Press release: Bekaert delivers strong cash generation and improved margins

Press release

Regulated Information - Inside information 1 March 2024 • 7:00 a.m. CET

Investor Relations

Guy Marks

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Press Katelijn Bohez

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bekaert.com

2023 Full Year Results

Bekaert delivers strong cash generation and improved margins

Sales at € 4.3 billion • EBITu1 of € 388 million (margin 9.0%) • FCF1 up 40% • Leverage remains low at 0.5x Net debt/EBITDAu1 • Proposed dividend of € 1.80 per share (+9%)

Bekaert delivered a resilient financial performance in 2023, further improving profit margins (EBITu margin at 9.0%, up 80bps vs FY2022) and delivering strong cash flows (Free Cash Flow of € 267 million, up +40% y-on-y). Despite lower volumes and weaker conditions in many of its end markets, the business continues to benefit from the successful execution of Bekaert's strategy, maintaining pricing discipline, enhancing the mix of higher margin products, and driving cost efficiencies. Looking ahead, the repositioning to target new growth opportunities linked to the energy transition and decarbonization trends continues and supports the company's ambitious financial targets for 2026.

Financial Highlights2

• Consolidated sales of € 4.3 billion (-13.5%) and combined sales3 of € 5.3 billion (-13.9%), driven primarily by the reversal of raw material cost inflation, lower volumes and an unfavorable impact from exchange rate movements

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• The reversal of previous input cost inflation reduced sales by € -437 million and lower volumes (-3.7%) reduced sales by € -188 million. Currency effects had an impact of € -152 million.
• Successful focus on price and mix optimization towards higher margin products increased sales by € +101 million.

Gross profit underlying remained stable despite lower sales (€ 745 million vs € 749 million in FY2022) at a margin of 17.2% (vs 15.0% in FY2022)

Strong operating result and margin performance, driven by ongoing business mix improvements including the contribution of higher margin growth applications

• EBITDAu1 of € 561 million (-5.1%), delivering a margin on sales of 13.0% (improvement of +120bps vs FY2022)
• EBITu1 of € 388 million (-5.3%), resulting in a margin of 9.0% (vs 8.2% in FY2022)

EPS from continued operations of € 4.75 (up +5.5% vs € 4.504 in FY2022)

Strong cash conversion, despite lower sales

• Free Cash Flow (FCF) of € 267 million, up +40% compared to € 191 million in FY2022, benefiting from further improved working capital management
• Net debt of € 254 million (€ 380 million in FY2022) including proceeds of the disposal of Steel Wire Solutions businesses in Chile and Peru, resulting in net debt to EBITDAu of 0.5x

• Proposed dividend of € 1.80 per share (+9% y-on-y)

• EBITu = underlying EBIT, EBITDAu = underlying EBITDA and FCF = Free Cash Flow and all are defined Alternative Performance Measures

(APMs). The full list of all APMs can be found at the end of the document (note 11).

• All comparisons are relative to the financial year 2022, unless otherwise indicated. All figures are adjusted to exclude the disposed businesses in Chile and Peru, except the 2022 Free Cash Flow.

• Combined sales are sales of fully consolidated companies plus 100% of sales of joint ventures and associates after intercompany elimination.
  4 Comparing 2023 EPS with 2022 EPS from continued operations in order to have a like-for-like comparison, excluding disposed businesses.

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Operational and strategic highlights

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Strong pricing progress from ongoing mix improvements with higher added value products and applications, minimizing the impact of lower volumes

Intense focus on cost efficiencies and operational excellence, including reduced procurement costs as part of an ongoing range of initiatives, as well as further footprint rationalization including:

• Closure of a Rubber Reinforcement plant in China in Q3 2023
• Decision to close two Steel Wire Solutions plants in India and Indonesia in December 2023

Ongoing successful strategic execution, re-positioning the business towards higher margin, higher growth and less commoditized sectors, and focusing on growth markets, innovation, and sustainability:

• Increased customer penetration of higher margin 4D and 5D Dramix® products
• Continue to scale production in Currento® (porous transport layer for hydrogen electrolyzers) having doubled sales in 2023
• Significant customer interest in Armofor® in both traditional and clean energy applications

Signed agreement with Toshiba to move downstream into membrane electrode assembly, growing Bekaert's capabilities in hydrogen electrolysis

Partnership with ABB to deliver predictive maintenance services for mine hoist systems

12 MWp solar power farm at the production plant in Burgos, Spain, now fully operational The disposal of Steel Wire Solutions businesses in Chile and Peru completed

Outlook

The financial performance delivered in 2023 and the company's robust financial position give us confidence in our ability to further deliver on our strategic priorities. Whilst economic uncertainties continue and a number of end markets remain challenging, our trading in 2024 has started well across the majority of our business units and management anticipates modest sales growth and at least stable margins in 2024.

