Bekaert NV

Annual Report (ESEF) • Mar 31, 2023

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Integrated Annual Report 2022 Bekaert’s Integrated Annual Report 2022 provides material information on Bekaert for the year ending 31 December 2022. It offers a comprehensive view on how we create value for our stakeholders through the progress we make on financial and non-financial performance indicators. The report is produced in accordance with IFRS and GRI standards, the obligations applicable to issuers of financial instruments admitted for trading on a regulated market, and guidelines of the Non-Financial and Corporate Sustainability Reporting Directive. Our approach puts the value and impact we create, as a company, in a broader perspective: beyond reporting, beyond financials, beyond tomorrow. You may notice something different about Bekaert in this report: we have launched our new ambition and purpose and with this comes a new visual identity that represents our brand in a way that unites our heritage with a new boldness. It is the start of a new chapter in our long history, with an ambitious value proposition, clear commitments in leading with a purpose, and a bold new brand style. Table of Contents part I: strategy AND PERFORMANCE Message from the Chairman and the CEO Bekaert at a glance About us The highlights of 2022: strong delivery on all priorities Four Business Units Creating value for our stakeholders Value creation model Our strategy Our leadership Our stakeholders Risk & Materiality Our performance in 2022 Financial performance Value chain Planet Knowledge People Communities part II: statements Corporate governance statements Board of Directors Committees of the Board of Directors Evaluation Executive Management Diversity Conduct policies Remuneration report Shares Control and ERM Financial statements Consolidated financial statements Consolidated income statement Consolidated statement of comprehensive income Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement Notes to the consolidated financial statements 1. General information 2. Summary of principal accounting policies 2.1. Statement of compliance 2.2. General principles 2.3. Balance sheet items 2.4. Income statement items 2.5. Statement of comprehensive income and statement of changes in equity 2.6. Alternative performance measures 2.7. Miscellaneous 2.8 Restatement effects 3. Significant accounting judgments and key sources of estimation uncertainty 3.1. Significant judgments in applying the entity’s accounting policies 3.2. Key sources of estimation uncertainty 3.3. Impact of macro-economic environment, climate and Russia 4. Segment reporting 4.1. Key data by reporting segment 4.2. Revenue by country 5. Income statement items 5.1. Net sales 5 6 8 9 10 12 15 16 18 22 32 34 38 39 45 50 57 64 70 76 77 79 81 82 83 84 85 86 105 113 126 127 127 128 129 130 132 133 133 134 134 135 137 146 146 147 147 148 151 151 152 152 154 155 158 159 159 5.2. Operating result (EBIT) by function 5.3. Operating result (EBIT) by nature 5.4. Interest income and expense 5.5. Other financial income and expenses 5.6. Income taxes 5.7. Share in the results of joint ventures and associates 5.8. Earnings per share 6. Balance sheet items 6.1. Intangible assets 6.2. Goodwill 6.3. Property, plant and equipment 6.4. Right-of-use (RoU) property, plant and equipment 6.5. Investments in joint ventures and associates 6.6. Other non-current assets 6.7. Deferred tax assets and liabilities 6.8. Operating working capital 6.9. Other receivables 6.10. Cash & cash equivalents and short-term deposits 6.11. Other current assets 6.12. Assets classified as held for sale and liabilities associated with those assets 6.13. Ordinary shares, treasury shares and equity-settled share-based payments 6.14. Retained earnings and other group reserves 6.15. Non-controlling interests 6.16. Employee benefit obligations 6.17. Provisions 6.18. Interest-bearing debt 6.19. Other non-current liabilities 6.20. Other current liabilities 6.21. Tax positions 7. Miscellaneous items 7.1. Notes to the cash flow statement 7.2. Financial risk management and financial instruments 7.3. Contingencies, commitments, secured liabilities and assets pledged as security 7.4. Related parties 7.5. Events after the balance sheet date 7.6. Services provided by the statutory auditor and related persons 7.7. Subsidiaries, joint ventures and associates Parent company information Annual report of the Board of Directors and financial statements of NV Bekaert SA Proposed appropriation of NV Bekaert SA 2022 result Appointments pursuant to the Articles of Association Alternative performance measures Auditor’s Report Environmental statements Energy CO2 and Auditor’s Report EU Taxonomy and Auditor’s Report Water Recycled input material Waste Chemical management Social statements Health & safety Communicating with and engaging our employees Highest ethical standards Embracing diversity New hires Turnover Performance management Social contributions & other community engagement programs part III: about this report Reporting principles Sustainability standards GRI Content Index Management 161 165 166 166 167 168 169 170 170 172 178 182 186 189 190 196 199 199 199 200 201 208 210 213 221 222 225 225 225 226 226 229 241 241 242 243 244 250 250 254 254 255 259 266 267 271 283 298 301 301 302 303 304 309 310 311 314 315 316 318 319 320 321 322 326 PART I Strategy and Performance Jürgen Tinggren Chairman Oswald Schmid CEO Message from the Chairman and the CEO - 7 - Bekaert Integrated Annual Report 2022 Dear Shareholder, Dear Reader, We are delighted to report another strong year of strategic progress and robust financial performance in 2022, despite the many global challenges. We achieved this by focusing on pricing to offset rapidly rising energy and material costs, by delivering business-mix improvements, capturing growth opportunities, and organizational efficiencies. We made important progress on our strategic transformation focusing on new growth markets, innovation, and sustainability. In promising growth areas such as Energy Transition, we secured important new orders for applications in green Hydrogen production and Floating Offshore Wind. Focusing on such segments with significant growth and higher value-creation potential strengthened the Group in 2022 and will contribute to future growth and profitability improvements. With the agreement to sell our Steel Wire Solutions businesses in Chile and Peru, we will further improve the business portfolio by reducing exposure to more commoditized and volatile markets. Sustainability is central to our transformation – both working to minimizing our impact and helping others to minimize theirs. Importantly Bekaert improved its safety record for the fifth year in a row and brought sustainability performance improvements in-line with ambitious targets. We are proud that our near-term and long-term greenhouse gas emissions reduction targets have been validated by the Science Based Targets initiative (SBTi). We are equally pleased that our external ESG ratings continue to improve and recognize the work undertaken across the business, this includes Bekaert being selected for inclusion in Euronext’s BEL ESG Index of the leading sustainable companies in Belgium. From a financial perspective, we delivered record levels of consolidated sales, which increased by 17% to € 5.7 billion. Underlying EBIT was € 459 million, a resilient performance considering challenging markets with price rises and efficiency gains broadly offsetting higher input costs and lower utilization. Our continued focus on working capital and cash generation resulted in a net debt to underlying EBITDA ratio of 0.7x at year-end 2022, demonstrating our resilient financial position. Based on these robust results, we are pleased to announce that the Board of Directors will propose to the Annual General Meeting of Shareholders in May a gross dividend of € 1.65 per share, representing an increase of 10% versus the previous year. In addition, the Board has approved another share buyback program in 2023 for Bekaert to repurchase and cancel outstanding shares of up to € 120 million. Moving forward, we are determined to continue the pace of transformation. We are making investments to accelerate growth in promising markets, both within our core technologies and beyond steel. We are increasing our resources in innovation and digitalization, to create more value for our customers. Whilst trading in 2023 has started well across all business units, economic uncertainties remain. The robust performance delivered in 2022 and the company’s strong financial position give us confidence in our ability to deliver further on our strategic priorities. We therefore continue to confirm our ambition to reach the mid-term targets (2022-2026) of organic sales growth of 3%+ CAGR and an underlying EBIT margin level of 9% to 11% through the cycle. We are grateful to our customers, business partners, and shareholders for their continued trust and support. We would like to thank all our employees for their contribution, energy, and above and beyond spirit. GRI 2-22 Oswald Schmid Chief Executive Officer Jürgen Tinggren Chairman of the Board of Directors Bekaert at a glance - 9 - Bekaert Integrated Annual Report 2022 About us Who we are Bekaert’s ambition is to be the leading partner for shaping the way we live and move, and to always do this in a way that is safe, smart, and sustainable. As a global market and technology leader in material science of steel wire transformation and coating technologies, Bekaert also applies its expertise to create new solutions with innovative materials and services for markets including new mobility, low-carbon construction, and green energy. Founded in 1880, with its headquarters in Belgium, Bekaert (Euronext Brussels, BEKB) is a global company whose 27 000 employees worldwide together generated close to € 7 billion in combined revenue in 2022. Information about our subsidiaries, joint ventures and associates is available in Part II: Statements - note 7.7 of the Financial statements. GRI 2-1, GRI 2-2, GRI 2-6 What we do Transforming steel wire and applying unique coating technologies form our core business. Depending on our customers’ requirements, we draw wire in different diameters and strengths, even as thin as ultrafine fibers of one micron. We group the wires into cords, ropes and strands, weave or knit them into fabric, or process them into an end product. The coatings we apply reduce friction, improve corrosion resistance, or enhance adhesion with other materials. We also pioneer with innovations beyond steel into new materials, new markets, services, and solutions. Expanding our field of play beyond steel will help us achieve our growth ambition in promising markets. GRI 2-1 How we work From making a positive impact with sustainable solutions and practices, to building a diverse and inclusive future, Bekaert is determined to improve life and create value for all stakeholders. We are convinced that the integrity, trust, agility, and boldness that bring our employees worldwide together as one team create the fundamentals of successful partnerships wherever we do business. Bekaert delivers on its sustainability strategy by developing and offering sustainable solutions, using materials and energy responsibly, conducting the highest business ethics standards, improving health and safety at the workplace, and engaging employees and business partners throughout the supply chain, always better together. GRI 2-1 - 10 - Bekaert Integrated Annual Report 2022 The highlights of 2022 strong delivery on all priorities Subsidiaries: 23 615 employees – 65 production sites – 10 main research & engineering sites Joint ventures in Latin America: 3 365 employees – 10 manufacturing plants Combined: 26 980 employees – 75 production sites – 10 main research & engineering sites - 11 - Bekaert Integrated Annual Report 2022 - 12 - Bekaert Integrated Annual Report 2022 Four Business Units Rubber Reinforcement Bekaert’s Rubber Reinforcement business unit develops, manufactures and supplies tire cord and bead wire products and solutions for the tire sector. To serve customers worldwide, the business unit has a global presence with manufacturing plants in EMEA, US, Brazil, India, South East Asia, and China. Our ambition Be the most advanced leader of innovative rubber reinforcement solutions that help our customers transform the industry sustainably Our business position and strategic focus •30% market share in the global tire cord market •Preferred technology partner to the tire industry •Solutions provider to new mobility challenges: –Enabling the shift towards electric vehicles –Safer, lighter, and sustainable materials •Global footprint – local presence •Agility and resilience to changing market dynamics Main applications Steel cord and bead wire for tires BU performance FY2022 € 2.20 billion in consolidated sales (up +7.0%1 versus 2021) • € 2.46 billion combined sales2 (up +10.2%) 8.0% underlying EBIT margin • 12.1% underlying EBITDA margin ¹ The Hose and Conveyor Belt activities have been moved to the business unit Specialty Businesses as from January 2022. Based on a pro-forma restatement excluding the effect of this move, sales of Rubber Reinforcement increased by 13% year-on-year. ² Combined sales are sales of fully consolidated companies plus 100% of sales of joint ventures and associates after intercompany elimination. For both Rubber Reinforcement and Steel Wire Solutions, this mainly includes the joint ventures in Brazil. GRI 2-6 Steel Wire Solutions Bekaert’s Steel Wire Solutions business unit develops, manufactures and supplies a very broad range of steel wire products and solutions for customers in sectors including energy & utilities, mining, construction, agriculture, automotive, and consumer goods. To serve customers worldwide, the business unit has a global presence with manufacturing plants in EMEA, US, Latin America, and Asia, and a sales and distribution network worldwide. Our ambition Serve customers with innovative, value adding solutions that help them improve their business performance Our business position and strategic focus •Strong positions in target markets •Deep knowledge of local market dynamics •Smart solutions provider to energy and utilities markets •Improvement of the business portfolio by moving beyond commodity markets Main applications Steel wire solutions for energy & utility markets, construction & infrastructure, agriculture, mining, automotive, and more BU performance FY2022 € 2.08 billion in consolidated sales (up +14.5% versus 2021) • € 3.04 billion in combined sales2 (up + 14.2%) 6.9% underlying EBIT margin • 9.3% underlying EBITDA margin - 13 - Bekaert Integrated Annual Report 2022 Specialty Businesses The business unit Specialty Businesses comprises four sub-segments¹ that serve different markets. These sub-segments are Building Products, Fiber Technologies, Combustion Technologies, and Hose and Conveyor Belt. The characteristics all four have in common are their high-end portfolio of advanced technologies, and their continuous search for lightweight solutions and environmentally-friendly applications. Building Products develops and manufactures products that reinforce concrete, masonry, plaster and asphalt. Fiber Technologies offers high-end products for filtration, heat-resistant textiles, electroconductive textiles, hydrogen electrolysis technologies, the safe discharge of static energy, sensor technologies, and the semiconductor business. Combustion Technologies targets heating markets with environmentally-friendly gas and hydrogen burners and residential and commercial heat exchangers. The Hose and Conveyor Belt activities develop and supply reinforcement solutions for rubber hoses and belts. Our ambition Be the leading solutions provider in technologies that contribute to a cleaner world Our business position and strategic focus •40% market share in concrete reinforcement fibers •40% market share in thin metal fibers •Solutions provider to sustainable and digital applications: –Low-carbon concrete reinforcement –Light-weight materials –Hydrogen power technologies –RFID and sensor technologies •Strong focus on research & innovation Main applications •Dramix® steel fibers for low-carbon concrete reinforcement •Thin metal fibers for filtration, Currento® fiber media for hydrogen electrolysis technologies, RFID tags •Low and zero-emission gas burners and heat exchangers •Hose reinforcement wire and conveyor belt reinforcement applications BU performance FY2022 € 766 million in consolidated sales (up +61.1%1 versus 2021) 16.7% underlying EBIT margin • 19.5% underlying EBITDA margin 1 See footnote Rubber Reinforcement. Excluding the effect of the move of the Hose and Conveyor Belt activities, the segment's revenue increased by 30%. GRI 2-6 Bridon-Bekaert Ropes Group Bridon-Bekaert Ropes Group is committed to be the leading innovator and supplier of the best performing ropes and advanced cords (A-Cords) for its customers worldwide. The unique combination of technologies in steel wire ropes, synthetic ropes and A-Cords enables strong differentiation in high-end markets. BBRG-ropes has a leading position in a very wide range of sectors, including surface and underground mining, offshore and onshore energy, crane & industrial, fishing & marine, and structures. The A-Cords business of BBRG develops and supplies fine steel cords for elevator and timing belts used in construction and equipment markets respectively, window regulator and heating cords for the automotive sector, and Armofor® thermoplastic tapes for light-weight pipes in energy markets. Our ambition Be the leading innovator and premier solutions provider with the best performing ropes and advanced cords globally Our business position and strategic focus •Strong positions in target markets •Advanced technology leadership and digital services: –Ropes 360 services enabling continuous monitoring –Twin-modeling of new product applications –Elevator hoisting simulation technologies •Growing presence in floating offshore wind projects •Significant improvement of the business portfolio and footprint •Exit from commodity markets with low value adding opportunities Main applications •Mission-critical steel and synthetic ropes for mooring, hoisting, and structures •Advanced cords for elevators, window regulators, timing belts, and pipe armoring BU performance FY2022 € 585 million in consolidated sales (up +21.6% versus 2021) 10.3% underlying EBIT margin • 16.0% underlying EBITDA margin Creating value for our stakeholders - 16 - Bekaert Integrated Annual Report 2022 Value creation model¹ Sustainability is an integral part of the Bekaert strategy. We are committed to create value for all our stakeholders by delivering on both financial and non-financial objectives. In this report we describe how we convert, through the implementation of our strategy, the resources we invest (‘inputs’) into sustainable value (‘outputs & impact’) for our shareholders, customers, employees, communities, and other stakeholders. 1 Based on the framework Guidelines of Value Reporting Foundation (International Reporting Council (IIRC) & Sustainability Accounting Standards Board (SASB)) The resources we invest Strong cash generation over the past years has enabled us to free up cash for value-creating investments. In 2022 we invested € 171 million in capital expenditure (PP&E), € 15 million in intangible investments (related to the digital transformation), and € 70 million in Research & Innovation (R&I) activities (before deduction of grants and tax credits). We sourced materials and services from 16 000 suppliers globally and employ 27 000 people (23 615 in consolidated entities) in 43 countries in the world, including manufacturing sites in 25 countries and additional sales and distribution facilities in 18 more countries. We invested in developing sustainable solutions and digital manufacturing systems and raised our sustainability ambitions and targets in line with the transition to a low-carbon society. We continued to invest in health & safety and learning & development, and we extended our digital capabilities to improve data insights and customer services. The value we create 2022 marked a record year in revenue (up +17% up from 2021). Underlying EBITDA (€ 654 million) and underlying EBIT (€ 459 million) delivered lower but solid profitability margins despite the challenging market conditions. Committed to return value to our shareholders, the Board of Directors proposed to distribute a dividend of € 1.65 per share (up +10%) and approved the continuation of the share buyback program up to a total of € 120 million. This will lead to a total shareholder return (TSR) of € 210 million related to the performance of 2022, more than tenfold the TSR related to base year 2019. We serve 13 500 customers in 130 countries in the world. Our investments in research and innovation added 19 first patent filings in 2022, which resulted in a portfolio of patents and patent applications of more than 2 100. 22 partnerships with academic and research institutes help accelerate our innovation efforts and more than 85% of our Research & Innovation project list target distinct benefits in sustainability. Efforts to reduce our carbon footprint are ongoing. GHG emissions Scope 1 and 2 reduced by 8.3% compared to 2021 and by 7.8% compared to base year 2019. GHG emissions Scope 3 reduced by 8.2% compared to 2021 but increased by 2.3% compared to base year 2019 (combined data, including joint ventures) because of an expansion of emission disclosures as of 2022. GHG intensity ratios Scope 1 and 2 increased due to the significant decrease in production volumes in 2022. 100% of steel-based scrap returns to the steel mills for recycling. € 81 million in income taxes were paid in the countries where we are active and our social engagement and disaster relief contributions amounted to approximately € 800 000 in 2022. Continued priority actions in health and safety led to a reduction of safety incident rates for the fifth consecutive year. All managers and salaried professionals sign off the Code of Conduct annually. Our focus on diversity & inclusion, training and development, and other employee engagement initiatives drive the 'dare to go beyond' spirit and strong delivery and engagement of our teams worldwide. How we convert the resources we use into the value we create is described in the next chapter ‘Our Strategy’. - 17 - Bekaert Integrated Annual Report 2022 2 Joint ventures included 3 23 615 in consolidated entities + 3 365 in joint ventures = 26 980 combined 4 Total Recordable Incident Rate and Lost-Time Incident Frequency Rate 2022 versus 2021 - 18 - Bekaert Integrated Annual Report 2022 Our strategy Our ambition is to be the leading partner for shaping the way we live and move - safe, smart, sustainable. We focus on strengthening our core businesses as well as on growing beyond steel with lighter, more sustainable, and more intelligent solutions. Our pioneering spirit enables us to explore, develop, and drive innovations that make a positive difference in people’s lives. All of this is reflected in our purpose: establishing the new possible. We use the analogy of a compass as our guide to stay on course and move forward towards our goals. Bekaert’s Beyond Compass is double-sided as it guides us in both our strategy and our culture. The strategy compass aligns towards our purpose and ambition to make a positive difference for our stakeholders. It clarifies our field of play where our unique strengths are most valuable, and it confirms the facets of our strategy to create successful outcomes for all. We not only want to strengthen our core, but also want to inspire creativity beyond steel to pioneer into new materials, new markets, services and solutions. A set of measurable key performance indicators have been defined for each of the goals we have set ourselves. They are clustered in five categories: customer experience, innovation pipeline, sustainable solutions, digital impact, and financial performance. The culture compass guides us to be an employer of choice for our current and future team members and to be the leading partner for our other stakeholders. It is focused on what we believe matters most to put people first: ensuring no harm to anyone, nurturing people engagement, enabling talent growth and creating an inclusive environment where diversity flourishes. The behaviors we expect from every member of our team will help us deliver on these goals and will unlock the full potential of our people and of the company. Our values bring us together as one global team ‘better together’. They are the foundation of our culture and way of working. Our four values are: integrity, trust, agility, and boldness and they were co-created with our employees. Our strategy has three facets to create outcomes for long-term positive progress that describe the path we take to achieve our ambition: •We perform to excel in all our current business activities. •We bring digital solutions, innovation, and sustainability to transform our field of play and how we work. •We grow organically and through acquisitions and grow ourselves to grow our business. GRI 2-22 Strategy Compass Culture Compass - 19 - Bekaert Integrated Annual Report 2022 We perform Strong on execution, we made good progress in improving our strategic market position and business portfolio. Sales increased to the highest level in the history of Bekaert. The sales growth was driven by the expansion of value-adding business opportunities and by ensuring strong pricing discipline. We delivered robust profitability and strong cash conversion, despite very challenging market conditions. Our teams realized a breakthrough in safety performance in 2022. Safety investments, dedicated trainings, and a much higher level of awareness and discipline, together resulted in a much better safety outcome. Customer recognition Bekaert’s performance is measured in terms of progress on a set of financial and non-financial goals. In measuring progress on our excellence goals, we take into account the feedback from customers. In 2022 we have been honored with a number of highly valued customer awards. Among others, Bekaert was recognized for technical collaboration, innovation, sustainable development, and excellent partnership. We transform In 2022 we continued to improve our business portfolio and further optimized our footprint, including the consolidation of BBRG's manufacturing set-up in North America and EMEA. Post balance sheet date, we announced the agreement reached on the sale of Bekaert's stake in the Steel Wire Solutions businesses in Chile and Peru, which is another important strategic step in the ongoing transformation of Bekaert, as it will reduce the Group's exposure to more commoditized and volatile markets, while increasing its positioning in new, faster growing markets, particularly in new mobility, green energy, and low-carbon concrete solutions. The digitalization of our business processes and the expansion of our digital offering are ongoing and will be accelerated in future years. We established a long-term sustainability strategy aimed at raising our ambitions and delivering upon the decarbonization targets that we commit to. Our emission reduction targets have been approved by SBTi in December 2022. We are raising our investments in research and innovation to strengthen our technology leadership in our core markets and to develop new capabilities beyond our current field of play. Bekaert wins ‘Tire Manufacturing Innovation of the Year’ award In June 2022, Tire Technology International awarded Bekaert in recognition of scientific and technology excellence in tire manufacturing, more specifically for our cobalt-free solution for steel cord adhesion, at the Tire Technology Expo 2022 in Hannover, Germany. - 20 - Bekaert Integrated Annual Report 2022 Progressing sustainably Based on the progress made in sustainability performance and transparency in disclosures, Bekaert is included in the newly established Euronext BEL ESG index, which counts 20 issuers. We made good progress in the label ranking of various sustainability standards, including CDP climate change, ISS-ESG, Gaïa (EthiFinance), Sustainalytics, and EcoVadis. As part of our sustainability strategy Bekaert actively invests in renewable energy: in 2022 Bekaert announced the investment of Spain's largest solar park on the factory grounds of Ubisa (Industrias del Ubierna SA), Bekaert's manufacturing plant in Burgos, Spain. The plant projects to consume 95% of the generated electricity. Bekaert also invested in an additional PPA in the US that will allow the company to source 100% of its power needs from renewable energy, and a third PPA in India which will lead to a total CO2 reduction by more than 60% of Bekaert’s operations in India. GRI 2-22 We grow We are actively exploring opportunities for growth, both in existing and adjacent markets, and apply capital allocation criteria that ensure accretive growth. In 2022 we focused on tactical acquisitions and partnerships to build a growing presence in offshore wind, utilities, digital monitoring expertise, and green hydrogen technologies. By investing in successful partnerships, we expand our leadership position in these promising growth markets and accelerate the development and go-to-market of spearheading innovations. Further growth will be supported by a higher level of research and capacity investments and by exploring additional partnerships and inorganic growth opportunities that will allow us to further grow our market and technological leadership position. We also grow by creating a diverse and inclusive workplace that enables and stimulates our people to develop and grow, so they dare to go beyond in unlocking their full potential. We attract new talent that helps us transform faster in the areas we believe will make Bekaert even more successful in the future. Partnering for growth In 2022, Bekaert invested in Pajarito Powder and TFI Marine, two successful start-up companies with differentiating technologies that are now scaling up to the industrialization phase. Partnering with and investing in these technology pioneers helps all partners grow. Pajarito Powder (Albuquerque, US) is a leader in the development and commercialization of advanced electrocatalysts for electrolyzers that enable green energy production. Bekaert has a leadership position in porous transport layers for electrolysis technologies with the brand name Currento®. The partnership with Pajarito Powder will accelerate the innovation and scale-up of advanced solutions for the green hydrogen market. - 21 - Bekaert Integrated Annual Report 2022 TFI Marine (Dublin, Ireland) is a leading mooring innovator in floating offshore wind. The company has developed and successfully demonstrated SeaSpring, a game-changing polymer-based mooring component that significantly reduces the mooring loads and fatigue experienced by floating platforms. Bekaert's investment in TFI Marine creates strong synergies with the synthetics ropes business of Bridon-Bekaert Ropes Group. The partnership also launches a commercial collaboration whereby a smart solution of BBRG synthetic ropes equipped with TFI load reduction devices will be introduced to the market. Great engagement at global brand reveal In December 2022 we revealed our new brand identity with a global event hosted in Belgium and co-hosted from six locations involving colleagues from all corners of the world. It was the perfect opportunity to demonstrate how we establish the new possible. Team members of the six co-hosting locations brought interesting stories of how they interpret our new ambition and purpose to achieve future business success. Attendees got together at well-received watch parties in all regions, often meeting colleagues they hadn't seen before, which added to the overall positive vibe and enthusiasm. For more information and details on our performance during 2022, we refer to the performance updates in this chapter and to the detailed statements on financial and non-financial disclosures in Part II of this report. - 22 - Bekaert Integrated Annual Report 2022 Our leadership Board of Directors The main tasks of the Board of Directors are to determine the Group’s strategy and general policy, and to monitor Bekaert’s operations. This includes the Group's sustainability strategy and progress monitoring. The Board of Directors is the company’s prime decision-making body except for matters reserved by law or by the articles of association to the General Meeting of Shareholders. The Board of Directors currently consists of eleven members. Their professional profiles cover different areas of expertise, such as law, business, industrial operations, finance & investment banking, HR, consultancy, ESG, innovation and compliance. All information about the Board of Directors (nomination & selection, committees, remuneration) is available in Part II: Corporate Governance Statements of this report. GRI 2-9, GRI 2-10, GRI 2-11, GRI 2-12, GRI 2-15, GRI 2-16, GRI 2-17, GRI 2-18, GRI 2-19, GRI 2-20 Composition of the Board of Directors Jürgen Tinggren, Chairman ¹ Oswald Schmid, CEO Gregory Dalle Henriette Fenger Ellekrog ¹ Christophe Jacobs van Merlen Maxime Parmentier Eriikka Söderström ¹ Caroline Storme Emilie van de Walle de Ghelcke Henri Jean Velge Mei Ye ¹ 1 Independent Directors Changes in 2022 The Annual General Meeting of Shareholders of 11 May 2022 approved the appointment of Maxime Parmentier as Director, and the reappointment of Oswald Schmid as Director and Mei Ye as independent Director, for a term of one year until the Annual General Meeting to be held on 10 May 2023. Charles de Liedekerke and Hubert Jacobs van Merlen retired in line with the retirement age for Directors as applied by Bekaert. Colin Smith decided to retire and did not seek reappointment. The Board of Directors is grateful to Charles de Liedekerke, Hubert Jacobs van Merlen, and Colin Smith for their substantial contributions as Directors of the Company. As a result of these changes, the number of Directors decreased from thirteen to eleven. - 23 - Bekaert Integrated Annual Report 2022 Jürgen Tinggren CHAIRMAN OF THE BOARD Independent Director Swedish, °1958 FIRST APPOINTED May 2019 EDUCATION Stockholm School of Economics New York University Leonard N Stern School of Business EXPERIENCE Jürgen Tinggren was appointed independent Director and Chairman of the Board of Directors of Bekaert on 8 May 2019. He started his career in 1981 as Senior Associate with Booz Allen Hamilton and joined Sika AG in 1985 to take on various managerial and executive functions of increasingly broader scope and responsibility. In 1997, Jürgen Tinggren joined the Executive Committee of Schindler Holding AG. In 2007, he was appointed Chief Executive Officer and President of the Group Executive Committee of Schindler. He became a member of the Board of Directors in 2014. OTHER MANDATES Member of the Board of Johnson Controls, Inc. EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2023 COMMITTEES Chairman of the Nomination & Remuneration Committee Member of the Audit, Risk & Finance Committee Oswald Schmid CHIEF EXECUTIVE OFFICER MEMBER OF THE BOARD Austrian, °1959 FIRST APPOINTED May 2020 EDUCATION University of Applied Sciences of Vienna EXPERIENCE Oswald Schmid joined Bekaert as COO on 1 December 2019. On 12 May 2020, he took the helm as interim CEO and on 2 March 2021 he was appointed CEO. Oswald Schmid began his career with Semperit in 1984, before moving to Continental in 1990 as Head of Purchasing and later on as General Manager for a ContiTech Hose business. In 2002, Oswald Schmid joined Schindler as Chief Purchasing Officer and held various regional CEO as well as area management positions. From 2013, Oswald Schmid served as a member of the Group Executive Committee of Schindler responsible for the Europe North Business and later for the New Installation Business and Global Supply Chain. In 2017, Oswald Schmid moved to the Kalle Group to become CEO and Managing Director. OTHER MANDATES Member of the Supervisory Board of Wienerberger EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2023 Non-native: nationality other than the country where the registered office of the Company is located, i.e. Belgium. - 24 - Bekaert Integrated Annual Report 2022 Gregory Dalle MEMBER OF THE BOARD French, °1976 FIRST APPOINTED May 2015 EDUCATION Université Paris-Dauphine Cass Business School EXPERIENCE Gregory Dalle is a Managing Director at Credit Suisse in the Investment Banking & Capital Markets Division, based in London. He joined Credit Suisse in 2000 as a member of the EMEA Mergers & Acquisitions Group. Gregory Dalle moved to the Industrials Group in 2014 and was appointed Head of EMEA Industrials Group in 2017 and Global co-Head of Diversified Industrials in 2021. He has investment banking coverage responsibility for a number of Credit Suisse's major industrial clients, advising them on a broad range of M&A, Equity and Debt transactions. EXPIRATION OF MANDATE Annual General Meeting of 2023 Henriette Fenger Ellekrog MEMBER OF THE BOARD Independent Director Danish, °1966 FIRST APPOINTED May 2020 EDUCATION Copenhagen Business School, INSEAD, London Business School and Wharton Business School EXPERIENCE Henriette Fenger Ellekrog is Chief Human Resources Officer at Ørsted. She started her career at Peptech A/S where she became Director of Administration and Personnel. Next, she took up several consultancy and management functions at Mercuri Urval A/S. Henriette Fenger Ellekrog continued her career at TDC in several executive HR roles before moving to SAS AB as Executive VP HR. More recently, she headed the HR office at Danske Bank A/S. OTHER MANDATES Member of several advisory boards and committees EXPIRATION OF MANDATE Annual General Meeting of 2025 COMMITTEES Member of the Nomination & Remuneration Committee Christophe Jacobs van Merlen MEMBER OF THE BOARD Belgian, °1978 FIRST APPOINTED May 2016 EDUCATION Free University of Brussels Ecole Centrale Lille (Ingénieur Généraliste) EXPERIENCE Christophe Jacobs van Merlen is currently Managing Director at Bain Capital Europe and member of the Leadership team and member of different board, audit, operating and M&A committees. He plays a leading role in a variety of investments at Bain Capital. He joined Bain Capital Europe, LLP (London) in 2004. Christophe Jacobs van Merlen was previously a Consultant at Bain & Company in Brussels, Amsterdam, and Boston, where he provided strategic and operational advice to private equity, business services, industrial, and financial services clients. EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2024 COMMITTEES Member of the Nomination & Remuneration Committee - 25 - Bekaert Integrated Annual Report 2022 Maxime Parmentier MEMBER OF THE BOARD Director Belgian, °1982 FIRST APPOINTED May 2022 EDUCATION Catholic University of Louvain Esade-CEMS Business School of Barcelona Columbia University of New York EXPERIENCE Maxime Parmentier is founder and CEO of Birdie Care Services Ltd, a London-based health technology scale-up aimed at improving the lives and care for the elderly. He started his career in 2008 with McKinsey & Company before joining Riaktr. In 2013, Maxime Parmentier moved to The Global Fund to fight AIDS, tuberculosis and malaria, where he took roles of increasing responsibility. Before establishing Birdie in 2017, he founded and headed Wambo, a health e-marketplace, and he worked for Kamet Ventures (AXA). EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2023 Eriikka Söderström MEMBER OF THE BOARD CHAIR OF THE AUDIT, RISK AND FINANCE COMMITTEE Independent Director Finnish, °1968 FIRST APPOINTED May 2020 EDUCATION University of Vaasa EXPERIENCE Eriikka Söderström has a strong finance background having worked in many internationally operating corporations. She started her career in Nokia where she spent 14 years in different finance roles in Nokia Networks. Her last positions there were as the interim CFO of Nokia Networks and Corporate Controller of Nokia Siemens Networks. Eriikka Söderström also worked as the CFO of Oy Nautor Ab, Vacon Plc and Kone Corporation, and was the CFO of F-Secure, a cyber security company, from 2017 until September 2021. OTHER MANDATES Member of the Board of Directors of Valmet and Chairman of the Audit Committee, member of the Board of Directors and Chairman of the Audit Committee of Kempower, member of the Board of Directors of Amadeus IT Group EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2025 COMMITTEES Chair of the Audit, Risk & Finance Committee Caroline Storme MEMBER OF THE BOARD Belgian,°1977 FIRST APPOINTED May 2019 EDUCATION Solvay Management School, Free University of Brussels, and INSEAD France and Singapore EXPERIENCE Caroline Storme holds the position of R&D Finance Lead Neurology at UCB in Belgium. She started her career with Deloitte Consulting in 2000 in Belgium. Caroline Storme worked at Bekaert as financial controller from 2004-2006 before she moved to Amtech, IGW based in Suzhou, China where she was appointed CFO. She joined UCB in 2012, first in controlling functions before heading Asian global business services, based in Shanghai, China, and since 2017 in various R&D financial functions at UCB Headquarters in Brussels, Belgium. EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2023 - 26 - Bekaert Integrated Annual Report 2022 Emilie van de Walle de Ghelcke MEMBER OF THE BOARD Belgian, °1981 FIRST APPOINTED May 2016 EDUCATION Catholic University of Louvain, Free University of Brussels and London School of Economics EXPERIENCE Emilie van de Walle de Ghelcke is Head of Legal at Sofina, a family-controlled investment company listed on Euronext Brussels (BEL20 and BEL ESG indices). Before joining Sofina, Emilie was a member of the Brussels Bar since 2005. She joined the corporate and finance practice of Freshfields Bruckhaus Deringer in 2009 where she advised Belgian and international clients on domestic and cross-border public and private M&A transactions, corporate governance matters, corporate restructurings, joint ventures and financial law advisory. Emilie van de Walle de Ghelcke joined Sofina in 2016. As Head of Legal and Compliance Officer, her practice mainly covers M&A transactions, advice on corporate governance and listed company matters, group compliance and legal matters as well as external communication. She is also part of the core team leading the implementation of Sofina's ESG strategy. EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2024 Henri Jean Velge MEMBER OF THE BOARD Belgian, °1956 FIRST APPOINTED May 2016 EDUCATION Catholic University of Louvain and IMD EXPERIENCE Henri Jean Velge started his career in 1981 at Shell (The Netherlands) as well-site petroleum Engineer. He moved to Brunei in 1982 as Operations Manager and resigned from Shell in 1985 to obtain an MBA degree. In 1987 Henri Jean Velge joined Bekaert as Executive Director of Industrias Chilenas de Alambre (Chile). In 1991 he moved to the United States and became Corporate Vice President Wire Americas in June 1994. In 2001 he was appointed Executive Vice President and became member of the Bekaert Group Executive, responsible for the global wire activities. From 2013 till mid 2014 he was responsible for all the business platforms. OTHER MANDATES Chairman of Stichting Administratiekantoor Bekaert, representing the interests of the reference shareholder of Bekaert EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2024 Mei Ye MEMBER OF THE BOARD Independent Director US citizen, °1966 FIRST APPOINTED May 2014 EDUCATION University of North Carolina at Chapel Hill Fudan University in Shanghai EXPERIENCE Mei Ye is an independent Corporate Director and international business advisor, based in Shanghai. She serves on the Board of Jamieson Wellness, a Canadian public company. She is also a senior advisor to Eurazeo, a French investment company. Mei served on the Board of Shenwan Hongyuan Group in China (2015 to 2021), after serving on the Board of Shenyin & Wanguo (2012 to 2014). She was a senior advisor to McKinsey & Company (2013 to 2022), and a senior expert and consultant with the firm (2003 to 2013). Mei started her career as strategy manager and analyst for various companies in the US, including ETRADE Financial (now a subsidiary of Morgan Stanley), Gartner Group, and SPR Associates. OTHER MANDATES Independent Director of the Board of Jamieson Wellness Inc and senior advisor to Eurazeo; Advisor to Rhodes Trust of Oxford University and final selection committee of Global Rhodes Scholars. EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2023 - 27 - Bekaert Integrated Annual Report 2022 Bekaert Group Executive The Bekaert Group Executive (BGE) assumes the operational responsibility for the Company’s activities and acts under the supervision of the Board of Directors. The BGE is chaired by Oswald Schmid, Chief Executive Officer. GRI 2-9, GRI 2-13 Organizational structure The composition of the Bekaert Group Executive reflects the organizational structure with four Business Units and four Global Functional Domains. In 2022, the Business Units and Global Functions were led by the following Executives. Business Units •The Business Unit Rubber Reinforcement was led by Arnaud Lesschaeve, Divisional CEO Rubber Reinforcement. •The Business Unit Steel Wire Solutions is led by François Desné, Divisional CEO Steel Wire Solutions. •The Business Unit Specialty Businesses is led by Yves Kerstens, Divisional CEO Specialty Businesses and Chief Operations Officer. •Bridon-Bekaert Ropes Group (BBRG) is led ad interim by Oswald Schmid, CEO. The Business Units have global P&L accountability for strategy and delivery in their distinct areas and therefore have dedicated production facilities and commercial and technology teams within their respective organization. This helps them develop a customer-centric approach aligned with the specific needs and dynamics of their markets. GRI 2-13 Global Functions •Taoufiq Boussaid, Chief Financial Officer •Kerstin Artenberg, Chief Human Resources Officer •Juan Carlos Alonso, Chief Strategy Officer •Yves Kerstens, Chief Operations Officer (combined with Divisional CEO role above) •Gunter Van Craen, Chief Digital and Information Officer The Functions take a role as strategic business partners, accountable for providing specific expertise and services across the Group, and for ensuring the business has the right capability to deliver on short- and long-term goals. GRI 2-13 Changes during 2022 On 5 September 2022, François Desné joined Bekaert as Divisional CEO Steel Wire Solutions and became a member of the BGE. François Desné succeeded Stijn Vanneste who left the company in August 2022. On 1 June 2022, Gunter Van Craen, Chief Digital and Information Officer at Bekaert since 2020, became a member of the Bekaert Group Executive. Curd Vandekerckhove resigned as Divisional CEO Bridon-Bekaert Ropes Group (BBRG) in September 2022. Changes in 2023 * The composition of the BGE has changed in early 2023. On 1 March 2023, Mrs Annie Xu-Huhmann joined Bekaert as Divisional CEO Rubber Reinforcement and became a member of the Bekaert Group Executive, succeeding Arnaud Lesschaeve who left the company at the end of February. Annie's curriculum vitae is available on the Bekaert website. - 28 - Bekaert Integrated Annual Report 2022 Oswald Schmid CHIEF EXECUTIVE OFFICER Austrian, °1959 JOINED BEKAERT 2019 EDUCATION Engineering University of Applied Sciences of Vienna EXPERIENCE Oswald Schmid joined Bekaert as COO on 1 December 2019. On 12 May 2020, he took the helm as interim CEO and on 2 March 2021 he was appointed CEO. Oswald Schmid began his career with Semperit in 1984, before moving to Continental in 1990 as Head of Purchasing and later on as General Manager for a ContiTech Hose business. In 2002, Oswald Schmid joined Schindler as Chief Purchasing Officer and held various regional CEO as well as area management positions. From 2013, Oswald Schmid served as a member of the Group Executive Committee of Schindler responsible for the Europe North Business and later for the New Installation Business and Global Supply Chain. In 2017, Oswald Schmid moved to the Kalle Group to become CEO and Managing Director. As per the issue date of this report, Oswald Schmid combines his role as CEO of Bekaert with the ad interim role as Divisional CEO of Bridon-Bekaert Ropes Group. Taoufiq Boussaid CHIEF FINANCIAL OFFICER French and Moroccan, °1971 JOINED BEKAERT 2019 EDUCATION Mathematics & Economics - Finance French College of Rabat Institut Supérieur de Gestion of Paris EXPERIENCE Taoufiq Boussaid started his career in international finance with an initial 10-year period as Audit Manager with Ernst & Young in France and The Coca-Cola Company in the US. From 2004 to 2007, he held several finance roles with United Technologies Corporation, first as Corporate Controller EMEA and subsequently as CFO for their Carrier Heating Systems business in Europe. In 2007, Taoufiq joined Bombardier Transportation, where he progressively moved up through the finance organization in different geographies to his most recent position of Vice President Finance for EMEA and Asia Pacific. He has also held operational responsibilities, running the French and North African businesses of Bombardier Transportation. Non-native: nationality other than the country where the registered office of the Company is located, i.e. Belgium. - 29 - Bekaert Integrated Annual Report 2022 Juan Carlos Alonso CHIEF STRATEGY OFFICER Mexican, °1974 JOINED BEKAERT 2019 EDUCATION Engineering - MBA Universidad Panamericana of Mexico City Stanford Graduate School of Business EXPERIENCE Juan Carlos Alonso began his career in 1998 with the Boston Consulting Group. In 2006, he joined CEMEX to become Global Corporate Strategic Planning Manager, based in Spain. He moved to the Comex Group in 2010 as Vice President of Sales & Operations for the US Western Region, before joining Lhoist Group where he held various business development and strategy leadership positions with increasing responsibility and scope. In 2017, Juan Carlos moved to the Imerys Group as Head of the Americas and development regions for the Monolithic Refractories division and, in parallel, as Global Head of Strategy, Business Development and Marketing for the High Temperature Solutions business. Kerstin Artenberg CHIEF HUMAN RESOURCES OFFICER German, °1972 JOINED BEKAERT 2021 EDUCATION East Asian Economics - Strategic HR Management University of Duisburg-Essen University of Applied Sciences of Zürich EXPERIENCE Kerstin Artenberg began her career in communication and marketing roles, holding several leadership positions at Körber AG and Daimler AG. In 2007, Kerstin joined Borealis in Austria as External Communications Manager and soon after assumed the role of Director Communications. From 2010 onwards, she gradually expanded her responsibilities towards HR functions and in 2016, she took on the role of Vice President Human Resources & Communications. In 2020, she joined the newly established Executive Committee. Throughout her career, Kerstin has driven cultural transformations with a focus on developing organizations which provide purpose and deep development opportunities for their employees. Gunter Van Craen CHIEF DIGITAL AND INFORMATION OFFICER Belgian, °1970 JOINED BEKAERT 2020 EDUCATION Commercial Engineering - Accountacy and Auditing - Computer Auditing Catholic University of Louvain University of Antwerp EXPERIENCE Gunter Van Craen started his career in internal auditing at KBC. In 2003, he joined Johnson & Johnson where he took on several IT and finance management functions of increasingly broader scope and responsibility. Initially in finance roles, Gunter moved to global IT functions and became CIO for the integration of Crucell into Janssen Pharmaceutica and subsequently global VP IT Pharma R&D. His last position before joining Bekaert was SVP IT for technology services at J&J, covering all IT related services across EMEA, Latin America and Asia. - 30 - Bekaert Integrated Annual Report 2022 Yves Kerstens DIVISIONAL CEO SPECIALTY BUSINESSES CHIEF OPERATIONS OFFICER Belgian, °1966 JOINED BEKAERT 2021 EDUCATION Engineering - Industrial Management Catholic University of Louvain INSEAD Business School of Paris EXPERIENCE Yves Kerstens started his career in supply chain roles in the manufacturing industry before he moved to Ernst & Young (1996) and later Capgemini (2001) as an advisor to the trade & industry sector. In 2005, he joined Bridgestone Corporation where he took on executive functions of increasingly broader scope and responsibility in EMEA and Asia Pacific, as well as global corporate governance roles as Vice President & Senior Officer of Bridgestone Corporation and Chairman of the global digital solutions and supply chain committee. In 2018, Yves joined Axalta Coating Systems, where he most recently held the role of Vice President Axalta and President EMEA. Arnaud Lesschaeve DIVISIONAL CEO RUBBER REINFORCEMENT French, °1969 JOINED BEKAERT 2019 EDUCATION Finance & Business Administration - Purchasing Dauphine University of Paris M.A.I. Management School of Bordeaux EXPERIENCE Arnaud Lesschaeve began his career with Valeo in 1994, first in quality and later as purchasing manager. He gained additional expertise in the procurement, operations and supply chain domains during his 8 years as a consultant with KPMG and AT Kearney respectively. In 2003, Arnaud joined Faurecia and took on several executive positions in purchasing before he was appointed Asia Division VP. From 2013 to 2018, he extended his career in the automotive supply sector at GKN Driveline, initially as COO, then as President for Asia Pacific, and finally as CEO of the joint systems division, before returning to Valeo as VP Thermal Systems. * Arnaud left the company at the end of February 2023 and was succeeded by Annie Xu-Huhmann on 1 March 2023. François Desné DIVISIONAL CEO STEEL WIRE SOLUTIONS French, °1971 JOINED BEKAERT 2022 EDUCATION Physics - MBA - International Studies University of Paris VII, The Wharton School and The Lauder Institute at the University of Pennsylvania EXPERIENCE François Desné started his career in 1996 at RHODIA where he held management roles in quality and development. In 2003, he moved to BASF where he took on several regional and global leadership positions across Europe and Asia with increasingly broader scope and responsibility as SVP of Global Business units. In 2016, François Desné joined Recticel as Group General Manager of Recticel Engineered Foams and member of the Recticel Group Executive Committee. - 31 - Bekaert Integrated Annual Report 2022 Top, from left: François Desné, Juan Carlos Alonso, Arnaud Lesschaeve, Yves Kerstens and Gunter Van Craen. Bottom, from left: Oswald Schmid, Kerstin Artenberg and Taoufiq Boussaid. Insert picture: Annie Xu-Huhmann. - 32 - Bekaert Integrated Annual Report 2022 Our stakeholders Bekaert creates value for its stakeholders by delivering on the company’s strategy and objectives, both in terms of financial performance and in addressing society’s environmental and social opportunities and challenges. As a publicly listed company (Euronext Brussels, BEKB) with a global business scope and footprint, we interact with many parties who have an interest in our organization based on the outcomes of our actions. We believe this interdependency is mutually beneficial for long-term, positive progress for all. GRI 2-26, GRI 2-29 Our partners Bekaert supports economic development and employment through the business relations and activities with suppliers worldwide. We work together with key suppliers in new product and service development projects that help us expand our offering of sustainable and digital solutions. We require a formal commitment of our suppliers to comply with human rights and ethical business conduct standards. Bekaert works together with business partners in joint ventures and in consolidated entities co-owned with other shareholders. With or without partners, Bekaert adopts the same high standards in business ethics, health and safety at the workplace, and high-performance standards. Bekaert collaborates with technology partners to drive innovations in target markets. Several forms of cooperation exist: as a member in hydrogen power and new mobility consortia, through business partnerships with industry leaders and associations, by investing in companies that scale up promising new technologies, and by collaborating with research and academic institutes. GRI 2-6, GRI 2-29 Our employees 27 000 Bekaert employees work together as one team to deliver quality products and services and step up our performance in safety, digital, sustainability, and innovation. United through our values of integrity, trust, agility, and boldness, we work better together to grow the business, to inspire and engage, and to deliver results. These form the key enablers of our Culture Compass. More information is included in the Strategy Chapter of this report. As a company and as individuals, we act with integrity and commit to the highest standards of ethics. We promote equal opportunity, foster diversity & inclusion, and create a caring and safe working environment across our organization. This way, we engage our people to dare to go beyond in unlocking their full potential, have an impact on the company’s performance, and in establishing the new possible. This employer value proposition is not only relevant to our current employees: it also aims to inspire future talents to join us in our purpose and ambition. GRI 2-7, GRI 2-23, GRI 2-29 26 980 Employees globally 75 Different nationalities in our workforce €3.6 bn payments to suppliers in 97 countries (consolidated) 22 academic partnerships worldwide - 33 - Bekaert Integrated Annual Report 2022 Staand: François Desné, Juan Carlos Alonso, Arnaud Lesschaeve, Yves Kerstens en Gunter Van Craen. Zittend: Oswald Schmid, Kerstin Artenberg en Taoufiq Boussaid. Foto-inzet: Annie Xu-Huhmann. Our customers Bekaert has a wide international customer base in established and emerging markets. We serve global and local customers with a rich portfolio of value adding products and services. Our global footprint helps building a customer-centric approach and it shortens the supply chains. Our investments in research & innovation, and in digital and sustainable solutions, lead to advanced technologies that enable our customers to meet their most stringent demands and ambitions, and hence create customer value. Bekaert is a trusted partner in offering quality products and solutions, and demonstrates a high degree of agility in all possible circumstances. Our higher ambition is to be the leading partner for shaping the way we live and move. Driven by the megatrends, we want to be the partner of choice to customers developing solutions in new mobility, low carbon construction, and green energy. Together, we can drive and accelerate the shift toward sustainable solutions in the end markets. GRI 2-6, GRI 2-29 Our investors Bekaert strives to provide timely and accurate information on the company’s strategy, performance, and outlook to all stakeholders in the financial communities. We provide information on the progress we make and the challenges we face during our meetings with investors and financial analysts. The 2022 meetings included live and virtual roadshows and conferences, webcasts, and the hybrid General Meetings of Shareholders. Bekaert’s disclosures, including this integrated annual report, cover both financial and non-financial performance indicators and progress, as well as market and strategic updates. 6 brokerage firms cover and publish equity research reports on Bekaert. Shareholders, investors, and analysts have access to Bekaert information through the website, the press releases issued, individual and group meetings, and webcasts. GRI 2-29 Society We strive to be a good corporate citizen in the communities where we operate. We promote and apply responsible and sustainable business practices in our community relations and business operations. We do not support political institutions and adopt a neutral position in political issues. We do condemn any act of violence and aggression against people and any breach of human rights. We are committed to minimize the environmental impact of our activities. We invest in green energy sources and other exhaust saving measures to decarbonize the impact of our operations. We stimulate the economic activity and employment in the locations where we are active. Our tax payments contribute to the development of communities worldwide. We advocate and fund initiatives that help improve the social and environmental conditions in communities all around the world. We support community engagement initiatives and disaster relief programs that make a difference to people’s lives. GRI 2-23, GRI 2-29 More information on our stakeholders and how Bekaert creates value for them is available in the 2022 Performance chapters (Part I of this report) and in the detailed Statements (Part II). total contact reach through individual and group meetings in 2022 average target share price on the issue date of this report 130 +65% 450 Countries with Bekaert customers target to sustainable solutions in our revenue Community support in 2022 million income taxes paid on 2022 result € ~800 000 € 81 €49 - 34 - Bekaert Integrated Annual Report 2022 Risk and materiality Bekaert’s 2022 materiality analysis builds further on the approach adopted in the past years and includes an additional dimension that reflects an assessment of the company’s impact on society and the environment, both in terms of risk and opportunity. This way, we prepare for reporting in line with the double materiality requirements that will apply through the implementation of the CSRD guidelines from the 2024 report onwards. Sources used in the risk and materiality analysis Analysis Internal sources External sources Review/Validation ERM matrix Bekaert strategy Local risk registers Risk mitigation priorities Gartner WEF Benchmark peers WTW (Willis Towers Watson) Bekaert Group Executive Audit, Risk and Finance Committee Board of Directors EY Materiality matrix Bekaert strategy Bekaert ESG priorities and sustainability targets Outcome of ERM matrix Customer questionnaires Financial institution questionnaires ESG label questionnaires Investor meetings Standards: GRI - EFRAG Audit, Risk and Finance Committee Board of Directors EY SBTi (emission reduction targets) GRI Importance to stakeholders The importance stakeholders attach to risks and opportunities is considered in both the ERM and the materiality matrix. The measurement of the importance attached by stakeholders is based on recurring questions and disclosure requirements through customer questionnaires, financial institution questionnaires (particularly green investment criteria), supplier engagement actions, ESG labels and standards, and requests and feedback or reports from investors and financial analysts. In a next phase, Bekaert will also organize dedicated surveys to complete the stakeholder expectations analysis, in line with the guidelines on double materiality. Process Both the ERM framework and the materiality analysis are considered strategic tools to identify and prioritize the actions that are crucial in driving value creation and in addressing the challenges and mitigating the risks. Where the ERM model classifies risks according to probability of occurrence and the impact or consequence for our business, the materiality matrix positions the levers of financial materiality and impact materiality. Our approach ensures that the main risks and opportunities of the Group are considered in the assessment of materiality. While the guiding principles and assessment scope in ERM and (double) materiality may be different, there obviously is a strong correlation between the outcomes of these assessments. More information on ERM is included in Part II: Governance Statements of this report. Bekaert uses the GRI reporting framework as an external reference for the materiality analysis. More information is included in Part III: GRI content index and materiality of this report. GRI 2-23, GRI 2-24, GRI 2-25, GRI 3-1, GRI 3-3 - 35 - Bekaert Integrated Annual Report 2022 ERM matrix A global approach Bekaert’s Enterprise Risk Management (ERM) approach is integrated within the company’s strategy and the resulting decisions and activities that drive its implementation. This permanent ERM framework, endorsed by Bekaert’s Board of Directors, helps managing uncertainty in Bekaert’s value creation model. It also contributes to achieving the company’s objectives, both financial and non-financial, and complying with laws and regulations as well as with the Bekaert Code of Conduct. The framework consists of the identification, assessment and prioritization of the major risks facing Bekaert. It also encompasses continuous reporting and monitoring of these major risks as well as developing and implementing risk mitigation actions. The risks are clustered in seven risk categories: strategic, people/organization, operational, legal/compliance, financial, corporate and geopolitical/country risks. The identified risks are classified on two axes: probability of occurrence and impact or consequence. The risk evolution is evaluated on a quarterly base. GRI 3-1 The main changes in 2022 Risks arising from demand impact and inflationary cost pressure from economic crises (increasing) Impactful demand changes can affect sectors that are relevant to Bekaert. A crisis or recession can lead to a significant demand decline driven by weak consumer confidence and postponed investments. The resulting upstream and downstream overcapacity can lead to price erosion across the supply chain. To mitigate these risks, Bekaert implements measures to be cost-competitive, to flex costs, and to pass on cost inflation. The company’s focus also moves beyond the traditional markets to less cyclical sectors with strong growth potential, including new mobility, renewable energy, and markets focused on decarbonization and recycling trends. Country risks with political and economic instability (increasing) Bekaert is present in countries with political and economic risks, including China, Venezuela, Russia and Turkey. In case a major political, social, or asset damage incident would occur, then an impact on the profit is possible. As part of a business continuity plan, Bekaert has measures in place to reduce this risk through back-up scenarios and delivery approvals from other locations. Risk of physical damage, business interruption, or supply chain disruption caused by climate change (increasing) Damage caused by the impacts of climate change (heavy rains/flooding, drought/water shortage, heat-stress, fire weather, extreme storms/wind damage) may affect the continuity of Bekaert’s activities in affected locations. Bekaert is assessing the possible impact of climate change and implements adaptation measures such as adequate water run-off and/or collection, flood defenses, provision of adequate firefighting facilities, water usage minimization programs, and employee working condition provisions in the event of extreme high temperatures. GRI 201-2 Risk of funding availability and financing cost + insufficient delivery on anticipated returns of expansion programs (increasing) In case of significant organic and/or inorganic growth, the risk of funding availability and financing cost might be high due to increased interest rates and/or (more) restrictive covenants and/or more securities (pledges, collaterals). Moreover, larger expansions are subject to risks of delay and cost overruns and the anticipated return of such projects might not be reached within the intended timeframe. A highly volatile global macro-environment may furthermore change the assumptions used in the expansion business cases. Bekaert has a strict capital allocation program and M&A project management framework in place that determine the return criteria of investments and include close governance and control. More details on Control and ERM and the respective Governance bodies are included in part II: Governance Statements. GRI 2-25 - 36 - Bekaert Integrated Annual Report 2022 Materiality assessment We have identified the list of material topics on the basis of: •The Bekaert strategy •The Bekaert sustainability strategy and commitments •The GRI reporting framework The assessment and prioritization in terms of financial materiality and impact materiality was done on the basis of: •The Bekaert ERM assessment outcome •Stakeholder relevance assessment •Outside-in business impacts •Inside-out societal and environmental impacts The following material topics were assessed as 'decisive issues’ (high financial materiality and high impact materiality): •Climate, Energy, and GHG management: high financial materiality due to the risk and severity of potential natural disasters as a result of climate change, and the high cost of investments and of non-compliance liabilities. The impact materiality is high because of the direct effect of our actions on the environment, company reputation, and the positive opportunities arising from the ongoing energy shift in our target markets. •Health and safety: high impact materiality in case of fatal accidents or life-altering injuries. High financial materiality due to liability risks and employer reputation, as well as investments in equipment safety. •Ethical standards and Human rights: high impact materiality in case of non-compliance, with reputation damage that would affect relations with customers, partners, communities, and employees. Financial materiality could also be very high as a result of affected relations, loss of the 'license to operate', and/or the cost of litigation and fines. •Technology advantage: Bekaert’s technology leadership is a differentiator in its positioning and ability to drive the launch of sustainable solutions. The loss of this technology advantage may lead to: loss of customer trust in Bekaert as a preferred partner; missed opportunities in value creation; and difficulty in attracting and retaining talent. •Data privacy and cyber security: the financial materiality and impact materiality on customers, employees, shareholders, and suppliers of exposure to cyber risks and data privacy breach, is considered a decisive issue and a priority in the company’s mitigation actions so that business continuity can be ensured and safeguards are put in place in case of incidents. •Financial performance: the financial performance of Bekaert is crucial in enabling the company to allocate capital to its strategic priorities, including its sustainability commitments. As a result, the financial health of the company may accelerate or delay progress in: the sustainability commitments; the company’s readiness to grow in its target markets; honoring development and investment commitments made to customers; ensuring shareholder returns; and attract and retain talent. GRI 3-1, GRI 3-2, GRI 3-3 - 37 - Bekaert Integrated Annual Report 2022 ERM top 5 risks identified A.Disruptions caused by technology shifts B.Major cyber attack C.Risks related to prolonged recession/stagflation D.Climate change risks and underperformance on sustainability targets E.Regulatory compliance risks ERM Materiality Our performance in 2022 - 39 - Bekaert Integrated Annual Report 2022 Financial performance Financial highlights FY2022¹ •Consolidated sales of € 5.7 billion (+16.8%) and combined sales of € 6.9 billion (+17.1%) •Robust profitability despite a dilutionary effect on margins from the pass-through of increased costs, lower volumes and an absence of 2021 tailwinds •Underlying EBITDA of € 654 million (-5%), delivering a margin on sales of 11.6% (versus 14.2%) •Underlying EBIT of € 459 million (-10.5%), resulting in a margin of 8.1% (versus 10.6%) •Strong cash conversion, despite lower volumes impacting profitability and payables •Average working capital on sales ratio of 13.5% (versus 12.6%) •Free Cash Flow (FCF) of € +190 million (versus € +221 million last year) •Net debt of € 487 million (versus € 417 million), resulting in net debt to underlying EBITDA of 0.7x •Proposed dividend of € 1.65 per share (+10%) and continued share buyback of up to € 120 million GRI 201-1 ¹ All comparisons made are relative to the fiscal year 2021 - 40 - Bekaert Integrated Annual Report 2022 OUTPUTS INPUTS • € 654 million EBITAu (11.6%) • € 459 million EBITu (8.1%) • € 190 million FCF • € 1.65/share dividend proposal • € 120 million share buyback Bekaert delivers strong sales growth and robust financial results in challenging market conditions Bekaert achieved strong sales growth responding quickly to the challenges of high raw material and energy cost inflation with product price rises. These swift actions, along with further operational efficiencies, helped to protect profitability despite higher input costs and lower utilization. These results also reflect the successful execution of Bekaert’s strategy, where the core businesses have been further strengthened, whilst also repositioning to target new markets with opportunities from energy transition and decarbonization trends. Bekaert achieved a +16.8% consolidated sales growth in 2022. The organic growth (+11.8%) stemmed from business mix improvements and passed-on wire rod price changes and other cost inflation (+20.6% aggregated), tempered by lower volumes (-8.8%). Favorable currency movements added +5.0% to the top line, which reached € 5 652 million, € +812 million higher than in 2021. The sales growth of Bekaert’s joint ventures in Brazil (+19.3% to € 1 220 million in revenue) was mainly the result of favorable currency effects (+17.2%) due to the strong revaluation of the Brazilian real. Organic growth was +2.1% and stemmed from mix improvements and passed-on costs on lower volumes, similar to the consolidated sales. Including joint ventures, combined sales increased by +17.1%, reaching € 6 858 million (up by € 1 billion from last year). Financial review Bekaert achieved an operating result (EBITu) of € 459 million (versus € 512 million last year). This resulted in an EBITu margin on sales of 8.1% (10.6% in 2021). In 2022 there were significant increases to the costs of the Group’s raw materials, principally wire rod, and to its energy costs. All business units responded well to these challenges with pass through of increases in costs. However these price rises were typically only offsetting the impact of this inflation and were therefore at zero profit margin. These effects diluted the overall margin of the group and can be seen in all margin percentages (and other metrics on sales) including underlying EBIT margin. • € 2.2 billion shareholders’ equity • € 728 million cash on hand (+7.5% versus 2021) • € 487 million net debt • 13.5% average working capital on sales - 41 - Bekaert Integrated Annual Report 2022 The one-off items amounted to € -93 million (€ -2 million in 2021) and included the € -55 million impairment of the fixed assets of the Russian operations in Lipetsk and the € -21 million restructuring cost of the closure of the Gelsenkirchen factory in Germany and the related consolidation of EMEA Ropes in the UK. Other one-off items related to restructuring related costs in Rubber Reinforcement (EMEA and North America), in Steel Wire Solutions (Latin America) and on a group level. Including one-off items, reported EBIT was € 366 million, representing an EBIT margin on sales of 6.5% (versus € 511 million or 10.6% in 2021). Underlying EBITDA was € 654 million (11.6% margin) compared with € 686 million (14.2%) and reported EBITDA reached € 626 million, or a margin on sales of 11.1% (versus 13.9%). The underlying overhead expenses decreased as a percentage on sales to 7.5%, compared to 8.5% in 2021, but increased by € 12 million in absolute numbers. The increase was almost entirely driven by negative FX impacts. The extra costs in selling expenses related to higher salary, travel and IT costs which were compensated by lower administrative expenses. Underlying other operating revenues and expenses increased from € +21 million in 2021 to € +26 million in 2022 due to the gain on the sale of land in Doncaster (UK) in the BBRG segment (€ +11.4 million). Interest income and expenses amounted to € -38 million, down from € -41 million in 2021 due to the elimination of interest from amortized cost measurement that applied to the convertible bond until June 2021, when it matured and was repaid. Other financial income and expenses was € -11 million (€ +4 million in 2021). The decrease stemmed from a reduced valuation of the virtual Power Purchase Agreements and increased bank charges. Income taxes decreased from € -134 million last year to € -81 million. The overall effective tax rate dropped from 28% to 26%. The key driver is stronger profitability in legal entities that were historically loss making, resulting in the utilization of previously unrecognized tax attributes. The share in the result of joint ventures and associated companies was € +54 million (versus € +108 million last year, of which € 34 million related to a one-time recovery of tax credits from the past), reflecting a solid performance of the joint ventures in Brazil. The result for the period thus totaled € +289 million, compared with € +448 million in 2021. The result attributable to non-controlling interests was € +20 million (versus € +44 million in 2021) due to less profit generation in entities with minority shareholders, particularly in Chile and Peru. After non-controlling interests, the result for the period attributable to equity holders of Bekaert was € +269 million versus € +404 million last year. Earnings per share amounted to € +4.78, down from € +7.09 last year. Balance Sheet The average working capital on sales in 2022 was 13.5%, and although higher than 2021’s figure, significantly lower than the historical average for the group. Working capital increased by € +172 million since December 2021 but decreased significantly versus June 2022. The organic increase amounted to € +168 million and was primarily due to lower accounts payable. Inventories remained broadly stable while accounts receivables reduced with € 27 million due to the impact of higher sales on the running factoring programs (off-balance sheet factoring increased from € 225 million in 2021 to € 268 million in 2022). - 42 - Bekaert Integrated Annual Report 2022 Cash on hand was € 728 million at the end of the period, compared with € 677 million at the close of 2021. The increase in cash was a result of a robust EBITDA generation and significant improvements in working capital in the last quarter of the year, while there were increasing cash outs for growth investments and shareholder returns in the form of an increased dividend and the share buyback. Net debt amounted to € 487 million, € 70 million up from € 417 million at the close of 2021 while down € 186 million from the level of H1 2022, driven by an improved working capital. This resulted in net debt on underlying EBITDA of 0.74 versus 0.61 at the end of 2021. On 31 December 2022, equity represented 46.2% of total assets, up from 43.4% at year-end 2021. The gearing ratio (net debt to equity) was 21.8% compared to 19.9% at the close of the year 2021, up slightly with a higher net debt driven by working capital and cash out for the share buyback. The ratio is still significantly down versus the 39.4% at the end of 2020. Cash Flow Cash flows from operating activities amounted to € 340 million, compared with € 380 million in 2021. The reported EBITDA in 2022 was resilient at € 626 million versus a very strong comparable of € 675 million last year. Higher cash out on income taxes and working capital was compensated partly by lower cash out against provisions and other operating cash flows. The Free Cash Flow (FCF) amounted to € 190 million versus € 221 million in 2021. FCF is calculated from the Cash Flow Statement as Net Cash Flow from Operations minus Capex (purchase of Property, Plant and Equipment and Intangible Assets) minus net interest plus dividends received. While there was less EBITDA and cash outflow from taxes and working capital was higher, there were positive effects to the FCF from higher dividends received and other operating cash flows. Cash flows attributable to investing activities amounted to € -125 million (versus € -92 million in 2021) due to higher capital expenditures. Cash flows from financing activities totaled € -174 million, compared with € -567 million last year. 2021 included the repayment of the convertible bond and other loans (€ -440 million). 