Annual report 2022
Table of contents
Value8 N.V.
Peter Paul de Vries
Board of Directors
CEO
since September 2008.
Investor
business economist
Gerben Hettinga
Board of Directors
Member
since September 2008.
Economist
governance expert
Remko Herschel
Investment Director
since December 2016.
Chartered accountant,
financial expert
Robert de Haze Winkelman
Supervisory Board
Chairman
since May 2019.
Investor
former member of
Dutch senate
Jan Peter Kerstens
Supervisory Board
Member
since September 2019.
CFO Downtown Music
Holdings
Value8 N.V.
PO Box 26
1400 AA Bussum
info@value8.com
www.value8.com
Dear shareholder, dear relation,
Value8 focusses on the long term. We don’t get upset by the waves of the market and are
constantly looking for opportunities to strengthen our companies and our portfolio. When the
net asset value grew by over 22 per cent in 2021, we did not become complacent, we did not
uncork champagne and we did not build an imposing new glass office. That is not who we are.
Value creation is not only achieved by getting returns, but also by being cost-conscious. Not
too frugal, but efficient.
The stock market in 2022 was quite different from 2021. Soaring inflation, rising interest rates
and sharp corrections in stock markets. The financial climate was not sunny, but rather rainy and bleak. As our shareholders know, no company is immune to that. Value8 had to take a
small step back in net asset value and in share price. The result for 2021 and 2022 can be sum-
marized as follows: three steps forward, one step back.
Since a large part of Value8’s portfolio is listed, lower stock market prices reduce the value
of our listed stakes and of our net asset value. But daily stock market prices are short term
snapshots and not necessarily a good indication of a company’s value. In 2022, recycling
group Renewi’s and ICT company Ctac’s shares fell substantially, while the companies
performed well. Both managed to boost revenue and underlying profitability. We remain
convinced that in the long term the stock market valuations will follow the fundamental
growth of these companies.
Value8 started in 2008 and has built a track record for more than 14 years since. Net asset
value has grown from 0.41 in 2008 to 9.03 euro. Moreover, a further 2.55 euro in dividends were
distributed. Given the sound portfolio, the quality of our companies and our excellent team,
much more is in store.
Value creation is our primary goal, but we do so – and have done since the start! - with an eye
for people and planet. We do not boast about our ESG policy, but our companies contribute
positively. A good example is Kersten, that provides work for people with special needs and
for differently abled people. Another example is Renewi, that actively contributes to a better
environment. The other companies are also doing their bit. We have also been appointing
women in key positions since Value8 was founded. Simply because we are looking for the best
candidate and because diverse teams often perform better.
Looking back, we are grateful for the good cooperation with the companies we invest in
and the commitment of all people, now over 900, working for companies in which we hold a
majority stake.
I hope you will enjoy reading our annual report and will continue to follow and support us -
preferably as a shareholder.
Sincerely,
Value8 N.V.
1. Value8 invests in growing SMEs
PROFILE & MISSION
Value8 N.V. (hereafter: Value8) is a listed investment
company that invests in small caps and SMEs. Our mission
is to support these companies in achieving their growth
objectives. We provide venture capital to finance that
growth and make listing accessible to these companies.
Through our own listing, we offer retail and institutional
investors the opportunity to make diversified investments
in the small-cap segment.
The combination of investing in unlisted SMEs (10 million
euro-plus segment) and investing in listed small caps
offers diversification and risk reduction, and the flexibility
to switch if one of the two segments has more attractive
prospects or is valued significantly lower.
Partner of enterpreneurs
Growing together
Focus on SME
OBJECTIVES & REALISATION
Value8’s objective is to create value for our shareholders.
Value creation
IPO potential
Successful since 2009
Corporate social responsibility and sustainability play an
important role in our policy and strategy. As a measure of
value creation, we use the development of the net asset
value per share. We assume that, in the long term, this
development will be reflected in the development of the
Value8 share price.
Value8 was launched on 24 September 2008. The net asset
value at that time was 41 eurocents per share. Successful
investments, business expansion and add-on acquisitions
strongly increased net asset value. At the end of 2022, net
asset value was 9.03 euro. In addition, through the years
dividends were paid as shown in the following table.
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
7,5 10 12 14 15
eurocents eurocents eurocents eurocents eurocents
dividend dividend dividend dividend dividend
3%
stock
dividend
15 15 15
eurocents eurocents eurocents
dividend dividend dividend
+ super
dividend:
1,05 euro
16
eurocents
dividend
+ repay-
ment 30
eurocents
17 18
eurocents eurocents
dividend dividend
(dividend
proposal)
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Highlights Value8 2022
Financial:
· Direct income amounted to 4.6 million euro, of which 3.6 million euro was dividend income.
The organisation’s costs were unchanged at 1.9 million euro and interest expenses amounted
to 0.3 million euro.
· Due to the decrease in value of the listed investments, equity decreased slightly from 96.1 to 91.9 million
euro. Value8 thus achieved a significant outperformance compared to the AEX and international stock
market indices.
· Net asset value (equity per share) fell from 9.32 to 9.03 euro. Adjusted for dividends paid (17 eurocents),
net asset value fell from 9.15 to 9.03 euro per share, down 1.3 per cent.
· Solvency improved significantly from 85.2 to 91.5 per cent.
· Proposed dividend: 18 eurocents per share, almost 6 per cent higher than the dividend for calendar
year 2021 (17 eurocents per share).
Corporate:
· Acquisition of 70% stake in ICE Interim
· Skysource stake increased from 46 to 100 per cent
· PIDZ was sold to Almunda Professionals
· Kersten was sold to Morefield Group
· Operational growth of Value8’s companies and associates
· Sharp drop in Ctac’s and Renewi’s share prices
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FINANCIAL REPORT
INTRODUCTION
2 . Economy a nd stock m arket
im pac te d by inf lation
After the economic contraction in 2020 due to the
Corona measures, the international economy showed
a strong recovery growth in 2021 and 2022. So did the
Dutch economy, which grew by 4 per cent in 2022. How-
ever, the limits of growth were visible in early 2022. Staff
shortages, resource scarcity and high utilisation rates
limited the scope for further growth. Sharply higher en-
ergy prices reduced consumer and business spending in
the Netherlands, as well as in our main trading partners,
during 2022.
Above all, 2022 will go down in history as the year of rising
inflation. 2022 saw an inflation rate of 10.0 per cent, the
highest inflation rate since 1975 and miles away from the
ECB inflation target of 2 per cent. Explanations for that
high inflation mainly point to increased energy prices -
partly due to the war in Ukraine. That is only part of the
story, however. Massive government spending during the
Covid period, extremely low interest rates and years of
monetary easing by the ECB have helped boost demand.
In our view, the 2022 inflation will feed through into infla-
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tion trends in the coming years. Producers will try to pass
on higher costs in their prices and workers will demand
compensation - and thus higher wages - which will
further increase the companies’ costs. Inflation rates are
expected to be between 4 and 5 per cent over the next
two years, still well above the 2 per cent target.
index - where banks and energy companies are heavily
represented - managed to limit the damage. The Dow
fell 8.8 per cent from 36,338 to 33,147 points.
In the Netherlands, Shell was the big winner and big tech
stocks ASML and Prosus lost heavily. The AEX fell 13.7 per
cent from 797 to 689 points.
Central banks - with the Fed and the ECB leading the
way - raised their official interest rates sharply in 2022
with the aim of curbing inflation. Higher interest rates
reduce demand and hence the prospects for economic
growth. A significant slowdown in growth is expected for
2023 and 2024, with growth between 0 and 1 per cent in
the Netherlands. The 10-year interest rate in the Neth-
erlands rose from -0.03 per cent at the end of 2021 to
2.74 per cent at the end of 2022. Meanwhile, in the United
States, 10-year interest rates were at 3.84 per cent at the
end of 2022, compared to 1.51 per cent at the end of 2021.
AEX
ASCX
AMX
S&P 500
Dow Jones
Nasdaq
Gold
Silver
10-year interest rate NL
Dec-22
689,01
1189,45
929,66
3839,50
33147,25
10466,48
1824,34
22,41
2,82
Dec-21
797,93
1393,66
1081,17
4766,18
36338,30
15644,97
1817,92
23,08
-0,03
in %
-13,7%
-14,7%
-14,0%
-19,4%
-8,8%
-33,1%
0,4%
-2,9%
The mix of high inflation, rising interest rates and the
prospect of weak economic growth weighed heavily on
share prices and stock market sentiment. Technologi-
cal growth companies in particular underwent a sharp
correction. Shares of Meta Platforms (Facebook ’s parent
company) and Tesla lost 64.3 and 65.0 per cent, respec-
tively. The Nasdaq technology index fell 33.1 per cent
from 15,645 to 10,466. Banks performed better, thanks
to higher interest rates and the positive effect on the
interest margin. Energy companies benefited from the
sharp rise in oil prices. For that reason, the Dow Jones
Precious metals
After the lacklustre 2021, 2022 again was not a good
year for precious metals. Gold ended the year at $1824
(+0.4 per cent) per troy ounce and silver fell 2.9 per cent
to $22.41 per troy ounce. Prices were still lower for much
of the year, but a catch-up in the fourth quarter still
resulted in a near flat performance. Given rising inflation,
increasing demand for precious metals is expected.
3 . D ive rsif ie d por t folio he ld u p
we ll in 2022
Value8 is committed to building our businesses in
constructive cooperation with good managers. In
2022, we did just that. Unlike previous years, we did
not make large portfolio changes and we did not
conduct major transactions. In the past four years,
major transactions were:
· 2018: sale of HeadFirst Source Group
· 2019: sale of Eetgemak
· 2020: purchase of Hulpmiddelencentrum
· 2021: purchase of majority stake in PIDZ
The focus in 2022 was on improvement of the com-
panies we invest in. Strengthening management
teams, making plans for growth and optimising
business processes. A lot of energy was put into those
improvement processes, which strengthened the
foundations of our companies. Where managers
left, we were able to fill those positions with excellent
new managers. The biggest organisational change
took place at Almunda Professionals, where two new
managers were recruited at the two subsidiaries PIDZ
and Novisource. New blood was also brought in at BK,
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AmsterdamGold and Skysource. ICT was strength-
ened with integrated automation at AmsterdamGold
and new websites and apps at IEX Group.
Small portfolio reinforcements
With two smaller transactions - both closed in Sep-
tember - we were able to strengthen our portfolio.
The top four investments did not change in 2022,
although the order was different. The largest equity
stake - measured by value at year-end 2022 - is Ctac,
followed by Renewi, Morefield Group (which now
owns Kersten) and Almunda Professionals. If the loan
granted to Morefield Group (10.1 million) is included,
Morefield Group is by far the largest stake.
The first transaction involved the purchase of a 70
per cent stake in ICE Interim. ICE operates in the field
of secondment of consultants in the utility sector. ICE
achieved revenue of 5.2 million and EBITDA margin
of over 19 per cent in 2021. ICE continued to grow in
· Morefield Group
· Ctac
· Renewi
· Almunda
15.2 million euro
13.4 million euro
12.8 million euro
10.5 million euro
2022. We did not buy ICE Interim as a standalone in-
vestment for Value8, but in anticipation of the sale to
Almunda Professionals. The intention is to close that
sale in the first half of 2023.
The second transaction concerned cloud service
provider Skysource. Value8 increased its stake from
46 to 100 per cent. Skysource provides outsourcing of
complete IT infrastructure and technical application
management in the cloud. The new team has been
tasked with building Skysource from its current base.
Given the quality of Skysource’s services and growth
in the market, there are plenty of opportunities for
this.
We did two portfolio reshuffles. PIDZ was sold to
Almunda Professionals in January 2022 and Morefield
Group acquired the majority stake in Kersten in
November 2022. The listing that Kersten thus ac-
quired provides additional opportunities to grow
faster and (partly) finance any acquisitions with
shares. With this transaction, Euronext Amsterdam
has gained another interesting small-cap company
in a growth sector (healthcare).
In chapter 4 ‘Growth of top four interests not yet
rewarded’, we will elaborate on the course of business
at these companies. The valuation of the interests in
Ctac, Renewi and Almunda takes place at the share
price.
In the sector spread, healthcare (25.5 per cent of the
portfolio) ranks first, followed by technology (19.0 per
cent) and sustainability (14.3 per cent). These sectors
benefit from the megatrends ageing, digitalisation
and sustainability. In places four and five come finan
- cial services (10.2 per cent) and building materials
(8.5 per cent). Other sectors represent 9.8 per cent of
our portfolio. Loans and cash account for another
12.7 per cent. We are satisfied with our portfolio’s
diversification and resilience in an economically
difficult year.
Meanwhile, listed holdings represent at year end
80 per cent of the portfolio. This circumstance faci-
litates the valuation and monitoring of the
portfolio but increases Value8’s dependence on the
stock market climate.
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4. G row t h at top fou r inte res t s n ot
yet rewa rde d
Strong revenue growth at Ctac that focuses
on margin
After Pieter Paul Saasen took office - in November 2021 -
as the new CEO, the objective for 2022 was to accelerate
growth. Turnover rose in 2022 from 106 to 118 million euro.
Turnover growth of 10.6 per cent in 2022 shows that Ctac
is on that growth path. Ctac is facing rising costs due
to, among other things, increased energy prices (data
centre activities), higher costs for software licences and
rising wages. Ctac can compensate by indexing tariffs,
but some pressure on the margins is visible. With a slightly
higher net result of 5.0 million euro, Ctac performed well
in 2022. This result was reached despite one-off costs
related to performance improvement programme Ignite.
This also means that Ctac’s real profit potential will only
become visible in the coming years. Pieter Paul Saasen
resigned on March 27th 2023 due to health reasons. We
were shocked when we were informed that he passed
away on March 31st. We are grateful for everything
Pieter Paul has done for Ctac. For the turnaround that
he achieved, the change in culture, the improvement in
results and the new more entrepreneurial vibe at Ctac.
Above all we liked working with Pieter Paul and we will
miss him as loyal partner and personal friend.
Pieter Paul Saasen
Renewi far outperformed consensus
Recycling group Renewi has achieved an impressive
turn-around in the past two years. Two years ago, the
company was still seen as a weak market player with
far too much debt. Since then, Renewi’s image has been
completely adjusted. It is now considered to be a sound
and growing company that actively and substantially
contributes to sustainability. Renewi achieved excellent
results for the broken financial year (ending 31 March). As
this was helped by high recycling prices, the question was
whether Renewi would be able to continue this growth.
The excellent 2022/2023 half-year results provide the af-
firmative answer to that question. Operating profit (EBIT)
rose 16 per cent to 75 million euro on 4 per cent higher
sales. Net debt rose slightly to 388 million euro, still a very
moderate 1.7 times EBITDA. Renewi is in growth mode and
its acquisition of Paro (for 66 million euro) is testament
to that. Renewi shares felt the stock market malaise in
2022, falling 11.4 per cent. Recently Renewi confirmed the
estimation for 2022/2023 with a revenue of 1.9bn and
an EBITDA of 254m. Higher profits, better prospects and
a lower share price strengthen the investment case for
Renewi.Value8 is holding on to these shares
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Almunda grew thanks to healthcare
platform PIDZ
PIDZ, the leading online platform for independent
healthcare professionals, joined Almunda Professionals
in early January 2022. Almunda showed strong growth in
the first half of 2022 - mainly thanks to the acquisition of
PIDZ. Turnover increased by 87 per cent during the period,
from 6.9 to 12.9 million euro, while net profit rose by 85 per
cent. PIDZ benefits from the continued strong demand
for independent healthcare professionals. PIDZ recruits
an increasing number of healthcare professionals thus
meeting the growing demand. This growth continued in
the third quarter. PIDZ’s revenue for the first nine months
of 2022 is about 30 per cent higher than a year earlier.
At Novisource, that faces a tight labour market, results
were below the level of a year earlier. Novisource’s focus
is on recruitment to resume its growth path. Based on the
good third quarter, Almunda on 24 October expressed its
expectation of excellent results for 2022 as a whole, with
strong growth in revenue and operating profit.
Morefield Group acquired Kersten
Kersten still felt the impact from Covid restrictions and
higher absenteeism in healthcare at the beginning of
2022. In the end, Kersten managed to achieve higher
sales for the whole of 2022. Annual revenue came in at
78 million euro, 10 per cent higher than in 2021.
The EBITDA margin (Dutch gaap) increased to around 11
per cent. Because the industry has long-term contracts,
it is difficult to directly pass on the increased costs to
the customer. Kersten expects that it can raise prices in
the long run. Previous investments in IT and the organ-
isation are still expected to contribute to growth in the
medium term. At the end of 2022, the listed Morefield
Group acquired Kersten from Value8. This effectively
made Kersten publicly listed. This offers several advan-
tages for its intended further growth. It gives Kersten
access to external risk-bearing capital and allows it to
finance acquisitions - partially or fully - with shares, while
Value8 remains a major indirect shareholder. Healthcare
companies are a relatively scarcity on the Netherlands
stock exchange. The arrival of Morefield Group/Kersten
therefor offers investors the opportunity to benefit from
Kersten’s expected growth and capitalise on the health-
care/ageing trend.
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5. Sound progress at other companies
This chapter describes the developments at the other
private investments (private equity or PE), listed interests
and other balance sheet items.
Private investments
AmsterdamGold
AmsterdamGold had a good year, especially against the
backdrop of flat precious metal prices. The gold price
rose marginally to 1824 dollar in 2022, while the silver price
fell almost 3 per cent to 22.41 dollar. The 2022 low was
reached in early February, after which there was a clear
recovery. AmsterdamGold performs best when precious
metal prices fluctuate sharply or rise sharply, and when
precious metals are in demand. This was not the case in
2022. Turnover for 2022 was 50.6 million euro. Operating
profit (EBITDA) was 1.1 million euro, roughly the same as
the previous two years. AmsterdamGold has invested
heavily in its organisation and IT platform and expects to
benefit from these investments in the coming years.
BK Group
BK’s turnover (trust and corporate services) was 4.6 million
euro in 2022, as budgeted. BK made a fresh start in 2022
with a new team. Despite the additional costs involved,
EBITDA rose slightly to 0.3 million euro. The new team de-
veloped plans to get BK back on a growth path. The aim is
to achieve growth in revenue and operating profit in 2023.
Concordia
Concordia achieved exceptional results in 2021 thanks to
extremely high timber prices. At the AGM of Concordia in
May 2022 the company predicted for 2022 good results,
but at a lower level than in 2021.
The final results for 2022 show an increase in turnover
from 113 to 125 million euro. EBITDA amounted to more
than 10 million euro, lower than 2021 but still the second
highest EBITDA in the history of the company. In early
2023, Concordia made another acquisition: Eppinga
Hout and Bouwmaterialen (Bouwcenter), a major
supplier to the construction industry in Friesland.
In May 2022 Robert Brand was named CEO of the compa-
ny. We are confident that, under the leadership of Brand,
Concordia will be able to grow further. Results in the short
term will however also depend on the economic climate,
the building activity and external factors like timber prices.
Our investment in Concordia is a long term investment.
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Skysource
For Skysource, 2022 was a turbulent year. A major cus-
tomer left - by mutual agreement – in the first quar-
ter. That decision was made on strategic grounds and
Skysource was properly compensated. Nevertheless,
Skysource must grow back from a smaller client base.
The compensation allowed a generous dividend and the
bank loan to be repaid in full. Due to the transition year,
the results (although positive) are not representative
for the coming years. During 2022, Value8 decided to
expand its stake from 46 to 100 per cent and draw a new
growth path with a new management team. Skysource
expects to grow organically by taking on new custom-
ers and is actively looking at opportunities for add-on
acquisitions.
TABS Holland
TABS Holland showed robust results in 2022. Sales rose
6.8% to 1,027 million euro. Sales growth was driven by
higher prices, while there was pressure on volume.
Due to a 13 per cent higher cost level, operating profit
and net profit were lower. The net result of 67 million
euro is still very good in absolute terms. In our view, the
exceptionally good 2021 is not representative of TABS’
operational performance. The short-term outlook for the
market is not bright. The construction market is impact-
ed by supply-chain problems, higher costs, higher inter-
est rates and postponement of construction projects.
Meanwhile, TABS continues to acquire companies. In
2022, these included: Hormes Bouwmaterialen, Withagen
Houtprodukten, Houthandel Looijmans, Alex van Giethu-
ijzen and most recently KoningsBlauw. We expect TABS to
continue to grow faster than the market in the long term
and are positive about the company and the share. A
dividend of 4.75 euro per share was paid for 2021 and 3.75
euro is proposed for 2022. We acquired the shares around
35 euro per share and see potential for further value
creation at TABS.
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Listed investments
Cumulex
In late 2022 and early 2023, two shareholders’ meetings
of Cumulex took place in which approval was requested
and obtained for the acquisition of AA Circular.
AA Circular is a demolition company and offers
renovating and recycling services in the B2B
construction market in the Netherlands. Its annual
turnover is approximately 5.9 million euro. AA Circular is
healthily profitable but felt the impact of postponed
construction projects in 2022. For 2023, earnings are
expected to increase with an EBITDA-level heading
towards 13-15 per cent.
IEX Group
IEX Group again achieved good results in 2022. Turnover
rose from 4.5 million to 5.3 million. Operating profit
(1.5 million EBITDA) was 12 per cent higher than in 2021.
EBIT and net profit also rose. IEX Group had to deal with
less favourable factors: a bearish stock market and a
sharp decline in the number of transactions by private
investors. Against that background, the achieved reve-
nue growth is a fine performance.
The number of paying subscribers increased compared
to year-end 2021. The cash flow generated was used for
a repayment on the bond loan, which will significantly
reduce interest expenses in the coming years. IEX is in
good shape and has good prospects.
Lacroix
French electronics company Lacroix took a majority
stake (62%) in US-based Firstronic (140 million dollar
annual turnover) at the end of 2021. Lacroix 2022 results
were impacted by problems in the international supply
chain. The reported turnover in 2022 was 707.8 million
euro compared to 501.5 million euro a year earlier. Net
income amounted to 11.9 million euro compared to
21.6 million euro in 2021. Lacroix shares fell in 2022 from
43.10 euro to 26.90 euro. We consider the shares under-
valued.
