualified as deferred tax asset
As at 31-12-2021 | As at 31-12-2020 | |
Less than 1 year | 0.2 | |
Within 5 years | ||
Between 5 and 10 years | ||
10 years or longer | ||
No expiry date | 103.0 | 105.4 |
Tax loss carry forward not qualified as deferred tax asset | 103.0 | 105.6 |
Breakdown of the tax charge arising from deferred tax assets and liabilities in the income statement by type
2021 | 2020 | |
Property, plant, and equipment | 8.0 | -1.3 |
Intangible fixed assets | -3.2 | 1.7 |
Current assets/liabilities | 1.7 | 0.1 |
Tax loss carry forward | -13.0 | 0.3 |
Provisions | 0.1 | -1.1 |
Exchange rate differences loans | 4.5 | -1.3 |
Financial instruments | 0.6 | -0.7 |
Rate changes | -0.5 | 0.3 |
Total | -1.8 | -2.0 |
23. Borrowings
Non-current borrowings
Balance sheet value | Effective interest % | Average term in years | ||||
As at 31-12-2021 | As at 31-12-2020 | As at 31-12-2021 | As at 31-12-2020 | As at 31-12-2021 | As at 31-12-2020 | |
Private placement | 259.7 | 239.5 | 2.84 | 2.88 | 5.4 | 6.4 |
Subordinated loan | 99.4 | 1.89 | 6.6 | |||
Total | 359.1 | 239.5 | ||||
Weighted average | 2.57 | 2.88 | 5.7 | 6.4 | ||
The weighted average term has been calculated on the basis of the remaining terms of the individual loans.
Repayments on the above amounts are due within five years (€ 126.3 million) and after five years (€ 232.8 million).
Fair value of the main long-term loans
Balance sheet value as at 31-12-2021 | Fair value as at 31-12-2021 | Balance sheet value as at 31-12-2020 | Fair value as at 31-12-2020 | |
Private placement | 259.7 | 259.1 | 239.5 | 249.5 |
Subordinated loan | 99.4 | 99.8 |
Current borrowings
Balance sheet value | Effective interest % | |||
As at 31-12-2021 | As at 31-12-2020 | As at 31-12-2021 | As at 31-12-2020 | |
Owed to credit institutions | 74.7 | 42.4 | 0.73 | 0.73 |
Total | 74.7 | 42.4 | ||
Weighted average | 0.73 | 0.73 | ||
26. Acquisitions and disposals
Acquisition 2021
On 30 June 2021, Corbion acquired Granotec Mexico S.A. de C.V., a key player in functional blends for the Mexican bakery and fortification industries. The company is based in Querétaro, Mexico, employs around 60 staff and operates a production facility and an application and development center.
Details of the purchase consideration, net assets acquired are as follows
Acquisition figures
Granotec Mexico | |
Property, plant, and equipment | 0.7 |
Intangible fixed assets | 5.0 |
Inventories | 2.3 |
Identifiable assets minus liabilities | 8.0 |
Cash | 9.3 |
Holdback amounts | 1.8 |
Total consideration | 11.1 |
Goodwill arising on acquisition | 3.1 |
Given the recent completion of the acquisition, the amounts have been measured on a provisional basis. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of the acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.
Goodwill (allocated to the Sustainable Food Solutions segment) arose on the acquisition of Granotec Mexico as the consideration paid effectively included amounts for the benefits of expected synergies, revenue growth, and future market development. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. The goodwill is not expected to be deductible for tax purposes.
The table below shows the pro-forma result of Corbion if the acquisition had been made as at 1 January 2021.
Corbion | Pro-forma adjustment full-year effect | Pro forma Corbion | |
Net sales | 1,070.8 | 3.7 | 1,074.5 |
Result after taxes | 78.3 | 0.1 | 78.4 |
For the six-month period ended 31 December 2021, the acquisition contributed € 3.8 million in revenue and € 1.3 million in losses to Corbion's results.
Disposal 2021
On 11 January 2021 Corbion reached an agreement to sell its Frozen Dough business, classified as held for sale in the 2020 consolidated financial statements.
Frozen Dough business | |
Consideration transferred | |
Payment in cash | 20.4 |
Total consideration | 20.4 |
Property, plant, and equipment | 6.8 |
Inventories | 0.5 |
Receivables | 2.0 |
Total sold assets | 9.3 |
Trade payables | 0.7 |
Total sold liabilities | 0.7 |
Gross result from divestment | 11.8 |
Consideration received in cash and cash equivalents | 20.4 |
Total consideration received | 20.4 |
In 2020 no acquisitions or disposals were made.
27. Financial risk management and financial instruments
Risk management framework
Corbion's activities are exposed to a variety of financial risks including currency, interest rate, commodity, liquidity, capital, and credit risk. The treasury department identifies and manages these risks, except the commodity risk which is managed by procurement. Treasury and procurement operate within a framework of policies and procedures which have been approved by the Board of Management, which has overall responsibility for the Group's Risk Management Framework. The Audit Committee oversees the Group's Risk Management Framework. The treasury and commodity risk policies are reviewed at least on an annual basis to ensure the policies are up to date with respect to relevant risks and changing business environment. Corbion uses derivatives solely for the purpose of hedging exposure mainly to the commodity, currency, and interest rate risks arising from the company's sources of finance and business. Corbion has a periodic Treasury Committee and a Commodity Risk Management Committee meeting to review treasury and commodity activities and compliance with both policies. The Treasury Committee resides within the finance discipline and is chaired by the CFO. In the Commodity Risk Committee, both procurement and finance disciplines are represented, with executive level involvement by means of the CEO, CFO, and COO.
Currency risk
Corbion is active on the international market, which means that it is exposed to risks arising from currency fluctuations, particularly in the US dollar, Brazilian real, Japanese yen, and Thai baht. Foreign currency exchange risk arises from future commercial transactions, recognized assets and liabilities, and net investments in foreign operations.
Translation risk
Corbion is subject to foreign exchange rate movements in connection with the translation of its foreign subsidiaries' income, assets, and liabilities into euros in the consolidated financial statements. The USD US Private Placement is treated as a Net Investment hedge to partially mitigate the translation foreign exchange risk on the US net asset values. Currency fluctuations particularly in the US dollar can have a material effect on Corbion’s income statement. Corbion has policies in place that monitor these risks and if required, mitigation actions are discussed in the Treasury Committee. Currently, no other translation effects than part of the US net asset values are being hedged.
Intercompany financing is denominated in the functional currency of the entity receiving the funding, hence the currency risk is at Corbion group level. According to our Treasury policy, currency risks above a certain threshold are hedged using foreign exchange forward contracts. No hedge accounting is applied and both gains and losses on the derivatives and the foreign currency gains and losses on the intercompany financing positions are recognized as a net position in the income statement as a financial income or financial charge.
Transaction risk
The currency transaction risk arises in the course of ordinary business activities when a company trades, borrows, or lends in a currency other than its functional currency. During the time interval between anticipation/commitment and actual payment/receipt, exchange rates may fluctuate and the company is exposed to a currency risk. Corbion uses forward currency contracts and currency swaps in order to hedge risks arising from purchase and sales transactions and/or commitments from current purchase and sales transactions. Committed transaction exposures and anticipated transaction exposures above a certain threshold with high probability are hedged and included in cash flow hedge accounting. Group Treasury is responsible for monitoring transaction risks and defining the appropriate hedging strategy, which is approved in the Treasury Committee.
Sensitivity analysis of financial instruments to exchange rate changes
The following sensitivity shows the impact of movements in exchange rates on the exchange rate hedging instruments in place as at 31 December 2021. A 10% weakening of the euro against the Brazilian real would have no effect on the hedge reserve (equity), while the net result would decrease by € 6.8 million. A 10% weakening of the euro against the Japanese yen would decrease the hedge reserve (equity) by € 1.2 million, while the net result would not be impacted. A 10% weakening of the euro against the US dollar would have no effect on the hedge reserve (equity), while the net result would decrease by € 6.6 million.
Interest rate risk
Interest rate risk is the risk that interest paid or received on loans and cash investments will vary over a period of time as a direct consequence of changes in the level of interest rates. With regards to interest rate risk, group treasury has the objective to reduce the sensitivity of interest rate fluctuations on the financial income and charge of the income statement and resulting cash flows, by actively managing this risk. To reduce the sensitivity, Corbion prefers variable / floating interest rates for short-term (< one year) financing instruments (including short term drawings), while selecting fixed interest rates for long-term (> one year) financing instruments. As to cap the maximum potential P&L volatility at all times, a threshold is defined for the maximum floating exposure. Interest rate swaps and forward interest rate contracts may be used to adjust the nature of the interest rate and currency of long-term financing to fit the desired risk profile. Interest rate hedging by group treasury is allowed after approval from the Treasury Committee.
Corbion's interest rate risk arises primarily from its debt. Corbion has an interest rate policy aimed at reducing volatility in its interest expense. As at 31 December 2021 long-term debt (€ 359.1 million) is financed at fixed rates (2.57% on average) for a period of on average 5.7 years. Drawings under the Revolving Credit Facility have a floating interest rate for a period shorter than one year. As at 31 December 2021, there were no interest rate derivatives in place.
Sensitivity analysis to changes in market interest rate
Assuming a constant mix of variable and fixed interest rate instruments, an interest rate increase by 50 basis points versus the rates on 31 December 2021 with all other variables held constant, would not have a significant impact, neither on the net result nor on the equity.
Commodity risk
Commodity Risk is the risk of unfavorable changes in commodity prices that may lead to losses in Corbion’s profit and loss statement and that can lead to fluctuations in the statement of cash flows. The Commodity Risk Committee establishes the overall risk tolerance framework for Corbion and ensures that the commodity price risk associated with Corbion's business margins are identified, considered and managed. The main functions of the Risk Committee are to monitor the price risk exposure of selected commodities (e.g. sugar, corn, wheat, soybean oil and energy) and key chemicals, to define methodologies, procedures, and systems to control the risks, to select appropriate risk management tools and to monitor execution of the Commodity Risk Policy by procurement.
Corbion uses commodity derivative contracts to reduce the risk of price fluctuations in the main commodities used, like natural gas and sugar.
Corbion entered into commodity derivative contracts to hedge the variable price risk of the main commodities used. The fair value of these contracts amounted to an asset of € 11.2 million as at 31 December 2021 (31 December 2020: asset of € 4.5 million). Hedge accounting is applied for the major part of these commodity derivative contracts. Further analysis can be found in the section on hedge transactions.
The majority of the commodity derivative contracts expires within a year.
Sensitivity analysis of financial instruments to commodity price changes
The following sensitivity shows the impact of movements in commodity prices on the commodity hedging instruments in place as at 31 December 2021. If the purchase price of the involved commodities would increase by 10%, profit and loss would be impacted by € 0.2 million.
Liquidity risk
Liquidity risk is the risk of Corbion not being able to obtain sufficient financial means to meet its obligations in time. Liquidity risk Management is the most important pillar for the group treasury function of Corbion and therefore the treasury policy defines actively managing the liquidity risk as the primary objective of group treasury, so that at all times the company is able to meet its financial obligations of the whole Group in the short and long-term. Liquidity risk is managed by ensuring sufficient liquidity capacity through (incoming) cash and cash equivalents and the availability of committed borrowing capacity as well as a solid financial risk profile. Corbion manages liquidity risk by means of cash-flow projections for the short term (daily), medium term (quarterly review for running year by quarter) and long term (up to 5 years, bi-annual review).
The committed credit facilities at Corbion’s long-term disposal amounted to € 300 million as at 31 December 2021. Corbion also has a private placement of $ 295 million and a subordinated private placement of € 100 million with American institutional investors.
To provide insight into the liquidity risk the table below shows the contractual terms of the financial obligations (converted at balance sheet date), including interest paid.
The table below analyzes Corbion’s financial obligations which will be settled on a net basis, according to relevant expiration dates, based on the remaining period from the balance sheet date to the contractual expiration date. The amounts shown are contractual non-discounted cash flows.
