ANNUAL

REPORT

2021

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.

Beyond reporting, beyond financials, beyond tomorrow.

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Bekaert Annual Report 2021

Table of contents

Diversity    61

Conduct policies    62

Remuneration report    63

Shares    81

Control and ERM    90

Financial statements 97

Consolidated financial statements    98

Consolidated income statement    98

Consolidated statement of comprehensive income    99

Consolidated balance sheet    100

Consolidated statement of changes in equity    102

Consolidated cash flow statement    103

Notes to the consolidated financial statements    105

1. General information    105

2. Summary of principal accounting policies    105

2.1. Statement of compliance    105

2.2. General principles    106

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. Miscellaneous    116

3. Significant accounting judgments and key sources of estimation uncertainty    117

3.1. Significant 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 financial income and expenses    130

5.6. Income taxes    131

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Bekaert Annual Report 2021

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 classified 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 benefit obligations    178

6.17. Provisions    189

6.18. Interest-bearing debt    190

6.19. Other non-current liabilities    193

6.20. Other current liabilities    194

6.21. Tax positions    194

7. Miscellaneous items    195

7.1. Notes to the cash flow statement    195

7.2. Financial risk management and financial 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 financial statements of NV Bekaert SA    226

Proposed appropriation of NV Bekaert SA 2021 result    230

Appointments pursuant to the Articles of Association    230

Alternative performance measures    231

Auditor’s Report    236

Environmental statements 243

Chemical management    244

Energy    245

CO2        246

Water    248

Waste    250

Sustainable solutions    251

EU Taxonomy    252

Social statements 256

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 management    269

part III: about this report 271

Reporting principles 272

Sustainability standards 273

GRI Content Index 274

Glossary 280

Management 281

STRATEGY AND

PERFORMANCE

PART I

Message

from the chairman

and the CEO

Oswald Schmid
CEO

Jürgen Tinggren

Chairman

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Bekaert Annual Report 2021

Jürgen Tinggren

Chairman of the Board of Directors

Oswald Schmid

Chief Executive Director

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 significant 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 confident 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, confirm our ambition to reach the mid-term targets (2022-2026) of organic sales growth of 3%+ CAGR and an underlying EBIT margin level of 9% to 11% through the cycle.

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 offering 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.

GRI 102-14

Bekaert achieved a new performance milestone in 2021, despite the turbulence of the pandemic. 

We achieved strong sales and improved profitability across all our businesses thanks to business-mix improvements, footprint adjustments, and organizational efficiencies.

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 financial 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. Effective 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.

Message from the Chairman and the CEO

BEKAERT AT A GLANCE

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Bekaert Annual Report 2021

Who we are

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

What we do

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 different diameters and strengths, even as thin as ultrafine fibers of one micron. We group the wires into cords, ropes and strands, weave or knit them into fabric, or process them into an end product. The coatings we apply reduce friction, improve corrosion resistance, or enhance adhesion with other materials. We also develop products and solutions that are made of other metals and materials. This is part of our strategy to drive creativity beyond steel.

More information on our product offering is available on our website bekaert.com.

GRI 102-2, GRI 102-6

How we work

better together sums up the unique cooperation within Bekaert and between Bekaert and its business partners. We create value for our customers by co-creating and delivering a quality portfolio of product solutions and by offering 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.

GRI 102-16

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Bekaert Annual Report 2021

GRI 102-4

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Bekaert Annual Report 2021

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Bekaert Annual Report 2021

Our ambition

Be the most advanced leader of innovative rubber reinforcement solutions that help our customers transform the industry sustainably

Our business position and strategic focus

•30% market share in the global tire cord market

•Preferred technology partner to the tire industry

•Solutions provider to new mobility challenges:

–Part of the solution in the shift towards electric vehicles

–Safer, lighter, and sustainable materials

•Global footprint – local presence

•Investing for future growth

Main applications

Tire cord and bead wire for tires

BU performance FY2021

€ 2.05 billion in consolidated sales • € 2.24 billion combined sales²
11.8% underlying EBIT margin • 16.5% underlying EBITDA margin

¹ The Hose and Conveyor Belt activities have been moved to the business unit Specialty Businesses as from January 2022. The financial statements relative to these activities will be reported accordingly in fiscal 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.

GRI 102-2

Our ambition

Serve customers with innovative value solutions that help them improve their business performance

Our business position and strategic focus

•Strong positions in target markets

•Deep knowledge of local market dynamics and positive effects from reverse globalization trends

•Smart solutions provider to energy and utilities markets and the agriculture sector

•Significant improvement of the business portfolio

•Exit from commodity markets with low value adding opportunities

Main applications

Steel wire solutions for energy & utility markets, construction & infrastructure, agriculture, mining, and more

BU performance FY2021

€ 1.82 billion in consolidated sales • € 2.66 billion in combined sales²
11.3% underlying EBIT margin • 13.5% underlying EBITDA margin

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.

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Bekaert Annual Report 2021

Our ambition

Be the leading solutions provider in low-carbon concrete reinforcement and in thin fiber and combustion technologies that contribute to a cleaner world

Our business position and strategic focus

•40% market share in concrete reinforcement fibers

•40% market share in thin metal fibers

•Solutions provider to sustainable and digital applications:

–Low-carbon concrete reinforcement

–Light-weight materials

–Hydrogen power technologies

–RFID and sensor technologies

•Strong focus on research & innovation

Main applications

•Dramix® steel fibers for low-carbon concrete reinforcement

•Thin fibers for filtration, hydrogen electrolysis technologies, RFID tags

•Low and zero-emission gas burners and heat exchangers

BU performance FY2021

€ 476 million in consolidated sales
14.7% underlying EBIT margin • 16.7% underlying EBITDA margin

Our ambition

Be the leading innovator and premier solutions provider with the best performing ropes and advanced cords globally

Our business position and strategic focus

•Strong positions in target markets

•Advanced technology leadership and digital services:

–Ropes 360 services enabling continuous monitoring

–Twin-modeling of new product applications

–Elevator hoisting simulation technologies

•Growing presence in offshore floating wind projects

•Significant improvement of the business portfolio

•Exit from commodity markets with low value adding opportunities

Main applications

•Mission-critical steel and synthetic ropes for mooring, hoisting, and structures

•Advanced cords for elevators, window regulators, and timing belts

BU performance FY2021

€ 481 million in consolidated sales
9.3% underlying EBIT margin • 15.8% underlying EBITDA margin

¹ See footnote Rubber Reinforcement

CREATING VALUE FOR OUR STAKEHOLDERS

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Bekaert Annual Report 2021

Sustainability is an integral part of the Bekaert strategy. We are committed to create value for all our stakeholders by delivering on both financial and non-financial objectives. In this report we describe how we convert, through the implementation

of our strategy, the resources we invest (‘inputs’) into sustainable value (‘outputs & impact’) for our shareholders, customers, employees, communities, and other stakeholders.

