Year Overview 2012 Final

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Year Overview 2012


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Contents

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3 / 65 Year Overview 2012

SHV at a glance 4

Report of the Supervisory Board of Directors 6

Five year summary 10

Report of the Executive Board of Directors 12

Corporate Philosophy 48

Major operating companies 50

SHV Energy 50

Dyas 53Mammoet 55

ERIKS 56

NPM Capital 59

Corporate 63


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SHV at a glance

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SHV is a privately-held family company that aims to maintain its strongposition in a number of operational activities and selected investment

activities. We invest for the long term, expand and develop businesses,

and provide our customers with excellent value services. We achieve

all this thanks to a team of people who are proud to be part of SHV.

The company was founded in the Netherlands in 1896 as a result of the

merger between a number of large coal trading companies. After the

decline of coal as the primary source of energy, halfway through the

twentieth century, SHV moved into other business areas.

Today, SHV is present in 48 countries on all continents and employs

about 56,000 people. We are active in energy distribution, cash-and-carry wholesale, heavy lifting and transport activities, and industrial

services. As an investor we are involved in the exploration,

development and production of oil and gas, primarily in the North Sea,

and we provide private equity to companies in the Benelux.

Energy distribution

SHV Energy is the leading supplier of LPG in the world. Well-known

brand names include Primagaz, Calor Gas, Liquigas, Super Gas,

Ipragaz, Supergasbras and Gaspol. SHV Energy is also involved in the

distribution of LNG and sustainable biomass, cogeneration technology

and small-scale solar technology.

Oil and gas investments

Dyas invests in joint ventures in the exploration, development and

production of oil and gas. Dyas acts as a non-operator, with a primary

focus on the North Sea.

Cash-and-carry wholesale

Makro is a focused cash-and-carry wholesaler with 215 Makro stores

in South America and Thailand. It distributes food and non-food

products with excellence in price, quality and variety to professional

customers.

SHV

SHV Energy

Dyas

Makro


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Heavy lifting and transportMammoet is a world-class, leading company specialised in heavy

lifting and transport solutions worldwide. Mammoet provides services

to the petrochemical, power generation, civil and offshore sectors.

Industrial services

ERIKS is engaged in the supply of high-quality mechanical

engineering components and associated technical and logistics

services. ERIKS has a leading position in its markets in Europe and the

USA. The ERIKS Group has a presence in 27 countries.

Private equity investments

NPM Capital provides private equity to companies with above-average

growth opportunities and focuses mainly on unlisted, medium-sized

businesses in the Benelux. As a reliable and long-term investor, NPM

Capital has built up a strong market position over several decades and

has holdings in 32 companies.

Mammoet

ERIKS

NPM Capital


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Report of the Supervisory Board of Directors

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In 2012, SHV achieved a solid result in challenging global economic and political circumstances.The company is fortunate to have a diversified business with a good geographical spread, with

excellent people in all of its businesses. SHV's long-term investment programme in people and

assets, combined with its conservative financing, provides it with considerable resilience which

enables the company to cope with adversity. During the year, the company focused on

strengthening its activities by improving its commercial agility, operational productivity and cash

management. SHV further pursued its strategy to invest in people and embarked on a global

sustainability programme.

During 2012, the Supervisory Board of Directors held five meetings and was in regular contact with

the Executive Board of Directors. At each meeting, the Executive Board informed the Supervisory

Board about the financial position of SHV and its businesses, the main developments in their

markets and the performance of each business and of the group as a whole. The SupervisoryBoard is informed in writing of the financial performance of the company on a monthly basis as well

as immediately in the case of any special matters concerning the company.

The Supervisory Board regularly reviews the strategy of each of SHV's activities. In 2012 the

strategy and positioning of Mammoet and NPM Capital were specifically reviewed. On an annual

basis, the Supervisory Board is informed about the outcome of post-investment reviews for larger

investments. In 2012 the major investments made in 2008 were evaluated and the lessons learned

were included in the investment proposal process. The Supervisory Board also approved the

annual plan of the businesses for 2013. After giving its approval in 2011, the Supervisory Board

supported the process of attracting long-term financing through private placements in the USA and

a smaller private placement in the Netherlands. During the course of 2012, the Executive Board

submitted specific proposals for investments and acquisitions including the private equity

investments of NPM Capital.

At a meeting in which the auditors were present, the Supervisory Board discussed the findings of

the annual audit and risk management review as well as compliance and the effectiveness of

controls. The Supervisory Board also evaluated its own functioning.

In September 2012 the Supervisory Board visited Houston, where the Board met the management

of Mammoet USA, the Executive Board of ERIKS and the local senior management of ERIKS'

businesses in North America ERIKS Seals & Plastics, LewisGoetz, Rawson, Industrial Controls

and Newdell and made site visits to Rawson and Newdell. As always, it is important to visit a

business and meet with local management and to be informed of the local challenges and

opportunities.


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The 2012 Annual Report, drawn up by the Executive Board, has been examined by the auditorsand has been found to be in order. The Supervisory Board of Directors proposes to the General

Meeting of Shareholders that:

the financial statements be adopted as presented herewith;

the Executive Board of Directors be discharged of further responsibility in respect of the

management of the company during 2012, and the Supervisory Board of Directors in respect of

the supervision thereof;

the distribution of income and the manner of dividend distribution, as proposed by the Executive

Board of Directors and approved by the Supervisory Board of Directors, be accepted.

At the end of the General Meeting of Shareholders, held on April 20, 2012, the term of

Mr H.H.F. Wijffels expired. At the same meeting he was re-appointed as member of the

Supervisory Board. The proposal to appoint Mrs P. Mars Wright as member of the SupervisoryBoard was adopted in the same General Meeting of Shareholders.

At the end of the General Meeting of Shareholders to be held on April 19, 2013, the term of

Mrs L.A.A. Van den Berghe on the Supervisory Board will expire. Mrs van den Berghe has been

part of the Board for fifteen years, in which she has seen generations come and go, and in which

many changes have taken place in businesses, and in the circumstances that SHV has operated

in. Despite these changes, her contribution has been consistent throughout, with a clear eye for the

essentials of governance and strategy. We sincerely thank her for this.

Mr J.J. de Rooij informed the Supervisory Board and his colleagues on the Executive Board in June

2012 that, after seven years as member of the Executive Board, he has decided to leave SHV for

personal reasons and pursue his career outside SHV. He resigned from his position on the

Executive Board per October 1, 2012. Mr de Rooij played an essential role in the large acquisitions

as well as divestments made by SHV in recent years, including the sale of The David J. Joseph

Company. His contribution to a better control framework is a solid base for the company in the

coming years. We thank Mr de Rooij for his input, dedication and contribution to SHV.

The Supervisory Board proposes to appoint Mr B.L.J.M. Beerkens and Mr W. van der Woerd to the

Executive Board. Mr Beerkens has decided to join SHV after a long and succesful career at Wolters

Kluwer, most recently in the function of CFO. Mr van der Woerd has been part of SHV for many

years, having started his career in the company with Makro, and is currently responsible for Human

Resources and Management Development within SHV. The proposed appointments will

complement the EBD with both financial and HR expertise. The Executive Board of Directors of

SHV will then comprise of Messrs P.J. Kennedy (Chairman), B.L.J.M. Beerkens, S.R. Nanninga

and W. van der Woerd.


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The outlook for the year ahead is not very favourable for many sectors of the global economy. TheSupervisory Board will continue to focus on strategic opportunities as well as on optimisation of the

current activities, cash generation and staffing the company with excellent people. The

Supervisory Board sincerely thanks the employees and the Executive Board for their valuable

contribution to the company in 2012. In times of rough economic weather, it is a joy to be part of

SHV and its dedicated, inspiring management and employees. All of their continuing efforts make

the results!

