avatar Stichting Sanquin Bloedvoorziening Services


  • Page 1

    IN BRIEF 8 theses written by Sanquin researchers 237 articles published in international scientific journals 343,158 donors donated 721,727 succesful donations turnover per division in millions of euros whole blood donors per blood group in % AB+ AB- 11.8 7.8 0.9 B- 19.7 B+ 2 31 7 A- 7 O+ 36 126.3 430.4 263.8 289,244 total blood donors 32 A+ 12 O- Plasma products Blood Bank Diagnostic Reagents Research Other Sanquin Annual Report 2015 1

  • Page 2

    Our stakeholders Four people from Sanquin’s world describe how they experience their relationship with our organisation. 6 Sanquin provides the best blood supply 10 Sanquin delivers solutions for patients Sanquin is a leading 16 knowledge institute in the international pharmaceutical and diagnostic fields 20 Sanquin invests in a future-proof organisation 2

  • Page 3

    IN THIS REPORT 4 Foreword 30 Financial Results 6 Our ambitions 33 Outlook for 2016 6 Blood supply 34 Executive Board 10 For patients 16 International 36 Report by the Supervisory Board 20 Organisation 38 Annual Accounts 28 Risks and Risk Management 72 Independent Auditor’s Report OUR AMBITIONS Sanquin has defined ambitions in four areas. These form a common thread throughout this annual report. BLOOD SUPPLY FOR PATIENTS INTERNATIONAL ORGANISATION Sanquin Annual Report 2015 3

  • Page 4

    FOREWORD The social responsibility of helping patients using the gifts provided by our donors is both inspiring and unique. “TOGETHER FOR PATIENTS AND DONORS” 4

  • Page 5

    Foreword Since my September 2015 appointment as Chairman of the Sanquin Plasma Products BV (SPP) will continue to require Sanquin Blood Supply Foundation’s Executive Board, I have attention in the years to come. The core focus is on the quality become extremely familiar with the organisation and its systems, designed in 2015, which must be expeditiously employees. Getting to know all these enthusiastic, helpful and implemented in 2016. To this end, the organisation must dedicated colleagues has made a lasting impression on me. migrate from being a research-driven structure to a professional Sanquin performs interesting and far-reaching work. The social manufacturing environment. The scale of manufacturing and responsibility of helping patients using the gifts provided by associated business interests leave no other option. donors is both inspiring and unique. The scientific research performed at Sanquin is renowned The donor community is vitally important to us, and we are internationally, encompassing everything related to blood. grateful for the dedication and commitment with which Collaboration with academic research programmes has grown countless donors contribute to a safe blood supply for the in recent years, a development we will certainly continue to Netherlands. We will make sure that the services we provide for promote. Our research topics blend seamlessly with activities donors are modernised. For example, we were unable to deliver in other Sanquin divisions. Research, for instance, contributes Wi-Fi access at every collection location in 2015. This must be significantly to the social issues of health and disease. resolved in 2016, as the lack of Wi-Fi is unacceptable in this day and age and, furthermore, we had in fact promised to provide it much earlier. We also want to improve our service to donors, The donor community is at the heart of among other things by allowing them to schedule their own our organisation and we are truly grateful donations through a donor portal. for the dedicated and committed way the Sanquin’s public tasks are essential, with the Blood Bank and numerous donors contribute to ensuring research activities at the organisation’s heart. The Blood Bank the Netherlands has a safe supply of blood. covers all the activities in the chain from collection to the release of short shelf-life blood components. This includes not only the Blood Bank and research activities, but also the commercial Sanquin is a unique institute in the world. All the activities, from diagnostic testing and manufacture of plasma medication and blood collection to delivering blood components and plasma reagents. This mix of public tasks and private activities demands medicines safely to patients, and every step along the way, a transparent organisation, with responsibility and accountability occur under one roof. This all-in-one principle is a condition for being crystal-clear. The first steps were taken in 2015, with the Sanquin’s success. It is our duty to ensure this system can survive process to be completed in 2016. The result will be that the in the years to come. Sanquin Blood Supply Foundation includes both the Blood Bank and Research divisions, while also owning a holding company which performs private commercial activities. This is a Dirk Jan van den Berg transparent, proven structure that protects public duties from Chairman of the Executive Board any risks taken in the private sector. Sanquin Annual Report 2015 5

  • Page 6


  • Page 7

    BLOOD SUPPLY HAIJO SIKKES BLOOD DONOR “After having donated blood The best blood supply 530 times, I had to stop Sanquin aims to provide the best because I’m 70 years old. blood supply. Our blood products I regret that I can no longer meet the highest requirements donate. I loved doing it. for efficacy, quality and safety. The Leeuwarden Blood Bank The 427,685 packed red blood cells was my regular destination. Sanquin supplied to hospitals in I miss the staff and the other 2015 will have saved thousands donors; it was one big, happy of lives. We can provide our blood family. I was given a tour of products thanks to the selfless Sanquin in Amsterdam because donations from 343,158 donors. I had donated more than 500 times. Seeing just what my blood and plasma are used for was very impressive.” Sanquin Annual Report 2015 7

  • Page 8

    Donor Advisory Council (DAC) Donors are the heart of the Netherlands’ blood supply. Sanquin values the thoughts, ideas and recommendations donors can provide on donor-related issues. Until 2015 this was coordinated through the National Donor Council and four regional donor councils. With Sanquin moving increasingly to a single, national structure, the National Donor Council recommended the formation of a single Donor Advisory Council with a national mandate. This Donor Advisory Council (DAC) came into being on 1 January 2015. The DAC consists of eight donors from various collection sites throughout the country. Additionally, the Netherlands Donor Association and the Young Donor Association each hold one seat. The DAC held four plenary meetings in 2015. The DAC’s annual report may be viewed here: www.sanquin.nl/donor/donorinbreng/donor-advies-raad Changes to the selection policy Previously, men who had sex with men (MSM) were permanently excluded from donating blood in the Netherlands. The selection policy changed as of 1 December 2015, so that blood may be donated 12 months after the last MSM contact. In the meantime, international developments and study results are also being monitored closely to determine whether, and under what conditions, a shorter waiting period may be possible. This policy change was supported by donor compliance research conducted with Maastricht University. Alternatives for donor selection policy, existing legal frameworks and Dutch medical practice were also compared with other countries. This new policy brings the Netherlands into line with existing policies in Finland, Sweden and the United Kingdom. The policy was partly the result of extensive discourse with involved parties, such as the Netherlands Association of Haemophilia Patients, the COC Netherlands, the Medical Advisory Council and Sanquin. 343,158 donors in 2015. 10% annual drop-out among donors, 5 trucks with roof-mounted solar because they reach the age of 70, panels were ordered by 721,727 successful donations in 2015. for medical reasons or they are no longer willing to donate. Sanquin. The panels deliver power to keep the products cool. This eliminates the need 8. 5 average donor satisfaction score 7.7 is the rating that indicates to run the motor for blood cooling, thus cutting fuel consumption, noise pollution for Sanquin, from a 2015 survey. how satisfied hospitals are and exhaust fumes. with us in general. 8

  • Page 9

    Blood supply World Blood Donor Day On World Blood Donor Day (14 June every year), Sanquin thanks all its donors for their special gift, and raises awareness of the importance of giving blood in the Netherlands. We do this with unique activities. For example, eight blood donors walked through the centre of Rotterdam on World Blood Donor Day 2015 with their cardiovascular systems painted on their bodies. Donors can also take selfies at collection sites and share them on social media with the hashtag #ikgeefbloed (#idonateblood). Sanquin posts the selfies and photographs and videos of the body-painted donors on a special online wall of fame. www.sanquin.nl/walloffame ‘Save someone’s life’ 67% of donors cite saving a life as their reason for donating. This important motivation was the foundation for the donor recruitment campaign Sanquin launched in 2015. Its central message was that ‘You don’t know him/her, but thanks to your help, he/she is alive today.’ The underlying idea is that living a normal life is not a given for many people. They need blood, and depend on people who give it selflessly. Sanquin focuses on three specific groups in the recruitment campaign: men, young people and the missing minorities. Men, because they are less likely to have antibodies that can cause complications during transfusion. Women are more likely to have antibodies due to pregnancy. Men are also more likely to pass medical screening than women, because they are less susceptible to having Hb levels which are too low to allow donation. We want to recruit young people to keep a good balance of ages in our donor registry. And we need the missing minorities – people with a non-western ethnic background – because of their specific blood groups, demand for which is rising in tandem with changing demographics in the Dutch population. Donors are the heart of the Netherlands’ blood supply. Sanquin values the thoughts, ideas and recommendations donors can provide on donor-related issues. Donor Advisory Council (DAC) Sanquin Annual Report 2015 9

  • Page 10

    S 10

  • Page 11

    FOR PATIENTS BRAM BOON HAS CIDP “CIDP is a nerve disease that Solutions for patients slowly affects your muscles. Everything we do, we do for patients I use the medicine Nanogam right around the world who need every two weeks with the help of our products and expertise. It’s Sanquin’s Home Service. It’s great our mission to provide life-saving that I can get this treatment at products and to focus on healthcare home. I usually watch TV while needs. Through scientific research, having the infusion. Or I take we seek and find new solutions a 30-minute nap. The Home for medical problems related to Service nurse gives me the IV, transfusion medicine, haematology but I can disconnect it myself and immunology. with my wife’s help.” Sanquin Annual Report 2015 11

  • Page 12

    10 years of Sanquin Home Service The Sanquin Home Service delivers ‘personalised care’ for patients needing regular intravenous (in the vein) or subcutaneous (under the skin) plasma medicines to treat their disease. These patients previously had to go to hospital for treatment; now thanks to Home Service, a registered nurse visits them at home and is responsible for administering and handling the infusion. Willing patients and/or informal caregivers can also perform some of the tasks themselves, such as disconnecting the infusion line. The nurse can train and support them with this. Sanquin Home Service celebrated its tenth birthday in 2015, and the Netherlands Institute for Health Service Research (NIVEL) conducted an evaluation among patients, informal caregivers and care providers. The result: patients awarded Sanquin Home Service an average rating of 8.9. Having medication administered in their own environment is particularly appreciated. Healthcare providers are also positive, awarding the Sanquin Home Service an average rating of 8.3. Omniplasma preferred Since April 2015 Sanquin has only supplied a single type of plasma to hospitals, Omniplasma – a plasma for transfusions, consisting of combined (pooled) plasma donations from 600 different donors. The plasma is subjected to virus-destroying treatment and a treatment to remove prions (proteins causing Creutzfeldt-Jakob disease). This makes Omniplasma safer than the Quarantine plasma supplied previously to hospitals as a standard product. The supply of Quarantine plasma for large-scale use has, therefore, been significantly reduced. Sanquin still maintains a limited volume of Quarantine plasma for special patient groups, such as new-borns. 8 PhD theses written by 800,000 euros was the value of the Vidi Sanquin researchers. grant awarded by NWO to the 1 Sanquin researcher Stephen Huveneers for his research into 237 international peer-reviewed articles Sanquin employee, Masja de Haas, was awarded an endowed professorship in Translational leaking blood vessels. Thanks to this grant, he will be able to study the causes of vascular disease and, published by Sanquin researchers Immunohaematology at potentially, contribute to new forms the University of Leiden of treatment. 12

