BREDERODE
ANNUAL REPORT
2023
Cover: iStock
There is no favourable wind for someone
who does not know where he is heading
(Sénèque)
Table of contents
1. Mission and strategy ...............................................................................................................................................................................................................2
2. Board of Directors .....................................................................................................................................................................................................................3
3. Corporate governance statement ..................................................................................................................................................................................3
4. Declaration by executive management......................................................................................................................................................................3
5. Key figures .....................................................................................................................................................................................................................................4
6. Management report ................................................................................................................................................................................................................ 6
6.1. Summary of the results ........................................................................................................................................................................................6
6.2. Portfolio management by Brederode and its subsidiaries ............................................................................................................8
6.2.1. Private Equity Portfolio .................................................................................................................................................................. 9
6.2.2. Listed securities portfolio ......................................................................................................................................................... 18
6.3. Financial structure ...............................................................................................................................................................................................21
6.4. Related party transactions ..............................................................................................................................................................................21
6.5. Law on transparency obligations ...............................................................................................................................................................21
6.6. Activities in the field of research and development .......................................................................................................................21
6.7. Events following the reporting period ................................................................................................................................................... 21
6.8. Proposed distribution to shareholders ................................................................................................................................................... 21
6.9. Outlook .......................................................................................................................................................................................................................22
6.10. Change in the composition of the board of directors ..................................................................................................................22
6.11. Main characteristics of internal controls and risk management ..............................................................................................22
6.11.1. Control environment ..................................................................................................................................................................22
6.11.2. Risk management policies ....................................................................................................................................................... 23
6.11.3. Control activities ............................................................................................................................................................................25
6.11.4. Information, communication et oversight ....................................................................................................................26
6.11.5. Audit .....................................................................................................................................................................................................26
6.12. Corporate, social and environmental responsibility (CSR) ..........................................................................................................26
7. Brederode shares listing .....................................................................................................................................................................................................27
8. Individual (non consolidated) financial statement as at 31 December 2023 ...................................................................................29
8.1. Individual statement of financial position .............................................................................................................................................29
8.2. Individual profit and loss account .............................................................................................................................................................. 29
8.3. Individual statement of cash flows ............................................................................................................................................................ 30
8.4. Individual financial statement of changes in equity .......................................................................................................................30
8.5. Accounting principles and policies ........................................................................................................................................................... 31
8.6. Notes ............................................................................................................................................................................................................................37
8.7. Management of financial risks......................................................................................................................................................................44
8.8. Post-balance sheet events .............................................................................................................................................................................. 46
9. Report of the Réviseur d’Entreprises Agréé ...........................................................................................................................................................47
10. Financial calendar ..................................................................................................................................................................................................................52
1. Mission and strategy
Brederode S.A. (hereafter “Brederode”) is an international investment firm whose shares are listed on the regulated markets
of Euronext Brussels and the Luxembourg Stock Exchange.
After a long history stretching back to the year 1804, the company underwent a fundamental change in strategy in 1977 at
the instigation of the new reference shareholders. The new approach involved the gradual withdrawal from direct industrial
and commercial activities in favour of acquiring, for its own account, positions, generally of a minority nature, in companies
with no involvement in their management. Since then, Brederode’s aim has been to regularly increase its shareholders’ net
worth by recurrently generating not only dividends but also (and above all) capital gains. Its portfolio is henceforth made
up of two different and complementary sectors; that of investments in unlisted companies (“Private Equity”) and that of
investments in listed securities.
For more than 30 years, Brederode has progressively focused on the management of its Private Equity portfolio, which
has become its main centre of activity. The appeal of Private Equity is linked to the opportunity it offers of securing higher
returns than those expected from the stock market. Success here involves the rigorous selection of an international
network of top-level managers, coupled with ongoing monitoring.
The long experience that Brederode has accumulated in this domain has been one of the main contributing factors to the
company’s overall performance over many years.
Beyond its own return objectives, the listed securities portfolio is increasingly regarded as an ultimate financing reserve in
support of Private Equity. It continues to be subject to rigorous management, with the aim of achieving a balance between
its defensive character and the objectives of profitability, liquidity and growth.
Brederode is today one of the few companies specialised in Private Equity, publicly traded and self-managed to the
exclusive interest of its shareholders.
Brederode also benefits from the stability of its controlling shareholder from which the executive management emanates.
This means that the latter can take a long term view, less subject to the influence of disruptive external factors and therefore
less affected by short-term considerations.
Finally, Brederode benefits from an overall level of management costs lower than that of the market and an uncompromising
governance structure.
BREDERODE S.A.
2
2. Board of Directors
Bruno Colmant, independent non-executive President
(with effect from 1 July 2023, independent Director from 1 January to 30 June 2023)
Pierre van der Mersch, Executive Vice-President
(with effect from 1 July 2023, President from 1 January to 30 June 2023)
Luigi Santambrogio, Managing director
Nicolas Louis Pinon, Executive director
René Beltjens, Independent director
Axel van der Mersch, Non-executive director
3. Corporate governance statement
In 2023, Brederode complied with the 4th edition of the «X Principles of corporate governance of the Luxembourg Stock
Exchange». On 30 May 2014, Brederode adopted a Corporate governance charter, which entered into force on 19 July 2014.
The Charter was last revised on 11 September, 2023. The Charter is available on the company’s website at www.brederode.eu
under the “Governance” tab. The Corporate governance statement for the 2023 financial year is available in the notice of the
annual general meeting.
4. Declaration by executive management
In the name and on behalf of Brederode, we hereby confirm that, to the best of our knowledge:
a) This set of separate summary financial statements, drawn up in accordance with the applicable body of accounting
standards, gives a true and fair view of the assets and liabilities, the financial position and the profits or losses of Brederode;
b) The management report contains a faithful presentation of important events and the principal related party transactions
during the financial year as well as their effect on the set of separate financial statements, as well as a description of the
principal risks and uncertainties for the financial year.
Luxembourg, March 11, 2024
For the Board of Directors
Luigi Santambrogio, Managing Director Nicolas Louis Pinon, Executive Director
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ANNUAL REPORT 2023
5. Key figures
KEY FIGURES OF BREDERODE’S INDIVIDUAL (NON-CONSOLIDATED) FINANCIAL STATEMENTS (IFRS)
(in € million) 31 12 2023 31 12 2022
Shareholders’ equity 3 767.21 3 569.31
Profit for the financial year 233.65 -73.30
Amounts distributed to shareholders 35.75 33.70
Adjusted figures per share (in €)
Shareholders’ equity 128.55 121.80
Profit for the financial year 7.97 -2.50
Amounts distributed to shareholders 1.22 1.15
Market price at the end of the financial year 101.60 108.60
Ratios
Return on average equity (1) 6.4% -2.0%
Number of shares used in the profit
For shareholders’ equity and basic earnings 29 305 586 29 305 586
(1) Return on Equity: Results for the financial year divided by the average shareholders’ equity. This ratio measures the internal profitability of a company..
KEY FIGURES RELATED TO THE INVESTMENT ACTIVITIES OF BREDERODE AND ITS SUBSIDIARIES
The graphs below show the increase in net asset value per share as well as in distributions to shareholders over the last ten
financial years.
BREDERODE S.A.
4
12/2023202220212020201920182017201620152014
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0
20
40
60
80
100
120
140
12/2023202220212020201920182017201620152014
63.22
68.59
83.27
91.19
121.80
125.45
128.55
58.20
53.05
45.80
0.77
0.85
0.94
1.02
1.08
1.15
1.22
0.70
0.65
0.62
12/2023202220212020201920182017201620152014
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0
20
40
60
80
100
120
140
12/2023202220212020201920182017201620152014
63.22
68.59
83.27
91.19
121.80
125.45
128.55
58.20
53.05
45.80
0.77
0.85
0.94
1.02
1.08
1.15
1.22
0.70
0.65
0.62
LONGTERM PERFORMANCE 10 YEARS: 14.4% PER ANNUM 1
(1) Internal Rate of Return (IRR) of shareholders’ equity, based on the value of equity as at 31 December 2013 (€38.18) and as at December 2023
(€128.55) as well as the distributions to shareholders over the 10 years period.
Distributions per share (EUR)
Equity per share (EUR)
5
ANNUAL REPORT 2022
6. Management report
Ladies and gentlemen,
It is our pleasure to report to you on the activities of BREDERODE during the 2023 financial year.
6.1. Summary of the results
Characterised by a gloomier geopolitical context, increasing fragmentation of the economic blocs and uncertainties
linked to interest rate rises, 2023 unfolded against an unpredictable backdrop, which saw a slowdown in Private Equity
transactions. At the same time, the stock markets rallied, led by the United States and technology shares.
Brederode’s net income for the 2023 financial year was €233.65 million, compared to the net loss of €73.30 million in 2022.
The listed securities portfolio, which made a profit of €182.12 (€-214.60 million for the previous financial year), fully played
its role in complementing the Private Equity portfolio, whose net profit of €58.81 (€141.85 million for the previous financial
year) was more moderate, having been unfavourably influenced by the weakening of the Dollar compared to the Euro in
the final quarter.
The net asset value per Brederode share rose from €121.80 to €128.55 during the 2023 financial year, which, given the
shareholder distribution of €1.22 per share in May 2023, represented a value creation of 6.4%. The result per share was €7.97,
compared to €-2.50 for the previous financial year.
The Board of Directors resolved, at its meeting held on 11 March 2024, to propose to the General Meeting to be held on
the 8th of May 2024 a shareholder distribution of €1.29 per share. If the General Meeting approves this proposal, it would
represent an increase of 6% in shareholders’ remuneration and the 21st consecutive annual increase.
BREDERODE S.A.
6
SUMMARY OF ANNUAL RESULT
4 000
3 500
3 000
2 500
2 000
1 500
3 569.31
58.81
182.12
-4.19
3 767.21
-3.09
-35.75
0
500
1 000
Equity as at 01 01 2023
Equity as at 31 12 2023
Distribution to shareholders
Private Equity result
Listed Securities result
Group managment costs
Other elements in the results
7
ANNUAL REPORT 2023
6.2. Portfolio management by Brederode and its subsidiaries
The following table provides details of the contribution of the main assets and liabilities of Brederode and its subsidiaries to
the income as expressed in the separate Financial Statements of Brederode.