March 15, 2013

On behalf of the Supervisory Board of Directors,

A.M. Fentener van Vlissingen

Chairman


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Report of the Executive Board of Directors

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GeneralSHV is a private company operating globally with a diverse range of mostly operational activities. It

has a history of being a long-term investor, decentrally organised complemented with essential

central controls. The company is focused on people, safety, innovation, renewal, growth and

community. The primary objective of the company's businesses is to be competitive and to offer

added value to a growing base of satisfied and loyal customers. The company aims to improve its

profitability by consistently enhancing its performance in meeting this objective.

The overall result for SHV in 2012 was good. As is always the case with such a broad and diverse

range of activities, some activities and businesses performed better than others. This includes

varying performances from companies operating in the same field within individual activities.

Geographical differences in performance were also evident in the year. Some European-based

businesses in particular delivered performances that reflected the economic strain evident inrecent years in the region. NPM Capital, by the very nature of its activity in private equity, tends to

show results that fluctuate widely from time to time when compared with like-for-like results from

SHV's operational activities. Whereas SHV's net income over 2011 included the benefit of an

exceptional performance at NPM Capital, the corresponding results of NPM Capital in the year

under review were more in line with that which may be considered the norm.

Total sales in 2012, at 20.0 billion, represented an increase of 15% ( 2.6 billion) compared with

the preceding year. Income from operations, at 960 million, compared with 911 million in 2011

(an increase of 5%). Net income decreased year on year by 69 million (9%). At constant

exchange rates, sales grew by 15% year on year, income from operations increased by 3%, and

net income decreased by 9%.

The economic environment in which the businesses are operating is very troubling for all

concerned. The fallout from the 2008-2009 financial and banking crises continues to make itself felt

and remains very much unresolved. It remains a big threat to economic, social and political

stability, especially in major parts of Europe at the present time. The impact of the crises on

business is to be felt in reduced spending power and in cutbacks in investments. Government

deficits are being reined in out of necessity. Increased direct and indirect taxation is a consequence

of this. All of SHV's businesses are feeling the impact of these macroeconomic developments,

whether it is in reduced consumption of LPG in many European countries and even in parts of India

and China, or in the reduced performance of several of NPM's participations, the reduced order

backlog for ERIKS, or the below-average utilisation rates for certain segments of Mammoet's fleet

of cranes in the Benelux. As is well known, some formerly high-growth economies have also

slowed down significantly. Brazil is a notable example in this regard. Such developments inevitably

have an impact on pricing and margins, and call for ever-improving efficiency and productivity to

retain hard-pressed customers.

However, in some respects, the global economy still appears to be a two-speed world with a

number of Asian countries especially China still growing at rates that are the envy of the

traditional Westernised economies. It is to be hoped that these growing economies do not also fall

into the recessionary sphere, as they create demand for imports that is critical to maintaining


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employment and social order in the many countries now suffering from depressed internal demand.Notwithstanding their apparent attractiveness, some of these larger and faster-growing economies

are not necessarily good matches for much of SHV's activities for a variety of reasons. Hence the

majority of SHV's interests are thus far concentrated in Europe, South America and to a lesser

extent in Asia and North America. On an overall scale, the company has a limited presence in Africa

and Australia. What presence there is in these latter two regions is attributable to important project

work being undertaken by Mammoet. Geographical diversification is always a consideration in

SHV's investment strategy. Once the opportunities are there and our defined investment criteria

are met, SHV would be keen to invest in these potential host markets.

All of SHV's activities perform in highly competitive and changing environments. Differentiation in

all of the businesses is encouraged, with a specific focus on innovation where it is at all practical or

possible. Corporate social responsibility has always been exercised by SHV as a basic principle ofdoing business. The traditional focus on people and safety is a testament to this. New health and

safety policies were implemented and further safety investments were made in order to keep our

equipment and working environment in compliance with SHV's safety standards. Key Performance

Indicators in health and safety are continuously being refined and measured in all SHV activities.

This allows for benchmarking among the businesses.

SHV believes that sound business is rooted in high ethical standards and full compliance, at a

minimum, with the laws and regulations prevailing in its respective markets. It is always the

intention of SHV to raise standards of compliance and operating practices. In the light of this, SHV

has in recent years increased its focus on sustainability. Not only is this doing what is right from an

ethical and societal point of view, it is also a strategic initiative in general to pursue value-enhancing

differentiation in what the company has to offer its customers. In essence, sustainability is a

morally, socially and economically enhancing proposition. In a rapidly changing world with

environmental, demographic, natural resource and other issues, there is a requirement for

businesses to adapt to changing needs and customer demands. Engaging the greatest number

possible of SHV's own people in finding solutions that improve efficiency and productivity by

doing more with less is an ambition being pursued by senior management throughout the

organisation. Businesses are being stimulated through specific education programmes and the

sharing of experiences to actively explore all possibilities for the integration of sustainability in the

formulation of strategy. Most of SHV's activities are well advanced in their comprehension of the

sustainability concept, with further application being progressed.

SHV believes in maintaining strong balance sheets and avoiding over-leveraging. This is self-

evidently more critical at the present time than it was before the banking and financial crises. As

everyone knows, the refinancing of even quite sound businesses has become extremely difficult in

recent years, as banks have had to first deal with weaknesses in their own balance sheets, either

voluntarily or by regulation. This reality puts the focus on cash management in a very forceful way.

SHV has not been exempt from this reality. Management is monitoring working capital and

investment cash flow at least as critically as at any time in recent decades. SHVs Treasury was

very successful in 2012 in securing private placement financing totalling USD 533 million in the


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USA as well as financing in the Netherlands. Nevertheless, the relentless focus on cashmanagement intensified further in the year.

Growth is pursued both organically and by acquisition. Investment cash flow in 2012 amounted to

537 million compared with 1,666 million in the previous year. The figure for 2011 included the

acquisition of the remaining 25% in Mammoet as well as a number of significant acquisitions by

ERIKS in the USA. SHV has adopted a strategy to invest in broadening and deepening its presence

in existing activities in recent years.

SHV is intent on being a long-term investor in each of its activities. However, circumstances do

arise in which divestments are pursued. The company's sensitivity in circumstances in which

divestments are made is driven by two factors. One of these is, of course, the practical economic

considerations that must be taken into account. The other is that divestments are also consideredin terms of how they can be explained to SHV's own people, meaning that the market, economic

and strategic arguments favouring a divestment must be apparent and rational to the people in the

organisation. As it happens, there have only been eight minor divestments in 2012. These have

been in the SHV Energy and Dyas activities. Divestments in the NPM Capital portfolio are always

pursued on the basis of what is judged to be optimal in terms of timing and valuation and are a

normal feature for an activity in private equity.

SHV Energy

SHV Energy is amongst the world's leading distributors and marketers of LPG. The business is

active throughout Europe and Asia and also has a substantial presence in Brazil. SHV Energy is an

operational management company overseeing the individual LPG business units. Each business

unit operates under its own unique brand identity, reflecting the fact that SHV Energy is the product

of an acquisition strategy conducted over several decades. Follow-on acquisitions in individual

countries are consolidated and, consequently, operate under a single brand name. Many of SHV

Energy's brands are household names in their respective markets. In the course of 2012, SHV

Energy designed and implemented a new organisational structure that is operationally closer to the

businesses and also facilitates more knowledge-sharing among them. Centrally coordinated

knowledge-sharing on growth initiatives has contributed to customer creation even in the current

economic environment. The focus also remains firmly on innovation and the development of new

applications for LPG, one example of which is micro combined heat and power systems.

