Annual Report • Mar 25, 2022
Annual Report
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The Bekaert Annual Report 2021 marks the start of our transition toward a fully Integrated Report. It expresses our commitment to both financial and non-financial targets and delivery. Bekaert does no longer publish a separate Sustainability Report from this year onwards. We have integrated all non-financial disclosures in line with the guidelines of the Corporate Sustainability Reporting Directive and will further extend the detail and scope of our targets and disclosures in coming years. Our approach puts the value and impact we create, as a company, in a broader perspective.
| Message from the Chairman and the CEO | 6 |
|---|---|
| Bekaert at a glance | 8 |
| About us | 9 |
| The highlights of 2021: strong delivery on all priorities 10 | |
| Four Businnes Units | 12 |
| Rubber Reinforcement 12 | |
| Steel Wire Solutions 12 | |
| Specialty Businesses 13 | |
| Bridon-Bekaert Ropes Group 13 | |
| Creating value for our stakeholders | 14 |
| Value creation model 15 | |
| Materiality matrix 32 |
|---|
| Enterprise risk management 31 |
| Our stakeholders 29 |
| Our leadership 19 |
| Financial performance 34 | |
|---|---|
| Value chain 38 | |
| Planet 42 | |
| Knowledge 46 | |
| People 50 |
| Corporate governance statements 56 |
|---|
| Board of Directors 57 |
| Committees of the Board of Directors 59 |
| Evaluation 60 |
| Executive Management 60 |
| Diversity61 | |
|---|---|
| Conduct policies 62 | |
| Remuneration report 63 | |
| Shares 81 | |
| Control and ERM 90 | |
| Financial statements 97 | |
| Consolidated fi nancial statements 98 | |
| Consolidated income statement 98 | |
| Consolidated statement of comprehensive income 99 | |
| Consolidated balance sheet100 | |
| Consolidated statement of changes in equity 102 | |
| Consolidated cash fl ow statement 103 | |
| Notes to the consolidated fi nancial statements 105 | |
| 1. General information 105 | |
| 2. Summary of principal accounting policies 105 | |
| 2.1. Statement of compliance 105 | |
| 2.2. General principles106 | |
| 2.3. Balance sheet items 108 | |
| 2.4. Income statement items 115 | |
| 2.5. Statement of comprehensive income and statement of changes in equity 115 | |
| 2.6. Alternative performance measures 116 | |
| 2.7. Miscellaneous116 | |
| 3. Signifi cant accounting judgments and key sources of estimation uncertainty | 117 |
| 3.1. Signifi cant judgments in applying the entity's accounting policies 117 | |
| 3.2. Key sources of estimation uncertainty 117 | |
| 4. Segment reporting 118 | |
| 4.1. Key data by reporting segment 119 | |
| 4.2. Revenue by country 121 | |
| 5. Income statement items 122 | |
| 5.1. Net sales 122 | |
| 5.2. Operating result (EBIT) by function 123 | |
| 5.3. Operating result (EBIT) by nature 128 | |
| 5.4. Interest income and expense 129 | |
| 5.5. Other fi nancial income and expenses 130 | |
| 5.6. Income taxes 131 |
| 5.7. Share in the results of joint ventures and associates 132 | |
|---|---|
| 5.8. Earnings per share 132 | |
| 6. Balance sheet items 134 | |
| 6.1. Intangible assets 134 | |
| 6.2. Goodwill 135 | |
| 6.3. Property, plant and equipment 141 | |
| 6.4. Right-of-use (RoU) property, plant and equipment 144 | |
| 6.5. Investments in joint ventures and associates 147 | |
| 6.6. Other non-current assets 151 | |
| 6.7. Deferred tax assets and liabilities 152 | |
| 6.8. Operating working capital 156 | |
| 6.9. Other receivables 159 | |
| 6.10. Cash & cash equivalents and short-term deposits 159 | |
| 6.11. Other current assets 160 | |
| 6.12. Assets classifi ed as held for sale and liabilities associated with those assets 160 | |
| 6.13. Ordinary shares, treasury shares and equity-settled share-based payments 161 | |
| 6.14. Retained earnings and other group reserves 170 | |
| 6.15. Non-controlling interests 173 | |
| 6.16. Employee benefi t obligations 178 | |
| 6.17. Provisions 189 | |
| 6.18. Interest-bearing debt 190 | |
| 6.19. Other non-current liabilities 193 | |
| 6.20. Other current liabilities194 | |
| 6.21. Tax positions 194 | |
| 7. Miscellaneous items 195 | |
| 7.1. Notes to the cash fl ow statement 195 | |
| 7.2. Financial risk management and fi nancial derivatives 199 | |
| 7.3. Contingencies, commitments, secured liabilities and assets pledged as security 215 | |
| 7.4. Related parties 216 | |
| 7.5. Events after the balance sheet date 218 | |
| 7.6. Services provided by the statutory auditor and related persons 218 | |
| 7.7. Subsidiaries, joint ventures and associates 219 | |
| Parent company information 226 | |
| Annual report of the Board of Directors and fi nancial statements | |
| of NV Bekaert SA226 | |
| Proposed appropriation of NV Bekaert SA 2021 result | 230 |
| Appointments pursuant to the Articles of Association | 230 |
| Alternative performance measures 231 | |
| Environmental statements 243 | |
|---|---|
| Chemical management 244 | |
| Energy 245 | |
| CO 2 246 |
|
| Water 248 | |
| Waste 250 | |
| Sustainable solutions251 | |
| EU Taxonomy 252 |
| Social statements256 | |
|---|---|
| Health & safety 257 | |
| Communicating with and engaging our employees | 260 |
| Research & innovation partnerships 262 | |
| Highest ethical standards 263 | |
| Embracing diversity 264 | |
| New hires 267 | |
| Turnover 268 | |
| Performance management269 |
| Reporting principles272 | |
|---|---|
| Sustainability standards 273 |
|
| GRI Content Index 274 | |
| Glossary 280 | |
| Management 281 |
Jürgen Tinggren Chairman
Oswald Schmid CEO
Dear Shareholder, Dear Reader,
Bekaert achieved a new performance milestone in 2021, despite the turbulence of the pandemic.
We achieved strong sales and improved profi tability across all our businesses thanks to business-mix improvements, footprint adjustments, and organizational effi ciencies.
Importantly, we progressed in our strategic transformation to make Bekaert a stronger, more agile, and higher value-creating organization. The progress enabled us to leverage our global presence and local services to respond to customer demands whilst providing solutions to shortages of labor, materials, energy, and logistics.
From a fi nancial perspective, we reached new levels of performance across our key metrics. Sales increased by 28% to a record level of € 4.8 billion in 2021 and underlying EBIT increased by 89% to € 515 million. The net result for the period was € 451 million with EPS of € 7.14. Eff ective working capital management and solid cash generation resulted in further deleveraging with net debt on underlying EBITDA decreasing to 0.61 at year-end 2021.
Based on these strong results, we are pleased to announce that the Board of Directors will propose to the Annual General Meeting of Shareholders in May of 2022 a gross dividend of € 1.50 per share, representing an increase of 50% versus the previous year. In addition, the Board has approved a share buyback program for Bekaert to repurchase and cancel outstanding shares up to € 120 million, over a period up to twelve months.
Moving forward, we are determined to continue achieving new milestones. We are considering additional opportunities to further grow and improve our business. Our goal is to accelerate growth in promising markets, both within our core technologies and beyond steel. We are increasing our resources in innovation and digitalization, so we can better serve our customers.
We have established an ambitious sustainability strategy, with targets and action plans to accelerate our sustainability performance. We are convinced that our plans will continue to create signifi cant value for all our stakeholders.
The strong performance we delivered in 2021 and our determination to further enhance value growth in target markets, make us confi dent about our ability to deliver on our strategic priorities. Given the uncertainties and instability facing the world today, notably as a result of the crisis in Ukraine, the visibility on 2022 market evolutions is limited. We do, however, confi rm 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.
Our teams worked tirelessly around the world to ensure the safety of our employees and the business continuity of our customers, thus contributing to the strong achievements of 2021. Furthermore, the actions and initiatives they are taking today in off ering help to people from Ukraine through various humanitarian programs and in mitigating the impact of the crisis on our business, are highly appreciated. We would like to thank our management and teams for their contribution, energy, and above and beyond spirit. We would like to thank our management and teams for their contribution, energy, and above and beyond spirit.
We are grateful to our customers, business partners, and shareholders for their continued trust and support.
Oswald Schmid Chief Executive Director
Jürgen Tinggren Chairman of the Board of Directors
Bekaert is a world market and technology leader in steel wire transformation and coating technologies. We pursue to be the preferred supplier for our products, services and solutions by continuously delivering superior value to our customers worldwide. Bekaert (Euronext Brussels: BEKB) was established in 1880 and is a global company with more than 27 000 employees worldwide, headquarters in Belgium and approximately € 6 billion in combined revenue in 2021.
GRI 102-1, GRI 102-3, GRI 102-7
We seek to be the best in understanding the applications for which our customers use our products and services. Knowing how our products function within our customers' production processes and products helps us to develop and deliver the solutions that best meet their requirements, and, through that, we create value for our customers.
Transforming steel wire and applying unique coating technologies form our core business. Depending on our customers' requirements, we draw wire in diff erent diameters and strengths, even as thin as ultrafi ne fi bers 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.
More information on our product off ering is available on our website bekaert.com.
GRI 102-2, GRI 102-6
better together sums up the unique cooperation within Bekaert and between Bekaert and its business partners. We create value for our customers by cocreating and delivering a quality portfolio of product solutions and by off ering customized services on all continents.
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 are convinced that the trust, integrity and irrepressibility that bring our employees worldwide together as one team create the fundamentals of successful partnerships wherever we do business.
All result indicators are 2021 underlying numbers, adjusted with € -1.5 million one-off elements. Improvement references are made relative to fiscal year 2020. The dividend proposal is subject to approval by the General Meeting of Shareholders of May 2022.
95% countries. We operate 75 manufacturing plants* worldwide. 58.5% Supply base rated by
Sustainable supply chain management
Bekaert works with 16 000 active suppliers and serves 13 500 customers in 130
* including 9 joint venture plants Percentages are relative to supply spend by Bekaert subsidiaries
Committed to Science-Based Targets initiative
-4% Scope 2 GHG energy intensity*:
We stimulate a circular economy:
34% of the steel wire rod we purchase is from recycled steel
100 % of steel scrap returns to the steel mills for recycling
*Reference made versus base year 2019 – GHG & energy figures include joint ventures
Acceleration of the innovation
agenda
Bekaert subsidiaries (excluding JVs)
Bekaert's Rubber Reinforcement business unit develops, manufactures and supplies tire cord and bead wire products and solutions for the tire sector. In serving the equipment market, the product portfolio includes hose reinforcement wire and conveyor belt reinforcement products¹.
To serve customers worldwide, the business unit has a global presence with manufacturing plants in EMEA, US, Brazil, India, Indonesia, and China. A greenfi eld investment in Vietnam is ongoing.
Be the most advanced leader of innovative rubber reinforcement solutions that help our customers transform the industry sustainably
Tire cord and bead wire for tires
€ 2.05 billion in consolidated sales • € 2.24 billion combined sales² 11.8% underlying EBIT margin • 16.5% underlying EBITDA margin
Bekaert's Steel Wire Solutions business unit develops, manufactures and supplies a very broad range of steel wire products and solutions for customers in agriculture, energy & utilities, mining, construction, consumer goods, and the industrial sector in general.
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.
Serve customers with innovative value solutions that help them improve their business performance
Steel wire solutions for energy & utility markets, construction & infrastructure, agriculture, mining, and more
€ 1.82 billion in consolidated sales • € 2.66 billion in combined sales² 11.3% underlying EBIT margin • 13.5% underlying EBITDA margin
¹ The Hose and Conveyor Belt activities have been moved to the business unit Specialty Businesses as from January 2022. The fi nancial statements relative to these activities will be reported accordingly in fi scal year 2022. They represented € 115 million in consolidated revenue in 2021. As a result, the Rubber Reinforcement business unit will be entirely focused on the tire industry and the business unit Specialty Businesses will extend its business scope with a fourth sub-segment.
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.
The business unit Specialty Businesses comprises three sub-segments¹ that serve diff erent markets. These sub-segments are Building Products, Fiber Technologies, and Combustion Technologies. The characteristics all three have in common are their high-end product portfolio and 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 off ers high-end products for fi ltration, 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 environmentallyfriendly gas and hydrogen burners and residential and commercial heat exchangers.
Be the leading solutions provider in low-carbon concrete reinforcement and in thin fi ber and combustion technologies that contribute to a cleaner world
€ 476 million in consolidated sales 14.7% underlying EBIT margin • 16.7% underlying EBITDA margin
As a truly global ropes and advanced cords solution provider, 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 diff erentiation in high-end markets.
BBRG-ropes has a leading position in a very wide range of sectors, including surface and underground mining, off shore and onshore energy, crane & industrial, fi shing & marine, and structures. The A-Cords business of BBRG develops and supplies fi ne steel cords for elevator and timing belts used in construction and equipment markets respectively, and window regulator and heating cords for the automotive sector.
Be the leading innovator and premier solutions provider with the best performing ropes and advanced cords globally
€ 481 million in consolidated sales 9.3% underlying EBIT margin • 15.8% underlying EBITDA margin
CREATING VALUE FOR OUR STAKEHOLDERS
Sustainability is an integral part of the Bekaert strategy. We are committed to create value for all our stakeholders by delivering on both fi nancial and non-fi nancial objectives. In this report we describe how we convert, through the implementation
· € 2.1 bln shareholders' equity
Manufactured Capital
campaign, with science-based targets · 34% of wire rod purchased is from recycled steel 2 Natural Capital
· € 67 million gross R&I spend · € 7.5 million R&I grants received · 500 R&I staff and 200 Engineering staff · € 13 million investments in digital assets
· 23 5683 · 2 767 new hires in 2021 · 33 average training hours per employee Human and Societal Capital
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) 2 JVs included
3 23 568 in consolidated entities + 3 613 in joint ventures = 27 181 combined
4 Total Recordable Incident Rate and Lost-Time Incident Frequency Rate 2021 versus 2020
Strong cash generation over the past years has enabled us to free up cash for value creating investments. In 2021 we invested € 153 million in capital expenditure (PP&E) and € 67 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 more than 27 000 people in 45 countries in the world, including manufacturing sites in 25 countries and additional sales and distribution facilities in 20 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 lowcarbon society. We continued to invest in health & safety and learning & development, and we extended our digital capabilities to improve data insights and customer services.
2021 marked a record year in sales and EPS. Underlying EBIT increased by +89% to € 515 million at a margin of 10.6%. The strong results and record net result attributable to equity holders of Bekaert resulted in the proposal of the Board of Directors to distribute a dividend of € 1.50 per share.
We serve 13 500 customers in 130 countries in the world. Our investments in research and innovation added 25 fi rst patent fi lings in 2021, which resulted in a portfolio of patents and patent rights of more than 1 900. 21 partnerships with academic and research institutes help accelerate our innovation eff orts and more than 85% of our Research & Innovation project list target distinct benefi ts in sustainability.
Eff orts to reduce our carbon footprint are ongoing and 100% of steel-based scrap returns to the steel mills for recycling. € 133 million in income taxes were paid in the countries where we are active. Continued priority actions in health and safety led to a reduction of safety incident rates for the fourth 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 irrepressible 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'.
During the Capital Markets Day of 28 May 2021, Bekaert has communicated the company's strategy for the next fi ve years.
Our strategy is aimed at creating sustainable value for all our stakeholders: shareholders, customers and other business partners, employees, and the broader communities where we are active. Read more about our stakeholders and the value creation impact of our strategy in this Value Creation chapter.
We are determined to implement this strategy with passion and focus and are convinced it will enable us to drive sustainable value creation.
The megatrends of new mobility, renewable energy, urbanization, smart connectivity, reverse globalization, and sustainability are viewed as opportunities for Bekaert to diff erentiate and grow.
We are therefore leveraging our position to capture those opportunities:
Three imperatives drive the implementation of our strategy and have led to tangible results in 2021.
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 and the sales growth was driven by value adding business opportunities and pricing discipline, which resulted in robust margin performance of all four Business Units.
Leveraging on our global presence with dedicated local services, we secured supply chain excellence to ensure delivery continuity to customers worldwide, despite the global impact of supply chain disruptions.
Continued eff ective working capital and strict cost control drove a strong cash generation and fast and signifi cant debt deleveraging.
We accelerated our commercial and manufacturing excellence programs to serve customers better, to improve our go-to-market strategy, and to enhance the quality and effi ciency of our processes.
The digitalization of our business processes and the expansion of our digital off ering are ongoing and will be accelerated.
We established a long-term sustainability strategy aimed at raising our ambitions and delivering upon the decarbonization targets that we commit to.
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 fi eld of play.
Our volumes rebounded above pre-Covid-19 levels in 2021 despite the relatively low expansion investments in the past years and some footprint adjustments implemented to exit commodity markets.
We have been exploring opportunities for growth, both in existing and adjacent markets, with strict criteria to add signifi cant accretive growth.
2021 did not mark bold merger and acquisition deals but focused on tactical acquisitions and partnerships to build a growing presence in off shore wind, utilities, digital monitoring expertise, and green hydrogen technologies. Further growth will be supported by a higher level of expansion investments as of 2022 onwards and by partnerships and inorganic growth opportunities that will allow us to expand a position in promising target markets.
For more information and details on our performance during 2021, we refer to the performance updates in this chapter and to the detailed statements on fi nancial and non-fi nancial disclosures in Part II of this report.
The main tasks of the Board of Directors are to determine the Group's strategy and general policy, and to monitor Bekaert's operations. 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 thirteen members. Their professional profi les cover diff erent areas of expertise, such as law, business, industrial operations, fi nance & investment banking, HR, consultancy, ESG, innovation and compliance.
GRI 102-18, GRI 102-23, GRI 103-2, GRI 103-3
| Jürgen Tinggren, Chairman ¹ | Christophe Jacobs van Merlen | Caroline Storme |
|---|---|---|
| Oswald Schmid, CEO | Hubert Jacobs van Merlen | Emilie van de Walle de Ghelcke |
| Gregory Dalle | Colin Smith ¹ | Henri Jean Velge |
| Henriette Fenger Ellekrog ¹ | Eriikka Söderström ¹ | Mei Ye ¹ |
| Charles de Liedekerke |
¹ Independent Directors
The Annual General Meeting of Shareholders of 12 May 2021 approved the reappointment of Henriette Fenger Ellekrog and Eriikka Söderström as independent Directors, for a term of four years up to and including the Annual General Meeting to be held in 2025.
The term of offi ce of the Directors Charles de Liedekerke, Hubert Jacobs van Merlen, Oswald Schmid, and independent Directors Mei Ye and Colin Smith will expire at the Annual General Meeting of Shareholders of 11 May 2022. Charles de Liedekerke and Hubert Jacobs van Merlen, having served on the Board during nine and six terms respectively, will then retire in line with the retirement age for Directors as applied by Bekaert. Colin Smith has decided to retire and does not seek reappointment. The Board of Directors will propose that the General Meeting appoints Maxime Parmentier as Director for a term of one year, re-appoints Oswald Schmid as Director for a term of one year, and re-appoints Mei Ye as independent Director for a term of one year.
The number of Directors will decrease from thirteen to eleven and gender diversity will further increase: from 38% to 45% female Directors on the Board.
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.
CHAIRMAN OF THE BOARD Independent Director Swedish, °1958
FIRST APPOINTED May 2019
Stockholm School of Economics New York University Leonard N Stern School of Business
Jürgen Tinggren was appointed independent Director and Chairman of the Board of Directors of Bekaert on 8 May 2019.
Jürgen Tinggren 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, he joined the Executive Committee of Schindler Holding AG. In 2007, he was appointed Chief Executive Offi cer 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
Chairman of the Nomination & Remuneration Committee Member of the Audit, Risk & Finance Committee
CHIEF EXECUTIVE OFFICER MEMBER OF THE BOARD Austrian, °1959
FIRST APPOINTED May 2020
University of Applied Sciences of Vienna
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. In 2002, he joined Schindler as Head of Purchasing & Strategic Sourcing and held various CEO as well as area management positions.
From 2013 on he served as a member of the Group Executive Committee of Schindler. In 2017 he moved to the Kalle Group to become CEO and managing director.
Member of the Supervisory Board of Wienerberger
EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2022
Non-native = nationality other than the country where the registered offi ce of the Company is located, i.e. Belgium
MEMBER OF THE BOARD French, °1976
FIRST APPOINTED May 2015
EDUCATION Université Paris-Dauphine Cass Business School
Gregory Dalle is a Managing Director at Credit Suisse in the Investment Banking & Capital Markets Division, based in London.
Gregory Dalle joined Credit Suisse in 2000 as a member of the EMEA Mergers & Acquisitions Group. He joined the Industrials Group in 2014 and was appointed Head of EMEA Industrials Group in 2017 and Global co-Head of Diversifi ed 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
MEMBER OF THE BOARD Independent Director Danish, °1966
FIRST APPOINTED May 2020
Copenhagen Business School, INSEAD, London Business School and Wharton Business School
Henriette Fenger Ellekrog 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 offi ce at Danske Bank A/S. Currently, she is Chief Human Resources Offi cer at Ørsted.
Member of several advisory boards and committees since 2003.
EXPIRATION OF MANDATE Annual General Meeting of 2025
COMMITTEES Member of the Nomination & Remuneration Committee
MEMBER OF THE BOARD Belgian, °1953
FIRST APPOINTED May 1988
Catholic University of Louvain University of Namur
Charles de Liedekerke started his career with Liedekerke, Wolters, Waelbroeck and Kirkpatrick and moved to the US in 1980 as Finance and Administration Offi cer of a subsidiary of Carmeuse. He joined Lafarge in 1982, holding various operational and functional responsibilities in Paris, Dallas, and Calgary. In 1992 he was appointed Chief Financial Offi cer of Bekaert. He returned to Lafarge in 1998 as member of the Group Executive Committee and president of the Aggregates and Concrete division, until his resignation in 2004. He chaired the Boards of various companies afterwards.
EXPIRATION OF MANDATE Annual General Meeting of 2022
COMMITTEES Member of the Audit, Risk & Finance Committee
MEMBER OF THE BOARD Belgian, °1978
FIRST APPOINTED May 2016
Free University of Brussels Ecole Centrale Lille (Ingénieur Généraliste)
Christophe Jacobs van Merlen joined Bain Capital Europe, LLP (London) in 2004. He 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 fi nancial services clients.
Christophe Jacobs van Merlen is currently Managing Director at Bain Capital Europe and member of the Leadership team and member of diff erent board, audit, operating and M&A committees. He plays a leading role in a variety of investments at Bain Capital.
EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2024
COMMITTEES Member of the Nomination & Remuneration Committee
MEMBER OF THE BOARD Belgian, °1953
FIRST APPOINTED May 2003
EDUCATION Catholic University of Louvain
Hubert Jacobs van Merlen (°1953) is an advisor to the Private Equity sector. From 1997 to 2014, he was President and CEO of IEE SA, Luxembourg, a leading company in the fi eld of automotive safety sensors with manufacturing sites in Luxembourg and technical sales offi ces in the US, South Korea and Japan.
He started his career in 1978 as auditor of KPMG (Houston, TX) and became in 1981 Division Controller of the Drilling Fluids Division of Chromalloy American Corp. (St. Louis, MO). In 1987 he transferred to Commercial Intertech Corp. (Youngstown, OH) as European Finance Director and was appointed in 1995 Sr. Vice President & CFO.
Chairman of Stichting Administratiekantoor Bekaert, representing the interests of the reference shareholder of Bekaert.
EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2022
COMMITTEES Chairman of the Audit, Risk & Finance Committee
MEMBER OF THE BOARD Independent Director British, °1955
FIRST APPOINTED May 2018
EDUCATION University of Southampton
During a career spanning more than 40 years with Rolls Royce, Colin Smith has progressed up the career ladder to become a world-class authority in aerospace Engineering and Technology. He started with Rolls Royce in 1974 as undergraduate apprentice and took on many consecutive Engineering and Technology functions of increasingly broader scope and responsibility. He was appointed Director of Research and Technology in 2004 and Director of Engineering and Technology in 2005, before he became Group President of Rolls Royce in 2016, a role which he took up until retirement.
OTHER MANDATES Several non-executive and advisory roles
EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2022
MEMBER OF THE BOARD Independent Director Finnish, °1968
FIRST APPOINTED May 2020
EDUCATION University of Vaasa
Eriikka Söderström has a strong fi nance background having worked in many internationally operating corporations.
She started her career in Nokia where she spent 14 years in diff erent fi nance roles in Nokia Networks. Her last positions there were as the interim CFO of Nokia Networks and Corporate Controller of Nokia Siemens Networks.
She has 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.
Member of the Board of Directors of Valmet since 2017 and Chairman of the Audit Committee since 2018 Member of the Board of Directors and Chairman of the Audit Committee of Kempower since 2021 Member of the Board of Directors of Amadeus IT Group since 2022
Annual General Meeting of 2025
COMMITTEES Member of the Audit, Risk & Finance Committee
MEMBER OF THE BOARD Belgian,°1977
FIRST APPOINTED May 2019
Solvay Management School, Free University of Brussels, and INSEAD France and Singapore
Caroline Storme started her career with Deloitte Consulting in 2000 in Belgium. She worked at Bekaert as fi nancial controller from 2004-2006 before she moved to Amtech, IGW based in Suzhou, China where she was appointed CFO.
She joined UCB in 2012, fi rst in controlling functions before heading Asian global business services, based in Shanghai, China, and since 2017 in various R&D fi nancial functions at UCB Headquarters in Brussels, Belgium.
Caroline Storme currently holds the position of R&D Finance Lead Neurology at UCB in Belgium.
MEMBER OF THE BOARD Belgian, °1981
FIRST APPOINTED May 2016
Catholic University of Louvain, Free University of Brussels and London School of Economics.
Emilie van de Walle de Ghelcke is Head of Legal at Sofi na, a family-controlled investment company listed on Euronext Brussels (BEL20-index).
Before joining Sofi na, Emilie was a member of the Brussels Bar since 2005. She joined the corporate and fi nance practice of Freshfi elds 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 fi nancial law advisory.
Emilie van de Walle de Ghelcke joined Sofi na in 2016. As Head of Legal and Compliance Offi cer, 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 Sofi na's ESG strategy.
EXPIRATION OF BEKAERT MANDATE
Annual General Meeting of 2024
MEMBER OF THE BOARD Belgian, °1956
FIRST APPOINTED May 2016
EDUCATION Catholic University of Louvain and IMD
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.
MEMBER OF THE BOARD Independent Director US citizen, °1966
FIRST APPOINTED May 2014
University of North Carolina at Chapel Hill Fudan University in Shanghai
Mei Ye worked for 10 years with McKinsey & Company (2003-2013) as a senior expert and consultant in fi nancial services, policy recommendations and corporate governance.
Prior to McKinsey, Mei Ye was corporate strategy manager and lead analyst at E*TRADE Financial, a USbased online fi nancial services company (1999-2003). She also worked as a research analyst for Gartner Group (1997-1999), with Social Policy Research Associates (1995-1997), and at the Offi ce of President of the University of North Carolina System in the US (1992-1994).
Independent Director of the Board of Shenwan Hongyuan Group and external advisor to McKinsey & Company.
Founding council member of Future China Society and SFY Foundation in China, and board member of New York Military Academy and Stanford Global Projects Center
EXPIRATION OF BEKAERT MANDATE Annual General Meeting of 2022
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 Offi cer.
GRI 102-18
The composition of the Bekaert Group Executive refl ects the organizational structure with four Business Units and four Global Functional Domains. Te Business Units and Global Functions are led by the following Executives.
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 specifi c needs and dynamics of their markets.
The Functions take a role as strategic business partners, accountable for providing specifi c expertise and services across the Group, and for ensuring the business has the right capability to deliver on short- and long-term goals.
The Board of Directors of Bekaert appointed Oswald Schmid as Chief Executive Offi cer, eff ective as of 2 March 2021. Oswald had been leading the Bekaert Group Executive as interim CEO since 12 May 2020, upon which he was appointed member of the Board of Directors.
On 8 February 2021, Kerstin Artenberg joined Bekaert as Chief Human Resources Offi cer and became a member of the Bekaert Group Executive, succeeding Rajita D'Souza who left the company at the end of 2020.
On 1 April 2021, Yves Kerstens joined Bekaert as Divisional CEO Specialty Businesses and Chief Operations Offi cer, and became a member of the BGE. Yves Kerstens succeeded Jun Liao, who left the company in July 2021, in the role of Divisional CEO Specialty Businesses.
CHIEF EXECUTIVE OFFICER Austrian, °1959
JOINED BEKAERT 2019
EDUCATION Engineering University of Applied Sciences of Vienna
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 began his career with Semperit in 1984, before moving to Continental in 1990 as Head of Purchasing. In 2002, he joined Schindler as Head of Purchasing & Strategic Sourcing and held various CEO as well as area management positions.
From 2013 on, he served as a member of the Group Executive Committee of Schindler. In 2017, Oswald moved to the Kalle Group to become CEO and managing director.
CHIEF FINANCIAL OFFICER French and Moroccan, °1971
JOINED BEKAERT 2019
Mathematics & Economics - Finance French College of Rabat Institut Supérieur de Gestion of Paris
Taoufi q Boussaid started his career in international fi nance 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 fi nance roles with United Technologies Corporation, fi rst as Corporate Controller EMEA and subsequently as CFO for their Carrier Heating Systems business in Europe.
In 2007, Taoufi q joined Bombardier Transportation, where he progressively moved up through the fi nance organization in diff erent geographies to his most recent position of Vice President Finance for EMEA and Asia Pacifi c. 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 offi ce of the Company is located, i.e. Belgium.
CHIEF STRATEGY OFFICER Mexican, °1974
JOINED BEKAERT 2019
Engineering - MBA Universidad Panamericana of Mexico City Stanford Graduate School of Business
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.
CHIEF HUMAN RESOURCES OFFICER German, °1972
JOINED BEKAERT 2021
East Asian Economics - HR University of Duisburg-Essen University of Applied Sciences of Zürich
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.
DIVISIONAL CEO SPECIALTY BUSINESSES CHIEF OPERATIONS OFFICER Belgian, °1966
JOINED BEKAERT 2021
Engineering - Industrial Management Catholic University of Louvain INSEAD Business School of Paris
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 Pacifi c, as well as global corporate governance roles as Vice President & Senior Offi cer 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.
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
Arnaud Lesschaeve began his career with Valeo in 1994, fi rst 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 Pacifi c, and fi nally as CEO of the joint systems division, before returning to Valeo as VP Thermal Systems.
DIVISIONAL CEO BRIDON-BEKAERT ROPES GROUP Belgian, °1965
JOINED BEKAERT 1989
Engineering - Applied Economics Catholic University of Louvain
Curd Vandekerckhove started his career at Bekaert as a Total Quality Management consultant. Following an 18-month Executive Training Program in Japan, he took up several management positions in Bekaert Asia for 13 years. He transferred back to Europe in 2004 to become the General Manager of Carding Solutions and subsequently of the Sawing Wire activity platform.
In 2012, Curd was appointed Executive Vice President (EVP) North Asia and South East Asia and became a member of the Bekaert Group Executive. Subsequently, his roles included EVP North Asia and Global Operations, and Chief Operations Offi cer. In 2019, he was appointed Divisional CEO of the Bridon-Bekaert Ropes Group.
DIVISIONAL CEO STEEL WIRE SOLUTIONS Belgian, °1972
JOINED BEKAERT 1995
EDUCATION Engineering Catholic University of Louvain
Stijn Vanneste started his career as Process Development Engineer at Bekaert. Between 2005 and 2010, he took up several international management positions in the rubber reinforcement business of the Group, among which General Manager of Bekaert Shenyang and Head of Operations Steel Cord China.
In 2010 he was promoted to Vice President Rubber Reinforcement Europe and India. In 2014, Stijn became Senior Vice President Manufacturing Excellence with a global responsibility across all business platforms. In April 2016, he was appointed member of the Bekaert Group Executive and Executive Vice President for the region Europe, South Asia and South East Asia. Since March 2019, Stijn has been Divisional CEO Steel Wire Solutions.
Bekaert is a publicly listed company (Euronext BEKB) with a multinational business scope and footprint. We therefore interact and cooperate with many stakeholders worldwide. Bekaert's strategy is focused on creating sustainable value to all stakeholders:
Bekaert strives to provide timely and accurate information on the company's strategy, performance and outlook to all stakeholders in the investment communities.
The Chairman, members of the Executive Management and Bekaert's Investor Relations team have communicated the new Bekaert Strategy during the Capital Markets Day in May 2021.
We provide information on the progress we make during all meetings with investors. The 2021 meetings included virtual roadshows and conferences, webcasts, and the General Meetings of Shareholders.
Bekaert's disclosures, including this Annual Report, cover both fi nancial and non-fi nancial performance as well as market and strategic updates.
6 brokerage fi rms cover and publish equity research reports on Bekaert.
Bekaert has a wide international customer base in established and emerging markets. We serve both global and local customers with a rich portfolio of products and services.
Our investments in research & innovation, and in digital and sustainable solutions provide advanced technologies that enable our customers to meet the most stringent demands and ambitions.
Bekaert's global presence, with deep understanding of the local needs, have made us a trusted partner in all circumstances, with a high degree of resilience against supply chain disruptions.
As the world's largest buyer of steel wire rod, Bekaert can secure access to raw material needs and, through that, ensure delivery reliability to customers. Our supplier campaigns also help us drive sustainability upstream the supply chain.
More than 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.
Whether employed in the Bekaert fullyor majority-owned subsidiaries, or in our joint ventures, all people working at Bekaert work better together to create a great place to work with high ethics, safety, and performance standards.
We team up with industrial and academic partners to enhance our technological leadership and proactively explore innovations that stretch the boundaries of Bekaert's existing fi eld of play.
As a company and as individuals, we act with integrity and commit to the highest standards of business ethics. We promote equal opportunity, foster diversity & inclusion, and create a caring and safe working environment across our organization.
We strive to be a good corporate citizen. We fulfi l our responsibilities to each community in which we operate and promote and apply responsible and sustainable business practices.
We do not support political institutions and adopt a neutral position with respect to political issues. United by the belief that there should be no harm to anyone, we do condemn any act of violence and aggression against people.
We are committed to minimize the environmental impact of our activities. We comply with all laws and regulations applicable.
Bekaert paid € 133 million in income taxes relative to the results of 2021.
We advocate and fund initiatives that help improve the social conditions in the communities where we are active. We support community engagement programs that make a diff erence to people's lives, both today and in the future.
GRI 102-40, GRI 102-42
Income taxes paid on 2021 result € 133 million
Total contact reach through one-on-one and webcast meetings in 2021
Average Target Price for the Bekaert share on the issue date of this report
Purchase spend with suppliers who signed the Supplier Code of Conduct € 55 95 % 72 our workforce
Countries with Bekaert customers
Number of employees Bekaert global Number of countries where 721 130 27 181 45 Bekaert employs people
Diff erent nationalities in
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 fi nancial and non-fi nancial, and complying with laws and regulations as well as with the Bekaert Code of Conduct. The framework consists of the identifi cation, 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, fi nancial, corporate and geopolitical/country risks. The identifi ed risks are classifi ed on two axes: probability of occurrence and impact or consequence. The risk evolution is evaluated on a quarterly base.
Many operational activities of Bekaert depend on IT-systems that are developed and maintained by internal and external experts. Home offi ce work has expanded the number of end-point devices and connection channels. A cyber-attack aff ecting critical IT systems could interrupt Bekaert's business continuity and aff ect profi tability. To mitigate these risks, Bekaert organized an Information Security week in October 2021. 1 200 participants learned about cyber-smart working models, tools, and controls and all managers and offi ce employees succeeded in a mandatory test at the end of the week. Bekaert also continuously invests in the protection of its digital systems and channels, as well as in fast recovery solutions should the risk of a cyber attack occur.
Bekaert's strategy focuses on value generating growth. The Group considers both organic and inorganic growth in existing markets and beyond. A potential delay in generating the intended return on investment might postpone the delivery on this strategic priority. To mitigate this risk, a structured capital allocation framework has been put in place that determines the capabilities and criteria to identify, analyze, approve, and integrate the organic and inorganic growth plans.
Governmental and societal commitments to mitigate the impact of climate change are increasingly driving the strategic role and responsibility of industrial companies. Laws and regulations can present operational challenges, higher costs and a potentially uneven competitive environment. When laws and regulations cannot be met within a set timeframe, the risk of losing a license to operate might occur. Underperformance on sustainability targets can also cause reputational damage and aff ect 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.
More details on Control and ERM and the respective Governance bodies are included in part II: Governance Statements.
Note: this 2021 ERM report, risk evaluation and risk matrix do not include the increased risks that are arising post-balance sheet date as a result of the situation in Ukraine. Those increased risks include a potential impact on demand changes, supply chain disruptions, credit risks and other. Bekaert has put a task force in place to monitor the situation on a daily basis in order to assess and mitigate the potential impact on the company.
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 classifi es risks according to probability of occurrence and the impact or consequence for our business, the Materiality Matrix positions the levers of value creation for our business in relation to the importance our stakeholders attach to them.
Our approach ensures that the main risks of the Group are linked to materiality topics.
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 102-47, GRI 103-1
GRI 201-1
¹ All comparisons made are relative to the fi scal year 2020
Bekaert has achieved a new performance milestone in 2021. We made signifi cant progress on the company's strategy and achieved record sales, solid margin growth, and the lowest debt leverage to date.
The fi nancial performance of 2021 and the successful execution of the strategic plan have strengthened Bekaert's cash generation perspectives for the coming years.
The Board of Directors seeks to maintain a balanced approach between funding future growth and enhancing shareholders' returns.
More information on the share buyback program is included in Part II, Governance Statements, 'Shares'.
We have accelerated our transformation towards higher value creation. Our key actions in 2021 included:
GRI 103-2
The average working capital on sales ratio further improved from 16.4% last year to 12.6% in 2021.
Cash on hand was € 677 million at the end of the period.
Net debt was € 417 million, € -187 million or -31% down from € 604 million at the close of 2020, resulting in net debt on underlying EBITDA of 0.61, the lowest leverage to date.
On 31 December 2021, equity represented 43.4% of total assets (35.8% at year-end 2020). The gearing ratio (net debt to equity) was 19.9%, signifi cantly down from 39.4% at year-end 2020 due to strong deleveraging.
More details on Bekaert's 2021 fi nancial performance are included in Part II, Financial Statements, and in the FY2021 press release that was published on 25 February 2022.
Bekaert achieved consolidated sales of € 4 840 million in 2021, well above 2020 (+28%) and 2019 (+12%). The year-on-year growth versus 2020 stemmed from higher volumes (+ 9%) and a positive impact from passed-on wire rod price changes and other mix eff ects (+19%). Currency movements were negligible on the consolidated sales level. Sales in the fourth quarter of 2021 were the highest quarter sales of the year, despite seasonality eff ects.
Combined sales totaled € 5 854 million for the year, up +32% from 2020 and +14% from 2019. Organic sales growth of Bekaert's joint ventures in Brazil (+59%) was partly off set by the devaluation (-7.7%) of the Brazilian real, resulting in a top-line increase of +51%.
Bekaert achieved an operating result (underlying EBIT) of € 515 million in 2021. This corresponds to an increase by € +243 million or +89% compared to 2020 and resulted in a margin on sales of 10.6% (7.2%). Including one-off items (€ -1.5 million), EBIT was € 513 million, representing an EBIT margin on sales of 10.6% (versus € 257 million or 6.8% in 2020). Underlying EBITDA was € 689 million (14.2% margin) compared with € 479 million (12.7%) and EBITDA reached € 677 million, or a margin on sales of 14.0% (versus 12.5%).
Overhead expenses (underlying) decreased as a percentage on sales by -50 basis points to 8.4%, compared to 8.9% in 2020, but increased by € +73 million in absolute numbers due to higher provisions for short-term and long-term incentive programs, the acceleration of digital, sustainability, and innovation programs, and the overall business activity rebound versus the previous year.
Underlying other operating revenues and expenses increased from € +8 million last year to € +20 million in 2021. Reported other operating revenues and expenses (€ +34 million) were signifi cantly lower than last year (€ +51 million) due to the lower gain on sale of real estate in 2021.
Interest income and expenses amounted to € -41 million, down from € -56 million in 2020 and a result of the lower amount of interest adjustment derivative fi nancial instruments in 2021 compared to 2020 and to a -26% reduction in interest-bearing fi nancial gross debt in 2021. Other fi nancial income and expenses amounted to € +4 million (€ -30 million in 2020). The 2021 increase was from signifi cantly less negative foreign exchange translation results and from € +9.4 million valuation gain on the VPPA (Virtual Power Purchase Agreement) contract in the US.
Income taxes increased from € -57 million to € -133 million. The overall eff ective tax rate dropped from 33% to 28%, driven by the utilization of previously unrecognized deferred tax assets in entities that turned profi table.
The share in the result of joint ventures and associated companies was € +108 million (versus € +34 million last year), refl ecting the strong performance of the joint ventures in Brazil.
The result for the period thus totaled € +451 million, compared with € +148 million in 2020. The result attributable to non-controlling interests was € +44 million (versus € +13 million in 2020) and the result for the period attributable to equity holders of Bekaert was € +407 million versus € +135 million in 2020. Earnings per share amounted to € +7.14, tripling the result of 2020 (€ +2.38).
| in millions of € | 2020 | 2021 | Delta |
|---|---|---|---|
| Sales | 3 772 | 4 840 | +28.3% |
| EBIT | 257 | 513 | +100.0% |
| EBIT-underlying | 272 | 515 | +89.0% |
| Interests and other fi nancial results | -86 | -37 | -57.4% |
| Income taxes | -57 | -133 | +135.9% |
| Group share joint ventures | 34 | 108 | +213.3% |
| Result for the period | 148 | 451 | +204.7% |
| attributable to equity holders of Bekaert | 135 | 407 | +202.2% |
| attributable to non-controlling interests | 13 | 44 | +226.9% |
| EBITDA-underlying | 479 | 689 | +43.7% |
| Depreciation PP&E | 185 | 175 | -5.3% |
| Amortization and impairment | 31 | -11 | — |
| Sales 665 1 015 +52.5% Operating result 109 282 +159.4% |
in millions of € | 2020 | 2021 | Delta |
|---|---|---|---|---|
| Net result | 84 | 252 | +198.9% | |
| Capital expenditure (PP&E) 20 31 +52.4% |
||||
| Depreciation 12 13 +4.8% |
||||
| Employees as per 31 December 3 516 3 613 +2.8% |
||||
| Group's share net result 34 108 +213.3% |
||||
| Group's share equity 124 189 +52.2% |
| in millions of € | 2020 | 2021 | Delta |
|---|---|---|---|
| Sales | 4 438 | 5 854 | +31.9% |
| Capital expenditure (PP&E) | 120 | 184 | +53.3% |
| Employees as per 31 December | 27 455 | 27 181 | -1.0% |
| in millions of € | 2020 | 2021 | Delta |
|---|---|---|---|
| Equity | 1 535 | 2 101 | +36.8% |
| Non-current assets | 1 823 | 1 972 | +8.2% |
| Capital expenditure (PP&E) | 100 | 153 | +53.3% |
| Balance sheet total | 4 288 | 4 844 | +13.0% |
| Net debt | 604 | 417 | -30.9% |
| Capital employed | 2 063 | 2 276 | +10.3% |
| Working capital | 535 | 678 | +26.8% |
| Employees as per 31 December | 23 939 | 23 568 | -1.5% |
| 2020 | 2021 | |
|---|---|---|
| EBITDA on sales | 12.5% | 14.0% |
| Underlying EBITDA on sales | 12.7% | 14.2% |
| EBIT on sales | 6.8% | 10.6% |
| Underlying EBIT on sales | 7.2% | 10.6% |
| EBIT interest coverage | 4.8 | 13.0 |
| ROCE-underlying | 12.2% | 23.7% |
| ROE | 9.7% | 24.8% |
| Financial autonomy | 35.8% | 43.4% |
| Gearing (net debt on equity) | 39.4% | 19.9% |
| Net debt on EBITDA-underlying | 1.26 | 0.61 |
More details on the fi nancial results are included in Part II: Financial Statements of this report. Other marketplace related data such as direct economic value generated and distributed are available in the Financial Statements §5.1, §5.3, §5.4, §5.6, §6.13.
GRI 201-1
** percentages relative to Bekaert supplier spend
Bekaert operates 75 production plants (subsidiaries and joint ventures) in 25 diff erent countries in EMEA, North America, Latin America and Asia-Pacifi c. Together they consumed and processed more than 3 million tons of wire rod, the company's main raw material. Bekaert has invested € 153 million in property, plant and equipment in its subsidiaries in 2021. Bekaert also invests in operational excellence programs as part of the group-wide Bekaert Manufacturing System that drives standardization, process and energy effi ciency, product quality, digital modeling and monitoring, and waste prevention and reduction.
Steel wire rod is the main raw material used for the manufacturing of steel wire products. Bekaert purchases diff erent 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. Bekaert increasingly also develops and produces products based on other metals and synthetic materials. The products manufactured by Bekaert are shipped to industrial customers who further process our materials into half or end products; or to end customers, directly or via distribution channels.
Steel wire rod represents more than half of the total spend of purchases and is ordered from vendors from all over the world. The Purchasing function manages the supply process. 2021 was marked by signifi cant supply chain disruptions caused by the impact of the pandemic and container shortages. 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 102-9, GRI 102-10, GRI 204-1
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 2021, 92% of our purchases were sourced locally.
Bekaert purchases from diff erent sources, in line with the product quality requirements and the sourcing options available. Bekaert has about 16 000 active suppliers¹ of which 56% are delivering into EMEA, 11% in Latin America, 8% in North America and 26% in Asia Pacifi c.
