Catom Annual Report 2019 EN

Catom B.V.

ANNUAL REPORT 2019

Catom B.V.

ANNUAL REPORT 2019

CONTENTS

1. 2. 3. 4. 5.

Company profile Mission and Vision

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12 20 30 49 50 52 54 56 82 82 84 85 94

Strategy

Management report Financial Statements

Consolidated balance sheet as at 31 December 2019 Consolidated profit and loss account for 2019

Consolidated cash flow statement for 2019

Notes to the consolidated balance sheet and profit and loss account

Company Financial Statements

Balance sheet as at 31 December 2019

Profit and loss account for 2019

Notes to the balance sheet and profit and loss account Other information and Independent auditor’s report

6.

Colophon

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Catom B.V.

2006

2007

2008

2010

2013

2005 2004

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.

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2014

2015

2016

2017

2018

2019

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

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.

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1

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 purposes of 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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9

net profit (keuro)

personnel

net profit (keuro)

personnel

Catom was set up in 1998 by two entrepreneurs with extensive experience in the oil industry. Since its inception, the company has expanded explosively due to both takeover and autonomous growth. Turnover in 2019 came to 954 million euros, which is a slight decrease compared to 2018. Catom has its head office in Breda and four regional offices in Staphorst, Arnhem, Tholen and Lelystad. The company has a total of 378 employees at year-end, which is equivalent to 266 employees in FTE.

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2

Mission and Vision

Mission 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.

Vision 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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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 both 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.

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 contem- plating such a move. Expansion will predominantly remain focused on the Dutch market, which offers plenty of opportunities.

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Details and repetitive action

look at the work process from that perspective.

Catom’s business operations are characterized 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

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. This annual report includes works of art and sources of inspiration by artist Marc Mulders, as an example of the strive for perfection. This year’s key theme is glass. Glass is transparent, it breaks the light, and it has the power to show things in another 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, Erasmusraam , 2016, stained-glass window, De Grote Kerk, Gouda

Left: Marc Mulders, Mandala (Kosmos) , enamel stained glass paint on float glass, 100 x 100 cm

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3

Strategy

Strategy

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 specific market conditions and opportunities within that segment.

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 sell off their trading activities and petrol stations. 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

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 2019, 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 2020. Storage capacity and

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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

partnerships or are willing to sell their company to Catom. The ambition is to continue enhancing our current market position over the next few years, with a market share of around 20% based on thousands of active customers, with a total of 378 million litres of fuel and well over 6 million litres of lubricants. Retail Similarly, the growth strategy for retail activities is primarily focused on acquisi- tions. Following the successful launch of the staffed formula OK ShopPoint, the

maintaining our own stock will result in strategic independence and greater flexibility, thereby ensuring better service provision to the customer.

Reselling

The reselling market is a 100% displace- ment market, the logical consequence of this being that growth will be accomplished mainly 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

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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 INCREASED BY 14%. Number of petrol stations +8.

Financing

organisation is ready to roll this concept out further. Moreover, an unmanned concept has been realised with OK Express. Developments in both the upper and lower ends of the market are playing a role in 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 contemplating selling their station(s). In recent years, Catom has proved itself to be a serious partner to both sides of the market.

The company is very much interested in takeovers and in practical terms is capable of financing these from its own balance sheet position.

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Wholesale

competitive pricing can be achieved for customers. With more than 190 buyers and a volume of over 939 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.

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 communicated 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

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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 way of 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.

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 agri- cultural 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 administration 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.

For the purposes of transporting fuel in the reselling market, OK Oliecentrale has

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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

60 trucks in service, all owned by the company. Around 22 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 enable it to supply customers efficiently and on time. Storage and warehousing are partly performed in-house. Part of the storage and warehousing 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 As at year-end 2019 73 petrol stations nationwide form part of the retail activities. Of these 73 stations, 52 are operating under the proprietary OK brand. 37 of them are staffed and feature a modern shop, while the other 16 are unmanned. 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. 2020 is proving to be another good year for our retail activities. Both in newly built and acquired retail activities: the first takeover has already been signed for and will take place in early July; in addition to

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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unmanned carwash concepts. The first locations with unmanned washing boxes have already been realised, and the first unmanned roll-over unit will become operational in 2020 as well. It goes without saying that all of them will have the familiar OK look and quality. Last but not least, savings and paying methods must not be forgotten. In 2019 we have gained more experience in using convenient payment methods. All shops are now fit out for paying by mobile phone and the number of contactless payment points, for example in coffee machines and restroom facilities, is ever-increasing. A rather new facility is contactless payment for washing boxes and vacuum cleaners. OK takes the lead with its newly built location in Emmen, and more of them will follow in the course of 2020. The core values of ShopPoint: tranquillity, space, hygiene, atmosphere and range, are well monitored in all aspects.

the acquisitions, at least two new stations will be realised in 2020.