MKB Nedsense
MKB Nedsense invests in smaller SMEs in the segment
up to 10 million euro. In 2022, the portfolio consisted of
four stakes in four companies: Axess (platform lifts), GNS
Brinkman (fire protection, roller shutters), Almunda Pro-
fessionals (consultancy) and TIB-TEC (early stage green
hydrogen). MKB Nedsense realised a slight increase in net
asset value in 2022. As a listed investment company, MKB
Nedsense offers extensive information on its corporate
website.
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Other interests
- PAVO Zorghuizen operates a care home in Tegelen.
Turnover is 2 million and the result (on a monthly basis)
is currently at break-even. The ambition to grow is
evident, but PAVO is selective when assessing acquisi-
tion candidates.
- Keesmakers restarted in early 2023 under the banner
of Westland Kaas, known for Old Amsterdam cheese.
Due to stagnating results and changes in manage-
ment, Value8 was unwilling to make additional invest-
ments in Keesmakers. The book value of 0.15 million
euro as of 31 December 2021 was fully written off in the
2022 half-year results.
- In June 2020, Value8 built a position in several list-
ed gold and silver mining shares as a hedge against
inflation. Due to the disappointing development of
precious metal prices, the return on this investment
was negative. This investment is reduced at a loss.
- To hedge against rising interest rates, Value8 shorted
Bund futures. Value8 gained 1.7 million euro on this
position.
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6. Modest drop in net asset value
to 9.03 euro
In 2022, Value8 managed to retain much of the increase
Shareholders' equity decreased from 96.1 to 91.9 million
in value realised in 2021. In 2021, the net asset value per
euro. A limited buyback of Value8 shares resulted in a
share rose by 22.3 per cent to 9.32 euro and - includ-
slightly more favourable development per share.
ing the dividend - a total return of 24.9 per cent was
achieved. The year 2022 ended with a net asset value
The annual report is prepared based on the assump-
of 9.03 euro per share. This is a decrease of 3.1 per cent.
tion of continuity. The already strong balance sheet
If the dividend (17 eurocents per share) is included, the
improved in 2022 compared to a year earlier. Bank
total decrease is 1.3 per cent. Value8 thus achieved a
debt halved to 2.4 million euro. In addition, a 2.2
clear outperformance against the international equity
million vendor loans were provided to Value8 mainly
indices.
in relation to the Novisource transaction in 2021. This
resulted in very low leverage on the portfolio
Solvency increased from 85.2 per cent to 91.5 per
In 2022 Value8 realised direct income of 4.2 million
cent in 2022. Value8 has had a very strong balance
euro, consisting of interest income of 0.4 million euro,
sheet since its inception. Value8 considers the
realised results on listed shares of 0.2 million euro and
current balance sheet ratios very comfortable, given
dividends of 3.6 million euro. On top of this, other
that solvency is well above the range of 60 to 70 per
income of 0.4 million euro was generated. This was
cent which is considered safe.
offset by organisational costs (almost unchanged at
1.9 million euro) and interest expenses (0.3 million euro).
Our investments in private companies increased by
3.1 million euro. Kersten and Concordia contributed
significantly to that increase. There was a direct
equity change of 1.3 million euro as part of the sale of
Kersten to Morefield. Listed interests, on the other
hand, decreased by 7.7 million euro. The explanation
for that decrease lies largely with two of Value8’s
largest interests. The stakes in Ctac and Renewi
decreased in value by 3.6 million and 4.3 million
respectively. The fall in share prices is a given for
Value8 and is immediately recognised in the result.
However, that does not mean that we believe that
these decreases in share price are representative for
the fundamental developments at these companies.
In fact, they are not. Both companies grew in
revenue, strengthened their market position, and
became more profitable. The mix of the factors
mentioned above lead to a net result of 2.5 million
euro negative. Portfolio size fell from 112.8 million euro
to 100.4 million euro.
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7. Share capital and dividend
Value8’s authorised share capital consists of ordinary A
shares (unlisted), ordinary B shares (listed) and cumula-
tive preference C shares. No A shares were outstanding
at the end of 2021.
The number of ordinary shares (B) outstanding was
10,685,792. By the end of 2021, a total of 955,405 ordinary
shares had been repurchased. A further 126,500 B shares
were repurchased in December 2022. As a result, the
number of outstanding shares is 9,603,887. This number
is also used to calculate net asset value, the equity per
share. The average number of outstanding shares is
used to calculate earnings per share. As this additional
share buyback took place in the last month of 2022, the
average number of shares outstanding decreased only
slightly from 9,730,387 to 9,713,058. Value8’s ordinary
share price fell from 6.48 euro to 5.66 euro in 2022. If the
dividend (17 eurocents per ordinary share) is included, the
total return is -10.0 per cent.
Value8 has had cumulative preference C shares since
2012. The preference C shares have a base value of
6.25 euro and a dividend percentage of 5 per cent.
Therefore, they pay a dividend per share of 0.3125 euro
per year. Value8 stated in 2020 that is does not intend to
withdraw the preference shares for at least five years.
In 2022 126,680 preference shares were repurchased. At
the end of 2022 in total 797,329 preference C shares are
outstanding with third parties. The share price of the cu-
mulative preference shares fell to 5.00 euro at the end of
2022. Due to the fixed dividend (0.3125 euro per year), the
preference shares have a fixed-yield character.
8 . E leve n consecutive ye a rs of
divide nd paym e nt
Given the relatively good results for 2022, Value8 propos-
es to pay a dividend of 18 eurocents on ordinary B shares.
That is an increase of almost 6 per cent compared to the
2021 dividend.
The dividend on the cumulative preference shares (ISIN:
NL0015118803) amounts to 0.3125 euro per preference
share, 5 per cent of the basic value of 6.25 euro per
preference share. Since 2021, the dividends on Value8’s
cumulative preference shares have been paid on a quar-
terly basis. Consequently, the 2022 dividend was already
paid:
· April 2022:
· July 2022:
· October 2022:
· January 2023:
7.5 eurocents
7.5 eurocents
7.5 eurocents
8.75 eurocents
9. Staff and organisation
At the companies in which Value8 has a majority stake,
employment increased slightly in 2022. In total, these
companies employ about 900 people (2021: 906 em-
ployees).
As Value8 is an investment company, this annual report
only reports on the team at the NV’s office in Bussum.
That team consists of eight professionals, including
members of the Board of Directors. Regarding staff
development, the number of employees at Value8 is ex-
pected to remain approximately the same in 2023. The
team’s activities include the monitoring of companies
and investments, careful selection and due diligence of
new investments and achieving fast, efficient processes.
That basis allows Value8 to build growth with the man-
agers of our companies.
We thank all employees of the Value8 companies for
their commitment and contribution to the success of
their businesses.
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10. Invest m e nt a nd f in an cing
Investing is Value8’s core business. Together with the
managers of our companies, we are constantly looking
at opportunities to strengthen our businesses. This may
involve add-on acquisitions, but also larger transac-
tions. We continue to search for potential investment
opportunities, examining the qualities and growth pros-
pects of companies and weighing up expected returns
against risk.
Value8’s financial position remains as good as ever and
offers room to take new interests and assist our current
businesses in their growth trajectories.
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11. Expectations for 2023
The global economy does unfortunately not look like a
cloudless blue sky. The darkest clouds are high inflation,
rising interest rates and the prospect of weak econom-
ic growth. The business community is therefore faced
- again - with the task of boosting sales to cope with
higher costs.
Given the strong development of our businesses, we look
to 2023 with optimism. Our diversified portfolio reduc-
es risk and with our choice of sectors - digitalisation,
healthcare, and recycling - we take full advantage of
today’s and tomorrow’s megatrends.
Since more than two-thirds of Value8's portfolio consists of
listed investments, Value8 is not immune to the stock market
sentiment. Assuming a normal stock market year, Value8
expects an increase in net asset value per share for the year
2023
Board of Directors,
P.P.F. de Vries
G.P. Hettinga
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12. Report of the Supervisory Board
The Supervisory Board advises the Board of Directors
and about the cooperation with Value8. Under normal
and monitors developments at Value8. The Supervisory
circumstances, accon avm would have wanted to audit
Board supervises the course of business in the company
subsequent financial years as well. This decision forced
and the functioning of the Board of Directors.
Value8 to look for a new PIE audit firm.
Strategic developments
-14However, the Netherlands has a very limited number of
During the 2022 financial year, the Supervisory Board
PIE audit firms, resulting in distorted market relations. In a
discussed Value8’s long-term strategy with the Board of
short time, three audit firms - accon avm, Grant Thorn-
Directors. In shaping the strategy, attention was paid,
ton and Baker Tilly - have withdrawn from the PIE market
among other things, to its implementation and feasibility,
and surrendered their licences. As a result, there are only
and to the opportunities and risks for the company.
six PIE audit firms in the Netherlands: the big 4 and two
medium-sized firms. This situation creates a capacity
During the financial year, the Supervisory Board con-
problem and makes it difficult and sometimes impossible
sidered the investment strategy considering the special
for PIE organisations (such as listed small caps) to con-
market conditions, including tensions in Ukraine, and
tract a PIE audit firm.
rising inflation. Existing listed investments and private
equity investments were discussed, as well as potential
In this regard, big 4 firms are very reluctant to take on
new investments.
new clients in the listed small-cap segment because of
the perceived combination of low earning potential and
Group financial reporting
-14increased risk profile. Audit firms also cite a capacity
The Supervisory Board had regular discussions with the
problem. This has been exacerbated by the audits audit
Board of Directors about the course of business at Val-
firms have to carry out as part of corona-related gov-
ue8 and the portfolio companies. The Supervisory Board
ernment support to the corporate sector.
paid attention to various subjects that are important
for Value8’s success, such as (dis)investments, portfolio
In a broader perspective, we brought the issues (the
management, financial management, reporting, risk
shortage of PIE audit firms, too little capacity, and the
management, human resources, and investor relations.
result of not being able to contract a PIE audit firm) to
The Supervisory Board discussed the strategy and as-
the attention of AFM, Euronext Amsterdam, the Ministry
sociated risks on a regular basis. The Supervisory Board
of Finance, and professional body NBA. Although these
also obtained information on changes in staffing, both at
parties partly or fully recognised the problem, this did not
Value8 and at key positions at the portfolio companies.
lead to a process with a structural or temporary solution
to this issue. However, the finance minister did announce
During the preparation of the financial statements, the
to come up with legislation to oblige audit firms to audit
Supervisory Board was informed in detail by the Board of
listed companies. Meanwhile, a bill is in preparation, but
Directors. Among other things, the internal risk manage-
not yet passed by Parliament, whereby the NBA will have
ment and control systems were discussed, and attention
power of designation.
was paid to filling the vacancy for the PIE audit firm as
well as the periodic reporting. The Supervisory Board
On May 9th 2023 Value8 signed an engagement letter
believes that sufficient adequate measures have been
with the Portuguese PIE-auditfirm CFA. In the audit
taken to assess the design and operation of the internal
process the supervisory board has had three meetings
risk management and control systems. Given the size
with CFA.
of the organisation, Value8 has chosen not to set up a
separate internal audit department.
Audit
As discussed in the previous financial report, there is a
national problem in the market for PIE audit firms. Our
previous PIE audit firm, accon avm, chose to no longer
focus on the listed market, which means it no longer
has a PIE license at the AFM. Accon avm indicated that
it was very positive about the audit process at Value8
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Investments and divestments during the financial
year
During the year, the Supervisory Board was frequently
briefed by the Board of Directors on potential invest-
ments and divestments. A small number of investments
were made in 2022, both in the listed portfolio and
private equity interests. In addition, the majority stakes
in PIDZ and Kersten were sold to listed companies where
Value8 holds the majority stake. The Supervisory Board
paid attention to the purchase and sale process and
the risks in combination with the long-term strategy.
The long-term strategy remains focused on investing in
new activities and companies in the preferred sectors,
strengthening the portfolio companies, and making
additional investments in portfolio companies in the pre-
ferred sectors. These investments can be either private
or listed.
The Supervisory Board is involved in all major trans-
actions, including acquisitions and divestments. It is
common practice in major investment and divestment
projects that the Supervisory Board is informed at an
early stage of the intended transaction and its conse-
quences for Value8. Decision-making can take place
quickly and responsibly.
Supervisory Board meetings
The Supervisory Board meets on a regular basis and has
supervised the management conducted by the Board
of Directors both in and out of meetings. During the
financial year, the Supervisory Board met five times, of
which once without the Board of Directors. During these
meetings, the Supervisory Board was fully present.
Partly because of corona, most meetings took place via
videoconferencing. There were also regular consultations
by telephone or e-mail. The topics discussed included -
among others - the financial statements, investments,
divestments, financing, PIE audit firms, and other trans-
actions.
The Supervisory Board met once without the Board of
Directors present. This meeting included an evaluation
of the functioning of the Board of Directors. During one
of the meetings the Supervisory Board evaluated its own
performance and that of its individual members. The
Supervisory Board also considered whether the expertise
and competences of its individual members are sufficient
to oversee and adequately supervise Value8’s broad
range of participating interests. The Supervisory Board
periodically discussed the performance and remuner-
ation of Value8’s Board of Directors members. In these
discussions, both the individual and collective function-
ing of the Board of Directors were discussed.
Members of the Supervisory Board and Board of
Directors
Since mid-2019, both the Board of Directors and the
Supervisory Board have consisted of two people. There
is an active search for a female candidate to join the
Supervisory Board. The vacancy profile contains exper-
tise and experience in investing in listed companies and
an active, relevant position in the corporate sector. In
the 2022 financial year and the first months of 2023, this
did not result in a proposal to appoint a new Superviso-
ry Board member. In 2023, the first term of the current
Supervisory Board members will expire. At the upcoming
shareholders’ meeting, both members will be available
for reappointment.
The Supervisory Board is committed to good investor
relations. Within the Board of Directors, the CEO bears
the day-to-day responsibility for investor relations. Re-
muneration policy
The starting point of the company’s remuneration policy
is remuneration in line with the market. The remuneration
policy for the members of Value8’s Board of Directors
is determined by the General Meeting of Shareholders.
During the General Meeting of Shareholders of 12 June
2013 and 4 June 2020, the current remuneration policy
was approved. The actual remuneration of a member of
the Board of Directors is determined by the Supervisory
Board. The Supervisory Board made several scenario
analyses for the remuneration.
The remuneration for members of the Board of Directors
is partly dependent on results through a bonus scheme.
Members of the Board of Directors are responsible for
their own pension accrual and pay for it themselves. Their
remuneration is understood to include a compensation
for pension costs. The remuneration of a member of the
Supervisory Board is determined by the General Meet-
ing of Shareholders. The remuneration of a Supervisory
Board member is independent of the result achieved by
the company.
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Board of Directors
Fixed remuneration
The members of the Board of Directors have accepted
relatively limited directors’ fees since Value8’s inception
in 2008. An adjustment took place in mid-2013, which was
approved by the General Meeting of Shareholders. The
fixed remuneration is adjusted periodically partly based
on inflation.
For Mr De Vries, remuneration is charged via his manage-
ment fee. For the fixed remunerations of the individual
directors for 2022, please refer to the dedicated table in
the annual report. Very limited use is currently made of
peer group analysis to determine the level of remunera-
tion. The Supervisory Board does note that the remuner-
ation of Value8’s directors is relatively small compared to
remuneration at other small caps with similar equity or
market capitalisation.
Variable remuneration
Since 2009, Value8 has had a bonus system for the mem-
bers of the Board of Directors. This stipulated that the
variable remuneration for the CEO would not exceed 33%
of the fixed remuneration and that for members of the
Board of Directors would not exceed 50%. Since 2013, the
bonus system has been fleshed out, with the four bonus
criteria adjusted.
Under this system, based on the bonus right granted by
the Supervisory Board, board members are entitled to
the full bonus if in the past three years if at least three of
the four following criteria were met:
· Average growth in equity per share of at least 5 per
cent per year.
· Average equity growth of at least 5 per cent per year.
· Average total shareholder return (TSR) of more than 5
per cent per annum.
· Average total shareholder return (TSR) of more than 10
per cent per annum.
The chosen performance criteria are in line with Value8’s
long-term strategy objectives, including growth in equity
per share and outperforming the stock market index in
the long term. The average TSR takes into account the
share price return plus the dividend yield. A criterion is
considered achieved if average growth over a three-
year period has been achieved. This prevents incidental
developments or the dividend policy from having too
great an impact on the bonus award. If at least two of
the criteria are met, the Supervisory Board has the dis-
cretionary power to still award the bonus in full or in part.
The Supervisory Board discussed in general terms the
bonus criteria and bonus system. The introduction of sus-
tainability criteria was also considered, but no decision
has yet been taken on this.
For the period 2020-2022, average equity growth (per
share) and average TSR were such that these perfor-
mance criteria were met. Three of the four criteria were
met in 2022. On this basis, the bonus was set at 20 per
cent of fixed remuneration. It should be noted that the
bonuses for 2022 are at the same (annual) level as in 2013.
Value8 has a claw-back scheme under which the Su-
pervisory Board can reclaim bonuses that have already
been set if they are found to have been determined
incorrectly based on incorrect financial statements.
Other remunerations
Any severance payments will comply with the require-
ments of the Dutch Corporate Governance Code and
will therefore not exceed one year’s remuneration. Mr
De Vries waived in advance the right to any settlement
or compensation in case of involuntary departure.
This commitment was first made in 2009. At the end of
2022, this commitment was extended for another year.
No shares or options were granted by the company to
members of the Board of Directors in 2022. Nor were any
loans granted or severance payments made. There is no
specific pension scheme for the directors. The members
of the Board of Directors are responsible for and pay for
their own pension accrual.
The Supervisory Board will regularly review the actual
remuneration of the members of the Board of Direc-
tors conform the remuneration policy and adjust it if
necessary. In 2022, no transactions took place in which
a member of the Board of Directors had a conflict of
interest. For the remuneration of the members of the
Board of Directors in 2022, please refer to the financial
statements.
Supervisory Board
At the Extraordinary General Meeting of Shareholders
on 11 June 2014, the remuneration of the members of the
Supervisory Board was set at 20,000 per year and for the
chairman at 25,000 per year. Supervisory Board members
do not receive any result-dependent remuneration, share-
based remuneration or other share-related remuneration.
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Value8’s remuneration policy for the Board of Directors
and the Supervisory Board complies with the Dutch Cor-
porate Governance Code. Please refer to the financial
statements for the remuneration of the members of the
Supervisory Board in 2022.
Value8 complies with the best-practice provisions of the
Corporate Governance Code relating to the Supervisory
Board. All members comply with the provisions set out in
this code regarding independence and expertise. Partly
in view of Value8’s size, the Supervisory Board does not
have separate appointment, audit, and remuneration
committees. The entire Supervisory Board is therefore
designated to fulfil the tasks of these committees.
The Supervisory Board thanks the Board of Directors and
all employees for their commitment and dedication in
2022.
Bussum, 20 June 2023
Supervisory Board
Robert de Haze Winkelman
Jan Peter Kerstens
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13. Risk factors
Entrepreneurship is an essential part of Value8’s strategy.
Entrepreneurship is inextricably linked to risk-taking. To
deal with these risks responsibly, it is necessary that these
risks are continually identified, mapped out and subse-
quently managed properly and efficiently. Value8 has set
the goal of designing the organisation in such a way that
decisive entrepreneurship and effective risk manage-
ment go hand in hand.
Risk management and control systems
Risk management within Value8 has several facets. The
risks related to, among others, strategy, policy, compli-
ance, and financial systems are regularly discussed by
the Board of Directors with the Supervisory Board. The
Board of Directors regularly visits the companies in which
Value8 invests to get a good picture of the situation at
these portfolio companies. The managements of these
companies are primarily responsible for the implemen-
tation and operation of risk management systems at
the companies concerned. Nevertheless, to maintain
grip and control on the risks that exist at the portfo-
lio companies, the managements of the companies in
which Value8 invests report to Value8 on a regular basis,
directly or indirectly. This includes extensive attention to
current and potential risks.
The findings and measures aimed at controlling risks
are regularly discussed and evaluated. The outcomes
are discussed in the Board of Directors’ meetings and
are discussed with the Supervisory Board. Periodically,
Value8 analyses the overall risk profile and whether the
risk management systems are appropriately set up. This
approach focuses on the following headings:
on the one hand, by external risks that lie outside the
company’s sphere of influence and, on the other hand,
by several manageable risks. This paragraph describes
the controllable risks, the internal risk management and
control systems embedded in the organisation, the
decision-making process, and daily operations.
Strategic risk
Investing to create value growth for shareholders is an
essential part of Value8’s strategy. Adverse economic
conditions may result in Value8 and/or the companies
in which Value8 invests not performing or performing
below expectations. Value8’s activities will react differ-
ently to cyclical developments. Value8 therefore strives
for a sound mix of, on the one hand, proven companies
that make a stable, substantial contribution to results
and cash flow and, on the other hand, relatively young
companies with high growth potential.
Value8 regularly reviews its portfolio for strategic risks.
This involves testing activities against the return and
growth criteria set for them and their impact on Value8’s
risk profile. Spreading risk is not an end in itself. Value8
focuses on several growing sectors in which it takes
targeted risk. In 2021, Value8 succeeded in giving further
substance to this focus.
In addition, a possible downturn in the financial markets
may have repercussions on the economic climate in the
Netherlands and abroad, which could affect Value8’s
operations. Furthermore, it is conceivable that also for
Value8 itself, access to external capital will become
limited, which could potentially complicate Value8’s
· strategic risk;
· operating risk;
· market value risk;
· listing risk;
· legal and compliance
risk;
· organisational risk;
· investment risk;
· tax risk;
· country risk;
· financing risk;
· currency risk;
· interest rate risk;
· liquidity risk.
operations in the long run.
Operating risk
The operating results of the companies in which Value8
invests can be disappointing, partly due to increasing
operating costs or other unforeseen circumstances.