2022 included higher dividend payments (€ -105 million versus € -64 million last year) and the cash costs of the share buyback (€ -97 million). More details on Bekaert’s 2022 financial performance are included in Part II: Financial Statements, and in the FY2022 press release that was published on 1 March 2023. Shareholder returns The Board of Directors seeks to maintain a prudent approach to capital allocation, balancing investment in future growth, maintenance of a strong balance sheet and shareholders’ returns. The successful execution of the strategic plan and robust financial performance have strengthened Bekaert’s balance sheet position and overall cash generation through time, and therefore potential returns to shareholders. In 2022, the dividend was increased by 50% and a share buyback program of up to € 120 million was commenced, executed over four equal tranches and completed in February 2023. Against this robust financial position and the policy set out above, the Group intends to take a balanced approach with the following returns: •A gross dividend of € 1.65 per share (an increase of 10% vs FY2021), to be proposed by the Board at the Annual General Meeting of Shareholders in May 2023 •To continue the share buyback program up to a total of € 120 million over a period of twelve months As before, the purpose of the program will be to reduce the issued share capital of the company and shares repurchased will be cancelled. Strategic and investment updates Bekaert has concluded partnerships in 2022 that are improving market access and our technology positions in high growth sectors. These included: •a partnership with Pajarito Powder (US) to accelerate the development of spearheading innovations in the market of green hydrogen production •a partnership with TFI Marine (Ireland) to accelerate the go-to-market of digital-enabled mooring solutions for floating offshore wind farms - 43 - Bekaert Integrated Annual Report 2022 The Group has also signed Virtual Power Purchase Agreements in the US and India and is installing a solar park in Ubisa, Spain, to help reduce and offset its carbon greenhouse emissions. Bekaert has also continued to invest in the organic growth of the company: •€ 171 million in property, plant and equipment, up +11% compared to last year (€ 153 million), thereby allowing for future growth opportunities in our core segments and beyond. The largest investment programs in 2022 were in Vietnam for Rubber Reinforcement and in the US for the energy and utilities markets served by our BBRG and Steel Wire Solutions divisions, with additional significant expansion investments in hydrogen, and advanced cords applications •€ 70 million in Research and Innovation activities (before deduction of grants and R&D incentives) •€ 15 million in intangible investments mainly related to investments in digital transformation projects Since the outbreak of conflict in Ukraine, we have significantly scaled back business activities in and with Russia. The financials of the Lipetsk plant in Russia are included in the consolidated financial statements of 2022. However, the ongoing conflict is a clear impairment indicator, and as such the Group has performed an impairment test at year-end under value in use. Based on the outcome of the impairment test, the Group has taken the decision to fully impair the fixed assets. We are therefore taking in 2022 a non-cash exceptional charge of € 55 million in the result. At 31 December 2022, there remained consolidated current assets of € 26 million and consolidated liabilities of € 3 million in relation to activities in the Lipetsk plant. Lipetsk also has an intercompany debt position towards partners within the Group of € 35 million as well as net intercompany liabilities of € 12 million. Post balance sheet date, Bekaert announced its intention to sell its stake in the Steel Wire Solutions businesses in Chile and Peru to its current partners, with a total enterprise value of approximately US$ 350 million, and resulting in net proceeds for our stake of US$ 136 million. The sale is in-line with Bekaert’s strategy, which has been to improve its business portfolio by reducing the Group’s exposure to lower growth, more commoditized and volatile markets, while increasing its presence in fast-growing markets. Inclusion in BEL ESG index of Euronext Brussels Bekaert has been selected as a member of the new BEL ESG index, a recognition for our sustainability performance and progress. The BEL ESG index comprises the leading sustainable, Belgian-listed companies and tracks those demonstrating the best environmental, social and governance practices. The index also highlights the market’s growing demand for sustainable investments. Consolidated financial statements Income statement in millions of € 2021 2022 Delta Sales 4 840 5 652 +16.8% EBIT 511 366 -28.4% EBIT-underlying 512 459 -10.5% Interests and other financial results -37 -50 +34.8% Income taxes -134 -81 -39.4% Group share joint ventures 108 54 -49.6% Result for the period 448 289 -35.4% attributable to equity holders of Bekaert 404 269 -33.5% attributable to non-controlling interests 44 20 -53.1% EBITDA-underlying 686 654 -4.7% Depreciation PP&E 175 182 +3.7% Amortization and impairment -11 79 — - 44 - Bekaert Integrated Annual Report 2022 Balance sheet in millions of € 2021 2022 Delta Equity 2 098 2 230 +6.3% Non-current assets 1 968 1 975 +0.4% Capital expenditure (PP&E) 153 171 +11.3% Balance sheet total 4 839 4 829 -0.2% Net debt 417 487 +16.7% Capital employed 2 271 2 433 +7.1% Working capital 678 850 +25.4% Employees as per 31 December 23 568 23 615 +0.2% Ratios 2021 2022 EBITDA on sales 13.9% 11.1% Underlying EBITDA on sales 14.2% 11.6% EBIT on sales 10.6% 6.5% Underlying EBIT on sales 10.6% 8.1% EBIT interest coverage 13.0 9.9 ROCE-underlying 23.6% 19.5% ROE 24.6% 13.4% Financial autonomy 43.3% 46.2% Gearing (net debt on equity) 19.9% 21.8% Net debt on EBITDA-underlying 0.61 0.74 Joint ventures and associates in millions of € 2021 2022 Delta Sales1 1 015 1 206 +18.9% Operating result 282 173 -38.7% Net result 252 134 -46.9% Capital expenditure (PP&E) 31 36 +16.7% Depreciation 13 17 +27.3% Employees as per 31 December 3 613 3 365 -6.9% Group's share net result 108 54 -49.6% Group's share equity 189 222 +17.6% 1 Sales joint ventures = € 1 220 million from the Brazilian joint ventures after addition of revenue from small joint ventures and elimination of intercompany transactions. Combined key figures in millions of € 2021 2022 Delta Sales 5 854 6 858 +17.2% Capital expenditure (PP&E) 184 206 +12.0% Employees as per 31 December 27 181 26 980 -0.7% More details on the financial results are included in Part II: Financial Statements of this report. Other marketplace related data such as direct economic value generated and distributed and financial assistance received from government are available in the Financial Statements §5.1, §5.2, §5.3, §5.4, §5.6, §6.13. GRI 201-1, GRI 201-4 - 45 - Bekaert Integrated Annual Report 2022 Value chain •We believe in lasting relationships with our customers, suppliers and other stakeholders, and are committed to delivering long-term value to all of them. •We promote and apply responsible and sustainable business practices in all our business and community relationships, consistent with internationally accepted ethical standards. •We comply with the regulations applicable to the responsible sourcing and handling of chemicals, lubricants and other materials. •We cooperate with customers and suppliers to enhance sustainability throughout the value chain. •We develop, digitalize and monitor manufacturing processes to ensure consistent quality and continuously enhance process and energy efficiency. - 46 - Bekaert Integrated Annual Report 2022 OUTPUTS INPUTS Our operations Bekaert operates 75 production plants (including subsidiaries and joint ventures) in 25 different countries in EMEA, North America, Latin America and Asia-Pacific. In 2022, they consumed and processed almost 3 million tons of wire rod, the company’s main raw material. GRI 2-1, GRI 301-1 Total capital investment in 2022 was € 186 million, out of which € 171 million in property, plant & equipment (PP&E) and € 15 million of investments related to the digital transformation program. About € 12 million of the PP&E investments was allocated to sustainability efforts to reduce energy intensity and CO2 emissions reduction. Bekaert also invests in operational excellence programs, as part of the group-wide Bekaert Manufacturing System, which drives standardization, process and energy efficiency, product quality, digital modeling and monitoring, and waste prevention and reduction. Better together with our suppliers Our Supply Chain Steel wire rod is the main raw material used for the manufacturing of steel wire products. Bekaert purchases different grades of wire rod from steel mills from around the world and transforms them into steel wire products by using mechanical and heat treatment processes, as well as by applying unique coating technologies. We also increasingly develop and produce products based on other metals and synthetic materials. The products manufactured by Bekaert are shipped to industrial customers who then further process our materials into half or end products; or to end customers, directly or via distribution channels. GRI 2-6 75 production plants1 ~3 million tons of wire rod purchased1 € 186 million capex (PP&E and digital) (+ € 36 million capex in JVs)1 16 000 active suppliers 96% of supplier base signed our supplier CoC2 60% of supplier base is rated by EcoVadis2 13 500 customers 2.3 million ton carbon emission savings by ST/UT tire cords1 1 JVs included 2 percentages relative to Bekaert supplier spend - 47 - Bekaert Integrated Annual Report 2022 Steel wire rod represents more than half of our total purchase spend and is ordered from vendors all over the world. The purchasing function manages the supply process. 2022 was marked by significant supply chain disruptions caused by the continued impact of the pandemic and container shortages. Nevertheless, Bekaert managed to secure the supply of raw materials thanks to the company’s global presence and close cooperation with suppliers around the world. GRI 301-1 In sourcing raw materials and other supply needs, Bekaert sources locally (i.e., in the same region as where the materials are being processed) unless the sourcing options are inadequate in terms of quality, quantity or cost. In 2022, 92% of our purchases were sourced locally, unchanged from the previous year. Bekaert purchases from different sources, in line with the product quality requirements and the sourcing options available. During 2022 we worked with around 16 000 suppliers¹ in total, of which 50% delivered into EMEA, 6% into Latin America, 10% into North America and 34% into Asia Pacific. ¹ Joint ventures excluded GRI 2-6, GRI 204-1 Responsible sourcing of minerals Bekaert recognizes the importance of responsible sourcing. In 2022, all suppliers covered by the Responsible Minerals Initiative (RMI) signed the Bekaert Supplier Code of Conduct (or delivered proof of following its principles), 100% signed the Bekaert Policy on Conflict Minerals and 100% of our tin and tungsten suppliers completed the Conflict Minerals Reporting Template (CMRT) recommended by the RMI for the current reporting year. RMI is an initiative of the Responsible Business Alliance (RBA) and the Global e-Sustainability Initiative (GeSi) and that helps companies from a range of industries to address conflict mineral issues in their supply chain. GRI 3-3 Supplier monitoring and commitment Bekaert’s purchasing department continued its engagement with suppliers to enhance sustainability awareness and control the upstream value chain. The Bekaert Supplier Code of Conduct outlines environmental, labor and governance related requirements that suppliers must comply with. At the end of 2022, this supplier commitment represented 96% of our spend. During 2022 procurement began the implementation of an improved supplier sustainability due diligence process, to ensure that the conduct of new suppliers is aligned with our values and to monitor existing suppliers’ adherence to Bekaert’s Supplier Code Of Conduct. Additional third-party data which considers structured and unstructured input across environmental, social and governance topics is used alongside already gathered data (e.g. CSR audit results and EcoVadis assessments) to assess the potential risk and to highlight where mitigation actions are required. Bekaert engages suppliers in its sustainability agenda via EcoVadis. 60% of our 2022 purchase spend was with suppliers assessed via EcoVadis. The platform provides visibility on the sustainability performance of our important suppliers and on the areas for improvement. During 2022, EcoVadis assessments have been further embedded into our procurement processes. EcoVadis rating information is requested during new supplier onboarding via our digital procurement platform – eBuy. Assessment results are considered in the annual evaluation of supplier performance and assessment levels are incorporated into our Supplier Relationship Management (SRM) framework, being a key enabler for improved collaboration with potential and existing preferred suppliers and partners. Suppliers of critical materials and services are formally evaluated on a yearly basis, and corrective action plans are put in place when the minimum required levels have not been reached. These action plans are closely monitored to keep the focus on improvement high. At Bekaert, we closely monitor the compliance of our activities with the EU REACH chemicals regulation, and we ask our suppliers to verify their REACH compliance regarding their supply of raw materials. We conducted 41 supplier audits in 2022 compared with 50 in 2021. Supplier audits are scheduled and prioritized based on quality assurance, changes to or expansions of critical supplier processes, and risk of not meeting the applicable target criteria. Concluding Key Supplier Agreements remains very important for the purchase of wire rod and other supply categories as they enable us to build effective partnerships in which sustainability, supply chain integration and innovation are explicit building blocks. GRI 3-3, GRI 308-1, GRI 308-2, GRI 407-1, GRI 408-1, GRI 409-1, GRI 414-1, GRI 414-2 - 48 - Bekaert Integrated Annual Report 2022 Virtual Supplier Campaign - Cementing strong wire rod partnerships and expanding the approach to other key categories In 2021 Bekaert launched a Virtual Supplier Campaign with key wire rod suppliers to make tangible steps towards reaching Bekaert’s ambitious science-based GHG reduction targets which were approved, in 2022, by the Science Based Targets initiative (SBTi). One of the targets we have set ourselves is to reduce our Scope 3 emissions from purchased goods and services by 19.7% by 2035. Read more on Bekaert’s decarbonization ambitions and 2022 performance in the next chapter: ‘Planet’ and in Part II: Environmental Statements of this report. The campaign was successful and resulted in the start of carefully selected partnerships with suppliers across the globe in 2022. The selected partners were recognized for their sustainability awareness, clear roadmaps towards decarbonization & leadership in exploring new technologies for low CO2 steel manufacturing. Together we can spearhead the development, introduction and roll-out of more sustainable steel and steel based solutions into our markets. Following the success with wire rod suppliers, in 2022, we decided to expand the approach to additional categories key to our sustainability ambition: transportation, packaging and base metals. The campaign peaked with the “Bekaert Sustainability Days” during which members of our leadership team shared Bekaert’s sustainability ambition in keynote sessions and our procurement team had one-to-one sustainability discussions with key suppliers. Through this exercise we identified opportunities for common ground initiatives with potential partners and embedded the knowledge into our category strategies. The initiatives, partnerships and knowledge will bring further progress towards our ambition in 2023. Establishing the new possible with partners Firm footing in hydrogen In recent years, we have grown our presence in the entire value chain of green hydrogen production. Although we saw the opportunities very early and have built a track record of more than 20 years producing Currento® porous transport layers for proton exchange membrane electrolysis, the market developments have recently gained momentum. As a result, we see increased and much needed collaboration across the full hydrogen value chain. The industry is still at an early development stage and requires significant R&D initiatives from different players working together. That is why we have expanded our access to technology and partner networks. Through our existing relations with universities and research institutes and our participation in industry consortia and industry bodies we will be able to connect a wide area of expertise that will contribute to build the future of hydrogen and a decarbonized energy sector. Apart from being a supplier to a number of market leading companies, we have joined the ECO2Fuel project, an EU project under Horizon2020 to convert CO2 into sustainable fuel. We also acquired a stake in Pajarito Powder (Albuquerque, US), a leader in the development and commercialization of advanced electrocatalysts for electrolyzers that enable green hydrogen production. GRI 2-6 - 49 - Bekaert Integrated Annual Report 2022 Be the leading partner for our customers Quality as a top priority Quality is essential for good customer relations. Our customers have a choice, and we strive to be their best choice. We support our customers by adding value to the products and solutions we provide. It is key to meet our customers’ quality expectations, both in terms of product specifications, service levels, and current and future development needs. It is the basis of creating customer value. A great example of our focus on quality is our plant in Sardegna, Italy, that has not received a single customer complaint in over two years. Partners along the value chain enjoy more convenience thanks to e-portals Last year, we opened up our North American fencing e-portal to more partners along the value chain. Before, the portal targeted fencing distributors, who are our direct customers, so they could easily check stock levels, order products and follow up the status. Now, also contractors who are further down the value chain can browse our product offering as well, fill their shopping cart and send a request for quotation to the distributors. This creates benefits for all partners involved: end-customers have an easy and convenient shopping experience via the website; distributors use Bekaert's portal and marketing tool to keep a close relation to their direct customers; and Bekaert gains valuable customer insights and creates a more streamlined ordering process. At the same time, we launched new e-commerce portals for automotive and construction segments, and revamped our existing MyRope portal. We also further improved our customer relationship management (CRM) system which has become the backbone of our commercial processes, allowing sales teams to monitor the end-to-end commercial cycle in an efficient way. NPS Rubber Reinforcement Bekaert is conducting a Net Promotor Score (NPS) survey across all businesses and on a global scale. The outcome is projected to be finalized in April 2023. The one business unit with complete results so far is Rubber Reinforcement. Rubber Reinforcement’s NPS score for 2022 was 73, which is an excellent result: much higher than the average for international B2B manufacturing companies (between 20 and 30), and another significant improvement compared with the previous score of 64 in 2020. The survey gauged the loyalty of customer relationships by measuring the likelihood that customers would recommend Bekaert to other companies, colleagues or business partners. Profacts, an independent market research agency, handled the coordination and analysis of the survey. - 50 - Bekaert Integrated Annual Report 2022 Planet At Bekaert, we believe it is our responsibility to create a better tomorrow. •We continually implement actions to increase energy efficiency so that we reduce the energy used in our operations. •We increase the share of renewable energy sources wherever possible. •We promote a circular economy by optimizing the share of recycled steel wire rod in our manufacturing processes and by recycling 100% of our steel scrap. •We avoid the discharge of untreated effluents. •We work to reduce waste and to limit our water consumption, especially in water-stressed regions. •We develop sustainable solutions which contribute to a cleaner environment and aim to reduce the environmental footprint of our products over their entire life cycle. •We are committed to reducing our carbon footprint and our emissions reduction targets have been validated by the Science Based Targets initiative (SBTi). - 51 - Bekaert Integrated Annual Report 2022 OUTPUTS INPUTS Our strategy and ambitions In 2022 we further stepped up our ambitions, capabilities and plans to make substantial progress towards achieving our environmental targets. Our ambition for the environment is in line with the Paris Agreement to limit the global temperature rise to 1.5°C. We have set a target to reduce our Scope 1 & 2 Greenhouse Gas Emissions¹ - the majority of which comes from gas used within our factories and from the electricity we purchase - by 46.2% by 2030 (compared to 2019) and to reach Carbon Net Zero by 2050. We have also set a target to reduce our Scope 3 emissions associated with purchased goods and services by 19.7% by 2035 (compared to 2019). By committing to these targets, we are taking bold steps, thinking beyond tomorrow and basing our initiatives on the latest science that will help create a sustainable future in the longer term. We are determined to improve life and create value for all our stakeholders by making a positive impact with our sustainable solutions and practices. With this in mind, we have established an ambitious plan that addresses the most pressing sustainability-related challenges and, at the same time, presents a wide range of opportunities, for Bekaert and for the environment. GRI 2-22, GRI 3-3 ¹ Scope 1 (direct GHG emissions): GHG emissions from sources that are owned or controlled by an organization. (e.g. GHG emissions from fuel and gas combustion) Scope 2 (energy related indirect GHG emissions): GHG emissions that result from the generation of purchased or acquired electricity, heating, cooling, and steam consumed by an organization Scope 3 (other indirect GHG emissions): indirect GHG emissions not included in Scope 2 (energy related indirect) GHG emissions that occur outside of the organization, including both upstream and downstream emissions (e.g. transport) 40% of electricity used is from renewable sources1 32% of wire rod purchased is from recycled steel2 -9% water withdrawal compared to base year 20191 Commitment to Business Ambition for 1.5°C campaign, with science-based targets -7.8% decrease in Scope 1&2 GHG emissions compared to 20191 100% of steel scrap is recycled -13.9% steel scrap compared to 2019 Emission reduction targets approved by SBTi 1 JVs included 2 recycled steel purchased by the steel mills (27%) and recycled in their production processes (5%) - 52 - Bekaert Integrated Annual Report 2022 Our actions in 2022¹ ¹ More details on Bekaert’s 2022 environmental performance and targets are included in Part II: Environmental Statements of this report. Race to zero Following on from acceptance of our application to join the Business Ambition for 1.5°C campaign, which is an urgent call to action from a global coalition to limit global warming, our ambitious science-based GHG reduction targets have been independently validated by the Science Based Targets initiative (SBTi). By signing up and committing to targets in line with SBTi, we became part of the UN Climate Champions’ Race to Zero and through this we aim to make a significant impact in the fight against climate change. Another disclosure is related to EU Taxonomy, which aims to channel capital towards sustainable activities, with the end-goal of financing sustainable growth and achieving the EU objective of becoming climate neutral by 2050. Building further on our initial evaluation in 2021, in 2022 we again mapped all of the manufacturing activities, investments and applicable expenses of the Bekaert consolidated entities and have matched them with the activities described in the EU Taxonomy to analyze their eligibility, i.e., their potential to be environmentally sustainable. While last year’s exercise only covered the eligibility dimension, this is the first year that we also report on the alignment to two of the EU Taxonomy objectives: Climate Change Mitigation and Climate Change Adaptation. The outcome of this analysis is included in the detailed environmental statements in part II of this report. GRI 3-3 Using and investing in renewable energy sources One of our key enablers to reduce greenhouse gas emissions is the use of renewable electricity, where available. In total, 40% of the electricity we consumed came from renewable energy sources in 2022. In Brazil, Canada, Colombia, Ecuador, Venezuela, Romania, the Netherlands and the UK, most of Bekaert’s electricity already comes from renewable energy sources. When it comes to renewable power generation, we are focusing on solar and wind energy. We are looking at wind turbine investments and private or public investments for our plants to source energy from on-site roof and ground-mounted solar panels. In 2022 we announced the investment in a solar farm at our manufacturing site in Burgos, Spain, and in two PPA’s in the US and in India, which will drastically reduce our emissions of our manufacturing footprint in those countries. GRI 3-3 Developing and installing eco-friendlier production processes in our plants worldwide We develop and implement standard solutions and initiatives that aim to reduce energy consumption and greenhouse gas emissions. The Bekaert Manufacturing System (BMS), a longstanding transformation program focused on manufacturing excellence, is centered around energy and emission reduction measures. Largely as a result of our efforts to improve energy efficiency, but also due to reduced output, our Scope 1 & 2 emissions (including JVs) reduced by 8.3% in 2022 compared to 2021 and were 7.8% lower than our reference base year 2019. However, our energy intensity increased by 5.3% in 2022 compared to 2021, primarily because of a reduced output in terms of volumes, which outweighed the energy efficiency improvements. Additionally, we are analyzing different options to fully decarbonize our thermal energy from heat by 2050. One initiative is exploring the possibility of electrifying our heat treatment processes. In Burgos (Spain) we are running a pilot project on a small production line. GRI 3-3 - 53 - Bekaert Integrated Annual Report 2022 Contributing to a circular economy True sustainability can only be achieved through circularity. That is why we are increasing our contribution to circular economy across the lifecycle of our products and our value chain. In 2022, we organized a series of circular economy workshops facilitated by Sirris and Agoria (respectively the Collective Center and National Federation for technology-inspired companies in Belgium). The purpose was to establish a systematic approach to monitor and enhance circularity and to adopt a common language within the organization. 25 change leaders from different business units and functions brainstormed on various circular economy concepts and generated 50+ ideas. Additionally, we performed more than 60 Life Cycle Assessments (LCAs) that provided valuable information on the environmental footprint of our products throughout their entire lifecycles, emphasizing the focus on circular economy. In 2022 we improved the overview of our upstream Scope 3 emissions, allowing us to assess our current wire rod performance and monitor future progress. As mentioned in the Value Chain chapter, steel wire rod is Bekaert's main raw material. Today most of the steel used by the steel mills to produce wire rod is made via the primary route, based on virgin iron ore with blast furnace technologies. Steel produced via the secondary route uses a high share of recycled steel and is made with electric arc furnace technologies. In calculating the share of recycled steel in the wire rod we purchase, we use, wherever possible, granular data obtained directly from our suppliers. To complete our analysis we also consult internationally renowned databases and take into account generic values based on the steel making technology used. Data quality is important and therefore we are working closely with our strategic suppliers and international organizations to pave the way for more standardized and certified reporting. To increase the content of recycled raw materials, we adopt techniques in our product and process design that support the use of scrap-based steel wire rod. Applying the ISO 14021 definition, the total of pre-consumer and post-consumer recycled content in wire rod was 27% in 2022, a slight increase over the past 2 years (26%). This ISO standard only takes into account the wire rod that was produced by the steel mills with scrap-based steel purchased. The use of steel recycled inside the steel mills' manufacturing process (adding 5% of recycled material) is not included in the ISO-based ratio. Bekaert has an ambitious plan to significantly increase the recycled content in purchased wire rod by 2030. To realize this, new wire rod grades and sources are being developed while maintaining strict approval protocols. Zinc is another key raw material for Bekaert with 24 000 tons purchased in 2022. We are currently working closely with our key zinc suppliers to better understand the proportion of recycled content and analyze how this share can be increased. GRI 301-1, GRI 301-2 Scope 3 emissions from purchased goods & services1 (including wire rod) reduced by 12.6% versus 2021 (consolidated entities). More information on our Scope 3 emissions are available in Part II - Environmental Statements of this report. GRI 3-3 Procurement have also been working on material sustainability topics related to packaging, focusing on reuse, recycled content and reduction. Spools are an important type of packaging for Bekaert, as most of our products are wound around spools to be delivered to our customers. In 2022, we achieved high spool reuse with 97% of tire cord spools being reused. Bridon-Bekaert Ropes Group also focuses on spool reuse, both in the advanced cords business and in ropes, where wooden and steel reels are reused for almost all rope deliveries in North America and Australia. We have also worked on the reuse of wooden pallets, both with our customers and our suppliers. In 2022 we received the PRS green label for our Zwevegem, Belgium plant’s engagement in pallet circularity. GRI 2-6, GRI 301-2 100 % of the cardboard boxes we purchase and use in China and South East Asia are made from recycled paper. Bekaert is working toward achieving this result in EMEA in the course of 2023. GRI 3-3, GRI 301-2 We design for high durability, less material use, recyclability, easy disassembly and adaptability of products manufactured. Our sustainable solutions ensure extended lifetime or achieve the same lifetime with less material, substantially reducing the overall GHG emissions compared to - 54 - Bekaert Integrated Annual Report 2022 the mainstream alternatives in the market. Additionally, we aim for leaner processing not only at our manufacturing but also at our customer side. We assist our customers to increase the processing efficiency of our products and decrease their waste generation. We invest in waste management that prioritizes recycling over disposal. For instance, not only we take initiatives to reduce our freshwater intake, we also recycle and reuse water many times until it cannot be further recycled. Additionally, we partner with local recycling companies to recycle our waste. For example, 100% of all steel scrap is returned to the steel industry for recycling. We have initiatives to reduce waste from packaging. We also support local circular economy initiatives beyond the products that we deliver in the respective region, such as the partnership between Chaide and Bekaert Ideal Alambrec in Ecuador for recycling more than 1000 used mattresses in the Galapagos Islands. By innovating, using materials and energy that don’t cost the earth, we contribute to a low-carbon society and preserve our natural resources. ¹ Excluding joint ventures. GRI 3-3, GRI 306-2 Embedding a sustainability mindset at the highest level Senior management members of Bekaert attended a comprehensive development program run by the Cambridge Institute on Sustainability Leadership. Following a period of self-study, the participants took to the virtual classroom to learn from Cambridge University experts about the various topics on our sustainability agenda and to debate case studies in facilitated discussions. The goal of this program was to boost sustainability thinking, establish a common language and embed it into daily tactical and strategic planning. As such, the course gave food for thought about the implications of sustainability in our business environment. Taking a holistic and long-term approach in our innovation and business models allows both the economy and society to thrive together. This course built a shared understanding of what being sustainable as a business means and provided inspiration for what that could mean for Bekaert. As a result of the program, now more than 60 of leaders put their learnings into practice as part of their day-to-day work with the aim to improve life and create value for all our stakeholders. To bring the sustainability agenda even deeper into the organization, all managerial employees took an e-learning course on sustainability to be fully aligned with Bekaert's ambitions. - 55 - Bekaert Integrated Annual Report 2022 Focus on energy consumption and on prevention & risk management Given our ambition to reduce our carbon footprint and the importance that energy consumption will play going forward as described earlier, the energy intensity approach within BMS is being elevated through a new program called “You Know Watt”. You Know Watt Recognizing the significant carbon and wider environmental footprint associated with producing our products and solutions, our global program, “You Know Watt”, aims to further reduce our energy use, our water consumption and our waste generation in a structured way. We believe in the ‘power’ of learning by doing. Therefore, based on several pilot projects, we have designed and implemented a dedicated & comprehensive improvement program covering energy, water and waste, which moves from plant to plant, following a structured process at each site over a two to three month period. We bring You Know Watt to local teams, evaluating findings, implementing efficiency improvements and sharing improvement ideas and best practice across the company. “You Know Watt” focuses on: •Measuring energy/water consumption and waste generation •Building awareness of the importance of energy efficiency, water conservation and waste reduction •Identifying potential improvement opportunities •Evaluating each opportunity •Implementing those which are technically and economically feasible, using standard solutions where possible We kicked this program off in our Izmit plant in Turkey in October 2021 and have now completed You Know Watt waves at 7 large manufacturing sites in Europe & in China. The results have so far been very encouraging, with an overall identified energy intensity improvement potential of more than 15%, which is in line with our ambition and targets. Similarly, we have also identified potential opportunities to reduce our water consumption and our waste generation which are in line with, and in some areas exceed, our targets. GRI 3-3, GRI 306-2 - 56 - Bekaert Integrated Annual Report 2022 Prevention and risk management Prevention is better than mitigation. Our prevention and risk management-related activities include, among others: •Programs to reduce our water consumption, especially but not exclusively in water-stressed areas. Total water withdrawal in 2022 was almost -9.0% below 2019 and -6.4% lower than in 2021. •Steel scrap reduced by -13.9% compared to 2019 and by -5.8% compared to 2021. •Protection against soil and groundwater contamination with physical primary and secondary containment as well as condition monitoring and preventative maintenance. •At the end of 2022, based on the number of Bekaert manufacturing plants, 88% have ISO 9001 certification (quality) and 79% have ISO 14001 certification (environment), both under the umbrella of a corporate integrated management system. •As a recognized automotive supplier, Bekaert chose to have its concerned manufacturing plants certified against IATF 16949 quality management requirements. At the end of 2022, 20 sites have been certified across all Business Units, also under a corporate audit scheme. In addition, 8 sites have now reached ISO 50001 certification, which demonstrates to stakeholders the firm ambition of Bekaert to be more efficient on energy consumption. •We comply with the EU regulations on hazardous substances (RoHS) in products. •In addition, a comprehensive assessment of physical climate change risks and related mitigating actions has been undertaken. More information is available in Part II section Control and ERM in the Corporate Governance Statement of this report. GRI 3-3, GRI 303-1, GRI 303-2 Sustainable products and solutions We offer products and solutions that embed sustainable practices across their lifecycle and our value chain, contributing to making the world more sustainable. Read all about our products and solutions that contribute to a cleaner environment in the ‘Knowledge’ section in this Chapter and in Part II: Environmental Statements. GRI 302-5 Biodiversity Along with the fight against climate change, the preservation of biodiversity is clearly one of the most important environmental challenges of the 21st century. At the current rate, half of all living species could disappear a century from now. In response to this concern, we are in the process of assessing the potential impact of our operations on biodiversity. As a first step, we have screened all of our sites in relation to their proximity to, and their potential impact on, designated protected areas and/or areas of high biodiversity value. Whilst the vast majority (~95%) of Bekaert sites are located in industrial zones, 3 out of the 75 production plants are located close to protected or high biodiversity areas. With this in mind, in 2023 we will enhance our approach to ensure long-term protection, enhancement and restoration of biodiversity. In 2023 we will start to assess our impact on biodiversity throughout our value chains, from raw materials to production and will take action as appropriate for the protection, enhancement and restoration of biodiversity. GRI 304-1 - 57 - Bekaert Integrated Annual Report 2022 Knowledge •Our research and innovation activities are aimed at creating value for our customers, for our business, and all our stakeholders to prosper in the long term. •We co-create with customers and suppliers around the globe to develop, implement, upgrade and protect both current and future technologies. •We listen to our customers so we understand their innovation and processing needs. •Knowing how our products function within their production processes and products is key to developing value-creating solutions. •We accelerate our innovation agenda and upgrade the innovation pipeline. •We deploy Industrial IoT in our manufacturing and modeling innovations. •We extend the scope of our innovation activities beyond steel. - 58 - Bekaert Integrated Annual Report 2022 Highlights in 2022 Innovation is a key priority in the Bekaert strategy. In 2021, three ‘business engines’ were identified to create a balanced pipeline of incremental and disruptive innovations. The acceleration of our innovation program was fully deployed in 2022 and led to a strong innovation focus in each of the business units and at the corporate level where the focus lies on exploring opportunities beyond our current core. The total investment in R&D in 2022 before deduction of grants & tax credits amounted to € 70 million, compared to € 67 million in 2021. The increase in R&D spend is fully allocated to the differentiated innovation agenda in line with our strategic innovation focus areas. During 2022, the continued effort to accelerate innovation not only led to an increase in our R&D spend but also to shifts in our innovation portfolio toward a more differentiated solutions offering. We ensure a good balance with Bekaert's other transformational priorities - digital and sustainability - in prioritizing innovation projects that enable an extended offering with advanced services that create value for our customers. In support of realizing our sustainability ambition, we have made investments to boost our innovation pipeline of sustainable solutions. Our portfolio contains new projects where we work with partners to accelerate the energy transition toward green hydrogen and floating offshore wind, and we developed new applications that will enhance the electrification of mobility. We continued the deployment of the agile & customer-centric innovation methodologies across the organization that was started in 2021. Each of the business units have installed innovation centers to ensure customer-centric innovations in line with their specific strategy and market needs. In addition, we have deployed innovation tools and are training the teams. OUTPUTS INPUTS € 70 million gross R&D spend € 8 million R&D grants received 523 R&I staff and 276 Engineering staff € 15 million investments in digital assets 19 first patent filings in 2022 2 100+ patent rights in portfolio1 1 850+ trademark registrations1 85%+ of our R&D programs target distinct sustainability benefits 1 JVs included - 59 - Bekaert Integrated Annual Report 2022 Driving innovation to the next level In order to further accelerate and strengthen the innovation agenda, Bekaert has appointed Ernst Lutz as Chief Innovation and Technology Officer. Dr. Lutz will join Bekaert on 3 April 2023. He holds a Mechanical Engineering degree from ETH Zürich, Switzerland, a PhD Engineering Science & Mechanics from Virginia Tech, US, and an executive MBA from the Graduate School of Business Administration in Zürich, Switzerland and State University of New York in Albany, US. Ernst joins Bekaert with 28 years of international experience in Technology, Innovation, Business Development, and Engineering. In his previous role he was the CTO and a member of the Group Executive Team of Gurit Services AG in Zürich, Switzerland. Providing solutions for customers During 2022 we continued to develop technologies to meet and exceed customer needs and stretch our quality leadership in the industry. Examples include products to support energy transition like Fiber+ ropes for floating offshore wind turbine mooring, Bezinox® armoring solutions for power cables, Currento® PEM electrolyzer fibers for hydrogen production, as well as solutions for the construction industry like the SigmaSlab® concrete technology that combines CCL’s post-tensioning strands with Dramix® steel fiber concrete reinforcement. In 2022, more than 85% of Bekaert’s global portfolio of Research & Innovation efforts targeted distinct sustainable benefits that: limit the use of natural and harmful resources; lower energy consumption and exhaust; increase recycling opportunities; enhance safety and ergonomics; and/or address the renewable energy market needs. More information on new products and solutions can be found below. Sustainable products and solutions We offer products and solutions that embed sustainable practices across their lifecycle and our value chain, contributing to making the world more sustainable. These include, among others: Bekaert’s super-tensile and ultra-tensile (ST/UT) steel cord ranges for tire reinforcement allow tire makers to produce tires with a lower weight, thinner plies, and lower rolling resistance. This improves the battery life of electric vehicles and reduces the CO2 emissions of conventional-fueled vehicles by up to 5%. Based on actual data, generally accepted conversion models, and test results, the annual CO2 savings attributable to Bekaert ST/UT cords amount to at least 2.3 million tons. Our steel and synthetic mooring ropes connect anchors on the seabed to floating wind turbines and eliminate the need for extensive foundations. Furthermore, Bezinox®, Bekaert’s new-generation cable armoring solution, is used in submarine power cables that transfer electricity from offshore wind farms ashore. This solution lowers the total cost of ownership by reducing energy losses and heat dissipation and by offering a predictable and reliable cable lifetime. Our Dramix® steel fibers for low-carbon concrete reinforcement use 50% less steel weight, compared to traditional steel solutions. This reduces CO2 emissions of construction projects by 20 to 50%. Bekaert's Currento® porous transport layer solutions increase the performance and durability of electrochemical devices used in hydrogen production. More information on our progress to accelerate the adoption of these low-carbon technologies and how they contribute to a reduction of the environmental footprint can be found in the Partnerships section at the end of this Chapter and in Part II: Environmental Statements. GRI 2-6, GRI 3-3, GRI 302-5 - 60 - Bekaert Integrated Annual Report 2022 Today's solutions for future needs In the transition from fossil fuel to renewable energy, Bekaert also redesigns existing products to enable green energy applications. •Bridon-Bekaert Ropes Group supplies Armofor® thermoplastic tapes for light-weight, non-metallic pipes in energy markets. These pipes save a significant amount of CO2 due to their anti-corrosion characteristics, which ensures a much longer durability compared with traditional carbon steel pipes, and they are much easier to install. While initially developed and used as water injection pipes for oil extraction, they increasingly find their way in a broad range of energy transport projects, including green energy. •Steel Wire Solutions' flat and shaped wires that reinforce and protect flexible pipes are another example of Bekaert's product offering that answers both the current (oil and gas) and future (renewable) energy needs. Engineering Bekaert's in-house engineering department takes up a leading role in equipment technology development. To do that, it further increased the collaboration with other technology departments and external partners. At the same time, we are creating an ecosystem of knowledge clusters in engineering solutions and services with the purpose to support the plants in their journey toward world class manufacturing. Engineering has aligned its roadmaps with the overall Bekaert ambition. Significant steps have been taken to address the growth plans of Bekaert in new or fast growing business areas. To name one, we enable the capacity expansion of the manufacturing activities that produce Currento® porous transport layers used in electrolyzer stacks for green hydrogen power. Our close proximity to customers combined with extensive market knowledge allow us to investigate opportunities quickly and be ready when the market requires solutions. Bekaert Engineering intensified its focus on safety, sustainability, digitalization and automation efforts. We make our machines more energy efficient by developing and deploying standard technical solutions, while exploring new concepts for process or equipment breakthroughs. By adding intelligence to our machines and processes, we gain more insight into the performance of our machines and increase efficiency and quality. More automation also further increases the ease of running and monitoring our operations. Engineered for safety Our heritage implies that several generations of equipment are being used in our manufacturing plants. The engineering and safety, health and environment departments have joined forces to upgrade old machines to the newest safety standards and make them less prone to human errors. The underlying principle is that human behavior, such as being distracted for whatever reason, should not cause life-altering injuries to anyone. As such, it represents an important facet in our 'no-harm-to-anyone' safety credo. - 61 - Bekaert Integrated Annual Report 2022 Intellectual property The Intellectual Property department of Bekaert takes care of patents, designs, trademarks, domain names and trade secrets for the whole Bekaert Group, including the joint ventures in Brazil. It also advises on IP clauses in various agreements such as joint development agreements and licenses. Furthermore, it ensures intellectual property rights are respected both through enforcement of Bekaert’s rights and by checks concerning third parties rights, which leads to a strong stance in the market and secures an excellent track record with no infringement actions brought to court against Bekaert for years. At the end of 2022, the Bekaert Group had a portfolio of more than 2 100 patents and patent applications, including 19 new first patent filings in 2022, and more than 1 850 trademarks and trademark applications. The Bekaert Group thereby takes holistic approach to the protection of its intellectual property regarding new product and process technology developments, including digital assets and sustainable solutions. GRI 2-27, GRI 3-3 Securing our digital assets Cyber risks can affect intellectual property protection and data privacy. Therefore, information security - securing our company’s and customers’ data, assets, and privacy - is critical, especially with many of our team members working remotely. Our employees are our strongest link, and the most effective protection is their awareness of information security risks and cyber threats. Our Information Security Rules explain the actions we can take to defend against cybercriminals and ensure that our information remains protected. GRI 3-3, GRI 418-1 Digital@Bekaert Digital@Bekaert is dedicated to transforming our working methods to embrace holistic data intelligence platforms. Our focus since 2021 has been on driving progress through the integration of advanced technologies into our everyday products. Our efforts are concentrated on the following key areas: Digital@Operations, Digital@Customer, Digital@Enterprise Process, and Digital@Sustainability. These pillars prioritize maximizing business value while ensuring that the IT foundation, including data strategy, cyber defense, and IT infrastructure, provides a secure structure for value delivery. Our objective is to deliver quality and performance-driven products and solutions that contribute to creating value for our customers. •Digital@Operations leverages the technological advancements in the operations process, such as connecting operational assets, digitalizing manufacturing and supply chain, and utilizing advanced analytics such as AI/Machine Learning to solve operational challenges. •Digital@Customer prioritizes the customer experience, offering a first-class omnichannel experience through both online and offline channels. •Digital@Enterprise Process optimizes our internal processes to improve user experience and efficiency in finance, HR, procurement, and legal, among others. •Digital@Sustainability utilizes digital technology and data to position sustainability as a differentiator for our stakeholders. In 2022, we made significant strides in our digital transformation efforts. We digitalized 10 Bekaert plants worldwide and progressed in our digital supply chain journey in 13 additional plants. Our manufacturing processes saw increased efficiency through the implementation of advanced analytics. Moreover, we introduced 7 additional digital customer interactive channels and equipped our commercial teams with real-time pricing tools and business intelligence platforms. We also started to see efficiency improvements from digital transformation programs in procurement and finance processes. - 62 - Bekaert Integrated Annual Report 2022 Open innovation To build a strong ecosystem that supports our innovation portfolio differentiation, Bekaert continued to grasp opportunities for cooperation with strategic customers, suppliers and academic research institutes and universities. In 2022, we made some investments in early-stage companies and explored the set-up of new ventures to create new attractive business models adjacent to Bekaert’s current field-of-play. This strengthened open innovation was kicked off in 2021 and was continued with, among others, the BCG cup for sustainable solutions, and university collaborations where Bekaert cases were brought to academic training programs on innovation & entrepreneurship. With the challenges that sustainability and digital transformation bring, it is key to maintain our network in the domains of metallurgy and modeling with an extension of our UTC University Technology Center in University College Dublin, and with PhDs of Imperial College London, Zahreb University, CEIT Spain, UGent, University of Lille and other universities. In 2022, we also strengthened our research partnerships in the domain of sustainable metallurgy and sustainable metal processing. More information on Bekaert’s research and academic partnerships is available at the end of this chapter. Memberships & associations Bekaert has numerous corporate memberships, including various relevant bilateral chambers of commerce and general industry associations, such as Agoria and VOKA in Belgium, Wire Association International, and cross-industry associations such as the Conference Board. Bekaert is also a member of national employer associations in all countries where Bekaert is active. GRI 2-28 Acknowledgement We wish to thank the Flemish government’s Flanders Innovation & Entrepreneurship (VLAIO) agency, as well as the Belgian federal government. Their subsidies and incentives for R&D projects involving highly educated scientific staff and researchers in Flanders are essential for maintaining a foothold for R&D activities in Belgium. We also want to express our sincere appreciation for the support of the Irish Research Council and I-Form, the SFI Research Centre for Advanced Manufacturing. Furthermore, we want to thank the Research & Innovation department of the European Commission for supporting innovation with project grants. GRI 201-4 - 63 - Bekaert Integrated Annual Report 2022 Research & innovation partnerships Our vision is to build partnerships within our ecosystems and for them to be a key pillar for Bekaert to: •Develop sustainable business portfolio •Explore and design new sustainable solutions with best-in-class science and innovation partners •Anticipate trends and be a key player in climate change, energy transition and societal challenges •Create value for all our stakeholders Today at Bekaert we are working with more than 85 partners such as academics, institutions, universities, engineering schools, SMEs, and large industrial players to deploy our vision. Herewith are examples of key partnerships that we are currently involved in and the domains, products, and innovations we are jointly working on: Partner Innovation domain Flanders' Make Digital - Engineering Centro Ricerche FIAT Eco2Fuel Consiglio Nazionale delle Ricerche (CNR) Eco2Fuel Technical University of Denmark (DTU) Eco2Fuel University Politecnica Valencia (UPV) Eco2Fuel Flemish Institute for Technological Research (VITO) Hyve IMEC Hyve VKI Von Karman Institute Metallic coatings - hot dip CRM (Centre de Recherches Metallurgie) Metallic coatings CEIT Modeling Ghent University Modeling Imperial College London Modeling PEM Institut RWtH Aachen Modeling UCD University College Dublin Modeling Zagreb University Modeling CTC (Foundacion Centro Tecnologico de Componentes MooringSense SINTEF MooringSense TNO (Toegepast Natuurwetenschappelijk Onderzoek) MooringSense INSA Lyon Physical metallurgy OCAS Physical metallurgy Université de Lille (UMET) Physical metallurgy KU Leuven GRI 2-28 - 64 - Bekaert Integrated Annual Report 2022 People •'Dare to go beyond’ is our employer value proposition to current employees and future talents. •The leadership principles – the behaviors we expect from every member of our team – guide us in achieving our ambitious goals. These principles are: grow the business – inspire and engage – deliver results. •We believe in working together to achieve better performance. That is why ‘better together’ is at the heart of our Culture Compass. •As a truly global company, we embrace diversity across all levels in the organization, which is a major source of strength for our company. •We nurture talent through career development and life-long learning. We attach great importance to providing challenging career and personal development opportunities to our employees. •Our global safety approach aims to create a no-harm, risk-free working environment for all our employees and for anyone working at or visiting our premises. We believe that taking care of people is fundamental to the success of the business. •We are committed to provide equal opportunity in employment and respect the rights and dignity of each employee. •Bekaert is firmly committed to complying with national legislations and collective labor agreements. - 65 - Bekaert Integrated Annual Report 2022 OUTPUTS INPUTS Our values Our employees are the driving force behind our global success. The true strength of our company lies at the heart of every Bekaert employee’s passion to go the extra mile in realizing our ambition, and to do that in a way that reflects our company values and the highest standards of business ethics. Our values bring us together as one global team: better together. They are the foundation of our culture and way of working. Integrity and Trust have always been at the heart of all our relationships. In 2022 we added two new values – Agility and Boldness – as we believe these are vital for our future. More than 500 employees from all geographic regions and business areas, and from all levels in the organization, participated in the workshops that were organized to define and validate our company values. This new set now forms an essential part of Bekaert’s Culture Compass and guides us to “Dare to go beyond”. Integrity We are authentic, honest, and respectful. We protect the planet and care for our employees and communities. We always do what is right and speak up if we see something wrong. Trust We believe in the ability, reliability, and strength of our colleagues, customers and partners. We build relationships with mutual understanding, openness, and respect. Agility We embrace change and adapt with speed, enthusiasm, and resilience. We keep it simple and effective, with the customer at the center of our decision-making. Boldness We are curious, creative, and courageous. We think outside of the box to establish the new possible. We empower each other to try new things, and accept that learning from failure is part of daring to go beyond. We take ownership, make decisions, and take action. GRI 2-23 26 9801 employees from 75 nationalities 2 039 new hires in 2022 34 average training hours per employee Committed to increase gender equality ratio to 40% by 2030 100% of PC users formally commit to the Code of Conduct annually Safety breakthrough: reduction in TRIR by -26% and LTIFR by 20% Employee retention rate of 96% 28% female managers and salaried professionals per YE 2022 1 23 615 in consolidated entities + 3 365 in joint ventures = 26 980 combined - 66 - Bekaert Integrated Annual Report 2022 Respecting human rights Bekaert is firmly committed to complying with national legislation and collective labor agreements. Bekaert adheres to the Universal Declaration of Human Rights and the treaties and recommendations of the International Labor Organization. We respect the rights and dignity of each employee. We promote equal opportunity and do not discriminate against any employee or applicant for employment based on age, race, nationality, social or ethnic descent, gender, physical disability, sexual preference, religion, political preference, or union membership. We foster diversity and inclusion and recognize and respect the cultural identity of our teams in all the countries in which we operate and do business. The recruitment, remuneration, application of employment conditions, training, promotion and career development of our employees are based on professional qualifications only. GRI 2-23 The Bekaert Code of Conduct describes how we put our Bekaert values into practice and which leadership principles or behaviors we expect from every Bekaert employee. Our Code of Conduct covers, among other elements, key areas regarding human rights, child labor and forced labor, and anti-bribery and anti-corruption policy and principles. All Bekaert policies related to responsible business conduct are available on the Bekaert website. GRI 2-23, GRI 2-24, GRI 3-3, GRI 205-1, GRI 205-2, GRI 407-1 GRI 408-1, GRI 409-1 Learning & development We nurture talent through career development and life-long learning. We attach great importance to providing challenging career and personal development opportunities to our employees. Training programs not only include technical and job specific training, but also leadership modules that help our people develop and cooperate in a global business environment. On average, each employee received 34 hours of training in 2022. GRI 3-3, GRI 404-1, GRI 404-2 New leadership framework guides our people development, talent acquisition and people assessment While defining our purpose, ambition, and employer value proposition as well as the other components of our Strategy Compass and Culture Compass, we also reflected on what behaviors will shape our success. These are leadership principles that apply to every member of our team: both to our current employees and in attracting future talents. The leadership principles that will guide us in leading our business, our teams, and ourselves, are: to grow the business; to inspire and engage; and to deliver results. Under the leadership of the CEO and the Group Executive team, and guided by the newly established Center of Expertise for Leadership, Learning, and Wellbeing, a new Leadership Framework for the company was developed and rolled out, which further specifies and deploys the leadership principles. This framework now clearly states what is expected of leaders at all levels of the company. It will serve as a foundation for our internal people development, guide our talent acquisition and selection, and will be an essential part of the performance and potential assessment of our management teams across Bekaert. - 67 - Bekaert Integrated Annual Report 2022 Bekaert Global Graduate program educates our future leaders In 2022 we launched the Bekaert Global Graduate program. It is a development program for fresh graduates, aiming to build a sustainable talent pipeline as well as developing the future leaders of Bekaert. The program includes an induction and training plan that is spread over a period of 18 months and consists of three real job experiences designed to create impact from the start: shopfloor management, a cross-functional project, and an international assignment. Throughout the program, the graduates are mentored, trained, and coached to take up challenges and go beyond the boundaries of their professional expertise and career. This program also reflects a true sense of diversity and inclusion of the target group in terms of gender, nationality, ethnicity, religion, and socioeconomic status. After the successful pilot in the business unit Rubber Reinforcement across Europe, India and China, we will continue with the global roll-out across all Bekaert business units and key locations. Elevation program for team leaders In 2022 we continued developing the leadership skills of our young team leaders. 109 leaders from all over the world joined Elevation, our dedicated development program for first-time leaders. Designed as a blended program, Elevation consists of online self-study, virtual classes and group coaching, and is built in six modules around the employees' career path and the important role team leaders play in it. More details about learning & development in Bekaert are included in Part II: Social Statements of this report. - 68 - Bekaert Integrated Annual Report 2022 Health & safety Bekaert’s global safety approach aims to create a no-harm, risk-free working environment for all our employees and for anyone working at or visiting our premises. We believe that taking care of people is fundamental to the success of the business. To achieve this, we operate with a set of standards, based on internal and external principles and compliance rules, while encouraging a culture of leadership and accountability. GRI 3-3, GRI 403-1 For the fifth year in a row, the safety-related key performance indicators LTIFR and TRIR showed continued good progress. Where 2022 marked a real breakthrough in the reduction of LTIFR (-20%) and TRIR (-26%), there was only a slight improvement in terms of SI rate (from 0.12 in 2021 to 0.11 in 2022). The number of serious incidents leading to life-altering injuries decreased from 8 cases in 2021 to seven in 2022. 6 of these related to hand and finger injuries, 1 to foot and toe injuries. Bekaert is reinforcing its safety program through awareness campaigns, trainings, and dedicated investments to secure safe working conditions for all employees. GRI 403-9 TRIR: Total Recordable Incident Rate (all recorded incidents per million worked hours) LTIFR: Lost Time Incident Frequency Rate (Number of lost time incidents per million worked hours) SI: Serious Injury (incident leading to life-altering injuries) The numbers and progress include the safety data of both Bekaert employees and contractors on our sites, in consolidated entities as well as the joint ventures. More details about Bekaert’s safety performance (consolidated and combined) are included in Part II: Social Statements of this report. Safety champions In 2022, 27 manufacturing plants achieved 1 year without any recordable safety incident. 3 plants were 2 years incident-free. 3 plants achieved 5 years without recordable safety incidents, and 2 plants have been incident-free for 9 or more years. They are Bekaert’s safety champions and lead the way toward a no-harm, risk-free working environment for all. BeCare+: a safety and compliance learning journey In 2022 we launched the BeCare+ development program for site managers and regional operations leaders. This safety, health & environmental training aims at building awareness, knowledge and understanding about SH&E related compliance and liabilities. The program is structured in four streams aligned with the BeCare Safety program: Leadership, Governance, People & Environment at Risk, and People Take Risks. During the training, operational leaders learn to manage SH&E compliance in their plants while they become familiar with the tools that support them. In each online module, participants tackle a specific topic and bring a local SH&E challenge to the table to discuss it with their peers. This focus on action learning makes the theory tangible and lets leaders implement improvements immediately after the training. As a conclusion to the training, the participants gather for a very practical three-day workshop to further deepen their knowledge and work on concrete cases. A further rollout is planned in 2023 for other operations roles. GRI 3-3, GRI 403-2, GRI 403-5 - 69 - Bekaert Integrated Annual Report 2022 Be safe, travel smart: Health & Safety Week focused on road safety in 2022 Every year, we organize a global Health & Safety Week for all our employees. In 2022, we built it around the road safety theme, with focus on both public road and shop floor traffic. Establishing the new possible, Bekaert’s purpose, reflects very well what safety ambition we want to achieve on the road. We simply should not take road accidents as a given by reconciling ourselves that they are unavoidable. Safe behavior on the road should become the new standard. To make it tangible, one of our colleagues shared his personal story in our employee podcast Bits & Bytes, about how he suffered a serious accident on the road. His testimony reinforced why “No harm to anyone” is so important, and how the accident has not only impacted the employee but also his entire family. All sorts of events were organized during our Health & Safety Week 2022 and all were aimed to enhance road safety awareness and to share how we can reduce the chances of incidents. Apart from global webinars, our employees in Asia, Europe and the Americas ran local events, such as inviting local law enforcement to talk about the road hazards, letting employees experience what it's like to have an accident through simulators, by organizing defensive driving lessons, and by engaging local communities by voluntary class teaching about traffic safety in schools. GRI 403-5 Diversity & Inclusion We want Bekaert to be a great place to work. A place that inspires and ignites creativity and where everyone feels safe and welcome. We want our employees to actively take part in building an inclusive workplace for all. With the support of the Bekaert Group Executive (BGE) and the Diversity & Inclusion (D&I) Council, employees are encouraged to form affinity groups and collaborate in generating inspiring ideas and creating positive change. In relation to gender diversity, 28% of the managers and salaried professionals of the Bekaert subsidiaries are female (as per year-end 2022). We are committed to increase this share in support of gender equality. Our target is to achieve a ratio of 40% by 2030 through an annual improvement of +1.5% in the next coming seven years. This target has also been added in the short-term incentives targets for Executive Management in 2022. A diversity target has been retained as one of the 2023 short-term incentives criteria for the management. Bekaert is a truly international organization and embraces the very rich cultural diversity within our team. We employ people from 75 nationalities in 43 countries in the world. More details on diversity are included in the Leadership section of this report and in Part II: Corporate Governance and Social Statements. GRI 3-3 - 70 - Bekaert Integrated Annual Report 2022 Communities •Taking care of people is fundamental to the success of our business. •We support and develop initiatives that help improve the social and environmental conditions in the communities where we are active. •We engage and support external stakeholders in our health & safety, diversity, and environmental programs. •We believe that education is the backbone of society and therefore stimulate support programs that enhance access to school education or that develop the skills and empowerment of people living in underprivileged communities. •Our attention for diversity & inclusion extends beyond our role and responsibility as an employer: we support programs that help break down the social and economic barriers of girls, women, people with a disability, and underserved population groups. •United by our values, we support humanitarian initiatives that provide emergency relief to people in need. - 71 - Bekaert Integrated Annual Report 2022 OUTPUTS INPUTS 1 Our commitment toward society Bekaert strives to be a loyal and responsible partner in the communities where the company is active. Our teams in more than 40 countries are proud to give back to the community. Our activities target improvement programs that enhance education, social conditions, and the environment, particularly in the communities where we are active. Supporting education and social development initiatives In 2022 Bekaert teams have organized support programs that benefit the local communities. To name a few, our teams in India and Chile provided PCs and tablets to schools, making it possible for children to participate to online courses during Covid-lockdowns. Our entities in Ecuador and India supported micro-financing projects that help women set up a small business. Teams all over the world participated in sports and other events to support programs that benefit people with a physical or mental disability or in financial need. Various entities engaged local stakeholders in safety programs during the Bekaert Health & Safety week. We believe that everybody has the right to education and to social and financial safety – regardless of background, gender, or physical or mental ability. That is why many of our support programs have a focus on diversity and inclusion. Three of the shining examples we support are the SHAKTI initiative in India, the Women's Entrepreneur Program in Ecuador and a school for disabled children in Turkey. GRI 3-3, GRI 413-1 ~100 programs in support of local communities and disaster relief Stimulating employment and development in 43 countries € 81 million in income tax payments relative to 2022 consolidated result € 800 000 funding for disaster relief and social & environmental support programs 1 Consolidated entities - 72 - Bekaert Integrated Annual Report 2022 SHAKTI initiative in India Our team in India partners with a local NGO, Pradeept Bharat, to enhance the education and empowerment of girls in underprivileged communities, like the girls from the vulnerable Katkari tribe. During a 12-month program, the SHAKTI initiative helps girls develop art and craft skills like tie-dye printing, handmade quilting, and crocheted fabrics and objects. Our team in India also gave the opportunity of a first selling experience by setting up a booth during the Diwali celebrations, allowing Bekaert colleagues to buy accessories and decoration produced by the ‘Shakti’ girls. Women’s Entrepreneur Program in Ecuador The Women's Entrepreneur Program, launched by Ideal Alambrec Bekaert in 2021, provides coaching and training to women in setting up a small business and developing it. The six-month program has two phases. In the first phase, we help women design a business plan and provide administration support. In the next phase, the participants learn about marketing and social networks. Maribel Díaz, one of the program participants, is the mother of one of the Ideal Alambrec Bekaert employees. Maribel joined the program when her husband passed away in January 2021. Joining the program and establishing a small business has helped her to unlock new opportunities: step by step she expands the product offering in her small craft and stationery shop. She also invested in a machine to design and craft wooden cutting boards and decoration products. Moreover, she develops her customer base by promoting her shop through social networks. Bekaert Group Executive participates in event organized by Bekaert Turkey at school for disabled children In 2022, the Bekaert Group Executive (BGE) team held one of its meetings in our plants in Turkey. During their stay, the BGE members also visited a school supported by the Turkish plants as one of the main community engagement initiatives in the country. The school hosts 22 girls and 18 boys with a disability and Bekaert invested in a playground. - 73 - Bekaert Integrated Annual Report 2022 Community engagement benefiting the environment Another focus area in our community engagement programs is about creating a clean and green environment. In such programs we work together with various stakeholders in our communities and engage them to participate in the events we organize. GRI 3-3, GRI 413-1 Water is life Every year 11 billion kilos of plastic end up in oceans due to a continuous inflow via rivers and canals. Every action to reduce the inflow is meaningful and creates awareness among participants. Bekaert is a supporting partner of River Cleanup, a non-profit organization that organizes river clean-up events, develops technology for permanent and mobile plastic removal from rivers, and educates and creates awareness to stop plastics from entering the eco-systems. Bekaert supports both financially and in-kind, through engineering advice and materials. The organization helps Bekaert organize clean-up events on rivers and along riverbanks in various locations in the world. Purpose is to enhance employee engagement and community relations through enforcing active sustainability awareness and activities together. In 2022 we organized clean-up events in Bossuit, Belgium, and in Van Buren, Arkansas, US. In 2023 we will organize such events in Indonesia and Scotland. 27 June 2022 was a sunny day in Bossuit, Belgium. Our Bekaert colleagues gathered at the banks of the river Scheldt near Bekaert’s Headquarters in Belgium. They removed trash from the river and its banks with the support from River Cleanup, the local fire fighters and local nature ambassadors. Fishing from the boat and walking the riverbanks, the team collected 71 kgs of trash in just one hour. Our colleagues in Van Buren, Arkansas, held a similar clean-up event together with River Cleanup and with ‘Keep Van Buren Beautiful’, a local branche of a US nation-wide non-profit organization whose mission is to beautify and improve the community through voluntary partnerships with citizens, governments and business. The cleanup event took place during Bekaert’s International Health and Safety Week at Lake Lou Emma in Van Buren, Arkansas (US). Lakes, though not connected to the sea, are also water areas where plastic and other trash pollution affect the water quality and biodiversity of fauna and flora – both in and alongside the basins and the connected creeks. The team worked throughout the morning clearing brush and removing around 55 kgs of waste. These two events have been a great start. We are already planning our next events and expect to reach many more communities with actions that reduce water pollution around the world. GRI 303-1 - 74 - Bekaert Integrated Annual Report 2022 Planting trees to grow a forest The Bekaert teams of Bohumín & Petrovice, Czech Republic, organized a tree planting event in the Beskydy mountains in November 2022. This event was part of the kick-off of the You Know Watt program (one of the Bekaert energy consumption reduction initiatives: more information in the ‘Planet’ chapter) in the Czech plants. Bekaert colleagues and family members planted 1 100 trees and look forward to see the new mini-forest grow over the coming years and decades. Supporting social relief The humanitarian impact of the war in Ukraine has changed the face of the world. As a company we have supported various humanitarian efforts through donations and by offering employment and accommodation at different locations where Ukrainian refugees try to rebuild their lives in a safe environment. GRI 3-3, GRI 413-1 Welcoming Ukrainian people to the Bekaert Sládkovičovo family Many Ukrainian refugees crossed boarders to Slovakia. Bekaert took the initiative to actively help refugees in their search for a safe place, a new home, and rewarding work. At the end of 2022 we employed 77 Ukrainian colleagues, most of them female refugees, in our Sládkovičovo plant in Slovakia. We created a friendly and safe environment for them, helped with accommodation, and provided on the job training to make their adaptation and team integration process smooth. All Ukrainian colleagues finalized their production certification and are officially trained to perform several tasks individually and independently. - 75 - Bekaert Integrated Annual Report 2022 Our contribution to humanitarian help for people in and from Ukraine As an international group headquartered in Belgium, we have donated € 337 800 to the Ukraine 12-12 action organized in Belgium in support of the victims of violence in Ukraine. The Consortium 12-12 allocates all funds raised to the Belgian branches of 7 organizations: Red Cross, Unicef, Plan International, Oxfam, Caritas, Doctors of the World, and Handicap International. Moreover, we also donated € 87 200 to the Slovak branch of Red Cross and € 25 000 to the Romanian branch of Red Cross in support of first line help to refugees in the two countries. As a result, a total of € 450 000 was donated, of which € 437 400 funded by the company and € 12 600 collected through employee initiatives. Other community support funding in 2022 Apart from our humanitarian help to people in and from Ukraine, Bekaert has contributed approximately € 350 000 to a wide variety of community support and engagement programs worldwide. Some of these initiatives are steered and coordinated at the Group level, like River Cleanup, while most of them are initiated and managed locally, and often form a combination of monetary support and voluntary work. In 2022 Bekaert supported approximately 100 such programs or events, big and small, in all 25 countries where we run manufacturing facilities. More information can be found in Part II: Social Statements. Politically neutral position Being active in many countries all over the world, we recognize and appreciate the existence of different values and cultural standards in the countries where we operate. We interact with the local governments in a transparent, constructive way. We do not support political institutions and adopt a neutral position with respect to political issues. We do not offer donations or other forms of contributions to political parties, political campaigns and events, or organizations associated with political institutions. We do condemn any act of violence and aggression against people. That is why we actively support humanitarian actions in Ukraine and for Ukrainian refugees. GRI 415-1 PART II Statements Corporate governance statement Corporate governance statement - 78 - Bekaert Integrated Annual Report 2022 On 1 January 2020, the 2020 Belgian Code on Corporate Governance (the “Code 2020”) and the new Belgian Code on Companies and Associations (the “BCCA”) entered into force and became applicable to Bekaert. The Bekaert Corporate Governance Charter and the Articles of Association of the Company were amended to bring both in line with the Code 2020 and the BCCA. Bekaert complies with the provisions of the Code 2020, except with provision 7.6. Contrary to provision 7.6 of the Code 2020 according to which non-executive Directors should receive part of their remuneration in the form of shares in the Company and these shares should be held until at least one year after the non-executive Director leaves the Board and at least three years after the moment of award, non-executive Directors are recommended (but not required): •to build up a personal shareholding of one annual fixed Board fee during the period of their tenure; and •to maintain this until at least one year after the non-executive Director leaves the Board and at least three years after the moment of award. Despite the non-mandatory character of this shareholding principle, the Company believes that the long-term view of shareholders is fairly represented at the Board considering that the Chairman is remunerated in Bekaert shares subject to a three-year lock-up; and that the non-executive Directors who are nominated by the reference shareholder already hold Bekaert shares (or certificates relating thereto). The Code 2020 is available at www.corporategovernancecommittee.be. The Bekaert Corporate Governance Charter is available at www.bekaert.com. - 79 - Bekaert Integrated Annual Report 2022 Board of Directors The Company has adopted the one-tier governance structure: the primary decision-making body is the Board of Directors. The Board of Directors is authorized to carry out all actions that are necessary or useful to achieve the Company’s purpose, except for those for which the General Meeting of Shareholders is authorized by law or by the Articles of Association. The Board of Directors consists of eleven members, who are appointed by the General Meeting of Shareholders. Six of the Directors are appointed from among candidates nominated by the principal shareholder. All prospective Directors are selected and nominated based upon a Board skills matrix. The purpose of the matrix is to assure that the Board has meaningful diversity, skills and experience to meet the current and future challenges of Bekaert and to identify any gaps which potentially can be filled by future Directors. The Chairman and the Chief Executive Officer are never the same individual. The Chief Executive Officer is the only Board member with an executive function. All other members are non-executive Directors. Four of the Directors are independent in accordance with the criteria of Article 7:87, §1 of the BCCA and provision 3.5 of the Code 2020: Henriette Fenger Ellekrog (first appointed in 2020), Eriikka Söderström (first appointed in 2020), Jürgen Tinggren (first appointed in 2019) and Mei Ye (first appointed in 2014). The Board of Directors met on seven occasions in 2022 (seven regular meetings). In addition to its statutory powers and powers under the Articles of Association and the Bekaert Corporate Governance Charter, the Board of Directors discussed the following matters, among others, in 2022: •the corporate strategy and strategic projects; •the IT and digital strategy, including cybersecurity; •the sustainability strategy; •the situation in Russia-Ukraine; •governance, risk and compliance; •the objectives of the principal shareholder of the Company; •the budget for 2022 and 2023; •the succession planning at the Board and Executive Management levels; •the remuneration and the short-term and long-term incentives for the Chief Executive Officer and the other members of the Executive Management; •the share buyback program and the liquidity agreement with Kepler Cheuvreux; •continuous monitoring of the debt and liquidity situation of the Group. - 80 - Bekaert Integrated Annual Report 2022 The oversight responsibility with respect to sustainability/ESG and cybersecurity has been integrated into the existing Board and Board Committees structure. The overall responsibility rests with the Board of Directors, supported by specific responsibilities assigned to the Audit, Risk and Finance Committee (process and controls; audits and expert assurance; disclosures) and the Nomination and Remuneration Committee (Board education; leadership organization and skills; accountability and link to executive pay; talent and culture). Name First appointed Expiry of current Board term Principal occupation² Number of regular/extraordinary meetings attended Chairman Jürgen Tinggren¹ May 2019 May 2023 NV Bekaert SA 7 Chief Executive Officer Oswald Schmid May 2020 May 2023 NV Bekaert SA 7 Members nominated by the principal shareholder Gregory Dalle May 2015 May 2023 Managing Director, Credit Suisse, division Investment Banking and Capital Markets (UK) 7 Charles de Liedekerke3 May 1997 May 2022 Director of companies 3 Christophe Jacobs van Merlen May 2016 May 2024 Managing Director, Bain Capital Europe, LLP (UK) 7 Hubert Jacobs van Merlen3 May 2003 May 2022 Director of companies 3 Maxime Parmentier4 May 2022 May 2023 Chief Executive Officer, Birdie Care Services Ltd (UK) 4 Caroline Storme May 2019 May 2023 R&D Finance Lead Neurology, UCB (Belgium) 7 Emilie van de Walle de Ghelcke May 2016 May 2024 Head of Legal at Sofina (Belgium) 7 Henri Jean Velge May 2016 May 2024 Director of Companies 7 Independent Directors Henriette Fenger Ellekrog May 2020 May 2025 Chief Human Resources Officer, Ørsted (Denmark) 7 Colin Smith3 May 2018 May 2022 Independent Director of and advisor to companies 3 Eriikka Söderström May 2020 May 2025 Independent Director of companies 7 Mei Ye May 2014 May 2023 Independent Director of and advisor to companies 7 1 Jürgen Tinggren is an independent Director. 