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ANNUAL REPORT 2011

Hydratec Industries NV

Nijverheidsweg Noord 40

Postbus 328

3800 AH Amersfoort

The Netherlands

Telephone: Int. + 31 (0)33 469 73 25

Telefax: Int. + 31 (0)33 469 73 14

E-mail: [email protected]

Internet: www.hydratec.nl

Registered offi ce in Amersfoort, the Netherlands, and listed in the Commercial Register

of the Amersfoort Chamber of Commerce under number 23073095.

Disclaimer: this international annual report 2011 serves as an indicative and shortened

version of the offi cial Dutch annual report 2011, which is published on the company’s

website www.hydratec.nl. In case of contradictions, the Dutch version shall prevail.

1 HYDRATEC INDUSTRIES NV

2 Profi le and organisation 3 Agri & Food Equipment

3 Pas Reform Hatchery Technologies

4 LAN Handling Systems

5 Man Machine Interfaces

5 Danielson Europe

6 Plastics

6 Timmerije

7 Euro Mouldings

8 Major events in 2011

9 Key fi gures

11 Strategy and fi nancial targets

12 The Hydratec Industries share 13 Foreword from the CEO

14 Supervisory Board 15 Report of the Supervisory Board 18 Management Board

19 Report of the Management Board19 Growth and acquisition strategy

20 Business development during 2011

20 Financial developments

21 Dividend proposal

22 Developments per activity

22 Agri & Food Equipment

23 Man Machine Interfaces

24 Plastics

26 Health, safety and environment

26 Personnel and organisation

26 Risk management

28 Corporate Governance statement

28 In control statement

29 Outlook and expectations for 2012

29 A word of thanks

30 Summarised annual accounts 201131 Consolidated profi t and loss account

32 Consolidated statement of comprehensive income

33 Consolidated statement of changes in shareholders’ equity

34 Consolidated balance sheet

35 Consolidated cash fl ow statement

36 Five year summary

38 Contact details

2 PROFILE AND ORGANISATION

Profi le

Hydratec Industries NV (Hydratec) is an industrial holding company of companies that supply high-quality

products and systems and occupy strong positions in the following market segments:

the global agri-and food markets;

the European Man Machine Interface (MMI) applications market;

the Benelux and German plastic products and packaging industries.

Man Machine Interfaces (MMI) PlasticsAgri & Food Equipment

3

Pas Reform is an international company that offers innovative total solutions for the

hatchery industry. Since its founding in 1919 the Company has expanded into one of

the world’s largest hatchery systems suppliers. Pas Reform is active in the following

product groups:

industrial incubators for the production of uniform, robust day-old chicks;

hatchery automation systems for the effi cient processing of hatching eggs

and day-old chicks;

climate control equipment for sustainable and hygienic air and water treatment.

Pas Reform has extensive experience with providing advice regarding these systems and with

their design, installation and operation.

At the heart of the company is the Pas Reform Academy which, in close co-operation with

clients and universities, carries out research into the infl uence of the incubation process on

embryo development.

This specialist expertise is used to develop new, innovative products and services for the

hatchery industry and to train and guide hatchery managers.

Pas Reform exports to more than hundred countries. Sales and service activities are carried

out via the head offi ce in Zeddam and a joint venture in Brazil. Pas Reform also has its own

sales offi ces in Malaysia and Indonesia and an extensive network of local partners and agents.

The products are distributed all over the world from the logistics centre in Doetinchem.

Pas Reform employs 79 people who focus primarily on the development, sale, fi nal assembly

& installation, and service of the hatchery systems.

www.pasreform.com

Pas Reform Hatchery TechnologiesAGRI & FOOD EQUIPMENT

Pas Reform, with a presence in over hundred countries, is one of the world’s leading incubator manufacturers.

4

LAN has specialised in the handling of packaged food and pharmaceutical products during

the sterilization process since 1970. LAN’s systems are client-specifi c and form the connection

between fi lling machines, sterilisation boilers and packing machines in a production line.

They are used to position, pick up and move products of various sizes and shapes and made

from a variety of materials. This enables the most complex packaging to be processed in

every required quantity.

Recently LAN expanded its product range to include automation systems for the effi cient

processing of hatching eggs and day-old chicks.

LAN’s strength is its project-based approach to the execution of large and complex systems:

inventive robot technologies and mechanical solutions are combined with advanced control

technologies to achieve a production line that works perfectly. This demands intensive

co-operation within the project teams and with the client. This is why LAN’s organisation

and operations revolve around teamwork and partnerships with clients.

Most of LAN’s revenue is generated outside the Netherlands. Its loyal clients include

multinationals such as Mars, Nestlé Purina, Campbell’s, Kraft and Del Monte.

The systems are developed and assembled by sixty employees in the facility in Tilburg.

Due to the client-specifi c character of the projects the heart of the company is formed by

the engineering department where specialists design the systems’ mechanical, electrical

and control technologies. Manufacture of the components is contracted-out. LAN’s own

specialists then assemble, test and install the system.

www.lan-hs.com

LAN Handling SystemsAGRI & FOOD EQUIPMENT

LAN specialises in the handling of packaged food and pharmaceutical products.

5

Danielson develops, manufactures and builds innovative electronic control panels that

enable complex machinery to be operated in demanding environments. In its market

approach Danielson’s priority is the needs of its clients and every solution is designed to the

client’s specifi cations. Danielson’s clients are machinery and equipment builders in the

medical sector and manufacturers of industrial automation equipment.

Thanks in part to its client-oriented approach, in which Danielson’s specialists advise clients

at an early stage in the development process, Danielson occupies a top position in the

European market. Danielson’s objective for the coming years is to strengthen this position

still further.

Danielson develops control panels in the form of membrane switches, rubber keypads,

piëzo switches and touchscreens. The company’s innovative strength is apparent in every

component of the solution: from the simple switch to complex electronics. In all these fi elds

Danielson ranks among the top in terms of both innovation and quality. The capacitive

touchscreens recently developed in-house are a clear example of this.

Danielson, with 185 employees, serves the entire European market. The company has two

production facilities in Hardenberg (NL) and Aylesbury (UK). To ensure clients are provided

the optimum service sales engineers responsible for maintaining direct contact with clients

are located in Europe’s main industrial centres.

www.danielsoneurope.com

www.danielson.co.uk

Danielson is one of the top suppliers of man machine interfaces in Europe.

Danielson EuropeMAN MACHINE INTERFACES

6

Timmerije is an ISO / TS 16949 certifi cated full-service manufacturer of technologically

complex plastic injection-moulded components. Timmerije’s machine park includes fi fty

injection-moulding machines, with pressures varying from 25 ton to 1,200 ton, and state

of the art 2K injection moulding, gas injection, insert moulding and in-mould decoration

techniques.

As a ‘Custom Moulder’ with around hundred employees, its own engineering department

and its own tool maker, Timmerije achieves outstanding quality for its clients.

Delivering quality and working with the client to fi nd solutions are in the company’s DNA.

Timmerije’s integrated, professional approach to product and process development and

extensive expertise and experience result in smart and sustainable solutions for its clients.

The sustainable use of materials and the reduction of waste are key criteria.

Timmerije’s engineering services include product development, material selection, mould

fl ow / FEA studies, prototyping, matrix design, automation and value engineering. Timmerije

also offers additional services such as assembly, painting, coating, printing, ultrasonic

welding and delivery up to and including the packaging. Timmerije’s logistics organisation

ensures fl exibility in supply and a high degree of delivery reliability.

www.timmerije.com

Timmerije is a leading designer and manufacturer of high-quality plastic products in the Benelux.