GRI 102-10, GRI 301-2
Bekaert recognizes the importance of responsible sourcing. In 2021, all suppliers covered by the Responsible Minerals Initiative (RMI), signed the Bekaert Supplier Code of Conduct (or delivered proof of following its principles) and 100% of our tin and tungsten suppliers completed the most recent Confl ict Minerals Reporting Template (CMRT).
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 confl ict mineral issues in their supply chain. All suppliers covered by the RMI have endorsed Bekaert's Confl ict Free Minerals policy and compliance plan.
GRI 102-10
Bekaert's purchasing department continued its engagement with suppliers to enhance sustainability awareness and control upstream in the value chain. The Bekaert Supplier Code of Conduct outlines environmental, labor and governance related requirements that suppliers must comply with. At the end of 2021, this supplier commitment represented 95% of our spend.
Bekaert engages suppliers in its sustainability agenda via EcoVadis. 58.5% of our 2021 purchase spend was with suppliers assessed via EcoVadis. 82 new suppliers were invited to participate in the EcoVadis sustainability assessment, compared with 18 in 2020. The platform provides visibility on the sustainability performance of our important suppliers and on the areas for improvement. The procurement team has analyzed the maturity and eff ectiveness of the current processes and has identifi ed several opportunities to better embed sustainability in our supplier life cycle as of 2022.
All 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 in the supply process of raw materials.
We conducted 50 supplier audits in 2021 compared with 36 in 2020. Supplier audits are scheduled and prioritized based on quality assurance, changes to or expansions of critical supplier processes, and risk of not meeting applicable target criteria.
GRI 103-2, GRI 308-1, GRI 407-1, GRI 408-1, GRI 409-1, GRI 414-1, GRI 414-2
Concluding Key Supplier Agreements remains very important for the purchase of wire rod and other supply categories as they enable to build eff ective partnerships in which sustainability, supply chain integration and innovation are explicit building blocks. In 2021 we organized a new Virtual Supplier Campaign to reach all key wire rod suppliers.
To make tangible steps towards reaching Bekaert's Scope 3 sustainability ambitions, a Virtual Supplier Campaign was held in 2021 with key wire rod suppliers. The purpose was to have an open dialogue about capabilities and objectives, as a basis to identify the suppliers that are best suited to co-drive sustainability and innovation. Selected partners have been invited to collaborate on projects which will propel us as sustainability leaders in the industry, together.
This campaign was launched as part of Bekaert's ambitious science-based GHG reduction targets which are subject to the independent validation by the Science Based Targets initiative (SBTi). One of the targets we have set ourselves is to reduce our Scope 3 emissions by -20% by 2030. Scope 3 emissions include upstream and downstream emissions outside our own organization.
Read more on Bekaert's decarbonization ambitions and 2021 performance in the next chapter: 'Planet' and in Part II: Environmental Statements of this report.
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 specifi cations, service levels, and current and future development needs. It is the basis of creating customer value.
Bekaert's Central Quality Assurance team has won the VCK Business Excellence Award 2021. VCK (Belgian Association for Quality) groups 200 organizations that believe in quality as a lever for growth, performance and sustainability. Each year, a professional jury awards the best quality project. Besides convincing the professional jury, Bekaert also won the popular vote and took the Audience Award.
Bekaert was recognized with the 2021 Best Quality Award from tire manufacturer Prinx Chengshan Holdings Co., Ltd. We are a longterm partner of Prinx Chengshan and are honored with the award that praises the highquality product and excellent service of our steel cord supplies.
To improve the digital customer experience, we included new features in the MyBekaert Agri customer portal for agricultural customers and launched a similar customer portal for Energy & Utilities customers.
We aim to turn ideas into meaningful sustainable solutions that reduce the environmental footprint of our customers and end-markets. 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 2.4 million tons.
Our steel and synthetic mooring ropes connect anchors on the seabed to fl oating 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 off shore wind farms ashore. This solution lowers the total cost of ownership by reducing energy losses and heat dissipation and by off ering a predictable and reliable cable lifetime.
Our Dramix® steel fi bers for 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 porous transport layer solutions increase the performance and durability of electrochemical devices used in hydrogen production.
More detailed information on how these solutions contribute to a reduction of the environmental footprint is included in Part II: Environmental Statements.
GRI 302-1
At Bekaert, we believe it is our responsibility to create
• We implement actions to reduce the energy used in our operations.
the possibility of a better tomorrow.
* JVs included
GRI 103-2
We want to contribute to making the world a better place for generations to come and to do this we are committed to becoming an industry leader in sustainability. With this in mind, we have established an ambitious plan that connects Bekaert to the most pressing challenges and presents a wide range of opportunities. This is what we call our ambition to become green beyond tomorrow.
In 2021 we fundamentally stepped up our ambitions, capabilities and plans to make substantial progress on our environmental targets. We established a 'Sustainability Offi ce' within the Strategy Offi ce. The Board of Directors approved the new Sustainability Strategy of Bekaert, and we have determined targets that are aligned with the Science Based Targets initiative (SBTi).
By committing to SBTi, 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. "
Our ambition for the environment is in line with the Paris Agreement to limit the global temperature rise to 1.5°C. We set a goal to reduce our Scope 1 and 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 and to reach Carbon Net Zero by 2050.
In 2021, our application was accepted to join the Business Ambition for 1.5°C campaign. This is an urgent call to action from a global coalition of UN agencies, business, and industry leaders to limit global warming. We have set ambitious science-based GHG reduction targets which are subject to the independent validation by the Science Based Targets initiative (SBTi). By signing up and committing to targets in line with SBTi, we become part of the UN Climate Champions Race to Zero and aim to make a signifi cant impact in the fi ght against climate change.
We have made a detailed mapping of all manufacturing activities, investments and applicable expenses of the Bekaert consolidated entities for the reporting year 2021 and have matched them with the activities described in the EU Taxonomy to analyze their eligibility, i.e., their potential to be environmentally sustainable. The outcome of this analysis is included in the detailed environmental statements in Part II of this report. The EU Taxonomy aims to channel capital towards sustainable activities, with the end-goal of fi nancing sustainable growth and achieving the EU objective of becoming climate neutral by 2050.
GRI 103-2
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)
Using and investing in renewable energy sources
We develop and implement standard solutions and
One enabler to reduce greenhouse gas emissions is the use of renewable electricity, where available and possible. In total, 39% of the electricity we consumed came from renewable energy sources in 2021. Our success in sourcing renewable energy largely depends on availability and on being able to have suffi cient proof of origin. In Brazil, Canada, Colombia, Ecuador, Venezuela, Romania, the Netherlands and the UK, most of Bekaert's electricity comes from renewable energy sources.
When it comes to renewable power generation, our eyes are on solar and wind energy. We are looking at wind turbine investments and private or public investments for our plants to source energy from onsite solar panels.
initiatives that aim to reduce energy consumption and greenhouse gas emissions. The Bekaert Manufacturing System (BMS), which is a longstanding transformation program focused on manufacturing excellence in general, focuses explicitly on energy and emission reduction measures. The largest part of Bekaert's greenhouse gas emissions relate to 'Scope 2' emissions from purchased electricity. These Scope 2 emissions were about stable compared to 2019 but increased versus last year because of the rebound of our operations to pre-Covid activity levels. Scope 2 energy intensity reduced by -4% in 2021 compared to the reference base-year 2019. This was the result of improved machine effi ciency and specifi c energy effi ciency programs.
Recycled steel: stimulate a circular economy
The total volume of wire rod we purchased and processed in 2021 contained 34% of recycled material¹, compared to 38% in 2020. The percentage of recycled material depends on the product specifi cations and the access to scrap-based wire rod. Today most of the steel used to produce wire rod is made via the primary route. This process is based on virgin iron ore that is used to produce pig iron in a blast furnace. Iron-ore based steel only uses a limited amount (typically ~18%) of steel scrap as coolant for the subsequent convertor process. Steel produced via the secondary route is usually made with much higher amounts of scrap mixed with iron-based pig iron, DRI (Direct Reduced Iron) and HBI (Hot Briquetted Iron).
¹ Excluding joint ventures.
Bekaert contributes to a circular economy by returning 100% of all steel scrap to the steel industry for recycling.
GRI 302-4
¹ More details on Bekaert's 2021 environmental performance and targets are included in Part II: Environmental Statements of this report.
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".
Prevention is better than mitigation. Our prevention and risk management-related activities include, among others:
• We comply with the EU regulations on hazardous substances (RoHS) in products. GRI 102-11
We aim to turn ideas into meaningful sustainable solutions that reduce the environmental footprint of our customers and end-markets. Read all about our products and solutions that contribute to a cleaner environment in the 'Value Chain' section in this Chapter and in Part II: Environmental Statements.
Recognizing the signifi cant carbon footprint associated with producing our products and solutions, we recently launched a new global program, "You Know Watt", to further reduce our energy consumption.
"You Know Watt" focuses on:
We believe in the 'power' of learning by doing. Therefore, we have designed several pilot energy implementation programs, each one following a structured process over a three-month period. We go from plant to plant to bring You Know Watt to the local teams, evaluating fi ndings and implementing energy effi ciency improvements.
We kicked this program off in our Izmit plant in Turkey in October 2021. The initial results are promising, with potential improvements in energy intensity in the range of 10-15%, which is in line with our expectations and ambitions. In addition, we identifi ed several learning opportunities to improve the process, which were incorporated in the design of the next pilot which started in China in February 2022.
* JVs included
During 2021 Bekaert has made signifi cant strides in accelerating the innovation agenda. We appointed a new Chief Innovation and Technology Offi cer, attracted high-profi le talent and consulting services, and added innovation projects with promising growth opportunities to the project pipeline. Total R&D expenses before deduction of grants and tax credits amounted to € 67 million in 2021, compared to € 57 million in 2020. Investments in intangible fi xed assets amounted to € 13 million in 2021 (€ 3 million in 2020) and mainly related to digital solutions.
Our focus is to develop sustainable and digital solutions for customers, explore new business models, and support and accelerate energy transition programs.
As we extend our scope of innovation activities beyond steel, we plan to expand our partnerships in research, open innovation, and collaboration with venture investors and start-ups in our fi elds of interest.
Innovation is a key priority in the new Bekaert strategy. We have identifi ed three 'business engines' to create a balanced pipeline of incremental and disruptive innovations. The acceleration of innovation programs will be supported by an increase in innovation budget of +50% over the coming fi ve years.
| ENGINE 0 SUPPORT OUR DAILY EFFORTS BY | ENGINE 1 SUPPORT OUR VALUE CREATION | ENGINE 2 CREATE NEW AVENUES OF GROWTH |
|---|---|---|
| ESTABLISHING: | STRATEGY THROUGH: | THAT ENABLE US TO: |
| • Top performing operations | • Innovation platforms that address customer needs | • Address major disruptions and need gaps in our key |
| • World class manufacturing through continuous | • Diff erentiation to be better, cheaper, greener and | markets |
| cost & process improvement | faster than our competitors | • Be a disruptor rather than be disrupted |
| • Responsive support to customers | • Prioritizing strategic alignment and value potential | • Enter new businesses where we leverage our core and scale • Collaborate externally through open innovation |
As the company learns to embrace agile innovation methodologies, we held a virtual Dragon's Den event where our Business Unit innovators pitched their most promising projects. This demonstrated the breadth of ideas and activities as well as exciting examples of teamwork notwithstanding the challenges posed by remote working conditions. By cultivating an entrepreneurial mindset, we want to complement our cultures of operational excellence and technology leadership with a strong innovation culture.
During 2021 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 fl oating off shore wind turbine mooring, Bezinox® armoring solutions for power cables, PEM electrolyser fi bers 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 fi ber concrete reinforcement. In 2021, more than 85% of Bekaert's global portfolio of Research & Innovation eff orts targeted distinct sustainable benefi ts that: limit the use of natural and harmful resources; lower energy consumption and exhaust; increase recycling opportunities; enhance safety; and address the renewable energy market needs. More information on new products and solutions can be found in the 'Value Chain' section of this Chapter.
With the digital way of working and management execution systems (MES) being embraced in our plants, we deployed IoT (Internet of Things) systems for steel
cord plants to enhance quality assurance and monitor energy consumption. The data generated is feeding into both physical models and digital twins to accelerate R&D processes and drive innovations that reduce energy and the CO₂ footprint of manufacturing.
Bekaert's in-house engineering department plays a key role in the optimization and standardization of our production processes and machinery. Newly designed equipment always combines innovative solutions for performance improvements in various areas, including product quality, production excellence and fl exibility, cost effi ciency, energy consumption, machine safety, ergonomics and the environmental impact. Currently, we are implementing a new and sustainable operating model that allows us to concentrate on developing innovative equipment for new products, new processes and extended digital tools and features.
Bridon-Bekaert and VisionTek Engineering have been partners since 2018. What started as a venture capital investment gradually turned into a successful technology partnership and fi nally in the acquisition and integration of VisionTek in February 2022. Together with Bridon-Bekaert, VisionTek has developed the fi rst mobile 3D rope measuring and visioning equipment. 360° miniature cameras take high-resolution pictures of the rope in action and feed a real-time model that analyzes the data against artifi cial intelligence with performance and surface algorithms based on critical rope requirements.
This new, proprietary monitoring technology
addresses constant, real-time quality inspection and outperforms other measurement tools like magnetic testing which isn't always infallible. Bridon-Bekaert has started commercializing the equipment in 2021 to monitor steel and synthetic ropes of customers on a continuous basis. As such, it is part of BBRG's ambition to be a total solution provider and off er the most advanced services in the ropes market.
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. At the end of 2021, the Bekaert Group had a portfolio of more than 1 900 patents and patent rights, including 25 fi rst patent fi lings in 2021, and more than 1 700 trademark registrations.
Cyber risks can aff ect 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 eff ective 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.
Digital@Bekaert encompasses much more than information security. It is about building digital solutions and technology in general. With Digital@ Bekaert, we are on the path to further increase product quality, add effi ciency in our operations processes, build new business models, create value to customers and enhance tools and insight for employees.
In 2021, we continued connecting our plants to our manufacturing execution system (MES). It aims to connect and monitor machines on the factory fl oor. As a result, we can track all movement of goods by scanning incoming and produced goods, automatically capture data via the connected machines, and get instant input from the operator via their handheld device.
Parallel with MES, the Digital Bekaert Manufacturing System (BMS) allows us to generate user insights that are converted into actionable data. The digital performance dialogue enables supervisors to make more informed decisions and spend more time on the shopfl oor. The new mobile shopfl oor app is the extra pair of eyes and ears of the supervisors.
Bekaert actively seeks opportunities for cooperation with strategic customers, suppliers and academic research institutes and universities. We also consider investments in early-stage companies and venture capital funds that may create new attractive business models adjacent to Bekaert's current fi eld-of-play.
We maintain and strengthen our research partnership and 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.
Furthermore, we joined and chair the Hyve consortium with Flemish research centers imec and VITO, and industrial pioneers Colruyt Group, DEME and John Cockerill, to invest in the development and production of green hydrogen power. Hyve targets a cost-effi cient and sustainable production of hydrogen at gigawatt level.
More information on Bekaert's 21 research and academic partnerships is available in Part II: Social Statements of this report.
Bekaert has numerous corporate memberships, including various relevant bilateral chambers of commerce and general industry associations, such as Agoria, VOKA – Flanders and 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 102-13
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 scientifi c 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.
We are privileged to be a winning partner in the more than £ 60 million investments announced by the UK Government for the development of new technologies for deep-sea fl oating wind projects. Bridon-Bekaert was selected as one of the funded development partners in two of the eleven development projects: the development of a novel, lightweight anchoring system and the development of new mooring system technologies, cable protection, and an advanced digital monitoring system.
* 23 568 in consolidated entities + 3 613 in joint ventures = 27 181 combined
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 for our customers, and to care for each other and for the world around us. That's what being better together is all about.
As a company and as individuals, we act with integrity and commit to the highest standards of business ethics. We promote equal opportunity, foster diversity and we create a caring and safe working environment across our organization. Our values are ingrained in our culture and connect us all as One Bekaert team.
We act with integrity · We earn trust · We are irrepressible!
GRI 102-16, GRI 103-2
Bekaert is fi rmly 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 qualifi cations only.
GRI 102-12, GRI 103-2
The Bekaert Code of Conduct describes how we put our three Bekaert values – integrity, trust and irrepressibility - into practice and which leadership behaviors we expect from every Bekaert employee. Our Code of Conduct covers, among others, key areas regarding human rights, child labor and forced labor, and anti-bribery and corruption policy and principles.
GRI 205-2, GRI 408-1, GRI 409-1
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 specifi c training, but also leadership modules that help our people develop and cooperate in a global business environment.
Average hours of training per employee:
On average, each employee received 33 hours of training in 2021.
GRI 404-1, GRI 404-2, GRI 103-2
To keep our employees up to speed with the latest innovations in their work domain, we expanded our learning off ering digitally. The academies of the Bekaert University brought more courses to our online My Learning platform, while we now also off er access for all employees to external learning services. Health & safety
In 2021 we launched Elevation, a development program designed to equip fi rst-time leaders with the knowledge, skills, and confi dence that help them become an eff ective team leader who keeps a team motivated, aligned, and engaged. The program coaches fi rst-time leaders to set and achieve personal and professional goals, expand their network, and broaden their experience.
Learning & development The program is a powerful blended learning experience, combining online e-learning with practical facilitatorled group workshops to put theory into practice, and adding individual coaching sessions with experienced business leaders to the mix.
41 colleagues from 20 diff erent countries participated in the virtual program. All our Elevation colleagues received a toolbox to support them on their development journey.
From 11-15 October we organized our annual Information Security week. During this week our employees learned how to be cybersmart and witnessed how easy it is to hack our systems if we don't secure our devices. The learning was put to the test in an online escape game in which over 200 colleagues participated.
More details about learning & development in Bekaert are included in Part II: Social Statements of this report.
In January 2021 we introduced a hybrid working model for offi ce workers at Bekaert, based on the approach that work is not a place that you go to but about the activities that a team is accountable for. The new way of working is increasingly relevant today. It intends to protect people's health during the pandemic and boost productivity, engagement and well-being.
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.
For the fourth year in a row, the safety-related key performance indicators LTIFR and TRIR showed continued good progress. 2021 marked, however, a setback in terms of SI: the number of serious incidents leading to life-altering injuries increased from 1 case in 2020 to 8 in 2021, all of which related to hand and fi nger injuries. Bekaert is reinforcing its safety
program through awareness campaigns, trainings, and dedicated investments to secure safe working conditions for all employees.
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) GRI 103-2
More details about Bekaert's safety performance are included in Part II: Social Statements of this report.
In 2021, 14 plants achieved 1 year without any recordable safety incident. 9 plants were 2 years incident-free. 7 plants achieved 3 to 4 years without recordable safety incidents, and 2 plants have been incident-free for 8 or more years. They are Bekaert's safety champions and lead the way toward a no-harm, risk-free working environment for all.
To help fi ght the global pandemic, we strongly encourage all employees to accept a vaccination in line with national vaccination campaigns and laws, and specifi c medical advice. We support access to the vaccination for everyone and organized vaccination for employees and outsourced staff in countries without an eff ective national vaccination campaign, all while respecting the freedom of choice and privacy. We do not discriminate against employees based on their choice to accept or decline a vaccination when off ered. We also count on our employees to respect the choice of others.
At the end of 2021, we launched Compass, a safety, health & environment (SH&E) learning journey for our operational leadership. The training aims at building awareness, knowledge and understanding about SH&E related compliance and liabilities, understanding the role of site managers in the whole process, building the skills needed to manage SH&E compliance in the plant, and getting familiar and equipped with the tools and skills needed.
The course uses a mix of live-sessions and self-study. The program is structured in 4 streams aligned with the BeCare Safety program: Leadership, Governance, People & Environment at Risk, People take risk.
Compass will be rolled out globally in 2022. The training will be included in the standard induction program for new colleagues in an operational leadership role.
In September we organized our annual Health & Safety week, this time with "all injuries are preventable" as the central theme and with particular focus on hand & fi nger safety, Covid-19 prevention, and mental resilience.
Doctors busted the myths about Covid-19 and during online discussions we learned from experts how societal and psychological changes might shape how we work and live. A team of medical experts gave us more insights in the medical and psychological impact of hand injuries. We also learned more about building mental strength and stress awareness and recognizing and preventing burnouts. It is Bekaert's aspiration to provide (local) mental health support to all our teams. Our team in the BBRG plant in the UK explained its Mental Health First Aid program. In Belgium we rolled out the Employee Assistance Program in collaboration with an external team of professionals. Through this plan employees can use several channels to get help with mental issues.
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 affi nity 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 2021). 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.
Bekaert is a truly international organization and embraces the very rich cultural diversity within our team. We employ people from 72 nationalities in 45 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.
Bekaert strives to be a loyal and responsible partner in the communities where we are active. 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. United by the belief that there should be no harm to anyone, we do condemn any act of violence and aggression against people.
All around the world Bekaert teams have organized support programs that benefi t 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 Covidlockdowns. Our entities in Ecuador and India supported micro-fi nancing projects that help women set up a small business. Teams all over the world participated in sports and other events to support programs that benefi t people with a physical or mental disability or in fi nancial need. Various entities engaged local stakeholders in safety programs during the Bekaert Health & Safety week .
Mid 2021, heavy rainfall across northern and central parts of Europe caused devastating fl oods in several regions. The houses of many families and entire villages became uninhabitable due to the extreme water level and current. The management of Bekaert was deeply touched by the damage and human impact of the fl oods and donated € 50 000 to the Red Cross to help victims with fi rst aid and support.
Early 2022, the humanitarian impact of the situation in Ukraine changed the face of the world. Our thoughts are with the people from Ukraine and our priority is the wellbeing of our employees and their families, and to support them wherever they are. Our teams in the region do their utmost to help those in need in whichever way they can, and as a company we are supporting various humanitarian eff orts through donations and by off ering employment and accommodation at diff erent locations.
We are one team, united by Bekaert's history and values, and by working better together for all our stakeholders.
GRI 103-2
Bekaert has concluded, in December 2021, a partnership with River CleanUp, a non-profi t 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 ecosystems. Bekaert supports both fi nancially and in-kind, through engineering advice and materials, like synthetic ropes. The organization will help 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.
CORPORATE GOVERNANCE STATEMENTS
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):
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 certifi cates relating thereto).
The Code 2020 is available at www.corporategovernancecommittee.be.
The Bekaert Corporate Governance Charter is available at www.bekaert.com.
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 thirteen members, who are appointed by the General Meeting of Shareholders. Seven of the Directors are appointed from among candidates nominated by the principal shareholder. The Chairman and the Chief Executive Offi cer are never the same individual. The Chief Executive Offi cer is the only Board member with an executive function. All other members are non-executive Directors. Five 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 (fi rst appointed in 2020), Colin Smith (fi rst appointed in 2018), Eriikka Söderström (fi rst appointed in 2020), Jürgen Tinggren (fi rst appointed in 2019) and Mei Ye (fi rst appointed in 2014).
The Board of Directors met on eight occasions in 2021: there were six regular meetings and two extraordinary 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 2021:
| 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 | 8 |
| Chief Executive O cer | ||||
| Oswald Schmid | May 2020 | May 2022 | NV Bekaert SA | 8 |
| Members nominated by the principal shareholder |
||||
| Gregory Dalle | May 2015 | May 2023 | Managing Director, Credit Suisse, division Investment Banking and Capital Markets (UK) | 8 |
| Charles de Liedekerke | May 1997 | May 2022 | Director of companies | 8 |
| Christophe Jacobs van Merlen | May 2016 | May 2024 | Managing Director, Bain Capital Private Equity (Europe), LLP (UK) | 8 |
| Hubert Jacobs van Merlen | May 2003 | May 2022 | Director of companies | 7 |
| Caroline Storme | May 2019 | May 2023 | R&D Finance Lead Neurology at UCB (Belgium) | 8 |
| Emilie van de Walle de Ghelcke | May 2016 | May 2024 | Head of Legal at Sofi na (Belgium) | 8 |
| Henri Jean Velge | May 2016 | May 2024 | Director of Companies | 8 |
| Independent Directors | ||||
| Henriette Fenger Ellekrog | May 2020 | May 2025 | Chief Human Resources Offi cer, Ørsted | 8 |
| Colin Smith | May 2018 | May 2022 | Independent director of and advisor to companies | 8 |
| Eriikka Söderström | May 2020 | May 2025 | Non-executive director of companies | 8 |
| Mei Ye | May 2014 | May 2022 | 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.
Note: the composition of the Board of Directors will change in 2022: see Part I – Our Leadership – Board of Directors and Part II – Financial Statements: Parent Company Information: appointments pursuant to the Articles of Association.
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 Offi cer 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. Hubert Jacobs van Merlen has been appointed by the members of the Committee as the Chairman.
The Chief Executive Offi cer and the Chief Financial Offi cer 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 |
|---|---|---|
| Hubert Jacobs van Merlen | 2022 | 5 |
| Charles de Liedekerke | 2022 | 5 |
| Eriikka Söderström | 2025 | 5 |
| Jürgen Tinggren | 2023 | 5 |
The Committee had four regular and one extraordinary meeting in 2021. The Statutory Auditor attended three meetings. In addition to its statutory powers and its powers under the Bekaert Corporate Governance Charter, the Committee discussed the following main subjects:
The Nomination and Remuneration Committee is composed as required by Article 7:100 of the BCCA: 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 fi eld 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 | 4 | |
| Henriette Fenger Ellekrog | 2025 | 4 | |
| Christophe Jacobs van Merlen | 2024 | 4 |
One of the Directors nominated by the principal shareholder and the Chief Executive Offi cer are invited to attend the Committee meetings as a guest, without being a member.
The Committee met four times in 2021. In addition to its statutory powers and its powers under the Bekaert Corporate Governance Charter, the Committee discussed the following main subjects:
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 eff ective 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 Offi cer to assess their interaction with Executive Management.
In 2021, the Board of Directors did a self-assessment, focusing on the role and responsibilities of the Board and the Board Committees, Board meetings, Board composition and teamwork, relationship with management, relationship with shareholders, overall Board eff ectiveness and Chairman eff ectiveness. In addition, the Board sought feedback from Executive Management with respect to their relationship with the Board of Directors, through interviews by an external expert.
The Board of Directors has delegated special operational powers to the Bekaert Group Executive (BGE), under the leadership of the Chief Executive Offi cer. The BGE has subdelegated 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.
As of 12 May 2020, Oswald Schmid acted as interim Chief Executive Offi cer, pending the appointment of a new Chief Executive Offi cer. On 2 March 2021, the Board of Directors appointed Oswald Schmid as Chief Executive Offi cer.
Kerstin Artenberg joined Bekaert as Chief Human Resources Offi cer on 8 February 2021.
Yves Kerstens joined Bekaert as Divisional CEO Specialty Businesses and Chief Operations Offi cer on 1 April 2021.
Jun Liao, the former China CEO, left Bekaert on 14 July 2021. Bekaert is searching for a successor. In parallel, an informal body of experts was established early 2022 that will provide advice to management and the Board with respect to the Chinese environment in which the Bekaert group is operating.
| Name | Position | Appointed as BGE member |
|---|---|---|
| Oswald Schmid¹ | Chief Executive Offi cer | 2019 |
| Taoufi q Boussaid | Chief Financial Offi cer | 2019 |
| Kerstin Artenberg² | Chief Human Resources Offi cer | 2021 |
| Juan Carlos Alonso | Chief Strategy Offi cer | 2019 |
| Curd Vandekerckhove | Divisional CEO Bridon-Bekaert Ropes Group | 2012 |
| Arnaud Lesschaeve | Divisional CEO Rubber Reinforcement | 2019 |
| Yves Kerstens³ | Divisional CEO Specialty Businesses and Chief Operations Offi cer |
2021 |
| Stijn Vanneste | Divisional CEO Steel Wire Solutions | 2016 |
| Jun Liao⁴ | China CEO | 2018 |
¹ As of 2 March 2021. ² As of 8 February 2021. ³ As of 1 April 2021. ⁴ Until 14 July 2021.
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.
Bekaert employs people of 72 diff erent nationalities in 45 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 |
13 | 8 | 7 | 54% |
| BGE | 8 | 5 | 5 | 63% |
¹ Non-native = nationality other than the country where the registered offi ce of the Company is located, i.e. Belgium.
Since the Annual General Meeting of 11 May 2016, 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 2021: People, and in Part II: Social Statements of this report.
| # people | % male | % female | |
|---|---|---|---|
| Board of Directors | 13 | 62% | 38% |
| BGE | 8 | 87% | 13% |
| # people | 30-50 years old |
over 50 years old |
|
|---|---|---|---|
| Board of Directors | 13 | 31% | 69% |
| BGE | 8 | 38% | 62% |
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 confl ict of interest of a fi nancial nature with the Company and should refrain from participating in the discussion of and voting on those items. A confl ict of interest arose on two occasions in 2021. The provisions of Article 7:96 of the BCCA were complied with.
On 19 January 2021, Oswald Schmid had a confl ict of interest when the Board of Directors discussed the search for the new Chief Executive Offi cer.
On 2 March 2021, Oswald Schmid had a confl ict of interest when the Board discussed and had to vote on his short-term variable remuneration on account of his 2020 performance as Chief Operations Offi cer and interim Chief Executive Offi cer (€ 500 000), his appointment as Chief Executive Offi cer and his remuneration as Chief Executive Offi cer (annual fi xed pay of € 825 000, target short-term incentive of 75% of annual fi xed pay, target long-term incentive of 85% of annual fi xed pay and pension contribution of 25% of annual fi xed pay).
Excerpt from the minutes:
On the motion of the Nomination and Remuneration Committee, the Board approves the proposed short-term variable remuneration payable to Mr Oswald Schmid on account of his 2020 performance as Chief Operations Offi cer and interim CEO.
On the motion of the Nomination and Remuneration Committee, the Board resolves:
The Bekaert Corporate Governance Charter contains conduct guidelines with respect to direct and indirect confl icts 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 confl ict of interest concerning such transactions occurring in 2021 (cf. Note 7.4 to the consolidated fi nancial statements).
The Board of Directors has approved the Bekaert Code of Conduct, which was fi rst issued on 1 December 2004 and l ast updated in October 2020 .
The Bekaert Code of Conduct describes how the Bekaert values (We act with integrity – We earn trust – We are irrepressible!) 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.
The Board of Directors has adopted the Bekaert Dealing Code on 28 July 2016, which became eff ective 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 fi nancial 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 notifi cation to the Company and to the Belgian Financial Services and Markets Authority (FSMA). The Company Secretary is the Dealing Code Offi cer for purposes of the Bekaert Dealing Code.
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 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 2021 remuneration for the nonexecutive Directors has been determined by General Meeting of Shareholders on 12 May 2021, 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 fi xed amount of € 650 000 per year (for the period June - May).
In accordance with the Remuneration Policy, the remuneration for the Chief Executive Offi cer has been determined by the Board of Directors, acting upon proposals from the Nomination and Remuneration Committee (NRC). The Chief Executive Offi cer 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 Offi cer's contract with the Company refl ects the remuneration policy. A copy of the Chief Executive Offi cer'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 Offi cer has been determined by the Board of Directors acting upon proposals from the NRC. The Chief Executive Offi cer has an advisory role in this process. The NRC ensures that the contract of each BGE member with the Company refl ects the remuneration policy. A copy of each such contract is available to any Director upon request to the Chairman.
During 2021 the NRC has conducted an external executive remuneration benchmarking with an external consultant. The remuneration of the Chief Executive Committee and the members of the BGE were benchmarked versus a selected European peer group. The outcome of this benchmarking will be considered upon reviewing the annual increase in fi xed remuneration during 2022. The NRC has also reviewed actions supporting the sustainability strategy of the Company and recommended to include an ESG element in the performance metrics for short-term incentives (STI) 2022.
Remuneration is set at a level that is suffi cient 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 specifi c role as Chairman of the Board, or Chairman or member of the Board Committees, as well as their resulting responsibilities and commitments in time.
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.
Without prejudice to his remuneration in his capacity as Executive Manager, the Chief Executive Offi cer is not entitled to receive remuneration for his mandate as executive Director.
A modular fee structure is applied for non-executive Directors to ensure that the remuneration fairly refl ects their role as Board member and specifi c role as Chairman of the Board of Directors, or Chairman 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 fi xed amount of € 650 000 per year converted into a number of Company shares by applying an average share price; the applied share price will be the average of the last fi ve closing prices preceding the date of the grant; the Company shares are granted on the last trading day of May of the relevant year and are blocked for a period of three years as from the grant date.
The remuneration of each non-executive Director, except the Chairman, is set as follows:
The Chairman and the other non-executive Directors do not receive any performancerelated 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 benefi ts.
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)
Bekaert Annual Report 2021 65
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 certifi cates relating thereto).
Expenses that are reasonably incurred in the performance of their duties are reimbursed to Directors, upon submission of suitable justifi cation. In making such expenses, the Directors should take into account the Board Member Expense Policy.
The Company off ers 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 fi xed pay, benefi ts 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.
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 fi nancial metrics aligned with the Company strategy.
Benefi ts and allowances are aligned with local practice and local policies; they are designed to be competitive and cost eff ective. This includes pension benefi ts aiming to support Executive Managers in their retirement planning.
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.
The remuneration of both the Chief Executive Offi cer (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.
An illustration of the STI plan is shown below:
Note: For CEO and Corporate Functions the split [40% Company Performance - 60% business unit performance] is replaced by 100% Company performance.
Company performance driving STI in 2021 is based on the below metrics, according to the internal Bekaert Management Reporting:
| Business Objective Bekaert Group | Weight | Threshold | Target | Maximum | Actual Performance | Assessment |
|---|---|---|---|---|---|---|
| Underlying Gross Profi t | 20% | € 556 mln | € 617 mln | € 679 mln | € 903 mln | Exceptional |
| Underlying EBITDA | 50% | € 419 mln | € 465 mln | € 525 mln | € 695 mln | Exceptional |
| Working Capital as % of Sales | 20% | 17.0% | 16.1% | 15.0% | 12.6% | Exceeded |
| Implementation of the Digital Agenda | 10% | Achieved | ||||
| Overall | Exceptional |
The Board, acting upon recommendation of the NRC, decided to assess the overall company performance as Exceptional leading to a multiplier of 200%, taking into consideration that the weighted average of the above scorecard resulted into a multiplier in the range of 175% to 200%. Evaluation of the non-fi nancial target, implementation of the digital agenda, has been based on the progress ratio of thirteen digital and/or digitalization initiatives.
For 2022 a basket of fi nancial targets (gross profi t, underlying EBITDA and working capital) and a non-fi nancial ESG target (percentage female salaried professionals and managers) was retained. This is combined with specifi c business unit and individualized objectives. Given the commercial sensitivity of our short-term goals, the performance goals will be disclosed in the 2022 remuneration report.
The vesting criteria regarding to the performance share units issued in February 2019, in relation to the 2019-2021 performance horizon, have exceeded the maximum level. Therefore, 300% of the performance share units granted in February 2019 have vested related to this performance period for all members of the BGE, with the exception of the Divisional CEO BBRG. For the performance cycle 2019-2021, his performance metrics were linked to a specifi c BBRG EBITDA profi t restoration plan; leading to a vesting of 288% of the performance share units granted in February 2019. As of 2020 the vesting criteria with regard to the performance share units of the Divisional CEO BBRG are aligned with the business objectives of the Group.
The vesting criteria and outcome according to the internal Bekaert Management Reporting with regard to the performance share units issued in February 2019 in relation to the 2019-2021 performance horizon for members of the BGE, with exception of the Divisional CEO BBRG were as follows:
| Business Objective Bekaert Group | Weight | Threshold | Target | Maximum | Actual Performance | Vesting |
|---|---|---|---|---|---|---|
| Underlying EBITDA growth | 50% | € 100 mln | € 140 mln | € 200 mln | € 270 mln | 300% |
| Cum. operational Cash Flow (1) | 50% | € 645 mln | € 725 mln | € 845 mln | € 1 498 mln | 300% |
| Total | 100% | 300% |
¹ Defi ned as EBITDA-Underlying + impact provisions - Capex in PP&E and intangible assets + disposal impact for PP&E and intangible assets +/- Cash Flows Working Capital.
For performance period 2022-2024 specifi c company fi nancials have been selected; more in particular Underlying EBITDA as percentage of Sales, Cumulative operational Cash Flow and TSR related to peer index . Given the commercial sensitivity of our long-term goals, the 2022 – 2024 performance goals will be disclosed at the conclusion of the three-year performance period
At par level, the value of the variable remuneration elements of the Chief Executive Offi cer 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.
The Chief Executive Offi cer and the other members of the BGE are required to build a personal shareholding in Company shares within fi ve years from the time of appointment, and to maintain this level for the full period of appointment.
To facilitate this, the Company off ers 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.
The amount of the remuneration granted directly or indirectly to the non-executive Directors, by the Company or its subsidiaries, in respect of 2021 is set forth on an individual basis below. The non-executive Directors only receive fi xed remuneration, partially paid out in cash and partially in shares (cfr. section 4).
| Fixed amount for performance of |
Fixed amount for Board Committee |
|||
|---|---|---|---|---|
| in € | Period covering fi xed amount | duties as a member of the Board |
membership and/or chairing |
Total |
| Jürgen Tinggren1,5 | 01.01.2021 - 31.12.2021 | 462 500 | n.a. | 462 500 |
| Charles de Liedekerke² | 01.01.2021 - 31.12.2021 | 70 000 | 20 000 | 90 000 |
| Hubert Jacobs van Merlen3 | 01.01.2021 - 31.12.2021 | 70 000 | 25 000 | 95 000 |
| Mei Ye | 01.01.2021 - 31.12.2021 | 70 000 | 70 000 | |
| Gregory Dalle | 01.01.2021 - 31.12.2021 | 70 000 | 70 000 | |
| Emilie van de Walle de Ghelcke | 01.01.2021 - 31.12.2021 | 70 000 | 70 000 | |
| Christophe Jacobs van Merlen4 | 01.01.2021 - 31.12.2021 | 70 000 | 20 000 | 90 000 |
| Henri Jean Velge | 01.01.2021 - 31.12.2021 | 70 000 | 70 000 | |
| Colin Smith | 01.01.2021 - 31.12.2021 | 70 000 | 70 000 | |
| Caroline Storme | 01.01.2021 - 31.12.2021 | 70 000 | 70 000 | |
| Henriette Fenger Ellekrog4 | 01.01.2021 - 31.12.2021 | 70 000 | 20 000 | 90 000 |
| Eriikka Söderström2 | 01.01.2021 - 31.12.2021 | 70 000 | 20 000 | 90 000 |
| Total Directors' Remuneration | 1 337 500 |
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 Chairman of the Audit, Risk and Finance Committee
⁴ Member of the Nomination and Remuneration Committee
⁵ The fi xed amount of € 462 500 includes a board fee of € 83 333 related to the period January - May 2021 and a pro-rated share grant of € 650 000 related to the period June - December 2021.
The fi xed 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 fi xed 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 fi xed 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 Chairman of a Board Committee are paid in cash.
Set out below are the number of Company shares granted to non-executive Directors in 2021. 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 | 7 930 | 31/5/2024 |
| Non-executive Directors nominated by the principal shareholder | ||||
| Gregory Dalle | 50% | 35 000 | 474 | n.a. |
| Charles de Liedekerke | —% | — | — | n.a. |
| Christophe Jacobs van Merlen | 50% | 35 000 | 474 | n.a. |
| Hubert Jacobs van Merlen | 25% | 17 500 | 239 | n.a. |
| Caroline Storme | —% | — | — | n.a. |
| Emilie van de Walle de Ghelcke | 50% | 35 000 | 444 | n.a. |
| Henri Jean Velge | 50% | 35 000 | 444 | n.a. |
| Independent non-executive Directors | ||||
| Henriette Fenger Ellekrog | 25% | 17 500 | 241 | n.a. |
| Colin Smith | —% | — | — | n.a. |
| Eriikka Söderström | 50% | 35 000 | 483 | n.a. |
| Mei Ye | 25% | 17 500 | 211 | n.a. |
| Total | 877 500 | 10 940 |
¹ The share grant of € 650 000 covers the period June 2021 - May 2022.
Without prejudice to the remuneration in the capacity as Executive Manager, the Chief Executive Offi cer did not receive remuneration for the mandate as executive Director.
The amount of the remuneration and other benefi ts granted directly or indirectly to the Chief Executive Offi cer, by the Company or its subsidiaries, in respect of 2021 for his role as (interim) Chief Executive Offi cer is set forth below:
| Chief Executive O cer Comments | ||
|---|---|---|
| Oswald Schmid | ||
| Period | 01.01.2021-31.12.2021 | |
| Fixed pay | 921 613 Includes base remuneration and foreign director fees and the extra responsibility premium for the Interim CEO period | |
| STI | 1 160 250 Annual variable remuneration, based on 2021 performance | |
| LTI | — Value of vested performance share units (performance period 2019-2021) | |
| Pension | 185 179 Defi ned Contribution and Cash Balance pension plans | |
| Share-matching | — 2021 Company matching of 2019 personal investment in Company shares (none) | |
| Other remuneration elements | 89 295 Includes company car and risk insurances | |
| Total remuneration | 2 356 337 | |
| Variable remuneration expressed as % of total | 49% Sum of STI, LTI and Share-Matching | |
| Fixed remuneration expressed as % of total | 51% Sum of Fixed Pay, Pension and Other |
Oswald Schmid has entered on 2 December 2019 as Chief Operation Offi cer, as from 12 May 2020 he also served as Interim Chief Executive Offi ce; on 2 March 2021 he has been appointed Chief Executive Offi cer.
The Remuneration Policy stipulates that the target STI is 75% of fi xed pay for the CEO and 60% of fi xed pay for the other members of the BGE. As a consequence, the 2021 STI target has been pro-rated considering 60% target for service as Interim Chief Executive Offi cer up to 2 March 2021 and 75% target for service as Chief Executive Offi cer as of 2 March 2021.
The evaluation of STI performance criteria over 2021 leads to a payout of 200% versus target for the CEO.
There has been no LTI vesting in 2021; the CEO entered the Company in December 2019 and therefore did not participate in the performance share plan issued in February 2019 covering performance period 2019-2021.
The Remuneration Policy stipulates that the target LTI is 85% of fi xed pay for the CEO and 65% of fi xed pay for the other members of the BGE. On 15 January 2021 performance share units have been granted with respect to performance period 2021-2023 considering a 65% LTI target. Following the appointment as CEO later in the year, additional performance share units have been granted on 9 September 2021 refl ecting the increase in target LTI from 65% to 85% of fi xed pay.
There has been no Company matching of personal investment in shares in 2021 after a three year retention period; the CEO entered the Company in December 2019 and no personal investment in shares has been made in 2019.
Following the appointment as Chief Executive Offi cer, affi liation with the Cash Balance plan for Executives has been discontinued in March 2021. In accordance with the service agreement, pension accrual as of March 2021is foreseen in a Defi ned Contribution plan. The above table includes accrual in both plans during this transition year.
The amount of the remuneration and other benefi ts granted directly or indirectly to the BGE members other than the (interim) Chief Executive Offi cer, by the Company or its subsidiaries, in respect of 2021 is set forth below on a global basis. The remuneration includes pro rata remuneration of Yves Kerstens and Kerstin Artenberg who joined during 2021, and of Jun Liao who left.
| Remuneration Comments | ||
|---|---|---|
| Fixed pay | 2 854 488 Includes base remuneration as well as foreign director fees | |
| STI | 3 004 319 Annual variable remuneration, based on 2021 performance | |
| LTI | 4 956 359 Value 140 447 vested performance share units (performance period 2019-2021) and vested stock options | |
| Pension | 676 964 Defi ned Contribution, Defi ned Benefi t and Cash Balance pension | |
| Share-matching | — 2021 Company matching of 2019 personal investment in Company shares (0 units) | |
| Other remuneration elements | 259 535 Includes company car, risk insurances, school fees and housing allowance | |
| Total remuneration | 11 751 665 | |
| Variable remuneration expressed as % of total | 68% Sum of STI, LTI and Share-Matching | |
| Fixed remuneration expressed as % of total | 32% Sum of Fixed Pay, Pension and Other |
The evaluation of STI performance criteria over 2021 leads to a payout of 176% (weighted average) versus target for the other members of the BGE.
The vesting criterion with regard to the performance share units issued in February 2019, in relation to the 2019-2021 performance horizon, has exceeded the maximum level. As a consequence, 300% of the performance share units granted in February 2019 have vested in 2021 for all BGE members with the exception of the Divisional CEO BBRG. For the performance cycle 2019-2021, his performance metrics were linked to a specifi c BBRG profi t restoration plan; leading to a vesting of 288% of the performance share units granted in February 2019.
The exercise price of stock options in relation to the previous long-term incentive plans which vested in 2021 was lower than the closing price of a Company share upon vesting.
The pension expense captures a combination of several pension arrangements in place in the diff erent work locations of the BGE members; being Belgium, France and China. The amount mentioned in the above table represents the annual employer contribution for the relevant defi ned contributions plans, the accrued pay credit for the relevant cash balance plan, the employer contribution into the mandatory second pillar arrangements and IAS19 service cost for defi ned benefi t plans with a collective funding basis.
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.
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 Offi cer and the other members of the BGE participate in a voluntary share-matching plan.
Performance share units related to the performance period 2021-2023 have been granted to the Executive Management on 15 January 2021 (19 August 2021 for the two members of the Executive Management who entered during 2021). The Remuneration Policy stipulates target LTI is 85% of fi xed pay for the CEO and 65% of fi xed pay for the other members of the BGE. Following the appointment as CEO after the 15 January 2021 grant, additional performance share units have been granted on 9 September 2021 refl ecting the increase in target LTI from 65% to 85% of fi xed pay.