2 The detailed résumés of the Board members are available in Part I: Leadership of this report. 3 Until the Annual General Meeting of 11 May 2022. 4 As of the Annual General Meeting of 11 May 2022. - 81 - Bekaert Integrated Annual Report 2022 Committees of the Board of Directors Since 1 January 2020, the Board of Directors has two advisory Committees. Audit, Risk and Finance Committee The Audit, Risk and Finance Committee is composed in accordance with Article 7:99 of the BCCA and provision 4.3 of the Code 2020: all its four members are non-executive Directors and two of its members, Eriikka Söderström and Jürgen Tinggren, are independent. Eriikka Söderström’s competence in accounting and auditing is demonstrated by her former position as Chief Financial Officer of F-Secure Corporation, Kone Corporation, and Vacon Plc, all stock-listed on Nasdaq Helsinki. Additionally, she holds audit committee chair experience from mandates at Valmet, Kempower, and Comptel. The members of the Committee have a collective expertise relevant to the sector in which the Company is operating. In 2022, Eriikka Söderström succeeded Hubert Jacobs van Merlen as Chair of the Committee. The Chair was appointed by the members of the Committee. The Chief Executive Officer and the Chief Financial Officer are not members of the Committee but are invited to attend its meetings. This arrangement guarantees the essential interaction between the Board of Directors and the Executive Management. Name Expiry of current Board term Number of regular and extraordinary meetings attended Eriikka Söderström 2025 5 Gregory Dalle¹ 2023 3 Jürgen Tinggren 2023 5 Henri Jean Velge¹ 2024 3 Charles de Liedekerke² 2022 2 Hubert Jacobs van Merlen² 2022 2 ¹ As of May 2022. ² Until May 2022. The Committee had four regular meetings and one extraordinary meeting in 2022. The Statutory Auditor attended four meetings. In addition to its statutory powers and its powers under the Bekaert Corporate Governance Charter, the Committee discussed the following main subjects: •the financing structure of the Group; •the debt and liquidity situation; •the share buyback program and the liquidity agreement with Kepler Cheuvreux; •the activity reports of the internal audit department; •the reports of the Statutory Auditor; •governance, risk and compliance and review of the major risks and the related mitigation plans under Bekaert’s enterprise risk management program; •internal control and risks. - 82 - Bekaert Integrated Annual Report 2022 Nomination and Remuneration Committee The Nomination and Remuneration Committee is composed as required by Article 7:100 of the BCCA and provision 4.3 of the Code 2020: all its three members are non-executive Directors, and the majority of the members is independent. It is chaired by the Chairman of the Board. The Committee’s competence in the field of remuneration policy is demonstrated by the relevant experience of its members. Name Expiry of current Board term Number of meetings attended Jürgen Tinggren 2023 8 Henriette Fenger Ellekrog 2025 8 Christophe Jacobs van Merlen 2024 8 One of the Directors nominated by the principal shareholder, the Chief Executive Officer and the Chief Human Resources Officer are invited to attend the Committee meetings as a guest, without being a member. The Committee had five regular and three extraordinary meetings in 2022. In addition to its statutory powers and its powers under the Bekaert Corporate Governance Charter, the Committee discussed the following main subjects: •talent, leadership and culture; •succession planning at Board and Executive Management levels; •the remuneration report 2021; •the variable remuneration for the Chief Executive Officer and the other members of the Executive Management for their performance in 2021; •the base remuneration for the Chief Executive Officer and the other members of the Executive Management; •the short-term and long-term incentive targets for the Chief Executive Officer and the other members of the Executive Management; •gender diversity. Evaluation The main features of the process for evaluating the Board of Directors, its Committees and the individual Directors are described in this section and in paragraph II.3.4 of the Bekaert Corporate Governance Charter. The Board of Directors, under the lead of the Chairman, assesses at least every three years its own performance and its interaction with the Executive Management, as well as its size, composition, functioning and that of its Committees. The evaluation is carried out through a formal process, whether externally facilitated, in accordance with a methodology approved by the Board. Prior to the end of each Board member’s term, the Nomination and Remuneration Committee, under the lead of the Chairman, evaluates this Board member’s presence at the Board or Board Committee meetings, their commitment and their constructive involvement in discussions and decision-making in accordance with a pre-established and transparent procedure. The Nomination and Remuneration Committee also assesses whether the contribution of each Board member is adapted to changing circumstances. The Board acts on the results of the performance evaluation. Where appropriate, this involves proposing new Board members for appointment, proposing not to re-appoint existing Board members or taking any measure deemed appropriate for the effective operation of the Board. The Chairman always remains available to consider suggestions for improvement of the functioning of the Board or the Board Committees. The non-executive Directors meet at least once a year in the absence of the Chief Executive Officer to assess their interaction with Executive Management. In 2022, the Board of Directors did a self-assessment, focusing on the role and responsibility of the Board, progress on actions points from the 2021 Board self-assessment and overall Board effectiveness. - 83 - Bekaert Integrated Annual Report 2022 Executive Management The Board of Directors has delegated special operational powers to the Bekaert Group Executive ("BGE"), under the leadership of the Chief Executive Officer. The BGE has sub-delegated certain of these operational powers to individuals within their functional or operational responsibility. The BGE is composed of members representing the global Business Units and the global functions. Gunter Van Craen, Chief Digital and Information Officer, became a member of the BGE on 1 June 2022. Curd Vandekerckhove left Bekaert on 27 September 2022. Oswald Schmid took over his role as Divisional CEO Bridon-Bekaert Ropes Group ad interim. The search for a new Divisional CEO Bridon-Bekaert Ropes Group is ongoing. François Desné joined Bekaert as Divisional CEO Steel Wire Solutions on 5 September 2022 in succession to Stijn Vanneste who left Bekaert on 31 August 2022. Annie Xu-Huhmann succeeded Arnaud Lesschaeve as Divisional CEO Rubber Reinforcement on 1 March 2023. Name Position Appointed as BGE member Oswald Schmid Chief Executive Officer Divisional CEO Bridon-Bekaert Ropes Group ad interim1 2019 Gunter Van Craen2 Chief Digital and Information Officer 2022 Taoufiq Boussaid Chief Financial Officer 2019 Kerstin Artenberg Chief Human Resources Officer 2021 Juan Carlos Alonso Chief Strategy Officer 2019 Curd Vandekerckhove3 Divisional CEO Bridon-Bekaert Ropes Group 2012 Annie Xu-Huhmann6 Divisional CEO Rubber Reinforcement 2023 Arnaud Lesschaeve7 Divisional CEO Rubber Reinforcement 2019 Yves Kerstens Divisional CEO Specialty Businesses and Chief Operations Officer 2021 François Desné4 Divisional CEO Steel Wire Solutions 2022 Stijn Vanneste5 Divisional CEO Steel Wire Solutions 2016 ¹ As of 27 September 2022. ² As of 1 June 2022. ³ Until 27 September 2022. ⁴ As of 5 September 2022. 5 Until 31 August 2022. 6 As of 1 March 2023 7 Until 1 March 2023 The China Advisory Board, which was established early 2022 and acts as informal body of experts that provides advice to management and the Board of Directors with respect to the Chinese environment in which the Bekaert group is operating, met four times in 2022. - 84 - Bekaert Integrated Annual Report 2022 Corporate governance statement Diversity At Bekaert, we believe in working together to achieve better performance. As a truly global company, we embrace diversity across all levels in the organization, which is a major source of strength for our Company. This applies to diversity in terms of nationality, cultural background, age and gender, but also in terms of capabilities, business experience, insights and views. Nationality diversity Bekaert employs people of 75 different nationalities in 43 countries around the world. This diversity is mirrored in all levels of the organization, as well as in the composition of the Board of Directors and the BGE. # people # natio-nalities # non-native¹ % non-native Board of Directors 11 7 6 55% BGE 8 5 6 75% ¹ Non-native = nationality other than the country where the registered office of the Company is located, i.e. Belgium. Gender diversity The Company is compliant with the legal requirement that at least one third of the members of the Board of Directors are of the opposite gender. Bekaert adopts a recruitment and promotion policy that aims to gradually generate more diversity, including gender diversity. The targets in support of gender diversity are included in Part I: Our performance in 2022: People, and in Part II: Social Statements of this report. # people % male % female Board of Directors 11 55% 45% BGE 8 87% 13% Age diversity # people 30-50 years old over 50 years old Board of Directors 11 45% 55% BGE 8 13% 87% - 85 - Bekaert Integrated Annual Report 2022 Conduct policies Statutory conflicts of interest in the Board of Directors In accordance with Article 7:96 of the BCCA, a member of the Board of Directors should give the other members prior notice of any agenda items in respect of which he/she has a direct or indirect conflict of interest of a financial nature with the Company and should refrain from participating in the discussion of and voting on those items. A conflict of interest arose on one occasion in 2022. The provisions of Article 7:96 of the BCCA were complied with. On 24 February 2022, Oswald Schmid had a conflict of interest when the Board discussed and had to vote on his short-term variable remuneration on account of his 2021 performance as interim Chief Executive Officer and Chief Executive Officer (€ 1 160 250). Excerpt from the minutes: RESOLUTION On the motion of the Nomination and Remuneration Committee, the Board approves the proposed short-term variable remuneration payable to the Chief Executive Officer on account of his 2021 performance. Other transactions with Directors and Executive Management The Bekaert Corporate Governance Charter contains conduct guidelines with respect to direct and indirect conflicts of interest of the members of the Board of Directors and the BGE that fall outside the scope of Article 7:96 of the BCCA. Those members are deemed to be related parties to Bekaert and must report their direct or indirect transactions with Bekaert or its subsidiaries. Bekaert is not aware of any potential conflict of interest concerning such transactions occurring in 2022 (cf. Note 7.4 to the consolidated financial statements). Code of Conduct The Board of Directors has approved the Bekaert Code of Conduct, which was first issued on 1 December 2004 and last updated in September 2022. It will be reviewed and updated again in 2023. The Bekaert Code of Conduct describes how the Bekaert values are put into practice. It provides principles to follow when confronted with ethical choices and compliance matters. The Bekaert Code of Conduct is included in its entirety in the Bekaert Corporate Governance Charter as Appendix 3. Market abuse The Board of Directors has adopted the Bekaert Dealing Code on 28 July 2016, which became effective on 3 July 2016. The Bekaert Dealing Code is included in its entirety in the Bekaert Corporate Governance Charter as Appendix 4. The Bekaert Dealing Code restricts transactions in Bekaert financial instruments by members of the Board of Directors, the BGE, senior management and certain other persons during closed and prohibited periods. The Code also contains rules concerning the disclosure of executed transactions by leading managers and their closely associated persons through a notification to the Company and to the Belgian Financial Services and Markets Authority ("FSMA"). The Company Secretary is the Dealing Code Officer for purposes of the Bekaert Dealing Code. - 86 - Bekaert Integrated Annual Report 2022 Remuneration report 1. Description of the procedure used in 2022 for (i) developing a remuneration policy for the non-executive Directors and Executive Management and (ii) setting the remuneration of the individual Directors and Executive Managers In accordance with article 7:89/1 of the Belgian Code on companies and associations, the Remuneration Policy for the members of the Board of Directors and the Executive Management (members of the Bekaert Group Executive, ("BGE")) was submitted to the vote of its shareholders at the General Meeting of Shareholders on 12 May 2021. The Remuneration Policy is applicable as of 1 January 2021 and will be submitted to vote by the General Meeting of Shareholders at every material change and in any case at least every 4 years. In accordance with the Remuneration Policy, the 2022 remuneration for the non-executive Directors has been determined by General Meeting of Shareholders on 11 May 2022, acting upon motion of the Board of Directors. The remuneration of the Chairman of the Board of Directors for the performance of all his duties in the Company for the period June 2021 - May 2023 is a fixed amount of € 650 000 per year (for the period June - May). In accordance with the Remuneration Policy, the remuneration for the Chief Executive Officer has been determined by the Board of Directors, acting upon proposals from the Nomination and Remuneration Committee ("NRC"). The Chief Executive Officer is absent from this process and does not take part in the voting nor the deliberations in this regard. The NRC ensures that the Chief Executive Officer’s contract with the Company reflects the remuneration policy. A copy of the Chief Executive Officer’s contract is available to any Director upon request to the Chairman. In accordance with the Remuneration Policy, the remuneration for the members of the BGE other than the Chief Executive Officer has been determined by the Board of Directors acting upon proposals from the NRC. The Chief Executive Officer has an advisory role in this process. The NRC ensures that the contract of each BGE member with the Company reflects the remuneration policy. A copy of each such contract is available to any Director upon request to the Chairman. - 87 - Bekaert Integrated Annual Report 2022 2. Statement of the remuneration policy used in 2022 for the Board of Directors and members of the BGE Board of Directors Purpose and link to strategy Remuneration is set at a level that is sufficient to attract non-executive Directors with competences required to match the Company’s international ambition. They are set to reward non-executive Directors for their role as Board member and specific role as Chairman of the Board, or Chair or member of the Board Committees, as well as their resulting responsibilities and commitments in time. Operation Chairman of the Board of Directors •The remuneration of the Chairman is determined at the beginning of his term of office and is in principle set for the duration of such term. •The remuneration of the Chairman is determined by the General Meeting of Shareholders on the motion of the Board of Directors, acting upon proposals from the NRC. •Fees can be paid partly in cash and partly in Company shares, subject to a three-year holding period from grant date. Other non-executive Directors •The remuneration of the other non-executive Directors is determined for the running financial year. •The remuneration of the other non-executive Directors is determined by the General Meeting of Shareholders on the motion of the Board of Directors, acting upon proposals from the NRC. •Fees are paid in cash, but with the option each year to receive part (0%, 25% or 50%) in Company shares. The remuneration of the Chairman and of the other non-executive Directors is regularly benchmarked with a selected panel of relevant publicly traded industrial Belgian and international companies of similar size and complexity. Executive Director Without prejudice to his remuneration in his capacity as Executive Manager, the Chief Executive Officer is not entitled to receive remuneration for his mandate as executive Director. Fee structure A modular fee structure is applied for non-executive Directors to ensure that the remuneration fairly reflects their role as Board member and specific role as Chairman of the Board of Directors, or Chair or member of the Board Committees, as well as their resulting responsibilities and commitment in time. The remuneration of the Chairman of the Board of Directors is set as follows: •a fixed amount of € 650 000 per year converted into a number of Company shares. The remuneration of each non-executive Director, except the Chairman, is set as follows: •a fixed amount of € 70 000 for the performance of the duties as a member of the Board; •a fixed amount of € 20 000 for the performance of the duties as member or Chair of a Board Committee, and an additional fixed amount of € 5 000 for the Chair of the Audit, Risk and Finance Committee. •The fixed amounts for Board Committee membership or Board Committee chairing are paid on top of the fixed amount for performance of duties as a member of the Board. - 88 - Bekaert Integrated Annual Report 2022 Performance measures The Chairman and the other non-executive Directors do not receive any performance-related remuneration that is directly related to the results of the Company. They are not entitled to participate in any of the Company’s incentive plans and do not receive stock options or pension benefits. Shareholding Contrary to provision 7.6 of the Code 2020 according to which non-executive Directors should receive part of their remuneration in the form of shares in the Company and these shares should be held until at least one year after the non-executive Director leaves the Board and at least three years after the moment of award, non-executive Directors are recommended (but not required) •to build up a personal shareholding of one annual fixed Board fee during the period of their tenure; and •to maintain this until at least one year after the non-executive Director leaves the Board and at least three years after the moment of award. Despite the non-mandatory character of this shareholding principle, the Company believes that the long-term view of shareholders is fairly represented at the Board considering that the Chairman is remunerated in Bekaert shares subject to a three-year lock-up; and that the non-executive Directors who are nominated by the reference shareholder already hold Bekaert shares (or certificates relating thereto). Other items Expenses that are reasonably incurred in the performance of their duties are reimbursed to Directors, upon submission of suitable justification. In making such expenses, the Directors should take into account the Board Member Expense Policy. Members of the BGE Purpose and link to strategy The Company offers competitive total remuneration packages with the objective to attract and retain the best executive and management talent in every part of the world in which the Group is operating. Remuneration is set to reward Executive Managers for performance that creates positive short-term and long-term business results and value creation for the Company. Executive remuneration consists out of fixed pay, benefits and allowance, short-term incentives and long-term incentives. In addition, Executive Managers are required to build and retain a minimum personal holding in Company shares. •Fixed pay is the fixed remuneration paid to an Executive Manager for responsibilities of the job. The Company aims to ensure fixed pay is competitive compared with median market practice. The Executive Manager’s potential for further growth, as well as sustained past performance, drive how fixed pay evolves over time. •Short-term incentives aim to motivate Executive Managers to support and drive the Company’s short-term goals considering a one-year performance horizon. Company overall performance, business unit performance (for Divisional CEO's) and individual performance drive the ultimate outcome. •Long-term incentives reward Executive Managers for contributing to the achievement of the Company’s long-term strategy considering a three-year performance horizon. Performance metrics are objective metrics aligned with the Company strategy. •Benefits and allowances are aligned with local practice and local policies; they are designed to be competitive and cost effective. This includes pension benefits aiming to support Executive Managers in their retirement planning. •A minimum personal shareholding requirement aims to align the interest of the Executive Managers with those of the long-term shareholders by creating a link between their personal wealth and the Company’s long-term performance. This is facilitated by a voluntary share-matching program. - 89 - Bekaert Integrated Annual Report 2022 The remuneration of the Executive Management is benchmarked periodically, but not annually, with a selected panel of relevant publicly traded industrial European companies. Executive remuneration is aligned with the remuneration policy of the Group. Operation The remuneration of both the Chief Executive Officer (in his capacity as Executive Manager) and the other BGE members is determined by the Board of Directors acting on a reasoned recommendation from the NRC. Fixed pay •Fixed pay is set by the Board on the recommendation of the NRC with reference to a selected peer group. •Annual increases are decided by the Board on the recommendation of the NRC and are generally aligned with the average salary increases applying to the broader employee population unless there were significant changes to an individual’s role and/or responsibilities during the year. For the year 2022, for the Belgian based BGE members only the mandatory indexation has been applied. Short-term incentives (STI) •STI for Executive Managers are fully aligned with the Bekaert Variable Pay Plan for all managers worldwide. •STI is earned by reference to performance from 1 January to 31 December and is paid after the year-end of the financial year to which it relates. •Objectives are set by the Board of Directors at the beginning of the year upon the recommendation of the NRC. Those objectives include Group, business unit (for Divisional CEO's) and individual targets, both financial and non-financial, which are relevant in evaluating the annual performance of the Group and progress achieved against the agreed strategic objectives. They are evaluated annually by the Board of Directors, upon recommendation of the NRC. Long-term incentives (LTI) •Executive Managers participate in the Bekaert Performance Share Plan for all senior managers worldwide. •Performance share units are granted each year and represent a conditional Company share that vest after three years upon achievement of pre-set performance conditions. •At the beginning of each three-year performance period, the NRC recommends a set of performance criteria based on objective metrics derived from the long-term business plan. Those three-year performance criteria are documented and submitted by the NRC to the full Board of Directors for approval. •The precise vesting level of the performance share units will depend upon the actual achievement level of the vesting criterion, with no vesting at all if the actual performance is below the defined minimum threshold. Upon achievement of said threshold, there will be a minimum vesting of 50% of the granted performance share units; full achievement of the agreed vesting criterion will lead to a par vesting of 100% of the granted performance share units, whereas there will be a maximum vesting of 300% of the granted performance share units in case of exceptional performance. •Vested performance share units are delivered in the financial year following the performance period. In Europe, this is delivered in Company shares whereas in the rest of the world this is paid in cash. •Upon vesting, the beneficiaries will also receive the value of the dividends relating to the previous three years with respect to such (amount of) performance shares to which the effectively vested performance share units relate. - 90 - Bekaert Integrated Annual Report 2022 Performance measures Short-term incentives (STI) Company performance driving STI in 2022 is based on the below metrics: Business Objective Bekaert Group Weight Threshold Target Maximum Actual Performance Gross Profit 20% 15% 16.5% 18% 15% Underlying EBITDA 50% € 590 mln € 655 mln € 721 mln € 654 mln Working Capital as % of Sales 20% 15% 14% 13% 15% Increase of proportion female managers and white collars 10% 4% 5.4% 7% 1.8% Overall assessment Partially Achieved The Board, acting upon recommendation of the NRC, decided to assess the overall company performance as Partially Achieved leading to a multiplier of 60%. For 2023 the same set of metrics namely gross profit, underlying EBITDA, working capital, ESG gender diversity (% female in white collar workers and manager population) will apply. This is combined with specific business unit and individualized objectives. Given the commercial sensitivity of our short-term goals, the performance goals will be disclosed in the 2023 remuneration report. Long-term incentives (LTI) The vesting criteria regarding to the performance share units issued in 2020, in relation to the 2020-2022 performance horizon, have exceeded the maximum level. Therefore, 300% of the performance share units granted in 2020 have vested related to this performance period for all members of the BGE. The vesting criteria and outcome with regard to the performance share units issued in 2020 in relation to the 2020-2022 performance horizon for members of the BGE were as follows: Business Objective Bekaert Group Weight Threshold Target Maximum Actual Performance Vesting Underlying EBITDA growth 50% € 80 mln € 114 mln € 135 mln € 186 mln 300% Cumulative operational Cash Flow1 50% € 800 mln € 950 mln € 1 000 mln € 1 269 mln 300% Total 300% ¹ Defined as EBITDA-Underlying + impact provisions - Capex in PP&E and intangible assets + disposal impact for PP&E and intangible assets +/- Cash Flows Working Capital. - 91 - Bekaert Integrated Annual Report 2022 Aligned with the grant for the performance period 2022-2024, for the performance period 2023-2025, specific company financials have been selected, more in particular Underlying EBITDA as percentage of Sales, Cumulative operational Cash Flow and Total Shareholder Return (“TSR”) related to peer index. For the performance period 2023-2025 specifically, an ESG metric namely energy efficiency improvement (expressed as MWh per ton product) has been added. Given the commercial sensitivity of our long-term goals, the 2023 – 2025 performance goals will be disclosed at the conclusion of the three-year performance period. Opportunity •The target value of the STI of the Chief Executive Officer is 75% of fixed pay, and 60% of fixed pay for the other members of the BGE. The maximum opportunity is 200% of this target. •The target value of the LTI of the Chief Executive Officer is 85% of fixed pay, and 65% of fixed pay for the other members of the BGE. The maximum vesting is 300% of the target. At par level, the value of the variable remuneration elements of the Chief Executive Officer and the other members of the BGE exceeds 25% of their total remuneration. More than half of this variable remuneration is based on criteria over a period of three years. Minimum shareholding requirement The Chief Executive Officer and the other members of the BGE are required to build a personal shareholding in Company shares within five years from the time of appointment, and to maintain this level for the full period of appointment. To facilitate this, the Company offers a voluntary share-matching plan. The Company matches a personal investment in Company shares each year (up to a maximum 15% of actual gross STI) with a direct grant of Company shares in the third calendar year following this investment, provided the Executive Manager holds on the personal shares. In case the BGE member leaves the Company before the end of the holding period, the Company will match 1/3rd per started calendar year. No matching occurs in case of resignation or termination for cause. The retention period for matching shares expires three years after granting these shares in so far the minimum shareholding requirement has been met. - 92 - Bekaert Integrated Annual Report 2022 3. Remuneration of the non-executive Directors in respect of 2022 The amount of the remuneration granted directly or indirectly to the non-executive Directors, by the Company or its subsidiaries, in respect of 2022 is set forth on an individual basis below. The non-executive Directors only receive fixed remuneration, partially paid out in cash and partially in shares (cfr. section 4). in € Period covering fixed amount Fixed amount for performance of duties as a member of the Board Fixed amount for Board Committee membership and/or chairing Total Jürgen Tinggren1, 5 01.01.2022 - 31.12.2022 650 000 n.a. 650 000 Charles de Liedekerke2, 6 01.01.2022 - 11.05.2022 35 000 10 000 45 000 Hubert Jacobs van Merlen3, 6 01.01.2022 - 11.05.2022 35 000 12 500 47 500 Mei Ye 01.01.2022 - 31.12.2022 70 000 70 000 Gregory Dalle2 01.01.2022 - 31.12.2022 70 000 10 000 80 000 Emilie van de Walle de Ghelcke 01.01.2022 - 31.12.2022 70 000 70 000 Christophe Jacobs van Merlen4 01.01.2022 - 31.12.2022 70 000 20 000 90 000 Henri Jean Velge2 01.01.2022 - 31.12.2022 70 000 10 000 80 000 Colin Smith6 01.01.2022 - 11.05.2022 35 000 35 000 Caroline Storme 01.01.2022 - 31.12.2022 70 000 70 000 Henriette Fenger Ellekrog4 01.01.2022 - 31.12.2022 70 000 20 000 90 000 Eriikka Söderström2, 3 01.01.2022 - 31.12.2022 70 000 22 500 92 500 Maxime Parmentier7 11.05.2022 - 31.12.2022 35 000 35 000 Total Directors’ Remuneration 1 455 000 ¹ Chairman, Chairman of the Nomination and Remuneration Committee, member of the Audit, Risk and Finance Committee. ² Member of the Audit, Risk and Finance Committee. ³ Chair of the Audit, Risk and Finance Committee which has been transferred from Hubert Jacobs van Merlen to Eriikka Söderström on 11 May 2022. ⁴ Member of the Nomination and Remuneration Committee. 5 Share grant of € 650 000 on 31 May 2022 relating to the period June 2022 - May 2023. 6 Term expired on 11 May 2022. 7 Member of the Board as of 11 May 2022. - 93 - Bekaert Integrated Annual Report 2022 4. Share-based remuneration for non-executive Directors The fixed fee of the Chairman is paid 100% in Company shares, subject to a three-year holding period from grant date. For the other non-executive Directors, the fixed fee for performance of duties as a member of the Board are paid in cash, but with the option each year to receive part of the fixed fee for duties as a member of the Board (0%, 25% or 50%) in Company shares. Fixed fees for performance of duties as member or Chair of a Board Committee are paid in cash. Set out below are the number of Company shares granted to non-executive Directors in 2022. For the avoidance of doubt, the below amounts are included in the remuneration overview of the non-executive Directors in section 3. Non-executive director Percentage shares Gross amount in € Number of shares after taxes End retention period Chairman Jürgen Tinggren¹ 100% 650 000 8 411 31/5/2025 Non-executive Directors nominated by the principal shareholder Gregory Dalle 50% 35 000 519 n.a. Charles de Liedekerke —% — — n.a. Christophe Jacobs van Merlen 50% 35 000 485 n.a. Hubert Jacobs van Merlen 25% 17 500 254 n.a. Maxime Parmentier n.a. n.a. n.a. n.a. Caroline Storme 50% 35 000 471 n.a. Emilie van de Walle de Ghelcke 50% 35 000 471 n.a. Henri Jean Velge 50% 35 000 471 n.a. Independent non-executive Directors Henriette Fenger Ellekrog 25% 17 500 257 n.a. Colin Smith —% — — n.a. Eriikka Söderström 50% 35 000 514 n.a. Mei Ye 25% 17 500 227 n.a. Total 912 500 12 080 ¹ The share grant of € 650 000 covers the period June 2022 - May 2023. 5. Remuneration of the Chief Executive Officer in respect of 2022 in his capacity as executive Director Without prejudice to the remuneration in the capacity as Executive Manager, the Chief Executive Officer did not receive remuneration for the mandate as executive Director. - 94 - Bekaert Integrated Annual Report 2022 6. Remuneration of the Chief Executive Officer in respect of 2022 The amount of the remuneration and other benefits granted directly or indirectly to the Chief Executive Officer, by the Company or its subsidiaries, in respect of 2022 for his role as Chief Executive Officer is set forth below: Chief Executive Officer Comments Oswald Schmid Period 01.01.2022-31.12.2022 Fixed pay 825 000 Includes base remuneration and foreign director fees STI 297 000 Annual variable remuneration, based on 2022 performance LTI 1 456 514 Value of 32 871 vested performance share units (performance period 2020-2022) Pension 206 250 Defined-Contribution Share-matching 7 346 2022 Company matching of 2020 personal investment in Company shares (210 shares) Other remuneration elements 119 854 Includes company car, risk insurances and housing allowance Total remuneration 2 911 964 Variable remuneration expressed as % of total 60% Sum of STI, LTI and Share-Matching Fixed remuneration expressed as % of total 40% Sum of Fixed Pay, Pension and Other The evaluation of STI performance criteria over 2022 leads to a payout of 48% versus target for the CEO. There has been an LTI vesting at maximum level of 300% versus target for the performance share units issued on 21 January 2020 covering performance period 2020-2022. The Remuneration Policy stipulates that the target LTI is 85% of fixed pay for the CEO. In March 2023, performance share units have been granted with respect to performance period 2023-2025 considering a 85% LTI target. There has been a Company matching in 2022 of the personal investment of shares done in 2020 in accordance with the Personal Shareholding Requirement Plan. - 95 - Bekaert Integrated Annual Report 2022 7. Remuneration of the other members of the BGE in respect of 2022 The amount of the remuneration and other benefits granted directly or indirectly to the BGE members other than the Chief Executive Officer, by the Company or its subsidiaries, in respect of 2022 is set forth below on a global basis. The remuneration includes pro rata remuneration of François Desné who joined during 2022, Gunter Van Craen who promoted during 2022, and of Curd Vandekerckhove and Stijn Vanneste who left. Remuneration Comments Fixed pay 3 024 330 Includes base remuneration as well as foreign director fees STI 1 151 437 Annual variable remuneration, based on 2022 performance LTI 4 110 328 Value of 92 763 vested performance share units (performance period 2020-2022) Pension 752 179 Defined-Contribution, Defined-Benefit and Cash Balance pension Share-matching 114 699 2022 Company matching of 2020 personal investment in Company shares (3 279 units) Other remuneration elements 376 907 Includes company car, risk insurances and school fees Total remuneration 9 529 880 Variable remuneration expressed as % of total 56% Sum of STI, LTI and Share-Matching Fixed remuneration expressed as % of total 44% Sum of Fixed Pay, Pension and Other The evaluation of STI performance criteria over 2022 leads to a payout of 75% (weighted average) versus target. The STI for François Desné and Gunter Van Craen was pro-rated in accordance with their appointment date. For Curd Vandekerckhove and Stijn Vanneste no STI has been paid for 2022 following their departure. The vesting criterion with regard to the performance share units issued in 2020, in relation to the 2020-2022 performance horizon, has exceeded the maximum level. As a consequence, 300% of the performance share units granted in 2020 have vested in 2022 for the qualifying BGE members (we refer to section 8). The pension expense captures a combination of several pension arrangements in place in the different work locations of the BGE members; being Belgium and France. The amount mentioned in the above table represents the annual employer contribution for the relevant defined-contributions plans, the accrued pay credit for the relevant cash balance plan, the employer contribution into the mandatory second pillar arrangements and IAS 19 service cost for defined-benefit plans with a collective funding basis. - 96 - Bekaert Integrated Annual Report 2022 8. Share-based remuneration for members of the BGE As of 2018, the long-term incentives are delivered solely through performance share units granted under the 2018- 2020 Performance Share Plan proposed by the Board of Directors and approved by the Annual General Meeting on 9 May 2018. On the recommendation of the Board of Directors, the Annual General Meeting of Shareholders has approved on 12 May 2021 the Remuneration Policy. Based on this Policy, a Performance Share Plan was issued under which performance share grants have and will occur as of 2022 up to and including 2025. Up to 2017 long-term incentives have been based on a combination of stock options (or, outside of Europe, stock appreciations rights) and performance share units. The Chief Executive Officer and the other members of the BGE participate in a voluntary share-matching plan. Performance Share Units Performance share units related to the performance period 2022-2024 have been granted to the Executive Management on 4 March 2022. Following the appointment as member of the Executive Management on 1 June 2022, additional performance share units have been granted on 25 August 2022 to Gunter Van Craen reflecting the increase in target LTI from 30% to 65% of fixed pay. Following the start of François Desné on 5 September 2022, performance share units have been granted on 26 September 2022. Company financials retained as performance targets covering the 2022-2024 performance period are EBITDA Underlying growth, elements of cumulative cash flow and TSR relative to peer index. The peer group is a selection of 19 listed industrial companies, European based with global reach, similar in size, employees and market cap. The tables below set forth the overview of share-based remuneration granted to BGE members, including the main characteristics of each plan. Plan name Perfor-mance period Performance measures Grant Date Vesting Date Number of PSU granted Number of unvested PSU start of year Granted Forfeited/ Expired Vested (300%) Number of unvested PSU end of year Oswald Schmid – Chief Executive Officer PSP 2018-2020 2020-2022 EBITDA-U & Cum. CF 21/1/2020 31/12/2022 10 957 10 957 0 0 32 871 0 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 15/1/2021 31/12/2023 10 179 10 179 10 179 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 9/9/2021 31/12/2023 7 966 7 966 7 966 PSP 2022-2024 2022-2024 EBITDA-U, Cum. CF & TSR 3/4/2022 31/12/2024 18 532 18 532 18 532 TOTAL 29 102 18 532 0 32 871 36 677 - 97 - Bekaert Integrated Annual Report 2022 Plan name Perfor-mance period Performance measures Grant Date Vesting Date Number of PSU granted Number of unvested PSU start of year Granted Forfeited/ Expired Vested (300%) Number of unvested PSU end of year Taoufiq Boussaid - Chief Financial Officer PSP 2018-2020 2020-2022 EBITDA-U & Cum. CF 21/1/2020 31/12/2022 9 810 9 810 29 430 0 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 15/1/2021 31/12/2023 10 762 10 762 10 762 PSP 2022-2024 2022-2024 EBITDA-U & Cum. CF & TSR 3/4/2022 31/12/2024 6 949 6 949 6 949 TOTAL 20 572 6 949 0 29 430 17 711 Kerstin Artenberg - Chief Human Resources Officer PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 19/8/2021 31/12/2023 5 683 5 683 5 683 PSP 2022-2024 2022-2024 EBITDA-U & Cum. CF & TSR 3/4/2022 31/12/2024 6 314 6 314 6 314 TOTAL 5 683 6 314 0 0 11 997 Juan Carlos Alonso - Chief Strategy Officer PSP 2018-2020 2020-2022 EBITDA-U & Cum. CF 21/1/2020 31/12/2022 8 409 8 409 25 227 0 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 15/1/2021 31/12/2023 8 007 8 007 8 007 PSP 2022-2024 2022-2024 EBITDA-U & Cum. CF & TSR 3/4/2022 31/12/2024 5 956 5 956 5 956 TOTAL 16 416 5 956 0 25 227 13 963 Yves Kerstens - Div. CEO SPB and Chief Operations Officer PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 19/8/2021 31/12/2023 5 732 5 732 5 732 PSP 2022-2024 2022-2024 EBITDA-U & Cum. CF & TSR 3/4/2022 31/12/2024 7 783 7 783 7 783 TOTAL 5 732 7 783 0 0 13 515 Curd Vandekerckhove - former Div. CEO BBRG PSP 2018-2020 2020-2022 EBITDA-U & Cum. CF 21/1/2020 31/12/2022 10 447 10 447 10 447 0 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 15/1/2021 31/12/2023 9 948 9 948 9 948 0 PSP 2022-2024 2022-2024 EBITDA-U & Cum. CF & TSR 3/4/2022 31/12/2024 7 400 7 400 7 400 0 TOTAL 20 395 7 400 27 795 0 0 Stijn Vanneste - former Div. CEO SWS PSP 2018-2020 2020-2022 EBITDA-U & Cum. CF 21/1/2020 31/12/2022 8 378 8 378 8 378 0 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 15/1/2021 31/12/2023 8 545 8 545 8 545 0 PSP 2022-2024 2022-2024 EBITDA-U & Cum. CF & TSR 3/4/2022 31/12/2024 6 356 6 356 6 356 0 TOTAL 16 923 6 356 23 279 0 0 - 98 - Bekaert Integrated Annual Report 2022 Plan name Perfor-mance period Performance measures Grant Date Vesting Date Number of PSU granted Number of unvested PSU start of year Granted Forfeited/ Expired Vested (300%) Number of unvested PSU end of year Arnaud Lesschaeve - Div. CEO RR PSP 2018-2020 2020-2022 EBITDA-U & Cum. CF 21/1/2020 31/12/2022 9 428 9 428 28 284 0 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 15/1/2021 31/12/2023 10 043 10 043 10 043 PSP 2022-2024 2022-2024 EBITDA-U & Cum. CF & TSR 3/4/2022 31/12/2024 6 678 6 678 6 678 TOTAL 19 471 6 678 0 28 284 16 721 François Desné - Div. CEO SWS PSP 2022-20241 2022-2024 EBITDA-U, Cum. CF & TSR 26/9/2022 31/12/2024 12 864 12 864 0 12 864 TOTAL 0 12 864 0 0 12 864 Gunter Van Craen - Chief Digital and Information Officer PSP 2018-2020 2020-2022 EBITDA-U & Cum. CF 17/8/2020 21/12/2022 3274 3 274 9 822 0 PSP 2018-2020 2021-2023 EBITDA-U & Cum. CF 15/1/2021 31/12/2023 2925 2 925 2 925 PSP 2022-2024 2022-2024 EBITDA-U, Cum. CF & TSR 3/4/2022 31/12/2024 2379 2 379 0 2 379 PSP 2022-2024 2022-2024 EBITDA-U, Cum. CF & TSR 25/8/2022 31/12/2024 1926 1 926 1 926 TOTAL 6 199 4 305 0 9 822 7 230 ¹ This Performance Grant is based on 65% of a (pro-rated) annual fixed pay (4 098 units) and an additional grant of 8 767 units as sign-on award for the loss of the long-term incentives at his former employer - 99 - Bekaert Integrated Annual Report 2022 Stock Options Set out below are the number of stock options exercised or forfeited in 2022 in relation to the previous long-term incentive plans for BGE members. Where applicable, the table includes grants made prior to BGE appointment. The options have been offered to the beneficiaries free of charge. Each accepted option entitles the holder to acquire one existing share of the Company against payment of the exercise price, which is conclusively determined at the time of the offer and which is equal to the lower of: (i) the average closing price of the Company shares during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer. Subject to the closed and prohibited trading periods and to the plan rules, the options can be exercised as from the beginning of the fourth calendar year following the date of their offer until the end of the tenth year following the date of their offer. The stock options that were exercisable in 2022 are based on the grants of the Stock Option Plan 2015-2017 and on the predecessor plans to the Stock Option Plan 2015-2017. Main plan characteristics Movement over 2022 Plan name Offer date Grant date Vesting date End exercise period Number of options granted Exercise price (in €) Number of SOP start of year Forfeited/ expired Exercised Number of SOP end of year Oswald Schmid - Chief Executive Officer None TOTAL 0 0 0 0 Taoufiq Boussaid - Chief Financial Officer None TOTAL 0 0 0 0 Kerstin Artenberg - Chief Human Resources Officer None TOTAL 0 0 0 0 Juan Carlos Alonso - Chief Strategy Officer None TOTAL 0 0 0 0 Yves Kerstens - Div. CEO SPB and Chief Operations Officer None TOTAL 0 0 0 0 - 100 - Bekaert Integrated Annual Report 2022 Main plan characteristics Movement over 2022 Plan name Offer date Grant date Vesting date End exercise period Number of options granted Exercise price (in €) Number of SOP start of year Forfeited/ expired Exercised Number of SOP end of year Curd Vandekerckhove - former Div. CEO BBRG SOP 2010-2014 19/12/2013 17/2/2014 1/1/2017 18/12/2023 14 000 25.380 14 000 -14 000 0 SOP 2010-2014 18/12/2014 16/2/2015 1/1/2018 17/12/2024 15 000 26.055 15 000 15 000 SOP 2015-2017 17/12/2015 15/2/2016 1/1/2019 16/12/2025 10 000 26.375 10 000 10 000 SOP 2015-2017 15/12/2016 13/2/2017 1/1/2020 14/12/2026 15 000 39.426 15 000 15 000 SOP 2015-2017 21/12/2017 20/2/2018 1/1/2021 20/12/2027 9 000 34.600 9 000 9 000 TOTAL 63 000 0 -14 000 49 000 Stijn Vanneste - former Div. CEO SWS SOP 2015-2017 17/12/2015 15/2/2016 1/1/2019 16/12/2025 6 250 26.375 6 250 -6 250 0 SOP 2015-2017 15/12/2016 13/2/2017 1/1/2020 14/12/2026 12 500 39.426 12 500 12 500 SOP 2015-2017 21/12/2017 20/2/2018 1/1/2021 20/12/2027 10 000 34.600 10 000 10 000 TOTAL 28 750 0 -6 250 22 500 Arnaud Lesschaeve - Div. CEO RR None TOTAL 0 0 0 0 François Desné - Div. CEO SWS None TOTAL 0 0 0 0 Gunter Van Craen - Chief Digital and Information Officer None TOTAL 0 0 0 0 Stock Appreciation Rights There are no outstanding stock appreciation rights or movements done in 2022 in relation to BGE members. - 101 - Bekaert Integrated Annual Report 2022 Share-matching Plan The table below sets forth the number of shares matched by the Company for BGE members. There has been a Company Share Matching in 2022 relating to the personal investment in shares on 31 March 2020 following the three-year retention period. Date personal investment End holding period Number of acquired shares Acquired in 2022 Matched in 2022 Forfeited for matching Oswald Schmid – Chief Executive Officer 31/3/2020 31/12/2022 210 210 31/3/2021 31/12/2023 2 096 31/3/2022 31/12/2024 4 910 Taoufiq Boussaid - Chief Financial Officer 31/3/2020 31/12/2022 1 038 1 038 31/3/2021 31/12/2023 838 31/3/2022 31/12/2024 2 054 Kerstin Artenberg - Chief Human Resources Officer 31/3/2022 31/12/2024 1 711 Juan Carlos Alonso - Chief Strategy Officer 31/3/2020 31/12/2022 971 971 31/3/2021 31/12/2023 922 31/3/2022 31/12/2024 1 760 Yves Kerstens - Div. CEO SPB and Chief Operations Officer 31/3/2022 31/12/2024 1 725 Curd Vandekerckhove - former Div. CEO BBRG 31/3/2020 31/12/2022 2 413 2 413 31/3/2021 31/12/2023 2 114 2 114 Stijn Vanneste - former Div. CEO SWS 31/3/2020 31/12/2022 1 608 1 608 31/3/2021 31/12/2023 1 816 1 816 31/3/2022 31/12/2024 1 597 1 597 Arnaud Lesschaeve - Div. CEO RR 31/3/2020 31/12/2022 1 270 1 270 31/3/2021 31/12/2023 698 - 102 - Bekaert Integrated Annual Report 2022 9. Departure of Executive Managers Curd Vandekerckhove, the former Divisional CEO BBRG, has decided to leave Bekaert as of 28 September 2022. Stijn Vanneste, the former Divisional CEO SWS, has decided to leave Bekaert as of 1 September 2022 . Date personal investment End holding period Number of acquired shares Acquired in 2022 Matched in 2022 Forfeited for matching François Desné - Div. CEO SWS None Gunter Van Craen - Chief Digital & Information Officer None - 103 - Bekaert Integrated Annual Report 2022 10. Company’s right of reclaim The Board of Directors has the discretion to adjust (malus) or reclaim (claw back) some or all of the value of awards of performance related payments to the Executive Management in the event of •significant downward restatement of the financial results of Bekaert, •material breach of the Bekaert Code of Conduct or any other Bekaert compliance policies, •breach of restrictive covenants by which the individual has agreed to be bound, •fraud, gross misconduct or gross negligence by the individual, which results into significant losses or serious reputation damage to Bekaert. The Board did not make use of this right in 2022. 11. Executive remuneration in a wider context The main difference in remuneration policy between the Executive Management and employees in general, is the balance between fixed and performance-related remuneration such as short-term and long-term incentives. Overall, the percentage of performance related remuneration, in particular longer-term incentives, is greater for the Executive Management. This reflects that Executive Managers have greater freedom to act and that the consequences of their decisions are likely to have a broader and more far-reaching time span of effect. The remuneration for Executive Managers is however aligned with the remuneration structures of the broader group of employees: •The Group’s managers share the same scorecard as the Executive Management for measuring the Group and business unit performance with an impact on their STI. •In addition, around 100 of the Group’s senior managers receive performance share awards on terms that are similar to the conditions that apply to the members of the BGE. The ratio of the Chief Executive Officer to the lowest remuneration of the employees of NV Bekaert SA in Belgium is 68:1. The table below sets forth the average remuneration of the members of the Board of Directors and the Executive Management, the average remuneration of other employees (on a full-time equivalent basis) and some key financial Company metrics over the last 5 calendar years. - 104 - Bekaert Integrated Annual Report 2022 2018 2019 2020 2021 2022 Company remuneration Non-executive Directors¹ Average remuneration (€) 95 768 121 629 104 000 111 458 132 273 Year-on-year difference (%) +10.5% +27.0% -14.5% +7.2% +18.7% CEO Average remuneration (€) 1 135 011 1 787 480 1 225 527 2 356 337 2 911 964 Year-on-year difference (%) -27,4% +57.5% -31.4% +92.3% +23.6% Other BGE members Average remuneration (€) 609 540 748 023 839 736 1 611 657 1 288 128 Year-on-year difference (%) -32,4% +22.7% +12.3% +91.9% -20.1% Other employees Average remuneration (€) 76 067 77 757 79 859 87 727 88 402 Year-on-year difference (%) +5.1% +2.2% +2.7% +9.9% +0.8% Key Company metrics EBITDA-underlying Amount in million (€) 426 468 479 686 654 Year-on-year difference (%) -14.3% +9.9% +2.4% +43.2% -4.7% Sales Amount in million (€) 4 305 4 322 3 772 4 840 5 652 Year-on-year difference (%) +5.1% +0.4% -12.7% +28.3% +16.8% Working Capital Amount in million (€) 875 699 535 678 850 Year-on-year difference (%) -1.5% -20.1% -23.5% +26.6% +25.5% Company share price (as at 31st Dec) Share price (€) 21.06 26.50 27.16 39.14 36.28 ¹ Through 2019, the remuneration of the Directors was based on the number of attended Board meetings The total remuneration of the non-executive Directors is described in detail in section 3 of this remuneration report. It is set as a fixed amount for the performance of the duties for the Chairman and for a member of the board, and as a fixed amount for the performance of the duties as a member or Chair of a Board Committee. The board fees did not change in the past 2 years, therefore, changes from one year to another are explained by board composition. The remuneration of the CEO and other BGE members include the compensation elements of the remuneration tables in section 6 and 7 of this remuneration report. Therefore, variations from year to year are mainly influenced by the annual variable remuneration as well as by the vesting performance share units which are linked to company performance and share price of a vested performance share unit. The average remuneration of the other employees of the company is based on the average gross annual income of all employees of NV Bekaert SA in Belgium, excluding BGE members and senior management. This gross annual income includes the base salary, variable pay, benefits and performance share units for the qualifying managers. Changes from one year to another are explained by employee population composition and is influenced by annual variable remuneration as well by the vesting performance share units which are linked to company performance and share price of a vested performance share unit. - 105 - Bekaert Integrated Annual Report 2022 12. Derogations from the procedures for implementing the remuneration policy Upon recruitment of François Desné, Divisional CEO Steel Wire Solutions, a sign-on award was granted in order to compensate for the loss of a retention award, and for the loss of his short-term and long-term incentives at his previous employer. In order to compensate in a similar way, the short-term incentive award has been granted in a form of a cash award, whereas the long-term incentive award has been granted in a form of a long-term equity award. Accordingly, the cash sign-on award amounted to € 500 000 and the long-term incentive award amounted to a grant of 8 767 performance share units. These awards are subject to reimbursement in the event of resignation or in case of termination for cause. Shares The Bekaert share in 2022 The Bekaert share outperformed the reference index, Euronext Brussels BEL Mid, by 4.23% in 2022 but lost 7.30% comparing to the year-end closing price of 2021. Share identification The Bekaert share is listed on Euronext Brussels as ISIN BE0974258874 (BEKB) and was first listed in December 1972. The ICB sector code is 2727 Diversified Industrials. 50th anniversary of Bekaert share-listing Euronext Brussels hosted us at the end of 2022 to ring the opening bell in celebration of the 50th listing anniversary of Bekaert. - 106 - Bekaert Integrated Annual Report 2022 Share performance 2014 2015 2016 2017 2018 2019 2020 2021 2022 Price as at 31 December (in €) 26.34 28.38 38.48 36.45 21.06 26.50 27.16 39.14 36.28 Price high (in €) 30.19 30.00 42.45 49.92 40.90 28.26 28.50 42.56 45.60 Price low (in €) 21.90 22.58 26.56 33.50 17.41 19.38 13.61 27.34 24.84 Price average closing (in €) 27.15 26.12 37.06 42.05 28.21 23.96 19.95 36.33 34.02 Daily volume 82 813 120 991 123 268 121 686 154 726 96 683 72 995 68 749 69 143 Daily turnover (in millions of €) 2.1 3.1 4.5 5.0 4.4 2.3 1.5 2.5 2.4 Annual turnover (in millions of €) 527 804 1 147 1 279 1 121 592 386 641 615 Velocity (% annual) 35 52 53 51 65 41 31 29 30 Velocity (% adjusted free float) 59 86 88 86 109 68 52 49 50 Free float (%) 55.7 56.7 59.2 59.6 59.3 59.3 59.5 58.7 55.6 Share trading The average daily trading volume was about 70 000 shares in 2022. The volume peaked on 3 January, when 206 975 shares were traded. On 31 December 2022, Bekaert had a market capitalization of € 2.1 billion and a free float market capitalization of € 1.2 billion. The free float was 55.6% and the free float band 60%. The liquidity agreement that Bekaert entered into with Kepler Cheuvreux on 2 September 2021 was renewed in September 2022 for an additional, renewable one-year period. Bekaert has the right under the liquidity contract to terminate it upon reasonably short prior notice. The agreement provides for the purchase and sale by Kepler Cheuvreux of Bekaert shares on the regulated market of Euronext Brussels. Bekaert made 100 000 treasury shares available to Kepler Cheuvreux. The purpose of the liquidity contract is to support the liquidity of the Bekaert shares. In March 2022, Bekaert launched a share buyback program with the purpose to reduce the issued share capital of the Company. See below for more information. Shareholding and notifications In connection with the entry into force of the Act of 2 May 2007 on the disclosure of significant participations (the Transparency Act) Bekaert has, in its Articles of Association, set the thresholds of 3% and 7.50% in addition to the legal thresholds of 5% and each multiple of 5%. An overview of the notifications of participations of 3% or more, if any, can be found in the Parent Company Information section of this Annual Report (Interests in share capital). On 8 December 2007, Stichting Administratiekantoor Bekaert disclosed in accordance with Article 74 of the Act of 1 April 2007 on public takeover bids that it was holding individually more than 30% of the securities with voting rights of the Company on 1 September 2007. Based on a detailed shareholder identification survey in April 2022 and considering the subsequent transparency notifications, private banking, and treasury share movements until the end of 2022, as per 31 December 2022, Stichting Administratiekantoor Bekaert and parties acting in concert owned 37% of the shares. Institutional shareholders held approximately 33% of the shares and retail and private banking approximately 23%. Treasury shares represented 7%. - 107 - Bekaert Integrated Annual Report 2022 Capital structure Per 31 December 2022, the capital of the Company amounted to € 173 737 000 and is represented by 59 029 252 shares without par value. The shares are in registered or non-material form. All shares have the same rights. Authorized capital The Board of Directors has been authorized by the General Meeting of Shareholders of 13 May 2020 to increase the capital, in one or more times, with a maximum amount of € 177 793 000 (exclusive of the issue premium). The Board of Directors may use this authorization until 23 June 2025. The Board of Directors is also expressly authorized to increase the capital, even after the date that the Company receives the notification from the Belgian Financial Services and Markets Authority (FSMA) that it has been informed of a public take-over bid for the Company’s securities, within the limits authorized by the applicable legal provisions. This authorization shall be valid regarding public takeover bids of which the Company receives the aforementioned communication at most three years after 13 May 2020. Stock option plans, performance share plans and share-matching plan A total of 26 400 subscription rights were exercised in 2022 under the Stock Option Plan 2005-2009. This resulted in the issuance of 26 400 new Bekaert shares and an increase of the capital by € 79 610.69 and of the share premium by € 668 433.31. There are no outstanding subscription rights under the Stock Option Plan 2005-2009. On 31 December 2021, the Company held 3 145 446 own shares. Between 1 January 2022 and 31 December 2022, a total of 130 300 shares were transferred to (former) employees following the exercise of stock options under SOP 2010-2014 and SOP 2015-2017. Bekaert sold 13 757 shares to members of the BGE in the framework of the Bekaert personal shareholding requirement and transferred 2 445 shares to members of the BGE under the share-matching plan. A total of 12 080 shares were granted to the Chairman and other non-executive Directors as part of their remuneration for the performance of their duties. A total of 256 760 shares were disposed of following the vesting of 256 760 performance share units under the performance share plan. Bekaert bought back 3 095 629 shares in total and cancelled 1 449 409 shares (see below). Including the transactions exercised under the liquidity agreement with Kepler Cheuvreux, the balance of own shares held by the Company on 31 December 2022 was 4 380 475. A first grant of 131 407 equity settled performance share units under the Performance Share Plan 2022-2024 was made on 4 March 2022. In addition, a mid-year grant of 16 073 equity settled performance share units in aggregate was made on 25 August and 26 September 2022. Each performance share unit entitles the beneficiary to acquire one performance share subject to the conditions of the Performance Share Plan 2022-2024. These performance share units will vest following a vesting period of three years, conditional to the achievement of preset performance targets. The precise vesting level of the performance share units will depend upon the actual achievement level of the vesting criterion, with no vesting at all if the actual performance is below the defined minimum threshold. Upon achievement of said threshold, there will be a minimum vesting of 50% of the granted performance share units; full achievement of the agreed vesting criterion will lead to a par vesting of 100% of the granted performance share units, whereas there will be a maximum vesting of 300% of the granted performance share units in case of exceptional performance. Detailed information about capital, shares, stock option plans and performance share plans is given in the Financial Statements (Note 6.13 to the consolidated financial statements). - 108 - Bekaert Integrated Annual Report 2022 Dividend distribution and share buyback The Board of Directors will propose that the Annual General Meeting to be held on 10 May 2023 approve the distribution of a gross dividend of € 1.65 per share. The Board of Directors reconfirms the Dividend Policy which foresees, insofar as the profit permits, a stable or growing dividend while maintaining an adequate level of cash flow in the Company for investment and self-financing in support of growth. Over the longer term, the Company strives for a pay-out ratio of 40% of the result for the period attributable to equity holders of Bekaert. On 25 February 2022, Bekaert announced that its Board approved a share buyback program for a total amount up to € 120 million over a period of up to twelve months under the authorization granted by the Extraordinary General Meeting of Shareholders of 13 May 2020. The purpose of the program was to reduce the issued share capital of the Company. The first tranche of the program began on 18 March 2022 and ended on 4 May 2022. During the first tranche, the Company repurchased 766 295 ordinary shares for an aggregate amount of € 27.3 million. The second tranche began on 11 May 2022 and ended on 22 July 2022. During the second tranche, the Company repurchased 864 817 ordinary shares for an aggregate amount of € 30 million. The third tranche began on 29 July 2022 and ended on 26 October 2022. During the third tranche, the Company repurchased 1 036 303 ordinary shares for an aggregate amount of € 30 million. The fourth and last tranche began on 18 November 2022 and ended on 13 February 2023. During the fourth tranche, the Company repurchased 820 929 ordinary shares for an aggregate amount of € 30 million. On 29 June 2022, Bekaert canceled 1 449 409 of the repurchased shares. The balance of the repurchased shares, were cancelled on 24 February 2023. in € 2015 2016 2017 2018 2019 2020 2021 2022 Total gross dividend 0.900 1.100 1.100 0.700 0.350 1.000 1.500 1.6501 Net dividend² 0.657 0.770 0.770 0.490 0.245 0.700 1.050 1.155 Coupon number 7 8 9 10 11 12 13 14 ¹ The dividend is subject to approval by the Annual General Meeting of Shareholders 2023. ² Subject to the applicable tax legislation. - 109 - Bekaert Integrated Annual Report 2022 General Meetings of Shareholders 2022 The Annual General Meeting was held on 11 May 2022. An Extraordinary General Meeting was held on the same day. The proposal to extend a number of authorizations to the Board of Directors (including the authority to acquire, accept in pledge and transfer own securities to prevent a threatened serious harm to the Company and to increase the capital within the framework of a public take-over bid) was not approved. Both meetings were held in a hybrid manner. The shareholders had the option to participate either on-site or remotely by means of an electronic communication tool provided by Bekaert. The resolutions of the meetings are available at www.bekaert.com. Investor Relations Bekaert is committed to providing clear information to all shareholders. The Investor Relations team is available to answer questions and to share material updates on market evolutions, financial performance progress, ESG developments and other relevant information. Such updates can be found in the Investors Relations section of the website of the Company, along with many other helpful and insightful resources and calendar of key events. - 110 - Bekaert Integrated Annual Report 2022 Elements pertinent to a take-over bid Restrictions on the transfer of securities The Articles of Association contain no restrictions on the transfer of Company shares, except in the case of a change of control, for which the prior approval of the Board of Directors must be requested in accordance with Article 9 of the Articles of Association. Subject to the foregoing, the shares are freely transferable. The Board of Directors is not aware of any restrictions imposed by law on the transfer of shares by any shareholder. Restrictions on the exercise of voting rights According to the Articles of Association, each share entitles the holder to one vote. The Articles of Association contain no restrictions on the voting rights, and each shareholder can exercise his voting rights if he was validly admitted to the General Meeting and his rights had not been suspended. The admission rules to the General Meeting are laid down in the BCCA and in the Articles of Association. Pursuant to the Articles of Association, the Company is entitled to suspend the exercise of rights attaching to securities belonging to several owners. No person can vote at a General Meeting of Shareholders using voting rights attached to securities that had not been timely reported in accordance with the law. The Board of Directors is not aware of any other restrictions imposed by law on the exercise of voting rights. Agreements among shareholders The Board of Directors is not aware of any agreements among shareholders that may result in restrictions on the transfer of securities or the exercise of voting rights. Appointment and replacement of Directors The Articles of Association and the Bekaert Corporate Governance Charter contain specific rules concerning the (re)appointment, induction and evaluation of Directors. Directors are appointed for a term not exceeding four years by the General Meeting of Shareholders, which can also dismiss them at any time. An appointment or dismissal requires a simple majority of votes. The candidates for the office of Director who have not previously held that position in the Company must inform the Board of Directors of their candidacy at least two months before the Annual General Meeting. Only when a position of Director prematurely becomes vacant, can the remaining Directors appoint (co-opt) a new Director. In such a case, the next General Meeting will make the definitive appointment. The appointment process for Directors is led by the Nomination and Remuneration Committee, which submits a reasoned recommendation to the full Board of Directors. Based on such recommendation, the Board of Directors decides which candidates will be nominated to the General Meeting for appointment. Directors can, as a rule, be reappointed for an indefinite number of terms, provided they are at least 30 and at most 66 years of age at the time of their initial appointment and they must resign in the year in which they reach the age of 69. Amendments to the Articles of Association The Articles of Association can be amended by an Extraordinary General Meeting in accordance with the BCCA. Each amendment to the Articles requires a quorum of at least 50% of the capital (if the quorum is not met, a second meeting with the same agenda should be called, for which no quorum requirement applies) and a qualified majority of 75% of the votes cast at the meeting (a majority of 80% applies for changes to the corporate purpose and the transformation of the legal form of the company). - 111 - Bekaert Integrated Annual Report 2022 Authority of the Board of Directors to issue, acquire and transfer shares The Board of Directors is authorized by Article 40 of the Articles of Association to increase the capital in one or more times with a maximum amount of € 177 793 000. The authority is valid for five years from 23 June 2020 but can be extended by the General Meeting. The Board of Directors is expressly authorized by Article 40 of the Articles of Association to increase the capital, even after the date that the Company receives the notification from the FSMA that it has been informed of a public take-over bid for the Company’s securities, within the limits authorized by the applicable legal provisions. This authorization is valid regarding public takeover bids of which the Company receives the aforementioned communication at most three years after 13 May 2020. The Company may acquire and accept in pledge its own shares or certificates relating thereto in compliance with the applicable conditions prescribed by law. The Board of Directors is authorized by Article 10 of the Articles of Association to acquire and accept in pledge its own shares or certificates relating thereto in compliance with the applicable conditions prescribed by law, without the total number of own shares or certificates relating thereto held or accepted in pledge by the Company pursuant to this authorization exceeding 20% of the total number of shares, at a price ranging between minimum € 1.00 and maximum 30% above the arithmetic average of the closing price of the Company’s share during the last thirty trading days preceding the Board of Directors’ resolution to acquire or to accept in pledge. This authorization is granted for a period of five years beginning on 23 June 2020. The Board of Directors is also authorized by Article 10 of the Articles of Association to acquire and to accept in pledge own shares and certificates relating thereto, in compliance with the applicable conditions prescribed by law, when such acquisition or acceptance in pledge is necessary to prevent a threatened serious harm for the Company, including a public take-over bid for the Company’s securities. This authorization is granted for a period of three years beginning on 23 June 2020. The authorizations set forth above do not affect the possibilities, pursuant to the applicable legal provisions, for the Board of Directors to acquire or accept in pledge own shares and certificates relating thereto if no authorization in the Articles of Association or authorization of the General Meeting is required. The Board of Directors is authorized by Article 10 of the Articles of Association to cancel all or part of the acquired own shares or certificates relating thereto. The Company may transfer its own shares, profit-sharing bonds or certificates relating thereto only in compliance with the applicable conditions prescribed by law. The Board of Directors is authorized by Article 11 of the Articles of Association to transfer own shares, profit-sharing bonds or certificates relating thereto to one or more specified persons other than personnel, in compliance with the applicable conditions prescribed by law. The Board of Directors is authorized by Article 11 of the Articles of Association to transfer own shares, profit-sharing bonds or certificates relating thereto to prevent a threatened serious harm to the Company, including a public take-over bid for the Company’s securities, in compliance with the applicable conditions prescribed by law. This authorization is granted for a period of three years beginning on 23 June 2020. The authorizations set forth above do not affect the possibilities, pursuant to the applicable legal provisions, for the Board of Directors to transfer own shares, profit-sharing bonds and certificates relating thereto, if no authorization in the Articles of Association or authorization of the General Meeting is required. The powers of the Board of Directors are more fully described in the applicable legal provisions, the Articles of Association and the Bekaert Corporate Governance Charter. - 112 - Bekaert Integrated Annual Report 2022 Change of control The Company is a party to several significant agreements that take effect, alter or terminate upon a change of control of the Company following a public takeover bid or otherwise. To the extent that those agreements grant rights to third parties that significantly affect the assets of the Company or that give rise to a significant debt or obligation of the Company, those rights were granted by the Special General Meetings held on 13 April 2006, 16 April 2008, 15 April 2009, 14 April 2010 and 7 April 2011 and by the Annual General Meetings held on 9 May 2012, 8 May 2013, 14 May 2014, 13 May 2015, 11 May 2016, 10 May 2017, 9 May 2018, 8 May 2019, 13 May 2020 and 12 May 2021 in accordance with Article 7:151 of the BCCA; the minutes of those meetings were filed with the Registry of the Commercial Court of Gent, division Kortrijk on 14 April 2006, 18 April 2008, 17 April 2009, 16 April 2010, 15 April 2011, 30 May 2012, 23 May 2013, 20 June 2014, 19 May 2015, 18 May 2016, 2 June 2017, 7 February 2019, 23 May 2019, 23 June 2020 and 24 June 2021 respectively and are available at www.bekaert.com. Most agreements are joint venture contracts (describing the relationship between the parties in the context of a joint venture company), contracts whereby financial institutions, retail investors or other investors commit funds to the Company or one of its subsidiaries, and contracts for the supply of products or services by or to the Company. Each of those contracts contains clauses that, in the case of a change of control of the Company, entitle the other party, in certain cases and under certain conditions, to terminate the contract prematurely and, in the case of financial contracts, also to demand early repayment of the loan funds. The joint venture contracts provide that, in the case of a change of control of the Company, the other party can acquire the Company’s shareholding in the joint venture (except for the Chinese joint ventures, where the parties have to agree whether one of them will continue the joint venture on its own, whereupon that party has to purchase the other party’s shareholding), whereby the value for the transfer of the shareholding is determined in accordance with contractual formulas that aim to ensure a transfer at an arm’s length price. Other elements •The Company has not issued securities with special control rights. •The control rights attaching to the shares acquired by employees pursuant to the long-term incentive plans are exercised directly by the employees. •No agreements have been concluded between the Company and its Directors or employees providing for compensation if, because of a takeover bid, the Directors resign or are made redundant without valid reason or if the employment of the employees is terminated. - 113 - Bekaert Integrated Annual Report 2022 Control and ERM Internal control and risk management systems in relation to the preparation of the consolidated financial statements The following description of Bekaert’s internal control and risk management systems is based on the Internal Control Integrated Framework (1992) and the Enterprise Risk Management Framework (2004) published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The Board of Directors has approved a framework of internal control and risk management for the Company and the Group set up by the BGE and monitors the implementation thereof. The Audit, Risk and Finance Committee monitors the effectiveness of the internal control and risk management systems, with a view to ensuring that the main risks are properly identified, managed and disclosed according to the framework adopted by the Board of Directors. The Audit, Risk and Finance Committee also makes recommendations to the Board of Directors in this respect. Control environment In 2022, the new Finance Operating Model has been implemented enforcing the accounting and control organization. Under this new model (i) a Financial Controller is responsible inter alia for legal entity financial statements, (ii) Operations Finance's primary focus is on operating cost, inventory, asset utilization and all domains of Manufacturing Excellence, (iii) Commercial Finance focuses on revenue and gross margin with related analysis of pricing and sales force effectiveness, (iv) Financial Planning and Analysis (FP&A) focuses on business results, forward looking budgets and forecasts, (v) shared service centers are incorporated in an overarching Global Business Services (GBS), aiming at bringing their performance to the next level, and (vi) the Group Finance Department is responsible for the final review of the financial information of the different legal entities and for the preparation of the consolidated financial statements Next to the structured controls outlined above, the Internal Audit Department conducts a risk-based audit program to validate the internal control effectiveness in the different processes at legal entity, regional and group level to assure a reliable financial reporting. Bekaert’s consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS), which have been endorsed by the European Union. These financial statements are also in compliance with the IFRS as issued by the International Accounting Standards Board. All IFRS accounting principles, guidelines and interpretations, to be applied by all legal entities, are grouped in the Bekaert Accounting Manual, which is available on the Bekaert intranet to all employees involved in financial reporting. Such manual is regularly updated by Group Finance in the case of relevant changes in IFRS, or interpretations thereof, and the users are - 114 - Bekaert Integrated Annual Report 2022 informed of any such changes. IFRS trainings take place in the different regions when deemed necessary or appropriate. E-learning modules on IFRS are also made available by Group Finance to accommodate individual training. Most of the Group companies use Bekaert’s global enterprise resource planning (“ERP”) system, and the accounting transactions are registered in a common operating chart of accounts, whereby accounting manuals describe the standard way of booking of the most relevant transactions. Such accounting manuals are explained to the users during training sessions and are available on the Bekaert intranet. All Group companies use the same software to report the financial data for consolidation and external reporting purposes. A reporting manual is available on the Bekaert intranet and trainings take place when deemed necessary or appropriate. Risk assessment Appropriate measures are taken to assure a timely and qualitative reporting and to reduce the potential risks related to the financial reporting process, including: (i) proper coordination between the Corporate Communication Department and Group Finance, (ii) careful planning of all activities, including owners and timings, (iii) guidelines which are distributed by Group Finance to the owners prior to the quarterly reporting, including relevant points of attention, and (iv) follow-up and feedback of the timeliness, quality and lessons learned in order to strive for continuous improvement. Material changes to the IFRS accounting principles are coordinated by Group Finance, reviewed by the Statutory Auditor, reported to the Audit, Risk and Finance Committee, and acknowledged by the Board of Directors of the Company. Material changes to the statutory accounting principles of a Group company are approved by its Board of Directors. Control activities The proper application by the legal entities of the accounting principles as described in the Bekaert Accounting Manual, as well as the accuracy, consistency and completeness of the reported information, is reviewed on an ongoing basis by the control organization (as described above). In addition, all relevant entities are controlled by the Internal Audit Department on a periodic basis. Policies and procedures are in place for the most important underlying processes (sales, procurement, investments, treasury, etc.). A close monitoring of potential segregation of duties conflicts in the ERP system is carried out. Information and communication Bekaert has deployed in most of the Group companies a global ERP system platform to support the efficient processing of business transactions and provide its management with transparent and reliable management information to monitor, control and direct its business operations. The provision of information technology services to run, maintain and develop those systems is to large extent outsourced to professional IT service delivery organizations, which are directed and controlled through appropriate IT governance structures and monitored on their delivery performance through comprehensive service level agreements. Together with its IT providers, Bekaert has implemented adequate management processes to assure that appropriate measures are taken daily to sustain the performance, availability and integrity of its IT systems. At regular intervals the adequacy of those procedures is reviewed and audited and where needed further optimized. Proper assignment of responsibilities, and coordination between the pertinent departments, assures an efficient and timely communication process of periodic financial information to the market. In the first and third quarters, a trading update is released, whereas at mid-year and year-end all relevant financial information is disclosed. Prior to the external reporting, the sales and financial information is subject to (i) the appropriate controls by the above-mentioned control organization, (ii) review by the Audit, Risk and Finance Committee, and (iii) approval by the Board of Directors of the Company. - 115 - Bekaert Integrated Annual Report 2022 Monitoring Any significant change of the IFRS accounting principles as applied by Bekaert is subject to review by the Audit, Risk and Finance Committee and approval by the Company’s Board of Directors. On a periodic basis, the members of the Board of Directors are updated on the evolution and important changes in the underlying IFRS standards. All relevant financial information is presented to the Audit, Risk and Finance Committee and the Board of Directors to enable them to analyze the financial statements. All related press releases are approved prior to communication to the market. Relevant findings by the Internal Audit Department and/or the Statutory Auditor on the application of the accounting principles, as well as the adequacy of the policies and procedures, and segregation of duties, are reported to the Audit, Risk and Finance Committee. In addition, a periodic treasury update is submitted to the Audit, Risk and Finance Committee. A procedure is in place to convene the appropriate governing body of the Company on short notice when circumstances so dictate. General internal control and ERM The Board of Directors