A large proportion of the companies have relatively high
fixed costs in the form of personnel costs. An unforeseen
Our general rule is that risks should be proportional to
the size and life stage of the activities concerned and
the expected return. Furthermore, it is considered on a
case-by-case basis whether it makes sense to mitigate
the risk, for instance, by insuring it.
The following is a description of the risks associated with
Value8’s strategy and profile at the time of reporting and
the developments in 2022 that influenced this risk profile.
In this respect, Value8’s risk environment is determined,
increase in the personnel costs of one of the companies
or participations, for example because of new collective
labour agreements or a drop in turnover, will therefore
be able to have a negative effect on the results of the
companies in which Value8 invests.
Market value risk
Value8 also invests in listed companies. These invest-
ments are valued at fair value, generally in line with the
share price. A decrease in the share price can therefore
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negatively affect the value of these investments. If the
value of these investments decreases, this will directly
affect Value8’s results and/or equity. There is a risk that
investments will not achieve the desired result.
Listing risk
Value8 and some of its participations are listed on the
official market of Euronext Amsterdam and must there-
fore comply with the applicable laws and regulations.
If these laws and regulations change, this may lead to
additional costs. Although a stock exchange listing offers
great advantages, there may be such costs associated
with it as to reduce profitability. In 2022, there were no
changes in laws and regulations that resulted in a mate-
rial change in listing costs. During 2022, it again became
clear that the supply of PIE audit firms has been reduced
to such an extent that this may entail a future increase in
the cost level.
Legal and compliance risk
Value8 is subject to specific laws and regulations that
need to be complied with. Value8 attaches great impor-
tance to compliance, both at Value8 and at its portfolio
companies. In this light, it can be pointed out that Value8
also has to comply with various laws and regulations as
a listed company and investor. In addition, some port-
folio companies are licensed by virtue of regulations in
their sector. AmsterdamGold, for example, holds an AFM
licence to offer precious metals (physical gold and silver)
as investment objects. The companies that are part of
BK Group have licences for trust services (from DNB,
among others).
Legal and compliance risk concerns recording, protect-
ing, and enforcing recording relevant intellectual proper-
ty rights, including trademark registrations, patents, and
domain names (URLs).
Value8 operates in the field of corporate finance services
and can be held liable for its services. Although Value8
is not aware, at the time of publication of this annual
report, of any impending claim in that respect, Value8
could be held liable for any failure to provide services or
other possible damages. To cover this risk, Value8 has
taken out insurance. Finally, the companies in which
Value8 invests are also subject to the risk of claims by
third parties.
Organisational risk
Value8’s organisation has grown since its inception in
2008 but is still vulnerable to and dependent on any
changes or fall-out of people. The organisation depends
on a few key people, including at least the members of
the Board of Directors. To date, the network and past
track record of these members largely determine the -
quantity and type of - opportunities and propositions,
both investment related and corporate finance related.
Value8 is aware of the risks of, among other things,
industrial accidents, staff cuts and labour disputes. In
that context, we regularly review how these risks can
be excluded or mitigated and/or, where necessary,
adequately insured.
Value8 has an informal but results-oriented and
entrepreneurial corporate culture. Long-term relation-
ships with shareholders, employees, business associates
and other parties are key. Staff changes and or other
organisational changes may jeopardize the current
corporate culture and values. We therefore continue to
pay close attention to maintaining the strength of our
corporate culture.
Investment risk
As part of the investment process, Value8 formulates
assumptions and considers possible future events. Actual
developments may differ significantly from these. Also,
errors of judgement in the due diligence process and
contract negotiations can lead to losses and/or reputa-
tional damage for Value8.
Value8 seeks to minimise this risk by carrying out the due
diligence process and contract negotiations as carefully
as possible. Where necessary, Value8 engages the assis-
tance of external advisors who support Value8 in identi-
fying the risks. They advise Value8 on how these risks can
be limited as much as possible by (among other things)
by smart contracts. Value8 generally handles acquisition
projects scrupulously. Each proposition is
assessed intensively and thoroughly and, where neces-
sary, additional securities are required, for example in
the form of indemnities, guarantees or sureties. If Value8
believes that an investment involves too much risk, the
investment proposal is rejected. Many investment propo-
sitions were rejected in 2022.
Tax risk
The main taxes related to Value8’s activities are cor-
porate income tax, turnover tax and payroll tax. As far
as corporate income tax is concerned, Value8 forms a
fiscal unity with several companies in which it holds at
least 95 per cent of the shares and whose financial years
run concurrently. The filing of these tax returns has been
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outsourced to a specialised firm. Value8 uses the Dutch
participation exemption when investing in companies,
where applicable. If the existing rules for the participa-
tion exemption are materially changed, Value8’s results
could be affected.
Country risk
Value8, through the companies in which it invests, op-
erates in several countries, mainly including Germany,
Belgium, France, Luxembourg, and Curacao. If the eco-
nomic or political climate in these countries deteriorates,
this will be noticeable in the results of the companies
operating in the country concerned. The results of these
companies will affect Value8’s results (in the valuation
of investments). The economic situation in those coun-
tries may therefore have an indirect effect on Value8’s
performance.
Financing risk
Value8 will seek to finance new investments and existing
commitments as much as possible from existing cash
resources, existing cash flows or existing credit facilities.
If there is a further funding requirement, further funding
may be raised through various funding sources. For in-
stance, by issuing new shares or bonds or by entering into
a financing agreement with one or more banks (possibly
at the level of the company or participation concerned).
A combination of these financing methods may also be
used. Not being able to obtain additional financing could
have a negative impact on new investments or on the
results of existing portfolio companies.
Currency risk
Although Value8’s investments are largely in euro coun-
tries, Value8 is exposed to currency risk with respect to
listed investments in dollars and pounds sterling. Value8
also runs a limited currency risk indirectly through its
portfolio companies through the sourcing and export
activities. Given the limited size of the exposure and the
nature of the risk, Value8 has no fixed policy to hedge
these risks.
Interest rate risk
The interest rate risk policy aims to limit the interest rate
risks arising from the financing of the company and thus
also optimise net interest income. On the one hand, Val-
ue8 runs a limited risk in the remuneration of borrowed
funds if interest rates fall. On the other hand, the cost of
borrowed funds may increase if interest rates rise.
A 1 per cent reduction in interest rates would not result in
a material change in profit or equity. The same applies to
a 1 per cent increase in interest rates.
Liquidity risk
Liquidity risk is the risk of having insufficient funds to
meet immediate obligations. Value8 has placed availa-
ble liquidity with several European credit institutions with
at least an A rating. All current liabilities of the company
must be met within one year. If Value8 enters new obliga-
tions, this could lead to a higher liquidity risk. Also, in case
of a bankruptcy of the bank where the liquidities are
held, Value8 would face a potential liquidity risk. In the
event of insufficient liquidity, assets may have to be sold
at unfavourable terms to free up additional liquidity to
meet immediate liabilities, or collateral may be realised
at lower values than would be possible under normal
circumstances.
To the extent that debt financing is present within one
of the portfolio companies, Value8 makes every effort to
ensure that these companies build in sufficient margin to
mitigate liquidity risk.
Sources of funding
In the context of the objective of value creation for
shareholders, a balanced mix of financing sources is
sought, referring in any case to a sound equity/debt
ratio. In doing so, Value8 has the possibility of issuing
ordinary shares and cumulative preference shares. The
possibilities for financing through loan capital are also
analysed periodically. In that context, given the relatively
low interest rate on government bonds, the issue of a
bond or convertible bond loan is also being considered
to supplement or replace the current credit line and to
increase the company’s liquidity position.
There are also various other sources of funding for further
investments and meeting existing commitments, includ-
ing divestments of (listed) investments and repayments
on loans made.
Value8 has several funding sources (including a sizea-
ble investment portfolio) in addition to cash and cash
equivalents that can be used to finance the company’s
growth. Value8 aims to grow to strengthen the clusters in
which it operates and - apart from organic growth - to
grow through investments, acquisitions or taking (equity)
interests.
Risk appetite
Pursuing objectives is inextricably linked to taking (con-
trolled) risks. The willingness to take risks is proportionate
to the size and life stage of the relevant activities and to
the expected return. Value8 has a very low risk appetite in
the context of compliance and reputation. Value8 has set
itself the goal of designing the organisation in such a way
that decisive entrepreneurship goes hand in hand with
the effective management of risks. In general Value8
does not have a fixed policy to hedge risks and
uncertainties with financial instruments
Risk management and control systems
Value8’s risk management and control systems include
monitoring the realisation of the budgets of group com-
panies and associates. After the adoption of budgets,
the managements are accountable through a reporting
structure and an interim consultation with Value8’s Board
of Directors. In addition, Value8 is involved as a share-
holder in important proposed decisions on investments.
These include approval decisions relating to substantial
investment decisions, the appointment of key officers and
the financing of activities.
Measures to address risk can include avoiding risk, taking
risk to exploit an opportunity, removing the source of risk,
changing the probability or consequences, spreading risk
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Value8’s financial administration is provided internally.
The administration at the various portfolio compa-
nies is also mostly done internally. Most of the portfolio
companies are audited by an external auditor. During the
financial year, Value8’s Board of Directors continu- ously
analysed and assessed the effective operation of existing
risk management and control systems, using the formal
processes, reports and assessments available to it for this
purpose. If needed, extra measures are taken to improve
our control systems. In 2022 several companies we invest
in, improved the quality of their reporting.
The Board of Directors concludes that there is sufficient
risk awareness within the organisation, that the internal
risk management and control system generally func-
tioned properly during the year under review and that no
irresponsible risks were taken.
Regarding financial reporting risks, the Board of Di-
rectors states that the internal risk management and
control systems provide a reasonable degree of certain-
ty that the financial reporting does not contain any ma-
terial misstatements and that the risk management and
control systems worked properly in the year under review.
We have no indications to assume that these systems will
not work properly in the current year.
2 5
or retaining risk after informed decision-making.
Opportunities can lead to modifying processes, the
introduction of new services, enter new markets and
establishing new relationships with customers, partners or
suppliers.
Fraud risks form an integral part of our risk assessment. A
variety of controls is in place ranging from strict
monitoring of our investments, to integrity awareness
and enforcing segregation of duties for key operational
and financial transactions. Value8 is continuously working
on improving its investment and monitoring processes to
ensure investments are processed in a more effective
and efficient way inorderto minimize the fraudrisks at
Value8 and the level of our investments. Where necessary
or appropriate Value8 undertakes measures to lower
these risks. As part of these measures, we encourage
embedding internal controls in the IT systems at Value8
and at the level of our investments. The management
board considers the controls in place as sufficient and
adequate to minimize the fraud risks.
Risks in 2022
In 2022 several potential risk factors materialized.
Geopolitical risk can have an adverse impact on the
economy in general. The war in Ukraine fits in that
category and lead to higher energy prices and inflation.
The war in Ukraine and its consequences were not
expected by the end of 2021. The downturn in the stock
market also affected the prices and valuations of the
listed investments held by Value8. The high inflation and
rapidly rising interest rates were also risks that materialized
in 2022.
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14. Share structure and legal structure
14.1 Cumulative preference
-52Value8 is a public limited liability company listed on
shares C
-132the Euronext Amsterdam stock exchange. The tick-
er symbol of the B shares is VALUE and the ISIN code
is NL0010661864. The ticker symbol of the cumula-
The cumulative preference C shares have a dividend of
tive preference C shares is PREVA and the ISIN code is
5 per cent of the basic value, which is defined as the first
NL0009875483.
price at which they were issued. The basic value is 6.25
euro per cumulative preference C share. The cumulative
At the end of 2022, Value8’s authorised capital amounted
preference C shares have been listed on the official mar-
to 7,280,000 euro. The authorised capital consists of:
ket at Euronext Amsterdam since 6 January 2012.
· 2,800,000 A shares with a nominal value of 0.35 euro;
and
According to article 23 of the articles of association,
· 14,000,000 B shares (listed) with a nominal value of
Value8 must pay the dividend on the cumulative prefer-
0.35 euro; and
ence C shares from the profit before it can proceed to
· 4,000,000 C shares (listed, cumulative preference) with
pay out dividends to the holders of A shares and B shares.
a nominal value of 0.35 euro.
The dividend on the cumulative preference C shares is
preferential to the dividend on A shares and B shares. This
The A shares are registered shares. The B and C shares
means that if Value8 did not pay dividend on the cumu-
are either bearer shares or registered shares at the op-
lative preference C shares in one year, the dividend on
tion of the holder.
the ordinary shares can only be paid after the overdue
dividends on the cumulative preference C shares have
At the end of 2022, the issued capital amounted to
been paid.
4,123,529.20. This consisted of 90% ordinary shares and
the remaining capital in preference shares:
The voting rights on the cumulative preference C shares
· 10,685,792 ordinary B shares (listed); and
are designed in accordance with the Dutch Corporate
· 1,177,649 C shares (listed, cumulative preference)
Governance Code, whereby the voting right on a cumu-
· No A shares are currently outstanding.
lative preference C share is based on the fair value of the
At year-end 2022, Value8 held 1,081,905 ordinary B shares
capital contribution in relation to the share price of an
and 352,220 cumulative preference C shares. All issued
ordinary B share. The voting rights are calculated based
shares are fully paid up. As of the date of publication, no
on the mutual ratio of the two share prices on the record
changes have taken place in the issued capital. At the
date of the shareholders’ meeting.
publication date of this annual report, in addition to the
shares held by Value8, there are two shareholders with a
In accordance with article 9 of the articles of associ-
stake exceeding 3 per cent:
ation, Value8 has the right to withdraw the cumulative
· 3L Capital Holding BV (a company owned by P.P.F. de
preference C shares at any time. In that case, the share-
Vries) with a 35.14 per cent stake, reported on 20 Sep
holders will receive the full amount, including any arrears
- tember 2021 as stated in the AFM Register ‘
in dividends. This means that if Value8 should withdraw
Directors and Supervisory Directors’.
the cumulative preference C shares, the holders of these
· Mr. J.P. Visser with a 25.6 per cent stake, reported on 19
shares will be repaid their capital contribution (6.25), plus
March 2020 as stated in the AFM Register ‘Substantial
any unpaid dividends. Value8 stated on 4 June 2020 that
Holdings and Gross Short Positions.
it does not intend to withdraw the cumulative prefer-
ence C shares in the coming five years, i.e. until 2025.
In the AFM Register ‘Substantial Holdings and Gross
Since 2021, Value8 had paid the preference dividend on a
Short Positions’ the actual percentages may change
quarterly basis.
from the stated number or percentage within the legal
bandwidth. The AFM Register ‘Directors and Supervisory
Directors’ has no bandwidth. Both registers may state a
later, different number or percentage since the publica
- tion of this annual report.
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2 7
14.2 Dividend
Value8 aims to create long-term shareholder value.
Annually, the value of existing interests in portfolio com-
panies and investments is determined. Based on this,
the change in value can be assessed. The value of these
(partly listed) interests can vary strongly, which means
that Value8’s results can also fluctuate year-on-year.
A financial year with a negative result need not mean
skipping dividend. In that context, Value8 aims for a limit-
ed but stable growing dividend for the holder of ordinary
shares, whereby a significant part of the profit can be
reinvested. Depending on liquidity planning, it may also
be proposed to pay stock dividend.
Regarding the dividend on the cumulative preference
C shares, Value8 aims to pay the annual cash dividend
on the cumulative preference C shares. If possible, the
dividend will also be paid in a year in which there is a
negative result.
On 9 August 2022, Value8 made a dividend payable of
0.17 euro per ordinary share, payable at its option in cash
or in cumulative preference shares. Furthermore, on
the cumulative preference shares the regular 5% cash
dividend was paid in four instalments, one instalment per
calendar quarter.
At the 2023 shareholders’ meeting, Value8 intends to pro-
pose a cash dividend of 0.18 per ordinary share (option-
ally as stock dividend in cumulative preference C shares)
and to finalise the dividend already paid over 2022 of
0.3125 per share on the cumulative preference C shares.
This dividend has been paid quarterly since 2021. Value8
continues to intend to pay a quarterly dividend on the
cumulative preference shares during 2023.
14.3 Articles of Association
regarding appointment
and dismissal of members
of the Board of Directors
and members of the
Supervisory Board
The following contains the relevant provisions of the arti-
cles of association, to the extent they are not mentioned
elsewhere in this annual report.
Article 14 of Value8’s Articles of Association states that
Value8 is managed by a Board of Directors consisting
of one or more members and that these members are
appointed by the General Meeting of Shareholders.
Article 15 of Value8’s Articles of Association states that
Value8 has a Supervisory Board consisting of at least
two members and that these members are appointed by
Value8’s General Meeting of Shareholders. If more than
one member are in office, the Supervisory Board ap-
points a chairman from among its members (article 19.2).
A person employed by Value8 cannot be appointed as a
supervisory director. The General Meeting of Sharehold-
ers of Value8 may appoint a member of the Supervisory
Board as delegated Supervisory Board member, charged
with the day-to-day supervision of the Value8 Board of
Directors. Article 16 of Value8’s articles of association
states that the General Meeting of Shareholders can
always suspend and dismiss a member of the Board of
Directors or a member of the Supervisory Board.
Amending the rights of Value8 shareholders requires an
amendment of the Articles of Association by the General
Meeting of Shareholders. Article 36 of the Articles of
Association states that an amendment of the Articles
of Association is possible with at least two-thirds of the
General Meeting of Shareholders’ votes, on the proposal
of the Board of Directors and with the prior approval of
the Supervisory Board.
14.4 Issue and acquisition of
shares
Shares or rights to take up shares can, in accordance
with article 6 of Value8’s Articles of Association, only be
issued pursuant to a resolution of the General Meeting
of Shareholders or of the Board of Directors if it has been
designated for that purpose by the General Meeting of
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Shareholders. If the Board of Directors has been desig-
nated for that purpose, the General Meeting of Share-
holders can - if the designation is in force - no longer
decide on a further issue. The resolution to issue by the
General Meeting of Shareholders and/or the Board of
Directors requires the prior approval of the Supervisory
Board.
When A or B shares or rights to subscribe for A and B
shares are issued, each shareholder has a pre-emp-
tive right in proportion to the aggregate amount of his
shares, subject to the provisions of the law. The pre-emp-
tive right may, each time for a single issue, be limited or
excluded by the body authorised to issue.
Acquisition other than for free can only take place if
and insofar as the General Meeting of Shareholders has
authorised the Board of Directors to do so. This author-
isation is valid for a maximum of eighteen months. The
General Meeting of Shareholders must stipulate in the
authorisation how many shares may be acquired, how
they may be acquired, and in which bandwidth the price
must be. The resolution to repurchase shares requires the
prior approval of the Supervisory Board.
At the General Meeting of Shareholders on 28 June
2022, the shareholders authorised the Board of Direc-
tors to issue a maximum of 20 per cent of the company’s
issued capital in shares or rights thereto for a period of
18 months and to limit or exclude the pre-emptive right
thereof. Also, at the General Meeting of Shareholders on
28 June 2022, the Board of Directors was authorised to
repurchase shares during the statutory maximum period
of 18 months from the date of this meeting, subject to
the law and the Articles of Association. The maximum
number of shares that can be repurchased is 20 per cent
of the issued share capital. The repurchase transactions
concerning B and/or C shares must be executed at a
price between the nominal value of the shares and 110
per cent of the opening price of the shares (as stated
in Euronext Amsterdam’s Official Price List) on the day
of the repurchase transaction or - in the absence of
such a price - the last price stated therein. Repurchase
transactions may be executed on the stock exchange or
otherwise.
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2 9
15. Corporate Governance
Value8 has a two-tier board structure. Value8 has a
Board of Directors and a Supervisory Board. The outlines
of the current governance structure are described below.
15.1 Board of Directors
The Board of Directors is charged with managing the
company, which means, among other things, that it is
responsible for achieving the company’s objectives, the
strategy with the associated risk profile, the develop-
ment of results and the ESG aspects of doing business
relevant to the company. The Board of Directors is ac-
countable to the Supervisory Board and to the General
Meeting of Shareholders. The Board of Directors keeps
the Supervisory Board informed of the course of business,
consults with the Supervisory Board on important mat-
ters and submits important decisions to the Supervisory
Board and/or the General Meeting of Shareholders for
approval.
The Supervisory Board determines the remuneration
and further conditions for each member of the Board of
Directors. These are based on the remuneration policy
as adopted by the General Meeting of Shareholders. The
Supervisory Board can always suspend a Board mem-
ber. The General Meeting of Shareholders can always
suspend and dismiss a member of the Board of Directors.
Any conflict of interest or appearance thereof between
Valeu8 and members of the Board of Directors is avoid-
ed.
15.2 Supervisory Board
The Supervisory Board supervises the policy of the
Board of Directors and the general course of affairs. The
Supervisory Board provides the Board of Directors with
advice. In discharging their duties, the Supervisory Board
members are guided by the company’s interests. The
Board of Directors provides the Supervisory Board with
the information it needs to perform its duties in a timely
manner.
The Supervisory Board members are appointed by the
General Meeting of Shareholders upon nomination
by the Supervisory Board. In doing so, care is taken to
ensure that the Supervisory Board is composed in such
a way that its members can operate independently and
scrupulously with respect to each other, the Board of
Directors, and any investment. Any conflict of interest
or appearance thereof a between the company and
Supervisory Board members is avoided. The Supervisory
Board is responsible for the quality of its own perfor-
mance. A Supervisory Board member shall retire no later
than the closing time of the General Meeting of Share-
holders, first following the day four years after his last
appointment.
The remuneration of each member of the Supervisory
Board is determined by the General Meeting of Share-
holders and does not depend on the company’s results.
The Supervisory Board appoints a chairman from among
its members. If the Supervisory Board consists of fewer
than five people, the three so-called core committees
(audit committee, remuneration committee and selec-
tion and appointment committee) are integrated into
the Supervisory Board. During the past year, the compa-
ny did not provide any personal loans to any member of
the Supervisory Board.
15.3 Corporate Governance
Code
Value8 attaches great importance to sound and trans-
parent corporate governance and strives for clear com-
munication about this with all stakeholders. This includes
the relevant ESG aspects of doing business. Value8 has
implemented the Dutch Corporate Governance Code.