TimmerijePLASTICS

7

Euro Mouldings manufactures blow moulded plastic packaging. A combination of

acquisitions and organic growth has enabled the company, which was founded in 1995

as Euro BV, to build-up a wide range of packaging. Currently the factory in Nijverdal,

the Netherlands, has 38 blow moulding machines which produce products ranging from

20 millilitre bottles to 30 litre jerry cans. Many of the bottles and containers carry the

so-called UN-label, which indicates that they are suitable for transporting hazardous

materials.

The wide product range means many different markets can be served including the

automotive, chemicals, food, cosmetics and agricultural sectors. The majority of the products

are made of High Density Polyethylene (HDPE). The range includes both ‘standard’ products

manufactured using Euro Mouldings’ own moulds and client-specifi c packaging.

New products are continuously being developed (either independently or to fulfi l an order

from a client). The focus here is on improved functionality, logistics advantages, weight-

savings and image.

Euro Mouldings strives to generate added-value in the fi eld of logistics for its clients. Most of

the products are available from stock. In view of the voluminous nature of the products the

timing of deliveries is very important.

Most deliveries are to clients in the Netherlands, Germany and Belgium. The German market

is easily accessible for Euro Mouldings.

The combination of development capacity for new packaging and logistics added-value is

summarised in Euro Mouldings’ mission: ‘We stock your design‘.

With around sixty employees Euro Mouldings is a reliable, fl exible and client-oriented

supplier of plastic packaging.

www.euromouldings.com

Euro Mouldings is a specialised supplier of client-specifi c plastic packaging.

Euro MouldingsPLASTICS

Despite diffi cult macro-economic developments all the activities contributed to the profi t for 2011.

The acquisition of the Lias activities (Agri & Food Equipment) at the end of 2011 has brought Hydratec NV activities in a third market segment.

Hydratec’s growth potential has increased substantially to include global markets.

Annual revenue for 2011, including the newly acquired activities, amounted to over € 120 million.

Profi t per share rose to € 3.07 (2010: € 1.49) due to the consolidation of the results of the acquired activities as of 1 September 2011.

Virtually no dilution of the Hydratec share because the acquisition was paid almost entirely in cash.

After the acquisition Hydratec’s solvency ratio amounted to 36.9%.

MAJOR EVENTS IN 20118

9Amounts in thousands of euros unless stated otherwiseKEY FIGURES

2011 2010

Profi t and loss account

Net revenue 84,190 55,137

Operating profi t 5,523 3,073

Net profi t 4,159 2,144

Net profi t to be allocated to shareholders 3,631 1,765

Cash fl ow

Cash fl ow from operating activities 10,888 1,661

Cash fl ow from investing activities – 18,304 – 10,295

Cash fl ow from fi nancing activities 733 – 1,869

Net cash fl ow – 6,683 – 10,503

Balance sheet

Shareholders’ equity 24,387 21,165

Group equity 27,420 22,875

Balance sheet total 74,386 36,992

Key ratios

Operating profi t as a % of revenue 6.6% 5.6%

Return on invested capital / 1 8.7% 8.2%

Return on shareholders’ equity / 2 15.9% 8.5%Solvency / 3 36.9% 61.8%

Number of issued shares 1,222,143 1,183,094

Profi t per share (in euro) 3.07 1.49

Diluted profi t per share (in euro) 2.97

Number of employees at year end (FTEs) 488 339

1 / Net profi t + interest charges as a % of the average invested capital (total assets minus cash and cash equivalents minus current, non-interest bearing liabilities).

2 / Net profi t as a % of the average shareholders’ equity.3 / Group equity as a % of the balance sheet total.

Net revenue

2010 2009

100,000

2011

80,000

60,000

40,000

20,000

0

84,190

55,137

17,322

Net profit

2010

2009

5,000

2011

4,000

3,000

2,000

1,000

0

3,631

1,765

– 590

Operating profit

2010

2009

7,500

2011

6,000

4,500

3,000

1,500

0

5,523

3,073

– 1,223

Average number of employees

2010 2009

500

2011

400

300

200

100

0

381

330

158

Profit per share (in euros)

2010

2009

5

2011

4

3

2

1

0

– 1

3.07

1.49

– 0.50

Group equity

2010 2009

30,000

2011

24,000

18,000

12,000

6,000

0

27,420

22,875

20,861

Amounts in thousands of euros unless stated otherwise10

Financial targets

Hydratec strives to achieve an operating profi t of at least 10% of revenue. This profi t target can,

however, temporarily fail to be achieved primarily as a consequence of economic conditions and

due to the reorganisation of acquired, less profi table, companies.

Together with the envisaged growth and healthy solvency Hydratec strives for a dividend

distribution amounting to at least 40% of the profi t after taxes (excluding any one-time income).

Strategy

Hydratec is an industrial holding company with majority interests in a number of different

business activities. The strategy is aimed at achieving consistent, long-term revenue growth

and stable results with all Hydratec companies. This must offer our shareholders the prospect

of a good return.

Motivated management

It is very important that everyone of the companies has a good and motivated management

team that optimises market positions and results in a practical and realistic manner. This is

assured by ambitious, but realistic, targets that form a guideline for everyone involved through

well-founded scenarios.

The Management Boards of our companies are integrally responsible for their own operating

activities. All business aspects are discussed during the regular consultation meetings between

Hydratec’s Management Board and the Management Boards of the operating companies.

These discussions are based on a clear framework of regular reports and practical co-ordination

regarding tactical and strategic objectives. This enables a fast and alert response to opportunities

and threats.

Active entrepreneurship

Because the activities of the different groups are very varied there is no basis for central staff

departments, which means overhead costs are limited to the minimum. Business operations are

based on the high degree of target-oriented, no-nonsense management within which active

entrepreneurship and stimulating leadership can fl ourish best.

11 STRATEGY AND FINANCIAL TARGETS

Financial data per ordinary share

Amounts in euros unless stated otherwise

2011 2010

Number of issued shares 1,222,143 1,183,094

Operating profi t 4.52 2.60

Shareholders’ equity 19.95 17.89

Profi t per share 3.07 1.49

Diluted profi t per share 2.97 –

Available cash fl ow / 1 – 6.07 – 7.30

Dividend 1.20 1.00

Price at year end 18.05 15.00

Lowest price 14.70 12.40

Highest price 19.98 16.25

1 / Operating cash fl ow minus investment cash fl ow.

Stock market listing and market capitalisation

Hydratec’s shares are listed on NYSE Euronext Amsterdam (ISIN NL 000 939 1242).

The total number of issued shares as at 30 December 2011 changed due to a private issue of

39,049 shares. As a result the total number of shares rose to 1,222,143.

Disclosure of Major Holdings Act

The following interests governed by the Disclosure of Major Holdings Act are known (corrected

for the number of shares as at 1 January 2012):

Shareholder Interest Date of disclosure

Mr. E. ten Cate 79.5% 23 March 2011

Zoomers Beheer BV 6.0% 1 November 2006

Financial calendar 2012

Announcement of annual results 22 March

Trading update fi rst quarter 15 May

General Meeting of Shareholders 31 May

Publication of half-year fi gures 26 July

Trading update third quarter 15 November

12 THE HYDRATEC INDUSTRIES SHARE

New Management Board member

At the end of 2011 Hydratec expanded its activities considerably through the acquisition of an

88.5% interest in Lias Industries, to which Pas Reform Hatchery Technologies and LAN Handling

Systems belong. Pas Reform, the most important activity, is a global supplier of industrial incubators.

