2.1. Statement of compliance
The consolidated financial statements have been prepared in accordance with and comply with the International Financial Reporting Standards (IFRS) which have been endorsed by the European Union.
New and amended standards and interpretations
Standards, interpretations and amendments effective in 2022
In the current year, the Group has applied the below amendments to IFRS standards and Interpretations issued by the Board that are effective for an annual period that begins on or after 1 January 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
\u2022Amendments to IFRS 3 \u2018Business combinations\u2019 - References to the conceptual framework, effective\u00a01\u00a0January\u00a02022.
\u2022Amendments to IAS 16 \u2018Property, plant and equipment\u2019 - Proceeds before intended use, effective 1\u00a0January\u00a02022.
\u2022Amendments to IAS 37 \u2018Provisions, contingent liabilities and contingent assets\u2019 - onerous contracts - cost of fulfilling a contract, effective\u00a01\u00a0January\u00a02022.
\u2022Annual Improvements Cycle 2018-2020, effective\u00a01\u00a0January\u00a02022.
These amendments had no impact on the consolidated financial statements of the Group.
Standards, amendments and interpretations that are not yet effective in 2022 and have not been early adopted
The Group has not early adopted any other standards, interpretations or amendments that have been issued but are not yet effective. These new, and amendments to, standards and interpretations effective after 2022 are not expected to have a material impact on the financial statements.
\u2022Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019 - Classification of Liabilities as Current or Non-Current, effective 1\u00a0January\u00a02024.
\u2022Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019 - Disclosure of Accounting policies, effective 1\u00a0January\u00a02023.
\u2022Amendments to IAS 8 \u2018Accounting policies, changes in accounting estimates and errors\u2019 - Definition of Accounting estimates, effective 1\u00a0January\u00a02023.
\u2022Amendments to IAS 12 \u2018Income taxes\u2019 - Deferred taxes related to assets and liabilities arising from a single transaction, effective 1\u00a0January\u00a02023.
\u2022Amendments to IAS 16 'Leases - Lease liability in a Sale and Leaseback, effective on 1\u00a0January\u00a02024.
\u2022Amendments to IFRS 17 \u2018Insurance contracts; initial application of IFRS 17 and IFRS 9 - Comparative information', effective 1\u00a0January\u00a02023.
The Group will adopt these standards and interpretations, if applicable, when they come effective.
2.2. General principles
Basis of preparation
The consolidated financial statements are presented in thousands of euro (unless otherwise stated), under the historical cost convention, except for derivatives, financial assets at Stock and financial assets at FVTPL, which are stated at their fair value. Financial assets which do not have a quoted price in an active market or the fair value of which cannot be reliably measured are carried at cost. Unless explicitly stated, the accounting policies are applied consistently with the previous year. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
Principles of consolidation
Subsidiaries
Subsidiaries are entities over which NV Bekaert SA exercises control, which is the case when the Company is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date when the Group acquires control until the date when control is relinquished. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
\u2022The contractual arrangement(s) with the other vote holders of the investee
\u2022Rights arising from other contractual arrangements
\u2022The Group\u2019s voting rights and potential voting rights
All intercompany transactions, balances with and unrealized gains on transactions between Group companies are eliminated; unrealized losses are also eliminated unless the impairment is permanent. Equity and net result attributable to non-controlling shareholders are shown separately in the balance sheet, the income statement and the comprehensive income statement. Changes in the Group\u2019s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:
\u2022the aggregate of the fair value of the consideration received and the fair value of any retained interest; and
\u2022the carrying amount of the assets (including goodwill), liabilities and any non-controlling interests of the subsidiary before its disposal.
All subsidiaries are following the calendar year as accounting year, except for the Indian companies (from April to March) and Scheldestroom NV (from October to September). The latter do report to the Group according the calendar year. The subsidiaries apply the same accounting policies as the Group.
Joint arrangements and associates
A joint arrangement exists when NV Bekaert SA has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement can be treated as a joint operation (i.e. NV Bekaert SA has rights to the assets and obligations for the liabilities) or a joint venture (i.e. NV Bekaert SA only has rights to the net assets). Associates are companies in which NV Bekaert SA, directly or indirectly, has a significant influence and which are neither subsidiaries nor joint arrangements. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is prepared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or significant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially remeasured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and contingent liabilities acquired is recognized as goodwill. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group\u2019s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group\u2019s share of the losses of a joint venture or associate exceeds the carrying amount of the investment, the investment is carried at nil value and recognition of additional losses is limited to the extent of the Group\u2019s commitment. Unrealized gains arising from transactions with joint ventures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group\u2019s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within \u2018Group\u2019s share of the results of joint ventures and associates\u2019 in the statement of profit or loss. Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
The financial statements of the associate or joint venture are prepared according to the accounting and valuation principles of the Group and for the same reporting period as the Group.
Foreign currency translation
Items included in the financial statements of each of the Group\u2019s entities are measured using the currency of the primary economic environment in which the entity operates (\u2018the functional currency\u2019). The consolidated financial statements are presented in euro, which is the Company\u2019s functional and the Group\u2019s presentation currency. Financial statements of foreign entities are translated as follows:
\u2022assets and liabilities are translated at the closing exchange rate of the European Central Bank;
\u2022income, expenses and cash flows are translated at the average exchange rate for the year;
\u2022shareholders\u2019 equity is translated at historical exchange rates.
Exchange differences arising from the translation of the net investment in foreign subsidiaries, joint ventures and associates at the closing exchange rate are included in shareholders\u2019 equity under \u2018cumulative translation adjustments\u2019. On disposal of foreign entities, cumulative translation adjustments are recognized in the income statement as part of the gain or loss on the sale. In the financial statements of the parent company and its subsidiaries, monetary assets and liabilities denominated in foreign currency are translated at the exchange rate at the balance sheet date, thus giving rise to unrealized exchange results. Unrealized and realized foreign-exchange gains and losses are recognized in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Goodwill is treated as an asset of the acquiree and is accordingly accounted for in the acquiree\u2019s currency and translated at the closing rate.
2.3. Balance sheet items
Intangible assets
Intangible assets acquired in a business combination are initially measured at fair value; intangible assets acquired separately are initially measured at cost. After initial recognition, intangible assets are measured at cost or fair value less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The amortization period and method are reviewed at each financial year-end. A change in the useful life of an intangible asset is accounted for prospectively as a change in estimate. Under the provisions of IAS 38 intangible assets may have indefinite useful lives. If the useful life of an intangible asset is deemed indefinite, no amortization is recognized and the asset is reviewed at least annually for impairment.
Licenses, patents and similar rights
Expenditure on acquired licenses, patents, trademarks and similar rights is capitalized and amortized on a straight-line basis over the contractual period, if any, or the estimated useful life, which is normally considered not to be longer than ten years.
Computer software on-premises
Purchased on-premises software is installed and runs on computers on the premises of the company using the software, rather than at a remote facility such as a server farm or cloud. Generally, such costs are directly associated with the acquisition and implementation of acquired ERP software and are recognized as intangible assets and amortized over five years on a straight-line basis. External (relating to third party providers and consultants) and internal (relating to Bekaert personnel) implementation costs are eligible for capitalization.
Website development
An intangible asset should be recognized for website development costs if and only if, it meets the general recognition requirements in IAS 38 and the six conditions for recognition as development costs. Most important of these is the requirement to demonstrate how the website will generate probable future economic benefits. Costs linked to website development solely or primarily for promoting and advertising own products and services will be expensed as incurred. When the website is used directly or indirectly in the income generating process, the costs are eligible for capitalization.
Cloud computing arrangements
In a cloud computing arrangement, a customer pays a fee to a vendor in exchange for access to software over the internet. The software is hosted by the vendor on the vendor\u2019s computing infrastructure. Examples of cloud computing arrangements are Software-as-a-Service (SaaS), platform as a service, infrastructure as a service. This differs from an \u2018on-premise\u2019 arrangement where a company licenses or purchases a copy of the software from a vendor and operates the software on its own computing infrastructure. Up-front costs are often incurred in cloud computing arrangements to implement the software. To be eligible for capitalization as an intangible asset, the Group determines if the company is in control of the software or is in control of the configuration or implementation itself. The Group distinguishes the following types of cloud computing arrangements:
\u2022private cloud arrangements: these are in nature comparable to on-premise arrangements and are accounted for equally;
\u2022public cloud arrangements: configuration or implementation expenses linked to these arrangements are only eligible for capitalization if the Group is in control of the configuration or implementation itself.
Commercial assets
Commercial assets mainly include customer lists, customer contracts and brand names, mostly acquired in a business combination, with useful lives ranging between 8 and 15 years.
Emission rights
In the absence of any IASB standard or interpretation regulating the accounting treatment of CO2 emission rights, the Group has applied the \u2018net approach\u2019, according to which:
\u2022the allowances are recognized as intangible assets and measured at cost (the cost of allowances issued free of charge being therefore zero); and
\u2022any short position is recognized as a liability at the fair value of the allowances required to cover the shortfall at the balance sheet date.
Research and development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding is recognized in the income statement as an expense when it is incurred.
Expenditure on development activities where research findings are applied to a plan or design for the production of new or substantially improved products and processes prior to commercial production or use is capitalized if, and only if, all of the recognition criteria set out below are met:
\u2022the product or process is clearly defined and costs are separately identified and reliably measured;
\u2022the technical feasibility of the product is demonstrated;
\u2022the product or process is to be sold or used in house;
\u2022the assets are expected to generate future economic benefits (e.g. a potential market exists for the product or, if for internal use, its usefulness is demonstrated); and
\u2022adequate technical, financial and other resources required for completion of the project are available.
Capitalized development costs are amortized from the commencement of commercial production of the product on a straight-line basis over the period during which benefits are expected to accrue. The period of amortization normally does not exceed ten years. An in-process research and development project acquired in a business combination is recognized as an asset separately from goodwill if its fair value can be measured reliably.
Goodwill and business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred. The identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the difference between:
(i) the sum of the following elements:
\u2022consideration transferred;
\u2022amount of any non-controlling interests in the acquiree;
\u2022fair value of the Group\u2019s previously held equity interest in the acquiree (if\u00a0any); and
(ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, this difference is negative (\u2018negative goodwill\u2019), it is recognized immediately in profit or loss as a bargain purchase gain.
Non-controlling interests are initially measured either at fair value or at their proportionate share of the recognized amounts of the acquiree\u2019s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
When a business combination is achieved in stages, the Group\u2019s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and any resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest was disposed of.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Property, plant and equipment
The Group has opted for the historical cost model and not for the revaluation model. Property, plant and equipment separately acquired is initially measured at cost. Property, plant and equipment acquired in a business combination is initially measured at fair value, which thus becomes its deemed cost. Assets under construction are stated at cost, net of accumulated impairment losses, if any. After initial recognition, property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes all direct costs and all expenditure incurred to bring the asset to its working condition and location for its intended use. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognized in profit or loss as incurred.\u00a0
Depreciation is provided over the estimated useful lives of the various classes of property, plant and equipment on a straight-line basis. The useful life and depreciation method are reviewed at least at each financial year-end. Unless revised due to specific changes in the estimated economic useful life, annual depreciation rates are as follows:
\u2022land: 0%
\u2022buildings: 5%
\u2022plant, machinery & equipment: 8%-25%
\u2022R&D testing equipment: 16.7%-25%
\u2022furniture and vehicles: 20%
\u2022computer hardware: 20%
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.
Right-of-Use (RoU) property, plant & equipment
The Group as lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12\u00a0months or less) and leases of low value assets (such as printers, copiers and small office equipment). For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs.
They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the underlying asset. If a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Rights to use land are amortized over the contractual period which can vary between 30\u00a0and\u00a0100\u00a0years, but is in most cases 50 years. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36 to determine whether a right-of-use asset is impaired.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occurs. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead accounts for any lease and associated non-lease components as a single arrangement. The Group applies this practical expedient on contracts for company cars and industrial vehicles, where non-lease components such as maintenance and replacement of tires are not separated but included in the lease component.
Government grants
Government grants relating to the purchase of property, plant and equipment are deducted from the cost of these assets. They are recognized in the balance sheet at their expected value at the time of initial government approval and corrected, if necessary, after final approval. The grant is amortized over the depreciation period of the underlying assets.
Financial assets
The Group classifies its financial assets in the following categories: measured at amortized cost, at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). The classification depends on the contractual characteristics of the financial assets and the business model under which they are held. Management determines the classification of its financial assets at initial recognition.
Financial assets at amortized cost
Financial assets are classified at amortized cost when the contract has the characteristics of a basic lending arrangement and they are held with the intention of collecting the contractual cash flows until their maturity. The Group\u2019s financial assets at amortized cost comprises, unless stated otherwise, trade and other receivables, bills of exchange received, short-term deposits and cash and cash equivalents in the balance sheet. They are measured at amortized cost using the effective interest method, less any impairment.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022the rights to receive cash flows from the asset have expired
\u2022the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through arrangement\u2019; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extend, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extend of its continuing involvement. in that case, the Group also recognizes an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Financial assets at fair value
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges.
Bills of exchange received
Payment by means of bills of exchange (bank acceptance drafts) is a widespread practice in China. Bills of exchange received are either settled at maturity date, discounted before the maturity date or transferred to a creditor to settle a liability. Discounting is done either with or without recourse. With recourse means that the discounting bank can claim reimbursement of the amount paid in case the issuer defaults. When a bill is discounted with recourse, the amount received is not deducted from the outstanding bills of exchange received, but a liability is recognized in \u2018current interest-bearing debt\u2019 until the maturity date of that bill.
Cash & cash equivalents and short-term deposits\u00a0
Cash equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignificant risk of change in value. Cash equivalents are highly liquid and have original maturities of three months or less, while short-term deposits have original maturities of more than three months and less than one year. Balances from cash pool facilities are reported as cash & cash equivalents. Bank overdrafts are not reported as a deduction from cash & cash equivalents but as interest-bearing debt.
Impairment of financial assets
Financial assets that are debt instruments, other than those measured at FVTPL, are tested for impairment using the expected credit loss model (\u2018ECL\u2019). The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical experience and informed credit assessment and including forward-looking information. The Group always recognizes lifetime ECL for trade receivables.
At each reporting date, Bekaert measures the impairment loss for financial assets measured at amortized cost (e.g. trade receivables and bills of exchange received) as the present value of the expected cash shortfalls (discounted at the original effective interest rate). Amounts deemed uncollectible are written off against the corresponding allowance account at each balance sheet date. In assessing collective impairment, the Group uses historical information on the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. Additions to and recoveries from the bad debt allowance account related to trade receivables are reported under \u2018selling expenses\u2019 in the income statement.
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is determined by the first-in, first-out (FIFO) method. For processed inventories, cost means full cost including all direct and indirect production costs required to bring the inventory items to the stage of completion at the balance sheet date. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and costs necessary to make the sale.
Share capital
When shares are repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Repurchased shares (treasury shares) are presented in the balance sheet as a deduction from equity. The result on the disposal of treasury shares sold or cancelled is recognized in retained earnings.
Non-controlling interests
Non-controlling interests represent the shares of minority or non-controlling shareholders in the equity of subsidiaries which are not fully owned by the Group. At the acquisition date, the item is either measured at its fair value or at the non-controlling shareholders\u2019 proportion of the fair values of net assets recognized on acquisition of a subsidiary (business combination). Subsequently, it is adjusted for the appropriate proportion of subsequent profits and losses. The losses attributable to non-controlling shareholders in a consolidated subsidiary may exceed their interest in the equity of the subsidiary. A proportional share of total comprehensive income is attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Provisions
Provisions are recognized in the balance sheet when the Group has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. When appropriate, provisions are measured on a discounted basis.
Restructuring
A provision for restructuring is only recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly before the balance sheet date. Restructuring provisions only include the direct expenditure arising from the restructuring which is necessarily incurred on the restructuring and is not associated with the ongoing activities of the entity.
Site remediation
A provision for site remediation in respect of contaminated land is recognized in accordance with the Group\u2019s published environmental policy and applicable legal requirements.
Employee benefit obligations
The parent company and several of its subsidiaries have pension, death benefit and health care benefit plans covering a substantial part of their workforce.
Defined-benefit plans
Most pension plans are defined-benefit plans with benefits based on years of service and level of remuneration. For defined-benefit plans, the amount recognized in the balance sheet (net liability or asset) is the present value of the defined-benefit obligation less the fair value of any plan assets. The present value of the defined-benefit obligation is the present value, without deducting any plan assets, of expected future payments required to settle the obligation resulting from employee service in the current and prior periods. The present value of the defined-benefit obligation and the related current and past service costs are calculated using the projected unit credit method. The discount rate used is the yield at balance sheet date on high-quality corporate bonds with remaining terms to maturity approximating those of the Group\u2019s obligations. In case the fair value of plan assets exceeds the present value of the defined-benefit obligations, the net asset is limited to the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The net interest on the net defined-benefit liability/asset is based on the same discount rate. Actuarial gains and losses comprise experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred) and the effects of changes in actuarial assumptions. Past service cost is the change in the present value of the defined-benefit obligation for employee service in prior periods and resulting in the current period from a plan amendment or a curtailment. Past service costs are recognized immediately through profit or loss. Remeasurements of the net defined-benefit liability (asset) comprise (a) actuarial gains and losses, (b) the return on plan assets, after deduction of the amounts included in net interest on the net defined-benefit liability
(asset) and (c) any change in the effect of the asset ceiling, after deduction of any amounts included in net interest on the net defined-benefit liability (asset). Remeasurements are recognized immediately through equity. A settlement is a transaction that eliminates all further legal or constructive obligations for part or all of the benefits provided under a defined-benefit plan, other than a payment of benefits to, or on behalf of, employees that is set out in the terms of the plan and included in the actuarial assumptions.
In the income statement, current and past service cost, including gains or losses from settlements, are included in the operating result (EBIT), and the net interest on the net defined-benefit liability (asset) is included in interest expense, under interest on interest-bearing provisions. Pre-retirement pensions in Belgium and plans for medical care in the United States are also treated as defined-benefit plans.
Defined-contribution plans
Obligations in respect of contributions to defined-contribution pension plans are recognized as an expense in the income statement as they fall due. By law, defined-contribution pension plans in Belgium are subject to minimum guaranteed rates of return. Before 2015, the defined-contribution plans in Belgium were basically accounted for as defined-contribution plans. New legislation dated December 2015 however triggered the qualification. As a consequence, the defined-contribution plans are reported as defined-benefit obligations, whereby as from year end 2016 an actuarial valuation was performed.
Other long-term employee benefits
Other long-term employee benefits, such as service awards, are accounted for using the projected unit credit method. However, the accounting method differs from the method applied for post-employment benefits, as actuarial gains and losses are recognized immediately through profit or loss.
Share-based payment plans
The Group issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled plans allow Group employees to acquire shares of NV Bekaert SA, and include stock option plans (\u2018SOP\u2019),
performance share plans (\u2018PSP\u2019), personal shareholding requirement plans (\u2018PSR\u2019) and stock grants, all of which are operated in Belgium. Cash-settled plans entitle Group employees to receive payment of cash bonuses based on the price of the Bekaert share on the Euronext stock exchange, and include share appreciation rights (\u2018SAR\u2019) and performance share unit plans (\u2018PSU\u2019), all of which are operated outside Belgium.
Equity-settled share-based payments are recognized at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed, with a corresponding increase in equity, on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of equity instruments granted that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Cash-settled share-based payments are recognized as liabilities over the vesting period at fair value, which is remeasured at each reporting date and at the date of settlement. Changes in fair value are recognized in the income statement over the vesting period, taking into account the number of units or rights expected to vest.
The Group uses binomial models or Monte Carlo simulations to determine the fair value of the share-based payment plans.
Interest-bearing debt
Interest-bearing debt includes loans and borrowings which are initially recognized at the fair value of the consideration received net of transaction costs incurred. In subsequent periods, they are carried at amortized cost using the effective interest-method, any difference between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If financial liabilities are hedged using derivatives qualifying as a fair value hedge, the hedging instruments are carried at fair value and the hedged items are remeasured for fair value changes due to the hedged risk (see accounting policies for derivatives and hedging).
Lease liabilities
Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
\u2022fixed lease payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
\u2022the amount expected to be payable by the lessee, under residual value guarantees;
\u2022the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
\u2022payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
\u2022The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
\u2022The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate.
\u2022A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Trade payables and other current liabilities
Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company.
Income taxes
Income taxes are classified as either current or deferred taxes. Current income taxes include expected tax charges based on the accounting profit for the current year and adjustments to tax charges of prior years. In evaluating the potential income tax liabilities, the Group assumes that the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations. The Group takes into account both the assessments, decisions and verdicts received from tax audits and other kinds of information sources as well as the potential sources of challenge from tax authorities. The Group recognizes a liability when the Group assesses it is not probable for the tax authorities to accept the position that the Group takes regarding the tax treatment in question. The Group measures the income tax liability according to the most likely amount of the potential economic outflow. However, Bekaert continues to believe that its positions on all these audits are robust.
Deferred taxes are calculated, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred taxes are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled, based on tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized; this criterion is reassessed at each balance sheet date. In assessing the recoverability of deferred tax assets, the Group relies on the forecast assumptions used elsewhere in the financial statements and in other management reports. Deferred tax on temporary differences arising on investments in subsidiaries, associates and joint ventures is provided for, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Impairment of assets
Goodwill and intangible assets with an indefinite useful life or not yet available for use (if any) are reviewed for impairment at least annually; other tangible and intangible fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized in the income statement as and when the carrying amount of an asset exceeds its recoverable amount (being the higher of its fair value less costs of disposal and its value in use). The fair value less costs of disposal is the amount obtainable from the sale of an asset in an arm\u2019s length transaction less the costs of disposal, while value in use is the present value of the future cash flows expected to be derived from an asset. Recoverable amounts are estimated for individual assets or, if this is not possible, for the smallest cash-generating unit to which the assets belong. Reversal of impairment losses recognized in prior years is included as income when there is an indication that the impairment losses recognized for the asset are no longer needed or the need has decreased, except for impairment losses on goodwill, which are never reversed.
2.4. Income statement items
Revenue recognition
The Group recognizes revenue mainly from the sale of products. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognizes revenue from the sale of products when it transfers control over the corresponding product to a customer. Revenue from the sale of products is recognized at a point in time. Sales are recognized net of sales taxes and discounts. Interest is recognized on a time-proportional basis that reflects the effective yield on the asset. The Group recognizes revenue for a sales-based or usage-based royalty only when (or as) the later of the following events occurs: the subsequent sale or usage occurs; and the performance obligation to which some or all of the sales-based or usage-based royalties has been allocated has been satisfied. Royalties are recognized on an accrual basis in accordance with the terms of agreements and are linked to technology and management support. Dividends are recognized when the shareholder\u2019s right to receive payment is established.
2.5. Statement of comprehensive income and statement of changes in equity
The statement of comprehensive income presents an overview of all income and expenses recognized both in the income statement and in equity. In accordance with IAS 1 \u2018Presentation of Financial Statements\u2019, an entity can elect to present either a single statement of comprehensive income or two statements, i.e. an income statement immediately followed by a comprehensive income statement. The Group elected to do the latter. A further consequence of presenting a statement of comprehensive income is that the content of the statement of changes in equity is confined to owner-related changes only.
2.6. Alternative performance measures
To analyze the financial performance of the Group, Bekaert consistently uses various non-GAAP metrics or Alternative Performance Measures (\u2018APMs\u2019) as defined in the European Securities and Markets Authority\u2019s (\u2018ESMA\u2019) Guidelines on Alternative Performance Measures. In accordance with these ESMA Guidelines, the definition and reason for use of each of the APMs as well as reconciliation tables are provided in the \u2018Alternative performance measures\u2019 section of the Financial Statements. The main APMs used in the Financial Statements relate to underlying performance measures.
Underlying performance measures
Operating income and expenses that are related to restructuring programs, impairment losses, the initial accounting for business combinations, business disposals, environmental provisions or other events and transactions that have a one-off effect are excluded from Underlying EBIT(DA) measures.
Restructuring programs mainly include lay-off costs, gains and losses on disposal, and impairment losses of assets involved in a shut-down, major reorganization or relocation of operations. When not related to restructuring programs, only impairment losses resulting from testing cash-generating units qualify as one-off effects.
One-off effects from business combinations mainly include: acquisition-related expenses, negative goodwill, gains and losses on step acquisition, and recycling of CTA on the interest previously held. One-off effects from business disposals include gains and losses on the sale of businesses that do not qualify as discontinued operations. These disposed businesses may consist of integral, or parts (disposal groups) of subsidiaries, joint ventures and associates.
Besides environmental provisions, other events or transactions that are not inherent to the business and have a one-off effect mainly include disasters and sales of investment property.
2.7. Miscellaneous
Non-current assets held for sale and discontinued operations
A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. A discontinued operation is a component of an entity which the entity has disposed of or which is classified as held for sale, which represents a separate major line of business or geographical area of operations and which can be distinguished operationally and for financial reporting purposes.
For a sale to be highly probable, the entity should be committed to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan should be initiated, and the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its current fair value, and the sale should be expected to be completed within one year from the date of classification. Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs necessary to make the sale. Any excess of the carrying amount over the fair value less costs to sell is included as an impairment loss. Depreciation of such assets is discontinued as from their classification as held for sale. Comparative balance sheet information for prior periods is not restated to reflect the new classification in the balance sheet.
Contingencies
Contingent assets are not recognized in the financial statements. They are disclosed if the inflow of economic benefits is probable. Contingent liabilities are not recognized in the financial statements, except if they arise from a business combination. They are disclosed, unless the possibility of a loss is remote.
The 2021 comparative information has been restated due to:
(a). Attributing benefits to periods of service under IAS 19 \u2018Employee Benefits\u2019
In May 2021, the IFRS Interpretations Committee finalized an agenda decision about the periods of service to which an entity attributes benefit for a particular defined benefit plan. Under the terms of the plan, employees are entitled to a lump sum benefit payment when they reach a specified retirement age provided they are employed by the entity when they reach that retirement age; and the amount of the retirement benefit to which an employee is entitled depends on the length of employee service with the entity before the retirement age and is capped at a specified number of consecutive years of service.
IAS 19 requires an entity to attribute benefit to periods of service under the plan's benefit formula from the date when employee service first leads to benefits under the plan until the date when further employee service will lead to no material amount of further benefits under the plan. An entity is required to attribute benefit to periods in which the obligation to provide post-employment benefits arise. The obligation arises as employees render services in return for post-employment benefits an entity expects to pay in future reporting periods. The agenda decision specifies that employee service before the vesting date gives rise to a constructive obligation because, at the end of each successive reporting period, the amount of future service an employee will have to render before becoming entitled to the benefit is reduced.
The defined benefit liabilities at year end 2021 have been restated for Indonesia to reflect the impact of the May 2021 IFRIC agenda decision on the attribution of benefits to periods of service. This change affected both the defined-benefit obligation (\u20ac 1.6 million decrease) and benefit expense level.
(b). Reclassification of implementation and customization costs linked to cloud computing arrangements
In April 2021, the IFRS Interpretation Committee published an agenda decision on the clarification of accounting for the costs of configuring or customizing the supplier's application software in a SaaS arrangement that is determined to be a service contract.
The Group previously capitalized costs incurred in configuring or customizing a supplier's application software in a cloud-based computing arrangement as intangible assets as the Group considered that it would benefit form those costs over the life of the asset.
Due to the nature of this agenda decision and the level of spend incurred in relation to the Groups' Digital Transformation, the Group has reviewed its accounting policy to align with the IFRIC guidance issued in relation to Software-as-a-service (SaaS) costs previously capitalized. The Group will only recognize costs as intangible assets if the configuration or customization activities create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Costs that do not result in intangible asses are expensed as incurred. The revision to the accounting policy has been accounted for retrospectively resulting in a prior year restatement. The restatement affects the balance sheet in NV Bekaert, where \u20ac\u00a04.1\u00a0million is reclassified from intangible assets into IT costs in the income statement.
For the purpose of this annual report, the reclassifications and restatement effects are not presented on the face of the other financial statements. They are summarized below in a concise format and referenced to one of the above restatement elements (a or b) where appropriate.
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
Consolidated statement of comprehensive income | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Other comprehensive income (OCI) | |||
Other comprehensive income reclassifable to income statement | |||
Exchange differences arising during the year\u00a0 (a) | 91\u00a0161 | 56 | 91\u00a0217 |
OCI reclassifiable to income statement in subsequent periods, after tax | 88\u00a0173 | 56 | 88\u00a0229 |
Other comprehensive income for the period | 137\u00a0909 | 56 | 137\u00a0965 |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 588\u00a0529 | -2\u00a0859 | 585\u00a0670 |
Attributable to | |||
the Group | 545\u00a0660 | -2\u00a0859 | 542\u00a0801 |
non-controlling interests | 42\u00a0869 | \u2014 | 42\u00a0869 |
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Consolidated cash flow statement | 2021 as published | 2021 restatement | 2021 as restated |
Operating activities | |||
Operating result (EBIT) (a + b) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
Non-cash items included in operating result (a) | 190\u00a0222 | -1\u00a0617 | 188\u00a0605 |
Gross cash flows from operating activities | 536\u00a0997 | -4\u00a0113 | 532\u00a0884 |
Consolidated statement of changes in equity | 2021 as published | 2021 restatement | 2021 as restated |
Opening statement | |||
Total comprehensive income for the period | 588\u00a0529 | -2\u00a0859 | 585\u00a0670 |
Closing balance | 2\u00a0100\u00a0522 | -2\u00a0859 | 2\u00a0097\u00a0663 |
In the application of the Group\u2019s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. These judgments, estimates and assumptions are reviewed on an ongoing basis.
3.1. Significant judgements in applying the entity's accounting policies
The following are the significant judgements made by management, apart from those involving estimations (see note 3.2.\u00a0\u2018Key sources of estimation uncertainty\u2019 below), that have a significant effect on the amounts reported in the consolidated financial statements.
\u2022Management assessed that a constructive obligation exists in Belgium to provide pre-retirement schemes for employees as from the first day of service (see note 6.16. \u2018Employee benefit obligations\u2019) and therefore these pre-retirement schemes are treated as defined-benefit plans using the projected unit credit method. The obligation amounted to \u20ac\u00a06.3\u00a0million (2021: \u20ac 8.0 million).
\u2022Management concluded that the criteria for capitalization were not met and hence recognized development expenditure through profit or loss.
\u2022When management incurs implementation and customization costs when entering into cloud computing arrangements, management makes judgments to determine which costs can be recognized as intangible asset. Management first assess if the arrangement provides a resource it can control. When making this judgment, it considers the IFRS Interpretation Committee (IFRIC) agenda decision of March 2019 on Customer\u2019s Right to Receive Access to the Supplier\u2019s Software Hosted on the Cloud. Thereafter, it assess which fees and implementation costs can be capitalized, Management considered the IFRS Interpretation Committee (IFRIC) agenda decision of April 2021 on the clarification of accounting in relation to these costs.
\u2022Management makes judgments in defining the functional currency of Group entities based on economic substance of the transactions relevant to these entities. By default the functional currency is the one of the country in which the entity is operating. See note 7.7. \u2018Subsidiaries, joint ventures and associates\u2019 for a comprehensive list of entities and their functional currency.
\u2022Management assessed that it is controlling the Venezuelan subsidiaries. In spite of the political and monetary instability, management was able to keep the company operational and hence concluded that it is in control. The US dollar is the functional currency and as from May 2019, banks can act as intermediaries in foreign currency transactions through \u2018exchange tables\u2019, a measure that makes the exchange control that operated since 2003 and that gave the State a monopoly in currency management, more flexible. At year-end 2022, the cumulative translation adjustments (\u2018CTA\u2019) amount to \u20ac -59.6 million, which - in case of loss of control - would be recycled to income statement. Apart from the CTA, the contribution of the Venezuelan operations to the consolidated accounts is immaterial.
\u2022Deferred tax assets were recognized to the extent that it was probable that future taxable profits would be available, taking into account all evidence, both positive and negative. This assessment was done using prudent estimates based on the business plan for the entity concerned, typically using a five year time horizon. In some countries, deferred tax assets on capital losses, trade losses and tax credits were recognized to the extent of uncertain tax provisions recognized, in order to reflect that some tax audit adjustments would result in an adjustment of the amount of tax losses rather than in a tax cash-out for the entity concerned.
3.2. Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and the other key sources of estimation uncertainty at the end of the reporting period that have a risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year.
\u2022Management performed the annual impairment test on the goodwill related to BBRG on the basis of the latest business plan. Following the realized turnaround performance of the business in 2020, headroom has become very solid, reducing the likelihood of an impairment loss (see note 6.2. \u2018Goodwill\u2019).
\u2022Impairment analyses are based upon assumptions such as market evolution, margin evolution and discount rates. The ability of an entity to pass on changes in raw material prices to its customers (either through contractual arrangements or through commercial negotiations) is included in the margin evolution assumption. Sensitivity analyses for reasonable changes in these assumptions are presented as part of note 6.2. \u2018Goodwill\u2019.
\u2022Given its global presence, Bekaert is exposed to tax risks in many jurisdictions. On the one hand, the application of tax law in the different jurisdictions can be complex and requires judgement to assess risk and estimate outcomes, which is a major source of uncertainty. On the other hand, tax authorities of the jurisdictions conduct regular tax audits that may reveal potential tax issues. As the tax audits can take many years to resolve, this further adds to the uncertainty. While the outcome of such tax audits is not certain, Bekaert has considered the merits of its filing positions of the matters subject to each tax audit in an overall evaluation of potential tax liabilities, and concludes that the Group has adequate liabilities recorded in its consolidated financial statements for
\u2022exposures on these matters. Accordingly, Bekaert considers it unlikely that potential tax exposures over and above the amounts currently recorded as liabilities in the consolidated financial statements will be material to its financial condition. Both the timing and the position taken by the tax authorities in the different jurisdictions give rise to uncertainty and can result in an adjustment to the carrying amounts of income tax payable related to uncertain tax positions within the next financial year. At year- end 2022 Bekaert has uncertain tax positions recognized as income taxes payable amounting to \u20ac 43.8 million (2021: \u20ac 38.9 million). See note 6.21.\u00a0\u2018Tax\u00a0positions\u2019.
3.3. Impact of macro-economic environment, climate and Russia
Impact of the macroeconomic environment
The evolution in the macroeconomic environment has affected businesses all over the world. The Group has identified the risks linked to these evolutions and has implemented mitigating actions, as described in the Corporate Governance Statements - chapter \u2018General internal control and ERM\u2019 of this report.
Increasing risks arising from demand impact and inflationary cost pressure from economic crises as well as impacts on discount rates
Impactful demand changes can affect sectors that are relevant to Bekaert. A crisis or recession can lead to a demand decline driven by weak consumer confidence and postponed investments. The resulting upstream and downstream overcapacity can lead to price erosion across the supply chain. To mitigate these risks, Bekaert implements measures to be cost-competitive, to flex costs, and to pass on cost inflation.
The measures to flex costs and pass on cost inflation are reflected in the 2022 financials. In 2022 there were significant increases to the costs of the Group\u2019s raw materials, principally wire rod, and to its energy costs. (see note 5.3. Operating result (EBIT) by nature). All business units responded well to these challenges with pass through of increases in costs. The underlying EBIT bridge demonstrates that the positive price and mix impact was driven by further business-mix improvements and strong pricing discipline, which
more than offset the adverse effects of lower sales volumes and higher conversion cash costs from the under-absorption of fixed overheads. (see note 5.2. Operating result (EBIT) by function and press release related to the 2022 Full Year financial statements).
In the valuation of the Group\u2019s defined-benefit plans, the principal actuarial assumptions are also influenced by the macroeconomic evolution. The details of those valuations are included in note 6.16. \u2018Employee benefit obligations\u2019. Changes recognized in equity amounted to \u20ac -3.4 million and were driven by \u20ac 97.3 million loss on plan assets reflecting negative asset return, offset by \u20ac 100.7 million gains in defined benefit obligation. The latter can be broken down into \u20ac 119.0 million gains due to changes in financial assumptions reflecting increased discount rates and increased inflation assumption, \u20ac 1.9 million losses due to changes in demographic assumptions and \u20ac 16.4 million losses in liabilities due to experience adjustments.
Impact of climate changes and environmental footprint
In order to support the market and technology positioning in green energy markets, Bekaert has concluded partnerships in 2022 that are improving market access and our technology positions in high growth sectors (see note 6.6. Other non-current assets). These included:
\u2022a partnership with Pajarito Powder (US) to accelerate the development of spearheading innovations in the market of green hydrogen production
\u2022a partnership with TFI Marine (Ireland) to accelerate the go-to-market of digital-enabled mooring solutions for floating offshore wind farms
The Group has also signed Virtual Power Purchase Agreements (see note 7.2. Financial risk management and financial instruments) in the US and India and is installing a solar park in Burgos, Spain, to help reduce and offset its carbon greenhouse emissions.
The Group also invested in capital expenditure in 2022 supporting environmental sustainable activities (see note 6.3. Property, plant and equipment as well as the chapter \u2018EU Taxonomy Key Performance Indicators\u2019 in the Environmental Statements).
Impact of the conflict in Ukraine
Since the outbreak of conflict in Ukraine, we have significantly scaled back business activities in and with Russia. The presence of Bekaert in Russia includes a manufacturing plant (Lipetsk) and a sales office (Moscow), mainly operating for the Rubber Reinforcement segment. Most of the activities are \u2019local for local\u2019 (local sourcing and production and domestic sales). The financials of the Lipetsk plant in Russia are included in the consolidated financial statements of 2022. The ongoing conflict is a clear impairment indicator, and as such the Group has performed an impairment test at year-end under value in use. Based on the outcome of the impairment test, the Group has taken the decision to fully impair the fixed assets (see note 6.3. Property, Plant and Equipment). We are therefore taking in 2022 a non-cash exceptional charge of \u20ac 55 million in the result (see note 5.2. Operating result (EBIT) by function).
At 31 December 2022, there remained consolidated current assets of \u20ac 26 million and consolidated liabilities of \u20ac 3 million in relation to activities in the Lipetsk plant. Lipetsk also has an intercompany debt position towards partners within the Group of \u20ac 35 million as well as net intercompany liabilities of \u20ac 12 million.
Transforming steel wire and applying unique coating technologies form our core business. Depending on our customers\u2019 requirements, we draw wire in different diameters and strengths, even as thin as ultrafine fibers of one micron. We group the wires into cords, ropes and strands, weave or knit them into fabric, or process them into an end product. The coatings we apply reduce friction, improve corrosion resistance, or enhance adhesion with other materials. We also develop products and solutions that are made of other metals and materials. This is part of our strategy to drive creativity beyond steel.
Bekaert uses a business segmentation to evaluate the nature and financial performance of the business as a whole, in line with the way financial performance is reported to the chief operating decision maker (Bekaert Group Executive (BGE)). The Group\u2019s business units (BU) are characterized by BU-specific product and market profiles, industry trends, cost drivers, and technology needs tailored to specific industry requirements. More information on the segments can be found in the part \u2018About us\u2019 of this report.
The following four business units are presented:
1.Rubber Reinforcement (RR): 39% of consolidated third party sales (2021: 42%)
2.Steel Wire Solutions (SWS): 37% of consolidated third party sales (2021: 38%)
3.Specialty Businesses (SB): 14% of consolidated third party sales (2021: 10%)
4.Bridon-Bekaert Ropes Group (BBRG): 10% of consolidated third party sales (2021: 10%)
Capital employed elements (intangible assets, goodwill, property, plant and equipment, RoU property, plant and equipment and the elements of the operating working capital) are allocated to the various segments. All other assets and liabilities are reported as unallocated assets or liabilities. \u2018Group\u2019 mainly consists of the functional units innovation & technology, engineering and unallocated expenses for group management and services; it does not constitute a reportable segment in itself. Any sales between segments are transacted at prices which reflect the arm\u2019s length principle. Intersegment mainly includes eliminations of receivables and payables, of sales and of margin on transfers of inventory items and of PP&E and related adjustments to depreciation and amortization.
No other material reporting items then the ones mentioned below are provided to the chief operating decision maker.
2021 as reported | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 245\u00a0783 | 212\u00a0860 | 71\u00a0112 | 36\u00a0263 | -54\u00a0572 | 1\u00a0640 | 513\u00a0086 |
EBIT - Underlying | 247\u00a0371 | 209\u00a0330 | 71\u00a0872 | 45\u00a0050 | -60\u00a0692 | 1\u00a0686 | 514\u00a0617 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 342\u00a0342 | 249\u00a0813 | 79\u00a0668 | 64\u00a0340 | -50\u00a0394 | -8\u00a0426 | 677\u00a0342 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -35\u00a0946 | -146\u00a0702 | 3\u00a0531\u00a0190 |
Unallocated assets | 1\u00a0312\u00a0566 | ||||||
Total assets | 4\u00a0843\u00a0756 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0487\u00a0606 | ||||||
Total liabilities | 2\u00a0743\u00a0234 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -155\u00a0590 | -72\u00a0319 | 2\u00a0275\u00a0562 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -123\u00a0646 | -74\u00a0465 | 2\u00a0169\u00a0030 |
Return on weighted average capital employed (ROCE) | 21.4% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.7% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 10\u00a0809 | -360 | 12\u00a0852 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2021 redefined \u00b3 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales \u2074 | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 247\u00a0175 | 213\u00a0012 | 71\u00a0112 | 36\u00a0336 | -58\u00a0685 | 1\u00a0640 | 510\u00a0589 |
EBIT - Underlying | 248\u00a0764 | 209\u00a0481 | 71\u00a0872 | 45\u00a0122 | -64\u00a0805 | 1\u00a0686 | 512\u00a0121 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 343\u00a0734 | 249\u00a0965 | 79\u00a0668 | 64\u00a0413 | -54\u00a0508 | -8\u00a0426 | 674\u00a0845 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -40\u00a0059 | -146\u00a0702 | 3\u00a0527\u00a0077 |
Unallocated assets | 1\u00a0312\u00a0212 | ||||||
Total assets | 4\u00a0839\u00a0288 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0485\u00a0997 | ||||||
Total liabilities | 2\u00a0741\u00a0625 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -159\u00a0703 | -72\u00a0319 | 2\u00a0271\u00a0449 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -125\u00a0703 | -74\u00a0465 | 2\u00a0166\u00a0973 |
Return on weighted average capital employed (ROCE) | 21.5% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.6% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 6\u00a0695 | -360 | 8\u00a0739 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2022 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0197\u00a0607 | 2\u00a0081\u00a0592 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | \u2014 | 5\u00a0651\u00a0790 |
Consolidated sales | 2\u00a0228\u00a0682 | 2\u00a0137\u00a0571 | 788\u00a0242 | 588\u00a0819 | 118\u00a0857 | -210\u00a0380 | 5\u00a0651\u00a0790 |
Operating result (EBIT) | 110\u00a0776 | 146\u00a0563 | 130\u00a0986 | 38\u00a0744 | -67\u00a0234 | 5\u00a0918 | 365\u00a0754 |
EBIT - Underlying | 178\u00a0665 | 148\u00a0083 | 131\u00a0766 | 60\u00a0418 | -61\u00a0552 | 1\u00a0183 | 458\u00a0563 |
Depreciation and amortization \u00b2 | 91\u00a0038 | 48\u00a0666 | 22\u00a0171 | 42\u00a0745 | 7\u00a0881 | -9\u00a0706 | 202\u00a0795 |
Impairment losses | 59\u00a0050 | 830 | 120 | 2\u00a0669 | \u2014 | -4\u00a0735 | 57\u00a0934 |
EBITDA | 260\u00a0865 | 196\u00a0059 | 153\u00a0277 | 84\u00a0158 | -59\u00a0353 | -8\u00a0522 | 626\u00a0483 |
Segment assets | 1\u00a0495\u00a0373 | 1\u00a0114\u00a0525 | 470\u00a0005 | 628\u00a0577 | -54\u00a0894 | -141\u00a0886 | 3\u00a0511\u00a0700 |
Unallocated assets | 1\u00a0317\u00a0613 | ||||||
Total assets | 4\u00a0829\u00a0313 | ||||||
Segment liabilities | 376\u00a0208 | 387\u00a0217 | 142\u00a0568 | 137\u00a0694 | 109\u00a0613 | -74\u00a0980 | 1\u00a0078\u00a0320 |
Unallocated liabilities | 1\u00a0521\u00a0437 | ||||||
Total liabilities | 2\u00a0599\u00a0757 | ||||||
Capital employed | 1\u00a0119\u00a0165 | 727\u00a0308 | 327\u00a0437 | 490\u00a0883 | -164\u00a0508 | -66\u00a0906 | 2\u00a0433\u00a0380 |
Weighted average capital employed | 1\u00a0146\u00a0926 | 675\u00a0960 | 295\u00a0100 | 467\u00a0986 | -161\u00a0860 | -69\u00a0776 | 2\u00a0354\u00a0337 |
Return on weighted average capital employed (ROCE) | 9.7% | 21.7% | 44.4% | 8.3% | \u2014 | \u2014 | 15.5% |
Capital expenditure \u2013 PP&E | 74\u00a0823 | 45\u00a0714 | 23\u00a0648 | 33\u00a0740 | 3\u00a0171 | -10\u00a0493 | 170\u00a0603 |
Capital expenditure \u2013 intangible assets | 397 | 128 | 459 | 4 | 14\u00a0260 | -311 | 14\u00a0937 |
Share in the results of joint ventures and associates | -217 | 54\u00a0481 | \u2014 | \u2014 | -7 | \u2014 | 54\u00a0257 |
Investments in joint ventures and associates | 54\u00a0880 | 167\u00a0749 | \u2014 | \u2014 | -744 | \u2014 | 221\u00a0886 |
Number of employees (year-end) \u00b9 | 11\u00a0491 | 6\u00a0310 | 2\u00a0133 | 2\u00a0421 | 1\u00a0196 | \u2014 | 23\u00a0551 |
\u00b9 Number of employees: full-time equivalents.
\u00b2 Depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables.
\u00b3 See note 2.8. 'Restatement effects'.
The table below shows the relative importance of\u00a0Belgium (i.e. the country of domicile), Chile, China, the USA and Slovakia for Bekaert in terms of revenues and selected non-current assets (i.e. intangible assets; goodwill; property, plant and equipment; RoU property, plant and equipment; investments in joint ventures and associates).
in thousands of \u20ac | 2021 | % of total | 2022 | % of total |
Consolidated third party sales | ||||
from Belgium | 372\u00a0886 | 8% | 497\u00a0830 | 9% |
from Chile | 537\u00a0994 | 11% | 531\u00a0096 | 9% |
from China | 980\u00a0016 | 20% | 847\u00a0094 | 15% |
from USA | 685\u00a0071 | 14% | 1\u00a0032\u00a0090 | 18% |
from Slovakia | 419\u00a0273 | 9% | 540\u00a0821 | 10% |
from other countries | 1\u00a0844\u00a0419 | 38% | 2\u00a0202\u00a0859 | 39% |
Total third party consolidated sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Selected non-current assets | ||||
in Belgium \u00b9 | 118\u00a0355 | 7% | 126\u00a0717 | 7% |
in Chile | 79\u00a0059 | 4% | 87\u00a0449 | 5% |
in China | 315\u00a0190 | 18% | 300\u00a0300 | 17% |
in USA | 151\u00a0264 | 8% | 166\u00a0967 | 9% |
in Slovakia | 125\u00a0848 | 7% | 126\u00a0725 | 7% |
in other countries | 992\u00a0874 | 56% | 997\u00a0235 | 55% |
Total selected non-current assets \u00b9 | 1\u00a0782\u00a0591 | 100% | 1\u00a0805\u00a0393 | 100% |
The Group recognizes revenue from the following sources: delivery of products and, to a limited extent, of services and projects. Bekaert assessed that the delivery of products represents the main performance obligation. The Group recognizes revenue at a point in time when it transfers control over a product to a customer. Customers obtain control when the products are delivered (based on the related inco terms in place). The amount of revenue recognized is adjusted for variable compensation such as volume discounts. No adjustment is made for returns nor for warranty as the impact is deemed immaterial based on historical information.
Disaggregating revenue by timing of revenue recognition, i.e. at a point in time vs over time (as is customary for engineering activities) does not add much value, as sales of machines to third parties contribute very little to total sales.
in thousands of \u20ac | 2021 | % of total | 2022 | % of total |
Sales of products | 4\u00a0836\u00a0089 | 99.9% | 5\u00a0641\u00a0267 | 99.8% |
Sales of machines by engineering | 3\u00a0449 | 0.1% | 10\u00a0202 | 0.2% |
Other sales | 122 | 0.0% | 321 | 0.0% |
Net sales | 4\u00a0839\u00a0659 | 100.0% | 5\u00a0651\u00a0790 | 100.0% |
2021 | ||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Consolidated |
Industry | ||||||
Tire & Automotive | 1\u00a0932\u00a0457 | 168\u00a0775 | 34\u00a0114 | 8\u00a0538 | \u2014 | 2\u00a0143\u00a0884 |
Energy & Utilities | 236 | 233\u00a0581 | 23\u00a0343 | 82\u00a0404 | \u2014 | 339\u00a0563 |
Construction | 11 | 568\u00a0665 | 349\u00a0639 | 68\u00a0914 | \u2014 | 987\u00a0229 |
Consumer Goods | \u2014 | 135\u00a0793 | 4\u00a0335 | \u2014 | \u2014 | 140\u00a0128 |
Agriculture | \u2014 | 310\u00a0871 | \u2014 | 40\u00a0084 | \u2014 | 350\u00a0955 |
Equipment | 111\u00a0002 | 96\u00a0451 | 3\u00a0601 | 144\u00a0506 | 10\u00a0339 | 365\u00a0898 |
Basic Materials | 10\u00a0450 | 304\u00a0370 | 60\u00a0628 | 136\u00a0555 | \u2014 | 512\u00a0002 |
Total | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | 4\u00a0839\u00a0659 |
2022 | ||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Consolidated |
Industry | ||||||
Tire & Automotive | 2\u00a0195\u00a0338 | 135\u00a0542 | 39\u00a0170 | 9\u00a0817 | \u2014 | 2\u00a0379\u00a0867 |
Energy & Utilities | 785 | 342\u00a0535 | 30\u00a0868 | 111\u00a0371 | \u2014 | 485\u00a0559 |
Construction | \u2014 | 640\u00a0971 | 457\u00a0656 | 76\u00a0398 | \u2014 | 1\u00a0175\u00a0025 |
Consumer Goods | \u2014 | 124\u00a0880 | 4\u00a0130 | \u2014 | \u2014 | 129\u00a0010 |
Agriculture | \u2014 | 367\u00a0459 | \u2014 | 42\u00a0172 | \u2014 | 409\u00a0631 |
Equipment | \u2014 | 128\u00a0670 | 136\u00a0401 | 163\u00a0231 | 21\u00a0417 | 449\u00a0719 |
Basic Materials | 1\u00a0482 | 341\u00a0537 | 98\u00a0247 | 181\u00a0713 | \u2014 | 622\u00a0979 |
Total | 2\u00a0197\u00a0605 | 2\u00a0081\u00a0594 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | 5\u00a0651\u00a0790 |
Sales and gross profit | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Sales | 4\u00a0839\u00a0659 | 5\u00a0651\u00a0790 | 16.8% |
Cost of sales | -3\u00a0953\u00a0752 | -4\u00a0879\u00a0310 | 23.4% |
Gross profit | 885\u00a0907 | 772\u00a0479 | -12.8% |
Gross profit in % of sales | 18.3% | 13.7% |
Bekaert achieved consolidated sales of \u20ac 5.7 billion in 2022, an increase of 16.8% compared to 2021, a result of responding quickly to the economic challenges and high cost inflation with product price rises. The organic sales increase (11.8%) was driven by increased wire rod prices (10.5%) and other price-mix effects for the full year (10.1%), partially offset by a decrease in volumes (-8.8%). The currency movements were 5% positive (mainly related to movements in US dollar\u00a0and\u00a0Chinese\u00a0renminbi).
Gross profit of the Group decreased by \u20ac 113.4 million in absolute terms (-12.8%), resulting in a margin of 13.7% (2021: 18.3%). This was due to the decline in volumes in combination with high inflation and higher costs for utilities and materials. The decrease has partially been compensated by increasing product prices to the customers.
Overheads | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Selling expenses | -186\u00a0239 | -205\u00a0938 | 10.6% |
Administrative expenses\u00b9 | -165\u00a0204 | -160\u00a0472 | -2.9% |
Research and development expenses | -59\u00a0537 | -62\u00a0315 | 4.7% |
Total | -410\u00a0980 | -428\u00a0725 | 4.3% |
\u00b9 See note 2.8 'Restatement effects'
The overhead expenses increased by \u20ac 17.7 million to \u20ac\u00a0428.7 million (7.6%\u00a0on sales). The increase in absolute value was mainly due to negative FX impact of \u20ac\u00a0-10.5\u00a0million (mainly related to negative exchange results in US dollar and Chinese renminbi), and higher expenses on IT projects, as a result of the digital transformation. The one-off impact from restructuring programs on overheads increased by \u20ac\u00a05.3\u00a0million and mainly related to lay-off costs.
In 2022, selling expenses included bad debt allowances recognized for \u20ac\u00a0-6.0\u00a0million (2021: \u20ac -3.0 million) and reversal of bad debt allowances for amounts used and not used for \u20ac\u00a08.0\u00a0million\u00a0(2021:\u00a0\u20ac 4.4\u00a0million).
Other operating revenues | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties received | 15\u00a0209 | 18\u00a0673 | 3\u00a0464 |
Gains on disposal of PP&E and intangible assets | 8\u00a0458 | 12\u00a0340 | 3\u00a0883 |
Realized exchange results on sales and purchases | 1\u00a0237 | \u2014 | -1\u00a0237 |
Tax rebates | 429 | 26 | -403 |
Government grants | 1\u00a0039 | 2\u00a0631 | 1\u00a0592 |
Compensations received for claims | 2\u00a0855 | 2\u00a0345 | -510 |
Restructuring\u00b9 | 23\u00a0304 | 1\u00a0515 | -21\u00a0789 |
Environmental | 148 | 100 | -48 |
Other revenues\u00b2 | 11\u00a0876 | 10\u00a0217 | -1\u00a0659 |
Total | 64\u00a0556 | 47\u00a0848 | -16\u00a0709 |
\u00b9 Mainly relates to disposal of PP&E
2 See note 2.8. 'Restatement effects'
Other operating expenses | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties paid | -1\u00a0012 | -951 | 62 |
Losses on disposal of PP&E and intangible assets | -1\u00a0375 | -760 | 615 |
Amortization of intangible assets | -1\u00a0512 | -1\u00a0500 | 12 |
Bank charges | -2\u00a0776 | -3\u00a0660 | -884 |
Tax related expenses (other than income taxes) | -2\u00a0639 | -3\u00a0841 | -1\u00a0202 |
Impairment losses | -278 | -857 | -579 |
Restructuring | -12\u00a0379 | -5\u00a0932 | 6\u00a0447 |
Environmental | -37 | -1\u00a0225 | -1\u00a0187 |
Losses on business disposals | -170 | -210 | -40 |
Other expenses | -6\u00a0716 | -6\u00a0912 | -196 |
Total | -28\u00a0894 | -25\u00a0848 | 3\u00a0046 |
The royalty income increased with 23% due to higher sales. Government grants mainly related to subsidies in China. There are no indications that the conditions attached to those grants will not be complied with in the future and therefore it is not expected that subsidies may have to be refunded.
The gain on the disposal of PP&E and intangible assets contained in 2022 the revenues from the sale of assets not included in restructuring programs, primarily in the UK.
Due to a change in presentation the group no longer shows realized exchange results on sales and purchases as a separate line in the other operating revenues. The impact is now shown in cost of sales.
In 2022 \u2018Restructuring - revenues\u2019 mainly consists of the gain from the sales of land and buildings following plant closures due to restructuring. 'Restructuring - expenses\u2019 on the other hand includes part of the cost (lay-off costs) related to restructuring programs and plant closures.
In 2021 \u2018Restructuring - revenues\u2019 mainly consists of the gain from the sales of land and buildings following plant closures due to restructuring. Additional impact coming from the reversals of write-downs on inventories and impairment losses on intangibles and PP&E. \u2018Restructuring - expenses\u2019 on the other hand includes part of the cost (lay-off costs and impairment) related to restructuring programs and plant closures.
The impairment losses in 2022 are mainly for assets the United States as a result of the closure of plants.
The environmental costs in 2022 are mainly to the building remediation project in Rome (US) and environmental provisions related to the closure of the Figline plant (Italy).
The other section of other operating revenues included in 2022 and in 2021 CTA impact on business disposals.
The following tables reconcile reported and underlying results and present an analysis of one-off items by category (as defined in note 2.6. \u2018Alternative performance measures\u2019), operating segment and income statement line item.
EBIT Reported and Underlying | 2021 | 2022 | ||||
in thousands of \u20ac | reported | of which underlying | of which one-offs | reported | of which underlying | of which one-offs |
Sales | 4\u00a0839\u00a0659 | 4\u00a0839\u00a0659 | \u2014 | 5\u00a0651\u00a0790 | 5\u00a0651\u00a0790 | \u2014 |
Cost of sales | -3\u00a0953\u00a0752 | -3\u00a0936\u00a0874 | -16\u00a0878 | -4\u00a0879\u00a0310 | -4\u00a0795\u00a0329 | -83\u00a0981 |
Gross profit | 885\u00a0907 | 902\u00a0785 | -16\u00a0878 | 772\u00a0479 | 856\u00a0460 | -83\u00a0981 |
Selling expenses | -186\u00a0239 | -186\u00a0017 | -222 | -205\u00a0938 | -204\u00a0858 | -1\u00a0080 |
Administrative expenses\u00b9 | -165\u00a0204 | -166\u00a0574 | 1\u00a0370 | -160\u00a0472 | -157\u00a0414 | -3\u00a0059 |
Research and development expenses | -59\u00a0537 | -59\u00a0440 | -97 | -62\u00a0315 | -62\u00a0139 | -176 |
Other operating revenues\u00b9 | 64\u00a0556 | 37\u00a0745 | 26\u00a0812 | 47\u00a0848 | 45\u00a0204 | 2\u00a0643 |
Other operating expenses | -28\u00a0894 | -16\u00a0377 | -12\u00a0517 | -25\u00a0848 | -18\u00a0691 | -7\u00a0157 |
Operating result (EBIT) | 510\u00a0589 | 512\u00a0121 | -1\u00a0531 | 365\u00a0754 | 458\u00a0563 | -92\u00a0810 |
\u00b9 See note 2.8 'Restatement effects'
One-off items 2021 | |||||||
in thousands of \u20ac | Cost of Sales | Selling expenses | Administrative | R&D | Other operating revenues | Other operating expenses | Total |
Restructuring programs by segment | |||||||
Rubber Reinforcement 1 | -1\u00a0749 | 356 | -25 | -171 | \u2014 | \u2014 | -1\u00a0588 |
Steel Wire Solutions 2 | -2\u00a0105 | -185 | -138 | -771 | 11\u00a0035 | -4\u00a0246 | 3\u00a0589 |
Specialty Businesses 3 | 476 | -733 | -49 | 5 | 276 | -331 | -356 |
Bridon-Bekaert Ropes Group (BBRG) 4 | -10\u00a0344 | 34 | 36 | \u2014 | 11\u00a0493 | -7\u00a0617 | -6\u00a0399 |
Group 5 | -391 | 476 | 1\u00a0639 | 868 | 547 | -184 | 2\u00a0955 |
Intersegment | \u2014 | \u2014 | \u2014 | \u2014 | -46 | \u2014 | -46 |
Total restructuring programs | -14\u00a0114 | -52 | 1\u00a0464 | -69 | 23\u00a0304 | -12\u00a0379 | -1\u00a0845 |
Business disposals | |||||||
Group 6 | \u2014 | -170 | \u2014 | \u2014 | \u2014 | \u2014 | -170 |
Total business disposals | \u2014 | -170 | \u2014 | \u2014 | \u2014 | \u2014 | -170 |
Environmental provisions/(reversals of provisions) | |||||||
Bridon-Bekaert Ropes Group (BBRG) 4 | -2\u00a0360 | \u2014 | \u2014 | -28 | \u2014 | \u2014 | -2\u00a0388 |
Group | \u2014 | \u2014 | \u2014 | \u2014 | 148 | -37 | 111 |
Total environmental provisions/(reversals) | -2\u00a0360 | \u2014 | \u2014 | -28 | 148 | -37 | -2\u00a0277 |
Other events and transactions | |||||||
Steel Wire Solutions | \u2014 | \u2014 | -59 | \u2014 | \u2014 | \u2014 | -59 |
Specialty Businesses | -405 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -405 |
Group 7 | \u2014 | \u2014 | -35 | \u2014 | 3\u00a0359 | -100 | 3\u00a0224 |
Total other events and transactions | -405 | \u2014 | -93 | \u2014 | 3\u00a0359 | -100 | 2\u00a0761 |
Total | -16\u00a0878 | -222 | 1\u00a0370 | -97 | 26\u00a0812 | -12\u00a0517 | -1\u00a0531 |
\u00b9 Related mainly to the closure of the Figline plant (Italy) and retirement plans in Spain and Italy.
\u00b2 Related mainly to the restructuring revenues and expenses in North America and revenues in Malaysia.
\u00b3 Related mainly to the restructuring in Combustion Technologies and Sawing Wire.
\u2074 Related mainly to the restructuring in Canada.
5\u00a0Related mainly to the restructuring in Belgium.
6 Contractual liability indemnification related to previous divestments.
7 Related mainly to the liquidation of a company in China and Costa Rica.
One-off items 2022 | |||||||
in thousands of \u20ac | Cost of Sales | Selling expenses | Administrative | R&D | Other operating revenues | Other operating expenses | Total |
Restructuring programs by segment | |||||||
Rubber Reinforcement 1 | -4\u00a0489 | -208 | -644 | \u2014 | \u2014 | -2\u00a0413 | -7\u00a0753 |
Steel Wire Solutions 2 | -1\u00a0506 | 57 | -246 | \u2014 | 199 | -23 | -1\u00a0519 |
Specialty Businesses 3 | -267 | \u2014 | -165 | -85 | \u2014 | -195 | -712 |
Bridon-Bekaert Ropes Group (BBRG) 4 | -22\u00a0421 | -262 | -80 | -15 | 758 | -127 | -22\u00a0148 |
Group 5 | -673 | -458 | -1\u00a0415 | -77 | 558 | -3\u00a0174 | -5\u00a0239 |
Total restructuring programs | -29\u00a0356 | -870 | -2\u00a0551 | -176 | 1\u00a0515 | -5\u00a0932 | -37\u00a0371 |
Impairment losses/(reversals of impairment losses) other than restructuring | |||||||
Rubber Reinforcement 6 | -59\u00a0035 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -59\u00a0035 |
Specialty Businesses 6 | -324 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -324 |
Intersegment 6 | 4\u00a0735 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 4\u00a0735 |
Total other impairment losses/(reversals) | -54\u00a0624 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -54\u00a0624 |
Business disposals | |||||||
Group 7 | \u2014 | -210 | \u2014 | \u2014 | \u2014 | \u2014 | -210 |
Total business disposals | \u2014 | -210 | \u2014 | \u2014 | \u2014 | \u2014 | -210 |
Environmental provisions/(reversals of provisions) | |||||||
Rubber Reinforcement 1 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -1\u00a0100 | -1\u00a0100 |
Group | \u2014 | \u2014 | \u2014 | \u2014 | 100 | -125 | -25 |
Total environmental provisions/(reversals) | \u2014 | \u2014 | \u2014 | \u2014 | 100 | -1\u00a0225 | -1\u00a0125 |
Other events and transactions | |||||||
Specialty Businesses | \u2014 | \u2014 | \u2014 | \u2014 | 256 | \u2014 | 256 |
Bridon-Bekaert Ropes Group (BBRG) 8 | \u2014 | \u2014 | \u2014 | \u2014 | 474 | \u2014 | 474 |
Group | \u2014 | \u2014 | -507 | \u2014 | 298 | \u2014 | -209 |
Total other events and transactions | \u2014 | \u2014 | -508 | \u2014 | 1\u00a0028 | \u2014 | 521 |
Total | -83\u00a0981 | -1\u00a0080 | -3\u00a0059 | -176 | 2\u00a0643 | -7\u00a0157 | -92\u00a0810 |
\u00b9 Related mainly to the closure of the Figline plant (Italy) and the building remediation project in Rome, US; environmental provisions related to the closure of the Figline plant (Italy).
\u00b2 Related mainly to lay-off costs in Latin America.
\u00b3 Related mainly to lay-off costs in Bekaert Combustion Technology BV (Netherlands).
\u2074 Related mainly to the restructuring in Germany.
5 Related mainly to the restructuring in Belgium.
6 Related to the plant in Russia.
7 Contractual liability indemnification related to previous divestments.
The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature.
in thousands of \u20ac | 2021 | % on sales | 2022 | % on sales |
Sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Other operating revenues\u00b9 | 64\u00a0556 | \u2014 | 47\u00a0848 | \u2014 |
Total operating revenues | 4\u00a0904\u00a0215 | \u2014 | 5\u00a0699\u00a0637 | \u2014 |
Own construction of PP&E | 31\u00a0872 | 0.7% | 47\u00a0175 | 0.8% |
Raw materials | -1\u00a0995\u00a0508 | -41.2% | -2\u00a0362\u00a0439 | -41.8% |
Semi-finished products and goods for resale | -523\u00a0793 | -10.8% | -529\u00a0817 | -9.4% |
Change in work-in-progress and finished goods | 277\u00a0348 | 5.7% | 20\u00a0192 | 0.4% |
Staff costs | -840\u00a0348 | -17.4% | -869\u00a0955 | -15.4% |
Depreciation and amortization | -166\u00a0905 | -3.4% | -202\u00a0795 | -3.6% |
Impairment losses | 1\u00a0518 | 0.0% | -57\u00a0934 | -1.0% |
Transport and handling of finished goods | -249\u00a0476 | -5.2% | -303\u00a0486 | -5.4% |
Consumables and spare parts | -273\u00a0318 | -5.6% | -314\u00a0986 | -5.6% |
Utilities | -264\u00a0128 | -5.5% | -348\u00a0113 | -6.2% |
Maintenance and repairs | -66\u00a0054 | -1.4% | -77\u00a0908 | -1.4% |
Lease and related expenses | -9\u00a0451 | -0.2% | -38\u00a0129 | -0.7% |
Commissions in selling expenses | -8\u00a0008 | -0.2% | -8\u00a0739 | -0.2% |
Export VAT and export customs duty | -12\u00a0760 | -0.3% | -16\u00a0350 | -0.3% |
ICT costs\u00b9 | -44\u00a0148 | -0.9% | -59\u00a0960 | -1.1% |
Advertising and sales promotion | -6\u00a0444 | -0.1% | -7\u00a0655 | -0.1% |
Travel, restaurant & hotel | -8\u00a0605 | -0.2% | -15\u00a0810 | -0.3% |
Consulting and other fees | -40\u00a0314 | -0.8% | -42\u00a0284 | -0.7% |
Office supplies and equipment | -8\u00a0472 | -0.2% | -10\u00a0331 | -0.2% |
Venture capital funds R&D | -1\u00a0447 | 0.0% | -1\u00a0297 | 0.0% |
Temporary or external labor | -36\u00a0238 | -0.7% | -40\u00a0910 | -0.7% |
Insurance expenses | -15\u00a0427 | -0.3% | -17\u00a0689 | -0.3% |
Miscellaneous | -133\u00a0520 | -2.8% | -74\u00a0664 | -1.3% |
Total operating expenses\u00b9 | -4\u00a0393\u00a0626 | -90.8% | -5\u00a0333\u00a0884 | -94.4% |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 10.6% | 365\u00a0754 | 6.5% |
\u00b9 See note 2.8 'Restatement effects'
in thousands of \u20ac | 2021 | 2022 |
Interest income on financial assets not measured at FVTPL | 3\u00a0260 | 5\u00a0166 |
Interest income | 3\u00a0260 | 5\u00a0166 |
Interest expense on interest-bearing debt not measured at FVTPL | -39\u00a0159 | -38\u00a0624 |
Other debt-related interest expense | -3\u00a0496 | -3\u00a0391 |
Debt-related interest expense | -42\u00a0655 | -42\u00a0014 |
Interest element of discounted provisions | -1\u00a0825 | -1\u00a0423 |
Interest expense | -44\u00a0480 | -43\u00a0437 |
Total | -41\u00a0220 | -38\u00a0271 |
The interest expenses remain at the same level compared to the interest expenses of 2021. As of 2022, there are no interest expenses related the convertible bonds due to repayment of the convertible bond in 2021. The impact of the increase of interest rates is for this reason compensated.\u00a0 \u00a0
Interest expense on interest-bearing debt, not classified as at fair value through profit or loss (FVTPL), relates to all debt instruments of the Group, other than interest-rate risk mitigating derivatives entered into as economic hedges.
in thousands of \u20ac | 2021 | 2022 |
Value adjustments to derivatives | 4\u00a0987 | 6\u00a0543 |
Exchange results on hedged items | 1\u00a0570 | -14\u00a0008 |
Net impact of derivatives and hedged items | 6\u00a0557 | -7\u00a0464 |
Other exchange results | -4\u00a0315 | -735 |
Gains and losses on disposal of financial assets | 19 | 19 |
Dividends from non-consolidated equity investments | 5\u00a0088 | 2\u00a0666 |
Bank charges and taxes on financial transactions | -4\u00a0074 | -8\u00a0566 |
Impairments of other receivables | -39 | 1\u00a0261 |
Other | 1\u00a0194 | 1\u00a0494 |
Total | 4\u00a0430 | -11\u00a0325 |
Value adjustments include changes in the fair value of all derivatives, other than those designated as cash flow hedges. Exchange results on hedged items also relate to economic hedges only. The net impact of derivatives and hedged items presented here does not include any impacts recognized in other income statement elements, such as interest expense, cost of sales or other operating revenues and expenses. In 2022 value adjustments to derivatives included a fair value gain of \u20ac 13.1 million gain (\u20ac -4.4 million in 2021), however offset with a loss of \u20ac\u00a0-6.6\u00a0million (2021: gain of \u20ac 9.4 million), related to a Virtual Power Purchase Agreement (VPPA). For more details on the impact of derivatives and hedged items, see note 7.2.\u00a0Financial risk management and financial derivatives\u2019.
Other exchange results in 2022 amounted to \u20ac -0.7 million and were mainly related to the devaluation of the Turkish lira, largely offset with the positive exchange results on the Ruble, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on financial transactions included charges linked to the factoring programs (\u20ac 7.0 million) and higher taxes paid on financial transactions (\u20ac\u00a01.0\u00a0million).
In 2022, other elements related mainly to a gain of \u20ac\u00a02.7\u00a0million (\u20ac\u00a01.2\u00a0million in 2021) from the net settlements out of the VPPA. The gain is partially offset by other financial costs.
in thousands of \u20ac | 2021 | 2022 |
Current income taxes - current year | -115\u00a0674 | -85\u00a0078 |
Current income taxes - prior periods | -332 | 5\u00a0485 |
Deferred taxes - due to changes in temporary differences \u00b9 | -39\u00a0571 | -50\u00a0422 |
Deferred taxes - due to changes in tax rates | -3\u00a0710 | -1\u00a0039 |
Deferred taxes - adjustments to tax losses of prior periods | -2\u00a0150 | 200 |
Deferred taxes - utilization of deferred tax assets not previously recognized \u00b9 | 27\u00a0723 | 49\u00a0756 |
Total tax expense | -133\u00a0714 | -81\u00a0097 |
\u00b9 See note 2.8 'Restatement effects'
Relationship between tax expense and accounting profit
In the table below, accounting profit is defined as the result before taxes.
in thousands of \u20ac | 2021 | 2022 |
Result before taxes 6 | 473\u00a0799 | 316\u00a0157 |
Tax expense at the theoretical domestic rates applicable to results of taxable entities in the countries concerned 6 | -117\u00a0150 | -82\u00a0735 |
Theoretical tax rate 1 | -24.7% | -26.2% |
Tax effect of: | ||
Non-deductible items | -12\u00a0893 | -5\u00a0773 |
Other tax rates, tax credits and special tax regimes 2 | 13\u00a0979 | 11\u00a0109 |
Non-recognition of deferred tax assets 3 | -16\u00a0803 | -39\u00a0242 |
Utilization or recognition of deferred tax assets not previously recognized 4 6 | 27\u00a0723 | 49\u00a0756 |
Deferred tax due to change in tax rates | -3\u00a0710 | -1\u00a0039 |
Tax relating to prior periods 5 | -2\u00a0482 | 5\u00a0685 |
Exempted income | 3\u00a0224 | 291 |
Withholding taxes on dividends, royalties, interests & services 6 | -21\u00a0371 | -16\u00a0709 |
Other | -4\u00a0231 | -2\u00a0440 |
Total tax expense | -133\u00a0714 | -81\u00a0097 |
Effective tax rate | -28.2% | -25.7% |
\u00b9 The theoretical tax rate is computed as a weighted average taking into account the results before taxes in different countries at different rates.
\u00b2 In 2022, the special tax regimes and tax credits mainly related to tax incentives in Belgium, similar as in 2021.
\u00b3 In 2022, the non-recognition of deferred tax assets mainly related to the impairment of Russian fixed assets, the German restructuring and losses carried forward in China and the USA, while in 2021, it mainly related to losses carried forward in Belgium, Canada, China, Spain and the USA.
\u2074 In 2022, the movement was mainly triggered by the recognition in Belgium of deferred tax assets previously not recognized as well as by the usage of losses carried forward.
5 In 2022, the prior year tax adjustments mainly related to the release of the uncertain tax provision in Indonesia further to the conclusion of an APA between the competent Authorities of Belgium and Indonesia (cf section 7.5. fourth bullet point of the 2021 Annual Report), while in 2021\u00a0 the prior year tax adjustments mainly related to tax filings.
In 2022, the share in the result of joint ventures and associates reflected the drop in performance of both Steel Wire Solutions and Rubber Reinforcement businesses in Brazil compared to the very strong performance of both in 2021. Moreover, Belgo Bekaert Arames Ltda was able in 2021 to recover BRL 670 million of indirect tax credits (PIS/COFINS) from the past, resulting in a one-time net impact of BRL 485\u00a0million (\u20ac\u00a034.2 million equivalent for the Bekaert share). The decrease in performance was slightly compensated by the increase in value of the Brazilian real against the euro (average rate increased by 14.7% from 2021 to 2022). This increase in YTD average rate 2022 versus 2021 was mainly caused by a significant increase in the course of 2022, while in 2021, the rate remained more or less stable.
Additional information relating to the Brazilian joint ventures is provided under note 6.5. \u2018Investments in joint ventures and associates\u2019.
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | -390 | -1\u00a0135 |
Agro - Bekaert Springs, SL | Spain | -6 | -7 |
Belgo Bekaert Arames Ltda | Brazil | 99\u00a0349 | 55\u00a0568 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 8\u00a0701 | -217 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | -34 | 48 |
Total | 107\u00a0619 | 54\u00a0257 |
2021 | Number | |
Weighted average number of ordinary shares (basic) | 57\u00a0000\u00a0709 | |
Dilution effect of share-based payment arrangements | 620\u00a0115 | |
Weighted average number of ordinary shares (diluted) | 57\u00a0620\u00a0824 |
in thousands of \u20ac | Basic | Diluted |
Result for the period attributable to ordinary shareholders \u00b9 | 404\u00a0062 | 404\u00a0062 |
Earnings | 404\u00a0062 | 404\u00a0062 |
Earnings per share (in \u20ac) | 7.089 | 7.012 |
\u00b9 See note 2.8 'Restatement effects'
2022 | Number | |
Weighted average number of ordinary shares (basic) | 56\u00a0194\u00a0711 | |
Dilution effect of share-based payment arrangements | 468\u00a0231 | |
Weighted average number of ordinary shares (diluted) | 56\u00a0662\u00a0942 |
\u00a0
in thousands of \u20ac | Basic | Diluted |
Result for the period attributable to ordinary shareholders | 268\u00a0859 | 268\u00a0859 |
Earnings | 268\u00a0859 | 268\u00a0859 |
Earnings per share (in \u20ac) | 4.784 | 4.745 |
Earnings per share (\u2018EPS\u2019) is the amount of post-tax profit attributable to each share. Basic EPS is calculated as the result for the period attributable to equity holders of Bekaert divided by the weighted average number of shares outstanding during the year. Diluted EPS reflects any commitments of the Group to issue shares in the future. These comprise shares to be issued for equity-settled share-based payment plans (subscription rights, options, performance shares and matching shares, see note 6.13. \u2018Ordinary shares, treasury shares and equity-settled share-based payments\u2019).
Subscription rights, options and other share-based payment arrangements are only dilutive to the extent that their issue price is lower than the average closing price of the period, in which the issue price includes the fair value of any services to be rendered during the remainder of the vesting period. Contingently issuable shares (e.g. performance shares) are only dilutive if the conditions are satisfied at the balance sheet date. The dilution effect of share-based payment arrangements is limited to the weighted average number of shares to be used in the denominator of the EPS ratio; there is no effect on the earnings to be used in the numerator of the EPS ratio.
To calculate the dilution impact, it is assumed that all dilutive potential shares are issued at the beginning of the period, or, if the instruments were granted during the period, at the grant date. This resulted in a total dilution effect of \u20ac -0.04 per share (2021: \u20ac -0.08).
The average closing price during 2022 was \u20ac 34.02 per share (2021:\u00a0\u20ac\u00a036.33\u00a0per share). The following table presents all anti-dilutive instruments for the period presented. Options and subscription rights were out of the money because their issue price exceeded the average closing price, while performance shares were anti-dilutive because the performance condition was not fulfilled.
Anti-dilutive instruments | Date granted | Issue price (in \u20ac) | Number granted | Number outstanding |
SOP 2015-2017 - options | 13.02.2017 | 39.43 | 273\u00a0325 | 226\u00a0056 |
SOP 2015-2017 - options | 19.01.2018 | 34.6 | 225\u00a0475 | 144\u00a0600 |
Cost | Licenses, patents & similar rights | Computer software\u00b2 | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 26\u00a0340 | 91\u00a0472 | 54\u00a0290 | 15\u00a0566 | 187\u00a0667 |
Expenditure | 17 | 7\u00a0093 | 1\u00a0627 | 2 | 8\u00a0739 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Transfers \u00b9 | 844 | 93 | \u2014 | \u2014 | 937 |
Exchange gains and losses (-) | 205 | 1\u00a0760 | 3\u00a0968 | 834 | 6\u00a0768 |
As at 31 December 2021 | 27\u00a0306 | 93\u00a0275 | 58\u00a0717 | 14\u00a0752 | 194\u00a0049 |
As at 1 January 2022 | 27\u00a0306 | 93\u00a0275 | 58\u00a0717 | 14\u00a0752 | 194\u00a0049 |
Expenditure | 2 | 14\u00a0933 | \u2014 | 3 | 14\u00a0937 |
Disposals and retirements | \u2014 | -34 | \u2014 | \u2014 | -34 |
Transfers \u00b9 | \u2014 | -691 | \u2014 | 734 | 43 |
New consolidations | 36 | \u2014 | \u2014 | 1\u00a0760 | 1\u00a0796 |
Exchange gains and losses (-) | -180 | 799 | -2\u00a0118 | -869 | -2\u00a0368 |
As at 31 December 2022 | 27\u00a0163 | 108\u00a0282 | 56\u00a0599 | 16\u00a0380 | 208\u00a0423 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
2 See note 2.8 'Restatement effects'.
Accumulated amortization and impairment | Licenses, patents & similar rights | Computer software | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 17\u00a0510 | 79\u00a0111 | 21\u00a0194 | 15\u00a0188 | 133\u00a0003 |
Charge for the year | 1\u00a0920 | 3\u00a0573 | 3\u00a0872 | 30 | 9\u00a0395 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Exchange gains (-) and losses | 11 | 1\u00a0575 | 1\u00a0616 | 1\u00a0184 | 4\u00a0386 |
As at 31 December 2021 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
As at 1 January 2022 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
Charge for the year | 1\u00a0989 | 3\u00a0722 | 4\u00a0162 | 409 | 10\u00a0282 |
Impairment losses | \u2014 | 214 | \u2014 | \u2014 | 214 |
Disposals and retirements | \u2014 | -50 | \u2014 | \u2014 | -50 |
Transfers \u00b9 | \u2014 | -32 | \u2014 | \u2014 | -32 |
Exchange gains (-) and losses | -26 | 711 | -796 | -752 | -863 |
As at 31 December 2022 | 21\u00a0303 | 81\u00a0681 | 28\u00a0880 | 14\u00a0409 | 146\u00a0274 |
Carry amount as at 31 December 2021 | 7\u00a0965 | 16\u00a0160 | 33\u00a0202 | \u2014 | 57\u00a0327 |
Carry amount as at 31 December 2022 | 5\u00a0860 | 26\u00a0601 | 27\u00a0718 | 1\u00a0971 | 62\u00a0149 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
This note mainly relates to goodwill on acquisition of subsidiaries. Goodwill in respect of joint ventures and associates is disclosed in note 6.5.\u00a0\u2018Investments in joint ventures and associates\u2019.
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 154\u00a0280 | 155\u00a0970 |
New consolidations | \u2014 | 1\u00a0376 |
Exchange gains and losses (-) | 1\u00a0689 | 556 |
As at 31 December | 155\u00a0970 | 157\u00a0901 |
Impairment losses | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 4\u00a0883 | 5\u00a0295 |
Exchange gains (-) and losses | 413 | 39 |
As at 31 December | 5\u00a0295 | 5\u00a0334 |
Carrying amount as at 31 December | 150\u00a0674 | 152\u00a0567 |
Goodwill acquired in a business combination is allocated on acquisition to the cash-generating units (CGU) that are expected to benefit from that business combination. The carrying amount of goodwill allocated and any related movements of the period are as follows:
2021 | |||||
in thousands of \u20ac | Group of cash-generating units | Carrying amount | Increases | Exchange differences | Carrying amount |
Subsidiaries | |||||
SWS | Bekaert Bradford UK Ltd | 2\u00a0490 | \u2014 | 174 | 2\u00a0664 |
SB | Combustion - heating EMEA | 3\u00a0027 | \u2014 | \u2014 | 3\u00a0027 |
SB | Building Products | 71 | \u2014 | \u2014 | 71 |
RR | Rubber Reinforcement | 4\u00a0255 | \u2014 | \u2014 | 4\u00a0255 |
SWS | Orrville plant (USA) | 9\u00a0560 | \u2014 | 798 | 10\u00a0357 |
SWS | Inchalam group | 727 | \u2014 | -70 | 657 |
SWS | Bekaert Ideal SL companies | 844 | 547 | 46 | 1\u00a0437 |
SWS | Bekaert (Qingdao) Wire Products Co Ltd | 385 | \u2014 | \u2014 | 385 |
SWS | Bekaert Jiangyin Wire Products Co Ltd | 47 | \u2014 | \u2014 | 47 |
SWS | Grating Peru SAC | 547 | -547 | \u2014 | \u2014 |
BBRG | BBRG | 127\u00a0445 | \u2014 | 329 | 127\u00a0774 |
Subtotal | 149\u00a0398 | \u2014 | 1\u00a0276 | 150\u00a0674 | |
Joint ventures and associates | |||||
SWS | Belgo Bekaert Arames Ltda | 2\u00a0358 | \u2014 | 24 | 2\u00a0382 |
RR | BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 1\u00a0442 | \u2014 | 14 | 1\u00a0456 |
Subtotal | 3\u00a0800 | \u2014 | 38 | 3\u00a0838 | |
Total | 153\u00a0198 | \u2014 | 1\u00a0314 | 154\u00a0513 |
2022 | |||||
in thousands of \u20ac | Group of cash-generating units | Carrying amount | Increases | Exchange differences | Carrying amount |
Subsidiaries | |||||
SWS | Bekaert Bradford UK Ltd | 2\u00a0664 | \u2014 | -140 | 2\u00a0523 |
SB | Combustion - heating EMEA | 3\u00a0027 | \u2014 | \u2014 | 3\u00a0027 |
SB | Building Products | 71 | \u2014 | \u2014 | 71 |
RR | Rubber Reinforcement | 4\u00a0255 | \u2014 | \u2014 | 4\u00a0255 |
SWS | Orrville plant (USA) | 10\u00a0357 | \u2014 | 641 | 10\u00a0998 |
SWS | Inchalam group | 657 | \u2014 | 42 | 699 |
SWS | Bekaert Ideal SL companies | 1\u00a0437 | 490 | 67 | 1\u00a0994 |
SWS | Bekaert (Qingdao) Wire Products Co Ltd | 385 | \u2014 | \u2014 | 385 |
SWS | Bekaert Jiangyin Wire Products Co Ltd | 47 | \u2014 | \u2014 | 47 |
BBRG | BBRG | 127\u00a0774 | 886 | -93 | 128\u00a0567 |
Subtotal | 150\u00a0674 | 1\u00a0376 | 517 | 152\u00a0567 | |
Joint ventures and associates | |||||
SWS | Belgo Bekaert Arames Ltda | 2\u00a0382 | \u2014 | 284 | 2\u00a0666 |
RR | BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 1\u00a0456 | \u2014 | 173 | 1\u00a0630 |
Subtotal | 3\u00a0838 | \u2014 | 457 | 4\u00a0295 | |
Total | 154\u00a0513 | 1\u00a0376 | 974 | 156\u00a0862 |
Following the merger of Grating Peru SAC into Productos de Acero Cassad\u00f3 S.A. in 2021, the initial goodwill allocated to Grating Peru SAC was reclassified under the Bekaert Ideal SL companies. The increases in goodwill related to the step-acquisition of VisionTek Engineering Srl and the acquisition of Sujetar, which is in the meantime merged into Productos de Acero Cassado SA.
The discount factor for all impairment tests is based on a (long-term) post-tax cost of capital, the risks being implicit in the cash flows. A weighted average cost of capital (WACC) is determined for euro, US dollar and Chinese renminbi regions. For countries or businesses with a higher perceived risk, the WACC is raised with a country or business specific risk factor. The WACC is post-tax based, since relevant cash flows are also post-tax based. In determining the weight of the cost of debt vs the cost of equity, a target gearing (net debt relative to equity) of 50% is used. For cash flow models stated in real terms (without inflation), the nominal WACC is adjusted for the expected inflation rate. For cash flow models in nominal terms, the nominal WACC is used. All parameters used for the calculation of the discount factors are reviewed at least annually.
In relation to the impairment testing of goodwill arising from the BBRG business combination, the following model characteristics have been used:
\u2022a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption based on a nominal perpetual growth rate of 2% (in\u00a02021:\u00a02%), which mainly is based on a conservative industrial GDP evolution assumption;
\u2022the cash flows reflect the evolution taking into account agreed action plans and are based on the assets in their current condition, without including the impacts of future restructuring not yet committed;
\u2022only capital expenditure required to maintain the assets in good working order are included; future capital expenditures improving or enhancing the assets in excess of their originally assessed standard of performance are not considered;
\u2022no cost structure improvements are taken into account unless they can be substantiated; and
\u2022the cash outflows relating to working capital are calculated as a percentage of incremental sales based on the past performance of BBRG.
The headroom for impairment, i.e., the excess of the recoverable amount over the carrying amount of the BBRG CGU is estimated at \u20ac 200.1 million (2021: \u20ac 375.0 million). The decrease is the combined result of the updated business plan (\u20ac -107.2 million) and by an increase of the capital employed of the business (\u20ac +67.7 million).
The following scenario\u2019s illustrate the sensitivity of this headroom to changes in the key assumptions of the business plan:
\u2022If the sales level would be 10% lower in all periods of the business plan, then headroom would be \u20ac 98.5 million lower (remaining \u20ac 101.6 million);
\u2022If the percentage Underlying EBITDA on sales would be 1% short from the forecasted level in all periods of the business plan, then headroom would be \u20ac 67.4 million lower (remaining \u20ac 132.7 million);
\u2022If the Underlying EBITDA would be \u20ac 5.0 million short from the forecasted level in all periods of the business plan, then headroom would be \u20ac\u00a052.8\u00a0million lower (remaining \u20ac\u00a0147.3\u00a0million);
\u2022If the discount factor would be 1% higher, then headroom would be \u20ac\u00a083.0\u00a0million lower (remaining \u20ac 117.1 million);
\u2022The combined effect of a lower sales level by 10% and a lower Underlying EBITDA margin by 1%, in all periods of the business plan would result in a drop of \u20ac 159.2 million in headroom (remaining \u20ac 40.9 million);
\u2022The combined effect of a lower sales level by 10%, a lower Underlying EBITDA margin by 1% in all periods of the business plan and a higher discount factor with 1% would result in an impairment loss of \u20ac\u00a024.6\u00a0million.
Based on current knowledge, reasonable changes in key assumptions (including discount rate, sales and margin evolution) would not generate impairments for any of the cash-generating units for which goodwill has been allocated.
Discount rates for impairment testing | |||||
2021 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.8% | 4.7% | 4.8% | ||
Long term interest rate | 2.1% | 5.2% | 4.9% | ||
Short term interest rate | 0.7% | 3.1% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 9.3% | 10.8% | 14.1% | |
Risk free rate = Rf | 0.1% | 1.6% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.0% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 12.8% | 14.8% | 19.3% | ||
Bekaert WACC - nominal | 9.1% | 11.4% | 14.5% | ||
Expected inflation | 2.1% | 2.3% | 3.0% | ||
Bekaert WACC in real terms pre-tax | 7.0% | 9.1% | 11.5% | ||
Bekaert WACC in real terms (indicative post-tax) | 4.6% | 6.0% | 7.6% |
Discount rates for impairment testing | |||||
2022 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.2% | 3.6% | 4.8% | ||
Long term interest rate | 1.5% | 3.9% | 4.9% | ||
Short term interest rate | 0.3% | 2.5% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 12.3% | 13.4% | 14.5% | |
Risk free rate = Rf | 2.7% | 3.8% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.3% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 16.8% | 18.4% | 19.9% | ||
Bekaert WACC - nominal | 8.5% | 9.8% | 10.8% | ||
Expected inflation | 2.0% | 2.1% | 2.3% | ||
Bekaert WACC in real terms | 6.5% | 7.7% | 8.5% |
Cost | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
in thousands of \u20ac | ||||||
As at 1 January 2021 | 1\u00a0153\u00a0100 | 2\u00a0775\u00a0614 | 108\u00a0112 | 16\u00a0298 | 84\u00a0023 | 4\u00a0137\u00a0147 |
Expenditure | 22\u00a0434 | 60\u00a0371 | 6\u00a0768 | 370 | 63\u00a0107 | 153\u00a0050 |
Disposals and retirements | -21\u00a0252 | -52\u00a0833 | -3\u00a0724 | -417 | -57 | -78\u00a0283 |
Merger / Split | 5\u00a0537 | 2\u00a0223 | 49 | \u2014 | \u2014 | 7\u00a0809 |
Transfers \u00b9 | \u2014 | \u2014 | 105 | \u2014 | -937 | -832 |
Reclassification to (-) / from held for sale \u00b2 | -1\u00a0551 | -278 | \u2014 | -451 | \u2014 | -2\u00a0280 |
Exchange gains and losses (-) | 61\u00a0060 | 167\u00a0912 | 4\u00a0626 | 167 | 4\u00a0955 | 238\u00a0720 |
As at 31 December 2021 | 1\u00a0219\u00a0328 | 2\u00a0953\u00a0008 | 115\u00a0937 | 15\u00a0968 | 151\u00a0091 | 4\u00a0455\u00a0332 |
As at 1 January 2022 | 1\u00a0219\u00a0328 | 2\u00a0953\u00a0008 | 115\u00a0937 | 15\u00a0968 | 151\u00a0091 | 4\u00a0455\u00a0332 |
Expenditure | 39\u00a0662 | 97\u00a0378 | 4\u00a0517 | 1\u00a0779 | 26\u00a0524 | 169\u00a0860 |
Disposals and retirements | -4\u00a0028 | -18\u00a0481 | -4\u00a0393 | -508 | -1 | -27\u00a0410 |
New consolidations | 440 | 210 | 18 | 3 | 81 | 752 |
Transfers \u00b9 | 4\u00a0655 | 77 | 21 | \u2014 | -43 | 4\u00a0711 |
Reclassification to (-) / from held for sale \u00b2 | \u2014 | 278 | \u2014 | 451 | 274 | 1\u00a0003 |
Exchange gains and losses (-) | 10\u00a0781 | 8\u00a0833 | 407 | -82 | 6\u00a0184 | 26\u00a0124 |
As at 31 December 2022 | 1\u00a0270\u00a0838 | 3\u00a0041\u00a0305 | 116\u00a0506 | 17\u00a0611 | 184\u00a0110 | 4\u00a0630\u00a0371 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and \u2018Property, plant and equipment\u2019.
\u00b2 In 2021, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site; in 2022 this again relates to the plant, machinery and equipment of the Ingelmunster (Belgium) site and property received as payment by customers in Ecuador (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets').
Accumulated depreciation and impairment | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
in thousands of \u20ac | ||||||
As at 1 January 2021 | 634\u00a0755 | 2\u00a0207\u00a0291 | 92\u00a0087 | 5\u00a0246 | \u2014 | 2\u00a0939\u00a0379 |
Charge for the year | 41\u00a0600 | 101\u00a0370 | 7\u00a0704 | 755 | \u2014 | 151\u00a0429 |
Impairment losses | \u2014 | 1\u00a0077 | 158 | 9 | \u2014 | 1\u00a0244 |
Reversal impairment losses and depreciations | \u2014 | -2\u00a0760 | -2 | \u2014 | \u2014 | -2\u00a0762 |
Disposals and retirements | -19\u00a0345 | -49\u00a0080 | -3\u00a0591 | -208 | \u2014 | -72\u00a0225 |
Transfers \u00b9 | \u2014 | \u2014 | 78 | \u2014 | \u2014 | 78 |
Reclassification to (-) / from held for sale \u00b2 | -744 | -148 | \u2014 | -89 | \u2014 | -981 |
Exchange gains (-) and losses | 37\u00a0566 | 137\u00a0913 | 4\u00a0046 | 85 | \u2014 | 179\u00a0611 |
As at 31 December 2021 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
As at 1 January 2022 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
Charge for the year | 44\u00a0719 | 102\u00a0714 | 7\u00a0067 | 789 | \u2014 | 155\u00a0289 |
Impairment losses | 9\u00a0541 | 48\u00a0346 | 119 | \u2014 | \u2014 | 58\u00a0006 |
Reversal impairment losses and depreciations | \u2014 | -231 | \u2014 | \u2014 | \u2014 | -231 |
Disposals and retirements | -3\u00a0240 | -18\u00a0005 | -4\u00a0267 | -115 | \u2014 | -25\u00a0627 |
Transfers \u00b9 | \u2014 | 63 | 21 | \u2014 | \u2014 | 84 |
Reclassification to (-) / from held for sale \u00b2 | \u2014 | 148 | \u2014 | 89 | \u2014 | 237 |
Exchange gains (-) and losses | 3\u00a0218 | 336 | 263 | -30 | \u2014 | 3\u00a0786 |
As at 31 December 2022 | 748\u00a0070 | 2\u00a0529\u00a0033 | 103\u00a0682 | 6\u00a0531 | \u2014 | 3\u00a0387\u00a0317 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and \u2018Property, plant and equipment\u2019.
\u00b2 In 2021 and 2022, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets').
Cost | ||||||
in thousands of \u20ac | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
Carrying amount as at 31 December 2021 before investment grants | 525\u00a0495 | 557\u00a0346 | 15\u00a0457 | 10\u00a0169 | 151\u00a0091 | 1\u00a0259\u00a0559 |
Net investment grants | -4\u00a0780 | -922 | \u2014 | \u2014 | \u2014 | -5\u00a0702 |
Carry amount as at 31 December 2021 | 520\u00a0716 | 556\u00a0424 | 15\u00a0457 | 10\u00a0169 | 151\u00a0091 | 1\u00a0253\u00a0857 |
Carrying amount as at 31 December 2022 before investment grants | 522\u00a0768 | 512\u00a0273 | 12\u00a0824 | 11\u00a0078 | 184\u00a0110 | 1\u00a0243\u00a0054 |
Net investment grants | -4\u00a0218 | -794 | \u2014 | \u2014 | \u2014 | -5\u00a0012 |
Carry amount as at 31 December 2022 | 518\u00a0551 | 511\u00a0479 | 12\u00a0824 | 11\u00a0078 | 184\u00a0110 | 1\u00a0238\u00a0041 |
Capital expenditure included capacity expansions and equipment upgrades across the group, but particularly in Rubber Reinforcement (in its plants in EMEA and China, as well as the start-up of its green field in Vietnam). Capital expenditure in the Steel Wire Solutions business was mainly in Central Europe, Latin America, USA and China. In the Specialty Businesses segment, expansion capital expenditure was in Central Europe (Building Products) and in China (Fiber Technologies), while improvement capital expenditure was in the European plants of Combustion Technologies and Hose & Conveyor Belt Solutions. Finally, capital expenditure in BBRG was mainly in its UK- and USA -based Ropes entities and in Advanced Cords plants.
The ending balance of Assets under Construction per year-end 2022 related to a few big expansion projects (such as the plant in Vietnam, the expansions in USA, the Steel Wire Solutions plants in Central and Eastern Europe and the expansion in Advanced Cords) but predominantly to a lot of smaller capital expenditure projects in all of the Bekaert entities which were still in the finalization phase.
In 2022, impairment losses have been recorded in Rubber Reinforcement (Russia), BBRG (Germany) and Specialty Businesses (Building Products Russia). Following the situation in Russia, management has performed an impairment analysis using updated business plans and a discount factor adjusted for the increased country and activity risk. Based on the outcome of this analysis an impairment of \u20ac 54 million has been recorded on Property, Plant and Equipment.
This note provides information for leases where the group is a lessee. In principal, the Group does not act as a lessor.
The balance sheet showed the following roll-forward during the year relating to right-of-use assets:
Cost | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
in thousands of \u20ac | ||||||||
As at 1 January 2021 | 71\u00a0376 | 73\u00a0686 | 3\u00a0206 | 17\u00a0494 | 22\u00a0624 | 1\u00a0730 | 589 | 190\u00a0704 |
New leases / extensions | \u2014 | 6\u00a0123 | 782 | 7\u00a0116 | 4\u00a0184 | 398 | 144 | 18\u00a0748 |
Ending contracts / reductions in contract term | -985 | -2\u00a0966 | -104 | -3\u00a0017 | -4\u00a0229 | \u2014 | -241 | -11\u00a0542 |
Transfers \u00b9 | \u2014 | \u2014 | \u2014 | \u2014 | -105 | \u2014 | \u2014 | -105 |
Exchange gains and losses (-) | 7\u00a0554 | 2\u00a0817 | 59 | 416 | 324 | 121 | 32 | 11\u00a0323 |
As at 31 December 2021 | 77\u00a0945 | 79\u00a0661 | 3\u00a0943 | 22\u00a0009 | 22\u00a0798 | 2\u00a0249 | 523 | 209\u00a0129 |
As at 1 January 2022 | 77\u00a0945 | 79\u00a0661 | 3\u00a0943 | 22\u00a0009 | 22\u00a0798 | 2\u00a0249 | 523 | 209\u00a0129 |
New leases / extensions | 6 | 16\u00a0532 | 465 | 8\u00a0481 | 6\u00a0845 | 725 | 686 | 33\u00a0740 |
Ending contracts / reductions in contract term | -21 | -16\u00a0644 | -394 | -4\u00a0513 | -6\u00a0007 | -201 | -178 | -27\u00a0957 |
Transfers \u00b9 | \u2014 | -4\u00a0655 | -77 | \u2014 | -21 | \u2014 | \u2014 | -4\u00a0753 |
Exchange gains and losses (-) | -34 | -1\u00a0211 | 117 | 454 | 80 | 38 | -36 | -592 |
As at 31 December 2022 | 77\u00a0896 | 73\u00a0684 | 4\u00a0053 | 26\u00a0431 | 23\u00a0696 | 2\u00a0811 | 995 | 209\u00a0566 |
Accumulated depreciation and impairment | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
in thousands of \u20ac | ||||||||
As at 1 January 2021 | 17\u00a0201 | 22\u00a0219 | 1\u00a0055 | 7\u00a0026 | 9\u00a0852 | 590 | 155 | 58\u00a0097 |
Charge for the year | 1\u00a0381 | 10\u00a0211 | 979 | 5\u00a0169 | 5\u00a0950 | 433 | 88 | 24\u00a0210 |
Ending contracts | -273 | -2\u00a0418 | -75 | -2\u00a0520 | -3\u00a0291 | \u2014 | -15 | -8\u00a0592 |
Transfers \u00b9 | \u2014 | \u2014 | \u2014 | \u2014 | -78 | \u2014 | \u2014 | -78 |
Exchange gains (-) and losses | 1\u00a0968 | 1\u00a0066 | 12 | 162 | 152 | 49 | 10 | 3\u00a0418 |
As at 31 December 2021 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
As at 1 January 2022 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
Charge for the year | 1\u00a0494 | 11\u00a0033 | 1\u00a0031 | 6\u00a0627 | 5\u00a0984 | 554 | 126 | 26\u00a0849 |
Impairment losses | \u2014 | \u2014 | \u2014 | \u2014 | 112 | \u2014 | \u2014 | 112 |
Reversal impairment losses and depreciations | \u2014 | -161 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -161 |
Ending contracts | -14 | -14\u00a0264 | -394 | -4\u00a0252 | -5\u00a0431 | -201 | -132 | -24\u00a0688 |
Transfers \u00b9 | \u2014 | \u2014 | -31 | \u2014 | -21 | \u2014 | \u2014 | -53 |
Exchange gains (-) and losses | -273 | -311 | 52 | 180 | 42 | 16 | -6 | -300 |
As at 31 December 2022 | 21\u00a0484 | 27\u00a0374 | 2\u00a0628 | 12\u00a0392 | 13\u00a0270 | 1\u00a0440 | 227 | 78\u00a0816 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment') and 'Right-of-use property, plant and equipment'.
in thousands of \u20ac | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
Carrying amount as at 31 December 2021 | 57\u00a0668 | 48\u00a0584 | 1\u00a0972 | 12\u00a0172 | 10\u00a0214 | 1\u00a0178 | 285 | 132\u00a0073 |
Carrying amount as at 31 December 2022 | 56\u00a0412 | 46\u00a0309 | 1\u00a0425 | 14\u00a0039 | 10\u00a0425 | 1\u00a0371 | 768 | 130\u00a0750 |
The Group leases various plants, offices, warehouses, equipment, industrial vehicles, company cars, servers and small office equipment like printers and computers. Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of company cars and industrial vehicles for which the Group is a lessee, it has elected not to separate lease and non-lease components and instead account for these as a single lease component. The main non-lease components included in the lease component relate to costs for maintenance and for replacement of tires. The Group applied the practical expedient for low value assets to leases of printers and small office equipment. The Group also applied the practical expedient for short term leases (defined as leases with a lease term of 12 months or less). There were no contracts with dismantling costs, residual value guarantees or initial direct costs, nor contracts with variable lease expenses other then those linked to an index or rate.
Additions to RoU buildings included new contracts for factories, warehouses and offices, mainly in the United Kingdom, India and China. Some contracts were ended, mainly in Norway, China and the United KIngdom.
The average lease term for the RoU assets (excluding the RoU land) was 9.3 years (2021:\u00a09.9 years). RoU buildings had an average lease term of 13 years (2021:\u00a013 years) and the other categories of PP&E (excluding land) had an average lease term between 4 and 6 years.