ShopPoint In 2019 a great deal of hard work was done within ShopPoint on further deve- loping and rolling out the distinctive retail concept, which is expressed in the petrol station opened in Emmen in March 2018. The new concept under the name of OK Café has been scrutinised and improved to make it workable for various locations by motorways or in town centres. In 2020, the roll-out will be continued and 4 shop location will be rebuilt to fit the new shop concept. In addition to the shop concept, the carwash locations at several petrol stations will receive a makeover. With high quality washing machines and wash boxes, the customer will be offered additional services. Fresh colours and good products have lured a growing number of customers to the washing facilities. In 2020, the carwash facilities will be extended, focusing on

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4

Management report

General information

In 2019, again, the international (crude) oil industry was volatile. The local markets of finished products may well be charac- terized by their own dynamics, but are nonetheless, as a rule, affected by that volatility. The market prices of our major products showed a slight increase over the year, with a short period of a considerable decline at the end of May. On the whole, prices have increased, and the result was a positive effect on the stock. As Catom’s stock is still limited compared to the total throughput, these stock effects always remain relatively limited. This 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

In 2019, Catom again achieved good results. Ever since its establishment in 1998, the company has experienced uninter- rupted turnover and profit growth, as a result of both takeovers and autonomous growth. In the present reporting year, again, several takeovers were realized. The takeover of a multi-branded lubricant trader focusing on the shipping industry, the position on water was further extended, and by the takeover of two traders on land some business-to-business volume was added, as well as a new activity, i.e. the assembly, repair and supply of small and midsize (above-ground) tanks for the B2B customers. The network of OK petrol stations was also further expanded by the acquisition and rebranding of a number of third party locations and the construction of two state-of-the-art (as of yet) unmanned petrol stations.

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stations under own operation, the number of employees saw a further increase. On balance, the number of employees rose from 243 FTEs (2018) to 266 FTEs (2019). At year-end 2019, 378 people were employed with Catom. Catom’s strategy is focused 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.

of fuel, and optimizing that supply, significant margin improvements have been realised. Further work took place in 2019 to improve efficiency. After the successful completion of the company-wide roll-out of the digitalization and automation of the procurement process workflow, a start was made in 2019 to digitalize the data- flow on the sales side of the fuel process. All deliveries are recorded by our drivers by means of a digital photograph and uploaded via an app to the ERP system, and invoices are generated from there. As all delivery notes are now in digital form, we have created a situation in which the percentage of digital invoicing can be further increased (presently 74%). This project is key to a substantial improvement of overall efficiency.

With the further growth of the retail network and with Catom taking a number of petrol

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Turnover and results

Investments

Turnover in terms of money dropped by 2.73% in 2019 to € 954 million. The volume of motor fuels sold grew by 0.14%. The volume of lubricants sold dropped by 2.61%. The gross profit on sales (turnover minus purchase cost of goods sold) rose by 29.29%. This turnover and gross margin led to an EBITDA of € 19,339,048 and a group result before taxes of €  14,685,426. The balance sheet total rose to € 129 million. Solvency came to 12.2% (2018: 12.4%). . The liquidity ratio was 73% (2018: 75%). The company’s liquidity level is safe- guarded in part by the credit facility. The financial figures relate to the 2019 financial year, which coincides with the calendar year.

Investments in intangible and tangible fixed assets in 2019 were € 8,548,880 (2018: € 7,429,765). Of this, € 5.4 million (2018: € 3.3 million) concerned the take- over and improvement of petrol stations. Catom also invested in acquisitions, vehicles and vessels, software and hard- ware, and other machinery. In 2020 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

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 volume 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 6%. 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.

The investments in 2019 were all financed with internal funds. The total credit facility amounts to € 50 million. The cash flow from operating activities increased from € 9,250,401 to € 10,275,897, stock and operating capital effects, in conjunction with the investment and financing activities result in a decrease of cash of well over € 3.5 million. No major changes are expected in the company’s financing structure in the medium term.

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 internatio- nal market fluctuate significantly each day, increasingly even during the course of a day. Catom participates in this trend by

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the number of OK stations continued, thanks to, inter alia, the acquisition of a number of petrol stations and the renovation 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 13.97% Research During the financial year no work was done in the area of research and develop- ment, which has led to capitalisation.

Reselling In the reselling division – resale of fuels and lubricants by OK Oliecentrale BV and OK Marine B.V. – the volume of motor fuels increased by 4.9%. The volume of lubricants sold dropped by 2.61%, particularly due to an exceptionally large one-off order in 2017. In a slightly declining reselling market, Catom has succeeded in enhancing its market leadership position. In addition to the takeover of two small oil traders on the land, Catom also acquired one oil trader on water, specialising in lubricants, during the year under review. As a consequence, also thanks to its efficient and safety-conscious operations, Catom has an excellent starting position in this market, which shows a growing concentration trend. Retail Retail again experienced significant developments in 2019. The expansion of

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Financial risk recognition, risk appetite and risk control 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.

