Tessenderlo Group nv

TESB

BE0003555639

Diversified Chemicals

Market Closed - Euronext Bruxelles Other stock markets 11:35:27 2024-04-24 am EDT			5-day change	1st Jan Change
23.7 ^EUR	0.00%		+0.64%	-16.11%

Mar. 27	TESSENDERLO GROUP : FY-23: Tessenderlo disappoints
Mar. 27	Transcript : Tessenderlo Group NV, 2023 Earnings Call, Mar 27, 2024

Tessenderlo : Statutory annual report

April 10, 2020 at 03:23 am EDT

Tessenderlo Group nv

Rue du Trone 130

1050 Brussels

0412.101.728 (the "Company")

Statutory annual report of the Board of Directors relating to

the financial year 2019

(article 3.6 of the Code of Companies and Associations)

Dear Shareholders,

In accordance with article 3.6 of the Code of Companies and Associations of the Companies' Code, the board of directors reports on the activities of the Company with respect to the financial year 2019.

OPERATING RESULT, FINANCIAL SITUATION AND CASH FLOWS

Total operating income decreased from 438,576,166 EUR in 2018 to 437,248,757 EUR in 2019. The turnover increased from 374,582,530 EUR in 2018 to 380,137,126 EUR in 2019, mainly following higher gelatin volumes (activity PB Leiner), which could more than offset the lower volumes of sulphates (activity Tessenderlo Kerley International) and sulfur derivatives (activity Performance Chemicals). The other operating income, which mainly consists of intragroup recharging of services and the sale of electricity - related to energy from an electricity purchase agreement, which is no longer used internally - decreased from 52,041,153 EUR in 2018 to 42,612,986 EUR in 2019, following lower energy prices.

The operating result increased from -11,533,567 EUR in 2018 to -7,278,350 EUR in 2019, as the result was positively impacted by the increase of turnover and the decrease of energy purchase prices.

The financial result increased from 16,762,269 EUR in 2018 to 171,753,306 EUR in 2019, a consequence of a higher amount of dividends received from subsidiaries and the realization of previously unrecognized exchange gains.

Tessenderlo Group nv recorded in 2019 a net profit of 164,249,980 EUR compared to a net gain of 4,020,632 EUR in 2018.

Tessenderlo Group - 2019 Statutory annual report | 2

Proposal for appropriation of the result.
The board proposes to appropriate:
- the profit of 2019, being	164,249,980 EUR
- increased by a transfer from untaxed reserves	1,137,113 EUR
- decreased by a transfer to untaxed reserves	-331,377 EUR
- increased by the result brought forward from previous year	314,533,730 EUR
Being a total of:	479,589,446 EUR
As follows:
- legal reserves	4,009 EUR
- profit to be carried forward	479,585,437 EUR

In accordance with article 7.149 of the Code of Companies and Associations, we request to you to grant discharge for the exercise of our mandate as well as the mandate of the external auditor for the year closed on December 31, 2019.

Tessenderlo Group is also publishing a sustainability report to make its sustainability efforts more visible to all stakeholders. The sustainability report of Tessenderlo Group is available in a digital version on www.tessenderlo.com.

Tessenderlo Group - 2019 Statutory annual report | 3

HUMAN RESOURCES

The Company relies on a team of experienced professionals and this contributes towards our realization of the business and strategic objectives across all areas.

As at December 31, 2019, the total number of employees (FTE) working for the company Tessenderlo Group nv amounted to 746.6.

We strongly believe that our people are the most important factor behind our success. In a global business where knowledge and expertise are essential, we build on our experienced and motivated employees who have an in-depth knowledge and understanding of both Tessenderlo Group nv and our products. HR managers, who make up part of the different management teams, are focused on the deployment of the updated business strategies by shaping the organization, defining clear roles and responsibilities, as well as attracting, retaining and developing the right people and building motivated teams that will realize the objectives of the group. They also guide each company through the cultural changes that are necessary for the successful implementation of the transformation plans.

Within our annual performance cycle, clear objectives that are in line with our strategy execution are defined internally in each of the different BUs. Each BU has a communication plan to cascade these objectives down to the shop floor and to communicate them into the minds, hearts and hands of our team members.

Talent management is a key process within our organization. As our business is constantly growing, we offer challenging jobs for enthusiastic people with backgrounds in Engineering, Sales and Business Development, as well as Operations Management and General Management. Furthermore, we offer a lot of opportunities in terms of personal development. We want to have a Personal Development Plan for every employee. On-the-job training and a permanent feedback culture are key factors, but we also organize learning and training programs for all levels of employees. We build on the strength of one another and deploy our people in a complementary manner. For our top executives, we focused on Strategy and Leadership in 2019. We also launched a central training program for our global sales force on Commercial Excellence. Within our Talent Review Process we prepare career paths and carefully develop our talent for the future. Furthermore, we have invested in platforms to facilitate these processes. Last but not least, HR is also responsible for solid reward systems and benchmarked and competitive salary packages. Pay for performance is the aim behind our Reward Strategy because we want to stimulate the entrepreneurial spirit of our employees.

Tessenderlo Group - 2019 Statutory annual report | 4

INNOVATION AND R&D

The Company continued in 2019 on the path of further strengthening our innovation capabilities through a sustained organizational focus on business development and innovation portfolio management in all of our businesses of our Company. Additional progress was also made in order to embed innovation at the highest levels in our business units. Our innovation choices are driven by the belief that 'Every Molecule Counts' and these are prioritized in alignment with our business strategies. In R&D and New Business Development, Tessenderlo Group nv continued to improve product, process and application technologies through a customer-centric approach, exploring new applications for existing products, as well as enhancing sustainability and environmental protection.

We are passionate about improving the lives and wellbeing of humans and animals and - in that context

our product innovations focus on the valorizing and 'upcycling' of by-products from other industries or making the most out of our natural resources. To this end, in 2019, we further developed and improved the standards of healthy collagen ingredients for humans, as well as protein-based and gelatin-based products for food and pet food applications. Furthermore, in 2019, Tessenderlo Group nv announced a breakthrough in bioprinting with the release of our first gelatin bio-ink in the Claro™ series of tissue-engineering products. ClaroBGI600 was created to combine gelatin and flow, at previously unheard-of levels. The proprietary Claro™ technology enables printing with lower pressure and excellent shape fidelity, without affecting the biocompatibility and final gel strength of the construct. This makes it the perfect material for 3D printing tissue engineering application.

For product and technology platforms applied across several business units within the group, Tessenderlo Group disposes of the Tessenderlo Group nv's "Tessenderlo Innovation Center "(located in Tessenderlo, Belgium). The Company also relies on our R&D expertise across a broad area of organic and inorganic chemistries at lab and pilot scale, supporting several Agro, Bio-valorization and Industrial Solutions innovation projects. Improved intellectual property awareness throughout both the business and business processes, as well as the strengthening of expert personnel in IP, led to an increase in intellectual property assets in the form of patents, trademarks, collaborative developments and licensing deals, which resulted in an increased customer-centric innovation and business development focus. Customers recognize Tessenderlo Group's innovative and entrepreneurial strengths. Tessenderlo Group nv welcomes close collaborations that will lead to unique applications and products. To this end, in 2019 we organized a global distributor event in the Tessenderlo Innovation Center to enable our customers to become more familiar with the versatility of our latest innovative ingredients.

Tessenderlo Group - 2019 Statutory annual report | 5

SAFETY, HEALTH, ENVIRONMENT AND QUALITY (SHEQ)

The focus on continuously improving Safety, Health, Environment and Quality (SHEQ) remains the top priority for Tessenderlo Group and our subsidiaries. During 2019, we implemented many initiatives and programs aimed at further improving our performance. The clear objective is to ensure that our employees understand, participate in and engage with our commitment to the safety and health of everyone and that we preserve, conserve and protect the resources we use to conduct our business. Our fundamental belief remains that 'Every Molecule Counts.'

GROUP SAFETY PERFORMANCE

During 2019, we continued to focus on the improvement of safety and health within the Company. Management has made this the number one priority and is regularly present in the workplace to conduct audits and inspections in order to ensure compliance and drive improvements. Safety and health performance is reviewed every month with the senior management of each plant and challenging targets are set each year in terms of realizing a continued reduction in accidents and incidents. During 2019, we completed the introduction of the Tessenderlo Group process for crisis management and communications, ensuring that we are even better prepared to effectively manage unplanned events.

SHEQ ACHIEVEMENTS

Agro

Tessenderlo Kerley International as part of Tessenderlo Group nv continued its focus in Ham and Tessenderlo on SHEQ and launched complementary 5 year action plans, for occupational and process safety improvements.