RoU land relates to land use rights that were paid in advance and had an average useful live of 54 years.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee\u2019s incremental borrowing rate is used to discount the future lease payments. The incremental borrowing rate is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The incremental borrowing rate is determined by Group Treasury, taking into account the market rate per currency for different relevant time buckets and the credit margin for each individual company based on its credit rating. The incremental borrowing rate is calculated as the total of both elements. The weighted average discount rate at the end of 2021 was 4.39% (2021:\u00a04.01%).
The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. For further information on the lease liability, we refer to note 6.18. \u2018Interest-bearing debt\u2019.
The Group is exposed to potential future increases in variable lease payments, based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Right-of-use assets were generally depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-line basis.
The income statement showed the following amounts relating to leases:
2021 | ||||||||
in thousands of \u20ac | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
Depreciation charge of right-of-use assets | -1\u00a0381 | -10\u00a0211 | -979 | -5\u00a0169 | -5\u00a0950 | -433 | -88 | -24\u00a0210 |
Interest expense (included in finance cost) | -3\u00a0152 | |||||||
Expense relating to short-term leases | -837 | |||||||
Expense relating to low-value leases | -727 | |||||||
Total | -28\u00a0926 |
2022 | ||||||||
in thousands of \u20ac | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
Depreciation charge of right-of-use assets | -1\u00a0494 | -11\u00a0033 | -1\u00a0031 | -6\u00a0627 | -5\u00a0984 | -554 | -126 | -26\u00a0849 |
Interest expense (included in finance cost) | -3\u00a0269 | |||||||
Expense relating to short-term leases | -1\u00a0054 | |||||||
Expense relating to low-value leases | -1\u00a0021 | |||||||
Total | -32\u00a0193 |
The remaining operating lease expenses in the operating result mainly related to costs linked to leased assets such as fuel for company cars, non-deductible VAT on company car contracts and property taxes on buildings.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 120\u00a0181 | 184\u00a0823 |
Capital increases and decreases | \u2014 | -144 |
Result for the year | 107\u00a0619 | 54\u00a0257 |
Dividends | -44\u00a0872 | -39\u00a0558 |
Exchange gains and losses | 1\u00a0891 | 18\u00a0186 |
Other comprehensive income | 3 | 27 |
As at 31 December | 184\u00a0823 | 217\u00a0590 |
For an analysis of the result for the year, please refer to note 5.7. \u2018Share in the results of joint ventures and associates\u2019.
Exchange gains and losses related mainly to the evolution of the Brazilian real versus the euro. In 2022, the Brazilian real increased significantly in value against the euro (5.6 BRL/EUR end 2022) while it remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020).
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 3\u00a0800 | 3\u00a0838 |
Exchange gains and losses | 38 | 457 |
As at 31 December | 3\u00a0838 | 4\u00a0295 |
Carrying amount of related goodwill as at 31 December | 3\u00a0838 | 4\u00a0295 |
Total carrying amount of investments in joint ventures as at 31 December | 188\u00a0661 | 221\u00a0886 |
See Note 6.2 \u2018Goodwill\u2019 for details per entity.
The Group\u2019s share in the equity of joint ventures is analyzed as follows:
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | 56 | -284 |
Agro - Bekaert Springs, SL | Spain | 13 | -744 |
Belgo Bekaert Arames Ltda | Brazil | 136\u00a0092 | 165\u00a0312 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 48\u00a0521 | 53\u00a0250 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | 140 | 56 |
Total for joint ventures excluding related goodwill | 184\u00a0822 | 217\u00a0590 | |
Carrying amount of related goodwill | 3\u00a0838 | 4\u00a0295 | |
Total for joint ventures including related goodwill | 188\u00a0661 | 221\u00a0886 |
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on material joint ventures. The two Brazilian joint ventures have been aggregated in order to emphasize the predominance of the partnership with ArcelorMittal when analyzing the relative importance of the joint ventures.
Proportion of ownership interest (and voting rights) held by the Group at year-end
Name of joint venture | |||
in thousands of \u20ac | Country | 2021 | 2022 |
Belgo Bekaert Arames Ltda | Brazil | 45.0% (50.0%) | 45.0% (50.0%) |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 44.5% (50.0%) | 44.5% (50.0%) |
Belgo Bekaert Arames Ltda manufactures and sells a wide variety of steel wire products for various sectors, and BMB manufactures and sells mainly steel cord and beat wire for rubber reinforcement in tires.
Brazilian joint ventures: income statement | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 1\u00a0041\u00a0142 | 1\u00a0240\u00a0955 |
Operating result (EBIT) | 282\u00a0531 | 173\u00a0274 |
Interest income | 53\u00a0043 | 13\u00a0135 |
Interest expense | -17\u00a0775 | -13\u00a0762 |
Other financial income and expenses | -2\u00a0051 | -4\u00a0089 |
Income taxes | -62\u00a0360 | -31\u00a0991 |
Result for the period | 253\u00a0389 | 136\u00a0567 |
Other comprehensive income for the period | 12 | 57 |
Total comprehensive income for the period | 253\u00a0400 | 136\u00a0624 |
Depreciation and amortization | 15\u00a0803 | 19\u00a0547 |
EBITDA | 298\u00a0334 | 192\u00a0821 |
Dividends received from the entities | 44\u00a0872 | 39\u00a0558 |
Brazilian joint ventures: balance sheet | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 406\u00a0456 | 420\u00a0218 |
Non-current assets | 239\u00a0857 | 316\u00a0079 |
Current liabilities | -184\u00a0396 | -158\u00a0025 |
Non-current liabilities | -53\u00a0086 | -94\u00a0806 |
Net assets | 408\u00a0831 | 483\u00a0466 |
Brazilian joint ventures: net debt elements | ||
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 5\u00a0963 | 51\u00a0371 |
Current interest-bearing debt | 18\u00a0454 | 19\u00a0680 |
Total financial debt | 24\u00a0417 | 71\u00a0051 |
Non-current financial receivables and cash guarantees | -16\u00a0466 | -62\u00a0532 |
Cash and cash equivalents | -31\u00a0940 | -22\u00a0154 |
Net debt | -23\u00a0990 | -13\u00a0635 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling \u20ac 5.3 million (2021: \u20ac 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of \u20ac 22.0 million (2021: \u20ac 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%).
Unrecognized commitments to acquire property, plant and equipment amounted to \u20ac 8.6 million (2021: \u20ac 16.2 million), including \u20ac 4.2 million (2021: \u20ac 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of \u20ac 13.6 million (2021:\u00a0\u20ac\u00a024.9\u00a0million).
There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures.
Brazilian joint ventures: reconciliation with carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Net assets of Belgo Bekaert Arames Ltda | 301\u00a0977 | 366\u00a0385 |
Proportion of the Group's ownership interest | 45.0% | 45.0% |
Proportionate net assets | 135\u00a0890 | 164\u00a0873 |
Consolidation adjustments | 202 | 438 |
Carrying amount of the Group's interest in Belgo Bekaert Arames Ltda | 136\u00a0092 | 165\u00a0312 |
Net assets of BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 106\u00a0854 | 117\u00a0081 |
Proportion of the Group's ownership interest | 44.5% | 44.5% |
Proportionate net assets | 47\u00a0549.981 | 52\u00a0101 |
Consolidation adjustments | 971 | 1\u00a0149 |
Carrying amount of the Group's interest in BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 48\u00a0521 | 53\u00a0250 |
Carrying amount of the Group's interest in the Brazilian joint ventures | 184\u00a0613 | 218\u00a0562 |
The following table reflects aggregate information for the other joint ventures which were not deemed material in this context.
Aggregate information of the other joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
The Group's share in the result from continuing operations | -430 | -1\u00a0095 |
The Group's share of other comprehensive income | -2 | 1 |
The Group's share of total comprehensive income | -432 | -1\u00a0093 |
Aggregate carrying amount of the Group's interests in these joint ventures | 210 | -972 |
in thousands of \u20ac | 2021 | 2022 |
Non-current financial receivables and cash guarantees | 10\u00a0192 | 9\u00a0665 |
Reimbursement rights and other non-current amounts receivable | 2\u00a0522 | 2\u00a0705 |
Derivatives (cf. note 7.2.) | 13\u00a0244 | 14\u00a0678 |
Overfunded employee benefit plans - non-current | 19\u00a0847 | 12\u00a0243 |
Equity investments at FVTOCI | 20\u00a0081 | 26\u00a0023 |
Total other non-current assets | 65\u00a0886 | 65\u00a0314 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 13\u00a0372 | 20\u00a0081 |
Expenditure | 863 | 8\u00a0613 |
Disposals | \u2014 | -76 |
Fair value changes | 5\u00a0847 | -2\u00a0595 |
As at 31 December | 20\u00a0081 | 26\u00a0023 |
The equity investments designated as at fair value through OCI (FVTOCI) in accordance with IFRS 9 \u2018Financial Instruments\u2019 mainly\u00a0consisted of:
\u2022Shougang Concord Century Holdings Ltd, a Hong Kong Stock Exchange listed company (\u20ac\u00a06.6 million). On this investment, an decrease in fair value of \u20ac\u00a03.2\u00a0million was recognized through OCI (2021: increase of \u20ac\u00a03.9\u00a0million).
\u2022Bekaert Xinyu Metal Products Co Ltd (\u20ac\u00a06.5 million). On this investment, an decrease in fair value of \u20ac\u00a01.5\u00a0million was recognized through OCI (2021: an increase of \u20ac\u00a02.0\u00a0million).
\u2022Transportes Puelche Ltda (\u20ac\u00a00.5 million), an investment held by Acma SA and Prodalam SA (Chile).
\u2022Pajarito Powder LLC (\u20ac\u00a03.9\u00a0million), a new investment held by Bekaert Corporation (US).
Carrying amount | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
As at 1 January | 124\u00a0243 | 119\u00a0244 | 38\u00a0337 | 52\u00a0059 |
Increase or decrease via income statement \u00b9 | -3\u00a0088 | -618 | 14\u00a0620 | 886 |
Increase or decrease via OCI | -2\u00a0191 | 1\u00a0175 | 1\u00a0308 | 6\u00a0049 |
New consolidations | \u2014 | 66 | 1\u00a0184 | 478 |
Exchange gains and losses \u00b9 | 6\u00a0858 | 1\u00a0384 | 3\u00a0187 | 1\u00a0425 |
Change in set-off of assets and liabilities \u00b9 | -6\u00a0577 | -16\u00a0880 | -6\u00a0577 | -16\u00a0880 |
As at 31 December | 119\u00a0244 | 104\u00a0372 | 52\u00a0059 | 44\u00a0018 |
Deferred tax assets and liabilities were attributable to the following items:
Assets | Liabilities | Net assets | ||||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 |
Intangible assets | 17\u00a0390 | 27\u00a0602 | 12\u00a0390 | 12\u00a0242 | 5\u00a0000 | 15\u00a0361 |
Property, plant and equipment | 46\u00a0338 | 41\u00a0134 | 55\u00a0828 | 55\u00a0369 | -9\u00a0490 | -14\u00a0234 |
Financial assets \u00b9 | 90 | 102 | 32\u00a0029 | 31\u00a0778 | -31\u00a0940 | -31\u00a0676 |
Inventories | 10\u00a0581 | 11\u00a0925 | 8\u00a0168 | 14\u00a0756 | 2\u00a0413 | -2\u00a0831 |
Receivables | 4\u00a0156 | 4\u00a0282 | 128 | 719 | 4\u00a0027 | 3\u00a0563 |
Other current assets | 1\u00a0004 | 1\u00a0246 | 1\u00a0995 | 3\u00a0049 | -991 | -1\u00a0802 |
Employee benefit obligations \u00b9 | 20\u00a0418 | 20\u00a0175 | 212 | 280 | 20\u00a0206 | 19\u00a0894 |
Other provisions | 1\u00a0938 | 3\u00a0393 | 4 | 198 | 1\u00a0934 | 3\u00a0195 |
Other liabilities | 38\u00a0630 | 40\u00a0566 | 8\u00a0311 | 9\u00a0514 | 30\u00a0319 | 31\u00a0052 |
Tax deductible losses carried forward, tax credits and recoverable | 45\u00a0707 | 37\u00a0832 | \u2014 | \u2014 | 45\u00a0707 | 37\u00a0832 |
Tax assets / liabilities | 186\u00a0250 | 188\u00a0258 | 119\u00a0065 | 127\u00a0904 | 67\u00a0186 | 60\u00a0355 |
Set-off of assets and liabilities \u00b9 | -67\u00a0006 | -83\u00a0886 | -67\u00a0006 | -83\u00a0886 | \u2014 | \u2014 |
Net tax assets / liabilities | 119\u00a0244 | 104\u00a0372 | 52\u00a0059 | 44\u00a0018 | 67\u00a0186 | 60\u00a0355 |
\u00b9 See note 2.8 'Restatement effects'
The deferred taxes on property, plant and equipment mainly related to differences in depreciation method between IFRS and tax books, whereas the deferred taxes on intangible assets were mainly generated by intercompany gains which have been eliminated in the consolidated statements. The deferred taxes on employee benefit obligations were mainly generated by temporary differences arising from recognition of liabilities in accordance with IAS 19 \u2018Employee Benefits\u2019. The deferred tax liabilities on financial assets mainly related to temporary differences arising from undistributed profits from subsidiaries and joint ventures.
Movements in deferred tax assets and liabilities arose from the following:
2021 | ||||||
in thousands of \u20ac | As at 1 January | Recognized via income statement | Recognized via OCI | Acquisitions | Exchange | As at 31 December |
Temporary differences | ||||||
Intangible assets | 7\u00a0502 | -2\u00a0221 | \u2014 | \u2014 | -281 | 5\u00a0000 |
Property, plant and equipment | -8\u00a0271 | -1\u00a0224 | \u2014 | -1\u00a0184 | 1\u00a0189 | -9\u00a0490 |
Financial assets \u00b9 | -20\u00a0850 | -9\u00a0356 | -1\u00a0288 | \u2014 | -445 | -31\u00a0940 |
Inventories | 7\u00a0462 | -4\u00a0459 | \u2014 | \u2014 | -590 | 2\u00a0413 |
Receivables | 4\u00a0557 | -596 | \u2014 | \u2014 | 66 | 4\u00a0027 |
Other current assets | -1\u00a0767 | 722 | \u2014 | \u2014 | 55 | -991 |
Employee benefit obligations \u00b9 | 23\u00a0375 | -1\u00a0353 | -2\u00a0212 | \u2014 | 396 | 20\u00a0206 |
Other provisions | 3\u00a0300 | -1\u00a0415 | \u2014 | \u2014 | 48 | 1\u00a0934 |
Other liabilities | 19\u00a0668 | 9\u00a0455 | \u2014 | \u2014 | 1\u00a0195 | 30\u00a0319 |
Tax deductible losses carried forward, tax credits and recoverable income taxes | 50\u00a0930 | -7\u00a0261 | \u2014 | \u2014 | 2\u00a0038 | 45\u00a0707 |
Total | 85\u00a0906 | -17\u00a0708 | -3\u00a0500 | -1\u00a0184 | 3\u00a0671 | 67\u00a0186 |
\u00b9 See note 2.8 'Restatement effects'
2022 | ||||||
in thousands of \u20ac | As at 1 January | Recognized via income statement | Recognized via OCI | Acquisitions | Exchange | As at 31 December |
Temporary differences | ||||||
Intangible assets | 5\u00a0000 | 10\u00a0397 | \u2014 | -478 | 442 | 15\u00a0361 |
Property, plant and equipment | -9\u00a0490 | -3\u00a0661 | \u2014 | \u2014 | -1\u00a0084 | -14\u00a0234 |
Financial assets | -31\u00a0940 | 6\u00a0351 | -6\u00a0005 | \u2014 | -82 | -31\u00a0676 |
Inventories | 2\u00a0413 | -4\u00a0725 | \u2014 | \u2014 | -518 | -2\u00a0831 |
Receivables | 4\u00a0027 | -558 | \u2014 | \u2014 | 94 | 3\u00a0563 |
Other current assets | -991 | -921 | \u2014 | \u2014 | 110 | -1\u00a0802 |
Employee benefit obligations | 20\u00a0206 | -2\u00a0112 | 1\u00a0192 | \u2014 | 608 | 19\u00a0894 |
Other provisions | 1\u00a0934 | 1\u00a0324 | -61 | \u2014 | -2 | 3\u00a0195 |
Other liabilities | 30\u00a0319 | 634 | \u2014 | \u2014 | 99 | 31\u00a0052 |
Tax deductible losses carried forward, tax credits and recoverable income taxes | 45\u00a0707 | -8\u00a0234 | \u2014 | 66 | 292 | 37\u00a0832 |
Total | 67\u00a0186 | -1\u00a0505 | -4\u00a0874 | -412 | -40 | 60\u00a0355 |
2021 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences \u00b9 | 88\u00a0229 | \u2014 | 88\u00a0229 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | 5\u00a0882 | \u2014 | 5\u00a0882 |
Remeasurement gains and losses on defined-benefit plans | 47\u00a0351 | -3\u00a0500 | 43\u00a0851 |
Share of OCI of joint ventures and associates | 6 | -3 | 3 |
Total | 141\u00a0467 | -3\u00a0503 | 137\u00a0965 |
\u00b9 See note 2.8 'Restatement effects'
2022 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences | 48\u00a0888 | \u2014 | 48\u00a0888 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | -2\u00a0367 | \u2014 | -2\u00a0367 |
Remeasurement gains and losses on defined-benefit plans | 3\u00a0393 | -4\u00a0874 | -1\u00a0481 |
Share of OCI of joint ventures and associates | 40 | -13 | 27 |
Total | 49\u00a0954 | -4\u00a0887 | 45\u00a0067 |
The following table presents the gross amounts of the tax losses and tax credits generating deferred tax assets of which some were unrecognized.
2021 | ||||||
in thousands of \u20ac | Expiring within 1 year | Expiring between 1 and 5 years | Expiring after more than 5 years | Not expiring | Total | |
Capital losses | Gross value | \u2014 | \u2014 | 777 | 40\u00a0009 | 40\u00a0786 |
Allowance | \u2014 | \u2014 | -752 | -39\u00a0758 | -40\u00a0510 | |
Net balance | \u2014 | \u2014 | 25 | 251 | 276 | |
Trade losses | Gross value | 38\u00a0285 | 61\u00a0381 | 153\u00a0867 | 674\u00a0409 | 927\u00a0943 |
Allowance | -36\u00a0320 | -47\u00a0215 | -133\u00a0825 | -551\u00a0123 | -768\u00a0482 | |
Net balance | 1\u00a0966 | 14\u00a0166 | 20\u00a0042 | 123\u00a0287 | 159\u00a0461 | |
Tax credits | Gross value | 34 | \u2014 | 306 | 20\u00a0554 | 20\u00a0894 |
Allowance | \u2014 | \u2014 | -306 | -3\u00a0164 | -3\u00a0470 | |
Net balance | 34 | \u2014 | \u2014 | 17\u00a0389 | 17\u00a0423 | |
Total | Gross value | 38\u00a0319 | 61\u00a0381 | 154\u00a0950 | 734\u00a0972 | 989\u00a0622 |
Allowance | -36\u00a0320 | -47\u00a0215 | -134\u00a0882 | -594\u00a0045 | -812\u00a0462 | |
Net balance | 2\u00a0000 | 14\u00a0166 | 20\u00a0068 | 140\u00a0927 | 177\u00a0160 |
2022 | ||||||
in thousands of \u20ac | Expiring within 1 year | Expiring between 1 and 5 years | Expiring after more than 5 years | Not expiring | Total | |
Capital losses | Gross value | \u2014 | \u2014 | 17\u00a0401 | 24\u00a0175 | 41\u00a0576 |
Allowance | \u2014 | \u2014 | -17\u00a0401 | -24\u00a0175 | -41\u00a0576 | |
Net balance | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Trade losses | Gross value | 37\u00a0027 | 61\u00a0189 | 181\u00a0512 | 591\u00a0736 | 871\u00a0464 |
Allowance | -36\u00a0670 | -47\u00a0760 | -135\u00a0417 | -510\u00a0784 | -730\u00a0631 | |
Net balance | 357 | 13\u00a0429 | 46\u00a0094 | 80\u00a0952 | 140\u00a0833 | |
Tax credits | Gross value | \u2014 | \u2014 | 325 | 12\u00a0523 | 12\u00a0848 |
Allowance | \u2014 | \u2014 | -325 | -3\u00a0178 | -3\u00a0503 | |
Net balance | \u2014 | \u2014 | \u2014 | 9\u00a0346 | 9\u00a0346 | |
Total | Gross value | 37\u00a0027 | 61\u00a0189 | 199\u00a0237 | 628\u00a0435 | 925\u00a0888 |
Allowance | -36\u00a0670 | -47\u00a0760 | -153\u00a0143 | -538\u00a0137 | -775\u00a0709 | |
Net balance | 357 | 13\u00a0429 | 46\u00a0094 | 90\u00a0298 | 150\u00a0179 |
The net deferred tax assets corresponding to these base amounts were \u20ac\u00a037.8\u00a0million in 2021 (2021: \u20ac 45.7 million).
Deferred tax assets were recognized only to the extent that it was probable that future taxable profits would be available, taking into account all evidence, both positive and negative. This assessment was done using prudent estimates based on the business plan for the entity concerned, typically using a five year time horizon.
2021 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 120\u00a0139 | 116\u00a0358 | 4\u00a0247 | \u2014 | 4\u00a0514 | \u2014 | 245\u00a0259 |
Consumables and spare parts | 78\u00a0711 | 3\u00a0241 | 7\u00a0191 | \u2014 | 4\u00a0027 | \u2014 | 93\u00a0170 |
Work in progress | 125\u00a0676 | 45\u00a0196 | 958 | \u2014 | 6\u00a0329 | \u2014 | 178\u00a0159 |
Finished goods | 234\u00a0858 | 110\u00a0973 | 4\u00a0059 | \u2014 | 12\u00a0282 | \u2014 | 362\u00a0173 |
Goods purchased for resale | 124\u00a0093 | 121\u00a0680 | 817 | \u2014 | -4\u00a0131 | \u2014 | 242\u00a0458 |
Inventories | 683\u00a0477 | 397\u00a0448 | 17\u00a0272 | \u2014 | 23\u00a0021 | \u2014 | 1\u00a0121\u00a0219 |
Trade receivables | 587\u00a0619 | 146\u00a0039 | 1\u00a0412 | \u2014 | 15\u00a0595 | \u2014 | 750\u00a0666 |
Bills of exchange received | 54\u00a0039 | -17\u00a0652 | \u2014 | \u2014 | 4\u00a0887 | \u2014 | 41\u00a0274 |
Advances paid | 18\u00a0594 | -140 | -1 | \u2014 | 1\u00a0535 | 19\u00a0988 | |
Trade payables | -668\u00a0422 | -368\u00a0659 | \u2014 | \u2014 | -25\u00a0105 | \u2014 | -1\u00a0062\u00a0185 |
Advances received | -15\u00a0682 | -7\u00a0581 | \u2014 | \u2014 | -1\u00a0091 | \u2014 | -24\u00a0354 |
Remuneration and social security payables | -116\u00a0014 | -40\u00a0082 | \u2014 | \u2014 | -4\u00a0602 | 1 | -160\u00a0699 |
Employment-related taxes | -9\u00a0101 | 850 | \u2014 | \u2014 | -138 | \u2014 | -8\u00a0389 |
Operating working capital | 534\u00a0510 | 110\u00a0224 | 18\u00a0683 | \u2014 | 14\u00a0101 | 1 | 677\u00a0519 |
2022 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 245\u00a0259 | -35\u00a0496 | -1\u00a0086 | 12 | 5\u00a0978 | 4 | 214\u00a0673 |
Consumables and spare parts | 93\u00a0170 | 26\u00a0995 | -1\u00a0258 | 74 | 714 | 2 | 119\u00a0696 |
Work in progress | 178\u00a0159 | 3\u00a0906 | -1\u00a0961 | \u2014 | 1\u00a0645 | 85 | 181\u00a0834 |
Finished goods | 362\u00a0173 | -13\u00a0120 | -3\u00a0421 | 36 | 5\u00a0451 | 327 | 351\u00a0445 |
Goods purchased for resale | 242\u00a0458 | 29\u00a0785 | -5\u00a0289 | 27 | 8\u00a0884 | -418 | 275\u00a0448 |
Inventories | 1\u00a0121\u00a0219 | 12\u00a0070 | -13\u00a0014 | 149 | 22\u00a0672 | \u2014 | 1\u00a0143\u00a0096 |
Trade receivables | 750\u00a0666 | -28\u00a0033 | 2\u00a0044 | 171 | 5\u00a0938 | \u2014 | 730\u00a0786 |
Bills of exchange received | 41\u00a0274 | -1\u00a0213 | \u2014 | \u2014 | -297 | \u2014 | 39\u00a0764 |
Advances paid | 19\u00a0988 | -5\u00a0848 | \u2014 | \u2014 | 407 | \u2014 | 14\u00a0547 |
Trade payables | -1\u00a0062\u00a0185 | 163\u00a0526 | \u2014 | -448 | -22\u00a0005 | \u2014 | -921\u00a0113 |
Advances received | -24\u00a0354 | 28 | \u2014 | \u2014 | 229 | \u2014 | -24\u00a0097 |
Remuneration and social security payables | -160\u00a0699 | 40\u00a0220 | \u2014 | -68 | -1\u00a0773 | 20 | -122\u00a0300 |
Employment-related taxes | -8\u00a0389 | -2\u00a0462 | \u2014 | -2 | 43 | \u2014 | -10\u00a0810 |
Operating working capital | 677\u00a0519 | 178\u00a0288 | -10\u00a0970 | -199 | 5\u00a0214 | 20 | 849\u00a0872 |
\u00b9 The organic increase or decrease represents the cash movements of the working capital, which are adjusted in the cash flow statement against purchase of intangible assets and property, plant and equipment for the variation of outstanding trade payables at year-end related to capital expenditure (2022: increase of outstanding payables by \u20ac\u00a00.4\u00a0million (2021: increase of outstanding payables by \u20ac\u00a09.4\u00a0million)).
The average working capital, weighted by the number of periods that an entity has contributed to the consolidated result, represented 13.5% of sales (2021:\u00a012.6%). Additional information is as follows:
\u2022Inventories
The inventories remained rather stable (\u20ac\u00a0+21.9\u00a0million from year-end last year). The cost of sales included expenses related to transport and handling of finished goods amounting to \u20ac\u00a0303.5\u00a0million (2021:\u00a0\u20ac\u00a0249.5\u00a0million), which have never been capitalized in inventories. Movements in inventories in 2022 included write-downs of \u20ac\u00a0-46.8\u00a0million (2021:\u00a0\u20ac\u00a0-22.8\u00a0million) and reversals of write-downs of \u20ac\u00a033.7\u00a0million (2021:\u00a0\u20ac\u00a040.1\u00a0million) Similar as in 2021, in 2022, no inventories were pledged as security for liabilities.
\u2022Trade receivables and bills of exchange received
The trade accounts receivable decreased by \u20ac -21.4 million from year-end last year. The carrying amount of the trade receivables involved in the factoring program amounted to \u20ac 267.5 million (2021: \u20ac 224.8 million).
\u2022The following table presents the movements in the allowance for bad debt on trade receivables. No allowance was posted for bills of exchange received.
Trade receivables and bills of exchange received | ||
in thousands of \u20ac | 2021 | 2022 |
Gross amount | 833\u00a0840 | 810\u00a0441 |
Allowance for bad debts (impaired) | -41\u00a0899 | -39\u00a0891 |
specific allowance for bad debts | -35\u00a0099 | -36\u00a0034 |
general allowance for bad debts | -6\u00a0801 | -3\u00a0857 |
Net carrying amount | 791\u00a0940 | 770\u00a0550 |
More information about allowances of receivables is provided in the following table:
Allowance for bad debt | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -40\u00a0494 | -41\u00a0899 |
Losses recognized in current year | -3\u00a0009 | -6\u00a0029 |
Losses recognized in prior years - amounts used | 1\u00a0079 | 1\u00a0138 |
Losses recognized in prior years - reversal of amounts not used | 3\u00a0343 | 6\u00a0935 |
Exchange gains and losses (-) | -2\u00a0817 | -36 |
As at 31 December | -41\u00a0899 | -39\u00a0891 |
In accordance with the IFRS 9 \u2018expected credit loss\u2019 model for financial assets, a general bad debt allowance is made for trade receivables to cover the unknown bad debt risk at each reporting date. This general allowance constitutes of a percentage on outstanding trade receivables at each reporting date. The percentages are taking into account historical information on losses on trade receivables and are reviewed year-on-year. For more information on credit enhancement techniques, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
\u2022Trade payables decreased significantly, mainly as a result of the organic evolution
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 101\u00a0330 | 157\u00a0005 |
Increase or decrease | 51\u00a0532 | -11\u00a0312 |
Write-downs (-) and write-down reversals | 158 | 1\u00a0134 |
New consolidations | \u2014 | 197 |
Exchange gains and losses | 3\u00a0985 | 4\u00a0402 |
As at 31 December | 157\u00a0005 | 151\u00a0426 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Cash & cash equivalents | 677\u00a0270 | 728\u00a0095 |
Short-term deposits | 80\u00a0058 | 4\u00a0766 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Financial receivables and cash guarantees | 6\u00a0475 | 6\u00a0352 |
Advances paid | 19\u00a0988 | 14\u00a0547 |
Derivatives (cf.note 7.2.) | 1\u00a0416 | 5\u00a0694 |
Deferred charges and accrued income | 14\u00a0394 | 28\u00a0948 |
As at 31 December | 42\u00a0272 | 55\u00a0541 |
The financial receivables and cash guarantees mainly related to receivables from the disposal of the majority stake in the rubber reinforcement plant Sumar\u00e9 (Brazil) in 2017 (\u20ac\u00a03.8\u00a0million\u00a0(2021:\u00a0\u20ac\u00a04.6\u00a0million)) and various cash guarantees (\u20ac\u00a01.1\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.5\u00a0million)).
The advances paid mainly related to advance payments in the context of large capex projects and advance payments for deliveries of wire rod.
Carrying amount (net) | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 6\u00a0740 | 1\u00a0803 |
Increases and decreases (-) | -5\u00a0264 | -1\u00a0063 |
Exchange gains and losses | 327 | 20 |
As at 31 December | 1\u00a0803 | 760 |
in thousands of \u20ac | 2021 | 2022 |
Property, plant and equipment | 1\u00a0803 | 760 |
Total assets classified as held for sale | 1\u00a0803 | 760 |
Total liabilities associated with assets classified as held for sale | \u2014 | \u2014 |
Issued capital | 2021 | 2022 | |||
in thousands of \u20ac | Nominal value | Number of shares | Nominal value | Number of shares | |
1 | As at 1 January | 177\u00a0812 | 60\u00a0414\u00a0841 | 177\u00a0922 | 60\u00a0452\u00a0261 |
Movements in the year | |||||
Issue of new shares | 110 | 37\u00a0420 | 80 | 26\u00a0400 | |
Cancellation of shares | -4\u00a0266 | -1\u00a0449\u00a0409 | |||
As at 31 December | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2 | Structure | ||||
2.1 | Classes of ordinary shares | ||||
Ordinary shares without par value | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2.2 | Registered shares | 22\u00a0841\u00a0937 | 22\u00a0870\u00a0686 | ||
Dematerialized shares | 37\u00a0610\u00a0324 | 36\u00a0158\u00a0566 | |||
Authorized capital not issued | 176\u00a0000 | 176\u00a0000 |
Overview of SOP 2005-2009 Stock Option Plan | |||||||||
Date offered | Date granted | Date of issue of | Exercise price (in \u20ac) | Number of subscription rights | First exercise period | Last exercise | |||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2007 | 18.02.2008 | 22.04.2008 | 28.335 | 215\u00a0100 | 202\u00a0400 | 12\u00a0700 | \u2014 | 22.05 - 30.06.2011 | 15.11 - 15.12.2022 |
785\u00a0058 | 615\u00a0893 | 169\u00a0165 | \u2014 |
Overview of SOP 2010-2014 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2012 | 18.02.2013 | 19.200 | 267\u00a0200 | 264\u00a0500 | 2\u00a0700 | \u2014 | End Feb. - 10.04.2016 | Mid Nov. - 19.12.2022 | |
29.03.2013 | 28.05.2013 | 21.450 | 260\u00a0000 | 235\u00a0000 | \u2014 | 25\u00a0000 | End Feb. - 09.04.2017 | End Feb. - 28.03.2023 | |
19.12.2013 | 17.02.2014 | 25.380 | 373\u00a0450 | 325\u00a0150 | 2\u00a0400 | 45\u00a0900 | End Feb. - 09.04.2017 | Mid Nov. - 18.12.2023 | |
18.12.2014 | 16.02.2015 | 26.055 | 349\u00a0810 | 210\u00a0400 | 18\u00a0510 | 120\u00a0900 | End Feb. - 08.04.2018 | Mid Nov. - 17.12.2024 | |
1\u00a0250\u00a0460 | 1\u00a0035\u00a0050 | 23\u00a0610 | 191\u00a0800 |
Overview of SOP 2015-2017 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
17.12.2015 | 15.02.2016 | 26.375 | 227\u00a0250 | 122\u00a0000 | 28\u00a0250 | 77\u00a0000 | End Feb. - 07.04.2019 | Mid Nov. - 16.12.2025 | |
15.12.2016 | 13.02.2017 | 39.426 | 273\u00a0325 | 144 | 47\u00a0125 | 226\u00a0056 | End Feb. - 12.04.2020 | Mid Nov. - 14.12.2026 | |
21.12.2017 | 20.02.2018 | 34.600 | 225\u00a0475 | 72\u00a0500 | 8\u00a0375 | 144\u00a0600 | End Feb. - 11.04.2021 | Mid Nov. - 20.12.2027 | |
726\u00a0050 | 194\u00a0644 | 83\u00a0750 | 447\u00a0656 |
2021 | 2022 | |||
SOP 2005-2009 Stock Option Plan | Number of subscription rights | Weighted average exercise price (in \u20ac) | Number of subscription rights | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 63\u00a0820 | 28.594 | 26\u00a0400 | 28.335 |
Exercised during the year | -37\u00a0420 | 28.776 | -26\u00a0400 | 28.335 |
Outstanding as at 31 December | 26\u00a0400 | 28.335 | \u2014 | 28.335 |
2021 | 2022 | |||
SOP 2010-2014 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 700\u00a0058 | 24.488 | 300\u00a0600 | 24.300 |
Exercised during the year | -399\u00a0458 | 24.630 | -108\u00a0800 | 22.548 |
Outstanding as at 31 December | 300\u00a0600 | 24.300 | 191\u00a0800 | 24.300 |
2021 | 2022 | |||
SOP 2015-2017 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 640\u00a0800 | 33.769 | 469\u00a0156 | 35.198 |
Exercised during the year | -171\u00a0644 | 29.860 | -21\u00a0500 | 26.375 |
Outstanding as at 31 December | 469\u00a0156 | 35.198 | 447\u00a0656 | 35.198 |
Weighted average remaining contractual life | ||
in years | 2021 | 2022 |
SOP 2005-2009 | 1.0 | \u2014 |
SOP 2010-2014 | 2.2 | 1.5 |
SOP 2015-2017 | 5.1 | 4.1 |
The weighted average share price at the date of exercise in 2022 was \u20ac 22.55 for the SOP 2010-2014 options (2021: \u20ac 24.63), \u20ac 26.38 for the SOP 2015-2017 options (2021: \u20ac 29.86) and \u20ac 28.34 for the SOP 2005-2009 subscription rights (2021: \u20ac 28.78). The exercise price of the subscription rights and options is equal to the lower of (i) the average closing price of the Company\u2019s share during the thirty days preceding the date of the offer, and (ii)\u00a0the last closing price preceding the date of the offer. When subscription rights are exercised under the SOP 2005-2009 plan, equity is increased by the amount of the proceeds received. Under the terms of the SOP2 plan any subscription rights or options granted through 2004 were vested immediately.
Under the terms of the SOP 2010-2014 stock option plan, options to acquire existing Company shares have been offered to the members of the Bekaert Group Executive, the Senior Vice Presidents and senior executive personnel during the period 2010-2014. The grant dates of each offering were scheduled in the period 2011-2015. The exercise price of the SOP 2010-2014 options was determined in the same manner as in the previous plans. The vesting conditions of the SOP 2010-2014 grants, as well as of the SOP 2005-2009 grants and of the SOP2 grants beginning in 2006, are such that the subscription rights or options will be fully vested on 1 January of the fourth year after the date of the offer. In accordance with the Economic Recovery Act of 27 March 2009, the exercise period of the SOP2 options and SOP 2005-2009 subscription rights granted in 2006, 2007 and 2008 was extended by five years in favor of the persons who were plan beneficiaries and subject to Belgian income tax at the time such extension was offered.
The options granted under SOP2, SOP 2010-2014 and SOP 2015-2017 and the subscription rights granted under SOP 2005- 2009 are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the options is determined using a binomial pricing model.
The members of the Bekaert Group Executive, the senior management and a limited number of management staff members of the Company and a number of its subsidiaries received Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and in 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy. The vesting percentage can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the vesting percentage is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Performance Share Plan | Number of units | ||||
Date granted | Granted | Delivered | Forfeited | Outstanding | Expiry date |
15.02.2019 | 178\u00a0233 | 136\u00a0023 | 42\u00a0210 | \u2014 | 31.12.2021 |
26.07.2019 | 35\u00a0663 | 31\u00a0778 | 3\u00a0885 | \u2014 | 31.12.2021 |
21.01.2020 | 182\u00a0900 | \u2014 | 64\u00a0584 | 118\u00a0316 | 31.12.2022 |
17.08.2020 | 12\u00a0580 | \u2014 | 713 | 11\u00a0867 | 31.12.2022 |
15.01.2021 | 144\u00a0708 | \u2014 | 34\u00a0057 | 110\u00a0651 | 31.12.2023 |
19.08.2021 | 15\u00a0101 | \u2014 | 732 | 14\u00a0369 | 31.12.2023 |
09.09.2021 | 7\u00a0966 | \u2014 | \u2014 | 7\u00a0966 | 31.12.2023 |
04.03.2022 | 131\u00a0407 | \u2014 | 21\u00a0030 | 110\u00a0377 | 31.12.2024 |
25.08.2022 | 3\u00a0209 | \u2014 | \u2014 | 3\u00a0209 | 31.12.2024 |
26.09.2022 | 12\u00a0864 | \u2014 | \u2014 | 12\u00a0864 | 31.12.2024 |
724\u00a0631 | 167\u00a0801 | 167\u00a0211 | 389\u00a0619 |
The Performance Share Units granted under these plans are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value is determined as the share price at the transaction date.
In 2022, on 4 March an offer of 131\u00a0407 equity settled performance share units, on 25 August an offer of 3\u00a0209 equity settled performance share units and on 26 September an offer of 12\u00a0864 equity settled performance share units were made under the terms of the PSP 2022-2024 (2021: on 15 January an offer of 144\u00a0708 equity settled performance share units, on 19 August an offer of 15\u00a0101 and on 9 September an offer of 7\u00a0966 under the terms of the PSP 2018-2020). The fair value of the Performance Share Units under the terms of the PSP plan is equal to the share price at grant date (4\u00a0March 2022: \u20ac 33.80, 25 August 2022: \u20ac 31.02 and 26 September 2022: \u20ac 25.98 (15\u00a0January 2021: \u20ac 29.14, 19 August 2021: \u20ac 39.74 and 9 September 2021: \u20ac 38.44)), since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow). The grant in 2022 represented a fair value of \u20ac 4.9 million (2021: \u20ac 5.1 million). The Group has recorded an expense against equity of \u20ac 9.2 million in 2022 (2021: \u20ac 14.8 million).
2021 | 2022 | |||
PSP | Number of units | Weighted average exercise price (in \u20ac) | Number of units | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 390\u00a0631 | 24.185 | 473\u00a0006 | 26.251 |
Granted during the year | 167\u00a0775 | 30.536 | 147\u00a0480 | 33.057 |
Delivered during the year | 0 | \u2014 | -167\u00a0801 | 23.794 |
Forfeited during the year | -85\u00a0400 | 25.217 | -63\u00a0065 | 29.456 |
Outstanding as at 31 December | 473\u00a0006 | 26.251 | 389\u00a0620 | 29.360 |
In March 2016, the Company introduced a Personal Shareholding Requirement Plan for the Chief Executive Officer and the other members of the Bekaert Group Executive (\u2018BGE\u2019), pursuant to which they can build and maintain a personal shareholding in Company shares and whereby the acquisition of the number of Company shares is supported by a so-called Company matching mechanism. The Company matching mechanism provides that the Company will match the BGE member\u2019s investment in Company shares in year x, with a direct grant of a similar number of Company shares as acquired by the BGE member (such grant to be made at the end of year x + 2). These PSR units will vest following a vesting period of three years, conditional to a service condition subject to bad or good leaver conditions. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Personal Shareholding Requirement Plan
Date acquired | Number of units | ||||
Acquired | Matched | Forfeited | Outstanding | Expiry date | |
31.03.2020 | 10\u00a0766 | 3\u00a0489 | 7\u00a0277 | \u2014 | 31.12.2022 |
31.03.2021 | 9\u00a0112 | \u2014 | 3\u00a0930 | 5\u00a0182 | 31.12.2023 |
31.03.2022 | 13\u00a0757 | \u2014 | 1\u00a0597 | 12\u00a0160 | 31.12.2024 |
33\u00a0635 | 3\u00a0489 | 12\u00a0804 | 17\u00a0342 |
The matching shares to be granted under the Personal Shareholding Requirement Plan 2016 are recognized at fair value at start date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the matching shares is determined using a binomial pricing model. Inputs and outcome of this pricing model are detailed below:
To be matched in | To be matched in | To be matched in | |
Pricing model details - Personal Shareholding Requirement plan | Start date March 2020 | Start date March 2021 | Start date March 2022 |
Inputs to the model | |||
Share price at start date (in \u20ac) | 14.98 | 35.68 | 35.48 |
Expected volatility | 36% | 36% | 37.37% |
Expected dividend yield | 3% | 3% | 4.89% |
Vesting period (years) | 2.75 | 2.75 | 2.75 |
Employee exit rate | 0% | 0% | 0% |
Risk-free interest rate | -0.47% | -0.47% | 1.27% |
Outcome of the model | |||
Fair value (in \u20ac) | 13.81 | 32.99 | 6.48 |
Outstanding PSR Units | \u2014 | 5\u00a0182 | 12\u00a0160 |
The matching shares to be granted represented a fair value of \u20ac\u00a00.1\u00a0million (2021: \u20ac 0.4 million). The Group has recorded an expense against equity of \u20ac\u00a00.2\u00a0million (2021:\u00a0\u20ac\u00a00.1\u00a0million) for the matching shares to be granted, based on their fair value and vesting period.
Number of units - PSR | 2021 | 2022 |
Outstanding as at 1 January | 10\u00a0766 | 18\u00a0878 |
Matched during the year | \u2014 | -3\u00a0489 |
Forfeited during the year | -1\u00a0000 | -11\u00a0804 |
Acquired during the year | 9\u00a0112 | 13\u00a0757 |
Outstanding as at 31 December | 18\u00a0878 | 17\u00a0342 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Revaluation reserve for non-consolidated equity investments | -5\u00a0986 | -8\u00a0353 |
Remeasurement reserve for defined-benefit plans | -16\u00a0790 | -12\u00a0660 |
Deferred tax reserve | 23\u00a0464 | 18\u00a0381 |
Other reserves | 688 | -2\u00a0631 |
Cumulative translation adjustments\u00b9 | -137\u00a0127 | -93\u00a0820 |
Total other Group reserves\u00b9 | -136\u00a0440 | -96\u00a0451 |
Treasury shares | -95\u00a0517 | -139\u00a0314 |
Retained earnings\u00b9 | 1\u00a0981\u00a0876 | 2\u00a0115\u00a0216 |
\u00b9 See note 2.8 'Restatement effects'
In the following sections of this disclosure, the movements in the Group reserves and in retained earnings are presented and commented.
Revaluation reserve for non-consolidated equity investments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -11\u00a0867 | -5\u00a0986 |
Fair value changes | 5\u00a0882 | -2\u00a0367 |
As at 31 December | -5\u00a0986 | -8\u00a0353 |
Of which | ||
Investment in Shougang Concord Century Holdings Ltd | -6\u00a0078 | -9\u00a0228 |
Other investments | 92 | 876 |
The revaluation of the investment in Shougang Concord Century Holdings Ltd is based on the closing price of the share on the Hong Kong Stock Exchange. See also note 6.6. \u2018Other non-current assets\u2019.
Remeasurement reserve for defined-benefit plans | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -63\u00a0543 | -16\u00a0790 |
Remeasurements of the period | 46\u00a0753 | 4\u00a0024 |
Equity reclassification | \u2014 | 107 |
As at 31 December | -16\u00a0790 | -12\u00a0660 |
The remeasurements originate from using different actuarial assumptions in calculating the defined-benefit obligation, from differences with actual returns on plan assets at the balance sheet date and any changes in unrecognized assets due to the asset ceiling principle (see note 6.16. \u2018Employee benefit obligations\u2019).
Deferred tax reserve | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 26\u00a0785 | 23\u00a0464 |
Deferred taxes relating to other comprehensive income | -3\u00a0321 | -5\u00a0083 |
As at 31 December | 23\u00a0464 | 18\u00a0381 |
Deferred taxes relating to other comprehensive income are also recognized in OCI (see note 6.7. \u2018Deferred tax assets and liabilities\u2019).
Cumulative translation adjustments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -227\u00a0823 | -137\u00a0127 |
Exchange differences on dividends declared | -2\u00a0463 | 13\u00a0250 |
Recycled to income statement - relating to disposed entities or step acquisitions | 1\u00a0270 | \u2014 |
Movements arising from exchange rate fluctuations\u00b2 | 91\u00a0888 | 30\u00a0057 |
As at 31 December | -137\u00a0127 | -93\u00a0820 |
Of which relating to entities with following functional currencies | ||
Chinese renminbi | 145\u00a0149 | 133\u00a0695 |
US dollar | 30\u00a0558 | 54\u00a0214 |
Brazilian real | -218\u00a0372 | -191\u00a0871 |
Chilean peso | -28\u00a0753 | -22\u00a0760 |
Venezuelan bolivar soberano \u00b9 | -59\u00a0691 | -59\u00a0691 |
Indian rupee | -7\u00a0625 | -10\u00a0725 |
Czech koruna | 11\u00a0291 | 12\u00a0711 |
British pound | 2\u00a0115 | -9\u00a0931 |
Russian ruble | -6\u00a0463 | -208 |
Romenian leu | -3\u00a0991 | -4\u00a0002 |
Other currencies | -1\u00a0345 | 4\u00a0748 |
\u00b9 As a consequence of the functional currency switch to the US dollar on 1 January 2019, the value related to Venezuelan bolivar soberano remains frozen
2 See note 2.8 'Restatement effects'.
The swings in CTA reflected both the exchange rate evolution and the relative importance of the net assets denominated in the presented currencies.
Treasury shares | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -106\u00a0148 | -95\u00a0517 |
Shares purchased | -11\u00a0570 | -125\u00a0905 |
Shares sold | 28\u00a0988 | 35\u00a0707 |
Price difference on shares sold | -6\u00a0787 | -5\u00a0172 |
Cancellations | \u2014 | 51\u00a0573 |
As at 31 December | -95\u00a0517 | -139\u00a0314 |
The number of shares on hand were sufficient, both to anticipate any dilution and to hedge the cash flow risk on share-based payment plans. In 2022 a total of 3 749 238 additional shares were bought back including the transactions exercised under the liquidity agreement with Kepler Cheuvreux (2021: 309 242). A total of 1 449 409 were cancelled. A total of 1\u00a0064\u00a0800 treasury shares were sold to the beneficiaries of the share-based payment plans of the Group and under the liquidity agreement with Kepler Cheuvreux (2021: 973 330). Treasury shares are accounted for using the FIFO principle (first-in, first-out). Gains and losses on disposals of treasury shares are directly recognized through retained earnings (see movements in retained earnings below). See also note 6.13. \u2018Ordinary shares, treasury shares and equity-settled share-based payments\u2019.
Retained earnings | |||
in thousands of \u20ac | Notes | 2021 | 2022 |
As at 1 January (as reported) | 1\u00a0614\u00a0781 | 1\u00a0981\u00a0876 | |
Equity-settled share-based payments | \u2014 | 15\u00a0261 | -6\u00a0813 |
Result for the period attributable to equity holders of Bekaert\u00b9 | 404\u00a0062 | 268\u00a0859 | |
Dividends | -56\u00a0795 | -86\u00a0463 | |
Equity reclassification | \u2014 | -107 | |
Treasury shares transactions | 6.13 | 6\u00a0787 | -42\u00a0136 |
Changes in Group structure | -2\u00a0220 | \u2014 | |
As at 31 December | 1\u00a0981\u00a0876 | 2\u00a0115\u00a0216 |
\u00b9 See note 2.8 'Restatement effects'
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 87\u00a0175 | 130\u00a0971 |
Changes in Group structure | 3\u00a0601 | \u2014 |
Share of the result for the period | 43\u00a0643 | 20\u00a0457 |
Share of other comprehensive income excluding CTA | 422 | -396 |
Dividend pay-out | -6\u00a0649 | -19\u00a0763 |
Capital increases | 3\u00a0975 | \u2014 |
Exchange gains and losses (-) | -1\u00a0196 | 5\u00a0581 |
As at 31 December | 130\u00a0971 | 136\u00a0850 |
The changes in Group structure and the Capital Increase in 2021 mainly related to the merger of Proalco SAS (subsidiary of Bekaert) with the steel wire activities of Almasa SA, both located in Colombia.
The share in the result of the period for entities in which NCI are held, deteriorated significantly. The main contributing entities were located in Chile and Peru.
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on subsidiaries that have non-controlling interests that are material to the Group. The objective of IFRS 12 is to require an entity to disclose information that enables users of its financial statements to evaluate (a) the nature and risks associated with its interests in other entities, and (b) the effects of those interests on its financial position, financial performance and cash flows. Bekaert has many partnerships across the world, most entities of which would not individually meet any reasonable materiality criterion. Therefore, the Group has identified two non-wholly owned groups of entities which are interconnected through their line of business and shareholder structure: (1) the '\u2019Steel Wire Solutions\u2019 entities (SWS entities) in Chile and Peru, where the non-controlling interests are mainly held by the Chilean partners, and (2) the SWS entities in the Andina region, where the non-controlling interests are mainly held by the Ecuadorian Kohn family and ArcelorMittal. In presenting aggregated information for these entity groups, only intercompany effects within each entity group have been eliminated, while all other entities of the Group have been treated as third parties.
Proportion of NCI at year-end | |||
Entities included in material NCI disclosure | Country | 2021 | 2022 |
BBRG entities | |||
Procables SA | Peru | 3.9% | 3.9% |
SWS entities Chile and Peru | |||
Acma SA | Chile | 48.0% | 48.0% |
Acmanet SA | Chile | 48.0% | 48.0% |
Industrias Acmanet Ltda | Chile | 48.0% | 48.0% |
Industrias Chilenas de Alambre - Inchalam SA | Chile | 48.0% | 48.0% |
Sujetar del Peru SAC | Peru | 0.0% | 62.5% |
Procercos SA | Chile | 48.0% | 48.0% |
Prodalam SA | Chile | 48.0% | 48.0% |
Prodicom Selva SAC | Peru | 62.5% | 62.5% |
Prodimin SAC | Peru | 62.5% | 62.5% |
Prodac Contrata SAC | Peru | 62.5% | 62.5% |
Productos de Acero Cassad\u00f3 SA | Peru | 62.5% | 62.5% |
SWS entities Andina region | |||
Agro-Bekaert Colombia SAS | Colombia | 60.0% | 60.0% |
Agro - Bekaert Springs, SL | Spain | 60.0% | 60.0% |
Bekaert Ideal SL | Spain | 20.0% | 20.0% |
Bekaert Guatemala SA | Guatemala | 41.6% | 41.6% |
Servicios Ideal AGF Inttegra Cia. Ltda | Ecuador | 70.8% | 70.8% |
BIA Alambres Costa Rica SA | Costa Rica | 41.6% | 41.6% |
Ideal Alambrec SA | Ecuador | 41.6% | 41.6% |
InverVicson SA | Venezuela | 20.0% | 20.0% |
Productora de Alambres Colombianos Proalco SAS | Colombia | 60.0% | 60.0% |
Vicson SA | Venezuela | 20.0% | 20.0% |
The principal activity of the main entities listed above is manufacturing and selling wire and other wire products, mainly for the local market. Following entities are essentially holdings, having interests in one or more of the other entities listed above: Industrias Acmanet Ltda, Procercos SA, Bekaert Ideal SL and Agro - Bekaert Springs SL. The following table shows the relative importance of the entity groups with material NCI in terms of results and equity attributable to NCI.
Material and other NCI | Result attributable to NCI | Equity attributable to NCI | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
SWS entities Chile and Peru | 35\u00a0633 | 15\u00a0733 | 100\u00a0872 | 105\u00a0814 |
SWS entities Andina region | 6\u00a0075 | 2\u00a0711 | 21\u00a0858 | 22\u00a0421 |
Consolidation adjustments on material NCI | -651 | 228 | -27\u00a0573 | -27\u00a0316 |
Contribution of material NCI to consolidated NCI | 41\u00a0057 | 18\u00a0672 | 95\u00a0157 | 100\u00a0919 |
Other NCI | 2\u00a0586 | 1\u00a0785 | 35\u00a0814 | 35\u00a0931 |
Total consolidated NCI | 43\u00a0643 | 20\u00a0457 | 130\u00a0971 | 136\u00a0850 |
The following tables show concise basic statements of the non-wholly owned groups of entities.
SWS entities Chile and Peru | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 382\u00a0128 | 339\u00a0103 |
Non-current assets | 119\u00a0973 | 130\u00a0920 |
Current liabilities | 247\u00a0022 | 224\u00a0591 |
Non-current liabilities | 60\u00a0402 | 42\u00a0767 |
Equity attributable to equity holders of Bekaert | 93\u00a0805 | 96\u00a0852 |
Equity attributable to NCI | 100\u00a0872 | 105\u00a0814 |
SWS entities Chile and Peru | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 689\u00a0790 | 681\u00a0733 |
Expenses | -619\u00a0952 | -650\u00a0307 |
Result for the period | 69\u00a0838 | 31\u00a0426 |
Result for the period attributable to equity holders of Bekaert | 34\u00a0205 | 15\u00a0693 |
Result for the period attributable to NCI | 35\u00a0633 | 15\u00a0733 |
Other comprehensive income for the period | -8\u00a0946 | 11\u00a0354 |
OCI attributable to equity holders of Bekaert | -5\u00a0302 | 5\u00a0512 |
OCI attributable to NCI | -3\u00a0644 | 5\u00a0842 |
Total comprehensive income for the period | 60\u00a0892 | 42\u00a0780 |
Total comprehensive income attributable to equity holders of Bekaert | 28\u00a0903 | 21\u00a0205 |
Total comprehensive income attributable to NCI | 31\u00a0989 | 21\u00a0575 |
Dividends paid to NCI | -3\u00a0475 | -17\u00a0588 |
Net cash inflow (outflow) from operating activities | -4\u00a0351 | 9\u00a0166 |
Net cash inflow (outflow) from investing activities | -8\u00a0402 | -13\u00a0344 |
Net cash inflow (outflow) from financing activities | 22\u00a0430 | -26\u00a0881 |
Net cash inflow (outflow) | 9\u00a0676 | -31\u00a0059 |
The combination of a slight decrease in sales (-1.2%) and increase in expenses (+4.9%) results in worse profitability in absolute terms. As the increase in expenses was not mirrored in the sales evolution, profitability as percentage was decreased significantly (underlying EBIT margin on sales at 7.1% compared to (15.0% last year).
The strong decrease in EBITDA was amplified by the working capital evolution. As a result the Net Debt position ended per year-end much higher than last year.
SWS entities Andina region | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 150\u00a0291 | 117\u00a0430 |
Non-current assets | 52\u00a0206 | 51\u00a0291 |
Current liabilities | 143\u00a0778 | 111\u00a0249 |
Non-current liabilities | 11\u00a0067 | 10\u00a0028 |
Equity attributable to equity holders of Bekaert | 25\u00a0795 | 25\u00a0023 |
Equity attributable to NCI | 21\u00a0858 | 22\u00a0421 |
SWS entities Andina region | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 237\u00a0878 | 276\u00a0074 |
Expenses | -224\u00a0404 | -270\u00a0266 |
Result for the period | 13\u00a0473 | 5\u00a0808 |
Result for the period attributable to equity holders of Bekaert | 7\u00a0398 | 3\u00a0098 |
Result for the period attributable to NCI | 6\u00a0075 | 2\u00a0711 |
Other comprehensive income for the period | -254 | 864 |
OCI attributable to equity holders of Bekaert | -203 | 893 |
OCI attributable to NCI | -51 | -29 |
Total comprehensive income for the period | 13\u00a0220 | 6\u00a0673 |
Total comprehensive income attributable to equity holders of Bekaert | 7\u00a0196 | 3\u00a0991 |
Total comprehensive income attributable to NCI | 6\u00a0024 | 2\u00a0682 |
Dividends paid to NCI | -3\u00a0137 | -2\u00a0078 |
Net cash inflow (outflow) from operating activities | 28\u00a0707 | -32\u00a0320 |
Net cash inflow (outflow) from investing activities | -4\u00a0940 | -5\u00a0829 |
Net cash inflow (outflow) from financing activities | -13\u00a0089 | 26\u00a0195 |
Net cash inflow (outflow) | 10\u00a0678 | -11\u00a0954 |
The total net liabilities for employee benefit obligations, which amounted to \u20ac\u00a0197.9\u00a0million as at 31 December 2022 (\u20ac\u00a0233.3\u00a0million as at year-end 2021), are as follows:
in thousands of \u20ac | 2021 | 2022 |
Liabilities for | ||
Post-employment defined-benefit plans \u00b9 | 69\u00a0675 | 65\u00a0960 |
Other long-term employee benefits | 4\u00a0821 | 4\u00a0783 |
Cash-settled share-based payment employee benefits | 7\u00a0150 | 6\u00a0042 |
Short-term employee benefits | 160\u00a0699 | 122\u00a0300 |
Termination benefits | 10\u00a0786 | 11\u00a0019 |
Total liabilities in the balance sheet | 253\u00a0130 | 210\u00a0104 |
of which | ||
Non-current liabilities \u00b9 | 75\u00a0971 | 68\u00a0037 |
Current liabilities | 177\u00a0159 | 142\u00a0068 |
Assets for | ||
Defined-benefit pension plans | -19\u00a0847 | -12\u00a0243 |
Total assets in the balance sheet | -19\u00a0847 | -12\u00a0243 |
Total net liabilities | 233\u00a0283 | 197\u00a0862 |
Defined-contribution plans
For defined-contribution plans, Bekaert pays contributions to publicly or privately administered pension funds or insurance companies. Once the contributions have been paid, the Group has no further payment obligation. These contributions constitute an expense for the year in which they are due.
The Belgian defined-contribution pension plans are by law subject to minimum guaranteed rates of return. Pension legislation defines the minimum guaranteed rate of return as a variable percentage linked to government bond yields observed in the market as from 1 January 2016 onwards. As of 2016 the minimum guaranteed rate of return became 1.75% on both employer contributions and employee contributions. The old rates (3.25% on employer contributions and 3.75% on employee contributions) continue to apply to the accumulated past contributions in the group insurance as at 31 December 2015. As a consequence, the defined-contribution plans are reported as defined-benefit obligations at year-end, whereby an actuarial valuation was performed.
in thousands of \u20ac | 2021 | 2022 |
Expenses recognized | 14\u00a0420 | 15\u00a0417 |
Several Bekaert companies operate retirement benefit and other post-employment benefit plans. These plans generally cover all employees and provide benefits which are related to salary and length of service.
The latest actuarial valuations under IAS 19 were carried out as of 31\u00a0December\u00a02022 for all significant post-employment defined-benefit plans by independent actuaries. The Group\u2019s largest defined-benefit obligations were in Belgium, the United States and the United Kingdom. They accounted for 85.9% (2021:\u00a090.3%) of the Group\u2019s defined-benefit obligations and 99.5% (2021:\u00a099.6%) of the Group\u2019s plan assets.
Plans in Belgium
The funded plans in Belgium mainly related to retirement plans representing a defined-benefit obligation of \u20ac\u00a0173.5\u00a0million (2021:\u00a0\u20ac 216.5\u00a0million) and \u20ac\u00a0182.9\u00a0million assets (2021:\u00a0\u20ac\u00a0213.4\u00a0million). This is including the related plans funded through a group insurance.
The traditional defined-benefit plans foresee in a lump sum payment upon retirement and in risk benefits in case of death or disability prior to retirement. The plans are externally funded through two self-administrated institutions for occupational retirement provision (IORP). On a regular basis, an Asset Liability Matching (ALM) study is performed in which the consequences of strategic investment policies are analyzed in terms of risk-and-return profiles. Statement of investment principles and funding policy are derived from this study. The purpose is to have a well-diversified asset allocation to control the risk. Investment risk and liability risk are monitored on a quarterly basis. Funding policy targets to be at least fully funded in terms of the technical provision (this is a prudent estimate of the pension liabilities).
Other plans mainly related to pre-retirement pensions (defined-benefit obligation \u20ac\u00a06.3\u00a0million (2021:\u00a0\u20ac\u00a08.0\u00a0million)) which are not externally funded. An amount of \u20ac\u00a03.8\u00a0million (2021:\u00a0\u20ac\u00a04.6\u00a0million) related to employees in active service who have not yet entered into any pre-retirement agreement.
Plans in the United States
The funded plans in the United States mainly related to pension plans representing a defined-benefit obligation of \u20ac\u00a0102.8\u00a0million (2021:\u00a0\u20ac\u00a0128.1\u00a0million) and assets of \u20ac\u00a099.1\u00a0million (2021:\u00a0\u20ac\u00a0124.4 million). The plans provide for benefits for the life of the plan members but have been closed for new entrants. Plan assets are invested, in fixed-income funds and in equities. Funding policy targets to be sufficiently funded in terms of Pension Protection Act requirements and thus to avoid benefit restrictions or at-risk status of the plans.
Unfunded plans included medical care plans (defined-benefit obligation \u20ac\u00a02.0\u00a0million (2021:\u00a0\u20ac\u00a02.4\u00a0million)).
Plans in the United Kingdom
The funded plan in the United Kingdom related to a pension scheme closed for new entrants and further accrual representing a defined-benefit obligation of \u20ac\u00a052.5\u00a0million (2021:\u00a0\u20ac\u00a093.6\u00a0million) and assets of \u20ac\u00a059.9\u00a0million (2021:\u00a0\u20ac\u00a0113.5\u00a0million). The scheme is administrated by a separate board of Trustees which is legally separate from the company. The Trustees are composed of representatives of both employer and employees. The Trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits.
The defined-benefit obligation solely includes benefits for deferred vested members (members whose employment has terminated and have not yet reached the eligible retirement age for drawing a pension) and pensioners (members who are already receiving pension as they have reached the eligible retirement age). Broadly, about 72% of the liabilities are attributable to deferred vested members and 28% to pensioners (2021:\u00a030%\u00a0pensioners).
UK legislation requires that pension schemes are funded prudently. The funding valuation of the scheme carried out as at 31 December 2019 by a qualified actuary showed a surplus of \u20ac\u00a07.4\u00a0million. As a consequence, the company is not required to pay contributions into the scheme. Administration costs are reported separately from IAS 19.
The amounts recognized in the balance sheet are as follows:
in thousands of \u20ac | 2021 | 2022 |
Belgium | ||
Present value of funded obligations | 216\u00a0562 | 173\u00a0519 |
Fair value of plan assets | -213\u00a0440 | -182\u00a0880 |
Deficit / surplus (-) of funded obligations | 3\u00a0122 | -9\u00a0361 |
Present value of unfunded obligations | 7\u00a0994 | 6\u00a0264 |
Total deficit / surplus (-) of obligations | 11\u00a0116 | -3\u00a0097 |
United States | ||
Present value of funded obligations | 128\u00a0125 | 102\u00a0803 |
Fair value of plan assets | -124\u00a0372 | -99\u00a0106 |
Deficit / surplus (-) of funded obligations | 3\u00a0753 | 3\u00a0697 |
Present value of unfunded obligations | 7\u00a0556 | 6\u00a0207 |
Total deficit / surplus (-) of obligations | 11\u00a0309 | 9\u00a0904 |
United Kingdom | ||
Present value of funded obligations | 93\u00a0635 | 52\u00a0464 |
Fair value of plan assets | -113\u00a0482 | -59\u00a0908 |
Deficit / surplus (-) of funded obligations | -19\u00a0847 | -7\u00a0444 |
Present value of unfunded obligations | \u2014 | \u2014 |
Total deficit / surplus (-) of obligations | -19\u00a0847 | -7\u00a0444 |
Other | ||
Present value of funded obligations | 2\u00a0545 | 3\u00a0103 |
Fair value of plan assets | -1\u00a0615 | -1\u00a0830 |
Deficit / surplus (-) of funded obligations | 930 | 1\u00a0273 |
Present value of unfunded obligations \u00b9 | 46\u00a0320 | 53\u00a0081 |
Total deficit / surplus (-) of obligations | 47\u00a0250 | 54\u00a0354 |
Total | ||
Present value of funded obligations | 440\u00a0867 | 331\u00a0889 |
Fair value of plan assets | -452\u00a0909 | -343\u00a0724 |
Deficit / surplus (-) of funded obligations | -12\u00a0042 | -11\u00a0835 |
Present value of unfunded obligations \u00b9 | 61\u00a0870 | 65\u00a0552 |
Total deficit / surplus (-) of obligations | 49\u00a0828 | 53\u00a0717 |
\u00b9 See note 2.8. 'Restatement effects'.
Liabilities at year end 2021 have been restated for Indonesia and reflect the impact of the May 2021 IFRIC agenda decision on the attribution of benefits to periods of service. This has resulted in a \u20ac\u00a01.7\u00a0million decrease of the defined-benefit obligation which has been reflected as a negative past service cost in restated 2021 numbers reported in the table below.
The movement in the defined-benefit obligation, plan assets, net liability and asset over the year were as follows.
in thousands of \u20ac | Defined-benefit obligation | Plan assets | Net liability / |
As at 1 January 2021 | 522\u00a0889 | -422\u00a0079 | 100\u00a0810 |
Current service cost | 17\u00a0424 | \u2014 | 17\u00a0424 |
Past service cost \u00b9 | -1\u00a0869 | \u2014 | -1\u00a0869 |
Gains (-) / losses from settlements | -87 | \u2014 | -87 |
Interest expense / income (-) | 7\u00a0384 | -5\u00a0500 | 1\u00a0884 |
Net benefit expense / income (-) recognized in profit and loss | 22\u00a0853 | -5\u00a0500 | 17\u00a0353 |
Components recognized in EBIT | 15\u00a0469 | ||
Components recognized in financial result | 1\u00a0884 | ||
Remeasurements | |||
Return on plan assets, excluding amounts included in interest expense / income (-) | \u2014 | -21\u00a0127 | -21\u00a0127 |
Gain (-) / loss from change in demographic assumptions | -1\u00a0622 | \u2014 | -1\u00a0622 |
Gain (-) / loss from change in financial assumptions | -28\u00a0439 | \u2014 | -28\u00a0439 |
Experience gains (-) / losses | 3\u00a0836 | \u2014 | 3\u00a0836 |
Changes recognized in equity | -26\u00a0224 | -21\u00a0127 | -47\u00a0351 |
Contributions | |||
Employer contributions / direct benefit payments | \u2014 | -19\u00a0430 | -19\u00a0430 |
Employee contributions | 148 | -148 | \u2014 |
Payments from plans | |||
Benefit payments | -32\u00a0275 | 32\u00a0275 | \u2014 |
Foreign-currency translation effect \u00b9 | 15\u00a0346 | -16\u00a0900 | -1\u00a0554 |
As at 31 December 2021 | 502\u00a0737 | -452\u00a0909 | 49\u00a0828 |
\u00b9 See note 2.8. 'Restatement effects'.
in thousands of \u20ac | Defined-benefit obligation | Plan assets | Net liability / |
As at 1 January 2022 | 502\u00a0737 | -452\u00a0909 | 49\u00a0828 |
Current service cost | 16\u00a0125 | \u2014 | 16\u00a0125 |
Past service cost | 54 | \u2014 | 54 |
Gains (-) / losses from settlements | 502 | \u2014 | 502 |
Interest expense / income (-) | 9\u00a0822 | -7\u00a0928 | 1\u00a0894 |
Net benefit expense / income (-) recognized in profit and loss | 26\u00a0503 | -7\u00a0928 | 18\u00a0575 |
Components recognized in EBIT | 16\u00a0681 | ||
Components recognized in financial result | 1\u00a0894 | ||
Remeasurements | |||
Return on plan assets, excluding amounts included in interest expense / income (-) | \u2014 | 97\u00a0349 | 97\u00a0349 |
Gain (-) / loss from change in demographic assumptions | 1\u00a0903 | \u2014 | 1\u00a0903 |
Gain (-) / loss from change in financial assumptions | -119\u00a0037 | \u2014 | -119\u00a0037 |
Experience gains (-) / losses | 16\u00a0392 | \u2014 | 16\u00a0392 |
Changes recognized in equity | -100\u00a0742 | 97\u00a0349 | -3\u00a0393 |
Contributions | |||
Employer contributions / direct benefit payments | \u2014 | -11\u00a0933 | -11\u00a0933 |
Employee contributions | 130 | -130 | \u2014 |
Payments from plans | |||
Benefit payments | -35\u00a0786 | 35\u00a0786 | \u2014 |
Foreign-currency translation effect | 4\u00a0599 | -3\u00a0959 | 640 |
As at 31 December 2022 | 397\u00a0441 | -343\u00a0724 | 53\u00a0717 |
Gains and losses from settlements in 2022 mainly related to restructurings in Ecuador (\u20ac\u00a00.4\u00a0million\u00a0gain), Indonesia (\u20ac\u00a00.9\u00a0million\u00a0loss). The past service cost related to recognition of past service in Turkey upon permanent recruitment of temporary workforce. In the income statement, current and past service cost, including gains or losses from settlements are included in the operating result (EBIT), and interest expense or income is included in interest expense, under interest element of interest-bearing provisions.
Changes recognized in equity amounted in 2022 to \u20ac -3.4\u00a0million and were driven by \u20ac\u00a097.3 million loss on plan assets reflecting negative asset return, offset by \u20ac\u00a0100.7 million gains in defined benefit obligation. The latter can be broken down into \u20ac 119.0 million gains due to changes in financial assumptions reflecting increased discount rates and increased inflation assumptions, \u20ac\u00a01.9 million losses due to changes in demographic assumptions and \u20ac\u00a016.4\u00a0million losses in liabilities due to experience.
Reimbursement rights arising from reinsurance contracts covering retirement pensions, death and disability benefits in Germany amounted to less than \u20ac\u00a00.1\u00a0million (2021:\u00a0\u20ac\u00a00.1 million).
Estimated contributions and direct benefit payments for 2023 are as follows:
Estimated contributions and direct benefit payments | |
in thousands of \u20ac | 2023 |
Pension plans | 18\u00a0141 |
Fair values of plan assets at 31 December were as follows:
in thousands of \u20ac | 2021 | 2022 |
Belgium | ||
Bonds | 55\u00a0905 | 53\u00a0018 |
Equity | 94\u00a0366 | 69\u00a0047 |
Cash | 4\u00a0077 | 3\u00a0000 |
Insurance contracts | 59\u00a0092 | 57\u00a0815 |
Total Belgium | 213\u00a0440 | 182\u00a0880 |
United States | ||
Bonds | ||
USD Long Duration Bonds | 36\u00a0617 | 29\u00a0060 |
USD Fixed Income | 5\u00a0842 | 4\u00a0817 |
USD Guaranteed Deposit | 4\u00a0437 | 4\u00a0235 |
Equity | ||
USD Equity | 49\u00a0690 | 38\u00a0372 |
Non-USD Equity | 20\u00a0317 | 17\u00a0970 |
Real estate | 7\u00a0470 | 4\u00a0652 |
Total United States | 124\u00a0372 | 99\u00a0106 |
United Kingdom | ||
Bonds | 35\u00a0480 | 16\u00a0009 |
Derivatives | 62\u00a0806 | 37\u00a0015 |
Equity | 13\u00a0850 | 5\u00a0677 |
Cash | 1\u00a0346 | 1\u00a0207 |
Total United Kingdom | 113\u00a0482 | 59\u00a0908 |
Other | ||
Bonds | 1\u00a0614 | 1\u00a0830 |
Total Other | 1\u00a0614 | 1\u00a0830 |
Total | 452\u00a0909 | 343\u00a0724 |
In the USA, investments are primarily made through mutual fund investments and insurance company separate accounts, in quoted equity and debt instruments. In Belgium, the investments are made through mutual fund investments in quoted equity and debt instruments. Investments are well-diversified so that the failure of any single investment would not have a material impact on the overall level of assets. In UK a large proportion of assets is invested in liability driven investments and bonds.
The Group\u2019s plan assets include no direct positions in Bekaert shares or bonds, nor do they include any property used by a Bekaert entity.
The principal actuarial assumptions on the balance sheet date (weighted averages based on outstanding DBO) were:
Actuarial assumptions | 2021 | 2022 |
Discount rate | 2.0% | 4.7% |
Future salary increases | 3.3% | 3.7% |
Underlying inflation rate | 2.3% | 2.8% |
Health care cost increases (initial) | 6.5% | 7.5% |
Health care cost increases (ultimate) | 5.0% | 5.0% |
Health care (years to ultimate rate) | 6 | 10 |
The discount rate for the UK, USA and Belgium is reflective both of the current interest rate environment and the plan\u2019s distinct liability characteristics. The plan\u2019s projected cash flows are matched to spot rates, after which an associated present value is developed. A single equivalent discount rate is then determined that produces that same present value. The underlying yield curve for deriving spot rates is based on high quality AA-credit rated corporate bonds issues denominated in the currency of the applicable regional market.
This resulted into the following discount rates:
Discount rates | 2021 | 2022 |
Belgium | 1.0% | 3.8% |
United States | 2.8% | 5.3% |
United Kingdom | 1.9% | 5.0% |
Other | 4.7% | 6.3% |
This resulted into the following inflation rates:
Inflation rates | 2021 | 2022 |
Belgium | 1.8% | 2.2% |
United States | N/A | N/A |
United Kingdom | 3.3% | 3.3% |
Other | 2.9% | 4.8% |
Total | 2.3% | 2.8% |
Assumptions regarding future mortality are based on actuarial advice in accordance with published statistics and experience in each territory. These assumptions translated into the following average life expectancy in years for a pensioner retiring at age 65.
2021 | 2022 | |
Life expectancy of a man aged 65 (years) at balance sheet date | 20.2 | 20.2 |
Life expectancy of a woman aged 65 (years) at balance sheet date | 22.6 | 22.7 |
Life expectancy of a man aged 65 (years) ten years after balance sheet date | 20.9 | 20.9 |
Life expectancy of a woman aged 65 (years) ten years after balance sheet date | 23.4 | 23.4 |
Sensitivity analyses show the following effects:
Sensitivity analysis | ||||
in thousands of \u20ac | Change in assumption | Impact on defined-benefit obligation | ||
Discount rate | -0.50% | Increase by | 17\u00a0354 | 4.4% |
Salary growth rate | 0.50% | Increase by | 4\u00a0007 | 1.0% |
Health care cost | 0.50% | Increase by | 83 | 0.02% |
Life expectancy | 1 year | Increase by | 4\u00a0616 | 1.2% |
The above analyses were done on a mutually exclusive basis, while holding all other assumptions constant.
Through its defined-benefit plans, the Group is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility | The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets underperform this yield, this will create a deficit. |
Changes in bond yields | A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans\u2019 bond holdings. |
Salary risk | The majority of the plans\u2019 benefit obligations are calculated by reference to the future salaries of plan members. As such, a salary increase of plan members higher than expected will lead to higher liabilities. |
Longevity risk | Belgian pension plans provide for lump sum payments upon retirement. As such, there is limited or no longevity risk. Pension plans in the USA and UK provide for benefits for the life of the plan members, so increases in life expectancy will result in an increase in the plans\u2019 liabilities. |
The weighted average durations of the defined-benefit obligations were as follows:
Weighted average durations of the DBO | ||
in years | 2021 | 2022 |
Belgium | 12.5 | 10.0 |
United States | 11.5 | 9.5 |
United Kingdom | 20.0 | 16.5 |
Other | 10.3 | 9.7 |
Total | 13.4 | 10.7 |
Termination benefits
Termination benefits are cash and other services paid to employees when their employment has been terminated.
Other long-term employee benefits
Stock appreciation rights (\u2018SAR\u2019)
The Group issues stock appreciation rights (SARs) for certain management employees, granting them the right to receive the intrinsic value of the SARs at the date of exercise. These SARs are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant is recalculated at balance sheet date, using a binomial pricing model. Based on local regulations, the exercise price for any grant under the USA SAR plan is equal to the average closing price of the Company\u2019s share during the thirty days following the date of the offer. The exercise price for the other SAR plans is determined in the same way as for the equity-settled stock option plans: it is equal to the lower of (i) the average closing price of the Company\u2019s share during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer.
Following inputs to the model are used for all grants: share price at balance sheet date: \u20ac 36.28 (2021: \u20ac 39.14), expected volatility in a range between 31% and 37% (2021: 34%), expected dividend yield in a range between 4.3% and 4.6% (2021: 3.0%), vesting period of 3\u00a0years and a contractual life of 10\u00a0years. Inputs for risk-free interest rates vary by grant and are based on the return of Belgian OLO\u2019s (Obligation Lin\u00e9aire / Lineaire Obligatie) with a term equal to the maturity of the SAR grant under consideration.
Exercise prices and fair values of outstanding SARs by grant are shown below:
USA SAR Plan details by grant | ||||
in \u20ac | Granted | Exercise price | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2013 | 20\u00a0900 | 22.09 | 17.04 | \u2014 |
Grant 2014 | 36\u00a0800 | 25.66 | 13.72 | 11.17 |
Grant 2015 | 40\u00a0200 | 25.45 | 13.99 | 11.68 |
Grant 2016 | 20\u00a0250 | 28.38 | 11.91 | 11.33 |
Grant 2017 | 26\u00a0375 | 38.86 | 7.88 | 7.35 |
Grant 2018 | 16\u00a0875 | 37.06 | 8.76 | 8.95 |
Other SAR Plans details by grant | ||||
in \u20ac | Granted | Exercise price | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2013 | 24\u00a0500 | 19.20 | 19.92 | \u2014 |
Exceptional grant 2013 | 10\u00a0000 | 21.45 | 17.69 | \u2014 |
Grant 2014 | 54\u00a0800 | 25.38 | 13.96 | 11.39 |
Grant 2015 | 44\u00a0700 | 26.06 | 13.42 | 11.24 |
Grant 2016 | 38\u00a0500 | 26.38 | 13.33 | 12.42 |
Grant 2017 | 53\u00a0000 | 39.43 | 7.85 | 7.35 |
Grant 2018 | 37\u00a0500 | 34.60 | 9.48 | 9.74 |
At 31 December 2022, the total liability for the USA SAR plan amounted to \u20ac 0.3 million (2021: \u20ac 0.4 million), while the total liability for the other SAR plans amounted to \u20ac 0.5 million (2021: \u20ac 0.5 million).
The Group recorded a total income of \u20ac\u00a00.1\u00a0million (2021: income of \u20ac\u00a00.0\u00a0million) during the year in respect of SARs.
Performance Share Units (\u2018PSU\u2019)
Certain management employees received cash-settled Performance Share Units (PSUs) entitling the beneficiary to receive the value of Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and during 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy, and can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the performance target is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment.
These Performance Share Units are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant under PSU 2018-2020 and under PSU 2022-2024 is equal to the share price at balance sheet date, since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow).
The fair value of outstanding Performance Share Units by grant is shown below:
Performance Share Units details by grant | |||
in \u20ac | Granted | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2020 | 45\u00a0141 | 39.14 | 36.28 |
Grant 2020 | 444 | 39.14 | 36.28 |
Grant 2021 | 4\u00a0567 | 39.14 | 36.28 |
Grant 2022 | 24\u00a0832 | \u2014 | 36.28 |
At 31 December 2022, the total liability for the USA PSUs amounted to \u20ac\u00a01.6\u00a0million (2021:\u00a0\u20ac\u00a01.6\u00a0million), while the total liability for the other PSUs amounted to \u20ac\u00a03.7\u00a0million (2021:\u00a0\u20ac\u00a04.8\u00a0million).
The Group recorded a total cost of \u20ac\u00a02.2\u00a0million (2021: cost of \u20ac\u00a04.8\u00a0million) during the year in respect of PSUs.
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2021 | 6\u00a0525 | 6\u00a0600 | 20\u00a0015 | 3\u00a0448 | 36\u00a0588 |
Additional provisions | 56 | 1\u00a0516 | 2\u00a0397 | 867 | 4\u00a0836 |
Unutilized amounts released | -220 | -3\u00a0309 | -591 | -1\u00a0069 | -5\u00a0188 |
Increase in present value | \u2014 | \u2014 | \u2014 | 15 | 15 |
Charged to the income statement | -164 | -1\u00a0793 | 1\u00a0807 | -187 | -337 |
Amounts utilized during the year | -5\u00a0661 | -1\u00a0930 | -858 | -388 | -8\u00a0837 |
Exchange gains (-) and losses | 3 | 186 | 89 | 11 | 289 |
As at 31 December 2021 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Of which | |||||
current | 703 | 1\u00a0987 | 635 | 1\u00a0066 | 4\u00a0392 |
non-current - between 1 and 5 years | \u2014 | 1\u00a0075 | 9\u00a0008 | 1\u00a0250 | 11\u00a0333 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 568 | 11\u00a0978 |
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2022 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Additional provisions | 123 | 5\u00a0163 | 1\u00a0225 | 6\u00a0764 | 13\u00a0275 |
Unutilized amounts released | -117 | -1\u00a0681 | -539 | -836 | -3\u00a0173 |
Increase in present value | \u2014 | \u2014 | \u2014 | 13 | 13 |
Charged to the income statement | 6 | 3\u00a0482 | 686 | 5\u00a0941 | 10\u00a0116 |
Amounts utilized during the year | -680 | -942 | -1\u00a0718 | -484 | -3\u00a0824 |
Exchange gains (-) and losses | 1 | -37 | 32 | 89 | 85 |
As at 31 December 2022 | 30 | 5\u00a0565 | 20\u00a0053 | 8\u00a0430 | 34\u00a0079 |
Of which | |||||
current | 30 | 2\u00a0345 | 415 | 3\u00a0364 | 6\u00a0154 |
non-current - between 1 and 5 years | \u2014 | 3\u00a0221 | 8\u00a0228 | 4\u00a0398 | 15\u00a0847 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 667 | 12\u00a0077 |
Provisions for claims mainly related to product warranty programs and various product quality claims in several entities.
The environmental provisions mainly related to sites in EMEA. The expected soil sanitation costs are reviewed at each balance sheet date, based on external expert assessments. Timing of settlement is uncertain as it is often triggered by decisions on the destination of the premises. The increase in the environmental provisions mainly relate to a new provision linked to the disposal of the Figline plant, martially offset by the utilization and release of environmental provisions linked to sites in Belgium and UK.\u00a0
An analysis of the carrying amount of the Group\u2019s interest-bearing debt by contractual maturity is presented below:
2021 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0219 | 36\u00a0837 | 19\u00a0588 | 76\u00a0644 |
Cash guarantees received | \u2014 | 84 | 120 | 204 |
Credit institutions | 217\u00a0523 | 177\u00a0047 | \u2014 | 394\u00a0571 |
Schuldschein loans | \u2014 | 298\u00a0964 | 20\u00a0941 | 319\u00a0905 |
Bonds | \u2014 | 200\u00a0000 | 200\u00a0000 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 |
Total financial debt | 237\u00a0742 | 712\u00a0932 | 240\u00a0649 | 1\u00a0191\u00a0324 |
2022 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0002 | 36\u00a0872 | 20\u00a0331 | 77\u00a0205 |
Cash guarantees received | \u2014 | 144 | 66 | 210 |
Credit institutions | 291\u00a0989 | 146\u00a0413 | \u2014 | 438\u00a0401 |
Schuldschein loans | 188\u00a0598 | 131\u00a0582 | \u2014 | 320\u00a0179 |
Bonds | \u2014 | 400\u00a0000 | \u2014 | 400\u00a0000 |
Total financial debt | 500\u00a0588 | 715\u00a0011 | 20\u00a0397 | 1\u00a0235\u00a0996 |
An analysis of the undiscounted outflows relating to the Group\u2019s financial liabilities by contractual maturity is presented in note 7.2.\u00a0\u2018Financial risk management and financial derivatives\u2019. The financial debt due within one year increased with \u20ac 262.8 million mainly due to repayments of the Schuldschein loans which will take place in June 2023 (\u20ac 188.6 million at amortized cost per year-end 2022).
The following table summarizes the calculation of the net debt.
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 953\u00a0581 | 735\u00a0408 |
Current interest-bearing debt | 237\u00a0742 | 500\u00a0588 |
Total financial debt | 1\u00a0191\u00a0324 | 1\u00a0235\u00a0996 |
Non-current financial receivables and cash guarantees | -10\u00a0192 | -9\u00a0665 |
Current financial receivables and cash guarantees | -6\u00a0475 | -6\u00a0352 |
Short-term deposits | -80\u00a0058 | -4\u00a0766 |
Cash and cash equivalents | -677\u00a0270 | -728\u00a0095 |
Net debt | 417\u00a0329 | 487\u00a0118 |
In accordance with the disclosure requirements of IAS 7 \u2018Statement of Cash Flows\u2019, this section presents an overview of the changes in liabilities arising from financing activities. The qualification as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash flow statement, the cash flows from long-term interest-bearing debt are analyzed between proceeds and repayments.
In 2022, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 33.5 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
In 2021, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 19.6 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019), and interest accruals from amortizations on liabilities using the effective interest method (\u20ac 4.9 million). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
2021 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 1\u00a0380\u00a0866 | -416\u00a0174 | \u2014 | 3\u00a0619 | \u2014 | 24\u00a0802 | 993\u00a0114 |
Cash guarantees received | 171 | 12 | \u2014 | 20 | \u2014 | \u2014 | 204 |
Lease liability | 80\u00a0505 | -26\u00a0290 | \u2014 | 2\u00a0805 | \u2014 | 19\u00a0624 | 76\u00a0644 |
Credit institutions | 205\u00a0463 | -9\u00a0896 | \u2014 | 794 | \u2014 | \u2014 | 196\u00a0361 |
Schuldschein loans | 319\u00a0635 | \u2014 | \u2014 | \u2014 | \u2014 | 270 | 319\u00a0905 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | 375\u00a0092 | -380\u00a0000 | \u2014 | \u2014 | \u2014 | 4\u00a0908 | \u2014 |
Short-term interest bearing debt | 228\u00a0865 | -43\u00a0328 | \u2014 | 12\u00a0672 | \u2014 | \u2014 | 198\u00a0210 |
Total financial debt | 1\u00a0609\u00a0732 | -459\u00a0501 | \u2014 | 16\u00a0291 | \u2014 | 24\u00a0802 | 1\u00a0191\u00a0324 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 1\u00a0081 | \u2014 | \u2014 | \u2014 | -964 | \u2014 | 118 |
Cross-currency interest-rate swaps | -5\u00a0030 | \u2014 | \u2014 | \u2014 | 6\u00a0675 | \u2014 | 1\u00a0645 |
Other liabilities from financing activities | |||||||
Conversion derivative | 34 | \u2014 | \u2014 | \u2014 | -34 | \u2014 | \u2014 |
Total liabilities from financing activities | 1\u00a0605\u00a0817 | -459\u00a0501 | \u2014 | 16\u00a0291 | 5\u00a0677 | 24\u00a0802 | 1\u00a0193\u00a0087 |
\u00b9\u00a0 Including the current portion of non-current interest-bearing debt of \u20ac 412.8 million as at 1 January and \u20ac 39.5 million as at 31 December.
2022 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 993\u00a0114 | -75\u00a0577 | \u2014 | 2\u00a0107 | \u2014 | 33\u00a0974 | 953\u00a0618 |
Cash guarantees received | 204 | 11 | \u2014 | -5 | \u2014 | \u2014 | 210 |
Lease liability | 76\u00a0644 | -31\u00a0704 | \u2014 | -1\u00a0434 | \u2014 | 33\u00a0699 | 77\u00a0205 |
Credit institutions | 196\u00a0361 | -43\u00a0885 | \u2014 | 3\u00a0546 | \u2014 | \u2014 | 156\u00a0023 |
Schuldschein loans | 319\u00a0905 | \u2014 | \u2014 | \u2014 | \u2014 | 275 | 320\u00a0179 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Short-term interest bearing debt | 198\u00a0210 | 67\u00a0349 | 614 | 16\u00a0205 | \u2014 | \u2014 | 282\u00a0378 |
Total financial debt | 1\u00a0191\u00a0324 | -8\u00a0228 | 614 | 18\u00a0312 | \u2014 | 33\u00a0974 | 1\u00a0235\u00a0996 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 118 | \u2014 | \u2014 | \u2014 | -7\u00a0295 | \u2014 | -7\u00a0178 |
Cross-currency interest-rate swaps | 1\u00a0645 | \u2014 | \u2014 | \u2014 | -4\u00a0290 | \u2014 | -2\u00a0645 |
Total liabilities from financing activities | 1\u00a0193\u00a0087 | -8\u00a0228 | 614 | 18\u00a0312 | -11\u00a0586 | 33\u00a0974 | 1\u00a0226\u00a0173 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other non-current amounts payable | 142 | 150 |
Derivatives (cf. note 7.2.) | 703 | \u2014 |
Total | 844 | 150 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other amounts payable | 9\u00a0122 | 14\u00a0362 |
Derivatives (cf. note 7.2.) | 2\u00a0324 | 1\u00a0548 |
Advances received | 24\u00a0354 | 24\u00a0097 |
Other taxes | 24\u00a0127 | 36\u00a0940 |
Accruals and deferred income | 8\u00a0322 | 11\u00a0171 |
Total | 68\u00a0249 | 88\u00a0118 |
The increase in 2022 of Other amounts payable was mainly due to higher outstanding dividend payable and payable relating to tax consolidation regime in Italy.
The derivatives included forward-exchange contracts (\u20ac\u00a01.3\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.7\u00a0million)) and CCIRSs (\u20ac\u00a00.2\u00a0million\u00a0(2021:\u00a0\u20ac\u00a01.7\u00a0million)).
Advances received mainly related to the project business of Bridon-Bekaert Ropes Group (BBRG) and advance payments from the Brazilian joint ventures on equipment orders at Engineering.
The table below provides an overview of the tax receivables, tax payables and uncertain tax positions recognized at balance sheet closing date. The tax receivables and payables include both current income taxes, VAT and other taxes.
in thousands of \u20ac | 2021 | 2022 |
Tax receivables | 113\u00a0568 | 126\u00a0694 |
Certain tax liabilities | 71\u00a0376 | 59\u00a0292 |
Uncertain tax positions | 38\u00a0882 | 43\u00a0828 |
Summary
in thousands of \u20ac | 2021 | 2022 |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 365\u00a0754 |
Non-cash items added back to operating result (EBIT)\u00b9 | 164\u00a0256 | 260\u00a0729 |
EBITDA\u00b9 | 674\u00a0845 | 626\u00a0483 |
Other gross cash flows from operating activities | -140\u00a0345 | -121\u00a0294 |
Gross cash flows from operating activities\u00b9 | 532\u00a0884 | 505\u00a0189 |
Changes in operating working capital \u00b2 | -119\u00a0773 | -174\u00a0467 |
Other operating cash flows | -32\u00a0620 | 9\u00a0570 |
Cash from operating activities\u00b9 | 380\u00a0491 | 340\u00a0292 |
Cash from investing activities\u00b9 | -91\u00a0810 | -124\u00a0956 |
Cash from financing activities | -567\u00a0082 | -174\u00a0398 |
Net increase or decrease in cash and cash equivalents\u00b9 | -278\u00a0401 | 40\u00a0937 |
\u00b9 See note 2.8 'Restatement effects'
2 For reconciliation of the changes in operating working capital with the organic variation of the working capital, see note 6.8. 'Operating working capital'.
The cash flow from operating activities is presented using the indirect method, whereas the direct method is used for the cash flows from other activities. The direct method focuses on classifying gross cash receipts and gross cash payments by category.
Cash from operating activities
Details of selected operating items | ||
in thousands of \u20ac | 2021 | 2022 |
Non-cash items included in operating result (EBIT) | ||
Depreciation and amortization \u00b9 \u00b2 | 165\u00a0774 | 202\u00a0795 |
Impairment losses on assets | -1\u00a0518 | 57\u00a0934 |
Non-cash items added back to operating result (EBIT)\u00b2 | 164\u00a0256 | 260\u00a0729 |
Gains (-) and losses on business disposals (portion retained) | \u2014 | -474 |
Employee benefits: set-up / reversal (-) of amounts not used \u00b2 | 12\u00a0428 | 26\u00a0158 |
Provisions: set-up / reversal (-) of amounts not used | -352 | 10\u00a0102 |
CTA recycled on business disposals | -2\u00a0987 | -555 |
Equity-settled share-based payments | 15\u00a0261 | 92 |
Other non-cash items included in operating result (EBIT)\u00b2 | 24\u00a0349 | 35\u00a0324 |
Total\u00b2 | 188\u00a0605 | 296\u00a0053 |
Investing items included in operating result (EBIT) | ||
Gains (-) and losses on business disposals (portion sold) | 170 | 210 |
Gains (-) and losses on disposals of intangible assets + PP&E | -23\u00a0404 | -11\u00a0591 |
Total | -23\u00a0234 | -11\u00a0381 |
Amounts used on provisions and employee benefit obligations | ||
Employee benefits: amounts used | -41\u00a0503 | -24\u00a0123 |
Provisions: amounts used | -8\u00a0837 | -3\u00a0824 |
Total | -50\u00a0340 | -27\u00a0947 |
Income taxes paid | ||
Current income tax expense | -116\u00a0006 | -79\u00a0593 |
Increase or decrease (-) in net income taxes payable | 23\u00a0269 | -37\u00a0697 |
Total | -92\u00a0737 | -117\u00a0289 |
Other operating cash flows | ||
Movements in other receivables and payables | -27\u00a0411 | 9\u00a0365 |
Other | -5\u00a0209 | 205 |
Total | -32\u00a0620 | 9\u00a0570 |
\u00b9 Including \u20ac 11.0 million (2021: \u20ac -18.6 million) write-downs / (reversals of write-downs) on inventories and trade receivables (see note 6.8. \u2018Operating working capital\u2019).
2\u00a0See note 2.8 'Restatement effects'
Gross cash flows from operating activities decreased by \u20ac\u00a0-27.7\u00a0million as a result of lower EBITDA (\u20ac\u00a0-48.4\u00a0million), lower set-up for equity-settled share-based payments (\u20ac\u00a0-15.2\u00a0million) and a higher cash-out from income taxes paid (\u20ac\u00a0-24.5\u00a0million higher). This is partially offset with a lower adjustment for the accounting profit on investing items (\u20ac\u00a0+11.9\u00a0million lower), by a higher set-up of employee benefit obligations and provisions, and a lower reversal and usage of employee benefits and provisions (\u20ac\u00a0+46.6\u00a0million higher).
The cash outflow from the increase in working capital, driven by the lower outstanding accounts payable, partially offset with higher inventories and trade receivables, amounted to \u20ac -178.7 million in 2022 (2021: \u20ac -119.8 million) (see organic decrease in note 6.8. \u2018Operating working capital\u2019).
Other operating cash flows mainly related to swings in other receivables and payables not included in working capital and not arising from investing or financing activities.
In 2022, the cash-out from income taxes was \u20ac\u00a0117.3\u00a0million. Most taxes were paid in China (\u20ac\u00a025.3\u00a0million), Chile (\u20ac\u00a017.5\u00a0million), Belgium (\u20ac\u00a010.8\u00a0million), Turkey (\u20ac\u00a011.2 million), Czech Republic (\u20ac\u00a08.7\u00a0million), Peru (\u20ac\u00a08\u00a0million), Colombia (\u20ac\u00a03.8\u00a0million) and Indonesia (\u20ac\u00a03.3\u00a0million).
Cash from investing activities
The following table presents more details on selected investing cash flows:
Details of selected investing items | ||
in thousands of \u20ac | 2021 | 2022 |
Other portfolio investments | ||
New business combinations | \u2014 | -2\u00a0384 |
Other investments | -863 | -8\u00a0613 |
Total | -863 | -10\u00a0997 |
Proceeds from disposals of fixed assets | ||
Proceeds from disposals of intangible assets | 121 | 127 |
Proceeds from disposals of property, plant and equipment | 12\u00a0235 | 2\u00a0115 |
Proceeds from disposals of RoU Land | 712 | 7 |
Proceeds from disposals of assets classified as held for sale | 23\u00a0683 | 891 |
Total | 36\u00a0752 | 3\u00a0141 |
The other investments in 2022 relate to the investment in Pajarito Powder LLC (\u20ac 3.9 million)\u00a0 and TFI Marine Nominees Limited (\u20ac 4.0 million). New business combinations relate to the investments in new subsidiaries in 2022.The other investments in 2021 relate to the investment in a power generation company in India.
Cash-outs from capital expenditure for property, plant and equipment increased from \u20ac 143.8 million in 2021 to \u20ac 170.2 million in 2022.
The proceeds from sales of fixed assets in 2022 relate to sales transactions, mainly in Belgium. In 2021 they relate to the real estate sales transactions, mainly in Peru, Malaysia, Belgium and Canada.
Cash from financing activities
The following table presents more details about selected financing items:
Details of selected financing items | ||
in thousands of \u20ac | 2021 | 2022 |
Other financing cash flows | ||
New shares issued following exercise of subscription rights | 1\u00a0077 | 748 |
Increase (-) or decrease in current and non-current receivables | 495 | -763 |
Increase (-) or decrease in current financial assets | -28\u00a0439 | 75\u00a0552 |
Other financial income and expenses | -2\u00a0879 | -7\u00a0064 |
Total | -29\u00a0747 | 68\u00a0473 |
New long-term debt issued was limited to \u20ac 12.0 million in 2022 (2021:\u00a0\u20ac\u00a023.6\u00a0million). Repayments of long-term debt (\u20ac -87.6 million) refinancing of local loans in Peru (\u20ac -25.5 million), Australia (\u20ac -16.2 million) and China (\u20ac\u00a0-12.0\u00a0million). Cash-ins from short-term debt amounted to \u20ac\u00a0+67.3 million in 2022 (2021: cash-outs \u20ac -43.3 million), mostly by entering in new short term loans by the Latin American entities. For an overview of the movements in liabilities arising from financing activities, see note\u00a06.18.\u00a0\u2018Interest-bearing debt\u2019.
In 2022 the treasury shares transactions decreased with \u20ac\u00a0-97.1\u00a0million (2021: increase by \u20ac 17.4 million) and consisted mainly of the costs of share buy-back program being exercised.
Principles of financial risk management
The Group is exposed to risks from movements in exchange rates, interest rates and market risks that affect its assets and liabilities. Financial risk management within the Group aims at reducing the impact of these market risks through ongoing operational and financing activities. Selected derivative hedging instruments are used depending on the assessment of risk involved. The Group mainly hedges the risks that affect the Group\u2019s cash flows. Derivatives are used exclusively as hedging instruments and not for trading or other speculative purposes. To reduce the credit risk, hedging transactions are generally only concluded with financial institutions whose long term credit rating is at least A according to Moody\u2019s Investors Service Inc., Fitch and S&P.
The guidelines and principles of the Bekaert financial risk policy are defined by the Audit, Risk and Finance Committee and overseen by the Board of the Group. Group Treasury is responsible for implementing the financial risk policy. This encompasses defining appropriate policies and setting up effective control and reporting procedures. The Audit, Risk and Finance Committee is regularly kept informed on the exposures.
Currency risk
The Group\u2019s currency risk can be split into two categories: translational and transactional currency risk.
Translational currency risk
A translational currency risk arises when the financial data of foreign subsidiaries are converted into the Group\u2019s presentation currency, the euro. The main currencies are Chinese renminbi, US dollar, Czech koruna, Brazilian real, Chilean peso, Russian ruble, Indian rupee and pound sterling. Since there is no impact on the cash flows, the Group usually does not hedge against such risk.
Transactional currency risk
The Group is exposed to transactional currency risks resulting from its operating, investing and financing activities.
Foreign currency risk in the area of operating activities arises from commercial activities with sales and purchases in foreign currencies, as well as payments and receipts of royalties. The Group uses forward-exchange contracts to limit the currency risk on the forecasted cash inflows and outflows for the coming three months. Significant exposures and firm commitments beyond that time frame may also be covered.
Foreign currency risk in the area of investment results from the acquisition and disposal of investments in foreign companies, and sometimes also from dividends receivable from foreign investments. If material, these risks are hedged by means of forward exchange contracts.
Foreign currency risk in the financing area results from financial liabilities in foreign currencies. In line with its policy, Group Treasury hedges these risks using cross-currency interest-rate swaps and forward exchange contracts to convert financial obligations denominated in foreign currencies into the entity\u2019s functional currency. At the reporting date, the foreign currency liabilities for which currency risks were hedged mainly consisted of intercompany loans in euro and US dollar.
Currency sensitivity analysis
Currency sensitivity relating to the operating, investing and financing activities
The following table summarizes the Group\u2019s net foreign currency positions of operating, investing and financing receivables and payables at the reporting date for the most important currency pairs. The net currency positions are presented before intercompany eliminations. Positive amounts indicate that the Group has a net future cash inflow in the first currency. In the table, the \u2018Total exposure\u2019 column represents the position on the balance sheet, while the \u2018Total derivatives\u2019 column includes all financial derivatives hedging those balance sheet positions as well as forecasted transactions.