Company fi nancials retained as performance targets covering the 2021-2023 performance period are EBITDA Underlying growth and elements of cumulative cash fl ow.
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 O cer | ||||||||||
| PSP 2018-2020 | 2020-2022 | EBITDA-U & Cum. CF | 21/1/2020 | 31/12/2022 | 10 957 | 10 957 | 0 | 0 | 0 | 10 957 |
| 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 | |||
| TOTAL | 10 957 | 18 145 | 0 | 0 | 29 102 | |||||
| Taoufi q Boussaid - Chief Financial O cer | ||||||||||
| PSP 2018-2020 | 2019-2021 | EBITDA-U & Cum. CF | 26/7/2019 | 31/12/2021 | 10 478 | 10 478 | -31 434 | 0 | ||
| PSP 2018-2020 | 2020-2022 | EBITDA-U & Cum. CF | 21/1/2020 | 31/12/2022 | 9 810 | 9 810 | 9 810 | |||
| PSP 2018-2020 | 2021-2023 | EBITDA-U & Cum. CF | 15/1/2021 | 31/12/2023 | 10 762 | 10 762 | 10 762 | |||
| TOTAL | 20 288 | 10 762 | 0 | -31 434 | 20 572 | |||||
| Kerstin Artenberg - Chief Human Resources O cer | ||||||||||
| PSP 2018-2020 | 2021-2023 | EBITDA-U & Cum. CF | 19/8/2021 | 31/12/2023 | 5 683 | 5 683 | 5 683 | |||
| TOTAL | 0 | 5 683 | 0 | 0 | 5 683 |
| Juan Carlos Alonso - Chief Strategy O cer | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| PSP 2018-2020 | 2019-2021 | EBITDA-U & Cum. CF | 26/7/2019 | 31/12/2021 | 9 391 | 9 391 | -28 173 | 0 | ||
| PSP 2018-2020 | 2020-2022 | EBITDA-U & Cum. CF | 21/1/2020 | 31/12/2022 | 8 409 | 8 409 | 8 409 | |||
| PSP 2018-2020 | 2021-2023 | EBITDA-U & Cum. CF | 15/1/2021 | 31/12/2023 | 8 007 | 8 007 | 8 007 | |||
| TOTAL | 17 800 | 8 007 | 0 | -28 173 | 16 416 | |||||
| Yves Kerstens - Div. CEO SPB and Chief Operations O cer |
||||||||||
| PSP 2018-2020 | 2021-2023 | EBITDA-U & Cum. CF | 19/8/2021 | 31/12/2023 | 5 732 | 5 732 | 5 732 | |||
| TOTAL | 0 | 5 732 | 0 | 0 | 5 732 | |||||
| Curd Vandekerckhove - Div. CEO BBRG | ||||||||||
| PSP 2018-2020 | 2019-2021 | BBRG EBITDA (1) | 15/2/2019 | 31/12/2021 | 11 962 | 11 962 | -34 451 | 0 | ||
| PSP 2018-2020 | 2020-2022 | EBITDA-U & Cum. CF | 21/1/2020 | 31/12/2022 | 10 447 | 10 447 | 10 447 | |||
| PSP 2018-2020 | 2021-2023 | EBITDA-U & Cum. CF | 15/1/2021 | 31/12/2023 | 9 948 | 9 948 | 9 948 | |||
| TOTAL | 22 409 | 9 948 | 0 | -34 451 | 20 395 | |||||
| Stijn Vanneste - Div. CEO SWS | ||||||||||
| PSP 2018-2020 | 2019-2021 | EBITDA-U & Cum. CF | 15/2/2019 | 31/12/2021 | 9 321 | 9 321 | -27 963 | 0 | ||
| PSP 2018-2020 | 2020-2022 | EBITDA-U & Cum. CF | 21/1/2020 | 31/12/2022 | 8 378 | 8 378 | 8 378 | |||
| PSP 2018-2020 | 2021-2023 | EBITDA-U & Cum. CF | 15/1/2021 | 31/12/2023 | 8 545 | 8 545 | 8 545 | |||
| TOTAL | 17 699 | 8 545 | 0 | -27 963 | 16 923 | |||||
| Arnaud Lesschaeve - Div. CEO RR | ||||||||||
| PSP 2018-2020 | 2019-2021 | EBITDA-U & Cum. CF | 26/7/2019 | 31/12/2021 | 6 142 | 6 142 | -18 426 | 0 | ||
| PSP 2018-2020 | 2020-2022 | EBITDA-U & Cum. CF | 21/1/2020 | 31/12/2022 | 9 428 | 9 428 | 9 428 | |||
| PSP 2018-2020 | 2021-2023 | EBITDA-U & Cum. CF | 15/1/2021 | 31/12/2023 | 10 043 | 10 043 | 10 043 | |||
| TOTAL | 15 570 | 10 043 | 0 | -18 426 | 19 471 | |||||
| Jun Liao - former CEO China | ||||||||||
| PSP 2018-2020 | 2019-2021 | EBITDA-U & Cum. CF | 15/2/2019 | 31/12/2021 | 12 663 | 12 663 | -12 663 | 0 | 0 | |
| PSP 2018-2020 | 2020-2022 | EBITDA-U & Cum. CF | 21/1/2020 | 31/12/2022 | 10 997 | 10 997 | -10 997 | 0 | 0 | |
| TOTAL | 23 660 | 0 | -23 660 | 0 | 0 |
¹ For the performance cycle 2019-2021, performance metrics were linked to a specifi c BBRG EBITDA profi t restoration plan; leading to a vesting of 288% of the performance share units granted in February 2019.
Set out below are the number of stock options exercised or forfeited in 2021 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 off ered to the benefi ciaries 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 off er 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 off er, and (ii) the last closing price preceding the date of the off er.
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 off er until the end of the tenth year following the date of their off er.
The stock options that were exercisable in 2021 are based on the grants of the Stock Option Plan 2015-2017 and on the predecessor plans to the Stock Option Plan 2015-2017.
The terms of the earlier plans are similar to those of the Stock Option Plan 2015-2017, but the options that were granted to employees under the predecessor plans to the Stock Option Plan 2010-2014 took the form of subscription rights entitling the holders to acquire newly issued Company shares, while self-employed benefi ciaries were entitled to acquire existing shares.
| Main plan characteristics | Movement over 2021 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Plan name | O er 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 O cer | ||||||||||
| None | ||||||||||
| TOTAL | 0 | 0 | 0 | 0 | ||||||
| Taoufi q Boussaid - Chief Financial O cer | ||||||||||
| None | ||||||||||
| TOTAL | 0 | 0 | 0 | 0 | ||||||
| Kerstin Artenberg - Chief Human Resources O cer | ||||||||||
| None | ||||||||||
| TOTAL | 0 | 0 | 0 | 0 | ||||||
| Juan Carlos Alonso - Chief Strategy O cer | ||||||||||
| None | ||||||||||
| TOTAL | 0 | 0 | 0 | 0 | ||||||
| Yves Kerstens - Div. CEO SPB and Chief Operations O cer | ||||||||||
| None | ||||||||||
| TOTAL | 0 | 0 | 0 | 0 |
| Curd Vandekerckhove - Div. CEO BBRG | ||||
|---|---|---|---|---|
| -- | ------------------------------------- | -- | -- | -- |
| None | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Arnaud Lesschaeve - Div. CEO RR | ||||||||||
| TOTAL | 40 650 | 0 | -11 900 | 28 750 | ||||||
| SOP 2015-2017 | 21/12/2017 | 20/2/2018 | 1/1/2021 | 20/12/2027 | 10 000 | 34.600 | 10 000 | 10 000 | ||
| 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 | 17/12/2015 | 15/2/2016 | 1/1/2019 | 16/12/2025 | 6 250 | 26.375 | 6 250 | 6 250 | ||
| SOP 2010-2014 | 18/12/2014 | 16/2/2015 | 1/1/2018 | 17/12/2024 | 7 500 | 26.055 | 7 500 | -7 500 | 0 | |
| SOP 2010-2014 | 19/12/2013 | 17/2/2014 | 1/1/2017 | 18/12/2023 | 3 200 | 25.380 | 3 200 | -3 200 | 0 | |
| SOP 2010-2014 | 20/12/2012 | 18/2/2013 | 1/1/2016 | 19/12/2022 | 2 400 | 19.200 | 1 200 | -1 200 | 0 | |
| Stijn Vanneste - Div. CEO SWS | ||||||||||
| TOTAL | 78 000 | 0 | -15 000 | 63 000 | ||||||
| SOP 2015-2017 | 21/12/2017 | 20/2/2018 | 1/1/2021 | 20/12/2027 | 9 000 | 34.600 | 9 000 | 9 000 | ||
| 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 | 17/12/2015 | 15/2/2016 | 1/1/2019 | 16/12/2025 | 10 000 | 26.375 | 10 000 | 10 000 | ||
| SOP 2010-2014 | 18/12/2014 | 16/2/2015 | 1/1/2018 | 17/12/2024 | 15 000 | 26.055 | 15 000 | 15 000 | ||
| SOP 2010-2014 | 19/12/2013 | 17/2/2014 | 1/1/2017 | 18/12/2023 | 14 000 | 25.380 | 14 000 | 14 000 | ||
| SOP 2010-2014 | 29/3/2013 | 28/5/2013 | 1/1/2017 | 28/3/2023 | 15 000 | 21.450 | 15 000 | -15 000 | 0 |
Set out below are the number of stock appreciation rights exercised or forfeited in 2021 in relation to the previous long-term incentive plans for BGE members outside Europe.
The stock appreciation rights (SARs) have been granted to the benefi ciaries free of charge. Each SAR entitles the holder the right to receive an amount in cash equal to the excess of the closing price of one Company share on the date of exercise over the exercise price; which is conclusively determined at the time of the off er and which is equal to the lower of: (i) the average closing price of the Company shares during thirty days prior to the off er, and (ii) the last closing price preceding the date of the off er.
Subject to the closed and prohibited trading periods and to the plan rules, SARs can be exercised as from the beginning of the fourth calendar year following the date of their off er until the end of the tenth year following the date of their off er.
SARs that were exercisable in 2021 are based on the grants of the SAR Plans 2015-2017 and on the predecessor plans to the SAR Plans 2015-2017. All grants mentioned below have been made prior to Jun Liao's BGE appointment.
| Main plan characteristics | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Plan name | Grant date | Vesting date | End exercise period |
Number of SAR granted |
Exercise price (in €) |
Number of SAR start of year |
Forfeited/ expired |
Exercised | Number of SAR end of year |
| Jun Liao - former CEO China | |||||||||
| SAR Asia 2010-201 | 18/12/2014 | 1/1/2018 | 17/12/2024 | 6 000 | 26.055 | 6 000 | -6 000 | 0 | |
| SAR Asia & Latam 2015-2017 | 17/12/2015 | 1/1/2019 | 16/12/2025 | 5 000 | 26.375 | 5 000 | -5 000 | 0 | |
| SAR Asia & Latam 2015-2017 | 15/12/2016 | 1/1/2020 | 14/12/2026 | 7 000 | 39.426 | 7 000 | -7 000 | 0 | |
| SAR Asia & Latam 2015-2017 | 21/12/2017 | 1/1/2021 | 20/12/2027 | 6 250 | 34.600 | 6 250 | -6 250 | 0 | |
| TOTAL | 24 250 | 0 | -24 250 | 0 |
The table below sets forth the number of shares matched by the Company for BGE members. As there was no STI payout in 2019, no personal investment in Company Shares have been made in 2019 and as a consequence no Company matching has occurred in 2021 following the three-year retention period:
| Date | Number of | Number of | Number of | |||||
|---|---|---|---|---|---|---|---|---|
| personal investment |
End holding period |
acquired shares |
PSR start of year |
Acquired | Matched | Forfeited | PSR end of year |
|
| Oswald Schmid – Chief Executive O cer | ||||||||
| 31/3/2020 | 31/12/2022 | 210 | 210 | 210 | ||||
| 31/3/2021 | 31/12/2023 | 2 096 | 0 | 2 096 | 2 096 | |||
| Taoufi q Boussaid - Chief Financial O cer | ||||||||
| 31/3/2020 | 31/12/2022 | 1 038 | 1 038 | 1 038 | ||||
| 31/3/2021 | 31/12/2023 | 838 | 0 | 838 | 838 | |||
| Kerstin Artenberg - Chief Human Ressources O cer | ||||||||
| None | ||||||||
| Juan Carlos Alonso - Chief Strategy O cer | ||||||||
| 31/3/2020 | 31/12/2022 | 971 | 971 | 971 | ||||
| 31/3/2021 | 31/12/2023 | 922 | 0 | 922 | 922 | |||
| Yves Kerstens - Div. CEO SPB and Chief Operations O cer | ||||||||
| None | ||||||||
| Curd Vandekerckhove - Div. CEO BBRG | ||||||||
| 31/3/2020 | 31/12/2022 | 2 413 | 2 413 | 2 413 | ||||
| 31/3/2021 | 31/12/2023 | 2 114 | 0 | 2 114 | 2 114 | |||
| Stijn Vanneste - Div. CEO SWS | ||||||||
| 31/3/2020 | 31/12/2022 | 1 608 | 1 608 | 1 608 | ||||
| 31/3/2021 | 31/12/2023 | 1 816 | 0 | 1 816 | 1 816 |
| Arnaud Lesschaeve- Div. CEO RR | ||||||
|---|---|---|---|---|---|---|
| 31/3/2020 | 31/12/2022 | 1 270 | 1 270 | 1 270 | ||
| 31/3/2021 | 31/12/2023 | 698 | 0 | 698 | 698 | |
| Jun Liao - former CEO China | ||||||
| 31/3/2020 | 31/12/2022 | 2 256 | 2 256 | -2 256 | 0 |
Jun Liao, the former China CEO, has decided to leave Bekaert as of 14 July 2021.
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
The Board did not make use of this right in 2021.
The main diff erence in remuneration policy between the Executive Management and employees in general, is the balance between fi xed 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 refl ects 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 eff ect.
The remuneration for Executive Managers is however aligned with the remuneration structures of the broader group of employees:
The ratio of the highest remuneration of the members of the Board of Directors and the Executive Management to the lowest remuneration of the employees of NV Bekaert SA in Belgium (excluding BGE members) is 57:1.
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 fi nancial Company metrics over the last 5 calendar years.
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Company remuneration | |||||
| Non-executive Directors¹ | |||||
| Average remuneration (€) | 86 671 | 95 768 | 121 629 | 104 000 | 111 458 |
| Year-on-year diff erence (%) | -2.4% | +10.5% | +27.0% | -14.5% | +7.2% |
| CEO | |||||
| Average remuneration (€) | 1 562 907 | 1 135 011 | 1 787 480 | 1 225 527 | 2 356 337 |
| Year-on-year diff erence (%) | -11.9% | -27.4% | +57.5% | -31.4% | +92.3% |
| Other BGE members | |||||
| Average remuneration (€) | 901 307 | 609 540 | 748 023 | 839 736 | 1 611 657 |
| Year-on-year diff erence (%) | +9.3% | -32.4% | +22.7% | +12.3% | +91.9% |
| Other employees² | |||||
| Average remuneration (€) | 72 406 | 76 067 | 77 757 | 79 859 | 87 727 |
| Year-on-year diff erence (%) | +2.7% | +5.1% | +2.2% | +2.7% | +9.9% |
| Key Company metrics | |||||
| EBITDA-underlying | |||||
| Amount in million (€) | 497 | 426 | 468 | 479 | 689 |
| Year-on-year diff erence (%) | -3.1% | -14.3% | +9.9% | +2.4% | +43.8% |
| Sales | |||||
| Amount in million (€) | 4 098 | 4 305 | 4 322 | 3 772 | 4 840 |
| Year-on-year diff erence (%) | +10.3% | +5.1% | +0.4% | -12.7% | +28.3% |
| Working Capital | |||||
| Amount in million (€) | 888 | 875 | 699 | 535 | 678 |
| Year-on-year diff erence (%) | +5.3% | -1.5% | -20.1% | -23.5% | +26.6% |
| Company share price (as at 31st Dec) | |||||
| Share price (€) | 36.45 | 21.06 | 26.50 | 27.16 | 39.14 |
¹ Through 2019, the remuneration of the Directors was based on the number of attended Board meetings
² Based on the average gross annual income of all employees of NV Bekaert SA in Belgium, excluding BGE members.
Upon recruitment of Yves Kerstens, Divisional CEO Specialty Businesses and Chief Operation Offi cer, compensation for loss of long-term incentives for a total amount of € 150 000 with the previous employer has been granted, subject to reimbursement in the event of resignation or in case of termination for cause.
The Bekaert share outperformed the reference index, Euronext Brussels BEL Mid, by 18% in 2021 and gained 44% comparing to the year-end closing price of 2020.
The Bekaert share is listed on Euronext Brussels as ISIN BE0974258874 (BEKB) and was fi rst listed in December 1972. The ICB sector code is 2727 Diversifi ed Industrials.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|---|---|---|---|
| Price as at 31 December (in €) | 25.72 | 26.34 | 28.38 | 38.48 | 36.45 | 21.06 | 26.50 | 27.16 | 39.14 |
| Price high (in €) | 31.11 | 30.19 | 30.00 | 42.45 | 49.92 | 40.90 | 28.26 | 28.50 | 42.56 |
| Price low (in €) | 20.01 | 21.90 | 22.58 | 26.56 | 33.50 | 17.41 | 19.38 | 13.61 | 27.34 |
| Price average closing (in €) | 24.93 | 27.15 | 26.12 | 37.06 | 42.05 | 28.21 | 23.96 | 19.95 | 36.33 |
| Daily volume | 126 923 | 82 813 | 120 991 | 123 268 | 121 686 | 154 726 | 96 683 | 72 995 | 68 749 |
| Daily turnover (in millions of €) | 3.1 | 2.1 | 3.1 | 4.5 | 5.0 | 4.4 | 2.3 | 1.5 | 2.5 |
| Annual turnover (in millions of €) | 796 | 527 | 804 | 1 147 | 1 279 | 1 121 | 592 | 386 | 641 |
| Velocity (% annual) | 54 | 35 | 52 | 53 | 51 | 65 | 41 | 31 | 29 |
| Velocity (% adjusted free fl oat) | 90 | 59 | 86 | 88 | 86 | 109 | 68 | 52 | 49 |
| Free fl oat (%) | 59.9 | 55.7 | 56.7 | 59.2 | 59.6 | 59.3 | 59.3 | 59.5 | 59.3 |
The average daily trading volume was about 69 000 shares in 2021. The volume peaked on 19 November, when 364 635 shares were traded on the day of the announcement of the third quarter trading update.
On 31 December 2021, Bekaert had a market capitalization of € 2.4 billion and a free fl oat market capitalization of € 1.4 billion. The free fl oat was 59.3% and the free fl oat band 60%.
On 3 September 2021 Bekaert announced that it had entered into a liquidity agreement with Kepler Cheuvreux. This agreement provides for the purchase and sale by Kepler Cheuvreux of Bekaert shares on the regulated market of Euronext Brussels and the program started on 10 September 2021 for a 12-month renewable period. 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 connection with the entry into force of the Act of 2 May 2007 on the disclosure of signifi cant 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 notifi cations 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 identifi cation survey in June 2021 and considering the subsequent transparency notifi cations, private banking, and treasury share movements until the end of 2021, as per 31 December 2021, Stichting Administratiekantoor Bekaert and parties acting in concert owned 36% of the shares. Institutional shareholders held approximately 34% of the shares and retail and private banking approximately 23%. Treasury shares represented 5% and 2% of the shares were unidentifi ed.
As of 31 December 2021, the capital of the Company amounts to € 177 923 000 and is represented by 60 452 261 shares without par value. The shares are in registered or nonmaterial form. All shares have the same rights.
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 notifi cation 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.
On 9 June 2021, Bekaert fully paid back in cash the convertible bonds that had been issued on 19 May 2016 in a principal amount of € 380 000 000. None of the bonds were converted into shares since the conversion price was not reached.
The total number of outstanding subscription rights under the Stock Option Plan 2005-2009 and convertible into Bekaert shares is 26 400. A total of 37 420 subscription rights were exercised in 2021 under the Stock Option Plan 2005-2009, resulting in the issue of 37 420 new Bekaert shares, and an increase of the capital by € 111 000 and of the share premium by € 965 800.50.
On 31 December 2020, the Company held 3 809 534 own shares. Of these 3 809 534 own shares, a total of 620 474 shares were transferred (i) to (former) employees for purpose of the exercise of stock options under SOP 2010-2014, SOP 2015-2017 and SOP2, (ii) to (former) BGE members for purpose of the personal shareholding requirement, and (iii) to the Chairman and other non-executive Directors as part of their remuneration (see table below). No own shares were cancelled. Including the transactions exercised under the liquidity agreement with Kepler Cheuvreux, the balance of own shares held by the Company on 31 December 2021 was 3 145 446 .
| Number of treasury | ||||
|---|---|---|---|---|
| Date | shares Purpose | Transferee | Price per share (€) | |
| 3 March 2021 | 6 300 Exercise options under SOP 2010-2014 | Employees | 25.140 | |
| 3 March 2021 | 62 400 Exercise options under SOP 2010-2014 | Employees | 25.380 | |
| 3 March 2021 | 4 000 Exercise options under SOP 2010-2014 | Employees | 21.450 | |
| 3 March 2021 | 6 300 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 4 March 2021 | 1 800 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 5 March 2021 | 1 200 Exercise options under SOP 2010-2014 | Employees | 19.200 | |
| 5 March 2021 | 3 200 Exercise options under SOP 2010-2014 | Employees | 25.380 | |
| 5 March 2021 | 5 000 Exercise options under SOP 2010-2014 | Employees | 25.140 | |
| 5 March 2021 | 6 250 Exercise options under SOP 2015-2017 | Employees | 26.375 | |
| 8 March 2021 | 7 000 Exercise options under SOP 2010-2014 | Employees | 21.450 | |
| 8 March 2021 | 2 700 Exercise options under SOP 2010-2014 | Employees | 25.140 | |
| 9 March 2021 | 2 100 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 9 March 2021 | 4 000 Exercise options under SOP 2010-2014 | Employees | 25.140 | |
| 10 March 2021 | 2 000 Exercise options under SOP 2010-2014 | Employees | 25.380 | |
| 10 March 2021 | 6 400 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 10 March 2021 | 9 200 Exercise options under SOP 2010-2014 | Employees | 25.140 | |
| 10 March 2021 | 5 000 Exercise options under SOP 2010-2014 | Employees | 19.200 | |
| 10 March 2021 | 10 000 Exercise options under SOP 2010-2014 | Employees | 21.450 | |
| 10 March 2021 | 1 500 Exercise options under SOP 2015-2017 | Employees | 26.375 | |
| 11 March 2021 | 1 000 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 11 March 2021 | 3 000 Exercise options under SOP 2010-2014 | Employees | 25.380 | |
| 11 March 2021 | 1 750 Exercise options under SOP 2015-2017 | Employees | 26.375 | |
| 12 March 2021 | 2 100 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 15 March 2021 | 2 000 Exercise options under SOP 2015-2017 | Employees | 26.375 | |
| 17 March 2021 | 2 650 Exercise options under SOP 2015-2017 | Employees | 26.375 | |
| 18 March 2021 | 2 000 Exercise options under SOP 2015-2017 | Employees | 26.375 | |
| 18 March 2021 | 668 Exercise options under SOP 2010-2014 | Employees | 19.200 | |
| 18 March 2021 | 2 400 Exercise options under SOP 2010-2014 | Employees | 25.380 | |
| 18 March 2021 | 17 100 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 19 March 2021 | 1 100 Exercise options under SOP 2010-2014 | Employees | 26.055 | |
| 22 March 2021 | 2 100 Exercise options under SOP 2010-2014 | Employees | 25.140 | |
| 22 March 2021 | 1 890 Exercise options under SOP 2010-2014 | Employees | 19.200 | |
| 24 March 2021 | 3 500 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 24 March 2021 | 6 000 Exercise options under SOP 2010-2014 | Employees | 26.055 |
|---|---|---|---|
| 26 March 2021 | 6 250 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 31 March 2021 | 4 000 Exercise options under SOP 2010-2014 | Employees | 19.200 |
| 31 March 2021 | 14 000 Exercise options under SOP 2010-2014 | Employees | 25.380 |
| 31 March 2021 | 1 000 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 31 March 2021 | 2 100 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 31 March 2021 | 600 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 31 March 2021 | 9 112 Personal shareholding requirement | BGE members | 35.780 |
| 1 April 2021 | 2 100 Exercise options under SOP 2010-2014 | Employees | 19.200 |
| 6 April 2021 | 7 000 Exercise options under SOP 2010-2014 | Employees | 21.450 |
| 6 April 2021 | 21 500 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 6 April 2021 | 10 000 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 7 April 2021 | 14 100 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 7 April 2021 | 9 000 Exercise options under SOP 2010-2014 | Employees | 25.380 |
| 7 April 2021 | 15 000 Exercise options under SOP 2010-2014 | Employees | 21.450 |
| 7 April 2021 | 7 033 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 8 April 2021 | 5 717 Exercise options under SOP 2015-2017 | Employees | 26.376 |
| 9 April 2021 | 1 800 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 12 April 2021 | 1 500 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 12 May 2021 | 1 055 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 12 May 2021 | 17 500 Exercise options under SOP 2010-2014 | Employees | 21.450 |
| 13 May 2021 | 445 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 13 May 2021 | 2 000 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 17 May 2021 | 5 000 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 18 May 2021 | 9 000 Exercise options under SOP 2010-2014 | Employees | 25.380 |
| 25 May 2021 | 2 500 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 25 May 2021 | 4 000 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 27 May 2021 | 40 000 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 27 May 2021 | 333 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 28 May 2021 | 9 667 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 28 May 2021 | 4 000 Exercise options under SOP2 | Employees | 30.175 |
| 31 May 2021 | 6 000 Exercise options under SOP2 | Employees | 30.175 |
| 31 May 2021 | 10 940 Remuneration non-executive Directors | Chairman and other non-executive Directors | — |
| 1 June 2021 | 700 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 4 June 2021 | 6 000 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 7 June 2021 | 1 500 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 7 June 2021 | 500 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 9 June 2021 | 500 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 10 June 2021 | 2 400 Exercise options under SOP 2010-2014 | Employees | 25.380 |
| 23 June 2021 | 100 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 24 June 2021 | 3 500 Exercise options under SOP 2010-2014 | Employees | 21.450 |
|---|---|---|---|
| 28 June 2021 | 2 100 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 30 July 2021 | 8 000 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 30 July 2021 | 2 400 Exercise options under SOP 2010-2014 | Employees | 25.380 |
| 30 July 2021 | 6 500 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 30 July 2021 | 6 000 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 3 August 2021 | 6 500 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 4 August 2021 | 2 500 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 4 August 2021 | 12 500 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 5 August 2021 | 750 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 6 August 2021 | 2 400 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 9 August 2021 | 2 400 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 11 August 2021 | 1 500 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 12 August 2021 | 2 500 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 13 August 2021 | 10 000 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 16 August 2021 | 144 Exercise options under SOP 2015-2017 | Employees | 39.426 |
| 16 August 2021 | 10 000 Exercise options under SOP2 | Employees | 28.335 |
| 17 August 2021 | 7 500 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 17 August 2021 | 9 320 Exercise options under SOP2 | Employees | 28.335 |
| 19 August 2021 | 4 000 Exercise options under SOP 2010-2014 | Employees | 21.450 |
| 15 September 2021 | 6 000 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 1 October 2021 | 2 100 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 19 November 2021 | 10 000 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 19 November 2021 | 6 250 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 7 December 2021 | 400 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 8 December 2021 | 1 125 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 13 December 2021 | 3 000 Exercise options under SOP 2010-2014 | Employees | 21.450 |
| 14 December 2021 | 1 500 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 16 December 2021 | 1 500 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 17 December 2021 | 7 700 Exercise options under SOP 2010-2014 | Employees | 25.140 |
| 17 December 2021 | 1 800 Exercise options under SOP 2010-2014 | Employees | 19.200 |
| 17 December 2021 | 2 400 Exercise options under SOP 2010-2014 | Employees | 25.380 |
| 24 December 2021 | 300 Exercise options under SOP 2010-2014 | Employees | 21.450 |
| 24 December 2021 | 2 000 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 27 December 2021 | 10 000 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 28 December 2021 | 1 800 Exercise options under SOP 2010-2014 | Employees | 26.055 |
| 28 December 2021 | 2 400 Exercise options under SOP 2010-2014 | Employees | 25.380 |
| 28 December 2021 | 2 000 Exercise options under SOP 2015-2017 | Employees | 26.375 |
| 28 December 2021 | 1 125 Exercise options under SOP 2015-2017 | Employees | 34.600 |
| 30 December 2021 | 5 000 Exercise options under SOP 2015-2017 | Employees | 34.600 |
A fi rst grant of 144 708 equity settled performance share units under the Performance Share Plan 2018-2020 was made on 15 January 2021. In addition, a mid-year grant of 23 066 performance share units in aggregate was made on 19 August and 9 September 2021 under the Performance Share Plan 2018-2020 . Each performance share unit entitles the benefi ciary to acquire one performance share subject to the conditions of the Performance Share Plan 2018-2020.
These performance share units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. 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 defi ned 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 if the actual performance is at or above an agreed ceiling level.
Detailed information about capital, shares, stock option plans and performance share plans is given in the Financial Statements ( Note 6.13 to the consolidated fi nancial statements ).
The Board of Directors will propose that the Annual General Meeting to be held on 11 May 2022 approve the distribution of a gross dividend of € 1.50 per share.
The Board of Directors reconfi rms the Dividend Policy which foresees, insofar as the profi t permits, a stable or growing dividend while maintaining an adequate level of cash fl ow in the Company for investment and self-fi nancing 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.
Post balance sheet, on 25 February 2022, Bekaert announced that the Board approved a share buyback program of an amount up to € 120 million, to be initiated in March 2022. Under the program, Bekaert may repurchase outstanding shares for a maximum consideration up to € 120 million, over a period up to twelve months. The purpose of the program is to reduce the issued share capital of the company. All shares repurchased as part of this arrangement will be cancelled. The program will be conducted under the terms and conditions approved by Bekaert's Extraordinary General Meeting of 13 May 2020. Bekaert will appoint an investment services provider to execute the repurchases of shares in the open market during open and closed periods.
Bekaert's reference shareholder, Stichting Administratiekantoor Bekaert (STAK) and the parties acting in concert with the STAK, have informed the company that they commit to take appropriate measures to ensure that their voting rights in Bekaert's share capital will not exceed the current level (i.e. 36.13%) by the end of the implementation of the program.
| in € | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|---|---|---|
| Total gross dividend | 0.850 | 0.900 | 1.100 | 1.100 | 0.700 | 0.350 | 1.000 | 1.500 |
| Net dividend² | 0.638 | 0.657 | 0.770 | 0.770 | 0.490 | 0.245 | 0.700 | 1.050 |
| Coupon number | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 |
¹ The dividend is subject to approval by the General Meeting of Shareholders 2022.
The Annual General Meeting was held on 12 May 2021. It was organized as a virtual meeting in line with Covid-19 protection measures and gave the opportunity to vote online in real-time during the meeting.
An Extraordinary General Meeting was held on 15 July 2021. The meeting did not approve the introduction of double voting right. As a result, the one share-one vote principle continues to apply to all shareholders. The other proposed changes to the Articles of Association were approved. The resolutions of the meetings are available at www.bekaert.com.
Bekaert is committed to providing transparent fi nancial information to all shareholders.
All shareholders can count on access to information and on our commitment to share relevant updates on market evolutions, performance progress and other relevant information. All such updates can be found online in the investors section of the website of the Company and are presented in meetings with analysts, shareholders, and investors. The calendar of investor relations conferences, roadshows and group visits to our premises is published on our website.
Bekaert organized a Capital Markets Day on 28 May 2021. The Chairman of the Board of Directors and the CEO, CFO and CSO gave insights on the new Bekaert strategy and the upwards revised mid-term guidance for the Company. The recorded webcast is available online in the Investors section of www.bekaert.com.
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.
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.
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.
The Articles of Association and the Bekaert Corporate Governance Charter contain specifi c 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 offi ce 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 defi nitive 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 indefi nite 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.
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 qualifi ed 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).
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 fi ve 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 notifi cation 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 certifi cates 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 certifi cates relating thereto in compliance with the applicable conditions prescribed by law, without the total number of own shares or certifi cates 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 fi ve 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 certifi cates 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 aff ect the possibilities, pursuant to the applicable legal provisions, for the Board of Directors to acquire or accept in pledge own shares and certifi cates 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 certifi cates relating thereto.
The Company may transfer its own shares, profi t-sharing bonds or certifi cates 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, profi t-sharing bonds or certifi cates relating thereto to one or more specifi ed 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, profi t-sharing bonds or certifi cates 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 aff ect the possibilities, pursuant to the applicable legal provisions, for the Board of Directors to transfer own shares, profi tsharing bonds and certifi cates 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.
Bekaert Annual Report 2021 88
The Company is a party to several signifi cant agreements that take eff ect, 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 signifi cantly aff ect the assets of the Company or that give rise to a signifi cant 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 fi led 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 fi nancial 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 fi nancial 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.
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 eff ectiveness of the internal control and risk management systems, with a view to ensuring that the main risks are properly identifi ed, 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.
The accounting and control organization consists of three levels: (i) the accounting team in the diff erent legal entities or shared service centers, responsible for the preparation and reporting of the fi nancial information, (ii) the controllers at the diff erent levels in the organization (such as plant and region), responsible inter alia for the review of the fi nancial information in their area of responsibility, and (iii) the Group Finance Department, responsible for the fi nal review of the fi nancial information of the diff erent legal entities and for the preparation of the consolidated fi nancial statements.
In December 2021, the new Finance Operating Model has been announced. Under this new model (i) the shared service centers are incorporated in an overarching Global Business Services (GBS), aiming at bringing their performance to the next level, (ii) a Financial Controller profi le has been introduced, responsible inter alia for legal entity fi nancial statements and (iii) roles and responsibilities of plant controllers have been split and focused into (a) Operations Finance, who's primary focus is on operating cost, inventory, asset utilization and all domains of Manufacturing Excellence, (b) Commercial Finance, who focuses on revenue and gross margin with related analysis of pricing and sales force eff ectiveness and (c) fi nancial Planning and Analysis (FP&A) who focuses on business results, forward looking budgets and forecasts. The implementation of the new model will be done in 2022.
Next to the structured controls outlined above, the Internal Audit Department conducts a risk-based audit program to validate the internal control eff ectiveness in the diff erent processes at legal entity level to assure a reliable fi nancial reporting.
Bekaert's consolidated fi nancial statements are prepared in accordance with the International Financial Reporting Standards (IFRS), which have been endorsed by the European Union. These fi nancial 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 fi nancial reporting. Such manual is regularly updated by Group Finance in the case of relevant changes in IFRS, or interpretations thereof, and the users are informed of any such changes. IFRS trainings take place in the diff erent 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 fi nancial 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.
Appropriate measures are taken to assure a timely and qualitative reporting and to reduce the potential risks related to the fi nancial 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.
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 confl icts in the ERP system is carried out.
Bekaert has deployed in most of the Group companies a global ERP system platform to support the effi cient 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 effi cient and timely communication process of periodic fi nancial information to the market. In the fi rst and third quarters, a trading update is released, whereas at mid-year and year-end all relevant fi nancial information is disclosed. Prior to the external reporting, the sales and fi nancial 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.
Any signifi cant 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 fi nancial information is presented to the Audit, Risk and Finance Committee and the Board of Directors to enable them to analyze the fi nancial statements. All related press releases are approved prior to communication to the market.
Relevant fi ndings 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.
The Board of Directors has approved the Bekaert Code of Conduct, which was fi rst issued on 1 December 2004 and last updated in October 2020. 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 diff erent tools in place to constantly monitor the eff ectiveness and effi ciency 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 fi nancial 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 identifi cation, 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 identifi ed in seven risk categories: strategic, people/organization, operational, legal/compliance, fi nancial, corporate and geopolitical/country risks. The identifi ed risks are classifi ed on two axes: probability and impact or consequence.
Decisions are made and action plans defi ned to mitigate the identifi ed risks. Also, the risk sensitivity evolution (decrease, increase, stable) is evaluated.
Below are the main risks included in Bekaert's 2021 ERM report, as reported to the Audit, Risk and Finance Committee and the Board of Directors.
Note: this 2021 ERM report, risk evaluation and risk matrix do not include the increased risks that are arising post-balance sheet date as a result of the situation in Ukraine. Those increased risks include a potential impact on demand changes, supply chain disruptions, credit risks and other. Bekaert has put a task force in place to monitor the situation on a daily basis in order to assess and mitigate the potential impact on the company.
| Risk defi nition | Mitigating actions | Trend | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Strategic risks | Bekaert is exposed to risks arising from demand impacts from economic crises | ||||||||||
| Impactful demand changes can aff ect sectors that are relevant to Bekaert, such as tire markets, energy and utility markets, and the mining, construction & infrastructure sectors. |
|||||||||||
| A crisis or recession can lead to a signifi cant demand decline driven by weak consumer confi dence and postponed investments. The resulting upstream and downstream overcapacity can lead to price erosion across the supply chain. As an example, the Covid-pandemic and the global shortage of microchips have recently aff ected demand in OEM and other sectors. The price level of oil and minerals has an impact on the investment level of extraction activities and create an upside or downside demand eff ect for products and services off ered by Bekaert in oil and mining markets. Bekaert is exposed to risks arising potential technology shifts Impactful technology changes can aff ect sectors that are relevant to Bekaert, such as tire markets, energy and utility markets, and the mining, construction & infrastruc ture sectors. The drive for sustainable energy sources and eco-friendly materials may aff ect the perspectives of oil & gas and mining industries in the future. |
Strategically, Bekaert's presence in diff erent sectors and geographies makes the company more resilient to country or sector-specifi c trends. The new strategy of Bekaert considers the opportunities and challenges arising from the megatrends. Bekaert's innovation drive is a competitive advantage in proactively developing solu tions for the current and future market needs. The company's eff orts in research and innovation address the anticipated technology shifts toward more sustainable solutions. This includes, among others, products and services that off er solutions for new mobility, renewable energy, low-carbon construc tion materials, and lightweight and recyclable materials in general. |
||||||||||
| 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. |
Bekaert has implemented a rigorous capital allocation framework with detailed criteria and close governance, bringing a quality line of defense measures in the preparation, execution, and monitoring discipline of growth projects. |
||||||||||
| 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 merg ing businesses that are not a strategic fi t with Bekaert. The assumptions used for organic and inorganic business cases (market conditions, competitor moves, ) may change and aff ect the return on the investments made. Major investments with a delay in generating the anticipated returns may aff ect the cash position and funding cost of the company. |
The risk trend for organic investments is decreasing. The risk trend for inorganic investments may increase according to the size of the M&A targets considered but has not materialized in 2021. |
||||||||||
| People / | Bekaert is exposed to certain labor market risks | ||||||||||
| Organization | A competitive labor market can lead to shortages of specifi c talent capabilities, especially in markets where the talent pool is scarce and where our offi ces and/or factories are in remote places. This could drive cost infl ation or aff ect 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 compen sation & benefi ts 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. |
| Risk defi nition | Mitigating actions | Trend | |
|---|---|---|---|
| Operational | Source dependency might impact Bekaert's business activities and profi tability | ||
| risks | Bekaert is subject to the risks from continuous changes in trade policy worldwide, and by trade tensions between specifi c countries and regions. |
Bekaert's global presence reduces the risk of source dependency and a lack of alter natives to continue its business activities, should one source fail to deliver or become too expensive. |
|
| Bekaert is also subject to disruptions in supply chains due to shortages of raw mate rials and of logistics services. Increased source dependency might have an impact on Bekaert's business continuity in certain locations and on profi tability, due to increased costs and duties. |
Bekaert's pro-active supplier risk management approach reduces the probability and impact of the risk. |
||
| As part of the Group's focus on pricing discipline, passing on cost infl ation through selling prices is a priority area to safeguard the profi tability. |
|||
| 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, responsi ble use of water and worldwide ISO14001 certifi cation. Bekaert's global procedure to ensure precautionary measures against soil and ground water contamination (ProSoil) is continuously monitored in relation to regulations, ISO certifi cation, best practices and actual implementation. |
||
| 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 offi ce work has expanded the num ber of end-point devices and connection channels. A cyber-attack aff ecting critical IT- systems could interrupt Bekaert's business continuity and aff ect profi tability. It may also lead to risks associated with data privacy and confi dentiality. |
Bekaert is implementing 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. |
||
| Legal / | Bekaert is exposed to regulatory and compliance risks | ||
| 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 require ments (such as the European General Data Protection Regulation and California Con sumer Privacy Act), intellectual property laws, labor relation laws, tax laws, anti-com petition regulations, import and trade restrictions (for example the trade policies in the |
Bekaert steers compliance with laws and regulations through a Compliance Commit tee that monitors and manages the actions that are needed to ensure compliance. 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 regularly organizes trainings on anti-bribery, anti-trust, safety and other |
|
| 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 profi t 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 fi nes, criminal sanc tions, cessation of business activities, and a reputation risk. |
legal awareness matters. | ||
| 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 | At year-end 2021, Bekaert had approximately 1 900 patents and patent rights in port |
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 aff ect our business position.
folio. Bekaert also initiates patent infringement proceedings against competitors when such cases are observed or reported.
| Risk defi nition | Mitigating actions | Trend | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Financial risks | Bekaert is exposed to a currency exchange risk which could impact its results and fi nancial position | |||||||||||
| Bekaert's assets, income, earnings and cash fl ows are infl uenced 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 fi nancial 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, fi nancing, sales and operating activities. |
Bekaert has a hedging policy in place to limit the impact of currency exchange risks. | |||||||||||
| 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 profi les of the customers and the markets to which they belong, this policy cannot fully exclude the credit risk. This risk may lead impact the cash position and the profi tability of the Group. Bekaert has a credit insurance policy in place to limit such risks. |
Bekaert has risk transfer solutions in place to limit such risks. The group has also strengthened its credit procedures and actions at the onset of the Covid-19-pandemic, which increased the liquidity risk in many markets and of certain customers. |
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| Bekaert has not been confronted in the past years with increased bad debt provisions or customer bankruptcies leading to write-off s of bad debts. |
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| Bekaert is exposed to certain country risks with political and economic instability | ||||||||||||
| In Venezuela, Bekaert's activities have been aff ected in the past years due to shortages of raw material, power supply, and the extreme devaluation of the currency. Despite the political and monetary instability, Bekaert maintains ownership control and keeps the company operational. The risk of outstanding cumulative translation adjustments is disclosed in the detailed Financial Statements under 'critical accounting adjustments'. |
All assets on Venezuelan soil have been impaired since 2010 to minimize the outstand ing risk. |
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| 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 fi nancial state ments 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 fl ows in dividually (i.e., Cash Generating Units (CGUs)) and more specifi cally CGUs to which goodwill is allocated. The company has not identifi ed additional risks in the fi scal year 2021. |
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| 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 continu ously looking for new and alternative insurance solutions to reduce the impact. |
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| 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 infl uence the profi t margins of Bekaert. Also, the opposite price trend entails profi t risks: if raw materials prices drop signifi cantly and Bekaert has higher priced material in stock, then the profi tability may be hit by (non-cash) inventory valuation corrections at the balance sheet date of a reporting period. |
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. |
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| Energy price volatility may also negatively infl uence the profi t margins, if Bekaert is unsuccessful in passing on cost increases to customers in due time. |
| Risk defi nition | Mitigating actions | Trend | |
|---|---|---|---|
| Financial risks | 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 diff erent tax laws in many countries. Bekaert seeks to structure its operations in a tax-effi cient 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 aff ect the eff ective tax rate, results of operations and fi nancial position. |
Although supported by tax consultants and specialists, Bekaert cannot guarantee that changes in tax laws, varying interpretations and inconsistent enforcement, adversely aff ect Bekaert's eff ective tax rate, results of operations and fi nancial condition. It is Bekaert's practice to recognize provisions (per entity) for potential tax liabilities. |
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| 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. |
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| Geopolitical / | Bekaert faces asset and profi t concentration risks | ||
| Country risks | While Bekaert is a truly global company with a global network of manufacturing plat forms and sales and distribution offi ces, reducing the asset and profi t concentration to a minimum, it still faces a risk of asset and profi t concentration in certain locations (such as Jiangyin, China). In case major a political, social, or asset damage incident would occur, then the risk of asset and profi t concentration could materialize. |
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. |
|
| Pandemic Risk | |||
| The Covid-19 pandemic impact depends on a broad range of factors, including the duration and scope of the pandemic, the geographies impacted, the social impact, the impact on economic activity, and the nature and severity of measures adopted by gov ernments to restrict the further spread of the virus, including restrictions on business operations and travel, restrictions on large gatherings and orders to self-isolate. |
Bekaert implemented in 2020 a crisis management plan and governance model to manage the Covid-19 pandemic crisis with a focus on safeguarding the health & safety of our employees, protecting our customers and our business, ensuring fi nancial strength, identifying and pursuing opportunities arising from the crisis and enabling the organization to deal with ambiguity. In 2021 actions from crisis were reinforced in standing function and business governance. |
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| Risk of physical damage, business interruption and/or supply chain disruption | |||
| Damage caused by climate change impact (heavy rains/fl ooding, drought/water short ages, high ambient temperatures, bush fi res, extreme storms/wind damage) may aff ect the continuity of Bekaert's activities in aff ected locations. |
Bekaert is assessing the possible impact of climate change and implementing adapta tion measures such as adequate water run-off and/or collection, fl ood defenses, provi sion of adequate fi refi ghting facilities, water usage minimization programs & employee working condition provisions in the event of high temperatures in the summer months |
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| Corporate | Underperformance on sustainability targets | ||
| Underperformance on sustainability targets can also cause reputational damage and aff ect Bekaert's position as a preferred partner to customers and investors |
Bekaert has established a new sustainability strategy that will step up our sustainabili ty 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. |
An eff ective internal control and ERM framework is necessary to reach a reasonable level of assurance related to Bekaert's fi nancial reports and to prevent fraud. Internal control on fi nancial 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 eff ective internal control only generates reasonable assurance for the preparation and the fair presentation of the fi nancial information. Failure to pick up an error due to human errors, misleading or circumventing controls, or fraud could negatively impact Bekaert's reputation and fi nancial results. This may also result in Bekaert failing to comply with its ongoing disclosure obligations.