(in € million) 31 12 2023 31 12 2022
Private Equity management result (1) 58.81 141.85
Listed Securities management result 182.12 -214.60
Other operating income and expenses (2) -4.09 -5.67
OPERATING RESULT 236.84 -78.42
Net financial Income (expenses) -2.80 5.15
Taxes -0.39 -0.03
PROFIT FOR THE PERIOD 233.65 -73.30
(1) After deduction of the management fees and the carried interest paid to the managers..
(2) This includes all the general expenses specific to Brederode and its subsidiaries in the amount of €3.09 million for the 2023 financial year (€4.32 million
for the 2022 financial year), that is, 0.08% of the portfolio.
The following table provides details of the contribution of the main assets and liabilities of Brederode and its subsidiaries to
shareholders’ equity as expressed in Brederode’s separate financial statements.
(in € million) 31 12 2023 31 12 2022
NON CURRENT ASSETS
3 914.99 3 608.07
Fixed assets 1.66 1.66
Non-current financial assets 3 913.32 3 606.40
- Private Equity Portfolio 2 636.65 2 487.51
- Listed Portfolio 1 276.68 1 118.89
Other non-current assets 0.01 0.01
CURRENT ASSETS 26.49 25.33
Cash and cash equivalents 21.59 10.70
Tax receivable 2.84 2.65
Receivables and other current assets 2.06 11.98
TOTAL ASSETS 3 941.48 3 633.40
CURRENT LIABILITIES -174.26 -64.06
Short-term debt -150.60 -54.68
Debts arising from purchases of financial assets -18.90 -4.77
Tax due -2.18 -2.19
Other current liabilities -2.58 -2.42
TOTAL LIABILITIES -174.26 -64.06
THIRD PARTY SHARE (minority shareholders) -0.02 -0.03
TOTAL NET ASSETS 3 767.21 3 569.31
BREDERODE S.A.
8
6.2.1. Private Equity Portfolio
Introduction
Brederode’s Private Equity portfolio comprises mainly commitments to fixed-term (10-12 years) associations most often
referred to as “Limited Partnerships”, or simply “Funds”. These Funds consist of, on the one hand, a team of managers (the
“General Partner”) made up of a small group of experienced professionals, and, on the other hand, of institutional investors
(the “Limited Partners”), to which Brederode belongs through its subsidiaries.
The latter undertake to respond, during a period generally limited to five years (the ‘commitment period’), to capital calls
from the General Partner up to a maximum amount known as the “Commitment”. The General Partner invests the amounts
called during the commitment period in various projects and manages them until the time of their exit, generally after 4
to 7 years.
The Brederode group has chosen to participate essentially in Funds pursuing a “buyout”-type strategy, i.e. aimed at
acquiring a controlling interest, using an appropriate financial leverage (“leveraged buyout”), in already mature companies
with predictable cash-flows and offering expansion or consolidation opportunities
Brederode also analyses all opportunities of direct co-investments in certain projects deemed to be promising, in parallel
with certain Funds.
Every commitment to invest in a new Fund is made only after a due diligence process which systematically includes
interviews with the managers and an in-depth examination of all ad-hoc documents.
The initial analysis mainly relates to the quality and cohesion of the management teams, the investment strategy and
market opportunities, past performance, deal origination, value creation capabilities, future exit options and corporate,
social and environmental responsibility (CSR) matters.
Investments are monitored on the basis of detailed quarterly reports, audited annual accounts of the Funds, and through
direct and frequent contacts with the managers.
Brederode’s involvement in Private Equity dates back to 1992. Relying on the strength of its cumulative experience and
its network of contacts, the Brederode group is able to focus on the most promising projects led by the best teams of
specialised managers.
Through its involvement in Private Equity, Brederode provides risk capital to private companies with a view to helping them
in their development and growth. In so doing it also allows its own shareholders to take part indirectly in investments
offering above-average profitability that are in principle only accessible to institutional players.
9
ANNUAL REPORT 2023
Advantages of the Buyout style
Brederode has chosen to privilege the Buyout segment among the range of different investment styles used in the global
Private Equity market for the following reasons:
1. Alignment of interests of the parties involved
The interests of each of the parties involved are optimally aligned thanks to incentives put in place aimed at encouraging
both the General Partners and the management of the acquired companies to maximise the return on investment for the
shareholders over a period of generally four to seven years.
2. Long-term value creation
Since the companies remain private or become private further to their acquisition, their management teams are in a
position to take strategic initiatives that may generate a temporary reduction in profitability, with a view to significantly
improving the company’s valuation at the time of its sale. Such actions would be difficult to take for a public company
as they could be interpreted as “profit warnings” and not as positive actions aimed at improving the performance of the
company over the long term.
3. Optimisation of financial leverage
Companies backed by PE firms are able to fine tune their capital structure with an appropriate amount of leverage that
optimally fits the business plan for the investment period.
4. Rigour and discipline
The board of a PE backed company, generally controlled by representatives of the General Partner, is focused on a number
of KPIs, Key Performance Indicators. Such KPIs tend to zero in on cash metrics, on the progress of operational improvements,
on the speed of execution of the business plan etc. and allow to spot and correct underperformance in the business very
quickly. This focus provides significant downside protection to investors and gives comfort to the company lenders. The
speed of reactions of companies subject to the discipline of Private Equity is a significant competitive advantage.
5. Talent
Because of the clear incentives based on tangible performance (IRR), PE firms are able to attract the best talent for both their
own business and for the portfolio companies they acquire, for the ultimate benefit of their investors.
BREDERODE S.A.
10
Performance
The contribution of the Private Equity segment to the annual result was €58.81 million, compared with €141.85 million for
the previous year.
The performance of Brederode in Private Equity over the past ten years, drawn up in accordance with IFRS standards and
based on net annual cash flows, is as follows:
(in € million) 10 years 5 years 3 years 1 year
Value at the beginning of the period 517.67 1 049.48 1 554.83 2 487.51
Cash flow during the period -28.28 -145.28 -35.91 -62.00
Value at the end of the period 2 636.65 2 636.65 2 636.65 2 636.65
IRR (Internal Rate of Return) (1) 19.0% 17.9% 18.8% 3.4%
(1) Internal Rate of Return (IRR) of the Private Equity portfolio calculated on the market value at the beginning and end of the period as well as the net
annual cash flows.
The valuations at the beginning and at the end of the financial year are those reported in the IFRS-accounts on the basis
of preliminary information available at the time of the closing of the accounts. The performance variances with the final
valuations are not significant.
Changes in the portfolio
(in € million) 31 12 2023 31 12 2022
Private Equity portfolio at the beginning of the financial year 2 487.51 2 343.73
Investments 347.72 345.42
Disposals -287. 86 -366.37
Change in fair value 89.28 164.73
Private Equity portfolio at the end of the financial year 2 636.65 2 4 87. 51
Movements in uncalled commitments
(in € million) 31 12 2023 31 12 2022
Commitments at the beginning of the financial year 1 254.86 1 015.54
Variation in existing commitments -345.00 -230.82
New commitments (2) 288.24 470.14
Commitments at the end of the financial year 1 198.09 1 254.86
(2) At historical exchange rate
11
ANNUAL REPORT 2023
-50
0
50
200
250
100
150
300
350
RésultatsDésinvetissementsInvestissementsEngements nouveaux
400
24
5
14
79
196
20
45
-7
66
117
226
197
New
commitments
Investments Disposals Results
Asia / Pacific 24 5 14 -7
Europe 66 117 79 20
USA 197 226 196 45
Total 288 348 288 59
Geographical Summary of Private Equity activities (in € million)
BREDERODE S.A.
12
USA
Europe
59%
39%
2%
59%
38%
3%
2023 12
2022 12
USA
Europe
68%
27%
5%
68%
28%
4%
2023 12
2022 12
59%
40%
1%
60%
39%
1%
2023 12
2022 12
USD
EUR
USD
EUR
71%
27%
2%
70%
28%
2%
2023 12
2022 12
Asia / PacificAsia / Pacific
Other Other
USA
Europe
59%
39%
2%
59%
38%
3%
2023 12
2022 12
USA
Europe
68%
27%
5%
68%
28%
4%
2023 12
2022 12
59%
40%
1%
60%
39%
1%
2023 12
2022 12
USD
EUR
USD
EUR
71%
27%
2%
70%
28%
2%
2023 12
2022 12
Asia / PacificAsia / Pacific
Other
Other
Geographical breakdown
Breakdown by Currency
Current investments
Current investments
Uncalled commitments
Uncalled commitments
USA
Europe
59%
39%
2%
59%
38%
3%
2023 12
2022 12
USA
Europe
68%
27%
5%
68%
28%
4%
2023 12
2022 12
59%
40%
1%
60%
39%
1%
2023 12
2022 12
USD
EUR
USD
EUR
71%
27%
2%
70%
28%
2%
2023 12
2022 12
Asia / PacificAsia / Pacific
Other
Other
13
ANNUAL REPORT 2023
40
74
114
125
115
38
18
77
104
147
151
180
202
187
196
232
257
272
-55
-51
-64
-82
-99
-100
-35
-93
-90
-114
-82
-132
-138
-167
-219
-224
-316
-323
533
-505
366
-368
288
-378
Distributions
Capital calls
Net cash ows
20202019
2021 20222017 201820162015201420132012201120102009200820072006200520042003
200
600
400
0
Cash flow evolution (in € million)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
12/202320222021202020192018201720162015201420132012201120102009200820072006200520042003
453
326
287
300
261
306
313
321
271
173
122
127
628
532
673
719
795
878
699
894
1049
1059
1300
991
1016
1555
2344
1198
2637
1255
2488
518
525
512
464
363
309
304
270
263
218
202
Undrawn commitments
Investments
Evolution of commitments and investments (In € million)
BREDERODE S.A.