Currency pair - 2021 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | -6\u00a0506 | -8\u00a0323 | -14\u00a0829 |
CAD/EUR | -11\u00a0171 | \u2014 | -11\u00a0171 |
CZK/EUR | 24\u00a0625 | -1\u00a0132 | 23\u00a0493 |
EUR/CNY | -17\u00a0706 | \u2014 | -17\u00a0706 |
EUR/GBP | 12\u00a0479 | 6\u00a0206 | 18\u00a0685 |
EUR/INR | -27\u00a0084 | 19\u00a0725 | -7\u00a0359 |
EUR/MYR | -12\u00a0495 | \u2014 | -12\u00a0495 |
EUR/RON | -39\u00a0256 | \u2014 | -39\u00a0256 |
EUR/RUB | -35\u00a0641 | 22\u00a0134 | -13\u00a0507 |
IDR/USD | -13\u00a0740 | \u2014 | -13\u00a0740 |
JPY/CNY | 8\u00a0229 | -1\u00a0925 | 6\u00a0304 |
JPY/USD | 5\u00a0888 | -3\u00a0362 | 2\u00a0526 |
NOK/GBP | 16\u00a0221 | \u2014 | 16\u00a0221 |
USD/BRL | -10\u00a0822 | \u2014 | -10\u00a0822 |
USD/CLP | -18\u00a0970 | \u2014 | -18\u00a0970 |
USD/CNY | 35\u00a0648 | 11\u00a0528 | 47\u00a0176 |
USD/EUR | 140\u00a0008 | -96\u00a0566 | 43\u00a0442 |
USD/INR | -48\u00a0924 | \u2014 | -48\u00a0924 |
USD/MXN | -5\u00a0939 | \u2014 | -5\u00a0939 |
USD/RUB | -6\u00a0970 | \u2014 | -6\u00a0970 |
Currency pair - 2022 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | 540 | -8\u00a0866 | -8\u00a0326 |
BRL/EUR | 18\u00a0504 | \u2014 | 18\u00a0504 |
CLP/EUR | 5\u00a0696 | \u2014 | 5\u00a0696 |
CZK/EUR | 23\u00a0458 | 572 | 24\u00a0030 |
EUR/CNY | -19\u00a0024 | \u2014 | -19\u00a0024 |
EUR/GBP | -47\u00a0925 | 11\u00a0669 | -36\u00a0256 |
EUR/INR | -13\u00a0018 | \u2014 | -13\u00a0018 |
EUR/MYR | -13\u00a0114 | \u2014 | -13\u00a0114 |
EUR/RON | -34\u00a0186 | \u2014 | -34\u00a0186 |
EUR/RUB | -46\u00a0298 | \u2014 | -46\u00a0298 |
IDR/USD | -20\u00a0872 | \u2014 | -20\u00a0872 |
JPY/CNY | 6\u00a0695 | -2\u00a0285 | 4\u00a0410 |
USD/BRL | -7\u00a0319 | \u2014 | -7\u00a0319 |
USD/CAD | 14\u00a0569 | -14\u00a0400 | 169 |
USD/CNY | 43\u00a0243 | \u2014 | 43\u00a0243 |
USD/EUR | 161\u00a0321 | -126\u00a0037 | 35\u00a0284 |
USD/GBP | 8\u00a0948 | \u2014 | 8\u00a0948 |
USD/INR | -50\u00a0110 | \u2014 | -50\u00a0110 |
USD/MXN | -6\u00a0641 | \u2014 | -6\u00a0641 |
The reasonably possible changes used in this calculation were based on annualized volatility relating to the daily movement of the exchange rate of the reported year, with a 95%\u00a0confidence interval.
If rates had weakened/strengthened by such changes with all other variables constant, the result for the period before taxes would have been \u20ac\u00a00.5\u00a0million lower/higher (\u20ac\u00a039.7\u00a0million higher or lower if ruble position is included) (2021:\u00a0\u20ac\u00a010.8\u00a0million).
Currency sensitivity in relation to hedge accounting
At 31 December 2022 the Group does not apply hedge accounting (also none at 31 December 2021).
Interest-rate risk
The Group is exposed to interest-rate risk, mainly on debt denominated in US dollar, Chinese renminbi and euro. To minimize the effects of interest-rate fluctuations in these regions, the Group manages the interest-rate risk for net debt denominated in the respective currencies of these countries separately. General guidelines are applied to cover interest-rate risk:
\u2022The target average life of long-term debt is four years.
\u2022The allocation of long-term debt between floating and fixed interest rates must remain within the defined limits approved by the Audit, Risk and Finance Committee.
Group Treasury uses interest-rate swaps and cross-currency interest-rate swaps to ensure that the floating and fixed portions of the long-term debt remain within the defined limits.
The following table summarizes the weighted average interest rates, excluding the effects of any swaps, at the balance sheet date.
2021 | Long-term | ||||
Fixed rate | Floating rate | Total | Short-term | Total | |
US dollar | 4.04% | 2.37% | 3.29% | 1.31% | 1.60% |
Chinese renminbi | -% | -% | -% | 3.62% | 3.62% |
Euro | 2.27% | 1.48% | 2.07% | -% | 2.07% |
Other | 6.71% | -% | 6.71% | 4.58% | 4.58% |
Total | 2.65% | 1.53% | 2.38% | 2.41% | 2.38% |
2022 | Long-term | ||||
Fixed rate | Floating rate | Total | Short-term | Total | |
US dollar | 4.21% | -% | 4.21% | 5.36% | 5.25% |
Chinese renminbi | -% | -% | -% | 3.41% | 3.41% |
Euro | 1.51% | 3.95% | 2.12% | -% | 2.12% |
Other | 4.59% | -% | 4.59% | 7.23% | 6.48% |
Total | 1.71% | 3.95% | 2.24% | 5.68% | 3.02% |
Interest-rate sensitivity analysis
Interest-rate sensitivity of the financial debt
As disclosed in note 6.18. \u2018Interest-bearing debt\u2019, the total financial debt of the Group as of 31 December 2022 amounted to \u20ac\u00a01\u00a0236\u00a0million (2021:\u00a0 \u20ac\u00a01\u00a0191.3\u00a0million). The following table shows the currency and interest rate profile, i.e. the percentage distribution of the total financial debt by currency and by type of interest rate (fixed, floating), including the effect of any swaps.
2021 | Long-term | Short-term | ||
Fixed rate | Floating rate | Floating rate | Total | |
US dollar | 1.40% | 1.10% | 14.30% | 16.80% |
Chinese renminbi | -% | -% | 3.00% | 3.00% |
Euro | 52.70% | 17.70% | -% | 70.40% |
Other | 4.40% | -% | 5.40% | 9.80% |
Total | 58.50% | 18.80% | 22.70% | 100.00% |
2022 | Long-term | Short-term | ||
Fixed rate | Floating rate | Floating rate | Total | |
US dollar | 1.50% | -% | 14.00% | 15.50% |
Chinese renminbi | -% | -% | 2.40% | 2.40% |
Euro | 55.10% | 18.30% | -% | 73.40% |
Other | 2.50% | -% | 6.20% | 8.70% |
Total | 59.10% | 18.30% | 22.60% | 100.00% |
On the basis of the annualized daily volatility of the 3-month Interbank Offered Rate in 2022 and 2021, the reasonable estimates of possible interest rate changes, with a 95% confidence interval, are set out for the main currencies in the table below.
2021 | Interest rate at 31 December | Reasonably possible |
Chinese renminbi \u00b9 | 2.21% | 0.36% |
Euro | -% | -% |
US dollar | 0.21% | 0.17% |
2022 | Interest rate at 31 December | Reasonably possible |
Chinese renminbi \u00b9 | 2.16% | 0.36% |
Euro | 2.22% | 0.37% |
US dollar | 4.77% | 3.20% |
\u00b9 For the Chinese renminbi, the interest rate is the PBOC benchmark interest rate for lending up to six months.
Applying the estimated possible changes in the interest rates to the floating rated debt, with all other variables constant, the result for the period before tax would have been \u20ac\u00a04.6\u00a0million higher/lower (2021: \u20ac 3.5 million higher/lower).
Interest-rate sensitivity in relation to hedge accounting
At 31 December 2022, the Group does not apply hedge accounting (2021: none) and no sensitivity analysis was required.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities and certain financing activities, including deposits with banks and financial institutions. In respect of its operating activities, the Group has a credit policy in place, which takes into account the risk profiles of the customers in terms of the market segment to which they belong. Based on activity platform, product sector and geographical area, a credit risk analysis is made of customers and a decision is taken regarding the covering of the credit risk. The exposure to credit risk is monitored on an ongoing basis and credit evaluations are made of all customers. In terms of the characteristics of some steel wire activities with a limited number of global customers, the concentration risk is closely monitored and, in combination with the existing credit policy, appropriate action is taken when needed. In accordance with IFRS 8 \u00a734, none of the specified disclosures on individual customers (or groups of customers under common control) are required, since none of the Group\u2019s customers accounts for more than 10% of its revenues. At 31 December 2022, 64.4% (2021: 65.4%) of the credit risk exposure was covered by credit insurance policies and by trade finance techniques such as letters of credit, cash against documents and bank guarantees. In respect of financing activities, transactions are normally concluded with counterparties that have at least an A credit rating. There are also limits allocated to each counterparty which depend on their rating. Due to this approach, the Group considers the risk of counterparty default to be limited in both operating and financing activities. In accordance with the IFRS 9 \u2018expected credit loss\u2019 model for financial assets, a general bad debt allowance is made for trade receivables to cover the unknown bad debt risk at each reporting date. This general allowance constitutes of a percentage on outstanding trade receivables at each reporting date. The percentages reflect the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at reporting date about past events, current conditions and forecasts of future economic conditions and are reviewed year-on-year.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding. To ensure liquidity and financial flexibility at all times, the Group, in addition to its available cash, has several uncommitted short-term credit lines at its disposal in the major currencies and in amounts considered adequate for current and near-future financing needs. These facilities are generally of the mixed type and may be utilized, for example, for advances, overdrafts, acceptances and discounting. The Group also has committed credit facilities at its disposal up to a maximum equivalent of \u20ac 200 million (2021:\u00a0\u20ac\u00a0200\u00a0million) at floating interest rates with fixed margins. At year-end, nothing was outstanding under these facilities (2021: nil). In addition, the Group has a commercial paper and medium-term note program available for a maximum of \u20ac\u00a0123.9\u00a0million (2021: \u20ac\u00a0123.9\u00a0million). At the end of 2022, no commercial paper notes were outstanding (2021: nil).\u00a0At year-end, no external bank debt was subject to debt covenants (2021: nil). The Group has discounted outstanding receivables per 31 December 2022 for a total amount of \u20ac\u00a0267.5\u00a0million (2021: \u20ac\u00a0224.8\u00a0million) under its existing factoring agreements. Under these agreements, substantially all risks and rewards of ownership of the receivables are transferred to the factor. As a consequence, at the end of 2022, the factored receivables are derecognized.
The following table shows the Group\u2019s contractually agreed (undiscounted) outflows in relation to financial liabilities (including financial liabilities reclassified as liabilities associated with assets held for sale). Only net interest payments and principal repayments are included.
2021 | ||||
in thousands of \u20ac | 2022 | 2023 | 2024-2026 | 2027 and thereafter |
Financial liabilities - principal | ||||
Trade payables | -1\u00a0062\u00a0185 | \u2014 | \u2014 | \u2014 |
Other payables | -9\u00a0122 | -142 | \u2014 | \u2014 |
Interest-bearing debt | -240\u00a0525 | -224\u00a0519 | -494\u00a0605 | -248\u00a0279 |
Derivatives - gross settled | -109\u00a0565 | \u2014 | \u2014 | \u2014 |
Financial liabilities - interests | ||||
Trade and other payables | \u2014 | \u2014 | \u2014 | \u2014 |
Interest-bearing debt | -22\u00a0087 | -18\u00a0049 | -40\u00a0723 | -5\u00a0778 |
Derivatives - net settled | -343 | -272 | -309 | \u2014 |
Derivatives - gross settled | -2\u00a0805 | \u2014 | \u2014 | \u2014 |
Total undiscounted cash flow | -1\u00a0446\u00a0632 | -242\u00a0982 | -535\u00a0637 | -254\u00a0057 |
2022 | ||||
in thousands of \u20ac | 2023 | 2024 | 2025-2027 | 2028 and thereafter |
Financial liabilities - principal | ||||
Trade payables | -921\u00a0113 | \u2014 | \u2014 | \u2014 |
Other payables | -14\u00a0362 | -150 | \u2014 | \u2014 |
Interest-bearing debt | -500\u00a0588 | -95\u00a0656 | -619\u00a0407 | -20\u00a0345 |
Derivatives - gross settled | -121\u00a0843 | \u2014 | \u2014 | \u2014 |
Financial liabilities - interests | ||||
Trade and other payables | \u2014 | \u2014 | \u2014 | \u2014 |
Interest-bearing debt | -27\u00a0705 | -19\u00a0501 | -33\u00a0571 | \u2014 |
Derivatives - net settled | \u2014 | \u2014 | \u2014 | \u2014 |
Derivatives - gross settled | -2\u00a0800 | \u2014 | \u2014 | \u2014 |
Total undiscounted cash flow | -1\u00a0588\u00a0410 | -115\u00a0307 | -652\u00a0978 | -20\u00a0345 |
All instruments held at the reporting date and for which payments had been contractually agreed are included. Forecasted data relating to future, new liabilities have not been included. Amounts in foreign currencies have been translated at the closing rate at the reporting date. The variable interest payments arising from the financial instruments were calculated using the applicable forward interest rates.
Hedging
All financial derivatives the Group enters into, relate to an underlying transaction or forecasted exposure. In function of the expected impact on the income statement and if the stringent IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied. The following sections describe the transactions whereby hedge accounting is applied and transactions which do not qualify for hedge accounting but constitute an economic hedge.
Hedge accounting
The Group did not apply hedge accounting in 2022 (2021: none) so there were no fair value hedges nor cash flow hedges in 2022 (2021: none).
Economic hedging and other derivatives
The Group also uses financial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defined in IFRS 9 \u2018Financial Instruments\u2019 are not met or because the Group has elected not to apply hedge accounting. These derivatives are treated as free-standing instruments held for trading.
\u2022The Group uses cross-currency interest-rate swaps and forward-exchange contracts to hedge the currency risk on intercompany loans involving two entities with different functional currencies. Until now, the Group has elected not to apply hedge accounting as defined in IFRS 9. Since nearly all cross-currency interest-rate swaps are floating-to-floating, the fair value gain or loss on the financial instruments is expected to offset the foreign-exchange result arising from the remeasurement of the intercompany loans. The major currencies involved are US dollar and British pound.
\u2022To manage its interest-rate exposure, the Group uses interest-rate swaps to convert its floating-rate debt to a fixed rate debt. The Group entered into interest-rate swaps for \u20ac\u00a0196.5\u00a0million to hedge the Schuldschein loans with floating interest rates (2021: \u20ac 196.5\u00a0million).
\u2022The Group uses forward exchange contracts to limit currency risks on its various operating and financing activities. For all forward exchange contracts, the fair value change is recorded immediately under other financial income and expenses.
\u2022In June 2019, the Group entered into a renewable energy Virtual Power Purchase Agreement (VPPA) for a wind generation facility located in North America. In addition, in July 2022 the group entered into an additional contract for a solar project located in Texas (North America). The characteristics of the contracts are such that the VPPA constitutes a derivative in accordance with IFRS 9. The fair value of the derivative amounted to \u20ac 7.5 million at 31 December 2022 (2021:\u00a0\u20ac\u00a013.2\u00a0million), as a result of which a loss of \u20ac 5.7 million was recognized in other financial costs.
Derivatives
The following table analyzes the notional amounts of the derivatives according to their maturity date. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31 December 2022, Bekaert does not apply hedge accounting
2021 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 67\u00a0716 | \u2014 | \u2014 |
Interest-rate swaps | \u2014 | 196\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 128\u00a0947 | \u2014 | \u2014 |
Conversion derivative | \u2014 | \u2014 | \u2014 |
Total | 196\u00a0663 | 196\u00a0500 | \u2014 |
2022 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 65\u00a0493 | \u2014 | \u2014 |
Interest-rate swaps | 116\u00a0000 | 80\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 121\u00a0843 | \u2014 | \u2014 |
Total | 303\u00a0336 | 80\u00a0500 | \u2014 |
The following table summarizes the fair values of the various derivatives carried. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31\u00a0December\u00a02022, Bekaert does not apply hedge accounting:
Fair value of current and non-current derivatives | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Financial instruments | ||||
Held for trading | ||||
Forward exchange contracts | 805 | 2\u00a0833 | 654 | 1\u00a0333 |
Interest-rate swaps | \u2014 | 7\u00a0178 | 118 | \u2014 |
Cross-currency interest-rate swaps | 610 | 2\u00a0860 | 2\u00a0255 | 215 |
Conversion derivative | \u2014 | \u2014 | \u2014 | |
Other derivative financial assets | 13\u00a0244 | 7\u00a0500 | \u2014 | \u2014 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Non-current | 13\u00a0244 | 14\u00a0678 | 703 | \u2014 |
Current | 1\u00a0416 | 5\u00a0694 | 2\u00a0324 | 1\u00a0548 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
In 2022, the other derivative financial assets related to the VPPA derivatives for \u20ac 7.5 million (2021: \u20ac 13.2\u00a0million).
The Group has no financial assets and financial liabilities that are presented net in the balance sheet due to set-off in accordance with IAS 32. The Group enters into ISDA (International Swaps and Derivatives Association) master agreements with its counterparties for some of its derivatives, allowing the counterparties to net derivative assets with derivative liabilities when settling in case of default. Under these agreements, no collateral is being exchanged, neither in cash nor in securities.
The potential effect of the netting of derivative contracts is shown below:
Effect of enforceable netting agreements | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Total derivatives recognized in balance sheet | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Enforceable netting | -610 | -215 | -610 | -215 |
Net amounts | 14\u00a0049 | 20\u00a0157 | 2\u00a0416 | 1\u00a0333 |
Additional disclosures on financial instruments by class and category
The following tables list the different classes of financial assets and liabilities with their carrying amounts and their respective fair values, analyzed by their measurement category in accordance with IFRS 9 \u2018Financial Instruments\u2019.
Cash and cash equivalents, short-term deposits, trade and other receivables, bills of exchange received, loans and receivables primarily have short terms to maturity; hence, their carrying amounts at the reporting date approximate the fair values. Trade and other payables also generally have short terms to maturity and, hence, their carrying amounts also approximate their fair values. The Group has no exposure to collateralized debt obligations (CDOs).
The following abbreviations are used for the IFRS 9 categories:
Abbreviation | Category in accordance with IFRS 9 |
AC | Financial assets or financial liabilities at amortized cost |
FVTOCI/Eq | Equity instruments designated as at fair value through OCI |
FVTPL/Mnd | Financial assets mandatorily measured at fair value through profit or loss |
FVTPL | Financial liabilities measured as at fair value through profit or loss |
Carrying amount vs fair value | 31 December 2021 | 31 December 2022 | |||
in thousands of \u20ac | Category in accordance with IFRS 9 | Carrying amount | Fair value | Carrying amount | Fair value |
Assets | |||||
Non-current financial assets | |||||
- Financial & other receivables | AC | 12\u00a0549 | 12\u00a0549 | 12\u00a0211 | 12\u00a0211 |
- Equity investments | FVTOCI/Eq | 20\u00a0081 | 20\u00a0081 | 26\u00a0023 | 26\u00a0023 |
- Derivatives | |||||
- Held for trading | FVTPL/Mnd | 13\u00a0244 | 13\u00a0244 | 14\u00a0678 | 14\u00a0678 |
Current financial assets | |||||
- Financial receivables and cash | AC | 6\u00a0475 | 6\u00a0475 | 6\u00a0352 | 6\u00a0352 |
- Cash and cash equivalents | AC | 677\u00a0270 | 677\u00a0270 | 728\u00a0095 | 728\u00a0095 |
- Short term deposits | AC | 80\u00a0058 | 80\u00a0058 | 4\u00a0766 | 4\u00a0766 |
- Trade receivables | AC | 750\u00a0666 | 750\u00a0666 | 730\u00a0786 | 730\u00a0786 |
- Bills of exchange received | AC | 41\u00a0274 | 41\u00a0274 | 39\u00a0764 | 39\u00a0764 |
- Other current assets | |||||
- Other receivables | AC | 43\u00a0437 | 43\u00a0437 | 24\u00a0732 | 24\u00a0732 |
- Derivatives | |||||
- Held for trading | FVTPL/Mnd | 1\u00a0416 | 1\u00a0416 | 5\u00a0694 | 5\u00a0694 |
Liabilities | |||||
Non-current interest-bearing debt | |||||
- Lease liabilities | AC | 56\u00a0425 | 56\u00a0425 | 57\u00a0203 | 57\u00a0203 |
- Cash guarantees received | AC | 204 | 204 | 210 | 210 |
- Credit institutions | AC | 177\u00a0047 | 177\u00a0047 | 146\u00a0413 | 146\u00a0413 |
- Schuldschein loans | AC | 319\u00a0905 | 319\u00a0905 | 131\u00a0582 | 131\u00a0582 |
- Bonds | AC | 400\u00a0000 | 395\u00a0074 | 400\u00a0000 | 347\u00a0800 |
Current interest-bearing debt | |||||
- Lease liabilities | AC | 20\u00a0219 | 20\u00a0219 | 20\u00a0002 | 20\u00a0002 |
- Credit institutions | AC | 217\u00a0523 | 217\u00a0523 | 291\u00a0989 | 291\u00a0989 |
- Schuldschein loans | AC | \u2014 | \u2014 | 188\u00a0598 | 188\u00a0598 |
- Bonds | AC | \u2014 | \u2014 | \u2014 | \u2014 |
Other non-current liabilities | |||||
- Other derivatives | FVTPL | 118 | 118 | \u2014 | \u2014 |
- Other payables | AC | 142 | 142 | 150 | 150 |
Trade payables | AC | 1\u00a0062\u00a0185 | 1\u00a0062\u00a0185 | 921\u00a0113 | 921\u00a0113 |
Carrying amount vs fair value | 31 December 2021 | 31 December 2022 | |||
in thousands of \u20ac | Category in accordance with IFRS 9 | Carrying amount | Fair value | Carrying amount | Fair value |
Other current liabilities | |||||
- Conversion option | FVTPL | \u2014 | \u2014 | \u2014 | \u2014 |
- Other payables | AC | 33\u00a0476 | 33\u00a0476 | 38\u00a0459 | 38\u00a0459 |
- Derivatives | |||||
- Held for trading | FVTPL | 2\u00a0324 | 2\u00a0324 | 1\u00a0548 | 1\u00a0548 |
Aggregated by category in accordance with IFRS 9 | |||||
Financial assets | AC | 1\u00a0611\u00a0729 | 1\u00a0611\u00a0729 | 1\u00a0546\u00a0706 | 1\u00a0546\u00a0706 |
FVTOCI/Eq | 20\u00a0081 | 20\u00a0081 | 26\u00a0023 | 26\u00a0023 | |
FVTPL/Mnd | 14\u00a0659 | 14\u00a0659 | 20\u00a0372 | 20\u00a0372 | |
Financial liabilities | AC | 2\u00a0287\u00a0127 | 2\u00a0282\u00a0201 | 2\u00a0195\u00a0718 | 2\u00a0143\u00a0518 |
FVTPL | 2\u00a0441 | 2\u00a0441 | 1\u00a0548 | 1\u00a0548 |
The fair value of all financial instruments measured at amortized cost in the balance sheet has been determined using level-2 fair value measurement techniques. For most financial instruments the carrying amount approximates the fair value.
Financial instruments by fair value measurement hierarchy
The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways:
\u2022\u2018Level 1\u2019 fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in these active markets for identical assets and liabilities. This mainly relates to financial assets at fair value through other comprehensive income such as the investment in Shougang Concord Century Holdings Ltd (see note 6.6.\u00a0\u2018Other non-current assets\u2019).
\u2022\u2018Level 2\u2019 fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward-exchange rates and yield curves derived from quoted interest rates with matching maturities. Interest-rate swaps are measured at
\u2022the present value of future cash flows estimated and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward-exchange rates, quoted interest rates and applicable yield curves derived therefrom.
\u2022\u2018Level 3\u2019 fair value measurement: the fair value of the remaining financial assets and financial liabilities is derived from valuation techniques which include inputs that are not based on observable market data. At the end of 2022, Bekaert had two types of financial instruments, namely the VPPA agreement and several equity investments, for which the fair value measurement can be characterized as \u2018level 3\u2019. The fair value of the VPPA contract is determined using a Monte Carlo valuation model. The main factors determining the fair value of the VPPA agreement are the discount rate (level 2), the estimated energy output based on wind or solar studies in the area and the off-peak/on-peak price volatility (level 3). The fair value of the main equity investment (Xinju Metal Products Co Ltd) is determined using a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption. The main factors determining the fair value are the discount rate and EBITDA.
Derivative in VPPA arrangement | 31 December 2022 |
Level 2 inputs | |
Discount rate | Weighted average of investment grade corporate bond curves |
Level 3 inputs | |
Power forward sensitivity | Estimated on peak/off peak price forecasts |
Production sensitivity | Based on wind / solar studies in the area |
Outcome of the model (in thousands of \u20ac) | |
Fair value of the VPPA derivative | 7500 |
The carrying amount (i.e. the fair value) of the level-3 liabilities/(assets) has evolved as follows:
Level-3 Financial liabilities / (assets) | ||
in thousands of \u20ac | 2021 | 2022 |
At 1 January | -10\u00a0682 | -23\u00a0561 |
(Expenditure) / Disposal | -863 | -8\u00a0537 |
(Gain) / loss in fair value through OCI | -1\u00a0916 | -555 |
(Gain) / loss in fair value through P&L | -10\u00a0100 | 5\u00a0743 |
At 31 December | -23\u00a0561 | -26\u00a0910 |
Gains and losses in fair value are reported in other financial income and expenses (\u20ac\u00a05.7\u00a0million), except for the equity investments where fair value changes are carried through other comprehensive income (\u20ac\u00a0-0.6\u00a0million) (see note 6.6. \u2018Other non-current assets\u2019).
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for King Plains.
Sensitivity analysis King Plains | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 188 | |
-10% | decreased by | -281 | ||
Production sensitivity | +5% | increased by | 375 | |
-5% | decreased by | -469 |
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for Rockhound
Sensitivity analysis Rockhound | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 2\u00a0344 | |
-10% | decreased by | -2\u00a0438 | ||
Production sensitivity | +5% | increased by | 750 | |
-5% | decreased by | -750 |
The sensitivity of the fair value calculation of the equity investment in Xinju Metal Products Co Ltd (\u20ac\u00a06.5 million) is shown below:
\u2022If EBITDA would be CNY\u00a04.0 million lower in all periods of the business plan, the fair value would be \u20ac\u00a05.5\u00a0million;
\u2022If the discount factor would be 1% higher, the fair value would be \u20ac\u00a06.0\u00a0million;
\u2022If EBITDA would be CNY\u00a04.0 million lower in all years of the business plan and the discount factor would be 1% higher, the fair value would be \u20ac\u00a05.1\u00a0million.
The following table provides an analysis of financial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above:
2021 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 1\u00a0416 | 13\u00a0244 | 14\u00a0659 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments | 9\u00a0764 | \u2014 | 10\u00a0317 | 20\u00a0081 |
Total assets | 9\u00a0764 | 1\u00a0416 | 23\u00a0561 | 34\u00a0741 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
Total liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
2022 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 12\u00a0872 | 7\u00a0500 | 20\u00a0372 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments \u00b9 | 6\u00a0614 | \u2014 | 19\u00a0410 | 26\u00a0023 |
Total assets | 6\u00a0614 | 12\u00a0872 | 26\u00a0910 | 46\u00a0395 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Total liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the net debt and equity balance. The Group\u2019s overall strategy remains unchanged from 2021.
The capital structure of the Group consists of net debt, as defined in note 6.18. \u2018Interest-bearing debt\u2019, and equity (both attributable to equity holders of Bekaert and to non-controlling interests).
Gearing ratio
The Group\u2019s Audit, Risk and Finance Committee reviews the capital structure on a semi-annual basis. As part of this review, the committee assesses the cost of capital and the risks associated with each class of capital. The Group has a target gearing ratio of 50% determined as the proportion of net debt to equity. To realize this target (excluding the impact of IFRS 16 \u2018Leases\u2019), the Group is following systematically a number of guidelines, a.o.
\u2022strict cost control to improve profitability;
\u2022managing working capital levels by:
\u2013operational excellence;
\u2013cash collection actions;
\u2013better aligned payment terms;
\u2013optimized factoring usage;
\u2022strict control of capital expenditure;
\u2022active business portfolio management, including M&A and divestments.
Gearing | ||
in thousands of \u20ac | 2021 | 2022 |
Net debt | 417\u00a0329 | 487\u00a0118 |
Equity\u00b9 | 2\u00a0097\u00a0663 | 2\u00a0229\u00a0556 |
Net debt to equity ratio | 19.9% | 21.8% |
As at 31 December, the important contingencies and commitments were:
in thousands of \u20ac | 2021 | 2022 |
Contingent liabilities | 4\u00a0200 | 6\u00a0840 |
Commitments to purchase fixed assets | 48\u00a0984 | 67\u00a0935 |
Commitments to invest in venture capital funds | 3\u00a0269 | 2\u00a0600 |
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. Transactions with other related parties are disclosed below.
Transactions with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Sales of goods | 13\u00a0231 | 21\u00a0951 |
Purchases of goods | 18\u00a0509 | 21\u00a0152 |
Services rendered | 81 | 64 |
Royalties and management fees received | 14\u00a0981 | 18\u00a0374 |
Interest and similar income | \u2014 | 6 |
Dividends received | 44\u00a0847 | 42\u00a0508 |
Outstanding balances with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Trade receivables | 6\u00a0116 | 6\u00a0592 |
Other current receivables \u00b9 | 27\u00a0452 | 5\u00a0881 |
Trade payables | 4\u00a0945 | 3\u00a0557 |
Other current payables | 54 | \u2014 |
\u00b9 The other current receivables are at year-end 2021 significantly higher due to outstanding receivables for dividends from the Brazilian joint ventures (\u20ac\u00a027.5 million).
None of the related parties have entered into any other transactions with the Group that meet the requirements of IAS 24 \u2018Related Party Disclosures\u2019. The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm\u2019s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. Advances have been received for ongoing capex projects. More information on transactions with joint ventures are disclosed in note 6.5. \u2018Investments in joint ventures and associates\u2019.
Key Management includes the Board of Directors, the CEO, the members of the Bekaert Group Executive (BGE) and the Senior Vice Presidents (see last page of this report).
Key Management remuneration
in thousands of \u20ac | 2021 | 2022 |
Number of persons | 34 | 32 |
Short-term employee benefits | ||
Basic remuneration | 8\u00a0407 | 8\u00a0368 |
Variable remuneration | 4\u00a0126 | 6\u00a0314 |
Remuneration as directors of subsidiaries | 511 | 513 |
Post-employment benefits | ||
Defined-benefit pension plans | 327 | 190 |
Defined-contribution pension plans | 1\u00a0551 | 1\u00a0594 |
Share-based payment benefits | 11\u00a0719 | 6\u00a0467 |
Total gross remuneration | 26\u00a0641 | 23\u00a0446 |
Average gross remuneration per person | 784 | 733 |
Number of performance share units granted (cash-settled and equity-settled) | 131\u00a0442 | 111\u00a0135 |
Number of matching share units to be granted | 9\u00a0112 | 13\u00a0757 |
Number of shares granted | 10\u00a0940 | 12\u00a0080 |
\u2022Since 1 January 2023, a total of 199\u00a0931 treasury shares have been disposed of following the exercise of stock options under the stock option plans SOP 2010-2014 and SOP 2015-2017 and a total of 213\u00a0317 treasury shares following the vesting of performance share units under the Performance Share Plan.
\u2022On 24 February 2023, The Company\u2019s capital was reduced from \u20ac 173 737 000 to \u20ac 167 736 414 following the cancellation of 2 038 935 treasury shares. These shares were purchased by Kepler Cheuvreux on behalf of Bekaert in the framework of the share buyback program that started on 18 March 2022. On 2 March 2023, the capital was increased with \u20ac 586 to round up the capital without the issue of new shares. Therefore, as of 2 March 2023, the capital of the Company amounts to \u20ac 167 737 000 and is represented by 56 990 317 shares.
\u2022On 1 March 2023, Bekaert announced the continuation of its share buyback program for a total amount of up to \u20ac 120 million over a period of up to twelve months and the immediate start of the fifth tranche of the program for an aggregate amount of up to \u20ac 30 million.
\u2022On 1 March 2023, Bekaert announced the sale of its Steel Wire Solutions businesses in Chile en Peru to its current partners. The transaction, with a total enterprise value of approximately US$ 350 million and resulting in net proceeds for Bekaert\u2019s stake of US$ 136 million, is expected to close in 2023, subject to applicable regulatory approvals and customary closing conditions. The transaction covers the production and distribution facilities of the Steel Wire Solutions activities in Chile and Peru. These facilities manufacture, sell, and distribute steel wire products primarily for construction, agricultural fencing, mining, and industrial applications. The intended transaction regards the sale of the shares held by Bekaert in the following entities: Industrias Chilenas de Alambre-Inchalam SA in Talcahuano, Chile; and Prodalam SA in Santiago, Chile; along with their subsidiaries in Chile and Peru. Bekaert currently holds 52% of the shares in the Chilean entities and 38% of the shares in the Peruvian entities. The transaction excludes Bekaert\u2019s wholly owned Bridon-Bekaert ropes entities in Chile and Peru.
\u2022Annie Xu-Huhmann succeeded Arnaud Lesschaeve as Divisional CEO Rubber Reinforcement with effect as of 1 March 2023.
\u2022A grant of 139\u00a0141 equity settled performance share units was made on 10\u00a0March\u00a02023 under the terms of the Performance Share Plan. The
\u2022granted performance share units represented a fair value of \u20ac\u00a05.9\u00a0million.\u2022A grant of 28\u00a0472 cash-settled performance share units was made on 10\u00a0March\u00a02023 under the terms of the PSU A&L and PSU USA Performance Share Plan. The granted performance share units represented a fair value of \u20ac 1.2\u00a0million.7.6. Services provided by the statutory auditor and related personsDuring 2022, the statutory auditor and persons professionally related to him performed additional services for fees amounting to \u20ac 191\u00a0088.
These fees essentially relate to further assurance services (\u20ac\u00a0150\u00a0588), tax advisory services (\u20ac\u00a06\u00a0500) and other non-audit services (\u20ac\u00a034\u00a0000). The additional services were approved by the Audit, Risk and Finance Committee.
Companies forming part of the Group as at 31 December 2022\u00a0
Subsidiaries
Industrial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Advanced Cords Aalter NV | Aalter, Belgium | EUR | 100 |
Bekaert Bohum\u00edn sro | Bohum\u00edn, Czech Republic | CZK | 100 |
Bekaert Bradford UK Ltd | Bradford, United Kingdom | GBP | 100 |
Bekaert Combustion Technology BV | Assen, Netherlands | EUR | 100 |
Bekaert Heating Romania SRL | Negoiesti, Brazi Commune, Romania | RON | 100 |
Bekaert Hlohovec as | Hlohovec, Slovakia | EUR | 100 |
Bekaert Izmit \u00c7elik Kord Sanayi ve Ticaret AS | Izmit, Turkey | EUR | 100 |
Bekaert Kartepe \u00c7elik Kord Sanayi ve Ticaret AS | Kartepe, Turkey | EUR | 100 |
Bekaert Petrovice sro | Petrovice, Czech Republic | CZK | 100 |
Bekaert Sardegna SpA | Assemini, Italy | EUR | 100 |
Bekaert Slatina SRL | Slatina, Romania | RON | 100 |
Bekaert Slovakia sro | Sl\u00e1dkovi\u010dovo, Slovakia | EUR | 100 |
Bekintex NV | Wetteren, Belgium | EUR | 100 |
Bridon International GmbH | Gelsenkirchen, Germany | EUR | 100 |
Bridon International Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias del Ubierna SA | Burgos, Spain | EUR | 100 |
OOO Bekaert Lipetsk | Gryazi, Russian Federation | RUB | 100 |
VisionTek Engineering Srl | Rovereto, Italy | EUR | 100 |
North America | |||
Bekaert Corporation | Wilmington (Delaware), United States | USD | 100 |
Bridon-American Corporation | New York, United States | USD | 100 |
Latin America | |||
Acma SA | Santiago, Chile | CLP | 52 |
Acmanet SA | Talcahuano, Chile | CLP | 52 |
BBRG - Osasco Cabos Ltda | S\u00e3o Paulo, Brazil | BRL | 100 |
BIA Alambres Costa Rica SA | San Jos\u00e9-Santa Ana, Costa Rica | USD | 58 |
Ideal Alambrec SA | Quito, Ecuador | USD | 58 |
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Industrias Chilenas de Alambre - Inchalam SA | Talcahuano, Chile | CLP | 52 |
Prodinsa SA | Maip\u00fa, Chile | CLP | 100 |
Productora de Alambres Colombianos Proalco SAS | Bogot\u00e1, Colombia | COP | 40 |
Productos de Acero Cassad\u00f3 SA | Callao, Peru | USD | 38 |
Vicson SA | Valencia, Venezuela | USD | 80 |
Asia Pacific | |||
Bekaert Applied Material Technology (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Binjiang Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
Bekaert (China) Technology Research and Development Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert (Chongqing) Steel Cord Co Ltd | Chongqing, China | CNY | 100 |
Bekaert Industries Pvt Ltd | Taluka Shirur, District Pune, India | INR | 100 |
Bekaert (Jining) Steel Cord Co Ltd | Jining City, Yanzhou district (Shandong Province), China | CNY | 60 |
Bekaert Jiangyin Wire Products Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert Mukand Wire Industries Pvt Ltd | Pune, India | INR | 100 |
Bekaert New Materials (Suzhou) Co Ltd | Suzhou (Jiangsu province), China | CNY | 100 |
Bekaert (Qingdao) Wire Products Co Ltd | Qingdao (Shandong province), China | CNY | 100 |
Bekaert (Shandong) Tire Cord Co Ltd | Weihai (Shandong province), China | CNY | 100 |
Bekaert (Shenyang) Advanced Cords Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Shenyang Advanced Products Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Toko Metal Fiber Co Ltd | Tokyo, Japan | JPY | 70 |
Bekaert Vietnam Co Ltd | Son Tinh District, Quang Ngai Province, Vietnam | USD | 100 |
Bekaert Wire Ropes Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon (Hangzhou) Ropes Co Ltd | Hangzhou (Zhejiang province), China | CNY | 100 |
China Bekaert Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
PT Bekaert Indonesia | Karawang, Indonesia | USD | 100 |
PT Bekaert Wire Indonesia | Karawang, Indonesia | USD | 100 |
PT Bridon | Bekasi, West Java, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Emirates LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Figline SpA | Milano, Italy | EUR | 100 |
Bekaert France SAS | Lille, France | EUR | 100 |
Bekaert Gesellschaft mbH | Vienna, Austria | EUR | 100 |
Bekaert GmbH | Neu-Anspach, Germany | EUR | 100 |
Bekaert Middle East LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Norge AS | Oslo, Norway | NOK | 100 |
Bekaert Poland Sp z oo | Warsaw, Poland | PLN | 100 |
Bekaert (Schweiz) AG | Baden, Switzerland | CHF | 100 |
Bekaert Svenska AB | Gothenburg, Sweden | SEK | 100 |
Bridon-Bekaert ScanRope AS | Tonsberg, Norway | NOK | 100 |
Bridon Middle East FZE | Sharjah, United Arab Emirates | AED | 100 |
Bridon Scheme Trustees Ltd | Doncaster, United Kingdom | GBP | 100 |
British Ropes Ltd | Doncaster, United Kingdom | GBP | 100 |
Leon Bekaert SpA | Milano, Italy | EUR | 100 |
OOO Bekaert Wire | Moscow, Russian Federation | RUB | 100 |
Rylands-Whitecross Ltd | Bradford, United Kingdom | GBP | 100 |
Scheldestroom NV | Zwevegem, Belgium | EUR | 100 |
Twil Company | Bradford, United Kingdom | GBP | 100 |
North America | |||
Wire Rope Industries Ltd/Industries de C\u00e2bles d\u2019Acier Lt\u00e9e | Montr\u00e9al, Canada | CAD | 100 |
Latin America | |||
Bekaert Guatemala SA | Ciudad de Guatemala, Guatemala | GTQ | 58 |
Bekaert Specialty Films de Mexico SA de CV | Monterrey, Mexico | MXN | 100 |
Bekaert Trade Mexico S de RL de CV | Mexico City, Mexico | MXN | 100 |
Procables SA | Cercado de Lima, Peru | PEN | 96 |
Prodac Contrata SAC | Callao, Peru | USD | 38 |
Prodalam SA | Santiago, Chile | CLP | 52 |
Prodicom Selva SAC | Ucayali, Peru | USD | 38 |
Prodimin SAC | Lima, Peru | USD | 38 |
Specialty Films de Services Company SA de CV | Monterrey, Mexico | MXN | 100 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
Asia Pacific | |||
Bekaert Japan Co Ltd | Tokyo, Japan | JPY | 100 |
Bekaert Korea Ltd | Seoul, South-Korea | KRW | 100 |
Bekaert Malaysia Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Management (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Shah Alam Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Singapore Pte Ltd | Singapore | SGD | 100 |
Bekaert Taiwan Co Ltd | Taipei City | TWD | 100 |
Bekaert (Thailand) Co Ltd | Tambol Pluakdaeng, Amphur Pluakdaeng,Thailand | USD | 100 |
BOSFA Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon Hong Kong Ltd | Hong Kong, China | HKD | 100 |
Bridon New Zealand Ltd | Aukland, New Zealand | NZD | 100 |
Bridon Singapore (Pte) Ltd | Singapore | SGD | 100 |
Bridon (South East Asia) Ltd | Hong Kong, China | HKD | 100 |
PT Bekaert Trade Indonesia | Karawang, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Financial companies | Address | FC \u00b9 | % \u00b2 |
Acma Inversiones SA | Santiago, Chile | CLP | 100 |
BBRG Finance (UK) Ltd | Doncaster, United Kingdom | EUR | 100 |
Becare DAC | Dublin, Ireland | EUR | 100 |
Bekaert Building Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Carding Solutions Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Co\u00f6rdinatiecentrum NV | Zwevegem, Belgium | EUR | 100 |
Bekaert do Brasil Ltda | Contagem, Brazil | BRL | 100 |
Bekaert Holding Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Ib\u00e9rica Holding SL | Burgos, Spain | EUR | 100 |
Bekaert Ideal SL | Burgos, Spain | EUR | 80 |
Bekaert Investments NV | Zwevegem, Belgium | EUR | 100 |
Bekaert Investments Italia SpA | Milano, Italy | EUR | 100 |
Bekaert North America Management Corporation | Wilmington (Delaware), United States | USD | 100 |
Bekaert Services Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Singapore Holding Pte Ltd | Singapore | SGD | 100 |
Bekaert Specialty Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Stainless Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Steel Cord Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Strategic Partnerships Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Rope Industry NV | Zwevegem, Belgium | EUR | 100 |
Bridon-Bekaert Ropes Group Ltd | Doncaster, United Kingdom | EUR | 100 |
Bridon Holdings Ltd | Doncaster, United Kingdom | GBP | 100 |
Bridon Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias Acmanet Ltda | Talcahuano, Chile | CLP | 52 |
InverVicson SA | Valencia, Venezuela | USD | 80 |
Procercos SA | Talcahuano, Chile | CLP | 52 |
Joint ventures
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Latin America | |||
Agro-Bekaert Colombia SAS | Malambo - Atl\u00e1ntico, Colombia | COP | 40 |
Belgo Bekaert Arames Ltda | Contagem, Brazil | BRL | 45 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Vespasiano, Brazil | BRL | 45 |
Servicios Ideal AGF Inttegra Cia Ltda | Quito, Ecuador | USD | 29 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Netlon Sentinel Ltd | Blackburn, United Kingdom | GBP | 50 |
Asia Pacific | |||
Bekaert Engineering (India) Pvt Ltd | New Delhi, India | INR | 40 |
Financial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Agro - Bekaert Springs SL | Burgos, Spain | EUR | 40 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Changes in 2022
1. Subsidiaries acquired through business combinations
Subsidiaries | Address | % \u00b9 |
VisionTek Engineering Srl | Rovereto, Italy | 100 |
2. Mergers
Subsidiaries | Merged into |
Sujetar del Peru SAC | Productos de Acero Cassad\u00f3 SA |
3. Liquidated
Companies | Address |
Bekaert AS | Hellerup, Denmark |
Bekaert Architectural Design Consulting (Shanghai) Co Ltd | Shanghai, China |
Bekaert Heating Technology (Suzhou) Co Ltd | Taicang City (Jiangsu province), China |
In accordance with Belgian legislation, the table below lists the registered numbers of the Belgian companies.
Companies | Company number |
Bekaert Advanced Cords Aalter NV | BTW BE 0645.654.071 RPR Gent, division Gent |
Bekaert Co\u00f6rdinatiecentrum NV | BTW BE 0426.824.150 RPR Gent, division Kortrijk |
Bekaert Investments NV | BTW BE 0406.207.096 RPR Gent, division Kortrijk |
Bekaert Wire Rope Industry NV | BTW BE 0550.983.358 RPR Gent, division Kortrijk |
Bekintex NV | BTW BE 0452.746.609 RPR Gent, division Dendermonde |
NV Bekaert SA | BTW BE 0405.388.536 RPR Gent, division Kortrijk |
Scheldestroom NV | BTW BE 0403.676.188 RPR Gent, division Kortrijk |
2.1. Statement of compliance
The consolidated financial statements have been prepared in accordance with and comply with the International Financial Reporting Standards (IFRS) which have been endorsed by the European Union.
New and amended standards and interpretations
Standards, interpretations and amendments effective in 2022
In the current year, the Group has applied the below amendments to IFRS standards and Interpretations issued by the Board that are effective for an annual period that begins on or after 1 January 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
\u2022Amendments to IFRS 3 \u2018Business combinations\u2019 - References to the conceptual framework, effective\u00a01\u00a0January\u00a02022.
\u2022Amendments to IAS 16 \u2018Property, plant and equipment\u2019 - Proceeds before intended use, effective 1\u00a0January\u00a02022.
\u2022Amendments to IAS 37 \u2018Provisions, contingent liabilities and contingent assets\u2019 - onerous contracts - cost of fulfilling a contract, effective\u00a01\u00a0January\u00a02022.
\u2022Annual Improvements Cycle 2018-2020, effective\u00a01\u00a0January\u00a02022.
These amendments had no impact on the consolidated financial statements of the Group.
Standards, amendments and interpretations that are not yet effective in 2022 and have not been early adopted
The Group has not early adopted any other standards, interpretations or amendments that have been issued but are not yet effective. These new, and amendments to, standards and interpretations effective after 2022 are not expected to have a material impact on the financial statements.
\u2022Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019 - Classification of Liabilities as Current or Non-Current, effective 1\u00a0January\u00a02024.
\u2022Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019 - Disclosure of Accounting policies, effective 1\u00a0January\u00a02023.
\u2022Amendments to IAS 8 \u2018Accounting policies, changes in accounting estimates and errors\u2019 - Definition of Accounting estimates, effective 1\u00a0January\u00a02023.
\u2022Amendments to IAS 12 \u2018Income taxes\u2019 - Deferred taxes related to assets and liabilities arising from a single transaction, effective 1\u00a0January\u00a02023.
\u2022Amendments to IAS 16 'Leases - Lease liability in a Sale and Leaseback, effective on 1\u00a0January\u00a02024.
\u2022Amendments to IFRS 17 \u2018Insurance contracts; initial application of IFRS 17 and IFRS 9 - Comparative information', effective 1\u00a0January\u00a02023.
The Group will adopt these standards and interpretations, if applicable, when they come effective.
2.2. General principles
Basis of preparation
The consolidated financial statements are presented in thousands of euro (unless otherwise stated), under the historical cost convention, except for derivatives, financial assets at Stock and financial assets at FVTPL, which are stated at their fair value. Financial assets which do not have a quoted price in an active market or the fair value of which cannot be reliably measured are carried at cost. Unless explicitly stated, the accounting policies are applied consistently with the previous year. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
Principles of consolidation
Subsidiaries
Subsidiaries are entities over which NV Bekaert SA exercises control, which is the case when the Company is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date when the Group acquires control until the date when control is relinquished. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
\u2022The contractual arrangement(s) with the other vote holders of the investee
\u2022Rights arising from other contractual arrangements
\u2022The Group\u2019s voting rights and potential voting rights
All intercompany transactions, balances with and unrealized gains on transactions between Group companies are eliminated; unrealized losses are also eliminated unless the impairment is permanent. Equity and net result attributable to non-controlling shareholders are shown separately in the balance sheet, the income statement and the comprehensive income statement. Changes in the Group\u2019s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:
\u2022the aggregate of the fair value of the consideration received and the fair value of any retained interest; and
\u2022the carrying amount of the assets (including goodwill), liabilities and any non-controlling interests of the subsidiary before its disposal.
All subsidiaries are following the calendar year as accounting year, except for the Indian companies (from April to March) and Scheldestroom NV (from October to September). The latter do report to the Group according the calendar year. The subsidiaries apply the same accounting policies as the Group.
Joint arrangements and associates
A joint arrangement exists when NV Bekaert SA has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement can be treated as a joint operation (i.e. NV Bekaert SA has rights to the assets and obligations for the liabilities) or a joint venture (i.e. NV Bekaert SA only has rights to the net assets). Associates are companies in which NV Bekaert SA, directly or indirectly, has a significant influence and which are neither subsidiaries nor joint arrangements. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is prepared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or significant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially remeasured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and contingent liabilities acquired is recognized as goodwill. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group\u2019s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group\u2019s share of the losses of a joint venture or associate exceeds the carrying amount of the investment, the investment is carried at nil value and recognition of additional losses is limited to the extent of the Group\u2019s commitment. Unrealized gains arising from transactions with joint ventures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group\u2019s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within \u2018Group\u2019s share of the results of joint ventures and associates\u2019 in the statement of profit or loss. Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
The financial statements of the associate or joint venture are prepared according to the accounting and valuation principles of the Group and for the same reporting period as the Group.
Foreign currency translation
Items included in the financial statements of each of the Group\u2019s entities are measured using the currency of the primary economic environment in which the entity operates (\u2018the functional currency\u2019). The consolidated financial statements are presented in euro, which is the Company\u2019s functional and the Group\u2019s presentation currency. Financial statements of foreign entities are translated as follows:
\u2022assets and liabilities are translated at the closing exchange rate of the European Central Bank;
\u2022income, expenses and cash flows are translated at the average exchange rate for the year;
\u2022shareholders\u2019 equity is translated at historical exchange rates.
Exchange differences arising from the translation of the net investment in foreign subsidiaries, joint ventures and associates at the closing exchange rate are included in shareholders\u2019 equity under \u2018cumulative translation adjustments\u2019. On disposal of foreign entities, cumulative translation adjustments are recognized in the income statement as part of the gain or loss on the sale. In the financial statements of the parent company and its subsidiaries, monetary assets and liabilities denominated in foreign currency are translated at the exchange rate at the balance sheet date, thus giving rise to unrealized exchange results. Unrealized and realized foreign-exchange gains and losses are recognized in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Goodwill is treated as an asset of the acquiree and is accordingly accounted for in the acquiree\u2019s currency and translated at the closing rate.
2.3. Balance sheet items
Intangible assets
Intangible assets acquired in a business combination are initially measured at fair value; intangible assets acquired separately are initially measured at cost. After initial recognition, intangible assets are measured at cost or fair value less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The amortization period and method are reviewed at each financial year-end. A change in the useful life of an intangible asset is accounted for prospectively as a change in estimate. Under the provisions of IAS 38 intangible assets may have indefinite useful lives. If the useful life of an intangible asset is deemed indefinite, no amortization is recognized and the asset is reviewed at least annually for impairment.
Licenses, patents and similar rights
Expenditure on acquired licenses, patents, trademarks and similar rights is capitalized and amortized on a straight-line basis over the contractual period, if any, or the estimated useful life, which is normally considered not to be longer than ten years.
Computer software on-premises
Purchased on-premises software is installed and runs on computers on the premises of the company using the software, rather than at a remote facility such as a server farm or cloud. Generally, such costs are directly associated with the acquisition and implementation of acquired ERP software and are recognized as intangible assets and amortized over five years on a straight-line basis. External (relating to third party providers and consultants) and internal (relating to Bekaert personnel) implementation costs are eligible for capitalization.
Website development
An intangible asset should be recognized for website development costs if and only if, it meets the general recognition requirements in IAS 38 and the six conditions for recognition as development costs. Most important of these is the requirement to demonstrate how the website will generate probable future economic benefits. Costs linked to website development solely or primarily for promoting and advertising own products and services will be expensed as incurred. When the website is used directly or indirectly in the income generating process, the costs are eligible for capitalization.
Cloud computing arrangements
In a cloud computing arrangement, a customer pays a fee to a vendor in exchange for access to software over the internet. The software is hosted by the vendor on the vendor\u2019s computing infrastructure. Examples of cloud computing arrangements are Software-as-a-Service (SaaS), platform as a service, infrastructure as a service. This differs from an \u2018on-premise\u2019 arrangement where a company licenses or purchases a copy of the software from a vendor and operates the software on its own computing infrastructure. Up-front costs are often incurred in cloud computing arrangements to implement the software. To be eligible for capitalization as an intangible asset, the Group determines if the company is in control of the software or is in control of the configuration or implementation itself. The Group distinguishes the following types of cloud computing arrangements:
\u2022private cloud arrangements: these are in nature comparable to on-premise arrangements and are accounted for equally;
\u2022public cloud arrangements: configuration or implementation expenses linked to these arrangements are only eligible for capitalization if the Group is in control of the configuration or implementation itself.
Commercial assets
Commercial assets mainly include customer lists, customer contracts and brand names, mostly acquired in a business combination, with useful lives ranging between 8 and 15 years.
Emission rights
In the absence of any IASB standard or interpretation regulating the accounting treatment of CO2 emission rights, the Group has applied the \u2018net approach\u2019, according to which:
\u2022the allowances are recognized as intangible assets and measured at cost (the cost of allowances issued free of charge being therefore zero); and
\u2022any short position is recognized as a liability at the fair value of the allowances required to cover the shortfall at the balance sheet date.
Research and development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding is recognized in the income statement as an expense when it is incurred.
Expenditure on development activities where research findings are applied to a plan or design for the production of new or substantially improved products and processes prior to commercial production or use is capitalized if, and only if, all of the recognition criteria set out below are met:
\u2022the product or process is clearly defined and costs are separately identified and reliably measured;
\u2022the technical feasibility of the product is demonstrated;
\u2022the product or process is to be sold or used in house;
\u2022the assets are expected to generate future economic benefits (e.g. a potential market exists for the product or, if for internal use, its usefulness is demonstrated); and
\u2022adequate technical, financial and other resources required for completion of the project are available.
Capitalized development costs are amortized from the commencement of commercial production of the product on a straight-line basis over the period during which benefits are expected to accrue. The period of amortization normally does not exceed ten years. An in-process research and development project acquired in a business combination is recognized as an asset separately from goodwill if its fair value can be measured reliably.
Goodwill and business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred. The identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the difference between:
(i) the sum of the following elements:
\u2022consideration transferred;
\u2022amount of any non-controlling interests in the acquiree;
\u2022fair value of the Group\u2019s previously held equity interest in the acquiree (if\u00a0any); and
(ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, this difference is negative (\u2018negative goodwill\u2019), it is recognized immediately in profit or loss as a bargain purchase gain.
Non-controlling interests are initially measured either at fair value or at their proportionate share of the recognized amounts of the acquiree\u2019s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
When a business combination is achieved in stages, the Group\u2019s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and any resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest was disposed of.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Property, plant and equipment
The Group has opted for the historical cost model and not for the revaluation model. Property, plant and equipment separately acquired is initially measured at cost. Property, plant and equipment acquired in a business combination is initially measured at fair value, which thus becomes its deemed cost. Assets under construction are stated at cost, net of accumulated impairment losses, if any. After initial recognition, property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes all direct costs and all expenditure incurred to bring the asset to its working condition and location for its intended use. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognized in profit or loss as incurred.\u00a0
Depreciation is provided over the estimated useful lives of the various classes of property, plant and equipment on a straight-line basis. The useful life and depreciation method are reviewed at least at each financial year-end. Unless revised due to specific changes in the estimated economic useful life, annual depreciation rates are as follows:
\u2022land: 0%
\u2022buildings: 5%
\u2022plant, machinery & equipment: 8%-25%
\u2022R&D testing equipment: 16.7%-25%
\u2022furniture and vehicles: 20%
\u2022computer hardware: 20%
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.
Right-of-Use (RoU) property, plant & equipment
The Group as lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12\u00a0months or less) and leases of low value assets (such as printers, copiers and small office equipment). For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs.
They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the underlying asset. If a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Rights to use land are amortized over the contractual period which can vary between 30\u00a0and\u00a0100\u00a0years, but is in most cases 50 years. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36 to determine whether a right-of-use asset is impaired.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occurs. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead accounts for any lease and associated non-lease components as a single arrangement. The Group applies this practical expedient on contracts for company cars and industrial vehicles, where non-lease components such as maintenance and replacement of tires are not separated but included in the lease component.
Government grants
Government grants relating to the purchase of property, plant and equipment are deducted from the cost of these assets. They are recognized in the balance sheet at their expected value at the time of initial government approval and corrected, if necessary, after final approval. The grant is amortized over the depreciation period of the underlying assets.
Financial assets
The Group classifies its financial assets in the following categories: measured at amortized cost, at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). The classification depends on the contractual characteristics of the financial assets and the business model under which they are held. Management determines the classification of its financial assets at initial recognition.
Financial assets at amortized cost
Financial assets are classified at amortized cost when the contract has the characteristics of a basic lending arrangement and they are held with the intention of collecting the contractual cash flows until their maturity. The Group\u2019s financial assets at amortized cost comprises, unless stated otherwise, trade and other receivables, bills of exchange received, short-term deposits and cash and cash equivalents in the balance sheet. They are measured at amortized cost using the effective interest method, less any impairment.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022the rights to receive cash flows from the asset have expired
\u2022the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through arrangement\u2019; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extend, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extend of its continuing involvement. in that case, the Group also recognizes an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Financial assets at fair value
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges.
Bills of exchange received
Payment by means of bills of exchange (bank acceptance drafts) is a widespread practice in China. Bills of exchange received are either settled at maturity date, discounted before the maturity date or transferred to a creditor to settle a liability. Discounting is done either with or without recourse. With recourse means that the discounting bank can claim reimbursement of the amount paid in case the issuer defaults. When a bill is discounted with recourse, the amount received is not deducted from the outstanding bills of exchange received, but a liability is recognized in \u2018current interest-bearing debt\u2019 until the maturity date of that bill.
Cash & cash equivalents and short-term deposits\u00a0
Cash equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignificant risk of change in value. Cash equivalents are highly liquid and have original maturities of three months or less, while short-term deposits have original maturities of more than three months and less than one year. Balances from cash pool facilities are reported as cash & cash equivalents. Bank overdrafts are not reported as a deduction from cash & cash equivalents but as interest-bearing debt.
Impairment of financial assets
Financial assets that are debt instruments, other than those measured at FVTPL, are tested for impairment using the expected credit loss model (\u2018ECL\u2019). The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical experience and informed credit assessment and including forward-looking information. The Group always recognizes lifetime ECL for trade receivables.
At each reporting date, Bekaert measures the impairment loss for financial assets measured at amortized cost (e.g. trade receivables and bills of exchange received) as the present value of the expected cash shortfalls (discounted at the original effective interest rate). Amounts deemed uncollectible are written off against the corresponding allowance account at each balance sheet date. In assessing collective impairment, the Group uses historical information on the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. Additions to and recoveries from the bad debt allowance account related to trade receivables are reported under \u2018selling expenses\u2019 in the income statement.
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is determined by the first-in, first-out (FIFO) method. For processed inventories, cost means full cost including all direct and indirect production costs required to bring the inventory items to the stage of completion at the balance sheet date. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and costs necessary to make the sale.
Share capital
When shares are repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Repurchased shares (treasury shares) are presented in the balance sheet as a deduction from equity. The result on the disposal of treasury shares sold or cancelled is recognized in retained earnings.
Non-controlling interests
Non-controlling interests represent the shares of minority or non-controlling shareholders in the equity of subsidiaries which are not fully owned by the Group. At the acquisition date, the item is either measured at its fair value or at the non-controlling shareholders\u2019 proportion of the fair values of net assets recognized on acquisition of a subsidiary (business combination). Subsequently, it is adjusted for the appropriate proportion of subsequent profits and losses. The losses attributable to non-controlling shareholders in a consolidated subsidiary may exceed their interest in the equity of the subsidiary. A proportional share of total comprehensive income is attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Provisions
Provisions are recognized in the balance sheet when the Group has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. When appropriate, provisions are measured on a discounted basis.
Restructuring
A provision for restructuring is only recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly before the balance sheet date. Restructuring provisions only include the direct expenditure arising from the restructuring which is necessarily incurred on the restructuring and is not associated with the ongoing activities of the entity.
Site remediation
A provision for site remediation in respect of contaminated land is recognized in accordance with the Group\u2019s published environmental policy and applicable legal requirements.
Employee benefit obligations
The parent company and several of its subsidiaries have pension, death benefit and health care benefit plans covering a substantial part of their workforce.
Defined-benefit plans
Most pension plans are defined-benefit plans with benefits based on years of service and level of remuneration. For defined-benefit plans, the amount recognized in the balance sheet (net liability or asset) is the present value of the defined-benefit obligation less the fair value of any plan assets. The present value of the defined-benefit obligation is the present value, without deducting any plan assets, of expected future payments required to settle the obligation resulting from employee service in the current and prior periods. The present value of the defined-benefit obligation and the related current and past service costs are calculated using the projected unit credit method. The discount rate used is the yield at balance sheet date on high-quality corporate bonds with remaining terms to maturity approximating those of the Group\u2019s obligations. In case the fair value of plan assets exceeds the present value of the defined-benefit obligations, the net asset is limited to the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The net interest on the net defined-benefit liability/asset is based on the same discount rate. Actuarial gains and losses comprise experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred) and the effects of changes in actuarial assumptions. Past service cost is the change in the present value of the defined-benefit obligation for employee service in prior periods and resulting in the current period from a plan amendment or a curtailment. Past service costs are recognized immediately through profit or loss. Remeasurements of the net defined-benefit liability (asset) comprise (a) actuarial gains and losses, (b) the return on plan assets, after deduction of the amounts included in net interest on the net defined-benefit liability
(asset) and (c) any change in the effect of the asset ceiling, after deduction of any amounts included in net interest on the net defined-benefit liability (asset). Remeasurements are recognized immediately through equity. A settlement is a transaction that eliminates all further legal or constructive obligations for part or all of the benefits provided under a defined-benefit plan, other than a payment of benefits to, or on behalf of, employees that is set out in the terms of the plan and included in the actuarial assumptions.
In the income statement, current and past service cost, including gains or losses from settlements, are included in the operating result (EBIT), and the net interest on the net defined-benefit liability (asset) is included in interest expense, under interest on interest-bearing provisions. Pre-retirement pensions in Belgium and plans for medical care in the United States are also treated as defined-benefit plans.
Defined-contribution plans
Obligations in respect of contributions to defined-contribution pension plans are recognized as an expense in the income statement as they fall due. By law, defined-contribution pension plans in Belgium are subject to minimum guaranteed rates of return. Before 2015, the defined-contribution plans in Belgium were basically accounted for as defined-contribution plans. New legislation dated December 2015 however triggered the qualification. As a consequence, the defined-contribution plans are reported as defined-benefit obligations, whereby as from year end 2016 an actuarial valuation was performed.
Other long-term employee benefits
Other long-term employee benefits, such as service awards, are accounted for using the projected unit credit method. However, the accounting method differs from the method applied for post-employment benefits, as actuarial gains and losses are recognized immediately through profit or loss.
Share-based payment plans
The Group issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled plans allow Group employees to acquire shares of NV Bekaert SA, and include stock option plans (\u2018SOP\u2019),
performance share plans (\u2018PSP\u2019), personal shareholding requirement plans (\u2018PSR\u2019) and stock grants, all of which are operated in Belgium. Cash-settled plans entitle Group employees to receive payment of cash bonuses based on the price of the Bekaert share on the Euronext stock exchange, and include share appreciation rights (\u2018SAR\u2019) and performance share unit plans (\u2018PSU\u2019), all of which are operated outside Belgium.
Equity-settled share-based payments are recognized at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed, with a corresponding increase in equity, on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of equity instruments granted that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Cash-settled share-based payments are recognized as liabilities over the vesting period at fair value, which is remeasured at each reporting date and at the date of settlement. Changes in fair value are recognized in the income statement over the vesting period, taking into account the number of units or rights expected to vest.
The Group uses binomial models or Monte Carlo simulations to determine the fair value of the share-based payment plans.
Interest-bearing debt
Interest-bearing debt includes loans and borrowings which are initially recognized at the fair value of the consideration received net of transaction costs incurred. In subsequent periods, they are carried at amortized cost using the effective interest-method, any difference between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If financial liabilities are hedged using derivatives qualifying as a fair value hedge, the hedging instruments are carried at fair value and the hedged items are remeasured for fair value changes due to the hedged risk (see accounting policies for derivatives and hedging).
Lease liabilities
Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
\u2022fixed lease payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
\u2022the amount expected to be payable by the lessee, under residual value guarantees;
\u2022the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
\u2022payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
\u2022The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
\u2022The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate.
\u2022A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Trade payables and other current liabilities
Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company.
Income taxes
Income taxes are classified as either current or deferred taxes. Current income taxes include expected tax charges based on the accounting profit for the current year and adjustments to tax charges of prior years. In evaluating the potential income tax liabilities, the Group assumes that the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations. The Group takes into account both the assessments, decisions and verdicts received from tax audits and other kinds of information sources as well as the potential sources of challenge from tax authorities. The Group recognizes a liability when the Group assesses it is not probable for the tax authorities to accept the position that the Group takes regarding the tax treatment in question. The Group measures the income tax liability according to the most likely amount of the potential economic outflow. However, Bekaert continues to believe that its positions on all these audits are robust.
Deferred taxes are calculated, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred taxes are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled, based on tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized; this criterion is reassessed at each balance sheet date. In assessing the recoverability of deferred tax assets, the Group relies on the forecast assumptions used elsewhere in the financial statements and in other management reports. Deferred tax on temporary differences arising on investments in subsidiaries, associates and joint ventures is provided for, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Impairment of assets
Goodwill and intangible assets with an indefinite useful life or not yet available for use (if any) are reviewed for impairment at least annually; other tangible and intangible fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized in the income statement as and when the carrying amount of an asset exceeds its recoverable amount (being the higher of its fair value less costs of disposal and its value in use). The fair value less costs of disposal is the amount obtainable from the sale of an asset in an arm\u2019s length transaction less the costs of disposal, while value in use is the present value of the future cash flows expected to be derived from an asset. Recoverable amounts are estimated for individual assets or, if this is not possible, for the smallest cash-generating unit to which the assets belong. Reversal of impairment losses recognized in prior years is included as income when there is an indication that the impairment losses recognized for the asset are no longer needed or the need has decreased, except for impairment losses on goodwill, which are never reversed.
2.4. Income statement items
Revenue recognition
The Group recognizes revenue mainly from the sale of products. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognizes revenue from the sale of products when it transfers control over the corresponding product to a customer. Revenue from the sale of products is recognized at a point in time. Sales are recognized net of sales taxes and discounts. Interest is recognized on a time-proportional basis that reflects the effective yield on the asset. The Group recognizes revenue for a sales-based or usage-based royalty only when (or as) the later of the following events occurs: the subsequent sale or usage occurs; and the performance obligation to which some or all of the sales-based or usage-based royalties has been allocated has been satisfied. Royalties are recognized on an accrual basis in accordance with the terms of agreements and are linked to technology and management support. Dividends are recognized when the shareholder\u2019s right to receive payment is established.
2.1. Statement of compliance
The consolidated financial statements have been prepared in accordance with and comply with the International Financial Reporting Standards (IFRS) which have been endorsed by the European Union.
Basis of preparation
The consolidated financial statements are presented in thousands of euro (unless otherwise stated), under the historical cost convention, except for derivatives, financial assets at Stock and financial assets at FVTPL, which are stated at their fair value. Financial assets which do not have a quoted price in an active market or the fair value of which cannot be reliably measured are carried at cost. Unless explicitly stated, the accounting policies are applied consistently with the previous year. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
Basis of preparation
The consolidated financial statements are presented in thousands of euro (unless otherwise stated), under the historical cost convention, except for derivatives, financial assets at Stock and financial assets at FVTPL, which are stated at their fair value. Financial assets which do not have a quoted price in an active market or the fair value of which cannot be reliably measured are carried at cost. Unless explicitly stated, the accounting policies are applied consistently with the previous year. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
Principles of consolidation
Subsidiaries
Subsidiaries are entities over which NV Bekaert SA exercises control, which is the case when the Company is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date when the Group acquires control until the date when control is relinquished. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
\u2022The contractual arrangement(s) with the other vote holders of the investee
\u2022Rights arising from other contractual arrangements
\u2022The Group\u2019s voting rights and potential voting rights
All intercompany transactions, balances with and unrealized gains on transactions between Group companies are eliminated; unrealized losses are also eliminated unless the impairment is permanent. Equity and net result attributable to non-controlling shareholders are shown separately in the balance sheet, the income statement and the comprehensive income statement. Changes in the Group\u2019s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:
\u2022the aggregate of the fair value of the consideration received and the fair value of any retained interest; and
\u2022the carrying amount of the assets (including goodwill), liabilities and any non-controlling interests of the subsidiary before its disposal.
All subsidiaries are following the calendar year as accounting year, except for the Indian companies (from April to March) and Scheldestroom NV (from October to September). The latter do report to the Group according the calendar year. The subsidiaries apply the same accounting policies as the Group.
Joint arrangements and associates
A joint arrangement exists when NV Bekaert SA has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement can be treated as a joint operation (i.e. NV Bekaert SA has rights to the assets and obligations for the liabilities) or a joint venture (i.e. NV Bekaert SA only has rights to the net assets). Associates are companies in which NV Bekaert SA, directly or indirectly, has a significant influence and which are neither subsidiaries nor joint arrangements. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is prepared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or significant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially remeasured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and contingent liabilities acquired is recognized as goodwill. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group\u2019s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group\u2019s share of the losses of a joint venture or associate exceeds the carrying amount of the investment, the investment is carried at nil value and recognition of additional losses is limited to the extent of the Group\u2019s commitment. Unrealized gains arising from transactions with joint ventures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group\u2019s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within \u2018Group\u2019s share of the results of joint ventures and associates\u2019 in the statement of profit or loss. Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
Principles of consolidation
Subsidiaries
Subsidiaries are entities over which NV Bekaert SA exercises control, which is the case when the Company is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date when the Group acquires control until the date when control is relinquished. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
\u2022The contractual arrangement(s) with the other vote holders of the investee
\u2022Rights arising from other contractual arrangements
\u2022The Group\u2019s voting rights and potential voting rights
All intercompany transactions, balances with and unrealized gains on transactions between Group companies are eliminated; unrealized losses are also eliminated unless the impairment is permanent. Equity and net result attributable to non-controlling shareholders are shown separately in the balance sheet, the income statement and the comprehensive income statement. Changes in the Group\u2019s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:
\u2022the aggregate of the fair value of the consideration received and the fair value of any retained interest; and
\u2022the carrying amount of the assets (including goodwill), liabilities and any non-controlling interests of the subsidiary before its disposal.
All subsidiaries are following the calendar year as accounting year, except for the Indian companies (from April to March) and Scheldestroom NV (from October to September). The latter do report to the Group according the calendar year. The subsidiaries apply the same accounting policies as the Group.
Joint arrangements and associates
A joint arrangement exists when NV Bekaert SA has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement can be treated as a joint operation (i.e. NV Bekaert SA has rights to the assets and obligations for the liabilities) or a joint venture (i.e. NV Bekaert SA only has rights to the net assets). Associates are companies in which NV Bekaert SA, directly or indirectly, has a significant influence and which are neither subsidiaries nor joint arrangements. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is prepared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or significant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially remeasured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and contingent liabilities acquired is recognized as goodwill. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group\u2019s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group\u2019s share of the losses of a joint venture or associate exceeds the carrying amount of the investment, the investment is carried at nil value and recognition of additional losses is limited to the extent of the Group\u2019s commitment. Unrealized gains arising from transactions with joint ventures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group\u2019s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within \u2018Group\u2019s share of the results of joint ventures and associates\u2019 in the statement of profit or loss. Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
Joint arrangements and associates
A joint arrangement exists when NV Bekaert SA has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement can be treated as a joint operation (i.e. NV Bekaert SA has rights to the assets and obligations for the liabilities) or a joint venture (i.e. NV Bekaert SA only has rights to the net assets). Associates are companies in which NV Bekaert SA, directly or indirectly, has a significant influence and which are neither subsidiaries nor joint arrangements. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is prepared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or significant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially remeasured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and contingent liabilities acquired is recognized as goodwill. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group\u2019s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group\u2019s share of the losses of a joint venture or associate exceeds the carrying amount of the investment, the investment is carried at nil value and recognition of additional losses is limited to the extent of the Group\u2019s commitment. Unrealized gains arising from transactions with joint ventures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group\u2019s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within \u2018Group\u2019s share of the results of joint ventures and associates\u2019 in the statement of profit or loss. Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
Joint arrangements and associates
A joint arrangement exists when NV Bekaert SA has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement can be treated as a joint operation (i.e. NV Bekaert SA has rights to the assets and obligations for the liabilities) or a joint venture (i.e. NV Bekaert SA only has rights to the net assets). Associates are companies in which NV Bekaert SA, directly or indirectly, has a significant influence and which are neither subsidiaries nor joint arrangements. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is prepared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or significant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially remeasured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and contingent liabilities acquired is recognized as goodwill. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group\u2019s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group\u2019s share of the losses of a joint venture or associate exceeds the carrying amount of the investment, the investment is carried at nil value and recognition of additional losses is limited to the extent of the Group\u2019s commitment. Unrealized gains arising from transactions with joint ventures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group\u2019s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within \u2018Group\u2019s share of the results of joint ventures and associates\u2019 in the statement of profit or loss. Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
Currency risk
The Group\u2019s currency risk can be split into two categories: translational and transactional currency risk.
Translational currency risk
A translational currency risk arises when the financial data of foreign subsidiaries are converted into the Group\u2019s presentation currency, the euro. The main currencies are Chinese renminbi, US dollar, Czech koruna, Brazilian real, Chilean peso, Russian ruble, Indian rupee and pound sterling. Since there is no impact on the cash flows, the Group usually does not hedge against such risk.
Transactional currency risk
The Group is exposed to transactional currency risks resulting from its operating, investing and financing activities.
Foreign currency risk in the area of operating activities arises from commercial activities with sales and purchases in foreign currencies, as well as payments and receipts of royalties. The Group uses forward-exchange contracts to limit the currency risk on the forecasted cash inflows and outflows for the coming three months. Significant exposures and firm commitments beyond that time frame may also be covered.
Foreign currency risk in the area of investment results from the acquisition and disposal of investments in foreign companies, and sometimes also from dividends receivable from foreign investments. If material, these risks are hedged by means of forward exchange contracts.
Foreign currency risk in the financing area results from financial liabilities in foreign currencies. In line with its policy, Group Treasury hedges these risks using cross-currency interest-rate swaps and forward exchange contracts to convert financial obligations denominated in foreign currencies into the entity\u2019s functional currency. At the reporting date, the foreign currency liabilities for which currency risks were hedged mainly consisted of intercompany loans in euro and US dollar.
Currency sensitivity analysis
Currency sensitivity relating to the operating, investing and financing activities
The following table summarizes the Group\u2019s net foreign currency positions of operating, investing and financing receivables and payables at the reporting date for the most important currency pairs. The net currency positions are presented before intercompany eliminations. Positive amounts indicate that the Group has a net future cash inflow in the first currency. In the table, the \u2018Total exposure\u2019 column represents the position on the balance sheet, while the \u2018Total derivatives\u2019 column includes all financial derivatives hedging those balance sheet positions as well as forecasted transactions.
Currency pair - 2021 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | -6\u00a0506 | -8\u00a0323 | -14\u00a0829 |
CAD/EUR | -11\u00a0171 | \u2014 | -11\u00a0171 |
CZK/EUR | 24\u00a0625 | -1\u00a0132 | 23\u00a0493 |
EUR/CNY | -17\u00a0706 | \u2014 | -17\u00a0706 |
EUR/GBP | 12\u00a0479 | 6\u00a0206 | 18\u00a0685 |
EUR/INR | -27\u00a0084 | 19\u00a0725 | -7\u00a0359 |
EUR/MYR | -12\u00a0495 | \u2014 | -12\u00a0495 |
EUR/RON | -39\u00a0256 | \u2014 | -39\u00a0256 |
EUR/RUB | -35\u00a0641 | 22\u00a0134 | -13\u00a0507 |
IDR/USD | -13\u00a0740 | \u2014 | -13\u00a0740 |
JPY/CNY | 8\u00a0229 | -1\u00a0925 | 6\u00a0304 |
JPY/USD | 5\u00a0888 | -3\u00a0362 | 2\u00a0526 |
NOK/GBP | 16\u00a0221 | \u2014 | 16\u00a0221 |
USD/BRL | -10\u00a0822 | \u2014 | -10\u00a0822 |
USD/CLP | -18\u00a0970 | \u2014 | -18\u00a0970 |
USD/CNY | 35\u00a0648 | 11\u00a0528 | 47\u00a0176 |
USD/EUR | 140\u00a0008 | -96\u00a0566 | 43\u00a0442 |
USD/INR | -48\u00a0924 | \u2014 | -48\u00a0924 |
USD/MXN | -5\u00a0939 | \u2014 | -5\u00a0939 |
USD/RUB | -6\u00a0970 | \u2014 | -6\u00a0970 |
Currency pair - 2022 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | 540 | -8\u00a0866 | -8\u00a0326 |
BRL/EUR | 18\u00a0504 | \u2014 | 18\u00a0504 |
CLP/EUR | 5\u00a0696 | \u2014 | 5\u00a0696 |
CZK/EUR | 23\u00a0458 | 572 | 24\u00a0030 |
EUR/CNY | -19\u00a0024 | \u2014 | -19\u00a0024 |
EUR/GBP | -47\u00a0925 | 11\u00a0669 | -36\u00a0256 |
EUR/INR | -13\u00a0018 | \u2014 | -13\u00a0018 |
EUR/MYR | -13\u00a0114 | \u2014 | -13\u00a0114 |
EUR/RON | -34\u00a0186 | \u2014 | -34\u00a0186 |
EUR/RUB | -46\u00a0298 | \u2014 | -46\u00a0298 |
IDR/USD | -20\u00a0872 | \u2014 | -20\u00a0872 |
JPY/CNY | 6\u00a0695 | -2\u00a0285 | 4\u00a0410 |
USD/BRL | -7\u00a0319 | \u2014 | -7\u00a0319 |
USD/CAD | 14\u00a0569 | -14\u00a0400 | 169 |
USD/CNY | 43\u00a0243 | \u2014 | 43\u00a0243 |
USD/EUR | 161\u00a0321 | -126\u00a0037 | 35\u00a0284 |
USD/GBP | 8\u00a0948 | \u2014 | 8\u00a0948 |
USD/INR | -50\u00a0110 | \u2014 | -50\u00a0110 |
USD/MXN | -6\u00a0641 | \u2014 | -6\u00a0641 |
The reasonably possible changes used in this calculation were based on annualized volatility relating to the daily movement of the exchange rate of the reported year, with a 95%\u00a0confidence interval.
If rates had weakened/strengthened by such changes with all other variables constant, the result for the period before taxes would have been \u20ac\u00a00.5\u00a0million lower/higher (\u20ac\u00a039.7\u00a0million higher or lower if ruble position is included) (2021:\u00a0\u20ac\u00a010.8\u00a0million).
Currency sensitivity in relation to hedge accounting
At 31 December 2022 the Group does not apply hedge accounting (also none at 31 December 2021).
Intangible assets
Intangible assets acquired in a business combination are initially measured at fair value; intangible assets acquired separately are initially measured at cost. After initial recognition, intangible assets are measured at cost or fair value less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The amortization period and method are reviewed at each financial year-end. A change in the useful life of an intangible asset is accounted for prospectively as a change in estimate. Under the provisions of IAS 38 intangible assets may have indefinite useful lives. If the useful life of an intangible asset is deemed indefinite, no amortization is recognized and the asset is reviewed at least annually for impairment.
Licenses, patents and similar rights
Expenditure on acquired licenses, patents, trademarks and similar rights is capitalized and amortized on a straight-line basis over the contractual period, if any, or the estimated useful life, which is normally considered not to be longer than ten years.
Computer software on-premises
Purchased on-premises software is installed and runs on computers on the premises of the company using the software, rather than at a remote facility such as a server farm or cloud. Generally, such costs are directly associated with the acquisition and implementation of acquired ERP software and are recognized as intangible assets and amortized over five years on a straight-line basis. External (relating to third party providers and consultants) and internal (relating to Bekaert personnel) implementation costs are eligible for capitalization.
Website development
An intangible asset should be recognized for website development costs if and only if, it meets the general recognition requirements in IAS 38 and the six conditions for recognition as development costs. Most important of these is the requirement to demonstrate how the website will generate probable future economic benefits. Costs linked to website development solely or primarily for promoting and advertising own products and services will be expensed as incurred. When the website is used directly or indirectly in the income generating process, the costs are eligible for capitalization.
Cloud computing arrangements
In a cloud computing arrangement, a customer pays a fee to a vendor in exchange for access to software over the internet. The software is hosted by the vendor on the vendor\u2019s computing infrastructure. Examples of cloud computing arrangements are Software-as-a-Service (SaaS), platform as a service, infrastructure as a service. This differs from an \u2018on-premise\u2019 arrangement where a company licenses or purchases a copy of the software from a vendor and operates the software on its own computing infrastructure. Up-front costs are often incurred in cloud computing arrangements to implement the software. To be eligible for capitalization as an intangible asset, the Group determines if the company is in control of the software or is in control of the configuration or implementation itself. The Group distinguishes the following types of cloud computing arrangements:
\u2022private cloud arrangements: these are in nature comparable to on-premise arrangements and are accounted for equally;
\u2022public cloud arrangements: configuration or implementation expenses linked to these arrangements are only eligible for capitalization if the Group is in control of the configuration or implementation itself.
Commercial assets
Commercial assets mainly include customer lists, customer contracts and brand names, mostly acquired in a business combination, with useful lives ranging between 8 and 15 years.
Emission rights
In the absence of any IASB standard or interpretation regulating the accounting treatment of CO2 emission rights, the Group has applied the \u2018net approach\u2019, according to which:
\u2022the allowances are recognized as intangible assets and measured at cost (the cost of allowances issued free of charge being therefore zero); and
\u2022any short position is recognized as a liability at the fair value of the allowances required to cover the shortfall at the balance sheet date.
Research and development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding is recognized in the income statement as an expense when it is incurred.
Expenditure on development activities where research findings are applied to a plan or design for the production of new or substantially improved products and processes prior to commercial production or use is capitalized if, and only if, all of the recognition criteria set out below are met:
\u2022the product or process is clearly defined and costs are separately identified and reliably measured;
\u2022the technical feasibility of the product is demonstrated;
\u2022the product or process is to be sold or used in house;
\u2022the assets are expected to generate future economic benefits (e.g. a potential market exists for the product or, if for internal use, its usefulness is demonstrated); and
\u2022adequate technical, financial and other resources required for completion of the project are available.
Capitalized development costs are amortized from the commencement of commercial production of the product on a straight-line basis over the period during which benefits are expected to accrue. The period of amortization normally does not exceed ten years. An in-process research and development project acquired in a business combination is recognized as an asset separately from goodwill if its fair value can be measured reliably.
Goodwill and business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred. The identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the difference between:
(i) the sum of the following elements:
\u2022consideration transferred;
\u2022amount of any non-controlling interests in the acquiree;
\u2022fair value of the Group\u2019s previously held equity interest in the acquiree (if\u00a0any); and
(ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, this difference is negative (\u2018negative goodwill\u2019), it is recognized immediately in profit or loss as a bargain purchase gain.
Non-controlling interests are initially measured either at fair value or at their proportionate share of the recognized amounts of the acquiree\u2019s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
When a business combination is achieved in stages, the Group\u2019s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and any resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest was disposed of.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Intangible assets
Intangible assets acquired in a business combination are initially measured at fair value; intangible assets acquired separately are initially measured at cost. After initial recognition, intangible assets are measured at cost or fair value less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The amortization period and method are reviewed at each financial year-end. A change in the useful life of an intangible asset is accounted for prospectively as a change in estimate. Under the provisions of IAS 38 intangible assets may have indefinite useful lives. If the useful life of an intangible asset is deemed indefinite, no amortization is recognized and the asset is reviewed at least annually for impairment.
Licenses, patents and similar rights
Expenditure on acquired licenses, patents, trademarks and similar rights is capitalized and amortized on a straight-line basis over the contractual period, if any, or the estimated useful life, which is normally considered not to be longer than ten years.
Computer software on-premises
Purchased on-premises software is installed and runs on computers on the premises of the company using the software, rather than at a remote facility such as a server farm or cloud. Generally, such costs are directly associated with the acquisition and implementation of acquired ERP software and are recognized as intangible assets and amortized over five years on a straight-line basis. External (relating to third party providers and consultants) and internal (relating to Bekaert personnel) implementation costs are eligible for capitalization.
Website development
An intangible asset should be recognized for website development costs if and only if, it meets the general recognition requirements in IAS 38 and the six conditions for recognition as development costs. Most important of these is the requirement to demonstrate how the website will generate probable future economic benefits. Costs linked to website development solely or primarily for promoting and advertising own products and services will be expensed as incurred. When the website is used directly or indirectly in the income generating process, the costs are eligible for capitalization.
Cloud computing arrangements
In a cloud computing arrangement, a customer pays a fee to a vendor in exchange for access to software over the internet. The software is hosted by the vendor on the vendor\u2019s computing infrastructure. Examples of cloud computing arrangements are Software-as-a-Service (SaaS), platform as a service, infrastructure as a service. This differs from an \u2018on-premise\u2019 arrangement where a company licenses or purchases a copy of the software from a vendor and operates the software on its own computing infrastructure. Up-front costs are often incurred in cloud computing arrangements to implement the software. To be eligible for capitalization as an intangible asset, the Group determines if the company is in control of the software or is in control of the configuration or implementation itself. The Group distinguishes the following types of cloud computing arrangements:
\u2022private cloud arrangements: these are in nature comparable to on-premise arrangements and are accounted for equally;
\u2022public cloud arrangements: configuration or implementation expenses linked to these arrangements are only eligible for capitalization if the Group is in control of the configuration or implementation itself.
Commercial assets
Commercial assets mainly include customer lists, customer contracts and brand names, mostly acquired in a business combination, with useful lives ranging between 8 and 15 years.
Emission rights
In the absence of any IASB standard or interpretation regulating the accounting treatment of CO2 emission rights, the Group has applied the \u2018net approach\u2019, according to which:
\u2022the allowances are recognized as intangible assets and measured at cost (the cost of allowances issued free of charge being therefore zero); and
\u2022any short position is recognized as a liability at the fair value of the allowances required to cover the shortfall at the balance sheet date.
Research and development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding is recognized in the income statement as an expense when it is incurred.
Expenditure on development activities where research findings are applied to a plan or design for the production of new or substantially improved products and processes prior to commercial production or use is capitalized if, and only if, all of the recognition criteria set out below are met:
\u2022the product or process is clearly defined and costs are separately identified and reliably measured;
\u2022the technical feasibility of the product is demonstrated;
\u2022the product or process is to be sold or used in house;
\u2022the assets are expected to generate future economic benefits (e.g. a potential market exists for the product or, if for internal use, its usefulness is demonstrated); and
\u2022adequate technical, financial and other resources required for completion of the project are available.
Capitalized development costs are amortized from the commencement of commercial production of the product on a straight-line basis over the period during which benefits are expected to accrue. The period of amortization normally does not exceed ten years. An in-process research and development project acquired in a business combination is recognized as an asset separately from goodwill if its fair value can be measured reliably.
Emission rights
In the absence of any IASB standard or interpretation regulating the accounting treatment of CO2 emission rights, the Group has applied the \u2018net approach\u2019, according to which:
\u2022the allowances are recognized as intangible assets and measured at cost (the cost of allowances issued free of charge being therefore zero); and
\u2022any short position is recognized as a liability at the fair value of the allowances required to cover the shortfall at the balance sheet date.
Research and development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding is recognized in the income statement as an expense when it is incurred.
Expenditure on development activities where research findings are applied to a plan or design for the production of new or substantially improved products and processes prior to commercial production or use is capitalized if, and only if, all of the recognition criteria set out below are met:
\u2022the product or process is clearly defined and costs are separately identified and reliably measured;
\u2022the technical feasibility of the product is demonstrated;
\u2022the product or process is to be sold or used in house;
\u2022the assets are expected to generate future economic benefits (e.g. a potential market exists for the product or, if for internal use, its usefulness is demonstrated); and
\u2022adequate technical, financial and other resources required for completion of the project are available.
Goodwill and business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred. The identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the difference between:
(i) the sum of the following elements:
\u2022consideration transferred;
\u2022amount of any non-controlling interests in the acquiree;
\u2022fair value of the Group\u2019s previously held equity interest in the acquiree (if\u00a0any); and
(ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, this difference is negative (\u2018negative goodwill\u2019), it is recognized immediately in profit or loss as a bargain purchase gain.
Non-controlling interests are initially measured either at fair value or at their proportionate share of the recognized amounts of the acquiree\u2019s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
When a business combination is achieved in stages, the Group\u2019s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and any resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest was disposed of.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Non-controlling interests
Non-controlling interests represent the shares of minority or non-controlling shareholders in the equity of subsidiaries which are not fully owned by the Group. At the acquisition date, the item is either measured at its fair value or at the non-controlling shareholders\u2019 proportion of the fair values of net assets recognized on acquisition of a subsidiary (business combination). Subsequently, it is adjusted for the appropriate proportion of subsequent profits and losses. The losses attributable to non-controlling shareholders in a consolidated subsidiary may exceed their interest in the equity of the subsidiary. A proportional share of total comprehensive income is attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Goodwill and business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred. The identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the difference between:
(i) the sum of the following elements:
\u2022consideration transferred;
\u2022amount of any non-controlling interests in the acquiree;
\u2022fair value of the Group\u2019s previously held equity interest in the acquiree (if\u00a0any); and
(ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, this difference is negative (\u2018negative goodwill\u2019), it is recognized immediately in profit or loss as a bargain purchase gain.
Non-controlling interests are initially measured either at fair value or at their proportionate share of the recognized amounts of the acquiree\u2019s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
When a business combination is achieved in stages, the Group\u2019s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and any resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest was disposed of.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Goodwill and business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred. The identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the difference between:
(i) the sum of the following elements:
\u2022consideration transferred;
\u2022amount of any non-controlling interests in the acquiree;
\u2022fair value of the Group\u2019s previously held equity interest in the acquiree (if\u00a0any); and
(ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, this difference is negative (\u2018negative goodwill\u2019), it is recognized immediately in profit or loss as a bargain purchase gain.
Non-controlling interests are initially measured either at fair value or at their proportionate share of the recognized amounts of the acquiree\u2019s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
When a business combination is achieved in stages, the Group\u2019s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and any resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest was disposed of.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Impairment of assets
Goodwill and intangible assets with an indefinite useful life or not yet available for use (if any) are reviewed for impairment at least annually; other tangible and intangible fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized in the income statement as and when the carrying amount of an asset exceeds its recoverable amount (being the higher of its fair value less costs of disposal and its value in use). The fair value less costs of disposal is the amount obtainable from the sale of an asset in an arm\u2019s length transaction less the costs of disposal, while value in use is the present value of the future cash flows expected to be derived from an asset. Recoverable amounts are estimated for individual assets or, if this is not possible, for the smallest cash-generating unit to which the assets belong. Reversal of impairment losses recognized in prior years is included as income when there is an indication that the impairment losses recognized for the asset are no longer needed or the need has decreased, except for impairment losses on goodwill, which are never reversed.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit\u2019s value may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit in proportion to the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Impairment of financial assets
Financial assets that are debt instruments, other than those measured at FVTPL, are tested for impairment using the expected credit loss model (\u2018ECL\u2019). The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical experience and informed credit assessment and including forward-looking information. The Group always recognizes lifetime ECL for trade receivables.
At each reporting date, Bekaert measures the impairment loss for financial assets measured at amortized cost (e.g. trade receivables and bills of exchange received) as the present value of the expected cash shortfalls (discounted at the original effective interest rate). Amounts deemed uncollectible are written off against the corresponding allowance account at each balance sheet date. In assessing collective impairment, the Group uses historical information on the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. Additions to and recoveries from the bad debt allowance account related to trade receivables are reported under \u2018selling expenses\u2019 in the income statement.
Impairment of assets
Goodwill and intangible assets with an indefinite useful life or not yet available for use (if any) are reviewed for impairment at least annually; other tangible and intangible fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized in the income statement as and when the carrying amount of an asset exceeds its recoverable amount (being the higher of its fair value less costs of disposal and its value in use). The fair value less costs of disposal is the amount obtainable from the sale of an asset in an arm\u2019s length transaction less the costs of disposal, while value in use is the present value of the future cash flows expected to be derived from an asset. Recoverable amounts are estimated for individual assets or, if this is not possible, for the smallest cash-generating unit to which the assets belong. Reversal of impairment losses recognized in prior years is included as income when there is an indication that the impairment losses recognized for the asset are no longer needed or the need has decreased, except for impairment losses on goodwill, which are never reversed.
Property, plant and equipment
The Group has opted for the historical cost model and not for the revaluation model. Property, plant and equipment separately acquired is initially measured at cost. Property, plant and equipment acquired in a business combination is initially measured at fair value, which thus becomes its deemed cost. Assets under construction are stated at cost, net of accumulated impairment losses, if any. After initial recognition, property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes all direct costs and all expenditure incurred to bring the asset to its working condition and location for its intended use. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognized in profit or loss as incurred.\u00a0
Depreciation is provided over the estimated useful lives of the various classes of property, plant and equipment on a straight-line basis. The useful life and depreciation method are reviewed at least at each financial year-end. Unless revised due to specific changes in the estimated economic useful life, annual depreciation rates are as follows:
\u2022land: 0%
\u2022buildings: 5%
\u2022plant, machinery & equipment: 8%-25%
\u2022R&D testing equipment: 16.7%-25%
\u2022furniture and vehicles: 20%
\u2022computer hardware: 20%
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.
\u2022land: 0%
\u2022buildings: 5%
\u2022plant, machinery & equipment: 8%-25%
\u2022R&D testing equipment: 16.7%-25%
\u2022furniture and vehicles: 20%
\u2022computer hardware: 20%
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is derecognized.
Government grants
Government grants relating to the purchase of property, plant and equipment are deducted from the cost of these assets. They are recognized in the balance sheet at their expected value at the time of initial government approval and corrected, if necessary, after final approval. The grant is amortized over the depreciation period of the underlying assets.
Right-of-Use (RoU) property, plant & equipment
The Group as lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12\u00a0months or less) and leases of low value assets (such as printers, copiers and small office equipment). For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs.
They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the underlying asset. If a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Rights to use land are amortized over the contractual period which can vary between 30\u00a0and\u00a0100\u00a0years, but is in most cases 50 years. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36 to determine whether a right-of-use asset is impaired.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occurs. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead accounts for any lease and associated non-lease components as a single arrangement. The Group applies this practical expedient on contracts for company cars and industrial vehicles, where non-lease components such as maintenance and replacement of tires are not separated but included in the lease component.
Lease liabilities
Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
\u2022fixed lease payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
\u2022the amount expected to be payable by the lessee, under residual value guarantees;
\u2022the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
\u2022payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
\u2022The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
\u2022The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate.
\u2022A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Government grants
Government grants relating to the purchase of property, plant and equipment are deducted from the cost of these assets. They are recognized in the balance sheet at their expected value at the time of initial government approval and corrected, if necessary, after final approval. The grant is amortized over the depreciation period of the underlying assets.
Financial assets
The Group classifies its financial assets in the following categories: measured at amortized cost, at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). The classification depends on the contractual characteristics of the financial assets and the business model under which they are held. Management determines the classification of its financial assets at initial recognition.
Financial assets at amortized cost
Financial assets are classified at amortized cost when the contract has the characteristics of a basic lending arrangement and they are held with the intention of collecting the contractual cash flows until their maturity. The Group\u2019s financial assets at amortized cost comprises, unless stated otherwise, trade and other receivables, bills of exchange received, short-term deposits and cash and cash equivalents in the balance sheet. They are measured at amortized cost using the effective interest method, less any impairment.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022the rights to receive cash flows from the asset have expired
\u2022the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through arrangement\u2019; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extend, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extend of its continuing involvement. in that case, the Group also recognizes an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Financial assets at fair value
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges.
Bills of exchange received
Payment by means of bills of exchange (bank acceptance drafts) is a widespread practice in China. Bills of exchange received are either settled at maturity date, discounted before the maturity date or transferred to a creditor to settle a liability. Discounting is done either with or without recourse. With recourse means that the discounting bank can claim reimbursement of the amount paid in case the issuer defaults. When a bill is discounted with recourse, the amount received is not deducted from the outstanding bills of exchange received, but a liability is recognized in \u2018current interest-bearing debt\u2019 until the maturity date of that bill.
Cash & cash equivalents and short-term deposits\u00a0
Cash equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignificant risk of change in value. Cash equivalents are highly liquid and have original maturities of three months or less, while short-term deposits have original maturities of more than three months and less than one year. Balances from cash pool facilities are reported as cash & cash equivalents. Bank overdrafts are not reported as a deduction from cash & cash equivalents but as interest-bearing debt.
Impairment of financial assets
Financial assets that are debt instruments, other than those measured at FVTPL, are tested for impairment using the expected credit loss model (\u2018ECL\u2019). The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical experience and informed credit assessment and including forward-looking information. The Group always recognizes lifetime ECL for trade receivables.
At each reporting date, Bekaert measures the impairment loss for financial assets measured at amortized cost (e.g. trade receivables and bills of exchange received) as the present value of the expected cash shortfalls (discounted at the original effective interest rate). Amounts deemed uncollectible are written off against the corresponding allowance account at each balance sheet date. In assessing collective impairment, the Group uses historical information on the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. Additions to and recoveries from the bad debt allowance account related to trade receivables are reported under \u2018selling expenses\u2019 in the income statement.
Financial assets
The Group classifies its financial assets in the following categories: measured at amortized cost, at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). The classification depends on the contractual characteristics of the financial assets and the business model under which they are held. Management determines the classification of its financial assets at initial recognition.
Financial assets at amortized cost
Financial assets are classified at amortized cost when the contract has the characteristics of a basic lending arrangement and they are held with the intention of collecting the contractual cash flows until their maturity. The Group\u2019s financial assets at amortized cost comprises, unless stated otherwise, trade and other receivables, bills of exchange received, short-term deposits and cash and cash equivalents in the balance sheet. They are measured at amortized cost using the effective interest method, less any impairment.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022the rights to receive cash flows from the asset have expired
\u2022the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through arrangement\u2019; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extend, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extend of its continuing involvement. in that case, the Group also recognizes an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Financial assets at fair value
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges.
Bills of exchange received
Payment by means of bills of exchange (bank acceptance drafts) is a widespread practice in China. Bills of exchange received are either settled at maturity date, discounted before the maturity date or transferred to a creditor to settle a liability. Discounting is done either with or without recourse. With recourse means that the discounting bank can claim reimbursement of the amount paid in case the issuer defaults. When a bill is discounted with recourse, the amount received is not deducted from the outstanding bills of exchange received, but a liability is recognized in \u2018current interest-bearing debt\u2019 until the maturity date of that bill.
Cash & cash equivalents and short-term deposits\u00a0
Cash equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignificant risk of change in value. Cash equivalents are highly liquid and have original maturities of three months or less, while short-term deposits have original maturities of more than three months and less than one year. Balances from cash pool facilities are reported as cash & cash equivalents. Bank overdrafts are not reported as a deduction from cash & cash equivalents but as interest-bearing debt.
Impairment of financial assets
Financial assets that are debt instruments, other than those measured at FVTPL, are tested for impairment using the expected credit loss model (\u2018ECL\u2019). The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical experience and informed credit assessment and including forward-looking information. The Group always recognizes lifetime ECL for trade receivables.
At each reporting date, Bekaert measures the impairment loss for financial assets measured at amortized cost (e.g. trade receivables and bills of exchange received) as the present value of the expected cash shortfalls (discounted at the original effective interest rate). Amounts deemed uncollectible are written off against the corresponding allowance account at each balance sheet date. In assessing collective impairment, the Group uses historical information on the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. Additions to and recoveries from the bad debt allowance account related to trade receivables are reported under \u2018selling expenses\u2019 in the income statement.
Interest-bearing debt
Interest-bearing debt includes loans and borrowings which are initially recognized at the fair value of the consideration received net of transaction costs incurred. In subsequent periods, they are carried at amortized cost using the effective interest-method, any difference between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If financial liabilities are hedged using derivatives qualifying as a fair value hedge, the hedging instruments are carried at fair value and the hedged items are remeasured for fair value changes due to the hedged risk (see accounting policies for derivatives and hedging).
Lease liabilities
Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
\u2022fixed lease payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
\u2022the amount expected to be payable by the lessee, under residual value guarantees;
\u2022the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
\u2022payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
\u2022The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
\u2022The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate.
\u2022A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Trade payables and other current liabilities
Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Financial assets at amortized cost
Financial assets are classified at amortized cost when the contract has the characteristics of a basic lending arrangement and they are held with the intention of collecting the contractual cash flows until their maturity. The Group\u2019s financial assets at amortized cost comprises, unless stated otherwise, trade and other receivables, bills of exchange received, short-term deposits and cash and cash equivalents in the balance sheet. They are measured at amortized cost using the effective interest method, less any impairment.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022the rights to receive cash flows from the asset have expired
\u2022the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through arrangement\u2019; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extend, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extend of its continuing involvement. in that case, the Group also recognizes an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022the rights to receive cash flows from the asset have expired
\u2022the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through arrangement\u2019; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Financial assets at fair value
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges.
Financial assets at fair value
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Financial assets at fair value
Other debt instruments and all equity investments are measured at fair value. Equity investments can either be carried at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). This option can be elected on an investment by investment basis and cannot be reversed subsequently. In principle, Bekaert will carry its main non-consolidated strategic equity investments at FVTOCI. Derivatives are categorized as at FVTPL unless they are designated and effective as hedges.
Share-based payment plans
The Group issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled plans allow Group employees to acquire shares of NV Bekaert SA, and include stock option plans (\u2018SOP\u2019),
performance share plans (\u2018PSP\u2019), personal shareholding requirement plans (\u2018PSR\u2019) and stock grants, all of which are operated in Belgium. Cash-settled plans entitle Group employees to receive payment of cash bonuses based on the price of the Bekaert share on the Euronext stock exchange, and include share appreciation rights (\u2018SAR\u2019) and performance share unit plans (\u2018PSU\u2019), all of which are operated outside Belgium.
Equity-settled share-based payments are recognized at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed, with a corresponding increase in equity, on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of equity instruments granted that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Cash-settled share-based payments are recognized as liabilities over the vesting period at fair value, which is remeasured at each reporting date and at the date of settlement. Changes in fair value are recognized in the income statement over the vesting period, taking into account the number of units or rights expected to vest.
The Group uses binomial models or Monte Carlo simulations to determine the fair value of the share-based payment plans.
Interest-bearing debt
Interest-bearing debt includes loans and borrowings which are initially recognized at the fair value of the consideration received net of transaction costs incurred. In subsequent periods, they are carried at amortized cost using the effective interest-method, any difference between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If financial liabilities are hedged using derivatives qualifying as a fair value hedge, the hedging instruments are carried at fair value and the hedged items are remeasured for fair value changes due to the hedged risk (see accounting policies for derivatives and hedging).