| in thousands of € - Year ended 31 December | Notes | 2020 | 2021 |
|---|---|---|---|
| Sales | 5.1 | 3 772 374 | 4 839 659 |
| Cost of sales | 5.2 | -3 214 056 | -3 953 752 |
| Gross profi t | 5.2 | 558 318 | 885 907 |
| Selling expenses | 5.2 | -167 141 | -186 239 |
| Administrative expenses | 5.2 | -133 526 | -161 091 |
| Research and development expenses | 5.2 | -52 361 | -59 537 |
| Other operating revenues | 5.2 | 84 659 | 62 940 |
| Other operating expenses | 5.2 | -33 422 | -28 894 |
| Operating result (EBIT) | 5.2 | 256 527 | 513 086 |
| of which | |||
| EBIT - Underlying | 5.2 / 5.3 | 272 244 | 514 617 |
| One-o items | 5.2 | -15 717 | -1 531 |
| Interest income | 5.4 | 3 386 | 3 260 |
| Interest expense | 5.4 | -59 554 | -44 480 |
| Other fi nancial income and expenses | 5.5 | -30 165 | 4 430 |
| Result before taxes | 170 194 | 476 296 | |
| Income taxes | 5.6 | -56 513 | -133 296 |
| Result after taxes (consolidated companies) | 113 682 | 343 000 | |
| Share in the results of joint ventures and associates | 5.7 | 34 355 | 107 619 |
| RESULT FOR THE PERIOD | 148 037 | 450 620 | |
| Attributable to | |||
| equity holders of Bekaert | 134 687 | 406 977 | |
| non-controlling interests | 6.15 | 13 350 | 43 643 |
| Earnings per share | |||
| in € per share | 5.8 | 2020 | 2021 |
| Result for the period attributable to equity holders of Bekaert | |||
| Basic | 2.382 | 7.140 | |
| Diluted | 2.266 | 7.063 |
The accompanying notes are an integral part of this income statement.
| in thousands of € - Year ended 31 December | Notes | 2020 | 2021 |
|---|---|---|---|
| Result for the period | 148 037 | 450 620 | |
| Other comprehensive income (OCI) | 6.14 | ||
| Other comprehensive income reclassifi able to income statement in subsequent periods | |||
| Exchange diff erences | |||
| Exchange diff erences arising during the year on subsidiaries | -80 879 | 89 514 | |
| Exchange diff erences arising during the year on joint ventures and associates | -38 134 | 1 647 | |
| Reclassifi cation adjustments relating to entity disposals or step acquisitions | — | -2 987 | |
| OCI reclassifi able to income statement in subsequent periods, after tax | -119 013 | 88 173 | |
| Other comprehensive income non-reclassifi able to income statement in subsequent periods | |||
| Remeasurement gains and losses on defi ned-benefi t plans | 2 497 | 47 351 | |
| Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | 250 | 5 882 | |
| Share of non-reclassifi able OCI of joint ventures and associates | 4 | 3 | |
| Deferred taxes relating to non-reclassifi able OCI | 6.7 | -1 024 | -3 500 |
| OCI non-reclassifi able to income statement in subsequent periods, after tax | 1 727 | 49 736 | |
| Other comprehensive income for the period | -117 286 | 137 909 | |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 30 751 | 588 529 | |
| Attributable to | |||
| equity holders of Bekaert | 23 233 | 545 660 | |
| non-controlling interests | 6.15 | 7 518 | 42 869 |
The accompanying notes are an integral part of this statement of comprehensive income.
| in thousands of € | Notes | 2020 | 2021 |
|---|---|---|---|
| Intangible assets | 6.1 | 54 664 | 61 440 |
| Goodwill | 6.2 | 149 398 | 150 674 |
| Property, plant and equipment | 6.3 | 1 191 781 | 1 253 857 |
| RoU Property, plant and equipment | 6.4 | 132 607 | 132 073 |
| Investments in joint ventures and associates | 6.5 | 123 981 | 188 661 |
| Other non-current assets | 6.6 | 45 830 | 65 886 |
| Deferred tax assets | 6.7 | 124 243 | 119 599 |
| Non-current assets | 1 822 503 | 1 972 189 | |
| Inventories | 6.8 | 683 477 | 1 121 219 |
| Bills of exchange received | 6.8 | 54 039 | 41 274 |
| Trade receivables | 6.8 | 587 619 | 750 666 |
| Other receivables | 6.9 / 6.21 | 101 330 | 157 005 |
| Short-term deposits | 6.10 | 50 077 | 80 058 |
| Cash and cash equivalents | 6.10 | 940 416 | 677 270 |
| Other current assets | 6.11 | 41 898 | 42 272 |
| Assets classifi ed as held for sale | 6.12 | 6 740 | 1 803 |
| Current assets | 2 465 597 | 2 871 567 | |
| Total | 4 288 100 | 4 843 756 |
| in thousands of € | Notes | 2020 | 2021 |
|---|---|---|---|
| Share capital | 6.13 | 177 812 | 177 923 |
| Share premium | 37 884 | 38 850 | |
| Retained earnings | 6.14 | 1 614 781 | 1 984 791 |
| Treasury shares | 6.14 | -106 148 | -95 517 |
| Other Group reserves | 6.14 | -276 448 | -136 495 |
| Equity attributable to equity holders of Bekaert | 1 447 880 | 1 969 551 | |
| Non-controlling interests | 6.15 | 87 175 | 130 971 |
| Equity | 1 535 055 | 2 100 522 | |
| Employee benefi t obligations | 6.16 | 130 948 | 77 659 |
| Provisions | 6.17 | 25 166 | 23 311 |
| Interest-bearing debt | 6.18 | 968 076 | 953 581 |
| Other non-current liabilities | 6.19 | 1 231 | 844 |
| Deferred tax liabilities | 6.7 | 38 337 | 51 979 |
| Non-current liabilities | 1 163 759 | 1 107 375 | |
| Interest-bearing debt | 6.18 | 641 655 | 237 742 |
| Trade payables | 6.8 | 668 422 | 1 062 185 |
| Employee benefi t obligations | 6.8 / 6.16 | 149 793 | 177 159 |
| Provisions | 6.17 | 11 421 | 4 392 |
| Income taxes payable | 6.21 | 53 543 | 86 131 |
| Other current liabilities | 6.20 | 64 451 | 68 249 |
| Liabilities associated with assets classifi ed as held for sale | 6.12 | — | — |
| Current liabilities | 1 589 286 | 1 635 859 | |
| Total | 4 288 100 | 4 843 756 |
The accompanying notes are an integral part of this balance sheet.
| Attributable to equity holders of Bekaert ¹ | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of € | Share capital |
Share premium |
Retained earnings |
Treasury shares |
Cumulative translation adjustments |
Reva-luation reserve for non-consoli dated equity investments |
Remea surement reserve for DB plans |
Deferred tax reserve |
Total | Non controlling |
interests ² Total equity |
| Balance as at 1 January 2020 | 177 793 | 37 751 | 1 492 022 | -107 463 | -113 964 | -12 117 | -67 016 | 28 104 | 1 435 110 | 96 430 | 1 531 540 |
| Result for the period | — | — | 134 687 | — | — | — | — | — | 134 687 | 13 350 | 148 037 |
| Other comprehensive income | — | — | — | — | -113 858 | 250 | 3 473 | -1 319 | -111 454 | -5 832 | -117 286 |
| Eff ect of NCI purchase ³ | — | — | -467 | — | — | — | — | — | -467 | -8 503 | -8 970 |
| Equity-settled share-based payment plans | — | — | 8 556 | — | — | — | — | — | 8 556 | — | 8 556 |
| Creation of new shares | 19 | 133 | — | — | — | — | — | — | 152 | — | 152 |
| Treasury shares transactions | — | — | -231 | 1 314 | — | — | — | — | 1 083 | — | 1 083 |
| Dividends | — | — | -19 787 | — | — | — | — | — | -19 787 | -8 270 | -28 057 |
| Balance as at 31 December 2020 | 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 |
¹ See note 6.14. 'Retained earnings and other Group reserves'.
² See note 6.15. ' Non-controlling interests '.
³ In February 2020, the buy-out of Continental in Bekaert Slatina SRL through the acquisition of Conti's 20 % shareholding was closed. A consideration of € 9.0 million was paid .
| Attributable to equity holders of Bekaert ¹ | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of € | Share capital |
Share premium |
Retained earnings |
Treasury shares |
Cumulative translation adjustments |
Reva-luation reserve for non-consoli dated equity investments |
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 | — | — | 406 977 | — | — | — | — | — | 406 977 | 43 643 | 450 620 |
| Other comprehensive income | — | — | — | — | 89 370 | 5 882 | 46 753 | -3 321 | 138 683 | -774 | 137 909 |
| Capital contribution by non-controlling interests | — | — | — | — | — | — | — | — | — | 3 975 | 3 975 |
| Eff ect of other changes in Group structure ⁴ | — | — | -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 | 1 984 791 | -95 517 | -137 183 | -5 986 | -16 790 | 23 464 | 1 969 551 | 130 971 | 2 100 522 |
¹ See note 6.14. 'Retained earnings and other Group reserves'.
² See note 6.15. 'Non-controlling interests'.
⁴ 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 %.
| in thousands of € - Year ended 31 December | Notes | 2020 | 2021 |
|---|---|---|---|
| Operating activities | |||
| Operating result (EBIT) | 5.2 / 5.3 | 256 527 | 513 086 |
| Non-cash items included in operating result | 7.1 | 270 417 | 190 222 |
| Investing items included in operating result | 7.1 | -38 626 | -23 234 |
| Amounts used on provisions and employee benefi t obligations | 7.1 | -50 756 | -50 340 |
| Income taxes paid | 5.6 / 7.1 | -56 504 | -92 737 |
| Gross cash fl ows from operating activities | 381 059 | 536 997 | |
| Change in operating working capital | 6.8 | 124 419 | -119 773 |
| Other operating cash fl ows | 7.1 | -556 | -32 620 |
| Cash fl ows from operating activities | 504 921 | 384 604 | |
| Investing activities | |||
| New business combinations | 7.2 | -978 | — |
| Other portfolio investments | 7.1 | — | -863 |
| Proceeds from disposals of investments | — | -66 | |
| Dividends received | 6.5 | 25 324 | 24 858 |
| Purchase of intangible assets | 6.1 | -3 214 | -12 852 |
| Purchase of property, plant and equipment | 6.3 | -104 477 | -143 753 |
| Proceeds from disposals of fi xed assets | 7.1 | 52 136 | 36 752 |
| Cash fl ows from investing activities | -31 209 | -95 924 | |
| Financing activities | |||
| Interest received | 5.4 | 3 076 | 3 474 |
| Interest paid | 5.4 | -42 864 | -35 170 |
| Gross dividend paid to shareholders of NV Bekaert SA | -19 787 | -56 795 | |
| Gross dividend paid to non-controlling interests | -5 953 | -6 761 | |
| Proceeds from long-term interest-bearing debt | 6.18 | 201 309 | 23 649 |
| Repayment of long-term interest-bearing debt | 6.18 | -247 673 | -439 823 |
| Cash fl ows from / to (-) short-term interest-bearing debt | 6.18 | 41 358 | -43 328 |
| Treasury shares transactions | 6.13 | 1 084 | 17 419 |
| Sales and purchases of NCI | 7.1 | -8 970 | — |
| Other fi nancing cash fl ows | 7.1 | -4 319 | -29 747 |
| Cash fl ows from fi nancing activities | -82 741 | -567 082 |
| Net increase or decrease (-) in cash and cash equivalents 390 972 |
-278 401 |
|---|---|
| Cash and cash equivalents at the beginning of the period 566 176 |
940 416 |
| Eff ect of exchange rate fl uctuations -16 731 |
15 255 |
| Cash and cash equivalents at the end of the period 940 416 |
677 270 |
The accompanying notes are an integral part of this cash fl ow statement.
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 fi nancial 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 fi nancial statements were authorized for issue by the Board of Directors of the Company on 18 March 2022.
The consolidated fi nancial statements have been prepared in accordance with and comply with the International Financial Reporting Standards (IFRS) which have been endorsed by the European Union .
In the current year, the Group has applied the below amendments to IFRS standards and Interpretations issued by the Board that are eff ective for an annual period that begins on or after 1 January 2021. Their adoption has not had any material impact on the disclosures or on the amounts reported in these fi nancial statements.
These amendments had no impact on the consolidated fi nancial statements of the Group.
The Group has not early adopted any other standards, interpretations or amendments that have been issued but are not yet eff ective. T hese new, and amendments to, standards and interpretations eff ective after 2021 are not e xpected to have a material impact on the fi nancial statements.
Bekaert Annual Report 2021 106
The Group will adopt these standards and interpretations, if applicable, when they come eff ective.
The consolidated fi nancial statements are presented in thousands of euro (unless otherwise stated) , under the historical cost convention, except for derivatives, fi nancial assets at Stock and fi nancial 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 fi nancial statements on the basis that it will continue to operate as a going concern.
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 aff ect these returns through its power over the entity. The fi nancial statements of subsidiaries are included in the consolidated fi nancial 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:
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 refl ect the changes in their relative
interests in the subsidiaries. Any diff erence between the amount by which the noncontrolling 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 profi t or loss on disposal is calculated as the diff erence between:
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.
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 signifi cant infl uence 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 fi nancial 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 signifi cant infl uence 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 profi t or loss. Subsequently, the consolidated fi nancial 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 signifi cant infl uence 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 diff erence 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 profi t or loss. Upon loss of signifi cant infl uence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any diff erence between the carrying amount of the associate or joint venture upon loss of signifi cant infl uence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profi t or loss.
The fi nancial 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.
Items included in the fi nancial 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 fi nancial 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:
Exchange diff erences 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 fi nancial 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 fl ow 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.
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 fi nancial 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 indefi nite useful lives. If the useful life of an intangible asset is deemed indefi nite, no amortization is recognized and the asset is reviewed at least annually for impairment.
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.
Generally, costs directly associated with the acquisition and implementation of acquired ERP software are recognized as intangible assets and amortized over fi ve years on a straight-line basis.
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.
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:
Expenditure on research activities undertaken with the prospect of gaining new scientifi c or technological knowledge and understanding is recognized in the income statement as an expense when it is incurred.
Expenditure on development activities where research fi ndings 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:
Capitalized development costs are amortized from the commencement of commercial production of the product on a straight-line basis over the period during which benefi ts 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.
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 profi t or loss as incurred. The identifi able assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the diff erence between:
(i) the sum of the following elements:
(ii) the net of the acquisition-date amounts of the identifi able assets acquired and the liabilities assumed. If, after reassessment, this diff erence is negative ('negative goodwill'), it is recognized immediately in profi t 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 identifi able 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 profi t 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 profi t or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassifi ed to profi t or loss where such treatment would be appropriate if that interest was disposed of.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units that are expected to benefi t 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 fi rst 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.
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 signifi cant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specifi c 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 satisfi ed. All other repairs and maintenance costs are recognized in profi t 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 fi nancial year-end. Unless revised due to specifi c changes in the estimated economic useful life, annual depreciation rates are as follows:
An item of property, plant and equipment and any signifi cant part initially recognized is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefi ts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the diff erence 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 fi nancial year-end and adjusted prospectively, if appropriate.
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 (defi ned as leases with a lease term of 12 months or less) and leases of low value assets (such as printers, copiers and small offi ce 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 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 refl ects 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 fi nancial 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 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 fi nal approval. The grant is amortized over the depreciation period of the underlying assets .
The Group classifi es its fi nancial assets in the following categories: measured at amortized cost, at fair value through profi t or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). The classifi cation depends on the contractual characteristics of the fi nancial assets and the business model under which they are held. Management determines the classifi cation of its fi nancial assets at initial recognition.
Financial assets are classifi ed 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 fl ows until their maturity. The Group's fi nancial 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 eff ective interest method, less any impairment.
A fi nancial asset (or, where applicable, a part of a fi nancial asset or part of a group of similar fi nancial assets) is primarily derecognized (i.e., removed from the Group's consolidated statement of fi nancial position) when:
When the Group has transferred its rights to receive cash fl ows 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 asset and the associated liability are measured on a basis that refl ects 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.
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profi t 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 eff ective as hedges.
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 equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignifi cant 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.
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 refl ect changes in credit risk since initial recognition of the respective fi nancial instrument. When determining whether the credit risk of a fi nancial asset has increased signifi cantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or eff ort. 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 fi nancial 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 eff ective 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 are valued at the lower of cost and net realizable value. Cost is determined by the fi rst-in, fi rst-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.
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 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 noncontrolling 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 profi ts 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 defi cit balance.
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 outfl ow of resources embodying economic benefi ts 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.
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.
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.
The parent company and several of its subsidiaries have pension, death benefi t and health care benefi t plans covering a substantial part of their workforce.
Most pension plans are defi ned-benefi t plans with benefi ts based on years of service and level of remuneration. For defi ned-benefi t plans, the amount recognized in the balance sheet (net liability or asset) is the present value of the defi ned-benefi t obligation less the fair value of any plan assets. The present value of the defi nedbenefi t 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 defi ned-benefi t 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 highquality 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 defi ned-benefi t obligations, the net asset is limited to the asset ceiling. The asset ceiling is the present value of any economic benefi ts available in the form of refunds from the plan or reductions in future contributions to the plan. The net interest on the net defi ned-benefi t liability/asset is based on the same discount rate. Actuarial gains and losses comprise experience adjustments (the eff ects of diff erences between the previous actuarial assumptions and what has actually occurred) and the eff ects of changes in actuarial assumptions. Past service cost is the change in the present value of the defi ned-benefi t 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 profi t or loss. Remeasurements of the net defi ned-benefi t 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 defi ned-benefi t liability (asset) and (c) any change in the eff ect of the asset ceiling, after deduction of any amounts included in net interest on the net defi ned-benefi t 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 benefi ts provided under a defi ned-benefi t plan, other than a payment of benefi ts 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 defi ned-benefi t 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 defi ned-benefi t plans.
Obligations in respect of contributions to defi ned-contribution pension plans are recognized as an expense in the income statement as they fall due. By law, defi nedcontribution pension plans in Belgium are subject to minimum guaranteed rates of return. Before 2015, the defi ned-contribution plans in Belgium were basically accounted for as defi ned-contribution plans. New legislation dated December 2015 however triggered the qualifi cation. As a consequence, the defi ned-contribution plans are reported as defi ned-benefi t obligations, whereby as from year end 2016 an actuarial valuation was performed.
Other long-term employee benefi ts, such as service awards, are accounted for using the projected unit credit method. However, the accounting method diff ers from the method applied for post-employment benefi ts, as actuarial gains and losses are recognized immediately through profi t or loss.
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 eff ect 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 eff ect 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 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 eff ective interestmethod, any diff erence between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If fi nancial 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).
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:
The lease liability is subsequently measured by increasing the carrying amount to refl ect interest on the lease liability (using the eff ective interest method) and by reducing the carrying amount to refl ect 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 signifi cant 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.
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 are classifi ed as either current or deferred taxes. Current income taxes include expected tax charges based on the accounting profi t 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 outfl ow. However, Bekaert continues to believe that its positions on all these audits are robust.
Deferred taxes are calculated, using the liability method, on temporary diff erences 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 diff erences 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 profi t will be available against which the temporary diff erences 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 fi nancial statements and in other management reports. Deferred tax on temporary diff erences 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 diff erence and it is probable that the temporary diff erence will not be reversed in the foreseeable future.
The Group uses derivatives to hedge its exposure to foreign-exchange and interestrate risks arising from operating, fi nancing 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 fi nancial 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 fl ow 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 classifi ed 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 fi nancial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash fl ow hedges are hedges of the exposure to variability in future cash fl ows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized fi rm commitments. Changes in the fair value of a hedging instrument that qualifi es as a highly eff ective cash fl ow hedge are recognized directly in shareholders' equity (hedging reserve). The ineff ective portion is recognized immediately in the income statement. If the hedged cash fl ow results in the recognition of a non-fi nancial 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 fl ow hedges, gains and losses initially recognized in equity are transferred from the hedging reserve to the income statement when the hedged fi rm commitment or forecast transaction results in the recognition of a profi t 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 eff ective portion of the hedging instrument, together with any gains or losses on the foreigncurrency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineff ective 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 fi nancial instrument used as the hedging instrument and the hedged item and the estimated (prospective) eff ectiveness are documented by the Group at the inception of the hedge. The eff ectiveness 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 eff ective 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 fi nancial assets are treated as separate derivatives when they meet the defi nition 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 profi t or loss.
Goodwill and intangible assets with an indefi nite useful life or not yet available for use (if any) are reviewed for impairment at least annually; other tangible and intangible fi xed 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 fl ows 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.
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 refl ects the eff ective 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 usagebased royalties has been allocated has been satisfi ed. 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.
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 confi ned to owner-related changes only.
To analyze the fi nancial performance of the Group, Bekaert consistently uses various non-GAAP metrics or Alternative Performance Measures ('APMs') as defi ned in the European Securities and Markets Authority's ('ESMA') Guidelines on Alternative Performance Measures. In accordance with these ESMA Guidelines, the defi nition 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.
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 eff ect 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 eff ects.
One-off eff ects 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 eff ects 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 eff ect mainly include disasters and sales of investment property.
A non-current asset or disposal group is classifi ed 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 classifi ed 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 fi nancial 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 classifi cation. Assets classifi ed 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 classifi cation as held for sale. Comparative balance sheet information for prior periods is not restated to refl ect the new classifi cation in the balance sheet.
Contingent assets are not recognized in the fi nancial statements. They are disclosed if the infl ow of economic benefi ts is probable. Contingent liabilities are not recognized in the fi nancial statements, except if they arise from a business combination. They are disclosed, unless the possibility of a loss is remote.
Events after the balance sheet date which provide additional information about the Company's position as at the balance sheet date (adjusting events) are refl ected in the fi nancial statements. Events after the balance sheet date which are not adjusting events are disclosed in the notes if material.
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.
The following are the signifi cant judgements made by management, apart from those involving estimations (see note 3.2. 'Key sources of estimation uncertainty' below), that have a signifi cant eff ect on the amounts reported in the consolidated fi nancial statements.
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 fi nancial year.
Transforming steel wire and applying unique coating technologies form our core business. Depending on our customers' requirements, we draw wire in diff erent diameters and strengths, even as thin as ultrafi ne fi bers 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 fi nancial performance of the business as a whole, in line with the way fi nancial performance is reported to the chief operating decision maker (Bekaert Group Executive (BGE)). The Group's business units (BU) are characterized by BU-specifi c product and market profi les, industry trends, cost drivers, and technology needs tailored to specifi c 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:
Rubber Reinforcement (RR): 42% of consolidated third party sales (2020: 43%) 2. Steel Wire Solutions (SWS): 38% of consolidated third party sales (2020: 36%)
No segments have been aggregated.
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 refl ect 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.
| in thousands of € | Rubber Reinforcement |
Steel Wire Solutions |
Specialty Businesses |
BBRG | Group | Intersegment | Consolidated |
|---|---|---|---|---|---|---|---|
| Consolidated third party sales | 1 614 077 | 1 333 513 | 389 434 | 424 359 | 10 991 | — | 3 772 374 |
| Consolidated sales | 1 644 744 | 1 363 252 | 396 030 | 426 682 | 71 658 | -129 992 | 3 772 374 |
| Operating result (EBIT) | 136 126 | 87 921 | 36 244 | 23 805 | -33 772 | 6 203 | 256 527 |
| EBIT - Underlying | 144 305 | 96 093 | 45 285 | 33 763 | -53 585 | 6 384 | 272 244 |
| Depreciation and amortization ² | 102 706 | 49 433 | 16 469 | 30 757 | 13 145 | -10 407 | 202 103 |
| Impairment losses | 1 825 | 2 752 | 1 699 | 6 964 | 724 | — | 13 964 |
| EBITDA | 240 657 | 140 106 | 54 412 | 61 526 | -19 903 | -4 204 | 472 594 |
| Segment assets | 1 404 496 | 804 952 | 288 357 | 505 875 | -8 564 | -122 938 | 2 872 179 |
| Unallocated assets | 1 415 922 | ||||||
| Total assets | 4 288 100 | ||||||
| Segment liabilities | 310 268 | 307 519 | 71 377 | 82 838 | 84 133 | -46 917 | 809 219 |
| Unallocated liabilities | 1 943 826 | ||||||
| Total liabilities | 2 753 045 | ||||||
| Capital employed | 1 094 228 | 497 433 | 216 980 | 423 037 | -92 697 | -76 021 | 2 062 960 |
| Weighted average capital employed | 1 166 713 | 544 493 | 226 288 | 457 583 | -70 926 | -88 974 | 2 235 178 |
| Return on weighted average capital employed (ROCE) | 11.7% | 16.1% | 16.0% | 5.2% | — | — | 11.5% |
| Capital expenditure – PP&E | 37 425 | 20 596 | 29 183 | 16 452 | 848 | -4 510 | 99 993 |
| Capital expenditure – intangible assets | 460 | 141 | 14 | 443 | 2 435 | -279 | 3 214 |
| Share in the results of joint ventures and associates | 7 121 | 27 240 | — | — | -6 | — | 34 355 |
| Investments in joint ventures and associates | 43 287 | 80 674 | — | — | 19 | — | 123 981 |
| Number of employees (year-end)¹ | 12 540 | 6 028 | 1 373 | 2 320 | 1 578 | — | 23 839 |
| 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 |
¹ Number of employees: full-time equivalents.
² Depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables.
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 € | 2020 | % of total | 2021 | % of total |
|---|---|---|---|---|
| Consolidated third party sales | ||||
| from Belgium | 272 187 | 7% | 372 886 | 8% |
| from Chile | 348 906 | 9% | 537 994 | 11% |
| from China | 841 825 | 22% | 980 016 | 20% |
| from USA | 553 461 | 15% | 685 071 | 14% |
| from Slovakia | 320 459 | 8% | 419 273 | 9% |
| from other countries | 1 435 535 | 39% | 1 844 419 | 38% |
| Total third party consolidated sales | 3 772 374 | 100% | 4 839 659 | 100% |
| Selected non-current assets | ||||
| in Belgium | 120 396 | 7% | 122 469 | 7% |
| in Chile | 84 340 | 5% | 79 059 | 4% |
| in China | 300 702 | 18% | 315 190 | 18% |
| in USA | 118 356 | 7% | 151 264 | 8% |
| in Slovakia | 129 278 | 8% | 125 848 | 7% |
| in other countries | 899 358 | 55% | 992 874 | 56% |
| Total selected non-current assets | 1 652 429 | 100% | 1 786 704 | 100% |
Bekaert's top 5 customers together represented 21% (2020: 20%) of the Group's total consolidated sales, while the next top 5 customers represented another 8% (2020: 7%) of the Group's total consolidated sales. No individual customer contributed 10% to consolidated 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 € | 2020 | % of total | 2021 | % of total |
|---|---|---|---|---|
| Sales of products | 3 765 501 | 99.8% | 4 836 089 | 99.9% |
| Sales of machines by engineering | 6 519 | 0.2% | 3 449 | 0.1% |
| Other sales | 354 | 0.0% | 122 | 0.0% |
| Net sales | 3 772 374 | 100.0% | 4 839 659 | 100.0% |
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.
| in thousands of € | Rubber Reinforcement |
Steel Wire Solutions |
Specialty Businesses |
BBRG | Group | Consolidated |
|---|---|---|---|---|---|---|
| Industry | ||||||
| Tire & Automotive | 1 535 462 | 133 083 | 30 112 | 7 200 | — | 1 705 857 |
| Energy & Utilities | 85 | 183 525 | 22 118 | 78 296 | — | 284 024 |
| Construction | 7 | 378 062 | 293 574 | 60 367 | — | 732 010 |
| Consumer Goods | — | 99 798 | 3 754 | — | — | 103 552 |
| Agriculture | — | 261 174 | — | 38 126 | — | 299 300 |
| Equipment | 68 307 | 74 357 | 3 937 | 116 585 | 10 991 | 274 177 |
| Basic Materials | 10 215 | 203 513 | 35 940 | 123 785 | — | 373 453 |
| Total | 1 614 077 | 1 333 513 | 389 434 | 424 359 | 10 991 | 3 772 374 |
| 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 |
| in thousands of € | 2020 | 2021 | variance (%) |
|---|---|---|---|
| Sales | 3 772 374 | 4 839 659 | 28.3% |
| Cost of sales | -3 214 056 | -3 953 752 | 23.0% |
| Gross profi t | 558 318 | 885 907 | 58.7% |
| Gross profi t in % of sales | 14.8% | 18.3% |
Bekaert achieved consolidated sales of € 4.8 billion in 2021, well above last year (28.3%) due to the heavy impact of the Covid-19 pandemic in the fi rst half of 2020. The organic sales increase (28.4%) was driven by higher volumes (9.0%) and passed-on wire rod price (13.5%) and other price-mix eff ects for the full year (5.8%). The currency movements were -0.1% negative (mainly related to movements in US dollar, Czech koruna and Chinese renminbi).
The increase in sales positively impacted Gross profi t as the Group realized an increase of € 327.6 million in absolute terms (58.7%), resulting in a margin of 18.3% (2020: 14.8%). This was realized due to the strong volume growth, structural improvements with lasting eff ects on the business portfolio and performance of Bekaert, positive inventory revaluation impact driven by the price increases of raw materials and a small favorable impact from exchange rates (€ 1.3 million).
| Overheads | |||
|---|---|---|---|
| in thousands of € | 2020 | 2021 | variance (%) |
| Selling expenses | -167 141 | -186 239 | 11.4% |
| Administrative expenses | -133 526 | -161 091 | 20.6% |
| Research and development expenses | -52 361 | -59 537 | 13.7% |
| Total | -353 027 | -406 867 | 15.3% |
The overhead expenses increased by € 53.8 million to € 406.9 million (8.4% on sales). The increase in absolute value was mainly due to phasing out of Covid-19 mitigation actions amounting to € 38.1 million in 2020 (and which were no longer applicable in 2021), impact from performance boost on Short-Term Variable Pay and on valuation of Long-Term Share-Based Payment schemes and consultancy fees for specifi c projects. The one-off impact from the restructuring programs on overheads decreased by € 19.0 million and mainly related to lay-off costs and the impairment of assets. In 2021, selling expenses included bad debt allowances recognized for € -3.0 million (2020: € -5.4 million) and reversal of bad debt allowances for amounts used and not used for € 4.4 million (2020: € 4.9 million).
| in thousands of € | 2020 | 2021 | variance |
|---|---|---|---|
| Royalties received | 10 139 | 15 209 | 5 071 |
| Gains on disposal of PP&E and intangible assets | 3 410 | 8 458 | 5 047 |
| Realized exchange results on sales and purchases | -1 047 | 1 237 | 2 284 |
| Tax rebates | — | 429 | 429 |
| Government grants | 3 411 | 1 039 | -2 372 |
| Compensations received for claims | 3 192 | 2 855 | -337 |
| Restructuring¹ | 41 254 | 23 304 | -17 950 |
| Environmental | 16 218 | 148 | -16 070 |
| Other revenues | 8 081 | 10 260 | 2 179 |
| Total | 84 659 | 62 940 | -21 719 |
¹ Mainly relates to disposal of PP&E
| in thousands of € | 2020 | 2021 | variance |
|---|---|---|---|
| Royalties paid | — | -1 012 | -1 012 |
| Losses on disposal of PP&E and intangible assets | -2 594 | -1 375 | 1 219 |
| Amortization of intangible assets | -1 688 | -1 512 | 176 |
| Bank charges | -2 615 | -2 776 | -161 |
| Tax related expenses (other than income taxes) | -1 562 | -2 639 | -1 077 |
| Impairment losses | -5 377 | -278 | 5 099 |
| Restructuring | -13 832 | -12 379 | 1 453 |
| Losses on business disposals | -705 | -170 | 535 |
| Other expenses | -5 049 | -6 753 | -1 704 |
| Total | -33 422 | -28 894 | 4 528 |
The royalty income increased with 50% 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.
T he gain on the disposal of PP&E and intangible assets contained in 2021 the revenues from the sale of assets not included in restructuring programs, primarily in Belgium.
The compensations received for claims contained in 2020 compensations for business interruption due to Covid-19 for an amount of € 1.6 million and in 2021 contained a positive impact from the reduction of an insurance claim.
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.
In 2020 'Restructuring - revenues' contained mainly the gain from the sale of land and buildings following the plant closures due to restructuring and 'Restructuring - expenses' part of the cost (lay-off costs and impairment) related to the restructuring programs and plant closures.
'Environmental' in 2020 related mainly to reversal of provisions in Belgium linked to disposal of assets and a reimbursement of soil and groundwater remediation in Italy.
The impairment losses in 2020 are mainly for assets in Belgium and the United States as a result of the closure of plants.
The other section of other operating expenses included in 2020 a penalty for cancellation of an electricity contract for a lower tariff . The other section of other operating revenues included 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 defi ned in note 2.6. 'Alternative performance measures'), operating segment and income statement line item.
| EBIT Reported and Underlying | 2020 | 2021 | ||||
|---|---|---|---|---|---|---|
| in thousands of € | reported of which underlying | of which one-o s | reported of which underlying | of which one-o s | ||
| Sales | 3 772 374 | 3 772 374 | — | 4 839 659 | 4 839 659 | — |
| Cost of sales | -3 214 056 | -3 173 517 | -40 539 | -3 953 752 | -3 936 874 | -16 878 |
| Gross profi t | 558 318 | 598 857 | -40 539 | 885 907 | 902 785 | -16 878 |
| Selling expenses | -167 141 | -162 602 | -4 538 | -186 239 | -186 017 | -222 |
| Administrative expenses | -133 526 | -121 961 | -11 565 | -161 091 | -162 461 | 1 370 |
| Research and development expenses | -52 361 | -49 857 | -2 504 | -59 537 | -59 440 | -97 |
| Other operating revenues | 84 659 | 27 187 | 57 472 | 62 940 | 36 128 | 26 812 |
| Other operating expenses | -33 422 | -19 379 | -14 043 | -28 894 | -16 377 | -12 517 |
| Operating result (EBIT) | 256 527 | 272 244 | -15 717 | 513 086 | 514 617 | -1 531 |
| 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 | -3 427 | -1 335 | -402 | — | 283 | -1 105 | -5 986 |
| Steel Wire Solutions ² | -7 754 | -992 | -985 | — | 2 609 | -850 | -7 972 |
| Specialty Businesses ³ | -7 869 | -560 | -23 | -130 | 751 | -1 039 | -8 870 |
| Bridon-Bekaert Ropes Group (BBRG) ⁴ | -8 957 | 5 | -191 | — | 55 | -1 174 | -10 262 |
| Group ⁵ | -10 685 | -951 | -9 680 | -2 374 | 37 738 | -9 664 | 4 385 |
| Intersegment | — | — | — | — | -181 | — | -181 |
| Total restructuring programs | -38 692 | -3 833 | -11 280 | -2 504 | 41 254 | -13 832 | -28 887 |
| Business disposals | |||||||
| Group ⁶ | — | -705 | — | — | — | — | -705 |
| Total business disposals | — | -705 | — | — | — | — | -705 |
| Environmental provisions/(reversals of provisions) | |||||||
| Rubber Reinforcement | -2 192 | — | — | — | — | — | -2 192 |
| Group ⁷ | — | — | — | — | 16 218 | — | 16 218 |
| Total environmental provisions/(reversals) | -2 192 | — | — | — | 16 218 | — | 14 026 |
| Other events and transactions | |||||||
| Steel Wire Solutions | — | — | -199 | — | — | — | -199 |
| Specialty Businesses | — | — | — | — | — | -171 | -171 |
| Bridon-Bekaert Ropes Group (BBRG) | 345 | — | — | — | — | -41 | 304 |
| Group | — | — | -85 | — | — | -85 | |
| Total other events and transactions | 345 | — | -284 | — | — | -212 | -151 |
| Total | -40 539 | -4 538 | -11 565 | -2 504 | 57 472 | -14 043 | -15 717 |
¹ Related mainly to lay-off costs, the closure of Figline plant (Italy) and the restructuring in India.
² Related mainly to lay-off costs and impairment of assets due to the restructuring in Belgium.
³ Related mainly to lay-off -costs and impairment of assets due to the restructuring in China, the closure of the plant in Moen (Belgium) and lay-off costs due to the restructuring in Belgium.
⁴ Related mainly to impairment of assets due the planned closure of the company in Canada and lay-off costs due to the restructuring in the UK.
⁵ Related mainly to lay-off costs due to the restructuring in Belgium and gain on disposal of land and buildings in Belgium.
⁶ Contractual liability indemnifi cation related to previous divestments.
⁷ Related mainly to reversal of provisions in Belgium linked to disposal of assets and a reimbursement of soil and groundwater remediation in Italy.
| Administrative | Other operating | Other operating | |||||
|---|---|---|---|---|---|---|---|
| in thousands of € | Cost of Sales | Selling expenses | expenses | R&D | revenues | 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 indemnifi cation related to previous divestments.
⁷ Related mainly to the liquidation of a company in China and Costa Rica.
The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature.
| in thousands of € | 2020 | % on sales | 2021 | % on sales |
|---|---|---|---|---|
| Sales | 3 772 374 | 100% | 4 839 659 | 100% |
| Other operating revenues | 84 659 | — | 62 940 | — |
| Total operating revenues | 3 857 032 | — | 4 902 599 | — |
| Own construction of PP&E | 17 200 | 0.5% | 31 872 | 0.7% |
| Raw materials | -1 349 418 | -35.8% | -1 995 508 | -41.2% |
| Semi-fi nished products and goods for resale | -306 261 | -8.1% | -523 793 | -10.8% |
| Change in work-in-progress and fi nished goods | -43 634 | -1.2% | 277 348 | 5.7% |
| Staff costs | -796 051 | -21.1% | -840 348 | -17.4% |
| Depreciation and amortization | -202 103 | -5.4% | -166 905 | -3.4% |
| Impairment losses | -13 964 | -0.4% | 1 518 | 0.0% |
| Transport and handling of fi nished goods | -164 390 | -4.4% | -249 476 | -5.2% |
| Consumables and spare parts | -217 900 | -5.8% | -273 318 | -5.6% |
| Utilities | -224 534 | -6.0% | -264 128 | -5.5% |
| Maintenance and repairs | -57 147 | -1.5% | -66 054 | -1.4% |
| Lease and related expenses | -8 503 | -0.2% | -9 451 | -0.2% |
| Commissions in selling expenses | -6 315 | -0.2% | -8 008 | -0.2% |
| Export VAT and export customs duty | -2 432 | -0.1% | -12 760 | -0.3% |
| ICT costs | -39 208 | -1.0% | -40 034 | -0.8% |
| Advertising and sales promotion | -5 328 | -0.1% | -6 444 | -0.1% |
| Travel, restaurant & hotel | -8 181 | -0.2% | -8 605 | -0.2% |
| Consulting and other fees | -29 753 | -0.8% | -40 314 | -0.8% |
| Offi ce supplies and equipment | -8 451 | -0.2% | -8 472 | -0.2% |
| Venture capital funds R&D | -1 973 | -0.1% | -1 447 | 0.0% |
| Temporary or external labor | -27 261 | -0.7% | -36 238 | -0.7% |
| Insurance expenses | -10 692 | -0.3% | -15 427 | -0.3% |
| Miscellaneous | -94 207 | -2.5% | -133 520 | -2.8% |
| Total operating expenses | -3 600 506 | -95.4% | -4 389 512 | -90.7% |
| Operating result (EBIT) | 256 527 | 6.8% | 513 086 | 10.6% |
The impairment losses of the current year mainly related to disposal of machines and reversal due to restructuring of the previous year. The depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables.
| 2020 in thousands of € |
2021 |
|---|---|
| Interest income on fi nancial assets not measured at FVTPL 3 386 |
3 260 |
| Interest income 3 386 |
3 260 |
| Interest expense on interest-bearing debt not measured at FVTPL -51 159 |
-39 159 |
| Other debt-related interest expense -5 536 |
-3 496 |
| Debt-related interest expense -56 695 |
-42 655 |
| Interest element of discounted provisions -2 859 |
-1 825 |
| Interest expense -59 554 |
-44 480 |
| Total -56 168 |
-41 220 |
The decrease in interest expense was mainly due to the repayment of gross debt of € 419 million and the decrease in the interest expense linked to derivatives. There was a further reduction in intercompany loans and third party debt in foreign currency, causing an equal decrease in the volume of derivatives entered into to hedge the underlying interest risk (see note 7.2. 'Financial risk management and fi nancial derivatives').
Interest expense on interest-bearing debt, not classifi ed as at fair value through profi t or loss (FVTPL), relates to all debt instruments of the Group, other than interest-rate risk mitigating derivatives entered into as economic hedges.
T he interest element of discounted provisions related for € -1.8 million (2020: € -2.8 million) to defi ned-benefi t liabilities (see note 6.16. 'Employee benefi t obligations'). In 2020, € 0.1 million related to other provisions, while there was nil in 2021 (see note 6.17. 'Provisions').
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Value adjustments to derivatives | 567 | 4 987 |
| Exchange results on hedged items | -9 765 | 1 570 |
| Net impact of derivatives and hedged items | -9 198 | 6 557 |
| Other exchange results -17 934 |
-4 315 | |
| Gains and losses on disposal of fi nancial assets | — | 19 |
| Dividends from non-consolidated equity investments | 1 184 | 5 088 |
| Bank charges and taxes on fi nancial transactions | -3 376 | -4 074 |
| Impairments of other receivables | — | -39 |
| Other | -842 | 1 194 |
| Total -30 165 |
4 430 |
Value adjustments include changes in the fair value of all derivatives, other than those designated as cash fl ow 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. Value adjustments to derivatives included a fair value gain of € 9.4 million in 2021 (2020: gain of € 1.1 million), mainly 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 fi nancial derivatives'.
Other exchange results in 2021 amounted to € -4.3 million and were mainly related to the devaluation of the Turkish lira and the Chilean peso, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on fi nancial transactions included charges linked to the factoring programs.
In 2021, other elements related mainly to a gain of € 1.2 million from the net settlements out of the VPPA.
All dividends from non-consolidated equity investments related to interests still held at reporting date as no shares were sold during the year.
| 2020 in thousands of € |
2021 |
|---|---|
| Current income taxes - current year -58 130 |
-115 674 |
| Current income taxes - prior periods 21 386 |
-332 |
| Deferred taxes - due to changes in temporary diff erences -32 159 |
-40 181 |
| Deferred taxes - due to changes in tax rates -2 214 |
-3 710 |
| Deferred taxes - adjustments to tax losses of prior periods 6 990 |
-2 150 |
| Deferred taxes - utilization of deferred tax assets not previously recognized 7 614 |
28 751 |
| Total tax expense -56 513 |
-133 296 |
In the table below, accounting profi t is defi ned as the result before taxes.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Result before taxes 170 194 |
476 296 | |
| Tax expense at the theoretical domestic rates applicable to results of taxable entities in the countries concerned -46 943 |
-117 823 | |
| Theoretical tax rate ¹ -27.6% |
-24.7% | |
| Tax eff ect of: | ||
| Non-deductible items | -8 528 | -12 893 |
| Other tax rates, tax credits and special tax regimes ² | 13 334 | 13 979 |
| Non-recognition of deferred tax assets ³ -33 855 |
-16 803 | |
| Utilization or recognition of deferred tax assets not previously recognized ⁴ | 7 614 | 28 751 |
| Deferred tax due to change in tax rates | -2 214 | -3 710 |
| Tax relating to prior periods ⁵ | 28 376 | -2 482 |
| Exempted income | 129 | 3 224 |
| Withholding taxes on dividends, royalties, interests & services -15 864 |
-21 308 | |
| Other | 1 438 | -4 231 |
| Total tax expense -56 513 |
-133 296 | |
| Eff ective tax rate -33.2% |
-28.0% |
¹ The theoretical tax rate is computed as a weighted average taking into account the results before taxes in diff erent countries at diff erent rates.
² In 2021, the special tax regimes and tax credits mainly related to tax incentives in Belgium, similar as in 2020.
³ In 2021, the non-recognition of deferred tax assets mainly related to losses carried forward in Belgium, Canada, China, Spain and the USA, while in 2020, it mainly related to losses carried forward in Brazil, Canada, China, Chile, Germany, Italy and the USA, and to impaired assets of the Sawing Wire business in China.
⁴ In 2021, the movement was mainly triggered by usage of losses carried forward and recognition of deferred tax assets previously not recognized, similar as in 2020.
⁵ In 2021, the prior year tax adjustments mainly relate to tax fi lings, while in 2020 a number of pending tax audits in diff erent countries were fi nalized, leading to an additional tax expense on the one hand but also to the release of related provisions for uncertain tax positions on the other hand.
