Catom Annual Report 2020 EN

Catom B.V.

ANNUAL REPORT 2020

Catom B.V.

ANNUAL REPORT 2020

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CONTENTS

1. Company profile 2. Mission and Vision

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12 20 30 49

3. Strategy

4. Management report 5. Financial Statements

Consolidated balance sheet as at 31 December 2020 Consolidated profit and loss account for 2020

50 52 54 56 82 82 84 85

Consolidated cash flow statement for 2020

Notes to the consolidated balance sheet and profit and loss account

Company Financial Statements

Balance sheet as at 31 December 2020 Profit and loss account for 2020

Notes to the balance sheet and profit and loss account

6. Other information and Independent auditor’s report

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Colophon

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Catom B.V.

2006

2007

2008

2010

2013

2014

2009

2011

2012

Auction purchase of two petrol stations, a Shell station along the A27 and an Esso station along the N31.

Spectacular growth in wholesale.

Acquisition of Oliecentrale Nederland, distributor of Shell fuels and lubricants for the business market.

Catom wins Business Award.

Acquisition of 33 petrol stations of Kuwait Petroleum Nederland B.V. with a joint turnover of nearly € 100 million.

New look and feel for OK stations. Acquisition of 3 petrol stations of Kuwait Petroleum. All trucks taken under company management.

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2015

2016

2017

2018

2019

2020

Acquisition of four new filling station locations, three of which are new builds. Takeover of Stacy Olieproducten B.V.

Takeover of Tamoil Direct endconsumers, Van Scherpenzeel endconsumers and 7 petrol stations.

Takeover 2 resellers, 3 petrol stations and 1 foreign petrol station.

Takeover 2 bunker suppliers, 2 resellers and 8 petrolstations.

Takeover 1 bunker lubricants supplier, 2 resellers and 8 petrolstations.

Acquisition of one reseller, 11 domestic petrol stations. Project started for design improvement and building processes for staffed and unstaffed OK petrol stations, OK Café.

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Company profile

Catom is a fast growing company in the trade, distribution and sale of fuels and lubricants.

The company focuses on three primary activities in the downstream segment of the oil

market: wholesale, sale to end users in the business market (reselling) and operation of

petrol stations with shops (retail). The major part of the turnover stems from wholesale

and reselling. In reselling, Catom is market leader in the Netherlands and its ambition is

to achieve that position in the other two primary activities as well.

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turnover (m euro)

Ebitda (keuro)

turnover (m euro)

Ebitda (keuro)

Catom PDM is the tradename under which all wholesale activities are performed. The reselling takes place in OK Oliecentrale – on land – and OK Marine – on water – and focuses on the sale and distribution of oil and lubricants in the business-to-business market. Petrol stations are operated under the brand name OK and are characterised by a modern and cool design. For the shops of petrol stations, an innovative and highly successful proprietary retail formula has been developed under the brand name ShopPoint.

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net profit (keuro)

personnel

net profit (keuro)

personnel

Catom was set up in 1998 by two entrepreneurs with broad experience in the oil industry. Since its inception, the company has expanded continuously – and at times explosively – by taking over other business and by means of autonomous growth. Turnover in 2020 came to € 776 million, which is a decrease compared to 2019 and was due to significantly lower product prices and, to a lesser extent, due to the effects of the measures to beat Covid-19. Catom has its head office in Breda and four regional sales offices in Staphorst, Arnhem, Tholen and Lelystad. The company has a total of 391 employees at year-end, which is equivalent to 275 employees in FTE.

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Mission and Vision

Mission

Vision

Catom aims to become customers’ pre ferred supplier on the basis of competitive pricing and a high standard of service. By means of a customer-focused and efficient organisation Catom is seeking to play a leading role in the downstream segment of the Dutch oil market.

Catom believes in the power of being customer-oriented. Both its own organi sation and the trading companies and petrol stations are geared towards ensuring that the customer experiences first-class service and competitive pricing. Catom’s specific customer culture is discernible at all points during the sales process, and this is how Catom distinguishes itself from traditional suppliers. Catom seeks to acquire market leadership in all segments it operates in, by continuing to develop. It wishes to fulfil this ambition by way of autonomous growth combined with acquisitions. Catom seeks to capitalise on opportunities arising on the one hand due to the major oil companies wishing to dispose of divisions and on the other

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because smaller (family) firms – both oil trading companies and owners of smaller petrol stations – are looking to sell their business. Particularly in the latter segment Catom has seen increasing movements and opportunities over the past few years. Thanks to its size and the professional way in which acquisitions are implemented and, where possible, integrated rapidly, with respect for all stakeholders of the acquired companies, Catom has proved to be a reliable negotiating party and an attractive party for companies contemplating such a move. Expansion will predominantly remain focused on the Dutch market, which offers plenty of opportunities.