LPG is a particularly versatile and mobile fuel, with virtually unlimited possibilities for use in the

residential, leisure, commercial, industrial, agricultural and automotive sectors. It is to be found in

varying degrees in all of these markets in both rural and urban settings. However, the greatest

scope for growth in LPG exists beyond the natural gas grid. With this reality as the guiding principle,

the individual businesses engage in promoting LPG as a solution particularly for rural energy

requirements. LPG has the features to contribute positively to solutions to climate change and to

address air quality concerns. LPG emits lower levels of CO2, NOxand black carbon compared with

other liquid and solid fossil fuels. SHV Energys lobbying efforts are, as a result, directed towards


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obtaining governmental support for policies that reflects the aforementioned cleanliness of LPGrelative to that of many major competing energy sources.

The global production and supply of LPG is increasing. Product availability is very secure. This

increase in supply is partly a by-product of the increased shale gas and shale oil production that has

sprung up in parts of the world.

SHV Energy has one central LPG procurement organisation called SHV Gas Supply & Risk

Management which is based in Paris, with affiliates in Singapore and Vienna. It is responsible for

global product supply contracts with major traders and producers of LPG as well as all the

associated seaborne supply logistics. It performs this function not only on behalf of SHV-owned

LPG distribution businesses but also for a number of third-party LPG companies in different parts of

the world. The service company also advises on and executes risk management and associatedhedging on behalf of SHV's LPG distribution businesses and manages a number of third-party

terminal contracts.

Volume sales for the sector as a whole were adversely affected in 2012 by a combination of

unfavourable factors. The weather was milder than normal in Europe both at the beginning and at

the end of the year. The poor economic conditions in many of SHV's most important markets also

depressed demand. Domestic consumption was reduced, as householders turned to energy

conservation to make necessary savings to household budgets. The situation was aggravated

further by high and volatile LPG supply prices. However, all of the businesses, without exception,

showed themselves to be capable of strictly managing costs. This was achieved through

productivity enhancements as opposed to any compromise or postponement of necessary

investments in safety, maintenance, operational improvements or growth opportunities.

Acquisitions have been focused on consolidation in existing markets. During the year, SHV Energy

signed an agreement to acquire BP's LPG distribution business in China. In Turkey, Ipragaz

acquired the cylinder and commercial bulk business of Shell, while in Poland, Gaspol signed an

agreement to acquire the cylinder business of Orlen Gaz. In Ireland, Calor took a position in

Hamilton Appliance Distributors, thus cementing Calor's commitment to ongoing market

development through appliance sales and marketing. SHV Energy is also eager to pursue

geographical expansion once suitable targets become available. There is a continuous process of

market investigation, but so far none have met acceptable investment criteria. The typical

constraining factors relate to illegal competitive practices, non-enforcement of relevant legislation,

and governmental interference in pricing. The portfolio of LPG activities was refined with the

divestment of the business in Pakistan as well as SHV Energy's business in one of the smaller

regions of China.

The LPG market in Brazil is large and is growing at an average rate of 2% per annum. The

legislative environment has improved significantly over the years, in no small part due to the

leadership and lobbying efforts undertaken by a few players, including especially SHV Energy's

Supergasbras. However, it is also a fiercely competitive market, with intense competition for

market share among the major players in the sector. This in turn lead to pressure on overall


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performance of Supergasbras in the year. The company is revising its organisational structure andaccelerating the transformation of its cylinder business from wholesale to retail.

Calor Gas in Great Britain continues to build on its diverse market spread and considerable

infrastructure. The winter months were very mild and economic conditions remained stagnant,

reducing both consumer and commercial spending. In the face of this, the company continued to

variabilise its cost base to better match fluctuations in demand. Calor has extensive storage,

ensuring security of supply for its customers. This is particularly important at a time when supply

from the inland refineries is becoming increasingly unpredictable. It is most satisfying to report that

Calor GB has produced a very good result in a difficult year for the LPG sector.

Calor Ireland also performed well in a challenging economic environment. Volumes were

negatively impacted by warm weather at the start of the year and during the record-breaking warmDecember. However, the Irish operations posted satisfactory financial results thanks to better-

than-expected new customer creation and further productivity improvements. Illegal cylinder filling

remains a serious concern in Ireland, mainly but not only in the border area between the

Republic and Northern Ireland. Calor is continuing to seek remedies by lobbying for stricter police

enforcement and via the judicial system.

In France, energy conservation remained the most important focus of the energy debate at the

national government and energy industry levels. New directives on thermal regulations and

obligatory energy diagnoses were introduced with the objective of achieving an annual reduction of

3% of the French domestic energy demand. High energy prices had an additional negative impact

on energy consumption, as consumers voluntarily pursued conservation measures to save on

household budgets. Primagazs commercial and operational structures and processes were

completely overhauled in response to market maturity and increasing competitive pressures

resulting from the hypermarket private label cylinder gas brands that have been launched in recent

years. The actions taken have led to an improved performance year on year. Liotard, the

manufacturing subsidiary of Primagaz France specialised in cylinder and tank production and

maintenance, has stopped all unprofitable activities and has shown an improvement in both

operational efficiency and financial performance.

Liquigas, the Italian joint venture, had a difficult year. Sales volumes were severely impacted by the

worsening economic crisis and the high cost of product. Consumers are increasingly focusing on

ways to reduce energy consumption while also seeking cheaper alternatives such as wood. The

fragmented Italian LPG market, with more than 500 players, declined by 9% in 2012. Several

market participants are facing financial problems. Further consolidation in the market is, therefore,

expected. An increase in the illegal filling of tanks and cylinders is a feature of the Italian market, as

some companies struggle to survive. In this challenging environment, Liquigas has been focusing

on offering new services to existing customers, improving its operational efficiency, reducing costs

and improving its credit controls. Progress was made with the closure and divestment of

underutilised plants and through the implementation of new route optimisation software.

Management has identified opportunities for efficiency improvement and business development

that will be implemented in 2013. Liquigas Italy also manages the operations in the Balkans and


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Malta. The Slovenian business continues to focus on direct delivery in the cylinder business. TheCroatian market is consolidating, with SHV Energy's Butan Plin participating in the process.

Ipragaz in Turkey continued to perform well. Despite structural market changes in recent years,

including a decline in cylinder and bulk LPG, the Turkish SHV Energy business has delivered

sustainable results through innovation, diversification and rationalisation. In 2012, Ipragaz

acquired the Shell Gas cylinder and commercial bulk business, and the Bizimgaz business was

merged with Ipragaz. Successful steps were undertaken in asset sharing. Ipragaz increased its

market share in all segments. Ipragaz's market share in cylinders reached 25% based not only on

acquisitions but also on solid organic growth in the dealer network. Autogas is a unique segment of

the LPG market that continues to grow in Turkey. With the Ipragaz, Bizimgaz and Exengaz brands

in autogas, SHV Energy Turkey grew its market share in this segment in 2012 and supplied more

than 1,000 autogas stations in the year. Margins in all segments were satisfactory. Ipragaz is alsoselling electricity to its existing industrial and commercial customers. Cylinder manufacturing

company Evas is an innovative and entrepreneurial operation and sold more than one million

cylinders to almost 30 different countries around the world in 2012. Evas continues to perform very

well.

Primagas Germany, SHV Energy's joint venture company in Germany, grew its customer base and

increased its market share. Micro combined heat and power systems and other energy-efficient

applications and innovations are the main drivers for this development. Despite very mild weather

conditions, Primagas Germany closed the year with results in line with expectations.

Gaspol in Poland continued to perform well in 2012. This is a good achievement considering that it

is active in a very price-sensitive market with abundant supply from the east available at spot

prices, which were at times below the company's mid to long term contracts. In June 2012, Gaspol

signed an agreement with Orlen Gaz to buy its 16,000 ton cylinder business, strengthening

Gaspol's position in this segment.

The Benelux and Scandinavian businesses were heavily impacted by volume shortfalls which

could not be fully offset by margin management. Excellent cost management in the Benelux

businesses enabled the delivery of a much-improved year-on-year result. Scandinavia is reviewing

the strategy for its business. The Hungarian business developed positively in the year in difficult

market conditions. The Spanish business also performed well. Volumes in the Czech Republic and

Slovakia were satisfactory year on year, but margin pressure was quite severe.