In 2021, the share in the result of joint ventures and associates refl ected the very strong performance of both Steel Wire Solutions and Rubber Reinforcement businesses in Brazil. Moreover, Belgo Bekaert Arames Ltda was able 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 increase in performance was only slightly aff ected by the decrease in value of the Brazilian real against the euro (average rate decreased by 8.4% from 2020 to 2021). This decrease in YTD average rate 2021 versus 2020 was mainly caused by a signifi cant decrease in the course of 2020, 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 € | 2020 | 2021 | |
|---|---|---|---|
| Joint ventures | |||
| Agro-Bekaert Colombia SAS | Colombia | -244 | -390 |
| Agro - Bekaert Springs, SL | Spain | -6 | -6 |
| Belgo Bekaert Arames Ltda | Brazil | 27 631 | 99 349 |
| BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 7 121 | 8 701 |
| Servicios Ideal AGF Inttegra Cía Ltda | Ecuador | -147 | -34 |
| Total | 34 355 | 107 619 |
| 2020 | Number |
|---|---|
| Weighted average number of ordinary shares (basic) | 56 554 555 |
| Dilution eff ect of share-based payment arrangements | 85 471 |
| Dilution eff ect of convertible bond ¹ | 7 493 591 |
| Weighted average number of ordinary shares (diluted) | 64 133 617 |
| in thousands of € | Basic | Diluted |
|---|---|---|
| Result for the period attributable to ordinary shareholders | 134 687 | 134 687 |
| Eff ect on earnings of convertible bonds ¹ | 10 613 | |
| Earnings | 134 687 | 145 300 |
| Earnings per share (in €) | 2.382 | 2.266 |
¹ Not to be reported if the eff ect of the convertible bond is anti-dilutive, i.e.if its eff ect is such that if would improve the EPS (see below).
| 2021 | Number | |
|---|---|---|
| Weighted average number of ordinary shares (basic) | 57 000 709 | |
| Dilution eff ect 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 | 406 977 | 406 977 |
| Earnings | 406 977 | 406 977 |
| Earnings per share (in €) | 7.140 | 7.063 |
Earnings per share ('EPS') is the amount of post-tax profi t 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 refl ects 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') and potentially for the settlement of the convertible bond. 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 satisfi ed at the balance sheet date. The dilution eff ect 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 eff ect on the earnings to be used in the numerator of the EPS ratio. The convertible bond tends to aff ect both the denominator and the numerator of the EPS ratio. The dilution eff ect of the convertible bond on the earnings (to be used in the numerator of the EPS ratio) consists of a reversal of all income and expenses directly related to the convertible bonds and having aff ected the 'basic' earnings for the period. As the convertible bond matured in June 2021, there is no longer a dilution eff ect to be calculated. In 2020, income statement items were aff ected by the convertible bond for € -10.6 million.
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 eff ect of € -0.08 per share (2020: € -0.116), all related to the share-based payment arrangements (2020: € -0.004) and of which none related to the convertible bond (2020: € -0.112).
The average closing price during 2021 was € 36.33 per share (2020: € 19.92 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 fulfi lled.
| 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 |
| Cost | Licenses, patents & | ||||
|---|---|---|---|---|---|
| in thousands of € | similar rights | Computer software | Commercial assets | Other | Total |
| As at 1 January 2020 | 23 773 | 91 649 | 56 408 | 16 208 | 188 037 |
| Expenditure | — | 3 214 | — | — | 3 214 |
| New consolidations | — | 7 | — | — | 7 |
| Disposals and retirements | — | -2 048 | — | — | -2 048 |
| Transfers ¹ | 2 601 | 216 | -37 | — | 2 779 |
| Exchange gains and losses (-) | -34 | -1 566 | -2 081 | -642 | -4 323 |
| As at 31 December 2020 | 26 340 | 91 472 | 54 290 | 15 566 | 187 667 |
| As at 1 January 2021 | 26 340 | 91 472 | 54 290 | 15 566 | 187 667 |
| Expenditure | 17 | 11 207 | 1 627 | 2 | 12 852 |
| 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 | 27 305 | 97 388 | 58 717 | 14 752 | 198 162 |
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').
| Accumulated amortization and impairment | Licenses, patents & | ||||
|---|---|---|---|---|---|
| in thousands of € | similar rights | Computer software | Commercial assets | Other | Total |
| As at 1 January 2020 | 15 859 | 77 730 | 18 487 | 15 696 | 127 772 |
| Charge for the year | 1 655 | 4 815 | 3 311 | 108 | 9 890 |
| Impairment losses | — | 103 | — | — | 103 |
| Disposals and retirements | — | -2 039 | — | — | -2 039 |
| Exchange gains (-) and losses | -3 | -1 498 | -604 | -616 | -2 722 |
| As at 31 December 2020 | 17 510 | 79 111 | 21 194 | 15 188 | 133 003 |
| 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 |
| Carry amount as at 31 December 2020 | 8 830 | 12 361 | 33 096 | 378 | 54 664 |
| Carry amount as at 31 December 2021 | 7 965 | 20 273 | 33 202 | — | 61 440 |
The software expenditure related to the extensive implementation of the digital roadmap in various domains (commercial, supply chain, manufacturing, procurement, fi nance, HR, ...), while fully amortized items were taken off the balance sheet.
No intangible assets have been identifi ed as having an indefi nite useful life at the balance sheet date.
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 | |
|---|---|
| 2020 in thousands of € |
2021 |
| As at 1 January 155 024 |
154 280 |
| New consolidations 598 |
— |
| Exchange gains and losses (-) -1 342 |
1 689 |
| As at 31 December 154 280 |
155 970 |
| in thousands of € | 2020 | 2021 |
|---|---|---|
| As at 1 January | 5 240 | 4 883 |
| Exchange gains (-) and losses | -358 | 413 |
| As at 31 December | 4 883 | 5 295 |
| Carrying amount as at 31 December | 149 398 | 150 674 |
Goodwill acquired in a business combination is allocated on acquisition to the cash-generating units (CGU) that are expected to benefi t from that business combination. The carrying amount of goodwill allocated and any related movements of the period are as follows :
| Carrying amount | Exchange | Carrying amount | |||
|---|---|---|---|---|---|
| in thousands of € | Group of cash-generating units | 1 January | Increases | di erences | 31 December |
| Subsidiaries | |||||
| SWS | Bekaert Bradford UK Ltd | 2 631 | — | -141 | 2 490 |
| SB | Combustion - heating EMEA | 3 027 | — | — | 3 027 |
| SB | Building Products | 71 | — | — | 71 |
| RR | Rubber Reinforcement | 4 255 | — | — | 4 255 |
| SWS | Orrville plant (USA) | 10 442 | — | -882 | 9 560 |
| SWS | Inchalam group | 750 | — | -23 | 727 |
| SWS | Bekaert Ideal SL companies | 844 | — | — | 844 |
| SWS | Bekaert (Qingdao) Wire Products Co Ltd | 385 | — | — | 385 |
| SWS | Bekaert Jiangyin Wire Products Co Ltd | 47 | — | — | 47 |
| SWS | Grating Peru SAC | — | 598 | -51 | 547 |
| BBRG | BBRG | 127 332 | — | 113 | 127 445 |
| Subtotal | 149 784 | 598 | -984 | 149 398 | |
| Joint ventures and associates | |||||
| SWS | Belgo Bekaert Arames Ltda | 3 328 | — | -970 | 2 358 |
| RR | BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 2 035 | — | -593 | 1 442 |
| Subtotal | 5 363 | — | -1 563 | 3 800 | |
| Total | 155 148 | 598 | -2 547 | 153 198 |
| Carrying amount | Exchange | Carrying amount | |||
|---|---|---|---|---|---|
| in thousands of € | Group of cash-generating units | 1 January | Increases | di erences | 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 |
Following the merger of Grating Peru SAC into Productos de Acero Cassadó S.A., the initial goodwill allocated to Grating Peru SAC was reclassifi ed under the Bekaert Ideal SL companies.
The discount factor for all impairment tests is based on a (long-term) pre-tax cost of capital, the risks being implicit in the cash fl ows. 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 specifi c risk factor. The WACC is pre-tax based, since relevant cash fl ows are also pre-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 fl ow models stated in real terms (without infl ation), the nominal WACC is adjusted for the expected infl ation rate. For cash fl ow models in nominal terms, the nominal WACC is used. All parameters used for the calculation of the discount factors are reviewed at least annually.
In relation to the impairment testing of goodwill arising from the BBRG business combination, the following model characteristics have been used:
The headroom for impairment, i.e., the excess of the recoverable amount over the carrying amount of the BBRG CGU is estimated at € 375.0 million (2020: € 218.7 million). The increase is the combined result of the updated business plan (€ +177.8 million) off set by an increase of the capital employed of the business (€ +21.6 million).
The following scenario's illustrate the sensitivity of this headroom to changes in the key assumptions of the business plan:
Based on current knowledge, reasonable changes in key assumptions (including discount rate, sales and margin evolution) would not generate impairments for any of the cashgenerating units for which goodwill has been allocated.
| 2020 | 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% | 3.8% | 4.8% | |
| Long term interest rate | 1.5% | 4.2% | 4.9% | |
| Short term interest rate | 0.4% | 2.7% | 4.4% | |
| Cost of Bekaert equity (post tax) | = Rf + b * Em | 7.9% | 9.0% | 13.1% |
| Risk free rate = Rf | -0.3% | 0.8% | 4.9% | |
| Beta = b | 1.3 | |||
| Market equity risk premium = Em | 6.3% | |||
| Corporate tax rate | 27% | |||
| Cost of Bekaert equity before tax | 10.8% | 12.4% | 18.0% | |
| Bekaert WACC - nominal | 7.6% | 9.5% | 13.6% | |
| Expected infl ation | 1.4% | 2.0% | 2.8% | |
| Bekaert WACC in real terms | 6.2% | 7.5% | 10.8% |
| 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 before tax | 12.8% | 14.8% | 19.3% | |
| Bekaert WACC - nominal | 9.1% | 11.4% | 14.5% | |
| Expected infl ation | 2.1% | 2.3% | 3.0% | |
| Bekaert WACC in real terms | 7.0% | 9.1% | 11.5% |
| Cost | Plant, machinery | Furniture and | Assets under | |||
|---|---|---|---|---|---|---|
| in thousands of € | Land and buildings | and equipment | vehicles | Other PP&E | construction | Total |
| As at 1 January 2020 | 1 203 052 | 2 921 507 | 111 751 | 17 266 | 83 209 | 4 336 784 |
| Expenditure | 30 526 | 56 434 | 4 638 | 366 | 8 140 | 100 104 |
| Disposals and retirements | -23 901 | -94 502 | -5 109 | -1 014 | -195 | -124 271 |
| New consolidations | — | 250 | 19 | — | — | 268 |
| Transfers ¹ | — | 2 254 | 39 | — | -2 817 | -524 |
| Reclassifi cation to (-) / from held for sale ² | -8 482 | — | — | — | — | -8 482 |
| Exchange gains and losses (-) | -48 096 | -110 778 | -3 225 | -320 | -4 313 | -166 732 |
| As at 31 December 2020 | 1 153 100 | 2 775 614 | 108 112 | 16 298 | 84 023 | 4 137 147 |
| 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 |
| Reclassifi cation 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 |
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 2020, the reclassifi cation to held for sale mainly related to the buildings in Canada; in 2021 this relates to the Ingelmunster (Belgium) site (see note 6.12. 'Assets classifi ed as held for sale and liabilities associated with those assets').
| Accumulated depreciation and impairment | Plant, machinery | Furniture and | Assets under | |||
|---|---|---|---|---|---|---|
| in thousands of € | Land and buildings | and equipment | vehicles | Other PP&E | construction | Total |
| As at 1 January 2020 | 631 920 | 2 251 771 | 91 236 | 5 457 | — | 2 980 384 |
| Charge for the year | 41 434 | 111 237 | 8 236 | 760 | — | 161 667 |
| Impairment losses | 1 931 | 14 779 | 210 | — | — | 16 920 |
| Reversal impairment losses and depreciations | — | -3 125 | -16 | — | — | -3 141 |
| Disposals and retirements | -15 797 | -93 637 | -4 913 | -784 | — | -115 131 |
| Transfers ¹ | — | 788 | — | — | — | 788 |
| Reclassifi cation to (-) / from held for sale ² | -2 115 | — | — | — | — | -2 115 |
| Exchange gains (-) and losses | -22 617 | -74 523 | -2 667 | -187 | — | -99 994 |
| As at 31 December 2020 | 634 755 | 2 207 291 | 92 087 | 5 246 | — | 2 939 379 |
| 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 |
| Reclassifi cation 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 |
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 2020, the reclassifi cation to held for sale mainly related to the buildings in Canada; in 2021 this relates to the Ingelmunster (Belgium) site (see note 6.12. 'Assets classifi ed as held for sale and liabilities associated with those assets').
| 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 2020 before investment grants | 518 345 | 568 324 | 16 026 | 11 051 | 84 023 | 1 197 769 |
| Net investment grants | -4 704 | -1 284 | — | — | — | -5 988 |
| Carry amount as at 31 December 2020 | 513 641 | 567 040 | 16 026 | 11 051 | 84 023 | 1 191 781 |
| Carrying amount as at 31 December 2021 before investment grants | 525 495 | 557 347 | 15 457 | 10 168 | 151 091 | 1 259 559 |
| Net investment grants | -4 780 | -922 | — | — | — | -5 702 |
| Carry amount as at 31 December 2021 | 520 716 | 556 425 | 15 457 | 10 168 | 151 091 | 1 253 857 |
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 fi eld in Vietnam). Capital expenditure in the Steel Wire Solutions business was mainly in Central Europe, USA and Latin America. In the Specialty Businesses segment, expansion capital expenditure was in Central Europe (Building Products), in Belgium (Fiber Technologies), and in the European plants of Combustion Technologies. 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 2021 related to a few big expansion projects (such as the plant in Vietnam, expansions in Central and Eastern Europe , the BBRG plant in USA 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 fi nalization phase.
In 2020, impairment losses have been recorded in BBRG (Canada), Specialty Businesses (Combustion Technologies China) and Steel Wire Solutions (EMEA).
No items of PP&E were pledged as securities.
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 plant, | |||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of € | RoU land | RoU buildings | machinery and equipment |
RoU industrial vehicles |
RoU company cars | RoU o ce equipment |
RoU other PP&E | Total |
| As at 1 January 2020 | 78 789 | 72 863 | 4 381 | 15 411 | 20 808 | 1 547 | 373 | 194 173 |
| New leases / extensions | — | 11 809 | 1 500 | 5 026 | 5 334 | 406 | 235 | 24 309 |
| Ending contracts / reductions in contract term |
-3 978 | -7 710 | -285 | -2 399 | -3 122 | -135 | -12 | -17 641 |
| Transfers ¹ | — | — | -2 255 | — | — | — | — | -2 255 |
| Exchange gains and losses (-) | -3 434 | -3 276 | -135 | -545 | -396 | -87 | -8 | -7 881 |
| As at 31 December 2020 | 71 376 | 73 686 | 3 206 | 17 494 | 22 624 | 1 730 | 589 | 190 704 |
| 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 |
| Accumulated depreciation and impairment |
RoU plant, machinery and |
RoU industrial | RoU o ce | |||||
|---|---|---|---|---|---|---|---|---|
| in thousands of € | RoU land | RoU buildings | equipment | vehicles | RoU company cars | equipment | RoU other PP&E | Total |
| As at 1 January 2020 | 16 809 | 16 818 | 1 331 | 3 781 | 6 015 | 296 | 71 | 45 121 |
| Charge for the year | 1 419 | 9 987 | 832 | 4 949 | 6 301 | 353 | 88 | 23 930 |
| Impairment losses | — | 59 | — | — | — | — | — | 59 |
| Ending contracts | -400 | -3 792 | -285 | -1 542 | -2 318 | -34 | -1 | -8 372 |
| Transfers ¹ | — | — | -788 | — | — | — | — | -788 |
| Exchange gains (-) and losses | -627 | -853 | -36 | -163 | -147 | -25 | -3 | -1 853 |
| As at 31 December 2020 | 17 201 | 22 219 | 1 055 | 7 026 | 9 852 | 590 | 155 | 58 097 |
| 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 |
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 o ce equipment |
RoU other PP&E | Total |
|---|---|---|---|---|---|---|---|---|
| Carrying amount as at 31 December 2020 |
54 175 | 51 467 | 2 151 | 10 468 | 12 773 | 1 141 | 433 | 132 607 |
| Carrying amount as at 31 December 2021 |
57 668 | 48 584 | 1 972 | 12 172 | 10 214 | 1 178 | 285 | 132 073 |
The Group leases various plants, offi ces, warehouses, equipment, industrial vehicles, company cars, servers and small offi ce equipment like printers. 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 offi ce equipment. The Group also applied the practical expedient for short term leases (defi ned 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.
Additions to RoU buildings included new contracts for warehouses and offi ces, mainly in China and United Arab Emirates.
The average lease term for the RoU assets (excluding the RoU land) was 9.9 years (2020: 9.8 years). RoU buildings had an average lease term of 13 years (2020: 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 diff erent 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 4.01% (2020: 4.09%).
The fi nance cost is charged to profi t 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 eff ect. When adjustments to lease payments based on an index or rate take eff ect, 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.
| RoU plant, | ||||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of € | RoU land | RoU buildings | machinery and equipment |
RoU industrial vehicles |
RoU company cars |
RoU o ce equipment |
RoU other PP&E |
Total |
| Depreciation charge of right-of-use assets | -1 419 | -9 987 | -832 | -4 949 | -6 301 | -353 | -88 | -23 930 |
| Interest expense (included in fi nance cost) | -3 593 | |||||||
| Expense relating to short-term leases | -1 121 | |||||||
| Expense relating to low-value leases | -888 | |||||||
| Total | -29 532 |
| RoU plant, | ||||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of € | RoU land | RoU buildings | machinery and equipment |
RoU industrial vehicles |
RoU company cars |
RoU o ce 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 fi nance cost) | -3 152 | |||||||
| Expense relating to short-term leases | -837 | |||||||
| Expense relating to low-value leases | -727 | |||||||
| Total | -28 926 |
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 outfl ow for leases in 2021 was € 27.9 million (2020: € 27.8 million).
In 2021 and 2020, the Group had no investments in entities qualifi ed as associates.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| As at 1 January | 155 302 | 120 181 |
| Capital increases and decreases | 872 | — |
| Result for the year | 34 355 | 107 619 |
| Dividends | -24 908 | -44 872 |
| Exchange gains and losses | -45 443 | 1 891 |
| Other comprehensive income | 3 | 3 |
| As at 31 December | 120 181 | 184 823 |
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 which remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020). In 2020, it decreased signifi cantly in value against the euro (4.5 BRL/EUR end 2019).
In 2020, capital increases related to Agro - Bekaert Springs, SL and Agro-Bekaert Colombia SAS, new 50/50 joint ventures in Spain and Colombia, and to a lesser extent to Servicios Ideal AGF Inttegra Cía Ltda in Ecuador.
| 2020 in thousands of € |
2021 |
|---|---|
| As at 1 January 5 363 |
3 800 |
| Exchange gains and losses -1 563 |
38 |
| As at 31 December 3 800 |
3 838 |
| Carrying amount of related goodwill as at 31 December 3 800 |
3 838 |
| Total carrying amount of investments in joint ventures as at 31 December 123 981 |
188 661 |
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 € | 2020 | 2021 | |
|---|---|---|---|
| Joint ventures | |||
| Agro-Bekaert Colombia SAS | Colombia | 473 | 56 |
| Agro - Bekaert Springs, SL | Spain | 20 | 13 |
| Belgo Bekaert Arames Ltda | Brazil | 77 679 | 136 092 |
| BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 41 845 | 48 521 |
| Servicios Ideal AGF Inttegra Cía Ltda | Ecuador | 164 | 140 |
| Total for joint ventures excluding related goodwill | 120 181 | 184 822 | |
| Carrying amount of related goodwill | 3 800 | 3 838 | |
| Total for joint ventures including related goodwill | 123 981 | 188 661 |
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 2020 2021 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 wire products mostly for industrial customers, and BMB manufactures and sells mainly wires and cables for rubber reinforcement in tires.
| 2020 in thousands of € |
2021 |
|---|---|
| Sales 694 366 |
1 041 142 |
| Operating result (EBIT) 109 680 |
282 531 |
| Interest income 8 524 |
53 043 |
| Interest expense -4 397 |
-17 775 |
| Other fi nancial income and expenses -2 062 |
-2 051 |
| Income taxes -25 656 |
-62 360 |
| Result for the period 86 089 |
253 389 |
| Other comprehensive income for the period 6 |
12 |
| Total comprehensive income for the period 86 095 |
253 400 |
| Depreciation and amortization 16 214 |
15 803 |
| EBITDA 125 894 |
298 334 |
| Dividends received from the entities 24 908 |
44 872 |
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Current assets | 217 429 | 406 456 |
| Non-current assets | 189 957 | 239 857 |
| Current liabilities | -109 817 | -184 396 |
| Non-current liabilities | -33 600 | -53 086 |
| Net assets | 263 969 | 408 831 |
| 2020 in thousands of € |
2021 |
|---|---|
| Non-current interest-bearing debt 8 247 |
5 963 |
| Current interest-bearing debt 17 252 |
18 454 |
| Total fi nancial debt 25 499 |
24 417 |
| Non-current fi nancial receivables and cash guarantees -18 862 |
-16 466 |
| Cash and cash equivalents -19 393 |
-31 940 |
| Net debt -12 756 |
-23 990 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling € 5.0 million (2020: € 6.0 million). Several other tax claims, most of which date back several years, were fi led for a total nominal amount of € 18.6 million (2020: € 11.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only aff ect 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 € 16.2 million (2020: € 4.6 million), including € 12.4 million (2020: € 2.7 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next fi ve years for an aggregate amount of € 24.9 million (2020: € 25.2 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.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Net assets of Belgo Bekaert Arames Ltda | 171 882 | 301 977 |
| Proportion of the Group's ownership interest | 45.0% | 45.0% |
| Proportionate net assets | 77 347 | 135 890 |
| Consolidation adjustments | 332 | 202 |
| Carrying amount of the Group's interest in Belgo Bekaert Arames Ltda | 77 679 | 136 092 |
| Net assets of BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 92 088 | 106 854 |
| Proportion of the Group's ownership interest | 44.5% | 44.5% |
| Proportionate net assets | 40 979 | 47 550 |
| Consolidation adjustments | 866 | 971 |
| Carrying amount of the Group's interest in BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 41 845 | 48 521 |
| Carrying amount of the Group's interest in the Brazilian joint ventures | 119 524 | 184 613 |
The following table refl ects aggregate information for the other joint ventures which were not deemed material in this context.
| 2020 in thousands of € |
2021 |
|---|---|
| The Group's share in the result from continuing operations -397 |
-430 |
| The Group's share of other comprehensive income -14 |
-2 |
| The Group's share of total comprehensive income -411 |
-432 |
| Aggregate carrying amount of the Group's interests in these joint ventures 657 |
210 |
| 2020 in thousands of € |
2021 |
|---|---|
| Non-current fi nancial receivables and cash guarantees 7 451 |
10 192 |
| Reimbursement rights and other non-current amounts receivable 3 164 |
2 522 |
| Derivatives (cf. note 7.2.) 3 762 |
13 244 |
| Overfunded employee benefi t plans - non-current 18 082 |
19 847 |
| Equity investments at FVTOCI 13 372 |
20 081 |
| Total other non-current assets 45 830 |
65 886 |
The overfunded employee benefi t plans related to the UK pension plans (see note 6.16. 'Employee benefi t obligations').
| in thousands of € | 2020 | 2021 |
|---|---|---|
| As at 1 January | 13 152 | 13 372 |
| Expenditure | — | 863 |
| Fair value changes | 220 | 5 847 |
| As at 31 December | 13 372 | 20 081 |
The equity investments designated as at fair value through OCI (FVTOCI) in accordance with IFRS 9 'Financial Instruments' mainly consisted of:
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'.
| Carrying amount | Assets | Liabilities | ||
|---|---|---|---|---|
| in thousands of € | 2020 | 2021 | 2020 | 2021 |
| As at 1 January | 142 333 | 124 243 | 34 182 | 38 337 |
| Increase or decrease via income statement | -9 302 | -2 821 | 10 467 | 14 469 |
| Increase or decrease via OCI | 557 | -2 191 | 1 580 | 1 308 |
| New consolidations | — | — | — | 1 184 |
| Exchange gains and losses | -6 372 | 6 869 | -4 919 | 3 183 |
| Change in set-off of assets and liabilities | -2 973 | -6 501 | -2 973 | -6 501 |
| As at 31 December | 124 243 | 119 599 | 38 337 | 51 979 |
Deferred tax assets and liabilities were attributable to the following items:
| Assets | Liabilities | Net assets | ||||
|---|---|---|---|---|---|---|
| in thousands of € | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 |
| Intangible assets | 19 553 | 17 390 | 12 051 | 12 390 | 7 502 | 5 000 |
| Property, plant and equipment | 44 130 | 46 338 | 52 401 | 55 828 | -8 271 | -9 490 |
| Financial assets | 111 | 90 | 20 961 | 31 967 | -20 850 | -31 877 |
| Inventories | 9 565 | 10 581 | 2 103 | 8 168 | 7 462 | 2 413 |
| Receivables | 4 614 | 4 156 | 57 | 128 | 4 557 | 4 027 |
| Other current assets | 831 | 1 004 | 2 598 | 1 995 | -1 767 | -991 |
| Employee benefi t obligations | 23 494 | 20 697 | 119 | 120 | 23 375 | 20 577 |
| Other provisions | 3 477 | 1 938 | 177 | 4 | 3 300 | 1 934 |
| Other liabilities | 27 967 | 38 630 | 8 299 | 8 311 | 19 668 | 30 319 |
| Tax deductible losses carried forward, tax credits and recoverable income taxes |
50 930 | 45 707 | — | — | 50 930 | 45 707 |
| Tax assets / liabilities | 184 672 | 186 529 | 98 766 | 118 910 | 85 906 | 67 620 |
| Set-off of assets and liabilities | -60 429 | -66 930 | -60 429 | -66 930 | — | — |
| Net tax assets / liabilities | 124 243 | 119 599 | 38 337 | 51 979 | 85 906 | 67 620 |
The deferred taxes on property, plant and equipment mainly related to diff erences 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 benefi t obligations were mainly generated by temporary diff erences arising from recognition of liabilities in accordance with IAS 19 'Employee Benefi ts'. The deferred tax liabilities on fi nancial assets mainly related to temporary diff erences arising from undistributed profi ts from subsidiaries and joint ventures.
Movements in deferred tax assets and liabilities arose from the following:
2020
| 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 di erences | ||||||
| Intangible assets | 12 019 | -4 805 | — | — | 288 | 7 502 |
| Property, plant and equipment | 2 346 | -13 535 | — | — | 2 918 | -8 271 |
| Financial assets | -16 132 | -3 136 | -1 770 | — | 188 | -20 850 |
| Inventories | 6 677 | 646 | — | — | 139 | 7 462 |
| Receivables | 3 860 | 840 | — | — | -143 | 4 557 |
| Other current assets | -842 | -933 | — | — | 8 | -1 767 |
| Employee benefi t obligations | 20 942 | 2 812 | 580 | — | -959 | 23 375 |
| Other provisions | 3 473 | -300 | 167 | — | -40 | 3 300 |
| Other liabilities | 19 525 | 853 | — | — | -710 | 19 668 |
| Tax deductible losses carried forward, tax credits and recoverable income taxes | 56 283 | -2 211 | — | — | -3 142 | 50 930 |
| Total | 108 151 | -19 769 | -1 023 | — | -1 453 | 85 906 |
| 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 di erences | ||||||
| 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 | -20 850 | -9 294 | -1 288 | — | -445 | -31 877 |
| Inventories | 7 462 | -4 459 | — | — | -590 | 2 413 |
| Receivables | 4 557 | -596 | — | — | 66 | 4 027 |
| Other current assets | -1 767 | 722 | — | — | 55 | -991 |
| Employee benefi t obligations | 23 375 | -997 | -2 212 | — | 411 | 20 577 |
| 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 | -17 290 | -3 500 | -1 184 | 3 686 | 67 620 |
| in thousands of € | Before tax | Tax impact | After tax |
|---|---|---|---|
| Exchange diff erences | -119 013 | — | -119 013 |
| Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | 250 | — | 250 |
| Remeasurement gains and losses on defi ned-benefi t plans | 2 497 | -1 023 | 1 474 |
| Share of OCI of joint ventures and associates | 4 | — | 4 |
| Total | -116 262 | -1 023 | -117 285 |
| in thousands of € | Before tax | Tax impact | After tax |
|---|---|---|---|
| Exchange diff erences | 88 173 | — | 88 173 |
| 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 defi ned-benefi t plans | 47 351 | -3 500 | 43 851 |
| Share of OCI of joint ventures and associates | 6 | -3 | 3 |
| Total | 141 412 | -3 503 | 137 909 |
Deferred tax assets, related to deductible temporary diff erences, have not been recognized for a gross amount of € 188.7 million (2020: € 235.5 million). The unrecognized deferred tax assets in respect of tax losses and tax credits are presented in the table by expiry date below.
The following table presents the gross amounts of the tax losses and tax credits generating deferred tax assets of which some were unrecognized.
| 2020 | ||||||
|---|---|---|---|---|---|---|
| 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 | — | — | 536 | 43 072 | 43 608 |
| Allowance | — | — | — | -36 872 | -36 872 | |
| Net balance | — | — | 536 | 6 200 | 6 736 | |
| Trade losses | Gross value | 11 649 | 94 489 | 123 900 | 780 467 | 1 010 505 |
| Allowance | -11 583 | -73 063 | -110 464 | -656 033 | -851 143 | |
| Net balance | 66 | 21 426 | 13 436 | 124 434 | 159 362 | |
| Tax credits | Gross value | 4 106 | — | 35 884 | 35 752 | 75 742 |
| Allowance | — | — | -17 775 | -10 284 | -28 059 | |
| Net balance | 4 106 | — | 18 109 | 25 468 | 47 683 | |
| Total | Gross value | 15 755 | 94 489 | 160 320 | 859 291 | 1 129 855 |
| Allowance | -11 583 | -73 063 | -128 239 | -703 189 | -916 074 | |
| Net balance | 4172 | 21 426 | 32 081 | 156 102 | 213 781 |
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 |
The net deferred tax assets corresponding to these base amounts were € 45.7 million in 2021 (2020: € 50.9 million)).
Deferred tax assets were recognized only to the extent that it was probable that future taxable profi ts 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 fi ve 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 refl ect 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.
2020
| Write-downs | |||||||
|---|---|---|---|---|---|---|---|
| in thousands of € | As at 1 January | Organic increase or decrease ¹ |
and write-down reversals |
New consolidations |
Exchange gains and losses |
Other | As at 31 December |
| Raw materials | 139 985 | -9 551 | -3 815 | 69 | -6 549 | — | 120 139 |
| Consumables and spare parts | 91 125 | -5 870 | -2 708 | 137 | -3 972 | — | 78 711 |
| Work in progress | 136 425 | -4 957 | -817 | — | -4 975 | — | 125 676 |
| Finished goods | 282 018 | -38 208 | 2 045 | 53 | -11 050 | — | 234 858 |
| Goods purchased for resale | 133 477 | -252 | -1 609 | 83 | -7 606 | — | 124 093 |
| Inventories | 783 030 | -58 838 | -6 904 | 342 | -34 153 | — | 683 477 |
| Trade receivables | 644 908 | -25 565 | -400 | 681 | -31 954 | -51 | 587 619 |
| Bills of exchange received | 59 904 | -4 154 | — | — | -1 710 | — | 54 039 |
| Advances paid | 15 820 | 3 576 | — | 301 | -1 102 | — | 18 594 |
| Trade payables | -652 384 | -41 706 | — | -778 | 26 571 | -125 | -668 422 |
| Advances received | -18 791 | 2 425 | — | -39 | 723 | — | -15 682 |
| Remuneration and social security payables | -125 051 | 4 969 | — | -178 | 3 285 | 960 | -116 014 |
| Employment-related taxes | -8 543 | -641 | — | — | 82 | — | -9 101 |
| Operating working capital | 698 893 | -119 935 | -7 304 | 329 | -38 257 | 784 | 534 510 |
| 2021 | |
|---|---|
| ------ | -- |
| Write-downs | |||||||
|---|---|---|---|---|---|---|---|
| in thousands of € | As at 1 January | Organic increase or decrease ¹ |
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 |
¹ The organic increase or decrease represents the cash movements of the working capital, which are adjusted in the cash fl ow 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 (2021: increase of outstanding payables by € 9.4 million (2020: decrease of outstanding payables by € 4.5 million)).
The average working capital, weighted by the number of periods that an entity has contributed to the consolidated result, represented 12.6% of sales (2020: 16.4%). Additional information is as follows:
The inventories increased from year-end last year as the combined eff ect of higher material prices, replenishment of very low inventory tonnages at year-end 2020 and the higher activity. The cost of sales included expenses related to transport and handling of fi nished goods amounting to € 249.5 million (2020: € 164.4 million), which have never been capitalized in inventories. Movements in inventories in 2021 included write-downs of € -22.8 million (2020: € -34.6 million) and reversals of write-downs of € 40.1 millio n (2020: € 27.7 million).
Similar as in 2020, in 2021 no inventories were pledged as security for liabilities.
• Trade receivables and bills of exchange received
At year-end 2021, the higher amount is linked to the higher sales prices in Q4 2021 compared to Q4 of last year. The carrying amount of the trade receivables involved in the factoring program amounted to € 224.8 million (2020: 152.3 million).
The following table presents the movements in the allowance for bad debt on trade receivables. No allowance was posted for bills of exchange received.
| 2020 in thousands of € |
2021 |
|---|---|
| Gross amount 682 152 |
833 840 |
| Allowance for bad debts (impaired) -40 494 |
-41 899 |
| specifi c allowance for bad debts -35 097 |
-35 099 |
| general allowance for bad debts -5 397 |
-6 801 |
| Net carrying amount 641 658 |
791 940 |
More information about allowances of receivables is provided in the following table:
| 2020 in thousands of € |
2021 |
|---|---|
| As at 1 January -41 687 |
-40 494 |
| Losses recognized in current year -5 350 |
-3 009 |
| Losses recognized in prior years - amounts used 1 596 |
1 079 |
| Losses recognized in prior years - reversal of amounts not used 3 354 |
3 343 |
| New consolidations -81 |
— |
| Exchange gains and losses (-) 1 550 |
-2 817 |
| Other 124 |
— |
| As at 31 December -40 494 |
-41 899 |
In accordance with the IFRS 9 'expected credit loss' model for fi nancial 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 fi nancial derivatives'.
• Trade payables increased signifi cantly as a result of the organic evolution which goes hand in hand with the higher material prices for the purchased wire rod in Q4 and exceptionally high capex spend in Q4.
| 2020 in thousands of € |
2021 |
|---|---|
| As at 1 January 111 615 |
101 330 |
| Increase or decrease -4 792 |
51 532 |
| Write-downs (-) and write-down reversals — |
158 |
| New consolidations 192 |
— |
| Exchange gains and losses -5 685 |
3 985 |
| As at 31 December 101 330 |
157 005 |
Other receivables mainly related to income taxes (€ 43.2 million (2020: € 35.1 million)), VAT and other taxes (€ 74.6 million (2020: € 52.1 million)), loans to employees (€ 3.4 million (2020: € 3.7 million)) and dividends from joint ventures (€ 27.5 million (2020: € 2.1 million)). See also note 6.21. 'Tax positions'. Write-downs of other receivables are included in note 5.5. 'Other fi nancial income and expense'.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Cash & cash equivalents | 940 416 | 677 270 |
| Short-term deposits | 50 077 | 80 058 |
For the changes in cash & cash equivalents, please refer to the consolidated cash fl ow statement and to note 7.1. 'Notes to the cash fl ow statement'. Cash equivalents and shortterm deposits did not include any listed securities or equity instruments at the balance sheet date.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Financial receivables and cash guarantees | 7 707 | 6 475 |
| Advances paid | 18 594 | 19 988 |
| Derivatives (cf.note 7.2.) | 5 250 | 1 416 |
| Deferred charges and accrued income | 10 346 | 14 394 |
| As at 31 December | 41 898 | 42 272 |
The fi nancial receivable s and cash guarantees mainly related to receivables from the dispos al of the majority stake in the rubber reinforcement plant Sumaré (Brazil) in 2017 (€ 4.6 million, same amount as in 2020) and various cash guarantees (€ 0.5 million (2020: € 1.0 million)).
The advances paid mainly related to advance payments in the context of large capex projects and advance payments for deliveries of wire rod.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| As at 1 January | 466 | 6 740 |
| Increases and decreases (-) | 6 468 | -5 264 |
| Exchange gains and losses | -193 | 327 |
| As at 31 December | 6 740 | 1 803 |
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Property, plant and equipment | 6 740 | 1 803 |
| Total assets classifi ed as held for sale | 6 740 | 1 803 |
| Total liabilities associated with assets classifi ed as held for sale | — | — |
The change in assets classifi ed as held for sale mainly included the sale of the buildings in Canada following the closure of the manufacturing plant in Pointe-Claire (€ -6.1 million) and the classifi cation as held for sale of the property in Ingelmunster (Belgium) following the discontinuation of the operations, together with the land of Bridon-Bekaert Scanrope AS (Sweden) (€ +1.3 million).
As at 31 December 2021, 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.
| Issued capital | 2020 | 2021 | ||||
|---|---|---|---|---|---|---|
| in thousands of € | Nominal value | Number of shares | Nominal value | Number of shares | ||
| 1 | As at 1 January | 177 793 | 60 408 441 | 177 812 | 60 414 841 | |
| Movements in the year | ||||||
| Issue of new shares | 19 | 6 400 | 110 | 37 420 | ||
| As at 31 December | 177 812 | 60 414 841 | 177 922 | 60 452 261 | ||
| 2 | Structure | |||||
| 2.1 | Classes of ordinary shares | |||||
| Ordinary shares without par value | 177 812 | 60 414 841 | 177 922 | 60 452 261 | ||
| 2.2 | Registered shares | 22 502 452 | 22 841 937 | |||
| Dematerialized shares | 37 912 389 | 37 610 324 | ||||
| Authorized capital not issued | 176 000 | 176 000 |
A total of 37 420 subscription rights were exercised under the Company's SOP 2005-2009 stock option plan in 2021, requiring the issue of a total of 37 420 new shares of the Company.
On 31 December 2020, the Company held 3 809 534 own shares. Of these 3 809 534 own shares, a total of 620 474 shares were transferred (i) to (former) employees for purpose of the exercise of stock options under SOP 2010-2014, SOP 2015-2017 and SOP2, (ii) to (former) BGE members for purpose of the personal shareholding requirement, and (iii) to the Chairman and other non-executive Directors as part of their remuneration (see chapter shares). No own shares were cancelled. On 3 September 2021 Bekaert announced that it had entered into a liquidity agreement with Kepler Cheuvreux. This agreement provides for the purchase and sale by Kepler Cheuvreux of Bekaert shares on the regulated market of Euronext Brussels and the program started on 10 September 2021 for a 12-month renewable period. 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. Including the transactions exercised under the liquidity agreement with Kepler Cheuvreux, the balance of own shares held by the Company on 31 December 2021 was 3 145 446.
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:
| Exercise price | Number of options | First exercise | Last exercise | |||||
|---|---|---|---|---|---|---|---|---|
| Date o ered | Date granted | (in €) | Granted | Exercised | Forfeited | Outstanding | period | period |
| 21.12.2006 | 19.02.2007 | 30.175 | 37 500 | 37 500 | — | — | 22.05 - 30.06.2010 | 15.11 - 15.12.2021 |
| 20.12.2007 | 18.02.2008 | 28.335 | 30 630 | 30 630 | — | — | 22.05 - 30.06.2011 | 15.11 - 15.12.2022 |
| 17.12.2009 | 15.02.2010 | 33.990 | 49 500 | 5 000 | 44 500 | — | 22.05 - 30.06.2013 | 15.11 - 15.12.2019 |
| 117 630 | 73 130 | 44 500 | — |
| Number of subscription rights Date of issue of Exercise price |
First exercise | Last exercise | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Date o ered | Date granted | subscription rights | (in €) | Granted | Exercised | Forfeited | Outstanding | period | period |
| 22.12.2005 | 20.02.2006 | 22.03.2006 | 23.795 | 190 698 | 190 683 | 15 | — | 22.05 - 30.06.2009 | 15.11 - 15.12.2020 |
| 21.12.2006 | 19.02.2007 | 22.03.2007 | 30.175 | 153 810 | 153 210 | 600 | — | 22.05 - 30.06.2010 | 15.11 - 15.12.2021 |
| 20.12.2007 | 18.02.2008 | 22.04.2008 | 28.335 | 215 100 | 176 000 | 12 700 | 26 400 | 22.05 - 30.06.2011 | 15.11 - 15.12.2022 |
| 17.12.2009 | 15.02.2010 | 08.09.2010 | 33.990 | 225 450 | 69 600 | 155 850 | — | 22.05 - 30.06.2013 | 15.11 - 15.12.2019 |
| 785 058 | 589 493 | 169 165 | 26 400 |
| Date | Date | Exercise price | Number of options | Last exercise | ||||
|---|---|---|---|---|---|---|---|---|
| o ered | granted | (in €) | Granted | Exercised | Forfeited | Outstanding | First exercise period |
period |
| 16.12.2010 | 14.02.2011 | 77.000 | 360 925 | — | 360 925 | — | 28.02 - 13.04.2014 | Mid Nov.- 15.12.2020 |
| 22.12.2011 | 20.02.2012 | 25.140 | 287 800 | 285 200 | 2 600 | — | 27.02 - 12.04.2015 | Mid Nov. - 21.12.2021 |
| 20.12.2012 | 18.02.2013 | 19.200 | 267 200 | 232 000 | 2 700 | 32 500 | End Feb. - 10.04.2016 |
Mid Nov. - 19.12.2022 |
| 29.03.2013 | 28.05.2013 | 21.450 | 260 000 | 203 800 | — | 56 200 | End Feb. - 09.04.2017 |
End Feb. - 28.03.2023 |
| 19.12.2013 | 17.02.2014 | 25.380 | 373 450 | 302 850 | 2 400 | 68 200 | End Feb. - 09.04.2017 |
Mid Nov. - 18.12.2023 |
| 18.12.2014 | 16.02.2015 | 26.055 | 349 810 | 187 600 | 18 510 | 143 700 | End Feb. - 08.04.2018 |
Mid Nov. - 17.12.2024 |
| 1 899 185 | 1 211 450 | 387 135 | 300 600 |
| Date | Date | Exercise price | Number of options | Last exercise | ||||
|---|---|---|---|---|---|---|---|---|
| o ered | granted | (in €) | Granted | Exercised | Forfeited | Outstanding | First exercise period |
period |
| 17.12.2015 | 15.02.2016 | 26.375 | 227 250 | 100 500 | 28 250 | 98 500 | 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 | 173 144 | 83 750 | 469 156 |
| 2020 | 2021 | |||
|---|---|---|---|---|
| SOP2 Stock Option Plan | Number of options | Weighted average exercise price (in €) |
Number of options | Weighted average exercise price (in €) |
| Outstanding as at 1 January | 29 320 | 28.963 | 29 320 | 28.963 |
| Exercised during the year | — | — | -29 320 | 28.963 |
| Outstanding as at 31 December | 29 320 | 28.963 | — | — |
| 2020 | 2021 | |||
|---|---|---|---|---|
| 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 | 70 220 | 28.156 | 63 820 | 28.594 |
| Exercised during the year | -6 400 | 23.795 | -37 420 | 28.776 |
| Outstanding as at 31 December | 63 820 | 28.594 | 26 400 | 28.335 |
| 2020 | 2021 | |||
|---|---|---|---|---|
| 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 | 1 025 083 | 39.653 | 700 058 | 24.488 |
| Forfeited during the year | -295 725 | 77.000 | — | — |
| Exercised during the year | -29 300 | 25.033 | -399 458 | 24.630 |
| Outstanding as at 31 December | 700 058 | 24.488 | 300 600 | 24.300 |
| 2020 | 2021 | |||
|---|---|---|---|---|
| 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 | 711 675 | 33.863 | 640 800 | 33.769 |
| Forfeited during the year | -70 875 | 34.721 | — | — |
| Exercised during the year | — | — | -171 644 | 29.860 |
| Outstanding as at 31 December | 640 800 | 33.769 | 469 156 | 35.198 |
| 2020 in years |
2021 |
|---|---|
| SOP2 1.6 |
0.0 |
| SOP 2005-2009 1.8 |
1.0 |
| SOP 2010-2014 3.0 |
2.2 |
| SOP 2015-2017 6.0 |
5.1 |
The weighted average share price at the date of exercise in 2021 was € 28.96 for the SOP2 options (2020: n/a), € 24.63 for the SOP 2010-2014 options (2020: € 25.03), € 29.86 for the SOP 2015-2017 options (2020: n/a) and € 28.78 for the SOP 2005-2009 subscription rights (2020: € 23.80). 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 off er, and (ii) the last closing price preceding the date of the off er. 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 off ered 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 off ering 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 off er. 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 fi ve years in favor of the persons who were plan benefi ciaries and subject to Belgian income tax at the time such extension was off ered.
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. For the tranches that entailed an expense in the current or prior period, inputs and outcome of this pricing model are detailed below:
| Pricing model details - Stock option plan 2015-2017 | Granted in February 2016 |
Granted in February 2017 |
Granted in February 2018 |
|---|---|---|---|
| Inputs to the model | |||
| Share price at grant date (in €) | 27.25 | 39.39 | 37.40 |
| Exercise price (in €) | 26.38 | 39.43 | 34.60 |
| Expected volatility | 39% | 39% | 39% |
| Expected dividend yield | 3% | 3% | 3% |
| Vesting period (years) | 3.00 | 3.00 | 3.00 |
| Contractual life (years) | 10 | 10 | 10 |
| Employee exit rate | 3% | 3% | 3% |
| Risk-free interest rate | 0.05% | -0.18% | 0.08% |
| Exercise factor | 1.40 | 1.40 | 1.40 |
| Outcome of the model | |||
| Fair value (in €) | 7.44 | 10.32 | 10.61 |
| Outstanding options | 98 500 | 226 056 | 144 600 |
The model allows for the eff ects of early exercise through an exercise factor. An exercise factor of 1.40 stands for the assumption that the benefi ciaries exercise the options and the subscription rights after the vesting date when the share price exceeds the exercise price by 40% (on average).