  • Page 13

    For patients Small Magister In 2015, as a world first, Sanquin developed a fully automatic blood analysis machine specially for hospital laboratories and blood banks undertaking a small to moderate number of blood group serology tests per day. This Magister C24 provides fully automated serological blood group analyses, including blood group type, antibody screening, cross-matching and a direct antiglobulin test. Previously laboratories processing limited numbers of tests had to perform them manually or semi-automatically with equipment that didn’t entirely meet their requirements. The Magister C24 gives these laboratories a suitable solution for optimal safety. Sanquin will market the Magister C24 in mid-2016 once the required certification process has been completed. Testing pregnant women Sanquin is again permitted to perform tests to identify antibodies and foetal RhD typing in pregnant women. Maternal antibodies can enter the foetal blood through the mother, and subsequently break it down. The child could develop anaemia and become severely ill. Sanquin tests the mother’s blood to prevent this, and where necessary, anti-D prophylaxis is given (known as the Rhesus vaccination). Sanquin already performs this test for 57,000 pregnant women in the Netherlands every year on behalf of the National Institute for Public Health and the Environment (RIVM). Having won the European tender in 2014, Sanquin can continue to perform this testing until at least 2018, with the option of an additional two-year extension. Patients particularly appreciate having medication administered in their own environment. 10 years of Sanquin Home Service Sanquin Annual Report 2015 13

  • Page 14

    Tissues & Cells Sanquin launched its new Tissues & Cells business unit on 1 January 2015. The unit focuses on Sanquin activities that are subject to the Safety and Quality of Body Materials Act: the Bone Bank in Groningen and Nijmegen, the Cord Blood Bank in Leiden, and the Stem Cell laboratory in Groningen. Tissues & Cells strives to improve efficiency, safety, quality and the development of new tissue products in the Netherlands. The Cord Blood Bank is continuing its ‘Growth’ programme to expand the bank with more high-quality cord blood units. Sanquin entered into an administrative joint venture with the Leiden tissue bank Bislife in May to achieve further centralisation of tissue activities. Bislife’s activities will be integrated with those of Sanquin T&C’s. Tissue & Cells managing director Daphne Thijssen-Timmer will take on the role of seconded manager for Bislife. Cell and tissue transplantations involve the use of a patient’s own material more frequently than blood transfusions do. These autologous products are required because cells and tissues have many more specific characteristics than blood cells do, so that finding a suitable donation is challenging. A suitable donor is thus also sought within the patient’s family for some types of cell and tissue donations: the related donor. The table below displays various Sanquin cell and tissue products, drawing a distinction between the type of product and its origin (autologous, related or unrelated). Tissue type Number processed 2015 Number distributed 2015 Autologous blood stem cells 776 563 Blood stem cells from related donors 12 12 Blood stem cells from unrelated donors 31 31 Stem cells from bone marrow, autologous 2 1 Stem cells from bone marrow, from unrelated donors 4 4 Bone marrow stem cells from unrelated donors, processed into medication 3 1 Stem cells from cord blood, from related donors 4 1 Stem cells from cord blood, from unrelated donors 1,634 19 White blood cells (lymphocytes) from unrelated donors 3 3 White blood cells (lymphocytes), autologous, processed into medication (TIL) 4 4 T-lymphocytes, unrelated 3 4 Bone products from unrelated donors, various 1,318 1,478 Skull bone flap, autologous 110 55 Cartilage products from unrelated donors, various 11 32 14

  • Page 15

    For patients More transfusion expertise Sanquin has taken the lead in the creation of a consortium for blood transfusion research, to exchange knowledge and promote scientific research in the field. Various parties have joined forces in the consortium: along with Sanquin, they include the national agency for haemovigilance and biovigilance TRIP, practically all the academic hospitals, a number of tertiary teaching hospitals (STZs) and some smaller private hospitals. The consortium comes under the umbrella of the Netherlands Association for Blood Transfusion (NVB) as a working group. YouTube success Sanquin published several video series covering what it does, on its YouTube channel. The video series Blood saves lives shows how stem cells from cord blood can save the lives of cancer patients. New mother Emerntia, former leukaemia patient Bram and nurse Annemarie share their special stories. In the video series Living with rare sickle-cell disease, eight year-old Denischa talks about her life with a rare form of severe anaemia caused by sickle-cell disease. Thanks to blood transfusions, she has less pain and can lead a healthier life. Sanquin expert Karin Fijnvandraat explains sickle-cell disease in the series. The videos created a stir on social media, and Dutch TV programme Hart van Nederland showcased the series on 4 January 2016. Thanks to blood transfusions, Denischa has less pain and can lead a healthier life. YouTube success Sanquin Annual Report 2015 15

  • Page 16

    OPER 16

  • Page 17

    INTERNATIONAL DAVID LOWNDES SENIOR VICE PRESIDENT SUPPLY CHAIN MANAGEMENT SHIRE “Sanquin is an important partner Internationally active in for Shire thanks to its experience pharmaceuticals and diagnostics and expertise in the manufacture A key activity for Sanquin is contract of the human C1-esterase inhibitor manufacturing. This involves using our facilities Cinryze®. This enhances our ability to manufacture products for third parties who to meet the needs of patients with provide the raw material. This enables us to hereditary angio-oedema. achieve economies of scale, so that we can Thanks to our proven expertise produce plasma medicines at competitive in selling this product, Cinryze prices – a requirement in today’s international has the potential to develop into market. The Dutch market also benefits, as one of the most important products plasma products made using Dutch plasma in Shire’s portfolio.” can be made cost-effectively. ERATION Sanquin Annual Report 2015 17

  • Page 18

    Contract manufacturing Sanquin has worked with the biopharmaceutical company Shire since late 2013, and produces the plasma medicine Cinryze from American plasma in cooperation with Shire. This partnership provides very effective medicinal products, available for a considerable time in the Netherlands, to patients with hereditary angio-oedema around the world. The demand for Cinryze continues to grow, consequently, Shire and Sanquin are looking for ways to increase production. The existing joint venture between Sanquin and Shire intensified in 2015, with Shire giving Sanquin access to the manufacturing technique used to make Cinryze. This step strengthened the global availability of an important medicine on which patients throughout the world rely. Shire is involved directly in the improvements related to compliance. In the context of its collaboration with the US pharmaceutical company Baxter, Sanquin increased its manufacturing capacity for processing Baxalta plasma in 2013 and 2014. In 2015, Sanquin started the preparation of albumin and immunoglobulins that Baxalta will, among other things, use to treat burns and diseases when defence against infections or the body’s own cells has been disrupted. Quality at Sanquin Plasma Products Sanquin’s manufacture of semi-finished products and medicines for third parties (CMO production) is undergoing such rapid development that the manufacturing requirements also necessitate the further professionalisation of various manufacturing processes, such as the supply chain, documentation, quality control and product release. In the autumn of 2013, Sanquin received a warning letter from the US Food and Drug Administration (FDA). In it, the FDA pointed out bottlenecks in the medicine manufacturing process for the US market. Consequently, a Compliance Enhancement Programme was launched immediately to improve compliance with US regulations. During a meeting with the FDA in April 2015, the FDA expressed its confidence in the progress Sanquin is making on improving compliance in manufacturing medicines for the US, and the speed with which quality awareness is developing. An FDA-approved party, Quantic, was appointed to supervise manufacturing at Sanquin and CAF (the Belgian plasma fractioning facility whose sole shareholder has been Sanquin since 2015). Regular meetings on further progress were scheduled with the FDA in 2015. The FDA will return to carry out another check in 2016. The continued improvement of processes (both administrative and technical) throughout the entire organisation will remain a key area for attention in the years ahead. 309,208 kilograms of Dutch plasma were 15 countries were supplied with our 40 the number of countries to processed for various purposes in 2015. own plasma products, including which the Reagents division Belgium, Brazil, Germany, Finland, has exported products. France, Iceland, Indonesia and Turkey. 18

  • Page 19

    International Immunomonitoring services Immunomonitoring is the analysis of a patient´s immune status in its broadest sense. It includes serological determination of specific antibodies and inflammatory mediators, determining antigen-specific immune cells, HLA typing, and the amount of medicine present in the blood (such as biologicals). Immunomonitoring tests are becoming increasingly important as the number of therapies targeting the immune system grows. Sanquin professionalised its services in this field in 2015. Focussing a section of our website on these services has increased the visibility of a broad range of tests, creating a single point of contact where customers can ask specific questions. A range of Sanquin experts then examine how best to answer the questions, and which types of tests to use. New tests are developed to ensure a full range of possibilities. www.sanquin.nl/immunomonitoring Biologicals testing on the rise Biologicals are therapeutic proteins which help inflammatory diseases such as rheumatoid arthritis, psoriasis and Crohn’s disease. However, some patients develop antibodies against these proteins, causing them not to work or to work less effectively. Sanquin has developed tests to measure the amounts of both biologicals and potential antibodies against biologicals in the blood. This allows more tailored treatment using these very expensive medicines. Sanquin performs these tests itself, but also sells them to third parties. Our diagnostic services for patients treated with biologicals increased by 30% in 2015. A significant proportion of this growth is for patients treated abroad (in Europe, North and South America and Asia). The first more affordable versions of biologicals were marketed in 2015: biosimilars. They are equally effective, and in 2015 Sanquin announced it can measure them accurately as well. Due in part to the introduction of biosimilars, we have been approached by a growing number of pharmaceutical companies to help support their phase IV (post-marketing) studies. Sanquin has also been cooperating with a number of international research consortia working on biologicals since 2015: the British PSORT, which studies biomarkers for the treatment of psoriasis, and the French MAGE, which studies therapeutic drug monitoring (TDM) for biologicals. Throughout the world patients with hereditary angio-oedema are being treated with a very effective medicine which has been available in the Netherlands for a considerable time. Contract manufacturing Sanquin Annual Report 2015 19

  • Page 20


  • Page 21

    ORGANISATION KAREL DE BUIJZER DIRECTOR OF FNV ZORG & WELZIJN (the Dutch Trade Union Confederation for the care and welfare sector) “The collective labour agreement Investing in negotiations got off to a difficult the organisation start, but the result is something With Sanquin’s ‘everything under all parties can support. Sanquin one roof’ structure, each division has a good reputation for blood can develop optimally while supply, which I feel is a strength creating synergy with other of the organisation. The Board divisions. The whole is therefore also has the will to modernise greater than the sum of its parts. and devotes a great deal of This structure needed a few attention to employee develop- adjustments in 2015. Consequently, ment. But it is still a little too two new board members joined administrative at times. It would the team, and Sanquin signed a be good if individual employees new collective labour agreement. were given greater personal responsibility throughout the organisation.” Sanquin Annual Report 2015 21