Over the past few years Bart Aangenendt, the Managing Director, has developed Pas Reform into

one of the top-three companies in this fi eld in the world. I am delighted that he has joined the

Management Board of Hydratec NV. He will continue to be responsible for the Lias activities.

Growth is a shared responsibility

In just a few years Hydratec’s annual revenue has risen from several tens of millions from two

companies to more than € 120 million from fi ve companies in three market segments. Despite

this growth we have continued, and will continue, to adhere stringently to our fundamental

principle that the responsibility for business operations within the companies rests with the

people who have direct contact with the clients and understand their primary business processes.

We consider ourselves lucky to have at our disposal management teams who carry out these

tasks with great dedication and who take a personal interest in their employees.

Investing and innovating

I remain optimistic because the current situation also creates opportunities for companies which,

particularly at this time, can continue investing and innovating. Danielson is on the threshold of

totally new, developed in-house technological product positions. Timmerije has received many

new orders recently and Euro Mouldings is also serving new clients in an innovative way. And if

the world (and especially the less well developed markets) wants to continue feeding its citizens

a great many new incubators will have to be installed! I would like to express my thanks to the

employees in all our companies for their efforts and fl exibility. A year in which our clients’

demands changed so quickly and so often put more demands on everybody to remain client-

oriented and to come up with creative solutions. We are proud that so many of our employees

responded so positively to the challenge. This instils confi dence in the future!

Roland Zoomers CEO

2011 was an exceptional year for Hydratec NV and its companies. After the robust growth of

2010 we expected revenue development to stabilise at more normal levels. During the fi rst

months of the year, however, the revenue just kept on increasing. Because the fi xed costs of all

the companies had already been reduced, during the fi rst half of 2011 good operating profi ts

were achieved despite relatively high raw materials prices. On the basis of this, when the

half-yearly fi gures were published we forecast that we could achieve robust profi t growth

over the whole of 2011.

Lias Industries activities acquired

During the summer this expectation changed due to rapidly worsening macro-economic factors

and a loss of confi dence on the European capital markets. Clients put the brakes on, which had

immediate consequences for our order books and revenue levels and, as a result, our profi ts.

These developments meant that during the second half of the year our operating profi ts fell.

This situation was offset by the consolidation as of 1 September, and therefore the contribution

towards the results, of the newly acquired activities of Lias Industries. Thanks to this, ultimately

both the total revenue and profi t were higher than for 2010.

Key success factor

We are making no predictions for 2012. If we have learned one lesson from the past it is that

market sentiments and economic factors can change very quickly and, therefore, so can the

demand for our products. This implies that only the organisations that can adapt to changing

conditions quickly and effectively will be successful and remain competitive. This has always been

the case, but the speed with which changes take place has increased. More than ever before the

key success factor is: Adapt and anticipate what will happen, minimise unpredictability and

respond to the unexpected with cunning and power! Because market developments are

unpredictable the fl exibility of the organisation has become a very important success factor.

We believe our companies have the necessary fl exibility. This is a constant challenge for our

management teams and an important basis for our investment decisions.

13 FOREWORD FROM THE CEO

From left to right: Jan Vaandrager, Egbert ten Cate and Henk Kienhuis.

14

E. ten Cate (1945) Chairman

First appointed: 2000

Current term ends: 2012

Current position: director Bank ten Cate & Cie NV

Supervisory Board memberships/other positions held

Supervisory Board member, Koninklijke Ten Cate nv

Chairman of the Supervisory Board, Rijksmuseum Twente

Supervisory Board member, Medisch Spectrum Twente

H.A.A. Kienhuis (1945) Vice-chairman



Last position held: lawyer and attorney


Vice-chairman, Stichting Edwina van Heek

Supervisory Board member, Iesselholtinck BV

Member of the Board, Stichting Continuïteit Reesink NV

J.E. Vaandrager (1943)



Last position held: member of the Board and CFO, TKH Group NV


Supervisory Board member, HITT NV

Supervisory Board member, B.E. Semiconductor Industries NV

All the Supervisory Board members are Dutch nationals.

SUPERVISORY BOARD

15

the Supervisory Board. His fi nancial background and broad knowledge of the manufacturing

industry are valuable for Hydratec. In 2012 Mr. Ten Cate will have served three terms of four

years as a member of the company’s Supervisory Board. Although the best practice stipulations

of the Corporate Governance Code recommend a maximum of three terms, the Supervisory Board

is of the opinion that Mr. Ten Cate’s profi le fi ts extremely well with the Supervisory Board and

is unique in view of his expertise and experience related to the creation of today’s Hydratec.

Mr. Ten Cate is also a major shareholder and, as such, plays an important role in the stability of

the company. For these reasons the Supervisory Board intends, as an exception, to recommend

that Mr. Ten Cate is re-appointed for a fourth term of four years.

Supervision and meetings

During 2011 fi ve scheduled meetings were held with the Management Board. Prior to the

General Meeting of Shareholders of 1 June 2011 the Supervisory Board, in the absence of the

Management Board, evaluated the functioning of the Management Board and its own Board.

Acquisition of Lias Industries BV

During 2011 several extra meetings were held with the Management Board in connection with

the acquisition of Lias Industries. The Chairman of the Supervisory Board, Mr. E. ten Cate, was

not present during these meetings due to his involvement with Lias Industries. In this context

a protocol regarding his confl ict of interest was also drawn-up and signed by Mr. Ten Cate,

the other members of the Supervisory Board and the members of the Management Board on

3 February 2011. On the appointment of the new members of the Supervisory Board this

protocol was revised and reaffi rmed. The most important points of this protocol were:

Mr. Ten Cate will not participate in the Supervisory Board’s discussions and decision

making regarding the transaction.

From the moment at which Hydratec decides to conduct discussions regarding the

transaction until the moment at which (i) the transaction is fully completed or (ii) it

is clear that the transaction will defi nitely not take place, discussions and decision

making relating to the transaction within the Supervisory Board will only take place

during Supervisory Board meetings not attended by Mr. Ten Cate.

The Supervisory Board is delighted with the result achieved in the 2011 fi nancial year. Although

revenue and profi t were under pressure during the second half of the year, the net profi t (before

third party shares) of the existing activities rose to € 2.2 million. As a result of the acquisition

of 88.5% of the shares in Lias Industries BV, the fi gures of which were consolidated as of

1 September 2011, the net profi t (before third party shares) for 2011 amounted to € 4.2 million,

an increase of 94% compared with 2010.

Annual report

We hereby submit to the shareholders the 2011 annual report, including the annual accounts,

of Hydratec Industries NV prepared by the Management Board. These annual accounts have

been audited and certifi ed by the external auditor, BDO Audit & Assurance, and discussed by us

and the Management Board on 21 March 2012 in the presence of the auditor. The auditor’s

declaration is included on page 66 of the offi cial Dutch 2011 annual report, which can be found

on the company’s website www.hydratec.nl. On these grounds we are of the opinion that the

annual report meets the specifi cations for transparency and forms a good basis for the

Supervisory Board’s accountability in respect of its supervision.

We recommend that you adopt the annual accounts, approve the dividend proposal and

discharge the Management Board for its management and the Supervisory Board for its

supervision during 2011.