Catom has shown that it is capable of managing explosive growth. In order to manage further expansion, Catom is investing in its management and its HR and IT systems. Catom’s organisation is compact and goal-oriented with a marked focus on cost management. Staff are encouraged by giving them a high degree of responsibility and opportunities to foster their personal development and growth. The core values of Catom and its staff are dedication, ambition, flexibility, innovation and ownership. The organisation is keen to learn and willing to get better year in, year out, both in terms of results and in performance towards the customer. The safety of people and their environment is a first priority for Catom in all of its activities.

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Details and repetitive action

Catom’s business operations are charac terized by many daily processes, repetitive actions. Catom focuses on the details of these daily operations and considers each repetitive action as an opportunity for improvement. Every year, the company processes two hundred thousand orders, each of which are delivered and invoiced within 24 hours. In addition, five million cash register transactions take place in its petrol stations on an annual basis. Therefore, it is crucial for Catom to focus on the details of daily operations. By constantly looking at and analysing every element in this chain of actions and then searching for improvements, the company strives for perfection in the entire process. Catom’s intention is to achieve this level of perfection and the road leading to it is a continuous creative process. Employees are encouraged to look at the work process from that perspective. This creative process is in some ways similar to the work of a visual artist, who also loves details and strives for perfection, often by means of repetition, for example on the basis of the seasons, the daily rhythm or within a specific style period.

Catom’s annual reports over the past few years have included works of art and sources of inspiration by artist Marc Mulders, as an example of the strive for perfection. Last year, the focus was on his glass work. Glass is transparent, it breaks the light, and it has the power to show things in a different perspective. Being able to look at the real world in a different way forms the basis for creativity and innovation, and increases the ability to find solutions. Transparent business operations also have a binding effect, and they are a precondition for being successful on the whole.

Marc Mulders, Ouroboros – 15 -11-20 , 2020, watercolour, 65 x 50 cm

This year, Marc Mulder’s watercolours are the pivotal point.

Watercolours require technical control and a lot of sensibility form the artist. It has to be perfect at once, there is no room for corrections. The left and right cerebral hemispheres must work together in perfect harmony. Each and every enterprise should strive for such superb teamwork in its problem-solving processes.

Left: Marc Mulders, Ouroboros – 19 -11-20 , 2020, watercolour, 65 x 50 cm

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Strategy

Strategy

Catom’s strategy is geared towards both autonomous growth and growth through acquisitions; the so-called buy and build strategy. The company is anticipating substantial shifts in the Dutch oil market’s downstream segment. Major oil companies such as Shell, Exxon, Total and BP, the so-called ‘majors’, are increasingly concentrating on upstream activities (oil exploration and production) and are seeking opportunities to dispose of down stream activities (marketing, distribution and sales). At the same time, smaller players in the market are struggling to envision the future and are increasingly opting to offer their trading activities and petrol stations for sale or for rent. Catom wants to play an active role in this consolidation drive. The company is in a position to take over these activities and win customers who are in the process of choosing a new supplier due to these shifts. Catom is especially interested in trade, sales and distribution activities as well as petrol stations. The reorganisation of the downstream segment is expected to occur in the Netherlands over the next few years. Consequently, Catom discerns ample

opportunities in the next few years for growth and further takeovers in the Dutch market. For each of the three core activities, a targeted strategy will be followed which fits in with a specific market conditions and opportunities within that segment.

Wholesale

Growth in wholesale activities will largely be autonomous. Catom will distinguish itself by means of more competitive pricing and a higher standard of service, enabling new customers to be attracted. Growth in recent years has resulted in the wholesale activities reaching such a scale that acquisitions will also be able to bolster growth. One crucial aspect in the case of acquisitions is to safeguard the high levels of service and quality that set the company apart so as to ensure the long-term loyalty of customers from the party acquired. In 2020, the initiatives to increase Catom’s own stocks and take the lead in fuel logistics were continued successfully. Expectations are that this will further continue in years to come. Storage capacity and maintaining our own stock will result

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Catom B.V.

Catom Distribution B.V.

OK Marine B.V.

OK Oliecentrale B.V.

Shoppoint B.V.

Dutchoil B.V.

Wholesale

Reselling

Retail

in strategic independence and greater flexibility, thereby ensuring better service provision to the customer and more possibilities to optimise margins and return.

position over the next few years, with a market share of around 20% based on thousands of active customers, with a total of 354 million litres of fuel and almost 6 million litres of lubricants.

Reselling

Retail

The reselling market is a 100% displace ment market, the logical consequence of this being that growth will be accomplished chiefly through takeovers. A large number of smaller businesses is active in this market. The challenge is to find among them interesting parties that are seeking partnerships or are willing to sell their company to Catom. The ambition is to continue enhancing our current market

Similarly, the growth strategy for retail activities is primarily focused on acquisi tions. Following a successful improvement of the staffed formula OK ShopPoint, OK Café and the unmanned formula OK Express, the organisation is ready to roll out these formulas further. Developments in both the upper and lower ends of the market are playing a role in

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Catom reinforces its Top-5 position in the Dutch wholesale market, inter alia

by MORE OWN STOCK and INCREASINGLY INDEPENDENT PROCUREMENT.

