Annual Report • Apr 7, 2023
Annual Report
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shaping together a bright energy future
Integrated Annual Report 2022 Fluxys Belgium
The sustainability reporting in this report was validated by an external auditor. Validation was carried out according to the 'International Standard on Assurance Engagements (ISAE) 3000 (Revised)', a model developed for the certification of non-financial data. The certified indicators are indicated throughout the report with a .
provide capacity for annual transport: 30 TWh of hydrogen and 30 million tonnes of CO2
By 2035 fully climate-neutral
Sustainable economic activities
| Looking to the future 4 |
|---|
| Our profile: a purpose-driven company 11 |
| Our purpose and strategy 12 |
| Value creation: a continuous process 14 |
| Our context 16 |
| Our services for speeding up 18 the energy transition |
| How we are developing our infrastructure into 21 a multi-molecule hub |
| Our structure and governance 22 |
| Our reporting 28 |
| Materiality analysis 32 |
| Our risk management 34 |
| Legal and regulatory framework 38 |
| Our performance in terms of financial 44 resilience and digitalisation |
| Financial resilience 48 |
| Digitalisation 56 |
| Our ESG performance 60 |
| Environment 62 |
| Climate change – Transporting molecules 64 for a carbon-neutral future |
| Climate change – Systematically reducing 74 our own climate impact |
| Climate change – Management of natural capital 82 |
| Climate change – EU taxonomy for 86 sustainable economic activities |
| Social 94 |
|---|
| Safe and reliable infrastructure 96 |
| Good neighbourly relations 104 |
| Management of human capital 106 |
| Employee safety, health and well-being 112 |
| Social dialogue 117 |
| Diversity 118 |
| Customer care 120 |
| Human rights 122 |
| Governance 124 |
| Ethics and integrity – efforts 126 to combat corruption |
| Data security and privacy 128 |
| Corporate Governance Declaration 130 |
| Annex 150 |
| Methodology for calculating greenhouse 151 gas emissions |
| Health, Safety and Environment Policy 152 |
| GRI index 153 |
| Independent auditor's assurance report 155 |
| Financial situation 158 |
| Statutory auditor's report and 271 declaration by responsible persons |
| Glossary 281 |
| Shareholder's guide 287 |
future # OneteamOnetarget
Fluxys Belgium | Regulated information | Integrated Annual Report 2022 | Looking to the future
5
Acceleration is key and we're fully into our double mission. Creating solutions for large-scale decarbonisation through hydrogen and CO2 infrastructure. As well as ensuring security of energy supply. That's how we provide continuity while speeding up towards a sustainable future, both for society and for our company.
Pascal De Buck Managing Director and CEO
Pascal De Buck It was a terrible year for the Ukrainian population, and in terms of the violence and suffering that people are enduring. We can only very much hope that this suffering will come to an end as soon as possible. The geopolitical situation has also turned the energy market upside down. The challenge is twofold: both to provide solutions for the security of supply of natural gas for Europe and to resolutely move towards large-scale decarbonisation.
Daniël Termont The message is to speed things up. We have honed our strategy accordingly. As a company, we have both the strength and the mission to be the essential infrastructure partner for speeding up the energy transition. We are developing infrastructure for hydrogen and CO2 to ensure a rapid scale-up of decarbonisation solutions. At the same time, we will continue to help society with its natural gas supply for as long as that is necessary.
Pascal De Buck Together with industry and our partners, we have put our foot on the accelerator. The preparation of the hydrogen and CO2 infrastructure in the industrial clusters has moved forward in double quick time. Cross-border connections with France, the Netherlands and Germany for hydrogen are already being worked on. We are all set to develop the hydrogen and CO2 infrastructure for the Belgian and North-West European economy.
Pascal De Buck The robustness of a market stands or falls with its diversification. We can see that in the current geopolitical context, as we did during the pandemic. Our strength today lies in the fact that our infrastructure opens up a wide range of natural gas resources. That is something we will maintain into the future. We will do this by using hydrogen infrastructure that gives consumers access to all the options available: production locally, from our neighbouring countries, or from overseas imports. The same applies to the CO2 infrastructure: we are focusing on various strategies that industry needs, with transmission for reuse and various export possibilities.
The geopolitical situation has profoundly changed the dynamics of gas markets and the direction of flows in Europe. Throughout the year, our teams across the country left no stone unturned to ensure security of supply in North-West Europe – with impressive results. As well as supplying Belgium via the Belgian network, suppliers managed to get unprecedented quantities of natural gas to the Netherlands and Germany. Flows to Germany soared to 256 TWh (from 20 TWh in 2021) and those to the Netherlands increased to 145 TWh (from 68 TWh in 2021). At the same time, the Loenhout storage
facility was filled to record levels before the winter period started. The Belgian network has thus once again confirmed its role as an energy hub for Europe, with the Zeebrugge area as an important gateway for both natural gas via pipelines and LNG via ship.
Achieving climate neutrality will require flows of hydrogen and CO2. Together with industry, our partners and neighbouring operators, we have accelerated our pursuit of this objective. Intensive preparations are under way on hydrogen and CO2 pipeline and terminalling projects across Belgium's wide range of industrial clusters.
Together with industry and our partners, we have put our foot on the accelerator. We are all set to develop the hydrogen and CO2 infrastructure for the Belgian and North-West European economy.
Pascal De Buck Managing Director and CEO Daniël Termont Optimal diversification also means looking ahead by adopting a future-oriented and integrated approach to the energy system. Electricity from renewable sources, carbon-neutral molecules such as hydrogen, and carbon capture and CO2 reuse or export must dovetail seamlessly together. If we make our gas and electricity systems work together holistically, we will be in a strong position to efficiently and sustainably meet the huge diversity of demand for energy and raw materials.
Pascal De Buck The climate challenge is enormous and the industry needs solutions to continue to keep its activities and employment geographically where they are. That is why we have to be ambitious. This ambition is also based on the pillars we use to create sustainable value for society and for the company.
Daniël Termont Sustainable value creation is a continuous process of gaining a growing understanding in a changing environment. In the years ahead, we plan to further develop that process by involving our stake- holders in an ESG approach. That is the perspective we are starting out from.
Daniël Termont I have had the privilege of chairing our Board meetings for the last 14 years. It has been an honour to take part in developing and implementing our strategy throughout that period. I have seen Fluxys Belgium develop into the core of our parent group Fluxys, which, through its expansion, has given additional impetus to Fluxys Belgium's business. This is the kind of development we can rightly be proud of. Although I am stepping down as chairman, I will remain a member of our governing bodies for a while. With my experience I hope to be able to continue contributing to the exciting period in which our company finds itself. I would like to extend my heartfelt thanks to all those with whom I have worked over the past years, especially CEOs Walter Peeraer and Pascal De Buck for their pleasant and fruitful collaboration. And I would like to take this opportunity to wish my successor every success.
In the years ahead, we plan to further develop our process of value creation by involving our stakeholders in an ESG approach. That is the perspective we are starting out from.
Daniël Termont Chairman of the Board of Directors
Given the new supply situation in Europe, speed and adaptability are the watchwords for new infrastructure as well. We prepared thoroughly for the first phase in the construction of the Zeebrugge-Opwijk pipeline, comprising the section between Desteldonk and Opwijk. This will boost our capacity to carry natural gas inland from Zeebrugge. At the same time, the pipeline is an initial step towards speeding up the energy transition as it will be immediately available
for hydrogen transport as soon as the market is ready. We will commission the Desteldonk-Opwijk section in late 2023.
Taking part in sporting activities with colleagues at lunchtime or after work is not only a pleasant
thing to do – it also fosters team spirit and boosts motivation levels. That is why we set up Connect & Move, encouraging colleagues to exercise together, put together teams and throw themselves into sporting events. As a result, 120 colleagues went for it at 16 events across Belgium! !
Keeping up the good work and tapping into our innovative side to help build a climate-neutral society. That is the message of our multimedia campaign in which we enthusiastically pursued our search for talent. The results of this speak
for themselves, with no fewer than 81 new colleagues joining our team. Settling in quickly makes all the difference. That's why we provide a warm welcome as part of an innovative induction programme.
Our commitment: to be a climate-neutral company by 2035. The first milestone is to halve our greenhouse-gas emissions by 2025, compared with 2017. In 2022, we reached that milestone for methane emissions in our transmission and storage businesses. In our LNG business, three additional open-rack vaporisers currently under construction will reduce the Zeebrugge terminal's emissions.
At the Belgian-German energy summit in Zeebrugge in early 2023, the two countries agreed to further increase energy cooperation. Key element in that cooperation is to ensure a pipeline corridor to facilitate hydrogen transport between Belgium and Germany.
Everyone and everything needs energy to grow and flourish. People can rely on us to make that energy flow. Day and night, we're there to ensure security of energy supply. And in the meantime, we're getting our infrastructure ready for the years to come. Today, we transport natural gas, tomorrow we'll also be transporting hydrogen and CO2. That's how we keep people, society and the planet moving.
We are committed to continuing to build a greener energy future for the generations to come. People, industry and societies all need energy to thrive and progress. Fluxys Belgium accommodates this need: we put energy in motion through our infrastructure. We move natural gas while paving the way for the transmission of hydrogen, biomethane or any other carbon-neutral energy carrier as well as CO2, supporting carbon capture, reuse and storage.
The energy ecosystem is complex and the demand for energy as a driver of human progress combined with a global need to make energy more sustainable is a challenge that requires everyone to get involved. Redesigning the energy system will not be easy, yet it can be done if we work together. Together refers to all our stakeholders: our employees, shareholders, industrial partners, customers, the general public and all actors in the energy system. At Fluxys, we truly believe that cooperation is the key to our success.
Bright: With optimism we dare to say that our infrastructure, with its capacity for CO2 and for green gases such as hydrogen and biomethane, will play a substantial role in the transition to a carbon-neutral energy future for everyone.
The word future encapsulates a responsibility. With our unique assets as an infrastructure company, we owe it to ourselves to contribute to a greener energy future for the generations to come.
Our purpose Shaping together a bright energy future reflects our ambition to be an all-encompassing value creator. What this means in practice is becoming clearer year by year. Whereas in previous years Fluxys Belgium created value based on the 3Ps, People, Planet and Prosperity, since 2022 it has resolutely adopted an Environment Social Governance approach.
Moreover, Fluxys Belgium's value creation as an essential infrastructure company in the energy transition was the subject of even greater focus in 2022.
Thus, the strategic ambition to speed up the energy transition was anchored more firmly in the business model. During a transitional phase, our multi-faceted ambition is to support society with its energy needs, develop a multi-molecule infrastructure with cross-border connections, and explore new green energy chains. To meet this ambition, Fluxys Belgium deploys a wide range of resources to create value that goes beyond the financial.
The company is taking additional steps based on this integrated, purpose-driven vision of being the essential infrastructure company. For example, a Transformation and Sustainability Director was appointed in 2022 to support the ESG process, among other things. Moreover, this integrated annual report represents the start of a transition to ESG reporting.
Fluxys Belgium wants to further develop this continuous process of value creation in the years ahead by involving its stakeholders.
Together with our stakeholders, we are taking the opportunity to look holistically at our value creation. That is the perspective we are starting out from.
In 2022, the European natural gas market was hit by the effects of the gradual reduction in pipeline supplies of Russian gas. During the year, a new balance emerged between supply and demand: on the one hand, liquefied natural gas (LNG) imports increased considerably; on the other hand, demand fell significantly, mainly due to a substantial rise in prices.
The Belgian network is a major crossroads for the European gas market. The decline of Russian pipeline gas mainly affected Germany, leading to the need for new transit configurations. As a result, we have seen in the Belgian network very substantial flows from the west, including imports from Norway, France and the UK, for transit to Germany and the Netherlands.
In 2022, in response to the natural gas supply issues, Europe took measures to boost short-term security of supply, for example by requiring that a given level of gas was in storage before the winter, and also to speed up the energy transition. Various legislative initiatives arising from the European Green Deal have now been approved, but the hydrogen and decarbonised gas market package has not yet been finalised.
This package is expected to propose a European legal and regulatory framework for carbon-neutral molecules, such as hydrogen, biomethane and synthetic methane, alongside renewable electricity, in the energy system of tomorrow. Carbon capture, reuse or storage is also set to be recognised as one of the many solutions that can be brought together to achieve the objective of climate neutrality.
A number of European countries, including Belgium, France, Germany and the Netherlands, have adopted ambitious hydrogen strategies or updated such a strategy, sometimes incorporating specific targets for the production of hydrogen and/or developing support mechanisms to encourage this production. In early 2023, Belgium's federal government proposed a regulatory framework for hydrogen which is under discussion in the Federal Parliament (see the "Legal and regulatory framework" section, page 38).
To shape the energy transition, innovative technologies will have to be deployed on a large scale as quickly as possible, in a number of areas spanning both the production of renewable and low-carbon energy sources and the methods of transport and storage.
For example, the industry is fully committed to the expansion and development of innovative hydrogen-production technologies. This hydrogen can then be used directly or serve as a basic component for other by-products such as synthetic methane and synthetic methanol. These synthetic energy carriers can also be produced using CO2 captured from industry, introducing innovative and circular production processes with a carbon-neutral or even carbon-negative footprint.
Molecules for a carbon-neutral future will need to be transported and stored. Fluxys Belgium is therefore doing everything it can to make this possible, drawing on a plan for the reuse of existing infrastructure and for new infrastructure as tools of the energy transition.
| Natural gas & bio methane services |
Hydrogen services |
CO services 2 |
|---|---|---|
| We will transport natural gas for as long as necessary. We provide open-access infrastructure connected to as many sources as possible to support security of supply. In this way we help society make the transition to carbon-neutral energy and raw materials. We are already able to transport large volumes of carbon-neutral biomethane. |
We get low-carbon hydrogen to customers in the form of energy and raw material. We provide open-access infrastructure connected to as many sources as possible to support security of supply. In this way we help decarbonise industry, power generation and the transport sector. |
We transport CO2 to sites where it can be reused or exported to permanent storage. We provide open-access infra structure that offers as many takeaway options as possible. In this way we help decarbonise industry that engages in carbon capture. |
| Transmission | Transmission | Transmission |
| Storage | Terminalling | Terminalling |
| Terminalling | ||
| The connection to various sources and neighbouring markets, the flexibility of the service offering and the availability of the sales team all make the difference in these turbulent times and this difficult market |
With low-carbon hydrogen we can get our company's emissions to net zero. |
We're pleased to be working with Fluxys on CO2 transmission. It means we can now speed up deployment of our carbon capture technology and move towards net-zero emissions. |
| situation. | Our ambition: By 2030, offer the capacity to transport 30 TWh of hydrogen and 30 million tonnes of CO 2 |
The Fluxys Belgium network is excellently connected to all natural gas sources available to the European market. The gas enters via pipelines or by ship (in liquid form, LNG) and flows via our network to consumers in Belgium and to all neighbouring countries. In the service of a carbon-neutral economy, we want to develop our grid into a hydrogen and CO2 hub in the same way.
For commercial reasons, the customers quoted here preferred to remain anonymous.
For more details about our approach to transporting molecules for a carbon-neutral future, see page 64
| Ghent Carbon Hub | |
|---|---|
• Multimodal terminal for receiving, liquefying and temporarily storing CO2 and loading it onto ships to be taken to permanent offshore storage sites • Status: feasibility study
• Terminal for receiving, liquefying and temporarily storing CO2 and loading it onto ships to be taken to permanent offshore storage sites • Status: engineering & design
Fluxys Belgium is a public limited company and is part of the Fluxys group. Fluxys Belgium's capital is held by the following entities:
The total number of shares is 70,263,501. All shares are entitled to dividends.
The shares are issued in the following classes: B, D and the "golden share".
The Belgian State is represented by the federal Minister of Energy. For more details about the rights attached to the Belgian State's "golden share", please refer to the Corporate Governance Declaration, "Voting rights and special powers".
On 21 February 2023, CDPQ relinquished its entire stake in the parent company Fluxys, meaning that its shareholder structure at the time of writing is as follows:
Fluxys LNG (consolidated subsidiary – Fluxys Belgium holds a 99.99% stake and Flux Re a 0.01% stake). Fluxys LNG is the owner and operator of the Zeebrugge LNG terminal and sells terminalling capacity and associated services.
Flux Re (consolidated subsidiary – wholly owned by Fluxys Belgium). Flux Re is a reinsurance company under Luxembourg law.
Balansys (stake consolidated using the equity method – Fluxys Belgium holds a 50% stake). As part of the 2015 integration of the Belgian and Luxembourg gas market, Fluxys Belgium and Creos Luxembourg (the Luxembourg transmission system operator) set up the company Balansys, a joint venture in which Fluxys Belgium and Creos Luxembourg each have a 50% stake. Balansys has been the operator responsible for balancing activities for the integrated Belgian-Luxembourg gas market since 2020.
Integral part of the business strategy. Fluxys Belgium's commitment to sustainability is an integral part of its business strategy. The company's purpose and business strategy guide the way in which we create sustainable value for society, within the ESG framework. The Board of Directors, as the company's most senior management body, is responsible for the strategy and its review.
Fleshed out in corporate objectives. Fluxys Belgium fleshes out its strategy and commitment to sustainability through corporate objectives in the ESG domains, which are translated every year into personal objectives in the performance management cycle.
The performance-related remuneration of the Managing Director and CEO and of the Management Team BE is based on the extent to which these objectives are achieved. This is evaluated by the Board of Directors based on advice from the Appointment and Remuneration Committee. The achievement of objectives also determines the performance-related remuneration paid to Fluxys Belgium employees. Collective bargaining agreement CAO/CCT 90, which applies to employees, also includes incentives aimed at reducing Fluxys Belgium's greenhouse gas emissions, for instance.
A number of advisory bodies have been established within the Board of Directors to assist the Board in its tasks: the Audit and Risk Committee, the Corporate Governance Committee, and the Appointment and Remuneration Committee.
The Board of Directors has delegated the daily management of Fluxys Belgium and has granted special powers to one of its members, who is named the Managing Director and is also the company's Chief Executive Officer (CEO). The Managing Director is authorised to entrust certain aspects of the daily management or their specific powers to a Management Team BE.
More information about corporate governance at Fluxys Belgium can be found in the Corporate Governance Declaration (see page. 131).
Jan Van de Vyver, Christian Leclercq, Peter Verhaeghe, Damien Adriaens, Leen Vanhamme, Nicolas Daubies, Pascal De Buck, Erik Vennekens, Rafaël Van Elst, Anne Vander Schueren, Arno Büx, Raphaël De Winter
Nicolas Daubies, Dpt. Director Group General Counsel & Company Secretary, acts as secretary to the Audit and Risk Committee.
Nicolas Daubies, Dpt. Director Group General Counsel & Company Secretary, acts as secretary to the Corporate Governance Committee.
Anne Vander Schueren, HR Director, acts as secretary to the Appointment and Remuneration Committee.
Managing Director and CEO
Nicolas Daubies, Dpt. Director Group General Counsel & Company Secretary, acts as secretary to the Management Team BE.
The Management Team BE is assisted by an Executive Committee composed as follows:
The reporting in this sustainability report integrates non-financial information in line with Global Reporting Initiative (GRI) Standards – Core1 and thus provides an explanation of the topics that are material to Fluxys Belgium's activities, taking into account the context and value chain within which the company operates and the interests of the company's stakeholders.
The guiding principle in mapping our stakeholders is the extent to which there is a mutual interaction between Fluxys Belgium's activities and those of potential in-scope stakeholders.
Given Fluxys Belgium's role in the energy transition, non-governmental organisations were included as stakeholders in the most recent stakeholder analysis (in 2020). Some stakeholders have also seen their role change. For example, a number of stakeholders with whom Fluxys Belgium has had long-standing commercial relations in the context of the supply of natural gas are now partners in projects to transport carbon-neutral energy carriers and CO2 in Belgium.
• In terms of sustainability, the suppliers' objectives and the approach adopted by Fluxys must align with each other
• Effectively functioning energy market • Safe and reliable transmission
• Transparent information about Fluxys Belgium's financial situation
| Stakeholder | Interaction | Expectations | Stakeholder | Interaction | Expectations | |
|---|---|---|---|---|---|---|
| Employees | Suppliers | |||||
| • Constant provision of information via the intranet and a wide range of training courses and opportunities for development • Continuous contact through daily management • Regular consultation within platforms such as the works council or Committee for Prevention and Protection at Work • (In)formal chats about psychosocial risks |
• Good employer • Safe, healthy working environment • Fluxys Belgium's active role in the energy transition |
• Regular contact with the business units and the central procurement office with regard to the execution of contracts • A number of suppliers are initially in close contact with Fluxys Belgium with regard to the qualification procedure to be completed by suppliers in order to be able to supply products and services • Some suppliers receive a questionnaire about their environmental, health and safety practices |
||||
| Local residents • Owners and operators of land |
• Contact in connection with | • Information | Authorities and regulators | |||
| on which, or near to which, our facilities are located or will be built • Agricultural, forestry and hunting organisations • Permit authorities, local authorities and emergency services of the towns, cities and municipalities where our infrastructure is located or where we carry out work |
daily operations and the construction of infrastructure • Information campaigns • Awareness-raising campaigns • Drills with emergency services |
• Safety • Limitation of disruption |
• The Belgian and European authorities and energy regulators • Financial regulators such as the Financial Services and Markets Authority (FSMA) |
• Consultation and information exchange with Belgium's federal energy regulator, the Federal Public Service (FPS) Economy, regional authorities and the European energy regulator • Periodic regulated information for the FSMA via publications, reports and notifications |
• Safe and reliable transmission infrastructure • Initiatives regarding the energy transition |
|
| Shareholders | Financial institutions | |||||
| • Regular consultation in the company's various bodies with shareholders' representatives on matters including strategy, financial performance, risk management, and the safety and reliability of natural gas transmission |
• Fluxys Belgium plays an active, positive role in the energy transition thanks to its sound financial situation and reliable infrastructure |
Non-governmental organisations | • Periodic regulated information via publications, reports and notifications |
• Transparent information about Fluxys Belgium's financial situation and sustainability policy |
||
| Customers | • Non-governmental organisations | • Consultation and exchange of views | • Transparent information and | |||
| • The users of the transmission system, the Loenhout storage facility and the Zeebrugge LNG terminal: gas producers, wholesalers, traders and suppliers who buy capacity in the company's infrastructure to get their gas to its intended destination • Distribution system operators connected to Fluxys Belgium's network to supply gas to homes and SMEs • Consumers directly connected to the transmission system, such as industrial companies and natural gas-fired power plants; they mostly do not purchase capacity from Fluxys Belgium but there is an operational link due to their physical connection to the transmission system |
• Permanent contact through our commercial team • Annual events enabling to address towards each customer group the topics that regularly come up in day-to-day contact with the commercial team • When changing existing services, developing new services, proposing new tariffs or suggesting amendments to contractual documents, Fluxys Belgium conducts a market consultation in accordance with the regulatory framework |
• Optimum availability of infrastructure capacity • Competitive tariffs • Innovative services • Customers, who take account of total emissions generated by their supply chain, have high expectations with regard to their suppliers' climate impact |
active specifically in the fields of the energy transition, climate change and environmental issues such as biodiversity and water and waste management |
clear commitments |
In 2020, Fluxys Belgium consulted its stakeholders to gather their views on the significance of Fluxys Belgium's role and impact in the 17 relevant sustainability areas.
The company's Management Team was also consulted. The materiality matrix shows the consolidated result of both consultations.
The material domains that emerged from the stakeholder consultation in 2020 were brought together in a Planet/Prosperity/People framework. In 2022, Fluxys Belgium decided to switch to an Environmental/Social/
Governance approach. Therefore, in this report, the materiality domains are presented from that perspective.
| Performance in terms | ESG performance | |||
|---|---|---|---|---|
| of financial resilience and digitalisation page 44. |
Environment page 62. |
Social page 94. |
Governance page 124. |
|
| • Financial resilience • Go Digital |
• Climate change – Transporting molecules for |
• Safe and reliable infrastructure |
• Ethics and integrity – efforts to combat corruption |
|
| a carbon-neutral future | • Good neighbourly relations | • Data protection and privacy | ||
| • Climate change – Systematically reducing |
• Management of human capital |
|||
| our own climate impact • Climate change |
• Employee safety, health and well-being |
|||
| – Management of natural capital |
• Social dialogue | |||
| • Climate change – EU | • Diversity and inclusion | |||
| taxonomy for sustainable | • Customer care | |||
| economic activities | • Human rights |
Fluxys Belgium's Enterprise Risk Management (ERM) system identifies the risks that could have a short-, medium- and long-term impact on the company, people and the environment.
The risk management system is based on ISO 31000. Risk management is integrated into the company's strategy, business decisions and activities. The risk management system looks at the impact that risks can have from various angles: we not only assess the impact of risks on Fluxys' value creation, operational performance and reputation – we also consider the impact on people and the environment. Risk assessments are done in the short, medium and long term, which also makes it possible to carefully manage the risks associated with climate change. The risks and associated measures are explained in this integrated annual report for each domain in the materiality analysis (see the "Our reporting" section, page 28)
Risk Management organises the risk management system and reports annually to the Audit and Risk Committee. All our departments identify, analyse and evaluate their risks and report on how risks are managed. They work with management to map out the main risks, the controls and the mitigating measures. The Audit and Risk Committee examines the risk management system and all the main risks, controls and mitigating measures each year.
The three lines of defence model is the internal control model used to manage our risks and carry out controls.
| First line | Second line | Third line |
|---|---|---|
| • The first line of defence: the departments themselves, • which are responsible for their risks and ensure effective controls and measures. |
• The second line of defence: the Risk and Compliance teams as well as, in certain cases, the Finance, Health, Safety and Environment, and ICT Security departments. • They guide those in the first line in risk management, compliance with regulations, guidelines and internal rules, budget monitoring and the security of staff, facilities, ICT systems and information. |
• The independent third line of defence: Internal Audit, which is responsible for monitoring business processes. • Internal Audit performs risk-based audits to monitor the effectiveness and efficiency of the internal control system and processes. The department also performs compliance audits to ensure that guidelines and processes are consistently applied. |
Fluxys Belgium's Risk Management assesses the likelihood of the main risks connected to its activities and estimates the potential financial impact thereof.
Depending on the possibilities and the market conditions, the group mainly covers these risks via the insurance market. The comprehensive cover is in line with European best practices in the field and includes the different areas in which risks may materialise:
In some cases, risks are partially reinsured by Flux Re, a wholly-owned subsidiary of Fluxys Belgium, or are partially self-retained, for example by applying appropriate deductibles. Flux Re reinsures general and environmental liability, property risks, material damage risks and financial risks (not life or health risks).
The fact that Flux Re is fully consolidated in the group's accounts means that the cost of damages covered by the group's reinsurance policy are booked to the consolidated result. Flux Re also reinsures certain risks facing other companies in the Fluxys group. Where appropriate, compensation paid in the event of damages involving these parties will impact the Fluxys Belgium group's IFRS consolidated result.
The non-insurable risks are covered by appropriate contractual clauses, financial guarantees and regulatory mechanisms.
Since the outbreak of war in Ukraine, various sanctions have been taken against Russia and Belarus, as well as Russian and Belarusian companies. In this context, Fluxys Belgium Group is not active on the Russian market nor does it have any investments in Russian companies. Fluxys Belgium group sees no evidence of impairment.
In its activities, Fluxys Belgium group does business with Russian companies in accordance with European and national gas regulations and we operate in full compliance with the sanctions regime.
Fluxys LNG is the company with the largest exposure to Russian gas flows through long-term contracts. To date, however, there have been no changes to regular flows or payments. The possible termination of long-term contracts could lead to a temporary reduction in the company's economic contribution to the Fluxys Belgium group. However, the regulatory framework is such that it allows authorised revenue to be maintained and the cancellation of long-term contracts would also free up capacity in a market with high demand.
Based on the current situation and given the regulated nature of its activities, the Fluxys Belgium group's net result is generally very little affected by volume decreases. Depending on the evolution of the war and on the duration and extent of the sanctions, the Fluxys Belgium group could temporarily face adverse effects on cash income if customers were to default on payment for booked capacity.
Since 3 March 2011, the European natural gas market has been regulated by the EU's third energy package:
• Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (the Third Gas Directive); • Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (the Second Gas Regulation); • Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of
Energy Regulators (the ACER Regulation). In late 2021, the European Commission published its Proposal for a Directive of the European Parliament and of the Council on common rules for the internal markets in natural and renewable gases and in hydrogen, as well as its Proposal for a Regulation of the European Parliament and of the Council on the internal markets for renewable and natural gases and for hydrogen. These legislative texts are expected to be finalised and adopted by the end of 2023. It is anticipated that they will introduce a regulated framework for the European markets in renewable gas and hydrogen, along the lines of the existing framework for natural gas.
Within the current legal and regulatory framework, a regulated system is applied to transmission (both domestic and border-to-border), natural gas storage and LNG terminalling. As required by EU legislation, the Belgian market is supervised and overseen by independent regulators. The supervisory authority for the regulated activities of the Fluxys Belgium group is the federal regulator, the Commission for Electricity and Gas Regulation (CREG).
A bill concerning the transmission of hydrogen by pipeline was introduced in the Federal Parliament by the Belgian government in January 2023.
This legislation is expected to lay down the framework for:
It is anticipated that this legislation will determine the tasks of the hydrogen transmission system operator, including:
This legislation is expected to lay down the missions and powers of the regulator (CREG).
The Belgian Gas Act forms the general basis of the regulatory framework and incorporates the main principles that apply to the activities of Fluxys Belgium and Fluxys LNG as operators of the transmission system, natural gas storage facilities and LNG terminalling facilities.
The third package of legislative measures, in particular the Directive of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas, was transposed into Belgian legislation (Act of 8 January 2012 amending the Gas Act adopted as of 21 January 2012):
• The legislation provides for a procedure for certifying operators of transmission systems, natural gas storage facilities and LNG terminalling facilities. The aim of this certification is to verify compliance with the requirements that operators be unbundled from energy suppliers or producers (ownership unbundling). On 27 September 2012, CREG certified Fluxys Belgium as a transmission system operator that works entirely separately from natural gas suppliers and producers. In early 2023, CREG confirmed that Energy Infrastructure Partners becoming a shareholder in the parent company Fluxys did not give rise to a recertification procedure.
Against the backdrop of the gas market in 2022, a number of legislative texts were adopted at European Union level to ensure security of supply for the EU and its Member States:
• Regulation (EU) 2022/1032 of the European Parliament and of the Council of 29 June 2022 amending Regulations (EU) 2017/1938 and (EC) No 715/2009 with regard to gas storage; in this connection, it is worth pointing that in late 2022, Fluxys Belgium was certified as a storage facility operator in accordance with Article 2 of that Regulation; • Council Regulation (EU) 2022/2576 of 19 December 2022 enhancing solidarity through better coordination of gas purchases, reliable price benchmarks and exchanges of gas across borders; • Council Regulation (EU) 2022/2578 of
22 December 2022 establishing a market correction mechanism to protect Union citizens and the economy against excessively high prices.
One of the aims of these various EU regulations is to optimise the use of natural gas infrastructure with a view to contributing to the security of the natural gas supply. The Fluxys Belgium group supports this objective and has made the appropriate adjustments to the regulated contracts in order to transpose the various measures provided for by these regulations.
The decisions laying down the tariff methodology for the period 2020-2023 for the natural gas transmission network, the natural gas storage facility and the LNG facility were adopted by CREG on 28 June 2018. This methodology includes the rules which network operators must comply with when preparing, calculating and submitting tariffs and which the regulator itself will use for processing these tariff proposals.
The 2020-2023 tariff proposal for transmission services, submitted by Fluxys Belgium on 21 December 2018 and based on that methodology and the network code for tariffs (TAR-NC)2, was reviewed, and the reviewed version was finally approved by CREG on 7 May 2019. The approved tariffs are valid for a period of four years, subject to a revision due to the regulatory assets and liabilities not developing in the way forecast in the tariff proposal. In this connection, tariffs were reduced by 10% as from 1 July 2022.
The 2020-2023 tariff proposal for storage was approved by CREG on 20 December 2019. An amended tariff proposal providing for a tariff reduction was approved on 1 July 2021.
The latest updated tariff proposal for terminalling services was approved by CREG on 2 December 2021. This tariff proposal resulted in the introduction of a regulated tariff for the new BioLNG liquefaction services, and the confirmation of the tariff for the virtual liquefaction service, renamed the backhaul liquefaction service.
The decisions laying down the tariff methodology for the period 2024-2027 for the natural gas transmission system, the natural gas storage facility and the LNG facility were adopted by CREG on 30 June 2022.
Fluxys Belgium held a consultation on the tariff proposal for transmission services for 2024-2027, running from 6 October to 6 December 2022. The tariff proposal for these services was submitted to CREG in late December 2022.
The tariffs must cover the estimated authorised costs necessary to be able to efficiently provide the regulated services. The basis for this calculation is accounting according to the Belgian accounting rules (Belgian GAAP). The estimated authorised costs include the operating costs, financial expenditure and regulated return.
Operating costs. Operating costs are divided into:
This encourages Fluxys Belgium to perform its activities in the most efficient way possible. Every saving vis-à-vis the estimated and authorised budget for manageable costs has a positive impact on pre-tax gross profits. On the other hand, exceeding budgets negatively affects the profit for the period.
The following are considered non-manageable costs: depreciation, costs relating to other regulated activities, subsidies, taxes, duties and expenses relating to the purchase of commodity products for the operation of the network.
Personnel expenses, business expenses and miscellaneous goods and services are considered to be manageable costs.
Financial expenditure. Financial expenditure relates to net financial costs, i.e. after deduction of financial revenue. Therefore, all actual and reasonable encountered financial costs relating to debt financing for regulated activities are included in the tariffs.
Regulated return. The regulated return is the return on equity invested as authorised by the regulatory provisions governing the return on capital investment. This is calculated using a remuneration rate applied to the average annual value of the regulated assets (average Regulatory Asset Base, or RAB). This RAB, based on the calculations under Belgian accounting standards, varies from year to year, taking into account new investments, decommissioning, authorised depreciation and changes in operating capital.
This remuneration rate for the period 2020-2023 is made up of two components determined by the equity/ RAB ratio (= factor S).
The parameters for the tariff period 2020-2023 are as follows:
The methodology also provides for a specific level of authorised margin for new facilities or extensions to facilities to promote security of supply, or for new facilities or extensions to storage or LNG facilities. The remuneration of the LNG facilities combines a RAB x WACC formula for the initial and replacement investments of the terminal with an IRR (Internal Rate of Return) formula for extension investments undertaken since 2004. CREG establishes a maximum IRR per investment, which Fluxys LNG may not exceed to ensure the attractiveness and competitiveness of the LNG terminal.
The principles of the IRR model for the extension investments by Fluxys LNG were approved by CREG and confirmed in its subsequent decisions.
Finally, in addition to the incentive relating to controlling manageable costs, incentives for the tariff period 2020- 2023 may be granted to the system operator to encourage it to:
Every year, a settlement is made which compares the estimated amounts with the actual ones. These differences, excluding incentives in favour of or against the margin, are recognised as a regulatory asset or liability in the year in which they occur. This settlement applies to the various aspects of the tariff calculation, namely:
This results in a regulatory liability (if for example the actual volumes exceed the estimates or if the operating costs, financial expenditure or regulated return are lower than expected) or a regulatory asset (in the opposite case).
This regulatory liability or asset is taken into account in accordance with the tariff methodology to set the tariffs for the next regulatory periods.
When devising the 2020-2023 tariff proposal, the natural gas transmission system operator identified the expected development in the adjustment account for the relevant regulatory period. This includes an expected decrease in the adjustment account of up to €100 million by the end of 2023.
If the actual development varies considerably from what was expected, whether positively or negatively, this deviation will result in an automatic correction of the tariffs for the gas transmission network.
A specific regulatory liability for auction premiums has been created. This regulatory liability is allocated in accordance with the Network Code.
The code of conduct determines the terms and conditions of access to the natural gas infrastructure. These terms and conditions constitute a set of operational and commercial rules that form the framework within which Fluxys Belgium and Fluxys LNG enter into contracts with users of the transmission, storage and LNG infrastructure.
An initial code of conduct was established by the Royal Decree of 4 April 2003. From 2006 onwards, several market consultations on the evolution of this code were organised by CREG. The Royal Decree of 23 December 2010 on a code of conduct, which came into effect on 15 January 2011, was replaced by the code of conduct adopted by CREG in 2022.
Specifically, following a public consultation, CREG adopted, by decision of 31 August 2022, a new natural gas code of conduct which came into force in 2022.
That code of conduct states that operators (for transmission, storage and LNG terminalling) must draw up a range of documents which are subject to CREG's approval: the access code, the services programme, the standard agreements and the connection agreements. When drawing up these documents, the network users concerned are consulted to ensure that the services offered are aligned as closely as possible with market needs. Only after this consultation can the documents be submitted to CREG for approval.
A compliance officer was appointed at Fluxys Belgium and Fluxys LNG in the framework of the commitments regarding non-discriminatory access to the network. A compliance programme was drawn up with the specific details of the rules of conduct that members of staff must comply with regarding non-discrimination, transparency and handling of confidential information. Fluxys Belgium's Board of Directors and management approved the compliance programme.
Every year, a report on compliance with the programme is drawn up for both Fluxys Belgium and Fluxys LNG, and the results are published on the website: https:// www.fluxys.com/en/company/fluxys-belgium/investors.
We move quickly, even when the market is weathering a storm. Ready for our clients, ready to bring energy wherever it's needed. With our digital transformation boosting our agility to deliver on the green transition, today and tomorrow. That's how we work, day after day, on future-proof value.
Offering our customers as much capacity as possible in the interests of security of supply
Driven digitalisation to increase the agility of our organisation, strengthen the foundations in our energy transition acceleration path, improve services for our customers and develop new opportunities
* Subject to the decision of the Annual General Meeting convened to decide on the appropriation of the profit for the year.
46 Contents Looking to the future Our profile Financial resilience Digitalisation Environment Social Governance Corporate Governance Declaration Financial situation 47
(2021: €438.9 million)
Within the limits of the regulatory framework applicable to our activities, we respond to the expectations and needs of our customers in the best possible way to maximise revenues from the sale of our services. Maximising sales of capacity also means supporting the competitiveness of our tariffs, which we also underpin by keeping operating costs under control and retaining a healthy financial structure. Our financing policy enables us to finance investments on attractive terms.
Our activities contribute hugely to the prosperity of society, the economy, our employees and our shareholders. Our activities also substantially help the energy transition forward. This is how we future-proof our contribution to prosperity.
The risk that market events or developments will impact Fluxys Belgium's revenues and/or assets
• Warranties from suppliers and customers
Throughout 2022, our sales team left no stone unturned to offer customers as much capacity as possible in the interests of security of supply. After all, the geopolitical situation in Ukraine has profoundly changed the dynamics of gas markets and the direction of flows in Europe. Previously, supplies largely came from the east. To ensure security of supply, additional flows from the west are now needed to compensate for the lost volumes from the east.
Together with the neighbouring transmission system operators, we found ways to maximise the capacity that was physically available for cross-border flows. Moreover, together with our customers we looked at how they could make optimal use of their package of services. The result was that they could carry unprecedented large volumes of natural gas to the Netherlands and Germany. Flows to Germany soared to 256 TWh (from 20 TWh in 2021) and those to the Netherlands increased to 145 TWh (from 68 TWh in 2021).
Together with the long-term customers at the Zeebrugge LNG terminal, we examined how the schedule for their shipping traffic could be adjusted so that more ships could dock there – and this worked, as this meant that the terminal managed to support security of supply.
Thanks to the special flexibility offered by the new storage services, customers booked maximum capacity at the Loenhout storage facility for winter 2022-2023. They have also already booked 60% of the capacity for the subsequent years.
With its storage facilities filled to the maximum level, Belgium easily exceeded the requirements set by the European Union in 2022 for security of supply for winter 2022-2023, namely that storage facilities should be filled to at least 80% of full capacity by 1 November.
In line with the tariff methodology, Fluxys Belgium, in consultation with the market and the federal energy regulator CREG, reduced tariffs for transmission services by 10% from 1 July 2022 onwards. The tariff reduction had no impact on Fluxys Belgium's results.
Fluxys Belgium systematically assesses its main counterparties' financial capacity and, in accordance with the regulatory framework, closely monitors its receivables. Our policy regarding counterparty risks requires our major customers and suppliers to undergo a financial analysis (liquidity, solvency, profitability, reputation and risks) in advance and subsequently on a regular basis.
Fluxys Belgium uses internal and external information sources to this end, such as official analyses performed by specialist rating agencies. These rating agencies assess entities on the basis of risk and award them a credit rating. Various internal assessments are carried out and are covered by a full cross-cutting review by Sales, Finance and Legal.
Fluxys Belgium also asks most of its customers and certain categories of suppliers to provide a financial guarantee, thereby reducing the group's exposure to credit risk both in terms of default and concentration of customers. The potential negative impact of parties that remain in default is handled in accordance with the regulatory framework.
The reduction corresponds to a total of €45 million being returned over the course of 2022 and 2023. This is in line with Fluxys Belgium and CREG's desire to support consumers against the backdrop of high natural gas prices.