Composition of the Supervisory Board

At their own request Messrs. G.P. van Dobben de Bruyn and L.P.E.M. van den Boom resigned

as members of the Supervisory Board as of 4 July 2011. We are extremely grateful to them for

their contribution towards the supervision of the company during their terms of offi ce. We are

delighted that the two vacancies in the Supervisory Board have now been fi lled. During the

Extraordinary General Meeting of Shareholders on 17 October 2011 Mr. H.A.A. Kienhuis was

appointed as Vice-chairman of the Board. Mr. Kienhuis’ legal background and experience as a

company lawyer are important for Hydratec. During the Extraordinary General Meeting of

Shareholders on 27 October 2011 Mr. J.E. Vaandrager was also appointed as a member of

REPORT OF THE SUPERVISORY BOARD

16

During this period Mr. Ten Cate will receive no information regarding the transaction

from the Hydratec side.

During the Extraordinary Meeting of Shareholders in which the transaction must be

approved Mr. Ten Cate will not participate in the deliberations and voting regarding

the transaction.

Mr. Ten Cate will not be directly involved on the Lias side with the negotiations

carried out by the Management Board on the Hydratec side.

This acquisition was approved during the Extraordinary General Meeting of Shareholders on

30 December 2011. Mr. Ten Cate was not present and, in conformance with the above protocol,

cast blank vote regarding the acquisition of 88.5% of the shares in Lias Industries.

During its meetings the Supervisory Board discussed the strategy, acquisition policy, risk

management, quarterly and half-yearly results, 2010 annual fi gures and 2012 budget.

The business progress of the various subsidiaries was also discussed as was the effect of the

economic crisis on the markets in which the Hydratec companies operate. The Board endorses

the importance of the Management Board’s intention to pay considerable attention to the

integration of the Lias Industries companies Pas Reform and LAN in 2012.

Corporate Governance

The Supervisory Board endorses the objectives of the guidelines contained in the Dutch Corporate

Governance Code for stock exchange listed companies. In view of the size of the organisation

and the number of Supervisory Board members no separate committees have been formed.

Currently Mr. E. ten Cate is the only member of the Board who does not meet the independence

criteria as laid-down in paragraph III. 2.2, clause e of the Code. More information regarding the

company’s position can be found on www.hydratec.nl.

Composition of the Management Board

There were no changes to the composition of the Management Board during the 2011 fi nancial

year. As Lias Industries’ activities now account for a major portion of Hydratec’s overall activities

Mr. B. Aangenendt (General Manager of Lias Industries and Pas Reform) was appointed to the

Management Board as of 1 January 2012. From that moment the statutory management Board

of Hydratec Industries NV has comprised Mr. R. Zoomers and Mr. B. Aangenendt.

Remuneration of the Management Board

An agreement, that expires on 1 September 2015, has been reached with the CEO, Mr. R. Zoomers.

This agreement covers all the company’s obligations in respect of fi xed salary and pension

agreements. Should this contract be terminated by the company before the agreed date the

recompense will amount to one year’s salary. A bonus directly linked to the operating profi t for

the 2011 fi nancial year has been agreed. The Supervisory Board has now agreed a bonus linked

to the operating profi t over the 2012 fi nancial year.

As of 1 January 2012 Mr. B.F. Aangenendt has been appointed a member of the Management

Board for a fi rst term of up to four years. He will remain a member of the Management Board

of Lias Industries BV and Pas Reform BV and his employment agreement with these companies

remains valid. All the agreements laid-down in this employment agreement will be continued.

In the context of his appointment as a statutory Director of Hydratec Industries NV, a bonus

directly linked to the operating profi t will also be agreed with Mr. Aangenendt.

Report of the Supervisory Board

Remuneration policy

The Supervisory Board of Hydratec Industries NV follows a remuneration policy for the company’s

Management Board based on the following principles:

The Management Board remuneration policy must enable good managers

to be recruited and retained.

The remuneration policy must be in accordance with the company’s Corporate

Governance policy.

The remuneration must be compatible with the strategic and fi nancial targets and be

performance-oriented, whereby there should be a good balance between short-term

and long-term results and/or targets.

The remuneration may not include any incentives aimed at the recipients own

interests and in confl ict with the interests of the company.

The possible outcomes of the remuneration policy are evaluated annually.

The remuneration of the members of the Management Board is specifi ed in Note 1.25 on

page 66 of the offi cial Dutch 2011 annual report, which can be found on the company’s

website www.hydratec.nl.

In conclusion

The Supervisory Board is grateful to the Management Board, the management teams and

all the employees for their efforts and dedication during 2011 and the results achieved

in a challenging year.

Amersfoort, 12 April 2012

Supervisory Board

E. ten Cate Chairman

H.A.A. Kienhuis

J.E. Vaandrager

Report of the Supervisory Board17

Roland Zoomers (1950)



Shareholding in Hydratec NV: 6.0%

Bart Aangenendt (1964)



Shareholding in Hydratec NV: 3.2%

Both members of the Management Board are Dutch nationals.

From left to right: Bart Aangenendt and Roland Zoomers.

MANAGEMENT BOARD18

19

The recent successful development of Pas Reform can be explained as follows:

In 2004 and 2010 the company introduced new generations of single-stage

incubation systems. These are offered as a total solution in combination with

Pas Reform Academy (in-house training for clients). Exporting innovative

technologies and expertise has, in recent years, enabled Pas Reform to position

itself as a specialist in this niche market and, based on this, build-up a strong,

global network of trading agents.

Growth and acquisition strategy

Hydratec has for some time had superfl uous liquidity, mainly as a result of the sale of the

Nyloplast activities in October 2008. Hydratec’s ambition was to expand its activities once

again and, in that context, at the beginning of 2010 acquired a 75% interest in two plastics

companies – Timmerije and Euro Mouldings. As there were insuffi cient concrete possibilities

to acquire business activities against attractive conditions within the existing product-market

segments Hydratec also deliberately sought other industrial activities. This led to the acquisition

of an 88.5% interest in Lias Industries BV (Lias), the holding company of Pas Reform BV and

LAN Handling Systems International BV. Over the past few years Pas Reform, the largest Lias

business activity, has developed successfully and is now a leading supplier of industrial incubators

with an annual revenue of around € 50 million.

Important positive reasons for Hydratec to make this acquisition were:

Pas Reform is one of the world’s largest suppliers of industrial incubators and the

related hatchery automation systems and climate control equipment. Based on

its extensive experience with providing advice regarding and the development,

marketing and installation of these systems, in recent years Pas Reform has achieved

substantial growth. Pas Reform has around 75 employees.

Most of the manufacture of the incubator components is contracted-out to specifi c

suppliers, many of them in Eastern Europe. As a result Pas Reform has a relatively

small permanent organisation and can respond quickly and fl exibly to changes in

demand. Orders from clients comprise projects involving the supply of all the

hatchery equipment which is then assembled and installed on-site at the client’s

premises. Currency translation risks are limited because virtually all the invoicing

is in euros.

REPORT OF THE MANAGEMENT BOARD

Pas Reform’s stand at the ‘VIV Europe’ show in Utrecht.

20

As a component of the transaction 3.5% of the acquired Lias shares were paid for in Hydratec

shares, for which 3.3% of the total initial share capital was issued.