Strengthened its MARKET LEADERSHIP in RESELLING. FASTER CONSOLIDATION

in reseller’s market will provide OPPORTUNITIES for further growth.

The RETAIL VOLUME DECREASED BY 3% Number of filling stations: +14.

this division too. It is anticipated that in the long run the majors will sell a sizeable proportion of the petrol stations, while the smaller players with one petrol station or a limited number of petrol stations are reflecting on their future and contem plating selling or letting their station(s). In recent years, Catom has proved to be a serious partner to both sides of the market. Financing The company is very much interested in takeovers and in practical terms is capable of realise these from its own balance sheet position and bank financing.

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Wholesale

Almost half of Catom’s turnover is achieved through this wholesale trade in petrol, diesel, gas oil and petroleum on the part of subsidiary Catom Distribution under the trading name Catom PDM. Catom PDM purchases these bulk products on the open market and sells to oil traders, petrol stations of small independent chains and individual petrol station operators in the Netherlands. Sale prices are set on the basis of market developments and communi cated to the customer several times a day. Customers of Catom can use a special pass to load products at pretty much all depots in the Netherlands, in line with their needs. Catom also supplies its own reselling operations and petrol stations through these wholesale activities. Catom distinguishes itself from other players in this market by means of its higher degree of flexibility and cost-efficiency.

By combining fuel volumes competitive pricing can be achieved for customers. With more than 190 buyers and a volume of over 880 million litres of fuel per annum – including its own reselling and retail volumes – Catom’s wholesale activities have a market share of 5 - 10%. Catom PDM has been active in this market since its inception in 1998 and has achieved its current market position largely through autonomous growth. Catom has a point of purchase at virtually all depots in the Netherlands due to having long-term contracts in place. In addition to this, the business has its own stock locations; storage capacity at its own depot in ‘s-Hertogenbosch and rented at several depots at other locations nationwide. The business has an excise authorisation, a prerequisite for being able to trade competitively in this commodity market.

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Since 2004, Catom has been the owner of the OK brand in the Netherlands. The originally Swedish brand has had Dutch presence since the 1950s. Traditionally originating from the cooperatives (such as Cebeco), OK is a trusted name as a supplier of fuels and lubricants in agriculture and associated fields. Thanks to Catom’s investments in state-of-the-art petrol stations, the brand has been making a comeback in retail as well, these past years.

Reselling

The activities on water are carried out by a separate subsidiary, OK Marine, from office in Lelystad and as from 1 January 2019 from Tholen as well. OK Oliecentrale and OK Marine distinguish themselves by their service levels. Both of them have professional and customer oriented organisations with 24/7 services. The sales staff are knowledgeable and advise customers on complex issues pertaining to logistics over land and water, lubricating schedules, maintenance and product characteristics. After the acquisition of the activities of Van Wifferen’s Oliehandel, which took place in the spring of 2019, it is now possible to supply in-house developed services and products for tanks and installations. For the purposes of transporting fuel and AdBlue in the reselling market, OK Olie centrale has 62 trucks in service, all owned

Management

Reselling is the sale of fuels and lubricants to large, medium and small users in the business market. With a market share of over 20%, Catom is market leader in this segment. Until the end of 2017, the reselling activities were mainly on land, with customer segments including agricultural companies, local and regional authorities, utility companies, construction firms, garages and haulage companies. In the course of 2018 Catom entered the market on the water, with customers in marine contracting, the shipping industry and the cruise industry. Subsidiary OK Oliecentrale is the largest distributor of shell fuels and lubricants in the Netherlands. Also, OK Oliecentrale is active in the reselling market under the brand name OK. The company has branch offices in Arnhem, Breda and Staphorst.

Jan Willem Westerhuis (1961) Founder and director of Catom, he studied business administra tion and started his career at Esso Benelux in Breda. During his twelve years at Esso he held nine different positions, mainly in the downstream sector. During this time, he met Rik de Leeuw den Bouter, with whom he founded Catom in 1998.

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Its increased market position in 2019 has boosted a focused campaign to improve OK’s name recognition. Becoming the main sponsor of NAC, the professional football club of Breda, entering into a deal for the sponsoring of a number of car races in the Porsche Supercup and the acquisition of the url www.ok.nl are striking examples of activities geared towards making OK more dynamic and more visible, both offline and online.

Retail

by the company. Around 19 trucks support the Shell colours, with the rest being under the OK brand, or white. OK Marine owns five vessels. Catom holds its own stocks of both OK and Shell lubricants so as to be able to supply its customers efficiently and timely. Storage and warehousing are partly performed in-house. Part of the storage and ware housing has been outsourced to two professional service providers (one for packaged products and one for bulk products), in connection with distribution to end customers. The entire operation is controlled by OK employees, with a keen focus on customer satisfaction (ordered today, delivered tomorrow).