Looking beyond 2024, we also remain confident in our targets of a sales growth rate of more than 5% per year in the mid-term and from 2026 an EBITu margin of more than 10%, ROCEu of more than 20% and over 50% of sales generated from sustainable solutions.

Committed to return value to our shareholders

The Board of Directors is committed to maintaining a strategic capital allocation policy, balancing investment in future growth and innovation, with maintaining a strong balance sheet and growing shareholder returns over time. Over the last two years Bekaert has successfully returned more than € 400 million, through share buyback programs of approximately € 240 million and a significantly increased dividend, up 50% in 2022, and a further 10% increase in 2023.

The continued successful execution of the strategic plan in recent years has strengthened Bekaert's financial performance, operational resilience and consistency, balance sheet position, cash generation potential, and the returns to shareholders.

Whilst this strategic plan remains clear and unchanged, the arrival of the new CEO, Yves Kerstens, in September 2023, has been a catalyst for the Board to review capital allocation priorities. Building on the strong foundations of business and financial improvements in recent years, the Board has concluded that it is now the right time to accelerate this plan and Bekaert's transformational agenda, to take advantage of growth opportunities. Therefore, the Board intends to prioritize investment in the business in the next 12-24 months, both organically and inorganically, and has taken the decision to pause the share buyback program.

The group intends to maintain its policy of progressively growing the dividend year-on-year and today announces a gross dividend of € 1.80 per share (an increase of 9% y-on-y), to be proposed by the Board at the Annual General Meeting of Shareholders in May 2024.

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Notes

All sales and income statement items exclude any contribution from the disposed Steel Wire Solutions businesses in Chile and Peru. In-line with IFRS 5, the 2022 comparative data has been restated on the same basis enabling a like-for-like comparison. The 2022 balance sheet data has not been restated and also the 2022 cash flow statement was not adjusted for the disposed entities. The 2023 balance sheet no longer contains the disposed net assets. Note 10 provides more information on the impact of the disposal adjustments.

Consistent with current accounting policies and based on more mature R&D project and portfolio management processes, the criteria for capitalizing expenditure on development activities have now been met for certain development projects. This has led to a capitalization of € 7.3 million of development expenses for 2023.

Conference Call

The CEO and the CFO of Bekaert will present the 2023 results to the investment community at 10:00 a.m. CET on Friday March 1st. This presentation can be accessed live upon registration via the Bekaert website (bekaert.com/en/investors)and will be available on the website after the event.

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Sales

Consolidated and combined sales per segment - in millions of €

Consolidated third party sales	2022	2023	Share	Variance5	Organic	FX
Rubber Reinforcement	2 198	1 881	43%	-14%	-10%	-4%
Steel Wire Solutions	1 427	1 169	27%	-18%	-16%	-2%
Specialty Businesses	772	677	16%	-12%	-10%	-2%
BBRG	585	589	14%	+1%	+4%	-3%
Group	22	12	-	-	-	-
Total	5 004	4 328	100%	-14%	-11%	-3%
Combined third party sales6	2022	2023	Share	Variance5	Organic	FX
Rubber Reinforcement	2 465	2 070	38%	-16%	-13%	-4%
Steel Wire Solutions	2 385	2 008	38%	-16%	-15%	-1%
Specialty Businesses	772	677	13%	-12%	-10%	-2%
BBRG	585	589	11%	+1%	+3%	-3%
Group	5	4	-	-	-	-
Total	6 212	5 347	100%	-14%	-12%	-2%