Fluxys Belgium's cash surpluses are deposited with parent company Fluxys within the framework of cash pooling agreements. Fluxys invests these surpluses in various ways, namely:
| Income statement (in thousands of €) | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Operating revenue | 912.559 | 573.191 |
| EBITDA* | 323.167 | 318.905 |
| EBIT* | 147.305 | 137.821 |
| Net profit | 83.728 | 75.521 |
| Balance sheet (in thousands of €) | 31.12.2022 | 31.12.2021 |
| Investments in property, plant and equipment for the period | 105.525 | 50.647 |
| Total property, plant and equipment | 1.855.375 | 1.902.037 |
| Equity | 643.617 | 639.674 |
| Net financial debt* | 493.800 | 846.046 |
| Total consolidated balance sheet | 3.406.570 | 2.634.514 |
Fluxys Belgium's infrastructure was used particularly intensively throughout the year by our customers to support security of supply in Germany and the Netherlands. The extra revenues from that additional capacity that was sold do not benefit the company's shareholders. As stipulated by regulatory provisions, these extra revenues are deposited in the buffer account provided for this purpose (the 'adjustment account'). The amounts in the adjustment account are reallocated under the supervision of the regulator, CREG.
As part of the October budget consultations, the federal government decided to collect an exceptional solidarity contribution of €300 million from Fluxys Belgium. This contribution represents additional support for Belgium's population during the energy crisis.
The Fluxys Belgium group generated turnover of €912.6 million in 2022. This represents an increase of €339.4 million compared with 2021, when turnover stood at €573.2 million. The increase in regulated revenue is in line with tariff methodology and mainly stems from accounting for the exceptional solidarity contribution of €300 million.
Consolidated net profit rose from €75.5 million in 2021 to €83.7 million in 2022, an increase of €8.2 million. The rise in net profit is in line with the tariff proposal, in accordance with the tariff methodology for 2020-2023, and is therefore not due to the increase in sold capacity or in energy prices.
The 2020-2023 tariff methodology (set by the regulator, CREG) applies the principle that all reasonable costs including interest and fair remuneration are covered by regulated revenues. In addition, there are a number of incentives aimed at controlling costs and to direct and monitor some of the company's performance. By controlling its operating costs and making efficiency efforts, the Fluxys Belgium group succeeded in achieving the regulatory targets and incentives.
In 2022, investments in property, plant and equipment amounted to €105.5 million as opposed to €50.6 million in 2021. Of this amount, €67.7 million was dedicated to LNG infrastructure projects and €36.8 million to transmission projects.
Fluxys Belgium creates prosperity by contributing to the economic growth of the society and environment in which it operates. This contribution is measured as added value that the company generates and distributes among its stakeholders.
In 2022, the added value generated by continuing operations amounted to €480,3 million, up €41,4 million on 2021.
Under the 2020-2023 tariff methodology, the net profit from Belgian regulated activities is determined based on various regulatory parameters, including equity invested, financial structure and incentives. More information about the 2020-2023 tariff methodology can be found in the 'Legal and regulatory framework' section (see page 38).
Based on the information available at the time of this report, it is extremely difficult to anticipate the econom-
Fluxys LNG (a consolidated subsidiary in which Fluxys Belgium holds a 99.9% stake and Flux Re a 0.01% stake) is the owner and operator of the Zeebrugge LNG terminal and sells terminalling capacity and associated services. Fluxys LNG's equity totalled €141.7 million as at 31 December 2022, as opposed to €149.5 million the previous year. Net profit for the 2022 financial year totalled €32.1 million (€31.1 million in 2021).
FFlux Re (consolidated subsidiary – wholly owned by Fluxys Belgium) is a reinsurance company under Luxembourg law and was established in October 2007. Flux Re's statutory equity, before appropriation, fell from
Fluxys Belgium's net profits totalled €84.0 million, compared with €71.7 million in 2021.
At the Annual General Meeting on 9 May 2023, Fluxys Belgium will propose a gross dividend of €1.40 per share.
Taking into account a profit of €79.3 million carried over from the previous financial year and a withdrawal of €28.2 million from the reserves, the Board of Directors will propose to the Annual General Meeting that the profits be allocated as follows:
ic impact of the war in Ukraine. In light of the current understanding of the situation, the essential nature of the company's activities and its regulatory framework, at present we do not anticipate the war and the current resulting measures and market developments having any significant negative impact on the consolidated result of the Fluxys Belgium group in 2023 (see section 'Our risk management' - 'Consequences of the war in Ukraine', page 37).
€12.7 million as at 31 December 2021 to €10.5 million as at 31 December 2022. Net profit for the 2022 financial year totalled €2.8 million (€2.3 million in 2021).
Balansys (stake consolidated using the equity method – Fluxys Belgium holds a 50% stake). On 7 May 2015, as part of the integration of the Belgian and Luxembourg gas markets, Fluxys Belgium and the Luxembourg transmission system operator Creos Luxembourg set up the company Balansys, a joint venture in which Fluxys Belgium and Creos Luxembourg each have a 50% stake. Balansys is in charge of the commercial balancing activities of the integrated Belgian-Luxembourg gas market.
If that profit allocation proposal is adopted, the total gross dividend for the 2022 financial year will be €1,40 per share. This amount will be payable from 17 May 2023 onwards.
* See glossary on page 54.
| Contribution to prosperity (in millions of €) | 2022 | 2021 | 2020 | 2019 |
|---|---|---|---|---|
| Added value from continuing operations | 480.3 | 438.9 | 427.1 | 423.2 |
| Personnel | 132.9 | 112.5 | 110.5 | 107.5 |
| Shareholders (dividend) | 97.0 | 96.3 | 91.3 | 88.5 |
| Society (taxes) | 37.2 | 36.9 | 37.2 | 48.2 |
| Suppliers | 174.7 | 155.6 | 149.3 | 143.4 |
| Financial institutions (interest) | 38.5 | 36.3 | 38.8 | 35.5 |
| Financial ratios | 2022 | 2021 | 2020 | 2019 |
| Solvency Ratio of (i) net financial debt and (ii) the sum of equity and net financial debt |
43% | 57% | 58% | 58% |
| Interest coverage Ratio of (i) the sum of FFO* and interest expenses and (ii) interest expenses |
21.39 | 6.75 | 5.61 | 6.58 |
| Net financial debt/extended RAB Ratio of (i) net financial debt and (ii) extended RAB |
17% | 28% | 28% | 29% |
| FFO*/net financial debt Ratio of (i) FFO and (ii) net financial debt |
144% | 25% | 20% | 22% |
| RCF*/net financial debt Ratio of (i) RCF and (ii) net financial debt |
125% | 13% | 10% | 12% |
EBIT: Earnings Before Interest and Taxes or operating profit/loss, plus income from equity affiliates and dividends received from unconsolidated entities. EBIT is used as a reference to monitor the operational performance of the group over time.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation or operating profit/loss, before depreciation, amortisation, impairment and provisions, plus income from equity affiliates and dividends received from unconsolidated entities. EBITDA is used as a reference to monitor the operational performance of the group over time, without taking non-cash costs into account.
Net financial debt: interest-bearing liabilities (including lease debts), cash linked to early refinancing transactions and 75% of the balance of cash, cash equivalents and short- and long-term cash investments (the remaining 25% is considered a buffer reserve for operational purposes (working capital) and is therefore deemed unavailable for investments). This indicator gives an idea of the amount of interest-bearing liabilities that would remain if all available cash were used to repay loans. To show a more faithful picture of reality, the exceptional solidarity contribution of €300 million has been removed from the cash position when calculating the net financial debt. This is because that debt was recorded on 31 December while the payment was made in January 2023, significantly affecting the calculation.
Solvency: the ratio between net financial debt and the sum of equity and net financial debt, indicating the strength of the Fluxys Belgium group's financial structure.
Interest coverage: the ratio between FFO before interest expenses and interest expenses, representing the group's capacity to cover its interest expenses via its operating activities.
Net financial debt/Extended RAB: ratio expressing the share of the extended RAB financed by external debt.
| Net financial debt (in millions of €) | 2022 | 2021 | 2020 | 2019 |
|---|---|---|---|---|
| Net financial debt | 493.8 | 846.0 | 873.1 | 903.3 |
| Breakdown | ||||
| Debt capital market | 700.0 | 699.1 | 692.7 | 698.2 |
| Bank loans | 262.3 | 286.8 | 310.6 | 327.8 |
| Related parties | 210.3 | 233.6 | 257.0 | 263.3 |
| 75% of cash and other financial assets | -678.2 | -373.5 | -393.1 | -386.0 |
| Weighted average maturity as at 31 December | 8.1 | 9.2 | 10.2 | 11.3 |
| RAB and WACC | 2022 | 2021 | 2020 | 2019 |
| RAB* (in millions of €) | ||||
| Transmission | 2,059.1 | 2,047.5 | 2,086.9 | 2,125.3 |
| Storage | 228.0 | 228.8 | 235.6 | 239.7 |
| LNG terminalling | 305.7 | 303.0 | 302.7 | 314.4 |
| Other property, plant and equipment excluding RAB (in millions of €) |
417.7 | 410.4 | 420.3 | 413.4 |
| Extended RAB* | 3,010.6 | 2,989.7 | 3,045.4 | 3,092.8 |
| WACC* before tax (in %) | ||||
| Transmission | 4.88 | 4.92 | 4.88 | 3.87 |
| Storage | 5.06 | 5.09 | 5.04 | 3.57 |
| LNG terminalling | 4.83 | 4.99 | 5.14 | 2.85 |
FFO/Net financial debt: ratio used to determine the group's capacity to pay off its debts based on cash generated by its operating activities.
RCF/Net financial debt: ratio used to determine the group's capacity to pay off its debts based on cash generated by its operating activities after payment of dividends.
FFO: Funds from Operations or profit/loss from continuing operations, excluding changes in regulatory assets and liabilities, before depreciation, amortisation, impairment and provisions, plus dividends received from equity affiliates and unconsolidated entities, minus net financial expenses and tax payables. This indicator reflects the cash generated by operating activities and therefore the group's capacity to repay its debts, make investments and pay dividends to investors.
RCF: Retained Cash Flow or FFO, less dividends paid. This indicator reflects the cash generated by operating activities, but after payment of dividends, and thus reflects the group's net capacity to repay its debts and to make investments.
RAB: average Regulated Asset Base for the year. The RAB is a regulatory concept that corresponds to the basis of regulated assets on which the regulatory return is allocated, as regulated by CREG.
Other investments in property, plant and equipment excluding the RAB: the average of the cumulative investments in the Zeebrugge LNG terminal expansions and in the non-regulated activities.
Extended RAB: total RAB and other investments in plant, property and equipment excluding the RAB.
WACC: Weighted Average Cost of Capital, reflecting the return allowed by the regulation on the RAB.
Fluxys Belgium is strengthening its position with its mix of extensive digitalisation and enthusiasm for new ideas, as part of a cross-cutting approach. With this approach, we are making our organisation more agile, consolidating the foundations of our drive to speed up the energy transition, improving services for our customers and developing new opportunities.
| Risk | Measures |
|---|---|
| Inability to maintain optimal customer service and improve internal operations due to lack of digital advancement |
• Digital transformation programme • Innovation and strengthening ICT foundations |
We are pursuing our work on rolling out large-scale digitalisation through the Digital Transformation programme, which aims to both accelerate and expand this process.
Digital Lounge Is our innovation lab approach to quickly and flexibly developing digital solutions for our customers, employees and other stakeholders. We work, as the need arises, with ad hoc cross-cutting Digital Lounge teams on devising a learning process. Here, the design and priorities may change based on what we learn
In 2022, we came up with four digital solutions to enhance internal processes, the offering for our customers and the development of digital talent.
is our approach to creating a working environment that supports digital transformation, hybrid collaboration and connectivity between employees wherever possible. At the same time, our employees are consolidating their digital skills under the guidance of the Digital Coaches.
The survey we conducted among employees in 2022 revealed an overall feeling of contentment, with 80% of respondents giving satisfaction scores of 7 or more out of 10. In 2023, we will be shifting our focus to improving the digital dexterity of our employees so that they can make even better use of existing and emerging technological solutions.
The Digital Transformation programme focuses on both innovation and consolidating the ICT foundations of Fluxys Belgium.
deploying the Cloud architecture for business applications. The initial commercial modules have been developed, and we are continuing this approach for other applications where it has added value.
bringing together, for internal use, data from various systems along with the associated visualisation tools to provide a quicker and clearer insight into all the available data.
using IoT capabilities to optimise the operational management and maintenance of the pipeline network.
various new modules for our in-house system for gas transport, used by various infrastruc ture companies.
preparing for the migration to a new SAP environment for all Enterprise Resource Planning. This will be rolled out in 2023. At the same time, the tools for our technical staff in the field will be upgraded.
developing a digital twin of our transmission system which could, for example, simulate the flow of new gases through the network.
see the Extra focus on ICT systems and cyber security section (page 102).
Drawing on the Digital Lounge approach, we launched the Emix Beta app in 2022. This is a fully digital platform where suppliers and buyers of standard LNG or bio-LNG can find each other and then get in touch. In this way they can decide whether there is enough of a match between them to make a deal. The result is a transparent, user-friendly and timesaving solution for our customers!
58 Contents Looking to the future Our profile Environment Social Governance Corporate Governance Declaration Financial situation 59 Financial resilience
Fluxys Belgium | Regulated information | Integrated Annual Report 2022 | Our ESG performance
Having a positive impact on the world is what drives us. Care is our key. Taking care of the climate, with the solutions we provide for decarbonisation and by making our own carbon footprint progressively smaller. Serving society by taking care of our essential infrastructure. And seeing to a good working environment with meaningful work. This is how, together, we create balance and perspective for tomorrow.
| Climate change |
|---|
| – Transporting |
| molecules for a |
| carbon-neutral future |
| p. 64 |
Climate change – Systematically reducing our own climate impact Climate change – Management of natural capital p. 82
Climate change – EU taxonomy for sustainable economic development p. 86
In partnership with industry, preparing the hydrogen and CO2 transmission infrastructure to be a powerful tool for both reducing large-scale CO2 emissions and sustainably safeguarding economic activity and employment Together with partners, developing terminals for hydrogen import and CO2 export
Making investments and developing initiatives to further reduce methane emissions in our transmission and storage businesses
Building three additional open-rack vaporisers to reduce the Zeebrugge LNG terminal's emissions
Proposals for openaccess hydrogen and CO2 infrastructure in Belgium's industrial clusters
-48% Greenhouse gas intensity Transmission and storage (compared with 2021) p. 77 (-51% compared with 2017)
+56%
Greenhouse gas intensity LNG terminalling (compared with 2021) p. 77 (+60% compared with 2017)
2 Proposals for cross-border hydrogen infrastructure (Belgium-Netherlands and Belgium-France)
Our commitment to the climate targets forms an integral part of our business strategy with a focus on our key role as an infrastructure company in speeding up the energy transition. In that connection, this commitment is also a core pillar of our Health, Safety and Environment Policy.
Our approach to molecule transmission for a carbon-neutral future is fully in line with the European Commission's decarbonisation package and hydrogen strategy, the Belgian federal government's hydrogen strategy, and the climate approach of Belgium's regions.
Given the developments in the legal and regulatory framework, and in line with industrial demand, we are thoroughly preparing to convert our network into a multi-molecule system which we will use to transport not only natural gas and biomethane but also hydrogen and other carbon-neutral molecules and CO2. This will enable us to offer industry powerful tools for reducing large-scale CO2 emissions and thus sustainably safeguarding economic activity and employment.
| Risk | Measures | ||
|---|---|---|---|
| Drop in demand for natural gas due to the energy transition: the risk that part of Fluxys Belgium's infrastructure can no longer be used |
Investment programme with projects to achieve decarbonisation goals while gradually reconfiguring the existing network as part of a carbon-neutral energy system |
||
| Opportunity | Actions | ||
| • Developing new activities to speed up the energy transition • Combining new infrastructure with, wherever possible, the reuse of existing natural gas infrastructure is a cost-efficient solution to transport molecules for a carbon-neutral future |
• Investment programme with projects to achieve decarbonisation goals while gradually reconfiguring the existing network as part of a carbon-neutral energy system • Creation of the Fluxys nextgrid business unit, focusing 100% on infrastructure and hydrogen and CO2 services |
We will gradually reuse existing infrastructure as much as possible to create hydrogen and CO2 networks. This is cheaper than starting from scratch and it also saves time. In a densely populated country like Belgium, it also means using up a lot less space.
In 2022, we established within Fluxys Belgium the Fluxys nextgrid business unit to optimally reinforce our strategy's central focus on the energy transition. This business unit will serve as the driving force behind the energy transition projects in Belgium and projects directly related to the Belgian energy ecosystem.
Our approach to providing Belgium with the necessary hydrogen and CO2 infrastructure is shaped in cooperation with our customers, the authorities, neighbouring operators, distribution system operators and other stakeholders. In line with market needs, we aim to have the first hydrogen and/or CO2 pipelines in Belgium ready for use by mid-2026. Every effort is being made to make the necessary investment decisions to achieve this.
We develop the infrastructure in industrial clusters and establish connections between them and neighbouring countries. This will allow us to develop the appropriate backbone infrastructure and lay the foundations for sustainably cementing Belgium's role as an energy crossroads by making the country a hydrogen and CO2 hub for the economy both in Belgium and North-West Europe.
In 2022, we produced additional, updated practical proposals for open-access hydrogen and CO2 transmission infrastructure for various industrial clusters. We are focusing on the market with a total of 10 infrastructure proposals.
Each infrastructure proposal is accompanied by a market consultation during which customers can express their interest. 4 market consultations have been completed in the first phase: the market consultations for
hydrogen infrastructure in Antwerp, Mons and Ghent respectively, and the market consultation for CO2 infrastructure in Antwerp. This means that now feasibility studies are looking into tariffs for the use of this infrastructure.
In this phase, the hydrogen clusters in Ghent and Mons are both already cross-border clusters.
Within the Antwerp CO2 cluster, Fluxys Belgium, together with Air Liquide, is developing an open-access terminal for receiving, liquefying and temporarily storing CO2 and loading it onto ships to be taken to permanent offshore storage.
Antwerp@C CO2 Export Hub is the first phase of Antwerp@C, an initiative of Air Liquide, BASF, Borealis, ExxonMobil, INEOS, TotalEnergies, Fluxys and Port of Antwerp-Bruges aiming to halve the CO2 emissions on the Antwerp port platform by 2030.
In 2022, Fluxys Belgium, Air Liquide and Port of Antwerp-Bruges were awarded an EU subsidy of €144.6 million by the Connecting Europe Facility. The funding is intended for the construction of the common CO2 transport and export facilities on the Antwerp port platform. Being awarded this subsidy is a key step towards the final investment decision, which is expected in 2023.
In 2022, Fluxys Belgium, Advario Stolthaven Antwerp and Advario Gas Terminal joined forces to develop an open-access green ammonia import terminal at Port of Antwerp-Bruges. Ammonia is an efficient molecule for the long-distance transmission of green hydrogen generated by wind and solar energy
The aim is to make green ammonia available from the terminal as a carbon-neutral raw material and fuel. The green ammonia can also be converted into green hydrogen for transmission in the hydrogen network.
Within the Ghent CO2 cluster, Fluxys Belgium, together with ArcelorMittal Belgium and the cross-border North Sea Port, is developing an open-access multimodal terminal for receiving, liquefying and temporarily storing CO2 and loading it onto ships to be taken to permanent offshore storage.
In 2022, Fluxys Belgium, ArcelorMittal Belgium and North Sea Port were awarded an EU subsidy of €9.6 million by the Connecting Europe Facility. This funding is intended for research in connection with the Ghent Carbon Hub, combined with a CO2 pipeline between Ghent and Mons.
Fluxys Belgium is conducting various studies to develop the Zeebrugge LNG terminal into a multi-molecule hub for LNG, bio-LNG, hydrogen and CO2.
Oslo
Göteborg
Vienna
Copenhagen
Budapest
Leipzig
Hamburg
Ljubljana
Frankfurt Cologne
Milan
Rome
Rotterdam
Venice
Munich
Paris
Rome
Lyon
Barcelona
Valencia
Almeria
Tarifa
Madrid
Bilbao Bordeaux
Manchester Dublin
Edinburgh
Frankfurt
Lisbon
Porto
Cork
Marseille
Palermo
London
Milan
Munich
Venice
Palermo
Stockholm
Krakow
Helsinki Talinn
Bucharest
Athens
Athens
Riga
Gdansk Vilnius
Warsaw
Gdansk Vilnius
Warsaw
Sofia
Krakow
Sofia
Bratislava Budapest
Ljubljana
Vienna
Prague
Berlin
Bratislava
To be viable, the hydrogen economy requires enough renewable electricity to be generated to produce green hydrogen. The Esbjerg Declaration at the North Sea Summit bringing together Belgium, Denmark, Germany and the Netherlands in May 2022 was vital in this regard. The four countries are joining forces to quadruple their combined offshore wind capacity to 65 GW by 2030 and to further increase it to at least 150 GW by 2050, thereby making the North Sea the largest sustainable energy plant in Europe.
Belgium and Western Europe still have only limited potential to quickly scale up the generation of renewable electricity as a source of green hydrogen. "Blue hydrogen" is one alternative. This is low-carbon hydrogen produced from natural gas, where the released CO2 is captured and reused or stored. Using available technologies, up to 98% of the released CO2 can be captured.
ENGIE and Equinor are developing their H2BE project in Ghent for the large-scale production of blue hydrogen. The project is an important link in getting large volumes of low-carbon hydrogen to market in Belgium quickly in a stable way. Fluxys Belgium is working with ENGIE and Equinor to connect the project to the hydrogen and CO2 networks in the Ghent cluster.
Overseas imports of carbon-neutral hydrogen are a third pillar to ensure the availability of enough green hydrogen. For this purpose, particularly windy and sunny areas where large quantities of green hydrogen can be produced from green electricity are being looked at. Green hydrogen can then be exported by ship to import terminals in Europe, for example in the form of green ammonia.
With this in mind, parent company Fluxys is joining forces with DEME, ENGIE, EXMAR, Port of Antwerp-Bruges and WaterstofNet in the Hydrogen Import Coalition.
The federal government has already signed agreements with Oman and Namibia relating to imports of green hydrogen. For other import routes, partner countries are still being identified. Port of Antwerp-Bruges has signed a similar agreement with Chile, which is a country with huge solar-energy potential.
Göteborg Other transmission system operators in neighbouring countries are also in the process of developing hydrogen infrastructure. In light of this, we see Belgium's hydrogen infrastructure becoming part of a European backbone and, from an international perspective, laying the foundations for consolidating and shoring up our role as the energy crossroads at the heart of North-West Europe for many years to come.
Rotterdam Hamburg To this end, since 2020 we have been working with other infrastructure companies within the European Hydrogen Backbone initiative. The initiative has since grown into a joint approach to developing dedicated hydrogen infrastructure in 28 European countries. In 2022, the initiative expanded its aims, namely to create a 53,000-km pipeline network by 2040, a substantial share of which consists of reused infrastructure that currently serves to transport natural gas.
European Hydrogen Backbone initiative 2022, supported by
Barcelona Guidehouse
First transmission infrastructure in 2026
4.7
8.5
84
22.1
Approximately 40% of Belgium's CO2 emissions are generated by industrial energy consumption or process emissions. The development of infrastructure for the transmission and terminalling of hydrogen and CO2 is key for industry to meet the relevant decarbonisation goals.
Belgium: breakdown of CO2 emissions (in million tonnes, source: klimaat.be)
For many companies, hydrogen is the right choice when weighing up the best balance between security of supply, climate impact and cost. A range of industrial processes also requires high temperatures for which (renewable) electricity is not an option. Connecting these industries to a hydrogen supply gives them a chance to switch to the best carbon-neutral alternative. The same goes for industries that use carbon-intensive feedstock.
Carbon capture, use or storage is considered a key technology for reducing CO2 emissions and creating clusters for the circular reuse of CO2 in the production of, for example, carbon-neutral biofuels. This technology is vital to safeguard sectors that are difficult to decarbonise and involve industrial processes that produce CO2. The availability of infrastructure for the transmission of captured CO2 to destinations for reuse or storage is a cornerstone of this solution.
• Open-access terminal
• Importing hydrogen or derivatives for transshipment to the hydrogen network and then transmission within Belgium and to neighbouring countries • Receiving captured CO2 from the CO2 network with two export options:
transmission to permanent offshore storage. • Status: preliminary studies
• Open-access terminal
Offshore CO2 pipeline (North Sea)
• Open-access pipeline
Industry Transport Residential heating Power generation Other
Process emissions Energy use
16
26.0
39.1
Together with various partners and academic institutions, Fluxys Belgium conducts research into hydrogen and CO2 infrastructure and the practicalities of reusing our existing infrastructure for hydrogen and CO2.
Fluxys Belgium is working with its British counterpart National Gas and with Northern Gas Networks, the distribution system operator for the North of England, to develop a hydrogen test facility. Such a facility would test the transmission of hydrogen in real conditions in various domains,
Over the past year, a 'mini-network' of natural gas infrastructure was built that is separate from the existing network. The tests will start in 2023 and are an important addition to our own research into the reuse of existing hydrogen infrastructure. Expert group DNV and the Universities of Durham and Edinburgh are also involved in the test facility.
These two university projects study the influence of hydrogen on pipeline steels and welding. The results of the HyFit laboratory tests have been presented to the FPS Economy.
This research with GRTgaz, National Gas, Engie and Transitgas/Swissgas aims to test different types of steel for their sensitivity to hydrogen.
We are looking into the practicalities of hydrogen storage at our Loenhout underground storage site. Extensive technical preparations have been made for the injection of hydrogen into the underground storage facility, and we expect to be able to carry out the first tests in 2023 after completing the permit procedures.
Researchers from KU Leuven have developed game-changing hydrogen panels that are a highly efficient means of producing green hydrogen from sunlight as well as water vapour in the air. Fluxys is supporting the innovative project with its wide-ranging expertise in the analysis of molecules.
H2GridLab is an initiative to establish a participatory laboratory on the Anderlecht site of distribution system operator Sibelga to carry out tests, roll out pilot projects and amass knowledge of green hydrogen and its local storage, injection into networks and role in the decarbonisation of public distribution. H2GridLab has been supported by Belgium's federal Energy Transition Fund. Semi-industrial installations such as gas turbines and fuel cells will be set up and tested in 2023.
University research is being conducted into the interactions between different energy networks. This research is developing a simulation model for the Belgian energy system that integrates electricity, hydrogen, natural gas and CO2.
The production of biomethane in Belgium is getting off the ground and gathering momentum. Six biomethane units are currently operational: three in Flanders and three in Wallonia. Construction of an additional unit is expected in 2023.
Up to now, the biomethane units in Belgium have all been connected to the distribution systems. Largescale facilities can be linked up to Fluxys Belgium's high-pressure network. In 2022, we signed an agreement to connect the Green Logix Biogas facilities in Lommel to our network, with this scheduled to happen in late 2024/early 2025.
Valbiom was commissioned by the Belgian gas federation gas.be to carry out a study into the potential contribution of locally produced biogas in Belgium, concluding that biogas could cover around one fifth of household gas consumption by 2030. In addition, biomethane can also be imported from neighbouring countries in the future, using certificates and guarantees of origin. Cross-border exchanges of biomethane should be encouraged by developing an international system of guarantees of origin and sustainability certificates.
Switching to LNG-powered ships and trucks would help to quickly cut greenhouse gas emissions and limit air pollution, which is why Fluxys Belgium is investing in infrastructure and services to open up LNG for these segments. The advantage of small-scale LNG infrastructure and the fleet of LNG-powered ships and trucks is that no additional investments are needed to switch to carbon-neutral bio-LNG as it becomes available.
At the Zeebrugge LNG terminal, trailers are loaded with LNG to supply LNG-powered ships and filling stations for trucks running on LNG. In order to be able to continue meeting increasing demand efficiently, four additional truck loading stations are under construction at the terminal. They will be commissioned in late 2023/ early 2024.
Since 2020, the Zeebrugge LNG terminal has been certified as a European approved process plant to make bio-LNG available as a fuel for transport. Switching ships and trucks to bio-LNG can help the sector make the transition to full decarbonisation.
Our commitment to systematically reducing our own climate impact is an integral part of our business strategy. In that connection, this commitment is also a core pillar of our Health, Safety and Environment Policy.
In 2018, we launched the Go for Net 0 project with a view to halving the greenhouse gas emissions of our own operations by 2025 compared with 2017 levels. In 2021, we reinforced that ambition by setting the goal of making our own activities carbon-neutral by 2035.
| Measures |
|---|
| • Go for Net 0 project to lower Fluxys Belgium's greenhouse gas emissions to net zero by 2035, including methane emissions from our activities and maintenance/repair work • Building additional open-rack vaporisers to reduce the Zeebrugge LNG terminal's emissions |
| Actions |
| Efficiently deployed renewable energy technology improving energy efficiency and reducing greenhouse gas emissions |
Total methane losses on the Fluxys Belgium network account for around 0.02% of the total transported volume. The Go for Net 0 project sets out four tracks for tackling the sources of methane emissions.
Modify equipment generating emissions or replace it with equipment controlled by electricity or compressed air.
Periodic Leak Detection And Repair (LDAR) campaigns enable us to detect fugitive emission sources and repair or optimise them.
Natural gas often has to be removed from a pipeline section during maintenance or repair work. In doing so, we prevent natural gas from being released into the air in various ways. An exception to this may be made for urgent maintenance or repair work.
Various studies are currently exploring other ways to reduce methane emissions. For example, methane emissions can be recovered by starting and stopping facilities.
When balancing the network or controlling gas flows, Fluxys Belgium endeavours to use its compressor facilities as little as possible.
he Zeebrugge LNG terminal has been using an openrack vaporiser since 2013. Using the heat from seawater to regasify LNG will significantly reduce the terminal's energy consumption and emissions. Three additional open-rack vaporisers are being built.
In 2022, we launched a number of studies for additional measures to further reduce the terminal's CO2 emissions:
Fluxys Belgium buys green gas certificates from biomethane producer IOK Beerse to heat its head office and Anderlecht site. We are looking into expanding the use of green gas certificates for our activities.
The electricity used by Fluxys Belgium has been entirely renewable since 2021. As a result, we are completely eliminating the indirect impact of our electrical facilities.
Fluxys Belgium is busy exploring options for generating green electricity for its own use. This is already being done with solar panels on some of our industrial buildings, and the expansion of the solar fleet is under consideration.
In 2022, the greenhouse gas (GHG) intensity of the transmission and storage businesses was halved compared to the reference year 2017.
• The initiatives and investments for cutting methane emissions reduced methane emissions by 23% compared with the previous year. This means that methane emissions have now dropped to half of 2017 levels (reference year). • CO2 emissions decreased by 14% compared with the previous year, thereby falling below 2017 levels (reference year).
In 2022, the Zeebrugge LNG terminal regasified almost three times as much LNG as in 2021 due to the very high demand to support security of supply on the North-West European natural gas market. As a result, considerable use had to be made of emissions-generating conventional regasification facilities to supplement the open-rack vaporiser.
Due to the high levels of activity, GHG intensity increased by more than half compared with 2021 and CO2 emissions from the facility were more than four times as high. However, maximising use of the openrack vaporiser with seawater in 2022 prevented 72,250 tonnes of CO2 emissions.
Three additional open-rack vaporisers are being built at the LNG terminal, with a view to reducing its GHG intensity. In 2022, various studies were launched into additional investments in further reducing the GHG intensity of the facilities (see page 76).
In 2021, we started building three additional open-rack vaporisers at the Zeebrugge LNG terminal. The commissioning of the facilities from 2024 onwards will mark a milestone in terms of further reducing energy consumption and also
Two key solutions for reducing greenhouse gas emis sions (namely minimising the deployment of compres sor stations and maximising the use of the open-rack vaporiser at the LNG terminal) primarily improve energy efficiency. The less fossil energy we use, the more we manage to reduce greenhouse gas emissions.
In addition, we take various other measures for our operations. For example, we conclude operational agreements with operators in neighbouring countries to ensure the energy-efficient use of networks. For the best possible energy efficiency, we also make maximum use of the operational flexibility in the pipelines and optimise settings in the pressure-reducing stations.
In recent years, various installations at the LNG terminal have been renovated and adapted to boost the ener gy efficiency of the infrastructure. The construction of three additional open-rack vaporisers is the latest example of our efforts to boost energy efficiency.
The quality and accuracy of the figures used for CO2-equivalent emissions in this report have been validated by an external auditor, pursuant to the International Standard on Assurance Engagements (ISAE) 3000 (Revised), a model developed for the attestation of non-financial data. The attested indicators are marked with a ( ) – see page 155 (Independent auditor's review report).
Fluxys Belgium has CO2 emission rights for each of its five sites that are subject to the EU Emissions Trading Directive. Internal audits are organised for these sites every year and the annual emissions report for each site undergoes an external audit.
The results in this report include both direct and indirect emission sources:
| Systematically reducing our own climate impact | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|
| Greenhouse gas emissions: transmission and storage | ||||||
| Greenhouse gas emissions in kilotonnes of CO2 equivalent |
127 | 157 | 160 | 195.82 | 197.06 | 209.29 |
| Methane (CH4 ) |
70 | 91 | 103 | 127 | 126 | 142 |
| CO2 | 57 | 65 | 52.76 | 64.39 | 66.3 | 59.83 |
| Electricity | 0 | 0 | 4.40 | 4.44 | 4.52 | 7.47 |
| Volume of transported natural gas (TWh) | 612.03 | 391.92 | 398.52 | 441.00 | 456.37 | 485.70 |
| Greenhouse gas intensity (kilotonnes of CO2 equivalent/TWh of transported natural gas) |
0.21 | 0.40 | 0.40 | 0.44 | 0.43 | 0.43 |
| Greenhouse gas emissions: LNG terminalling | ||||||
| Greenhouse gas emissions in kilotonnes of CO2 equivalent |
225.35 | 52.52 | 83.35 | 42.74 | 13.86 | 13.86 |
| Methane (CH4) | 0.35 | 0.07 | 0.03 | 0.05 | 0.02 | 0.01 |
| CO2 | 225 | 52.45 | 71.63 | 107.43 | 35.07 | 5.17 |
| Electricity | 0 | 0 | 11.69 | 11.74 | 7.65 | 8.68 |
| Volume of regasified LNG (TWh) | 121.19 | 44.03 | 50.87 | 73.27 | 26.89 | 11.95 |
| Greenhouse gas intensity (kilotonnes of CO2 equivalent/TWh of regasified LNG) |
1.86 | 1.19 | 1.64 | 1.63 | 1.59 | 1.16 |
| Total greenhouse gas emissions in kilotonnes of CO2 equivalent |
352.69 | 209.52 | 243.35 | 315.04 | 239.8 | 223.15 |
| Energy consumed (MWh)** | 523,883 | 337,554 | 281,109 | 311,549 | 329,431 | 305,121 |
|---|---|---|---|---|---|---|
| Diesel and petrol | 9,876 | 8,954 | 8,921 | 9,991 | 11,013 | 11.386 |
| Electricity* | 250,483 | 24,565 | 25,968 | 26,146 | 26,262 | 33.086 |
| Natural gas | 263,524 | 304,044 | 248,149 | 275,412 | 292,156 | 260.649 |
| Volume of transported natural gas (TWh) | 612.19 | 391.92 | 398.52 | 441.00 | 456.37 | 485.70 |
| Energy intensity (MWh of energy consumed/MWh of transported natural gas) |
0.00086 0.00086 | 0.00070 | 0.00071 | 0.00072 | 0.00063 | |
| Energy efficiency: LNG terminalling | ||||||
| Energy consumed (MWh)** | 1,232,773 | 320,125 | 426,640 | 622,491 | 242,007 | 85,867 |
| Diesel and petrol | 204 | 348 | 374 | 383 | 398 | 558 |
| Electricity* | 105,750 | 58,017 | 69,052 | 69,040 | 44,471 | 38.458 |
| Natural gas | 1,126,819 | 261,760 | 357,214 | 553,068 | 197,138 | 46.851 |
| Volume of regasified LNG (TWh) | 121.19 | 44.03 | 50.87 | 73.27 | 26.89 | 11.95 |
| Energy intensity (MWh of energy consumed/MWh of regasified LNG) |
0.01012 | 0.00727 | 0.00837 | 0.00853 | 0.00896 | 0.00716 |
Fluxys Belgium's efforts to manage natural capital stem from our Health, Safety and Environment policy. Our environmental management system provides the framework for management, monitoring and improvement measures.
| Risk | Measures |
|---|---|
| Fluxys Belgium's activities may damage ecosystems and biodiversity |
Environmental management system with associated internal and external audits, environmental impact assessments including preventive and mitigating measures, a monitoring |
| approach and complaints management |
Fluxys Belgium's environmental management system provides the framework for management, monitoring and improvement measures for environmental coordinators. The environmental management system also includes action programmes for reducing greenhouse gas emissions (see Climate change – Systematically reducing our own climate impact, page 74).
Fluxys Belgium's priority is to minimise the impact on the environment and local residents, not only during the design and installation/construction phases, but also during the operation of its infrastructure.
All permit applications for the construction and operation of new facilities or for the renewal of the permit for existing facilities include assessments of their impact on the environment. These environmental studies gauge a project's potential impact in various areas, including air, water and soil pollution, ambient noise, the production of waste, spatial integration, mobility, and the impact on biodiversity. Preventive or mitigating measures are taken wherever necessary.
In 2022, Fluxys Belgium conducted 32 environmental studies as part of its permit applications.
Fluxys Belgium takes great care to ensure the conservation of ecosystems in those areas where its infrastructure is built and/or operated. Environmental impact assessments gauge our infrastructure's impact on ecosystems (see above). When laying new pipelines, Fluxys Belgium always takes care to ensure that the works cause as little disruption to the environment as possible. We also see to it that nature can fully recover after pipelines have been laid or we invest in measures to offset the impact on nature, preferably involving local species.
In late 2022, an outside company conducted a thorough assessment of the biodiversity at and around the Loenhout gas storage facility's above-ground installations. Based on the assessment report, we are developing initiatives to promote biodiversity in the vicinity of these installations.
Fluxys Belgium uses a range of techniques to limit the noise generated by its pressure-reducing stations, compressor stations and other facilities.
When building new infrastructure, a lot of attention is paid to potential noise pollution from the design phase onward.
All larger stations house a separate drain system and wastewater treatment plant (or reed bed filtration system).
The environmental coordinator received 19 external environmental complaints in 2022, including a notice issued by the public authorities. Complainants contacted us to express dissatisfaction about noise, report that they could smell gas and/or flag up instances of possible contamination. All the complaints have been resolved.
In 2022, Fluxys Belgium approved its indicative investment programme for the period 2023-2032. The programme as a whole encompasses investments totalling over €2.8 billion. The estimated investments in the development of the hydrogen and CO2 infrastructure, the reduction of our own greenhouse gas emissions and other investments in sustainable economic activities amount to around 75% of that total.
The European Commission has rolled out a sustainable finance action plan. This regulation or "taxonomy" requires listed companies such as Fluxys Belgium to give a rundown of their environmentally sustainable activities.
From 2023 onwards, companies must report which part of their activities meet six environmental objectives laid down by the Commission, two of which (climate change mitigation and climate change adaptation) already took effect in 2021. As the other four objectives (on water and marine resources, pollution, biodiversity and ecosystems, and the circular economy) will only come into force at a later date, they fall outside the scope of the financial year 2022.
For the financial year 2022, Fluxys Belgium examined its economic activities and assessed whether they were eligible for the EU taxonomy and whether they were sustainable (i.e. aligned), in accordance with Annexes I and II to the relevant Delegated Regulation.
For 2022, Fluxys Belgium identified the following economic activity as an eligible activity: 4.14. Transmission and distribution networks for renewable and low-carbon gases.
The following Fluxys activities fall into this category of eligible economic activity:
An economic activity that pursues climate change mitigation should contribute substantially to the stabilisation of greenhouse gas emissions by avoiding or reducing them or by enhancing greenhouse gas removals.
Facilitating green gas in the natural
Reducing our own greenhouse
gas network Hydrogen infrastructure Other investments CO2-infrastructure
gas emissions
Meanwhile, an economic activity that pursues climate change adaptation should contribute substantially to reducing or preventing the adverse impact of the current or projected future climate, or the risk of this impact, whether on that activity itself or on people, nature or assets.
The economic activities must "do no significant harm (DNSH)" to the objectives for water and marine resources, pollution, and biodiversity and ecosystems. The circular economy criteria do not apply to our activities.
Environmentally sustainable taxonomy-aligned activities:
• Minimum guarantees: With a series of companyinternal control mechanisms, Fluxys Belgium ensures that appropriate limitations are placed on risks related to corruption, non-respect for human rights, unfair competition and tax fraud.
Fluxys Belgium was not found guilty of any failures pertaining to any of these risks in 2022.
From the above, it can be concluded that the activities mentioned above can be regarded as environmentally sustainable.