Bio-valorization

PB Leiner continued to make long-term improvements at the majority of its global sites including the Vilvoorde site. The focus on the reporting of 'near miss incidents' has also led to the ability to further eliminate unsafe conditions and reduce the number of first aid injuries by 15% in all plants of the PB Leiner Group. This core process has also been extended to cover environmental issues with a corresponding increased focus. In line with the strategy of the group, the PB Leiner business unit and the Vilvoorde site continued its investment in energy savings, the reduction of water consumption and improvements regarding wastewater treatment. We also worked on improving the quality of exhaust gasses and the reduction of CO2 and waste streams.

Tessenderlo Group - 2019 Statutory annual report | 6

RISK ANALYSIS

ANALYSIS OF THE MAJOR RISKS FOR TESSENDERLO GROUP NV

The Company analyzes on a regular basis the risks related to its activities worldwide and reports the results to the Audit Committee. Each year, all business units including the Company is requested to identify and evaluate the significant risks related to their business units.

Security

A security event which impacts the employees, sites, assets, environment, critical information or IT operating systems could have negative consequences for the Company. In order to manage and prevent risks, Tessenderlo Group nv has a strict safety policy in order to protect the employees. In order to guarantee a limitation of the security risks there are various initiatives on local and site level, and on group level there is a Group Safety Working Group to which the Company participates which primarily aims to evaluate and coordinate the various actions within the Company. In the Company there is a data protection policy in order to protect sensitive and confidential information and programs are set up in order to enhance cyber security within the Company.

Ethics and Compliance

Risks can arise from potential failure to comply with the Code of Conduct of Tessenderlo Group nv and the supporting internal procedures, as well as from changes to and application of the laws and regulations in the various jurisdictions in which Tessenderlo Group nv operates. In order to monitor the risk, training courses are organized within the Company with regard to the application of the code of conduct and anti-trust code, together with a possibility to report non-compliance of the rules to a hierarchical superior and, if required, to the Compliance Officer. Within the Company there is also a Compliance Committee which focuses on the coordination of the compliance activities within the group worldwide and defines the various training programs organized for the group.

Industrial safety

A major accident such as fire, explosion or release of harmful substances may result in possible fatalities, life-altering injuries, harm to the environment or local communities. Within the Company occupational safety is a top priority.

Transport accidents

An accident with chemical substances may result in risk of injuries to neighbors or the public. Within the Company there are various transport safety programs in order to reinforce prevention and safety.

Climate and Climate-related Risks

Particularly in the Agro and the Industrial Solutions Segments, exceptional environmental conditions, such as sustained heat waves, flooding or natural disasters can have an important impact on the operational results. Also the regulations and measures to limit the CO2 -emissions, such as the increase of the price of greenhouse gas emissions may have an influence on the activities.

Tessenderlo Group - 2019 Statutory annual report | 7

Usage of the Tessenderlo Group products

The usage risk stems from the possibility of third parties being injured, suffering an adverse health impact or property damage caused by the use of a Tessenderlo Group product as well as the resulting litigations or the inappropriate use of some Tessenderlo Group products for applications and/or markets for which the product is not designed or not in accordance with Tessenderlo Group's instructions for use.

Possible consequences are exposure to liability for injury or damage and product recalls. Product liability risk is the highest for products used in crop protection, food and healthcare applications. Apart from the various measures taken in order to inform third parties on the specifications and use of the product, the group has an insurance program in order to limit the financial impact of product liability risk.

Volatility of certain raw materials

The Company is particularly sensitive to the availability of or the fluctuations of the following raw materials: ammonia, potassium chloride and sulfur for the production of fertilizers and pig and beef bones and hides for the gelatin production.

The group's most important purchase contracts are centralized at group or the activities level. This method allows the Company to strengthen its negotiating position. To the extent possible, price fluctuations are, where possible, translated into its sales prices of the products.

Evaluation of projects and investments

The group can be subject to the risk that investment projects fail or do not meet expectations: the intended contribution to growth or cost efficiencies. A further thorough analysis of the investments, the processes and the follow-up of the investments in the various activities should lead to better decision-making.

Risk of an outbreak of an epidemic with a regional spread or pandemic

Due to its global presence, the group may be subject to the consequences of the local or worldwide spread of viruses that pose a risk to public health and may be serious and unexpected. Such outbreaks can have an impact on social life as well as on the economy. The Company considers that it is difficult to estimate the impact that the regional spread of viruses or a pandemic could have on the economies where we are active, and hence the impact these factors might have a significant impact on our financial results.

As part of the COVID 19 outbreak in 2020, the Company has taken some specific health, travel and safety incentives in order to protect its employees and others from the disease in accordance with the guidelines imposed by the WHO and the local authorities.

The Company is often active in markets and activities that are highly regulated by, among other things, strict rules and environmental provisions.

The Company cannot guarantee that in the future there will be no sudden or significant changes to, on the one hand, existing laws or regulations or, on the other hand, to trends where environmental awareness and sustainability requirements are central. Our Stakeholders could determine that the responsiveness of the Company to these trends has not been sufficient and as a consequence this could have an impact on our activities and financial results. Furthermore, the required changes and the related transformation costs could also have a significant impact on our activities. The Company ensures that, in the case of new investments or expansions, it always takes into account the impact on the environment and the sustainability of the solution in its long-term decision.

Tessenderlo Group - 2019 Statutory annual report | 8

Brexit

Tessenderlo Group nv has assessed and mapped the risks associated with the Brexit. Tessenderlo Group nv has a number of customers and suppliers in the United Kingdom. Because the number of customers and suppliers is rather limited, it is expected that the impact of the Brexit on the results of the Group will be rather limited. Tessenderlo Group nv has taken a number of actions to prepare itself with regard to the Brexit, such as setting up customs procedures, adapting the ICT systems and reviewing contractual provisions to ensure that deliveries to and from the United Kingdom continue to run smoothly.

ANALYSIS OF THE FINANCIAL RISKS1

Foreign currency risk

The Company is exposed to fluctuations in exchange rates which may lead to profit or loss in currency transactions. More in particular, the group incurs foreign currency risks on, amongst others, sales, purchases, investments and borrowings that are denominated in a currency other than the group's functional currency. The currency giving rise to this risk is primarily the USD. Movements in foreign currency therefore may adversely affect the group's business, results of operation or financial condition.

Subsidiaries are required to submit information on their net foreign exchange positions when invoiced (Customers, suppliers) to Tessenderlo Group nv, the parent company. All the positions are netted at the level of Tessenderlo Group nv and the net positions (long/short) are then sold or bought on the market. The main management tools are the spot purchases and sales of currencies followed by currency swaps.

Group borrowings are generally carried out by the group's holding and finance companies, which make the proceeds of these borrowings available to the operating entities. In principle, operating entities are financed in their functional currency. As from March 2015, Tessenderlo Group nv no longer uses currency swaps to hedge intragroup loans.

Credit risk

Tessenderlo Group nv is subject to the risk that the counterparties with whom it conducts its business (in particular its customers) and who have to make payments to the group, are unable to make such payments in a timely manner or at all. In order to manage its credit exposure, a credit committee per business unit has been created to determine a credit policy with credit limit requests, approval procedures, continuous monitoring of the credit exposure and dunning procedure in case of delays. The group has moreover globally elaborated a credit insurance program to protect accounts receivable from third party customers against non-payment. Every legal entity of the group is participating to this program and the insurance is provided by highly top rated international credit insurance companies. A large majority of the receivables (around 95%) is covered under this group credit insurance program. The contract protects the insured activities against non-payment with a deductible of 10% and foresees an indemnification cap at group level. The program foresees a pay-out of the insured claims within 6 months after declaration.

Tessenderlo Group nv has no significant concentration of credit risk. However, there can be no assurance that the Company will be able to limit its potential loss of proceeds from counterparties who are unable to pay in a timely manner or at all. The liquidities available at year-end are deposited for very short term at highly rated international banks.

1 For a more detailed overview of the financial risks related to the situation in 2019 and the Tessenderlo Group policy regarding the management of such risks, please see the Financial Instruments section in the consolidated Financial Report (note 26 - Financial instruments).

Tessenderlo Group - 2019 Statutory annual report | 9

Interest risk

Changes in interest rates may cause variations in interest income and expenses resulting from interest- bearing assets and liabilities. In addition, they may affect the market value of certain financial assets, liabilities and instruments.

At the end of 2019, the Company's interest-bearing financial instruments were mainly fixed rate instruments. Movements in interest rates would therefore not have a significant impact on the Company's cash flow or result.

Liquidity Risk

Liquidity risk is defined as the risk that a company may have insufficient resources to fulfill its financial obligations at any time. Failure to meet financial obligations can result in significantly higher costs, and it can negatively affect reputation.