The market in China is changing rapidly due to the government's policy of creating a more

sustainable, lower-carbon economy. This creates challenges owing to the expansion of natural gas

networks but also opportunities for cleaner fuels like LPG. SHV Energy China sees a gradual

improvement in law enforcement in the industry but continues to lobby for the elimination of the

many illegal practices still prevalent in the market. SHV Energy China had a good year and the

results continued to improve thanks to higher margins and a focus on the direct cylinder business.

The 51% stake in the small regional business in Shenzhen was divested to existing partners. In

Shanghai, SHV Energy China bought out the partner in the business. An agreement to acquire


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BP's circa 90,000 ton cylinder LPG business in Shanghai, Jiangmen, Foshan and Zhongshan wassigned in December.

Wholesale results in the Philippines were under pressure, negatively impacting Liquigazs overall

result. SHV Energy India delivered another very good result from both its terminal and distribution

activities. The Indian management team continues to focus on innovative market development. Its

scope for rapid development remains limited, owing to the subsidy arrangement for domestic

cylinder gas only being available to the state-owned indigenous oil companies, while non-state-

owned and foreign companies are still denied any subsidy. During 2012, some limits were placed

on the amount of this particular subsidy to be paid to each participating household. This holds out

the hope that subsidies will eventually cease, creating a level playing field for all LPG distributors in

the country.

Alongside LPG, SHV Energy has also been exploring possibilities in renewable energies. The

renewable energy sector continues to be driven to a large extent by subsidy programmes that have

been seriously reduced or even withdrawn as governments struggle with budget deficits. SHV's

participations in Balcas (Ireland and Great Britain) and ECB (Germany) both had another difficult

year. Balcas, in which SHV has a 45% participation, operates a sawmill, wood pellet production

and Combined Heat & Power (CHP) plant in Northern Ireland as well as a joint CHP and pellet

production plant in Scotland. Technical problems in the Scottish plant led to unexpected downtime

and lower electricity production levels. Electricity prices and renewable energy subsidies have also

been lower than budget owing to the economic downturn. Margins in the pellets business were

below expectations. A considerable proportion of production is sold through wholesale channels. In

order to improve margins, a higher share of the pellets value chain must be captured. The

development of a retail pellets business remains a clear requirement for profitability to improve.

ECB in Germany is addressing the same issues. ECB, in which SHV has a 70% participation, is a

network of energy hubs producing pellets and green electricity. The energy-contracting component

of the business was divested during the year. Start-up costs of the energy hubs are high. There is

also oversupply in the market, which calls for market consolidation. The focus, as in Balcas, is on

developing and implementing commercial strategies while controlling costs to the greatest extent

possible.

In the year, SHV Energy initiated a sustainability approach called "Better Cleaner Together. In

addition to setting the baseline and measuring the sustainability performance of its businesses, this

programme also aims to change the behaviour of SHV Energys own people with regard to

sustainability in their private and professional lives.

Dyas

For almost 50 years, Dyas has been actively engaged in exploration, development and production

joint ventures in the oil and gas sector. Dyas acts as a non-operator and has built a solid reputation

as a reliable partner. The company is a joint venture partner in more than 25 producing oil and gas

fields. Nearly all of Dyas's interests, also in exploration licenses, are in offshore projects in the

Netherlands and the United Kingdom.


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Brent oil prices remained largely within a range of USD 95 and USD 125 per barrel in 2012,averaging USD 112 per barrel compared with an average 2011 Brent oil price of USD 111 per

barrel. Average Dutch gas prices, which are based on a complex formula of energy product prices

and currency rates, increased by 9% year on year, while average United Kingdom gas prices

increased by 7%.

The Dyas strategy is to maintain and, where possible, grow its reserves base through both

acquisitions and an active exploration drilling programme. Acquisitions are usually the result of

negotiated deals and auctions, with a preferance for projects that are in the pre-development

stage.

Volume production of oil and gas in the year, at 7.6 million barrels of oil equivalent, was lower than

expected owing to the below-target performance of a number of key oil and gas fields. This wasattributable for the most part to production interruptions, unscheduled maintenance, some

divestments, and the later than originally planned start-up of one new project. Additional reserves

attributable to new field developments were of a similar amount as production volumes in the year,

leaving reserves more or less unchanged.

Dyas invested heavily in the year in the development of the Golden Eagle field. Investment was

also substantial in the Stella field, for which a Final Investment Decision was taken in May 2012.

The Stella development adds close to 7.8 million barrels of oil equivalent to Dyas's developed

reserves. Exploration results have, overall, been disappointing. Two out of five wells were

successful and added 2.3 million barrels of oil equivalent to the Dyas undeveloped reserves

base.

In the Netherlands, Dyas sold its onshore assets operated by Northern Petroleum to the Parkmead

Group. Dyas's equity in the Vinkega field was sold to Vermilion Energy, and the companies'

onshore facilities belonging to offshore Block Q8 were acquired by Wintershall. In the UK, a 10%

interest in the Cladhan Field was sold to Taqa. In addition, Dyas sold its 14% stake in the producing

Enoch Field to First Oil Expro. Lastly, Dyas sold part of its interest (15%) in the Athena field to Trap

Oil. In 2012, Dyas acquired a small exploration interest.

Despite lower production volumes, Dyas earned a record net income due to a number of factors,

including better-than-expected oil and gas prices as well as one-off proceeds from divestments and

income on the K4/K5 redetermination cash settlement with Total. Dyas's developed reserves

remain at a healthy level.

In 2012, Dyas continued to strengthen its organisation in the financial and operational areas.

Makro

Makro is a cash-and-carry wholesaler that sells high volumes of food and non-food products. The

target customer is the food professional. These include small and medium-sized food retailers, the

hospitality industry and the institutional market. End consumers may also purchase goods at


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Makro, but they are not the focus of the company. Makro realised a sales increase of 17% in 2012,and achieved the highest sales level in its history. This was a result of organic growth, new stores,

growth in market share and inflationary and currency effects.

The political and economic situation in much of South America continues to be volatile due to

various degrees of government controls, inflation and currency fluctuations. The pace of economic

growth in South America has slowed down in 2012, affected by global economic uncertainties. The

credit ratings of Argentina and Venezuela were downgraded, while those of Brazil, Peru and

Colombia were upgraded.

In 2012, Makro South America defined a strategic framework to strengthen its focus on food

professional customers and improve its operational excellence through optimising processes and

employing capable and motivated people. The main objective is to improve sales in its existingstores and increase density with new stores. To further improve performance, Makro South

America focuses on marketing and positioning, assortment and pricing, store format, productivity

and on the supply chain and procurement.

In cooperation with its individual business units, Makro South America reviewed the performance

and local market circumstances of each store, resulting in action plans for selective performance

improvement. Makro's team of customer development managers play a key role in this process.

Stock management and supplier financing is receiving additional attention in line with cash

generation targets.

Makro South America is further investing in people. Training is delivered to all store general

managers in the region, offering them new tools and techniques with regard to managing people,

achieving customer satisfaction and improving store operations. Commercial training programmes

were re-designed and rolled out to the commercial teams in each of the countries. E-learning tools

were launched to facilitate the roll-out of these training modules. New organisational structures

were implemented, and management teams were strengthened with both internal promotions and

external recruitments.

The main development in the own-brand category was the renewal of the important ARO brand

throughout the region. ARO-branded products are substitutions for A-brands, with equivalent

quality at lower prices. Having standard regional own-brands facilitates increased joint buying

initiatives. Several e-business pilot projects were launched, including "Click & Collect in Colombia

and mobile messaging promotions in Peru.