In 2022, no revenue was generated from the sale of transmission capacity for renewable or low-carbon molecules.
| Substantial contribution criteria |
DNSH criteria | ("Does not significant harm") | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Economic Activities | Code(s) | Absolute Turnover |
Proportion of Turnover |
Climate change mitigation |
Climate change adaptation |
Climate change mitigation |
Climate change adaptation |
Water and marine resources |
Circular economy |
Pollution | Biodiversity and ecosystems |
Minimum safeguards |
Taxonomy aligned proportion of Turnover, year N |
Taxonomy aligned proportion of Turnover, year N-1 |
Category (enabling activity or) |
Category (transitional activity) |
|
| m€ | % | % | % | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | % | E | T | |||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||
| A.1. Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||
| Transmission and distribution networks for renewable and low-carbon gases |
4.14 | 0 m€ | 0% | 0% | N/A | N/A | Y | Y | N/A | Y | Y | Y | 0% | N/A | N/A | N/A | |
| Turnover of environmentally sustainable activities (A.1) |
0 m€ | 0% | 0% | N/A | N/A | 0% | N/A | N/A | N/A | ||||||||
| A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||
| Turnover of taxonomy-eligible but not environmentally sustainable activities (A.2) |
0 m€ | 0% | |||||||||||||||
| Total (A.1 + A.2) | 0 m€ | 0% | 0% | ||||||||||||||
| Turnover of Taxonomy-non-eligible activities (B) |
928 m€ | 100% |
|---|---|---|
| TOTAL (A+B) | 928 m€ | 100% |
Capital expenditure covers investments, mainly in connection with the Go For Net 0 project to reduce our company's climate impact.
| Substantial contribution criteria |
DNSH criteria | ("Does not significant harm") | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Economic Activities | Code(s) | Absolute CapEx |
Proportion of CapEx |
Climate change mitigation |
Climate change adaptation |
Climate change mitigation |
Climate change adaptation |
Water and marine resources |
Circular economy |
Pollution | Biodiversity and ecosystems |
Minimum safeguards |
Taxonomy aligned proportion of CapEx, year N |
Taxonomy aligned proportion of CapEx, year N-1 |
Category (enabling activity or) |
Category (transitional activity) |
|
| m€ | % | % | % | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | % | E | T | |||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||
| A.1. Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||
| Transmission and distribution networks for renewable and low-carbon gases |
4.14 | 6,9 m€ | 5,91% | 100% | N/A | N/A | Y | Y | N/A | Y | Y | Y | 5,91% | N/A | N/A | N/A | |
| CapEx of environmentally sustainable activities (A.1) |
6,9 m€ | 5,91% | 100% | N/A | N/A | N/A | N/A | N/A | |||||||||
| A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||
| CapExof taxonomy-eligible but not environmentally sustainable activities (A.2) |
0 m€ | 0% | |||||||||||||||
| Total (A.1 + A.2) | 6,9 m€ | 5,91% | 5,91% |
| CapExof Taxonomy-non-eligible activities (B) |
110 m€ | 94,09% |
|---|---|---|
| TOTAL (A+B) | 116,9m€ | 100% |
| Substantial contribution criteria |
DNSH criteria | ("Does not significant harm") | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Economic Activities | Code(s) | Absolute OpEx |
Proportion of OpEx |
Climate change mitigatio |
Climate change adaptation |
Climate change mitigation |
Climate change adaptation |
Water and marine resources |
Circular economy |
Pollution | Biodiversity and ecosystems |
Minimum safeguards |
Taxonomy aligned proportion of OpEx, year N |
Taxonomy aligned proportion of OpEx, year N-1 |
Category (enabling activity or) |
Category (transitional activity) |
|
| m€ | % | % | % | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | % | E | T | |||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||
| A.1. Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||
| Transmission and distribution networks for renewable and low-carbon gases |
4.14 | 7,6 m€ | 15,05% | 100% | N/A | N/A | Y | Y | N/A | Y | Y | Y | 15,05% | N/A | N/A | N/A | |
| Transmission and distribution networks for renewable and low-carbon gases |
7,6 m€ | 15,05% | 100% | N/A | N/A | N/A | N/A | N/A | |||||||||
| A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||
| OpEx of taxonomy-eligible but not environmentally sustainable activities (A.2) |
0 m€ | 0% | |||||||||||||||
| Total (A.1 + A.2) | 7,6 m€ | 15,05% | 15,05% |
| OpEx of Taxonomy-non-eligible activities (B) |
42,8 m€ | 84,95% |
|---|---|---|
| TOTAL (A+B) | 50,4 m€ | 100% |
Safe and reliable infrastructure p. 96 Good neighbourly relations p. 104 capital p. 106
Management of human Employee safety, health and well-being p. 112
Social dialogue p. 117 Diversity and inclusion Customer care p. 120 Human rights p. 122
Giving the best of ourselves in the field to fully leverage our infrastructure 24/7 in the interests of security of supply
Preparing for the construction of the first phase of the Zeebrugge-Opwijk pipeline: essential infrastructure for security of supply (for natural gas currently,
for hydrogen in the future) Implementing a future-oriented recruitment approach
0 Interruptions or reductions in capacity (2021: 0)
0 Damage to infrastructure caused by third parties, resulting in a gas leak
(2021: 0)
7.2/0.12
Safety Frequency / Severity (2021: 7.8) / (2021: 0.22)
81/62 Talent Incoming / outgoing
(2021: 63) / (2021: 62)
(2021: 0)
909 Employees (2021: 884)
5.64
Development Average number of training days per full-time equivalent (FTE) (2021: 3,75)
17/83 Diversity Female / male
58
(2021: 18) / (2021: 82)
Development Number of employees taking on a new role within the company (2021: 71)
94 Contents Looking to the future Our profile Financial resilience Digitalisation Governance Corporate Governance Declaration Financial situation 95
Social
As a socially responsible operator, Fluxys Belgium builds safe infrastructure and operates it safely. Together with distribution system operators and the users of our infrastructure, we guarantee optimum continuity of gas flows to end users in Belgium and the wider Western European market for which we serve as a crossroads.
Our approach to safeguarding the integrity and reliability of our facilities forms an integral part of our business strategy, with our key role in security of supply serving as a driving force in speeding up the energy transition. In that connection, this approach is also a core pillar of our Health, Safety and Environment Policy.
Industrial incidents and some cyber incidents can damage Fluxys Belgium's infrastructure, endanger people's safety, cause unavailability impacting service continuity, and result in financial loss
Fluxys Belgium keeps an eye on public safety, the environment and the well-being of its employees during the design, construction, commissioning, operation, maintenance and dismantling of its facilities.
We work with a comprehensive safety management system in our transmission business to provide for a safe and reliable transmission network, preserve its integrity and limit the impact of any incidents. The safety management system is continually updated to take account of the latest developments and is also subject to periodic internal and external audits.
The management system for our storage and LNG businesses is covered by the Seveso legislation. The Federal Public Service Employment, Labour and Social Dialogue conducts specific inspections at both Seveso sites in conjunction with the Flemish government's Environment Department.
Within the safety management system, risk assessments are the instrument that is used to identify and evaluate the safety aspects pertaining to the integrity of the infrastructure and to define the safety-critical controls.
The safety management system also integrates internal training aspects relating to maintenance, prevention of damage and work by third parties and the raising of awareness among stakeholders such as municipalities, the fire brigade, landowners, architects, contractors and excavator operators.
In 2022, in light of geopolitical events and the damage to the Nord Stream pipelines in the Baltic Sea, Fluxys Belgium switched to a regime of refined precautionary measures.
For any construction project, Fluxys Belgium only works with qualified and certified contractors. Moreover, the company's entities involved in construction projects are SCC-certified. SCC certification entails a checklist covering health, safety and the environment.
Before any facility is commissioned, a series of tests is carried out under the supervision of an authorised inspection agency. The condition of the pipes will then be regularly checked as part of an inspection programme. The pipes are also fitted with a cathodic protection system to prevent corrosion.
Any infrastructure that will stop having a transmission function in the future is taken out of service safely. In some cases, all or part of the infrastructure is kept underground, and technical precautions are taken to prevent any impact on people or the environment.
Pipelines are patrolled in different ways (by car, by helicopter and on foot) and at different intervals.
Patrols also monitor whether unreported works are being carried out in the vicinity of our pipelines. In order to detect such works preventively, our main pipes are fitted out with an acoustic detection system.
Maintenance programmes specific to each type of facility ensure that the infrastructure remains safe and reliable throughout its life cycle. All maintenance activities are carried out by competent internal or external staff. Where possible, pipelines are periodically inspected internally, and a special helicopter checks the gas network for leaks every year.
The geopolitical situation in Ukraine has profoundly changed the dynamics on the gas markets and the direction of flows in Europe. To support security of supply, additional flows from the west are needed to compensate for the lost volumes from the east.
Our teams in the field gave the best of themselves throughout 2022 to fully leverage our infrastructure 24/7 with a view to ensuring and enhancing security of supply. Accordingly, the Belgian network once again confirmed its role as an energy crossroads for Europe, with the Zeebrugge area acting as an important gateway for both natural gas (via pipelines) and LNG (via ship).
In 2022, Fluxys Belgium worked intensively in the task force, together with the Minister of Energy, the Federal Public Service Economy and the federal energy regulator, the Commission for Electricity and Gas Regulation (CREG), to coordinate the various aspects of security of supply and discuss how Belgium could provide as much support as possible to its neighbours.
Serious pipeline incidents are often the result of damage caused by work carried out by third parties. To avoid such damage, anyone planning or wanting to carry out work in the vicinity of natural gas transmission infrastructure has a legal obligation to notify Fluxys Belgium in advance.
Fluxys Belgium then confirms whether or not any natural gas transmission infrastructure is located in the vicinity of the planned work. If this is the case, the applicant is sent all the relevant information and details of further procedures to be followed to carry out the work safely.
Our employees attend preparatory meetings on a daily basis relating to sites where third parties plan to work in the vicinity of our infrastructure. During these meetings, they explain the measures that need to be taken and document the safety arrangements in writing before any work can actually begin.
Damage can also occur when Fluxys Belgium commissions or repairs infrastructure. All incidents or near-incidents are investigated thoroughly and action is taken immediately to prevent them from recurring.
Fluxys Belgium takes care of providing notification to the competent administration(s) of incidents and breaches during work in the vicinity of our infrastructure.
Fluxys Belgium runs a range of initiatives to provide information and raise awareness about how to work safely in the vicinity of its infrastructure. The initiatives focus on everyone involved in such works, such as architects, developers, designers, contractors, owners and operators, municipalities, notaries and emergency services.
• Regular reminders sent out to all owners and operators of land holding Fluxys infrastructure • An information session for municipalities, as well as police forces and emergency services, at least once every municipal council term
• Highlighting working safely in the vicinity of underground infrastructure in trade journals and in various working groups and federations in which Fluxys Belgium is involved
• Providing training for excavator operators and for coating steel pipes
• Holding annual information session for industrial users with gas facilities directly connected to our network
Given the new supply situation in Europe, speed and adaptability are the watchwords for new infrastructure as well. We prepared thoroughly for the first phase in the construction of the Zeebrugge-Opwijk pipeline: the section between Desteldonk and Opwijk. Which will boost our capacity to carry natural gas inland from Zeebrugge. At the same time, the pipeline is an initial step towards speeding up the energy transition as it will be immediately available for hydrogen transport as soon as the market is ready. We will commission the Desteldonk-Opwijk section in late 2023.
The new pipeline will run parallel to the existing natural gas pipeline between Desteldonk and Opwijk, a total length of 44 kilometres. Doubling the pipeline in this way will increase offtake capacity from Zeebrugge by 15 GWh/h, equivalent to the energy generated by 15 nuclear reactors.
With this project, Fluxys is anticipating the growth in LNG regasification capacity at the Zeebrugge terminal to avoid creating a bottleneck further down the network.
As low-calorific natural gas (Lgas) exports from the Netherlands decline, Fluxys Belgium and the transmission system operators in France and Germany are modifying their networks to enable a gradual switch from Lgas to high-calorific natural gas (Hgas) from other sources and so ensure the continuity of the natural gas supply.
In 2022, working with distribution system operators Sibelga, Fluvius and Ores, we converted an impressive 255,000 connections from L-gas to H-gas in the Brussels-Capital Region, thus completing the conversion process there.
This will be followed by the full conversion of Antwerp in 2023 and then the conversion of other areas in Flanders and Wallonia in 2023-2024. After that, L-gas from the Netherlands will only flow southwards through our network towards France, where conversion will probably continue until 2029.
The availability of ICT systems and industrial control systems is vital to the safe and reliable operation of our infrastructure. These systems can malfunction for various reasons. With this in mind, Fluxys Belgium implements technical and organisational measures to ensure the availability of IT systems.
Fluxys Belgium uses an information security management system (ISMS) to take care of structured cyber-security management.
The functioning and maturity of the management aspects of the ISMS are scrutinised at least annually by Internal Audit, using external specialists to this end. In addition, each year we carry out various vulnerability scans of internal systems and the external perimeter. For attack and penetration testing, we call on the services of external ethical hackers.
In 2022, the external audit of the ISMS was launched with a view to its certification according to ISO 27001.
For several systems such as those used to manage natural gas flows on the network, back-up facilities are in place and can be activated as soon as a malfunction occurs, thus ensuring continued operation. These contingencies are periodically tested by means of disaster recovery plan drills.
Our ICT approach also pays special attention to ever-growing cyber threats (attacks, malware, phishing, etc.). The ICT teams take technical measures to act as a barrier against the wide variety of cyber risks. In this context, they call on the external expertise of, for instance, the Centre for Cyber Security Belgium and software suppliers to identify and close new loopholes in the cyber net.
Operational monitoring and detection of data leaks or attacks are performed by, among others, security information and event management (SIEM) and endpoint detection and response (EDR) solutions, which are monitored 24/7 by a security operations centre (SOC). If something does go wrong, our ICT approach focuses on ensuring continuity of service. This is done using scenarios that are practised regularly by the ICT teams.
Fluxys Belgium also focuses on training and awareness raising. In 2022, we ran a wide range of initiatives to teach employees how to deal with phishing emails efficiently and effectively. In addition, there were training courses on detecting and responding to cyber incidents.
With a view to limiting the impact of any incidents, Fluxys Belgium works with a crisis organisation and emergency plans and procedures for its operational and ICT activities. The central dispatching office also plays a coordinating role in the event of an incident or accident, or if someone reports that they can smell gas.
Emergency numbers are available 24/7 for reporting incidents involving, or in the vicinity of, our natural gas transmission infrastructure.
Fluxys Belgium's general emergency plan documents the overarching response method for incidents, and there are also specific emergency plans with the crisis response for the various sites and operational risks.
In the event of an incident, all contacts with internal and external stakeholders are fully documented and, for each stakeholder group, are assigned to specific roles within the crisis organisation.
Emergency planning is covered by Fluxys Belgium's HSE Policy. The members of the crisis organisation receive special training, and we regularly organise emergency-plan drills to ensure that the organisation is responsive.
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Safe and reliable infrastructure | ||||
| Reduction or interruption of firm transmission capacity | 0 | 0 | 0 | 0 |
| Reduction or interruption of interruptible transmission capacity | 0 | 0 | 0 | 0 |
| Damage to infrastructure caused by third parties, resulting in a gas leak or interruption of capacity |
0 | 0 | 0 | 0 |
At Fluxys Belgium, we provide almost a third of the energy used by Belgium's households and businesses. We do this with infrastructure in almost 400 towns, cities and municipalities, and so it is only natural that we want to establish good neighbourly relations.
Poor relations with local residents, municipal authorities and other local stakeholders can have a negative impact on the operation and further development of infrastructure
Through open dialogue, we aim to foster good relations with all those affected by the construction and operation of our facilities. The company also ensures that the construction and operation of its infrastructure cause minimal disruption.
• Policy of community engagement • Initiatives to promote long-term good neighbourly relations
Owners and operators of land have a designated personal point of contact at Fluxys Belgium, from a project's preliminary phase through to the restoration of a site following construction or operation. This allows them to consult with someone familiar with their concerns and the features of their land from the outset. These points of contact are members of a special team tasked with understanding the interests of landowners and operators and defending those interests in their dealings with Fluxys Belgium.
Transparent communication from the project phase onwards. For new infrastructure projects, Fluxys Belgium aims to transparently provide information and communicate with the relevant administrations, the municipal authorities, local residents and other parties involved from the planning phase onwards.
Information sessions. As regards permit applications for major infrastructure projects, Fluxys Belgium contacts municipalities to suggest that we hold an information session for local residents before the permit procedures get under way. This not only gives residents a chance to talk to us about the project and its impact – it also means that we can take on board any feedback right from the start of the project.
During the public consultation stage of permitting processes, we also contact municipal authorities to suggest organising an information session so that local residents can again ask any questions they might have about the project. At the consultation sessions that are part of the permitting processes, complaints and comments about the project are noted and dealt with.
Fluxys Belgium operates on the basis of a rolling programme of local-stakeholder identification: this involves us, in rolling five-year cycles, making a visit to all owners of land having a pipeline running through the subsoil or in the immediate vicinity.
During each municipal council term, we organise an information meeting in every municipality with Fluxys pipelines, for the mayor, the relevant aldermen and representatives of the police and fire brigade.
Fluxys Belgium builds the vast majority of its facilities (pipelines and surface stations) in areas used for agriculture, horticulture or forest management. With long-term good neighbourly relations in mind, we have signed (for agriculture) agreements with the country's three largest agricultural organisations (Boerenbond, Algemeen Boerensyndicaat (ABS) and Fédération Wallonne de l'Agriculture) and for forestry agreements with Hubertus (the Flemish hunting association), Landelijk Vlaanderen and Nature, Terres et Forêts (NTF). These agreements set out the compensation due to those in the agriculture, horticulture or forestry sectors who experience disruption or are temporarily unable to use their land during the construction of a facility. If complaints are made after work is complete, we deal with the reported issues on a case-by-case basis. Farmers have a special Fluxys Belgium point of contact to report damage to agricultural land.
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Our results and success are based on the commitment and talents of our employees. However, we need to future-proof our organisation and employees against the backdrop of a changing industry. With a view to meeting this challenge, we are committed to strategies that allow employees to adapt to the new way of working and make our transformation a success.
We are evolving into an open, self-learning community of interconnected teams with a common, shared goal: to successfully implement our strategy of being the essential infrastructure partner in speeding up the energy transition. All teams work together to transform future challenges into new opportunities.
The inability to attract, retain and futureproof talent in a changing landscape
Our development and training policy focuses on active learning to ensure that employees have the knowledge and skills they require. The training on offer is constantly evolving to keep pace with the company's needs and includes a varied mix of learning/training resources:
Fluxys Belgium applies the bottom-up principle: employees are expected to take charge of their own development and career, with the support of their managers.
In 2022, employees completed almost 37,000 hours of training, a total which is almost back to pre-COVID levels. More than half of the courses provided training in (gas) technology or safety or job-specific training. The other courses mainly focused on soft and digital skills.
Virtual reality (VR) makes training more efficient, safer and more motivational. Wearing VR glasses, you train technical skills in an extremely realistic-looking, lifelike and immersive virtual environment, and learn immediately from mistakes without facing any of the risks. Our pilot training sessions in VR were a success!
We are pressing ahead with the energy transition. We have plenty of ambitious projects for hydrogen and CO2 infrastructure. To let our employees know more about these, we organise inspiring, interactive lunch sessions for all our staff. Internal experts update them on innovative projects and answer their questions, and anyone who cannot be there in person, can use technology to participate remotely.
Through our performance management, development paths and an annual talent review, we want to align the competencies of our employees with what the company needs to grow, innovate and successfully deploy its strategy for the energy transition. In the same vein, we encourage internal job mobility and prioritise in-house candidates when seeking to fill vacancies or new positions. The international development of our parent company Fluxys also provides opportunities for further career development.
Through the performance-management cycle, constructive consultations take place each year at the various levels within the company so that we can translate the corporate goals into personal goals. In the course of the year, these goals are the subject of regular dialogue between employees and their managers. A culture of open feedback is the foundation underlying this dialogue, which is formally supplemented by performance reviews and assessment interviews.
Based on its corporate goals, Fluxys Belgium uses an annual talent review to assess its future staffing needs so that we can see in our workforce planning which competencies are required now and in the future.
As an attractive employer, Fluxys Belgium sets great store by ensuring that employees are familiar with the company context and the challenges that Fluxys Belgium faces, as this fosters personal commitment to the company's vision, strategy and goals. Fluxys Belgium makes special efforts, using a variety of means, to give members of staff a better understanding of the rapid changes going on in the energy sector, how the company is adjusting its goals and strategy to address these developments, and what these goals mean for each individual employee.
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We want what we offer as an employer to be meaningful to employees in exchange for their drive, expertise and competencies. Our purpose shows what we stand for as a company so that the perfect match is found between us and prospective employees.
To ensure the effective onboarding of new colleagues, we launched a shorter recruitment process and an innovative integration programme in 2022, including a new onboarding app and Meet & Greet sessions to promote involvement and interaction as much as possible.
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Members of staff | 909 | 884 | 876 | 868 |
| Women | 153 | 157 | 155 | 154 |
| Men | 756 | 727 | 721 | 714 |
| Ratio of women/men | 17/83 | 18/82 | 18/82 | 18/82 |
| Full-time | 784 | 773 | 754 | 746 |
| Part-time | 125 | 111 | 122 | 122 |
| Ratio of full-time/part-time staff members | 86/14 | 87/13 | 86/14 | 86/14 |
| Open-ended contract | 894 | 866 | 857 | 844 |
| Fixed-term contract | 15 | 18 | 19 | 24 |
| Ratio of open-ended/fixed-term contracts | 98/2 | 98/2 | 98/2 | 97/3 |
| Internal mobility | 58 | 71 | 69 | 70 |
| Incoming employees | 81 | 63 | 59 | 63 |
| Outgoing employees (including those leaving due to their contract coming to an end or due to retirement) |
62 | 62 | 58 | 56 |
| Ratio of outgoing employees | 5,0% | 3,2% | 3,3% | 3,7% |
| Average number of training days* per full-time equivalent (FTE) | 5.64 | 3.72* | 3.42* | 6 |
* The number of training days in 2020 and 2021 was affected by COVID- restrictions.
The staff data are based on the active workforce of Fluxys Belgium and Fluxys LNG and do not include non-active employees (e.g. those on long-term sick leave). Unless otherwise stated, the statistics refer to the number of employees and not the number of FTEs.
A warm welcome makes all the difference. That is why we want new employees to feel at home as soon as possible, get to know their colleagues and immediately sense an affinity with the company. To that end, we launched the Meet & Greet: a day-long event where new employees can learn more about the company and get to know each other in a laid-back atmosphere. Looking forward to the next one!
Creativity, resilience, effective communication, emotional intelligence – all of these are soft skills that keep employees agile and help build a culture where everyone feels at home. We are going all in on these. A single click of the mouse takes members of staff to our online library, with e-books and podcasts about communication, mindfulness, creativity and adaptability, allowing them to engage in learning, listening and reading wherever and whenever they want.
Healthy and involved employees who find pleasure and satisfaction in their work are the driving force that makes the company speed up and stand out. That is why we invest in supporting the safety, health and well-being of our employees. This approach is a central pillar of our Health, Safety and Environment Policy.
| Measures |
|---|
| • An active Health, Safety and Environment Policy |
| • Consultation within various consultation bodies |
| • Global Prevention Plan |
| • Absenteeism policy |
| • External support available |
Fluxys Belgium is home to various bodies that discuss and promote the health, safety and well-being of employees and contractors.
The IDPBW/SIPPT organises the policy on well-being and prevention and collaborates with the employer on ensuring a healthy and safe working environment. It monitors the proper implementation of well-being legislation, the health and safety policy and the legal obligations regarding personal safety.
Meeting every month, the CPPW is a consultation body between employees, the employer and management where they can discuss issues and problems relating to employee well-being. The committee makes proposals concerning, among other aspects, the policy for preventing accidents, incidents and occupational illnesses, the Global Prevention Plan and the annual action plan.
Furthermore, the CPPW regularly inspects Fluxys Belgium's staffed facilities and takes part in analyses of serious accidents and incidents. Within the CPPW, ad hoc working groups examine specific topics, such as work clothing.
The Local Joint Consultation Committee is a body for consultation between trade union and employer representatives. It keeps an eye on events at local level and proposes solutions that do not fall within the exclusive remit of other consultation bodies.
Collective bargaining agreement CAO/CCT 90 provides financial incentives for employees to achieve specific collective health and well-being objectives and to cut Fluxys Belgium's greenhouse-gas emissions, for example.
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The 2022-2026 Global Prevention Plan (GPP) focuses on occupational and process safety as well as the prevention of psychosocial risks and on well-being, health, travel and traffic safety. One of the pillars of the plan is to further strengthen the safety culture across the organisation and a multi-year action plan will be launched in 2023 to this end.
The GPP also pays particular attention to involvement in the new, hybrid way of working. In addition, the company is committed to lifelong learning, especially with regard to using our infrastructure to transport other molecules, such as hydrogen and CO2.
Measuring and following up on absenteeism gives us an objective view of employees' general health. The level of absenteeism increased in 2022 partly due to the flu epidemic at the end of the year but is still below the market average for Belgium. 36% of employees did not take sick leave in 2022.
As part of our absenteeism policy, we actively endeavour to support employees during their illness, in the runup to their return and after they resume work. Employees have access to personal guidance and support in this regard. The support is based on regular contact and cooperation between the employee involved, their manager, Human Resources and the internal and external services for prevention and protection at work. In 2022, special attention was paid to communication about returning after a long period of illness, including testimonials from colleagues and an e-learning module developed to ensure a successful return to work.
The new ways of working, involving working from home and all kinds of hybrid collaboration, are giving the office a new function, as not only a workplace but also a meeting place. With our Work@Fluxys initiative, we give working in the office a new dimension. A real process of change is under way, with the head office in Brussels being refurbished. The main thrust of the message conveyed by this is that we are one big team and together we make Fluxys the essential infrastructure partner in speeding up the energy transition.
In 2022, (gas-related) technical, safety and job-specific training accounted for more than half of the total number of hours of training completed.
Fluxys Belgium uses various e-learning platforms to periodically remind its own and contractors' employees about the general and specific safety rules. Every employee of a contractor scheduled to work at a Fluxys project site or facility must complete a training module and demonstrate that they are familiar with our safety rules.
In 2022, special attention was also paid to ergonomics for screen work, with targeted information on ways to make workspace adjustments in the office or at home. Ergonomists from Attentia, our external provider of workplace prevention and protection services, provided around 40 theory-based group sessions. They also gave individual tips and advice on screen work to around 130 employees.
In late 2021, we conducted a company-wide survey about the involvement, well-being and work experience of our employees. 87% of staff took part. The survey revealed that 76% of respondents feel involved or very involved and 90% enjoy their work. However, workload appears to be an area of concern.
In 2022, all our teams joined forces with the social partners to work on these findings, resulting in the rollout of various actions in three areas:
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Incapacity for work among staff | ||||
| Occupational accidents resulting in more than one day's incapacity for work |
10 | 11 | 9 | 15 |
| Frequency (number of occupational accidents x 1,000,000 divided by the total number of hours worked) |
7.2 | 7.8 | 6.4 | 11 |
| Severity (number of days' absence x 1,000 divided by the total number of hours worked) |
0.12 | 0.22 | 0.15 | 0.12 |
| Fatal occupational accidents | 0 | 0 | 0 | 0 |
| Incapacity for work among contractors | ||||
| Occupational accidents resulting in more than one day's incapacity for work |
5 | 6 | 6 | 10 |
Despite all measures and an open safety culture, there remains a residual risk of incomplete accident reporting, depending on the information provided by an employee involved in a workplace accident.
This image is part of the design phase. It is indicative.
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Taking part in sporting activities with colleagues at lunchtime or after work is not only a pleasant thing to do – it also fosters team spirit and boosts motivation. That is why we launched Connect & Move, an initiative encouraging colleagues to exercise together, put together teams and take part in sporting events. This has reaped rewards, with 120 colleagues going for it at 16 events across Belgium!
On 2 June, the time had come. After so many months of the Covid pandemic, we could all physically get together again for the first time. Looking back together, looking forward together and, above all, having that nice corporeal group feeling again under the summer sun!
Good industrial relations are vital for company cohesion and business development, which is why Fluxys Belgium engages in transparent, constructive social dialogue with all employees, members of the works council, the Committee for Prevention and Protection at Work, the trade union delegation and executive representatives.
Risk of insufficient social dialogue and consultation that may lead to social conflicts
Risk Measures
at work, local joint consultation • Collective agreements
• Social consultation: works council, committee for prevention and protection
In 2022, Fluxys Belgium, working with the various partners around the table, embarked on and successfully completed an update of the work regulations, which met with unanimous approval.
Wage and working conditions are regulated for all staff by collective agreement through consultation and negotiation.
• 65% of Fluxys Belgium's staff are baremised employees. Their wage and working conditions are partly negotiated at sectoral level through Collective Labour Agreements; in addition, certain wage and working conditions are also determined at company level and negotiated with local employee representatives. • 35% of staff members are executives. Their wage and working conditions are negotiated at company level between Fluxys Belgium and the representation of the executives in an Annual Framework Agreement.
Fluxys Belgium encourages diversity without using positive discrimination quotas. Our HR policy is based on individual competencies. Openness to other realities, other people's ideas and individual differences is a basic requirement expected of every employee and screened as a standard part of the selection process.
| Risk | Controls and measures |
|---|---|
| A lack of diversity in the workforce can lead to a business organisation that lacks the necessary skills, talents and experience |
• Equal opportunities policies that encourage diversity by promoting fairness, merit, personal development, work-life balance and shared responsibility |
Fluxys Belgium uses its Employer Branding communications to target diverse, complementary profiles so that candidates with different backgrounds, views or preferences feel welcome.
As regards diversity on the Fluxys Belgium Management Board, the Gas Act (Article 8/3) stipulates that at least one third of those on the Board of Directors must not be the same sex as the other members.
Fluxys Belgium devotes considerable attention to diversity in terms of experience. This approach translates, for example, into the continuous recruitment of young people with no or very limited work experience (job starters).
We welcomed 81 new employees in 2022, 13 of whom had limited work experience or faced a lack of opportunities on the labour market.
The criteria used for employee remuneration, evaluation, career development, training and the work-life balance are identical for men and women. The difference in the average basic salary between men and women is due to the fact that the composition of both categories differs with regard to seniority, type of role and the division between old and new salary conditions.
| 2021 | 2020 | 2019 | 2018 | |
|---|---|---|---|---|
| Total | 909 | 884 | 876 | 868 |
| Incoming employees | ||||
| < 30 years | 42% | 54% | 49% | 40% |
| 30-50 years | 53% | 41% | 44% | 51% |
| > 50 years | 5% | 5% | 7% | 9% |
| Men | 74% | 75% | 69% | 68% |
| Women | 26% | 25% | 31% | 32% |
| Outgoing employees (not including planned outflows from end-of-contracts and retirements) |
||||
| < 30 years | 35% | 32% | 28% | 28% |
| 30-50 years | 56% | 61% | 62% | 56% |
| > 50 years | 9% | 7% | 10% | 16% |
| Men | 60% | 79% | 83% | 69% |
| Women | 40% | 21% | 17% | 31% |
| Executives | ||||
| < 30 years | 11% | 10% | 9% | 6% |
| 30-50 years | 58% | 55% | 57% | 63% |
| > 50 years | 31% | 35% | 34% | 31% |
| Men | 86% | 85% | 87% | 86% |
| Women | 14% | 15% | 13% | 14% |
| Salaried staff members | ||||
| < 30 years | 7% | 8% | 6% | 7% |
| 30-50 years | 48% | 46% | 49% | 52% |
| > 50 years | 45% | 46% | 45% | 41% |
| Men | 82% | 81% | 80% | 81% |
| Women | 18% | 19% | 20% | 19% |
| Management | ||||
| < 30 years | 0% | 0% | 0% | 0% |
| 30-50 years | 39% | 25% | 39% | 50% |
| > 50 years | 61% | 75% | 61% | 50% |
| Men | 90% | 89% | 89% | 89% |
| Women | 10% | 11% | 11% | 11% |
| Board of Directors | ||||
| < 30 years | 0% | 0% | 0% | 0% |
| 30-50 years | 29% | 25% | 18% | 18% |
| > 50 years | 71% | 75% | 82% | 82% |
| Men | 62% | 65% | 68% | 68% |
| Women | 38% | 35% | 32% | 32% |
| Average basic salary ratio (based on full-time equivalents) |
||||
| Men | 100% | 100% | 100% | 100% |
| Women | 92% | 91% | 93% | 91% |
The staff data are based on the active workforce of Fluxys Belgium and Fluxys LNG and do not include non-active employees (e.g. those on long-term sick leave). Unless otherwise stated, the statistics refer to the number of employees and not the number of FTEs.
For us, our customers are central. Our transmission, storage and LNG terminalling services are regulated, and we open up our infrastructure to all market players on a level playing field. We treat all customers on an equal footing, and our policy, operating within the parameters of the regulatory framework for our activities, aims to develop long-term relationships with customers and respond as effectively as possible to their needs and expectations.
| Risks | Measures |
|---|---|
| Discriminatory treatment of customers, | • Commercial contact point |
| lack of transparency in information sharing | • Complaints point of contact |
| can lead to market abuse and claims | • Development of services within a strict regulatory framework • Information and market consultation • Monitoring by the regulator |
In line with the regulatory framework, Fluxys Belgium's service offering is completely transparent. Existing and potential customers can find our range of services, rates and all related information and documentation,
Our sales team is the point of contact for customers and prospects. They are on hand to help you make the best possible use of our services and book capacity. At the
The geopolitical situation in Ukraine has profoundly changed the dynamics on the gas markets and the direction of flows in Europe. Throughout 2022, the members of our sales team left no stone unturned in such as the relevant standard contracts, on our website. At the same time, we are constantly working on improvements to make booking capacity as simple and user-friendly as possible.
same time, they keep a close eye on customer expectations for new services or updates to the offering.
their efforts to offer customers as much capacity as possible in the interests of security of supply (see the As much capacity as possible to maximise security of supply section, page 50).
When adapting existing services, developing new services, new tariff proposals or proposals to amend contractual documents, Fluxys Belgium always conducts a market consultation in accordance with the regulatory framework. Only after this consultation can the documents be submitted to the regulator, CREG, for approval.
Fluxys Belgium holds annual information moments for each customer group to addressing topics that regularly come up in day-to-day contact with the sales team.
The supervisory authority for Fluxys Belgium's regulated activities is the federal regulator, the Commission for Electricity and Gas Regulation (CREG). In line with the regulatory framework,
Fluxys Belgium has appointed a compliance officer in the framework of its commitments regarding non-discriminatory access to the network.
A compliance programme has been set up with the specific details of the rules of conduct that members of staff must comply with in terms of non-discrimination,
Customers and other market players who want to complain about our services can contact our key account managers, the Fluxys Belgium compliance officer or the regulator CREG.
transparency and handling of confidential information. The Board of Directors and management approved the compliance programme. The annual Compliance Report, covering how we have done in meeting our obligations under the compliance programme, can be found on the Fluxys Belgium website.
More information about the legal and regulatory framework and the code of conduct is given in the Legal and regulatory framework section (page 38).
120 Contents Looking to the future Our profile Financial resilience Digitalisation Governance Corporate Governance Declaration Financial situation 121
Fluxys Belgium operates in Belgium and therefore our approach to human rights violations is enshrined in the company's policy on business ethics, diversity, and health, safety and well-being at work. Our approach also focuses on the supply chain.
| Risk | Measures |
|---|---|
| Violation of human rights having a negative impact on the company's business |
• Staff: provisions in our Ethical Code, work regulations, collective bargaining |
| reputation and/or financial results | agreements and specific procedures • Suppliers: human rights provisions included in the terms and conditions of purchase |
Given the Belgian scope of our activities, our initiatives on respecting human rights are for the most part set out in our approach in three other domains.
The Health, Safety and Well-being at Work domain covers the following human rights:
Fluxys Belgium's General Terms and Conditions of Purchase for suppliers impose various human rights obligations on contractors, including:
offered to employees in 2022 (see page 123). The right to equal opportunities and zero tolerance
A wide range of training courses on these topics was
for discrimination fall within the Diversity and inclusion domain (see page 118). The Ethical Code (see page 127) covers both the pro-
tection of human rights in the workplace and human rights in the local communities where we operate.
minimum-wage requirements for employees, the payment of wages and respect for the environment and environmental protection; • the requirement to refrain from employing foreign workers who are illegally resident in Belgium.
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Complaints about violations of human rights | 0 | 0 | 0 | 0 |
| Number of training courses on human rights completed | ||||
| Number of training hours completed | 1,328** | 459 | 554 | * |
| Share in the total number of training hours completed | 3.6%** | 1.9% | 2.4% | * |
* Not registered
** All training initiatives (trainings, coaching, e-learnings) that contribute to increasing the well-being of employees indirectly contribute to human rights. Indeed, those initiatives ensure that the importance of treating people with respect is propagated as a basis within the company. We saw a significant increase in the number of coaching hours in 2022 after Corona, including through the new summer coaching for a wider target audience, and a substantial increase in the number of team tracks.
122 Contents Looking to the future Our profile Financial resilience Digitalisation Governance Corporate Governance Declaration Financial situation 123
Further developing the formal procedures for whistleblowing and protecting whistleblowers
Updating our internal guidelines on the use of social media to ensure that the social interactions there are as beneficial as possible
0 Complaints about fraud or reports of unethical conduct (2021: 0)
Governance
Fluxys Belgium's anti-corruption policy is set out in the company's Ethical Code, which ensures that we offer employees a safe and respectful work environment, maintain high standards in terms of human rights and make a commitment to conducting business ethically by being responsible in dealings with our business partners.
suppliers, agents, consultants, etc. adhere to anti-bribery rules • Specific internal checks followed up at least every two years by internal audit
The new Ethical Code came into force in 2021 and was widely distributed in-house and externally. The Code covers a wide range of areas: a safe and respectful working environment, responsible interactions with business partners, human rights, anti-bribery and general principles on how the company competes. The Code also expects customers, suppliers and other partners to comply with equivalent standards. As part of the Ethical Code, various workshops were organised for staff in 2022.
Our employees can contact their manager or the Ethics & Compliance team for advice on problematic situations or to report a (potential) breach of the ethical rules.
Employees, customers, suppliers and partners can also email [email protected] to report a (potential) breach in complete confidentiality.
In accordance with its Ethical Code and the relevant EU directive, Fluxys Belgium further developed the formal procedures for whistleblowing and protecting whistleblowers. The procedure will be rolled out in 2023.
Fluxys Belgium's General Terms and Conditions of Purchase for suppliers impose various anti-corruption obligations on contractors, including:
• Not being allowed to engage in or tolerate practices such as private or public corruption. • Being required to demonstrate integrity to their employees
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Efforts to combat corruption | ||||
| Complaints about fraud or reports of unethical conduct | 0 | 0 | 0 | 0 |
| Number of instances of legal proceedings concerning anti competitive behaviour or failure to comply with competition law |
0 | 0 | 0 | 0 |
The responsible, secure handling of data is of vital importance to the company and its employees and everyone has a role to play in this regard. As such, Fluxys Belgium works with a circumstantial framework on data protection, including the requirements of the EU's General Data Protection Regulation (GDPR) and general privacy regulations.
non-compliance with data protection regulations
Our approach to data security and privacy is contained in our cybersecurity management: see "Additional focus on cybersecurity and ICT systems", page 102
In 2022, Fluxys Belgium updated the guidelines for staff on the use of social media and communicated them extensively within the company. With the updated guidelines, we are seeking a balance between every employee's freedom of speech and right to privacy, the added value provided by interacting on social media and the protection of the company from illegal or inappropriate social-media use.
Fluxys Belgium | Regulated information | Integrated Annual Report 2022 | Corporate Governance Declaration
Good governance is paramount. We make a fundamental contribution to the energy and climate solutions society needs. With infrastructure that serves around the clock as an essential link in the ecosystem. We tackle this as one team: in the field, in the office, in the board room. Reliable, in all transparency and every one of us with its own expertise.
Fluxys Belgium has adopted the 2020 Belgian Code on Corporate Governance (the 2020 Code) as its benchmark code of conduct. The main principles are set out in its Articles of Association and its Corporate Governance Charter. Fluxys Belgium is also subject to legislation on corporate governance contained in the Act of 12 April 1965 on the transmission of gaseous and other products via pipeline, as subsequently amended (the Gas Act), and European Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (the Directive). Details of the legislation applied by Fluxys Belgium can be found online:
In line with the principle of transparency, Fluxys Belgium indicates in this section of its annual report the parts of the 2020 Code with which the company does not comply and the justified reasons for this:
At the Annual General Meeting on 10 May 2022, Abdellah Achaoui, who was co-opted by the Board of Directors on 30 March 2022, was permanently appointed as a director for a term of office expiring at the end of the 2027 Annual General Meeting.
The same Annual General Meeting also decided to permanently appoint Cécile Flandre, who was co-opted by the Board of Directors on 30 March 2022, as an independent director to replace Laurence Bovy following her resignation. This term of office will expire at the end of the 2025 Annual General Meeting.
Finally, the Annal General Meeting appointed Leen Dierick and Gianni Infanti as directors, replacing Jos Ansoms and Renaud Moens respectively, for a six-year term of office that will expire at the end of the 2028 Annual General Meeting.
Wim Vermeir was co-opted by the Board of Directors with effect from 21 February 2023 to replace Patrick Côté, following his resignation on that same date, for a term of office expiring at the end of the 2028 Annual General Meeting. The next Annual General Meeting will have to decide on his permanent appointment.
The procedure for new appointments by the Appointment and Remuneration Committee and the Corporate Governance Committee was complied with.
Fluxys Belgium's Articles of Association and Corporate Governance Charter were amended on 10 May 2022 to remove the Strategic Advice Committee as a governing body.
Directors are appointed by the General Meeting for no more than six years and can be dismissed by this body.