During 2021, no options (2020: no options) were granted under SOP 2015-2017. The Group has recorded no expense against equity (2020: € 0.7 million) for the options granted, based on their fair value and vesting period.
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 entitling the benefi ciary will be granted Performance Shares: during 2015, 2016 and 2017 subject to the conditions of the Performance Share Plan 2015-2017 and in 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 . 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 | ||||||
|---|---|---|---|---|---|---|
| Date granted | Granted | Forfeited | Expired | Outstanding | Expiry date | |
| PSP 2015-2017 | 21.12.2017 | 55 250 | 4 900 | 50 350 | — | 31.12.2020 |
| PSP 2018-2020 | 15.02.2019 | 178 233 | 42 210 | — | 136 023 | 31.12.2021 |
| PSP 2018-2020 | 26.07.2019 | 35 663 | 3 885 | — | 31 778 | 31.12.2021 |
| PSP 2018-2020 | 21.01.2020 | 182 900 | 43 290 | — | 139 610 | 31.12.2022 |
| PSP 2018-2020 | 17.08.2020 | 12 580 | 713 | — | 11 867 | 31.12.2022 |
| PSP 2018-2020 | 15.01.2021 | 144 708 | 14 047 | — | 130 661 | 31.12.2023 |
| PSP 2018-2020 | 19.08.2021 | 15 101 | — | — | 15 101 | 31.12.2023 |
| PSP 2018-2020 | 09.09.2021 | 7 966 | — | — | 7 966 | 31.12.2023 |
| 632 401 | 109 045 | 50 350 | 473 006 |
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 of the Performance Share Units under the PSP 2015-2017 is determined using a binomial pricing model. Inputs and outcome of the pricing model are detailed below:
| Pricing model details - Performance Share Plan | December 2017 |
|---|---|
| Inputs to the model | |
| Share price at grant date (in €) | 34.60 |
| Expected volatility | 39% |
| Expected dividend yield | 3% |
| Vesting period (years) | 3.00 |
| Employee exit rate | 3% |
| Risk-free interest rate | -0.46% |
| Outcome of the model | |
| Fair value (years) | 40.19 |
| Outstanding PSP Units | — |
Granted in
Under the PSP 2015-2017, the Group has recorded no expense against equity (2020: € 0.6 million) for the Performance Share Units granted, based on their fair value and vesting period.
In 2021, on 15 January an off er of 144 708 equity settled performance share units, on 19 August an off er of 15 101 equity settled performance share units and on 9 September an off er of 7 966 equity settled performance share units were made under the terms of the PSP 2018-2020 (2020: on 21 January an off er of 182 900 equity settled performance share units and on 17 August an off er of 12 580). The fair value of the Performance Share Units under the terms of the PSP 2018-2020 plan is equal to the share price at grant date (15 January 2021: € 29.14, 19 August 2021: € 39.74 and 9 September 2021: € 38.44 (21 January 2020: € 25.14 and 17 August 2020: € 16.92)), since the performance conditions are non-market conditions (Underlying EBITDA and operational cash fl ow ). The grant in 2021 represented a fair value of € 5.1 million (2020: € 4.8 million). The Group has recorded an expense against equity of € 14.8 million in 2021 (2020: € 4.7 million).
| 2020 | 2021 | |||
|---|---|---|---|---|
| PSP 2015-2017 | Number of units | Weighted average exercise price (in €) |
Number of units | Weighted average exercise price (in €) |
| Outstanding as at 1 January | 50 950 | 40.19 | 0 | 0 |
| Forfeited during the year | -600 | 40.19 | 0 | 0 |
| Expired during the year | -50 350 | 40.19 | 0 | 0 |
| Outstanding as at 31 December | 0 | 0 | 0 | 0 |
| 2020 | 2021 | |||
|---|---|---|---|---|
| PSP 2018-2020 | Number of units | Weighted average exercise price (in €) |
Number of units | Weighted average exercise price (in €) |
| Outstanding as at 1 January | 206 621 | 23.791 | 390 631 | 24.185 |
| Granted during the year | 195 480 | 24.058 | 167 775 | 30.536 |
| Forfeited during the year | -11 470 | 24.344 | -85 400 | 25.217 |
| Outstanding as at 31 December | 390 631 | 24.185 | 473 006 | 26.251 |
In March 2016, the Company introduced a Personal Shareholding Requirement Plan for the Chief Executive Offi cer 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 socalled 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.
| Number of units | |||||
|---|---|---|---|---|---|
| Date acquired | Acquired | Matched | Forfeited | Outstanding | Expiry date |
| 31.03.2017 | 14 668 | 13 428 | 1 240 | — | 31.12.2019 |
| 01.09.2017 | 2 523 | 2 523 | — | — | 31.12.2019 |
| 14.05.2018 | 15 251 | 14 191 | 1 060 | — | 31.12.2020 |
| 31.03.2020 | 10 766 | — | 1 000 | 9 766 | 31.12.2022 |
| 31.03.2021 | 9 112 | — | — | 9 112 | 31.12.2023 |
| 52 320 | 30 142 | 3 300 | 18 878 |
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 2020 |
To be matched in December 2022 |
To be matched in December 2023 |
|
|---|---|---|---|
| Pricing model details - Personal Shareholding Requirement plan | Start date May 2018 |
Start date March 2020 |
Start date March 2021 |
| Inputs to the model | |||
| Share price at start date (in €) | 34.00 | 14.98 | 35.68 |
| Expected volatility | 39% | 36% | 36% |
| Expected dividend yield | 3% | 3% | 3% |
| Vesting period (years) | 2.60 | 2.75 | 2.75 |
| Employee exit rate | 4.38% | 0% | 0% |
| Risk-free interest rate | -0.39% | -0.47% | -0.47% |
| Outcome of the model | |||
| Fair value (in €) | 27.95 | 13.81 | 32.99 |
| Outstanding PSR Units | — | 9 766 | 9 112 |
The matching shares to be granted represented a fair value of € 0.4 million (2020: € 0.1 million). The Group has recorded an expense against equity of € 0.1 million (2020: € 0.2 million) for the matching shares to be granted, based on their fair value and vesting period.
| Number of units - PSR 2020 |
2021 |
|---|---|
| Outstanding as at 1 January 13 661 |
10 766 |
| Matched during the year -13 661 |
— |
| Forfeited during the year | — -1 000 |
| Acquired during the year 10 766 |
9 112 |
| Outstanding as at 31 December 10 766 |
18 878 |
The fi xed 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 fi xed 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 2021 (€ 39.37) (being 29 May 2020 : € 18.43 ). This stock grant vested immediately. The stock grant represented a fair value of € 0.4 million (2020: € 0.2 million). The Group has recorded an expense against equity of € 0.4 million (2020: € 0.2 million).
| 2020 in thousands of € |
2021 |
|---|---|
| Revaluation reserve for non-consolidated equity investments -11 867 |
-5 986 |
| Remeasurement reserve for defi ned-benefi t plans -63 543 |
-16 790 |
| Deferred tax reserve 26 785 |
23 464 |
| Other reserves -48 626 |
688 |
| Cumulative translation adjustments -227 823 |
-137 183 |
| Total other Group reserves -276 448 |
-136 495 |
| Treasury shares -106 148 |
-95 517 |
| Retained earnings 1 614 781 |
1 984 791 |
In the following sections of this disclosure, the movements in the Group reserves and in retained earnings are presented and commented.
| 2020 in thousands of € |
2021 |
|---|---|
| As at 1 January -12 117 |
-11 867 |
| Fair value changes 250 |
5 882 |
| As at 31 December -11 867 |
-5 986 |
| Of which | |
| Investment in Xinyu Xinsteel Metal Products Co Ltd -1 951 |
— |
| Investment in Shougang Concord Century Holdings Ltd -10 009 |
-6 078 |
| Other investments 92 |
92 |
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. The fair value of the investment in Xinyu Xinsteel Metal Products Co Ltd is determined using a discounted cash fl ow model based on the company's most recent business plan for 2022-2026 . See also note 6.6. 'Other non-current assets'.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| As at 1 January | -67 017 | -63 543 |
| Remeasurements of the period | 3 474 | 46 753 |
| As at 31 December | -63 543 | -16 790 |
The remeasurements originate from using diff erent actuarial assumptions in calculating the defi ned-benefi t obligation, from diff erences 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 benefi t obligations').
| in thousands of € | 2020 | 2021 |
|---|---|---|
| As at 1 January | 28 104 | 26 785 |
| Deferred taxes relating to other comprehensive income | -1 319 | -3 321 |
| As at 31 December | 26 785 | 23 464 |
Deferred taxes relating to other comprehensive income are also recognized in OCI (see note 6.7. 'Deferred tax assets and liabilities').
| in thousands of € | 2020 | 2021 |
|---|---|---|
| As at 1 January | -113 964 | -227 823 |
| Exchange diff erences on dividends declared | -2 244 | -2 463 |
| Recycled to income statement - relating to disposed entities or step acquisitions | — | 1 270 |
| Movements arising from exchange rate fl uctuations | -111 615 | 91 833 |
| As at 31 December | -227 823 | -137 184 |
| Of which relating to entities with following functional currencies | ||
| Chinese renminbi | 88 513 | 145 149 |
| US dollar | 12 453 | 30 502 |
| Brazilian real | -220 231 | -218 372 |
| Chilean peso | -21 028 | -28 753 |
| Venezuelan bolivar soberano ¹ | -59 691 | -59 691 |
| Indian rupee | -10 319 | -7 625 |
| Czech koruna | 8 616 | 11 291 |
| British pound | -13 974 | 2 115 |
| Russian ruble | -7 984 | -6 463 |
| Romenian leu | -3 296 | -3 991 |
| Other currencies | -881 | -1 345 |
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.
The swings in CTA refl ected both the exchange rate evolution and the relative importance of the net assets denominated in the presented currencies.
| 2020 in thousands of € |
2021 |
|---|---|
| As at 1 January -107 463 |
-106 148 |
| Shares purchased — |
-11 570 |
| Shares sold 1 314 |
28 988 |
| Price diff erence on shares sold — |
-6 787 |
| As at 31 December -106 148 |
-95 517 |
The number of shares on hand were suffi cient, both to anticipate any dilution and to hedge the cash fl ow risk on share-based payment plans. In 2021 309 242 additional shares were bought back including the transactions exercised under the liquidity agreement with Kepler Cheuvreux (2020: nil). 973 330 treasury shares were sold to the benefi ciaries of the sharebased payment plans of the Group and under the liquidity agreement with Kepler Cheuvreux (2020: 63 541). Treasury shares are accounted for using the FIFO principle (fi rst-in, fi rstout). 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 | 2020 | 2021 |
| As at 1 January (as reported) | 1 492 028 | 1 614 781 | |
| Equity-settled share-based payments | 6 | 8 556 | 15 261 |
| Result for the period attributable to equity holders of Bekaert | 134 687 | 406 977 | |
| Dividends | -19 787 | -56 795 | |
| Equity reclassifi cation | -6 | — | |
| Other comprehensive income - other | 1 | — | |
| Treasury shares transactions | 6.13 | -231 | 6 787 |
| Changes in Group structure | -467 | -2 220 | |
| As at 31 December | 1 614 781 | 1 984 791 |
Treasury shares transactions (€ +6.8 million vs € -0.2 million in 2020) represented the diff erence between the proceeds and the FIFO book value of the shares that were sold. Changes in Group structure in 2021 related to the merger of Proalco SAS (subsidiary of Bekaert) with the steel wire activities of Almasa SA, b oth located in Colombia., while in 2020 this related to the purchase of non-controlling interests (NCI) in Bekaert Slatina SRL.
| 2020 in thousands of € |
2021 |
|---|---|
| As at 1 January 96 430 |
87 175 |
| Changes in Group structure -8 503 |
3 601 |
| Share of the result for the period 13 350 |
43 643 |
| Share of other comprehensive income excluding CTA -677 |
422 |
| Dividend pay-out -8 270 |
-6 649 |
| Capital increases — |
3 975 |
| Exchange gains and losses (-) -5 155 |
-1 196 |
| As at 31 December 87 175 |
130 971 |
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 change in 2020 related to the purchase of the non-controlling interests ('NCI') in Bekaert Slatina SRL, the carrying amount of which amounted to € +8.5 million at the transaction date.
The share in the result of the period for entities in which NCI are held, improved signifi cantly. 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 fi nancial statements to evaluate (a) the nature and risks associated with its interests in other entities, and (b) the eff ects of those interests on its fi nancial position, fi nancial performance and cash fl ows. Bekaert has many partnerships across the world, most entities of which would not individually meet any reasonable materiality criterion. Therefore, the Group has identifi ed 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 eff ects 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 | 2020 2021 |
|---|---|---|
| BBRG entities | ||
| Inversiones BBRG Lima SA | Peru | 3.9% |
| 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% |
| Grating Peru SAC | Peru 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 Costa Rica SA | Costa Rica 41.6% |
|
| 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 20.0% |
60.0% |
| Vicson SA | Venezuela 20.0% |
20.0% |
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 € | 2020 | 2021 | 2020 | 2021 |
| SWS entities Chile and Peru | 9 602 | 35 633 | 72 282 | 100 872 |
| SWS entities Andina region | 2 156 | 6 075 | 11 474 | 21 858 |
| Consolidation adjustments on material NCI | 181 | -651 | -28 184 | -27 573 |
| Contribution of material NCI to consolidated NCI | 11 939 | 41 057 | 55 572 | 95 157 |
| Other NCI | 1 411 | 2 586 | 31 603 | 35 814 |
| Total consolidated NCI | 13 350 | 43 643 | 87 175 | 130 971 |
The following tables show concise basic statements of the non-wholly owned groups of entities.
| 2020 in thousands of € |
2021 |
|---|---|
| Current assets 218 034 |
382 128 |
| Non-current assets 121 990 |
119 973 |
| Current liabilities 140 264 |
247 022 |
| Non-current liabilities 62 648 |
60 402 |
| Equity attributable to equity holders of Bekaert 64 830 |
93 805 |
| Equity attributable to NCI 72 282 |
100 872 |
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Sales | 433 751 | 689 790 |
| Expenses | -414 334 | -619 952 |
| Result for the period | 19 417 | 69 838 |
| Result for the period attributable to equity holders of Bekaert | 9 815 | 34 205 |
| Result for the period attributable to NCI | 9 602 | 35 633 |
| Other comprehensive income for the period | -7 360 | -8 946 |
| OCI attributable to equity holders of Bekaert | -3 270 | -5 302 |
| OCI attributable to NCI | -4 090 | -3 644 |
| Total comprehensive income for the period | 12 057 | 60 892 |
| Total comprehensive income attributable to equity holders of Bekaert | 6 545 | 28 903 |
| Total comprehensive income attributable to NCI | 5 512 | 31 989 |
| Dividends paid to NCI | -5 340 | -3 475 |
| Net cash infl ow (outfl ow) from operating activities | 60 491 | -4 351 |
|---|---|---|
| Net cash infl ow (outfl ow) from investing activities | -4 228 | -8 402 |
| Net cash infl ow (outfl ow) from fi nancing activities | -28 441 | 22 430 |
| Net cash infl ow (outfl ow) | 27 822 | 9 676 |
Signifi cant increase in sales (+59%) resulting in better profi tability in absolute terms. Building further on the profi t restoration initiatives started last year, profi tability as percentage was increased once more (underlying EBIT margin on sales at 15.0% compared to (7.7% last year).
The strong increase in EBITDA was off set by the working capital evolution. As a result the Net Debt position ended per year-end much higher than last year.
| 2020 in thousands of € |
2021 |
|---|---|
| Current assets 75 125 |
150 291 |
| Non-current assets 40 417 |
52 206 |
| Current liabilities 74 998 |
143 778 |
| Non-current liabilities 7 553 |
11 067 |
| Equity attributable to equity holders of Bekaert 21 517 |
25 795 |
| Equity attributable to NCI 11 474 |
21 858 |
| 2020 in thousands of € |
2021 |
|---|---|
| Sales 157 487 |
237 878 |
| Expenses -152 300 |
-224 404 |
| Result for the period 5 188 |
13 473 |
| Result for the period attributable to equity holders of Bekaert 3 032 |
7 398 |
| Result for the period attributable to NCI 2 156 |
6 075 |
| Other comprehensive income for the period -3 325 |
-254 |
| OCI attributable to equity holders of Bekaert -2 274 |
-203 |
| OCI attributable to NCI -1 052 |
-51 |
| Total comprehensive income for the period 1 863 |
13 220 |
| Total comprehensive income attributable to equity holders of Bekaert 758 |
7 196 |
| Total comprehensive income attributable to NCI 1 104 |
6 024 |
| Dividends paid to NCI -2 060 |
-3 137 |
| Net cash infl ow (outfl ow) from operating activities 14 148 |
28 707 |
| Net cash infl ow (outfl ow) from investing activities -3 635 |
-4 940 |
| Net cash infl ow (outfl ow) from fi nancing activities -5 295 |
-13 089 |
| Net cash infl ow (outfl ow) 5 218 |
10 678 |
Sales in 2021 were 51.0% higher compared to last year. In addition the underlying EBIT margin on sales further improved from 8.6% last year to 9.5% this year. Net working capital monitoring helped to increase the cash fl ow from operating activities, resulting in a further decrease 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. In the second half of the year, wire rod could be purchased locally. Though payment terms for these purchases are very short, this represents better profi tability and cash fl ow going forward. Furthermore, the access to US dollar has become more fl exible 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 € 0.4 million at 31 December 2021 (compared to € 0.9 million at 31 December 2020).
The total net liabilities for employee benefi t obligations, which amounted to € 235.0 million as at 31 December 2021 (€ 262.7 million as at year-end 2020), are as follows:
| 2020 in thousands of € |
2021 |
|---|---|
| Liabilities for | |
| Post-employment defi ned-benefi t plans 118 892 |
71 363 |
| Other long-term employee benefi ts 4 700 |
4 821 |
| Cash-settled share-based payment employee benefi ts 2 556 |
7 150 |
| Short-term employee benefi ts 116 014 |
160 699 |
| Termination benefi ts 38 580 |
10 786 |
| Total liabilities in the balance sheet 280 742 |
254 818 |
| of which | |
| Non-current liabilities 130 948 |
77 659 |
| Current liabilities 149 793 |
177 159 |
| Assets for | |
| Defi ned-benefi t pension plans -18 082 |
-19 847 |
| Total assets in the balance sheet -18 082 |
-19 847 |
| Total net liabilities 262 660 |
234 971 |
In accordance with IAS 19, 'Employee benefi ts', plans are classifi ed as either defi ned-contribution plans or defi ned-benefi t plans.
For defi ned-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 defi ned-contribution pension plans are by law subject to minimum guaranteed rates of return. Pension legislation defi nes 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 defi ned-contribution plans are reported as defi ned-benefi t obligations at year-end, whereby an actuarial valuation was performed.
Bekaert participates in a multi-employer defi ned-benefi t plan in the Netherlands funded through the Pensioenfonds Metaal & Techniek ('PMT'). This plan is treated as a defi nedcontribution plan because no suffi cient information is available with respect to the plan assets attributable to Bekaert to apply defi ned-benefi t accounting. Contributions for the plan amounted to € 1.6 million (2020: € 1.9 million). Employer contributions are set every fi ve years 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 fi nancing rules specify that an employer is not obliged to pay any further contributions in respect of previously accrued benefi ts. The funded status of PMT was 106.1% at 31 December 2021 (2020: 95.4%). During the period 2015 to 2022 there is no obligation for participating companies to fund any defi cit of PMT (nor to receive any surplus).
| Defi ned-contribution plans | ||
|---|---|---|
| in thousands of € | 2020 | 2021 |
| Expenses recognized | 15 534 | 14 420 |
Several Bekaert companies operate retirement benefi t and other post-employment benefi t plans. These plans generally cover all employees and provide benefi ts which are related to salary and length of service.
The latest actuarial valuations under IAS 19 were carried out as of 31 December 2021 for all signifi cant post-employment defi ned-benefi t plans by independent actuaries. The Group's largest defi ned-benefi t obligations were in Belgium, the United States and the United Kingdom. They accounted for 90.0% (2020: 89.1%) of the Group's defi ned-benefi t obligations and 99.6% (2020: 99.7%) of the Group's plan assets.
The funded plans in Belgium mainly related to retirement plans representing a defi ned-benefi t obligation of € 216.5 million (2020: € 229.4 million) and € 213.4 million assets (2020: € 205.7 million). This is including the related plans funded through a group insurance.
The traditional defi ned-benefi t plans foresee in a lump sum payment upon retirement and in risk benefi ts 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 profi les. Statement of investment principles and funding policy are derived from this study. The purpose is to have a well-diversifi ed 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 (defi ned-benefi t obligation € 8.0 million (2020: € 8.4 million)) which are not externally funded. An amount of € 4.6 million (2020: € 3.4 million) related to employees in active service who have not yet entered into any pre-retirement agreement.
The funded plans in the United States mainly related to pension plans representing a defi ned-benefi t obligation of € 128.1 million (2020: € 127.4 million) and assets of € 124.4 million (2020: € 104.8 million). The plans provide for benefi ts for the life of the plan members but have been closed for new entrants. Plan assets are invested, in fi xed-income funds and in equities. Funding policy targets to be suffi ciently funded in terms of Pension Protection Act requirements and thus to avoid benefi t restrictions or at-risk status of the plans.
Unfunded plans included medical care plans (defi ned-benefi t obligation € 2.4 million (2020: € 3.8 million)).
The funded plan in the United Kingdom related to a pension scheme closed for new entrants and further accrual representing a defi ned-benefi t obligation of € 93.6 million (2020: € 92.0 million) and assets of € 113.5 million (2020: € 110.1 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 benefi ciaries and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefi ts.
The defi ned-benefi t obligation solely includes benefi ts 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 70% of the liabilities are attributable to deferred vested members and 30% to pensioners (2020: 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 qualifi ed actuary showed a surplus of € 7.4 million. As a consequence, the company is no longer required to pay contributions into the scheme. Administration costs are reported separately from IAS 19.
The amounts recognized in the balance sheet are as follows:
| 2020 in thousands of € |
2021 |
|---|---|
| Belgium | |
| Present value of funded obligations 229 377 |
216 562 |
| Fair value of plan assets -205 728 |
-213 440 |
| Defi cit / surplus (-) of funded obligations 23 649 |
3 122 |
| Present value of unfunded obligations 8 365 |
7 994 |
| Total defi cit / surplus (-) of obligations 32 014 |
11 116 |
| United States | |
| Present value of funded obligations 127 361 |
128 125 |
| Fair value of plan assets -104 847 |
-124 372 |
| Defi cit / surplus (-) of funded obligations 22 514 |
3 753 |
| Present value of unfunded obligations 8 975 |
7 556 |
| Total defi cit / surplus (-) of obligations 31 489 |
11 309 |
| United Kingdom | |
| Present value of funded obligations 91 997 |
93 635 |
| Fair value of plan assets -110 079 |
-113 482 |
| Defi cit / surplus (-) of funded obligations -18 082 |
-19 847 |
| Present value of unfunded obligations — |
— |
| Total defi cit / surplus (-) of obligations -18 082 |
-19 847 |
| Other | |
| Present value of funded obligations 1 633 |
2 545 |
| Fair value of plan assets -1 425 |
-1 615 |
| Defi cit / surplus (-) of funded obligations 208 |
930 |
| Present value of unfunded obligations 55 181 |
48 008 |
| Total defi cit / surplus (-) of obligations 55 389 |
48 938 |
| Total | |
| Present value of funded obligations 450 368 |
440 867 |
| Fair value of plan assets -422 079 |
-452 909 |
| Defi cit / surplus (-) of funded obligations 28 289 |
-12 042 |
| Present value of unfunded obligations 72 521 |
63 558 |
| Total defi cit / surplus (-) of obligations 100 810 |
51 516 |
The movement in the defi ned-benefi t obligation, plan assets, net liability and asset over the year were as follows:
| in thousands of € | Defi ned-benefi t obligation |
Plan assets | Net liability / asset (-) |
|---|---|---|---|
| As at 1 January 2020 | 518 600 | -408 821 | 109 778 |
| Current service cost | 16 035 | — | 16 035 |
| Past service cost | 937 | — | 937 |
| Gains (-) / losses from settlements | -3 816 | — | -3 816 |
| Interest expense / income (-) | 9 402 | -6 860 | 2 541 |
| Net benefi t expense / income (-) recognized in profi t and loss | 22 557 | -6 860 | 15 697 |
| Components recognized in EBIT | 13 155 | ||
| Components recognized in fi nancial result | 2 541 | ||
| Remeasurements | |||
| Return on plan assets, excluding amounts included in interest expense / income (-) | — | -33 773 | -33 773 |
| Gain (-) / loss from change in demographic assumptions | -1 753 | — | -1 753 |
| Gain (-) / loss from change in fi nancial assumptions | 34 728 | — | 34 728 |
| Experience gains (-) / losses | -2 | -1 697 | -1 699 |
| Changes recognized in equity | 32 973 | -35 470 | -2 497 |
| Contributions | |||
| Employer contributions / direct benefi t payments | — | -17 052 | -17 052 |
| Employee contributions | 170 | -170 | — |
| Payments from plans | |||
| Benefi t payments | -30 914 | 30 914 | — |
| Foreign-currency translation e ect | -20 497 | 15 380 | -5 116 |
| As at 31 December 2020 | 522 889 | -422 079 | 100 810 |
| in thousands of € | Defi ned-benefi t 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 | -252 | — | -252 |
| Gains (-) / losses from settlements | -87 | — | -87 |
| Interest expense / income (-) | 7 384 | -5 500 | 1 884 |
| Net benefi t expense / income (-) recognized in profi t and loss | 24 470 | -5 500 | 18 969 |
| Components recognized in EBIT | 17 085 | ||
| Components recognized in fi nancial 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 fi nancial 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 benefi t payments | — | -19 430 | -19 430 |
| Employee contributions | 148 | -148 | — |
| Payments from plans | |||
| Benefi t payments | -32 275 | 32 275 | — |
| Foreign-currency translation e ect | 15 418 | -16 900 | -1 483 |
| As at 31 December 2021 | 504 425 | -452 909 | 51 516 |
The past service cost related to changes in post-employment plans in Chile and a true-up of the past service cost triggered by the 2020 restructuring in Belgium after the 2021 implementation wave. Gains from settlements mainly related to plan the closure of the Figline site in Italy and a true-up of settlement costs triggered by the 2020 restructuring in Belgium after the 2021 implementation wave. 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.
Reimbursement rights arising from reinsurance contracts covering retirement pensions, death and disability benefi ts in Germany amounted to € 0.1 million (2020: € 0.2 million).
Estimated contributions and direct benefi t payments for 2022 are as follows:
| Estimated contributions and direct benefi t payments | |
|---|---|
| in thousands of € | 2022 |
| Pension plans | 13 190 |
| 2020 in thousands of € |
2021 |
|---|---|
| Belgium | |
| Bonds 54 808 |
55 905 |
| Equity 80 076 |
94 366 |
| Cash 920 |
4 077 |
| Insurance contracts 69 923 |
59 092 |
| Total Belgium 205 728 |
213 440 |
| United States | |
| Bonds | |
| USD Long Duration Bonds 29 765 |
36 617 |
| USD Fixed Income 4 944 |
5 842 |
| USD Guaranteed Deposit 3 191 |
4 437 |
| Equity | |
| USD Equity 42 610 |
49 690 |
| Non-USD Equity 19 026 |
20 317 |
| Real estate 5 310 |
7 470 |
| Total United States 104 847 |
124 372 |
| United Kingdom | |
| Bonds 27 929 |
35 480 |
| Derivatives 60 967 |
62 806 |
| Equity 14 576 |
13 850 |
| Cash 6 607 |
1 346 |
| Total United Kingdom 110 079 |
113 482 |
| Other | |
| Bonds 1 425 |
1 614 |
| Total Other 1 425 |
1 614 |
| Total 422 079 |
452 909 |
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-diversifi ed 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 2020 |
2021 |
|---|---|
| Discount rate 1.4% |
2.0% |
| Future salary increases 3.0% |
3.3% |
| Underlying infl ation rate 1.4% |
2.3% |
| Health care cost increases (initial) 6.8% |
6.5% |
| Health care cost increases (ultimate) 5.0% |
5.0% |
| Health care (years to ultimate rate) 7 |
6 |
The discount rate for the UK, USA and Belgium is refl ective both of the current interest rate environment and the plan's distinct liability characteristics. The plan's projected cash fl ows 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 2020 |
2021 |
|---|---|
| Belgium 0.6% |
1.0% |
| United States 2.4% |
2.8% |
| United Kingdom 1.5% |
1.9% |
| Other 2.9% |
4.7% |
This resulted into the following infl ation rates:
| Infl ation rates | 2020 | 2021 |
|---|---|---|
| Belgium | 1.5% | 1.8% |
| United States | N/A | N/A |
| United Kingdom | 2.9% | 3.3% |
| Other | 1.9% | 2.9% |
| Total | 1.4% | 2.3% |
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.
| 2020 | 2021 |
|---|---|
| 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 |
22.6 |
| 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 |
| in thousands of € | Change in assumption |
Impact on defi ned-benefi t obligation | ||
|---|---|---|---|---|
| Discount rate | -0.50% | Increase by | 29 222 | 5.8% |
| Salary growth rate | 0.50% | Increase by | 5 845 | 1.2% |
| Health care cost | 0.50% | Increase by | 104 | 0.02% |
| Life expectancy | 1 year | Increase by | 8 338 | 1.6% |
| 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 defi cit. |
|---|---|
| Changes in bond yields | A decrease in corporate bond yields will increase plan liabilities, although this will be partially off set by an increase in the value of the plans' bond holdings. |
| Salary risk | The majority of the plans' benefi t 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 benefi ts 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 defi ned-benefi t obligations were as follows:
| 2020 in years |
2021 |
|---|---|
| Belgium 13.5 |
12.5 |
| United States 12.1 |
11.5 |
| United Kingdom 19.9 |
20.0 |
| Other 11.9 |
10.3 |
| Total 14.1 |
13.4 |
Termination benefi ts are cash and other services paid to employees when their employment has been terminated.
The other long-term employee benefi ts related to service awards.
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 the same binomial pricing model as for the equity-settled share-based payments (see note 6.13. 'Ordinary shares, treasury shares and equity-settled share-based payments'). 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 off er. 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 off er, and (ii) the last closing price preceding the date of the off er.
Following inputs to the model are used for all grants: share price at balance sheet date: € 39.14 (2020: € 27.16), expected volatility of 34% (2020: 36%), expected dividend yield of 3.0% (2020: 3.0%), vesting period of 3 years, contractual life of 10 years and an exercise factor of 1.40 (2020: 1.40). 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:
| in € | Granted | Exercise price | Fair value as at 31 December 2020 |
Fair value as at 31 December 2021 |
|---|---|---|---|---|
| Grant 2012 | 21 200 | 27.63 | 3.20 | — |
| Grant 2013 | 20 900 | 22.09 | 6.58 | 17.04 |
| Grant 2014 | 36 800 | 25.66 | 5.41 | 13.72 |
| Grant 2015 | 40 200 | 25.45 | 5.86 | 13.99 |
| Grant 2016 | 20 250 | 28.38 | 5.34 | 11.91 |
| Grant 2017 | 26 375 | 38.86 | 3.79 | 7.88 |
| Grant 2018 | 16 875 | 37.06 | 4.33 | 8.76 |
| in € | Granted | Exercise price | Fair value as at 31 December 2020 |
Fair value as at 31 December 2021 |
|---|---|---|---|---|
| Grant 2012 | 19 500 | 25.14 | 4.25 | — |
| Grant 2013 | 24 500 | 19.20 | 8.43 | 19.92 |
| Exceptional grant 2013 | 10 000 | 21.45 | 7.17 | 17.69 |
| Grant 2014 | 54 800 | 25.38 | 5.57 | 13.96 |
| Grant 2015 | 44 700 | 26.06 | 5.73 | 13.42 |
| Grant 2016 | 38 500 | 26.38 | 5.85 | 13.33 |
| Grant 2017 | 53 000 | 39.43 | 3.68 | 7.85 |
| Grant 2018 | 37 500 | 34.60 | 4.68 | 9.48 |
At 31 December 2021, the total liability for the USA SAR plan amounted to € 0.4 million (2020: € 0.2 million), while the total liability for the other SAR plans amounted to € 0.5 million (2020: € 0.7 million).
The Group recorded a total income of € 0.0 million (2020: income of € 0.1 million) during the year in respect of SARs.
Certain management employees received cash-settled Performance Share Units (PSUs) entitling the benefi ciary to receive the value of Performance Share Units: during 2015, 2016 and 2017 subject to the conditions of the Performance Share Plan 2015- 2017 and in 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020. 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.
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 2015-2017 is recalculated at balance sheet date, using the same binomial pricing model as for the equity-settled share-based payments (see note 6.13. 'Ordinary shares, treasury shares and equity-settled share-based payments'). Following inputs to the model are used: share price at balance sheet date: € 39.14 (2020: € 27.16), expected volatility of 34% (2020: 36%), expected dividend yield of 3.0% (2020: 3.0%), vesting period of 3 years. Inputs for risk-free interest rates vary by grant and are based on the return of Belgian OLO's with a term equal to the maturity of the PSU grant under consideration.
The fair value of each grant under PSU 2018-2020 is equal to the share price at balance sheet date, since the performance conditions are non-market conditions (Underlying EBITDA and operational cash fl ow).
The fair value of outstanding Performance Share Units by grant is shown below:
| in € | Granted | Fair value as at 31 December 2020 |
Fair value as at 31 December 2021 |
|
|---|---|---|---|---|
| PSU 2018-2020 | Grant 2019 | 51 995 | 27.16 | — |
| PSU 2018-2020 | Grant 2020 | 45 141 | 27.16 | 39.14 |
| PSU 2018-2020 | Grant 2020 | 444 | 27.16 | 39.14 |
| PSU 2018-2020 | Grant 2021 | 4 567 | — | 39.14 |
At 31 December 2021, the total liability for the USA PSUs amounted to € 1.6 million (2020: € 0.3 million), while the total liability for the other PSUs amounted to € 4.8 million (2020: € 1.3 million).
The Group recorded a total cost of € 4.8 million (2020: cost of € 0.8 million) during the year in respect of PSUs.
Short-term employee benefi t 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.
| in thousands of € | Restructuring | Claims | Environment | Other | Total |
|---|---|---|---|---|---|
| As at 1 January 2020 | 12 155 | 8 458 | 32 488 | 2 127 | 55 227 |
| Additional provisions | 755 | 2 391 | 2 090 | 935 | 6 170 |
| Unutilized amounts released | -1 542 | -2 596 | -5 789 | -153 | -10 080 |
| Increase in present value | — | — | — | 43 | 43 |
| Charged to the income statement | -787 | -205 | -3 699 | 825 | -3 867 |
| Amounts utilized during the year | -4 148 | -1 077 | -8 766 | -169 | -14 160 |
| Transfers | -390 | -369 | 24 | 734 | — |
| Exchange gains (-) and losses | -305 | -208 | -31 | -69 | -613 |
| As at 31 December 2020 | 6 525 | 6 600 | 20 015 | 3 448 | 36 588 |
| Of which | |||||
| current | 6 467 | 3 389 | 737 | 828 | 11 421 |
| non-current - between 1 and 5 years | 58 | 3 211 | 3 988 | 2 364 | 9 621 |
| non-current - more than 5 years | — | — | 15 290 | 256 | 15 546 |
| 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 |
The decrease of the restructuring programs mainly related to the utilization of the provision for the rubber reinforcement plant in Figline (Italy).
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 land and buildings of the plant in Canada, partially off set by the utilization and release of environmental provisions linked to sites in Belgium and UK.
The decrease of other provisions mainly related to the release of provisions for law suits.
An analysis of the carrying amount of the Group's interest-bearing debt by contractual maturity is presented below:
2020
| in thousands of € | Due within 1 year | Due between 1 and 5 years |
Due after 5 years | Total |
|---|---|---|---|---|
| Interest-bearing debt | ||||
| Lease liability | 19 746 | 39 603 | 21 157 | 80 505 |
| Cash guarantees received | — | 51 | 120 | 171 |
| Credit institutions | 246 817 | 187 511 | — | 434 328 |
| Schuldschein loans | — | 298 702 | 20 933 | 319 635 |
| Bonds | — | — | 400 000 | 400 000 |
| Convertible bonds | 375 092 | — | — | 375 092 |
| Total fi nancial debt | 641 655 | 525 867 | 442 210 | 1 609 732 |
| 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 |
| Total fi nancial debt | 237 742 | 712 932 | 240 649 | 1 191 324 |
An analysis of the undiscounted outfl ows relating to the Group's fi nancial liabilities by contractual maturity is presented in note 7.2. 'Financial risk management and fi nancial derivatives'. The fi nancial debt due within one year decreased with € 403.9 million mainly due to the repayment of the convertible bond in June 2021 (€ 375.1 million at amortized cost per year-end 2020).
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 off setting 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 fi nancial risk management, we refer to note 7.2. 'Financial risk management and fi nancial de rivatives'.
Similar to all fi nancial derivative assets and liabilities, the conversion option (€ 0.03 million in 2020) embedded in the convertible bond was not included in the net debt (see note 6.19. 'Other non-current liabilities'). The table below summarizes the calculation of the net debt.
| 2020 in thousands of € |
2021 |
|---|---|
| Non-current interest-bearing debt 968 076 |
953 581 |
| Current interest-bearing debt 641 655 |
237 742 |
| Total fi nancial debt 1 609 732 |
1 191 324 |
| Non-current fi nancial receivables and cash guarantees -7 451 |
-10 192 |
| Current fi nancial receivables and cash guarantees -7 707 |
-6 475 |
| Short-term deposits -50 077 |
-80 058 |
| Cash and cash equivalents -940 416 |
-677 270 |
| Net debt 604 081 |
417 329 |
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 fi nancing activities. The qualifi cation as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash fl ow statement, the cash fl ows from long-term interest-bearing debt are analyzed between proceeds and repayments.
In 2021, other changes in fi nancial 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 eff ective interest method (€ 4.9 million). Derivatives held to hedge fi nancial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. 'Financial risk management and fi nancial derivatives'.
Acquisitions and disposals in 2020 related to the acquisition of Grating Peru SAC. Other changes in 2020 mainly related to the non-cash movements on the lease liability (€ 22.0 million) (see also note 6.4. 'Right-of-use (RoU) property, plant and equipment'), and interest accruals from amortizations on liabilities using the eff ective interest method (€ 10.7 million).
| 2020 | Non-cash changes | ||||||
|---|---|---|---|---|---|---|---|
| in thousands of € | As at 1 January | Cash fl ows | Acquisitions & disposals |
Cumulative translation adjustments |
Fair value changes | Other changes | As at 31 December |
| Financial debt | |||||||
| Long-term interest-bearing debt ¹ | 1 403 804 | -46 364 | — | -9 486 | — | 32 912 | 1 380 866 |
| Cash guarantees received | — | 175 | — | -3 | — | — | 171 |
| Lease liability | 88 253 | -25 785 | — | -3 914 | — | 21 952 | 80 505 |
| Credit institutions | 386 171 | -175 139 | — | -5 569 | — | — | 205 463 |
| Schuldschein loans | 319 368 | — | — | — | — | 267 | 319 635 |
| Bonds | 245 614 | 154 386 | — | — | — | — | 400 000 |
| Convertible bonds | 364 398 | — | — | — | — | 10 694 | 375 092 |
| Short-term interest bearing debt | 204 691 | 41 358 | 1 237 | -18 420 | — | — | 228 865 |
| Total fi nancial debt | 1 608 495 | -5 006 | 1 237 | -27 906 | — | 32 912 | 1 609 732 |
| Derivatives held to hedge fi nancial debt | |||||||
| Interest-rate swaps | 496 | — | — | — | 585 | — | 1 081 |
| Cross-currency interest-rate swaps | -3 705 | — | — | — | -1 325 | — | -5 030 |
| Other liabilities from fi nancing activities | |||||||
| Conversion derivative | 115 | — | — | — | -81 | — | 34 |
| Total liabilities from fi nancing activities | 1 605 400 | -5 006 | 1 237 | -27 906 | -820 | 32 912 | 1 605 817 |
¹ Including the current portion of non-current interest-bearing debt of € 219.5 million as at 1 January and € 412.8 million as at 31 December.
| 2021 | |||||||
|---|---|---|---|---|---|---|---|
| in thousands of € | As at 1 January | Cash fl ows | 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 fi nancial debt | 1 609 732 | -459 501 | — | 16 291 | — | 24 802 | 1 191 324 |
| Derivatives held to hedge fi nancial debt | |||||||
| Interest-rate swaps | 1 081 | — | — | — | -964 | — | 118 |
| Cross-currency interest-rate swaps | -5 030 | — | — | — | 6 675 | — | 1 645 |
| Total liabilities from fi nancing 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.
| Carrying amount | ||
|---|---|---|
| in thousands of € | 2020 | 2021 |
| Other non-current amounts payable | 150 | 142 |
| Derivatives (cf. note 7.2.) | 1 081 | 703 |
| Total | 1 231 | 844 |
The derivatives related for € 0.1 million to an interest-rate swap to hedge the variable interest in some of the Schuldschein loans (2020: € 1.1 million) and for € 0.6 million to CCIRSs (2020: none) (see notes 6.18. 'Interest-bearing debt' and 7.2. 'Financial risk management and fi nancial derivatives').
| 2020 in thousands of € |
2021 |
|---|---|
| Other amounts payable 9 939 |
9 122 |
| Derivatives (cf. note 7.2.) 1 885 |
2 324 |
| Advances received 15 682 |
24 354 |
| Other taxes 27 073 |
24 127 |
| Accruals and deferred income 9 872 |
8 322 |
| Total 64 451 |
68 249 |
The derivatives included forward-exchange contracts (€ 0.7 million (2020: € 1.6 million)) and CCIRSs (€ 1.7 million (2020: € 0.2 million)). Other taxes predominantly related to VAT payable, employment-related taxes withheld and other non-income taxes payable.
Advances received mainly related to advance payments from the Brazilian joint ventures on equipment orders at Engineering.
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 € | 2020 | 2021 |
|---|---|---|
| Tax receivables | 83 487 | 113 568 |
| Certain tax liabilities | 48 976 | 71 376 |
| Uncertain tax positions | 31 639 | 38 882 |
The certain tax liabilities include the balances of other taxes presented in the table of note '6.20. Other current liabilities'.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Operating result (EBIT) | 256 527 | 513 086 |
| Non-cash items added back to operating result (EBIT) | 216 067 | 164 256 |
| EBITDA | 472 594 | 677 342 |
| Other gross cash fl ows from operating activities | -91 535 | -140 345 |
| Gross cash fl ows from operating activities | 381 059 | 536 997 |
| Changes in operating working capital ¹ | 124 419 | -119 773 |
| Other operating cash fl ows | -556 | -32 620 |
| Cash from operating activities | 504 921 | 384 604 |
| Cash from investing activities | -31 209 | -95 924 |
| Cash from fi nancing activities | -82 741 | -567 082 |
| Net increase or decrease in cash and cash equivalents | 390 972 | -278 401 |
¹ 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 fl ow from operating activities is presented using the indirect method, whereas the direct method is used for the cash fl ows from other activities. The direct method focuses on classifying gross cash receipts and gross cash payments by category.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Non-cash items included in operating result (EBIT) | ||
| Depreciation and amortization ¹ | 202 103 | 165 774 |
| Impairment losses on assets | 13 964 | -1 518 |
| Non-cash items added back to operating result (EBIT) | 216 067 | 164 256 |
| Employee benefi ts: set-up / reversal (-) of amounts not used | 49 703 | 14 044 |
| Provisions: set-up / reversal (-) of amounts not used | -3 909 | -352 |
| CTA recycled on business disposals | — | -2 987 |
| Equity-settled share-based payments | 8 556 | 15 261 |
| Other non-cash items included in operating result (EBIT) | 54 350 | 25 966 |
| Total | 270 417 | 190 222 |
| Investing items included in operating result (EBIT) | ||
| Gains (-) and losses on business disposals (portion sold) | 705 | 170 |
| Gains (-) and losses on disposals of intangible assets + PP&E | -39 331 | -23 404 |
| Total | -38 626 | -23 234 |
| Amounts used on provisions and employee benefi t obligations | ||
| Employee benefi ts: amounts used | -36 596 | -41 503 |
| Provisions: amounts used | -14 160 | -8 837 |
| Total | -50 756 | -50 340 |
| Income taxes paid | ||
| Current income tax expense | -36 744 | -116 006 |
| Increase or decrease (-) in net income taxes payable | -19 760 | 23 269 |
| Total | -56 504 | -92 737 |
| Other operating cash fl ows | ||
| Movements in other receivables and payables | -1 225 | -27 411 |
| Other | 669 | -5 209 |
| Total | -556 | -32 620 |
¹ Including € -18.7 million (2020: € 7.3 million) write-downs / (reversals of write-downs) on inventories and trade receivables (see note 6.8. 'Operating working capital').
Gross cash fl ows from operating activities increased by € +155.9 million as a result of higher EBITDA (€ +204.7 million), higher set-up for equity-settled share-based payments (€ +6.7 million) and lower adjustment for the accounting profi t on investing items (€ +15.4 million lower), off set by a lower set-up of employee benefi t obligation (€ -35.7 million lower) and a higher cash-out from income taxes paid (€ -36.2 million higher).
The cash outfl ow from the increase in working capital, driven by the strong business growth, amounted to € -119.8 million in 2021 (2020: € +124.4 million) (see organic decrease in note 6.8. 'Operating working capital').