Management

OK petrol stations OK has a long history in the Netherlands. The 1950s saw the brand, which was originally Swedish, introduced to the Dutch market, and since 2004 it has been owned by the Catom group. Since 2006 Catom has been working on putting the OK brand of petrol stations back on the map, with the number of petrol stations growing each year. As at year-end 2020, 81 petrol stations nationwide form part of the retail activities. Of these 81 stations, 67 are operating under the proprietary OK brand. 44 of them are staffed and feature a modern shop, while the other 23 are unstaffed locations. The acquisitions included two petrol stations of Trumpi BV and two petrol stations of Schimmel BV, both well-known names in the filling station

Rik de Leeuw den Bouter (1959) Founder and director of Catom. In 1985, after graduating with a degree in civil engineering, he joined Esso Benelux in Breda. Through the many different positions that he held in Esso’s job rotation programme he built up broad knowledge and experience in the oil market, both downstream and upstream. In 1998, he became one of the founders of Catom.

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sector, and these acquisitions reflect the strength of the OK brand well.

in a newly-built shop in Breda and at a location along the national motorway, which was taken over from Shell, They were given the new OK Café fit-out and look, this concept will be further rolled out in 2021 The core values of ShopPoint: customer friendly, quiet, space, cleanliness, atmos phere and a wide range of products are well monitored in all aspects. The 2019 concept of OK Express for unmanned washboxes has also proven to be successful, and in 2020 three more of these installations were build, and they are frequently used by our customers. The fresh appearance, contactless paying for vacuum cleaner, wash boxes and at the filling station are extras that are valued by our customers.

2021 is proving to be another good year for our retail activities. On 4 and 5 January two stations were added in the municipality of Rotterdam and already the first signa tures will be placed shortly for new retail projects. In addition to filling station activities, the fuel cards also work well. The network has grown, as a result of which the number of cards has increased considerably. Early in 2021 new steps will be made to a mutual acceptance with a large network, which means that there will be even more locations where the OK fuel card can be used. ShopPoint In 2020 the concept for the OK Café was enhanced and rolled out further, inter alia

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Management report

General information

Ever since its establishment in 1998, the company has experienced uninterrupted turnover and profit growth, as a result of both takeovers and autonomous growth. Over the reporting year 2020, the organi sation’s size and the numbers of customers and petrol stations have continued to grow, but due to the economic situation under the Covid-19 measures, the turnover in litres and euros dropped in all three segments, except for the shop sales, which showed a steep increase. In the present reporting year, again, several takeovers were realized. The takeover of a trader on land added some business-to business volume. The network of OK petrol stations was also further expanded by the acquisition and rebranding of a number of third party locations and three newly-built state-of-the-art unmanned (as of yet) petrol stations.

In 2020, again, the international (crude) oil industry was volatile. The local markets of finished products may well be characterized by their own dynamics, but are nonetheless, as a rule, affected by that volatility. The market prices of our major products showed a sharp drop in the beginning of the year, followed by a less violent period of partial recovery at the end of the year. Overall, the year showed a decrease, resulting in a negative effect on the stock. In spite of this negative effect on the stock, a volatile market and an equally dynamic biofuel market still appear to create an environment where Catom can yield profits. As a leading company in the market, Catom can promptly seize any opportunities and respond to any threats. By investing even more in the supply side of fuel, and by handling the periods of declining prices well, significantly better margin improve ments have been realised in comparison with earlier years.

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Further work took place in 2020 to render the IT environment more professional and to improve efficiency. The largest project was an upgrade of the ERP system. Furthermore, a survey was carried out, together with an expert consultant into the security of Catom’s IT environment. Several areas for improvement were identified and the improvements have been implemented in the meantime. The percentage of PDF- invoicing further increased to 83%. With the further growth of the retail network and with Catom taking a number of petrol stations under own operation, the number of employees saw a further increase. On balance, the number of employees increased from 266 FTEs (2019) to 275 FTEs (2020). At year-end 2020, 391 people were employed by Catom. Also,

during the reporting year some fifty employees were added by means of a pay rolling construction with the acquisition of two petrol stations. They will be employed by the organisation itself in 2021. Catom’s strategy focuses on further growth, both organic and through acquisitions. Catom seeks to acquire market leadership in all segments it operates in. Catom B.V. has its corporate seat in Breda. Its principal place of business is at Verlengde Poolseweg 32 in Breda. All group companies are wholly owned by Catom. There were no changes in the ownership ratios in the past financial year. Catom B.V. and its group companies operate mainly in the Dutch market. Nearly 100% of turnover is realised in the Netherlands.

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Turnover and results

Investments

Turnover in terms of money dropped by 18.71% in 2020 to € 776 million. The volume of motor fuels sold grew by 7.2%. The volume of lubricants sold dropped by 7.69%. The gross profit on sales (turnover minus purchase cost of goods sold) dropped by 6.3%. This turnover and gross margin led to an EBITDA of € 13,079,349 and a group result before taxes of € 7,562,675. The balance sheet total dropped to € 128 million. Solvency came to 12.3% (2019: 12.2%). The liquidity ratio was 62% (2019: 73%). The company’s liquidity level is safeguarded in part by the credit facility. The financial figures relate to the 2020 financial year, which coincides with the calendar year.