Value8 endorses the principles in this code. The code can
be found at www.mccg.nl.
Value8’s Board of Directors and Supervisory Board jointly
prepared a document describing Value8’s corporate
governance structure. This includes an indication per
best practice provision of the extent to which Value8
applies this provision. This document is available on
Value8’s website (www.value8.com) under ‘Investor Rela-
tions > Corporate Governance’. Any substantial change
in the company’s corporate governance structure and
compliance with the Corporate Governance Code will
be submitted to the General Meeting of Shareholders for
discussion under a separate agenda item. A revised code
was published in December 2022. Value8 will discuss its
application within the Supervisory Board during 2023. At
this moment Value8 has not implemented other (volun-
tary) codes of conduct.
Value8 has chosen to comply with the Dutch Corporate
Governance Code as much as possible. Deviations from
the best-practice provisions are only made on a few
minor points, where application is not (yet) considered
desirable from a cost perspective. In accordance with
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the ‘comply or explain’ principle, Value8 therefore com-
plies in full. The repurchases during 2022 of the ordinary
and preference shares were according to the provision
2.7.5 of the Code. The following best practice provisions
are not (fully) applied based on the explanations below:
Best practice provisions 1.3.1 to 1.3.5
Given the size of the company, Value8 does not have an
internal auditor. For this reason, provisions 1.3.1 to 1.3.5 do
not apply.
Best practice provision 4.2.3
Given the size of the company, not all presentations to
(institutional) investors or analysts and press conferenc-
es can be attended simultaneously via webcasting or
otherwise.
15.4 Corporate governance
statement
This statement is included pursuant to Article 2a of the
‘Decree on the content of management reports’. For the
required statements referred to in Articles 3, 3a and 3b of
this Decree, please refer to the relevant references in this
annual report (more specifically: chapters 13- 16 of the
annual report).
The following communications should be considered as
inserted and repeated here:
· Compliance with principles and best-practice provi-
sions Corporate Governance Code (15.3 ‘Corporate
Governance Code’).
· The main features of Value8’s risk management and
control systems (chapter 13 ‘Risk management and
control systems’).
· The functioning of the General Meetings of Sharehold-
ers, the rights of Value8’s shareholders and how they
can be exercised, insofar as this does not immediate-
ly follow from the law (14 ‘Share structure and legal
structure’).
· The members and functioning of the Board of Direc-
tors and the Supervisory Board (16 ‘Personalia’).
· The diversity policy regarding the members of the
Board of Directors and the Supervisory Board (15.4,
‘Corporate governance statement’ under the heading
‘ESG’), as well as how the policy will be implemented
and its results in 2022.
· The information referred to in the ‘Decree on Article 10
Takeover Directive’ that must be provided pursuant to
Article 3b of the ‘Decree on the content of the man-
agement report’ is listed below.
Decree on Article 10 Takeover Directive decision
Pursuant to Article 1 of the ‘Decree on Article 10 Takeover
Directive’, Value8 provides explanations on the following
topics.
Capital structure
The capital structure is listed in chapter 14 ‘Share struc-
ture and legal structure’.
Restrictions
Value8 has no restrictions on the transfer of shares or
voting rights. There are deadlines for exercising voting
rights and rules for the issue of shares or the grant of
rights to subscribe for shares. Value8 is not aware of any
agreement between shareholders regarding the
restriction of transfer or voting rights.
Notification of substantial holdings
Substantial holdings, to the extent known to Value8, are
listed in chapter 14 ‘Share structure and legal structure’.
Special control rights and control mechanisms
There are no special control rights attached to the
shares. There are no mechanisms for controlling an
arrangement that grants rights to employees to acquire
shares in the capital of the company or a subsidiary.
Restriction of voting rights, exercise of voting rights
There are no restrictions on voting rights or the exercise
of voting rights attached to the shares.
Appointment and dismissal of members of the
Supervisory Board and Board of Directors
Regarding the appointment and dismissal of members
of the Supervisory Board and the Board of Directors,
reference is made to chapter 15 ‘Corporate governance’
of the annual report.
Amendment of the Articles of Association
Regarding the amendment of the Articles of Association,
reference is made to chapter 15 ‘Corporate governance’.
Powers of the Board of Directors
Chapter 14 ‘Share structure and legal structure’ explains
the powers of the Board of Directors, including powers to
issue shares and acquire its own shares.
Protective measures
The company has no general protective measures
against a takeover of control of the company, such
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3 1
as certification of shares, priority shares or protective
preference shares. There are no significant agreements
to which the company is a party that are formed,
amended, or dissolved under the condition of a change
of control of the company after a public offer within the
meaning of Article 5:70 of the Financial Supervision Act
has been made. The company does not have an agree-
ment with a director or an employee that provides for
a payment upon termination of employment following
a public offer within the meaning of Article 5:70 of the
Financial Supervision Act.
Investor relations policy
Value8 informs shareholders, investors, and the market
on a regular basis via the publication of press releases
based on trading updates and full financial reports upon
publication of the annual and half-yearly figures. Value8
considers it important to maintain the relationship with
existing shareholders and to bring the company and the
shares to the attention of potential investors.
ESG policy
Value8 considers the relevant ESG aspects of doing
business. Both in making new investments and in its
existing operations, Value8 weighs ESG aspects, such as
sustainability and social impact, in its decision-making to
achieve value growth for shareholders.
Value8 believes the long term success of a company is
based on a beneficial cooperation of stakeholders. In
our role as active shareholder we support and
encourage our companies to achieve sustainable long
term growth with respect to the interest of other
stakeholders and environmental, social and governance
aspects.
We also take our responsibility as sustainable investors.
Together with our investments, we want to build leading
companies that deliver strong results and growth, offer
first-class services and products, are good employers
for their teams, while at the same time minimising the
impact of their activities on the environment. In order
to monitor the ESG policy better, Value8 is considering
the use of various non-financial performance indicators
at the level of Value8 and - where appropriate -
indirect at the level of it’s investments.
Active policy at portfolio companies
The various portfolio companies have an active policy
on corporate social responsibility (CSR). With its stake
in Kersten, Value8 acquired a CSR pioneer in 2015.
Kersten leads the way in resource reuse and aims to
have a signif- icant part of its workforce made up of
people with spe- cial needs and different abilities. All
this has resulted in Kersten being the first company
selling medical supplies in the Netherlands to have a
certified Social Enterprise Performance Ladder (PSO).
Currently, Kersten is among the most inclusive
companies in the Netherlands with PSO ladder 3.
Diversity policy
Value8’s diversity policy aims to improve the
organisation by making the best possible use of its
(potential) employees and by optimising the
composition of its workforce regarding the different
backgrounds and qualities of its employees. Value8 is
convinced that working with employees with different
backgrounds and qualities contributes to achieving
our growth objective. Value8 wants to create a
working environment in which everyne’s competences
and personality can flourish. When recruiting and
selecting new employees, the diversity policy is con-
sidered. Value8 aims for a balanced representation of
men and women in the Board of Directors and the
Supervisory Board and will take this aim into account
when making new appointments. In that context,
female candidates with an investment and/or finance
background are periodically sought to work at Value8
or its investments. During 2022, Value8 took measures
to increase the quality of the board at its investments
in several places, in several cases these included
female candidates. Value8 intends to continue this
diversity policy when expanding or replacing key
positions at Value8 and its investments.
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16. Personalia
Board of Directors
Mr P.P.F. de Vries (CEO)
Mr P.P.F. de Vries (1967, Dutch nationality) is a major
shareholder and chairman of Value8’s Board of Direc-
tors and has extensive experience in the field of listed
companies. Before founding Value8, Mr De Vries was - for
eighteen years (October 1989-October 2007) - associ-
ated with the Dutch Investors’ Association (VEB). The last
twelve years he was managing director of VEB. During
2002-2003, he was a core member of the Tabaksblat
Committee. Mr De Vries studied Business Economics at
Erasmus University Rotterdam (1985-1991).
He further was chairman of the pan-European organ-
isation of shareholders’ associations Eurohareholders
(2005-2010), member of the Market Participants Panel of
the pan-European stock market supervisory organisa-
tion CESR (2003-2010), member of the Supervisory Board
of EDCC N.V. (2009-2011) and Member of the Board of
the legal predecessors of Almunda Professionals N.V.
(2011-2012 and 12 December 2013-29 January 2014) and
member of the Supervisory Board of Euronext Amster-
dam N.V. (2014-2017) and SnowWorld (2014-2022). Mr De
Vries is a member of the Committee of Recommendation
of the Juliana Children’s Hospital Foundation. In addition
to his position as CEO of Value8, Mr De Vries is currently
a member of the Board of Directors at Cumulex N.V. and
MKB Nedsense N.V. He is also a member of the Supervi-
sory Board at Almunda Professionals N.V., IEX Group N.V.,
and Morefield Group N.V.
Mr G.P. Hettinga (Member of the Board of Directors)
Mr G.P. Hettinga (1977, Dutch nationality) is a member
of the Board of Directors and co-founder of Value8. Mr
Hettinga completed his studies in Business Administra-
tion of the Financial Sector at VU University Amsterdam
in 2001. In the period from June 2001 to September 2008,
he worked as an economist at the Dutch Sharehold-
ers’ Association (VEB). In 2007, he was appointed chief
economist at the VEB. Mr Hettinga gained extensive and
relevant experience and expertise, including in the field
of analysing listed companies, corporate governance, in-
vestor relations, internet, and takeover bids. Among oth-
ers, Mr Hettinga was a member of the Supervisory Board
at EDCC N.V. (2009-2011), Lavide Holding N.V. (2013-2014),
Novisource N.V. (2013-2014) and N.V. Dico International
(2011-2015). In addition to his position at Value8, Mr Het-
tinga is currently a member of the Board of Directors at
Cumulex N.V. and a member of the Supervisory Board at
MKB Nedsense N.V. and IEX Group N.V.
Supervisory Board
Mr R.A.E. de Haze Winkelman
Mr R.A.E. de Haze Winkelman (1954) is a former director
of the Association of Stockholders (1987-1996). He was
worked in various political positions, including parliamen-
tary group chairman in the Provincial Council of South
Holland (VVD) and member of the Upper House (VVD). Mr
de Haze Winkelman studied Business Law and Tax Law at
Leiden University and was deputy head of payroll tax at
the Ministry of Finance prior to his period at VEB. Mr de
Haze Winkelman has extensive expertise and experience
in the field of investments, listed companies, internation-
al financial markets, and corporate governance.
Mr J.P.C. Kerstens
Mr J.P.C. Kerstens (1962) is a former director and CFO of
Endemol (2000-2010). In that position, he was involved
in the IPO (2005) and acquisition (2007) of Endemol. Fur-
thermore, he was, among other things, CFO of Eyeworks
(2012-2016), head of finance at TKH Group N.V., CFO of
Sonesta Hotels, director of Orange Babies and super-
visory director of Eredivisie CV Beheer. He has extensive
expertise and experience in finance, acquisitions, listed
companies, and media. Currently, Mr Kerstens is CFO at
Downtown Music Holdings. Mr Kerstens studied Econom-
ics at the University of Amsterdam.
Retirement schedule
Members of the Supervisory Board
Mr R.A.E. de Haze Winkelman
Appointed on 22 May 2019 for a four-year term by the
General Meeting of Shareholders. The first term runs until
the 2023 General Meeting of Shareholders.
Mr J.P.C. Kerstens
Appointed on 5 September 2019 for a four-year term by
the General Meeting of Shareholders. The first term runs
until the 2023 General Meeting of Shareholders.
VA L U E 8 | A N N UA L R E P O R T 2 0 2 2
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3 3
Members of the Board of Directors
Mr. P.P.F. de Vries
Took office on 24 September 2008. On 4 June 2020, Mr De
Vries was appointed for another four-year term by the
General Meeting of Shareholders. The fourth term expires
in 2024.
Mr. G.P. Hettinga
Took office on 24 September 2008. On 4 June 2020, Mr
Hettinga was appointed for another four-year term by
the General Meeting of Shareholders. The fourth term
expires in 2024.
3 4
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A N N UA L R E P O R T | VA L U E 8
17. Board of Directors’ statement
The Board of Directors declares that, to its knowledge:
· the financial statements, as included in this report, give
a true and fair view of the assets, liabilities, financial
position, and result for the financial year of Value8.
· the management report, as included in this annual
report, gives a true and fair view of the situation on
the balance sheet date, the course of business during
the financial year of Value8. The management report
describes the material risks Value8 faces.
Bussum, the Netherlands, 20 June 2023
Board of Directors
Peter Paul de Vries
Gerben Hettinga
DCF | Discounted Cash Flow valuation method for evaluating an investment by estimating future cash flows, considering the time value of money. |
Earnings per share | Net income attributed to ordinary shares divided by the weighted number of ordinary shares during the financial year. |
Earnings per share before amortisation | Net income attributable to ordinary shares before amortisation divided by the weighted number of ordinary shares during the financial year. |
Diluted earnings per share | Net income divided by the weighted number of ordinary shares during the financial year, assuming that all rights to shares (such as options or convertible bonds) would have been exercised. |
EBIT | Earnings before interest and taxes. |
ECL | Expected credit loss. |
EBITDA | Earnings before interest, taxes, depreciation, and amortisation. |
FTE | Full-time equivalent. A unit of account used to express the size of the number of employees. One FTE represents one staff member with a full working week. |
IFRS | The International Financial Reporting Standards (IFRS) is an accounting standard for annual reports. Since 1 January 2005, listed companies in the EU have been required to report in this manner. |
Net asset value per share | The equity per ordinary share. |
Normalised result | The result before deduction of non-recurring costs and income. |
Operating EBITDA | EBITDA from normal operations. |
Operating profit | EBIT. |
Recurring EBITDA | EBITDA before deduction of non-recurring costs and income. |
Solvency | Equity expressed as a percentage of total assets. |
Total shareholder return (TSR) | The return on equity measured by the change in share price plus the dividend. |
WACC | Weighted average cost of capital. It is a formula by which the average costs of a company's capital are calculated. The cost of debt and the cost of equity are weighted. |
Financial year
Value8’s financial year 2021 ran from 31 December 2020 up to and including 30 December 2021. The financial year 2022 ran from 31 December 2021 up to and including 31 December 2022.
Table of contents
19.1 Financial statements | 39 | ||
19.1.1 Statement of Financial Position | 40 | ||
19.1.2 Income Statement | 41 | ||
19.1.3 Statement of Changes in Equity | 41 | ||
19.1.4 Cash flow statement 2022 | 42 | ||
19.2 Notes to the financial statements | 44 | ||
19.2.1 Value8 basis for reporting | 44 | ||
19.2.2 Tangible fixed assets | 52 | ||
19.2.3 Property investments | |||
19.2.4 Private equity investments | |||
19.2.5 Loans granted to listed investments | |||
19.2.6 Loans granted to others | |||
19.2.7 Options on investments in investment portfolio | |||
19.2.8 Listed investments | |||
19.2.9 Receivables and accruals | |||
19.2.10 Cash | |||
19.2.11 Share capital | |||
19.2.12 Earnings per share | |||
19.2.13 Non-current liabilities | |||
19.2.14 Amounts owed to credit institutions | |||
19.2.15 Loans from related parties | |||
19.2.16 Loans from others | 60 | ||
19.2.17 Trade and other payables | |||
19.2.18 Financial instruments measured at fair value | |||
19.2.19 Contingent liabilities | |||
19.2.20 Risks | |||
19.2.21 Related parties | |||
19.2.22 Events after the balance sheet date | |||
19.2.23 Fair value changes private equity investments | |||
19.2.24 Fair value changes listed investments | |||
19.2.25 Interest loans granted to private equity investments | |||
19.2.26 Interest listed investments | |||
19.2.27 Realised results | |||
19.2.28 Other income (non-recurring) | |||
19.2.29 Dividends | |||
19.2.30 Wages, salaries, and payroll taxes | |||
19.2.31 Other operating expenses | |||
19.2.32 Financial income and expenses | |||
19.2.33 Corporate income taxes | |||
19.2.34 Segmented information | |||
19.2.35 External auditor’s service fees | |||
19.2.36 Proposed appropriation of profit | |||
19.3 Other data | 69 | ||
19.3.1 Statutory provisions on profit appropriation | 69 | ||
19.3.2 Articles of association amended | 69 | ||
19.4 Auditor’s report | 70 | ||
(x € 1,000) | 31-12-2022 | 30-12-2021 | ||
Assets | ||||
Fixed assets | ||||
Tangible fixed assets | 19.2.2 | 434 | 475 | |
Property investments | 19.2.3 | 715 | 715 | |
Private equity investments | 19.2.4 | 18,071 | 40,940 | |
Loans granted to private equity investments | 19.2.4 | 1,549 | 2,270 | |
Loans granted to listed investments | 19.2.5 | 10,473 | 2,263 | |
Loans granted to others | 19.2.6 | 15 | 39 | |
Options listed investments | 19.2.7 | 407 | 7 | |
Listed investments | 19.2.8 | 34,504 | 14,348 | |
Total fixed assets | 66,168 | 61,057 | ||
Current assets | ||||
Loans granted to private equity investments | 19.2.4 | - | 634 | |
Loans granted to listed investments | 19.2.5 | 410 | 410 | |
Listed investments | 19.2.8 | 33,429 | 50,226 | |
Receivables and accruals | 19.2.9 | 98 | 143 | |
Cash | 19.2.10 | 323 | 382 | |
Total current assets | 34,260 | 51,795 | ||
Total assets | 100,428 | 112,852 | ||
Liabilities | |||||
Equity | |||||
Share capital | 19.2.11 | 3,740 | 3,740 | ||
5% Cumulative preference shares | 412 | 383 | |||
Share premium | 36,095 | 36,607 | |||
Share premium 5% cumulative preference shares | 6,948 | 6,465 | |||
Revaluation reserve | 5,829 | 10,277 | |||
Other reserves | 41,403 | 20,195 | |||
Result | - 2,531 | 18,428 | |||
Total equity attributable to shareholders of the company | 91,896 | 96,095 | |||
Long-term liabilities | |||||
Lease and rent liabilities | 19.2.13 | 279 | 334 | ||
Loans from others | 19.2.13 | - | 1,886 | ||
Total long-term liabilities | 279 | 2,220 | |||
Current liabilities | |||||
Current account with credit institutions | 19.2.14 | 2,421 | 4,836 | ||
Loans from related parties | 19.2.15 | 2,179 | 7,834 | ||
Loans from others | 19.2.16 | 2,240 | - | ||
Lease and rent commitments | 19.2.13 | 124 | 113 | ||
Trade and other payables | 19.2.17 | 1,289 | 1,754 | ||
Total current liabilities | 8,253 | 14,537 | |||
Total liabilities | 8,532 | 16,757 | |||
Total equity and liabilities | 100,428 | 112,852 | |||
(x € 1.000) | 2022* | 2021* | ||||
Operating income | ||||||
Fair value changes private equity investments | 19.2.23 | 3,081 | 4,978 | |||
Fair value changes listed investments | 19.2.24 | - 7,666 | 12,572 | |||
ECL charge loans granted to private equity investments | 19.2.4 | - 284 | - 687 | |||
ECL charge loans granted to listed investments | 19.2.5 | - | - 90 | |||
Fair value changes options listed investments | 19.2.7 | - | - 34 | |||
Interest on loans granted to private equity investments | 19.2.25 | 251 | 606 | |||
Interest on loans granted to listed investments | 19.2.26 | 154 | 113 | |||
Interest on loans granted to others | 19.2.6 | 1 | 2 | |||
Realised results private equity investments | 19.2.27 | - | 450 | |||
Realised results listed investments | 19.2.27 | 146 | 1,704 | |||
Other income (non-recurring) | 19.2.28 | 471 | - | |||
Dividends | 19.2.29 | 3,601 | 1,289 | |||
Total operating income | - 245 | 20,903 | ||||
Operating costs | ||||||
Wages, salaries, and payroll taxes | 19.2.30 | 1,024 | 1,004 | |||
Other operating expenses | 19.2.31 | 857 | 923 | |||
Depreciation and amortisation | 19.2.2 | 100 | 56 | |||
Total operating expenses | 1,981 | 1,983 | ||||
Finance income and finance expenses | ||||||
Financial income | 19.2.32 | - | 6 | |||
Financial expenses | 19.2.32 | - 305 | - 498 | |||
Net finance income (expense) | - 305 | - 492 | ||||
Result before tax | - 2,531 | 18,428 | ||||
Income taxes 19.2.33 | - | - | ||||
Result after tax | - 2,531 | 18,428 | ||||
Attributable to: | ||||||
Shareholders of the company | - 2,531 | 18,428 | ||||
Result for the financial year | - 2,531 | 18,428 | ||||
Earnings per share attributable to shareholders | ||||||
Earnings per share attributable to shareholders | 19.2.12 | - 0,29 | 1,87 | |||
Statement of comprehensive income | ||||||
Result for the financial period | - 2,531 | 18,428 | ||||
Total net realised and unrealised results for the financial year | - 2,531 | 18,428 | ||||
Attributable to: | ||||||
Shareholders of the company | - 2,531 | 18,428 | ||||
Total result for the financial year | - 2,531 | 18,428 | ||||
*2022: 31 December 2021 until including 31 December 2022
2021: 31 December 2020 until including 30 December 2021
(x € 1,000) | Share capital | 5% Cumulative | Share premium | Share premium 5% Cumulative | Revaluation reserve | Other reserves | Retained earnings | Total equity |
Balance at 30 December 2020 | 3,740 | 227 | 37,983 | 3,836 | 4,488 | 19,361 | 8,751 | 78,386 |
Changes | ||||||||
Profit appropriation 2019/20 | - | - | - | - | - | 13,250 | - 13,250 | - |
Issue of shares | - | 77 | - | 1,299 | - | - | - | 1,376 |
Changes in revaluations | - | - | - | - | 5,789 | - 5,789 | - | - |
Realised result 2021 | - | - | - | - | - | - | 18,428 | 18,428 |
Dividend in cash | - | - | - | - | - | - 719 | - | - 719 |
Dividend in shares | - | - | - 1,376 | - | - | - | - | - 1,376 |
Reclassification | - | 79 | - | 1,330 | - | - 1,409 | - | - |
Balance at 30 December 2021 | 3,740 | 383 | 36,607 | 6,465 | 10,277 | 20,195 | 18,428 | 96,095 |
Changes | ||||||||
Profit appropriation 2021 | - | - | - | - | - | 18,428 | - 18,428 | - |
Issue of shares | - | 29 | - | 483 | - | - | - | 512 |
Changes in revaluations | - | - | - | - | - 4,448 | 4,448 | - | - |
Realised result 2022 | - | - | - | - | - | - | - 2,531 | - 2,531 |
Dividend in cash | - | - | - | - | - | - 1,613 | - | - 1,613 |
Dividend in shares | - | - | - 512 | - | - | - | - | - 512 |
Transaction under common control | - | - | - | - | - | 1,313 | - | 1,313 |
Purchase of own shares | - | - | - | - | - | - 1,368 | - | - 1,368 |
Balance at 31 December 2022 | 3,740 | 412 | 36,095 | 6,948 | 5,829 | 41,403 | - 2,531 | 91,896 |
The changes in equity in the financial year 2022 include the following non-cash transaction:
(x € 1,000) | 2022 | 2021 | |
Net profit | 19.1.2 | - 2,531 | 18,428 |
Depreciation and amortisation | 19.2.2 | 100 | 56 |
- 2,431 | 18,484 | ||
Adjustments for: | |||
Net finance income (expense) | 19.2.32 | 305 | 492 |
Income taxes | 19.2.33 | - | - |
Fair value changes private equity investments | 19.2.23 | - 3,081 | - 4,978 |
Fair value changes listed investments | 19.2.24 | 7,666 | - 12,573 |
ECL charge loans granted to private equity investments | 19.2.4 | 284 | 687 |
ECL charge loans granted to listed investments | 19.2.5 | - | 90 |
Fair value changes options listed investments | 19.2.7 | - | 35 |
Interest on loans granted to private equity investments | 19.2.25 | - 251 | - 606 |
Interest on loans granted to listed investments | 19.2.26 | - 154 | - 113 |
Interest on loans granted to others | 19.2.6 | - 1 | - 2 |
Private equity investments | 19.2.4 | - 2,050 | - 11,700 |
Private equity divestments | 19.2.4 | - | - |
Loans granted to private equity investments | 19.2.4 | - 57 | - |
Investments in listed interests | 19.2.8 | - 4,799 | - 20,940 |
Divestments in listed interests | 19.2.8 | 9,287 | 10,942 |
Loans granted to listed investments | 19.2.5 | - 125 | - 69 |
Redemptions of loans granted to listed investments | 19.2.5 | - | 402 |
Redemptions of loans granted to private equity investments | 19.2.4 | 300 | 9,365 |
Redemptions of loans granted to others | 19.2.6 | 25 | 35 |
Realised results private equity investments | 19.2.27 | - | - 450 |
Realised results listed investments | 19.2.27 | - 146 | - 1,704 |
Changes in receivables and accruals | 19.2.9 | 44 | 307 |
Changes in trade payables and other payables | 19.2.17 | - 464 | 456 |
Financing income received | 19.2.32 | - | 6 |
Finance costs paid | 19.2.32 | - 131 | - 497 |
Cash flow from operating activities | 4,221 | - 12,331 | |
2022 | 2021 | ||
Cash flow from financing activities: | |||
Dividend payment | 19.1.3 | - 1,613 | - 719 |
Share buy back | 19.1.3 | - | - |
Redemption of borrowed loans | 19.2.16 | - | - 3,900 |
Borrowed loans from related parties | 19.2.15 | - 252 | 9,700 |
Cash flow from financing activities | - 1,865 | 5,081 | |
Net change in cash and cash equivalents | 2,356 | - 7,250 | |
Cash and cash equivalents at 31 December 2021 | 19.1 | - 4,454 | 2,796 |
Cash and cash equivalents on 31 December 2022 (30 December 2021) | 19.1 | - 2,098 | - 4,454 |
Presented as follows in the justification: | |||
Cash and cash equivalents | 323 | 382 | |
Amounts owed to credit institutions | 2,421 | 4,836 | |
- 2,098 | - 4,454 | ||
The cash flow from operating activities cannot be traced euro-for-euro to the amounts in the specifications and statements of changes referred to. The reason is that in those specifications and statements of changes of investments, the changes are reported at book value. During the 2022 financial year, the following non-cash transactions occurred:
19.2.1.1 General
Value8 N.V. (Value8) has its statutory seat in Amsterdam, the Netherlands and has an office in Bussum at Brediusweg 33. Value8 is registered at the Chamber of Commerce with registration number 09048032. Value8 qualifies as an investment company under IFRS. Value8's investments are valued at fair value. Value8's financial year 2022 differs from the calendar year and runs from 31 December 2021 up to and including 31 December 2022. During 2022 Value8 changed the financial year ending at 31 december (instead of 30 december) by adding one day in the financial year 2022. This was changed to be in line (again) with international practice and the financial accounts from our subsidiaries and investments. In the preparation of the financial statements, the 2022 figures are compared with the previous financial year, taken from the unaudited 2021 financial statements. The principal activities of the company are participating in, financing and lending funds to natural and/or legal persons and providing guarantees and/or other securities to third parties for its own obligations and/or for obligations for companies in its investment portfolio. The shares of Value8 are listed on the official market of Euronext Amsterdam.