1 Based on the framework Guidelines of Value Reporting Foundation (International Reporting Council (IIRC) & Sustainability Accounting Standards Board (SASB)

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

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Bekaert Annual Report 2021

The resources we invest

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 low-carbon society. We continued to invest in health & safety and learning & development, and we extended our digital capabilities to improve data insights and customer services.

The value we create

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 first patent filings 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 efforts and more than 85% of our Research & Innovation project list target distinct benefits in sustainability.

Efforts 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’.

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Bekaert Annual Report 2021

During the Capital Markets Day of 28 May 2021, Bekaert has communicated the company’s strategy for the next five 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.

Megatrends create opportunities and drive growth

The megatrends of new mobility, renewable energy, urbanization, smart connectivity, reverse globalization, and sustainability are viewed as opportunities for Bekaert to differentiate and grow.

We are therefore leveraging our position to capture those opportunities:

•We are extending our offering with new, innovative products and services.

•We are digitalizing the business to enhance our competitiveness; and

•We are determined to lead as a sustainable business.

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Bekaert Annual Report 2021

Our approach in implementing the strategy

Three imperatives drive the implementation of our strategy and have led to tangible results in 2021.

We perform

We transform

We grow

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 effective working capital and strict cost control drove a strong cash generation and fast and significant 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 efficiency of our processes.

The digitalization of our business processes and the expansion of our digital offering 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 field 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 significant accretive growth.

2021 did not mark bold merger and acquisition deals but focused on tactical acquisitions and partnerships to build a growing presence in offshore 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 financial and non-financial disclosures in Part II of this report.

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Bekaert Annual Report 2021

Reappointments in 2021

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 composition of the Board of Directors will change in May 2022

The term of office 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.

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Bekaert Annual Report 2021

CHAIRMAN OF THE BOARD

Independent Director
Swedish, °1958

EDUCATION

Stockholm School of Economics
New York University Leonard N Stern School of Business

CHIEF EXECUTIVE OFFICER
MEMBER OF THE BOARD

Austrian, °1959

EDUCATION

University of Applied Sciences of Vienna

Age Diversity

Gender Diversity

Nationality Diversity

FIRST APPOINTED

May 2019

EXPERIENCE

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 Officer and President of the Group Executive Committee of Schindler. He became a member of the Board of Directors in 2014.

OTHER MANDATES

Member of the Board of Johnson Controls, Inc.

EXPIRATION OF BEKAERT MANDATE

Annual General Meeting of 2023

COMMITTEES

Chairman of the Nomination & Remuneration Committee
Member of the Audit, Risk & Finance Committee

FIRST APPOINTED

May 2020

EXPERIENCE

Oswald Schmid joined Bekaert as COO on 1 December 2019. On 12 May 2020, he took the helm as interim CEO and on 2 March 2021 he was appointed CEO.

Oswald Schmid began his career with Semperit in 1984, before moving to Continental in 1990 as Head of Purchasing. 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.

OTHER MANDATES

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

office of the Company is located, i.e. Belgium

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Bekaert Annual Report 2021

MEMBER OF THE BOARD

French, °1976

EDUCATION

Université Paris-Dauphine
Cass Business School

MEMBER OF THE BOARD

Independent Director
Danish, °1966

EDUCATION

Copenhagen Business School, INSEAD,
London Business School and Wharton Business School

MEMBER OF THE BOARD

Belgian, °1953

EDUCATION

Catholic University of Louvain
University of Namur

FIRST APPOINTED

May 2015

EXPERIENCE

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 Diversified Industrials in 2021. He has investment banking coverage responsibility for a number of Credit Suisse's major industrial clients, advising them on a broad range of M&A, Equity and Debt transactions.

EXPIRATION OF MANDATE

Annual General Meeting of 2023

FIRST APPOINTED

May 2020

EXPERIENCE

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 office at Danske Bank A/S. Currently, she is Chief Human Resources Officer at Ørsted.

OTHER MANDATES

Member of several advisory boards and committees since 2003.

EXPIRATION OF MANDATE

Annual General Meeting of 2025

COMMITTEES

Member of the Nomination & Remuneration Committee

FIRST APPOINTED

May 1988

EXPERIENCE

Charles de Liedekerke started his career with Liedekerke, Wolters, Waelbroeck and Kirkpatrick and moved to the US in 1980 as Finance and Administration Officer 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 Officer 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

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Bekaert Annual Report 2021

Jacobs van Merlen

EDUCATION

Free University of Brussels
Ecole Centrale Lille (Ingénieur Généraliste)

MEMBER OF THE BOARD

Belgian, °1953

EDUCATION

Catholic University of Louvain

MEMBER OF THE BOARD

Independent Director
British, °1955

EDUCATION

University of Southampton

MEMBER OF THE BOARD

Belgian, °1978

FIRST APPOINTED

May 2016

EXPERIENCE

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 financial services clients.

Christophe Jacobs van Merlen is currently Managing Director at Bain Capital Europe and member of the Leadership team and member of different board, audit, operating and M&A committees. He plays a leading role in a variety of investments at Bain Capital.

EXPIRATION OF BEKAERT MANDATE

Annual General Meeting of 2024

COMMITTEES

Member of the Nomination & Remuneration Committee

FIRST APPOINTED

May 2003

EXPERIENCE

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 field of automotive safety sensors with manufacturing sites in Luxembourg and technical sales offices 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.

OTHER MANDATES

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

EXPERIENCE

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

FIRST APPOINTED

May 2018

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Bekaert Annual Report 2021

MEMBER OF THE BOARD

Independent Director
Finnish, °1968

EDUCATION

University of Vaasa

MEMBER OF THE BOARD

Belgian,°1977

EDUCATION

Solvay Management School, Free University of Brussels,
and INSEAD France and Singapore

van de Walle de Ghelcke

MEMBER OF THE BOARD

Belgian, °1981

EDUCATION

Catholic University of Louvain, Free University of Brussels and London School of Economics.

FIRST APPOINTED

May 2020

FIRST APPOINTED

May 2019

FIRST APPOINTED

May 2016

EXPERIENCE

Eriikka Söderström has a strong finance background having worked in many internationally operating corporations.