Investments in intangible and tangible fixed assets in 2020 amounted to € 18,186,238 (2019: € 8,548,880). Of this, € 12.8 million (2019: € 5.4 million) concerned the takeover and improvement of petrol stations. Catom also invested in acquisitions, vehicles and vessels, software and hardware, and other machinery. In 2021 the company intends to invest in acquisitions, vessels and vehicles, software and hardware, and machinery. Expectations are that these investments can be realised with the currently available funding.

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Financing

Developments

Wholesale The core activity wholesale – Catom Distribution B.V., trading name Catom PDM – operates in a dynamic market with high price volatility. Prices in the inter national market fluctuate significantly each day, increasingly even during the course of a day. Catom participates in this trend by adjusting its prices at various times during the day. The buying behaviour of customers is heavily price-driven. Catom responds promptly to this trend. By improving its supply process and, consequently, its opportunities to blend biofuels, Catom has managed to enhance its competitive position in this market. This has led to a positive effect on the margins in the year under review, combined with a limited decrease in the volume of this wholesale segment, which is Catom’s largest segment, by 9%.

The investments in 2020 were all financed with internal funds. The total credit facility amounts to € 50 million. The cash flow from operating activities increased from € 9,827,415 to € 10,436,173, stock and operating capital effects, in conjunction with the investment and financing activities result in a decrease of cash of well over € 18.5 million. The financing structure was changed in March 2021; the modification and extension of the existing agreement was achieved with the help of our own bank and a second, also Dutch, bank. The agreement provides for a larger credit facility at favourable terms.

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Retail Retail again experienced significant

Catom is one of the five largest players in the Dutch wholesale market and sees opportunities for further growth in this segment. The major oil companies, also referred to as the ‘majors’, are expected to leave this market in due course, in order to focus more on upstream activities. Reselling In the reselling division – resale of fuels and lubricants by OK Oliecentrale BV and OK Marine B.V. – the volume of motor fuels dropped by 6.3%. The volume of lubricants sold dropped by 7.69%. In a slightly declining reselling market, Catom has succeeded in enhancing its market leadership position.

developments in 2020. The expansion of the number of OK stations continued, thanks to, inter alia, the acquisition of a number of petrol stations and the renova tion and rebranding of a number of stations acquired earlier. Following on from this, successful building work on the internal organisation is ongoing in order to control the constantly growing Retail operation from the head office. On balance, the volume of motor fuels sold by our retail operation increased by 3,01%. The shop sales increased by 31%. Research During the financial year no work was done in the area of research and development that was included in the balance sheet.

During the year under review, Catom acquired an oil trader.

As a consequence, and thanks to its efficient and safety-conscious operations, Catom maintains its excellent starting position in this market, which shows a growing concentration trend.

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Financial risk recognition, risk appetite and risk control

Liquidity and financing risks Catom’s financing policy is aimed at maintaining its sound financial position. Thanks to a sound balance sheet structure and more than ample credit facility, Catom has plenty of capacity to absorb liquidity risks and sufficient access to credit on an ongoing basis. Currency risks Catom’s functional currency is the euro. In the wholesale department, a different functional currency, the US dollar, is used for part of the purchasing of motor fuels. Currency risks arising from these dollar purchases are not hedged because the exposure is limited in terms of absolute amounts and only occurs for short periods (days), and because the currency fluctua tions have only a limited impact on our competitive position in the market.

In the performance of its business activities, Catom is exposed to various types of operational and non-operational financial risks. The risk appetite is limited, and mitigating measures have been drawn up. The risk appetite is evaluated periodically by the Executive Board and management, and if necessary adjusted; actual indicators play a key role here. This section describes the main financial risks. Credit risks One of the main risks is the bad-debt risk related to customers. The level of this risk is largely determined by the prices of motor fuels and the related indirect taxes and tariffs, combined with the applied payment periods. This risk is mitigated as much as possible by means of a strict debtor policy.

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Fuel price risks, interest rate risks, derivatives There have been major fluctuations in fuel prices in recent years. Catom follows the market and our business model has proven robust in absorbing these fluctuations. Catom makes very limited use of financial instruments – forward exchange contracts – to hedge against losses on its stocks, which in turn make up a very limited part of its total turnover. As a player in the downstream oil market, Catom is aware of the crucial importance of always being in compliance with legislation and regulations and ensuring safe opera tions. A key foundation for controlling the risks in this area is the company culture. Accordingly, the Executive Board and management focus on an ongoing basis on safety and quality and increasing transpa Other risks, compliance with laws and regulations, safety

rency in terms of the timely identification, assessment and reporting of risks.