Business objective
Value8 supports small-cap companies in achieving their growth objectives. Value8 provides venture capital to finance that growth and enables these companies to be listed. As a listed investment company, Value8 makes diversified investing in the small-cap segment accessible to private and institutional investors. Investments are made based on clear investment criteria, with an explicit focus on a positive contribution (directly or indirectly) to social and economic prosperity. The objective is to create long-term shareholder value. Both in absolute and relative terms (better than the benchmark). This objective is pursued with a mitigated risk profile thanks to a spread of activities and a conservative financing structure. Value8 expects to have a higher probability of organic growth and value creation in sectors that may be enhanced by megatrends that offer the prospect of higher growth than gross national product. These megatrends are ageing, a retreating government, quality of life and digitalisation. In this context, five preferred sectors have been defined in the past: healthcare and leisure, dedicated business/financial services, environmental sustainability, food & food safety, and internet & technology. The five preferred sectors are in line with the megatrends:
This sector focus does not exclude other sectors.
19.2.1.2 Significant accounting policies
International Financial Reporting Standards
Value8’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted for use within the European Union (EU-IFRS) and in accordance with Part 9 of Book 2 of the Dutch Civil Code. The accounting policies applied by Value8 are in accordance with IFRS effective 31 December 2022 and interpretations published by the International Financial Reporting Interpretations Committee (IFRIC).
New accounting standards
Value8 has applied the following new and amended IFRS standards and IFRIC interpretations relevant to the Company in 2022, where applicable.
Application of these amended standards ('IFRS 3 Business Combinations - Reference to the Conceptual Framework Amendments', 'IAS 16 Property, Plant & Equipment - Proceeds before Intended Use Amendments', 'IAS 37 Provisions, Contingent Liabilities, Contingent Assets - Onerous Contracts - Cost of Fulfilling a Contract' and 'IFRS 1, IFRS 9, IFRS 16, IAS 41 - Annual Improvements 2018-2020') and interpretations do not have a material effect on Value8's equity and results of operations and disclosures in the financial statements.
The following standards and interpretations were issued on the date of publication of the financial statements but, not yet effective on the financial statements for the year 2022. Listed below are only those standards for which Value8 has a reasonable expectation that, when amended in the future, they will have an impact on Value8’s disclosures, financial position, or results. Value8 will apply these standards and interpretations as soon as they are effective:
of changes in equity and a statement of cash flows.The application of this standard is not expected to have an impact on the financial statements of Value8.
In addition to those mentioned above, standards/ amendments and interpretations have been proposed by the IASB. However, these are not expected to have a material impact on Value8’s financial position and operating results.
Accounting policies used in the preparation of the financial statements
The financial statements are denominated in euros. All amounts are rounded to the nearest thousand, except for amounts per share, unless stated otherwise. The financial statements have been prepared on a historical cost basis except for:
These are measured at fair value.
Value adjustments are recognised through profit and loss. Granted loans are measured at amortised cost in accordance with IFRS 9. The preparation of financial statements in conformity with EU-IFRS requires management to make judgements, estimates and
assumptions that affect the reported values of assets and liabilities and of income and expenses. The estimates and underlying assumptions are based on experience and other factors. The results of the estimates are the basis for the book value of assets and liabilities that are not readily apparent from other sources. Actual outcomes may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are made in the period in which the estimates are revised if the revision affects only that period. Revisions in the reporting period and future periods are made if the revision also has consequences for future periods. More specifically for Value8, estimates and assumptions mainly affect the valuation of private equity investments (investments in unlisted companies) and, to a lesser extent, the valuation of listed companies (if there is an inactive market) and financial instruments (loans and options). The accounting policies set out below have been applied consistently.
The financial statements have been prepared on a going concern basis.
19.2.1.3 Qualifying as an investment company
Value8 qualifies as an investment company. Based on this qualification, Value8 uses the consolidation exemption for investment companies (IFRS 10-31).
Within the Value8 Group, there are no group companies that are not investment companies themselves but that do carry out investment-related activities (IFRS 10-32). De facto, this means that Value8 does not consolidate any group companies. De facto, there is a non-consolidated balance sheet, profit and loss account and cash flow statement. Based on its qualification as an investment company, Value8 values all participations at fair value in the profit and loss account.
19.2.1.4 Foreign currency
Value8's presentation currency is the euro. It is equal to the functional currency. Transactions in foreign currencies are accounted for at the exchange rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate at the balance sheet date. Gains and losses arising from foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Non-monetary items measured at fair value in a foreign currency are translated at the exchange rate prevailing at the date the fair value is determined.
19.2.1.5 Tangible fixed assets
Tangible fixed assets are on the balance sheet at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure directly related to the acquisition of the concerned assets. Subsequent expenditure on repairs and maintenance, for
example, is capitalised only in the following cases:
All other expenses are charged directly to the statement of comprehensive income. Depreciation on tangible fixed assets is charged to the statement of comprehensive income on a straight-line basis. This is done over the estimated lifetime from the time the relevant assets are ready for use. The residual value and lifetime of assets are reviewed annually at the balance sheet date and adjusted as necessary. Gains and losses on the sale of tangible fixed assets are in the statement of comprehensive income under general administrative expenses.
Leases
At the inception of a contract, it is assessed whether a contract is or contains a lease. A contract is or contains a lease if, in exchange for a fee, the contract grants the right to control the use of an identified asset for a specified period of time. On commencement or amendment of a contract containing a lease, the consideration in the contract is attributed to each lease component based on relative stand-alone prices. However, for property leases, the Group has chosen not to separate non-lease components and to account for the lease and non-lease components as one lease component. The Group recognises a right-of-use asset and a lease liability at the effective date of the lease. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, adjusted for lease payments made on or before the effective date, plus initial direct costs incurred and an estimate of the costs of dismantling and removing the underlying asset or restoring the underlying asset or the site on which it is located, less lease incentives received. The right of use is then depreciated using the straight-line method from the effective date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group at the end of the lease term, or the cost of the right of use reflects that the Group will exercise a purchase option. In that case, the right of use is depreciated over the lifetime of the underlying asset, which is determined on the same basis as that of tangible fixed assets. In addition, the right of use is periodically reduced by any impairment losses and adjusted for certain revaluations of the lease liability. The lease liability is initially measured at the present value of the lease payments not paid at the effective date, discounted using the implicit interest rate of the lease or, if it not practical to determine that discount rate the marginal interest rate is used. Typically, the marginal interest rate is used as the discount rate, which Value8 determines by obtaining interest rates from various external funding sources, making certain adjustments to reflect the terms of the lease and the type of
leased asset.
Lease payments included in the measurement of the lease liability include the following:
The lease liability is measured at amortised cost using the effective interest method. It is revalued when there is a change in future lease payments due to a change in an index or rate, when there is a change in the estimate of the amount expected to be paid under a residual value guarantee, when the assessment changes whether a purchase, renewal or termination option will be exercised or when there is a revision of an essentially fixed lease payment. When the lease liability is revalued in this way, a corresponding change is made to the carrying amount of the right-of-use asset or recognised in profit or loss if the carrying amount of the right-of-use asset is reduced to zero.
Value8 presents rights of use that do not meet the definition of property investments under tangibles fixed assets and lease liabilities under 'loans' in the balance sheet. short-term leases (leases with a maximum term of 12 months) and leases of low value assets, user rights and lease liabilities are not included in the balance sheet. Lease payments related to these leases are recognised as an expense on a straight-line basis over the lease term.
19.2.1.6 Property investments
Property investments are accounted for according to the cost model at historical cost less accumulated depreciation and accumulated impairment. Historical cost includes expenditure directly attributable to the acquisition of the property investments. Insofar as there are dismantling obligations, these are included in the cost of the assets. If applicable, future expenses are included in the carrying amount of the asset or recognised as a separate asset, provided that it is probable that the future economic benefits associated with the property investment will accrue to Value8 and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit and loss account in the financial year in which they are incurred. Depreciation is calculated using the straight-line method over the estimated lifetime (25-50 years). Lifetime and residual values are reviewed annually and adjusted if necessary. A property investment that consists of land is not depreciated.
19.2.1.7 Financial assets
Value8 recognises the following financial asset classes:
Value8 follows the International Private Equity and Venture Capital Valuation Guidelines (IPEV Guidelines), which are explained below.
Private equity investments also include associates. Associates are companies in which Value8 exercises significant influence over the financial and operating policies, but over which it does not exercise control. As Value8 is an investment company, these investments are measured at fair value with fair value changes recognised through profit or loss.
Unlisted group companies (based on the IFRS definition) are not consolidated under IFRS 10-31 and are classified under private equity investments. Under IFRS 10-31, unlisted group companies are measured at fair value with fair value changes recognised through profit or loss.
Initially, private equity investments are recognised at cost. After initial recognition, unrealised value changes resulting from periodic revaluation are recognised in the income statement.
Options private equity investments and options listed investments are recognised at fair value with recognition of fair value changes through profit or loss. Loans to portfolio companies (granted loans to private equity investments and loans u/a listed investments) are classified under fixed assets or current assets depending on the maturity of the loan. Presentation is made under fixed assets, except when the maturity date is less than 12 months from the balance sheet date, in which case classification as current assets is made.
Loans to portfolio companies are financial assets with fixed or determinable payments that are not listed in an active market. After the initial recognition, these financial fixed assets are measured at amortised cost using the effective interest method and less any impairment for uncollectibility.
Listed investments include listed group companies and listed non-controlling interests (associates and investments). Listed group companies are not consolidated under IFRS 10-31 and measured at fair value with fair value
changes recognised through profit or loss. Associates classified under listed investments are measured at fair value with fair value changes recognised through profit or loss based on IAS 28-18. Investments classified under listed investments are classified as held for trading and are measured at fair value with fair value changes recognised through profit or loss under IFRS 9. Initially, listed investments are accounted for at cost. After initial recognition, unrealised changes in value resulting from periodic revaluation are recognised in the income statement.
Realised gains or losses on investments are calculated as the difference between the sale price and the carrying amount of the investment at the time of sale.
Determination of fair value
Regarding methods to be used to determine fair values, Value8 follows the International Private Equity and Ventures Capital Valuation Guidelines.
a | Listed investments
The listed investments in Value8's portfolio are traded on a regulated market. A feature of a regulated market is that the closing prices of listed investments are both available and representative of the fair value of the listed investments. In accordance with IFRS 13-B34, listed investments in an active market are valued at the closing price on the valuation date. In principle, for investments in listed companies in an inactive market, the closing price on the balance sheet date is initially used if there are frequent transactions during the reporting year. If there are no frequent transactions during the financial year in an inactive market, a discount is applied to the share price on the balance sheet date.
If there are shares held in a listed investment that are not exchangeable (letter shares), a discount is applied to the share price on the balance sheet date for illiquidity reasons.
Active and inactive market
An active market is one that meets the following criteria:
In an inactive market, a market is not well developed. A market is not well-developed if there are no frequent transactions during the reporting period.
For the determination of market liquidity Value8 considers the following aspects:
b | Private equity investments
Private equity investments in the company's investment portfolio comprise unlisted associates and unlisted investments ('available for sale'). With these investments, there is an intention to dispose of the investment in due course. As these investments relate to unlisted companies (therefore not liquid), these interests are classified as fixed assets. Private equity investments are recognised on a fair value basis with recognition of fair value changes through profit or loss. Given the underlying characteristics of the private equity investments in the investment portfolio (unlisted large, medium and small SMEs), fair value is determined based on the price of a recent transaction (IFRS Level 1) or using a DCF calculation (IFRS Level 3). In exceptional cases, the multiplier method (IFRS Level 3) is used, but only if the underlying characteristic of the investment justifies applying a multiplier method. For investments in which future cash flows are no longer expected, except for the settlement of the company to be liquidated, fair value is determined using the Net Assets method (IFRS Level 3).
Valuation methods
The price of a recent transaction (valuation of private equity investments). When initially accounting for a private equity investment, the transaction price, excluding transaction costs, is used as the fair value of the investment (IFRS 9 - 5.1.1). Specific factors, related to the transaction, are considered to assess whether the transaction price is representative of fair value:
The length of the period during which the most recent transaction price is still representative of the fair value
measurement depends on the specific circumstances of the underlying private equity investment. In stable market conditions with few changes within the company and/or external market conditions, the length of the period in which the recent transaction price can be used is longer than in a period of rapid change. Value8 applies the price of a recent transaction for up to one year after that transaction.
Available market prices (valuation of listed investments)
For listed interests, the closing price on the valuation date is used to determine the fair value of the investment. A precondition is that there is an active market.
The specific elements Value8 includes in the analysis to determine whether there is an active market are:
If Value8 concludes that there is an inactive market, Value8 uses the share price as an indication of fair value whereby a discount is applied to the share price.
Regarding a possible discount on the share price (IFRS Level 2 valuation or IFRS Level 3 valuation derived from the share price), the relevance of the objectively observable input variable (de facto closing price of the identical or comparable share) is first evaluated. If relatively low volumes in relation to outstanding shares (potentially) lead to the conclusion that there is an inactive market, Value8 determines whether frequent transactions take place during the reporting period. If this is the case, the share price is qualified as a reliable indicator for a fair value valuation of identical financial instruments.
With respect to non-identical but comparable financial instruments (lettered unlisted shares of listed investments), the closing price of the comparable financial instrument is used as the basic input variable for fair value measurement. A markdown is applied to this basic input variable depending on the following:
Within the defined bandwidth, the actual exit percentage is used on an estimation basis. The starting point here is a representative exit price between market participants in the current market.
Discounted Cash Flow method (valuation of private equity investments)Under the DCF method, the current fair value is determined by calculating the net present value of the future cash flows of the underlying business (enterprise value). The cash flows and terminal value relate to the underlying activities of the company being valued.
A fair value measurement using an IFRS Level 3 DCF analysis is prepared under the condition that there is uncertainty about cash flows arising from working with estimates rather than known amounts. Cash flow projections are based on reasonable and supportable assumptions representative of management's best estimates of economic conditions over the remaining lifetime of the asset and cash flow projections, as well as the most current and authorised budgets of (local) management.
In the DCF analysis, the forecast cash flows and terminal value are discounted at the weighted average cost rate. Where possible, Value8 uses external input variables for the components determining the weighted average cost rate (risk-free interest rate, industry equity to debt ratio and cyclical sensitivity). The market risk premium and enterprise risk premium are determined using benchmark information, which is common practice in the market in relation to the specific characteristics of the equity investment to be valued. More specifically for the enterprise risk premium, elements such as customer dependency, supplier dependency, management dependency, spread of activities, entry barriers, track record and flexibility are considered.
The enterprise value derived from the DCF is adjusted for the following elements to arrive at the equity value (base valuation):
Multiples (private equity investments)
The multiple valuation technique is appropriate in exceptional cases for the primary valuation of a private equity investment in the investment portfolio. The multiple method is applied if there is a mature company with an identifiable stream of recurring revenue and relatively stable cash flows. In addition, a representative peer group should be composable. Given the composition of the private equity investment portfolio (large companies, medium-sized companies and small SMEs), compiling a representative peer group complex. As such, the multiple method is only used in exceptional cases for the primary valuation. However, the multiple method is used within Value8 as an additional check on the values resulting from the DCF calculations.
Depending on a company's stage of development, sector and geographical location, Value8 uses an EBITDA/EBITA multiplier or a revenue multiplier. In the multiple valuation technique, Value8 considers the following elements:
For companies that have mature recurring revenue with relatively stable cash flows, using an EBITDA multiple is most appropriate.
For companies that already have mature business but do not yet generate stable consistent profits, a revenue multiple is an appropriate multiple to determine enterprise value. The turnover multiple method assumes that a normalised level of profit can be generated based on the level of turnover. This valuation technique is applicable to companies that are running losses, where the assumption is that these losses are temporary and that a normalised level of recurring profit can be established. A valuation based on a turnover multiple can be achieved by using adjusted historical turnover figures combined with a forecast of turnover based on which a sustainable profit margin can be realised.
The validity of multiples used by Value8 is increased by:
Value8 uses multiples derived from current market multiples reflecting the fair value of comparable listed companies or based on comparable current market transactions. Typically, the fair value of Value8's private equity investments will be based on multiples of comparable listed companies.
The fair value measurement takes into account the impact of the liquidity of the interest held. Unlisted private equity interests are less liquid than listed companies. Value8 applies a liquidity discount with respect to the valuation of unlisted interests derived from multiples of listed interests. The final discount percentage depends partly on the size and specific risk of the underlying company.
Net Assets (private equity investments)
The Net Assets method is used to determine fair value only in exceptional cases. Under the Net Assets method, the private equity investment is valued at the visible net asset value of the investment, with the assets and liabilities of the (private equity) investment valued at fair value. This valuation technique is suitable for (private equity) investments where the value depends mainly on the underlying assets rather than income.