  • Page 22

    New board members The Sanquin Executive Board reached full strength on 1 September 2015 when Dirk Jan van den Berg and Peter de Geus joined its ranks. Dirk Jan van den Berg (61) replaced the interim Chairman of the Executive Board Maarten le Clercq, and has ample high-level governance experience, including chairing the Executive Board of the TU Delft, and as the Dutch Ambassador to China and Mongolia. Van den Berg’s mandate is to develop Sanquin’s future strategy, and to elaborate the risk separation between the organisation’s public and private divisions. Pieter de Geus (58) joined as a member of the Executive Board, taking over the Sanquin Plasma Products portfolio, where he is also a Statutory Director. He has a great deal of international management and governance experience in the (bio) pharmaceutical industry, including a position as Vice President Corporate Development and Strategy with DSM and Patheon. Sanquin’s legal structure In 2012, the Dutch Minister of Health, Welfare and Sport voluntarily through the Blood Bank. As it did before, Sanquin informed the Speaker of the House of Representatives that she Plasma Products BV buys plasma from the Blood Bank division wanted Sanquin to “implement measures to ensure the blood at market prices, based on a budget approved by the Minister of bank’s equity was not risk-bearing for the company’s private Health, Welfare and Sport. The manufactured medicines are then activities, and vice versa.” In response, Sanquin proposed sold at competitive prices in the Netherlands, with any surplus structural changes in mid-2013; these addressed both the being sold on the international market. Minister’s request and its own wishes regarding Sanquin’s further development. An important first step in developing the desired Sanquin consists of five divisions: Blood Bank, Plasma Products, legal structure was taken in April 2015 when the entire Plasma Diagnostic Services, Research and Reagents, and one business Products division was separated and brought under the unit, Tissues & Cells. The Plasma Products division was corporate umbrella of Sanquin Plasma Products BV. Sanquin and incorporated as a private limited company at the start of 2015. the Ministry of Health, Welfare and Sport discussed the structure The executive support staff provide support to both the divisions and, in particular, the integration of Sanquin’s legal tasks within and the Executive Board. Sanquin has a Supervisory Board, which the planned new structure in 2015. The ‘everything under one supervises the policies of the Executive Board and the general roof’ principle’ remains a condition for Sanquin’s success, and course of affairs within the entire Sanquin group. The Executive a clear structure must safeguard this in the years to come. Board manages Sanquin and its subsidiaries. Since 2008, Sanquin Nothing is to change for donors, patients and treatment has also held a 50.01% interest in the Belgian Central professionals. Sanquin will continue to be a not-for-profit Fractionation Unit of the Red Cross CVBA (CAF-DCF). This organisation with the mission to help save lives or improve enterprise (a cooperative company with limited liability) operates patient health. We are constantly aware of our responsibility a fractionation plant in Belgium. Sanquin increased its interest in to donors to use their donations carefully, responsibly and CAF-DCF to 100% in 2015. Sanquin Oy is a Finnish subsidiary effectively. Donors continue to donate blood and plasma (100%) that maintains contacts with Finnish customers in Finland. Executive Board Executive support staff / services Plasma Bloodbank Diagnostics Research Reagents Tissues & Cells Products BV 22

  • Page 23

    Organisation Collective labour agreement Sanquin largely bases its own collective labour agreement on the hospital labour agreement, and was prepared for a new agreement in 2015. Negotiations with unions on adopting or modifying points from the hospital labour agreement and the addition of any Sanquin-specific regulations took longer than usual in 2015. Sanquin wished to modernise the new collective labour agreement to address certain social trends, such as the ageing population and an increased pension age. Furthermore, we no longer wanted to mirror hospital salary growth due to our own financial situation. This required a great deal of additional negotiation, and led to a signature-collecting initiative among Sanquin staff, among other things. The CNV and FNV unions reached an agreement in principle with Sanquin in September. The new collective labour agreement includes realistic salary growth, room for modernisation, and abundant possibilities for training and sustainable deployability. The new agreement is valid until 1 January 2017. Employees will receive a total pay increase of 3% during this time. R&D Plasma Products reorganisation The Research & Development division in Sanquin Plasma Products has been reduced to a supporting division for the plasma manufacturing operations core short term needs. Examples include supporting the product optimisation process and life-cycle management. At the same time, taking account of the strategic requirements of the Plasma division in the long term, Sanquin is studying (the need for) future product innovations, and how this activity can be performed in a new and effective manner. Sanquin will continue to be a not-for-profit organisation with the mission to help save lives or improve patient health. Sanquin Annual Report 2015 23

  • Page 24

    General satisfaction 2012 Customer survey General satisfaction 2015 The Blood Bank and Diagnostic Services divisions conducted the three- 8.0 yearly customer survey in September, focusing on implementing optimal improvements and tailoring services to customer demands wherever 7.7 Sanquin Blood Bank possible. The National Satisfaction Index was used as a benchmark. The survey showed that Sanquin’s customers deem it a stable organisation; an organisation they regard as reliable and professional. The feedback received will be implemented within the organisation in 2016. Benchmark: 7.5 7.8 Sanquin Diagnostic Services Diagnostic alliance Sanquin has been working with six hospitals in the Amsterdam and Flevoland regions since 2014, to create a joint laboratory representing four specialities: clinical chemistry, immunohaematology, medical microbiology and pathology. The patient testing performed by Sanquin’s Diagnostic Services division will be transferred to the joint laboratory once plans have been implemented. The joint venture initiative is based on the conviction that high-quality diagnostic services can only be offered cost-effectively in the future if knowledge and infrastructure is shared. However this planned collaboration faced delays in 2015. A decision to scrap the original design for the collaborative venture was taken in the spring of 2016. Despite extensive meetings, the parties involved could not agree on the controlling interests of various alliance partners within the new company. Nevertheless the collaboration that had already developed in the field will continue. Sanquin is also seeking out new forms of cooperation. In the meantime, the Diagnostic Services division has managed to achieve a great deal in terms of quality, efficiency and cooperation. These developments have contributed to an improvement in the financial results of the diagnostic activities. 225 employees took up Sanquin’s 11,200 was the result of the annual Christmas 46% of those surveyed by TNS-NIPO offer of a free flu vaccination package campaign among employees mentioned Sanquin without (a 20% increase over 2014). in 2015. 224 Sanquin employees hesitation when asked who manages and volunteers donated the value the blood supply in the Netherlands. of their package to refugees through 63% named Sanquin in response to 7.8 the Care foundation. the same question when offered names in a list. for customer satisfaction: the result of the three-yearly survey Sanquin conducted in 2015. Response 124 managers completed the leadership among customers was no less programme in 2015, designed to than 60.2%. strengthen their own leadership abilities. 24

  • Page 25

    Organisation Belgian plasma medicine supply The Belgian organisation CAF-DCF processes part of the plasma Sanquin requires for manufacturing the medicine Cinryze for example. CAF-DCF also fractions Belgian plasma, which third parties (including Sanquin) then process into medicines for the Belgian market. Sanquin increased its interest in CAF-DCF to 100% in 2015. Sustainability by extracting winter cold out of drinking water Amsterdam’s drinking water is rather cold in winter, and this temperature can be put to good use. Amsterdam’s water utility Waternet and Sanquin therefore decided to build a storage installation to extract and collect the cold out of the water. Subsequently, Sanquin can use this to cool both clean rooms (sterile rooms) and its manufacturing processes. A declaration of intent to this effect was signed on 3 November. In winter, the water utility runs the water through a heat exchanger, where the cold is extracted from it. Sanquin can use part of this cold immediately, with the rest stored in the ground for summer use. This results in 100% sustainable refrigeration for Sanquin, while Waternet customers receive slightly warmer water. Other than for flushing toilets, a lot of water is used for showering. The slightly higher temperature means less gas is required to heat it to the right temperature. The supply of cold to Sanquin should result in an annual savings of 1,100 tons of CO2, comparable to the annual power consumption of 1,800 households. Should the system work well, it can be expanded by the addition of a second heat exchanger. This is the first time a water utility in the Netherlands has supplied something other than just water – in this case cold. Sanquin Annual Report 2015 25

  • Page 26


  • Page 27

    MARCO VAN OOIJEN CARE DIRECTOR AT ABN AMRO BANK “Sanquin keeps a close watch on the sustainability of its business model. This gave us the confidence to look beyond the losses suffered in 2014 and to refinance the organisation. The Executive Board has demonstrated a clear strategic vision and calls on expert advisors where necessary. The board members are already looking to 2020, and are taking us along on their voyage. That’s how I know they will continue to make considered choices in the future.” Sanquin Annual Report 2015 27

  • Page 28

    Risks and risk management Risk profile Sanquin’s activities are based in part on a legally mandated task. Other activities are conducted in an international, free-market context. The nature of the market means that these free-market activities involve risks which differ from those of its public activities. Sanquin’s risk appetite in this domain is low, because the primary Financial situation driver is that patients must always have access to the often Sanquin’s financial situation is healthy in terms of solvency and life-saving products it manufactures. The risks Sanquin faces are liquidity. Setbacks in the quality of operational processes may evaluated per division, and analysed at corporate level. result in a slowing or partial suspension of manufacturing and thus the sale of products. This may impact Sanquin’s financial Lower product turnover situation negatively. The decreasing demand for some products means fewer different products are distilled from the same amount of raw material. Compliance This reduces the number of actors supporting the joint costs of Sanquin received a warning letter from the US FDA regulatory collecting, testing and preparing plasma medicines. Synthetic authority in 2013. The FDA found that Sanquin did not comply alternatives are or will be available for some products, and we, with a few of the quality requirements for processes and systems therefore, expect sales to fall. A decline in the use of blood applicable to organisations supplying medicines to the USA. products by hospitals also represents a financial risk. The warning letter had no direct consequences for the options for supplying products for the US market. Sanquin launched ICT an extensive Compliance Enhancement Program in response to Sanquin has a variety of ICT systems (hardware, software, the warning letter, focused on making structural improvements computer networks and data communication). The ICT to the organisation, culture, processes, systems and work infrastructure is designed to support the organisation effectively, performance within Sanquin Plasma Products. The FDA will reliably and safely. The continuity of operational processes is carry out another check in 2016. highly dependent on the proper functioning of the ICT systems. The first steps to migrate ICT activities were taken in 2014, under Expansion of manufacturing a new contract for ICT infrastructure management with Centric. A contract manufacturing agreement was signed with Baxter The transition was completed by 1 December 2015. in 2012, making Sanquin responsible for a significant volume The performance and effects of security measures in the ICT of plasma and semi-finished product processing for Baxalta. environment are now monitored permanently, allowing swift A great deal of time and effort was put into designing and adjustments in the event of (potential) disruptions. Alternative building the process installations required and making necessary procedures have been developed for applications supporting changes to the organisation and work procedures during the time-critical processes, such as the national donation test reporting year. As a result of additional wishes from Baxalta, laboratory, allowing work to continue in the event of technical the complexity of extending the facilities and the launch of the problems. An agreement has also been reached with a Belgian Compliance Enhancement Programme, initiating the activities for laboratory, which will provide services in case of emergency. Baxter was delayed. Manufacturing began in late 2015, with Periodically, the emergency procedures are tested in practice. further growth planned for 2016 and 2017. This may affect manufacturing planning for 2016 and beyond, and may thus potentially slow the forecast turnover growth. 28