Less than 1 year | Between 1 and 5 years | More than 5 years | Total | |
As at 31 December 2021 | ||||
Private placement | 8.0 | 137.7 | 158.9 | 304.6 |
Subordinated loan | 2.0 | 23.9 | 87.4 | 113.3 |
Owed to credit institutions | 75.1 | 75.1 | ||
Lease liabilities | 15.7 | 36.0 | 31.9 | 83.6 |
Contingent considerations | 3.0 | 19.8 | 22.8 | |
Trade payables | 128.0 | 128.0 | ||
Other non-interest-bearing current liabilities | 97.8 | 97.8 | ||
Total | 329.6 | 217.4 | 278.2 | 825.2 |
As at 31 December 2020 | ||||
Private placement | 7.4 | 131.4 | 149.8 | 288.6 |
Owed to credit institutions | 43.0 | 43.0 | ||
Lease liabilities | 11.1 | 21.8 | 34.3 | 67.2 |
Contingent considerations | 8.7 | 24.2 | 0.2 | 33.1 |
Trade payables | 99.4 | 99.4 | ||
Other non-interest-bearing current liabilities | 64.2 | 64.2 | ||
Total | 233.8 | 177.4 | 184.3 | 595.5 |
Credit risk management
Credit risk refers to the losses that would be recognized if a customer or a counterparty to a financial instrument fails to meet its contractual obligations. In respect of disbursed loans, other receivables, and cash and cash equivalents the maximum credit risk equals the book value. In respect of derivatives it equals the fair value.
Given the credit rating that it requires of its partners Corbion has no reason to assume that they will not honor their contractual obligations. Based on today's insights, the actual credit risk is limited.
Capital risk management
Corporate finance, which is the process of optimizing the capital structure and capital allocation of the group, is an important pillar of the group treasury function within Corbion, as it is closely linked to the management of the liquidity risk. A prudent corporate finance policy and approach aims to maintain sufficient access to liquidity and supports a solid financial risk profile. Corbion’s size, geographical presence in different financial markets, financial strength, consolidated cash flow generation, and public share listing gives access to multiple financing instruments. Group treasury is responsible for managing the optimized overall capital structure of the group, which is set by the Treasury Committee, using multiple financing sources (e.g. debt, mezzanine or equity instruments), both at a group Level and at an operating company level. Group treasury is responsible for defining the funding requirements and funding strategy of the group, which is reviewed and approved annually by the Treasury Committee.
The debt capital structure of Corbion consists of net debt (borrowings as detailed in Note 23) offset by cash and cash equivalents (as detailed in Note 17).
2021 | 2020 | |
Private placement | 259.7 | 239.5 |
Revolving credit facility | 74.7 | 42.4 |
Subordinated loan | 99.4 | |
Lease commitments | 69.4 | 53.9 |
Total financial liabilities part of net debt | 503.2 | 335.8 |
Cash and cash equivalents | -42.2 | -51.6 |
Net debt | 461.0 | 284.2 |
-/- Subordinated loan | -99.4 | |
Covenant net debt for covenant ratio calculation | 361.6 | 284.2 |
Reconciliation of liabilities arising from financing activities
Private placement | Revolving credit facility | Subordinated loan | Leases | Total | |
As at 1 January 2021 | 239.5 | 42.4 | 53.9 | 335.8 | |
Financing cash flows | 32.0 | 100.0 | 132.0 | ||
Repayments | -12.4 | -12.4 | |||
New lease commitments | 23.6 | 23.6 | |||
Exchange rate differences | 20.2 | 4.3 | 24.5 | ||
Other | 0.3 | -0.6 | -0.3 | ||
As at 31 December 2021 | 259.7 | 74.7 | 99.4 | 69.4 | 503.2 |
The Corbion treasury committee reviews the capital structure of Corbion on a quarterly basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital.
The main covenants for the revolving credit facility and the US private placement are:
-
The ratio of covenant net debt position divided by covenant EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization and impairment of (in)tangible fixed assets, excluding adjustments, increased by cash dividend of joint ventures received and annualization effect of newly acquired and/or divested subsidiaries) may not exceed the factor 3.75.
-
A minimum interest cover (covenant EBITDA divided by net interest income and charges) of 3.5.
These external conditions were met in 2021 as well as in 2020. Corbion targets a Covenant net debt/EBITDA ratio of 2.0x over the investment cycle with a peak of 2.5x.
Ratios at year-end
2021 | 2020 | |
Covenant net debt position/covenant EBITDA | 2.6 | 1.7 |
Interest cover | 14.6 | 16.5 |
Financial instruments
Corbion is using financial derivatives to control the risks related to fluctuations in foreign currencies, commodities and interest rates. Entering into financial derivatives is only allowed when there is an underlying exposure. Hedging instruments needs to be approved by the Treasury Committee and hedge accounting is applied where appropriate.
Valuation of financial instruments
Corbion measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
-
Level 1: Fair value measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
-
Level 2: Fair value measurements based on inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
-
Level 3: Fair value measurements based on valuation techniques that include inputs for the asset or liability that are based on observable market data (unobservable inputs).
Breakdown valuation of financial instruments
31 December 2021 | Level 1 | Level 2 | Level 3 | Total |
Derivatives | ||||
• Foreign exchange contracts | -0.8 | -0.8 | ||
• Commodity swaps/collars | 11.2 | 11.2 | ||
Total | 10.4 | 10.4 |
Breakdown fair values of financial instruments
31 December 2021 | Balance sheet value | Fair value |
Financial fixed assets | ||
• Loans, receivables, and other | 94.8 | 100.1 |
Receivables | ||
• Trade receivables | 163.2 | 163.2 |
• Other receivables | 39.4 | 39.4 |
• Prepayments and accrued income | 8.7 | 8.7 |
Cash | ||
• Cash other | 42.2 | 42.2 |
Interest-bearing liabilities | ||
• Private placement | -259.7 | -259.1 |
• Owed to credit institutions | -74.7 | -74.7 |
• Subordinated loan | -99.4 | -99.8 |
Non-interest-bearing liabilities | ||
• Trade payables | -128.0 | -128.0 |
• Other payables | -97.8 | -97.8 |
Derivatives | ||
• Foreign exchange contracts | -0.8 | -0.8 |
• Commodity swaps/collars | 11.2 | 11.2 |
Total | -300.9 | -295.4 |
Fair values are determined as follows:
-
The fair value of financial fixed assets does not significantly deviate from the book value.
-
The fair value of receivables equals the book value because of their short-term character.
-
Cash and cash equivalents are measured at nominal value which, given the short-term and risk-free character, corresponds to the fair value.
-
Market quotations are used to determine the fair value of debt owed to private parties, credit institutions, and other debts. As there are no market quotations for most of the loans the fair value of short- and long-term loans is determined by discounting the future cash flows at the yield curve applicable as at 31 December.
-
Given the short-term character, the fair value of non-interest-bearing liabilities equals the book value.
-
Currency and interest rate derivatives are measured on the basis of the present value of future cash flows over the remaining term of the contracts, using the bank interest rate (such as Euribor) as at the reporting date for the remaining term of the contracts. The present value in foreign currencies is converted using the exchange rate applicable as at the reporting date.
-
Commodity derivatives are measured on the basis of the present value of future cash flows, using market quotations or own variable market price estimations of the involved commodity as at the reporting date.
Derivatives
Hedge transactions
The amount of € 8.1 million in hedge reserve (see Note 19) relates to the hedging of risks arising from future purchase and sales deals and/or commitments from current purchase and sales contracts amounting to € 26.8 million.
The amount of € 8.8 million in translation reserve (see Note 19) relates to currency fluctuations in respect of the net investments in foreign operations less the currency fluctuations of the corresponding net investment hedges. In case of divestment of a net investment in a foreign operation, the corresponding net impact of the currency fluctuations is moved from the translation reserve to the income statement.
In the past year no cash flow hedges were terminated early due to changes to the expected future transaction. No ineffective parts were recorded in respect of the net investment hedge and cash flow hedge.
Breakdown of fair values, maturities, and qualification of derivative financial instruments for accounting purposes
Short < 1 year | Long > 1 year | |||
As at 31-12-2021 | As at 31-12-2020 | As at 31-12-2021 | As at 31-12-2020 | |
Derivatives receivables/(liabilities) used as hedge instrument in cash flow hedge relations: | ||||
Foreign exchange contracts | -0.8 | 0.6 | ||
Commodity swaps | 10.1 | 6.0 | 0.8 | 1.5 |
Derivatives receivables/(liabilities) used as hedge instrument in fair value hedge relations: | ||||
Commodity swaps | -0.2 | -3.0 | ||
Total derivatives in hedge relations | 9.1 | 3.6 | 0.8 | 1.5 |
Derivatives receivables/(liabilities) not used in a hedge relation with value change through income statement: | ||||
Commodity swaps | 0.4 | 0.1 | ||
Total derivatives through income statement | 0.4 | 0.1 | ||
Total derivatives | 9.5 | 3.6 | 0.9 | 1.5 |
28. Related-party transactions
Remuneration policy Board of Management
For more information on the remuneration policy see the Remuneration report. For more information on share-based payments see Note 29.
Breakdown of the number of conditionally granted shares per member of the (former) Board of Management
Granted in | At target number outstanding as at 31-12-2021 | Maximum number outstanding as at 31-12-2021 | Year of vesting | |
O. Rigaud | 2019 | 20,865 | 31,298 | 2022 |
2020 | 22,260 | 33,390 | 2023 | |
2021 | 14,722 | 22,083 | 2024 | |
2021 | 2,959 | 2,959 | 2022 | |
E. van Rhede van der Kloot | 2019 | 12,140 | 18,210 | 2022 |
2020 | 13,491 | 20,237 | 2023 | |
2021 | 8,854 | 13,281 | 2024 | |
2021 | 1,780 | 1,780 | 2022 | |
T. de Ruiter | 2019 | 8,852 | 13,278 | 2022 |
Total as at 31 December 2021 | 105,922 | 156,515 |
Breakdown of the movements in the number of shares conditionally granted to members of the (former) Board of Management
Maximum number outstanding as at 31-12-2020 | Maximum number granted in 2021 | Vested 2021 | Expired 2021 | Maximum number outstanding as at 31-12-2021 | |
O. Rigaud | 65,225 | 25,042 | 537 | 89,730 | |
E. van Rhede van der Kloot | 57,161 | 15,061 | 14,803 | 3,911 | 53,508 |
T. de Ruiter | 39,002 | 20,292 | 5,432 | 13,278 | |
Total | 161,388 | 40,102 | 35,632 | 9,343 | 156,515 |
Breakdown remuneration (former) Board of Management
IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | ||
Thousands of euros | 2021 | Base salary1 | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | |
O. Rigaud | 779 | 496 | 542 | 1,817 | ||||
E. van Rhede van der Kloot | 572 | 299 | 391 | 1,262 | ||||
Total Board of Management | 1,351 | 795 | 933 | 3,079 | ||||
IAS 24.17 category | Short-term employee benefits | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | ||
Thousands of euros | 2020 | Base salary1 | STIP | LTIP | Pension benefits | Other benefits | Termination benefits | |
O. Rigaud | 760 | 501 | 369 | 1,630 | ||||
E. van Rhede van der Kloot | 560 | 303 | 363 | 1,226 | ||||
Total Board of Management | 1,320 | 804 | 732 | 2,856 | ||||
T. de Ruiter | 336 | 171 | 279 | 786 | ||||
Total former Board of Management | 336 | 171 | 279 | 786 | ||||
Total remuneration (former) Board of Management | 1,656 | 975 | 1,011 | 3,642 | ||||
- 1 Base salary also includes social security contributions and compensation, mainly allowances for expenses.
The tables above show the costs based on the applicable IFRS standard and do not necessarily reflect the actual amounts paid.
Compensation of key management personnel
The table below specifies the remuneration of the Executive Committee (ExCo), comprising the Board of Management members as listed above and the additional ExCo members who are not part of the Board of Management.