In specific cases, Value8 also uses the Net Assets Method for equity investments that do not generate future cash flows because the underlying operations have ceased, and the company only needs to liquidate (wind up) the remaining assets and liabilities.
Comprehensive financial data
With respect to the non-listed investments Value8 emphasises that the valuation is in some cases based on financial data and/or on data which is derived from the regular monthly reports by this companies. Some of the smaller companies have no obligation to publish audited accounts themselves. Although the DCF valuations rely on estimates of future developments and cashflows the financial basis (net cash/net debt) is based on current – and in those cases unaudited – financial data.
Share in listed companies
Due to the increased liquidity and a longer period of higher liquidity the valuation of some listed investments has been changed from level 3 to level 1. This applies to MKB Nedsense, Morefield and IEX Group. We follow IFRS-13 and according to our judgement the share price is the most objective input variable. These changes from level 3 to level 1 are explained in the paragraph 19.2.8 about the mentioned companies.
In some cases, a discount is applied to the actual share price in case there is no active market or with respect to number shares that are not traded on the stock market and can not be converted in a short time frame. These discounts have been calculated and substantiated. For reasons of transparency a sensitivity analysis has been performed. The results of which are shown in these financial statements. With respect to the stakes in IEX Group NV and MKB Nedsense, both listed investments, we emphasise that the financial statements of both companies have not been audited by a PIE-auditor. This is caused by the capacity problem in the Dutch PIE audit market. With respect to MKB Nedsense the valuation on 30 December 2021 was based on the NAV, that is derived from the unaudited financial statements 2021. This aspect is no longer relevant at year end 2022, since the valuation on 31 December 2022 is based on the share price of MKB Nedsense. In case of the valuation of MKB Nedsense per ultimo December, there is no material difference between the application of these two valuation methods (NAV and share price minus discount).
Specific considerations
Indicative bids
Indicative bids are not used separately but are used as supporting information for valuation based on another valuation method.
19.2.1.8 Trade receivables and accruals
Trade receivables and other receivables are initially recognised in the financial statements at fair value and subsequently at amortised cost, using the effective interest method and net of the provision for bad debts. A provision for bad debts is recognised when it is assumed that a receivable or part of a receivable will not be collected. The amount of the provision is determined as the difference between the carrying amount of the receivable and the present value of estimated future cash flows. The addition to the provision is recognised in other operating expenses in the income statement.
19.2.1.9 Cash
Cash consists of cash and bank balances and other demand deposits. Bank overdrafts are included in current liabilities. Cash and cash equivalents are valued at nominal value.
19.2.1.10 Equity Value8
Value8 ordinary shares A and B are classified as equity, as are the 5% cumulative preference shares C. The purchase price of shares buybacks is deducted from other reserves until these shares are cancelled or reissued. The dividend payable to holders of shares is recognised as a liability when the General Meeting of Shareholders approves the dividend proposal.
Provisions are determined based on estimates of future cash outflows from legally enforceable or constructive obligations because of a past event of uncertain timing or amount, which are related to the business activities and for which a reliable estimate can be made.
Other non-current liabilities are measured on initial recognition at fair value less any directly attributable transaction costs. After initial recognition, these liabilities are measured at amortised cost using the effective interest method.
Trade and other payables are initially recognised at fair value and subsequently at amortised cost.
19.2.1.14 Employee benefits
Value8 does not provide old age pension, nor pension for widows, widowers, and orphans nor disability pension.
19.2.1.15 General statement of comprehensive income
Income and expenses are recognised in the year to which they relate.
19.2.1.16 Operating income
Operating income consists mainly of fair value changes in private equity investments and listed investments and realised transaction results on private equity investments and listed investments. Dividends received are recognised as a separate source of income.
Finance income and costs are allocated to the period to which they relate. Interest income is recognised on a time proportion basis using the effective interest method.
The dividend obligation arising from the issue of 5% cumulative preference shares C is recognised under finance expenses.
19.2.1.17 Corporate income tax
Corporate Income tax comprises current and deferred tax. Corporate income tax is recognised in the income statement except to the extent that it relates to items recognised directly in the statement of comprehensive income. In the latter case, the related tax is also recognised directly in the statement of comprehensive income.
Tax due and recoverable for the reporting period consists of income tax on taxable profit, which is calculated using the applicable tax rates. This considers exempt profit components and non-deductible amounts, as well as adjustments to tax for previous financial years. Deferred taxes are recognised for temporary differences between the tax values of assets and liabilities and their carrying amounts in the financial statements. If a deferral would arise on initial recognition in the financial statements of an asset or liability arising from a transaction that affects neither the commercial nor the taxable result, it is not recognised. Deferred taxes are calculated based on enacted tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised, or the deferred tax liability is paid. Deferred tax assets for offsetable losses are capitalised only to the extent that it is probable that offsetting can take place against profits to be realised in future years. Deferred tax assets and liabilities with the same term and with the same tax entity are offset on the balance sheet, to the extent a legal right to offset exists.
19.2.1.18 Earnings per share
Earnings per share attributable to ordinary shareholders is calculated by dividing net income by the weighted average number of shares outstanding during the year. To arrive at diluted earnings per share, the ordinary shares that would have been outstanding if the financial equity instruments - convertible bonds or share options - had been converted into ordinary shares are also included.
19.2.1.19 Cash flow statement
The cash flow statement is prepared using the indirect method. Receipts and payments relating to taxes are included in net cash flow from operating activities. Dividends paid are included under cash flow from financing activities.
This concerns the right of use of the property on Brediusweg 33 in Bussum. The rental agreement can be renewed for a period of five years and runs until June 2026. Up to and including 2020, the costs arising from this rental agreement were recognised as property expenses in the income statement.
Right of use Brediusweg | Total 2022 | |
Balance at 30 December 2021 | ||
Acquisition value | 531 | 531 |
Accumulated depreciation | - 56 | - 56 |
Carrying amount 30 December 2021 | 475 | 475 |
Changes | ||
Investments | 59 | 59 |
Divestments | - | - |
Depreciation | - 100 | - 100 |
Balance sheet as of 31 December 2022 | ||
Acquisition value | 590 | 590 |
Accumulated depreciation | - 156 | - 156 |
Book value | 434 | 434 |
This concerns land positions in the municipality of Gooise Meren, acquired in 2019. Value8 has chosen to value the land at acquisition cost based on the Cost Model. In accordance with IFRS, there is no depreciation on land. There are no known restrictions in the Netherlands Land Registry records (Dutch: Kadaster), nor are there any contractual obligations. Maintenance of € 3 has been carried out in 2022. The Fair Value is deemed to correspond to the purchase price.
Value8 finances companies in the investment portfolio with a loan where appropriate. Value8 monitors the fair value of the private equity investments based on the total asset value of the underlying private equity investment.
The changes in private equity investments are as follows:
31 December 2022 | 30 December 2021 | |||||||
Private equity investments | Equity investment | Loans granted | Total | IFRS Level | Equity investment | Loans | Total | IFRS Level |
Kersten Groep | - | - | - | 15,000 | - | 15,000 | 3 | |
PIDZ Holding | - | - | - | 10,650 | - | 10,650 | 1 | |
AmsterdamGold.com | 5,757 | - | 5,757 | 3 | 5,169 | - | 5,169 | 3 |
Concordia Holding | 5,474 | - | 5,474 | 3 | 4,096 | - | 4,096 | 3 |
BK Group International | 1,696 | 658 | 2,354 | 3 | 2,752 | 634 | 3,386 | 3 |
Skysource Holding | 2,162 | - | 2,162 | 1 | 2,620 | - | 2,620 | 3 |
ICE Groep | 1,400 | - | 1,400 | 1 | - | - | - | |
Other private equity investments | 1,582 | 891 | 2,473 | 1/3 | 653 | 2,270 | 2,923 | 1/3 |
18,071 | 1,549 | 19,620 | 40,940 | 2,904 | 43,844 | |||
The loans granted to private equity investments are valued at amortised cost. Given the specific characteristics of the loans, this corresponds to fair value.
The changes in private equity investments are as follows:
Private equity investments | Balance 30 December 2021 | Investments | Divestment | Revaluation/ Result | Reclassification | Balance 31 December 2022 |
Kersten Groep | 15,000 | - | - 18,779 | 3,779 | - | - |
PIDZ Holding | 10,650 | - | - 10,650 | - | - | - |
AmsterdamGold.com | 5,169 | - | - | 588 | - | 5,757 |
Concordia Holding | 4,096 | - | - | 1,378 | - | 5,474 |
BK Group International | 2,752 | - | - | - 1,056 | - | 1,696 |
Skysource Holding | 2,620 | 1,000 | - | - 1,458 | - | 2,162 |
ICE Groep | - | 1,400 | - | - | - | 1,400 |
Other private equity investments | 653 | - | - 300 | - 150 | 1,379 | 1,582 |
40,940 | 2,400 | - 29,729 | 3,081 | 1,379 | 18,071 |
Value8 owns a 25% stake in Concordia Holding N.V. As of 31 December 2022, this investment is valued at € 5,474 (30 December 2021: € 4,096). For the reporting year 2022, a revaluation of € 1,378 has taken place on this investment. Value8 holds non-voting depositary receipts in Concordia Holding. The liquidity of these depositary receipts is very limited. In addition, Value8 has no controlling interest in Concordia Holding and, with respect to the (financial) disclosure of Concordia Holding, depends on the information provided by the management of Concordia. Apart from the Concordia annual accounts the disclosures are relatively limited. The valuation of the Concordia investment is based on an EBITDA multiple method. An estimate has been made of the EBITDA to be realized in 2023 and the cash and debt items as per 31 December 2022. This estimate is based on the qualitative disclosures in quarterly updates provided by Concordia to its shareholders in 2022 and 2023, the information provided in the AGM of May 24th 2023 and the Concordia annual accounts 2022. A multiple of 4 times EBITDA is applied, with a correction for illiquidity of the shares and a correction for non-voting depository receipts. The discount for illiquidity and the discount for lack of control are both set at 17.5%. This results in a multiple of 2.6 times EBITDA (2021: 2.75 x EBITDA) . Based on this prudent valuation, a revaluation of € 1,378 is booked on the investment Concordia Holding for the reporting year 2022. Concordia’s management has clearly stated that Concordia benefited in 2021 and 2022 from exceptionally good market conditions. The company expects lower profitability in the coming years and aims for an average of 5% pre-tax profit margin (EBT-margin) during an economic cycle, which is substantially lower than the EBT-margin of 9% realized in 2022. Given the uncertainties outlined by Concordia's management regarding the impact of CO2, nitrogen and PFAS on the volumes and the uncertainty about the prices and availability of raw materials, energy and building materials, the prudent valuation applied to the Concordia investment represents the fair value of this investment. The sensitivity to the discounts is as follows. If the two discounts are set at 25% the valuation of the 25% stake drops from € 5,474 to € 4,238. If the two discounts are set at 10% the valuation of the 25% stake increases from € 5,474 K to € 6,809. A sensitivity analysis with respect to the EBITDA-multiple leads to the following results. If an EBITDA-multiple of 5 is applied (instead of 4), the valuation of the 25% stake increases to € 6,916 (+ € 1,442). If an EBITDA-multiple of 3 is applied (instead of 4), the valuation of the 25% stake decreases to € 4,131 (€ -1,343). The table below shows the sensitivity to a 5% change in EBITDA-multiple.
31-12-2022 Sensitivity | Multiple -5% | Multiple +5% |
Concordia Holding | - 282 | 281 |
The changes in loans granted to private equity investments are as follows:
Loans granted to private equity investments | Balance 30 December 2021 | Investments | Reclassification | Revaluation / amortisation | Interest | Balance 31 December 2022 |
BK Group International | 634 | - | - | - | 24 | 658 |
Other private equity investments | 2,270 | 57 | - 1,379 | - 284 | 227 | 891 |
2,904 | 57 | - 1,379 | - 284 | 251 | 1,549 |
The maximum credit risk consists of the carrying amount of the loan balances recognised as of the reporting date. For the majority of the loans granted provided to, collateral was obtained in respect of pledges on the assets of the companies to which financing was granted. The loan to BK Group International
is presented as fixed assets (30 December 2021: current assets). The reclassification relates to a loan component to Buhrs International Group presented as private equity investments as of 30 December 2021.
Additional information loans granted to private equity investments 31 December 2022
Maturity breakdown | Maximum 1 year | 1 to 5 years | Longer than 5 years | Total |
Amount | - | - | 1,549 | 1,549 |
Currency | Euro | Euro | Euro | Euro |
Interest varies between 0 per cent and 6 per cent. In accordance with IFRS 9, provisions are formed on loans granted based on the assessed risk profile and collateral provided.
The valuations of the private equity investments are almost all based on a DCF calculation (Level 3 valuation). The DCF calculations are based on a general Value8 DCF valuation model. The assumptions used in the DCF calculations from the Value8 DCF valuation model are shown below.
The risk-free interest rate used of 3.0% is based on an average forward rate used by Dutch companies following an annual survey by Fernandez and Acin (survey June 2022) of 1.3%. A correction of 1.7% is added to match market conditions per ultimo December 2022. The applied market risk premium is 6.2% and is also based on the annual survey by Fernandez and Acin. The firm-specific risk (cost of equity) was determined using an analysis of weighted identified risk factors (in the range between 0 per cent and 9.19 per cent) and an illiquidity premium of 2 per cent. Firm-specific risk (alpha) was treated as a component of the 'unlevered' cost of equity. The unlevered cost of equity is levered using the capital ratios and the cost of debt (cost of equity levered).
The cost of debt capital after tax is determined based on the financing capacity of the respective company and on observations of comparable companies within the investment portfolio. In addition, the tax deductibility of interest expenses based on the nominal tax rate ('tax shield') is taken into account. With regard to capital ratios, for the purpose of determining the discount rate, the average capital ratio is determined on the basis of a weighted average capital structure of comparable companies in a selected industry (Damodaran database). The WACC resulting from the previous method is used in the calculation of the fair value of the specific company. All DCF valuations distinguish between a forecast period and a 'residual value'. The residual value is calculated based on the 'perpetuity approach'. The cash flow from the last forecast year is treated with a 'terminal growth rate' of 1.2 per cent. Enterprise value is calculated by summing the present value of free cash flows in the forecast period with the present value of the residual value. Shareholder value is calculated by reducing the enterprise value by net debt items, such as granted loans, provisions, deferred tax liabilities and Value8 financings. This amount is then summed with the value of any non-operating assets and cash-like items, such as excess cash.
Cash flow forecasts are based on reasonable and substantiated assumptions made by local management. In preparing the projections, numerical analyses of realised margins and sales trends have been used. The projection period of the DCF models is five years. In the forecast years 2022 to 2025, turnover and margin developments, if applicable, have been estimated per relevant segment. The same applies to operating cost developments in the projection period.
Fair value measurement as of 31 December 2022
The fair value of AmsterdamGold has been determined using the general Value8 DCF valuation methodology. The following determinants were used in the specific valuation of AmsterdamGold.com: Debt/Equity ratio of 88.4%, company-specific risk (alpha) of 5.09% and a cost of debt of 5.9%. Based on the general Value8 DCF valuation methodology, a WACC of 13.67% was used as a resultant in the valuation.
Fair value measurement as of 31 December 2022
The fair value of BK Group International has been determined using the general Value8 DCF valuation methodology. The following determinants were used in the specific valuation of BK Group International: Debt/Equity ratio of 30.3%, company-specific risk (alpha) of 5.96% and a cost of debt of 5.9%. Based on the general Value8 DCF valuation methodology, a WACC of 14.85% was used as a resultant in the valuation.
Fair value measurement as of 31 December 2022
The valuation as of 31 December 2022 is derived from the price of recent transaction in October 2022 when Value8 extended its share in Skysource from 45% to 100% (IFRS level 1). The valuation of the initial stake of 45%, puchased in December 2019, was based on a DCF analysis (IFRS Level 3) per ultimo 2020 and ultimo 2021.
The valuation as of 31 December 2022 of the other recognised interests almost all qualify as an IFRS Level 3 valuation. The interest in ICE Groep B.V. is based on the acquisition price of August 2022. The interest in AA Circular and Pavo Zorghuizen was valued based on a DCF analysis. The Net Assets method was used to value the other non-material private equity interests. This method has been used for investments where no future cash flows can be predicted or for investments that do not generate future cash flows and only the remaining assets and liabilities need to be settled. Accordingly, in this specific situation, the Net Assets method is a representative method for determining fair value.
The DCF valuation models include certain input variables related to revenue growth and WACC. Sensitivities related to these input variables are shown below. If the models had used a 1 percentage point lower/higher sales growth or a 1 percentage point higher/lower WACC, assuming an unchanged cost structure and unchanged investment level, the calculations would have led to the following possible additional value changes.
31-12-2022 Sensitivity | Sales growth -1% | WACC +1% |
AmsterdamGold.com | - 191 | - 404 |
Sales growth +1% | WACC -1% | |
AmsterdamGold.com | 190 | 480 |
30-12-2021 Sensitivity | Sales growth -1% | WACC +1% |
AmsterdamGold.com | - 178 | - 304 |
Sales growth +1% | WACC -1% | |
AmsterdamGold.com | 179 | 368 |
31-12-2022 Sensitivity | Sales growth -1% | WACC +1% |
BK Group International | - 258 | - 124 |
Sales growth +1% | WACC -1% | |
BK Group International | 258 | 144 |
30-12-2021 Sensitivity | Sales growth -1% | WACC +1% |
BK Group International | - 221 | - 336 |
Sales growth +1% | WACC -1% | |
BK Group International | 307 | 264 |
Overview of private equity investments
Private equity investment | City/country | Participation in % 31-12-2022 | Participation in % 30-12-2021 |
Kersten Groep B.V. | Amsterdam, the Netherlands | - | 96% |
PIDZ Holding B.V. | Eindhoven, the Netherlands | - | 60% |
AmsterdamGold.com B.V. | Amsterdam, the Netherlands | 100% | 100% |
Concordia Holding N.V. | Meppel, the Netherlands | 25% | 25% |
BK Group International B.V. | Amsterdam, the Netherlands | 100% | 100% |
ICE Groep B.V. | Breukelen, the Netherlands | 70% | - |
Skysource Holding B.V. Other private equity investments: | Eindhoven, the Netherlands | 100% | 45% |
Keesmakers B.V. | Leiden, Netherlands | - | 43% |
Verveeco B.V. | Rotterdam, the Netherlands | 100% | 100% |
AA Circular B.V. | Rijsenhout, the Netherlands | 65% | 65% |
Blue Print Group B.V. | Nieuwegein, the Netherlands | - | 13% |
PAVO Zorghuizen B.V. | Tienray, the Netherlands | 100% | 100% |
DS Petcare B.V. | Amsterdam, the Netherlands | 100% | 100% |
Buhrs International Group B.V. | Amsterdam, the Netherlands | 100% | 100% |
Portan N.V. | Amsterdam, the Netherlands | 100% | 100% |
Kersten Healthcare B.V. | Amsterdam, the Netherlands | 85% | 85% |
The statement in accordance with Article 2:379 of the Dutch Civil Code has been filed with the Chamber of Commerce.
After refinancing at the end of 2020 and redemptions in 2021 by IEX Group, a balance of € 410 remains. Redemption and interest payments are linked to the sale of properties in Hungary.
Loans granted to listed investments | 31-12-2022 | 30-12-2021 |
IEX Group N.V. | 410 | 410 |
Cumulex N.V. | 381 | 291 |
Morefield Group N.V. | 10,092 | 1,972 |
10,883 | 2,673 |
The loans granted to listed investments are valued at amortised cost. Given the specific characteristics of the loans, this corresponds to fair value. The loan granted to IEX Group N.V. of € 410 has been fully redeemed in January 2023.
Additional information loans granted to listed investments 31 December 2022
Maturity breakdown | Maximum 1 year | 1 to 5 years | Longer than 5 years | Total |
Amount | 410 | - | 10,473 | 10,883 |
Currency | Euro | Euro | Euro | Euro |
Interest varies between 0 per cent and 6 percent.
In November 2022 Value8 transferred its share in Kersten Groep B.V. to Morefield Group N.V. The total transaction price of € 22,800 was settled by Morefield in issue of 42 million shares, 2 warrants for total 16 million potential purchase of Morefield shares and a 2.5% bullet loan of
€ 10,640 with a maturity of 6 years. Initial measurement at fair value of the 42 million Morefield shares received was
€ 11,760. Initial measurement at fair value of the non-recourse bullet loan was € 7,932. Initial measurement at fair value of the warrants was € 400. The fair value of Kersten Groep B.V. at transaction date was € 18,779. As a result of this transaction under common control € 1,313 is recognized in equity in other reserves.
Also included in the receivable from Morefield Group N.V. are the granted equity loans with indefinite maturity and interest rate partly 6% and partly 6-month Euribor + 3%. During the term of the loans, repayment of the outstanding balance by Morefield is not mandatory. Morefield is required to pay the interest annually in arrears but can unilaterally decide not to pay the interest due and add it to the principal. Until the principal and outstanding interest are paid, Morefield is not entitled to pay dividends to its shareholders without Value8's approval.
In the reporting period, additional funding increased the loan by € 90.
The statement of changes in loans granted to listed investments is as follows:
Loans granted to listed investments | Balance 30 December 2021 | Investments | Interest | Balance |
IEX Group N.V. | 410 | - | - | 410 |
Morefield Group N.V. | 1,972 | 7,966 | 154 | 10,092 |
Cumulex N.V. | 291 | 90 | - | 381 |
2,673 | 8,056 | 154 | 10,883 |
The loans receivable relates to a loan granted to a private person as part of a share transaction. € 15 remained at the end of December 2022 after repayment of € 25.
Additional information on loans granted to others on 31 December 2022:
Maturity breakdown | Maximum 1 year | 1 to 5 years | Longer than 5 years | Total |
Amount | 15 | - | - | 15 |
Currency | Euro | Euro | Euro | Euro |
These concern 16 million warrants Morefield Group shares (2x 8 million) and 46,145 warrants IEX shares. The warrants were valued at 31 December 2022 based on the Black-Scholes option pricing model. The assumptions used in the Black-Scholes model: the closing price of Morefield Group and IEX B-shares on 31 December 2022 and a risk-free rate of 2.5% (10-year interest rates on government bonds). An expected volatility of 20.4% has been used, partly determined on the basis of a recent average volatility of (small cap) exchange funds at Euronext Amsterdam.
