Sioen Industries : Annual report 2020 - financial

March 30, 2021 at 05:21 am EDT

Protection through innovation

financial report 2020

Financial overview p32

Definitions p108

Reconciliations p109

Addresses p110

Group structure: Sioen Industries NV

COATING DIVISION

APPAREL DIVISION

Sioen Industries NV(1) - Belgium

Spinning, weaving, direct coating, online coating

100.0% Saint Frères SAS - France
Direct coating
100.0% Sioen Shanghai(2) - China Direct coating sales oﬀice
100.0% Sioen Fabrics SA - Belgium Transfer coating, Calendering
100.0% Siofab SA(3) - Portugal Transfer coating
100.0% Pennel Automotive SAS - France
100.0% Coatex NV - Belgium
Processing of coated fabrics and films
100.0% Saint Frères Confection SAS - France Heavy-duty manufacturing
100.0% Sioen Technical Felts SA - Belgium Felt production
100.0% Manifattura Fontana S.p.A.(6) - Italy Geotextile non-wovens
52.0% Fontana International GmbH - Austria 48.0% Geotextile non-wovens sales oﬀice
100.0% Dimension-Polyant GmbH - Germany Sailcloth
Dimension-Polyant Inc. - USA 100.0% Sailcloth
Dimension-Polyant Sailcloth PTY Ltd. - Australia 100.0% Sailcloth
Dimension-Polyant (UK) Ltd. - UK 100.0% Sailcloth
Dimension-Polyant SAS - France 100.0% Sailcloth
100.0% James Dewhurst Ltd.(7) - UK Open construction laid scrims
Dewtex Inc. - USA 100.0% Open construction laid scrims
James Dewhurst Trustees Ltd. - UK 100.0% (dormant)
100.0% Saint Clair Textiles SAS(8) - France Direct coating
Saint Clair Textiles Inc.(9) - USA 100.0% Direct coating sales oﬀice

100.0% Sioen NV - Belgium
10.5% Confection Tunisienne de Sécurité SARL 89.5%
- Tunisia
Sioen Ireland(4) - Ireland 100.0%
100.0% Mullion Survival Technology Ltd. - UK
Sales oﬀice
95.0% PT. Sioen Indonesia - Indonesia 5.0%
95.0% PT. Sungin Tex - Indonesia 5.0%
Sioen France SAS - France 100.0% Sales oﬀice
99.7% Sioen Tunisie SARL - Tunisia 0.2%
99.9% Sioen Zaghouan SA - Tunisia 0.1%
5.0% Siorom SRL - Romania 95.0%
Sioen Nederland BV - The Netherlands 100.0%
Sioen Asia Pacific PTE. Ltd. 100.0%
- Singapore
Sioen Myanmar Ltd. - Myanmar 99.8% 0.2%
PT. Sioen Semarang Asia - Indonesia 95.0% 5.0%
Ursuit OY - Finland 100.0%
Ursuit Baltics AS - Estonia 100.0%
Ursuit AB - Sweden 100.0%
Sioen Ballistics OY - Finland 100.0%
Kiinteistö OY Helsingin 100.0% Valuraudantie 20 - Finland
Sioen Deutschland GmbH - Germany 100.0%

CHEMICALS DIVISION

OTHER

100.0% European Master Batch NV - Belgium Production pastes, inks, varnishes
Richard SAS - France Paste production
100.0%
Roltrans Tegelen BV(5) - The Netherlands (Real estate)
100.0%
Roltrans Group America Inc. - USA 100.0% (Dormant)
Roland Real Estate Sp.z.o.o - Poland 100.0% (Real estate)
(1) Merger Holding company Sioen Industries (Shared Service Center) and Belgian direct coating companies at July 1st 2009
(2) Oﬀicial name: Sioen Coated Fabrics (Shanghai) Trading Co. Ltd.
(3) Oﬀicial name: Siofab Indústria de Revestimentos Têxteis SA
(4) Oﬀicial name: Gairmeidi Caomhnaithe Dhun na nGall Teoranta
(5) Respectively through Monal SA and Roltrans Group BV
(6) Acquisition in 2016 - still 1.0% to acquire by means of deferred payment
(7) Via holding company Jade Equity Ltd.
(8) Former Dickson Saint Clair SAS, name change with eﬀect as from 20 April 2020
(9) Acquisition in 2020

Report of the Board of Directors

1. Comments on the consolidated financial statements

NET SALES

The Sioen Industries Group realized in 2020 net sales of EUR 510.1 million compared to EUR 509.6 million in 2019. On a like for like basis, excluding Dickson Saint Clair, for which the results are included as of 1 January 2020 and Techma Coatings, included since May 2019, sales decreased by 6.7% in 2020 compared to 2019.

Coating division

The coating division specializes in the coating (applying a protective layer) of textiles. This division is fully vertically inte- grated. We extrude granulates (PET, PP, ...) into staple fibers and yarns. We convert those fibers and yarns into fabrics (woven fabrics, non-woven fabrics and laid scrims) and coat these fabrics with various polymers (PVC, PU, silicons, ...). The Group is the only player in the world with full competence in various coating technologies, each with its own specific products and markets.

The coating division realized EUR 328.5 million of external sales in 2020 compared to EUR 310.8 million in 2019.

Organic sales (without Dickson Saint Clair and Techma Coatings) decreased with 5.4% compared to last year. Sales decrease in some business lines (sailing, events, ...) was mitigated by the steep temporary increase in demand in business lines related to the fight against the Covid pandemic (mattress protection, medical gowns, filter material, ...).

Apparel division

This division stands for 'technical protective clothing'. The apparel division is an innovative producer of a wide range of high-quality technical protective garments that meet all European standards.

Sioen Apparel is active in various sectors where attention to safety is a priority. Attention to customer needs, strong quality consciousness and continuing research and development, combined with technically advanced products, are the basis of the successful development of this division.

The apparel division realized EUR 140.4 million of external sales compared to EUR 157.1 million in 2019 or a decrease with 10.6%. All business lines suﬀered from Covid related disruptions in the supply chain, reduced economic activity in the end markets and postponed public tenders.

Chemicals division

Sioen Chemicals processes basic raw materials (PVC powders, pigments, ...) into high quality technical semi- finished products (pigment pastes and inks) for a wide range of applications.

The chemicals division realized EUR 41.2 million of sales in 2020 compared to EUR 41.7 million in 2019 or a decrease with 1.3%.

As end customers anticipated an economic revival early 2021, sales picked up in the last quarter.

MATERIAL MARGIN

GROUP PROFIT (LOSS)

The consolidated material margin of the Group evolved from 48.77% over sales in 2019 to 50.64% over sales in 2020.

The main driver is the worldwide economic slowdown. Demand for basic raw materials and their derivatives dropped dramatically resulting in all time lows in pricing.

OPERATING RESULT

The company recorded EUR 19.3 million profit over the year 2020 against EUR 30.1 million over 2019 or a decrease with 35.9%.

BALANCE SHEET

At the end of the year Group equity amounted to EUR 264.5 million or 52.4% of the balance sheet total.

Operating result evolves from EUR 42.2 million last year to EUR 40.3 million over 2020 or a decrease with 4.7%.

Net financial debt of the Group, at year end, is EUR 84.4 million.

An impairment loss regarding goodwill on Dimension- Polyant CGU of EUR 2.7 million is included in the 2020 oper-ating result.

FINANCIAL RESULT

Financial result of the Group amounted to EUR -12.0 million over the year 2020 against EUR -2.0 million in 2019. The 2020 financial result includes (in increasing order of importance);

• Realized and unrealized currency fluctuations
• Interests on outstanding loans and leasings
• The cost, without cash flow impact, of unwinding the existing hedge instrument; in the light of the anticipated refinancing of the Group, the cost of unwinding of the existing interest rate hedge instrument must be reflected in this year's financial result, in accordance with IFRS regulations.

INCOME TAX

Income tax cost amounts to EUR 8.9 million over the year 2020 against EUR 10.1 million over 2019.

EARNINGS PER SHARE

The company realized earnings per share amounting to EUR 0.98.

DIVIDEND

The Board of Directors will propose to the General Shareholders'

Meeting of 30 April not to distribute a dividend.

2. Financial and other risks

We refer to capture 2.5.23. Financial risk management, 2.5.24. Capital structure management and 5. Corporate governance statement in this "Report of the Board of Directors".

The impact of the Covid pandemic on the supply chain was rather limited and dispersed.

3. Outlook

2020 was, to say the least, an exceptional year in every way; a hard Brexit, rising East West geopolitical tensions and a pandemic causing lockdowns and unprecedented economic damage.

The first half of 2021 continues to be impacted by Covid. This combined with the increases in prices of raw materials will continue to create a challenging environment.

Despite this temporary setback Sioen will, loyal to its long term strategy, continue to invest in diversification into new markets, complementary acquisitions, investments in new product lines and innovative products.

For more information regarding the status of the intended delisting, we refer to 2.5.20. Events aﬅer reporting period.

4. Sioen core values

A strong focus on innovation, customer intimacy, an extensive product portfolio, a strong focus on added value products and sustained cost eﬀiciency are the foundations upon which we build our future.

5. Corporate governance statement

5.1. GOVERNANCE

The Sioen family has been supported by external, independent Directors since 1986. Their expertise and experience contribute to the proper and effective management of the company. On 22 March 2005, the Board of Directors adopted a Corporate Governance Charter, in accordance with the Belgian Corporate Governance Code.

The Corporate Governance Charter has been in force since the General Shareholders' Meeting of 2005 and can be consulted on the Sioen Industries website (www.sioen.com, last version dated 27/02/2018). Since the Corporate Governance Charter came into eﬀect, a number of minor amendments have been made to it, reflecting changes to the environment, such as the dematerialization of shares, or a small change in the shareholder structure. A new Belgian corporate governance code has been issued since 2020 (which can be consulted onwww.corporategovernancecommittee.be). The company applies the Corporate Governance principles laid down in the Corporate Governance Charter. In addition, and except as explained in the Corporate Governance Charter or in the Corporate Governance Statement of this annual report (absence of an internal audit function, statutory rights to appoint Directors, no recovery right, non-executive directors aren't partially paid in shares and there is no minimum number of shares to be held by the executive management), the company complies with the Corporate Governance Code.

A relationship agreement with the reference shareholder is not deemed necessary.

Pursuant to article 3:6 § 4 of the Code of Companies and Associations, a declaration in respect of non-financial information is included in the CSR chapter of this annual report. This will facilitate the understanding of the development, the results and the position of the company as well as the eﬀects of its activities relating to the social, employee and environmental matters, the respect of human rights and the fight against corruption and bribery. Also some information regarding the diversity policy of the company, in accordance with article 3:6 § 2 6° of the Code of Companies and Associations is given in the CSR chapter of this annual report.

5.1.1.

The Board of Directors

(1) Role and mission

(2) Members of the Board of Directors

The Board of Directors is the highest management body of the company vested with all powers that are not reserved, by law or by the by-laws, to the Shareholders' Meeting. The Board has delegated certain powers to an Executive Committee (a Management Committee as was defined by Belgian law).

As required in the new Code of Companies and Associations the company has opted for the Monistic system. As such the responsibilities of the Board will remain unchanged.

The Board has exclusive responsibility for:

CHAIRMAN

Mr. M. Delbaere: President of the Board of Directors.

Aﬅer his studies in law at the KU Leuven and economics at the UCL, he started his career with Morgan Guaranty Trust Company of New York ( J.P. Morgan). In 1978 he founded his company Crop's NV, active in the food industry, and is Managing Director. He holds various other mandates in companies and organizations.

His mandate expires at the 2022 General Shareholders' Meeting.

• Preparation and approval of the consolidated periodic financial statements
• Adoption of accounting standards
• Convening Shareholders' Meetings and drawing up the agenda and proposals of resolutions to be submitted to them
• Setting the general strategy of the Group
• Adopting the budget, long term plan and investments
• Appointing the Chairman and the members of the Executive Committee
• Supervision of the Executive Committee
• Major decisions concerning acquisitions and divestures

Besides the regular items, the strategic development of the company is regularly discussed and guidance is provided to the R&D projects. The Board also deals with specific items in terms of concrete issues and current events such as the new "Market abuse regime".

MANAGING DIRECTOR

Mrs. M. Sioen (permanent representative of M.J.S. consulting BV): Managing Director.

Mrs. M. Sioen holds a master degree in economics. She started her career at Sioen Industries in 1990. She worked in diﬀerent divisions of the company and became General Manager of one of the three divisions (Coating division). In 2005, she was appointed CEO of the Group. She is also Director in several other companies and organisations a.o. D'ieteren, Sofina and Guberna. She is the honorary president of FEB (Federation of Belgian enterprises).

Her mandate expires at the 2024 General Shareholders' Meeting.

DIRECTORS

Mrs. D. Parein-Sioen (permanent representative of D-Lance BV): Non-executive Director.

Mrs. D. Sioen obtained her Master degree in Business Management from ICHEC Brussels Management School. She has an extensive experience in sales and marketing of the fashion- and leisure wear garments-industry and founded her own company MACC JEWEL. She holds mandates in the Board of Directors of Creamoda and Recticel.

Mr. P. Macharis: Non-executive independent Director.

Mr. Macharis holds a masters' degree in commercial and financial sciences and is an industrial engineer in automa- tion. He is acting CEO of the VPK Packaging Group and holds various other mandates in companies and organizations.

His mandate expires at the 2024 General

Shareholders' Meeting.

Her mandate expires at the 2024 General Shareholders' Meeting.

Mrs. P. Sioen (permanent representative of P. Company BV): Executive Director.

Mrs. P. Sioen has extensive experience as CEO of the Chemicals segment. She has developed this activity into a full-fledged division of the Group. Mrs. P. Sioen holds also other mandates in private ventures.

Mr. D. Meeus (permanent representative of Dirk Meeus BV): Non-executive independent Director.

Mr. Meeus holds a master degree in law and is acting manag- ing partner of Allen & Overy (Belgium) LLP and Global Co-head of Corporate. He also holds other mandates in various companies.

His mandate expires at the 2024 General Shareholders' Meeting.

Her mandate expires at the 2024 General Shareholders' Meeting.

Mr. L. Vandewalle: Non-executive Director:

Mr. Vandewalle obtained a degree in economics and has spent his entire professional career with ING. Mr. Vandewalle was President of the Board of Directors of ING Belgium and member of the Board of Directors of ING Nederland. His mandate expired at the 2020 General Shareholders'

Meeting. Mr. Vandewalle decided not to renew his mandate.

Mr. J. Noten (permanent representative of Lemon Comm. V.): Non-executive independent Director.

Mr. Noten studied at the KU Leuven and Vlekho Brussels. Later, he followed several courses at the Kellogg Business School (Northwestern University) and Harvard Business School. He established an international career at Unilever for 18 years. Aﬅerwards, as Chairman of Unilever Belgium, he joined Massive. Under his leadership, the lighting company realized a strong internal growth complemented by acquisitions. From 2012 until June 2020, Mr. Noten was CEO of Vandemoortele Group. He holds various other mandates in companies and organizations.

His mandate expires at the 2022 General Shareholders' Meeting.

SECRETARY OF THE BOARD OF DIRECTORS

Mr. G. Asselman (permanent representative of Asceca Consulting BV): Secretary.

STATUTORY AUDITOR

Deloitte Bedrijfsrevisoren CVBA, represented by Mr. K. Dehoorne.

5.1.2.

The Board of Directors and how it works

In accordance with the articles of association, the Board of Directors regularly meets depending on the needs and the interests of the company. In 2020, the Board held 10 meet- ings. The number of meetings attended by Directors individ- ually in 2020 is as follows:

Mr. Michel Delbaere, Chairman ......................................... 10/10 M.J.S. Consulting BV,

(represented by Mrs. Michèle Sioen) ................................ 10/10 D-Lance BV,

(represented by Mrs. Daniëlle Parein-Sioen) .................. 10/10 P. Company BV,

(represented by Mrs. Pascale Sioen) ............................... 10/10

Mr. Luc Vandewalle ................................................................ 1/10 Lemon Comm. V,

(represented by Mr. Jules Noten) ...................................... 10/10

Mr. Pierre Macharis .............................................................. 10/10 Dirk Meeus BV,

(represented by Mr. Dirk Meeus) ....................................... 10/10

5.1.3.

Working committees

The Sioen Industries Group has the following working committees:

Audit Committee

In 2020 the Audit Committee consisted of two non-execu- tive independent Directors, Lemon Comm. V (represented by Mr. J. Noten) and Dirk Meeus BV (represented by Mr.

D. Meeus). This is a deviation from the Corporate Governance Code 2020, we are actively seeking to add an additional member. The duration of the mandate of members of the Committee coincides with their term as Director.

In 2020 the Audit Committee met 4 times. The external auditor attended 2 meetings. The number of meetings attended by individual members of the Audit Committee in 2020 is as follows:

Mr. Luc Vandewalle .................................................................. 1/4

Mr. Luc Vandewalle is the former President of the Audit Committee. His mandate expired at the 2020 General Shareholders' Meeting. Mr. Vandewalle decided not to renew his mandate.

Lemon Comm. V,

(represented by Mr. Jules Noten) .......................................... 4/4

Lemon Comm. V (represented by Mr. J. Noten) is President of the Audit Committee. Conform with the provisions of the Companies Code Sioen opted for a president with an extensive experience and proficiency in financial matters. Mr. Noten studied at the KU Leuven and Vlekho Brussels. Later, he followed several courses at the Kellogg Business School (Northwestern University) and Harvard Business School. He established an international career at Unilever for 18 years. Aﬅerwards, as Chairman of Unilever Belgium, he joined Massive. Under his leadership, the lighting company realized a strong internal growth complemented by acqui- sitions. From 2012 until June 2020, Mr. Noten was CEO of Vandemoortele Group. He holds various other mandates in companies and organizations.

Dirk Meeus BV,

(represented by Mr. Dirk Meeus) ........................................... 4/4

In accordance with article 7:99 § 2 of the Code of Companies and Associations, the company declares that at least one of the members of the Audit Committee complies with the requirements of independence and possesses the neces- sary expertise in accounting and auditing. The members have a collective expertise in respect of the activities of the company. In 2020, the Audit Committee assisted the Board in discharging its responsibilities for monitoring control in the broadest sense.

This included the following tasks:

• Analysis of the consolidated financial statements of the company, both for annual, half-yearly and quarterly consolidated results
• Analysis of possible impairments
• Evaluation of systems of internal control
• Review of the content of the annual financial report as far as following matters are concerned:
- › Financial information
- › Comments on internal control and risk management
- › Supervision and monitoring of the auditor's independence
- › Renewal process of the mandate of the statutory auditor

Remuneration and Nomination Committee

The Remuneration and Nomination Committee in 2020 was composed of three Directors: Mr. M. Delbaere (chairman and independent Director), Lemon Comm. V (represented by Mr. J. Noten, independent Director) and Dirk Meeus BV (represented by Mr. D. Meeus, independent Director).

The Committee advises the Board on the following items:

• The remuneration policy in general and on the remuneration of the members of the Board of Directors and the Executive Committee in particular
• stock option plans. In 2019, the Board of Directors initiated a stock option plan.
• appointment or dismissal of Directors

The Board of Directors presents the above mentioned items, enclosed in the remuneration report, to the General Meeting.

The Committee discussed, amongst others, the functioning of the members of the Management Committee, the prin- ciples and parameters of the variable part of the remuner- ation, performed benchmarks as to the remunerations of the members of the Management Committee and Board of Directors and formulates proposals to the Board of Directors.

Nominations have not been discussed during 2020.

The Committee met twice in 2020. The number of meetings attended by individual members of the Committee and the CEO in 2020 is as follows:

Mr. Michel Delbaere ................................................................. 2/2 Lemon Comm. V,

(represented by Mr. Jules Noten) .......................................... 2/2 Dirk Meeus BV,

(represented by Mr. Dirk Meeus) ........................................... 2/2 M.J.S. Consulting BV,

(represented by Mrs. Michèle Sioen) .................................... 2/2

The term as members of the Committee coincides with their term as Director.

As long as Sihold holds more than 35% of the shares of the company it is their prerogative to appoint the majority of the Directors. Until now Sihold has waived this right.

5.1.4.

Management Committee

5.1.5.

Remuneration report

The members of the Management Committee (per 31 December 2020):

• M.J.S. Consulting BV, represented by Mrs. Michèle Sioen
• P. Company BV, represented by Mrs. Pascale Sioen
• Asceca Consulting BV, represented by
Mr. Geert Asselman
• Devos Trading Company BV, represented by Mr. Michel Devos
• Flexcor NV, represented by Mr. Frank Veranneman
• Almelior BV, represented by Mr. Bart Vervaecke
• GPW Lobbestael BV, represented by
Mr. Grisja Lobbestael
• O.V.S. Consulting BV, represented by Mr. Orwig Speltdoorn
• Mr. Uwe Stein
• W.P.J. Verbeke Consulting Comm. V., represented by Mr. Wout Verbeke

• Mr. Robrecht Maesen
• Mr. Brecht Viaene

(1) General principles of the remuneration policy

The company compensates the CEO, the Directors and the executive management fairly.

The level and structure of the remuneration is such that qual- ified and expert professionals can be attracted, retained and motivated, taking into account the nature and scope of their individual responsibilities.

For non-executive Directors, any form of variable compen- sation is explicitly excluded.

To align the interests of the CEO and the executive manage- ment to those of the company and its shareholders, a portion of the remuneration package is linked to the performance of the company and individual performance.

On the advice of the Remuneration and Nomination Committee the Board approves contracts for the appoint- ment of the CEO and other members of the executive management.

Secretary: Mr. Robrecht Maesen.

Contracts of the CEO or the executive management signed on or aﬅer 1 July 2009 incorporate no specific provisions relating to early termination.

The Remuneration and Nomination Committee monitors the market conformity of the fees. This assessment is based on the practical experience of the members in other companies.

The Remuneration and Nomination Committee wishes, through a stable and long term policy, to contribute to a sustainable business climate. Consequently, the above- stated principles will be sustained on the long term, and in particular, for the next two financial years.