has approved the Bekaert Code of Conduct, which was first issued on 1 December 2004 and last updated in September 2022. The Code of Conduct sets forth the Bekaert mission and values as well as the basic principles of how Bekaert wants to do business. Implementation of the Code of Conduct is mandatory for all subsidiaries of the Group and all managerial and salaried employees renew their commitment annually. The Raising Integrity Concern (whistleblowing) procedure enforces and underpins its implementation. The Code of Conduct is included in the Bekaert Corporate Governance Charter as Appendix 3 and available at www.bekaert.com. More detailed policies and guidelines are developed as considered necessary to ensure consistent implementation of the Code of Conduct throughout the Group. Bekaert’s internal control framework consists of a set of group policies for the main business processes and applies Group wide. Bekaert has different tools in place to constantly monitor the effectiveness and efficiency of the design and the operation of the internal control framework. The Internal Audit and Risk Management Department monitors the internal control performance and risks based on the global framework and reports to the Audit, Risk and Finance Committee at each of its meetings. The Compliance Department reports to the Audit, Risk and Finance Committee at each of its meetings on compliance matters. The BGE regularly evaluates the Group’s exposure to risk, the potential financial impact thereof and the actions to monitor, mitigate and control the exposure. At the request of the Board of Directors and the Audit, Risk and Finance Committee, management has developed a permanent global enterprise risk management (“ERM”) framework to assist the Group in managing uncertainty in Bekaert’s value creation process. The framework consists of the identification, assessment and prioritization of the major risks confronting Bekaert, and of the continuous reporting and monitoring of those major risks, including the development and implementation of risk mitigation plans. The risks are identified in seven risk categories: strategic, people/organization, operational, legal/compliance, financial, corporate and geopolitical/country risks. The identified risks are classified on two axes: probability and impact or consequence. To assess impact and probability, we use the following heatmap. - 116 - Bekaert Integrated Annual Report 2022 Risks in red area are considered very high; in orange high risks; and yellow medium risk Decisions are made and action plans defined to mitigate the identified risks. Also, the risk sensitivity evolution (decreasing, increasing, stable) is evaluated. Probability Financial Impact Non-financial Impact Very low • Extremely remote • Not expected to occur but may do so in very exceptional circumstances Rare None • No negative publicity • No loss of confidence by key stakeholders • No injury to individual(s) Low • Extremely remote • Not expected to occur but may do so in exceptional circumstances Unlikely Below € 1 m • Negligible/insignificant negative publicity • Minor loss of confidence by key stakeholders • Minor injury to individual(s), non-life altering, no SIF (Significant Injury or Fatality) Medium • There is a low exposure to the risk • Little probability of event occurring Possible Between € 1 m - € 10 m • Low level of sustained negative publicity • Moderate loss of confidence by key stakeholders • Significant injury / life altering to one individual, no fatality High • There is a moderate exposure to the risk • Reasonable to expect event to occur Likely Above € 10 m • Moderate to significant level of sustained negative publicity (e.g. one region) • Moderate to significant loss of confidence by key stakeholders • Fatality to one or more individuals and/or significant injury / life altering to more than one individual Very High • There is a high exposure to the risk • Indication of imminent occurrence Very likely - 117 - Bekaert Integrated Annual Report 2022 Below are the main risks included in Bekaert’s 2022 ERM report, as reported to the Audit, Risk and Finance Committee and the Board of Directors. Risk definition Mitigating actions Trend Risk before mitigation Risk after mitigation Strategic risks Bekaert is exposed to risks arising from potential technology shifts Impactful technology changes can affect sectors that are relevant to Bekaert, such as tire markets, energy and utility markets, and the mining, construction & infrastructure sectors. The drive for sustainable energy sources and eco-friendly materials may affect the perspectives of oil & gas and mining industries in the future. Talent and process roadmap Building cross functional teams and change management Define and deploy partnerships Monitor evolutions in our markets e.g. digital new business models Stable Very high High Expansion investments are exposed to risks of delivery on anticipated returns Organic expansion investments are subject to risks of delay and cost overruns due to unforeseen roadblocks and as such the anticipated return of such projects might not be reached within the intended timeframe. Potential M&A projects, larger in scope and hence with a higher risk potential if the anticipated returns are not achieved, entail the additional risk of acquiring or merging businesses that are not a strategic fit with Bekaert. The assumptions used for organic and inorganic business cases (market conditions, competitor moves, ...) may change and affect the return on the investments made. Major investments with a delay in generating the anticipated returns may affect the cash position and funding cost of the company. Bekaert has implemented a rigorous capital allocation and M&A project management framework with detailed criteria and close governance, bringing a quality line of defense measures in the preparation, execution, and monitoring discipline of growth projects. Support and oversight by the Industrial Projects team in the technical preparation, optimization and execution of investment projects as well as by an experienced and multi-disciplinary M&A team for M&A projects. Increasing due to the volatile global macro environment Very high High People / Organization Bekaert is exposed to certain labor market risks A competitive labor market can lead to shortages of specific talent capabilities, especially in markets where the talent pool is scarce and where our offices and/or factories are in remote places. This could drive cost inflation or affect the business continuity. Bekaert has developed a framework of strategic talent pools and has performed a skill gap analysis versus the main capabilities the company wants to develop. A compensation & benefits benchmark study has been done for the critical job families. Talent acquisition and leadership programs are high on the agenda. Diversity & Inclusion initiatives and targets are put in place to structurally enhance this performance. Implementation of Leadership Circles Stable High High Operational risks Source dependency might impact Bekaert’s business activities and profitability Bekaert is subject to the risks from continuous changes in trade policy worldwide, and by trade tensions between specific countries and regions. Bekaert is also subject to disruptions in supply chains due to shortages of raw materials and of logistics services. Increased source dependency might have an impact on Bekaert’s business continuity in certain locations and on profitability, due to increased costs and duties. Bekaert’s global presence reduces the risk of source dependency and a lack of alternatives to continue its business activities, should one source fail to deliver or become too expensive. Bekaert’s pro-active supplier risk management approach reduces the probability and impact of the risk. Early assessment of impact of changed regulation and prepare action plan eg green deal, sustainability requirements. As part of the Group’s focus on pricing discipline, passing on cost inflation through selling prices is a priority area to safeguard the profitability. Stable Very high High - 118 - Bekaert Integrated Annual Report 2022 Risk definition Mitigating actions Trend Risk before mitigation Risk after mitigation Bekaert is subject to stringent environmental laws Bekaert is subject to environmental laws & regulations, which become more stringent all over the world. Changes in policies could increase the environmental liabilities of the company. Prevention and risk management play an important role in Bekaert’s environmental policy. This includes measures against soil and ground water contamination, responsible use of water and worldwide ISO14001 certification. Bekaert’s global procedure to ensure precautionary measures against soil and ground water contamination (ProSoil) is continuously monitored in relation to regulations, ISO certification, best practices and actual implementation. The company also maps upcoming or changing legislations to define potential gaps and implements roadmaps to address the gaps Stable High Medium Bekaert is subject to cyber-security risks Many operational activities of Bekaert depend on IT-systems that are developed and maintained by internal and external experts. Home office work has expanded the number of end-point devices and connection channels. A cyber-attack affecting critical IT- systems could interrupt Bekaert’s business continuity and affect profitability. It may also lead to risks associated with data privacy and confidentiality. Bekaert has implemented a cyber-security roadmap to reduce the risk. This includes the establishment of a Security Governance model and continuous improvements to enhance cyber-security solutions, improve the response and recovery capability, and next-generation threat management. Stable Very high High Legal / Compliance risks Bekaert is exposed to regulatory and compliance risks As a global company, Bekaert is subject to many laws and regulations across all countries where it is active or does business. Such laws and regulations are becoming more complex, more stringent and change faster and more frequently than before. These numerous laws and regulations include, among others, data privacy requirements (such as the European General Data Protection Regulation and California Consumer Privacy Act), intellectual property laws, labor relation laws, tax laws, anti-competition regulations, import and trade restrictions (for example the trade policies in the US and the EU), exchange laws, anti-bribery and anti-corruption regulations, health and safety regulations. Compliance actions may require additional costs or capital expenditures, which could negatively impact the profit performance of the group. In addition, given the high level of complexity of these laws, there is a risk that Bekaert may inadvertently not (timely) comply. Violations could result in fines, criminal sanctions, cessation of business activities, and a reputation risk. The Bekaert Code of Conduct has a whistleblowing procedure, and all managers and other salaried professionals worldwide annually commit to the Code after a mandatory test. The company also has ABC, sanction, anti-trust, equipment safety standard policies in place The company regularly organizes trainings on anti-bribery, anti-trust, safety and other legal awareness matters. Bekaert steers compliance with laws and regulations through a Compliance Committee that monitors and manages the actions that are needed to ensure compliance. Safety compliance process improvement implemented. Stable Very high Medium Failure to adequately protect Bekaert’s intellectual property could harm its business and operating result Intellectual property leakages can harm Bekaert and help the competition, both in terms of product development, process innovation and machine engineering. Bekaert cannot assure that its intellectual property will not be objected to, infringed upon or circumvented by third parties. Furthermore, Bekaert may fail to successfully obtain patent authorization, complete patent registration or protect such patents, which may materially and adversely affect our business position. At year-end 2022, Bekaert had approximately 2 100 patents and patent applications and more than 1 850 trademarks and trademark applications. Bekaert also initiates patent infringement proceedings against competitors when such cases are observed or reported. In addition Bekaert has an IP policy in place and organizes training. Stable High High - 119 - Bekaert Integrated Annual Report 2022 Risk definition Mitigating actions Trend Risk before mitigation Risk after mitigation Financial risks Bekaert is exposed to a currency exchange risk which could impact its results and financial position Bekaert’s assets, income, earnings and cash flows are influenced by movements in exchange rates of several currencies. The Group’s currency risk can be split into two categories: translational and transactional currency risk. A translational currency risk arises when the financial data of foreign subsidiaries are converted into the Group’s consolidation currency, the euro. The Group is also exposed to transactional currency risks resulting from its investing, financing, sales and operating activities. Bekaert has a hedging policy in place to limit the impact of currency exchange risks. Increasing Very high High Bekaert is exposed to a credit risk on its contractual and trading counterparties Bekaert is subject to the risk that commercial counterparties delay or do not pay their liabilities. While Bekaert has a credit policy in place that considers the risk profiles of the customers and the markets to which they belong, this policy cannot fully exclude the credit risk. This risk may impact the cash position and the profitability of the Group. Bekaert has a credit insurance policy in place to limit such risks. Bekaert has not been confronted in the past years with increased bad debt provisions or customer bankruptcies leading to write-offs of bad debts. Bekaert has risk transfer solutions in place to limit such risks. The group has also strengthened its credit procedures, reporting and IT-tool and implemented additional actions at the onset of the Covid-19-pandemic, which increased the liquidity risk in many markets and of certain customers. Stable Very high High Bekaert is exposed to increased funding costs in adverse macro conditions increasing interest rates leading to higher financing cost and/or (more) restrictive covenants and/or more securities (pledges, collaterals). Lack of funding availability for M&A projects Reduce Net Debt by: Reducing WC (AR, Inventory), Controlling Capex, Controlling Expenses Increasing Very high High Adverse business performances or changes in underlying economic climate may result in an impairment of assets In accordance with the International Accounting Standards regarding the impairment of assets (i.e., IAS36), an asset must not be carried in a company’s financial statements at more than the highest recoverable amount (i.e., by selling or using the asset). In the event the carrying amount (i.e., book value) exceeds the recoverable amount, the asset is impaired. For further information on Bekaert’s goodwill on the balance sheet (and impairment losses relating thereto), please refer to the note 6.2 (Goodwill) in the Financial Statements of this report. Bekaert regularly examines its groups of assets that do not generate cash flows individually (i.e., Cash Generating Units (CGUs)) and more specifically CGUs to which goodwill is allocated. Apart from the impairment of the Russian activities, the company has not identified additional risks in the fiscal year 2022. Stable High High Risk of events or losses that are uninsurable, not insured or not fully insured Insurance coverage restrictions are applicable for most risks and the insurance premium cost increases steadily, which creates a risk of uninsured losses and higher costs. Bekaert focuses on operational risk management to reduce the risks and is continuously looking for new and alternative insurance solutions to reduce the impact. Stable High High - 120 - Bekaert Integrated Annual Report 2022 Risk definition Mitigating actions Trend Risk before mitigation Risk after mitigation Wire rod price and energy price volatility may result in margin erosion Wire rod, Bekaert’s main raw material, is purchased from steel mills from all over the world. Wire rod represents about 50% of the cost of sales. If Bekaert is unsuccessful in passing on cost increases to customers in due time, this may negatively influence the profit margins of Bekaert. Also, the opposite price trend entails profit risks: if raw materials prices drop significantly and Bekaert has higher priced material in stock, then the profitability may be hit by (non-cash) inventory valuation corrections at the balance sheet date of a reporting period. Energy price volatility may also negatively influence the profit margins, if Bekaert is unsuccessful in passing on cost increases to customers in due time. In principle, price movements are passed on in the selling prices as soon as possible, through contractually agreed pricing mechanisms or through individual negotiation. Bekaert also has new tools in place to mitigate the risk. This includes pricing tools and capital allocation tools. Government subsidies for energy prices Stable Very high High Bekaert is exposed to tax risks The international nature of Bekaert’s activities and the rapidly changing international tax environment encompass some tax risks. Bekaert is subject to different tax laws in many countries. Bekaert seeks to structure its operations in a tax-efficient manner, while complying with the applicable tax laws and regulations. This does not exclude the risk that a subsidiary of Bekaert may incur higher than anticipated tax liabilities, which could adversely affect the effective tax rate, results of operations and financial position. Bekaert subsidiaries can be subject to government-mandated tax investigations. Such investigations have in recent years become more regular and may result in increased advisory costs and additional liabilities. Although supported by tax consultants and specialists, Bekaert cannot guarantee that changes in tax laws, varying interpretations and inconsistent enforcement, will not adversely affect Bekaert’s effective tax rate, results of operations and financial condition. It is Bekaert’s practice to recognize provisions (per entity) for potential tax liabilities. Stable High High Corporate Underperformance on sustainability targets Underperformance on sustainability targets can also cause reputational damage and affect Bekaert’s position as a preferred partner to customers and investors Bekaert has established a new sustainability strategy that will step up our sustainability performance. Our environmental targets, which are aligned with the Science-Based Targets initiative, are ambitious and will be implemented according to a roadmap that has been approved by the Board of Directors. Stable Very high High Geopolitical / Country risks Bekaert is exposed to risks arising from demand impacts and inflationary cost pressures from economic crises. Impactful demand changes can affect sectors that are relevant to Bekaert. A crisis or recession can lead to a significant demand decline driven by weak consumer confidence and postponed investments. The resulting upstream and downstream overcapacity can lead to price erosion across the supply chain. To mitigate these risks, Bekaert implements measures to be cost-competitive, to flex costs, and to pass on cost inflation. The company’s focus moves beyond the traditional markets to less cyclical sectors with strong growth potential, including new mobility, renewable energy, and markets focused on decarbonization and recycling trends. The company’s efforts in research and innovation also address the anticipated technology shifts toward more sustainable solutions. Strategically, Bekaert’s presence in different sectors and geographies inherently makes the company more resilient to country or sector-specific trends. Increasing Very high High - 121 - Bekaert Integrated Annual Report 2022 Risk definition Mitigating actions Trend Risk before mitigation Risk after mitigation Bekaert is exposed to certain country risks with political and economic instability Bekaert is also present in countries with political and economic risks, including China, Venezuela, Russia and Turkey. In case a major political, social, or asset damage incident would occur, then an impact on the profit is possible Scenario analysis As part of a business continuity plan, Bekaert has measures in place to reduce this risk through back-up scenarios and delivery approvals from other locations. Apart from the impairment of the Russian assets, the company has not identified additional risks in the fiscal year 2022. Increasing Very high High Risk of physical damage, business interruption and/or supply chain disruption caused by climate change Damage caused by climate change impact (heavy rains/flooding, drought/water shortages, heat-stress, fire weather, extreme storms/wind damage) may affect the continuity of Bekaert’s activities in affected locations. Bekaert is assessing the possible impact of climate change and implements adaptation measures such as adequate water run-off and/or collection, flood defenses, provision of adequate firefighting facilities, water usage minimization programs, and employee working condition provisions in the event of extreme high temperatures. As part of Bekaert’s climate risk management strategy, an in-depth climate risk study has been conducted together with WTW (former Willis Towers Watson) to assess the possible impact of physical climate change on Bekaert’s global assets and operations. The summary of the conclusions of this study are included below. Increasing Very high High An effective internal control and ERM framework is necessary to reach a reasonable level of assurance related to Bekaert’s financial reports and to prevent fraud. Internal control on financial reporting cannot prevent or trace all errors due to limits peculiar for control, such as possible human errors, misleading or circumventing controls, or fraud. That is why an effective internal control only generates reasonable assurance for the preparation and the fair presentation of the financial information. Failure to pick up an error due to human errors, misleading or circumventing controls, or fraud could negatively impact Bekaert’s reputation and financial results. This may also result in Bekaert failing to comply with its ongoing disclosure obligations. - 122 - Bekaert Integrated Annual Report 2022 Physical Climate Risk Assessment Study Scope As part of Bekaert’s climate risk management strategy, an in-depth climate risk study has been conducted together with WTW (former Willis Towers Watson) to assess the possible impact of physical climate change on Bekaert’s global assets and operations. The assessment focussed on identifying potential future vulnerabilities, consequences and risk adaptation measures to Bekaert’s operations associated with physical climate change exposures for plausible climate change scenarios that are also promoted by the IPCC (Intergovernmental Panel on Climate Change). Three climate change scenarios (representative concentration pathways 2.6, 4.5 and 8.5) were considered based on the IPCC Fifth Assessment Report (AR5), which are mapped to the latest IPCC Sixth Assessment Report’s (AR6) Shared Social Economic Pathways (SSPs). The scenarios consider global warming increases of 1.5°C, 2°C-3°C and > 4°C increase in the global average surface temperature by 2100 (see figure published by the IPCC). For each location, the changes to material acute and chronic physical climate change hazards were assessed for each pathway and key time horizons with focus on the current and near-term “base risk” as well as a medium-term future time horizon towards the mid-century (2040-2050). Temperature change IPCC scenario Present day 2030 2050 1.5°C RCP 2.6 v v v 2-3°C RCP 4.5 v v v >4°C RCP 8.5 v v v Global surface temperature change relative to 1850–1900 (from the Climate Change 2021 report by IPCC) - 123 - Bekaert Integrated Annual Report 2022 The following climate hazard exposures and potential risks were assessed as material to Bekaert’s physical assets and operations. Acute hazard River flood Coastal flood Windstorm Probability and extent of inundation from potential severe river floods Probability and extent of inundation from potential severe coastal flooding and sea level rise Damaging wind gusts from severe windstorms Chronic hazard Heat stress Drought stress Precipitation Fire Weather Annual number of heat wave days with sustained high temperatures over 30°C Annual number of prolonged drought periods (months) Annual number of days with heavy rainfall of more than 30mm Areas exposed to meteorological fire conditions and duration of the fire season (months) Methodology WTW collaborated closely with Bekaert and key stakeholders to validate underlying assumptions of the assessment, which ranged from a more high-level diagnostic of future climate hazard exposures (e.g. whether assets are located in zones exposed to climate hazards) to a review of potential vulnerabilities and subsequent quantification of the potential financial value at risk associated with these potential vulnerabilities utilizing insurance market recognized climate risk models for severe, low-likelihood events associated to acute climate hazards (such as flood and windstorm). The methodology used for the wider climate exposure and vulnerability assessment included an asset-by-asset analysis for a range of climate hazard exposures at the present day as well as for future projections under the selected scenarios where data was available. This was further supplemented by a value-at-risk analysis that was based on the potential vulnerabilities identified, including direct physical damage and business interruption from extreme events like flood and windstorm and chronic hazards such as heat stress and drought. Data used for this analysis included state-of-the-art climate models and databases that are used within the insurance industry for the pricing of risk as well as published research and information from the Intergovernmental Panel on Climate Change (IPCC). The climate risks were derived from a number of data sources including WTW’s own tools Global Peril Diagnostic and Climate Diagnostic, data from Munich Re hazard databases and research findings from the IPCC. - 124 - Bekaert Integrated Annual Report 2022 Key findings A summary of the potential climate hazard exposures to Bekaert’s physical assets and operations together with responses on current and future adaptation and mitigation are presented below. Overall, as indicated elsewhere in this report, the potential impact on Bekaert of physical climate risk has been assessed as very high. Bekaert’s adaptation approach will be developed considering specific targeted measures as well as overarching measures working across wider range of plausible identified risks, and following the core “do no significant harm” principles in line with the EU taxonomy guidelines. Additional to the summarized responses below, potential vulnerabilities identified are being reviewed in more detail to validate and/or further adapt key exposed operations and strengthen their resilience. Design standards and operational thresholds are being adjusted to address climate change. As outlined in the table, Bekaert is already taking action to mitigate current and future physical climate risks, but at this stage we are unable to quantify the overall response/mitigation cost. It is plausible that severe, low-likelihood events would also impact the wider regional infrastructures not owned by Bekaert and Bekaert will continue working closely with local authorities and where necessary will further align its emergency response and operational continuity planning procedures with those of the local authorities and their emergency response planning, before, during and after an event has occurred. Very high High Moderate Low Very low - 125 - Bekaert Integrated Annual Report 2022 Current climate risk Climate risks for 2050 under the high emission scenario (RCP8.5) Response / Adaptation Drought Currently some of Bekaert’s operations are in high drought stress environment with over 4 months of drought on average every year. Such conditions are corelated with water scarcity problems for the regions and in some areas with disruption of the supply of electricity from hydropower sources. At present this has not resulted in material or unexpected impacts to the business. The existing drought stress would be further exacerbated in this scenario with longer droughts and new regions and facilities becoming exposed to the conditions. This can lead to water shortages and potentially disrupt operations at facilities with water dependent processes. Hydropower reliability could be further impacted. Bekaert already takes actions today to minimise fresh water use in production that would help reduce the future potential risks. Further plans are developed with regards to building internal reserves and optimisation to further increase water and power supply resilience. Heat-Stress Part of the global operations is already in moderate and high heat stressed areas. This creates a risk of some minor loss of productivity during heatwave periods and increased air conditioning / energy consumption at sites with strict air quality requirements. No material impacts happened in 2022. The number of heat wave days and the geographical spread of heat zones increases impacting additional operations and would likely increase the risk for existing ones. Bekaert is already implementing heat stress adaptation measures in their operations with regards to ventilation and cooling solutions targeting areas of product quality, and health and safety. Consideration is given to increasing energy consumption and impact on green KPIs. Additional measures will be explored to bring further efficiencies in HVAC systems, new technologies and automation. Precipitation Parts of the global operations are in areas of heavy rainfall already. This creates a risk of localized flooding and ponding around manufacturing facilities and potential for leaking roofs. The impacts could include damage to surrounding infrastructure such as access roads, equipment and materials as well as disruption to operation essential utilities. No material impacts happened in 2022. The number of days with heavy rainfall increases which creates conditions for more frequent impacts. Bekaert already has a level of protection embedded in the design of their facilities and maintenance regimes of roofs and drainage system. Further steps will be considered to increase the resilience to this peril by additional evaluations of site vulnerabilities to strengthen or enhance the level of protection where relevant. Fire weather Moderate fire weather conditions are relevant to a small portion of all assets. This could create some risk of property damage and disruption to utility supply from localised fires. At present, no incidents happened. Unfavourable conditions increase and the number of sites moving into moderate conditions and longer fire season doubles. Bekaert already takes actions to maintain good level of fire protection for their operations. It is reasonable to assume that existing fire control and preventions measures would reduce the likelihood of severe impacts in the future. Flooding Parts of Bekaert’s operations are located in zones where severe low likelihood flooding could occur. The impacts to those assets could include damage to infrastructure, equipment, and materials as well as disruption to operation essential utilities. No material flooding events happened in 2022. No substantial changes in exposure to coastal or river flooding, but exposure is already very high at some locations. A level of prevention and protection is already in place for exposed areas. Where needed, Bekaert will be taking additional steps to increase the resilience and mitigation of the risk Windstorm Some of Bekaert’s operations see moderate levels of windstorm activity, while the majority of their assets are not materially exposed. There is a risk of wind damage to exposed sites and disruption to operation essential utilities. No substantial changes in windstorm exposure. Existing facilities already include severe wind consideration in engineering design. It is reasonable to assume that good maintenance and inspection regime of sites today, as well as following best practice wind design specifications, Emergency Response and Business Continuity Plans would prevent and minimise significant impacts to operations. Financial statements - 127 - Bekaert Integrated Annual Report 2022 Consolidated financial statements Consolidated income statement in thousands of € - Year ended 31 December Notes 2021 2022 Sales 5.1 4 839 659 5 651 790 Cost of sales 5.2 -3 953 752 -4 879 310 Gross profit 5.2 885 907 772 479 Selling expenses 5.2 -186 239 -205 938 Administrative expenses 5.2 -165 204 -160 472 Research and development expenses 5.2 -59 537 -62 315 Other operating revenues 5.2 64 556 47 848 Other operating expenses 5.2 -28 894 -25 848 Operating result (EBIT) 5.2 510 589 365 754 of which EBIT - Underlying 5.2 / 5.3 512 121 458 563 One-off items 5.2 -1 531 -92 810 Interest income 5.4 3 260 5 166 Interest expense 5.4 -44 480 -43 437 Other financial income and expenses 5.5 4 430 -11 325 Result before taxes 473 799 316 157 Income taxes 5.6 -133 714 -81 097 Result after taxes (consolidated companies) 340 085 235 059 Share in the results of joint ventures and associates 5.7 107 619 54 257 RESULT FOR THE PERIOD 447 705 289 316 Attributable to equity holders of Bekaert 404 062 268 859 non-controlling interests 6.15 43 643 20 457 Earnings per share in € per share 5.8 2021 2022 Result for the period attributable to equity holders of Bekaert Basic 7.089 4.784 Diluted 7.012 4.745 The accompanying notes are an integral part of this income statement. 2021 amounts have been affected by minor restatements (see note 2.8. ‘Restatement effects’). - 128 - Bekaert Integrated Annual Report 2022 Consolidated statement of comprehensive income in thousands of € - Year ended 31 December Notes 2021 2022 Result for the period 447 705 289 316 Other comprehensive income (OCI) 6.14 Other comprehensive income reclassifiable to income statement in subsequent periods Exchange differences Exchange differences arising during the year on subsidiaries 89 570 30 527 Exchange differences arising during the year on joint ventures and associates 1 647 18 916 Reclassification adjustments relating to entity disposals or step acquisitions -2 987 -555 OCI reclassifiable to income statement in subsequent periods, after tax 88 229 48 888 Other comprehensive income non-reclassifiable to income statement in subsequent periods Remeasurement gains and losses on defined-benefit plans 47 351 3 393 Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI 5 882 -2 367 Share of non-reclassifiable OCI of joint ventures and associates 3 27 Deferred taxes relating to non-reclassifiable OCI 6.7 -3 500 -4 874 OCI non-reclassifiable to income statement in subsequent periods, after tax 49 736 -3 821 Other comprehensive income for the period 137 965 45 067 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 585 670 334 383 Attributable to equity holders of Bekaert 542 801 308 741 non-controlling interests 6.15 42 869 25 642 The accompanying notes are an integral part of this statement of comprehensive income. 2021 amounts have been affected by minor restatements (see note 2.8. ‘Restatement effects’). - 129 - Bekaert Integrated Annual Report 2022 Consolidated balance sheet Assets as at 31 December in thousands of € Notes 2021 2022 Intangible assets 6.1 57 326 62 149 Goodwill 6.2 150 674 152 567 Property, plant and equipment 6.3 1 253 857 1 238 041 RoU Property, plant and equipment 6.4 132 073 130 750 Investments in joint ventures and associates 6.5 188 661 221 886 Other non-current assets 6.6 65 886 65 314 Deferred tax assets 6.7 119 244 104 372 Non-current assets 1 967 721 1 975 079 Inventories 6.8 1 121 219 1 143 096 Bills of exchange received 6.8 41 274 39 764 Trade receivables 6.8 750 666 730 786 Other receivables 6.9 / 6.21 157 005 151 426 Short-term deposits 6.10 80 058 4 766 Cash and cash equivalents 6.10 677 270 728 095 Other current assets 6.11 42 272 55 541 Assets classified as held for sale 6.12 1 803 760 Current assets 2 871 567 2 854 234 Total 4 839 288 4 829 313 Equity and liabilities as at 31 December in thousands of € Notes 2021 2022 Share capital 6.13 177 923 173 737 Share premium 38 850 39 519 Retained earnings 6.14 1 981 876 2 115 216 Treasury shares 6.14 -95 517 -139 314 Other Group reserves 6.14 -136 440 -96 451 Equity attributable to equity holders of Bekaert 1 966 692 2 092 706 Non-controlling interests 6.15 130 971 136 850 Equity 2 097 663 2 229 556 Employee benefit obligations 6.16 75 971 68 037 Provisions 6.17 23 311 27 925 Interest-bearing debt 6.18 953 581 735 408 Other non-current liabilities 6.19 844 150 Deferred tax liabilities 6.7 52 059 44 018 Non-current liabilities 1 105 766 875 537 Interest-bearing debt 6.18 237 742 500 588 Trade payables 6.8 1 062 185 921 113 Employee benefit obligations 6.8 / 6.16 177 159 142 068 Provisions 6.17 4 392 6 154 Income taxes payable 6.21 86 131 66 180 Other current liabilities 6.20 68 249 88 118 Liabilities associated with assets classified as held for sale 6.12 — — Current liabilities 1 635 859 1 724 220 Total 4 839 288 4 829 313 The accompanying notes are an integral part of this balance sheet. 2021 amounts have been affected by minor restatements (see note 2.8. ‘Restatement effects’). - 130 - Bekaert Integrated Annual Report 2022 Consolidated statement of changes in equity Attributable to equity holders of Bekaert ¹ in thousands of € Share capital Share premium Retained earnings Treasury shares Cumulative translation adjust-ments Reva-luation reserve for non-consoli-dated equity invest-ments Remea-surement reserve for DB plans Deferred tax reserve Total Non-controlling interests ² Total equity Balance as at 1 January 2021 177 812 37 884 1 614 780 -106 149 -227 822 -11 867 -63 543 26 785 1 447 880 87 175 1 535 055 Result for the period — — 404 062 — — — — — 404 062 43 643 447 705 Other comprehensive income — — — — 89 426 5 882 46 753 -3 321 138 739 -774 137 965 Capital contribution by non-controlling interests — — — — — — — — — 3 975 3 975 Effect of other changes in Group structure³ — — -2 220 — 1 270 — — — -951 3 601 2 650 Equity-settled share-based payment plans — — 15 261 — — — — — 15 261 — 15 261 Creation of new shares 111 966 — — — — — — 1 077 — 1 077 Treasury shares transactions — — 6 787 10 631 — — — — 17 419 — 17 419 Dividends — — -56 795 — — — — — -56 795 -6 649 -63 444 Balance as at 31 December 2021 177 923 38 850 1 981 876 -95 517 -137 127 -5 986 -16 790 23 464 1 966 692 130 971 2 097 663 ¹ See note 6.14. ‘Retained earnings and other Group reserves’. ² See note 6.15. ‘Non-controlling interests’. ³ In July 2021, Almasa contributed their plants in Barranquilla, Colombia in kind into the equity of Productora de Alambres Colombianos - Proalco. As a consequence, the Group share of Proalco diluted from 80% to 40%. 2021 amounts have been affected by minor restatements (see note 2.8. ‘Restatement effects’). - 131 - Bekaert Integrated Annual Report 2022 Attributable to equity holders of Bekaert ¹ in thousands of € Share capital Share premium Retained earnings Treasury shares Cumulative translation adjust-ments Reva-luation reserve for non-consoli-dated equity invest-ments Remea-surement reserve for DB plans Deferred tax reserve Total Non-controlling interests ² Total equity Balance as at 1 January 2022 177 923 38 850 1 984 791 -95 517 -137 183 -5 986 -16 790 23 464 1 969 551 130 971 2 100 522 Adoption of IFRIC guidance on IAS 19 and IAS 38 — — -2 915 — 56 — — — -2 859 — -2 859 1 January 2022 (restated) 177 923 38 850 1 981 876 -95 517 -137 127 -5 986 -16 790 23 464 1 966 692 130 971 2 097 663 Result for the period — — 268 859 — — — — — 268 859 20 457 289 316 Other comprehensive income — — — — 43 307 -2 367 4 024 -5 083 39 882 5 185 45 067 Reclassifications — — -107 — — — 107 — — — — Equity-settled share-based payment plans — — -6 813 — — — — — -6 813 — -6 813 Creation of new shares 80 668 — — — — — — 748 — 748 Treasury shares transactions -4 266 — -42 136 -43 797 — — — — -90 199 — -90 199 Dividends — — -86 463 — — — — — -86 463 -19 763 -106 226 Balance as at 31 December 2022 173 737 39 519 2 115 216 -139 314 -93 820 -8 353 -12 659 18 381 2 092 706 136 850 2 229 556 ¹ See note 6.14. ‘Retained earnings and other Group reserves’. ² See note 6.15. ‘Non-controlling interests’. - 132 - Bekaert Integrated Annual Report 2022 Consolidated cash flow statement in thousands of € - Year ended 31 December Notes 2021 2022 Operating activities Operating result (EBIT) 5.2 / 5.3 510 589 365 754 Non-cash items included in operating result 7.1 188 605 296 053 Investing items included in operating result 7.1 -23 234 -11 381 Amounts used on provisions and employee benefit obligations 7.1 -50 340 -27 947 Income taxes paid 5.6 / 7.1 -92 737 -117 289 Gross cash flows from operating activities 532 884 505 189 Change in operating working capital 6.8 -119 773 -178 697 Other operating cash flows 7.1 -32 620 13 800 Cash flows from operating activities 380 491 340 292 Investing activities New business combinations 7.2 — -2 384 Other portfolio investments 7.1 -863 -8 613 Proceeds from disposals of investments -66 94 Dividends received 6.5 24 858 67 944 Purchase of intangible assets 6.1 -8 739 -14 937 Purchase of property, plant and equipment 6.3 -143 753 -170 195 Purchase of RoU Land 6.4 — -6 Proceeds from disposals of fixed assets 7.1 36 752 3 141 Cash flows from investing activities -91 810 -124 956 in thousands of € - Year ended 31 December Notes 2021 2022 Financing activities Interest received 5.4 3 474 4 848 Interest paid 5.4 -35 170 -37 428 Gross dividend paid to shareholders of NV Bekaert SA -56 795 -86 463 Gross dividend paid to non-controlling interests -6 761 -18 496 Proceeds from long-term interest-bearing debt 6.18 23 649 12 050 Repayment of long-term interest-bearing debt 6.18 -439 823 -87 627 Cash flows from / to (-) short-term interest-bearing debt 6.18 -43 328 67 349 Treasury shares transactions 6.13 17 419 -97 104 Sales and purchases of NCI 7.1 — — Other financing cash flows 7.1 -29 747 68 473 Cash flows from financing activities -567 082 -174 398 Net increase or decrease (-) in cash and cash equivalents -278 401 40 937 Cash and cash equivalents at the beginning of the period 940 416 677 270 Effect of exchange rate fluctuations 15 255 9 888 Cash and cash equivalents at the end of the period 677 270 728 095 The accompanying notes are an integral part of this cash flow statement. 2021 amounts have been affected by minor restatements (see note 2.8. ‘Restatement effects’). - 133 - Bekaert Integrated Annual Report 2022 Notes to the consolidated financial statements 1. General information NV Bekaert SA (the ‘Company’) is a company incorporated and domiciled in Belgium and a world market and technology leader in steel wire transformation and coating technologies. The Company’s consolidated financial statements include those of the Company and its subsidiaries (together referred to as the ‘Group’ or ‘Bekaert’) and the Group’s interest in joint ventures and associates accounted for using the equity method. The consolidated financial statements were authorized for issue by the Board of Directors of the Company on 20 March 2023. - 134 - Bekaert Integrated Annual Report 2022 2. Summary of principal accounting policies 2.1. Statement of compliance The consolidated financial statements have been prepared in accordance with and comply with the International Financial Reporting Standards (IFRS) which have been endorsed by the European Union. New and amended standards and interpretations Standards, interpretations and amendments effective in 2022 In the current year, the Group has applied the below amendments to IFRS standards and Interpretations issued by the Board that are effective for an annual period that begins on or after 1 January 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements. •Amendments to IFRS 3 ‘Business combinations’ - References to the conceptual framework, effective 1 January 2022. •Amendments to IAS 16 ‘Property, plant and equipment’ - Proceeds before intended use, effective 1 January 2022. •Amendments to IAS 37 ‘Provisions, contingent liabilities and contingent assets’ - onerous contracts - cost of fulfilling a contract, effective 1 January 2022. •Annual Improvements Cycle 2018-2020, effective 1 January 2022. These amendments had no impact on the consolidated financial statements of the Group. Standards, amendments and interpretations that are not yet effective in 2022 and have not been early adopted The Group has not early adopted any other standards, interpretations or amendments that have been issued but are not yet effective. These new, and amendments to, standards and interpretations effective after 2022 are not expected to have a material impact on the financial statements. •Amendments to IAS 1 ‘Presentation of Financial Statements’ - Classification of Liabilities as Current or Non-Current, effective 1 January 2024. •Amendments to IAS 1 ‘Presentation of Financial Statements’ - Disclosure of Accounting policies, effective 1 January 2023. •Amendments to IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ - Definition of Accounting estimates, effective 1 January 2023. •Amendments to IAS 12 ‘Income taxes’ - Deferred taxes related to assets and liabilities arising from a single transaction, effective 1 January 2023. •Amendments to IAS 16 'Leases - Lease liability in a Sale and Leaseback, effective on 1 January 2024. •Amendments to IFRS 17 ‘Insurance contracts; initial application of IFRS 17 and IFRS 9 - Comparative information', effective 1 January 2023. The Group will adopt these standards and interpretations, if applicable, when they come effective. - 135 - Bekaert Integrated Annual Report 2022 2.2. General principles Basis of preparation The consolidated financial statements are presented in thousands of euro (unless otherwise stated), under the historical cost convention, except for derivatives, financial assets at Stock and financial assets at FVTPL, which are stated at their fair value. Financial assets which do not have a quoted price in an active market or the fair value of which cannot be reliably measured are carried at cost. Unless explicitly stated, the accounting policies are applied consistently with the previous year. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern. Principles of consolidation Subsidiaries Subsidiaries are entities over which NV Bekaert SA exercises control, which is the case when the Company is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date when the Group acquires control until the date when control is relinquished. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: •The contractual arrangement(s) with the other vote holders of the investee •Rights arising from other contractual arrangements •The Group’s voting rights and potential voting rights All intercompany transactions, balances with and unrealized gains on transactions between Group companies are eliminated; unrealized losses are also eliminated unless the impairment is permanent. Equity and net result attributable to non-controlling shareholders are shown separately in the balance sheet, the income statement and the comprehensive income statement. Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between: •the aggregate of the fair value of the consideration received and the fair value of any retained interest; and •the carrying amount of the assets (including goodwill), liabilities and any non-controlling interests of the subsidiary before its disposal. All subsidiaries are following the calendar year as accounting year, except for the Indian companies (from April to March) and Scheldestroom NV (from October to September). The latter do report to the Group according the calendar year. The subsidiaries apply the same accounting policies as the Group. - 136 - Bekaert Integrated Annual Report 2022 Joint arrangements and associates A joint arrangement exists when NV Bekaert SA has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement can be treated as a joint operation (i.e. NV Bekaert SA has rights to the assets and obligations for the liabilities) or a joint venture (i.e. NV Bekaert SA only has rights to the net assets). Associates are companies in which NV Bekaert SA, directly or indirectly, has a significant influence and which are neither subsidiaries nor joint arrangements. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is prepared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or significant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially remeasured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and contingent liabilities acquired is recognized as goodwill. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group’s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group’s share of the losses of a joint venture or associate exceeds the carrying amount of the investment, the investment is carried at nil value and recognition of additional losses is limited to the extent of the Group’s commitment. Unrealized gains arising from transactions with joint ventures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group’s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within ‘Group’s share of the results of joint ventures and associates’ in the statement of profit or loss. Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss. The financial statements of the associate or joint venture are prepared according to the accounting and valuation principles of the Group and for the same reporting period as the Group. Foreign currency translation Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in euro, which is the Company’s functional and the Group’s presentation currency. Financial statements of foreign entities are translated as follows: •assets and liabilities are translated at the closing exchange rate of the European Central Bank; •income, expenses and cash flows are translated at the average exchange rate for the year; •shareholders’ equity is translated at historical exchange rates. Exchange differences arising from the translation of the net investment in foreign subsidiaries, joint ventures and associates at the closing exchange rate are included in shareholders’ equity under ‘cumulative translation adjustments’. On disposal of foreign entities, cumulative translation adjustments are recognized in the income statement as part of the gain or loss on the sale. In the financial statements of the parent company and its subsidiaries, monetary assets and liabilities denominated in foreign currency are translated at the exchange rate at the balance sheet date, thus giving rise to unrealized exchange results. Unrealized and realized foreign-exchange gains and losses are recognized in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Goodwill is treated as an asset of the acquiree and is accordingly accounted for in the acquiree’s currency and translated at the closing rate. - 137 - Bekaert Integrated Annual Report 2022 2.3. Balance sheet items Intangible assets Intangible assets acquired in a business combination are initially measured at fair value; intangible assets acquired separately are initially measured at cost. After initial recognition, intangible assets are measured at cost or fair value less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The amortization period and method are reviewed at each financial year-end. A change in the useful life of an intangible asset is accounted for prospectively as a change in estimate. Under the provisions of IAS 38 intangible assets may have indefinite useful lives. If the useful life of an intangible asset is deemed indefinite, no amortization is recognized and the asset is reviewed at least annually for impairment. Licenses, patents and similar rights Expenditure on acquired licenses, patents, trademarks and similar rights is capitalized and amortized on a straight-line basis over the contractual period, if any, or the estimated useful life, which is normally considered not to be longer than ten years. Computer software on-premises Purchased on-premises software is installed and runs on computers on the premises of the company using the software, rather than at a remote facility such as a server farm or cloud. Generally, such costs are directly associated with the acquisition and implementation of acquired ERP software and are recognized as intangible assets and amortized over five years on a straight-line basis. External (relating to third party providers and consultants) and internal (relating to Bekaert personnel) implementation costs are eligible for capitalization. Website development An intangible asset should be recognized for website development costs if and only if, it meets the general recognition requirements in IAS 38 and the six conditions for recognition as development costs. Most important of these is the requirement to demonstrate how the website will generate probable future economic benefits. Costs linked to website development solely or primarily for promoting and advertising own products and services will be expensed as incurred. When the website is used directly or indirectly in the income generating process, the costs are eligible for capitalization. Cloud computing arrangements In a cloud computing arrangement, a customer pays a fee to a vendor in exchange for access to software over the internet. The software is hosted by the vendor on the vendor’s computing infrastructure. Examples of cloud computing arrangements are Software-as-a-Service (SaaS), platform as a service, infrastructure as a service. This differs from an ‘on-premise’ arrangement where a company licenses or purchases a copy of the software from a vendor and operates the software on its own computing infrastructure. Up-front costs are often incurred in cloud computing arrangements to implement the software. To be eligible for capitalization as an intangible asset, the Group determines if the company is in control of the software or is in control of the configuration or implementation itself. The Group distinguishes the following types of cloud computing arrangements: •private cloud arrangements: these are in nature comparable to on-premise arrangements and are accounted for equally; •public cloud arrangements: configuration or implementation expenses linked to these arrangements are only eligible for capitalization if the Group is in control of the configuration or implementation itself. Commercial assets Commercial assets mainly include customer lists, customer contracts and brand names, mostly acquired in a business combination, with useful lives ranging between 8 and 15 years. - 138 - Bekaert Integrated Annual Report 2022 Emission rights In the absence of any IASB standard or interpretation regulating the accounting treatment of CO2 emission rights, the Group has applied the ‘net approach’, according to which: •the allowances are recognized as intangible assets and measured at cost (the cost of allowances issued free of charge being therefore zero); and •any short position is recognized as a liability at the fair value of the allowances required to cover the shortfall at the balance sheet date. Research and development Expenditure on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding is recognized in the income statement as an expense when it is incurred. Expenditure on development activities where research findings are applied to a plan or design for the production of new or substantially improved products and processes prior to commercial production or use is capitalized if, and only if, all of the recognition criteria set out below are met: •the product or process is clearly defined and costs are separately identified and reliably measured; •the technical feasibility of the product is demonstrated; •the product or process is to be sold or used in house; •the assets are expected to generate future economic benefits (e.g. a potential market exists for the product or, if for internal use, its usefulness is demonstrated); and •adequate technical, financial and other resources required for completion of the project are available. Capitalized development costs are amortized from the commencement of commercial production of the product on a straight-line basis over the period during which benefits are expected to accrue. The period of amortization normally does not exceed ten years. An in-process research and development project acquired in a business combination is recognized as an asset separately from goodwill if its fair value can be measured reliably. Goodwill and business combinations Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred. The identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the difference between: (i) the sum of the following elements: •consideration transferred; •amount of any non-controlling interests in the acquiree; •fair value of the Group’s previously held equity interest in the acquiree (if any); and (ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, this difference is negative (‘negative goodwill’), it is recognized immediately in profit or loss as a bargain purchase gain. Non-controlling interests are initially measured either at fair value or at their proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and any resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest was disposed of. - 139 - Bekaert Integrated Annual Report 2022 Impairment of goodwill For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit’s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. Property, plant and equipment The Group has opted for the historical cost model and not for the revaluation model. Property, plant and equipment separately acquired is initially measured at cost. Property, plant and equipment acquired in a business combination is initially measured at fair value, which thus becomes its deemed cost. Assets under construction are stated at cost, net of accumulated impairment losses, if any. After initial recognition, property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes all direct costs and all expenditure incurred to bring the asset to its working condition and location for its intended use. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognized in profit or loss as incurred. Depreciation is provided over the estimated useful lives of the various classes of property, plant and equipment on a straight-line basis. The useful life and depreciation method are reviewed at least at each financial year-end. Unless revised due to specific changes in the estimated economic useful life, annual depreciation rates are as follows: •land: 0% •buildings: 5% •plant, machinery & equipment: 8%-25% •R&D testing equipment: 16.7%-25% •furniture and vehicles: 20% •computer hardware: 20% An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is derecognized. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate. Right-of-Use (RoU) property, plant & equipment The Group as lessee The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as printers, copiers and small office equipment). For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located - 140 - Bekaert Integrated Annual Report 2022 or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories. Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the underlying asset. If a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Rights to use land are amortized over the contractual period which can vary between 30 and 100 years, but is in most cases 50 years. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36 to determine whether a right-of-use asset is impaired. Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occurs. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead accounts for any lease and associated non-lease components as a single arrangement. The Group applies this practical expedient on contracts for company cars and industrial vehicles, where non-lease components such as maintenance and replacement of tires are not separated but included in the lease component. Government grants Government grants relating to the purchase of property, plant and equipment are deducted from the cost of these assets. They are recognized in the balance sheet at their expected value at the time of initial government approval and corrected, if necessary, after final approval. The grant is amortized over the depreciation period of the underlying assets. Financial assets The Group classifies its financial assets in the following categories: measured at amortized cost, at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). The classification depends on the contractual characteristics of the financial assets and the business model under which they are held. Management determines the classification of its financial assets at initial recognition. Financial assets at amortized cost Financial assets are classified at amortized cost when the contract has the characteristics of a basic lending arrangement and they are held with the intention of collecting the contractual cash flows until their maturity. The Group’s financial assets at amortized cost comprises, unless stated otherwise, trade and other receivables, bills of exchange received, short-term deposits and cash and cash equivalents in the balance sheet. They are measured at amortized cost using the effective interest method, less any impairment. A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group’s consolidated statement of financial position) when: •the rights to receive cash flows from the asset have expired •the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement’; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extend, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extend of its continuing involvement. in that case, the Group also recognizes an associated liability. The transferred - 141 - Bekaert Integrated Annual Report 2022 asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Financial assets at fair value Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges. Bills of exchange received Payment by means of bills of exchange (bank acceptance drafts) is a widespread practice in China. Bills of exchange received are either settled at maturity date, discounted before the maturity date or transferred to a creditor to settle a liability. Discounting is done either with or without recourse. With recourse means that the discounting bank can claim reimbursement of the amount paid in case the issuer defaults. When a bill is discounted with recourse, the amount received is not deducted from the outstanding bills of exchange received, but a liability is recognized in ‘current interest-bearing debt’ until the maturity date of that bill. Cash & cash equivalents and short-term deposits Cash equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignificant risk of change in value. Cash equivalents are highly liquid and have original maturities of three months or less, while short-term deposits have original maturities of more than three months and less than one year. Balances from cash pool facilities are reported as cash & cash equivalents. Bank overdrafts are not reported as a deduction from cash & cash equivalents but as interest-bearing debt. Impairment of financial assets Financial assets that are debt instruments, other than those measured at FVTPL, are tested for impairment using the expected credit loss model (‘ECL’). The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information. The Group always recognizes lifetime ECL for trade receivables. At each reporting date, Bekaert measures the impairment loss for financial assets measured at amortized cost (e.g. trade receivables and bills of exchange received) as the present value of the expected cash shortfalls (discounted at the original effective interest rate). Amounts deemed uncollectible are written off against the corresponding allowance account at each balance sheet date. In assessing collective impairment, the Group uses historical information on the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. Additions to and recoveries from the bad debt allowance account related to trade receivables are reported under ‘selling expenses’ in the income statement. Inventories Inventories are valued at the lower of cost and net realizable value. Cost is determined by the first-in, first-out (FIFO) method. For processed inventories, cost means full cost including all direct and indirect production costs required to bring the inventory items to the stage of completion at the balance sheet date. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and costs necessary to make the sale. - 142 - Bekaert Integrated Annual Report 2022 Share capital When shares are repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Repurchased shares (treasury shares) are presented in the balance sheet as a deduction from equity. The result on the disposal of treasury shares sold or cancelled is recognized in retained earnings. Non-controlling interests Non-controlling interests represent the shares of minority or non-controlling shareholders in the equity of subsidiaries which are not fully owned by the Group. At the acquisition date, the item is either measured at its fair value or at the non-controlling shareholders’ proportion of the fair values of net assets recognized on acquisition of a subsidiary (business combination). Subsequently, it is adjusted for the appropriate proportion of subsequent profits and losses. The losses attributable to non-controlling shareholders in a consolidated subsidiary may exceed their interest in the equity of the subsidiary. A proportional share of total comprehensive income is attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Provisions Provisions are recognized in the balance sheet when the Group has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. When appropriate, provisions are measured on a discounted basis. Restructuring A provision for restructuring is only recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly before the balance sheet date. Restructuring provisions only include the direct expenditure arising from the restructuring which is necessarily incurred on the restructuring and is not associated with the ongoing activities of the entity. Site remediation A provision for site remediation in respect of contaminated land is recognized in accordance with the Group’s published environmental policy and applicable legal requirements. Employee benefit obligations The parent company and several of its subsidiaries have pension, death benefit and health care benefit plans covering a substantial part of their workforce. Defined-benefit plans Most pension plans are defined-benefit plans with benefits based on years of service and level of remuneration. For defined-benefit plans, the amount recognized in the balance sheet (net liability or asset) is the present value of the defined-benefit obligation less the fair value of any plan assets. The present value of the defined-benefit obligation is the present value, without deducting any plan assets, of expected future payments required to settle the obligation resulting from employee service in the current and prior periods. The present value of the defined-benefit obligation and the related current and past service costs are calculated using the projected unit credit method. The discount rate used is the yield at balance sheet date on high-quality corporate bonds with remaining terms to maturity approximating those of the Group’s obligations. In case the fair value of plan assets exceeds the present value of the defined-benefit obligations, the net asset is limited to the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The net interest on the net defined-benefit liability/asset is based on the same discount rate. Actuarial gains and losses comprise experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred) and the effects of changes in actuarial assumptions. Past service cost is the change in the present value of the defined-benefit obligation for employee service in prior periods and resulting in the current period from a plan amendment or a curtailment. Past service costs are recognized immediately through profit or loss. Remeasurements of the net defined-benefit liability (asset) comprise (a) actuarial gains and losses, (b) the return on plan assets, after deduction of the amounts included in net interest on the net defined-benefit liability - 143 - Bekaert Integrated Annual Report 2022 (asset) and (c) any change in the effect of the asset ceiling, after deduction of any amounts included in net interest on the net defined-benefit liability (asset). Remeasurements are recognized immediately through equity. A settlement is a transaction that eliminates all further legal or constructive obligations for part or all of the benefits provided under a defined-benefit plan, other than a payment of benefits to, or on behalf of, employees that is set out in the terms of the plan and included in the actuarial assumptions. In the income statement, current and past service cost, including gains or losses from settlements, are included in the operating result (EBIT), and the net interest on the net defined-benefit liability (asset) is included in interest expense, under interest on interest-bearing provisions. Pre-retirement pensions in Belgium and plans for medical care in the United States are also treated as defined-benefit plans. Defined-contribution plans Obligations in respect of contributions to defined-contribution pension plans are recognized as an expense in the income statement as they fall due. By law, defined-contribution pension plans in Belgium are subject to minimum guaranteed rates of return. Before 2015, the defined-contribution plans in Belgium were basically accounted for as defined-contribution plans. New legislation dated December 2015 however triggered the qualification. As a consequence, the defined-contribution plans are reported as defined-benefit obligations, whereby as from year end 2016 an actuarial valuation was performed. Other long-term employee benefits Other long-term employee benefits, such as service awards, are accounted for using the projected unit credit method. However, the accounting method differs from the method applied for post-employment benefits, as actuarial gains and losses are recognized immediately through profit or loss. Share-based payment plans The Group issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled plans allow Group employees to acquire shares of NV Bekaert SA, and include stock option plans (‘SOP’), performance share plans (‘PSP’), personal shareholding requirement plans (‘PSR’) and stock grants, all of which are operated in Belgium. Cash-settled plans entitle Group employees to receive payment of cash bonuses based on the price of the Bekaert share on the Euronext stock exchange, and include share appreciation rights (‘SAR’) and performance share unit plans (‘PSU’), all of which are operated outside Belgium. Equity-settled share-based payments are recognized at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed, with a corresponding increase in equity, on a straight-line basis over the vesting period, based on the Group’s estimate of the number of equity instruments granted that will eventually vest and adjusted for the effect of non market-based vesting conditions. Cash-settled share-based payments are recognized as liabilities over the vesting period at fair value, which is remeasured at each reporting date and at the date of settlement. Changes in fair value are recognized in the income statement over the vesting period, taking into account the number of units or rights expected to vest. The Group uses binomial models or Monte Carlo simulations to determine the fair value of the share-based payment plans. Interest-bearing debt Interest-bearing debt includes loans and borrowings which are initially recognized at the fair value of the consideration received net of transaction costs incurred. In subsequent periods, they are carried at amortized cost using the effective interest-method, any difference between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If financial liabilities are hedged using derivatives qualifying as a fair value hedge, the hedging instruments are carried at fair value and the hedged items are remeasured for fair value changes due to the hedged risk (see accounting policies for derivatives and hedging). - 144 - Bekaert Integrated Annual Report 2022 Lease liabilities Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise: •fixed lease payments, less any lease incentives receivable; •variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; •the amount expected to be payable by the lessee, under residual value guarantees; •the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and •payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever: •The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. •The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate. •A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. Trade payables and other current liabilities Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company. Income taxes Income taxes are classified as either current or deferred taxes. Current income taxes include expected tax charges based on the accounting profit for the current year and adjustments to tax charges of prior years. In evaluating the potential income tax liabilities, the Group assumes that the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations. The Group takes into account both the assessments, decisions and verdicts received from tax audits and other kinds of information sources as well as the potential sources of challenge from tax authorities. The Group recognizes a liability when the Group assesses it is not probable for the tax authorities to accept the position that the Group takes regarding the tax treatment in question. The Group measures the income tax liability according to the most likely amount of the potential economic outflow. However, Bekaert continues to believe that its positions on all these audits are robust. Deferred taxes are calculated, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred taxes are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled, based on tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized; this criterion is reassessed at each balance sheet date. In assessing the recoverability of deferred tax assets, the Group relies on the forecast assumptions used elsewhere in the financial statements and in other management reports. Deferred tax on temporary differences arising on investments in subsidiaries, associates and joint ventures is provided for, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. - 145 - Bekaert Integrated Annual Report 2022 Derivatives, hedging and hedging reserves The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions. Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date. The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity. Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item. Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders’ equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement. If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment. In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis. The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group’s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement. Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA). - 146 - Bekaert Integrated Annual Report 2022 Virtual Power Purchase Agreements (VPPA) The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption. Impairment of assets Goodwill and intangible assets with an indefinite useful life or not yet available for use (if any) are reviewed for impairment at least annually; other tangible and intangible fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized in the income statement as and when the carrying amount of an asset exceeds its recoverable amount (being the higher of its fair value less costs of disposal and its value in use). The fair value less costs of disposal is the amount obtainable from the sale of an asset in an arm’s length transaction less the costs of disposal, while value in use is the present value of the future cash flows expected to be derived from an asset. Recoverable amounts are estimated for individual assets or, if this is not possible, for the smallest cash-generating unit to which the assets belong. Reversal of impairment losses recognized in prior years is included as income when there is an indication that the impairment losses recognized for the asset are no longer needed or the need has decreased, except for impairment losses on goodwill, which are never reversed. 2.4. Income statement items Revenue recognition The Group recognizes revenue mainly from the sale of products. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognizes revenue from the sale of products when it transfers control over the corresponding product to a customer. Revenue from the sale of products is recognized at a point in time. Sales are recognized net of sales taxes and discounts. Interest is recognized on a time-proportional basis that reflects the effective yield on the asset. The Group recognizes revenue for a sales-based or usage-based royalty only when (or as) the later of the following events occurs: the subsequent sale or usage occurs; and the performance obligation to which some or all of the sales-based or usage-based royalties has been allocated has been satisfied. Royalties are recognized on an accrual basis in accordance with the terms of agreements and are linked to technology and management support. Dividends are recognized when the shareholder’s right to receive payment is established. 2.5. Statement of comprehensive income and statement of changes in equity The statement of comprehensive income presents an overview of all income and expenses recognized both in the income statement and in equity. In accordance with IAS 1 ‘Presentation of Financial Statements’, an entity can elect to present either a single statement of comprehensive income or two statements, i.e. an income statement immediately followed by a comprehensive income statement. The Group elected to do the latter. A further consequence of presenting a statement of comprehensive income is that the content of the statement of changes in equity is confined to owner-related changes only. - 147 - Bekaert Integrated Annual Report 2022 2.6. Alternative performance measures To analyze the financial performance of the Group, Bekaert consistently uses various non-GAAP metrics or Alternative Performance Measures (‘APMs’) as defined in the European Securities and Markets Authority’s (‘ESMA’) Guidelines on Alternative Performance Measures. In accordance with these ESMA Guidelines, the definition and reason for use of each of the APMs as well as reconciliation tables are provided in the ‘Alternative performance measures’ section of the Financial Statements. The main APMs used in the Financial Statements relate to underlying performance measures. Underlying performance measures Operating income and expenses that are related to restructuring programs, impairment losses, the initial accounting for business combinations, business disposals, environmental provisions or other events and transactions that have a one-off effect are excluded from Underlying EBIT(DA) measures. Restructuring programs mainly include lay-off costs, gains and losses on disposal, and impairment losses of assets involved in a shut-down, major reorganization or relocation of operations. When not related to restructuring programs, only impairment losses resulting from testing cash-generating units qualify as one-off effects. One-off effects from business combinations mainly include: acquisition-related expenses, negative goodwill, gains and losses on step acquisition, and recycling of CTA on the interest previously held. One-off effects from business disposals include gains and losses on the sale of businesses that do not qualify as discontinued operations. These disposed businesses may consist of integral, or parts (disposal groups) of subsidiaries, joint ventures and associates. Besides environmental provisions, other events or transactions that are not inherent to the business and have a one-off effect mainly include disasters and sales of investment property. 2.7. Miscellaneous Non-current assets held for sale and discontinued operations A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. A discontinued operation is a component of an entity which the entity has disposed of or which is classified as held for sale, which represents a separate major line of business or geographical area of operations and which can be distinguished operationally and for financial reporting purposes. For a sale to be highly probable, the entity should be committed to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan should be initiated, and the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its current fair value, and the sale should be expected to be completed within one year from the date of classification. Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs necessary to make the sale. Any excess of the carrying amount over the fair value less costs to sell is included as an impairment loss. Depreciation of such assets is discontinued as from their classification as held for sale. Comparative balance sheet information for prior periods is not restated to reflect the new classification in the balance sheet. Contingencies Contingent assets are not recognized in the financial statements. They are disclosed if the inflow of economic benefits is probable. Contingent liabilities are not recognized in the financial statements, except if they arise from a business combination. They are disclosed, unless the possibility of a loss is remote. - 148 - Bekaert Integrated Annual Report 2022 Events after the balance sheet date; Events after the balance sheet date which provide additional information about the Company’s position as at the balance sheet date (adjusting events) are reflected in the financial statements. Events after the balance sheet date which are not adjusting events are disclosed in the notes if material. 