14
The cash calls are generally spread over time, usually five years, so that the manager can complete the build up of the
investment portfolio. In general the financing requirements of Private Equity are covered by the following sources:
- The use of existing cash resources;
- Cash receipts generated by the disposal of investments from within the Private Equity portfolio;
- Dividends and interest received;
- Lines of credit;
- Possibly the sale of a part of the listed portfolio can serve as a cash buffer.
15
ANNUAL REPORT 2023
2016
2%
2017
2%
2018
6%
2019
7%
2020
6%
2023
23%
2022
24%
2021
22%
<2016
8%
Growth
Growth
Co-investments
Co-investments
Venture Capital
Venture Capital
Secondary
Secondary
Buyout Buyout
56%
55%
16%
15%
20%
20%
2%
4%
6%
6%
2023 12
2022 12
64%
67%
5%
4%
20%
20%
1%
1%
10%
8%
2023 12
2022 12
2018
17%
2019
19%
2020
11%
2021
13%
2023
1%
2022
4%
2016
7%
2017
11%
<2016
17%
2016
2%
2017
2%
2018
6%
2019
7%
2020
6%
2023
23%
2022
24%
2021
22%
<2016
8%
Growth
Growth
Co-investments
Co-investments
Venture Capital
Venture Capital
Secondary
Secondary
Buyout Buyout
56%
55%
16%
15%
20%
20%
2%
4%
6%
6%
2023 12
2022 12
64%
67%
5%
4%
20%
20%
1%
1%
10%
8%
2023 12
2022 12
2018
17%
2019
19%
2020
11%
2021
13%
2023
1%
2022
4%
2016
7%
2017
11%
<2016
17%
Breakdown by Vintage (year of subscription)
Breakdown by style
Current investments
Current investments
Uncalled commitments
Uncalled commitments
BREDERODE S.A.
16
List of Private Equity General Partners (in € million)
Managers Current investments Uncalled commitments Total
CARLYLE / ALPINVEST 165.27 85.97 251.24
EQT 144.12 60.04 204.15
ARDIAN 126.41 63.11 189.52
LCATTERTON 121.44 59.23 180.67
HIG 96.11 77.12 173.23
PSG 98.29 67.81 16 6.11
BAIN 90.24 57.61 147.86
VISTA 95.45 40.54 135.99
GENSTAR 99.16 33.62 132.78
ALPINE 57. 56 45.99 103.55
HARVEST 73.40 30.02 103.42
BV 66.74 35.15 101.89
ARLINGTON 77.72 23.80 101.52
AMERICAN SECURITIES 82.03 11.76 93.79
BC 81.04 11.3 4 92.38
STONEPOINT 67.08 24.98 92.06
HGGC 69.47 13.39 82.86
JF LEHMAN 57. 84 20.95 78.79
PAI 41.34 32.90 74.25
CVC / GLENDOWER 29.21 41.48 70.69
PROVIDENCE 43.42 26.21 69.62
UPFRONT 59.33 9.65 68.98
MERCATO 57.72 11.22 68.94
COMMITTED ADVISORS 45.60 23.02 68.62
TRITON 45.77 19.71 65.48
OTHERS 644.87 271.47 916.35
TOTAL 2 636.65 1 198.09 3 834.74
The top 25 General Partners included in this list represent 76% of total commitments.
The above assessment is based on the unaudited valuations as at 31 December 2023, covering 89% of the Private Equity
portfolio.
17
ANNUAL REPORT 2023
6.2.2. Listed securities portfolio
The listed securities portfolio generated a gain of €182.12 million, compared with a loss of €214.60 million during the previous
financial year (including net dividends).
During the financial year, the composition of the portfolio changed slightly: the Samsung Electronics (GDR) position was
reduced and the Alphabet (C), Sanofi and Novartis positions were strengthened.
Changes in the portfolio
(in € million) 31 12 2023 31 12 2022
Listed portfolio at the beginning of the financial year 1 118.89 1 342.70
Investments 30.49 88.12
Disposals -28.52 -70.44
Change in fair value 155.82 -241.49
Listed portfolio at the end of the financial year 1 276.68 1 118.89
5%
5%
37%
33%
17%
20%
16%
18%
15%
14%
10%
10%
2023 12
2022 12
CHF
CAD, NOK, HKD
GBP
USD
EUR
7%
6%
48%
52%
29%
25%
11%
12%
5%
5%
2023 12
2022 12
Miscellaneous
Consumer
goods
Investment
companies
Electricity
Health care
Technology
Breakdown of the listed portfolio
by industry
Breakdown of the listed portfolio
by currency
BREDERODE S.A.
18
Total performance in 2023 (including dividends)
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
Mastercard
+19%
Alphabet
+46%
Intel
+86%
Samsung
+40%
Relx
+41%
Alibaba
-15%
LVMH
+9%
Iberdrola
+13%
Prosus
-9%
Novartis
+17%
Unilever
-3%
Nestlé
-1%
Brederode
-5%
Sona
+11%
Sano
+3%
Enel
+42%
Royal Bank
of Canada
7%
Technology
33%
Investment
companies
1%
Consumer
goods
1%
Electricity
25%
Health Care
11%
Others
8%
19
ANNUAL REPORT 2023
Composition of the portfolio of listed shares
Securities 31 12 2022 Acquisitions
(Disposals)
Changes in
fair value
31 12 2023 Performance
(1)
Number of
securities
Allocation
(in € million)
Technology 364.55 -3.60 115.55 476.50 33.2% 37.3%
Mastercard 102.35 18.83 121.18 18.9% 313 950 9.5%
Alphabet (C) 56.20 14.75 32.43 103.38 45.7% 810 611 8.1%
Relx 61.08 23.64 84.72 41.2% 2 367 465 6.6%
Samsung Electronics (GDR) 76.14 -18.30 21.86 79.70 40.4% 58 790 6.2%
Intel 27.93 23.32 51.25 85.9% 1 127 000 4.0%
Prosus 24.78 (2) -0.06 -2.11 22.62 -8.5% 838 134 1.8%
Alibaba 16.07 -2.42 13.65 -15.1% 194 587 1.1%
Consumer goods 220.30 -2.99 217. 30 1.3% 17.0 %
Unilever 85.34 -5.49 79.85 -2.8% 1 820 684 6.3%
Nestlé 73.43 -2.36 71.07 -0.9% 674 872 5.6%
LVMH 61.53 4.86 66.39 9.5% 90 503 5.2%
Investment companies 206.24 -1.47 0.30 205.08 0.7% 16.1%
Brederode 130.82 (2) -1.47 -6.96 122.38 -5.4% 1 204 575 9.6%
Sofina 75.43 7.26 82.69 11.2% 366 863 6.5%
Electricity 160.52 4.19 31.42 196.13 24.9% 15.4%
Iberdrola 91.35 4.19 8.05 103.58 12.8% 8 726 618 8.1%
Enel 69.17 23.38 92.54 41.7% 13 751 056 7.2%
Health care 108.01 3.78 8.80 120.60 11.1% 9.4%
Novartis 65.79 (4) 0.23 9.07 75.08 17.0% 819 200 5.9%
Sanofi 42.22 3.56 -0.26 45.52 2.5% 507 100 3.6%
Others 59.27 -0.94 2.74 61.07 8.2% 4.8%
Royal Bank of Canada 58.83 2.24 61.07 7.3% 667 300 4.8%
Other holdings < € 10
MM (3)
0.44 -0.94 0.50 n.a. n.a. 0.0%
TOTAL 1 118.89 1.96 155.82 1 276.68 16.3% 100%
(1) Indicative performance over the financial year including the net dividends received.
(2) Reimbursement of capital or similar.
(3) The “other holdings” item mainly contains listed securities distributed by certain Private Equity funds.
(4) The Sandoz shares distributed by Novartis during the fourth quarter were sold and Novartis shares were puchased for an equivalent amount
BREDERODE S.A.
20
6.3. Financial structure
At the end of the financial year, BREDERODE and its subsidiaries had a net debt position of €129.01 million (as compared
to €43.97 million at the end of 2023). They had confirmed credit lines totalling €350 million (unchanged since December
31, 2022).
6.4. Related party transactions
There were no related party transactions in the reporting period that significantly influenced the financial position and the
results of Brederode or its subsidiaries.
6.5. Law on transparency obligations
On 2 November 2020 Brederode received a joint notification from the Stichting Administratiekantoor (STAK) Holdicam and
Holdicam S.A. based on the Law and the Grand-Ducal Regulation of 11 January 2008 concerning transparency obligations
incumbent upon the issuers of securities.
As at the date of this notification, the ultimate beneficial owner of Brederode S.A. was STAK Holdicam, which held 100% of
Holdicam S.A. The latter in turn held a 58.18% share in Brederode S.A.
As at 31 December 2023, Geyser S.A. still held 4.11% of Brederode S.A.
6.6. Activities in the eld of research and development
There was no research and development activity.
6.7. Events following the reporting period
There were no events following the reporting period that had a significant impact on the financial position or results of Brederode.
6.8. Proposed distribution to shareholders
The Board of Directors continues to favour a policy of steadily growing distributions to its shareholders. It will propose to
the annual general meeting to be held on 8 May, 2024 a distribution of € 1.29 per share vs € 1.22 per share the previous year,
an 6% increase. Similar to the previous year, this distribution will be sourced from the share premium account. If approved,
it will be made available for payment on May 22
nd
, 2024.
Following article 97 (3) of the Law dated 4 December 1967, this distribution will not be subject to withholding tax in
Luxembourg. The country of residence of each shareholder will determine, according to its own laws and regulations, the
nature of the distribution and its tax regime.
21
ANNUAL REPORT 2023
6.9. Outlook
In view of its mission as an international venture capital investment company, Brederode’s future profits will continue to be
influenced by the changes in the global geo-political and economic environment.The risk management policy, the quality
of its assets and their diversification by geographical area, by currency and by investment style remain important in an
environment characterised by increasing geopolitical tensions.