Lease liabilities
Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
\u2022fixed lease payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
\u2022the amount expected to be payable by the lessee, under residual value guarantees;
\u2022the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
\u2022payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
\u2022The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
\u2022The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate.
\u2022A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Trade payables and other current liabilities
Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Financial instruments by fair value measurement hierarchy
The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways:
\u2022\u2018Level 1\u2019 fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in these active markets for identical assets and liabilities. This mainly relates to financial assets at fair value through other comprehensive income such as the investment in Shougang Concord Century Holdings Ltd (see note 6.6.\u00a0\u2018Other non-current assets\u2019).
\u2022\u2018Level 2\u2019 fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward-exchange rates and yield curves derived from quoted interest rates with matching maturities. Interest-rate swaps are measured at
\u2022the present value of future cash flows estimated and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward-exchange rates, quoted interest rates and applicable yield curves derived therefrom.
\u2022\u2018Level 3\u2019 fair value measurement: the fair value of the remaining financial assets and financial liabilities is derived from valuation techniques which include inputs that are not based on observable market data. At the end of 2022, Bekaert had two types of financial instruments, namely the VPPA agreement and several equity investments, for which the fair value measurement can be characterized as \u2018level 3\u2019. The fair value of the VPPA contract is determined using a Monte Carlo valuation model. The main factors determining the fair value of the VPPA agreement are the discount rate (level 2), the estimated energy output based on wind or solar studies in the area and the off-peak/on-peak price volatility (level 3). The fair value of the main equity investment (Xinju Metal Products Co Ltd) is determined using a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption. The main factors determining the fair value are the discount rate and EBITDA.
Derivative in VPPA arrangement | 31 December 2022 |
Level 2 inputs | |
Discount rate | Weighted average of investment grade corporate bond curves |
Level 3 inputs | |
Power forward sensitivity | Estimated on peak/off peak price forecasts |
Production sensitivity | Based on wind / solar studies in the area |
Outcome of the model (in thousands of \u20ac) | |
Fair value of the VPPA derivative | 7500 |
Cash & cash equivalents and short-term deposits\u00a0
Cash equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignificant risk of change in value. Cash equivalents are highly liquid and have original maturities of three months or less, while short-term deposits have original maturities of more than three months and less than one year. Balances from cash pool facilities are reported as cash & cash equivalents. Bank overdrafts are not reported as a deduction from cash & cash equivalents but as interest-bearing debt.
Cash & cash equivalents and short-term deposits\u00a0
Cash equivalents and short-term deposits are short-term investments that are readily convertible to known amounts of cash. They are subject to insignificant risk of change in value. Cash equivalents are highly liquid and have original maturities of three months or less, while short-term deposits have original maturities of more than three months and less than one year. Balances from cash pool facilities are reported as cash & cash equivalents. Bank overdrafts are not reported as a deduction from cash & cash equivalents but as interest-bearing debt.
Impairment of financial assets
Financial assets that are debt instruments, other than those measured at FVTPL, are tested for impairment using the expected credit loss model (\u2018ECL\u2019). The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, Bekaert considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical experience and informed credit assessment and including forward-looking information. The Group always recognizes lifetime ECL for trade receivables.
At each reporting date, Bekaert measures the impairment loss for financial assets measured at amortized cost (e.g. trade receivables and bills of exchange received) as the present value of the expected cash shortfalls (discounted at the original effective interest rate). Amounts deemed uncollectible are written off against the corresponding allowance account at each balance sheet date. In assessing collective impairment, the Group uses historical information on the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. Additions to and recoveries from the bad debt allowance account related to trade receivables are reported under \u2018selling expenses\u2019 in the income statement.
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is determined by the first-in, first-out (FIFO) method. For processed inventories, cost means full cost including all direct and indirect production costs required to bring the inventory items to the stage of completion at the balance sheet date. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and costs necessary to make the sale.
Share capital
When shares are repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Repurchased shares (treasury shares) are presented in the balance sheet as a deduction from equity. The result on the disposal of treasury shares sold or cancelled is recognized in retained earnings.
Share capital
When shares are repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Repurchased shares (treasury shares) are presented in the balance sheet as a deduction from equity. The result on the disposal of treasury shares sold or cancelled is recognized in retained earnings.
Non-controlling interests
Non-controlling interests represent the shares of minority or non-controlling shareholders in the equity of subsidiaries which are not fully owned by the Group. At the acquisition date, the item is either measured at its fair value or at the non-controlling shareholders\u2019 proportion of the fair values of net assets recognized on acquisition of a subsidiary (business combination). Subsequently, it is adjusted for the appropriate proportion of subsequent profits and losses. The losses attributable to non-controlling shareholders in a consolidated subsidiary may exceed their interest in the equity of the subsidiary. A proportional share of total comprehensive income is attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Provisions
Provisions are recognized in the balance sheet when the Group has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. When appropriate, provisions are measured on a discounted basis.
Restructuring
A provision for restructuring is only recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly before the balance sheet date. Restructuring provisions only include the direct expenditure arising from the restructuring which is necessarily incurred on the restructuring and is not associated with the ongoing activities of the entity.
Site remediation
A provision for site remediation in respect of contaminated land is recognized in accordance with the Group\u2019s published environmental policy and applicable legal requirements.
Site remediation
A provision for site remediation in respect of contaminated land is recognized in accordance with the Group\u2019s published environmental policy and applicable legal requirements.
Site remediation
A provision for site remediation in respect of contaminated land is recognized in accordance with the Group\u2019s published environmental policy and applicable legal requirements.
Employee benefit obligations
The parent company and several of its subsidiaries have pension, death benefit and health care benefit plans covering a substantial part of their workforce.
Defined-benefit plans
Most pension plans are defined-benefit plans with benefits based on years of service and level of remuneration. For defined-benefit plans, the amount recognized in the balance sheet (net liability or asset) is the present value of the defined-benefit obligation less the fair value of any plan assets. The present value of the defined-benefit obligation is the present value, without deducting any plan assets, of expected future payments required to settle the obligation resulting from employee service in the current and prior periods. The present value of the defined-benefit obligation and the related current and past service costs are calculated using the projected unit credit method. The discount rate used is the yield at balance sheet date on high-quality corporate bonds with remaining terms to maturity approximating those of the Group\u2019s obligations. In case the fair value of plan assets exceeds the present value of the defined-benefit obligations, the net asset is limited to the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The net interest on the net defined-benefit liability/asset is based on the same discount rate. Actuarial gains and losses comprise experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred) and the effects of changes in actuarial assumptions. Past service cost is the change in the present value of the defined-benefit obligation for employee service in prior periods and resulting in the current period from a plan amendment or a curtailment. Past service costs are recognized immediately through profit or loss. Remeasurements of the net defined-benefit liability (asset) comprise (a) actuarial gains and losses, (b) the return on plan assets, after deduction of the amounts included in net interest on the net defined-benefit liability
(asset) and (c) any change in the effect of the asset ceiling, after deduction of any amounts included in net interest on the net defined-benefit liability (asset). Remeasurements are recognized immediately through equity. A settlement is a transaction that eliminates all further legal or constructive obligations for part or all of the benefits provided under a defined-benefit plan, other than a payment of benefits to, or on behalf of, employees that is set out in the terms of the plan and included in the actuarial assumptions.
In the income statement, current and past service cost, including gains or losses from settlements, are included in the operating result (EBIT), and the net interest on the net defined-benefit liability (asset) is included in interest expense, under interest on interest-bearing provisions. Pre-retirement pensions in Belgium and plans for medical care in the United States are also treated as defined-benefit plans.
Defined-contribution plans
Obligations in respect of contributions to defined-contribution pension plans are recognized as an expense in the income statement as they fall due. By law, defined-contribution pension plans in Belgium are subject to minimum guaranteed rates of return. Before 2015, the defined-contribution plans in Belgium were basically accounted for as defined-contribution plans. New legislation dated December 2015 however triggered the qualification. As a consequence, the defined-contribution plans are reported as defined-benefit obligations, whereby as from year end 2016 an actuarial valuation was performed.
Other long-term employee benefits
Other long-term employee benefits, such as service awards, are accounted for using the projected unit credit method. However, the accounting method differs from the method applied for post-employment benefits, as actuarial gains and losses are recognized immediately through profit or loss.
Share-based payment plans
The Group issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled plans allow Group employees to acquire shares of NV Bekaert SA, and include stock option plans (\u2018SOP\u2019),
performance share plans (\u2018PSP\u2019), personal shareholding requirement plans (\u2018PSR\u2019) and stock grants, all of which are operated in Belgium. Cash-settled plans entitle Group employees to receive payment of cash bonuses based on the price of the Bekaert share on the Euronext stock exchange, and include share appreciation rights (\u2018SAR\u2019) and performance share unit plans (\u2018PSU\u2019), all of which are operated outside Belgium.
Equity-settled share-based payments are recognized at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed, with a corresponding increase in equity, on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of equity instruments granted that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Cash-settled share-based payments are recognized as liabilities over the vesting period at fair value, which is remeasured at each reporting date and at the date of settlement. Changes in fair value are recognized in the income statement over the vesting period, taking into account the number of units or rights expected to vest.
The Group uses binomial models or Monte Carlo simulations to determine the fair value of the share-based payment plans.
Other long-term employee benefits
Other long-term employee benefits, such as service awards, are accounted for using the projected unit credit method. However, the accounting method differs from the method applied for post-employment benefits, as actuarial gains and losses are recognized immediately through profit or loss.
Termination benefits
Termination benefits are cash and other services paid to employees when their employment has been terminated.
Share-based payment plans
The Group issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled plans allow Group employees to acquire shares of NV Bekaert SA, and include stock option plans (\u2018SOP\u2019),
performance share plans (\u2018PSP\u2019), personal shareholding requirement plans (\u2018PSR\u2019) and stock grants, all of which are operated in Belgium. Cash-settled plans entitle Group employees to receive payment of cash bonuses based on the price of the Bekaert share on the Euronext stock exchange, and include share appreciation rights (\u2018SAR\u2019) and performance share unit plans (\u2018PSU\u2019), all of which are operated outside Belgium.
Equity-settled share-based payments are recognized at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed, with a corresponding increase in equity, on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of equity instruments granted that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Cash-settled share-based payments are recognized as liabilities over the vesting period at fair value, which is remeasured at each reporting date and at the date of settlement. Changes in fair value are recognized in the income statement over the vesting period, taking into account the number of units or rights expected to vest.
The Group uses binomial models or Monte Carlo simulations to determine the fair value of the share-based payment plans.
Share-based payment plans
The Group issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled plans allow Group employees to acquire shares of NV Bekaert SA, and include stock option plans (\u2018SOP\u2019),
performance share plans (\u2018PSP\u2019), personal shareholding requirement plans (\u2018PSR\u2019) and stock grants, all of which are operated in Belgium. Cash-settled plans entitle Group employees to receive payment of cash bonuses based on the price of the Bekaert share on the Euronext stock exchange, and include share appreciation rights (\u2018SAR\u2019) and performance share unit plans (\u2018PSU\u2019), all of which are operated outside Belgium.
Equity-settled share-based payments are recognized at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed, with a corresponding increase in equity, on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of equity instruments granted that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Cash-settled share-based payments are recognized as liabilities over the vesting period at fair value, which is remeasured at each reporting date and at the date of settlement. Changes in fair value are recognized in the income statement over the vesting period, taking into account the number of units or rights expected to vest.
The Group uses binomial models or Monte Carlo simulations to determine the fair value of the share-based payment plans.
Interest-bearing debt
Interest-bearing debt includes loans and borrowings which are initially recognized at the fair value of the consideration received net of transaction costs incurred. In subsequent periods, they are carried at amortized cost using the effective interest-method, any difference between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If financial liabilities are hedged using derivatives qualifying as a fair value hedge, the hedging instruments are carried at fair value and the hedged items are remeasured for fair value changes due to the hedged risk (see accounting policies for derivatives and hedging).
Lease liabilities
Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
\u2022fixed lease payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
\u2022the amount expected to be payable by the lessee, under residual value guarantees;
\u2022the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
\u2022payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
\u2022The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
\u2022The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate.
\u2022A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Trade payables and other current liabilities
Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Interest-bearing debt
Interest-bearing debt includes loans and borrowings which are initially recognized at the fair value of the consideration received net of transaction costs incurred. In subsequent periods, they are carried at amortized cost using the effective interest-method, any difference between the proceeds (net of transaction costs) and the redemption value being recognized in the income statement over the period of the liability. If financial liabilities are hedged using derivatives qualifying as a fair value hedge, the hedging instruments are carried at fair value and the hedged items are remeasured for fair value changes due to the hedged risk (see accounting policies for derivatives and hedging).
Lease liabilities
Interest-bearing debt also includes the lease liabilities recognized with respect to all lease arrangements in which the Group is the lessee, except for short-term leases and leases of low value assets. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
\u2022fixed lease payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
\u2022the amount expected to be payable by the lessee, under residual value guarantees;
\u2022the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
\u2022payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
\u2022The lease term has changed or there is a significant event or change in circumstances resulting in a change in assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
\u2022The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate.
\u2022A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Trade payables and other current liabilities
Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company.
Trade payables and other current liabilities
Trade payables and other current liabilities, except derivatives, are initially measured at cost, which is the fair value of the consideration payable, and subsequently carried at amortized cost. The Group recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company.
Revenue recognition
The Group recognizes revenue mainly from the sale of products. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognizes revenue from the sale of products when it transfers control over the corresponding product to a customer. Revenue from the sale of products is recognized at a point in time. Sales are recognized net of sales taxes and discounts. Interest is recognized on a time-proportional basis that reflects the effective yield on the asset. The Group recognizes revenue for a sales-based or usage-based royalty only when (or as) the later of the following events occurs: the subsequent sale or usage occurs; and the performance obligation to which some or all of the sales-based or usage-based royalties has been allocated has been satisfied. Royalties are recognized on an accrual basis in accordance with the terms of agreements and are linked to technology and management support. Dividends are recognized when the shareholder\u2019s right to receive payment is established.
Income taxes
Income taxes are classified as either current or deferred taxes. Current income taxes include expected tax charges based on the accounting profit for the current year and adjustments to tax charges of prior years. In evaluating the potential income tax liabilities, the Group assumes that the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations. The Group takes into account both the assessments, decisions and verdicts received from tax audits and other kinds of information sources as well as the potential sources of challenge from tax authorities. The Group recognizes a liability when the Group assesses it is not probable for the tax authorities to accept the position that the Group takes regarding the tax treatment in question. The Group measures the income tax liability according to the most likely amount of the potential economic outflow. However, Bekaert continues to believe that its positions on all these audits are robust.
Deferred taxes are calculated, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred taxes are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled, based on tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized; this criterion is reassessed at each balance sheet date. In assessing the recoverability of deferred tax assets, the Group relies on the forecast assumptions used elsewhere in the financial statements and in other management reports. Deferred tax on temporary differences arising on investments in subsidiaries, associates and joint ventures is provided for, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future.
Income taxes
Income taxes are classified as either current or deferred taxes. Current income taxes include expected tax charges based on the accounting profit for the current year and adjustments to tax charges of prior years. In evaluating the potential income tax liabilities, the Group assumes that the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations. The Group takes into account both the assessments, decisions and verdicts received from tax audits and other kinds of information sources as well as the potential sources of challenge from tax authorities. The Group recognizes a liability when the Group assesses it is not probable for the tax authorities to accept the position that the Group takes regarding the tax treatment in question. The Group measures the income tax liability according to the most likely amount of the potential economic outflow. However, Bekaert continues to believe that its positions on all these audits are robust.
Deferred taxes are calculated, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred taxes are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled, based on tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized; this criterion is reassessed at each balance sheet date. In assessing the recoverability of deferred tax assets, the Group relies on the forecast assumptions used elsewhere in the financial statements and in other management reports. Deferred tax on temporary differences arising on investments in subsidiaries, associates and joint ventures is provided for, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Hedging
All financial derivatives the Group enters into, relate to an underlying transaction or forecasted exposure. In function of the expected impact on the income statement and if the stringent IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied. The following sections describe the transactions whereby hedge accounting is applied and transactions which do not qualify for hedge accounting but constitute an economic hedge.
Hedge accounting
The Group did not apply hedge accounting in 2022 (2021: none) so there were no fair value hedges nor cash flow hedges in 2022 (2021: none).
Economic hedging and other derivatives
The Group also uses financial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defined in IFRS 9 \u2018Financial Instruments\u2019 are not met or because the Group has elected not to apply hedge accounting. These derivatives are treated as free-standing instruments held for trading.
\u2022The Group uses cross-currency interest-rate swaps and forward-exchange contracts to hedge the currency risk on intercompany loans involving two entities with different functional currencies. Until now, the Group has elected not to apply hedge accounting as defined in IFRS 9. Since nearly all cross-currency interest-rate swaps are floating-to-floating, the fair value gain or loss on the financial instruments is expected to offset the foreign-exchange result arising from the remeasurement of the intercompany loans. The major currencies involved are US dollar and British pound.
\u2022To manage its interest-rate exposure, the Group uses interest-rate swaps to convert its floating-rate debt to a fixed rate debt. The Group entered into interest-rate swaps for \u20ac\u00a0196.5\u00a0million to hedge the Schuldschein loans with floating interest rates (2021: \u20ac 196.5\u00a0million).
\u2022The Group uses forward exchange contracts to limit currency risks on its various operating and financing activities. For all forward exchange contracts, the fair value change is recorded immediately under other financial income and expenses.
Derivatives, hedging and hedging reserves
The Group uses derivatives to hedge its exposure to foreign-exchange and interest-rate risks arising from operating, financing and investing activities. The net exposure of all subsidiaries is managed on a centralized basis by Group Treasury in accordance with the aims and principles laid down by general management. As a policy, the Group does not engage in speculative or leveraged transactions.
Derivatives are initially and subsequently measured and carried at fair value. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date.
The Group may apply hedge accounting in accordance with IFRS 9 to reduce income statement volatility. Depending on the nature of the hedged risk, a distinction is made between fair value hedges, cash flow hedges and hedges of a net investment in a foreign entity.
Fair value hedges are hedges of the exposure to variability in the fair value of recognized assets and liabilities. The derivatives classified as fair value hedges are carried at fair value and the related hedged items (assets or liabilities) are remeasured for fair value changes due to the hedged risk. The corresponding changes in fair value are recognized in the income statement. When a hedge ceases to meet the qualifying criteria, hedge accounting is discontinued and the adjustment to the carrying amount of a hedged interest-bearing financial instrument is recognized as income or expense and will be fully amortized over the remaining period to maturity of the hedged item.
Cash flow hedges are hedges of the exposure to variability in future cash flows related to recognized assets or liabilities, highly probable forecast transactions or currency risk on unrecognized firm commitments. Changes in the fair value of a hedging instrument that qualifies as a highly effective cash flow hedge are recognized directly in shareholders\u2019 equity (hedging reserve). The ineffective portion is recognized immediately in the income statement. If the hedged cash flow results in the recognition of a non-financial asset or liability, all gains and losses previously recognized directly in equity are transferred from equity and included in the initial measurement of the cost or carrying amount of the asset or liability. For all other cash flow hedges, gains and losses initially recognized in equity are transferred from the
hedging reserve to the income statement when the hedged firm commitment or forecast transaction results in the recognition of a profit or loss. When the hedge ceases to meet the qualifying criteria, hedge accounting is discontinued prospectively and the accumulated gain or loss is retained in equity until the committed or forecast transaction occurs. If the forecast transaction is no longer expected to occur, any net cumulative gain or loss previously reported in equity is transferred to the income statement.
If a net investment in a foreign entity is hedged, all gains or losses on the effective portion of the hedging instrument, together with any gains or losses on the foreign-currency translation of the hedged investment, are taken directly to equity. Any gains or losses on the ineffective portion are recognized immediately in the income statement. The cumulative remeasurement gains and losses on the hedging instrument, that had previously been recognized directly in equity, and the gains and losses on the currency translation of the hedged item are recognized in the income statement only on disposal of the investment.
In order to comply with the requirements of IFRS 9 regarding the use of hedge accounting, the strategy and purpose of the hedge, the relationship between the financial instrument used as the hedging instrument and the hedged item and the estimated (prospective) effectiveness are documented by the Group at the inception of the hedge. The effectiveness of existing hedges is monitored on a quarterly basis.
The Group uses derivatives that do not satisfy the hedge accounting criteria of IFRS 9 but provide effective economic hedges under the Group\u2019s risk management policies. Changes in the fair value of any such derivatives are recognized immediately in the income statement.
Derivatives embedded in non-derivative host contracts that are not financial assets are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contract and the host contract is not measured at fair value through profit or loss. The Group identified such embedded derivatives in the virtual power purchase agreements (VPPA).
Virtual Power Purchase Agreements (VPPA)
The embedded derivative is a component of a financial instrument that modifies the cash flows of a host contract in a way similar to a standalone derivative according to a specified interest rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. The valuation of the embedded derivative in the VPPA's is based on a valuation model using a Monte Carlo simulation with Geometric Brownian Motion simulating production output and power prices throughout the term of the VPPA. The valuation technique includes all material inputs that are consistent with the characteristics of the VPPA and that market participants would take into account in setting a transaction price for the embedded derivative in an orderly market transaction. These VPPA contracts include the delivery of Renewable Energy Credits (RECs) for which the valuation is included in the valuation model of the embedded derivative. The RECs received are not accounted for as individual financial assets as the Group applies the 'own use' exemption.
Revenue recognition
The Group recognizes revenue mainly from the sale of products. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognizes revenue from the sale of products when it transfers control over the corresponding product to a customer. Revenue from the sale of products is recognized at a point in time. Sales are recognized net of sales taxes and discounts. Interest is recognized on a time-proportional basis that reflects the effective yield on the asset. The Group recognizes revenue for a sales-based or usage-based royalty only when (or as) the later of the following events occurs: the subsequent sale or usage occurs; and the performance obligation to which some or all of the sales-based or usage-based royalties has been allocated has been satisfied. Royalties are recognized on an accrual basis in accordance with the terms of agreements and are linked to technology and management support. Dividends are recognized when the shareholder\u2019s right to receive payment is established.
The Group recognizes revenue from the following sources: delivery of products and, to a limited extent, of services and projects. Bekaert assessed that the delivery of products represents the main performance obligation. The Group recognizes revenue at a point in time when it transfers control over a product to a customer. Customers obtain control when the products are delivered (based on the related inco terms in place). The amount of revenue recognized is adjusted for variable compensation such as volume discounts. No adjustment is made for returns nor for warranty as the impact is deemed immaterial based on historical information.
Disaggregating revenue by timing of revenue recognition, i.e. at a point in time vs over time (as is customary for engineering activities) does not add much value, as sales of machines to third parties contribute very little to total sales.
2.5. Statement of comprehensive income and statement of changes in equity
The statement of comprehensive income presents an overview of all income and expenses recognized both in the income statement and in equity. In accordance with IAS 1 \u2018Presentation of Financial Statements\u2019, an entity can elect to present either a single statement of comprehensive income or two statements, i.e. an income statement immediately followed by a comprehensive income statement. The Group elected to do the latter. A further consequence of presenting a statement of comprehensive income is that the content of the statement of changes in equity is confined to owner-related changes only.
2.6. Alternative performance measures
To analyze the financial performance of the Group, Bekaert consistently uses various non-GAAP metrics or Alternative Performance Measures (\u2018APMs\u2019) as defined in the European Securities and Markets Authority\u2019s (\u2018ESMA\u2019) Guidelines on Alternative Performance Measures. In accordance with these ESMA Guidelines, the definition and reason for use of each of the APMs as well as reconciliation tables are provided in the \u2018Alternative performance measures\u2019 section of the Financial Statements. The main APMs used in the Financial Statements relate to underlying performance measures.
Underlying performance measures
Operating income and expenses that are related to restructuring programs, impairment losses, the initial accounting for business combinations, business disposals, environmental provisions or other events and transactions that have a one-off effect are excluded from Underlying EBIT(DA) measures.
Restructuring programs mainly include lay-off costs, gains and losses on disposal, and impairment losses of assets involved in a shut-down, major reorganization or relocation of operations. When not related to restructuring programs, only impairment losses resulting from testing cash-generating units qualify as one-off effects.
One-off effects from business combinations mainly include: acquisition-related expenses, negative goodwill, gains and losses on step acquisition, and recycling of CTA on the interest previously held. One-off effects from business disposals include gains and losses on the sale of businesses that do not qualify as discontinued operations. These disposed businesses may consist of integral, or parts (disposal groups) of subsidiaries, joint ventures and associates.
Besides environmental provisions, other events or transactions that are not inherent to the business and have a one-off effect mainly include disasters and sales of investment property.
Restructuring programs mainly include lay-off costs, gains and losses on disposal, and impairment losses of assets involved in a shut-down, major reorganization or relocation of operations. When not related to restructuring programs, only impairment losses resulting from testing cash-generating units qualify as one-off effects.
One-off effects from business combinations mainly include: acquisition-related expenses, negative goodwill, gains and losses on step acquisition, and recycling of CTA on the interest previously held. One-off effects from business disposals include gains and losses on the sale of businesses that do not qualify as discontinued operations. These disposed businesses may consist of integral, or parts (disposal groups) of subsidiaries, joint ventures and associates.
Non-current assets held for sale and discontinued operations
A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. A discontinued operation is a component of an entity which the entity has disposed of or which is classified as held for sale, which represents a separate major line of business or geographical area of operations and which can be distinguished operationally and for financial reporting purposes.
For a sale to be highly probable, the entity should be committed to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan should be initiated, and the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its current fair value, and the sale should be expected to be completed within one year from the date of classification. Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs necessary to make the sale. Any excess of the carrying amount over the fair value less costs to sell is included as an impairment loss. Depreciation of such assets is discontinued as from their classification as held for sale. Comparative balance sheet information for prior periods is not restated to reflect the new classification in the balance sheet.
Non-current assets held for sale and discontinued operations
A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. A discontinued operation is a component of an entity which the entity has disposed of or which is classified as held for sale, which represents a separate major line of business or geographical area of operations and which can be distinguished operationally and for financial reporting purposes.
For a sale to be highly probable, the entity should be committed to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan should be initiated, and the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its current fair value, and the sale should be expected to be completed within one year from the date of classification. Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs necessary to make the sale. Any excess of the carrying amount over the fair value less costs to sell is included as an impairment loss. Depreciation of such assets is discontinued as from their classification as held for sale. Comparative balance sheet information for prior periods is not restated to reflect the new classification in the balance sheet.
Non-current assets held for sale and discontinued operations
A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. A discontinued operation is a component of an entity which the entity has disposed of or which is classified as held for sale, which represents a separate major line of business or geographical area of operations and which can be distinguished operationally and for financial reporting purposes.
For a sale to be highly probable, the entity should be committed to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan should be initiated, and the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its current fair value, and the sale should be expected to be completed within one year from the date of classification. Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs necessary to make the sale. Any excess of the carrying amount over the fair value less costs to sell is included as an impairment loss. Depreciation of such assets is discontinued as from their classification as held for sale. Comparative balance sheet information for prior periods is not restated to reflect the new classification in the balance sheet.
Contingencies
Contingent assets are not recognized in the financial statements. They are disclosed if the inflow of economic benefits is probable. Contingent liabilities are not recognized in the financial statements, except if they arise from a business combination. They are disclosed, unless the possibility of a loss is remote.
\u2022Since 1 January 2023, a total of 199\u00a0931 treasury shares have been disposed of following the exercise of stock options under the stock option plans SOP 2010-2014 and SOP 2015-2017 and a total of 213\u00a0317 treasury shares following the vesting of performance share units under the Performance Share Plan.
\u2022On 24 February 2023, The Company\u2019s capital was reduced from \u20ac 173 737 000 to \u20ac 167 736 414 following the cancellation of 2 038 935 treasury shares. These shares were purchased by Kepler Cheuvreux on behalf of Bekaert in the framework of the share buyback program that started on 18 March 2022. On 2 March 2023, the capital was increased with \u20ac 586 to round up the capital without the issue of new shares. Therefore, as of 2 March 2023, the capital of the Company amounts to \u20ac 167 737 000 and is represented by 56 990 317 shares.
\u2022On 1 March 2023, Bekaert announced the continuation of its share buyback program for a total amount of up to \u20ac 120 million over a period of up to twelve months and the immediate start of the fifth tranche of the program for an aggregate amount of up to \u20ac 30 million.
\u2022On 1 March 2023, Bekaert announced the sale of its Steel Wire Solutions businesses in Chile en Peru to its current partners. The transaction, with a total enterprise value of approximately US$ 350 million and resulting in net proceeds for Bekaert\u2019s stake of US$ 136 million, is expected to close in 2023, subject to applicable regulatory approvals and customary closing conditions. The transaction covers the production and distribution facilities of the Steel Wire Solutions activities in Chile and Peru. These facilities manufacture, sell, and distribute steel wire products primarily for construction, agricultural fencing, mining, and industrial applications. The intended transaction regards the sale of the shares held by Bekaert in the following entities: Industrias Chilenas de Alambre-Inchalam SA in Talcahuano, Chile; and Prodalam SA in Santiago, Chile; along with their subsidiaries in Chile and Peru. Bekaert currently holds 52% of the shares in the Chilean entities and 38% of the shares in the Peruvian entities. The transaction excludes Bekaert\u2019s wholly owned Bridon-Bekaert ropes entities in Chile and Peru.
\u2022Annie Xu-Huhmann succeeded Arnaud Lesschaeve as Divisional CEO Rubber Reinforcement with effect as of 1 March 2023.
\u2022A grant of 139\u00a0141 equity settled performance share units was made on 10\u00a0March\u00a02023 under the terms of the Performance Share Plan. The
\u2022granted performance share units represented a fair value of \u20ac\u00a05.9\u00a0million.\u2022A grant of 28\u00a0472 cash-settled performance share units was made on 10\u00a0March\u00a02023 under the terms of the PSU A&L and PSU USA Performance Share Plan. The granted performance share units represented a fair value of \u20ac 1.2\u00a0million.", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:5493008SR6XZECH6BN71", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f-415": { "value": "2.8. Restatement effectsThe 2021 comparative information has been restated due to:
(a). Attributing benefits to periods of service under IAS 19 \u2018Employee Benefits\u2019
In May 2021, the IFRS Interpretations Committee finalized an agenda decision about the periods of service to which an entity attributes benefit for a particular defined benefit plan. Under the terms of the plan, employees are entitled to a lump sum benefit payment when they reach a specified retirement age provided they are employed by the entity when they reach that retirement age; and the amount of the retirement benefit to which an employee is entitled depends on the length of employee service with the entity before the retirement age and is capped at a specified number of consecutive years of service.
IAS 19 requires an entity to attribute benefit to periods of service under the plan's benefit formula from the date when employee service first leads to benefits under the plan until the date when further employee service will lead to no material amount of further benefits under the plan. An entity is required to attribute benefit to periods in which the obligation to provide post-employment benefits arise. The obligation arises as employees render services in return for post-employment benefits an entity expects to pay in future reporting periods. The agenda decision specifies that employee service before the vesting date gives rise to a constructive obligation because, at the end of each successive reporting period, the amount of future service an employee will have to render before becoming entitled to the benefit is reduced.
The defined benefit liabilities at year end 2021 have been restated for Indonesia to reflect the impact of the May 2021 IFRIC agenda decision on the attribution of benefits to periods of service. This change affected both the defined-benefit obligation (\u20ac 1.6 million decrease) and benefit expense level.
(b). Reclassification of implementation and customization costs linked to cloud computing arrangements
In April 2021, the IFRS Interpretation Committee published an agenda decision on the clarification of accounting for the costs of configuring or customizing the supplier's application software in a SaaS arrangement that is determined to be a service contract.
The Group previously capitalized costs incurred in configuring or customizing a supplier's application software in a cloud-based computing arrangement as intangible assets as the Group considered that it would benefit form those costs over the life of the asset.
Due to the nature of this agenda decision and the level of spend incurred in relation to the Groups' Digital Transformation, the Group has reviewed its accounting policy to align with the IFRIC guidance issued in relation to Software-as-a-service (SaaS) costs previously capitalized. The Group will only recognize costs as intangible assets if the configuration or customization activities create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Costs that do not result in intangible asses are expensed as incurred. The revision to the accounting policy has been accounted for retrospectively resulting in a prior year restatement. The restatement affects the balance sheet in NV Bekaert, where \u20ac\u00a04.1\u00a0million is reclassified from intangible assets into IT costs in the income statement.
For the purpose of this annual report, the reclassifications and restatement effects are not presented on the face of the other financial statements. They are summarized below in a concise format and referenced to one of the above restatement elements (a or b) where appropriate.
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
Consolidated statement of comprehensive income | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Other comprehensive income (OCI) | |||
Other comprehensive income reclassifable to income statement | |||
Exchange differences arising during the year\u00a0 (a) | 91\u00a0161 | 56 | 91\u00a0217 |
OCI reclassifiable to income statement in subsequent periods, after tax | 88\u00a0173 | 56 | 88\u00a0229 |
Other comprehensive income for the period | 137\u00a0909 | 56 | 137\u00a0965 |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 588\u00a0529 | -2\u00a0859 | 585\u00a0670 |
Attributable to | |||
the Group | 545\u00a0660 | -2\u00a0859 | 542\u00a0801 |
non-controlling interests | 42\u00a0869 | \u2014 | 42\u00a0869 |
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Consolidated cash flow statement | 2021 as published | 2021 restatement | 2021 as restated |
Operating activities | |||
Operating result (EBIT) (a + b) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
Non-cash items included in operating result (a) | 190\u00a0222 | -1\u00a0617 | 188\u00a0605 |
Gross cash flows from operating activities | 536\u00a0997 | -4\u00a0113 | 532\u00a0884 |
Consolidated statement of changes in equity | 2021 as published | 2021 restatement | 2021 as restated |
Opening statement | |||
Total comprehensive income for the period | 588\u00a0529 | -2\u00a0859 | 585\u00a0670 |
Closing balance | 2\u00a0100\u00a0522 | -2\u00a0859 | 2\u00a0097\u00a0663 |
(a). Attributing benefits to periods of service under IAS 19 \u2018Employee Benefits\u2019
In May 2021, the IFRS Interpretations Committee finalized an agenda decision about the periods of service to which an entity attributes benefit for a particular defined benefit plan. Under the terms of the plan, employees are entitled to a lump sum benefit payment when they reach a specified retirement age provided they are employed by the entity when they reach that retirement age; and the amount of the retirement benefit to which an employee is entitled depends on the length of employee service with the entity before the retirement age and is capped at a specified number of consecutive years of service.
IAS 19 requires an entity to attribute benefit to periods of service under the plan's benefit formula from the date when employee service first leads to benefits under the plan until the date when further employee service will lead to no material amount of further benefits under the plan. An entity is required to attribute benefit to periods in which the obligation to provide post-employment benefits arise. The obligation arises as employees render services in return for post-employment benefits an entity expects to pay in future reporting periods. The agenda decision specifies that employee service before the vesting date gives rise to a constructive obligation because, at the end of each successive reporting period, the amount of future service an employee will have to render before becoming entitled to the benefit is reduced.
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Remeasurement reserve for defined-benefit plans | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -63\u00a0543 | -16\u00a0790 |
Remeasurements of the period | 46\u00a0753 | 4\u00a0024 |
Equity reclassification | \u2014 | 107 |
As at 31 December | -16\u00a0790 | -12\u00a0660 |
The total net liabilities for employee benefit obligations, which amounted to \u20ac\u00a0197.9\u00a0million as at 31 December 2022 (\u20ac\u00a0233.3\u00a0million as at year-end 2021), are as follows:
in thousands of \u20ac | 2021 | 2022 |
Liabilities for | ||
Post-employment defined-benefit plans \u00b9 | 69\u00a0675 | 65\u00a0960 |
Other long-term employee benefits | 4\u00a0821 | 4\u00a0783 |
Cash-settled share-based payment employee benefits | 7\u00a0150 | 6\u00a0042 |
Short-term employee benefits | 160\u00a0699 | 122\u00a0300 |
Termination benefits | 10\u00a0786 | 11\u00a0019 |
Total liabilities in the balance sheet | 253\u00a0130 | 210\u00a0104 |
of which | ||
Non-current liabilities \u00b9 | 75\u00a0971 | 68\u00a0037 |
Current liabilities | 177\u00a0159 | 142\u00a0068 |
Assets for | ||
Defined-benefit pension plans | -19\u00a0847 | -12\u00a0243 |
Total assets in the balance sheet | -19\u00a0847 | -12\u00a0243 |
Total net liabilities | 233\u00a0283 | 197\u00a0862 |
Defined-contribution plans
For defined-contribution plans, Bekaert pays contributions to publicly or privately administered pension funds or insurance companies. Once the contributions have been paid, the Group has no further payment obligation. These contributions constitute an expense for the year in which they are due.
The Belgian defined-contribution pension plans are by law subject to minimum guaranteed rates of return. Pension legislation defines the minimum guaranteed rate of return as a variable percentage linked to government bond yields observed in the market as from 1 January 2016 onwards. As of 2016 the minimum guaranteed rate of return became 1.75% on both employer contributions and employee contributions. The old rates (3.25% on employer contributions and 3.75% on employee contributions) continue to apply to the accumulated past contributions in the group insurance as at 31 December 2015. As a consequence, the defined-contribution plans are reported as defined-benefit obligations at year-end, whereby an actuarial valuation was performed.
in thousands of \u20ac | 2021 | 2022 |
Expenses recognized | 14\u00a0420 | 15\u00a0417 |
Several Bekaert companies operate retirement benefit and other post-employment benefit plans. These plans generally cover all employees and provide benefits which are related to salary and length of service.
The latest actuarial valuations under IAS 19 were carried out as of 31\u00a0December\u00a02022 for all significant post-employment defined-benefit plans by independent actuaries. The Group\u2019s largest defined-benefit obligations were in Belgium, the United States and the United Kingdom. They accounted for 85.9% (2021:\u00a090.3%) of the Group\u2019s defined-benefit obligations and 99.5% (2021:\u00a099.6%) of the Group\u2019s plan assets.
Plans in Belgium
The funded plans in Belgium mainly related to retirement plans representing a defined-benefit obligation of \u20ac\u00a0173.5\u00a0million (2021:\u00a0\u20ac 216.5\u00a0million) and \u20ac\u00a0182.9\u00a0million assets (2021:\u00a0\u20ac\u00a0213.4\u00a0million). This is including the related plans funded through a group insurance.
The traditional defined-benefit plans foresee in a lump sum payment upon retirement and in risk benefits in case of death or disability prior to retirement. The plans are externally funded through two self-administrated institutions for occupational retirement provision (IORP). On a regular basis, an Asset Liability Matching (ALM) study is performed in which the consequences of strategic investment policies are analyzed in terms of risk-and-return profiles. Statement of investment principles and funding policy are derived from this study. The purpose is to have a well-diversified asset allocation to control the risk. Investment risk and liability risk are monitored on a quarterly basis. Funding policy targets to be at least fully funded in terms of the technical provision (this is a prudent estimate of the pension liabilities).
Other plans mainly related to pre-retirement pensions (defined-benefit obligation \u20ac\u00a06.3\u00a0million (2021:\u00a0\u20ac\u00a08.0\u00a0million)) which are not externally funded. An amount of \u20ac\u00a03.8\u00a0million (2021:\u00a0\u20ac\u00a04.6\u00a0million) related to employees in active service who have not yet entered into any pre-retirement agreement.
Plans in the United States
The funded plans in the United States mainly related to pension plans representing a defined-benefit obligation of \u20ac\u00a0102.8\u00a0million (2021:\u00a0\u20ac\u00a0128.1\u00a0million) and assets of \u20ac\u00a099.1\u00a0million (2021:\u00a0\u20ac\u00a0124.4 million). The plans provide for benefits for the life of the plan members but have been closed for new entrants. Plan assets are invested, in fixed-income funds and in equities. Funding policy targets to be sufficiently funded in terms of Pension Protection Act requirements and thus to avoid benefit restrictions or at-risk status of the plans.
Unfunded plans included medical care plans (defined-benefit obligation \u20ac\u00a02.0\u00a0million (2021:\u00a0\u20ac\u00a02.4\u00a0million)).
Plans in the United Kingdom
The funded plan in the United Kingdom related to a pension scheme closed for new entrants and further accrual representing a defined-benefit obligation of \u20ac\u00a052.5\u00a0million (2021:\u00a0\u20ac\u00a093.6\u00a0million) and assets of \u20ac\u00a059.9\u00a0million (2021:\u00a0\u20ac\u00a0113.5\u00a0million). The scheme is administrated by a separate board of Trustees which is legally separate from the company. The Trustees are composed of representatives of both employer and employees. The Trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits.
The defined-benefit obligation solely includes benefits for deferred vested members (members whose employment has terminated and have not yet reached the eligible retirement age for drawing a pension) and pensioners (members who are already receiving pension as they have reached the eligible retirement age). Broadly, about 72% of the liabilities are attributable to deferred vested members and 28% to pensioners (2021:\u00a030%\u00a0pensioners).
UK legislation requires that pension schemes are funded prudently. The funding valuation of the scheme carried out as at 31 December 2019 by a qualified actuary showed a surplus of \u20ac\u00a07.4\u00a0million. As a consequence, the company is not required to pay contributions into the scheme. Administration costs are reported separately from IAS 19.
The amounts recognized in the balance sheet are as follows:
in thousands of \u20ac | 2021 | 2022 |
Belgium | ||
Present value of funded obligations | 216\u00a0562 | 173\u00a0519 |
Fair value of plan assets | -213\u00a0440 | -182\u00a0880 |
Deficit / surplus (-) of funded obligations | 3\u00a0122 | -9\u00a0361 |
Present value of unfunded obligations | 7\u00a0994 | 6\u00a0264 |
Total deficit / surplus (-) of obligations | 11\u00a0116 | -3\u00a0097 |
United States | ||
Present value of funded obligations | 128\u00a0125 | 102\u00a0803 |
Fair value of plan assets | -124\u00a0372 | -99\u00a0106 |
Deficit / surplus (-) of funded obligations | 3\u00a0753 | 3\u00a0697 |
Present value of unfunded obligations | 7\u00a0556 | 6\u00a0207 |
Total deficit / surplus (-) of obligations | 11\u00a0309 | 9\u00a0904 |
United Kingdom | ||
Present value of funded obligations | 93\u00a0635 | 52\u00a0464 |
Fair value of plan assets | -113\u00a0482 | -59\u00a0908 |
Deficit / surplus (-) of funded obligations | -19\u00a0847 | -7\u00a0444 |
Present value of unfunded obligations | \u2014 | \u2014 |
Total deficit / surplus (-) of obligations | -19\u00a0847 | -7\u00a0444 |
Other | ||
Present value of funded obligations | 2\u00a0545 | 3\u00a0103 |
Fair value of plan assets | -1\u00a0615 | -1\u00a0830 |
Deficit / surplus (-) of funded obligations | 930 | 1\u00a0273 |
Present value of unfunded obligations \u00b9 | 46\u00a0320 | 53\u00a0081 |
Total deficit / surplus (-) of obligations | 47\u00a0250 | 54\u00a0354 |
Total | ||
Present value of funded obligations | 440\u00a0867 | 331\u00a0889 |
Fair value of plan assets | -452\u00a0909 | -343\u00a0724 |
Deficit / surplus (-) of funded obligations | -12\u00a0042 | -11\u00a0835 |
Present value of unfunded obligations \u00b9 | 61\u00a0870 | 65\u00a0552 |
Total deficit / surplus (-) of obligations | 49\u00a0828 | 53\u00a0717 |
\u00b9 See note 2.8. 'Restatement effects'.
Liabilities at year end 2021 have been restated for Indonesia and reflect the impact of the May 2021 IFRIC agenda decision on the attribution of benefits to periods of service. This has resulted in a \u20ac\u00a01.7\u00a0million decrease of the defined-benefit obligation which has been reflected as a negative past service cost in restated 2021 numbers reported in the table below.
The movement in the defined-benefit obligation, plan assets, net liability and asset over the year were as follows.
in thousands of \u20ac | Defined-benefit obligation | Plan assets | Net liability / |
As at 1 January 2021 | 522\u00a0889 | -422\u00a0079 | 100\u00a0810 |
Current service cost | 17\u00a0424 | \u2014 | 17\u00a0424 |
Past service cost \u00b9 | -1\u00a0869 | \u2014 | -1\u00a0869 |
Gains (-) / losses from settlements | -87 | \u2014 | -87 |
Interest expense / income (-) | 7\u00a0384 | -5\u00a0500 | 1\u00a0884 |
Net benefit expense / income (-) recognized in profit and loss | 22\u00a0853 | -5\u00a0500 | 17\u00a0353 |
Components recognized in EBIT | 15\u00a0469 | ||
Components recognized in financial result | 1\u00a0884 | ||
Remeasurements | |||
Return on plan assets, excluding amounts included in interest expense / income (-) | \u2014 | -21\u00a0127 | -21\u00a0127 |
Gain (-) / loss from change in demographic assumptions | -1\u00a0622 | \u2014 | -1\u00a0622 |
Gain (-) / loss from change in financial assumptions | -28\u00a0439 | \u2014 | -28\u00a0439 |
Experience gains (-) / losses | 3\u00a0836 | \u2014 | 3\u00a0836 |
Changes recognized in equity | -26\u00a0224 | -21\u00a0127 | -47\u00a0351 |
Contributions | |||
Employer contributions / direct benefit payments | \u2014 | -19\u00a0430 | -19\u00a0430 |
Employee contributions | 148 | -148 | \u2014 |
Payments from plans | |||
Benefit payments | -32\u00a0275 | 32\u00a0275 | \u2014 |
Foreign-currency translation effect \u00b9 | 15\u00a0346 | -16\u00a0900 | -1\u00a0554 |
As at 31 December 2021 | 502\u00a0737 | -452\u00a0909 | 49\u00a0828 |
\u00b9 See note 2.8. 'Restatement effects'.
in thousands of \u20ac | Defined-benefit obligation | Plan assets | Net liability / |
As at 1 January 2022 | 502\u00a0737 | -452\u00a0909 | 49\u00a0828 |
Current service cost | 16\u00a0125 | \u2014 | 16\u00a0125 |
Past service cost | 54 | \u2014 | 54 |
Gains (-) / losses from settlements | 502 | \u2014 | 502 |
Interest expense / income (-) | 9\u00a0822 | -7\u00a0928 | 1\u00a0894 |
Net benefit expense / income (-) recognized in profit and loss | 26\u00a0503 | -7\u00a0928 | 18\u00a0575 |
Components recognized in EBIT | 16\u00a0681 | ||
Components recognized in financial result | 1\u00a0894 | ||
Remeasurements | |||
Return on plan assets, excluding amounts included in interest expense / income (-) | \u2014 | 97\u00a0349 | 97\u00a0349 |
Gain (-) / loss from change in demographic assumptions | 1\u00a0903 | \u2014 | 1\u00a0903 |
Gain (-) / loss from change in financial assumptions | -119\u00a0037 | \u2014 | -119\u00a0037 |
Experience gains (-) / losses | 16\u00a0392 | \u2014 | 16\u00a0392 |
Changes recognized in equity | -100\u00a0742 | 97\u00a0349 | -3\u00a0393 |
Contributions | |||
Employer contributions / direct benefit payments | \u2014 | -11\u00a0933 | -11\u00a0933 |
Employee contributions | 130 | -130 | \u2014 |
Payments from plans | |||
Benefit payments | -35\u00a0786 | 35\u00a0786 | \u2014 |
Foreign-currency translation effect | 4\u00a0599 | -3\u00a0959 | 640 |
As at 31 December 2022 | 397\u00a0441 | -343\u00a0724 | 53\u00a0717 |
Gains and losses from settlements in 2022 mainly related to restructurings in Ecuador (\u20ac\u00a00.4\u00a0million\u00a0gain), Indonesia (\u20ac\u00a00.9\u00a0million\u00a0loss). The past service cost related to recognition of past service in Turkey upon permanent recruitment of temporary workforce. In the income statement, current and past service cost, including gains or losses from settlements are included in the operating result (EBIT), and interest expense or income is included in interest expense, under interest element of interest-bearing provisions.
Changes recognized in equity amounted in 2022 to \u20ac -3.4\u00a0million and were driven by \u20ac\u00a097.3 million loss on plan assets reflecting negative asset return, offset by \u20ac\u00a0100.7 million gains in defined benefit obligation. The latter can be broken down into \u20ac 119.0 million gains due to changes in financial assumptions reflecting increased discount rates and increased inflation assumptions, \u20ac\u00a01.9 million losses due to changes in demographic assumptions and \u20ac\u00a016.4\u00a0million losses in liabilities due to experience.
Reimbursement rights arising from reinsurance contracts covering retirement pensions, death and disability benefits in Germany amounted to less than \u20ac\u00a00.1\u00a0million (2021:\u00a0\u20ac\u00a00.1 million).
Estimated contributions and direct benefit payments for 2023 are as follows:
Estimated contributions and direct benefit payments | |
in thousands of \u20ac | 2023 |
Pension plans | 18\u00a0141 |
Fair values of plan assets at 31 December were as follows:
in thousands of \u20ac | 2021 | 2022 |
Belgium | ||
Bonds | 55\u00a0905 | 53\u00a0018 |
Equity | 94\u00a0366 | 69\u00a0047 |
Cash | 4\u00a0077 | 3\u00a0000 |
Insurance contracts | 59\u00a0092 | 57\u00a0815 |
Total Belgium | 213\u00a0440 | 182\u00a0880 |
United States | ||
Bonds | ||
USD Long Duration Bonds | 36\u00a0617 | 29\u00a0060 |
USD Fixed Income | 5\u00a0842 | 4\u00a0817 |
USD Guaranteed Deposit | 4\u00a0437 | 4\u00a0235 |
Equity | ||
USD Equity | 49\u00a0690 | 38\u00a0372 |
Non-USD Equity | 20\u00a0317 | 17\u00a0970 |
Real estate | 7\u00a0470 | 4\u00a0652 |
Total United States | 124\u00a0372 | 99\u00a0106 |
United Kingdom | ||
Bonds | 35\u00a0480 | 16\u00a0009 |
Derivatives | 62\u00a0806 | 37\u00a0015 |
Equity | 13\u00a0850 | 5\u00a0677 |
Cash | 1\u00a0346 | 1\u00a0207 |
Total United Kingdom | 113\u00a0482 | 59\u00a0908 |
Other | ||
Bonds | 1\u00a0614 | 1\u00a0830 |
Total Other | 1\u00a0614 | 1\u00a0830 |
Total | 452\u00a0909 | 343\u00a0724 |
In the USA, investments are primarily made through mutual fund investments and insurance company separate accounts, in quoted equity and debt instruments. In Belgium, the investments are made through mutual fund investments in quoted equity and debt instruments. Investments are well-diversified so that the failure of any single investment would not have a material impact on the overall level of assets. In UK a large proportion of assets is invested in liability driven investments and bonds.
The Group\u2019s plan assets include no direct positions in Bekaert shares or bonds, nor do they include any property used by a Bekaert entity.
The principal actuarial assumptions on the balance sheet date (weighted averages based on outstanding DBO) were:
Actuarial assumptions | 2021 | 2022 |
Discount rate | 2.0% | 4.7% |
Future salary increases | 3.3% | 3.7% |
Underlying inflation rate | 2.3% | 2.8% |
Health care cost increases (initial) | 6.5% | 7.5% |
Health care cost increases (ultimate) | 5.0% | 5.0% |
Health care (years to ultimate rate) | 6 | 10 |
The discount rate for the UK, USA and Belgium is reflective both of the current interest rate environment and the plan\u2019s distinct liability characteristics. The plan\u2019s projected cash flows are matched to spot rates, after which an associated present value is developed. A single equivalent discount rate is then determined that produces that same present value. The underlying yield curve for deriving spot rates is based on high quality AA-credit rated corporate bonds issues denominated in the currency of the applicable regional market.
This resulted into the following discount rates:
Discount rates | 2021 | 2022 |
Belgium | 1.0% | 3.8% |
United States | 2.8% | 5.3% |
United Kingdom | 1.9% | 5.0% |
Other | 4.7% | 6.3% |
This resulted into the following inflation rates:
Inflation rates | 2021 | 2022 |
Belgium | 1.8% | 2.2% |
United States | N/A | N/A |
United Kingdom | 3.3% | 3.3% |
Other | 2.9% | 4.8% |
Total | 2.3% | 2.8% |
Assumptions regarding future mortality are based on actuarial advice in accordance with published statistics and experience in each territory. These assumptions translated into the following average life expectancy in years for a pensioner retiring at age 65.
2021 | 2022 | |
Life expectancy of a man aged 65 (years) at balance sheet date | 20.2 | 20.2 |
Life expectancy of a woman aged 65 (years) at balance sheet date | 22.6 | 22.7 |
Life expectancy of a man aged 65 (years) ten years after balance sheet date | 20.9 | 20.9 |
Life expectancy of a woman aged 65 (years) ten years after balance sheet date | 23.4 | 23.4 |
Sensitivity analyses show the following effects:
Sensitivity analysis | ||||
in thousands of \u20ac | Change in assumption | Impact on defined-benefit obligation | ||
Discount rate | -0.50% | Increase by | 17\u00a0354 | 4.4% |
Salary growth rate | 0.50% | Increase by | 4\u00a0007 | 1.0% |
Health care cost | 0.50% | Increase by | 83 | 0.02% |
Life expectancy | 1 year | Increase by | 4\u00a0616 | 1.2% |
The above analyses were done on a mutually exclusive basis, while holding all other assumptions constant.
Through its defined-benefit plans, the Group is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility | The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets underperform this yield, this will create a deficit. |
Changes in bond yields | A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans\u2019 bond holdings. |
Salary risk | The majority of the plans\u2019 benefit obligations are calculated by reference to the future salaries of plan members. As such, a salary increase of plan members higher than expected will lead to higher liabilities. |
Longevity risk | Belgian pension plans provide for lump sum payments upon retirement. As such, there is limited or no longevity risk. Pension plans in the USA and UK provide for benefits for the life of the plan members, so increases in life expectancy will result in an increase in the plans\u2019 liabilities. |
The weighted average durations of the defined-benefit obligations were as follows:
Weighted average durations of the DBO | ||
in years | 2021 | 2022 |
Belgium | 12.5 | 10.0 |
United States | 11.5 | 9.5 |
United Kingdom | 20.0 | 16.5 |
Other | 10.3 | 9.7 |
Total | 13.4 | 10.7 |
Termination benefits
Termination benefits are cash and other services paid to employees when their employment has been terminated.
Other long-term employee benefits
Stock appreciation rights (\u2018SAR\u2019)
The Group issues stock appreciation rights (SARs) for certain management employees, granting them the right to receive the intrinsic value of the SARs at the date of exercise. These SARs are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant is recalculated at balance sheet date, using a binomial pricing model. Based on local regulations, the exercise price for any grant under the USA SAR plan is equal to the average closing price of the Company\u2019s share during the thirty days following the date of the offer. The exercise price for the other SAR plans is determined in the same way as for the equity-settled stock option plans: it is equal to the lower of (i) the average closing price of the Company\u2019s share during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer.
Following inputs to the model are used for all grants: share price at balance sheet date: \u20ac 36.28 (2021: \u20ac 39.14), expected volatility in a range between 31% and 37% (2021: 34%), expected dividend yield in a range between 4.3% and 4.6% (2021: 3.0%), vesting period of 3\u00a0years and a contractual life of 10\u00a0years. Inputs for risk-free interest rates vary by grant and are based on the return of Belgian OLO\u2019s (Obligation Lin\u00e9aire / Lineaire Obligatie) with a term equal to the maturity of the SAR grant under consideration.
Exercise prices and fair values of outstanding SARs by grant are shown below:
USA SAR Plan details by grant | ||||
in \u20ac | Granted | Exercise price | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2013 | 20\u00a0900 | 22.09 | 17.04 | \u2014 |
Grant 2014 | 36\u00a0800 | 25.66 | 13.72 | 11.17 |
Grant 2015 | 40\u00a0200 | 25.45 | 13.99 | 11.68 |
Grant 2016 | 20\u00a0250 | 28.38 | 11.91 | 11.33 |
Grant 2017 | 26\u00a0375 | 38.86 | 7.88 | 7.35 |
Grant 2018 | 16\u00a0875 | 37.06 | 8.76 | 8.95 |
Other SAR Plans details by grant | ||||
in \u20ac | Granted | Exercise price | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2013 | 24\u00a0500 | 19.20 | 19.92 | \u2014 |
Exceptional grant 2013 | 10\u00a0000 | 21.45 | 17.69 | \u2014 |
Grant 2014 | 54\u00a0800 | 25.38 | 13.96 | 11.39 |
Grant 2015 | 44\u00a0700 | 26.06 | 13.42 | 11.24 |
Grant 2016 | 38\u00a0500 | 26.38 | 13.33 | 12.42 |
Grant 2017 | 53\u00a0000 | 39.43 | 7.85 | 7.35 |
Grant 2018 | 37\u00a0500 | 34.60 | 9.48 | 9.74 |
At 31 December 2022, the total liability for the USA SAR plan amounted to \u20ac 0.3 million (2021: \u20ac 0.4 million), while the total liability for the other SAR plans amounted to \u20ac 0.5 million (2021: \u20ac 0.5 million).
The Group recorded a total income of \u20ac\u00a00.1\u00a0million (2021: income of \u20ac\u00a00.0\u00a0million) during the year in respect of SARs.
Performance Share Units (\u2018PSU\u2019)
Certain management employees received cash-settled Performance Share Units (PSUs) entitling the beneficiary to receive the value of Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and during 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy, and can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the performance target is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment.
These Performance Share Units are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant under PSU 2018-2020 and under PSU 2022-2024 is equal to the share price at balance sheet date, since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow).
The fair value of outstanding Performance Share Units by grant is shown below:
Performance Share Units details by grant | |||
in \u20ac | Granted | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2020 | 45\u00a0141 | 39.14 | 36.28 |
Grant 2020 | 444 | 39.14 | 36.28 |
Grant 2021 | 4\u00a0567 | 39.14 | 36.28 |
Grant 2022 | 24\u00a0832 | \u2014 | 36.28 |
At 31 December 2022, the total liability for the USA PSUs amounted to \u20ac\u00a01.6\u00a0million (2021:\u00a0\u20ac\u00a01.6\u00a0million), while the total liability for the other PSUs amounted to \u20ac\u00a03.7\u00a0million (2021:\u00a0\u20ac\u00a04.8\u00a0million).
The Group recorded a total cost of \u20ac\u00a02.2\u00a0million (2021: cost of \u20ac\u00a04.8\u00a0million) during the year in respect of PSUs.
in thousands of \u20ac | 2021 | 2022 |
Number of persons | 34 | 32 |
Short-term employee benefits | ||
Basic remuneration | 8\u00a0407 | 8\u00a0368 |
Variable remuneration | 4\u00a0126 | 6\u00a0314 |
Remuneration as directors of subsidiaries | 511 | 513 |
Post-employment benefits | ||
Defined-benefit pension plans | 327 | 190 |
Defined-contribution pension plans | 1\u00a0551 | 1\u00a0594 |
Share-based payment benefits | 11\u00a0719 | 6\u00a0467 |
Total gross remuneration | 26\u00a0641 | 23\u00a0446 |
Average gross remuneration per person | 784 | 733 |
Number of performance share units granted (cash-settled and equity-settled) | 131\u00a0442 | 111\u00a0135 |
Number of matching share units to be granted | 9\u00a0112 | 13\u00a0757 |
Number of shares granted | 10\u00a0940 | 12\u00a0080 |
(b). Reclassification of implementation and customization costs linked to cloud computing arrangements
In April 2021, the IFRS Interpretation Committee published an agenda decision on the clarification of accounting for the costs of configuring or customizing the supplier's application software in a SaaS arrangement that is determined to be a service contract.
The Group previously capitalized costs incurred in configuring or customizing a supplier's application software in a cloud-based computing arrangement as intangible assets as the Group considered that it would benefit form those costs over the life of the asset.
Due to the nature of this agenda decision and the level of spend incurred in relation to the Groups' Digital Transformation, the Group has reviewed its accounting policy to align with the IFRIC guidance issued in relation to Software-as-a-service (SaaS) costs previously capitalized. The Group will only recognize costs as intangible assets if the configuration or customization activities create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Costs that do not result in intangible asses are expensed as incurred. The revision to the accounting policy has been accounted for retrospectively resulting in a prior year restatement. The restatement affects the balance sheet in NV Bekaert, where \u20ac\u00a04.1\u00a0million is reclassified from intangible assets into IT costs in the income statement.
For the purpose of this annual report, the reclassifications and restatement effects are not presented on the face of the other financial statements. They are summarized below in a concise format and referenced to one of the above restatement elements (a or b) where appropriate.
Cost | Licenses, patents & similar rights | Computer software\u00b2 | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 26\u00a0340 | 91\u00a0472 | 54\u00a0290 | 15\u00a0566 | 187\u00a0667 |
Expenditure | 17 | 7\u00a0093 | 1\u00a0627 | 2 | 8\u00a0739 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Transfers \u00b9 | 844 | 93 | \u2014 | \u2014 | 937 |
Exchange gains and losses (-) | 205 | 1\u00a0760 | 3\u00a0968 | 834 | 6\u00a0768 |
As at 31 December 2021 | 27\u00a0306 | 93\u00a0275 | 58\u00a0717 | 14\u00a0752 | 194\u00a0049 |
As at 1 January 2022 | 27\u00a0306 | 93\u00a0275 | 58\u00a0717 | 14\u00a0752 | 194\u00a0049 |
Expenditure | 2 | 14\u00a0933 | \u2014 | 3 | 14\u00a0937 |
Disposals and retirements | \u2014 | -34 | \u2014 | \u2014 | -34 |
Transfers \u00b9 | \u2014 | -691 | \u2014 | 734 | 43 |
New consolidations | 36 | \u2014 | \u2014 | 1\u00a0760 | 1\u00a0796 |
Exchange gains and losses (-) | -180 | 799 | -2\u00a0118 | -869 | -2\u00a0368 |
As at 31 December 2022 | 27\u00a0163 | 108\u00a0282 | 56\u00a0599 | 16\u00a0380 | 208\u00a0423 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
2 See note 2.8 'Restatement effects'.
Accumulated amortization and impairment | Licenses, patents & similar rights | Computer software | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 17\u00a0510 | 79\u00a0111 | 21\u00a0194 | 15\u00a0188 | 133\u00a0003 |
Charge for the year | 1\u00a0920 | 3\u00a0573 | 3\u00a0872 | 30 | 9\u00a0395 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Exchange gains (-) and losses | 11 | 1\u00a0575 | 1\u00a0616 | 1\u00a0184 | 4\u00a0386 |
As at 31 December 2021 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
As at 1 January 2022 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
Charge for the year | 1\u00a0989 | 3\u00a0722 | 4\u00a0162 | 409 | 10\u00a0282 |
Impairment losses | \u2014 | 214 | \u2014 | \u2014 | 214 |
Disposals and retirements | \u2014 | -50 | \u2014 | \u2014 | -50 |
Transfers \u00b9 | \u2014 | -32 | \u2014 | \u2014 | -32 |
Exchange gains (-) and losses | -26 | 711 | -796 | -752 | -863 |
As at 31 December 2022 | 21\u00a0303 | 81\u00a0681 | 28\u00a0880 | 14\u00a0409 | 146\u00a0274 |
Carry amount as at 31 December 2021 | 7\u00a0965 | 16\u00a0160 | 33\u00a0202 | \u2014 | 57\u00a0327 |
Carry amount as at 31 December 2022 | 5\u00a0860 | 26\u00a0601 | 27\u00a0718 | 1\u00a0971 | 62\u00a0149 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
This note mainly relates to goodwill on acquisition of subsidiaries. Goodwill in respect of joint ventures and associates is disclosed in note 6.5.\u00a0\u2018Investments in joint ventures and associates\u2019.
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 154\u00a0280 | 155\u00a0970 |
New consolidations | \u2014 | 1\u00a0376 |
Exchange gains and losses (-) | 1\u00a0689 | 556 |
As at 31 December | 155\u00a0970 | 157\u00a0901 |
Impairment losses | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 4\u00a0883 | 5\u00a0295 |
Exchange gains (-) and losses | 413 | 39 |
As at 31 December | 5\u00a0295 | 5\u00a0334 |
Carrying amount as at 31 December | 150\u00a0674 | 152\u00a0567 |
Goodwill acquired in a business combination is allocated on acquisition to the cash-generating units (CGU) that are expected to benefit from that business combination. The carrying amount of goodwill allocated and any related movements of the period are as follows:
2021 | |||||
in thousands of \u20ac | Group of cash-generating units | Carrying amount | Increases | Exchange differences | Carrying amount |
Subsidiaries | |||||
SWS | Bekaert Bradford UK Ltd | 2\u00a0490 | \u2014 | 174 | 2\u00a0664 |
SB | Combustion - heating EMEA | 3\u00a0027 | \u2014 | \u2014 | 3\u00a0027 |
SB | Building Products | 71 | \u2014 | \u2014 | 71 |
RR | Rubber Reinforcement | 4\u00a0255 | \u2014 | \u2014 | 4\u00a0255 |
SWS | Orrville plant (USA) | 9\u00a0560 | \u2014 | 798 | 10\u00a0357 |
SWS | Inchalam group | 727 | \u2014 | -70 | 657 |
SWS | Bekaert Ideal SL companies | 844 | 547 | 46 | 1\u00a0437 |
SWS | Bekaert (Qingdao) Wire Products Co Ltd | 385 | \u2014 | \u2014 | 385 |
SWS | Bekaert Jiangyin Wire Products Co Ltd | 47 | \u2014 | \u2014 | 47 |
SWS | Grating Peru SAC | 547 | -547 | \u2014 | \u2014 |
BBRG | BBRG | 127\u00a0445 | \u2014 | 329 | 127\u00a0774 |
Subtotal | 149\u00a0398 | \u2014 | 1\u00a0276 | 150\u00a0674 | |
Joint ventures and associates | |||||
SWS | Belgo Bekaert Arames Ltda | 2\u00a0358 | \u2014 | 24 | 2\u00a0382 |
RR | BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 1\u00a0442 | \u2014 | 14 | 1\u00a0456 |
Subtotal | 3\u00a0800 | \u2014 | 38 | 3\u00a0838 | |
Total | 153\u00a0198 | \u2014 | 1\u00a0314 | 154\u00a0513 |
2022 | |||||
in thousands of \u20ac | Group of cash-generating units | Carrying amount | Increases | Exchange differences | Carrying amount |
Subsidiaries | |||||
SWS | Bekaert Bradford UK Ltd | 2\u00a0664 | \u2014 | -140 | 2\u00a0523 |
SB | Combustion - heating EMEA | 3\u00a0027 | \u2014 | \u2014 | 3\u00a0027 |
SB | Building Products | 71 | \u2014 | \u2014 | 71 |
RR | Rubber Reinforcement | 4\u00a0255 | \u2014 | \u2014 | 4\u00a0255 |
SWS | Orrville plant (USA) | 10\u00a0357 | \u2014 | 641 | 10\u00a0998 |
SWS | Inchalam group | 657 | \u2014 | 42 | 699 |
SWS | Bekaert Ideal SL companies | 1\u00a0437 | 490 | 67 | 1\u00a0994 |
SWS | Bekaert (Qingdao) Wire Products Co Ltd | 385 | \u2014 | \u2014 | 385 |
SWS | Bekaert Jiangyin Wire Products Co Ltd | 47 | \u2014 | \u2014 | 47 |
BBRG | BBRG | 127\u00a0774 | 886 | -93 | 128\u00a0567 |
Subtotal | 150\u00a0674 | 1\u00a0376 | 517 | 152\u00a0567 | |
Joint ventures and associates | |||||
SWS | Belgo Bekaert Arames Ltda | 2\u00a0382 | \u2014 | 284 | 2\u00a0666 |
RR | BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 1\u00a0456 | \u2014 | 173 | 1\u00a0630 |
Subtotal | 3\u00a0838 | \u2014 | 457 | 4\u00a0295 | |
Total | 154\u00a0513 | 1\u00a0376 | 974 | 156\u00a0862 |
Following the merger of Grating Peru SAC into Productos de Acero Cassad\u00f3 S.A. in 2021, the initial goodwill allocated to Grating Peru SAC was reclassified under the Bekaert Ideal SL companies. The increases in goodwill related to the step-acquisition of VisionTek Engineering Srl and the acquisition of Sujetar, which is in the meantime merged into Productos de Acero Cassado SA.
The discount factor for all impairment tests is based on a (long-term) post-tax cost of capital, the risks being implicit in the cash flows. A weighted average cost of capital (WACC) is determined for euro, US dollar and Chinese renminbi regions. For countries or businesses with a higher perceived risk, the WACC is raised with a country or business specific risk factor. The WACC is post-tax based, since relevant cash flows are also post-tax based. In determining the weight of the cost of debt vs the cost of equity, a target gearing (net debt relative to equity) of 50% is used. For cash flow models stated in real terms (without inflation), the nominal WACC is adjusted for the expected inflation rate. For cash flow models in nominal terms, the nominal WACC is used. All parameters used for the calculation of the discount factors are reviewed at least annually.
In relation to the impairment testing of goodwill arising from the BBRG business combination, the following model characteristics have been used:
\u2022a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption based on a nominal perpetual growth rate of 2% (in\u00a02021:\u00a02%), which mainly is based on a conservative industrial GDP evolution assumption;
\u2022the cash flows reflect the evolution taking into account agreed action plans and are based on the assets in their current condition, without including the impacts of future restructuring not yet committed;
\u2022only capital expenditure required to maintain the assets in good working order are included; future capital expenditures improving or enhancing the assets in excess of their originally assessed standard of performance are not considered;
\u2022no cost structure improvements are taken into account unless they can be substantiated; and
\u2022the cash outflows relating to working capital are calculated as a percentage of incremental sales based on the past performance of BBRG.
The headroom for impairment, i.e., the excess of the recoverable amount over the carrying amount of the BBRG CGU is estimated at \u20ac 200.1 million (2021: \u20ac 375.0 million). The decrease is the combined result of the updated business plan (\u20ac -107.2 million) and by an increase of the capital employed of the business (\u20ac +67.7 million).
The following scenario\u2019s illustrate the sensitivity of this headroom to changes in the key assumptions of the business plan:
\u2022If the sales level would be 10% lower in all periods of the business plan, then headroom would be \u20ac 98.5 million lower (remaining \u20ac 101.6 million);
\u2022If the percentage Underlying EBITDA on sales would be 1% short from the forecasted level in all periods of the business plan, then headroom would be \u20ac 67.4 million lower (remaining \u20ac 132.7 million);
\u2022If the Underlying EBITDA would be \u20ac 5.0 million short from the forecasted level in all periods of the business plan, then headroom would be \u20ac\u00a052.8\u00a0million lower (remaining \u20ac\u00a0147.3\u00a0million);
\u2022If the discount factor would be 1% higher, then headroom would be \u20ac\u00a083.0\u00a0million lower (remaining \u20ac 117.1 million);
\u2022The combined effect of a lower sales level by 10% and a lower Underlying EBITDA margin by 1%, in all periods of the business plan would result in a drop of \u20ac 159.2 million in headroom (remaining \u20ac 40.9 million);
\u2022The combined effect of a lower sales level by 10%, a lower Underlying EBITDA margin by 1% in all periods of the business plan and a higher discount factor with 1% would result in an impairment loss of \u20ac\u00a024.6\u00a0million.
Based on current knowledge, reasonable changes in key assumptions (including discount rate, sales and margin evolution) would not generate impairments for any of the cash-generating units for which goodwill has been allocated.
Discount rates for impairment testing | |||||
2021 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.8% | 4.7% | 4.8% | ||
Long term interest rate | 2.1% | 5.2% | 4.9% | ||
Short term interest rate | 0.7% | 3.1% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 9.3% | 10.8% | 14.1% | |
Risk free rate = Rf | 0.1% | 1.6% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.0% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 12.8% | 14.8% | 19.3% | ||
Bekaert WACC - nominal | 9.1% | 11.4% | 14.5% | ||
Expected inflation | 2.1% | 2.3% | 3.0% | ||
Bekaert WACC in real terms pre-tax | 7.0% | 9.1% | 11.5% | ||
Bekaert WACC in real terms (indicative post-tax) | 4.6% | 6.0% | 7.6% |
Discount rates for impairment testing | |||||
2022 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.2% | 3.6% | 4.8% | ||
Long term interest rate | 1.5% | 3.9% | 4.9% | ||
Short term interest rate | 0.3% | 2.5% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 12.3% | 13.4% | 14.5% | |
Risk free rate = Rf | 2.7% | 3.8% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.3% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 16.8% | 18.4% | 19.9% | ||
Bekaert WACC - nominal | 8.5% | 9.8% | 10.8% | ||
Expected inflation | 2.0% | 2.1% | 2.3% | ||
Bekaert WACC in real terms | 6.5% | 7.7% | 8.5% |
(b). Reclassification of implementation and customization costs linked to cloud computing arrangements
In April 2021, the IFRS Interpretation Committee published an agenda decision on the clarification of accounting for the costs of configuring or customizing the supplier's application software in a SaaS arrangement that is determined to be a service contract.
The Group previously capitalized costs incurred in configuring or customizing a supplier's application software in a cloud-based computing arrangement as intangible assets as the Group considered that it would benefit form those costs over the life of the asset.
Due to the nature of this agenda decision and the level of spend incurred in relation to the Groups' Digital Transformation, the Group has reviewed its accounting policy to align with the IFRIC guidance issued in relation to Software-as-a-service (SaaS) costs previously capitalized. The Group will only recognize costs as intangible assets if the configuration or customization activities create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Costs that do not result in intangible asses are expensed as incurred. The revision to the accounting policy has been accounted for retrospectively resulting in a prior year restatement. The restatement affects the balance sheet in NV Bekaert, where \u20ac\u00a04.1\u00a0million is reclassified from intangible assets into IT costs in the income statement.
For the purpose of this annual report, the reclassifications and restatement effects are not presented on the face of the other financial statements. They are summarized below in a concise format and referenced to one of the above restatement elements (a or b) where appropriate.
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Cost | Licenses, patents & similar rights | Computer software\u00b2 | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 26\u00a0340 | 91\u00a0472 | 54\u00a0290 | 15\u00a0566 | 187\u00a0667 |
Expenditure | 17 | 7\u00a0093 | 1\u00a0627 | 2 | 8\u00a0739 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Transfers \u00b9 | 844 | 93 | \u2014 | \u2014 | 937 |
Exchange gains and losses (-) | 205 | 1\u00a0760 | 3\u00a0968 | 834 | 6\u00a0768 |
As at 31 December 2021 | 27\u00a0306 | 93\u00a0275 | 58\u00a0717 | 14\u00a0752 | 194\u00a0049 |
As at 1 January 2022 | 27\u00a0306 | 93\u00a0275 | 58\u00a0717 | 14\u00a0752 | 194\u00a0049 |
Expenditure | 2 | 14\u00a0933 | \u2014 | 3 | 14\u00a0937 |
Disposals and retirements | \u2014 | -34 | \u2014 | \u2014 | -34 |
Transfers \u00b9 | \u2014 | -691 | \u2014 | 734 | 43 |
New consolidations | 36 | \u2014 | \u2014 | 1\u00a0760 | 1\u00a0796 |
Exchange gains and losses (-) | -180 | 799 | -2\u00a0118 | -869 | -2\u00a0368 |
As at 31 December 2022 | 27\u00a0163 | 108\u00a0282 | 56\u00a0599 | 16\u00a0380 | 208\u00a0423 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
2 See note 2.8 'Restatement effects'.
Accumulated amortization and impairment | Licenses, patents & similar rights | Computer software | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 17\u00a0510 | 79\u00a0111 | 21\u00a0194 | 15\u00a0188 | 133\u00a0003 |
Charge for the year | 1\u00a0920 | 3\u00a0573 | 3\u00a0872 | 30 | 9\u00a0395 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Exchange gains (-) and losses | 11 | 1\u00a0575 | 1\u00a0616 | 1\u00a0184 | 4\u00a0386 |
As at 31 December 2021 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
As at 1 January 2022 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
Charge for the year | 1\u00a0989 | 3\u00a0722 | 4\u00a0162 | 409 | 10\u00a0282 |
Impairment losses | \u2014 | 214 | \u2014 | \u2014 | 214 |
Disposals and retirements | \u2014 | -50 | \u2014 | \u2014 | -50 |
Transfers \u00b9 | \u2014 | -32 | \u2014 | \u2014 | -32 |
Exchange gains (-) and losses | -26 | 711 | -796 | -752 | -863 |
As at 31 December 2022 | 21\u00a0303 | 81\u00a0681 | 28\u00a0880 | 14\u00a0409 | 146\u00a0274 |
Carry amount as at 31 December 2021 | 7\u00a0965 | 16\u00a0160 | 33\u00a0202 | \u2014 | 57\u00a0327 |
Carry amount as at 31 December 2022 | 5\u00a0860 | 26\u00a0601 | 27\u00a0718 | 1\u00a0971 | 62\u00a0149 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
Other operating revenues | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties received | 15\u00a0209 | 18\u00a0673 | 3\u00a0464 |
Gains on disposal of PP&E and intangible assets | 8\u00a0458 | 12\u00a0340 | 3\u00a0883 |
Realized exchange results on sales and purchases | 1\u00a0237 | \u2014 | -1\u00a0237 |
Tax rebates | 429 | 26 | -403 |
Government grants | 1\u00a0039 | 2\u00a0631 | 1\u00a0592 |
Compensations received for claims | 2\u00a0855 | 2\u00a0345 | -510 |
Restructuring\u00b9 | 23\u00a0304 | 1\u00a0515 | -21\u00a0789 |
Environmental | 148 | 100 | -48 |
Other revenues\u00b2 | 11\u00a0876 | 10\u00a0217 | -1\u00a0659 |
Total | 64\u00a0556 | 47\u00a0848 | -16\u00a0709 |
\u00b9 Mainly relates to disposal of PP&E
2 See note 2.8. 'Restatement effects'
Other operating expenses | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties paid | -1\u00a0012 | -951 | 62 |
Losses on disposal of PP&E and intangible assets | -1\u00a0375 | -760 | 615 |
Amortization of intangible assets | -1\u00a0512 | -1\u00a0500 | 12 |
Bank charges | -2\u00a0776 | -3\u00a0660 | -884 |
Tax related expenses (other than income taxes) | -2\u00a0639 | -3\u00a0841 | -1\u00a0202 |
Impairment losses | -278 | -857 | -579 |
Restructuring | -12\u00a0379 | -5\u00a0932 | 6\u00a0447 |
Environmental | -37 | -1\u00a0225 | -1\u00a0187 |
Losses on business disposals | -170 | -210 | -40 |
Other expenses | -6\u00a0716 | -6\u00a0912 | -196 |
Total | -28\u00a0894 | -25\u00a0848 | 3\u00a0046 |
The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature.
in thousands of \u20ac | 2021 | % on sales | 2022 | % on sales |
Sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Other operating revenues\u00b9 | 64\u00a0556 | \u2014 | 47\u00a0848 | \u2014 |
Total operating revenues | 4\u00a0904\u00a0215 | \u2014 | 5\u00a0699\u00a0637 | \u2014 |
Own construction of PP&E | 31\u00a0872 | 0.7% | 47\u00a0175 | 0.8% |
Raw materials | -1\u00a0995\u00a0508 | -41.2% | -2\u00a0362\u00a0439 | -41.8% |
Semi-finished products and goods for resale | -523\u00a0793 | -10.8% | -529\u00a0817 | -9.4% |
Change in work-in-progress and finished goods | 277\u00a0348 | 5.7% | 20\u00a0192 | 0.4% |
Staff costs | -840\u00a0348 | -17.4% | -869\u00a0955 | -15.4% |
Depreciation and amortization | -166\u00a0905 | -3.4% | -202\u00a0795 | -3.6% |
Impairment losses | 1\u00a0518 | 0.0% | -57\u00a0934 | -1.0% |
Transport and handling of finished goods | -249\u00a0476 | -5.2% | -303\u00a0486 | -5.4% |
Consumables and spare parts | -273\u00a0318 | -5.6% | -314\u00a0986 | -5.6% |
Utilities | -264\u00a0128 | -5.5% | -348\u00a0113 | -6.2% |
Maintenance and repairs | -66\u00a0054 | -1.4% | -77\u00a0908 | -1.4% |
Lease and related expenses | -9\u00a0451 | -0.2% | -38\u00a0129 | -0.7% |
Commissions in selling expenses | -8\u00a0008 | -0.2% | -8\u00a0739 | -0.2% |
Export VAT and export customs duty | -12\u00a0760 | -0.3% | -16\u00a0350 | -0.3% |
ICT costs\u00b9 | -44\u00a0148 | -0.9% | -59\u00a0960 | -1.1% |
Advertising and sales promotion | -6\u00a0444 | -0.1% | -7\u00a0655 | -0.1% |
Travel, restaurant & hotel | -8\u00a0605 | -0.2% | -15\u00a0810 | -0.3% |
Consulting and other fees | -40\u00a0314 | -0.8% | -42\u00a0284 | -0.7% |
Office supplies and equipment | -8\u00a0472 | -0.2% | -10\u00a0331 | -0.2% |
Venture capital funds R&D | -1\u00a0447 | 0.0% | -1\u00a0297 | 0.0% |
Temporary or external labor | -36\u00a0238 | -0.7% | -40\u00a0910 | -0.7% |
Insurance expenses | -15\u00a0427 | -0.3% | -17\u00a0689 | -0.3% |
Miscellaneous | -133\u00a0520 | -2.8% | -74\u00a0664 | -1.3% |
Total operating expenses\u00b9 | -4\u00a0393\u00a0626 | -90.8% | -5\u00a0333\u00a0884 | -94.4% |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 10.6% | 365\u00a0754 | 6.5% |
\u00b9 See note 2.8 'Restatement effects'
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
2021 | Number | |
Weighted average number of ordinary shares (basic) | 57\u00a0000\u00a0709 | |
Dilution effect of share-based payment arrangements | 620\u00a0115 | |
Weighted average number of ordinary shares (diluted) | 57\u00a0620\u00a0824 |
in thousands of \u20ac | Basic | Diluted |
Result for the period attributable to ordinary shareholders \u00b9 | 404\u00a0062 | 404\u00a0062 |
Earnings | 404\u00a0062 | 404\u00a0062 |
Earnings per share (in \u20ac) | 7.089 | 7.012 |
\u00b9 See note 2.8 'Restatement effects'
2022 | Number | |
Weighted average number of ordinary shares (basic) | 56\u00a0194\u00a0711 | |
Dilution effect of share-based payment arrangements | 468\u00a0231 | |
Weighted average number of ordinary shares (diluted) | 56\u00a0662\u00a0942 |
\u00a0
in thousands of \u20ac | Basic | Diluted |
Result for the period attributable to ordinary shareholders | 268\u00a0859 | 268\u00a0859 |
Earnings | 268\u00a0859 | 268\u00a0859 |
Earnings per share (in \u20ac) | 4.784 | 4.745 |
Earnings per share (\u2018EPS\u2019) is the amount of post-tax profit attributable to each share. Basic EPS is calculated as the result for the period attributable to equity holders of Bekaert divided by the weighted average number of shares outstanding during the year. Diluted EPS reflects any commitments of the Group to issue shares in the future. These comprise shares to be issued for equity-settled share-based payment plans (subscription rights, options, performance shares and matching shares, see note 6.13. \u2018Ordinary shares, treasury shares and equity-settled share-based payments\u2019).
Subscription rights, options and other share-based payment arrangements are only dilutive to the extent that their issue price is lower than the average closing price of the period, in which the issue price includes the fair value of any services to be rendered during the remainder of the vesting period. Contingently issuable shares (e.g. performance shares) are only dilutive if the conditions are satisfied at the balance sheet date. The dilution effect of share-based payment arrangements is limited to the weighted average number of shares to be used in the denominator of the EPS ratio; there is no effect on the earnings to be used in the numerator of the EPS ratio.
To calculate the dilution impact, it is assumed that all dilutive potential shares are issued at the beginning of the period, or, if the instruments were granted during the period, at the grant date. This resulted in a total dilution effect of \u20ac -0.04 per share (2021: \u20ac -0.08).
The average closing price during 2022 was \u20ac 34.02 per share (2021:\u00a0\u20ac\u00a036.33\u00a0per share). The following table presents all anti-dilutive instruments for the period presented. Options and subscription rights were out of the money because their issue price exceeded the average closing price, while performance shares were anti-dilutive because the performance condition was not fulfilled.
Anti-dilutive instruments | Date granted | Issue price (in \u20ac) | Number granted | Number outstanding |
SOP 2015-2017 - options | 13.02.2017 | 39.43 | 273\u00a0325 | 226\u00a0056 |
SOP 2015-2017 - options | 19.01.2018 | 34.6 | 225\u00a0475 | 144\u00a0600 |
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
Sales and gross profit | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Sales | 4\u00a0839\u00a0659 | 5\u00a0651\u00a0790 | 16.8% |
Cost of sales | -3\u00a0953\u00a0752 | -4\u00a0879\u00a0310 | 23.4% |
Gross profit | 885\u00a0907 | 772\u00a0479 | -12.8% |
Gross profit in % of sales | 18.3% | 13.7% |
Bekaert achieved consolidated sales of \u20ac 5.7 billion in 2022, an increase of 16.8% compared to 2021, a result of responding quickly to the economic challenges and high cost inflation with product price rises. The organic sales increase (11.8%) was driven by increased wire rod prices (10.5%) and other price-mix effects for the full year (10.1%), partially offset by a decrease in volumes (-8.8%). The currency movements were 5% positive (mainly related to movements in US dollar\u00a0and\u00a0Chinese\u00a0renminbi).
Gross profit of the Group decreased by \u20ac 113.4 million in absolute terms (-12.8%), resulting in a margin of 13.7% (2021: 18.3%). This was due to the decline in volumes in combination with high inflation and higher costs for utilities and materials. The decrease has partially been compensated by increasing product prices to the customers.
Overheads | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Selling expenses | -186\u00a0239 | -205\u00a0938 | 10.6% |
Administrative expenses\u00b9 | -165\u00a0204 | -160\u00a0472 | -2.9% |
Research and development expenses | -59\u00a0537 | -62\u00a0315 | 4.7% |
Total | -410\u00a0980 | -428\u00a0725 | 4.3% |
\u00b9 See note 2.8 'Restatement effects'
The overhead expenses increased by \u20ac 17.7 million to \u20ac\u00a0428.7 million (7.6%\u00a0on sales). The increase in absolute value was mainly due to negative FX impact of \u20ac\u00a0-10.5\u00a0million (mainly related to negative exchange results in US dollar and Chinese renminbi), and higher expenses on IT projects, as a result of the digital transformation. The one-off impact from restructuring programs on overheads increased by \u20ac\u00a05.3\u00a0million and mainly related to lay-off costs.
In 2022, selling expenses included bad debt allowances recognized for \u20ac\u00a0-6.0\u00a0million (2021: \u20ac -3.0 million) and reversal of bad debt allowances for amounts used and not used for \u20ac\u00a08.0\u00a0million\u00a0(2021:\u00a0\u20ac 4.4\u00a0million).
Other operating revenues | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties received | 15\u00a0209 | 18\u00a0673 | 3\u00a0464 |
Gains on disposal of PP&E and intangible assets | 8\u00a0458 | 12\u00a0340 | 3\u00a0883 |
Realized exchange results on sales and purchases | 1\u00a0237 | \u2014 | -1\u00a0237 |
Tax rebates | 429 | 26 | -403 |
Government grants | 1\u00a0039 | 2\u00a0631 | 1\u00a0592 |
Compensations received for claims | 2\u00a0855 | 2\u00a0345 | -510 |
Restructuring\u00b9 | 23\u00a0304 | 1\u00a0515 | -21\u00a0789 |
Environmental | 148 | 100 | -48 |
Other revenues\u00b2 | 11\u00a0876 | 10\u00a0217 | -1\u00a0659 |
Total | 64\u00a0556 | 47\u00a0848 | -16\u00a0709 |
\u00b9 Mainly relates to disposal of PP&E
2 See note 2.8. 'Restatement effects'
Other operating expenses | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties paid | -1\u00a0012 | -951 | 62 |
Losses on disposal of PP&E and intangible assets | -1\u00a0375 | -760 | 615 |
Amortization of intangible assets | -1\u00a0512 | -1\u00a0500 | 12 |
Bank charges | -2\u00a0776 | -3\u00a0660 | -884 |
Tax related expenses (other than income taxes) | -2\u00a0639 | -3\u00a0841 | -1\u00a0202 |
Impairment losses | -278 | -857 | -579 |
Restructuring | -12\u00a0379 | -5\u00a0932 | 6\u00a0447 |
Environmental | -37 | -1\u00a0225 | -1\u00a0187 |
Losses on business disposals | -170 | -210 | -40 |
Other expenses | -6\u00a0716 | -6\u00a0912 | -196 |
Total | -28\u00a0894 | -25\u00a0848 | 3\u00a0046 |
The royalty income increased with 23% due to higher sales. Government grants mainly related to subsidies in China. There are no indications that the conditions attached to those grants will not be complied with in the future and therefore it is not expected that subsidies may have to be refunded.
The gain on the disposal of PP&E and intangible assets contained in 2022 the revenues from the sale of assets not included in restructuring programs, primarily in the UK.
Due to a change in presentation the group no longer shows realized exchange results on sales and purchases as a separate line in the other operating revenues. The impact is now shown in cost of sales.
In 2022 \u2018Restructuring - revenues\u2019 mainly consists of the gain from the sales of land and buildings following plant closures due to restructuring. 'Restructuring - expenses\u2019 on the other hand includes part of the cost (lay-off costs) related to restructuring programs and plant closures.
In 2021 \u2018Restructuring - revenues\u2019 mainly consists of the gain from the sales of land and buildings following plant closures due to restructuring. Additional impact coming from the reversals of write-downs on inventories and impairment losses on intangibles and PP&E. \u2018Restructuring - expenses\u2019 on the other hand includes part of the cost (lay-off costs and impairment) related to restructuring programs and plant closures.
The impairment losses in 2022 are mainly for assets the United States as a result of the closure of plants.
The environmental costs in 2022 are mainly to the building remediation project in Rome (US) and environmental provisions related to the closure of the Figline plant (Italy).
The other section of other operating revenues included in 2022 and in 2021 CTA impact on business disposals.
The following tables reconcile reported and underlying results and present an analysis of one-off items by category (as defined in note 2.6. \u2018Alternative performance measures\u2019), operating segment and income statement line item.
EBIT Reported and Underlying | 2021 | 2022 | ||||
in thousands of \u20ac | reported | of which underlying | of which one-offs | reported | of which underlying | of which one-offs |
Sales | 4\u00a0839\u00a0659 | 4\u00a0839\u00a0659 | \u2014 | 5\u00a0651\u00a0790 | 5\u00a0651\u00a0790 | \u2014 |
Cost of sales | -3\u00a0953\u00a0752 | -3\u00a0936\u00a0874 | -16\u00a0878 | -4\u00a0879\u00a0310 | -4\u00a0795\u00a0329 | -83\u00a0981 |
Gross profit | 885\u00a0907 | 902\u00a0785 | -16\u00a0878 | 772\u00a0479 | 856\u00a0460 | -83\u00a0981 |
Selling expenses | -186\u00a0239 | -186\u00a0017 | -222 | -205\u00a0938 | -204\u00a0858 | -1\u00a0080 |
Administrative expenses\u00b9 | -165\u00a0204 | -166\u00a0574 | 1\u00a0370 | -160\u00a0472 | -157\u00a0414 | -3\u00a0059 |
Research and development expenses | -59\u00a0537 | -59\u00a0440 | -97 | -62\u00a0315 | -62\u00a0139 | -176 |
Other operating revenues\u00b9 | 64\u00a0556 | 37\u00a0745 | 26\u00a0812 | 47\u00a0848 | 45\u00a0204 | 2\u00a0643 |
Other operating expenses | -28\u00a0894 | -16\u00a0377 | -12\u00a0517 | -25\u00a0848 | -18\u00a0691 | -7\u00a0157 |
Operating result (EBIT) | 510\u00a0589 | 512\u00a0121 | -1\u00a0531 | 365\u00a0754 | 458\u00a0563 | -92\u00a0810 |
\u00b9 See note 2.8 'Restatement effects'
One-off items 2021 | |||||||
in thousands of \u20ac | Cost of Sales | Selling expenses | Administrative | R&D | Other operating revenues | Other operating expenses | Total |
Restructuring programs by segment | |||||||
Rubber Reinforcement 1 | -1\u00a0749 | 356 | -25 | -171 | \u2014 | \u2014 | -1\u00a0588 |
Steel Wire Solutions 2 | -2\u00a0105 | -185 | -138 | -771 | 11\u00a0035 | -4\u00a0246 | 3\u00a0589 |
Specialty Businesses 3 | 476 | -733 | -49 | 5 | 276 | -331 | -356 |
Bridon-Bekaert Ropes Group (BBRG) 4 | -10\u00a0344 | 34 | 36 | \u2014 | 11\u00a0493 | -7\u00a0617 | -6\u00a0399 |
Group 5 | -391 | 476 | 1\u00a0639 | 868 | 547 | -184 | 2\u00a0955 |
Intersegment | \u2014 | \u2014 | \u2014 | \u2014 | -46 | \u2014 | -46 |
Total restructuring programs | -14\u00a0114 | -52 | 1\u00a0464 | -69 | 23\u00a0304 | -12\u00a0379 | -1\u00a0845 |
Business disposals | |||||||
Group 6 | \u2014 | -170 | \u2014 | \u2014 | \u2014 | \u2014 | -170 |
Total business disposals | \u2014 | -170 | \u2014 | \u2014 | \u2014 | \u2014 | -170 |
Environmental provisions/(reversals of provisions) | |||||||
Bridon-Bekaert Ropes Group (BBRG) 4 | -2\u00a0360 | \u2014 | \u2014 | -28 | \u2014 | \u2014 | -2\u00a0388 |
Group | \u2014 | \u2014 | \u2014 | \u2014 | 148 | -37 | 111 |
Total environmental provisions/(reversals) | -2\u00a0360 | \u2014 | \u2014 | -28 | 148 | -37 | -2\u00a0277 |
Other events and transactions | |||||||
Steel Wire Solutions | \u2014 | \u2014 | -59 | \u2014 | \u2014 | \u2014 | -59 |
Specialty Businesses | -405 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -405 |
Group 7 | \u2014 | \u2014 | -35 | \u2014 | 3\u00a0359 | -100 | 3\u00a0224 |
Total other events and transactions | -405 | \u2014 | -93 | \u2014 | 3\u00a0359 | -100 | 2\u00a0761 |
Total | -16\u00a0878 | -222 | 1\u00a0370 | -97 | 26\u00a0812 | -12\u00a0517 | -1\u00a0531 |
\u00b9 Related mainly to the closure of the Figline plant (Italy) and retirement plans in Spain and Italy.
\u00b2 Related mainly to the restructuring revenues and expenses in North America and revenues in Malaysia.
\u00b3 Related mainly to the restructuring in Combustion Technologies and Sawing Wire.
\u2074 Related mainly to the restructuring in Canada.
5\u00a0Related mainly to the restructuring in Belgium.
6 Contractual liability indemnification related to previous divestments.
7 Related mainly to the liquidation of a company in China and Costa Rica.
One-off items 2022 | |||||||
in thousands of \u20ac | Cost of Sales | Selling expenses | Administrative | R&D | Other operating revenues | Other operating expenses | Total |
Restructuring programs by segment | |||||||
Rubber Reinforcement 1 | -4\u00a0489 | -208 | -644 | \u2014 | \u2014 | -2\u00a0413 | -7\u00a0753 |
Steel Wire Solutions 2 | -1\u00a0506 | 57 | -246 | \u2014 | 199 | -23 | -1\u00a0519 |
Specialty Businesses 3 | -267 | \u2014 | -165 | -85 | \u2014 | -195 | -712 |
Bridon-Bekaert Ropes Group (BBRG) 4 | -22\u00a0421 | -262 | -80 | -15 | 758 | -127 | -22\u00a0148 |
Group 5 | -673 | -458 | -1\u00a0415 | -77 | 558 | -3\u00a0174 | -5\u00a0239 |
Total restructuring programs | -29\u00a0356 | -870 | -2\u00a0551 | -176 | 1\u00a0515 | -5\u00a0932 | -37\u00a0371 |
Impairment losses/(reversals of impairment losses) other than restructuring | |||||||
Rubber Reinforcement 6 | -59\u00a0035 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -59\u00a0035 |
Specialty Businesses 6 | -324 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -324 |
Intersegment 6 | 4\u00a0735 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 4\u00a0735 |
Total other impairment losses/(reversals) | -54\u00a0624 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -54\u00a0624 |
Business disposals | |||||||
Group 7 | \u2014 | -210 | \u2014 | \u2014 | \u2014 | \u2014 | -210 |
Total business disposals | \u2014 | -210 | \u2014 | \u2014 | \u2014 | \u2014 | -210 |
Environmental provisions/(reversals of provisions) | |||||||
Rubber Reinforcement 1 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -1\u00a0100 | -1\u00a0100 |
Group | \u2014 | \u2014 | \u2014 | \u2014 | 100 | -125 | -25 |
Total environmental provisions/(reversals) | \u2014 | \u2014 | \u2014 | \u2014 | 100 | -1\u00a0225 | -1\u00a0125 |
Other events and transactions | |||||||
Specialty Businesses | \u2014 | \u2014 | \u2014 | \u2014 | 256 | \u2014 | 256 |
Bridon-Bekaert Ropes Group (BBRG) 8 | \u2014 | \u2014 | \u2014 | \u2014 | 474 | \u2014 | 474 |
Group | \u2014 | \u2014 | -507 | \u2014 | 298 | \u2014 | -209 |
Total other events and transactions | \u2014 | \u2014 | -508 | \u2014 | 1\u00a0028 | \u2014 | 521 |
Total | -83\u00a0981 | -1\u00a0080 | -3\u00a0059 | -176 | 2\u00a0643 | -7\u00a0157 | -92\u00a0810 |
\u00b9 Related mainly to the closure of the Figline plant (Italy) and the building remediation project in Rome, US; environmental provisions related to the closure of the Figline plant (Italy).
\u00b2 Related mainly to lay-off costs in Latin America.
\u00b3 Related mainly to lay-off costs in Bekaert Combustion Technology BV (Netherlands).
\u2074 Related mainly to the restructuring in Germany.
5 Related mainly to the restructuring in Belgium.
6 Related to the plant in Russia.
7 Contractual liability indemnification related to previous divestments.
The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature.
in thousands of \u20ac | 2021 | % on sales | 2022 | % on sales |
Sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Other operating revenues\u00b9 | 64\u00a0556 | \u2014 | 47\u00a0848 | \u2014 |
Total operating revenues | 4\u00a0904\u00a0215 | \u2014 | 5\u00a0699\u00a0637 | \u2014 |
Own construction of PP&E | 31\u00a0872 | 0.7% | 47\u00a0175 | 0.8% |
Raw materials | -1\u00a0995\u00a0508 | -41.2% | -2\u00a0362\u00a0439 | -41.8% |
Semi-finished products and goods for resale | -523\u00a0793 | -10.8% | -529\u00a0817 | -9.4% |
Change in work-in-progress and finished goods | 277\u00a0348 | 5.7% | 20\u00a0192 | 0.4% |
Staff costs | -840\u00a0348 | -17.4% | -869\u00a0955 | -15.4% |
Depreciation and amortization | -166\u00a0905 | -3.4% | -202\u00a0795 | -3.6% |
Impairment losses | 1\u00a0518 | 0.0% | -57\u00a0934 | -1.0% |
Transport and handling of finished goods | -249\u00a0476 | -5.2% | -303\u00a0486 | -5.4% |
Consumables and spare parts | -273\u00a0318 | -5.6% | -314\u00a0986 | -5.6% |
Utilities | -264\u00a0128 | -5.5% | -348\u00a0113 | -6.2% |
Maintenance and repairs | -66\u00a0054 | -1.4% | -77\u00a0908 | -1.4% |
Lease and related expenses | -9\u00a0451 | -0.2% | -38\u00a0129 | -0.7% |
Commissions in selling expenses | -8\u00a0008 | -0.2% | -8\u00a0739 | -0.2% |
Export VAT and export customs duty | -12\u00a0760 | -0.3% | -16\u00a0350 | -0.3% |
ICT costs\u00b9 | -44\u00a0148 | -0.9% | -59\u00a0960 | -1.1% |
Advertising and sales promotion | -6\u00a0444 | -0.1% | -7\u00a0655 | -0.1% |
Travel, restaurant & hotel | -8\u00a0605 | -0.2% | -15\u00a0810 | -0.3% |
Consulting and other fees | -40\u00a0314 | -0.8% | -42\u00a0284 | -0.7% |
Office supplies and equipment | -8\u00a0472 | -0.2% | -10\u00a0331 | -0.2% |
Venture capital funds R&D | -1\u00a0447 | 0.0% | -1\u00a0297 | 0.0% |
Temporary or external labor | -36\u00a0238 | -0.7% | -40\u00a0910 | -0.7% |
Insurance expenses | -15\u00a0427 | -0.3% | -17\u00a0689 | -0.3% |
Miscellaneous | -133\u00a0520 | -2.8% | -74\u00a0664 | -1.3% |
Total operating expenses\u00b9 | -4\u00a0393\u00a0626 | -90.8% | -5\u00a0333\u00a0884 | -94.4% |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 10.6% | 365\u00a0754 | 6.5% |
\u00b9 See note 2.8 'Restatement effects'
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
Other operating revenues | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties received | 15\u00a0209 | 18\u00a0673 | 3\u00a0464 |
Gains on disposal of PP&E and intangible assets | 8\u00a0458 | 12\u00a0340 | 3\u00a0883 |
Realized exchange results on sales and purchases | 1\u00a0237 | \u2014 | -1\u00a0237 |
Tax rebates | 429 | 26 | -403 |
Government grants | 1\u00a0039 | 2\u00a0631 | 1\u00a0592 |
Compensations received for claims | 2\u00a0855 | 2\u00a0345 | -510 |
Restructuring\u00b9 | 23\u00a0304 | 1\u00a0515 | -21\u00a0789 |
Environmental | 148 | 100 | -48 |
Other revenues\u00b2 | 11\u00a0876 | 10\u00a0217 | -1\u00a0659 |
Total | 64\u00a0556 | 47\u00a0848 | -16\u00a0709 |
\u00b9 Mainly relates to disposal of PP&E
2 See note 2.8. 'Restatement effects'
The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature.
in thousands of \u20ac | 2021 | % on sales | 2022 | % on sales |
Sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Other operating revenues\u00b9 | 64\u00a0556 | \u2014 | 47\u00a0848 | \u2014 |
Total operating revenues | 4\u00a0904\u00a0215 | \u2014 | 5\u00a0699\u00a0637 | \u2014 |
Own construction of PP&E | 31\u00a0872 | 0.7% | 47\u00a0175 | 0.8% |
Raw materials | -1\u00a0995\u00a0508 | -41.2% | -2\u00a0362\u00a0439 | -41.8% |
Semi-finished products and goods for resale | -523\u00a0793 | -10.8% | -529\u00a0817 | -9.4% |
Change in work-in-progress and finished goods | 277\u00a0348 | 5.7% | 20\u00a0192 | 0.4% |
Staff costs | -840\u00a0348 | -17.4% | -869\u00a0955 | -15.4% |
Depreciation and amortization | -166\u00a0905 | -3.4% | -202\u00a0795 | -3.6% |
Impairment losses | 1\u00a0518 | 0.0% | -57\u00a0934 | -1.0% |
Transport and handling of finished goods | -249\u00a0476 | -5.2% | -303\u00a0486 | -5.4% |
Consumables and spare parts | -273\u00a0318 | -5.6% | -314\u00a0986 | -5.6% |
Utilities | -264\u00a0128 | -5.5% | -348\u00a0113 | -6.2% |
Maintenance and repairs | -66\u00a0054 | -1.4% | -77\u00a0908 | -1.4% |
Lease and related expenses | -9\u00a0451 | -0.2% | -38\u00a0129 | -0.7% |
Commissions in selling expenses | -8\u00a0008 | -0.2% | -8\u00a0739 | -0.2% |
Export VAT and export customs duty | -12\u00a0760 | -0.3% | -16\u00a0350 | -0.3% |
ICT costs\u00b9 | -44\u00a0148 | -0.9% | -59\u00a0960 | -1.1% |
Advertising and sales promotion | -6\u00a0444 | -0.1% | -7\u00a0655 | -0.1% |
Travel, restaurant & hotel | -8\u00a0605 | -0.2% | -15\u00a0810 | -0.3% |
Consulting and other fees | -40\u00a0314 | -0.8% | -42\u00a0284 | -0.7% |
Office supplies and equipment | -8\u00a0472 | -0.2% | -10\u00a0331 | -0.2% |
Venture capital funds R&D | -1\u00a0447 | 0.0% | -1\u00a0297 | 0.0% |
Temporary or external labor | -36\u00a0238 | -0.7% | -40\u00a0910 | -0.7% |
Insurance expenses | -15\u00a0427 | -0.3% | -17\u00a0689 | -0.3% |
Miscellaneous | -133\u00a0520 | -2.8% | -74\u00a0664 | -1.3% |
Total operating expenses\u00b9 | -4\u00a0393\u00a0626 | -90.8% | -5\u00a0333\u00a0884 | -94.4% |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 10.6% | 365\u00a0754 | 6.5% |
\u00b9 See note 2.8 'Restatement effects'
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
Overheads | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Selling expenses | -186\u00a0239 | -205\u00a0938 | 10.6% |
Administrative expenses\u00b9 | -165\u00a0204 | -160\u00a0472 | -2.9% |
Research and development expenses | -59\u00a0537 | -62\u00a0315 | 4.7% |
Total | -410\u00a0980 | -428\u00a0725 | 4.3% |
\u00b9 See note 2.8 'Restatement effects'
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
in thousands of \u20ac | 2021 | 2022 |
Current income taxes - current year | -115\u00a0674 | -85\u00a0078 |
Current income taxes - prior periods | -332 | 5\u00a0485 |
Deferred taxes - due to changes in temporary differences \u00b9 | -39\u00a0571 | -50\u00a0422 |
Deferred taxes - due to changes in tax rates | -3\u00a0710 | -1\u00a0039 |
Deferred taxes - adjustments to tax losses of prior periods | -2\u00a0150 | 200 |
Deferred taxes - utilization of deferred tax assets not previously recognized \u00b9 | 27\u00a0723 | 49\u00a0756 |
Total tax expense | -133\u00a0714 | -81\u00a0097 |
\u00b9 See note 2.8 'Restatement effects'
Relationship between tax expense and accounting profit
In the table below, accounting profit is defined as the result before taxes.
in thousands of \u20ac | 2021 | 2022 |
Result before taxes 6 | 473\u00a0799 | 316\u00a0157 |
Tax expense at the theoretical domestic rates applicable to results of taxable entities in the countries concerned 6 | -117\u00a0150 | -82\u00a0735 |
Theoretical tax rate 1 | -24.7% | -26.2% |
Tax effect of: | ||
Non-deductible items | -12\u00a0893 | -5\u00a0773 |
Other tax rates, tax credits and special tax regimes 2 | 13\u00a0979 | 11\u00a0109 |
Non-recognition of deferred tax assets 3 | -16\u00a0803 | -39\u00a0242 |
Utilization or recognition of deferred tax assets not previously recognized 4 6 | 27\u00a0723 | 49\u00a0756 |
Deferred tax due to change in tax rates | -3\u00a0710 | -1\u00a0039 |
Tax relating to prior periods 5 | -2\u00a0482 | 5\u00a0685 |
Exempted income | 3\u00a0224 | 291 |
Withholding taxes on dividends, royalties, interests & services 6 | -21\u00a0371 | -16\u00a0709 |
Other | -4\u00a0231 | -2\u00a0440 |
Total tax expense | -133\u00a0714 | -81\u00a0097 |
Effective tax rate | -28.2% | -25.7% |
\u00b9 The theoretical tax rate is computed as a weighted average taking into account the results before taxes in different countries at different rates.