Contractual relationships between the company, including related companies, and its Directors and members of the executive management

All contracts, whether a conflict of interest rule is appli-cable or not, shall be submitted to the Remuneration and Nomination Committee, that makes a recommenda- tion. A guideline has been incorporated in the Corporate Governance Charter (conflict of interests).

Through the internal control and reporting systems, report- ing to the Remuneration and Nomination Committee is done at regular intervals. The Remuneration and Nomination Committee in turn reports to the Board of Directors. If the conflict of interest rule (article 7:96 of the Code of Companies and Associations ) plays , this is signaled and the procedure described in law enters into force.

Transactions between the company, including related companies, and its Directors and members of the executive management

(2) Determination of the individual remuneration level of the CEO, the non-executive Directors and the executive management

The Board of Directors decides on the remuneration policy for the CEO based on a proposal by the Remuneration and Nomination Committee. The remuneration is a competitive and motivating package consisting of:

• A basic compensation component
• A variable compensation determined by the Group results from the previous year, of up to 35% of the basic compensation. This compensation is paid in cash.
• No compensation is paid for insurances or pensions
• There is currently no provision for a long-term performance related remuneration

On the advice of the Remuneration and Nomination Committee, the Board of Directors approves the remunera- tion of the executive management, as proposed by the CEO. The remuneration is a competitive and motivating package consisting of:

The Sioen Corporate Governance Charter contains conduct guidelines with respect to direct and indirect conflicts of interest of members of the Board of Directors and the executive management team that fall outside the scope of article 7:96 of the Code of Companies and Associations. Those members are deemed to be related parties to Sioen Industries and have to report, on an annual basis, their direct or indirect transactions with Sioen Industries or its subsidi- aries. The Audit Committee ensures that these transactions occur according to the "arms length" principle.

• A basic compensation component
• A variable compensation determined by the Group results on the one hand and the contribution of the various executives within their respective areas of responsibility on the other hand. This variable compen-sation is up to 25% of the basic compensation and is paid in cash.
• No compensation is paid for insurances or pensions
• There is currently no provision for a long-term performance related remuneration

The General Shareholders' Meeting determines the remu- neration of the members of the Board of Directors. The remuneration of the members of the Board of Directors and the various Committees is split into a base fee and attend- ance fees, each representing approximately 50% of the total remuneration if all meetings are attended.

(3) Departure fees

The departure fee in case of an early termination of the contract shall not exceed 12 months (basic remuneration).

Depending on the needs, the CEO can propose to the Remuneration Committee to adjust the significance of some parameters annually.

On the advice of the Remuneration Committee, the General Shareholders' Meeting can approve a higher severance pay. This shall not exceed 18 months (basic remuneration).

The personal objectives are set annually through individual interviews and the variable remuneration linked to this is up to 30% of the total variable remuneration.

There are no specific individual agreements with Directors, the CEO and the executive management with respect to departure fees.

There are no specific recruitment agreements, or agreements on a golden parachute with the executive management.

(4) The principles with respect to determining the amount of the variable part of the remuneration The variable part of the remuneration will always consist of two or more components.

The first part of the variable compensation will always relate to the results of the Group. This is to strengthen the Group cohesion and to prevent counter-productive internal competition.

The second part of the variable part of the remuneration will cover the individual areas of responsibility of the member.

The variable remuneration of the CEO, CFO and Chief HR Oﬀicer will only be dependent on the Group results.

The variable remuneration is based on the following principles:

• Turnover (the achievement of certain annual revenue targets and/or growth rates)
• Profitability (return on sales targets and/or investment projects)
• Debt level (the debt of the company is key. In order to ensure future growth, it must be within certain limits.)
• Personal objectives (depending on the function). These mainly relate to qualitative objectives. (For example initiate the development of a long term strategy.)

Contracts signed on or aﬅer 1 July 2009 refer specifically to the criteria (as stated in the Belgian Corporate Governance Code) to be taken into account in determining the variable portion of compensation.

(5) Recovery right

There is no provision for recovery right in favor of the company in case variable remuneration was granted on the basis of incorrect financial information.

(6) Evaluation of the remuneration

The remuneration of the CEO and each executive manager is evaluated on an annual basis (by the Remuneration and Nomination Committee) as follows:

• The basic compensation is determined by the job responsibilities.
• The variable compensation is determined by formal and informal objectives determined at the beginning of the year and evaluated at the end of the year. The Remuneration and Nomination Committee advises the Board of Directors on the variable compensation that is agreed by the members of the Committee.

5.1.6.

Remuneration of the members of the Board of Directors

In 2020 following remunerations were paid to the members of the Board of Directors and executive management in their capacity as Director (no performance related remunerations are paid to the non-executive Directors):

Name	Represented by	Board of Directors	Audit Committee	Remuneration and Nomination Committee	Total
Fixed remuneration	Pro rata	Fixed remuneration	Pro rata	Fixed remuneration	Pro rata
Mr. M. Delbaere President of the Board	25 000	50 000	1 500	1 500	78 000
M.J.S. Consulting BV	Mrs. M. Sioen Managing Director	12 500	25 000	37 500
D-Lance BV	Mrs. D. Sioen Member	12 500	25 000	37 500
P. Company BV	Mrs. P. Sioen Member	12 500	25 000	37 500
Dirk Meeus BV	Mr. D. Meeus Member	12 500	25 000	5 000	5 000	1 000	1 000	49 500
Lemon Comm. V	Mr. J. Noten Member and President of the Audit Committee	12 500	25 000	6 000	6 000	1 000	1 000	51 500
Mr. P. Macharis Member	12 500	25 000	37 500
Total	100 000	200 000	11 000	11 000	3 500	3 500	329 000

in relation to the performance of the company and the aver- age remuneration of the employees only applies from 2020 and therefore does not require figures from before 2020 are listed in the comparison. It will therefore reflect the evolu- tion in the remuneration report from 2020 onwards, but not retroactively.

M.J.S. Consulting, represented by Mrs. Michèle Sioen, received in 2020, in her capacity of CEO and next to her remuneration as a member of the Board of Directors, a fixed remuneration of EUR 585 112, a variable remuneration of 78 990 EUR and a compensation for other expenses (mainly car expenses) amounting to EUR 49 161. 10 000 options were granted to M.J.S. Consulting in 2019 (none in 2020).

The other members of the executive management(1), including Directors in their capacity as member of execu- tive management, received in 2020 a fixed remuneration of EUR 3 506 449 (excluding CEO), a variable remuneration of EUR 315 368 and a compensation for other expenses (mainly car expenses) amounting to EUR 235 013.

The ratio between (i) the remuneration of the member of the executive management earning the most and (ii) the remuneration of the employee with the lowest income is factor 19.

(1)The executive management consists of executive Directors and members of the Management Committee.

The company interprets article 3: 6, §3, fiﬅh paragraph of the Code of Companies and Associations, in a way that the requirement for the five-year evolution of the remuneration

Share based payments

At the proposal of the Board of Directors, the General Meeting of 26 April 2019 approved the 2019 Option plan of the company. The plan oﬀers stock options to acquire existing shares of the company to the members of the Management Committee and to eligible executives of the company and some of its subsidiaries. The main features of the stock options can be summarized as follows: (i) The stock options will be oﬀered to the beneficiaries free of charge. (ii) Each accepted stock option will entitle the holder to acquire one share of the company with the same rights (including dividend rights) as the other existing shares of the company. (iii) The strike price will be deter- mined at the time of the oﬀer and will be equal to the lower of (a) the average closing price of the shares of the company on the stock exchange during the thirty days prior to the

date of the oﬀer or (b) the closing price of the day preced- ing the date of the oﬀer. (iv) The stock options cannot be exercised for a period of three calendar years aﬅer the year in which the oﬀer was made, or aﬅer a period of ten years aﬅer the date of the oﬀer.

(v) The stock options cannot be transferred, except in the event of death, unless authorized by the Board of Directors. The 2019 Option Plan is in accordance with the provisions of the law of 26 March 1999.

5 000 options were granted during 2020, 33 500 during 2019, all are outstanding and exercisable at the end of 2020.

The fair value of the services received in return for share options is based on the fair value of the share options granted, measured using the Black & Scholes model with the following inputs:

Fair value per granted instrument determined at grant date

EUR 7.23

EUR 4.99

An expense of EUR 48 thousand was recognized under 'Services and other goods' in the income statement by nature and under 'Administrative expenses' in the income statement by function.

No liabilities have been recognized, as treasury shares have been purchased to cover the liability.

Other

There are no retirement benefit plans.

5.1.7.

Evaluation of the Board of Directors, Working Committees, Directors and interaction with the executive management

Periodically, and at least every two years, the Board evaluates its overall performance (including the Working Committees).

In the Board's view, this is best accomplished by the entire Board under the leadership of the Chairman, with the assis- tance of the Remuneration and Nomination Committee and of an external specialist when deemed appropriate.

The Chairman is in charge of organizing periodic perfor- mance appraisals through an extensive questionnaire that addresses the following items:

• the functioning of the Board or Committee
• the eﬀective preparation and discussion of important items
• the individual contribution of each Director

• the present composition of the Board or Committee against its desired composition

Once a year, the Board also evaluates the interaction with the executive management.

5.1.8.

External audit

Within the Sioen Industries Group, external audits are mainly performed by Deloitte Bedrijfsrevisoren. They include the audit of the statutory annual accounts and consolidated accounts of Sioen Industries NV and its subsidiaries. To the extent that the audit of a number of subsidiaries are carried out by other auditors, Deloitte Bedrijfsrevisoren makes use of their work in certain instances. During the past financial year the Statutory Auditor and its network received EUR 509 021 from Sioen Industries and its subsidiaries in respect of statutory auditor mandates. In addition, the Statutory Auditor and its network received EUR 51 748 for other assignments outside the mandate. The mandate of Deloitte Bedrijfsrevisoren as Statutory Auditors of Sioen Industries NV expires at the General Shareholders' Meeting of 2023.

Deloitte Bedrijfsrevisoren is represented by Mr. K. Dehoorne.

5.1.9.

Risk management and internal control (ERM)

5.1.9.1.

General

5.1.9.2.

Components of the risk management systems and internal control systems

The purpose of (Enterprise Risk Management) ERM activities at Sioen Industries is to provide a comprehensive program to proactively manage the portfolio of what leadership collec- tively believes are the most critical risks to the achievement of the entity's mission and objectives.

(1) Control environment (internal environment)

The control environment is the basis of the internal control and risk management system. The control environment is defined by a mix of formal and informal rules and corporate culture on which the operation of the business relies.

ERM promotes an ongoing, risk-aware culture across the company to enable decision makers to perform a risk-reward analysis of choices, and make decisions with an understand- ing of implications of such actions.

The objectives of ERM include:

• To identify and to assess a broad array of risks that could negatively impact the achievement of strategic goals
• To measure the eﬀectiveness and eﬀiciency of our operations
• To assure reliability of the financial process and reporting process
• To comply with laws and regulations

The enterprise risk management systems in place are inspired by the COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework.

Integrity and ethics

Within the Group the goal is to create an open corporate culture where communication with and respect for custom- ers, employees and suppliers is key, without any distinction.

All employees are expected to deal with the company assets with the necessary common sense and manage them as a good family man. These informal rules / corporate culture, where appropriate, are sustained by more formal rules such as the Protocol to prevent abuse of inside information and the Corporate Governance Charter.

Competences

The expertise and experience of the independent Directors contribute to effective and proper management of the company. The aim is to attract Directors with diﬀerent skills and experiences in order to create a momentum that enables the Group to develop further.

Governing Bodies and Corporate Governance

In line with the existing guidelines, the Group has the follow- ing administrative and operating Committees:

• A Board of Directors
• An Audit Committee
• A Remuneration and Nomination Committee
• An Executive Management Committee

The Board of Directors decides on the strategy of the Group, key policies and risk appetite. The role of the Board of Directors consists of pursuing the long-term success of the company and ensuring that risks are assessed and managed.

The executive management is responsible for developing systems to identify, assess, manage and monitor the risks.

(2) Risk analysis (identifying the main issues that could impact our business)

The main risks relating to the Sioen Group can be divided into four categories:

• Strategic risk: Strategic risks can be summarized as the risks in relation to the appropriateness of the busi-ness model to deliver long term growth in capital and income and the eﬀective communication and delivery of the business model.
• Operational risk: Operational risks are risks arising from inadequate or failed processes, people and systems or from external events.
• Financial risk: Financial risks are risks associated with financial markets (interest rate risks, currencies, commodities and liquidity risks).
• Legal risk: code of conduct ( ethics, fraud, reputational damage,...), legal risks arising from litigations and non-compliance with regulatory environment.

Strategic risks

Strategic risks can be summarized as risks in relation to the appropriateness of the business model to deliver long term growth in capital and income and the eﬀective communication and delivery of the business model.

Risks related to the markets Sioen is active in

Sioen Industries is in terms of income, affected by the economic performance of its divisions (Coated textiles, Apparel and Chemicals). The main markets that are served by the Sioen divisions are Transportation, Construction and civil engineering, Industry in general and the Marine market.

Sioen is sensitive to any major change in activity levels or market dynamics in these activity sectors.

The Group is continuously looking for new applications, new products and new markets to stay ahead of competitors and to increase production and sales activities. If we fail to be innovative, to introduce new ideas, products, services and processes, this can have a negative impact on the opera- tional and financial results of the Group.

Sioen has identified 5 areas of growing future importance around which our R&D is focused and we feel we can oﬀer sustainable solutions;

• Climate change: abrupt changes in climatologic circumstances creating drought or flash floods requiring new materials such as geo-synthetics for infrastructure works.
• Energy: evolution to the production of "green" energy and the gradual exit of nuclear energy.
• Ecological footprint: development of specific technical textiles to help save energy. Newly developed solar protection textiles will become key in the building industry.
• Safety: increasing safety awareness and specialization lead to the development of new highly sophisticated garments and technical textiles.
• Demography: the demographic evolution requires new processes to cultivate vegetables and other foodstuﬀs, and requires building and maintaining of infrastructure and new housing.

Sioen R&D department is actively developing new materials to cope with these challenges. More specifically Sioen R&D department is focusing on biodegradable textiles, structural and non-structural composites and substrates for vertical gardens and the agricultural industry. In parallel Sioen R&D is developing also solutions to recycle sold items at the end of their lifespan.

Risks relating to expansion

The Sioen Industries Group is committed to a growth strat- egy that includes growth through acquisitions and organic growth. As a consequence the success of this growth strategy also depends on the successful integration of the acquired companies in its existing operations.

Sioen does not apply a big bang theory. New businesses and people are integrated through a soﬅ process where people are in the integration process involved and motivated to create synergies throughout the Group with respect for the strengths and culture of the individual company.

Operational risks

Operational risks are risks arising from inadequate or failed processes, people and systems or from external events.

HR-related risks

The Sioen Industries Group operates on the edge between textile and chemistry. Most of these activities require highly skilled people with various technical backgrounds. In some cases state organized formal educational programs ceased to exist. Sioen mitigates this lack by organizing in-house training programs.

Sioen HR policy evolves around 4 key parameters;

• Hiring highly skilled and professional people
• Training people ( both in house and external)
• Motivating people with professional challenges and a competitive remuneration policy
• Retaining staﬀ with various incentives and initiatives

Information technology risks

The Group heavily depends on its IT backbone ( infra- structure, network, operating systems, data security, ERP application,...). Although the systems are managed by an experienced team of specialists, their failure could result in an immediate loss of revenue for the Group.

To mitigate these risks the Group has a contingency plan to safeguard the continuity through a mirror and a back-up system oﬀ-site.

Risk management on delegation of authority

Not respecting the existing signing authorizations may result in commitments relating to operations not authorized by the company. An authorization matrix has been developed and integrated in the central ERP system ( SAP). Sioen is currently working on the roll out of this ERP system in all Sioen compa- nies. For each and every new Sioen company that is inte- grated in the central ERP system the authorization matrix is reviewed and adapted were needed. Certain authorizations ( such as treasury ) are centralized throughout the Group.

Fraud risk management

Collective or individual fraud of employees can lead to finan- cial loss and damage the image of the Group. Sioen tries to mitigate this risk by a segregation of duties ( where possi- ble) resulting in the above mentioned authorization matrix, through detailed financial controlling and reporting and last but not least through centralizing sensitive tasks.

Risk of fire and environmental risks

As Sioen operates on the edge between textile and chemistry the manufacturing processes require the use of chemicals. Some of these chemicals are quite sensitive and flammable when applied. In order to mitigate this risk Sioen has state of the art equipment, extractor hoods to evacuate solvents, smoke detectors, sprinklers, halon gas extinguishers, auto-mated fire-doors,… to avoid catastrophic accidents.

The use of the chemicals itself requires also special attention as the risk for pollution is real. Here also, Sioen has the neces- sary handling procedures in place and the production and storage buildings comply with all regulations and standards for handling and storage of dangerous chemicals.

Financial risks

Financial risks are risks associated with financial markets (interest rate risks, currencies, commodities and liquidity risks)

Risks related to commodities

The coating division is the only division of the Sioen Industries Group with substantial exposure to variations in the price of certain commodities. The key polymers , PVC, PET and plasticizer are derivates of crude oil and their pricing is a mirror of the evolution of the price of crude oil.

In the coating division (64% of the total Group sales) raw materials account for approximately 50% over sales. Each of these 3 key polymers accounts for 25% of the total raw material cost with the remaining 25% being packaging and various other consumables.

An increase in price of 10% in one of the key polymers would have an eﬀect of 1.3 p.p. on the total material cost (cost of raw materials in this division would evolve from 50% over sales to 51.3% over sales). An increase in 10% of all 3 key raw materials would push the material cost to 53.8% over sales in the coating division.

In order to mitigate this volatility, Sioen has adopted a policy of flexible sales pricing, following roughly this evolution with a delay between 4 to 9 months.

In the apparel division (28% of total Group sales) pricing mechanics are quite diﬀerent. Summarized we can distin- guish between items held in catalogue and customer specific garments. Customer specific garments are considered as projects. Each and every project is specifically costed and sales prices are quoted based on the competitive environ- ment. Garments held in inventory are continuously costed and re-costed whereas sales prices are subject to the competitive environment.

The chemicals division has to a large extent the same cyclic- ity and sensitivity as the coating division.

Risks related to interest rates, foreign currencies and liquidity

The Group's interest risk is relatively limited. To hedge its interest rate risks and to take advantage of the current market interest rates, the Group entered into interest rate derivatives together with the loan agreements (see also para- graph 2.5.15. Financial instruments for more information).

Currency risks are limited by oﬀsetting transactions in the same currency ("natural hedging") or by hedging exchange rates through forward contracts or options.

To ensure liquidity and financial flexibility, the Sioen Group has suﬀicient credit lines available to meet current and future financial needs.

Legal risks

Legal risks are associated with risks arising from litiga- tion, non-compliance with regulatory environment and unlawful conduct (non-ethical behavior, fraud, reputa- tional damage, insider trading, ...)

Non-compliance and regulatory risks

Sioen Industries Group has activities in more than 23 coun- tries worldwide, all having their own specific legal require- ments and specificities. In order for the Group to comply with various legislations the centrally organized legal department is occasionally supported by local law firms and audit firms.

Non-ethical behavior

Sioen Industries Group is quoted on the Brussels Euronext stock exchange. As such Sioen Industries is exposed, amongst other, to non-ethical behavior (insider trading, cartels,...).

In order to counter this Sioen limits access to sensitive infor- mation, has introduced a code of conduct and a compliance oﬀicer. The compliance oﬀicer informs key management about closed periods, to whom key management needs to report when trading in Sioen shares and organizes compul-sory briefings about ethical behavior.

Sioen has various policies in place that are underwritten by key managers and that are regularly challenged by the Audit Committee and external auditors.

Reputational damage

Sioen is active in the Apparel or protective garments busi- ness. Traditionally the garment industry is situated in low labor cost regions sometimes facing social challenges. Sioen has implemented policies covering human rights, equal opportunities and non-discrimination and banning of child labor. These commitments are supported through our CSR statement in this annual report.

(3) Control activities

In order to properly manage the principal risks identified, the Sioen Industries Group took the following control measures:

Formal rules and systems

• An authorization cascade system/matrix in the computer system
• Grant of approval limits
• Definition of signing authorities (authorization contract, payment authority, authority to representation…)
• Access and monitoring systems in the buildings

Physical controls

• Cycle counts of inventories
• Physical inventory of machinery and equipment

(4) Information and communication

The consolidated financial statement of Sioen Industries are prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and endorsed by the European Union.

The vast majority of the Sioen Industries Group uses the Sioen SAP soﬅware and the accounting transactions are recorded in a common operating chart of accounts. An accounting manual prescribes the standard way of recording of the most relevant transactions. The manual is available on the Sioen intranet and is part of the training program of new hires.

The accounting and control organization consists of 3 levels; The accounting teams in the diﬀerent legal entities and the shared service center responsible for the preparation and reporting of the financial information.

The controllers at the diﬀerent levels in the organization responsible for the review of the information.

The Group consolidation and control department responsi- ble for the final review of the financial information provided by the diﬀerent legal entities and for the preparation of the consolidated financial statements

(5) Supervision and monitoring

Currently the nature , limited complexity, size and deeply centralized organization of the company limit the need for an independent internal audit function, contrary to principle 5.2/17 and 5.2/29 of the Corporate Governance Code.

Supervision and monitoring is mainly performed by the Board of Directors via the Audit Committee.

As no formal internal audit department is in place the Board executes this supervision and monitoring through the work of the Audit Committee and the Management Committee.

Risks are monitored by a group of "business controllers" who report, monitor and analyze both financial and non-financial KPI's on a monthly basis. All deviations against budgets and against the previous reference period are carefully analyzed and explained. Besides the regular reports and analysis, there is a control matrix. In this matrix all processes of each Group company are analyzed and weak spots in the process are monitored in detail.