Listed investments | 31-12-2022 | IFRS Level | 30-12-2021 | IFRS Level |
Fixed financial assets | ||||
MKB Nedsense N.V. *1* | 5,850 | 1/3 | 5,378 | 3 |
IEX Group N.V. *2* | 2,277 | 1 | 2,879 | 3 |
Morefield Group N.V. *3* | 15,177 | 1/3 | 2,105 | 3 |
Almunda Professionals N.V. *4* | 10,450 | 1/3 | 3,236 | 1 |
Cumulex N.V. *5* | 750 | 3 | 750 | 3 |
Current financial assets | ||||
Other listed interests *6* | 33,429 | 1 | 50,226 | 1 |
Fixed assets | 67,933 34,504 | 64,574 14,348 | ||
Current assets | 33,429 | 50,226 | ||
67,933 | 64,574 |
*1* Due to the liquidity of the listed B-shares of MKB Nedsense these are now valued at the share price (level 1). The unlisted A shares of MKB Nedsense are valued at the stock price minus a discount of 30% (2021: not applicable). This valuation is supported by the net asset value per MKB Nedsense share which is close to this valuation. Per 30 December 2021 the shares of MKB Nedsense were valued at NAV per share.
*2* IEX Group: liquidity in trading of B-shares IEX Group again increased significantly in 2022. At 31 December 2022, the listed IEX B-shares were therefore valued based on the share price without applying a discount (2021: 2%). Value8 acquired unlisted shares A IEX in addition to listed B-shares from the refinancing of IEX at year-end 2020. Due to additional conditions agreed upon, these shares are as liquid as B shares and therefore valued at the share price as of 31 December 2022.
*3* Due to the liquidity of the listed B-shares of Morefield Group these are now valued at the share price (level 1). The non listed A shares of Morefield Group are valued at the price of the Kersten transaction between Value8 and Morefield (€ 0.28 per share). On September 15th the AGM of Morefield approved the Kersten transaction. On November 9th 2022 this transaction was finalized. As large part of the acquisition price was paid in shares at a share price of € 0.28. At the time of the AGM the share prices was € 0.35. Therefore the € 0.28 of the transaction was a discount of 20% to the actual share price at that moment. Given the substantial increase in the number of outstanding shares at € 0.28 a decrease of the share price was expected. Per 30 December 2021, the shares of Morefield Group were valued at NAV.
*4* The listed Almunda Professionals B-shares are valued at
share price. The non listed A-shares are valued at the share price with a discount of 22,4% (2021: not applicable). The discount of the non listed A shares is based on the share price used to determine the stock dividend in 2022.
*5* For Cumulex, a discount was applied to the share price at the end of 2022 (IFRS Level 3) due to the inactive market. The applied discount is 32% (2021: 48%). The value based on the share price as of 31 December 2022 is € 0.92 million.
*6*A large part of the assets are invested in other listed securities. These are liquid to highly liquid. The size of this securities portfolio at the share price on 31 December 2022 was € 33,797. Renewi (€ 12,796) and Ctac (€ 13,368) are the largest listed investments in terms of value. Regarding one of the other investments (TABS Holland), a discount was applied to the share price because of the limited number of trades in this share (Level 3).
Sensitivity analysis discounted shares (level 3) | Discount | Discount + 5% |
MKB Nedsense N.V. | 337 | - 337 |
Morefield Group N.V. | 801 | - 801 |
Almunda Professionals N.V. | 249 | - 249 |
Cumulex N.V. | 55 | - 55 |
Other listed investments | 123 | - 123 |
If no discounts would have been applied on shares of listed companies, the equity of Value8 would be 5.8 million euro higher.
The statement of changes in listed investments is as follows:
Balance 30 December 2021 | Investments | Divestments | Revaluation / transaction result | Level 3 to level 1 valuation result | Balance | |
MKB Nedsense N.V. | 5,378 | - | - | - | 472 | 5,850 |
IEX Group N.V. | 2,879 | - | - 8 | - 697 | - 103 | 2,277 |
Morefield Group N.V. | 2,105 | 11,766 | - 1,342 | - | 2,648 | 15,177 |
Almunda Professionals N.V. | 3,236 | 5,950 | - 150 | 1,414 | - | 10,450 |
Cumulex N.V. | 750 | - | - | - | - | 750 |
Other listed interests & securities held | 50,226 | 4,793 | - 9,025 | - 12,565 | - | 33,429 |
64,574 | 22,509 | - 10,525 | - 11,642 | 3,017 | 67,933 |
With regard to investments and divestments, the following non-cash transactions occurred in 2022:
Listed investments | City/country | Participation in % 31-12-2022 | Participation in % 30-12-2021 |
MKB Nedsense N.V. | Amsterdam, the Netherlands | 60% | 60% |
IEX Group N.V. | Amsterdam, the Netherlands | 37% | 37% |
Morefield Group N.V. | Willemstad, Curaçao | 87% | 84% |
Cumulex N.V. | Diegem, Belgium | 76% | 76% |
Almunda Professionals N.V. | Nieuwegein, the Netherlands | 48% | 24% |
Ctac N.V. | ‘s Hertogenbosch, the Netherlands | 29% | 27% |
MKB Nedsense N.V. holds the following interests:
MKB Nedsense interests | City/country | Participation in % 31-12-2022 | Participation in % 30-12-2021 |
Private equity investment | |||
Axess Group B.V. | Amsterdam, the Netherlands | 100% | 100% |
GNS Brinkman B.V. | Amsterdam, the Netherlands | 100% | 100% |
Other interests | |||
Almunda Professionals N.V. | Nieuwegein, the Netherlands | 13% | - |
Value8 Tech Services B.V. | Amsterdam, the Netherlands | 100% | 100% |
Value8 Tech Group N.V. (excluding associates) | Amsterdam, the Netherlands | 100% | 100% |
All receivables and accruals have a maturity of less than one year. The maximum credit risk consists of the carrying amount of receivables and accruals recognised as of the reporting date.
Cash consists of the credit balances in bank accounts. The cash balance is fully at free disposal. The maximum credit risk consists of the carrying amount of cash and cash equivalents recognised as of the reporting date.
Value8's authorised capital as of 31 December 2022 amounts to € 7,280 and consists of 2,800,000 A shares (nominal €0.35), 14,000,000 B shares (nominal €0.35) and 1,000,000 cumulative financing preference shares C (nominal €0.35).
A and B shares have the same rights, with B shares being listed on Euronext Amsterdam.
The revaluation reserve is restricted and not distributable.
The preference C shares have a base value of €6.25 and have a dividend percentage of 5%.
Value8 has committed not to redeem the preference shares for at least five years (and therefore not to redeem them until 17 June 2025).
As of 31 December 2022:
As of 30 December 2021:
As of 31 December 2022, the company has 1,081,905 treasury B-shares in its portfolio. This leaves 9,603,887 B-shares outstanding with third parties. As of 31 December 2022, 1,177,649 cumulative preference shares C have been issued. As of 31 December 2022, Value8 has 380,320 treasury shares C in portfolio. This leaves 797,329 cumulative preference C shares outstanding with third parties.
The calculation of earnings per share for 2022 is based on the result attributable to B-shareholders of € - 2,531
(2021: € 18,189) and the average number of outstanding shares for 2022 of 9,713,058 (2021: 9,730,387). In determining the result attributable to shareholders B, the 5% cumulative preference dividend C shares payable has been considered. Earnings per share 2022 is € - 0.29 (2021: € 1.87). Diluted earnings per share equals earnings per share as there are no exercisable rights to Value8’s shares.
Non-current liabilities | 31-12-2022 | 30-12-2021 |
Lease obligation rental Brediusweg | 279 | 334 |
Loans outstanding | - | 1,886 |
Total non-current liabilities | 279 | 2,220 |
At year-end 2022, long-term liabilities include the lease obligation for the office building at 33 Brediusweg in Bussum. The agreement runs until June 2026. The part of the lease obligation payable within one year at the amount of € 124 (2021: € 113) , is presented in current liabilities.
This is the debit balance at the end of 2022 in Value8 investment account with Saxo Bank N.V.
Loans from related parties | 31-12-2022 | 30-12-2021 |
MKB Nedsense N.V. | 2,179 | 2,302 |
Almunda Professionals N.V. | - | 4,771 |
AmsterdamGold.com B.V. | - | 761 |
2,179 | 7,834 |
Early January 2022, Value8 settled the loan received from Almunda Professionals as part of the transfer of PIDZ Holding B.V. from Value8 to Almunda Professionals for € 10,650. € 71 was redeemed in cash by Value8 to Almunda Professionals. For the remainder of € 5,950 Almunda Professionals issued 5,950 thousand shares to Value8.
During 2022 Valued repaid € 182 in cash on the current account financing by MKB Nedsense. The € 2,179 loan, with a principal amount of € 2,300 will be repaid within ten business days upon first request by MKB Nedsense, initially no later than 31 December 2022. MKB Nedsense approved the one-year extension of the term at Value8's request. The interest payable is 12-month Euribor +3%. Interest is due, in arrears, per annum on 31 December. As long as the interest is not due, it will not bear interest itself.
The loan received from AmsterdamGold.com B.V. has been settled with the distributed dividend by AmsterdamGold.com to Value8 in accordance with the shareholder resolution of early February 2022.
Loans from others | 31-12-2022 | 30-12-2021 |
Loans outstanding | 2,240 | - |
Total loans from others | 2,240 | - |
Other liabilities | 31-12-2022 | 30-12-2021 |
Creditors | 191 | 656 |
Accrued liabilities | 1,098 | 1,098 |
1,289 | 1,754 |
Other payables and accruals have a maturity of less than one year.
In the specifications of the private equity investments, loans granted to, listed investments and options included above, the manner in which the relevant interest has been valued (IFRS Level 1, 2 or 3) is indicated.
The specifications of the private equity investments, loans granted to others, listed investments and options included above show how the relevant interest has been valued. In the case of investments where no future cash flows are expected, other than settlement of the company, the equity value (Net Assets method) is considered representative of fair value (Level 3 valuation). The fair value measurements as of 31 December 2022 were predominantly valued on a DCF (Level 3) calculation basis. For investments in businesses without significant operations or in the intended wind-down of operations, Net Asset Value (Level 3) has been used.
Loans granted to others are fixed financial assets with fixed or determinable market payments that are not valued in an active market. After initial recognition at cost (fair value at initial recognition), the loans valued at amortised cost less any write-downs where there are doubts about the
collectability of the loan. Due to the fixed or determinable market loan terms, the amortised cost of the loans is equal to the fair value. For a further explanation of the fair value of the loans, please refer to sections 19.2.4, 19.2.5 and 19.2.6. The loans granted to Morefield Group, IEX Group and Cumulex have fixed or determinable market loan conditions. Accordingly, the amortised cost of the loans is equal to the fair value (see also section 19.2.5).
Options on shares in (listed) companies are valued based on a Black-Scholes model using an observable input variable (Level 2 valuation). Options on shares in private equity companies are valued based on a Black-Scholes model using an input variable based on a DCF calculation (Level 3 valuation).
In the case of listed investments in an active market, the share price on the balance sheet date is used for valuation (Level 1). In the case of listed companies in an inactive market, if there are frequent transactions during the year under review, in principle the share price on the balance sheet date is used for the initial valuation (Level 3 valuation). If there are no frequent transactions in an inactive market during the financial year a discount is applied to the share price on the balance sheet date (Level 3 valuation). In the case of shares held in a listed company that are not tradable on the stock exchange (letter shares), a discount is applied to the share price on the balance sheet date for illiquidity reasons (Level 3 valuation). Further disclosure regarding level 1 and level 3 valuation of listed investments is also provided in paragragh 19.2.8 and in paragraph 19.2.18.5 regarding level 3 private equity investment and listed investments & securities.
Private equity investments | Level 1 | Level 3 | 31 December 2022 Total | Level 1 | Level 3 | 30 December 2021 Total |
Kersten Groep B.V. | - | - | - | - | 15,000 | 15,000 |
PIDZ Holding B.V | - | - | - | 10,650 | - | 10,650 |
AmsterdamGold.com B.V. | - | 5,757 | 5,757 | - | 5,169 | 5,169 |
Concordia Holding N.V. | - | 5,474 | 5,474 | - | 4,096 | 4,096 |
BK Group International B.V. | - | 1,696 | 1,696 | - | 2,752 | 2,752 |
Skysource Holding B.V. | 2,162 | - | 2,162 | - | 2,620 | 2,620 |
ICE Groep B.V. | 1,400 | - | 1,400 | - | - | - |
Other private equity investments | 82 | 1,500 | 1,582 | 1,582 | - 929 | 653 |
3,644 | 14,427 | 18,071 | 12,532 | 28,408 | 40,940 |
Listed investments & securities | Level 1 | Level 3 | 31 December 2022 Total | Level 1 | Level 3 | 30 December 2021 Total |
Almunda Professionals N.V. | 6,589 | 3,861 | 10,450 | 3,236 | - | 3,236 |
Morefield Group N.V. | 974 | 14,203 | 15,177 | - | 2,105 | 2,105 |
IEX Group N.V. | 2,277 | - | 2,277 | 2,350 | 529 | 2,879 |
MKB Nedsense N.V. | 1,137 | 4,713 | 5,850 | - | 5,378 | 5,378 |
Cumulex N.V. | - | 750 | 750 | - | 750 | 750 |
Other listed securities | 31,466 | 1,963 | 33,429 | 47,514 | 2,712 | 50,226 |
42,443 | 25,490 | 67,933 | 53,100 | 11,474 | 64,574 |
Level 3 Private equity investments & listed investments / securities | 30 December 2021 | reclassifications (to level 3) | Investments | Divestments | Fair value changes | 31 December 2022 Total |
Private equity investments | 28,408 | 2,879 | 1,000 | - 18,779 | 3,081 | 16,589 |
Listed investments & securities | 11,474 | - 2,639 | 15,627 | - | 1,028 | 25,490 |
39,882 | 240 | 16,627 | - 18,779 | 4,109 | 42,079 |
The IFRS level 3 transfers of € 2.879 regarding private equity investments concerns the valuation of AA Circular (IFRS Level 1 on 30 December 2021) and Buhrs International Group (IFRS Level 3 on 30 December 2021). The valuation of AA Circular on 30 December 2021 is based on the price of recent transaction (€ 1,500) being IFRS Level 1. Valuation per 31 December 2022 is qualified as an IFRS Level 3 valuation. The valuation of Buhrs at 30 December 2021 amounted to € - 1,379 being the net asset value (IFRS Level 3). As at 31 December 2022, the negative net asset value of Buhrs has been offset with the outstanding loan to Buhrs. the total valuation Buhrs is nihil. The reclassification from the negative net asset value to nihil valuation qualifies as an IFRS 13 transfer. The IFRS level 3 transfers of € 2.639 regarding Listed Investments concerns the valuation of listed B shares Morefield (IFRS Level 1: 31 December 2022 and IFRS Level 3: 30 December 2021), non listed A shares IEX (IFRS Level 1: 31 December 2022 and IFRS Level 3: 30 December 2021) and listed B shares MKB Nedense (IFRS Level 1: 31 December 2022 and IFRS Level 3: 30 December 2021).
For the valuation of the Morefield shares (both the listed B shares and the unlisted A shares), the used valuation method on 30 December 2021 is the net asset value (IFRS Level 3). As of 31 December 2022, the listed B shares of Morefield are valued at the stock price (IFRS Level 1). The adjusted valuation technique for the listed B shares Morefield is part of the IFRS 13 reclassification.
The unlisted IEX A shares are valued on 30 December 2021 at the stock price with a discount (IFRS Level 3). Because the unlisted A shares IEX can be converted into listed B shares in a relatively short period of time, the valuation as of 31
December 2022 of the unlisted A shares is based on the stock price. The adjusted valuation technique for the non listed A shares IEX is part of the IFRS 13 reclassification.
For the valuation of the MKB Nedsense shares (both the listed B shares and the unlisted A shares), the used valuation method on 30 December 2021 is the net asset value (IFRS Level 3). As of 31 December 2022, the listed B shares of MKB Nedsense are valued at the stock price (IFRS Level 1). The adjusted valuation technique for the listed B shares MKB Nedsense is part of the IFRS 13 reclassification.
The company has granted, as part of the purchase of the 70% share in ICE Group B.V., a put option. In the case ICE Group B.V. exceeds the 2021 EBIT threshold of € 800, and the EBIT threshold of 2022 of € 1,000 and the 2023 EBIT threshold of € 1,200 , Value8 will purchase the remaining 30% of the shares based on the amount of 5 times the average EBITs over the periods 2021 until including 2023 (enterprise value). EBIT contributions of add-ons will be excluded from the EBIT threshold calculations and the shares should not have not been alienated to a third party.
Value8 – like any company – is exposed to risks. The increasing complexity of society and of the investment projects Value8 is involved in, as well as changing laws and regulations, force Value8 to be significantly risk aware. Risk management is the process of identifying, evaluating,
controlling, and communicating risks from an integrated and organisation-wide perspective. It is a continuous process, if only because timeliness and acting in changing circumstances demand it. This section describes the risks Value8 faces as an investment company, as well as the operational and financial risks associated with Value8’s investment activities. Value8 is convinced that risk management is a necessary part of sound governance and the development of a sustainable business. Through its risk management and through an appropriate balance between risks and returns, Value8 aims to maximise business success and shareholder value. Optimal risk management should also contribute to achieving the strategic objectives, optimising operational business processes in terms of effectiveness and efficiency, increasing the reliability of financial reporting and monitoring operations in accordance with laws, regulations, and the Code of Conduct. The following is the description of the risk factors considered most important to which Value8 is subject. The order of the
risks described is arbitrary.
The fluctuations in the economic cycle, just like all other risks to which Value8’s portfolio companies are subject, have a potential impact on the results of the private equity investments and the listed investments and therefore also on the valuation of the private equity investments and the listed investments on Value8’s balance sheet. Because Value8 has a highly differentiated portfolio, spread across different investments with activities in various sectors, the impact of fluctuations in the economic cycle tends to be very different.
The value of the listed part of the portfolio depends directly on the relevant stock market prices and their fluctuations. In addition, the valuation of the unlisted private equity valuations under IFRS may depend on several market-related elements. However, the volatility of these market developments does not reflect necessarily the performance of the relevant investment. This means that the unrealised revaluations in the unlisted Value8 portfolio, and consequently Value8’s result, may also be determined to a significant extent by market developments.
Value8 operates in a competitive market characterised by both local and international private equity players and a rapidly changing competitive landscape. Value8’s success is largely determined by its ability to hold its own in a highly competitive and differentiating position.
Value8’s portfolio partly consists of private equity investments that are unlisted and, as a result, less liquid. The realisation of unrealised revaluations on private investments is uncertain, can take quite some time and is sometimes legally or contractually restricted during certain periods (lock-up, standstill, closed period). It also depends, among other things, on the development of the results of the investment in question, on the business cycle in general, on the availability of buyers and financing and on the possibility of IPOs. The illiquidity of its assets accordingly entails a risk for Value8’s results and cash flow generation.
The focus in managing liquidity risk is on the net financing headroom, consisting of free available cash in relation to financial liabilities.
Value8 has a number of funding sources at its disposal, including dividend payments by companies from the investment portfolio, repayment of debt by companies from the investment portfolio to Value8, interest payments on loans provided by Value8 to private equity investments and/or listed investments, full or partial sale of investments, issuance of ordinary shares or preference shares, attracting (re)financing by Value8 and/or (re)financing of companies in the investment portfolio. As a result, the board considers the liquidity risk to be limited.
Credit risk is the risk of financial loss to Value8 if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Value8’s exposure to credit risk is mainly determined by the individual characteristics of individual debtors. To determine whether a significant increase in credit risk or an impairment has occurred Value8 takes into account various factors, including financial or economic conditions of the debtor, adverse changes in its business circumstances, contract defaults, covenant breaches, waivers or amendments and past-due information. With respect to financial instruments measured at fair value, credit risk is discounted in the fair value measurement. Loans are granted to parties that are initially subject to a creditworthiness check. Write-offs were made on the loans granted in the past. Adequate provisions are expected to be recognised on the loans recognised as of the reporting date. Cash and cash equivalents have been placed with credit institutions with at least a credit rating of A. The other asset items under loans and receivables have been recognised at amortised cost which, given the short maturity, is almost equal to the face value. Below tables combine both loans granted to private equity investments and listed investments and do not have a public credit rating.
Loans granted | Amortized costs | Loss allowance until 30 December 2020 | Loss allowance 2021 | Carrying amount 30 December 2021 |
Loans | 9,119 | 2,726 | 777 | 5,616 |
Loans granted | Amortized costs | Loss allowance until 30 December 2021 | Loss allowance 2022 | Carrying amount 31 December 2022 |
Loans | 16,234 | 3,503 | 284 | 12,447 |
Loss allowance | 2022 | 2021 |
Loss allowance 31 December 2021 (2020) | 3,503 | 2,726 |
Changes 2022, stage 1 | - | - |
Changes 2022, stage 2 | 146 | 663 |
Changes 2022, stage 3 | 138 | 114 |
Financial assets purchased credit impaired | - | - |
Loss allowance 31 December 2022 (2021) | 3,787 | 3,503 |
Value8 considers a loan at default in case no foreseeable future redemptions are expected. The increase in loans granted relates to the loan to Morefield resulting from the transfer of Kersten Groep (paragraph 19.2.5.2).
The risk due to changing interest rates for Value8 is limited as Value8 is only to a small extent financed by debt. A 1 per cent decrease in interest rates would not result in a material change in results or equity. The same applies to a 1 per cent increase in interest rates. The interest rate risk for portfolio companies is discounted in the WACC and as such included in the sensitivity analyses (paragraph 19.2.4.7).