Article 10 of the Articles of Association stipulates that the company shall be managed by a Board of Directors comprising non-executive directors (except for the director charged with the day-to-day management of the company), who are appointed for a maximum term of six years and may be dismissed by the General Meeting. The directorships of outgoing directors who have not been re-elected shall expire immediately after the Annual General Meeting. In the event that one or more directorships fall vacant, the remaining directors may, by a simple majority of votes, temporarily fill the vacancy. In such cases, the General Meeting shall make the permanent appointment or appointments at its first meeting thereafter. If a directorship becomes vacant before the end of the term, the replacement director appointed shall serve out the rest of the term in question.
The company's Articles of Association may be amended by the Annual General Meeting; any amendments made must be published in the Belgian Official Gazette. Deliberation and decisions regarding amendments to the Articles of Association are only valid if at least half of the group's share capital is represented at the General Meeting. No amendment shall be permitted unless it is passed by three quarters of the votes.
Article 10 of the company's Articles of Association stipulates that the Board of Directors shall comprise no fewer than three and no more than 24 non-executive directors, excluding one or more federal government representatives.
Principle 3.2 of the 2020 Code recommends that the Board should be small enough for efficient decision-making. It should also be large enough for its Board members to contribute experience and knowledge from their different fields and for changes to the Board's composition to be managed without undue disruption. The size of the Fluxys Belgium Board of Directors is justified in light of the technical, financial and legal particularity and complexity of the tasks and responsibilities entrusted to the natural gas system operator and the diversity of interests involved.
In order to comply with the provisions of the Gas Act, at least one third of directors must be independent within the meaning of the Gas Act. They are chosen partly on the basis of their financial management skills and partly for their useful technical knowledge and in particular their relevant knowledge of the energy sector. Independent directors within the meaning of the Gas Act must meet, among other things, the independence criteria of the 2020 Belgian Code on Corporate Governance. One third of directors must be of a different gender from the other two thirds.
At least half of the directors must be fluent in French and half in Dutch.
In addition, the golden share grants the federal Energy Minister the right to appoint two representatives of the federal government to the Board of Directors.
Directors of the company may not simultaneously be members of the supervisory board, board of directors or bodies legally representing the undertaking, of an undertaking active in the production or supply of natural gas and may not exercise any rights over such an undertaking.
Daniël Termont, Director, Chairman of the Board of Directors
Daniël Termont is a member of the Board of Directors of Publigas. He was appointed as director in May 1998 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2027.
Claude Grégoire, Director, Vice-Chairman of the Board of Directors
Claude Grégoire is a qualified civil engineer. He was appointed as director in October 1994 following his nomination by Publigas and tendered his resignation with effect from 9 May 2023.
Pascal De Buck studied law, specialising in economic law, before completing several management training courses, including at the Flemish School of Higher Education in Economics (VLEKHO) and EHSAL Management School (EMS) in Brussels and the IESE Business School's international Global CEO Program. After joining Fluxys as a Legal Counsel in 1995, he became head of the Legal and Commercial departments before taking on the role of Commercial Director, where he was responsible for business development and strategy. Pascal was appointed CEO and Chairman of the Executive Board of Fluxys Belgium on 1 January 2015. He became Managing Director of Fluxys Belgium in May 2020 and his term of office as director will expire at the Annual General Meeting in May 2026.
Abdellah Achaoui speaks several languages and has a degree in finance. He is management manager at VIVAQUA. He is on political leave and serving as an alderman in the Brussels municipality of Molenbeek. He is Chairman of the Board of Directors of Interfin and a member of the Boards of Directors of Sibelga and Publigas. He has held financial positions in various sectors, both private and public. He was co-opted as director by the Board of Directors with effect from 30 March 2022 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2027.
Jos Ansoms holds a degree in political and social sciences from KU Leuven. He has been Chairman of Intermixt, Iveka and IGEAN and Vice-Chairman of Eandis, among other roles. For 23 years he was a member of the lower house of the Belgian federal parliament, the House of Representatives, during which time he for example chaired the Business and Energy Committee. He was appointed as director in May 2016 following his
nomination by Publigas, and his term of office expired after the Annual General Meeting in May 2022.
Laurent Coppens holds a Master of Business Administration from the University of Liège and completed specialised courses in Management Accounting & Control at Maastricht University before working as an assistant and researcher in finance. He is CFO of Sibelga and Interfin and Financial Officer at Publigas and Publi-T. He was appointed as director with effect from 1 July 2021 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2027.
Patrick Côté, Director (until 21 February 2023) Patrick Côté is Managing Director, Infrastructure at Caisse de dépôt et placement du Québec (CDPQ). He has 15 years' experience in the infrastructure sector, having joined CDPQ in 2006. Before that, he held various corporate finance positions in large companies, including Ivanhoé Cambridge, CDPQ's real estate subsidiary. He also sits on the Board of Directors of Velto Renewables and Akiem. Patrick graduated from HEC Montréal with a business degree, specialising in finance, and a qualification as a Chartered Professional Accountant (CPA). He was co-opted as director by the Board of Directors with effect from 1 January 2017 following his nomination by CDPQ. He tendered his resignation with effect from 21 February 2023.
Leen Dierick studied business administration, marketing and logistics at EHSAL in Brussels and has subsequently held various positions at DOMO NV. She has served as a Dendermonde municipal councillor since 2001 and as a Member of the Federal Parliament for CD&V since 2007. In the Chamber she is a permanent member of both the Parliamentary Committees for Economy & Energy and the subcommittee for Nuclear Safety. She was appointed as director in May 2022 following her nomination by Publigas and her current term of office will expire at the Annual General Meeting in May 2028.
Andries Gryffroy is a qualified industrial electromechanical engineer and holds a Master's degree in marketing. He took a number of additional training courses in the energy sector and worked in a range of positions in that sector. He is a consultant in technology and energy. He is also the Chairman of Publigas, a member of the Flemish Parliament and a federated entity senator. He was appointed as director in May 2015 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2027.
Gianni Infanti, Director (since 10 May 2022)
Gianni Infanti holds a Master's degree in management sciences at UCL Mons. He is an adviser to the office of Minister Christie Morreale. He was appointed director in May 2022 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2028.
Ludo Kelchtermans holds a degree in economics and is CEO of Nutsbedrijven Houdstermaatschappij (Nuhma). He is a director at several companies and chairman of Aspiravi's audit committee. He was appointed as director in June 2012 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2026.
Renaud Moens, Director and Chairman of the Appointment and Remuneration Committee (until 10 May 2022) Renaud Moens has a degree in business from ULB's Solvay Business School. He is the General Manager of the intermunicipal company IGRETEC and a director at Publigas, Sambrinvest, Sonaca and SOCOFE. He was co-opted as director by the Board of Directors with effect from 24 September 2014 following his nomination by Publigas and his term of office expired at the Annual General Meeting in May 2022.
Josly Piette holds degrees in industrial sociology and economic and social sciences. He is Honorary General Secretary of the Confédération des Syndicats Chrétiens (Confederation of Christian Trade Unions) and a director at SOCOFE and Publigas. He was appointed as director in June 2009 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2026.
Koen Van den Heuvel holds a degree in economics and political science. As a member of Puurs Municipal Council since 1989, for five years he served as the Alderman for Youth, Culture and Finance. In 1997, he became Mayor of Puurs, and since 2019 he has been the mayor of the merged municipality of Puurs-Sint-Amands. Since 2004, he has been a member of the Flemish Parliament, leading his parliamentary group there from 2012 to 2019. In 2019, he was the Flemish Minister for the Environment, Nature and Agriculture. He was co-opted as director by the Board of Directors with effect from 1 December 2019 following his nomination by Publigas and his current term of office will expire at the Annual General Meeting in May 2025.
Wim Vermeir, Director (since 21 February 2023) Wim Vermeir has a degree in engineering physics from Ghent University and holds an MBA from Vlerick School of Management. He started his career at Ghent University and Vlerick School of Management as a research assistant in corporate finance. Between 1995 and 2006, he held various positions at Dexia Asset Management and in 2006 he was appointed Chief Investment Officer for Traditional Investments and member of the Executive Board of Dexia Asset Management. He has been Chief Investment Officer of AG Insurance since April 2011 and also Group Head of Investments for Ageas since June 2012. He was co-opted as director by the Board of Directors with effect from 21 February 2023 following his nomination by AG Insurance. The Annual General Meeting of 9 May 2023 will have to decide on his permanent appointment.
Geert Versnick has a law degree from Ghent University. He has also participated in study programmes from GUBERNA, the International Institute for Management Development (IMD) and INSEAD. He was a lawyer at the Ghent Bar from 1980 until 2000 and active in politics from 1989 to 2017. He holds a number of directorships in both the private and public sectors. He was appointed as director in May 2018, with effect from 3 October 2018, following his nomination by Publigas, and his current term of office will expire at the Annual General Meeting in May 2024.
Sabine Colson, independent director, Chairman of the Corporate Governance Committee
Sabine Colson has a degree in business and finance from HEC Liège. She completed a GUBERNA Certified Director course and holds a university certificate in innovation management from UCLouvain. She coordinates the BU WE Transmission at Wallonie Entreprendre. She was co-opted as independent director with effect from 1 October 2018 on proposal of the Board of Directors and following the recommendation of the relevant advisory committees, and her current term of office will expire at the Annual General Meeting in May 2024.
Valentine Delwart holds a degree in law and a Master's degree in European law. She is Alderwoman for Finance in Uccle and has been General Secretary of the French-speaking liberal party Mouvement Réformateur since March 2011. She was appointed as independent director in May 2013 on proposal of the Board of Directors and following the recommendation of the relevant advisory committees, and her current term of office will expire at the Annual General Meeting in May 2025.
Cécile Flandre, independent director (since 30 March 2022)
Cécile Flandre holds a degree in mathematics and actuarial science from the Université Libre de Bruxelles (ULB). For nine years she served as CFO and executive director at two insurance companies, Belfius Insurance and later Ethias. She has many years of experience in the insurance sector, including its supervision, and in financial matters. She is a director of Elia Transmission Belgium, Elia Asset and Elia Group and an independent director of MS Amlin Insurance S.E., where she chairs the Audit Committee. She has been a member or chair of the boards of directors and audit committees of several companies. She was co-opted as independent director with effect from 30 March 2022 on proposal of the Board of Directors and following the recommendation of the relevant advisory committees, and her current term of office will expire at the Annual General Meeting in May 2025.
Sandra Gobert obtained a Master's degree in law from the Vrije Universiteit Brussel (VUB). She has been a lawyer at the Brussels Bar since 1992 and is a partner at Sub Rosa Legal. After a specialisation and internship in tax law, she built up her expertise in corporate law and corporate governance. She has been a GUBERNA Certified Director since 2010 and has held directorships in various sectors (distribution and retail, legal, real estate and energy). She completed the Chapter Zero "Director Climate Journey" in 2021. In early 2019, she was appointed Executive Director of GUBERNA (Institute of Directors), where she has been a member of the Board of Directors since 2016. She is a member of the Belgian Corporate Governance Committee, a member of the Board of Directors of ecoDa (European Confederation of Directors' Associations) and chair of the ecoDa Working Group on Sustainability and of the Remuneration and Nomination Committee. She is a member of the ESG Exchange Advisory Committee. She was appointed as independent director in May 2019 on proposal of the Board of Directors and following the recommendation of the relevant advisory committees, and her current term of office will expire at the Annual General Meeting in May 2025.
Roberte Kesteman holds a Master's degree in Applied Economics from VLEKHO. She also studied International Corporate Finance at INSEAD in France. She is Senior Advisor at First Sentier Investors International, an independent director at Elia Transmission Belgium, Elia Asset and Elia Group, as well as a member of the Audit Committee, Remuneration Committee and Corpo-
rate Governance Committee. Since 4 May 2022, she is independent director, member of the Audit Committee and member of the Remuneration, Nomination and Corporate Governance Committee at Aperam SA. She was co-opted as independent director with effect from 1 July 2019 on proposal of the Board of Directors and following the recommendation of the relevant advisory committees, and her current term of office will expire at the Annual General Meeting in May 2023.
Anne Leclercq holds a Master's degree in law and an MBA from Vlerick Business School. Many years working in both the banking sector and as Director of Treasury and Capital Markets at the Belgian Debt Agency (the agency in charge of the operational management of the debt of the Belgian federal government) have provided her with a wealth of financial expertise and management experience. Until mid-2019, Anne chaired a sub-committee of the European Union's Economic and Financial Committee comprising debt managers from the various EU Member States. She is a director at BNP Paribas Fortis, where she also chairs the Risk Committee, WDP (Warehouses De Pauw) and Sint-Maria Halle General Hospital. Until the end of December 2022, she was a director and chair of the Audit Committee of KULeuven/UZ Leuven. She was appointed as independent director in May 2018 on proposal of the Board of Directors and following the recommendation of the relevant advisory committees, and her current term of office will expire at the Annual General Meeting in May 2024.
Sandra Wauters holds a PhD in chemical engineering from Ghent University. She is Carbon Management Programme Manager at BASF Antwerp, where she is responsible for business development and coordination on climate-neutral growth. She was appointed as independent director in May 2013 on proposal of the Board of Directors and following the recommendation of the relevant advisory committees, and her current term of office will expire at the Annual General Meeting in May 2025.
Messrs Maxime Saliez and Tom Vanden Borre were appointed as per the Royal Decree of 31 January 2021 as representatives of the federal government in an advisory capacity for the French- and Dutch-speaking roles respectively. This Royal Decree entered into force on the date of its publication in the Belgian Official Gazette, namely 8 February 2021.4
Maxime Saliez has a degree in civil and electromechanical engineering and is an adviser to the Federal Minister of Energy. Tom Vanden Borre holds a PhD in law and serves as Head of the Private Office of the Federal Minister of Energy.
Federal government representatives have special powers as stipulated in the Acts of 26 June 2002 and 29 April 1999 and the Royal Decrees of 16 June 1994 and 5 December 2000, as set out in Article 12 of the Articles of Association and in the Corporate Governance Charter.
They attend meetings of the Board of Directors in an advisory capacity.
Nicolas Daubies, Dpt. Director Group General Counsel & Company Secretary, acts as secretary to the Board of Directors.
The members of the Board of Directors seek to adopt decisions by consensus. The Board mainly addressed the following issues:
projects linked to the energy transition, especially those involving biomethane and the transmission of hydrogen and CO2, including
Royal Decree of 31 January 2021 on the dismissal and appointment of federal government auditors to the Boards of Directors of the relevant operators, as provided for in Article 8/3(1/3) of the Act of 12 April 1965 concerning the transmission of gaseous and other products by pipeline (published in the Belgian Official Gazette on 8 February 2021).
the framework of the economic recovery plan (also covered in a separate expert session);
• Changes in the legal and regulatory framework; • Progress of disputes and legal action brought in order to safeguard the company's interests;
The Board of Directors may only deliberate and adopt decisions when at least half of the directors are either present or represented. Decisions made by the Board of Directors are taken by a simple majority of votes cast by directors present or represented. In 2022, the Board of Directors took all of its decisions by unanimous vote of the directors present or represented.
The Board of Directors met 9 times in ordinary meetings in 2022 and made one decision by unanimous written agreement of the directors, in accordance with its Articles of Association. The director attendance at Board of Directors' meetings in 2022 was as follows:
| Attendance | |
|---|---|
| Daniël Termont | 9 out of 9 meetings |
| Claude Grégoire | 7 out of 9 meetings |
| Pascal De Buck | 9 out of 9 meetings |
| Abdellah Achaoui | 6 out of 7 meetings |
| Jos Ansoms | 4 out of 4 meetings |
| Sabine Colson | 9 out of 9 meetings |
| Laurent Coppens | 8 out of 9 meetings |
| Patrick Côté | 9 out of 9 meetings |
| Valentine Delwart | 9 out of 9 meetings |
| Leen Dierick | 5 out of 5 meetings |
| Cécile Flandre | 6 out of 7 meetings |
| Sandra Gobert | 9 out of 9 meetings |
| Andries Gryffroy | 8 out of 9 meetings |
| Gianni Infanti | 5 out of 5 meetings |
| Ludo Kelchtermans | 9 out of 9 meetings |
| Roberte Kesteman | 9 out of 9 meetings |
| Anne Leclercq | 8 out of 9 meetings |
| Renaud Moens | 3 out of 4 meetings |
| Josly Piette | 9 out of 9 meetings |
| Koen Van den Heuvel | 9 out of 9 meetings |
| Geert Versnick | 7 out of 9 meetings |
| Sandra Wauters | 9 out of 9 meetings |
Following the introduction of the 2020 Belgian Code on Corporate Governance, Fluxys Belgium reviewed the operation of its Board of Directors' advisory committees and of the Strategic Advice Committee in particular.
As a result, the Board decided to abolish the Strategic Advice Committee and schedule more time in Board of director meetings to examine certain topics in more depth.
The Extraordinary General Meeting of 10 May 2022 therefore approved an amendment to the company's Articles of Association to this effect.
The Strategic Advice Committee was set up within the Board of Directors in accordance with Article 15.1 of the Articles of Association, which has now been deleted. It had no decision-making powers but was responsible for providing an opinion on the items to be submitted to the Board of Directors for approval, in accordance with the applicable legal and regulatory provisions and the Articles of Association. Within this framework, the committee also monitored implementation of the Board of Directors' decisions. The members of the Strategic Advice Committee sought to adopt decisions by consensus. In 2022, the Strategic Advice Committee addressed the following issues, among others:
Operation
their assigned powers.
meetings in 2022 was as follows:
• Changes in the legal and regulatory framework;
order to safeguard the company's interests; • The energy mix, the European Green Deal, developing a long-term vision for a low-carbon energy system by 2050 and the European Commission's Fit for 55 programme; • The role of natural gas in Belgium's future energy system and in the energy transition; • Upgrading of the Zeebrugge-Opwijk pipeline route; • Commercial activities and the operation of the network and the LNG terminal (including demand for additional regasification capacity at the LNG terminal.
• Patrick Côté (until 21 February 2023) • Cécile Flandre* (since 30 March 2022)
Audit and Risk Committee
accounting and auditing.
Ludo Kelchtermans
Chairman
Members • Sabine Colson* • Laurent Coppens
Composition of the Audit and Risk Committee The Audit and Risk Committee comprises seven non-executive directors, of whom at least one third must be independent within the meaning of the Gas Act and the 2020 Belgian Code on Corporate Governance. The Audit and Risk Committee has collective expertise in the company's area of activity and at least one independent director has the required expertise in
Pascal De Buck, Managing Director and CEO..
Nicolas Daubies, Dpt. Director Group General Counsel & Company Secretary, acts as secretary to the Audit and Risk Committee.
• She holds a degree in mathematics and actuarial science.
• She holds a Master's degree in law and an MBA from Vlerick Business School.
The Audit and Risk Committee was set up within the Board of Directors to assist this body. It has the powers assigned to an audit and risk committee by law as well as any other powers that may be assigned to it by the Board of Directors. The members of the Audit and Risk Committee seek to adopt decisions by consensus. In 2022, the Audit and Risk Committee mainly addressed the following issues:
Decisions by the Audit and Risk Committee are adopted by a simple majority of votes cast by those members present or represented, in line with their assigned powers. For detailed information on how the Audit and Risk Committee works, please consult Annex II of the Corporate Governance Charter – Audit and Risk
* Independent directors under the provisions of the Gas Act
Committee Rules of Internal Procedure (https://www. fluxys.com/en/company/fluxys-belgium/managementgovernance).
The Audit and Risk Committee met 4 times in 2022. Director attendance at Audit and Risk Committee meetings in 2022 was as follows:
| Attendance |
|---|
| 3 out of 4 meetings |
| 3 out of 4 meetings |
| 4 out of 4 meetings |
| 3 out of 4 meetings |
| 3 out of 3 meetings |
| 4 out of 4 meetings |
| 3 out of 4 meetings |
The Appointment and Remuneration Committee comprises seven non-executive directors, the majority of whom must be independent within the meaning of the Gas Act and the 2020 Belgian Code on Corporate Governance. The committee has the required expertise in remuneration policy.
Renaud Moens (until 10 May 2022) Koen Van den Heuvel (since 10 May 2022)
Pascal De Buck, Managing Director and CEO.
Anne Vander Schueren, HR Director, acts as secretary to the Appointment and Remuneration Committee.
The Appointment and Remuneration Committee was set up within the Board of Directors to assist it in all matters concerning the appointment and remuneration of directors and members of the Management Team BE. It has
* Independent directors under the provisions of the Gas Act
Claude Grégoire 3 out of 3 meetings Daniël Termont 2 out of 3 meetings Jos Ansoms 3 out of 3 meetings Patrick Côté 3 out of 3 meetings Valentine Delwart 3 out of 3 meetings Andries Gryffroy 3 out of 3 meetings Anne Leclercq 2 out of 3 meetings Koen Van den Heuvel 3 out of 3 meetings Sandra Wauters 2 out of 3 meetings
The advice put forward by the Strategic Advice Committee was adopted by a simple majority of votes cast by those members present or represented, in line with
Frequency of meetings and attendance levels The Strategic Advice Committee met 3 times in 2022. Director attendance at Strategic Advice Committee
Attendance
the powers assigned to a remuneration committee by law as well as any other powers that may be assigned to it by the Board of Directors. In 2022, the Appointment and Remuneration Committee mainly addressed the following issues:
Decisions by the Appointment and Remuneration Committee are adopted by a simple majority of votes cast by those members present or represented, in line with their assigned powers. The members of the Appointment and Remuneration Committee seek to adopt decisions by consensus. In 2022, the Appointment and Remuneration Committee approved all the decisions submitted to it. For detailed information on how the Appointment and Remuneration Committee works, please consult Annex III of the Corporate Governance Charter – Appointment and Remuneration Committee Rules of Internal Procedure (https://www.fluxys.com/en/ company/fluxys-belgium/management-governance).
The Appointment and Remuneration Committee met 6 times in 2022. Director attendance at Appointment and Remuneration Committee meetings in 2022 was as follows:
| Attendance | |
|---|---|
| Renaud Moens | 4 out of 4 meetings |
| Koen Van den Heuvel | 6 out of 6 meetings |
| Valentine Delwart | 5 out of 6 meetings |
| Cécile Flandre | 1 out of 2 meetings |
| Attendance | |
|---|---|
| Sandra Gobert | 5 out of 6 meetings |
| Gianni Infanti | 2 out of 2 meetings |
| Roberte Kesteman | 5 out of 6 meetings |
| Geert Versnick | 6 out of 6 meetings |
The Corporate Governance Committee comprises seven non-executive directors, of whom at least two thirds must be independent under the provisions of the Gas Act.
Sabine Colson*
Pascal De Buck, Managing Director and CEO.
Nicolas Daubies, Dpt. Director Group General Counsel & Company Secretary, acts as secretary to the Corporate Governance Committee.
The Corporate Governance Committee was set up within the Board of Directors in order to carry out the tasks conferred upon it by the Gas Act. The members of the Corporate Governance Committee seek to adopt decisions by consensus. In 2022, the Corporate Governance Committee mainly addressed the following issues:
• Preparation of the 2021 annual report by the Corporate Governance Committee, drafted on the basis of Article 8/3 section 5(3) of the Gas Act; • The compilation of the opinion for the Board of Directors concerning the appointment of an independent director.
Decisions by the Corporate Governance Committee are adopted by a simple majority of votes cast by those members present or represented, in line with their assigned powers. For detailed information on how the Corporate Governance Committee works, please consult Annex I of the Corporate Governance Charter – Corporate Governance Committee Rules of Internal Procedure (https://www.fluxys.com/en/company/fluxys-belgium/ management-governance).
The Corporate Governance Committee met 1 time in 2022. Director attendance at Corporate Governance Committee meetings in 2022 was as follows:
| Attendance | |
|---|---|
| Sabine Colson | 1 out of 1 meeting |
| Laurent Coppens | 0 out of 1 meeting |
| Valentine Delwart | 1 out of 1 meeting |
| Sandra Gobert | 1 out of 1 meeting |
| Roberte Kesteman | 1 out of 1 meeting |
| Anne Leclercq | 0 out of 1 meeting |
| Josly Piette | 1 out of 1 meeting |
Pascal De Buck is the Managing Director of Fluxys Belgium. He is also the company's Chief Executive Officer.
The Managing Director can delegate some of his powers to a 'Management Team BE' that is composed as follows:
Nicolas Daubies, Dpt. Director Group General Counsel & Company Secretary, acts as secretary to the Management Team BE.
The Management Team BE assists the Managing Director in the tasks assigned to him. It meets as often as it deems necessary and in any case weekly, unless hindered in some way. The Managing Director convenes the members and any guests and sets the agenda.
The Management Team BE is assisted in its decisionmaking by an Executive Committee composed as follows:
• Damien Adriaens, Dpt. Director Commercial Regulated • Nicolas Daubies, Dpt. Director Group General Counsel &Company Secretary
* Independent directors under the provisions of the Gas Act. * Independent directors under the provisions of the Gas Act.
• Raphaël De Winter, Director Fluxys nextgrid • Jan Van de Vyver, Dpt. Director Installations § Grid
• Anne Vander Schueren, Director Human Resources
• Rafaël Van Elst, Director Construction,
Engineering & Gas Flow
• Leen Vanhamme, Director Transformation & Sustainability • Erik Vennekens, Director Digital
The Fluxys Belgium remuneration policy is submitted to the Annual General Meeting in accordance with the Belgian Code on Companies and Associations. The policy will then be published on the company website at https://www.fluxys.com/en/company/fluxys-belgium/ management-governance.
The purpose of this report is to provide information on the implementation of this policy over the past financial year.
By way of introduction, it should be emphasised that the remuneration policy aims to contribute to the company's mission and purpose, namely to be the designated operator of the Belgian natural gas transmission grid, the Loenhout storage facility and the Zeebrugge LNG terminal, and to be an important actor in a sustainable energy future and to bring reliable and affordable energy flows to market. Moreover, the company's new objective is to be the essential infrastructure partner for accelerating the energy transition.
The remuneration policy applicable to the Managing Director and CEO and of the Management Team BE was developed in accordance with the company's remuneration policy. This policy is based on an objective and transparent classification system with a view to:
Remuneration for non-executive members of the Board of Directors is based on market practice and takes into account their role, the specific duties they perform, the resulting responsibilities and the time they devote to their duties.
The remuneration awarded in 2022 is in line with the company's remuneration policy and with the company's performance, which also remained strong during this year, and with its short- and long-term ambitions. Among other things, the company was able to continue ensuring the continuity of its business activities and a maximum contribution to the supply of North-West Europe despite the pandemic and the particularly complex supply challenge resulting from the impact of the conflict in Ukraine. The company continues to take major steps forward in the transition to a sustainable energy future.
We note that contrary to recommendations 7 § (6) and (9) of the 2020 Corporate Governance Code, the directors and members of the executive management do not receive any part of their remuneration in the form of shares of Fluxys Belgium. This deviation is justified by the regulated nature of the company's activity, which is characterised by different mechanisms to ensure longterm value creation and a highly relative relationship between performance and share price.
During the previous financial year, Fluxys Belgium set the non-executive directors' remuneration at the same level as the previous financial year in line with the principles outlined in the Articles of Association, the Corporate Governance Charter and the remuneration policy.
The remuneration consists of a total fixed amount, determined by the Annual General Meeting, that the Board of Directors distributes to non-executive directors on the basis of the workload their individual roles require within the company of no more than € 360,000 per annum as of 1 July 2007 (subject to indexation), or €499,840.50 as of 31 December 2022. Non-executive directors and government representatives also receive an attendance fee of €250 for each Board or committee meeting.
Non-executive directors receive neither performance-related remuneration, such as bonuses or long-term, share-related incentive schemes, nor benefits in kind or pension-plan benefits. Remuneration for non-executive directors consists exclusively of a fixed part.
At the end of the first six-month period, directors are paid an advance on their remuneration and attendance fees. This advance is calculated on the basis of the index-linked basic remuneration and in proportion to the duration of the directorship over the six-month period. A settlement is made in December of the year in question.
For their work on Fluxys Belgium's Board of Directors and its various committees, the non-executive directors received the following gross remuneration and attendance fees in 2022:
| Directors and government representative |
Gross total (in €) |
|---|---|
| Daniël Termont | 26,927.98 |
| Claude Grégoire | 17,533.26 |
| Directors and government representative |
Gross total (in €) |
|---|---|
| Abdellah Achaoui | 9,929.58 |
| Jos Ansoms | 7,638.53 |
| Sabine Colson (1) | 25,465.13 |
| Laurent Coppens (2) | 25,215.13 |
| Patrick Côté (3) | 22,374.19 |
| Valentine Delwart | 28,677.97 |
| Leen Dierick | 8,431.88 |
| Cécile Flandre | 19,359.15 |
| Sandra Gobert | 25,965.13 |
| Andries Gryffroy | 15,820.41 |
| Gianni Infanti | 12,522.82 |
| Ludo Kelchtermans (4) | 19,661.35 |
| Roberte Kesteman (5) | 25,965.13 |
| Anne Leclercq | 27,677.97 |
| Renaud Moens (6) | 7,638.53 |
| Josly Piette (7) | 19,161.35 |
| Koen Van den Heuvel | 23,124.20 |
| Geert Versnick | 19,911.35 |
| Sandra Wauters | 22,124.19 |
| Maxime Saliez | 16,070.41 |
| Tom Vanden Borre | 15,070.41 |
| Total | 442,266.07 |
The total amount of €442,266.07 is made up of €376,516.07 in directors' fees and €65,750.00 in attendance fees.
At their request, notification is hereby given that some directors have retroceded their remuneration and attendance fees:
The non-executive directors of Fluxys Belgium held no paid directorships in any other Fluxys group companies.
On 8 February 2021 Mr Tom Vanden Borre and Mr Maxime Saliez were appointed as representatives of the federal government for the Dutch-speaking and French-speaking roles respectively5.
Remuneration for the Managing Director and CEO and the members of Management Team BE in accordance with the remuneration policy consists of the following components:
The Managing Director and CEO of Fluxys Belgium was evaluated for the year in question by the Board of Directors, following the opinion of the Appointment and Remuneration Committee, based on the extent to which the objectives were achieved. The Appointment and Remuneration Committee was also given an explanation by the Managing Director and CEO of Fluxys Belgium regarding the extent to which the stipulated objectives were achieved and the evaluation of the members of Management Team BE in 2022.
The Board of Directors met to decide on the remuneration for the Managing Director and CEO and the members of Management Team BE. The Board of Directors:
The allocation of performance-related remuneration is based on an assessment of the following criteria:
| Cycle | Per year | |
|---|---|---|
| Performance/payment link | Performance | Payment |
| Minimum Bonus | 80% or less | No minimum %, depending on circumstances. |
| Target Bonus | 100% | 40% |
| Maximum Bonus | 120% or more | 70% |
| Objectives | Description | Weighting |
| Company | Key company targets | 50% |
| Personal | Individual and transversal | 35% |
| Style & values | Leadership & link to company values | 15% |
| Cycle | Per 4 years / payment possible every 2 years | ||
|---|---|---|---|
| Performance/payment link | Performance | Payment | |
| Maximum Bonus | 100% or more | 13%/year | |
| Objectives | Description | Weighting | |
| Company | Key long-term company targets | 100% |
As an exception, the first cycle will cover three years (2021 to 2023), with a first possible payout in 2023, for the results of 2022- 2023. The CEO waived this long-term variable remuneration for the year 2021.
| Per year | |
|---|---|
| Performance | Payment |
| 80% or less | No minimum %, depending on circumstances. |
| 100% | 30% |
| 120% or more | 45% |
| Description | Weighting |
| Key company targets | 40% |
| 30% | |
| Leadership & link to company values | 30% |
| Individual and transversal |
| Cycle | Per 4 years / payment possible every 2 years | ||
|---|---|---|---|
| Performance/payment link | Performance | Payment | |
| Maximum Bonus | 100% or more | 7%/year | |
| Objectives | Description | Weighting | |
| Company | Key long-term company targets | 100% |
As an exception, the first cycle will cover three years (2021 to 2023, inclusive), with a first payout in 2021, for the 2021 results, and a second possible payout in 2023, for the 2022-2023 results.
For 2022, the key corporate targets can be summarised as follows:
• Financial performance: keep OPEX under control and hit Fluxys Belgium's financial targets;
• Safe and reliable operation, continuity of gas flows and satisfaction of the users of the facilities and attention paid to security of supply (SOS) in the current market situation;
Fluxys Belgium implements its strategy and sustainability commitment in company objectives that cover the key areas of Planet, Prosperity and People, which are translated into personal objectives every year. For example, our focus on our role in the transition to a sustainable energy future is a critical factor in the variable compensation framework, as is our Go4Net0 project targeting a greenhouse gas emission-free company. We also actively support technologies and market models that strengthen the position of natural gas and carbon-neutral gas in the context of the energy transition. In addition, sustainability, safety, good community relations and the well-being of our employees were included as important pillars in the short-term and long-term compensation plans.
The company objectives, both short and long term, and the respective personal objectives, together form the framework within which the performance of the Managing Director and CEO as well as the members of Management Team BE is evaluated and their corresponding variable remuneration awarded.
The company targets were exceeded in 2022, in particular in terms of financial performance, implementation of the investment plan and the energy transition. In November, a new business unit was created, nextgrid, which is fully dedicated to developing projects related to new molecules in Belgium. Nextgrid aims to make the company the essential infrastructure partner for the energy transition in Belgium.
For the Managing Director and CEO, the personal targets were exceeded and the targets related to leadership and the propagation of the company's values were also positively assessed. The short-term variable remuneration for the Managing Director and CEO is mainly paid in cash, with the remainder paid into the group insurance policy, plus the option to have part of the bonus paid in OTC (over-the-counter) options. The CEO waived his variable remuneration for long-term objectives for the year 2021 and will therefore only receive performance-related remuneration for long-term objectives as of 2022, with the first possible payout after two years, in 2023. Remuneration for long-term goals is paid out in cash.
For the members of Management Team BE, too, the personal targets were exceeded and the targets related to leadership and the propagation of the company's values were also positively assessed. The short-term variable remuneration is paid entirely in cash, with the option to have part of the bonus paid out in OTC options. With regard to the long-term objectives of the members of Management Team BE, the next payment is possible after two years, with respect to 2022 and 2023. Remuneration for long-term goals is paid out in cash
| Components | Managing Director and CEO (individual) |
Members of Management Team BE (together) |
|---|---|---|
| Base salary | 322,656.60 | 539,425.20 |
| Variable remuneration | 204,887.00 | 205,714.00 |
| Long-term variable remuneration* | 0 | 0 |
| Pension | 123,393.88 | 263,703.01** |
| Other components | 19,035.28 | 48,774.63 |
| Total | 669,972.76 | 1,057,616.84 |
| Fixed/variable ratio*** | 69% | 80% |
| 31% | 20% |
* In accordance with the established long-term compensation rules, the next payout will take place in 2023.
** Including special bonus for 25 years of service for one member of Management Team BE. *** The one-off special bonus for 25 years of service for one member of Management Team BE has not been included in the calculation of the fixed/ variable ratio.
As regards the variable remuneration for 2022, Fluxys Belgium is covered by the legal derogation from the requirement to spread payment over multiple years, because the on-target variable remuneration for the Managing Director and CEO and the members of Management Team BE is no more than 25% of the total annual remuneration.
The Managing Director and CEO and the members of Management Team BE receive neither shares nor share options in the company as part of their base salary or performance-related remuneration.
The company did not award any severance pay during the year in question.
The Managing Director and CEO, in this capacity, and the members of Management Team BE have employee status. Fluxys Belgium applies the relevant legal provisions of the law on employment contracts.
If it transpires that a deliberate error has resulted in inaccurate financial data being used as the basis for the variable remuneration, the error will be taken into account in the evaluation process of the individual concerned in the year in which the error is detected.
The company did not make use of this option during the year in question.
Deviations from the remuneration policy
There were no deviations from the remuneration policy in 2022.
| Change by year | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|
| Non-executive directors* | |||||
| Total | 437,103 | 462,051 | 464,687 | 469,910 | 442,266 |
| Chairman of the Executive Board and CEO/Managing Director and CEO | |||||
| Total | 470,938 | 516,941 | 619,288 | 609,811 | 669,973 |
| Members of the Executive Board/Management Team BE* | |||||
| Total | 915,034 | 893,778 | 977,242 | 1,022,346 | 1,057,617 |
| Performance of Fluxys Belgium Group (consolidated annual accounts – in thousands of €) | |||||
| Operating revenue | 503,246 | 530,995 | 560,590 | 573,191 | 912,559 |
| EBITDA | 278,382 | 297,337 | 313,623 | 318,905 | 323,167 |
| EBIT | 120,601 | 134,841 | 133,482 | 137,821 | 147,305 |
| Net profit | 54,469 | 69,498 | 73,237 | 75,521 | 83,728 |
| Average remuneration for other employees (in full-time equivalents) | |||||
| Total** | 88,498 | 88,689 | 89,292 | 91,112 | 99,140 |
*The number of members may vary from year to year.
**Total of the remuneration section for all employee categories, namely executives and employees and including a frozen population of employees who are still paid according to the so-called 'old employment conditions' in accordance with the provisions of Joint Committee 326.
This 'remuneration' section includes all gross remuneration components, including fixed annual wages, as well as all variable components, including compensation for on-call duty, shift work, overtime, etc.
The other remuneration components (employer contributions to the group insurance policy, personnel insurance and the cost of certain job-related benefits) are not included.
The ratio between the highest remuneration for management (the Managing Director and CEO) and the lowest remuneration in full-time equivalent for employees was 1:14 for 2022.
The shareholders' meeting represents all shareholders irrespective of their share category. The valid decisions it makes, based on the required majority, shall be binding on all shareholders, even those who are not present or who do not agree with said decisions.
Each share entitles the holder to one vote. In compliance with the Royal Decree of 16 June 1994, and with the Articles of Association within which these statutory provisions are incorporated, special rights shall be allocated to the golden share held by the Belgian State in Fluxys Belgium in addition to the ordinary rights attached to all other shares. Said special rights are exercised by the federal Energy Minister and, in brief, comprise the following:
• the right to oppose any transfer, assignment as a guarantee, or change in the purpose of Fluxys Belgium's strategic assets (a list of which is appended to the aforementioned Royal Decree dated 16 June 1994) if the federal Energy Minister considers that such an operation would adversely affect national interests in the field of energy; • the right to appoint two representatives of the
federal government in an advisory capacity to Fluxys Belgium's Board of Directors;
• the right of representatives of the federal government to appeal to the federal Energy Minister within four working days, on the basis of objective, non-discriminatory and transparent criteria (as defined in the Royal Decree of 5 December 2000), against any decision of Fluxys Belgium's Board of Directors (including the investment and activity plan and the associated budget) which in their view breaches national energy policy guidelines, including the government's national energy supply objectives – such an appeal shall be suspensive; if the federal Energy Minister has not annulled the decision concerned within eight working days after this appeal, the decision shall become definitive;
• a special voting right in the event of deadlock at the General Meeting concerning an issue affecting the objectives of federal energy policy.
The special rights attached to the golden share held by the Belgian State are listed in Articles 5, 7, 10, 12 and 18 of Fluxys Belgium's Articles of Association. These rights remain attached to the golden share for as long as it is held by the Belgian State and Articles 3 to 5 of the Royal Decree of 16 June 1994 granting the State a golden share in Fluxys Belgium or replacement provisions remain in force.
In addition to these statutory special rights, the golden share also confers on its holder the right to receive a portion 100 times greater than that associated with each category-B and category-D share of all dividend payments and all other payments which the company makes to its shareholders.
There are no limitations on the following share transfers:
In all other cases, any shareholder planning to transfer securities to another shareholder or a third party, in any manner whatsoever, shall give all other shareholders, except holders of category-D shares and the golden share, the option of a priority purchase (on a pro rata basis of their shareholding) of the securities relating to the planned transfer, as per the procedures detailed below.
A shareholder planning to transfer shares must inform the company in writing, requesting acknowledgement of receipt, a) of the number of shares they plan to sell, b) of the name of the prospective assignee(s) deemed to be of good faith and the price irrevocably offered by said assignee, and c) that the shares in question are being offered to shareholders for priority purchase under the same conditions. The Board of Directors shall inform the other shareholders of this offer in the same manner within two weeks. Every shareholder shall then have 60 days as from receipt of the aforesaid written notification to inform the transferring shareholder and the company, in writing requesting acknowledgement of receipt, whether or not they shall submit a bid and, if so, of the number of shares they wish to acquire.
If requests exceed the number of shares offered for sale, the Board of Directors shall distribute the shares between the applicants on a pro rata basis of the number of shares held by said applicants and up to the maximum number of shares stated in their request.
If, upon the expiry of the aforementioned period of 60 days, no shareholders have indicated their intention to acquire the shares offered, or where the number of shares requested by the shareholders is less than the
number of shares offered, the shareholder who indicat ed their intention to transfer shares in accordance with the provisions of this article shall be able to complete the planned transfer to the third party indicated in their notification and under the conditions indicated therein.
Directors and members of the Management Team BE must take care to comply with all legal and ethical obli gations incumbent upon them, in particular with respect to conflicts of interest as per Article 7:96 of the Code on Companies and Associations.
The group's Corporate Governance Charter lays down a procedure for transactions and other contractual relations between directors or members of the Man agement Team BE and the company or its subsidiaries and which do not fall within the scope of the aforemen tioned Article 7:96.
This procedure is as follows:
approval) where the total amount of the individual transaction or accumulated transactions over a three-month period is in excess of €25,000. • If a member of the Management Team BE has, directly or indirectly, an interest of a financial nature which conflicts with a decision or a transaction falling within the remit of the Management Team BE, they must notify the other members of this before the Team deliberates. The member concerned may not participate in the deliberations of the Management Team BE on that decision or transaction or in the vote.