The controllers visit on a regular basis the subsidiaries and report to the Group CEO and CFO about their findings. In order to facilitate these reports and controls the Group is roll- ing out a uniform SAP platform combined with a BI reporting tool. Moreover the Board of Directors also uses the exter- nal audit reporting to the Audit Committee on their review of internal controls and risk management systems. Given the recent accelerated growth of the Group and its global presence the Management Committee is contemplating on introducing an independent internal audit function.

5.1.10. Code of conduct regarding the prevention of abuse of inside information

In order to prevent that privileged information would be used in an unlawful manner by Directors, shareholders, members of management and employees (i.e. "insiders"), or even that such an understanding could be raised, the Board of Directors of Sioen Industries NV has developed a protocol to prevent abuse of inside information ("1997 Protocol").

Following the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation), a new code of conduct regarding the prevention of abuse of inside information ("2016 Code") was approved by the Board of Directors on 16 December 2016. The Code is primarily aimed to protect the market as such, to ensure compliance with the law and to maintain the reputation of the Group. Besides a number of prohibitions on trading in financial instruments of Sioen Industries NV, where insiders have privileged information which is not (yet) available to the public, it does include a number of preventive measures and guidelines to preserve the confidentiality of privileged information. Any insider eligi- ble, has signed this Code. To verify compliance with the Code a Compliance Oﬀicer was appointed.

5.2. GENERAL INFORMATION

5.2.1. Registered oﬀice and name

The registered oﬀice of Sioen Industries, a public limited liability company under Belgian law, is established at Fabriekstraat 23, B-8850 Ardooie. The company is listed in the register of legal persons Gent, division Brugge, under enterprise number 0441.642.780.

5.2.2. Incorporation and publication

Sioen Industries was incorporated under the name 'Sihold' by deed executed before notary-public Ludovic du Faux at Moeskroen on 3 September 1990, published in the annexes to the Belgian Oﬀicial Gazette of 28 September 1990, under no. 900928-197.

5.2.3. Financial year

The financial year begins on 1 January and ends on 31

December of each year.

5.2.4. Term

The company is established for an indefinite period.

5.2.5. Object of the company

The company's objects consist of the following activities, to be performed in Belgium or abroad, on its own behalf or on behalf of third parties, for its own account or for the account of third parties:

• investing in, subscribing for, taking over, issuing, buying, selling and trading in shares, share certificates, bonds, depositary receipts, claims, funds and other securities issued by Belgian or foreign companies, either or not being commercial companies, administrative oﬀices, institutions or associations and either or not (semi-) governed by public law,
• managing investments and participating interests in subsidiaries, holding managerial positions, providing advice, management and other services to or in line with the activities performed by the company itself. These services can be provided pursuant to a contrac-tual appointment or an appointment in accordance with the provisions of the articles of association, as well as in the capacity of external advisor or body of the client.

The company can realize these objects provided that it meets the legal requirements.

The company can perform, both in Belgium and abroad, all industrial, commercial, financial, movable and immovable activities which may either directly or indirectly extend or promote its business. It can acquire all movable and immov- able goods, even if they are not related to the company's objects, neither directly nor indirectly.

• spinning yarns and threads of all kinds, weaving threads of all kinds, coating and printing fabric and any other material, manufacturing plastic and plastic-coated materials, manufacturing, purchasing and selling, both in Belgium and abroad, materials that are useful for or relate to the above mentioned products and raw mate-rials, and producing chemicals and pigments,
• manufacturing ready-to-wear outer clothing made of woven fabric, manufacturing all types of tailor made garments and embroidery, manufacturing outer cloth-ing made of knitted fabrics, as well as household linen and upholstery materials, manufacturing wall-covering materials, printing and finishing all fabrics, manufac-turing ready-made articles and outfits for men and women, knitwear, embroidery, household and table linen, children's clothing. Manufacturing safety and signposting materials. Wholesale and retail trade in all of the above products,

The company can in any manner whatsoever acquire inter- ests in all associations, businesses, undertakings or compa- nies that have the same, similar or related objects or that may promote the company's business or facilitate the sale of its products or services; the company can cooperate or merge with such associations, businesses, undertakings or companies.

5.2.6. Consultation of documents

The statutory and consolidated accounts of the company and additional reports are filed with the National Bank of Belgium. The articles of association and special reports required by the Code of Companies and Associations, as well as annual and semi-annual reports to shareholders and all published information, can be requested by sharehold- ers at the registered oﬀice of the company. The articles of association, the annual and semi-annual reports can also be downloaded from the websitewww.sioen.com.

5.2.7. Voting right

Article 33 of the articles of association states that each share gives the right to one vote at the General Meeting. By way of derogation from the above, fully paid shares that have been registered in the name of the same shareholder in the regis- ter of registered shares for two consecutive years entitle the holder of these shares to two votes per share. The two-year period is calculated on the basis of article 7:53 of the Belgian Code of Companies and Associations.

The holders of shares without voting rights, profit-shar-ing certificates without voting rights, convertible bonds, subscription rights or depositary receipts for shares issued with the company's concurrence can attend the general meeting but only have an advisory vote.

Article 14, sub 2 of the articles of association stipulates that a majority of the Directors are appointed among the candidates nominated by Sihold NV, as long as Sihold NV possesses either directly or indirectly at least thirty-five percent of the shares of the company. Until now Sihold has waived this right.

5.2.8. Modifications to the articles of association Any modifications to the articles of association have to be approved by the General Meeting of Shareholders, in accordance with article 7:153 of the Code of Companies and Associations.

5.2.9. Authorized capital

The Board of Directors is authorized, during a period of five years counting from the date of publication in the annexes to the Belgian Oﬀicial Gazette of the deed containing the amendment of the articles of association of 27 April 2018 (BOG of 11 May 2018), to increase the subscribed capital in one or several parts, by a maximum amount of forty- six million euros. This renewable authority is valid for capital increases in cash, in kind or by conversion of reserves. At the moment this amount is still wholly available.

Within the framework of the authorized capital, the Board of Directors is authorized, in the interest of the company and provided that the conditions referred to in articles 7:132 and 7:188 to 7:194 of the Code of Companies and Associations are met, to cancel or restrict the preferential subscription right that is granted to the shareholders by law. The Board of Directors is authorized to restrict or cancel the preferential subscription right in favor of one or more particular persons, even if these are not staﬀ members of the company or its subsidiaries.

In the event of an increase of the subscribed capital, carried out within the limits of the authorized capital, the Board of Directors is authorized to ask for an issue premium. If the Board of Directors decides to do so, this issue premium should be allocated to an unavailable reserve account that can only be reduced or written oﬀ by resolution of the General Meeting passed in the manner required for the amendment of the articles of association.

In the absence of an explicit authorization granted by the General Meeting to the Board of Directors, the authoriza- tion of the Board of Directors to increase the subscribed capital through a contribution in cash with cancellation or restriction of the preferential subscription right of the exist- ing shareholders or through a contribution in kind will be suspended as from the date of notification to the company by the Financial Services and Markets Authority of a public take-over bid on the shares of the company. This authoriza- tion will apply again immediately aﬅer the take-over bid is concluded. The General Meeting of 24 April 2020 explicitly authorized the Board of Directors to increase the subscribed capital in one or several parts through a contribution in cash with cancellation or restriction of the preferential subscrip- tion right of the existing shareholders or through a contri- bution in kind, pursuant to articles 7:152 and 7:202 of the Code of Companies and Associations, as from the date of notification to the company by the Financial Services and Markets Authority of a public take-over bid on the shares of the company. This authorization was granted for a period of three years from 24 April 2020 and is renewable.

5.2.10.

Acquisition by the company of shares in its own capital

The General Meeting of 27 April 2018 expressly authorized the Board of Directors, under the provisions of the Code of Companies and Associations, to acquire or dispose of its own shares, if the acquisition is necessary to prevent imminent serious harm to the company. This authorization is valid for a period of three years from the publication of the afore- mentioned resolution in the annexes to the Belgian Oﬀicial Gazette (BOG of 11 May 2018).

The General Meeting of 28 April 2017 authorized the Board of Directors to acquire its own shares through purchase or exchange, in accordance with the Code of Companies and Associations, for the maximum number allowed by law and at a price per share that cannot be lower than the last closing price at Euronext Brussels prior to the date of acquisition, less ten per cent (10%), and that cannot be higher than the same closing price increased by ten per cent (10%), and to sell or cancel these shares. The Board of Directors is enti- tled to use this authorization one or several times, whenever he seems fit. The Board is further authorized to determine through a notarial deed the amended number of shares and to adapt the articles of association accordingly, the amount of the subscribed capital cannot be reduced and the unavail- able reserve, accrued for the cancelled shares, has to be writ- ten oﬀ. The Board of Directors can empower one director to appear before the notary to pass the notarial deed. This authorization also applies to the acquisition of shares of the company by one or several of its direct subsidiaries within the meaning of the law, during a period of five years starting on 28 April 2017, and can be extended.

5.2.11. Change of control clauses

The company is a party to a number of significant agree- ments that take eﬀect, alter or terminate upon a change of control of the company following a public take-over bid or otherwise. It only concerns bilateral credit agreements with KBC, ING and BNP Paribas Fortis that make funds available to the company or its subsidiaries. Each of these agreements contains clauses which, in the event of a change of control of the company, give the counterparty the right to terminate the agreement early and require the early repayment of the funds made available.

5.3. SHARE INFORMATION

5.3.1. Listing

In order to be able to continue following and ensuring the company's fast growth, and in the conviction that a transparent policy would further strengthen the Group's growth possibilities, the Sioen Industries share was introduced on the cash market, double fixing, of the Brussels Stock Exchange, on 18 October 1996. A year later the share was listed on the semi-continuous segment of the forward market and then, as of 11 March 1998, has been quoted on the continuous segment of the Brussels forward market, which has become Euronext Brussels. As per 31 December 2020, the total number of shares amounts to 19 779 933 (issued and fully paid), of which 12 907 047 shares, or 65.25%, are owned by the Sioen family, a.o. through the holding company Sihold NV. 186 842 shares, or 0.95%, are owned by Sioen Industries NV within the framework of a share buyback program. The remaining number of shares, 6 686 044 or 33.80%, are spread among the public. Sioen has no preferential shares. Shares do not have a par value. There are no restrictions on the transfer of shares.

5.3.2. Notice pursuant to the law on public takeover bids

Following the entry into force of the Law of 1 April 2007 on public takeover bids (Takeover Act), on February 15, 2008, Sihold NV, Sinvest NV and Mr. and Ms. Jean-Jacques Sioen made a notification in accordance with Article 74 §7 of the Takeover Act with a view to obtain an exemption from the obligation to make an oﬀer in accordance with article 74, §1 of the Takeover Act. For an update of the control structure, reference is made to the transparency statements published on the company's website. The most recent notification to the company in accordance with article 74, §8 of the Takeover Act dates from 6 May 2020. Since Ms. Jacqueline Sioen-Zoete has passed away, Sihold NV, Sicorp NV, JCA2M BV, ALCAMI BV, MIDIPA BV, Michèle Sioen, Daniëlle Sioen and Pascale Sioen (all persons in favor of whom the exemption provided for in article 74, §1 of the Takeover Act applies in accordance with article 74, §5, 2 °, 3 ° and 4 ° of the Takeover Act) have reported to the company that (i) Sihold holds 65.25% of the shares in the company, (ii) Sihold NV is controlled by Sicorp NV, (iii) JCA2M BV, ALCAMI BV and MIDIPA BV jointly control Sicorp NV, and ( iv) JCA2M BV is controlled by Michèle Sioen, ALCAMI BV is controlled by Daniëlle Sioen and MIDIPA BV is controlled by Pascale Sioen.

5.3.3. Evolution of the share in 2020

The share was quoted at its highest price on 3 January 2020, at EUR 23.20, at its lowest price on 19 March 2020 (EUR 14.70) and quoted EUR 22.10 on 31 December 2020. Market capitalization amounted to EUR 437.14 million on 31 December 2020.

SHAREPRICE

250 000

200 000

VOLUME

150 000

100 000 50 000 0

01/01/09

01/04/09

01/07/09

01/10/09

01/01/10

01/04/10

01/07/10

01/10/10

01/01/11

01/04/11

01/07/11

01/10/11

01/01/12

01/04/12

01/07/12

01/10/12

01/01/13

01/04/13

01/07/13

01/10/13

01/01/14

01/04/14

01/07/14

01/10/14

01/01/15

01/04/15

01/07/15

01/10/15

01/01/16

01/04/16

01/07/16

01/10/16

01/01/17

01/04/17

01/07/17

01/10/17

01/01/18

01/04/18

01/07/18

01/10/18

01/01/19

01/04/19

01/07/19

01/10/19

01/01/20

01/04/20

01/07/20

01/10/20

5.3.4.

Shareholders' structure

33.80%65.25%

0.95%

Sioen Family

Sioen Industries NVPublic

5.3.5. 2020: financial communication policy

The Sioen Industries share was included on Euronext Brussels in Compartment B (Mid Cap).

5.3.6. Dividend policy

For the year 2020, the Board of Directors will propose to the General Shareholders' Meeting of 30 April not to distribute a dividend.

5.3.7. Share codes and classification ISIN: BE0003743573

Euronext code: BE0003743573 Mnemo: SIOE Type Stock: Ordinary stock - Continuous

Market Euronext Brussels: Euronext - Local securities Compartment B: (Mid Cap)

ICB sectorial classification: 3000, Consumer Goods

3700, Personal & Household Goods 3760, Personal Goods 3763, Clothing & Accessories

Reuters: SIOE.BR Bloomberg: SIOE.BB

Declaration by the responsible persons regarding the true and fair view

Declaration regarding the information given in this annual report 2020

The undersigned declare that :

• The annual accounts, which are in line with the standards applicable for annual accounts, give a true and fair view of the capital, the financial situation and the results of the issuer and the consolidated companies,
• The annual report gives a true and fair view of the development and the results of the company and of the position of the issuer and the consolidated companies, as well as a description of the main risks and uncertainties they are faced with.

M.J.S. Consulting BV, represented by Mrs. M. Sioen, CEO

Asceca Consulting BV, represented by Mr. G. Asselman, CFO

Financial overview

1. Consolidated financial statements

1.1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2020

in thousands of euros

Assets	2020	2019(1)	Note
Non-current assets
Intangible assets	38 929	44 284	2.5.1
Goodwill	40 607	43 417	2.5.2
Property, plant and equipment	159 450	167 934	2.5.3
Investment property	3 867	4 247	2.5.4
Other long term assets	801	815	2.5.6
Deferred tax assets	1 823	1 754	2.5.16
Total non-current assets	245 477	262 451
Current assets
Inventories	129 946	143 293	2.5.7
Trade receivables	66 877	67 172	2.5.8
Other receivables	6 772	10 021	2.5.9
Cash and cash equivalents	51 109	18 198	2.5.9
Derivatives fair value	3 014	2 240	2.5.15
Deferred charges and accrued income	1 357	1 296	2.5.9
Total current assets	259 075	242 220
Assets classified as held for sale	694	2.5.3
Total assets	504 552	505 366

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

Equity & liabilities	2020	2019(1)	Note
Equity
Share capital	46 000	46 000
Retained earnings	223 004	203 670
Other reserves	-4 521	-5 572
Equity attributable to the owners of the company	264 483	244 099	1.4
Non-controlling interest	0	0
Total equity	264 483	244 099	1.4
Non-current liabilities
Borrowings	94 407	102 772	2.5.10
Provisions	650	416	2.5.12
Retirement benefit obligations	5 418	5 147	2.5.13
Deferred tax liabilities	19 900	21 075	2.5.16
Lease liabilities	6 745	8 097	2.5.11
Other amounts payable	18	1 332	2.5.15
Total non-current liabilities	127 138	138 838
Current liabilities
Trade and other payables	45 505	46 222	2.5.14
Borrowings	30 962	41 322	2.5.10
Provisions	2 124	1 782	2.5.12
Retirement benefit obligations	190	66	2.5.13
Current income tax liabilities	1 643	2 214
Social debts	15 199	15 542
Other amounts payable	7 875	6 881
Lease liabilities	3 350	3 405	2.5.11
Derivatives fair value	1 698	1 331	2.5.15
Accrued charges and deferred income	4 385	3 664
Total current liabilities	112 931	122 429
Total equity and liabilities	504 552	505 366

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

1.2. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020

1.2.1.

By nature in thousands of euros

2020	2019(1)	Note
510 118	509 620
Changes in stocks and WIP (work in progress)	-9 420	4 413
Other operating income(3)	11 482	10 791
Raw materials and consumables used	-242 387	-265 504
Material margin	50.64%	48.77%
Services and other goods(4)	-74 237	-75 173
Remuneration, social security and pensions	-117 325	-111 243
Depreciations	-27 217	-25 445
Impairment loss(5)	-2 668
Write oﬀ inventories and receivables(6)	-1 489	1 880
Provisions for liabilities and charges	-577	-1 025
Other operating charges(7)	-6 026	-6 074
Operating result (EBIT)	40 255	42 241
Financial result	-12 046	-1 992	2.4.1
• Financial income	1 992	1 942
• Financial charges(8)	-14 039	-3 934
Profit (loss) before taxes	28 209	40 249
Income tax	-8 923	-10 145	2.4.2
Group profit (loss)	19 286	30 104
Group profit (loss) attributable to shareholders of Sioen Industries	19 286	30 104
Group profit (loss) attributable to non-controlling interest	0	0
EBITDA	67 473	67 686
Restated EBITDA(1)(2)	63 782	65 024

Net sales

Definitions and reconciliations for non-GAAP measures can be found on pages 108 & 109 of this annual report.

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

(2) The 2020 restated EBITDA is excluding the net gain related to the sale of land and buildings in Indonesia.
(3) Other operating income mainly consists of gains on sale of assets, employment support, rental income, R&D subventions, indemnities and other various income. In 2020, an exceptional gain related to the sale of land and buildings is included, see note (2). Also in 2020, employment support is higher due to government support related to Covid-19. In 2019, badwill amounting to EUR 3 639 thousand, has been recognized under this section, we refer to note 2.5.18. Business combinations and disposal of subsidiaries and note (1).

(4) Services and other goods mainly consist of transport costs, energy costs, maintenance and repair costs, fees, sales and marketing costs, interim personnel costs and small materials.

(5) We refer to note 2.1.7. Goodwill impairment analysis.
(6) Write oﬀ inventories and receivables consists of additional write oﬀs in some companies and reversals in other companies.
(7) Other operating charges cover a number of general expenses, mostly non-profit related taxes (such as property tax, 'tax foncière' in France and similar), but also bank-ing costs, loss on debtors, loss on sale of assets, fines & penalties and other various expenses. In the consolidated income statement by function (1.2.2), property taxes, banking costs and loss on debtors are not included in 'Other expenses' but spread by function. On the other hand, provisions for liabilities and charges are included in 'Other expenses', while they are shown separately here.

(8) Exceptionally high in 2020 related to the cost of unwinding the existing hedge instrument, we refer to note 2.5.15. Financial instruments.

Earnings per share \| in euro (except shares and per share items)	2020	2019(1)
Net earnings for the period	19 285 778	30 103 616
Weighted average ordinary shares outstanding	19 670 684	19 759 545
Ordinary shares per 01 January	19 746 433	19 779 933
Ordinary shares per 31 December	19 593 091	19 746 433
Basic and diluted earnings per share	0.98	1.52

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

1.2.2.

By function in thousands of euros

2020	2019(1)	Note
510 118	509 620
Cost of sales	-400 165	-400 384	2.4.1
Manufacturing contribution	109 954	109 236
Sales and marketing expenses	-25 997	-27 750	2.4.1
Research and development expenses	-10 483	-10 324	2.4.1
Administrative expenses	-41 719	-36 926	2.4.1
Financial income	1 992	1 942
Financial charges	-14 039	-3 934
Other income	11 387	10 765	2.4.1
Other expenses	-2 886	-2 761	2.4.1
Profit (loss) before taxes	28 209	40 249
Income tax	-8 923	-10 145	2.4.2
Group profit (loss)	19 286	30 104
Group profit (loss) attributable to shareholders of Sioen Industries	19 286	30 104
Group profit (loss) attributable to non-controlling interest
EBITDA	67 473	67 686
Restated EBITDA(1)(2)	63 782	65 024

Net sales

Definitions and reconciliations for non-GAAP measures can be found on pages 108 & 109 of this annual report.

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, included in 'Other income', we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

(2) The 2020 restated EBITDA is excluding the net gain related to the sale of land and buildings in Indonesia, included in 'Other income'.

1.2.3.

Consolidated statement of total comprehensive income in thousands of euros

2020

2019(1)

Note

Group profit (loss)

Exchange diﬀerences on translating foreign operations:

• Exchange diﬀerence arising during the period
• Reclassification to income statement of exchange diﬀerences previously recognized in other comprehensive income

Cash flow hedges:

• Reclassification to income statement of fair value changes previously recognized in other comprehensive income
• Income tax

Net other comprehensive income (loss) potentially to be reclassified to profit or loss in subsequent periods

Remeasurement of defined benefit obligation:

• Gains (losses) arising during the period
• Income tax

Net other comprehensive income (loss) not to be reclassified to profit or loss in subsequent periods

Other comprehensive income (loss) aﬅer tax impact

Total comprehensive income (loss) for the period

Attributable to shareholders of Sioen Industries Attributable to non-controlling interests

22 948 22 948 0

19 286

-3 923

10 311 -2 578

3 890

-285 58

30 104

2 615

1 432 -424

3 624

-460 118

1.2.1

33 385 33 385 0

1.4

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

1.3. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020

in thousands of euros

Group profit (loss)

Income tax

Financial charges

Financial income

Operating result

Depreciation and amortization of non-current assets

Impairment loss

Badwill

Write oﬀ inventories and receivables

Provisions

Gain/loss on disposal and sale of intangibles, property, plant and equipment and investment property

Equity-settled share-based payments

Movements in working capital:

• Inventories
• Trade receivables
• Other long term assets, other receivables & deferred charges and accrued income
• Trade and other payables
• Social debts, other amounts payable & accrued charges and deferred income

Cash flow from operating activities

Income taxes paid

Net cash flow from operating activities

Interest received

Acquisitions of subsidiaries(2)

Investments in intangibles, property, plant and equipment (without right-of-use assets) and investment property

Disposal and sale of intangibles, property, plant and equipment and investment property

Net cash flow from investing activities

Net cash flow before financing activities

Purchase of treasury shares

Interest paid

Disbursed dividend

Increase in borrowings

Decrease in borrowings

Loan repayments in the framework of business combinations

Repayment of lease liabilities

Other(3)

Currency result

Net cash flow from financing activities

Impact of cumulative translation adjustments and hedging

Change in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

2020

19 286

8 923

14 039

-1 992 40 255

27 217

2 668

1 489

577

-3 909

12 111

379

2 801

-1 172

117 82 641 -12 619 70 021 54 25

-13 716

5 107 -8 529 61 492 -2 611 -1 154

1 066 -19 791

-4 012

-1 291

429

-27 364 -1 217 32 911 18 198 51 109

2019(1)

30 104

10 145

3 934

-1 942 42 241 25 445

-3 639

-1 880

1 025

-95 24

-3 523

5 563

-325

-1 237

712 64 311 -17 890 46 421 111

-21 639

-20 957

533 -41 952 4 470 -856 -1 282 -12 264

20 359 -15 538 -124

-3 967 116 -386 -13 941

806 -8 665 26 861 18 198

Note 1.2.1

1.1

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

(2) These amounts are net of cash acquired (EUR 1 664 thousand cash acquired in 2019).
(3) Related to revaluations various accounts, 2020 mainly USD.