She started her career in Nokia where she spent 14 years in different finance roles in Nokia Networks. Her last positions there were as the interim CFO of Nokia Networks and Corporate Controller of Nokia Siemens Networks.

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.

OTHER MANDATES

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

EXPIRATION OF BEKAERT MANDATE

Annual General Meeting of 2025

COMMITTEES

Member of the Audit, Risk & Finance Committee

EXPERIENCE

Caroline Storme started her career with Deloitte Consulting in 2000 in Belgium. She worked at Bekaert as financial controller from 2004-2006 before she moved to Amtech, IGW based in Suzhou, China where she was appointed CFO.

She joined UCB in 2012, first in controlling functions before heading Asian global business services, based in Shanghai, China, and since 2017 in various R&D financial functions at UCB Headquarters in Brussels, Belgium.

Caroline Storme currently holds the position of R&D Finance Lead Neurology at UCB in Belgium.

EXPIRATION OF BEKAERT MANDATE

Annual General Meeting of 2023

EXPERIENCE

Emilie van de Walle de Ghelcke is Head of Legal at Sofina, a family-controlled investment company listed on Euronext Brussels (BEL20-index).

Before joining Sofina, Emilie was a member of the Brussels Bar since 2005. She joined the corporate and finance practice of Freshfields Bruckhaus Deringer in 2009 where she advised Belgian and international clients on domestic and cross-border public and private M&A transactions, corporate governance matters, corporate restructurings, joint ventures and financial law advisory.

Emilie van de Walle de Ghelcke joined Sofina in 2016. As Head of Legal and Compliance Officer, her practice mainly covers M&A transactions, advice on corporate governance and listed company matters, group compliance and legal matters as well as external communication. She is also part of the core team leading the implementation of Sofina's ESG strategy.

EXPIRATION OF BEKAERT MANDATE

Annual General Meeting of 2024

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Bekaert Annual Report 2021

MEMBER OF THE BOARD

Belgian, °1956

EDUCATION

Catholic University of Louvain and IMD

MEMBER OF THE BOARD

Independent Director
US citizen, °1966

EDUCATION

University of North Carolina at Chapel Hill
Fudan University in Shanghai

FIRST APPOINTED

May 2016

FIRST APPOINTED

May 2014

EXPERIENCE

Henri Jean Velge started his career in 1981 at Shell (The Netherlands) as well-site petroleum Engineer. He moved to Brunei in 1982 as Operations Manager and resigned from Shell in 1985 to obtain an MBA degree.

In 1987 Henri Jean Velge joined Bekaert as Executive Director of Industrias Chilenas de Alambre (Chile). In 1991 he moved to the United States and became Corporate Vice President Wire Americas in June 1994. In 2001 he was appointed Executive Vice President and became member of the Bekaert Group Executive, responsible for the global wire activities. From 2013 till mid 2014 he was responsible for all the business platforms.

EXPIRATION OF BEKAERT MANDATE

Annual General Meeting of 2024

EXPERIENCE

Mei Ye worked for 10 years with McKinsey & Company (2003-2013) as a senior expert and consultant in financial services, policy recommendations and corporate governance.

Prior to McKinsey, Mei Ye was corporate strategy manager and lead analyst at E*TRADE Financial, a US-based online financial 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 Office of President of the University of North Carolina System in the US (1992-1994).

OTHER MANDATES

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

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Bekaert Annual Report 2021

Changes during 2021

The Board of Directors of Bekaert appointed Oswald Schmid as Chief Executive Officer, effective 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 Officer 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 Officer, 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.

Organizational structure

The composition of the Bekaert Group Executive reflects the organizational structure with four Business Units and four Global Functional Domains. Te Business Units and Global Functions are led by the following Executives.

Business Units

•The Business Unit Rubber Reinforcement is led by Arnaud Lesschaeve, Divisional CEO Rubber Reinforcement.

•The Business Unit Steel Wire Solutions is led by Stijn Vanneste, Divisional CEO Steel Wire Solutions.

•The Business Unit Specialty Businesses is led by Yves Kerstens, Divisional CEO Specialty Businesses and Chief Operations Officer*.

•Bridon-Bekaert Ropes Group (BBRG) is led by Curd Vandekerckhove, Divisional CEO of BBRG.

The Business Units have global P&L accountability for strategy and delivery in their distinct areas and therefore have dedicated production facilities and commercial and technology teams within their respective organization. This helps them develop a customer-centric approach aligned with the specific needs and dynamics of their markets.

Global Functions

•Taoufiq Boussaid, Chief Financial Officer

•Kerstin Artenberg, Chief Human Resources Officer

•Juan Carlos Alonso, Chief Strategy Officer

•Yves Kerstens, Chief Operations Officer (*combined with Division CEO role above)

The Functions take a role as strategic business partners, accountable for providing specific expertise and services across the Group, and for ensuring the business has the right capability to deliver on short- and long-term goals.

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Bekaert Annual Report 2021

CHIEF EXECUTIVE OFFICER

Austrian, °1959

EDUCATION

Engineering
University of Applied Sciences of Vienna

CHIEF FINANCIAL OFFICER

French and Moroccan, °1971

EDUCATION

Mathematics & Economics - Finance
French College of Rabat
Institut Supérieur de Gestion of Paris

JOINED BEKAERT

2019

JOINED BEKAERT

2019

EXPERIENCE

Oswald Schmid joined Bekaert as COO on 1 December 2019. On 12 May 2020, he took the helm as interim CEO and on 2 March 2021 he was appointed CEO.

Oswald 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.

EXPERIENCE

Taoufiq Boussaid started his career in international finance with an initial 10-year period as Audit Manager with Ernst & Young in France and The Coca-Cola Company in the US. From 2004 to 2007, he held several finance roles with United Technologies Corporation, first as Corporate Controller EMEA and subsequently as CFO for their Carrier Heating Systems business in Europe.

In 2007, Taoufiq joined Bombardier Transportation, where he progressively moved up through the finance organization in different geographies to his most recent position of Vice President Finance for EMEA and Asia Pacific. He has also held operational responsibilities, running the French and North African businesses of Bombardier Transportation.

Non-native = nationality other than the country where the registered

office of the Company is located, i.e. Belgium.