2023 quarter-on-quarter progress - in millions of €

Consolidated third party sales	1st Q	2nd Q	3rd Q	4th Q	Q4 y-o-y7
Rubber Reinforcement	539	480	448	414	-17%
Steel Wire Solutions	327	307	277	257	-22%
Specialty Businesses	173	176	164	165	-2%
BBRG	152	157	144	135	-15%
Group	3	4	3	2	-
Total	1 194	1 124	1 036	973	-16%
Combined third party sales6	1st Q	2nd Q	3rd Q	4th Q	Q4 y-o-y7
Rubber Reinforcement	593	526	496	455	-20%
Steel Wire Solutions	548	524	487	449	-19%
Specialty Businesses	173	176	164	165	-2%
BBRG	152	157	144	135	-15%
Group	-	2	-	1	-
Total	1 467	1 385	1 291	1 204	-17%

Bekaert's consolidated sales reached € 4 328 million in 2023, -13.5% lower than last year. The single biggest impact was the effect of the passed-on lower raw material costs due to a reversal of the 2022 inflation (-8.7%), which was partly offset by an improved product mix and pricing (+2.0%). Volumes had an impact of -3.7% and unfavorable currency impacts, mainly in China, US and India, reduced the top line by another -3.0%.

The sales in Bekaert's joint ventures in Brazil amounted to € 1 019 million, -16.5% lower than last year. The main impact was the combined effect of lower input costs and price mix (-13.0%) and to a lesser extent lower volumes (-4.3%). Currency effects added +0.8% to the top line. Including joint ventures, combined sales6 decreased by -13.9%, reaching € 5 347 million.

• Comparisons are relative to the financial year 2022, unless otherwise indicated. Full year 2022 sales figures have been adjusted to exclude

the disposed businesses in Chile and Peru.

• Combined sales are sales of fully consolidated companies plus 100% of sales of joint ventures and associates after intercompany elimination.
  7 Q4 year-on-year sales: 4th quarter 2023 versus 4th quarter 2022

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Financial Statement - Summary

		Underlying		Reported
in millions of €	2022	2023	H1 2023	H2 2023	2022	2023
Consolidated sales	5 004	4 328	2 318	2 010	5 004	4 328
Operating result (EBIT)	410	388	226	163	317	334
EBIT margin on sales	8.2%	9.0%	9.7%	8.1%	6.3%	7.7%
Depreciation, amortization and impairment losses	182	173	92	81	247	189
EBITDA	591	561	317	244	564	523
EBITDA margin on sales	11.8%	13.0%	13.7%	12.1%	11.3%	12.1%
ROCE	19.8%	18.2%			15.3%	15.7%
Combined sales	6 212	5 347	2 852	2 495	6 212	5 347

Underlying EBIT Bridge

In millions of €

* Net of FIFO inventory valuation of € -48 million

Bekaert delivered an underlying EBIT of € 388 million in 2023 at a 9.0% margin. The most significant impact came from the continuously evolving mix towards higher added value products and away from more commoditized segments. This impact has more than offset the adverse effects of lower sales volumes, higher conversion cash costs (including lower absorption of fixed costs) and currency effects. As the inventory valuation impact has an offsetting price impact, only the net price mix effect that remains is represented.

Extra capabilities in the scale-up of growth areas like hydrogen porous transport layers (innovation, commercial

• business development, production scale-up) drove up costs ahead of sales margins. Other impact versus last year is mainly due to a positive € 11.5 million one-time impact in last year's figures related to sale of land in the UK.

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Segment Reports

Rubber Reinforcement: Strong volumes in Asia alongside mix and cost improvements more than offset lower demand in Europe and North America

		Underlying		Reported
Key figures (in millions of €)	2022	2023	H1 2023	H2 2023	2022	2023
Consolidated third party sales	2 198	1 881	1 019	863	2 198	1 881
Consolidated sales	2 229	1 905	1 030	875	2 229	1 905
Operating result (EBIT)	179	184	105	79	111	156
EBIT margin on sales	8.0%	9.6%	10.2%	9.0%	5.0%	8.2%
Depreciation, amortization and impairment losses	91	83	45	38	150	94
EBITDA	270	267	150	117	261	249
EBITDA margin on sales	12.1%	14.0%	14.5%	13.4%	11.7%	13.1%
Combined third party sales	2 465	2 070	1 119	951	2 465	2 070
Segment assets	1 495	1 333	1 412	1 333	1 495	1 333
Segment liabilities	376	302	324	302	376	302
Capital employed	1 119	1 030	1 088	1 030	1 119	1 030
ROCE	15.6%	17.0%			9.7%	14.4%

Operational and financial performance

Despite lower sales and lower raw material costs, Rubber Reinforcement delivered a significantly improved EBITu margin in 2023 and very strong cash generation, through a focus on improving product mix towards differentiated, higher performance products and through operational efficiency.

