SHV is facing challenges both external and internal. This is something that in its 128 year existence is part of its DNA.  It does require focus and a balanced approach by the EBD and Boards of the Groups, together with its people. The SBD is in close contact with the EBD to reach over time the best outcome feasible. Next to challenges there are a lot of things going well in SHV, such as a strong balance sheet, improvement of the operational results, an improved free cash flow, more women in leading positions and a strong culture based on the purpose.  

Geopolitical challenges such as Ukraine-Russia and Israel-Gaza conflicts, affect the lives of many. The economic landscape is turbulent, rising interest rates, inflation, supply chain shortages and, since Covid, labour scarcity everywhere. Also, there are internal Group specific (operational) challenges that were and, in some instances, continue to be addressed. The SBD reviewed and discussed these issues on several occasions. 

The strategic decision, following an in-depth review with the EBD to focus (over time) on less Groups, will enable more focus, to unlock better opportunities for value creation and improve results. This resulted in the sale of ERIKS, a process that should be concluded in the first half of 2024. The intended divestment of Mammoet will take time. And SHV has this time. 

Next to specific subjects such as Mammoet Russia and the divestment of ERIKS, the SBD has spent a significant amount of time and attention on the long-term strategic approach, the continuous improvement of overall operational performance, working capital management and cash generation. A consolidated strategic update formulated over a number of SBD meetings also took account of the market developments, risks and challenges, and strategic priorities per Group. We received and discussed regular updates on progress as well as on finalising the divestment of Makro Brazil. We are pleased that Makro Venezuela has found a new partner with the sale of the Makro brand and the transfer of operations to Redvital while still leveraging rental income.

During the year, the SBD gathered for five regular meetings with discussions on a series of deep dives and updates such as the strategic execution at Nutreco and the demanding circumstances in Ecuador. We looked at the overall strategy, the solar and renewables businesses, and the Horizons programme at SHV Energy and discussed the general strategy of NPM, encompassing their theme-based approach and how to support the internationalisation of portfolio companies, The successful exit of Mammoet from Russia with most assets repatriated to Europe was also followed closely.

In June, the SBD travelled for an on-site visit to SHV Energy subsidiary Calor GB located in Birmingham, England. The programme consisted of a briefing on the wider SHV Energy strategy and Horizons programme from the SHV Energy management board. The local management team then presented the current state and their vision for the future. The SBD also received updates on the company’s progress in solar energy and sustainable fuels, namely SunSource Energy and Futuria respectively. A visit was made to the pilot plant for rDME, a potential sustainable substitute for LPG.

Financial updates were received in the form of monthly and quarterly reports. In terms of financing, the SBD looked at overall liquidity, headroom, and approved new bilateral loan agreements. Approval was also given for the transition from Dutch GAAP to the IFRS accounting framework, that will start in 2024. 

With respect to the ESG strategy, the SBD received updates on the three focus areas of Safety, Diversity, Equity & Inclusion (DEI), and Sustainability – most notably regarding the progress of the recent Double Materiality Assessments (DMA) and Greenhouse Gas (GHG) reductions.

Other topics discussed were related to succession management, risk assessment and post investment reviews.

The turbulent times in 2023 have demanded a lot from all SHV colleagues as together they navigated the challenges to safeguard a stable, sustainable SHV for generations to come and we want to thank them for that. Also, we would like to express our thanks to the EBD, Jeroen, Ricardo, Floris and Eelco, whose efforts have been essential in steering the company through another year of uncertainty.  

The composition of the SBD has remained unchanged. Mr Boer (Deputy Chairman) and Mrs Fentener van Vlissingen (Chairman) were re-appointed as members for another four years at the AGM of April 14, 2023.

After eight years as CEO of SHV, Jeroen Drost has decided he will step down after the Shareholders meeting in April 2024. We are grateful for his years as CEO, guiding SHV and its Groups into the next phase of its existence. He will be succeeded by Floris de Ryck who has been a member of the EBD for eight years and has prior experience at Makro and SHV Energy. 

During the Shareholders meeting, we will propose to appoint Mr Bram Gräber, currently CEO of SHV Energy, as member of the SHV EBD. A CFO will become part of the EBD in time.

Eelco Hoekstra stepped down as a member of the EBD per January 1st, 2024, but will remain on as an advisor to the SBD and the EBD. We want to thank Eelco for his contribution during his time at SHV.

We must recognise that the challenges we faced during 2023 are far from over. The SBD remains committed to doing everything possible to support all to protect market positions and encourage growth. Under the leadership of the EBD and the management Boards of the different Groups, SHV will address the many challenges ahead.

Utrecht, 11 March 2024

On behalf of the Supervisory Board of Directors,

A.M. Fentener van Vlissingen
Chairman