The markets suggest that interest rates have peaked in the United States and Europe. This, combined with a globally
favourable economic environment, should have a positive effect on our Private Equity portfolio, in which activity is slowly
starting to pick up.
The inherent qualities of Brederode’s listed portfolio give confidence in its capacity to continue providing attractive returns
in the long term.
The Board of Directors remains confident in the success of the business model adopted and in the specific strategy pursued
by the company. It reaffirms its support of a policy of regularly increasing shareholder distributions.
6.10. Change in the composition of the board of directors
Pierre van der Mersch, founder of the Brederode group, has forged a company of international importance, founding it on
values of independence and performance which he has strived to share. Last year, he handed over the chairmanship of the
company to Bruno Colmant and became its Executive Vice-Chairman. He has today informed the Board that he intends
to resign as a Director following the next Shareholders’ Meeting. In recognition of the immense contribution he has made
to the success of Brederode over the years, the Board of Directors proposed that he should be given the title of Honorary
Chairman, which he has accepted.
6.11. Main characteristics of internal controls and risk management
Preliminary remarks
There is no management committee or specific internal auditor position. Considering the Brederode Group’s size and the
targeted nature of its activities, risk management is assigned to the executive directors themselves. No need is felt for the
position of internal auditor, given the proximity of the executive directors who personally supervise the transactions carried
out on the company’s behalf.
The internal control functions are provided, firstly, by the executive directors and, secondly, by the Audit, Governance and Risk
Committee, none of whose members have an executive function. The overall philosophy is based on the values of integrity,
ethics and competence required from each participant, which form the basis of the group and its mode of operation.
6.11.1. Control environment
The control environment is determined mainly by the laws and regulations of the two countries in which the group has
operating subsidiaries (Luxembourg and Great Britain) and by the articles of association of each of the companies in question.
BREDERODE S.A.
22
The accounts of the various companies are kept internally by the same person. At the same time, Alter Domus Alternative Asset
Fund Administration S.à.r.l. acts as Central Administrative Agent for the subsidiary Brederode International S.à r.l. SICAR. As such,
it is responsible for the accounts and the valuation of the Private Equity portfolio. The financial management is overseen by
an executive director.
6.11. 2 . Risk management policies
The company’s strategic and operational objectives, and those concerning the reliability of financial information, both
internal and external, are defined by the executive directors and approved by the Board of Directors. The implementation
of these objectives is periodically checked by the Audit, Good Governance and Risk Management Committee.
Market risks
a) Currency risk
Currency risk is defined as the risk that the value of a financial instrument may fluctuate due to changes in the exchange
rate of foreign currencies.
Exposure to currency risk is directly linked to the amounts invested in financial instruments denominated in currencies
other than the euro and is influenced by the hedging policy adopted by Brederode and its subsidiaries.
The policy on covering currency risk is guided by a medium-term vision of the trend of exchange rates relative to the Euro.
Outstanding forward exchange transactions carried out for the purpose of reducing currency risk are valued at the fair
value of these hedging instruments and are mentioned in the balance sheet notes as “derivative instruments” under
current financial assets (liabilities).
The effect of changes in the fair value of hedging instruments can be found in the changes in fair value of the direct
subsidiary of Brederode.
b) Interest rate risk
For the financial assets the risk of changes in fair value directly related to interest rate movements is insignificant, given that
almost all financial assets are equity instruments.
For the financial liabilities this risk is limited by the short duration of the financial borrowings.
c) Other price risks
Price risk is defined as the risk that the value of a financial instrument may fluctuate due to market price variations.
i. Listed portfolio
For the listed portfolio, the risk of price fluctuations related to market price variations is determined by price volatility on the
stock exchanges where the group is active.
23
ANNUAL REPORT 2023
The group’s policy is to maintain diversification on these markets which are very liquid and are less volatile than the so-called
emerging markets. The price risk related to listed securities is also reduced by the portfolio’s high level of geographical and
market diversification. The breakdown of the listed portfolio by currency and by market is shown above.
ii. Private Equity Portfolio
For the Private Equity portfolio, statistical and theoretical studies reach different conclusions as to whether or not the
volatility of such holdings is greater than that of listed markets. Purchase and sale prices are clearly influenced by multiples
such as EV/ EBITDA that are found on the market for listed securities. To a large extent these similarities in the basis of
valuations explain the significant correlation between price fluctuations on these two markets. Recent experience from the
financial crisis that started in 2008 has confirmed the greater degree of stability in valuations in the Private Equity portfolio
compared to that of the listed portfolio. The price risk related to unlisted securities is also reduced by the very high level
of diversification maintained in the portfolio. An initial level of diversification results from the large number of General
Partners Brederode invest with. A second level of diversification is present within each Partnership which typically spreads
its investments among fifteen to twenty separate projects. The geographical breakdown of the Private Equity portfolio is
shown above.
iii. Options on listed securities
The price risk is reflected directly in the price levels prevailing in the option markets. Greater volatility on the stock markets
will be reflected in higher option premiums. The price risk on this type of transaction is monitored on a daily basis.
iv. Sensitivity analysis of other price risks
a. Listed portfolio
The value of this portfolio is based on stock market prices which are by definition difficult to predict.
b. Private Equity portfolio
The value of this portfolio can also be influenced by changes in valuations on listed markets. Nevertheless, this influence
is moderated by the following factors:
- The objective to create value relates to a longer term,
- The manager is able to take decisions faster and more effectively in order to turn around a deteriorating situation,
- In our opinion the interests of managers are better aligned in Private Equity with those of investors.
Credit risk
This is defined as the risk that a counterparty to a financial transaction may default on its obligation, thus causing the other
party to incur a financial loss.
As an investor in listed shares the main credit risk we face lies in the ability of our intermediates to ensure the successful
outcome of our purchases or sale transactions. This risk is in principle eliminated by the “delivery against payment” system
of settlement.
BREDERODE S.A.
24
In the case of share options it is up to the Brederode group itself to demonstrate its creditworthiness, thereby enabling
it to operate as an issuer in the “Over The Counter” market which is reserved for institutional investors of acknowledged
competence and solvency. As an issuer of share options the credit risk on this type of transaction is taken by
our counterparties.
Bank deposits actually constitute the main credit risk incurred by our group. We constantly review the quality of our bankers.
The custody of securities also involves a credit risk, even if the securities are in principle always segregated from the assets
of the financial institutions to whom the safekeeping of the listed securities portfolio is entrusted.
Liquidity risk
The liquidity or financing risk is defined as the risk that an entity may experience difficulties in raising the funds necessary
to honour its commitments. One of the characteristics of a “Private Equity” investment is that the investor has no control
over the liquidity of the investments. The manager alone decides when to acquire or dispose of an investment. There is a
secondary market for holdings in Private Equity funds, but this constitutes a niche market and the selling process may prove
relatively long and costly. The evolution of the group’s uncalled commitments to Private Equity funds is monitored closely
to ensure optimal management of net cash movements.
The portfolio of listed securities is made up of highly liquid minority positions, so that significant cash movements
generated by the unlisted portfolio can be absorbed, if necessary.
The management of the liquidity risk also takes into account the credit lines whose availability and conditions are enhanced
by the existence of an important portfolio of listed securities. The group sees to it that it keeps its level of financial
indebtedness below the confirmed lines of credit.
Cash flow interest rate risk
This is the risk that future cash flows may be threatened by changes in market interest rates. Brederode is not affected by
this risk.
6.11. 3. Control activities
On-going control, on an almost daily basis, is exercised by the executive directors who also sit on the Boards of the main
subsidiaries. Moreover, the executive directors meet at least once a month to conduct a detailed examination of the
financial position, portfolios, asset valuation, general monitoring of activities, financing requirements, risk assessment, new
commitments, etc. Since financial assets are always held by third-party bankers, trustees, etc., the risks of negligence, error
or internal fraud are significantly reduced. On 1 January 2019, the subsidiary Brederode International S.à r.l., holding the
group’s Private Equity portfolio, was transformed into a “Société d’Investissement à Capital à Risque” (SICAR, or venture
capital investment company) and as such is henceforth supervised directly by the Commission de Surveillance du Secteur
Financier (CSSF). The subsidiary in question uses the services of Alter Domus Depositary Services S.à.r.l., which acts as a
professional depositary of securities other than financial instruments. Alter Domus Alternative Asset Fund Administration
S.à.r.l. acts as Central Administrative Agent for Brederode International S.à r.l. SICAR. Since the accounts are also handled
internally, the mandate of Alter Domus is to reinforce the control function.
25
ANNUAL REPORT 2023
6.11.4. Information, communication et oversight
The reliability, availability and pertinence of accounting and financial information are overseen directly by the executive
directors and subsequently by the Audit Good Governance and Risk Committee. Particular attention is paid to any remarks
or requests formulated not only by the supervisory authorities but also by shareholders and financial analysts. The
maintenance and updating of computer systems are outsourced to IT service providers. The executive directors oversee
the quality of the services thus provided and satisfy themselves that the degree of dependency vis-à-vis these service
providers remains within acceptable limits. The security of computer systems is maximised using technical processes
available in this field: access right, back-up, anti-virus software, etc. The executive directors prepare, check and distribute
information after it has been submitted for approval to the Board of Directors, the external legal advisors and the Auditor.
6.11. 5. Audit
Brederode has appointed a certified company auditor in the person of Mazars Luxembourg, certified auditing firm, with its
registered office established at 1882 Luxembourg, 5, rue Guillaume J.Kroll and listed in the Trade and Companies Register
under number B 159.962. Mazars Luxembourg and its representative, Mr Guillaume BROUSSE, are members of the Institute
of Company Auditors and authorized by the Commission de Surveillance du Secteur Financier.
6.12. Corporate, social and environmental responsibility (CSR)
Brederode does not engage in any industrial or commercial activity and thus does not generate sales revenue. It has
opted to invest as a minority shareholder without being involved in the management of the companies it invests in.