Age Diversity

Gender Diversity

Nationality Diversity

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Bekaert Annual Report 2021

DIVISIONAL CEO SPECIALTY BUSINESSES
CHIEF OPERATIONS OFFICER

Belgian, °1966

EDUCATION

Engineering - Industrial Management
Catholic University of Louvain
INSEAD Business School of Paris

JOINED BEKAERT

2021

EXPERIENCE

Yves Kerstens started his career in supply chain roles in the manufacturing industry before he moved to Ernst & Young (1996) and later Capgemini (2001) as an advisor to the trade & industry sector.

In 2005, he joined Bridgestone Corporation where he took on executive functions of increasingly broader scope and responsibility in EMEA and Asia Pacific, as well as global corporate governance roles as Vice President & Senior Officer of Bridgestone Corporation and Chairman of the global digital solutions and supply chain committee. In 2018, Yves joined Axalta Coating Systems, where he most recently held the role of Vice President Axalta and President EMEA.

CHIEF HUMAN RESOURCES OFFICER

German, °1972

EDUCATION

East Asian Economics - HR
University of Duisburg-Essen
University of Applied Sciences of Zürich

JOINED BEKAERT

2021

EXPERIENCE

Kerstin Artenberg began her career in communication and marketing roles, holding several leadership positions at Körber AG and Daimler AG.

In 2007, Kerstin joined Borealis in Austria as External Communications Manager and soon after assumed the role of Director Communications. From 2010 onwards, she gradually expanded her responsibilities towards HR functions and in 2016, she took on the role of Vice President Human Resources & Communications. In 2020, she joined the newly established Executive Committee.

Throughout her career, Kerstin has driven cultural transformations with a focus on developing organizations which provide purpose and deep development opportunities for their employees.

CHIEF STRATEGY OFFICER

Mexican, °1974

EDUCATION

Engineering - MBA
Universidad Panamericana of Mexico City
Stanford Graduate School of Business

JOINED BEKAERT

2019

EXPERIENCE

Juan Carlos Alonso began his career in 1998 with the Boston Consulting Group. In 2006, he joined CEMEX to become Global Corporate Strategic Planning Manager, based in Spain. He moved to the Comex Group in 2010 as Vice President of Sales & Operations for the US Western Region, before joining Lhoist Group where he held various business development and strategy leadership positions with increasing responsibility and scope.

In 2017, Juan Carlos moved to the Imerys Group as Head of the Americas and development regions for the Monolithic Refractories division and, in parallel, as Global Head of Strategy, Business Development and Marketing for the High Temperature Solutions business.

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DIVISIONAL CEO BRIDON-BEKAERT ROPES GROUP

Belgian, °1965

EDUCATION

Engineering - Applied Economics
Catholic University of Louvain

JOINED BEKAERT

1989

EXPERIENCE

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 Officer. In 2019, he was appointed Divisional CEO of the Bridon-Bekaert Ropes Group.

DIVISIONAL CEO RUBBER REINFORCEMENT

French, °1969

EDUCATION

Finance & Business Administration - Purchasing
Dauphine University of Paris
M.A.I. Management School of Bordeaux

JOINED BEKAERT

2019

EXPERIENCE

Arnaud Lesschaeve began his career with Valeo in 1994, first in quality and later as purchasing manager. He gained additional expertise in the procurement, operations and supply chain domains during his 8 years as a consultant with KPMG and AT Kearney respectively.

In 2003, Arnaud joined Faurecia and took on several executive positions in purchasing before he was appointed Asia Division VP. From 2013 to 2018, he extended his career in the automotive supply sector at GKN Driveline, initially as COO, then as President for Asia Pacific, and finally as CEO of the joint systems division, before returning to Valeo as VP Thermal Systems.

DIVISIONAL CEO STEEL WIRE SOLUTIONS

Belgian, °1972

EDUCATION

Engineering
Catholic University of Louvain

JOINED BEKAERT

1995

EXPERIENCE

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.

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Bekaert Annual Report 2021

We commit to high performance

We make our customers succeed

We are truly better together

We care for the world around us

High performance allows us to return shareholder value to the investors, who enable us to develop and grow our business. It also enhances our ability to create economic value for the communities where we are active, as well as for the wider society.

Our innovative product and service solutions make us the partner of choice to customers around the world. We create customer value through innovation, consistent quality, digital services and sustainable solutions. Our global footprint helps building customer centricity and shortens the supply chains, wherever our customers are located.

The true strength of Bekaert lies at the heart of every employee’s passion to go the extra mile for our customers and display excellence in everything they do in all Bekaert’s subsidiaries as well as in joint ventures. Our values are ingrained in our culture and connect us all as One Bekaert team.

Our responsibility extends beyond our own organization, with clear commitments toward the environment and society. We develop solutions that contribute to a clean environment and raise our efforts to become a truly sustainable business. We support initiatives that help sustain and improve the social conditions in the communities where we are active.

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:

GRI 102-40

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Bekaert Annual Report 2021

Our shareholders and investors

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 financial and non-financial performance as well as market and strategic updates.

6 brokerage firms cover and publish equity research reports on Bekaert.

Our customers and supply partners

Our employees and business partners

Our communities and the broader society

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 fully- or 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 field 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 fulfil 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 difference to people’s lives, both today and in the future.

GRI 102-40, GRI 102-42

Total contact reach through
one-on-one and webcast meetings in 2021

Countries with

Bekaert customers

Number of employees Bekaert global

Number of countries where Bekaert employs people

721

130

27 181

45

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

Different nationalities in
our workforce

€ 55

95 %

72

Income taxes paid on 2021 result

€ 133 million

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Bekaert Annual Report 2021

A global approach

Bekaert’s Enterprise Risk Management (ERM) approach is integrated within the company’s strategy and the resulting decisions and activities that drive its implementation.

This permanent ERM framework, endorsed by Bekaert’s Board of Directors, helps managing uncertainty in Bekaert’s value creation model. It also contributes to achieving the company’s objectives, both financial and non-financial, and complying with laws and regulations as well as with the Bekaert Code of Conduct. The framework consists of the identification, assessment and prioritization of the major risks facing Bekaert. It also encompasses continuous reporting and monitoring of these major risks as well as developing and implementing risk mitigation actions.

The risks are clustered in seven risk categories: strategic, people/organization, operational, legal/compliance, financial, corporate and geopolitical/country risks. The identified risks are classified on two axes: probability of occurrence and impact or consequence. The risk evolution is evaluated on a quarterly base.

Return on investments

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.

License to operate

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 affect Bekaert’s position as a preferred partner to customers and investors. Bekaert has established a new sustainability strategy that will step up our sustainability performance. Our environmental targets, which are aligned with the Science-Based Targets initiative, are ambitious and will be implemented according to a roadmap that has been approved by the Board of Directors.