The risks in these areas are further mitigated by internal risk management and control systems, which are tailored to the day-to day work environment in which Catom operates, and with considerable support being provided by an extensive system of requirements, procedures and systems in relation to quality assurance, as documen ted in Catom’s HSE quality manual and in accordance with ISO 14001 and VCA* (safety, health and environment) standards. Compliance with these standards is regularly audited by external specialists. In 2015 we conducted an inventory together with an external party to verify that Catom has all the required permits, is in compliance with these permits, and adheres to all legislation and regulations in the area of safety and the environment. To this end, a

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tool was developed containing all legis lation and regulations relevant to our organisation. This tool verifies that we are informed of any changes in legislation so as to be able, if necessary, to take the required measures in time and remain compliant with the relevant legislation and regulations. When changes occur in the organisation in terms of sites or activities, an investigation is done with an external party into whether the inventory is still complete, and adjustments are then made where necessary. Damage to third-party properties and liability towards third parties Catom has taken out an extensive package of insurance policies against risks relating to damage to its property and to property of third parties, as well as other potential liabilities towards third parties. The insurance portfolio is monitored in collaboration with a specialised organisation and, where

necessary, specialists in the various insurance fields.

Risks in relation to financial reporting Catom’s financial reporting is part of a framework that covers its budgeting, reporting and forecasts. A distinction is made between reports for internal use and those for external use. The external repor ting at group level consists of an annual report that includes the annual accounts as audited by the independent auditor. The internal reporting consists of extensive daily, weekly, monthly and quarterly reports in which current developments are compared to the (cumulative) budgets and results from previous years. At the level of the main activities, financial and operational results are analysed and explained and, where needed, examined in detail. The quality of the financial reporting systems is regularly assessed in the context of the

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procedures of the independent auditor. We communicate the independent auditor’s findings regarding the quality of the financial reporting as identified in the context of the audit of the annual accounts. The above contains a list of what we currently consider to be our main risks. This list is not exhaustive. There may be other risks we currently do not consider to be of vital importance, but which may still turn out to be significant.

turnover per employee in this retail segment is much lower than for the other activities; also, the prices of motor fuels dropped sharply; the average turnover per employee in 2020 dropped by 21%. All personnel members are employed by the Dutch companies. Catom has no employees in other countries. It is expected that, with autonomous growth, the workforce may again decrease slightly as a result of efficiency measures and investments in new technologies. Any drop in the number of employees can be fully achieved through natural attrition. However, it is quite plausible that such a potential drop will be more than offset by further growth, including through acquisi tions, and particularly through a further increase of the number of petrol stations operated by the company itself.

Personnel and organisation

The average number of employees, expres sed in FTE, rose during the reporting year from 266 to 275. This increase was mainly due to the acquisition of petrol stations, taking over the operation of petrol stations previously run by dealers and taking over trading activities from fuel traders. The

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The breakdown of personnel by activity is as follows:

The focus was on technical and commercial training. Permanent attention is also given to the training of employees who are responsible for the audits conducted in the field of safety and the environment, both internally and by external officials. In 2020, the ERP system was upgraded to the most recent and highest standards and the various businesses have been transferred to that system in controlled

• 6 in management and staff positions • 196 in sales and financial departments • 73 logistics employees

The percentage of women in the company’s workforce increased from 45% to 47%.

Due to the limited number of executive directors (2), the company has not yet developed a policy to achieve a balanced ratio of men and women on the Executive Board. The Catom Executive Board highly appre ciates the efforts and dedication of its staff. Their efforts make it possible to realise the company’s ambition to improve every year, both in terms of performance towards customers and in terms of results.

steps. By the end of 2020 all major enterprises had been transferred.

Safety and the environment

The safety of people and their environment is a first priority for Catom in all of its activities. Catom attaches great value to full compliance with all requirements in the areas of safety, quality and the environ ment. Catom has its own environmental and safety policy for this. It goes without saying that Catom complies with the statutory blending obligations with respect to biofuels; in 2020 16.40% (2019: 12.50%). Catom seeks to strictly use second generation (‘double-counting’)

Automation and training

In 2020, according to plan, investments were again made in the training and education of personnel.

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biofuels for this purpose, thus surpassing the legal requirements.

The investments in the petrol stations brought about a significant reduction in electricity consumption thanks to the replacement of conventional fluorescent lighting by much more energy-efficient LEDs. The new petrol station we built in Middelburg in 2016 has been designed and completed as a zero-energy structure. Limited reductions in energy consumption were also achieved at our offices. For customers wishing to implement a responsible policy in terms of the environ mental impact of fuels, Catom has intro duced GTL (Gas To Liquid). This is an advanced diesel fuel that produces less smell and noise and thus reduces the emission of fine particles. Since GTL is free from sulphur and aromatics and has a high octane content, it leads to cleaner combus tion. This innovative product developed by Shell is only made available by Shell to a number of its large customers, including its branded distributors (resellers). Catom has thus gained a unique proposition. This product is especially interesting for large municipalities that aim to improve the air quality in their city centres. Also HVO fuel was introduced for our customers. HVO

During the reporting year, the Catom group took significant steps towards the reduction of its energy consumption and the related emissions. We have continued to focus on route planning transport volumes and motor fuels volumes loaded, inter alia by using remotely readable volume measuring systems. Due to the corona measures the consumption of many major customers dropped, whereas civil engineering projects increased. As a result the transported volume decreased by 4.2%. The average deposited volume also decreased by 3.3%, but is still 2.6% more than in 2018. In 2020, all 10 ordered Euro 6 trucks were taken into operation to replace Euro 3 trucks. Additionally, 2 Euro 6 trucks were added to the fleet: one for fuel distribution and one for the distribution of AdBlue. The investments in 2019 and 2020 already show fuel savings in 2020 of 3.6% per kilometre driven, compared to 2018.