Thousands of euros | 2021 | 2020 |
Short-term employee benefits | 5,402 | 5,857 |
Share-based payments | 2,211 | 2,353 |
Post-employment benefits | 15 | 117 |
Other long-term benefits | ||
Termination benefits 1 | 1,554 |
- 1 Including excessive levy
Breakdown remuneration Supervisory Board
IAS 24.17 category | Short-term employee benefits1 | Share-based payments | Post-employment benefits | Other long-term benefits | Termination benefits | Total | ||
Thousands of euros | Year | Base fee | Committee fee | LTIP | Pension benefits | Other benefits | Termination benefits | |
Mathieu Vrijsen, Chair (Chair Appointment & Governance Committee / member Remuneration Committee / member Science and Technology Committee) | 2021 | 70 | 23 | 93 | ||||
2020 | 70 | 23 | 93 | |||||
Rudy Markham, Vice-Chair (Chair Remuneration Committee / member Appointment and Governance Committee) | 2021 | 60 | 16 | 76 | ||||
2020 | 60 | 16 | 76 | |||||
Liz Doherty (member Audit Committee until May 2021 / Chair Audit Committee as of May 2021) | 2021 | 50 | 15 | 65 | ||||
2020 | 50 | 10 | 60 | |||||
Dessi Temperley (Member Audit Committee as of May 2021) | 2021 | 31 | 6 | 37 | ||||
2020 | ||||||||
Ilona Haaijer (member Audit Committee / member Science and Technology Committee) | 2021 | 50 | 17 | 67 | ||||
2020 | 25 | 4 | 29 | |||||
Jack de Kreij (Chair Audit Committee until May 2021) | 2021 | 19 | 6 | 25 | ||||
2020 | 50 | 15 | 65 | |||||
Steen Riisgaard (Chair Science and Technology Committee / member Remuneration Committee / member Appointment and Governance Committee) | 2021 | 50 | 23 | 73 | ||||
2020 | 50 | 23 | 73 | |||||
Stefanie Schmitz (member Audit Committee from June until September 2020) | 2020 | 15 | 15 | |||||
Total 2021 | 330 | 106 | 436 | |||||
Total 2020 | 320 | 91 | 411 | |||||
- 1 Excluding expenses
No loans or advance payments or any guarantees to that effect have been made or issued to the members of the Supervisory Board. None of the members of the Supervisory Board have shares in the company or any option rights relating thereto.
Other related-party transactions
Transaction values for the year ended | Balance outstanding at year-end | |||
2021 | 2020 | 2021 | 2020 | |
Sales | ||||
Joint ventures | 85.3 | 53.9 | 13.7 | 7.3 |
Purchases | ||||
Joint ventures | 8.7 | 6.4 | 2.3 | 0.3 |
Others | ||||
Joint ventures | ||||
- Dividend | 6.6 | |||
- Sale of Total Corbion PLA (Thailand) Limited | 5.7 | |||
- Loans | 60.7 | 56.0 | ||
29. Share-based compensation
Share-based remuneration arrangements: Board of Management
A share plan is in place for the Board of Management. The (former) members of the Board of Management have a total of 156,515 unvested share rights in the company as at 31 December 2021 (2020: 161,388). The nominal amount of the shares which are claimable under unvested share rights equals € 39,129 per that date.
A new share grant program was introduced in 2020 as part of the new remuneration policy adopted by the annual General Meeting of Shareholders (AGM) on 29 June 2020, measuring performance over a period of three calendar years. Each year members of the Board of Management are entitled to a conditional grant of Corbion shares. There are two target levels for this incentive: one applies to the CEO and one to the CFO. The CEO is entitled to a conditional share grant value of 120% of base salary. The CFO is entitled to a conditional share grant value of 100% of base salary. The total number of conditionally granted shares is determined by dividing the “at target” amount applicable for the respective Board member (as a percentage of base salary) by the share price. The share price is defined as the average closing price of the Corbion share during the last full calendar quarter preceding the conditional grant of shares.
At the beginning of the three-year performance period, targets for the LTIP are set by the Supervisory Board as follows:
-
The Total Shareholders' Return (TSR) performance is benchmarked against the TSR performance of Corbion’s TSR peer group and the relative ranking determines the actual payout for 30% of the LTIP.
-
A target based on organic sales growth, a threshold (minimum) and a range around the performance target to determine the actual payout for 25% of the LTIP.
-
A target based on adjusted EBITDA, a threshold (minimum) and a range around the performance target to determine the actual payout for 20% of the LTIP.
-
A target based on return on capital employed (ROCE), a threshold (minimum) and a range around the performance target to determine the actual payout for 12.5% of the LTIP.
-
A target based on return on sustainability goals, a threshold (minimum) and a range around the performance target to determine the actual payout for 12.5% of the LTIP.
Prior to each conditional grant the Supervisory Board sets a target level for the performance measures, i.e. organic net sales growth, adjusted EBITDA, ROCE, and sustainability. A threshold performance level is determined below which no pay-out is granted and a maximum performance level where maximum pay-out is reached.
For share grants before 2020 a different program is in place. This program was introduced in 2015, as part of the remuneration policy adopted by the AGM on 22 May 2015, measuring performance over a period of three calendar years. The LTIP targets are the following: 60% is determined by EBITDA, 20% by Earnings Per Share (EPS), and 20% of the LTIP depends on relative TSR as compared to a specific TSR peer group.
There are two target levels for this incentive: one applies to the CEO and one to the CFO. The CEO is entitled to a conditional share grant value of 100% of base salary. The CFO is entitled to a conditional share grant value of 80% of base salary. The total number of conditionally granted shares is determined by dividing the “at target” amount applicable for the respective Board member (as a percentage of base salary) by the share price. The share price is defined as the average closing price of the Corbion share during the last full calendar quarter preceding the conditional grant of shares.
At the beginning of the three-year performance period, targets for the LTIP were set by the Supervisory Board as follows:
-
A target based on EBITDA, a threshold (minimum) and a range around the performance target to determine the actual payout for 60% of the LTIP.
-
A target based on EPS, a threshold (minimum) and a range around the performance target to determine the actual payout for 20% of the LTIP.
-
The TSR performance is benchmarked against the TSR performance of Corbion’s TSR peer group and the relative ranking determines the actual payout for another 20% of the LTIP.
Meeting the performance target(s) results in an LTIP payout at target level. A range of 50% around the performance target(s) (or lower as determined by the Supervisory Board) is set for the EBITDA and EPS performance to determine the actual payout. There is no payout below the low end of the range and no additional upside above the top end of the range. For the TSR performance, threshold payout is set at meeting the eighth position in the peer group. Target payout is achieved at the fourth and fifth position in the peer group and maximum payout is achieved at reaching the first and second position in the peer group.
Movements in number of unvested shares of the (former) Board of Management (at maximum)
Year of allocation | Total as at 31-12-2020 | Allocated in 2021 | Vested and expired in 2021 | Total as at 31-12-2021 |
2018 | 43,930 | 43,930 | ||
2019 | 62,786 | 62,786 | ||
2020 | 54,672 | 1,045 | 53,627 | |
2021 | 40,102 | 40,102 | ||
Total | 161,388 | 40,102 | 44,975 | 156,515 |
Valuation model and input variables
The fair value of the non-market-based components of the above-mentioned performance-related shares allocated in 2021 was € 47.54 per share (2020: € 32.00). The fair value of the market-based components of the above-mentioned performance-related shares allocated in 2021 was € 57.06 per share (2020: € 37.89). The fair value of the market-based components is estimated by using the Black & Scholes model and the assumptions set forth below.
2021 | 2020 | |
Risk-free interest rate | 0.00% | 0.00% |
Expected dividend gains | ||
Expected volatility in share price | 29% | 27% |
Term | 3 years | 3 years |
Share-based remuneration arrangements: Senior management
An equity-settled plan similar to the program for the Board of Management is in place for senior management.
Movements in number of unvested shares of senior management
Year of allocation | Total as at 31-12-2020 | Allocated in 2021 | Vested and expired in 2021 | Total as at 31-12-2021 |
2018 | 146,293 | 146,293 | ||
2019 | 118,078 | 9,831 | 108,247 | |
2020 | 132,821 | 9,636 | 123,185 | |
2021 | 122,266 | 122,266 | ||
Total | 397,192 | 122,266 | 165,760 | 353,698 |
Certain members of management receive a package of Corbion shares worth 9.5% of fixed salary (commitment award). The acquired shares shall be held in a separate blocked account until the end of their employment at Corbion.
Movements in number of blocked commitment award shares
Total as at 31-12-2020 | Allocated in 2021 | Released in 2021 | Total as at 31-12-2021 | |
Total | 6,019 | 6,019 |
30. Off-balance sheet commitments
Capital commitments
The capital expenditure commitments not yet incurred amounted to € 50.7 million for (in)tangible fixed assets as at 31 December 2021 (2020: € 4.6 million).
Contingent commitments
Guarantees
Third-party guarantees amounted to € 3.5 million as at 31 December 2021 (2020: € 3.8 million). No significant future losses are expected from these guarantees.
31. Events after balance sheet date
On 11 January 2022, Corbion sold a warehouse in Totowa (US), classified as held for sale in the 2021 consolidated financial statements, for a sales price of $ 11.5 million (€ 9.7 million). The expected pre-tax result on the transaction amounts to around $ 10.2 million (€ 8.6 million) to be recognized in the 2022 financial statements.
Company financial statements
Company statement of financial position
Before profit appropriation, millions of euros | Note | As at 31-12-2021 | As at 31-12-2020 |
Assets | |||
Financial fixed assets | 32 | 901.1 | 746.2 |
Deferred tax assets | 33 | 16.7 | 1.8 |
Total non-current assets | 917.8 | 748.0 | |
Receivables | 34 | 85.1 | 51.6 |
Tax assets | 0.9 | 14.6 | |
Cash and cash equivalents | 35 | 3.7 | 11.0 |
Total current assets | 89.7 | 77.2 | |
Total assets | 1,007.5 | 825.2 | |
Equity and liabilities | |||
Ordinary share capital | 14.8 | 14.8 | |
Share premium reserve | 55.2 | 55.2 | |
Translation reserve | 8.8 | -1.0 | |
Hedge reserve | 8.1 | 5.4 | |
Development costs reserve | 30.7 | 31.4 | |
Share plan reserve | 6.3 | 6.6 | |
Retained earnings | 430.2 | 403.6 | |
Equity | 36 | 554.1 | 516.0 |
Non-current liabilities | 37 | 359.1 | 240.9 |
Total non-current liabilities | 359.1 | 240.9 | |
Interest-bearing current liabilities | 38 | 79.5 | 55.6 |
Non-interest-bearing current liabilities | 39 | 14.8 | 12.7 |
Total current liabilities | 94.3 | 68.3 | |
Total equity and liabilities | 1,007.5 | 825.2 |
Company income statement
Millions of euros | 2021 | 2020 |
General and administrative expenses | -7.7 | -1.2 |
Operating result | -7.7 | -1.2 |
Financial income | 9.4 | 5.3 |
Financial charges | -13.1 | -19.0 |
Results from subsidiaries and associates | 78.7 | 84.6 |
Result before taxes | 67.3 | 69.7 |
Taxes | 11.0 | 3.4 |
Result after taxes | 78.3 | 73.1 |
Social security included in the income statement is rounded to zero for 2021 as well as 2020.
Notes to the company financial statements
General
The separate financial statements of Corbion nv ("the company") are drawn up in accordance with the principles referred to in Part 9, Book 2 of the Dutch Civil Code.
A list has been filed at the Amsterdam Trade Register setting out the data on the group companies as required under Sections 2:379 and 2:414 of the Dutch Civil Code. Corbion is registered with the Dutch Commercial Register under number 33006580.
Name of reporting entity | |
Domicile of entity | |
Legal form of entity | |
Country of incorporation | |
Address of entity's registered office | |
Principal place of business |
Basis of preparation
By using the option in Section 2:362 (8) of the Dutch Civil Code the same accounting principles (including the principles for recognizing financial instruments as equity or debt) have been applied in the separate financial statements and the consolidated financial statements.
Participating interests in group companies
Participating interests in group companies are accounted for in the company financial statements according to the equity method. Refer to the basis of consolidation accounting policy in the consolidated financial statements.
Result of participating interests
The share in the result of participating interests comprises the share of the company in the result of these participating interests. Results on transactions involving the transfer of assets and liabilities between the company and its participating interests, on the one hand, and between participating interests, on the other, are eliminated to the extent that they can be considered as not realized.
For an overview of any events after the balance sheet date, reference is made to Note 31 of the consolidated financial statements. For an overview of related-party transactions, reference is made to Note 28 of the consolidated financial statements.
32. Financial fixed assets
As at 31-12-2021 | As at 31-12-2020 | |
Participations in group companies | 776.0 | 706.4 |
Loans to group companies | 62.6 | 38.4 |
Loans to related parties | 60.7 | |
Securities | 0.9 | |
Derivatives | 0.9 | 1.4 |
Total | 901.1 | 746.2 |
The balance of participations in group companies and loans to group companies is positive in all participations of Corbion nv. Amounts owed to or by group companies and related parties are long-term.