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.

Increasing

Decreasing

The main changes in 2021

Exposure to cyber security risks

Many operational activities of Bekaert depend on IT-systems that are developed and maintained by internal and external experts. Home office work has expanded the number of end-point devices and connection channels. A cyber-attack affecting critical IT systems could interrupt Bekaert’s business continuity and affect profitability. 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 office 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.

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Bekaert Annual Report 2021

Materiality matrix

Where the ERM Model classifies risks according to probability of occurrence and the impact or consequence for our business, the Materiality Matrix positions the levers of value creation for our business

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.

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

OUR PERFORMANCE IN 2021

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Bekaert Annual Report 2021

Financial highlights FY2021¹

•Consolidated sales of € 4.8 billion (+28%) and combined sales of € 5.9 billion (+32%)

•Underlying EBIT of € 515 million, up +89% from last year, resulting in a margin of 10.6% (versus 7.2%)

•EBIT of € 513 million, doubling last year’s result and generating a margin of 10.6% (versus 6.8%)

•Underlying EBITDA of € 689 million (+44%), delivering a margin on sales of 14.2 % (versus 12.7%)

•Underlying ROCE of 23.7%, almost doubling the performance of 2020 (12.2%)

•EPS of € 7.14 per share, tripling the result of the previous year (€ 2.38)

•Average working capital on sales ratio of 12.6%, compared with 16.4% last year

•Net debt of € 417 million, -31% down from € 604 million at the close of 2020, resulting in net debt on underlying EBITDA of 0.61, less than half of last year (1.26)

•Cash on hand was € 677 million at the end of the period after € 460 million net cash outflow related to debt repayments, compared with € 940 million at the close of 2020

GRI 201-1

¹ All comparisons made are relative to the fiscal year 2020

35

Bekaert Annual Report 2021

Bekaert has achieved a new performance milestone in 2021. We made significant progress on the company’s strategy and achieved record sales, solid margin growth, and the lowest debt leverage to date.

Committed to return value to our shareholders

The financial 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.

•The Board will propose to the Annual General Meeting of Shareholders in May of 2022 a 50% gross dividend increase to € 1.50 per share.

•In addition, the Board has 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.
More information on the share buyback program is included in Part II, Governance Statements, ‘Shares’.

Focus and effectiveness of our actions in 2021

We have accelerated our transformation towards higher value creation. Our key actions in 2021 included:

GRI 103-2

Volume growth and market share increase in target markets, enabled by:

•Capturing the opportunities from reverse globalization effects

•Driving growth through a customer-centric and go-to-market strategy and focus

•Securing supply chain excellence to ensure delivery continuity to our customers worldwide

Bekaert delivers superior results and enhances shareholder returns

Structural improvement of the overall Bekaert performance, driven by:

•Product and business mix improvements, in line with our strategy to upgrade the business portfolio

•Acceleration on our transformational innovation, digitalization, and sustainability strategy

•Pricing discipline aligned with cost inflation

•Acceleration of commercial and manufacturing excellence programs

•Continued effective working capital and cost control

Strengthened financial position

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%, significantly down from 39.4% at year-end 2020 due to strong deleveraging.

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Bekaert Annual Report 2021

36

Bekaert Annual Report 2021

More details on Bekaert’s 2021 financial performance are included in Part II, Financial Statements, and in the FY2021 press release that was published on 25 February 2022.

Sales

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 effects (+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 effects.

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 offset by the devaluation (-7.7%) of the Brazilian real, resulting in a top-line increase of +51%.

Financial results

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 significantly 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 financial instruments in 2021 compared to 2020 and to a -26% reduction in interest-bearing financial gross debt in 2021. Other financial income and expenses amounted to € +4 million (€ -30 million in 2020). The 2021 increase was from significantly 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 effective tax rate dropped from 33% to 28%, driven by the utilization of previously unrecognized deferred tax assets in entities that turned profitable.

The share in the result of joint ventures and associated companies was € +108 million (versus € +34 million last year), reflecting 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).

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Bekaert Annual Report 2021

37

Bekaert Annual Report 2021

Consolidated financial statements

Income statement

Balance sheet

Ratios

Joint ventures and associates

Combined key figures

More details on the financial results are included in Part II: Financial Statements of this report. Other marketplace related data such as direct economic value generated and distributed are available in the Financial Statements §5.1, §5.3, §5.4, §5.6, §6.13. 

GRI 201-1

38

Bekaert Annual Report 2021

Value chain

•We believe in lasting relationships with our customers, suppliers and other stakeholders, and are committed to delivering long-term value to all of them.

•We promote and apply responsible and sustainable business practices in all our business and community relationships, consistent with internationally accepted ethical standards.

•We comply with the regulations applicable to the responsible sourcing and handling of chemicals, lubricants and other materials.

•We cooperate with customers and suppliers to enhance sustainability throughout the value chain.

•We develop, digitalize and monitor manufacturing processes to ensure consistent quality and continuously enhance process and energy efficiency.

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Bekaert Annual Report 2021

Our operations

better together with our suppliers

Bekaert operates 75 production plants (subsidiaries and joint ventures) in 25 different countries in EMEA, North America, Latin America and Asia-Pacific. 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 efficiency, product quality, digital modeling and monitoring, and waste prevention and reduction.

Our Supply Chain

Steel wire rod is the main raw material used for the manufacturing of steel wire products. Bekaert purchases different grades of wire rod from steel mills from around the world and transforms them into steel wire products by using mechanical and heat treatment processes, as well as by applying unique coating technologies. 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.

GRI 102-9

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 significant 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

*  JVs included

** percentages relative to Bekaert supplier spend

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Bekaert Annual Report 2021

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 different 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 Pacific.

¹ Joint ventures excluded

Supplier monitoring and commitment

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 effectiveness of the current processes and has identified 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 effective 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.

Responsible sourcing of minerals

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 Conflict 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 conflict mineral issues in their supply chain. All suppliers covered by the RMI have endorsed Bekaert’s Conflict Free Minerals policy and compliance plan.

GRI 102-10

GRI 102-10, GRI 301-2

Virtual Supplier Campaign - Wire Rod Sustainability and Innovation Partnerships

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.

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better together with our customers

Quality as a top priority

Quality is essential for good customer relations. Our customers have a choice, and we strive to be their best choice. We support our customers by adding value to the products and solutions we provide. It is key to meet our customers’ quality expectations, both in terms of product specifications, service levels, and current and future development needs. It is the basis of creating customer value.