2.8. Restatement effects The 2021 comparative information has been restated due to: (a). Attributing benefits to periods of service under IAS 19 ‘Employee Benefits’ In May 2021, the IFRS Interpretations Committee finalized an agenda decision about the periods of service to which an entity attributes benefit for a particular defined benefit plan. Under the terms of the plan, employees are entitled to a lump sum benefit payment when they reach a specified retirement age provided they are employed by the entity when they reach that retirement age; and the amount of the retirement benefit to which an employee is entitled depends on the length of employee service with the entity before the retirement age and is capped at a specified number of consecutive years of service. IAS 19 requires an entity to attribute benefit to periods of service under the plan's benefit formula from the date when employee service first leads to benefits under the plan until the date when further employee service will lead to no material amount of further benefits under the plan. An entity is required to attribute benefit to periods in which the obligation to provide post-employment benefits arise. The obligation arises as employees render services in return for post-employment benefits an entity expects to pay in future reporting periods. The agenda decision specifies that employee service before the vesting date gives rise to a constructive obligation because, at the end of each successive reporting period, the amount of future service an employee will have to render before becoming entitled to the benefit is reduced. The defined benefit liabilities at year end 2021 have been restated for Indonesia to reflect the impact of the May 2021 IFRIC agenda decision on the attribution of benefits to periods of service. This change affected both the defined-benefit obligation (€ 1.6 million decrease) and benefit expense level. (b). Reclassification of implementation and customization costs linked to cloud computing arrangements In April 2021, the IFRS Interpretation Committee published an agenda decision on the clarification of accounting for the costs of configuring or customizing the supplier's application software in a SaaS arrangement that is determined to be a service contract. The Group previously capitalized costs incurred in configuring or customizing a supplier's application software in a cloud-based computing arrangement as intangible assets as the Group considered that it would benefit form those costs over the life of the asset. Due to the nature of this agenda decision and the level of spend incurred in relation to the Groups' Digital Transformation, the Group has reviewed its accounting policy to align with the IFRIC guidance issued in relation to Software-as-a-service (SaaS) costs previously capitalized. The Group will only recognize costs as intangible assets if the configuration or customization activities create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Costs that do not result in intangible asses are expensed as incurred. The revision to the accounting policy has been accounted for retrospectively resulting in a prior year restatement. The restatement affects the balance sheet in NV Bekaert, where € 4.1 million is reclassified from intangible assets into IT costs in the income statement. For the purpose of this annual report, the reclassifications and restatement effects are not presented on the face of the other financial statements. They are summarized below in a concise format and referenced to one of the above restatement elements (a or b) where appropriate. - 149 - Bekaert Integrated Annual Report 2022 Consolidated income statement in thousands of € - Year ended 31 December 2021 as published 2021 restatement 2021 as restated Administrative expenses (b) -161 090 -4 113 -165 203 Other operating revenues (a) 62 940 1 617 64 556 Operating result (EBIT) 513 086 -2 497 510 589 EBIT - Underlying (a+b) 514 617 -2 497 512 121 Result before taxes 476 296 -2 497 473 799 Income taxes (a+b) -133 296 -418 -133 714 Result after taxes (consolidated companies) 343 000 -2 915 340 085 RESULT FOR THE PERIOD 450 620 -2 915 447 705 Attributable to the Group 406 977 -2 915 404 062 non-controlling interests 43 643 — 43 643 Earnings per share in thousand of € 2021 as published 2021 restatement 2021 as restated Result for the period attributable to the Group Basic 7.14 -0.05 7.09 Diluted 7.06 -0.05 7.01 Consolidated statement of comprehensive income in thousands of € - Year ended 31 December 2021 as published 2021 restatement 2021 as restated Result for the period 450 620 -2 915 447 705 Other comprehensive income (OCI) Other comprehensive income reclassifable to income statement in subsequent periods Exchange differences arising during the year (a) 91 161 56 91 217 OCI reclassifiable to income statement in subsequent periods, after tax 88 173 56 88 229 Other comprehensive income for the period 137 909 56 137 965 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 588 529 -2 859 585 670 Attributable to the Group 545 660 -2 859 542 801 non-controlling interests 42 869 — 42 869 - 150 - Bekaert Integrated Annual Report 2022 Assets as at 31 December in thousands of € 2021 as published 2021 restatement 2021 as restated Non-current assets Intangible assets (b) 61 440 -4 113 57 326 Deferred tax assets (a + b) 119 599 -355 119 244 Total 4 843 756 -4 468 4 839 288 Equity and liabilities as at 31 December in thousands of € 2021 as published 2021 restatement 2021 as restated Retained earnings (a+b) 1 984 791 -2 915 1 981 876 Other Group reserves (a) -232 012 56 -231 957 Equity attributable to the Group 1 969 551 -2 859 1 966 692 Non Current liabilities 1 107 -2 1 106 Employee benefit obligations (a) 77 659 -1 688 75 971 Deferred tax liabilities (a + b) 51 979 79 52 059 Total 4 843 756 -4 468 4 839 288 Consolidated cash flow statement in thousands of € - Year ended 31 December 2021 as published 2021 restatement 2021 as restated Operating activities Operating result (EBIT) (a + b) 513 086 -2 497 510 589 Non-cash items included in operating result (a) 190 222 -1 617 188 605 Gross cash flows from operating activities 536 997 -4 113 532 884 Consolidated statement of changes in equity in thousands of € - Year ended 31 December 2021 as published 2021 restatement 2021 as restated Opening statement Total comprehensive income for the period 588 529 -2 859 585 670 Closing balance 2 100 522 -2 859 2 097 663 - 151 - Bekaert Integrated Annual Report 2022 3. Significant accounting judgements and key sources of estimation uncertainty In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. These judgments, estimates and assumptions are reviewed on an ongoing basis. 3.1. Significant judgements in applying the entity's accounting policies The following are the significant judgements made by management, apart from those involving estimations (see note 3.2. ‘Key sources of estimation uncertainty’ below), that have a significant effect on the amounts reported in the consolidated financial statements. •Management assessed that a constructive obligation exists in Belgium to provide pre-retirement schemes for employees as from the first day of service (see note 6.16. ‘Employee benefit obligations’) and therefore these pre-retirement schemes are treated as defined-benefit plans using the projected unit credit method. The obligation amounted to € 6.3 million (2021: € 8.0 million). •Management concluded that the criteria for capitalization were not met and hence recognized development expenditure through profit or loss. •When management incurs implementation and customization costs when entering into cloud computing arrangements, management makes judgments to determine which costs can be recognized as intangible asset. Management first assess if the arrangement provides a resource it can control. When making this judgment, it considers the IFRS Interpretation Committee (IFRIC) agenda decision of March 2019 on Customer’s Right to Receive Access to the Supplier’s Software Hosted on the Cloud. Thereafter, it assess which fees and implementation costs can be capitalized, Management considered the IFRS Interpretation Committee (IFRIC) agenda decision of April 2021 on the clarification of accounting in relation to these costs. •Management makes judgments in defining the functional currency of Group entities based on economic substance of the transactions relevant to these entities. By default the functional currency is the one of the country in which the entity is operating. See note 7.7. ‘Subsidiaries, joint ventures and associates’ for a comprehensive list of entities and their functional currency. •Management assessed that it is controlling the Venezuelan subsidiaries. In spite of the political and monetary instability, management was able to keep the company operational and hence concluded that it is in control. The US dollar is the functional currency and as from May 2019, banks can act as intermediaries in foreign currency transactions through ‘exchange tables’, a measure that makes the exchange control that operated since 2003 and that gave the State a monopoly in currency management, more flexible. At year-end 2022, the cumulative translation adjustments (‘CTA’) amount to € -59.6 million, which - in case of loss of control - would be recycled to income statement. Apart from the CTA, the contribution of the Venezuelan operations to the consolidated accounts is immaterial. - 152 - Bekaert Integrated Annual Report 2022 •Deferred tax assets were recognized to the extent that it was probable that future taxable profits would be available, taking into account all evidence, both positive and negative. This assessment was done using prudent estimates based on the business plan for the entity concerned, typically using a five year time horizon. In some countries, deferred tax assets on capital losses, trade losses and tax credits were recognized to the extent of uncertain tax provisions recognized, in order to reflect that some tax audit adjustments would result in an adjustment of the amount of tax losses rather than in a tax cash-out for the entity concerned. 3.2. Key sources of estimation uncertainty The following are the key assumptions concerning the future, and the other key sources of estimation uncertainty at the end of the reporting period that have a risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year. •Management performed the annual impairment test on the goodwill related to BBRG on the basis of the latest business plan. Following the realized turnaround performance of the business in 2020, headroom has become very solid, reducing the likelihood of an impairment loss (see note 6.2. ‘Goodwill’). •Impairment analyses are based upon assumptions such as market evolution, margin evolution and discount rates. The ability of an entity to pass on changes in raw material prices to its customers (either through contractual arrangements or through commercial negotiations) is included in the margin evolution assumption. Sensitivity analyses for reasonable changes in these assumptions are presented as part of note 6.2. ‘Goodwill’. •Given its global presence, Bekaert is exposed to tax risks in many jurisdictions. On the one hand, the application of tax law in the different jurisdictions can be complex and requires judgement to assess risk and estimate outcomes, which is a major source of uncertainty. On the other hand, tax authorities of the jurisdictions conduct regular tax audits that may reveal potential tax issues. As the tax audits can take many years to resolve, this further adds to the uncertainty. While the outcome of such tax audits is not certain, Bekaert has considered the merits of its filing positions of the matters subject to each tax audit in an overall evaluation of potential tax liabilities, and concludes that the Group has adequate liabilities recorded in its consolidated financial statements for •exposures on these matters. Accordingly, Bekaert considers it unlikely that potential tax exposures over and above the amounts currently recorded as liabilities in the consolidated financial statements will be material to its financial condition. Both the timing and the position taken by the tax authorities in the different jurisdictions give rise to uncertainty and can result in an adjustment to the carrying amounts of income tax payable related to uncertain tax positions within the next financial year. At year- end 2022 Bekaert has uncertain tax positions recognized as income taxes payable amounting to € 43.8 million (2021: € 38.9 million). See note 6.21. ‘Tax positions’. 3.3. Impact of macro-economic environment, climate and Russia Impact of the macroeconomic environment The evolution in the macroeconomic environment has affected businesses all over the world. The Group has identified the risks linked to these evolutions and has implemented mitigating actions, as described in the Corporate Governance Statements - chapter ‘General internal control and ERM’ of this report. Increasing risks arising from demand impact and inflationary cost pressure from economic crises as well as impacts on discount rates Impactful demand changes can affect sectors that are relevant to Bekaert. A crisis or recession can lead to a demand decline driven by weak consumer confidence and postponed investments. The resulting upstream and downstream overcapacity can lead to price erosion across the supply chain. To mitigate these risks, Bekaert implements measures to be cost-competitive, to flex costs, and to pass on cost inflation. The measures to flex costs and pass on cost inflation are reflected in the 2022 financials. In 2022 there were significant increases to the costs of the Group’s raw materials, principally wire rod, and to its energy costs. (see note 5.3. Operating result (EBIT) by nature). All business units responded well to these challenges with pass through of increases in costs. The underlying EBIT bridge demonstrates that the positive price and mix impact was driven by further business-mix improvements and strong pricing discipline, which - 153 - Bekaert Integrated Annual Report 2022 more than offset the adverse effects of lower sales volumes and higher conversion cash costs from the under-absorption of fixed overheads. (see note 5.2. Operating result (EBIT) by function and press release related to the 2022 Full Year financial statements). In the valuation of the Group’s defined-benefit plans, the principal actuarial assumptions are also influenced by the macroeconomic evolution. The details of those valuations are included in note 6.16. ‘Employee benefit obligations’. Changes recognized in equity amounted to € -3.4 million and were driven by € 97.3 million loss on plan assets reflecting negative asset return, offset by € 100.7 million gains in defined benefit obligation. The latter can be broken down into € 119.0 million gains due to changes in financial assumptions reflecting increased discount rates and increased inflation assumption, € 1.9 million losses due to changes in demographic assumptions and € 16.4 million losses in liabilities due to experience adjustments. Impact of climate changes and environmental footprint In order to support the market and technology positioning in green energy markets, Bekaert has concluded partnerships in 2022 that are improving market access and our technology positions in high growth sectors (see note 6.6. Other non-current assets). These included: •a partnership with Pajarito Powder (US) to accelerate the development of spearheading innovations in the market of green hydrogen production •a partnership with TFI Marine (Ireland) to accelerate the go-to-market of digital-enabled mooring solutions for floating offshore wind farms The Group has also signed Virtual Power Purchase Agreements (see note 7.2. Financial risk management and financial instruments) in the US and India and is installing a solar park in Burgos, Spain, to help reduce and offset its carbon greenhouse emissions. The Group also invested in capital expenditure in 2022 supporting environmental sustainable activities (see note 6.3. Property, plant and equipment as well as the chapter ‘EU Taxonomy Key Performance Indicators’ in the Environmental Statements). Impact of the conflict in Ukraine Since the outbreak of conflict in Ukraine, we have significantly scaled back business activities in and with Russia. The presence of Bekaert in Russia includes a manufacturing plant (Lipetsk) and a sales office (Moscow), mainly operating for the Rubber Reinforcement segment. Most of the activities are ’local for local’ (local sourcing and production and domestic sales). The financials of the Lipetsk plant in Russia are included in the consolidated financial statements of 2022. The ongoing conflict is a clear impairment indicator, and as such the Group has performed an impairment test at year-end under value in use. Based on the outcome of the impairment test, the Group has taken the decision to fully impair the fixed assets (see note 6.3. Property, Plant and Equipment). We are therefore taking in 2022 a non-cash exceptional charge of € 55 million in the result (see note 5.2. Operating result (EBIT) by function). At 31 December 2022, there remained consolidated current assets of € 26 million and consolidated liabilities of € 3 million in relation to activities in the Lipetsk plant. Lipetsk also has an intercompany debt position towards partners within the Group of € 35 million as well as net intercompany liabilities of € 12 million. We continue to monitor the potential impact of applicable sanctions or restrictions, on our Russian entity. The contribution of the Russian entities is approximately 1.1% of the Group total. Our exposure against the Russian Ruble is presented in note 7.2.’Financial risk management and financial derivatives’. Our cumulative currency translation adjustments on the Russian Ruble are presented in note 6.14.’Retained earnings and other Group reserves’. - 154 - Bekaert Integrated Annual Report 2022 4. Segment reporting Transforming steel wire and applying unique coating technologies form our core business. Depending on our customers’ requirements, we draw wire in different diameters and strengths, even as thin as ultrafine fibers of one micron. We group the wires into cords, ropes and strands, weave or knit them into fabric, or process them into an end product. The coatings we apply reduce friction, improve corrosion resistance, or enhance adhesion with other materials. We also develop products and solutions that are made of other metals and materials. This is part of our strategy to drive creativity beyond steel. Bekaert uses a business segmentation to evaluate the nature and financial performance of the business as a whole, in line with the way financial performance is reported to the chief operating decision maker (Bekaert Group Executive (BGE)). The Group’s business units (BU) are characterized by BU-specific product and market profiles, industry trends, cost drivers, and technology needs tailored to specific industry requirements. More information on the segments can be found in the part ‘About us’ of this report. The following four business units are presented: 1.Rubber Reinforcement (RR): 39% of consolidated third party sales (2021: 42%) 2.Steel Wire Solutions (SWS): 37% of consolidated third party sales (2021: 38%) 3.Specialty Businesses (SB): 14% of consolidated third party sales (2021: 10%) 4.Bridon-Bekaert Ropes Group (BBRG): 10% of consolidated third party sales (2021: 10%) No segments have been aggregated. - 155 - Bekaert Integrated Annual Report 2022 4.1. Key data by reporting segment Capital employed elements (intangible assets, goodwill, property, plant and equipment, RoU property, plant and equipment and the elements of the operating working capital) are allocated to the various segments. All other assets and liabilities are reported as unallocated assets or liabilities. ‘Group’ mainly consists of the functional units innovation & technology, engineering and unallocated expenses for group management and services; it does not constitute a reportable segment in itself. Any sales between segments are transacted at prices which reflect the arm’s length principle. Intersegment mainly includes eliminations of receivables and payables, of sales and of margin on transfers of inventory items and of PP&E and related adjustments to depreciation and amortization. No other material reporting items then the ones mentioned below are provided to the chief operating decision maker. 2021 as reported in thousands of € Rubber Reinforcement Steel Wire Solutions Specialty Businesses BBRG Group Intersegment Consolidated Consolidated third party sales 2 054 155 1 818 504 475 661 481 000 10 339 — 4 839 659 Consolidated sales 2 090 259 1 856 998 488 129 483 165 94 227 -173 118 4 839 659 Operating result (EBIT) 245 783 212 860 71 112 36 263 -54 572 1 640 513 086 EBIT - Underlying 247 371 209 330 71 872 45 050 -60 692 1 686 514 617 Depreciation and amortization ² 96 480 38 488 8 511 28 077 4 284 -10 067 165 774 Impairment losses 79 -1 535 45 — -107 — -1 518 EBITDA 342 342 249 813 79 668 64 340 -50 394 -8 426 677 342 Segment assets 1 642 685 1 141 109 350 997 579 047 -35 946 -146 702 3 531 190 Unallocated assets 1 312 566 Total assets 4 843 756 Segment liabilities 436 168 517 914 120 461 135 824 119 644 -74 383 1 255 628 Unallocated liabilities 1 487 606 Total liabilities 2 743 234 Capital employed 1 206 517 623 195 230 536 443 223 -155 590 -72 319 2 275 562 Weighted average capital employed 1 150 373 559 338 224 152 433 278 -123 646 -74 465 2 169 030 Return on weighted average capital employed (ROCE) 21.4% 38.1% 31.7% 8.4% — — 23.7% Capital expenditure – PP&E 58 392 42 907 17 944 40 160 1 735 -7 835 153 302 Capital expenditure – intangible assets 465 1 752 76 111 10 809 -360 12 852 Share in the results of joint ventures and associates 8 701 98 924 — — -6 — 107 619 Investments in joint ventures and associates 49 977 138 670 — — 13 — 188 661 Number of employees (year-end) ¹ 12 437 6 121 1 534 2 287 1 130 — 23 509 - 156 - Bekaert Integrated Annual Report 2022 2021 redefined ³ in thousands of € Rubber Reinforcement Steel Wire Solutions Specialty Businesses BBRG Group Intersegment Consolidated Consolidated third party sales ⁴ 2 054 155 1 818 504 475 661 481 000 10 339 — 4 839 659 Consolidated sales 2 090 259 1 856 998 488 129 483 165 94 227 -173 118 4 839 659 Operating result (EBIT) 247 175 213 012 71 112 36 336 -58 685 1 640 510 589 EBIT - Underlying 248 764 209 481 71 872 45 122 -64 805 1 686 512 121 Depreciation and amortization ² 96 480 38 488 8 511 28 077 4 284 -10 067 165 774 Impairment losses 79 -1 535 45 — -107 — -1 518 EBITDA 343 734 249 965 79 668 64 413 -54 508 -8 426 674 845 Segment assets 1 642 685 1 141 109 350 997 579 047 -40 059 -146 702 3 527 077 Unallocated assets 1 312 212 Total assets 4 839 288 Segment liabilities 436 168 517 914 120 461 135 824 119 644 -74 383 1 255 628 Unallocated liabilities 1 485 997 Total liabilities 2 741 625 Capital employed 1 206 517 623 195 230 536 443 223 -159 703 -72 319 2 271 449 Weighted average capital employed 1 150 373 559 338 224 152 433 278 -125 703 -74 465 2 166 973 Return on weighted average capital employed (ROCE) 21.5% 38.1% 31.7% 8.4% — — 23.6% Capital expenditure – PP&E 58 392 42 907 17 944 40 160 1 735 -7 835 153 302 Capital expenditure – intangible assets 465 1 752 76 111 6 695 -360 8 739 Share in the results of joint ventures and associates 8 701 98 924 — — -6 — 107 619 Investments in joint ventures and associates 49 977 138 670 — — 13 — 188 661 Number of employees (year-end) ¹ 12 437 6 121 1 534 2 287 1 130 — 23 509 - 157 - Bekaert Integrated Annual Report 2022 2022 in thousands of € Rubber Reinforcement Steel Wire Solutions Specialty Businesses BBRG Group Intersegment Consolidated Consolidated third party sales 2 197 607 2 081 592 766 472 584 702 21 417 — 5 651 790 Consolidated sales 2 228 682 2 137 571 788 242 588 819 118 857 -210 380 5 651 790 Operating result (EBIT) 110 776 146 563 130 986 38 744 -67 234 5 918 365 754 EBIT - Underlying 178 665 148 083 131 766 60 418 -61 552 1 183 458 563 Depreciation and amortization ² 91 038 48 666 22 171 42 745 7 881 -9 706 202 795 Impairment losses 59 050 830 120 2 669 — -4 735 57 934 EBITDA 260 865 196 059 153 277 84 158 -59 353 -8 522 626 483 Segment assets 1 495 373 1 114 525 470 005 628 577 -54 894 -141 886 3 511 700 Unallocated assets 1 317 613 Total assets 4 829 313 Segment liabilities 376 208 387 217 142 568 137 694 109 613 -74 980 1 078 320 Unallocated liabilities 1 521 437 Total liabilities 2 599 757 Capital employed 1 119 165 727 308 327 437 490 883 -164 508 -66 906 2 433 380 Weighted average capital employed 1 146 926 675 960 295 100 467 986 -161 860 -69 776 2 354 337 Return on weighted average capital employed (ROCE) 9.7% 21.7% 44.4% 8.3% — — 15.5% Capital expenditure – PP&E 74 823 45 714 23 648 33 740 3 171 -10 493 170 603 Capital expenditure – intangible assets 397 128 459 4 14 260 -311 14 937 Share in the results of joint ventures and associates -217 54 481 — — -7 — 54 257 Investments in joint ventures and associates 54 880 167 749 — — -744 — 221 886 Number of employees (year-end) ¹ 11 491 6 310 2 133 2 421 1 196 — 23 551 ¹ Number of employees: full-time equivalents. ² Depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables. ³ See note 2.8. 'Restatement effects'. ⁴ The hose and conveyor belt (HCB) activities were moved from the business unit Rubber Reinforcement to the business unit Specialty Businesses as from 1 January 2022 resulting in impact of the year-on-year growth indicators. Pro forma revenue growth of Specialty Businesses excluding the HCB effect was approximately +30%. The HCB activities generated € 115 million in sales for the total of fiscal year 2021 and represented 5% of the Rubber Reinforcement’s total sales and 25% for Specialty Business. Other KPI’s impacted by the change of these activities are limited. No restatements of 2021 were disclosed in the segment table. - 158 - Bekaert Integrated Annual Report 2022 4.2. Revenue by country The table below shows the relative importance of Belgium (i.e. the country of domicile), Chile, China, the USA and Slovakia for Bekaert in terms of revenues and selected non-current assets (i.e. intangible assets; goodwill; property, plant and equipment; RoU property, plant and equipment; investments in joint ventures and associates). in thousands of € 2021 % of total 2022 % of total Consolidated third party sales from Belgium 372 886 8% 497 830 9% from Chile 537 994 11% 531 096 9% from China 980 016 20% 847 094 15% from USA 685 071 14% 1 032 090 18% from Slovakia 419 273 9% 540 821 10% from other countries 1 844 419 38% 2 202 859 39% Total third party consolidated sales 4 839 659 100% 5 651 790 100% Selected non-current assets in Belgium ¹ 118 355 7% 126 717 7% in Chile 79 059 4% 87 449 5% in China 315 190 18% 300 300 17% in USA 151 264 8% 166 967 9% in Slovakia 125 848 7% 126 725 7% in other countries 992 874 56% 997 235 55% Total selected non-current assets ¹ 1 782 591 100% 1 805 393 100% ¹ See note 2.8. 'Restatement effects'. Bekaert’s top 5 customers together represented 21% (2021: 21%) of the Group’s total consolidated sales, while the next top 5 customers represented another 5% (2021: 8%) of the Group’s total consolidated sales. No individual customer contributed 10% to consolidated sales. - 159 - Bekaert Integrated Annual Report 2022 5. Income statement items 5.1. Net sales The Group recognizes revenue from the following sources: delivery of products and, to a limited extent, of services and projects. Bekaert assessed that the delivery of products represents the main performance obligation. The Group recognizes revenue at a point in time when it transfers control over a product to a customer. Customers obtain control when the products are delivered (based on the related inco terms in place). The amount of revenue recognized is adjusted for variable compensation such as volume discounts. No adjustment is made for returns nor for warranty as the impact is deemed immaterial based on historical information. Disaggregating revenue by timing of revenue recognition, i.e. at a point in time vs over time (as is customary for engineering activities) does not add much value, as sales of machines to third parties contribute very little to total sales. in thousands of € 2021 % of total 2022 % of total Sales of products 4 836 089 99.9% 5 641 267 99.8% Sales of machines by engineering 3 449 0.1% 10 202 0.2% Other sales 122 0.0% 321 0.0% Net sales 4 839 659 100.0% 5 651 790 100.0% - 160 - Bekaert Integrated Annual Report 2022 In the following table, net sales is disaggregated by industry including a reconciliation of the net sales by industry with the Group’s operating segments (see note 4.1. ‘Key data by reporting segment’). This analysis is also often presented in press releases, shareholders’ guides and other presentations. 2021 in thousands of € Rubber Reinforcement Steel Wire Solutions Specialty Businesses BBRG Group Consolidated Industry Tire & Automotive 1 932 457 168 775 34 114 8 538 — 2 143 884 Energy & Utilities 236 233 581 23 343 82 404 — 339 563 Construction 11 568 665 349 639 68 914 — 987 229 Consumer Goods — 135 793 4 335 — — 140 128 Agriculture — 310 871 — 40 084 — 350 955 Equipment 111 002 96 451 3 601 144 506 10 339 365 898 Basic Materials 10 450 304 370 60 628 136 555 — 512 002 Total 2 054 155 1 818 504 475 661 481 000 10 339 4 839 659 2022 in thousands of € Rubber Reinforcement Steel Wire Solutions Specialty Businesses BBRG Group Consolidated Industry Tire & Automotive 2 195 338 135 542 39 170 9 817 — 2 379 867 Energy & Utilities 785 342 535 30 868 111 371 — 485 559 Construction — 640 971 457 656 76 398 — 1 175 025 Consumer Goods — 124 880 4 130 — — 129 010 Agriculture — 367 459 — 42 172 — 409 631 Equipment — 128 670 136 401 163 231 21 417 449 719 Basic Materials 1 482 341 537 98 247 181 713 — 622 979 Total 2 197 605 2 081 594 766 472 584 702 21 417 5 651 790 - 161 - Bekaert Integrated Annual Report 2022 5.2. Operating result (EBIT) by function Sales and gross profit in thousands of € 2021 2022 variance (%) Sales 4 839 659 5 651 790 16.8% Cost of sales -3 953 752 -4 879 310 23.4% Gross profit 885 907 772 479 -12.8% Gross profit in % of sales 18.3% 13.7% Bekaert achieved consolidated sales of € 5.7 billion in 2022, an increase of 16.8% compared to 2021, a result of responding quickly to the economic challenges and high cost inflation with product price rises. The organic sales increase (11.8%) was driven by increased wire rod prices (10.5%) and other price-mix effects for the full year (10.1%), partially offset by a decrease in volumes (-8.8%). The currency movements were 5% positive (mainly related to movements in US dollar and Chinese renminbi). Gross profit of the Group decreased by € 113.4 million in absolute terms (-12.8%), resulting in a margin of 13.7% (2021: 18.3%). This was due to the decline in volumes in combination with high inflation and higher costs for utilities and materials. The decrease has partially been compensated by increasing product prices to the customers. Overheads in thousands of € 2021 2022 variance (%) Selling expenses -186 239 -205 938 10.6% Administrative expenses¹ -165 204 -160 472 -2.9% Research and development expenses -59 537 -62 315 4.7% Total -410 980 -428 725 4.3% ¹ See note 2.8 'Restatement effects' The overhead expenses increased by € 17.7 million to € 428.7 million (7.6% on sales). The increase in absolute value was mainly due to negative FX impact of € -10.5 million (mainly related to negative exchange results in US dollar and Chinese renminbi), and higher expenses on IT projects, as a result of the digital transformation. The one-off impact from restructuring programs on overheads increased by € 5.3 million and mainly related to lay-off costs. In 2022, selling expenses included bad debt allowances recognized for € -6.0 million (2021: € -3.0 million) and reversal of bad debt allowances for amounts used and not used for € 8.0 million (2021: € 4.4 million). Other operating revenues in thousands of € 2021 2022 variance Royalties received 15 209 18 673 3 464 Gains on disposal of PP&E and intangible assets 8 458 12 340 3 883 Realized exchange results on sales and purchases 1 237 — -1 237 Tax rebates 429 26 -403 Government grants 1 039 2 631 1 592 Compensations received for claims 2 855 2 345 -510 Restructuring¹ 23 304 1 515 -21 789 Environmental 148 100 -48 Other revenues² 11 876 10 217 -1 659 Total 64 556 47 848 -16 709 ¹ Mainly relates to disposal of PP&E 2 See note 2.8. 'Restatement effects' Other operating expenses in thousands of € 2021 2022 variance Royalties paid -1 012 -951 62 Losses on disposal of PP&E and intangible assets -1 375 -760 615 Amortization of intangible assets -1 512 -1 500 12 Bank charges -2 776 -3 660 -884 Tax related expenses (other than income taxes) -2 639 -3 841 -1 202 Impairment losses -278 -857 -579 Restructuring -12 379 -5 932 6 447 Environmental -37 -1 225 -1 187 Losses on business disposals -170 -210 -40 Other expenses -6 716 -6 912 -196 Total -28 894 -25 848 3 046 - 162 - Bekaert Integrated Annual Report 2022 The royalty income increased with 23% due to higher sales. Government grants mainly related to subsidies in China. There are no indications that the conditions attached to those grants will not be complied with in the future and therefore it is not expected that subsidies may have to be refunded. The gain on the disposal of PP&E and intangible assets contained in 2022 the revenues from the sale of assets not included in restructuring programs, primarily in the UK. Due to a change in presentation the group no longer shows realized exchange results on sales and purchases as a separate line in the other operating revenues. The impact is now shown in cost of sales. In 2022 ‘Restructuring - revenues’ mainly consists of the gain from the sales of land and buildings following plant closures due to restructuring. 'Restructuring - expenses’ on the other hand includes part of the cost (lay-off costs) related to restructuring programs and plant closures. In 2021 ‘Restructuring - revenues’ mainly consists of the gain from the sales of land and buildings following plant closures due to restructuring. Additional impact coming from the reversals of write-downs on inventories and impairment losses on intangibles and PP&E. ‘Restructuring - expenses’ on the other hand includes part of the cost (lay-off costs and impairment) related to restructuring programs and plant closures. The impairment losses in 2022 are mainly for assets the United States as a result of the closure of plants. The environmental costs in 2022 are mainly to the building remediation project in Rome (US) and environmental provisions related to the closure of the Figline plant (Italy). The other section of other operating revenues included in 2022 and in 2021 CTA impact on business disposals. The following tables reconcile reported and underlying results and present an analysis of one-off items by category (as defined in note 2.6. ‘Alternative performance measures’), operating segment and income statement line item. EBIT Reported and Underlying 2021 2022 in thousands of € reported of which underlying of which one-offs reported of which underlying of which one-offs Sales 4 839 659 4 839 659 — 5 651 790 5 651 790 — Cost of sales -3 953 752 -3 936 874 -16 878 -4 879 310 -4 795 329 -83 981 Gross profit 885 907 902 785 -16 878 772 479 856 460 -83 981 Selling expenses -186 239 -186 017 -222 -205 938 -204 858 -1 080 Administrative expenses¹ -165 204 -166 574 1 370 -160 472 -157 414 -3 059 Research and development expenses -59 537 -59 440 -97 -62 315 -62 139 -176 Other operating revenues¹ 64 556 37 745 26 812 47 848 45 204 2 643 Other operating expenses -28 894 -16 377 -12 517 -25 848 -18 691 -7 157 Operating result (EBIT) 510 589 512 121 -1 531 365 754 458 563 -92 810 ¹ See note 2.8 'Restatement effects' - 163 - Bekaert Integrated Annual Report 2022 One-off items 2021 in thousands of € Cost of Sales Selling expenses Administrative expenses R&D Other operating revenues Other operating expenses Total Restructuring programs by segment Rubber Reinforcement 1 -1 749 356 -25 -171 — — -1 588 Steel Wire Solutions 2 -2 105 -185 -138 -771 11 035 -4 246 3 589 Specialty Businesses 3 476 -733 -49 5 276 -331 -356 Bridon-Bekaert Ropes Group (BBRG) 4 -10 344 34 36 — 11 493 -7 617 -6 399 Group 5 -391 476 1 639 868 547 -184 2 955 Intersegment — — — — -46 — -46 Total restructuring programs -14 114 -52 1 464 -69 23 304 -12 379 -1 845 Business disposals Group 6 — -170 — — — — -170 Total business disposals — -170 — — — — -170 Environmental provisions/(reversals of provisions) Bridon-Bekaert Ropes Group (BBRG) 4 -2 360 — — -28 — — -2 388 Group — — — — 148 -37 111 Total environmental provisions/(reversals) -2 360 — — -28 148 -37 -2 277 Other events and transactions Steel Wire Solutions — — -59 — — — -59 Specialty Businesses -405 — — — — — -405 Group 7 — — -35 — 3 359 -100 3 224 Total other events and transactions -405 — -93 — 3 359 -100 2 761 Total -16 878 -222 1 370 -97 26 812 -12 517 -1 531 ¹ Related mainly to the closure of the Figline plant (Italy) and retirement plans in Spain and Italy. ² Related mainly to the restructuring revenues and expenses in North America and revenues in Malaysia. ³ Related mainly to the restructuring in Combustion Technologies and Sawing Wire. ⁴ Related mainly to the restructuring in Canada. 5 Related mainly to the restructuring in Belgium. 6 Contractual liability indemnification related to previous divestments. 7 Related mainly to the liquidation of a company in China and Costa Rica. - 164 - Bekaert Integrated Annual Report 2022 One-off items 2022 in thousands of € Cost of Sales Selling expenses Administrative expenses R&D Other operating revenues Other operating expenses Total Restructuring programs by segment Rubber Reinforcement 1 -4 489 -208 -644 — — -2 413 -7 753 Steel Wire Solutions 2 -1 506 57 -246 — 199 -23 -1 519 Specialty Businesses 3 -267 — -165 -85 — -195 -712 Bridon-Bekaert Ropes Group (BBRG) 4 -22 421 -262 -80 -15 758 -127 -22 148 Group 5 -673 -458 -1 415 -77 558 -3 174 -5 239 Total restructuring programs -29 356 -870 -2 551 -176 1 515 -5 932 -37 371 Impairment losses/(reversals of impairment losses) other than restructuring Rubber Reinforcement 6 -59 035 — — — — — -59 035 Specialty Businesses 6 -324 — — — — — -324 Intersegment 6 4 735 — — — — — 4 735 Total other impairment losses/(reversals) -54 624 — — — — — -54 624 Business disposals Group 7 — -210 — — — — -210 Total business disposals — -210 — — — — -210 Environmental provisions/(reversals of provisions) Rubber Reinforcement 1 — — — — — -1 100 -1 100 Group — — — — 100 -125 -25 Total environmental provisions/(reversals) — — — — 100 -1 225 -1 125 Other events and transactions Specialty Businesses — — — — 256 — 256 Bridon-Bekaert Ropes Group (BBRG) 8 — — — — 474 — 474 Group — — -507 — 298 — -209 Total other events and transactions — — -508 — 1 028 — 521 Total -83 981 -1 080 -3 059 -176 2 643 -7 157 -92 810 ¹ Related mainly to the closure of the Figline plant (Italy) and the building remediation project in Rome, US; environmental provisions related to the closure of the Figline plant (Italy). ² Related mainly to lay-off costs in Latin America. ³ Related mainly to lay-off costs in Bekaert Combustion Technology BV (Netherlands). ⁴ Related mainly to the restructuring in Germany. 5 Related mainly to the restructuring in Belgium. 6 Related to the plant in Russia. 7 Contractual liability indemnification related to previous divestments. 8 Gain on step acquisition: VisionTek Egineering Srl (Italy). - 165 - Bekaert Integrated Annual Report 2022 5.3. Operating result (EBIT) by nature The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature. in thousands of € 2021 % on sales 2022 % on sales Sales 4 839 659 100% 5 651 790 100% Other operating revenues¹ 64 556 — 47 848 — Total operating revenues 4 904 215 — 5 699 637 — Own construction of PP&E 31 872 0.7% 47 175 0.8% Raw materials -1 995 508 -41.2% -2 362 439 -41.8% Semi-finished products and goods for resale -523 793 -10.8% -529 817 -9.4% Change in work-in-progress and finished goods 277 348 5.7% 20 192 0.4% Staff costs -840 348 -17.4% -869 955 -15.4% Depreciation and amortization -166 905 -3.4% -202 795 -3.6% Impairment losses 1 518 0.0% -57 934 -1.0% Transport and handling of finished goods -249 476 -5.2% -303 486 -5.4% Consumables and spare parts -273 318 -5.6% -314 986 -5.6% Utilities -264 128 -5.5% -348 113 -6.2% Maintenance and repairs -66 054 -1.4% -77 908 -1.4% Lease and related expenses -9 451 -0.2% -38 129 -0.7% Commissions in selling expenses -8 008 -0.2% -8 739 -0.2% Export VAT and export customs duty -12 760 -0.3% -16 350 -0.3% ICT costs¹ -44 148 -0.9% -59 960 -1.1% Advertising and sales promotion -6 444 -0.1% -7 655 -0.1% Travel, restaurant & hotel -8 605 -0.2% -15 810 -0.3% Consulting and other fees -40 314 -0.8% -42 284 -0.7% Office supplies and equipment -8 472 -0.2% -10 331 -0.2% Venture capital funds R&D -1 447 0.0% -1 297 0.0% Temporary or external labor -36 238 -0.7% -40 910 -0.7% Insurance expenses -15 427 -0.3% -17 689 -0.3% Miscellaneous -133 520 -2.8% -74 664 -1.3% Total operating expenses¹ -4 393 626 -90.8% -5 333 884 -94.4% Operating result (EBIT)¹ 510 589 10.6% 365 754 6.5% ¹ See note 2.8 'Restatement effects' Due the increased wire rod prices, the total raw material costs have increased in 2022 compared to the costs in 2021. The impairment losses of the current year mainly related to impairment of PP&E in Russia. The depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables. - 166 - Bekaert Integrated Annual Report 2022 5.4. Interest income and expense in thousands of € 2021 2022 Interest income on financial assets not measured at FVTPL 3 260 5 166 Interest income 3 260 5 166 Interest expense on interest-bearing debt not measured at FVTPL -39 159 -38 624 Other debt-related interest expense -3 496 -3 391 Debt-related interest expense -42 655 -42 014 Interest element of discounted provisions -1 825 -1 423 Interest expense -44 480 -43 437 Total -41 220 -38 271 The interest expenses remain at the same level compared to the interest expenses of 2021. As of 2022, there are no interest expenses related the convertible bonds due to repayment of the convertible bond in 2021. The impact of the increase of interest rates is for this reason compensated. Interest expense on interest-bearing debt, not classified as at fair value through profit or loss (FVTPL), relates to all debt instruments of the Group, other than interest-rate risk mitigating derivatives entered into as economic hedges. The interest element of discounted provisions related for € -1.4 million (2021: € -1.8 million) to defined-benefit liabilities (see note 6.16. ‘Employee benefit obligations’). There are no interest costs in 2022 related to other provisions (2021: nil) (see note 6.17. 'Provisions'). 5.5. Other financial income and expenses in thousands of € 2021 2022 Value adjustments to derivatives 4 987 6 543 Exchange results on hedged items 1 570 -14 008 Net impact of derivatives and hedged items 6 557 -7 464 Other exchange results -4 315 -735 Gains and losses on disposal of financial assets 19 19 Dividends from non-consolidated equity investments 5 088 2 666 Bank charges and taxes on financial transactions -4 074 -8 566 Impairments of other receivables -39 1 261 Other 1 194 1 494 Total 4 430 -11 325 Value adjustments include changes in the fair value of all derivatives, other than those designated as cash flow hedges. Exchange results on hedged items also relate to economic hedges only. The net impact of derivatives and hedged items presented here does not include any impacts recognized in other income statement elements, such as interest expense, cost of sales or other operating revenues and expenses. In 2022 value adjustments to derivatives included a fair value gain of € 13.1 million gain (€ -4.4 million in 2021), however offset with a loss of € -6.6 million (2021: gain of € 9.4 million), related to a Virtual Power Purchase Agreement (VPPA). For more details on the impact of derivatives and hedged items, see note 7.2. Financial risk management and financial derivatives’. Other exchange results in 2022 amounted to € -0.7 million and were mainly related to the devaluation of the Turkish lira, largely offset with the positive exchange results on the Ruble, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on financial transactions included charges linked to the factoring programs (€ 7.0 million) and higher taxes paid on financial transactions (€ 1.0 million). In 2022, other elements related mainly to a gain of € 2.7 million (€ 1.2 million in 2021) from the net settlements out of the VPPA. The gain is partially offset by other financial costs. All dividends from non-consolidated equity investments related to interests still held at reporting date as no shares were sold during the year. - 167 - Bekaert Integrated Annual Report 2022 5.6. Income taxes in thousands of € 2021 2022 Current income taxes - current year -115 674 -85 078 Current income taxes - prior periods -332 5 485 Deferred taxes - due to changes in temporary differences ¹ -39 571 -50 422 Deferred taxes - due to changes in tax rates -3 710 -1 039 Deferred taxes - adjustments to tax losses of prior periods -2 150 200 Deferred taxes - utilization of deferred tax assets not previously recognized ¹ 27 723 49 756 Total tax expense -133 714 -81 097 ¹ See note 2.8 'Restatement effects' Relationship between tax expense and accounting profit In the table below, accounting profit is defined as the result before taxes. in thousands of € 2021 2022 Result before taxes 6 473 799 316 157 Tax expense at the theoretical domestic rates applicable to results of taxable entities in the countries concerned 6 -117 150 -82 735 Theoretical tax rate 1 -24.7% -26.2% Tax effect of: Non-deductible items -12 893 -5 773 Other tax rates, tax credits and special tax regimes 2 13 979 11 109 Non-recognition of deferred tax assets 3 -16 803 -39 242 Utilization or recognition of deferred tax assets not previously recognized 4 6 27 723 49 756 Deferred tax due to change in tax rates -3 710 -1 039 Tax relating to prior periods 5 -2 482 5 685 Exempted income 3 224 291 Withholding taxes on dividends, royalties, interests & services 6 -21 371 -16 709 Other -4 231 -2 440 Total tax expense -133 714 -81 097 Effective tax rate -28.2% -25.7% ¹ The theoretical tax rate is computed as a weighted average taking into account the results before taxes in different countries at different rates. ² In 2022, the special tax regimes and tax credits mainly related to tax incentives in Belgium, similar as in 2021. ³ In 2022, the non-recognition of deferred tax assets mainly related to the impairment of Russian fixed assets, the German restructuring and losses carried forward in China and the USA, while in 2021, it mainly related to losses carried forward in Belgium, Canada, China, Spain and the USA. ⁴ In 2022, the movement was mainly triggered by the recognition in Belgium of deferred tax assets previously not recognized as well as by the usage of losses carried forward. 5 In 2022, the prior year tax adjustments mainly related to the release of the uncertain tax provision in Indonesia further to the conclusion of an APA between the competent Authorities of Belgium and Indonesia (cf section 7.5. fourth bullet point of the 2021 Annual Report), while in 2021 the prior year tax adjustments mainly related to tax filings. 6 See note 2.8 'Restatement effects' - 168 - Bekaert Integrated Annual Report 2022 5.7. Share in the results of joint ventures and associates In 2022, the share in the result of joint ventures and associates reflected the drop in performance of both Steel Wire Solutions and Rubber Reinforcement businesses in Brazil compared to the very strong performance of both in 2021. Moreover, Belgo Bekaert Arames Ltda was able in 2021 to recover BRL 670 million of indirect tax credits (PIS/COFINS) from the past, resulting in a one-time net impact of BRL 485 million (€ 34.2 million equivalent for the Bekaert share). The decrease in performance was slightly compensated by the increase in value of the Brazilian real against the euro (average rate increased by 14.7% from 2021 to 2022). This increase in YTD average rate 2022 versus 2021 was mainly caused by a significant increase in the course of 2022, while in 2021, the rate remained more or less stable. Additional information relating to the Brazilian joint ventures is provided under note 6.5. ‘Investments in joint ventures and associates’. in thousands of € 2021 2022 Joint ventures Agro-Bekaert Colombia SAS Colombia -390 -1 135 Agro - Bekaert Springs, SL Spain -6 -7 Belgo Bekaert Arames Ltda Brazil 99 349 55 568 BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda Brazil 8 701 -217 Servicios Ideal AGF Inttegra Cía Ltda Ecuador -34 48 Total 107 619 54 257 - 169 - Bekaert Integrated Annual Report 2022 5.8. Earnings per share 2021 Number Weighted average number of ordinary shares (basic) 57 000 709 Dilution effect of share-based payment arrangements 620 115 Weighted average number of ordinary shares (diluted) 57 620 824 in thousands of € Basic Diluted Result for the period attributable to ordinary shareholders ¹ 404 062 404 062 Earnings 404 062 404 062 Earnings per share (in €) 7.089 7.012 ¹ See note 2.8 'Restatement effects' 2022 Number Weighted average number of ordinary shares (basic) 56 194 711 Dilution effect of share-based payment arrangements 468 231 Weighted average number of ordinary shares (diluted) 56 662 942 in thousands of € Basic Diluted Result for the period attributable to ordinary shareholders 268 859 268 859 Earnings 268 859 268 859 Earnings per share (in €) 4.784 4.745 Earnings per share (‘EPS’) is the amount of post-tax profit attributable to each share. Basic EPS is calculated as the result for the period attributable to equity holders of Bekaert divided by the weighted average number of shares outstanding during the year. Diluted EPS reflects any commitments of the Group to issue shares in the future. These comprise shares to be issued for equity-settled share-based payment plans (subscription rights, options, performance shares and matching shares, see note 6.13. ‘Ordinary shares, treasury shares and equity-settled share-based payments’). Subscription rights, options and other share-based payment arrangements are only dilutive to the extent that their issue price is lower than the average closing price of the period, in which the issue price includes the fair value of any services to be rendered during the remainder of the vesting period. Contingently issuable shares (e.g. performance shares) are only dilutive if the conditions are satisfied at the balance sheet date. The dilution effect of share-based payment arrangements is limited to the weighted average number of shares to be used in the denominator of the EPS ratio; there is no effect on the earnings to be used in the numerator of the EPS ratio. To calculate the dilution impact, it is assumed that all dilutive potential shares are issued at the beginning of the period, or, if the instruments were granted during the period, at the grant date. This resulted in a total dilution effect of € -0.04 per share (2021: € -0.08). The average closing price during 2022 was € 34.02 per share (2021: € 36.33 per share). The following table presents all anti-dilutive instruments for the period presented. Options and subscription rights were out of the money because their issue price exceeded the average closing price, while performance shares were anti-dilutive because the performance condition was not fulfilled. Anti-dilutive instruments Date granted Issue price (in €) Number granted Number outstanding SOP 2015-2017 - options 13.02.2017 39.43 273 325 226 056 SOP 2015-2017 - options 19.01.2018 34.6 225 475 144 600 - 170 - Bekaert Integrated Annual Report 2022 6. Balance sheet items 6.1. Intangible assets Cost Licenses, patents & similar rights Computer software² Commercial assets Other Total in thousands of € As at 1 January 2021 26 340 91 472 54 290 15 566 187 667 Expenditure 17 7 093 1 627 2 8 739 Disposals and retirements -100 -7 143 -1 169 -1 649 -10 062 Transfers ¹ 844 93 — — 937 Exchange gains and losses (-) 205 1 760 3 968 834 6 768 As at 31 December 2021 27 306 93 275 58 717 14 752 194 049 As at 1 January 2022 27 306 93 275 58 717 14 752 194 049 Expenditure 2 14 933 — 3 14 937 Disposals and retirements — -34 — — -34 Transfers ¹ — -691 — 734 43 New consolidations 36 — — 1 760 1 796 Exchange gains and losses (-) -180 799 -2 118 -869 -2 368 As at 31 December 2022 27 163 108 282 56 599 16 380 208 423 ¹ Total transfers equal zero when aggregating the balances of ‘Intangible assets’ and ‘Property, plant and equipment’ (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment'). 2 See note 2.8 'Restatement effects'. - 171 - Bekaert Integrated Annual Report 2022 Accumulated amortization and impairment Licenses, patents & similar rights Computer software Commercial assets Other Total in thousands of € As at 1 January 2021 17 510 79 111 21 194 15 188 133 003 Charge for the year 1 920 3 573 3 872 30 9 395 Disposals and retirements -100 -7 143 -1 169 -1 649 -10 062 Exchange gains (-) and losses 11 1 575 1 616 1 184 4 386 As at 31 December 2021 19 341 77 116 25 514 14 752 136 723 As at 1 January 2022 19 341 77 116 25 514 14 752 136 723 Charge for the year 1 989 3 722 4 162 409 10 282 Impairment losses — 214 — — 214 Disposals and retirements — -50 — — -50 Transfers ¹ — -32 — — -32 Exchange gains (-) and losses -26 711 -796 -752 -863 As at 31 December 2022 21 303 81 681 28 880 14 409 146 274 Carry amount as at 31 December 2021 7 965 16 160 33 202 — 57 327 Carry amount as at 31 December 2022 5 860 26 601 27 718 1 971 62 149 ¹ Total transfers equal zero when aggregating the balances of ‘Intangible assets’ and ‘Property, plant and equipment’ (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment'). The software expenditure related to the extensive implementation of the digital roadmap in various domains (commercial, supply chain, manufacturing, procurement, finance, HR, ...) and included € 2.2 million internally developed software while the remainder was externally purchased. The newly acquired intangible assets related to investments in private cloud arrangements for accounting, consolidation and intelligent processes and costs linked to the development of websites used (in)directly in the income generating process. No intangible assets have been identified as having an indefinite useful life at the balance sheet date. - 172 - Bekaert Integrated Annual Report 2022 6.2. Goodwill This note mainly relates to goodwill on acquisition of subsidiaries. Goodwill in respect of joint ventures and associates is disclosed in note 6.5. ‘Investments in joint ventures and associates’. Cost in thousands of € 2021 2022 As at 1 January 154 280 155 970 New consolidations — 1 376 Exchange gains and losses (-) 1 689 556 As at 31 December 155 970 157 901 Impairment losses in thousands of € 2021 2022 As at 1 January 4 883 5 295 Exchange gains (-) and losses 413 39 As at 31 December 5 295 5 334 Carrying amount as at 31 December 150 674 152 567 - 173 - Bekaert Integrated Annual Report 2022 Goodwill by cash-generating unit (CGU) Goodwill acquired in a business combination is allocated on acquisition to the cash-generating units (CGU) that are expected to benefit from that business combination. The carrying amount of goodwill allocated and any related movements of the period are as follows: 2021 in thousands of € Group of cash-generating units Carrying amount 1 January Increases Exchange differences Carrying amount 31 December Subsidiaries SWS Bekaert Bradford UK Ltd 2 490 — 174 2 664 SB Combustion - heating EMEA 3 027 — — 3 027 SB Building Products 71 — — 71 RR Rubber Reinforcement 4 255 — — 4 255 SWS Orrville plant (USA) 9 560 — 798 10 357 SWS Inchalam group 727 — -70 657 SWS Bekaert Ideal SL companies 844 547 46 1 437 SWS Bekaert (Qingdao) Wire Products Co Ltd 385 — — 385 SWS Bekaert Jiangyin Wire Products Co Ltd 47 — — 47 SWS Grating Peru SAC 547 -547 — — BBRG BBRG 127 445 — 329 127 774 Subtotal 149 398 — 1 276 150 674 Joint ventures and associates SWS Belgo Bekaert Arames Ltda 2 358 — 24 2 382 RR BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda 1 442 — 14 1 456 Subtotal 3 800 — 38 3 838 Total 153 198 — 1 314 154 513 - 174 - Bekaert Integrated Annual Report 2022 2022 in thousands of € Group of cash-generating units Carrying amount 1 January Increases Exchange differences Carrying amount 31 December Subsidiaries SWS Bekaert Bradford UK Ltd 2 664 — -140 2 523 SB Combustion - heating EMEA 3 027 — — 3 027 SB Building Products 71 — — 71 RR Rubber Reinforcement 4 255 — — 4 255 SWS Orrville plant (USA) 10 357 — 641 10 998 SWS Inchalam group 657 — 42 699 SWS Bekaert Ideal SL companies 1 437 490 67 1 994 SWS Bekaert (Qingdao) Wire Products Co Ltd 385 — — 385 SWS Bekaert Jiangyin Wire Products Co Ltd 47 — — 47 BBRG BBRG 127 774 886 -93 128 567 Subtotal 150 674 1 376 517 152 567 Joint ventures and associates SWS Belgo Bekaert Arames Ltda 2 382 — 284 2 666 RR BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda 1 456 — 173 1 630 Subtotal 3 838 — 457 4 295 Total 154 513 1 376 974 156 862 Following the merger of Grating Peru SAC into Productos de Acero Cassadó S.A. in 2021, the initial goodwill allocated to Grating Peru SAC was reclassified under the Bekaert Ideal SL companies. The increases in goodwill related to the step-acquisition of VisionTek Engineering Srl and the acquisition of Sujetar, which is in the meantime merged into Productos de Acero Cassado SA. The discount factor for all impairment tests is based on a (long-term) post-tax cost of capital, the risks being implicit in the cash flows. A weighted average cost of capital (WACC) is determined for euro, US dollar and Chinese renminbi regions. For countries or businesses with a higher perceived risk, the WACC is raised with a country or business specific risk factor. The WACC is post-tax based, since relevant cash flows are also post-tax based. In determining the weight of the cost of debt vs the cost of equity, a target gearing (net debt relative to equity) of 50% is used. For cash flow models stated in real terms (without inflation), the nominal WACC is adjusted for the expected inflation rate. For cash flow models in nominal terms, the nominal WACC is used. All parameters used for the calculation of the discount factors are reviewed at least annually. - 175 - Bekaert Integrated Annual Report 2022 In relation to the impairment testing of goodwill arising from the BBRG business combination, the following model characteristics have been used: •a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption based on a nominal perpetual growth rate of 2% (in 2021: 2%), which mainly is based on a conservative industrial GDP evolution assumption; •the cash flows reflect the evolution taking into account agreed action plans and are based on the assets in their current condition, without including the impacts of future restructuring not yet committed; •only capital expenditure required to maintain the assets in good working order are included; future capital expenditures improving or enhancing the assets in excess of their originally assessed standard of performance are not considered; •no cost structure improvements are taken into account unless they can be substantiated; and •the cash outflows relating to working capital are calculated as a percentage of incremental sales based on the past performance of BBRG. The headroom for impairment, i.e., the excess of the recoverable amount over the carrying amount of the BBRG CGU is estimated at € 200.1 million (2021: € 375.0 million). The decrease is the combined result of the updated business plan (€ -107.2 million) and by an increase of the capital employed of the business (€ +67.7 million). The following scenario’s illustrate the sensitivity of this headroom to changes in the key assumptions of the business plan: •If the sales level would be 10% lower in all periods of the business plan, then headroom would be € 98.5 million lower (remaining € 101.6 million); •If the percentage Underlying EBITDA on sales would be 1% short from the forecasted level in all periods of the business plan, then headroom would be € 67.4 million lower (remaining € 132.7 million); •If the Underlying EBITDA would be € 5.0 million short from the forecasted level in all periods of the business plan, then headroom would be € 52.8 million lower (remaining € 147.3 million); •If the discount factor would be 1% higher, then headroom would be € 83.0 million lower (remaining € 117.1 million); •The combined effect of a lower sales level by 10% and a lower Underlying EBITDA margin by 1%, in all periods of the business plan would result in a drop of € 159.2 million in headroom (remaining € 40.9 million); •The combined effect of a lower sales level by 10%, a lower Underlying EBITDA margin by 1% in all periods of the business plan and a higher discount factor with 1% would result in an impairment loss of € 24.6 million. - 176 - Bekaert Integrated Annual Report 2022 Based on current knowledge, reasonable changes in key assumptions (including discount rate, sales and margin evolution) would not generate impairments for any of the cash-generating units for which goodwill has been allocated. Discount rates for impairment testing 2021 EUR region USD region CNY region Group target ratios Gearing: net debt / equity 50% % debt 33.3% % equity 66.7% % LT debt 75% % ST debt 25% Cost of Bekaert debt 1.8% 4.7% 4.8% Long term interest rate 2.1% 5.2% 4.9% Short term interest rate 0.7% 3.1% 4.4% Cost of Bekaert equity (post tax) = Rf + b * Em + S 9.3% 10.8% 14.1% Risk free rate = Rf 0.1% 1.6% 4.9% Beta = b 1.3 Market equity risk premium = Em 6.0% Size premium = S 1.4% Corporate tax rate 27% Cost of Bekaert equity 12.8% 14.8% 19.3% Bekaert WACC - nominal 9.1% 11.4% 14.5% Expected inflation 2.1% 2.3% 3.0% Bekaert WACC in real terms pre-tax 7.0% 9.1% 11.5% Bekaert WACC in real terms (indicative post-tax) 4.6% 6.0% 7.6% - 177 - Bekaert Integrated Annual Report 2022 Discount rates for impairment testing 2022 EUR region USD region CNY region Group target ratios Gearing: net debt / equity 50% % debt 33.3% % equity 66.7% % LT debt 75% % ST debt 25% Cost of Bekaert debt 1.2% 3.6% 4.8% Long term interest rate 1.5% 3.9% 4.9% Short term interest rate 0.3% 2.5% 4.4% Cost of Bekaert equity (post tax) = Rf + b * Em + S 12.3% 13.4% 14.5% Risk free rate = Rf 2.7% 3.8% 4.9% Beta = b 1.3 Market equity risk premium = Em 6.3% Size premium = S 1.4% Corporate tax rate 27% Cost of Bekaert equity 16.8% 18.4% 19.9% Bekaert WACC - nominal 8.5% 9.8% 10.8% Expected inflation 2.0% 2.1% 2.3% Bekaert WACC in real terms 6.5% 7.7% 8.5% - 178 - Bekaert Integrated Annual Report 2022 6.3. Property, plant and equipment Cost Land and buildings Plant, machinery and equipment Furniture and vehicles Other PP&E Assets under construction Total in thousands of € As at 1 January 2021 1 153 100 2 775 614 108 112 16 298 84 023 4 137 147 Expenditure 22 434 60 371 6 768 370 63 107 153 050 Disposals and retirements -21 252 -52 833 -3 724 -417 -57 -78 283 Merger / Split 5 537 2 223 49 — — 7 809 Transfers ¹ — — 105 — -937 -832 Reclassification to (-) / from held for sale ² -1 551 -278 — -451 — -2 280 Exchange gains and losses (-) 61 060 167 912 4 626 167 4 955 238 720 As at 31 December 2021 1 219 328 2 953 008 115 937 15 968 151 091 4 455 332 As at 1 January 2022 1 219 328 2 953 008 115 937 15 968 151 091 4 455 332 Expenditure 39 662 97 378 4 517 1 779 26 524 169 860 Disposals and retirements -4 028 -18 481 -4 393 -508 -1 -27 410 New consolidations 440 210 18 3 81 752 Transfers ¹ 4 655 77 21 — -43 4 711 Reclassification to (-) / from held for sale ² — 278 — 451 274 1 003 Exchange gains and losses (-) 10 781 8 833 407 -82 6 184 26 124 As at 31 December 2022 1 270 838 3 041 305 116 506 17 611 184 110 4 630 371 ¹ Total transfers equal zero when aggregating the balances of ‘Intangible assets’ (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and ‘Property, plant and equipment’. ² In 2021, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site; in 2022 this again relates to the plant, machinery and equipment of the Ingelmunster (Belgium) site and property received as payment by customers in Ecuador (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets'). - 179 - Bekaert Integrated Annual Report 2022 Accumulated depreciation and impairment Land and buildings Plant, machinery and equipment Furniture and vehicles Other PP&E Assets under construction Total in thousands of € As at 1 January 2021 634 755 2 207 291 92 087 5 246 — 2 939 379 Charge for the year 41 600 101 370 7 704 755 — 151 429 Impairment losses — 1 077 158 9 — 1 244 Reversal impairment losses and depreciations — -2 760 -2 — — -2 762 Disposals and retirements -19 345 -49 080 -3 591 -208 — -72 225 Transfers ¹ — — 78 — — 78 Reclassification to (-) / from held for sale ² -744 -148 — -89 — -981 Exchange gains (-) and losses 37 566 137 913 4 046 85 — 179 611 As at 31 December 2021 693 833 2 395 662 100 479 5 798 — 3 195 772 As at 1 January 2022 693 833 2 395 662 100 479 5 798 — 3 195 772 Charge for the year 44 719 102 714 7 067 789 — 155 289 Impairment losses 9 541 48 346 119 — — 58 006 Reversal impairment losses and depreciations — -231 — — — -231 Disposals and retirements -3 240 -18 005 -4 267 -115 — -25 627 Transfers ¹ — 63 21 — — 84 Reclassification to (-) / from held for sale ² — 148 — 89 — 237 Exchange gains (-) and losses 3 218 336 263 -30 — 3 786 As at 31 December 2022 748 070 2 529 033 103 682 6 531 — 3 387 317 ¹ Total transfers equal zero when aggregating the balances of ‘Intangible assets’ (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and ‘Property, plant and equipment’. ² In 2021 and 2022, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets'). Cost in thousands of € Land and buildings Plant, machinery and equipment Furniture and vehicles Other PP&E Assets under construction Total Carrying amount as at 31 December 2021 before investment grants 525 495 557 346 15 457 10 169 151 091 1 259 559 Net investment grants -4 780 -922 — — — -5 702 Carry amount as at 31 December 2021 520 716 556 424 15 457 10 169 151 091 1 253 857 Carrying amount as at 31 December 2022 before investment grants 522 768 512 273 12 824 11 078 184 110 1 243 054 Net investment grants -4 218 -794 — — — -5 012 Carry amount as at 31 December 2022 518 551 511 479 12 824 11 078 184 110 1 238 041 - 180 - Bekaert Integrated Annual Report 2022 Capital expenditure included capacity expansions and equipment upgrades across the group, but particularly in Rubber Reinforcement (in its plants in EMEA and China, as well as the start-up of its green field in Vietnam). Capital expenditure in the Steel Wire Solutions business was mainly in Central Europe, Latin America, USA and China. In the Specialty Businesses segment, expansion capital expenditure was in Central Europe (Building Products) and in China (Fiber Technologies), while improvement capital expenditure was in the European plants of Combustion Technologies and Hose & Conveyor Belt Solutions. Finally, capital expenditure in BBRG was mainly in its UK- and USA -based Ropes entities and in Advanced Cords plants. The ending balance of Assets under Construction per year-end 2022 related to a few big expansion projects (such as the plant in Vietnam, the expansions in USA, the Steel Wire Solutions plants in Central and Eastern Europe and the expansion in Advanced Cords) but predominantly to a lot of smaller capital expenditure projects in all of the Bekaert entities which were still in the finalization phase. In 2022, impairment losses have been recorded in Rubber Reinforcement (Russia), BBRG (Germany) and Specialty Businesses (Building Products Russia). Following the situation in Russia, management has performed an impairment analysis using updated business plans and a discount factor adjusted for the increased country and activity risk. Based on the outcome of this analysis an impairment of € 54 million has been recorded on Property, Plant and Equipment. No items of PP&E were pledged as securities. - 182 - Bekaert Integrated Annual Report 2022 6.4. Right-of-use (RoU) property, plant and equipment This note provides information for leases where the group is a lessee. In principal, the Group does not act as a lessor. The balance sheet showed the following roll-forward during the year relating to right-of-use assets: Cost RoU land RoU buildings RoU plant, machinery and equipment RoU industrial vehicles RoU company cars RoU office equipment RoU other PP&E Total in thousands of € As at 1 January 2021 71 376 73 686 3 206 17 494 22 624 1 730 589 190 704 New leases / extensions — 6 123 782 7 116 4 184 398 144 18 748 Ending contracts / reductions in contract term -985 -2 966 -104 -3 017 -4 229 — -241 -11 542 Transfers ¹ — — — — -105 — — -105 Exchange gains and losses (-) 7 554 2 817 59 416 324 121 32 11 323 As at 31 December 2021 77 945 79 661 3 943 22 009 22 798 2 249 523 209 129 As at 1 January 2022 77 945 79 661 3 943 22 009 22 798 2 249 523 209 129 New leases / extensions 6 16 532 465 8 481 6 845 725 686 33 740 Ending contracts / reductions in contract term -21 -16 644 -394 -4 513 -6 007 -201 -178 -27 957 Transfers ¹ — -4 655 -77 — -21 — — -4 753 Exchange gains and losses (-) -34 -1 211 117 454 80 38 -36 -592 As at 31 December 2022 77 896 73 684 4 053 26 431 23 696 2 811 995 209 566 - 183 - Bekaert Integrated Annual Report 2022 Accumulated depreciation and impairment RoU land RoU buildings RoU plant, machinery and equipment RoU industrial vehicles RoU company cars RoU office equipment RoU other PP&E Total in thousands of € As at 1 January 2021 17 201 22 219 1 055 7 026 9 852 590 155 58 097 Charge for the year 1 381 10 211 979 5 169 5 950 433 88 24 210 Ending contracts -273 -2 418 -75 -2 520 -3 291 — -15 -8 592 Transfers ¹ — — — — -78 — — -78 Exchange gains (-) and losses 1 968 1 066 12 162 152 49 10 3 418 As at 31 December 2021 20 277 31 077 1 971 9 836 12 585 1 072 238 77 056 As at 1 January 2022 20 277 31 077 1 971 9 836 12 585 1 072 238 77 056 Charge for the year 1 494 11 033 1 031 6 627 5 984 554 126 26 849 Impairment losses — — — — 112 — — 112 Reversal impairment losses and depreciations — -161 — — — — — -161 Ending contracts -14 -14 264 -394 -4 252 -5 431 -201 -132 -24 688 Transfers ¹ — — -31 — -21 — — -53 Exchange gains (-) and losses -273 -311 52 180 42 16 -6 -300 As at 31 December 2022 21 484 27 374 2 628 12 392 13 270 1 440 227 78 816 ¹ Total transfers equal zero when aggregating the balances of ‘Intangible assets’ (see note 6.1. 'Intangible assets') and ‘Property, plant and equipment’ (see note 6.3. 'Property, plant and equipment') and 'Right-of-use property, plant and equipment'. in thousands of € RoU land RoU buildings RoU plant, machinery and equipment RoU industrial vehicles RoU company cars RoU office equipment RoU other PP&E Total Carrying amount as at 31 December 2021 57 668 48 584 1 972 12 172 10 214 1 178 285 132 073 Carrying amount as at 31 December 2022 56 412 46 309 1 425 14 039 10 425 1 371 768 130 750 The Group leases various plants, offices, warehouses, equipment, industrial vehicles, company cars, servers and small office equipment like printers and computers. Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of company cars and industrial vehicles for which the Group is a lessee, it has elected not to separate lease and non-lease components and instead account for these as a single lease component. The main non-lease components included in the lease component relate to costs for maintenance and for replacement of tires. The Group applied the practical expedient for low value assets to leases of printers and small office equipment. The Group also applied the practical expedient for short term leases (defined as leases with a lease term of 12 months or less). There were no contracts with dismantling costs, residual value guarantees or initial direct costs, nor contracts with variable lease expenses other then those linked to an index or rate. - 184 - Bekaert Integrated Annual Report 2022 Additions to RoU buildings included new contracts for factories, warehouses and offices, mainly in the United Kingdom, India and China. Some contracts were ended, mainly in Norway, China and the United KIngdom. The average lease term for the RoU assets (excluding the RoU land) was 9.3 years (2021: 9.9 years). RoU buildings had an average lease term of 13 years (2021: 13 years) and the other categories of PP&E (excluding land) had an average lease term between 4 and 6 years. RoU land relates to land use rights that were paid in advance and had an average useful live of 54 years. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used to discount the future lease payments. The incremental borrowing rate is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The incremental borrowing rate is determined by Group Treasury, taking into account the market rate per currency for different relevant time buckets and the credit margin for each individual company based on its credit rating. The incremental borrowing rate is calculated as the total of both elements. The weighted average discount rate at the end of 2021 was 4.39% (2021: 4.01%). The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. For further information on the lease liability, we refer to note 6.18. ‘Interest-bearing debt’. The Group is exposed to potential future increases in variable lease payments, based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Right-of-use assets were generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. - 185 - Bekaert Integrated Annual Report 2022 The income statement showed the following amounts relating to leases: 2021 in thousands of € RoU land RoU buildings RoU plant, machinery and equipment RoU industrial vehicles RoU company cars RoU office equipment RoU other PP&E Total Depreciation charge of right-of-use assets -1 381 -10 211 -979 -5 169 -5 950 -433 -88 -24 210 Interest expense (included in finance cost) -3 152 Expense relating to short-term leases -837 Expense relating to low-value leases -727 Total -28 926 2022 in thousands of € RoU land RoU buildings RoU plant, machinery and equipment RoU industrial vehicles RoU company cars RoU office equipment RoU other PP&E Total Depreciation charge of right-of-use assets -1 494 -11 033 -1 031 -6 627 -5 984 -554 -126 -26 849 Interest expense (included in finance cost) -3 269 Expense relating to short-term leases -1 054 Expense relating to low-value leases -1 021 Total -32 193 The remaining operating lease expenses in the operating result mainly related to costs linked to leased assets such as fuel for company cars, non-deductible VAT on company car contracts and property taxes on buildings. The total cash outflow for leases in 2022 was € 33.6 million (2021: € 27.9 million). - 186 - Bekaert Integrated Annual Report 2022 6.5. Investments in joint ventures and associates In 2022 and 2021, the Group had no investments in entities qualified as associates. Investments excluding related goodwill Carrying amount in thousands of € 2021 2022 As at 1 January 120 181 184 823 Capital increases and decreases — -144 Result for the year 107 619 54 257 Dividends -44 872 -39 558 Exchange gains and losses 1 891 18 186 Other comprehensive income 3 27 As at 31 December 184 823 217 590 For an analysis of the result for the year, please refer to note 5.7. ‘Share in the results of joint ventures and associates’. Exchange gains and losses related mainly to the evolution of the Brazilian real versus the euro. In 2022, the Brazilian real increased significantly in value against the euro (5.6 BRL/EUR end 2022) while it remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020). In 2022, capital decreases related to Servicios Ideal AGF Inttegra Cía Ltda in Ecuador, and to a lesser extent to Agro - Bekaert Springs, SL and Agro-Bekaert Colombia SAS in Spain and Colombia. Related goodwill Cost in thousands of € 2021 2022 As at 1 January 3 800 3 838 Exchange gains and losses 38 457 As at 31 December 3 838 4 295 Carrying amount of related goodwill as at 31 December 3 838 4 295 Total carrying amount of investments in joint ventures as at 31 December 188 661 221 886 See Note 6.2 ‘Goodwill’ for details per entity. The Group’s share in the equity of joint ventures is analyzed as follows: in thousands of € 2021 2022 Joint ventures Agro-Bekaert Colombia SAS Colombia 56 -284 Agro - Bekaert Springs, SL Spain 13 -744 Belgo Bekaert Arames Ltda Brazil 136 092 165 312 BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda Brazil 48 521 53 250 Servicios Ideal AGF Inttegra Cía Ltda Ecuador 140 56 Total for joint ventures excluding related goodwill 184 822 217 590 Carrying amount of related goodwill 3 838 4 295 Total for joint ventures including related goodwill 188 661 221 886 - 187 - Bekaert Integrated Annual Report 2022 In accordance with IFRS 12 ‘Disclosures of Interests in Other Entities’, following information is provided on material joint ventures. The two Brazilian joint ventures have been aggregated in order to emphasize the predominance of the partnership with ArcelorMittal when analyzing the relative importance of the joint ventures. Proportion of ownership interest (and voting rights) held by the Group at year-end Name of joint venture in thousands of € Country 2021 2022 Belgo Bekaert Arames Ltda Brazil 45.0% (50.0%) 45.0% (50.0%) BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda Brazil 44.5% (50.0%) 44.5% (50.0%) Belgo Bekaert Arames Ltda manufactures and sells a wide variety of steel wire products for various sectors, and BMB manufactures and sells mainly steel cord and beat wire for rubber reinforcement in tires. Brazilian joint ventures: income statement in thousands of € 2021 2022 Sales 1 041 142 1 240 955 Operating result (EBIT) 282 531 173 274 Interest income 53 043 13 135 Interest expense -17 775 -13 762 Other financial income and expenses -2 051 -4 089 Income taxes -62 360 -31 991 Result for the period 253 389 136 567 Other comprehensive income for the period 12 57 Total comprehensive income for the period 253 400 136 624 Depreciation and amortization 15 803 19 547 EBITDA 298 334 192 821 Dividends received from the entities 44 872 39 558 Brazilian joint ventures: balance sheet in thousands of € 2021 2022 Current assets 406 456 420 218 Non-current assets 239 857 316 079 Current liabilities -184 396 -158 025 Non-current liabilities -53 086 -94 806 Net assets 408 831 483 466 Brazilian joint ventures: net debt elements in thousands of € 2021 2022 Non-current interest-bearing debt 5 963 51 371 Current interest-bearing debt 18 454 19 680 Total financial debt 24 417 71 051 Non-current financial receivables and cash guarantees -16 466 -62 532 Cash and cash equivalents -31 940 -22 154 Net debt -23 990 -13 635 The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling € 5.3 million (2021: € 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of € 22.0 million (2021: € 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%). Unrecognized commitments to acquire property, plant and equipment amounted to € 8.6 million (2021: € 16.2 million), including € 4.2 million (2021: € 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of € 13.6 million (2021: € 24.9 million). There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures. - 188 - Bekaert Integrated Annual Report 2022 Brazilian joint ventures: reconciliation with carrying amount in thousands of € 2021 2022 Net assets of Belgo Bekaert Arames Ltda 301 977 366 385 Proportion of the Group's ownership interest 45.0% 45.0% Proportionate net assets 135 890 164 873 Consolidation adjustments 202 438 Carrying amount of the Group's interest in Belgo Bekaert Arames Ltda 136 092 165 312 Net assets of BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda 106 854 117 081 Proportion of the Group's ownership interest 44.5% 44.5% Proportionate net assets 47 549.981 52 101 Consolidation adjustments 971 1 149 Carrying amount of the Group's interest in BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda 48 521 53 250 Carrying amount of the Group's interest in the Brazilian joint ventures 184 613 218 562 The following table reflects aggregate information for the other joint ventures which were not deemed material in this context. Aggregate information of the other joint ventures in thousands of € 2021 2022 The Group's share in the result from continuing operations -430 -1 095 The Group's share of other comprehensive income -2 1 The Group's share of total comprehensive income -432 -1 093 Aggregate carrying amount of the Group's interests in these joint ventures 210 -972 - 189 - Bekaert Integrated Annual Report 2022 6.6. Other non-current assets in thousands of € 2021 2022 Non-current financial receivables and cash guarantees 10 192 9 665 Reimbursement rights and other non-current amounts receivable 2 522 2 705 Derivatives (cf. note 7.2.) 13 244 14 678 Overfunded employee benefit plans - non-current 19 847 12 243 Equity investments at FVTOCI 20 081 26 023 Total other non-current assets 65 886 65 314 The overfunded employee benefit plans related to the UK and Belgian pension plans (see note 6.16. ‘Employee benefit obligations’). Equity investments at FVTOCI Carrying amount in thousands of € 2021 2022 As at 1 January 13 372 20 081 Expenditure 863 8 613 Disposals — -76 Fair value changes 5 847 -2 595 As at 31 December 20 081 26 023 The equity investments designated as at fair value through OCI (FVTOCI) in accordance with IFRS 9 ‘Financial Instruments’ mainly consisted of: •Shougang Concord Century Holdings Ltd, a Hong Kong Stock Exchange listed company (€ 6.6 million). On this investment, an decrease in fair value of € 3.2 million was recognized through OCI (2021: increase of € 3.9 million). •Bekaert Xinyu Metal Products Co Ltd (€ 6.5 million). On this investment, an decrease in fair value of € 1.5 million was recognized through OCI (2021: an increase of € 2.0 million). •Transportes Puelche Ltda (€ 0.5 million), an investment held by Acma SA and Prodalam SA (Chile). •Pajarito Powder LLC (€ 3.9 million), a new investment held by Bekaert Corporation (US). The Group decided to value its equity investments at fair value through OCI as these are strategic investments, not held for trading. For more information on the revaluation reserve for investments designated as at fair value through equity, see note 6.14. ‘Retained earnings and other Group reserves’. - 190 - Bekaert Integrated Annual Report 2022 6.7. Deferred tax assets and liabilities Carrying amount Assets Liabilities in thousands of € 2021 2022 2021 2022 As at 1 January 124 243 119 244 38 337 52 059 Increase or decrease via income statement ¹ -3 088 -618 14 620 886 Increase or decrease via OCI -2 191 1 175 1 308 6 049 New consolidations — 66 1 184 478 Exchange gains and losses ¹ 6 858 1 384 3 187 1 425 Change in set-off of assets and liabilities ¹ -6 577 -16 880 -6 577 -16 880 As at 31 December 119 244 104 372 52 059 44 018 ¹ See note 2.8 'Restatement effects' Recognized deferred tax assets and liabilities Deferred tax assets and liabilities were attributable to the following items: Assets Liabilities Net assets in thousands of € 2021 2022 2021 2022 2021 2022 Intangible assets 17 390 27 602 12 390 12 242 5 000 15 361 Property, plant and equipment 46 338 41 134 55 828 55 369 -9 490 -14 234 Financial assets ¹ 90 102 32 029 31 778 -31 940 -31 676 Inventories 10 581 11 925 8 168 14 756 2 413 -2 831 Receivables 4 156 4 282 128 719 4 027 3 563 Other current assets 1 004 1 246 1 995 3 049 -991 -1 802 Employee benefit obligations ¹ 20 418 20 175 212 280 20 206 19 894 Other provisions 1 938 3 393 4 198 1 934 3 195 Other liabilities 38 630 40 566 8 311 9 514 30 319 31 052 Tax deductible losses carried forward, tax credits and recoverable income taxes 45 707 37 832 — — 45 707 37 832 Tax assets / liabilities 186 250 188 258 119 065 127 904 67 186 60 355 Set-off of assets and liabilities ¹ -67 006 -83 886 -67 006 -83 886 — — Net tax assets / liabilities 119 244 104 372 52 059 44 018 67 186 60 355 ¹ See note 2.8 'Restatement effects' - 191 - Bekaert Integrated Annual Report 2022 The deferred taxes on property, plant and equipment mainly related to differences in depreciation method between IFRS and tax books, whereas the deferred taxes on intangible assets were mainly generated by intercompany gains which have been eliminated in the consolidated statements. The deferred taxes on employee benefit obligations were mainly generated by temporary differences arising from recognition of liabilities in accordance with IAS 19 ‘Employee Benefits’. The deferred tax liabilities on financial assets mainly related to temporary differences arising from undistributed profits from subsidiaries and joint ventures. Movements in deferred tax assets and liabilities arose from the following: 2021 in thousands of € As at 1 January Recognized via income statement Recognized via OCI Acquisitions and disposals Exchange gains and losses As at 31 December Temporary differences Intangible assets 7 502 -2 221 — — -281 5 000 Property, plant and equipment -8 271 -1 224 — -1 184 1 189 -9 490 Financial assets ¹ -20 850 -9 356 -1 288 — -445 -31 940 Inventories 7 462 -4 459 — — -590 2 413 Receivables 4 557 -596 — — 66 4 027 Other current assets -1 767 722 — — 55 -991 Employee benefit obligations ¹ 23 375 -1 353 -2 212 — 396 20 206 Other provisions 3 300 -1 415 — — 48 1 934 Other liabilities 19 668 9 455 — — 1 195 30 319 Tax deductible losses carried forward, tax credits and recoverable income taxes 50 930 -7 261 — — 2 038 45 707 Total 85 906 -17 708 -3 500 -1 184 3 671 67 186 ¹ See note 2.8 'Restatement effects' 2022 in thousands of € As at 1 January Recognized via income statement Recognized via OCI Acquisitions and disposals Exchange gains and losses As at 31 December Temporary differences Intangible assets 5 000 10 397 — -478 442 15 361 Property, plant and equipment -9 490 -3 661 — — -1 084 -14 234 Financial assets -31 940 6 351 -6 005 — -82 -31 676 Inventories 2 413 -4 725 — — -518 -2 831 Receivables 4 027 -558 — — 94 3 563 Other current assets -991 -921 — — 110 -1 802 Employee benefit obligations 20 206 -2 112 1 192 — 608 19 894 Other provisions 1 934 1 324 -61 — -2 3 195 Other liabilities 30 319 634 — — 99 31 052 Tax deductible losses carried forward, tax credits and recoverable income taxes 45 707 -8 234 — 66 292 37 832 Total 67 186 -1 505 -4 874 -412 -40 60 355 - 192 - Bekaert Integrated Annual Report 2022 Deferred taxes related to other comprehensive income (OCI) 2021 in thousands of € Before tax Tax impact After tax Exchange differences ¹ 88 229 — 88 229 Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI 5 882 — 5 882 Remeasurement gains and losses on defined-benefit plans 47 351 -3 500 43 851 Share of OCI of joint ventures and associates 6 -3 3 Total 141 467 -3 503 137 965 ¹ See note 2.8 'Restatement effects' 2022 in thousands of € Before tax Tax impact After tax Exchange differences 48 888 — 48 888 Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI -2 367 — -2 367 Remeasurement gains and losses on defined-benefit plans 3 393 -4 874 -1 481 Share of OCI of joint ventures and associates 40 -13 27 Total 49 954 -4 887 45 067 Unrecognized deferred tax assets Deferred tax assets, related to deductible temporary differences, have not been recognized for a gross amount of € 208.2 million (2021: € 188.7 million). The unrecognized deferred tax assets in respect of tax losses and tax credits are presented in the table by expiry date below. - 193 - Bekaert Integrated Annual Report 2022 Capital losses, trade losses and tax credits by expiry date The following table presents the gross amounts of the tax losses and tax credits generating deferred tax assets of which some were unrecognized. 