Annual Report 2020 Audited Table of Results Contents for the Year Ended 30 September 2020
Total Page：16
File Type：pdf, Size：1020Kb
ANNUAL REPORT 2020 AUDITED TABLE OF RESULTS CONTENTS FOR THE YEAR ENDED 30 SEPTEMBER 2020 The year 2020 brought new challenges INTRODUCTION 2 to businesses and communities across Message from the Management Board 2 Message from the Supervisory Board 5 the globe. Against this backdrop, we Timeline of key events 8 kept our focus on addressing past Summarised Group structure 12 issues and maintaining stability across PART I REPORT OF THE MANAGEMENT BOARD the operations and to the Group, while also protecting our people and FINANCIAL AND BUSINESS REVIEW 16 Introduction 16 managing as best as possible the Overview 16 significant impacts of COVID-19. Current trading performance 16 Reportable segment information 16 Without question, the financial year Presentation of discontinued operations 16 Critical accounting judgements and estimates 17 ended 30 September 2020 was another Net debt and cash flow 17 year of progress, during which we built Geographic context and impact of foreign currencies 17 on the achievements of prior periods. Non-operational expenses 18 Finance costs 18 In the 2020 Reporting Period we Tax 18 Related party and intragroup transactions 18 were able to focus primarily on Governance and leadership 18 finding a solution to the litigation Sustainability (ESG) and corporate social investments (CSI) 18 faced by entities within the Group. Corporate activity during the previous Reporting Periods 19 Corporate activity during the 2020 Reporting Period 19 The multiplicity and complexity of the Corporate activity after the Reporting Date 20 legal claims has made this the most Group debt restructure 21 Forensic Investigation 21 demanding of tasks. Remediation plan 21 Litigation 21 The Group’s objective throughout has Litigation settlement proposal 21 been to achieve a comprehensive Internal group restructure 22 global litigation settlement and, as Regulatory engagement and listing 22 Shareholder meetings 22 detailed throughout the Annual Report, COVID-19 22 major progress towards a solution was Going concern 23 made. The Company’s dividends on Ordinary Shares 24 Preference Shares and dividends 24 As we review the past year, it is clear Events after the Reporting Date 25 2020 Separate Financial Statements relating that much has been achieved. to Steinhoff International Holdings N.V. 25 External audit 25 Appreciation 25 OPERATIONAL REVIEW 26 PART III Introduction 28 REPORT OF THE SUPERVISORY BOARD Pepco Group 31 Composition of the Supervisory Board 70 Pepkor Africa 32 Independence 71 Greenlit Brands 33 Training and education 71 All other 34 Supervisory Board meetings, attendance, involvement with Steinhoff corporate and treasury services 35 strategy, activities report and evaluations 71 Mattress Firm – equity accounted 36 Committees of the Supervisory Board 72 Annexures to operational review 37 Report of the Audit and Risk Committee 72 RISK MANAGEMENT 40 Report of the Human Resources and Remuneration Committee 73 Introduction 40 Report of the Nomination Committee 74 Risk management and internal control environment 40 Report of the Governance, Social and Ethics Committee 75 Principal risks 41 Principal risk comparison to the prior year 46 PART IV REMUNERATION REPORT Principal risk post year-end 46 Principal risks: OpCos 46 Introduction 78 Financial risk management 46 Part 1: Summarising overview 79 Code of Conduct compliance 47 Part 2: Description of the current remuneration policy 80 Risk financing – insurance programme 48 Part 3: Application of the current remuneration policy during 81 Remediation Plan 48 financial year 2020 Part 4: Highlights from the proposed modification of the 89 MANAGEMENT BOARD STATEMENTS 49 remuneration policy for financial year 2021 Responsibility statements 49 PART V In-control statement 49 ANNEXURES Non-financial statement 50 Provision in the Articles regarding the allocation of profits 52 Annexure A – Investor information 92 FINANCIAL STATEMENTS FOR THE PERIOD ENDED 95 PART II 30 SEPTEMBER 2020 CORPORATE GOVERNANCE REPORT OTHER INFORMATION 269 Introduction 54 Independent Auditor's Report 270 Dutch SoP 54 Articles of Association 273 Management Board 54 Distribution of profit 273 Supervisory Board 57 List of branches 274 General Meeting 64 Statutory list of all subsidiaries 276 Dutch Corporate Governance compliance 65 Disclosures pursuant to Dutch Decree GLOSSARY OF TERMS 294 implementing article 10 EU Takeover Directive 67 STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2020 1 INTRODUCTION MESSAGE FROM THE MANAGEMENT BOARD Dear Stakeholders, The year 2020 brought new challenges to businesses and communities across the globe. Against this backdrop, we kept our focus on addressing past issues and maintaining stability