2021 | 2020 | |
Movements in participations in group companies | ||
As at 1 January | 706.4 | 721.6 |
Paid-in capital | 120.8 | 78.9 |
Acquisition group company | 36.9 | |
Result group companies | 78.7 | 84.6 |
Dividend group companies | -135.0 | -159.1 |
Exchange rate differences | 24.5 | -57.6 |
Other | -19.4 | 1.1 |
As at 31 December | 776.0 | 706.4 |
Movements in loans to group companies | ||
As at 1 January | 38.4 | 50.3 |
Exchange rate differences | 1.0 | -11.9 |
Disbursements | 53.3 | 3.0 |
Repayments | -30.1 | -3.0 |
As at 31 December | 62.6 | 38.4 |
33. Taxes
Reconciliation of result before taxes and tax charge
2021 | 2020 | |
Result before taxes | 67.3 | 69.7 |
Applicable tax charge at average statutory tax rate | 16.8 | 17.4 |
Income not subject to tax | -19.7 | -21.9 |
Expenses not deductible for tax purposes | 0.6 | 0.3 |
Effect of the reversal of tax assets | -7.5 | 1.1 |
Changes in tax rates | -0.5 | |
Other effects | -0.7 | -0.3 |
Tax charge (income) | -11.0 | -3.4 |
Average tax rate on operations | -16.3% | -4.9% |
The average statutory tax rate is the Dutch corporate income tax rate of 25%.
The results of the participations of Corbion nv resulted in income which is not subject to tax under the provisions of the participation exemption (impact € -19.7 million).
Expenses not deductible for tax purposes include the effect of non-deductible costs related to employee share plans and the non-deductible part of business expenses (impact € 0.6 million).
The effect of the reversal of tax assets is caused by the recognition of a previously unrecognized deferred tax asset which materialized as a result of the sale of a plot of land in the municipality of Breda (impact € -9.3 million), as well the write-off of tax credits which cannot be effectively utilized (impact € 1.8 million).
The change in tax rates in 2021 is caused by the increase of the Dutch corporate income tax rate from 25% to 25.8% as per 1 January 2022.
Other effects include adjustments in respect of current-year events and the impact of changes to relevant regulations, facts, or other factors compared to those used in establishing the current tax position or deferred tax balance in previous years.
Deferred tax
Deferred tax | ||||
As at 31-12-2021 | As at 31-12-2020 | |||
Deferred tax assets | Deferred tax liabilities | Deferred tax assets | Deferred tax liabilities | |
Tax loss carry forward | 11.9 | |||
Provisions | 0.4 | 0.2 | ||
Current items | 4.4 | 1.6 | ||
Total | 16.7 | 1.8 | ||
40. Off-balance sheet commitments
Contingent liabilities
Under Section 2:403 of the Dutch Civil Code the company accepts liability for the debts incurred by Dutch group companies. The relevant declarations have been filed for perusal at the office of the relevant trade register.
Fiscal unity
Corbion nv and a number of subsidiaries in the Netherlands are part of fiscal unities for purposes of corporate income tax and value added tax. The companies which are part of a fiscal unity are jointly and severally liable for their liabilities.
42. Audit fees
Total fees charged by the auditor can be specified as follows.
Thousands of euros | KPMG Accountants nv 2021 | KPMG Other 2021 | Total 2021 | Total 2020 |
Audit of the financial statements | 640 | 212 | 852 | 821 |
Audit-related services* | 87 | 87 | 64 | |
Non-audit services | ||||
Total | 727 | 212 | 939 | 885 |
* Relates to assurance report on sustainability
Amsterdam, the Netherlands, 24 February 2022
Supervisory Board
Mathieu Vrijsen, Chair
Rudy Markham, Vice-Chair
Liz Doherty
Ilona Haaijer
Steen Riisgaard
Dessi Temperley
Board of Management
Olivier Rigaud, CEO
Eddy van Rhede van der Kloot, CFO
Sustainability statements
Materiality and stakeholder engagement
The foundation of our sustainability strategy is the materiality matrix, which we use to set priorities and ensure that we take a focused approach. A materiality analysis is about the identification of key issues that are important to our stakeholders and our strategy. The materiality matrix visualizes the results of this analysis, by plotting the relevant social, environmental, governance, and economic issues as a function of their importance to stakeholders (vertical axis) and the impact of Corbion’s strategy and activities on the issues (horizontal axis).
The materiality assessment is updated at least every three years, as input for our strategy updates. In 2020, we updated the materiality matrix using an in-depth methodology (see Figures 1 and 2), resulting in the identification of ten material themes. These ten themes are considered important by the majority of our stakeholders and are impacted by Corbion’s activities significantly.
The graph below shows the upper-right section of Corbion’s materiality matrix, highlighting the ten material themes.
Materiality matrix
The materiality determination process (Fig. 1) |
1.Theme identification |
We compiled a long list of relevant sustainability themes based on international standards, media, peers, sector trends and risk analysis. This list was then consolidated to create a shorter list of 22 themes. |
2. Stakeholder dialogues |
The importance of each theme to our stakeholders was determined through a survey and interviews. |
3. Determination of Corbion's impact |
The degree to which Corbion impacts each theme was ranked by Corbion's senior management, Executive Committee, and Supervisory Board through a survey. |
4. Materiality matrix calculation |
The resulting internal and external scores were plotted in a matrix and discussed with the Sustainability Sounding Board and the Executive Committee to determine the material themes. |
Key stakeholder groups (Fig. 2) | |
Our key stakeholders have been identified on the basis of two questions: | |
1. On which stakeholders does Corbion have a significant impact? | |
2. Which stakeholders have a significant impact on Corbion? | |
(Alphabetical order) | |
• Business partners | • Multi-stakeholder initiatives |
• Customers | • NGOs |
• Employees | • Potential future employees |
• Governments | • Shareholders |
• Industry associations | • Supervisory Board |
• Knowledge institutes | • Suppliers |
Material themes, definition, link to sustainability strategy
The table below lists the material themes, definitions, boundaries, management approach, and the link with Corbion’s sustainability framework and strategy.
Material theme | Safe and healthy working environment |
Definition | Provide a safe and healthy working environment for all employees, contractors, and visitors, and promote a safety culture in the supply chain. |
Management approach | • Record all incidents and implement corrective and preventive measures |
Boundaries | Corbion's own operations |
Link with Advance 2025 strategy | Preserving health |
Linked SDG | SDG 8 |
Material theme | Greenhouse gas emissions |
Definition | The reduction of GHG emissions of Corbion and its partners in line with the Paris climate agreement, by increasing energy efficiency, use of renewable energy, and supplier engagement. |
Management approach | • Transition to renewable electricity |
Boundaries | Corbion's value chain |
Link with Advance 2025 strategy | Preserving the planet |
Linked SDG | SDG 13 |
Material theme | Innovation for safe, healthy and sustainable food production |
Definition | Corbion's food ingredient solutions support the sustainable production of safe, healthy, and affordable food and the prevention of food waste along the value chain. |
Management approach | • Sustainability assessment integrated in our innovation stage-gate process |
Boundaries | Corbion's downstream value chain |
Link with Advance 2025 strategy | Preserving food and food production |
Linked SDG | SDG 2 |
Material theme | Sustainable procurement |
Definition | To ensure high-quality materials and security of supply, Corbion aims to manage social and environmental risks within our supply chain in a responsible and ethical way. |
Management approach | • Assessment of raw materials on potential risks related to procurement, quality (including food safety), and sustainability in our security-of-supply assessment, which is updated annually |
Boundaries | Corbion's supply chain |
Link with Advance 2025 strategy | Preserving wat matters |
Linked SDG | SDG 8 |
Material theme | Collaboration and partnerships |
Definition | Through collaboration with partners Corbion is able to provide better and innovative solutions for customers and society. |
Management approach | • Engagement with suppliers of our key raw materials regarding responsible sourcing, sustainable agriculture, and reduction of GHG emissions |
Boundaries | Corbion's value chain |
Link with Advance 2025 strategy | Preserving wat matters |
Linked SDG | SDG17 |
Material theme | Economic performance |
Definition | To ensure corporate longevity, and continuity in its solution offering, Corbion aims for healthy economic business returns. |
Management approach | |
Boundaries | Corbion's own operations |
Link with Advance 2025 strategy | Preserving wat matters |
Linked SDG | SDG 8 |
Material theme | Innovation for circular economy |
Definition | Corbion's biobased chemicals and materials support the transition to a circular economy |
Management approach | • Sustainability assessment integrated in our innovation stage-gate process |
Boundaries | Corbion's downstream value chain |
Link with Advance 2025 strategy | Preserving the planet |
Linked SDG | SDG12 |
Material theme | Product quality and safety |
Definition | Corbion delivers products that are safe, consistently meet specifications, and deliver the expected performance. |
Management approach | • Ensure certifications are in place to meet customer and industry-adopted standards and requirements |
Boundaries | Corbion's own operations |
Link with Advance 2025 strategy | Preserving health |
Linked SDG | SDG 3 |
Material theme | Sustainable and responsible agriculture |
Definition | Corbion aspires to create a sustainable and traceable agricultural supply chain by eliminating deforestation and by continuous improvement to reduce negative impacts on the environment while providing positive benefits such as carbon sequestration. |
Management approach | • Generic supplier code that states mandatory requirements on, amongst others, business ethics, human rights, labor conditions, the environment, and responsible procurement |
Boundaries | Corbion's supply chain |
Link with Advance 2025 strategy | Preserving food and food production |
Linked SDG | SDG 2, SDG 15 |
Material theme | Responsible business |
Definition | By conducting business in a responsible fashion, actively enforcing an ethical, anti-corruptive culture, Corbion is a trustworthy partner. |
Management approach | See Business conduct/compliance chapter |
Boundaries | Corbion's value chain |
Link with Advance 2025 strategy | Preserving wat matters |
Linked SDG | SDG 16 |
Corbion's impact on the Sustainable Development Goals
In preparation for our strategy update Advance 2025 we assessed our entire product portfolio and our value chain with a view to the potential – positive and negative – impact on the Sustainable Development Goals. The assessment involved the four steps summarized in the figure below.
See our Measuring what matters white paper that describes this assessment in detail.
SDG Assesments
In evaluating Corbion’s potential for contributing to the SDGs based on an analysis of our entire product portfolio, we were inspired by the “Business Reporting on the SDGs – An analysis of the goals and targets” publication developed by the Global Reporting Initiative and the UN Global Compact. This publication provides illustrative examples of actions businesses can take to impact the SDG targets. Our assessment identified the following relevant impact areas and associated SDG targets:
Impact category | Definition | Example |
Animal health |
| By promoting gut health, ALOAPUR® provides an effective solution for achieving superior animal performance, without the use of antibiotics. This contributes to sustainable food production systems (SDG 2.4) and to combating communicable diseases (SDG 3.3). |
Reduced environmental impact | Enable our customers to reduce their environmental impact by reducing Greenhouse Gas emissions, waste, or land use | The carbon footprint of Luminy PLA is lower than fossil-based materials with similar performance such as polystyrene. This contributes to achieving the goals of the Paris Agreement and therefore to SDG 13. |
Food safety | Protect food against food-borne pathogens by providing antimicrobial solutions | Corbion’s Opti.Form and Verdad products are used for Listeria control; this supports access to safe food (SDG 2.1) and helps prevent communicable diseases (SDG 3.3). |
Food waste | Ensure sustainable food production by preventing food waste | Corbion's food ingredient solutions support the sustainable production of safe, healthy, and affordable food and the prevention of food waste (SDG 12.3) along the value chain, which also increases the availability of and access to food (SDG 2.1). |
Health and health care | Preserve health by providing health care solutions | Corbion's PURASAL S/PF solutions for pharma are used for dialysis and IV fluids, and therefore contribute to preventing mortality from non-communicable diseases (SDG 3.4). Corbion’s products also allow for home treatment, which is more cost-efficient and increases accessibility to the treatment (SDG 3.8). |
Health and nutrition | Preserve health by providing food ingredients with nutritional benefits | PURACAL and Gluconal are used for mineral fortification in food products, which contributes to achieving the recommended daily intake of minerals (calcium, magnesium, etc.) and helps to prevent certain non-communicable diseases (SDG 3.4). |
Marine biodiversity | Ensure sustainable food production by protecting marine ecosystems | AlgaPrime DHA is a micro-algae-based omega-3 that reduces reliance on forage fish for fish oil in aquaculture feed. This contributes to SDG 14.2 by protecting marine ecosystems, to SDG 14.4 by preventing overfishing, and to SDG 2.4 by supporting the transition to a sustainable food system. |
Biobased economy | Enable the transition to a biobased economy using renewable biological resources sustainably to produce food and materials | Corbion’s products can replace synthetic chemicals with fermentation-based products derived from agricultural raw materials. This contributes to the sustainable management of natural resources (SDG 12.2) due to the reduced use of fossil-based raw materials. |
Less hazardous chemicals | Reduce the risks associated with producing and using chemicals | Corbion's PURASOLV solvents are not included in the SVHC (substances of very high concern) list from ECHA (European Chemicals Agency), nor are they in the SIN (Substitute it now) list from ChemSec (International Chemical Secretariat). PURASOLV can be used as non-toxic replacements for potentially unsafe solvents, such as NMP, DMAc, DMF, xylene, toluene, isophorone and chlorinated solvents (solvents that are restricted substances under REACH but can be used in agrochemical applications outside the EU). This contributes to SDG 3.9 and SDG 12.4 |
For each of the identified impact areas, internal and external documentation has been collected and reviewed by relevant Corbion Competence Leads and other experts to confirm that there is sufficient evidence supporting the impact of a product or product group. The supporting documentation included academic publications, R&D studies by external laboratories, internal test results, customer feedback, examples of commercial application, certifications and patents. We left out products for which we do not yet have sufficient evidence to claim a positive contribution to the impact category.