  • Page 29

    Risks and risk management Legislation and regulations in Belgium The organisation has a number of codes of conduct, such as Belgium introduced new legislation and regulations in 2014 a power to sign policy, a code of conduct for employees, and which, among other things, affects the supply of plasma a whistle-blower policy. They include provisions on respect for medicines to healthcare institutions. A potential result of the colleagues, ethics, bribery/corruption, and the use of alcohol and new legislation is that a tender will be issued every three years drugs. Sanquin adheres to the FEDERA code of conduct for the for manufacturing and supplying the corresponding plasma to use of body materials for scientific research. Measures are taken if hospitals. If CAF-DCF loses this tender, deliveries within Belgium a code of conduct is violated. No cases of bribery or corruption may be limited severely. This may have a major impact on were reported in 2015. Risk assessments and evaluations within CAF-DCF’s profitability. The law is not expected to come into the context of the policy on health, safety and the environment force before 2017. Talks are currently underway between are conducted regularly, and insurance has been arranged for CAF-DCF and the Belgian government to discuss the product liability and other operational risks. consequences. The quality policy is documented, while Standard Operating Taxes Procedures and facilities for securing the ICT infrastructure, and The contract with the Dutch Tax Authorities regarding the backup facilities in the event of technical problems, are all in place. corporate tax to be paid on Sanquin profits ended in late 2012. Consequently, since 2013, Sanquin has been fully subject to the Quality policy corporate tax regime. Agreements have been reached with the Sanquin’s quality policy is recorded in writing and uses GMP Dutch Tax Authorities which will become applicable the moment and ISO quality systems. Various business units are inspected Sanquin’s new legal structure, created for risk separation, is fully frequently by the Health Care Inspectorate of the Ministry of implemented. A transitional agreement applies until such time. Health, Welfare and Sport, including in the context of ISO The basic assumption of the agreements is that the blood supply certification. Periodic internal auditing is one of the tasks of in the Netherlands will not become more expensive. In concrete the executive support staff department, QA, and is part of the terms, this means no corporate tax is levied on public activities, continuous monitoring within the context of risk management, and no VAT charged on internal deliveries within the Sanquin in addition to an audit programme focused on qualifying critical group. In the unlikely event that other agreements become Sanquin suppliers. External risk assessments and evaluations are applicable after the implementation of the legal structure or performed regularly, and also occasionally for product liability during the transitional period, this may lead to unexpected insurance reasons. cost increases. Financial instruments Risk management The Executive Board has defined a policy on the basis of which the executive support staff department, Finance & Control, The risk management model employed at Sanquin is the implements the financial risk management. For example, Committee of Sponsoring Organizations (COSO) framework purchasing is centralised wherever possible, and long term for internal risk management. To a significant degree, the pricing agreements are denoted in euros for both sales and elements included in this framework are present within Sanquin. purchases wherever possible. The extent of the financial risks All the divisions have policy rules and procedures to manage Sanquin is subject to during daily operations, such as interest, identified risks. credit and liquidity risks, are limited, and Sanquin does not use the financial instruments at its disposal. For example, there are statutes and documents for decision-making procedures and authorisations, including for projects. The accounting manual describes the financial reporting structure and procedures to be followed. Cash and currency management (treasury policy) is also documented. Sanquin Annual Report 2015 29

  • Page 30

    Financial results Key financial developments in 2015 In 2015, Sanquin achieved revenue growth of € 11.7 million. Total revenue rose to € 487.7 million in 2015 (2014: € 460.2 The Plasma Products Division also experienced a significant million). In addition to product turnover, which increased by increase in revenue in 2015, offset partially by the Blood Bank’s € 11.7 million, (from € 418.7 million in 2014 to € 430.4 million further decline in turnover. During 2015, the operating result in 2015), this included other revenue (an increase of recovered; by the end of 2015 the result was a positive amount € 15.4 million, due primarily to contributions from partners of € 11.5 million compared to a negative amount of for one-off additional quality expenses) and movements in € 23.0 million in 2014. This was due primarily to a combination inventory (an increase of € 0.4 million). of increased turnover and lower costs for raw materials and consumables. Despite the savings on expenditure implemented Product turnover, with a net increase of 3%, may be specified through the efficiency programme, other operating costs rose as follows: in 2015 (€ 138.3 million in 2015, compared to € 133.4 million in 2014). This was due to the significant expenditure required (x € million) 2015 2014 Movement in 2015 to implement the quality measures in the Plasma Products Division in response to the FDA’s warning letter. € € € % Although, these additional expenses were covered largely by contributions from our CMO partners. In part due to these Turnover circumstances, net profits increased to € 6.6 million in 2015 per product (2014: a negative amount of € 16.6 million). Blood Bank 126.3 136.3 -10.0 -7 Plasma Products 263.8 240.7 23.1 10 In summary, the profit and loss account was as follows: Diagnostic services 19.7 19.1 0.6 3 Reagents 11.8 12.2 -0.4 -3 Research 7.8 9.0 -1.2 -13 (x € million) 2015 2014 Movement Other activities 0.9 1.4 -0.5 -38 € € € % Total 430.4 418.7 Revenues 487.7 460.2 27.5 6.0 Costs of raw materials and consumables -123.5 -138.3 14.8 -10.7 (x € million) 2015 2014 Movement Staff costs -183.1 -184.2 1.1 -0.6 Gross margin 181.1 137.7 43.4 31.5 € € € % Other operating -138.3 -133.4 -4.9 3.7 expenses Geographic EBITDA 42.8 4.3 38.5 894.5 Netherlands 217.1 227.7 -10.6 -5 Depreciation -31.3 -27.4 -3.9 14.1 Abroad 213.3 191.0 22.3 12 Operating result 11.5 -23.0 34.5 -150.0 Financial income and expenses -1.8 -1.7 -0.1 6.3 Total 430.4 418.7 Taxes -3.2 7.3 -10.5 -143.9 Share of minority 0.1 0.8 -0.7 -90.6 interests Net profit 6.6 -16.6 23.2 -139.5 30

  • Page 31

    Financial results The growth in the turnover of Plasma Products (both in SPP BV The financial expenses, including the result of participating and CAF-DCF) was visible across the board. The turnover of interests, in the amount of € 1.8 million, were almost the same Plasma Products sold under our own label increased, due as the financial expenses for 2014 (€ 1.7 million). primarily to further marketing of Omniplasma in the Netherlands. Contract manufacturing turnover also increased due to Cinryze A tax charge of € 3.2 million was accounted for in 2015. This scaling-up manufacturing and the initiation of new contract consisted of a tax charge of € 2.9 million for results achieved in manufacturing activities. The persistent drop in Blood Bank 2015, and a € 0.3 million correction over previous fiscal years. turnover was attributable to a decrease in the sale of short shelf-life blood products to hospitals. The main reason for the All the revenue mentioned above resulted in a net profit over fall in revenue from Research was the decline in revenue from the 2015 financial year of € 6.6 million (2014: a negative contract research and external subsidies. Other activities amount of € 16.6 million). remained virtually unchanged. In summary, Sanquin’s balance sheet was as follows: The drop in staff costs (by 0.6% to € 183.1 million) was due to rising costs in Plasma Product activities on the one hand, and (x € million) 2015 2014 a drop in Blood Bank activities on the other. The decrease in raw material costs (by 10.7% to € 123.5 million) was most visible in € € the Blood Bank, and was related to lower sales of short shelf-life blood products. As a result of these developments, the 2015 Fixed assets 198.2 208.7 gross margin (revenue minus cost of materials and staff) as Inventory 183.1 160.9 a percentage of turnover increased to 37.1% (2014: 29.9%). Receivables 102.8 90.3 Cash and cash equivalents 32.7 35.8 Despite the savings on expenditure implemented due to the Total assets 516.8 495.7 efficiency programme, other operating costs rose in 2015, from Provisions 8.2 13.8 € 133.4 million in 2014 to € 138.3 million in 2015 (representing Long term liabilities 55.5 38.0 a 3.7% increase). Investments in the Plasma Products quality Short term liabilities 147.1 126.1 organisation were mainly responsible for this growth. However, Group equity 306.0 317.8 the majority of these additional costs were covered by extra Total liabilities 516.8 495.7 contributions from our CMO partners. On balance, this resulted in a rise in the EBITDA margin from 0.9% in 2014 to 8.8% in 2015. In 2015, depreciation rose by 14.1% to € 31.3 million resulting from the commissioning of the new Plasma Products manufacturing facilities. On balance, the total operating expenses decreased by 1.5% to € 476.2 million (2014: € 483.3 million) in 2015. However, as the revenue increased by 6.0%, the operating results improved from a negative amount of € 23.0 million in 2014 to a positive amount of € 11.5 million in 2015. Sanquin Annual Report 2015 31

  • Page 32

    The balance sheet total was € 516.8 million, an increase of 4.3% In summary, Sanquin’s cash flow statement was as follows: over 2014 (€ 495.7 million). Total working capital amounted to € 171.5 million (2014: € 161.0 million). Within the working (x € million) 2015 2014 capital, inventory (+13.8%), receivables (+13.8%) and short term liabilities (+16.7%) all displayed an increase. The cash and cash € € equivalents decreased slightly from € 35.8 million to € 32.7 million. The inventory and liabilities increased in 2015 as a result Operating result 11,504 -23,021 of purchasing residual plasma from one of Sanquin’s CMO Depreciation and change in provisions 25,601 26,150 partners. Receivables were temporarily high as at the balance Movements in working capital (inventory, -13,558 -12,672 date due to the high turnover achieved in the final months of the receivables and short term liabilities) year. As a percentage of revenue, the working capital (excluding Cash flow from business operations 23,547 -9,543 cash and cash equivalents) was 28.4% (2014: 27.2%). Other operating movements -4,938 5,633 Cash flow from operating activities 18,609 -3,910 At € 375.8 million, the capital employed remained stable Cash flow from investments in intangible -616 0 fixed assets compared with the previous year (2014: € 375.4 million). As at Cash flow from investments in tangible -20,935 -36,960 the end of the financial year, the return on the capital employed, fixed assets based on operating results, was 3.1% (2014: 6.1% negative). Cash flow from investments in financial -17,622 0 This ratio therefore displayed good growth. fixed assets Cash flow from financing activities 17,521 2,713 At the end of the financial year, the group equity was Net cash flow -3,043 -38,157 € 306.0 million (2014: € 299.5 million). The solvency was 59.2% (2014: 60.4%) at the end of the The net cash flow from operating activities was € 18.6 million financial year. Thanks to this relatively stable ratio, the solvency (2014: a negative amount of € 3.9 million). The operating cash requirements of the bank were fulfilled amply. flow for working capital was € 34.0 million higher, amounting to € 37.1 million (2014: € 3.1 million). The cash flow including movements in the working capital (excluding cash and cash equivalents) was € 23.5 million (2014: a negative amount of € 9.5 million). The free cash flow was a negative amount of € 20.6 million (2014: a negative amount of € 40.9 million) as the available cash flow was insufficient to finance all the investments. 32

  • Page 33

    Outlook for 2016 Outlook for 2016 As a result of the continued expansion of contract manufacturing activities within Plasma Products, Sanquin expects further turnover growth for 2016. Profitability will remain under pressure due to additional investments in the quality organisation necessary to make manufacturing FDA-compliant. The expectation is that Sanquin will be able to implement the necessary maintenance investments in 2016 without additional external financing. Significant efforts were made throughout the year to address all of measures. It was agreed that Quantic, a party approved by the bottlenecks identified by the FDA inspectors. Many of these both the FDA and Sanquin, would supervise manufacturing, bottlenecks have been resolved, but new issues for improvement quality control and release in Amsterdam and Brussels. Sanquin have been identified for both facilities, such that the warning will also maintain monthly contact with the FDA to discuss letter is still in effect. The Cinryze manufacturing for American progress. The FDA has expressed its confidence in the patients can continue, however. This is the conclusion of a visit commitment of both Sanquin and Shire. The FDA performed made by Sanquin to the FDA on 27 April 2015. a new inspection in May 2016, based on which the impact on the approach to quality issues and manufacturing schedules for The meeting was intended to provide the FDA with insight into 2016 and beyond are being assessed. the progress being made in improving compliance related to medicine manufacturing for the US market. The FDA invited us A decision on how to implement the legal restructuring further because there were questions about the rate at which the is expected in mid-2016. The plan is to spin off the Reagents improvement of quality awareness was progressing. The FDA division into a separate company and to make Sanquin Holding BV, expressed confidence in the progress being made during this which is fully owned by the Foundation, the owner of the constructive meeting. We achieved this by presenting a package commercial entities. Sanquin Annual Report 2015 33