In order to limit this risk, the Company took a series of actions:

the set-up of a factoring program at the end of 2009, which is put on hold since 2015.
a capital increase of 174.8 million EUR in December 2014.
the issuance in July 2015 of two series of bonds with a maturity of 7 years (the "2022 bonds") and 10 years (the "2025 bonds"). The total issue amount was 250.0 million EUR, of which 192.0 million EUR for the 2022 bonds and 58.0 million EUR for the 2025 bonds.
the replacement of the syndicated facility agreement (terminated in December 2015) by 5 year committed bi-lateral agreements for a total amount of 142.5 million EUR (of which part can be drawn in USD) with four banks. These facilities were renewed for 5 years in December 2019, and have no financial covenants and ensure maximum flexibility for the different activities.

In addition Tessenderlo Group nv uses a commercial paper program of maximum 200.0 million EUR.

Tessenderlo Group - 2019 Statutory annual report | 10

CORPORATE GOVERNANCE STATEMENT

TRANSPARENT MANAGEMENT

Tessenderlo Group nv follows the Belgian legislation as reference code for Corporate Governance. In case that the Company does not comply with one or more provisions of this code, it shall indicate with which provision it is not complying and give justified reasons for this deviation. The Belgian Corporate Governance Code is available at:

www.corporategovernancecommittee.be/en/home

The Company's adherence to the principles of Corporate Governance is reflected in the Corporate Governance Charter (hereinafter referred to as the "Charter").The Charter is available at https://www.tessenderlo.com/EN/about-tessenderlo-group/corporate-governance/corporate- governance-charter

On October 22, 2019 the Board of Directors of the Company adapted its Corporate Governance Charter to the new Corporate Governance Code 2020.

Through the extraordinary general meeting of shareholders of May 14, 2019 the Company has approved the opt-in, by which the new Belgian Code of Companies and Associations ('BCCA') is applied to the Company at an early stage. The new BCCA offers the Company the possibility of a significant simplification, a far-reaching flexibility, with more attention to the protection of the various stakeholders, linked with more transparency.

CAPITAL & SHARES

Capital

The capital of Tessenderlo Group nv at December 31, 2019, amounts to 216,231,862.15 EUR.

The share capital is represented by 43,154,979 shares without par value, entitling the shareholder to one vote per share.

By decision of the extraordinary general meeting of shareholders of July 10, 2019 the loyalty voting right has been introduced. As a consequence, each share which has been fully paid up and which is registered in the name of the same shareholder in the register of registered shares since at least two uninterrupted years, gives right to a double vote in accordance with the BCCA.

All Tessenderlo Group nv's shares are admitted for listing and trading on Euronext Brussels.

Warrants

As of December 31, 2019, there are no outstanding warrants. The 8,000 outstanding warrants issued in the context of the 2012 Plan (issue of naked warrants) were exercised in 2019.

Tessenderlo Group - 2019 Statutory annual report | 11

SHAREHOLDERS & SHAREHOLDERS STRUCTURE

On the basis of the notifications provided to the Company, the status of the voting rights of the Company at December 31, 2019, is as follows:

	Shareholder		Voting rights	%



Verbrugge nv (controlled by Picanol nv)	32,366,144	56.89%

Symphony Mills nv	1,832,200	3.22%

Coltrane Asset Management, L.P.	2,163,000	3.80%

Janus Henderson Group plc	1,561,002	2.74%

Norges Bank	1,287,899	2.26%

Carmignac Gestion SA	903,687	1.59%

Dimensional Fund Advisors L.P.	891,022	1.57%

Valarc Master Fund, Ltd.	630,402	1.11%

Free Float	15,253,349	26.81%

	Total		56,888,705	100.00%

Verbrugge nv is controlled by Picanol nv, which in turn is controlled by Artela nv. Artela nv and Symphony Mills nv are controlled by Mr. Luc Tack. At the date of this report, the Company has no knowledge of any agreements made between the shareholders.

Shareholders whose stake in Tessenderlo Group nv's capital surpasses the threshold of 1%, 3%, 5%, 7.5% and each multiple of 5%, in either direction, are required to notify the Belgian Financial Services and Markets Authority (FSMA) (TRP.Fin@fsma.be) and Tessenderlo Group nv (kurt.dejonckheere@tessenderlo.com).

GOVERNANCE STRUCTURE

The Company has opted for the monistic structure with a Board of Directors authorized to carry out all acts necessary or useful for the realisation of the Company's objective, with the exception of those reserved by law to the general shareholders' meeting.

Tessenderlo Group - 2019 Statutory annual report | 12

BOARD OF DIRECTORS

Composition

At December 31, 2019, the composition of the Board of Directors of Tessenderlo Group nv was as follows:

	Start of initial term	End of term


Non-Executive Directors


Mr. Karel Vinck	March 17, 2005	May 2023


Independent Non-Executive Directors


Management Deprez BVBA represented by
its permanent representative Mrs. Veerle	June 6, 2017	May 2021
Deprez

Philium BVBA represented by its
permanent representative Mr. Philippe	June 2, 2015	May 2023
Coens

ANBA BVBA represented by its permanent	June 6, 2017	May 2021
representative Mrs. Anne-Marie Baeyaert



Executive Directors


Mr. Luc Tack	November 13, 2013	May 2023

Mr. Stefaan Haspeslagh - Chairman	November 13, 2013	May 2022

The composition of the Board of Directors fulfils the objective of assembling complementary skills in terms of age, competencies, experience, and business knowledge.

On December 31, 2019, the Board of Directors was in full compliance with the Law of July 28, 2011, requiring that as of January 1, 2017, one-third of the members of the Board of Directors should be of the opposite gender. All meetings of the Board of Directors were attended by the Secretary of the Board of Directors and the Vice President Finance & Investor Relations.

Activities

The Board of Directors convened according to a previously determined schedule. The Board of Directors met six (6) times during 2019.

During 2019, the Board's main areas of discussion, review and decision were:

the group's long-term strategy;
the financial statements and reports;
the 2019 budget;

Tessenderlo Group - 2019 Statutory annual report | 13

proposals to the general and extraordinary shareholders' meetings;
approving the proposal to reappoint directors and to reappoint a member of the Audit Committee;
the approval of the special proxy to Mr. Luc Tack and Mr. Stefaan Haspeslagh with regard to real estate transactions;
the remuneration policy and the remuneration of the members of the Executive Committee;
the review of a long-term incentive plan for members of the ExCom and of senior management;
the financial communication and reporting by segment;
the effectiveness of the Enterprise Risk Management and Compliance framework;
the approval of various commercial agreements;
the approval of various investment files and the incorporation of a new affiliated company in Brazil;
the approval of the modified Corporate Governance Charter of the Company.

Evaluation of the Board of Directors

Evaluations of the functioning of the Board of Directors, the Nomination and Remuneration Committee and the Audit Committee are performed periodically. In the context of such evaluations, the members can give a scoring (from 1-5) on different subjects relating to the board and committee functioning and can share their views on areas for improvement.

Such evaluations are performed through the use of a self-assessment questionnaire developed by the Secretary of the Board of Directors. The exercise focuses primarily on the following domains: role, responsibilities and the composition of the Board of Directors and the committees, the interactions between Directors, the conduct of the meetings and evaluation of the training and resources used by the Board of Directors and/or the committees.

Where appropriate, the individual Directors also share their view on how the Board of Directors and the committees could improve their operation. The Chairman and the Secretary of the Board of Directors share the results of the evaluation with the Directors and formulate initiatives for improvement. In 2019 the Directors were invited to complete a self-assessment questionnaire for the evaluation of the Board of Directors. The results will be discussed during a meeting of the Board of Directors in 2020. The evaluation of the Audit Committee and the Nomination and Remuneration Committee has been postponed until 2020 due to the appointment of a new statutory auditor in 2019.

Appointment of the members of the Board of Directors

In its selection process for members of the Board, the Board integrates criteria such as variety of competences, age and gender diversity.

Board Committees

General

On December 31, 2019, the following Committees were active within the Board of Directors of Tessenderlo Group:

The Nomination and Remuneration Committee
The Audit Committee

Tessenderlo Group - 2019 Statutory annual report | 14

Please see the Charter for a description of the operations of the various Committees on www.tessenderlo.com.

Nomination and Remuneration Committee

On December 31, 2019, the Nomination and Remuneration Committee was constituted as follows:

Mr. Karel Vinck (Chairman)
Philium BVBA represented by its permanent representative Mr. Philippe Coens (Independent)
Management Deprez BVBA represented by its permanent representative Mrs. Veerle Deprez (Independent)

A majority of the members of the Nomination and Remuneration Committee meets the independence criteria set forth by Article 7:87 §1 of the BCCA and the Corporate Governance Charter and the committee demonstrates the skills and the expertise requested in matters of remuneration policies as required by Article 7:100 of the BCCA.

The Nomination and Remuneration Committee met two (2) times in 2019.

Activities of the Nomination and Remuneration Committee

In 2019, the Nomination and Remuneration Committee discussed and made recommendations regarding the Executive Committee remuneration package. The Committee made recommendations regarding the reappointment of directors and the review of the long-term incentive plan for the ExCom and senior management. The Nomination and Remuneration Committee also prepared the remuneration report, as included in the 2018 annual report.