Corbion’s products are used in a number of different industries, and their ability to contribute to the achievement of the Sustainable Development Goals depends on the sector in which they are applied. For products we supply to the confectionery and sweet goods sub-markets, we do not claim positive impacts in the “health benefits” and “food waste reduction” categories. We also do not claim positive impacts for our products used in the oil and gas sector, since they cannot solve or eliminate the negative environmental impacts in this sector. The sector itself, which is based on finite resources, is in conflict with some of the SDGs (for example, SDG 12 Responsible consumption and production, and SDG 13 Climate action).
To determine the Corbion revenue contribution to preserving food and food production, health, and the planet, the entire Corbion product portfolio was mapped against the identified impact areas which are linked to these three themes. A similar approach was followed to determine the contribution of Corbion’s innovation portfolio to these three areas. In these calculations, preserving the planet includes impacts related to SDG 12, SDG 13, and SDG 14. In 2021, 60% of our global sales and 100% of our innovation projects contributed to preserving food and food production, health, and/or the planet.
EU Taxonomy
Code(s) | Absolute turnover1 (mln €) | Proportion of turnover | |
Taxonomy- eligible activities | |||
Manufacture of other low carbon technologies | 3.6 | 30.2 | 3% |
Manufacture of organic basic chemicals | 3.14 | 796.8 | 74% |
Turnover of Taxonomy- eligible activities | 827 | 77% | |
Turnover of Taxonomy-non-eligible activities | 243.8 | 23% | |
Total turnover | 1070.8 |
- 1 Reported as 'Net sales' in the consolidated income statement
Code(s) | Absolute capex1 (mln €) | Proportion of capex | |
Taxonomy- eligible activities | |||
Manufacture of other low carbon technologies | 3.6 | 1.1 | 1% |
Manufacture of organic basic chemicals | 3.14 | 135.5 | 75% |
Capex of Taxonomy- eligible activities | 136.6 | 76% | |
Capex of Taxonomy-non-eligible activities | 43.6 | 24% | |
Total capex | 180.2 |
- 1 Reported under the capital expenditure and acquisition of group companies sections of Property, plant, and equipment, Leases, and Intangible fixed assets
Code(s) | Absolute opex1 (mln €) | Proportion of opex | |
Taxonomy- eligible activities | |||
Manufacture of other low carbon technologies | 3.6 | 9.5 | 11% |
Manufacture of organic basic chemicals | 3.14 | 29.7 | 33% |
Opex of Taxonomy- eligible activities | 39.2 | 44% | |
Opex of Taxonomy-non-eligible activities | 49.8 | 56% | |
Total Opex | 89.0 |
- 1 All maintenance costs, rent and leases (excluding depreciation and impairment, including short-term leases) and R&D expenses (excluding amortization and impairment). These costs are part of the costs reported in the consolidated income statement lines Cost of sales, Research and development costs, and General and administrative expenses.
The tables above show information required under Regulation (EU) 2020/852 for which further regulations are currently still under development. As an example, the Taxonomy Regulations establishes six environmental objectives of which at reporting date only two environmental objectives (Climate change mitigation and Climate change adaptions) have been finalized. The disclosure therefore potentially does not provide a full overview of Corbion’s eligible activities as the four other environmental objectives are not yet considered. In future reporting years, other EU Taxonomy objectives need to be considered, which could potentially result in additional economic activities being considered as eligible.
For this reporting period, Corbion considers the following economic activities to be eligible under the act:
-
Manufacture of other low carbon technologies (3.6) - AlgaPrime DHA enables life-cycle GHG emission savings in the manufacture of aquaculture feed by offering an alternative to fish oil. The manufacturing of AlgaPrime DHA is therefore considered eligible.
-
Manufacture of organic basic chemicals (3.14) – according to Annex 1 of the Delegated act, this activity includes a number of specific chemicals and a category other chemicals (NACE 20.14). Corbion's business activities related to the manufacturing of organic acids, derivatives and emulsifiers can, in our view, be associated with NACE code C20.14 and are therefore considered eligible.
Under the current definitions of the EU Taxonomy, the manufacturing of functional blends for application in food, which is about 22% of Corbion's turnover, is not considered eligible.
Compared to Corbion's SDG assessment, which determines the alignment of Corbion's activities with the UN Sustainable Development Goals, the EU Taxonomy excludes the contribution of food waste reduction to climate change mitigation. According to UNEP (UNEP Food Waste Index Report 2021), 8-10% of global greenhouse gas emissions are associated with food that is not consumed. Corbion considers its solutions for shelf-life extension therefore to contribute to Preserving the planet, more specifically to SDG 12.3. In addition, the EU Taxonomy currently only considers environmental objectives. Corbion's SDG assessment also considers social objectives, specifically activities that contribute to SDG 2 Zero hunger, and to SDG 3 Good health and wellbeing. In total, 24% of the non-eligible turnover and 70% of the eligible turnover is contributing to the SDGs according to Corbion's SDG assessment.
External recognition
CDP
CDP runs a global disclosure system that enables companies, cities, states, and regions to measure and manage their environmental impacts, with a focus on climate change, water security, and deforestation. A detailed and independent methodology is used to assess companies, allocating a score of A to D- based on the comprehensiveness of disclosure, awareness, and management of environmental risks and demonstration of best practices associated with environmental leadership, such as setting ambitious and meaningful targets. Entities that do not disclose or provide sufficient information are marked with an F. The CDP questionnaire is aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Corbion has been participating in the CDP Climate Change and Supply Chain programs since 2016 to provide transparency on how we manage risks and opportunities related to climate change. In 2018, Corbion started participating in the Forests questionnaire and in 2020 we participated in the Water questionnaire for the first time. Our CDP disclosures on Climate Change and Water are publicly available.
Program | Corbion score | Sector average | Global average |
Climate change / General | A- | B- | B- |
Climate change / Supplier engagement | A | B- | B- |
Forests / Palm oil | B | B- | B- |
Forests / Soy | B | C | C |
Water / General | B | B | B |
EcoVadis
EcoVadis sustainability ratings and scorecards assess the environmental and social performance of companies. The assessment framework covers 21 sustainability criteria (from CO2 emissions to human rights and business ethics) aligned with GRI, Global Compact, and ISO 26000.
Corbion received the Platinum rating in the 2021 EcoVadis CSR assessment, which implies Corbion is in the top 1% of all suppliers in our sector, assessed worldwide. Our full EcoVadis sustainability profile is available on the Corbion website.
Sustainability governance
Under the chair of the Chief Executive Officer, the members of the Executive Committee have overall responsibility for sustainability and decide on the strategy and targets. The Executive Committee shares responsibility for developing objectives and the strategy, determining the risk profile, and implementing strategic and operational policies. Annually, there are two formal meetings with the full Executive Committee to discuss sustainability. Sustainability is integrated into daily operations and decision making on capital expenditure and innovation projects, mergers and acquisitions, and raw material sourcing, amongst others.
Regarding climate change, a dedicated Climate Change Steering Committee, chaired by the CEO with the CFO, COO, and CSSO as members, meets quarterly. This Steering Committee oversees Corbion’s climate-related risks and opportunities, monitors progress versus targets, and determines whether Corbion’s targets are still aligned with the latest science.
Corbion’s CO2-reduction R&D program is managed by the Sustainability Council, led by the CSSO, which includes representatives from Operations, R&D, and Finance. The council is responsible for the management of the stage-gate process and priority setting.
Corbion’s Sustainability Sounding Board, which includes representatives from all Corbion business units and functions, advises the Director of Sustainability and the CSSO on the sustainability strategy and specific initiatives.
To reward our employees for their contribution to our sustainability initiative, both the Short-Term Incentive Plan (STIP) and Long-Term Incentive Plan (LTIP) include sustainability targets. One of these targets is the progress toward achieving our Science Based Target. See the section Remuneration Board of Management for more information on these incentive plans; the STIP and LTIP targets that are agreed with the Board of Management also apply to all employees participating in the STIP and LTIP.
Reporting policy
We used the GRI Standards core option as a basis for our 2021 report. The selection of topics included in the report is based on a materiality assessment (see Materiality and stakeholder engagement). The environmental and social results for the material topics in this report cover all entities that belong to the scope of the consolidated financial statements. Our joint venture Total Corbion PLA is excluded. The scope of the environmental data includes Corbion’s manufacturing sites. Offices and R&D laboratories are not included, except for our R&D laboratories and offices located at our Gorinchem, Totowa, and Araucária manufacturing sites. Our new site in Querétaro, Mexico, which was acquired in 2021, is not yet included in the reporting scope.
Data is collected from various reporting systems. For each KPI, data reporters and data reviewers are designated, either at site level or at corporate level. The data reporter is responsible for the annual reporting of the data via the central reporting systems and for document retention and record-keeping related to this data. The data reviewer (from Finance) is responsible for the validation of the reported data. Site-specific data is consolidated and reviewed at corporate level by Finance and the Sustainability team. The review includes a comparison to data from previous years and a review of changes that could have impacted the results, such as improvement projects. In case of uncertainties, data estimation may be required, which is validated during review. We strive to continuously improve the data collection process and the reliability of the data. Significant changes that impact comparability including changes in measurement methods are explained in footnotes.
Non-financial KPIs marked by "√ " are reviewed by the external auditor.
Natural capital
Our environmental policies and the principal environmental risks for our business operations and value chain are described in the Sustainability sections on Responsible sourcing, Greenhouse gas emissions, and renewable electricity and Water. Our natural capital KPIs measure the performance of all our operations in terms of energy usage, water consumption, waste and by-product generation, and greenhouse gas (GHG) emissions.