\u00b2 In 2022, the special tax regimes and tax credits mainly related to tax incentives in Belgium, similar as in 2021.
\u00b3 In 2022, the non-recognition of deferred tax assets mainly related to the impairment of Russian fixed assets, the German restructuring and losses carried forward in China and the USA, while in 2021, it mainly related to losses carried forward in Belgium, Canada, China, Spain and the USA.
\u2074 In 2022, the movement was mainly triggered by the recognition in Belgium of deferred tax assets previously not recognized as well as by the usage of losses carried forward.
5 In 2022, the prior year tax adjustments mainly related to the release of the uncertain tax provision in Indonesia further to the conclusion of an APA between the competent Authorities of Belgium and Indonesia (cf section 7.5. fourth bullet point of the 2021 Annual Report), while in 2021\u00a0 the prior year tax adjustments mainly related to tax filings.
Carrying amount | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
As at 1 January | 124\u00a0243 | 119\u00a0244 | 38\u00a0337 | 52\u00a0059 |
Increase or decrease via income statement \u00b9 | -3\u00a0088 | -618 | 14\u00a0620 | 886 |
Increase or decrease via OCI | -2\u00a0191 | 1\u00a0175 | 1\u00a0308 | 6\u00a0049 |
New consolidations | \u2014 | 66 | 1\u00a0184 | 478 |
Exchange gains and losses \u00b9 | 6\u00a0858 | 1\u00a0384 | 3\u00a0187 | 1\u00a0425 |
Change in set-off of assets and liabilities \u00b9 | -6\u00a0577 | -16\u00a0880 | -6\u00a0577 | -16\u00a0880 |
As at 31 December | 119\u00a0244 | 104\u00a0372 | 52\u00a0059 | 44\u00a0018 |
Deferred tax assets and liabilities were attributable to the following items:
Assets | Liabilities | Net assets | ||||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 |
Intangible assets | 17\u00a0390 | 27\u00a0602 | 12\u00a0390 | 12\u00a0242 | 5\u00a0000 | 15\u00a0361 |
Property, plant and equipment | 46\u00a0338 | 41\u00a0134 | 55\u00a0828 | 55\u00a0369 | -9\u00a0490 | -14\u00a0234 |
Financial assets \u00b9 | 90 | 102 | 32\u00a0029 | 31\u00a0778 | -31\u00a0940 | -31\u00a0676 |
Inventories | 10\u00a0581 | 11\u00a0925 | 8\u00a0168 | 14\u00a0756 | 2\u00a0413 | -2\u00a0831 |
Receivables | 4\u00a0156 | 4\u00a0282 | 128 | 719 | 4\u00a0027 | 3\u00a0563 |
Other current assets | 1\u00a0004 | 1\u00a0246 | 1\u00a0995 | 3\u00a0049 | -991 | -1\u00a0802 |
Employee benefit obligations \u00b9 | 20\u00a0418 | 20\u00a0175 | 212 | 280 | 20\u00a0206 | 19\u00a0894 |
Other provisions | 1\u00a0938 | 3\u00a0393 | 4 | 198 | 1\u00a0934 | 3\u00a0195 |
Other liabilities | 38\u00a0630 | 40\u00a0566 | 8\u00a0311 | 9\u00a0514 | 30\u00a0319 | 31\u00a0052 |
Tax deductible losses carried forward, tax credits and recoverable | 45\u00a0707 | 37\u00a0832 | \u2014 | \u2014 | 45\u00a0707 | 37\u00a0832 |
Tax assets / liabilities | 186\u00a0250 | 188\u00a0258 | 119\u00a0065 | 127\u00a0904 | 67\u00a0186 | 60\u00a0355 |
Set-off of assets and liabilities \u00b9 | -67\u00a0006 | -83\u00a0886 | -67\u00a0006 | -83\u00a0886 | \u2014 | \u2014 |
Net tax assets / liabilities | 119\u00a0244 | 104\u00a0372 | 52\u00a0059 | 44\u00a0018 | 67\u00a0186 | 60\u00a0355 |
\u00b9 See note 2.8 'Restatement effects'
The deferred taxes on property, plant and equipment mainly related to differences in depreciation method between IFRS and tax books, whereas the deferred taxes on intangible assets were mainly generated by intercompany gains which have been eliminated in the consolidated statements. The deferred taxes on employee benefit obligations were mainly generated by temporary differences arising from recognition of liabilities in accordance with IAS 19 \u2018Employee Benefits\u2019. The deferred tax liabilities on financial assets mainly related to temporary differences arising from undistributed profits from subsidiaries and joint ventures.
Movements in deferred tax assets and liabilities arose from the following:
2021 | ||||||
in thousands of \u20ac | As at 1 January | Recognized via income statement | Recognized via OCI | Acquisitions | Exchange | As at 31 December |
Temporary differences | ||||||
Intangible assets | 7\u00a0502 | -2\u00a0221 | \u2014 | \u2014 | -281 | 5\u00a0000 |
Property, plant and equipment | -8\u00a0271 | -1\u00a0224 | \u2014 | -1\u00a0184 | 1\u00a0189 | -9\u00a0490 |
Financial assets \u00b9 | -20\u00a0850 | -9\u00a0356 | -1\u00a0288 | \u2014 | -445 | -31\u00a0940 |
Inventories | 7\u00a0462 | -4\u00a0459 | \u2014 | \u2014 | -590 | 2\u00a0413 |
Receivables | 4\u00a0557 | -596 | \u2014 | \u2014 | 66 | 4\u00a0027 |
Other current assets | -1\u00a0767 | 722 | \u2014 | \u2014 | 55 | -991 |
Employee benefit obligations \u00b9 | 23\u00a0375 | -1\u00a0353 | -2\u00a0212 | \u2014 | 396 | 20\u00a0206 |
Other provisions | 3\u00a0300 | -1\u00a0415 | \u2014 | \u2014 | 48 | 1\u00a0934 |
Other liabilities | 19\u00a0668 | 9\u00a0455 | \u2014 | \u2014 | 1\u00a0195 | 30\u00a0319 |
Tax deductible losses carried forward, tax credits and recoverable income taxes | 50\u00a0930 | -7\u00a0261 | \u2014 | \u2014 | 2\u00a0038 | 45\u00a0707 |
Total | 85\u00a0906 | -17\u00a0708 | -3\u00a0500 | -1\u00a0184 | 3\u00a0671 | 67\u00a0186 |
\u00b9 See note 2.8 'Restatement effects'
2022 | ||||||
in thousands of \u20ac | As at 1 January | Recognized via income statement | Recognized via OCI | Acquisitions | Exchange | As at 31 December |
Temporary differences | ||||||
Intangible assets | 5\u00a0000 | 10\u00a0397 | \u2014 | -478 | 442 | 15\u00a0361 |
Property, plant and equipment | -9\u00a0490 | -3\u00a0661 | \u2014 | \u2014 | -1\u00a0084 | -14\u00a0234 |
Financial assets | -31\u00a0940 | 6\u00a0351 | -6\u00a0005 | \u2014 | -82 | -31\u00a0676 |
Inventories | 2\u00a0413 | -4\u00a0725 | \u2014 | \u2014 | -518 | -2\u00a0831 |
Receivables | 4\u00a0027 | -558 | \u2014 | \u2014 | 94 | 3\u00a0563 |
Other current assets | -991 | -921 | \u2014 | \u2014 | 110 | -1\u00a0802 |
Employee benefit obligations | 20\u00a0206 | -2\u00a0112 | 1\u00a0192 | \u2014 | 608 | 19\u00a0894 |
Other provisions | 1\u00a0934 | 1\u00a0324 | -61 | \u2014 | -2 | 3\u00a0195 |
Other liabilities | 30\u00a0319 | 634 | \u2014 | \u2014 | 99 | 31\u00a0052 |
Tax deductible losses carried forward, tax credits and recoverable income taxes | 45\u00a0707 | -8\u00a0234 | \u2014 | 66 | 292 | 37\u00a0832 |
Total | 67\u00a0186 | -1\u00a0505 | -4\u00a0874 | -412 | -40 | 60\u00a0355 |
2021 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences \u00b9 | 88\u00a0229 | \u2014 | 88\u00a0229 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | 5\u00a0882 | \u2014 | 5\u00a0882 |
Remeasurement gains and losses on defined-benefit plans | 47\u00a0351 | -3\u00a0500 | 43\u00a0851 |
Share of OCI of joint ventures and associates | 6 | -3 | 3 |
Total | 141\u00a0467 | -3\u00a0503 | 137\u00a0965 |
\u00b9 See note 2.8 'Restatement effects'
2022 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences | 48\u00a0888 | \u2014 | 48\u00a0888 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | -2\u00a0367 | \u2014 | -2\u00a0367 |
Remeasurement gains and losses on defined-benefit plans | 3\u00a0393 | -4\u00a0874 | -1\u00a0481 |
Share of OCI of joint ventures and associates | 40 | -13 | 27 |
Total | 49\u00a0954 | -4\u00a0887 | 45\u00a0067 |
The following table presents the gross amounts of the tax losses and tax credits generating deferred tax assets of which some were unrecognized.
2021 | ||||||
in thousands of \u20ac | Expiring within 1 year | Expiring between 1 and 5 years | Expiring after more than 5 years | Not expiring | Total | |
Capital losses | Gross value | \u2014 | \u2014 | 777 | 40\u00a0009 | 40\u00a0786 |
Allowance | \u2014 | \u2014 | -752 | -39\u00a0758 | -40\u00a0510 | |
Net balance | \u2014 | \u2014 | 25 | 251 | 276 | |
Trade losses | Gross value | 38\u00a0285 | 61\u00a0381 | 153\u00a0867 | 674\u00a0409 | 927\u00a0943 |
Allowance | -36\u00a0320 | -47\u00a0215 | -133\u00a0825 | -551\u00a0123 | -768\u00a0482 | |
Net balance | 1\u00a0966 | 14\u00a0166 | 20\u00a0042 | 123\u00a0287 | 159\u00a0461 | |
Tax credits | Gross value | 34 | \u2014 | 306 | 20\u00a0554 | 20\u00a0894 |
Allowance | \u2014 | \u2014 | -306 | -3\u00a0164 | -3\u00a0470 | |
Net balance | 34 | \u2014 | \u2014 | 17\u00a0389 | 17\u00a0423 | |
Total | Gross value | 38\u00a0319 | 61\u00a0381 | 154\u00a0950 | 734\u00a0972 | 989\u00a0622 |
Allowance | -36\u00a0320 | -47\u00a0215 | -134\u00a0882 | -594\u00a0045 | -812\u00a0462 | |
Net balance | 2\u00a0000 | 14\u00a0166 | 20\u00a0068 | 140\u00a0927 | 177\u00a0160 |
2022 | ||||||
in thousands of \u20ac | Expiring within 1 year | Expiring between 1 and 5 years | Expiring after more than 5 years | Not expiring | Total | |
Capital losses | Gross value | \u2014 | \u2014 | 17\u00a0401 | 24\u00a0175 | 41\u00a0576 |
Allowance | \u2014 | \u2014 | -17\u00a0401 | -24\u00a0175 | -41\u00a0576 | |
Net balance | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Trade losses | Gross value | 37\u00a0027 | 61\u00a0189 | 181\u00a0512 | 591\u00a0736 | 871\u00a0464 |
Allowance | -36\u00a0670 | -47\u00a0760 | -135\u00a0417 | -510\u00a0784 | -730\u00a0631 | |
Net balance | 357 | 13\u00a0429 | 46\u00a0094 | 80\u00a0952 | 140\u00a0833 | |
Tax credits | Gross value | \u2014 | \u2014 | 325 | 12\u00a0523 | 12\u00a0848 |
Allowance | \u2014 | \u2014 | -325 | -3\u00a0178 | -3\u00a0503 | |
Net balance | \u2014 | \u2014 | \u2014 | 9\u00a0346 | 9\u00a0346 | |
Total | Gross value | 37\u00a0027 | 61\u00a0189 | 199\u00a0237 | 628\u00a0435 | 925\u00a0888 |
Allowance | -36\u00a0670 | -47\u00a0760 | -153\u00a0143 | -538\u00a0137 | -775\u00a0709 | |
Net balance | 357 | 13\u00a0429 | 46\u00a0094 | 90\u00a0298 | 150\u00a0179 |
The net deferred tax assets corresponding to these base amounts were \u20ac\u00a037.8\u00a0million in 2021 (2021: \u20ac 45.7 million).
Deferred tax assets were recognized only to the extent that it was probable that future taxable profits would be available, taking into account all evidence, both positive and negative. This assessment was done using prudent estimates based on the business plan for the entity concerned, typically using a five year time horizon.
The table below provides an overview of the tax receivables, tax payables and uncertain tax positions recognized at balance sheet closing date. The tax receivables and payables include both current income taxes, VAT and other taxes.
in thousands of \u20ac | 2021 | 2022 |
Tax receivables | 113\u00a0568 | 126\u00a0694 |
Certain tax liabilities | 71\u00a0376 | 59\u00a0292 |
Uncertain tax positions | 38\u00a0882 | 43\u00a0828 |
Consolidated income statement | 2021 as published | 2021 restatement | 2021 as restated |
Administrative expenses (b) | -161\u00a0090 | -4\u00a0113 | -165\u00a0203 |
Other operating revenues (a) | 62\u00a0940 | 1\u00a0617 | 64\u00a0556 |
Operating result (EBIT) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
EBIT - Underlying (a+b) | 514\u00a0617 | -2\u00a0497 | 512\u00a0121 |
Result before taxes | 476\u00a0296 | -2\u00a0497 | 473\u00a0799 |
Income taxes (a+b) | -133\u00a0296 | -418 | -133\u00a0714 |
Result after taxes (consolidated companies) | 343\u00a0000 | -2\u00a0915 | 340\u00a0085 |
RESULT FOR THE PERIOD | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Attributable to | |||
the Group | 406\u00a0977 | -2\u00a0915 | 404\u00a0062 |
non-controlling interests | 43\u00a0643 | \u2014 | 43\u00a0643 |
Earnings per share | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period attributable to the Group | |||
Basic | 7.14 | -0.05 | 7.09 |
Diluted | 7.06 | -0.05 | 7.01 |
2021 as reported | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 245\u00a0783 | 212\u00a0860 | 71\u00a0112 | 36\u00a0263 | -54\u00a0572 | 1\u00a0640 | 513\u00a0086 |
EBIT - Underlying | 247\u00a0371 | 209\u00a0330 | 71\u00a0872 | 45\u00a0050 | -60\u00a0692 | 1\u00a0686 | 514\u00a0617 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 342\u00a0342 | 249\u00a0813 | 79\u00a0668 | 64\u00a0340 | -50\u00a0394 | -8\u00a0426 | 677\u00a0342 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -35\u00a0946 | -146\u00a0702 | 3\u00a0531\u00a0190 |
Unallocated assets | 1\u00a0312\u00a0566 | ||||||
Total assets | 4\u00a0843\u00a0756 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0487\u00a0606 | ||||||
Total liabilities | 2\u00a0743\u00a0234 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -155\u00a0590 | -72\u00a0319 | 2\u00a0275\u00a0562 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -123\u00a0646 | -74\u00a0465 | 2\u00a0169\u00a0030 |
Return on weighted average capital employed (ROCE) | 21.4% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.7% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 10\u00a0809 | -360 | 12\u00a0852 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2021 redefined \u00b3 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales \u2074 | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 247\u00a0175 | 213\u00a0012 | 71\u00a0112 | 36\u00a0336 | -58\u00a0685 | 1\u00a0640 | 510\u00a0589 |
EBIT - Underlying | 248\u00a0764 | 209\u00a0481 | 71\u00a0872 | 45\u00a0122 | -64\u00a0805 | 1\u00a0686 | 512\u00a0121 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 343\u00a0734 | 249\u00a0965 | 79\u00a0668 | 64\u00a0413 | -54\u00a0508 | -8\u00a0426 | 674\u00a0845 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -40\u00a0059 | -146\u00a0702 | 3\u00a0527\u00a0077 |
Unallocated assets | 1\u00a0312\u00a0212 | ||||||
Total assets | 4\u00a0839\u00a0288 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0485\u00a0997 | ||||||
Total liabilities | 2\u00a0741\u00a0625 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -159\u00a0703 | -72\u00a0319 | 2\u00a0271\u00a0449 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -125\u00a0703 | -74\u00a0465 | 2\u00a0166\u00a0973 |
Return on weighted average capital employed (ROCE) | 21.5% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.6% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 6\u00a0695 | -360 | 8\u00a0739 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2022 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0197\u00a0607 | 2\u00a0081\u00a0592 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | \u2014 | 5\u00a0651\u00a0790 |
Consolidated sales | 2\u00a0228\u00a0682 | 2\u00a0137\u00a0571 | 788\u00a0242 | 588\u00a0819 | 118\u00a0857 | -210\u00a0380 | 5\u00a0651\u00a0790 |
Operating result (EBIT) | 110\u00a0776 | 146\u00a0563 | 130\u00a0986 | 38\u00a0744 | -67\u00a0234 | 5\u00a0918 | 365\u00a0754 |
EBIT - Underlying | 178\u00a0665 | 148\u00a0083 | 131\u00a0766 | 60\u00a0418 | -61\u00a0552 | 1\u00a0183 | 458\u00a0563 |
Depreciation and amortization \u00b2 | 91\u00a0038 | 48\u00a0666 | 22\u00a0171 | 42\u00a0745 | 7\u00a0881 | -9\u00a0706 | 202\u00a0795 |
Impairment losses | 59\u00a0050 | 830 | 120 | 2\u00a0669 | \u2014 | -4\u00a0735 | 57\u00a0934 |
EBITDA | 260\u00a0865 | 196\u00a0059 | 153\u00a0277 | 84\u00a0158 | -59\u00a0353 | -8\u00a0522 | 626\u00a0483 |
Segment assets | 1\u00a0495\u00a0373 | 1\u00a0114\u00a0525 | 470\u00a0005 | 628\u00a0577 | -54\u00a0894 | -141\u00a0886 | 3\u00a0511\u00a0700 |
Unallocated assets | 1\u00a0317\u00a0613 | ||||||
Total assets | 4\u00a0829\u00a0313 | ||||||
Segment liabilities | 376\u00a0208 | 387\u00a0217 | 142\u00a0568 | 137\u00a0694 | 109\u00a0613 | -74\u00a0980 | 1\u00a0078\u00a0320 |
Unallocated liabilities | 1\u00a0521\u00a0437 | ||||||
Total liabilities | 2\u00a0599\u00a0757 | ||||||
Capital employed | 1\u00a0119\u00a0165 | 727\u00a0308 | 327\u00a0437 | 490\u00a0883 | -164\u00a0508 | -66\u00a0906 | 2\u00a0433\u00a0380 |
Weighted average capital employed | 1\u00a0146\u00a0926 | 675\u00a0960 | 295\u00a0100 | 467\u00a0986 | -161\u00a0860 | -69\u00a0776 | 2\u00a0354\u00a0337 |
Return on weighted average capital employed (ROCE) | 9.7% | 21.7% | 44.4% | 8.3% | \u2014 | \u2014 | 15.5% |
Capital expenditure \u2013 PP&E | 74\u00a0823 | 45\u00a0714 | 23\u00a0648 | 33\u00a0740 | 3\u00a0171 | -10\u00a0493 | 170\u00a0603 |
Capital expenditure \u2013 intangible assets | 397 | 128 | 459 | 4 | 14\u00a0260 | -311 | 14\u00a0937 |
Share in the results of joint ventures and associates | -217 | 54\u00a0481 | \u2014 | \u2014 | -7 | \u2014 | 54\u00a0257 |
Investments in joint ventures and associates | 54\u00a0880 | 167\u00a0749 | \u2014 | \u2014 | -744 | \u2014 | 221\u00a0886 |
Number of employees (year-end) \u00b9 | 11\u00a0491 | 6\u00a0310 | 2\u00a0133 | 2\u00a0421 | 1\u00a0196 | \u2014 | 23\u00a0551 |
\u00b9 Number of employees: full-time equivalents.
\u00b2 Depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables.
\u00b3 See note 2.8. 'Restatement effects'.
Overheads | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Selling expenses | -186\u00a0239 | -205\u00a0938 | 10.6% |
Administrative expenses\u00b9 | -165\u00a0204 | -160\u00a0472 | -2.9% |
Research and development expenses | -59\u00a0537 | -62\u00a0315 | 4.7% |
Total | -410\u00a0980 | -428\u00a0725 | 4.3% |
\u00b9 See note 2.8 'Restatement effects'
Other operating expenses | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties paid | -1\u00a0012 | -951 | 62 |
Losses on disposal of PP&E and intangible assets | -1\u00a0375 | -760 | 615 |
Amortization of intangible assets | -1\u00a0512 | -1\u00a0500 | 12 |
Bank charges | -2\u00a0776 | -3\u00a0660 | -884 |
Tax related expenses (other than income taxes) | -2\u00a0639 | -3\u00a0841 | -1\u00a0202 |
Impairment losses | -278 | -857 | -579 |
Restructuring | -12\u00a0379 | -5\u00a0932 | 6\u00a0447 |
Environmental | -37 | -1\u00a0225 | -1\u00a0187 |
Losses on business disposals | -170 | -210 | -40 |
Other expenses | -6\u00a0716 | -6\u00a0912 | -196 |
Total | -28\u00a0894 | -25\u00a0848 | 3\u00a0046 |
in thousands of \u20ac | 2021 | 2022 |
Interest income on financial assets not measured at FVTPL | 3\u00a0260 | 5\u00a0166 |
Interest income | 3\u00a0260 | 5\u00a0166 |
Interest expense on interest-bearing debt not measured at FVTPL | -39\u00a0159 | -38\u00a0624 |
Other debt-related interest expense | -3\u00a0496 | -3\u00a0391 |
Debt-related interest expense | -42\u00a0655 | -42\u00a0014 |
Interest element of discounted provisions | -1\u00a0825 | -1\u00a0423 |
Interest expense | -44\u00a0480 | -43\u00a0437 |
Total | -41\u00a0220 | -38\u00a0271 |
The interest expenses remain at the same level compared to the interest expenses of 2021. As of 2022, there are no interest expenses related the convertible bonds due to repayment of the convertible bond in 2021. The impact of the increase of interest rates is for this reason compensated.\u00a0 \u00a0
Interest expense on interest-bearing debt, not classified as at fair value through profit or loss (FVTPL), relates to all debt instruments of the Group, other than interest-rate risk mitigating derivatives entered into as economic hedges.
in thousands of \u20ac | 2021 | 2022 |
Value adjustments to derivatives | 4\u00a0987 | 6\u00a0543 |
Exchange results on hedged items | 1\u00a0570 | -14\u00a0008 |
Net impact of derivatives and hedged items | 6\u00a0557 | -7\u00a0464 |
Other exchange results | -4\u00a0315 | -735 |
Gains and losses on disposal of financial assets | 19 | 19 |
Dividends from non-consolidated equity investments | 5\u00a0088 | 2\u00a0666 |
Bank charges and taxes on financial transactions | -4\u00a0074 | -8\u00a0566 |
Impairments of other receivables | -39 | 1\u00a0261 |
Other | 1\u00a0194 | 1\u00a0494 |
Total | 4\u00a0430 | -11\u00a0325 |
Value adjustments include changes in the fair value of all derivatives, other than those designated as cash flow hedges. Exchange results on hedged items also relate to economic hedges only. The net impact of derivatives and hedged items presented here does not include any impacts recognized in other income statement elements, such as interest expense, cost of sales or other operating revenues and expenses. In 2022 value adjustments to derivatives included a fair value gain of \u20ac 13.1 million gain (\u20ac -4.4 million in 2021), however offset with a loss of \u20ac\u00a0-6.6\u00a0million (2021: gain of \u20ac 9.4 million), related to a Virtual Power Purchase Agreement (VPPA). For more details on the impact of derivatives and hedged items, see note 7.2.\u00a0Financial risk management and financial derivatives\u2019.
Other exchange results in 2022 amounted to \u20ac -0.7 million and were mainly related to the devaluation of the Turkish lira, largely offset with the positive exchange results on the Ruble, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on financial transactions included charges linked to the factoring programs (\u20ac 7.0 million) and higher taxes paid on financial transactions (\u20ac\u00a01.0\u00a0million).
In 2022, other elements related mainly to a gain of \u20ac\u00a02.7\u00a0million (\u20ac\u00a01.2\u00a0million in 2021) from the net settlements out of the VPPA. The gain is partially offset by other financial costs.
Consolidated statement of comprehensive income | 2021 as published | 2021 restatement | 2021 as restated |
Result for the period | 450\u00a0620 | -2\u00a0915 | 447\u00a0705 |
Other comprehensive income (OCI) | |||
Other comprehensive income reclassifable to income statement | |||
Exchange differences arising during the year\u00a0 (a) | 91\u00a0161 | 56 | 91\u00a0217 |
OCI reclassifiable to income statement in subsequent periods, after tax | 88\u00a0173 | 56 | 88\u00a0229 |
Other comprehensive income for the period | 137\u00a0909 | 56 | 137\u00a0965 |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 588\u00a0529 | -2\u00a0859 | 585\u00a0670 |
Attributable to | |||
the Group | 545\u00a0660 | -2\u00a0859 | 542\u00a0801 |
non-controlling interests | 42\u00a0869 | \u2014 | 42\u00a0869 |
2021 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences \u00b9 | 88\u00a0229 | \u2014 | 88\u00a0229 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | 5\u00a0882 | \u2014 | 5\u00a0882 |
Remeasurement gains and losses on defined-benefit plans | 47\u00a0351 | -3\u00a0500 | 43\u00a0851 |
Share of OCI of joint ventures and associates | 6 | -3 | 3 |
Total | 141\u00a0467 | -3\u00a0503 | 137\u00a0965 |
\u00b9 See note 2.8 'Restatement effects'
2022 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences | 48\u00a0888 | \u2014 | 48\u00a0888 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | -2\u00a0367 | \u2014 | -2\u00a0367 |
Remeasurement gains and losses on defined-benefit plans | 3\u00a0393 | -4\u00a0874 | -1\u00a0481 |
Share of OCI of joint ventures and associates | 40 | -13 | 27 |
Total | 49\u00a0954 | -4\u00a0887 | 45\u00a0067 |
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Consolidated statement of changes in equity | 2021 as published | 2021 restatement | 2021 as restated |
Opening statement | |||
Total comprehensive income for the period | 588\u00a0529 | -2\u00a0859 | 585\u00a0670 |
Closing balance | 2\u00a0100\u00a0522 | -2\u00a0859 | 2\u00a0097\u00a0663 |
Issued capital | 2021 | 2022 | |||
in thousands of \u20ac | Nominal value | Number of shares | Nominal value | Number of shares | |
1 | As at 1 January | 177\u00a0812 | 60\u00a0414\u00a0841 | 177\u00a0922 | 60\u00a0452\u00a0261 |
Movements in the year | |||||
Issue of new shares | 110 | 37\u00a0420 | 80 | 26\u00a0400 | |
Cancellation of shares | -4\u00a0266 | -1\u00a0449\u00a0409 | |||
As at 31 December | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2 | Structure | ||||
2.1 | Classes of ordinary shares | ||||
Ordinary shares without par value | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2.2 | Registered shares | 22\u00a0841\u00a0937 | 22\u00a0870\u00a0686 | ||
Dematerialized shares | 37\u00a0610\u00a0324 | 36\u00a0158\u00a0566 | |||
Authorized capital not issued | 176\u00a0000 | 176\u00a0000 |
Overview of SOP 2005-2009 Stock Option Plan | |||||||||
Date offered | Date granted | Date of issue of | Exercise price (in \u20ac) | Number of subscription rights | First exercise period | Last exercise | |||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2007 | 18.02.2008 | 22.04.2008 | 28.335 | 215\u00a0100 | 202\u00a0400 | 12\u00a0700 | \u2014 | 22.05 - 30.06.2011 | 15.11 - 15.12.2022 |
785\u00a0058 | 615\u00a0893 | 169\u00a0165 | \u2014 |
Overview of SOP 2010-2014 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2012 | 18.02.2013 | 19.200 | 267\u00a0200 | 264\u00a0500 | 2\u00a0700 | \u2014 | End Feb. - 10.04.2016 | Mid Nov. - 19.12.2022 | |
29.03.2013 | 28.05.2013 | 21.450 | 260\u00a0000 | 235\u00a0000 | \u2014 | 25\u00a0000 | End Feb. - 09.04.2017 | End Feb. - 28.03.2023 | |
19.12.2013 | 17.02.2014 | 25.380 | 373\u00a0450 | 325\u00a0150 | 2\u00a0400 | 45\u00a0900 | End Feb. - 09.04.2017 | Mid Nov. - 18.12.2023 | |
18.12.2014 | 16.02.2015 | 26.055 | 349\u00a0810 | 210\u00a0400 | 18\u00a0510 | 120\u00a0900 | End Feb. - 08.04.2018 | Mid Nov. - 17.12.2024 | |
1\u00a0250\u00a0460 | 1\u00a0035\u00a0050 | 23\u00a0610 | 191\u00a0800 |
Overview of SOP 2015-2017 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
17.12.2015 | 15.02.2016 | 26.375 | 227\u00a0250 | 122\u00a0000 | 28\u00a0250 | 77\u00a0000 | End Feb. - 07.04.2019 | Mid Nov. - 16.12.2025 | |
15.12.2016 | 13.02.2017 | 39.426 | 273\u00a0325 | 144 | 47\u00a0125 | 226\u00a0056 | End Feb. - 12.04.2020 | Mid Nov. - 14.12.2026 | |
21.12.2017 | 20.02.2018 | 34.600 | 225\u00a0475 | 72\u00a0500 | 8\u00a0375 | 144\u00a0600 | End Feb. - 11.04.2021 | Mid Nov. - 20.12.2027 | |
726\u00a0050 | 194\u00a0644 | 83\u00a0750 | 447\u00a0656 |
2021 | 2022 | |||
SOP 2005-2009 Stock Option Plan | Number of subscription rights | Weighted average exercise price (in \u20ac) | Number of subscription rights | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 63\u00a0820 | 28.594 | 26\u00a0400 | 28.335 |
Exercised during the year | -37\u00a0420 | 28.776 | -26\u00a0400 | 28.335 |
Outstanding as at 31 December | 26\u00a0400 | 28.335 | \u2014 | 28.335 |
2021 | 2022 | |||
SOP 2010-2014 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 700\u00a0058 | 24.488 | 300\u00a0600 | 24.300 |
Exercised during the year | -399\u00a0458 | 24.630 | -108\u00a0800 | 22.548 |
Outstanding as at 31 December | 300\u00a0600 | 24.300 | 191\u00a0800 | 24.300 |
2021 | 2022 | |||
SOP 2015-2017 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 640\u00a0800 | 33.769 | 469\u00a0156 | 35.198 |
Exercised during the year | -171\u00a0644 | 29.860 | -21\u00a0500 | 26.375 |
Outstanding as at 31 December | 469\u00a0156 | 35.198 | 447\u00a0656 | 35.198 |
Weighted average remaining contractual life | ||
in years | 2021 | 2022 |
SOP 2005-2009 | 1.0 | \u2014 |
SOP 2010-2014 | 2.2 | 1.5 |
SOP 2015-2017 | 5.1 | 4.1 |
The weighted average share price at the date of exercise in 2022 was \u20ac 22.55 for the SOP 2010-2014 options (2021: \u20ac 24.63), \u20ac 26.38 for the SOP 2015-2017 options (2021: \u20ac 29.86) and \u20ac 28.34 for the SOP 2005-2009 subscription rights (2021: \u20ac 28.78). The exercise price of the subscription rights and options is equal to the lower of (i) the average closing price of the Company\u2019s share during the thirty days preceding the date of the offer, and (ii)\u00a0the last closing price preceding the date of the offer. When subscription rights are exercised under the SOP 2005-2009 plan, equity is increased by the amount of the proceeds received. Under the terms of the SOP2 plan any subscription rights or options granted through 2004 were vested immediately.
Under the terms of the SOP 2010-2014 stock option plan, options to acquire existing Company shares have been offered to the members of the Bekaert Group Executive, the Senior Vice Presidents and senior executive personnel during the period 2010-2014. The grant dates of each offering were scheduled in the period 2011-2015. The exercise price of the SOP 2010-2014 options was determined in the same manner as in the previous plans. The vesting conditions of the SOP 2010-2014 grants, as well as of the SOP 2005-2009 grants and of the SOP2 grants beginning in 2006, are such that the subscription rights or options will be fully vested on 1 January of the fourth year after the date of the offer. In accordance with the Economic Recovery Act of 27 March 2009, the exercise period of the SOP2 options and SOP 2005-2009 subscription rights granted in 2006, 2007 and 2008 was extended by five years in favor of the persons who were plan beneficiaries and subject to Belgian income tax at the time such extension was offered.
The options granted under SOP2, SOP 2010-2014 and SOP 2015-2017 and the subscription rights granted under SOP 2005- 2009 are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the options is determined using a binomial pricing model.
The members of the Bekaert Group Executive, the senior management and a limited number of management staff members of the Company and a number of its subsidiaries received Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and in 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy. The vesting percentage can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the vesting percentage is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Performance Share Plan | Number of units | ||||
Date granted | Granted | Delivered | Forfeited | Outstanding | Expiry date |
15.02.2019 | 178\u00a0233 | 136\u00a0023 | 42\u00a0210 | \u2014 | 31.12.2021 |
26.07.2019 | 35\u00a0663 | 31\u00a0778 | 3\u00a0885 | \u2014 | 31.12.2021 |
21.01.2020 | 182\u00a0900 | \u2014 | 64\u00a0584 | 118\u00a0316 | 31.12.2022 |
17.08.2020 | 12\u00a0580 | \u2014 | 713 | 11\u00a0867 | 31.12.2022 |
15.01.2021 | 144\u00a0708 | \u2014 | 34\u00a0057 | 110\u00a0651 | 31.12.2023 |
19.08.2021 | 15\u00a0101 | \u2014 | 732 | 14\u00a0369 | 31.12.2023 |
09.09.2021 | 7\u00a0966 | \u2014 | \u2014 | 7\u00a0966 | 31.12.2023 |
04.03.2022 | 131\u00a0407 | \u2014 | 21\u00a0030 | 110\u00a0377 | 31.12.2024 |
25.08.2022 | 3\u00a0209 | \u2014 | \u2014 | 3\u00a0209 | 31.12.2024 |
26.09.2022 | 12\u00a0864 | \u2014 | \u2014 | 12\u00a0864 | 31.12.2024 |
724\u00a0631 | 167\u00a0801 | 167\u00a0211 | 389\u00a0619 |
The Performance Share Units granted under these plans are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value is determined as the share price at the transaction date.
In 2022, on 4 March an offer of 131\u00a0407 equity settled performance share units, on 25 August an offer of 3\u00a0209 equity settled performance share units and on 26 September an offer of 12\u00a0864 equity settled performance share units were made under the terms of the PSP 2022-2024 (2021: on 15 January an offer of 144\u00a0708 equity settled performance share units, on 19 August an offer of 15\u00a0101 and on 9 September an offer of 7\u00a0966 under the terms of the PSP 2018-2020). The fair value of the Performance Share Units under the terms of the PSP plan is equal to the share price at grant date (4\u00a0March 2022: \u20ac 33.80, 25 August 2022: \u20ac 31.02 and 26 September 2022: \u20ac 25.98 (15\u00a0January 2021: \u20ac 29.14, 19 August 2021: \u20ac 39.74 and 9 September 2021: \u20ac 38.44)), since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow). The grant in 2022 represented a fair value of \u20ac 4.9 million (2021: \u20ac 5.1 million). The Group has recorded an expense against equity of \u20ac 9.2 million in 2022 (2021: \u20ac 14.8 million).
2021 | 2022 | |||
PSP | Number of units | Weighted average exercise price (in \u20ac) | Number of units | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 390\u00a0631 | 24.185 | 473\u00a0006 | 26.251 |
Granted during the year | 167\u00a0775 | 30.536 | 147\u00a0480 | 33.057 |
Delivered during the year | 0 | \u2014 | -167\u00a0801 | 23.794 |
Forfeited during the year | -85\u00a0400 | 25.217 | -63\u00a0065 | 29.456 |
Outstanding as at 31 December | 473\u00a0006 | 26.251 | 389\u00a0620 | 29.360 |
In March 2016, the Company introduced a Personal Shareholding Requirement Plan for the Chief Executive Officer and the other members of the Bekaert Group Executive (\u2018BGE\u2019), pursuant to which they can build and maintain a personal shareholding in Company shares and whereby the acquisition of the number of Company shares is supported by a so-called Company matching mechanism. The Company matching mechanism provides that the Company will match the BGE member\u2019s investment in Company shares in year x, with a direct grant of a similar number of Company shares as acquired by the BGE member (such grant to be made at the end of year x + 2). These PSR units will vest following a vesting period of three years, conditional to a service condition subject to bad or good leaver conditions. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Personal Shareholding Requirement Plan
Date acquired | Number of units | ||||
Acquired | Matched | Forfeited | Outstanding | Expiry date | |
31.03.2020 | 10\u00a0766 | 3\u00a0489 | 7\u00a0277 | \u2014 | 31.12.2022 |
31.03.2021 | 9\u00a0112 | \u2014 | 3\u00a0930 | 5\u00a0182 | 31.12.2023 |
31.03.2022 | 13\u00a0757 | \u2014 | 1\u00a0597 | 12\u00a0160 | 31.12.2024 |
33\u00a0635 | 3\u00a0489 | 12\u00a0804 | 17\u00a0342 |
The matching shares to be granted under the Personal Shareholding Requirement Plan 2016 are recognized at fair value at start date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the matching shares is determined using a binomial pricing model. Inputs and outcome of this pricing model are detailed below:
To be matched in | To be matched in | To be matched in | |
Pricing model details - Personal Shareholding Requirement plan | Start date March 2020 | Start date March 2021 | Start date March 2022 |
Inputs to the model | |||
Share price at start date (in \u20ac) | 14.98 | 35.68 | 35.48 |
Expected volatility | 36% | 36% | 37.37% |
Expected dividend yield | 3% | 3% | 4.89% |
Vesting period (years) | 2.75 | 2.75 | 2.75 |
Employee exit rate | 0% | 0% | 0% |
Risk-free interest rate | -0.47% | -0.47% | 1.27% |
Outcome of the model | |||
Fair value (in \u20ac) | 13.81 | 32.99 | 6.48 |
Outstanding PSR Units | \u2014 | 5\u00a0182 | 12\u00a0160 |
The matching shares to be granted represented a fair value of \u20ac\u00a00.1\u00a0million (2021: \u20ac 0.4 million). The Group has recorded an expense against equity of \u20ac\u00a00.2\u00a0million (2021:\u00a0\u20ac\u00a00.1\u00a0million) for the matching shares to be granted, based on their fair value and vesting period.
Number of units - PSR | 2021 | 2022 |
Outstanding as at 1 January | 10\u00a0766 | 18\u00a0878 |
Matched during the year | \u2014 | -3\u00a0489 |
Forfeited during the year | -1\u00a0000 | -11\u00a0804 |
Acquired during the year | 9\u00a0112 | 13\u00a0757 |
Outstanding as at 31 December | 18\u00a0878 | 17\u00a0342 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Revaluation reserve for non-consolidated equity investments | -5\u00a0986 | -8\u00a0353 |
Remeasurement reserve for defined-benefit plans | -16\u00a0790 | -12\u00a0660 |
Deferred tax reserve | 23\u00a0464 | 18\u00a0381 |
Other reserves | 688 | -2\u00a0631 |
Cumulative translation adjustments\u00b9 | -137\u00a0127 | -93\u00a0820 |
Total other Group reserves\u00b9 | -136\u00a0440 | -96\u00a0451 |
Treasury shares | -95\u00a0517 | -139\u00a0314 |
Retained earnings\u00b9 | 1\u00a0981\u00a0876 | 2\u00a0115\u00a0216 |
\u00b9 See note 2.8 'Restatement effects'
In the following sections of this disclosure, the movements in the Group reserves and in retained earnings are presented and commented.
Revaluation reserve for non-consolidated equity investments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -11\u00a0867 | -5\u00a0986 |
Fair value changes | 5\u00a0882 | -2\u00a0367 |
As at 31 December | -5\u00a0986 | -8\u00a0353 |
Of which | ||
Investment in Shougang Concord Century Holdings Ltd | -6\u00a0078 | -9\u00a0228 |
Other investments | 92 | 876 |
The revaluation of the investment in Shougang Concord Century Holdings Ltd is based on the closing price of the share on the Hong Kong Stock Exchange. See also note 6.6. \u2018Other non-current assets\u2019.
Remeasurement reserve for defined-benefit plans | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -63\u00a0543 | -16\u00a0790 |
Remeasurements of the period | 46\u00a0753 | 4\u00a0024 |
Equity reclassification | \u2014 | 107 |
As at 31 December | -16\u00a0790 | -12\u00a0660 |
The remeasurements originate from using different actuarial assumptions in calculating the defined-benefit obligation, from differences with actual returns on plan assets at the balance sheet date and any changes in unrecognized assets due to the asset ceiling principle (see note 6.16. \u2018Employee benefit obligations\u2019).
Deferred tax reserve | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 26\u00a0785 | 23\u00a0464 |
Deferred taxes relating to other comprehensive income | -3\u00a0321 | -5\u00a0083 |
As at 31 December | 23\u00a0464 | 18\u00a0381 |
Deferred taxes relating to other comprehensive income are also recognized in OCI (see note 6.7. \u2018Deferred tax assets and liabilities\u2019).
Cumulative translation adjustments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -227\u00a0823 | -137\u00a0127 |
Exchange differences on dividends declared | -2\u00a0463 | 13\u00a0250 |
Recycled to income statement - relating to disposed entities or step acquisitions | 1\u00a0270 | \u2014 |
Movements arising from exchange rate fluctuations\u00b2 | 91\u00a0888 | 30\u00a0057 |
As at 31 December | -137\u00a0127 | -93\u00a0820 |
Of which relating to entities with following functional currencies | ||
Chinese renminbi | 145\u00a0149 | 133\u00a0695 |
US dollar | 30\u00a0558 | 54\u00a0214 |
Brazilian real | -218\u00a0372 | -191\u00a0871 |
Chilean peso | -28\u00a0753 | -22\u00a0760 |
Venezuelan bolivar soberano \u00b9 | -59\u00a0691 | -59\u00a0691 |
Indian rupee | -7\u00a0625 | -10\u00a0725 |
Czech koruna | 11\u00a0291 | 12\u00a0711 |
British pound | 2\u00a0115 | -9\u00a0931 |
Russian ruble | -6\u00a0463 | -208 |
Romenian leu | -3\u00a0991 | -4\u00a0002 |
Other currencies | -1\u00a0345 | 4\u00a0748 |
\u00b9 As a consequence of the functional currency switch to the US dollar on 1 January 2019, the value related to Venezuelan bolivar soberano remains frozen
2 See note 2.8 'Restatement effects'.
The swings in CTA reflected both the exchange rate evolution and the relative importance of the net assets denominated in the presented currencies.
Treasury shares | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -106\u00a0148 | -95\u00a0517 |
Shares purchased | -11\u00a0570 | -125\u00a0905 |
Shares sold | 28\u00a0988 | 35\u00a0707 |
Price difference on shares sold | -6\u00a0787 | -5\u00a0172 |
Cancellations | \u2014 | 51\u00a0573 |
As at 31 December | -95\u00a0517 | -139\u00a0314 |
The number of shares on hand were sufficient, both to anticipate any dilution and to hedge the cash flow risk on share-based payment plans. In 2022 a total of 3 749 238 additional shares were bought back including the transactions exercised under the liquidity agreement with Kepler Cheuvreux (2021: 309 242). A total of 1 449 409 were cancelled. A total of 1\u00a0064\u00a0800 treasury shares were sold to the beneficiaries of the share-based payment plans of the Group and under the liquidity agreement with Kepler Cheuvreux (2021: 973 330). Treasury shares are accounted for using the FIFO principle (first-in, first-out). Gains and losses on disposals of treasury shares are directly recognized through retained earnings (see movements in retained earnings below). See also note 6.13. \u2018Ordinary shares, treasury shares and equity-settled share-based payments\u2019.
Retained earnings | |||
in thousands of \u20ac | Notes | 2021 | 2022 |
As at 1 January (as reported) | 1\u00a0614\u00a0781 | 1\u00a0981\u00a0876 | |
Equity-settled share-based payments | \u2014 | 15\u00a0261 | -6\u00a0813 |
Result for the period attributable to equity holders of Bekaert\u00b9 | 404\u00a0062 | 268\u00a0859 | |
Dividends | -56\u00a0795 | -86\u00a0463 | |
Equity reclassification | \u2014 | -107 | |
Treasury shares transactions | 6.13 | 6\u00a0787 | -42\u00a0136 |
Changes in Group structure | -2\u00a0220 | \u2014 | |
As at 31 December | 1\u00a0981\u00a0876 | 2\u00a0115\u00a0216 |
\u00b9 See note 2.8 'Restatement effects'
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Carrying amount | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
As at 1 January | 124\u00a0243 | 119\u00a0244 | 38\u00a0337 | 52\u00a0059 |
Increase or decrease via income statement \u00b9 | -3\u00a0088 | -618 | 14\u00a0620 | 886 |
Increase or decrease via OCI | -2\u00a0191 | 1\u00a0175 | 1\u00a0308 | 6\u00a0049 |
New consolidations | \u2014 | 66 | 1\u00a0184 | 478 |
Exchange gains and losses \u00b9 | 6\u00a0858 | 1\u00a0384 | 3\u00a0187 | 1\u00a0425 |
Change in set-off of assets and liabilities \u00b9 | -6\u00a0577 | -16\u00a0880 | -6\u00a0577 | -16\u00a0880 |
As at 31 December | 119\u00a0244 | 104\u00a0372 | 52\u00a0059 | 44\u00a0018 |
Deferred tax assets and liabilities were attributable to the following items:
Assets | Liabilities | Net assets | ||||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 |
Intangible assets | 17\u00a0390 | 27\u00a0602 | 12\u00a0390 | 12\u00a0242 | 5\u00a0000 | 15\u00a0361 |
Property, plant and equipment | 46\u00a0338 | 41\u00a0134 | 55\u00a0828 | 55\u00a0369 | -9\u00a0490 | -14\u00a0234 |
Financial assets \u00b9 | 90 | 102 | 32\u00a0029 | 31\u00a0778 | -31\u00a0940 | -31\u00a0676 |
Inventories | 10\u00a0581 | 11\u00a0925 | 8\u00a0168 | 14\u00a0756 | 2\u00a0413 | -2\u00a0831 |
Receivables | 4\u00a0156 | 4\u00a0282 | 128 | 719 | 4\u00a0027 | 3\u00a0563 |
Other current assets | 1\u00a0004 | 1\u00a0246 | 1\u00a0995 | 3\u00a0049 | -991 | -1\u00a0802 |
Employee benefit obligations \u00b9 | 20\u00a0418 | 20\u00a0175 | 212 | 280 | 20\u00a0206 | 19\u00a0894 |
Other provisions | 1\u00a0938 | 3\u00a0393 | 4 | 198 | 1\u00a0934 | 3\u00a0195 |
Other liabilities | 38\u00a0630 | 40\u00a0566 | 8\u00a0311 | 9\u00a0514 | 30\u00a0319 | 31\u00a0052 |
Tax deductible losses carried forward, tax credits and recoverable | 45\u00a0707 | 37\u00a0832 | \u2014 | \u2014 | 45\u00a0707 | 37\u00a0832 |
Tax assets / liabilities | 186\u00a0250 | 188\u00a0258 | 119\u00a0065 | 127\u00a0904 | 67\u00a0186 | 60\u00a0355 |
Set-off of assets and liabilities \u00b9 | -67\u00a0006 | -83\u00a0886 | -67\u00a0006 | -83\u00a0886 | \u2014 | \u2014 |
Net tax assets / liabilities | 119\u00a0244 | 104\u00a0372 | 52\u00a0059 | 44\u00a0018 | 67\u00a0186 | 60\u00a0355 |
\u00b9 See note 2.8 'Restatement effects'
The deferred taxes on property, plant and equipment mainly related to differences in depreciation method between IFRS and tax books, whereas the deferred taxes on intangible assets were mainly generated by intercompany gains which have been eliminated in the consolidated statements. The deferred taxes on employee benefit obligations were mainly generated by temporary differences arising from recognition of liabilities in accordance with IAS 19 \u2018Employee Benefits\u2019. The deferred tax liabilities on financial assets mainly related to temporary differences arising from undistributed profits from subsidiaries and joint ventures.
Movements in deferred tax assets and liabilities arose from the following:
2021 | ||||||
in thousands of \u20ac | As at 1 January | Recognized via income statement | Recognized via OCI | Acquisitions | Exchange | As at 31 December |
Temporary differences | ||||||
Intangible assets | 7\u00a0502 | -2\u00a0221 | \u2014 | \u2014 | -281 | 5\u00a0000 |
Property, plant and equipment | -8\u00a0271 | -1\u00a0224 | \u2014 | -1\u00a0184 | 1\u00a0189 | -9\u00a0490 |
Financial assets \u00b9 | -20\u00a0850 | -9\u00a0356 | -1\u00a0288 | \u2014 | -445 | -31\u00a0940 |
Inventories | 7\u00a0462 | -4\u00a0459 | \u2014 | \u2014 | -590 | 2\u00a0413 |
Receivables | 4\u00a0557 | -596 | \u2014 | \u2014 | 66 | 4\u00a0027 |
Other current assets | -1\u00a0767 | 722 | \u2014 | \u2014 | 55 | -991 |
Employee benefit obligations \u00b9 | 23\u00a0375 | -1\u00a0353 | -2\u00a0212 | \u2014 | 396 | 20\u00a0206 |
Other provisions | 3\u00a0300 | -1\u00a0415 | \u2014 | \u2014 | 48 | 1\u00a0934 |
Other liabilities | 19\u00a0668 | 9\u00a0455 | \u2014 | \u2014 | 1\u00a0195 | 30\u00a0319 |
Tax deductible losses carried forward, tax credits and recoverable income taxes | 50\u00a0930 | -7\u00a0261 | \u2014 | \u2014 | 2\u00a0038 | 45\u00a0707 |
Total | 85\u00a0906 | -17\u00a0708 | -3\u00a0500 | -1\u00a0184 | 3\u00a0671 | 67\u00a0186 |
\u00b9 See note 2.8 'Restatement effects'
2022 | ||||||
in thousands of \u20ac | As at 1 January | Recognized via income statement | Recognized via OCI | Acquisitions | Exchange | As at 31 December |
Temporary differences | ||||||
Intangible assets | 5\u00a0000 | 10\u00a0397 | \u2014 | -478 | 442 | 15\u00a0361 |
Property, plant and equipment | -9\u00a0490 | -3\u00a0661 | \u2014 | \u2014 | -1\u00a0084 | -14\u00a0234 |
Financial assets | -31\u00a0940 | 6\u00a0351 | -6\u00a0005 | \u2014 | -82 | -31\u00a0676 |
Inventories | 2\u00a0413 | -4\u00a0725 | \u2014 | \u2014 | -518 | -2\u00a0831 |
Receivables | 4\u00a0027 | -558 | \u2014 | \u2014 | 94 | 3\u00a0563 |
Other current assets | -991 | -921 | \u2014 | \u2014 | 110 | -1\u00a0802 |
Employee benefit obligations | 20\u00a0206 | -2\u00a0112 | 1\u00a0192 | \u2014 | 608 | 19\u00a0894 |
Other provisions | 1\u00a0934 | 1\u00a0324 | -61 | \u2014 | -2 | 3\u00a0195 |
Other liabilities | 30\u00a0319 | 634 | \u2014 | \u2014 | 99 | 31\u00a0052 |
Tax deductible losses carried forward, tax credits and recoverable income taxes | 45\u00a0707 | -8\u00a0234 | \u2014 | 66 | 292 | 37\u00a0832 |
Total | 67\u00a0186 | -1\u00a0505 | -4\u00a0874 | -412 | -40 | 60\u00a0355 |
2021 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences \u00b9 | 88\u00a0229 | \u2014 | 88\u00a0229 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | 5\u00a0882 | \u2014 | 5\u00a0882 |
Remeasurement gains and losses on defined-benefit plans | 47\u00a0351 | -3\u00a0500 | 43\u00a0851 |
Share of OCI of joint ventures and associates | 6 | -3 | 3 |
Total | 141\u00a0467 | -3\u00a0503 | 137\u00a0965 |
\u00b9 See note 2.8 'Restatement effects'
2022 | |||
in thousands of \u20ac | Before tax | Tax impact | After tax |
Exchange differences | 48\u00a0888 | \u2014 | 48\u00a0888 |
Net fair value gain (+) / loss (-) on investments in equity instruments designated as at fair value through OCI | -2\u00a0367 | \u2014 | -2\u00a0367 |
Remeasurement gains and losses on defined-benefit plans | 3\u00a0393 | -4\u00a0874 | -1\u00a0481 |
Share of OCI of joint ventures and associates | 40 | -13 | 27 |
Total | 49\u00a0954 | -4\u00a0887 | 45\u00a0067 |
The following table presents the gross amounts of the tax losses and tax credits generating deferred tax assets of which some were unrecognized.
2021 | ||||||
in thousands of \u20ac | Expiring within 1 year | Expiring between 1 and 5 years | Expiring after more than 5 years | Not expiring | Total | |
Capital losses | Gross value | \u2014 | \u2014 | 777 | 40\u00a0009 | 40\u00a0786 |
Allowance | \u2014 | \u2014 | -752 | -39\u00a0758 | -40\u00a0510 | |
Net balance | \u2014 | \u2014 | 25 | 251 | 276 | |
Trade losses | Gross value | 38\u00a0285 | 61\u00a0381 | 153\u00a0867 | 674\u00a0409 | 927\u00a0943 |
Allowance | -36\u00a0320 | -47\u00a0215 | -133\u00a0825 | -551\u00a0123 | -768\u00a0482 | |
Net balance | 1\u00a0966 | 14\u00a0166 | 20\u00a0042 | 123\u00a0287 | 159\u00a0461 | |
Tax credits | Gross value | 34 | \u2014 | 306 | 20\u00a0554 | 20\u00a0894 |
Allowance | \u2014 | \u2014 | -306 | -3\u00a0164 | -3\u00a0470 | |
Net balance | 34 | \u2014 | \u2014 | 17\u00a0389 | 17\u00a0423 | |
Total | Gross value | 38\u00a0319 | 61\u00a0381 | 154\u00a0950 | 734\u00a0972 | 989\u00a0622 |
Allowance | -36\u00a0320 | -47\u00a0215 | -134\u00a0882 | -594\u00a0045 | -812\u00a0462 | |
Net balance | 2\u00a0000 | 14\u00a0166 | 20\u00a0068 | 140\u00a0927 | 177\u00a0160 |
2022 | ||||||
in thousands of \u20ac | Expiring within 1 year | Expiring between 1 and 5 years | Expiring after more than 5 years | Not expiring | Total | |
Capital losses | Gross value | \u2014 | \u2014 | 17\u00a0401 | 24\u00a0175 | 41\u00a0576 |
Allowance | \u2014 | \u2014 | -17\u00a0401 | -24\u00a0175 | -41\u00a0576 | |
Net balance | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Trade losses | Gross value | 37\u00a0027 | 61\u00a0189 | 181\u00a0512 | 591\u00a0736 | 871\u00a0464 |
Allowance | -36\u00a0670 | -47\u00a0760 | -135\u00a0417 | -510\u00a0784 | -730\u00a0631 | |
Net balance | 357 | 13\u00a0429 | 46\u00a0094 | 80\u00a0952 | 140\u00a0833 | |
Tax credits | Gross value | \u2014 | \u2014 | 325 | 12\u00a0523 | 12\u00a0848 |
Allowance | \u2014 | \u2014 | -325 | -3\u00a0178 | -3\u00a0503 | |
Net balance | \u2014 | \u2014 | \u2014 | 9\u00a0346 | 9\u00a0346 | |
Total | Gross value | 37\u00a0027 | 61\u00a0189 | 199\u00a0237 | 628\u00a0435 | 925\u00a0888 |
Allowance | -36\u00a0670 | -47\u00a0760 | -153\u00a0143 | -538\u00a0137 | -775\u00a0709 | |
Net balance | 357 | 13\u00a0429 | 46\u00a0094 | 90\u00a0298 | 150\u00a0179 |
The net deferred tax assets corresponding to these base amounts were \u20ac\u00a037.8\u00a0million in 2021 (2021: \u20ac 45.7 million).
Deferred tax assets were recognized only to the extent that it was probable that future taxable profits would be available, taking into account all evidence, both positive and negative. This assessment was done using prudent estimates based on the business plan for the entity concerned, typically using a five year time horizon.
Deferred tax reserve | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 26\u00a0785 | 23\u00a0464 |
Deferred taxes relating to other comprehensive income | -3\u00a0321 | -5\u00a0083 |
As at 31 December | 23\u00a0464 | 18\u00a0381 |
Deferred taxes relating to other comprehensive income are also recognized in OCI (see note 6.7. \u2018Deferred tax assets and liabilities\u2019).
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
in thousands of \u20ac | 2021 | 2022 |
Non-current financial receivables and cash guarantees | 10\u00a0192 | 9\u00a0665 |
Reimbursement rights and other non-current amounts receivable | 2\u00a0522 | 2\u00a0705 |
Derivatives (cf. note 7.2.) | 13\u00a0244 | 14\u00a0678 |
Overfunded employee benefit plans - non-current | 19\u00a0847 | 12\u00a0243 |
Equity investments at FVTOCI | 20\u00a0081 | 26\u00a0023 |
Total other non-current assets | 65\u00a0886 | 65\u00a0314 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 13\u00a0372 | 20\u00a0081 |
Expenditure | 863 | 8\u00a0613 |
Disposals | \u2014 | -76 |
Fair value changes | 5\u00a0847 | -2\u00a0595 |
As at 31 December | 20\u00a0081 | 26\u00a0023 |
The equity investments designated as at fair value through OCI (FVTOCI) in accordance with IFRS 9 \u2018Financial Instruments\u2019 mainly\u00a0consisted of:
\u2022Shougang Concord Century Holdings Ltd, a Hong Kong Stock Exchange listed company (\u20ac\u00a06.6 million). On this investment, an decrease in fair value of \u20ac\u00a03.2\u00a0million was recognized through OCI (2021: increase of \u20ac\u00a03.9\u00a0million).
\u2022Bekaert Xinyu Metal Products Co Ltd (\u20ac\u00a06.5 million). On this investment, an decrease in fair value of \u20ac\u00a01.5\u00a0million was recognized through OCI (2021: an increase of \u20ac\u00a02.0\u00a0million).
\u2022Transportes Puelche Ltda (\u20ac\u00a00.5 million), an investment held by Acma SA and Prodalam SA (Chile).
\u2022Pajarito Powder LLC (\u20ac\u00a03.9\u00a0million), a new investment held by Bekaert Corporation (US).
Plans in the United Kingdom
The funded plan in the United Kingdom related to a pension scheme closed for new entrants and further accrual representing a defined-benefit obligation of \u20ac\u00a052.5\u00a0million (2021:\u00a0\u20ac\u00a093.6\u00a0million) and assets of \u20ac\u00a059.9\u00a0million (2021:\u00a0\u20ac\u00a0113.5\u00a0million). The scheme is administrated by a separate board of Trustees which is legally separate from the company. The Trustees are composed of representatives of both employer and employees. The Trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits.
The defined-benefit obligation solely includes benefits for deferred vested members (members whose employment has terminated and have not yet reached the eligible retirement age for drawing a pension) and pensioners (members who are already receiving pension as they have reached the eligible retirement age). Broadly, about 72% of the liabilities are attributable to deferred vested members and 28% to pensioners (2021:\u00a030%\u00a0pensioners).
UK legislation requires that pension schemes are funded prudently. The funding valuation of the scheme carried out as at 31 December 2019 by a qualified actuary showed a surplus of \u20ac\u00a07.4\u00a0million. As a consequence, the company is not required to pay contributions into the scheme. Administration costs are reported separately from IAS 19.
Assets as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Non-current assets | |||
Intangible assets (b) | 61\u00a0440 | -4\u00a0113 | 57\u00a0326 |
Deferred tax assets (a + b) | 119\u00a0599 | -355 | 119\u00a0244 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Equity and liabilities as at 31 December | 2021 as published | 2021 restatement | 2021 as restated |
Retained earnings (a+b) | 1\u00a0984\u00a0791 | -2\u00a0915 | 1\u00a0981\u00a0876 |
Other Group reserves (a) | -232\u00a0012 | 56 | -231\u00a0957 |
Equity attributable to the Group | 1\u00a0969\u00a0551 | -2\u00a0859 | 1\u00a0966\u00a0692 |
Non Current liabilities | 1\u00a0107 | -2 | 1\u00a0106 |
Employee benefit obligations (a) | 77\u00a0659 | -1\u00a0688 | 75\u00a0971 |
Deferred tax liabilities (a + b) | 51\u00a0979 | 79 | 52\u00a0059 |
Total | 4\u00a0843\u00a0756 | -4\u00a0468 | 4\u00a0839\u00a0288 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Revaluation reserve for non-consolidated equity investments | -5\u00a0986 | -8\u00a0353 |
Remeasurement reserve for defined-benefit plans | -16\u00a0790 | -12\u00a0660 |
Deferred tax reserve | 23\u00a0464 | 18\u00a0381 |
Other reserves | 688 | -2\u00a0631 |
Cumulative translation adjustments\u00b9 | -137\u00a0127 | -93\u00a0820 |
Total other Group reserves\u00b9 | -136\u00a0440 | -96\u00a0451 |
Treasury shares | -95\u00a0517 | -139\u00a0314 |
Retained earnings\u00b9 | 1\u00a0981\u00a0876 | 2\u00a0115\u00a0216 |
\u00b9 See note 2.8 'Restatement effects'
In the following sections of this disclosure, the movements in the Group reserves and in retained earnings are presented and commented.
Revaluation reserve for non-consolidated equity investments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -11\u00a0867 | -5\u00a0986 |
Fair value changes | 5\u00a0882 | -2\u00a0367 |
As at 31 December | -5\u00a0986 | -8\u00a0353 |
Of which | ||
Investment in Shougang Concord Century Holdings Ltd | -6\u00a0078 | -9\u00a0228 |
Other investments | 92 | 876 |
The revaluation of the investment in Shougang Concord Century Holdings Ltd is based on the closing price of the share on the Hong Kong Stock Exchange. See also note 6.6. \u2018Other non-current assets\u2019.
Remeasurement reserve for defined-benefit plans | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -63\u00a0543 | -16\u00a0790 |
Remeasurements of the period | 46\u00a0753 | 4\u00a0024 |
Equity reclassification | \u2014 | 107 |
As at 31 December | -16\u00a0790 | -12\u00a0660 |
The remeasurements originate from using different actuarial assumptions in calculating the defined-benefit obligation, from differences with actual returns on plan assets at the balance sheet date and any changes in unrecognized assets due to the asset ceiling principle (see note 6.16. \u2018Employee benefit obligations\u2019).
Deferred tax reserve | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 26\u00a0785 | 23\u00a0464 |
Deferred taxes relating to other comprehensive income | -3\u00a0321 | -5\u00a0083 |
As at 31 December | 23\u00a0464 | 18\u00a0381 |
Deferred taxes relating to other comprehensive income are also recognized in OCI (see note 6.7. \u2018Deferred tax assets and liabilities\u2019).
Cumulative translation adjustments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -227\u00a0823 | -137\u00a0127 |
Exchange differences on dividends declared | -2\u00a0463 | 13\u00a0250 |
Recycled to income statement - relating to disposed entities or step acquisitions | 1\u00a0270 | \u2014 |
Movements arising from exchange rate fluctuations\u00b2 | 91\u00a0888 | 30\u00a0057 |
As at 31 December | -137\u00a0127 | -93\u00a0820 |
Of which relating to entities with following functional currencies | ||
Chinese renminbi | 145\u00a0149 | 133\u00a0695 |
US dollar | 30\u00a0558 | 54\u00a0214 |
Brazilian real | -218\u00a0372 | -191\u00a0871 |
Chilean peso | -28\u00a0753 | -22\u00a0760 |
Venezuelan bolivar soberano \u00b9 | -59\u00a0691 | -59\u00a0691 |
Indian rupee | -7\u00a0625 | -10\u00a0725 |
Czech koruna | 11\u00a0291 | 12\u00a0711 |
British pound | 2\u00a0115 | -9\u00a0931 |
Russian ruble | -6\u00a0463 | -208 |
Romenian leu | -3\u00a0991 | -4\u00a0002 |
Other currencies | -1\u00a0345 | 4\u00a0748 |
\u00b9 As a consequence of the functional currency switch to the US dollar on 1 January 2019, the value related to Venezuelan bolivar soberano remains frozen
2 See note 2.8 'Restatement effects'.
The swings in CTA reflected both the exchange rate evolution and the relative importance of the net assets denominated in the presented currencies.
Treasury shares | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -106\u00a0148 | -95\u00a0517 |
Shares purchased | -11\u00a0570 | -125\u00a0905 |
Shares sold | 28\u00a0988 | 35\u00a0707 |
Price difference on shares sold | -6\u00a0787 | -5\u00a0172 |
Cancellations | \u2014 | 51\u00a0573 |
As at 31 December | -95\u00a0517 | -139\u00a0314 |
The number of shares on hand were sufficient, both to anticipate any dilution and to hedge the cash flow risk on share-based payment plans. In 2022 a total of 3 749 238 additional shares were bought back including the transactions exercised under the liquidity agreement with Kepler Cheuvreux (2021: 309 242). A total of 1 449 409 were cancelled. A total of 1\u00a0064\u00a0800 treasury shares were sold to the beneficiaries of the share-based payment plans of the Group and under the liquidity agreement with Kepler Cheuvreux (2021: 973 330). Treasury shares are accounted for using the FIFO principle (first-in, first-out). Gains and losses on disposals of treasury shares are directly recognized through retained earnings (see movements in retained earnings below). See also note 6.13. \u2018Ordinary shares, treasury shares and equity-settled share-based payments\u2019.
Retained earnings | |||
in thousands of \u20ac | Notes | 2021 | 2022 |
As at 1 January (as reported) | 1\u00a0614\u00a0781 | 1\u00a0981\u00a0876 | |
Equity-settled share-based payments | \u2014 | 15\u00a0261 | -6\u00a0813 |
Result for the period attributable to equity holders of Bekaert\u00b9 | 404\u00a0062 | 268\u00a0859 | |
Dividends | -56\u00a0795 | -86\u00a0463 | |
Equity reclassification | \u2014 | -107 | |
Treasury shares transactions | 6.13 | 6\u00a0787 | -42\u00a0136 |
Changes in Group structure | -2\u00a0220 | \u2014 | |
As at 31 December | 1\u00a0981\u00a0876 | 2\u00a0115\u00a0216 |
\u00b9 See note 2.8 'Restatement effects'
Consolidated cash flow statement | 2021 as published | 2021 restatement | 2021 as restated |
Operating activities | |||
Operating result (EBIT) (a + b) | 513\u00a0086 | -2\u00a0497 | 510\u00a0589 |
Non-cash items included in operating result (a) | 190\u00a0222 | -1\u00a0617 | 188\u00a0605 |
Gross cash flows from operating activities | 536\u00a0997 | -4\u00a0113 | 532\u00a0884 |
Summary
in thousands of \u20ac | 2021 | 2022 |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 365\u00a0754 |
Non-cash items added back to operating result (EBIT)\u00b9 | 164\u00a0256 | 260\u00a0729 |
EBITDA\u00b9 | 674\u00a0845 | 626\u00a0483 |
Other gross cash flows from operating activities | -140\u00a0345 | -121\u00a0294 |
Gross cash flows from operating activities\u00b9 | 532\u00a0884 | 505\u00a0189 |
Changes in operating working capital \u00b2 | -119\u00a0773 | -174\u00a0467 |
Other operating cash flows | -32\u00a0620 | 9\u00a0570 |
Cash from operating activities\u00b9 | 380\u00a0491 | 340\u00a0292 |
Cash from investing activities\u00b9 | -91\u00a0810 | -124\u00a0956 |
Cash from financing activities | -567\u00a0082 | -174\u00a0398 |
Net increase or decrease in cash and cash equivalents\u00b9 | -278\u00a0401 | 40\u00a0937 |
\u00b9 See note 2.8 'Restatement effects'
2 For reconciliation of the changes in operating working capital with the organic variation of the working capital, see note 6.8. 'Operating working capital'.
The cash flow from operating activities is presented using the indirect method, whereas the direct method is used for the cash flows from other activities. The direct method focuses on classifying gross cash receipts and gross cash payments by category.
Cash from operating activities
Details of selected operating items | ||
in thousands of \u20ac | 2021 | 2022 |
Non-cash items included in operating result (EBIT) | ||
Depreciation and amortization \u00b9 \u00b2 | 165\u00a0774 | 202\u00a0795 |
Impairment losses on assets | -1\u00a0518 | 57\u00a0934 |
Non-cash items added back to operating result (EBIT)\u00b2 | 164\u00a0256 | 260\u00a0729 |
Gains (-) and losses on business disposals (portion retained) | \u2014 | -474 |
Employee benefits: set-up / reversal (-) of amounts not used \u00b2 | 12\u00a0428 | 26\u00a0158 |
Provisions: set-up / reversal (-) of amounts not used | -352 | 10\u00a0102 |
CTA recycled on business disposals | -2\u00a0987 | -555 |
Equity-settled share-based payments | 15\u00a0261 | 92 |
Other non-cash items included in operating result (EBIT)\u00b2 | 24\u00a0349 | 35\u00a0324 |
Total\u00b2 | 188\u00a0605 | 296\u00a0053 |
Investing items included in operating result (EBIT) | ||
Gains (-) and losses on business disposals (portion sold) | 170 | 210 |
Gains (-) and losses on disposals of intangible assets + PP&E | -23\u00a0404 | -11\u00a0591 |
Total | -23\u00a0234 | -11\u00a0381 |
Amounts used on provisions and employee benefit obligations | ||
Employee benefits: amounts used | -41\u00a0503 | -24\u00a0123 |
Provisions: amounts used | -8\u00a0837 | -3\u00a0824 |
Total | -50\u00a0340 | -27\u00a0947 |
Income taxes paid | ||
Current income tax expense | -116\u00a0006 | -79\u00a0593 |
Increase or decrease (-) in net income taxes payable | 23\u00a0269 | -37\u00a0697 |
Total | -92\u00a0737 | -117\u00a0289 |
Other operating cash flows | ||
Movements in other receivables and payables | -27\u00a0411 | 9\u00a0365 |
Other | -5\u00a0209 | 205 |
Total | -32\u00a0620 | 9\u00a0570 |
\u00b9 Including \u20ac 11.0 million (2021: \u20ac -18.6 million) write-downs / (reversals of write-downs) on inventories and trade receivables (see note 6.8. \u2018Operating working capital\u2019).
2\u00a0See note 2.8 'Restatement effects'
Gross cash flows from operating activities decreased by \u20ac\u00a0-27.7\u00a0million as a result of lower EBITDA (\u20ac\u00a0-48.4\u00a0million), lower set-up for equity-settled share-based payments (\u20ac\u00a0-15.2\u00a0million) and a higher cash-out from income taxes paid (\u20ac\u00a0-24.5\u00a0million higher). This is partially offset with a lower adjustment for the accounting profit on investing items (\u20ac\u00a0+11.9\u00a0million lower), by a higher set-up of employee benefit obligations and provisions, and a lower reversal and usage of employee benefits and provisions (\u20ac\u00a0+46.6\u00a0million higher).
The cash outflow from the increase in working capital, driven by the lower outstanding accounts payable, partially offset with higher inventories and trade receivables, amounted to \u20ac -178.7 million in 2022 (2021: \u20ac -119.8 million) (see organic decrease in note 6.8. \u2018Operating working capital\u2019).
Other operating cash flows mainly related to swings in other receivables and payables not included in working capital and not arising from investing or financing activities.
In 2022, the cash-out from income taxes was \u20ac\u00a0117.3\u00a0million. Most taxes were paid in China (\u20ac\u00a025.3\u00a0million), Chile (\u20ac\u00a017.5\u00a0million), Belgium (\u20ac\u00a010.8\u00a0million), Turkey (\u20ac\u00a011.2 million), Czech Republic (\u20ac\u00a08.7\u00a0million), Peru (\u20ac\u00a08\u00a0million), Colombia (\u20ac\u00a03.8\u00a0million) and Indonesia (\u20ac\u00a03.3\u00a0million).
Cash from investing activities
The following table presents more details on selected investing cash flows:
Details of selected investing items | ||
in thousands of \u20ac | 2021 | 2022 |
Other portfolio investments | ||
New business combinations | \u2014 | -2\u00a0384 |
Other investments | -863 | -8\u00a0613 |
Total | -863 | -10\u00a0997 |
Proceeds from disposals of fixed assets | ||
Proceeds from disposals of intangible assets | 121 | 127 |
Proceeds from disposals of property, plant and equipment | 12\u00a0235 | 2\u00a0115 |
Proceeds from disposals of RoU Land | 712 | 7 |
Proceeds from disposals of assets classified as held for sale | 23\u00a0683 | 891 |
Total | 36\u00a0752 | 3\u00a0141 |
The other investments in 2022 relate to the investment in Pajarito Powder LLC (\u20ac 3.9 million)\u00a0 and TFI Marine Nominees Limited (\u20ac 4.0 million). New business combinations relate to the investments in new subsidiaries in 2022.The other investments in 2021 relate to the investment in a power generation company in India.
Cash-outs from capital expenditure for property, plant and equipment increased from \u20ac 143.8 million in 2021 to \u20ac 170.2 million in 2022.
The proceeds from sales of fixed assets in 2022 relate to sales transactions, mainly in Belgium. In 2021 they relate to the real estate sales transactions, mainly in Peru, Malaysia, Belgium and Canada.
Cash from financing activities
The following table presents more details about selected financing items:
Details of selected financing items | ||
in thousands of \u20ac | 2021 | 2022 |
Other financing cash flows | ||
New shares issued following exercise of subscription rights | 1\u00a0077 | 748 |
Increase (-) or decrease in current and non-current receivables | 495 | -763 |
Increase (-) or decrease in current financial assets | -28\u00a0439 | 75\u00a0552 |
Other financial income and expenses | -2\u00a0879 | -7\u00a0064 |
Total | -29\u00a0747 | 68\u00a0473 |
New long-term debt issued was limited to \u20ac 12.0 million in 2022 (2021:\u00a0\u20ac\u00a023.6\u00a0million). Repayments of long-term debt (\u20ac -87.6 million) refinancing of local loans in Peru (\u20ac -25.5 million), Australia (\u20ac -16.2 million) and China (\u20ac\u00a0-12.0\u00a0million). Cash-ins from short-term debt amounted to \u20ac\u00a0+67.3 million in 2022 (2021: cash-outs \u20ac -43.3 million), mostly by entering in new short term loans by the Latin American entities. For an overview of the movements in liabilities arising from financing activities, see note\u00a06.18.\u00a0\u2018Interest-bearing debt\u2019.
In 2022 the treasury shares transactions decreased with \u20ac\u00a0-97.1\u00a0million (2021: increase by \u20ac 17.4 million) and consisted mainly of the costs of share buy-back program being exercised.
In the application of the Group\u2019s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. These judgments, estimates and assumptions are reviewed on an ongoing basis.
3.1. Significant judgements in applying the entity's accounting policies
The following are the significant judgements made by management, apart from those involving estimations (see note 3.2.\u00a0\u2018Key sources of estimation uncertainty\u2019 below), that have a significant effect on the amounts reported in the consolidated financial statements.
\u2022Management assessed that a constructive obligation exists in Belgium to provide pre-retirement schemes for employees as from the first day of service (see note 6.16. \u2018Employee benefit obligations\u2019) and therefore these pre-retirement schemes are treated as defined-benefit plans using the projected unit credit method. The obligation amounted to \u20ac\u00a06.3\u00a0million (2021: \u20ac 8.0 million).
\u2022Management concluded that the criteria for capitalization were not met and hence recognized development expenditure through profit or loss.
\u2022When management incurs implementation and customization costs when entering into cloud computing arrangements, management makes judgments to determine which costs can be recognized as intangible asset. Management first assess if the arrangement provides a resource it can control. When making this judgment, it considers the IFRS Interpretation Committee (IFRIC) agenda decision of March 2019 on Customer\u2019s Right to Receive Access to the Supplier\u2019s Software Hosted on the Cloud. Thereafter, it assess which fees and implementation costs can be capitalized, Management considered the IFRS Interpretation Committee (IFRIC) agenda decision of April 2021 on the clarification of accounting in relation to these costs.
\u2022Management makes judgments in defining the functional currency of Group entities based on economic substance of the transactions relevant to these entities. By default the functional currency is the one of the country in which the entity is operating. See note 7.7. \u2018Subsidiaries, joint ventures and associates\u2019 for a comprehensive list of entities and their functional currency.
\u2022Management assessed that it is controlling the Venezuelan subsidiaries. In spite of the political and monetary instability, management was able to keep the company operational and hence concluded that it is in control. The US dollar is the functional currency and as from May 2019, banks can act as intermediaries in foreign currency transactions through \u2018exchange tables\u2019, a measure that makes the exchange control that operated since 2003 and that gave the State a monopoly in currency management, more flexible. At year-end 2022, the cumulative translation adjustments (\u2018CTA\u2019) amount to \u20ac -59.6 million, which - in case of loss of control - would be recycled to income statement. Apart from the CTA, the contribution of the Venezuelan operations to the consolidated accounts is immaterial.
\u2022Deferred tax assets were recognized to the extent that it was probable that future taxable profits would be available, taking into account all evidence, both positive and negative. This assessment was done using prudent estimates based on the business plan for the entity concerned, typically using a five year time horizon. In some countries, deferred tax assets on capital losses, trade losses and tax credits were recognized to the extent of uncertain tax provisions recognized, in order to reflect that some tax audit adjustments would result in an adjustment of the amount of tax losses rather than in a tax cash-out for the entity concerned.
3.2. Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and the other key sources of estimation uncertainty at the end of the reporting period that have a risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year.
\u2022Management performed the annual impairment test on the goodwill related to BBRG on the basis of the latest business plan. Following the realized turnaround performance of the business in 2020, headroom has become very solid, reducing the likelihood of an impairment loss (see note 6.2. \u2018Goodwill\u2019).
\u2022Impairment analyses are based upon assumptions such as market evolution, margin evolution and discount rates. The ability of an entity to pass on changes in raw material prices to its customers (either through contractual arrangements or through commercial negotiations) is included in the margin evolution assumption. Sensitivity analyses for reasonable changes in these assumptions are presented as part of note 6.2. \u2018Goodwill\u2019.
\u2022Given its global presence, Bekaert is exposed to tax risks in many jurisdictions. On the one hand, the application of tax law in the different jurisdictions can be complex and requires judgement to assess risk and estimate outcomes, which is a major source of uncertainty. On the other hand, tax authorities of the jurisdictions conduct regular tax audits that may reveal potential tax issues. As the tax audits can take many years to resolve, this further adds to the uncertainty. While the outcome of such tax audits is not certain, Bekaert has considered the merits of its filing positions of the matters subject to each tax audit in an overall evaluation of potential tax liabilities, and concludes that the Group has adequate liabilities recorded in its consolidated financial statements for
\u2022exposures on these matters. Accordingly, Bekaert considers it unlikely that potential tax exposures over and above the amounts currently recorded as liabilities in the consolidated financial statements will be material to its financial condition. Both the timing and the position taken by the tax authorities in the different jurisdictions give rise to uncertainty and can result in an adjustment to the carrying amounts of income tax payable related to uncertain tax positions within the next financial year. At year- end 2022 Bekaert has uncertain tax positions recognized as income taxes payable amounting to \u20ac 43.8 million (2021: \u20ac 38.9 million). See note 6.21.\u00a0\u2018Tax\u00a0positions\u2019.
3.3. Impact of macro-economic environment, climate and Russia
Impact of the macroeconomic environment
The evolution in the macroeconomic environment has affected businesses all over the world. The Group has identified the risks linked to these evolutions and has implemented mitigating actions, as described in the Corporate Governance Statements - chapter \u2018General internal control and ERM\u2019 of this report.
Increasing risks arising from demand impact and inflationary cost pressure from economic crises as well as impacts on discount rates
Impactful demand changes can affect sectors that are relevant to Bekaert. A crisis or recession can lead to a demand decline driven by weak consumer confidence and postponed investments. The resulting upstream and downstream overcapacity can lead to price erosion across the supply chain. To mitigate these risks, Bekaert implements measures to be cost-competitive, to flex costs, and to pass on cost inflation.
The measures to flex costs and pass on cost inflation are reflected in the 2022 financials. In 2022 there were significant increases to the costs of the Group\u2019s raw materials, principally wire rod, and to its energy costs. (see note 5.3. Operating result (EBIT) by nature). All business units responded well to these challenges with pass through of increases in costs. The underlying EBIT bridge demonstrates that the positive price and mix impact was driven by further business-mix improvements and strong pricing discipline, which
more than offset the adverse effects of lower sales volumes and higher conversion cash costs from the under-absorption of fixed overheads. (see note 5.2. Operating result (EBIT) by function and press release related to the 2022 Full Year financial statements).
In the valuation of the Group\u2019s defined-benefit plans, the principal actuarial assumptions are also influenced by the macroeconomic evolution. The details of those valuations are included in note 6.16. \u2018Employee benefit obligations\u2019. Changes recognized in equity amounted to \u20ac -3.4 million and were driven by \u20ac 97.3 million loss on plan assets reflecting negative asset return, offset by \u20ac 100.7 million gains in defined benefit obligation. The latter can be broken down into \u20ac 119.0 million gains due to changes in financial assumptions reflecting increased discount rates and increased inflation assumption, \u20ac 1.9 million losses due to changes in demographic assumptions and \u20ac 16.4 million losses in liabilities due to experience adjustments.
Impact of climate changes and environmental footprint
In order to support the market and technology positioning in green energy markets, Bekaert has concluded partnerships in 2022 that are improving market access and our technology positions in high growth sectors (see note 6.6. Other non-current assets). These included:
\u2022a partnership with Pajarito Powder (US) to accelerate the development of spearheading innovations in the market of green hydrogen production
\u2022a partnership with TFI Marine (Ireland) to accelerate the go-to-market of digital-enabled mooring solutions for floating offshore wind farms
The Group has also signed Virtual Power Purchase Agreements (see note 7.2. Financial risk management and financial instruments) in the US and India and is installing a solar park in Burgos, Spain, to help reduce and offset its carbon greenhouse emissions.
The Group also invested in capital expenditure in 2022 supporting environmental sustainable activities (see note 6.3. Property, plant and equipment as well as the chapter \u2018EU Taxonomy Key Performance Indicators\u2019 in the Environmental Statements).
Impact of the conflict in Ukraine
Since the outbreak of conflict in Ukraine, we have significantly scaled back business activities in and with Russia. The presence of Bekaert in Russia includes a manufacturing plant (Lipetsk) and a sales office (Moscow), mainly operating for the Rubber Reinforcement segment. Most of the activities are \u2019local for local\u2019 (local sourcing and production and domestic sales). The financials of the Lipetsk plant in Russia are included in the consolidated financial statements of 2022. The ongoing conflict is a clear impairment indicator, and as such the Group has performed an impairment test at year-end under value in use. Based on the outcome of the impairment test, the Group has taken the decision to fully impair the fixed assets (see note 6.3. Property, Plant and Equipment). We are therefore taking in 2022 a non-cash exceptional charge of \u20ac 55 million in the result (see note 5.2. Operating result (EBIT) by function).
At 31 December 2022, there remained consolidated current assets of \u20ac 26 million and consolidated liabilities of \u20ac 3 million in relation to activities in the Lipetsk plant. Lipetsk also has an intercompany debt position towards partners within the Group of \u20ac 35 million as well as net intercompany liabilities of \u20ac 12 million.
3.2. Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and the other key sources of estimation uncertainty at the end of the reporting period that have a risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year.
\u2022Management performed the annual impairment test on the goodwill related to BBRG on the basis of the latest business plan. Following the realized turnaround performance of the business in 2020, headroom has become very solid, reducing the likelihood of an impairment loss (see note 6.2. \u2018Goodwill\u2019).
\u2022Impairment analyses are based upon assumptions such as market evolution, margin evolution and discount rates. The ability of an entity to pass on changes in raw material prices to its customers (either through contractual arrangements or through commercial negotiations) is included in the margin evolution assumption. Sensitivity analyses for reasonable changes in these assumptions are presented as part of note 6.2. \u2018Goodwill\u2019.
\u2022Given its global presence, Bekaert is exposed to tax risks in many jurisdictions. On the one hand, the application of tax law in the different jurisdictions can be complex and requires judgement to assess risk and estimate outcomes, which is a major source of uncertainty. On the other hand, tax authorities of the jurisdictions conduct regular tax audits that may reveal potential tax issues. As the tax audits can take many years to resolve, this further adds to the uncertainty. While the outcome of such tax audits is not certain, Bekaert has considered the merits of its filing positions of the matters subject to each tax audit in an overall evaluation of potential tax liabilities, and concludes that the Group has adequate liabilities recorded in its consolidated financial statements for
\u2022exposures on these matters. Accordingly, Bekaert considers it unlikely that potential tax exposures over and above the amounts currently recorded as liabilities in the consolidated financial statements will be material to its financial condition. Both the timing and the position taken by the tax authorities in the different jurisdictions give rise to uncertainty and can result in an adjustment to the carrying amounts of income tax payable related to uncertain tax positions within the next financial year. At year- end 2022 Bekaert has uncertain tax positions recognized as income taxes payable amounting to \u20ac 43.8 million (2021: \u20ac 38.9 million). See note 6.21.\u00a0\u2018Tax\u00a0positions\u2019.", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:5493008SR6XZECH6BN71", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f-434": { "value": "Management performed the annual impairment test on the goodwill related to BBRG on the basis of the latest business plan. Following the realized turnaround performance of the business in 2020, headroom has become very solid, reducing the likelihood of an impairment loss (see note 6.2. \u2018Goodwill\u2019).\u2022Impairment analyses are based upon assumptions such as market evolution, margin evolution and discount rates. The ability of an entity to pass on changes in raw material prices to its customers (either through contractual arrangements or through commercial negotiations) is included in the margin evolution assumption. Sensitivity analyses for reasonable changes in these assumptions are presented as part of note 6.2. \u2018Goodwill\u2019.6.2. GoodwillThis note mainly relates to goodwill on acquisition of subsidiaries. Goodwill in respect of joint ventures and associates is disclosed in note 6.5.\u00a0\u2018Investments in joint ventures and associates\u2019.
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 154\u00a0280 | 155\u00a0970 |
New consolidations | \u2014 | 1\u00a0376 |
Exchange gains and losses (-) | 1\u00a0689 | 556 |
As at 31 December | 155\u00a0970 | 157\u00a0901 |
Impairment losses | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 4\u00a0883 | 5\u00a0295 |
Exchange gains (-) and losses | 413 | 39 |
As at 31 December | 5\u00a0295 | 5\u00a0334 |
Carrying amount as at 31 December | 150\u00a0674 | 152\u00a0567 |
Goodwill acquired in a business combination is allocated on acquisition to the cash-generating units (CGU) that are expected to benefit from that business combination. The carrying amount of goodwill allocated and any related movements of the period are as follows:
2021 | |||||
in thousands of \u20ac | Group of cash-generating units | Carrying amount | Increases | Exchange differences | Carrying amount |
Subsidiaries | |||||
SWS | Bekaert Bradford UK Ltd | 2\u00a0490 | \u2014 | 174 | 2\u00a0664 |
SB | Combustion - heating EMEA | 3\u00a0027 | \u2014 | \u2014 | 3\u00a0027 |
SB | Building Products | 71 | \u2014 | \u2014 | 71 |
RR | Rubber Reinforcement | 4\u00a0255 | \u2014 | \u2014 | 4\u00a0255 |
SWS | Orrville plant (USA) | 9\u00a0560 | \u2014 | 798 | 10\u00a0357 |
SWS | Inchalam group | 727 | \u2014 | -70 | 657 |
SWS | Bekaert Ideal SL companies | 844 | 547 | 46 | 1\u00a0437 |
SWS | Bekaert (Qingdao) Wire Products Co Ltd | 385 | \u2014 | \u2014 | 385 |
SWS | Bekaert Jiangyin Wire Products Co Ltd | 47 | \u2014 | \u2014 | 47 |
SWS | Grating Peru SAC | 547 | -547 | \u2014 | \u2014 |
BBRG | BBRG | 127\u00a0445 | \u2014 | 329 | 127\u00a0774 |
Subtotal | 149\u00a0398 | \u2014 | 1\u00a0276 | 150\u00a0674 | |
Joint ventures and associates | |||||
SWS | Belgo Bekaert Arames Ltda | 2\u00a0358 | \u2014 | 24 | 2\u00a0382 |
RR | BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 1\u00a0442 | \u2014 | 14 | 1\u00a0456 |
Subtotal | 3\u00a0800 | \u2014 | 38 | 3\u00a0838 | |
Total | 153\u00a0198 | \u2014 | 1\u00a0314 | 154\u00a0513 |
2022 | |||||
in thousands of \u20ac | Group of cash-generating units | Carrying amount | Increases | Exchange differences | Carrying amount |
Subsidiaries | |||||
SWS | Bekaert Bradford UK Ltd | 2\u00a0664 | \u2014 | -140 | 2\u00a0523 |
SB | Combustion - heating EMEA | 3\u00a0027 | \u2014 | \u2014 | 3\u00a0027 |
SB | Building Products | 71 | \u2014 | \u2014 | 71 |
RR | Rubber Reinforcement | 4\u00a0255 | \u2014 | \u2014 | 4\u00a0255 |
SWS | Orrville plant (USA) | 10\u00a0357 | \u2014 | 641 | 10\u00a0998 |
SWS | Inchalam group | 657 | \u2014 | 42 | 699 |
SWS | Bekaert Ideal SL companies | 1\u00a0437 | 490 | 67 | 1\u00a0994 |
SWS | Bekaert (Qingdao) Wire Products Co Ltd | 385 | \u2014 | \u2014 | 385 |
SWS | Bekaert Jiangyin Wire Products Co Ltd | 47 | \u2014 | \u2014 | 47 |
BBRG | BBRG | 127\u00a0774 | 886 | -93 | 128\u00a0567 |
Subtotal | 150\u00a0674 | 1\u00a0376 | 517 | 152\u00a0567 | |
Joint ventures and associates | |||||
SWS | Belgo Bekaert Arames Ltda | 2\u00a0382 | \u2014 | 284 | 2\u00a0666 |
RR | BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 1\u00a0456 | \u2014 | 173 | 1\u00a0630 |
Subtotal | 3\u00a0838 | \u2014 | 457 | 4\u00a0295 | |
Total | 154\u00a0513 | 1\u00a0376 | 974 | 156\u00a0862 |
Following the merger of Grating Peru SAC into Productos de Acero Cassad\u00f3 S.A. in 2021, the initial goodwill allocated to Grating Peru SAC was reclassified under the Bekaert Ideal SL companies. The increases in goodwill related to the step-acquisition of VisionTek Engineering Srl and the acquisition of Sujetar, which is in the meantime merged into Productos de Acero Cassado SA.
The discount factor for all impairment tests is based on a (long-term) post-tax cost of capital, the risks being implicit in the cash flows. A weighted average cost of capital (WACC) is determined for euro, US dollar and Chinese renminbi regions. For countries or businesses with a higher perceived risk, the WACC is raised with a country or business specific risk factor. The WACC is post-tax based, since relevant cash flows are also post-tax based. In determining the weight of the cost of debt vs the cost of equity, a target gearing (net debt relative to equity) of 50% is used. For cash flow models stated in real terms (without inflation), the nominal WACC is adjusted for the expected inflation rate. For cash flow models in nominal terms, the nominal WACC is used. All parameters used for the calculation of the discount factors are reviewed at least annually.
In relation to the impairment testing of goodwill arising from the BBRG business combination, the following model characteristics have been used:
\u2022a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption based on a nominal perpetual growth rate of 2% (in\u00a02021:\u00a02%), which mainly is based on a conservative industrial GDP evolution assumption;
\u2022the cash flows reflect the evolution taking into account agreed action plans and are based on the assets in their current condition, without including the impacts of future restructuring not yet committed;
\u2022only capital expenditure required to maintain the assets in good working order are included; future capital expenditures improving or enhancing the assets in excess of their originally assessed standard of performance are not considered;
\u2022no cost structure improvements are taken into account unless they can be substantiated; and
\u2022the cash outflows relating to working capital are calculated as a percentage of incremental sales based on the past performance of BBRG.
The headroom for impairment, i.e., the excess of the recoverable amount over the carrying amount of the BBRG CGU is estimated at \u20ac 200.1 million (2021: \u20ac 375.0 million). The decrease is the combined result of the updated business plan (\u20ac -107.2 million) and by an increase of the capital employed of the business (\u20ac +67.7 million).
The following scenario\u2019s illustrate the sensitivity of this headroom to changes in the key assumptions of the business plan:
\u2022If the sales level would be 10% lower in all periods of the business plan, then headroom would be \u20ac 98.5 million lower (remaining \u20ac 101.6 million);
\u2022If the percentage Underlying EBITDA on sales would be 1% short from the forecasted level in all periods of the business plan, then headroom would be \u20ac 67.4 million lower (remaining \u20ac 132.7 million);
\u2022If the Underlying EBITDA would be \u20ac 5.0 million short from the forecasted level in all periods of the business plan, then headroom would be \u20ac\u00a052.8\u00a0million lower (remaining \u20ac\u00a0147.3\u00a0million);
\u2022If the discount factor would be 1% higher, then headroom would be \u20ac\u00a083.0\u00a0million lower (remaining \u20ac 117.1 million);
\u2022The combined effect of a lower sales level by 10% and a lower Underlying EBITDA margin by 1%, in all periods of the business plan would result in a drop of \u20ac 159.2 million in headroom (remaining \u20ac 40.9 million);
\u2022The combined effect of a lower sales level by 10%, a lower Underlying EBITDA margin by 1% in all periods of the business plan and a higher discount factor with 1% would result in an impairment loss of \u20ac\u00a024.6\u00a0million.
Based on current knowledge, reasonable changes in key assumptions (including discount rate, sales and margin evolution) would not generate impairments for any of the cash-generating units for which goodwill has been allocated.
Discount rates for impairment testing | |||||
2021 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.8% | 4.7% | 4.8% | ||
Long term interest rate | 2.1% | 5.2% | 4.9% | ||
Short term interest rate | 0.7% | 3.1% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 9.3% | 10.8% | 14.1% | |
Risk free rate = Rf | 0.1% | 1.6% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.0% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 12.8% | 14.8% | 19.3% | ||
Bekaert WACC - nominal | 9.1% | 11.4% | 14.5% | ||
Expected inflation | 2.1% | 2.3% | 3.0% | ||
Bekaert WACC in real terms pre-tax | 7.0% | 9.1% | 11.5% | ||
Bekaert WACC in real terms (indicative post-tax) | 4.6% | 6.0% | 7.6% |
Discount rates for impairment testing | |||||
2022 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.2% | 3.6% | 4.8% | ||
Long term interest rate | 1.5% | 3.9% | 4.9% | ||
Short term interest rate | 0.3% | 2.5% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 12.3% | 13.4% | 14.5% | |
Risk free rate = Rf | 2.7% | 3.8% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.3% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 16.8% | 18.4% | 19.9% | ||
Bekaert WACC - nominal | 8.5% | 9.8% | 10.8% | ||
Expected inflation | 2.0% | 2.1% | 2.3% | ||
Bekaert WACC in real terms | 6.5% | 7.7% | 8.5% |
Other operating expenses | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties paid | -1\u00a0012 | -951 | 62 |
Losses on disposal of PP&E and intangible assets | -1\u00a0375 | -760 | 615 |
Amortization of intangible assets | -1\u00a0512 | -1\u00a0500 | 12 |
Bank charges | -2\u00a0776 | -3\u00a0660 | -884 |
Tax related expenses (other than income taxes) | -2\u00a0639 | -3\u00a0841 | -1\u00a0202 |
Impairment losses | -278 | -857 | -579 |
Restructuring | -12\u00a0379 | -5\u00a0932 | 6\u00a0447 |
Environmental | -37 | -1\u00a0225 | -1\u00a0187 |
Losses on business disposals | -170 | -210 | -40 |
Other expenses | -6\u00a0716 | -6\u00a0912 | -196 |
Total | -28\u00a0894 | -25\u00a0848 | 3\u00a0046 |
Accumulated amortization and impairment | Licenses, patents & similar rights | Computer software | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 17\u00a0510 | 79\u00a0111 | 21\u00a0194 | 15\u00a0188 | 133\u00a0003 |
Charge for the year | 1\u00a0920 | 3\u00a0573 | 3\u00a0872 | 30 | 9\u00a0395 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Exchange gains (-) and losses | 11 | 1\u00a0575 | 1\u00a0616 | 1\u00a0184 | 4\u00a0386 |
As at 31 December 2021 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
As at 1 January 2022 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
Charge for the year | 1\u00a0989 | 3\u00a0722 | 4\u00a0162 | 409 | 10\u00a0282 |
Impairment losses | \u2014 | 214 | \u2014 | \u2014 | 214 |
Disposals and retirements | \u2014 | -50 | \u2014 | \u2014 | -50 |
Transfers \u00b9 | \u2014 | -32 | \u2014 | \u2014 | -32 |
Exchange gains (-) and losses | -26 | 711 | -796 | -752 | -863 |
As at 31 December 2022 | 21\u00a0303 | 81\u00a0681 | 28\u00a0880 | 14\u00a0409 | 146\u00a0274 |
Carry amount as at 31 December 2021 | 7\u00a0965 | 16\u00a0160 | 33\u00a0202 | \u2014 | 57\u00a0327 |
Carry amount as at 31 December 2022 | 5\u00a0860 | 26\u00a0601 | 27\u00a0718 | 1\u00a0971 | 62\u00a0149 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
In relation to the impairment testing of goodwill arising from the BBRG business combination, the following model characteristics have been used:
\u2022a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption based on a nominal perpetual growth rate of 2% (in\u00a02021:\u00a02%), which mainly is based on a conservative industrial GDP evolution assumption;
\u2022the cash flows reflect the evolution taking into account agreed action plans and are based on the assets in their current condition, without including the impacts of future restructuring not yet committed;
\u2022only capital expenditure required to maintain the assets in good working order are included; future capital expenditures improving or enhancing the assets in excess of their originally assessed standard of performance are not considered;
\u2022no cost structure improvements are taken into account unless they can be substantiated; and
\u2022the cash outflows relating to working capital are calculated as a percentage of incremental sales based on the past performance of BBRG.