  • Page 34

    EXECUTIVE BOARD Dr P. de Geus Mr D.J. van den Berg Prof. R.A.W. van Lier Mr O. Dijkstra Mr H.J.C. de Wit Membership Meetings In 2015 the Executive Board consisted of: The Executive Board met 53 times in 2015. Members of the Mr H.M. le Clercq (Chairman until 1 September 2015) management team and executive support staff may be invited Mr D.J. van den Berg (Chairman from 1 September 2015) to the meetings at the request of the Board. All decisions are Mr H.J.C. de Wit (Deputy Chair) recorded in lists of resolutions and minutes. The Executive Board Prof. R.A.W. van Lier (Member) adheres to the Sanquin Corporate Governance Code and the Dr P. de Geus (Member) Governance Regulations, which outline rules and conduct for good corporate governance, effective oversight and transparent Mr O. Dijkstra (Executive Secretary) accountability. Sanquin is transparent in reporting its activities and social responsibilities. The Executive Board complies with standards for good corporate governance and ensures clear accountability of its activities. When determining policy, Sanquin considers the views of donors, hospitals and other stakeholders. 34

  • Page 35

    Executive Board Ancillary positions The following overview shows the most important ancillary positions held by members of Sanquin’s Executive Board. The ancillary positions held by Executive Board members have been approved by the Supervisory Board. Mr H.M. le Clercq (b. 1945) Principal position: Chairman of the Executive Board, Sanquin Blood Supply (until 1 September 2015) Ancillary positions: Member of the Supervisory Board Spaarne Gasthuis, Member of the Supervisory Board Lage Land Hospital, Member of the Board of Commissioners Royal Dutch Tropical Institute, Member of the Supervisory Board Reumafonds, Treasurer Erfocentrum Mr D.J. van den Berg (b. 1953) Principal position: Chairman of the Executive Board, Sanquin Blood Supply (as of 1 September 2015) Ancillary positions: Chairman of the Board of Commissioners NV Netherlands Gas Union, Member of the International Advisory Board PolyU Hong Kong, Member of the International Visitor’s Programme Advisory Board Ministry of Foreign Affairs, Chairman of the Atlantic Committee, Member of the Committee on European Integration of the Ministry of Foreign Affairs Advisory Council on International Issues, Member of the International Advisory Board for the Moscow Institute of Physics and Technology, Chairman of the Foundation Board IHE Mr H.J.C. de Wit (b. 1953) Principal position: Vice-chairman of the Executive Board, Sanquin Blood Supply Ancillary positions: Member of the Board CVBA CAF/DCF Brussels (until 16 May 2014), Chairman of the Supervisory Board Bislife (from 15 May 2015), Member, Committee of Experts on Blood Transfusion of the EDQM (European Directorate on the Quality of Medicines) of the Council of Europe, Member TS 093 Plasma Supply Management WG of the EDQM of the Council of Europe, Member of the Executive Board of the European Blood Alliance, Board member IDTM foundation, Board member Tekke Huizinga Fund Foundation, Member of a communication platform for medical advisors at Fresenius, EMEA customer panel member at Caridian BCT, Member of the Advisory Board TRIP Prof. R.A.W. van Lier (b. 1956) Principal position: Member of the Executive Board, Sanquin Blood Supply Ancillary positions: Professor of Experimental Immunology AMC-UvA, Member of the Board CVBA CAF/DCF Brussels (until 28 May 2015), Chairman of the Supervisory Board Bislife (from 15 May 2015), Board member of Immunovalley Foundation, Vice-president EFIS (European Federation of Immunological Societies), Secretary of the Scientific Advisory Council of MS Research, Member of the Scientific Advisory Council Netherlands Lung Foundation, Member of Scientific Advisory Council of the Landsteiner Foundation for Blood Transfusion Research Dr P. de Geus (b. 1957) Principal position: Members of the Executive Board Sanquin Blood Supply (as of 1 September 2015), Director of Sanquin Plasma Products BV Ancillary positions: None Sanquin Annual Report 2015 35

  • Page 36

    SUPERVISORY BOARD REPORT Membership Current events In 2015, the members of the Supervisory Board were: The Supervisory Board devoted extensive attention to Prof. F.C. Breedveld (Chairman) the following subjects during the reporting year: Ms K. Bergstein (Vice-Chairman and Chairman of the Audit Committee) Chairman of the Executive Board Mr M.J.W. Bontje The Supervisory Board helped search for a new chairman. Prof. C.G. Figdor On 1 September 2015, the Supervisory Board appointed Mr A.K. Lahr (Audit Committee Member) Dirk Jan van den Berg as Chairman of the Executive Board. The Supervisory Board decided to expand the Executive Board Mr O. Dijkstra (Executive Secretary) by one additional member. Dr Pieter de Geus, therefore, joined the board and will also be responsible for the Plasma Products The Supervisory Board supervises the Executive Board’s policies division portfolio. and the general course of affairs at Sanquin. The Supervisory Board also advises on strategy and Sanquin activities, and is Financial situation responsible for approving key proposals from the Executive Board. The Supervisory Board discussed measures implemented to The Sanquin Corporate Governance Code, adopted by the control costs and maintain cash flow. Supervisory Board, contains rules and codes of conduct for good governance, effective supervision and clear accountability. Structural changes The Supervisory Board membership is such that the statutory The Supervisory Board repeatedly obtained information about requirements of experience and expertise are complied with in full. the further elaboration of a new legal structure for Sanquin and the discussions on this topic with the Ministry of Health, Welfare Meetings and Sport. In April 2015, The Supervisory Board decided to The Supervisory Board met fifteen times in 2015, including four divide the Plasma Products division into Sanquin Plasma Products plenary sessions. During the extraordinary sessions, the BV and to incorporate Sanquin Holding BV. The Supervisory Supervisory Board devoted special attention to the financial Board took note of the covenant concluded between the situation and transactions related to shares in CAF-DCF. Members Minister of Health, Welfare and Sport and Sanquin. of the Supervisory Board also maintain individual contact with members of Sanquin’s Executive Board and other employees. CAF-DCF On 22 October, the Chairman of the Supervisory Board met In 2015, the Supervisory Board decided to buy-out the minority the Sanquin Works Council to discuss the general course of shareholders (the Belgian Red Cross and French Laboratoire affairs within the organisation. français du fractionnement et des biotechnologies) in the Financial reports, the 2014 annual report and annual accounts, Central Department for Fractioning of the Belgian Red Cross (CAF). and the auditor’s report were discussed and approved in the This gave Sanquin a 100% interest in the Belgian CAF. presence of the external auditor. The Supervisory Board approved the policy plan, the 2016 budget and the Mid-term Plan. ConQuaestor With the Executive Board, the Supervisory Board discussed the The Audit Committee, consisting of two members Ms Bergstein results of the survey, performed by ConQuaestor on behalf of and Mr Lahr, met three times in 2015. The Audit Committee is the Ministry of Health Welfare and Sport, into the plasma market responsible for supervising the provision of financial information, price and the risks of Sanquin’s private activities in respect of the internal risk assessment and control systems, and for the national blood supply. following up recommendations made by the external auditor. 36

  • Page 37

    Supervisory Board Report FDA warning letter Principal position: Until 1 May 2015: Chairman of The Board was informed extensively about the effects of the Executive Board, Leiden University Medical Centre corrective actions, the progress of the Compliance Enhancement Ancillary position 2015: Chairman of the Supervisory Board, Programme and the investments required as a result of the Ipse de Bruggen Foundation warning letter Sanquin received from the American Food and Ancillary positions until 1 May 2015: Chairman of the Drug Administration (FDA) in 2013. Curium Foundation, Chairman of the Thrombosis Service Leiden and surroundings Foundation, Chairman of Medipark B.V. Plasma Products development progress Stockholders Foundation, Member of the Board Leiden Bio The Supervisory Board discussed the progress of the cooperation Science Park Foundation, Member of the Governing Board and contract negotiations with Sanquin’s strategic partners in Leiden University Fund, Member of the Board Bontius Amsterdam, and the subsidiary CAF-DCF in Belgium. Foundation, Member of the Supervisory Board VeerStichting Ancillary position from 1 September 2015: Chairman of Diagnostic alliance the Supervisory Board Nij Smellinghe Hospital The Supervisory Board was informed of the talks about the establishment of a joint diagnostic laboratory, in which Ms K.T.V. Bergstein, MBA (b. 1967) Sanquin will participate as a shareholder together with Appointed 1 September 2012, stepping down 1 September 2016, six hospitals in Amsterdam. eligible for reappointment. Principal position: Member of the Executive Board, Bislife ASR Nederland N.V. The Supervisory Board consented to administrative cooperation Ancillary positions: Member of the Supervisory Board Utrecht between Sanquin and Bislife in order to develop the Sanquin University, Member of the Supervisory Board Human Total Care Tissues & Cells business unit’s tissue activities further. Mr M.J.W. Bontje (b. 1954) Evaluation Appointed 1 June 2013, stepping down 1 June 2017, eligible Under external supervision, the Supervisory Board evaluated for reappointment. its own functioning and noted that its members are sufficiently Principal position: Owner, Bontje Consulting and Management independent. The decision-making procedure in the Supervisory Ancillary positions: Chairman InEen, Chairman of the Board is designed in such a way as to avoid any conflict of interest. Supervisory Board Breburg, Chairman of the Supervisory Board The Supervisory Board also performed an interim evaluation of Rivas, Chairman of the Supervisory Board Oogheelkundig Medisch the Executive Board. Centrum Zaandam, Member of the Supervisory Board Excen, Member of the Executive Board Wie beter eet wordt Sneller Beter Quality, safety and the availability of blood products in 2015 Foundation, Chairman Pand Hospice Nieuwegein Foundation were once again made possible thanks to the unwavering commitment and efforts of our donors. The Supervisory Board is Prof. C.G. Figdor (b. 1953) extremely grateful to these donors and to all Sanquin employees Appointed 1 June 2013, stepping down 1 June 2017, eligible for their efforts in 2015, and for the way they collectively realised for reappointment. Sanquin’s goals. Principal position: Professor of Immunology, Radboud University Medical Centre Nijmegen Amsterdam, 17 June 2016 Ancillary positions: Member Health Council of the Netherlands, Supervisory Board Member KiKa Scientific Council, Member NK Advisory Board, Initiator of ‘Wetenschapsknooppunt Radboud Universiteit’ Overview of ancillary positions Mr A.K. Lahr (b. 1968) The overview below includes the most important ancillary Appointed 1 July 2013, stepping down 1 July 2017, eligible for positions held by members of the Supervisory Board. reappointment. Principal position: Owner, ALCO Prof. F.C. Breedveld (b. 1950) Ancillary positions: None Chairman of the Supervisory Board as of July 2013, appointed in September 2010, stepping down in September 2018, not eligible for reappointment. Sanquin Annual Report 2015 37