2021 in thousands of € Expiring within 1 year Expiring between 1 and 5 years Expiring after more than 5 years Not expiring Total Capital losses Gross value — — 777 40 009 40 786 Allowance — — -752 -39 758 -40 510 Net balance — — 25 251 276 Trade losses Gross value 38 285 61 381 153 867 674 409 927 943 Allowance -36 320 -47 215 -133 825 -551 123 -768 482 Net balance 1 966 14 166 20 042 123 287 159 461 Tax credits Gross value 34 — 306 20 554 20 894 Allowance — — -306 -3 164 -3 470 Net balance 34 — — 17 389 17 423 Total Gross value 38 319 61 381 154 950 734 972 989 622 Allowance -36 320 -47 215 -134 882 -594 045 -812 462 Net balance 2 000 14 166 20 068 140 927 177 160 2022 in thousands of € Expiring within 1 year Expiring between 1 and 5 years Expiring after more than 5 years Not expiring Total Capital losses Gross value — — 17 401 24 175 41 576 Allowance — — -17 401 -24 175 -41 576 Net balance — — — — — Trade losses Gross value 37 027 61 189 181 512 591 736 871 464 Allowance -36 670 -47 760 -135 417 -510 784 -730 631 Net balance 357 13 429 46 094 80 952 140 833 Tax credits Gross value — — 325 12 523 12 848 Allowance — — -325 -3 178 -3 503 Net balance — — — 9 346 9 346 Total Gross value 37 027 61 189 199 237 628 435 925 888 Allowance -36 670 -47 760 -153 143 -538 137 -775 709 Net balance 357 13 429 46 094 90 298 150 179 - 194 - Bekaert Integrated Annual Report 2022 The net deferred tax assets corresponding to these base amounts were € 37.8 million in 2021 (2021: € 45.7 million). Deferred tax assets were recognized only to the extent that it was probable that future taxable profits would be available, taking into account all evidence, both positive and negative. This assessment was done using prudent estimates based on the business plan for the entity concerned, typically using a five year time horizon. In some countries, deferred tax assets on capital losses, trade losses and tax credits were recognized to the extent of uncertain tax provisions recognized, in order to reflect that some tax audit adjustments would result in an adjustment of the amount of tax losses rather than in a cash tax out for the entity concerned. - 196 - Bekaert Integrated Annual Report 2022 6.8. Operating working capital 2021 in thousands of € As at 1 January Organic increase or decrease ¹ Write-downs and write-down reversals New consolidations Exchange gains and losses Other As at 31 December Raw materials 120 139 116 358 4 247 — 4 514 — 245 259 Consumables and spare parts 78 711 3 241 7 191 — 4 027 — 93 170 Work in progress 125 676 45 196 958 — 6 329 — 178 159 Finished goods 234 858 110 973 4 059 — 12 282 — 362 173 Goods purchased for resale 124 093 121 680 817 — -4 131 — 242 458 Inventories 683 477 397 448 17 272 — 23 021 — 1 121 219 Trade receivables 587 619 146 039 1 412 — 15 595 — 750 666 Bills of exchange received 54 039 -17 652 — — 4 887 — 41 274 Advances paid 18 594 -140 -1 — 1 535 19 988 Trade payables -668 422 -368 659 — — -25 105 — -1 062 185 Advances received -15 682 -7 581 — — -1 091 — -24 354 Remuneration and social security payables -116 014 -40 082 — — -4 602 1 -160 699 Employment-related taxes -9 101 850 — — -138 — -8 389 Operating working capital 534 510 110 224 18 683 — 14 101 1 677 519 - 197 - Bekaert Integrated Annual Report 2022 2022 in thousands of € As at 1 January Organic increase or decrease ¹ Write-downs and write-down reversals New consolidations Exchange gains and losses Other As at 31 December Raw materials 245 259 -35 496 -1 086 12 5 978 4 214 673 Consumables and spare parts 93 170 26 995 -1 258 74 714 2 119 696 Work in progress 178 159 3 906 -1 961 — 1 645 85 181 834 Finished goods 362 173 -13 120 -3 421 36 5 451 327 351 445 Goods purchased for resale 242 458 29 785 -5 289 27 8 884 -418 275 448 Inventories 1 121 219 12 070 -13 014 149 22 672 — 1 143 096 Trade receivables 750 666 -28 033 2 044 171 5 938 — 730 786 Bills of exchange received 41 274 -1 213 — — -297 — 39 764 Advances paid 19 988 -5 848 — — 407 — 14 547 Trade payables -1 062 185 163 526 — -448 -22 005 — -921 113 Advances received -24 354 28 — — 229 — -24 097 Remuneration and social security payables -160 699 40 220 — -68 -1 773 20 -122 300 Employment-related taxes -8 389 -2 462 — -2 43 — -10 810 Operating working capital 677 519 178 288 -10 970 -199 5 214 20 849 872 ¹ The organic increase or decrease represents the cash movements of the working capital, which are adjusted in the cash flow statement against purchase of intangible assets and property, plant and equipment for the variation of outstanding trade payables at year-end related to capital expenditure (2022: increase of outstanding payables by € 0.4 million (2021: increase of outstanding payables by € 9.4 million)). The average working capital, weighted by the number of periods that an entity has contributed to the consolidated result, represented 13.5% of sales (2021: 12.6%). Additional information is as follows: •Inventories The inventories remained rather stable (€ +21.9 million from year-end last year). The cost of sales included expenses related to transport and handling of finished goods amounting to € 303.5 million (2021: € 249.5 million), which have never been capitalized in inventories. Movements in inventories in 2022 included write-downs of € -46.8 million (2021: € -22.8 million) and reversals of write-downs of € 33.7 million (2021: € 40.1 million) Similar as in 2021, in 2022, no inventories were pledged as security for liabilities. •Trade receivables and bills of exchange received The trade accounts receivable decreased by € -21.4 million from year-end last year. The carrying amount of the trade receivables involved in the factoring program amounted to € 267.5 million (2021: € 224.8 million). - 198 - Bekaert Integrated Annual Report 2022 •The following table presents the movements in the allowance for bad debt on trade receivables. No allowance was posted for bills of exchange received. Trade receivables and bills of exchange received in thousands of € 2021 2022 Gross amount 833 840 810 441 Allowance for bad debts (impaired) -41 899 -39 891 specific allowance for bad debts -35 099 -36 034 general allowance for bad debts -6 801 -3 857 Net carrying amount 791 940 770 550 More information about allowances of receivables is provided in the following table: Allowance for bad debt in thousands of € 2021 2022 As at 1 January -40 494 -41 899 Losses recognized in current year -3 009 -6 029 Losses recognized in prior years - amounts used 1 079 1 138 Losses recognized in prior years - reversal of amounts not used 3 343 6 935 Exchange gains and losses (-) -2 817 -36 As at 31 December -41 899 -39 891 In accordance with the IFRS 9 ‘expected credit loss’ model for financial assets, a general bad debt allowance is made for trade receivables to cover the unknown bad debt risk at each reporting date. This general allowance constitutes of a percentage on outstanding trade receivables at each reporting date. The percentages are taking into account historical information on losses on trade receivables and are reviewed year-on-year. For more information on credit enhancement techniques, see note 7.2. ‘Financial risk management and financial derivatives’. •Trade payables decreased significantly, mainly as a result of the organic evolution As part of the Company's ongoing efforts to improve its working capital position, it continuously negotiates with its customers and suppliers on pricing, payment conditions and other terms. The purchase conditions that are agreed upon, are obtained in function of the Group's presence in the market, the Group's weight as a customer and its competitive position. In general, the Group's trade payables have a wide range of maturities depending on the type of material, the geographical area in which the purchase transaction occurs and the various contractual agreements. The invoice amounts arise from good and services in the normal cash operating cycle of the Group and are therefore an integral part of the working capital. The Group offers for selected suppliers to participate in different supply chain finance models. This involves giving suppliers the option to receive early payment by selling their receivables to a financial institution at a discount. The Group pays at the time the invoice under the reverse factoring agreement is due. At year-end 2022, the outstanding trade payables linked to supply chain finance models amounted to € 98.9 million. The payments are presented in the cash flows from operating activities because they are considered a part of the Group's ordinary operating cycle and continue to be elements of its operating costs. - 199 - Bekaert Integrated Annual Report 2022 6.9. Other receivables Carrying amount in thousands of € 2021 2022 As at 1 January 101 330 157 005 Increase or decrease 51 532 -11 312 Write-downs (-) and write-down reversals 158 1 134 New consolidations — 197 Exchange gains and losses 3 985 4 402 As at 31 December 157 005 151 426 Other receivables mainly related to income taxes (€ 59.8 million (2021: € 43.2 million)), VAT and other taxes (€ 75.0 million (2021: € 74.6 million)), loans to employees (€ 3.3 million (2021: € 3.4 million)) and dividends from joint ventures (€ 5.9 million (2021: € 27.5 million)). See also note 6.21. ’Tax positions’. Write-downs of other receivables are included in note 5.5. ‘Other financial income and expense’. 6.10. Cash & cash equivalents and short term deposits Carrying amount in thousands of € 2021 2022 Cash & cash equivalents 677 270 728 095 Short-term deposits 80 058 4 766 The cash balance within the Russian entity amounts to € 6,5 million and is primarily used within the day to day cash flow and treasury activities in the local operational activities, and need to comply with local Russian legislation in case the cash would be used in cross border transactions. For the changes in cash & cash equivalents, please refer to the consolidated cash flow statement and to note 7.1. ‘Notes to the cash flow statement’. Cash equivalents and short-term deposits did not include any listed securities or equity instruments at the balance sheet date. 6.11. Other current assets Carrying amount in thousands of € 2021 2022 Financial receivables and cash guarantees 6 475 6 352 Advances paid 19 988 14 547 Derivatives (cf.note 7.2.) 1 416 5 694 Deferred charges and accrued income 14 394 28 948 As at 31 December 42 272 55 541 The financial receivables and cash guarantees mainly related to receivables from the disposal of the majority stake in the rubber reinforcement plant Sumaré (Brazil) in 2017 (€ 3.8 million (2021: € 4.6 million)) and various cash guarantees (€ 1.1 million (2021: € 0.5 million)). The advances paid mainly related to advance payments in the context of large capex projects and advance payments for deliveries of wire rod. The increase in deferred charges and accrued income mainly related to the sale of idle land in Doncaster (UK). - 200 - Bekaert Integrated Annual Report 2022 6.12. Assets classified as held for sale and liabilities associated with those assets Carrying amount (net) in thousands of € 2021 2022 As at 1 January 6 740 1 803 Increases and decreases (-) -5 264 -1 063 Exchange gains and losses 327 20 As at 31 December 1 803 760 in thousands of € 2021 2022 Property, plant and equipment 1 803 760 Total assets classified as held for sale 1 803 760 Total liabilities associated with assets classified as held for sale — — The change in assets classified as held for sale included the sale of the machinery and equipment attached to the property in Ingelmunster (Belgium) following the discontinuation of the operations (€ -0.5 million), together with the land of Bridon-Bekaert Scanrope AS (Sweden) (€ -0.3 million) and the property received as payment by customers in Ecuador (€ -0.2 million). As at 31 December 2022, fair value less costs to sell of the assets held for sale did not fall below the carrying value, hence no write-downs to the carrying amount of the assets was required. - 201 - Bekaert Integrated Annual Report 2022 6.13. Ordinary shares, treasury shares and equity-settled share-based payments Issued capital 2021 2022 in thousands of € Nominal value Number of shares Nominal value Number of shares 1 As at 1 January 177 812 60 414 841 177 922 60 452 261 Movements in the year Issue of new shares 110 37 420 80 26 400 Cancellation of shares -4 266 -1 449 409 As at 31 December 177 922 60 452 261 173 737 59 029 252 2 Structure 2.1 Classes of ordinary shares Ordinary shares without par value 177 922 60 452 261 173 737 59 029 252 2.2 Registered shares 22 841 937 22 870 686 Dematerialized shares 37 610 324 36 158 566 Authorized capital not issued 176 000 176 000 A total of 26 400 subscription rights were exercised under the Company’s SOP 2005-2009 stock option plan in 2022, requiring the issue of a total of 26 400 new shares of the Company. On 31 December 2021, the Company held 3 145 446 own shares. Between 1 January 2022 and 31 December 2022, a total of 130 300 shares were transferred under the 2010-2014 and 2015-2017 Stock Option Plans. Bekaert sold 13 757 shares to members of the Bekaert Group Executive in the framework of the Bekaert Personal Shareholding Requirement Plan and transferred another 2 445 shares under the share-matching plan. A total of 12 080 shares were granted to the Chairman and other non-executive Directors as part of their remuneration for the performance of their duties. A total of 256 760 shares were disposed of following the vesting of 256 760 performance share units under the Bekaert Performance Share Plan. Bekaert bought back 3 095 629 shares in total and cancelled 1 449 409 shares of these at the end of June. Including the transactions exercised under the liquidity agreement with Kepler Cheuvreux, the balance of own shares held by Bekaert on 31 December 2022 was 4 380 475. - 202 - Bekaert Integrated Annual Report 2022 Stock option plans (‘SOP’) Details of the stock option plans which showed an outstanding balance either at the balance sheet date or at the previous balance sheet date, are as follows: Overview of SOP 2005-2009 Stock Option Plan Date offered Date granted Date of issue of subscription rights Exercise price (in €) Number of subscription rights First exercise period Last exercise period Granted Exercised Forfeited Outstanding 20.12.2007 18.02.2008 22.04.2008 28.335 215 100 202 400 12 700 — 22.05 - 30.06.2011 15.11 - 15.12.2022 785 058 615 893 169 165 — Overview of SOP 2010-2014 Stock Option Plan Date offered Date granted Exercise price (in €) Number of options First exercise period Last exercise period Granted Exercised Forfeited Outstanding 20.12.2012 18.02.2013 19.200 267 200 264 500 2 700 — End Feb. - 10.04.2016 Mid Nov. - 19.12.2022 29.03.2013 28.05.2013 21.450 260 000 235 000 — 25 000 End Feb. - 09.04.2017 End Feb. - 28.03.2023 19.12.2013 17.02.2014 25.380 373 450 325 150 2 400 45 900 End Feb. - 09.04.2017 Mid Nov. - 18.12.2023 18.12.2014 16.02.2015 26.055 349 810 210 400 18 510 120 900 End Feb. - 08.04.2018 Mid Nov. - 17.12.2024 1 250 460 1 035 050 23 610 191 800 Overview of SOP 2015-2017 Stock Option Plan Date offered Date granted Exercise price (in €) Number of options First exercise period Last exercise period Granted Exercised Forfeited Outstanding 17.12.2015 15.02.2016 26.375 227 250 122 000 28 250 77 000 End Feb. - 07.04.2019 Mid Nov. - 16.12.2025 15.12.2016 13.02.2017 39.426 273 325 144 47 125 226 056 End Feb. - 12.04.2020 Mid Nov. - 14.12.2026 21.12.2017 20.02.2018 34.600 225 475 72 500 8 375 144 600 End Feb. - 11.04.2021 Mid Nov. - 20.12.2027 726 050 194 644 83 750 447 656 - 203 - Bekaert Integrated Annual Report 2022 2021 2022 SOP 2005-2009 Stock Option Plan Number of subscription rights Weighted average exercise price (in €) Number of subscription rights Weighted average exercise price (in €) Outstanding as at 1 January 63 820 28.594 26 400 28.335 Exercised during the year -37 420 28.776 -26 400 28.335 Outstanding as at 31 December 26 400 28.335 — 28.335 2021 2022 SOP 2010-2014 Stock Option Plan Number of options Weighted average exercise price (in €) Number of options Weighted average exercise price (in €) Outstanding as at 1 January 700 058 24.488 300 600 24.300 Exercised during the year -399 458 24.630 -108 800 22.548 Outstanding as at 31 December 300 600 24.300 191 800 24.300 2021 2022 SOP 2015-2017 Stock Option Plan Number of options Weighted average exercise price (in €) Number of options Weighted average exercise price (in €) Outstanding as at 1 January 640 800 33.769 469 156 35.198 Exercised during the year -171 644 29.860 -21 500 26.375 Outstanding as at 31 December 469 156 35.198 447 656 35.198 Weighted average remaining contractual life in years 2021 2022 SOP 2005-2009 1.0 — SOP 2010-2014 2.2 1.5 SOP 2015-2017 5.1 4.1 - 204 - Bekaert Integrated Annual Report 2022 The weighted average share price at the date of exercise in 2022 was € 22.55 for the SOP 2010-2014 options (2021: € 24.63), € 26.38 for the SOP 2015-2017 options (2021: € 29.86) and € 28.34 for the SOP 2005-2009 subscription rights (2021: € 28.78). The exercise price of the subscription rights and options is equal to the lower of (i) the average closing price of the Company’s share during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer. When subscription rights are exercised under the SOP 2005-2009 plan, equity is increased by the amount of the proceeds received. Under the terms of the SOP2 plan any subscription rights or options granted through 2004 were vested immediately. Under the terms of the SOP 2010-2014 stock option plan, options to acquire existing Company shares have been offered to the members of the Bekaert Group Executive, the Senior Vice Presidents and senior executive personnel during the period 2010-2014. The grant dates of each offering were scheduled in the period 2011-2015. The exercise price of the SOP 2010-2014 options was determined in the same manner as in the previous plans. The vesting conditions of the SOP 2010-2014 grants, as well as of the SOP 2005-2009 grants and of the SOP2 grants beginning in 2006, are such that the subscription rights or options will be fully vested on 1 January of the fourth year after the date of the offer. In accordance with the Economic Recovery Act of 27 March 2009, the exercise period of the SOP2 options and SOP 2005-2009 subscription rights granted in 2006, 2007 and 2008 was extended by five years in favor of the persons who were plan beneficiaries and subject to Belgian income tax at the time such extension was offered. The options granted under SOP2, SOP 2010-2014 and SOP 2015-2017 and the subscription rights granted under SOP 2005- 2009 are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. ‘Retained earnings and other Group reserves’). The fair value of the options is determined using a binomial pricing model. During 2022, no options (2021: no options) were granted under SOP 2015-2017. No expense against equity has been recorded in 2022 (2021: none). - 205 - Bekaert Integrated Annual Report 2022 Performance Share Plan (‘PSP’) The members of the Bekaert Group Executive, the senior management and a limited number of management staff members of the Company and a number of its subsidiaries received Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and in 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy. The vesting percentage can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the vesting percentage is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment. For more information we refer to the ‘Remuneration Report’ in the ‘Corporate Governance Statements’ section of this report. Overview of Performance Share Plan Number of units Date granted Granted Delivered Forfeited Outstanding Expiry date 15.02.2019 178 233 136 023 42 210 — 31.12.2021 26.07.2019 35 663 31 778 3 885 — 31.12.2021 21.01.2020 182 900 — 64 584 118 316 31.12.2022 17.08.2020 12 580 — 713 11 867 31.12.2022 15.01.2021 144 708 — 34 057 110 651 31.12.2023 19.08.2021 15 101 — 732 14 369 31.12.2023 09.09.2021 7 966 — — 7 966 31.12.2023 04.03.2022 131 407 — 21 030 110 377 31.12.2024 25.08.2022 3 209 — — 3 209 31.12.2024 26.09.2022 12 864 — — 12 864 31.12.2024 724 631 167 801 167 211 389 619 The Performance Share Units granted under these plans are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. ‘Retained earnings and other Group reserves’). The fair value is determined as the share price at the transaction date. In 2022, on 4 March an offer of 131 407 equity settled performance share units, on 25 August an offer of 3 209 equity settled performance share units and on 26 September an offer of 12 864 equity settled performance share units were made under the terms of the PSP 2022-2024 (2021: on 15 January an offer of 144 708 equity settled performance share units, on 19 August an offer of 15 101 and on 9 September an offer of 7 966 under the terms of the PSP 2018-2020). The fair value of the Performance Share Units under the terms of the PSP plan is equal to the share price at grant date (4 March 2022: € 33.80, 25 August 2022: € 31.02 and 26 September 2022: € 25.98 (15 January 2021: € 29.14, 19 August 2021: € 39.74 and 9 September 2021: € 38.44)), since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow). The grant in 2022 represented a fair value of € 4.9 million (2021: € 5.1 million). The Group has recorded an expense against equity of € 9.2 million in 2022 (2021: € 14.8 million). - 206 - Bekaert Integrated Annual Report 2022 2021 2022 PSP Number of units Weighted average exercise price (in €) Number of units Weighted average exercise price (in €) Outstanding as at 1 January 390 631 24.185 473 006 26.251 Granted during the year 167 775 30.536 147 480 33.057 Delivered during the year 0 — -167 801 23.794 Forfeited during the year -85 400 25.217 -63 065 29.456 Outstanding as at 31 December 473 006 26.251 389 620 29.360 Personal Shareholding Requirement Plan (‘PSR’) In March 2016, the Company introduced a Personal Shareholding Requirement Plan for the Chief Executive Officer and the other members of the Bekaert Group Executive (‘BGE’), pursuant to which they can build and maintain a personal shareholding in Company shares and whereby the acquisition of the number of Company shares is supported by a so-called Company matching mechanism. The Company matching mechanism provides that the Company will match the BGE member’s investment in Company shares in year x, with a direct grant of a similar number of Company shares as acquired by the BGE member (such grant to be made at the end of year x + 2). These PSR units will vest following a vesting period of three years, conditional to a service condition subject to bad or good leaver conditions. For more information we refer to the ‘Remuneration Report’ in the ‘Corporate Governance Statements’ section of this report. Overview of Personal Shareholding Requirement Plan Date acquired Number of units Acquired Matched Forfeited Outstanding Expiry date 31.03.2020 10 766 3 489 7 277 — 31.12.2022 31.03.2021 9 112 — 3 930 5 182 31.12.2023 31.03.2022 13 757 — 1 597 12 160 31.12.2024 33 635 3 489 12 804 17 342 - 207 - Bekaert Integrated Annual Report 2022 The matching shares to be granted under the Personal Shareholding Requirement Plan 2016 are recognized at fair value at start date in accordance with IFRS 2 (see note 6.14. ‘Retained earnings and other Group reserves’). The fair value of the matching shares is determined using a binomial pricing model. Inputs and outcome of this pricing model are detailed below: To be matched in December 2022 To be matched in December 2023 To be matched in December 2024 Pricing model details - Personal Shareholding Requirement plan Start date March 2020 Start date March 2021 Start date March 2022 Inputs to the model Share price at start date (in €) 14.98 35.68 35.48 Expected volatility 36% 36% 37.37% Expected dividend yield 3% 3% 4.89% Vesting period (years) 2.75 2.75 2.75 Employee exit rate 0% 0% 0% Risk-free interest rate -0.47% -0.47% 1.27% Outcome of the model Fair value (in €) 13.81 32.99 6.48 Outstanding PSR Units — 5 182 12 160 The matching shares to be granted represented a fair value of € 0.1 million (2021: € 0.4 million). The Group has recorded an expense against equity of € 0.2 million (2021: € 0.1 million) for the matching shares to be granted, based on their fair value and vesting period. Number of units - PSR 2021 2022 Outstanding as at 1 January 10 766 18 878 Matched during the year — -3 489 Forfeited during the year -1 000 -11 804 Acquired during the year 9 112 13 757 Outstanding as at 31 December 18 878 17 342 Stock grant Board members The fixed fee of the Chairperson is paid partly in cash and partly in Company shares, subject to a three-year holding period from grant date. For the other non-executive Directors, the fixed fee for performance of duties as a member of the Board are paid in cash, but with the option each year to receive part (0%, 25% or 50%) in Company shares. In accordance with IFRS 2 this is treated as a share-based payment award with a cash alternative. The fair value of the stock grant are equal to the share price at grant date, being 31 May 2022 (€ 37.58) (being 31 May 2021: € 39.37). This stock grant vested immediately. The stock grant represented a fair value of € 0.5 million (2021: € 0.4 million). The Group has recorded an expense against equity of € 0.5 million (2021: € 0.4 million). - 208 - Bekaert Integrated Annual Report 2022 6.14. Retained earnings and other group reserves Carrying amount in thousands of € 2021 2022 Revaluation reserve for non-consolidated equity investments -5 986 -8 353 Remeasurement reserve for defined-benefit plans -16 790 -12 660 Deferred tax reserve 23 464 18 381 Other reserves 688 -2 631 Cumulative translation adjustments¹ -137 127 -93 820 Total other Group reserves¹ -136 440 -96 451 Treasury shares -95 517 -139 314 Retained earnings¹ 1 981 876 2 115 216 ¹ See note 2.8 'Restatement effects' In the following sections of this disclosure, the movements in the Group reserves and in retained earnings are presented and commented. Revaluation reserve for non-consolidated equity investments in thousands of € 2021 2022 As at 1 January -11 867 -5 986 Fair value changes 5 882 -2 367 As at 31 December -5 986 -8 353 Of which Investment in Shougang Concord Century Holdings Ltd -6 078 -9 228 Other investments 92 876 The revaluation of the investment in Shougang Concord Century Holdings Ltd is based on the closing price of the share on the Hong Kong Stock Exchange. See also note 6.6. ‘Other non-current assets’. Remeasurement reserve for defined-benefit plans in thousands of € 2021 2022 As at 1 January -63 543 -16 790 Remeasurements of the period 46 753 4 024 Equity reclassification — 107 As at 31 December -16 790 -12 660 The remeasurements originate from using different actuarial assumptions in calculating the defined-benefit obligation, from differences with actual returns on plan assets at the balance sheet date and any changes in unrecognized assets due to the asset ceiling principle (see note 6.16. ‘Employee benefit obligations’). Deferred tax reserve in thousands of € 2021 2022 As at 1 January 26 785 23 464 Deferred taxes relating to other comprehensive income -3 321 -5 083 As at 31 December 23 464 18 381 Deferred taxes relating to other comprehensive income are also recognized in OCI (see note 6.7. ‘Deferred tax assets and liabilities’). - 209 - Bekaert Integrated Annual Report 2022 Cumulative translation adjustments in thousands of € 2021 2022 As at 1 January -227 823 -137 127 Exchange differences on dividends declared -2 463 13 250 Recycled to income statement - relating to disposed entities or step acquisitions 1 270 — Movements arising from exchange rate fluctuations² 91 888 30 057 As at 31 December -137 127 -93 820 Of which relating to entities with following functional currencies Chinese renminbi 145 149 133 695 US dollar 30 558 54 214 Brazilian real -218 372 -191 871 Chilean peso -28 753 -22 760 Venezuelan bolivar soberano ¹ -59 691 -59 691 Indian rupee -7 625 -10 725 Czech koruna 11 291 12 711 British pound 2 115 -9 931 Russian ruble -6 463 -208 Romenian leu -3 991 -4 002 Other currencies -1 345 4 748 ¹ As a consequence of the functional currency switch to the US dollar on 1 January 2019, the value related to Venezuelan bolivar soberano remains frozen 2 See note 2.8 'Restatement effects'. The swings in CTA reflected both the exchange rate evolution and the relative importance of the net assets denominated in the presented currencies. Treasury shares in thousands of € 2021 2022 As at 1 January -106 148 -95 517 Shares purchased -11 570 -125 905 Shares sold 28 988 35 707 Price difference on shares sold -6 787 -5 172 Cancellations — 51 573 As at 31 December -95 517 -139 314 The number of shares on hand were sufficient, both to anticipate any dilution and to hedge the cash flow risk on share-based payment plans. In 2022 a total of 3 749 238 additional shares were bought back including the transactions exercised under the liquidity agreement with Kepler Cheuvreux (2021: 309 242). A total of 1 449 409 were cancelled. A total of 1 064 800 treasury shares were sold to the beneficiaries of the share-based payment plans of the Group and under the liquidity agreement with Kepler Cheuvreux (2021: 973 330). Treasury shares are accounted for using the FIFO principle (first-in, first-out). Gains and losses on disposals of treasury shares are directly recognized through retained earnings (see movements in retained earnings below). See also note 6.13. ‘Ordinary shares, treasury shares and equity-settled share-based payments’. Retained earnings in thousands of € Notes 2021 2022 As at 1 January (as reported) 1 614 781 1 981 876 Equity-settled share-based payments — 15 261 -6 813 Result for the period attributable to equity holders of Bekaert¹ 404 062 268 859 Dividends -56 795 -86 463 Equity reclassification — -107 Treasury shares transactions 6.13 6 787 -42 136 Changes in Group structure -2 220 — As at 31 December 1 981 876 2 115 216 ¹ See note 2.8 'Restatement effects' Treasury shares transactions (€ -42.1 million vs € 6.8 million in 2021) represented the difference between the proceeds and the FIFO book value of the shares that were sold and cancelled. Changes in Group structure in 2021 related to the merger of Proalco SAS (subsidiary of Bekaert) with the steel wire activities of Almasa SA, both located in Colombia. - 210 - Bekaert Integrated Annual Report 2022 6.15. Non-controlling interests Carrying amount in thousands of € 2021 2022 As at 1 January 87 175 130 971 Changes in Group structure 3 601 — Share of the result for the period 43 643 20 457 Share of other comprehensive income excluding CTA 422 -396 Dividend pay-out -6 649 -19 763 Capital increases 3 975 — Exchange gains and losses (-) -1 196 5 581 As at 31 December 130 971 136 850 The changes in Group structure and the Capital Increase in 2021 mainly related to the merger of Proalco SAS (subsidiary of Bekaert) with the steel wire activities of Almasa SA, both located in Colombia. The share in the result of the period for entities in which NCI are held, deteriorated significantly. The main contributing entities were located in Chile and Peru. In accordance with IFRS 12 ‘Disclosures of Interests in Other Entities’, following information is provided on subsidiaries that have non-controlling interests that are material to the Group. The objective of IFRS 12 is to require an entity to disclose information that enables users of its financial statements to evaluate (a) the nature and risks associated with its interests in other entities, and (b) the effects of those interests on its financial position, financial performance and cash flows. Bekaert has many partnerships across the world, most entities of which would not individually meet any reasonable materiality criterion. Therefore, the Group has identified two non-wholly owned groups of entities which are interconnected through their line of business and shareholder structure: (1) the '’Steel Wire Solutions’ entities (SWS entities) in Chile and Peru, where the non-controlling interests are mainly held by the Chilean partners, and (2) the SWS entities in the Andina region, where the non-controlling interests are mainly held by the Ecuadorian Kohn family and ArcelorMittal. In presenting aggregated information for these entity groups, only intercompany effects within each entity group have been eliminated, while all other entities of the Group have been treated as third parties. Proportion of NCI at year-end Entities included in material NCI disclosure Country 2021 2022 BBRG entities Procables SA Peru 3.9% 3.9% SWS entities Chile and Peru Acma SA Chile 48.0% 48.0% Acmanet SA Chile 48.0% 48.0% Industrias Acmanet Ltda Chile 48.0% 48.0% Industrias Chilenas de Alambre - Inchalam SA Chile 48.0% 48.0% Sujetar del Peru SAC Peru 0.0% 62.5% Procercos SA Chile 48.0% 48.0% Prodalam SA Chile 48.0% 48.0% Prodicom Selva SAC Peru 62.5% 62.5% Prodimin SAC Peru 62.5% 62.5% Prodac Contrata SAC Peru 62.5% 62.5% Productos de Acero Cassadó SA Peru 62.5% 62.5% SWS entities Andina region Agro-Bekaert Colombia SAS Colombia 60.0% 60.0% Agro - Bekaert Springs, SL Spain 60.0% 60.0% Bekaert Ideal SL Spain 20.0% 20.0% Bekaert Guatemala SA Guatemala 41.6% 41.6% Servicios Ideal AGF Inttegra Cia. Ltda Ecuador 70.8% 70.8% BIA Alambres Costa Rica SA Costa Rica 41.6% 41.6% Ideal Alambrec SA Ecuador 41.6% 41.6% InverVicson SA Venezuela 20.0% 20.0% Productora de Alambres Colombianos Proalco SAS Colombia 60.0% 60.0% Vicson SA Venezuela 20.0% 20.0% - 211 - Bekaert Integrated Annual Report 2022 The principal activity of the main entities listed above is manufacturing and selling wire and other wire products, mainly for the local market. Following entities are essentially holdings, having interests in one or more of the other entities listed above: Industrias Acmanet Ltda, Procercos SA, Bekaert Ideal SL and Agro - Bekaert Springs SL. The following table shows the relative importance of the entity groups with material NCI in terms of results and equity attributable to NCI. Material and other NCI Result attributable to NCI Equity attributable to NCI in thousands of € 2021 2022 2021 2022 SWS entities Chile and Peru 35 633 15 733 100 872 105 814 SWS entities Andina region 6 075 2 711 21 858 22 421 Consolidation adjustments on material NCI -651 228 -27 573 -27 316 Contribution of material NCI to consolidated NCI 41 057 18 672 95 157 100 919 Other NCI 2 586 1 785 35 814 35 931 Total consolidated NCI 43 643 20 457 130 971 136 850 The following tables show concise basic statements of the non-wholly owned groups of entities. SWS entities Chile and Peru in thousands of € 2021 2022 Current assets 382 128 339 103 Non-current assets 119 973 130 920 Current liabilities 247 022 224 591 Non-current liabilities 60 402 42 767 Equity attributable to equity holders of Bekaert 93 805 96 852 Equity attributable to NCI 100 872 105 814 SWS entities Chile and Peru in thousands of € 2021 2022 Sales 689 790 681 733 Expenses -619 952 -650 307 Result for the period 69 838 31 426 Result for the period attributable to equity holders of Bekaert 34 205 15 693 Result for the period attributable to NCI 35 633 15 733 Other comprehensive income for the period -8 946 11 354 OCI attributable to equity holders of Bekaert -5 302 5 512 OCI attributable to NCI -3 644 5 842 Total comprehensive income for the period 60 892 42 780 Total comprehensive income attributable to equity holders of Bekaert 28 903 21 205 Total comprehensive income attributable to NCI 31 989 21 575 Dividends paid to NCI -3 475 -17 588 Net cash inflow (outflow) from operating activities -4 351 9 166 Net cash inflow (outflow) from investing activities -8 402 -13 344 Net cash inflow (outflow) from financing activities 22 430 -26 881 Net cash inflow (outflow) 9 676 -31 059 The combination of a slight decrease in sales (-1.2%) and increase in expenses (+4.9%) results in worse profitability in absolute terms. As the increase in expenses was not mirrored in the sales evolution, profitability as percentage was decreased significantly (underlying EBIT margin on sales at 7.1% compared to (15.0% last year). The strong decrease in EBITDA was amplified by the working capital evolution. As a result the Net Debt position ended per year-end much higher than last year. - 212 - Bekaert Integrated Annual Report 2022 SWS entities Andina region in thousands of € 2021 2022 Current assets 150 291 117 430 Non-current assets 52 206 51 291 Current liabilities 143 778 111 249 Non-current liabilities 11 067 10 028 Equity attributable to equity holders of Bekaert 25 795 25 023 Equity attributable to NCI 21 858 22 421 SWS entities Andina region in thousands of € 2021 2022 Sales 237 878 276 074 Expenses -224 404 -270 266 Result for the period 13 473 5 808 Result for the period attributable to equity holders of Bekaert 7 398 3 098 Result for the period attributable to NCI 6 075 2 711 Other comprehensive income for the period -254 864 OCI attributable to equity holders of Bekaert -203 893 OCI attributable to NCI -51 -29 Total comprehensive income for the period 13 220 6 673 Total comprehensive income attributable to equity holders of Bekaert 7 196 3 991 Total comprehensive income attributable to NCI 6 024 2 682 Dividends paid to NCI -3 137 -2 078 Net cash inflow (outflow) from operating activities 28 707 -32 320 Net cash inflow (outflow) from investing activities -4 940 -5 829 Net cash inflow (outflow) from financing activities -13 089 26 195 Net cash inflow (outflow) 10 678 -11 954 Sales in 2022 were 16.1% higher compared to last year. However, due to a bigger increase in cost of sales, the underlying EBIT margin on sales deteriorated from 9.5% last year to 5.9% this year. Increased net working capital together with a decrease in EBITDA decreased the cash flow from operating activities, resulting in an increase of the Net Debt position. The situation for Vicson SA (Venezuela) remains under control. The company manages to source an adequate amount of wire rod to keep its operations going, albeit at a subdued level. Furthermore, the access to US dollar has become more flexible in the country to a point that now invoicing to many customers is made in that currency. Its cash & cash equivalents and short-term deposits amounted to € 0.5 million at 31 December 2022 (compared to € 0.4 million at 31 December 2021). - 213 - Bekaert Integrated Annual Report 2022 6.16. Employee benefit obligations The total net liabilities for employee benefit obligations, which amounted to € 197.9 million as at 31 December 2022 (€ 233.3 million as at year-end 2021), are as follows: in thousands of € 2021 2022 Liabilities for Post-employment defined-benefit plans ¹ 69 675 65 960 Other long-term employee benefits 4 821 4 783 Cash-settled share-based payment employee benefits 7 150 6 042 Short-term employee benefits 160 699 122 300 Termination benefits 10 786 11 019 Total liabilities in the balance sheet 253 130 210 104 of which Non-current liabilities ¹ 75 971 68 037 Current liabilities 177 159 142 068 Assets for Defined-benefit pension plans -19 847 -12 243 Total assets in the balance sheet -19 847 -12 243 Total net liabilities 233 283 197 862 ¹ See note 2.8. 'Restatement effects'. Post-employment benefit plans In accordance with IAS 19, ‘Employee benefits’, plans are classified as either defined-contribution plans or defined-benefit plans. Defined-contribution plans For defined-contribution plans, Bekaert pays contributions to publicly or privately administered pension funds or insurance companies. Once the contributions have been paid, the Group has no further payment obligation. These contributions constitute an expense for the year in which they are due. The Belgian defined-contribution pension plans are by law subject to minimum guaranteed rates of return. Pension legislation defines the minimum guaranteed rate of return as a variable percentage linked to government bond yields observed in the market as from 1 January 2016 onwards. As of 2016 the minimum guaranteed rate of return became 1.75% on both employer contributions and employee contributions. The old rates (3.25% on employer contributions and 3.75% on employee contributions) continue to apply to the accumulated past contributions in the group insurance as at 31 December 2015. As a consequence, the defined-contribution plans are reported as defined-benefit obligations at year-end, whereby an actuarial valuation was performed. Bekaert participates in a multi-employer defined-benefit plan in the Netherlands funded through the Pensioenfonds Metaal & Techniek (‘PMT’). This plan is treated as a defined-contribution plan because no sufficient information is available with respect to the plan assets attributable to Bekaert to apply defined-benefit accounting. Contributions for the plan amounted to € 1.6 million (2021: € 1.6 million). Employer contributions are set periodically by PMT, they are equal for all participating companies and are expressed as a percentage of pensionable salary. Bekaert’s total contribution represents less than 0.1% of the overall PMT contribution. The financing rules specify that an employer is not obliged to pay any further contributions in respect of previously accrued benefits. The funded status of PMT was 106.8% at 31 December 2022 (2021: 106.1%). There is no obligation for participating companies to fund any deficit of PMT (nor to receive any surplus). Defined-contribution plans in thousands of € 2021 2022 Expenses recognized 14 420 15 417 - 214 - Bekaert Integrated Annual Report 2022 Defined-benefit plans Several Bekaert companies operate retirement benefit and other post-employment benefit plans. These plans generally cover all employees and provide benefits which are related to salary and length of service. The latest actuarial valuations under IAS 19 were carried out as of 31 December 2022 for all significant post-employment defined-benefit plans by independent actuaries. The Group’s largest defined-benefit obligations were in Belgium, the United States and the United Kingdom. They accounted for 85.9% (2021: 90.3%) of the Group’s defined-benefit obligations and 99.5% (2021: 99.6%) of the Group’s plan assets. Plans in Belgium The funded plans in Belgium mainly related to retirement plans representing a defined-benefit obligation of € 173.5 million (2021: € 216.5 million) and € 182.9 million assets (2021: € 213.4 million). This is including the related plans funded through a group insurance. The traditional defined-benefit plans foresee in a lump sum payment upon retirement and in risk benefits in case of death or disability prior to retirement. The plans are externally funded through two self-administrated institutions for occupational retirement provision (IORP). On a regular basis, an Asset Liability Matching (ALM) study is performed in which the consequences of strategic investment policies are analyzed in terms of risk-and-return profiles. Statement of investment principles and funding policy are derived from this study. The purpose is to have a well-diversified asset allocation to control the risk. Investment risk and liability risk are monitored on a quarterly basis. Funding policy targets to be at least fully funded in terms of the technical provision (this is a prudent estimate of the pension liabilities). Other plans mainly related to pre-retirement pensions (defined-benefit obligation € 6.3 million (2021: € 8.0 million)) which are not externally funded. An amount of € 3.8 million (2021: € 4.6 million) related to employees in active service who have not yet entered into any pre-retirement agreement. Plans in the United States The funded plans in the United States mainly related to pension plans representing a defined-benefit obligation of € 102.8 million (2021: € 128.1 million) and assets of € 99.1 million (2021: € 124.4 million). The plans provide for benefits for the life of the plan members but have been closed for new entrants. Plan assets are invested, in fixed-income funds and in equities. Funding policy targets to be sufficiently funded in terms of Pension Protection Act requirements and thus to avoid benefit restrictions or at-risk status of the plans. Unfunded plans included medical care plans (defined-benefit obligation € 2.0 million (2021: € 2.4 million)). Plans in the United Kingdom The funded plan in the United Kingdom related to a pension scheme closed for new entrants and further accrual representing a defined-benefit obligation of € 52.5 million (2021: € 93.6 million) and assets of € 59.9 million (2021: € 113.5 million). The scheme is administrated by a separate board of Trustees which is legally separate from the company. The Trustees are composed of representatives of both employer and employees. The Trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits. The defined-benefit obligation solely includes benefits for deferred vested members (members whose employment has terminated and have not yet reached the eligible retirement age for drawing a pension) and pensioners (members who are already receiving pension as they have reached the eligible retirement age). Broadly, about 72% of the liabilities are attributable to deferred vested members and 28% to pensioners (2021: 30% pensioners). UK legislation requires that pension schemes are funded prudently. The funding valuation of the scheme carried out as at 31 December 2019 by a qualified actuary showed a surplus of € 7.4 million. As a consequence, the company is not required to pay contributions into the scheme. Administration costs are reported separately from IAS 19. - 215 - Bekaert Integrated Annual Report 2022 The amounts recognized in the balance sheet are as follows: in thousands of € 2021 2022 Belgium Present value of funded obligations 216 562 173 519 Fair value of plan assets -213 440 -182 880 Deficit / surplus (-) of funded obligations 3 122 -9 361 Present value of unfunded obligations 7 994 6 264 Total deficit / surplus (-) of obligations 11 116 -3 097 United States Present value of funded obligations 128 125 102 803 Fair value of plan assets -124 372 -99 106 Deficit / surplus (-) of funded obligations 3 753 3 697 Present value of unfunded obligations 7 556 6 207 Total deficit / surplus (-) of obligations 11 309 9 904 United Kingdom Present value of funded obligations 93 635 52 464 Fair value of plan assets -113 482 -59 908 Deficit / surplus (-) of funded obligations -19 847 -7 444 Present value of unfunded obligations — — Total deficit / surplus (-) of obligations -19 847 -7 444 Other Present value of funded obligations 2 545 3 103 Fair value of plan assets -1 615 -1 830 Deficit / surplus (-) of funded obligations 930 1 273 Present value of unfunded obligations ¹ 46 320 53 081 Total deficit / surplus (-) of obligations 47 250 54 354 Total Present value of funded obligations 440 867 331 889 Fair value of plan assets -452 909 -343 724 Deficit / surplus (-) of funded obligations -12 042 -11 835 Present value of unfunded obligations ¹ 61 870 65 552 Total deficit / surplus (-) of obligations 49 828 53 717 ¹ See note 2.8. 'Restatement effects'. Liabilities at year end 2021 have been restated for Indonesia and reflect the impact of the May 2021 IFRIC agenda decision on the attribution of benefits to periods of service. This has resulted in a € 1.7 million decrease of the defined-benefit obligation which has been reflected as a negative past service cost in restated 2021 numbers reported in the table below. The movement in the defined-benefit obligation, plan assets, net liability and asset over the year were as follows. in thousands of € Defined-benefit obligation Plan assets Net liability / asset (-) As at 1 January 2021 522 889 -422 079 100 810 Current service cost 17 424 — 17 424 Past service cost ¹ -1 869 — -1 869 Gains (-) / losses from settlements -87 — -87 Interest expense / income (-) 7 384 -5 500 1 884 Net benefit expense / income (-) recognized in profit and loss 22 853 -5 500 17 353 Components recognized in EBIT 15 469 Components recognized in financial result 1 884 Remeasurements Return on plan assets, excluding amounts included in interest expense / income (-) — -21 127 -21 127 Gain (-) / loss from change in demographic assumptions -1 622 — -1 622 Gain (-) / loss from change in financial assumptions -28 439 — -28 439 Experience gains (-) / losses 3 836 — 3 836 Changes recognized in equity -26 224 -21 127 -47 351 Contributions Employer contributions / direct benefit payments — -19 430 -19 430 Employee contributions 148 -148 — Payments from plans Benefit payments -32 275 32 275 — Foreign-currency translation effect ¹ 15 346 -16 900 -1 554 As at 31 December 2021 502 737 -452 909 49 828 ¹ See note 2.8. 'Restatement effects'. - 216 - Bekaert Integrated Annual Report 2022 in thousands of € Defined-benefit obligation Plan assets Net liability / asset (-) As at 1 January 2022 502 737 -452 909 49 828 Current service cost 16 125 — 16 125 Past service cost 54 — 54 Gains (-) / losses from settlements 502 — 502 Interest expense / income (-) 9 822 -7 928 1 894 Net benefit expense / income (-) recognized in profit and loss 26 503 -7 928 18 575 Components recognized in EBIT 16 681 Components recognized in financial result 1 894 Remeasurements Return on plan assets, excluding amounts included in interest expense / income (-) — 97 349 97 349 Gain (-) / loss from change in demographic assumptions 1 903 — 1 903 Gain (-) / loss from change in financial assumptions -119 037 — -119 037 Experience gains (-) / losses 16 392 — 16 392 Changes recognized in equity -100 742 97 349 -3 393 Contributions Employer contributions / direct benefit payments — -11 933 -11 933 Employee contributions 130 -130 — Payments from plans Benefit payments -35 786 35 786 — Foreign-currency translation effect 4 599 -3 959 640 As at 31 December 2022 397 441 -343 724 53 717 Gains and losses from settlements in 2022 mainly related to restructurings in Ecuador (€ 0.4 million gain), Indonesia (€ 0.9 million loss). The past service cost related to recognition of past service in Turkey upon permanent recruitment of temporary workforce. In the income statement, current and past service cost, including gains or losses from settlements are included in the operating result (EBIT), and interest expense or income is included in interest expense, under interest element of interest-bearing provisions. Changes recognized in equity amounted in 2022 to € -3.4 million and were driven by € 97.3 million loss on plan assets reflecting negative asset return, offset by € 100.7 million gains in defined benefit obligation. The latter can be broken down into € 119.0 million gains due to changes in financial assumptions reflecting increased discount rates and increased inflation assumptions, € 1.9 million losses due to changes in demographic assumptions and € 16.4 million losses in liabilities due to experience. Reimbursement rights arising from reinsurance contracts covering retirement pensions, death and disability benefits in Germany amounted to less than € 0.1 million (2021: € 0.1 million). Estimated contributions and direct benefit payments for 2023 are as follows: Estimated contributions and direct benefit payments in thousands of € 2023 Pension plans 18 141 - 217 - Bekaert Integrated Annual Report 2022 Fair values of plan assets at 31 December were as follows: in thousands of € 2021 2022 Belgium Bonds 55 905 53 018 Equity 94 366 69 047 Cash 4 077 3 000 Insurance contracts 59 092 57 815 Total Belgium 213 440 182 880 United States Bonds USD Long Duration Bonds 36 617 29 060 USD Fixed Income 5 842 4 817 USD Guaranteed Deposit 4 437 4 235 Equity USD Equity 49 690 38 372 Non-USD Equity 20 317 17 970 Real estate 7 470 4 652 Total United States 124 372 99 106 United Kingdom Bonds 35 480 16 009 Derivatives 62 806 37 015 Equity 13 850 5 677 Cash 1 346 1 207 Total United Kingdom 113 482 59 908 Other Bonds 1 614 1 830 Total Other 1 614 1 830 Total 452 909 343 724 In the USA, investments are primarily made through mutual fund investments and insurance company separate accounts, in quoted equity and debt instruments. In Belgium, the investments are made through mutual fund investments in quoted equity and debt instruments. Investments are well-diversified so that the failure of any single investment would not have a material impact on the overall level of assets. In UK a large proportion of assets is invested in liability driven investments and bonds. The Group’s plan assets include no direct positions in Bekaert shares or bonds, nor do they include any property used by a Bekaert entity. The principal actuarial assumptions on the balance sheet date (weighted averages based on outstanding DBO) were: Actuarial assumptions 2021 2022 Discount rate 2.0% 4.7% Future salary increases 3.3% 3.7% Underlying inflation rate 2.3% 2.8% Health care cost increases (initial) 6.5% 7.5% Health care cost increases (ultimate) 5.0% 5.0% Health care (years to ultimate rate) 6 10 The discount rate for the UK, USA and Belgium is reflective both of the current interest rate environment and the plan’s distinct liability characteristics. The plan’s projected cash flows are matched to spot rates, after which an associated present value is developed. A single equivalent discount rate is then determined that produces that same present value. The underlying yield curve for deriving spot rates is based on high quality AA-credit rated corporate bonds issues denominated in the currency of the applicable regional market. This resulted into the following discount rates: Discount rates 2021 2022 Belgium 1.0% 3.8% United States 2.8% 5.3% United Kingdom 1.9% 5.0% Other 4.7% 6.3% - 218 - Bekaert Integrated Annual Report 2022 This resulted into the following inflation rates: Inflation rates 2021 2022 Belgium 1.8% 2.2% United States N/A N/A United Kingdom 3.3% 3.3% Other 2.9% 4.8% Total 2.3% 2.8% Assumptions regarding future mortality are based on actuarial advice in accordance with published statistics and experience in each territory. These assumptions translated into the following average life expectancy in years for a pensioner retiring at age 65. 2021 2022 Life expectancy of a man aged 65 (years) at balance sheet date 20.2 20.2 Life expectancy of a woman aged 65 (years) at balance sheet date 22.6 22.7 Life expectancy of a man aged 65 (years) ten years after balance sheet date 20.9 20.9 Life expectancy of a woman aged 65 (years) ten years after balance sheet date 23.4 23.4 Sensitivity analyses show the following effects: Sensitivity analysis in thousands of € Change in assumption Impact on defined-benefit obligation Discount rate -0.50% Increase by 17 354 4.4% Salary growth rate 0.50% Increase by 4 007 1.0% Health care cost 0.50% Increase by 83 0.02% Life expectancy 1 year Increase by 4 616 1.2% The above analyses were done on a mutually exclusive basis, while holding all other assumptions constant. Through its defined-benefit plans, the Group is exposed to a number of risks, the most significant of which are detailed below: Asset volatility The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets underperform this yield, this will create a deficit. Changes in bond yields A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings. Salary risk The majority of the plans’ benefit obligations are calculated by reference to the future salaries of plan members. As such, a salary increase of plan members higher than expected will lead to higher liabilities. Longevity risk Belgian pension plans provide for lump sum payments upon retirement. As such, there is limited or no longevity risk. Pension plans in the USA and UK provide for benefits for the life of the plan members, so increases in life expectancy will result in an increase in the plans’ liabilities. The weighted average durations of the defined-benefit obligations were as follows: Weighted average durations of the DBO in years 2021 2022 Belgium 12.5 10.0 United States 11.5 9.5 United Kingdom 20.0 16.5 Other 10.3 9.7 Total 13.4 10.7 Termination benefits Termination benefits are cash and other services paid to employees when their employment has been terminated. Other long-term employee benefits The other long-term employee benefits related to service awards. - 219 - Bekaert Integrated Annual Report 2022 Cash-settled share-based payment employee benefits Stock appreciation rights (‘SAR’) The Group issues stock appreciation rights (SARs) for certain management employees, granting them the right to receive the intrinsic value of the SARs at the date of exercise. These SARs are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant is recalculated at balance sheet date, using a binomial pricing model. Based on local regulations, the exercise price for any grant under the USA SAR plan is equal to the average closing price of the Company’s share during the thirty days following the date of the offer. The exercise price for the other SAR plans is determined in the same way as for the equity-settled stock option plans: it is equal to the lower of (i) the average closing price of the Company’s share during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer. Following inputs to the model are used for all grants: share price at balance sheet date: € 36.28 (2021: € 39.14), expected volatility in a range between 31% and 37% (2021: 34%), expected dividend yield in a range between 4.3% and 4.6% (2021: 3.0%), vesting period of 3 years and a contractual life of 10 years. Inputs for risk-free interest rates vary by grant and are based on the return of Belgian OLO’s (Obligation Linéaire / Lineaire Obligatie) with a term equal to the maturity of the SAR grant under consideration. Exercise prices and fair values of outstanding SARs by grant are shown below: USA SAR Plan details by grant in € Granted Exercise price Fair value as at 31 December 2021 Fair value as at 31 December 2022 Grant 2013 20 900 22.09 17.04 — Grant 2014 36 800 25.66 13.72 11.17 Grant 2015 40 200 25.45 13.99 11.68 Grant 2016 20 250 28.38 11.91 11.33 Grant 2017 26 375 38.86 7.88 7.35 Grant 2018 16 875 37.06 8.76 8.95 Other SAR Plans details by grant in € Granted Exercise price Fair value as at 31 December 2021 Fair value as at 31 December 2022 Grant 2013 24 500 19.20 19.92 — Exceptional grant 2013 10 000 21.45 17.69 — Grant 2014 54 800 25.38 13.96 11.39 Grant 2015 44 700 26.06 13.42 11.24 Grant 2016 38 500 26.38 13.33 12.42 Grant 2017 53 000 39.43 7.85 7.35 Grant 2018 37 500 34.60 9.48 9.74 At 31 December 2022, the total liability for the USA SAR plan amounted to € 0.3 million (2021: € 0.4 million), while the total liability for the other SAR plans amounted to € 0.5 million (2021: € 0.5 million). The Group recorded a total income of € 0.1 million (2021: income of € 0.0 million) during the year in respect of SARs. Performance Share Units (‘PSU’) Certain management employees received cash-settled Performance Share Units (PSUs) entitling the beneficiary to receive the value of Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and during 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy, and can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the performance target is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment. - 220 - Bekaert Integrated Annual Report 2022 These Performance Share Units are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant under PSU 2018-2020 and under PSU 2022-2024 is equal to the share price at balance sheet date, since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow). The fair value of outstanding Performance Share Units by grant is shown below: Performance Share Units details by grant in € Granted Fair value as at 31 December 2021 Fair value as at 31 December 2022 Grant 2020 45 141 39.14 36.28 Grant 2020 444 39.14 36.28 Grant 2021 4 567 39.14 36.28 Grant 2022 24 832 — 36.28 At 31 December 2022, the total liability for the USA PSUs amounted to € 1.6 million (2021: € 1.6 million), while the total liability for the other PSUs amounted to € 3.7 million (2021: € 4.8 million). The Group recorded a total cost of € 2.2 million (2021: cost of € 4.8 million) during the year in respect of PSUs. Short-term employee benefit obligations Short-term employee benefit obligations relate to liabilities for remuneration and social security that are due within twelve months after the end of the period in which the employees render the related service. End 2021, they included considerable higher bonus provisions than at end 2022. - 221 - Bekaert Integrated Annual Report 2022 6.17. Provisions in thousands of € Restructuring Claims Environment Other Total As at 1 January 2021 6 525 6 600 20 015 3 448 36 588 Additional provisions 56 1 516 2 397 867 4 836 Unutilized amounts released -220 -3 309 -591 -1 069 -5 188 Increase in present value — — — 15 15 Charged to the income statement -164 -1 793 1 807 -187 -337 Amounts utilized during the year -5 661 -1 930 -858 -388 -8 837 Exchange gains (-) and losses 3 186 89 11 289 As at 31 December 2021 703 3 062 21 053 2 884 27 703 Of which current 703 1 987 635 1 066 4 392 non-current - between 1 and 5 years — 1 075 9 008 1 250 11 333 non-current - more than 5 years — — 11 410 568 11 978 in thousands of € Restructuring Claims Environment Other Total As at 1 January 2022 703 3 062 21 053 2 884 27 703 Additional provisions 123 5 163 1 225 6 764 13 275 Unutilized amounts released -117 -1 681 -539 -836 -3 173 Increase in present value — — — 13 13 Charged to the income statement 6 3 482 686 5 941 10 116 Amounts utilized during the year -680 -942 -1 718 -484 -3 824 Exchange gains (-) and losses 1 -37 32 89 85 As at 31 December 2022 30 5 565 20 053 8 430 34 079 Of which current 30 2 345 415 3 364 6 154 non-current - between 1 and 5 years — 3 221 8 228 4 398 15 847 non-current - more than 5 years — — 11 410 667 12 077 Provisions for claims mainly related to product warranty programs and various product quality claims in several entities. The environmental provisions mainly related to sites in EMEA. The expected soil sanitation costs are reviewed at each balance sheet date, based on external expert assessments. Timing of settlement is uncertain as it is often triggered by decisions on the destination of the premises. The increase in the environmental provisions mainly relate to a new provision linked to the disposal of the Figline plant, martially offset by the utilization and release of environmental provisions linked to sites in Belgium and UK. The increase of other provisions mainly relate to the new provision in Indonesia with regards to customs and VAT cases. - 222 - Bekaert Integrated Annual Report 2022 6.18. Interest-bearing debt An analysis of the carrying amount of the Group’s interest-bearing debt by contractual maturity is presented below: 2021 in thousands of € Due within 1 year Due between 1 and 5 years Due after 5 years Total Interest-bearing debt Lease liability 20 219 36 837 19 588 76 644 Cash guarantees received — 84 120 204 Credit institutions 217 523 177 047 — 394 571 Schuldschein loans — 298 964 20 941 319 905 Bonds — 200 000 200 000 400 000 Convertible bonds — — — — Total financial debt 237 742 712 932 240 649 1 191 324 2022 in thousands of € Due within 1 year Due between 1 and 5 years Due after 5 years Total Interest-bearing debt Lease liability 20 002 36 872 20 331 77 205 Cash guarantees received — 144 66 210 Credit institutions 291 989 146 413 — 438 401 Schuldschein loans 188 598 131 582 — 320 179 Bonds — 400 000 — 400 000 Total financial debt 500 588 715 011 20 397 1 235 996 An analysis of the undiscounted outflows relating to the Group’s financial liabilities by contractual maturity is presented in note 7.2. ‘Financial risk management and financial derivatives’. The financial debt due within one year increased with € 262.8 million mainly due to repayments of the Schuldschein loans which will take place in June 2023 (€ 188.6 million at amortized cost per year-end 2022). As a general principle, loans are entered into by Group companies in their local currency to avoid currency risk. If funding is in another currency without an offsetting position on the balance sheet, the companies hedge the currency risk through derivatives (cross-currency interest-rate swaps or forward exchange contracts). Bonds, commercial paper and debt towards credit institutions are unsecured, except for the factoring programs. For further information on financial risk management, we refer to note 7.2. ‘Financial risk management and financial derivatives’. Net debt calculation The following table summarizes the calculation of the net debt. in thousands of € 2021 2022 Non-current interest-bearing debt 953 581 735 408 Current interest-bearing debt 237 742 500 588 Total financial debt 1 191 324 1 235 996 Non-current financial receivables and cash guarantees -10 192 -9 665 Current financial receivables and cash guarantees -6 475 -6 352 Short-term deposits -80 058 -4 766 Cash and cash equivalents -677 270 -728 095 Net debt 417 329 487 118 - 223 - Bekaert Integrated Annual Report 2022 Changes in liabilities arising from financing activities In accordance with the disclosure requirements of IAS 7 ‘Statement of Cash Flows’, this section presents an overview of the changes in liabilities arising from financing activities. The qualification as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash flow statement, the cash flows from long-term interest-bearing debt are analyzed between proceeds and repayments. In 2022, other changes in financial debt mainly related to the non-cash movements on the lease liability (€ 33.5 million) (see also note 6.4. ‘Right-of-use (RoU) property, plant and equipment’). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. ‘Financial risk management and financial derivatives’. In 2021, other changes in financial debt mainly related to the non-cash movements on the lease liability (€ 19.6 million) (see also note 6.4. ‘Right-of-use (RoU) property, plant and equipment’), and interest accruals from amortizations on liabilities using the effective interest method (€ 4.9 million). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. ‘Financial risk management and financial derivatives’. 2021 Non-cash changes in thousands of € As at 1 January Cash flows Acquisitions & disposals Cumulative translation adjustments Fair value changes Other changes As at 31 December Financial debt Long-term interest-bearing debt ¹ 1 380 866 -416 174 — 3 619 — 24 802 993 114 Cash guarantees received 171 12 — 20 — — 204 Lease liability 80 505 -26 290 — 2 805 — 19 624 76 644 Credit institutions 205 463 -9 896 — 794 — — 196 361 Schuldschein loans 319 635 — — — — 270 319 905 Bonds 400 000 — — — — — 400 000 Convertible bonds 375 092 -380 000 — — — 4 908 — Short-term interest bearing debt 228 865 -43 328 — 12 672 — — 198 210 Total financial debt 1 609 732 -459 501 — 16 291 — 24 802 1 191 324 Derivatives held to hedge financial debt Interest-rate swaps 1 081 — — — -964 — 118 Cross-currency interest-rate swaps -5 030 — — — 6 675 — 1 645 Other liabilities from financing activities Conversion derivative 34 — — — -34 — — Total liabilities from financing activities 1 605 817 -459 501 — 16 291 5 677 24 802 1 193 087 ¹ Including the current portion of non-current interest-bearing debt of € 412.8 million as at 1 January and € 39.5 million as at 31 December. - 224 - Bekaert Integrated Annual Report 2022 2022 Non-cash changes in thousands of € As at 1 January Cash flows Acquisitions & disposals Cumulative translation adjustments Fair value changes Other changes As at 31 December Financial debt Long-term interest-bearing debt ¹ 993 114 -75 577 — 2 107 — 33 974 953 618 Cash guarantees received 204 11 — -5 — — 210 Lease liability 76 644 -31 704 — -1 434 — 33 699 77 205 Credit institutions 196 361 -43 885 — 3 546 — — 156 023 Schuldschein loans 319 905 — — — — 275 320 179 Bonds 400 000 — — — — — 400 000 Convertible bonds — — — — — — — Short-term interest bearing debt 198 210 67 349 614 16 205 — — 282 378 Total financial debt 1 191 324 -8 228 614 18 312 — 33 974 1 235 996 Derivatives held to hedge financial debt Interest-rate swaps 118 — — — -7 295 — -7 178 Cross-currency interest-rate swaps 1 645 — — — -4 290 — -2 645 Total liabilities from financing activities 1 193 087 -8 228 614 18 312 -11 586 33 974 1 226 173 ¹ Including the current portion of non-current interest-bearing debt of € 39.5 million as at 1 January and € 218.1 million as at 31 December. - 225 - Bekaert Integrated Annual Report 2022 6.19. Other non-current liabilities Carrying amount in thousands of € 2021 2022 Other non-current amounts payable 142 150 Derivatives (cf. note 7.2.) 703 — Total 844 150 The derivatives related to an interest-rate swap to hedge the variable interest in some of the Schuldschein loans are nil in 2022 (2021: € 0.1 million). CCIRSs are also nil in 2022. (2021: € 0.6 million) (see notes 6.18. ‘Interest-bearing debt’ and 7.2. ‘Financial risk management and financial derivatives’). 6.20. Other current liabilities Carrying amount in thousands of € 2021 2022 Other amounts payable 9 122 14 362 Derivatives (cf. note 7.2.) 2 324 1 548 Advances received 24 354 24 097 Other taxes 24 127 36 940 Accruals and deferred income 8 322 11 171 Total 68 249 88 118 The increase in 2022 of Other amounts payable was mainly due to higher outstanding dividend payable and payable relating to tax consolidation regime in Italy. The derivatives included forward-exchange contracts (€ 1.3 million (2021: € 0.7 million)) and CCIRSs (€ 0.2 million (2021: € 1.7 million)). Advances received mainly related to the project business of Bridon-Bekaert Ropes Group (BBRG) and advance payments from the Brazilian joint ventures on equipment orders at Engineering. Other taxes related to VAT payable (€ 10.2 million (2021: € 5.1 million)), employment-related taxes withheld (€ 10.8 million (2021: € 8.4 million)) and other non-income taxes payable (€ 15.9 million (2021: € 10.6 million)) 6.21. Tax positions The table below provides an overview of the tax receivables, tax payables and uncertain tax positions recognized at balance sheet closing date. The tax receivables and payables include both current income taxes, VAT and other taxes. in thousands of € 2021 2022 Tax receivables 113 568 126 694 Certain tax liabilities 71 376 59 292 Uncertain tax positions 38 882 43 828 The certain tax liabilities include the balances of other taxes presented in the table of note ‘6.20. Other current liabilities’. - 226 - Bekaert Integrated Annual Report 2022 7. Miscellaneous items 7.1. Notes to the cash flow statement Summary in thousands of € 2021 2022 Operating result (EBIT)¹ 510 589 365 754 Non-cash items added back to operating result (EBIT)¹ 164 256 260 729 EBITDA¹ 674 845 626 483 Other gross cash flows from operating activities -140 345 -121 294 Gross cash flows from operating activities¹ 532 884 505 189 Changes in operating working capital ² -119 773 -174 467 Other operating cash flows -32 620 9 570 Cash from operating activities¹ 380 491 340 292 Cash from investing activities¹ -91 810 -124 956 Cash from financing activities -567 082 -174 398 Net increase or decrease in cash and cash equivalents¹ -278 401 40 937 ¹ See note 2.8 'Restatement effects' 2 For reconciliation of the changes in operating working capital with the organic variation of the working capital, see note 6.8. 'Operating working capital'. The cash flow from operating activities is presented using the indirect method, whereas the direct method is used for the cash flows from other activities. The direct method focuses on classifying gross cash receipts and gross cash payments by category. - 227 - Bekaert Integrated Annual Report 2022 Cash from operating activities Details of selected operating items in thousands of € 2021 2022 Non-cash items included in operating result (EBIT) Depreciation and amortization ¹ ² 165 774 202 795 Impairment losses on assets -1 518 57 934 Non-cash items added back to operating result (EBIT)² 164 256 260 729 Gains (-) and losses on business disposals (portion retained) — -474 Employee benefits: set-up / reversal (-) of amounts not used ² 12 428 26 158 Provisions: set-up / reversal (-) of amounts not used -352 10 102 CTA recycled on business disposals -2 987 -555 Equity-settled share-based payments 15 261 92 Other non-cash items included in operating result (EBIT)² 24 349 35 324 Total² 188 605 296 053 Investing items included in operating result (EBIT) Gains (-) and losses on business disposals (portion sold) 170 210 Gains (-) and losses on disposals of intangible assets + PP&E -23 404 -11 591 Total -23 234 -11 381 Amounts used on provisions and employee benefit obligations Employee benefits: amounts used -41 503 -24 123 Provisions: amounts used -8 837 -3 824 Total -50 340 -27 947 Income taxes paid Current income tax expense -116 006 -79 593 Increase or decrease (-) in net income taxes payable 23 269 -37 697 Total -92 737 -117 289 Other operating cash flows Movements in other receivables and payables -27 411 9 365 Other -5 209 205 Total -32 620 9 570 ¹ Including € 11.0 million (2021: € -18.6 million) write-downs / (reversals of write-downs) on inventories and trade receivables (see note 6.8. ‘Operating working capital’). 2 See note 2.8 'Restatement effects' Gross cash flows from operating activities decreased by € -27.7 million as a result of lower EBITDA (€ -48.4 million), lower set-up for equity-settled share-based payments (€ -15.2 million) and a higher cash-out from income taxes paid (€ -24.5 million higher). This is partially offset with a lower adjustment for the accounting profit on investing items (€ +11.9 million lower), by a higher set-up of employee benefit obligations and provisions, and a lower reversal and usage of employee benefits and provisions (€ +46.6 million higher). The cash outflow from the increase in working capital, driven by the lower outstanding accounts payable, partially offset with higher inventories and trade receivables, amounted to € -178.7 million in 2022 (2021: € -119.8 million) (see organic decrease in note 6.8. ‘Operating working capital’). Other operating cash flows mainly related to swings in other receivables and payables not included in working capital and not arising from investing or financing activities. In 2022, the cash-out from income taxes was € 117.3 million. Most taxes were paid in China (€ 25.3 million), Chile (€ 17.5 million), Belgium (€ 10.8 million), Turkey (€ 11.2 million), Czech Republic (€ 8.7 million), Peru (€ 8 million), Colombia (€ 3.8 million) and Indonesia (€ 3.3 million). - 228 - Bekaert Integrated Annual Report 2022 Cash from investing activities The following table presents more details on selected investing cash flows: Details of selected investing items in thousands of € 2021 2022 Other portfolio investments New business combinations — -2 384 Other investments -863 -8 613 Total -863 -10 997 Proceeds from disposals of fixed assets Proceeds from disposals of intangible assets 121 127 Proceeds from disposals of property, plant and equipment 12 235 2 115 Proceeds from disposals of RoU Land 712 7 Proceeds from disposals of assets classified as held for sale 23 683 891 Total 36 752 3 141 The other investments in 2022 relate to the investment in Pajarito Powder LLC (€ 3.9 million) and TFI Marine Nominees Limited (€ 4.0 million). New business combinations relate to the investments in new subsidiaries in 2022.The other investments in 2021 relate to the investment in a power generation company in India. Cash-outs from capital expenditure for property, plant and equipment increased from € 143.8 million in 2021 to € 170.2 million in 2022. The proceeds from sales of fixed assets in 2022 relate to sales transactions, mainly in Belgium. In 2021 they relate to the real estate sales transactions, mainly in Peru, Malaysia, Belgium and Canada. Cash from financing activities The following table presents more details about selected financing items: Details of selected financing items in thousands of € 2021 2022 Other financing cash flows New shares issued following exercise of subscription rights 1 077 748 Increase (-) or decrease in current and non-current receivables 495 -763 Increase (-) or decrease in current financial assets -28 439 75 552 Other financial income and expenses -2 879 -7 064 Total -29 747 68 473 New long-term debt issued was limited to € 12.0 million in 2022 (2021: € 23.6 million). Repayments of long-term debt (€ -87.6 million) refinancing of local loans in Peru (€ -25.5 million), Australia (€ -16.2 million) and China (€ -12.0 million). Cash-ins from short-term debt amounted to € +67.3 million in 2022 (2021: cash-outs € -43.3 million), mostly by entering in new short term loans by the Latin American entities. For an overview of the movements in liabilities arising from financing activities, see note 6.18. ‘Interest-bearing debt’. In 2022 the treasury shares transactions decreased with € -97.1 million (2021: increase by € 17.4 million) and consisted mainly of the costs of share buy-back program being exercised. As for other financing cash flows, cash-ins resulted from new shares issued following exercise of subscription rights (€ 0.7 million vs € 1.1 million in 2021), decrease from loans and receivables (€ -0.8 million vs € 0.5 million in 2021) and cash-ins from current financial assets, mainly short-term deposits (€ 75.6 million vs € -28.4 million in 2021). Other financial income and expenses mainly related amongst others to taxes and bank charges on financial transactions (€ -7.1 million vs € -2.9 million in 2021). - 229 - Bekaert Integrated Annual Report 2022 7.2. Financial risk management and financial instruments Principles of financial risk management The Group is exposed to risks from movements in exchange rates, interest rates and market risks that affect its assets and liabilities. Financial risk management within the Group aims at reducing the impact of these market risks through ongoing operational and financing activities. Selected derivative hedging instruments are used depending on the assessment of risk involved. The Group mainly hedges the risks that affect the Group’s cash flows. Derivatives are used exclusively as hedging instruments and not for trading or other speculative purposes. To reduce the credit risk, hedging transactions are generally only concluded with financial institutions whose long term credit rating is at least A according to Moody’s Investors Service Inc., Fitch and S&P. The guidelines and principles of the Bekaert financial risk policy are defined by the Audit, Risk and Finance Committee and overseen by the Board of the Group. Group Treasury is responsible for implementing the financial risk policy. This encompasses defining appropriate policies and setting up effective control and reporting procedures. The Audit, Risk and Finance Committee is regularly kept informed on the exposures. Currency risk The Group’s currency risk can be split into two categories: translational and transactional currency risk. Translational currency risk A translational currency risk arises when the financial data of foreign subsidiaries are converted into the Group’s presentation currency, the euro. The main currencies are Chinese renminbi, US dollar, Czech koruna, Brazilian real, Chilean peso, Russian ruble, Indian rupee and pound sterling. Since there is no impact on the cash flows, the Group usually does not hedge against such risk. Transactional currency risk The Group is exposed to transactional currency risks resulting from its operating, investing and financing activities. Foreign currency risk in the area of operating activities arises from commercial activities with sales and purchases in foreign currencies, as well as payments and receipts of royalties. The Group uses forward-exchange contracts to limit the currency risk on the forecasted cash inflows and outflows for the coming three months. Significant exposures and firm commitments beyond that time frame may also be covered. Foreign currency risk in the area of investment results from the acquisition and disposal of investments in foreign companies, and sometimes also from dividends receivable from foreign investments. If material, these risks are hedged by means of forward exchange contracts. Foreign currency risk in the financing area results from financial liabilities in foreign currencies. In line with its policy, Group Treasury hedges these risks using cross-currency interest-rate swaps and forward exchange contracts to convert financial obligations denominated in foreign currencies into the entity’s functional currency. At the reporting date, the foreign currency liabilities for which currency risks were hedged mainly consisted of intercompany loans in euro and US dollar. Currency sensitivity analysis Currency sensitivity relating to the operating, investing and financing activities The following table summarizes the Group’s net foreign currency positions of operating, investing and financing receivables and payables at the reporting date for the most important currency pairs. The net currency positions are presented before intercompany eliminations. Positive amounts indicate that the Group has a net future cash inflow in the first currency. In the table, the ‘Total exposure’ column represents the position on the balance sheet, while the ‘Total derivatives’ column includes all financial derivatives hedging those balance sheet positions as well as forecasted transactions. - 230 - Bekaert Integrated Annual Report 2022 Currency pair - 2021 in thousands of € Total exposure Total derivatives Open position AUD/EUR -6 506 -8 323 -14 829 CAD/EUR -11 171 — -11 171 CZK/EUR 24 625 -1 132 23 493 EUR/CNY -17 706 — -17 706 EUR/GBP 12 479 6 206 18 685 EUR/INR -27 084 19 725 -7 359 EUR/MYR -12 495 — -12 495 EUR/RON -39 256 — -39 256 EUR/RUB -35 641 22 134 -13 507 IDR/USD -13 740 — -13 740 JPY/CNY 8 229 -1 925 6 304 JPY/USD 5 888 -3 362 2 526 NOK/GBP 16 221 — 16 221 USD/BRL -10 822 — -10 822 USD/CLP -18 970 — -18 970 USD/CNY 35 648 11 528 47 176 USD/EUR 140 008 -96 566 43 442 USD/INR -48 924 — -48 924 USD/MXN -5 939 — -5 939 USD/RUB -6 970 — -6 970 Currency pair - 2022 in thousands of € Total exposure Total derivatives Open position AUD/EUR 540 -8 866 -8 326 BRL/EUR 18 504 — 18 504 CLP/EUR 5 696 — 5 696 CZK/EUR 23 458 572 24 030 EUR/CNY -19 024 — -19 024 EUR/GBP -47 925 11 669 -36 256 EUR/INR -13 018 — -13 018 EUR/MYR -13 114 — -13 114 EUR/RON -34 186 — -34 186 EUR/RUB -46 298 — -46 298 IDR/USD -20 872 — -20 872 JPY/CNY 6 695 -2 285 4 410 USD/BRL -7 319 — -7 319 USD/CAD 14 569 -14 400 169 USD/CNY 43 243 — 43 243 USD/EUR 161 321 -126 037 35 284 USD/GBP 8 948 — 8 948 USD/INR -50 110 — -50 110 USD/MXN -6 641 — -6 641 - 231 - Bekaert Integrated Annual Report 2022 The reasonably possible changes used in this calculation were based on annualized volatility relating to the daily movement of the exchange rate of the reported year, with a 95% confidence interval. If rates had weakened/strengthened by such changes with all other variables constant, the result for the period before taxes would have been € 0.5 million lower/higher (€ 39.7 million higher or lower if ruble position is included) (2021: € 10.8 million). Currency sensitivity in relation to hedge accounting At 31 December 2022 the Group does not apply hedge accounting (also none at 31 December 2021). Interest-rate risk The Group is exposed to interest-rate risk, mainly on debt denominated in US dollar, Chinese renminbi and euro. To minimize the effects of interest-rate fluctuations in these regions, the Group manages the interest-rate risk for net debt denominated in the respective currencies of these countries separately. General guidelines are applied to cover interest-rate risk: •The target average life of long-term debt is four years. •The allocation of long-term debt between floating and fixed interest rates must remain within the defined limits approved by the Audit, Risk and Finance Committee. Group Treasury uses interest-rate swaps and cross-currency interest-rate swaps to ensure that the floating and fixed portions of the long-term debt remain within the defined limits. The following table summarizes the weighted average interest rates, excluding the effects of any swaps, at the balance sheet date. 2021 Long-term Fixed rate Floating rate Total Short-term Total US dollar 4.04% 2.37% 3.29% 1.31% 1.60% Chinese renminbi -% -% -% 3.62% 3.62% Euro 2.27% 1.48% 2.07% -% 2.07% Other 6.71% -% 6.71% 4.58% 4.58% Total 2.65% 1.53% 2.38% 2.41% 2.38% 2022 Long-term Fixed rate Floating rate Total Short-term Total US dollar 4.21% -% 4.21% 5.36% 5.25% Chinese renminbi -% -% -% 3.41% 3.41% Euro 1.51% 3.95% 2.12% -% 2.12% Other 4.59% -% 4.59% 7.23% 6.48% Total 1.71% 3.95% 2.24% 5.68% 3.02% - 232 - Bekaert Integrated Annual Report 2022 Interest-rate sensitivity analysis Interest-rate sensitivity of the financial debt As disclosed in note 6.18. ‘Interest-bearing debt’, the total financial debt of the Group as of 31 December 2022 amounted to € 1 236 million (2021: € 1 191.3 million). The following table shows the currency and interest rate profile, i.e. the percentage distribution of the total financial debt by currency and by type of interest rate (fixed, floating), including the effect of any swaps. 