Disclosure on changes in liabilities from financing activities

Borrowings (non-current)

Borrowings (current)

Total borrowings

Lease liabilities (non-current)

Lease liabilities (current)

2019

Cash flows

Non-cash changes

(1)

2020

acquired

(2)

(3)

other

102 772

through business combinations

-8 365

41 322

-18 725

94 407

8 365

144 094

-18 725

30 962

125 369

8 097

-1 215

3 405

-4 012

-137

6 745

4 005

Total lease liabilities

11 502

-4 012

2 790

-48

3 350

-184

10 095

2018

Cash flows

Non-cash changes

(1)

(2)

(3)

other(4)

Borrowings (non-current)

Borrowings (current)

Total borrowings

Lease liabilities (non-current)

Lease liabilities (current)

118 012

-15 240

21 253

4 821

-124

15 240

139 264

4 821

-124

3 686

4 411

715

-3 967

6 658

Total lease liabilities

4 401

-3 967

11 069

(1) Sum lines 'Increase in borrowings' and 'Decrease in borrowings' in statement of cash flows.
(2) Line 'Loan repayments in the framework of business combinations' in statement of cash flows.
(3) Line 'Repayment of lease liabilities' in statement of cash flows.
acquiredthrough business combinations
133
133
2019
FX
102 772
41 322
144 094
1
8 097
-1
3 405
11 502
(4) EUR 6.5 million of total lease liabilities within category 'Other' relates to the initial recognition of former 'Operating leases' as per 1January 2019.

1.4. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020

in thousands of euros

Other reservesSharecapital

Retainedearnings

Foreigncurrency translationreserve

Revaluation surplus

Pensionreserves

Treasuryshares

Hedgingreserves

Equitybeforenon-controllinginterest

Non-controlling interest

Equity

Note

Balance at 1 January 2020

46 000

203 670

3 513

-572

-856

-7 734

244 099

1.1

Total comprehensive income (loss) for the period	19 286	-3 843	-228	7 734	22 948	0	22 948	1.2.3
Payment of dividends
Equity-settled share-based payment plans	48	48	48
Purchase of treasury shares	-2 611	-2 611	-2 611
Balance at 31 December 2020	46 000	223 004	-330	76	-800	-3 467	264 483	0	264 483	1.1

Other reservesSharecapitalRetainedearningsForeigncurrency translationreserve

Revaluation surplusPensionreservesTreasurysharesHedgingreservesEquitybeforenon-controllinginterest

Non-controlling interestEquityNote

Balance at 1 January 2019

46 000

185 806

898

-230

-8 742

223 809

Total comprehensive income (loss) for the period	30 104	2 615	-343	1 009	33 385	0	33 385	1.2.3
Payment of dividends	-12 264	-12 264	-12 264
Equity-settled share-based payment plans	24	24	24
Purchase of treasury shares	-856	-856	-856
Balance at 31 December 2019(1)	46 000	203 670	3 513	76	-572	-856	-7 734	244 099	0	244 099	1.1

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination.

2. Notes to the consolidated financial statements for the year ended 31 December 2020

2.1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1.1. Statement of compliance

The consolidated financial statements are drawn up in conformity with the International Financial Reporting Standards (IFRSs), as adopted within the European Union.

2.1.2. Basis of preparation

The consolidated annual financial statements of Sioen Industries NV (the 'Company') include the annual financial statements of the Company and its subsidiaries (together referred to below as the 'Group').

The consolidated annual financial statements give a general overview of the Group's activities and the results obtained.

They give an accurate picture of the entity's financial position, financial performance and cash flow, and are drawn up on a going concern basis.

The annual financial statements are stated in thousands of euros, unless stated otherwise, as the euro is the currency of the primary economic environment in which the Group is active. The annual financial statements of foreign participations are converted in accordance with the principles described in the section 'Foreign currencies'.

The consolidated financial statements are presented on the basis of the historical cost method, unless otherwise stipulated in the accounting principles set out below.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the eﬀective date of acquisition and up to the eﬀective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the Group. These companies are accounted for by the full consolidation method. All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in subsidiaries are identified sepa-rately from the Group's equity herein. The interests of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests' proportionate share of the fair value of the acquired identifiable net assets. The choice of measurement basis is made on an acquisition- by-acquisition basis. Subsequent to an acquisition, the carrying amount of non-controlling interests is the amount of those inter- ests at initial recognition plus the non-controlling interest share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Subsidiaries' annual financial statements are drawn up for the same financial year as those of the parent company and on the basis of uniform financial reporting principles for comparable transactions and other events in similar circumstances.

2.1.3. Basis of consolidation

The consolidated financial statements incorporate the finan- cial statements of the Company and entities controlled by the Company (its subsidiaries). The Company controls an entity if and only if the Company has all of the following elements:

• power over the entity, i.e. the Company has existing rights that give it the ability to direct the relevant activities (the activities that significantly aﬀect the entity's returns);
• exposure, or rights, to variable returns from its involve-ment with the entity;
• the ability to use its power over the entity to aﬀect the amount of the Company's returns.

Foreign currencies

On the basis of the Group's relevant economic environment and its transactions, the Euro has been chosen as the reporting currency.

Transactions in foreign currencies are converted at the exchange rate which is applicable on the date of the trans-action. On each balance sheet date, monetary assets and liabilities expressed in foreign currency are converted at the closing rate. Gains and losses arising from such conversions are recorded in the income statement. Non-monetary assets and liabilities expressed in foreign currency are converted using the historical exchange rate.

In the consolidated accounts, assets and liabilities from the Group's foreign subsidiaries are converted at the closing rate. The income statement of the Group's foreign subsid- iaries is converted at the average exchange rate over the period, unless exchange rates have fluctuated significantly.

The components of equity are converted at their histori- cal exchange rate. The resulting exchange diﬀerences are recorded in other comprehensive income, under the heading 'Exchange diﬀerences on translating foreign operations'.

In the consolidated accounts, exchange diﬀerences arising on monetary items that form part of the Company's net investment in foreign subsidiaries (intra-group loans), are recorded as other comprehensive income, under the head- ing 'Exchange diﬀerences on translating foreign operations'.

If a foreign subsidiary is disposed of, the cumulative amount of the exchange rate differences that was recognized in equity, is recorded in the income statement.

Business combinations

If the Group takes over an entity or business activity, the identifiable assets, liabilities and contingent liabilities of the party which has been taken over are adopted at their fair value. Subsidiaries' financial statements are included in the scope of consolidation from the date of acquisition until control ceases. Goodwill is measured as the diﬀerence between the aggregate of (i) the value of the consideration transferred (generally at fair value), (ii) the amount of any non-controlling interest, and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer's previously-held equity interest in the acquiree, and the net of the acquisition-date amounts of the assets acquired and the liabilities assumed (measured in accord- ance with IFRS 3). If this diﬀerence is negative, the surplus, aﬅer reassessment of the fair values, is accounted for directly in the income statement.

If the Group increases its interest in an investment in which it did not yet have control, the surplus or deficit compared with the net asset, aﬅer adjustment to the fair value that was acquired, is processed as if it were a new acquisition accord- ing to the methodology explained in the section above. If the Group increases its interest in an investment in which it already had control, the greater or lesser price that was paid vis-à-vis the share in the net assets that was acquired, is included directly in the company's own equity.

2.1.4.

Application of new and revised International Financial Reporting Standards (IFRSs)

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (the IFRIC) of the IASB that are relevant to its operations and effective for annual reporting periods beginning on 1 January 2020, all of which were endorsed by the European Union.

Standards and interpretations applicable for the annual period beginning on 1 January 2020

• Amendments to IAS 1 and IAS 8 Definition of Material
• Amendments to IFRS 3 Business Combinations: Definition of a Business
• Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform - Phase 1

• Amendments to references to the Conceptual Framework in IFRS standards

The Group has not early adopted any standards, interpre- tations or amendments that have been issued but are not yet eﬀective.

The mandatory application of all amendments to or improvements of standards and interpretations listed above, did not give rise to any major eﬀects on the Group's financial position and financial performance.

Standards and interpretations published, but not yet appli-cable for the annual period beginning on 1 January 2020

• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (applicable for annual periods beginning on or aﬅer 1 January 2023, but not yet endorsed in the EU)
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies (applicable for annual periods beginning on or aﬅer 1 January 2023, but not yet endorsed in the EU)
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (applicable for annual periods beginning on or aﬅer 1 January 2023, but not yet endorsed in the EU)

• Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use (applicable for annual periods beginning on or aﬅer 1 January 2022, but not yet endorsed in the EU)
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts - Cost of Fulfilling a Contract (applicable for annual periods begin-ning on or aﬅer 1 January 2022, but not yet endorsed in the EU)
• Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework (applicable for annual periods beginning on or aﬅer 1 January 2022, but not yet endorsed in the EU)
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform - Phase 2 (applicable for annual periods beginning on or aﬅer 1 January 2021)
• Amendment to IFRS 16 Leases: COVID-19-Related Rent Concessions (applicable for annual periods beginning on or aﬅer 1 June 2020)
• Annual Improvements to IFRS Standards 2018-2020 (appli-cable for annual periods beginning on or aﬅer 1 January 2022, but not yet endorsed in the EU)

It is expected that the standards and interpretations, not yet applicable, will have no significant impact on the Group's consolidated financial result or position.

2.1.5.

Balance sheet and income statementIntangible assets

Intangible assets are valued at cost price. Intangible assets are recognized if it is likely that the Group will receive the associated future economic benefits and if the asset's cost price can be reliably determined. Aﬅer their initial recogni- tion in the accounts, all intangible assets are valued at cost price, less any accumulated depreciation or impairments.

Intangible assets are depreciated on a straight-line basis over the best estimate of their economic life.

The remaining economic life and the depreciation method used are reassessed at the closing of every financial year.

Internally generated intangible assets are only recognized if all the following conditions are satisfied:

• an identifiable asset has been generated;
• it is likely that the generated asset will yield future economic benefits and;
• the asset's cost price can be reliably determined.

Subsequent expenditure on capitalized intangible assets is only included in the balance sheet if it increases the likely future economic benefits associated with the asset concerned. All other expenditure is recorded in the income statement at the time it is incurred.

Licences, patents and similar rights

Expenditure on purchased licences, patents, trademarks and similar rights is capitalized and depreciated on a straight-line basis over the contractual term, where applicable, or over the estimated economic life, which is deemed to be no more than five years.

Computer soﬅware

Expenditure relating to the development or maintenance of computer soﬅware is normally oﬀset against the result of the period in which it is incurred. Only external expenditure which is directly related to the purchase and of purchased soﬅware is recorded as an intangible asset and depreciated on a straight-line basis over three years. Purchased ERP soﬅware and the associated implementation costs are depreciated on a straight-line basis over seven years.

Research and development

Research expenditure with a view to the acquisition of new scientific or technological insights or knowledge is included as a cost in the income statement as it arises. Development expenditure in which research results are used in a plan or design for the production of new or substantially improved products and processes prior to commercial production or implementation is only recognized in the balance sheet if all the following conditions are satisfied:

• the product or process is precisely defined and the expenditure is individually identifiable and reliably measurable;
• the product's technical feasibility has been suﬀiciently demonstrated;
• the product or process will be commercialized or used within the company;

• the assets will generate future economic benefits (e.g. a potential market exists for the product or its internal usefulness has been suﬀiciently proven);
• the appropriate technical, financial and other resources are available to finalize the project.

If the above criteria are not satisfied, the development costs are taken to the income statement as they arise. Capitalized development costs are depreciated on a straight-line basis over the expected duration of the generated benefits from the start of commercial production or the implementation of the product or process.

Goodwill

Goodwill is measured as the diﬀerence between the aggregate of (i) the value of the consideration transferred (generally at fair value), (ii) the amount of any non-controlling interest, and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer's previously-held equity interest in the acquiree, and the net of the acquisition- date amounts of the identifiable assets acquired and the liabilities assumed (measured in accordance with IFRS 3). If this diﬀerence is negative, the surplus, aﬅer reassessment of the fair values, is accounted for directly in the income statement.

Goodwill is recorded as an asset and subjected to an impair- ment test at least once a year. Any impairment loss is imme- diately recorded in the profit and loss account and is not subsequently written back.

Subsequent expenditure associated with a tangible asset is usually recorded in the income statement as it is incurred.

Such expenditure is only capitalized if it can be clearly shown to result in an increase in the expected future economic benefits from the use of the tangible asset compared with the original estimate.

Repair and maintenance costs which do not increase the likely future economic benefits are recorded as costs as they are incurred.

The diﬀerent categories of tangible assets are depreciated by the straight-line method over their estimated economic life. Depreciation commences once the assets are ready for their intended use.

The estimated economic life of the main tangible assets lies within the following ranges:

• Buildings: 20 years
• Machines: 5 to 15 years

• Equipment: 10 years
• Furniture: 5 years
• Hardware: 5 years
• Vehicles: 5 years

If an asset's book value is higher than the estimated recov- erable amount, it is immediately written down to the recov-erable amount.

On the disposal of a subsidiary, associated undertaking or entity over which joint control is exercised, the related good- will is included in the calculation of the gain or loss on disposal.

Property, plant and equipment

Tangible assets are valued at cost price less accumulated depreciation and impairments. A tangible asset is recog- nized if it is likely that the Group will receive the associated future economic benefits and if the asset's cost price can be reliably determined.

The cost price includes all direct costs and all directly attribut- able costs incurred in order to bring the asset to the location and condition necessary for it to function in the intended way.

The gain or loss on the sale or disposal of an asset is deter- mined as the diﬀerence between the net income on disposal and the asset's book value. This diﬀerence is recorded in the income statement.

Impairment of tangible and intangible assets

As goodwill, which is subjected to an impairment test every year, intangible assets and tangible assets also are subject to an evaluation when there is an indi-cation that their recoverable amount may be lower than their book value. If an asset does not generate a cash inflow which is independent of other assets, the Group estimates the recoverable amount of the cash- generating unit (CGU) to which the asset belongs.

The recoverable amount is the highest value of the fair value minus sales costs and the value to the business.

The method of the going concern value uses cash flow fore- casts based on the financial budget that is approved by the

management. Cash flows aﬅer this period are extrapolated by making use of the most justified percentage growth over the long term for the sector in which the CGU is active. The management bases its assumptions (prices, volumes, return) on past performances and on its expectations with regard to the development of the market. The weighted average growth percentages are in conformity with the forecasts included in the sector reports. The discount rate used is the estimated weighted average equity cost of the Group before taxes, and takes account of the current market evaluations of the time value of money and the risks for which the future cash flows are adapted.

If the recoverable amount of an asset (or CGU) is estimated to be lower than its book value, the asset's (or CGU's) book value is reduced to its recoverable amount. An impairment loss is immediately recorded in the income statement.

If an impairment loss is subsequently written back, the asset's (or CGU's) book value is increased to the revised estimate of its recoverable amount, but only to the extent that the increased book value is no higher than the book value that would have been recorded if no impairment loss had been recorded for the asset (or CGU) in previous years. However, impairment losses on goodwill are never written back.

Borrowing costs

The borrowing costs that are directly attributable to the acqui- sition or construction of the capital assets are capitalized.

Other borrowing costs are recognized as an expense in the year in which they are incurred. In 2020 no borrowing costs were capitalized.

Lease agreements

At the commencement date of a lease, a liability to make lease payments (i.e. the lease liability) and an asset repre- senting the right to use the underlying asset during the lease term (i.e. the right-of-use asset, presented under 'Property, plant and equipment'), are recognized. There are two recognition exemptions - leases of 'low-value' assets (e.g. personal computers) and short-term leases (i.e. leases with a lease term of 12 months or less). The lease liabilities, representing the net present value of the lease payments, are recognized as non-current or current liabilities, depend- ing on the period in which they are due. The lease payments are discounted using the rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee's incremental borrowing rate is used. Lease interest is charged as an interest expense (under financial charges) in the income statement. Leased assets are depreciated, using straight-line depreciation over the lease term,

including the period of renewable options, in case it is probable that the option will be exercised.

Lessees are required to remeasure the lease liability upon the occurrence of certain events (e.g. a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognize the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.

Investment property

A property investment, i.e. one which is maintained in order to generate rental income, an appreciation of value or both, is shown at cost price less accumulated depreciation and impair- ments on the balance sheet date. The estimated economic life of the investment property is between 10 and 20 years.

Government grants

Investment grants relating to the purchase of tangible fixed assets are oﬀset against the purchase price or manufacturing cost of the assets in question. The expected amount is recorded in the balance sheet at the time of initial approval, and, if necessary, corrected subsequently at the time of definitive allocation of the grant. The grant is recorded in the income statement in proportion with the depreciation of the tangible assets for which it was obtained.

Other government grants are shown under 'Other operating income' on a systematic basis over the periods in which the costs for which the grants are intended to compensate, are recognized, if there is reasonable assurance that the entity will receive the grants and comply with the conditions attached to receiving the grants.

Inventories

Inventories are valued at the lower of cost price or net real- isable value. The cost price includes all direct and indirect costs incurred to bring the goods to the stage of completion they have reached on the balance sheet date. The cost price is calculated using the weighted average cost price method.

The net realisable value is the estimated sale price minus the estimated finishing costs and costs associated with marketing, sale and distribution.

Financial assets

Financial assets are classified at initial recognition, and subsequently measured as at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow char- acteristics and the Group's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the trans- action price determined under IFRS 15.

For purposes of subsequent measurement, financial assets are classified in four categories:

The financial assets measured at amortized cost include 'Trade receivables', 'Other receivables', Other amounts receivable included in 'Other long term assets' and 'Cash and cash equivalents'.

Cash equivalents are short-term, extremely liquid invest- ments which can be converted immediately into cash of a known amount, and which do not carry any material risk of change of value.

Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

The Group currently does not have financial assets at fair value through OCI with recycling of cumulative gains and losses.

Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

The Group does not currently have financial assets classified as financial assets at fair value through OCI with no recycling of cumulative gains and losses.

• Financial assets at amortized cost (debt instruments);
• Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);

• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments);
• Financial assets at fair value through profit or loss

Financial assets measured at amortized cost

This category is the most relevant to the Group. The Group measures financial assets at amortized cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Financial assets at amortized cost are subsequently meas- ured using the eﬀective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Financial assets measured at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as eﬀective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

The financial assets measured at FVTPL are the derivative financial assets and the other shares included in 'other long term assets'.

Derecognition

A financial asset is primarily derecognised when:

• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

Derivative financial instruments

Derivatives are initially recognised at fair value at the date of the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recog- nised in profit or loss immediately unless the derivative is designated and eﬀective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

The Group does not apply hedge accounting. The hedging reserves included in '1.4. Consolidated statement of changes in equity' relate to a collar which was settled in 2016 (see also note 2.5.15. Financial instruments).

Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified on the basis of the economic reality of the contractual agreement. An equity instrument is a contract which includes the residual right to a share in the Group's assets, aﬅer the deduction of all liabilities. Equity instruments issued by the Company are recorded to the amount of the received consideration, less the direct costs of issue.

Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an eﬀective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group's financial liabilities include trade and other payables, other amounts payable, borrowings including bank over- draﬅs, and derivative financial instruments.

The trade and other payables, other amounts payable and borrowings are subsequently measured at amortized cost.

The derivative financial instruments are recognized at fair value through profit or loss.

Income tax

Income tax expense represents the sum of the tax due for the reporting period and deferred taxes. The tax due for the reporting period is based on the taxable profit for the period. Taxable profit diﬀers from the net profit in the income statement, because it excludes certain items of income or expenditure which are taxable or deductible in subsequent years, or which will never be taxable or deductible. The current tax liability is calculated on the basis of the tax rates for which the legislative process has been (substantially) completed by the balance sheet date.

Deferred taxes are taxes which are expected to be paid or recovered on the basis of differences between the book value of assets or liabilities in the annual accounts and their taxable value used for the calculation of the taxable profit. They are accounted for using the balance sheet liability method. Deferred tax liabilities are usually recognized for all taxable temporary diﬀerences and deferred tax assets are recognized to the extent that it is likely that a taxable profit will be available against which the recoverable temporary diﬀerence can be oﬀset. Such assets and liabilities are not recorded if the temporary diﬀerences arise from goodwill or from the initial recognition (other than in connection with a business combination) of other assets and liabilities in a transaction which has no eﬀect on the taxable profit or the profit before tax.

Deferred tax liabilities are recognized for taxable temporary differences which relate to investments in subsidiaries, associated undertakings and enterprises accounted for by the equity method unless the Group can determine the time when the temporary diﬀerence will be resolved or if it is likely that the temporary diﬀerence will not be resolved in the near future.