across the operations and to the Group, while also protecting our people and managing as best as possible the significant impacts of COVID-19. Without question, the financial year ended 30 September 2020 was another year of progress, during which we built on the achievements of prior periods. The final months of the previous financial year marked the successful completion of step one of our three-step strategy, with the implementation of the Group debt restructuring. In the 2020 Reporting Period we were therefore able to focus primarily on step two, finding a solution to the litigation faced by entities within the Group. The multiplicity and complexity of the legal claims has made this the most demanding of tasks. The Group’s objective throughout has been to achieve a comprehensive global litigation settlement and, as detailed below, major progress towards a solution was made. More tough challenges lie ahead as we strive to complete step two, focus on step three and reduce the Group’s debts. As we review the past year, it is clear that much has been achieved. 2 STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2020 INTRODUCTION//message from the management board continued FINANCIAL PERFORMANCE MANAGEMENT BOARD PRIORITIES IN THE the Reporting Period and the necessary improvements to governance, policies, internal Steinhoff is a global holding company with YEAR systems and controls are now embedded investments in the retail sector. These The Management Board was focused on five across the Group. underlying businesses operate a number of priorities during the Reporting Period: strong local brands and are well diversified by The management teams within the various Operational improvements geography and business line. businesses remained stable and focused Working closely with the operational boards on their specific responsibilities throughout While COVID-19 constraints affected the and management teams, over the past three the year. We thank them once again for their performance of all our businesses during the years the Management Board has helped loyalty, dedication and commitment. Reporting Period, the extent of the impact to identify, support and facilitate a range of COVID-19 Response varied according to their geographic exposure, business improvement initiatives in individual business mix and the severity, and duration of operating businesses. Management teams were The onset of the COVID-19 pandemic was a lock down restrictions at a local level. Post- strengthened, to fund operational requirements major shock to the global economy and its lock-down performance also showed a similar new debt was introduced at operational level, impact was felt during and subsequent to degree of variance. the strategic focus was reviewed, and improved the Reporting Period. In mid-March 2020 the operational management teams, together Individual businesses, such as Pepkor Africa governance measures adopted. The results with the Management Board, acted swiftly and Pepco Group, with their everyday value from these in the period prior to COVID-19 were to implement definitive COVID-19 response focus, continued to perform robustly, others, encouraging, with all underlying businesses strategies relevant to each business and such as Mattress Firm and Fantastic Furniture performing well or ahead of the previous year. operating jurisdictions with the focus on (part of the Greenlit Brands Group) reported The strength of the bounce back in performance introducing COVID-secure operating procedures strong trade as restrictions moderated and as lock downs were lifted also points to the to protect staff and customers, strengthening consumers invested in their homes. enduring impact of these initiatives. liquidity and commencing the necessary Despite the many challenges we faced in Financial Reporting planning for a safe re-opening for those the 2020 financial year, including mandatory The Group has been engaged in a businesses unable to trade during lockdown. store closures related to COVID-19, the Group comprehensive effort to update and regularise The Group’s performance through the COVID-19- reported a resilient performance. Total revenue its financial reporting since the discovery of impacted period has been resilient, with the from continuing operations for the year ended the accounting irregularities in December recovery in post lock down trade and its 30 September 2020 decreased marginally 2017. Further progress was achieved in the operational cash position being stronger than by 2% to €7.9 billion (2019: €8.1 billion), with 2020 financial year. During the Reporting expected. strong individual contributions from Greenlit Period, regular monthly financial reporting to Brands (+9%), Pepco Group (+3%) and lenders was initiated; Steinhoff Investment However, as we entered the new financial Pepkor Africa