Bringing the customer into the heart of our business

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.

Bekaert wins Belgian Association for Quality’s Business Excellence award

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 wins Best Quality Award from Prinx Chengshan

Bekaert was recognized with the 2021 Best Quality Award from tire manufacturer Prinx Chengshan Holdings Co., Ltd. We are a long-term partner of Prinx Chengshan and are honored with the award that praises the high-quality product and excellent service of our steel cord supplies.

Our steel and synthetic mooring ropes connect anchors on the seabed to floating wind turbines and eliminate the need for extensive foundations. Furthermore, Bezinox®, Bekaert’s new-generation cable armoring solution, is used in submarine power cables that transfer electricity from offshore wind farms ashore. This solution lowers the total cost of ownership by reducing energy losses and heat dissipation and by offering a predictable and reliable cable lifetime.

Our Dramix® steel fibers for 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

Sustainable products and solutions

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.

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At Bekaert, we believe it is our responsibility to create the possibility of a better tomorrow.

•We implement actions to reduce the energy used in our operations.

•We use and intend to increase the share of renewable energy sources wherever possible.

•We promote a circular economy by optimizing the share of recycled steel wire rod in our manufacturing processes and by recycling 100% of our steel scrap.

•We avoid the discharge of untreated effluents.

•We work on reducing waste and limiting our water consumption, especially in water-stressed regions.

•We develop sustainable solutions which contribute to a cleaner environment and aim at reducing the environmental footprint along the entire life cycle of products.

•We commit to the Science Based Targets initiative.

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Environmental performance

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)

Our actions in 2021

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 significant impact in the fight 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 financing sustainable growth and achieving the EU objective of becoming climate neutral by 2050.

GRI 103-2

Our strategy and ambitions

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 Office’ within the Strategy Office. 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.

*  JVs included

“

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Our performance in 2021¹

¹ More details on Bekaert’s 2021 environmental performance and targets are included in Part II: Environmental Statements of this report.

Using and investing in renewable energy sources

Developing and installing eco-friendlier production processes in our plants worldwide

Recycled steel: stimulate a circular economy

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 sufficient 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 on-site solar panels.

GRI 302-4

We develop and implement standard solutions and 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 efficiency and specific energy efficiency programs.

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 specifications 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.

GRI 301-2

Bekaert contributes to a circular economy by returning 100% of all steel scrap to the steel industry for recycling.

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Focus on prevention & risk management

Prevention and risk management

Prevention is better than mitigation. Our prevention and risk management-related activities include, among others:

•Programs to reduce our water consumption, especially but not exclusively in water-stressed areas. Total water withdrawal in 2021 was -3% below 2019.

•Protection against soil and groundwater contamination with physical primary and secondary containment as well as condition monitoring and preventative maintenance.

•At the end of 2021, 78% of Bekaert manufacturing plants worldwide were certified to ISO 14001, the international environmental management system standard. Bekaert maintained its group-wide certification for ISO 14001 and ISO 9001 (the quality management standard). In addition, 3 Bekaert plants are now certified to ISO 50001 (the energy management standard). Full worldwide certification for Bekaert manufacturing plants for ISO 14001 and ISO 9001 and increased certification to ISO 50001 are ongoing goals.

•We comply with the EU regulations on hazardous substances (RoHS) in products.

GRI 102-11

You Know Watt

Recognizing the significant 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:

•Measuring energy consumption and building awareness

•Identifying potential energy efficiency improvement opportunities

•Evaluating each opportunity

•Implementing those which are technically and economically feasible, using standard solutions where possible

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 findings and implementing energy efficiency 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 identified several learning opportunities to improve the process, which were incorporated in the design of the next pilot which started in China in February 2022.

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”.

Sustainable products and solutions

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.

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•Our research and innovation activities are aimed at creating value for our customers, for our business, and all our stakeholders to prosper in the long term.

•We co-create with customers and suppliers around the globe to develop, implement, upgrade and protect both current and future technologies.

•We listen to our customers so we understand their innovation and processing needs.

•Knowing how our products function within their production processes and products is key to developing value-creating solutions.

•We accelerate our innovation agenda and upgrade the innovation pipeline.

•We deploy Industrial IoT in our manufacturing and modeling innovations.

•We extend the scope of our innovation activities beyond steel.

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*  JVs included

Highlights in 2021

During 2021 Bekaert has made significant strides in accelerating the innovation agenda. We appointed a new Chief Innovation and Technology Officer, attracted high-profile 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 fixed 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 fields of interest.

Innovation is a key priority in the new Bekaert strategy. We have identified 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 five years.

ENGINE 0 Support our daily efforts by establishing:

ENGINE 1 Support our value creation strategy through:

ENGINE 2 Create new avenues of growth that enable us to:

•Top performing operations

•World class manufacturing through continuous cost & process improvement

•Responsive support to customers

•Innovation platforms that address customer needs

•Differentiation to be better, cheaper, greener and faster than our competitors

•Prioritizing strategic alignment and value potential

•Address major disruptions and need gaps in our key markets

•Be a disruptor rather than be disrupted

•Enter new businesses where we leverage our core and scale

•Collaborate externally through open innovation

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Building a strong innovation culture

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.

Providing solutions for customers

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 floating offshore wind turbine mooring, Bezinox® armoring solutions for power cables, PEM electrolyser fibers for hydrogen production, as well as solutions for the construction industry like the Sigmaslab® concrete technology that combines CCL’s post-tensioning strands with Dramix® steel fiber concrete reinforcement. In 2021, more than 85% of Bekaert’s global portfolio of Research & Innovation efforts targeted distinct sustainable benefits that: limit the use of natural and harmful resources; lower energy consumption and exhaust; increase recycling opportunities; enhance safety; and address the renewable energy market needs. More information on new products and solutions can be found in the ‘Value Chain’ section of this Chapter.

Deploying Industrial IoT in Operations

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.

Engineering

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 flexibility, cost efficiency, 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.

Bekaert acquires development partner VisionTek Engineering Srl

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 finally in the acquisition and integration of VisionTek in February 2022. Together with Bridon-Bekaert, VisionTek has developed the first 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 artificial 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 offer the most advanced services in the ropes market.

Intellectual property

The Intellectual Property department of Bekaert takes care of patents, designs, trademarks, domain names and trade secrets for the whole Bekaert Group, including the joint ventures in Brazil. It also advises on IP clauses in various agreements such as joint development agreements and licenses. At the end of 2021, the Bekaert Group had a portfolio of more than 1 900 patents and patent rights, including 25 first patent filings in 2021, and more than 1 700 trademark registrations.