With respect to sustainability, Makro has been actively measuring its footprint and defining plans to

achieve short and long-term targets. Makro South America's own people are actively contributing

with ideas and actions to achieve its sustainability targets. In this context, Makro South America

started the "Sunny Stores" initiative, a study to use solar energy for electricity in its stores.

In Argentina, the overall economic situation continued to worsen due to several factors, including

increased foreign exchange controls, restrictions on imports and the threat of expropriation. These


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measures resulted in shortages of goods, higher inflation and a slowdown in economic activity. Theresults of Makro Argentina for 2012 were positive but below the previous year, having been

adversely affected by the interference of governmental measures as mentioned above. Costs,

especially those relating to personnel, are increasing at a higher pace than inflation and sales. In

the difficult and disappointing Argentinian environment, management is doing everything possible

to improve performance. There were 20 Makro stores in Argentina at year-end. The 2012 results at

Basualdo, a wholesaler of cleaning and perfumery products, were better than expected,

attributable to good margin management and rigorous cost control. At Tarquino, a wholesale cash

and carry business in Cordoba, sales in 2012 were below expectations, affecting the trading profit.

At the end of the year the Tarquino operations were renamed Mamut, as the right to the use of the

Tarquino brand name expired.

Economic growth in Brazil slowed down in 2012. The government took measures to stimulategrowth, such as providing tax incentives for the purchase of cars and white goods and a reduction

in taxes on electricity for all consumers. The interest rate has been gradually reduced from 11% at

the end of 2011 to 7% at year-end 2012. The continued growth of the proportion of the middle class

in the population, and increased investments in infrastructure for hosting the World Cup in 2014

and the Olympics in 2016, are expected to drive economic growth in the country in the coming

years. The 2012 results of Makro Brazil improved significantly as a consequence of initiatives to

improve price competitiveness and product assortment and reduce overdependence on a limited

number of suppliers and products. The strategy is to continue focusing on assortment, pricing,

supply chain and stock management processes so as to accelerate the existing healthy

improvement in the performance of the business. Makro Brazil, with 76 stores at year-end, has

secured sites for new store construction in 2013. A major store renewal programme is in the course

of implementation at existing stores.

The Colombian economy grew at a slower pace than originally expected in 2012, due both to the

deterioration of the global economy and to the effects of the monetary tightening in the country

implemented at the beginning of 2012. Increased public spending in the second half of the year did,

however, positively stimulate demand somewhat. The operational results at Makro Colombia for

2012 lagged expectations. A strategy was adopted to reduce or discontinue loss-making high-

volume sales in the non-food area. The company is re-focusing on the wholesale cash-and-carry

concept. This includes a redefinition of the non-food assortment and an improvement in price

positioning. Makro presently has 16 stores throughout Colombia. Idle assets were divested in order

to secure additional funds for further expansion.

The Peruvian economy continued to grow at an annual rate of over 5%. Makro first entered Peru in

a greenfield development in 2009 and ended 2012 with nine stores, of which five are in Lima and

four in the key provincial cities. The results at Makro Peru in 2012 developed ahead of expectations

with a positive net profit in the year. The non-food area was restructured with a focus on

professional customers, and this produced positive results. The main expansion focus continues to

be in Lima. Preparing the organisation to support further growth is a priority.


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The business environment in Venezuela deteriorated further during 2012. Again, many new lawswere implemented which restrict business. One such law on costs and fair prices establishes

control over prices and margins at all stages in the value chain for a large array of product

categories. It has significantly affected the availability of products, as manufacturers stop

producing at pre-set prices which deny them a return on their investment. This is affecting stock

levels and margins and hence reducing sales levels at Makro, too. Also, a new labour law affected

Makros operations in many areas in addition to increasing personnel costs. Newly imposed

increased pension obligations with retrospective effect had a negative impact on the results of 2012

and will impact personnel costs in the coming years. Despite this very difficult environment, Makro

Venezuela achieved good results, which is a tribute to excellent management. At year-end, Makro

had 37 stores in Venezuela, which included an additional two new stores in the year. The

performance of the small Mikro retail stores has been affected by a combination of external and

internal factors. Government interference in the business also severely affected the results ofMikro. Several commercial and operational actions have been planned to improve performance

store by store, with the immediate objective being to achieve breakeven at the operational

contribution level. At year-end, there were 19 Mikro stores in Venezuela.

The economy in Thailand recovered from the severe 2011 flooding disaster, supported by lower

interest rates and fiscal stimulus to increase consumers' purchasing power and thus household

consumption. On the regulatory side, the major development has been the reduction in corporate

income tax from 30% to 23% in 2012, with a further reduction to 20% in 2013. This is to compensate

for the significant increase in minimum wages which was introduced in 2012 and which will have its

full impact in 2013. Moreover, the government also issued new legislation to control the size of

commercial buildings and increase food safety standards for fresh and frozen products.

In 2012, Makro Thailand achieved another remarkable result, breaking all previous records in sales

value and overall performance. Projects and initiatives launched during the year contributed

positively to this performance and supported the company's goal to be the "first-choice supplier to

food professional customers". For instance, the company hired specialists in major ethnic cuisines

to develop a wider and deeper assortment to serve more diverse food service customers. Also,

own-brand gained both in sales value and sales participation. Makro Thailand's commercial

organisation has been adapted to ensure the highest possible service level to the different

segments in the food industry sector. A new frozen food distribution centre was established in the

northeast of the country to supply stores located in that region. This is to cope with significant

volume growth and is also part of Makro Thailand's business continuity management initiative.

With the launch of the campaign "Reduce, Reuse, Recycle", an increasing focus is placed on

sustainability. This includes initiatives in the area of energy consumption management for

refrigeration and lighting.New stores are constructed with new standards that include

computerised energy management systems.

Makro Thailand consists of a number of formats aimed at different categories of customers. The

company opened five new Makro stores in 2012, bringing the total number of stores to 57 at the end

of the year. This included a new food service store opened in Hua Hin, dedicated to food service

customers in that popular higher-end tourist region. Also, Makro now has five Siam Frozen stores,


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At the same time, Mammoet experienced a growth in demand for its services in several very largeprojects in LNG, oil sands and mining-related activities. Mammoet managed to realise significant

sales growth. Mammoet also managed to grow its order book in 2012 and was able to secure a

number of large-scale projects in many different parts of the world. The salvage operation also

improved substantially, both year-on-year and against expectations. However, as a general

statement it can be said that there is overcapacity of the less specialised equipment in the market,

which has had a dampening effect on pricing and hence margins. Fortunately, owing to the

company's range and the quality of its fleet as well as its technical skills and the competency of its

people, Mammoet's equipment utilisation rates have been satisfactory across all segments in the

year.

During 2012 the organisation grew further due to the hiring of personnel to meet the staffing

requirements for projects in Canada and Australia. In addition, a number of initiatives to furtherstrengthen the commercial and operational departments were executed. The restructuring of

Mammoet Wind in North America led to the relocation of staff and some reduction in staff numbers.

The availability and growth of a pool of skilled and experienced people are essential for the further

development of the company. The strengthening of management in the field of human capital at

both the holding and regional levels signifies the increased emphasis on the recruitment,

development and retention of qualified Mammoet staff.

Many of Mammoet's customers see the companys safety culture and its safety performance as a

key differentiator in choosing to work with it. For Mammoet, it is essential to ensure a safe working

environment for all persons employed with and for the company. This extends also to increased

attention to sustainability both within the company and with customers. Overall, the safety

performance over 2012 was in line with expectations. A programme developed to further promote a

positive safety culture was initiated in 2012 and is expected to support further improvement over

the coming years.