In China, volumes recovered strongly while pricing was lower mainly through wire rod cost decreases and to a lesser extent through price and mix effects. India continued to grow further. Lower demand impacted volumes in Europe and North America. The move towards high-performing, stronger tensile tire cords increased further to around 50%, resulting in positive mix impacts. In total, the division reported lower consolidated third party sales -14.4% versus last year. The main impact came from passed-on wire rod cost decreases on sales prices (-8.9%). Volumes were up +1.3%, driven by strong volumes in Asia and lower volumes elsewhere. Price and mix effects were -2.7% as a consequence of regional mix, partly offset by an improved product mix. Unfavorable currency effects amounted to -4.0%.

Through a strong focus on cost efficiency and mix improvements, the business unit delivered an underlying EBIT of € 184 million, up € +5 million from last year on lower sales. The EBITu margin increased by +160 bps to 9.6%. Increasing the recycled content of our products and more volumes of high performing stronger tensile tire cords improved the mix, while cost savings were achieved by process innovation, labor and material efficiency and plant footprint optimization in China including one plant closure.

The underlying EBITDA margin was 14.0% compared with 12.1% last year and underlying ROCE was 17.0%. Capital expenditure (PP&E) amounted to € 82 million and this included growth investments in Vietnam and India. The one-off elements were € -28 million and were primarily related to restructuring costs in China.

Reported EBIT was € 156 million.

Combined sales and joint venture performance

The Rubber Reinforcement joint venture in Brazil achieved € 189 million in sales in 2023, down -29.9%. Volume losses were -19.2% and were impacted by higher imports into the country and lower demand in the OEM truck market due to pre-buy effects in 2022. Lower wire rod costs had an impact of -11.5% and currency impact was +0.8%. Including joint ventures, the business unit's combined sales decreased by -16.0% to € 2 070 million. The margin performance of the joint venture was significantly impacted by the lower volumes. The results are accounted for in Bekaert's Income Statement under the equity method as part of the 'Share in the results of joint ventures and associates'.

Market perspectives

In 2023, European and American markets weakened despite a strong first quarter. In 2024, growth is expected to be subdued on a global level, and the market remains cautious given weak economic outlook, logistic issues and risk of imports. Customer focus on more sustainable recycled steel and lower rolling resistance applications will continue.

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Steel Wire Solutions: Focused management action to offset weaker market conditions

		Underlying		Reported
Key figures (in millions of €)	2022	2023	H1 2023	H2 2023	2022	2023
Consolidated third party sales	1 427	1 169	635	534	1 427	1 169
Consolidated sales	1 467	1 198	652	546	1 467	1 198
Operating result (EBIT)	100	90	49	41	98	75
EBIT margin on sales	6.8%	7.5%	7.6%	7.5%	6.7%	6.3%
Depreciation, amortization and impairment losses	36	33	18	14	36	38
EBITDA	136	123	68	55	134	113
EBITDA margin on sales	9.2%	10.2%	10.4%	10.1%	9.1%	9.4%
Combined third party sales	2 385	2 008	1 072	936	2 385	2 008
Segment assets	717	605	697	605	717	605
Segment liabilities	290	205	270	205	290	205
Capital employed	426	401	426	401	426	401
ROCE	25.5%	21.8%			25.1%	18.1%

Operational and financial performance

Despite lower volumes and weak end markets across most business lines, Steel Wire Solutions delivered a resilient performance improving profit margins by taking swift, structural action on cost flexing, pricing optimization and in the repositioning of the portfolio to offset the volume declines and cost inflation. It also delivered excellent cash flow generation.