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.

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the timely identification, assessment and reporting of risks.

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. Other risks, compliance with laws and regulations, safety 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 operations. 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 transparency in terms of

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 documented 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.

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specialised organisation and, where necessary, specialists in the various insurance fields.

To this end, a tool was developed containing all legislation 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

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 reporting 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

parties. The insurance portfolio is monitored in collaboration with a

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of petrol stations previously run by dealers and taking over trading activities from fuel traders. The turnover per employee in this retail segment is much lower than for the other activities; the average turnover per employee in 2019 dropped by 11%. All personnel members are employed by the Dutch companies. Catom B.V. 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 acquisitions, and particularly through a further increase of the number of petrol stations operated by the company itself.

assessed in the context of the 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 significant, but which may turn out to be significant nonetheless.

Personnel and organisation

The average number of employees, expressed in FTE, rose during the reporting year from 243 to 266. This increase was mainly due to the acquisition of petrol stations, taking over the operation

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Automation and training

The breakdown of personnel by activity is as follows:

In 2019, according to plan, investments were again made in the training and education of personnel. 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.

6 in management and staff positions 192 in sales and financial departments 68 logistics employees The percentage of women in the company’s workforce decreased slightly from 47% to 45%. 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.

Safety and the environment

The safety of people and their environ- ment 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 envi- ronment. Catom has its own environmental and safety policy for this.

It goes without saying that Catom complies with the statutory blending obligations

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Additionally, one Euro 5 truck has been replaced by a Euro 6 truck. 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 combustion. This innovative product developed by Shell is only made available by Shell to a number of its large customers, including its branded distributors (resellers).

with respect to biofuels; in 2019 12.50% (2018: 8.50%). Catom seeks to strictly use second generation (‘double-counting’) biofuels for this purpose, thus surpassing the legal requirements. 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 plan- ning transport volumes and motor fuels volumes loaded, inter alia by using remo- tely readable volume measuring systems and by partly outsourcing the transport of large volumes. As a result, a slight increase (0.9%) of the transported volume (6,5%) was realised. We thus realized a substantial increase (5.5%) of the average volumes loaded. In 2018, 7 Euro 3 trucks were already replaced by Euro 6 trucks and the order for the replacement of 9 Euro 3 trucks by Euro y6 trucks is about to be delivered.

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internal and external audits were carried out in 2019, including the external BRZO, WABO and ISCC audits (regarding the storage, transport and blending of biofuels). The implementation of the new RI&E, as well as PMO is ongoing and expected to be completed in Q2 2020.

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 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 CO 2 emissions may be reduced to up to 89% in the who chain. Compressed natural gas is sold at two 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 recertifi- cation 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. for the trade names Oliecentrale Nederland and OK Nederland. All mandatory

In 2019, 1 environmental incident occurred and 2 incidents leading to injury.

Outlook

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. The Executive Board continues to aim for market leadership in all segments the company operates in. Considering the consolidation initiatives in the market,

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of fuels and lubricants, Catom is active in one of the sectors that the government has identified as vital, which means that its core activities in wholesale, B2B and retail will be continued. Practice has shown that the government measures have been implemented in such way that they are workable, and Catom has been well able to adjust to the present situation. The risks, if any, lie in further macro-economic developments, both in terms of fuel prices and in terms of economic developments on the whole in the long run; we might see a sharp decline in other industries such as construction and transport, which could also affect the financial results of Catom and its subsidiaries. It goes without saying that it is impossible to say, at this time, just how detrimental these developments will be, but in spite of that uncertainty, Catom is confident that its results over 2020 will be satisfactory.

acquisitions are again quite possible in 2020 in order to realise this ambition. In this context, in 2020 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 2020. No material events have taken place between the balance sheet date and the date of signing of the annual accounts for 2019 that would need to be presented or disclosed in the annual accounts. Having said that, several oil traders and petrol stations were already taken over in the first quarter of 2020. Earlier this year, the outbreak and spread of Covid-19 became world news. In response to this pandemic, restrictive measures were imposed by the Dutch government with effect from mid-March 2020. As a supplier Subsequent events

Breda, 18 May 2020

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

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5

Financial Statements

€

31 december 2019 31 december 2018

CONSOLIDATED BALANCE SHEET as at 31 December 2019 (after proposed profit appropriation)

ASSETS

ASSETS

Intangible fixed assets (1)

Development costs

13,645

47,755

Operating rights

3,010,737

2,899,924

Client portfolio

5,355,386

5,286,623

Goodwill

555,789

686,393

8,935,557

8,920,695

Tangible fixed assets (2)