Category | Unit | 2021 | 2020 | |
Production volume √ | kT | 625 | 571 1 | |
Energy √ | Electricity (renewable) | GJx10^3 | 667 | 548 |
Electricity (non-renewable) | GJx10^3 | 178 | 229 | |
Natural gas, purchased steam (non-renewable) | GJx10^3 | 2,493 | 2,431 | |
Biogas, purchased steam (renewable) | GJx10^3 | 359 | 251 | |
Total | GJx10^3 | 3,697 | 3,459 | |
Energy intensity √ | Total, specific | GJ/T | 5.9 | 6.1 1 |
GHG emissions √ | Scope I | kT CO2 equiv | 106 | 100 1 |
Scope II (market-based) | kT CO2 equiv | 49 | 57 1 | |
Scope II (location-based) | kT CO2 equiv | 91 | 96 1 | |
Scope III | kT CO2 equiv | 970 | 944 1 | |
Biogenic emissions2 | kT CO2 equiv | 71 | 50 1 | |
Scope I, specific | T CO2 equiv /T | 0.17 | 0.18 1 | |
Scope II, specific (market-based) | T CO2 equiv /T | 0.08 | 0.10 1 | |
Scope II, specific (location-based) | T CO2 equiv /T | 0.15 | 0.17 1 | |
Scope III, specific | T CO2 equiv /T | 1.55 | 1.65 1 | |
Water consumption3√ | Total | m3x10^3 | 5,456 | 4,793 |
Total, specific | m3/T | 8.72 | 8.39 1 | |
Waste (total4) √ | Recycled | kT | 22.52 | 23.59 |
Incinerated | kT | 1.64 | 2.45 | |
Landfilled | kT | 1.84 | 1.84 | |
Total | kT | 26.0 | 27.9 | |
Waste (non-hazardous) √ | Recycled | kT | 21.48 | 22.72 |
Incinerated | kT | 1.54 | 2.40 | |
Landfilled | kT | 1.81 | 1.75 | |
Total | kT | 24.83 | 26.87 | |
Waste (hazardous) √ | Recycled | kT | 1.04 | 0.86 |
Incinerated | kT | 0.10 | 0.05 | |
Landfilled | kT | 0.03 | 0.08 | |
Total | kT | 1.17 | 0.99 | |
By-products5 √ | Recycled | kT | 436 | 452 1 |
Incinerated | kT | 0 | 0 | |
Landfilled | kT | 11.59 | 9.22 | |
Total | kT | 448 | 461 1 |
- 1 Restated due to data-quality improvement.
- 2 Biogenic emissions mainly relate to indirect emissions from purchased renewable energy and direct emissions from algae fermentation, the consumption of biogas, and waste water treatment.
- 3 Sum of the water withdrawn from rivers, aquifers, rainwater reservoirs, municipal water supplies, including purchased steam.
- 4 Sum of hazardous and non-hazardous waste. Waste means any substance or object arising from our routine operations which we discard or intend to discard, or are required to discard.
- 5 Valuable by-products generated in the production of lactic acid.
- √ = reviewed by external auditor
Greenhouse gas emissions
We report our emissions in carbon equivalents from cradle to gate in accordance with the Greenhouse Gas Protocol. This includes Scope I emissions from direct production (for natural gas), Scope II emissions from purchased energy (for electricity and purchased steam), and Scope III emissions related to purchased goods and services, fuel and energy-related activities, upstream and downstream transportation, waste generated in operations, business travel, and employee commuting.
Compared to 2020, our total emissions increased by 2%, while our production volume increased by 9%. Our specific Scope I emissions decreased by 6% due to changes in the product mix and the implementation of energy savings projects. For Scope II, our market-based specific emissions decreased by 20%, due to the increased use of renewable electricity. Nine out of twelve Corbion sites are now 100% powered by renewable electricity, which increases our global coverage to 79%. Our specific Scope III emissions decreased by 6% due to the changes in product mix and supplier improvements. Corbion's biogenic emissions are related to the production of algae ingredients at our facility Orindiúva. This includes both direct biogenic emissions during the fermentation process and indirect biogenic emissions related to the renewable energy used. The facility uses renewable electricity and steam generated from the incineration of bagasse at the neighboring sugar mill. These biogenic emissions increased due to the increased production of algae ingredients.
Greenhouse gas emissions in Corbion’s value chain
See Materiality of Scope III categories below for an explanation of the relevance of the Scope III categories that are not reported.
Materiality of Scope III categories
The chart below shows which Scope III activities have the most significant GHG emissions, offer the greatest opportunities for reduction, and are the most relevant to our ambition to reduce our carbon footprint in line with the Paris climate agreement.
Annual Report TCFD 2021
The Task Force on Climate-related Financial Disclosures (TCFD) was established to improve transparency on the risks and opportunities related to climate change. TCFD distinguishes two categories of climate-related risks: (1) risks related to the transition to a lower-carbon economy and (2) risks related to the physical impacts of climate change. Corbion supports the TCFD recommendations and is committed to identifying and addressing both its own impact on the climate and the potential impact of climate-related developments on the company. Climate-related risks are disclosed at three levels of detail. Top risks are addressed in the general risk assessment; more detail on these risks and the scenario analysis process is provided here, in line with the TCFD recommendations, while full detail and initial quantification of climate-related risks and opportunities are disclosed through the CDP questionnaire.
Governance
The governance of climate-related risks and opportunities is described in the section Sustainability governance in this chapter.
Strategy
Our Advance 2025 strategy builds on Corbion’s fundamentals and strengths by bringing further focus to the business portfolio well aligned with global megatrends, including climate change. Corbion is very well positioned to support and capitalize on the transition to a low-carbon economy. Examples of some of these opportunities are PLA bioplastics (through our joint venture with TotalEnergies) and our Algae Ingredients platform. We are reducing our exposure to transition risks such as carbon pricing through several GHG reduction initiatives, which is described in more detail in the section Greenhouse gas emissions and renewable electricity in the Sustainability performance chapter. Corbion set a Science Based Target in 2019 and committed to reaching net-zero emissions by no later than 2050. One of our strategies to mitigate the impact of physical risks is the diversification of our primary feedstocks and sourcing locations.
Scenario analysis
In 2019, Corbion collaborated with Utrecht University to initiate a pilot study on the application of scenario analysis for small to medium-sized enterprises. This pilot has now been completed and is briefly summarized below. A full outline of the methodology used can be found in the joint publication in Wiley Business Strategy & the Environment.
In line with the TCFD recommendations we have assessed both transition and physical risks through the evaluation of a transition scenario and physical risk scenario. Over the course of two workshops senior managers were challenged to guide Corbion through a series of relevant events. In the first workshop the focus was on potential transitional events that could have an impact on Corbion’s business, whilst the second workshop focused mostly on physical risks. We performed the scenario analyses for each of our three business units separately, using the same format but tailoring the scenarios to cover topics, events, and geographical regions relevant specifically to that business unit.
-
Key assumptions for the transition scenario included a carbon price ranging from €50 - €150/t CO2 equiv, either globally or locally, stricter governmental regulations on different fronts, increasing competition between natural and agricultural lands with, as a consequence, competition between food and non-food crops, and changing consumer preferences.
-
Key assumptions for the physical risk scenario included an increase in the number and/or intensity of extreme weather events, increased water stress in certain regions with corresponding yield reductions in agricultural areas, supply-chain disruptions, and a reduced demand for biobased solutions.
Risk management
Corbion acknowledges climate change as a key strategic risk and, therefore, it is included in the overall risk management process. On top of this, specific risks are addressed on a case-by-case basis and climate change is considered a driver in several “regular” business risks. For more detail on individual risks please refer to our top risks and CDP response.
In assessing climate-related risks Corbion distinguishes between short-term (<1y), medium-term (1-5y), and long-term (5-15y) risks. The overall trend is that transition risks are more likely to manifest in the short and medium term, while physical risks become more relevant in the long run. The only short-term risk with a potentially significant impact that has been identified is carbon pricing in the EU. In the medium term no direct risks have been identified, but we are monitoring several emerging risks closely. These include changing consumer behavior, carbon pricing initiatives outside of the EU, the EU carbon border adjustment mechanism (CBAM), other regulatory developments (e.g. EU Taxonomy, the IFRS/ISSB prototype regulations), energy prices, and raw material pricing. Long-term trends we are monitoring include extreme weather events with the potential to severely disrupt direct operations, supply lines, and raw material availability, as well as chronic shifts in climate patterns that could cause a shift in local raw material availability and pricing.
Metrics and targets
Corbion discloses its Scope I, II, and III GHG emissions (see Sustainability statements/Natural capital/ Greenhouse gas emissions and CDP). In 2019, Corbion committed to reducing its CO2 emissions related to energy, key raw materials, and transport by 33% per metric ton of product by 2030 (base year: 2016). This target has been approved by the Science Based Targets initiative. Corbion also aspires to use 100% renewable electricity by 2025, a commitment made through the RE100 initiative. Current use of renewable electricity is 79%. We use internal carbon pricing to manage and understand the financial impact of GHG emissions on our business. Corbion uses three scenarios with carbon prices of € 80, € 100, and € 150 per metric ton, respectively, by 2030.
Human capital
Talent: from acquisition to retention, in a challenging environment
2021, like 2020, has been a challenging year for our people, as the world continued to be affected by the COVID-19 pandemic. This year more than ever, we have practiced and lived the Corbion values of Care, Commitment, Collaboration, and Courage.
Our people have been our top priority, with a focus on their well-being. We launched a partnership with Headspace, the mindfulness app, and reinforced communication and awareness around mental health and well-being throughout the year.
The global onboarding program we launched in 2019 formed a solid common foundation to onboard the few hundreds of new talents who joined Corbion in 2021, many of them remotely.
Inclusion and diversity
At Corbion, we believe in the power of diverse teams to create value and drive innovation and growth, and we apply this to our recruitment. We strive to attract talent based on diverse competencies, backgrounds, origins, to ensure that the diversity of our people reflects the societies in which we live and work.
We are continuously working on becoming a more diverse and inclusive organization and we do that through, amongst others, leadership, awareness-raising, more refined employee data, recruitment, and talent management.
Development
We are fully committed to developing our people to unleash their potential and create a highly engaged and performing organization. Our robust talent review and succession planning process contributes to strengthening our talent pipeline, ensuring quality, and timely succession at all levels of the organization. We also rely on our ongoing performance management cycle, which encourages managers to discuss objectives and give regular and timely feedback on performance to their teams (on the “what” and the “how”) and not just at the end of the year. This allows for continuous development and growth of our talent.
As for training and leadership development, this year some of our external programs had to be put on hold due to COVID-19 but, as an alternative, we provided several online trainings (for example, safety leadership, performance management, and well-being).
Company culture
Our values – Care, Commitment, Collaboration, Courage – along with the key Corbion behaviors – set clear direction, make the difference, focus on customers, and deliver through teamwork – are now fully embedded in our programs and processes and form the foundation of the Corbion culture.
To measure the health of our company culture, we run Engagement Surveys every 1.5 years. The last one was in 2020, the next will be in the second quarter of 2022. This year, we conducted follow-up interviews with a selected panel of talents to further explore some of the themes which emerged from the 2020 survey. Listening to our employees and their needs, is a critical foundation to sustain our high engagement levels.
Workforce profile
FTE of employees 2021 | % of workforce 2021 | FTE of employees 2020 | % of workforce 2020 | |
Total workforce | 2,493 | 2,267 | ||
By region | ||||
Asia | 309 | 12% | 227 | 10% |
EMEA | 810 | 33% | 702 | 31% |
Latin America | 496 | 20% | 429 | 19% |
North America | 878 | 35% | 909 | 40% |
By unit | ||||
Business units | 1,100 | 44% | 1,060 | 47% |
Sustainable Food Solutions | 712 | 65% | 641 | 61% |
Lactic Acid & Specialties | 205 | 19% | 193 | 18% |
Incubator | 45 | 4% | 43 | 4% |
Non-core | 138 | 12% | 183 | 17% |
CSSO | 101 | 4% | 71 | 3% |
Operations | 1027 | 41% | 889 | 39% |
Support functions | 265 | 11% | 247 | 11% |
By gender | Number of employees | Number of employees | ||
Female | 719 | 28% | 620 | 27% |
Male | 1,807 | 72% | 1,676 | 73% |
By employment contract | Number of employees | Number of employees | ||
Full time | 2,362 | 94% | 2,143 | 93% |
Part time | 164 | 6% | 153 | 7% |
Labor practices
Collective bargaining agreements | # of employees | % of workforce |
Total employees with agreements | 1,067 | 42% |
To ensure high-level employee-management interaction and responsible labor practices, we have joint management-worker health & safety committees in place at all production sites with formally elected employee representatives. In Thailand, the Election Welfare Committee has a formal quarterly meeting with employer representation by labor law to jointly review the welfare and working conditions. The members of the Election Welfare Committee are all employee representatives.
In addition, our Code of Business Conduct reflects our strong commitment to responsible labor practices. All Corbion employees are paid a living wage.