Other operating cash fl ows mainly related to swings in other receivables and payables not included in working capital and not arising from investing or fi nancing activities.
In 2021, € 92.7 million income taxes were paid. Most taxes were paid in China (€ 22.8 million), Chile (€ 14.8 million), Belgium (€ 12.1 million), Turkey (€ 10.7 million), Slovakia (€ 5.7 million) and Indonesia (€ 4.7 million).
The following table presents more details on selected investing cash fl ows:
| 2020 in thousands of € |
2021 |
|---|---|
| Other portfolio investments | |
| New business combinations -978 |
— |
| Other investments — |
-863 |
| Total -978 |
-863 |
| Proceeds from disposals of fi xed assets | |
| Proceeds from disposals of intangible assets — |
121 |
| Proceeds from disposals of property, plant and equipment 48 199 |
12 235 |
| Proceeds from disposals of RoU Land 3 861 |
712 |
| Total 52 135 |
36 752 |
The other investments in 2021 relate to the investment in a power generation company in India. New business combinations relate to the investments in new joint ventures in 2020.
Cash-outs from capital expenditure for property, plant and equipment increased from € 104.5 million in 2020 to € 143.8 million in 2021.
The proceeds from sales of fi xed assets in 2021 relate to the real estate sales transactions, mainly in Peru, Malaysia, Belgium and Canada. In 2020 they related to the sale of (1) Bekaert sites in Belgium, (2) land and buildings due to restructuring in Belgium and (3) the Belton, Texas factory due to the restructuring in the United States.
The following table presents more details about selected fi nancing items:
| 2020 in thousands of € |
2021 |
|---|---|
| Other fi nancing cash fl ows | |
| New shares issued following exercise of subscription rights 153 |
1 077 |
| Increase (-) or decrease in current and non-current receivables -211 |
495 |
| Increase (-) or decrease in current fi nancial assets | -46 -28 439 |
| Other fi nancial income and expenses -4 215 |
-2 879 |
| Total -4 319 |
-29 747 |
New long-term debt issued was limited to € 23.6 million in 2021 (2020: € 201.3 million, mainly related to a new retail bond). Repayments of long-term debt (€ -439.8 million) included the repayment of the convertible bond (€ -380.0 million) and refi nancing of local loans in Peru (€ -14.6 million), China (€ -12.8 million) and in Chile (€ -11.1 million). Cashouts from short-term debt amounted to € -43.3 million in 2021 (2020: cash-ins € 41.4 million). For an overview of the movements in liabilities arising from fi nancing activities, see note 6.18. 'Interest-bearing debt'.
In 2021 the treasury shares transactions amounted to € 17.4 million (2020: € 1.1 million) and consisted of mainly of the proceeds from options being exercised.
In 2020 'Sales and purchases of non-controlling interests' concerned the acquisition of the (20%) shares previously held by Continental Global Holding Netherlands BV in Bekaert Slatina SRL in Romania (€ -9.0 million). As for other fi nancing cash fl ows, cash-ins resulted from new shares issued following exercise of subscription rights (€ 1.1 million vs € 0.2 million in 2020), net receipts from loans and receivables (€ 0.5 million vs € -0.2 million in 2020) and cash-outs from current fi nancial assets, mainly short-term deposits (€ -28.4 million vs almost nil in 2020). Other fi nancial income and expenses mainly related amongst others to taxes and bank charges on fi nancial transactions (€ -4.1 million vs € -3.4 million in 2020).
The Group is exposed to risks from movements in exchange rates, interest rates and market risks that aff ect its assets and liabilities. Financial risk management within the Group aims at reducing the impact of these market risks through ongoing operational and fi nancing activities. Selected derivative hedging instruments are used depending on the assessment of risk involved. The Group mainly hedges the risks that aff ect the Group's cash fl ows. 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 fi nancial 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 fi nancial risk policy are defi ned by the Audit, Risk and Finance Committee and overseen by the Board of the Group. Group Treasury is responsible for implementing the fi nancial risk policy. This encompasses defi ning appropriate policies and setting up eff ective control and reporting procedures. The Audit, Risk and Finance Committee is regularly kept informed on the exposures .
The Group's currency risk can be split into two categories: translational and transactional currency risk.
A translational currency risk arises when the fi nancial 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 fl ows, the Group usually does n ot hedge against such risk.
The Group is exposed to transactional currency risks resulting from its operating, investing and fi nancing 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 infl ows and outfl ows for the coming three months. Signifi cant exposures and fi rm 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 fi nancing area results from fi nancial liabilities in foreign currencies. In line with its policy, Group Treasury hedges these risks using cross-currency interestrate swaps and forward exchange contracts to convert fi nancial 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.
The following table summarizes the Group's net foreign currency positions of operating, investing and fi nancing 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 infl ow in the fi rst currency. In the table, the 'Total exposure' column represents the position on the balance sheet, while the 'Total derivatives' column includes all fi nancial derivatives hedging those balance sheet positions as well as forecasted transactions.
| in thousands of € | Total exposure | Total derivatives | Open position |
|---|---|---|---|
| BRL/EUR | 2 104 | — | 2 104 |
| CZK/EUR | 11 317 | 3 908 | 15 225 |
| EUR/CNY | -27 568 | -2 500 | -30 068 |
| EUR/GBP | -4 047 | 2 464 | -1 583 |
| EUR/INR | -33 691 | 18 530 | -15 161 |
| EUR/MYR | -23 277 | — | -23 277 |
| EUR/RON | -31 373 | — | -31 373 |
| EUR/RUB | -28 520 | 21 866 | -6 654 |
| EUR/USD | -2 648 | 4 014 | 1 365 |
| IDR/USD | 2 497 | — | 2 497 |
| JPY/CNY | 5 143 | -2 554 | 2 589 |
| JPY/USD | 3 504 | -2 042 | 1 462 |
| NOK/GBP | 11 878 | — | 11 878 |
| NZD/USD | -9 585 | -765 | -10 350 |
| RUB/EUR | 21 869 | — | 21 869 |
| TRY/EUR | 14 378 | — | 14 378 |
| USD/BRL | -17 094 | — | -17 094 |
| USD/CLP | 1 586 | — | 1 586 |
| USD/CNY | 17 752 | 8 300 | 26 052 |
| USD/COP | 2 515 | 11 744 | 14 259 |
| USD/EUR | 140 981 | -82 843 | 58 138 |
| USD/GBP | -2 438 | — | -2 438 |
| USD/INR | -48 221 | — | -48 221 |
| 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 |
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% confi dence interval.
If rates had weakened/strengthened by such changes with all other variables constant, the result for the period before taxes would have been € 10.8 million lower/higher (2020: € 1.6 million). Increase of the impact is linked to the higher volatility in diff erent currencies such as Chilean peso, Indian rupee, Brazilian real and US dollar.
At 31 December 2021 the Group does not apply hedge accounting (also none at 31 December 2020).
The Group is exposed to interest-rate risk, mainly on debt denominated in US dollar, Chinese renminbi and euro. To minimize the eff ects of interest-rate fl uctuations 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:
Group Treasury uses interest-rate swaps and cross-currency interest-rate swaps to ensure that the fl oating and fi xed portions of the long-term debt remain within the defi ned limits.
The following table summarizes the weighted average interest rates, excluding the eff ects of any swaps, at the balance sheet date.
The convertible bond (EUR) was carried at amortized cost using the eff ective interest method so as to spread the separate recognition of the conversion option and any transaction fees over time via interest charges. This results in eff ective interest charges exceeding the nominal interest charges.
| Long-term | |||||
|---|---|---|---|---|---|
| 2020 | Fixed rate | Floating rate | Total | Short-term | Total |
| US dollar | 4.69% | 3.50% | 4.10% | 1.72% | 2.06% |
| Chinese renminbi | —% | 3.71% | 3.71% | 3.80% | 3.79% |
| Euro | 1.39% | 1.48% | 1.43% | 0.55% | 1.43% |
| Other | 6.31% | —% | 6.31% | 3.92% | 4.83% |
| Total | 1.72% | 1.67% | 1.71% | 2.82% | 1.92% |
| Long-term | |||||
|---|---|---|---|---|---|
| 2021 | 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% |
As disclosed in note 6.18. 'Interest-bearing debt', the total fi nancial debt of the Group as of 31 December 2021 amounted to € 1 191.3 million (2020: € 1 609.7 million). The following table shows the currency and interest rate profi le, i.e. the percentage distribution of the total fi nancial debt by currency and by type of interest rate (fi xed, fl oating), including the eff ect of any swaps.
| Long-term | Short-term | |||
|---|---|---|---|---|
| 2020 | Fixed rate | Floating rate | Floating rate | Total |
| US dollar | 0.80% | 0.80% | 9.10% | 10.70% |
| Chinese renminbi | —% | 0.50% | 4.40% | 4.90% |
| Euro | 62.10% | 13.00% | 0.30% | 75.40% |
| Other | 3.40% | —% | 5.60% | 9.00% |
| Total | 66.30% | 14.30% | 19.40% | 100.00% |
| Long-term | Short-term | |||
|---|---|---|---|---|
| 2021 | 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% |
On the basis of the annualized daily volatility of the 3-month Interbank Off ered Rate in 2021 and 2020, the reasonable estimates of possible interest rate changes, with a 95% confi dence interval, are set out for the main currencies in the table below.
| 2020 | Interest rate at 31 December |
Reasonably possible changes (+/-) |
|---|---|---|
| Chinese renminbi ¹ | 2.53% | 0.42% |
| Euro | —% | 0.00% |
| US dollar | 0.24% | 0.24% |
| 2021 | Interest rate at 31 December |
Reasonably possible changes (+/-) |
|---|---|---|
| Chinese renminbi ¹ | 2.21% | 0.36% |
| Euro | —% | 0.00% |
| US dollar | 0.21% | 0.17% |
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 fl oating rated debt, with all other variables constant, the result for the period before tax would have been € 3.5 million higher/lower (2020: € 3.9 million higher/lower). Since the EURIBOR was negative and Bekaert has a 0% fl oor in place, reasonably possible changes in the EURIBOR will not generate any eff ect except for the fair value remeasurement of the interest rate swap at reporting date.
At 31 December 2021, the Group does not apply hedge accounting (2020: none) and no sensitivity analysis was required.
Credit risk is the risk that a counterparty will not meet its obligations under a fi nancial instrument or customer contract, leading to a fi nancial loss. The Group is exposed to credit risk from its operating activities and certain fi nancing activities, including deposits with banks and fi nancial institutions. In respect of its operating activities, the Group has a credit policy in place, which takes into account the risk profi les 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 specifi ed 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 2021, 65.4% (2020: 57.3%) of the credit risk exposure was covered by credit insurance policies and by trade fi nance techniques such as letters of credit, cash against documents and bank guarantees. In respect of fi nancing 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 fi nancing activities. In accordance with the IFRS 9 'expected credit loss' model for fi nancial as sets, a general bad debt allow ance is made for trade receivables to cover the unknown bad debt risk at each reporting date. This general allowance constitutes of a percentage on outs tanding tra de receivables at each reporting date. The percentages refl ect the probabilityweighted 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-yea r.
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 fi nancial fl exibility 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 fi nancing 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 (2020: € 200 million) at fl oating interest rates with fi xed margins. At year-end, nothing was outstanding under these facilities (2020: nil). In addition, the Group has a commercial paper and medium-term note program available for a maximum of € 123.9 million (2020: € 123.9 million). At the end of 2021, no commercial paper notes were outstanding (2020: nil). At year-end, no external bank debt was subject to debt covenants (2020: nil). The Group has discounted outstanding receivables per 31 December 2021 for a total amount of € 224.8 million (2020: € 152.3 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 2021, the factored receivables are derecognized.
The following table shows the Group's contractually agreed (undiscounted) outfl ows in relation to fi nancial liabilities (including fi nancial liabilities reclassifi ed as liabilities associated with assets held for sale). Only net interest payments and principal repayments are included.
| in thousands of € | 2021 | 2022 | 2023-2025 2026 and thereafter | |
|---|---|---|---|---|
| Financial liabilities - principal | ||||
| Trade payables | -668 422 | — | — | — |
| Other payables | -9 939 | -150 | — | — |
| Interest-bearing debt | -649 314 | -42 990 | -490 011 | -450 037 |
| Derivatives - gross settled | -103 678 | -18 530 | — | — |
| Financial liabilities - interests | ||||
| Trade and other payables | — | — | — | — |
| Interest-bearing debt | -24 001 | -18 041 | -45 128 | -17 087 |
| Derivatives - net settled | -348 | -348 | -609 | — |
| Derivatives - gross settled | -2 825 | -2 059 | — | — |
| Total undiscounted cash fl ow | -1 458 527 | -82 118 | -535 748 | -467 124 |
| 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 fl ow | -1 446 632 | -242 982 | -535 637 | -254 057 |
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 fi nancial instruments were calculated using the applicable forward interest rates.
All fi nancial 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.
The Group did not apply hedge accounting in 2021 (2020: none) so there were no fair value hedges nor cash fl ow hedges in 2021 (2020: none).
The Group also uses fi nancial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defi ned 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 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 fl ow hedge (CFH). At 31 December 2021, Bekaert does not apply hedge accounting:
| 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 | 71 063 | — | — |
| Interest-rate swaps | — | 196 500 | — |
| Cross-currency interest-rate swaps | 108 665 | 18 530 | — |
| Conversion derivative | 380 000 | — | — |
| Total | 559 728 | 215 030 | — |
| 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 | — | — |
| Total | 196 663 | 196 500 | — |
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 fl ow hedge (CFH). At 31 December 2021, Bekaert does not apply hedge accounting:
| Fair value of current and non-current derivatives | Assets | Liabilities | ||
|---|---|---|---|---|
| in thousands of € | 2020 | 2021 | 2020 | 2021 |
| Financial instruments | ||||
| Held for trading | ||||
| Forward exchange contracts | 570 | 805 | 1 618 | 654 |
| Interest-rate swaps | — | — | 1 081 | 118 |
| Cross-currency interest-rate swaps | 5 264 | 610 | 234 | 2 255 |
| Conversion derivative | — | — | 34 | — |
| Other derivative fi nancial assets | 3 178 | 13 244 | — | — |
| Total | 9 012 | 14 659 | 2 967 | 3 026 |
| Non-current | 3 762 | 13 244 | 1 081 | 703 |
| Current | 5 250 | 1 416 | 1 885 | 2 324 |
| Total | 9 012 | 14 659 | 2 967 | 3 026 |
In 2021, the other derivative fi nancial assets related to the VPPA derivative for € 13.2 million (2020: € 3.2 million).
The Group has no fi nancial assets and fi nancial 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 eff ect of the netting of derivative contracts is shown below:
| E ect of enforceable netting agreements | Assets | Liabilities | |||
|---|---|---|---|---|---|
| in thousands of € | 2020 | 2021 | 2020 | 2021 | |
| Total derivatives recognized in balance sheet | 9 012 | 14 659 | 2 967 | 3 026 | |
| Enforceable netting | -234 | -610 | -234 | -610 | |
| Net amounts | 8 778 | 14 049 | 2 733 | 2 416 |
The following tables list the diff erent classes of fi nancial 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 fi nancial 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 profi t or loss |
| FVTPL | Financial liabilities measured as at fair value through profi t or loss |
| Carrying amount vs fair value | 31 December 2020 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| in thousands of € | Category in accordance with IFRS 9 |
Carrying amount | Fair value | Carrying amount | Fair value | |
| Assets | ||||||
| Non-current fi nancial assets | ||||||
| - Financial & other receivables and cash guarantees |
AC | 10 365 | 10 365 | 12 549 | 12 549 | |
| - Equity investments | FVTOCI/Eq | 13 372 | 13 372 | 20 081 | 20 081 | |
| - Derivatives | ||||||
| - Held for trading | FVTPL/Mnd | 3 762 | 3 762 | 13 244 | 13 244 | |
| Current fi nancial assets | ||||||
| - Financial receivables and cash guarantees |
AC | 7 707 | 7 707 | 6 475 | 6 475 | |
| - Cash and cash equivalents | AC | 940 416 | 940 416 | 677 270 | 677 270 | |
| - Short term deposits | AC | 50 077 | 50 077 | 80 058 | 80 058 | |
| - Trade receivables | AC | 587 619 | 587 619 | 750 666 | 750 666 | |
| - Bills of exchange received | AC | 54 039 | 54 039 | 41 274 | 41 274 | |
| - Other current assets | ||||||
| - Other receivables | AC | 17 830 | 17 830 | 43 437 | 43 437 | |
| - Derivatives | ||||||
| - Held for trading | FVTPL/Mnd | 5 250 | 5 250 | 1 416 | 1 416 |
| Liabilities | |||||
|---|---|---|---|---|---|
| Non-current interest-bearing debt | |||||
| - Lease liabilities | AC | 60 760 | 60 760 | 56 425 | 56 425 |
| - Cash guarantees received | AC | 171 | 171 | 204 | 204 |
| - Credit institutions | AC | 187 511 | 187 511 | 177 047 | 177 047 |
| - Schuldschein loans | AC | 319 635 | 319 635 | 319 905 | 319 905 |
| - Bonds | AC | 400 000 | 401 693 | 400 000 | 395 074 |
| Current interest-bearing debt | |||||
| - Lease liabilities | AC | 19 746 | 19 746 | 20 219 | 20 219 |
| - Credit institutions | AC | 246 817 | 246 817 | 217 523 | 217 523 |
| - Bonds | AC | 375 092 | 377 929 | — | — |
| Other non-current liabilities | |||||
| - Other derivatives | FVTPL | 1 081 | 1 081 | 118 | 118 |
| - Other payables | AC | 150 | 150 | 142 | 142 |
| Trade payables | AC | 668 422 | 668 422 | 1 062 185 | 1 062 185 |
| Other current liabilities | |||||
| - Conversion option | FVTPL | 34 | 34 | — | — |
| - Other payables | AC | 25 621 | 25 621 | 33 476 | 33 476 |
| - Derivatives | |||||
| - Held for trading | FVTPL | 1 851 | 1 851 | 2 324 | 2 324 |
| Aggregated by category in accordance with IFRS 9 | |||||
| Financial assets | AC | 1 668 053 | 1 668 053 | 1 611 729 | 1 611 729 |
| FVTOCI/Eq | 13 372 | 13 372 | 20 081 | 20 081 | |
| FVTPL/Mnd | 9 012 | 9 012 | 14 659 | 14 659 | |
| Financial liabilities | AC | 2 303 925 | 2 308 454 | 2 287 127 | 2 282 201 |
| FVTPL | 2 967 | 2 967 | 2 441 | 2 441 |
The fair value of all fi nancial instruments measured at amortized cost in the balance sheet has been determined using level-2 fair value measurement techniques. For most fi nancial instruments the carrying amount approximates the fair value .
The fair value measurement of fi nancial assets and fi nancial liabilities can be characterized in one of the following ways:
| Derivative in VPPA arrangement | 31 December 2021 |
|---|---|
| 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 studies in the area |
| Outcome of the model (in thousands of €) | |
| Fair value of the VPPA derivative | 13 244 |
The carrying amount (i.e. the fair value) of the level-3 liabilities/(assets) has evolved as follows:
| 2020 in thousands of € |
2021 |
|---|---|
| At 1 January -2 378 |
-10 682 |
| Reclassifi cation from level 2 to level 3 ¹ -7 407 |
— |
| Expenditure — |
-863 |
| (Gain) / loss in fair value through OCI -131 |
-1 916 |
| (Gain) / loss in fair value through P&L -766 |
-10 100 |
| At 31 December -10 682 |
-23 561 |
¹ Equity investments have been moved in presentation from level 2 to level 3
Gains and losses in fair value are reported in other fi nancial income and expenses (€ -10.1 million), except for the equity investments where fair value changes are carried through other comprehensive income (€ -1.9 million) (see note 6.6. 'Other non-current assets').
The following table shows the sensitivity of the fair value calculation to the most signifi cant level-3 inputs of the VPPA agreement.
| in thousands of € | Change | Impact on VPPA derivative | |
|---|---|---|---|
| Power forward sensitivity | +10% | increased by | 2 031 |
| -10% | decreased by | -1 942 | |
| Production sensitivity | +5% | increased by | 1 589 |
| -5% | decreased by | -1 501 |
The sensitivity of the fair value calculation of the equity investment in Xinju Metal Products Co Ltd (€ 8.0 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 € 6.3 million;
• If the discount factor would be 1% higher, the fair value would be € 7.7 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 € 5.8 million.
The following table provides an analysis of fi nancial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above:
| in thousands of € | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets mandatorily measured as at fair value through profi t or loss | ||||
| Derivative fi nancial assets | — | 5 834 | 3 178 | 9 012 |
| Equity instruments designated as at fair value through OCI | ||||
| Equity investments ¹ | 5 833 | — | 7 538 | 13 371 |
| Total assets | 5 833 | 5 834 | 10 716 | 22 383 |
| Financial liabilities held for trading | ||||
| Conversion option | — | — | 34 | 34 |
| Other derivative fi nancial liabilities | — | 2 932 | — | 2 932 |
| Total liabilities | — | 2 932 | 34 | 2 966 |
¹ Equity investments have been moved in presentation from level 2 to level 3.
| in thousands of € | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets mandatorily measured as at fair value through profi t or loss | ||||
| Derivative fi nancial assets | — | 1 416 | 13 244 | 14 659 |
| Equity instruments designated as at fair value through OCI | ||||
| Equity investments ¹ | 9 764 | — | 10 317 | 20 081 |
| Total assets | 9 764 | 1 416 | 23 561 | 34 741 |
| Financial liabilities held for trading | ||||
| Other derivative fi nancial liabilities | — | 3 026 | — | 3 026 |
| Total liabilities | — | 3 026 | — | 3 026 |
¹ Equity investments have been moved in presentation from level 2 to level 3.
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 2020.
The capital structure of the Group consists of net debt, as defi ned in note 6.18. 'Interest-bearing debt', and equity (both attributable to equity holders of Bekaert and to noncontrolling interests).
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.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Net debt | 604 081 | 417 329 |
| Equity | 1 535 055 | 2 100 522 |
| Net debt to equity ratio | 39.4% | 19.9% |
As at 31 December, the important contingencies and commitments were:
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Contingent liabilities | 12 105 | 4 200 |
| Commitments to purchase fi xed assets | 45 690 | 48 984 |
| Commitments to invest in venture capital funds | 8 246 | 3 269 |
At year-end 2021, 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 eff ectively secured as the rights to the leased assets recognized in the fi nancial 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'.
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.
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Sales of goods | 12 117 | 13 231 |
| Purchases of goods | 18 621 | 18 509 |
| Services rendered | 177 | 81 |
| Royalties and management fees received | 10 074 | 14 981 |
| Interest and similar income | 1 | — |
| Dividends received | 24 706 | 44 847 |
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Trade receivables | 4 554 | 6 116 |
| Other current receivables ¹ | 2 060 | 27 452 |
| Trade payables | 4 271 | 4 945 |
| Other current payables | 1 181 | 54 |
¹ The other current receivables are at year-end 2021 signifi cantly 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'.
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 the Financial Statements).
| in thousands of € | 2020 | 2021 |
|---|---|---|
| Number of persons | 34 | 34 |
| Short-term employee benefi ts | ||
| Basic remuneration | 7 621 | 8 407 |
| Variable remuneration | 3 103 | 4 126 |
| Remuneration as directors of subsidiaries | 563 | 511 |
| Post-employment benefi ts | ||
| Defi ned-benefi t pension plans | 419 | 327 |
| Defi ned-contribution pension plans | 1 276 | 1 551 |
| Share-based payment benefi ts | 6 280 | 11 719 |
| Total gross remuneration | 19 262 | 26 641 |
| Average gross remuneration per person | 567 | 784 |
| Number of performance share units granted (cash-settled and equity-settled) | 156 021 | 131 442 |
| Number of matching share units to be granted | 10 766 | 9 112 |
| Number of shares granted | 23 475 | 10 940 |
The disclosures relating to the Belgian Corporate Governance Code are included in the Corporate Governance Statement of this annual report.
During 2021, the statutory auditor and persons professionally related to him performed additional services for fees amounting to € 188 100.
These fees essentially relate to further assurance services (€ 12 650), tax advisory services (€ 58 200) and other non-audit services (€ 117 250). The additional services were approved by the Audit, Risk and Finance Committee.
The audit fees for NV Bekaert SA and its subsidiaries amounted to € 2 172 501.
| 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 |
| 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 |
| Industrias Chilenas de Alambre - Inchalam SA | Talcahuano, Chile | CLP | 52 |
| Prodimin SAC | Lima, Peru | USD | 38 |
| 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 Pacifi c | |||
|---|---|---|---|
| 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 | Mayfi eld 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
| Sales o ces, warehouses and others | Address | FC ¹ | % ² |
|---|---|---|---|
| EMEA | |||
| Bekaert AS | Hellerup, Denmark | DKK | 100 |
| 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 | Callao, Peru | PEN | 96 |
| Prodac Contrata SAC | Callao, Peru | USD | 38 |
| Prodalam SA | Santiago, Chile | CLP | 52 |
| Prodicom Selva SAC | Ucayali, Peru | USD | 38 |
| Specialty Films de Services Company SA de CV | Monterrey, Mexico | MXN | 100 |
| Asia Pacifi c | |||
|---|---|---|---|
| Bekaert Architectural Design Consulting (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
| Bekaert Heating Technology (Suzhou) Co Ltd | Taicang City (Jiangsu province), China | CNY | 100 |
| 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, Taiwan | TWD | 100 |
| Bekaert (Thailand) Co Ltd | Tambol Pluakdaeng, Amphur Pluakdaeng,Thailand | USD | 100 |
| BOSFA Pty Ltd | Mayfi eld 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
| 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 |
| 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 o ces, warehouses and others | Address | FC ¹ | % ² |
| EMEA | |||
| Netlon Sentinel Ltd | Blackburn, United Kingdom | GBP | 50 |
| Asia Pacifi c | |||
| 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
| Subsidiaries | Address | % ¹ |
|---|---|---|
| Bridon Middle East FZE | Sharjah, United Arab Emirates | 100 |
| Subsidiaries | Address | % ¹ |
|---|---|---|
| Productora de Alambres Colombianos Proalco SAS | Bogotá, Colombia | From 80% to 40% |
| Subsidiaries | Merged into |
|---|---|
| Grating Perú S.A.C. | Productos de Acero Cassadó SA |
| Inversiones BBRG Lima SA | Procables SA |
| Companies | Address |
|---|---|
| Bekaert Costa Rica SA | San José-Santa Ana, Costa Rica |
| Bekaert (Huizhou) Steel Cord Co Ltd | Huizhou (Guangdong province), China |
| Inversiones Bekaert Andean Ropes SA | Santiago, Chile |
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
The report of the Board of Directors and the fi nancial 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 fi nancial statements of the Company are available free of charge upon request from:
NV Bekaert SA Bekaertstraat 2 BE-8550 Zwevegem Belgium www.bekaert.com
The statutory auditor has issued an unqualifi ed report on the fi nancial statements of the Company.
The Directors' report and fi nancial statements of the Company, together with the statutory auditor's report, will be deposited with the National Bank of Belgium as provided by law.
| 2020 in thousands of € - Year ended 31 December |
2021 |
|---|---|
| Sales 281 052 |
415 161 |
| Operating result before non-recurring items -14 004 |
58 418 |
| Non-recurring operational items -3 430 |
-145 |
| Operating result after non-recurring items -17 434 |
58 273 |
| Financial result before non-recurring items 1 763 |
67 831 |
| Non-recurring fi nancial items -73 711 |
-1 158 |
| Financial result after non-recurring items -71 947 |
66 673 |
| Profi t before income taxes -89 381 |
124 945 |
| Income taxes 2 492 |
13 997 |
| Result for the period -86 890 |
138 943 |
| 2020 in thousands of € - 31 December |
2021 |
|---|---|
| Fixed assets 2 000 915 |
2 001 872 |
| Intangible fi xed assets 66 449 |
71 411 |
| Tangible fi xed assets 32 588 |
29 349 |
| Financial fi xed assets 1 901 878 |
1 901 112 |
| Current assets 461 406 |
413 107 |
| Total assets 2 462 321 |
2 414 979 |
| Shareholders' equity 957 368 |
1 010 924 |
|---|---|
| Share capital 177 812 |
177 923 |
| Share premium 37 884 |
38 850 |
| Revaluation surplus 1 995 |
1 995 |
| Statutory reserve 17 779 |
17 792 |
| Unavailable reserve 103 467 |
94 713 |
| Reserves available for distribution, retained earnings 618 430 |
679 651 |
| Provisions and deferred taxes 77 510 |
78 866 |
| Creditors 1 427 443 |
1 325 189 |
| Amounts payable after one year 845 650 |
845 650 |
| Amounts payable within one year 581 793 |
479 539 |
| Total equity and liabilities 2 462 321 |
2 414 979 |
Valuation and foreign currency translation principles applied in the parent company's fi nancial statements are based on Belgian accounting legislation.
The Belgium-based entity's sales amounted to € 415.2 million, an increase of 48% compared to 2020. The operating profi t before non-recurring items was € 58.4 million, compared with a loss of € -14.0 million last year. The increase of the operating result was a combined eff ect of higher sales volumes, higher margins and better cost control.
Non-recurring items included in the operating result amounted to € -0.1 million in 2021 (mainly accelerated depreciation and realization of tangible fi xed assets), compared to € -3.4 million last year.
The fi nancial result before non-recurring items was € 67.8 million compared to € 1.8 million last year. The higher dividend income in 2021 was the main element explaining this evolution.
The non-recurring fi nancial items amounted to € -1.2 million in 2021, against € -73.7 million in the previous year, which was mainly driven by write-downs on portfolio.
The income taxes of € 14.0 million were positive due to tax credit receivable on intangible fi xed assets and the group contribution Scheldestroom nv. This led to a result for the period of € 138.9 million compared with € -86.9 million in 2020.
The provisions for environmental programs decreased to € 16.5 million (2020: € 17.2 million).
Information on the company's research and development activities can be found in the 'Knowledge' section in the 'Strategy and performance' chapter.
In connection with the entry into force of the Act of 2 May 2007 on the disclosure of signifi cant 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 2021, the Company received following transparency notifi cations. On 31 December 2021, the total number of securities conferring voting rights was 60 452 261. The voting rights attached to the treasury shares held by the Company are suspended. On 31 December 2021, Bekaert held 3 145 446 treasury shares.
This notifi cation showed that on 7 April 2021, pursuant to the direct/indirect transfer of shares, the Stichting Administratiekantoor Bekaert had crossed the 40% threshold downward. On 7 April 2021, there were a total of 60 414 841 securities conferring voting rights.
| Voting rights | Previous notifi cation | After the transaction | |||
|---|---|---|---|---|---|
| Number of voting rights |
Number of voting rights | Percentage of voting rights | |||
| Holders of voting rights | Linked to securities | Not linked to | securities Linked to securities | Not linked to securities |
|
| Stichting Administratiekantoor Bekaert | 22 370 001 | 20 654 557 | — | 34.19% | —% |
| Bekaert | 3 005 875 | 3 498 164 | — | 5.79% | —% |
| TOTAL | 25 375 876 | 24 152 721 | — | 39.98% | —% |
The notifi cation showed that an agreement to act in concert had been reached as a result of which the 35% threshold was crossed on 16 June 2021. On 16 June 2021, there were a total of 60 414 841 securities conferring voting rights.
| Voting rights | Previous notifi cation | After the transaction | |||
|---|---|---|---|---|---|
| Number of voting rights |
Number of voting rights | Percentage of voting rights | |||
| Holders of voting rights | Linked to securities | Not linked to | securities Linked to securities | Not linked to securities |
|
| Stichting Administratiekantoor Bekaert | 20 654 557 | 20 522 237 | — | 33.97% | —% |
| Subtotal | 20 654 557 | 20 522 237 | — | 33.97% | —% |
| Individual Controlling Aliunde Ltd | — | — | — | —% | —% |
| Aliunde Ltd | — | 421 370 | — | 0.70% | —% |
| Subtotal | — | 421 370 | — | 0.70% | —% |
| Three individuals controlling Velge Holding NV | — | — | — | —% | —% |
| Velge Holding NV | — | 284 190 | — | 0.47% | —% |
| Subtotal | — | 284 190 | — | 0.47% | —% |
| Individual controlling Berfi n SA | — | — | — | —% | —% |
| Berfi n SA | — | 108 470 | — | 0.18% | —% |
| Subtotal | — | 108 470 | — | 0.18% | —% |
| Four individuals controlling Genefi n SA | — | — | — | —% | —% |
| Genefi n SA | — | 600 000 | — | 0.99% | —% |
| Subtotal | — | 600 000 | — | 0.99% | —% |
| Individual controlling Millenium 3 SA | — | — | — | —% | —% |
| Millenium 3 SA | — | 130 200 | — | 0.22% | —% |
| Subtotal | — | 130 200 | — | 0.22% | —% |
| TOTAL | — | 22 066 467 | — | 36.52% | —% |
Detailed information can be found on: https://www.bekaert.com/en/about-us/news-room/regulated-information
The after-tax result for the year was € 138 942 685 compared with € -86 889 620 for the previous year.
The Board of Directors has proposed that the Annual General Meeting to be held on 11 May 2022 appropriate the above result as follows:
| in € | |
|---|---|
| Result of the year to be appropriated | 138 942 685 |
| Transfer to statutory reserves | -13 000 |
| Transfer to other reserves | -52 466 652 |
| Profi t for distribution | 86 463 033 |
The Board of Directors has proposed that the Annual General Meeting approve the distribution of a gross dividend of € 1.50 per share (2020: € 1.00 per share).
The dividend will be payable in euro on 16 May 2022 by the following banks:
The term of offi ce of the Directors Charles de Liedekerke, Hubert Jacobs van Merlen, Oswald Schmid, Colin Smith and Mei Ye will expire at the close of the Annual General Meeting of 11 May 2022.
Charles de Liedekerke, Hubert Jacobs van Merlen and Colin Smith do not seek re-election.
The Board of Directors has proposed that the General Meeting:
| Metric | Defi nition | 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 eff ectively control to optimize its fi nancial performance, and serves as the denominator of ROCE. |
| Capital ratio (fi nancial autonomy) | Equity relative to total assets. | This ratio provides a measure of the extent to which the Group is equity-fi nanced. |
| 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 fi gures | 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 fi gures, which only comprise controlled companies, combined fi gures 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 eff ectively control to optimize its profi tability, and a.o. serves as the numerator of ROCE and EBIT interest coverage. |
| EBIT – underlying | 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 eff ect that is not inherent to the business. |
EBIT – underlying is presented to enhance the reader's understanding of the operating profi tability 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 profi tability before non-cash eff ects of past investment decisions and working capital assets. |
| EBITDA – underlying |
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 eff ect that is not inherent to the business. |
EBITDA – underlying is presented to enhance the reader's understanding of the operating profi tability before one-off items and non-cash eff ects 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 profi tability. |
| Free Cash Flow (FCF) | Cash fl ows from Operating activities - capex + dividends received - net interest paid | Free cash fl ow (FCF) represents the cash available for the company to repay fi nancial debt or pay dividends to investors. |
| Gearing | Net debt relative to equity. | Gearing is a measure of the Group's fi nancial 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 specifi c measure of operating profi tability expressed as a percentage on sales. |
| Net capitalization | Net debt + equity. | Net capitalization is a measure of the Group's total fi nancing from both lenders and shareholders. |
| Net debt | Interest-bearing debt after deducting non-current and current fi nancial receivables and cash guarantees, short-term deposits, cash and cash equivalents. |
Net debt is a measure of debt after deduction of fi nancial 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 profi tability. |
| Operating free cash fl ow | Cash fl ows from Operating activities - capex (net of disposals of fi xed assets) | Operating cash fl ow 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 profi tability 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 profi tability 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. |
|---|---|---|
| Working capital (operating) | 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 eff ectively control to optimize its fi nancial 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 fi nancial companies and other non-industrial companies, in a fl ash approach and as such not including all consolidation entries refl ected 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. |
| Note annual | |||
|---|---|---|---|
| in millions of € | report | 2020 | 2021 |
| Non-current interest-bearing debt | 907 | 897 | |
|---|---|---|---|
| L/T Lease Liability - non-current | 61 | 56 | |
| Current interest-bearing debt | 622 | 218 | |
| L/T Lease Liability - current | 20 | 20 | |
| Total fi nancial debt | 6.18 | 1 610 | 1 191 |
| Non-current fi nancial receivables and cash guarantees | -7 | -10 | |
| Current fi nancial receivables and cash guarantees | -8 | -6 | |
| Short-term deposits | -50 | -80 | |
| Cash and cash equivalents | -940 | -677 | |
| Net debt | 6.18 | 604 | 417 |
| Capital Employed | 2020 | 2021 | |
|---|---|---|---|
| Intangible assets | 55 | 61 | |
| Goodwill | 149 | 151 | |
| Property, plant and equipment | 1 192 | 1 254 | |
| RoU Property plant and equipment | 133 | 132 | |
| Working capital (operating) | 6.8 | 535 | 678 |
| Capital employed | 2 063 | 2 276 | |
| Weighted average capital employed | 2 235 | 2 169 |
| Working capital (operating) | 2020 | 2021 |
|---|---|---|
| Inventories | 683 | 1 121 |
| Trade receivables | 588 | 751 |
| Bills of exchange received | 54 | 41 |
| Advances paid | 19 | 20 |
| Trade payables | -668 | -1 062 |
| Advances received | -16 | -24 |
| Remuneration and social security payables | -116 | -161 |
| Employment-related taxes | -9 | -8 |
| Working capital (operating) 6.8 |
535 | 678 |
| Weighted average working capital (operating) | 786 | 607 |
| EBIT Underlying to EBIT | 5.2 | |
|---|---|---|
| EBITDA | 2 020 | 2 021 |
| EBIT | 257 | 513 |
| Amortization intangible assets | 10 | 9 |
| Depreciation property, plant & equipment | 161 | 151 |
| Depreciation RoU property, plant & equipment | 24 | 24 |
| Write-downs/(reversals of write-downs) on inventories and receivables | 7 | -19 |
| Impairment losses/ (reversals of depreciation and impairment losses) on fi xed assets | 14 | -2 |
EBITDA 473 677
| EBITDA - Underlying | 2 020 | 2 021 |
|---|---|---|
| EBIT - Underlying | 272 | 515 |
| Amortization intangible assets | 10 | 9 |
| Depreciation property, plant & equipment | 161 | 151 |
| Depreciation RoU property, plant & equipment | 24 | 24 |
| Write-downs/(reversals of write-downs) on inventories and receivables | 7 | -11 |
| Impairment losses/ (reversals of impairment losses) on fi xed assets | 5 | — |
| EBITDA - Underlying | 479 | 689 |
| ROCE | 2 020 | 2 021 |
|---|---|---|
| EBIT | 257 | 513 |
| Weighted average capital employed | 2 235 | 2 169 |
| ROCE | 11.5% | 23.7% |
| EBIT interest coverage | 2 020 | 2 021 | |
|---|---|---|---|
| EBIT | 257 | 513 | |
| (Interest income) | 5.4 | -3 | -3 |
| Interest expense | 5.4 | 60 | 44 |
| (interest element of discounted provisions) | 5.4 | -3 | -2 |
| Net interest expense | 53 | 39 | |
| EBIT interest coverage | 4.8 | 13.0 |
| ROE (return on equity) | 2 020 | 2 021 |
|---|---|---|
| Result for the period | 148 | 451 |
| Average equity (period-weighted) | 1 533 | 1 818 |
| ROE | 9.7% | 24.8% |
| Capital ratio (Financial autonomy) | 2 020 | 2 021 |
|---|---|---|
| Equity | 1 535 | 2 101 |
| Total assets | 4 288 | 4 844 |
| Financial autonomy | 35.8% | 43.4% |
| Gearing (net debt on equity) | 2 020 | 2 021 | |
|---|---|---|---|
| Net debt | 604 | 417 | |
| Equity | 1 535 | 2 101 | |
| Gearing (net debt on equity) | 7.2 | 39.4% | 19.9% |
| Net debt on EBITDA | 2 020 | 2 021 |
|---|---|---|
| Net debt | 604 | 417 |
| EBITDA | 473 | 677 |
| Net debt on EBITDA | 1.3 | 0.6 |
| Net debt on EBITDA-underlying | 2 020 | 2 021 |
|---|---|---|
| Net debt | 604 | 417 |
| EBITDA-Underlying | 479 | 689 |
| Net debt on EBITDA-underlying | 1.3 | 0.6 |
| Current Ratio | 2 020 | 2 021 |
|---|---|---|
| Current Assets | 2 466 | 2 872 |
| Current liabilities | 1 589 | 1 636 |
| Current Ratio | 1.6 | 1.8 |
| Operating free cash fl ow 2 020 |
2 021 |
|---|---|
| Cash fl ows from operating activities 505 |
385 |
| Purchase of intangible assets | -3 -13 |
| Purchase of PP&E -104 |
-144 |
| Purchase of RoU Land | — — |
| Proceeds from disposals of fi xed assets | 52 37 |
| Operating free cash fl ow 449 |
265 |
| Free Cash Flow | 2 020 | 2 021 |
|---|---|---|
| Cash fl ows from operating activities | 505 | 385 |
| Purchase of intangible assets | -3 | -13 |
| Purchase of property, plant and equipment | -104 | -144 |
| Purchase of RoU Land | — | — |
| Dividends received | 25 | 25 |
| Interest received | 3 | 3 |
| Interest paid | -43 | -35 |
| Free Cash Flow | 383 | 221 |
We have a product stewardship framework and related capability building in place. The framework covers:
In 2021, we rolled out a global chemical management standard and implemented a global tool that allows effi cient 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 signifi cant environmental impacts in the entire supply chain and considering all the stages of the lifecycle of our fi nished products and how to address them in an appropriate way.
At Bekaert, we closely monitor the EU REACH regulation to confi rm compliance in a proactive way related both to the raw materials we are using and to our fi nished 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 diff erences in hazard classifi cation and exposure limits, we are committed to applying our own company-specifi c hazard classifi cation and exposure limits which are mandatory if no stricter regulations apply.
GRI 403-7
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. One of the most important ways of reducing our CO₂ emissions is to improve the energy effi ciency of our operations by installing energy-effi cient infrastructure and equipment in our new plants and plant extensions, in addition to upgrading our existing facilities.
Total energy consumption¹ = 5 134 GWh of which:
GRI 302-1
Energy Intensity Ratio¹:
Methodology used: the energy data are monitored in a central database.
Renewable Energy: 39% of our electricity needs came from renewable energy sources in 2021.
| Energy consumption in GWh |
2019 | 2020 | 2021 including Brazil |
2021 excluding Brazil |
|---|---|---|---|---|
| Total energy consumption | 4 957 | 4 577 | 5 134 | 4 457 |
| Electrical energy (incl. cooling) | 3 152 | 2 880 | 3 154 | 2 753 |
| Thermal energy (steam and heat) | 329 | 286 | 257 | 257 |
| Natural gas | 1 476 | 1 410 | 1 723 | 1 447 |
Data 2019-2020 relate to combined numbers, including the joint ventures in Brazil.
Data 2021 are disclosed for both the combined (including joint ventures in Brazil) and consolidated plants (excluding joint ventures).
| Energy intensity ratio in KWh per ton |
2019 | 2020 | 2021 including Brazil |
2021 excluding Brazil |
|---|---|---|---|---|
| Electrical energy (incl. cooling) | 889 | 876 | 868 | 750 |
| Thermal energy (steam and heat) | 93 | 87 | 71 | 70 |
| Natural gas | 417 | 429 | 474 | 394 |
Energy intensity ratio: the energy (electricity and thermal) used per ton of end product produced.
Data 2019-2020 relate to combined numbers, including the joint ventures in Brazil.
Data 2021 are disclosed for both the combined (including joint ventures in Brazil) and consolidated plants (excluding joint ventures).
The energy intensity of 2021 increased by + 1% versus 2019 and by +1.5% versus 2020.
| % of energy needs that came from renewable sources¹ |
2019 | 2020² | 2021 |
|---|---|---|---|
| 42 | 42 | 39 |
¹ Joint ventures included
² Restated fi gure 2020: in prior years we have used 'grid mix' as a reference, which is the observed renewable energy % that is on a given grid. Per GHG protocol (page 48) it is preferred to use the 'residual grid mix' which is intended to fi lter out the voluntary purchases of others. This reduces the % of renewable energy on a grid and, consequently, the previously reported 2020 fi gure (43%) of Bekaert (to 42%).
We aim for zero, 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.
Scope 1 emissions are direct greenhouse emissions that are related to our operations.
| Scope1 GHG emissions natural gas |
2019 | 2020 | 2021 including Brazil |
2021 excluding Brazil |
|---|---|---|---|---|
| GHG emissions natural gas (in ton CO₂) |
271 609 | 259 569 | 316 854 | 262 580 |
| GHG intensity ratio natural gas (kg CO₂/ton) |
77 | 79 | 87 | 71 |
Data 2019-2020 relate to combined numbers, including the joint ventures in Brazil.
Data 2021 are disclosed for both the combined (including joint ventures in Brazil) and consolidated plants (excluding joint ventures).
GHG emission intensity for natural gas in 2021 increased by +10% versus 2020 and by +13% versus 2019.
GRI 305-5
Scope 2 emissions are indirect emissions, from purchased electricity, steam etc. that have been calculated based on energy consumption data and country specifi c kWh/ MWh to CO₂ conversion factors as provided by the International Energy Agency (IEA).
GRI 305-2
GHG emissions from purchased electricity and other types of energy:
GRI 305-2
GHG Intensity Ratio:
GRI 305-4
| Scope 2 GHG emissions from purchased electricity and other types of energy |
2019 | 2020 | 2021 including Brazil |
2021 excluding Brazil |
|---|---|---|---|---|
| Electrical energy (including cooling) in ton CO₂ |
1 351 373 | 1 195 306 | 1 345 956 | 1 308 129 |
| Thermal energy (steam and heat) in ton CO₂ |
60 371 | 52 718 | 46 425 | 46 425 |
Data 2019-2020 relate to combined numbers, including the joint ventures in Brazil.