Brederode’s investment policy takes into account the CSR policy of those companies.
As regard to the listed companies, Brederode ensures that they develop a CSR policy that is adapted to their sector of
activity, and that they publish these in compliance with the applicable legislation, the rules of good governance or best
practice in this area.
In regard to investments in the Private Equity portfolio, the CSR policy is incumbent on the fund managers. All those
with whom Brederode works has an explicit, published policy in this area and in their turn encourage the companies they
control to adopt a dynamic CSR policy. Most of the time these are based on the standards developed at a global level,
such as the Principles for Responsible Investment (www.unpri.org). The CSR dimension is examined specifically in the
course of the due diligence process that Brederode carries out before taking any private equity investment decision.
For the 2023 financial year, Brederode confirms that all fund managers of the Private Equity and the Listed Securities
portfolios in which the group invested have drawn up a pro-active CSR policy.
Luxembourg, March 11, 2024
On behalf of the Board of Directors
Luigi Santambrogio, Managing Director Nicolas Louis Pinon, Executive Director
BREDERODE S.A.
26
7. Brederode shares listing
Financial instruments
The Brederode shares are traded on the regulated markets of Euronext Brussels (ticker BREB) and the Luxembourg Stock
Exchange (ticker BREL). All shares can be traded freely. The Brederode shares are ordinary shares and all shares have the
same rights. Each share has the same rights to dividends and to the reserves in the event of liquidation or reduction of
the shareholders’ equity. Each share entitles the holder to the same voting rights during Brederode’s general meetings.
All shares are required to be dematerialised. No shareholder is permitted to have his/her shares converted into nominal or
bearer shares.
Stock market capitalization
At the end of 2023 Brederode’s stock market capitalization amounted to €2 977 million compared to €3 183 million a year
earlier.
Share price and liquidity
The share price of Brederode decreased 6% during the financial year. Including the distribution of €1.22 in May 2023, its total
return was -5%.
Traded volume was 1.32 million shares (1.72 million in 2022), i.e. an average daily volume of 5,183 shares (6,691 in 2022).
27
ANNUAL REPORT 2023
Evolution of the share price of Brederode (EUR) and daily volume (number of shares)
on the regulated markets of Euronext Brussels since January 1
st
Market price (€)
Daily volume (number of shares)
0
500 000
1 000 000
1 500 000
2 000 000
2 500 000
3 000 000
60
70
80
90
100
110
120
130
140
12/202311/202310/202309/202308/202307/202306/202305/202304/202303/202302/202301/2023
3 500 000
BREDERODE S.A.
28
8. Individual (non consolidated) financial statement
as at 31 December 2023
8.1. Individual statement of nancial position
(in € million) Notes 31 12 2023 31 12 2022
NON-CURRENT ASSETS 3 767.95 3 572.81
Subsidiaries at fair value (1) 3 767.95 3 572.81
CURRENT ASSETS 0.17 0.02
Other current assets 0.15
Cash and cash equivalents 0.01 0.02
TOTAL ASSETS 3 768.11 3 572.83
TOTAL SHAREHOLDERS’ EQUITY 3 767. 21 3 569.31
Issued share capital (2) 182.71 182.71
Share premium (3) 528.47 564.23
Statutory reserves 8.40 6.90
Profit carried forward 2 813.97 2 888.77
Result for the financial year 233.65 -73.30
NON-CURRENT LIABILITIES
CURRENT LIABILITIES 0.91 3.52
Other current liabilities 0.91 3.52
TOTAL LIABILITIES 3 768.11 3 572.83
8.2. Individual prot and loss account
(in € million) Notes 31 12 2023 31 12 2022
Change in fair value of subsidiary (4) 205.14 -103.19
Profit from management of investment entity 205.14 -103.19
Other operating income and expenses 28.56 29.91
Operating result 233.69 -73.28
Net financial income (expenses) -0.03 -0.02
Tax on the net result -0.01
Profit for the financial year 233.65 -73.30
Profit per share
Weighted average number of shares 29 305 586 29 305 586
Net profit per share (in €) 7.97 -2.50
The annexed notes form an integral part of the financial statements.
29
ANNUAL REPORT 2023
8.3. Individual statement of cash ows
(in € million) Notes 31 12 2023 31 12 2022
Operating activities
Pre-tax profit for the year 233.66 -73.30
Taxes for the year -0.01 -0.00
Net profit for the financial year 233.65 -73.30
Change in fair value (4) -205.14 103.19
Gross cash-flow 28.51 29.89
Change in working capital requirements -2.76 3.75
Cash flow resulting from operating activities 25.75 33.64
Investment activities
Reimbursement from subsidiaries 10.00
Cash flow from investment activities 10.00
Financing activities
Distribution to shareholders -35.75 -33.70
Cash flow resulting from financing activities -35.75 -33.70
Net movement in cash in cash and cash equivalents -0.01 -0.07
Cash and cash equivalents on 1
st
January 0.02 0.09
Cash and equivalents at the end of the financial year 0.01 0.02
8.4. Individual nancial statement of changes in equity
(in € million) Notes Capital Share
premium
Reserves Result
brought
forward
Total
Balance on 1
st
January 2022 182.71 597.93 5.30 2 890.37 3 676.32
- distribution to shareholders (3) -33.70 -33.70
- allocation to statutory reserves 1.60 -1.60
- result for the year -73.30 -73.30
Balance on 31
st
December 2022 182.71 564.23 6.90 2 815.47 3 569.31
Balance on 1
st
January 2023 182.71 564.23 6.90 2 815.47 3 569.31
- distribution to shareholders (3) -35.75 -35.75
- allocation to statutory reserves 1.50 -1.50
- result for the year 233.65 233.65
Balance on 31
st
December 2023 182.71 528.47 8.40 3 0 47.62 3 767. 21
The annexed notes form an integral part of the financial statements.
BREDERODE S.A.
30
8.5. Accounting principles and policies
The accounting period is 12 months and these accounts for the period ending 31 December 2023 were approved by the
Board of Directors’ meeting held on 11 March 2024.
The individual financial statements were drawn up in EUR million (the group’s operating currency) and rounded up or down
to the nearest hundredth unless mentioned otherwise. These statements are drawn up on the basis of historical costs
except in the case of derivative instruments and financial assets at fair value through the profit and loss account which are
valued at fair value.
No offsetting is carried out for assets and liabilities, expenses and income unless allowed or required by an IFRS-standard.
General principles and accounting standards
The accounts were prepared in accordance with international accounting standards (International Financial Reporting
Standards) as published and adopted by the European Union which came into effect on 31
st
December 2023.
Changes in accounting principles
The standards, amendments and interpretations that entered into force on 1 January 2023 had no significant impact on the
presentation of the financial statements.
Standards and interpretations
The accounting methods adopted are consistent with those of preceding years.
Any interpretations that are new or were revised during the year did not have a material effect on the group’s financial
performance or position.
Standards and interpretations that came into force for compulsory application in the European Union in 2023:
The entry into force of the standards, amendments and interpretations of the mandatory application from 1 January 2023
had no effect on the financial statements for the 2023 reporting period.
New or amended standards or interpretations that came into force after 31 December 2023, early application of
which is permitted in the European Union:
Brederode did not anticipate the application of new standards and interpretations issued before the date of authorisation
for publication of the financial statements but whose date of entry into force is after 31 December 2023.
Brederode does not expect the adoption of the standards listed above to have a significant impact on the financial
statements of future reporting periods.
31
ANNUAL REPORT 2023
Accounting estimates
When preparing the accounts, the management relies on estimates and assumptions that have an impact on the amounts
presented in the accounts. These estimates and assumptions are continuously evaluated and based on historical experience
and outside information.
The main line items concerned by these estimates and assumptions that indirectly affect Brederode via the establishment
of the fair value of its subsidiaries are:
- The valuation of the Private Equity portfolio;
- The estimate of recoverable taxes;
- The estimate of the accruals.
Presentation “current” and “non-current”
The individual financial statements pertaining to the financial situation are presented taking into account the differentiation
made by the IAS1 standard between “current” and “non-current”.
The current assets and liabilities concern the assets and liabilities Brederode believes to be collected, utilised or paid in the course
of a normal cycle. This period can extend up to 12 months following the closure of the fiscal year. All other assets are non-current.
Conversion of transactions and balances in foreign currencies
The individual financial statements were prepared in euro, Brederode’s functional currency.
a. Transactions in foreign currencies
Transactions denominated in foreign currency are recorded based on the exchange rate at the time of the transaction. At
the end of the reporting period, monetary assets and liabilities as well as non-monetary assets valued at their fair value are
converted at the closing rate. Any resulting differences on conversion are included in the profit and loss account.
b. Conversion of accounts in foreign currency
For the purposes of drawing up Brederode’s individual financial statements, the results of the subsidiaries whose accounts are
denominated in a foreign currency are converted at the average exchange rate in effect during the financial year. Apart from the
elements that make up shareholders’ equity balance sheet items expressed in foreign currency are converted at the closing rate.
Any resulting differences on conversion are shown as part of the shareholders’ equity and included under “conversion reserves”.
Tangible fixed assets
Tangible fixed assets are valued at the cost of acquisition or production, less accumulated depreciation and other amounts
written off.
Depreciation is charged on a straight-line basis over the estimated operational life of the various fixed asset categories. The
estimated duration of use is as follows:
BREDERODE S.A.
32
- Furniture: 10 years
- Office furniture: 5 years
- Vehicles: 5 years
- Computer equipment: 3 years
Land is not depreciated. A depreciation can be established when the accounting value exceeds the value to be recovered.
The depreciation conditions for tangible fixed assets are reviewed on a yearly basis and may be altered in future depending
on circumstances.
A tangible fixed asset is written off in the event of sale or if no economic advantage may be expected from its continued
use. The profit or loss resulting from a sale or write off of a tangible fixed assets corresponds to the difference between the
income from the sale and the accounting value of the asset and will be included in the profit and loss account.