Demand from energy and utility markets was strong throughout the period, especially in North America. Construction and agriculture markets, in particular in Latin America, remained very challenging for most of the year as economic conditions and consumer confidence remained weak. The division made good technical and commercial progress on its efforts to homologate the next generation electric vehicle solution, AmpactTM, and is also seeing growing demand for armoring wires for deep sea electricity and data transmission.

Management took further action in the structural reposition of the portfolio towards selective and more profitable segments and decided to announce the closure of two plants in Indonesia and India at the end of 2023. The sale of the businesses in Chile and Peru was completed earlier in 2023.

Steel Wire Solutions consolidated sales were € 1 169 million for the full year 2023, down -18.1% versus last year. Despite volumes being -10.3% lower and falling raw material prices, there was a strong focus on price management across the segment while simultaneously improving the mix, especially from energy and utility applications in North America and Europe.

The focus on price and mix, and pro-active cost mitigating actions, led the division to deliver underlying EBIT of

• 90 million or 7.5% EBITu margin, up from 6.8% last year. The underlying EBITDA margin was 10.2%, up from 9.2% last year and underlying ROCE remained robust at 21.8%.

Capital expenditure (PP&E) amounted to € 33 million and included capacity investments to further meet strong demand from energy and utility customers. The one-off elements were € -15 million and related mainly to restructuring costs in Indonesia, Belgium and India. Reported EBIT was € 75 million.

Combined sales and joint venture performance

The Steel Wire Solutions joint venture in Brazil reported sales of € 830 million, -12.7% compared with 2022. Volumes were solid (-1.3%), while lower pricing due to decreased wire rod costs had the biggest impact (-12.0%). Currency impact was +0.8%. Including joint ventures, the combined sales were € 2 008 million. Whilst lower than FY 2022 in absolute terms, the margin performance of the joint venture remained strong. The results are accounted for in Bekaert's Income Statement under the equity method as part of the 'Share in the results of joint ventures and associates'.

Market Perspectives

Markets are expected to remain quite challenging in 2024, especially in Europe and Latin America. Capacity increases at our energy and utilities customers create higher demand opportunities in Europe and also in North America supported by governmental stimuli (for example the US Federal funding of RDOF (Rural Digital Opportunity Fund) and IIJA (Infrastructure Investment and Jobs Act)).

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Specialty Businesses: Good progress in Dramix® and Currento® against strong comparative year

		Underlying		Reported
Key figures (in millions of €)	2022	2023	H1 2023	H2 2023	2022	2023
Consolidated third party sales	772	677	349	329	772	677
Consolidated sales	788	690	355	335	788	690
Operating result (EBIT)	132	112	64	48	131	104
EBIT margin on sales	16.7%	16.2%	18.1%	14.2%	16.6%	15.1%
Depreciation, amortization and impairment losses	22	24	11	13	22	27
EBITDA	154	136	75	60	153	131
EBITDA margin on sales	19.5%	19.6%	21.2%	18.0%	19.4%	19.0%
Segment assets	470	463	500	463	470	463
Segment liabilities	143	101	123	101	143	101
Capital employed	327	361	377	361	327	361
ROCE	44.7%	32.5%			44.4%	30.2%

Operational and financial performance

After record-high sales in 2022 driven by exceptional buying patterns, sales for 2023 were € 677 million, -12.3% below 2022, but up around 15% versus 2021. The organic decrease of -9.9% was driven by lower demand and raw material impacts, partially offset by positive mix effects. The currency impact was -2.4%.

The construction decarbonization business secured new tunneling projects in India and China alongside further industrial flooring projects in the US where the group continues to drive the increasing adoption of steel fiber reinforced flooring. The segment continued to innovate with the first sales of higher tensile strength steel fibers to maintain market performance leadership and the recently established Falconix® engineering design office is an important differentiator in a number of recent project wins in advanced flooring solutions. Overall, the successful penetration of the higher value 4D/5D Dramix® products continues with almost half of the supplied volumes in 2023 coming from these patent-protected product lines and consequentially pricing and mix has remained very strong, offsetting the small volume declines.