The Committee also discussed the changes in the Corporate Governance Code 2020 and more especially the changes with respect to the remuneration policy and the remuneration report.

In compliance with the Corporate Governance Charter, the majority of the members of the Nomination and Remuneration Committee are independent.

Evaluation of the Nomination and Remuneration Committee

For information on the evaluation process of the Nomination and Remuneration Committee, please refer to the section "Evaluation of the Board of Directors".

Audit Committee

At December 31, 2019, the Audit Committee was constituted as follows:

Philium BVBA represented by its permanent representative Mr. Philippe Coens (Independent) (Chairman)
ANBA BVBA represented by its permanent representative Mrs. Anne-Marie Baeyaert (Independent)
Mr. Karel Vinck

The Audit Committee met according to a previously determined schedule; i.e. five (5) times during 2019.

Tessenderlo Group - 2019 Statutory annual report | 15

The CEO, the COO-CFO, the VP Finance and Investor Relations, the Group Internal Auditor as well as the statutory auditor attended the meetings of the Audit Committee. The other Directors were invited to participate to the meetings of the Audit Committee without any voting rights.

As legally required, the Audit Committee has among its members at least one independent Director with the necessary accounting and auditing expertise.

The members of the Audit Committee fulfil the criterion of competence with their own training and by the experience gathered during their previous functions. In compliance with the Charter, the majority of the members are independent Directors.

Evaluation of the Audit Committee

For information on the evaluation process of the Audit Committee, please refer to the section "Evaluation of the Board of Directors".

Activities of the Audit Committee

In addition to monitoring the integrity of the quarterly financial statements and financial results press releases per semester, including disclosures, consistent application of the valuation and accounting principles, consolidation scope, closing process quality and accounting estimates, the Audit Committee heard reports from the external auditors regarding the year-end audit scope, the internal control system, the key audit matters and the valuation and accounting treatment of certain exceptional items.

The Audit Committee also addressed specific topics such as monitoring the effectiveness of the Enterprise Risk and Compliance Management systems and made recommendations regarding the further follow-up of improvement actions. Further, the Audit Committee reviewed the status of the major pending litigations.

The Audit Committee also followed up on the findings and recommendations of the external auditors, reviewed their independence and approved requests for non-audit services.

The Audit Committee also heard the Group Internal Auditor on the Internal Audit program for 2019, the risk assessment analysis and the activity reports of the internal audits which had been carried out, as well as on the review of the follow-up actions taken by the Company to remedy certain weaknesses identified by the Internal Audit Department. The Audit Committee also approved the internal control plan for the year 2019 and heard reports from Internal Control on its various findings.

In addition, the Audit Committee made recommendations with regard to the appointment of a new statutory auditor.

Tessenderlo Group - 2019 Statutory annual report | 16

Attendance rate for members of the Board of Directors meetings and members of the special committees meetings in 2019:

Number of meetings in 2019

Philium BVBA represented by its permanent representative Mr. Philippe Coens

Mr. Stefaan Haspeslagh

Mr. Luc Tack

Mr. Karel Vinck

Management Deprez BVBA represented by its permanent representative

Mrs. Veerle Deprez

ANBA BVBA represented by its permanent representative Mrs. Anne-Marie Baeyaert

	Board of		Audit		Nomination &

				Remuneration
	Directors		Committee
				Committee


6		5	2

6/6		5/5	2/2

6/6

6/6

6/6		5/5	2/2

6/6				2/2

6/6		5/5

EXECUTIVE COMMITTEE (EXCOM)

Roles and responsibilities

As per December 31, 2019, the ExCom of Tessenderlo Group was constituted as follows:

Mr. Luc Tack (CEO)
Mr. Stefaan Haspeslagh, representative of Findar BVBA (COO-CFO)

Evaluation of the ExCom

At least once a year, the ExCom reviews its own performance.

Activities of the ExCom

The Board of Directors has empowered the ExCom to enable it to perform its responsibilities and duties. Taking into account the Company's values, its risk appetite and key policies, the ExCom shall have sufficient latitude to propose and implement the corporate strategy.

The CEO chairs the ExCom and ensures its organization and proper operation. In principle, the ExCom meets every week, and additional meetings may be convened at any time by any of its members. On a monthly basis the ExCom meets with the company's Business Units in order to review and discuss the strategic decisions and the operational performance of the Business Units. A comparable performance dialogue is organized with representatives of the supporting group functions.

Tessenderlo Group - 2019 Statutory annual report | 17

The ExCom is responsible for:

running the Company;
overseeing the proper organization and operation of the Company, ensuring oversight of its activities, including the introduction of internal control processes for the identification, assessment, management and monitoring of financial and other risks;
the appointment of senior executives of the Company and determination of the senior executives compensation policies;
the main decisions and investments involving amounts under the thresholds as defined by the Board of Directors;
preparing the proposals for decisions on those matters under the competence of the Board of
Directors, including the complete, timely, reliable and accurate preparation of the Company's annual accounts, in accordance with the applicable accounting standards and policies of the
Company, as well as the Company's required disclosure of the financial statements and other material financial and non-financial information;
presenting the Board of Directors a balanced and understandable assessment of the
Company's financial situation;
providing the Board of Directors in due time with all information necessary for the Board of Directors to carry out its duties;
executing and implementing the decisions taken by the Board of Directors.

The ExCom tasks are further described in the ExCom terms of reference as set out in Exhibit G of the Corporate Governance Charter.

*The Senior Executives of the Company are those executives who together with the ExCom manage and determine the strategy of the Businesses as well as the Heads of the Functional departments.

Tessenderlo Group - 2019 Statutory annual report | 18

REMUNERATION REPORT: DIRECTORS

Remuneration policy

It is the responsibility of the Board of Directors of the Company to make proposals to the shareholders regarding the remuneration of the Directors.

The Nomination and Remuneration Committee makes proposals to the Board of Directors concerning:

the remuneration for participating in the Board and the Board's Committees meetings;
the remuneration awarded for assignments related to special mandates.

In order to determine the remuneration of the Directors, a benchmarking exercise of similar Belgian companies has been performed. Membership of Committees entitles the participants to an attendance fee in line with the benchmark. Finally, the Chairman receives an additional fee for his responsibility as Chairman in line with the benchmark.

By decision of the General Shareholders' Meeting of June 7, 2016, each Director receives a fixed annual fee of 25,000 EUR. This remuneration covers the activities as member of the Board of Directors, the Audit Committee and the Nomination and Remuneration Committee. Moreover, the following additional fees are granted:

an attendance fee of 1,000 EUR per half day attendance;
an additional annual fee of 30,000 EUR for the chairman of the Board of Directors; and
an additional annual fee of 3,000 EUR for the chairman of the Audit Committee.

Remuneration is paid during the year in which the meetings were held. The attendance fee of 1,000 EUR is also attributed to the directors who attend the meeting as invitee.

Tessenderlo Group - 2019 Statutory annual report | 19

Remuneration received

Member

Philium bvba, represented by its permanent representative

Mr. Philippe Coens (independent non-executive director)

Management Deprez bvba, represented by its permanent representative Mrs. Veerle Deprez (independent non-executive director)

ANBA bvba, represented by its permanent representative Mrs. Anne-Marie Baeyaert (independent non-executive director)

Stefaan Haspeslagh (executive director)

Luc Tack (executive director)

Karel Vinck

(non- executive director)

GENERAL TOTAL

2019		Earned fees (in EUR)



Fixed annual fee	25,000.00
Additional fixed fee for Chairman of AC	3,000.00
Attendance fee per half day attended	8,000.00
Total remuneration	36,000.00

Fixed annual fee	25,000.00
Attendance fee per half day attended	8,000.00
Total remuneration	33,000.00

Fixed annual fee	25,000.00
Attendance fee per half day attended	8,000.00
Total remuneration	33,000.00

Fixed annual fee	25,000.00
Additional fixed annual fee for	30,000.00
Chairman Board
Attendance fee per half day attended	8,000.00
Total remuneration	63,000.00

Fixed annual fee	25,000.00
Attendance fee per half day attended	8,000.00
Total remuneration	33,000.00

Fixed annual fee	25,000.00
Attendance fee per half day attended	8,000.00
Total remuneration	33,000.00


		231,000.00

Tessenderlo Group - 2019 Statutory annual report | 20

REMUNERATION REPORT: EXECUTIVE COMMITTEE (EXCOM)

Remuneration policy

This chapter describes the principles underlying Tessenderlo Group nv's remuneration policy, management remuneration, structure and philosophy. The Nomination and Remuneration Committee determines the principles of the remuneration policy for the ExCom members (the CEO & CFO-COO) and submits them to the Board of Directors. The aim is to achieve total remuneration packages that are attractive and in line with the market.