Fair value
Brederode assesses financial instruments such as derivative instruments and financial assets at fair value through the profit
and loss account
The fair value is the price that would have been obtained for the sale of assets or that would have been paid for the disposal
of a liability during a normal transaction between market participants on the valuation date. An assessment of fair value
implies that the sale of assets or the disposal of liabilities takes place on the primary market for such assets and liabilities or,
in the absence of a primary market, on the market that is the most appropriate for such assets or liabilities.
Brederode must have access to the main market or the most appropriate market.
The fair value of assets and liabilities is set by making hypotheses market participants would use to determine the price of
assets and liabilities, taking into account that market participants act in their own economic interests.
All assets or liabilities for which a fair value is set or which are mentioned in the individual financial statements are ranked
in the fair value hierarchy.
Non-current financial assets
All non-current assets, which may or may not be listed, are accounted for as “financial assets at fair value through the profit
and loss account”.
In the context of the fair value assessment of direct and indirect subsidiaries of Brederode, the initial value corresponds to
the net acquisition cost and the fair value is reassessed each year end based on the closing rate for listed securities and
on the latest valuations provided by the General Partners for unlisted securities. In the latter case the valuations are based
on valuation techniques recommended by international associations operating in the Private Equity arena. Changes in the
fair value of these investments between one year-end and the next are accounted for through the profit and loss account.
This method was selected as it reflects the company’s risk management strategy.
33
ANNUAL REPORT 2023
Listed portfolio
The listed portfolio is valued on the basis of the closing prices in the final trading day of the year.
Private Equity portfolio
The Private Equity portfolio held by investment entities that are subsidiaries of Brederode is valued on the basis of the most
recent financial information received from the General Partners. These are definitive or interim valuations as at 31 December,
or quarterly reports as at the previous 30 September, adjusted to take into account the investments and divestments carried
out during the fourth quarter. This valuations may be further adjusted to reflect any changes in circumstances between the
date of the last formal valuation provided by the General Partner and the date of account closure.
Amounts receivable
Loans and credits granted by Brederode and by investment entities that are subsidiaries of Brederode are valued at cost, less
any reduction in value as a result of depreciation or non-recoverability.
Following the initial drawing up of the accounts the loans and amounts receivable are valued at amortized costs calculated
according the effective interest method, less the provisions for depreciations when management believes there is an
objective indication of depreciation which will reduce the cash flows that were initially expected. No updating is carried
out for short-term loans and credits, given their negligible potential impact.
The effective interest method is a calculation method for the amortized cost of a financial instrument and the entry of
interest returns during the applicable period. The effective interest is the exact interest rate of payments and disbursements
in the future during the planned life cycle of a financial instrument or possibly – in the short time – the interest at net
accounting value.
Current financial assets
Derivative instruments
Derivative instruments are valued at their fair value on the balance sheet date. Fluctuations in fair value between one
yearend and the next are accounted for in the profit and loss account. Price movements may result in a valuation of a
derivative instrument that results in the creation of a current financial asset or liability.
a. Current and deferred taxes
Tax expenses include tax payables and deferred tax.
i. Tax payable
Tax payables include the estimated sum of tax to be paid (or to be recovered) on the taxable profits (or losses) of the
company or its subsidiaries as well as any adjustment to the sum of taxes paid in previous fiscal years. These are calculated
on the basis of taxation rates in force or about to be adopted at the end of the reporting period.
BREDERODE S.A.
34
Brederode makes an assessment and estimates of the situations in which the fiscal rules are open to interpretation. The
views taken in this regard are revised regularly.
ii. Deferred tax
Deferred tax is calculated in accordance with the variable carry-over method applied to temporary differences between
the book value of assets and liabilities posted on the balance sheet and their tax basis. No deferred tax is entered into the
accounts if it originates from the initial booking of an asset or a liability relating to a transaction, except in the event of a
regrouping of companies that, at the time of the transaction, does not have an impact on the accounting results or the
fiscal results. Moreover, the liabilities pertaining to deferred tax are not entered into the accounts if the temporary difference
is the result of the initial entry of the goodwill.
Deferred taxes are determined using taxation rates and fiscal rules in force or about to be adopted at the end of the
reporting period and which are believed to have an impact on the realisation of assets or the payment of liabilities in
connection with deferred taxes.
A deferred tax asset is booked only to the extent that the realisation of future taxable profits is probable, thus enabling the
company to enter such temporary differences into the accounts. In order to assess the possibility of recovering this asset,
the following must be taken into account: future taxation forecasts, the portion of non-recurrent expenses which are not
expected to be made in the future and which were included in past losses, the history of the fiscal results of the past years
and possible fiscal strategies such as the disposal of undervalued assets.
Deferred tax assets are included under temporary differences in connection with participations in subsidiaries except if the
conversion calendar pertaining to these temporary differences is controlled by the Group and it is likely that the conversion
does not take place in the near future.
Deferred tax assets and liabilities are offset by each tax entity and this from the time the each tax entity is entitled to offset
assets and liabilities related to tax payables and on condition that the assets and liabilities relating to deferred taxes are
taxed by the same tax authorities.
b. Cash and cash equivalents
Cash includes bank current accounts.
Cash equivalents include bank deposits and fixed-term investments with a maturity date of three months or less from
the acquisition date; those with a maturity date of more than three months following the acquisition date are treated as
investments.
c. Own shares
In the event of acquisition (or disposal) of own shares the amount paid (or received) is accounted for as a reduction of (or
increase in) shareholders’ equity. Movements in these securities are reported in the table of changes in shareholders’ equity.
These transactions have no effect on the profit and loss account.
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ANNUAL REPORT 2023
By way of reminder, the Brederode shares held by its indirect subsidiary are not recognised as own shares but as a financial
asset of that subsidiary. In Brederode’s individual financial statements, the fair value of those shares is determined based on
the market price, and contributes indirectly to the fair value of Brederode’s direct subsidiary.
d. Appropriation of profit
The gross amount – before deduction of withholding taxes – of dividends paid by Brederode to its shareholders is shown as a
deduction from shareholders’ equity. The financial statements are prepared prior to the appropriation of profits
e. Provisions
Provisions are made at year-end and in the event a group company has a legal or implicit obligation resulting from a past
event, where it is likely that an amount will have to be paid out to meet this obligation and where the amount of the
obligation can be reliably determined. The amount of the provision corresponds to the most accurate estimate of the
expenditure required to meet the obligation existing on the last day of the fiscal year.
f. Long-term financial debt
Brederode’s financial liabilities include bank loans, debts to suppliers and other suppliers. These will be categorized as
other financial liabilities and this in accordance with the provisions imposed by IAS 39. Initially, the financial liabilities will
be entered into the accounts at fair value, increased by the transaction costs which can be entered directly. The remaining
financial liabilities are later valued at the amortized acquisition cost and this according to the effective interest method..
g. Short-term financial debt
Through one of its investment subsidiaries, Brederode has a banking line of credit. This money can be drawn down for a
short term, usually not exceeding 6 months. The interest becomes payable on each maturity date. Short-term financial
debts are accounted for at nominal value.
h. Interest
Interest income and costs consist of interest payable on loans and interest receivable on investments.
Interest received is entered pro-rata temporis in the profit and loss account based on the actual interest rate of the investment.
i. Dividends
Dividends relating to capital assets are accounted for on the date they become payable. The amount of withholding tax is
shown as a deduction from gross dividends.
BREDERODE S.A.
36
8.6. Notes
Accounting and consolidation methods
The financial statements are drawn up in accordance with the International Financial Reporting Standards, as published and
adopted by the European Union effective 31 December 2023.
The standards, amendments and interpretations that entered into force on January 1, 2023 had no significant impact on the
presentation of the summary financial statements.
Brederode had not opted for early adoption of those standards, amendments and interpretations that had been published
but were not yet in force on 31 December 2023.
Information relating to investment entity status
Brederode is an investment entity since it meets the three criteria set out in paragraph 27 of IFRS Standard 10, namely:
- it obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services;
- it commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment
income, or both, and
- it measures and evaluates the performance of substantially all of its investments on a fair value basis.
Brederode has therefore excluded from its statement of financial position the assets and liabilities of its subsidiaries, including
the financial assets (Private Equity and listed securities) whose fair value is now included indirectly in the valuation of Algol S.à r.l.
[limited liability company], its sole direct holding which appears in the assets in its individual financial statements (IAS 27).
The valuation procedure follows the order of the asset holding structure in ascending order, starting with the assets and liabilities
held by the subsidiaries at the bottom of the holding chain. The subsidiary’s net asset value per share is then used to determine
the fair value of the holding in respect of the company in the group that owns it. The procedure continues up to the valuation
of the assets and liabilities held directly by Brederode S.A. The direct holding in the subsidiary, however, is recorded at fair value
through the net income in accordance with IFRS Standard 9.
Fair value hierarchy of directly held investments
The fair value measurements are attributed according to a hierarchy comprising three levels: level 1 is for directly observable
data; level 2 applies to data that are only indirectly observable and may require adjustments to be taken into account; level
3 relates to unobservable data.
Since accounting for the subsidiary Algol relies on unobservable data, fair value measurement of this asset, which
constitutes more than 99 % of Brederode’s total assets, has been classified as level 3. Compared to the financial statements
for the previous financial year, there has been no transfer to levels 1 or 2 during the financial year.
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ANNUAL REPORT 2023
Fair value calculation of indirectly held investments
The fair value of the listed securities held through Brederode’s subsidiaries is based on directly observable data, namely the
stock price at year end, and is therefore categorised as level 1.
The fair value of the Private Equity investments uses the latest financial information received from the managers. The movements
recorded in the meantime and any changes in circumstances that have arisen pending the definitive valuations constitute
unobservable data within the meaning of IFRS 13, therefore the fair value of such investments is categorised as level 3.
At the time of a company’s IPO, the managers have the option to distribute in kind the newly listed shares. As soon as these
shares are received and are available for sale, their fair value is transferred from level 3 to level 1. This practice remains very
marginal for Brederode.