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fuel is fossil-free, biodegradable, it reduces the emission of particulates and has a sulphur emission of almost 0 grams/km. HVO can be obtained in various blend ratios with diesel. If 100% HVO fuel is used, the reduction of CO2 emissions may be reduced to up to 89% in the who chain. Compressed natural gas is sold at 1 petrol stations we acquired in 2016 and at 1 petrol station we acquired in 2018. In addition, a charging point for electric cars was installed at the new petrol station in Middelburg. ISO14001: 2004 (environmental mana gement system) and VCA*: in June 2019 we successfully completed the recertification process of ISO 14001 at the new standard (2015), and we have now new VCA* and ISO 14001 certificates: 2015 in the name of OK Oliecentrale B.V. The preparations for recertifying with VCA in 2021 under the new standard (2017) are already in progress. All mandatory internal and external audits were carried out in 2020, including the external BRZO, WABO and ISCC audits (regarding the storage, transport and blending of biofuels).

The PMO has been completed and the report with the subsequent action to be taken has been submitted to the Works Council. The external testing of the new RI&E is expected to be completed in Q2 2021. In 2020, 1 environmental incident occurred and 2 incidents leading to injury, with a total number of deliveries amounting to 99,729. Catom expects that the consolidation in the downstream segment of the oil industry will continue and accelerate in the coming years, especially as the pressure on margins has grown. Catom will unabatedly seek to take advantage of the opportunities arising from this consolidation activity and expects that margin levels will recover further in due time as a consequence of the consolidation. Outlook

The Executive Board continues to aim for market leadership in all segments the

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company operates in. Considering the consolidation initiatives in the market, acquisitions are again quite possible in 2021 in order to realise this ambition. In this context, in 2021 we will take additional steps to further simplify and automate our operations. This will include projects in the areas of planning and administration. Catom expects turnover growth and a comparable operating result / profit level in 2021. No material events have taken place between the balance sheet date and the date of signing of the annual accounts for 2020 that would need to be presented or disclosed in the annual accounts. Having said that, several petrol stations were already taken over in the first quarter of 2020. Early in 2020 the spreading of the Covid-19 virus became world news. As a result, restrictive measures were taken by the government as from mid-March 2020. As a supplier of fuels and lubricants, Catom Subsequent events

belongs to one of the vital sectors identified by the authorities. Therefore, the activities in all three core businesses – wholesale, business-to-business and retail – will be continued. In practice, the government measures have been implemented and are not complicated, which allows Catom to show that it is well capable of conducting its business despite this situation. Any risks are related to further developments on a macro level, both in terms of oil prices and in terms of economic developments as a whole in the long run, which may cause sectors such as construction and transport to experience a decline. Such decline has not occurred so far. It might affect the financial results of Catom and its subsidiaries, which has not been the case up to now. Even though it is, naturally, impossible to estimate at this time the degree to which such decline will materialise, Catom is quite confident about its results for the year 2021 in its entirety.

Breda, 21 May 2021

H.P. de Leeuw den Bouter J.W.F. Westerhuis

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5

Financial Statements

€

31 December 2020

31 December 2019

CONSOLIDATED BALANCE SHEET

ASSETS

ASSETS

as at 31 December 2020 (after proposed profit appropriation)

Intangible fixed assets (1)

Development costs

0

13,645

Operating rights

2,539,365

3,010,737

Client portfolio

6,212,667

5,355,386

Goodwill

425,186

555,789

9,177,218

8,935,557

Tangible fixed assets (2)

Land and buildings

1,538,092

1,514,025

Depot installations

849,697

698,401

Petrol stations

38,985,820

29,574,221

Machinery and equipment

2,243,913

1,543,885

Vehicles

5,986,882

4,364,344

49,604,404

37,694,876

Financial fixed assets (3)

685,189

464,371

CURRENT ASSETS

Stocks

Finished product and goods for resale (4)

23,911,960

18,160,861

Finished product and goods in transit

0

1,411,067

23,911,960

19,571,928

Receivables (5)

Trade receivables

40,020,809

46,960,129

Taxes and social insurance contributions

342,470

210,682

Other receivables

4,518,571

3,984,320

44,881,850

51,155,131

Cash and cash equivalents (6)