Tessenderlo Group nv annually reviews the positioning of the total remuneration of the ExCom members to direct competitors, quoted companies in the BELMid and other companies active in similar industries as wherein Tessenderlo Group operates. Our remuneration policy and total compensation is positioned on the market median or slightly above the market median, with a strong emphasis on variable compensation. Variable compensation is based for 75% on the financial results of the group (EBIT) and for 25% on the individual performance contributing to the long -term sustainable growth of Tessenderlo Group. The individual performance will be assessed based on achieving individual targets as defined by the Nomination and Remuneration Committee and the Board of Directors. In this respect we also refer to the "Code of Conduct" of Tessenderlo Group nv , which lists the guiding principles and key values.

The internal and external competitive landscape of and around Tessenderlo Group to which the Company belongs, is changing rapidly. In order to realize the group's ambitions in this challenging environment, the organization needs to perform strongly and focus on the implementation of a sustainable strategy. Talented managers are indispensable in terms of achieving this goal. The remuneration policy aims to link this strategy and the company's objectives to the performance and remuneration of management.

In this way, the Company creates a globally consistent framework for the development, remuneration and empowerment of its people. The Company considers commitment, recognition and leadership as important foundations for employee engagement. This enables the group to attract, retain and motivate the best talents to achieve both short-term and long-term objectives. This is all within the context of a globally consistent remuneration policy that rewards the contribution towards and the achievement of company objectives and the generation of shareholder value.

The Group Reward principles are:

Recognition and leadership are key for employee and team engagement.

Our compensation system will serve to attract and retain the talent that the group requires to meet its short and long term goals.

Our remuneration policy will be positioned on or just above the median, and tested annually against a selected basket of relevant industry references and industries in which the group is active.

Our base salary will drive and reward growing competencies, showing the right corporate attitudes and living according to the group's guiding principles.

Our variable remuneration policy links the success of the group to the various business units, departments, teams and individual contributions.

Our job grading and our compensation system for external/internal appointments are based on an objective methodology and measurable market data.

Our compensation system will never knowingly discriminate between employees on any grounds.

Tessenderlo Group - 2019 Statutory annual report | 21

Compensation package

The ExCom remuneration package consists of the following items:

Fixed compensation
Variable compensation
Other compensation items

Fixed compensation

The fixed part of the remuneration compensates individual members as per market reference and in line with their level of skill and position within the group combined with the right behaviour and living according to the group's guiding principles.

Variable compensation

The variable compensation of the members of the ExCom is based on short and long term objectives linked to group results and individual performance.

The incentive plans do not explicitly provide any "claw-back" provisions entitling the Company to reclaim the compensation paid on the basis of incorrect financial data. The addition of the necessary documentation and provisions in the agreements with the ExCom members, which enable the company to reclaim variable remuneration, or withhold payment of variable remuneration, in the event of financial misconduct, fraud, deceit, non-compliance with a non-compete obligation and/or gross negligence, will be submitted for approval to the Board of Directors in the first quarter of 2020.

I. Short-term variable compensation

Tessenderlo Group nv has developed a short-term variable compensation plan in order to ensure that all ExCom members are compensated according to the overall performance of Tessenderlo Group.

The short term variable compensation for the ExCom members varies between a minimum of 0% and a maximum of 135% of the fixed remuneration for the CEO and between a minimum of 0% and a maximum of 120% of the fixed remuneration for the CFO-COO.

The objectives measured over the calendar year are set on the group financial and strategic objectives with a modifier for personal performance, proposed by the Nomination and Remuneration Committee. The variable compensation is linked for 75% to the financial results of the group (EBIT) and for 25% to individual performance contributing to the long term sustainable growth of Tessenderlo Group. In this respect we also refer to the "Code of Conduct" of Tessenderlo Group.

The personal modifier is linked to progress in strategy execution and business transformation within the group. The evaluations of the CEO target objectives against the realizations are performed by the Nomination and Remuneration Committee after the end of the financial year and submitted for approval towards the Board of Directors. The evaluation for the COO-CFO is performed after the end of the financial year by the CEO and submitted for approval to the Nomination and Remuneration Committee and Board of Directors.

Tessenderlo Group - 2019 Statutory annual report | 22

II. Long-term variable compensation

Long Term Incentive (LTI) Plan

A long-term incentive plan was approved by the Board of Directors on March 12, 2019. The intention of the LTI Plan is to create an incentive for senior management (including ExCom members) to further drive increased shareholder value and the sustainable growth of the Company. This LTI plan covers a 3 year period (calendar years 2019-2021), with pay out in April 2022, based on pre-set performance metrics of the Tessenderlo Group.

The long term variable compensation for the ExCom members varies between a minimum of 0% and a maximum of 135% of the fixed remuneration for the CEO and between a minimum of 0% and a maximum of 120% of the fixed remuneration for the CFO-COO.

85% of the LTI is linked to Tessenderlo Group's Adjusted EBITDA, measured over the calendar years 2019, 2020 & 2021.

15% of the LTI is linked to safety targets, determined for each individual Business unit and measured via the "Tessenderlo Group Lost Time Incident" or "LTA" frequency rate long term trend line.

III. Other compensation items

The benefits paid to the ExCom members include participation in the extra-legal pension plan of the defined contribution type, a hospitalization insurance, eco-cheques and representation allowance - all under the same conditions applicable to other members of senior management.

The ExCom members also benefit from certain other benefits such as a car allowance.

Remuneration earned in 2019

Each year, the Nomination and Remuneration Committee evaluates the appropriate compensation of the ExCom. These recommendations result from objective third party market studies, to ensure the competitiveness of the compensation packages and to stay in line with market movements.

Tessenderlo Group nv benchmarks the ExCom's compensation against a peer group of companies of similar size with the same type of activities of Tessenderlo Group. The actual compensation level for each individual member is set according to the benchmark and takes into account the member's performance and experience in relation to the benchmark.

Compensation of the COO-CFO is reviewed on an annual basis by the Nomination and Remuneration Committee on the recommendation of the CEO, while compensation of the CEO is reviewed by the Nomination and Remuneration Committee on the recommendation of the Chairman of the Board of Directors.

Tessenderlo Group - 2019 Statutory annual report | 23

Annual gross compensation earned by the ExCom1 in 2019 is detailed below:

	Component		Amount CEO	Amount COO-CFO



Fixed compensation (excluding Director fees)2	632,221 EUR	632,221 EUR

Variable compensation Short Term2/5	300,858 EUR	334,287 EUR
Variable compensation Long Term6	0 EUR	0 EUR

Pension3	87,029 EUR	0 EUR

Other benefits4	44,471 EUR	26,103 EUR

TOTAL (cost to the company)	1,064,579 EUR	992,611 EUR

1 The ExCom is composed of the CEO (Luc Tack) and one executive Director (the COO-CFO), Stefaan Haspeslagh/Findar BVBA, represented by Stefaan Haspeslagh.

2 Excluding social security contributions.

3 Pension Plan: annual service cost for 2019, as calculated by an actuary.

4 Other benefits include coverage for death, disability, work accident insurance, taxes (4.40%), meal vouchers, company car - all under the same conditions applicable to other members of senior management and the ruling approved by the Belgian tax authorities for representation allowance.

5 Short term incentive realization as proposed by the Nomination and Remuneration Committee of March 24, 2020.

6 No long term incentive pay-out in 2020.

Agreements on severance pay

The management agreement with the COO-CFO provides for a notice period of maximum 12 months. The management agreement with the CEO does not provide for a notice period. The CEO will therefore not be entitled to termination protection.

MAIN FEATURES OF THE GROUP'S INTERNAL CONTROL AND RISK MANAGEMENT FRAMEWORK

Internal control framework

Responsibilities

The Board of Directors delegated the task of monitoring the effectiveness of the Internal Control System to the Audit Committee.

The ultimate responsibility for the implementation of the Internal Control System is delegated to the ExCom.

The daily management of each Business Unit is accountable for the implementation and maintenance of a reliable Internal Control System.

The Internal Audit & Control department assists the Business Units and the Tessenderlo Group Headquarters functions in the implementation and assessment of the effectiveness of the Internal Control System in their organization.

Tessenderlo Group - 2019 Statutory annual report | 24

The levels of internal control are tailored to the residual risk that is acceptable to the management. The ultimate objective is to reduce possible misstatements of the financial statements as published by the group.

Scope of the Internal Control Framework

The Internal Control System is based on the COSO Internal Control - Integrated Framework with the main focus on the internal control over the financial reporting by mitigating risks through group level controls, entity level controls, process level controls, general IT controls and segregation of duties.

Internal Control monitoring

The Audit Committee is in charge of monitoring the effectiveness of the internal control systems. This includes the supervision of the Internal Audit department about compliance monitoring.