Securing our digital assets

Cyber risks can affect intellectual property protection and data privacy. Therefore, information security - securing our company’s and customers’ data, assets, and privacy - is critical, especially with many of our team members working remotely. Our employees are our strongest link, and the most effective protection is their awareness of information security risks and cyber threats. Our Information Security Rules explain the actions we can take to defend against cybercriminals and ensure that our information remains protected.

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All employees must be aware of the potential dangers and need to know what to do to reduce cyber risks. The ‘People’ section in this chapter provides more information on how we educate our employees on cyber awareness.

Digital@Bekaert

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 efficiency in our operations processes, build new business models, create value to customers and enhance tools and insight for employees.

MES brings machine data at our operators’ fingertips

In 2021, we continued connecting our plants to our manufacturing execution system (MES). It aims to connect and monitor machines on the factory floor. 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 shopfloor. The new mobile shopfloor app is the extra pair of eyes and ears of the supervisors.

Open innovation

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 field-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-efficient 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.

Acknowledgement

We wish to thank the Flemish government’s Flanders Innovation & Entrepreneurship (VLAIO) agency, as well as the Belgian federal government. Their subsidies and incentives for R&D projects involving highly educated scientific staff and researchers in Flanders are essential for maintaining a foothold for R&D activities in Belgium.

We also want to express our sincere appreciation for the support of the Irish Research Council and I-Form, the SFI Research Centre for Advanced Manufacturing.

Furthermore, we want to thank the Research & Innovation department of the European Commission for supporting innovation with project grants.

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 floating 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.

Memberships & associations

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

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•We are committed to provide equal opportunity in employment and respect the rights and dignity of each employee.

•Bekaert is firmly committed to complying with national legislations and collective labor agreements.

•We empower our teams with responsibility, authority and accountability, and count on the engagement of every Bekaert employee in driving a higher-level performance.

•We nurture talent through career development and life-long learning. We attach great importance to providing challenging career and personal development opportunities to our employees.

•Our global safety approach aims to create a no-harm, risk-free working environment for all our employees and for anyone working at or visiting our premises. We believe that taking care of people is fundamental to the success of the business.

•We 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.

•We support and develop initiatives that help improve the social conditions in the communities where we are active. We stimulate initiatives that help create a sustainable future for our communities and for the broader society.

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Our commitment toward our employees

Respecting

* 23 568 in consolidated entities
+ 3 613
in joint ventures
= 27 181 combined

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

human rights

Bekaert is firmly committed to complying with national legislation and collective labor agreements. Bekaert adheres to the Universal Declaration of Human Rights and the treaties and recommendations of the International Labor Organization.

We respect the rights and dignity of each employee. We promote equal opportunity and do not discriminate against any employee or applicant for employment based on age, race, nationality, social or ethnic descent, gender, physical disability, sexual preference, religion, political preference, or union membership. We foster diversity and inclusion and recognize and respect the cultural identity of our teams in all the countries in which we operate and do business.

The recruitment, remuneration, application of employment conditions, training, promotion and career development of our employees are based on professional qualifications only.

GRI 102-12, GRI 103-2

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

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Learning & development

The program is a powerful blended learning experience, combining online e-learning with practical facilitator-led group workshops to put theory into practice, and adding individual coaching sessions with experienced business leaders to the mix.

41 colleagues from 20 different countries participated in the virtual program. All our Elevation colleagues received a toolbox to support them on their development journey.

Hybrid working

Elevation program launched

In 2021 we launched Elevation, a development program designed to equip first-time leaders with the knowledge, skills, and confidence that help them become an effective team leader who keeps a team motivated, aligned, and engaged. The program coaches first-time leaders to set and achieve personal and professional goals, expand their network, and broaden their experience.

Information Security Week

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.

Learning goes digital

To keep our employees up to speed with the latest innovations in their work domain, we expanded our learning offering digitally. The academies of the Bekaert University brought more courses to our online My Learning platform, while we now also offer access for all employees to external learning services.

Health & safety

In January 2021 we introduced a hybrid working model for office 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 finger injuries. Bekaert is reinforcing its safety

We nurture talent through career development and life-long learning. We attach great importance to providing challenging career and personal development opportunities to our employees. Training programs not only include technical and job specific training, but also leadership modules that help our people develop and cooperate in a global business environment.

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

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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.

Safety champions

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.

Covid-19

To help fight the global pandemic, we strongly encourage all employees to accept a vaccination in line with national vaccination campaigns and laws, and specific medical advice. We support access to the vaccination for everyone and organized vaccination for employees and outsourced staff in countries without an effective 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 offered. We also count on our employees to respect the choice of others.

Compass: a safety and compliance learning journey

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.

Health & Safety Week on finger safety and burnout prevention

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 & finger 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.

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Diversity & Inclusion

We want Bekaert to be a great place to work. A place that inspires and ignites creativity and where everyone feels safe and welcome. We want our employees to actively take part in building an inclusive workplace for all. With the support of the Bekaert Group Executive (BGE) and the Diversity & Inclusion (D&I) Council, employees are encouraged to form affinity groups and collaborate in generating inspiring ideas and creating positive change.

In relation to gender diversity, 28% of the managers and salaried professionals of the Bekaert subsidiaries are female (as per year-end 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.

Our commitment toward society

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.

Supporting education and training initiatives

All around the world Bekaert teams have organized support programs that benefit the local communities. To name a few, our teams in India and Chile provided PCs and tablets to schools, making it possible for children to participate to online courses during Covid-lockdowns. Our entities in Ecuador and India supported micro-financing projects that help women set up a small business. Teams all over the world participated in sports and other events to support programs that benefit people with a physical or mental disability or in financial need. Various entities engaged local stakeholders in safety programs during the Bekaert Health & Safety week.

Supporting social relief

Mid 2021, heavy rainfall across northern and central parts of Europe caused devastating floods 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 floods and donated € 50 000 to the Red Cross to help victims with first 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 efforts through donations and by offering employment and accommodation at different locations.

We are one team, united by Bekaert’s history and values, and by working better together for all our stakeholders.

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Community Engagement benefiting the environment

Bekaert has concluded, in December 2021, a partnership with River CleanUp, a non-profit organization that organizes river clean-up events, develops technology for permanent and mobile plastic removal from rivers, and educates and creates awareness to stop plastics from entering the eco-systems. Bekaert supports both financially and in-kind, through engineering advice and materials, 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.