The acquisition of this interest in Lias Industries at the end of 2011 has expanded Hydratec’s

size and activities substantially. This means we are now focusing primarily on expanding and

reinforcing our current business activities. Should opportunities that would structurally

strengthen or improve the current business activities arise, specifi c acquisitions will be considered

very seriously.

Business development during 2011

The revenue and gross margin for 2011 were € 84.2 million and € 37.1 million respectively.

Lias’ revenue and margin during the period September to December 2011 were € 23.9 million

and € 7.4 million respectively. Without the contribution of Lias revenue would have increased

by 9%.

Financial developments

The operating profi t for 2011 amounted to € 5.5 million, which was 6.6% of the revenue

(2010 operating profi t: € 3.1 million). Without the contribution of Lias operating profi t would

have amounted to € 3.4 million.

Expertise and experience in the fi eld of incubator technologies is scarce – the market

is relatively small with only a few players worldwide. Since 2000 Pas Reform has

invested in its own organisation and has recruited and retained people with the

specifi c skills needed to make the transition from machine builder to system and

knowledge supplier.

The global incubator market has a limited number of suppliers. Pas Reform ranks

among the top-three and is recognised as an innovative company. Pas Reform’s direct

competitors are hardly any larger and the remaining competitors are far smaller.

This means Pas Reform can profi t optimally from the increased demand for modern

incubators.

In recent years the consumption of chicken has risen faster than the consumption of

beef and pork. The expectation is that this trend will continue and that Pas Reform

will profi t from this development.

The reasons behind this robust growth in consumption are:

Increased welfare in relatively poor (emerging) countries has meant higher meat

consumption in these regions.

Poultry products are relatively cheap and easy to produce.

Chicken is healthier than red meat and there are no religious restrictions on chicken

consumption.

Poultry meat can be produced more cheaply and sustainably than beef or pork

because a chicken requires far less food than a pig or cow to produce one kilo of

meat. This stimulates investments in industrial hatcheries in fast-growing markets.

The purchase price of the acquisition of Pas Reform was around € 18.3 million, € 17.6 million

of which was paid in cash. The fi rst instalment of € 13.2 million was paid at the time of the

acquisition on 30 December 2011. The remainder will be paid after the approval of Lias’ 2011

annual accounts at the end of May 2012 at the latest. Hydratec paid virtually all the purchase

price in cash: around € 6 million from its own means and the remainder through a bank loan.

Report of the Management Board

‘At the end of 2011 the scale and scope of Hydratec’s activities were expanded substantially.’

21

Financial income and expenses

In 2011 net interest charges amounted to € 108,000 compared with € 156,000 in 2010. Due to

the acquisition of the Lias activities, on 30 December 2011 the Group’s fi nancing structure changed

because the acquisition was fi nanced partly through a bank loan.

Fiscal effects

The effective tax rate over 2011 was 23.2% compared with 26.5% in 2010. The lower rate was

due partly to the utilisation of the innovation box regulation.

Net profi t

The net profi t for 2011 amounted to € 3.6 million after deducting the third party share of

€ 528,000 (2010: € 1.8 million).

Cash fl ow

In 2011 operational cash fl ow amounted to € 10.9 million (2010: € 1.6 million). Cash fl ow from

investing activities amounted to € 18.3 million negative, of which a net € 15.9 million was

related to the acquisition of an 88.5% interest in Lias. Net cash fl ow from fi nancing activities

amounted to € 733,000. This was the result of the bank loan of € 4.4 million, the dividend

distribution of € 3.1 million and loan repayments amounting to € 352,000.

Dividend proposal

It will be proposed to the General Meeting of Shareholders that a dividend of € 1.20 per share

be paid for the 2011 fi nancial year (2010: € 1.00 per share). This sum will be paid in cash.

The profi t for 2011 will be added to the other reserves. This dividend distribution is in line with

the policy of paying out 40% of the profi t after taxes.


22

In 2011 Pas Reform’s revenue rose by 60% compared with the previous year. The substantial

increase in sales of incubators, hatchery automation systems and climate control equipment,

especially during the fi rst half of the year, enabled Pas Reform to strengthen its international

market position still further.

Technological innovation, the optimisation of business processes and new partnerships with

clients and suppliers contributed towards these good operating results. The introduction of a new,

sustainable, generation of incubators in 2010 bore fruit and improvements in the fi eld of client

services gave Pas Reform a good starting position in the market. In addition, there was increasing

appreciation from the market for the Pas Reform Academy, which translates clients wishes into

new hatchery products.

Suppliers needed some time to respond to the increased demand, which meant delivery times

lengthened considerably at the beginning of the year. Delivery times were brought back to more

normal lengths during the summer and the third quarter. At the beginning of 2011 a new

distribution centre in Doetinchem went into operation, which improved the logistics substantially.

In 2011 a new sales offi ce was opened in Indonesia. Pas Reform had already opened a sales offi ce

in Malaysia. In 2011 the joint venture in Brazil, established in 2008 with a local partner to serve

this important market, acquired its fi rst locally-produced projects.

Although the subsidiary LAN Handling Systems BV achieved a good project turnover, its results

were not satisfactory due to disappointing price levels. A start was made on the development of

specifi c handling equipment for the poultry industry.

Developments per activityAgri & Food Equipment: Pas Reform Hatchery Technologies and LAN Handling Systems

€ x 1,000 2011 2010

Revenue 61,938 33,903

Gross margin 20,825 12,574

Depreciation and amortisation 449 252

Investments 665 170


Number of FTEs at year end 144 61

1 / Figures for the entire year for information purposes; only the fi gures for the period 1 September to 31 December are consolidated in the annual accounts.

2 / 2010 excluding LAN Handling Systems.

/ 2 / 1


Pas Reform’s new distribution centre in Doetinchem.

23

During the fi rst half of 2011 Danielson Europe managed to continue profi ting from the always

high market demand. After the summer Danielson also began feeling the effects of the economic

situation as demand from its most important markets dropped slightly. Despite this, Danielson’s

revenue for the whole of 2011 was 7.8% higher than for 2010. This resulted in an operating

profi t amounting to 8.5% of revenue.

During the year the organisational structure was amended with the most important consequence

being that Danielson now has a smaller and more effi cient management team. This team is now

also totally responsible for the activities in England.

In Hardenberg a second production area went into service, which increased the factory area by

around 25%. This was needed to create more space for the substantially increased demand for

touchscreens.

The higher profi t is partly thanks to earlier investments in quality improvements and effi ciency.

The super-fast laser, which went into service during the fi rst months of 2011, played a major role

in this. With the help of 5S-methodology a number of departments were re-equipped, which has

resulted in further logistics and effi ciency improvements.

In September Danielson was able to introduce its new generation touchscreens. These new

products are based on the so-called projected capacity technology and have a glass surface

and multi-touch capabilities. This technology, which is derived from consumer electronics

(iPhone, iPad etc.), is expected to really take off for industrial applications as well.

To safeguard Danielson’s pioneering role in the market, in mid 2011 a project was started aimed

at further broadening Danielson’s expertise in the fi eld of new innovative touchscreens and the

related electronics.

Further progress was also made in the environment and sustainability fi eld. The quantity of waste

has been reduced still further and the new heat-recycling plant has led to signifi cant energy savings.

Man Machine Interfaces: Danielson Europe

€ x 1,000 2011 2010

Revenue 23,073 21,411


Depreciation and amortisation 559 564

Investments 513 497



Danielson’s products are tailor-made for the client.