The Board of Directors was not required to implement the above procedure during the 2022 financial year.
Fluxys Belgium's Articles of Association authorise the General Meeting to acquire the company's own shares in accordance with legal provisions. No such decision was taken at the 2022 Annual General Meeting. How ever, when the company acquires its own shares with a view to distributing them to its staff, no decision by the General Meeting is required.
In the case of a capital increase, the shares for sub scription in cash must be preferentially offered to share holders, in proportion to the portion of the company's capital their shares represent. However, the General Meeting may, in the interests of the company, limit or eliminate this pre-emptive right in compliance with legal provisions.
The Annual General Meeting decided, based on a pro posal by the Board of Directors and advice from the Audit and Risk Committee, to renew the mandate of EY Bedrijfsrevisoren BV, represented by Wim Van Gasse BV, permanently represented by Mr Wim Van Gasse, for a period of three years. This mandate will expire at the end of the 2025 Annual General Meeting and will be subject to an indexed fee of €118,779/year.
In 2022, EY received remuneration totalling €217,379 for its work as the Fluxys Belgium group's auditor.
This remuneration is broken down as follows:
The Board of Directors checks on the progress of the activities of the subsidiaries Fluxys Re and Fluxys LNG at least twice a year when it examines their consoli dated accounts (annual and half-yearly). The Board of Directors is also informed, as and when appropriate, of major events and important developments involving subsidiaries.
The periodic disclosure pursuant to Article 74(8) of the Act of 1 April 2007 was sent out on 13 December 2017. As of the date of disclosure, Fluxys held 63,237,240 shares with voting rights in Fluxys Belgium. Publigas held no shares with voting rights in Fluxys Belgium. Publigas confirmed at that time that it had not acquired or transferred any shares with voting rights in Fluxys Belgium. No transfer of shares with voting rights took place in 2022.
Methodology for calculating greenhouse gas emissions
• Emissions from scopes 1 and 2 • All relevant sources of emissions in our activities
CO 2 emissions from gas consumption:
For the purpose of our calculation, we assume that 1 kg of methane contributes 25 times as much to climate change as 1 kg of CO 2 (GWP100 = 25, according to the fourth IPCC report).
The carbon footprint of the generation of the purchased electricity. As defined in the GHG protocol (ghgproto col.org), scope 2 emissions physically occur at the site where the electricity is generated. Our green electricity contract came into force on 1 January 2021. Scope 2 emissions are equal to zero.
Health, safety and the environment (HSE) is a responsibility and commitment for both Fluxys and its employees. Transparency and trust are key to realising our HSE policy. .
are material to Fluxys Belgium's activities, taking into account the context and value chain within which the company operates and the interests of the company's stakeholders.
| Statement of use | Fluxys has reported the information cited in this GRI content index for the period 01/01/2022- 01/01/2023 with reference to the GRI Standards. |
|---|---|
| GRI 1 used | GRI 1: Foundation 2021 |
| GRI Standard | Disclosure | Location |
|---|---|---|
| GRI 2: | 2-1 Organisation details | 12-29 |
| General Disclosures | 2-2 Entities included in the organization's sustainability reporting | 24 |
| 2021 | 2-3 Reporting period, frequency and contact point | 153; 288 |
| 2-5 External assurance | 156; 279 | |
| 2-6 Activities, value chain and other business relationships | 18-24 | |
| 2-7 Employees | 110; 119 | |
| 2-8 Workers who are not employees | 110 | |
| 2-9 Governance structure and composition | 22-27 | |
| 2-12 Role of the highest governance body in overseeing the management of impacts |
23; 26-27 | |
| 2-13 Delegation of responsibility for managing impacts | 24-27 | |
| 2-15 Conflicts of interest | 148 | |
| 2-22 Statement on sustainable development strategy | 24 | |
| 2-23 Policy commitments | 17; 49; 57; 65; 75; 83; 97; 100; 105; 107; 113; 114; 117; 118; 120; 122; 127; 129; 141; 152; 249 |
|
| 2-24 Embedding policy commitments | 49-53; 57-59; 65-73; 75-81; 83-93; 97-99; 101-103; 105; 107-111; 113-115; 118-123; 127; 129; 141-142 |
|
| 2-25 Processes to remediate negative impacts | 49-53; 57-59; 65-73; 75-81; 83-93; 97-99; 101-103; 105; 107-111; 113-115; 118-123; 127; 129; 141-142 |
|
| 2-26 Mechanisms for seeking advice and raising concerns | 127 | |
| 2-27 Compliance with laws and regulations | 34-37; 127 | |
| 2-29 Approach to stakeholder engagement | 28-31 | |
| GRI 3: | 3-1 Process to determine material topics | 32-33 |
| Material Topics | 3-2 List of material topics | 32 |
| 2021 | 3-3 Management of material topics | 32-33 |
| GRI Standard | Disclosure | Location |
|---|---|---|
| GRI 201: | 201-1 Direct economic value generated and distributed | 52-55 |
| Thematische norm: Economisch 2016 |
201-2 Financial implications and other risks and opportunities due to climate change |
49 |
| 201-3 Defined benefit plan obligations and other retirement plans | 185; 237-239 | |
| 201-4 Financial assistance received from government | 154 |
Financial assistance received from government: in 2022, Fluxys Belgium and Fluxys LNG received a reduction in withholding tax of €1,235,191.95 and €501,657.08 respectively. The partial exemption from paying withholding tax consists of the structural exemption for all employee categories, for shift, night and continuous work, for a certain number of overtime hours, and for R&D (certain qualifications). In 2020, Fluxys Belgium also received an advance ruling on the innovation income deduction for financial years 2019, 2020 and 2021. This regime, which replaced the patent income deduction, provides for a deduction calculated on net income from intellectual property limited in proportion to the share of the company's own R&D expenditure or the share outsourced to non-affiliated companies in the total R&D expenditure relating to this intellectual property. The deduction for financial year 2021 (return submitted in 2022) was €8,575,624.87, i.e. a net tax gain of €2,143,906.22.
| GRI 203: Indirect Economic Impacts 2016 |
203-1 Infrastructure investments and services supported | 20-21; 52 |
|---|---|---|
| GRI 205: | 205-1 Operations assessed for risks related to corruption | 88; 127 |
| Anti-Corruption 2016 | 205-2 Communication and training about anti-corruption policies and procedures |
127 |
| 205-3 Confirmed incidents of corruption and actions taken | 127 | |
| GRI 206: Anti-competitive Behavior 2016 |
206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices |
88; 127 |
| GRI 302: | 302-1 Energy consumption within the organization | 78-81 |
| Energy 2016 | 302-3 Energy intensity | 81 |
| 302-4 Reduction of energy consumption | 76-77; 81 | |
| GRI 305: | 305-1 Direct (Scope 1) GHG emissions | 81 |
| Emissies 2016 | 305-2 Energy indirect (Scope 2) GHG emissions | 81 |
| 305-4 GHG emissions intensity | 81 | |
| 305-5 Reduction of GHG emissions | 76-77; 81 | |
| GRI 401: Employment 2016 |
401-1 Nieuwe werknemers en personeelsverloop | 110 |
| GRI 403: | 403-1 Occupational health and safety management system | 112-114 |
| Occupational Health and Safety 2018 |
403-2 Hazard identification, risk assessment, and incident investigation |
112-115 |
| 403-3 Occupational health services | 112-115; 152 | |
| 403-4 Worker participation, consultation, and communication on occupational health and safety |
115 | |
| 403-5 Worker training on occupational health and safety | 114-115 | |
| 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships |
114-115 | |
| 403-9 Work-related injuries | 36; 113-116 | |
| GRI 404: Training and Education 2016 |
404-2 Programs for upgrading employee skills and transition assistance programs |
106-109; 111 |
| GRI 405: | 405-1 Diversity of governance bodies and employees | 118-119 |
| Diversity and Equal Opportunity 2016 |
405-2 Ratio of basic salary and remuneration of women to men | 119 |
| GRI 415: Public Policy 2016 |
415-1 Political contributions | Fluxys Belgium does not make political contributions |
We have been engaged by Fluxys Belgium NV to perform a 'limited assurance engagement', hereafter referred to as "the Engagement", to report on certain sustainability indicators of Fluxys Belgium NV's (the "Company") as included in Appendix 1 (the "Subject Matter") of the annual report 2022 (the "Report") for the period from 1 January 2022 to 31 December 2022.
Other than as described in the preceding paragraph, which sets out the scope of our engagement, we did not perform assurance procedures on the remaining sustainability indicators included in the Report, and accordingly, we do not express a conclusion on this information.
In preparing the sustainability indicators as listed in Annex 1 and included in the Report, Fluxys applied the reporting standards of the Global Reporting Initiative ("GRI") and the Greenhouse Gas Protocol, as well as a set of own reporting criteria as disclosed in the Report (the "Criteria").
Fluxys' management is responsible for selecting the Criteria, and for presenting the Subject Matter in accordance with that Criteria, in all material respects . This responsibility includes establishing and maintaining internal controls, maintaining adequate records and making estimates that are relevant to the preparation of the Subject Matter, such that it is free from material misstatement, whether due to fraud or error.
Our responsibility is to express a conclusion on the Subject Matter based on our procedures and the evidence we have obtained.
We conducted our limited assurance engagement in accordance with the International Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements other than Audits or Reviews of Historical Financial Information" (ISAE 3000), published by the International Auditing and Assurance Standards Board. This standard requires that we plan and perform our Engagement to obtain limited assurance about whether, in all material respects, the Subject Matter is presented in accordance with the Criteria, and to issue a report. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risk of material misstatement, whether due to fraud or error.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited assurance conclusion.
We have maintained our independence and confirm that we have met the requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, and have the required competencies and experience to conduct this assurance engagement.
EY also applies International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for a reasonable assurance engagement. Consequently the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.
Our procedures were designed to obtain a limited level of assurance on which to base our conclusion and do not provide all the evidence that would be required to provide a reasonable level of assurance.
Although we considered the effectiveness of management's internal controls when determining the nature and extent of our procedures, our assurance engage-
ment was not designed to provide assurance on internal controls. Our procedures did not include testing controls or performing procedures relating to checking aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making enquiries, primarily of persons responsible for preparing the sustainability KPIs and related information, and applying analytical and other appropriate procedures.
Our procedures included:
Based on our review, nothing has come to our attention that make us to believe that the Subject matter as listed in Appendix 1, of Fluxys Belgium NV included in the Report for the period from 1 January 2022 to 31 December 2022, was not prepared, in all material respects, in accordance with the Criteria.
Diegem, 16 March 2023 EY Bedrijfsrevisoren BV Represented by Wim Van Gasse7 Partner
50 years (%)
50 years (%)
Women (%)
Acting on behalf of a SRL.
Fluxys Belgium | Regulated information | Integrated Annual Report 2022 | Financial situation
We're there, day after day, ensuring security of energy supply and accelerating the green transition. This is how we bring prosperity to society, the economy and to our shareholders. And how we make sure to extend our contribution to welfare sustainably into the long-term future.
| Consolidated financial statements under IFRS__ | 163 |
|---|---|
| General information on the company _________ 163 | |
| Corporate name and registered office ________ 163 | |
| Group activities ____________ 163 | |
| Consolidated financial statements of the Fluxys Belgium group under IFRS _____ 164 | |
| A. Consolidated balance sheet _______ 164 |
|
| B. Consolidated income statement__________ 166 |
|
| C. Consolidated statement of comprehensive income _________ 167 |
|
| D. Consolidated statement of changes in equity _________ 168 |
|
| E. Consolidated statement of cash flows___________ 169 |
|
| Notes _______________ 172 | |
| Note 1a. Statement of compliance with IFRS _________ 172 | |
| Note 1b. Judgement and use of estimates___________ 172 | |
| Note 1c. Date of authorisation for issue ________ 173 | |
| Note 1d. Standards, amendments and interpretations applicable on 1 January 2022 _ 173 | |
| Note 1e. Standards, amendments and interpretations applicable from 1 January 2023 and later ____________ 173 |
|
| Note 2. Accounting principles and policies __________ 174 | |
| Note 2.1. General principles ____________ 174 | |
| Note 2.2. Balance sheet date ___________ 174 | |
| Note 2.3. Events after the balance sheet date _______ 174 | |
| Note 2.4. Basis of consolidation _________ 174 | |
| Note 2.5. Intangible assets ________ 175 | |
| Note 2.6. Property, plant and equipment ______ 177 | |
| Note 2.7. Leases ___________ 178 | |
| Note 2.8. Financial instruments __________ 180 | |
| Note 2.9. Inventories______________ 183 | |
| Note 2.10. Borrowing costs ________ 184 | |
| Note 2.11. Provisions______________ 184 | |
| Note 2.12. Revenue recognition_________ 186 | |
| Note 2.13. Income taxes __________ 190 | |
| Note 3. Acquisitions, disposals and restructuring ______ 190 | |
| Note 4. Income statement and operating segments________ 193 | |
| Note 4.1. Operating revenue ___________ 196 | |
| Note 4.2. Operating expenses __________ 197 | |
| Note 4.3. Financial income _____________ 202 | |
| Note 4.4. Finance costs ___________ 203 | |
| Note 4.5. Income tax expenses _________ 204 |
| Note 4.6. Net profit/loss for the period _________ 207 | |
|---|---|
| Note 4.7. Earnings per share ____________ 208 | |
| Note 5. Segment balance sheet ________ 210 | |
| Note 5.1. Property, plant and equipment ______ 212 | |
| Note 5.2. Intangible assets ________ 218 | |
| Note 5.3. Right of use assets_____________ 221 | |
| Note 5.4. Other financial assets _________ 222 | |
| Note 5.5. Other non-current assets ____________ 222 | |
| Note 5.6. Inventories______________ 223 | |
| Note 5.7. Trade and other receivables_________ 224 | |
| Note 5.8. Short-term investments, cash and cash equivalents _____ 225 | |
| Note 5.9. Other current assets ___________ 226 | |
| Note 5.10. Equity ___________ 227 | |
| Note 5.11. Interest-bearing liabilities ___________ 228 | |
| Note 5.12. Regulatory liabilities __________ 231 | |
| Note 5.13. Provisions______________ 233 | |
| Note 5.14. Provisions for employee benefits __________ 236 | |
| Note 5.15. Deferred tax assets and liabilities __________ 247 | |
| Note 5.16. Trade and other payables __________ 248 | |
| Note 6. Financial instruments ____________ 249 | |
| Note 7. Contingent assets and liabilities – rights and liabilities of the group _____ 254 | |
| Note 7.1. Litigation _________ 254 | |
| Note 7.2. Assets and items held for third parties, in their name, but at the risk and for the benefit of entities included in the consolidation scope______ 254 |
|
| Note 7.3. Guarantees received _________ 254 | |
| Note 7.4. Guarantees provided by third parties on behalf of the entity___ 254 | |
| Note 7.5. Commitments with regard to the Interconnector Zeebrugge Terminal (IZT) __ 254 | |
| Note 7.6. Commitments under terminalling service contracts______ 255 | |
| Note 7.7. Other commitments___________ 255 | |
| Note 8. Related parties ___________ 256 | |
| Note 9. Directors' and senior executives' remuneration _____ 259 | |
| Note 10. Events after the balance sheet date________ 259 | |
| Statutory accounts of Fluxys Belgium SA according to Belgian GAAP ____ 260 | |
| Balance sheet _____________ 261 | |
| Income statement _________ 263 | |
| Profit/loss appropriation __________ 264 | |
| Capital at the end of the period ________ 265 | |
| Income taxes ______________ 266 | |
| Workforce ___________ 267 | |
160
| Statutory auditor's report and declaration by responsible persons _______ |
271 |
|---|---|
| Statutory auditor's report to the General Meeting of Fluxys Belgium NV for the financial year ended 31 December 2022 _________ 271 |
|
| Report on the audit of the Consolidated Financial Statements ____ 272 | |
| Report on other legal and regulatory requirements _________ 277 | |
| Declaration by responsible persons ___________ 280 | |
| Declaration regarding the financial year ended 31 December 2022_____ 280 | |
| Glossary ______ |
281 |
| Pertinence of published financial ratios (see 'Financial situation: key statistics, p. 48) _ 281 | |
| Definition of indicators____________ 282 | |
| Other property, plant and equipment investments outside the RAB ______ 282 | |
| Net finance costs __________ 282 | |
| Interest expenses___________ 282 | |
| EBIT ___________ 282 | |
| EBITDA ______________ 282 | |
| Net financial debt__________ 282 | |
| FFO ___________ 282 | |
| RAB ___________ 283 | |
| Extended RAB _____________ 283 | |
| RCF ___________ 283 | |
| WACC ______________ 283 | |
| Shareholder's guide _______ |
287 |
| Shareholder's calendar___________ 287 | |
| Payment of dividend _____________ 287 |
The registered office of the parent entity Fluxys Belgium SA is Avenue des Arts 31, B – 1040 Brussels, Belgium.
The main activities of the Fluxys Belgium group are transmission and storage of natural gas as well as terminalling services for liquefied natural gas (LNG) in Belgium. The Fluxys Belgium group also provides complementary services related to these main activities. Transmission, storage and terminalling services in Belgium are subject to the Gas Act1. Please refer to the specific chapters in the directors' report for further information on the activities of Fluxys Belgium group.
1 Act of 12 April 1965 concerning the transmission of gaseous and other products by pipelines as later amended.
| Consolidated Balance Sheet | In thousands of € | ||
|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | |
| I. Non-current assets | 2,061,085 | 2,074,508 | |
| Property, plant and equipment | 5.1 | 1,855,375 | 1,902,037 |
| Intangible assets | 5.2 | 22,864 | 23,891 |
| Right of use assets | 5.3 | 30,020 | 33,527 |
| Investments accounted for using the equity method |
50 | 50 | |
| Other financial assets | 5.4/6 | 111,171 | 88,642 |
| Finance lease receivables | 6 | 0 | 2,094 |
| Other receivables | 6 | 15,144 | 9,144 |
| Other non-current assets | 5.5 | 26,461 | 15,123 |
| II. Current assets | 1,345,485 | 560,006 | |
| Inventories | 5.6 | 62,656 | 39,042 |
| Finance lease receivables | 6 | 2,094 | 601 |
| Current tax receivables | 2,429 | 1,473 | |
| Trade and other receivables | 5.7/6 | 164,299 | 90,446 |
| Cash investments | 5.8/6 | 26,113 | 45,740 |
| Cash and cash equivalents | 5.8/6 | 1,070,708 | 366,931 |
| Other current assets | 5.9 | 17,186 | 15,773 |
| Total assets | 3,406,570 | 2,634,514 |
| Consolidated Balance Sheet | In thousands of € | ||
|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | |
| I. Equity | 5.10 | 643,617 | 639,674 |
| Equity attributable to the parent company's shareholders |
643,617 | 639,674 | |
| Share capital and share premiums | 60,310 | 60,310 | |
| Retained earnings and other reserves | 583,307 | 579,364 | |
| Non-controlling interests | 0 | 0 | |
| II. Non-current liabilities | 2,061,275 | 1,775,473 | |
| Interest-bearing liabilities | 5.11/6 | 1,115,772 | 1,162,091 |
| Regulatory liabilities | 5.12 | 746,809 | 397,877 |
| Provisions | 5.13 | 4,127 | 4,246 |
| Provisions for employee benefits | 5.14 | 47,444 | 60,517 |
| Other non-current financial liabilities | 6 | 3,575 | 3,254 |
| Deferred tax liabilities | 5.14 | 143,548 | 147,488 |
| III. Current liabilities | 701,678 | 219,367 | |
| Interest-bearing liabilities | 5.11/6 | 56,269 | 57,432 |
| Regulatory liabilities | 5.12 | 188,485 | 75,963 |
| Provisions | 5.13 | 0 | 3,069 |
| Provisions for employee benefits | 5.13 | 3,543 | 4,201 |
| Current tax payables | 1,020 | 2,148 | |
| Trade and other payables | 5.16/6 | 444,533 | 73,307 |
| Other current liabilities | 7,828 | 3,247 | |
| Total liabilities and equity | 3,406,570 | 2,634,514 |
164
| Consolidated income statement | In thousands of € | |||||
|---|---|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | ||||
| Operating revenue | 4.1 | 912,559 | 573,191 | |||
| Sales of gas related to balancing operations and operational needs |
278,566 | 32,378 | ||||
| Other operating income | 16,212 | 13,107 | ||||
| Consumables, merchandise and supplies used | 4.2.1 | -5,582 | -3,422 | |||
| Purchase of gas related to balancing of operations and operational needs |
-275,178 | -32,378 | ||||
| Miscellaneous goods and services | 4.2.2 | -465,521 | -146,348 | |||
| Employee expenses | 4.2.3 | -132,931 | -112,549 | |||
| Other operating expenses | 4.2.4 | -4,958 | -5,074 | |||
| Depreciations | 4.2.5 | -168,051 | -173,993 | |||
| Provisions | 4.2.6 | 6,993 | -7,070 | |||
| Impairment losses | 4.2.6 | -14,804 | -21 | |||
| Operational profit/loss | 147,305 | 137,821 | ||||
| Change in the fair value of financial instruments | -1,298 | -114 | ||||
| Financial income | 4.3 | 4,589 | 1,142 | |||
| Finance costs | 4.4 | -40,805 | -38,375 | |||
| Profit/loss before taxes | 109,791 | 100,474 | ||||
| Income tax expenses | 4.5 | -26,063 | -24,953 | |||
| Net profit/loss for the period | 4.6 | 83,728 | 75,521 | |||
| Fluxys Belgium share | 83,728 | 75,521 | ||||
| Non-controlling interests | 0 | 0 | ||||
| Basic earnings per share attributable to the parent company's shareholders in € |
4.7 | 1.1916 | 1.0748 | |||
| Diluted earnings per share attributable to the parent company's shareholders in € |
4.7 | 1.1916 | 1.0748 |
| Consolidated statement of comprehensive income | In thousands of € | ||
|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | |
| Net profit/loss for the period | 4.6 | 83,728 | 75,521 |
| Items that will not be reclassified subsequently to profit or loss |
|||
| Remeasurements of employee benefits | 5.12 | 22,905 | 28,503 |
| Income tax expense on these variances | -5,726 | -7,126 | |
| Other comprehensive income | 17,179 | 21,377 | |
| Comprehensive income for the period | 100,907 | 96,898 | |
| Fluxys Belgium share | 100,907 | 96,898 | |
| Non-controlling interests | 0 | 0 |
| Consolidated statement of changes in equity In thousands of € |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Share capital |
Share pre mium |
Reserves not available for distri bution |
Retained earnings |
Reserves for employee benefits |
Other compre hensive income |
Equity attributable to the parent company's share holders |
Non control ling interests |
Total equity |
|
| I. BALANCE AS AT 31- 12-2020 |
60,272 | 38 | 54,072 542,537 | -17,881 | 0 | 639,038 | 0 | 639,038 | |
| 1. Comprehensive income for the period |
75,521 | 21,377 | 96,898 | 96,898 | |||||
| 2. Dividends paid | -96,262 | -96,262 | -96,262 | ||||||
| II. CLOSING BALANCE AS AT 31-12-2021 |
60,272 | 38 | 54,072 521,796 | 3,496 | 0 | 639,674 | 0 | 639,674 | |
| 1. Comprehensive income for the Period |
83,728 | 17,179 | 100,907 | 100,907 | |||||
| 2. Dividends paid | -96,964 | -96,964 | -96,964 | ||||||
| III. CLOSING BALANCE AS AT 31-12-2022 |
60,272 | 38 | 54,072 508,560 | 20,675 | 0 | 643,617 | 0 | 643,617 |
| Consolidated statement of cash flows (indirect method) | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | ||
| I. Cash and cash equivalents, opening balance | A. | 366,931 | 377,359 | |
| II. Net cash flows from operating activities | 1,008,653 | 214,328 | ||
| 1. Cash flows from operating activities | 1,041,092 | 248,206 | ||
| 1.1. Profit/loss from continuing operations | B. | 147,305 | 137,821 | |
| 1.2. Non cash adjustments | 631,460 | 144,620 | ||
| 1.2.1. Depreciations | B. | 168,051 | 173,993 | |
| 1.2.2. Provisions | B. | -6,993 | 7,070 | |
| 1.2.3. Impairment losses | B. | 14,804 | 21 | |
| 1.2.4. Translation adjustments | 0 | 0 | ||
| 1.2.5. Other non-cash adjustments | -626 | -369 | ||
| 1.2.6. Increase (decrease) of the regulatory liabilities | 5.12 | 456,224 | -36,095 | |
| 1.3. Changes in working capital | 262,327 | -34,235 | ||
| 1.3.1. Decrease (increase) of inventories | -38,433 | -12,663 | ||
| 1.3.2. Decrease (increase) of tax receivables | A. | -956 | 3,635 | |
| 1.3.3. Decrease (increase) of trade and other receivables |
A. | -73,838 | -19,468 | |
| 1.3.4. Decrease (increase) of other current assets | -153 | -564 | ||
| 1.3.5. Increase (decrease) of tax payables | -126 | -4,355 | ||
| 1.3.6. Increase (decrease) of trade and other payables |
A. | 371,252 | -1,273 | |
| 1.3.7. Increase (decrease) of other current liabilities | A. | 4,581 | 453 | |
| 1.3.8. Other changes in working capital | 0 | 0 | ||
| 2. Cash flows relating to other operating activities | -32,439 | -33,878 | ||
| 2.1. Current tax paid | -36,732 | -34,780 | ||
| 2.2. Interests from investments, cash and cash equivalents |
4.3 | 4,053 | 957 | |
| 2.3. Other inflows (outflows) relating to other operating activities |
4.3/4.4 | 240 | -55 | |
| III. Net cash flows relating to investment activities | -124,784 | -43,950 | ||
| 1. Acquisitions | -145,118 | -61,546 | ||
| 1.1. Payments to acquire property, plant and equipment, and intangible assets |
5.1/5.2 | -116,916 | -56,546 | |
| 1.2. Payments to acquire subsidiaries, joint arrangements or associates |
A. | 0 | 0 | |
| 1.3. Payments to acquire other financial assets | -28,202 | -5,000 |
168
| Consolidated statement of cash flows (indirect method) | In thousands of € | ||||
|---|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | |||
| 2. Disposals | 707 | 23,365 | |||
| 2.1. Proceeds from disposal of property, plant and equipment, and intangible assets |
707 | 1,307 | |||
| 2.2. Proceeds from disposal of subsidiaries, joint arrangements or associates |
0 | 0 | |||
| 2.3. Proceeds from disposal of other financial assets | 5.4 | 0 | 22,058 | ||
| 3. Dividends received classified as investment activities |
0 | 0 | |||
| 4. Subsidies received | 5.1 | 0 | 513 | ||
| 5. Increase (-)/ Decrease (+) of cash investments | A. | 19,627 | -6,282 | ||
| IV. Net cash flows relating to financing activities | -180,092 | -180,806 | |||
| 1. Proceeds from cash flows from financing | 601 | 603 | |||
| 1.1. Proceeds from issuance of equity instruments | D. | 0 | 0 | ||
| 1.2. Proceeds from issuance of treasury shares | D. | 0 | 0 | ||
| 1.3. Proceeds from finance leases | A. | 601 | 603 | ||
| 1.4. Proceeds from other non-current assets | 0 | 0 | |||
| 1.5. Proceeds from issuance of compound financial instruments |
0 | 0 | |||
| 1.6. Proceeds from issuance of other financial liabilities |
5.11 | 0 | 0 | ||
| 2. Repayments relating to cash flows from financing | -48,455 | -48,288 | |||
| 2.1. Repurchase of equity instruments subsequently cancelled |
0 | 0 | |||
| 2.2. Repayment of capital to non-controlling shareholders |
0 | 0 | |||
| 2.3. Repayment of finance lease liabilities | 5.11 | -5,060 | -4,955 | ||
| 2.4. Redemption of compound financial instruments | 0 | 0 | |||
| 2.5. Repayment of other financial liabilities | 5.11 | -43,395 | -43,333 | ||
| 3. Interests | -35,274 | -36,859 | |||
| 3.1. Interest paid classified as financing | -35,330 | -36,919 | |||
| 3.2. Interest received classified as financing | 56 | 60 | |||
| 4. Dividends paid | D. | -96,964 | -96,262 | ||
| V. Net change in cash and cash equivalents | 703,777 | -10,429 | |||
| VI. Cash and cash equivalents, closing balance | A. | 1,070,708 | 366,931 |
The consolidated financial statements of the Fluxys Belgium group for the financial year ended 31 December 2022 have been prepared in accordance with the International Financial Reporting Standards, as approved by the European Union and applicable on the balance sheet date.
All amounts are stated in thousands of euro.
The preparation of financial statements requires the use of estimates and assumptions to determine the value of assets and liabilities, and to assess the positive and negative consequences of unforeseen situations and events at the balance sheet date, as well as revenues and expenses of the financial year.
Significant estimates made by the group in the preparation of the financial statements relate mainly to the valuation of the recoverable amount of property, plant and equipment, and intangible assets (see Notes 5.1 and 5.2), the valuation of rights of use and lease obligations under leases (see Notes 5.3 and 5.11), the valuation of any provisions and assets/liabilities (see Notes 5.13 and 7) and in particular the provisions for litigation and pension and related liabilities (see Note 5.14).
Due to the uncertainties inherent in all valuation processes, the group revises its estimates on the basis of regularly updated information. Future results may differ from these estimates.
Other than the use of estimates, group management also uses judgement in defining the accounting treatment for certain operations and transactions not addressed under the IFRS standards and interpretations currently in force.
Therefore, in the balance sheet, the group records the regulatory liabilities corresponding to the excess of regulated revenue received according to the real costs to be covered by the authorized regulated tariffs. This difference is transferred from the income statement to the balance sheet in the regulatory liabilities (non-current and current - See Note 5.12). Where required, the regulatory assets are accounted for in the balance sheet on the line for 'regulatory assets' when the regulated revenue received is lower than the real costs to be covered by the authorised regulated tariffs.
These latter are recognised in as much as the group considers their recovery highly likely. This accounting method (see Note 2.12) has been determined by the group, as no definitive guidance on 'rate-regulated activities' has been published to date.
The Board of Directors of Fluxys Belgium SA authorised these IFRS financial statements for issue on 29 March 2023.
The following standards and interpretations are applicable for the annual period starting from 1 January 2022
The application of these amendments has not had a significant impact on the financial statements of the group.
At the date of authorization of these financial statements, the standards and interpretations listed below have been issued but are not yet mandatory:
These standards, amendments and interpretations have not been adopted early. The application of these standards, amendments and interpretations will have no significant impact on the financial statements of the group.
172
The accounting principles and policies set out below were approved at the Fluxys Belgium Board of Directors meeting of 29 March 2023.
Changes or additions compared with the previous financial year are underlined.
The financial statements fairly present Fluxys Belgium group's financial position, results of operations and cash flows.
The group's financial statements have been prepared on the accrual basis of accounting, except for the cash flow statement.
Assets and liabilities have not been offset against each other, except when required or allowed by an international accounting standard.
Current and non-current assets and liabilities have been presented separately in the balance sheet of the Fluxys Belgium group.
The accounting policies have been applied in a coherent manner.
The consolidated financial statements are prepared as of 31 December, i.e. the parent entity's balance sheet date.
The book value of assets and liabilities at the balance sheet date is adjusted when events after the balance sheet date provide evidence of conditions that existed at the balance sheet date.
Adjustments can be made until the date of authorisation for issue of the financial statements by the Board of Directors.
Other events relating to circumstances arising after balance sheet date are disclosed in the notes to the consolidated financial statements, if significant.
The Fluxys Belgium group's consolidated financial statements have been prepared in accordance with IFRS and in particular with IFRS 3 (Business Combinations), IFRS 10 (Consolidated Financial Statements), IFRS 11 (Joint Arrangements) and IAS 28 (Investments in Associates and Joint Ventures).
The Fluxys group's consolidated financial statements include the financial statements of the parent entity and the financial statements of the entities it controls and its subsidiaries.
The investor controls an investee when he is exposed—or has rights—to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The investor has power over the investee when he holds existing rights that give the current ability to direct the relevant activities, i.e. the activities of the investee that significantly affect the investee's returns, even he does not hold the majority of the voting rights in the investee concerned.
The parent entity must consolidate the subsidiary as of the date it obtains the control over it and must cease to consolidate when it loses control over it. In this way revenues and charges of a subsidiary acquired or transferred in the course of the financial year are included in the consolidated income statement and in the consolidated statement of comprehensive income as from the date on which the parent entity acquired the control over the subsidiary and up to the date on which it ceased to control the latter.
A joint venture is a joint arrangement in which the parties exercising joint control over the undertaking have rights to the net assets of the undertaking. Joint control means contractually agreed sharing of the control exercised over an undertaking, which only exists in the cases where the decisions on the relevant activities require the unanimous consent of the parties sharing the control.
The results and assets and liabilities of associates or joint ventures are accounted for in the present consolidated financial statements in accordance with the equity method, unless the investment, or a part thereof, is classified as an asset held for sale in accordance with IFRS 5.
An investment in an associate or joint venture is initially accounted for at cost. It then integrates the share of the group in the net results and the other elements of the comprehensive result of the undertaking accounted for under the equity method. Finally, dividends distributed by this entity decrease the value of the investment.
An intangible asset is recognised as an asset if it is probable that future economic benefits attributable to the asset will flow to the entity and if the cost of the asset can be measured reliably.
Intangible assets are recognised at cost in the balance sheet (cost method), less any accumulated depreciation and any accumulated impairment losses.
Intangible assets with a limited useful life are depreciated over their useful life.
Computer software is depreciated at 20% per annum.
Subsequent expenditure is capitalised if it generates economic benefits exceeding the initial standard of performance.
Intangible assets are reviewed at each balance sheet date to identify indications of potential impairment that may have arisen during the financial year. In case such indications are noted, an estimate of the recoverable amount of the related intangible assets is made. The recoverable amount is defined as the higher of the fair value less costs to sell of an asset and its value in use.
The value in use is calculated by discounting future cash inflows and outflows generated by the continuous use of the asset and its final disposal at an appropriate discount rate.
Intangible assets are impaired when their book value exceeds the amount that can be recovered, as a result of obsolescence of these assets or due to economic or technological circumstances.
Intangible assets with an indefinite useful life are subject to an annual impairment test, and an impairment loss is recognised when their book value exceeds their recoverable amount.
The useful life, the depreciation method, as well as the potential residual value of intangible assets are reassessed at each balance sheet date and revised prospectively, if applicable.
Emission rights for greenhouse gases acquired at fair value are recognised as intangible assets at their acquisition cost. Rights granted free of charge are recognised as intangible assets at a nil book value.
The cost associated with emission of greenhouse gases in the atmosphere is recognised as an operating expense, the counterpart being a liability for the obligation to deliver allowances covering the effective emission over the period concerned (other debts). This expense is measured by reference to the weighted average cost of the acquired or granted allowances.
This liability is derecognised on the delivery of allowances to the government by withdrawing emission rights from intangible assets.
In case the allowances are insufficient to cover the emission of greenhouse gases during the financial year, the group accounts for a provision. This provision is measured by reference to the market value at the balance sheet date of the allowances yet to be purchased.
The excess emission rights not sold on the market are valued at the balance sheet date by reference to the weighted average cost of the acquired or granted allowances, or at market value if lower than the weighted average cost.
Property, plant and equipment (PPE) is recognised as an asset if it is probable that future economic benefits attributable to the asset will flow to the entity and if the cost of the asset can be measured reliably.
PPE is recognised at cost in the balance sheet (cost method), less any accumulated depreciation and any accumulated impairment losses.
Subsequent expenditure is capitalised if it generates economic benefits exceeding the initial standard of performance.
PPE is reviewed at each balance sheet date to identify indications of potential impairment that may have arisen during the financial year. In case such indications are noted, an estimate of the recoverable amount of the PPE in question is established. The recoverable amount is defined as the higher of the fair value less costs to sell of an asset and its value in use. The value in use is calculated by discounting future cash inflows and outflows generated by the continuous use of the asset and its final disposal at an appropriate discount rate.
Subsidies related to property, plant and equipment as well as contributions by third parties in the funding of such assets are deducted from the acquisition cost of these assets.
PPE is depreciated over its useful life.
Each significant component of PPE is recognised separately and depreciated over its useful life.
The depreciation method reflects the rate at which the group expects to consume the future economic benefits related to the asset, taking into account the time during which the assets may generate regulated revenue.
The regulated investments intended to increase the security of supply in Europe are depreciated under a diminishing balance method, which more accurately reflects the rate at which the group expects to consume the future economic benefits of these assets. This is a specific list of regulated infrastructure investments, which are essential for gas transmission in Europe and form an integral part of the RAB.
The methods and durations of depreciation used are as follows: Straight-line method:
• 50 years for transmission pipelines in Belgium, terminalling facilities and tanks;
In line with the new tariff method applied since 01.01.2020, all investments (new and existing) in gas transmission pipelines are fully depreciated by December 2049 at the latest.
176
• This method only applies for investments made to ensure security of supply: decliningbalance.
The useful life, the depreciation method, as well as the potential residual value of property, plant and equipment are reassessed at each balance sheet date and revised prospectively, if applicable.
A contract is or contains a lease if it conveys a right to control the use of an identified asset for a period of time in exchange for a consideration.
To determine whether a lease confers the right to control use of a determined asset for a determined period of time, the entity must appreciate whether, throughout the period of use, it has the right to:
To determine the duration of the lease, any options for renewal or termination are considered, as required under IFRS 16, taking into account the probability of exercising the option as well as whether it is under the control of the lessee.
At the start of the lease, the lessee recognises a right-of-use asset and a lease obligation.
The group recognises right-of-use assets on the date of the start of the contract, i.e. the date on which the asset becomes available for use. These assets are valued at the initial cost of the lease obligation minus amortisation and any depreciation, adjusted to take into account any revaluations of the lease obligation. The initial cost of the right-of-use assets includes the present value of the lease obligation, the initial costs incurred by the lessee, rent payments made on the start date or before that date, minus any incentives obtained by the lessee. These assets are depreciated over the estimated lifetime of the underlying asset or over the duration of the contract if this period is shorter, unless the group is sufficiently certain of obtaining ownership of the asset at the end of the contract.
Right-of-use assets are presented separately from other assets as a different entry under non-current assets.
The lease obligation is valued at the present value of the rent payments that have not yet been paid. The present value of the rent payments must be calculated using the interest rate implicit in the lease if it is possible to determine that rate. If not, the lessee must use its incremental borrowing rate.
The incremental borrowing rate is the interest rate that the lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment.
Over the duration of the contract, the lessee values the lease obligation as follows:
The services included in leases do not form part of the lease debt.
Lease obligations are presented in a separate entry under current and non-current interest-bearing liabilities (see note 5.11).
For short-term leases (duration of 12 months or less), the Fluxys Belgium group registers a lease expense.
To determine the criteria for a low-value lease, a threshold has been determined, except for vehicles, which are included in the group of vehicles leased for more than one year without applying the value criteria.
For short-term leases, and low-value leases, the effect on profit/loss is not significant.
178
In the consolidated income statement, the interest charge on the lease obligation is presented separately from the depreciation charge that applies to the right-of-use asset. In the cash flow statement, the cash flows will be presented as follows:
The group leases out some facilities under finance lease as a lessor.
Assets under finance lease are assets for which the group substantially transfers risks and rewards related to the economic ownership to the lessee. Assets leased under such contracts are recognised on the balance sheet as receivables in an amount equal to the net investment in the lease contract in question. Lease payments received are apportioned between financial income and repayments of the lease receivable so as to achieve a constant rate of return on the net investment by the group in the finance lease contract.
When the classification of contracts under finance lease is based on the present value of the minimum lease payments, the most pertinent criteria adopted is the following: a contract is considered a finance lease if the present value of the minimum lease payments amounts to at least 90% of the fair value of the leased asset at the inception of the lease contract.
No residual value is assumed for gas transmission assets in Belgium, due to the specific nature of the activities concerned.
Financial assets and liabilities are recognised when the group becomes party to the instrument's contractual terms.
The group has to derecognise a financial asset if and only if the contractual rights on the cash flows of the financial asset expire, or where it transfers almost all the risks and advantages inherent to the ownership of the financial asset to a third party.
If the group neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and retains control of the transferred asset, the group continues to recognise the financial asset to the extent of its continuing involvement and recognises a related liability for the amount received.
If the group keeps almost all the risks and advantages inherent to the ownership of the financial asset, it continues to recognise the whole financial asset and recognises a financial liability for the consideration received.
When a financial asset measured at amortised cost is derecognised, the difference between the amortised cost and the sum of the considerations received is transferred to the income statement.
When an investment in equity instruments until now measured at fair value with changes to other comprehensive income are derecognised, the accumulated profit/loss recognised previously in other comprehensive income is not reclassified to net income.
The entity derecognises a financial liability only if this liability is extinguished, i.e. once the obligation is fulfilled, cancelled or it expires.
The difference between the book value of an extinguished financial liability and the consideration paid, including, where applicable, the assets (non-cash) transferred and the liabilities acquired must be recognised in the income statement.
The Fluxys Belgium group values the unconsolidated equity instruments at fair value with changes to other comprehensive income.
However, given the materiality of certain instruments and the unavailability of recent market values, certain equity instruments are accounted for at the initial cost.