2021 Long-term Short-term Fixed rate Floating rate Floating rate Total US dollar 1.40% 1.10% 14.30% 16.80% Chinese renminbi -% -% 3.00% 3.00% Euro 52.70% 17.70% -% 70.40% Other 4.40% -% 5.40% 9.80% Total 58.50% 18.80% 22.70% 100.00% 2022 Long-term Short-term Fixed rate Floating rate Floating rate Total US dollar 1.50% -% 14.00% 15.50% Chinese renminbi -% -% 2.40% 2.40% Euro 55.10% 18.30% -% 73.40% Other 2.50% -% 6.20% 8.70% Total 59.10% 18.30% 22.60% 100.00% - 233 - Bekaert Integrated Annual Report 2022 On the basis of the annualized daily volatility of the 3-month Interbank Offered Rate in 2022 and 2021, the reasonable estimates of possible interest rate changes, with a 95% confidence interval, are set out for the main currencies in the table below. 2021 Interest rate at 31 December Reasonably possible changes (+/-) Chinese renminbi ¹ 2.21% 0.36% Euro -% -% US dollar 0.21% 0.17% 2022 Interest rate at 31 December Reasonably possible changes (+/-) Chinese renminbi ¹ 2.16% 0.36% Euro 2.22% 0.37% US dollar 4.77% 3.20% ¹ For the Chinese renminbi, the interest rate is the PBOC benchmark interest rate for lending up to six months. Applying the estimated possible changes in the interest rates to the floating rated debt, with all other variables constant, the result for the period before tax would have been € 4.6 million higher/lower (2021: € 3.5 million higher/lower). Interest-rate sensitivity in relation to hedge accounting At 31 December 2022, the Group does not apply hedge accounting (2021: none) and no sensitivity analysis was required. Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities and certain financing activities, including deposits with banks and financial institutions. In respect of its operating activities, the Group has a credit policy in place, which takes into account the risk profiles of the customers in terms of the market segment to which they belong. Based on activity platform, product sector and geographical area, a credit risk analysis is made of customers and a decision is taken regarding the covering of the credit risk. The exposure to credit risk is monitored on an ongoing basis and credit evaluations are made of all customers. In terms of the characteristics of some steel wire activities with a limited number of global customers, the concentration risk is closely monitored and, in combination with the existing credit policy, appropriate action is taken when needed. In accordance with IFRS 8 §34, none of the specified disclosures on individual customers (or groups of customers under common control) are required, since none of the Group’s customers accounts for more than 10% of its revenues. At 31 December 2022, 64.4% (2021: 65.4%) of the credit risk exposure was covered by credit insurance policies and by trade finance techniques such as letters of credit, cash against documents and bank guarantees. In respect of financing activities, transactions are normally concluded with counterparties that have at least an A credit rating. There are also limits allocated to each counterparty which depend on their rating. Due to this approach, the Group considers the risk of counterparty default to be limited in both operating and financing activities. In accordance with the IFRS 9 ‘expected credit loss’ model for financial assets, a general bad debt allowance is made for trade receivables to cover the unknown bad debt risk at each reporting date. This general allowance constitutes of a percentage on outstanding trade receivables at each reporting date. The percentages reflect the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at reporting date about past events, current conditions and forecasts of future economic conditions and are reviewed year-on-year. - 234 - Bekaert Integrated Annual Report 2022 Liquidity risk Liquidity risk is the risk that the Group will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding. To ensure liquidity and financial flexibility at all times, the Group, in addition to its available cash, has several uncommitted short-term credit lines at its disposal in the major currencies and in amounts considered adequate for current and near-future financing needs. These facilities are generally of the mixed type and may be utilized, for example, for advances, overdrafts, acceptances and discounting. The Group also has committed credit facilities at its disposal up to a maximum equivalent of € 200 million (2021: € 200 million) at floating interest rates with fixed margins. At year-end, nothing was outstanding under these facilities (2021: nil). In addition, the Group has a commercial paper and medium-term note program available for a maximum of € 123.9 million (2021: € 123.9 million). At the end of 2022, no commercial paper notes were outstanding (2021: nil). At year-end, no external bank debt was subject to debt covenants (2021: nil). The Group has discounted outstanding receivables per 31 December 2022 for a total amount of € 267.5 million (2021: € 224.8 million) under its existing factoring agreements. Under these agreements, substantially all risks and rewards of ownership of the receivables are transferred to the factor. As a consequence, at the end of 2022, the factored receivables are derecognized. The following table shows the Group’s contractually agreed (undiscounted) outflows in relation to financial liabilities (including financial liabilities reclassified as liabilities associated with assets held for sale). Only net interest payments and principal repayments are included. 2021 in thousands of € 2022 2023 2024-2026 2027 and thereafter Financial liabilities - principal Trade payables -1 062 185 — — — Other payables -9 122 -142 — — Interest-bearing debt -240 525 -224 519 -494 605 -248 279 Derivatives - gross settled -109 565 — — — Financial liabilities - interests Trade and other payables — — — — Interest-bearing debt -22 087 -18 049 -40 723 -5 778 Derivatives - net settled -343 -272 -309 — Derivatives - gross settled -2 805 — — — Total undiscounted cash flow -1 446 632 -242 982 -535 637 -254 057 2022 in thousands of € 2023 2024 2025-2027 2028 and thereafter Financial liabilities - principal Trade payables -921 113 — — — Other payables -14 362 -150 — — Interest-bearing debt -500 588 -95 656 -619 407 -20 345 Derivatives - gross settled -121 843 — — — Financial liabilities - interests Trade and other payables — — — — Interest-bearing debt -27 705 -19 501 -33 571 — Derivatives - net settled — — — — Derivatives - gross settled -2 800 — — — Total undiscounted cash flow -1 588 410 -115 307 -652 978 -20 345 All instruments held at the reporting date and for which payments had been contractually agreed are included. Forecasted data relating to future, new liabilities have not been included. Amounts in foreign currencies have been translated at the closing rate at the reporting date. The variable interest payments arising from the financial instruments were calculated using the applicable forward interest rates. - 235 - Bekaert Integrated Annual Report 2022 Hedging All financial derivatives the Group enters into, relate to an underlying transaction or forecasted exposure. In function of the expected impact on the income statement and if the stringent IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied. The following sections describe the transactions whereby hedge accounting is applied and transactions which do not qualify for hedge accounting but constitute an economic hedge. Hedge accounting The Group did not apply hedge accounting in 2022 (2021: none) so there were no fair value hedges nor cash flow hedges in 2022 (2021: none). Economic hedging and other derivatives The Group also uses financial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defined in IFRS 9 ‘Financial Instruments’ are not met or because the Group has elected not to apply hedge accounting. These derivatives are treated as free-standing instruments held for trading. •The Group uses cross-currency interest-rate swaps and forward-exchange contracts to hedge the currency risk on intercompany loans involving two entities with different functional currencies. Until now, the Group has elected not to apply hedge accounting as defined in IFRS 9. Since nearly all cross-currency interest-rate swaps are floating-to-floating, the fair value gain or loss on the financial instruments is expected to offset the foreign-exchange result arising from the remeasurement of the intercompany loans. The major currencies involved are US dollar and British pound. •To manage its interest-rate exposure, the Group uses interest-rate swaps to convert its floating-rate debt to a fixed rate debt. The Group entered into interest-rate swaps for € 196.5 million to hedge the Schuldschein loans with floating interest rates (2021: € 196.5 million). •The Group uses forward exchange contracts to limit currency risks on its various operating and financing activities. For all forward exchange contracts, the fair value change is recorded immediately under other financial income and expenses. •In June 2019, the Group entered into a renewable energy Virtual Power Purchase Agreement (VPPA) for a wind generation facility located in North America. In addition, in July 2022 the group entered into an additional contract for a solar project located in Texas (North America). The characteristics of the contracts are such that the VPPA constitutes a derivative in accordance with IFRS 9. The fair value of the derivative amounted to € 7.5 million at 31 December 2022 (2021: € 13.2 million), as a result of which a loss of € 5.7 million was recognized in other financial costs. Derivatives The following table analyzes the notional amounts of the derivatives according to their maturity date. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31 December 2022, Bekaert does not apply hedge accounting 2021 in thousands of € Due within one year Due between one and 5 years Due after more than 5 years Held for trading Forward exchange contracts 67 716 — — Interest-rate swaps — 196 500 — Cross-currency interest-rate swaps 128 947 — — Conversion derivative — — — Total 196 663 196 500 — 2022 in thousands of € Due within one year Due between one and 5 years Due after more than 5 years Held for trading Forward exchange contracts 65 493 — — Interest-rate swaps 116 000 80 500 — Cross-currency interest-rate swaps 121 843 — — Total 303 336 80 500 — - 236 - Bekaert Integrated Annual Report 2022 The following table summarizes the fair values of the various derivatives carried. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31 December 2022, Bekaert does not apply hedge accounting: Fair value of current and non-current derivatives Assets Liabilities in thousands of € 2021 2022 2021 2022 Financial instruments Held for trading Forward exchange contracts 805 2 833 654 1 333 Interest-rate swaps — 7 178 118 — Cross-currency interest-rate swaps 610 2 860 2 255 215 Conversion derivative — — — Other derivative financial assets 13 244 7 500 — — Total 14 659 20 372 3 026 1 548 Non-current 13 244 14 678 703 — Current 1 416 5 694 2 324 1 548 Total 14 659 20 372 3 026 1 548 In 2022, the other derivative financial assets related to the VPPA derivatives for € 7.5 million (2021: € 13.2 million). The Group has no financial assets and financial liabilities that are presented net in the balance sheet due to set-off in accordance with IAS 32. The Group enters into ISDA (International Swaps and Derivatives Association) master agreements with its counterparties for some of its derivatives, allowing the counterparties to net derivative assets with derivative liabilities when settling in case of default. Under these agreements, no collateral is being exchanged, neither in cash nor in securities. The potential effect of the netting of derivative contracts is shown below: Effect of enforceable netting agreements Assets Liabilities in thousands of € 2021 2022 2021 2022 Total derivatives recognized in balance sheet 14 659 20 372 3 026 1 548 Enforceable netting -610 -215 -610 -215 Net amounts 14 049 20 157 2 416 1 333 Additional disclosures on financial instruments by class and category The following tables list the different classes of financial assets and liabilities with their carrying amounts and their respective fair values, analyzed by their measurement category in accordance with IFRS 9 ‘Financial Instruments’. Cash and cash equivalents, short-term deposits, trade and other receivables, bills of exchange received, loans and receivables primarily have short terms to maturity; hence, their carrying amounts at the reporting date approximate the fair values. Trade and other payables also generally have short terms to maturity and, hence, their carrying amounts also approximate their fair values. The Group has no exposure to collateralized debt obligations (CDOs). The following abbreviations are used for the IFRS 9 categories: Abbreviation Category in accordance with IFRS 9 AC Financial assets or financial liabilities at amortized cost FVTOCI/Eq Equity instruments designated as at fair value through OCI FVTPL/Mnd Financial assets mandatorily measured at fair value through profit or loss FVTPL Financial liabilities measured as at fair value through profit or loss - 237 - Bekaert Integrated Annual Report 2022 Carrying amount vs fair value 31 December 2021 31 December 2022 in thousands of € Category in accordance with IFRS 9 Carrying amount Fair value Carrying amount Fair value Assets Non-current financial assets - Financial & other receivables and cash guarantees AC 12 549 12 549 12 211 12 211 - Equity investments FVTOCI/Eq 20 081 20 081 26 023 26 023 - Derivatives - Held for trading FVTPL/Mnd 13 244 13 244 14 678 14 678 Current financial assets - Financial receivables and cash guarantees AC 6 475 6 475 6 352 6 352 - Cash and cash equivalents AC 677 270 677 270 728 095 728 095 - Short term deposits AC 80 058 80 058 4 766 4 766 - Trade receivables AC 750 666 750 666 730 786 730 786 - Bills of exchange received AC 41 274 41 274 39 764 39 764 - Other current assets - Other receivables AC 43 437 43 437 24 732 24 732 - Derivatives - Held for trading FVTPL/Mnd 1 416 1 416 5 694 5 694 Liabilities Non-current interest-bearing debt - Lease liabilities AC 56 425 56 425 57 203 57 203 - Cash guarantees received AC 204 204 210 210 - Credit institutions AC 177 047 177 047 146 413 146 413 - Schuldschein loans AC 319 905 319 905 131 582 131 582 - Bonds AC 400 000 395 074 400 000 347 800 Current interest-bearing debt - Lease liabilities AC 20 219 20 219 20 002 20 002 - Credit institutions AC 217 523 217 523 291 989 291 989 - Schuldschein loans AC — — 188 598 188 598 - Bonds AC — — — — Other non-current liabilities - Other derivatives FVTPL 118 118 — — - Other payables AC 142 142 150 150 Trade payables AC 1 062 185 1 062 185 921 113 921 113 - 238 - Bekaert Integrated Annual Report 2022 Carrying amount vs fair value 31 December 2021 31 December 2022 in thousands of € Category in accordance with IFRS 9 Carrying amount Fair value Carrying amount Fair value Other current liabilities - Conversion option FVTPL — — — — - Other payables AC 33 476 33 476 38 459 38 459 - Derivatives - Held for trading FVTPL 2 324 2 324 1 548 1 548 Aggregated by category in accordance with IFRS 9 Financial assets AC 1 611 729 1 611 729 1 546 706 1 546 706 FVTOCI/Eq 20 081 20 081 26 023 26 023 FVTPL/Mnd 14 659 14 659 20 372 20 372 Financial liabilities AC 2 287 127 2 282 201 2 195 718 2 143 518 FVTPL 2 441 2 441 1 548 1 548 The fair value of all financial instruments measured at amortized cost in the balance sheet has been determined using level-2 fair value measurement techniques. For most financial instruments the carrying amount approximates the fair value. Financial instruments by fair value measurement hierarchy The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways: •‘Level 1’ fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in these active markets for identical assets and liabilities. This mainly relates to financial assets at fair value through other comprehensive income such as the investment in Shougang Concord Century Holdings Ltd (see note 6.6. ‘Other non-current assets’). •‘Level 2’ fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward-exchange rates and yield curves derived from quoted interest rates with matching maturities. Interest-rate swaps are measured at •the present value of future cash flows estimated and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward-exchange rates, quoted interest rates and applicable yield curves derived therefrom. •‘Level 3’ fair value measurement: the fair value of the remaining financial assets and financial liabilities is derived from valuation techniques which include inputs that are not based on observable market data. At the end of 2022, Bekaert had two types of financial instruments, namely the VPPA agreement and several equity investments, for which the fair value measurement can be characterized as ‘level 3’. The fair value of the VPPA contract is determined using a Monte Carlo valuation model. The main factors determining the fair value of the VPPA agreement are the discount rate (level 2), the estimated energy output based on wind or solar studies in the area and the off-peak/on-peak price volatility (level 3). The fair value of the main equity investment (Xinju Metal Products Co Ltd) is determined using a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption. The main factors determining the fair value are the discount rate and EBITDA. - 239 - Bekaert Integrated Annual Report 2022 Derivative in VPPA arrangement 31 December 2022 Level 2 inputs Discount rate Weighted average of investment grade corporate bond curves Level 3 inputs Power forward sensitivity Estimated on peak/off peak price forecasts Production sensitivity Based on wind / solar studies in the area Outcome of the model (in thousands of €) Fair value of the VPPA derivative 7500 The carrying amount (i.e. the fair value) of the level-3 liabilities/(assets) has evolved as follows: Level-3 Financial liabilities / (assets) in thousands of € 2021 2022 At 1 January -10 682 -23 561 (Expenditure) / Disposal -863 -8 537 (Gain) / loss in fair value through OCI -1 916 -555 (Gain) / loss in fair value through P&L -10 100 5 743 At 31 December -23 561 -26 910 Gains and losses in fair value are reported in other financial income and expenses (€ 5.7 million), except for the equity investments where fair value changes are carried through other comprehensive income (€ -0.6 million) (see note 6.6. ‘Other non-current assets’). The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for King Plains. Sensitivity analysis King Plains in thousands of € Change Impact on VPPA derivative Power forward sensitivity +10% increased by 188 -10% decreased by -281 Production sensitivity +5% increased by 375 -5% decreased by -469 The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for Rockhound Sensitivity analysis Rockhound in thousands of € Change Impact on VPPA derivative Power forward sensitivity +10% increased by 2 344 -10% decreased by -2 438 Production sensitivity +5% increased by 750 -5% decreased by -750 The sensitivity of the fair value calculation of the equity investment in Xinju Metal Products Co Ltd (€ 6.5 million) is shown below: •If EBITDA would be CNY 4.0 million lower in all periods of the business plan, the fair value would be € 5.5 million; •If the discount factor would be 1% higher, the fair value would be € 6.0 million; •If EBITDA would be CNY 4.0 million lower in all years of the business plan and the discount factor would be 1% higher, the fair value would be € 5.1 million. The following table provides an analysis of financial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above: 2021 in thousands of € Level 1 Level 2 Level 3 Total Financial assets mandatorily measured as at fair value through profit or loss Derivative financial assets — 1 416 13 244 14 659 Equity instruments designated as at fair value through OCI Equity investments 9 764 — 10 317 20 081 Total assets 9 764 1 416 23 561 34 741 Financial liabilities held for trading Other derivative financial liabilities — 3 026 — 3 026 Total liabilities — 3 026 — 3 026 - 240 - Bekaert Integrated Annual Report 2022 2022 in thousands of € Level 1 Level 2 Level 3 Total Financial assets mandatorily measured as at fair value through profit or loss Derivative financial assets — 12 872 7 500 20 372 Equity instruments designated as at fair value through OCI Equity investments ¹ 6 614 — 19 410 26 023 Total assets 6 614 12 872 26 910 46 395 Financial liabilities held for trading Other derivative financial liabilities — 1 548 — 1 548 Total liabilities — 1 548 — 1 548 Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the net debt and equity balance. The Group’s overall strategy remains unchanged from 2021. The capital structure of the Group consists of net debt, as defined in note 6.18. ‘Interest-bearing debt’, and equity (both attributable to equity holders of Bekaert and to non-controlling interests). Gearing ratio The Group’s Audit, Risk and Finance Committee reviews the capital structure on a semi-annual basis. As part of this review, the committee assesses the cost of capital and the risks associated with each class of capital. The Group has a target gearing ratio of 50% determined as the proportion of net debt to equity. To realize this target (excluding the impact of IFRS 16 ‘Leases’), the Group is following systematically a number of guidelines, a.o. •strict cost control to improve profitability; •managing working capital levels by: –operational excellence; –cash collection actions; –better aligned payment terms; –optimized factoring usage; •strict control of capital expenditure; •active business portfolio management, including M&A and divestments. Gearing in thousands of € 2021 2022 Net debt 417 329 487 118 Equity¹ 2 097 663 2 229 556 Net debt to equity ratio 19.9% 21.8% ¹ See note 2.8 'Restatement effects' - 241 - Bekaert Integrated Annual Report 2022 7.3. Contingencies, commitments, secured liabilities and assets pledged as security As at 31 December, the important contingencies and commitments were: in thousands of € 2021 2022 Contingent liabilities 4 200 6 840 Commitments to purchase fixed assets 48 984 67 935 Commitments to invest in venture capital funds 3 269 2 600 At year-end 2022, there were no outstanding bank guarantees linked to environmental obligations. Apart from the leases, there are no restrictions to realize assets or settle liabilities. The lease liabilities are effectively secured as the rights to the leased assets recognized in the financial statements revert to the lessor in the event of default. The contingencies, commitments and assets pledged as security in joint ventures are disclosed in note 6.5.’Investments in joint ventures and associates’. 7.4. Related parties Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. Transactions with other related parties are disclosed below. Transactions with joint ventures in thousands of € 2021 2022 Sales of goods 13 231 21 951 Purchases of goods 18 509 21 152 Services rendered 81 64 Royalties and management fees received 14 981 18 374 Interest and similar income — 6 Dividends received 44 847 42 508 Outstanding balances with joint ventures in thousands of € 2021 2022 Trade receivables 6 116 6 592 Other current receivables ¹ 27 452 5 881 Trade payables 4 945 3 557 Other current payables 54 — ¹ The other current receivables are at year-end 2021 significantly higher due to outstanding receivables for dividends from the Brazilian joint ventures (€ 27.5 million). None of the related parties have entered into any other transactions with the Group that meet the requirements of IAS 24 ‘Related Party Disclosures’. The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. Advances have been received for ongoing capex projects. More information on transactions with joint ventures are disclosed in note 6.5. ‘Investments in joint ventures and associates’. - 242 - Bekaert Integrated Annual Report 2022 Key Management includes the Board of Directors, the CEO, the members of the Bekaert Group Executive (BGE) and the Senior Vice Presidents (see last page of this report). Key Management remuneration in thousands of € 2021 2022 Number of persons 34 32 Short-term employee benefits Basic remuneration 8 407 8 368 Variable remuneration 4 126 6 314 Remuneration as directors of subsidiaries 511 513 Post-employment benefits Defined-benefit pension plans 327 190 Defined-contribution pension plans 1 551 1 594 Share-based payment benefits 11 719 6 467 Total gross remuneration 26 641 23 446 Average gross remuneration per person 784 733 Number of performance share units granted (cash-settled and equity-settled) 131 442 111 135 Number of matching share units to be granted 9 112 13 757 Number of shares granted 10 940 12 080 The disclosures relating to the Belgian Corporate Governance Code are included in the Corporate Governance Statement of this annual report. 7.5. Events after the balance sheet date •Since 1 January 2023, a total of 199 931 treasury shares have been disposed of following the exercise of stock options under the stock option plans SOP 2010-2014 and SOP 2015-2017 and a total of 213 317 treasury shares following the vesting of performance share units under the Performance Share Plan. •On 24 February 2023, The Company’s capital was reduced from € 173 737 000 to € 167 736 414 following the cancellation of 2 038 935 treasury shares. These shares were purchased by Kepler Cheuvreux on behalf of Bekaert in the framework of the share buyback program that started on 18 March 2022. On 2 March 2023, the capital was increased with € 586 to round up the capital without the issue of new shares. Therefore, as of 2 March 2023, the capital of the Company amounts to € 167 737 000 and is represented by 56 990 317 shares. •On 1 March 2023, Bekaert announced the continuation of its share buyback program for a total amount of up to € 120 million over a period of up to twelve months and the immediate start of the fifth tranche of the program for an aggregate amount of up to € 30 million. •On 1 March 2023, Bekaert announced the sale of its Steel Wire Solutions businesses in Chile en Peru to its current partners. The transaction, with a total enterprise value of approximately US$ 350 million and resulting in net proceeds for Bekaert’s stake of US$ 136 million, is expected to close in 2023, subject to applicable regulatory approvals and customary closing conditions. The transaction covers the production and distribution facilities of the Steel Wire Solutions activities in Chile and Peru. These facilities manufacture, sell, and distribute steel wire products primarily for construction, agricultural fencing, mining, and industrial applications. The intended transaction regards the sale of the shares held by Bekaert in the following entities: Industrias Chilenas de Alambre-Inchalam SA in Talcahuano, Chile; and Prodalam SA in Santiago, Chile; along with their subsidiaries in Chile and Peru. Bekaert currently holds 52% of the shares in the Chilean entities and 38% of the shares in the Peruvian entities. The transaction excludes Bekaert’s wholly owned Bridon-Bekaert ropes entities in Chile and Peru. •Annie Xu-Huhmann succeeded Arnaud Lesschaeve as Divisional CEO Rubber Reinforcement with effect as of 1 March 2023. •A grant of 139 141 equity settled performance share units was made on 10 March 2023 under the terms of the Performance Share Plan. The - 243 - Bekaert Integrated Annual Report 2022 •granted performance share units represented a fair value of € 5.9 million. •A grant of 28 472 cash-settled performance share units was made on 10 March 2023 under the terms of the PSU A&L and PSU USA Performance Share Plan. The granted performance share units represented a fair value of € 1.2 million. 7.6. Services provided by the statutory auditor and related persons During 2022, the statutory auditor and persons professionally related to him performed additional services for fees amounting to € 191 088. These fees essentially relate to further assurance services (€ 150 588), tax advisory services (€ 6 500) and other non-audit services (€ 34 000). The additional services were approved by the Audit, Risk and Finance Committee. The audit fees for NV Bekaert SA and its subsidiaries amounted to € 2 493 708. - 244 - Bekaert Integrated Annual Report 2022 7.7. Subsidiaries, joint ventures and associates Companies forming part of the Group as at 31 December 2022 Subsidiaries Industrial companies Address FC ¹ % ² EMEA Bekaert Advanced Cords Aalter NV Aalter, Belgium EUR 100 Bekaert Bohumín sro Bohumín, Czech Republic CZK 100 Bekaert Bradford UK Ltd Bradford, United Kingdom GBP 100 Bekaert Combustion Technology BV Assen, Netherlands EUR 100 Bekaert Heating Romania SRL Negoiesti, Brazi Commune, Romania RON 100 Bekaert Hlohovec as Hlohovec, Slovakia EUR 100 Bekaert Izmit Çelik Kord Sanayi ve Ticaret AS Izmit, Turkey EUR 100 Bekaert Kartepe Çelik Kord Sanayi ve Ticaret AS Kartepe, Turkey EUR 100 Bekaert Petrovice sro Petrovice, Czech Republic CZK 100 Bekaert Sardegna SpA Assemini, Italy EUR 100 Bekaert Slatina SRL Slatina, Romania RON 100 Bekaert Slovakia sro Sládkovičovo, Slovakia EUR 100 Bekintex NV Wetteren, Belgium EUR 100 Bridon International GmbH Gelsenkirchen, Germany EUR 100 Bridon International Ltd Doncaster, United Kingdom GBP 100 Industrias del Ubierna SA Burgos, Spain EUR 100 OOO Bekaert Lipetsk Gryazi, Russian Federation RUB 100 VisionTek Engineering Srl Rovereto, Italy EUR 100 North America Bekaert Corporation Wilmington (Delaware), United States USD 100 Bridon-American Corporation New York, United States USD 100 Latin America Acma SA Santiago, Chile CLP 52 Acmanet SA Talcahuano, Chile CLP 52 BBRG - Osasco Cabos Ltda São Paulo, Brazil BRL 100 BIA Alambres Costa Rica SA San José-Santa Ana, Costa Rica USD 58 Ideal Alambrec SA Quito, Ecuador USD 58 - 245 - Bekaert Integrated Annual Report 2022 Industrial companies Address FC ¹ % ² Industrias Chilenas de Alambre - Inchalam SA Talcahuano, Chile CLP 52 Prodinsa SA Maipú, Chile CLP 100 Productora de Alambres Colombianos Proalco SAS Bogotá, Colombia COP 40 Productos de Acero Cassadó SA Callao, Peru USD 38 Vicson SA Valencia, Venezuela USD 80 Asia Pacific Bekaert Applied Material Technology (Shanghai) Co Ltd Shanghai, China CNY 100 Bekaert Binjiang Steel Cord Co Ltd Jiangyin (Jiangsu province), China CNY 90 Bekaert (China) Technology Research and Development Co Ltd Jiangyin (Jiangsu province), China CNY 100 Bekaert (Chongqing) Steel Cord Co Ltd Chongqing, China CNY 100 Bekaert Industries Pvt Ltd Taluka Shirur, District Pune, India INR 100 Bekaert (Jining) Steel Cord Co Ltd Jining City, Yanzhou district (Shandong Province), China CNY 60 Bekaert Jiangyin Wire Products Co Ltd Jiangyin (Jiangsu province), China CNY 100 Bekaert Mukand Wire Industries Pvt Ltd Pune, India INR 100 Bekaert New Materials (Suzhou) Co Ltd Suzhou (Jiangsu province), China CNY 100 Bekaert (Qingdao) Wire Products Co Ltd Qingdao (Shandong province), China CNY 100 Bekaert (Shandong) Tire Cord Co Ltd Weihai (Shandong province), China CNY 100 Bekaert (Shenyang) Advanced Cords Co Ltd Shenyang (Liaoning province), China CNY 100 Bekaert Shenyang Advanced Products Co Ltd Shenyang (Liaoning province), China CNY 100 Bekaert Toko Metal Fiber Co Ltd Tokyo, Japan JPY 70 Bekaert Vietnam Co Ltd Son Tinh District, Quang Ngai Province, Vietnam USD 100 Bekaert Wire Ropes Pty Ltd Mayfield East, Australia AUD 100 Bridon (Hangzhou) Ropes Co Ltd Hangzhou (Zhejiang province), China CNY 100 China Bekaert Steel Cord Co Ltd Jiangyin (Jiangsu province), China CNY 90 PT Bekaert Indonesia Karawang, Indonesia USD 100 PT Bekaert Wire Indonesia Karawang, Indonesia USD 100 PT Bridon Bekasi, West Java, Indonesia USD 100 ¹ Functional currency ² Financial interest percentage - 246 - Bekaert Integrated Annual Report 2022 Sales offices, warehouses and others Address FC ¹ % ² EMEA Bekaert Emirates LLC Dubai, United Arab Emirates AED 49 Bekaert Figline SpA Milano, Italy EUR 100 Bekaert France SAS Lille, France EUR 100 Bekaert Gesellschaft mbH Vienna, Austria EUR 100 Bekaert GmbH Neu-Anspach, Germany EUR 100 Bekaert Middle East LLC Dubai, United Arab Emirates AED 49 Bekaert Norge AS Oslo, Norway NOK 100 Bekaert Poland Sp z oo Warsaw, Poland PLN 100 Bekaert (Schweiz) AG Baden, Switzerland CHF 100 Bekaert Svenska AB Gothenburg, Sweden SEK 100 Bridon-Bekaert ScanRope AS Tonsberg, Norway NOK 100 Bridon Middle East FZE Sharjah, United Arab Emirates AED 100 Bridon Scheme Trustees Ltd Doncaster, United Kingdom GBP 100 British Ropes Ltd Doncaster, United Kingdom GBP 100 Leon Bekaert SpA Milano, Italy EUR 100 OOO Bekaert Wire Moscow, Russian Federation RUB 100 Rylands-Whitecross Ltd Bradford, United Kingdom GBP 100 Scheldestroom NV Zwevegem, Belgium EUR 100 Twil Company Bradford, United Kingdom GBP 100 North America Wire Rope Industries Ltd/Industries de Câbles d’Acier Ltée Montréal, Canada CAD 100 Latin America Bekaert Guatemala SA Ciudad de Guatemala, Guatemala GTQ 58 Bekaert Specialty Films de Mexico SA de CV Monterrey, Mexico MXN 100 Bekaert Trade Mexico S de RL de CV Mexico City, Mexico MXN 100 Procables SA Cercado de Lima, Peru PEN 96 Prodac Contrata SAC Callao, Peru USD 38 Prodalam SA Santiago, Chile CLP 52 Prodicom Selva SAC Ucayali, Peru USD 38 Prodimin SAC Lima, Peru USD 38 Specialty Films de Services Company SA de CV Monterrey, Mexico MXN 100 - 247 - Bekaert Integrated Annual Report 2022 Sales offices, warehouses and others Address FC ¹ % ² Asia Pacific Bekaert Japan Co Ltd Tokyo, Japan JPY 100 Bekaert Korea Ltd Seoul, South-Korea KRW 100 Bekaert Malaysia Sdn Bhd Kuala Lumpur, Malaysia MYR 100 Bekaert Management (Shanghai) Co Ltd Shanghai, China CNY 100 Bekaert Shah Alam Sdn Bhd Kuala Lumpur, Malaysia MYR 100 Bekaert Singapore Pte Ltd Singapore SGD 100 Bekaert Taiwan Co Ltd Taipei City TWD 100 Bekaert (Thailand) Co Ltd Tambol Pluakdaeng, Amphur Pluakdaeng,Thailand USD 100 BOSFA Pty Ltd Mayfield East, Australia AUD 100 Bridon Hong Kong Ltd Hong Kong, China HKD 100 Bridon New Zealand Ltd Aukland, New Zealand NZD 100 Bridon Singapore (Pte) Ltd Singapore SGD 100 Bridon (South East Asia) Ltd Hong Kong, China HKD 100 PT Bekaert Trade Indonesia Karawang, Indonesia USD 100 ¹ Functional currency ² Financial interest percentage - 248 - Bekaert Integrated Annual Report 2022 Financial companies Address FC ¹ % ² Acma Inversiones SA Santiago, Chile CLP 100 BBRG Finance (UK) Ltd Doncaster, United Kingdom EUR 100 Becare DAC Dublin, Ireland EUR 100 Bekaert Building Products Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Carding Solutions Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Coördinatiecentrum NV Zwevegem, Belgium EUR 100 Bekaert do Brasil Ltda Contagem, Brazil BRL 100 Bekaert Holding Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Ibérica Holding SL Burgos, Spain EUR 100 Bekaert Ideal SL Burgos, Spain EUR 80 Bekaert Investments NV Zwevegem, Belgium EUR 100 Bekaert Investments Italia SpA Milano, Italy EUR 100 Bekaert North America Management Corporation Wilmington (Delaware), United States USD 100 Bekaert Services Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Singapore Holding Pte Ltd Singapore SGD 100 Bekaert Specialty Wire Products Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Stainless Products Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Steel Cord Products Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Strategic Partnerships Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Wire Products Hong Kong Ltd Hong Kong, China EUR 100 Bekaert Wire Rope Industry NV Zwevegem, Belgium EUR 100 Bridon-Bekaert Ropes Group Ltd Doncaster, United Kingdom EUR 100 Bridon Holdings Ltd Doncaster, United Kingdom GBP 100 Bridon Ltd Doncaster, United Kingdom GBP 100 Industrias Acmanet Ltda Talcahuano, Chile CLP 52 InverVicson SA Valencia, Venezuela USD 80 Procercos SA Talcahuano, Chile CLP 52 - 249 - Bekaert Integrated Annual Report 2022 Joint ventures Industrial companies Address FC ¹ % ² Latin America Agro-Bekaert Colombia SAS Malambo - Atlántico, Colombia COP 40 Belgo Bekaert Arames Ltda Contagem, Brazil BRL 45 BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda Vespasiano, Brazil BRL 45 Servicios Ideal AGF Inttegra Cia Ltda Quito, Ecuador USD 29 Sales offices, warehouses and others Address FC ¹ % ² EMEA Netlon Sentinel Ltd Blackburn, United Kingdom GBP 50 Asia Pacific Bekaert Engineering (India) Pvt Ltd New Delhi, India INR 40 Financial companies Address FC ¹ % ² EMEA Agro - Bekaert Springs SL Burgos, Spain EUR 40 ¹ Functional currency ² Financial interest percentage Changes in 2022 1. Subsidiaries acquired through business combinations Subsidiaries Address % ¹ VisionTek Engineering Srl Rovereto, Italy 100 2. Mergers Subsidiaries Merged into Sujetar del Peru SAC Productos de Acero Cassadó SA 3. Liquidated Companies Address Bekaert AS Hellerup, Denmark Bekaert Architectural Design Consulting (Shanghai) Co Ltd Shanghai, China Bekaert Heating Technology (Suzhou) Co Ltd Taicang City (Jiangsu province), China In accordance with Belgian legislation, the table below lists the registered numbers of the Belgian companies. Companies Company number Bekaert Advanced Cords Aalter NV BTW BE 0645.654.071 RPR Gent, division Gent Bekaert Coördinatiecentrum NV BTW BE 0426.824.150 RPR Gent, division Kortrijk Bekaert Investments NV BTW BE 0406.207.096 RPR Gent, division Kortrijk Bekaert Wire Rope Industry NV BTW BE 0550.983.358 RPR Gent, division Kortrijk Bekintex NV BTW BE 0452.746.609 RPR Gent, division Dendermonde NV Bekaert SA BTW BE 0405.388.536 RPR Gent, division Kortrijk Scheldestroom NV BTW BE 0403.676.188 RPR Gent, division Kortrijk ¹ Financial interest percentage - 250 - Bekaert Integrated Annual Report 2022 Parent company information Annual report of the Board of Directors and financial statements of NV Bekaert SA The report of the Board of Directors and the financial statements of the parent company, NV Bekaert SA (the ‘Company’), are presented below in a condensed form. The report of the Board of Directors ex Article 3:6 of the Belgian Companies Code is not included in full in the report ex Article 3:32. Copies of the full Directors’ report and of the full financial statements of the Company are available free of charge upon request: NV Bekaert SA Bekaertstraat 2 BE-8550 Zwevegem Belgium www.bekaert.com The statutory auditor has issued an unqualified report on the financial statements of the Company. The Directors’ report and financial statements of the Company, together with the statutory auditor’s report, will be deposited with the National Bank of Belgium as provided by law. - 251 - Bekaert Integrated Annual Report 2022 Condensed income statement in thousands of € - Year ended 31 December 2021 2022 Sales 415 161 587 208 Operating result before non-recurring items 58 418 95 724 Non-recurring operational items -145 -546 Operating result after non-recurring items 58 273 95 178 Financial result before non-recurring items 67 831 392 597 Non-recurring financial items -1 158 -2 523 Financial result after non-recurring items 66 673 390 074 Profit before income taxes 124 945 485 252 Income taxes 13 997 2 346 Result for the period 138 943 487 598 Condensed balance sheet after profit appropriation in thousands of € - 31 December 2021 2022 Fixed assets 2 001 872 2 010 406 Intangible fixed assets 71 411 79 425 Tangible fixed assets 29 349 31 106 Financial fixed assets 1 901 112 1 899 875 Current assets 413 107 579 856 Total assets 2 414 979 2 590 262 Shareholders' equity 1 010 924 1 359 133 Share capital 177 923 173 737 Share premium 38 850 39 519 Revaluation surplus 1 995 1 995 Statutory reserve 17 792 17 792 Unavailable reserve 94 713 139 317 Reserves available for distribution, retained earnings 679 651 986 773 Provisions and deferred taxes 78 866 54 535 Creditors 1 325 189 1 176 594 Amounts payable after one year 845 650 656 650 Amounts payable within one year 479 539 519 944 Total equity and liabilities 2 414 979 2 590 262 Valuation principles Valuation and foreign currency translation principles applied in the parent company’s financial statements are based on Belgian accounting legislation. - 252 - Bekaert Integrated Annual Report 2022 Summary of the annual report of the Board of Directors The Belgium-based entity’s sales amounted to € 587.2 million, an increase of 41% compared to 2021. The operating profit before non-recurring items was € 95.7 million, compared to € 58.4 million last year. The increase of the operating result was a combined effect of higher sales volumes, higher margins and royalties and reversal of provisions. Non-recurring items included in the operating result amounted to € -0.5 million in 2022 (mainly accelerated depreciation and realization of tangible fixed assets), compared to € -0.1 million last year. The financial result before non-recurring items was € 392.6 million compared to € 67.8 million last year. The higher dividend income in 2022 was the main element explaining this evolution. The non-recurring financial items amounted to € -2.5 million in 2022, against € -1.2 million in the previous year, which was in 2022 mainly driven by write-downs on financial receivables. The income taxes of € 2.3 million were positive due to tax credit receivable on intangible fixed assets. This led to a result for the period of € 487.6 million compared with € 138.9 million in 2021. Environmental programs The provisions for environmental programs decreased to € 15.9 million (2021: € 16.5 million). Information on research and development Information on the company’s research and development activities can be found in the ‘Knowledge’ section in the ‘Strategy and performance’ chapter. - 253 - Bekaert Integrated Annual Report 2022 Interests in share capital In connection with the entry into force of the Act of 2 May 2007 on the disclosure of significant participations (the Transparency Act), the Company has in its Articles of Association set the thresholds of 3% and 7.50% in addition to the legal thresholds of 5% and each multiple of 5%. In 2022, the Company received following transparency notifications. On 31 December 2022, the total number of securities conferring voting rights was 59 029 252. The voting rights attached to the treasury shares held by the Company are suspended. On 31 December 2022, the Company held 4 380 475 treasury shares. Person subject to notification requirement Reason for notification Threshold crossed Date on which threshold is crossed Denominator Total number of voting rights Total % of voting rights Stichting Administratiekantoor Bekaert and NV Bekaert SA Acquisition or disposal of voting securities or voting rights NV Bekaert SA 5% 15/3/2022 60 452 261 23 224 038 38.42% Stichting Administratiekantoor Bekaert and NV Bekaert SA Acquisition or disposal of voting securities or voting rights NV Bekaert SA 5% 25/3/2022 60 452 261 23 319 401 38.57% Norges Bank Acquisition or disposal of voting securities or voting rights 3% 17/5/2022 60 452 261 1 835 989 3.04% Stichting Administratiekantoor Bekaert and NV Bekaert SA Acquisition or disposal of voting securities or voting rights 40% 30/5/2022 60 452 261 24 187 875 40.01% Norges Bank Acquisition or disposal of voting securities or voting rights 3% 17/6/2022 60 452 261 1 857 298 3.07% Norges Bank Acquisition or disposal of voting securities or voting rights 3% 21/6/2022 60 452 261 1 857 298 3.07% Stichting Administratiekantoor Bekaert and NV Bekaert SA Passive crossing of a threshold 40% and NV Bekaert SA 5% 29/6/2022 59 002 852 23 142 526 39.22% Stichting Administratiekantoor Bekaert and NV Bekaert SA Acquisition or disposal of voting securities or voting rights NV Bekaert SA 5% 5/7/2022 59 004 952 23 263 289 39.43% Stichting Administratiekantoor Bekaert and NV Bekaert SA Acquisition or disposal of voting securities or voting rights 40% 29/8/2022 59 004 952 23 610 616 40.01% Norges Bank Acquisition or disposal of voting securities or voting rights 3% 31/10/2022 59 013 952 1 805 822 3.06% Norges Bank Acquisition or disposal of voting securities or voting rights Downward crossing of lowest threshold 3% 4/11/2022 59 013 952 1 717 133 2.91% Norges Bank Acquisition or disposal of voting securities or voting rights 3% 7/12/2022 59 013 952 1 788 886 3.03% Detailed information can be found on: https://www.bekaert.com/en/investors/our-shareholders/shareholder-structure/transparency-disclosures - 254 - Bekaert Integrated Annual Report 2022 Proposed appropriation of NV Bekaert SA 2022 result The after-tax result for the year was € 487 597 943 compared with € 138 942 685 for the previous year. The Board of Directors has proposed that the Annual General Meeting to be held on 10 May 2023 appropriate the above result as follows: in € Result of the year to be appropriated 487 597 943 Transfer to other reserves -399 033 745 Profit for distribution 88 564 198 The Board of Directors has proposed that the Annual General Meeting approve the distribution of a gross dividend of € 1.65 per share (2021 € 1.50 per share). The dividend will be payable in euro on 15 May 2023 by the following banks: •BNP Paribas Fortis, ING Belgium, Bank Degroof Petercam, KBC Bank, Belfius Bank in Belgium; •Société Générale in France; •ABN AMRO Bank in The Netherlands; •UBS in Switzerland. Appointments pursuant to the Articles of Association The term of office of the Directors Gregory Dalle, Maxime Parmentier, Oswald Schmid, Caroline Storme, Jürgen Tinggren and Mei Ye will expire at the close of the Annual General Meeting of 10 May 2023. The Board of Directors has proposed that the General Meeting: •re-appoint Gregory Dalle as Director for a term of four years, up to and including the Annual General Meeting to be held in 2027; •re-appoint Maxime Parmentier as Director for a term of four years, up to and including the Annual General Meeting to be held in 2027; •re-appoint Oswald Schmid as Director for a term of one year, up to and including the Annual General Meeting to be held in 2024; •re-appoint Caroline Storme as Director for a term of four years, up to and including the Annual General Meeting to be held in 2027; •re-appoint Jürgen Tinggren as independent Director and Chairman of the Board for a term of four years, up to and including the Annual General Meeting to be held in 2027. •re-appoint Mei Ye as independent Director for a term of one year, up to and including the Annual General Meeting to be held in 2024. - 255 - Bekaert Integrated Annual Report 2022 Alternative performance measures Metric Definition Reason for use Capital employed (CE) Working capital + net intangible assets + net goodwill + net property, plant and equipment + net RoU Property, plant and equipment. The weighted average CE is weighted by the number of periods that an entity has contributed to the consolidated result. Capital employed consists of the main balance sheet items that operating management can actively and effectively control to optimize its financial performance, and serves as the denominator of ROCE. Capital ratio (financial autonomy) Equity relative to total assets. This ratio provides a measure of the extent to which the Group is equity-financed. Current ratio Current assets to Current liabilities. This ratio provides a measure for the liquidity of the company. It measures whether a company has enough resources to meet it short-term obligations. Combined figures Sum of consolidated companies + 100% of joint ventures and associates after elimination of intercompany transactions (if any). Examples: sales, capital expenditure, number of employees. In addition to Consolidated figures, which only comprise controlled companies, combined figures provide useful insights of the actual size and performance of the Group including its joint ventures and associates. EBIT Operating result (earnings before interest and taxation). EBIT consists of the main income statement items that operating management can actively and effectively control to optimize its profitability, and a.o. serves as the numerator of ROCE and EBIT interest coverage. EBIT – underlying (EBITu) EBIT before operating income and expenses that are related to restructuring programs, impairment losses, business combinations, business disposals, environmental provisions or other events and transactions that have a material one-off effect that is not inherent to the business. EBIT – underlying is presented to assist the reader’s understanding of the operating profitability before one-off items, as it provides a better basis for comparison and extrapolation. EBITDA Operating result (EBIT) + depreciation, amortization and impairment of assets + negative goodwill. EBITDA provides a measure of operating profitability before non-cash effects of past investment decisions and working capital assets. EBITDA – underlying (EBITDAu) EBITDA before operating income and expenses that are related to restructuring programs, impairment losses, business combinations, business disposals, environmental provisions or other events and transactions that have a material one-off effect that is not inherent to the business. EBITDA – underlying is presented to assist the reader’s understanding of the operating profitability before one-off items and non-cash effects of past investment decisions and working capital assets, as it provides a better basis for comparison and extrapolation. EBIT interest coverage Operating result (EBIT) divided by net interest expense. The EBIT interest coverage provides a measure of the Group’s capability to service its debt through its operating profitability. Free Cash Flow (FCF) Cash flows from Operating activities - capex + dividends received - net interest paid Free cash flow (FCF) represents the cash available for the company to repay financial debt or pay dividends to investors. Gearing Net debt relative to equity. Gearing is a measure of the Group's financial leverage and shows the extent to which its operations are funded by lenders versus shareholders. Margin on sales EBIT, EBIT-underlying, EBITDA and EBITDA-underlying on sales. Each of these ratios provides a specific measure of operating profitability expressed as a percentage on sales. - 256 - Bekaert Integrated Annual Report 2022 Metric Definition Reason for use Net capitalization Net debt + equity. Net capitalization is a measure of the Group’s total financing from both lenders and shareholders. Net debt Interest-bearing debt after deducting non-current and current financial receivables and cash guarantees, short-term deposits, cash and cash equivalents. Net debt is a measure of debt after deduction of financial assets that can be deployed to repay the gross debt. Net debt on EBITDA Net debt divided by EBITDA. Net debt on EBITDA provides a measure of the Group’s capability (expressed as a number of years) to repay its debt through its operating profitability. Operating free cash flow Cash flows from Operating activities - capex (net of disposals of fixed assets) Operating cash flow measures the net cash required to support the business (working capital and capital expenditure needs). Return on capital employed (ROCE) Operating result (EBIT) relative to the weighted average capital employed. ROCE provides a measure of the Group’s operating profitability relative to the capital resources deployed and managed by operating management. Return on equity (ROE) Result for the period relative to average equity. ROE provides a measure of the Group’s net profitability relative to the capital resources provided by its shareholders. WACC Cost of debt and cost of equity weighted with a target gearing of 50% (net debt/equity structure) after tax. WACC is used to assess an investor’s return on an investment in the Company. Operating Working capital Inventories + trade receivables + bills of exchange received + advanced paid - trade payables - advances received - remuneration and social security payables - employment-related taxes. The weighted average WC is weighted by the number of periods that an entity has contributed to the consolidated result. Working capital includes all current assets and liabilities that operating management can actively and effectively control to optimize its financial performance. It represents the current component of capital employed. Internal Bekaert Management Reporting Focusing on the operational performance of the industrial companies of the Group, leaving out financial companies and other non-industrial companies, in a flash approach and as such not including all consolidation entries reflected in the full hard-close consolidation on which the annual report is based. The pragmatic approach enables a short follow-up process regarding the operational performance of the business throughout the year. in millions of € Note annual report 2021 2022 Net Debt Non-current interest-bearing debt 897 678 L/T Lease Liability - non-current 56 57 Current interest-bearing debt 218 481 L/T Lease Liability - current 20 20 Total financial debt 6.18 1 191 1 236 Non-current financial receivables and cash guarantees -10 -10 Current financial receivables and cash guarantees -6 -6 Short-term deposits -80 -5 Cash and cash equivalents -677 -728 Net debt 6.18 417 487 Capital Employed 2021 2022 Intangible assets¹ 57 62 Goodwill 151 153 Property, plant and equipment 1 254 1 238 RoU Property plant and equipment 132 131 Working capital (operating) 6.8 678 850 Capital employed¹ 2 271 2 433 Weighted average capital employed¹ 2 167 2 354 ¹ See note 2.8 'Restatement effects' - 257 - Bekaert Integrated Annual Report 2022 Working capital (operating) 2021 2022 Inventories 1 121 1 143 Trade receivables 751 731 Bills of exchange received 41 40 Advances paid 20 15 Trade payables -1 062 -921 Advances received -24 -24 Remuneration and social security payables -161 -122 Employment-related taxes -8 -11 Working capital (operating) 6.8 678 850 Weighted average working capital (operating) 607 764 EBIT Underlying to EBIT 5.2 EBITDA 2021 2022 EBIT¹ 511 366 Amortization intangible assets 9 10 Depreciation property, plant & equipment 151 155 Depreciation RoU property, plant & equipment 24 27 Write-downs/(reversals of write-downs) on inventories and receivables -19 11 Impairment losses/ (reversals of depreciation and impairment losses) on fixed assets -2 58 EBITDA¹ 675 626 ¹ See note 2.8 'Restatement effects' EBITDA - Underlying 2021 2022 EBIT - Underlying¹ 512 459 Amortization intangible assets 9 10 Depreciation property, plant & equipment 151 154 Depreciation RoU property, plant & equipment 24 27 Write-downs/(reversals of write-downs) on inventories and receivables -11 3 Impairment losses/ (reversals of impairment losses) on fixed assets — 1 EBITDA - Underlying¹ 686 654 ¹ See note 2.8 'Restatement effects' ROCE 2021 2022 EBIT¹ 511 366 Weighted average capital employed 2 167 2 354 ROCE 23.6% 15.5% ¹ See note 2.8 'Restatement effects' EBIT interest coverage 2021 2022 EBIT¹ 511 366 (Interest income) 5.4 -3 -5 Interest expense 5.4 44 43 (interest element of discounted provisions) 5.4 -2 -1 Net interest expense 39 37 EBIT interest coverage¹ 13.0 9.9 ¹ See note 2.8 'Restatement effects' - 258 - Bekaert Integrated Annual Report 2022 ROE (return on equity) 2021 2022 Result for the period¹ 447 289 Average equity (period-weighted)¹ 1 816 2 164 ROE¹ 24.6% 13.4% ¹ See note 2.8 'Restatement effects' Capital ratio (Financial autonomy) 2021 2022 Equity¹ 2 098 2 230 Total assets¹ 4 839 4 829 Financial autonomy¹ 43.3% 46.2% ¹ See note 2.8 'Restatement effects' Gearing (net debt on equity) 2021 2022 Net debt 417 487 Equity¹ 2 098 2 230 Gearing (net debt on equity)¹ 7.2 19.9% 21.8% ¹ See note 2.8 'Restatement effects' Net debt on EBITDA 2021 2022 Net debt 417 487 EBITDA¹ 675 626 Net debt on EBITDA¹ 0.6 0.8 ¹ See note 2.8 'Restatement effects' Net debt on EBITDA-underlying 2021 2022 Net debt 417 487 EBITDA-Underlying¹ 686 654 Net debt on EBITDA-underlying¹ 0.6 0.7 ¹ See note 2.8 'Restatement effects' Current Ratio 2021 2022 Current Assets 2 872 2 854 Current liabilities 1 636 1 724 Current Ratio 1.8 1.7 Operating free cash flow 2021 2022 Cash flows from operating activities¹ 380 340 Purchase of intangible assets¹ -9 -15 Purchase of PP&E -144 -170 Purchase of RoU Land — — Proceeds from disposals of fixed assets 37 3 Operating free cash flow¹ 265 158 ¹ See note 2.8 'Restatement effects' Free Cash Flow 2021 2022 Cash flows from operating activities¹ 380 340 Purchase of intangible assets¹ -9 -15 Purchase of property, plant and equipment -144 -170 Purchase of RoU Land — — Dividends received 25 68 Interest received 3 5 Interest paid -35 -37 Free Cash Flow¹ 221 190 ¹ See note 2.8 'Restatement effects' - 259 - Bekaert Integrated Annual Report 2022 Auditor’s Report - 260 - Bekaert Integrated Annual Report 2022 - 261 - Bekaert Integrated Annual Report 2022 - 262 - Bekaert Integrated Annual Report 2022 - 263 - Bekaert Integrated Annual Report 2022 - 264 - Bekaert Integrated Annual Report 2022 - 265 - Bekaert Integrated Annual Report 2022 Environmental statements - 267 - Bekaert Integrated Annual Report 2022 Energy Our ambition is to reduce our combined Scope 1 and Scope 2 CO2 emissions by -46.2% by 2030, compared to 2019, in line with science-based targets. We also aim to reach net-zero emissions by 2050. A key way of reducing our CO2 emissions is to improve the energy efficiency of our operations by installing energy-efficient infrastructure and equipment in our new plants and plant extensions, in addition to upgrading our existing facilities. Total energy consumption = 4 888 GWh (including JVs) of which: •Electrical energy (including cooling) = 3 000 GWh •Thermal energy (heat) = 31 GWh •Thermal energy (steam) = 157 GWh •Natural gas (including LPG) = 1 670 GWh •Fuel = 31 GWh GRI 302-1 Total energy Intensity ratio = 1 582 kWh/ton (including JVs) of which: •Electrical energy (including cooling) = 971 kWh/ton •Thermal energy (heat) = 10 kWh/ton •Thermal energy (steam) = 51 kWh/ton •Natural gas (including LPG) = 540 kWh/ton •Fuel = 10 kWh/ton Energy intensity ratio: the energy (electricity, thermal, gas and fuel) used per ton of end product produced. GRI 302-3 Renewable Electricity: 40% of our electricity needs came from renewable energy sources in 2022. GRI 302-1 Methodology used and restatements made for Energy and Emission disclosures Scope 1 and 2: Our methodology to calculate CO2 related figures (such as absolute CO2 emissions, CO2 intensity, and share of renewable electricity) is developed with reference to the GHG protocol. For natural gas, LPG, and fuel (Scope 1) emissions, we use the emission factors that were published by DEFRA in 2021. For purchased steam and heat (Scope 2) emissions, we derived the emission factor from the one applicable to natural gas. For electricity (Scope 2) emissions, we use the emission factors that are published yearly by IEA. These emission factors are published with 2.5 years of delay. Therefore we use the latest available figures in our calculations of today and we update the numbers once IEA publishes the official emission factor for the corresponding year. This implies that some changes in our figures can be observed 2.5 years after publication. The reported Scope 2 electricity emissions are calculated based on the grey electricity (IEA emission factor) and green electricity, purchased from the grid or self-generated, which is considered to have a zero emission factor (market-based approach). To calculate the ‘% of electricity needs that came from renewable sources’, we deduct the green electricity what we produce ourselves from the consumption baseline. The consumption that is left comes from the grid and we estimate the amount of renewable electricity it contains based on average country-specific numbers published in 2022 by ‘Our world in data’. The GHG quantification is subject to inherent uncertainty because of incomplete scientific knowledge to determine emission factors and the values needed to combine emissions of different gases. The energy consumption and CO2 emissions by fuel is an estimated value. We have collected the detailed invoices for a Bekaert representative plant in 2022 and extrapolated the number to all other plants and years weighted on the energy consumption in each plant in the corresponding year. The energy and CO2 data includes the following contributors: the Bekaert production sites, the headquarters in Belgium, the technology center in Belgium, and - 268 - Bekaert Integrated Annual Report 2022 company cars. It does not include the small offices and warehouses of Bekaert. GHG emissions other than CO2, for example methane, are not currently included in our Scope 1&2 emissions inventory but will be in future. As a result, our emissions in this section are reported as CO2 rather than CO2e. Some figures for the last months of the year 2022 have been estimated as some utility invoices arrive with delays. The published 2022 Energy and CO2 data is based on all the utility invoices that were available by 1 March 2023. Data restatement: 2019, 2020 and 2021 data have been restated. During the validation of our science-based targets by SBTi we made some updates in our energy & CO2 emission calculations in line with SBTi recommendations. One update with impact on CO2 emissions is about using consistent electricity emission factors for all countries (instead of mixing residual and average emission factors). Furthermore we updated the steam data with our improved steam data collection process in order to avoid double counts with natural gas. The effect on our figures of the updated methodology varies per year and is relatively limited. In addition, we are now also disclosing 2019 and 2020 figures for consolidated entities, whereas in previous reports, these data were reported on the combined level only (including joint ventures). Moreover, we now also disclose the energy consumption and Scope 1 CO2 emission data of fuel and LPG, which we did not yet report in previous periods. GRI 2-4 Due to the above, total energy consumption in GWh was restated by +1.2% for the year 2021 (consolidated entities) and by +3.0% for the average of the years 2019-2020-2021 (combined, including joint ventures). Our 2022 Scope 1 & 2 GHG emissions including joint ventures (in ton CO2) and 2022 Scope 3 GHG emissions (all categories) (in ton CO2e) have been externally validated by EY. Their limited assurance audit report is available further below in this section 'Environmental Statements'. GRI 2-5 - 269 - Bekaert Integrated Annual Report 2022 Actual energy consumption in GWh Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 Total energy consumption 4 553 4 158 4 509 4 273 5 178 4 743 5 192 4 888 from renewable sources 1 074 846 926 930 1 396 1 147 1 269 1 237 from non-renewable sources 3 480 3 311 3 583 3 343 3 783 3 596 3 923 3 651 Electrical energy (including cooling) 2 782 2 511 2 768 2 634 3 169 2 868 3 177 3 000 from renewable sources 1 053 823 901 907 1 375 1 123 1 244 1 213 from non-renewable sources 1 728 1 689 1 867 1 728 1 794 1 745 1 932 1 787 Thermal energy heat 28 32 32 31 28 32 32 31 from renewable sources 20 24 25 24 20 24 25 24 from non-renewable sources 8 9 7 7 8 9 7 7 Thermal energy steam 170 168 192 157 170 168 192 157 from renewable sources 0 0 0 0 0 0 0 0 from non-renewable sources 170 168 192 157 170 168 192 157 Natural gas & LPG 1 542 1 417 1 486 1 422 1 777 1 644 1 758 1 670 natural gas 1 399 1 282 1 332 1 357 1 634 1 500 1 574 1 570 LPG 143 135 154 65 143 143 184 100 Fuel 31 29 31 29 33 31 34 31 GRI 302-1, GRI 302-4 Energy intensity ratio in kWh per ton Excluding JVs Including JVs 2019 2020 2021 20221 2019 2020 2021 20221 Total energy intensity 1 666 1 689 1 642 1 727 1 537 1 529 1 503 1 582 Electrical energy (including cooling) 1 018 1 020 1 008 1 065 941 924 920 971 Thermal energy heat 10 13 12 12 8 10 9 10 Thermal energy steam 62 68 70 63 51 54 56 51 Natural gas (including LPG) 564 576 541 575 527 530 509 540 Fuel 11 12 11 12 10 10 10 10 1 The total energy intensity in 2022 increased compared to 2021 mainly due to lower production volumes (there is a fixed energy consumption). GRI 302-3 - 270 - Bekaert Integrated Annual Report 2022 Actual energy consumption in GWh per significant location of operation (> 1000 employees: payroll + contingent workers) 2019 2020 2021 2022 Belgium 245 221 236 206 Electricity 83 67 73 66 Natural gas 147 139 148 125 Purchased heat & steam 0 0 0 0 Fuel 15 15 15 14 Chile 81 68 70 65 Electricity 33 31 32 26 Natural gas 43 31 29 30 Purchased heat & steam 5 6 9 9 Fuel 0 0 0 0 China 1 796 1 701 1 744 1 605 Electricity 1 223 1 170 1 197 1 096 Natural gas 414 375 375 356 Purchased heat & steam 153 150 167 147 Fuel 6 6 6 6 India 137 133 180 182 Electricity 112 108 148 149 Natural gas 24 25 31 33 Purchased heat & steam 0 0 0 0 Fuel 0 0 1 1 Actual energy consumption in GWh per significant location of operation (> 1000 employees: payroll + contingent workers) 2019 2020 2021 2022 Indonesia 305 281 308 273 Electricity 213 193 215 186 Natural gas 91 87 92 86 Purchased heat & steam 0 0 0 0 Fuel 1 1 1 1 Slovakia 445 409 460 451 Electricity 226 195 224 222 Natural gas 216 213 234 227 Purchased heat & steam 1 0 0 0 Fuel 2 1 2 2 Turkey 283 251 302 291 Electricity 196 171 207 209 Natural gas 74 67 78 82 Purchased heat & steam 13 12 17 0 Fuel 1 1 1 1 US 475 382 389 414 Electricity 242 181 196 214 Natural gas 231 200 192 198 Purchased heat & steam 0 0 0 0 Fuel 2 1 2 1 GRI 302-3 % of electricity needs that came from renewable sources Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 38% 33% 33% 34% 43% 39% 39% 40% GRI 302-1 - 271 - Bekaert Integrated Annual Report 2022 CO2 We aim for carbon neutrality, as we believe this is the only way to take conscious and bold actions in reducing our carbon footprint. In line with this, we have committed to join the Business Ambition for 1.5°C. Companies committed to the Business Ambition for 1.5°C receive independent validation of their targets from the Science Based Targets initiative (SBTi) and become part of the UN Climate Champions’ Race to Zero. •Total Scope 1 & 2 GHG emissions = 1 606 581 ton CO2 •Total Scope 1 & 2 GHG emissions intensity ratio = 520 kg CO2 /ton Total Scope 1 & 2 GHG emissions in ton CO2 Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 Scope 1 & 2 GHG emissions 1 657 859 1 508 077 1 647 254 1 510 987 1 741 837 1 583 568 1 752 900 1 606 581 GRI 305-1, GRI 305-2 Our Scope 1 & 2 emissions (excluding JVs) reduced by 8.3% compared to 2021 and were 8.9% lower than our reference base year 2019. Our Scope 1 & 2 emissions (including JVs) reduced by 8.3% in 2022 compared to 2021 and were 7.8% lower than our reference base year 2019. GRI 305-5 Total Scope 1 & 2 GHG intensity ratio in kg CO2/ton Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 Total GHG intensity ratio 606 612 600 611 517 510 507 520 GRI 305-4 Methodology used and restatements made for energy and emission disclosures Scope 1 and 2: see disclosure in the previous chapter (Energy). Scope 1 GHG emissions natural gas was restated by -7.2% for the year 2021 (consolidated entities) and by +1.5% for the average of the years 2019-2020-2021 (combined, including joint ventures). - 272 - Bekaert Integrated Annual Report 2022 Scope 1 Scope 1 emissions are direct greenhouse gas (GHG) emissions that are related to our operations. Natural gas, LPG and fuel •Scope 1 GHG emissions = 316 951 ton CO2 •Scope 1 GHG intensity ratio = 103 kg CO2 /ton GRI 305-1, GRI 305-4 Scope 1 GHG emissions natural gas, LPG and fuel (in ton CO2 Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 GHG emission natural gas & LPG 286 932 263 785 277 023 262 581 329 982 305 547 327 690 309 001 GHG emission natural gas 256 158 234 792 243 897 248 561 299 207 274 823 288 240 287 587 GHG emission LPG 30 774 28 993 33 127 14 021 30 774 30 724 39 449 21 414 GHG emission fuel 7 867 7 445 7 887 7 388 8 438 7 980 8 511 7 950 GRI 305-1 Scope 2 GHG emissions from purchased electricity and other types of energy was restated by +0.6% for the year 2021 (consolidated entities) and by +0.9% for the average of the years 2019-2020-2021 (combined, including joint ventures). The Scope 1 & 2 intensity ratios in kg CO2/ton were restated due to the changes in calculation methods applied and the extension of the reported disclosures with LPG and fuel. In addition, where in the past the denominator used was 'volumes sold' (in line with the financial disclosures of the Company), we now used the more relevant reference 'volumes produced'. As a result of the scope extension of emission data and the change in denominator, the restated intensity ratios are higher than previously reported. Scope 1 GHG intensity ratio for natural gas was restated by +7.4% for the average of the years 2019-2020-2021 (combined, including joint ventures) and Scope 2 GHG intensity ratio from purchased electricity and other types of energy was restated by +6.6% over the same period. GRI 2-4 - 273 - Bekaert Integrated Annual Report 2022 Scope 1 GHG intensity ratio in kg CO2/ton Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 GHG intensity ratio natural gas & LPG 105 107 101 106 98 98 95 100 GHG intensity ratio fuel 3 3 3 3 3 3 2 3 GRI 305-4 Global Scope 1 emissions from natural gas, LPG and fuel in ton CO2 per significant location of operation (> 1000 employees: payroll + contingent workers) 2019 2020 2021 2022 Belgium 30 845 29 266 31 070 26 584 Chile 7 910 5 776 5 382 5 463 China 77 384 70 306 70 248 66 598 India 5 373 5 469 6 891 7 254 Indonesia 19 750 18 970 20 034 15 994 Slovakia 40 011 39 310 43 305 42 040 Turkey 13 796 12 582 14 532 15 253 US 42 766 36 913 35 591 36 657 GRI 305-1 Global Scope 1 emissions from natural gas, LPG and fuel in ton CO2 per business unit Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 Rubber Reinforcement 155 655 141 491 152 814 140 995 165 134 150 674 166 366 154 874 Steel Wire Solutions 108 597 99 425 102 830 102 636 142 738 132 539 140 569 135 739 Bridon-Bekaert Ropes Group 16 452 16 029 15 229 14 647 16 452 16 029 15 229 14 647 Speciality Businesses 8 922 9 267 9 048 8 119 8 922 9 267 9 048 8 119 Corporate 5 173 5 019 4 989 3 572 5 173 5 019 4 989 3 572 GRI 305-1 - 274 - Bekaert Integrated Annual Report 2022 Scope 2 Scope 2 emissions are indirect emissions, from purchased electricity, steam etc. that have been calculated based on energy consumption data and country specific kWh/MWh to CO2 conversion factors as provided by the International Energy Agency (IEA). GHG emissions from purchased electricity and other types of energy: •Electrical energy (including cooling) = 1 250 460 ton CO2 •Thermal energy (purchased heat) = 5 587 ton CO2 •Thermal energy (purchased steam) = 33 583 ton CO2 GRI 305-2 GHG Intensity Ratio: •Electrical energy (including cooling) = 405 kg CO2/ton •Thermal energy (purchased heat) = 2 kg CO2/ton •Thermal energy (purchased steam) = 11 kg CO2 GRI 305-4 Scope 2 GHG emissions from purchased electricity and other types of energy in ton CO2 Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 Electrical energy (including cooling) 1 321 356 1 194 936 1 315 297 1 201 848 1 361 715 1 228 129 1 369 652 1 250 460 Thermal energy purchased heat 5 168 5 910 5 818 5 587 5 168 5 910 5 818 5 587 Thermal energy purchased steam 36 536 36 001 41 230 33 583 36 536 36 001 41 230 33 583 GRI 305-2 Scope 2 GHG intensity ratio in kg CO2/ton Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 Electrical energy (including cooling) 483 485 479 486 404 396 396 405 Thermal energy purchased heat 2 2 2 2 2 2 2 2 Thermal energy purchased steam 13 15 15 14 11 12 12 11 GRI 305-4 - 275 - Bekaert Integrated Annual Report 2022 Global Scope 2 emissions in ton CO2 per significant location of operation (> 1000 employees: payroll + contingent workers) 2019 2020 2021 2022 Belgium 01 8 382 7 768 6 971 Chile 15 541 14 087 16 289 13 678 China 794 058 750 752 777 225 711 082 India 80 962 74 461 101 462 77 419 Indonesia 161 983 148 406 165 128 143 252 Slovakia 162 25 270 31 525 31 214 Turkey 87 027 72 933 90 440 87 638 US 92 616 59 126 71 747 42 456 1 zero in 2019 because in Belgium we a had contract for a green electricity tariff until and including 2019 GRI 305-2 Global Scope 2 emissions in ton CO2 per business unit Excluding JVs Including JVs 2019 2020 2021 2022 2019 2020 2021 2022 Rubber Reinforcement 1 222 347 1 088 383 1 189 756 1 071 971 1 243 295 1 104 536 1 217 766 1 097 982 Steel Wire Solutions 95 320 101 986 117 159 115 592 114 729 119 027 143 505 138 192 Bridon-Bekaert Ropes Group 17 141 19 482 22 889 25 290 17 141 19 482 22 889 25 290 Speciality Businesses 24 949 24 037 29 061 26 916 24 949 24 037 29 061 26 916 Corporate 3 303 2 958 3 478 1 249 3 303 2 958 3 478 1 249 GRI 305-2 - 276 - Bekaert Integrated Annual Report 2022 Scope 3 Scope 3 emissions in ton CO2e 20191 2021 2022 Scope 3 emissions excluding JVs Purchased goods & services 4 874 911 5 446 554 4 762 032 Capital goods 72 870 113 767 133 995 Fuel & energy related activities (not included in Scope 1 or 2) 352 555 348 402 325 115 Upstream transportation & distribution 31 487 44 627 77 972 Waste generated in operations 27 261 32 713 37 984 Business travel 2 740 1 000 2 100 Employee commuting 20 400 20 400 20 400 Upstream leased assets 0 0 0 Downstream transportation & distribution2 47 230 66 941 116 899 Processing of sold products 161 870 163 893 156 846 Use of sold products 100 000 100 000 100 000 End of life treatment of sold products 106 999 108 341 94 448 Downstream Leased Assets 0 0 0 Franchises 0 0 0 Scope 3 emissions JVs Total JVs 247 313 290 324 359 295 Total Scope 3 emissions 6 045 636 6 736 962 6 187 086 1 2019 is the reference year for SBT calculation 2 Our scope of calculating emissions from transport has been extended over the past years, which explains the increase. GRI 305-3 Methodology used: •Methodology developed with reference to the GHG Protocol. •The GHG Protocol defines Scope 3 emissions as all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. •The SBTi recommended Scope 3 emissions estimation tool (Quantis) provides information on CO2 equivalent emissions (CO2e) as opposed to just CO2, so emissions in this section are generally quoted as CO2e. •Quantification of GHG emissions is subject to inherent uncertainty because of incomplete scientific and methodological knowledge used to determine emission factors and the values needed to combine emissions of different gases. •Purchased goods & services: Calculation based on tons of wire rod purchased and global average tCO2/t steel data published by Worldsteel plus a calculation via the Quantis estimation tool based on raw materials spend excluding wire rod. Emissions associated with the purchase of spools, dies, wire, IT services, packaging & corporate services are excluded currently but will be included in future inventories after a revision that is planned during 2023. This will also result in a revision of the 2019 baseline and the 2021 and 2022 reported numbers, subject to agreement with the SBTi. Based on a first estimate of this planned revision, total Scope 3 emissions (in tCO2e) reported for the 2019 baseline, 2021 and 2022 could each potentially increase by 5 to 8%. •Capital goods: Calculation via the Quantis estimation tool based on Capex spend on tangible fixed assets, split between machinery (66.7%) and electrical equipment (33.3%). •Fuel & energy related activities (not included in Scope 1 or 2): Calculation via the Quantis estimation tool based on Scope 1 & Scope 2 emissions. •Upstream transportation and distribution: Estimate based on 66.7% of downstream transportation & distribution emissions. •Waste generated in operations: Calculation via the Quantis estimation tool based on waste management spend. •Business travel: Emissions from business air travel only – emissions from company cars/buses are included in Scope 1 emissions. Data provided by Egencia, based on journeys undertaken by Bekaert employees. •Employee commuting: Calculation via the Quantis estimation tool based on >10,000 employees. •Upstream leased assets: None in Bekaert. •Downstream transportation and distribution: Calculation based on sea, air & road freight journeys (see below for more detail). For sea freight, the emissions are based on the MSC carbon calculator. Volumes shipped are considered as gross tons shipped, distances are per port-port pair and emission factors are taken from the MSC calculator. For road freight, the methodology applied is compliant with the GLEC framework, and uses Transporeon Carbon Visibility, with a combination of calculation methods using fuel based primary data, route-based modelling and/or industry - 277 - Bekaert Integrated Annual Report 2022 •standard modelling. For air freight, emissions are based on input from Bekaert's main suppliers who all use the EcoTransIT emissions calculator. •Processing of sold products: Calculation via the Quantis estimation tool based on estimated processing costs & tonnages for the two largest categories of products sold. •Use of sold products: Estimate based on SBTi advice regarding qualifying products and direct/indirect Scope 3 emissions. •End of life treatment of sold products: Calculation via the Quantis estimation tool based on total tons sold. •Downstream leased assets: None in Bekaert. •Franchises: None in Bekaert. •Total JVs: Calculation via the Quantis estimation tool based on financial value of JVs. Transport Scope 3 emissions from transport are from Bekaert consolidated entities (excluding joint ventures). GHG emissions from outbound logistics: •Global sea freight: 29 263 ton CO2e •Road transport: 82 854 ton CO2e •Air freight: 4 782 ton CO2e GHG intensity ratio from outbound logistics: •Global sea freight: 8.2 grams of CO2e emitted required to transport 1 ton of goods over 1 km •Road transport: 86.5 grams of CO2e emitted required to transport 1 ton of goods over 1 km •Air freight: 697.0 grams of CO2e emitted required to transport 1 ton of goods over 1 km GRI 305-3 Emissions of outbound logistics increased because of a strong demand rebound and agile supply chain management, and because of a scope extension of data. Scope 3 GHG emissions from outbound logistics in ton CO2e 20191 20201 20211 20222 Global sea freight 18 578 22 603 31 137 29 263 Road freight 9 284 8 249 10 562 82 854 Air freight 800 803 4 118 4 782 1 Road freight 2019, 2020 and 2021 is limited to road freight for Rubber Reinforcement EMEA only 2 Road freight 2022 includes emissions for all four business units and for both EMEA and North America GRI 305-3 Scope 3 GHG intensity ratio from outbound logistics (in g CO2e WtW/t-km) 2021 2022 Global sea freight 8.5 8.2 Road freight 44.0 86.5 Air freight n.a. 697.0 GRI 305-4 GHG emissions intensity of company cars, personnel bus services and air travel: •GHG emissions from company cars & buses: 3 497 ton CO2e/year •GHG emissions from business travel (air): 2 100 ton CO2e (without radiative forcing (RF)) GHG emissions from company cars, personnel, bus services and air travel 2019 2020 2021 2022 GHG emissions from company cars & buses in ton CO2e/year n.a. 3 606 3 508 3 497 GHG emissions from business travel (air) in ton CO2e (without radiative forcing (RF)) 2 740 1 700 1 000 2 100 GRI 305-3 - 278 - Bekaert Integrated Annual Report 2022 Purchased goods Scope 3 emissions from purchased goods Scope 3 emissions from purchased goods (in ton CO2e) 20191 2021 2022 Scope 3 emissions from purchased wire rod2 4 452 482 5 016 444 4 392 249 Scope 3 emissions from other purchased goods2 422 429 430 110 369 783 1 2019 is the reference year for SBT calculation 2 Calculation based on tons of wire rod purchased and global average tCO2/t steel data published by Worldsteel plus a calculation via the Quantis estimation tool based on raw materials spend excluding wire rod (see above for more details). GRI 305-3 - 279 - Bekaert Integrated Annual Report 2022 - 280 - Bekaert Integrated Annual Report 2022 - 281 - Bekaert Integrated Annual Report 2022 - 282 - Bekaert Integrated Annual Report 2022 - 283 - Bekaert Integrated Annual Report 2022 EU Taxonomy This section covers the key performance indicators and accompanying information required under the EU Taxonomy (Regulation EU 2020/8521 and the related Delegated Acts2). The EU Taxonomy aims to channel capital towards sustainable activities, with the end-goal of financing sustainable growth and achieving the EU objective of becoming climate neutral by 2050. Reporting on our contribution to the environment through the EU Taxonomy is in line with Bekaert’s ambition to create sustainable value for all stakeholders and become an industry leader in sustainability. While last year’s exercise only covered the eligibility dimension, this is the first year that we have to report on alignment to two of the EU Taxonomy objectives, Climate Change Mitigation and Climate Change Adaptation. As the delegated act pertaining to the remaining four environmental objectives3 has yet to be published, this year’s analysis is restricted to the potential contribution of Bekaert’s activities to the two Climate Change objectives. Certain aspects of the EU Taxonomy regulation are complex and open to interpretation at this point in time. As we await further guidance from the European Commission, Bekaert has prepared its EU Taxonomy reporting for fiscal year 2022 on a best effort basis, assessing compliance with the Taxonomy criteria using the latest guidance available and making assumptions or estimates where required. Bekaert’s approach in determining eligibility and alignment with the EU Taxonomy regulation is further explained in the sections below. Below we report on our EU Taxonomy eligibility and alignment for 2022, expressed through three KPIs: our share of eligible/aligned, eligible/non-aligned and non-eligible activities in the Bekaert consolidated sales of 2022, capital expenditure additions and ‘applicable’ operating expenditures. Note: consolidated sales is the terminology used in the Bekaert income statement. It has the same definition as ‘net turnover’ as used in the EU Taxonomy. We refer to note 2.4 in Part II – Financial Statements of this report for more detailed information on our revenue recognition principles. 