ERIKS

ERIKS is a leading innovative industrial products and services provider with a focus on high-end

technology for industrial applications. Its activities are concentrated around flow technology

(valves, instrumentation, industrial hoses and gaskets), sealing technology, machined industrial

plastics, power transmission (hydraulics, pneumatics, bearings and electro-mechanical power

transmission), and tools and maintenance products. ERIKS' product and application know-how

and its long industrial experience are incorporated in the design of its own products and private

branded products.

Through its passion for technology, ERIKS offers its clients different value propositions:

technological advice-driven proposition, total cost of ownership proposition, and value-added

project business proposition. This is driven by ERIKS' philosophy that "know-how makes the

difference". ERIKS has been at the forefront of developing and implementing a sustainability

strategy that is at the heart of concretely delivering on these different value propositions. The

sustainability strategy is, in turn, driven by innovation in equipment design that sets clear goals for


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reductions in energy, waste, pollution and risk associated with the application in practice of thegoods and services manufactured and distributed by ERIKS. Through this approach to its

business, ERIKS creates sustainable growth and value for both shareholders and society while

reducing the environmental footprint of both its value chains and of its customers.

ERIKS provides solutions to two industrial segments: Original Equipment Manufacturers (OEM)

and Maintenance Repair and Overhaul (MRO). The focus in the OEM market is on co-engineering

and the sharing of product and application know-how with customers. In the MRO market, ERIKS

products and expertise are used directly in the servicing of machines and industrial plants.

Econosto, which includes most of the project oriented business of ERIKS, is active in providing

technical solutions for projects in selective markets such as the oil and gas, chemicals,

petrochemicals, power generation, and shipbuilding and repair sectors.

Among the ERIKS range of activities, the sealing and rubber technology product group, in which

the company originally started out, is active in a very innovative and technology-driven business.

The knowledge built up over decades as a distributor of standard sealing products (O-rings, oil

seals, vibration dampers and standard rubber moulded products like bellows and profiles) has

gradually turned ERIKS into a sealing and rubber technology specialist. Sealing and rubber

technology sales continued to grow in 2012, especially in the USA.

ERIKS is investing in rapid prototyping facilities in the Netherlands, including 3D printing and small-

scale production equipment to enable the company to rapidly produce testing models, prototypes

and small initial series of bespoke seals and rubber moulded products. Laboratory company

Elastomer Research Testing was acquired in the Netherlands during the second half of the year to

further strengthen ERIKS' position in this segment.

The flow technology product group, comprising valves, instrumentation, gaskets and hoses,

represents the biggest share of ERIKS' total sales. This activity is also ERIKS' most international

and diversified business. Over the last decade, ERIKS has transformed itself from a local

distributor for valves, instrumentation and piping in only a few countries into a globally respected

industrial service provider with sizeable activities in Europe, North America, the Middle East and

South East Asia. To further strengthen its position in this product group, ERIKS acquired the

commercial activities of Valves Enterprise in Spain, a manufacturer of specialised valves, serving

leading industrial companies in the fields of tank storage, refining, bulk loading, and naval and

aviation refuelling and metering systems.

Acquisitions that strengthened ERIKS' position in North America during 2012 included Carolina

Controls Depot and IEC Control Shop, strengthening the heating, ventilation and air conditioning

offering of Industrial Controls. In Canada, valve distributor Quantum Supply was added to the

group. The assets of Industrial Rubber & Supply of Savannah, USA were acquired to further

complete the distribution network of LewisGoetz. Finally, Regal Brown, offering measurement

control and instrumentation products to a broad array of markets and customers, was added to the

Rawson organisation.


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The 2012 results were satisfactory. In a market experiencing an economic downturn, ERIKSachieved sales growth in excess of 30%. Although this growth was mainly driven by acquisitions

made in 2011, organic growth also contributed. The company was also successful in maintaining

margins at healthy levels. ERIKS now generates over one-third of its sales from its North American

operations. There is still very substantial development potential for all of ERIKS activities within all

geographical regions in which the company is present.

NPM Capital

NPM Capital positions itself as the private equity partner of choice for successful entrepreneurs

and is focused mainly on medium-sized companies in the Benelux. NPM determines preferred

sectors from time to time in which to seek investment opportunities. This is in addition to

concentrating on consolidation investment opportunities in existing participations. NPM'sinvestment philosophy is to help businesses to grow towards long-term sustainable performance.

While NPM Capital prefers majority buy-outs with management participation, it is also open to

minority positions once there is clear alignment with partners on the strategy, corporate

governance, investment for growth, and the eventual exit mechanism. Because it is not a fund,

NPM can operate more like a strategic investor or partner and be more flexible with the timing of

divestment, allowing it to choose for the optimum circumstances being in place. This implies that

the company is never under pressure to secure an exit, unlike conventional private equity funds.

The market for private equity in the Benelux in 2012 was marked by relatively low deal activity. The

depressed economic conditions, which have adversely affected margins in many businesses, have

had a knock-on effect on company valuations. Simply put, this is not a great time to sell in the minds

of most entrepreneurs, who prefer to wait for better times. It is also the case that financing is difficult

and this, in general, negatively impacts business valuations as well. The banking sector is subject

to new and stricter reserve ratios, which limit liquidity and hence debt financing. Breaches in bank

covenants are no longer easily waived in any circumstances, calling for balance sheet repair

through cash injections from shareholders.

It is against this background that NPM Capital is seeking to perform and grow. As can be gathered,

the challenge to source attractive investment opportunities has intensified. Growth capital towards

existing participations has become more prevalent.

While remaining opportunistic, NPM continues to aim at deepening its knowledge and network in a

number of specific sectors, including the food, energy services, technology and health care

sectors. NPM also strengthened its engagement with the management of the companies in its

portfolio. This is intended to be constructive at a time when the risk of underperformance or

worse has heightened considerably. NPM also continues mentoring its participations in a

number of strategic development themes, specifically sustainability, e-commerce and operational

excellence.

NPM Capital invested a total of 148 million in 2012, the vast majority of which has been growth

capital in existing participations. These included Continental Bakeries, Medux (the holding


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company for the earlier acquired Harting Bank and Emcart companies in the mobility aids segmentof the health care sector) and Kiwa. Medux added a further two bolt-on acquisitions, namely Ciran

and Vitalis. Ciran is a network of clinics throughout the Netherlands offering a full range of physical

and mental rehabilitation treatment programmes for patients with physical injuries and other

traumas. Vitalis offers a wide package of home and institutional care products and services for

people suffering from physical disabilities. Kiwa, the testing, inspection and certification company

originally acquired in 2011, added several bolt-on acquisitions to its portfolio in 2012 and continues

to expand internationally. Kiwa's buy-and-build strategy included investments in the Netherlands,

the United Kingdom, Turkey and Denmark.

NPM Capital acquired a 60% equity stake in VSI in the fourth quarter of 2012. VSI is an R&D-

intensive producer of functional bars for the dieting, sports and health and wellness markets in

Europe. In the health care sector, NPM acquired a 71% stake in Dermicis, a chain of dermatologyclinics, and a 97% stake in Medinova, a chain of independent treatment centres active in

orthopaedic surgery and eye care. An interest was acquired in the e-commerce and physical

bicycle business Hans Struijk Fietsen which offers buy-and-build opportunities.

Hertel, the industrial services company whose core business is providing scaffolding, painting and

insulation services to industry in several regions of the world, was supported with capital injections

to facilitate a restructuring of the business. The additional capital was also used to acquire

additional shares from a smaller shareholder.

There were three successful exits in the year. These included NPM's 44% stake in bol.com

(acquired by the Ahold group), NPM's 53% stake in Independer.nl (acquired by Achmea) and

NPM's 60% stake in Plasticum (acquired by Lindsay Goldberg). All exits exceeded NPM's

minimum return target of 15%.