The headroom for impairment, i.e., the excess of the recoverable amount over the carrying amount of the BBRG CGU is estimated at \u20ac 200.1 million (2021: \u20ac 375.0 million). The decrease is the combined result of the updated business plan (\u20ac -107.2 million) and by an increase of the capital employed of the business (\u20ac +67.7 million).
The following scenario\u2019s illustrate the sensitivity of this headroom to changes in the key assumptions of the business plan:
\u2022If the sales level would be 10% lower in all periods of the business plan, then headroom would be \u20ac 98.5 million lower (remaining \u20ac 101.6 million);
\u2022If the percentage Underlying EBITDA on sales would be 1% short from the forecasted level in all periods of the business plan, then headroom would be \u20ac 67.4 million lower (remaining \u20ac 132.7 million);
\u2022If the Underlying EBITDA would be \u20ac 5.0 million short from the forecasted level in all periods of the business plan, then headroom would be \u20ac\u00a052.8\u00a0million lower (remaining \u20ac\u00a0147.3\u00a0million);
\u2022If the discount factor would be 1% higher, then headroom would be \u20ac\u00a083.0\u00a0million lower (remaining \u20ac 117.1 million);
\u2022The combined effect of a lower sales level by 10% and a lower Underlying EBITDA margin by 1%, in all periods of the business plan would result in a drop of \u20ac 159.2 million in headroom (remaining \u20ac 40.9 million);
\u2022The combined effect of a lower sales level by 10%, a lower Underlying EBITDA margin by 1% in all periods of the business plan and a higher discount factor with 1% would result in an impairment loss of \u20ac\u00a024.6\u00a0million.
Based on current knowledge, reasonable changes in key assumptions (including discount rate, sales and margin evolution) would not generate impairments for any of the cash-generating units for which goodwill has been allocated.
Discount rates for impairment testing | |||||
2021 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.8% | 4.7% | 4.8% | ||
Long term interest rate | 2.1% | 5.2% | 4.9% | ||
Short term interest rate | 0.7% | 3.1% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 9.3% | 10.8% | 14.1% | |
Risk free rate = Rf | 0.1% | 1.6% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.0% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 12.8% | 14.8% | 19.3% | ||
Bekaert WACC - nominal | 9.1% | 11.4% | 14.5% | ||
Expected inflation | 2.1% | 2.3% | 3.0% | ||
Bekaert WACC in real terms pre-tax | 7.0% | 9.1% | 11.5% | ||
Bekaert WACC in real terms (indicative post-tax) | 4.6% | 6.0% | 7.6% |
Discount rates for impairment testing | |||||
2022 | EUR region | USD region | CNY region | ||
Group target ratios | |||||
Gearing: net debt / equity | 50% | ||||
% debt | 33.3% | ||||
% equity | 66.7% | ||||
% LT debt | 75% | ||||
% ST debt | 25% | ||||
Cost of Bekaert debt | 1.2% | 3.6% | 4.8% | ||
Long term interest rate | 1.5% | 3.9% | 4.9% | ||
Short term interest rate | 0.3% | 2.5% | 4.4% | ||
Cost of Bekaert equity (post tax) | = Rf + b * Em + S | 12.3% | 13.4% | 14.5% | |
Risk free rate = Rf | 2.7% | 3.8% | 4.9% | ||
Beta = b | 1.3 | ||||
Market equity risk premium = Em | 6.3% | ||||
Size premium = S | 1.4% | ||||
Corporate tax rate | 27% | ||||
Cost of Bekaert equity | 16.8% | 18.4% | 19.9% | ||
Bekaert WACC - nominal | 8.5% | 9.8% | 10.8% | ||
Expected inflation | 2.0% | 2.1% | 2.3% | ||
Bekaert WACC in real terms | 6.5% | 7.7% | 8.5% |
Accumulated depreciation and impairment | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
in thousands of \u20ac | ||||||
As at 1 January 2021 | 634\u00a0755 | 2\u00a0207\u00a0291 | 92\u00a0087 | 5\u00a0246 | \u2014 | 2\u00a0939\u00a0379 |
Charge for the year | 41\u00a0600 | 101\u00a0370 | 7\u00a0704 | 755 | \u2014 | 151\u00a0429 |
Impairment losses | \u2014 | 1\u00a0077 | 158 | 9 | \u2014 | 1\u00a0244 |
Reversal impairment losses and depreciations | \u2014 | -2\u00a0760 | -2 | \u2014 | \u2014 | -2\u00a0762 |
Disposals and retirements | -19\u00a0345 | -49\u00a0080 | -3\u00a0591 | -208 | \u2014 | -72\u00a0225 |
Transfers \u00b9 | \u2014 | \u2014 | 78 | \u2014 | \u2014 | 78 |
Reclassification to (-) / from held for sale \u00b2 | -744 | -148 | \u2014 | -89 | \u2014 | -981 |
Exchange gains (-) and losses | 37\u00a0566 | 137\u00a0913 | 4\u00a0046 | 85 | \u2014 | 179\u00a0611 |
As at 31 December 2021 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
As at 1 January 2022 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
Charge for the year | 44\u00a0719 | 102\u00a0714 | 7\u00a0067 | 789 | \u2014 | 155\u00a0289 |
Impairment losses | 9\u00a0541 | 48\u00a0346 | 119 | \u2014 | \u2014 | 58\u00a0006 |
Reversal impairment losses and depreciations | \u2014 | -231 | \u2014 | \u2014 | \u2014 | -231 |
Disposals and retirements | -3\u00a0240 | -18\u00a0005 | -4\u00a0267 | -115 | \u2014 | -25\u00a0627 |
Transfers \u00b9 | \u2014 | 63 | 21 | \u2014 | \u2014 | 84 |
Reclassification to (-) / from held for sale \u00b2 | \u2014 | 148 | \u2014 | 89 | \u2014 | 237 |
Exchange gains (-) and losses | 3\u00a0218 | 336 | 263 | -30 | \u2014 | 3\u00a0786 |
As at 31 December 2022 | 748\u00a0070 | 2\u00a0529\u00a0033 | 103\u00a0682 | 6\u00a0531 | \u2014 | 3\u00a0387\u00a0317 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and \u2018Property, plant and equipment\u2019.
\u00b2 In 2021 and 2022, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets').
Accumulated depreciation and impairment | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
in thousands of \u20ac | ||||||||
As at 1 January 2021 | 17\u00a0201 | 22\u00a0219 | 1\u00a0055 | 7\u00a0026 | 9\u00a0852 | 590 | 155 | 58\u00a0097 |
Charge for the year | 1\u00a0381 | 10\u00a0211 | 979 | 5\u00a0169 | 5\u00a0950 | 433 | 88 | 24\u00a0210 |
Ending contracts | -273 | -2\u00a0418 | -75 | -2\u00a0520 | -3\u00a0291 | \u2014 | -15 | -8\u00a0592 |
Transfers \u00b9 | \u2014 | \u2014 | \u2014 | \u2014 | -78 | \u2014 | \u2014 | -78 |
Exchange gains (-) and losses | 1\u00a0968 | 1\u00a0066 | 12 | 162 | 152 | 49 | 10 | 3\u00a0418 |
As at 31 December 2021 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
As at 1 January 2022 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
Charge for the year | 1\u00a0494 | 11\u00a0033 | 1\u00a0031 | 6\u00a0627 | 5\u00a0984 | 554 | 126 | 26\u00a0849 |
Impairment losses | \u2014 | \u2014 | \u2014 | \u2014 | 112 | \u2014 | \u2014 | 112 |
Reversal impairment losses and depreciations | \u2014 | -161 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -161 |
Ending contracts | -14 | -14\u00a0264 | -394 | -4\u00a0252 | -5\u00a0431 | -201 | -132 | -24\u00a0688 |
Transfers \u00b9 | \u2014 | \u2014 | -31 | \u2014 | -21 | \u2014 | \u2014 | -53 |
Exchange gains (-) and losses | -273 | -311 | 52 | 180 | 42 | 16 | -6 | -300 |
As at 31 December 2022 | 21\u00a0484 | 27\u00a0374 | 2\u00a0628 | 12\u00a0392 | 13\u00a0270 | 1\u00a0440 | 227 | 78\u00a0816 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment') and 'Right-of-use property, plant and equipment'.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 101\u00a0330 | 157\u00a0005 |
Increase or decrease | 51\u00a0532 | -11\u00a0312 |
Write-downs (-) and write-down reversals | 158 | 1\u00a0134 |
New consolidations | \u2014 | 197 |
Exchange gains and losses | 3\u00a0985 | 4\u00a0402 |
As at 31 December | 157\u00a0005 | 151\u00a0426 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other amounts payable | 9\u00a0122 | 14\u00a0362 |
Derivatives (cf. note 7.2.) | 2\u00a0324 | 1\u00a0548 |
Advances received | 24\u00a0354 | 24\u00a0097 |
Other taxes | 24\u00a0127 | 36\u00a0940 |
Accruals and deferred income | 8\u00a0322 | 11\u00a0171 |
Total | 68\u00a0249 | 88\u00a0118 |
The increase in 2022 of Other amounts payable was mainly due to higher outstanding dividend payable and payable relating to tax consolidation regime in Italy.
The derivatives included forward-exchange contracts (\u20ac\u00a01.3\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.7\u00a0million)) and CCIRSs (\u20ac\u00a00.2\u00a0million\u00a0(2021:\u00a0\u20ac\u00a01.7\u00a0million)).
Advances received mainly related to the project business of Bridon-Bekaert Ropes Group (BBRG) and advance payments from the Brazilian joint ventures on equipment orders at Engineering.
The table below provides an overview of the tax receivables, tax payables and uncertain tax positions recognized at balance sheet closing date. The tax receivables and payables include both current income taxes, VAT and other taxes.
in thousands of \u20ac | 2021 | 2022 |
Tax receivables | 113\u00a0568 | 126\u00a0694 |
Certain tax liabilities | 71\u00a0376 | 59\u00a0292 |
Uncertain tax positions | 38\u00a0882 | 43\u00a0828 |
Transforming steel wire and applying unique coating technologies form our core business. Depending on our customers\u2019 requirements, we draw wire in different diameters and strengths, even as thin as ultrafine fibers of one micron. We group the wires into cords, ropes and strands, weave or knit them into fabric, or process them into an end product. The coatings we apply reduce friction, improve corrosion resistance, or enhance adhesion with other materials. We also develop products and solutions that are made of other metals and materials. This is part of our strategy to drive creativity beyond steel.
Bekaert uses a business segmentation to evaluate the nature and financial performance of the business as a whole, in line with the way financial performance is reported to the chief operating decision maker (Bekaert Group Executive (BGE)). The Group\u2019s business units (BU) are characterized by BU-specific product and market profiles, industry trends, cost drivers, and technology needs tailored to specific industry requirements. More information on the segments can be found in the part \u2018About us\u2019 of this report.
The following four business units are presented:
1.Rubber Reinforcement (RR): 39% of consolidated third party sales (2021: 42%)
2.Steel Wire Solutions (SWS): 37% of consolidated third party sales (2021: 38%)
3.Specialty Businesses (SB): 14% of consolidated third party sales (2021: 10%)
4.Bridon-Bekaert Ropes Group (BBRG): 10% of consolidated third party sales (2021: 10%)
Capital employed elements (intangible assets, goodwill, property, plant and equipment, RoU property, plant and equipment and the elements of the operating working capital) are allocated to the various segments. All other assets and liabilities are reported as unallocated assets or liabilities. \u2018Group\u2019 mainly consists of the functional units innovation & technology, engineering and unallocated expenses for group management and services; it does not constitute a reportable segment in itself. Any sales between segments are transacted at prices which reflect the arm\u2019s length principle. Intersegment mainly includes eliminations of receivables and payables, of sales and of margin on transfers of inventory items and of PP&E and related adjustments to depreciation and amortization.
No other material reporting items then the ones mentioned below are provided to the chief operating decision maker.
The table below shows the relative importance of\u00a0Belgium (i.e. the country of domicile), Chile, China, the USA and Slovakia for Bekaert in terms of revenues and selected non-current assets (i.e. intangible assets; goodwill; property, plant and equipment; RoU property, plant and equipment; investments in joint ventures and associates).
in thousands of \u20ac | 2021 | % of total | 2022 | % of total |
Consolidated third party sales | ||||
from Belgium | 372\u00a0886 | 8% | 497\u00a0830 | 9% |
from Chile | 537\u00a0994 | 11% | 531\u00a0096 | 9% |
from China | 980\u00a0016 | 20% | 847\u00a0094 | 15% |
from USA | 685\u00a0071 | 14% | 1\u00a0032\u00a0090 | 18% |
from Slovakia | 419\u00a0273 | 9% | 540\u00a0821 | 10% |
from other countries | 1\u00a0844\u00a0419 | 38% | 2\u00a0202\u00a0859 | 39% |
Total third party consolidated sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Selected non-current assets | ||||
in Belgium \u00b9 | 118\u00a0355 | 7% | 126\u00a0717 | 7% |
in Chile | 79\u00a0059 | 4% | 87\u00a0449 | 5% |
in China | 315\u00a0190 | 18% | 300\u00a0300 | 17% |
in USA | 151\u00a0264 | 8% | 166\u00a0967 | 9% |
in Slovakia | 125\u00a0848 | 7% | 126\u00a0725 | 7% |
in other countries | 992\u00a0874 | 56% | 997\u00a0235 | 55% |
Total selected non-current assets \u00b9 | 1\u00a0782\u00a0591 | 100% | 1\u00a0805\u00a0393 | 100% |
Capital employed elements (intangible assets, goodwill, property, plant and equipment, RoU property, plant and equipment and the elements of the operating working capital) are allocated to the various segments. All other assets and liabilities are reported as unallocated assets or liabilities. \u2018Group\u2019 mainly consists of the functional units innovation & technology, engineering and unallocated expenses for group management and services; it does not constitute a reportable segment in itself. Any sales between segments are transacted at prices which reflect the arm\u2019s length principle. Intersegment mainly includes eliminations of receivables and payables, of sales and of margin on transfers of inventory items and of PP&E and related adjustments to depreciation and amortization.
No other material reporting items then the ones mentioned below are provided to the chief operating decision maker.
2021 as reported | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 245\u00a0783 | 212\u00a0860 | 71\u00a0112 | 36\u00a0263 | -54\u00a0572 | 1\u00a0640 | 513\u00a0086 |
EBIT - Underlying | 247\u00a0371 | 209\u00a0330 | 71\u00a0872 | 45\u00a0050 | -60\u00a0692 | 1\u00a0686 | 514\u00a0617 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 342\u00a0342 | 249\u00a0813 | 79\u00a0668 | 64\u00a0340 | -50\u00a0394 | -8\u00a0426 | 677\u00a0342 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -35\u00a0946 | -146\u00a0702 | 3\u00a0531\u00a0190 |
Unallocated assets | 1\u00a0312\u00a0566 | ||||||
Total assets | 4\u00a0843\u00a0756 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0487\u00a0606 | ||||||
Total liabilities | 2\u00a0743\u00a0234 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -155\u00a0590 | -72\u00a0319 | 2\u00a0275\u00a0562 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -123\u00a0646 | -74\u00a0465 | 2\u00a0169\u00a0030 |
Return on weighted average capital employed (ROCE) | 21.4% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.7% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 10\u00a0809 | -360 | 12\u00a0852 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2021 redefined \u00b3 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales \u2074 | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 247\u00a0175 | 213\u00a0012 | 71\u00a0112 | 36\u00a0336 | -58\u00a0685 | 1\u00a0640 | 510\u00a0589 |
EBIT - Underlying | 248\u00a0764 | 209\u00a0481 | 71\u00a0872 | 45\u00a0122 | -64\u00a0805 | 1\u00a0686 | 512\u00a0121 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 343\u00a0734 | 249\u00a0965 | 79\u00a0668 | 64\u00a0413 | -54\u00a0508 | -8\u00a0426 | 674\u00a0845 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -40\u00a0059 | -146\u00a0702 | 3\u00a0527\u00a0077 |
Unallocated assets | 1\u00a0312\u00a0212 | ||||||
Total assets | 4\u00a0839\u00a0288 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0485\u00a0997 | ||||||
Total liabilities | 2\u00a0741\u00a0625 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -159\u00a0703 | -72\u00a0319 | 2\u00a0271\u00a0449 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -125\u00a0703 | -74\u00a0465 | 2\u00a0166\u00a0973 |
Return on weighted average capital employed (ROCE) | 21.5% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.6% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 6\u00a0695 | -360 | 8\u00a0739 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2022 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0197\u00a0607 | 2\u00a0081\u00a0592 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | \u2014 | 5\u00a0651\u00a0790 |
Consolidated sales | 2\u00a0228\u00a0682 | 2\u00a0137\u00a0571 | 788\u00a0242 | 588\u00a0819 | 118\u00a0857 | -210\u00a0380 | 5\u00a0651\u00a0790 |
Operating result (EBIT) | 110\u00a0776 | 146\u00a0563 | 130\u00a0986 | 38\u00a0744 | -67\u00a0234 | 5\u00a0918 | 365\u00a0754 |
EBIT - Underlying | 178\u00a0665 | 148\u00a0083 | 131\u00a0766 | 60\u00a0418 | -61\u00a0552 | 1\u00a0183 | 458\u00a0563 |
Depreciation and amortization \u00b2 | 91\u00a0038 | 48\u00a0666 | 22\u00a0171 | 42\u00a0745 | 7\u00a0881 | -9\u00a0706 | 202\u00a0795 |
Impairment losses | 59\u00a0050 | 830 | 120 | 2\u00a0669 | \u2014 | -4\u00a0735 | 57\u00a0934 |
EBITDA | 260\u00a0865 | 196\u00a0059 | 153\u00a0277 | 84\u00a0158 | -59\u00a0353 | -8\u00a0522 | 626\u00a0483 |
Segment assets | 1\u00a0495\u00a0373 | 1\u00a0114\u00a0525 | 470\u00a0005 | 628\u00a0577 | -54\u00a0894 | -141\u00a0886 | 3\u00a0511\u00a0700 |
Unallocated assets | 1\u00a0317\u00a0613 | ||||||
Total assets | 4\u00a0829\u00a0313 | ||||||
Segment liabilities | 376\u00a0208 | 387\u00a0217 | 142\u00a0568 | 137\u00a0694 | 109\u00a0613 | -74\u00a0980 | 1\u00a0078\u00a0320 |
Unallocated liabilities | 1\u00a0521\u00a0437 | ||||||
Total liabilities | 2\u00a0599\u00a0757 | ||||||
Capital employed | 1\u00a0119\u00a0165 | 727\u00a0308 | 327\u00a0437 | 490\u00a0883 | -164\u00a0508 | -66\u00a0906 | 2\u00a0433\u00a0380 |
Weighted average capital employed | 1\u00a0146\u00a0926 | 675\u00a0960 | 295\u00a0100 | 467\u00a0986 | -161\u00a0860 | -69\u00a0776 | 2\u00a0354\u00a0337 |
Return on weighted average capital employed (ROCE) | 9.7% | 21.7% | 44.4% | 8.3% | \u2014 | \u2014 | 15.5% |
Capital expenditure \u2013 PP&E | 74\u00a0823 | 45\u00a0714 | 23\u00a0648 | 33\u00a0740 | 3\u00a0171 | -10\u00a0493 | 170\u00a0603 |
Capital expenditure \u2013 intangible assets | 397 | 128 | 459 | 4 | 14\u00a0260 | -311 | 14\u00a0937 |
Share in the results of joint ventures and associates | -217 | 54\u00a0481 | \u2014 | \u2014 | -7 | \u2014 | 54\u00a0257 |
Investments in joint ventures and associates | 54\u00a0880 | 167\u00a0749 | \u2014 | \u2014 | -744 | \u2014 | 221\u00a0886 |
Number of employees (year-end) \u00b9 | 11\u00a0491 | 6\u00a0310 | 2\u00a0133 | 2\u00a0421 | 1\u00a0196 | \u2014 | 23\u00a0551 |
\u00b9 Number of employees: full-time equivalents.
\u00b2 Depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables.
\u00b3 See note 2.8. 'Restatement effects'.
2021 as reported | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 245\u00a0783 | 212\u00a0860 | 71\u00a0112 | 36\u00a0263 | -54\u00a0572 | 1\u00a0640 | 513\u00a0086 |
EBIT - Underlying | 247\u00a0371 | 209\u00a0330 | 71\u00a0872 | 45\u00a0050 | -60\u00a0692 | 1\u00a0686 | 514\u00a0617 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 342\u00a0342 | 249\u00a0813 | 79\u00a0668 | 64\u00a0340 | -50\u00a0394 | -8\u00a0426 | 677\u00a0342 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -35\u00a0946 | -146\u00a0702 | 3\u00a0531\u00a0190 |
Unallocated assets | 1\u00a0312\u00a0566 | ||||||
Total assets | 4\u00a0843\u00a0756 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0487\u00a0606 | ||||||
Total liabilities | 2\u00a0743\u00a0234 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -155\u00a0590 | -72\u00a0319 | 2\u00a0275\u00a0562 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -123\u00a0646 | -74\u00a0465 | 2\u00a0169\u00a0030 |
Return on weighted average capital employed (ROCE) | 21.4% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.7% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 10\u00a0809 | -360 | 12\u00a0852 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2021 redefined \u00b3 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales \u2074 | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 247\u00a0175 | 213\u00a0012 | 71\u00a0112 | 36\u00a0336 | -58\u00a0685 | 1\u00a0640 | 510\u00a0589 |
EBIT - Underlying | 248\u00a0764 | 209\u00a0481 | 71\u00a0872 | 45\u00a0122 | -64\u00a0805 | 1\u00a0686 | 512\u00a0121 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 343\u00a0734 | 249\u00a0965 | 79\u00a0668 | 64\u00a0413 | -54\u00a0508 | -8\u00a0426 | 674\u00a0845 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -40\u00a0059 | -146\u00a0702 | 3\u00a0527\u00a0077 |
Unallocated assets | 1\u00a0312\u00a0212 | ||||||
Total assets | 4\u00a0839\u00a0288 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0485\u00a0997 | ||||||
Total liabilities | 2\u00a0741\u00a0625 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -159\u00a0703 | -72\u00a0319 | 2\u00a0271\u00a0449 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -125\u00a0703 | -74\u00a0465 | 2\u00a0166\u00a0973 |
Return on weighted average capital employed (ROCE) | 21.5% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.6% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 6\u00a0695 | -360 | 8\u00a0739 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2022 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0197\u00a0607 | 2\u00a0081\u00a0592 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | \u2014 | 5\u00a0651\u00a0790 |
Consolidated sales | 2\u00a0228\u00a0682 | 2\u00a0137\u00a0571 | 788\u00a0242 | 588\u00a0819 | 118\u00a0857 | -210\u00a0380 | 5\u00a0651\u00a0790 |
Operating result (EBIT) | 110\u00a0776 | 146\u00a0563 | 130\u00a0986 | 38\u00a0744 | -67\u00a0234 | 5\u00a0918 | 365\u00a0754 |
EBIT - Underlying | 178\u00a0665 | 148\u00a0083 | 131\u00a0766 | 60\u00a0418 | -61\u00a0552 | 1\u00a0183 | 458\u00a0563 |
Depreciation and amortization \u00b2 | 91\u00a0038 | 48\u00a0666 | 22\u00a0171 | 42\u00a0745 | 7\u00a0881 | -9\u00a0706 | 202\u00a0795 |
Impairment losses | 59\u00a0050 | 830 | 120 | 2\u00a0669 | \u2014 | -4\u00a0735 | 57\u00a0934 |
EBITDA | 260\u00a0865 | 196\u00a0059 | 153\u00a0277 | 84\u00a0158 | -59\u00a0353 | -8\u00a0522 | 626\u00a0483 |
Segment assets | 1\u00a0495\u00a0373 | 1\u00a0114\u00a0525 | 470\u00a0005 | 628\u00a0577 | -54\u00a0894 | -141\u00a0886 | 3\u00a0511\u00a0700 |
Unallocated assets | 1\u00a0317\u00a0613 | ||||||
Total assets | 4\u00a0829\u00a0313 | ||||||
Segment liabilities | 376\u00a0208 | 387\u00a0217 | 142\u00a0568 | 137\u00a0694 | 109\u00a0613 | -74\u00a0980 | 1\u00a0078\u00a0320 |
Unallocated liabilities | 1\u00a0521\u00a0437 | ||||||
Total liabilities | 2\u00a0599\u00a0757 | ||||||
Capital employed | 1\u00a0119\u00a0165 | 727\u00a0308 | 327\u00a0437 | 490\u00a0883 | -164\u00a0508 | -66\u00a0906 | 2\u00a0433\u00a0380 |
Weighted average capital employed | 1\u00a0146\u00a0926 | 675\u00a0960 | 295\u00a0100 | 467\u00a0986 | -161\u00a0860 | -69\u00a0776 | 2\u00a0354\u00a0337 |
Return on weighted average capital employed (ROCE) | 9.7% | 21.7% | 44.4% | 8.3% | \u2014 | \u2014 | 15.5% |
Capital expenditure \u2013 PP&E | 74\u00a0823 | 45\u00a0714 | 23\u00a0648 | 33\u00a0740 | 3\u00a0171 | -10\u00a0493 | 170\u00a0603 |
Capital expenditure \u2013 intangible assets | 397 | 128 | 459 | 4 | 14\u00a0260 | -311 | 14\u00a0937 |
Share in the results of joint ventures and associates | -217 | 54\u00a0481 | \u2014 | \u2014 | -7 | \u2014 | 54\u00a0257 |
Investments in joint ventures and associates | 54\u00a0880 | 167\u00a0749 | \u2014 | \u2014 | -744 | \u2014 | 221\u00a0886 |
Number of employees (year-end) \u00b9 | 11\u00a0491 | 6\u00a0310 | 2\u00a0133 | 2\u00a0421 | 1\u00a0196 | \u2014 | 23\u00a0551 |
\u00b9 Number of employees: full-time equivalents.
\u00b2 Depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables.
\u00b3 See note 2.8. 'Restatement effects'.
The table below shows the relative importance of\u00a0Belgium (i.e. the country of domicile), Chile, China, the USA and Slovakia for Bekaert in terms of revenues and selected non-current assets (i.e. intangible assets; goodwill; property, plant and equipment; RoU property, plant and equipment; investments in joint ventures and associates).
in thousands of \u20ac | 2021 | % of total | 2022 | % of total |
Consolidated third party sales | ||||
from Belgium | 372\u00a0886 | 8% | 497\u00a0830 | 9% |
from Chile | 537\u00a0994 | 11% | 531\u00a0096 | 9% |
from China | 980\u00a0016 | 20% | 847\u00a0094 | 15% |
from USA | 685\u00a0071 | 14% | 1\u00a0032\u00a0090 | 18% |
from Slovakia | 419\u00a0273 | 9% | 540\u00a0821 | 10% |
from other countries | 1\u00a0844\u00a0419 | 38% | 2\u00a0202\u00a0859 | 39% |
Total third party consolidated sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Selected non-current assets | ||||
in Belgium \u00b9 | 118\u00a0355 | 7% | 126\u00a0717 | 7% |
in Chile | 79\u00a0059 | 4% | 87\u00a0449 | 5% |
in China | 315\u00a0190 | 18% | 300\u00a0300 | 17% |
in USA | 151\u00a0264 | 8% | 166\u00a0967 | 9% |
in Slovakia | 125\u00a0848 | 7% | 126\u00a0725 | 7% |
in other countries | 992\u00a0874 | 56% | 997\u00a0235 | 55% |
Total selected non-current assets \u00b9 | 1\u00a0782\u00a0591 | 100% | 1\u00a0805\u00a0393 | 100% |
The Group recognizes revenue from the following sources: delivery of products and, to a limited extent, of services and projects. Bekaert assessed that the delivery of products represents the main performance obligation. The Group recognizes revenue at a point in time when it transfers control over a product to a customer. Customers obtain control when the products are delivered (based on the related inco terms in place). The amount of revenue recognized is adjusted for variable compensation such as volume discounts. No adjustment is made for returns nor for warranty as the impact is deemed immaterial based on historical information.
Disaggregating revenue by timing of revenue recognition, i.e. at a point in time vs over time (as is customary for engineering activities) does not add much value, as sales of machines to third parties contribute very little to total sales.
in thousands of \u20ac | 2021 | % of total | 2022 | % of total |
Sales of products | 4\u00a0836\u00a0089 | 99.9% | 5\u00a0641\u00a0267 | 99.8% |
Sales of machines by engineering | 3\u00a0449 | 0.1% | 10\u00a0202 | 0.2% |
Other sales | 122 | 0.0% | 321 | 0.0% |
Net sales | 4\u00a0839\u00a0659 | 100.0% | 5\u00a0651\u00a0790 | 100.0% |
2021 | ||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Consolidated |
Industry | ||||||
Tire & Automotive | 1\u00a0932\u00a0457 | 168\u00a0775 | 34\u00a0114 | 8\u00a0538 | \u2014 | 2\u00a0143\u00a0884 |
Energy & Utilities | 236 | 233\u00a0581 | 23\u00a0343 | 82\u00a0404 | \u2014 | 339\u00a0563 |
Construction | 11 | 568\u00a0665 | 349\u00a0639 | 68\u00a0914 | \u2014 | 987\u00a0229 |
Consumer Goods | \u2014 | 135\u00a0793 | 4\u00a0335 | \u2014 | \u2014 | 140\u00a0128 |
Agriculture | \u2014 | 310\u00a0871 | \u2014 | 40\u00a0084 | \u2014 | 350\u00a0955 |
Equipment | 111\u00a0002 | 96\u00a0451 | 3\u00a0601 | 144\u00a0506 | 10\u00a0339 | 365\u00a0898 |
Basic Materials | 10\u00a0450 | 304\u00a0370 | 60\u00a0628 | 136\u00a0555 | \u2014 | 512\u00a0002 |
Total | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | 4\u00a0839\u00a0659 |
2022 | ||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Consolidated |
Industry | ||||||
Tire & Automotive | 2\u00a0195\u00a0338 | 135\u00a0542 | 39\u00a0170 | 9\u00a0817 | \u2014 | 2\u00a0379\u00a0867 |
Energy & Utilities | 785 | 342\u00a0535 | 30\u00a0868 | 111\u00a0371 | \u2014 | 485\u00a0559 |
Construction | \u2014 | 640\u00a0971 | 457\u00a0656 | 76\u00a0398 | \u2014 | 1\u00a0175\u00a0025 |
Consumer Goods | \u2014 | 124\u00a0880 | 4\u00a0130 | \u2014 | \u2014 | 129\u00a0010 |
Agriculture | \u2014 | 367\u00a0459 | \u2014 | 42\u00a0172 | \u2014 | 409\u00a0631 |
Equipment | \u2014 | 128\u00a0670 | 136\u00a0401 | 163\u00a0231 | 21\u00a0417 | 449\u00a0719 |
Basic Materials | 1\u00a0482 | 341\u00a0537 | 98\u00a0247 | 181\u00a0713 | \u2014 | 622\u00a0979 |
Total | 2\u00a0197\u00a0605 | 2\u00a0081\u00a0594 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | 5\u00a0651\u00a0790 |
Sales and gross profit | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Sales | 4\u00a0839\u00a0659 | 5\u00a0651\u00a0790 | 16.8% |
Cost of sales | -3\u00a0953\u00a0752 | -4\u00a0879\u00a0310 | 23.4% |
Gross profit | 885\u00a0907 | 772\u00a0479 | -12.8% |
Gross profit in % of sales | 18.3% | 13.7% |
Bekaert achieved consolidated sales of \u20ac 5.7 billion in 2022, an increase of 16.8% compared to 2021, a result of responding quickly to the economic challenges and high cost inflation with product price rises. The organic sales increase (11.8%) was driven by increased wire rod prices (10.5%) and other price-mix effects for the full year (10.1%), partially offset by a decrease in volumes (-8.8%). The currency movements were 5% positive (mainly related to movements in US dollar\u00a0and\u00a0Chinese\u00a0renminbi).
Gross profit of the Group decreased by \u20ac 113.4 million in absolute terms (-12.8%), resulting in a margin of 13.7% (2021: 18.3%). This was due to the decline in volumes in combination with high inflation and higher costs for utilities and materials. The decrease has partially been compensated by increasing product prices to the customers.
Other operating revenues | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties received | 15\u00a0209 | 18\u00a0673 | 3\u00a0464 |
Gains on disposal of PP&E and intangible assets | 8\u00a0458 | 12\u00a0340 | 3\u00a0883 |
Realized exchange results on sales and purchases | 1\u00a0237 | \u2014 | -1\u00a0237 |
Tax rebates | 429 | 26 | -403 |
Government grants | 1\u00a0039 | 2\u00a0631 | 1\u00a0592 |
Compensations received for claims | 2\u00a0855 | 2\u00a0345 | -510 |
Restructuring\u00b9 | 23\u00a0304 | 1\u00a0515 | -21\u00a0789 |
Environmental | 148 | 100 | -48 |
Other revenues\u00b2 | 11\u00a0876 | 10\u00a0217 | -1\u00a0659 |
Total | 64\u00a0556 | 47\u00a0848 | -16\u00a0709 |
\u00b9 Mainly relates to disposal of PP&E
2 See note 2.8. 'Restatement effects'
2021 as reported | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 245\u00a0783 | 212\u00a0860 | 71\u00a0112 | 36\u00a0263 | -54\u00a0572 | 1\u00a0640 | 513\u00a0086 |
EBIT - Underlying | 247\u00a0371 | 209\u00a0330 | 71\u00a0872 | 45\u00a0050 | -60\u00a0692 | 1\u00a0686 | 514\u00a0617 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 342\u00a0342 | 249\u00a0813 | 79\u00a0668 | 64\u00a0340 | -50\u00a0394 | -8\u00a0426 | 677\u00a0342 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -35\u00a0946 | -146\u00a0702 | 3\u00a0531\u00a0190 |
Unallocated assets | 1\u00a0312\u00a0566 | ||||||
Total assets | 4\u00a0843\u00a0756 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0487\u00a0606 | ||||||
Total liabilities | 2\u00a0743\u00a0234 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -155\u00a0590 | -72\u00a0319 | 2\u00a0275\u00a0562 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -123\u00a0646 | -74\u00a0465 | 2\u00a0169\u00a0030 |
Return on weighted average capital employed (ROCE) | 21.4% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.7% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 10\u00a0809 | -360 | 12\u00a0852 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2021 redefined \u00b3 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales \u2074 | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | \u2014 | 4\u00a0839\u00a0659 |
Consolidated sales | 2\u00a0090\u00a0259 | 1\u00a0856\u00a0998 | 488\u00a0129 | 483\u00a0165 | 94\u00a0227 | -173\u00a0118 | 4\u00a0839\u00a0659 |
Operating result (EBIT) | 247\u00a0175 | 213\u00a0012 | 71\u00a0112 | 36\u00a0336 | -58\u00a0685 | 1\u00a0640 | 510\u00a0589 |
EBIT - Underlying | 248\u00a0764 | 209\u00a0481 | 71\u00a0872 | 45\u00a0122 | -64\u00a0805 | 1\u00a0686 | 512\u00a0121 |
Depreciation and amortization \u00b2 | 96\u00a0480 | 38\u00a0488 | 8\u00a0511 | 28\u00a0077 | 4\u00a0284 | -10\u00a0067 | 165\u00a0774 |
Impairment losses | 79 | -1\u00a0535 | 45 | \u2014 | -107 | \u2014 | -1\u00a0518 |
EBITDA | 343\u00a0734 | 249\u00a0965 | 79\u00a0668 | 64\u00a0413 | -54\u00a0508 | -8\u00a0426 | 674\u00a0845 |
Segment assets | 1\u00a0642\u00a0685 | 1\u00a0141\u00a0109 | 350\u00a0997 | 579\u00a0047 | -40\u00a0059 | -146\u00a0702 | 3\u00a0527\u00a0077 |
Unallocated assets | 1\u00a0312\u00a0212 | ||||||
Total assets | 4\u00a0839\u00a0288 | ||||||
Segment liabilities | 436\u00a0168 | 517\u00a0914 | 120\u00a0461 | 135\u00a0824 | 119\u00a0644 | -74\u00a0383 | 1\u00a0255\u00a0628 |
Unallocated liabilities | 1\u00a0485\u00a0997 | ||||||
Total liabilities | 2\u00a0741\u00a0625 | ||||||
Capital employed | 1\u00a0206\u00a0517 | 623\u00a0195 | 230\u00a0536 | 443\u00a0223 | -159\u00a0703 | -72\u00a0319 | 2\u00a0271\u00a0449 |
Weighted average capital employed | 1\u00a0150\u00a0373 | 559\u00a0338 | 224\u00a0152 | 433\u00a0278 | -125\u00a0703 | -74\u00a0465 | 2\u00a0166\u00a0973 |
Return on weighted average capital employed (ROCE) | 21.5% | 38.1% | 31.7% | 8.4% | \u2014 | \u2014 | 23.6% |
Capital expenditure \u2013 PP&E | 58\u00a0392 | 42\u00a0907 | 17\u00a0944 | 40\u00a0160 | 1\u00a0735 | -7\u00a0835 | 153\u00a0302 |
Capital expenditure \u2013 intangible assets | 465 | 1\u00a0752 | 76 | 111 | 6\u00a0695 | -360 | 8\u00a0739 |
Share in the results of joint ventures and associates | 8\u00a0701 | 98\u00a0924 | \u2014 | \u2014 | -6 | \u2014 | 107\u00a0619 |
Investments in joint ventures and associates | 49\u00a0977 | 138\u00a0670 | \u2014 | \u2014 | 13 | \u2014 | 188\u00a0661 |
Number of employees (year-end)\u00a0\u00b9 | 12\u00a0437 | 6\u00a0121 | 1\u00a0534 | 2\u00a0287 | 1\u00a0130 | \u2014 | 23\u00a0509 |
2022 | |||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Intersegment | Consolidated |
Consolidated third party sales | 2\u00a0197\u00a0607 | 2\u00a0081\u00a0592 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | \u2014 | 5\u00a0651\u00a0790 |
Consolidated sales | 2\u00a0228\u00a0682 | 2\u00a0137\u00a0571 | 788\u00a0242 | 588\u00a0819 | 118\u00a0857 | -210\u00a0380 | 5\u00a0651\u00a0790 |
Operating result (EBIT) | 110\u00a0776 | 146\u00a0563 | 130\u00a0986 | 38\u00a0744 | -67\u00a0234 | 5\u00a0918 | 365\u00a0754 |
EBIT - Underlying | 178\u00a0665 | 148\u00a0083 | 131\u00a0766 | 60\u00a0418 | -61\u00a0552 | 1\u00a0183 | 458\u00a0563 |
Depreciation and amortization \u00b2 | 91\u00a0038 | 48\u00a0666 | 22\u00a0171 | 42\u00a0745 | 7\u00a0881 | -9\u00a0706 | 202\u00a0795 |
Impairment losses | 59\u00a0050 | 830 | 120 | 2\u00a0669 | \u2014 | -4\u00a0735 | 57\u00a0934 |
EBITDA | 260\u00a0865 | 196\u00a0059 | 153\u00a0277 | 84\u00a0158 | -59\u00a0353 | -8\u00a0522 | 626\u00a0483 |
Segment assets | 1\u00a0495\u00a0373 | 1\u00a0114\u00a0525 | 470\u00a0005 | 628\u00a0577 | -54\u00a0894 | -141\u00a0886 | 3\u00a0511\u00a0700 |
Unallocated assets | 1\u00a0317\u00a0613 | ||||||
Total assets | 4\u00a0829\u00a0313 | ||||||
Segment liabilities | 376\u00a0208 | 387\u00a0217 | 142\u00a0568 | 137\u00a0694 | 109\u00a0613 | -74\u00a0980 | 1\u00a0078\u00a0320 |
Unallocated liabilities | 1\u00a0521\u00a0437 | ||||||
Total liabilities | 2\u00a0599\u00a0757 | ||||||
Capital employed | 1\u00a0119\u00a0165 | 727\u00a0308 | 327\u00a0437 | 490\u00a0883 | -164\u00a0508 | -66\u00a0906 | 2\u00a0433\u00a0380 |
Weighted average capital employed | 1\u00a0146\u00a0926 | 675\u00a0960 | 295\u00a0100 | 467\u00a0986 | -161\u00a0860 | -69\u00a0776 | 2\u00a0354\u00a0337 |
Return on weighted average capital employed (ROCE) | 9.7% | 21.7% | 44.4% | 8.3% | \u2014 | \u2014 | 15.5% |
Capital expenditure \u2013 PP&E | 74\u00a0823 | 45\u00a0714 | 23\u00a0648 | 33\u00a0740 | 3\u00a0171 | -10\u00a0493 | 170\u00a0603 |
Capital expenditure \u2013 intangible assets | 397 | 128 | 459 | 4 | 14\u00a0260 | -311 | 14\u00a0937 |
Share in the results of joint ventures and associates | -217 | 54\u00a0481 | \u2014 | \u2014 | -7 | \u2014 | 54\u00a0257 |
Investments in joint ventures and associates | 54\u00a0880 | 167\u00a0749 | \u2014 | \u2014 | -744 | \u2014 | 221\u00a0886 |
Number of employees (year-end) \u00b9 | 11\u00a0491 | 6\u00a0310 | 2\u00a0133 | 2\u00a0421 | 1\u00a0196 | \u2014 | 23\u00a0551 |
\u00b9 Number of employees: full-time equivalents.
\u00b2 Depreciation and amortization included write-downs / (reversals of write-downs) on inventories and trade receivables.
\u00b3 See note 2.8. 'Restatement effects'.
Accumulated amortization and impairment | Licenses, patents & similar rights | Computer software | Commercial assets | Other | Total |
in thousands of \u20ac | |||||
As at 1 January 2021 | 17\u00a0510 | 79\u00a0111 | 21\u00a0194 | 15\u00a0188 | 133\u00a0003 |
Charge for the year | 1\u00a0920 | 3\u00a0573 | 3\u00a0872 | 30 | 9\u00a0395 |
Disposals and retirements | -100 | -7\u00a0143 | -1\u00a0169 | -1\u00a0649 | -10\u00a0062 |
Exchange gains (-) and losses | 11 | 1\u00a0575 | 1\u00a0616 | 1\u00a0184 | 4\u00a0386 |
As at 31 December 2021 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
As at 1 January 2022 | 19\u00a0341 | 77\u00a0116 | 25\u00a0514 | 14\u00a0752 | 136\u00a0723 |
Charge for the year | 1\u00a0989 | 3\u00a0722 | 4\u00a0162 | 409 | 10\u00a0282 |
Impairment losses | \u2014 | 214 | \u2014 | \u2014 | 214 |
Disposals and retirements | \u2014 | -50 | \u2014 | \u2014 | -50 |
Transfers \u00b9 | \u2014 | -32 | \u2014 | \u2014 | -32 |
Exchange gains (-) and losses | -26 | 711 | -796 | -752 | -863 |
As at 31 December 2022 | 21\u00a0303 | 81\u00a0681 | 28\u00a0880 | 14\u00a0409 | 146\u00a0274 |
Carry amount as at 31 December 2021 | 7\u00a0965 | 16\u00a0160 | 33\u00a0202 | \u2014 | 57\u00a0327 |
Carry amount as at 31 December 2022 | 5\u00a0860 | 26\u00a0601 | 27\u00a0718 | 1\u00a0971 | 62\u00a0149 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment' and 6.4. 'Right-of-use (RoU) property, plant and equipment').
Accumulated depreciation and impairment | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
in thousands of \u20ac | ||||||
As at 1 January 2021 | 634\u00a0755 | 2\u00a0207\u00a0291 | 92\u00a0087 | 5\u00a0246 | \u2014 | 2\u00a0939\u00a0379 |
Charge for the year | 41\u00a0600 | 101\u00a0370 | 7\u00a0704 | 755 | \u2014 | 151\u00a0429 |
Impairment losses | \u2014 | 1\u00a0077 | 158 | 9 | \u2014 | 1\u00a0244 |
Reversal impairment losses and depreciations | \u2014 | -2\u00a0760 | -2 | \u2014 | \u2014 | -2\u00a0762 |
Disposals and retirements | -19\u00a0345 | -49\u00a0080 | -3\u00a0591 | -208 | \u2014 | -72\u00a0225 |
Transfers \u00b9 | \u2014 | \u2014 | 78 | \u2014 | \u2014 | 78 |
Reclassification to (-) / from held for sale \u00b2 | -744 | -148 | \u2014 | -89 | \u2014 | -981 |
Exchange gains (-) and losses | 37\u00a0566 | 137\u00a0913 | 4\u00a0046 | 85 | \u2014 | 179\u00a0611 |
As at 31 December 2021 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
As at 1 January 2022 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
Charge for the year | 44\u00a0719 | 102\u00a0714 | 7\u00a0067 | 789 | \u2014 | 155\u00a0289 |
Impairment losses | 9\u00a0541 | 48\u00a0346 | 119 | \u2014 | \u2014 | 58\u00a0006 |
Reversal impairment losses and depreciations | \u2014 | -231 | \u2014 | \u2014 | \u2014 | -231 |
Disposals and retirements | -3\u00a0240 | -18\u00a0005 | -4\u00a0267 | -115 | \u2014 | -25\u00a0627 |
Transfers \u00b9 | \u2014 | 63 | 21 | \u2014 | \u2014 | 84 |
Reclassification to (-) / from held for sale \u00b2 | \u2014 | 148 | \u2014 | 89 | \u2014 | 237 |
Exchange gains (-) and losses | 3\u00a0218 | 336 | 263 | -30 | \u2014 | 3\u00a0786 |
As at 31 December 2022 | 748\u00a0070 | 2\u00a0529\u00a0033 | 103\u00a0682 | 6\u00a0531 | \u2014 | 3\u00a0387\u00a0317 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and \u2018Property, plant and equipment\u2019.
\u00b2 In 2021 and 2022, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets').
Accumulated depreciation and impairment | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
in thousands of \u20ac | ||||||||
As at 1 January 2021 | 17\u00a0201 | 22\u00a0219 | 1\u00a0055 | 7\u00a0026 | 9\u00a0852 | 590 | 155 | 58\u00a0097 |
Charge for the year | 1\u00a0381 | 10\u00a0211 | 979 | 5\u00a0169 | 5\u00a0950 | 433 | 88 | 24\u00a0210 |
Ending contracts | -273 | -2\u00a0418 | -75 | -2\u00a0520 | -3\u00a0291 | \u2014 | -15 | -8\u00a0592 |
Transfers \u00b9 | \u2014 | \u2014 | \u2014 | \u2014 | -78 | \u2014 | \u2014 | -78 |
Exchange gains (-) and losses | 1\u00a0968 | 1\u00a0066 | 12 | 162 | 152 | 49 | 10 | 3\u00a0418 |
As at 31 December 2021 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
As at 1 January 2022 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
Charge for the year | 1\u00a0494 | 11\u00a0033 | 1\u00a0031 | 6\u00a0627 | 5\u00a0984 | 554 | 126 | 26\u00a0849 |
Impairment losses | \u2014 | \u2014 | \u2014 | \u2014 | 112 | \u2014 | \u2014 | 112 |
Reversal impairment losses and depreciations | \u2014 | -161 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -161 |
Ending contracts | -14 | -14\u00a0264 | -394 | -4\u00a0252 | -5\u00a0431 | -201 | -132 | -24\u00a0688 |
Transfers \u00b9 | \u2014 | \u2014 | -31 | \u2014 | -21 | \u2014 | \u2014 | -53 |
Exchange gains (-) and losses | -273 | -311 | 52 | 180 | 42 | 16 | -6 | -300 |
As at 31 December 2022 | 21\u00a0484 | 27\u00a0374 | 2\u00a0628 | 12\u00a0392 | 13\u00a0270 | 1\u00a0440 | 227 | 78\u00a0816 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment') and 'Right-of-use property, plant and equipment'.
The table below shows the relative importance of\u00a0Belgium (i.e. the country of domicile), Chile, China, the USA and Slovakia for Bekaert in terms of revenues and selected non-current assets (i.e. intangible assets; goodwill; property, plant and equipment; RoU property, plant and equipment; investments in joint ventures and associates).
in thousands of \u20ac | 2021 | % of total | 2022 | % of total |
Consolidated third party sales | ||||
from Belgium | 372\u00a0886 | 8% | 497\u00a0830 | 9% |
from Chile | 537\u00a0994 | 11% | 531\u00a0096 | 9% |
from China | 980\u00a0016 | 20% | 847\u00a0094 | 15% |
from USA | 685\u00a0071 | 14% | 1\u00a0032\u00a0090 | 18% |
from Slovakia | 419\u00a0273 | 9% | 540\u00a0821 | 10% |
from other countries | 1\u00a0844\u00a0419 | 38% | 2\u00a0202\u00a0859 | 39% |
Total third party consolidated sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Selected non-current assets | ||||
in Belgium \u00b9 | 118\u00a0355 | 7% | 126\u00a0717 | 7% |
in Chile | 79\u00a0059 | 4% | 87\u00a0449 | 5% |
in China | 315\u00a0190 | 18% | 300\u00a0300 | 17% |
in USA | 151\u00a0264 | 8% | 166\u00a0967 | 9% |
in Slovakia | 125\u00a0848 | 7% | 126\u00a0725 | 7% |
in other countries | 992\u00a0874 | 56% | 997\u00a0235 | 55% |
Total selected non-current assets \u00b9 | 1\u00a0782\u00a0591 | 100% | 1\u00a0805\u00a0393 | 100% |
2021 | ||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Consolidated |
Industry | ||||||
Tire & Automotive | 1\u00a0932\u00a0457 | 168\u00a0775 | 34\u00a0114 | 8\u00a0538 | \u2014 | 2\u00a0143\u00a0884 |
Energy & Utilities | 236 | 233\u00a0581 | 23\u00a0343 | 82\u00a0404 | \u2014 | 339\u00a0563 |
Construction | 11 | 568\u00a0665 | 349\u00a0639 | 68\u00a0914 | \u2014 | 987\u00a0229 |
Consumer Goods | \u2014 | 135\u00a0793 | 4\u00a0335 | \u2014 | \u2014 | 140\u00a0128 |
Agriculture | \u2014 | 310\u00a0871 | \u2014 | 40\u00a0084 | \u2014 | 350\u00a0955 |
Equipment | 111\u00a0002 | 96\u00a0451 | 3\u00a0601 | 144\u00a0506 | 10\u00a0339 | 365\u00a0898 |
Basic Materials | 10\u00a0450 | 304\u00a0370 | 60\u00a0628 | 136\u00a0555 | \u2014 | 512\u00a0002 |
Total | 2\u00a0054\u00a0155 | 1\u00a0818\u00a0504 | 475\u00a0661 | 481\u00a0000 | 10\u00a0339 | 4\u00a0839\u00a0659 |
2022 | ||||||
in thousands of \u20ac | Rubber Reinforcement | Steel Wire | Specialty Businesses | BBRG | Group | Consolidated |
Industry | ||||||
Tire & Automotive | 2\u00a0195\u00a0338 | 135\u00a0542 | 39\u00a0170 | 9\u00a0817 | \u2014 | 2\u00a0379\u00a0867 |
Energy & Utilities | 785 | 342\u00a0535 | 30\u00a0868 | 111\u00a0371 | \u2014 | 485\u00a0559 |
Construction | \u2014 | 640\u00a0971 | 457\u00a0656 | 76\u00a0398 | \u2014 | 1\u00a0175\u00a0025 |
Consumer Goods | \u2014 | 124\u00a0880 | 4\u00a0130 | \u2014 | \u2014 | 129\u00a0010 |
Agriculture | \u2014 | 367\u00a0459 | \u2014 | 42\u00a0172 | \u2014 | 409\u00a0631 |
Equipment | \u2014 | 128\u00a0670 | 136\u00a0401 | 163\u00a0231 | 21\u00a0417 | 449\u00a0719 |
Basic Materials | 1\u00a0482 | 341\u00a0537 | 98\u00a0247 | 181\u00a0713 | \u2014 | 622\u00a0979 |
Total | 2\u00a0197\u00a0605 | 2\u00a0081\u00a0594 | 766\u00a0472 | 584\u00a0702 | 21\u00a0417 | 5\u00a0651\u00a0790 |
Sales and gross profit | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Sales | 4\u00a0839\u00a0659 | 5\u00a0651\u00a0790 | 16.8% |
Cost of sales | -3\u00a0953\u00a0752 | -4\u00a0879\u00a0310 | 23.4% |
Gross profit | 885\u00a0907 | 772\u00a0479 | -12.8% |
Gross profit in % of sales | 18.3% | 13.7% |
Bekaert achieved consolidated sales of \u20ac 5.7 billion in 2022, an increase of 16.8% compared to 2021, a result of responding quickly to the economic challenges and high cost inflation with product price rises. The organic sales increase (11.8%) was driven by increased wire rod prices (10.5%) and other price-mix effects for the full year (10.1%), partially offset by a decrease in volumes (-8.8%). The currency movements were 5% positive (mainly related to movements in US dollar\u00a0and\u00a0Chinese\u00a0renminbi).
Gross profit of the Group decreased by \u20ac 113.4 million in absolute terms (-12.8%), resulting in a margin of 13.7% (2021: 18.3%). This was due to the decline in volumes in combination with high inflation and higher costs for utilities and materials. The decrease has partially been compensated by increasing product prices to the customers.
Overheads | |||
in thousands of \u20ac | 2021 | 2022 | variance (%) |
Selling expenses | -186\u00a0239 | -205\u00a0938 | 10.6% |
Administrative expenses\u00b9 | -165\u00a0204 | -160\u00a0472 | -2.9% |
Research and development expenses | -59\u00a0537 | -62\u00a0315 | 4.7% |
Total | -410\u00a0980 | -428\u00a0725 | 4.3% |
\u00b9 See note 2.8 'Restatement effects'
Other operating expenses | |||
in thousands of \u20ac | 2021 | 2022 | variance |
Royalties paid | -1\u00a0012 | -951 | 62 |
Losses on disposal of PP&E and intangible assets | -1\u00a0375 | -760 | 615 |
Amortization of intangible assets | -1\u00a0512 | -1\u00a0500 | 12 |
Bank charges | -2\u00a0776 | -3\u00a0660 | -884 |
Tax related expenses (other than income taxes) | -2\u00a0639 | -3\u00a0841 | -1\u00a0202 |
Impairment losses | -278 | -857 | -579 |
Restructuring | -12\u00a0379 | -5\u00a0932 | 6\u00a0447 |
Environmental | -37 | -1\u00a0225 | -1\u00a0187 |
Losses on business disposals | -170 | -210 | -40 |
Other expenses | -6\u00a0716 | -6\u00a0912 | -196 |
Total | -28\u00a0894 | -25\u00a0848 | 3\u00a0046 |
The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature.
in thousands of \u20ac | 2021 | % on sales | 2022 | % on sales |
Sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Other operating revenues\u00b9 | 64\u00a0556 | \u2014 | 47\u00a0848 | \u2014 |
Total operating revenues | 4\u00a0904\u00a0215 | \u2014 | 5\u00a0699\u00a0637 | \u2014 |
Own construction of PP&E | 31\u00a0872 | 0.7% | 47\u00a0175 | 0.8% |
Raw materials | -1\u00a0995\u00a0508 | -41.2% | -2\u00a0362\u00a0439 | -41.8% |
Semi-finished products and goods for resale | -523\u00a0793 | -10.8% | -529\u00a0817 | -9.4% |
Change in work-in-progress and finished goods | 277\u00a0348 | 5.7% | 20\u00a0192 | 0.4% |
Staff costs | -840\u00a0348 | -17.4% | -869\u00a0955 | -15.4% |
Depreciation and amortization | -166\u00a0905 | -3.4% | -202\u00a0795 | -3.6% |
Impairment losses | 1\u00a0518 | 0.0% | -57\u00a0934 | -1.0% |
Transport and handling of finished goods | -249\u00a0476 | -5.2% | -303\u00a0486 | -5.4% |
Consumables and spare parts | -273\u00a0318 | -5.6% | -314\u00a0986 | -5.6% |
Utilities | -264\u00a0128 | -5.5% | -348\u00a0113 | -6.2% |
Maintenance and repairs | -66\u00a0054 | -1.4% | -77\u00a0908 | -1.4% |
Lease and related expenses | -9\u00a0451 | -0.2% | -38\u00a0129 | -0.7% |
Commissions in selling expenses | -8\u00a0008 | -0.2% | -8\u00a0739 | -0.2% |
Export VAT and export customs duty | -12\u00a0760 | -0.3% | -16\u00a0350 | -0.3% |
ICT costs\u00b9 | -44\u00a0148 | -0.9% | -59\u00a0960 | -1.1% |
Advertising and sales promotion | -6\u00a0444 | -0.1% | -7\u00a0655 | -0.1% |
Travel, restaurant & hotel | -8\u00a0605 | -0.2% | -15\u00a0810 | -0.3% |
Consulting and other fees | -40\u00a0314 | -0.8% | -42\u00a0284 | -0.7% |
Office supplies and equipment | -8\u00a0472 | -0.2% | -10\u00a0331 | -0.2% |
Venture capital funds R&D | -1\u00a0447 | 0.0% | -1\u00a0297 | 0.0% |
Temporary or external labor | -36\u00a0238 | -0.7% | -40\u00a0910 | -0.7% |
Insurance expenses | -15\u00a0427 | -0.3% | -17\u00a0689 | -0.3% |
Miscellaneous | -133\u00a0520 | -2.8% | -74\u00a0664 | -1.3% |
Total operating expenses\u00b9 | -4\u00a0393\u00a0626 | -90.8% | -5\u00a0333\u00a0884 | -94.4% |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 10.6% | 365\u00a0754 | 6.5% |
\u00b9 See note 2.8 'Restatement effects'
The table below provides information on the major items contributing to the operating result (EBIT), categorized by nature.
in thousands of \u20ac | 2021 | % on sales | 2022 | % on sales |
Sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Other operating revenues\u00b9 | 64\u00a0556 | \u2014 | 47\u00a0848 | \u2014 |
Total operating revenues | 4\u00a0904\u00a0215 | \u2014 | 5\u00a0699\u00a0637 | \u2014 |
Own construction of PP&E | 31\u00a0872 | 0.7% | 47\u00a0175 | 0.8% |
Raw materials | -1\u00a0995\u00a0508 | -41.2% | -2\u00a0362\u00a0439 | -41.8% |
Semi-finished products and goods for resale | -523\u00a0793 | -10.8% | -529\u00a0817 | -9.4% |
Change in work-in-progress and finished goods | 277\u00a0348 | 5.7% | 20\u00a0192 | 0.4% |
Staff costs | -840\u00a0348 | -17.4% | -869\u00a0955 | -15.4% |
Depreciation and amortization | -166\u00a0905 | -3.4% | -202\u00a0795 | -3.6% |
Impairment losses | 1\u00a0518 | 0.0% | -57\u00a0934 | -1.0% |
Transport and handling of finished goods | -249\u00a0476 | -5.2% | -303\u00a0486 | -5.4% |
Consumables and spare parts | -273\u00a0318 | -5.6% | -314\u00a0986 | -5.6% |
Utilities | -264\u00a0128 | -5.5% | -348\u00a0113 | -6.2% |
Maintenance and repairs | -66\u00a0054 | -1.4% | -77\u00a0908 | -1.4% |
Lease and related expenses | -9\u00a0451 | -0.2% | -38\u00a0129 | -0.7% |
Commissions in selling expenses | -8\u00a0008 | -0.2% | -8\u00a0739 | -0.2% |
Export VAT and export customs duty | -12\u00a0760 | -0.3% | -16\u00a0350 | -0.3% |
ICT costs\u00b9 | -44\u00a0148 | -0.9% | -59\u00a0960 | -1.1% |
Advertising and sales promotion | -6\u00a0444 | -0.1% | -7\u00a0655 | -0.1% |
Travel, restaurant & hotel | -8\u00a0605 | -0.2% | -15\u00a0810 | -0.3% |
Consulting and other fees | -40\u00a0314 | -0.8% | -42\u00a0284 | -0.7% |
Office supplies and equipment | -8\u00a0472 | -0.2% | -10\u00a0331 | -0.2% |
Venture capital funds R&D | -1\u00a0447 | 0.0% | -1\u00a0297 | 0.0% |
Temporary or external labor | -36\u00a0238 | -0.7% | -40\u00a0910 | -0.7% |
Insurance expenses | -15\u00a0427 | -0.3% | -17\u00a0689 | -0.3% |
Miscellaneous | -133\u00a0520 | -2.8% | -74\u00a0664 | -1.3% |
Total operating expenses\u00b9 | -4\u00a0393\u00a0626 | -90.8% | -5\u00a0333\u00a0884 | -94.4% |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 10.6% | 365\u00a0754 | 6.5% |
\u00b9 See note 2.8 'Restatement effects'
in thousands of \u20ac | 2021 | % on sales | 2022 | % on sales |
Sales | 4\u00a0839\u00a0659 | 100% | 5\u00a0651\u00a0790 | 100% |
Other operating revenues\u00b9 | 64\u00a0556 | \u2014 | 47\u00a0848 | \u2014 |
Total operating revenues | 4\u00a0904\u00a0215 | \u2014 | 5\u00a0699\u00a0637 | \u2014 |
Own construction of PP&E | 31\u00a0872 | 0.7% | 47\u00a0175 | 0.8% |
Raw materials | -1\u00a0995\u00a0508 | -41.2% | -2\u00a0362\u00a0439 | -41.8% |
Semi-finished products and goods for resale | -523\u00a0793 | -10.8% | -529\u00a0817 | -9.4% |
Change in work-in-progress and finished goods | 277\u00a0348 | 5.7% | 20\u00a0192 | 0.4% |
Staff costs | -840\u00a0348 | -17.4% | -869\u00a0955 | -15.4% |
Depreciation and amortization | -166\u00a0905 | -3.4% | -202\u00a0795 | -3.6% |
Impairment losses | 1\u00a0518 | 0.0% | -57\u00a0934 | -1.0% |
Transport and handling of finished goods | -249\u00a0476 | -5.2% | -303\u00a0486 | -5.4% |
Consumables and spare parts | -273\u00a0318 | -5.6% | -314\u00a0986 | -5.6% |
Utilities | -264\u00a0128 | -5.5% | -348\u00a0113 | -6.2% |
Maintenance and repairs | -66\u00a0054 | -1.4% | -77\u00a0908 | -1.4% |
Lease and related expenses | -9\u00a0451 | -0.2% | -38\u00a0129 | -0.7% |
Commissions in selling expenses | -8\u00a0008 | -0.2% | -8\u00a0739 | -0.2% |
Export VAT and export customs duty | -12\u00a0760 | -0.3% | -16\u00a0350 | -0.3% |
ICT costs\u00b9 | -44\u00a0148 | -0.9% | -59\u00a0960 | -1.1% |
Advertising and sales promotion | -6\u00a0444 | -0.1% | -7\u00a0655 | -0.1% |
Travel, restaurant & hotel | -8\u00a0605 | -0.2% | -15\u00a0810 | -0.3% |
Consulting and other fees | -40\u00a0314 | -0.8% | -42\u00a0284 | -0.7% |
Office supplies and equipment | -8\u00a0472 | -0.2% | -10\u00a0331 | -0.2% |
Venture capital funds R&D | -1\u00a0447 | 0.0% | -1\u00a0297 | 0.0% |
Temporary or external labor | -36\u00a0238 | -0.7% | -40\u00a0910 | -0.7% |
Insurance expenses | -15\u00a0427 | -0.3% | -17\u00a0689 | -0.3% |
Miscellaneous | -133\u00a0520 | -2.8% | -74\u00a0664 | -1.3% |
Total operating expenses\u00b9 | -4\u00a0393\u00a0626 | -90.8% | -5\u00a0333\u00a0884 | -94.4% |
Operating result (EBIT)\u00b9 | 510\u00a0589 | 10.6% | 365\u00a0754 | 6.5% |
\u00b9 See note 2.8 'Restatement effects'
in thousands of \u20ac | 2021 | 2022 |
Interest income on financial assets not measured at FVTPL | 3\u00a0260 | 5\u00a0166 |
Interest income | 3\u00a0260 | 5\u00a0166 |
Interest expense on interest-bearing debt not measured at FVTPL | -39\u00a0159 | -38\u00a0624 |
Other debt-related interest expense | -3\u00a0496 | -3\u00a0391 |
Debt-related interest expense | -42\u00a0655 | -42\u00a0014 |
Interest element of discounted provisions | -1\u00a0825 | -1\u00a0423 |
Interest expense | -44\u00a0480 | -43\u00a0437 |
Total | -41\u00a0220 | -38\u00a0271 |
in thousands of \u20ac | 2021 | 2022 |
Interest income on financial assets not measured at FVTPL | 3\u00a0260 | 5\u00a0166 |
Interest income | 3\u00a0260 | 5\u00a0166 |
Interest expense on interest-bearing debt not measured at FVTPL | -39\u00a0159 | -38\u00a0624 |
Other debt-related interest expense | -3\u00a0496 | -3\u00a0391 |
Debt-related interest expense | -42\u00a0655 | -42\u00a0014 |
Interest element of discounted provisions | -1\u00a0825 | -1\u00a0423 |
Interest expense | -44\u00a0480 | -43\u00a0437 |
Total | -41\u00a0220 | -38\u00a0271 |
The interest expenses remain at the same level compared to the interest expenses of 2021. As of 2022, there are no interest expenses related the convertible bonds due to repayment of the convertible bond in 2021. The impact of the increase of interest rates is for this reason compensated.\u00a0 \u00a0
Interest expense on interest-bearing debt, not classified as at fair value through profit or loss (FVTPL), relates to all debt instruments of the Group, other than interest-rate risk mitigating derivatives entered into as economic hedges.
in thousands of \u20ac | 2021 | 2022 |
Interest income on financial assets not measured at FVTPL | 3\u00a0260 | 5\u00a0166 |
Interest income | 3\u00a0260 | 5\u00a0166 |
Interest expense on interest-bearing debt not measured at FVTPL | -39\u00a0159 | -38\u00a0624 |
Other debt-related interest expense | -3\u00a0496 | -3\u00a0391 |
Debt-related interest expense | -42\u00a0655 | -42\u00a0014 |
Interest element of discounted provisions | -1\u00a0825 | -1\u00a0423 |
Interest expense | -44\u00a0480 | -43\u00a0437 |
Total | -41\u00a0220 | -38\u00a0271 |
The interest expenses remain at the same level compared to the interest expenses of 2021. As of 2022, there are no interest expenses related the convertible bonds due to repayment of the convertible bond in 2021. The impact of the increase of interest rates is for this reason compensated.\u00a0 \u00a0
Interest expense on interest-bearing debt, not classified as at fair value through profit or loss (FVTPL), relates to all debt instruments of the Group, other than interest-rate risk mitigating derivatives entered into as economic hedges.
in thousands of \u20ac | 2021 | 2022 |
Value adjustments to derivatives | 4\u00a0987 | 6\u00a0543 |
Exchange results on hedged items | 1\u00a0570 | -14\u00a0008 |
Net impact of derivatives and hedged items | 6\u00a0557 | -7\u00a0464 |
Other exchange results | -4\u00a0315 | -735 |
Gains and losses on disposal of financial assets | 19 | 19 |
Dividends from non-consolidated equity investments | 5\u00a0088 | 2\u00a0666 |
Bank charges and taxes on financial transactions | -4\u00a0074 | -8\u00a0566 |
Impairments of other receivables | -39 | 1\u00a0261 |
Other | 1\u00a0194 | 1\u00a0494 |
Total | 4\u00a0430 | -11\u00a0325 |
Value adjustments include changes in the fair value of all derivatives, other than those designated as cash flow hedges. Exchange results on hedged items also relate to economic hedges only. The net impact of derivatives and hedged items presented here does not include any impacts recognized in other income statement elements, such as interest expense, cost of sales or other operating revenues and expenses. In 2022 value adjustments to derivatives included a fair value gain of \u20ac 13.1 million gain (\u20ac -4.4 million in 2021), however offset with a loss of \u20ac\u00a0-6.6\u00a0million (2021: gain of \u20ac 9.4 million), related to a Virtual Power Purchase Agreement (VPPA). For more details on the impact of derivatives and hedged items, see note 7.2.\u00a0Financial risk management and financial derivatives\u2019.
Other exchange results in 2022 amounted to \u20ac -0.7 million and were mainly related to the devaluation of the Turkish lira, largely offset with the positive exchange results on the Ruble, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on financial transactions included charges linked to the factoring programs (\u20ac 7.0 million) and higher taxes paid on financial transactions (\u20ac\u00a01.0\u00a0million).
In 2022, other elements related mainly to a gain of \u20ac\u00a02.7\u00a0million (\u20ac\u00a01.2\u00a0million in 2021) from the net settlements out of the VPPA. The gain is partially offset by other financial costs.
in thousands of \u20ac | 2021 | 2022 |
Value adjustments to derivatives | 4\u00a0987 | 6\u00a0543 |
Exchange results on hedged items | 1\u00a0570 | -14\u00a0008 |
Net impact of derivatives and hedged items | 6\u00a0557 | -7\u00a0464 |
Other exchange results | -4\u00a0315 | -735 |
Gains and losses on disposal of financial assets | 19 | 19 |
Dividends from non-consolidated equity investments | 5\u00a0088 | 2\u00a0666 |
Bank charges and taxes on financial transactions | -4\u00a0074 | -8\u00a0566 |
Impairments of other receivables | -39 | 1\u00a0261 |
Other | 1\u00a0194 | 1\u00a0494 |
Total | 4\u00a0430 | -11\u00a0325 |
Value adjustments include changes in the fair value of all derivatives, other than those designated as cash flow hedges. Exchange results on hedged items also relate to economic hedges only. The net impact of derivatives and hedged items presented here does not include any impacts recognized in other income statement elements, such as interest expense, cost of sales or other operating revenues and expenses. In 2022 value adjustments to derivatives included a fair value gain of \u20ac 13.1 million gain (\u20ac -4.4 million in 2021), however offset with a loss of \u20ac\u00a0-6.6\u00a0million (2021: gain of \u20ac 9.4 million), related to a Virtual Power Purchase Agreement (VPPA). For more details on the impact of derivatives and hedged items, see note 7.2.\u00a0Financial risk management and financial derivatives\u2019.
Other exchange results in 2022 amounted to \u20ac -0.7 million and were mainly related to the devaluation of the Turkish lira, largely offset with the positive exchange results on the Ruble, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on financial transactions included charges linked to the factoring programs (\u20ac 7.0 million) and higher taxes paid on financial transactions (\u20ac\u00a01.0\u00a0million).
In 2022, other elements related mainly to a gain of \u20ac\u00a02.7\u00a0million (\u20ac\u00a01.2\u00a0million in 2021) from the net settlements out of the VPPA. The gain is partially offset by other financial costs.
in thousands of \u20ac | 2021 | 2022 |
Value adjustments to derivatives | 4\u00a0987 | 6\u00a0543 |
Exchange results on hedged items | 1\u00a0570 | -14\u00a0008 |
Net impact of derivatives and hedged items | 6\u00a0557 | -7\u00a0464 |
Other exchange results | -4\u00a0315 | -735 |
Gains and losses on disposal of financial assets | 19 | 19 |
Dividends from non-consolidated equity investments | 5\u00a0088 | 2\u00a0666 |
Bank charges and taxes on financial transactions | -4\u00a0074 | -8\u00a0566 |
Impairments of other receivables | -39 | 1\u00a0261 |
Other | 1\u00a0194 | 1\u00a0494 |
Total | 4\u00a0430 | -11\u00a0325 |
Value adjustments include changes in the fair value of all derivatives, other than those designated as cash flow hedges. Exchange results on hedged items also relate to economic hedges only. The net impact of derivatives and hedged items presented here does not include any impacts recognized in other income statement elements, such as interest expense, cost of sales or other operating revenues and expenses. In 2022 value adjustments to derivatives included a fair value gain of \u20ac 13.1 million gain (\u20ac -4.4 million in 2021), however offset with a loss of \u20ac\u00a0-6.6\u00a0million (2021: gain of \u20ac 9.4 million), related to a Virtual Power Purchase Agreement (VPPA). For more details on the impact of derivatives and hedged items, see note 7.2.\u00a0Financial risk management and financial derivatives\u2019.
Other exchange results in 2022 amounted to \u20ac -0.7 million and were mainly related to the devaluation of the Turkish lira, largely offset with the positive exchange results on the Ruble, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on financial transactions included charges linked to the factoring programs (\u20ac 7.0 million) and higher taxes paid on financial transactions (\u20ac\u00a01.0\u00a0million).
In 2022, other elements related mainly to a gain of \u20ac\u00a02.7\u00a0million (\u20ac\u00a01.2\u00a0million in 2021) from the net settlements out of the VPPA. The gain is partially offset by other financial costs.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 101\u00a0330 | 157\u00a0005 |
Increase or decrease | 51\u00a0532 | -11\u00a0312 |
Write-downs (-) and write-down reversals | 158 | 1\u00a0134 |
New consolidations | \u2014 | 197 |
Exchange gains and losses | 3\u00a0985 | 4\u00a0402 |
As at 31 December | 157\u00a0005 | 151\u00a0426 |
in thousands of \u20ac | 2021 | 2022 |
Value adjustments to derivatives | 4\u00a0987 | 6\u00a0543 |
Exchange results on hedged items | 1\u00a0570 | -14\u00a0008 |
Net impact of derivatives and hedged items | 6\u00a0557 | -7\u00a0464 |
Other exchange results | -4\u00a0315 | -735 |
Gains and losses on disposal of financial assets | 19 | 19 |
Dividends from non-consolidated equity investments | 5\u00a0088 | 2\u00a0666 |
Bank charges and taxes on financial transactions | -4\u00a0074 | -8\u00a0566 |
Impairments of other receivables | -39 | 1\u00a0261 |
Other | 1\u00a0194 | 1\u00a0494 |
Total | 4\u00a0430 | -11\u00a0325 |
Other exchange results in 2022 amounted to \u20ac -0.7 million and were mainly related to the devaluation of the Turkish lira, largely offset with the positive exchange results on the Ruble, resulting in unrealized and realized FX results on working capital items and intercompany loans. The bank charges and taxes on financial transactions included charges linked to the factoring programs (\u20ac 7.0 million) and higher taxes paid on financial transactions (\u20ac\u00a01.0\u00a0million).
In 2022, other elements related mainly to a gain of \u20ac\u00a02.7\u00a0million (\u20ac\u00a01.2\u00a0million in 2021) from the net settlements out of the VPPA. The gain is partially offset by other financial costs.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 120\u00a0181 | 184\u00a0823 |
Capital increases and decreases | \u2014 | -144 |
Result for the year | 107\u00a0619 | 54\u00a0257 |
Dividends | -44\u00a0872 | -39\u00a0558 |
Exchange gains and losses | 1\u00a0891 | 18\u00a0186 |
Other comprehensive income | 3 | 27 |
As at 31 December | 184\u00a0823 | 217\u00a0590 |
For an analysis of the result for the year, please refer to note 5.7. \u2018Share in the results of joint ventures and associates\u2019.
Exchange gains and losses related mainly to the evolution of the Brazilian real versus the euro. In 2022, the Brazilian real increased significantly in value against the euro (5.6 BRL/EUR end 2022) while it remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020).
Cumulative translation adjustments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -227\u00a0823 | -137\u00a0127 |
Exchange differences on dividends declared | -2\u00a0463 | 13\u00a0250 |
Recycled to income statement - relating to disposed entities or step acquisitions | 1\u00a0270 | \u2014 |
Movements arising from exchange rate fluctuations\u00b2 | 91\u00a0888 | 30\u00a0057 |
As at 31 December | -137\u00a0127 | -93\u00a0820 |
Of which relating to entities with following functional currencies | ||
Chinese renminbi | 145\u00a0149 | 133\u00a0695 |
US dollar | 30\u00a0558 | 54\u00a0214 |
Brazilian real | -218\u00a0372 | -191\u00a0871 |
Chilean peso | -28\u00a0753 | -22\u00a0760 |
Venezuelan bolivar soberano \u00b9 | -59\u00a0691 | -59\u00a0691 |
Indian rupee | -7\u00a0625 | -10\u00a0725 |
Czech koruna | 11\u00a0291 | 12\u00a0711 |
British pound | 2\u00a0115 | -9\u00a0931 |
Russian ruble | -6\u00a0463 | -208 |
Romenian leu | -3\u00a0991 | -4\u00a0002 |
Other currencies | -1\u00a0345 | 4\u00a0748 |
\u00b9 As a consequence of the functional currency switch to the US dollar on 1 January 2019, the value related to Venezuelan bolivar soberano remains frozen
2 See note 2.8 'Restatement effects'.
in thousands of \u20ac | 2021 | 2022 |
Value adjustments to derivatives | 4\u00a0987 | 6\u00a0543 |
Exchange results on hedged items | 1\u00a0570 | -14\u00a0008 |
Net impact of derivatives and hedged items | 6\u00a0557 | -7\u00a0464 |
Other exchange results | -4\u00a0315 | -735 |
Gains and losses on disposal of financial assets | 19 | 19 |
Dividends from non-consolidated equity investments | 5\u00a0088 | 2\u00a0666 |
Bank charges and taxes on financial transactions | -4\u00a0074 | -8\u00a0566 |
Impairments of other receivables | -39 | 1\u00a0261 |
Other | 1\u00a0194 | 1\u00a0494 |
Total | 4\u00a0430 | -11\u00a0325 |
An analysis of the carrying amount of the Group\u2019s interest-bearing debt by contractual maturity is presented below:
2021 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0219 | 36\u00a0837 | 19\u00a0588 | 76\u00a0644 |
Cash guarantees received | \u2014 | 84 | 120 | 204 |
Credit institutions | 217\u00a0523 | 177\u00a0047 | \u2014 | 394\u00a0571 |
Schuldschein loans | \u2014 | 298\u00a0964 | 20\u00a0941 | 319\u00a0905 |
Bonds | \u2014 | 200\u00a0000 | 200\u00a0000 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 |
Total financial debt | 237\u00a0742 | 712\u00a0932 | 240\u00a0649 | 1\u00a0191\u00a0324 |
2022 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0002 | 36\u00a0872 | 20\u00a0331 | 77\u00a0205 |
Cash guarantees received | \u2014 | 144 | 66 | 210 |
Credit institutions | 291\u00a0989 | 146\u00a0413 | \u2014 | 438\u00a0401 |
Schuldschein loans | 188\u00a0598 | 131\u00a0582 | \u2014 | 320\u00a0179 |
Bonds | \u2014 | 400\u00a0000 | \u2014 | 400\u00a0000 |
Total financial debt | 500\u00a0588 | 715\u00a0011 | 20\u00a0397 | 1\u00a0235\u00a0996 |
An analysis of the undiscounted outflows relating to the Group\u2019s financial liabilities by contractual maturity is presented in note 7.2.\u00a0\u2018Financial risk management and financial derivatives\u2019. The financial debt due within one year increased with \u20ac 262.8 million mainly due to repayments of the Schuldschein loans which will take place in June 2023 (\u20ac 188.6 million at amortized cost per year-end 2022).
The following table summarizes the calculation of the net debt.
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 953\u00a0581 | 735\u00a0408 |
Current interest-bearing debt | 237\u00a0742 | 500\u00a0588 |
Total financial debt | 1\u00a0191\u00a0324 | 1\u00a0235\u00a0996 |
Non-current financial receivables and cash guarantees | -10\u00a0192 | -9\u00a0665 |
Current financial receivables and cash guarantees | -6\u00a0475 | -6\u00a0352 |
Short-term deposits | -80\u00a0058 | -4\u00a0766 |
Cash and cash equivalents | -677\u00a0270 | -728\u00a0095 |
Net debt | 417\u00a0329 | 487\u00a0118 |
In accordance with the disclosure requirements of IAS 7 \u2018Statement of Cash Flows\u2019, this section presents an overview of the changes in liabilities arising from financing activities. The qualification as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash flow statement, the cash flows from long-term interest-bearing debt are analyzed between proceeds and repayments.
In 2022, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 33.5 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
In 2021, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 19.6 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019), and interest accruals from amortizations on liabilities using the effective interest method (\u20ac 4.9 million). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
2021 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 1\u00a0380\u00a0866 | -416\u00a0174 | \u2014 | 3\u00a0619 | \u2014 | 24\u00a0802 | 993\u00a0114 |
Cash guarantees received | 171 | 12 | \u2014 | 20 | \u2014 | \u2014 | 204 |
Lease liability | 80\u00a0505 | -26\u00a0290 | \u2014 | 2\u00a0805 | \u2014 | 19\u00a0624 | 76\u00a0644 |
Credit institutions | 205\u00a0463 | -9\u00a0896 | \u2014 | 794 | \u2014 | \u2014 | 196\u00a0361 |
Schuldschein loans | 319\u00a0635 | \u2014 | \u2014 | \u2014 | \u2014 | 270 | 319\u00a0905 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | 375\u00a0092 | -380\u00a0000 | \u2014 | \u2014 | \u2014 | 4\u00a0908 | \u2014 |
Short-term interest bearing debt | 228\u00a0865 | -43\u00a0328 | \u2014 | 12\u00a0672 | \u2014 | \u2014 | 198\u00a0210 |
Total financial debt | 1\u00a0609\u00a0732 | -459\u00a0501 | \u2014 | 16\u00a0291 | \u2014 | 24\u00a0802 | 1\u00a0191\u00a0324 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 1\u00a0081 | \u2014 | \u2014 | \u2014 | -964 | \u2014 | 118 |
Cross-currency interest-rate swaps | -5\u00a0030 | \u2014 | \u2014 | \u2014 | 6\u00a0675 | \u2014 | 1\u00a0645 |
Other liabilities from financing activities | |||||||
Conversion derivative | 34 | \u2014 | \u2014 | \u2014 | -34 | \u2014 | \u2014 |
Total liabilities from financing activities | 1\u00a0605\u00a0817 | -459\u00a0501 | \u2014 | 16\u00a0291 | 5\u00a0677 | 24\u00a0802 | 1\u00a0193\u00a0087 |
\u00b9\u00a0 Including the current portion of non-current interest-bearing debt of \u20ac 412.8 million as at 1 January and \u20ac 39.5 million as at 31 December.
2022 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 993\u00a0114 | -75\u00a0577 | \u2014 | 2\u00a0107 | \u2014 | 33\u00a0974 | 953\u00a0618 |
Cash guarantees received | 204 | 11 | \u2014 | -5 | \u2014 | \u2014 | 210 |
Lease liability | 76\u00a0644 | -31\u00a0704 | \u2014 | -1\u00a0434 | \u2014 | 33\u00a0699 | 77\u00a0205 |
Credit institutions | 196\u00a0361 | -43\u00a0885 | \u2014 | 3\u00a0546 | \u2014 | \u2014 | 156\u00a0023 |
Schuldschein loans | 319\u00a0905 | \u2014 | \u2014 | \u2014 | \u2014 | 275 | 320\u00a0179 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Short-term interest bearing debt | 198\u00a0210 | 67\u00a0349 | 614 | 16\u00a0205 | \u2014 | \u2014 | 282\u00a0378 |
Total financial debt | 1\u00a0191\u00a0324 | -8\u00a0228 | 614 | 18\u00a0312 | \u2014 | 33\u00a0974 | 1\u00a0235\u00a0996 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 118 | \u2014 | \u2014 | \u2014 | -7\u00a0295 | \u2014 | -7\u00a0178 |
Cross-currency interest-rate swaps | 1\u00a0645 | \u2014 | \u2014 | \u2014 | -4\u00a0290 | \u2014 | -2\u00a0645 |
Total liabilities from financing activities | 1\u00a0193\u00a0087 | -8\u00a0228 | 614 | 18\u00a0312 | -11\u00a0586 | 33\u00a0974 | 1\u00a0226\u00a0173 |
Derivatives
The following table analyzes the notional amounts of the derivatives according to their maturity date. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31 December 2022, Bekaert does not apply hedge accounting
2021 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 67\u00a0716 | \u2014 | \u2014 |
Interest-rate swaps | \u2014 | 196\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 128\u00a0947 | \u2014 | \u2014 |
Conversion derivative | \u2014 | \u2014 | \u2014 |
Total | 196\u00a0663 | 196\u00a0500 | \u2014 |
2022 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 65\u00a0493 | \u2014 | \u2014 |
Interest-rate swaps | 116\u00a0000 | 80\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 121\u00a0843 | \u2014 | \u2014 |
Total | 303\u00a0336 | 80\u00a0500 | \u2014 |
The following table summarizes the fair values of the various derivatives carried. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31\u00a0December\u00a02022, Bekaert does not apply hedge accounting:
Fair value of current and non-current derivatives | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Financial instruments | ||||
Held for trading | ||||
Forward exchange contracts | 805 | 2\u00a0833 | 654 | 1\u00a0333 |
Interest-rate swaps | \u2014 | 7\u00a0178 | 118 | \u2014 |
Cross-currency interest-rate swaps | 610 | 2\u00a0860 | 2\u00a0255 | 215 |
Conversion derivative | \u2014 | \u2014 | \u2014 | |
Other derivative financial assets | 13\u00a0244 | 7\u00a0500 | \u2014 | \u2014 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Non-current | 13\u00a0244 | 14\u00a0678 | 703 | \u2014 |
Current | 1\u00a0416 | 5\u00a0694 | 2\u00a0324 | 1\u00a0548 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
In 2022, the other derivative financial assets related to the VPPA derivatives for \u20ac 7.5 million (2021: \u20ac 13.2\u00a0million).
The Group has no financial assets and financial liabilities that are presented net in the balance sheet due to set-off in accordance with IAS 32. The Group enters into ISDA (International Swaps and Derivatives Association) master agreements with its counterparties for some of its derivatives, allowing the counterparties to net derivative assets with derivative liabilities when settling in case of default. Under these agreements, no collateral is being exchanged, neither in cash nor in securities.
The potential effect of the netting of derivative contracts is shown below:
Effect of enforceable netting agreements | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Total derivatives recognized in balance sheet | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Enforceable netting | -610 | -215 | -610 | -215 |
Net amounts | 14\u00a0049 | 20\u00a0157 | 2\u00a0416 | 1\u00a0333 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 101\u00a0330 | 157\u00a0005 |
Increase or decrease | 51\u00a0532 | -11\u00a0312 |
Write-downs (-) and write-down reversals | 158 | 1\u00a0134 |
New consolidations | \u2014 | 197 |
Exchange gains and losses | 3\u00a0985 | 4\u00a0402 |
As at 31 December | 157\u00a0005 | 151\u00a0426 |
In 2022, the share in the result of joint ventures and associates reflected the drop in performance of both Steel Wire Solutions and Rubber Reinforcement businesses in Brazil compared to the very strong performance of both in 2021. Moreover, Belgo Bekaert Arames Ltda was able in 2021 to recover BRL 670 million of indirect tax credits (PIS/COFINS) from the past, resulting in a one-time net impact of BRL 485\u00a0million (\u20ac\u00a034.2 million equivalent for the Bekaert share). The decrease in performance was slightly compensated by the increase in value of the Brazilian real against the euro (average rate increased by 14.7% from 2021 to 2022). This increase in YTD average rate 2022 versus 2021 was mainly caused by a significant increase in the course of 2022, while in 2021, the rate remained more or less stable.
Additional information relating to the Brazilian joint ventures is provided under note 6.5. \u2018Investments in joint ventures and associates\u2019.
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | -390 | -1\u00a0135 |
Agro - Bekaert Springs, SL | Spain | -6 | -7 |
Belgo Bekaert Arames Ltda | Brazil | 99\u00a0349 | 55\u00a0568 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 8\u00a0701 | -217 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | -34 | 48 |
Total | 107\u00a0619 | 54\u00a0257 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 120\u00a0181 | 184\u00a0823 |
Capital increases and decreases | \u2014 | -144 |
Result for the year | 107\u00a0619 | 54\u00a0257 |
Dividends | -44\u00a0872 | -39\u00a0558 |
Exchange gains and losses | 1\u00a0891 | 18\u00a0186 |
Other comprehensive income | 3 | 27 |
As at 31 December | 184\u00a0823 | 217\u00a0590 |
For an analysis of the result for the year, please refer to note 5.7. \u2018Share in the results of joint ventures and associates\u2019.
Exchange gains and losses related mainly to the evolution of the Brazilian real versus the euro. In 2022, the Brazilian real increased significantly in value against the euro (5.6 BRL/EUR end 2022) while it remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020).
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 3\u00a0800 | 3\u00a0838 |
Exchange gains and losses | 38 | 457 |
As at 31 December | 3\u00a0838 | 4\u00a0295 |
Carrying amount of related goodwill as at 31 December | 3\u00a0838 | 4\u00a0295 |
Total carrying amount of investments in joint ventures as at 31 December | 188\u00a0661 | 221\u00a0886 |
See Note 6.2 \u2018Goodwill\u2019 for details per entity.
The Group\u2019s share in the equity of joint ventures is analyzed as follows:
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | 56 | -284 |
Agro - Bekaert Springs, SL | Spain | 13 | -744 |
Belgo Bekaert Arames Ltda | Brazil | 136\u00a0092 | 165\u00a0312 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 48\u00a0521 | 53\u00a0250 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | 140 | 56 |
Total for joint ventures excluding related goodwill | 184\u00a0822 | 217\u00a0590 | |
Carrying amount of related goodwill | 3\u00a0838 | 4\u00a0295 | |
Total for joint ventures including related goodwill | 188\u00a0661 | 221\u00a0886 |
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on material joint ventures. The two Brazilian joint ventures have been aggregated in order to emphasize the predominance of the partnership with ArcelorMittal when analyzing the relative importance of the joint ventures.
Proportion of ownership interest (and voting rights) held by the Group at year-end
Name of joint venture | |||
in thousands of \u20ac | Country | 2021 | 2022 |
Belgo Bekaert Arames Ltda | Brazil | 45.0% (50.0%) | 45.0% (50.0%) |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 44.5% (50.0%) | 44.5% (50.0%) |
Belgo Bekaert Arames Ltda manufactures and sells a wide variety of steel wire products for various sectors, and BMB manufactures and sells mainly steel cord and beat wire for rubber reinforcement in tires.
Brazilian joint ventures: income statement | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 1\u00a0041\u00a0142 | 1\u00a0240\u00a0955 |
Operating result (EBIT) | 282\u00a0531 | 173\u00a0274 |
Interest income | 53\u00a0043 | 13\u00a0135 |
Interest expense | -17\u00a0775 | -13\u00a0762 |
Other financial income and expenses | -2\u00a0051 | -4\u00a0089 |
Income taxes | -62\u00a0360 | -31\u00a0991 |
Result for the period | 253\u00a0389 | 136\u00a0567 |
Other comprehensive income for the period | 12 | 57 |
Total comprehensive income for the period | 253\u00a0400 | 136\u00a0624 |
Depreciation and amortization | 15\u00a0803 | 19\u00a0547 |
EBITDA | 298\u00a0334 | 192\u00a0821 |
Dividends received from the entities | 44\u00a0872 | 39\u00a0558 |
Brazilian joint ventures: balance sheet | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 406\u00a0456 | 420\u00a0218 |
Non-current assets | 239\u00a0857 | 316\u00a0079 |
Current liabilities | -184\u00a0396 | -158\u00a0025 |
Non-current liabilities | -53\u00a0086 | -94\u00a0806 |
Net assets | 408\u00a0831 | 483\u00a0466 |
Brazilian joint ventures: net debt elements | ||
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 5\u00a0963 | 51\u00a0371 |
Current interest-bearing debt | 18\u00a0454 | 19\u00a0680 |
Total financial debt | 24\u00a0417 | 71\u00a0051 |
Non-current financial receivables and cash guarantees | -16\u00a0466 | -62\u00a0532 |
Cash and cash equivalents | -31\u00a0940 | -22\u00a0154 |
Net debt | -23\u00a0990 | -13\u00a0635 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling \u20ac 5.3 million (2021: \u20ac 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of \u20ac 22.0 million (2021: \u20ac 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%).
Unrecognized commitments to acquire property, plant and equipment amounted to \u20ac 8.6 million (2021: \u20ac 16.2 million), including \u20ac 4.2 million (2021: \u20ac 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of \u20ac 13.6 million (2021:\u00a0\u20ac\u00a024.9\u00a0million).
There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures.
Brazilian joint ventures: reconciliation with carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Net assets of Belgo Bekaert Arames Ltda | 301\u00a0977 | 366\u00a0385 |
Proportion of the Group's ownership interest | 45.0% | 45.0% |
Proportionate net assets | 135\u00a0890 | 164\u00a0873 |
Consolidation adjustments | 202 | 438 |
Carrying amount of the Group's interest in Belgo Bekaert Arames Ltda | 136\u00a0092 | 165\u00a0312 |
Net assets of BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 106\u00a0854 | 117\u00a0081 |
Proportion of the Group's ownership interest | 44.5% | 44.5% |
Proportionate net assets | 47\u00a0549.981 | 52\u00a0101 |
Consolidation adjustments | 971 | 1\u00a0149 |
Carrying amount of the Group's interest in BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 48\u00a0521 | 53\u00a0250 |
Carrying amount of the Group's interest in the Brazilian joint ventures | 184\u00a0613 | 218\u00a0562 |
The following table reflects aggregate information for the other joint ventures which were not deemed material in this context.
Aggregate information of the other joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
The Group's share in the result from continuing operations | -430 | -1\u00a0095 |
The Group's share of other comprehensive income | -2 | 1 |
The Group's share of total comprehensive income | -432 | -1\u00a0093 |
Aggregate carrying amount of the Group's interests in these joint ventures | 210 | -972 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 87\u00a0175 | 130\u00a0971 |
Changes in Group structure | 3\u00a0601 | \u2014 |
Share of the result for the period | 43\u00a0643 | 20\u00a0457 |
Share of other comprehensive income excluding CTA | 422 | -396 |
Dividend pay-out | -6\u00a0649 | -19\u00a0763 |
Capital increases | 3\u00a0975 | \u2014 |
Exchange gains and losses (-) | -1\u00a0196 | 5\u00a0581 |
As at 31 December | 130\u00a0971 | 136\u00a0850 |
The changes in Group structure and the Capital Increase in 2021 mainly related to the merger of Proalco SAS (subsidiary of Bekaert) with the steel wire activities of Almasa SA, both located in Colombia.
The share in the result of the period for entities in which NCI are held, deteriorated significantly. The main contributing entities were located in Chile and Peru.
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on subsidiaries that have non-controlling interests that are material to the Group. The objective of IFRS 12 is to require an entity to disclose information that enables users of its financial statements to evaluate (a) the nature and risks associated with its interests in other entities, and (b) the effects of those interests on its financial position, financial performance and cash flows. Bekaert has many partnerships across the world, most entities of which would not individually meet any reasonable materiality criterion. Therefore, the Group has identified two non-wholly owned groups of entities which are interconnected through their line of business and shareholder structure: (1) the '\u2019Steel Wire Solutions\u2019 entities (SWS entities) in Chile and Peru, where the non-controlling interests are mainly held by the Chilean partners, and (2) the SWS entities in the Andina region, where the non-controlling interests are mainly held by the Ecuadorian Kohn family and ArcelorMittal. In presenting aggregated information for these entity groups, only intercompany effects within each entity group have been eliminated, while all other entities of the Group have been treated as third parties.
Proportion of NCI at year-end | |||
Entities included in material NCI disclosure | Country | 2021 | 2022 |
BBRG entities | |||
Procables SA | Peru | 3.9% | 3.9% |
SWS entities Chile and Peru | |||
Acma SA | Chile | 48.0% | 48.0% |
Acmanet SA | Chile | 48.0% | 48.0% |
Industrias Acmanet Ltda | Chile | 48.0% | 48.0% |
Industrias Chilenas de Alambre - Inchalam SA | Chile | 48.0% | 48.0% |
Sujetar del Peru SAC | Peru | 0.0% | 62.5% |
Procercos SA | Chile | 48.0% | 48.0% |
Prodalam SA | Chile | 48.0% | 48.0% |
Prodicom Selva SAC | Peru | 62.5% | 62.5% |
Prodimin SAC | Peru | 62.5% | 62.5% |
Prodac Contrata SAC | Peru | 62.5% | 62.5% |
Productos de Acero Cassad\u00f3 SA | Peru | 62.5% | 62.5% |
SWS entities Andina region | |||
Agro-Bekaert Colombia SAS | Colombia | 60.0% | 60.0% |
Agro - Bekaert Springs, SL | Spain | 60.0% | 60.0% |
Bekaert Ideal SL | Spain | 20.0% | 20.0% |
Bekaert Guatemala SA | Guatemala | 41.6% | 41.6% |
Servicios Ideal AGF Inttegra Cia. Ltda | Ecuador | 70.8% | 70.8% |
BIA Alambres Costa Rica SA | Costa Rica | 41.6% | 41.6% |
Ideal Alambrec SA | Ecuador | 41.6% | 41.6% |
InverVicson SA | Venezuela | 20.0% | 20.0% |
Productora de Alambres Colombianos Proalco SAS | Colombia | 60.0% | 60.0% |
Vicson SA | Venezuela | 20.0% | 20.0% |
The principal activity of the main entities listed above is manufacturing and selling wire and other wire products, mainly for the local market. Following entities are essentially holdings, having interests in one or more of the other entities listed above: Industrias Acmanet Ltda, Procercos SA, Bekaert Ideal SL and Agro - Bekaert Springs SL. The following table shows the relative importance of the entity groups with material NCI in terms of results and equity attributable to NCI.
Material and other NCI | Result attributable to NCI | Equity attributable to NCI | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
SWS entities Chile and Peru | 35\u00a0633 | 15\u00a0733 | 100\u00a0872 | 105\u00a0814 |
SWS entities Andina region | 6\u00a0075 | 2\u00a0711 | 21\u00a0858 | 22\u00a0421 |
Consolidation adjustments on material NCI | -651 | 228 | -27\u00a0573 | -27\u00a0316 |
Contribution of material NCI to consolidated NCI | 41\u00a0057 | 18\u00a0672 | 95\u00a0157 | 100\u00a0919 |
Other NCI | 2\u00a0586 | 1\u00a0785 | 35\u00a0814 | 35\u00a0931 |
Total consolidated NCI | 43\u00a0643 | 20\u00a0457 | 130\u00a0971 | 136\u00a0850 |
The following tables show concise basic statements of the non-wholly owned groups of entities.
SWS entities Chile and Peru | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 382\u00a0128 | 339\u00a0103 |
Non-current assets | 119\u00a0973 | 130\u00a0920 |
Current liabilities | 247\u00a0022 | 224\u00a0591 |
Non-current liabilities | 60\u00a0402 | 42\u00a0767 |
Equity attributable to equity holders of Bekaert | 93\u00a0805 | 96\u00a0852 |
Equity attributable to NCI | 100\u00a0872 | 105\u00a0814 |
SWS entities Chile and Peru | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 689\u00a0790 | 681\u00a0733 |
Expenses | -619\u00a0952 | -650\u00a0307 |
Result for the period | 69\u00a0838 | 31\u00a0426 |
Result for the period attributable to equity holders of Bekaert | 34\u00a0205 | 15\u00a0693 |
Result for the period attributable to NCI | 35\u00a0633 | 15\u00a0733 |
Other comprehensive income for the period | -8\u00a0946 | 11\u00a0354 |
OCI attributable to equity holders of Bekaert | -5\u00a0302 | 5\u00a0512 |
OCI attributable to NCI | -3\u00a0644 | 5\u00a0842 |
Total comprehensive income for the period | 60\u00a0892 | 42\u00a0780 |
Total comprehensive income attributable to equity holders of Bekaert | 28\u00a0903 | 21\u00a0205 |
Total comprehensive income attributable to NCI | 31\u00a0989 | 21\u00a0575 |
Dividends paid to NCI | -3\u00a0475 | -17\u00a0588 |
Net cash inflow (outflow) from operating activities | -4\u00a0351 | 9\u00a0166 |
Net cash inflow (outflow) from investing activities | -8\u00a0402 | -13\u00a0344 |
Net cash inflow (outflow) from financing activities | 22\u00a0430 | -26\u00a0881 |
Net cash inflow (outflow) | 9\u00a0676 | -31\u00a0059 |
The combination of a slight decrease in sales (-1.2%) and increase in expenses (+4.9%) results in worse profitability in absolute terms. As the increase in expenses was not mirrored in the sales evolution, profitability as percentage was decreased significantly (underlying EBIT margin on sales at 7.1% compared to (15.0% last year).
The strong decrease in EBITDA was amplified by the working capital evolution. As a result the Net Debt position ended per year-end much higher than last year.
SWS entities Andina region | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 150\u00a0291 | 117\u00a0430 |
Non-current assets | 52\u00a0206 | 51\u00a0291 |
Current liabilities | 143\u00a0778 | 111\u00a0249 |
Non-current liabilities | 11\u00a0067 | 10\u00a0028 |
Equity attributable to equity holders of Bekaert | 25\u00a0795 | 25\u00a0023 |
Equity attributable to NCI | 21\u00a0858 | 22\u00a0421 |
SWS entities Andina region | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 237\u00a0878 | 276\u00a0074 |
Expenses | -224\u00a0404 | -270\u00a0266 |
Result for the period | 13\u00a0473 | 5\u00a0808 |
Result for the period attributable to equity holders of Bekaert | 7\u00a0398 | 3\u00a0098 |
Result for the period attributable to NCI | 6\u00a0075 | 2\u00a0711 |
Other comprehensive income for the period | -254 | 864 |
OCI attributable to equity holders of Bekaert | -203 | 893 |
OCI attributable to NCI | -51 | -29 |
Total comprehensive income for the period | 13\u00a0220 | 6\u00a0673 |
Total comprehensive income attributable to equity holders of Bekaert | 7\u00a0196 | 3\u00a0991 |
Total comprehensive income attributable to NCI | 6\u00a0024 | 2\u00a0682 |
Dividends paid to NCI | -3\u00a0137 | -2\u00a0078 |
Net cash inflow (outflow) from operating activities | 28\u00a0707 | -32\u00a0320 |
Net cash inflow (outflow) from investing activities | -4\u00a0940 | -5\u00a0829 |
Net cash inflow (outflow) from financing activities | -13\u00a0089 | 26\u00a0195 |
Net cash inflow (outflow) | 10\u00a0678 | -11\u00a0954 |
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. Transactions with other related parties are disclosed below.
Transactions with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Sales of goods | 13\u00a0231 | 21\u00a0951 |
Purchases of goods | 18\u00a0509 | 21\u00a0152 |
Services rendered | 81 | 64 |
Royalties and management fees received | 14\u00a0981 | 18\u00a0374 |
Interest and similar income | \u2014 | 6 |
Dividends received | 44\u00a0847 | 42\u00a0508 |
Outstanding balances with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Trade receivables | 6\u00a0116 | 6\u00a0592 |
Other current receivables \u00b9 | 27\u00a0452 | 5\u00a0881 |
Trade payables | 4\u00a0945 | 3\u00a0557 |
Other current payables | 54 | \u2014 |
\u00b9 The other current receivables are at year-end 2021 significantly higher due to outstanding receivables for dividends from the Brazilian joint ventures (\u20ac\u00a027.5 million).
None of the related parties have entered into any other transactions with the Group that meet the requirements of IAS 24 \u2018Related Party Disclosures\u2019. The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm\u2019s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. Advances have been received for ongoing capex projects. More information on transactions with joint ventures are disclosed in note 6.5. \u2018Investments in joint ventures and associates\u2019.