24

Both the Plastics companies also profi ted from an increased demand for their products during

the fi rst half of the year. Materials costs account for a large portion (around 60%) of the total

cost price of the products of both these companies. The continuing increases in raw materials

prices during the fi rst half of 2011 could not be passed-on immediately, which resulted in lower

gross margins. As this effect was offset by the increased revenue, in absolute terms the operating

profi t was higher than in the same period in 2010. Both companies supply the Dutch and German

manufacturing industries and, due to the severe economic uncertainty, from the summer onwards

saw order levels across a broad front being adjusted downwards. As a result, during the second

half of 2011 revenue and operating profi t were lower. Despite this the operating profi t for the

whole of 2011 was higher than for the previous year.

Plastics: Euro Mouldings and Timmerije

€ x 1,000 2011 2010

Revenue 37,254 33,726


Depreciation and amortisation 1,366 1,313

Investments 1,692 1,566




Euro Mouldings manufactures blown plastic packaging.

25

Euro Mouldings’ manufacturing capacity was increased to cope with the increased demand and

a partial fi ve-shift service was implemented.

At Timmerije Wim Simons was appointed as a new member of the Management Board in April

2011. His years of experience in the injection moulding industry means Wim Simons has brought

with him valuable expertise.

Both companies search continuously for possibilities to re-use plastics. Most of the so-called

manufacturing waste is immediately re-used in the on-going manufacturing process. In addition,

continuous research is carried out and possibilities found to use recycled plastic in new products.

Although, in most cases, this does not generate cost advantages it does lead directly to a more

sustainable use of raw materials.

Timmerije specialises in technologically-complex products.


‘Only those organisations that can adapt quickly and effi ciently to changing conditions will be successful.’

26

Risk management

Hydratec Industries NV’s growth, acquisition and new activities

The growth of its revenue and results is at the core of Hydratec’s strategy. We endeavour to

achieve this by a combination of the organic growth of every company and selective acquisitions.

We believe that continuous growth is necessary for a healthy business development and stimulate

our companies to improve their competitive positions by achieving product improvements and

innovations. Product developments are, however, based primarily on identifi ed concrete

requirements of clients and potential clients.

Hydratec wishes to strengthen its market positions, gain synergy advantages and gradually

expand its revenue and geographical area of operations through acquisitions. Hydratec also

remains abreast of opportunities in sectors in which it is not yet active. This can mean that

Hydratec acquires activities in new markets in which it does not have a proven track record

of experience and/or expertise.

This growth strategy may also require investments that cannot always be fi nanced from our

own resources and available credit facilities. It may, therefore, be necessary to call on the capital

market and/or shareholders. Maintaining a strong solvency ratio is, therefore, an important basis

for continuity.

Health, safety and environment

Controlling, and where possible reducing, absenteeism through sickness remains a constant

concern. Paying continuous attention to employees, and in particular their working conditions,

is especially important for industrial companies. Not only to minimise absenteeism but also to

guarantee maximum safety within the production processes. Virtually every industrial process

involves environmental risks. Limiting these risks is an extremely important area of attention

for the management teams. Environmental risk assessments are, therefore, carried out at the

production facilities on a regular basis and, if necessary, lead to the immediate implementation

of measures and procedures to reduce the risks still further. Increasingly the processes are also

checked for possibilities for improving the sustainability of our products and/or production

processes. This aspect will become increasingly important. Not only to offset the ever higher

energy prices, but also because we expect increasingly stringent requirements in this fi eld will

be specifi ed by our clients.

Personnel and organisation

As at the end of 2011 the workforce had risen from 339 to 488 FTEs of which 141 FTEs were

due to the acquisition of Lias’ two companies in Zeddam and Tilburg. As a principle we strive for

strong local organisations with a high degree of entrepreneurship and a sense of responsibility

for all business processes. The personnel policy is implemented at the operating company level.

At this level attention is paid to safety, accident prevention and absenteeism through sickness

and, above all, to the creation and maintenance of a loyal organisation with suffi cient fl exibility

and ambition. At every company there is regular and constructive consultation with the local

Works Council. The central Management Board participates in this consultation at least once

a year in the absence of the local manager.


‘The strength of a company is determined by the loyalty, practical expertise and spontaneous efforts of its employees.’

The MMI company is the largest client of two specifi c companies, purchasing 20-25% of their

total production. These suppliers supply respectively 20% and 10% of the total volume

purchased by the MMI company. Although this represents a high degree of mutual dependency,

the MMI company does have the option of purchasing these products from other suppliers.

The food and agri companies use a variety of suppliers: Eastern European companies for the

more mass-produced products and companies in the region for specifi c components and smaller

quantities. The largest supplier (< 10% of the purchase volume) is based in the Czech Republic.

Real estate

The companies are increasingly being confronted with more stringent requirements regarding

possible soil contamination in the event of new construction or renovation. These stipulations

could lead to higher costs when expanding, or lower proceeds from the sale of real estate.

Environmental risks

Producing and processing plastic products and (silk-screen) printing fi lms go hand-in-hand with

environmental risks. Limiting these risks is a key issue for the Hydratec companies which must,

at all times, focus on the environmental aspects relevant to their operations and the prevention

of calamities. The current situation and related (fi nancial) risks at the production facilities are

evaluated and recorded on a regular basis. The aim of the evaluation is not only to ensure

compliance with environmental legislation, but also to assess what preventative measures can

Commercial

Although the Plastics companies’ top-10 clients account for around 65% of the total turnover,

the largest client accounts for less than 10%. If a large client terminates its relationship with the

company the loss of revenue cannot be offset immediately. In view of the fact that such client

relationships involve a wide range of products, should a client relationship be terminated the

actual loss of revenue would be gradual. Although two of the MMI company’s clients are

responsible for nearly 25% of the total revenue, here too these clients purchase more than

twenty and two hundred different products respectively. Changing supplier would be a lengthy

process for both these clients. The top-10 clients of the food and agri equipment companies

account for 50% of the revenue. Russia with around 20% of the revenue is the most important

sales region.

Product liability and product risks

Within the Hydratec companies many different production processes are carried out on a relatively

small scale and often involving a low level of automation. The resulting increased risk of human

error and incidental manufacturing faults can lead to a loss of product quality and the discontinuity

of the production process. In addition the Hydratec companies are developing more and more

products, which increases the risk of design faults. This can lead to relatively high costs for clients,

who will endeavour to be recompensed by their supplier. All the companies implement strict

quality standards and carry out Risk Inventories and Evaluations (RIE). All the companies are

ISO certifi cated or comply with an ISO-based quality system. All the companies are insured.

At all the companies product manufacture involves many different machines, which reduces the

risk of the breakdown of one machine constituting a major production risk.

Suppliers

The Plastics companies purchase raw materials that are used on a global scale by all plastics

companies. Although only a relatively few extremely large global suppliers operate in these raw

materials production markets, the (lack of) availability of these raw materials does not constitute

a real risk.

Report of the Management Board27

‘Technological innovation, business process optimisation and new partner-ships have contributed towards the good results.’

The points on which Hydratec deviates from the Code and the reasons why are listed per section

of the Code on the Corporate Governance page of the Company’s website.

The reporting systems used within our companies and the regular reports to the Management

Board are of major importance. Revenue and order in-fl ow are reported weekly. Monthly reports

include the most important fi nancial and operational components, such as revenue, gross margin,

operating costs, operating profi t, orders received, working capital components, personnel

summaries, investments, delivery/supply reliability and effi ciency. These reports form the basis for

monthly meetings between the Management Board and the operating company managements

as well as for the consolidated summaries that are also sent to the Supervisory Board. The local

managements also prepare quarterly reports which include an explanation of business progress

within their companies.