The Internal Audit & Control department conducts a risk based compliance audit program with the objective to validate the internal control effectiveness in the various processes at entity and group level. The ultimate goal of these reviews is to provide reasonable assurance on the reliability of the financial reporting.

The Group Audit Director is invited to the Audit Committee meetings. He informs the Audit Committee of the planning and the results of the internal audits and the proper implementation of the recommendations. A rating is used to indicate the severity of audit recommendations as well as to give an overall appreciation of the audited entity or process.

Preparation and Processing of Financial and Accounting Information

A centralized controlling and reporting department coordinates and controls the financial and accounting information.

Each Business Unit has a controlling department responsible for monitoring the performance of the operational units.

The Financial and Accounting Information System is based on consolidation software that allows the group to produce the required information.

Compliance

The Internal Audit & Control department is responsible for compliance testing of both the Internal Control Framework and the key control procedures on the preparation and processing of financial and accounting information and monitors compliance with internal policies and procedures as well as external laws and regulations.

The group has a Compliance Coordination Committee. This committee, composed of representatives of several headquarter functions, is responsible for the internal and external compliance program of Tessenderlo Group. The committee periodically reports to the Audit Committee.

Enterprise Risk Management (ERM) System

Risks are an essential and inherent aspect of conducting business. The group has developed some policies and procedures with the aim of managing and reducing risks to an acceptable level.

Tessenderlo Group - 2019 Statutory annual report | 25

The Enterprise Risk Management policy applies to the entire group and all of its affiliates worldwide. This policy describes the organization and goals of the ERM system including the responsibilities at all levels of management.

A risk management structure has been rolled out, both on group and on Business Unit levels in order for risk management to become an inherent part of daily operations.

Identified risks in various Business Units or general supporting services are evaluated and followed in order to implement risk optimization. The status of these efforts is reported to the ExCom and to the Audit Committee at regular intervals.

The aim of the implemented "Group Crisis Management policy" is to standardize crisis management across the group and all affiliates. The Risk Management department is the owner of this policy and responsible for the coordination at group level and providing assistance and guidance to the various entities in the development of a harmonized crisis plan, clarifying the responsibilities at all levels and establishing the reporting channels.

POLICY ON INSIDE INFORMATION AND MARKET MANIPULATION

The Company has issued a Dealing Code including a set of rules regulating the declaration and conduct obligations regarding transactions in shares or other financial instruments of the Company carried out by Directors, ExCom members and other designated persons for their own account. Such Dealing Code is included in Exhibit I. of the Charter.

According to the Market Abuse Regulation, the Company has to take all reasonable steps to ensure that any person on its insider list acknowledges in writing the obligations and its awareness of the sanctions applicable to insider trading and the unlawful disclosure of inside information.

The Belgian law of 31 July 2017, with effect as of 21 August 2017, has changed the applicable sanctions. The maximum prison sentences that are possible have significantly increased:

Abuse of inside info: 4 years (was 1 year)
Market manipulation: 4 years (was 2 years)
Unlawful disclosure of inside info: 2 years (was 1 year)

In accordance with the Dealing Code, the Board of Directors has appointed a Compliance Officer. The Compliance Officer is responsible for supervising compliance with the Dealing Code. He/she is also the point of contact for questions about the application of the Dealing Code. Mr. John Van Essche, Legal Counsel, holds the title of Compliance Officer.

Tessenderlo Group - 2019 Statutory annual report | 26

EXTERNAL AUDIT

The mandate of PwC Bedrijfsrevisoren cvba (PwC), represented by Mr. Peter Van den Eynde, ended after the ordinary general shareholders' meeting of the Company of May 14, 2019.

Upon decision of the ordinary general shareholders' meeting of May 14, 2019 KPMG Bedrijfsrevisoren CVBA, with Mr. Patrick De Schutter as authorized representative, has been appointed as statutory auditor of the group.

The fees paid by the group to its auditor amounted to:

			2019





(Million EUR)	Audit	Audit related		Other	Total



KPMG (Belgium)	0.2	0.0		0.0	0.3


KPMG (Outside Belgium)	0.6	-		0.3	0.9


Total	0.9	0.0		0.3	1.2

				2018





(Million EUR)	Audit		Audit related		Other		Total

PwC (Belgium)	0.3		-	-
		0.3

PwC (Outside Belgium)	0.5		-	0.1		0.6

Total	0.8		-	0.1		0.9

SUBSEQUENT EVENTS

Update COVID-19:

In light of the latest developments concerning the global spread of the COVID-19 (Coronavirus) disease, Tessenderlo Group is taking all the necessary steps to ensure that it keeps its people safe and keep its plants and businesses running. This is because the group provides support for vital services and the flow of crucial goods. Tessenderlo Group supplies the basic chemicals for the production of drinking water based on side streams in the form of hydrochloric acid from the production of sulfate of potash (SOP). In addition, the group produces gelatin for medical and food applications, crop nutrition and crop protection products for agriculture (for which the season is just starting in the northern hemisphere).
All of the plants and activities are running in line with expectations at the moment.
Activities could be further impacted in the coming weeks or months if too many employees are impacted by COVID-19 and/or if access to raw materials and auxiliary materials or means of transportation becomes more complicated, or if our customers are no longer able to process our products.

Tessenderlo Group - 2019 Statutory annual report | 27

APPLICATION OF ART. 7:96 OF THE BELGIAN CODE OF COMPANIES AND ASSOCIATIONS (BCCA) (PREVIOUSLY ART. 523 OF THE BELGIAN CODE OF COMPANIES)

Meeting of the Board of Directors dated March 12, 2019

[…]

Prior to deliberating and adopting the resolution on the remuneration of Mr Luc Tack and Mr Stefaan Haspeslagh, both members of the Executive Committee indicate that they have a conflict of interest regarding the decisions to be taken in compliance with article 523 of the Belgian Code of Companies. It concerns the determination of the short term incentive over 2018, the remuneration package over 2019 and the Long Term Incentive plan.

The Chairman of the Nomination and Remuneration Committee Mr Karel Vinck takes the floor and explains to the members of the nomination and remuneration the proposals for Short term incentive pay out/service fee for the year 2018 as well as the proposals for short term incentive pay out for the year 2019.

After debate the Board approves with unanimous consent the following resolutions:

To fix the short term incentive pay out at EUR 380,743 for Luc Tack
To fix the short term incentive pay out/ service fee at EUR 406,362 for Findar BVBA, represented by Stefaan Haspeslagh
To increase the fixed component of the remuneration packages with 2.70%, effective 1 January 2019.

The 2019 short term incentive/service fees will be based on the following drivers:

75% based on EBIT
25% on the individual performance linked to progress realised with respect to the sustainable long term growth of the Company.

The Short term Incentive can vary between 0-135% of the fixed remuneration for the CEO and between 0 and 120% of the fixed service fee for the COO/CFO.

Also for exceptional performances, the Board can attribute an exceptional bonus.

….

The Chairman of the Nomination and Remuneration Committee explains the details of the Long Term Incentive plan. After debate the members of the Board agree to fix the Long Term Incentive Target for the ExCom members at:

45% of Base Remuneration for the CEO and
40% of the Base remuneration for the COO/CFO Based on the following performance criteria
Group Adjusted EBITDA (85%) BU Safety performance (15%).
The actual Long Term Incentive Target realisation may vary in a pay out between 0% and 200%.

[…]

Tessenderlo Group - 2019 Statutory annual report | 28

Meeting of the Board of Directors dated May 14, 2019

[…]

Mr Jan Peeters, partner at Stibbe, is invited into the meeting in order to comment on the various agenda items of the EGM to be convened on July 10, 2019 after the changed articles of association of the Company are published following the early adoption of the New Belgian Code of companies and associations (New BCCA) by the EGM of May 14th 2019.

On the agenda of the EGM of July 10, 2019, the Board proposes to the shareholders to adopt (i) an additional change of the bye-laws in order align the articles of association with some new mandatory and optional changes of the new BCCA as well as (ii) the introduction of the double voting right for shareholders that are registered for an uninterrupted period of two years in the nominative shareholders' register of the Company. The first resolution has to be approved with 75% of the votes whilst the second resolution with 2/3 of the votes.

The directors of the Company who are present or validly represented state that they have neither a direct nor indirect conflict of financial interest with the decisions to be taken in accordance with article 7:96 BCCA except for those decisions summarized in agenda points 4 of the agenda where Mr Luc Tack and Mr Stefaan Haspeslagh declare that they have a conflict of interest in the sense of article 7:96 BCCA.

The following prior statements of the directors are made:

Mr Luc Tack states that he has an indirect conflict of interest in respect of the resolutions proposed to the EGM. Although strictly spoken article 7:96 of the Belgian Code of companies and associations does not apply on the case at hand, Mr Luc Tack will not participate in the deliberation and vote in respect to the agenda.