Financial developments

Sales

Sales grew by 2.6 billion, or 15%, from 17.4 billion in 2011 to a record level of 20.0 billion in

2012. This sizeable growth was fuelled by two main business drivers: growth initiatives, mainly

consisting of acquisitions and the opening of new Makro stores, and organic growth. The net effect

of exchange rate developments in foreign currencies was limited.

Acquisition spending was moderate in 2012, as a result of which the sales increase from growth

initiatives ( 0.7 billion) was mainly a spillover effect of the significant acquisitions made by ERIKS

in 2011 (Industrial Controls and LewisGoetz) and the opening of ten new Makro stores in 2011, as

well as the opening of nine new Makro stores in 2012. Organically, excluding the impact of currency

movements, sales increased by 1.9 billion (11%) compared with last year. Each operational

activity contributed to this organic growth. The net positive effect of movements in foreign

currencies on SHVs net sales was 0.1 billion, driven in particular by the appreciation of the Thai

baht and the British pound and offset by the devaluation of the Brazilian real.


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Income from operationsLike-for-like sales of SHV Energy, excluding growth initiatives and exchange rate effects, were 8%

above the level of 2011. Despite a relatively mild winter, fierce competition in a number of important

markets, increased energy efficiency (especially in Europe), and divestments of the business in

Pakistan and a regional business in China, volumes were only slightly below the level of 2011. The

year started out with extremely high product prices. There followed a brief but significant respite in

these prices in the second quarter before they surged again to new record highs for most of the

latter half of the year. Fortunately, several of SHV Energy's European businesses, especially those

with good storage infrastructure, organised longer-term supply arrangements during the period

when prices had softened. This proved invaluable in maintaining margins at acceptable levels,

which offset the structural weather and economy-related volume shortfall. As a result, the total

gross margin in 2012 was slightly above the level of 2011. With constant pressure on volumes,

especially in Europe, SHV Energy continued its focus on operational excellence and cost control.Despite the inflationary effects on cost in Brazil and Turkey, total operating costs only showed a

slight increase of 0.5% compared with 2011. Overall, SHV Energy reported income from

operations in 2012 in line with the previous year.

Makro realised a sales increase of 17%. This was the result of sales generated by the ten stores

opened in 2011 and nine stores opened in 2012 (4%) as well as organic growth (13%) coming from

healthy economic circumstances in Thailand, Colombia and Peru, growth in market share driven by

initiatives to improve price competitiveness and assortment, and high inflation in Venezuela and

Argentina. Overall, Makro continued to improve its gross margin as a percentage of sales, but its

performance varied widely from country to country. Despite the impact from the severe 2011 floods

on the first half of 2012, Makro Thailand achieved a remarkable result, breaking all previous

records in sales value and overall performance. The results of Makro Brazil in 2012 have shown ahealthy improvement as a result of fundamental changes to the companys organisational structure

and commercial strategy, offset somewhat by the inflationary pressure on costs. Despite regulated

prices, the import restrictions on certain products and a general scarcity of product, the

performance of Makro Venezuela remained satisfactory. The results for Makro Argentina were

below last year, driven by worsening economic circumstances and increasing government

controls, with related scarcity of products and high inflation. For Makro Colombia, performance was

in line with 2011. Makro Peru realised a healthy growth in sales and performance and reported for

the first time since the start of the Makro business in Peru in 2009 a positive net result, which

exceeded expectations given the continuing expansion programme.

Total overall sales at Dyas increased by 17% compared with 2011, mainly driven by the

strengthening of the US dollar against the Euro and the income on the K4/K5 redetermination cash

settlement with Total. The 2012 production level of 7.6 million barrels of oil equivalent compares to

7.7 million in 2011. This slight decline in production was mainly the result of production

interruptions, unscheduled maintenance and some divestments, while the Athena field only came

on stream in the course of the year. While the average oil price per barrel remained stable at the

level of 2011 (USD 112 in 2012 versus USD 111 in 2011), the increase in the average Dutch gas

price ( 0.26 euro per m3in 2012 versus 0.23 per m3in 2011) had a positive impact on the overall

result. Despite the lower volumes, total production costs increased as result of some accelerated


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depreciation charges and higher exploration activities. Overall, Dyass net result was at a verysatisfactory level.

Mammoets results reflect an increase in overall activity levels, albeit with big regional differences.

Canada, in particular Canada West, and the Asia-Pacific region experienced a considerable

increase in activity mainly attributable to a number of large long-standing time- and materials-

based projects. In Europe, however, there was a significant negative trend in terms of the level of

activity and results. This is due to very poor market conditions in the Benelux, Germany and the UK.

Overall, equipment utilisation rates remained at a satisfactory level, but the overcapacity in a

number of markets, especially within Europe, is exerting pressure on margins. Income from

operations and net income experienced a healthy improvement compared with 2011. Net income

to SHV was also supported by SHVs acquisition of the remaining 25% minority interest in

Mammoet in the middle of 2011.

ERIKS results for 2012 were above 2011, with overall sales up by 32% including acquisitions and a

4% organic growth. Most of the countries in which ERIKS is active enjoyed favourable market

conditions until the middle of 2012, with healthy organic growth developments. In the second half of

the year, the economic climate in Europe deteriorated. In this market environment, ERIKS is

experiencing increasing pressure on margins, with a downward trend towards the end of the year.

ERIKS results were positively affected by the acquisition of Industrial Controls and LewisGoetz in

2011. As these sizeable 2011 acquisitions were finalised only in the last quarter of the year, they

had a significant spillover impact on the 2012 results.

Exceptional items

For 2012, exceptional items included an impairment loss on an investment in renewable energy,restructuring costs and the costs associated with recovery plans for UK pension funds offset by

gains on the sale of oil and gas fields, idle land and subsidiaries.

Financial results

Despite the satisfactory capital gains realised by NPM Capital on the exits of bol.com, Plasticum

and Independer, income from private equity investments in 2012 decreased compared with the

year before, as 2011 included an exceptionally high capital gain on the exit of the Van Oord

company. Private equity income further consisted of interest on loans to participations and dividend

income, which was partly reduced by some mark-to-market adjustments on publicly traded

investments.

In the beginning of 2012, SHV raised 0.5 billion from US and Dutch private placements with a

duration between five to fifteen years. These funds were used to repay the short-term stand-by

facilities that were drawn to finance the US acquisitions of ERIKS at the end of 2011. Since long-

term facilities are more expensive than short-term facilities, net interest expenses increased

slightly from 61 million in 2011 to 70 million in 2012.


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TaxesThe average tax burden decreased from 28.2% in 2011 to 28.0% in 2012. The development of the

effective tax rate is the result of a number of specific matters which, on balance, had little effect. The

2011 results included a high tax-exempt capital gain in NPM Capital. At the same time, 2011 tax

charge was impacted by an increase in the deferred tax liability of Dyas by 33 million. This was

due to an increase in the United Kingdom supplementary tax rate of 12%. Changes in nominal tax

rate, on balance, had a positive effect. This was mainly a result of the reduction in the corporate

income tax rate in Thailand from 30% to 23%. The recognition of deferred tax assets also had a

reducing impact on the effective tax rate.

Net income

Net income in 2012 was 714 million, which translates into a return on shareholders equity of 19%

(2011: 22%). Eliminating the effect of goodwill charged against shareholders equity, the return oneconomic equity in 2012 was 10% (2011: 11%).

Foreign currency exchange

Many of SHVs businesses operate in non-euro countries. Converting the results of these

businesses from their respective currencies to euro leads to negative or positive currency effects.

The net positive effect of all currency fluctuations on SHVs 2012 net income amounted to

5 million.