The fair value measurement of each Private Equity investment is based on the reports prepared by the General Partners
on the date on which the fund’s accounts are closed. The reports, commonly referred to as Capital Account Statements,
provide information on the following points:
- Revalued opening and closing net asset
- Movements during the period (contributions, distributions and net gains)
- Remaining uncalled commitments
- Management report providing detailed information on the companies in the portfolio
In the absence of this report, the measurement is based on the report relating to the previous quarter, adjusted to take
account of the investments and disinvestments made during the quarter. This measurement may be adjusted to take
account of any change in situation between the date of the last official measurement provided by the target fund manager
and the account closure date.
As at 31 December 2023, 89% of the unlisted investments were valued based on reports as at 31 December 2023 (84% in 2022).
The valuation techniques used by the Private Equity managers follow the recommendations set out in the International Private
Equity and Venture Capital Valuation (IPEV) Guidelines, the most recent version of which dates back to December 2022.
The measurer must use one or more of the following measurement techniques, taking into account the assumptions of the
market participants regarding the way in which the value is determined:
- Market approach (Multiples, industry measurement references, Market prices available);
- Income approach (Discounted cash flow);
- Replacement cost approach (Net asset).
As part of the control system implemented by Brederode and its management to review and ensure the relevance of
the measurements, these measurements are subject to a triple internal verification procedure, including identifying and
explaining any significant discrepancies between two successive measurements. A further verification is then carried out
based on the definitive measurement reports and the audited accounts for the Funds. In Brederode’s experience, the
discrepancies between the valuations used for the purpose of drawing up the IFRS financial statements and the definitive
valuations have never been significant.
BREDERODE S.A.
38
Note 1: Subsidiaries
As at 1 January 2023, Brederode S.A. owned 100% of Algol S.à.r.l., which in turn owned 100 % of Geyser S.A., which owned
100% of Brederode International S.à.r.l. SICAR and of Bredco Ltd. By way of reminder, as of January 1st, 2016 the direct and
indirect subsidiaries are no longer consolidated.
List of subsidiaries and average number of staff:
Names Addresses Average number of staff
Brederode S.A. 4, Place Winston Churchill L-1340 Luxembourg
Algol S.à r.l. 4, Place Winston Churchill L-1340 Luxembourg
Geyser S.A. 4, Place Winston Churchill L-1340 Luxembourg
Brederode International S.àr.l. SICAR 4, Place Winston Churchill L-1340 Luxembourg 6
Bredco Ltd 42 Berkeley Square, London, England, W1J 5AW 1
Brederode TradePending Blocker, LLC 850 New Burton Rd #201, Dover, DE 19904, US
The percentages of ownership and control is 100% for all subsidiaries.
The subsidiary Brederode International S.à r.l., which holds the group’s Private Equity portfolio, is a a “Société d’Investissement
à Capital à Risque” (SICAR, or risk capital investment company), and, as such, is supervised directly by the Commission de
Surveillance du Secteur Financier (CSSF).
Transactions with related companies
There were no related party transactions in the reporting period that significantly influenced the financial position and the
results of Brederode.
Note 2: Issued share capital
31 12 2023 31 12 2022
Number of shares representing capital
- dematerialized 29 305 586 29 305 586
Total 29 305 586 29 305 586
The current capital of € 182 713 909.08 is represented by 29 305 586 shares with no-parvalue.
As of 31 December 2023, the subsidiary GEYSER S.A. held 1 204 575 shares in Brederode (unchanged). Since the subsidiary
is not consolidated, these shares are not accounted for as own shares but as an investment at fair value in the subsidiary in
question.
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ANNUAL REPORT 2023
Note 3: Share premium account – distribution
On 24 May 2023, the company made a partial distribution of its share premium amounting to €1.22 per share, for a total of
€ 35 752 8114.92.
(in € million) 31 12 2023 31 12 2022
Amount distributed during the financial year 35.75 33.70
Amount proposed as distribution for the current financial year 37.80 35.75
The proposal for distribution is subject to the shareholders’ approval during the Annual general meeting and is not
included under debt in accordance with the provisions of the IFRS standards.
Note 4: Fair value variations in the subsidiaries
This affects the only subsidiary directly held by Brederode S.A., namely, Algol S.à r.l.
The fair value variations in indirectly held subsidiaries and of the assets and liabilities they hold are accounted for in the fair
value variations in Algol.
Note 5: Dividends from subsidiaries
Brederode received a dividend from its subsidiary Algol S.à.r.l. in the amount of € 28.90 million (€30.20 million in the
previous financial year).
Note 6: Operational sectors
As an investment entity, Brederode excludes from its statement of financial position the financial assets held by its
subsidiaries, whose fair value is indirectly included in the valuation of Algol S.à.r.l., its only direct participation, which is
shown as an asset in its individual financial statements.
The two lines of business identified in the past in the consolidated financial statements, namely Private Equity and Listed
Securities, have now given way to a single line of business known as Investment firms, which corresponds to Brederode’s
participation in its subsidiary Algol S.à.r.l.
a. Indicator of total assets and liabilities and reconciliation of balances
(in € million) 31 12 2023 31 12 2022
Fair value at the beginning of the financial year 3 572,81 3 676.00
Investments
Disposals -10
Changes in fair value 205.14 -103.19
Fair value at the end of the financial year 3 767.95 3 572.81
BREDERODE S.A.
40
b. Indicator of the result
The sole indicator of the result is the change in fair value of the subsidiary Algol S.à.r.l. as indicated in the previous table.
c. Characteristics and risk profile of the operating sectors
The risk associated with Brederode’s investment in its subsidiary Algol S.à.r.l. can be measured by the volatility in its fair value,
which in turn is determined by the characteristics and profiles of the assets and liabilities held by its direct or indirect subsidiaries.
As a consequence, while from a technical point of view Brederode constitutes a single line of business, that of an investment firm,
made up of the subsidiary Algol S.à.r.l., the risk profile of that single line of business continues to depend on the characteristics of
the Private Equity and the Listed Securities portfolios managed via its direct and indirect subsidiaries.
For information purpose, the figures related to the assets and liabilities of the two lines of business (Private Equity and Listed
Securities) carried out by the subsidiaries of Brederode are provided beside:
i. Private Equity Portfolio
Geographical diversification of investments at fair value
(In € million) 31 12 2023 31 12 2022
United States 1 777.33 1 684.38
Europe 746.49 679.10
Asia / Pacific 112. 83 124.02
Total 2 636.65 2 487.51
Geographical diversification of uncalled commitments
(In € million) 31 12 2023 31 12 2022
United States 709.92 737.32
Europe 448.38 493.40
Asia / Pacific 39.79 24.14
Total 1 198.09 1 254.86
Breakdown of uncalled commitments by year of subscription
(In € million) 31 12 2023 31 12 2022
<2016 92 108
2016 24 35
2017 28 55
2018 75 92
2019 80 131
2020 66 106
2021 268 286
2022 289 441
2023 276
Total 1 198.09 1 254.86
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ANNUAL REPORT 2023
ii. Portfolio of listed securities
(In € million) 31 12 2023 31 12 2022
Technology 476.50 364.55
Consumer goods 217.30 220.30
Investment companies 205.08 206.24
Electricity 196.13 160.52
Health care 120.60 108.01
Miscellaneous 61.07 59.27
Total 1 276.68 1 118.89
d. Fair value hierarchy
The valuation of the subsidiary Algol S.à.r.l. is based on unobservable inputs within the meaning of the IFRS 13 standard, and
is therefore ranked at level 3 of the fair value hierarchy. As a rule, in case a transfer of fair value level is necessary, Brederode
carries out this change of classification (and the consequences in terms of assessment) on the date of the trigger event or
change in circumstances originating the transfer.
There were no transfers between levels 1, 2 and 3 during the financial year.
Reconciliation between the opening and closing balances of the assets categorised in level 3
(In € million) 31 12 2023 31 12 2022
Fair value at the beginning of the period 3 572.81 3 676.00
Purchases
Sales -10
Changes in fair value 205.14 -103.19
Fair value at the end of the period 3 767.95 3 572.81
The fair value of assets ranked at level 3 indirectly includes 1 276.68 million (€1 118.89 million at 31 December 2022) of listed
shares that would be ranked at level 1 if they were held directly.
The total profits or losses booked in the net results during the period and related to assets ranked at level 3
(In € million) 31 12 2023 31 12 2022
Changes in fair value 205.14 -103.19
Dividends 28.90 30.20
Total net profits and losses in the period 234.04 -72.99
BREDERODE S.A.
42
Note 7: Tax on the net profit
Reconciliation between the theoretical tax rate and actual tax rate
(In € million) 31 12 2023 31 12 2022
Tax base
Tax base Profit before tax 233.65 -73.30
Profit exempt from tax -233.65 73.30
Taxable profit
Tax on profit 0.01
Current taxes relating to the current financial year 0.01
Current taxes relating to previous financial years
Actual tax payable
Actual tax rate 0% 0%
Note 8: Related party transactions
(In € million) 31 12 2023 31 12 2022
Deposit of funds at Geyser S.A. 0.15
Note 9 : Off-balance sheet rights and obligations
The investment entity Brederode S.A. has no off-balance sheet rights or commitments.
Through a subsidiary, Brederode has confirmed credit lines totaling €350 million (unchanged). In order to obtain the best
terms, these lines are backed by a pledge of part of the listed securities portfolio valued at €700.90 million as at the end of 2023.
Furthermore, the subsidiary Brederode International S.à r.l. SICAR records uncalled commitments totaling
€1 198.09 million (compared with €1 254.86 million as at 31 December 2022) linked to its Private Equity portfolio.