  • Page 38

    ANNUAL ACCOUNTS 2015 Consolidated Annual Accounts 2015 Consolidated Balance Sheet as at 31 December 2015 (before profit appropriation) 31 December 2015 31 December 2014 (x € 1,000.-) Ref. € € € € Assets Fixed assets Intangible fixed assets 6 656 0 Tangible fixed assets 7 194,572 204,936 Financial fixed assets 8 3,000 3,750 198,228 208,686 Current assets Inventory 9 183,070 160,945 Receivables 10 102,765 90,339 Cash and cash equivalents 11 32,742 35,785 318,577 287,069 516,805 495,755 Liabilities Group equity Equity 13 306,033 299,467 Share of minority interests 14 0 18,372 306,033 317,839 Provisions 15 8,154 13,812 Long term liabilities 16 55,529 38,008 Short term liabilities 17 147,089 126,096 516,805 495,755 38

  • Page 39

    Annual Accounts Consolidated Profit and Loss Account for 2015 2015 2014 (x € 1,000.-) Ref. € € € € Net turnover 19 430,400 418,705 Movement in inventory of finished products and work in progress 20,888 20,488 Other operating income 20 36,407 21,043 Total operating income 487,695 460,236 Costs of raw materials and consumables 123,508 138,296 Wages and salaries 21 152,206 152,812 Social security charges incl. pension 21 30,916 31,370 Depreciation expenses 25 31,259 27,363 Other operating expenses 26 138,302 133,416 Total operating expenses 476,191 483,257 Operating result 11,504 -23,021 Revenue from financial fixed assets 28 -586 -814 Interest income 28 174 341 Interest expenses 28 -1,395 -1,239 Result from ordinary business operations before taxes 9,697 -24,733 Tax on result from ordinary business operations 30 -3,207 7,345 Share of minority interests 31 75 846 Result after taxes 6,565 -16,542 Sanquin Annual Report 2015 39

  • Page 40

    Consolidated Cash Flow Statement 2015 2015 2014 (x € 1,000.-) Ref. € € € € Cash flow from operating activities Operating result 11,504 -23,021 Adjustments for: Depreciation 25 31,259 27,363 Movement in provisions 15 -5,658 -1,213 25,601 26,150 Movement in operating capital: Increase of inventory 9 -22,125 -1,481 Increase of receivables 10 -12,426 -7,642 Increase of short term liabilities 17 20,993 -3,549 -13,558 -12,672 Cash flow from business operations 23,547 -9,543 Movement in share of minority interests 31 75 0 Other movements in consolidation 28 -585 -814 Interest received 28 174 341 Corporation tax 30 -3,207 7,345 Interest paid 28 -1,395 -1,239 -4,938 5,633 Cash flow from operating activities 18,609 3,910- Cash flow from investing activities Investments in intangible fixed assets 6 -616 0 Investments in tangible fixed assets 7 -20,935 -36,960 Investments in financial fixed assets 8 750 0 Movement in share of minority interests 14 -18,372 0 Cash flow from investment activities -39,173 -36,960 -20,564 -40,870 Cash flow from financing activities Receipts from long term liabilities 16 20,000 4,136 Repayments of long term liabilities 16 -2,479 -1,423 Cash flow from financing activities 17,521 2,713 Net cash flow -3,043 -38,157 Increase/(decrease) of cash 11 -3,043 -38,157 The development of cash is as follows: 2015 2014 (x € 1,000.-) € € € € Balance as at 1 January 35,785 73,942 Movement during the financial year -3,043 -38,157 Balance as at 31 December 32,742 35,785 40

  • Page 41

    Annual Accounts Notes to the consolidated balance sheet and profit and loss account 1. General notes Sanquin Blood Supply Foundation is the head of the Sanquin group.100% of the group companies and other legal entities 1.1 Activities over which it can exercise dominant control or has central Sanquin’s activities involve the preparation and supply of long management are included in the consolidated accounts. and short shelf-life blood products in the Netherlands, the EU The share of minority interests in the group equity and in the and the United States of America, as well as contract diagnostic group’s result is reported separately. services for third parties. Sanquin also performs subsidised and contract research and provides education in cooperation with Intercompany transactions, intercompany results and receivables the University of Amsterdam. In Belgium, long shelf-life blood and liabilities between the group companies and other legal products are prepared and supplied by its subsidiary CAF-DCF. entities included in the consolidated accounts are eliminated. In Finland, Sanquin Oy markets long shelf-life blood products Unrealised losses on intercompany transactions are also for the local market. eliminated unless there is an impairment. The accounting principles of group companies and other legal entities included Sanquin Blood Supply Foundation has its registered office at in the consolidated accounts have been adapted where necessary Plesmanlaan 125, 1066 CX in Amsterdam and is registered with to achieve consistency with the accounting principles used for the Chamber of Commerce in Amsterdam under number the Group. 41217565. The following companies are included in the consolidated 1.2 Business Location accounts: Sanquin is domiciled at Plesmanlaan 125, 1066 CX in • Sanquin Blood Supply Foundation, Amsterdam, Amsterdam. the Netherlands • Sanquin Holding BV, Amsterdam, the Netherlands (100%) 1.3 Estimates • Sanquin Plasma Products BV, Amsterdam, the Netherlands In order to be able to apply the principles and rules for the (100%) preparation of the annual accounts, the board of Sanquin Blood • Euroclone BV, Amsterdam, the Netherlands (100%) Supply Foundation must reach a judgement on certain matters • CAF-DCF CVBA, Neder-Over-Heembeek, Belgium (100%) and make estimates that could be essential for the amounts • CAF-DCF M&S BVBA, Neder-Over-Heembeek, Belgium (100%) included in the annual accounts. If necessary to provide the • Sanquin Oy, Helsinki, Finland (100%) insight required by Article 2:362 (1) of the Dutch Civil Code, the nature of these judgements and estimates, including the On 22 April 2015, the Sanquin Blood Supply Foundation corresponding assumptions, is included in the notes to the incorporated the company Sanquin Holding BV, in which it has particular items of the annual accounts. a 100% interest (see also section 34: Financial fixed assets). Sanquin Holding BV’s financial data for 2015 were, therefore, 1.4 Consolidated accounts included in the consolidated accounts. The consolidated accounts include the financial data of Sanquin Blood Supply Foundation, its group companies and other legal On 15 May 2015, Sanquin Holding BV purchased 24.99% of entities in which it can exercise dominant control or over which the shares in CAF-DCF CVBA for a sum of € 6.9 million. On it has central management. Group companies are legal entities in 24 August 2015, Euroclone BV purchased 24.99% of the shares which Sanquin Blood Supply Foundation can directly or indirectly in CAF-DCF CVBA for a sum of € 12 million. Consequently, as of exercise dominant control because it has the majority of voting that time, the Sanquin group held a 100% interest in CAF-DCF rights or can control the financial and operational activities in CVBA, and all the financial data are, therefore, included in the some other way. In this context, account is taken of potential consolidated accounts. voting rights that can be exercised directly on the balance sheet date. Sanquin Annual Report 2015 41

  • Page 42

    Sanquin Plasma Products BV was hived off via a deed of The acquisition price is the cash sum or equivalent agreed incorporation and legal demerger on 24 April 2015 as a 100% in order to obtain the relevant company, plus any directly subsidiary of Sanquin Blood Supply Foundation (see also section attributable costs. If the acquisition price is higher than the net 34: Financial fixed assets). Therefore, as of financial year 2015, the amount of the fair value of the identifiable assets and liabilities, financial data for Sanquin Plasma Products BV are included in the the surplus is activated as goodwill as an intangible fixed asset. consolidated accounts. If the acquisition price is lower than the net amount of the fair value of the identifiable assets and liabilities, the difference CAF-DCF M&S BVBA was founded on 21 October 2015. (negative goodwill) is included as an overall liability item Sanquin Holding BV and Euroclone BV each hold 50% of (see section 3.1.1 for details). If the net amount of positive and the shares in this company. Consequently, as of the financial negative goodwill results in assets, this net amount is presented year 2015, CAF-DCF M&S BVBA’s financial data are included and explained in greater detail in the notes to the intangible in the consolidated accounts. fixed assets. 1.5 Application of Article 2:402 of the Dutch Civil Code The companies included in the consolidated accounts remain Since Sanquin Blood Supply Foundation’s 2015 profit and loss in the consolidated accounts until such time as they are sold; account is included in the consolidated accounts. Limited notes deconsolidation occurs as at the date of transfer of the to the balance sheet and profit and loss account are included in controlling interest. the company annual accounts. 1.8 Cash flow statement 1.6 Related parties The cash flow statement was prepared according to the indirect All legal entities over which dominant control, joint control or method. Cash and cash equivalents in the cash flow statement significant influence can be exercised are designated related consists of cash, bank balances and call deposits with a term of parties. Legal entities that can exercise dominant control are also less than twelve months. Cash flows in foreign currencies are deemed related parties. The members of the Executive Board translated at average exchange rates. Exchange rate differences under the articles of association, other key officers in Sanquin’s relating to cash and cash equivalents are shown separately in management and those closely related are also deemed the cash flow statement. Income and expenditure arising from related parties. interest, dividends received and tax on profits are included in cash flow from operating activities. The acquisition price for the Significant transactions with related parties are explained group companies acquired is included under cash flow from to the extent that these have not been entered into as arm’s investment activities, insofar as cash payments were made. length transactions. The nature and size of the transactions Transactions that involve no inflow or outflow of cash or cash are explained as well as any other information necessary to equivalents are not included in the cash flow statement. provide insight. 2. General Accounting Principles 1.7 Acquisitions and divestments by group companies As at the acquisition date, the results and identifiable assets 2.1 General and liabilities of the company acquired are included in the The consolidated annual accounts have been prepared in consolidated annual accounts. The acquisition date is the accordance with the statutory provisions of Title 9, Book 2 of moment when controlling interest can be exerted on the the Dutch Civil Code and the authoritative statements from the company in question. Annual Reporting Guidelines published by the Dutch Accounting Standards Board. The annual accounts are compiled in euros. Assets and liabilities are generally stated at acquisition price or manufacturing cost. If no specific basis is reported for the valuation, valuation takes place at acquisition price. References are included in the balance sheet, profit and loss account and cash flow statement. These references refer to the notes. 42