Investments and divestments

In 2012, total spending on investments amounted to 911 million, of which 18 million was spent

on acquisitions, 723 million on investments in operational fixed assets and 170 million on

investments in financial fixed assets (including 148 million on private equity participations byNPM Capital). SHV Energy invested 256 million in operational fixed assets such as filling plants,

logistics, autogas stations and IT as well as in cylinders and tanks both for replacements for end-

of-life equipment and for the development of new businesses. Makro invested 146 million on

operational fixed assets and in new stores. Dyas and Mammoet invested a total of 326 million in

operational fixed assets. Dyas invested in exploration and oil and gas field development, while

Mammoet invested largely in conventional cranes as well as crawler and hydraulic cranes.

Investment in operational fixed assets by ERIKS was at a moderate level. Investments in financial

assets included spending on growth of the private equity portfolio of NPM Capital, including a

participation in Medinova, Dermicis, Hans Struijk Fietsen and VSI, and further investments in

existing participations to support their continuing growth.

In 2012, total divestments amounted to 374 million. These came mainly from the divestments ofthe participations in bol.com, Plasticum and Independer by NPM Capital and of interests in oil and

gas fields by Dyas as well as the sale of some smaller regional businesses by SHV Energy, the sale

of idle land by Makro and the sale of operational equipment in the normal course of business at

SHV Energy, Makro and Mammoet.


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Working capitalThe increased focus on the management of working capital has resulted in improved working

capital positions at almost all businesses, with further improvement potential, especially at

Mammoet. The working capital situation at SHV Energy, Makro and Dyas generated a healthy cash

flow. The project-related increase of working capital at Mammoet offset the positive working capital

effect on operational cash flow from the other businesses.

Financing and liquidity

At December 31, 2012, total liquidity amounted to 980 million (2011: 838 million) and the net

debt position was 785 million (2011: 1,077 million). This improvement in net debt is a result of

careful investment spending, whereby the total expenditures excluding growth investments was

equal to 70% of depreciation. Short-term payables to banks further declined as a result of the

issuance of the US and Dutch private placements, which were used to repay short-term debt. SHVhas two credit facilities in place as at December 31, 2012: a facility of 600 million, which is

available to SHV until 2015, and a second stand-by facility of 600 million, which is extended to

2017, with a further option for extension of one year. As of the end of 2012, no drawdowns had been

made on these facilities. In addition to the available cash, the undrawn amount of the stand-by

facilities gives SHV the necessary flexibility to finance further investments.

Solvency

At December 31, 2012, SHVs group equity amounted to 4,066 million, an increase of

282 million. A large part of shareholders equity is invested in countries with currencies other than

the euro. In 2012, the total negative effect of converting these currencies into euro amounted

to 113 million. This amount has been debited to shareholders equity. The solvency ratio at the

end of 2012, defined as group equity as a percentage of total assets, was 40% (2011: 37%).

Business risk

Risks and uncertainties define all business environments. Risk-taking is an essential part of

business and a precondition for achieving adequate returns.

The risk environment in which SHV companies create value and generate income is determined by

both manageable risks and a number of external risks that are beyond the control of SHV. The

manageable risks are of different natures and include commercial, operational, financial, tax,

compliance and regulatory risks, the reliance on information technology and the ability to recruit

and retain employees.

Risks change constantly as the internal and external dynamics of the operating environments of

SHV companies change, especially in the current uncertain and volatile global economic

environment. This can have an impact of an unpredictable nature on SHV's business. Also taking

into account the competitive environment, it is essential for SHV management to continue to devote

attention, and take a proactive approach, to market developments and their consequences for the

businesses in which SHV operates. Furthermore, an area requiring constant attention from all the


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businesses remains the challenge of recruiting, developing and retaining qualified and talentedpeople to ensure sustainable successful performance.

The main business risks for the various SHV activities that require management attention include

the following:

Management of health and safety risks is of paramount importance in the LPG business. The

results of SHV Energy are further influenced by the weather. A mild or cold winter will determine

heating-related demand. The purchase price of LPG fluctuates and is dependent on supply and

demand situations in the applicable LPG supply markets, the price of oil and movements in

exchange rates, particularly in the US dollar. Government policies also affect results, for

example on pricing or in connection with illegal filling of cylinders.

The results of Dyas are influenced by the price of crude oil, the price of natural gas and by the

exchange rates of the US dollar and the British pound. As a non-operator, Dyas relies on thevarious operators with whom it co-operates for the safety aspects of its oil & gas production.

The results of Makro depend largely on customer generation, retention and spending, which is

also influenced by the development and stability of the economies in which Makro operates.

Hygiene and product safety are also vital to the success of Makro.

At Mammoet, managing health and safety risks is of crucial importance. Mammoet's heavy

lifting and transport activity relies for its profitability on the overall investment climate and, more

specifically, on the dynamics in sectors such as civil engineering, power and the oil & chemical

industry. Cyclical risks are mitigated by operating in both the project and rental market and also

through Mammoet's presence in various market segments and regions. With a global tendency

of growing order size, the profitability of especially larger projects is increasingly dependent on

project management capabilities.

ERIKS business depends on the level of industrial production, especially among ERIKS' OEM

customers. The MRO-related market is less cyclical, although it is still exposed to the general

economic climate. The distribution of ERIKS' activities between OEM and MRO, in combination

with a healthy geographical spread, mitigates these business risks.

NPM Capital's results are mainly determined by the sale of companies in which it has invested

and by potential impairments of carried investments. Sales opportunities and price, as well as

impairments, depend largely on the economic and financial climate in any given period.

Therefore, NPM's results can fluctuate considerably over the years. In the longer term, NPM's

success depends on its capacity to identify profitable investment opportunities, initiate

improvement in performance by pursuing operational excellence and innovation, and ensure

that good corporate governance is in place to monitor the investments adequately until the

moment of divestment.

SHV's profitability is further influenced by several other external risk factors. Political risks exist, for

instance, where the company owns assets in politically unstable countries, which are further

compounded by potential problems related to terrorism, social unrest and the scarcity of vital

resources. Governmental interference in business, the continuing inequitable enforcement of

regulations, and the more recent phenomenon of sudden increases in taxation and levies in several

jurisdictions, which is currently especially noticeable in Europe, further add to risk and related

costs. Populist government measures bear down on business also. External risk factors also


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include economic factors such as inflation, interest rates, the euro, the sovereign debt crisis,exchange rate policies and stock market returns (in so far as they have a negative impact on

companies pension liabilities).

The measures taken to mitigate the risks to the extent possible and economically feasible are

further described in the risk management paragraph included in the basis for consolidation,

valuation of assets and liabilities and determination of income of this report.

Special thanks

In 2012, the number of people in SHV reached 55,800 at year-end. It is to these 55,800 people that

SHV owes deep respect and gratitude for all of the success enjoyed by the company. SHV is deeply

committed to providing a safe and stimulating environment for all of its people. This is in return forthe loyalty, dedication and passion to serve that SHV people demonstrate daily throughout all the

activities of the company, spread over most of the major regions of the world.

It is the ambition of SHV that those who want and strive to develop and grow within the company will

get the chance to do so. Above all else, SHV wants its people to be happy and motivated in their

work in the many different businesses that together comprise the company. To all who live the

values of SHV and who are proud of "being part of SHV", your company says thank you and wants

you to know that you are deeply appreciated for all that you do to serve the company and its several

millions of customers around the world.

March 15, 2013

On behalf of the Executive Board of Directors

P.J. Kennedy

Chairman


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Corporate Philosophy

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Being part of SHVSHV is a privately-held company and wishes to remain so.

SHV is a decentralised company. Great trust is placed in our people in the field.

This decentralisation provides an excellent opportunity for individual development.

Mutual respect and trust provides the basis for happiness at work.

SHVs most important values are integrity and loyalty. Integrity means being honest, genuine and

totally open in communications about all matters that concern the company. Good news may travel

slowly, bad news should travel quickly. Loyalty means putting your best effort into your work for the

company and its development.

Based on the integrity and loyalty of our people, SHV wishes to continue to grow both for the benefit

Documents

Year Overview 2012 Final