Mr Luc Tack is the ultimate beneficial owner of the shareholding of Verbrugge NV and Symphony Mills NV in the Company, as Mr Luc Tack is the controlling shareholder of Artela NV and Symphony Mills NV, which are the controlling shareholders of Picanol NV. Furthermore, Mr Luc Tack is managing director (gedelegeerd bestuurder) of Picanol NV.

The actual use of the authorizations in the proposed resolutions to the shareholders may have an effect on the existing voting rights of Verbrugge NV and Symphony Mills NV in the Company.

Mr Luc Tack has requested that the auditor is informed of this conflict of interest.

Mr Stefaan Haspeslagh states that he has an indirect conflict of interest in respect of the resolutions proposed to the EGM.

Further to Exhibit H of the Corporate Governance Charter, a member of the Board of Directors shall be considered to have a conflict of interest of the Belgian Companies Code in case "he […] is a member of the Board of Directors or ExCom or holds a similar office with a company with which the Company intends to enter into a material transaction."

Mr Stefaan Haspeslagh has requested that the auditor is informed of this conflict of interest. Mr Stefaan Haspeslagh will not participate in the resolution on the the deliberation and vote in respect to the agenda.

The financial consequences of the decisions taken in the proposed resolutions are at this stage limited to the fees of the advisors Stibbe incurred to date and which are estimated to be lower than 25 K€.

Mr Luc Tack and Mr Stefaan Haspeslagh leave the meeting.

Mr Jan Peeters explains the rationale of the Belgian legislator for the introduction of the double voting right into the BCCA, the main features of the new article 7:53 of the Belgian Code of companies and associations and the impact on the governance of the Company.

Tessenderlo Group - 2019 Statutory annual report | 29

Following questions of board members, Mr Jan Peeters points out that the introduction of the measure could continue to serve the long-term interest of the Company to have a long term stable reference shareholder when it would consider future possible opportunities on capital operations in view of the definition and execution of the long term company strategy.

After debate, the Board of Directors approves with unanimous consent the agenda and proposed resolutions of the Extraordinary General Meeting of July 10, 2019.

Long term share ownership is to considered as the platform required to build stable companies.

[…]

In 2019, no circumstances triggered the application of article 7:97 of the new BCCA.

Tessenderlo Group - 2019 Statutory annual report | 30

INFORMATION REQUIRED BY ART. 34 OF THE ROYAL DECREE OF NOVEMBER 14, 2007

The share capital of the Company is represented by ordinary shares.

The extraordinary shareholders' meeting of 6 June 2017 decided to authorize the board of directors, for a period of 5 years from the publication of the authorization in the Annex to the Belgian State Gazette, to increase the share capital, in one or more times, up to an amount of EUR 43.160.095 (forty three million one hundred and sixty thousand ninety-five euros), in accordance with the provisions set out in the BCCA and the articles of association of the company. The Board of Directors is allowed to use the authorized capital to take protective measures for the Company through capital increases, with or without limitation or withdrawal of preferential rights, even outside the context of a possible public takeover bid, to the extent that the Company has not yet received a notification of the FSMA with respect to a public takeover bid on its securities.

Without prejudice to the possibility to realize the commitments that were validly entered into before receipt of the notification of the FSMA pursuant to article 7:202, paragraph 2, 1° of the BCCA, the Board of Directors is authorized, for a period of 3 years form the authorization by the extraordinary general meeting of 6 June 2017, to proceed to a capital increase within the framework of authorized capital, with or without limitation or withdrawal of preferential rights as the case may be in favor of one or more persons, following receipt of a notification of the FSMA with respect to a public takeover bid on the company's securities, in accordance with the conditions set out in article 7:202, paragraph 2, 2° of the BCCA and the articles of association of the company.

The Board of Directors is also authorized, with right of substitution, to amend the company's articles of association in accordance with the capital increase that was decided within the scope of the authorized capital.

Each other share gives right to one vote at the general meeting.

The articles of association of the Company do not contain any restriction on the transfer of the shares.

The rules with respect to the appointment and resignation of Directors and amendments to the articles of association of the Company as set forth in the articles of association of the Company do not deviate from the applicable rules set forth in the BCCA.

The Company may, in accordance with the conditions set by law, acquire its own shares, profit-sharing certificates, or certificates relating thereto, by way of a purchase or an exchange, directly or through the intermediary of a person acting in its own name but for the account of the company, following a decision of the shareholders' meeting taken in accordance with the applicable requirements on quorum and majority. Such decision in particular determines the maximum number of shares, profit- sharing certificates or certificates relating thereto that can be acquired, the term for which the authorization is granted and which may not exceed five years, as well as the minimum and maximum value of the compensation.

Pursuant to the decision of the extraordinary general meeting of 6 June 2017, the Board of Directors is authorized, for a period of 5 years from the publication of the authorization in the Annex of the

Tessenderlo Group - 2019 Statutory annual report | 31

Belgian Official Gazette, to repurchase, in accordance with the conditions set by law, the company's shares, profit-sharing certificates or certificates relating thereto for the account of the company of which the accounting par value, including the securities previously acquired by the company and held by it, is not higher than 10% (ten per cent) of the issued capital and at a price ranging between minimum 20% (twenty per cent) below the average of the closing price of the company's share during the last 30 trading days preceding the Board's resolution to acquire such securities, and maximum 20% (twenty per cent) above the average of the closing price of the company's share during the last 30 trading days preceding the Board's resolution to acquire such securities, it being understood that the price will never be lower than EUR 15 (fifteen euro) or exceed EUR 50 (fifty euro).

The Board of Directors is explicitly authorized according to the resolution of the extraordinary general meeting of 6 June 2017 to dispose of the acquired securities that are listed, on or outside the stock exchange, without the need for a prior consent or other intervention by the general meeting, without prejudice to the fact that the disposal possibilities of the Board of Directors are further mandatory organized under the new BCCA and these shall thus have to be respected in parallel by the Company for the remaining period of the authorization granted by the general meeting within the framework of the acquisition of own securities.

The aforementioned provisions equally apply to the acquisition or transfer of the Company's securities by the Company's directly controlled subsidiaries or through the intermediary of a person acting in its own name but for the account of these subsidiaries, in accordance with articles 7:221 and 7:222 of the BCCA.

Tessenderlo Group nv is a party to the following contracts which become effective, undergo changes or terminate in case of a change of control over Tessenderlo Group nv after a public takeover bid:

the bilateral revolving facilities agreements entered into on December 4, 2019, for a total amount of 142.5 million EUR with the Company and Tessenderlo USA Inc. as borrowers and KBC Bank NV, ING NV, Belfius Bank NV and BNP Paribas Fortis NV as lenders: according to the terms of these agreements, a "change of control" over Tessenderlo Group nv will entitle each lender to ask for termination of the bilateral facility agreement. For purposes of the change of control clause described above, a "change of control" shall occur if a third party (i.e. any party other than
Verbrugge nv or any person acting in concert with Verbrugge nv) acquires 30% or more of the voting rights of the Company (unless Verbrugge nv (alone or together with any person acting in concert) holds more voting rights than such third party);
the prospectus dated June 15, 2015, of Tessenderlo Group nv regarding the issue of and public offer of two series of bonds with a maturity of 7 years (the "2022 Bonds") and 10 years (the "2025 Bonds", and together with the 2022 Bonds, the "Bonds") for an expected minimum amount of
75.0 million EUR for the 2022 Bonds and an expected minimum amount of 25.0 million EUR for the 2025 Bonds and for a combined maximum amount of 250 million EUR: according to the terms and conditions of these Bonds, the Bonds will be redeemable at the option of the bondholders prior to maturity in the case of a change of control. Only the Bonds held by the bondholders who submit put option notices shall be immediately due and repayable in case of a change of control, with exception of all other bonds. If bondholders submit put option notices in respect of at least 85 percent of the aggregate nominal amount of the outstanding 2022 bonds, all (but not some only) of the 2022 bonds may be redeemed at the option of the Company prior to maturity. If bondholders submit put option notices for at least 85 percent of the aggregate nominal amount of the outstanding 2025 Bonds, all (but not some only) of the 2025 Bonds may be redeemed at the option of the issuer prior to maturity. A "change of control" shall occur if a third party (i.e. any party other than Verbrugge nv or any person acting in concert with Verbrugge nv) acquires 30% or more of the voting rights of the Company (unless Verbrugge nv (alone or together with any person acting in concert) holds more voting rights than such third party);

Tessenderlo Group - 2019 Statutory annual report | 32

terms and conditions of the 2012 Plan of Tessenderlo Group nv: according to the terms and conditions mentioned above, the warrant holders will be entitled to exercise their warrants prior to the date on which they normally become exercisable, in the event of any operation that significantly impacts the shareholder structure. This paragraph also relates to any public takeover bid on the Tessenderlo Group nv shares or any other form of taking control or any merger involving a redistribution of the securities. Such early exercise allows the warrant holders to take part in the above-mentioned operations at the same conditions as the existing shareholders. As of December 31, 2019, there are no outstanding warrants.