  • Page 43

    Annual Accounts 2.2 Comparison to previous year 3.1.1 Goodwill The accounting principles used are unchanged with respect Positive goodwill resulting from acquisitions and calculated as to the previous financial year. described in section 1.7 Acquisitions and divestments by group companies is activated and subject to straight-line depreciation 2.3 Foreign currency for the duration of the estimated economic life. Functional currency The items in the annual accounts of the group companies are Negative goodwill is released to the profit and loss account valued in the currency of the economic environment in which insofar as expenses and losses occur, provided these were taken the group company mainly conducts its business activities into account when balancing the acquisition and these expenses (the functional currency). The consolidated annual accounts and losses can be measured reliably. If expected expenses or are presented in euros, Sanquin´s functional and losses are not taken into account, negative goodwill is released presentation currency. in accordance with the weighted average of the remaining life of the acquired depreciable asset. Insofar as negative goodwill Transactions, receivables and liabilities exceeds the fair value of the identified non-monetary assets, Transactions in foreign currencies during the reporting period the surplus is included directly in the profit and loss account. are included in the annual accounts at the exchange rate in effect on the transaction date. 3.2 Tangible fixed assets Land and buildings are valued at acquisition price plus additional Monetary assets and liabilities denominated in foreign currencies costs or manufacturing cost net of straight-line depreciation are converted at the exchange rate in effect on the balance sheet during their estimated economic lives. No depreciation is date. The exchange rate differences arising from settlement and charged on land. conversion are added to or deducted from the profit and loss account. Fixed assets in progress are not depreciated until the asset is taken into use. Non-monetary assets that are valued at acquisition price in a foreign currency are converted at the exchange rate in effect Impairments expected on the balance sheet date are taken on the transaction date. into account. See section 3.4 with regard to determining whether a tangible fixed asset is subject to an impairment. 2.4 Leasing Sanquin Blood Supply Foundation may have lease contracts Other fixed assets are valued at the lower of acquisition price/ whereby a large part of the advantages and disadvantages manufacturing cost, including directly attributable costs, net of associated with ownership do not accrue to the Foundation. straight-line depreciation during the expected future useful life, These lease contracts are reported as operational leases. or value in use. The manufacturing cost consists of the Obligations under an operational lease are included on a purchasing costs of raw materials and consumables and costs straight-line basis in the profit and loss account for the term that can be directly allocated to the manufacture, including of the contract, taking into account compensation received installation costs. Software implementation costs are directly from the lessor. deducted from the result. 3. Accounting principles for the valuation There is no obligation to restore the asset at the end of its use. of assets and liabilities No provision has been formed for the future costs of major maintenance to the company buildings. The costs are reported 3.1 Intangible fixed assets directly in the result. Intangible fixed assets are valued against acquisition price minus depreciation. Impairment is taken into account; this is the case if the book value for the asset (or the cash flow generating unit the asset belongs to) is higher than the recoverable amount. To determine whether an intangible fixed asset is subject to an impairment, reference should be made to the paragraph in question. Sanquin Annual Report 2015 43

  • Page 44

    3.3 Financial fixed assets 3.4 Impairment of fixed assets 3.3.1 Participating interests On every balance sheet date, the Foundation determines Participating interests in group companies and other whether a fixed asset may be subject to impairment. If there are participating interests where significant influence can be indications that this is the case, the realisable value of the asset exercised are valued according to the net asset value method. is determined. If the realisable value cannot be determined for Significant influence is assumed if 20% or more of the voting an individual asset, its realisable value is determined on the basis rights can be exercised. of the cash flow generating unit to which the asset belongs. An impairment applies if the book value of an asset is higher The net asset value is calculated according to the policies that than the realisable value; the realisable value is usually equal apply to these annual accounts. to the higher of either the realisable value in the event of sale or the value in use. An impairment is reported directly as an If the valuation of a participating interest is negative according expense in the profit and loss account, along with a concurrent to the net asset value method, it is valued at zero. In this reduction of the book value for the asset in question. situation, a provision is created if and insofar as Sanquin Blood Supply Foundation wholly or partially guarantees the The Foundation also assesses financial instruments to determine participating interest’s liabilities, or has the firm intention of whether there are objective indications for the impairment of enabling the participating interest to pay its liabilities. financial assets or a group of financial assets. If there are objective indications for impairment, the company determines the extent The first valuation of acquired participating interests is based of the loss due to impairment, and accounts for this directly in on the fair value of the identifiable assets and liabilities at the the profit and loss account. moment of acquisition. For the next valuation, the policies that apply to these annual accounts are used, based on the value 3.5 Inventory produced at the time of first valuation. 3.5.1 Raw materials and consumables and semi-manufactures The raw materials include plasma and consumables. The Participating interests in which no significant influence can be inventory is stated at the (average) cost price or lower market exercised are valued at acquisition price. If there is a permanent value. Changes in average cost price are translated into an reduction in value, the participating interest is stated at this lower adjusted value for the inventory by booking a revaluation result. value; downward revaluation takes place at the expense of the Obsolete inventory is valued as zero where necessary. profit and loss account. The semi-manufactures, including the production in progress as 3.3.2 Receivables at the balance sheet date, are stated at the lower of direct cost The receivables included under financial fixed assets are initially plus a mark-up for direct manufacturing costs or market value. stated at the fair value of the amount provided less any provisions Obsolete inventory is valued as zero where necessary. deemed necessary (if tangible). Receivables are stated at amortised realisable value after first inclusion. Impairments are 3.5.2 Finished products and goods for resale accounted for directly in the profit and loss account. The inventory of finished products is stated at the lower of the raw materials costs plus directly attributable manufacturing 3.3.3 Securities costs or the market value. Obsolete inventory is valued as zero The securities included under financial fixed assets that are where necessary. intended to serve permanently for the conduct of the company’s activities are valued at the lower of the acquisition price or Goods for resale are stated at the lower of the acquisition price market value. Reductions in the value of these securities are or market value. Changes in recent cost prices are translated into charged to the profit and loss account. an adjusted value for inventory by booking a revaluation result. Obsolete inventory is valued as zero where necessary. 44

  • Page 45

    Annual Accounts 3.5.3 Contract manufacturing work in progress 3.9.3 Deferred tax assets and liabilities The plasma to be fractioned or intermediary products for Deferred tax assets and liabilities are included for temporary contract manufacturing work in progress are supplied by the differences between the value of the assets and liabilities contracting party in question and remain the property of the according to tax regulations on the one hand and the book contracting party for the duration of the manufacturing process. values recorded in these annual accounts on the other. These are not therefore valued by Sanquin. The value added Deferred tax assets and liabilities are calculated at the tax by Sanquin as at the balance sheet date is accounted for as rates in effect at the end of the reporting year, or at the rates work in progress. applicable in coming years, to the extent that these have already been set by law. 3.6 Receivables At initial inclusion, receivables are stated at the fair value of the Deferred tax assets due to offsettable differences and available consideration. Trade receivables are stated at amortised cost price losses carried forward are included to the extent that it is likely after first inclusion. If the receipt of the receivable is deferred on that future taxable profit will be available against which losses grounds of an agreed extension to a payment term, the fair value can be offset and netting possibilities utilised. is determined with reference to the present value of the expected receipts and interest income based on the effective interest rate is Deferred taxes are reported for temporary differences concerning included in the profit and loss account. Provisions for doubtful group companies, participating interests and joint ventures, debts are deducted from the book value of the receivable. unless Sanquin is able to determine at what moment the temporary differences will expire and it is unlikely that the 3.7 Cash and cash equivalents temporary differences will expire in the foreseeable future. Cash and cash equivalents consist of cash, bank balances and call Deferred taxes are stated at face value. deposits with a term of less than twelve months. Amounts owed to credit institutions regarding the current account are included 3.10 Liabilities under liabilities to credit institutions in short term liabilities. Cash Liabilities are stated at fair value at the time of recognition. and cash equivalents are stated at face value. Transaction costs that can be allocated to the acquisition of the liabilities are directly accounted for in the profit and loss 3.8 Share of minority interests account. Liabilities are stated at amortised cost price after Share of minority interests as part of the group equity is stated at initial recognition. The portion of long term liabilities that is the amount of the net interest in the particular group companies. to be repaid in the coming financial year is accounted for under short term liabilities. 3.9 Provisions 3.9.1 General 4. Accounting principles for the determination Provisions are formed for legally enforceable or actual liabilities of results that exist on the balance sheet date and which will probably require the outflow of funds, the size of which can be reliably 4.1 General estimated. The result is determined as the difference between the net realisable value of the performance delivered and the costs The provisions are stated at the best estimate of the amounts and other charges for the year. The results on transactions are that will be needed to settle the liabilities as at the balance accounted for in the year in which they are realised; losses sheet date. The provisions are stated at the face value of the can be realised as soon as they are foreseeable. expenditure expected to be necessary to settle the liabilities, unless stated otherwise. 4.2 Revenue recognition 4.2.1 Sale of goods 3.9.2 Employee provisions Revenue from the sale of goods is accounted for as soon as The employee provisions consist of obligations relating to all significant rights and risks related to the ownership of the reserved long service bonuses and continued payment in goods pass to the purchaser. the event of long term illness. Sanquin Annual Report 2015 45

  • Page 46

    4.2.2 Provision of services The obligations ensuing from the employees’ rights are placed Revenue from the provision of services is accounted for if and with the pension fund Zorg & Welzijn. Sanquin pays insofar as the relevant services have actually been performed. contributions to this pension scheme; half of this contribution is paid by the employer and the other half by the employee. 4.2.3 Exchange differences The pension rights are indexed annually, if and insofar as the Exchange differences that occur in the settlement of monetary pension fund’s funding ratio (the pension fund’s capital items are accounted for in the profit and loss account in the divided by its financial obligations) permits. period in which they occur. As at 31 December 2015, the pension fund’s funding ratio 4.3 Net turnover was 97% (source: website www.pfzw.nl dated 18 March 2016). Net turnover includes the revenue from the supply of goods and The pension fund must have a funding ratio of at least 127% services less discounts etc. and less taxes levied on the turnover to avoid affiliated institutions having to make extra contributions and after the elimination of transactions within the group. or having to impose exceptional increases in the contributions. Sanquin has no obligation to pay additional contributions in 4.4 Costs of raw materials and consumables the event of a shortfall in the fund, other than the effect of The raw materials and consumables consist of the raw materials higher future contributions. Sanquin has therefore only that are used and are directly attributable to the net turnover, accounted for the contributions owed up to the end of the as well as the costs of manufacturing at cost, or, in the case of financial year as a charge in the profit and loss account. The goods for resale, the direct cost of goods sold. This also includes, pension schemes of subsidiaries domiciled abroad which are if applicable, the devaluation of inventory to a lower market value organised and function similarly to the Dutch pension system and any provisions created for obsolescent inventory. are also accounted for in accordance with the obligation approach. For foreign pension schemes that are not similar, 4.5 Other operating income a best estimate is made of the obligation existing as at the Other operating income includes revenue from licensing and balance sheet date, based on an actuarial valuation method product development for third parties and costs recharged to generally accepted in the Netherlands. third parties. 4.7 Depreciation of intangible fixed assets 4.6 Employee benefits Intangible fixed assets are depreciated over their expected 4.6.1 Regular remuneration future useful life. If the estimate of the economic life changes, Based on the terms of employment, wages, salaries, social the future depreciation is adjusted. Book gains and losses from security and pension contributions are accounted for in the profit the incidental sale of intangible fixed assets are accounted for and loss account to the extent that they are due to the under depreciation. employees. 4.8 Depreciation of tangible fixed assets 4.6.2 Pensions Tangible fixed assets are depreciated over their expected Sanquin uses Pensioenfonds Zorg & Welzijn (pension fund for future useful life from the moment they are taken into use. the healthcare and social welfare sector) to administer its pension No depreciation is charged on land. If the estimate of the scheme in the Netherlands. At retirement age, eligible employees economic life changes, the future depreciation is adjusted. are entitled to a pension based on the average wages earned Book gains and losses from the incidental sale of tangible fixed over the years that the employees accrued pension with the assets are accounted for under depreciation. Zorg & Welzijn pension fund. 4.9 Financial income and expenses Interest income and interest expenses are time-weighted, taking into account the effective interest rate for the relevant assets and liabilities. 46