The book value of deferred tax assets is assessed at every balance sheet date and reduced if it is no longer likely that suﬀicient taxable profit will be available to make it possible to use all or some of the benefit of the deferred tax receivable.

Deferred taxes are valued on the basis of the tax rates which are expected to apply in the period in which the tax recovery is realized or the liability is settled. Deferred taxes are recorded as income or expenses in the income statement for the period, unless the taxation arises from a transaction or event that has been directly included in equity. In this case, the deferred tax is also accounted for in equity.

Retirement benefit obligation

In accordance with laws and practices of each country, some entities have either defined benefit plans or defined contribution plans.

Defined contribution plans

Contributions to defined contribution plans are recorded as an expense as they fall due.

Defined benefit plans

In defined benefit plans, the amount on the balance sheet (the 'net liability') corresponds to the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corpo- rate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approx- imating to the terms of the related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used.

Provisions

Provisions are established in the balance sheet if the Group has a legally enforceable or de facto liability on the balance sheet date as a result of an event in the past, for which it is likely that an outlay will be required of resources which contain economic benefits, and if this outlay can be reliably estimated. The amount recorded as a provision is the best estimate on the balance sheet date of the outlay required to satisfy the existing liability, if necessary discounted if the time value of money is relevant.

Provisions for reorganization costs are recorded if the Group has a detailed formal plan for the reorganization that has already been communicated to the parties concerned before the balance sheet date.

Revenue from contracts with customers

The Group is active within the following segments:

• Spinning, weaving and coating of technical textiles ('Coating')
• Manufacturing of professional protective clothing ('Apparel')
• Producing fine chemicals ('Chemicals')

We apply the five-step model to account for revenue arising from contracts with customers.

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.

Actuarial gains and losses arising from experience adjust- ments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.

Past service costs are recognized immediately in the income statement at the earlier of when the amendment occurs or when the related restructuring or termination costs are recognized.

Over all the businesses, contracts with customers to sell products is one performance obligation. Revenue recognition occurs at a point in time, when control of the asset is transferred to the customer, generally on delivery of the goods.

The Group warranties are determined to be assurance-type warranties which are accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

2.1.6. Key sources of estimation uncertainty

In the application of the Group's accounting policies, the Directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources (for example useful life of property, plant and equip-ment, assessment recoverability of deferred tax assets, estimates in measuring defined benefit obligations, credit risk, assumptions related to IFRS 16 Leases). The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may diﬀer from these estimates.

Cash flow estimates are prepared based on:

• The 2021 budget, approved by the Board of Directors
• The strategic plan (2022-2025) on the long-term devel-opment of the business environment, approved by the Board of Directors
• A perpetual value

The most important key assumptions are future growth rates, profitability levels (material margin and EBITDA), capital expenditures, and working capital evolutions. The following assumptions apply for the cash flow estimates of these three time horizons:

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision aﬀects only that period, or in the period of the revision and future periods if the revision aﬀects both current and future periods.

2.1.7.

Goodwill impairment analysis (estimation uncertainty)Impairment analysis 2020

We assessed the recoverable amount of each of the cash- generating units to which goodwill is allocated. Because of the strong (vertical) integration and interdependency of the Group's activities, the cash-generating units generally corre- spond with the segments identified in accordance with IFRS 8 (see also paragraph 2.2. Segment information). Initially, the main acquisitions of 2016 and 2017 (Dimension-Polyant & James Dewhurst) were considered as separate cash-generating units. However, the integration of James Dewhurst now proves no separate cash-generating unit exists anymore. As a consequence, James Dewhurst has been included as of 2019 in the 'coating' cash-generating unit. Dimension-Polyant is considered as a separate cash generating unit. Over time, the integration of Dimension- Polyant within the 'coating'cash-generating unit will be reassessed.

The global Covid-19 outbreak, with a negative impact on Sioen's sales markets, represents an impairment indicator.

Key assumptions impairment analysis 2020

The recoverable amount of the diﬀerent cash-generating units has been determined on the basis of a value-in-use approach. Calculations of the value in use cover a five-year period (2021 - 2025) and a perpetual value.

• 2021 budget: the organic growth rate of our global business for 2021 is estimated at 3%. This growth is based on detailed forecasts on product and market level. Profitability levels are based on the estimated raw material prices for 2021 and planned cost structures. Capital expendi- tures are based on detailed capital expenditure plans for each production unit. Working capital requirements evolutions are based on the 2021 goals for each working capital component.
• Strategic plan 2022-2025: the average growth rate in this time horizon of our global business and our different cash-generating units is based on GDP + 2%/3%. This growth rate is a combination of inflation, nominal growth of the economy, and the ambition of Sioen to enforce its position in existing and new markets. Profitability levels are based on normalized material margins and planned improvements on the cost structure in this time horizon. Capital expenditures are based on normal replacement capital expenditures and planned projects to improve the cost structure. Working capi- tal evolutions are calculated as a percentage of incremental sales based on the past performance of the diﬀerent cash-gen- erating units.
• The perpetual value for each individual cash-generating unit is based on a terminal 1.5% growth rate (which is mainly based on a conservative industrial GDP evolution assumption)and normal capital expenditure replacements.

The post-tax discount rate applied to the cash flow is based on the Group's weighted average cost of capital, in view of the business risks and is estimated at 8.43% (8.48% for the coating division, 8.50% for the apparel division, 7.74% for the chemicals division and 8.48% for Dimension-Polyant (within the coating division).

Key assumptions impairment analysis 2019

We refer to the 2019 annual report for the assumptions of the 2019 impairment analysis. Most important changes in assumptions are the terminal growth rate and the discounts rates applied to the cash flow.

Results impairment testing

The amount by which the division's recoverable amount exceeds its carrying amount has been assessed as follows:

• <0%: deficit
• 0-20% exceeds moderately
• 20-50% exceeds clearly
• Over 50% exceeds significantly

2020

Apparel division	exceeds clearly	28 766
Chemicals division	exceeds significantly	50 926
Dimension-Polyant CGU	deficit	-2 782
Remaining coating division (excluding Dimen-sion-Polyant CGU)	exceeds significantly	140 819

Carrying amount in relation to recoverable amount of cash-generating units with significant carrying amounts of assets

Excess discounted cash flow(1)

2019

Apparel division	exceeds clearly	50 588
Chemicals division	exceeds significantly	66 772
Dimension-Polyant CGU	exceeds clearly	8 633
Remaining coating division (excluding Dimen-sion-Polyant CGU)	exceeds significantly	144 916

Carrying amount in relation to recoverable amount of cash-generating units with significant carrying amounts of assets

Excess discounted cash flow(1)

(1) The excess discounted cash flow equals the discounted cash flow, minus the carrying value. The carrying value equals the invested capital: intangible assets + goodwill + property, plant and equipment + investment property + working capital.

Sensitivities

The Group's impairment review is sensitive to a change in key assumptions used.

The following sensitivity scenarios were prepared:

1. A 1 p.p. decrease of the EBIT margin in the forecast period (2021-2025)
2. A 1 p.p. decrease in the growth rate and a 1 p.p. decrease of the derived EBIT margin both in the forecast period (2021-2025) and in the perpetual value
3. A 1 p.p. increase in the discount rate
4. A 1 p.p. decrease in the discount rate
5. A 1 p.p. decrease in the perpetual growth rate only
6. The eﬀect of a general 10% raw material price increase in the coating and chemicals division, in 2022 and 2024, with a recovery of the material margin with a delay of one year

The first column in the table below reflects the excess discounted cash flow (= discounted cash flow - carrying value), as a percentage of the carrying value (the carrying value equals the invested capital: intangible assets + goodwill + property, plant and equipment + investment property + working capital). The next columns reflect the change in excess discounted value for each of the above described scenarios.

2020

Apparel division	26.5%	-68.5%	-89.6%	-57.7%	76.7%	-43.8%	not applicable
Chemicals division	229.9%	-10.4%	-27.9%	-19.8%	27.3%	-15.5%	-5.3%
Dimension-Polyant CGU	-7.6%	163.3%	225.2%	143.6%	-190.6%	107.5%	not applicable
Remaining coating division	69.7%	-26.9%	-47.5%	-28.5%	45.9%	-21.3%	-11.6%

Excess dis-counted cash flow (DCF) versus carrying value (%)

Sensitivity Sensitivity Sensitivity Sensitivity Sensitivity Sensitivity scenario 1

scenario 2

scenario 3

scenario 4

scenario 5

scenario 6

2019

Apparel division	46.6%	-38.5%	-58.7%	-40.8%	54.4%	-31.3%	not applicable
Chemicals division	330.6%	-10.4%	-30.5%	-22.6%	33.4%	-18.6%	-4.4%
Dimension-Polyant CGU	21.2%	-63.4%	-111.2%	-81.4%	115.8%	-64.7%	not applicable
Remaining coating division	69.2%	-28.0%	-52.8%	-34.9%	49.7%	-27.8%	-13.7%

Excess dis-counted cash flow (DCF) versus carrying value (%)

Sensitivity Sensitivity Sensitivity Sensitivity Sensitivity Sensitivity scenario 1

scenario 2

scenario 3

scenario 4

scenario 5

scenario 6

The deficit discounted cash flow on the Dimension Polyant CGU is EUR 2.8 million (compared to EUR 8.6 million excess last year) in our base case. In sensitivity scenario 1, 2, 3 and 5, this headroom decreases even further. As a consequence, management decided to record an impairment on the related goodwill for EUR 2.7 million.

All other scenarios do not result in a deficit headroom.

2.2. SEGMENT INFORMATION

2.2.1.

IFRS 8 operating segments in thousands of euros

Operating segments are reported in a way consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors.

Divisions

For the purposes of management reporting to the chief operating decision maker, the Group is organized into three reportable operating divisions -coating, apparel and chemicals. The principal products and services of each of these operating divisions are described in the first part of this annual report.

The Group's three principal activities are:

• the production of a wide variety of technical textiles, coated with various polymers and marketed in diﬀerent markets. The coating operations are fully integrated and interdependent. The main area of activity within this division, with a centralized R&D, marketing and sales department, is the polymer know how. This approach allows the coating division to explore diﬀerent end-user markets with a wide variety of products.
• the production of technical protective apparel. With a central R&D, sales and marketing department, the main area of activity of the apparel division is the innovation and production of high-quality technical protective garments that meets all European standards. This operating division is active in various sectors (industry, leisure wear, specialized markets) where attention to safety is a priority.
• the processing of basic raw materials into high quality technical semi-finished products. An intensive cooperation of central R&D and sales department, within the chemicals division, is the key driver for the development of high quality pigment pastes, decorative inks, varnishes and inks for digital printing for various markets.

These principal activities coincide with the main product groups.

CoatingApparelChemicalsOther

Total

Note

Year ended 31 December 2020

Revenue from external customers Intersegment revenues

328 539

140 407

41 173

510 118

4 914

9 874

Segment operating result

23 634

11 997

5 810

593

42 033

Year ended 31 December 2019

Revenue from external customers Intersegment revenues

310 836

157 074

41 711

509 620

1.2.1

4 489

411

11 036

Segment operating result(1)

23 925

12 841

5 733

514

43 013

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

Segment revenues and results

Intersegment sales are undertaken at prevailing market conditions.

2020	2019(1)	Note
Segment operating result	42 033	43 013
Reconciling items
• Elimination of intersegment results	-1 778	-772
Operating result	40 255	42 241	1.2.1
Financial charges	-14 039	-3 934	1.2.1
Financial income	1 992	1 942	1.2.1
Profit (loss) before tax	28 209	40 249	1.2.1

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

Segment assets and liabilities

Coating	Apparel	Chemicals	Other	Unallocated/	Total	Note
eliminations
Year ended 31 December 2020
Segment assets	308 502	138 417	33 318	4 269	20 046	504 552
Segment liabilities	271 447	93 993	13 792	32 085	-171 248	240 069
Year ended 31 December 2019(1)
Segment assets	337 819	132 395	31 137	4 571	-556	505 366	1.1
Segment liabilities	319 425	90 509	10 876	33 538	-193 081	261 267

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

The segment liabilities, including the centrally contracted financial debt, have been allocated as good as possible. Unallocated assets or liabilities are head oﬀice assets/liabilities which have not been allocated to the segments.

Information about major customers

There is no reliance on a limited number of customers and there are no revenues from transactions with a single external customer amounting to 10% or more of the total Group sales. We refer to note 2.5.8. Trade receivables.

Other segment information

Year ended 31 December 2020

Depreciations

Additions to non-current assets

Year ended 31 December 2019

Depreciations

Additions to non-current assets

Coating	Apparel	Chemicals	Other	Head oﬀice	Total	Note
19 955	4 432	967	26	1 837	27 217
7 212	3 907	2 864	2 696	16 678
18 143	4 721	961	72	1 548	25 445	1.2.1
18 319	6 153	2 647	94	3 864	31 078
55

2.2.2.

Geographical sales information in thousands of euros

The Group's sales from external customers by geographical location is detailed below. The geographical revenue split is based on the country invoiced.

2020	Coating	Apparel
France	59 785	18.1%	29 599	21.0%	29.7%
Germany	53 786	16.3%	14 280	10.1%	6.2%
Belgium	13 516	4.1%	24 335	17.3%	18.1%
Eastern Europe	32 161	9.7%	3 535	2.5%	11.5%
Scandinavia	16 917	5.1%	15 378	10.9%	1.3%
The Netherlands	18 190	5.5%	13 503	9.6%	1.9%
UK	18 948	5.7%	10 486	7.4%	0.8%
USA	27 038	8.2%	399	0.3%	0.3%
Italy	24 381	7.4%	451	0.3%	3.7%
Spain	14 783	4.5%	1 174	0.8%	1.1%
Austria	3 800	1.1%	5 684	4.0%	13.8%
Switzerland	5 775	1.7%	2 202	1.6%	8.6%
Indonesia	73	0.0%	8 263	5.9%
China	7 310	2.2%	132	0.1%	0.1%
Portugal	4 759	1.4%	373	0.3%	0.4%
Turkey	4 990	1.5%	36	0.0%	0.6%
Other	24 525	7.4%	11 039	7.8%	1.9%
Subtotal	330 737	100.0%	140 868	100.0%	100.0%
Discounts	-2 198	- 462
Net sales	328 539	140 407
56

41 334 - 161 41 173

Chemicals	Total	Note
12 278	101 662	19.8%
2 548	70 615	13.8%
7 468	45 319	8.8%
4 761	40 456	7.9%
550	32 845	6.4%
806	32 498	6.3%
332	29 766	5.8%
136	27 573	5.4%
1 516	26 348	5.1%
466	16 423	3.2%
5 700	15 184	3.0%
3 559	11 537	2.2%
8 336	1.6%
38	7 480	1.5%
161	5 293	1.0%
241	5 267	1.0%
774	36 338	7.1%
512 940	100.0%
-2 821
510 118	1.2.1

Gross salesGross sales

2019

France Germany Belgium Eastern Europe Scandinavia The Netherlands UK

Coating

40 945

57 116

10 127

36 891

16 928

17 873

18 094

USA Italy Spain Austria Switzerland Indonesia China Portugal Turkey Other

24 404

26 713

11 191

3 695

6 522

7 356

5 234

4 120

26 153

Subtotal

313 425 -2 589

100.0%

Discounts

Net sales

310 836

13.1%

18.2%

11.8%

0.0%

1.2%

2.1%

2.3%

1.7%

1.3%

3.2%

5.4%

5.7%

5.8%

7.8%

8.5%

3.6%

8.3%

157 074

157 579 - 505

38 357

15 329

22 118

15 193

17 176

11 044

10 274

7 777

2 983

7 909

1 026

3 622

1 087

1 373

1 369

936

Apparel

100.0%

24.3%

14.0%

10.9%

0.6%

4.9%

1.9%

5.0%

0.7%

0.0%

9.7%

2.3%

9.6%

7.0%

0.7%

0.9%

6.5%

41 711

41 875 - 164

Chemicals	Total	Note
11 913	91 214	17.8%
3 055	75 500	14.7%
7 687	39 931	7.8%
4 283	44 796	8.7%
462	32 584	6.4%
789	35 838	7.0%
641	29 779	5.8%
169	25 660	5.0%
1 511	29 597	5.8%
459	13 019	2,5%
6 033	17 505	3.4%
3 390	12 895	2.5%
1 000	0.2%
14	15 278	3.0%
202	6 462	1.3%
296	4 423	0.9%
970	37 398	7.3%
512 879	100.0%
-3 259
509 620	1.2.1
57

28.4%

7.3%

18.4%

10.2%

1.1%

1.9%

1.5%

0.4%

3.6%

1.1%

14.4%

8.1%

0.0% 0.5% 0.7% 2.3%

100.0%

2.3. EXCHANGE RATE

Rate

2020

2019

EUR	average	1.0000	1.0000
closing	1.0000	1.0000
USD	average	1.1470	1.1194
closing	1.2271	1.1234
GBP	average	0.8893	0.8759
closing	0.8990	0.8508
RMB	average	7.8976	7.7238
closing	8.0225	7.8204
PLN	average	4.4681	4.2990
closing	4.5598	4.2568
TND	average	3.2164	3.2728
closing	3.3256	3.1402
UAH	average	n.a.	28.8268
closing	n.a.	26.6525
AUD	average	1.6567	1.6079
closing	1.5896	1.5995
SEK	average	10.4811	10.5820
closing	10.0341	10.4471

2.4. DETAILED CONSOLIDATED INCOME STATEMENT

2.4.1.

By function in thousands of euros

2020	2019(1)	Note
Sales of goods	517 046	517 775
Subcontracting	142	230
Commisions and discounts	-7 070	-8 385
Net sales	510 118	509 620	1.2.1
Cost of sales
Purchases	-229 065	-250 607
Transport cost goods purchased	-2 821	-3 437
Stock variation	-9 961	3 357
Subcontracting	-9 765	-10 275
Remuneration, social security and pensions	-75 514	-71 687
Depreciations	-18 119	-16 723
Other, services and goods	-53 420	-51 737
Write oﬀ inventories and receivables	-1 499	725
Cost of sales	-400 165	-400 384	1.2.2
Sales and marketing expenses
Remuneration, social security and pensions	-18 844	-18 630
Depreciations	-1 094	- 905
Other, services and goods	-6 075	-9 370
Write oﬀ inventories and receivables	16	1 155
Sales and marketing expenses	-25 997	-27 750	1.2.2
Research and development expenses
Stock variation	- 170	- 128
Remuneration, social security and pensions	-7 646	-7 435
Depreciations	- 368	- 306
Other, services and goods	-2 299	-2 454
Research and development expenses	-10 483	-10 324	1.2.2
Administrative expenses
Remuneration, social security and pensions	-15 320	-13 490
Depreciations	-7 637	-7 511
Impairment loss(2)	-2 668
Other, services and goods	-16 094	-15 925
Administrative expenses	-41 719	-36 926	1.2.2
Other income
Gains on disposal on items of PPE(3)	4 087	144
Received indemnities	250	376
Received rent	1 747	1 749
Other(4)	5 303	8 495
Other income	11 387	10 765	1.2.2
Other expenses
Losses on disposal of items of PPE	-115	-320
Provisions for liabilities and charges	-577	-1 025
Local taxes	-1 452	-943
Other	-742	-473
Other expenses	-2 886	-2 761	1.2.2
60

2020	2019(1)	Note
Financial result
Interests received	22	14
Interests paid(5)	-11 560	-2 855
Interest result	-11 538	-2 842
Currency income trade receivables	208
Currency income trade payables	114	29
Currency expenses trade receivables	-426	-21
Currency expenses trade payables	-1	-54
Currency result other	646	-576
Realized currency result	333	-413
Revaluation income trade receivables	105	65
Revaluation income trade payables	33	78
Revaluation expenses trade receivables	-154	-36
Revaluation expenses trade payables	-60
Fair value hedging instruments	407	908
Revaluation other(6)	-1 186	162
Unrealized currency result	-855	1 178
Other	14	85
Financial result	-12 046	-1 992	1.2.1
Income tax
Current tax	-12 438	-12 344
Deferred tax	3 515	2 199
Income tax	-8 923	-10 145	2.4.2
Group profit (loss)	19 286	30 104	1.2.2

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

(2) We refer to note 2.1.7. Goodwill impairment analysis.
(3) 2020 amount mainly related to the sale of land and buildings in Indonesia, we refer to 'Reconciliations'.
(4) In 2020, employment support is higher due to government support related to Covid-19. In 2019, badwill amounting to EUR 3 639 thousand, has been recognized under this section, we refer to note 2.5.18. Business combinations and disposal of subsidiaries and note (1).

(5) Movement mainly related to the 2020 cost, without cash flow impact, of unwinding the existing hedge instrument; in the light of the anticipated refinancing of the Group, the cost of unwinding of the existing interest rate hedge instrument must be reflected in the 2020 financial result, in accordance with IFRS regulations. We refer to note 2.5.15. Financial instruments.

(6) Mainly due to revaluation of USD.

2.4.2.

Income tax in thousands of euros

2020

2019(1)

Note

Profit (loss) before taxes

Income tax as calculated at theoretical tax rate(2)

Tax impact of:

eﬀect of expenses that are not deductible in determining taxable profit(3)

eﬀect of fiscal incentives that lower the taxable profit eﬀect of revenue under favourable tax regimes/rates(4) withholding taxes movement on deferred tax assets not recognized(5)

adjustments recognized in current year in relation to the tax of prior years(6)

notional interest deduction changes in tax rate(7) badwill(8) impairment loss(9)

Income tax

Current tax Deferred tax

28 209 -6 717

40 249

1.2.1

-23.8%

-11 246

-27.9%

-867 202 720 -110 -335

-3.1% 0.7% 2.6% -0.4% -1.2%

-415 732 213 -41 -988

-1.0% 1.8% 0.5% -0.1% -2.5%

-394

-1.4%

603

1.5% 0.0%

-572 -17 -833

-2.0% -0.1% -3.0%

-49 1 034

-0.1% 2.6%

-8 923 -12 438 3 515

-31.6%

-10 145 -12 344 2 199

-25.2%

1.2.1

2.5.16

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

(2) Weighted average of the tax rates per country the Group is active in.
(3) Mainly disallowed expenses in Belgium.
(4) Related to tax on sale land and buildings Indonesia.
(5) Deferred tax assets not recognized because assessment shows it is not probable that they can be utilized in the near future, mainly related to Italy.
(6) Amounts mainly related to adjustments following tax audits.
(7) Mainly related to deferred taxes in UK.
(8) Badwill not recognized in statutory figures and thus not part of taxable base.
(9) We refer to note 2.1.7. Goodwill impairment analysis.