The dividends received for these equity instruments are recognised in financial income under the item 'Dividends from unconsolidated entities'.
Cash investments in the form of bonds or commercial paper, having a maturity date exceeding three months, are reported as financial assets measured at amortised cost. These are shown in the balance sheet under non-current 'other financial assets' and under current 'investments'.
Cash and cash equivalents include short-term investments, short-term bank deposits and deposits readily convertible to a known cash amount and which are subject to an insignificant risk of changes in value (maximum of three months).
Cash and cash equivalents held are reported as financial assets measured at amortised cost.
The economic model used by the Fluxys Belgium group to manage financial assets aims to hold them in order to obtain contractual cash flows. The sales of financial assets are rare, and the group does not expect to proceed with such sales in the future, except in the case of an increased credit risk for the assets over and above the policy advocated by the group. A sale may also be motivated by an unexpected financing need.
Where the conditions required to be qualified as financial assets valued at amortised cost are not met, these financial assets concerned are valued at fair value with changes to net profit/loss.
Trade and other receivables are stated at their face value reduced by any amounts deemed unrecoverable.
When the time value of money is significant, trade and other receivables are discounted.
Impairment losses are recognised when the book value of these items at balance sheet date exceeds their recoverable amount.
Expected credit losses on financial assets accounted for at amortised cost are calculated using an individual approach, based on the credit quality of the counterparty and the maturity of the financial asset.
Expected credit losses are calculated using a probability of default over 12 months where the credit risk is low.
A financial asset is impaired where one or more events have occurred with a negative effect on the future estimated cash flows of this financial asset. The indications of the impairment of a financial asset encompass data that may be observed on the following events:
If the economic forecast (for example gross domestic product) deteriorates over the course of next year, which could lead to an increase in the number of defaults, the historical default rates are adjusted. At each balance sheet date, the historical default rates observed are updated and the changes in the forecast estimates are analysed.
Interest-bearing liabilities are recognised at the net amount received. Following initial recognition, interest-bearing liabilities are recorded at amortised cost. The difference between the amortised cost and the redemption value is recognised in the income statement under the effective interest rate method over the term of the liabilities.
Trade payables are stated at face value.
When the time value of money is significant, trade payables are discounted.
Inventories are valued at the lower of cost and net realisable value. Inventories are written down to account for:
This impairment on inventories is recognised in the income statement in the period in which they arise.
Gas inventory changes are valued under the weighted average cost method.
Supplies and consumables are valued under the weighted average cost method.
Work in progress for third parties is valued at cost, including indirectly attributable costs. When the outcome of a contract can be reliably estimated, contract revenue and expenses are recognised as revenue and expenses respectively by reference to the stage of completion of the contract at balance sheet date. Any expected loss is recognised immediately as an expense in the income statement.
Borrowing costs directly attributable to the acquisition, building or production of assets requiring a substantial period of time to get ready for their intended use (property, plant and equipment, investment property, etc.) are added to the costs of the assets concerned until they are ready for use or sale.
The amount of the borrowing costs to be capitalised is the actual cost incurred in borrowing the funds, as reduced by income from any temporary investment of these funds.
Provisions are recognised as a liability in the balance sheet when they meet the following criteria:
No provision is recognised if the above conditions are not met.
The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date, in other words the amount the entity reasonably expects to have to pay to discharge the obligation at balance sheet date, or to transfer it to a third party at the same date.
This estimation is based either on a request from a third party or on estimates or detailed calculations. For all provisions recognised, management considers that the probability of an outflow of resources exceeds 50%.
When the time value of money is significant, provisions are discounted. The discount rate used is a rate before tax reflecting current market estimates of the time value of money and taking into account any risks associated with the type of liability in question.
All risks incurred by the group that do not comply with the above-mentioned criteria are disclosed as contingent liabilities in the Notes.
Some companies in the Fluxys group have established supplementary 'defined benefit' or 'defined contribution' pension plans. Benefits provided under these plans are based on the number of years of service and the employee's salary.
'Defined benefit' pension plans enable employees to benefit from a capital sum calculated on the basis of a formula which takes account of their annual salary at the end of their career and their seniority when they retire.
'Defined contribution' pension plans provide employees with a capital sum accumulated from personal and employer contributions, based on the salary.
In Belgium, the law requires that the employer guarantee a minimum return for defined contribution, which varies based on the market rates.
The accounting method used by the group to value these 'defined contribution pension plans, with a guaranteed minimum return', is identical to the method used for 'defined benefit' plans.
In case of death before retirement, these plans provide a capital sum for the surviving spouse, as well as allowances for orphans.
Certain group companies offer their employees post-employment benefits such as the reimbursement of medical costs and price subsidies, and other long-term benefits (seniority bonuses).
These liabilities are valued annually by a qualified actuary.
Regular payments made in relation to the supplementary pension plans are recognised as expenses at the time they are incurred.
Provisions for pensions and other collective agreements are reported in the balance sheet in accordance with IAS 19 (Employee Benefits), using the projected unit credit method (PUCM).
The current value of post-employment benefits is determined at each balance sheet date based on the projected salary estimated at the end of the employee's career, the rate of inflation, life expectancy, staff turnover and the expected age of retirement. The present value of defined benefit obligations is determined using a discount rate based on high-quality bonds with maturity dates close to the weighted average maturity of the plans concerned and which are denominated in the currency in which the benefits are to be paid.
The amount accounted for in respect of post-employment liabilities corresponds to the difference between the current value of future obligations and the fair value of assets in the plan destined to cover them. Any deficit resulting from this valuation is subject to the recognition of a provision to cover this risk. In the opposite case, an asset is recognised in line with the surplus of the defined benefit pension plan, capped at the current value of any future reimbursement from the plan or any reduction in future contributions to the plan.
The remeasurements of the liabilities or assets in the balance sheet comprise:
These remeasurements are directly recognised in equity through the other items in comprehensive income.
184
The liabilities of the group with regard to 'defined contribution' plans are limited to the employer contributions paid recorded in the results.
The other long-term benefits are accounted for in the same way as the post-employment benefits, but revaluations are fully accounted for in the financial results in the financial year in which they occur.
The group accounts for operating revenue as it meets a service obligation by supplying the customer with the promised good or service and as this latter obtains control thereof.
The Fluxys Belgium group uses a five-stage approach to determine whether a contract entered into with a customer may be accounted for and the way in which revenue should be recognised:
Group revenues mainly come from standard regulated contracts for which both the services to be provided and the price of the service are clearly identified.
Fluxys Belgium and its subsidiaries transfer the control of their regulated services progressively and in doing so meet their service obligation and account for operating revenue progressively. It should be noted that the revenue from regulated activity is recognised based on reserved capacities.
Furthermore, the Fluxys Belgium group makes sales of gas that are necessary for balancing operations and its operational needs. These services, fulfilled at a specific time, are recognised in operating revenue at the time of their fulfilment. From 1 June 2020, these balancing operations are conducted by the joint venture with Balansys.
Regulated income received by the group may generate a gain or a loss compared with the target rate of return on the capital invested. Gains are reported and recognised as regulatory liabilities, whereas losses are included in operating revenue to offset the accounting of regulatory assets. The Group has no regulatory assets in the published periods.
The regulatory framework is explained in further detail in the chapter on 'Regulatory and legal framework' of the annual report.
In note 4 - Segment income statement, the distinction is shown between the revenue invoiced and the revenue recognised. The latter includes the revenue invoiced, but also the movements in regulatory assets and liabilities.
The following table provides more detailed information on the Group's services (performance obligations), types of contract, pricing, and the way in which operating revenue is recognised. Most of this revenue is regulated.
186
| Legal entity |
Revenue stream |
Performance obligation: nature, customer and timing of satisfaction |
Contract type and pricing |
|---|---|---|---|
| Fluxys Belgium |
Transmission services |
Nature of performance obligation: sale of capacity and related services in the pipeline infrastructure to its customers to |
Regulated Standard Transmission Agreement. |
| transmit natural gas to distribution system operators, power stations and major industrial end-users in Belgium or to transport natural gas to a border point for transmission to other end-user markets in Europe. Customers: gas shippers reserve capacity slots (short + long term contracts) Revenue recognition: the performance obligation consists in making these capacities available for the customers for use at the customers' discretion (cf. IFRS 15.26 (e)). Basically, the contracts between Fluxys Belgium and their customers determine that the latter reserve a certain capacity that can be used over a certain period, at the choice of the customer. Thus, Fluxys Belgium will transfer to the customer a series of services that are substantially the same and that have the same pattern of transfer to the customer (IFRS 15.22 (b)). Each service in the series provided by Fluxys Belgium is a performance obligation satisfied over time, as described by IFRS 15.35a (the customer simultaneously receives and consumes the benefits provided by Fluxys' performance as Fluxys performs). Therefore, the reserved capacities are invoiced and recognised monthly over the period covered by the contract related to the capacities reserved (in accordance with IFRS 15.39 and IFRS 15.B15), i.e. over time recognition. |
Regulated tariffs are expressed in €/kWh/h/year |
||
| Fluxys Belgium |
Storage capacity service |
Nature of performance obligation: storage services enabling customers to use buffer capacity flexibly according to their needs. The gas is stored in the underground facilities in Loenhout, Belgium. Most of the revenues are generated by the sale of standard bundled packages, composed of injection, storage and withdrawing capacity throughout the storage season in fixed proportion. Such |
Regulated Standard Storage Agreement (in combination with a regulated Standard Transmission Agreement to enable injecting into and withdrawing from the gas grid – see above). Regulated tariffs for storage capacity are |
term.
expressed in €/standard bundled unit per year. Tariffs for separately purchased storage capacity are
contracts can be both long term and short
Customers: As for transmission, the revenues are based on the reserved capacities.
Current tax is determined in accordance with local tax regulations and calculated on the income of the parent entity, subsidiaries and joint operations.
Deferred tax liabilities and assets reflect the future taxable and deductible temporary differences, respectively, between the book base and the tax base of assets and liabilities.
Deferred tax liabilities and assets are measured at the enacted or substantially enacted new income tax rate applicable to the financial year in which the underlying asset is expected to be realised or the underlying liability is expected to be settled.
Any later change in rates requires a change to the deferred taxes. This is accounted for via the other items of the global profit/loss for the part concerning operations that are usually accounted for in these items. The balance of the change in deferred taxes is accounted for in the net profit/loss for the period.
Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the future deductible temporary differences can be offset.
The consolidation scope and percentage of interests in consolidated entities remained identical to those of 31 December 2021.
| Fully consolidated entities | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Name of the subsidiary |
Registered office Entity number % owner | ship | Core business |
Currency | Balance sheet date |
||||||
| Fluxys LNG SA |
Rue Guimard 4 B - 1040 Brussels |
0426 047 853 | 100.00% | LNG terminalling |
€ | 31 December |
|||||
| Flux Re SA | Rue de Merl 74 L - 2146 Luxembourg |
- | 100.00% Reinsurance entity |
€ | 31 December |
| Entities accounted for using the equity method | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Name of the subsidiary |
Entity % owner Core Balance Registered office Currency number ship business sheet date |
|||||||||
| Balansys SA |
Rue de Bouillon 59-61 |
Balancing | 31 | |||||||
| L - 1248 Luxembourg |
- | 50.00% | operator | € | December |
Special rights are attached to the special share of the Belgian State in Fluxys Belgium, other than the normal rights attached to all other shares. These special rights are exercised by the Federal Minister in charge of Energy and can be summarised as follows:
There are no other significant restrictions that may limit the ability of the group to access or use its assets and discharge its liabilities. However, it must be noted that the assets of Flux Re are destined to cover the risk of the company in the scope of its reinsurance activities. The total assets in the balance sheet of Flux Re came to €164.1 million as at 31- 12-2022 compared to €173.2 million as at 2021 year-end.
Balansys SA is a company governed by Luxembourg law in which 50% of shares are held by Fluxys Belgium SA and 50% by Creos Luxembourg SA. The objective of this company is to integrate the Belgian and Luxembourg natural gas markets. As part of this objective, an agreement has been signed between the shareholders that stipulates that Balansys SA shares may not be encumbered with any guarantees or transferred, unless for the benefit of another transmission network operator and with the agreement of the other shareholder.
The key figures of Balansys are shown in the table below:
| Entity accounted for using the equity method | 31-12-2022 In thousands of € (*) |
31-12-2021 In thousands of € (*) |
|---|---|---|
| Non-current assets | 0 | 0 |
| Current assets | 100,112 | 66,040 |
| Equity | 100 | 100 |
| Non-current liabilities | 30,060 | 18,061 |
| Current liabilities | 69,952 | 48,879 |
| Operating revenue | 461,307 | 168,837 |
| Operating expenses | 460,282 | -168,546 |
| Net financial result | -989 | -280 |
| Income tax expenses | -37 | -11 |
| Net profit/loss for the period | 0 | 0 |
| Entities accounted for by the equity method | 50 | 50 |
| Result of entities accounted for by the equity method |
0 | 0 |
(*) Figures before intercompany eliminations, on a 100% basis and subject to approval of the accounts by the governing bodies and the general assembly of the entity.
Fluxys Belgium group carries out activities in the following operating segments: transmission, storage, LNG terminalling activities in Belgium and other activities.
The segment information is based on a classification into these operating segments.
Transmission activities comprise all operations subject to the Gas Act related to transmission of gas in Belgium.
Storage activities comprise all operations subject to the Gas Act related to storage of gas at Loenhout in Belgium.
Terminalling activities comprise all activities subject to the Gas Act related to the LNG terminal at Zeebrugge in Belgium.
The three aforementioned activities are regulated and strictly separated. Offsetting balances between these activities is not authorised.
The segment 'other activities' comprises other services rendered by Fluxys Belgium group such as the operational support of the IZT and ZPT terminals2 in Belgium and work for third parties.
The Fluxys Belgium group operates mainly in Belgium and does not therefore publish information by geographical sector.
The Chief Operating Decision Maker (CODM) is the CEO.
Transactions between operating segments mainly relate to capacity reservations by one segment subject to the Gas Act with another. These transactions are charged at the same regulatory tariffs as for external clients.
The group's main customers are users of transmission and storage services and of the Zeebrugge LNG Terminal.
2 Interconnector Zeebrugge Terminal (IZT): Fluxys Belgium rents part of its installations to IZT under a finance lease and also provides operational support and maintenance. The cooperation with IZT is based on contracts (no participation by Fluxys Belgium).
Zeepipe Terminal (ZPT): Fluxys Belgium contributes to the operations of ZPT on a contractual basis (no participation).
| # Oneteam Onetarget O OC | |
|---|---|
| ------------------------------------- | -- |
| Segment income statement at 31-12-2022 | In thousands of € | |||||
|---|---|---|---|---|---|---|
| Trans mission |
Storage | Terminal ling |
Other | Elimination between segments |
Total | |
| Operating revenue | 710,702 | 34,817 | 157,292 | 20,666 | -10,918 | 912,559 |
| Sales and services to external customers |
866,993 | 15,882 | 297,722 | 21,033 | 0 1,201,630 | |
| Transactions with other segments |
1,312 | 8,473 | 1,500 | -367 | -10,918 | 0 |
| Changes in regulatory assets and liabilities |
-157,603 | 10,462 -141,930 | 0 | 0 -289,071 | ||
| Sales of gas related to balancing operations and operational needs |
138,655 | 10,327 | 129,584 | 0 | 0 | 278,566 |
| Sales of gas related to balancing of operations and operational needs |
273,348 | 8,673 | 163,699 | 0 | 0 | 445,720 |
| Changes in regulatory liabilities |
-134,693 | 1,654 | -34,115 | 0 | 0 -167,154 | |
| Other operating income | 5,426 | 129 | 4,736 | 5,999 | -78 | 16,212 |
| Consumables, merchandise and supplies used |
-1,144 | 1 | -34 | -4,405 | 0 | -5,582 |
| Purchase of gas related to balancing of operations and operational needs |
-139,057 | -9,924 -126,197 | 0 | 0 -275,178 | ||
| Miscellaneous goods and services |
-419,316 | -9,600 | -40,577 | -6,946 | 10,918 -465,521 | |
| Employee expenses | -96,731 | -7,216 | -23,360 | -5,702 | 78 -132,931 | |
| Other operating expenses | -3,944 | -588 | -374 | -52 | 0 | -4,958 |
| Depreciations | -111,009 | -8,361 | -47,656 | -1,025 | 0 -168,051 | |
| Provisions for risks and charges | 3,970 | -15 | 99 | 2,938 | 1 | 6,993 |
| Impairment losses | -14,173 | 0 | -647 | 16 | 0 | -14,804 |
| Profit/loss from continuing operations |
73,379 | 9,570 | 52,866 | 11,489 | 1 | 147,305 |
| Change in the fair value of financial instruments |
0 | 0 | 0 | -1,298 | 0 | -1,298 |
| Financial income | 2,759 | 306 | 567 | 957 | 0 | 4,589 |
| Finance costs | -26,131 | -2,894 | -9,788 | -1,992 | 0 | -40,805 |
| Profit/loss before taxes | 50,007 | 6,982 | 43,645 | 9,156 | 1 | 109,791 |
| Income tax expenses | -26,063 | |||||
| Net profit/loss for the period | 83,728 |
| Segment income statement at 31-12-2021 | Trans mission |
Storage | Terminal ling |
Others | Elimination between segments |
In thousands of € Total |
|---|---|---|---|---|---|---|
| Operating revenue | 384,346 | 33,536 | 145,680 | 26,343 | -16,714 | 573,191 |
| Sales and services to external customers |
286,969 | 32,791 | 137,826 | 20,135 | 0 | 477,721 |
| Transactions with other segments |
892 | 8,137 | 1,477 | 6,208 | -16,714 | 0 |
| Changes in regulatory assets and liabilities |
96,485 | -7,392 | 6,377 | 0 | 0 | 95,470 |
| Sales of gas related to balancing operations and operational needs |
20,038 | 2,948 | 9,392 | 0 | 0 | 32,378 |
| Sales of gas related to balancing of operations and operational needs |
65,830 | 2,948 | 22,975 | 0 | 0 | 91,753 |
| Changes in regulatory liabilities |
-45,792 | 0 | -13,583 | 0 | 0 | -59,375 |
| Other operating income | 4,256 | 115 | 2,467 | 6,327 | -58 | 13,107 |
| Consumables, merchandise and supplies used |
-991 | -5 | -27 | -2,399 | 0 | -3,422 |
| Purchase of gas related to balancing of operations and operational needs |
-20,038 | -2,948 | -9,392 | 0 | 0 | -32,378 |
| Miscellaneous goods and services |
-117,044 | -7,838 | -26,379 | -11,800 | 16,713 | -146,348 |
| Employee expenses | -80,839 | -6,510 | -20,409 | -4,850 | 59 | -112,549 |
| Other operating expenses | -3,841 | -523 | -462 | -248 | 0 | -5,074 |
| Depreciations | -116,067 | -9,568 | -47,520 | -838 | 0 | -173,993 |
| Provisions for risks and charges | -2,117 | 28 | -121 | -4,861 | 1 | -7,070 |
| Impairment losses | 1 | 0 | 0 | -22 | 0 | -21 |
| Profit/loss from continuing operations |
67,704 | 9,235 | 53,229 | 7,652 | 1 | 137,821 |
| Change in the fair value of financial instruments |
0 | 0 | 0 | -114 | 0 | -114 |
| Financial income | 125 | 14 | 32 | 971 | 0 | 1,142 |
| Finance costs | -24,251 | -2,711 | -10,011 | -1,402 | 0 | -38,375 |
| Profit/loss before taxes | 43,578 | 6,538 | 43,250 | 7,107 | 1 | 100,474 |
| Income tax expenses | -24,953 | |||||
| Net profit/loss for the period | 75,521 |
194
Analysis of operating revenue by business segment:
| Operating revenue | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Transmission in Belgium | 4.1.1 | 709,390 | 383,454 | 325,936 |
| Storage in Belgium | 4.1.1 | 26,344 | 25,399 | 945 |
| Terminalling in Belgium | 4.1.1 | 155,792 | 144,203 | 11,589 |
| Other operating income |
4.1.2 | 21,033 | 20,135 | 898 |
| Total | 912,559 | 573,191 | 339,368 |
Operating revenue in the 2022 financial year amounted to €912,559 thousand, which represents an increase of €339,368 thousand as compared with the previous financial year.
Revenue from these services aims to ensure an authorised return on capital invested and to cover the operating expenses related to these services, while integrating the productivity efforts to be accomplished by the network operator, as well as permitted depreciation.
The bulk of the increase in sales and regulated services relates to transmission services (€325,936 thousand). This increase is mainly due to the accounting settlement of the exceptional solidarity contribution of €300 million. The regulatory nature of this contribution makes the impact on the result neutral. Sales increased significantly in 2022, as the infrastructure was largely used to support the security of supply of surrounding countries. These additional sales, including auction premiums, do not benefit shareholders but are offset by a higher allocation to regulatory liabilities.
Revenue from storage services is slightly up compared to 2021. Sales are down in 2022, but this decrease is offset by the use of regulatory liabilities in accordance with the tariff proposal.
With regard to terminalling revenue, this is up €11,589 thousand, largely following spot slot auction sales. Almost all of these sales are allocated to regulatory liabilities.
| Operating expenses excluding depreciations, impairment losses and provisions |
In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Consumables, merchandise and supplies used |
4.2.1 | -5,582 | -3,422 | -2,160 |
| Miscellaneous goods and services | 4.2.2 | -465,521 | -146,348 | -319,173 |
| Employee expenses | 4.2.3 | -132,931 | -112,549 | -20,382 |
| Other operating expenses | 4.2.4 | -4,958 | -5,074 | 116 |
| Total operating expenses | -608,992 | -267,393 | -341,599 |
This item mainly includes costs for transport material taken out of inventory for maintenance and repair projects as well as costs for work carried out on behalf of third parties.
Miscellaneous goods and services are mainly composed of:
| 31-12-2022 | 31-12-2021 Change | ||
|---|---|---|---|
| Purchase of equipment | -6,324 | -8,674 | 2,350 |
| Rent and rental charges (1) | -7,623 | -5,496 | -2,127 |
| Maintenance and repair expenses | -24,601 | -24,365 | -236 |
| Goods and services supplied to the group | -19,376 | -6,540 | -12,836 |
| Third-party remuneration | -354,502 | -52,496 -302,006 | |
| Royalties and contributions | -40,083 | -37,681 | -2,402 |
| Non-personnel related insurance costs | -6,451 | -6,096 | -355 |
| Other miscellaneous goods and services | -6,561 | -5,000 | -1,561 |
| Total | -465,521 | -146,348 -319,173 |
(1)Amounts that relate mainly to services that do not meet the definition of a lease under IFRS 16.
The main increase in this item ensues from the exceptional solidarity contribution of €300 million that the Belgian State established for the operator of the natural gas transmission network to support the Belgian population during the energy crisis. Goods and services supplied to the group, and royalties, are also up.
This evolution, apart from the solidarity contribution, is in line with the reference framework for the 2020-2023 regulatory period.
Third-party remuneration increased by €302,006 thousand. This evolution is largely due to the solidarity contribution of €300 million. Another important cost is related to the study with a view to installing a new electric compressor at our storage facility in Loenhout.
The increase in goods and services supplied to the group reflects the high price of electricity, but also the increase of activity in the terminal and the transmission network. The cost of electricity is up €9,272 thousand compared to 2021.
As for the €2,402 thousand increase in royalties and contribution compared to 2021, this is largely explained by compensation paid by Flux Re to Fluxys SA (which is offset by using the corresponding provision of 2021). The use of this provision in 2022 compensates the cost of the compensation paid.
The increase in rent and rent expense comes from the higher prices of software.
Other miscellaneous goods and services (see note 4.2.2.) include the total remuneration paid to the auditor by Fluxys Belgium NV and its consolidated subsidiaries. These fees are presented below.
| Auditor remuneration | In thousands of € | |||
|---|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | ||
| Audit fees | -179 | -152 | -27 | |
| Other non-audit services | -38 | -18 | -20 | |
| Total remuneration | -217 | -170 | -47 |
The amount of other (non-audit) services provided by the statutory auditor and persons professionally related to him are in line with article 3:64 and 65 of the Code of companies and associates and approved by the Audit Committee in advance. They mainly relate to ad-hoc and limited assurance attestations.
Employee expenses have increased €20,382 thousand as compared with 2021, among other things as a result of indexation.
The average headcount of the Group is slightly up, from 912 in 2021 to 914 in 2022. Expressed in FTE (full-time equivalents), these figures convert to 883.4 in 2022 compared to 881.4 in 2021.
| Workforce | |||||
|---|---|---|---|---|---|
| Financial year | Preceding financial year | ||||
| Total number of staff |
Total number Total in FTE |
Total in FTE | |||
| Average number of employees | 914 | 883.4 | 912 | 881.4 | |
| Fluxys Belgium | 865 | 836.1 | 864 | 835.3 | |
| Executives | 308 | 300.2 | 295 | 286.7 | |
| Employees | 557 | 535.9 | 569 | 548.6 | |
| Fluxys LNG | 48 | 46.8 | 47 | 45.5 | |
| Executives | 3 | 2.9 | 3 | 3.1 | |
| Employees | 45 | 43.9 | 43 | 42.4 | |
| Flux Re | 1 | 0.5 | 1 | 0.5 | |
| Headcount at balance sheet date |
939 | 908.6 | 918 | 886.2 | |
| Fluxys Belgium | 891 | 862.0 | 869 | 839.2 | |
| Executives | 321 | 313.1 | 300 | 291.3 | |
| Employees | 570 | 548.9 | 569 | 547.9 | |
| Fluxys LNG | 47 | 46.2 | 48 | 46.5 | |
| Executives | 3 | 2.9 | 3 | 2.9 | |
| Employees | 44 | 43.3 | 45 | 43.6 | |
| Flux Re | 1 | 0.5 | 1 | 0.5 |
Other operating expenses include property taxes, local taxes, and losses on disposals or retirements of property, plant and equipment.
Depreciation charges on property, plant and equipment over the period are down by €7,343 thousand as compared with the previous financial year because the depreciation for certain historic assets came to an end in the previous financial year.
However, depreciation charges on intangible assets over the period are up by €1,541 thousand as compared with the previous financial year following the higher level of investments in intangible assets over these past few years.
| Depreciations, impairment losses and provisions | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Depreciations | 4.2.5 | -168,051 | -173,993 | 5,942 |
| Intangible assets | -12,385 | -10,844 | -1,541 | |
| Property, plant and equipment | -150,915 | -158,258 | 7,343 | |
| Right of Use Assets | -4,751 | -4,891 | 140 | |
| Provisions for risks and charges | 4.2.6 | 6,993 | -7,070 | 14,063 |
| Impairment losses | -14,804 | -21 | -14,783 | |
| Inventories | -14,819 | 1 | -14,820 | |
| Trade receivables | 15 | -22 | 37 | |
| Total depreciations, impairment losses and provisions |
-175,862 | -181,084 | 5,222 |
The significant change in provisions, of €14,063 thousand as compared with the previous financial year can chiefly be explained by the increase in discount rates, which ended up resulting in a reduction of the provision for employee benefits and by the use of a provision relating to a claim established during the previous financial year, the compensation for which was paid in 2022 (see Note 4.2.2.).
An impairment loss on gas stocks of €17,714 thousand was recorded in 2022 to reflect the price of gas on 31/12/2022 which was considerably lower than the average price of gas in stock. This was partly offset by a partial reversal of the impairment of the spare parts inventory.
200 Contents Looking to the future Our profile Financial resilience Digitalisation Environment Social Governance Corporate Governance Declaration Financial situation 201
| Financial income | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Dividends from unconsolidated entities |
0 | 0 | 0 | |
| Financial income from leasing contracts |
4.3.1 | 56 | 60 | -4 |
| Interest income on investments and cash equivalents |
4.3.2 | 3,970 | 927 | 3,043 |
| Other interest income | 4.3.2 | 83 | 30 | 53 |
| Unwinding of discounts on provisions | 4.4.2 | 0 | 126 | -126 |
| Other financial income | 480 | 125 | 355 | |
| Total | 4,589 | 1,268 | 3,321 |
Financial income from leasing contracts relates to the Interconnector Zeebrugge Terminal (IZT) facilities.
Interest on investments and cash equivalents mainly comes, in 2022, from investments recognised at amortised cost in accordance with IFRS 9. The amount of this interest is up as compared with 2021, following the increase in interest rates.
| Finance costs In thousands of € |
||||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Borrowing interest costs | 4.4.1 | -39,292 | -37,338 | -1,954 |
| Unwinding of discounts on provisions |
4.4.2 | -383 | 0 | -383 |
| Interest charges on leasing contracts |
-890 | -983 | 93 | |
| Other finance costs | -240 | -180 | -60 | |
| Total | -40,805 | -38,501 | -2,304 |
Borrowing interest costs primarily include interest on the loans from the European Investment Bank and Fluxys, on bonds and on regulatory liabilities.
This item almost exclusively concerns employee benefits that are recognised and valued in accordance with IAS 19 and includes, apart from the unwinding of discounts on provisions, returns from associated assets, and actuarial gains and losses recognised in profit/loss. The change is mainly associated with an increase in the discount rates at yearend.
202
Income tax expense is analysed as follows:
| Income tax expenses | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Current tax | 4.5.1 | -35,730 | -37,137 | 1,407 |
| Deferred tax | 4.5.2 | 9,667 | 12,184 | -2,517 |
| Total | 4.5.3 | -26,063 | -24,953 | -1,110 |
Income tax expenses are up €1,110 thousand as compared with the preceding financial year. This change can essentially be explained by the following factors:
This increase was partly compensated by the deduction for energy efficiency investments obtained by Fluxys LNG. The amount of this deduction for the year 2022 is estimated at €4,366 thousand.
Income tax expenses include both current and deferred taxes, which are detailed separately below.
| 4.5.1. Current tax | In thousands of € | ||
|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | |
| Income taxes on the result of the current period |
-36,052 | -36,465 | 413 |
| Taxes and withholding taxes due or paid |
-35,066 | -36,938 | 1,872 |
| Excess of payment of taxes and withholding taxes (included in assets) |
-1,213 | 47 | -1,260 |
| Estimated additional taxes (included in liabilities) |
227 | 426 | -199 |
| Adjustments to previous years' current taxes |
322 | -672 | 994 |
| Total | -35,730 | -37,137 | 1,407 |
Current tax decreased by €1,407 thousand in 2022.
| 4.5.2 Deferred tax | In thousands of € | ||||
|---|---|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | |||
| Relating to origination or reversal of temporary differences |
9,667 | 12,184 | -2,517 | ||
| Differences arising from the valuation of property, plant and equipment |
11,378 | 12,094 | -716 | ||
| Changes in provisions | 263 | -28 | 291 | ||
| Other changes | -1,974 | 118 | -2,092 | ||
| Relating to tax rate changes or to new taxes | 0 | 0 | 0 | ||
| Relating to changes in accounting policies and errors |
0 | 0 | 0 | ||
| Relating to changes in fiscal status of entity or shareholders |
0 | 0 | 0 | ||
| Total | 9,667 | 12,184 | -2,517 |
Deferred tax is primarily influenced by the difference between the book value and the tax base of property, plant and equipment.
The deferred tax profit decreased by €2,517 thousand compared to 2021. This decrease can primarily be explained by adjustments of the tax base for financial assets.
204 Contents Looking to the future Our profile Financial resilience Digitalisation Environment Social Governance Corporate Governance Declaration Financial situation 205
| 4.5.3. Reconciliation of expected income tax rate and effective average income tax rate |
In thousands of € | |||
|---|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | ||
| Income tax as per applicable tax rate – Financial year |
-27,448 | -25,119 | -2,329 | |
| Profit/loss before taxes | 109,791 | 100,474 | 9,317 | |
| Applicable tax rate | 25.00% | 25.00% | 0% | |
| Elements that justify transition to the effective average tax rate |
1,063 | 838 | 225 | |
| Income tax rate differences between jurisdictions |
-58,0 | 5 | -63 | |
| Changes in tax rates | 0 | 0 | 0 | |
| Tax-exempt income | 0 | 0 | 0 | |
| Non-deductible expenses | -1,396,0 | -1,375 | -21 | |
| Taxable dividend income | 0 | 0 | 0 | |
| Deductible notional interest cost | 0 | 0 | 0 | |
| Other (1) | 2,517 | 2,208 | 309 | |
| Income tax as per effective average tax rate – Financial year |
-26,385,0 | -24,281 | -2,104 | |
| Profit/loss before taxes | 109,791 | 100,474 | 9,317 | |
| Average effective tax rate | 24.03% | 24.17% | -0.14% | |
| Taxation of tax-free reserves | 0 | 0 | 0 | |
| Adjustments to previous years' current taxes (1) | 322 | -672 | 994 | |
| Total income tax expense | -26,063 | -24,953 | -1,110 |
(1) In 2022, Fluxys LNG obtained the deduction for energy efficiency investments for the year 2021. This tax advantage is incorporated into the regulated tariffs.
The average effective tax rate for 2022 amounted to 24.03% compared with 24.17% the previous year.
| Net profit/loss for the period | In thousands of € | |||
|---|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | ||
| Non-controlling interests | 0 | 0 | 0 | |
| Group share | 83,728 | 75,521 | 8,207 | |
| Total profit/loss for the period | 83,728 | 75,521 | 8,207 |
The consolidated net profit for the financial year amounted to €83,728 thousand, an increase of €8,207 thousand compared with 2021.
| In thousands of € | 31-12-2022 | 31-12-2021 |
|---|---|---|
| Net profit/loss from continuing operations attributable to the parent company's shareholders |
83,728 | 75,521 |
| Net profit/loss | 83,728 | 75,521 |
| Impact of dilutive instruments | 0 | 0 |
| Diluted net profit/loss from continuing operations attributable to the parent company's shareholders |
83,728 | 75,521 |
| Net profit/loss from discontinued operations attributable to the parent company's shareholders |
0 | 0 |
| Net profit/loss | 0 | 0 |
| Impact of dilutive instruments | 0 | 0 |
| Diluted net profit/loss from discontinued operations attributable to the parent company's shareholders |
0 | 0 |
| Net profit/loss attributable to the parent company's shareholders |
83,728 | 75,521 |
| Net profit/loss | 83,728 | 75,521 |
| Impact of dilutive instruments | 0 | 0 |
| Diluted net profit/loss attributable to the parent company's shareholders |
83,728 | 75,521 |
| Denominator (in units) | 31-12-2022 | 31-12-2021 |
|---|---|---|
| Average number of outstanding shares | 70,263,501 | 70,263,501 |
| Impact of dilutive instruments | 0 | 0 |
| Diluted average number of outstanding shares | 70,263,501 | 70,263,501 |
| Earnings per share (in euros) | 31-12-2022 | 31-12-2021 |
|---|---|---|
| Basic earnings per share from continuing operations attributable to the parent company's shareholders |
1.1916 | 1.0748 |
| Diluted basic earnings per share from continuing operations attributable to the parent company's shareholders |
1.1916 | 1.0748 |
| Basic earnings per share from discontinued operations attributable to the parent company's shareholders |
0.0000 | 0.0000 |
| Diluted basic earnings per share from discontinued operations attributable to the parent company's shareholders |
0.0000 | 0.0000 |
| Basic earnings per share attributable to the parent company's shareholders |
1.1916 | 1.0748 |
| Diluted basic earnings per share attributable to the parent company's shareholders |
1.1916 | 1.0748 |
208
| Segment balance sheet at 31-12-2022 | In thousands of € | |||||
|---|---|---|---|---|---|---|
| Trans mission |
Storage Terminal ling |
Other | Unallo cated |
Total | ||
| Property, plant and equipment |
1,156,981 | 125,365 | 572,946 | 83 | 0 | 1,855,375 |
| Intangible assets | 22,009 | 10 | 845 | 0 | 0 | 22,864 |
| Right of use assets | 7,724 | 318 | 18,932 | 3,046 | 0 | 30,020 |
| Other financial assets | 95 | 0 | 0 | 111,076 | 0 | 111,171 |
| Inventories | 54,453 | 3,100 | 1,211 | 3,892 | 0 | 62,656 |
| Lease receivables | 0 | 0 | 0 | 2,094 | 0 | 2,094 |
| Net trade receivables | 110,249 | 1,071 | 6,633 | 33,852 | 0 | 151,805 |
| Other assets | 0 | 0 | 0 | 0 1,170,585 | 1,170,585 | |
| 3,406,570 | ||||||
| Interest-bearing liabilities |
368,097 | 61,020 | 232,249 | 510,675 | 0 | 1,172,041 |
| Other financial liabilities | 0 | 0 | 20 | 3,555 | 0 | 3,575 |
| Other liabilities | 563,230 | 41,595 | 330,468 | 0 | 652,044 | 1,587,337 |
| 2,762,953 | ||||||
| Equity | 643,617 | |||||
| 3,406,570 | ||||||
| Investments over the period in PP&E |
36,814 | 871 | 67,736 | 104 | 0 | 105,525 |
| Investments over the period in intangible assets |
11,294 | 0 | 71 | 0 | 0 | 11,365 |
| Segment balance sheet at 31-12-2021 | In thousands of € | |||||
|---|---|---|---|---|---|---|
| Trans mission |
Storage Terminal ling |
Other | Unallo cated |
Total | ||
| Property, plant and equipment |
1,219,055 | 132,855 | 550,044 | 83 | 0 | 1,902,037 |
| Intangible assets | 22,614 | 14 | 1,263 | 0 | 0 | 23,891 |
| Right of use assets | 8,999 | 327 | 21,505 | 2,696 | 0 | 33,527 |
| Other financial assets | 91 | 0 | 0 | 88,551 | 0 | 88,642 |
| Inventories | 35,078 | 3,100 | 589 | 275 | 0 | 39,042 |
| Lease receivables | 0 | 0 | 0 | 2,695 | 0 | 2,695 |
| Net trade receivables | 57,161 | 2,158 | 7,017 | 19,051 | 0 | 85,387 |
| Other assets | 0 | 0 | 0 | 0 | 459,293 | 459,293 |
| 2,634,514 | ||||||
| Interest-bearing liabilities | 632,486 | 47,153 | 259,041 | 280,843 | 0 | 1,219,523 |
| Other financial liabilities | 0 | 0 | 18 | 3,236 | 0 | 3,254 |
| Other liabilities | 268,432 | 53,167 | 152,241 | 0 | 298,223 | 772,063 |
| 1,994,840 | ||||||
| Equity | 639,674 | |||||
| 2,634,514 | ||||||
| Investments over the period in PP&E |
32,630 | 564 | 17,440 | 14 | 0 | 50,648 |
| Investments over the period in intangible assets |
6,186 | 12 | 329 | 0 | 0 | 6,527 |
| Movements in property, plant and equipment | ||||||||
|---|---|---|---|---|---|---|---|---|
| Gross book value | Land | Buildings | Gas transmission* |
Gas storage * | ||||
| At 31-12-2020 | 48,416 | 161,231 | 3,462,837 | 386,670 | ||||
| Investments | 1,060 | 51 | 14,882 | 22 | ||||
| Grants received | 0 | 0 | 0 | 0 | ||||
| Disposals and retirements | -75 | -189 | -8,697 | 0 | ||||
| Internal transfers | 0 | 0 | 2,300 | 0 | ||||
| Changes in the consolidation scope and assets held for sale |
0 | 0 | 0 | 0 | ||||
| Translation adjustments | 0 | 0 | 0 | 0 | ||||
| At 31-12-2021 | 49,401 | 161,093 | 3,471,322 | 386,692 | ||||
| Investments | 186 | 166 | 26,325 | 312 | ||||
| Grants received | 0 | 0 | 0 | 0 | ||||
| Disposals and retirements | -2 | 0 | -6,725 | -5 | ||||
| Internal transfers | 0 | 0 | 15,204 | 121 | ||||
| Changes in the consolidation scope and assets held for sale |
0 | 0 | 0 | 0 | ||||
| Translation adjustments | 0 | 0 | 0 | 0 | ||||
| At 31-12-2022 | 49,585 | 161,259 | 3,506,126 | 387,120 |
| In thousands of € | ||||
|---|---|---|---|---|
| Total | Assets under construction & instalments paid |
Furniture, equipment & vehicles |
Other facilities and machinery |
LNG Terminal* |
| 5,629,469 | 6,719 | 62,777 | 43,511 | 1,457,308 |
| 50,648 | 24,376 | 7,232 | 0 | 3,025 |
| -513 | 0 | 0 | 0 | -513 |
| -20,836 | 0 | -11,857 | 0 | -18 |
| 0 | -2,300 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| 5,658,768 | 28,795 | 58,152 | 43,511 | 1,459,802 |
| 105,525 | 68,206 | 8,450 | 0 | 1,880 |
| 0 | 0 | 0 | 0 | 0 |
| -15,262 | 0 | -8,240 | 0 | -290 |
| 0 | -15,325 | 0 | 0 | 0 |
| 0 | 0 | -0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| 5,749,031 | 81,676 | 58,362 | 43,511 | 1,461,392 |
*subject to the Gas Act
| Movements in property, plant and equipment | |||||||
|---|---|---|---|---|---|---|---|
| Depreciation and impairment losses | Land | Buildings | Gas storage* |
||||
| As at 31-12-2020 | 0 | -98,618 | -2,289,869 | -251,390 | |||
| Depreciation | 0 | -4,014 | -96,005 | -9,357 | |||
| Disposals and retirements | 0 | 175 | 8,233 | 0 | |||
| Internal transfers | 0 | 0 | 0 | 0 | |||
| Changes in the consolidation scope and assets held for sale |
0 | 0 | 0 | 0 | |||
| Translation adjustments | 0 | 0 | 0 | 0 | |||
| As at 31-12-2021 | 0 | -102,457 | -2,377,641 | -260,747 | |||
| Depreciation | 0 | -3,988 | -89,701 | -8,137 | |||
| Disposals and retirements | 0 | 0 | 5,888 | 1 | |||
| Internal transfers | 0 | 0 | 0 | 0 | |||
| Changes in the consolidation scope and assets held for sale |
0 | 0 | 0 | 0 | |||
| Translation adjustments | 0 | 0 | 0 | 0 | |||
| As at 31-12-2022 | 0 | -106,445 | -2,461,454 | -268,883 | |||
| Net book values as at 31-12-2022 | 49,585 | 54,814 | 1,044,672 | 118,237 | |||
| Net book values as at 31-12-2021 | 49,401 | 58,636 | 1,093,681 | 125,945 |
| In thousands of € | ||||
|---|---|---|---|---|
| Total | Assets under construction & instalments paid |
Furniture, equipment & vehicles |
Other facilities and machinery |
LNG Terminal* |
| -3,618,260 | 0 | -45,554 | -43,259 | -889,570 |
| -158,258 | 0 | -5,657 | -7 | -43,218 |
| 19,787 | 0 | 11,377 | 0 | 2 |
| 0 | 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| -3,756,731 | 0 | -39,834 | -43,266 | -932,786 |
| -150,915 | 0 | -5,881 | 0 | -43,208 |
| 13,990 | 0 | 8,093 | 0 | 8 |
| 0 | 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| -3,893,656 | 0 | -37,622 | -43,266 | -975,986 |
| 1,855,375 | 81,676 | 20,740 | 245 | 485,406 |
| 1,902,037 | 28,795 | 18,318 | 245 | 527,016 |
*subject to the Gas Act
| Movements in property, plant and equipment | ||
|---|---|---|
| -------------------------------------------- | -- | -- |
| Land | Buildings | Gas transmission* |
Gas storage* |
|
|---|---|---|---|---|
| Net book values as at 31-12-2022, of which: |
49,585 | 54,814 | 1,044,672 | 118,237 |
| At cost | 49,585 | 54,814 | 1,044,672 | 118,237 |
| At revaluation | 0 | 0 | 0 | 0 |
| Supplementary information | 0 | 0 | 0 | 0 |
| Net book value of assets temporarily retired from active use |
110 | 0 | 0 | 0 |
*subject to the Gas Act
Property, plant and equipment mainly comprises the group's transmission, storage (Loenhout) and LNG terminalling (Zeebrugge) facilities.