At least once a year a General Meeting of Shareholders is organised during which all the

resolutions are approved on the basis of the ‘one share, one vote’ principle. Shareholders,

individually or with a joint interest of at least 1% of the issued shares, are entitled to ask the

Management Board or Supervisory Board to add particular topics to the agenda. Important

Board resolutions which could result in a change to the company’s identity or character must

be approved by the General Meeting of Shareholders. The company’s Articles of Association

are published on the company’s website as are the main tasks and authorities of the General

Meeting of Shareholders and the Supervisory Board.

In control statement

Hydratec’s Management Board is of the opinion that the risk management and control systems

provide a reasonable level of assurance that the fi nancial reporting does not contain any material

misstatements. These risk management and control systems functioned properly during the year

under review and we have no indications that they will not function properly during the current

year. The process of refi ning the management and control systems has been, and will continue

to be, evaluated on a continuous basis.

be implemented. The recognised environmental risks are, when necessary, converted into concrete

action plans. The effectiveness of the implemented measures is checked continuously in order

to limit the risks as far as possible. In addition to the preventative measures, Hydratec’s policy is

also aimed at reducing the total environmental burden. The waste streams of all the companies

have been optimised with the objective of generating less waste. Developments that can lead

to improved environmental care will continue to be closely monitored in the future.

Automation

Hydratec strives to achieve production effi ciency and logistics advantages through, for example,

far-reaching automation. Its success is increasingly dependent on the timely and correct

implementation and/or extension of automation systems. This makes the organisation more

and more dependent on the proper functioning of these systems.

Foreign currency

Hydratec, with the exception of Danielson UK, invoices all its revenue in euros. Danielson

operates in the UK and invoices a large portion of its revenue in pounds sterling. In this respect

Hydratec faces a currency risk related to the translation of the fi nancial results and balance sheet

position into the company annual accounts and any dividend distribution. This risk is partially

hedged via local fi nancing of the working capital. Danielson Europe purchases components and

products from suppliers that invoice in US dollars. This accounts for around 20% of purchases.

In principle these euro/dollar positions are hedged by forward currency contracts. This guarantees

a constant purchase price over a longer period (three to six months).

Corporate Governance statement

The Supervisory Board and Management Board endorse the principles of Corporate Governance

and Hydratec Industries NV complies with the main provisions laid down in the Dutch Corporate

Governance Code. Key concepts such as transparency and accountability to and the participation

of the shareholders form the basis for our policy. We do, however, deem some of the guidelines

to be irrelevant for a small cap company. For example, in view of the company’s size and the fact

that its Supervisory Board has less than four members, no committees have been appointed.

28Report of the Management Board

29

A word of thanks

During 2011 all our companies were confronted with highly fl uctuating demands from their

clients. The considerable uncertainty regarding the general economic conditions in Western

Europe meant many of our clients wanted to keep their stock levels as low as possible.

This in turn generated more demand for short delivery times and we often had to call upon the

creativity of our employees in the form of extra effort or amended working hours. It is in times

such as these that a company’s strength is determined by the loyalty, practical know-how and

spontaneous efforts of its employees. We thank our employees for their considerable efforts.

Companies become increasingly dependent on their suppliers’ reliability of deliveries and

constructive co-operation, which form the basis for optimum and effective logistics. Which is

why we would like to thank our suppliers for their trust in us. Above all we thank our clients

who have put their trust in our companies’ products and services.

Amersfoort, 12 April 2012

Management Board

Roland Zoomers CEO

Bart Aangenendt Director

The Hydratec Management Board declares that, to the best of its knowledge, the annual accounts

provide a fair and accurate picture of the assets, liabilities, fi nancial position and profi ts of the

company and the companies jointly included in the consolidated annual accounts. The annual

report provides a fair and accurate picture of the situation as at the balance sheet date and the

business progress during the fi nancial year of the company and the affi liated companies for

which the data is included in the annual accounts. The annual report describes the actual risks

with which the company is confronted.

Outlook and expectations for 2012

In 2011 all the companies succeeded in achieving positive results despite the rapidly worsening

economic conditions and, therefore, contributed towards Hydratec’s positive results. The activities

of Lias will be consolidated for the whole of 2012. For this reason alone a higher revenue will be

achieved.

We are taking into account the fact that due to the extremely uncertain economic conditions the

revenue per company will not, or will hardly, increase. For this reason additional attention will be

paid to issues that could increase the margins and control the costs, on the one hand to offset

the increased personnel costs and, on the other hand, to at least maintain the operating profi ts

of all the companies at the current levels.

We do, however, believe that it is still too early to make more defi nite statements regarding the

results for 2012. Neither the level of investment nor the workforce are expected to undergo any

major changes in 2012 compared with 2011.


30

31 Consolidated profi t and loss account

32 Consolidated statement of comprehensive income

33 Consolidated statement of changes in shareholders’ equity

34 Consolidated balance sheet

35 Consolidated cash fl ow statement

SUMMARISED ANNUAL ACCOUNTS 2011 Amounts in thousands of euros unless stated otherwise

31

€ x 1,000 2011 2010

Net revenue 84,190 55,137

Material usage 47,080 27,647


Wages and salaries 14,878 12,069

Social security premiums and pensions 3,285 2,305

Depreciation and amortisation of non-current assets 2,177 1,928

Other operating costs 11,247 8,115

31,587 24,417


Interest income 154 120

Interest expenses 262 276

Financial income and expenses – 108 – 156

Profi t from normal business operations before taxes 5,415 2,917

Taxes 1,256 773

Net profi t 4,159 2,144

Net profi t attributable to:

Shareholders 3,631 1,765

Minority interest 528 379

4,159 2,144

Profi t per ordinary share (in euros) 3.07 1.49

Diluted profi t per ordinary share (in euros) 2.97 –

CONSOLIDATED PROFIT AND LOSS ACCOUNT

32

€ x 1,000Existing

activitiesNew

activities Other* 2011 2010

Net profi t 2,479 2,072 – 392 4,159 2,144

Currency translation differences 63 0 0 63 43

Result of hedge on fi nancial derivatives – 11 0 0 – 11 0

Total profi t after taxes 2,531 2,072 – 392 4,211 2,187

Total profi t attributable to:

Shareholders 2,141 1,834 – 352 3,623 1,808

Minority interest 390 238 – 40 588 379

2,531 2,072 – 392 4,211 2,187

* Amortisation of the fair value of Plastics and Agri & Food Equipment during 2011 due to the revaluations implemented as a result of the goodwill stipulation.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