DIVIDEND POLICY

Tessenderlo Group nv has not declared or paid dividends for the financial year ending on December 31, 2019. The Company's dividend policy may be amended from time to time, and each dividend distribution remains subject to the Company's earnings, financial condition, share capital requirements and other important factors subject to proposal and approval by the competent corporate body of the Company and subject to the availability of distributable reserves as required by the BCCA and the articles of association. Any distributable reserves of the Company have to be computed in respect of its statutory balance sheet prepared in accordance with Belgian GAAP, which may differ from the consolidated financial statements in IFRS reported by the Company.

INFORMATION REQUIRED BY ART. 3:6 BELGIAN CODE OF COMPANIES AND ASSOCIATIONS

Provision 3.12 of the Corporate Governance Code 2020

The current Chairman of the Company was previously appointed as an executive Director. The Company has carefully considered the positive and negative aspects in favor of such a decision and has concluded that such appointment is in the best interest of the Company given his extensive experience, expertise, in-depth knowledge and proven track-record in relevant business environments. The Board of Directors furthermore clarifies that Exhibit H of the Corporate Governance Charter provides additional conflict of interest procedures in case any material transaction is being considered by the Company with a company in which Directors are also a Director or Executive Director.

Provision 7.6 of the Corporate Governance Code 2020 with respect to remuneration of Non- Executive Directors

The Company does not grant any remuneration in the form of shares to the Non-Executive Directors for 2019, as it is of the opinion that a payment in shares does not have a positive impact on decisions of these Directors that support the long term vision of the Company, given the presence of a reference shareholder who aims to create sustainable value within the Company.

Provision 7.9 of the Corporate Governance Code 2020 with respect to remuneration of Executive Directors

The Company does not grant any minimum threshold of remuneration in the form of shares to the ExCom in 2019, as it is of the opinion that a payment in shares does not have a positive impact on decisions of the ExCom that support the long term vision of the Company, given the presence of a reference shareholder who aims to create sustainable value within the Company. It was also decided not to modify the remuneration policy as already approved, during the course of the year.

Tessenderlo Group - 2019 Statutory annual report | 33

Provision 7.12 of the Corporate Governance Code 2020 with respect to remuneration of Executive Directors

In 2020 the ExCom contracts will be submitted for approval to the Board of Directors, which will include specific provisions with respect to the claw-back of variable remunerations.

Provision 9.2 of the Corporate Governance Code 2020

Each three years the Board of Directors has to evaluate its operation, as well as the functioning of its committees. The last evaluation of the Board of Directors and the committees was carried out in 2016. In 2019 a questionnaire was submitted to the Board of Directors, which will be discussed by the Board in 2020. In 2020 the evaluation of the Nomination and Remuneration Committee will also take place. Taking into account the appointment of a new statutory auditor in 2019, the Company considered it useful to postpone the evaluation of the Audit Committee until 2020.

Brussels - March 24, 2020

On behalf of the Board of Directors

Luc Tack	Stefaan Haspeslagh
Director and CEO	Chairman of the Board of Directors

Tessenderlo Group - 2019 Statutory annual report | 34

Attachments

Original document
Permalink

Disclaimer

Tessenderlo Group NV published this content on 10 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 April 2020 07:22:08 UTC

Latest news about Tessenderlo Group nv

TESSENDERLO GROUP : FY-23: Tessenderlo disappoints	Mar. 27
Transcript : Tessenderlo Group NV, 2023 Earnings Call, Mar 27, 2024	Mar. 27
Tessenderlo Group NV Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 26	CI
TESSENDERLO GROUP : Tessenderlo sees PF adjusted EBITDA down 20-30% for 2023	23-08-24
Transcript : Tessenderlo Group NV, H1 2023 Earnings Call, Aug 24, 2023	23-08-24
Tessenderlo Group NV Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-23	CI
TESSENDERLO GROUP : Complex projection of Tessenderlo Mark II	23-06-09
PCS Holding AG acquired a 7% stake in Rieter Holding AG from Tessenderlo Group NV for CHF 39.9 million.	23-04-04	CI
Transcript : Tessenderlo Group NV, 2022 Earnings Call, Mar 23, 2023	23-03-23
Tessenderlo Group NV Reports Earnings Results for the Full Year Ended December 31, 2022	23-03-22	CI
Tessenderlo Acquires Remaining Shares of Picanol Group	23-03-10	MT
Tessenderlo Group NV completed the acquisition of 10.66% stake in Picanol nv from freefloat shareholders.	23-03-09	CI
TESSENDERLO GROUP : After the reverse takeover, we start covering Tessenderlo instead of Picanol	23-01-18
Kuehne+Nagel to Launch Distribution Center for Japanese Cycling Group Shimano in Belgium	22-12-28	MT
2022 to finish better than the (record) 2021	22-08-25
Transcript : Tessenderlo Group NV, H1 2022 Earnings Call, Aug 25, 2022	22-08-25
Tessenderlo Group NV Reports Earnings Results for the Half Year Ended June 30, 2022	22-08-25	CI
Equity swap to make Tessenderlo and Picanol become one	22-07-11
Tessenderlo Group NV made an offer to acquire10.66% stake in Picanol nv from freefloat shareholders for approximately €330 million.	22-07-07	CI
Tessenderlo Group NV completed the acquisition of Assets of Fleuren Tankopslag, B.V.	22-06-29	CI
Kuehne+Nagel Offers Swarovski EMEA Fulfillment, Distribution Services From Belgium	22-05-04	MT
Tessenderlo Group NV Reports Earnings Results for the Full Year Ended December 31, 2021	22-03-24	CI
Tessenderlo Group to Look for M&A	22-03-24	CI
Transcript : Tessenderlo Group NV, 2021 Earnings Call, Mar 24, 2022	22-03-24
Tessenderlo Group NV signed intend to acquire Production plant and the associated business of Pipelife France in Gaillon from Wienerberger AG.	22-02-23	CI

Chart Tessenderlo Group nv

Duration

Period

More charts

Company Profile

Tessenderlo Group nv is a diversified industrial group. Net sales break down by activity as follows: - sale of agrochemicals (37.7%): crop nutrients (liquid sulfur fertilizers, solid and soluble potassium sulfate fertilizers, etc.) and crop protection products; - sale of animal by-products (30.9%): animal fats and proteins, gelatins, collagen peptides, etc.; - sale of industrial products (28.3%): plastic pipe systems, PVC profiles, performance chemicals (ferric chloride, caustic soda, sodium hypochlorite, hydrochloric acid, sodium sulphide, hydrogen sulphide, calcium chloride, etc.), electrolysis products, specialty chemicals, etc. for the water treatment and transportation, construction, mining, food processing, oil and gas industries, etc.; - power generation (3.1%). Net sales are distributed geographically as follows: Belgium (9.1%), France (16.5%), the Netherlands (10.2%), the United Kingdom (4.9%), Spain (3.5%), Germany (3%), Poland (1.5%), Europe (6%), the United States (28.8%), Mexico (3.2%), China (0.7%) and other (12.6%).

Sector

Diversified Chemicals

Calendar

2024-05-13 - Annual General Meeting

More about the company

Income Statement Evolution

More financial data

Analysis / Opinion

TESSENDERLO GROUP : FY-23: Tessenderlo disappoints

March 27, 2024 at 12:22 pm EDT

More Strategies

Ratings for Tessenderlo Group nv

Trading Rating

Investor Rating

ESG Refinitiv

C+

More Ratings

Analysts' Consensus

Sell

Buy

Mean consensus

OUTPERFORM

Number of Analysts

Last Close Price

23.7 EUR

Average target price

35.33 EUR

Spread / Average Target

+49.09%

Consensus

EPS Revisions

Estimates Revisions

Quarterly revenue - Rate of surprise

Company calendar

Sector Diversified Chemicals

	1st Jan change	Capi.
TESSENDERLO GROUP NV	-16.11%	2.14B
SHIN-ETSU CHEMICAL CO., LTD.	+6.93%	80.03B
BASF SE	+5.21%	48.78B
DUPONT DE NEMOURS, INC.	-3.86%	30.85B
PIDILITE INDUSTRIES LIMITED	+8.67%	17.8B
BRENNTAG SE	-8.60%	11.66B
EASTMAN CHEMICAL COMPANY	+7.28%	11.38B
ASAHI KASEI CORPORATION	+4.09%	9.84B
SYENSQO SA/NV	-8.79%	9.83B
SRF LIMITED	+5.46%	9.31B

Diversified Chemicals

Tessenderlo Group nv

Equities

TESB

BE0003555639

Diversified Chemicals

Tessenderlo : Statutory annual report

EPS Revisions

Quarterly revenue - Rate of surprise