Value8 relies significantly on the experience, commitment, reputation, deal-making skills and network of its directors and senior staff to achieve its objectives. Human capital is a very important asset for the company. The departure of directors and senior employees may therefore have a negative impact on Value8's operations and results.
At Value8, equity qualifies as capital. The company aims to use most of the retained reserves for investments in the context of organic growth and acquisitions. The company is not subject to external requirements regarding the capital to be held.
Value8's related parties are the companies that are part of Value8's investment portfolio, the members of the Supervisory Board and the members of the Executive Board. 3L Capital Holding B.V. also qualifies as a related party.
As of 31 December 2022, Value8 has granted loans of
€ 12,432 (as of 30 December 2021: € 5,577) to investments that are part of Value8's investment portfolio. In principle a market-based interest rate is charged on the loans. See section 19.2.5.2 and 19.2.15. Mr Hettinga is a member of the Supervisory Board of MKB Nedsense N.V. and of Portan N.V. and IEX Group N.V. For the remuneration of these supervisory directorships and board positions, please refer to these companies. In 2022, Value8 had transactions with Almunda Professionals N.V. and with Morefield Group N.V. Value8 transferred its share in PIDZ Holding B.V. to Almunda Professionals N.V. and transferred it share in Kersten Groep B.V. to Morefield Group N.V. These transactions are further explained in section 19.2.5.2. and 19.2.15.
Mr De Vries is a member of the Supervisory Board of MKB Nedsense N.V. and of Almunda Professionals N.V. and IEX Group N.V. For the remuneration of these supervisory directorships and board positions, please refer to these companies.
The remuneration of the members of the Supervisory Board is independent of the company's results. The number of Supervisory Board members at the end of 2022 is 2 (2021: 2).
Supervisory Board:
The total remuneration of the Supervisory Board amounts to € 45 for the reporting period 2022 (2021: € 45). The remuneration of the Board of Directors is presented below.
Periodic income 2022 | One-off reward | Profit sharing and bonus scheme | 2022 | 2021 | |
Drs P.P.F. de Vries | € 226.87 | - | € 40.00 | € 266.87 | € 254.16 |
Drs G.P. Hettinga | € 147.39 | - | € 25.00 | € 172.39 | € 164.18 |
Mr De Vries and Mr Hettinga were initially appointed as directors on 24 September 2008 and renominated in periods of four years each time, most recently on 4 June 2020 for another period of four years. In accordance with the remuneration policy approved by the General Meeting of Shareholders on 28 June 2022, the fixed remuneration is adjusted periodically – that is: annually. In 2022, the fixed remuneration increased by 5%. Mr De Vries holds 4,029,500 B Value8 shares on 31 December 2022 through 3L Capital Holding (2021: 4,029,500). Mr Hettinga holds 16,200 Value8 shares and Mr De Haze Winkelman 20,000. Regarding cumulative preference shares, the numbers are 110,280, 0 and 1,138 respectively. Within Value8, 'key personnel' consists of the members of the Executive Board and the Supervisory Board. For the remuneration policy, please refer to chapter 9 of the annual report.The annual change in remuneration over the least five years, the development of the performance and the average remuneration, is presented in below table.
2022 | 2021 | 2020 | 2019 | 2018 | |
Board remuneration | 439 | 418 | 402 | 401 | 492 |
Number of directors | 2 | 2 | 2 | 2 | 2.5 |
Remuneration mr De Vries | 267 | 254 | 244 | 244 | 235 |
Annual change | 5% | 4% | 0% | 4% | - |
Remuneration mr Hettinga | 172 | 164 | 158 | 157 | 151 |
Annual change | 5% | 4% | 0% | 4% | - |
Staff payroll excluding Board FTE | 764 6,8 | 718 6,8 | 754 7,8 | 788 6,6 | 676 6,0 |
Average wage costs excluding Board | 87 | 81 | 88 | 96 | 87 |
Pay ratio Board versus staff | 2.5 | 2.6 | 2.3 | 2.1 | 2.2 |
Sharehoulders equity | 91,896 | 96,095 | 78,386 | 71,325 | 72,212 |
Dividend per share | 0.18 | 0.17 | 0.16 | 0.45 | 1.20 |
Other comments:
According to the AFM registers, the following disclosures of an interest of more than 3 per cent in the company’s share capital were known as of the date of the annual report:
3L Capital Holding B.V. (P.P.F. de Vries)
35.13 per cent (notification as of 20 September 2021)
J.P. Visser
25.61 per cent (notification as of 19 March 2020)
The actual percentages within the legal disclosure bandwidth may have since changed since the last disclosure to the AFM register regarding substantial holdings and gross short positions.
The company announced on April 3, 2023 that it has acquired a 31% interest in Dealsuite B.V. Dealsuite is the European market leader for online matching and mediation in the purchase and sale of Small and Medium Entities (SMEs) in Europe. The investment amounts to more than €3 million and will be used to finance the growth of Dealsuite.
On June 7, 2023, the court ruled in summary proceedings relating to the Novisource vendor loan. As a result the vendor loan will be repaid earlier than June 2024 (paragraph 19.2.16). The ruling has no material financial impact.
Fair value changes private equity investments | 2022 | 2021 |
Kersten Groep B.V. | 3,779 | 3,399 |
AmsterdamGold.com B.V. | 588 | 990 |
BK Group International B.V. | - 1,056 | 32 |
Skysource Holding B.V. | - 1,458 | 22 |
Other private equity | 1,228 | 535 |
Total fair value changes private equity investments | 3,081 | 4,978 |
The fair value changes recognised under ’other fair value changes’ are relatively limited write-offs per non listed investment Keesmakers, Blueprint Group and Buhrs International Group.
Fair value changes listed investments | 2022 | 2021 |
Morefield Group N.V. | 2,648 | - |
Almunda Professionals N.V. | 977 | 493 |
MKB Nedsense N.V. | 471 | 253 |
Cumulex N.V. | - | 42 |
IEX Group N.V. | - 594 | - 47 |
Other interests held | - 11,168 | 11,831 |
Total fair value changes listed investments | - 7,666 | 12,572 |
From the other interest held, Renewi (€ - 4,278), Ctac
(€ - 3,647) and the investments in the building materials sector (€ - 1,468) most significantly dropped in shareholder value.
Interest loans granted to private equity investments | 2022 | 2021 |
Kersten Groep B.V. | - | 344 |
Blueprint Group B.V. | - | 40 |
BK Group International B.V. | 24 | 24 |
Other private equity investments | 227 | 198 |
Total | 251 | 606 |
Interest listed investments | 2022 | 2021 |
Morefield Group N.V. | 154 | 111 |
IEX Group N.V. | - | 2 |
154 | 113 |
The realised results consist of transaction results from the sale of shares from the private equity investment portfolio (realised results private equity investments) and realised results from listed investments (realised results listed investments). The transaction results are calculated in relation to the book value of the relevant investments at the beginning of the financial year, possibly increased by investments in the relevant financial year.
Other income | 2022 | 2021 |
Non recurring other income | 471 | - |
471 | - |
Financial income and expenses | 2022 | 2021 |
Financial income | ||
Miscellaneous financial income | - | 6 |
Total financial income | - | 6 |
Financial expenses | ||
Bank charges and commission | - 32 | - 10 |
Interest expense on short-term | - 273 | - 488 |
Total financial expenses | - 305 | - 498 |
Total financial income and expenses | - 305 | - 492 |
Dividends relate to dividends received during the financial year from both private equity investments and listed investments. Included are dividend income from Skysource Holding B.V. € 918, Concordia Holding N.V. € 710, AmsterdamGold.com B.V. € 761 and Almunda Professionals N.V. €438.
Dividend income | 2022 | 2021 |
Dividends | 3,601 | 1,289 |
3,601 | 1,289 |
Wages, salaries, and payroll taxes | 2022 | 2021 |
Wages and salaries | 942 | 916 |
Payroll taxes | 66 | 72 |
Other personnel costs | 16 | 16 |
1,024 | 1,004 |
During the year 2022, an average of 7.8 employees were employed within the company on a full-time basis (2021: 7.8).
Other operating expenses | 2022 | 2021 |
Housing costs | 22 | 73 |
Consultancy fees | 654 | 706 |
General operating expenses | 181 | 144 |
857 | 923 |
Reported corporate income taxes as a percentage of 2022 results before tax are 0% (2021: 0%). The reconciliation between corporate income tax as reported in the income statement based on the effective tax rates and tax expense based on the local domestic tax rate is as follows:
Corporate income tax | 2022 | 2021 |
Corporation tax domestic rate | - 25,8% | - 25% |
Effect of offsets within fiscal unity | - | - |
Effect non-taxable results | 25,8% | 25% |
0% | 0% |
Value8 extended its statutory financial year as of 30 December 2019 into 1 January 2019 to 30 December 2020. Due to the extension of the statutory financial year, the fiscal unity of Value8 and its joined companies was terminated as of 30 December 2019. Value8 had a fiscal unity (fiscal eenheid) for corporate income tax purposes with Buhrs International Group B.V., Buhrs Property B.V. and Kersten Groep B.V. until 30 December 2019. From 31 December 2019, the former joined companies are individually liable for corporate income tax. Value8’s financial year 2021 runs from 31 December 2020 up to and including 30 December 2021. The financial year 2022 runs from 31 December 2021 up to and including 31 December 2022. As of 31 December 2022, the amount of carry forward losses is € 6,084 (2021: € 7,484). No deferred tax asset has been recognised for the carry forward losses. If Value8's income consists purely of exempted participation results, a taxable profit is not foreseeable. No amounts relating to taxes were recognised directly in equity in the 2022 financial year.
Value8 invests in private companies (private equity investments) and listed companies. The investments can be in equity or loan form. This results in the following segmentation:
Sectors | 31 December 2022 | 30 December 2021 | ||||
Equity investment | Loans granted to | Total | Equity investment | Loans granted to | Total | |
Private equity investments | 18,071 | 1,549 | 19,620 | 41,655 | 2,904 | 44,559 |
Listed investments | 68,340 | 10,883 | 79,223 | 64,581 | 2,673 | 67,254 |
86,411 | 12,432 | 98,843 | 106,236 | 5,577 | 111,813 | |
Sectors | Financial year 2022 | Financial year 2021 | ||||
Fair value changes | Realised results | Total | Fair value changes | Realised results | Total | |
Private equity investments | 2,797 | 2,756 | 5,553 | 4,291 | 1,725 | 6,016 |
Listed investments | - 7,666 | 1,397 | - 6,269 | 12,448 | 2,439 | 14,887 |
Other income | - | 471 | 471 | - | - | - |
- 4,869 | 4,624 | - 245 | 16,739 | 4,164 | 20,903 | |
2022 | 2021 | |
Audit of financial statements | 100 | - |
Other assurance services | - | - |
Tax advisory services | - | - |
100 | - |
Based on the Financial statements 2022, the Executive Board and the Supervisory Board propose to distribute a dividend of € 0.18 for the ordinary B shares. The Boards expect to propose an optional dividend, whereby shareholders can choose between a cash dividend and a dividend paid in shares. Furthermore, the dividend (already paid) for 2022 on the preference C shares will be set at € 0.3125 per share.
Bussum, 20 June 2023
Executive Board
Drs. P.P.F. de Vries
Drs. G.P. Hettinga
Supervisory Board
Mr. R.A.E. de Haze Winkelman
Mr. J.P.C. Kerstens
Article 23 of the articles of association reads as follows:
23.1 From the profit as shown in the adopted financial statements, firstly, to the extent applicable:
23.2 After application of the provisions of Article 23.1, a dividend shall be paid, if possible, on each C share equal to a percentage of five per cent (5%) calculated on the nominal amount, increased by the amount of share premium paid with the first issued C share. Such a distribution by the company is only possible to the extent that its shareholders' equity exceeds the amount of the paid-up and called-up part of the capital, plus the reserves that must be maintained by law or by virtue of the articles of association.
23.3 If and to the extent that the profit as shown in the adopted financial statements is not sufficient to make the distribution referred to in Article 23.2 in full, the deficit, after application of Article 23.1, will be distributed:
In applying the provisions of this paragraph, the holders of C shares shall be treated equally in proportion to the paid-up amount per C share.
23.4 If the issue of C shares takes place during a financial year, the dividend on the relevant C shares for that financial year will be reduced pro rata until the first day of issue.
23.5 From the profit remaining after application of the previous paragraphs, the holders of A shares and B shares respectively shall be paid such an amount per A share and B share as the remaining profit, less the aforementioned distributions and any reserves to be determined by the general meeting, allows, on the understanding that no further dividend shall be paid on C shares.
23.6 Without prejudice to the provisions of Articles 9.3 and 23.3, only the holders of A and B shares are entitled to distributions made from reserves formed pursuant to the provisions of Article 23.5.
23.7 Without prejudice to the provisions of Article 23.6 and Article 24, the general meeting may only dispose of reserves of the company on a proposal of the Management Board approved by the Supervisory Board.
Value8's financial year 2022 differs from the calendar year and runs from 31 December 2021 up to and including 31 December 2022. During 2022 Value8 changed the financial year ending at 31 december (instead of 30 december) by adding one day in the financial year 2022. This was changed to be in line (again) with international practice and the financial accounts from our subsidiaries and investments.
INDEPENDENT AUDITOR'S REPORT
To: the General Meeting of Shareholders and the Supervisory Board of Value8 N.V.
Report on the audit of the financial statements 31 December 2022 included in the annual report
Our opinion
We have audited the financial statements 2022 of Value8 N.V. based in Bussum.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of Value8 N.V. as at 31 December 2022 and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
The financial statements comprise:
Unaudited corresponding figures
We have not audited the financial statements for the year ended 30 December 2021. Consequently, we have not audited the corresponding figures included in the income statement, the statements of changes in equity and cash flows and in the related notes.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the 'Our responsibilities for the audit of the financial statements' section of our report.
We are independent of Value8 N.V. in accordance with the EU Regulation on specific requirements regarding statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion
thereon. The information in respect of going concern, fraud and non-compliance with laws and regulation and the key audit matters were addressed in this context, and we do not provide a separate opinion or conclusion on these matters.
Materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 2,5 million. The materiality is based on 2,7% of equity. We consider equity as the most appropriate benchmark because of the nature of the business and equity is likely the primary focus area of the users of the financial statements evaluating Value8 N.V.’s financial performance. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons.
We agreed with the Supervisory Board that misstatements in excess of EUR 125,000, which are identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
Audit approach to the risks of fraud and non-compliance with laws and regulations
In chapter ’13. Risk factors’ of the annual report, the Board of Management describes its procedures in respect of the risk of fraud and non-compliance with laws and regulations.
As part of our audit, we have gained insights into the Company and its business environment, and assessed the design and implementation of the Company’s risk management in relation to fraud and non-compliance. Our procedures included, among other things, assessing the Company’s code of conduct, whistleblowing procedures, incidents register and its procedures to investigate indications of possible fraud and non-compliance. Furthermore, we performed relevant inquiries with management, those charged with governance and other relevant functions, such as the Legal Counsel.
As part of our audit procedures, we:
Based on the above and on the auditing standards, we identified one fraud risk that is relevant to our audit, including the relevant presumed risk laid down in the auditing standards. The risk identified is the presumed fraud risk of management override.
The presumed fraud risk on revenue recognition has been considered less relevant due to type of business and non-typical revenue recognition. The major part of the operating income is a result of the changes and movement in value of the listed and private equity investments and this has a direct link with our management override risk in relation to the valuation of the investments in general.
In respect of non-compliance with laws and regulation we refer to the other matters paragraph regarding “No audited financial statements for the financial years 2019/2020 and 2021”.
Management override of controls (a presumed risk)
Risk:
Responses:
- We incorporated elements of unpredictability in our audit, which amongst others included samples regarding investment valuations and the assessment whether there are non-typical transactions or investment valuations have occurred.
- We have inquired the corporate accounting department whether they have been requested to make improper accounting entries.
We communicated our risk assessment, audit responses and results to Management Board and the Supervisory Board.
Our audit procedures did not reveal other indications and/or reasonable suspicion of fraud and noncompliance that are considered material for our audit. The procedures described are based on auditing standards and are not primarily intended to detect fraud.
Audit approach going concern
As mentioned in note 19.2.1.2 to the financial statements, the Board of Management has performed its going concern assessment and has not identified any going concern risks. To assess the management board’s assessment, we have performed, inter alia, the following procedures:
The outcome of our procedures did not give reason to perform additional audit procedures on management’s going concern assessment.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Management Board and Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1. Valuation of the Private equity and Listed investments
Description
The investments amount to EUR 86 million and represent 86% of the total assets as at 31 December 2022. Investments are valued at fair value; therefore, Value8 N.V. has to make estimates and use assumptions to determine those fair values. The fair value is, as explained in note 19.2.1.7 to the financial statements, determined by the Board of Management and the investment director of Value8 N.V. Because the valuation of investments is complex and highly dependent on estimates and significant assumptions (such as estimated growth rates and discount rates), we consider the valuation of investments as a key audit matter in our audit.
Our response
Our procedures for the valuation of the investments included:
Our observation
Overall, we assess that the assumptions and methodologies used, and related estimates resulted in a balanced valuation of the investments and we concur with the related disclosures in the financial statements.
2. Transaction under common control in relation to divestment of Kersten Groep B.V. to listed investment Morefield Group N.V.
Description
Value8 N.V. divested the private equity investment in Kersten Groep B.V. in November 2022 via a transaction under common control to the listed investment Morefield Group N.V. The transaction was settled via a vendor loan to Morefield of EUR 10,640K, issuance of shares in Morefield Group N.V. and the issuance of Warrants of EUR 400K. As a result of this transaction Value8 N.V.’s equity increased with EUR 1,313K. Management prepared a position paper in which they explained the background of the transaction and the valuation of the shares and vendor loan on the assumption of fair value and their interpretation of the EU-IFRS standards. As disclosed in Note 19.2.5.2 to the financial statements, the fair value of the loan granted to and shares in Morefield Group N.V. are based on fair value. The loan was valued using a market rate approach and the shares issued and obtained are based on the fair value at the date of the issuance of the shares to Value8 N.V. which are based on quoted market prices. As this common control transaction is subjective, complex and a related party transaction, we consider this to be a key audit matter.
Our response
We have inspected the position paper of management, the share purchase agreement, notary deed and calculation made to verify that the accounting requirements of IFRS have been applied. We used our valuation specialists to independently calculate the fair value of Kersten Groep B.V. at the end of October 2022 and compared the outcome to the values calculated by Value8 N.V. We also evaluated Value8 N.V.’s assessment of the fair value of the loan and fair value of the issued shares in Morefield Group N.V. In addition we involved an IFRS specialist to evaluate managements position papers and we held several discussions with the Management Board and the corporate finance team and investment director to have a good understanding of their position paper and accounting treatment.
Additionally, we have assessed the adequacy of the disclosures.
Our observation
Overall we assess that the assumptions used and related estimates resulted in a fair representation of the transaction under common control. Furthermore, we determined that the accounting treatment and related disclosures are in accordance with EU-IFRS.
Emphasis of matter regarding the valuation of Concordia
Valuation of interest in Concordia Holding N.V. as at 31 December 2022
The interest in Concordia Holding N.V. is held in the form of non-voting depositary receipts. The company has indicated that, given the minority interest and the lack of control, it does not have access to current financial information from Concordia Holding N.V. nor to budgets and forecasts for the coming years. The company increased the valuation of Concordia based on the expectations and information received from the management of Concordia Holding N.V. and prepared a valuation model that was evaluated by our valuation specialists. We concluded, with support of our valuation specialist, that the value as disclosed in the annual report of Value8 N.V. is a prudent valuation of Concordia Holding N.V. but a higher value could also be justified based on the valuation model applied by Value8 N.V. We have discussed this with Value8 N.V. and requested to disclose this more precise in the annual report. As a result, the uncertainty related to this valuation is above average. We emphasize this circumstance and the specific disclosures on the valuation assumptions around the discount and EBITDA multiples applied in the related notes in section 19.2.4 Private equity investments. Our opinion is not modified in respect to this matter.
Emphasis of a matter: Disclosures on the discount rates applied for the non-listed shares in listed investments
In note 19.2.8 Listed investments the company discloses the discounts rates applied on the non listed shares in the listed investments of MKB Nedsense N.V., Morefield Group N.V. , Almunda Professionals N.V. and Cumulex N.V. The applied discount range is based on management estimate and the policy is disclosed in note 19.2.1.7 - Financial Assets. The discounts applied are based on professional judgement of management and in accordance with IFRS 13 the company discloses the discount applied on the observable share price. Furthermore, note 19.2.1.7 also discloses that in exceptional cases, the discount bandwidth to be applied can be deviated from if there is a demonstrable other indicator for the fair value. Our opinion is not modified in respect to this matter.
Other matter paragraph
No audited financial statements for the financial years 2019/2020 and 2021
We have emphasized that the company is not in compliance with the rules for having its financial statements for the financial years 2019/2020 and 2021 audited. This non-compliance is known by the shareholders and they approved the financial statements of financial year 2019/2020.
Report on the other information included in the annual report
The annual report contains other information, in addition to the financial statements and our auditor's report thereon.
Based on the following procedures performed, we conclude that the other information:
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.
Management is responsible for the preparation of the management report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code.
Engagement
We were engaged by the supervisory board as auditor of Value8 N.V. on 9 May 2023 as of the audit for the financial year 2022 and have operated as statutory auditor ever since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audit of public-interest entities.
Description of responsibilities regarding the financial statements
Responsibilities of The Board of Management and the Supervisory Board for the financial statements
The Board of Management is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Board of Management is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
The Board of Management, under supervision of the Supervisory Board, is responsible for the prevention and detection of fraud and non-compliance with laws and regulations, including determining measures to resolve the consequences of it and to prevent recurrence.
As part of the preparation of the financial statements, management is responsible for assessing the company's ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Board of Management should prepare the financial statements using the going concern basis of accounting, unless the Board of Management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. The Board of Management should disclose events and circumstances that may cast significant doubt on the company's ability to continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the company's financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor's report.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.
Bussum, 20 June 2023
Cravo, Fortes, Antão e Associados, SROC Lda.
J.S. Visch MSc RA
Signed on original