Companies forming part of the Group as at 31 December 2022\u00a0
Subsidiaries
Industrial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Advanced Cords Aalter NV | Aalter, Belgium | EUR | 100 |
Bekaert Bohum\u00edn sro | Bohum\u00edn, Czech Republic | CZK | 100 |
Bekaert Bradford UK Ltd | Bradford, United Kingdom | GBP | 100 |
Bekaert Combustion Technology BV | Assen, Netherlands | EUR | 100 |
Bekaert Heating Romania SRL | Negoiesti, Brazi Commune, Romania | RON | 100 |
Bekaert Hlohovec as | Hlohovec, Slovakia | EUR | 100 |
Bekaert Izmit \u00c7elik Kord Sanayi ve Ticaret AS | Izmit, Turkey | EUR | 100 |
Bekaert Kartepe \u00c7elik Kord Sanayi ve Ticaret AS | Kartepe, Turkey | EUR | 100 |
Bekaert Petrovice sro | Petrovice, Czech Republic | CZK | 100 |
Bekaert Sardegna SpA | Assemini, Italy | EUR | 100 |
Bekaert Slatina SRL | Slatina, Romania | RON | 100 |
Bekaert Slovakia sro | Sl\u00e1dkovi\u010dovo, Slovakia | EUR | 100 |
Bekintex NV | Wetteren, Belgium | EUR | 100 |
Bridon International GmbH | Gelsenkirchen, Germany | EUR | 100 |
Bridon International Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias del Ubierna SA | Burgos, Spain | EUR | 100 |
OOO Bekaert Lipetsk | Gryazi, Russian Federation | RUB | 100 |
VisionTek Engineering Srl | Rovereto, Italy | EUR | 100 |
North America | |||
Bekaert Corporation | Wilmington (Delaware), United States | USD | 100 |
Bridon-American Corporation | New York, United States | USD | 100 |
Latin America | |||
Acma SA | Santiago, Chile | CLP | 52 |
Acmanet SA | Talcahuano, Chile | CLP | 52 |
BBRG - Osasco Cabos Ltda | S\u00e3o Paulo, Brazil | BRL | 100 |
BIA Alambres Costa Rica SA | San Jos\u00e9-Santa Ana, Costa Rica | USD | 58 |
Ideal Alambrec SA | Quito, Ecuador | USD | 58 |
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Industrias Chilenas de Alambre - Inchalam SA | Talcahuano, Chile | CLP | 52 |
Prodinsa SA | Maip\u00fa, Chile | CLP | 100 |
Productora de Alambres Colombianos Proalco SAS | Bogot\u00e1, Colombia | COP | 40 |
Productos de Acero Cassad\u00f3 SA | Callao, Peru | USD | 38 |
Vicson SA | Valencia, Venezuela | USD | 80 |
Asia Pacific | |||
Bekaert Applied Material Technology (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Binjiang Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
Bekaert (China) Technology Research and Development Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert (Chongqing) Steel Cord Co Ltd | Chongqing, China | CNY | 100 |
Bekaert Industries Pvt Ltd | Taluka Shirur, District Pune, India | INR | 100 |
Bekaert (Jining) Steel Cord Co Ltd | Jining City, Yanzhou district (Shandong Province), China | CNY | 60 |
Bekaert Jiangyin Wire Products Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert Mukand Wire Industries Pvt Ltd | Pune, India | INR | 100 |
Bekaert New Materials (Suzhou) Co Ltd | Suzhou (Jiangsu province), China | CNY | 100 |
Bekaert (Qingdao) Wire Products Co Ltd | Qingdao (Shandong province), China | CNY | 100 |
Bekaert (Shandong) Tire Cord Co Ltd | Weihai (Shandong province), China | CNY | 100 |
Bekaert (Shenyang) Advanced Cords Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Shenyang Advanced Products Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Toko Metal Fiber Co Ltd | Tokyo, Japan | JPY | 70 |
Bekaert Vietnam Co Ltd | Son Tinh District, Quang Ngai Province, Vietnam | USD | 100 |
Bekaert Wire Ropes Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon (Hangzhou) Ropes Co Ltd | Hangzhou (Zhejiang province), China | CNY | 100 |
China Bekaert Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
PT Bekaert Indonesia | Karawang, Indonesia | USD | 100 |
PT Bekaert Wire Indonesia | Karawang, Indonesia | USD | 100 |
PT Bridon | Bekasi, West Java, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Emirates LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Figline SpA | Milano, Italy | EUR | 100 |
Bekaert France SAS | Lille, France | EUR | 100 |
Bekaert Gesellschaft mbH | Vienna, Austria | EUR | 100 |
Bekaert GmbH | Neu-Anspach, Germany | EUR | 100 |
Bekaert Middle East LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Norge AS | Oslo, Norway | NOK | 100 |
Bekaert Poland Sp z oo | Warsaw, Poland | PLN | 100 |
Bekaert (Schweiz) AG | Baden, Switzerland | CHF | 100 |
Bekaert Svenska AB | Gothenburg, Sweden | SEK | 100 |
Bridon-Bekaert ScanRope AS | Tonsberg, Norway | NOK | 100 |
Bridon Middle East FZE | Sharjah, United Arab Emirates | AED | 100 |
Bridon Scheme Trustees Ltd | Doncaster, United Kingdom | GBP | 100 |
British Ropes Ltd | Doncaster, United Kingdom | GBP | 100 |
Leon Bekaert SpA | Milano, Italy | EUR | 100 |
OOO Bekaert Wire | Moscow, Russian Federation | RUB | 100 |
Rylands-Whitecross Ltd | Bradford, United Kingdom | GBP | 100 |
Scheldestroom NV | Zwevegem, Belgium | EUR | 100 |
Twil Company | Bradford, United Kingdom | GBP | 100 |
North America | |||
Wire Rope Industries Ltd/Industries de C\u00e2bles d\u2019Acier Lt\u00e9e | Montr\u00e9al, Canada | CAD | 100 |
Latin America | |||
Bekaert Guatemala SA | Ciudad de Guatemala, Guatemala | GTQ | 58 |
Bekaert Specialty Films de Mexico SA de CV | Monterrey, Mexico | MXN | 100 |
Bekaert Trade Mexico S de RL de CV | Mexico City, Mexico | MXN | 100 |
Procables SA | Cercado de Lima, Peru | PEN | 96 |
Prodac Contrata SAC | Callao, Peru | USD | 38 |
Prodalam SA | Santiago, Chile | CLP | 52 |
Prodicom Selva SAC | Ucayali, Peru | USD | 38 |
Prodimin SAC | Lima, Peru | USD | 38 |
Specialty Films de Services Company SA de CV | Monterrey, Mexico | MXN | 100 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
Asia Pacific | |||
Bekaert Japan Co Ltd | Tokyo, Japan | JPY | 100 |
Bekaert Korea Ltd | Seoul, South-Korea | KRW | 100 |
Bekaert Malaysia Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Management (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Shah Alam Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Singapore Pte Ltd | Singapore | SGD | 100 |
Bekaert Taiwan Co Ltd | Taipei City | TWD | 100 |
Bekaert (Thailand) Co Ltd | Tambol Pluakdaeng, Amphur Pluakdaeng,Thailand | USD | 100 |
BOSFA Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon Hong Kong Ltd | Hong Kong, China | HKD | 100 |
Bridon New Zealand Ltd | Aukland, New Zealand | NZD | 100 |
Bridon Singapore (Pte) Ltd | Singapore | SGD | 100 |
Bridon (South East Asia) Ltd | Hong Kong, China | HKD | 100 |
PT Bekaert Trade Indonesia | Karawang, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Financial companies | Address | FC \u00b9 | % \u00b2 |
Acma Inversiones SA | Santiago, Chile | CLP | 100 |
BBRG Finance (UK) Ltd | Doncaster, United Kingdom | EUR | 100 |
Becare DAC | Dublin, Ireland | EUR | 100 |
Bekaert Building Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Carding Solutions Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Co\u00f6rdinatiecentrum NV | Zwevegem, Belgium | EUR | 100 |
Bekaert do Brasil Ltda | Contagem, Brazil | BRL | 100 |
Bekaert Holding Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Ib\u00e9rica Holding SL | Burgos, Spain | EUR | 100 |
Bekaert Ideal SL | Burgos, Spain | EUR | 80 |
Bekaert Investments NV | Zwevegem, Belgium | EUR | 100 |
Bekaert Investments Italia SpA | Milano, Italy | EUR | 100 |
Bekaert North America Management Corporation | Wilmington (Delaware), United States | USD | 100 |
Bekaert Services Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Singapore Holding Pte Ltd | Singapore | SGD | 100 |
Bekaert Specialty Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Stainless Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Steel Cord Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Strategic Partnerships Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Rope Industry NV | Zwevegem, Belgium | EUR | 100 |
Bridon-Bekaert Ropes Group Ltd | Doncaster, United Kingdom | EUR | 100 |
Bridon Holdings Ltd | Doncaster, United Kingdom | GBP | 100 |
Bridon Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias Acmanet Ltda | Talcahuano, Chile | CLP | 52 |
InverVicson SA | Valencia, Venezuela | USD | 80 |
Procercos SA | Talcahuano, Chile | CLP | 52 |
Joint ventures
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Latin America | |||
Agro-Bekaert Colombia SAS | Malambo - Atl\u00e1ntico, Colombia | COP | 40 |
Belgo Bekaert Arames Ltda | Contagem, Brazil | BRL | 45 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Vespasiano, Brazil | BRL | 45 |
Servicios Ideal AGF Inttegra Cia Ltda | Quito, Ecuador | USD | 29 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Netlon Sentinel Ltd | Blackburn, United Kingdom | GBP | 50 |
Asia Pacific | |||
Bekaert Engineering (India) Pvt Ltd | New Delhi, India | INR | 40 |
Financial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Agro - Bekaert Springs SL | Burgos, Spain | EUR | 40 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Changes in 2022
1. Subsidiaries acquired through business combinations
Subsidiaries | Address | % \u00b9 |
VisionTek Engineering Srl | Rovereto, Italy | 100 |
2. Mergers
Subsidiaries | Merged into |
Sujetar del Peru SAC | Productos de Acero Cassad\u00f3 SA |
3. Liquidated
Companies | Address |
Bekaert AS | Hellerup, Denmark |
Bekaert Architectural Design Consulting (Shanghai) Co Ltd | Shanghai, China |
Bekaert Heating Technology (Suzhou) Co Ltd | Taicang City (Jiangsu province), China |
In accordance with Belgian legislation, the table below lists the registered numbers of the Belgian companies.
Companies | Company number |
Bekaert Advanced Cords Aalter NV | BTW BE 0645.654.071 RPR Gent, division Gent |
Bekaert Co\u00f6rdinatiecentrum NV | BTW BE 0426.824.150 RPR Gent, division Kortrijk |
Bekaert Investments NV | BTW BE 0406.207.096 RPR Gent, division Kortrijk |
Bekaert Wire Rope Industry NV | BTW BE 0550.983.358 RPR Gent, division Kortrijk |
Bekintex NV | BTW BE 0452.746.609 RPR Gent, division Dendermonde |
NV Bekaert SA | BTW BE 0405.388.536 RPR Gent, division Kortrijk |
Scheldestroom NV | BTW BE 0403.676.188 RPR Gent, division Kortrijk |
In 2022, the share in the result of joint ventures and associates reflected the drop in performance of both Steel Wire Solutions and Rubber Reinforcement businesses in Brazil compared to the very strong performance of both in 2021. Moreover, Belgo Bekaert Arames Ltda was able in 2021 to recover BRL 670 million of indirect tax credits (PIS/COFINS) from the past, resulting in a one-time net impact of BRL 485\u00a0million (\u20ac\u00a034.2 million equivalent for the Bekaert share). The decrease in performance was slightly compensated by the increase in value of the Brazilian real against the euro (average rate increased by 14.7% from 2021 to 2022). This increase in YTD average rate 2022 versus 2021 was mainly caused by a significant increase in the course of 2022, while in 2021, the rate remained more or less stable.
Additional information relating to the Brazilian joint ventures is provided under note 6.5. \u2018Investments in joint ventures and associates\u2019.
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | -390 | -1\u00a0135 |
Agro - Bekaert Springs, SL | Spain | -6 | -7 |
Belgo Bekaert Arames Ltda | Brazil | 99\u00a0349 | 55\u00a0568 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 8\u00a0701 | -217 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | -34 | 48 |
Total | 107\u00a0619 | 54\u00a0257 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 120\u00a0181 | 184\u00a0823 |
Capital increases and decreases | \u2014 | -144 |
Result for the year | 107\u00a0619 | 54\u00a0257 |
Dividends | -44\u00a0872 | -39\u00a0558 |
Exchange gains and losses | 1\u00a0891 | 18\u00a0186 |
Other comprehensive income | 3 | 27 |
As at 31 December | 184\u00a0823 | 217\u00a0590 |
For an analysis of the result for the year, please refer to note 5.7. \u2018Share in the results of joint ventures and associates\u2019.
Exchange gains and losses related mainly to the evolution of the Brazilian real versus the euro. In 2022, the Brazilian real increased significantly in value against the euro (5.6 BRL/EUR end 2022) while it remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020).
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 3\u00a0800 | 3\u00a0838 |
Exchange gains and losses | 38 | 457 |
As at 31 December | 3\u00a0838 | 4\u00a0295 |
Carrying amount of related goodwill as at 31 December | 3\u00a0838 | 4\u00a0295 |
Total carrying amount of investments in joint ventures as at 31 December | 188\u00a0661 | 221\u00a0886 |
See Note 6.2 \u2018Goodwill\u2019 for details per entity.
The Group\u2019s share in the equity of joint ventures is analyzed as follows:
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | 56 | -284 |
Agro - Bekaert Springs, SL | Spain | 13 | -744 |
Belgo Bekaert Arames Ltda | Brazil | 136\u00a0092 | 165\u00a0312 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 48\u00a0521 | 53\u00a0250 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | 140 | 56 |
Total for joint ventures excluding related goodwill | 184\u00a0822 | 217\u00a0590 | |
Carrying amount of related goodwill | 3\u00a0838 | 4\u00a0295 | |
Total for joint ventures including related goodwill | 188\u00a0661 | 221\u00a0886 |
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on material joint ventures. The two Brazilian joint ventures have been aggregated in order to emphasize the predominance of the partnership with ArcelorMittal when analyzing the relative importance of the joint ventures.
Proportion of ownership interest (and voting rights) held by the Group at year-end
Name of joint venture | |||
in thousands of \u20ac | Country | 2021 | 2022 |
Belgo Bekaert Arames Ltda | Brazil | 45.0% (50.0%) | 45.0% (50.0%) |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 44.5% (50.0%) | 44.5% (50.0%) |
Belgo Bekaert Arames Ltda manufactures and sells a wide variety of steel wire products for various sectors, and BMB manufactures and sells mainly steel cord and beat wire for rubber reinforcement in tires.
Brazilian joint ventures: income statement | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 1\u00a0041\u00a0142 | 1\u00a0240\u00a0955 |
Operating result (EBIT) | 282\u00a0531 | 173\u00a0274 |
Interest income | 53\u00a0043 | 13\u00a0135 |
Interest expense | -17\u00a0775 | -13\u00a0762 |
Other financial income and expenses | -2\u00a0051 | -4\u00a0089 |
Income taxes | -62\u00a0360 | -31\u00a0991 |
Result for the period | 253\u00a0389 | 136\u00a0567 |
Other comprehensive income for the period | 12 | 57 |
Total comprehensive income for the period | 253\u00a0400 | 136\u00a0624 |
Depreciation and amortization | 15\u00a0803 | 19\u00a0547 |
EBITDA | 298\u00a0334 | 192\u00a0821 |
Dividends received from the entities | 44\u00a0872 | 39\u00a0558 |
Brazilian joint ventures: balance sheet | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 406\u00a0456 | 420\u00a0218 |
Non-current assets | 239\u00a0857 | 316\u00a0079 |
Current liabilities | -184\u00a0396 | -158\u00a0025 |
Non-current liabilities | -53\u00a0086 | -94\u00a0806 |
Net assets | 408\u00a0831 | 483\u00a0466 |
Brazilian joint ventures: net debt elements | ||
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 5\u00a0963 | 51\u00a0371 |
Current interest-bearing debt | 18\u00a0454 | 19\u00a0680 |
Total financial debt | 24\u00a0417 | 71\u00a0051 |
Non-current financial receivables and cash guarantees | -16\u00a0466 | -62\u00a0532 |
Cash and cash equivalents | -31\u00a0940 | -22\u00a0154 |
Net debt | -23\u00a0990 | -13\u00a0635 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling \u20ac 5.3 million (2021: \u20ac 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of \u20ac 22.0 million (2021: \u20ac 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%).
Unrecognized commitments to acquire property, plant and equipment amounted to \u20ac 8.6 million (2021: \u20ac 16.2 million), including \u20ac 4.2 million (2021: \u20ac 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of \u20ac 13.6 million (2021:\u00a0\u20ac\u00a024.9\u00a0million).
There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures.
Brazilian joint ventures: reconciliation with carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Net assets of Belgo Bekaert Arames Ltda | 301\u00a0977 | 366\u00a0385 |
Proportion of the Group's ownership interest | 45.0% | 45.0% |
Proportionate net assets | 135\u00a0890 | 164\u00a0873 |
Consolidation adjustments | 202 | 438 |
Carrying amount of the Group's interest in Belgo Bekaert Arames Ltda | 136\u00a0092 | 165\u00a0312 |
Net assets of BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 106\u00a0854 | 117\u00a0081 |
Proportion of the Group's ownership interest | 44.5% | 44.5% |
Proportionate net assets | 47\u00a0549.981 | 52\u00a0101 |
Consolidation adjustments | 971 | 1\u00a0149 |
Carrying amount of the Group's interest in BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 48\u00a0521 | 53\u00a0250 |
Carrying amount of the Group's interest in the Brazilian joint ventures | 184\u00a0613 | 218\u00a0562 |
The following table reflects aggregate information for the other joint ventures which were not deemed material in this context.
Aggregate information of the other joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
The Group's share in the result from continuing operations | -430 | -1\u00a0095 |
The Group's share of other comprehensive income | -2 | 1 |
The Group's share of total comprehensive income | -432 | -1\u00a0093 |
Aggregate carrying amount of the Group's interests in these joint ventures | 210 | -972 |
Joint ventures
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Latin America | |||
Agro-Bekaert Colombia SAS | Malambo - Atl\u00e1ntico, Colombia | COP | 40 |
Belgo Bekaert Arames Ltda | Contagem, Brazil | BRL | 45 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Vespasiano, Brazil | BRL | 45 |
Servicios Ideal AGF Inttegra Cia Ltda | Quito, Ecuador | USD | 29 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Netlon Sentinel Ltd | Blackburn, United Kingdom | GBP | 50 |
Asia Pacific | |||
Bekaert Engineering (India) Pvt Ltd | New Delhi, India | INR | 40 |
Financial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Agro - Bekaert Springs SL | Burgos, Spain | EUR | 40 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
In 2022, the share in the result of joint ventures and associates reflected the drop in performance of both Steel Wire Solutions and Rubber Reinforcement businesses in Brazil compared to the very strong performance of both in 2021. Moreover, Belgo Bekaert Arames Ltda was able in 2021 to recover BRL 670 million of indirect tax credits (PIS/COFINS) from the past, resulting in a one-time net impact of BRL 485\u00a0million (\u20ac\u00a034.2 million equivalent for the Bekaert share). The decrease in performance was slightly compensated by the increase in value of the Brazilian real against the euro (average rate increased by 14.7% from 2021 to 2022). This increase in YTD average rate 2022 versus 2021 was mainly caused by a significant increase in the course of 2022, while in 2021, the rate remained more or less stable.
Additional information relating to the Brazilian joint ventures is provided under note 6.5. \u2018Investments in joint ventures and associates\u2019.
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | -390 | -1\u00a0135 |
Agro - Bekaert Springs, SL | Spain | -6 | -7 |
Belgo Bekaert Arames Ltda | Brazil | 99\u00a0349 | 55\u00a0568 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 8\u00a0701 | -217 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | -34 | 48 |
Total | 107\u00a0619 | 54\u00a0257 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 120\u00a0181 | 184\u00a0823 |
Capital increases and decreases | \u2014 | -144 |
Result for the year | 107\u00a0619 | 54\u00a0257 |
Dividends | -44\u00a0872 | -39\u00a0558 |
Exchange gains and losses | 1\u00a0891 | 18\u00a0186 |
Other comprehensive income | 3 | 27 |
As at 31 December | 184\u00a0823 | 217\u00a0590 |
For an analysis of the result for the year, please refer to note 5.7. \u2018Share in the results of joint ventures and associates\u2019.
Exchange gains and losses related mainly to the evolution of the Brazilian real versus the euro. In 2022, the Brazilian real increased significantly in value against the euro (5.6 BRL/EUR end 2022) while it remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020).
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 3\u00a0800 | 3\u00a0838 |
Exchange gains and losses | 38 | 457 |
As at 31 December | 3\u00a0838 | 4\u00a0295 |
Carrying amount of related goodwill as at 31 December | 3\u00a0838 | 4\u00a0295 |
Total carrying amount of investments in joint ventures as at 31 December | 188\u00a0661 | 221\u00a0886 |
See Note 6.2 \u2018Goodwill\u2019 for details per entity.
The Group\u2019s share in the equity of joint ventures is analyzed as follows:
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | 56 | -284 |
Agro - Bekaert Springs, SL | Spain | 13 | -744 |
Belgo Bekaert Arames Ltda | Brazil | 136\u00a0092 | 165\u00a0312 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 48\u00a0521 | 53\u00a0250 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | 140 | 56 |
Total for joint ventures excluding related goodwill | 184\u00a0822 | 217\u00a0590 | |
Carrying amount of related goodwill | 3\u00a0838 | 4\u00a0295 | |
Total for joint ventures including related goodwill | 188\u00a0661 | 221\u00a0886 |
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on material joint ventures. The two Brazilian joint ventures have been aggregated in order to emphasize the predominance of the partnership with ArcelorMittal when analyzing the relative importance of the joint ventures.
Proportion of ownership interest (and voting rights) held by the Group at year-end
Name of joint venture | |||
in thousands of \u20ac | Country | 2021 | 2022 |
Belgo Bekaert Arames Ltda | Brazil | 45.0% (50.0%) | 45.0% (50.0%) |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 44.5% (50.0%) | 44.5% (50.0%) |
Belgo Bekaert Arames Ltda manufactures and sells a wide variety of steel wire products for various sectors, and BMB manufactures and sells mainly steel cord and beat wire for rubber reinforcement in tires.
Brazilian joint ventures: income statement | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 1\u00a0041\u00a0142 | 1\u00a0240\u00a0955 |
Operating result (EBIT) | 282\u00a0531 | 173\u00a0274 |
Interest income | 53\u00a0043 | 13\u00a0135 |
Interest expense | -17\u00a0775 | -13\u00a0762 |
Other financial income and expenses | -2\u00a0051 | -4\u00a0089 |
Income taxes | -62\u00a0360 | -31\u00a0991 |
Result for the period | 253\u00a0389 | 136\u00a0567 |
Other comprehensive income for the period | 12 | 57 |
Total comprehensive income for the period | 253\u00a0400 | 136\u00a0624 |
Depreciation and amortization | 15\u00a0803 | 19\u00a0547 |
EBITDA | 298\u00a0334 | 192\u00a0821 |
Dividends received from the entities | 44\u00a0872 | 39\u00a0558 |
Brazilian joint ventures: balance sheet | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 406\u00a0456 | 420\u00a0218 |
Non-current assets | 239\u00a0857 | 316\u00a0079 |
Current liabilities | -184\u00a0396 | -158\u00a0025 |
Non-current liabilities | -53\u00a0086 | -94\u00a0806 |
Net assets | 408\u00a0831 | 483\u00a0466 |
Brazilian joint ventures: net debt elements | ||
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 5\u00a0963 | 51\u00a0371 |
Current interest-bearing debt | 18\u00a0454 | 19\u00a0680 |
Total financial debt | 24\u00a0417 | 71\u00a0051 |
Non-current financial receivables and cash guarantees | -16\u00a0466 | -62\u00a0532 |
Cash and cash equivalents | -31\u00a0940 | -22\u00a0154 |
Net debt | -23\u00a0990 | -13\u00a0635 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling \u20ac 5.3 million (2021: \u20ac 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of \u20ac 22.0 million (2021: \u20ac 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%).
Unrecognized commitments to acquire property, plant and equipment amounted to \u20ac 8.6 million (2021: \u20ac 16.2 million), including \u20ac 4.2 million (2021: \u20ac 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of \u20ac 13.6 million (2021:\u00a0\u20ac\u00a024.9\u00a0million).
There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures.
Brazilian joint ventures: reconciliation with carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Net assets of Belgo Bekaert Arames Ltda | 301\u00a0977 | 366\u00a0385 |
Proportion of the Group's ownership interest | 45.0% | 45.0% |
Proportionate net assets | 135\u00a0890 | 164\u00a0873 |
Consolidation adjustments | 202 | 438 |
Carrying amount of the Group's interest in Belgo Bekaert Arames Ltda | 136\u00a0092 | 165\u00a0312 |
Net assets of BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 106\u00a0854 | 117\u00a0081 |
Proportion of the Group's ownership interest | 44.5% | 44.5% |
Proportionate net assets | 47\u00a0549.981 | 52\u00a0101 |
Consolidation adjustments | 971 | 1\u00a0149 |
Carrying amount of the Group's interest in BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 48\u00a0521 | 53\u00a0250 |
Carrying amount of the Group's interest in the Brazilian joint ventures | 184\u00a0613 | 218\u00a0562 |
The following table reflects aggregate information for the other joint ventures which were not deemed material in this context.
Aggregate information of the other joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
The Group's share in the result from continuing operations | -430 | -1\u00a0095 |
The Group's share of other comprehensive income | -2 | 1 |
The Group's share of total comprehensive income | -432 | -1\u00a0093 |
Aggregate carrying amount of the Group's interests in these joint ventures | 210 | -972 |
Companies forming part of the Group as at 31 December 2022\u00a0
Subsidiaries
Industrial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Advanced Cords Aalter NV | Aalter, Belgium | EUR | 100 |
Bekaert Bohum\u00edn sro | Bohum\u00edn, Czech Republic | CZK | 100 |
Bekaert Bradford UK Ltd | Bradford, United Kingdom | GBP | 100 |
Bekaert Combustion Technology BV | Assen, Netherlands | EUR | 100 |
Bekaert Heating Romania SRL | Negoiesti, Brazi Commune, Romania | RON | 100 |
Bekaert Hlohovec as | Hlohovec, Slovakia | EUR | 100 |
Bekaert Izmit \u00c7elik Kord Sanayi ve Ticaret AS | Izmit, Turkey | EUR | 100 |
Bekaert Kartepe \u00c7elik Kord Sanayi ve Ticaret AS | Kartepe, Turkey | EUR | 100 |
Bekaert Petrovice sro | Petrovice, Czech Republic | CZK | 100 |
Bekaert Sardegna SpA | Assemini, Italy | EUR | 100 |
Bekaert Slatina SRL | Slatina, Romania | RON | 100 |
Bekaert Slovakia sro | Sl\u00e1dkovi\u010dovo, Slovakia | EUR | 100 |
Bekintex NV | Wetteren, Belgium | EUR | 100 |
Bridon International GmbH | Gelsenkirchen, Germany | EUR | 100 |
Bridon International Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias del Ubierna SA | Burgos, Spain | EUR | 100 |
OOO Bekaert Lipetsk | Gryazi, Russian Federation | RUB | 100 |
VisionTek Engineering Srl | Rovereto, Italy | EUR | 100 |
North America | |||
Bekaert Corporation | Wilmington (Delaware), United States | USD | 100 |
Bridon-American Corporation | New York, United States | USD | 100 |
Latin America | |||
Acma SA | Santiago, Chile | CLP | 52 |
Acmanet SA | Talcahuano, Chile | CLP | 52 |
BBRG - Osasco Cabos Ltda | S\u00e3o Paulo, Brazil | BRL | 100 |
BIA Alambres Costa Rica SA | San Jos\u00e9-Santa Ana, Costa Rica | USD | 58 |
Ideal Alambrec SA | Quito, Ecuador | USD | 58 |
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Industrias Chilenas de Alambre - Inchalam SA | Talcahuano, Chile | CLP | 52 |
Prodinsa SA | Maip\u00fa, Chile | CLP | 100 |
Productora de Alambres Colombianos Proalco SAS | Bogot\u00e1, Colombia | COP | 40 |
Productos de Acero Cassad\u00f3 SA | Callao, Peru | USD | 38 |
Vicson SA | Valencia, Venezuela | USD | 80 |
Asia Pacific | |||
Bekaert Applied Material Technology (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Binjiang Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
Bekaert (China) Technology Research and Development Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert (Chongqing) Steel Cord Co Ltd | Chongqing, China | CNY | 100 |
Bekaert Industries Pvt Ltd | Taluka Shirur, District Pune, India | INR | 100 |
Bekaert (Jining) Steel Cord Co Ltd | Jining City, Yanzhou district (Shandong Province), China | CNY | 60 |
Bekaert Jiangyin Wire Products Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert Mukand Wire Industries Pvt Ltd | Pune, India | INR | 100 |
Bekaert New Materials (Suzhou) Co Ltd | Suzhou (Jiangsu province), China | CNY | 100 |
Bekaert (Qingdao) Wire Products Co Ltd | Qingdao (Shandong province), China | CNY | 100 |
Bekaert (Shandong) Tire Cord Co Ltd | Weihai (Shandong province), China | CNY | 100 |
Bekaert (Shenyang) Advanced Cords Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Shenyang Advanced Products Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Toko Metal Fiber Co Ltd | Tokyo, Japan | JPY | 70 |
Bekaert Vietnam Co Ltd | Son Tinh District, Quang Ngai Province, Vietnam | USD | 100 |
Bekaert Wire Ropes Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon (Hangzhou) Ropes Co Ltd | Hangzhou (Zhejiang province), China | CNY | 100 |
China Bekaert Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
PT Bekaert Indonesia | Karawang, Indonesia | USD | 100 |
PT Bekaert Wire Indonesia | Karawang, Indonesia | USD | 100 |
PT Bridon | Bekasi, West Java, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Emirates LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Figline SpA | Milano, Italy | EUR | 100 |
Bekaert France SAS | Lille, France | EUR | 100 |
Bekaert Gesellschaft mbH | Vienna, Austria | EUR | 100 |
Bekaert GmbH | Neu-Anspach, Germany | EUR | 100 |
Bekaert Middle East LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Norge AS | Oslo, Norway | NOK | 100 |
Bekaert Poland Sp z oo | Warsaw, Poland | PLN | 100 |
Bekaert (Schweiz) AG | Baden, Switzerland | CHF | 100 |
Bekaert Svenska AB | Gothenburg, Sweden | SEK | 100 |
Bridon-Bekaert ScanRope AS | Tonsberg, Norway | NOK | 100 |
Bridon Middle East FZE | Sharjah, United Arab Emirates | AED | 100 |
Bridon Scheme Trustees Ltd | Doncaster, United Kingdom | GBP | 100 |
British Ropes Ltd | Doncaster, United Kingdom | GBP | 100 |
Leon Bekaert SpA | Milano, Italy | EUR | 100 |
OOO Bekaert Wire | Moscow, Russian Federation | RUB | 100 |
Rylands-Whitecross Ltd | Bradford, United Kingdom | GBP | 100 |
Scheldestroom NV | Zwevegem, Belgium | EUR | 100 |
Twil Company | Bradford, United Kingdom | GBP | 100 |
North America | |||
Wire Rope Industries Ltd/Industries de C\u00e2bles d\u2019Acier Lt\u00e9e | Montr\u00e9al, Canada | CAD | 100 |
Latin America | |||
Bekaert Guatemala SA | Ciudad de Guatemala, Guatemala | GTQ | 58 |
Bekaert Specialty Films de Mexico SA de CV | Monterrey, Mexico | MXN | 100 |
Bekaert Trade Mexico S de RL de CV | Mexico City, Mexico | MXN | 100 |
Procables SA | Cercado de Lima, Peru | PEN | 96 |
Prodac Contrata SAC | Callao, Peru | USD | 38 |
Prodalam SA | Santiago, Chile | CLP | 52 |
Prodicom Selva SAC | Ucayali, Peru | USD | 38 |
Prodimin SAC | Lima, Peru | USD | 38 |
Specialty Films de Services Company SA de CV | Monterrey, Mexico | MXN | 100 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
Asia Pacific | |||
Bekaert Japan Co Ltd | Tokyo, Japan | JPY | 100 |
Bekaert Korea Ltd | Seoul, South-Korea | KRW | 100 |
Bekaert Malaysia Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Management (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Shah Alam Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Singapore Pte Ltd | Singapore | SGD | 100 |
Bekaert Taiwan Co Ltd | Taipei City | TWD | 100 |
Bekaert (Thailand) Co Ltd | Tambol Pluakdaeng, Amphur Pluakdaeng,Thailand | USD | 100 |
BOSFA Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon Hong Kong Ltd | Hong Kong, China | HKD | 100 |
Bridon New Zealand Ltd | Aukland, New Zealand | NZD | 100 |
Bridon Singapore (Pte) Ltd | Singapore | SGD | 100 |
Bridon (South East Asia) Ltd | Hong Kong, China | HKD | 100 |
PT Bekaert Trade Indonesia | Karawang, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Financial companies | Address | FC \u00b9 | % \u00b2 |
Acma Inversiones SA | Santiago, Chile | CLP | 100 |
BBRG Finance (UK) Ltd | Doncaster, United Kingdom | EUR | 100 |
Becare DAC | Dublin, Ireland | EUR | 100 |
Bekaert Building Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Carding Solutions Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Co\u00f6rdinatiecentrum NV | Zwevegem, Belgium | EUR | 100 |
Bekaert do Brasil Ltda | Contagem, Brazil | BRL | 100 |
Bekaert Holding Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Ib\u00e9rica Holding SL | Burgos, Spain | EUR | 100 |
Bekaert Ideal SL | Burgos, Spain | EUR | 80 |
Bekaert Investments NV | Zwevegem, Belgium | EUR | 100 |
Bekaert Investments Italia SpA | Milano, Italy | EUR | 100 |
Bekaert North America Management Corporation | Wilmington (Delaware), United States | USD | 100 |
Bekaert Services Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Singapore Holding Pte Ltd | Singapore | SGD | 100 |
Bekaert Specialty Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Stainless Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Steel Cord Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Strategic Partnerships Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Rope Industry NV | Zwevegem, Belgium | EUR | 100 |
Bridon-Bekaert Ropes Group Ltd | Doncaster, United Kingdom | EUR | 100 |
Bridon Holdings Ltd | Doncaster, United Kingdom | GBP | 100 |
Bridon Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias Acmanet Ltda | Talcahuano, Chile | CLP | 52 |
InverVicson SA | Valencia, Venezuela | USD | 80 |
Procercos SA | Talcahuano, Chile | CLP | 52 |
Joint ventures
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Latin America | |||
Agro-Bekaert Colombia SAS | Malambo - Atl\u00e1ntico, Colombia | COP | 40 |
Belgo Bekaert Arames Ltda | Contagem, Brazil | BRL | 45 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Vespasiano, Brazil | BRL | 45 |
Servicios Ideal AGF Inttegra Cia Ltda | Quito, Ecuador | USD | 29 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Netlon Sentinel Ltd | Blackburn, United Kingdom | GBP | 50 |
Asia Pacific | |||
Bekaert Engineering (India) Pvt Ltd | New Delhi, India | INR | 40 |
Financial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Agro - Bekaert Springs SL | Burgos, Spain | EUR | 40 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Changes in 2022
1. Subsidiaries acquired through business combinations
Subsidiaries | Address | % \u00b9 |
VisionTek Engineering Srl | Rovereto, Italy | 100 |
2. Mergers
Subsidiaries | Merged into |
Sujetar del Peru SAC | Productos de Acero Cassad\u00f3 SA |
3. Liquidated
Companies | Address |
Bekaert AS | Hellerup, Denmark |
Bekaert Architectural Design Consulting (Shanghai) Co Ltd | Shanghai, China |
Bekaert Heating Technology (Suzhou) Co Ltd | Taicang City (Jiangsu province), China |
In accordance with Belgian legislation, the table below lists the registered numbers of the Belgian companies.
Companies | Company number |
Bekaert Advanced Cords Aalter NV | BTW BE 0645.654.071 RPR Gent, division Gent |
Bekaert Co\u00f6rdinatiecentrum NV | BTW BE 0426.824.150 RPR Gent, division Kortrijk |
Bekaert Investments NV | BTW BE 0406.207.096 RPR Gent, division Kortrijk |
Bekaert Wire Rope Industry NV | BTW BE 0550.983.358 RPR Gent, division Kortrijk |
Bekintex NV | BTW BE 0452.746.609 RPR Gent, division Dendermonde |
NV Bekaert SA | BTW BE 0405.388.536 RPR Gent, division Kortrijk |
Scheldestroom NV | BTW BE 0403.676.188 RPR Gent, division Kortrijk |
In 2022, the share in the result of joint ventures and associates reflected the drop in performance of both Steel Wire Solutions and Rubber Reinforcement businesses in Brazil compared to the very strong performance of both in 2021. Moreover, Belgo Bekaert Arames Ltda was able in 2021 to recover BRL 670 million of indirect tax credits (PIS/COFINS) from the past, resulting in a one-time net impact of BRL 485\u00a0million (\u20ac\u00a034.2 million equivalent for the Bekaert share). The decrease in performance was slightly compensated by the increase in value of the Brazilian real against the euro (average rate increased by 14.7% from 2021 to 2022). This increase in YTD average rate 2022 versus 2021 was mainly caused by a significant increase in the course of 2022, while in 2021, the rate remained more or less stable.
Additional information relating to the Brazilian joint ventures is provided under note 6.5. \u2018Investments in joint ventures and associates\u2019.
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | -390 | -1\u00a0135 |
Agro - Bekaert Springs, SL | Spain | -6 | -7 |
Belgo Bekaert Arames Ltda | Brazil | 99\u00a0349 | 55\u00a0568 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 8\u00a0701 | -217 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | -34 | 48 |
Total | 107\u00a0619 | 54\u00a0257 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 120\u00a0181 | 184\u00a0823 |
Capital increases and decreases | \u2014 | -144 |
Result for the year | 107\u00a0619 | 54\u00a0257 |
Dividends | -44\u00a0872 | -39\u00a0558 |
Exchange gains and losses | 1\u00a0891 | 18\u00a0186 |
Other comprehensive income | 3 | 27 |
As at 31 December | 184\u00a0823 | 217\u00a0590 |
For an analysis of the result for the year, please refer to note 5.7. \u2018Share in the results of joint ventures and associates\u2019.
Exchange gains and losses related mainly to the evolution of the Brazilian real versus the euro. In 2022, the Brazilian real increased significantly in value against the euro (5.6 BRL/EUR end 2022) while it remained more or less stable in 2021 (6.3 BRL/EUR end 2021 vs 6.4 BRL/EUR end 2020).
Cost | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 3\u00a0800 | 3\u00a0838 |
Exchange gains and losses | 38 | 457 |
As at 31 December | 3\u00a0838 | 4\u00a0295 |
Carrying amount of related goodwill as at 31 December | 3\u00a0838 | 4\u00a0295 |
Total carrying amount of investments in joint ventures as at 31 December | 188\u00a0661 | 221\u00a0886 |
See Note 6.2 \u2018Goodwill\u2019 for details per entity.
The Group\u2019s share in the equity of joint ventures is analyzed as follows:
in thousands of \u20ac | 2021 | 2022 | |
Joint ventures | |||
Agro-Bekaert Colombia SAS | Colombia | 56 | -284 |
Agro - Bekaert Springs, SL | Spain | 13 | -744 |
Belgo Bekaert Arames Ltda | Brazil | 136\u00a0092 | 165\u00a0312 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 48\u00a0521 | 53\u00a0250 |
Servicios Ideal AGF Inttegra C\u00eda Ltda | Ecuador | 140 | 56 |
Total for joint ventures excluding related goodwill | 184\u00a0822 | 217\u00a0590 | |
Carrying amount of related goodwill | 3\u00a0838 | 4\u00a0295 | |
Total for joint ventures including related goodwill | 188\u00a0661 | 221\u00a0886 |
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on material joint ventures. The two Brazilian joint ventures have been aggregated in order to emphasize the predominance of the partnership with ArcelorMittal when analyzing the relative importance of the joint ventures.
Proportion of ownership interest (and voting rights) held by the Group at year-end
Name of joint venture | |||
in thousands of \u20ac | Country | 2021 | 2022 |
Belgo Bekaert Arames Ltda | Brazil | 45.0% (50.0%) | 45.0% (50.0%) |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Brazil | 44.5% (50.0%) | 44.5% (50.0%) |
Belgo Bekaert Arames Ltda manufactures and sells a wide variety of steel wire products for various sectors, and BMB manufactures and sells mainly steel cord and beat wire for rubber reinforcement in tires.
Brazilian joint ventures: income statement | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 1\u00a0041\u00a0142 | 1\u00a0240\u00a0955 |
Operating result (EBIT) | 282\u00a0531 | 173\u00a0274 |
Interest income | 53\u00a0043 | 13\u00a0135 |
Interest expense | -17\u00a0775 | -13\u00a0762 |
Other financial income and expenses | -2\u00a0051 | -4\u00a0089 |
Income taxes | -62\u00a0360 | -31\u00a0991 |
Result for the period | 253\u00a0389 | 136\u00a0567 |
Other comprehensive income for the period | 12 | 57 |
Total comprehensive income for the period | 253\u00a0400 | 136\u00a0624 |
Depreciation and amortization | 15\u00a0803 | 19\u00a0547 |
EBITDA | 298\u00a0334 | 192\u00a0821 |
Dividends received from the entities | 44\u00a0872 | 39\u00a0558 |
Brazilian joint ventures: balance sheet | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 406\u00a0456 | 420\u00a0218 |
Non-current assets | 239\u00a0857 | 316\u00a0079 |
Current liabilities | -184\u00a0396 | -158\u00a0025 |
Non-current liabilities | -53\u00a0086 | -94\u00a0806 |
Net assets | 408\u00a0831 | 483\u00a0466 |
Brazilian joint ventures: net debt elements | ||
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 5\u00a0963 | 51\u00a0371 |
Current interest-bearing debt | 18\u00a0454 | 19\u00a0680 |
Total financial debt | 24\u00a0417 | 71\u00a0051 |
Non-current financial receivables and cash guarantees | -16\u00a0466 | -62\u00a0532 |
Cash and cash equivalents | -31\u00a0940 | -22\u00a0154 |
Net debt | -23\u00a0990 | -13\u00a0635 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling \u20ac 5.3 million (2021: \u20ac 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of \u20ac 22.0 million (2021: \u20ac 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%).
Unrecognized commitments to acquire property, plant and equipment amounted to \u20ac 8.6 million (2021: \u20ac 16.2 million), including \u20ac 4.2 million (2021: \u20ac 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of \u20ac 13.6 million (2021:\u00a0\u20ac\u00a024.9\u00a0million).
There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures.
Brazilian joint ventures: reconciliation with carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Net assets of Belgo Bekaert Arames Ltda | 301\u00a0977 | 366\u00a0385 |
Proportion of the Group's ownership interest | 45.0% | 45.0% |
Proportionate net assets | 135\u00a0890 | 164\u00a0873 |
Consolidation adjustments | 202 | 438 |
Carrying amount of the Group's interest in Belgo Bekaert Arames Ltda | 136\u00a0092 | 165\u00a0312 |
Net assets of BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 106\u00a0854 | 117\u00a0081 |
Proportion of the Group's ownership interest | 44.5% | 44.5% |
Proportionate net assets | 47\u00a0549.981 | 52\u00a0101 |
Consolidation adjustments | 971 | 1\u00a0149 |
Carrying amount of the Group's interest in BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | 48\u00a0521 | 53\u00a0250 |
Carrying amount of the Group's interest in the Brazilian joint ventures | 184\u00a0613 | 218\u00a0562 |
The following table reflects aggregate information for the other joint ventures which were not deemed material in this context.
Aggregate information of the other joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
The Group's share in the result from continuing operations | -430 | -1\u00a0095 |
The Group's share of other comprehensive income | -2 | 1 |
The Group's share of total comprehensive income | -432 | -1\u00a0093 |
Aggregate carrying amount of the Group's interests in these joint ventures | 210 | -972 |
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. Transactions with other related parties are disclosed below.
Transactions with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Sales of goods | 13\u00a0231 | 21\u00a0951 |
Purchases of goods | 18\u00a0509 | 21\u00a0152 |
Services rendered | 81 | 64 |
Royalties and management fees received | 14\u00a0981 | 18\u00a0374 |
Interest and similar income | \u2014 | 6 |
Dividends received | 44\u00a0847 | 42\u00a0508 |
Outstanding balances with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Trade receivables | 6\u00a0116 | 6\u00a0592 |
Other current receivables \u00b9 | 27\u00a0452 | 5\u00a0881 |
Trade payables | 4\u00a0945 | 3\u00a0557 |
Other current payables | 54 | \u2014 |
\u00b9 The other current receivables are at year-end 2021 significantly higher due to outstanding receivables for dividends from the Brazilian joint ventures (\u20ac\u00a027.5 million).
None of the related parties have entered into any other transactions with the Group that meet the requirements of IAS 24 \u2018Related Party Disclosures\u2019. The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm\u2019s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. Advances have been received for ongoing capex projects. More information on transactions with joint ventures are disclosed in note 6.5. \u2018Investments in joint ventures and associates\u2019.
Joint ventures
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Latin America | |||
Agro-Bekaert Colombia SAS | Malambo - Atl\u00e1ntico, Colombia | COP | 40 |
Belgo Bekaert Arames Ltda | Contagem, Brazil | BRL | 45 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Vespasiano, Brazil | BRL | 45 |
Servicios Ideal AGF Inttegra Cia Ltda | Quito, Ecuador | USD | 29 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Netlon Sentinel Ltd | Blackburn, United Kingdom | GBP | 50 |
Asia Pacific | |||
Bekaert Engineering (India) Pvt Ltd | New Delhi, India | INR | 40 |
Financial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Agro - Bekaert Springs SL | Burgos, Spain | EUR | 40 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Cost | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
in thousands of \u20ac | ||||||
As at 1 January 2021 | 1\u00a0153\u00a0100 | 2\u00a0775\u00a0614 | 108\u00a0112 | 16\u00a0298 | 84\u00a0023 | 4\u00a0137\u00a0147 |
Expenditure | 22\u00a0434 | 60\u00a0371 | 6\u00a0768 | 370 | 63\u00a0107 | 153\u00a0050 |
Disposals and retirements | -21\u00a0252 | -52\u00a0833 | -3\u00a0724 | -417 | -57 | -78\u00a0283 |
Merger / Split | 5\u00a0537 | 2\u00a0223 | 49 | \u2014 | \u2014 | 7\u00a0809 |
Transfers \u00b9 | \u2014 | \u2014 | 105 | \u2014 | -937 | -832 |
Reclassification to (-) / from held for sale \u00b2 | -1\u00a0551 | -278 | \u2014 | -451 | \u2014 | -2\u00a0280 |
Exchange gains and losses (-) | 61\u00a0060 | 167\u00a0912 | 4\u00a0626 | 167 | 4\u00a0955 | 238\u00a0720 |
As at 31 December 2021 | 1\u00a0219\u00a0328 | 2\u00a0953\u00a0008 | 115\u00a0937 | 15\u00a0968 | 151\u00a0091 | 4\u00a0455\u00a0332 |
As at 1 January 2022 | 1\u00a0219\u00a0328 | 2\u00a0953\u00a0008 | 115\u00a0937 | 15\u00a0968 | 151\u00a0091 | 4\u00a0455\u00a0332 |
Expenditure | 39\u00a0662 | 97\u00a0378 | 4\u00a0517 | 1\u00a0779 | 26\u00a0524 | 169\u00a0860 |
Disposals and retirements | -4\u00a0028 | -18\u00a0481 | -4\u00a0393 | -508 | -1 | -27\u00a0410 |
New consolidations | 440 | 210 | 18 | 3 | 81 | 752 |
Transfers \u00b9 | 4\u00a0655 | 77 | 21 | \u2014 | -43 | 4\u00a0711 |
Reclassification to (-) / from held for sale \u00b2 | \u2014 | 278 | \u2014 | 451 | 274 | 1\u00a0003 |
Exchange gains and losses (-) | 10\u00a0781 | 8\u00a0833 | 407 | -82 | 6\u00a0184 | 26\u00a0124 |
As at 31 December 2022 | 1\u00a0270\u00a0838 | 3\u00a0041\u00a0305 | 116\u00a0506 | 17\u00a0611 | 184\u00a0110 | 4\u00a0630\u00a0371 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and \u2018Property, plant and equipment\u2019.
\u00b2 In 2021, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site; in 2022 this again relates to the plant, machinery and equipment of the Ingelmunster (Belgium) site and property received as payment by customers in Ecuador (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets').
Accumulated depreciation and impairment | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
in thousands of \u20ac | ||||||
As at 1 January 2021 | 634\u00a0755 | 2\u00a0207\u00a0291 | 92\u00a0087 | 5\u00a0246 | \u2014 | 2\u00a0939\u00a0379 |
Charge for the year | 41\u00a0600 | 101\u00a0370 | 7\u00a0704 | 755 | \u2014 | 151\u00a0429 |
Impairment losses | \u2014 | 1\u00a0077 | 158 | 9 | \u2014 | 1\u00a0244 |
Reversal impairment losses and depreciations | \u2014 | -2\u00a0760 | -2 | \u2014 | \u2014 | -2\u00a0762 |
Disposals and retirements | -19\u00a0345 | -49\u00a0080 | -3\u00a0591 | -208 | \u2014 | -72\u00a0225 |
Transfers \u00b9 | \u2014 | \u2014 | 78 | \u2014 | \u2014 | 78 |
Reclassification to (-) / from held for sale \u00b2 | -744 | -148 | \u2014 | -89 | \u2014 | -981 |
Exchange gains (-) and losses | 37\u00a0566 | 137\u00a0913 | 4\u00a0046 | 85 | \u2014 | 179\u00a0611 |
As at 31 December 2021 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
As at 1 January 2022 | 693\u00a0833 | 2\u00a0395\u00a0662 | 100\u00a0479 | 5\u00a0798 | \u2014 | 3\u00a0195\u00a0772 |
Charge for the year | 44\u00a0719 | 102\u00a0714 | 7\u00a0067 | 789 | \u2014 | 155\u00a0289 |
Impairment losses | 9\u00a0541 | 48\u00a0346 | 119 | \u2014 | \u2014 | 58\u00a0006 |
Reversal impairment losses and depreciations | \u2014 | -231 | \u2014 | \u2014 | \u2014 | -231 |
Disposals and retirements | -3\u00a0240 | -18\u00a0005 | -4\u00a0267 | -115 | \u2014 | -25\u00a0627 |
Transfers \u00b9 | \u2014 | 63 | 21 | \u2014 | \u2014 | 84 |
Reclassification to (-) / from held for sale \u00b2 | \u2014 | 148 | \u2014 | 89 | \u2014 | 237 |
Exchange gains (-) and losses | 3\u00a0218 | 336 | 263 | -30 | \u2014 | 3\u00a0786 |
As at 31 December 2022 | 748\u00a0070 | 2\u00a0529\u00a0033 | 103\u00a0682 | 6\u00a0531 | \u2014 | 3\u00a0387\u00a0317 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and 'Right-of-use property, plant and equipment' (see note 6.4. 'Rights-of-use (RoU) property, plant and equipment) and \u2018Property, plant and equipment\u2019.
\u00b2 In 2021 and 2022, the reclassification to held for sale mainly related to the Ingelmunster (Belgium) site (see note 6.12. 'Assets classified as held for sale and liabilities associated with those assets').
Cost | ||||||
in thousands of \u20ac | Land and buildings | Plant, machinery and equipment | Furniture and vehicles | Other PP&E | Assets under construction | Total |
Carrying amount as at 31 December 2021 before investment grants | 525\u00a0495 | 557\u00a0346 | 15\u00a0457 | 10\u00a0169 | 151\u00a0091 | 1\u00a0259\u00a0559 |
Net investment grants | -4\u00a0780 | -922 | \u2014 | \u2014 | \u2014 | -5\u00a0702 |
Carry amount as at 31 December 2021 | 520\u00a0716 | 556\u00a0424 | 15\u00a0457 | 10\u00a0169 | 151\u00a0091 | 1\u00a0253\u00a0857 |
Carrying amount as at 31 December 2022 before investment grants | 522\u00a0768 | 512\u00a0273 | 12\u00a0824 | 11\u00a0078 | 184\u00a0110 | 1\u00a0243\u00a0054 |
Net investment grants | -4\u00a0218 | -794 | \u2014 | \u2014 | \u2014 | -5\u00a0012 |
Carry amount as at 31 December 2022 | 518\u00a0551 | 511\u00a0479 | 12\u00a0824 | 11\u00a0078 | 184\u00a0110 | 1\u00a0238\u00a0041 |
Capital expenditure included capacity expansions and equipment upgrades across the group, but particularly in Rubber Reinforcement (in its plants in EMEA and China, as well as the start-up of its green field in Vietnam). Capital expenditure in the Steel Wire Solutions business was mainly in Central Europe, Latin America, USA and China. In the Specialty Businesses segment, expansion capital expenditure was in Central Europe (Building Products) and in China (Fiber Technologies), while improvement capital expenditure was in the European plants of Combustion Technologies and Hose & Conveyor Belt Solutions. Finally, capital expenditure in BBRG was mainly in its UK- and USA -based Ropes entities and in Advanced Cords plants.
The ending balance of Assets under Construction per year-end 2022 related to a few big expansion projects (such as the plant in Vietnam, the expansions in USA, the Steel Wire Solutions plants in Central and Eastern Europe and the expansion in Advanced Cords) but predominantly to a lot of smaller capital expenditure projects in all of the Bekaert entities which were still in the finalization phase.
In 2022, impairment losses have been recorded in Rubber Reinforcement (Russia), BBRG (Germany) and Specialty Businesses (Building Products Russia). Following the situation in Russia, management has performed an impairment analysis using updated business plans and a discount factor adjusted for the increased country and activity risk. Based on the outcome of this analysis an impairment of \u20ac 54 million has been recorded on Property, Plant and Equipment.
This note provides information for leases where the group is a lessee. In principal, the Group does not act as a lessor.
The balance sheet showed the following roll-forward during the year relating to right-of-use assets:
Cost | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
in thousands of \u20ac | ||||||||
As at 1 January 2021 | 71\u00a0376 | 73\u00a0686 | 3\u00a0206 | 17\u00a0494 | 22\u00a0624 | 1\u00a0730 | 589 | 190\u00a0704 |
New leases / extensions | \u2014 | 6\u00a0123 | 782 | 7\u00a0116 | 4\u00a0184 | 398 | 144 | 18\u00a0748 |
Ending contracts / reductions in contract term | -985 | -2\u00a0966 | -104 | -3\u00a0017 | -4\u00a0229 | \u2014 | -241 | -11\u00a0542 |
Transfers \u00b9 | \u2014 | \u2014 | \u2014 | \u2014 | -105 | \u2014 | \u2014 | -105 |
Exchange gains and losses (-) | 7\u00a0554 | 2\u00a0817 | 59 | 416 | 324 | 121 | 32 | 11\u00a0323 |
As at 31 December 2021 | 77\u00a0945 | 79\u00a0661 | 3\u00a0943 | 22\u00a0009 | 22\u00a0798 | 2\u00a0249 | 523 | 209\u00a0129 |
As at 1 January 2022 | 77\u00a0945 | 79\u00a0661 | 3\u00a0943 | 22\u00a0009 | 22\u00a0798 | 2\u00a0249 | 523 | 209\u00a0129 |
New leases / extensions | 6 | 16\u00a0532 | 465 | 8\u00a0481 | 6\u00a0845 | 725 | 686 | 33\u00a0740 |
Ending contracts / reductions in contract term | -21 | -16\u00a0644 | -394 | -4\u00a0513 | -6\u00a0007 | -201 | -178 | -27\u00a0957 |
Transfers \u00b9 | \u2014 | -4\u00a0655 | -77 | \u2014 | -21 | \u2014 | \u2014 | -4\u00a0753 |
Exchange gains and losses (-) | -34 | -1\u00a0211 | 117 | 454 | 80 | 38 | -36 | -592 |
As at 31 December 2022 | 77\u00a0896 | 73\u00a0684 | 4\u00a0053 | 26\u00a0431 | 23\u00a0696 | 2\u00a0811 | 995 | 209\u00a0566 |
Accumulated depreciation and impairment | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
in thousands of \u20ac | ||||||||
As at 1 January 2021 | 17\u00a0201 | 22\u00a0219 | 1\u00a0055 | 7\u00a0026 | 9\u00a0852 | 590 | 155 | 58\u00a0097 |
Charge for the year | 1\u00a0381 | 10\u00a0211 | 979 | 5\u00a0169 | 5\u00a0950 | 433 | 88 | 24\u00a0210 |
Ending contracts | -273 | -2\u00a0418 | -75 | -2\u00a0520 | -3\u00a0291 | \u2014 | -15 | -8\u00a0592 |
Transfers \u00b9 | \u2014 | \u2014 | \u2014 | \u2014 | -78 | \u2014 | \u2014 | -78 |
Exchange gains (-) and losses | 1\u00a0968 | 1\u00a0066 | 12 | 162 | 152 | 49 | 10 | 3\u00a0418 |
As at 31 December 2021 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
As at 1 January 2022 | 20\u00a0277 | 31\u00a0077 | 1\u00a0971 | 9\u00a0836 | 12\u00a0585 | 1\u00a0072 | 238 | 77\u00a0056 |
Charge for the year | 1\u00a0494 | 11\u00a0033 | 1\u00a0031 | 6\u00a0627 | 5\u00a0984 | 554 | 126 | 26\u00a0849 |
Impairment losses | \u2014 | \u2014 | \u2014 | \u2014 | 112 | \u2014 | \u2014 | 112 |
Reversal impairment losses and depreciations | \u2014 | -161 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | -161 |
Ending contracts | -14 | -14\u00a0264 | -394 | -4\u00a0252 | -5\u00a0431 | -201 | -132 | -24\u00a0688 |
Transfers \u00b9 | \u2014 | \u2014 | -31 | \u2014 | -21 | \u2014 | \u2014 | -53 |
Exchange gains (-) and losses | -273 | -311 | 52 | 180 | 42 | 16 | -6 | -300 |
As at 31 December 2022 | 21\u00a0484 | 27\u00a0374 | 2\u00a0628 | 12\u00a0392 | 13\u00a0270 | 1\u00a0440 | 227 | 78\u00a0816 |
\u00b9 Total transfers equal zero when aggregating the balances of \u2018Intangible assets\u2019 (see note 6.1. 'Intangible assets') and \u2018Property, plant and equipment\u2019 (see note 6.3. 'Property, plant and equipment') and 'Right-of-use property, plant and equipment'.
in thousands of \u20ac | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
Carrying amount as at 31 December 2021 | 57\u00a0668 | 48\u00a0584 | 1\u00a0972 | 12\u00a0172 | 10\u00a0214 | 1\u00a0178 | 285 | 132\u00a0073 |
Carrying amount as at 31 December 2022 | 56\u00a0412 | 46\u00a0309 | 1\u00a0425 | 14\u00a0039 | 10\u00a0425 | 1\u00a0371 | 768 | 130\u00a0750 |
The Group leases various plants, offices, warehouses, equipment, industrial vehicles, company cars, servers and small office equipment like printers and computers. Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of company cars and industrial vehicles for which the Group is a lessee, it has elected not to separate lease and non-lease components and instead account for these as a single lease component. The main non-lease components included in the lease component relate to costs for maintenance and for replacement of tires. The Group applied the practical expedient for low value assets to leases of printers and small office equipment. The Group also applied the practical expedient for short term leases (defined as leases with a lease term of 12 months or less). There were no contracts with dismantling costs, residual value guarantees or initial direct costs, nor contracts with variable lease expenses other then those linked to an index or rate.
Additions to RoU buildings included new contracts for factories, warehouses and offices, mainly in the United Kingdom, India and China. Some contracts were ended, mainly in Norway, China and the United KIngdom.
The average lease term for the RoU assets (excluding the RoU land) was 9.3 years (2021:\u00a09.9 years). RoU buildings had an average lease term of 13 years (2021:\u00a013 years) and the other categories of PP&E (excluding land) had an average lease term between 4 and 6 years.
RoU land relates to land use rights that were paid in advance and had an average useful live of 54 years.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee\u2019s incremental borrowing rate is used to discount the future lease payments. The incremental borrowing rate is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The incremental borrowing rate is determined by Group Treasury, taking into account the market rate per currency for different relevant time buckets and the credit margin for each individual company based on its credit rating. The incremental borrowing rate is calculated as the total of both elements. The weighted average discount rate at the end of 2021 was 4.39% (2021:\u00a04.01%).
The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. For further information on the lease liability, we refer to note 6.18. \u2018Interest-bearing debt\u2019.
The Group is exposed to potential future increases in variable lease payments, based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Right-of-use assets were generally depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-line basis.
The income statement showed the following amounts relating to leases:
2021 | ||||||||
in thousands of \u20ac | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
Depreciation charge of right-of-use assets | -1\u00a0381 | -10\u00a0211 | -979 | -5\u00a0169 | -5\u00a0950 | -433 | -88 | -24\u00a0210 |
Interest expense (included in finance cost) | -3\u00a0152 | |||||||
Expense relating to short-term leases | -837 | |||||||
Expense relating to low-value leases | -727 | |||||||
Total | -28\u00a0926 |
2022 | ||||||||
in thousands of \u20ac | RoU land | RoU buildings | RoU plant, machinery and equipment | RoU industrial vehicles | RoU company cars | RoU office equipment | RoU other PP&E | Total |
Depreciation charge of right-of-use assets | -1\u00a0494 | -11\u00a0033 | -1\u00a0031 | -6\u00a0627 | -5\u00a0984 | -554 | -126 | -26\u00a0849 |
Interest expense (included in finance cost) | -3\u00a0269 | |||||||
Expense relating to short-term leases | -1\u00a0054 | |||||||
Expense relating to low-value leases | -1\u00a0021 | |||||||
Total | -32\u00a0193 |
The remaining operating lease expenses in the operating result mainly related to costs linked to leased assets such as fuel for company cars, non-deductible VAT on company car contracts and property taxes on buildings.
In accordance with the disclosure requirements of IAS 7 \u2018Statement of Cash Flows\u2019, this section presents an overview of the changes in liabilities arising from financing activities. The qualification as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash flow statement, the cash flows from long-term interest-bearing debt are analyzed between proceeds and repayments.
In 2022, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 33.5 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
In 2021, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 19.6 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019), and interest accruals from amortizations on liabilities using the effective interest method (\u20ac 4.9 million). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
2021 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 1\u00a0380\u00a0866 | -416\u00a0174 | \u2014 | 3\u00a0619 | \u2014 | 24\u00a0802 | 993\u00a0114 |
Cash guarantees received | 171 | 12 | \u2014 | 20 | \u2014 | \u2014 | 204 |
Lease liability | 80\u00a0505 | -26\u00a0290 | \u2014 | 2\u00a0805 | \u2014 | 19\u00a0624 | 76\u00a0644 |
Credit institutions | 205\u00a0463 | -9\u00a0896 | \u2014 | 794 | \u2014 | \u2014 | 196\u00a0361 |
Schuldschein loans | 319\u00a0635 | \u2014 | \u2014 | \u2014 | \u2014 | 270 | 319\u00a0905 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | 375\u00a0092 | -380\u00a0000 | \u2014 | \u2014 | \u2014 | 4\u00a0908 | \u2014 |
Short-term interest bearing debt | 228\u00a0865 | -43\u00a0328 | \u2014 | 12\u00a0672 | \u2014 | \u2014 | 198\u00a0210 |
Total financial debt | 1\u00a0609\u00a0732 | -459\u00a0501 | \u2014 | 16\u00a0291 | \u2014 | 24\u00a0802 | 1\u00a0191\u00a0324 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 1\u00a0081 | \u2014 | \u2014 | \u2014 | -964 | \u2014 | 118 |
Cross-currency interest-rate swaps | -5\u00a0030 | \u2014 | \u2014 | \u2014 | 6\u00a0675 | \u2014 | 1\u00a0645 |
Other liabilities from financing activities | |||||||
Conversion derivative | 34 | \u2014 | \u2014 | \u2014 | -34 | \u2014 | \u2014 |
Total liabilities from financing activities | 1\u00a0605\u00a0817 | -459\u00a0501 | \u2014 | 16\u00a0291 | 5\u00a0677 | 24\u00a0802 | 1\u00a0193\u00a0087 |
\u00b9\u00a0 Including the current portion of non-current interest-bearing debt of \u20ac 412.8 million as at 1 January and \u20ac 39.5 million as at 31 December.
2022 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 993\u00a0114 | -75\u00a0577 | \u2014 | 2\u00a0107 | \u2014 | 33\u00a0974 | 953\u00a0618 |
Cash guarantees received | 204 | 11 | \u2014 | -5 | \u2014 | \u2014 | 210 |
Lease liability | 76\u00a0644 | -31\u00a0704 | \u2014 | -1\u00a0434 | \u2014 | 33\u00a0699 | 77\u00a0205 |
Credit institutions | 196\u00a0361 | -43\u00a0885 | \u2014 | 3\u00a0546 | \u2014 | \u2014 | 156\u00a0023 |
Schuldschein loans | 319\u00a0905 | \u2014 | \u2014 | \u2014 | \u2014 | 275 | 320\u00a0179 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Short-term interest bearing debt | 198\u00a0210 | 67\u00a0349 | 614 | 16\u00a0205 | \u2014 | \u2014 | 282\u00a0378 |
Total financial debt | 1\u00a0191\u00a0324 | -8\u00a0228 | 614 | 18\u00a0312 | \u2014 | 33\u00a0974 | 1\u00a0235\u00a0996 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 118 | \u2014 | \u2014 | \u2014 | -7\u00a0295 | \u2014 | -7\u00a0178 |
Cross-currency interest-rate swaps | 1\u00a0645 | \u2014 | \u2014 | \u2014 | -4\u00a0290 | \u2014 | -2\u00a0645 |
Total liabilities from financing activities | 1\u00a0193\u00a0087 | -8\u00a0228 | 614 | 18\u00a0312 | -11\u00a0586 | 33\u00a0974 | 1\u00a0226\u00a0173 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling \u20ac 5.3 million (2021: \u20ac 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of \u20ac 22.0 million (2021: \u20ac 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%).
Unrecognized commitments to acquire property, plant and equipment amounted to \u20ac 8.6 million (2021: \u20ac 16.2 million), including \u20ac 4.2 million (2021: \u20ac 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of \u20ac 13.6 million (2021:\u00a0\u20ac\u00a024.9\u00a0million).
There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures.
As at 31 December, the important contingencies and commitments were:
in thousands of \u20ac | 2021 | 2022 |
Contingent liabilities | 4\u00a0200 | 6\u00a0840 |
Commitments to purchase fixed assets | 48\u00a0984 | 67\u00a0935 |
Commitments to invest in venture capital funds | 3\u00a0269 | 2\u00a0600 |
The Brazilian joint ventures have been facing claims relating to indirect tax credits (ICMS) totaling \u20ac 5.3 million (2021: \u20ac 5.0 million). Several other tax claims, most of which date back several years, were filed for a total nominal amount of \u20ac 22.0 million (2021: \u20ac 18.6 million). Evidently, any potential gains and losses resulting from the above mentioned contingencies would only affect the Group to the extent of their interest in the joint ventures involved (i.e. 45%).
Unrecognized commitments to acquire property, plant and equipment amounted to \u20ac 8.6 million (2021: \u20ac 16.2 million), including \u20ac 4.2 million (2021: \u20ac 12.4 million) from other Bekaert companies. Furthermore, the Brazilian joint ventures have unrecognized commitments to purchase electricity over the next five years for an aggregate amount of \u20ac 13.6 million (2021:\u00a0\u20ac\u00a024.9\u00a0million).
There were no restrictions to transfer funds in the form of cash and dividends. Bekaert had no commitments or contingent liabilities versus its Brazilian joint ventures.
As at 31 December, the important contingencies and commitments were:
in thousands of \u20ac | 2021 | 2022 |
Contingent liabilities | 4\u00a0200 | 6\u00a0840 |
Commitments to purchase fixed assets | 48\u00a0984 | 67\u00a0935 |
Commitments to invest in venture capital funds | 3\u00a0269 | 2\u00a0600 |
in thousands of \u20ac | 2021 | 2022 |
Non-current financial receivables and cash guarantees | 10\u00a0192 | 9\u00a0665 |
Reimbursement rights and other non-current amounts receivable | 2\u00a0522 | 2\u00a0705 |
Derivatives (cf. note 7.2.) | 13\u00a0244 | 14\u00a0678 |
Overfunded employee benefit plans - non-current | 19\u00a0847 | 12\u00a0243 |
Equity investments at FVTOCI | 20\u00a0081 | 26\u00a0023 |
Total other non-current assets | 65\u00a0886 | 65\u00a0314 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 13\u00a0372 | 20\u00a0081 |
Expenditure | 863 | 8\u00a0613 |
Disposals | \u2014 | -76 |
Fair value changes | 5\u00a0847 | -2\u00a0595 |
As at 31 December | 20\u00a0081 | 26\u00a0023 |
The equity investments designated as at fair value through OCI (FVTOCI) in accordance with IFRS 9 \u2018Financial Instruments\u2019 mainly\u00a0consisted of:
\u2022Shougang Concord Century Holdings Ltd, a Hong Kong Stock Exchange listed company (\u20ac\u00a06.6 million). On this investment, an decrease in fair value of \u20ac\u00a03.2\u00a0million was recognized through OCI (2021: increase of \u20ac\u00a03.9\u00a0million).
\u2022Bekaert Xinyu Metal Products Co Ltd (\u20ac\u00a06.5 million). On this investment, an decrease in fair value of \u20ac\u00a01.5\u00a0million was recognized through OCI (2021: an increase of \u20ac\u00a02.0\u00a0million).
\u2022Transportes Puelche Ltda (\u20ac\u00a00.5 million), an investment held by Acma SA and Prodalam SA (Chile).
\u2022Pajarito Powder LLC (\u20ac\u00a03.9\u00a0million), a new investment held by Bekaert Corporation (US).
in thousands of \u20ac | 2021 | 2022 |
Non-current financial receivables and cash guarantees | 10\u00a0192 | 9\u00a0665 |
Reimbursement rights and other non-current amounts receivable | 2\u00a0522 | 2\u00a0705 |
Derivatives (cf. note 7.2.) | 13\u00a0244 | 14\u00a0678 |
Overfunded employee benefit plans - non-current | 19\u00a0847 | 12\u00a0243 |
Equity investments at FVTOCI | 20\u00a0081 | 26\u00a0023 |
Total other non-current assets | 65\u00a0886 | 65\u00a0314 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 13\u00a0372 | 20\u00a0081 |
Expenditure | 863 | 8\u00a0613 |
Disposals | \u2014 | -76 |
Fair value changes | 5\u00a0847 | -2\u00a0595 |
As at 31 December | 20\u00a0081 | 26\u00a0023 |
The equity investments designated as at fair value through OCI (FVTOCI) in accordance with IFRS 9 \u2018Financial Instruments\u2019 mainly\u00a0consisted of:
\u2022Shougang Concord Century Holdings Ltd, a Hong Kong Stock Exchange listed company (\u20ac\u00a06.6 million). On this investment, an decrease in fair value of \u20ac\u00a03.2\u00a0million was recognized through OCI (2021: increase of \u20ac\u00a03.9\u00a0million).
\u2022Bekaert Xinyu Metal Products Co Ltd (\u20ac\u00a06.5 million). On this investment, an decrease in fair value of \u20ac\u00a01.5\u00a0million was recognized through OCI (2021: an increase of \u20ac\u00a02.0\u00a0million).
\u2022Transportes Puelche Ltda (\u20ac\u00a00.5 million), an investment held by Acma SA and Prodalam SA (Chile).
\u2022Pajarito Powder LLC (\u20ac\u00a03.9\u00a0million), a new investment held by Bekaert Corporation (US).
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Financial receivables and cash guarantees | 6\u00a0475 | 6\u00a0352 |
Advances paid | 19\u00a0988 | 14\u00a0547 |
Derivatives (cf.note 7.2.) | 1\u00a0416 | 5\u00a0694 |
Deferred charges and accrued income | 14\u00a0394 | 28\u00a0948 |
As at 31 December | 42\u00a0272 | 55\u00a0541 |
The financial receivables and cash guarantees mainly related to receivables from the disposal of the majority stake in the rubber reinforcement plant Sumar\u00e9 (Brazil) in 2017 (\u20ac\u00a03.8\u00a0million\u00a0(2021:\u00a0\u20ac\u00a04.6\u00a0million)) and various cash guarantees (\u20ac\u00a01.1\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.5\u00a0million)).
The advances paid mainly related to advance payments in the context of large capex projects and advance payments for deliveries of wire rod.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 13\u00a0372 | 20\u00a0081 |
Expenditure | 863 | 8\u00a0613 |
Disposals | \u2014 | -76 |
Fair value changes | 5\u00a0847 | -2\u00a0595 |
As at 31 December | 20\u00a0081 | 26\u00a0023 |
The equity investments designated as at fair value through OCI (FVTOCI) in accordance with IFRS 9 \u2018Financial Instruments\u2019 mainly\u00a0consisted of:
\u2022Shougang Concord Century Holdings Ltd, a Hong Kong Stock Exchange listed company (\u20ac\u00a06.6 million). On this investment, an decrease in fair value of \u20ac\u00a03.2\u00a0million was recognized through OCI (2021: increase of \u20ac\u00a03.9\u00a0million).
\u2022Bekaert Xinyu Metal Products Co Ltd (\u20ac\u00a06.5 million). On this investment, an decrease in fair value of \u20ac\u00a01.5\u00a0million was recognized through OCI (2021: an increase of \u20ac\u00a02.0\u00a0million).
\u2022Transportes Puelche Ltda (\u20ac\u00a00.5 million), an investment held by Acma SA and Prodalam SA (Chile).
\u2022Pajarito Powder LLC (\u20ac\u00a03.9\u00a0million), a new investment held by Bekaert Corporation (US).
Financial instruments by fair value measurement hierarchy
The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways:
\u2022\u2018Level 1\u2019 fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in these active markets for identical assets and liabilities. This mainly relates to financial assets at fair value through other comprehensive income such as the investment in Shougang Concord Century Holdings Ltd (see note 6.6.\u00a0\u2018Other non-current assets\u2019).
\u2022\u2018Level 2\u2019 fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward-exchange rates and yield curves derived from quoted interest rates with matching maturities. Interest-rate swaps are measured at
\u2022the present value of future cash flows estimated and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward-exchange rates, quoted interest rates and applicable yield curves derived therefrom.
\u2022\u2018Level 3\u2019 fair value measurement: the fair value of the remaining financial assets and financial liabilities is derived from valuation techniques which include inputs that are not based on observable market data. At the end of 2022, Bekaert had two types of financial instruments, namely the VPPA agreement and several equity investments, for which the fair value measurement can be characterized as \u2018level 3\u2019. The fair value of the VPPA contract is determined using a Monte Carlo valuation model. The main factors determining the fair value of the VPPA agreement are the discount rate (level 2), the estimated energy output based on wind or solar studies in the area and the off-peak/on-peak price volatility (level 3). The fair value of the main equity investment (Xinju Metal Products Co Ltd) is determined using a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption. The main factors determining the fair value are the discount rate and EBITDA.
Derivative in VPPA arrangement | 31 December 2022 |
Level 2 inputs | |
Discount rate | Weighted average of investment grade corporate bond curves |
Level 3 inputs | |
Power forward sensitivity | Estimated on peak/off peak price forecasts |
Production sensitivity | Based on wind / solar studies in the area |
Outcome of the model (in thousands of \u20ac) | |
Fair value of the VPPA derivative | 7500 |
The carrying amount (i.e. the fair value) of the level-3 liabilities/(assets) has evolved as follows:
Level-3 Financial liabilities / (assets) | ||
in thousands of \u20ac | 2021 | 2022 |
At 1 January | -10\u00a0682 | -23\u00a0561 |
(Expenditure) / Disposal | -863 | -8\u00a0537 |
(Gain) / loss in fair value through OCI | -1\u00a0916 | -555 |
(Gain) / loss in fair value through P&L | -10\u00a0100 | 5\u00a0743 |
At 31 December | -23\u00a0561 | -26\u00a0910 |
Gains and losses in fair value are reported in other financial income and expenses (\u20ac\u00a05.7\u00a0million), except for the equity investments where fair value changes are carried through other comprehensive income (\u20ac\u00a0-0.6\u00a0million) (see note 6.6. \u2018Other non-current assets\u2019).
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for King Plains.
Sensitivity analysis King Plains | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 188 | |
-10% | decreased by | -281 | ||
Production sensitivity | +5% | increased by | 375 | |
-5% | decreased by | -469 |
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for Rockhound
Sensitivity analysis Rockhound | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 2\u00a0344 | |
-10% | decreased by | -2\u00a0438 | ||
Production sensitivity | +5% | increased by | 750 | |
-5% | decreased by | -750 |
The sensitivity of the fair value calculation of the equity investment in Xinju Metal Products Co Ltd (\u20ac\u00a06.5 million) is shown below:
\u2022If EBITDA would be CNY\u00a04.0 million lower in all periods of the business plan, the fair value would be \u20ac\u00a05.5\u00a0million;
\u2022If the discount factor would be 1% higher, the fair value would be \u20ac\u00a06.0\u00a0million;
\u2022If EBITDA would be CNY\u00a04.0 million lower in all years of the business plan and the discount factor would be 1% higher, the fair value would be \u20ac\u00a05.1\u00a0million.
The following table provides an analysis of financial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above:
2021 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 1\u00a0416 | 13\u00a0244 | 14\u00a0659 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments | 9\u00a0764 | \u2014 | 10\u00a0317 | 20\u00a0081 |
Total assets | 9\u00a0764 | 1\u00a0416 | 23\u00a0561 | 34\u00a0741 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
Total liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
2022 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 12\u00a0872 | 7\u00a0500 | 20\u00a0372 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments \u00b9 | 6\u00a0614 | \u2014 | 19\u00a0410 | 26\u00a0023 |
Total assets | 6\u00a0614 | 12\u00a0872 | 26\u00a0910 | 46\u00a0395 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Total liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
2021 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 120\u00a0139 | 116\u00a0358 | 4\u00a0247 | \u2014 | 4\u00a0514 | \u2014 | 245\u00a0259 |
Consumables and spare parts | 78\u00a0711 | 3\u00a0241 | 7\u00a0191 | \u2014 | 4\u00a0027 | \u2014 | 93\u00a0170 |
Work in progress | 125\u00a0676 | 45\u00a0196 | 958 | \u2014 | 6\u00a0329 | \u2014 | 178\u00a0159 |
Finished goods | 234\u00a0858 | 110\u00a0973 | 4\u00a0059 | \u2014 | 12\u00a0282 | \u2014 | 362\u00a0173 |
Goods purchased for resale | 124\u00a0093 | 121\u00a0680 | 817 | \u2014 | -4\u00a0131 | \u2014 | 242\u00a0458 |
Inventories | 683\u00a0477 | 397\u00a0448 | 17\u00a0272 | \u2014 | 23\u00a0021 | \u2014 | 1\u00a0121\u00a0219 |
Trade receivables | 587\u00a0619 | 146\u00a0039 | 1\u00a0412 | \u2014 | 15\u00a0595 | \u2014 | 750\u00a0666 |
Bills of exchange received | 54\u00a0039 | -17\u00a0652 | \u2014 | \u2014 | 4\u00a0887 | \u2014 | 41\u00a0274 |
Advances paid | 18\u00a0594 | -140 | -1 | \u2014 | 1\u00a0535 | 19\u00a0988 | |
Trade payables | -668\u00a0422 | -368\u00a0659 | \u2014 | \u2014 | -25\u00a0105 | \u2014 | -1\u00a0062\u00a0185 |
Advances received | -15\u00a0682 | -7\u00a0581 | \u2014 | \u2014 | -1\u00a0091 | \u2014 | -24\u00a0354 |
Remuneration and social security payables | -116\u00a0014 | -40\u00a0082 | \u2014 | \u2014 | -4\u00a0602 | 1 | -160\u00a0699 |
Employment-related taxes | -9\u00a0101 | 850 | \u2014 | \u2014 | -138 | \u2014 | -8\u00a0389 |
Operating working capital | 534\u00a0510 | 110\u00a0224 | 18\u00a0683 | \u2014 | 14\u00a0101 | 1 | 677\u00a0519 |
2022 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 245\u00a0259 | -35\u00a0496 | -1\u00a0086 | 12 | 5\u00a0978 | 4 | 214\u00a0673 |
Consumables and spare parts | 93\u00a0170 | 26\u00a0995 | -1\u00a0258 | 74 | 714 | 2 | 119\u00a0696 |
Work in progress | 178\u00a0159 | 3\u00a0906 | -1\u00a0961 | \u2014 | 1\u00a0645 | 85 | 181\u00a0834 |
Finished goods | 362\u00a0173 | -13\u00a0120 | -3\u00a0421 | 36 | 5\u00a0451 | 327 | 351\u00a0445 |
Goods purchased for resale | 242\u00a0458 | 29\u00a0785 | -5\u00a0289 | 27 | 8\u00a0884 | -418 | 275\u00a0448 |
Inventories | 1\u00a0121\u00a0219 | 12\u00a0070 | -13\u00a0014 | 149 | 22\u00a0672 | \u2014 | 1\u00a0143\u00a0096 |
Trade receivables | 750\u00a0666 | -28\u00a0033 | 2\u00a0044 | 171 | 5\u00a0938 | \u2014 | 730\u00a0786 |
Bills of exchange received | 41\u00a0274 | -1\u00a0213 | \u2014 | \u2014 | -297 | \u2014 | 39\u00a0764 |
Advances paid | 19\u00a0988 | -5\u00a0848 | \u2014 | \u2014 | 407 | \u2014 | 14\u00a0547 |
Trade payables | -1\u00a0062\u00a0185 | 163\u00a0526 | \u2014 | -448 | -22\u00a0005 | \u2014 | -921\u00a0113 |
Advances received | -24\u00a0354 | 28 | \u2014 | \u2014 | 229 | \u2014 | -24\u00a0097 |
Remuneration and social security payables | -160\u00a0699 | 40\u00a0220 | \u2014 | -68 | -1\u00a0773 | 20 | -122\u00a0300 |
Employment-related taxes | -8\u00a0389 | -2\u00a0462 | \u2014 | -2 | 43 | \u2014 | -10\u00a0810 |
Operating working capital | 677\u00a0519 | 178\u00a0288 | -10\u00a0970 | -199 | 5\u00a0214 | 20 | 849\u00a0872 |
\u00b9 The organic increase or decrease represents the cash movements of the working capital, which are adjusted in the cash flow statement against purchase of intangible assets and property, plant and equipment for the variation of outstanding trade payables at year-end related to capital expenditure (2022: increase of outstanding payables by \u20ac\u00a00.4\u00a0million (2021: increase of outstanding payables by \u20ac\u00a09.4\u00a0million)).
The average working capital, weighted by the number of periods that an entity has contributed to the consolidated result, represented 13.5% of sales (2021:\u00a012.6%). Additional information is as follows:
\u2022Inventories
The inventories remained rather stable (\u20ac\u00a0+21.9\u00a0million from year-end last year). The cost of sales included expenses related to transport and handling of finished goods amounting to \u20ac\u00a0303.5\u00a0million (2021:\u00a0\u20ac\u00a0249.5\u00a0million), which have never been capitalized in inventories. Movements in inventories in 2022 included write-downs of \u20ac\u00a0-46.8\u00a0million (2021:\u00a0\u20ac\u00a0-22.8\u00a0million) and reversals of write-downs of \u20ac\u00a033.7\u00a0million (2021:\u00a0\u20ac\u00a040.1\u00a0million) Similar as in 2021, in 2022, no inventories were pledged as security for liabilities.
\u2022Trade receivables and bills of exchange received
The trade accounts receivable decreased by \u20ac -21.4 million from year-end last year. The carrying amount of the trade receivables involved in the factoring program amounted to \u20ac 267.5 million (2021: \u20ac 224.8 million).
\u2022The following table presents the movements in the allowance for bad debt on trade receivables. No allowance was posted for bills of exchange received.
Trade receivables and bills of exchange received | ||
in thousands of \u20ac | 2021 | 2022 |
Gross amount | 833\u00a0840 | 810\u00a0441 |
Allowance for bad debts (impaired) | -41\u00a0899 | -39\u00a0891 |
specific allowance for bad debts | -35\u00a0099 | -36\u00a0034 |
general allowance for bad debts | -6\u00a0801 | -3\u00a0857 |
Net carrying amount | 791\u00a0940 | 770\u00a0550 |
More information about allowances of receivables is provided in the following table:
Allowance for bad debt | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -40\u00a0494 | -41\u00a0899 |
Losses recognized in current year | -3\u00a0009 | -6\u00a0029 |
Losses recognized in prior years - amounts used | 1\u00a0079 | 1\u00a0138 |
Losses recognized in prior years - reversal of amounts not used | 3\u00a0343 | 6\u00a0935 |
Exchange gains and losses (-) | -2\u00a0817 | -36 |
As at 31 December | -41\u00a0899 | -39\u00a0891 |
In accordance with the IFRS 9 \u2018expected credit loss\u2019 model for financial assets, a general bad debt allowance is made for trade receivables to cover the unknown bad debt risk at each reporting date. This general allowance constitutes of a percentage on outstanding trade receivables at each reporting date. The percentages are taking into account historical information on losses on trade receivables and are reviewed year-on-year. For more information on credit enhancement techniques, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
\u2022Trade payables decreased significantly, mainly as a result of the organic evolution
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Cash & cash equivalents | 677\u00a0270 | 728\u00a0095 |
Short-term deposits | 80\u00a0058 | 4\u00a0766 |
An analysis of the carrying amount of the Group\u2019s interest-bearing debt by contractual maturity is presented below:
2021 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0219 | 36\u00a0837 | 19\u00a0588 | 76\u00a0644 |
Cash guarantees received | \u2014 | 84 | 120 | 204 |
Credit institutions | 217\u00a0523 | 177\u00a0047 | \u2014 | 394\u00a0571 |
Schuldschein loans | \u2014 | 298\u00a0964 | 20\u00a0941 | 319\u00a0905 |
Bonds | \u2014 | 200\u00a0000 | 200\u00a0000 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 |
Total financial debt | 237\u00a0742 | 712\u00a0932 | 240\u00a0649 | 1\u00a0191\u00a0324 |
2022 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0002 | 36\u00a0872 | 20\u00a0331 | 77\u00a0205 |
Cash guarantees received | \u2014 | 144 | 66 | 210 |
Credit institutions | 291\u00a0989 | 146\u00a0413 | \u2014 | 438\u00a0401 |
Schuldschein loans | 188\u00a0598 | 131\u00a0582 | \u2014 | 320\u00a0179 |
Bonds | \u2014 | 400\u00a0000 | \u2014 | 400\u00a0000 |
Total financial debt | 500\u00a0588 | 715\u00a0011 | 20\u00a0397 | 1\u00a0235\u00a0996 |
An analysis of the undiscounted outflows relating to the Group\u2019s financial liabilities by contractual maturity is presented in note 7.2.\u00a0\u2018Financial risk management and financial derivatives\u2019. The financial debt due within one year increased with \u20ac 262.8 million mainly due to repayments of the Schuldschein loans which will take place in June 2023 (\u20ac 188.6 million at amortized cost per year-end 2022).
The following table summarizes the calculation of the net debt.
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 953\u00a0581 | 735\u00a0408 |
Current interest-bearing debt | 237\u00a0742 | 500\u00a0588 |
Total financial debt | 1\u00a0191\u00a0324 | 1\u00a0235\u00a0996 |
Non-current financial receivables and cash guarantees | -10\u00a0192 | -9\u00a0665 |
Current financial receivables and cash guarantees | -6\u00a0475 | -6\u00a0352 |
Short-term deposits | -80\u00a0058 | -4\u00a0766 |
Cash and cash equivalents | -677\u00a0270 | -728\u00a0095 |
Net debt | 417\u00a0329 | 487\u00a0118 |
In accordance with the disclosure requirements of IAS 7 \u2018Statement of Cash Flows\u2019, this section presents an overview of the changes in liabilities arising from financing activities. The qualification as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash flow statement, the cash flows from long-term interest-bearing debt are analyzed between proceeds and repayments.
In 2022, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 33.5 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
In 2021, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 19.6 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019), and interest accruals from amortizations on liabilities using the effective interest method (\u20ac 4.9 million). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
2021 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 1\u00a0380\u00a0866 | -416\u00a0174 | \u2014 | 3\u00a0619 | \u2014 | 24\u00a0802 | 993\u00a0114 |
Cash guarantees received | 171 | 12 | \u2014 | 20 | \u2014 | \u2014 | 204 |
Lease liability | 80\u00a0505 | -26\u00a0290 | \u2014 | 2\u00a0805 | \u2014 | 19\u00a0624 | 76\u00a0644 |
Credit institutions | 205\u00a0463 | -9\u00a0896 | \u2014 | 794 | \u2014 | \u2014 | 196\u00a0361 |
Schuldschein loans | 319\u00a0635 | \u2014 | \u2014 | \u2014 | \u2014 | 270 | 319\u00a0905 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | 375\u00a0092 | -380\u00a0000 | \u2014 | \u2014 | \u2014 | 4\u00a0908 | \u2014 |
Short-term interest bearing debt | 228\u00a0865 | -43\u00a0328 | \u2014 | 12\u00a0672 | \u2014 | \u2014 | 198\u00a0210 |
Total financial debt | 1\u00a0609\u00a0732 | -459\u00a0501 | \u2014 | 16\u00a0291 | \u2014 | 24\u00a0802 | 1\u00a0191\u00a0324 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 1\u00a0081 | \u2014 | \u2014 | \u2014 | -964 | \u2014 | 118 |
Cross-currency interest-rate swaps | -5\u00a0030 | \u2014 | \u2014 | \u2014 | 6\u00a0675 | \u2014 | 1\u00a0645 |
Other liabilities from financing activities | |||||||
Conversion derivative | 34 | \u2014 | \u2014 | \u2014 | -34 | \u2014 | \u2014 |
Total liabilities from financing activities | 1\u00a0605\u00a0817 | -459\u00a0501 | \u2014 | 16\u00a0291 | 5\u00a0677 | 24\u00a0802 | 1\u00a0193\u00a0087 |
\u00b9\u00a0 Including the current portion of non-current interest-bearing debt of \u20ac 412.8 million as at 1 January and \u20ac 39.5 million as at 31 December.
2022 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 993\u00a0114 | -75\u00a0577 | \u2014 | 2\u00a0107 | \u2014 | 33\u00a0974 | 953\u00a0618 |
Cash guarantees received | 204 | 11 | \u2014 | -5 | \u2014 | \u2014 | 210 |
Lease liability | 76\u00a0644 | -31\u00a0704 | \u2014 | -1\u00a0434 | \u2014 | 33\u00a0699 | 77\u00a0205 |
Credit institutions | 196\u00a0361 | -43\u00a0885 | \u2014 | 3\u00a0546 | \u2014 | \u2014 | 156\u00a0023 |
Schuldschein loans | 319\u00a0905 | \u2014 | \u2014 | \u2014 | \u2014 | 275 | 320\u00a0179 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Short-term interest bearing debt | 198\u00a0210 | 67\u00a0349 | 614 | 16\u00a0205 | \u2014 | \u2014 | 282\u00a0378 |
Total financial debt | 1\u00a0191\u00a0324 | -8\u00a0228 | 614 | 18\u00a0312 | \u2014 | 33\u00a0974 | 1\u00a0235\u00a0996 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 118 | \u2014 | \u2014 | \u2014 | -7\u00a0295 | \u2014 | -7\u00a0178 |
Cross-currency interest-rate swaps | 1\u00a0645 | \u2014 | \u2014 | \u2014 | -4\u00a0290 | \u2014 | -2\u00a0645 |
Total liabilities from financing activities | 1\u00a0193\u00a0087 | -8\u00a0228 | 614 | 18\u00a0312 | -11\u00a0586 | 33\u00a0974 | 1\u00a0226\u00a0173 |
Interest-rate risk
The Group is exposed to interest-rate risk, mainly on debt denominated in US dollar, Chinese renminbi and euro. To minimize the effects of interest-rate fluctuations in these regions, the Group manages the interest-rate risk for net debt denominated in the respective currencies of these countries separately. General guidelines are applied to cover interest-rate risk:
\u2022The target average life of long-term debt is four years.
\u2022The allocation of long-term debt between floating and fixed interest rates must remain within the defined limits approved by the Audit, Risk and Finance Committee.
Group Treasury uses interest-rate swaps and cross-currency interest-rate swaps to ensure that the floating and fixed portions of the long-term debt remain within the defined limits.
The following table summarizes the weighted average interest rates, excluding the effects of any swaps, at the balance sheet date.
2021 | Long-term | ||||
Fixed rate | Floating rate | Total | Short-term | Total | |
US dollar | 4.04% | 2.37% | 3.29% | 1.31% | 1.60% |
Chinese renminbi | -% | -% | -% | 3.62% | 3.62% |
Euro | 2.27% | 1.48% | 2.07% | -% | 2.07% |
Other | 6.71% | -% | 6.71% | 4.58% | 4.58% |
Total | 2.65% | 1.53% | 2.38% | 2.41% | 2.38% |
2022 | Long-term | ||||
Fixed rate | Floating rate | Total | Short-term | Total | |
US dollar | 4.21% | -% | 4.21% | 5.36% | 5.25% |
Chinese renminbi | -% | -% | -% | 3.41% | 3.41% |
Euro | 1.51% | 3.95% | 2.12% | -% | 2.12% |
Other | 4.59% | -% | 4.59% | 7.23% | 6.48% |
Total | 1.71% | 3.95% | 2.24% | 5.68% | 3.02% |
Interest-rate sensitivity analysis
Interest-rate sensitivity of the financial debt
As disclosed in note 6.18. \u2018Interest-bearing debt\u2019, the total financial debt of the Group as of 31 December 2022 amounted to \u20ac\u00a01\u00a0236\u00a0million (2021:\u00a0 \u20ac\u00a01\u00a0191.3\u00a0million). The following table shows the currency and interest rate profile, i.e. the percentage distribution of the total financial debt by currency and by type of interest rate (fixed, floating), including the effect of any swaps.
2021 | Long-term | Short-term | ||
Fixed rate | Floating rate | Floating rate | Total | |
US dollar | 1.40% | 1.10% | 14.30% | 16.80% |
Chinese renminbi | -% | -% | 3.00% | 3.00% |
Euro | 52.70% | 17.70% | -% | 70.40% |
Other | 4.40% | -% | 5.40% | 9.80% |
Total | 58.50% | 18.80% | 22.70% | 100.00% |
2022 | Long-term | Short-term | ||
Fixed rate | Floating rate | Floating rate | Total | |
US dollar | 1.50% | -% | 14.00% | 15.50% |
Chinese renminbi | -% | -% | 2.40% | 2.40% |
Euro | 55.10% | 18.30% | -% | 73.40% |
Other | 2.50% | -% | 6.20% | 8.70% |
Total | 59.10% | 18.30% | 22.60% | 100.00% |
On the basis of the annualized daily volatility of the 3-month Interbank Offered Rate in 2022 and 2021, the reasonable estimates of possible interest rate changes, with a 95% confidence interval, are set out for the main currencies in the table below.
2021 | Interest rate at 31 December | Reasonably possible |
Chinese renminbi \u00b9 | 2.21% | 0.36% |
Euro | -% | -% |
US dollar | 0.21% | 0.17% |
2022 | Interest rate at 31 December | Reasonably possible |
Chinese renminbi \u00b9 | 2.16% | 0.36% |
Euro | 2.22% | 0.37% |
US dollar | 4.77% | 3.20% |
\u00b9 For the Chinese renminbi, the interest rate is the PBOC benchmark interest rate for lending up to six months.
Applying the estimated possible changes in the interest rates to the floating rated debt, with all other variables constant, the result for the period before tax would have been \u20ac\u00a04.6\u00a0million higher/lower (2021: \u20ac 3.5 million higher/lower).
Interest-rate sensitivity in relation to hedge accounting
At 31 December 2022, the Group does not apply hedge accounting (2021: none) and no sensitivity analysis was required.
Hedging
All financial derivatives the Group enters into, relate to an underlying transaction or forecasted exposure. In function of the expected impact on the income statement and if the stringent IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied. The following sections describe the transactions whereby hedge accounting is applied and transactions which do not qualify for hedge accounting but constitute an economic hedge.
Hedge accounting
The Group did not apply hedge accounting in 2022 (2021: none) so there were no fair value hedges nor cash flow hedges in 2022 (2021: none).
Economic hedging and other derivatives
The Group also uses financial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defined in IFRS 9 \u2018Financial Instruments\u2019 are not met or because the Group has elected not to apply hedge accounting. These derivatives are treated as free-standing instruments held for trading.
\u2022The Group uses cross-currency interest-rate swaps and forward-exchange contracts to hedge the currency risk on intercompany loans involving two entities with different functional currencies. Until now, the Group has elected not to apply hedge accounting as defined in IFRS 9. Since nearly all cross-currency interest-rate swaps are floating-to-floating, the fair value gain or loss on the financial instruments is expected to offset the foreign-exchange result arising from the remeasurement of the intercompany loans. The major currencies involved are US dollar and British pound.
\u2022To manage its interest-rate exposure, the Group uses interest-rate swaps to convert its floating-rate debt to a fixed rate debt. The Group entered into interest-rate swaps for \u20ac\u00a0196.5\u00a0million to hedge the Schuldschein loans with floating interest rates (2021: \u20ac 196.5\u00a0million).
\u2022The Group uses forward exchange contracts to limit currency risks on its various operating and financing activities. For all forward exchange contracts, the fair value change is recorded immediately under other financial income and expenses.
2021 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 120\u00a0139 | 116\u00a0358 | 4\u00a0247 | \u2014 | 4\u00a0514 | \u2014 | 245\u00a0259 |
Consumables and spare parts | 78\u00a0711 | 3\u00a0241 | 7\u00a0191 | \u2014 | 4\u00a0027 | \u2014 | 93\u00a0170 |
Work in progress | 125\u00a0676 | 45\u00a0196 | 958 | \u2014 | 6\u00a0329 | \u2014 | 178\u00a0159 |
Finished goods | 234\u00a0858 | 110\u00a0973 | 4\u00a0059 | \u2014 | 12\u00a0282 | \u2014 | 362\u00a0173 |
Goods purchased for resale | 124\u00a0093 | 121\u00a0680 | 817 | \u2014 | -4\u00a0131 | \u2014 | 242\u00a0458 |
Inventories | 683\u00a0477 | 397\u00a0448 | 17\u00a0272 | \u2014 | 23\u00a0021 | \u2014 | 1\u00a0121\u00a0219 |
Trade receivables | 587\u00a0619 | 146\u00a0039 | 1\u00a0412 | \u2014 | 15\u00a0595 | \u2014 | 750\u00a0666 |
Bills of exchange received | 54\u00a0039 | -17\u00a0652 | \u2014 | \u2014 | 4\u00a0887 | \u2014 | 41\u00a0274 |
Advances paid | 18\u00a0594 | -140 | -1 | \u2014 | 1\u00a0535 | 19\u00a0988 | |
Trade payables | -668\u00a0422 | -368\u00a0659 | \u2014 | \u2014 | -25\u00a0105 | \u2014 | -1\u00a0062\u00a0185 |
Advances received | -15\u00a0682 | -7\u00a0581 | \u2014 | \u2014 | -1\u00a0091 | \u2014 | -24\u00a0354 |
Remuneration and social security payables | -116\u00a0014 | -40\u00a0082 | \u2014 | \u2014 | -4\u00a0602 | 1 | -160\u00a0699 |
Employment-related taxes | -9\u00a0101 | 850 | \u2014 | \u2014 | -138 | \u2014 | -8\u00a0389 |
Operating working capital | 534\u00a0510 | 110\u00a0224 | 18\u00a0683 | \u2014 | 14\u00a0101 | 1 | 677\u00a0519 |
2022 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 245\u00a0259 | -35\u00a0496 | -1\u00a0086 | 12 | 5\u00a0978 | 4 | 214\u00a0673 |
Consumables and spare parts | 93\u00a0170 | 26\u00a0995 | -1\u00a0258 | 74 | 714 | 2 | 119\u00a0696 |
Work in progress | 178\u00a0159 | 3\u00a0906 | -1\u00a0961 | \u2014 | 1\u00a0645 | 85 | 181\u00a0834 |
Finished goods | 362\u00a0173 | -13\u00a0120 | -3\u00a0421 | 36 | 5\u00a0451 | 327 | 351\u00a0445 |
Goods purchased for resale | 242\u00a0458 | 29\u00a0785 | -5\u00a0289 | 27 | 8\u00a0884 | -418 | 275\u00a0448 |
Inventories | 1\u00a0121\u00a0219 | 12\u00a0070 | -13\u00a0014 | 149 | 22\u00a0672 | \u2014 | 1\u00a0143\u00a0096 |
Trade receivables | 750\u00a0666 | -28\u00a0033 | 2\u00a0044 | 171 | 5\u00a0938 | \u2014 | 730\u00a0786 |
Bills of exchange received | 41\u00a0274 | -1\u00a0213 | \u2014 | \u2014 | -297 | \u2014 | 39\u00a0764 |
Advances paid | 19\u00a0988 | -5\u00a0848 | \u2014 | \u2014 | 407 | \u2014 | 14\u00a0547 |
Trade payables | -1\u00a0062\u00a0185 | 163\u00a0526 | \u2014 | -448 | -22\u00a0005 | \u2014 | -921\u00a0113 |
Advances received | -24\u00a0354 | 28 | \u2014 | \u2014 | 229 | \u2014 | -24\u00a0097 |
Remuneration and social security payables | -160\u00a0699 | 40\u00a0220 | \u2014 | -68 | -1\u00a0773 | 20 | -122\u00a0300 |
Employment-related taxes | -8\u00a0389 | -2\u00a0462 | \u2014 | -2 | 43 | \u2014 | -10\u00a0810 |
Operating working capital | 677\u00a0519 | 178\u00a0288 | -10\u00a0970 | -199 | 5\u00a0214 | 20 | 849\u00a0872 |
\u00b9 The organic increase or decrease represents the cash movements of the working capital, which are adjusted in the cash flow statement against purchase of intangible assets and property, plant and equipment for the variation of outstanding trade payables at year-end related to capital expenditure (2022: increase of outstanding payables by \u20ac\u00a00.4\u00a0million (2021: increase of outstanding payables by \u20ac\u00a09.4\u00a0million)).
\u2022The following table presents the movements in the allowance for bad debt on trade receivables. No allowance was posted for bills of exchange received.