STATEMENTS

PART II

corporate governance statements

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Bekaert Annual Report 2021

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 Officer are never the same individual. The Chief Executive Officer is the only Board member with an executive function. All other members are non-executive Directors. 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 (first appointed in 2020), Colin Smith (first appointed in 2018), Eriikka Söderström (first appointed in 2020), Jürgen Tinggren (first appointed in 2019) and Mei Ye (first appointed in 2014).

The Board of Directors met on 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:

•the corporate strategy and strategic projects;

•the IT and digital strategy, including cybersecurity;

•the sustainability strategy;

•the budget for 2022;

•the succession planning at the Board and Executive Management levels;

•the Covid-19 pandemic: impact on the Group, prevention measures and specific actions;

•the restructuring process and plan in Belgium;

•the corporate governance structure, amongst which the proposal to introduce double voting right for loyal shareholders;

•the remuneration policy for non-executive Directors and Executive Management;

•the remuneration and long-term incentives for the (interim) Chief Executive Officer and the other members of the Executive Management;

•governance, risk and compliance;

•continuous monitoring of the debt and liquidity situation of the Group.

On 1 January 2020, the 2020 Belgian Code on Corporate Governance (the “Code 2020”) and the new Belgian Code on Companies and Associations (the “BCCA”) entered into force and became applicable to Bekaert. The Bekaert Corporate Governance Charter and the Articles of Association of the Company were amended to bring both in line with the Code 2020 and the BCCA.

Bekaert complies with the provisions of the Code 2020, except with provision 7.6.

Contrary to provision 7.6 of the Code 2020 according to which non-executive Directors should receive part of their remuneration in the form of shares in the Company and these shares should be held until at least one year after the non-executive Director leaves the Board and at least three years after the moment of award, non-executive Directors are recommended (but not required):

•to build up a personal shareholding of one annual fixed Board fee during the period of their tenure; and

•to maintain this until at least one year after the non-executive Director leaves the Board and at least three years after the moment of award.

Despite the non-mandatory character of this shareholding principle, the Company believes that the long-term view of shareholders is fairly represented at the Board considering that the Chairman is remunerated in Bekaert shares subject to a three-year lock-up; and that the non-executive Directors who are nominated by the reference shareholder already hold Bekaert shares (or certificates relating thereto).

The Code 2020 is available at
www.corporategovernancecommittee.be.

The Bekaert Corporate Governance Charter is available at www.bekaert.com.

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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.

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Bekaert Annual Report 2021

Nomination and Remuneration Committee

Since 1 January 2020, the Board of Directors has two advisory Committees.

Audit, Risk and Finance Committee

The Audit, Risk and Finance Committee is composed in accordance with Article 7:99 of the BCCA and provision 4.3 of the Code 2020: all its four members are non-executive Directors and two of its members, Eriikka Söderström and Jürgen Tinggren, are independent. Eriikka Söderström’s competence in accounting and auditing is demonstrated by her former position as Chief Financial Officer of F-Secure Corporation, Kone Corporation, and Vacon Plc, all stock-listed on Nasdaq Helsinki. Additionally, she holds audit committee chair experience from mandates at Valmet, Kempower, and Comptel. The members of the Committee have a collective expertise relevant to the sector in which the Company is operating. Hubert Jacobs van Merlen has been appointed by the members of the Committee as the Chairman.

The Chief Executive Officer and the Chief Financial Officer are not members of the Committee but are invited to attend its meetings. This arrangement guarantees the essential interaction between the Board of Directors and the Executive Management.

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 financing structure of the Group;

•the debt and liquidity situation;

•the liquidity agreement with Kepler Cheuvreux;

•the activity reports of the internal audit department;

•the reports of the Statutory Auditor;

•governance, risk and compliance and review of the major risks and the related mitigation plans under Bekaert’s enterprise risk management program;

•internal control and risks.

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 field of remuneration policy is demonstrated by the relevant experience of its members.

One of the Directors nominated by the principal shareholder and the Chief Executive Officer 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:

•talent, leadership and culture;

•succession planning at Board and Executive Management levels;

•the remuneration report 2020;

•the remuneration policy for non-executive Directors and Executive Management;

•the variable remuneration for the (interim) Chief Executive Officer and the other members of the Executive Management for their performance in 2020;

•the base remuneration for the (interim) Chief Executive Officer and the other members of the Executive Management;

•the remuneration of the Chairman of the Board of Directors;

•target setting for 2021;

•gender diversity.

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Bekaert Annual Report 2021

The main features of the process for evaluating the Board of Directors, its Committees and the individual Directors are described in this section and in paragraph II.3.4 of the Bekaert Corporate Governance Charter.

The Board of Directors, under the lead of the Chairman, assesses at least every three years its own performance and its interaction with the Executive Management, as well as its size, composition, functioning and that of its Committees. The evaluation is carried out through a formal process, whether externally facilitated, in accordance with a methodology approved by the Board.

Prior to the end of each Board member’s term, the Nomination and Remuneration Committee, under the lead of the Chairman, evaluates this Board member’s presence at the Board or Board Committee meetings, their commitment and their constructive involvement in discussions and decision-making in accordance with a pre-established and transparent procedure. The Nomination and Remuneration Committee also assesses whether the contribution of each Board member is adapted to changing circumstances.

The Board acts on the results of the performance evaluation. Where appropriate, this involves proposing new Board members for appointment, proposing not to re-appoint existing Board members or taking any measure deemed appropriate for the effective operation of the Board.

The Chairman always remains available to consider suggestions for improvement of the functioning of the Board or the Board Committees.

The non-executive Directors meet at least once a year in the absence of the Chief Executive Officer to assess their interaction with Executive Management.

In 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 effectiveness and Chairman effectiveness. 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 Officer. The BGE has sub-delegated certain of these operational powers to individuals within their functional or operational responsibility.

The BGE is composed of members representing the global Business Units and the global functions.

As of 12 May 2020, Oswald Schmid acted as interim Chief Executive Officer, pending the appointment of a new Chief Executive Officer. On 2 March 2021, the Board of Directors appointed Oswald Schmid as Chief Executive Officer.

Kerstin Artenberg joined Bekaert as Chief Human Resources Officer on 8 February 2021.

Yves Kerstens joined Bekaert as Divisional CEO Specialty Businesses and Chief Operations Officer 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.

¹ As of 2 March 2021.

² As of 8 February 2021.

³ As of 1 April 2021.

⁴ Until 14 July 2021.

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