33

€ x 1,000 2011 2010

Position as at 1 January 21,165 20,540

Shareholder related changes

Dividend distribution fi nancial year – 1,183 – 1,183

Share issue 722 0

Other changes

Result fi nancial year 3,631 1,765

Currency translation differences 63 43

Changes in hedge reserve – 11 0

Position as at 31 December 24,387 21,165

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

34

€ x 1,000 2011 2010

ASSETS

Intangible fi xed assets 16,768 2,950

Tangible fi xed assets 20,293 12,289

Financial fi xed assets 587 403

Total fi xed assets 37,648 15,642

Stocks 17,136 8,291

Trade debtors 14,091 6,011

Taxes and social security premiums 1,708 434

Other receivables 1,947 349

Accrued assets 281 378

Cash and cash equivalents 1,575 5,887

Total current assets 36,738 21,350

Total assets 74,386 36,992

€ x 1,000 2011 2010

LIABILITIES

Shareholders’ equity 24,387 21,165

Minority interests 3,033 1,710

Group equity 27,420 22,875

Personnel related provisions 487 425

Deferred tax liabilities 2,544 991

Other provisions 1,035 432

Non-current debts 7,479 1,241

Interest rate derivatives 182 163

Total provisions and non-current debts 11,727 3,252

Trade creditors 7,712 4,162

Taxes and social security premiums 1,483 940

Owed to banks 5,610 3,200

Other debts and accrued liabilities 20,434 2,563

Total current debts 35,239 10,865

Total liabilities 74,386 36,992

before profi t appropriationCONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER

35

€ x 1,000 2011 2010

Profi t before taxation + 5,415 + 2,917

Adjustment for:

– Depreciation and amortisation + 2,177 + 1,928

– Book profi t/loss on sale of fi xed assets + 13 0

Financial income and expenses + 108 + 156

Changes in provisions + 350 – 25

Changes in working capital:

– Stocks + 2,871 – 1,529

– Current receivables + 496 – 733

– Current liabilities + 277 – 311

+ 3,644 – 2,573

Financial income and expenses received/paid – 164 – 175

Profi t tax paid – 655 – 567

Cash fl ow from operating activities + 10,888 + 1,661

Investments in intangible assets – 116 – 47

Disposal of intangible assets 0 + 7

Investments in tangible non-current assets – 2,259 – 2,016

Disposal of tangible assets + 166 + 142

Investments in fi nancial assets – 185 0

Disposal of fi nancial assets 0 + 24

Acquisition Agri & Food Equipment* – 15,910 0

Acquisition Plastics* 0 – 8,405

Cash fl ow from investing activities – 18,304 – 10,295

* After deduction of acquired cash and cash equivalents.

€ x 1,000 2011 2010

Dividend paid to shareholders – 1,183 – 1,183

Dividend paid to old shareholders Agri & Food

Equipment – 1,930 0

Payment of third party share capital (Naamplaat

Holding) 0 – 39

Third party dividends (Plastics / Naamplaat Holding) – 159 – 234

Repayment of non-current liabilities – 352 – 413

Non-current borrowings + 4,357 0

Cash fl ow from fi nancing activities + 733 – 1,869

Net cash fl ow – 6,683 – 10,503

Currency translation differences + 21 – 27

Change in cash and cash equivalents – 6,662 – 10,530

Cash and cash equivalents as at 1 January + 3,020 + 13,550

Cash and cash equivalents as at 31 December – 3,642 + 3,020

CONSOLIDATED CASH FLOW STATEMENT

36

2011 2010 2009 2008 2007

Profi t and loss account

Net revenue 84,190 55,137 17,322 20,398 35,836

Operating profi t 5,523 3,073 – 1,223 2,201 4,364

Operating profi t excluding one-time income 5,523 3,073 – 1,223 1,705 3,173

Net profi t to be allocated to shareholders 3,631 1,765 – 255 9,708 3,334

Net profi t excluding one-time income 3,631 1,765 – 590 1,550 2,350

Cash fl ow / 2

Cash fl ow from operating activities 10,888 1,661 653 4,324 4,278

Cash fl ow from investing activities – 18,304 – 10,295 – 1,277 10,654 – 2,218

Cash fl ow from fi nancing activities 733 – 1,869 – 1,222 – 1,183 – 2,110

Net cash fl ow – 6,683 – 10,503 – 1,846 13,795 – 50

Balance sheet

Shareholders’ equity 24,387 21,165 20,540 21,876 13,818

Group equity 27,420 22,875 20,861 22,190 14,123

Balance sheet total 74,386 36,992 24,079 25,408 19,459

/ 1

Amounts in thousands of euros unless stated otherwise

1 / Based on continued business activities.

2 / 2010 cash fl ow adjusted on basis of movement in cash and cash equivalents and bank current account.

FIVE YEAR SUMMARY

37

2011 2010 2009 2008 2007

Key ratios

Operating profi t as % of revenue 6.6% 5.6% – 7.1% 8.4% 8.9%

Return on invested capital 8.7% 8.2% – 7.6% 16.2% 18.2%

Return on shareholders’ equity 15.9% 8.5% – 1.5% 8.7% 17.8%

Solvency 36.9% 61.8% 86.6% 87.3% 72.6%

Data per ordinary share (in euros)

Operating profi t / 3 4.52 2.60 – 1.03 1.44 2.68

Shareholders’ equity 19.95 17.89 17.36 18.49 11.68

Profi t per share 3.07 1.49 – 0.22 8.21 2.82

Profi t per share excluding one-time income 3.07 1.49 – 0.50 1.31 1.99

Diluted profi t per share 2.97

Dividend / 4 1.20 1.00 1.00 1.00 1.70

Price at year end 18.05 15.00 14.30 15.86 24.75

Lowest price 14.70 12.40 13.50 15.86 19.51

Highest price 19.98 16.25 19.44 24.87 27.48

Other information

Average number of employees 381 330 158 167 273

Net revenue per employee 221.0 167.1 109.6 122.1 131.4

Salary costs per employee 47.7 43.6 39.1 37.2 38.33 / Excluding one-time income.4 / 2007 including extra dividend

of € 0.70 .

Amounts in thousands of euros unless stated otherwise Five year summary

38 CONTACT DETAILS


CEO Roland Zoomers

Director Bart Aangenendt

Address Nijverheidsweg Noord 40

Postbus 328

3800 AH Amersfoort

The Netherlands

Telephone Int. + 31 (0)33 469 73 25

Telefax Int. + 31 (0)33 469 73 14

E-mail [email protected]

Website www.hydratec.nl

Agri & Food Equipment

Pas Reform BV

Managing Director Bart Aangenendt

Address Bovendorpsstraat 11

Postbus 2

7038 ZG Zeddam

The Netherlands

Telephone Int. + 31 (0)314 65 91 11


Website www.pasreform.com

LAN Handling Systems BV

Managing Director Harm Langen

Address Jules Verneweg 123

5015 BK Tilburg

The Netherlands

Telephone Int. + 31 (0)13 532 25 25


Website www.lan-hs.com

Man Machine Interfaces

Danielson Europe BV

Managing Director Peter Boerdijk

Address De Nieuwe Haven 12

7772 BC Hardenberg

The Netherlands

Telephone Int. + 31 (0)523 28 12 00


Website www.danielsoneurope.com

Danielson UK Ltd.

Managing Director Peter Boerdijk

Address 29 Pembroke Road

Stocklake

Aylesbury

Bucks

HP20 1DB

England

Telephone Int. + 44 (0)12 96 31 90 00


Website www.danielson.co.uk

Plastics

Euro Mouldings BV

Managing Director Martin Essink

Address Ambachtsweg 3

7442 CS Nijverdal

The Netherlands

Telephone Int. + 31 (0)548 61 10 07


Website www.euromouldings.com

Timmerije BV

Managing Director Wim Simons

Address Schoolweg 29

Postbus 3

7160 AA Neede

The Netherlands

Telephone Int. + 31 (0)545 28 38 00


Website www.timmerije.nl


Nijverheidsweg Noord 40

Postbus 328

3800 AH Amersfoort

The Netherlands

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