Note 10: Directors’ remunerations
Directors’ remuneration at the expense of Brederode S.A. and its subsidiaries in 2023 amounted to €1 million (compared
with €1.22 million as at 31 December 2022) and is broken down as follows:
(In € million) Base remuneration Pension Other components Total
Executive directors 0.97 0.03 1.00
Non-executive directors 0.04 0.04
Total 1.00 0.03 1.04
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ANNUAL REPORT 2023
Only the non-executive directors’ remuneration are at the expense of Brederode S.A. (amounts entered in the individual
financial statements). The remuneration of the executive directors is charged to the subsidiaries. Directors’ remuneration
does not provide for any variable component. The total amount of remuneration shown on the table above does not
include social security contributions payable by the company or companies of the group (employer’s contributions). The
pension plan is of the “defined contribution” type. The other components comprise medical insurance, representation
expenses and vehicle costs.
Note 11: Audit fees
(In € million) 31 12 2023 31 12 2022
Audit mission 0.18 0.13
Including Brederode S.A. 0.06 0.06
Other certification assignments
Total 0.18 0.13
8.7. Management of nancial risks
Brederode’s policy on the management of risks and uncertainties is directly related to all of Brederode’s subsidiaries and influences
Brederode’s individual financial statements through the fair value changes of Brederode’s direct subsidiary, Algol S.à.r.l.
The definition and the policy of managing the financial risks identified are described under point 6.11.2 of the management
report. The effects of this management policy during the 2022 financial year translate into the following data.
Market risks
a) Currency risk
Exchange rate evolution:
Price as at 31 December 31 12 2023 31 12 2022 Difference
US Dollar 1.1050 1.0666 -3.6%
Swiss Franc 0.9260 0.9847 6.0%
Pound Sterling 0.8691 0.8869 2.0%
Canadian Dollar 1.4642 1.4440 -1.4%
Australian Dollar 1.6263 1.5693 -3.6%
BREDERODE S.A.
44
At the end of the financial year, exposure to currencies other than the euro via Brederode’s subsidiaries is broken down as follows
(in % of the total assets) 31 12 2023 31 12 2022 Difference
US Dollar 56.5% 57.0% -0.4%
Swiss Franc 4.0% 4.1% -0.1%
Pound Sterling 2.5% 2.2% 0.4%
Canadian Dollar 1.6% 1.6% -0.1%
Australian Dollar 0.5% 0.4% 0.1%
Total 65.1% 65.3% -0.2%
There were no outstanding hedging instruments (% of risk incurred) at year end (unchanged compared to the previous
financial year).
Sensitivity analysis: impact on the profit and loss account / shareholders’ equity of a 5% movement in various currencies:
(In € million) 31 12 2023 31 12 2022 Difference
US Dollar 110.6 4 102.74 7.9 0
Swiss Franc 7.87 7.47 0.40
Pound Sterling 4.96 3.89 1.07
Canadian Dollar 3.05 2.94 0.11
Australian Dollar 0.88 0.70 0.18
Total 127.41 117.75 9.66
b) Interest rate risk
For financial assets the risk of changes in fair value directly related to interest rate movements is insignificant, given that
almost all financial assets are equity instruments.
For financial liabilities this risk is limited by the short duration of financial debt.
c) Other price risks
Sensitivity analysis:
A 5% change in the valuation of the Private Equity and Listed Securities portfolios would result in a change in fair value of
€ 196 million (€ 180 million in 2022).
Credit risk
Exposure to credit risk at year-end for Brederode and its subsidiaries:
(In € million) 31 12 2023 31 12 2022 Variation
Bank deposits 21.59 10.70 10.89
Amounts receivable 2.06 11.98 -9.92
Total 23.65 22.68 0.97
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ANNUAL REPORT 2023
Liquidity risk
Through its subsidiaries, Brederode is able to draw on confirmed line of credits for an amount of € 350 million.
Analysis of residual contractual maturity dates of debts to credit institutions: the credit lines referred to above either reach maturity
in 2025 for three years renewable by tacit accent (€150 million) or do not have a maturity date but have a six-month notice period
(€200 million).
Cash flow interest rate risk
This risk does not affect Brederode or its subsidiaries.
8.8. Post-balance sheet events
None
BREDERODE S.A.
46
9. Report of the Réviseur d’Entreprises Agréé
To the Shareholders of
BREDERODE S.A.
Société Anonyme
R.C.S. Luxembourg B 174.490
4 Place Winston Churchill
L-1340 Luxembourg
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of BREDERODE (the “Company”), which comprise the statement of financial
position as at 31 December 2023, and the statement of comprehensive income, statement of changes in equity and
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as
at 31 December 2023, its financial performance and its cash flows for the year then ended in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit
profession (“Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the
“Commission de Surveillance du Secteur Financier” (“CSSF”). ”). Our responsibilities under the EU regulation No 537/2014,
the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the « Responsibilities of
“réviseur d’entreprises agréé” for the Audit of the Financial Statements » section of our report. We are also independent
of the Company in accordance with the International Code of Ethics for Professional Accountants, including International
Independence Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted for
Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements,
and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
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ANNUAL REPORT 2023
Other matter
The company has established a separate set of financial statements as at 31 December 2023 in accordance with Luxembourg
legal and regulatory requirements relating to the preparation and presentation of the financial statements on which we
issued a separate audit opinion on 02 April 2024 to the attention of the shareholders of the Company.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of the audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of the unquoted instruments (“Private Equity”)
Reasons for which a key audit matter has been raised:
As of 31 December 2023, the Company invests in unquoted instruments.
The valuation of these instruments is significant for our audit, in terms of their book value amounting to 2 636.65 million
EUR as of 31 December 2023, representing about 67% of the balance sheet.
- All of the unquoted investments (over 300 as of 31 December 2023) are realized exclusively in Private Equity funds (mainly
Buyout).
- Those investments are valued based on the last Capital Account Statements (CAS) provided by the General Partner of
the funds based on valuation procedures recommended by international associations operating in the Private Equity
sector. If the latest Capital Account Statements (CAS) are not available at the closing date of the Financial Statements,
management uses the last available CAS and adjusts it with all investments and disinvestments realized during the period
between the valuation report date and the closing date.
- As at 31 December 2023, 89% of the unquoted investments were valued based on Capital Account Statements (CAS) as
of 31 December 2023.
Response to the identified key audit matter:
The main audit procedures implemented were:
1. A review of all valuation reports or Capital Account Statements (CAS) provided by the managers of underlying funds;
2. A back testing consisting in tracing the fair value presented in the Capital Account Statements used during the last
accounting year with the audited financial statements of the Private Equity Funds;
3. A circularization of the depositary agent (i.e. Alter Domus Alternative Asset Fund Administration S.à r.l.);
BREDERODE S.A.
48
4. A review of all movements relevant to the financial year. We have tested a representative sample of these movements.
The work performed to address the above key audit matter did not raise any comments.
Key observations communicated to those charged with governance:
Based on our audit procedures, we do not have additional elements to communicate to those charged with governance.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information presented in the
annual report including the management report and the Corporate Governance Statement but does not include the financial
statements and our report of “Réviseur d’Entreprises Agréé” thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and Those Charged with Governance for the Financial Statements
The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with
IFRSs as adopted by the European Union, and for such internal control as the Board of Directors determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors is also responsible for presenting the financial statements in compliance with the requirements set
out in the Delegated Regulation 2019/815 on European Single Electronic Format, as amended (“ESEF Regulation”).
Responsibilities of the “Réviseur d’Entreprises Agréé” for the Audit of the Financial Statements
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue a report of “Réviseur d’Entreprises Agréé” that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
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ANNUAL REPORT 2023
As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for
Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control;
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Board of Directors;
• Conclude on the appropriateness of Board of Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our report of “Réviseur d’Entreprises Agréé” to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our report of “Réviseur d’Entreprises Agréé”. However, future events or conditions may cause the Company to cease to
continue as a going concern;
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our report unless law or regulation precludes public disclosure about the matter.
Our responsibility is to assess whether the financial statements have been prepared, in all material respects, in compliance with
the requirements laid down in the ESEF Regulation.
Report on Other Legal and Regulatory Requirements
We have been appointed as “Réviseur d’Entreprises Agréé” by the General Meeting of the Shareholders on 10 May 2023 and
the duration of our uninterrupted engagement, including previous renewals and reappointments, is 11 years.
BREDERODE S.A.
50
The management report is consistent with the financial statements and has been prepared in accordance with applicable
legal requirements.
The Corporate Governance Statement, as published on the Company’s website under the section “Governance”, is the
responsibility of the Board of Directors. The information required by Article 68ter paragraph (1) letters c) and d) of the law
of 19 December 2002 on the commercial and companies register and on the accounting records and annual accounts of
undertakings, as amended, is consistent, at the date of this report, with the financial statements and has been prepared in
accordance with applicable legal requirements.
We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent.
We confirm that the prohibited non-audit services referred to in the EU Regulation No 537/2014 were not provided and that
we remain independent of the Company in conducting the audit.
We have checked the compliance of the financial statements of the Company as at 31 December 2023 with relevant
statutory requirements set out in the ESEF Regulation that are applicable to the financial statements.
For the Company, it relates to financial statements prepared in valid xHTML format.
In our opinion, the financial statements of the Company as at 31 December 2023, identified as Brederode_IFRS_2023.xhtml,
have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation.
Luxembourg, 2 April 2024
For MAZARS LUXEMBOURG, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L – 1882 LUXEMBOURG
Guillaume BROUSSE
Réviseur d’entreprises agréé
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ANNUAL REPORT 2023
10. Financial calendar
Ordinary General Meeting 2024 Wednesday 8 May 2024 at 2.30 pm
No. 10 Coupon payment date Wednesday 22 May 2024
BREDERODE S.A.
4 Place Winston Churchill – L-1340 Luxembourg
www.brederode.eu
BREDERODE S.A.
52
The annual report in French constitutes the original text.
A Dutch translation of this report is available.
In the event of any divergence of interpretation between the different versions, the French text shall prevail.
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ANNUAL REPORT 2023
BREDERODE S.A.
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ANNUAL REPORT 2023
BREDERODE S.A.
4 Place Winston Churchill
L-1340 Luxembourg - R.C.S. Luxembourg B 174490
www.brederode.eu