2.4.3.

Dividends

The Board of Directors will propose to the General Shareholders' Meeting of 30 April not to distribute a dividend. Also for the period ended 31 December 2019 no dividend was distributed.

2.5. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2.5.1.

Intangible assets in thousands of euros

Total additions of intangible assets amount to EUR 2.2 million in 2020 compared with EUR 2.4 million in 2019. Additions in 2020 and 2019 mainly related to soﬅware in the shared service center.

Amortization expenses of intangible assets amount to EUR 6.3 million in 2020 (2019: EUR 6.1 million). Amortization expenses have been included in the line item 'depreciations' in the income statement by nature and are shown mainly in administrative expenses in the income statement by function.

2020

Formation Development Concessions, expenses

expenses

Technical product portfolio

SoﬅwareCustomer portfolio

TotalNotepatents, licences etc.

Acquisition Opening balance

Additions Disposals Sales Transfers

165 7

Eﬀect of foreign currency exchange diﬀerences

Acquired through business combinations

Closing balance Depreciation Opening balance

-1

Disposals Sales Transfers

172

8 892

-59

Eﬀect of foreign currency exchange diﬀerences

Amortization expenses

Closing balance Net book value Opening balance Closing balance

-30

-1

-89

105 83

8 980

-88

38 876

-7 150

40 068

-1 192

23 522

-16 525

221

-309

-7 371

1 830

1 521

-2 785

-19 089

23 543

19 787

21 511 2 146 -99

-35

26 677

-17 317 99

-1 287

-18 479

4 193

5 043

26 985

-308

-12 374

-1 881

-14 183

14 611

12 495

97 710 2 153 -99

-1 623

98 141

-53 426 99

407

-6 292

-59 212

44 284

38 929

1.1 1.1

2019

Formation Development Concessions, expenses

expenses

Technical product portfolio

SoﬅwareCustomer portfolio

TotalNotepatents, licences etc.

Acquisition Opening balance

Additions Disposals Sales Transfers

106 58

Eﬀect of foreign currency exchange diﬀerences

Acquired through business combinations

Closing balance Depreciation Opening balance

-1

Disposals Sales Transfers

165

8 980

-40

Eﬀect of foreign currency exchange diﬀerences

Amortization expenses

Closing balance Net book value Opening balance Closing balance

-1

-59

67 105

8 861

-8

-6 482

-80

38 982

1 086

40 068

21 511

-13 561

-157

-20

-588

-7 150

2 379

1 830

-2 807

-16 525

25 421

23 543

19 190 2 365

-87

-16 432 84

-8

-962

-17 317

2 758

4 193

25 280

280

1 425

26 985

-10 593

-51

-1 729

-12 374

14 686

14 611

92 420 2 424

-95

1 458

1 503

97 710

-47 109 84

-296

-6 105

-53 426

45 310

44 284

1.1

2.5.2.

Goodwill in thousands of euros

2020	2019(1)	Note
Opening balance	43 417	43 287
Eﬀect of foreign currency exchange diﬀerences	-143	130
Impairment loss	-2 668
Closing balance	40 607	43 417	1.1
Allocation to segments
Apparel	22 205	22 201
Chemicals	4 610	4 610
Dimension-Polyant CGU	2 668
Remaining coating division	13 792	13 938

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

Goodwill has been allocated for impairment testing purposes to the following cash generating units:

• Apparel division
• Chemicals division
• Dimension-Polyant CGU
• Remaining coating division (excluding Dimension-Polyant CGU)

The carrying amount of goodwill acquired in a business combination is allocated on a reasonable and consistent basis to each division, in conformity with IAS 36. For the discount factors used, applied in the value in use model, we refer to 2.1.7. Goodwill impairment analysis. Management bases its assumptions on past performances and on its expectations over the coming years.

An impairment analysis has been done at the end of 2020. An impairments loss regarding the goodwill on Dimension-Polyant CGU of EUR 2.7 million is recognized in the year, we refer to note 2.1.7. Goodwill impairment analysis.

2.5.3.

Property, plant and equipment in thousands of euros

During 2020 the total additions of property, plant and equipment amounted to EUR 14.5 million.

The main additions in 2020 were:

• EUR 7.0 million in the coating division (mainly machinery, right-of-use assets and assets under construction).
• EUR 3.7 million in the apparel division (mainly right-of-use assets, machinery and infrastructure buildings).
• EUR 2.9 million in the chemicals division (mainly related to a new building).
• EUR 0.9 million in the shared service center (mainly hardware).

During 2019 the total additions of property, plant and equipment amounted to EUR 28.6 million.

The main additions in 2019 were:

• EUR 18.2 million in the coating division (mainly buildings and machinery, EUR 3.6 million related to IFRS 16).
• EUR 6.0 million in the apparel division (mainly machinery, EUR 4.9 million related to IFRS 16).
• EUR 2.6 million in the chemicals division (mainly related to a new building, EUR 0.5 million related to IFRS 16).

• EUR 1.7 million in the shared service center (mainly hardware, EUR 1.2 million related to IFRS 16).

Buildings for rent are classified as investment property (see note 2.5.4.).

The main disposals relate to the disposal of machines in the coating division and right-of-use assets in the apparel division.

The diﬀerent categories of property, plant and equipment are depreciated by the straight-line method over their estimated useful life. Depreciation commences once the assets are ready for their intended use.

The following economic lifecycles are used in the calculation of depreciation:

• Buildings: 20 years
• Machines: 5 to 15 years

• Equipment: 10 years
• Furniture: 5 years
• Vehicles: 5 years
• Hardware: 5 years

2020

LandBuildingsPlant, machinery and equipmentFurniture, vehicles and hardwareRight-of-use assetsAssets under constructionTotalNote

Acquisition Opening balance

Additions Disposals Sales Transfers

Eﬀect of foreign currency exchange diﬀerences

Additions through acquisitions

Transfer to held for sale

Closing balance Impairment Opening balance Closing balance Depreciation Opening balance

22 954

Disposals Sales Transfers

Eﬀect of foreign currency exchange diﬀerences

Depreciation

Transfer to held for sale

Closing balance Net book value Opening balance Closing balance

22 417

108 622 3 901 -883

251 796 5 051 -3 683 -15

562

3 245

934

-25

-692

-1 361

114 194

252 721

- 9

- 793

-67 152 880

-169 135 3 524 6 -16

209

476

-3 690

-11 968

12 549

-69 754

-177 112

22 417 22 954

41 461 44 431

81 869 74 816

12 233 1 465 -533 -489

-193

-9 934 520 472

154

-945

-9 734

2 299 2 815

33 407 2 950 -1 421

-30

-281

34 625

-18 297 1 261

-4 297

1 051

-21 241

15 110 13 384

4 780 1 159

-4 778

-110

4 780 1 051

433 255 14 525 -6 520 -505

-2 662

438 093

- 802

-264 518 6 184 478

914

-20 900

-277 841

167 934 159 450

1.1 1.1

2019

Land(1) Buildings(1)Plant, machinery and equipment(1)Furniture, vehicles and hardware(1)Right-of-use assetsAssets under constructionTotal Note

Acquisition Opening balance

Additions Disposals Sales Transfers

Eﬀect of foreign currency exchange diﬀerences

Additions through acquisitions(1)

Transfer to held for sale

Closing balance Impairment Opening balance Closing balance Depreciation Opening balance

Disposals Sales Transfers

Eﬀect of foreign currency exchange diﬀerences

Depreciation

Transfer to held for sale

Closing balance Net book value Opening balance Closing balance

21 170

100 770 2 222 -64

221 311 10 502 -2 542 -673

1 132

12 077 1 103 -1 203 -19

18 016

417

21 930 10 250 -222

463

544

1 612

9 143

-1

4 637

-376

157

-4 997

987

22 417

108 622

251 796

- 9

- 793

- 240

12 233

-67 880 49

33 407

-161 247 2 375 535

150

-10 154 1 115 10

-5

-133

-14 204 53

-160

-140

-26

-62

-3 746

-10 667

271

-843

4 408

-3 986

4 780

-67 152

-169 135

20 930 22 417

32 881

41 461

59 271

81 869

-9 934

1 923

2 299

-18 297

7 725

15 110

19 647 4 482 -6

-19 660

227

19 647 4 780

396 904 28 560 -4 036 -692

1 131

16 762

-5 373

433 255

- 802

-253 726 3 592 545

-340

-19 268

4 679

-264 518

142 376

167 934

1.1

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

Assets pledged as security

There are no mortgages secured on the property, plant and equipment.

Contractual commitments

At 31 December 2020, the Group had contractual commit-ments for the acquisition of property, plant & equipment for a total amount of EUR 2.9 million.

Assets classified as held for sale

The assets classified as held for sale as per

31 December 2019 related to land and buildings in Indonesia, for which a conditional sale and purchase agreement was signed in July 2019. The final sale is took place in May 2020. We refer to "Reconciliations" on page 109 for more information.

2.5.4.

Investment property in thousands of euros

Investment property relates to industrial buildings in the Netherlands and Poland, which are kept for rental income.

2020	2019	Note
Acquisitions
Opening balance	5 248	5 106
Additions	94
Disposals	-5
Sales	-855
Eﬀect of foreign currency exchange diﬀerences	-343	54
Closing balance	4 050	5 248
Depreciation
Opening balance	-1 001	-822
Sales	539
Eﬀect of foreign currency exchange diﬀerences	305	-48
Depreciation	-26	-72
Closing balance	-183	-1 001
Net book value
Opening balance	4 247	4 224
Closing balance	3 867	4 247	1.1

In 2020 and 2019 total rental income amounted to EUR 1.2 million. Direct operational expenses relative to those industrial buildings amounted to EUR 0.7 million.

The fair value of investment property amounts to approximately EUR 12.1 million (same value as in 2019). This fair value is determined by the company by calculating the income method fair value based on actual rental prices. This exercise did not reveal any overstatements of the investment property amounts as disclosed above.

The future minimum lease payments to be received for this investment property are disclosed below:

2020

2019

Payments due within one year Between one and five years Minimal future payments

769 1 257 2 026

1 202 1 460

2 662

2.5.5.

Consolidated companies

2020	2019
Coating	Coatex NV	Belgium	100.00%	100.00%
Dewtex Inc.	USA	100.00%	100.00%
Dimension-Polyant GmbH	Germany	100.00%	100.00%
Dimension-Polyant Inc.	USA	100.00%	100.00%
Dimension-Polyant Sailcloth PTY Ltd.	Australia	100.00%	100.00%
Dimension-Polyant SAS	France	100.00%	100.00%
Dimension-Polyant (UK) Ltd.	UK	100.00%	100.00%
Fontana International GmbH	Austria	100.00%	100.00%
Jade Equity Ltd.	UK	100.00%	100.00%
James Dewhurst Ltd.	UK	100.00%	100.00%
James Dewhurst Trustees Ltd.	UK	100.00%	100.00%
Manifattura Fontana S.p.A.	Italy	100.00%	100.00%
Pennel Automotive SAS	France	100.00%	100.00%
Saint Clair Textiles SAS	France	100.00%	100.00%
Saint Clair Textiles Inc.	France	100.00%	n.a.
Saint Frères Confection SAS	France	100.00%	100.00%
Saint Frères SAS	France	100.00%	100.00%
Sioen Coated Fabrics (Shanghai) Trading Co. Ltd	China	100.00%	100.00%
Sioen Fabrics SA	Belgium	100.00%	100.00%
Sioen Industries NV	Belgium	100.00%	100.00%
Sioen Technical Felts SA	Belgium	100.00%	100.00%
Siofab Indústria de Revestimentos Têxteis SA	Portugal	100.00%	100.00%
Apparel	Confection Tunisienne de Sécurité SARL	Tunisia	100.00%	100.00%
Gairmeidi Caomhnaithe Dhun Na nGall Teoranta Ltd.	Ireland	100.00%	100.00%
Kiinteistö OY Helsingin Valuraudantie 20	Finland	100.00%	100.00%
Mullion Survival Technology Ltd.	UK	100.00%	100.00%
PT. Sioen Indonesia	Indonesia	100.00%	100.00%
PT. Sioen Semarang Asia	Indonesia	100.00%	100.00%
PT. Sungin Tex	Indonesia	100.00%	100.00%
Sioen Asia Pacific PTE. Ltd.	Singapore	100.00%	100.00%
Sioen Ballistics OY	Finland	100.00%	100.00%
Sioen Deutschland GmbH	Germany	100.00%	100.00%
Sioen France SAS	France	100.00%	100.00%
Sioen Myanmar Ltd.	Myanmar	100.00%	100.00%
Sioen Nederland BV	the Netherlands	100.00%	100.00%
Sioen NV	Belgium	100.00%	99.87%
Sioen Tunisie SARL	Tunisia	99.84%	99.84%
Sioen Zaghouan SA	Tunisia	99.97%	99.96%
Siorom SRL	Romania	100.00%	100.00%
Ursuit AB	Sweden	100.00%	100.00%
Ursuit Baltics AS	Estonia	100.00%	100.00%
Ursuit OY	Finland	100.00%	100.00%
72

List of consolidated companies on 31 December 2020:

% holding

2020

List of consolidated companies on 31 December 2020:

ChemicalsEuropean Master Batch NV Richard SAS

Other

Monal SA

Roland Real Estate Sp.z.o.o. Roland Ukraine llc. Roltrans Group America Inc. Roltrans Group BV

Roltrans Tegelen BV

Changes with respect to 2019:

• In 2020, Saint Clair Textiles Inc. has been acquired.
Belgium
France Luxemburg
Poland Ukraine
USA the Netherlands the Netherlands
• In 2020, the name of Dickson Saint Clair SAS has been changed to Saint Clair Textiles SAS.

• In 2020, Roland Ukraine llc. has been sold.

There are no restrictions on the ability to access or use assets, and settle liabilities, of the Group.

2.5.6.

Other long term assets

In thousands of euros

2020

2019

100.00%

100.00% n.a.

100.00%

Openingbalance

100.00%

Increase

DecreaseAcquiredthrough businesscombi-nations

Eﬀectofforeign currencyex-changediﬀer-encesClosingbalanceNote

Other shares Guarantees and deposits Other amounts receivable LT Other long term assets

517 292

517

7 815

-70 -2

-14

279 5

-71

-14

801 1.1

2019

OpeningbalanceIncrease

DecreaseAcquiredthrough businesscombi-nations

Eﬀectofforeign currencyex-changediﬀer-ences

Other shares Guarantees and deposits Other amounts receivable LT Other long term assets

407 238

135 30 7

-25 -14

645

172

-39

There are no significant movements in the other long term assets in 2020 and 2019.

ClosingbalanceNote

517

292 7

815 1.1

2.5.7.

Inventories

In thousands of euros

2020	2019(1)	Note
Gross inventory
Raw materials	26 229	32 248
Consumables	399
Work in progress	6 894	7 080
Finished goods	95 753	103 924
Goods in transit	9 206	6 342
138 083	149 993
Amounts written oﬀ
Amounts written oﬀ raw materials	-2 580	-1 649
Amounts written oﬀ consumables
Amounts written oﬀ work in progress	-174	-93
Amounts written oﬀ finished goods	-5 382	-4 958
Amounts written oﬀ goods in transit
-8 136	-6 699
Net inventory
Raw materials	23 650	30 599
Consumables	399
Work in progress	6 720	6 987
Finished goods	90 371	98 967
Goods in transit	9 206	6 342
129 946	143 293	1.1

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.

2019

Write down (1)Reversal (1)Eﬀect of foreign currency exchange diﬀerences

Amounts written oﬀ inventory

-6 699

-2 174

661

-8 136

2020

2018

Write down (1)Reversal (1)Eﬀect of foreign currency exchange diﬀerences

Amounts written oﬀ inventory

-7 402

-694

1 413

-16

-6 699

2019

(1) Sum of 'Write down' and 'Reversal' corresponds with 'Write oﬀ inventories', part of the line item 'Write oﬀ inventories and receivables' in the income statement

Gross inventories (excluding amounts written oﬀ) decreased by EUR 11.9 million compared with 2019, mainly due to the coating division, partly compensated by increases in the apparel division.

Amounts written oﬀ inventory increased by EUR 1.4 million and amounted to EUR 8.1 million at the end of 2020 compared with EUR 6.7 million at the end of 2019.

Amounts written oﬀ inventory are recorded on the basis of a detailed ageing and rotation analysis per unit. The additonal write down is related to both, raw materials and finished goods, and is spread over the companies.

The average stock rotation is around 93 days. It is expected that inventory will be realized no more than twelve months aﬅer the reporting period.

2.5.8.

Trade receivables in thousands of euros

Gross trade receivables
Subtotal trade receivables
Impairment trade receivables doubtful
Total financial instrument 'trade receivables'
2020
Customer 1	4 567	6.6%
Customer 2	1 626	2.3%
Customer 3	1 465	2.1%
Customer 4	1 275	1.8%
Customer 5	1 175	1.7%
Other	59 339	85.4%
Total	69 447	100.0%
Overdue	61-90 days

1-15 days

2020
69 447
69 447
-2 570
66 877	1.1
Outstanding	Sales
9 320	1.8%
4 994	1.0%
1 300	0.3%
13 197	2.6%
3 134	0.6%
478 174	93.7%
510 118	100.0%

Note

16-30 days

31-60 days

Subtotal gross trade receivables

3 097

597

2 544

199

1 492

>90 days

Impairment trade receivables doubtful

-2 630

-251

204

-2 570

Openingbalance

Increase(1)

Decrease(1)Reversaldueto permanentloss (1)

Eﬀectofforeign currencyex-changediﬀer-ences

Acquiredthrough businesscombi-nationsClosingbalance

(1) Sum of 'Increase', 'Decrease' and 'Reversal due to permanent loss' corresponds with 'Write oﬀ receivables', part of the line item 'Write oﬀ inventories and receivables' in the income statement

Trade receivables include outstanding amounts from the sale of goods. Approximately 13% of the total outstanding is expressed in foreign currency. The main foreign currencies are GBP and USD.

An impairment is accounted for the amounts due that are defined as doubtful, amounting to EUR 2.6 million. An impairment for overdue trade receivables is recorded progressively in relation to the age of the receivables. An impairment is also recorded for trade receivables that exceed the internal credit limit. The impairment is recorded in 'sales & marketing expenses' in the consolidated income statement by function.

As of 1 April 2005 the Group decided to cover itself for credit risk by concluding an excess of loss credit insurance. The average credit period on sales of goods is about 48.8 days (last year 51.4 days). Generally no interest is charged on the overdue trade receivables except when legal procedures are started.

Before accepting any new customer, the Group uses an internal credit scoring system, based on internal and external information, to assess the potential customer's credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed continuously. There are no customers who represent more than 10.0% of the total balance of trade receivables.

Trade receivables disclosed above include amounts that are past due at the end of the reporting period but against which the Group has not recognized an allowance for doubtful receivables because there has not been a significant change in credit quality and the amounts are still considered recoverable.

Gross trade receivables
Subtotal trade receivables
Impairment trade receivables doubtful
Total financial instrument 'trade receivables'
2019
Customer 1	4 062	5.8%
Customer 2	1 280	1.8%
Customer 3	1 246	1.8%
Customer 4	1 228	1.8%
Customer 5	1 158	1.7%
Other	60 828	87.1%
Total	69 802	100.0%
Overdue	61-90 days

1-15 days

2019
69 802
69 802
-2 630
67 172	1.1
Outstanding	Sales
11 486	2.3%
10 901	2.1%
4 422	0.9%
5 025	1.0%
14 893	2.9%
462 893	90.8%
509 620	100.0%

Note

16-30 days

31-60 days

>90 days

Subtotal gross trade receivables

6 342

1 846

1 609

628

1 170

Impairment trade receivables doubtful
-3 642	-219	101	1 278	-21	-127	-2 630

Openingbalance

Increase(1)

Decrease(1)

Reversaldueto permanentloss (1)

Eﬀectofforeign currencyex-changediﬀer-ences

Acquiredthrough businesscombi-nations

Closingbalance

2.5.9.

Other current assets in thousands of euros

Other receivables	2020	2019	Note
Financial assets
Insurance receivable	12	11	2.5.15
Non-financial assets
Advances	232	129
VAT receivable	3 427	5 788
Tax prepayment	2 420	2 810
Capital grants receivable	19	3
Other	661	1 281
Total other receivables	6 772	10 021	1.1

Other receivables consist primarily of VAT to be reclaimed amounting to EUR 3.4 million, prepaid taxes amounting to EUR 2.4 million and EUR 0.7 million 'other', explained by payroll related receivables (in 2019 also property taxes to recuperate) and other various receivables.

Cash and cash equivalents	2020	2019	Note
Cash at bank	51 055	18 141
At hand	55	57
Total cash and cash equivalents	51 109	18 198	1.1
All cash at bank is held at reputable banks.
Deferred charges and accrued income	2020	2019	Note
Deferred charges	1 014	803
Accrued income	345	492
Other	-3	2
Total deferred charges and accrued income	1 357	1 296	1.1

Deferred charges amounting to EUR 1.0 million consist primarily of pre-paid rent, insurance policies and IT maintenance contracts. Accrued income amounting to EUR 0.3 million consists mainly of an energy receivable.

2.5.10.