GRI Index
General standard disclosures
Indicator | Description | Location in report |
102-1 | Name of the organization | Cover of the annual report |
102-2 | Activities, brands, products, and services | Corbion at a glance |
102-3 | Location of the organization's headquarters | Corbion at a glance |
102-4 | Number of countries operating | Corbion at a glance |
102-5 | Nature of ownership and legal form | Corbion at a glance, How we safeguard long-term value |
102-6 | Markets served | Corbion at a glance |
102-7 | Scale of the reporting organization | Corbion at a glance, Company highlights |
102-8 | Information on employees and other workers | Sustainability statements |
102-9 | Supply chain | Sustainability performance, Sustainability statements |
102-10 | Significant changes to the organization and its supply chain | Financial statements |
102-11 | Precautionary principle or approach | Risk management |
102-12 | External initiatives | UN Global Compact |
102-13 | Memberships of associations | www.corbion.com/about-corbion/sustainability |
102-14 | Statement from senior decision-maker | Sustainability statements |
102-16 | Values, principles, standards, and norms of behavior | How we safeguard long-term value |
102-40 | List of stakeholder groups | |
102-41 | Collective bargaining agreements | Sustainability statements |
102-42 | Identifying and selecting stakeholders | Sustainability statements |
102-43 | Approach to stakeholder engagement | Sustainability statements |
102-44 | Key topics and concerns raised | Sustainability statements |
102-45 | Entities included in the consolidated financial statements | Group structure |
102-46 | Defining report content and topic boundaries | Sustainability statements |
102-47 | List of material topics | Sustainability statements |
102-48 | Restatements of information | Sustainability statements |
102-49 | Changes in reporting | Sustainability statements |
102-50 | Reporting period | Cover of the annual report |
102-51 | Date of most recent report | Back of the annual report |
102-52 | Reporting cycle | Annual |
102-53 | Contact point for questions regarding the report | Contact information |
102-54 | Claims of reporting in accordance with the GRI Standards | Sustainability statements |
102-55 | GRI content index | Sustainability statements |
102-56 | External assurance | Sustainability statements |
Specific standard disclosures
Indicator | Description | Location in report |
Material topic – Greenhouse gas emissions | ||
GRI 103: Management Approach 2016 | Greenhouse gas emissions and renewable electricity Sustainability statements | |
GRI 302: Energy 2016 | ||
302-1 | Energy consumption within the organization | Sustainability statements |
302-3 | Energy intensity | Sustainability statements |
GRI 305: Emissions 2016 | ||
305-1 | Direct GHG emissions (Scope I) | Sustainability statements |
305-2 | Energy indirect GHG emissions (Scope II) | Sustainability statements |
305-3 | Other indirect GHG emissions (Scope III) | Sustainability statements |
305-4 | GHG emissions intensity | Sustainability statements |
Material topic – Innovation for circular economy | ||
GRI 103: Management Approach 2016 | Innovation Sustainability statements | |
GRI 306: Effluents and waste | ||
306-2 | Waste by type and disposal method | Sustainability statements |
Material topic – Safe and healthy working environment | ||
GRI 103: Management Approach 2016 | Environment, health, and safety Sustainability statements | |
GRI 403: Occupational health and safety | ||
403-9 | Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities | Environment, health and safety Sustainability statements |
Material topic – Product quality and safety | ||
GRI 103: Management Approach 2016 | Product quality and safety Sustainability statements | |
FP5 | Percentage of production volume manufactured at sites certified by an independent third party according to internationally recognized food safety management system standards | Product quality and safety |
Material topic – Economic performance | ||
GRI 103: Management Approach 2016 | Strategy Sustainability statements | |
GRI 201: Economic performance | ||
201-1 | Direct economic value generated and distributed | Financial statements |
201-2 | Financial implications and other risks and opportunities due to climate change | Sustainability statements / TCFD /CDP 2021 submission |
Material topics which Corbion reports according to own indicators | ||
Material topic – Sustainable procurement | ||
GRI 103: Management Approach 2016 | Responsible sourcing Biobased raw materials Sustainability statements | |
Own indicators | • Raw materials covered by generic supplier code | Responsible sourcing Biobased raw materials |
Material topic – Sustainable and responsible agriculture | ||
GRI 103: Management Approach 2016 | Sustainable agriculture Sustainability statements | |
Own indicators | • Verified responsibly sourced cane sugar | Sustainable agriculture |
Material topic – Innovation for safe, healthy, and sustainable food production | ||
GRI 103: Management Approach 2016 | Innovation Sustainability statements | |
Own indicators | • Innovation projects contributing to preserving food and food production | Innovation |
Material topic – Collaboration and Partnerships | ||
GRI 103: Management Approach 2016 | Sustainability performance Sustainability statements | |
Own indicators | Qualitatively reported | Sustainability performance Sustainability statements |
Material topic – Responsible business | ||
GRI 103: Management Approach 2016 | Corporate governance | |
Own indicators | Qualitatively reported | Corporate governance |
UN Global Compact
"Corbion is a signatory to the United Nations Global Compact. We are committed to aligning our operations and strategies with these ten principles in the areas of human rights, labor, the environment, and anti-corruption. We will continue to support the principles and communicate our progress in terms of practical actions and outcomes." Olivier Rigaud, CEO, Corbion.
United Nations Global Compact Reference List
Topic | Principle | Reference |
Human rights | Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and | How we safeguard long-term value, Sustainability performance, Sustainability statements, Corbion Code of Business Conduct, Corbion Supplier Code, Corbion Cane Sugar Code |
Labor | Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; | How we safeguard long-term value, Sustainability performance, Sustainability statements, Corbion Code of Business Conduct, Corbion Supplier Code, Corbion Cane Sugar Code |
Environment | Principle 7: Businesses should support a precautionary approach to environmental challenges; | Our governance, Sustainability performance, Sustainability statements, Corbion Code of Business Conduct, Corbion Supplier Code, Corbion Cane Sugar Code, Who we are and what we do |
Anti-corruption | Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. | Our governance, Corbion Code of Business Conduct, Corbion Supplier Code, Corbion Cane Sugar Code |
Other information
Alternative performance measures (APM)
In this report, Corbion has included certain non-IFRS financial information. This information is presented to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. Corbion uses these measures to assess the performance of the business and believes that the information is useful to users of the financial information. The non-IFRS financial measures do not have a standardized meaning prescribed by the IASB, therefore may not be comparable to similar measures presented by other issuers.
The table below lists the alternative performance measures used and their definitions.
APM | Definition |
EBITDA | The operating result before depreciation, amortization, and impairment of (in)tangible fixed assets. |
Adjusted EBITDA | EBITDA as defined above after applying adjustments. |
Adjusted EBITDA margin % | Adjusted EBITDA as defined above divided by net sales x 100. |
Adjusted EBITDA excluding acquisitions and divestments, at constant currencies | Adjusted EBITDA as defined above excluding the impact of acquisitions and divestments, based on prior-year currency rates. |
Covenant EBITDA | Adjusted EBITDA as defined above increased by cash dividend of joint ventures received and annualization effect of newly acquired and/ or divested subsidiaries. |
Organic EBITDA growth | Adjusted EBITDA as defined above versus prior year excluding impact of acquisitions and divestments and excluding currency impact. |
Organic sales growth | Sales versus prior year excluding impact of acquisitions and divestments and excluding currency impact. |
Adjusted operating result | Operating result after adjustments. |
Adjusted result after taxes | Result after taxes after adjustments. |
Interest cover | Covenant EBITDA as defined above divided by net interest income and charges. |
Covenant net debt position | Borrowings (excluding subordinated loans) and lease liabilities less cash and cash equivalents, including third-party guarantees which are required to be included under the debt covenants. |
Total net debt position | Borrowings and lease liabilities less cash and cash equivalents, including third-party guarantees which are required to be included under the debt covenants. |
Capital employed | The sum of equity, non-current liabilities, interest-bearing current liabilities, and lease liabilities minus cash and cash equivalents. |
Average capital employed | Average of the quarterly average capital employed in the reporting period. |
Free cash flow | Cash flow from operating activities plus cash flow from investment activities. |
Return on capital employed (ROCE) | Adjusted operating result as defined above, including results from joint ventures and associates, divided by the average capital employed x 100. |
Adjustments | Adjustments relate to significant items in the income statement of such size, nature or incidence that in view of management require disclosure to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. These items include amongst others write-down of inventories to net realizable value, reversals of write-downs, impairments, reversals of impairments, additions to and releases from provisions for restructuring and reorganization, results on assets sold, gains on the sale of subsidiaries, joint ventures and associates, and any other provision being formed or released. Restructuring costs are defined as the estimated costs of initiated reorganizations, which have been approved by the Executive Committee, and which generally involve the realignment of certain parts of the organization. The company only adjusts for items when the aggregate amount of the events per line item of the income statement exceeds a yearly threshold of € 0.5 million as well as adjustments, each above € 0.1 million, in relation to previously recognized adjustments. |
The table below gives a selection of the APMs used versus the most directly comparable IFRS measure.
€ million | 2021 | 2020 |
Operating result | 82.0 | 104.1 |
Depreciation, amortization, and impairments | 89.4 | 61.6 |
EBITDA | 171.4 | 165.7 |
Adjustments to EBITDA | ||
- Sale of a plot of land in the Dutch municipality of Breda | -18.4 | |
- Sale of Frozen Dough activities | -11.3 | |
- Recognition of VAT receivable positions in Brazil | -6.1 | |
- Release of milestones as a result of impairment on the Fiberlive development | -5.0 | |
- Remeasurement of the purchase price of the subsidiary Total Corbion PLA (Thailand) Limited | -12.9 | |
- Insurance proceeds | -2.9 | -1.0 |
- Incremental cost as a result of the production outage in our Blair facility | 2.9 | |
- Settlement tax claim US | 1.3 | |
- Incidental write-down of inventory | 4.9 | |
- Restructuring costs | 0.8 | 1.3 |
- Demolition costs | 0.6 | |
- Advice costs | 0.5 | 0.8 |
- Acquisition costs | 0.9 | |
- Litigation claims | 0.9 | |
- Remeasurement contingent purchase price SB Renewable Oils | 0.2 | |
Total adjustments to EBITDA | -35.6 | -6.9 |
Adjusted EBITDA | 135.8 | 158.8 |
Adjusted EBITDA | 135.8 | 158.8 |
Cash dividend of joint ventures and associates | 4.3 | 4.4 |
Annualization effect of newly acquired subsidiaries | 0.3 | |
Covenant EBITDA | 140.4 | 163.2 |
Adjusted EBITDA (A) | 135.8 | 158.8 |
Net sales (B) | 1,070.8 | 986.5 |
Adjusted EBITDA margin (A/B) | 12.7% | 16.1% |
Operating result | 82.0 | 104.1 |
Adjustments to operating result | ||
- Adjustments to EBITDA | -35.6 | -6.9 |
- Impairments | 25.3 | 1.3 |
Total adjustments to operating result | -10.3 | -5.6 |
Adjusted operating result | 71.7 | 98.5 |
Net result | 78.3 | 73.1 |
Adjustments to result after taxes | ||
- Total adjustments to operating result | -10.3 | -5.6 |
- Remeasurement of the purchase price of the subsidiary Total Corbion PLA (Thailand) Limited in PLA JV | 6.0 | |
- Litigation proceeds in joint ventures | -0.2 | |
- Provision for US tax claim | -0.5 | 5.5 |
- Tax effects on adjustments | -7.6 | -2.1 |
Total adjustments to result after taxes | -18.6 | 3.8 |
Adjusted result after taxes | 59.7 | 76.9 |
Cash flow from operating activities | 22.4 | 109.0 |
Cash flow from investment activities | -119.4 | -76.9 |
Free cash flow | -97.0 | 32.1 |
Equity | 554.1 | 516.0 |
Borrowings | 433.8 | 281.9 |
Lease liabilities | 69.4 | 53.9 |
Other non-current liabilities | 16.9 | 18.5 |
-/- Cash and cash equivalents | -42.2 | -51.6 |
Capital employed 31/12 | 1,032.0 | 818.7 |
Capital employed end Q4 prior year (A) | 818.7 | 856.5 |
Capital employed end Q1 (B) | 891.3 | 855.4 |
Capital employed end Q2 (C) | 923.1 | 826.7 |
Capital employed end Q3 (D) | 1,003.4 | 847.3 |
Capital employed end Q4 current year (E) | 1,032.0 | 818.7 |
Average capital employed for the year ((A+B)/2+(B+C)/2+(C+D)/2+(D+E)/2)/4) | 935.8 | 841.8 |
Adjusted operating result | 71.7 | 98.5 |
Adjusted result from joint ventures and associates | 18.5 | 10.5 |
Adjusted operating result basis for ROCE (A) | 90.2 | 109.0 |
Average capital employed for the year (B) | 935.8 | 841.8 |
Return on capital employed (A/B) | 9.6% | 12.9% |
Borrowings | 433.8 | 281.9 |
Lease liabilities | 69.4 | 53.9 |
-/- Cash and cash equivalents | -42.2 | -51.6 |
Total net debt position | 461.0 | 284.2 |
Borrowings | 433.8 | 281.9 |
Lease liabilities | 69.4 | 53.9 |
-/- Subordinated loan | -99.4 | |
-/- Cash and cash equivalents | -42.2 | -51.6 |
Covenant net debt position | 361.6 | 284.2 |
Senior net debt position (A) | 361.6 | 284.2 |
Covenant EBITDA (B) | 140.4 | 163.2 |
Covenant net debt position/covenant EBITDA (A/B) | 2.6 | 1.7 |
Interest income (Note 7 consolidated financial statements) | -1.9 | -2.6 |
Interest expenses (Note 7 consolidated financial statements) | 9.3 | 10.1 |
Interest expense on lease liabilities (Note 7 consolidated financial statements) | 2.2 | 2.4 |
Net interest financial income and charges | 9.6 | 9.9 |
Covenant EBITDA (A) | 140.4 | 163.2 |
Net interest financial income and charges (B) | 9.6 | 9.9 |
Interest cover (A/B) | 14.6 | 16.5 |
Adjusted EBITDA | 135.8 | 158.8 |
Impact acquisitions and divestments | 4.6 | 1.3 |
Currency impact | 6.3 | 5.4 |
Adjusted EBITDA excluding acquisitions and divestments, at constant currencies | 146.7 | 165.5 |
Adjusted EBITDA prior year (A) | 158.8 | 145.9 |
Adjusted EBITDA excluding acquisitions and divestments, at constant currencies current year (B) | 146.7 | 165.5 |
Organic EBITDA growth ((B-A)/A)*100% | -7.6% | 13.4% |
Total Corbion PLA BV | ||
Operating result | 47.8 | 42.0 |
Depreciation, amortization, and impairments | 6.8 | 5.7 |
EBITDA | 54.6 | 47.7 |
For organic sales growth reconciliation, reference is made to page 23.