Data 2021 are disclosed for both the combined (including joint ventures in Brazil) and consolidated plants (excluding joint ventures).
| Scope 2 GHG intensity ratio |
2019 | 2020 | 2021 including Brazil |
2021 excluding Brazil |
|---|---|---|---|---|
| Electrical energy (including cooling) in kg CO₂/ton |
381 | 363 | 370 | 356 |
| Thermal energy (steam and heat) in kg CO₂/ton |
17 | 16 | 13 | 13 |
Data 2021 are disclosed for both the combined (including joint ventures in Brazil) and consolidated plants (excluding joint ventures).
GHG emissions intensity for purchased electricity in 2021 increased by +2% compared to 2020 and reduced by -3% compared to 2019.
GHG emissions intensity for thermal energy in 2021 reduced by -19% compared to 2020 and by -24% compared to 2019.
GRI 305-5
Scope 3 emissions from transport are from Bekaert consolidated entities (excluding joint ventures).
GHG emissions intensity of outbound logistics:
In previous years we have reported GHG emissions from outbound logistics under Scope 1 (according to the GRI Standards). However, to be aligned with our SBTi targets, GHG emissions from outbound logistics are now reported under Scope 3.
GHG emissions from outbound logistics:
GHG intensity ratio from outbound logistics:
Emissions of outbound logistics increased because of a strong demand rebound and agile supply chain management.
| logistics in ton CO2 | 2019 | 2020 | 2021 |
|---|---|---|---|
| Global sea freight | 18 578 | 22 603 | 31 137 |
| Road transport for Rubber Reinforcement EMEA | 9 284 | 8 249 | 10 562 |
| Air freight | 803 | 4 118 |
| Scope 3 GHG intensity ratio from outbound logistics (in | ||
|---|---|---|
| ton CO2/ton product transported) | 2020 | 2021 |
| Global sea freight | 0.0550 | 0.0384 |
| Road transport for Rubber Reinforcement EMEA | 0.0388 | 0.0716 |
| Air freight | 5.1030 |
Disclosed since 2020, with the exception of air freight: since 2021
GRI 305-3, GRI 305-4
GHG emissions intensity of company cars, personnel bus services and air travel:
GHG emissions from company cars & buses (excluding JVs): 3 508 ton CO₂/year
GHG emissions from business travel (air): 1 000 ton CO₂ (without radiative forcing (RF))
| GHG emissions intensity of company cars, personnel bus services and air travel |
2019 | 2020 | 2021 |
|---|---|---|---|
| GHG emissions from company cars & buses (excluding JVs) in ton CO₂/year |
3 692 | 3 606 | 3 508 |
| GHG emissions from business travel (air) in ton CO₂ (without radiative forcing (RF)) |
2 740 | 1 700 | 1 000 |
GRI 305-3, GRI 305-4
| Scope 3 emissions from purchased goods (in ton) |
2019 | 2020 | 2021 including Brazil |
2021 excluding Brazil |
|---|---|---|---|---|
| Scope 3 emissions from purchased wire rod |
5 856 000 | 5 490 000 | 6 059 000 | 4 753 000 |
Calculation method: tons of wire rod purchased in the particular year multiplied by the world average emissions intensity of steel (1.83 ton CO₂/ton steel).
GRI305-3
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
Total water withdrawal was 8 975 megaliter (ML) of which 3 619 ML from areas with water stress.
Freshwater withdrawal by source:
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
| 2019¹ | 2020¹ | 2021 |
|---|---|---|
| 9 237 | 8 088 | 8 975 |
| 3 626 | 3 107 | 3 619 |
| 2019¹ | 2020¹ | 2021 |
| 761 | 587 | 626 |
| 559 | 530 | 605 |
| 2 355 | 2 201 | 2 571 |
| 754 | 640 | 813 |
| 6 121 | 5 300 | 5 778 |
| 2 312 | 1 937 | 2 201 |
| Third-party water by source (in ML) | 2019¹ | 2020¹ | 2021 |
|---|---|---|---|
| Third-party water from surface water | 5 581 | 4 783 | 4 970 |
| from areas with water stress | 2 055 | 1 717 | 1 846 |
| Third-party water from ground water | 540 | 517 | 808 |
| from areas with water stress | 257 | 220 | 355 |
¹ 2019 and 2020 data have been restated according to updated defi nition of water-stressed areas
GRI 303-3
Total water discharge is 4 164 ML in 2021 of which 2 032 ML to areas with water stress.
Water discharge by destination:
Water discharge to areas with water stress was 2 032 ML of which 557 ML freshwater and 1 475 ML other water.
Our water discharge is fi ltered 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) | 2019¹ | 2020¹ | 2021 |
|---|---|---|---|
| Total water discharge | 4 315 | 3 712 | 4 164 |
| to areas with water stress | 1 727 | 1 486 | 2 032 |
| 2019¹ | 2020¹ | 2021 |
|---|---|---|
| 1 595 | 1 511 | 1 466 |
| 599 | 462 | 502 |
| 996 | 1 049 | 964 |
| 0 | 0 | 0 |
| 86 | 91 | 100 |
| 86 | 91 | 100 |
| 2 633 | 2 109 | 2 598 |
| 295 | 221 | 94 |
| 2 339 | 1 889 | 2 504 |
| 1 727 | 1 486 | 2 032 |
| 668 | 527 | 557 |
| 1 059 | 959 | 1 475 |
¹ 2019 and 2020 data have been restated according to updated defi nition of water stressed areas
GRI 303-4, GRI 303-2
Water consumption = total water withdrawal - total water discharge.
Total water consumption was 4 811 ML of which 1 587 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%)
| Water consumption (in ML) | 2019¹ | 2020¹ | 2021 |
|---|---|---|---|
| Total water consumption | 4 922 | 4 376 | 4 811 |
| From areas with water stress | 1 899 | 1 621 | 1 587 |
¹ 2019 and 2020 data have been restated according to updated defi nition of water-stressed areas
GRI 305-5
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 |
|---|---|---|---|
| Preparation for re-use | 0 | 0 | 0 |
| Recycling | 117 879 | 101 727 | 107 760 |
| Other recovery operations | 0 | 0 | 0 |
Steel scrap = steel wire scrap, end-of-life spools and machine spare parts, other steelbased scrap.
We turn ideas into meaningful sustainable solutions that reduce the environmental footprint of our customers and beyond, in end-markets.
Some examples hereof:
Tires have an impact on the emissions of cars. Steel cords are used to reinforce the tires and therefore, can play a role in reducing the environmental footprint of cars. Bekaert's super-tensile and ultra-tensile steel cord ranges for tire reinforcement allow tire makers to produce tires with a lower weight, thinner plies, and lower rolling resistance making the tires more sustainable. In addition, this technology improves the battery life and reduces noise for electric vehicles.
Off -shore wind power production is becoming more and more relevant in the generation of renewable power. The foundation of wind turbines at the seafl oor is mission critical for this renewable energy source. Our mooring ropes keep the fl oating wind turbines at work and eliminate the need for extensive foundations. Furthermore, off shore power generation is supported by our solutions for submarine power cables that transfer electricity from off shore wind farms to land.
Cement is a key factor in greenhouse gas emissions in the construction industry. To reduce the amount of cement needed and to strengthen cement against tactile forces, steel bars are most often used for enforcement. Bekaert's alternative, Dramix® steel fi bers, helps construction industry players use 50% less steel in weight, compared to traditional steel reinforcement solutions, reducing CO₂ emissions between 20 and 50% per project.
Hydrogen is seen as a key lever in the future energy eco-system. Production of green hydrogen is an area with huge growth potential. All improvements of this process have signifi cant impact on the future global energy strategy for climate neutrality. Bekaert's porous transport layer solutions increase performance and durability of electrochemical devices used in hydrogen production. Our solutions in hydrogen technology extends to wires used for hydrogen refi lling station hoses. We are also pioneering in decarbonization of heating with burners and heat exchangers for hydrogen-ready and energy-effi cient gas boilers.
This section covers the key performance indicators and accompanying information required under Regulation EU 2020/852¹ and the related Delegated Acts² (the EU Taxonomy).
The EU Taxonomy aims to channel capital towards sustainable activities, with the end-goal of fi nancing 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.
The EU Taxonomy can be seen as a green dictionary: a classifi cation system to defi ne which activities are environmentally sustainable. To be considered as such, an activity needs to – among others – contribute substantially to one or more of six environmental objectives³ (via meeting technical screening criteria, i.e., certain performance thresholds and other requirements).
This is the fi rst year that the EU Taxonomy applies, and its deployment will be progressive. For this fi rst year, Bekaert must only report on its share of eligible and non-eligible activities and analyze its potential contribution only for the fi rst two of the six environmental objectives: climate change mitigation and climate change adaptation⁴.
¹ Regulation EU 2020/852 of the European Parliament and of the Council, published in the Offi cial 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 Climate Change Mitigation, Climate Change Adaptation, 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.
⁴ The criteria for the other four environmental objectives are expected to be offi cially approved at the end of 2022.
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.
Reporting on eligibility does not mean that the activity is environmentally sustainable according to the EU Taxonomy, it means that the activity has the potential to be environmentally sustainable if it complies with all the technical screening criteria. An activity that – among others – meets all the technical screening criteria would then be considered as EU Taxonomy aligned.
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 specifi c defi nition provided in the text of the Climate Delegated Act. Therefore, we mapped the eligibility of our products and expenses fi rstly in relation to the descriptions in such Delegated Act, and only using NACE codes (Revision 2) and other reference classifi cations provided by the Sustainable Finance Platform⁵ as a further guide.
We assessed our eligibility by collaborating with and involving each of our four business units in performing the mapping exercise as referred-to above. 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.
⁵ Refer to: https://ec.europa.eu/info/fi les/sustainable-fi nance-taxonomy-nace-alternate-classifi cation-mapping_ en
Below we report on our EU Taxonomy eligibility for 2021, expressed through three KPIs: our share of eligible and non-eligible activities in the Bekaert consolidated sales of 2021, capital expenditure and 'applicable' operational excellence expenses.
Note: consolidated sales is the terminology used in the Bekaert income statement. It has the same defi nition as 'net turnover' as used in the EU Taxonomy. We refer to note 5.1 in Part II – Financial Statements of this report for more detailed information on our revenue recognition principles.
The numerator is comprised of the Bekaert 2021 consolidated sales that are related to the economic activities listed below (the numbers refer to the section in Annex I of the Climate Delegated Act that corresponds to such activity):
All 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.
To avoid double counting, each business unit performed the eligibility analysis separately, for the products manufactured within the business unit. This information was then aggregated and validated by Group Finance, following the same principles as for the consolidated fi nancial reporting.
Examples of eligible products can be found in Part I of this report: Our performance in 2021 - Value Chain.
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 effi ciency off ered 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.
The denominator is comprised of consolidated sales as disclosed in Part II of this report: Financial Statements.
The numerator is comprised of (a) capex related to taxonomy-eligible activities and (b) capex related to other Taxonomy-eligible economic activities (in both cases, we refer to capex invested during the fi scal year 2021), 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:
5.4 Renewal of waste water collection and treatment
7.2 Renovation of existing buildings
7.3 Installation, maintenance and repair of energy effi ciency equipment
7.5 Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings
7.6 Installation, maintenance and repair of renewable energy technologies
Activities 3.1, 3.2, 3.5, 7.3, 7.5 and 7.6 are considered as eligible to-be enabling activities, as referred to in Article 10(1)-point (i) of Regulation (EU) 2020/852. Activity 7.2 is considered as an eligible to-be transitional activity as referred to in Article 10(2)-point (i) of Regulation (EU) 2020/852.
In certain scenarios where invested equipment is used to manufacture both eligible and non-eligible products, we have applied an allocation rule based on the tonnage of eligible products manufactured, to calculate the eligible capex.
To avoid double counting, each business unit separately screened fi rst their capex to identify the capex related to the purchase of output from Taxonomy-eligible economic activities (literal (b) from the referred Section 1.1.2.2). At a second stage, each business unit further screened the capex that was left out from the previous step to link the corresponding expenses to eligible products manufactured by Bekaert (literal (a) of Section 1.1.2.2 of Annex I of the Disclosure Delegated Act). Separately, the Group Finance department identifi ed the capex related to other Taxonomy-eligible economic activities, which was not registered in the accounts of the business units.
The denominator is comprised of Bekaert's total capex invested in the fi nancial year 2021 as disclosed in Part II of this report: Financial Statements, covering additions to tangible assets (PP&E) considered before depreciation, amortization and any remeasurements that may apply.
The concept of opex under the EU Taxonomy does not equal one line item in the Income Statement. The EU Taxonomy has a specifi ed 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 diff erentiate it from the Income Statement lines reported by Bekaert.
The numerator is comprised of (a) 'applicable' opex related to taxonomy-eligible activities and (b) 'applicable' opex related to other Taxonomy-eligible economic activities, as described in Section 1.1.2.2 of Annex I of the Disclosure Delegated Act. The total EU Taxonomy-eligible 'applicable' opex is mainly calculated from the following economic activities:
All 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 costs to individual product lines, we have applied an allocation rule based on the tonnage of eligible products manufactured, to calculate the eligible R&D expenses, building renovation measures, and maintenance and repair expenses.
To avoid double counting, each business unit extracted separately the opex meeting the defi nition of the EU Taxonomy related to the eligible products. Separately, our central purchasing department identifi ed the 'applicable' opex related to other Taxonomy-eligible economic activities, which was not registered in the accounts of the business units.
Currently Bekaert is spending 45% of its total R&D costs to eligible activities. However, in the following years, we intend to allocate most of our R&D to eligible products segments and work on improving our current portfolio of eligible products.
Opex is defi ned 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 fi t within this defi nition of opex.
Each business unit obtained the maintenance and repair costs (which include noncapitalized expenses for building renovation measures) from internal reporting systems.
The Bekaert safety programs guide all employees toward the same safety mindset and behaviors worldwide.
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 offi ces and in our meetings with business partners.
Bekaert also launched, end of 2021, a new safety and compliance learning program, aligned with BeCare. More information on 'Compass' can be found in Part I of this report: Our Performance in 2021: People.
GRI403-2
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.
In line with our BeCare safety program, and to put more emphasis on safety in specifi c 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.
Apart from the behavioral component, we realize that equipment safety is also key in our eff orts 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 in the course of 2022 as another enabler to create a safe environment for all people at the workplace.
GRI 403-2
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.
We monitor workplace conditions such as noise, dust and temperature, and are defi ning and implementing a roadmap to make further improvements. Our new investments consider strict standards with regards to all working conditions.
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 fi lters, 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
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 403-3
69% of our employees in the Bekaert subsidiaries have access to a globally deployed employee assistance program that focuses on mental health. In addition, other specifi c mental health programs run in various entities and are particularly oriented on the impact of the pandemic on well-being.
20 % of our employees followed a training that focused on well-being in 2021.
GRI 403-3, GRI403-6
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.
47% of the injuries that happen at Bekaert involve hands and fi ngers. Despite all safety measures, eight of these incidents in 2021 were life-altering, compared to one life-altering incident in 2020. In safety procedures and during safety trainings, special attention is given to the prevention of hand and fi nger injuries. Other body parts injured were head and neck (16%), upper limbs (13%), lower limbs (9%), feet and toes (6%) and torso, back and organs (7%).
In 2021, Bekaert received a group-wide ISO45001 certifi cate (the safety management system standard) and 31% of the Bekaert plants worldwide were certifi ed to ISO45001. Increased certifi cation to ISO45001 is an ongoing goal.
GRI 403-1, GRI 403-8
On average, each Bekaert employee received 8 hours of safety-related training in 2021.
GRI 403-5
| Key safety performance indicators Bekaert consolidated | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|
| TRIR | 7.17 | 5.62 | 4.30 | 3.96 |
| LTIFR | 4.41 | 3.39 | 2.94 | 2.27 |
| SI rate | 0.13 | 0.13 | 0.02 | 0.10 |
| Key safety performance indicators Bekaert combined (consolidated plants + joint ventures) | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|
| TRIR | 6.61 | 5.18 | 4.02 | 3.67 |
| LTIFR | 3.98 | 3.08 | 2.65 | 2.08 |
| SI rate | 0.11 | 0.13 | 0.02 | 0.12 |
| Group data per region | LTIFR (¹) | LTIFR (¹) | LTIFR (¹) | SI rate (²) | SI rate (²) | SI rate (²) | TRIR (³) | TRIR (³) | TRIR (³) |
|---|---|---|---|---|---|---|---|---|---|
| All (Bekaert payroll employees + contractors |
Bekaert payroll employees |
Contractor | All (Bekaert payroll employees + contractors |
Bekaert payroll employees |
Contractor | All (Bekaert payroll employees + contractors |
Bekaert payroll employees |
Contractor | |
| EMEA | 5.88 | 6.06 | 4.34 | 0.32 | 0.29 | 0.62 | 7.23 | 7.28 | 6.82 |
| Latin America | 1.71 | 1.82 | 1.34 | 0.00 | 0.00 | 0.00 | 1.71 | 1.82 | 1.34 |
| North America | 1.48 | 1.64 | 0.00 | 0.30 | 0.33 | 0.00 | 18.91 | 19.97 | 9.11 |
| Asia Pacifi c | 0.62 | 0.71 | 0.38 | 0.00 | 0.00 | 0.00 | 1.14 | 1.23 | 0.89 |
| JV's in Brazil and Colombia | 0.95 | 1.31 | 0.00 | 0.21 | 0.29 | 0.00 | 2.10 | 2.63 | 0.75 |
* Contractor: employee of a supplier who performs predefi ned 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
| Group data by gender (payroll employees) | Male | Female | ||
|---|---|---|---|---|
| 2020 | 2021 | 2020 | 2021 | |
| LTIFR ⁽¹⁾ | 3.27 | 2.43 | 2.34 | 2.31 |
| SI rate ⁽²⁾ | 0.02 | 0.11 | 0.00 | 0.33 |
| TRIR ⁽³⁾ | 5.01 | 4.30 | 2.88 | 3.47 |
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.
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.
GRI 102-43, GRI 102-44
Average hours of training per employee
On average, each employee received 33 hours of training in 2021.
| Average hours of training | 2019 | 2020 | 2021 | |||
|---|---|---|---|---|---|---|
| per employee per region | Male | Female | Male | Female | Male | Female |
| EMEA | ||||||
| Blue collars | 19 | 14 | 12 | 10 | 37 | 37 |
| Salaried professionals | 16 | 16 | 15 | 8 | 25 | 26 |
| Management | 8 | 10 | 12 | 16 | 17 | 20 |
| Latin America | ||||||
| Blue collars | 75 | 9 | 7 | 7 | 39 | 150 |
| Salaried professionals | 32 | 34 | 7 | 6 | 23 | 21 |
| Management | 44 | 46 | 11 | 31 | 34 | 43 |
| North America | ||||||
| Blue collars | 36 | 40 | 35 | 33 | 22 | 14 |
| Salaried professionals | 20 | 13 | 22 | 7 | 17 | 9 |
| Management | 13 | 6 | 11 | 8 | 20 | 19 |
| Asia Pacifi c | ||||||
| Blue collars | 49 | 29 | 23 | 31 | 37 | 58 |
| Salaried professionals | 22 | 11 | 12 | 13 | 24 | 16 |
| Management | 12 | 12 | 14 | 21 | 39 | 27 |
Note: in 2021, intensive training programs were set up in Latin America to bring more female workers in manufacturing and other operational roles. This clarifi es the high average number of training hours for female operators in the region.
GRI 404-1
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. 64% of our employees worldwide are covered by collective bargaining agreements.
Agreements with trade unions are locally concluded and include the following elements:
GRI 102-41, GRI 403-4, GRI 407-1
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 403-4, GRI 403-3, GRI 403-9
Bekaert has research & innovation partnerships with the following partners:
| Partner | Innovation domain |
|---|---|
| Technical University of Denmark (DTU) | Eco2Fuel |
| University Politecnica Valencia (UPV) | Eco2Fuel |
| Consiglio Nazionale delle Ricerche (CNR) | Eco2Fuel |
| Centro Ricerch e FIAT | Eco2Fuel |
| Flemish Institute for Technological (VITO) | Hyve |
| IMEC | Hyve |
| TNO (Toegepast Natuurweterschappelijk Onderzoek) | MooringSense |
| SINTEF | MooringSense |
| CTC (Foundacion Centro Tecnologico de Componentes | MooringSense |
| UCD University College Dublin | Modeling |
| Imperial College London | Modeling |
| Universitas Studiorum Zagrabiensis | Modeling |
| CEIT | Modeling |
| Ghent University | Modeling |
| OCAS | Physical Metallurgy |
| CRM (Centre de Recherches Metallurgie) | Metallic Coatings |
| INSA Lyon | Physical Metallurgy |
| Université de Lille (UMET) | Physical Metallurgy |
| KU Leuven | |
| Flanders' Make | Digital - engineering |
| VKI Von Karman Institute | Metallic coatings - hot dip |
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 via Bekaert's online global learning platform.
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 2021 and it is our goal to maintain full annual commitment results. We already trained the most of our operators on the principles of the Code of Conduct. The isolation procedures imposed by the Covid-19 pandemic prevented us, however, from achieving full training in 2021. We aim to reach our goal by the end of 2022.
In 2021, we rolled out a mandatory anti-bribery and 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 specifi c target audience of managers, based on Hay classifi cation level and function. 100% of the addressees completed the training and passed the test.
Training programs on the Code of Conduct and on anti-corruption and anti-bribery policies are also provided to specifi c, functional groups (e.g., the purchasing function).
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 to personnel on the Bekaert Intranet.
Our Code of Conduct contains a (whistleblowing) procedure to raise an integrity concern. Employees have the choice between informing their supervisor, HR manager or the Internal Audit manager, sending an email to [email protected] or reporting a concern via the Bekaert website where it can also be done anonymously.
In 2021, 62 integrity allegations were reported. 23 were considered valid for further investigation. 6 of the 62 allegations related to discrimination or harassment and one related to bribery & corruption. After investigation respectively 2 and 1 case were found substantiated and were dealt with. All concerns and complaints are handled confi dentially and Bekaert takes the necessary measures to protect employees against any form of retaliation when reporting a concern. This information, including the follow-up process, is regulated through a formal procedure that follows the European Union's Directive for the protection of people reporting on breaches of Union law (or 'Whistleblower Protection Directive').
We want to encourage all our employees to 'Speak Up' when having factual or suspected integrity concerns and questions. Early 2021 a global 'Speak Up' campaign was launched in all our sites. The campaign materials are available in all relevant languages.
All diversity data apply to Bekaert subsidiaries (excluding joint ventures).
Throughout our organization, 430 employees have another nationality than that of the country they work in. The countries where we have the largest foreign employee workforce are Chile (133 foreign employees or 9% of the Chilean workforce), Belgium (67 foreign employees or 5% of the Belgian workforce) and Slovakia (86 foreign employees or 4% of the Slovakian workforce).
| NATIONAL DIVERSITY - 31 December 2021 | # People | # Nationalities | # Non-native ¹ | % Non-native |
|---|---|---|---|---|
| BOARD OF DIRECTORS | 13 | 8 | 7 | 54% |
| Bekaert Group Executive (BGE) | 8 | 5 | 5 | 63% |
| Senior Vice Presidents (B16-B18) ² | 14 | 5 | 5 | 36% |
| Next leadership level (B13-B15) ² | 93 | 20 | 47 | 51% |
| TOTAL LEADERSHIP TEAM | 115 | 22³ | 57 | 50% |
¹ Non-native = nationality other than the one of the mother company's social seat (i.e. Belgium)
² Hay classifi cation reference
³ Sum of nationalities across leadership team
GRI 405-1
| GENDER DIVERSITY - 31 December 2021 | % Male | % Female |
|---|---|---|
| Blue collars | 93% | 7% |
| Salaried professionals ¹ | 69% | 31% |
| Management ² | 80% | 20% |
| TOTAL BEKAERT EMPLOYEES | 87% | 13% |
¹ In previous reports referred to as white collars
² B7 and above (Hay classifi cation reference)
GRI 405-1
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 fi ts 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 2021). 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.
GRI 405-1
Gender diversity in the Board of Directors and in the Leadership Team of Bekaert:
| GENDER DIVERSITY - 31 December 2021 | # People | % Male | % Female |
|---|---|---|---|
| BOARD OF DIRECTORS | 13 | 62% | 38% |
| Bekaert Group Executive (BGE) | 8 | 87% | 13% |
| Senior & next leadership level ¹ | 107 | 81% | 19% |
| TOTAL LEADERSHIP TEAM | 115 | 82% | 18% |
¹ B13-B18 (Hay classifi cation reference)
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
By 2030, Bekaert aims to reach a gender diversity ratio of 33% at the leadership level.
GRI 405-1
| AGE DIVERSITY - 31 December 2021 | % Under 30 years old |
% 30-50 Years old % Over 50 years old | |
|---|---|---|---|
| Blue collars | 19% | 67% | 14% |
| Salaried professionals ¹ | 12% | 70% | 18% |
| Management ² | 2% | 68% | 30% |
| TOTAL BEKAERT EMPLOYEES | 16% | 68% | 16% |
| GRI 405-1 |
¹ B7 and above (Hay classifi cation reference)
Age diversity in Bekaert's highest governance bodies:
| AGE DIVERSITY - 31 December 2021 | # People | % 30-50 Years old % Over 50 years old | |
|---|---|---|---|
| BOARD OF DIRECTORS | 13 | 31% | 69% |
| Bekaert Group Executive (BGE) | 8 | 38% | 62% |
| Senior Vice Presidents (B16-B18) ¹ | 14 | 21% | 79% |
| Next leadership level (B13-B15) ¹ | 93 | 42% | 58% |
| TOTAL LEADERSHIP TEAM | 115 | 39% | 61% |
¹ Age diversity in Bekaert's highest governance bodies: Hay classifi cation reference
Employment data:
| REGION - 31 December 2021 | EMEA | North America | Latin America | Asia Pacifi c | TOTAL |
|---|---|---|---|---|---|
| Blue Collars | 6 103 | 1 089 | 1 892 | 8 150 | 17 234 |
| Male | 5 258 | 1 029 | 1 823 | 7 904 | 16 015 |
| Female | 845 | 60 | 69 | 246 | 1 219 |
| Salaried professionals | 1 412 | 256 | 1 194 | 1 819 | 4 681 |
| Male | 920 | 159 | 766 | 1 399 | 3 244 |
| Female | 492 | 97 | 428 | 420 | 1 437 |
| Management | 700 | 157 | 188 | 608 | 1 653 |
| Male | 571 | 129 | 155 | 473 | 1 328 |
| Female | 129 | 28 | 33 | 135 | 325 |
| Total Male | 6 749 | 1 317 | 2 745 | 9 776 | 20 587 |
| Total Female | 1 466 | 185 | 529 | 801 | 2 981 |
| GRAND TOTAL | 8 215 | 1 502 | 3 274 | 10 577 | 23 568 |
87% of people employed by Bekaert have a permanent contract, 13% has a temporary contract. Employees with a temporary contract are usually on the payroll of GRI 102-8 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. GRI 102-8
| New hires in 2021 | Total | Male | Female |
|---|---|---|---|
| number of new hires | 2 767 | 2 311 | 456 |
| % new hires on total number of employees | 12% | 10% | 2% |
| % new hires on total number of new hires | 84% | 16% |
GRI 401-1
| New hires in 2021 per region | EMEA | Latin America | North America | Asia Pacifi c |
|---|---|---|---|---|
| number of new hires | 996 | 622 | 450 | 685 |
| % new hires on total number of employees | 4% | 3% | 2% | 3% |
| % new hires on total number of new hires | 36% | 22% | 16% | 25% |
GRI 401-1
| New hires in 2021 per employee category | Blue collar | Salaried professional |
Management |
|---|---|---|---|
| % new hires on total number of employees | 9% | 2% | 1% |
| % new hires on total number of new hires | 75% | 20% | 5% |
GRI 401-1
| # vacancies | 980 |
|---|---|
| % vacancies fi lled within 90 days | 70% |
| % vacancies open longer than 90 days | 30% |
| Employee turnover in 2021 | Total | Male | Female |
|---|---|---|---|
| turnover (number) taking into account voluntary leave | 1 090 | 935 | 155 |
| turnover (number) taking into account all personnel exits (voluntary leave – dismissal – retirement – end of temporary contract – death in service) | 2 093 | 1 804 | 289 |
| turnover (%) taking into account voluntary leave | 5% | 5% | 5% |
| turnover (%) taking into account all personnel exits (voluntary leave – dismissal – retirement – end of temporary contract – death in service) | 9% | 9% | 10% |
| Employee turnover in 2021 per region | Latin America | North America | Asia Pacifi c | |
|---|---|---|---|---|
| turnover (number) taking into account voluntary leave | 127 | 153 | 552 | |
| turnover (number) taking into account all personnel exits (voluntary leave – dismissal – retirement – end of temporary contract – death in service) |
326 | 356 | 787 | |
| turnover (%) taking into account voluntary leave | 4% | 10% | 5% | |
| turnover (%) taking into account all personnel exits (voluntary leave – dismissal – retirement – end of temporary contract – death in service) |
10% | 23% | 7% |
GRI 401-1
| Employee turnover in 2021 per employee category | Salaried professional | Management | |
|---|---|---|---|
| turnover (number) taking into account voluntary leave | 752 | 245 | 93 |
| turnover (number) taking into account all personnel exits (voluntary leave – dismissal – retirement – end of temporary contract – death in service) | 1 480 | 446 | 167 |
| turnover (%) taking into account voluntary leave | 4% | 5% | 6% |
| turnover (%) taking into account all personnel exits (voluntary leave – dismissal – retirement – end of temporary contract – death in service) | 8% | 10% | 6% |
GRI 401-1
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 eff ort 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.
| EMPLOYEE CATEGORY | Percentage |
|---|---|
| Managers | 100% |
| Salaried professionals | 100% |
| Blue collars | 76% |
¹ Excluding joint ventures
We off er competitive salaries and benefi ts designed to enhance the fi nancial, physical and overall well-being of our employees and their families. Our off erings diff er from country to country and are often adapted to local social security policies. We provide a wide range of employee benefi ts that may include retirement benefi ts, healthcare plans, service awards, labor accident disability coverage and paid leave. For detailed information on employee benefi ts, we refer to Part II Financial Statements section 6.15.
Benefi ts provided to full-time and part-time employees by signifi cant locations of operation (> 1 000 employees):
| BENEFIT | Belgium | Slovakia | China | Chile | US | Indonesia |
|---|---|---|---|---|---|---|
| Life insurance | Yes | Yes | Yes | Yes | Yes | Yes |
| Health care | Yes | No | Yes | Yes | Yes | Yes |
| Disability coverage | Yes | Yes | Yes | Yes | Yes | Yes |
| Parental leave | Yes | Yes | Yes | Yes | Yes | Yes |
| Retirement provision | Yes | Yes | Yes | Yes | Yes | Yes |
| Stock ownership | No | No | No | No | No | No |
These benefi ts are not provided to temporary workers ('interim workers') who are not on the Bekaert payroll.
GRI 401-2, GRI 403-6
Bekaert has restructured several sites in 2021. The management only implements such measures when other options to restore the performance in view of securing a sustainable, profi table future, have failed or are non-existent.
In implementing such measures, the management aims at mitigating the social impact for the aff ected employees by considering re-industrialization, re-employment help and a fair severance package.
GRI 404-2
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 specifi ed, the (combined) disclosures in this report include in addition the performance metrics of the joint ventures considered at 100% ownership.
GRI 102-48, GRI 102-49
This report covers the activities between 1 January 2021 and 31 December 2021, unless stated diff erently and if relevant for the report.
Bekaert reports its fi nancial results twice per year (half-year results and full-year results). Bekaert reports annually on its sustainability performance.
GRI 102-50, GRI 102-52
The content of this report has been defi ned considering the most signifi cant indicators of our activities, the impact of and commitment to the company's interest groups, the eff orts in enhancing sustainability and the level of detail established by the GRI Sustainability Reporting Standards and the current NFRD (Non-Financial Reporting Directive).
This report complies with iXBRL/ESEF regulations and includes the outcome of the EU Taxonomy eligibility disclosure requirements. The structure and content of this fi rst integrated annual report are based on the framework Guidelines of Value Reporting Foundation (International Reporting Council (IIRC) & Sustainability Accounting Standards Board (SASB).
The consolidated fi nancial 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.
This report has been prepared in accordance with the GRI Standards: Core option. Global Reporting Initiative (GRI) is a non-profi t organization that promotes economic, environmental and social sustainability.
Bekaert's responsible performance in 2021 has been recognized by its inclusion in the Solactive ISS ESG Screened Europe Small Cap Index and the Solactive ISS ESG Screened Developed Markets Small Cap 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 2021 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 fi nancial 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.
After having obtained a gold level during four consecutive years, Bekaert was awarded, for the company's 2020 data disclosures, a platinum recognition level from EcoVadis.
EcoVadis is an independent sustainability rating agency whose methodology is built on international CSR standards. The agency states that Bekaert forms part of the top 1% of all companies assessed in the same industry category.
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 C level for both listings based on 2020 data disclosures.
For the GRI Content Index Service, GRI Services reviewed that the GRI content index is clearly presented and the references for all disclosures included align with the appropriate sections in the body of the report.
This service was performed on the English version of the report.
| GENERAL DISCLOSURES | |||
|---|---|---|---|
| GRI STANDARD | DISCLOSURE | Page numbers and/ or URL and/or direct answers |
|
| GRI 101 Foundation 2016 | |||
| GRI 102 General disclosure 2016 | ORGANIZATIONAL PROFILE | ||
| Disclosure 102-1 Name of the organization | 9 | ||
| Disclosure 102-2 Activities, brands, products & services | 9, 12, 13 | ||
| Disclosure 102-3 Location of headquarters | 9 | ||
| Disclosure 102-4 Location of operations | 10 | ||
| Disclosure 102-5 Ownership and legal form | 282 | ||
| Disclosure 102-6 Markets served | 9 | ||
| Disclosure 102-7 Scale of the organization | 9 | ||
| Disclosure 102-8 Information on employees and other workers | 266 | ||
| Disclosure 102-9 Supply chain | 39 | ||
| Disclosure 102-10 Signifi cant changes to the organization and its supply chain | 39, 40 | ||
| Disclosure 102-11 Precautionary principle or approach | 45, 92 | ||
| Disclosure 102-12 External initiatives | 51 | ||
| Disclosure 102-13 Membership of associations | 49 | ||
| STRATEGY | |||
| Disclosure 102-14 Statement from the most senior-decision makers | 7 | ||
| ETHICS AND INTEGRITY | |||
| Disclosure 102-16 Values, principles, standards and norms of behavior | 9, 51, 263 | ||
| GOVERNANCE | |||
| Disclosure 102-18 Governance structure | 19, 25 | ||
| Disclosure 102-23 Chair of the highest governance body | 19 | ||
| STAKEHOLDER ENGAGEMENT | |||
| Disclosure 102-40 List of stakeholder groups | 29, 30 | ||
| Disclosure 102-41 Collective bargaining agreements | 261 |
| Disclosure 102-42 Identifying and selecting stakeholders | 30 |
|---|---|
| Disclosure 102-43 Approach to stakeholder engagement | 260 |
| Disclosure 102-44 Key topics and concerns raised | 260 |
| REPORTING PRACTICE | |
| Disclosure 102-45 Entities included in the consolidated fi nancial statements | 272 |
| Disclosure 102-46 Defi ning report content and topic Boundaries | 272 |
| Disclosure 102-47 List of material topics | 32 |
| Disclosure 102-48 Restatements of information | 272 |
| Disclosure 102-49 Changes in reporting | 272 |
| Disclosure 102-50 Reporting period | 272 |
| Disclosure 102-51 Date of most recent report | 272 |
| Disclosure 102-52 Reporting cycle | 272 |
| Disclosure 102-53 Contact point for questions regarding the report | 282 |
| Disclosure 102-54 Claims of reporting in accordance with the GRI Standards | 273 |
| Disclosure 102-55 GRI Content Index | 274 |
| Disclosure 102-56 External assurance | No external assurance |
| GRI STANDARD | DISCLOSURE | Page numbers and/ or URL and/or direct answers |
|
|---|---|---|---|
| ECONOMICS | |||
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | ||
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | ||
| Disclosure 201-1 Direct economic value generated and distributed | 34, 37 | ||
| GRI 201 Economic performance 2016 | Disclosure 201-3 Defi ned benefi t plan obligations and other retirement plans | 270 | |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | ||
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | ||
| GRI 204 Procurement practices 2016 | Disclosure 204-1 Proportion of spending on local suppliers | 39 | |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | ||
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | ||
| GRI 205 Anti-corruption 2016 | Disclosure 205-2 Communication and training about anti-corruption policies and procedures | 51, 263 | |
| Disclosure 205-3 Confi rmed incidents of corruption and actions taken | 263 |
| ENVIRONMENTAL | ||
|---|---|---|
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 301 Materials 2016 | Disclosure 301-2 Recycled input materials used | 40, 44 |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| Disclosure 302-1 Energy consumption within the organization | 41, 245 | |
| GRI 302 Energy 2016 | Disclosure 302-3 Energy intensity | 245 |
| Disclosure 302-4 Reduction of energy consumption | 44 |
| Water and e uents | ||
|---|---|---|
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| Disclosure 303-1 Interactions with water as a shared resource | 248 | |
| Disclosure 303-2 Management of water discharge-related impacts | 249 | |
| GRI 303 Water and effl uents 2018 | Disclosure 303-3 Water withdrawal | 248 |
| Disclosure 303-4 Water discharge | 249 | |
| Disclosure 303-5 Water consumption | 249 | |
| GRI 103 Management approach 2016 | Disclosure 103-1 Explanation of the material topic and its Boundary | 32 |
| Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| Disclosure 305-1 Energy direct (Scope 1) GHG emissions | 246 | |
| GRI 305 Emissions 2016 | Disclosure 305-2 Energy indirect (Scope 2) GHG emissions | 246 |
| Disclosure 305-3 Other indirect (Scope 3) GHG emissions | 247 | |
| Disclosure 305-4 GHG emissions intensity | 246, 247 | |
| Disclosure 305-5 Reduction of GHG emissions | 246, 247 | |
| GRI 103 Management approach 2016 | Disclosure 103-1 Explanation of the material topic and its Boundary | 32 |
| Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 308 Supplier Environmental assessment 2016 | Disclosure 308-1 New suppliers that were screened using environmental criteria | 40 |
| SOCIAL | ||
|---|---|---|
| GRI 103 Management approach 2016 | Disclosure 103-1 Explanation of the material topic and its Boundary | 32 |
| Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 401 Employment 2016 | Disclosure 401-1 New employee hires and employee turnover | 267, 268 |
| Disclosure 401-2 Benefi ts provided to full-time employees that are not provided to temporary or part-time employees | 270 |
| Occupational health and safety | ||
|---|---|---|
| GRI 103 Management approach 2016 | Disclosure 103-1 Explanation of the material topic and its Boundary | 32 |
| Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| Disclosure 403-1 Occupational health and safety management system | 258 | |
| Disclosure 403-2 Hazard identifi cation, risk assessment, and incident investigation | 257 | |
| Disclosure 403-3 Occupational health services | 258, 261 | |
| Disclosure 403-4 Worker participation, consultation, and communication on occupational health and safety | 261 | |
| GRI 403 Occupational health and safety 2018 | Disclosure 403-5 Worker training on occupational health and safety | 258 |
| Disclosure 403-6 Promotion of worker health | 258, 270 | |
| Disclosure 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships |
244, 257 | |
| Disclosure 403-8 Workers covered by an occupational health & safety management system | 258 | |
| Disclosure 403-9 Work-related injuries | 258, 259, 261 | |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| Disclosure 404-1 Average hours of training per year per employee | 52, 260 | |
| GRI 404 Training and education 2016 | Disclosure 404-2 Programs for upgrading employee skills and transition assistance programs | 52, 270 |
| Disclosure 404-3 Percentage of employees receiving regular performance and career development reviews | 269 | |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 405 Diversity and equal opportunity 2016 | Disclosure 405-1 Diversity of governance bodies and employees | 264, 265, 266 |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 406 Non-discrimination 2016 | Disclosure 406-1 Incidents of discrimination and corrective actions taken | 263 |
| GRI 103 Management approach 2016 | Disclosure 103-1 Explanation of the material topic and its Boundary | 32 |
| Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 407 Freedom of association and collective bargaining 2016 | Disclosure 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk |
40, 261 |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 408 Child Labor 2016 | Disclosure 408-1 Operations and suppliers at signifi cant risk for incidents of child labor | 40, 51 |
| Disclosure 103-1 Explanation of the material topic and its Boundary | 32 | |
| GRI 103 Management approach 2016 | Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 |
| Disclosure 103-3 Evaluation of the management approach | 19 |
| GRI 409 Forced or Compulsory Labor 2016 | Disclosure 409-1 Operations and suppliers at signifi cant risk for incidents of forced or compulsory labor | 40, 51 |
|---|---|---|
| GRI 103 Management approach 2016 | Disclosure 103-1 Explanation of the material topic and its Boundary | 32 |
| Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 414 Supplier Social Assessment 2016 | Disclosure 414-1 New suppliers that were screened using social criteria | 40 |
| Disclosure 414-2 Negative social impacts in the supply chain and actions taken | 40 | |
| GRI 103 Management approach 2016 | Disclosure 103-1 Explanation of the material topic and its Boundary | 32 |
| Disclosure 103-2 The management approach and its components | 19, 35, 40, 43, 51, 52, 53, 54 | |
| Disclosure 103-3 Evaluation of the management approach | 19 | |
| GRI 418 Customer privacy 2016 | Disclosure 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data | 52, 263 |
| GLOSSARY | |
|---|---|
| GENDER | |
| Gender diversity % | Indication of the opposite (minority) gender share |
| Leadership team | Bekaert Group Executive + B13 and above managers (Hay classifi cation reference) |
| SAFETY | |
| Serious injuries | Accidents with life-threatening/life altering injuries |
| BeCare coverage % | % of employees trained in BeCare, Bekaert's global safety program |
| ENVIRONMENT | |
| kWh/GWh | Kilowatt per hour / Gigawatt per hour 1 gWh = 1 mln kWh |
| Energy intensity ratio | The energy (electricity and thermal) used per ton of end product produced |
| Greenhouse gas ratio or carbon dioxide (CO₂) exhaust in kg per ton end product produced (intensity corrected | |
| GHG intensity ratio | with renewable energy share) |
| Scope 1 emissions | CO₂ emissions from sources owned or controlled by us (in our plants: e.g. natural gas) |
| Scope 2 emissions | CO₂ emissions from purchased/acquired electricity, heating, cooling and steam for consumption in our plants |
| Scope 3 emissions | CO₂ emissions that are a consequence of our activities, but from sources not owned or controlled by us |
| Energy > CO₂ conversion | Based on IEA/EPA rules |
| Scope 3 emissions: CO₂ emission of fuel x fuel savings for tires reinforced with Bekaert ST/UT steel cord. | |
| Calculated for passenger and truck tires on the basis of eff ective (and targeted) Bekaert sales; generally | |
| Annual CO₂ savings attributable to Bekaert ST/UT tire cord | accepted conversion tables fuel/CO₂; and test results of ST/UT on rolling resistance (results vary in function |
| of tire design and other factors from 2% to 7%. In our calculations we took the lowest assumption (2%) as a | |
| parameter so that our data (actuals and targets) represent the absolute minimum impact of our products on | |
| CO₂ reduction). |
| Oswald Schmid | Chief Executive Offi cer |
|---|---|
| Juan Carlos Alonso | Chief Strategy Offi cer |
| Kerstin Artenberg | Chief Human Resources Offi cer |
| Taoufi q Boussaid | Chief Financial Offi cer |
| Yves Kerstens | Divisional CEO Specialty Businesses and Chief Operations Offi cer |
| Arnaud Lesschaeve | Divisional CEO Rubber Reinforcement |
| Curd Vandekerckhove | Divisional CEO Bridon-Bekaert Ropes Group |
| Stijn Vanneste | Divisional CEO Steel Wire Solutions |
| Jan Boelens | Senior Vice President Steel Wire Solutions EMEA |
|---|---|
| Bruno Cluydts | Chief Strategy Offi cer BBRG |
| Philip Eyskens | Chief Legal & Compliance Offi cer |
| Annalisa Gigante | Chief Innovation and Technology Offi cer |
| Katiana Iavarone | Chief Procurement Offi cer |
| 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 |
| Steven Parewyck | Senior Vice President Steel Wire Solutions Latin America North and North America |
| Raf Rentmeesters | Senior Vice President Building Products |
| Adam Touhig | Senior Vice President Rubber Reinforcement Asia |
| Gunter Van Craen | Chief Digital & Information Offi cer (CIO) |
| Geert Voet | Senior Vice President Steel Wire Solutions South and Central America |
| Zhigao Yu | Senior Vice President Rubber Reinforcement Technology |
The undersigned persons state that, to the best of their knowledge:
On behalf of the Board of Directors:
Oswald Schmid Chief Executive Director
Jürgen Tinggren Chairman of the Board of Directors
Isabelle Vander Vekens
The Auditor's Report is included in the Financial Statements of this annual report.
Katelijn Bohez, VP Sustainable Finance & Community Relations
GRI 102-53
Katrien Strobbe - Strobbe Design Eduardo Chaves - Bekaert
This report may contain forward-looking statements. Such statements refl ect 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 diff erent 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.
bekaert.com [email protected] T +32 56 76 61 00
GRI 102-5
The annual report for the 2021 fi nancial year is available in English and Dutch on annualreport.bekaert.com
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