  • Page 47

    Annual Accounts 4.10. Tax on result from ordinary business operations In respect of receivables and liabilities with variable interest-rate The tax on the result is calculated on the result before tax in agreements, Sanquin is exposed to future cash flow risks; while in the profit and loss account, taking into account the exempt profit relation to fixed interest receivables and liabilities, Sanquin is components and investment and other facilities. exposed to market value risks. No financial derivatives have been contracted to hedge the 5. Financial Instruments and Risk Management interest rate risks ensuing from these receivables and liabilities. 5.1 Market risk 5.2 Credit risk 5.1.1 General Sanquin Blood Supply Foundation has no significant Sanquin Blood Supply Foundation is exposed to various financial concentrations of credit risk. Short shelf-life blood products are risks: price risks (including exchange rate risks, market risks and sold to Dutch hospitals. Long shelf-life blood products are only interest rate and cash flow risks), credit risks and liquidity risks. sold to customers that satisfy Sanquin’s creditworthiness test. The size of these risks in the daily operations does not require Products are sold on the basis of credit terms of 14 to 60 days. using financial instruments to hedge the risks. Financial risks are Additional securities, such as prepayments and guarantees, managed centrally by the executive support staff department, may be requested for large supplies, or credit insurance may Finance & Control, on the basis of the policy adopted by the be concluded. Executive Board. Sanquin Plasma Products realises a large part of its contract 5.1.2 Price risk manufacturing turnover from a limited number of contractors. Sanquin Blood Supply Foundation is exposed to risks related Creditworthiness tests for these contractors do not indicate a to raw material and energy prices. These risks are managed need to hedge this credit risk using financial instruments. by reducing the dependency on suppliers as much as possible, centralising procurement where possible and making long 5.3 Liquidity risk term price agreements with suppliers wherever possible. Sanquin Blood Supply Foundation uses several banks in order The starting point when entering into procurement relationships to gain access to a number of credit facilities. Where necessary, is to agree on price increases that fall within the margins of the further securities are provided to the banks to ensure the government regulation for price compensation for budgets in credit facilities are available. As of August 2015, Sanquin is the healthcare sector. bound to a bank covenant (see section 16: Long term liabilities for more information). 5.1.3 Exchange rate risk Sanquin Blood Supply mainly operates in the European Union and the United States of America. If significant long term supply obligations are entered into, such as the supply of Cinryze for the US market, price agreements are, in principle, made in euros, even if the supply is to countries outside the European Union. The remaining transactions in foreign currencies, both purchases and sales, are relatively limited and, consequently, the ensuing risks are not hedged. 5.1.4 Interest rate and cash flow risk Sanquin Blood Supply Foundation is exposed to interest rate risks on the interest-bearing receivables (in particular those under financial fixed assets and cash and cash equivalents) and interest- bearing long term and short term liabilities (including liabilities to credit institutions). Sanquin Annual Report 2015 47

  • Page 48

    Notes to the balance sheet over 10 years. In order to determine this 10 year term, the term used for positive goodwill was selected. 6. Intangible fixed assets On 15 May 2015, Sanquin Holding BV purchased 24.99% of On 24 August 2015, Euroclone BV purchased 24.99% of the shares in CAF-DCF CVBA for a sum of € 6.9 million. This the shares in CAF-DCF CVBA for a sum of € 12 million. The acquisition amount was based on the net asset value according difference between the acquisition amount and the net asset to CAF-DCF valuation principles (namely Belgian GAAP). This value of CAF-DCF CVBA according to Dutch GAAP, namely valuation is lower than the net asset value according to the € 9.1 million, was accounted for as goodwill in the balance valuation principles of these annual accounts, namely Dutch sheet. The goodwill will be depreciated over 10 years. GAAP. The difference in valuation is primarily driven by temporary This term is based on the average annual payback sum. differences, consequently negative goodwill is created. The negative goodwill will be released to the profit and loss accounts Movements in the intangible fixed assets were as follows: Goodwill Negative goodwill Total (x € 1,000.-) € € € Balance as at 1 January 2015 0 0 0 Acquisition of CAF-DCF CVBA stocks 2,909 -2,293 616 Depreciation of goodwill current financial year -103 0 -103 Release of negative goodwill current financial year 0 143 143 Balance as at 31 December 2015 2,806 -2,150 656 7. Tangible fixed assets Movements in the tangible fixed assets can be specified as follows: Land and Machines and Other fixed Fixed operating Total buildings installations operating assets assets in progress (x € 1,000.-) € € € € € Balance as at 1 January 2015 Acquisition prices or manufacturing costs 133,947 203,007 24,111 50,078 411,143 Accumulated depreciation -46,685 -139,996 -19,527 1 -206,207 Book values 87,262 63,011 4,584 50,079 204,936 Movements Investments 4,455 8,009 2,416 6,056 20,936 Movements 4,447 39,332 39 -43,817 1 Divestments -6,721 -28,095 -6,990 0 -41,806 Movement in depreciation 0 0 0 -1 -1 Depreciation -8,861 -20,302 -2,137 0 -31,300 Depreciation of divestments 6,721 28,095 6,990 0 41,806 Balance 41 27,039 318 -37,762 -10,364 Balance as at 31 December 2015 Acquisition prices or manufacturing costs 136,128 222,253 19,576 12,317 390,274 Accumulated depreciation -48,825 -132,203 -14,674 0 -195,702 Book values 87,303 90,050 4,902 12,317 194,572 Depreciation rates 0%-10% 10%-20% 20%-33% 0% 48

  • Page 49

    Annual Accounts Investments in projects that were still in progress as at the The current value of the fixed assets does not deviate significantly balance sheet date are shown in the column ‘Fixed operating from the book value. assets in progress’. After completion, these projects are accounted for as ‘Land and buildings’, ‘Machines and In 2015, the investments in tangible fixed assets that exceeded installations’ or ‘Other fixed operating assets’. The corresponding € 1.0 million were: write-down of the ‘Fixed operating assets in progress’ is shown Investments in tangible as a negative item under ‘Movements’. fixed assets (x € million) € A portion of the tangible fixed assets is financed using loans Renovation of Wytemaweg building for Blood Bank 2.9 for which securities have been issued (see also section 16: Renovation of building U for Research 2.1 Long term liabilities). Installations for Baxalta for CMO production 1.9 Optimisation of CIP distribution lines (Belgium) 1.4 The assets can be freely disposed of by Sanquin, with the Renewal of QC lab phase II (Belgium) 1.2 exception of the manufacturing facilities which are financed Renewal of QC lab Maroastraat 1.0 with the loan provided by Baxalta (see section 16: Long term liabilities for more information). 8. Financial fixed assets Movements in the financial fixed assets can be specified as follows: Participating Loans Total interests (x € 1,000.-) € € € Balance as at 1 January 2015 0 3,750 3,750 Investments 433 150 583 Result of participating interests 0 0 0 Divestments -433 -150 -583 Repayments current financial year 0 -375 -375 Repayment obligation 2016 0 -375 -375 Balance as at 31 December 2015 0 3,000 3,000 Participating interests In 2012, Sanquin acquired a financial interest in Xenikos BV Sanquin acquired numerous shares in Vitaleech Bioscience NV in in Nijmegen. Xenikos is a biotech company that developed a Rotterdam in the years 2000 to 2005, primarily as compensation T-Guard® experimental drug. T-Guard® is a drug for treating for products and services supplied for Vitaleech’s research. patients who have serious rejection problems following a Sanquin’s share interest was 11%, the value of which was fully transplant involving donor blood stem cells: Graft-Versus-Host written down in previous financial years due to major doubts Disease (GVHD). about the future profitability of the company. Sanquin holds 37.44% of the shares. Sanquin made an additional On 19 November 2015, Vitaleech Bioscience NV was wound up investment of € 0.4 million in Xenikos’ share capital in 2015. due to a lack of income. The winding up had no financial impact Due to Xenikos having negative equity of € 2.6 million as at on Sanquin in the financial year under review due to having been 31 December 2015 (including the negative result of € 1.5 million written down previously. over 2015), the interest in Xenikos was fully written down. In addition, Sanquin has issued a security deposit for Xenikos’ obligation arising from an innovation credit granted to Xenikos in the amount of € 2.3 million. Sanquin Annual Report 2015 49

  • Page 50

    Loans 9. Inventory A € 3.75 million loan provided to the Slotervaart Medical Centre 31 December 31 December 2015 2014 (MCS) is included under the financial fixed assets. MCS is a joint (x € 1,000.-) € € initiative of Sanquin, NKI-AVL, Slotervaart Hospital and Slotervaart Raw materials, consumables and 113,918 103,237 Nursing Home belonging to Cordaan, and it operates the shared semi-manufactures access roads and parking facilities. The loan was granted for the Contract manufacturing work in progress 19,847 12,802 construction of a new parking garage completed in 2014 to be Finished products and goods for resale 49,305 44,906 used by the staff and visitors of the four institutions. The term of 183,070 160,945 the loan is 10 years and it will be paid off on a straight-line basis over a period of 10 years at an interest rate of 4%. No securities have been provided for this loan. The valuation of the receivables Within the context of obsolete inventory, an inventory write-down at repayment value approximates the amortised cost price of the of € 18.7 million (2014: € 7.6 million) and a revaluation of the receivables. value of finished products and semi-manufactures of € 7.1 million (2014: € 1.9 million) were performed due to increasing prices On 8 December 2015, Sanquin issued a convertible loan of for raw materials. € 0.2 million to Xenikos. The term of the loan is 1 year at an interest rate of 15%. At the request of Xenikos, the loan and any The inventory can be freely disposed of by Sanquin. An exception to accrued interest can be converted into ordinary shares in Xenikos’ this is the work in progress involving contract manufacturing for capital. As Sanquin expects this request will be made, and third parties. In this situation, Sanquin’s contract party provides the because the value of the shares will be fully written down, plasma or intermediate products for fractionation itself. This plasma the value of the loan has already been written down to zero and the intermediate and end products created from it remain the for the sake of prudence. In addition, Sanquin is obliged to issue property of the contract party throughout the entire production a second convertible loan of € 0.2 million to Xenikos based process. The value added by Sanquin as at the balance sheet date on the achievement of future milestones. is accounted for as work in progress. Repayment obligations due within 12 months from the end 10. Receivables of the financial year are included under other receivables. 31 December 31 December 2015 2014 (x € 1,000.-) € € Trade receivables 82,342 74,438 Taxes and social security contributions 9,515 6,814 Other receivables, prepayments and 10,908 9,087 accrued income 102,765 90,339 The fair value of receivables approximates the book value, given the short term nature of the receivables and the fact that facilities for irrecoverability have been created where necessary. All the receivables have a remaining term of less than one year. Trade receivables 31 December 31 December 2015 2014 (x € 1,000.-) € € Trade receivables 82,920 74,976 Provision for doubtful debts -578 -538 82,342 74,438 50

  • View More

Get the full picture and Receive alerts on lawsuits, news articles, publications and more!