Land and buildings

1,514,025

1,552,064

Non-operating assets

0

339,597

Depot installations

698,401

696,053

Petrol stations

29,574,221

26,764,557

Machinery and equipment

1,545,377

946,521

Vehicles

4,362,852

4,426,624

37,694,876

34,725,416

Financial fixed assets (3)

464,371

316,238

CURRENT ASSETS

Stocks

Finished product and goods for resale (4)

18,160,861

11,330,439

Finished product and goods in transit

1,411,067

0

19,571,928

11,330,439

Receivables (5)

Trade receivables

46,960,129

47,659,498

Taxes and social insurance contributions

210,682

244,287

Other receivables

3,984,320

8,774,601

51,155,131

56,678,386

Cash and cash equivalents (6)

11,634,860

15,091,292

50

129,456,723

127,062,466

€

31 december 2019 31 december 2018

SHAREHOLDERS’ EQUITY AND LIABILITIES

Group equity (7)

15,854,948

15,766,063

Provisions (8)

Deferred tax liability

1,004,547

995,690

Site restoration

9,659

10,991

Long-service awards

62,251

72,553

1,076,457

1,079,234

Current liabilities (9)

Payables to suppliers and trade payables

17,364,615

15,606,427

Taxes and social insurance contributions

78,886,553

77,718,032

Other liabilities and accrued expenses

16,274,150

16,892,710

112,525,318

110,217,169

51

129,456,723

127,062,466

€

2019

2018

CONSOLIDATED PROFIT AND LOSS ACCOUNT

Net turnover (11)

954,093,223

980,824,732

Cost of goods sold

906,372,748

943,628,322

Wages and salaries

10,238,340

9,167,628

for 2019

Social insurance charges

1,726,925

1,467,828

Pension expenses

1,019,936

906,424

Other personnel expenses

1,497,254

1,091,669

Amortisation/depreciation and reduction in value

4,339,020

4,286,999

of intangible and tangible fixed assets (14)

Other operating expenses (15)

13,903,744

12,500,811

Total operating expenses

939,097,967

973,049,681

Operating result

14,995,256

7,775,051

Financial income and expenses

-309,830

-473,243

Result before taxes

14,685,426

7,301,808

Taxes (19)

-3,901,314

-2,027,659

Result of participating interests (17)

4,772

3,000

Net result after taxes

10,788,884

5,277,149

52

€

2019

2018

CONSOLIDATED CASH FLOW STATEMENT

CASH FLOW FROM OPERATING

ACTIVITIES

Operating result

14,995,256

7,775,051

for 2019

Adjustments for:

Depreciation of tangible and amortisation

4,916,032

5,487,140

of intangible fixed assets (1,2)

Movement in provisions

6,080

-2,117

4,922,112

5,485,023

Movements in working capital:

Stocks (4)

-8,241,489

-598,203

Receivables

5,523,255

-8,480,714

Current liabilities

-4,902,812

7,795,506

-7,621,046

-1,283,411

Cash flow from business operations

12,296,322

11,976,663

Interest paid

-309,830

-473,243

Corporation tax paid

-2,159,077

-2,253,019

-2,468,907

-2,726,262

Cash flow from operating activities

9,827,415

9,250,401

CASH FLOW FROM INVESTMENT

ACTIVITIES

Investments in intangible fixed assets

-1,166,900

-836,461

Investments in tangible fixed assets

-7,054,832

-4,683,965

Investments in group companies

0

-3,555,997

Investments in financial fixed assets

-173,486

-67,840

Disposals of tangible fixed assets

319,747

1,091,461

Repayments received on financial fixed assets

91,624

279,741

Cash flow from investment activities

-7,983,847

-7,773,061

54

€

2019

2018

CASH FLOW FROM FINANCING

ACTIVITIES

Dividend paid

-5,300,000

-4,500,000

Repayment of subordinated loan

0

-296,514

Repayment of long-term liabilities

0

0

Cash flow from financing activities

-5,300,000

-4,796,514

Net cash flow

-3,456,432

-3,319,174

The movement of cash and cash equivalents was as follows: € 2019

2018

Balance as at 1 January

15,091,292

18,410,466

Movement during the year

-3,456,432

-3,319,174

Balance as at 31 December

11,634,860

15,091,292

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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 2018.

1.3. Consolidation The consolidated annual accounts in include the financial data of the company and its group companies, as well as other legal entities and companies over which it is able to exercise control or which are under its centralised management. The financial data of the group companies and other consolidated legal entities and companies are fully included in the consolidated annual accounts, after elimination of intercompany balances and transactions. Items included in the consolidated annual accounts are stated on the basis of uniform principles for the valuation of assets and liabilities and the determination of results, i.e. the accounting policies of the company. Since the company’s financial data are included in the consolidated annual accounts, the company annual accounts include only an abridged profit and loss account pursuant to Section 2:402 of the Dutch Civil Code.

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