1 Regulation EU 2020/852 of the European Parliament and of the Council, published in the Official Journal of the European Union on the 22.06.2020. 2 The Climate Delegated Act (Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021) and the Disclosure Delegated Act (Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021). 3“Sustainable use and protection of water and marine resources”, “transition to a circular economy”, “pollution prevention and control” and “protection and restoration of biodiversity and ecosystems”. - 284 - Bekaert Integrated Annual Report 2022 EU Taxonomy eligibility assessment process An ‘eligible economic activity’ is one that is described in the EU Taxonomy, regardless of whether it meets all the technical screening criteria laid out for that activity. To evaluate our EU Taxonomy eligibility, we have mapped all products manufactured by the Bekaert subsidiaries, the applicable expenses incurred and investments made, and matched them with the activities described in the EU Taxonomy. To facilitate this exercise, the EU Taxonomy includes a reference to NACE codes (Revision 2) on each activity. However, such reference is only indicative and does not prevail over the specific definition provided in the text of the Climate Delegated Act. Therefore, we first mapped the eligibility of our products and expenses in relation to the descriptions in such Delegated Act, and only using NACE codes (Revision 2) and other reference classifications provided by the Sustainable Finance Platform as a further guide. For instance: •For solutions that are listed under activity 3.1 “Manufacture of renewable technologies”, TRBC Classification provided by the Sustainable Finance Platform refers to 5020101011 - Wind Systems & Equipment, 5020101013 – Photovoltaic Solar Systems & Equipment, 5210204013 – Turbine Manufacturing; BICS Classification refers to 131110111111 – Wind Turbine components, 1311101115 – Other Renewable Energy Equipment, 1710121413 – Wire & Cable; S&P Classification refers to 33299C – Other fabricated metal manufacturing, 332600 – Spring and wire product manufacturing and 331200- Steel product manufacturing from purchased steel. Following this guidance, we found our solutions that enable the manufacturing of renewable technologies such as the mooring lines for floating offshore wind towers or ultra-fine wires that are used to cut wafers for solar photovoltaic panels as Taxonomy-eligible. •The same principle also applies to solutions that are listed under activity 3.2 “Manufacture of equipment for the production and use of hydrogen” where our products explicitly match the reference S&P Classification such as 33299C – Other fabricated metal manufacturing, 331200- Steel product manufacturing from purchased steel and 332600 - Spring and wire product manufacturing. Regarding activity 3.5 “Manufacture of energy efficiency equipment for buildings”, not only our solutions •meet S&P Classification for 331200- Steel product manufacturing from purchased steel and RBICS Classification for 451510102510 – General Metal Parts and Components Makers, their eligibility is further reinforced with substantial contribution criteria referring to manufacturing of one or more of products and their key components such as space heating and domestic hot water systems as is the case with our burners and heat exchangers. •For activity 3.6. “Manufacture of low carbon technologies”, Bekaert is required to demonstrate that its product/technology provides substantial life-cycle greenhouse gas (GHG) emission savings compared to the best performing alternative technology/product/solution available on the market: –substantial life cycle GHG emission savings: For each product considered under this activity, Bekaert carried out a Life Cycle Analysis (LCA) calculation. We consider life cycle GHG emission savings substantial where the total life cycle emissions of the Bekaert product are below the ones of the best performing alternative. To determine compliance with the criteria listed in the EU Taxonomy, only a limited testing was performed that represents the most material three product groups and the two digital LCA tools that were used. –Best performing alternative technology/product/solution: This is defined as the dominant, most-used product/technology on the market with the same core functionalities as the Bekaert product considered under this activity. Considering the fact that the publicly available information for alternative products is limited, we mostly chose a representative example from our product portfolio for comparative LCAs, and where no representative example was available, we modeled the competitor products based on certain assumptions. –The required third party verifications per LCA conducted are still in progress, which is the reason why 3.6 does not comply yet with criteria to formally claim alignment. Since we believe that the third-party verifications are just a formal process that needs to be completed, we further disclose under the EU Taxonomy Key Performance Indicators tables the amount of revenue, capex, and opex that will become aligned once the third-party verification is completed. - 285 - Bekaert Integrated Annual Report 2022 Find more about our sustainable products and solutions in Part I of this report: Our performance in 2022 - Knowledge. We assessed our eligibility by collaborating with and involving each of our four business units in performing the mapping exercise as referred-to above. In our calculation of the KPIs, we considered values of only those products that are specifically made for the eligible activities. We took into consideration each of the elements included in the activity description in the Climate Delegated Act, and when in doubt we referred to the technical screening criteria and the TEG Final Report – Technical Annex for further information on which products manufactured by Bekaert could be assessed as eligible or not. As mentioned above, certain aspects of the EU Taxonomy regulation are complex and open to interpretation. Therefore, we determined the eligibility of our products on a best effort basis using the latest guidance available and keeping in mind the philosophy of EU Taxonomy that is re-orienting capital towards sustainable activities that are required for the net-zero future, where the key component suppliers such as Bekaert also play a significant role. If a strict interpretation of the European Commission (i.e., FAQ 37 on the Commission Draft notice) would have been applied, it would have impacted the scoring of all three KPIs of Bekaert between 2-7%. EU Taxonomy Regulation may evolve in the future and different interpretations can occur. As a result, in the interpretation currently used by Bekaert, certain judgments have been used for some activities. In case of any change in the interpretation of the EU Taxonomy, updates to the figures disclosed might be needed. - 286 - Bekaert Integrated Annual Report 2022 EU Taxonomy alignment assessment process The alignment of a product goes beyond its mere eligibility as it means that the activity complies with specific technical screening criteria related to the six EU environmental objectives and minimum social safeguards. In order to achieve alignment, several factors must be taken into consideration: •Substantial Contribution (SC): the activity/product needs to be considered as having a significant positive impact to one of the six environmental objectives, as defined by Technical Screening Criteria. •Do No Significant Harm (DNSH): the activity must meet minimum requirements of causing no significant harm to the five other environmental objectives by complying with certain thresholds, requirements or existing laws and regulations. •Minimum Social Safeguards (MSS): a company needs to respect minimum requirements concerning key social topics: human rights including workers’ rights, bribery/corruption, taxation and fair competition. A. Substantial contribution & scope Bekaert has decided to report its contribution to the climate change mitigation objective, as it is in line with its overall sustainability strategy and SBTi-approved targets (find more information in section ’Planet’ in Part I of this report). Given the complexity of the EU Taxonomy regulation, some criteria require additional clarification and interpretation. In the following section, we highlight a number of key considerations in Bekaert’s EU Taxonomy assessment: •Substantial contribution to 3.1. “Manufacture of renewable technologies”: Bekaert produces key components for the manufacturing of renewable energy technologies. The substantial contribution criteria for this activity align with the activity description. Hence, if a product is deemed Taxonomy-eligible under activity 3.1, we determined that the 'substantial contribution' criterion was satisfied. •Substantial contribution to activity 3.2. “Manufacture of products for the use of hydrogen”: Bekaert produces components that enable the production of green hydrogen. Following the prudency principle and also based on the low output of green hydrogen production in the world •today, Bekaert will confirm the alignment of its hydrogen products in upcoming years by substantiating the exact projects where green hydrogen is produced or used. As Bekaert already provides and invests in the development of next generation innovative solutions for green hydrogen production for more than 20 years, this approach is likely an underestimation of the actual portion of Bekaert components used for the production of green hydrogen. •Substantial contribution to 3.5. “Manufacture of energy efficiency equipment for buildings”: Bekaert is the world's leading supplier of innovative burners and heat exchangers for hydrogen-ready gas boilers. The substantial contribution criteria for this activity refers to space heating and domestic hot water systems rated in the highest two populated classes of energy efficiency in accordance with Regulation (EU) 2017/1369 and delegated acts adopted under that Regulation. To assess our compliance with this criterion, we referred to relevant guidance from the latest Q&A of the Commission in December 2022 and the website for EPREL - European Product Registry for Energy Labelling. According to our knowledge, the gas burners that use our solutions are at the highest rating possible for gas burners, i.e., rating A. Improving the rating is possible only by combining it with other environmentally friendly technologies such as hybrid or hydrogen ready boilers. Even though today Bekaert does not meet the substantial contribution criteria for this activity, several initiatives are ongoing to use our existing technology and know-how in such developments. •Substantial contribution to activity 9.1. “Close to market research, development and innovation”: Bekaert actively researches product innovations that reduce, remove or avoid GHG emissions along the life cycle of products. The expenditures related to technologies in this field that have been demonstrated in an industrially relevant environment., i.e. TRL6 level are reported under activity 9.1, which is a small percentage of all sustainable product innovation efforts that are taking place at Bekaert due to not meeting the criteria of TRL6. To demonstrate GHG savings, same approach as mentioned above for substantial contribution of activity 3.6 was applied where possible. In cases where publicly available information is limited, we made assumptions to estimate if potential GHG emission savings would occur. - 287 - Bekaert Integrated Annual Report 2022 B. Do No Significant Harm As most of the eligible activities considered by Bekaert (3.1, 3.2., 3.5. and 3.6) require complying with the same Do No Significant Harm (DNSH) requirements, Bekaert has developed a systematic approach in assessing the compliance with these requirements: •Generic criteria for DNSH to pollution prevention and control regarding use and presence of chemicals: As a global manufacturing company, Bekaert is subject to multiple regulations concerning the use and presence of chemicals and follows local regulations accordingly. To determine compliance with the criteria listed in the EU Taxonomy, a sample-based testing was applied to determine compliance of key manufacturing locations with the criteria set out by the EU Taxonomy Climate Delegated Act Appendix C. Bekaert used a turnover-based approach and a selection based on same or similar production processes to determine a representative sample for its product portfolio. •Generic criteria for DNSH to sustainable use and protection of water and marine resources and protection and restoration of biodiversity and ecosystems: We comply with all European environmental regulations in force and carry out Environmental Impact Assessments (EIAs)in all locations. For locations outside the EU, we are implementing programs to reduce water usage, especially, but not exclusively, in water-stressed areas. Next to complying with EU norms and regulations, we are aiming to increase our efforts on biodiversity and protection of water resources. Please refer to the section ’Planet’ in Part I of this report for more information. •Generic criteria for DNSH to climate change adaptation: An in-depth climate risk study has been conducted to assess the impact of physical climate change on Bekaert’s all global assets and operations. You can find more information in the ‘Corporate Governance statement’ section in Part II of this report. •Criteria for the transition to a circular economy: Bekaert is committed to continuously improving the circularity of its products, including design for high durability, recyclability, reuse and use of secondary raw materials and waste management. We assessed the feasibility of the EU Taxonomy circular economy criteria for our eligible products and adopted relevant techniques where possible. As part of our efforts to establish a systematic approach to take circular economy initiatives to the next level establishing a common language within the organization, we have conducted multiple workshops and are actively working towards making our company more •circular in the future. Additional details can be found in the section ‘Planet’ in Part I of this report. For products that are listed as Taxonomy-eligible under activity 9.1, a separate assessment of DNSH requirements have been carried out as listed in EU Taxonomy regulation and no potential risks have been found. Our assessment is largely based on the fact that similar materials and processes are used in the development of these new innovative products. C. Minimum Social Safeguards Bekaert adheres to the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights, the Fundamental Conventions of the International Labour Organisation (ILO) and the International Bill of Human Rights. We further assessed compliance with Minimum Social Safeguards in line with the final report of the Platform on Sustainable Finance on Minimum Social Safeguards, focusing on four core topics: human rights including workers’ rights, bribery/corruption, taxation and fair competition. Among other initiatives, we have a Supplier Code of Conduct and regular CSR audits, which allow us to further verify the respect of human/labor rights throughout our value chain. For more information on Social Safeguards and related risks throughout the Bekaert value chain, see ’Value Chain’ section in Part I of this report and ‘Corporate Governance statement’ section in Part II. - 288 - Bekaert Integrated Annual Report 2022 EU Taxonomy Key Performance Indicators 1. Consolidated sales Substantial contribution criteria DNSH criteria ( Does Not Significantly Harm) Economic activities (1) Code(s) (2) Absolute turnover (3) Proportion of turnover (4) Climate change mitigation (5) Climate change Adaptation (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion of turnover, year N (18) Taxonomy aligned proportion of turnover, year N-1 (19) Category (enabling activity or) (20) Category (transitional activity) (21) Currency % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmentally sustainable activities (Taxonomy-aligned) Manufacture of renewable energy technologies 3.1 €47 922 000 1% 100 0% — — — — N/A Y Y Y Y Y Y 1% — E Close to market research, development and innovation 9.1 €— 0% 100% 0% — — — — N/A Y Y Y Y Y Y 0% — E Turnover of environmentally sustainable activities (Taxonomy-aligned (A.1) €47 922 000 1% 100% 0% 1% — A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Manufacture of equipment for the production and use of hydrogen 3.2 €13 327 770 0.24% Manufacture of energy efficiency equipment for buildings 3.5 €95 385 177 2% Manufacture of other low carbon technologies 3.6 €2 241 823 348 40% Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) €2 350 536 295 42% Total (A.1 + A.2) €2 398 458 295 42% 1% — B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non-eligible activities (B) €3 253 331 705 58% Total (A + B) €5 651 790 000 100% - 289 - Bekaert Integrated Annual Report 2022 Numerator The numerator is comprised of the Bekaert 2022 consolidated sales that are related to the economic activities listed in the table above (the numbers refer to the section in Annex I of the Climate Delegated Act that corresponds to such activity). All of the activities above are considered as enabling activities, as referred to in Article 10(1) point (i) of Regulation (EU) 2020/852. Each business unit performed the eligibility analysis separately, for the products manufactured within the business unit. To avoid double counting, this information was then aggregated and validated by Group Finance, following the same principles as for the consolidated financial reporting. Examples of eligible and aligned products and solutions can be found in Part I of this report: Our performance in 2022 - ’Knowledge’ section. Bekaert’s commitment is to create and deliver long-term value to all its stakeholders and to create green and sustainable solutions. This sustainable value is also translated into the extended lifespan of our products, energy efficiency offered by our products, the reduced carbon footprint from their use, as well as the utilization of alternative low carbon materials and innovative technologies in its manufacturing processes. Denominator The denominator is comprised of consolidated sales as disclosed in Part II of this report: Financial Statements. Referring to our disclosure above on the alignment of Activity 3.6 in respect to the LCA third-party verifications that are in progress, once the third-party verifications are completed, an additional € 2 241 million would qualify for alignment, boosting our score to 41%. - 290 - Bekaert Integrated Annual Report 2022 2. Capital Expenditure (Capex) Substantial contribution criteria DNSH criteria ( Does Not Significantly Harm) Economic activities (1) Code(s) (2) Absolute CapEx (3) Proportion of CapEx (4) Climate change mitigation (5) Climate change adaption (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaption (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion of CapEx, year N (18) Taxonomy aligned proportion of Capex, year N-1 (19) Category (enabling activity or) (20) Category (transitional activity) (21) Currency % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmentally sustainable activities (Taxonomy-aligned) Manufacture of renewable energy technologies 3.1 €696 382 0% 100% 0% — — — — N/A Y Y Y Y Y Y 0% — E Close to market research, development and innovation 9.1 €2 060 702 1% 100% 0% — — — — N/A Y Y Y Y Y Y 1% — E CapEx of environmentally sustainable activities (Taxonomy-aligned (A.1) €2 757 084 2% 100% 0% — — — — N/A Y Y Y Y Y Y 2% — A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Manufacture of equipment for the production and use of hydrogen 3.2 €5 538 595 3% Manufacture of energy efficiency equipment for buildings 3.5 €3 731 482 2% Manufacture of other low carbon technologies 3.6 €60 455 044 35% Construction, extension and operation of water collection, treatment and supply systems 5.1 €39 054 0% Renewal of water collection, treatment and supply systems 5.2 €360 725 0% Construction, extension and operation of waste water collection and treatment 5.3 €2 041 344 1% Renewal of waste water collection and treatment 5.4 €52 517 0% Operation of personal mobility devices, cycle logistics 6.4 €16 524 0% Renovation of existing buildings 7.2 €1 489 494 1% Installation, maintenance and repair of energy efficiency equipment 7.3 €3 578 106 2% Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings 7.5 €543 869 0% Data-driven solutions for GHG emissions reductions 8.2 €47 803 0% CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) €77 894 558 46% Total (A.1 + A.2) €80 651 642 47% 2% — B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities (B) €90 011 452 53% Total (A + B) €170 663 094 100% - 291 - Bekaert Integrated Annual Report 2022 Numerator The numerator is comprised of (i) capex related to Taxonomy-eligible solutions of Bekaert and (ii) capex related to other Taxonomy-eligible economic activities that are not directly linked to Taxonomy-eligible solutions of Bekaert (in both cases, we refer to capex invested during the fiscal year 2022), as described in Section 1.1.2.2 of Annex I of the Disclosure Delegated Act. The total EU Taxonomy-eligible capex is calculated from the following economic activities listed in the table above. From the activities above, activities 3.1, 3.2, 3.5, 3.6, 7.3. 7.5, 8.2 and 9.1 are considered as (eligible to-be) enabling activities, as referred to in Article 10(1) point (i) of Regulation (EU) 2020/852, while activity 7.2 is considered as an (eligible to-be) transitional activity as referred to in Article 10(2) of Regulation (EU) 2020/852.In certain scenarios where asset investments are used to manufacture both eligible and non-eligible products, we have applied an allocation rule based on the tonnage of eligible products manufactured, in order to calculate the eligible capex. A similar approach was followed for aligned and non-aligned products. Each business unit separately identified their capital expenditures related to eligible/aligned products manufactured by Bekaert (literal (a) of Section 1.1.2.2 of Annex I of the Disclosure Delegated Act). In a second stage, each business unit further screened the capex that was left out from the previous step to identify the capex related to the purchase of output from Taxonomy-eligible economic activities (literal (c) from the referred Section 1.1.2.2). Separately, the Group Finance department identified the capex related to other Taxonomy-eligible economic activities, which was not registered in the accounts of the business units. Denominator The denominator is comprised of Bekaert’s total capex invested in the financial year 2022 as disclosed in Part II of this report – Financial Statements, covering additions to tangible and intangible assets considered before depreciation, amortization and any re-measurements that may apply. Referring to our disclosure above on the alignment of Activity 3.6 in respect to the LCA third-party verifications that are in progress, once the third-party verifications are completed, an additional € 61 million would qualify for alignment, boosting our score to 37%. - 292 - Bekaert Integrated Annual Report 2022 3. Operational excellence expenses (opex) Substantial contribution criteria DNSH criteria ( Does Not Significantly Harm) Economic activities (1) Code(s) (2) Absolute OpEx (3) Proportion of OpEx (4) Climate change mitigation (5) Climate change adaption (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion of OpEx, year N (18) Taxonomy aligned proportion of OpEx, year N-1 (19) Category (enabling activity or) (20) Category (transitional activity) (21) Currency % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmentally sustainable activities (Taxonomy-aligned) Manufacture of renewable energy technologies 3.1 €1 518 812 1% 100% 0% — — — — N/A Y Y Y Y Y Y 1% — E Close to market research, development and innovation 9.1 €5 873 740 3% 100% 0% — — — — N/A Y Y Y Y Y Y 3% — E Transport by motorbikes, passenger cars and commercial vehicles 6.5 €554 376 0% 100% 0% — — — — N/A Y N/A Y Y N/A Y 0% — T OpEx of environmentally sustainable activities (Taxonomy-aligned (A.1) €7 946 928 4% 100% 0% — — — — 4% — A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Manufacture of equipment for the production and use of hydrogen 3.2 €766 224 0% Manufacture of energy efficiency equipment for buildings 3.5 €2 981 081 1% Manufacture of other low carbon technologies 3.6 €70 337 143 33% Transport by motorbikes, passenger cars and commercial vehicles 6.5 €6 945 929 3% OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) €81 030 377 38% Total (A.1 + A.2) €88 977 305 42% 4% — B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities (B) €122 257 491 58% Total (A + B) €211 234 796 100% - 293 - Bekaert Integrated Annual Report 2022 Numerator The concept of opex under the EU Taxonomy is not equal to one line item in the Income Statement. The EU Taxonomy has a specified scope for operational expenses to be reported (described in the Denominator section below), therefore, we refer to this reduced concept as ‘applicable’ opex to clearly differentiate it from the Income Statement lines reported by Bekaert. The numerator is comprised of (i) ‘applicable’ opex related to Taxonomy-eligible activities and (ii) ‘applicable’ opex related to other Taxonomy-eligible economic activities, as described in Section 1.1.3.2 of Annex I of the Disclosure Delegated Act. The total EU Taxonomy-eligible ‘applicable’ opex is calculated from the economic activities referenced in above table. All of the activities above are considered as (eligible to-be) enabling activities, as referred to in Article 10(1) point (i) of Regulation (EU) 2020/852, except for activity 6.5 “Transport by motorbikes, passenger cars and light commercial vehicles”. In certain scenarios where it is impossible to allocate opex to individual product lines, we have applied an allocation rule based on the tonnage of eligible products manufactured, in order to calculate the eligible R&D expenses, building renovation measures, and maintenance and repair expenses. Each business unit extracted separately the opex meeting the definition of the EU Taxonomy related to the eligible and aligned products. Separately, our central purchasing department identified the ‘applicable’ opex related to the purchase of other Taxonomy-eligible economic activities, which was not registered in the accounts of the business units. To avoid double counting, this information was then aggregated and validated by Group Finance, following the same principles as for the consolidated financial reporting. Denominator Opex is defined in the Disclosure Delegated Act as direct non-capitalized costs that relate to research and development, building renovation measures, short-term leases, maintenance and repair, and any other direct expenditures relating to day-to-day servicing of assets of property, plant and equipment. The denominator comprises of expenses that fit within this definition of opex. Each business unit obtained the maintenance and repair costs (which include non-capitalized expenses for building renovation measures) from internal reporting systems. Referring to our disclosure above on the alignment of Activity 3.6 in respect to the LCA third-party verifications that are in progress, once the third-party verifications are completed, an additional € 70 million would qualify for alignment, boosting our score to 37%. - 294 - Bekaert Integrated Annual Report 2022 - 295 - Bekaert Integrated Annual Report 2022 - 296 - Bekaert Integrated Annual Report 2022 - 297 - Bekaert Integrated Annual Report 2022 - 298 - Bekaert Integrated Annual Report 2022 Water We use water in our production processes, and we want to save every drop. We are taking a close look at our water consumption and are implementing programs to reduce our water usage, especially, but not exclusively, in water stressed areas. Our ambition is to reduce our freshwater intake in water stressed areas by -15% by 2030 compared to 2019. After use, and reuse many times over, any water that cannot be further recycled is treated and cleaned before it leaves our premises. All water data is combined data (consolidated entities + joint ventures) GRI 303-1 Water withdrawal Total water withdrawal was 8 402 megaliter (ML) of which 3 391 ML from areas with water stress. Freshwater withdrawal by source: •Surface water: 583 ML of which 546 ML from areas with water stress •Groundwater: 2 503 ML of which 791 ML from areas with water stress •Third party water: 5 316 ML of which 2 054 ML from areas with water stress: –4 423 ML from surface water of which 1 742 ML from areas with water stress –893 ML from groundwater of which 312 ML from areas with water stress All data is provided by the respective plants. Water stress: in areas with water stress, the ratio of total annual water withdrawal to total available annual renewable water supply is high (40-80%) or extremely high (>80%) 1 megaliter (ML) = 1 000 000 liter Water withdrawal (in ML) 2019 (baseline) 2020¹ 2 021 2 022 Total water withdrawal 9 237 8 122 8 975 8 402 from areas with water stress 3 564 3 141 3 619 3 391 Freshwater withdrawal by source (in ML) 2019 (baseline) 2020¹ 2 021 2 022 Surface water 761 587 626 583 from areas with water stress 559 530 605 546 Groundwater 2 355 2 201 2 571 2 503 from areas with water stress 741 640 813 791 Total third-party water 6 121 5 335 5 778 5 316 from areas with water stress 2 264 1 971 2 201 2 054 Third-party water by source (in ML) 2019 (baseline) 2020¹ 2021 2022 Third-party water from surface water 5 581 4 818 4 970 4 423 from areas with water stress 2 007 1 752 1 846 1 742 Third-party water from ground water 540 517 808 893 from areas with water stress 257 220 355 312 ¹ 2020 data has been restated due to improved reporting GRI 2-4, GRI 303-3 - 299 - Bekaert Integrated Annual Report 2022 Water discharge Total water discharge is 3873 ML in 2021 of which 1644 ML to areas with water stress. Water discharge by destination: •Surface water: 1 421 ML of which 485 ML freshwater and 936 ML other water •Groundwater: 0 ML •Sea water: 17 ML of which 0 ML freshwater and 17 ML other water •Third party water: 2 435 ML of which 147 ML freshwater and 2 288 ML other water Water discharge to areas with water stress was 1 644 ML of which 526 ML freshwater and 1 118 ML other water. Our water discharge is filtered at our own premises. All data is provided by the respective plants. Water stress: in areas with water stress, the ratio of total annual water withdrawal to total available annual renewable water supply is high (40-80%) or extremely high (>80%) 1 megaliter (ML) = 1 000 000 liter Water discharge (in ML) 2020¹ 2021 2022 Total water discharge 3712 4164 3873 to areas with water stress 1486 2032 1644 Water discharge by destination (in ML) 2020¹ 2021 2022 Surface water 1 511 1 466 1 421 Freshwater 462 502 485 Other water 1 049 964 936 Groundwater 0 0 0 Sea water 91 100 17 Freshwater Other water 91 100 17 Third-party water 2 110 2 598 2 435 Freshwater 221 94 147 Other water 1 889 2 504 2 288 Water discharge to areas with water stress 1 486 2 032 1 644 Freshwater 527 557 526 Other water 959 1 475 1 118 ¹ 2020 data has been restated due to improved reporting GRI 2-4, GRI 303-2, GRI 303-4 - 300 - Bekaert Integrated Annual Report 2022 Water consumption Water consumption = total water withdrawal - total water discharge. Total water consumption was 4 529 ML of which 1 747 ML from areas with water stress All data is provided by the respective plants. Water stress: in areas with water stress, the ratio of total annual water withdrawal to total available annual renewable water supply is high (40-80%) or extremely high (>80%) 1 megaliter (ML) = 1 000 000 liter Water consumption (in ML) 2020¹ 2021 2022 Total water consumption 4 410 4 811 4 529 From areas with water stress 1 655 1 587 1 747 ¹ 2020 data has been restated due to improved reporting GRI 2-4, GRI 303-5 - 301 - Bekaert Integrated Annual Report 2022 Waste Our ambition is to reduce our waste volume by 25% by 2030 compared to 2019. All steel scrap is returned to the steel mills for recycling. Waste data is combined data (consolidated entities + joint ventures). Steel scrap in ton 2019 2020 2021 2022 Preparation for re-use 0 0 0 0 Recycling 117 879 101 727 107 760 101 530 Other recovery operations 0 0 0 0 Steel scrap = steel wire scrap, end-of-life spools and machine spare parts, other steel-based scrap. GRI 306-4 Recycled input material Recycled input material (consolidated, excluding JVs) 2020 2021 2022 % Recycled content in wire rod (purchased by the steel mills) 26 26 27 % scrap in wire rod (purchased by the steel mills + through recycling in their own production process) 38 34 32 GRI 301-2 - 302 - Bekaert Integrated Annual Report 2022 Chemical management We have a product stewardship framework and related capability building in place. The framework covers: •standardized chemical management, •environmental compliance of both raw materials and finished products, and •related customer expectations. We have a global chemical management standard and a global tool in place that allows efficient implementation of the standard, strict governance process and more proactive product compliance. In line with the ISO 14001 requirements, a company-wide process for lifecycle management has been deployed. The process aims to identify potentially significant environmental impacts in the entire supply chain and considering all the stages of the lifecycle of our finished products and how to address them in an appropriate way. At Bekaert, we closely monitor the EU REACH regulation to confirm compliance in a proactive way related both to the raw materials we are using and to our finished products. We are in contact with our suppliers to verify their REACH compliance in the supply process of raw materials. Furthermore, we identify substances of concern and start proactive phase-out programs. In case we identify important regional differences in hazard classification and exposure limits, we are committed to applying our own company-specific hazard classification and exposure limits which are mandatory if no stricter regulations apply. GRI 403-7 Social statements - 304 - Bekaert Integrated Annual Report 2022 Health & safety Safety programs The Bekaert safety programs guide all employees toward the same safety mindset and behaviors worldwide. BeCare: no harm to anyone @Bekaert It is our goal to create a no-harm-to-anyone working environment at Bekaert. We commit to do whatever is necessary to eliminate accidents in the workplace. BeCare, the Bekaert global safety program, launched in 2016, is our way to do this. It focuses on creating an interdependent safety culture, promoting strong risk awareness, removing risk tolerance, and investing in the necessary tools and equipment to create a safer working environment. BeCare has changed the behavior in our plants and offices and in our meetings with business partners. Bekaert also launched a development program for site managers and regional operations leaders that builds awareness, knowledge and understanding about SH&E related compliance and liabilities. More information on BeCare+ can be found in Part I of this report: Our Performance in 2022: People. GRI 403-2 Safety procedures Bekaert has developed several safety procedures and standards that are applicable in all our plants worldwide. They aim for a coherent and standardized approach of processes and actions across the group. GRI 403-2 In line with our BeCare safety program, and to put more emphasis on safety in specific situations, our employees must follow the Life Saving Rules. The rules are simple dos and don’ts in 10 hazardous situations that have the highest potential to cause death. They apply to everyone: employees, contractors and visitors. Moreover, they are not only applicable at the workplace, but also highly recommended on the road, at home and in other situations. Abiding by these rules is a condition of employment at and access to our sites. Following these rules and helping others to do so will save lives. That is why consequence management applies to those who do not follow the Life Saving Rules. GRI 403-2, GRI 403-7 Apart from the behavioral component, we realize that equipment safety is also key in our efforts to improve our safety performance. To meet this need, we have an equipment safety standard in place that describes the requirements to which all new and existing equipment should comply. Our Engineering departments start their design process from this standard when they develop a new machine. Existing machinery is evaluated on its safety-related risks via a risk assessment method. The method prioritizes the risks that could have the most severe impact and are most likely to happen. Bekaert has approved a safety investment program that will be rolled out between 2022 and 2025 as another enabler to create a safe environment for all people at the workplace. GRI 403-2 - 305 - Bekaert Integrated Annual Report 2022 A healthy workplace In addition to the BeCare and safety investment initiatives aimed at eliminating safety risks, we also want to create and maintain a healthy workplace for our employees. Workplace conditions We monitor workplace conditions such as noise, dust, ergonomics and temperature, and are defining and implementing a roadmap to make further improvements. Our new investments consider strict standards with regards to all working conditions. GRI 403-3 All employees and subcontractors working in the Bekaert plants worldwide wear the safety and health equipment provided to avoid the risks of injuries and health impact. This includes uniforms, dust filters, eye and ear protection, and grippers and hoists to lift and handle spools, coils, and pallets in an ergonomic way. Bekaert will not purchase or renew the lease contract of diesel-powered forklifts and other internal trucks in the plants, unless there is no alternative, to eliminate the CO2 emissions. GRI 403-3 Handling and storing chemicals Throughout the company, we pay special attention to the safe handling and storage of chemicals. A database records all chemicals used in our plants and strict health and safety guidelines apply to our employees. Employees who are exposed to potentially hazardous materials go through a medical check-up every six months. We are developing and optimizing techniques and processes that eliminate the need for hazardous chemicals during heat treatment processes. GRI 403-2, GRI 403-3, GRI 403-7 Mental health 74% of our employees in the Bekaert subsidiaries have access to a globally deployed employee assistance program that focuses on mental health. In addition, other specific mental health programs run in various entities and are particularly oriented on the impact of the pandemic on well-being. GRI 403-3, GRI 403-6 More information on the standards we comply with regarding the handling of chemicals and other substances that may cause potential environmental and health risks, are included in Part II: Environmental Statements of this report. - 306 - Bekaert Integrated Annual Report 2022 Safety data •The Total Recordable Incident Rate decreased with 26% compared to 2021. •The Lost-Time Incident Frequency Rate was 20% lower than last year, driven by the reduction in incidents that led to lost time. •The number of incidents leading to life-altering injuries decreased from eight cases in 2021 to seven in 2022. •11% of all incidents either led or could potentially have led to a life-altering injury, down from 14% in 2021. •The number of incidents that happened in high-risk situations (but not necessarily resulting in a serious injury) has decreased by 28% in 2022. •No fatal accidents occurred on our premises in 2022. 46% of the injuries that happen at Bekaert involve hands and fingers. Despite all safety measures, six of these incidents in 2022 were life-altering, compared to eight life-altering incidents in 2021. In safety procedures and during safety trainings, special attention is given to the prevention of hand and finger injuries. Other body parts injured were head and neck (18%), upper limbs (13%), lower limbs (9%), feet and toes (7%) and torso, back and organs (7%). GRI 403-9 In 2022 Bekaert expanded, as intended, its certifications against the well-known international management system standards for safety. Bekaert has a corporate integrated management system. This centrally governed management system is the basis of ISO 45001 certification (safety) of 28 sites (37% of the manufacturing plants). Increased certification to ISO 45001 is an ongoing goal. GRI 403-1, GRI 403-8 On average, each Bekaert employee received 7 hours of safety-related training in 2022. GRI 403-5 Key safety performance indicators Bekaert consolidated 2019 2020 2021 2022 TRIR 5.62 4.30 3.93 3.01 LTIFR 3.39 2.94 2.27 1.92 SI rate 0.13 0.02 0.10 0.12 Key safety performance indicators Bekaert combined (consolidated plants + joint ventures) 2019 2020 2021 2022 TRIR 5.18 4.02 3.67 2.71 LTIFR 3.08 2.65 2.08 1.66 SI rate 0.13 0.02 0.12 0.11 GRI 403-9 - 307 - Bekaert Integrated Annual Report 2022 Incident rates per region Group data per region 2021 EMEA Latin America North America Asia Pacific JVs in Brazil and Colombia Bekaert Consolidated Bekaert Combined LTIFR1 All (Bekaert payroll employees + contractors) 5.88 1.71 1.48 0.62 0.95 2.27 2.08 Bekaert payroll employees 6.06 1.82 1.64 0.71 1.31 2.59 2.42 Contractors 4.34 1.34 0 0.38 0 1.08 0.89 SI rate1 All (Bekaert payroll employees + contractors) 0.32 0 0.3 0 0.21 0.1 0.12 Bekaert payroll employees 0.29 0 0.33 0 0.29 0.11 0.13 Contractors 0.62 0 0 0 0 0.08 0.07 TRIR1 All (Bekaert payroll employees + contractors) 7.23 1.71 18.91 1.14 2.1 3.93 3.67 Bekaert payroll employees 7.28 1.82 19.97 1.23 2.63 4.44 4.2 Contractors 6.82 1.34 9.11 0.089 0.75 2 1.77 Group data per region 2022 EMEA Latin America North America Asia Pacific JVs in Brazil and Colombia Bekaert Consolidated Bekaert Combined LTIFR1 All (Bekaert payroll employees + contractors) 5.03 1.53 1.60 0.39 0.00 1.92 1.66 Bekaert payroll employees 5.19 1.47 1.79 0.54 0.00 2.21 1.94 Contractors 3.72 1.72 0.00 0.00 0.00 0.83 0.68 SI rate1 All (Bekaert payroll employees + contractors) 0.13 0.31 0.27 0.04 0.00 0.12 0.11 Bekaert payroll employees 0.14 0.40 0.00 0.00 0.00 0.11 0.10 Contractors 0.00 0.00 2.46 0.13 0.00 0.17 0.14 TRIR1 All (Bekaert payroll employees + contractors) 6.26 1.73 10.66 0.64 0.88 3.01 2.71 Bekaert payroll employees 6.48 1.73 10.76 0.78 0.93 3.43 3.12 Contractors 4.35 1.72 9.83 0.26 0.74 1.42 1.29 1 Contractor: employee of a supplier who performs predefined tasks on a regular base on our premises. This includes but is not limited to employees of cleaning services, security services, temporary employment agencies (interim workers). GRI 403-9 - 308 - Bekaert Integrated Annual Report 2022 Incident rates per gender Group data by gender (payroll employees) Male Female 2021 2022 2021 2022 LTIFR1 2.43 1.92 2.31 2.02 SI rate2 0.11 0.09 0.33 0.16 TRIR3 4.30 3.18 3.47 2.65 ¹ LTIFR: Lost Time Incident Frequency Rate: number of lost time incidents per million worked hours. ² SI: real Serious Injuries per million worked hours. ³ TRIR: Total Recordable Incident Rate: all recorded incidents per million worked hours. GRI 403-9 - 309 - Bekaert Integrated Annual Report 2022 Communicating with and engaging our employees People engagement and empowerment have always been important at Bekaert. We empower our teams with responsibility, authority and accountability, and count on the engagement of every Bekaert employee in driving a higher-level performance. •The Bekaert Intranet is a place where employees can share and obtain knowledge, find relevant information fast, connect with colleagues, collaborate with team members on common development programs, and actively contribute to impactful communications across the company. Moreover, the company’s internal social media platform Yammer and video platform Stream are intensively used tools to share best practices, celebrations and ideas. Our employees regularly receive internal news bulletins with corporate messages and business updates. •Every quarter, Bekaert’s CEO and CFO invite all managers and salaried professionals worldwide to join an internal webcast at the occasion of the financial news releases. They share information on Bekaert’s performance and the actions to be taken and answer the questions raised. The sessions are recorded and can be replayed afterwards via our internal online video platform. •Next to the quarterly financial updates, employees are also invited to Communication Town Halls, hosted by the CEO and the members of the Bekaert Group Executive. They share insights on market developments, decisions made, and strategies established and implemented. These sessions engage active interaction with all participants. •Bekaert has its own employee podcast, Bekaert Bits & Bytes. The podcast shares stories from colleagues across the globe sharing inspiring ideas and discussions on highly relevant themes. GRI 2-23, GRI 2-24, GRI 2-26, GRI 2-29 - 310 - Bekaert Integrated Annual Report 2022 Learning & development On average, each employee received 34 hours of training in 2022. Average hours of training per employee per region 2020 2021 2022 Male Female Male Female Male Female EMEA Blue collars 12 10 37 37 40 32 Salaried professionals 15 8 25 26 36 25 Management 12 16 17 20 17 22 Latin America Blue collars 7 7 39 150 62 221 Salaried professionals 7 6 23 21 29 27 Management 11 31 34 43 27 46 North America Blue collars 35 33 22 14 77 103 Salaried professionals 22 7 17 9 9 6 Management 11 8 20 19 14 12 Asia Pacific Blue collars 23 31 37 58 23 29 Salaried professionals 12 13 24 16 25 22 Management 14 21 39 27 25 22 Note: in 2022, intensive training programs were set up in Latin America and North America to bring more female workers in manufacturing and other operational roles. This clarifies the high average number of training hours for female operators in the region. GRI 404-1 On average, each employee received 10 hours of mandatory training in 2022. GRI 404-1 On average each employee received 7 hours of safety training in 2022. GRI 403-5, GRI 404-1 On average each employee received 1 hour of well-being training in 2022. GRI 403-6, GRI 404-1 Labor unions and collective bargaining agreements Communication also includes the information exchange and negotiations with labor unions. We recognize the right of any employee to join or to refrain from joining a labor union. 62% of our employees worldwide are covered by collective bargaining agreements. Agreements with trade unions are locally concluded and include the following elements: •Personal protective equipment •Right to refuse unsafe work •Joint management-employee health and safety committees •Participation of worker representatives in health and safety matters •Inspections, audits, and accident investigations •Training and education •Complaints mechanism •Periodic inspections GRI 2-29, GRI 2-30, GRI 407-1 Health and safety committees Our integral workforce is represented in formal joint management-worker health and safety committees. They help monitor and formulate advice on occupational health and safety programs. GRI 2-29, GRI 403-4 - 311 - Bekaert Integrated Annual Report 2022 Highest ethical standards Code of Conduct Our hiring policy states that every new employee receives a copy of our Code of Conduct and every year, all salaried professionals and managers worldwide are required to read the Bekaert Code of Conduct, to pass a test on business ethics cases, and to renew their commitment to the principles of the Code and Bekaert values via Bekaert’s online global learning platform. GRI 2-24 As part of the annual commitment process a mandatory training session reminds employees of the principles to follow when confronted with ethical choices. 100% of the managers and 100% of the salaried professionals renewed their commitment to the Code of Conduct in 2022 and it is our goal to maintain full annual commitment results. Operators are being retrained and recertify on the Code of Conduct every three years. Bekaert provides extensive compliance trainings to employees on a number of key topics including but not limited to anti-bribery and -corruption, antitrust, data privacy, compliance awareness, speak up culture and trade compliance (economic sanctions). Bekaert’s training program includes a combination of classroom style/live trainings and online training modules. We use a risk-based approach and tailor training to selected functions based on the risks associated with their role. Bekaert modifies its training plan throughout the year to address compliance trends and lessons learned from internal investigations. The total number of mandatory e-course assignments more than doubled compared to 2021, resulting in more than 3 compliance e-courses per manager and salaried professional. All managers and salaried professionals also completed the mandatory Privacy e-course. In 2022, we re-deployed a mandatory anti-bribery and anti-corruption course to all managers at Bekaert and to salaried professionals employed in departments that have frequent contacts with third parties. 100% of the addressees completed the training and passed the test. A dedicated training on anti-trust was assigned to a specific target audience of managers, based on Hay classification level and function. 100% of the addressees completed the training and passed the test. Regional compliance e-trainings were also deployed using a risk-based approach e.g. on the topics of conflict of Interest, anti-harassment. Live training on selected Compliance risks and policies are also provided to specific functional groups. In addition, the Group Internal Audit department regularly audits adherence to the respective policies and procedures and recommends corrective actions where necessary. All policies are available on the Bekaert Intranet. GRI 2-24, GRI 205-1, GRI 205-2, GRI 408-1, GRI 409-1 Our Integrity reporting channels are one of several communication vehicles for asking questions or raising concerns. Employees are encouraged to speak up and raise concerns by whichever method they feel most comfortable. They may reach out to their HR representative, to our Group Legal or Group Ethics and Compliance, to Internal Audit or to their direct manager or supervisor. Alternatively, they can send an email to integrity@bekaert.com or report a concern via the Bekaert website where reports can also be placed anonymously. A reporting channel is also available to third-parties. In 2022, we published our Investigation Protocol which ensures the quality and consistency of our investigations and their respective reporting requirements. In 2022, 73 integrity allegations were reported through our integrity reporting channels. None of the allegations constituted a violation by Bekaert employees of integrity breaches related to discrimination, bribery, or - 312 - Bekaert Integrated Annual Report 2022 corruption. Each allegation case was thoroughly investigated. Remedial measures were taken as necessary for all substantiated cases and for those cases where improvement areas were revealed. All incoming reports are handled with the highest level of confidentiality. Bekaert takes all necessary measures to protect employees against any form of retaliation when reporting a concern. GRI 2-25, GRI 205-3, GRI 406-1 Embracing diversity All diversity data apply to Bekaert subsidiaries (excluding joint ventures). Nationality diversity Throughout our organization, 449 employees have another nationality than that of the country they work in. The countries where we have the largest foreign employee workforce are Chile (132 foreign employees or 9% of the Chilean workforce), Belgium (95 foreign employees or 6% of the Belgian workforce) and Slovakia (78 foreign employees or 3% of the Slovakian workforce). GRI 2-7 Nationality diversity - 31 December 2022 # People # Nationalities Blue collars 17 128 47 Salaried professionals 4 738 51 Management 1 1 749 54 Total Bekaert employees 23 615 75 ¹ B7 and above (Hay classification reference) Nationality diversity in the Board of Directors and in the Leadership Team of Bekaert: Nationality diversity - 31 December 2022 # People # Nationalities # Non-native ¹ % Non-native Board of Directors 11 7 6 55% Bekaert Group Executive (BGE) 8 6 6 75% Senior Vice Presidents (B16-B18) ² 12 5 5 42% Next leadership level (B13-B15) ² 92 18 52 57% Total leadership team 112 213 63 56% ¹ Non-native = nationality other than the one of the mother company’s social seat (i.e. Belgium) ² Hay classification reference ³ Sum of nationalities across leadership team GRI 405-1 - 313 - Bekaert Integrated Annual Report 2022 Gender diversity Gender diversity - 31 December 2022 % Male % Female Blue collars 93% 7% Salaried professionals 69% 31% Management ¹ 79% 21% Total Bekaert employees 87% 13% 1 B7 and above (Hay classification reference) GRI 2-7 The manufacturing character of Bekaert’s operations explains the predominantly male population among operators. Bekaert adopts a recruitment and promotion policy that aims to gradually generate more diversity, including gender diversity. This fits within the Diversity & Inclusion program of the company. 28% of the managers and salaried professionals of the Bekaert subsidiaries are female (as per year-end 2022). We are committed to increase this share in support of gender equality. Our target is to achieve a ratio of 40% by 2030 through an annual improvement of +1.5% in the next coming eight years. This target has also been added, as of 2022 onwards, in the short-term incentives targets for Executive Management and a diversity target has been retained as one of the 2023 short-term incentives criteria for the management. GRI 2-7 Gender diversity in the Board of Directors and in the Leadership Team of Bekaert: Gender diversity - 31 December 2022 # People % Male % Female Board of Directors 11 55% 45% Bekaert Group Executive (BGE) 8 87% 13% Senior Vice Presidents (B16-B18) 12 92% 8% Next leadership level (B13-B15) 92 82% 18% Total leadership team 112 83% 17% More information about gender diversity in the Board of Directors can be found in Part I: Leadership, and in Part II: Governance Statements of this report. GRI 405-1 - 314 - Bekaert Integrated Annual Report 2022 Age diversity Age diversity - 31 December 2022 % Under 30 years old % 30-50 Years old % Over 50 years old Blue collars 17% 68% 15% Salaried professionals 12% 70% 18% Management 1 3% 67% 30% Total Bekaert employees 15% 68% 17% ¹ B7 and above (Hay classification reference) GRI 2-7 Age diversity in Bekaert’s highest governance bodies: Age diversity - 31 December 2022 # People % 30-50 Years old % Over 50 years old Board of Directors 11 45% 55% Bekaert Group Executive (BGE) 8 13% 87% Senior Vice Presidents (B16-B18) ¹ 12 33% 67% Next leadership level (B13-B15) ¹ 92 45% 55% Total leadership team 112 41% 59% ¹ Age diversity in Bekaert’s highest governance bodies: Hay classification reference GRI 405-1 Employment data: Region - 31 December 2022 EMEA North America Latin America Asia Pacific TOTAL Blue Collars 5 984 1 208 2 039 7 897 17 128 Male 5 127 1 138 1 969 7 649 15 883 Female 857 70 70 248 1 245 Salaried professionals 1 424 256 1 224 1 834 4 738 Male 923 154 791 1 401 3 269 Female 501 102 433 433 1 469 Management 779 158 178 634 1 749 Male 620 123 146 491 1 380 Female 159 35 32 143 369 Total Male 6 670 1 415 2 906 9 541 20 532 Total Female 1 517 207 535 824 3 083 Grand total 8 187 1 622 3 441 10 365 23 615 GRI 2-7 89% of people employed by Bekaert have a permanent contract, 11% has a temporary contract. Employees with a temporary contract are usually on the payroll of external organizations and agencies (Special Economic Zones, employment agencies) and are hence not included in the Bekaert payroll numbers. 99% of the Bekaert employees work full-time. - 315 - Bekaert Integrated Annual Report 2022 Workers who are not employees (contingent workers) - 31 December 2022 EMEA North America Latin America Asia Pacific TOTAL Blue Collars 180 7 1 387 575 Male 111 7 0 358 476 Female 69 0 1 29 99 Salaried professionals 15 1 20 33 69 Male 7 0 11 26 44 Female 8 1 9 7 25 Management 14 0 0 1 15 Male 7 0 0 1 8 Female 7 0 0 0 7 Total Male 125 7 11 385 528 Total Female 84 1 10 36 131 Grand total 209 8 21 421 659 Contingent workers are workers who are not on our payroll. They provide temporary services mostly through agencies or consulting firms. 99% of the contingent workers work full-time. GRI 2-8 New hires Bekaert consolidated entities New hires in 2022 Total Male Female number of new hires 2 039 1 637 402 % new hires on total number of employees 9% 8% 13% % new hires on total number of new hires 80% 20% GRI 2-7, GRI 401-1 New hires in 2022 per region EMEA Latin America North America Asia Pacific number of new hires 707 446 371 515 % new hires on total number of employees 9% 13% 23% 5% % new hires on total number of new hires 35% 22% 18% 25% GRI 2-7, GRI 401-1 New hires in 2022 per employee category Blue collar Salaried professional Management % new hires on total number of employees 8% 10% 11% % new hires on total number of new hires 68% 23% 9% GRI 2-7, GRI 401-1 Number of vacancies in 2022 # vacancies 618 % vacancies filled within 90 days 80% % vacancies open longer than 90 days 20% - 316 - Bekaert Integrated Annual Report 2022 Turnover Bekaert consolidated entities excluding employees with a contract of definite duration and excluding collective dismissals: Employee turnover in 2022 Total Male Female turnover (number) taking into account voluntary leave 769 634 135 turnover (number) taking into account all personnel exits (voluntary leave – dismissal – retirement – death in service) 1 432 1 214 218 turnover (%) taking into account voluntary leave 4% 4% 5% turnover (%) taking into account all personnel exits (voluntary leave – dismissal – retirement –death in service) 7% 7% 8% GRI 2-7, GRI 401-1 Employee turnover in 2022 per region EMEA Latin America North America Asia Pacific turnover (number) taking into account voluntary leave 301 138 145 185 turnover (number) taking into account all personnel exits (voluntary leave – dismissal – retirement – death in service) 544 319 242 327 turnover (%) taking into account voluntary leave 4% 4% 9% 2% turnover (%) taking into account all personnel exits (voluntary leave – dismissal – retirement – death in service) 7% 10% 16% 4% GRI 2-7, GRI 401-1 Employee turnover in 2022 per employee category Blue collar Salaried professional Management turnover (number) taking into account voluntary leave 440 235 94 turnover (number) taking into account all personnel exits (voluntary leave – dismissal – retirement – death in service) 938 353 141 turnover (%) taking into account voluntary leave 3% 5% 6% turnover (%) taking into account all personnel exits (voluntary leave – dismissal – retirement –death in service) 6% 8% 9% GRI 2-7, GRI 401-1 Employee turnover in 2022 per age category Under 30 years old 30-50 years old Over 50 years old turnover (number) taking into account voluntary leave 203 460 106 turnover (number) taking into account all personnel exits (voluntary leave – dismissal – retirement – death in service) 311 771 350 turnover (%) taking into account voluntary leave 7% 3% 3% turnover (%) taking into account all personnel exits (voluntary leave – dismissal – retirement – death in service) 11% 5% 10% GRI 2-7, GRI 401-1 - 317 - Bekaert Integrated Annual Report 2022 Performance management Performance reviews To stimulate high performance, commitment, and the continuous development of all employees, the group targets are deployed into team and personal targets for everyone. Bekaert has developed and deployed a People Performance Management (PPM) program. PPM is our way of looking at people performance and how we can better achieve our goals in the future. As such, PPM is part of a larger effort to become a much more performance-driven organization. The performance management process includes two-way personal development reviews, transparency, feedforward and leadership behavior. Enablers for the people performance management practice are a clear alignment of team and individual goals with business priorities; frequent performance steering and coaching; fair recognition in line with the achieved performance; and better supporting tools that allow employees to keep track of their performance and feedforward actions throughout the year. Percentage of employees who received a performance review in 2022¹ Employee category Percentage Managers 99% Salaried professionals 95% Blue collars 70% ¹ Excluding joint ventures GRI 404-3 Remuneration & benefits We offer competitive salaries and benefits designed to enhance the financial, physical and overall well-being of our employees and their families. Our offerings differ from country to country and are often adapted to local social security policies. We provide a wide range of employee benefits that may include retirement benefits, healthcare plans, service awards, labor accident disability coverage and paid leave. For detailed information on employee benefits, we refer to Part II Financial Statements section 6.15. GRI 201-3 Benefits provided to payroll employees in significant locations of operation Benefit Belgium Chile China Indonesia Slovakia Turkey US Life insurance Yes Yes Yes Yes Yes Yes Yes Health care Yes Yes Yes Yes No Yes Yes Disability coverage Yes Yes Yes Yes Yes Yes Yes Parental leave Yes Yes Yes Yes Yes Yes Yes Retirement provision Yes Yes Yes Yes Yes Yes Yes Stock ownership No No No No No No No These benefits are applicable to payroll employees - not to contingent staff. Significant locations are locations with > 1 000 employees on the payroll (part-time, full-time, definite, indefinite). GRI 401-2 - 318 - Bekaert Integrated Annual Report 2022 Representation of females in salary bands Blue collar wages are set in accordance with local collective labor agreements, in general they are driven by numbers of hours worked, experience and skills of the incumbent. Salary levels for salaried professionals and managers are based on a job classification system. Jobs with similar scope, required knowledge, levels of accountability and leadership requirements are clustered in so-called salary bands. Job classifications are determined independent from the incumbent and are as a consequence gender-neutral. The table below shows the representation of females in each of those salary bands, indicating female representation is higher in lower salary bands. Proportion of female employees per salary band Broadband % Female % Male Bekaert Group Executive 13 87 Senior Vice Presidents 8 92 Senior Management 18 82 Mid Level Management 18 82 Junior Management 22 78 Salaried Professioinals 32 68 Total 29 71 Per salary band a midpoint is determined in reference with the competitive marketplace. Actual base salaries are in general positioned within 25% above or below such midpoint. The so-called compa-ratio measures the distance between actual base salary and said midpoint; this is calculated as the ratio of actual base salary to the midpoint of the relevant salary band. The gender pay gap has been calculated as the difference between median compa-ratio for females versus median compa-ratio for males; this method allows for meaningful comparisons across countries and across salary bands. Blue collar wages are set in accordance with local collective labor agreements. In general they are driven by numbers of hours worked, experience and skills of the incumbent. The table below plots the difference in median compa-ratio for females and males: Region Gender pay gap (%) EMEA -4.0 Latin America -7.6 North America -2.0 Asia Pacific -6.4 Total -4.3 GRI 405-2 The global Gender Pay Gap at Bekaert is 4.3%, with differences between countries and a significant number of countries without pay gap. Overall, measures are in place to avoid this pay gap and an active plan is in place to close the gap in a short time period. Annual total compensation ratio Information on the annual total compensation ratio is available in Part II - 11. Executive remuneration in a wider context of the Corporate Governance Statement of this report. GRI 2-21 Termination & severance Bekaert has restructured several sites in 2022. The management only implements such measures when other options to restore the performance in view of securing a sustainable, profitable future, have failed or are non-existent. In implementing such measures, the management aims at mitigating the social impact for the affected employees by considering re-industrialization, re-employment help and a fair severance package. GRI 404-2 - 319 - Bekaert Integrated Annual Report 2022 Social contributions & other community engagement programs Contributions in 2022 in € Contributions to political parties, campaigns, events 0 Contributions to disaster relief 450 000 Estimated total of other contributions funded by the company 350 000 Total number of support programs ~ 100 Of which programs with voluntary and training hours ~ 25% Some amounts are approximate numbers including estimates. Bekaert is establishing a tool to monitor support program spending and voluntary hours on an ongoing basis. GRI 415-1 Main programs supported in terms of monetary donations in 2022 Total Bekaert funding Other funding Ukraine support 450 000 Of which funded by the company 437 400 Of which collected through employee initiatives 12 600 River Cleanup 25 000 25 000 Pontis Foundation Slovakia (on top of Ukraine support) 100 000 Of which funded by the company 30 000 Of which collected through employee initiatives 5 000 Of which funding through tax assignation 65 000 University partnership supporting students in Burgos (Spain) 50 000 50 000 Jiangyin Charity Foundation (China) 28 800 28 800 Ventilators to hospitals (Romania, India) 37 500 37 500 Local cultural program support Concepción (Chile) 22 000 22 000 United Way of Rogers (US) 10 000 10 000 GRI 203-2 PART III About this report - 321 - Bekaert Integrated Annual Report 2022 Reporting principles Reporting scope This report covers the consolidated performance indicators for all subsidiaries of the Bekaert Group. Consolidated data apply to the wholly and majority owned subsidiaries of NV Bekaert SA. When specified, the (combined) disclosures in this report include in addition the performance metrics of the joint ventures considered at 100% ownership. GRI 2-2 Reporting period This report covers the activities between 1 January 2022 and 31 December 2022, unless stated differently and if relevant for the report. Bekaert reports its financial results twice per year (half-year results and full-year results). Bekaert reports annually on its sustainability performance. GRI 2-3 Process for defining reporting content The content of this report has been defined considering the most significant indicators of our activities, the impact of and commitment to the company’s interest groups, the efforts in enhancing sustainability and the level of detail established by the GRI Standards and the current NFRD (Non-Financial Reporting Directive) as well as guidelines of CSRD (Corporate Sustainability Reporting Directive). This report complies with iXBRL/ESEF regulations and includes the outcome of the EU Taxonomy eligibility and alignment disclosure requirements. The structure and content of this integrated annual report are based on the framework Guidelines of Value Reporting Foundation (International Reporting Council (IIRC) & Sustainability Accounting Standards Board (SASB). The consolidated financial statements have been prepared in accordance with and comply with the International Financial Reporting Standards (IFRS) which have been endorsed by the European Union. Our interest groups are the Bekaert employees, suppliers, customers, shareholders, partners, local governments and the communities in which we are active. - 322 - Bekaert Integrated Annual Report 2022 Sustainability standards This report has been prepared in accordance with the GRI Standards. Global Reporting Initiative (GRI) is a non-profit organization that promotes economic, environmental and social sustainability. Bekaert’s responsible performance in 2022 has been recognized by its inclusion in the Solactive GBS Developed Markets Index, the GBS Global Markets Index, the Global Cyber Security Custom Index, the ISS ESG Screened Markets Small Cap Index, the Solactive ISS ESG Screened Small Cap Index and the ISS SDG Aligned Global Markets Index - a reference benchmark for top performers in terms of corporate social responsibility based on Vigeo - Eiris’ research - as well as in Kempen SRI. In 2022 rating agencies MSCI and ISS-ESG have analyzed the Environment, Social and Governance performance of our company, based on our publicly available information. Their reports are used by institutional investors and financial service companies. Bekaert received a rating of 'A' in the MSCI ESG Ratings assessment (above average) and 'C' rating in the ISS-ESG rating (on a scale from D- to A+), which is on average within the sector. Bekaert received a silver level in the EthiFinance 2022 campaign, based on it's 2021 data disclosures. EthiFinance is an independent financial and non-financial rating, research and consulting agency. In consideration of Bekaert's medium exposure and strong management, Morningstar Sustainalytics rated Bekaert to be at medium risk of material financial impacts driven by ESG factors. Morningstar Sustainalytics provides high-quality, analytical environmental, social and governance (ESG) research, ratings and data to institutional investors and companies. Bekaert was awarded, for the company’s 2021 data disclosures, a gold recognition level from EcoVadis. Bekaert obtained a score of 75, which positions us in the 98th percentile of the peer group, unchanged from the previous year. EcoVadis is an independent sustainability rating agency whose methodology is built on international CSR standards. In response to growing interest throughout the supply chain to report on the carbon footprint of operations and logistics, Bekaert also participates in the Climate Change and Supply Chain questionnaires of CDP. Bekaert received a B level for the Climate Change listing based on 2021 data disclosures, a two-step improvement versus the previous rating. Bekaert has received a 'A-' score in CDP’s Supplier Engagement Rating (SER), an improvement by 3 steps compared with the previous rating. The Supplier Engagement Rating evaluates the companies’ engagement on climate issues in their value chain, both with suppliers and with customers. Bekaert was included in Euronext’s BEL ESG Index of the leading sustainable companies in Belgium on the basis of 2022 sustainability performance. - 323 - Bekaert Integrated Annual Report 2022 GRI Content Index For the Content Index - Advanced Service, GRI Services reviewed that the GRI content index is clearly presented, in a manner consistent with the Standards, and that the references for all disclosures are included correctly and aligned with the appropriate sections in the body of the report. This service was performed on the English version of the report. Statement of use Bekaert has reported in accordance with the GRI standards for the period 01 January 2022 - 31 December 2022. GRI 1 used GRI 1: Foundation 2021 Applicable GRI sector Not applicable GRI Standard Disclosure Location General disclosures GRI 2: General disclosures 2021 2-1 Organizational details 9, 46, 329 2-2 Entities included in the organization’s sustainability reporting 9, 321 2-3 Reporting period, frequency and contact point 321, 328 2-4 Restatements of information 268, 272, 298-300 2-5 External assurance 268 2-6 Activities, value chain and other business relationships 9, 12, 13, 32, 33, 46-48, 53, 59 2-7 Employees 32, 312-316 2-8 Workers who are not employees 315 2-9 Governance structure and composition 22, 27 2-10 Nomination and selection of the highest governance body 22 2-11 Chair of the highest governance body 22 2-12 Role of the highest governance body in overseeing the management of impacts 22 2-13 Delegation of responsibility for managing impacts 27 2-14 Role of the highest governance body in sustainability reporting 328 2-15 Conflicts of interest 22 2-16 Communication of critical concerns 22 2-17 Collective knowledge of the highest governance body 22 2-18 Evaluation of the performance of the highest governance body 22 2-19 Remuneration policies 22 2-20 Process to determine remuneration 22 - 324 - Bekaert Integrated Annual Report 2022 GRI Standard Disclosure Location 2-21 Annual total compensation ratio 318 2-22 Statement on sustainable development strategy 7, 18, 20, 51 2-23 Policy commitments 32-34, 65, 66, 309 2-24 Embedding policy commitments 34, 66, 309, 311 2-25 Processes to remediate negative impacts 34, 35, 311 2-26 Mechanisms for seeking advice and raising concerns 32, 309 2-27 Compliance with laws and regulations 61 2-28 Membership associations 62, 63 2-29 Approach to stakeholder engagement 32, 33, 310 2-30 Collective bargaining agreements 310 Material topics GRI 3: Material topics 2021 3-1 Process to determine material topics 34-36 3-2 List of material topics 36 Material topic: Financial Performance, Technology Advantage GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 201: Economic Performance 2016 201-1 Direct economic value generated and distributed 39, 44 201-2 Financial implications and other risks and opportunities due to climate change 35 201-3 Defined benefit plan obligations and other retirement plans 317 201-4 Financial assistance received from government 44, 62 Material topic: Compliance GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 415: Public Policy 2016 415-1 Political contributions 75, 319 Material topic: Sustainable supply chain GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 204: Procurement Practices 2016 204-1: Proportion of spending on local suppliers 47 GRI 301: Materials 2016 301-1 Materials used by weight or volume 46, 47, 53 301-2 Recycled input materials used 53, 301 GRI 308: Supplier Environmental Assessment 2016 308-1 New suppliers that were screened using environmental criteria 47 308-2 Negative environmental impacts in the supply chain and actions taken 47 GRI 414: Supplier Social Assessment 2016 414-1 suppliers that were screened using social criteria 47 414-2 Negative social impacts in the supply chain and actions taken 47 Material topic: Climate, Energy & GHG management GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 - 325 - Bekaert Integrated Annual Report 2022 GRI Standard Disclosure Location GRI 302: Energy 2016 302-1 Energy consumption within the organization 267, 269, 270 302-3 Energy intensity 267, 269, 270 302-4 Reduction of energy consumption 269 302-5 Reductions in energy requirements of products and services 56, 59 GRI 304: Biodiversity 2016 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 56 GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 271-273 305-2 Energy indirect (Scope 2) GHG emissions 271, 274, 275 305-3 Other indirect (Scope 3) GHG emissions 276, 278 305-4 GHG emissions intensity 271-274, 277 305-5 Reduction of GHG emissions 271 Material topic: Water GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 303: Water and Effluents 2018 303-1 Interactions with water as a shared resource 56, 73, 298 303-2 Management of water discharge related impacts 56, 299 303-3 Water withdrawal 298 303-4 Water discharge 299 303-5 Water consumption 300 Material topic: Waste & recycling GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 306: Waste 2020 306-2 Management of significant waste related impacts 54, 55 306-4 Waste diverted from disposal 301 Material topic: Cyber & data security GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 418: Customer Privacy 2016 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data 61 Material topic: Health & safety GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 - 326 - Bekaert Integrated Annual Report 2022 GRI Standard Disclosure Location GRI 403: Occupational Health and Safety 2018 403-1 Occupational health and safety management system 68, 306 403-2 Hazard identification, risk assessment, and incident investigation 68, 304, 305 403-3 Occupational health services 305 403-4 Worker participation, consultation, and communication on occupational health and safety 310 403-5 Worker training on occupational health and safety 68, 69, 306, 310 403-6 Promotion of worker health 305, 310 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 302, 304, 305 403-8 Workers covered by an occupational health and safety management system 306 403-9 Work-related injuries 68 Material topic: Talent GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 401: Employment 2016 401-1 New employee hires and employee turnover 315, 316 401-2 Benefits provided to full-time employees that are not provided to temporary or parttime employees 317 GRI 404: Training and Education 2016 404-1 Average hours of training per year per employee 66, 310 404-2 Programs for upgrading employee skills and transition assistance programs 66, 318 404-3 Percentage of employees receiving regular performance and career development reviews 316 GRI 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees 312-314 405-2 Ratio of basic salary and remuneration of women to men 318 GRI 406: Non-discrimination 2016 406-1 Incidents of discrimination and corrective actions taken 312 GRI 407: Freedom of Association and Collective Bargaining 2016 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk 47, 66, 310 Material topic: Human rights GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 408: Child Labor 2016 408-1 Operations and suppliers at significant risk for incidents of child labor 47, 66, 311 GRI 409: Forced or Compulsory Labor 2016 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor 47, 66, 311 Material topic: Ethical standards GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 205: Anti-corruption 2016 205-1 Operations assessed for risks related to corruption 66, 311 205-2 Communication and training about anti-corruption policies and procedures 66, 311 205-3 Confirmed incidents of corruption and actions taken 312 Material topic: Community relations GRI 3: Material topics 2021 3-3 Management of material topics 34, 36, 47, 51-56, 59, 61, 66, 68, 69, 71, 73, 74 GRI 203: Indirect Economic Impacts 2016 203-2 Significant indirect economic impacts 319 GRI 413: Local Communities 2016 413-1 Operations with local community engagement, impact assessments, and development programs 71, 73, 74 - 327 - Bekaert Integrated Annual Report 2022 Management As of end of March 2023 Bekaert Group Executive Oswald Schmid Chief Executive Officer Juan Carlos Alonso Chief Strategy Officer Kerstin Artenberg Chief Human Resources Officer Taoufiq Boussaid Chief Financial Officer Gunter Van Craen Chief Digital & Information Officer François Desné Divisional CEO Steel Wire Solutions Yves Kerstens Divisional CEO Specialty Businesses and Chief Operations Officer Annie Xu-Huhmann Divisional CEO Rubber Reinforcement Combined ad interim with the role of Divisional CEO Bridon-Bekaert Ropes Group Senior Vice Presidents Jan Boelens Senior Vice President Steel Wire Solutions EMEA Bruno Cluydts Chief Strategy Officer BBRG Philip Eyskens Chief Legal & Compliance Officer Katiana Iavarone Chief Procurement Officer Raj Kalra Senior Vice President Rubber Reinforcement Sales, Marketing & Strategy Patrick Louwagie Senior Vice President Global Engineering and Operational Excellence Dirk Moyson Senior Vice President Rubber Reinforcement Global Operations Raf Rentmeesters Senior Vice President Building Products Adam Touhig Senior Vice President Rubber Reinforcement Asia Geert Voet Senior Vice President Steel Wire Solutions South and Central America Daming Yu China President and Vice President Steel Wire Solutions Asia Zhigao Yu Senior Vice President Rubber Reinforcement Technology On 3 April 2023, Ernst Lutz will join Bekaert as Chief Innovation & Technology Officer and become Senior Vice President - 328 - Bekaert Integrated Annual Report 2022 Statement from the responsible persons The undersigned persons state that, to the best of their knowledge: •the consolidated financial statements of NV Bekaert SA and its subsidiaries as of 31 December 2022 have been prepared in accordance with the International Financial Reporting Standards, and give a true and fair view of the assets and liabilities, financial position and results of the whole of the companies included in the consolidation; and •the annual report on the consolidated financial statements gives a fair overview of the development and the results of the business and of the position of the whole of the companies included in the consolidation, as well as a description of the principal risks and uncertainties faced by them; and •the 2022 non-financial statements of NV Bekaert SA, its subsidiaries and, where applicable, the joint ventures, have been prepared in accordance with the GRI Standards and the current NFRD (Non-Financial Reporting Directive). GRI 2-14 On behalf of the Board of Directors: Company Secretary Isabelle Vander Vekens Auditors EY The Auditor’s Report is included in the Financial Statements of this annual report. The Auditor's limited assurance report on the 2022 Scope 1 & 2 GHG emissions (in ton CO2) and the 2022 Scope 3 GHG emissions (all categories) (in ton CO2e) is included in the Environmental Statements of this annual report. The Auditor's limited assurance report on the EU Taxonomy is included in the Environmental Statements of this annual report. Editor & coordination Katelijn Bohez, VP Sustainable Finance & Public Relations GRI 2-3 Design & Production Katrien Strobbe - Strobbe Design Eduardo Chaves - Bekaert Oswald Schmid Chief Executive Officer Jürgen Tinggren Chairman of the Board of Directors Disclaimer This report may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Bekaert is providing the information in this report as of this date and does not undertake any obligation to update any forward-looking statements contained in this report in light of new information, future events or otherwise. Bekaert disclaims any liability for statements made or published by third parties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other report or press release issued by Bekaert. Contact bekaert.com corporate@bekaert.com T +32 56 76 61 00 GRI 2-1 The integrated annual report for the year 2022 is available in English and Dutch on annualreport.bekaert.com