70,668

11,634,860

128,331,289

129,456,723

50

€

31 December 2020

31 December 2019

SHAREHOLDERS’ EQUITY AND LIABILITIES

Group equity (7)

15,805,446

15,854,948

Provisions (8)

Deferred tax liability

1,015,426

1,004,547

Site restoration

52,963

9,659

Long-service awards

66,217

62,251

1,134,606

1,076,457

Current liabilities (9)

Payables to credit facilities

6,889,841

0

Payables to suppliers and trade payables

11,182,568

17,364,615

Taxes and social insurance contributions

65,038,216

78,886,553

Other liabilities and accrued expenses

28,280,612

16,274,150

111,391,237

112,525,318

128,331,289

129,456,723

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€

2020

2019

CONSOLIDATED PROFIT AND LOSS ACCOUNT

Net turnover (11)

775,545,668

954,093,223

Cost of goods sold

730,852,486

906,372,748

Wages and salaries

11,178,231

10,238,340

for 2020

Social insurance charges

1,732,811

1,726,925

Pension expenses

1,174,722

1,019,936

Other personnel expenses

1,826,315

1,497,254

Amortisation/depreciation and reduction in value

4,948,640

4,339,020

of intangible and tangible fixed assets (14)

Other operating expenses (15)

15,704,754

13,903,744

Total operating expenses

767,417,959

939,097,967

Operating result

8,127,709

14,995,256

Financial income and expenses

-565,034

-309,830

Result before taxes

7,562,675

14,685,426

Taxes (19)

-2,215,173

-3,901,314

Result of participating interests (17)

3,000

4,772

Net result after taxes

5,350,502

10,788,884

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€

2020

2019

CONSOLIDATED CASH FLOW STATEMENT

CASH FLOW FROM OPERATING

ACTIVITIES

Operating result

8,127,709

14,995,256

for 2020

Adjustments for:

Depreciation of tangible and amortisation

4,991,700

4,916,032

of intangible fixed assets (1,2)

Movement in provisions

69,028

6,080

5,060,728

4,922,112

Movements in working capital:

Stocks (4)

-4,340,031

-8,241,489

Receivables

6,273,281

5,523,255

Current liabilities

-937,419

-4,902,812

995,831

-7,621,046

Cash flow from business operations

14,184,268

12,296,322

Interest paid

-565,034

-309,830

Corporation tax paid

-4,040,955

-2,159,077

-4,605,989

-2,468,907

Cash flow from operating activities

9,578,279

9,827,415

CASH FLOW FROM INVESTMENT ACTIVITIES

Investments in intangible fixed assets

-1,380,151

-1,166,900

Investments in tangible fixed assets

-15,851,193

-7,054,832

Investments in group companies

0

0

Investments in financial fixed assets

-394,794

-173,486

Disposals of tangible fixed assets

116,850

319,747

Repayments received on financial fixed assets

176,976

91,624

Cash flow from investment activities

-17,332,312

-7,983,847

54

€

2020

2019

CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid

-10,700,000

-5,300,000

Repayment of subordinated loan

0

0

Repayment of long-term liabilities

0

0

Cash flow from financing activities

-10,700,000

-5,300,000

Net cash flow

-18,454,033

-3,456,432

The movement of cash and cash equivalents was as follows: € 2020

2019

Balance as at 1 January

11,634,860

15,091,292

Movement during the year

-18,454,033

-3,456,432

Balance as at 31 December

-6,819,173

11,634,860

€

2020

2019

Cash and cash equivalents

70,668

11,634,860

Debts to credit institutions

-6,889,841

0

Balance as at 31 December

-6,819,173

11,634,860

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Notes to the consolidated balance sheet and profit and loss account

1. General explanation

1.1. Activities The activities of Catom B.V. (the company), Chamber of Commerce registration number 24287136, having its corporate seat in Breda and its principal place of business at Verlengde Poolseweg 32 in Breda, and its group companies (‘the Group’) mainly comprise: providing logistics services to the oil industry. The activities of the group consist of loading, unloading, transhipment, storage of and the wholesale in oil products and the operation of petrol stations and convenience shops.

Nearly all sales activities take place within the Netherlands.

1.2. Changes in accounting policy There were no changes in accounting policy in 2020.

1.3. Covid-19 Early in 2020 the spreading of the Covid-19 virus became world news. As a result, the government has taken restrictive measures. Catom, as a supplier of fuels and lubricants, forms part of one of the sectors that haven been identified as a vital by the government. As a consequence, the activities of all three core activities – wholesale, business-to business, and retail – will be continued. In practice, the government measures have been implemented and they are not very difficult to follow, which has given Catom a chance to show that it is well capable of adapting to situations like this one. Any risks with regard to further developments on a macro level, both relating to oil prices and to economic developments as a whole in the long run, which might also cause serious setbacks for the construction sector and the transport sector, have not materialised so far. This might affect Catom and its subsidiaries financially, which has not happened as of yet. Even though it is impossible to estimate the degree to which such setbacks might affect Catom, it is very confident about its results for 2021.

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