In the hydrogen electrolysis applications, sales revenue in 2023 has doubled for the third year in a row now. Bekaert made further progress with long-term supply agreements for its porous transport layers and alongside continues to successfully ramp-up production capacity with the first scale deliveries expected in 2024. Bekaert also commenced a landmark project in China with a major electricity generation company. It has also signed an agreement with Toshiba to move downstream into membrane electrode assembly, growing its capabilities in hydrogen electrolysis. There has been a slowdown in filtration and other fiber end markets, while the demand for our ultra fine wires for solar and semiconductor markets remains solid. Sales were lower in 2023 in Combustion Technologies and in the Hose and Conveyor Belt sub-segment where markets continue to be challenging.

Despite falling sales, Specialty Businesses delivered a robust EBITu margin of 16.2% (broadly in-line with last year) and EBITu of € 112 million in 2023, down from € 132 million last year. The profit margin was driven by continued pricing discipline and the increased share of high-end applications, despite lower demand and an increased cost base for the Hydrogen ramp-up. The underlying EBITDA margin reached 19.6%, similar as last year. Underlying ROCE was 32.5%. The € -8 million one-off costs related to restructuring of Combustion Technologies activities in The Netherlands and China.

Capital expenditure (PP&E) increased +71% and amounted to € 40 million. This included investments in capacity for porous transport layers (hydrogen) in Belgium and China and for the construction decarbonization products. Growth capital expenditure will increase in 2024 as we continue the ramp-up of our production into the Hydrogen market.

Market perspectives

Whilst overall construction markets remain subdued most notably in China, significant global infrastructure investment is planned in countries such as India and the US and the business continues to see strong interest in high-end applications such as flooring for EV battery plants. Our hydrogen component business growth in 2024 is underpinned by long-term supply commitments and strong customer inquiry levels. The outlook for the remaining parts of the segment remains less confident, given weaker demand in hose and conveyor belt markets and regulatory uncertainty in in Combustion Technologies.

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Bridon-Bekaert Ropes Group: Strong price and mix performance despite lower volumes, delivering further margin improvements

		Underlying		Reported
Key figures (in millions of €)	2022	2023	H1 2023	H2 2023	2022	2023
Consolidated third party sales	585	589	309	279	585	589
Consolidated sales	589	590	310	280	589	590
Operating result (EBIT)	60	73	40	33	39	72
EBIT margin on sales	10.3%	12.3%	12.9%	11.6%	6.6%	12.3%
Depreciation, amortization and impairment losses	34	30	17	13	45	27
EBITDA	94	103	57	45	84	99
EBITDA margin on sales	16.0%	17.4%	18.5%	16.2%	14.3%	16.8%
Segment assets	629	634	653	634	629	634
Segment liabilities	138	122	123	122	138	122
Capital employed	491	512	530	512	491	512
ROCE	12.9%	14.5%			8.3%	14.5%

Operational and financial performance

Strong demand in Mining and Oil & Gas end markets offset volume decline in construction in China, while a strong focus on pricing and mix delivered a very strong margin performance (EBITu margin at 12.3% vs 10.3% last year). After supplying backlog orders in 2023 following the ramp-up of production in the US, the global order book remains at a high level.

Operationally in 2023, Bridon-Bekaert Ropes Group (BBRG), completed the closure of the Gelsenkirchen site in Germany and has expanded capacity in Europe for Armofor® to meet anticipated demand growth. In November 2023, BBRG and ABB signed a global partnership to develop advanced digital services for mine hoist systems, including innovative approaches towards safety, availability, productivity, risk reduction and sustainability, alongside best-in-class practices for preventive maintenance.

BBRG recorded +0.6% sales growth in 2023 to € 589 million, driven by strong price and mix effects only partly offset by lower input costs (combined effect of +10.1%) on lower volumes (-6.6%). The currency impact was -2.9%.

The division has continued to further embed its profit restoration plan, as well as benefiting from dynamic pricing in 2023. As a consequence, the business unit delivered an underlying EBIT of € 73 million at a margin on sales of 12.3% (up again compared with 10.3% in 2022). Underlying EBITDA reached a strong margin of 17.4% and underlying ROCE continued to improve with another +160 bps up from last year. BBRG invested € 37 million in PP&E, mainly in the Ropes activities in UK and US and in expansion of the Advanced Cords plants.

Market perspectives

Overall, the global order book remains at a high level and the business unit expects continued strong demand despite some delays in Armofor® and mooring solutions for offshore wind. Given current oil prices, demand for Ropes for the oil and gas segment remains strong in particular for onshore in North American markets and offshore globally, whilst demand from the mining sector is stable. Weakness in Chinese construction activities is weighing on demand for hoisting cords and crane ropes in that region.