Group structure
As at 31 December 2021
Name | Nature of business | Proportion of ordinary shares held by the group (%) |
Principal subsidiaries | ||
Argentina | ||
Purac Argentina S.A. | Operating company | 100 |
Brazil | ||
Corbion Produtos Renovaveis Ltda. | Operating company | 100 |
China | ||
Corbion Trading (Shanghai) Co., Ltd. | Operating company | 100 |
France | ||
Corbion France SAS | Operating company | 100 |
India | ||
Corbion India PL | Operating company | 100 |
Japan | ||
Corbion Japan K.K. | Operating company | 100 |
Mexico | ||
Purac Mexico S. de R.L. de C.V. | Operating company | 100 |
The Netherlands | ||
Corbion Group Netherlands bv | Holding company | 100 |
Corbion PLA Holding bv | Holding company | 100 |
Corbion SB Oils Holding bv | Holding company | 100 |
Expalkan V bv | Holding company | 100 |
Purac Biochem bv | Operating company | 100 |
Poland | ||
Purac Polska Sp. z o.o. | Operating company | 100 |
Singapore | ||
Purac Asia Pacific PTE Ltd. | Operating company | 100 |
Spain | ||
Purac Bioquímica S.A.U. | Operating company | 100 |
Thailand | ||
Purac (Thailand) Limited | Operating company | 100 |
United Kingdom | ||
Expalkan II Closed Scheme Ltd. * | Pension funding company | 100 |
United States | ||
Corbion America Holdings Inc. | Holding company | 100 |
Corbion America Subholdings Inc. | Holding company | 100 |
Caravan Ingredients Inc. | Operating company | 100 |
Corbion Biotech Inc. | Operating company | 100 |
Purac America Inc. | Operating company | 100 |
Joint ventures | ||
The Netherlands | ||
CM Biomaterials bv, Gorinchem | Operating company | 50 |
Total Corbion PLA bv, Gorinchem | Operating company | 50 |
- * Expalkan II Closed Scheme Ltd. (registration number 08559472) is exempt from the requirements of the Companies Act 2006 by virtue of Section 479A.
Five years in figures
Millions of euros | 2021 | 2020 | 2019 | 2018 | 2017 |
Continuing operations* | |||||
Net sales | 1,071 | 987 | 976 | 897 | 892 |
Operating result | 82 | 104 | 61 | 88 | 122 |
Adjusted EBITDA 1 | 136 | 159 | 146 | 132 | 164 |
Result after taxes | 78 | 73 | 26 | 54 | 85 |
Earnings per ordinary share in euros 2 | 1.33 | 1.24 | 0.44 | 0.93 | 1.46 |
Diluted earnings per ordinary share in euros 2 | 1.32 | 1.23 | 0.43 | 0.92 | 1.44 |
Cash flow from operating activities | 22 | 109 | 114 | 100 | 118 |
Cash flow from operating activities per ordinary share, in euros 2** | 0.38 | 1.85 | 1.94 | 1.70 | 2.03 |
Depreciation/amortization (in)tangible fixed assets | 64 | 60 | 62 | 42 | 45 |
Capital expenditure on (in)tangible fixed assets | 165 | 90 | 83 | 58 | 49 |
Adjusted EBITDA margin % 3 | 12.7 | 16.1 | 14.9 | 14.7 | 18.4 |
Result after taxes/net sales % | 7.3 | 7.4 | 2.6 | 6.1 | 9.5 |
Total operations | |||||
Statement of financial position | |||||
Non-current assets | 837 | 689 | 719 | 616 | 498 |
Current assets | 462 | 334 | 327 | 303 | 295 |
Non-interest-bearing current liabilities | 228 | 174 | 161 | 140 | 129 |
Covenant net debt position 4 | 362 | 284 | 303 | 203 | 162 |
Total net debt position 5 | 461 | 284 | 303 | 203 | 162 |
Provisions | 39 | 30 | 28 | 28 | 24 |
Equity | 554 | 516 | 529 | 520 | 489 |
Key data per ordinary share | |||||
Number of issued ordinary shares | 59,242,792 | 59,242,792 | 59,242,792 | 59,242,792 | 59,242,792 |
Number of ordinary shares with dividend rights | 58,950,269 | 58,871,671 | 58,819,590 | 58,764,635 | 58,620,564 |
Weighted average number of outstanding ordinary shares ** | 58,926,368 | 58,851,367 | 58,819,590 | 58,698,602 | 58,097,383 |
Price as at 31 December | 41.44 | 46.15 | 28.12 | 24.46 | 27.00 |
Highest price in calendar year | 53.60 | 46.70 | 29.96 | 29.74 | 29.39 |
Lowest price in calendar year | 37.72 | 22.54 | 24.26 | 23.30 | 23.15 |
Market capitalization as at 31 December | 2,443 | 2,717 | 1,654 | 1,437 | 1,583 |
Earnings in euros ** | 1.33 | 1.24 | 0.44 | 0.93 | 1.46 |
Diluted earnings in euros ** | 1.32 | 1.23 | 0.43 | 0.92 | 1.44 |
Other key data | |||||
Cash flow from operating activities | 22 | 109 | 114 | 100 | 118 |
Depreciation/amortization (in)tangible fixed assets | 64 | 60 | 62 | 42 | 45 |
Capital expenditure on (in)tangible fixed assets | 165 | 90 | 83 | 58 | 49 |
Number of employees at closing date (FTE) | 2,493 | 2,267 | 2,138 | 2,040 | 1,794 |
Equity per share in euros 6 | 9.40 | 8.76 | 9.00 | 8.85 | 8.35 |
Regular dividend in euros per ordinary share (reporting year) | 0.56 | 0.56 | 0.56 | 0.56 | 0.56 |
Ratios | |||||
Covenant net debt position/ Covenant EBITDA 7 | 2.6 | 1.7 | 2.0 | 1.6 | 1.0 |
Interest cover 8 | 14.6 | 16.5 | 22.2 | 25.6 | 24.4 |
Balance sheet total : equity | 1:0.4 | 1:0.5 | 1:0.5 | 1:0.5 | 1:0.6 |
Net debt position : equity | 1:1.2 | 1:1.8 | 1:1.7 | 1:2.6 | 1:3 |
Current assets : current liabilities | 1:0.6 | 1:0.6 | 1:0.9 | 1:0.7 | 1:0.6 |
* The previous years have not been restated for discontinued operations later on.
** Only the preceding year has been restated for stock dividend.
- 1 Adjusted EBITDA is the operating result before depreciation, amortization, impairment of (in)tangible fixed assets and after adjustments.
- 2 Per ordinary share in euros after deduction of dividend on financing preference shares.
- 3 Adjusted EBITDA margin % is adjusted EBITDA as defined above divided by net sales x 100.
- 4 Covenant net debt position comprises borrowings (excluding subordinated loans) less cash and cash equivalents, including third-party guarantees which are required to be included under the debt covenants.
- 5 Total net debt position comprises interest-bearing debts less cash and cash equivalents, including third-party guarantees which are required to be included under the debt covenants.
- 6 Equity per share is equity divided by the number of shares with dividend rights.
- 7 Covenant EBITDA is adjusted EBITDA as defined above, increased by cash dividend of joint ventures received and annualization effect of newly acquired and/or divested subsidiaries.
- 8 Interest cover is covenant EBITDA as defined above divided by net interest income and charges.
Investor Relations
According to the Corbion Articles of Association, the Board of Management shall decide subject to the approval of the Supervisory Board which part of the profit is to be reserved. The remaining profit shall be at the disposal of the General Meeting of Shareholders. The General Meeting of Shareholders may decide upon a proposal by the Board of Management with the approval of the Supervisory Board to pay dividends to shareholders from the distributable equity.
In terms of dividend policy, Corbion’s ambition is to pay out annually a stable to gradually increasing absolute dividend amount per share (progressive regular dividend policy). For 2021, the dividend proposal is a regular dividend in cash of € 0.56 per ordinary share (2020: € 0.56).
Proposed appropriation of profit
Millions of euros | 2021 | 2020 |
Result after taxes | 78.3 | 73.1 |
Proposed addition to the reserves | 45.3 | 40.1 |
Available for cash dividend to holders of ordinary shares | 33.0 | 33.0 |
Regular cash dividend of € 0.56 (2020: € 0.56) per ordinary share with a nominal value of € 0.25 | 33.0 | 33.0 |
Share information
2021 | 2020 | 2019 | 2018 | 2017 | |
Number of ordinary shares with dividend rights | |||||
x 1,000 as at 31 December | 58,950 | 58,872 | 58,820 | 58,765 | 58,662 |
Market capitalization in millions of euros as at 31 December | 2,443 | 2,717 | 1,654 | 1,437 | 1,583 |
Highest share price | 53.60 | 46.70 | 29.96 | 29.74 | 29.39 |
Lowest share price | 37.72 | 22.54 | 24.26 | 23.30 | 23.15 |
Share price as at 31 December | 41.44 | 46.15 | 28.12 | 24.46 | 27.00 |
Average daily turnover of shares | 91,058 | 90,628 | 44,500 | 86,888 | 170,440 |
Trends in share price
Financial calendar*
29-Apr-22 | Publication of the interim management statement first quarter 2022 |
18-May-22 | Annual General Meeting of Shareholders |
20-May-22 | Ex date |
23-May-22 | Record date |
31-May-22 | Dividend payable for 2021 |
10-Aug-22 | Publication of half-year figures 2022 |
27-Oct-22 | Publication of the interim management statement third quarter 2022 |
17-May-23 | Annual General Meeting of Shareholders |
* subject to change
For more information, please contact:
Contact information
The Investor Relations and Media sections of the company website www.corbion.com contain up-to-date financial information about Corbion.
Analysts and investors:
Jeroen van Harten, Director Investor Relations
+31 (0)20 590 6293, +31 (0)6 2157 7086
Press:
Tanno Massar, Director Corporate Communications
+31 (0)20 590 6325, +31 (0)6 1158 9121
Contact
If you have any questions or remarks regarding this report, we kindly invite you to contact us.
Postal address
Corbion nv
P.O. Box 349
1000 AH Amsterdam
The Netherlands
Tel. +31 20 590 69 11
E-mail [email protected]
Website www.corbion.com
Registered office: Amsterdam
Registered Amsterdam No. 33006580