In 2022, Fluxys Belgium group made property, plant and equipment investments in infrastructure of €102,527 thousand. Furthermore, Fluxys Belgium group made €2,996 thousand IT investments in the network infrastructure as well as in the computers and devices inventory.
€67,736 thousand was allocated to LNG infrastructure projects (mainly for the construction of 3 new Open Rack Vaporizers and 3 new truck loading bays in the Zeebrugge LNG Terminal) and €33,817 thousand to project linked to transmission activity.
In 2022 no costs for loans were activated on construction investments.
| In thousands of € | ||||
|---|---|---|---|---|
| Total | Assets under construction & instalments paid |
Furniture, equipment & vehicles |
Other facilities and machinery |
LNG Terminal* |
| 1,855,375 | 81,676 | 20,740 | 245 | 485,406 |
| 1,855,375 | 81,676 | 20,740 | 245 | 485,406 |
| 0 | 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 |
| 110 | 0 | 0 | 0 | 0 |
The depreciation charge for the period amounts to €150,915 thousand and reflects the rhythm at which the group expects to consume the economic benefits linked to those property, plant and equipment.
The assets that are used within the regulated market are depreciated over their useful life, as stated in point 6 of the accounting principles (Note 2), without taking into account a residual value, given the specificity of the sector's activities.
Other property, plant and equipment is depreciated over its useful life as estimated by the group, taking into account actual and potential contracts, and considering reasonable market assumptions, based on the principle of matching of revenues and costs. Given the specific nature of the activities concerned, the residual value, if any, of the facilities in question has been ignored.
At the balance sheet date, the group does not hold property, plant and equipment assets which have been pledged as security against liabilities.
At the end of the financial year, the group has identified no signal or event that would lead any item of property, plant and equipment to be impaired.
This assessment takes into account the regulatory framework in which the Group operates and of the present energy transition in which the Group plays an active role. This refers, for example, to the conversion of our low-calorific gas network to high-calorific gas, the transport of molecules other than natural gas, and the efforts required to combat climate change. All the investments and regulated assets of the Group ensue in a right to a regulated authorised rate of return for their lifespan (see also accounting principles in Note 2.6).
| Movements in the book value of intangible assets | In thousands of € | |||
|---|---|---|---|---|
| Gross book value | Software | 'Client portfolios' assets |
CO2 Emission rights |
Total |
| As at 31-12-2020 | 22,457 | 52,800 | 0 | 75,257 |
| Investments | 6,528 | 0 | 0 | 6,528 |
| Disposals and retirements | -6,176 | 0 | 0 | -6,176 |
| Translation adjustments | 0 | 0 | 0 | 0 |
| Changes in the consolidation scope |
0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |
| As at 31-12-2021 | 22,809 | 52,800 | 0 | 75,609 |
| Investments | 11,365 | 0 | 0 | 11,365 |
| Disposals and retirements | -3,627 | 0 | 0 | -3,627 |
| Translation adjustments | 0 | 0 | 0 | 0 |
| Changes in the consolidation scope |
0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |
| As at 31-12-2022 | 30,547 | 52,800 | 0 | 83,347 |
| Movements in the book value of intangible assets | In thousands of € | |||
|---|---|---|---|---|
| Depreciation and impairment losses |
Software | 'Client portfolios' assets |
CO2 Emission rights |
Total |
| As at 31-12-2020 | -13,603 | -33,447 | 0 | -47,050 |
| Depreciation and impairment losses |
-4,394 | -6,450 | 0 | -10,844 |
| Disposals and retirements | 6,176 | 0 | 0 | 6,176 |
| Translation adjustments | 0 | 0 | 0 | 0 |
| Changes in the consolidation scope |
0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |
| As at 31-12-2021 | -11,821 | -39,897 | 0 | -51,718 |
| Depreciation and impairment losses |
-5,934 | -6,451 | 0 | -12,385 |
| Disposals and retirements | 3,619 | 0 | 0 | 3,619 |
| Translation adjustments | 0 | 0 | 0 | 0 |
| Changes in the consolidation scope |
0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |
| As at 31-12-2022 | -14,136 | -46,348 | 0 | -60,484 |
| Movements in the book value of intangible assets | In thousands of € | |||
|---|---|---|---|---|
| Software | 'Client portfolios' assets |
CO2 Emission rights |
Total | |
| Net book values as at 31-12-2022 |
16,411 | 6,453 | 0 | 22,864 |
| Net book values as at 31-12-2021 |
10,988 | 12,903 | 0 | 23,891 |
Intangible assets include the net book value of software, the portfolio of 'Hub' clients and CO2 emission rights.
The software included in intangible assets is investment software developed or purchased by the group. This software is depreciated over 5 years on a straight-line basis. Major investments during the financial year concern software developed in relation to gas flow and asset management and related administrative tools.
In 2015, Fluxys Belgium acquired all of Huberator's business activities for €52.8 million. This intangible asset will be fully depreciated in 2023 (on a straight-line basis).
Certain gas transmission facilities in Belgium are included in the scheme for greenhouse gas emission allowance trading. Accordingly, Fluxys Belgium group was given free emission rights for 2022 amounting to 20,752 tonnes of CO2 for the compression, storage and terminalling activity sites. In accordance with the accounting policies stated in Note 2, the unused emission rights have been recognised at nil value in intangible assets.
The group emphasises that no indications existed at the balance sheet date that any item of property, plant and equipment may have been impaired.
The right of use assets are mainly linked to concession rights for land on which gas transmission and terminalling facilities (Zeebrugge) have been built.
These contracts don't have significant termination or extension options. The rent is not variable, except for some contracts that have a clause for yearly indexation. The impact thereof is not material.
| Right of use assets | In thousands of € | |||
|---|---|---|---|---|
| Land & Buildings |
Facilities | Cars | Total | |
| As at 31-12-2020 | 29,426 | 3,487 | 3,554 | 36,467 |
| Additional rights | 0 | 0 | 1,968 | 1,968 |
| Depreciation and impairment losses | -2,405 | -763 | -1,723 | -4,891 |
| Disposals | 0 | 0 | -17 | -17 |
| Other changes | 0 | 0 | 0 | 0 |
| As at 31-12-2021 | 27,021 | 2,724 | 3,782 | 33,527 |
| Additional rights | 0 | 0 | 1,351 | 1,351 |
| Depreciation and impairment losses | -2,405 | -763 | -1,583 | -4,751 |
| Disposals | 0 | 0 | -107 | -107 |
| Other changes | 0 | 0 | 0 | 0 |
| As at 31-12-2022 | 24,616 | 1,961 | 3,443 | 30,020 |
| Other financial assets | In thousands of € | ||
|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | |
| Shares at cost | 24 | 24 | |
| Investment securities at fair value through profit or loss |
5.4.1 | 0 | 0 |
| Investment securities at amortised cost | 5.4.1 | 53,481 | 26,289 |
| Other investments at cost | 5.4.1 | 54,019 | 59,009 |
| Financial instruments at fair value through profit or loss |
3,576 | 3,254 | |
| Other financial assets at cost | 71 | 66 | |
| Total | 111,171 | 88,642 |
5.4.1. These items include cash investments with a maturity longer than one year. They are mainly from Flux Re of which the cash is destined to cover the risk of the entity in the scope of its reinsurance business. The maturity of these investments is between 2023 and 2032.
The increase observed in the table above represents the new investments made with maturities of more than one year by Flux Re using the investment funds that matured in 2022.
The assets held by Flux Re are significantly higher than the minimum capital requirements under Solvency II (€16.3 million).
| Other non-current assets | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Plan asset surpluses 'IAS 19 Employee benefits' |
5.14 | 26,461 | 15,123 | 11,338 |
| Total | 26,461 | 15,123 | 11,338 |
The value of plan assets in the provision for employee benefits increased in 2022 because of a rise in interest rates.
| Book value of inventories | In thousands of € | ||
|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | |
| Supplies | 24,803 | 20,250 | 4,553 |
| Gross book value | 28,678 | 27,019 | 1,659 |
| Impairment losses | -3,875 | -6,769 | 2,894 |
| Goods held for resale (gas) | 36,981 | 18,517 | 18,464 |
| Gross book value | 54,695 | 18,517 | 36,178 |
| Impairment losses | -17,714 | 0 | -17,714 |
| Work in progress | 872 | 275 | 597 |
| Gross book value | 872 | 275 | 597 |
| Impairment losses | 0 | 0 | 0 |
| Total | 62,656 | 39,042 | 23,614 |
Inventories of materials connected to the transmission network are at their normal levels.
The considerable increase in the gross book value of goods held for resale can primarily be explained by the strong increase in gas prices during the financial year, partially compensated by impairment losses at the end of the financial year following lower gas prices as at 31 December 2022.
| Impact of movements on net profit/loss | In thousands of € | ||
|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | |
| Inventories – purchased or used | 38,433 | 12,663 | 25,770 |
| Impairment losses | -14,819 | 1 | -14,820 |
| Total | 23,614 | 12,664 | 10,950 |
The movements of work in progress are included in other operating income in the income statement. The other movements of inventories are included in purchase of gas related to balancing of operations and operational needs.
| Trade and other receivables | In thousands of € | |||
|---|---|---|---|---|
| Note | 31-12-2022 | 31-12-2021 | Change | |
| Gross trade receivables | 153,377 | 86,974 | 66,403 | |
| Impairment losses | -1,572 | -1,587 | 15 | |
| Net trade receivables | 5.7.1 | 151,805 | 85,387 | 66,418 |
| Other receivables | 12,494 | 5,059 | 7,435 | |
| Total | 164,299 | 90,446 | 73,853 |
The increase in trade receivables is in line with the increase in sales and services to external customers.
5.7.1 Fluxys Belgium group reduces its exposure to credit risk, both in terms of default and concentration of risk, by requiring short payment terms from its customers (payment within one month), a strict policy for the follow-up of trade receivables, and a systematic evaluation of its counterparties' financial position. The credit losses expected and accounted for in trade and other receivables are not very material for the Fluxys Belgium group.
Trade receivables can be broken down as follows according to their ageing:
| Net trade receivables according to ageing | In thousands of € | ||
|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | |
| Receivables not past due | 150,829 | 84,891 | 65,938 |
| Receivables < 3 months | 885 | 405 | 480 |
| Receivables 3 - 6 months | 0 | 0 | 0 |
| Receivables > 6 months | 0 | 0 | 0 |
| Receivables in litigation or doubtful | 91 | 91 | 0 |
| Total | 151,805 | 85,387 | 66,418 |
Disputed or doubtful receivables mainly concern grid users. Those deemed irrecoverable have been subject to impairment losses of 100%.
Investments relate to investments in the form of bonds, commercial paper and bank deposits over more than three months and maximum one year.
Cash and cash equivalents are mainly euro investments in commercial paper that mature within a maximum of three months after the date of acquisition, deposits made with Fluxys (cash pooling), term deposits at credit institutions, current account bank balances and cash in hand.
| Short-term investments, cash and cash equivalents | In thousands of € | ||
|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | |
| Short-term investments | 26,113 | 45,740 | -19,627 |
| Cash and cash equivalents | 1,070,708 | 366,931 | 703,777 |
| Cash equivalents and cash pooling | 1,025,335 | 320,254 | 705,081 |
| Short-term deposits | 8,108 | 2,849 | 5,259 |
| Bank balances | 37,246 | 43,815 | -6,569 |
| Cash in hand | 19 | 13 | 6 |
| Total | 1,096,821 | 412,671 | 684,150 |
In 2022, the average rate of return on short-term investments, cash and cash equivalents was 0.45%. The credit losses expected and accounted for in investments, cash and cash equivalents are not material for the Fluxys Belgium group.
The increase in cash equivalents is primarily due to the increase in sales following major gas flows to Germany and the Netherlands.
| Other current assets | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Accrued income | 1,213 | 733 | 480 | |
| Prepaid expenses | 13,033 | 13,360 | -327 | |
| Other current assets | 5.9.1 | 2,940 | 1,680 | 1,260 |
| Total | 17,186 | 15,773 | 1,413 |
Other current assets mainly comprise prepaid expenses amounting to €13,033 thousand (insurance, fees, rent, etc.) as well as various items of accrued income.
5.9.1 Other current assets include the short-term share of the plan asset surpluses compared with the actuarial liability relating to the group's pension liabilities (see Notes 5.5 and 5.14).
On 31-12-2022, equity amounted to €643,617 thousand. The €3,943 thousand increase since the previous year comes essentially from the comprehensive income for the period (€100,907 thousand),which is largely offset by the dividends paid in 2022 (€96,964 thousand).
| Note on parent entity shareholding | |||
|---|---|---|---|
| Ordinary shares |
Preference shares |
Total | |
| I. Movements in number of shares | |||
| 1. Number of shares, opening balance | 70.263.501 | 0 | 70.263.501 |
| 2. Number of shares issued | |||
| 3. Number of ordinary shares cancelled or reduced (-) |
|||
| 4. Number of preference shares cancelled or reduced (-) |
|||
| 5. Other increase (decrease) | |||
| 6. Number of shares, closing balance | 70.263.501 | 0 | 70.263.501 |
| II. Other information | |||
| 1. Face value of shares | No face value mentioned |
||
| 2. Number of shares owned by the company | 0 0 |
0 | |
The share capital of Fluxys Belgium SA is represented by 70,263,501 shares with no face value, divided into two categories, in addition to the specific share.
Shares in category B are and remain registered. They are held by long-term shareholders. Category D shares are registered or dematerialised and are mainly held by the general public.
The Belgian State owns one specific registered share, namely share no. 1, which does not belong to any of the above categories and shall be referred to hereinafter as the 'specific share'. In accordance with the Fluxys Belgium articles of association, this 'specific share' carries specific rights. These specific rights remain attached to this share in addition to the common rights attached to the ordinary shares of Fluxys Belgium (former "Distrigas"), as long as this share is owned by the Belgian State, as established in Articles 3 to 5 of the Royal Decree of 16 June 1994. These specific rights are exercised by the Federal Minister responsible for energy. In addition to these specific rights this 'specific share' also entitles to receive 100 times the dividend or any other distribution by the entity to its shareholders, than the ones attached to the category B or D shares.
| Non-current interest-bearing liabilities | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 | Change | |
| Leases | 5.11.3 | 25,878 | 29,260 | -3,382 |
| Bonds | 5.11.1 | 696,985 | 696,558 | 427 |
| Other borrowings | 5.11.2 | 392,909 | 436,273 | -43,364 |
| Total | 1,115,772 | 1,162,091 | -46,319 | |
| Of which debts guaranteed by the public authorities or by sureties |
0 | 0 | 0 |
| Current interest-bearing liabilities | In thousands of € | |||
|---|---|---|---|---|
| Notes | 31-12-2022 | 31-12-2021 Change | ||
| Leases | 5.11.3 | 2,477 | 2,804 | -327 |
| Bonds | 5.11.1 | 2,523 | 2,523 | 0 |
| Other borrowings | 5.11.2 | 51,269 | 52,105 | -836 |
| Total | 56,269 | 57,432 | -1,163 | |
| Of which debts guaranteed by the public authorities or by sureties |
0 | 0 | 0 |
5.11.1. In November 2014 and October 2017, Fluxys Belgium issued bonds for a total of €700,000 thousand. These bonds offer a gross annual coupon of 1.75% and 3.25% respectively. They will mature between 2027 and 2034.
5.11.2. Other borrowings include:
5.11.3. Lease liabilities are accounted for in line with IFRS 16 and are limited to the contractual obligations, even if the Group expects certain contracts to be extended in the future, but this option isn't stated in the current contract.
| Changes in liabilities based on financing activities | |||||||
|---|---|---|---|---|---|---|---|
| 31.12.2021 Cash flow | Other movements | 31.12.2022 | |||||
| New lease contracts |
Reclassifi cation between non-current and current |
Variation in accrued interests payable |
|||||
| Non-current interest bearing liabilities |
1,162,091 | 0 | 1,351 | -48,097 | 0 | 427 | 1,115,772 |
| Leases | 29,260 | 0 | 1,351 | -4,733 | 0 | 0 | 25,878 |
| Bonds | 696,558 | 0 | 0 | 0 | 0 | 427 | 696,985 |
| Other borrowings |
436,273 | 0 | 0 | -43,364 | 0 | 0 | 392,909 |
| Current interest bearing liabilities |
57,432 | -48,455 | 0 | 48,097 | -805 | 0 | 56,269 |
| Leases | 2,804 | -5,060 | 0 | 4,733 | 0 | 0 | 2,477 |
| Bonds | 2,523 | 0 | 0 | 0 | 0 | 0 | 2,523 |
| Other borrowings |
52,105 | -43,395 | 0 | 43,364 | -805 | 0 | 51,269 |
| Total | 1,219,523 | -48,455 | 1,351 | 0 | -805 | 427 | 1,172,041 |
Cash flows relating to interest-bearing liabilities are included in points IV.1.6, IV.2.3 and IV.2.5 of the consolidated statement of cash flows.
The change in accrued interests payable and the amortisation of issuance costs (in total -€321 thousand) relates to the difference between:
228
| Maturity of interest-bearing liabilities at 31-12-2022, non-discounted |
In thousands of € | |||
|---|---|---|---|---|
| Up to one year Between one and five years |
More than five years |
Total | ||
| Leases | 3,336 | 16,033 | 14,711 | 34,080 |
| Bonds | 19,316 | 364,769 | 439,990 | 824,075 |
| Other borrowings | 66,752 | 219,478 | 242,561 | 528,791 |
| Total | 89,404 | 600,280 | 697,262 | 1,386,946 |
| Maturity of interest-bearing liabilities at 31-12-2021, non-discounted |
In thousands of € | |||
|---|---|---|---|---|
| Up to one year | Between one and five years |
More than five years |
Total | |
| Leases | 3,747 | 17,155 | 17,829 | 38,732 |
| Bonds | 19,316 | 67,216 | 753,909 | 840,441 |
| Other borrowings | 69,183 | 225,858 | 295,028 | 590,069 |
| Total | 92,246 | 310,229 | 1,066,766 | 1,469,242 |
| Regulatory liabilities In thousands of € |
||||
|---|---|---|---|---|
| Note | 31.12.2022 | 31.12.2021 Difference | ||
| Other financing – long term | 612,582 | 83,505 | 529,077 | |
| Other financing – short term | 149,863 | 15,425 | 134,438 | |
| Total of other financing (A) | 5.12.1 | 762,445 | 98,930 | 663,515 |
| Other liabilities – long term | 134,227 | 314,372 | -180,145 | |
| Other liabilities – short term | 38,622 | 60,538 | -21,916 | |
| Total of other liabilities (B) | 5.12.2 | 172,849 | 374,910 | -202,061 |
| Total of regulatory liabilities (A+B = C) |
935,294 | 473,840 | 461,454 | |
| Presentation in balance sheet: | 0 | |||
| Non-current regulatory liabilities | 746,809 | 397,877 | 348,932 | |
| Current regulatory liabilities | 188,485 | 75,963 | 112,522 | |
| Total of regulatory liabilities (C) | 935,294 | 473,840 | 461,454 |
5.12.1 Other financing corresponds to the specific allocations of regulatory liabilities at the group's disposal firstly to finance specific investments, notably in the second jetty at Zeebrugge and secondly, the cost associated with the conversion of part of the gas transmission network. These amounts bear interest at a 10-year OLO rate for one part and the remainder at the average 1-year Euribor rate. Auction premiums of € 668.6 million were realised in 2022; this amount was recorded under 'Other financing – long-term' for € 523.7 million and under 'Other financing – short-term' for € 144.9 million. This presentation is justified by the different regulatory treatment applied to auction premiums in accordance with the European network code.
5.12.2 The other regulatory liabilities included in 'other liabilities' include the positive differences between the regulated tariffs invoiced and the regulated tariffs acquired. These amounts bear interest at the average Euribor 1-year rate.
The regulatory liabilities are reconciled with the segment reporting and the statement of cash flows as follows:
| Movements of the regulatory liabilities | In thousands of € | ||
|---|---|---|---|
| Long term + short term | Other financing(A) | Other liabilities (B) |
Total |
| Balance as at 01.01.2022 | 98,929 | 374,911 | 473,840 |
| Use | -5,002 | -408,333 | -413,335 |
| Additions | 668,519 | 201,041 | 869,560 |
| Interest | 1,512 | 3,718 | 5,230 |
| Transfer | -1,512 | 1,512 | 0 |
| Balance as at 31.12.2022 | 762,445 | 172,849 | 935,294 |
The sum of use and additions amounts to €456,225 thousand and is in line with the sum of the changes in regulatory liabilities in note 4 (segment information - net change in revenue).
This net increase in regulatory liabilities also corresponds with the change in regulatory liabilities included in item 1.2.6. of the cash flow table.
The €5,230 thousand interest charge on regulatory liabilities was accounted for in the finance costs.
5.13.1 Provisions for employee benefits
| Provisions for employee benefits | In thousands of € |
|---|---|
| Provisions at 31-12-2021 | 64,718 |
| Additions | 10,822 |
| Use | -14,764 |
| Release | 0 |
| Unwinding of the discount | 2,375 |
| Actuarial gains/losses recognised in the profit/loss (seniority bonuses) |
-121 |
| Expected return on plan assets | -1,734 |
| Actuarial gains/losses recognised in equity | -22,905 |
| Reclassification to the assets | 12,598 |
| Provisions at 31-12-2022, of which: | 50,988 |
| Non-current provisions | 47,444 |
| Current provisions | 3,543 |
The provisions for employee benefits (see Note 5.14) are down €13,730 thousand. This fall can primarily be explained by a combination of an increase in the discount rates partially compensated by a negative return on plan assets in 2022. In addition to the reduction in provisions, there is also an increase in the surplus from plan assets (see Note 5.14).
5.13.3 Movements in the income statement and maturity of provisions Movements in the income statement are detailed as follows:
| Impact 2022 | In thousands of € | ||
|---|---|---|---|
| Additions | Use and reversals | Total | |
| Operating profit (loss) | 10,842 | -17,835 | -6,993 |
| Financial profit (loss) | 2,238 | -1,855 | 383 |
| Total | 13,080 | -19,690 | -6,610 |
| Maturity of provisions at 31-12-2022 | In thousands of € | |||
|---|---|---|---|---|
| Up to one year | Between one and five years |
More than five years |
Total | |
| Litigation and claims | 0 | 0 | 2,581 | 2,581 |
| Environment and site restoration | 0 | 1,546 | 0 | 1,546 |
| Subtotal | 0 | 1,685 | 2,442 | 4,127 |
| Employee benefits | 3,543 | 14,172 | 33,273 | 50,988 |
| Total | 3,543 | 15,857 | 35,715 | 55,115 |
| Maturity of provisions at 31-12-2021 | In thousands of € | |||
|---|---|---|---|---|
| Up to one year | Between one and five years |
More than five years |
Total | |
| Litigation and claims | 3,069 | 2,561 | 0 | 5,630 |
| Environment and site restoration |
0 | 1,685 | 0 | 1,685 |
| Subtotal | 3,069 | 4,246 | 0 | 7,315 |
| Employee benefits | 4,201 | 16,804 | 43,713 | 64,718 |
| Total | 7,270 | 21,050 | 43,713 | 72,033 |
| Provisions for: | In thousands of € | ||
|---|---|---|---|
| Litigation and claims |
Environment and site restoration |
Total other provisions |
|
| Provisions at 31-12-2021 | 5,630 | 1,685 | 7,315 |
| Additions | 20 | 0 | 20 |
| Use | -3,069 | -2 | -3,071 |
| Release | 0 | 0 | 0 |
| Unwinding of the discount | 0 | -137 | -137 |
| Provisions at 31-12-2022, of which: |
2,581 | 1,546 | 4,127 |
| Non-current provisions | 2,581 | 1,546 | 4,127 |
| Current provisions | 0 | 0 | 0 |
In 2022, a provision was used to cover the amount of a litigation with third-parties (see also Notes 4.2.6. and 7.1).
The other provisions have been established to cover likely litigation payments arising for instance from the construction of the Zeebrugge LNG terminal (1983).
The estimation for these provisions is based on the value of claims filed or on the estimated amount of risk incurred.
These provisions essentially cover the costs of safety, clean-up and restoration of sites subject to closure.
These provisions are accrued in accordance with the Belgian regional environmental legislation and the Belgian Gas Act. These works require action plans and numerous studies in cooperation with the various public authorities and the institutions established for this purpose.
In Belgium collective agreements regulate the rights of entity employees in the electricity and gas industries.
These agreements cover 'salary scale' personnel recruited before 1 June 2002 and management personnel recruited before 1 May 1999 allowing affiliates to benefit from a capital calculated based on a formula that takes account of their final annual salary and the number of years of service when they retire. These are called 'defined benefit pension plans'.
Obligations under these defined benefit pension plans are funded through a number of pension funds for the electricity and gas industries and through insurance companies.
Employees and employers contribute to these pension plans. The employer's contribution is determined annually on the basis of an actuarial report. This is to ensure that the minimum legal funding requirements have been met and that the long-term funding of the benefits is assured.
The group is exposed, in connection with its defined benefit pension plans, to risks related to actuarial assumptions concerning investments, interest rates, life expectancy and salary development.
The present value of defined benefit obligations is determined using a discount rate based on high-quality bonds.
The assumptions concerning salary increases, inflation, personnel movements and expected average retirement age are defined based on historic entity statistics. The mortality tables used are those published by the IABE (Institute of Actuaries in Belgium).
At the end of 2022, the defined benefit pension plans have surplus plan assets of €29,401 thousand (2021: €16,803 thousand) compared with the actuarial liability on estimated
liabilities of the group. The amount was therefore transferred to the assets in the balance sheet under 'Other non-current assets' (note 5.5) and 'Other current assets' (note 5.9.1).
The financing policy was amended in 2018 to ensure that surpluses are recovered over the duration of the pension plans. In addition, transfers between different pension plans are possible.
In Belgium, 'Salary scale' personnel recruited after 1 June 2002 and management staff recruited after 1 May 1999 as well as the members of the management benefit from defined contribution pension plans.
The pension plans are financed by contributions from employees and employers, the latter corresponding to a multiple of the contributions from employees. Obligations under these defined contribution pension plans are funded through a number of pension funds for the electricity and gas industries and through insurance companies.
The assets of the pension funds are allocated among the various categories of the following risks:
Belgian law requires that the employer guarantees a minimum return for defined contribution plans. These minimum returns vary based on the market rates.
For the minimum returns guaranteed by the employer, the following elements apply:
For certain defined contribution plans, the contributions increase depending on the seniority in the Group (referred to as 'backloaded'). For these plans, the contributions are distributed uniformly over time.
236
Defined contribution plans expose the employer to the risk of a minimum return on pension fund assets that do not offer a sufficient guaranteed return.
Fluxys Belgium group also has early pension schemes, other post-employment benefits such as reimbursement of medical expenses and price subsidies, as well as other longterm benefits (seniority bonuses). Not all of these benefits are funded.
| In thousands of € | Pensions * | Other ** | ||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||
| Present value of funded obligations | -194,397 | -221,035 | -32,840 | -47,941 | ||
| Fair value of plan assets | 205,651 | 221,062 | 0 | 0 | ||
| Funding status of plans | 11,254 | 27 | -32,840 | -47,941 | ||
| Effect of the asset ceiling | 0 | 0 | 0 | 0 | ||
| Other | 0 | 0 | 0 | 0 | ||
| Net employee benefit liability | 11,254 | 27 | -32,840 | -47,941 | ||
| Of which assets | 29,401 | 16,803 | 0 | 0 | ||
| Of which liabilities | -18,147 | -16,777 | -32,840 | -47,941 |
* Pensions also include non-prefinanced early-retirement obligations. They also include, since 2018, contributions paid to cover pension schemes with a profile that takes into account seniority.
** The item 'Other' includes seniority bonuses paid over the course of the career as well as other post-employment benefits (reimbursement of medical expenses and price subsidies (discount on energy costs)).
| In thousands of € | Pensions * | Other ** | ||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| At the start of the period | -221,035 | -234,450 | -47,941 | -51,384 |
| Service costs | -9,239 | -9,310 | -1,289 | -1,305 |
| Early retirement costs | -1,030 | -362 | 0 | 0 |
| Financial loss (-) / profit (+) | -1,879 | -529 | -496 | -223 |
| Participant's contributions | -807 | -796 | 0 | 0 |
| Change in demographic assumptions |
-777 | -969 | -605 | -581 |
| Change in financial assumptions | 44,415 | 11,942 | 16,144 | 4,922 |
| Change from experience adjustments |
-12,505 | 35 | -398 | -1,233 |
| Past service costs | 0 | -1,671 | 0 | 0 |
| Benefits paid | 8,460 | 15,075 | 1,745 | 1,863 |
| Reclassifications | 0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |
| At the end of the period | -194,397 | -221,035 | -32,840 | -47,941 |
The past service cost is related to the change in plan.
| In thousands of € | Pensions * | Other ** | ||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| At the start of the period | 221,062 | 214,386 | 0 | 0 |
| Interest income | 1,733 | 476 | 0 | 0 |
| Return on plan assets (excluding net interest income) |
-28,296 | 13,141 | 0 | 0 |
| Employer's contributions | 13,756 | 5,904 | 1,745 | 1,863 |
| Participants' contributions | 807 | 796 | 0 | 0 |
| Benefits paid | -8,460 | -15,075 | -1,745 | -1,863 |
| Change in financial assumptions | 5,049 | 1,434 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |
| At the end of the period | 205,651 | 221,062 | 0 | 0 |
| Actual return on plan assets | -26,563 | 13,617 | 0 | 0 |
The return on pension plan assets in 2022 is considerably lower than in 2021 following difficult conditions on the financial markets in 2022.
240 Contents Looking to the future Our profile Financial resilience Digitalisation Environment Social Governance Corporate Governance Declaration Financial situation 241
| In thousands of € | Pensions * | Other ** | ||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Cost | ||||
| Service costs | -9,240 | -9,310 | -1,289 | -1,305 |
| Early retirement costs | -1,030 | -362 | 0 | 0 |
| Past service costs | 0 | -1,671 | 0 | 0 |
| Actuarial gains/(losses) on other long-term benefits |
121 | 188 | 0 | 0 |
| Net interest on net liabilities/(assets) | ||||
| Interest expense on obligations | -1,879 | -529 | -496 | -223 |
| Interest income on plan assets | 1,734 | 476 | 0 | 0 |
| Costs recognised in profit or loss | -10,294 | -11,208 | -1,785 | -1,528 |
| In thousands of € | Pensions * | Other** | ||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Change in demographic assumptions | -777 | -969 | -605 | -581 |
| Change in financial assumptions | 49,343 | 13,188 | 16,144 | 4,922 |
| Change from experience adjustments | -12,505 | 35 | -398 | -1,233 |
| Effect of the asset ceiling | 0 | 0 | 0 | 0 |
| Return on plan assets (excluding net interest income) |
-28,296 | 13,141 | 0 | 0 |
| Actuarial losses (gains) recognised in other comprehensive income |
7,765 | 25,395 | 15,141 | 3,108 |
| In thousands of € | 2022 | 2021 |
|---|---|---|
| Active plan participants | -186,116 | -220,051 |
| Non-active participants with deferred benefits | -21,413 | -20,620 |
| Retirees and beneficiaries | -19,708 | -28,305 |
| Total | -227,237 | -268,976 |
| In thousands of € | 2022 | 2021 |
|---|---|---|
| Retirement and death benefits | -194,397 | -221,035 |
| Other post-employment benefits (medical expenses and price subsidies) |
-24,065 | -37,815 |
| Seniority bonuses | -8,775 | -10,126 |
| Total | -227,237 | -268,976 |
242
| 2022 | 2021 | |
|---|---|---|
| Discount rate between 10 to 12 years | 3.73% | 0.61% |
| Discount rate between 13 to 19 years | 3.75% | 1.07% |
| Discount rate over 19 years | 3.73% | 1.07% |
| Expected average salary increase | 2.04% | 2.05% |
| Expected inflation | 1.99% | 1.75% |
| Expected increase in health expenses | 2.99% | 2.75% |
| Expected increase of price subsidies | 1.99% | 1.75% |
| Average assumed retirement age | 63(BAR) / 65(CAD) | 63(BAR) / 65(CAD) |
| Mortality tables | IABE prospective | IABE prospective |
| Life expectancy in years: | ||
| For a person aged 65 at the balance sheet date: | ||
| - Male | 20 | 20 |
| - Female | 24 | 24 |
| For a person aged 65 in 20 years: | ||
| - Male | 22 | 22 |
| - Female | 26 | 26 |
The fair value of plan assets is distributed based on the following major categories
| 2022 | 2021 | |
|---|---|---|
| Listed investments | 92.83% | 79.76% |
| Shares - eurozone | 13.91% | 15.56% |
| Shares - outside eurozone | 14.86% | 19.85% |
| Government bonds - eurozone | 0.62% | 2.38% |
| Other bonds - eurozone | 28.68% | 27.71% |
| Other bonds - outside eurozone | 34.76% | 14.25% |
| Non-listed investments | 7.17% | 20.24% |
| Insurance contracts | 0.00% | 0.00% |
| Real estate | 1.46% | 2.80% |
| Cash and cash equivalents | 4.47% | 3.18% |
| Other | 1.25% | 14.27% |
| Total (in %) | 100.00% | 100.00% |
| Total (in thousands of €) | 205.651 | 221,062 |
The discount rate of the plans depends on their estimated average duration.
| Impact on obligations | In thousands of € | |
|---|---|---|
| Increase (-) / Decrease (+) | ||
| Increase in discount rate (0.25%) | 6,159 | |
| Average salary increase - Excluding inflation (0.1%) | -2,056 | |
| Increase in inflation rate (0.25%) | -5,016 | |
| Increase in healthcare benefits (0.01%) | -44 | |
| Increase in price subsidies (0.5%) | -1,465 | |
| Increase in life expectancy of retirees (1 year) | -971 |
| 2022 | 2021 | |
|---|---|---|
| Average weighted duration of defined benefit obligations | 9 | 9 |
| Average weighted duration of other post-employment obligations | 19 | 20 |
Expected contribution to pay for employee benefits relating to extrastatutory pensions
| In thousands of € | |
|---|---|
| Expected contribution for 2022 (for all pension and other obligations, listed above) |
13,352 |
The contributions to be paid are function of the payroll of the population concerned.
| Recognised deferred tax liabilities | In thousands of € | ||
|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Difference | |
| Valuation of assets | 105,227 | 116,605 | -11,378 |
| Accrued income | 237 | 388 | -151 |
| Fair value of financial instruments | 2,252 | 126 | 2,126 |
| Provisions for employee benefits or provisions not accepted under IFRS |
35,832 | 30,369 | 5,463 |
| Other normative differences | 0 | 0 | 0 |
| Total | 143,548 | 147,488 | -3,940 |
Deferred tax assets and liabilities are offset within each taxable entity. They are all fully recognised.
The main source of deferred tax is the difference between the book value and the tax base of property, plant and equipment. This difference arises firstly from the recognition in the opening balance sheet of property, plant and equipment at their fair value corresponding to their deemed cost and, secondly, from the recognition at fair value of the assets and liabilities arising from the SEGEO and Distrigas & C° business combinations in 2008.
Provisions accounted for in accordance with IAS 19 (Employee benefits) and provisions recognised under local GAAP but not recognised under IFRS are another major source of deferred tax.
| Movement for the period | In thousands of € |
|---|---|
| Deferred tax | |
| As at 31-12-2021 | 147,488 |
| Deferred tax expenses – Profit & loss account | -9,666 |
| Deferred tax expenses – other comprehensive income |
5,726 |
| As at 31-12-2022 | 143,548 |
| Trade and other liabilities | In thousands of € | ||
|---|---|---|---|
| 31-12-2022 | 31-12-2021 | Change | |
| Trade payables | 60,357 | 36,095 | 24,262 |
| Payroll and related items | 39,517 | 32,915 | 6,602 |
| Other payables | 344,659 | 4,297 | 340,362 |
| Total | 444,533 | 73,307 | 371,226 |
The significant increase in other payables is related to the recognition of the exceptional solidarity contribution of €300 million.
In the course of conducting its activities, the Fluxys Belgium group is exposed to credit and counterparty risks, liquidity and interest rate risks and market risks, all of which affect its assets and liabilities.
The group's administrative organisation, controlling and financial reports ensure that these risks are constantly monitored and managed.
The group may only use financial instruments for hedging, and not for speculative or trading purposes. All transactions are intended to meet the group's identified financial risks: no transaction may be entered into for the sole purpose of earning a speculative gain.
The Fluxys Belgium group's cash is managed as part of a general policy and cash surpluses are invested with Fluxys SA under cash pooling agreements. By way of reminder, Fluxys SA centralises the management of the Fluxys group's cash funds and financing.
The objective of this policy is to optimise the group's cash positions. These transactions are entered into at market terms and conditions.
The group's financial policy stipulates that cash surpluses be maintained at first class financial institutions or invested in financial instruments issued by entities with a high credit rating or in financial instruments of issuers which are covered by a guarantee from a European Member State or whose share capital is predominantly controlled by stateowned entities. Cash surpluses are invested following a competitive bidding award, and in instruments that are sufficiently diversified to limit counterparty risk concentration. These investments are subject to constant monitoring and risk analysis on a case-by-case basis. At 31-12-2022, current and non-current investments, cash and cash equivalents amounted to €1,204,321 thousand compared to €497,969 thousand at the end of 2021.
The group systematically assesses its counterparties' financial capacity and systematically monitors receivables. Group policy regarding counterparty risks requires that the group submits potential customers and suppliers to a detailed preliminary financial analysis (liquidity, solvency, profitability, reputation and risks). The group uses internal and external information, such as official analysis performed by rating agencies (Moody's, Standard & Poor's and Fitch). These rating agencies assess entities in relation to risk and award them a credit score (rating). The group also uses databases containing general, financial and market information to complement its own evaluation of potential customers and suppliers. In addition, for most of its activities the group is allowed to contractually require guarantees (either bank guarantees or cash deposits) from counterparties. The group thereby reduces its exposure to credit risk both in terms of default and concentration of customers.
In view of the concentration risk it must be noted that three clients contribute respectively 18%, 12% and 11% of the operating revenue. The breakdown per segment of these latter is €224 million in transmission, €7 million in storage and €83 million in terminalling.
248
The group's debt mainly consists of fixed interest rate loans maturing between 2023 and 2034, the balance of which (including lease obligations) as at 31-12-2022 represents €1,172,041 thousand compared to €1,219,523 thousand at the end of 2021.
In addition, the group's interest-bearing liabilities include other financing and liabilities to be used within the regulatory framework. As explained in Note 5.11, part of these bear interest at a 10-year OLO rate and the remainder at the average Euribor 1-year rate. The group does not incur any interest rate risks related to this.
Therefore, a sensitivity analysis is not representative for the risk inherent in these financial instruments. Consequently, the Fluxys Belgium group's exposure to interest rate risk is very limited.