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Strategic and investment updates

Bekaert continues its strategic transformation with an increased focus on innovation and sustainability to improve our technology and market access in growing industries. These included:

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a partnership agreement with Toshiba to commercialize Proton Exchange Membrane (PEM) Membrane- Electrode Assemblies (MEA) technology for green hydrogen production, which will support the green hydrogen industry to scale and further improve cost competitiveness

expanding manufacturing and research capacity in Porous Transport Layers for electrolysis technologies a further investment in electrolysis technologies for green hydrogen production in Ionomr Innovations, a leader in proton- and anion exchange membrane technologies

delivering first batches of tire reinforcement with third-party certified recycled steel content and paving the way to an industry standard for the reporting of recycled content in tire reinforcement

the acquisition of Flintstone Technology Ltd further strengthening our offering in offshore mooring solutions providing complete system solutions to the floating offshore wind industry

a partnership with ABB to deliver peace of mind to mine hoist system operators by improving predictive maintenance services offering to enhance efficiency and reduce downtime.

At the Capital Markets Day in December 2023, Bekaert outlined its strategy and presented an update on what has been achieved in recent years combined with its plans and ambitious targets for the future. These included:

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Clearly defined roles for the divisions, with the core businesses of Rubber Reinforcement and Steel Wire Solutions (SWS) continuing to lead their markets with premium and more sustainable solutions and focusing on margin improvement and cash conversion, while the growth platforms delivering into energy transition, construction decarbonization and advanced lifting and mooring industries are focused on capturing growth opportunities

Within the core businesses, this is illustrated with actions in 2023 on footprint (disposal of Chile and Peru SWS business, closure of a tire cord plant in China and two SWS plants in India and Indonesia), cost saving programs and mix improvements from higher adoption of stronger tensile tire cords and a higher weight of deliveries to energy and utility customers in SWS

In the growth platforms, there is continued growth in the adoption of steel fiber reinforced concrete and of Currento® sales for green hydrogen generation. Customer interest in Armofor® steel cord reinforced thermoplastic pipes is increasing.

The Group continues to invest in the organic growth of the company:

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• 188 million in property, plant and equipment, compared to € 157 million last year, supporting future growth in the core segments and increasingly also in the growth platforms. The largest growth investments in 2023 were done in Vietnam and India for Rubber Reinforcement, in the US for energy and utility applications in BBRG and Steel Wire Solutions, and for hydrogen, building products, and advanced cords applications
• 73 million in R&D and Innovation activities (before the capitalization of some R&D projects and before deduction of grants and other R&D incentives), up € 3 million from last year
• 19 million in intangible investments that relate mainly to investments in digital transformation projects and to € 7 million capitalization of R&D projects.

The Group also installed a solar park in Burgos, Spain, to help reduce and offset its carbon greenhouse emissions.

Share buyback and treasury shares

On 23 February 2024, Bekaert completed its second program to buyback up to € 120 million of its own shares, which it initially had started in 2022 and which the Board had decided to continue for an additional € 120 million on 28 February 2023 in 4 additional tranches. In this second program, the company repurchased 2 703 331 ordinary shares for an aggregate consideration of € 115.5 million. The purpose of the share buyback is to reduce the issued share capital of the company. 2 240 143 shares of this second buyback program were already cancelled in 2023 and the capital was reduced accordingly. The remaining 463 188 shares will be cancelled in 2024. Together with the previous buyback program that ran until February 2023, 6 191 675 shares have been repurchased for an amount of € 232.8 million.

On 31 December 2022, the Company held 4 380 475 own shares. Between 1 January 2023 and 31 December 2023, a total of 413 581 shares were exercised under Stock Option Plan 2010-2014 and Stock Option Plan

2015-2017, and 413 581 own shares were used for that purpose. Bekaert sold 4 742 shares to members of the Bekaert Group Executive (BGE) Management in the framework of the Bekaert Personal Shareholding Requirement Plan and transferred 3 496 shares to members of the BGE under the share-matching plan. A total of 11 202 shares were granted to the Chairman and other non-executive Directors as part of their remuneration

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