Borrowings

In thousands of euros

2020	Note
Bank loans	94 407
Total borrowings long term	94 407	1.1
Current portion of amounts payable aﬅer one year	16 245
Credit institutions short term	14 717
Bank loans	30 962
Other loans
Total borrowings short term	30 962	1.1
Loan payments due	Capital	Interests
Within one year	30 962	736
In two years	15 181	585
In three years	15 184	532
In four years	7 236	487
In and aﬅer five years	56 807	693
Total	125 369	3 034
2019	Note
Bank loans	102 772
Total borrowings long term	102 772	1.1
Current portion of amounts payable aﬅer one year	15 240
Credit institutions short term	26 074
Bank loans	41 313
Other loans	9
Total borrowings short term	41 322	1.1
Loan payments due	Capital	Interests
Within one year	41 322	712
In two years	15 180	616
In three years	15 182	563
In four years	12 535	510
In and aﬅer five years	59 875	1 167
Total	144 094	3 567

Long-term	Short-term
As per 31 December 2020 total long term loans amounted	As per 31 December 2020, short-term loans amounted to
to EUR 94.4 million.	EUR 31.0 million:

The long-term financing position of the Sioen Industries Group currently consists out of:

• A EUR 53.0 million installment loan, which has to be repaid via twenty quarterly installments (loan obtained on 30 September 2018 with last installment on 29 March 2024) with a EURIBOR based variable interest rate (with a floor of 0%). Two quarterly installments in 2020 have been postponed. The non-current part of this loan at 31 December 2020 is EUR 23.9 million.
• A EUR 50.0 million bullet loan which is due on 20 April 2026 with a fixed interest rate of 0.882%.
• A EUR 20.0 million installment loan, which has to be repaid via twenty-seven quarterly installments (loan obtained on 1 October 2018 with last installment on
1 April 2026) with a EURIBOR based variable interest rate (with a floor of 0%). Two quarterly installments in 2020 have been postponed. The non-current part of this loan at 31 December 2020 is EUR 12.9 million.
• A EUR 15.5 million installment loan, which has to be repaid via twenty bi-annual installments (10 year loan obtained on 29 March 2016 with last installment on 29 March 2026) with a EURIBOR based variable interest rate (with a floor of 0%). The non-current part of this loan at 31 December 2020 is EUR 7.0 million.
• A long term loan originating from the Manifattura Fontana acquisition in 2016 with an interest rate of 1.43% and end date in 2026. The non-current part of this loan is EUR 0.7 million. The Group intends to phase out local loans.

As per 31 December 2019 total long term loans amounted to EUR 102.8 million.

The Group is subject to financial covenants: the total net leverage may not exceed 3.50. It is calculated as total borrow- ings (non-current + current) - cash and cash equivalents, devided by EBITDA. As per 31 December 2020, there is no covenant breach: EUR 74 260 /EUR 67 473 = 1.10. In case there would be a breach of the financial covenants, a twelve month remediation period is applicable. Apart from these financial covenants, no other material covenants apply, except for general terms and conditions applicable to general finance agreements in Belgium.

• Straight loan in USD and EUR amounted to EUR 14.7 million with an interest rate of 0.62%
• The current part of the new EUR 53.0 million installment loan: EUR 10.6 million

• The current part of the new EUR 20.0 million installment loan: EUR 2.9 million
• The current part of the EUR 15.5 million installment loan: EUR 1.6 million
• The current part of the long term loan originating from the Manifattura Fontana acquisition: EUR 0.2 million
• Borrowings related to the Payroll Protection Program in USA: EUR 1.1 million

As per 31 December 2019, short term loans amounted to EUR 41.3 million.

2.5.11.

Leases

In thousands of euros

This note provides information for leases where the Sioen Group is a lessee.

The following amounts are shown in the statement of financial position related to leases:

2020

2019

Note

Land and buildings Vehicles

9 538

10 812

2 966

3 414

Other

880

885

The additions to right-of-use assets during 2020 amounted to EUR 3.0 million (EUR 3.8 million in 2019). The following amounts are shown in the income statement related to leases:

2020

2019

Land and buildings Vehicles

2 216

2 222

1 731

1 457

Other

350

307

Total depreciation charge of right-of-use assets

4 297

3 986

Interest expense(1)

Expense related to short-term leases(2)

Expense related to leases of low-value assets that are not shown above as short-term leases (2)

333 769 196

420 857 245

For what the total cash outflow for leases is concerned, we refer to note 1.3. Consolidated statement of cash flows for the year ended 31 december 2020.

(1) Included under 'Financial charges'.
(2) Included under 'Services and other goods' in the income statement by nature and allocated by function in the income statement by function.

2.5.12.

Provisions

In thousands of euros

2020

Openingbalance

Additionalprovi-sionrecognized

Reductions arisingfrompay-mentsReversalExchangerate diﬀerences

Acquiredviabusi-nesscombinationTransfersClosingbalanceNote

Provisions for environmental issues

269

568

-31

-10

795

Provisions for other liabilities and charges

1 929

1 786

-554

-1 181

-1

1 979

2019

Provisions for environmental issues

Provisions for other liabilities and charges

1.1
More than one year	Within one year
156	113
260	1 670
416	1 782	1.1

Openingbalance

Additionalprovi-sionrecognized

Reductions arisingfrompay-mentsReversalExchangerate diﬀerences

Acquiredviabusi-nesscombinationTransfersClosingbalanceNote

179

103

-24

269

818

1 124

-5

-174

175

-10

1 929

The provisions for environmental issues in 2020 consist mainly of new provisions for sanitation of land in the chemicals division, a new provision for environmental issues in the coating division and a provision relating to the ongoing sanitation of land in the coating division.

The provisions for other liabitlities and charges in 2020 mainly relate to new provisions for severance payments, a provision for a pending customs dispute, set up in 2020, and new provisions for claims. The reversal on provisions for other liabilities and charges relates to a reclass of a provision for import duties, set up in 2018 and 2019, to trade and other payables.

2.5.13.

Retirement benefit plans

In thousands of euros

In accordance with law and practice in each country, diﬀerent retirement benefit systems are provided for the employees of the Group. Pension obligations in the Group relate to both, defined benefit and defined contribution plans.

Most defined benefit plans are unfunded (38% of net liability in France, 20% in Germany, 19% in Indonesia and 15% in Italy).

The Group has group insurance plans based on defined contributions in Belgium (7% of net liability). For these plans, the insur- ance company guarantees an interest until retirement (type 'branche 21/tak 21'). The contributions vary between 1% and 12% of the salary, paid by the employer. By law, the employer has to guarantee a minimum rate of return on the contributions under those plans, therefore, they qualify as defined benefit plans. These, and one plan in France, are the only funded defined benefit plans within the Group, plan assets consist of insurance contracts.

2020

2019

Note

Post-employment benefits (defined benefit plans)

Other long term benefits (termination benefits)

5 600 8

5 192 21

Total

Long term Short term

5 608 5 418 190

5 212 5 147 66

1.1 1.1

The movement of the net liability is as follows:

Present value of defined benefit obligationFair value of plan assets

Net liability

At 1 January 2020

12 033

-6 841

Current service cost Past service cost

1 114

-212

Net interest expense (income)

161

-59

Total defined benefit cost charged to profit and loss

1 064

-59

5 192 1 114 -212 102 1 005

Remeasurements:

Return on plan assets

-448

(excluding amount included in net interest expense (income))

Actuarial (gain) loss from experience adjustment

Actuarial (gain) loss from change in financial assumptions Actuarial (gain) loss from change in demographic assumptions

49 687 -3

Total defined benefit cost (income) charged to other comprehensive income

733

-448

285

Benefits paid

-244

Contribution - employer

247 -767

3 -767

Acquired through business combinations Currency

-117

At 31 December 2020

13 469

-7 869

-117 5 600

Present value of defined benefit obligation

At 1 January 2019

Current service cost Past service cost

Net interest expense (income)

Total defined benefit cost charged to profit and loss

Remeasurements:

Return on plan assets

(excluding amount included in net interest expense (income))

Actuarial (gain) loss from experience adjustment

Actuarial (gain) loss from change in financial assumptions

Total defined benefit cost (income) charged to other comprehensive income

Benefits paid

Contribution - employer

Acquired through business combinations Currency

At 31 December 2019

The significant actuarial assumptions were as follows:

9 886 767 -197 238

Fair value of plan assets

-5 588

-95

808

-95

-668

183 946

1 129

-220

-668

220 -710

363 68

12 033

-6 841

Net liability

4 297 767 -197 143 714

-668 183 946

460

-710 363 68 5 192

2020

2019

Discount rate

Rate of compensation increase

Eurozone 0.33-0.56% 1.50%

Indonesia 6.75% 8.00%

Eurozone 0.40-0.80% 1.50%

Indonesia 7.75% 8.00%

For the Eurozone, a range is used, because diﬀerent discount rates are used in diﬀerent countries within the Eurozone.

The sensitivity of the defined benefit obligation to changes in the principal assumptions is:

Discount rate	+0.5pp.	-0.5pp.
Eurozone	-7%	+7%
Indonesia	-5%	+5%
2019
Discount rate	+0.5pp.	-0.5pp.
Eurozone	-7%	+7%
Indonesia	-5%	+5%
The weighted average durations are:	2020	2019

Eurozone	13 years	13 years
Indonesia	10 years	10 years

Expected contributions for the year ending 31 December 2021 are EUR 678 thousand.

Defined benefit plans

Regarding the defined benefit pension plans, the Group is mainly exposed to a discount rate risk (i.e. a decrease of the discount rates will increase the benefit obligations) and an inflation risk (i.e. the benefits are calculated based on final salaries).

Current and past service costs are recognized under 'Remuneration, social security and pensions' in the income statement by nature and are allocated by function (cost of sales, sales and marketing expenses, R&D expenses and administrative expenses) in the income statement by function. The interest component is recognized in the financial result.

Defined contribution plans

The company contributed to its defined contribution plans for a total amount of EUR 1 214 thousand (EUR 1 275 thousand in 2019). These contributions are recognized under 'Remuneration, social security and pensions' in the income statement by nature and are allocated by function (cost of sales, sales and marketing expenses, R&D expenses and administrative expenses) in the income statement by function.

Termination benefits

Early retirement plans are recognized as liability and expense when the company is committed to terminate the employment of the employees aﬀected before the normal retirement date.

2.5.14.

Trade and other payables in thousands of euros

2020	2019	Note
Trade payables	46 085	44 793
Credit notes to receive	-651	-1 185
Advances	71	2 614
Total trade and other payables	45 505	46 222	1.1

Trade and other payables include outstanding amounts for trade purchases and current charges. The trade payables are payable within a range of 30 to 60 days. The Group has no major overdue positions. Foreign currencies in trade payables relate mainly to USD and GBP and represent approx. 10% of the total trade payables.

2.5.15.

Financial instruments in thousands of euros

This table provides an overview of the measurement per category of financial instruments:

Assets Non-current assets Other long term assets

Other shares Guarantees and deposits Other amounts receivable LT

Current assets

Trade receivables Insurance receivable Cash and cash equivalents Derivatives

Liabilities Non-current liabilities

Borrowings

Lease liabilities

Other amounts payable

Current liabilities

Trade and other payables Borrowings

Classification IFRS 9

FVTPL Amortized cost Amortized costAmortized cost Amortized cost Amortized costAmortized cost Amortized cost Amortized cost

Other short term payables Lease liabilities Derivatives

Amortized cost Amortized cost Amortized cost Amortized cost

The financial instruments measured at fair value relate to:

2020

Carrying amount /

Fair value

801

517 279 5

66 877

51 109

FVTPL

2019

Carrying amount /

Fair value

815

517 292 7

67 172

18 198

3 014

94 407

6 745

45 505

30 962

1 789

3 350

2 240

102 772

8 097

1 332

46 222

41 322

328

3 405

Note

1.1

1.1 1.1

1.1 1.1 1.1

1.1 1.1

FVTPL

1 698

1 331

1.1 1.1

2020

2019

10 075

Other shares FX derivatives (1) Interest rate swap Floor

Interest rate swap Floor

Cap

8 525

50 000

-219

134

10 075

2 849

50 000

-1 479

50 000

(1) FX forward /swap contracts, nominal value equals foreign currency amount multiplied by contract rate

-194

107

2 063

-970

Financial risk management

The Group manages a portfolio of derivatives to hedge against risks relating to exchange rate and interest rate posi- tions arising as a result of operating and financial activities.

It is the Group's policy to avoid engaging in speculative trans- actions or transactions with a leverage eﬀect and not to hold derivatives for trading purposes.

agreed upon borders (upper and lower border / tunnel). The forward starting interest rate collar was settled in cash on 14 March 2016 (EUR 18.1 million, which represents the fair value of the forward starting interest rate collar on that date). The eﬀective part of the loss on the derivative will be amortized to profit or loss over the term of the hedged debt (i.e. over a term of 10 years).

Fair value

Financial instruments are recognized at fair value. The fair value is determined based on one of the following levels of the fair value hierarchy:

• Level 1: measurement is based on quoted market prices in active markets
• Level 2: measurement is based on (externally) observa-ble information, either directly or indirectly
• Level 3: measurement is based either fully or partially on not (externally) observable information

Other shares included in 'Other long term assets'

The management has assessed that cost is an appropriate estimate of fair value for the other shares (which are unquoted equity investments) because insuﬀicient more recent information is available to measure fair value and therefore cost represents the best estimate of fair value.

On the settlement date (14 March 2016) the total eﬀective part of the loss on the derivative (recognized in other comprehensive income) was EUR 11.2 million (net of taxes):

• EUR 17.0 million gross of taxes
• EUR -5.8 million tax eﬀect

The amount gross of taxes has been expensed via finan- cial charges over the term of the hedged debt (i.e. over an intended 10 year period starting from 20 April 2016, the start- ing date of the new EUR 50 million loan). However, in the light of the anticipated refinancing of the Group, the remaining cost of unwinding of the existing interest rate hedge instru- ment has been reflected in this year's financial result. The amount of financial charges which was transferred from other comprehensive income to the income statement during 2020 was EUR 10.3 million (cost). Currently, the Group does not apply hedge accounting.

Non-derivative financial liabilities

The fair value of non-derivative financial liabilities is calcu- lated based on commonly-used valuation techniques (i.e. net present value of future principal amounts and interest charges discounted at market rate). These are based on market inputs from reliable financial information providers.

Fair values determined by reference to prices provided by reliable financial information providers are periodically checked for consistency against other pricing sources.

Interest risk management

On 21 April 2011, the Group entered into a cash flow hedge to hedge, within certain limits, the interest rate risk on highly probable future debt to be issued in March 2016 for a term of 10 years, for a principal amount of EUR 50 million. For this purpose, the Group entered into a forward starting interest rate collar for a nominal amount of EUR 50 million. A collar is a derivative financial instrument by which the buyer of the instrument receives / executes payments at the end of the reference period in which the interest rate evolves out of the

To hedge its interest rate risks and to take advantage of the current market interest rates, the group entered into new interest rate derivatives together with the new loan agreements:

• Interest Rate Swap (IRS) on the new EUR 50 million bullet loan to change the contractual fixed interest rate to a variable interest rate with a floor of 0% and a cap of 2.5%.
• Interest Rate Swap (IRS) on the new EUR 15.5 million installment loan to change the contractual variable interest rate to a fixed interest rate. The nominal amount of the IRS is decreasing in line with the loan agreement.

At 31 December 2020, the fair value of the interest rate swaps and related floors and caps was EUR 1.3 million (fair value through profit & loss). This fair value is determined by Sioen on a quarterly basis, based on market value reports delivered by the issuing financial institute.

Exchange rate risk management

Sioen Industries is a net USD buyer. Sioen Industries some- times opts to perform forward USD purchases to level oﬀ the impact of this exchange rate on the income statement. Per 31 December 2020, there were no outstanding EUR/USD forward contracts.

Sioen Industries is a net CNY buyer. To hedge the impact of changes in the EUR/CNY exchange rate, Sioen Industries performs forward CNY purchases. Per 31 December 2020, there were no outstanding CNY forward contracts.

The fair value of the FX derivatives is determined by Sioen on a quarterly basis, based on market value reports delivered by the issuing financial institute.

Maturity of derivatives

in thousands

< 1 year

> 1 year < 5 years

> 5 years

The contractual undiscounted cashflows are presented. The maturity of the Interest Rate Swaps and the related caps and floors, corresponds with the loans.

2.5.16.

Deferred taxes

In thousands of euros

Deferred tax assetDeferred tax liability

2020

2019

2020

2019(1)Note

Intangible assets

1 438

1 565

Property, plant and equipment Right-of-use assets and lease liabilities Inventories

822

912

8 132 13 545

8 892 13 955

667

718

Trade receivables

231 1

Retirement benefit obligations Provisions

956

917

Other amounts payable Exchange diﬀerence

17 105 891

14 96 959

Tax losses carried forward

6 033

5 839

Total

Non recognition of deferred tax receivable Netting

10 043 -5 430 -2 790

10 083 -5 255 -3 074

22 691

24 148

-2 790

-3 074

Total

1 823

1 754

19 900

21 075

1.1

The total value of carried forward tax losses arranged by expiry date

One year
Two years
516
Three years
137
Four years
199
Five years and later

1 353

No expiry date

22 941

510 137 909 19 339

Total of which:

25 146

20 895

Unrecognized carried forward tax losses

19 409

15 770

Reconciliation of movement of deferred tax

Net tax liability at the beginning of the period Net tax liability at the end of the period Diﬀerence

19 321

17 848

18 077

19 321

1 244

-1 473

Deferred tax as shown in the income statement Deferred tax through acquisitions

3 515

2 199

2.4.2

-3 157

Tax eﬀect reclassification cash flow hedge to income statement(2) Deferred tax currency translation eﬀect

-2 578 306

-424 -92

(1) The 2019 figures are restated for the fair value assessment and resulting badwill on a business combination, we refer to note 2.5.18. Business combinations and disposal of subsidiaries.
(2) We refer to note 2.5.15. Financial instruments.

Deferred tax assets which do not appear to be collectable in the near future are not recognized. In this assessment, management takes account of budgets and multi-year planning. Major unrecognized deferred tax assets on carried forward tax losses are related to Pennel, Manifattura Fontana, Dimension-Polyant Sailcloth PTY Ltd. and the Roland Group as there is no taxable result over the foreseeable future (5 years).

The decrease in deferred tax liabilities compared to 2019 relates to the amortizations and depreciations of the intangible assets and property, plant and equipment related to the acquisitions of the past years (2017-2016).

2.5.17.

Related party transactions

(1) Transactions with shareholders

A complete overview of the shareholder structure can be found in section 5.3. Share information.

The family Sioen holds 12 907 047 shares or 65.25% of the total number of shares of Sioen Industries NV via Sihold NV. Sihold NV is controlled by Sicorp NV. Sicorp NV is controlled jointly by JCA2M BV, ALCAMI BV and MIDIPA BV. JCA2M BV is controlled by Mrs. Michèle Sioen. ALCAMI BV is controlled by Mrs. Daniëlle Sioen. MIDIPA BV is controlled by Mrs. Pascale Sioen.

Other companies that are also controlled by Sihold NV, Sicorp NV, JCA2M BV, ALCAMI BV and MIDIPA BV are consid-ered as related parties of Sioen Industries NV.

Loans

There are no loans between Sioen Industries NV and its shareholders.

Commercial transactions 3 types of commercial transactions can be distinguished:

• Sales of goods to Inch SA: the Sioen Industries Group delivered EUR 170 thousand of goods to Inch SA in 2020. In 2019 this was EUR 192 thousand . At year-end 2020, the Sioen Industries Group had EUR 42 thousand outstanding trade receivables. The commercial trans-actions with Inch SA are done at an arm's length basis (sales prices comparable with other customers).
• Delivery of services: Sioen Industries NV has a shared service center where a.o. the IT infrastructure and services are centralized for eﬀiciency reasons. Sioen Industries NV charged in 2020 EUR 22 thousand of IT material and services to companies also controlled by Sihold NV, Sicorp NV or the family Sioen. In 2019 this was EUR 19 thousand. At year-end 2020, the Sioen Industries Group had EUR 6 thousand outstanding trade receiva-bles. These transactions are at an arm's length basis.
• Purchase of wine from Chateau La Marzelle: the family Sioen holds a winery in the Bordeaux Region in France. The Sioen Industries Group purchased EUR 35 thou-sand of wine from La Marzelle (for events and publicity purposes). In 2019 this was EUR 66 thousand. At year-end 2020, the Sioen Industries Group had EUR 13 thousand outstanding trade and other payables The commercial transactions with La Marzelle are done at an arm's length basis (sales prices comparable with other customers).

(2) Transactions with subsidiaries, joint ventures and associated companies

Transactions and outstanding balances between Sioen Industries and the diﬀerent subsidiaries are eliminated in full in the consolidation of the Sioen Industries Group and are not further explained.

Sioen Industries has no joint ventures nor associates.

(3) Transactions with executive management Executive management consists out of the Board of Directors and the Management Committee. We also refer to 5. Corporate governance statement for more information.

Remuneration

Name	Represented by	Board of Directors	Audit Committee	Remuneration and Nomination Committee	Total
Fixed remuneration	Pro rata	Fixed remuneration	Pro rata	Fixed remuneration	Pro rata
Mr. M. Delbaere President of the Board	25 000	50 000	1 500	1 500	78 000
M.J.S. Consulting BV	Mrs. M. Sioen Managing Director	12 500	25 000	37 500
D-Lance BV	Mrs. D. Sioen Member	12 500	25 000	37 500
P. Company BV	Mrs. P. Sioen Member	12 500	25 000	37 500
Dirk Meeus BV	Mr. D. Meeus Member	12 500	25 000	5 000	5 000	1 000	1 000	49 500
Lemon Comm. V	Mr. J. Noten Member and President of the Audit Committee	12 500	25 000	6 000	6 000	1 000	1 000	51 500
Mr. P. Macharis Member	12 500	25 000	37 500
Total	100 000	200 000	11 000	11 000	3 500	3 500	329 000

M.J.S. Consulting, represented by Mrs. Michèle Sioen, received in 2020, in her capacity of CEO and next to her remuneration as a member of the Board of Directors, a fixed remuneration of EUR 585 112, a variable remuneration of 78 990 EUR and a compen-sation for other expenses (mainly car expenses) amounting to EUR 49 161. 10 000 options were granted to M.J.S. Consulting in 2019 (none in 2020).