Liquidity risk management is one of Fluxys Belgium group's main objectives. The amounts invested and the investment period reflect the short- and long-term planning of cash needs as closely as possible, taking into account operational risks.
The Fluxys Belgium group can call upon Fluxys SA in case of liquidity needs, under the cash pooling arrangements. By way of reminder, Fluxys centralises the management of the Fluxys group's cash funds and financing and has credit lines.
The maturity of interest-bearing liabilities is reported in Note 5.12.
The group's main financial instruments consist of financial and trade receivables and payables, short-term investments, cash and cash equivalents.
The following table gives an overview of financial instruments at 31 December 2022:
| Summary of financial instruments at balance sheet date | In thousands of € | |||
|---|---|---|---|---|
| 31-12-2022 | Category | Book value | Fair value | Level |
| I. Non-current assets | ||||
| Other financial assets at amortised cost | A | 107,595 | 97,804 | 1 & 2 |
| Other financial assets at fair value through profit or loss |
B | 3,576 | 3,576 | 2 |
| Lease receivables | A | 0 | 0 | 2 |
| Other receivables | A | 15,144 | 15,144 | 2 |
| II. Current assets | ||||
| Lease receivables | A | 2,094 | 2,094 | 2 |
| Trade and other receivables | A | 164,299 | 164,299 | 2 |
| Cash investments | A | 26,113 | 26,397 | 2 |
| Cash and cash equivalents | A | 1,070,708 | 1,070,600 | 2 |
| Total financial instruments – assets | 1,389,529 | 1,379,914 | ||
| I. Non-current liabilities | ||||
| Interest-bearing liabilities | A | 1,115,772 | 1,036,002 | 2 |
| Other financial liabilities | B | 3,575 | 3,575 | 2 |
| II. Current liabilities | ||||
| Interest-bearing liabilities | A | 56,269 | 56,269 | 2 |
| Trade and other payables | A | 444,533 | 444,533 | 2 |
| Total financial instruments - liabilities | 1,620,149 | 1,540,379 |
The categories correspond to the following financial instruments:
A. Financial assets or financial liabilities at amortised cost.
B. Assets or liabilities at fair value through profit or loss.
| Summary of financial instruments at balance sheet date | In thousands of € | |||
|---|---|---|---|---|
| 31-12-2021 | Category | Book value | Fair value | Level |
| I. Non-current assets | ||||
| Other financial assets at amortised cost |
A | 85,388 | 85,242 | 1 & 2 |
| Other financial assets at fair value through profit or loss |
B | 3,254 | 3,254 | 2 |
| Other financial assets at fair value Lease receivables |
A | 2,094 | 2,094 | 2 |
| Other receivables | A | 9,144 | 9,144 | 2 |
| II. Current assets | ||||
| Lease receivables | A | 601 | 601 | 2 |
| Trade and other receivables | A | 90,446 | 90,446 | 2 |
| Cash investments | A | 45,740 | 45,740 | 2 |
| Cash and cash equivalents | A | 366,931 | 366,931 | 2 |
| Total financial instruments – assets | 603,598 | 603,452 | ||
| I. Non-current liabilities | ||||
| Interest-bearing liabilities | A | 1,162,091 | 1,221,689 | 2 |
| Other financial liabilities | B | 3,254 | 3,254 | 2 |
| II. Current liabilities | ||||
| Interest-bearing liabilities | A | 57,438 | 57,438 | 2 |
| Trade and other payables | A | 73,307 | 73,307 | 2 |
| Total financial instruments - liabilities | 1,296,084 | 1,355,682 |
All of the group's financial instruments fall within Levels 1 and 2 of the fair value hierarchy. Their fair value is measured on a recurring basis.
For the fair value measurement of Level 1, only quoted prices are used (without modification) for identical assets and liabilities in active markets. They mainly include bonds.
For the fair value measurement of Level 2, observable prices other than the quoted prices of Level 1 are used. The prices are observable for the asset or liability, either directly or indirectly.
The techniques for measuring the fair value of Level 2 financial instruments are the following:
252
As announced in 2011, Fluxys Belgium has undertaken, in agreement with insurers and other responsible parties, to proceed with the final compensation of private victims of the accident at Ghislenghien in 2004. All the victims who have presented themselves to date and who were entitled to compensation have been compensated.
Compensation claim relating to the 'Open Rack Vaporiser' investment
A compensation claim for additional works was introduced by a supplier in the scope of the 'Open Rack Vaporiser' investment made by Fluxys LNG. The latter disputes this claim and an expert was appointed to assess the case. No reliable estimate is available at this stage. No provision has therefore been recognised as at 31-12-2022.
Other legal proceedings related to the operation of our facilities are in progress, but their expected impact is immaterial and/or such proceedings are being put on hold
In the ordinary course of business, the Fluxys Belgium group holds gas belonging to its customers at its storage sites in Loenhout, in the pipelines and in the tanks at the LNG terminal in Zeebrugge.
Bank securities for the benefit of the group comprise guarantees received from contractors in respect of construction contracts as well as bank guarantees received from customers. At 31 December 2022, the guarantees received amounted to €191,434 thousand. The expected credit losses on guarantees received are not very material for the Fluxys Belgium group.
Rental guarantees in favour of the owners of assets located in Belgium and leased by the group amounted to €10 thousand as at 31-12-2022.
Other guarantees amounted to €183 thousand as at 31-12-2022.
The IZT lease contract includes a purchase option for the lessee that can be exercised on 1 October 2023 for an amount of €1,643 thousand.
As part of this transaction, surface rights have been attributed.
The Capacity Subscription Agreements (CSA) entered into with the users of the Zeebrugge LNG terminal provide for 110 mooring windows (slots) per contract until 2023 and 88 docking windows per contract until 2027.
During the binding window of an Open Season which was held at the end of 2020 for additional regasification capacity at the Zeebrugge LNG terminal, the full 6 million tonnes per year (or c. 10.5 GWh/h) capacity on offer had been subscribed. On this basis, Fluxys LNG has taken the final investment decision to build the additional infrastructure at the Zeebrugge LNG terminal. The additional regasification capacity will be provided in two steps:
In 2019, in addition to the aforementioned contracts, a new long-term contract was entered into with Qatar Petroleum, subsidiary of Qatar Terminal Limited (QTL), for the remaining unloading slots until 2039 with extension option until 2044.
In addition, Yamal Trade (a 100% subsidiary of Yamal LNG) and Fluxys LNG signed a 20 year contract for the transshipment of a maximum of 8 million tonnes of LNG per year at the port of Zeebrugge in Belgium. This contract has entered into effect upon the commissioning of the 5th storage tank in the Zeebrugge LNG terminal at the end of 2019.
Other commitments have been made and received by the Fluxys Belgium group, but their potential impact is immaterial.
254
Fluxys Belgium and its subsidiaries are controlled by Fluxys, which is itself controlled by Publigas.
The consolidated financial statements include transactions performed by Fluxys Belgium and its subsidiaries in the normal course of their activities with unconsolidated related companies or associates. These transactions take place under market conditions and mainly involve transactions realised with Fluxys SA and Fluxys Europe (administrative services, IT and housing services and the management of cash funds and financing), Interconnector (UK) (inspection and repair services), IZT (IZT lease and facilities operation and maintenance services), Dunkerque LNG (IT development and other services), Gaz-Opale (terminalling services), Balansys (balancing operator), Fluxys TENP, FluxSwiss and Flux Re (reinsurance).
Other related parties in the following tables concern other entities of the Fluxys group, in which Fluxys Belgium does not hold a stake.
| Significant transactions with related parties as at 31.12.2022 |
(in thousands of €) | |||
|---|---|---|---|---|
| Parent company |
Joint arrange ments |
Other related parties |
Total | |
| I. Assets with related parties | 1,885,715 | 15,000 | 2,966 | 1,903,681 |
| 1. Other financial assets | 0 | 15,000 | 0 | 15,000 |
| Loans | 0 | 15,000 | 0 | 15,000 |
| 2. Financial lease receivables (current and non-current) |
0 | 0 | 2,094 | 2,094 |
| 3. Trade and other receivables | 860,381 | 0 | 871 | 861,252 |
| Clients | 860,381 | 0 | 871 | 861,252 |
| 4. Cash and cash equivalents | 1,025,334 | 0 | 0 | 1,025,334 |
| 5. Other current assets | 0 | 0 | 0 | 0 |
| II. Liabilities with related parties | 186,900 | 0 | 636 | 187,529 |
| 1. Interest-bearing liabilities (current and non-current) |
186,812 | 0 | 0 | 186,812 |
| Other borrowings | 186,812 | 0 | 0 | 186,812 |
| 2. Trade and other payables | 79 | 0 | 8 | 79 |
| Suppliers | 0 | 0 | 0 | 0 |
| Other payables | 79 | 0 | 8 | 79 |
| 3. Other current liabilities | 9 | 0 | 629 | 638 |
| III. Transactions with related parties | -4,605 | 1,888 | 21,334 | 18,617 |
| 1. Services rendered and goods delivered |
4,207 | 1,888 | 21,513 | 27,608 |
| 2. Services received (-) | -1,806 | 0 | -179 | -1,985 |
| 3. Net financial income | -7,007 | 0 | 0 | -7,007 |
| 4. Directors's and senior executives' remuneration |
2,536 | 2,536 | ||
| Of which short-term benefits | 2,149 | 2,149 | ||
| Of which post-employment benefits |
387 | 387 |
256
| Significant transactions with related parties as at 31.12.2021 |
(in thousands of €) | |||
|---|---|---|---|---|
| Parent company |
Joint arrange ments |
Other related parties |
Total | |
| I. Assets with related parties | 320.254 | 9.000 | 5.311 | 334.565 |
| 1. Other financial assets | 0 | 9.000 | 0 | 9.000 |
| Loans | 0 | 9.000 | 0 | 9.000 |
| 2. Financial lease receivables (current and non-current) |
0 | 0 | 2.695 | 2.695 |
| 3. Trade and other receivables | 0 | 0 | 2.602 | 2.602 |
| Clients | 0 | 0 | 2.602 | 2.602 |
| 4. Cash and cash equivalents | 320.254 | 0 | 0 | 320.254 |
| 5. Other current assets | 0 | 0 | 14 | 14 |
| II. Liabilities with related parties | 239.644 | 0 | 693 | 240.332 |
| 1. Interest-bearing liabilities (current and non-current) |
239.391 | 0 | 0 | 239.391 |
| Other borrowings | 239.391 | 0 | 0 | 239.391 |
| 2. Trade and other payables | 246 | 0 | 96 | 338 |
| Suppliers | 193 | 0 | 91 | 284 |
| Other payables | 53 | 0 | 4 | 53 |
| 3. Other current liabilities | 7 | 0 | 597 | 604 |
| III. Transactions with related parties | ||||
| 1. Services rendered and goods delivered |
2.451 | 1.220 | 20.057 | 23.728 |
2. Services received (-) -2.172 0 -94 -2.266 3. Net financial income -7.765 0 0 -7.765
remuneration 2.443 2.443 Of which short-term benefits 2.078 2.078 Of which post-employment benefits 365 365
Pursuant to Article 10 of the Articles of Association, the Board of Directors of Fluxys Belgium SA comprises at least three and no more than 24 non-executive directors. Furthermore, the 'special share' grants to the Minister the right to appoint two representatives of the federal government in the Board of Directors. Currently, two representatives of the federal government attend the meetings of the Board of Directors and the Strategic Committee.
The ordinary general meeting has decided to set the remuneration of the directors and government representatives to a maximum of €360,000 (value 01-01-2007), to be allocated by the Board of Directors amongst its members, and to grant an attendance fee of €250 per meeting of the Board of Directors and advisory committees.
Pursuant to Article 15 of the Articles of Association of Fluxys Belgium, the Board of Directors is authorised to pay a special remuneration to directors who carry out special duties for the entity. The Board also has the right to reimburse travel expenses and costs incurred by the members of the Board of Directors.
The Fluxys Belgium group has not granted any loans to directors. In addition, the directors have not entered into unusual or abnormal transactions with the group. No shares or share options have been granted to the directors.
For further information, the reader should refer to the Corporate Governance Declaration in the directors' report and to Note 8 'Related parties' for the breakdown of remuneration by category.
Based on the information available as of today, it is very difficult to estimate the economic impact of the war in Ukraine. Based on the current situation, the essential nature of the company's activities and its regulatory framework, we do not foresee any significant impact on the consolidated results of the Fluxys Belgium group in 2023.
258
4. Directors's and senior executives'
Given the significance of the equity as well as the revenue of the parent entity in the consolidated financial statements, the publication of the detailed version of the annual accounts and the notes to the accounts in this brochure would, in the majority of cases, be redundant given the explanations found in the consolidated accounts.
Pursuant to Article 3:17 of the Companies Code, the decision was made to present only an abridged version of the Fluxys Belgium SA statutory annual accounts.
The statutory auditor issued an unqualified audit opinion on the annual accounts of Fluxys Belgium SA.
The statutory accounts of Fluxys Belgium SA and the audit opinion have been filed with the National Bank of Belgium. They are available on the Fluxys Belgium website (www.fluxys.com/belgium) and can also be obtained free of charge upon request at the following address:
Fluxys Belgium SA Communication Department Avenue des Arts 31, 1040 Brussels
| Assets | In thousands of € | |
|---|---|---|
| 31-12-2022 | 31-12-2021 | |
| Formation expenses | 1,265 | 1,423 |
| Fixed assets | 1,432,702 | 1,502,877 |
| Intangible assets | 22,019 | 22,628 |
| Property, plant and equipment | 1,325,694 | 1,395,264 |
| Financial fixed assets | 84,989 | 84,985 |
| Current assets | 1,114,083 | 443,107 |
| Amounts receivable after more than one year | 15,144 | 9,144 |
| Stock and contracts in progress | 61,445 | 38,453 |
| Amounts receivable within one year | 156,913 | 82,058 |
| Cash investments | 0 | 0 |
| Cash at bank and in hand | 867,339 | 300,265 |
| Deferred charges and accrued income | 13,242 | 13,187 |
| Total | 2,548,050 | 1,947,407 |
| Equity and liabilities | In thousands of € | |
|---|---|---|
| 31-12-2022 | 31-12-2021 | |
| Equity | 456,783 | 475,163 |
| Capital | 60,272 | 60,272 |
| Share premium account | 38 | 38 |
| Revaluation surpluses | 258,498 | 287,049 |
| Reserves | 10,927 | 11,041 |
| Accumulated profits (losses) | 93,084 | 79,252 |
| Capital subsidies | 33,964 | 37,511 |
| Provisions and deferred taxes | 15,361 | 16,872 |
| Provisions for liabilities and charges | 3,177 | 3,468 |
| Deferred tax | 12,184 | 13,404 |
| Amounts payable | 2,075,906 | 1,455,372 |
| Amounts payable after more than one year | 921,383 | 942,106 |
| Amounts payable within one year | 560,408 | 203,391 |
| Accrued charges and deferred income | 594,115 | 309,875 |
| Total | 2,548,050 | 1,947,407 |
| Income statement | In thousands of € | |
|---|---|---|
| 31-12-2022 | 31-12-2021 | |
| Operating income | 951,458 | 491,057 |
| Operating charges | 864,397 | 415,933 |
| Operating profit | 87,061 | 75,124 |
| Financial income | 50,418 | 46,661 |
| Finance costs | 30,233 | 28,062 |
| Net financial income | 20,185 | 18,599 |
| Earnings before taxes | 107,246 | 93,723 |
| Transfer from deferred taxes | 1,220 | 1,259 |
| Income tax expenses | -24,546 | -23,417 |
| Net profit/loss for the period | 83,920 | 71,565 |
| Transfer to untaxed reserves | 114 | 114 |
| Profit for the period available for appropriation | 84,034 | 71,679 |
| Appropriation account | In thousands of € | |
|---|---|---|
| 31-12-2022 | 31-12-2021 | |
| Profit to be appropriated | 163,286 | 138,449 |
| Profit for the period available for appropriation | 84,034 | 71,679 |
| Profit carried forward from the previous period | 79,252 | 66,770 |
| Transfer from equity | 28,167 | 37,767 |
| From reserves | 28,167 | 37,767 |
| Transfer to equity | 0 | 0 |
| To the legal reserve | 0 | 0 |
| To the other reserves | 0 | 0 |
| Result to be carried forward | 93,084 | 79,252 |
| Profit to be carried forward | 93,084 | 79,252 |
| Profit to be distributed | 98,369 | 96,964 |
| Dividends | 98,369 | 96,964 |
| If the above proposal is accepted and taking tax requirements into account, the annual dividend, net of withholding tax, could be set at: |
€ 0,980 | € 0.966 |
In 2022, no advance on the dividend was paid. The gross unit dividend to be paid out for fiscal year 2022 is €1.40 per share (€0.980 net). It will be payable from 17 May 2023.
| Capital at the end of the period | ||||
|---|---|---|---|---|
| 31-12-2022 | ||||
| Subscribed capital | ||||
| At the end of the previous period | 60,272 | |||
| At the end of the period | 60,272 | |||
| Capital represented by | ||||
| Registered shares | 62,351,736 | |||
| Dematerialised shares | 7,911,765 | |||
| Structure of shareholders | ||||
| Declarant | Date of declaration |
Type | Number of voting rights declared |
% |
| Fluxys | 13-12-2017 | B/D | 63,237,240 | 90,00 |
The Belgian State holds one specific share.
| Income taxes | In thousands of € |
|---|---|
| 31-12-2022 | |
| Breakdown of heading 670/3 | |
| Income taxes on the result of the current period | 24,318 |
| Taxes and withholding taxes due or paid | 24,320 |
| Excess of income tax prepayments | -2 |
| Estimated additional taxes | 0 |
| Income taxes on previous periods | 228 |
| Additional taxes due or paid | 228 |
| Additional taxes (estimated or provided for) | 0 |
Reconciliation between profit before taxes and estimated taxable profit
| Profit before taxes | 107,246 |
|---|---|
| Permanent differences: | -9,975 |
| Definitively taxed income | -43,678 |
| Non-deductible expenses and hidden reserves | 5,300 |
| Notional interest | 0 |
| Taxable reserves | 32,675 |
| Depreciation of financial fixed assets | 0 |
| Transfer from untaxed reserves | 114 |
| Transfer from deferred taxes | 1,220 |
| Deductible innovation revenue | -5,400 |
| Provisions non déductibles | 0 |
| Hidden reserves | -206 |
| Total | 97,271 |
ONSS N°: 030012851238 Joint Commission N°: 326
A. Employees recorded in the personnel register
| 1a. During the current period | |||
|---|---|---|---|
| Total | Men | Women | |
| Average number of employees | |||
| Full time | 743.9 | 642.5 | 101.4 |
| Part-time | 121.1 | 68.8 | 52.3 |
| Total in full-time equivalents (FTE) | 836.0 | 695.0 | 141.0 |
| Number of hours actually worked | |||
| Full time | 1,115,586 | 964,683 | 150,903 |
| Part-time | 137,922 | 77,155 | 60,767 |
| Total | 1,253,508 | 1,041,838 | 211,670 |
| Employee expenses | |||
| Full time | 105,634,555 | 93,574,622 | 12,059,933 |
| Part-time | 16,238,345 | 10,017,343 | 6,221,002 |
| Total | 121,872,900 | 103,591,965 | 18,280,935 |
| Advantages in addition to wages | 1,905,640 | 1,619,794 | 285,846 |
| 1b. During the previous period | |||
|---|---|---|---|
| Total | Men | Women | |
| Average number of employees (FTE) | 835.3 | 688.2 | 147.1 |
| Number of hours actually worked | 1,274,610 | 1,047,607 | 227,003 |
| Employee expenses | 109,313,981 | 92,578,011 16,735,970 | |
| Advantages in addition to wages | 2,095,665 | 1,774,819 | 320,846 |
| #OneteamOnetarget O OO | |||
|---|---|---|---|
| ----------------------------------- | -- | -- | -- |
| Full time | Part-time | Total FTE* | |
|---|---|---|---|
| a. Employees recorded in the personnel register | 767 | 123 | 861.0 |
| b. By nature of the employment contract | |||
| Contract for an indefinite period | 752 | 123 | 846.0 |
| Contract for a definite period | 15 | 0 | 15.0 |
| Contract for execution of specifically assigned work | 0 | 0 | 0.0 |
| Replacement contract | 0 | 0 | 0.0 |
| c. According to gender and study level | |||
| Men | 663 | 71 | 717.5 |
| Primary education | 0 | 0 | 0.0 |
| Secondary education | 267 | 39 | 298.0 |
| Higher non-university education | 169 | 11 | 177.2 |
| University education | 227 | 21 | 242.3 |
| Women | 104 | 52 | 143.5 |
| Primary education | 0 | 0 | 0.0 |
| Secondary education | 17 | 11 | 25.3 |
| Higher non-university education | 41 | 27 | 61.8 |
| University education | 46 | 14 | 56.4 |
| d. By professional category | |||
| Management | 290 | 31 | 313.1 |
| Employees | 477 | 92 | 547.9 |
| Workers | 0 | 0 | 0.0 |
| Other | 0 | 0 | 0.0 |
B. Hired temporary staff and personnel placed at the enterprise's disposal
| During the current period | Hired temporary staff |
Personnel placed at disposal of the entity |
|---|---|---|
| Average number of persons employed | 6.7 | 0 |
| Number of hours actually worked | 13,222 | 0 |
| Costs for the enterprise | 488,028 | 0 |
| Full time | Part time | Total FTE* | |
|---|---|---|---|
| Entries | |||
| a. Employees recorded in the personnel register | 85 | 1 | 85.8 |
| b. By nature of the employment contract | |||
| Contract for an indefinite period | 72 | 1 | 72.8 |
| Contract for a definite period | 13 | 0 | 13.0 |
| Contract for execution of specifically assigned work | 0 | 0 | 0.0 |
| Replacement contract | 0 | 0 | 0.0 |
| Exits | |||
| a. Employees whose contract end-date has been recorded in the personnel register in this financial year |
60 | 5 | 62.8 |
| b. By nature of the employment contract | |||
| Contract for an indefinite period | 46 | 4 | 48.2 |
| Contract for a definite period | 14 | 1 | 14.6 |
| Contract for execution of specifically assigned work | 0 | 0 | 0.0 |
| Replacement contract | 0 | 0 | 0.0 |
| c. By reason of termination of contract | |||
| Retirement | 13 | 2 | 14.0 |
| Early retirement | 0 | 0 | 0.0 |
| Dismissal | 8 | 1 | 8.8 |
| Other reason | 39 | 2 | 40.0 |
| Of which: the number of persons who continue to render services to the company at least part-time on a self-employed basis |
0 | 0 | 0.0 |
*full-time equivalent
Information on training provided to employees during the period
| Men | Women | |
|---|---|---|
| Initiatives in formal continued professional development at the expense of the employer |
||
| Number of employees involved | 715 | 162 |
| Number of actual training hours | 20,922 | 2,920 |
| Net costs for the enterprise | 3,461,285 | 483,320 |
| Of which gross costs directly linked to training | 3,461,285 | 483,320 |
| Of which fees paid and payments to collective funds | 0 | 0 |
| Of which subsidies and other financial advantages received (to deduct) |
0 | 0 |
| Total of initiatives of less formal or informal professional training at the expense of the employer |
||
| Number of employees involved | 580 | 132 |
| Number of actual training hours | 7,304 | 1,623 |
| Net costs for the enterprise | 619,999 | 124,700 |
| Total of initiatives of initial professional training at the expense of the employer |
||
| Number of employees involved | 0 | 0 |
| Number of actual training hours | 0 | 0 |
| Net costs for the enterprise | 0 | 0 |
In the context of the statutory audit of the Consolidated Financial Statements) of Fluxys Belgium NV (the "Company") and its subsidiaries (together the "Group"), we report to you as statutory auditor. This report includes our opinion on the consolidated balance sheet as at 31 December 2022, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year ended 31 December 2022 and the disclosures (all elements together the "Consolidated Financial Statements") as well as our report on other legal and regulatory requirements. These two reports are considered one report and are inseparable.
We have been appointed as statutory auditor by the shareholders' meeting of 10 May 2022, in accordance with the proposition by the Board of Directors following recommendation of the Audit Committee and following recommendation of the workers' council. Our mandate expires at the shareholders' meeting that will deliberate on the Consolidated Financial Statements for the year ending 31 December 2024. We performed the audit of the Consolidated Financial Statements of the Group during 4 consecutive years.
We have audited the Consolidated Financial Statements of Fluxys Belgium NV, that comprise of the consolidated balance sheet on
31 December 2022, the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows of the year and the disclosures, which show a consolidated balance sheet total of € 3.406,6 million and of which the consolidated income statement shows a profit for the year of € 83,7 million.
In our opinion, the Consolidated Financial Statements give a true and fair view of the consolidated net equity and financial position as at 31 December 2022, and of its consolidated results for the year then ended, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union ("IFRS") and with applicable legal and regulatory requirements in Belgium.
We conducted our audit in accordance with International Standards on Auditing ("ISAs") applicable in Belgium. In addition, we have applied the ISA's approved by the International Auditing and Assurance Standards Board ("IAASB") that apply at the current year-end date and have not yet been approved at national level. Our responsibilities under those standards are further described in the "Our responsibilities for the audit of the Consolidated Financial Statements" section of our report.
We have complied with all ethical requirements that are relevant to our audit of the Consolidated Financial Statements in Belgium, including those with respect to independence.
We have obtained from the Board of Directors and the officials of the Company the explanations and information necessary for the performance of our audit and we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Financial Statements of the current reporting period.
These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole and in forming our opinion thereon, and consequently we do not provide a separate opinion on these matters.
As described in chapter 'Legal and regulatory framework' of the annual report and note 5.12 of the Consolidated Financial Statements, a regulated tariff mechanism is applied to the transportation of gas (gas flows within Belgium and border-to-border flows), the storage of gas and for LNG terminalling activities. For these activities, the net result is determined by applying calculation methods imposed by the Belgian regulator, the Commission for Electricity and Gas Regulation (the "CREG") (together the "Tariff Mechanism").
The Tariff Mechanism is based on calculation methods that are complex and that require the use of parameters (the Beta of the regulated activity of the Group, return on equity, ...), and of accounting data of the regulated activities (the Regulated Asset Base, the regulated equity, capital expenditures ("CAPEX") and subsidies received). In addition, for extension investments on LNG installations performed since 2004, the Tariff Mechanism provides in a specific calculation method whereby the return is determined following an IRR formula (Internal Rate of Return) as determined by the CREG.
The Tariff Mechanism makes a distinction between manageable and non-manageable costs. Deviations from the estimated value of non-manageable costs are fully allocated to the regulatory assets or liabilities (future tariffs). The manageable costs are costs over which the Group has control, and whereby deviations are distributed between the shareholders of the Group and future tariffs.
Therefore, the calculation methods of the Group's net result are complex and require judgements from management, more particularly with respect to the use of correct accounting data and parameters as imposed by the regulator. The use of incorrect accounting data, and deviations in assumptions, can have a material impact on the Group's net result.
272
Amongst others, we have performed the following procedures:
Property, plant and equipment amounts to 54% of the consolidated balance sheet of the Group, with a total capital expenditure ('CAPEX') of € 105,5 million in 2022 and a net book value of € 1.855,4 million as at 31 December 2022. Property, plant and equipment form the most important basis for the Regulated Asset Base ("RAB"). Depreciations are classified as non-manageable operating cost and thus have an important impact on the tariffs. The economical useful life, as accepted by the regulator CREG, impacts the depreciations.
As a result of the importance of property, plant and equipment on the total balance sheet and on the regulated result, and given its relevance to the users of the Consolidated Financial Statements, this topic is considered a key audit matter.
Amongst others, we have performed the following procedures:
The Board of Directors is responsible for the preparation of the Consolidated Financial Statements that give a true and fair view in accordance with IFRS and with applicable legal and regulatory requirements in Belgium and for such internal controls relevant to the preparation of the Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of Consolidated Financial Statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, and provide, if applicable, information on matters impacting going concern, The Board of Directors should prepare the financial statements using the going concern basis of accounting, unless the Board of Directors either intends to liquidate the Company or to cease business operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance whether the Consolidated Financial Statements are free from material misstatement, whether due to fraud or error, and to express an opinion on these Consolidated Financial Statements based on our audit. Reasonable assurance is a high level of assurance, but not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 Consolidated Financial Statements.
In performing our audit, we comply with the legal, regulatory and normative framework that applies to the audit of the Consolidated Financial Statements in Belgium. However, a statutory audit does not provide assurance about the future viability of the Company
274
and the Group, nor about the efficiency or effectiveness with which the board of directors has taken or will undertake the Company's and the Group's business operations. Our responsibilities with regards to the going concern assumption used by the board of directors are described below.
As part of an audit in accordance with ISAs, we exercise professional judgment and we maintain professional skepticism throughout the audit. We also perform the following tasks:
We communicate with the Audit Committee within the Board of Directors 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.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the audits of the subsidiaries. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities.
We provide the Audit Committee within the Board of Directors 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, related safeguards.
From the matters communicated with the Audit Committee within the Board of Directors, we determine those matters that were of most significance in the audit of the Consolidated Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our report, unless the law or regulations prohibit this.
The Board of Directors is responsible for the preparation and the content of the Board of Directors' report on the Consolidated Financial Statements, the non-financial information attached to the Board of Directors' report, and other information included in the annual report.
In the context of our mandate and in accordance with the additional standard to the ISAs applicable in Belgium, it is our responsibility to verify, in all material respects, the Board of Directors' report on the Consolidated Financial Statements, the non-financial information attached to the Board of Directors' report, and other information included in the annual report, as well as to report on these matters.
In our opinion, after carrying out specific procedures on the Board of Directors' report, the Board of Directors' report is consistent with the Consolidated Financial Statements and has been prepared in accordance with article 3:32 of the Code of companies and associations.
In the context of our audit of the Consolidated Financial Statements, we are also responsible to consider whether, based on the information that we became aware of during the performance of our audit, the Board of Directors' report and other information included in the annual report, being:
contain any material inconsistencies or contains information that is inaccurate or otherwise misleading. In light of the work performed, there are no material inconsistencies to be reported.
The non–financial information required by article 3:32, § 2, of the Code of companies and associations has been included in the annual report. The Company has prepared the Group's non-financial information based on the reporting guidelines of the Global Reporting Initiative standards ("GRI"). However, in accordance with article 3:80 § 1, 5° of the Code of companies and associations, we do not express any opinion on the question whether this non-financial information has been established in accordance with the GRI framework.
As requested by the Company, we have issued a separate limited assurance report on a selection of environmental and social Key Performance Indicators ("KPI's") in accordance with the International Standard on Assurance Engagements ISAE 3000. We do not express any assurance on the KPI's not covered by our separate limited assurance report.
Our audit firm and our network have not performed any services that are not compatible with the audit of the Consolidated Financial Statements and have remained independent of the Company during the course of our mandate.
The fees related to additional services which are compatible with the audit of the Consolidated Financial Statements as referred to in article 3:65 of the Code of companies and associations were duly itemized and valued in the notes to the Consolidated Financial Statements.
In accordance with the standard on the audit of the conformity of the financial statements with the European single electronic format (hereinafter "ESEF"), we have carried out the audit of the compliance of the ESEF format with the regulatory technical standards set by the European Delegated Regulation No 2019/815 of 17 December 2018 (hereinafter: "Delegated Regulation").
The board of directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter 'the digital consolidated financial statements') included in the annual financial report available on the portal of the FSMA (https://www.fsma.be/en/data-portal).
It is our responsibility to obtain sufficient and appropriate supporting evidence to conclude that the format and markup language of the digital consolidated financial statements comply in all material respects with the ESEF requirements under the Delegated Regulation.
Based on the work performed by us, we conclude that the format and tagging of information in the digital consolidated financial statements of Fluxys Belgium NV per 31 December 2022 included in the annual financial report available on the portal of the FSMA (https://www.fsma.be/en/data-portal) are, in all material respects, in accordance with the ESEF requirements under the Delegated Regulation.
This report is consistent with our supplementary declaration to the Audit Committee as specified in article 11 of the regulation (EU) nr. 537/2014.
Diegem, 30 March 2023
EY Bedrijfsrevisoren BV Statutory auditor Represented by
Wim Van Gasse * Partner *Acting on behalf of a BV/SRL
23WVG0071
We hereby attest that to our knowledge:
Brussels, 29 March 2023
Christian Leclercq Pascal De Buck Member of the Executive Board Managing Director Chief Financial Officer Chief Executive Officer
The Fluxys Belgium group continually evaluates its financial solidity, in particular using the following financial ratios:
Average combined investments in property, plant and equipment linked to the extensions to the Zeebrugge LNG terminal and in unregulated activities.
Interest charges less financial income from lease contracts, interest on investments and cash equivalents and other interest received, excluding interest on regulatory assets and liabilities.
Interest expenses on debts (including interest charges on leasing debts), less interest on regulatory liabilities.
Earnings Before Interests and Taxes or operating profit/loss from continuing operations plus the result of investments accounted for by the equity method and the dividends received from unconsolidated entities. EBIT is used to monitor the operational performance of the group over time.
Earnings Before Interests, Taxes, Depreciation and Amortisation or operating profit/loss from continuing operations, before depreciation, amortisation, impairment and provisions, plus the result of investments accounted for by the equity method and the dividends received from unconsolidated entities. EBITDA is used to monitor the operational performance of the group over time, without considering non-cash expenses.
Interest-bearing liabilities (including leases), less regulatory liabilities, cash linked to early refinancing transactions and 75% of the balance of cash, cash equivalents and shortand long-term cash investments (the other 25% is considered as reserve for operational needs and therefore not available for investments). This indicator gives an idea about the amount of interest bearing debt that would remain if all available cash would be used to reimburse loans. In order to reflect reality more accurately, the exceptional solidarity contribution of €300 million has been removed from the cash position when calculating net financial debt. Indeed, this debt was recognised on 31 December whereas it was paid in January 2023, which has a significant influence on the calculation.
Funds from Operations or profit/loss from continuing operations, excluding changes in regulatory assets and liabilities, before depreciation, amortisation, impairment and provisions, to which dividends received from associates and joint ventures and unconsolidated entities are added, and from which net financial expenses and current tax are deducted. This ratio indicates the cash generated by operational activities and thus the capacity of the group to reimburse its debts and to invest but also to pay dividends.
Average Regulatory Asset Base, or average value of the regulated asset base for the year. The RAB is a regulatory concept which contains the assets on which a regulatory return is granted, as regulated by the CREG.
Total of the RAB and other property, plant and equipment investments outside the RAB.
Retained Cash-Flow or FFO, less dividends paid. This ratio indicates the cash generated by operational activities, but after payment of the dividends. It thus shows the remaining net capacity of the group to reimburse its debts and to invest.
Weighted Average Cost of Capital, which reflects the authorised return on RAB under the regulation.
282
| Fluxys Belgium consolidated income statement in thousands of € |
31.12.2022 | 31.12.2021 | Notes |
|---|---|---|---|
| Operating profit/loss | 147,305 | 137,821 | |
| Depreciations | 168,051 | 173,993 | |
| Provisions | -6,993 | 7,070 | |
| Impairment losses | 14,804 | 21 | |
| Earnings from associates and joint ventures | 0 | 0 | |
| Dividends from unconsolidated entities | 0 | 0 | |
| EBITDA in thousands of € | 323,167 | 318,905 |
| Fluxys Belgium consolidated income statement in thousands of € |
31.12.2022 | 31.12.2021 | Notes |
|---|---|---|---|
| Operating profit/loss | 147,305 | 137,821 | |
| Earnings from associates and joint ventures | 0 | 0 | |
| Dividends from unconsolidated entities | 0 | 0 | |
| EBIT in thousands of € | 147,305 | 137,821 |
| Fluxys Belgium consolidated income statement in thousands of € |
31.12.2022 | 31.12.2021 | Notes |
|---|---|---|---|
| Financial income from lease contracts | 56 | 60 | |
| Interest income on investments, cash and cash equivalents |
3,970 | 927 | |
| Other interest income | 83 | 30 | |
| Borrowing interest costs | -39,292 | -37,338 | |
| Borrowing interest cost on leasing | -890 | -983 | |
| Interest on regulatory assets and liabilities | 5,230 | 1,779 | |
| Net financial expenses in thousands of € | -30,843 | -35,525 |
| Fluxys Belgium consolidated income statement in thousands of € |
31.12.2022 | 31.12.2021 | Notes |
|---|---|---|---|
| Borrowing interest costs | -39,292 | -37,338 | |
| Borrowing interest costs on leasing | -890 | -983 | |
| Interest on regulatory liabilities | 5,230 | 1,779 | |
| Interest expenses in thousands of € | -34,952 | -36,542 |
| Fluxys Belgium consolidated income statement in thousands of € |
31.12.2022 | 31.12.2021 | Notes |
|---|---|---|---|
| Operating profit/loss | 147,305 | 137,821 | |
| Operating revenue - Movements in regulatory assets and liabilities |
456,225 | -36,095 | |
| Depreciations | 168,051 | 173,993 | |
| Provisions | -6,993 | 7,070 | |
| Impairment losses | 14,804 | 21 | |
| Inflows related to associates and joint ventures | 0 | 0 | |
| Dividends from unconsolidated entities | 0 | 0 | |
| Net financial expenses | -30,843 | -35,525 |
| FFO in thousands of € | 712,819 | 210,148 | |
|---|---|---|---|
| Fluxys Belgium consolidated income statement in thousands of € |
31.12.2022 | 31.12.2021 | Notes |
| FFO | 712,819 | 210,148 | |
| Dividends paid | -96,964 | -96,262 E – consolidated statement of cash flows |
|
| RCF in thousands of | 615,855 | 113,886 |
Current tax -35,730 -37,137
| Fluxys Belgium consolidated balance sheet in thousands of € |
31.12.2022 | 31.12.2021 |
|---|---|---|
| Non-current interest-bearing liabilities | 1,115,772 | 1,162,091 |
| Current interest-bearing liabilities | 56,269 | 57,432 |
| Other financing (current) | 0 | 0* |
| Other financing (non-current) | 0 | 0* |
| Other liabilities (current) | 0 | 0* |
| Other liabilities (non-current) | 0 | 0* |
| Cash investments (75%) | -19,585 | -34,305 |
| Cash and cash equivalents (75%) | -578,031 | -275,198 |
| Other financial assets (75%) | -80,625 | -63,974 |
| Net financial debt in thousands of € | 493,800 | 846,046 |
*From 2021, the regulatory liabilities are presented as a separate line item on the balance sheet (including in the comparative figures). See note 1f of the annual report for further explanations.
| Fluxys Belgium consolidated balance sheet in millions of € |
31.12.2022 | 31.12.2021 | |
|---|---|---|---|
| Transmission | 2,059,1 | 2,047.5 | |
| Storage | 228,0 | 228.8 | |
| LNG terminalling | 305,7 | 303.0 | |
| RAB in millions of € | 2,592,8 | 2,579.4 | |
| Other tangible investments outside RAB | 417,7 | 410.4 | |
| Extended RAB in millions of € | 3,010,6 | 2,989.7 |
In Belgium, the Regulated Asset Base (RAB) is determined based on the average book value of the fixed assets for the period, plus essentially the accounting amortisations accumulated on the revaluation surpluses. The calculation is in line with the tariff methodology published by the CREG.
| Welfare contribution in thousands of € | 31.12.2022 | 31.12.2021 | Notes |
|---|---|---|---|
| Dividends paid | 96,264 | 96,262 | D. Consolidated statement of changes in equity |
| Financial income | -4,589 | -1,142 | 4.3 |
| Financial expenses | 40,805 | 38,375 | 4.4 |
| Goods & consumables | 5,582 | 3,422 | 4.2.1 |
| Services & miscellaneous goods | 465,521 | 146,348 | 4.2.2 |
| Employee benefits | 132,931 | 112,549 | 4.2.3 |
| Taxes and duties paid | 35,066 | 36,938 | 4.5.1 |
| Lease agreements | 5,641 | 5,874 | 4.2.5 & 4.4 |
| Welfare contribution in thousands of € | 777,221 | 438,626 |
| 09.05.2023 | General Meeting |
|---|---|
| 17.05.2023 | Payment of dividend |
| 28.09.2023 | Press release from the Board of Directors on the half-yearly results in accordance with IFRS |
The gross dividend per share amounts to €1.40 for the 2022 financial year (€0.980 net), compared to €1.38 (€0.966 net) for 2021. The recurring dividend is primarily determined on the basis of equity invested, the financial structure, the risk-free interest rates.
Evolution of Fluxys Belgium share price – BEL 20 (Share price 13-12-2001 = base 100%)
Filip De Boeck +32 2 282 79 89 – [email protected]
Press contacts +32 471 95 00 – [email protected]
Creation and realisation
www.chriscom.eu
Creation – www.federate.eu Photographer – Christophe Licoppe
© Year of publication 2023 – Atomium / Rights SOFAM - Belgium
Will Anderson, Belga, Stijn Boelens, Renaud Coppens, Fabrice Debatty, Jasper Leonard, Olivier Pirard, Wim Robberechts, David Samyn, Dries Van den Brande, Johan Van Droogenbroeck
Avenue des Arts 31 – 1040 Brussels +32 2 282 72 11 – www.fluxys.com/belgium VAT BE 0402.954.628 – RPM Bruxelles D/2023/9484/3
Leen Vanhamme Avenue des Arts 31 – 1040 Brussels
This financial annual report is also available in Dutch and French. Contact our communication service to obtain a copy: [email protected]
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