The other members of the executive management(1), including Directors in their capacity as member of executive manage- ment, received in 2020 a fixed remuneration of EUR 3 506 449 (excluding CEO), a variable remuneration of EUR 315 368 and a compensation for other expenses (mainly car expenses) amounting to EUR 235 013.

The ratio between (i) the remuneration of the member of the executive management earning the most and (ii) the remuneration of the employee with the lowest income is factor 19.

(1) The executive management consists of executive Directors and members of the Management Committee

In 2019 following remunerations were paid:

Name	Represented by	Board of Directors	Audit Committee	Remuneration and Nomination Committee	Total
Fixed remuneration	Pro rata	Fixed remuneration	Pro rata	Fixed remuneration	Pro rata
Mr. M. Delbaere President of the Board	25 000	25 000	1 500	1 500	53 000
Mrs. J. Sioen-Zoete Member
M.J.S. Consulting BVBA	Mrs. M. Sioen Managing Director	12 500	12 500	25 000
D-Lance BVBA	Mrs. D. Sioen Member	12 500	10 000	22 500
P. Company BVBA	Mrs. P. Sioen Member	12 500	12 500	25 000
Dirk Meeus BVBA	Mr. D. Meeus Member	12 500	10 000	5 000	5 000	1 000	500	34 000
Lemon Comm. V	Mr. J. Noten Member	12 500	12 500	5 000	3 750	1 000	1 000	35 750
Mr. P. Macharis Member	12 500	12 500	25 000
Mr. L. Vandewalle Member and President of the Audit Committee	12 500	10 000	6 000	4 500	33 000
Total	112 500	105 000	16 000	13 250	3 500	3 000	253 250

M.J.S. Consulting, represented by Mrs. Michèle Sioen, received in 2019, in her capacity of CEO and next to her remuneration as a member of the Board of Directors, a fixed remuneration of EUR 585 000, a variable remuneration of EUR 88 364 and a compen- sation for other expenses (mainly car expenses) amounting to EUR 36 602. 10 000 options were granted to M.J.S. Consulting.

The other members of the executive management(1), including Directors in their capacity as member of executive management, received in 2019 a fixed remuneration of EUR 3 417 702 (excluding CEO), a variable remuneration of EUR 381 270 and a compen-sation for other expenses (mainly car expenses) amounting to EUR 234 035.

(1) The executive management consists of executive Directors and members of the Management Committee

Other

In 2020, a total of 5 000 share options to acquire shares of Sioen Industries have been granted to the CEO and the other members of the executive management. We refer to section 5.1.5. Remuneration report for further disclosures on this topic.

In 2019, a total of 33 500 share options to acquire shares of Sioen Industries have been granted to the CEO and the other members of the executive management.

No other shares or other rights have been granted in 2020 and 2019.

There are no retirement benefit plans.

Other transactions

Jack Projects, represented by Mrs. Jacqueline Sioen, received in 2019, in the context of a service agreement, a remuneration of EUR 47 500 and a compensation for other expenses (mainly car expenses) amounting to EUR 13 878. Article 7:96 of the Code of Companies and Associations was applied (we also refer to the corporate governance section for more information).

2.5.18.

Business combinations and disposal of subsidiaries

In thousands of euros

Business combinations

Dickson Saint Clair(1)

In view of the short time period between the acquisition and the publication of the 2019 annual results, the fair value assessment was still in process at the end of 2019 and a provisional opening balance sheet was accounted for. The restatement of the 2019 figures is related to this fair value assessment. In February 2020, 100% of the shares of Dickson Constant Inc.(1) were paid upon US completion of the figures. The adjustments in 2020 relate to the inclusion of the US figures.

Accounting for the acquisition is complete.

The following table summarizes the consideration paid and the amounts of assets and liabitilies recognized at the acquisition date:

as disclosed per	Restatements 2019	Adjustments 2020	Total
31 December 2019
Intangible assets	31	31
Property, plant and equipment	10 574	3 108	13 682
Other long term assets	34	34
Deferred tax assets	18	18
Inventories	7 485	825	277	8 587
Trade receivables	6 727	112	6 839
Other receivables	492	492
Cash and cash equivalents	1 664	45	1 709
Deferred charges and accrued income	89	89
Total assets	27 096	3 934	452	31 482
Provisions	175	175
Retirement benefit obligations	363	363
Deferred tax liabilities	1 695	1 009	2 704
Lease liabilities	57	57
Trade and other payables	2 225	428	2 653
Borrowings	9	9
Social debts	1 298	1 298
Other amounts payable	274	63	337
Accrued charges and deferred income	26	26
Total liabilities	6 121	1 009	491	7 622
Total net assets acquired	20 975	2 924	-39	23 860
Upfront consideration (paid in cash)	21 238	20	21 258
Total acquisition cost	21 238	20	21 258
Badwill	263	-2 924	59	-2 602

Provisional amounts

A renewed focus on the core activities creates added value for both, Sioen Industries and Glen Raven Group. The resulting badwill has been included under the section 'Other operating income' in the income statement by nature and under 'Other income' in the income statement by function.

(1) Dickson Saint Clair SAS was renamed Saint Clair Textiles SAS and Dickson Constant Inc. was renamed Saint Clair Textiles Inc.

Disposals

Roland Ukraine Llc., a dormant company in division 'Other', has been sold in 2020. This sale did not have any material impact on the income statement or cash flow.

2.5.19. Contingent assets and liabilities

There were no contingent assets or liabilities at the end of 2020 and 2019.

2.5.20.

Events aﬅer reporting period

• On 29 October 2020, Sioen Industries NV and Sihold NV announced that a committee of independent Directors of Sioen Industries were having preliminary discussions with Sihold NV about a possible strategic transaction with regard to a voluntary takeover bid by Sihold NV for the shares of Sioen Industries NV, with a view to a delisting.
On 28 January 2021, Sihold launched a voluntary and conditional public takeover bid on Sioen Industries shares against EUR 23.0 per share. Following its interactions with the shareholders of Sioen Industries NV, Sihold NV later increased the bid price to EUR 27.0 per share.
During the initial acceptance period, 5 403 703 shares of Sioen Industries NV were tendered to the oﬀer. This number represents 80.82% of the total number of shares to which the oﬀer related. As a result, Sihold NV now owns 93.52% of the shares of Sioen.
Since Sihold NV, together with the persons aﬀiliated with Sihold NV, owns more than 90% of all Sioen shares aﬅer the close of the initial acceptance period, the oﬀer was reopened from 10 March 2021 to 24 March 2021. The results of the reopened oﬀer will be announced no later than 31 March 2021.
• On 1 February 2021, Myanmar's Military deposed the democratically elected members of Myanmar's ruling party, NLD, and declared a year-long state of emergency. Subsequently, civil resistance eﬀorts have emerged within the country, in opposi-tion to the coup, in numerous forms, including acts of civil disobedience, labor strikes, public protests, …
Currently, we face several issues in our Yangon-based plant, such as security issues in the township, limiting access to the plant, diﬀiculties on importing and exporting goods due to customs strike, telecommunication cuts, …, resulting in decreased production eﬀiciency and lower output.
At this point in time it is uncertain what the long term impact on factory's operations and profitability will be.

2.5.21.

Staﬀ/Average FTE's

2020

2019

Indonesia Myanmar Belgium Tunisia Romania France UK US Finland Germany Estonia Italy China Ireland Portugal UAE Australia Austria

1 175

944

763

351

335

274

178

114

103

The Netherlands Sweden

Spain

Total

Blue collar White collar

4 541 3 620 921

1 460

890

803

429

339

167

195

123

109

4 834 3 886 948

Total

4 541

4 834

2.5.22.

Audit and non-audit services

Deloitte

2020

27 748

Tax advice

2.5.23.

Financial risk management

The Group is exposed to risks related to interest rate, exchange rate and market price fluctuations, having an impact on the Group's assets and liabilities. The goal of the Group's financial risk management is to limit the impact of these risks related to its operational and financial activities.

Interest rate risk

The Group's interest risk is relatively limited, in view of the loan agreements and related interest rate swaps. To hedge its interest rate risks and to take advantage of the current market interest rates, the Group entered into interest rate derivatives. See also paragraph 2.5.15. Financial instruments for more information.

Sensitivity analysis of the fluctuation of the interest rate by 5%:

• Related to the two long term loans of 2018, the outstanding debt per 31 December 2020 was EUR 50.2 million. The average variable interest rate is 0.35%. A 5% increase in interest rates, to an average of 0.37% would impact the financial result with EUR 9 thousand more interest costs on an annual basis.
• The fixed interest rate of the EUR 50 million bullet loan was swapped to a variable interest rate to take advan-tage of the market conditions. As the interest rate swaps foresees in a floor of 0%, a 5% interest rate increase (applied on a negative EURIBOR rate) would not result in an increased interest cost.

Exchange rate risk

It is the Group's policy to hedge against exchange risks arising from financial and operating activities centrally. The risks are limited by compensating for transactions in the same currency ('natural hedging'), or by fixing exchange rates via forward contracts, options or spot transactions.

of the available credit lines were used for loans and bank guarantees. For the maturity analysis in view of liquidity risk we refer to note 2.5.10. Borrowings.

Financial risk

The management determines its assessment on the basis of diﬀerent realistically assessed parameters, such as future market expectations, sector growth rates, industry studies, economic realities, budgets and multi-year plans, expected profitability studies, etc. The most important elements within the Group that are subject to this are: impairments, provisions, deferred tax items and assumptions related to IFRS 16 Leases.

Credit risk

In view of the relative concentration of credit risk (see note 2.5.8. Trade receivables), the company covers credit risk on trade receivables via an excess of loss credit insurance with an own risk exposure of EUR 400 thousand. In addition, credit control strategies and procedures have been elaborated in order to monitor individual customers' credit risk.

The main currencies for the Sioen Group are USD, CNY and GBP.

• USD: the Group has a net USD outflow of EUR 23.8 million (USD 27.3 million) in 2020. In 2019 this was a USD net outflow of EUR 28.8 million (USD 32.2 million).
• CNY: The Group has a net CNY outflow of EUR 0.3 million (CNY 2.2 million) in 2020. In 2019 the CNY outflow was EUR 2.7 million (CNY 21.1 million).

• GBP: Since the 2017 James Dewhurst acquisition, the Group has a natural GBP hedge, as James Dewhurst is short in GBP (costs in GBP, sales mainly in EUR).

Sensitivity analysis of the fluctuation of the exchange rate by 1%:

Based on the Group's sensitivity analysis, an adverse change in the USD/EUR, CNY/EUR and GBP/EUR exchange rate by 1% would decrease the Group's result by EUR 273 thousand (based on the unhedged net flows of 2020 mentioned above).

Raw materials

The Group is dependent upon volatility of raw material prices: see chapter corporate governance for more information.

2.5.24.

Capital structure management

The equity structure of the Sioen Group is managed with the main objectives of:

• protecting the equity structure so as to ensure contin-uous business operations, resulting in the creation of shareholder value and benefits for other stakeholders,
• the payment of an appropriate dividend to shareholders.

The Group's capital is formed in accordance with the risk, which changes with economic developments and the risk profile of the underlying assets. The Sioen Group can change the dividend to shareholders, issue new shares or sell assets in order to maintain or change the capital structure.

Liquidity risk

In order to guarantee liquidity and financial flexibility, the Sioen Group has credit lines available to meet current and future financial needs. At the end of 2020, the Sioen Group has total credit lines available of EUR 142.6 million (EUR 186.4 million for 2019). On 31 December 2020, EUR 67.8 million

2.5.25.

Approval of financial statements

The consolidated financial statements for 2020 were approved by the Board of Directors for publication on 26 March 2021.

Auditor's report

Statutory auditor's report to the Shareholders' Meeting of Sioen Industries NV for the year ended 31 December 2020 - Consolidated financial statements

In the context of the statutory audit of the consolidated finan- cial statements of Sioen Industries NV ("the company") and its subsidiaries (jointly "the Group"), we hereby submit our statutory audit report. This report includes our report on the consolidated financial statements and the other legal and regulatory require- ments. These parts should be considered as integral to the report.

We were appointed in our capacity as statutory auditor by the Shareholders' Meeting of 24 April 2020, in accordance with the proposal of the Board of Directors ("bestuursorgaan" / "organe d'administration") issued upon recommendation of the Audit Committee and presentation of the works council. Our mandate will expire on the date of the Shareholders' Meeting deliberating on the financial statements for the year ending 31 December 2022.

Due to a lack of online archives dating back prior to 1997, we have not been able to determine exactly the first year of our appoint- ment. We have performed the statutory audit of the consolidated financial statements of Sioen Industries NV for at least 24 consec- utive periods.

Report on the consolidated financial statements

Unqualified opinion

We have audited the consolidated financial statements of the group, which comprise the consolidated statement of financial position as at 31 December 2020, the consolidated income statement, the consolidated statement of total comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, as well as the summary of significant accounting poli-cies and other explanatory notes. The consolidated statement of financial position shows total assets of 504 552 (000) EUR and the consolidated income statement shows a profit for the year then ended of 19 286 (000) EUR.

In our opinion, the consolidated financial statements give a true and fair view of the group's net equity and financial position as of 31 December 2020 and of its consolidated results and its consolidated cash flow for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regula-tory requirements applicable in Belgium.

Basis for the unqualified opinion

We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In addition, we have applied the International Standards on Auditing approved by the IAASB applicable to the current financial year, but not yet approved at national level. Our responsibilities under those standards are further described in the "Responsibilities of the statutory auditor for the audit of the consolidated financial statements" section of our report. We have complied with all ethical requirements rele-vant to the statutory audit of consolidated financial state-ments in Belgium, including those regarding independence.

We have obtained from the Board of Directors and the company's oﬀicials the explanations and information neces-sary for performing our audit.

We believe that the audit evidence obtained is suﬀicient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consol- idated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters

How our audit addressed the key audit matters

Goodwill Impairment (Dimension-Polyant)

The Group has significant goodwill allocated to diﬀerent Cash Generating Units (CGU's).

At 31 December 2020 goodwill amounts to 40 607 (000) EUR. The Group has four CGU's of which one is Dimension Polyant, acquired in 2016, for which the operations have not yet been integrated within the larger Coatings, Apparel or Chemicals CGU's. Per 31 December 2020 the balance sheet no longer contains goodwill allocated to the Dimension Polyant cash generating unit since the goodwill has been impaired entirely during 2020.

The Group reviews the carrying amounts of non-current assets annually, or more frequently when impairment indicators are present, by comparing them to the recoverable amount. Sioen Industries assesses the recoverable amount by calculating the value in use of the assets per cash generating unit, using a discounted cash flow method ("DCF"). This method is complex and requires significant judgement in making estimates of cash flow projections, growth rates, gross margin and discount rates.

Due to the inherent uncertainty involved in forecasting and discounting cash flows, we consider this assessment as a key audit matter, and this specifically for CGU Dimension Polyant, which showed lower headroom in previous years.

The Group disclosed the nature and the value of the assumptions used in the impairment analysis in note 2.1.7 to the Consolidated Financial Statements.

Inventory Reserves (Work in Progress & Finished Goods)

The total net book value of the inventory as per 31 December 2020 amounts to 129 946 (000) EUR of which 102 647 (000) EUR relates to Work in Progress & Finished Goods. The inventory reserves for these types of inventory amount to 5 556 (000) EUR.

Inventories are valued at lower of cost or realizable value. The cost price, calculated by using the weighted average cost price method, includes all direct and indirect costs incurred to bring manufactured products to the stage of completion. The realizable value is the estimated price minus the estimated finishing cost and costs estimated with marketing, sale and distribution.

Valuation of inventory is considered a key audit matter as inventory represents a significant part of the Group's total assets and significant judgement is applied in determining the appropriate provisions for obsolete inventory.

The Group disclosed inventory in note 2.5.7 to the Consolidated Financial Statements.

We obtained an understanding of the impairment assessment process and evaluated the control procedures in place.

We assessed and challenged management's assumptions, used in the discounted cash flow model setup, to determine the recoverable amount.

We obtained the discounted cash flow models per cash generating unit as prepared by management and we evaluated the reasonableness of estimates and judgements made by management in preparing these. Special focus was given to the key drivers of projected future cash flows, being amongst others, estimated volumes, estimated gross margin and the applied discount rate. We critically assessed the budgets, taking into account the historical accuracy of the budgeting process, and evaluated the applied discount rate with the assistance of our valuation experts.

Moreover, we examined sensitivity analyses performed over changes in discount rates, growth rates and gross margin and assessed the adequacy of the Company's disclosure note to the Consolidated Financial Statements.

In order to assess whether the necessary corrections to realizable value and obsolescence reserves are recorded, we performed tests of detail on actual margins realized per product and valuation of obsolete inventories.

We assessed whether there are inventories not being sold for a certain period in time and/or inventories that are sold with a negative margin by evaluating a sample of recent sales invoices aﬅer year-end to challenge management's assessment and decision whether inventories should or should not be accrued for.

We furthermore attended a selection of inventory counts around year-end at locations with significant inventory values and reviewed procedures to identify obsolete, slow moving or damaged inventory.

Responsibilities of the Board of Directors for the preparation of the consolidated financial statements The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated finan- cial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as appli- cable, matters to be considered for going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no other realistic alternative but to do so.

Responsibilities of the statutory auditor for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor's report that includes our opinion. Reasonable assurance is a high level of assur- ance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstate- ment when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

During the performance of our audit, we comply with the legal, regulatory and normative framework as applicable to the audit of consolidated financial statements in Belgium.

The scope of the audit does not comprise any assurance regarding the future viability of the company nor regarding the eﬀiciency or eﬀectiveness demonstrated by the Board of Directors in the way that the company's business has been conducted or will be conducted.

100

Attachments

Original document
Permalink

Disclaimer

Sioen Industries NV published this content on 30 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 March 2021 09:20:07 UTC.

Sihold NV completed the acquisition of remaining 34.1% stake in Sioen Industries NV.	21-04-26	CI
Sioen Industries Nv Reports Earnings Results for the Full Year Ended December 31, 2020	21-03-04	CI
Sihold NV made an offer to acquire remaining 34.1% stake in Sioen Industries NV for approximately €180 million	21-01-26	CI
Sioen Industries Nv Reports Earnings Results for the Full Year Ended December 31, 2019	20-03-05	CI
Sioen Industries NV completed the acquisition of PVC coating activities of Glen Raven group for €21 million.	19-12-16	CI
Sioen Industries NV agreed to acquire PVC coating activities of Glen Raven group.	19-11-11	CI
Sioen Industries Nv Reports Earnings Results for the Half Year Ended June 30, 2019	19-07-29	CI
Sioen Industries Nv Reports Earnings Results for the Full Year Ended December 31, 2018	19-02-28	CI
Sioen Industries NV(ENXTBR:SIOE) dropped from S&P Global BMI Index	18-09-24	CI
Sioen Industries NV Announces Consolidated Earnings Results for the Six Months Ended June 30, 2018	18-08-29	CI
Sioen Industries NV Reports Consolidated Financial Results for the Year Ended December 31, 2017	18-02-28	CI
Sioen Industries NV Reports Group Sales Results for the Third Quarter and Nine Months of 2017	17-11-14	CI
Sioen Industries NV Announces Earnings Results for the Six Months Ended June 30, 2017	17-08-24	CI
Sioen Industries NV completed the acquisition of James Dewhurst Ltd. from AAC Capital Partners, Brierley family trusts and the management of James Dewhurst LTD.	17-05-30	CI
Sioen Industries NV agreed to acquire James Dewhurst Ltd. from AAC Capital Partners, Brierley family trusts and the management of James Dewhurst LTD. for £44 million.	17-05-22	CI
Sioen Industries NV Announces Consolidated Earnings Results for the Year Ended Dec. 31, 2016	17-02-23	CI
Sioen Industries NV acquired UV Curable Systems BVBA from Kurt Troch for approximately €1 million.	17-01-08	CI
Sioen Industries NV completed the acquisition of Verseidag Ballistic Protection Oy from VERSEIDAG-INDUTEX GmbH.	16-12-31	CI
Sioen Industries NV completed the acquisition of Ursuk Oy from Ville Rantala.	16-12-30	CI
Sioen Industries NV agreed to acquire Verseidag Ballistic Protection Oy from VERSEIDAG-INDUTEX GmbH for €18 million.	16-12-18	CI
Sioen Industries NV agreed to acquire Ursuk Oy from Ville Rantala for €22.4 million.	16-12-06	CI
Sioen Industries Reports Consolidated Sales Results for the Third Quarter and Nine Months Ended September 30, 2016	16-11-09	CI
Sioen Industries Seeks Acquisitions	16-08-26	CI
Sioen Industries NV Announces Consolidated Earnings Results for Six Months Ended June 30, 2016	16-08-25	CI
Sioen Industries NV completed the acquisition of DIMENSION-POLYANT GmbH from Gamma Holding NV.	16-08-02	CI

	1st Jan change	Capi.
SASA POLYESTER SANAYI	+9.77%	6.55B
K.P.R. MILL LIMITED	+4.76%	3.46B
TRIDENT LIMITED	+10.06%	2.34B
SWAN ENERGY LIMITED	+20.86%	2.34B
RUENTEX INDUSTRIES LTD.	-7.00%	1.96B
TEIJIN LIMITED	+11.90%	1.88B
WELSPUN LIVING LIMITED	+10.91%	1.73B
RAYMOND LIMITED	+21.01%	1.64B
ALOK INDUSTRIES LIMITED	+28.34%	1.63B

Sioen Industries NV

Equities

SIOE

BE0003743573

Textiles & Leather Goods

Sioen Industries : Annual report 2020 - financial

Latest news about Sioen Industries NV

Chart Sioen Industries NV

Company Profile

Sector Other Textiles & Leather Goods