Trade receivables and bills of exchange received | ||
in thousands of \u20ac | 2021 | 2022 |
Gross amount | 833\u00a0840 | 810\u00a0441 |
Allowance for bad debts (impaired) | -41\u00a0899 | -39\u00a0891 |
specific allowance for bad debts | -35\u00a0099 | -36\u00a0034 |
general allowance for bad debts | -6\u00a0801 | -3\u00a0857 |
Net carrying amount | 791\u00a0940 | 770\u00a0550 |
More information about allowances of receivables is provided in the following table:
Allowance for bad debt | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -40\u00a0494 | -41\u00a0899 |
Losses recognized in current year | -3\u00a0009 | -6\u00a0029 |
Losses recognized in prior years - amounts used | 1\u00a0079 | 1\u00a0138 |
Losses recognized in prior years - reversal of amounts not used | 3\u00a0343 | 6\u00a0935 |
Exchange gains and losses (-) | -2\u00a0817 | -36 |
As at 31 December | -41\u00a0899 | -39\u00a0891 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 101\u00a0330 | 157\u00a0005 |
Increase or decrease | 51\u00a0532 | -11\u00a0312 |
Write-downs (-) and write-down reversals | 158 | 1\u00a0134 |
New consolidations | \u2014 | 197 |
Exchange gains and losses | 3\u00a0985 | 4\u00a0402 |
As at 31 December | 157\u00a0005 | 151\u00a0426 |
2021 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 120\u00a0139 | 116\u00a0358 | 4\u00a0247 | \u2014 | 4\u00a0514 | \u2014 | 245\u00a0259 |
Consumables and spare parts | 78\u00a0711 | 3\u00a0241 | 7\u00a0191 | \u2014 | 4\u00a0027 | \u2014 | 93\u00a0170 |
Work in progress | 125\u00a0676 | 45\u00a0196 | 958 | \u2014 | 6\u00a0329 | \u2014 | 178\u00a0159 |
Finished goods | 234\u00a0858 | 110\u00a0973 | 4\u00a0059 | \u2014 | 12\u00a0282 | \u2014 | 362\u00a0173 |
Goods purchased for resale | 124\u00a0093 | 121\u00a0680 | 817 | \u2014 | -4\u00a0131 | \u2014 | 242\u00a0458 |
Inventories | 683\u00a0477 | 397\u00a0448 | 17\u00a0272 | \u2014 | 23\u00a0021 | \u2014 | 1\u00a0121\u00a0219 |
Trade receivables | 587\u00a0619 | 146\u00a0039 | 1\u00a0412 | \u2014 | 15\u00a0595 | \u2014 | 750\u00a0666 |
Bills of exchange received | 54\u00a0039 | -17\u00a0652 | \u2014 | \u2014 | 4\u00a0887 | \u2014 | 41\u00a0274 |
Advances paid | 18\u00a0594 | -140 | -1 | \u2014 | 1\u00a0535 | 19\u00a0988 | |
Trade payables | -668\u00a0422 | -368\u00a0659 | \u2014 | \u2014 | -25\u00a0105 | \u2014 | -1\u00a0062\u00a0185 |
Advances received | -15\u00a0682 | -7\u00a0581 | \u2014 | \u2014 | -1\u00a0091 | \u2014 | -24\u00a0354 |
Remuneration and social security payables | -116\u00a0014 | -40\u00a0082 | \u2014 | \u2014 | -4\u00a0602 | 1 | -160\u00a0699 |
Employment-related taxes | -9\u00a0101 | 850 | \u2014 | \u2014 | -138 | \u2014 | -8\u00a0389 |
Operating working capital | 534\u00a0510 | 110\u00a0224 | 18\u00a0683 | \u2014 | 14\u00a0101 | 1 | 677\u00a0519 |
2022 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 245\u00a0259 | -35\u00a0496 | -1\u00a0086 | 12 | 5\u00a0978 | 4 | 214\u00a0673 |
Consumables and spare parts | 93\u00a0170 | 26\u00a0995 | -1\u00a0258 | 74 | 714 | 2 | 119\u00a0696 |
Work in progress | 178\u00a0159 | 3\u00a0906 | -1\u00a0961 | \u2014 | 1\u00a0645 | 85 | 181\u00a0834 |
Finished goods | 362\u00a0173 | -13\u00a0120 | -3\u00a0421 | 36 | 5\u00a0451 | 327 | 351\u00a0445 |
Goods purchased for resale | 242\u00a0458 | 29\u00a0785 | -5\u00a0289 | 27 | 8\u00a0884 | -418 | 275\u00a0448 |
Inventories | 1\u00a0121\u00a0219 | 12\u00a0070 | -13\u00a0014 | 149 | 22\u00a0672 | \u2014 | 1\u00a0143\u00a0096 |
Trade receivables | 750\u00a0666 | -28\u00a0033 | 2\u00a0044 | 171 | 5\u00a0938 | \u2014 | 730\u00a0786 |
Bills of exchange received | 41\u00a0274 | -1\u00a0213 | \u2014 | \u2014 | -297 | \u2014 | 39\u00a0764 |
Advances paid | 19\u00a0988 | -5\u00a0848 | \u2014 | \u2014 | 407 | \u2014 | 14\u00a0547 |
Trade payables | -1\u00a0062\u00a0185 | 163\u00a0526 | \u2014 | -448 | -22\u00a0005 | \u2014 | -921\u00a0113 |
Advances received | -24\u00a0354 | 28 | \u2014 | \u2014 | 229 | \u2014 | -24\u00a0097 |
Remuneration and social security payables | -160\u00a0699 | 40\u00a0220 | \u2014 | -68 | -1\u00a0773 | 20 | -122\u00a0300 |
Employment-related taxes | -8\u00a0389 | -2\u00a0462 | \u2014 | -2 | 43 | \u2014 | -10\u00a0810 |
Operating working capital | 677\u00a0519 | 178\u00a0288 | -10\u00a0970 | -199 | 5\u00a0214 | 20 | 849\u00a0872 |
\u00b9 The organic increase or decrease represents the cash movements of the working capital, which are adjusted in the cash flow statement against purchase of intangible assets and property, plant and equipment for the variation of outstanding trade payables at year-end related to capital expenditure (2022: increase of outstanding payables by \u20ac\u00a00.4\u00a0million (2021: increase of outstanding payables by \u20ac\u00a09.4\u00a0million)).
2021 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 120\u00a0139 | 116\u00a0358 | 4\u00a0247 | \u2014 | 4\u00a0514 | \u2014 | 245\u00a0259 |
Consumables and spare parts | 78\u00a0711 | 3\u00a0241 | 7\u00a0191 | \u2014 | 4\u00a0027 | \u2014 | 93\u00a0170 |
Work in progress | 125\u00a0676 | 45\u00a0196 | 958 | \u2014 | 6\u00a0329 | \u2014 | 178\u00a0159 |
Finished goods | 234\u00a0858 | 110\u00a0973 | 4\u00a0059 | \u2014 | 12\u00a0282 | \u2014 | 362\u00a0173 |
Goods purchased for resale | 124\u00a0093 | 121\u00a0680 | 817 | \u2014 | -4\u00a0131 | \u2014 | 242\u00a0458 |
Inventories | 683\u00a0477 | 397\u00a0448 | 17\u00a0272 | \u2014 | 23\u00a0021 | \u2014 | 1\u00a0121\u00a0219 |
Trade receivables | 587\u00a0619 | 146\u00a0039 | 1\u00a0412 | \u2014 | 15\u00a0595 | \u2014 | 750\u00a0666 |
Bills of exchange received | 54\u00a0039 | -17\u00a0652 | \u2014 | \u2014 | 4\u00a0887 | \u2014 | 41\u00a0274 |
Advances paid | 18\u00a0594 | -140 | -1 | \u2014 | 1\u00a0535 | 19\u00a0988 | |
Trade payables | -668\u00a0422 | -368\u00a0659 | \u2014 | \u2014 | -25\u00a0105 | \u2014 | -1\u00a0062\u00a0185 |
Advances received | -15\u00a0682 | -7\u00a0581 | \u2014 | \u2014 | -1\u00a0091 | \u2014 | -24\u00a0354 |
Remuneration and social security payables | -116\u00a0014 | -40\u00a0082 | \u2014 | \u2014 | -4\u00a0602 | 1 | -160\u00a0699 |
Employment-related taxes | -9\u00a0101 | 850 | \u2014 | \u2014 | -138 | \u2014 | -8\u00a0389 |
Operating working capital | 534\u00a0510 | 110\u00a0224 | 18\u00a0683 | \u2014 | 14\u00a0101 | 1 | 677\u00a0519 |
2022 | |||||||
in thousands of \u20ac | As at 1 January | Organic increase or decrease \u00b9 | Write-downs and write-down reversals | New | Exchange gains and losses | Other | As at 31 December |
Raw materials | 245\u00a0259 | -35\u00a0496 | -1\u00a0086 | 12 | 5\u00a0978 | 4 | 214\u00a0673 |
Consumables and spare parts | 93\u00a0170 | 26\u00a0995 | -1\u00a0258 | 74 | 714 | 2 | 119\u00a0696 |
Work in progress | 178\u00a0159 | 3\u00a0906 | -1\u00a0961 | \u2014 | 1\u00a0645 | 85 | 181\u00a0834 |
Finished goods | 362\u00a0173 | -13\u00a0120 | -3\u00a0421 | 36 | 5\u00a0451 | 327 | 351\u00a0445 |
Goods purchased for resale | 242\u00a0458 | 29\u00a0785 | -5\u00a0289 | 27 | 8\u00a0884 | -418 | 275\u00a0448 |
Inventories | 1\u00a0121\u00a0219 | 12\u00a0070 | -13\u00a0014 | 149 | 22\u00a0672 | \u2014 | 1\u00a0143\u00a0096 |
Trade receivables | 750\u00a0666 | -28\u00a0033 | 2\u00a0044 | 171 | 5\u00a0938 | \u2014 | 730\u00a0786 |
Bills of exchange received | 41\u00a0274 | -1\u00a0213 | \u2014 | \u2014 | -297 | \u2014 | 39\u00a0764 |
Advances paid | 19\u00a0988 | -5\u00a0848 | \u2014 | \u2014 | 407 | \u2014 | 14\u00a0547 |
Trade payables | -1\u00a0062\u00a0185 | 163\u00a0526 | \u2014 | -448 | -22\u00a0005 | \u2014 | -921\u00a0113 |
Advances received | -24\u00a0354 | 28 | \u2014 | \u2014 | 229 | \u2014 | -24\u00a0097 |
Remuneration and social security payables | -160\u00a0699 | 40\u00a0220 | \u2014 | -68 | -1\u00a0773 | 20 | -122\u00a0300 |
Employment-related taxes | -8\u00a0389 | -2\u00a0462 | \u2014 | -2 | 43 | \u2014 | -10\u00a0810 |
Operating working capital | 677\u00a0519 | 178\u00a0288 | -10\u00a0970 | -199 | 5\u00a0214 | 20 | 849\u00a0872 |
\u00b9 The organic increase or decrease represents the cash movements of the working capital, which are adjusted in the cash flow statement against purchase of intangible assets and property, plant and equipment for the variation of outstanding trade payables at year-end related to capital expenditure (2022: increase of outstanding payables by \u20ac\u00a00.4\u00a0million (2021: increase of outstanding payables by \u20ac\u00a09.4\u00a0million)).
The average working capital, weighted by the number of periods that an entity has contributed to the consolidated result, represented 13.5% of sales (2021:\u00a012.6%). Additional information is as follows:
\u2022Inventories
The inventories remained rather stable (\u20ac\u00a0+21.9\u00a0million from year-end last year). The cost of sales included expenses related to transport and handling of finished goods amounting to \u20ac\u00a0303.5\u00a0million (2021:\u00a0\u20ac\u00a0249.5\u00a0million), which have never been capitalized in inventories. Movements in inventories in 2022 included write-downs of \u20ac\u00a0-46.8\u00a0million (2021:\u00a0\u20ac\u00a0-22.8\u00a0million) and reversals of write-downs of \u20ac\u00a033.7\u00a0million (2021:\u00a0\u20ac\u00a040.1\u00a0million) Similar as in 2021, in 2022, no inventories were pledged as security for liabilities.
\u2022The following table presents the movements in the allowance for bad debt on trade receivables. No allowance was posted for bills of exchange received.
Trade receivables and bills of exchange received | ||
in thousands of \u20ac | 2021 | 2022 |
Gross amount | 833\u00a0840 | 810\u00a0441 |
Allowance for bad debts (impaired) | -41\u00a0899 | -39\u00a0891 |
specific allowance for bad debts | -35\u00a0099 | -36\u00a0034 |
general allowance for bad debts | -6\u00a0801 | -3\u00a0857 |
Net carrying amount | 791\u00a0940 | 770\u00a0550 |
More information about allowances of receivables is provided in the following table:
Allowance for bad debt | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -40\u00a0494 | -41\u00a0899 |
Losses recognized in current year | -3\u00a0009 | -6\u00a0029 |
Losses recognized in prior years - amounts used | 1\u00a0079 | 1\u00a0138 |
Losses recognized in prior years - reversal of amounts not used | 3\u00a0343 | 6\u00a0935 |
Exchange gains and losses (-) | -2\u00a0817 | -36 |
As at 31 December | -41\u00a0899 | -39\u00a0891 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Cash & cash equivalents | 677\u00a0270 | 728\u00a0095 |
Short-term deposits | 80\u00a0058 | 4\u00a0766 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Cash & cash equivalents | 677\u00a0270 | 728\u00a0095 |
Short-term deposits | 80\u00a0058 | 4\u00a0766 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Financial receivables and cash guarantees | 6\u00a0475 | 6\u00a0352 |
Advances paid | 19\u00a0988 | 14\u00a0547 |
Derivatives (cf.note 7.2.) | 1\u00a0416 | 5\u00a0694 |
Deferred charges and accrued income | 14\u00a0394 | 28\u00a0948 |
As at 31 December | 42\u00a0272 | 55\u00a0541 |
The financial receivables and cash guarantees mainly related to receivables from the disposal of the majority stake in the rubber reinforcement plant Sumar\u00e9 (Brazil) in 2017 (\u20ac\u00a03.8\u00a0million\u00a0(2021:\u00a0\u20ac\u00a04.6\u00a0million)) and various cash guarantees (\u20ac\u00a01.1\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.5\u00a0million)).
The advances paid mainly related to advance payments in the context of large capex projects and advance payments for deliveries of wire rod.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Financial receivables and cash guarantees | 6\u00a0475 | 6\u00a0352 |
Advances paid | 19\u00a0988 | 14\u00a0547 |
Derivatives (cf.note 7.2.) | 1\u00a0416 | 5\u00a0694 |
Deferred charges and accrued income | 14\u00a0394 | 28\u00a0948 |
As at 31 December | 42\u00a0272 | 55\u00a0541 |
The financial receivables and cash guarantees mainly related to receivables from the disposal of the majority stake in the rubber reinforcement plant Sumar\u00e9 (Brazil) in 2017 (\u20ac\u00a03.8\u00a0million\u00a0(2021:\u00a0\u20ac\u00a04.6\u00a0million)) and various cash guarantees (\u20ac\u00a01.1\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.5\u00a0million)).
The advances paid mainly related to advance payments in the context of large capex projects and advance payments for deliveries of wire rod.
Carrying amount (net) | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 6\u00a0740 | 1\u00a0803 |
Increases and decreases (-) | -5\u00a0264 | -1\u00a0063 |
Exchange gains and losses | 327 | 20 |
As at 31 December | 1\u00a0803 | 760 |
in thousands of \u20ac | 2021 | 2022 |
Property, plant and equipment | 1\u00a0803 | 760 |
Total assets classified as held for sale | 1\u00a0803 | 760 |
Total liabilities associated with assets classified as held for sale | \u2014 | \u2014 |
Carrying amount (net) | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 6\u00a0740 | 1\u00a0803 |
Increases and decreases (-) | -5\u00a0264 | -1\u00a0063 |
Exchange gains and losses | 327 | 20 |
As at 31 December | 1\u00a0803 | 760 |
in thousands of \u20ac | 2021 | 2022 |
Property, plant and equipment | 1\u00a0803 | 760 |
Total assets classified as held for sale | 1\u00a0803 | 760 |
Total liabilities associated with assets classified as held for sale | \u2014 | \u2014 |
Issued capital | 2021 | 2022 | |||
in thousands of \u20ac | Nominal value | Number of shares | Nominal value | Number of shares | |
1 | As at 1 January | 177\u00a0812 | 60\u00a0414\u00a0841 | 177\u00a0922 | 60\u00a0452\u00a0261 |
Movements in the year | |||||
Issue of new shares | 110 | 37\u00a0420 | 80 | 26\u00a0400 | |
Cancellation of shares | -4\u00a0266 | -1\u00a0449\u00a0409 | |||
As at 31 December | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2 | Structure | ||||
2.1 | Classes of ordinary shares | ||||
Ordinary shares without par value | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2.2 | Registered shares | 22\u00a0841\u00a0937 | 22\u00a0870\u00a0686 | ||
Dematerialized shares | 37\u00a0610\u00a0324 | 36\u00a0158\u00a0566 | |||
Authorized capital not issued | 176\u00a0000 | 176\u00a0000 |
Overview of SOP 2005-2009 Stock Option Plan | |||||||||
Date offered | Date granted | Date of issue of | Exercise price (in \u20ac) | Number of subscription rights | First exercise period | Last exercise | |||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2007 | 18.02.2008 | 22.04.2008 | 28.335 | 215\u00a0100 | 202\u00a0400 | 12\u00a0700 | \u2014 | 22.05 - 30.06.2011 | 15.11 - 15.12.2022 |
785\u00a0058 | 615\u00a0893 | 169\u00a0165 | \u2014 |
Overview of SOP 2010-2014 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2012 | 18.02.2013 | 19.200 | 267\u00a0200 | 264\u00a0500 | 2\u00a0700 | \u2014 | End Feb. - 10.04.2016 | Mid Nov. - 19.12.2022 | |
29.03.2013 | 28.05.2013 | 21.450 | 260\u00a0000 | 235\u00a0000 | \u2014 | 25\u00a0000 | End Feb. - 09.04.2017 | End Feb. - 28.03.2023 | |
19.12.2013 | 17.02.2014 | 25.380 | 373\u00a0450 | 325\u00a0150 | 2\u00a0400 | 45\u00a0900 | End Feb. - 09.04.2017 | Mid Nov. - 18.12.2023 | |
18.12.2014 | 16.02.2015 | 26.055 | 349\u00a0810 | 210\u00a0400 | 18\u00a0510 | 120\u00a0900 | End Feb. - 08.04.2018 | Mid Nov. - 17.12.2024 | |
1\u00a0250\u00a0460 | 1\u00a0035\u00a0050 | 23\u00a0610 | 191\u00a0800 |
Overview of SOP 2015-2017 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
17.12.2015 | 15.02.2016 | 26.375 | 227\u00a0250 | 122\u00a0000 | 28\u00a0250 | 77\u00a0000 | End Feb. - 07.04.2019 | Mid Nov. - 16.12.2025 | |
15.12.2016 | 13.02.2017 | 39.426 | 273\u00a0325 | 144 | 47\u00a0125 | 226\u00a0056 | End Feb. - 12.04.2020 | Mid Nov. - 14.12.2026 | |
21.12.2017 | 20.02.2018 | 34.600 | 225\u00a0475 | 72\u00a0500 | 8\u00a0375 | 144\u00a0600 | End Feb. - 11.04.2021 | Mid Nov. - 20.12.2027 | |
726\u00a0050 | 194\u00a0644 | 83\u00a0750 | 447\u00a0656 |
2021 | 2022 | |||
SOP 2005-2009 Stock Option Plan | Number of subscription rights | Weighted average exercise price (in \u20ac) | Number of subscription rights | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 63\u00a0820 | 28.594 | 26\u00a0400 | 28.335 |
Exercised during the year | -37\u00a0420 | 28.776 | -26\u00a0400 | 28.335 |
Outstanding as at 31 December | 26\u00a0400 | 28.335 | \u2014 | 28.335 |
2021 | 2022 | |||
SOP 2010-2014 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 700\u00a0058 | 24.488 | 300\u00a0600 | 24.300 |
Exercised during the year | -399\u00a0458 | 24.630 | -108\u00a0800 | 22.548 |
Outstanding as at 31 December | 300\u00a0600 | 24.300 | 191\u00a0800 | 24.300 |
2021 | 2022 | |||
SOP 2015-2017 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 640\u00a0800 | 33.769 | 469\u00a0156 | 35.198 |
Exercised during the year | -171\u00a0644 | 29.860 | -21\u00a0500 | 26.375 |
Outstanding as at 31 December | 469\u00a0156 | 35.198 | 447\u00a0656 | 35.198 |
Weighted average remaining contractual life | ||
in years | 2021 | 2022 |
SOP 2005-2009 | 1.0 | \u2014 |
SOP 2010-2014 | 2.2 | 1.5 |
SOP 2015-2017 | 5.1 | 4.1 |
The weighted average share price at the date of exercise in 2022 was \u20ac 22.55 for the SOP 2010-2014 options (2021: \u20ac 24.63), \u20ac 26.38 for the SOP 2015-2017 options (2021: \u20ac 29.86) and \u20ac 28.34 for the SOP 2005-2009 subscription rights (2021: \u20ac 28.78). The exercise price of the subscription rights and options is equal to the lower of (i) the average closing price of the Company\u2019s share during the thirty days preceding the date of the offer, and (ii)\u00a0the last closing price preceding the date of the offer. When subscription rights are exercised under the SOP 2005-2009 plan, equity is increased by the amount of the proceeds received. Under the terms of the SOP2 plan any subscription rights or options granted through 2004 were vested immediately.
Under the terms of the SOP 2010-2014 stock option plan, options to acquire existing Company shares have been offered to the members of the Bekaert Group Executive, the Senior Vice Presidents and senior executive personnel during the period 2010-2014. The grant dates of each offering were scheduled in the period 2011-2015. The exercise price of the SOP 2010-2014 options was determined in the same manner as in the previous plans. The vesting conditions of the SOP 2010-2014 grants, as well as of the SOP 2005-2009 grants and of the SOP2 grants beginning in 2006, are such that the subscription rights or options will be fully vested on 1 January of the fourth year after the date of the offer. In accordance with the Economic Recovery Act of 27 March 2009, the exercise period of the SOP2 options and SOP 2005-2009 subscription rights granted in 2006, 2007 and 2008 was extended by five years in favor of the persons who were plan beneficiaries and subject to Belgian income tax at the time such extension was offered.
The options granted under SOP2, SOP 2010-2014 and SOP 2015-2017 and the subscription rights granted under SOP 2005- 2009 are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the options is determined using a binomial pricing model.
The members of the Bekaert Group Executive, the senior management and a limited number of management staff members of the Company and a number of its subsidiaries received Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and in 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy. The vesting percentage can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the vesting percentage is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Performance Share Plan | Number of units | ||||
Date granted | Granted | Delivered | Forfeited | Outstanding | Expiry date |
15.02.2019 | 178\u00a0233 | 136\u00a0023 | 42\u00a0210 | \u2014 | 31.12.2021 |
26.07.2019 | 35\u00a0663 | 31\u00a0778 | 3\u00a0885 | \u2014 | 31.12.2021 |
21.01.2020 | 182\u00a0900 | \u2014 | 64\u00a0584 | 118\u00a0316 | 31.12.2022 |
17.08.2020 | 12\u00a0580 | \u2014 | 713 | 11\u00a0867 | 31.12.2022 |
15.01.2021 | 144\u00a0708 | \u2014 | 34\u00a0057 | 110\u00a0651 | 31.12.2023 |
19.08.2021 | 15\u00a0101 | \u2014 | 732 | 14\u00a0369 | 31.12.2023 |
09.09.2021 | 7\u00a0966 | \u2014 | \u2014 | 7\u00a0966 | 31.12.2023 |
04.03.2022 | 131\u00a0407 | \u2014 | 21\u00a0030 | 110\u00a0377 | 31.12.2024 |
25.08.2022 | 3\u00a0209 | \u2014 | \u2014 | 3\u00a0209 | 31.12.2024 |
26.09.2022 | 12\u00a0864 | \u2014 | \u2014 | 12\u00a0864 | 31.12.2024 |
724\u00a0631 | 167\u00a0801 | 167\u00a0211 | 389\u00a0619 |
The Performance Share Units granted under these plans are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value is determined as the share price at the transaction date.
In 2022, on 4 March an offer of 131\u00a0407 equity settled performance share units, on 25 August an offer of 3\u00a0209 equity settled performance share units and on 26 September an offer of 12\u00a0864 equity settled performance share units were made under the terms of the PSP 2022-2024 (2021: on 15 January an offer of 144\u00a0708 equity settled performance share units, on 19 August an offer of 15\u00a0101 and on 9 September an offer of 7\u00a0966 under the terms of the PSP 2018-2020). The fair value of the Performance Share Units under the terms of the PSP plan is equal to the share price at grant date (4\u00a0March 2022: \u20ac 33.80, 25 August 2022: \u20ac 31.02 and 26 September 2022: \u20ac 25.98 (15\u00a0January 2021: \u20ac 29.14, 19 August 2021: \u20ac 39.74 and 9 September 2021: \u20ac 38.44)), since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow). The grant in 2022 represented a fair value of \u20ac 4.9 million (2021: \u20ac 5.1 million). The Group has recorded an expense against equity of \u20ac 9.2 million in 2022 (2021: \u20ac 14.8 million).
2021 | 2022 | |||
PSP | Number of units | Weighted average exercise price (in \u20ac) | Number of units | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 390\u00a0631 | 24.185 | 473\u00a0006 | 26.251 |
Granted during the year | 167\u00a0775 | 30.536 | 147\u00a0480 | 33.057 |
Delivered during the year | 0 | \u2014 | -167\u00a0801 | 23.794 |
Forfeited during the year | -85\u00a0400 | 25.217 | -63\u00a0065 | 29.456 |
Outstanding as at 31 December | 473\u00a0006 | 26.251 | 389\u00a0620 | 29.360 |
In March 2016, the Company introduced a Personal Shareholding Requirement Plan for the Chief Executive Officer and the other members of the Bekaert Group Executive (\u2018BGE\u2019), pursuant to which they can build and maintain a personal shareholding in Company shares and whereby the acquisition of the number of Company shares is supported by a so-called Company matching mechanism. The Company matching mechanism provides that the Company will match the BGE member\u2019s investment in Company shares in year x, with a direct grant of a similar number of Company shares as acquired by the BGE member (such grant to be made at the end of year x + 2). These PSR units will vest following a vesting period of three years, conditional to a service condition subject to bad or good leaver conditions. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Personal Shareholding Requirement Plan
Date acquired | Number of units | ||||
Acquired | Matched | Forfeited | Outstanding | Expiry date | |
31.03.2020 | 10\u00a0766 | 3\u00a0489 | 7\u00a0277 | \u2014 | 31.12.2022 |
31.03.2021 | 9\u00a0112 | \u2014 | 3\u00a0930 | 5\u00a0182 | 31.12.2023 |
31.03.2022 | 13\u00a0757 | \u2014 | 1\u00a0597 | 12\u00a0160 | 31.12.2024 |
33\u00a0635 | 3\u00a0489 | 12\u00a0804 | 17\u00a0342 |
The matching shares to be granted under the Personal Shareholding Requirement Plan 2016 are recognized at fair value at start date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the matching shares is determined using a binomial pricing model. Inputs and outcome of this pricing model are detailed below:
To be matched in | To be matched in | To be matched in | |
Pricing model details - Personal Shareholding Requirement plan | Start date March 2020 | Start date March 2021 | Start date March 2022 |
Inputs to the model | |||
Share price at start date (in \u20ac) | 14.98 | 35.68 | 35.48 |
Expected volatility | 36% | 36% | 37.37% |
Expected dividend yield | 3% | 3% | 4.89% |
Vesting period (years) | 2.75 | 2.75 | 2.75 |
Employee exit rate | 0% | 0% | 0% |
Risk-free interest rate | -0.47% | -0.47% | 1.27% |
Outcome of the model | |||
Fair value (in \u20ac) | 13.81 | 32.99 | 6.48 |
Outstanding PSR Units | \u2014 | 5\u00a0182 | 12\u00a0160 |
The matching shares to be granted represented a fair value of \u20ac\u00a00.1\u00a0million (2021: \u20ac 0.4 million). The Group has recorded an expense against equity of \u20ac\u00a00.2\u00a0million (2021:\u00a0\u20ac\u00a00.1\u00a0million) for the matching shares to be granted, based on their fair value and vesting period.
Number of units - PSR | 2021 | 2022 |
Outstanding as at 1 January | 10\u00a0766 | 18\u00a0878 |
Matched during the year | \u2014 | -3\u00a0489 |
Forfeited during the year | -1\u00a0000 | -11\u00a0804 |
Acquired during the year | 9\u00a0112 | 13\u00a0757 |
Outstanding as at 31 December | 18\u00a0878 | 17\u00a0342 |
Stock appreciation rights (\u2018SAR\u2019)
The Group issues stock appreciation rights (SARs) for certain management employees, granting them the right to receive the intrinsic value of the SARs at the date of exercise. These SARs are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant is recalculated at balance sheet date, using a binomial pricing model. Based on local regulations, the exercise price for any grant under the USA SAR plan is equal to the average closing price of the Company\u2019s share during the thirty days following the date of the offer. The exercise price for the other SAR plans is determined in the same way as for the equity-settled stock option plans: it is equal to the lower of (i) the average closing price of the Company\u2019s share during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer.
Following inputs to the model are used for all grants: share price at balance sheet date: \u20ac 36.28 (2021: \u20ac 39.14), expected volatility in a range between 31% and 37% (2021: 34%), expected dividend yield in a range between 4.3% and 4.6% (2021: 3.0%), vesting period of 3\u00a0years and a contractual life of 10\u00a0years. Inputs for risk-free interest rates vary by grant and are based on the return of Belgian OLO\u2019s (Obligation Lin\u00e9aire / Lineaire Obligatie) with a term equal to the maturity of the SAR grant under consideration.
Exercise prices and fair values of outstanding SARs by grant are shown below:
USA SAR Plan details by grant | ||||
in \u20ac | Granted | Exercise price | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2013 | 20\u00a0900 | 22.09 | 17.04 | \u2014 |
Grant 2014 | 36\u00a0800 | 25.66 | 13.72 | 11.17 |
Grant 2015 | 40\u00a0200 | 25.45 | 13.99 | 11.68 |
Grant 2016 | 20\u00a0250 | 28.38 | 11.91 | 11.33 |
Grant 2017 | 26\u00a0375 | 38.86 | 7.88 | 7.35 |
Grant 2018 | 16\u00a0875 | 37.06 | 8.76 | 8.95 |
Other SAR Plans details by grant | ||||
in \u20ac | Granted | Exercise price | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2013 | 24\u00a0500 | 19.20 | 19.92 | \u2014 |
Exceptional grant 2013 | 10\u00a0000 | 21.45 | 17.69 | \u2014 |
Grant 2014 | 54\u00a0800 | 25.38 | 13.96 | 11.39 |
Grant 2015 | 44\u00a0700 | 26.06 | 13.42 | 11.24 |
Grant 2016 | 38\u00a0500 | 26.38 | 13.33 | 12.42 |
Grant 2017 | 53\u00a0000 | 39.43 | 7.85 | 7.35 |
Grant 2018 | 37\u00a0500 | 34.60 | 9.48 | 9.74 |
At 31 December 2022, the total liability for the USA SAR plan amounted to \u20ac 0.3 million (2021: \u20ac 0.4 million), while the total liability for the other SAR plans amounted to \u20ac 0.5 million (2021: \u20ac 0.5 million).
The Group recorded a total income of \u20ac\u00a00.1\u00a0million (2021: income of \u20ac\u00a00.0\u00a0million) during the year in respect of SARs.
Performance Share Units (\u2018PSU\u2019)
Certain management employees received cash-settled Performance Share Units (PSUs) entitling the beneficiary to receive the value of Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and during 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy, and can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the performance target is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment.
These Performance Share Units are accounted for as cash-settled share-based payments in accordance with IFRS 2. The fair value of each grant under PSU 2018-2020 and under PSU 2022-2024 is equal to the share price at balance sheet date, since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow).
The fair value of outstanding Performance Share Units by grant is shown below:
Performance Share Units details by grant | |||
in \u20ac | Granted | Fair value as at 31 December 2021 | Fair value as at 31 December 2022 |
Grant 2020 | 45\u00a0141 | 39.14 | 36.28 |
Grant 2020 | 444 | 39.14 | 36.28 |
Grant 2021 | 4\u00a0567 | 39.14 | 36.28 |
Grant 2022 | 24\u00a0832 | \u2014 | 36.28 |
At 31 December 2022, the total liability for the USA PSUs amounted to \u20ac\u00a01.6\u00a0million (2021:\u00a0\u20ac\u00a01.6\u00a0million), while the total liability for the other PSUs amounted to \u20ac\u00a03.7\u00a0million (2021:\u00a0\u20ac\u00a04.8\u00a0million).
The Group recorded a total cost of \u20ac\u00a02.2\u00a0million (2021: cost of \u20ac\u00a04.8\u00a0million) during the year in respect of PSUs.
Issued capital | 2021 | 2022 | |||
in thousands of \u20ac | Nominal value | Number of shares | Nominal value | Number of shares | |
1 | As at 1 January | 177\u00a0812 | 60\u00a0414\u00a0841 | 177\u00a0922 | 60\u00a0452\u00a0261 |
Movements in the year | |||||
Issue of new shares | 110 | 37\u00a0420 | 80 | 26\u00a0400 | |
Cancellation of shares | -4\u00a0266 | -1\u00a0449\u00a0409 | |||
As at 31 December | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2 | Structure | ||||
2.1 | Classes of ordinary shares | ||||
Ordinary shares without par value | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2.2 | Registered shares | 22\u00a0841\u00a0937 | 22\u00a0870\u00a0686 | ||
Dematerialized shares | 37\u00a0610\u00a0324 | 36\u00a0158\u00a0566 | |||
Authorized capital not issued | 176\u00a0000 | 176\u00a0000 |
Treasury shares | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -106\u00a0148 | -95\u00a0517 |
Shares purchased | -11\u00a0570 | -125\u00a0905 |
Shares sold | 28\u00a0988 | 35\u00a0707 |
Price difference on shares sold | -6\u00a0787 | -5\u00a0172 |
Cancellations | \u2014 | 51\u00a0573 |
As at 31 December | -95\u00a0517 | -139\u00a0314 |
Issued capital | 2021 | 2022 | |||
in thousands of \u20ac | Nominal value | Number of shares | Nominal value | Number of shares | |
1 | As at 1 January | 177\u00a0812 | 60\u00a0414\u00a0841 | 177\u00a0922 | 60\u00a0452\u00a0261 |
Movements in the year | |||||
Issue of new shares | 110 | 37\u00a0420 | 80 | 26\u00a0400 | |
Cancellation of shares | -4\u00a0266 | -1\u00a0449\u00a0409 | |||
As at 31 December | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2 | Structure | ||||
2.1 | Classes of ordinary shares | ||||
Ordinary shares without par value | 177\u00a0922 | 60\u00a0452\u00a0261 | 173\u00a0737 | 59\u00a0029\u00a0252 | |
2.2 | Registered shares | 22\u00a0841\u00a0937 | 22\u00a0870\u00a0686 | ||
Dematerialized shares | 37\u00a0610\u00a0324 | 36\u00a0158\u00a0566 | |||
Authorized capital not issued | 176\u00a0000 | 176\u00a0000 |
Overview of SOP 2005-2009 Stock Option Plan | |||||||||
Date offered | Date granted | Date of issue of | Exercise price (in \u20ac) | Number of subscription rights | First exercise period | Last exercise | |||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2007 | 18.02.2008 | 22.04.2008 | 28.335 | 215\u00a0100 | 202\u00a0400 | 12\u00a0700 | \u2014 | 22.05 - 30.06.2011 | 15.11 - 15.12.2022 |
785\u00a0058 | 615\u00a0893 | 169\u00a0165 | \u2014 |
Overview of SOP 2010-2014 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
20.12.2012 | 18.02.2013 | 19.200 | 267\u00a0200 | 264\u00a0500 | 2\u00a0700 | \u2014 | End Feb. - 10.04.2016 | Mid Nov. - 19.12.2022 | |
29.03.2013 | 28.05.2013 | 21.450 | 260\u00a0000 | 235\u00a0000 | \u2014 | 25\u00a0000 | End Feb. - 09.04.2017 | End Feb. - 28.03.2023 | |
19.12.2013 | 17.02.2014 | 25.380 | 373\u00a0450 | 325\u00a0150 | 2\u00a0400 | 45\u00a0900 | End Feb. - 09.04.2017 | Mid Nov. - 18.12.2023 | |
18.12.2014 | 16.02.2015 | 26.055 | 349\u00a0810 | 210\u00a0400 | 18\u00a0510 | 120\u00a0900 | End Feb. - 08.04.2018 | Mid Nov. - 17.12.2024 | |
1\u00a0250\u00a0460 | 1\u00a0035\u00a0050 | 23\u00a0610 | 191\u00a0800 |
Overview of SOP 2015-2017 Stock Option Plan | |||||||||
Date | Date | Exercise price (in \u20ac) | Number of options | First exercise period | Last exercise period | ||||
Granted | Exercised | Forfeited | Outstanding | ||||||
17.12.2015 | 15.02.2016 | 26.375 | 227\u00a0250 | 122\u00a0000 | 28\u00a0250 | 77\u00a0000 | End Feb. - 07.04.2019 | Mid Nov. - 16.12.2025 | |
15.12.2016 | 13.02.2017 | 39.426 | 273\u00a0325 | 144 | 47\u00a0125 | 226\u00a0056 | End Feb. - 12.04.2020 | Mid Nov. - 14.12.2026 | |
21.12.2017 | 20.02.2018 | 34.600 | 225\u00a0475 | 72\u00a0500 | 8\u00a0375 | 144\u00a0600 | End Feb. - 11.04.2021 | Mid Nov. - 20.12.2027 | |
726\u00a0050 | 194\u00a0644 | 83\u00a0750 | 447\u00a0656 |
2021 | 2022 | |||
SOP 2005-2009 Stock Option Plan | Number of subscription rights | Weighted average exercise price (in \u20ac) | Number of subscription rights | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 63\u00a0820 | 28.594 | 26\u00a0400 | 28.335 |
Exercised during the year | -37\u00a0420 | 28.776 | -26\u00a0400 | 28.335 |
Outstanding as at 31 December | 26\u00a0400 | 28.335 | \u2014 | 28.335 |
2021 | 2022 | |||
SOP 2010-2014 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 700\u00a0058 | 24.488 | 300\u00a0600 | 24.300 |
Exercised during the year | -399\u00a0458 | 24.630 | -108\u00a0800 | 22.548 |
Outstanding as at 31 December | 300\u00a0600 | 24.300 | 191\u00a0800 | 24.300 |
2021 | 2022 | |||
SOP 2015-2017 Stock Option Plan | Number of options | Weighted average exercise price (in \u20ac) | Number of options | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 640\u00a0800 | 33.769 | 469\u00a0156 | 35.198 |
Exercised during the year | -171\u00a0644 | 29.860 | -21\u00a0500 | 26.375 |
Outstanding as at 31 December | 469\u00a0156 | 35.198 | 447\u00a0656 | 35.198 |
Weighted average remaining contractual life | ||
in years | 2021 | 2022 |
SOP 2005-2009 | 1.0 | \u2014 |
SOP 2010-2014 | 2.2 | 1.5 |
SOP 2015-2017 | 5.1 | 4.1 |
The weighted average share price at the date of exercise in 2022 was \u20ac 22.55 for the SOP 2010-2014 options (2021: \u20ac 24.63), \u20ac 26.38 for the SOP 2015-2017 options (2021: \u20ac 29.86) and \u20ac 28.34 for the SOP 2005-2009 subscription rights (2021: \u20ac 28.78). The exercise price of the subscription rights and options is equal to the lower of (i) the average closing price of the Company\u2019s share during the thirty days preceding the date of the offer, and (ii)\u00a0the last closing price preceding the date of the offer. When subscription rights are exercised under the SOP 2005-2009 plan, equity is increased by the amount of the proceeds received. Under the terms of the SOP2 plan any subscription rights or options granted through 2004 were vested immediately.
Under the terms of the SOP 2010-2014 stock option plan, options to acquire existing Company shares have been offered to the members of the Bekaert Group Executive, the Senior Vice Presidents and senior executive personnel during the period 2010-2014. The grant dates of each offering were scheduled in the period 2011-2015. The exercise price of the SOP 2010-2014 options was determined in the same manner as in the previous plans. The vesting conditions of the SOP 2010-2014 grants, as well as of the SOP 2005-2009 grants and of the SOP2 grants beginning in 2006, are such that the subscription rights or options will be fully vested on 1 January of the fourth year after the date of the offer. In accordance with the Economic Recovery Act of 27 March 2009, the exercise period of the SOP2 options and SOP 2005-2009 subscription rights granted in 2006, 2007 and 2008 was extended by five years in favor of the persons who were plan beneficiaries and subject to Belgian income tax at the time such extension was offered.
The options granted under SOP2, SOP 2010-2014 and SOP 2015-2017 and the subscription rights granted under SOP 2005- 2009 are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the options is determined using a binomial pricing model.
The members of the Bekaert Group Executive, the senior management and a limited number of management staff members of the Company and a number of its subsidiaries received Performance Share Units: during 2019, 2020 and 2021 under the conditions of the Performance Share Plan 2018-2020 and in 2022 under the conditions of the Performance Share Plan 2022-2024. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy. The vesting percentage can vary from 0% to 300%. At granting date, the assumption is taken that the grant will vest at a vesting percentage of 100%, the vesting percentage is reassessed for the expected performance at each balance sheet date, if needed the vesting percentage is adjusted based on that assessment. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Performance Share Plan | Number of units | ||||
Date granted | Granted | Delivered | Forfeited | Outstanding | Expiry date |
15.02.2019 | 178\u00a0233 | 136\u00a0023 | 42\u00a0210 | \u2014 | 31.12.2021 |
26.07.2019 | 35\u00a0663 | 31\u00a0778 | 3\u00a0885 | \u2014 | 31.12.2021 |
21.01.2020 | 182\u00a0900 | \u2014 | 64\u00a0584 | 118\u00a0316 | 31.12.2022 |
17.08.2020 | 12\u00a0580 | \u2014 | 713 | 11\u00a0867 | 31.12.2022 |
15.01.2021 | 144\u00a0708 | \u2014 | 34\u00a0057 | 110\u00a0651 | 31.12.2023 |
19.08.2021 | 15\u00a0101 | \u2014 | 732 | 14\u00a0369 | 31.12.2023 |
09.09.2021 | 7\u00a0966 | \u2014 | \u2014 | 7\u00a0966 | 31.12.2023 |
04.03.2022 | 131\u00a0407 | \u2014 | 21\u00a0030 | 110\u00a0377 | 31.12.2024 |
25.08.2022 | 3\u00a0209 | \u2014 | \u2014 | 3\u00a0209 | 31.12.2024 |
26.09.2022 | 12\u00a0864 | \u2014 | \u2014 | 12\u00a0864 | 31.12.2024 |
724\u00a0631 | 167\u00a0801 | 167\u00a0211 | 389\u00a0619 |
The Performance Share Units granted under these plans are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value is determined as the share price at the transaction date.
In 2022, on 4 March an offer of 131\u00a0407 equity settled performance share units, on 25 August an offer of 3\u00a0209 equity settled performance share units and on 26 September an offer of 12\u00a0864 equity settled performance share units were made under the terms of the PSP 2022-2024 (2021: on 15 January an offer of 144\u00a0708 equity settled performance share units, on 19 August an offer of 15\u00a0101 and on 9 September an offer of 7\u00a0966 under the terms of the PSP 2018-2020). The fair value of the Performance Share Units under the terms of the PSP plan is equal to the share price at grant date (4\u00a0March 2022: \u20ac 33.80, 25 August 2022: \u20ac 31.02 and 26 September 2022: \u20ac 25.98 (15\u00a0January 2021: \u20ac 29.14, 19 August 2021: \u20ac 39.74 and 9 September 2021: \u20ac 38.44)), since the performance conditions are non-market conditions (Underlying EBITDA and operational cash flow). The grant in 2022 represented a fair value of \u20ac 4.9 million (2021: \u20ac 5.1 million). The Group has recorded an expense against equity of \u20ac 9.2 million in 2022 (2021: \u20ac 14.8 million).
2021 | 2022 | |||
PSP | Number of units | Weighted average exercise price (in \u20ac) | Number of units | Weighted average exercise price (in \u20ac) |
Outstanding as at 1 January | 390\u00a0631 | 24.185 | 473\u00a0006 | 26.251 |
Granted during the year | 167\u00a0775 | 30.536 | 147\u00a0480 | 33.057 |
Delivered during the year | 0 | \u2014 | -167\u00a0801 | 23.794 |
Forfeited during the year | -85\u00a0400 | 25.217 | -63\u00a0065 | 29.456 |
Outstanding as at 31 December | 473\u00a0006 | 26.251 | 389\u00a0620 | 29.360 |
In March 2016, the Company introduced a Personal Shareholding Requirement Plan for the Chief Executive Officer and the other members of the Bekaert Group Executive (\u2018BGE\u2019), pursuant to which they can build and maintain a personal shareholding in Company shares and whereby the acquisition of the number of Company shares is supported by a so-called Company matching mechanism. The Company matching mechanism provides that the Company will match the BGE member\u2019s investment in Company shares in year x, with a direct grant of a similar number of Company shares as acquired by the BGE member (such grant to be made at the end of year x + 2). These PSR units will vest following a vesting period of three years, conditional to a service condition subject to bad or good leaver conditions. For more information we refer to the \u2018Remuneration Report\u2019 in the \u2018Corporate Governance Statements\u2019 section of this report.
Overview of Personal Shareholding Requirement Plan
Date acquired | Number of units | ||||
Acquired | Matched | Forfeited | Outstanding | Expiry date | |
31.03.2020 | 10\u00a0766 | 3\u00a0489 | 7\u00a0277 | \u2014 | 31.12.2022 |
31.03.2021 | 9\u00a0112 | \u2014 | 3\u00a0930 | 5\u00a0182 | 31.12.2023 |
31.03.2022 | 13\u00a0757 | \u2014 | 1\u00a0597 | 12\u00a0160 | 31.12.2024 |
33\u00a0635 | 3\u00a0489 | 12\u00a0804 | 17\u00a0342 |
The matching shares to be granted under the Personal Shareholding Requirement Plan 2016 are recognized at fair value at start date in accordance with IFRS 2 (see note 6.14. \u2018Retained earnings and other Group reserves\u2019). The fair value of the matching shares is determined using a binomial pricing model. Inputs and outcome of this pricing model are detailed below:
To be matched in | To be matched in | To be matched in | |
Pricing model details - Personal Shareholding Requirement plan | Start date March 2020 | Start date March 2021 | Start date March 2022 |
Inputs to the model | |||
Share price at start date (in \u20ac) | 14.98 | 35.68 | 35.48 |
Expected volatility | 36% | 36% | 37.37% |
Expected dividend yield | 3% | 3% | 4.89% |
Vesting period (years) | 2.75 | 2.75 | 2.75 |
Employee exit rate | 0% | 0% | 0% |
Risk-free interest rate | -0.47% | -0.47% | 1.27% |
Outcome of the model | |||
Fair value (in \u20ac) | 13.81 | 32.99 | 6.48 |
Outstanding PSR Units | \u2014 | 5\u00a0182 | 12\u00a0160 |
The matching shares to be granted represented a fair value of \u20ac\u00a00.1\u00a0million (2021: \u20ac 0.4 million). The Group has recorded an expense against equity of \u20ac\u00a00.2\u00a0million (2021:\u00a0\u20ac\u00a00.1\u00a0million) for the matching shares to be granted, based on their fair value and vesting period.
Number of units - PSR | 2021 | 2022 |
Outstanding as at 1 January | 10\u00a0766 | 18\u00a0878 |
Matched during the year | \u2014 | -3\u00a0489 |
Forfeited during the year | -1\u00a0000 | -11\u00a0804 |
Acquired during the year | 9\u00a0112 | 13\u00a0757 |
Outstanding as at 31 December | 18\u00a0878 | 17\u00a0342 |
Revaluation reserve for non-consolidated equity investments | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | -11\u00a0867 | -5\u00a0986 |
Fair value changes | 5\u00a0882 | -2\u00a0367 |
As at 31 December | -5\u00a0986 | -8\u00a0353 |
Of which | ||
Investment in Shougang Concord Century Holdings Ltd | -6\u00a0078 | -9\u00a0228 |
Other investments | 92 | 876 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
As at 1 January | 87\u00a0175 | 130\u00a0971 |
Changes in Group structure | 3\u00a0601 | \u2014 |
Share of the result for the period | 43\u00a0643 | 20\u00a0457 |
Share of other comprehensive income excluding CTA | 422 | -396 |
Dividend pay-out | -6\u00a0649 | -19\u00a0763 |
Capital increases | 3\u00a0975 | \u2014 |
Exchange gains and losses (-) | -1\u00a0196 | 5\u00a0581 |
As at 31 December | 130\u00a0971 | 136\u00a0850 |
The changes in Group structure and the Capital Increase in 2021 mainly related to the merger of Proalco SAS (subsidiary of Bekaert) with the steel wire activities of Almasa SA, both located in Colombia.
The share in the result of the period for entities in which NCI are held, deteriorated significantly. The main contributing entities were located in Chile and Peru.
In accordance with IFRS 12 \u2018Disclosures of Interests in Other Entities\u2019, following information is provided on subsidiaries that have non-controlling interests that are material to the Group. The objective of IFRS 12 is to require an entity to disclose information that enables users of its financial statements to evaluate (a) the nature and risks associated with its interests in other entities, and (b) the effects of those interests on its financial position, financial performance and cash flows. Bekaert has many partnerships across the world, most entities of which would not individually meet any reasonable materiality criterion. Therefore, the Group has identified two non-wholly owned groups of entities which are interconnected through their line of business and shareholder structure: (1) the '\u2019Steel Wire Solutions\u2019 entities (SWS entities) in Chile and Peru, where the non-controlling interests are mainly held by the Chilean partners, and (2) the SWS entities in the Andina region, where the non-controlling interests are mainly held by the Ecuadorian Kohn family and ArcelorMittal. In presenting aggregated information for these entity groups, only intercompany effects within each entity group have been eliminated, while all other entities of the Group have been treated as third parties.
Proportion of NCI at year-end | |||
Entities included in material NCI disclosure | Country | 2021 | 2022 |
BBRG entities | |||
Procables SA | Peru | 3.9% | 3.9% |
SWS entities Chile and Peru | |||
Acma SA | Chile | 48.0% | 48.0% |
Acmanet SA | Chile | 48.0% | 48.0% |
Industrias Acmanet Ltda | Chile | 48.0% | 48.0% |
Industrias Chilenas de Alambre - Inchalam SA | Chile | 48.0% | 48.0% |
Sujetar del Peru SAC | Peru | 0.0% | 62.5% |
Procercos SA | Chile | 48.0% | 48.0% |
Prodalam SA | Chile | 48.0% | 48.0% |
Prodicom Selva SAC | Peru | 62.5% | 62.5% |
Prodimin SAC | Peru | 62.5% | 62.5% |
Prodac Contrata SAC | Peru | 62.5% | 62.5% |
Productos de Acero Cassad\u00f3 SA | Peru | 62.5% | 62.5% |
SWS entities Andina region | |||
Agro-Bekaert Colombia SAS | Colombia | 60.0% | 60.0% |
Agro - Bekaert Springs, SL | Spain | 60.0% | 60.0% |
Bekaert Ideal SL | Spain | 20.0% | 20.0% |
Bekaert Guatemala SA | Guatemala | 41.6% | 41.6% |
Servicios Ideal AGF Inttegra Cia. Ltda | Ecuador | 70.8% | 70.8% |
BIA Alambres Costa Rica SA | Costa Rica | 41.6% | 41.6% |
Ideal Alambrec SA | Ecuador | 41.6% | 41.6% |
InverVicson SA | Venezuela | 20.0% | 20.0% |
Productora de Alambres Colombianos Proalco SAS | Colombia | 60.0% | 60.0% |
Vicson SA | Venezuela | 20.0% | 20.0% |
The principal activity of the main entities listed above is manufacturing and selling wire and other wire products, mainly for the local market. Following entities are essentially holdings, having interests in one or more of the other entities listed above: Industrias Acmanet Ltda, Procercos SA, Bekaert Ideal SL and Agro - Bekaert Springs SL. The following table shows the relative importance of the entity groups with material NCI in terms of results and equity attributable to NCI.
Material and other NCI | Result attributable to NCI | Equity attributable to NCI | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
SWS entities Chile and Peru | 35\u00a0633 | 15\u00a0733 | 100\u00a0872 | 105\u00a0814 |
SWS entities Andina region | 6\u00a0075 | 2\u00a0711 | 21\u00a0858 | 22\u00a0421 |
Consolidation adjustments on material NCI | -651 | 228 | -27\u00a0573 | -27\u00a0316 |
Contribution of material NCI to consolidated NCI | 41\u00a0057 | 18\u00a0672 | 95\u00a0157 | 100\u00a0919 |
Other NCI | 2\u00a0586 | 1\u00a0785 | 35\u00a0814 | 35\u00a0931 |
Total consolidated NCI | 43\u00a0643 | 20\u00a0457 | 130\u00a0971 | 136\u00a0850 |
The following tables show concise basic statements of the non-wholly owned groups of entities.
SWS entities Chile and Peru | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 382\u00a0128 | 339\u00a0103 |
Non-current assets | 119\u00a0973 | 130\u00a0920 |
Current liabilities | 247\u00a0022 | 224\u00a0591 |
Non-current liabilities | 60\u00a0402 | 42\u00a0767 |
Equity attributable to equity holders of Bekaert | 93\u00a0805 | 96\u00a0852 |
Equity attributable to NCI | 100\u00a0872 | 105\u00a0814 |
SWS entities Chile and Peru | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 689\u00a0790 | 681\u00a0733 |
Expenses | -619\u00a0952 | -650\u00a0307 |
Result for the period | 69\u00a0838 | 31\u00a0426 |
Result for the period attributable to equity holders of Bekaert | 34\u00a0205 | 15\u00a0693 |
Result for the period attributable to NCI | 35\u00a0633 | 15\u00a0733 |
Other comprehensive income for the period | -8\u00a0946 | 11\u00a0354 |
OCI attributable to equity holders of Bekaert | -5\u00a0302 | 5\u00a0512 |
OCI attributable to NCI | -3\u00a0644 | 5\u00a0842 |
Total comprehensive income for the period | 60\u00a0892 | 42\u00a0780 |
Total comprehensive income attributable to equity holders of Bekaert | 28\u00a0903 | 21\u00a0205 |
Total comprehensive income attributable to NCI | 31\u00a0989 | 21\u00a0575 |
Dividends paid to NCI | -3\u00a0475 | -17\u00a0588 |
Net cash inflow (outflow) from operating activities | -4\u00a0351 | 9\u00a0166 |
Net cash inflow (outflow) from investing activities | -8\u00a0402 | -13\u00a0344 |
Net cash inflow (outflow) from financing activities | 22\u00a0430 | -26\u00a0881 |
Net cash inflow (outflow) | 9\u00a0676 | -31\u00a0059 |
The combination of a slight decrease in sales (-1.2%) and increase in expenses (+4.9%) results in worse profitability in absolute terms. As the increase in expenses was not mirrored in the sales evolution, profitability as percentage was decreased significantly (underlying EBIT margin on sales at 7.1% compared to (15.0% last year).
The strong decrease in EBITDA was amplified by the working capital evolution. As a result the Net Debt position ended per year-end much higher than last year.
SWS entities Andina region | ||
in thousands of \u20ac | 2021 | 2022 |
Current assets | 150\u00a0291 | 117\u00a0430 |
Non-current assets | 52\u00a0206 | 51\u00a0291 |
Current liabilities | 143\u00a0778 | 111\u00a0249 |
Non-current liabilities | 11\u00a0067 | 10\u00a0028 |
Equity attributable to equity holders of Bekaert | 25\u00a0795 | 25\u00a0023 |
Equity attributable to NCI | 21\u00a0858 | 22\u00a0421 |
SWS entities Andina region | ||
in thousands of \u20ac | 2021 | 2022 |
Sales | 237\u00a0878 | 276\u00a0074 |
Expenses | -224\u00a0404 | -270\u00a0266 |
Result for the period | 13\u00a0473 | 5\u00a0808 |
Result for the period attributable to equity holders of Bekaert | 7\u00a0398 | 3\u00a0098 |
Result for the period attributable to NCI | 6\u00a0075 | 2\u00a0711 |
Other comprehensive income for the period | -254 | 864 |
OCI attributable to equity holders of Bekaert | -203 | 893 |
OCI attributable to NCI | -51 | -29 |
Total comprehensive income for the period | 13\u00a0220 | 6\u00a0673 |
Total comprehensive income attributable to equity holders of Bekaert | 7\u00a0196 | 3\u00a0991 |
Total comprehensive income attributable to NCI | 6\u00a0024 | 2\u00a0682 |
Dividends paid to NCI | -3\u00a0137 | -2\u00a0078 |
Net cash inflow (outflow) from operating activities | 28\u00a0707 | -32\u00a0320 |
Net cash inflow (outflow) from investing activities | -4\u00a0940 | -5\u00a0829 |
Net cash inflow (outflow) from financing activities | -13\u00a0089 | 26\u00a0195 |
Net cash inflow (outflow) | 10\u00a0678 | -11\u00a0954 |
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2021 | 6\u00a0525 | 6\u00a0600 | 20\u00a0015 | 3\u00a0448 | 36\u00a0588 |
Additional provisions | 56 | 1\u00a0516 | 2\u00a0397 | 867 | 4\u00a0836 |
Unutilized amounts released | -220 | -3\u00a0309 | -591 | -1\u00a0069 | -5\u00a0188 |
Increase in present value | \u2014 | \u2014 | \u2014 | 15 | 15 |
Charged to the income statement | -164 | -1\u00a0793 | 1\u00a0807 | -187 | -337 |
Amounts utilized during the year | -5\u00a0661 | -1\u00a0930 | -858 | -388 | -8\u00a0837 |
Exchange gains (-) and losses | 3 | 186 | 89 | 11 | 289 |
As at 31 December 2021 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Of which | |||||
current | 703 | 1\u00a0987 | 635 | 1\u00a0066 | 4\u00a0392 |
non-current - between 1 and 5 years | \u2014 | 1\u00a0075 | 9\u00a0008 | 1\u00a0250 | 11\u00a0333 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 568 | 11\u00a0978 |
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2022 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Additional provisions | 123 | 5\u00a0163 | 1\u00a0225 | 6\u00a0764 | 13\u00a0275 |
Unutilized amounts released | -117 | -1\u00a0681 | -539 | -836 | -3\u00a0173 |
Increase in present value | \u2014 | \u2014 | \u2014 | 13 | 13 |
Charged to the income statement | 6 | 3\u00a0482 | 686 | 5\u00a0941 | 10\u00a0116 |
Amounts utilized during the year | -680 | -942 | -1\u00a0718 | -484 | -3\u00a0824 |
Exchange gains (-) and losses | 1 | -37 | 32 | 89 | 85 |
As at 31 December 2022 | 30 | 5\u00a0565 | 20\u00a0053 | 8\u00a0430 | 34\u00a0079 |
Of which | |||||
current | 30 | 2\u00a0345 | 415 | 3\u00a0364 | 6\u00a0154 |
non-current - between 1 and 5 years | \u2014 | 3\u00a0221 | 8\u00a0228 | 4\u00a0398 | 15\u00a0847 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 667 | 12\u00a0077 |
Provisions for claims mainly related to product warranty programs and various product quality claims in several entities.
The environmental provisions mainly related to sites in EMEA. The expected soil sanitation costs are reviewed at each balance sheet date, based on external expert assessments. Timing of settlement is uncertain as it is often triggered by decisions on the destination of the premises. The increase in the environmental provisions mainly relate to a new provision linked to the disposal of the Figline plant, martially offset by the utilization and release of environmental provisions linked to sites in Belgium and UK.\u00a0
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2021 | 6\u00a0525 | 6\u00a0600 | 20\u00a0015 | 3\u00a0448 | 36\u00a0588 |
Additional provisions | 56 | 1\u00a0516 | 2\u00a0397 | 867 | 4\u00a0836 |
Unutilized amounts released | -220 | -3\u00a0309 | -591 | -1\u00a0069 | -5\u00a0188 |
Increase in present value | \u2014 | \u2014 | \u2014 | 15 | 15 |
Charged to the income statement | -164 | -1\u00a0793 | 1\u00a0807 | -187 | -337 |
Amounts utilized during the year | -5\u00a0661 | -1\u00a0930 | -858 | -388 | -8\u00a0837 |
Exchange gains (-) and losses | 3 | 186 | 89 | 11 | 289 |
As at 31 December 2021 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Of which | |||||
current | 703 | 1\u00a0987 | 635 | 1\u00a0066 | 4\u00a0392 |
non-current - between 1 and 5 years | \u2014 | 1\u00a0075 | 9\u00a0008 | 1\u00a0250 | 11\u00a0333 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 568 | 11\u00a0978 |
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2022 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Additional provisions | 123 | 5\u00a0163 | 1\u00a0225 | 6\u00a0764 | 13\u00a0275 |
Unutilized amounts released | -117 | -1\u00a0681 | -539 | -836 | -3\u00a0173 |
Increase in present value | \u2014 | \u2014 | \u2014 | 13 | 13 |
Charged to the income statement | 6 | 3\u00a0482 | 686 | 5\u00a0941 | 10\u00a0116 |
Amounts utilized during the year | -680 | -942 | -1\u00a0718 | -484 | -3\u00a0824 |
Exchange gains (-) and losses | 1 | -37 | 32 | 89 | 85 |
As at 31 December 2022 | 30 | 5\u00a0565 | 20\u00a0053 | 8\u00a0430 | 34\u00a0079 |
Of which | |||||
current | 30 | 2\u00a0345 | 415 | 3\u00a0364 | 6\u00a0154 |
non-current - between 1 and 5 years | \u2014 | 3\u00a0221 | 8\u00a0228 | 4\u00a0398 | 15\u00a0847 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 667 | 12\u00a0077 |
Provisions for claims mainly related to product warranty programs and various product quality claims in several entities.
The environmental provisions mainly related to sites in EMEA. The expected soil sanitation costs are reviewed at each balance sheet date, based on external expert assessments. Timing of settlement is uncertain as it is often triggered by decisions on the destination of the premises. The increase in the environmental provisions mainly relate to a new provision linked to the disposal of the Figline plant, martially offset by the utilization and release of environmental provisions linked to sites in Belgium and UK.\u00a0
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2021 | 6\u00a0525 | 6\u00a0600 | 20\u00a0015 | 3\u00a0448 | 36\u00a0588 |
Additional provisions | 56 | 1\u00a0516 | 2\u00a0397 | 867 | 4\u00a0836 |
Unutilized amounts released | -220 | -3\u00a0309 | -591 | -1\u00a0069 | -5\u00a0188 |
Increase in present value | \u2014 | \u2014 | \u2014 | 15 | 15 |
Charged to the income statement | -164 | -1\u00a0793 | 1\u00a0807 | -187 | -337 |
Amounts utilized during the year | -5\u00a0661 | -1\u00a0930 | -858 | -388 | -8\u00a0837 |
Exchange gains (-) and losses | 3 | 186 | 89 | 11 | 289 |
As at 31 December 2021 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Of which | |||||
current | 703 | 1\u00a0987 | 635 | 1\u00a0066 | 4\u00a0392 |
non-current - between 1 and 5 years | \u2014 | 1\u00a0075 | 9\u00a0008 | 1\u00a0250 | 11\u00a0333 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 568 | 11\u00a0978 |
in thousands of \u20ac | Restructuring | Claims | Environment | Other | Total |
As at 1 January 2022 | 703 | 3\u00a0062 | 21\u00a0053 | 2\u00a0884 | 27\u00a0703 |
Additional provisions | 123 | 5\u00a0163 | 1\u00a0225 | 6\u00a0764 | 13\u00a0275 |
Unutilized amounts released | -117 | -1\u00a0681 | -539 | -836 | -3\u00a0173 |
Increase in present value | \u2014 | \u2014 | \u2014 | 13 | 13 |
Charged to the income statement | 6 | 3\u00a0482 | 686 | 5\u00a0941 | 10\u00a0116 |
Amounts utilized during the year | -680 | -942 | -1\u00a0718 | -484 | -3\u00a0824 |
Exchange gains (-) and losses | 1 | -37 | 32 | 89 | 85 |
As at 31 December 2022 | 30 | 5\u00a0565 | 20\u00a0053 | 8\u00a0430 | 34\u00a0079 |
Of which | |||||
current | 30 | 2\u00a0345 | 415 | 3\u00a0364 | 6\u00a0154 |
non-current - between 1 and 5 years | \u2014 | 3\u00a0221 | 8\u00a0228 | 4\u00a0398 | 15\u00a0847 |
non-current - more than 5 years | \u2014 | \u2014 | 11\u00a0410 | 667 | 12\u00a0077 |
Provisions for claims mainly related to product warranty programs and various product quality claims in several entities.
The environmental provisions mainly related to sites in EMEA. The expected soil sanitation costs are reviewed at each balance sheet date, based on external expert assessments. Timing of settlement is uncertain as it is often triggered by decisions on the destination of the premises. The increase in the environmental provisions mainly relate to a new provision linked to the disposal of the Figline plant, martially offset by the utilization and release of environmental provisions linked to sites in Belgium and UK.\u00a0
An analysis of the carrying amount of the Group\u2019s interest-bearing debt by contractual maturity is presented below:
2021 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0219 | 36\u00a0837 | 19\u00a0588 | 76\u00a0644 |
Cash guarantees received | \u2014 | 84 | 120 | 204 |
Credit institutions | 217\u00a0523 | 177\u00a0047 | \u2014 | 394\u00a0571 |
Schuldschein loans | \u2014 | 298\u00a0964 | 20\u00a0941 | 319\u00a0905 |
Bonds | \u2014 | 200\u00a0000 | 200\u00a0000 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 |
Total financial debt | 237\u00a0742 | 712\u00a0932 | 240\u00a0649 | 1\u00a0191\u00a0324 |
2022 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0002 | 36\u00a0872 | 20\u00a0331 | 77\u00a0205 |
Cash guarantees received | \u2014 | 144 | 66 | 210 |
Credit institutions | 291\u00a0989 | 146\u00a0413 | \u2014 | 438\u00a0401 |
Schuldschein loans | 188\u00a0598 | 131\u00a0582 | \u2014 | 320\u00a0179 |
Bonds | \u2014 | 400\u00a0000 | \u2014 | 400\u00a0000 |
Total financial debt | 500\u00a0588 | 715\u00a0011 | 20\u00a0397 | 1\u00a0235\u00a0996 |
An analysis of the undiscounted outflows relating to the Group\u2019s financial liabilities by contractual maturity is presented in note 7.2.\u00a0\u2018Financial risk management and financial derivatives\u2019. The financial debt due within one year increased with \u20ac 262.8 million mainly due to repayments of the Schuldschein loans which will take place in June 2023 (\u20ac 188.6 million at amortized cost per year-end 2022).
In accordance with the disclosure requirements of IAS 7 \u2018Statement of Cash Flows\u2019, this section presents an overview of the changes in liabilities arising from financing activities. The qualification as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash flow statement, the cash flows from long-term interest-bearing debt are analyzed between proceeds and repayments.
In 2022, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 33.5 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
In 2021, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 19.6 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019), and interest accruals from amortizations on liabilities using the effective interest method (\u20ac 4.9 million). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
2021 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 1\u00a0380\u00a0866 | -416\u00a0174 | \u2014 | 3\u00a0619 | \u2014 | 24\u00a0802 | 993\u00a0114 |
Cash guarantees received | 171 | 12 | \u2014 | 20 | \u2014 | \u2014 | 204 |
Lease liability | 80\u00a0505 | -26\u00a0290 | \u2014 | 2\u00a0805 | \u2014 | 19\u00a0624 | 76\u00a0644 |
Credit institutions | 205\u00a0463 | -9\u00a0896 | \u2014 | 794 | \u2014 | \u2014 | 196\u00a0361 |
Schuldschein loans | 319\u00a0635 | \u2014 | \u2014 | \u2014 | \u2014 | 270 | 319\u00a0905 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | 375\u00a0092 | -380\u00a0000 | \u2014 | \u2014 | \u2014 | 4\u00a0908 | \u2014 |
Short-term interest bearing debt | 228\u00a0865 | -43\u00a0328 | \u2014 | 12\u00a0672 | \u2014 | \u2014 | 198\u00a0210 |
Total financial debt | 1\u00a0609\u00a0732 | -459\u00a0501 | \u2014 | 16\u00a0291 | \u2014 | 24\u00a0802 | 1\u00a0191\u00a0324 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 1\u00a0081 | \u2014 | \u2014 | \u2014 | -964 | \u2014 | 118 |
Cross-currency interest-rate swaps | -5\u00a0030 | \u2014 | \u2014 | \u2014 | 6\u00a0675 | \u2014 | 1\u00a0645 |
Other liabilities from financing activities | |||||||
Conversion derivative | 34 | \u2014 | \u2014 | \u2014 | -34 | \u2014 | \u2014 |
Total liabilities from financing activities | 1\u00a0605\u00a0817 | -459\u00a0501 | \u2014 | 16\u00a0291 | 5\u00a0677 | 24\u00a0802 | 1\u00a0193\u00a0087 |
\u00b9\u00a0 Including the current portion of non-current interest-bearing debt of \u20ac 412.8 million as at 1 January and \u20ac 39.5 million as at 31 December.
2022 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 993\u00a0114 | -75\u00a0577 | \u2014 | 2\u00a0107 | \u2014 | 33\u00a0974 | 953\u00a0618 |
Cash guarantees received | 204 | 11 | \u2014 | -5 | \u2014 | \u2014 | 210 |
Lease liability | 76\u00a0644 | -31\u00a0704 | \u2014 | -1\u00a0434 | \u2014 | 33\u00a0699 | 77\u00a0205 |
Credit institutions | 196\u00a0361 | -43\u00a0885 | \u2014 | 3\u00a0546 | \u2014 | \u2014 | 156\u00a0023 |
Schuldschein loans | 319\u00a0905 | \u2014 | \u2014 | \u2014 | \u2014 | 275 | 320\u00a0179 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Short-term interest bearing debt | 198\u00a0210 | 67\u00a0349 | 614 | 16\u00a0205 | \u2014 | \u2014 | 282\u00a0378 |
Total financial debt | 1\u00a0191\u00a0324 | -8\u00a0228 | 614 | 18\u00a0312 | \u2014 | 33\u00a0974 | 1\u00a0235\u00a0996 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 118 | \u2014 | \u2014 | \u2014 | -7\u00a0295 | \u2014 | -7\u00a0178 |
Cross-currency interest-rate swaps | 1\u00a0645 | \u2014 | \u2014 | \u2014 | -4\u00a0290 | \u2014 | -2\u00a0645 |
Total liabilities from financing activities | 1\u00a0193\u00a0087 | -8\u00a0228 | 614 | 18\u00a0312 | -11\u00a0586 | 33\u00a0974 | 1\u00a0226\u00a0173 |
An analysis of the carrying amount of the Group\u2019s interest-bearing debt by contractual maturity is presented below:
2021 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0219 | 36\u00a0837 | 19\u00a0588 | 76\u00a0644 |
Cash guarantees received | \u2014 | 84 | 120 | 204 |
Credit institutions | 217\u00a0523 | 177\u00a0047 | \u2014 | 394\u00a0571 |
Schuldschein loans | \u2014 | 298\u00a0964 | 20\u00a0941 | 319\u00a0905 |
Bonds | \u2014 | 200\u00a0000 | 200\u00a0000 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 |
Total financial debt | 237\u00a0742 | 712\u00a0932 | 240\u00a0649 | 1\u00a0191\u00a0324 |
2022 | ||||
in thousands of \u20ac | Due within 1 year | Due between | Due after 5 years | Total |
Interest-bearing debt | ||||
Lease liability | 20\u00a0002 | 36\u00a0872 | 20\u00a0331 | 77\u00a0205 |
Cash guarantees received | \u2014 | 144 | 66 | 210 |
Credit institutions | 291\u00a0989 | 146\u00a0413 | \u2014 | 438\u00a0401 |
Schuldschein loans | 188\u00a0598 | 131\u00a0582 | \u2014 | 320\u00a0179 |
Bonds | \u2014 | 400\u00a0000 | \u2014 | 400\u00a0000 |
Total financial debt | 500\u00a0588 | 715\u00a0011 | 20\u00a0397 | 1\u00a0235\u00a0996 |
An analysis of the undiscounted outflows relating to the Group\u2019s financial liabilities by contractual maturity is presented in note 7.2.\u00a0\u2018Financial risk management and financial derivatives\u2019. The financial debt due within one year increased with \u20ac 262.8 million mainly due to repayments of the Schuldschein loans which will take place in June 2023 (\u20ac 188.6 million at amortized cost per year-end 2022).
The following table summarizes the calculation of the net debt.
in thousands of \u20ac | 2021 | 2022 |
Non-current interest-bearing debt | 953\u00a0581 | 735\u00a0408 |
Current interest-bearing debt | 237\u00a0742 | 500\u00a0588 |
Total financial debt | 1\u00a0191\u00a0324 | 1\u00a0235\u00a0996 |
Non-current financial receivables and cash guarantees | -10\u00a0192 | -9\u00a0665 |
Current financial receivables and cash guarantees | -6\u00a0475 | -6\u00a0352 |
Short-term deposits | -80\u00a0058 | -4\u00a0766 |
Cash and cash equivalents | -677\u00a0270 | -728\u00a0095 |
Net debt | 417\u00a0329 | 487\u00a0118 |
In accordance with the disclosure requirements of IAS 7 \u2018Statement of Cash Flows\u2019, this section presents an overview of the changes in liabilities arising from financing activities. The qualification as long-term vs short-term debt is based on the initial maturity of the debt. In the consolidated cash flow statement, the cash flows from long-term interest-bearing debt are analyzed between proceeds and repayments.
In 2022, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 33.5 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
In 2021, other changes in financial debt mainly related to the non-cash movements on the lease liability (\u20ac 19.6 million) (see also note 6.4. \u2018Right-of-use (RoU) property, plant and equipment\u2019), and interest accruals from amortizations on liabilities using the effective interest method (\u20ac 4.9 million). Derivatives held to hedge financial debt included swaps and options that provide (economic) hedges for interest-rate risk, see note 7.2. \u2018Financial risk management and financial derivatives\u2019.
2021 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 1\u00a0380\u00a0866 | -416\u00a0174 | \u2014 | 3\u00a0619 | \u2014 | 24\u00a0802 | 993\u00a0114 |
Cash guarantees received | 171 | 12 | \u2014 | 20 | \u2014 | \u2014 | 204 |
Lease liability | 80\u00a0505 | -26\u00a0290 | \u2014 | 2\u00a0805 | \u2014 | 19\u00a0624 | 76\u00a0644 |
Credit institutions | 205\u00a0463 | -9\u00a0896 | \u2014 | 794 | \u2014 | \u2014 | 196\u00a0361 |
Schuldschein loans | 319\u00a0635 | \u2014 | \u2014 | \u2014 | \u2014 | 270 | 319\u00a0905 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | 375\u00a0092 | -380\u00a0000 | \u2014 | \u2014 | \u2014 | 4\u00a0908 | \u2014 |
Short-term interest bearing debt | 228\u00a0865 | -43\u00a0328 | \u2014 | 12\u00a0672 | \u2014 | \u2014 | 198\u00a0210 |
Total financial debt | 1\u00a0609\u00a0732 | -459\u00a0501 | \u2014 | 16\u00a0291 | \u2014 | 24\u00a0802 | 1\u00a0191\u00a0324 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 1\u00a0081 | \u2014 | \u2014 | \u2014 | -964 | \u2014 | 118 |
Cross-currency interest-rate swaps | -5\u00a0030 | \u2014 | \u2014 | \u2014 | 6\u00a0675 | \u2014 | 1\u00a0645 |
Other liabilities from financing activities | |||||||
Conversion derivative | 34 | \u2014 | \u2014 | \u2014 | -34 | \u2014 | \u2014 |
Total liabilities from financing activities | 1\u00a0605\u00a0817 | -459\u00a0501 | \u2014 | 16\u00a0291 | 5\u00a0677 | 24\u00a0802 | 1\u00a0193\u00a0087 |
\u00b9\u00a0 Including the current portion of non-current interest-bearing debt of \u20ac 412.8 million as at 1 January and \u20ac 39.5 million as at 31 December.
2022 | Non-cash changes | ||||||
in thousands of \u20ac | As at 1 January | Cash flows | Acquisitions & disposals | Cumulative translation adjustments | Fair value changes | Other changes | As at 31 December |
Financial debt | |||||||
Long-term interest-bearing debt \u00b9 | 993\u00a0114 | -75\u00a0577 | \u2014 | 2\u00a0107 | \u2014 | 33\u00a0974 | 953\u00a0618 |
Cash guarantees received | 204 | 11 | \u2014 | -5 | \u2014 | \u2014 | 210 |
Lease liability | 76\u00a0644 | -31\u00a0704 | \u2014 | -1\u00a0434 | \u2014 | 33\u00a0699 | 77\u00a0205 |
Credit institutions | 196\u00a0361 | -43\u00a0885 | \u2014 | 3\u00a0546 | \u2014 | \u2014 | 156\u00a0023 |
Schuldschein loans | 319\u00a0905 | \u2014 | \u2014 | \u2014 | \u2014 | 275 | 320\u00a0179 |
Bonds | 400\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 400\u00a0000 |
Convertible bonds | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Short-term interest bearing debt | 198\u00a0210 | 67\u00a0349 | 614 | 16\u00a0205 | \u2014 | \u2014 | 282\u00a0378 |
Total financial debt | 1\u00a0191\u00a0324 | -8\u00a0228 | 614 | 18\u00a0312 | \u2014 | 33\u00a0974 | 1\u00a0235\u00a0996 |
Derivatives held to hedge financial debt | |||||||
Interest-rate swaps | 118 | \u2014 | \u2014 | \u2014 | -7\u00a0295 | \u2014 | -7\u00a0178 |
Cross-currency interest-rate swaps | 1\u00a0645 | \u2014 | \u2014 | \u2014 | -4\u00a0290 | \u2014 | -2\u00a0645 |
Total liabilities from financing activities | 1\u00a0193\u00a0087 | -8\u00a0228 | 614 | 18\u00a0312 | -11\u00a0586 | 33\u00a0974 | 1\u00a0226\u00a0173 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other non-current amounts payable | 142 | 150 |
Derivatives (cf. note 7.2.) | 703 | \u2014 |
Total | 844 | 150 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other non-current amounts payable | 142 | 150 |
Derivatives (cf. note 7.2.) | 703 | \u2014 |
Total | 844 | 150 |
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other amounts payable | 9\u00a0122 | 14\u00a0362 |
Derivatives (cf. note 7.2.) | 2\u00a0324 | 1\u00a0548 |
Advances received | 24\u00a0354 | 24\u00a0097 |
Other taxes | 24\u00a0127 | 36\u00a0940 |
Accruals and deferred income | 8\u00a0322 | 11\u00a0171 |
Total | 68\u00a0249 | 88\u00a0118 |
The increase in 2022 of Other amounts payable was mainly due to higher outstanding dividend payable and payable relating to tax consolidation regime in Italy.
The derivatives included forward-exchange contracts (\u20ac\u00a01.3\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.7\u00a0million)) and CCIRSs (\u20ac\u00a00.2\u00a0million\u00a0(2021:\u00a0\u20ac\u00a01.7\u00a0million)).
Advances received mainly related to the project business of Bridon-Bekaert Ropes Group (BBRG) and advance payments from the Brazilian joint ventures on equipment orders at Engineering.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other amounts payable | 9\u00a0122 | 14\u00a0362 |
Derivatives (cf. note 7.2.) | 2\u00a0324 | 1\u00a0548 |
Advances received | 24\u00a0354 | 24\u00a0097 |
Other taxes | 24\u00a0127 | 36\u00a0940 |
Accruals and deferred income | 8\u00a0322 | 11\u00a0171 |
Total | 68\u00a0249 | 88\u00a0118 |
The increase in 2022 of Other amounts payable was mainly due to higher outstanding dividend payable and payable relating to tax consolidation regime in Italy.
The derivatives included forward-exchange contracts (\u20ac\u00a01.3\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.7\u00a0million)) and CCIRSs (\u20ac\u00a00.2\u00a0million\u00a0(2021:\u00a0\u20ac\u00a01.7\u00a0million)).
Advances received mainly related to the project business of Bridon-Bekaert Ropes Group (BBRG) and advance payments from the Brazilian joint ventures on equipment orders at Engineering.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other amounts payable | 9\u00a0122 | 14\u00a0362 |
Derivatives (cf. note 7.2.) | 2\u00a0324 | 1\u00a0548 |
Advances received | 24\u00a0354 | 24\u00a0097 |
Other taxes | 24\u00a0127 | 36\u00a0940 |
Accruals and deferred income | 8\u00a0322 | 11\u00a0171 |
Total | 68\u00a0249 | 88\u00a0118 |
The increase in 2022 of Other amounts payable was mainly due to higher outstanding dividend payable and payable relating to tax consolidation regime in Italy.
The derivatives included forward-exchange contracts (\u20ac\u00a01.3\u00a0million\u00a0(2021:\u00a0\u20ac\u00a00.7\u00a0million)) and CCIRSs (\u20ac\u00a00.2\u00a0million\u00a0(2021:\u00a0\u20ac\u00a01.7\u00a0million)).
Advances received mainly related to the project business of Bridon-Bekaert Ropes Group (BBRG) and advance payments from the Brazilian joint ventures on equipment orders at Engineering.
Carrying amount | ||
in thousands of \u20ac | 2021 | 2022 |
Other amounts payable | 9\u00a0122 | 14\u00a0362 |
Derivatives (cf. note 7.2.) | 2\u00a0324 | 1\u00a0548 |
Advances received | 24\u00a0354 | 24\u00a0097 |
Other taxes | 24\u00a0127 | 36\u00a0940 |
Accruals and deferred income | 8\u00a0322 | 11\u00a0171 |
Total | 68\u00a0249 | 88\u00a0118 |
Principles of financial risk management
The Group is exposed to risks from movements in exchange rates, interest rates and market risks that affect its assets and liabilities. Financial risk management within the Group aims at reducing the impact of these market risks through ongoing operational and financing activities. Selected derivative hedging instruments are used depending on the assessment of risk involved. The Group mainly hedges the risks that affect the Group\u2019s cash flows. Derivatives are used exclusively as hedging instruments and not for trading or other speculative purposes. To reduce the credit risk, hedging transactions are generally only concluded with financial institutions whose long term credit rating is at least A according to Moody\u2019s Investors Service Inc., Fitch and S&P.
The guidelines and principles of the Bekaert financial risk policy are defined by the Audit, Risk and Finance Committee and overseen by the Board of the Group. Group Treasury is responsible for implementing the financial risk policy. This encompasses defining appropriate policies and setting up effective control and reporting procedures. The Audit, Risk and Finance Committee is regularly kept informed on the exposures.
Currency risk
The Group\u2019s currency risk can be split into two categories: translational and transactional currency risk.
Translational currency risk
A translational currency risk arises when the financial data of foreign subsidiaries are converted into the Group\u2019s presentation currency, the euro. The main currencies are Chinese renminbi, US dollar, Czech koruna, Brazilian real, Chilean peso, Russian ruble, Indian rupee and pound sterling. Since there is no impact on the cash flows, the Group usually does not hedge against such risk.
Transactional currency risk
The Group is exposed to transactional currency risks resulting from its operating, investing and financing activities.
Foreign currency risk in the area of operating activities arises from commercial activities with sales and purchases in foreign currencies, as well as payments and receipts of royalties. The Group uses forward-exchange contracts to limit the currency risk on the forecasted cash inflows and outflows for the coming three months. Significant exposures and firm commitments beyond that time frame may also be covered.
Foreign currency risk in the area of investment results from the acquisition and disposal of investments in foreign companies, and sometimes also from dividends receivable from foreign investments. If material, these risks are hedged by means of forward exchange contracts.
Foreign currency risk in the financing area results from financial liabilities in foreign currencies. In line with its policy, Group Treasury hedges these risks using cross-currency interest-rate swaps and forward exchange contracts to convert financial obligations denominated in foreign currencies into the entity\u2019s functional currency. At the reporting date, the foreign currency liabilities for which currency risks were hedged mainly consisted of intercompany loans in euro and US dollar.
Currency sensitivity analysis
Currency sensitivity relating to the operating, investing and financing activities
The following table summarizes the Group\u2019s net foreign currency positions of operating, investing and financing receivables and payables at the reporting date for the most important currency pairs. The net currency positions are presented before intercompany eliminations. Positive amounts indicate that the Group has a net future cash inflow in the first currency. In the table, the \u2018Total exposure\u2019 column represents the position on the balance sheet, while the \u2018Total derivatives\u2019 column includes all financial derivatives hedging those balance sheet positions as well as forecasted transactions.
Currency pair - 2021 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | -6\u00a0506 | -8\u00a0323 | -14\u00a0829 |
CAD/EUR | -11\u00a0171 | \u2014 | -11\u00a0171 |
CZK/EUR | 24\u00a0625 | -1\u00a0132 | 23\u00a0493 |
EUR/CNY | -17\u00a0706 | \u2014 | -17\u00a0706 |
EUR/GBP | 12\u00a0479 | 6\u00a0206 | 18\u00a0685 |
EUR/INR | -27\u00a0084 | 19\u00a0725 | -7\u00a0359 |
EUR/MYR | -12\u00a0495 | \u2014 | -12\u00a0495 |
EUR/RON | -39\u00a0256 | \u2014 | -39\u00a0256 |
EUR/RUB | -35\u00a0641 | 22\u00a0134 | -13\u00a0507 |
IDR/USD | -13\u00a0740 | \u2014 | -13\u00a0740 |
JPY/CNY | 8\u00a0229 | -1\u00a0925 | 6\u00a0304 |
JPY/USD | 5\u00a0888 | -3\u00a0362 | 2\u00a0526 |
NOK/GBP | 16\u00a0221 | \u2014 | 16\u00a0221 |
USD/BRL | -10\u00a0822 | \u2014 | -10\u00a0822 |
USD/CLP | -18\u00a0970 | \u2014 | -18\u00a0970 |
USD/CNY | 35\u00a0648 | 11\u00a0528 | 47\u00a0176 |
USD/EUR | 140\u00a0008 | -96\u00a0566 | 43\u00a0442 |
USD/INR | -48\u00a0924 | \u2014 | -48\u00a0924 |
USD/MXN | -5\u00a0939 | \u2014 | -5\u00a0939 |
USD/RUB | -6\u00a0970 | \u2014 | -6\u00a0970 |
Currency pair - 2022 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | 540 | -8\u00a0866 | -8\u00a0326 |
BRL/EUR | 18\u00a0504 | \u2014 | 18\u00a0504 |
CLP/EUR | 5\u00a0696 | \u2014 | 5\u00a0696 |
CZK/EUR | 23\u00a0458 | 572 | 24\u00a0030 |
EUR/CNY | -19\u00a0024 | \u2014 | -19\u00a0024 |
EUR/GBP | -47\u00a0925 | 11\u00a0669 | -36\u00a0256 |
EUR/INR | -13\u00a0018 | \u2014 | -13\u00a0018 |
EUR/MYR | -13\u00a0114 | \u2014 | -13\u00a0114 |
EUR/RON | -34\u00a0186 | \u2014 | -34\u00a0186 |
EUR/RUB | -46\u00a0298 | \u2014 | -46\u00a0298 |
IDR/USD | -20\u00a0872 | \u2014 | -20\u00a0872 |
JPY/CNY | 6\u00a0695 | -2\u00a0285 | 4\u00a0410 |
USD/BRL | -7\u00a0319 | \u2014 | -7\u00a0319 |
USD/CAD | 14\u00a0569 | -14\u00a0400 | 169 |
USD/CNY | 43\u00a0243 | \u2014 | 43\u00a0243 |
USD/EUR | 161\u00a0321 | -126\u00a0037 | 35\u00a0284 |
USD/GBP | 8\u00a0948 | \u2014 | 8\u00a0948 |
USD/INR | -50\u00a0110 | \u2014 | -50\u00a0110 |
USD/MXN | -6\u00a0641 | \u2014 | -6\u00a0641 |
The reasonably possible changes used in this calculation were based on annualized volatility relating to the daily movement of the exchange rate of the reported year, with a 95%\u00a0confidence interval.
If rates had weakened/strengthened by such changes with all other variables constant, the result for the period before taxes would have been \u20ac\u00a00.5\u00a0million lower/higher (\u20ac\u00a039.7\u00a0million higher or lower if ruble position is included) (2021:\u00a0\u20ac\u00a010.8\u00a0million).
Currency sensitivity in relation to hedge accounting
At 31 December 2022 the Group does not apply hedge accounting (also none at 31 December 2021).
Interest-rate risk
The Group is exposed to interest-rate risk, mainly on debt denominated in US dollar, Chinese renminbi and euro. To minimize the effects of interest-rate fluctuations in these regions, the Group manages the interest-rate risk for net debt denominated in the respective currencies of these countries separately. General guidelines are applied to cover interest-rate risk:
\u2022The target average life of long-term debt is four years.
\u2022The allocation of long-term debt between floating and fixed interest rates must remain within the defined limits approved by the Audit, Risk and Finance Committee.
Group Treasury uses interest-rate swaps and cross-currency interest-rate swaps to ensure that the floating and fixed portions of the long-term debt remain within the defined limits.
The following table summarizes the weighted average interest rates, excluding the effects of any swaps, at the balance sheet date.
2021 | Long-term | ||||
Fixed rate | Floating rate | Total | Short-term | Total | |
US dollar | 4.04% | 2.37% | 3.29% | 1.31% | 1.60% |
Chinese renminbi | -% | -% | -% | 3.62% | 3.62% |
Euro | 2.27% | 1.48% | 2.07% | -% | 2.07% |
Other | 6.71% | -% | 6.71% | 4.58% | 4.58% |
Total | 2.65% | 1.53% | 2.38% | 2.41% | 2.38% |
2022 | Long-term | ||||
Fixed rate | Floating rate | Total | Short-term | Total | |
US dollar | 4.21% | -% | 4.21% | 5.36% | 5.25% |
Chinese renminbi | -% | -% | -% | 3.41% | 3.41% |
Euro | 1.51% | 3.95% | 2.12% | -% | 2.12% |
Other | 4.59% | -% | 4.59% | 7.23% | 6.48% |
Total | 1.71% | 3.95% | 2.24% | 5.68% | 3.02% |
Interest-rate sensitivity analysis
Interest-rate sensitivity of the financial debt
As disclosed in note 6.18. \u2018Interest-bearing debt\u2019, the total financial debt of the Group as of 31 December 2022 amounted to \u20ac\u00a01\u00a0236\u00a0million (2021:\u00a0 \u20ac\u00a01\u00a0191.3\u00a0million). The following table shows the currency and interest rate profile, i.e. the percentage distribution of the total financial debt by currency and by type of interest rate (fixed, floating), including the effect of any swaps.
2021 | Long-term | Short-term | ||
Fixed rate | Floating rate | Floating rate | Total | |
US dollar | 1.40% | 1.10% | 14.30% | 16.80% |
Chinese renminbi | -% | -% | 3.00% | 3.00% |
Euro | 52.70% | 17.70% | -% | 70.40% |
Other | 4.40% | -% | 5.40% | 9.80% |
Total | 58.50% | 18.80% | 22.70% | 100.00% |
2022 | Long-term | Short-term | ||
Fixed rate | Floating rate | Floating rate | Total | |
US dollar | 1.50% | -% | 14.00% | 15.50% |
Chinese renminbi | -% | -% | 2.40% | 2.40% |
Euro | 55.10% | 18.30% | -% | 73.40% |
Other | 2.50% | -% | 6.20% | 8.70% |
Total | 59.10% | 18.30% | 22.60% | 100.00% |
On the basis of the annualized daily volatility of the 3-month Interbank Offered Rate in 2022 and 2021, the reasonable estimates of possible interest rate changes, with a 95% confidence interval, are set out for the main currencies in the table below.
2021 | Interest rate at 31 December | Reasonably possible |
Chinese renminbi \u00b9 | 2.21% | 0.36% |
Euro | -% | -% |
US dollar | 0.21% | 0.17% |
2022 | Interest rate at 31 December | Reasonably possible |
Chinese renminbi \u00b9 | 2.16% | 0.36% |
Euro | 2.22% | 0.37% |
US dollar | 4.77% | 3.20% |
\u00b9 For the Chinese renminbi, the interest rate is the PBOC benchmark interest rate for lending up to six months.
Applying the estimated possible changes in the interest rates to the floating rated debt, with all other variables constant, the result for the period before tax would have been \u20ac\u00a04.6\u00a0million higher/lower (2021: \u20ac 3.5 million higher/lower).
Interest-rate sensitivity in relation to hedge accounting
At 31 December 2022, the Group does not apply hedge accounting (2021: none) and no sensitivity analysis was required.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities and certain financing activities, including deposits with banks and financial institutions. In respect of its operating activities, the Group has a credit policy in place, which takes into account the risk profiles of the customers in terms of the market segment to which they belong. Based on activity platform, product sector and geographical area, a credit risk analysis is made of customers and a decision is taken regarding the covering of the credit risk. The exposure to credit risk is monitored on an ongoing basis and credit evaluations are made of all customers. In terms of the characteristics of some steel wire activities with a limited number of global customers, the concentration risk is closely monitored and, in combination with the existing credit policy, appropriate action is taken when needed. In accordance with IFRS 8 \u00a734, none of the specified disclosures on individual customers (or groups of customers under common control) are required, since none of the Group\u2019s customers accounts for more than 10% of its revenues. At 31 December 2022, 64.4% (2021: 65.4%) of the credit risk exposure was covered by credit insurance policies and by trade finance techniques such as letters of credit, cash against documents and bank guarantees. In respect of financing activities, transactions are normally concluded with counterparties that have at least an A credit rating. There are also limits allocated to each counterparty which depend on their rating. Due to this approach, the Group considers the risk of counterparty default to be limited in both operating and financing activities. In accordance with the IFRS 9 \u2018expected credit loss\u2019 model for financial assets, a general bad debt allowance is made for trade receivables to cover the unknown bad debt risk at each reporting date. This general allowance constitutes of a percentage on outstanding trade receivables at each reporting date. The percentages reflect the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at reporting date about past events, current conditions and forecasts of future economic conditions and are reviewed year-on-year.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding. To ensure liquidity and financial flexibility at all times, the Group, in addition to its available cash, has several uncommitted short-term credit lines at its disposal in the major currencies and in amounts considered adequate for current and near-future financing needs. These facilities are generally of the mixed type and may be utilized, for example, for advances, overdrafts, acceptances and discounting. The Group also has committed credit facilities at its disposal up to a maximum equivalent of \u20ac 200 million (2021:\u00a0\u20ac\u00a0200\u00a0million) at floating interest rates with fixed margins. At year-end, nothing was outstanding under these facilities (2021: nil). In addition, the Group has a commercial paper and medium-term note program available for a maximum of \u20ac\u00a0123.9\u00a0million (2021: \u20ac\u00a0123.9\u00a0million). At the end of 2022, no commercial paper notes were outstanding (2021: nil).\u00a0At year-end, no external bank debt was subject to debt covenants (2021: nil). The Group has discounted outstanding receivables per 31 December 2022 for a total amount of \u20ac\u00a0267.5\u00a0million (2021: \u20ac\u00a0224.8\u00a0million) under its existing factoring agreements. Under these agreements, substantially all risks and rewards of ownership of the receivables are transferred to the factor. As a consequence, at the end of 2022, the factored receivables are derecognized.
The following table shows the Group\u2019s contractually agreed (undiscounted) outflows in relation to financial liabilities (including financial liabilities reclassified as liabilities associated with assets held for sale). Only net interest payments and principal repayments are included.
2021 | ||||
in thousands of \u20ac | 2022 | 2023 | 2024-2026 | 2027 and thereafter |
Financial liabilities - principal | ||||
Trade payables | -1\u00a0062\u00a0185 | \u2014 | \u2014 | \u2014 |
Other payables | -9\u00a0122 | -142 | \u2014 | \u2014 |
Interest-bearing debt | -240\u00a0525 | -224\u00a0519 | -494\u00a0605 | -248\u00a0279 |
Derivatives - gross settled | -109\u00a0565 | \u2014 | \u2014 | \u2014 |
Financial liabilities - interests | ||||
Trade and other payables | \u2014 | \u2014 | \u2014 | \u2014 |
Interest-bearing debt | -22\u00a0087 | -18\u00a0049 | -40\u00a0723 | -5\u00a0778 |
Derivatives - net settled | -343 | -272 | -309 | \u2014 |
Derivatives - gross settled | -2\u00a0805 | \u2014 | \u2014 | \u2014 |
Total undiscounted cash flow | -1\u00a0446\u00a0632 | -242\u00a0982 | -535\u00a0637 | -254\u00a0057 |
2022 | ||||
in thousands of \u20ac | 2023 | 2024 | 2025-2027 | 2028 and thereafter |
Financial liabilities - principal | ||||
Trade payables | -921\u00a0113 | \u2014 | \u2014 | \u2014 |
Other payables | -14\u00a0362 | -150 | \u2014 | \u2014 |
Interest-bearing debt | -500\u00a0588 | -95\u00a0656 | -619\u00a0407 | -20\u00a0345 |
Derivatives - gross settled | -121\u00a0843 | \u2014 | \u2014 | \u2014 |
Financial liabilities - interests | ||||
Trade and other payables | \u2014 | \u2014 | \u2014 | \u2014 |
Interest-bearing debt | -27\u00a0705 | -19\u00a0501 | -33\u00a0571 | \u2014 |
Derivatives - net settled | \u2014 | \u2014 | \u2014 | \u2014 |
Derivatives - gross settled | -2\u00a0800 | \u2014 | \u2014 | \u2014 |
Total undiscounted cash flow | -1\u00a0588\u00a0410 | -115\u00a0307 | -652\u00a0978 | -20\u00a0345 |
All instruments held at the reporting date and for which payments had been contractually agreed are included. Forecasted data relating to future, new liabilities have not been included. Amounts in foreign currencies have been translated at the closing rate at the reporting date. The variable interest payments arising from the financial instruments were calculated using the applicable forward interest rates.
Hedging
All financial derivatives the Group enters into, relate to an underlying transaction or forecasted exposure. In function of the expected impact on the income statement and if the stringent IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied. The following sections describe the transactions whereby hedge accounting is applied and transactions which do not qualify for hedge accounting but constitute an economic hedge.
Hedge accounting
The Group did not apply hedge accounting in 2022 (2021: none) so there were no fair value hedges nor cash flow hedges in 2022 (2021: none).
Economic hedging and other derivatives
The Group also uses financial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defined in IFRS 9 \u2018Financial Instruments\u2019 are not met or because the Group has elected not to apply hedge accounting. These derivatives are treated as free-standing instruments held for trading.
\u2022The Group uses cross-currency interest-rate swaps and forward-exchange contracts to hedge the currency risk on intercompany loans involving two entities with different functional currencies. Until now, the Group has elected not to apply hedge accounting as defined in IFRS 9. Since nearly all cross-currency interest-rate swaps are floating-to-floating, the fair value gain or loss on the financial instruments is expected to offset the foreign-exchange result arising from the remeasurement of the intercompany loans. The major currencies involved are US dollar and British pound.
\u2022To manage its interest-rate exposure, the Group uses interest-rate swaps to convert its floating-rate debt to a fixed rate debt. The Group entered into interest-rate swaps for \u20ac\u00a0196.5\u00a0million to hedge the Schuldschein loans with floating interest rates (2021: \u20ac 196.5\u00a0million).
\u2022The Group uses forward exchange contracts to limit currency risks on its various operating and financing activities. For all forward exchange contracts, the fair value change is recorded immediately under other financial income and expenses.
Currency risk
The Group\u2019s currency risk can be split into two categories: translational and transactional currency risk.
Translational currency risk
A translational currency risk arises when the financial data of foreign subsidiaries are converted into the Group\u2019s presentation currency, the euro. The main currencies are Chinese renminbi, US dollar, Czech koruna, Brazilian real, Chilean peso, Russian ruble, Indian rupee and pound sterling. Since there is no impact on the cash flows, the Group usually does not hedge against such risk.
Transactional currency risk
The Group is exposed to transactional currency risks resulting from its operating, investing and financing activities.
Foreign currency risk in the area of operating activities arises from commercial activities with sales and purchases in foreign currencies, as well as payments and receipts of royalties. The Group uses forward-exchange contracts to limit the currency risk on the forecasted cash inflows and outflows for the coming three months. Significant exposures and firm commitments beyond that time frame may also be covered.
Foreign currency risk in the area of investment results from the acquisition and disposal of investments in foreign companies, and sometimes also from dividends receivable from foreign investments. If material, these risks are hedged by means of forward exchange contracts.
Foreign currency risk in the financing area results from financial liabilities in foreign currencies. In line with its policy, Group Treasury hedges these risks using cross-currency interest-rate swaps and forward exchange contracts to convert financial obligations denominated in foreign currencies into the entity\u2019s functional currency. At the reporting date, the foreign currency liabilities for which currency risks were hedged mainly consisted of intercompany loans in euro and US dollar.
Currency sensitivity analysis
Currency sensitivity relating to the operating, investing and financing activities
The following table summarizes the Group\u2019s net foreign currency positions of operating, investing and financing receivables and payables at the reporting date for the most important currency pairs. The net currency positions are presented before intercompany eliminations. Positive amounts indicate that the Group has a net future cash inflow in the first currency. In the table, the \u2018Total exposure\u2019 column represents the position on the balance sheet, while the \u2018Total derivatives\u2019 column includes all financial derivatives hedging those balance sheet positions as well as forecasted transactions.
Currency pair - 2021 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | -6\u00a0506 | -8\u00a0323 | -14\u00a0829 |
CAD/EUR | -11\u00a0171 | \u2014 | -11\u00a0171 |
CZK/EUR | 24\u00a0625 | -1\u00a0132 | 23\u00a0493 |
EUR/CNY | -17\u00a0706 | \u2014 | -17\u00a0706 |
EUR/GBP | 12\u00a0479 | 6\u00a0206 | 18\u00a0685 |
EUR/INR | -27\u00a0084 | 19\u00a0725 | -7\u00a0359 |
EUR/MYR | -12\u00a0495 | \u2014 | -12\u00a0495 |
EUR/RON | -39\u00a0256 | \u2014 | -39\u00a0256 |
EUR/RUB | -35\u00a0641 | 22\u00a0134 | -13\u00a0507 |
IDR/USD | -13\u00a0740 | \u2014 | -13\u00a0740 |
JPY/CNY | 8\u00a0229 | -1\u00a0925 | 6\u00a0304 |
JPY/USD | 5\u00a0888 | -3\u00a0362 | 2\u00a0526 |
NOK/GBP | 16\u00a0221 | \u2014 | 16\u00a0221 |
USD/BRL | -10\u00a0822 | \u2014 | -10\u00a0822 |
USD/CLP | -18\u00a0970 | \u2014 | -18\u00a0970 |
USD/CNY | 35\u00a0648 | 11\u00a0528 | 47\u00a0176 |
USD/EUR | 140\u00a0008 | -96\u00a0566 | 43\u00a0442 |
USD/INR | -48\u00a0924 | \u2014 | -48\u00a0924 |
USD/MXN | -5\u00a0939 | \u2014 | -5\u00a0939 |
USD/RUB | -6\u00a0970 | \u2014 | -6\u00a0970 |
Currency pair - 2022 | |||
in thousands of \u20ac | Total exposure | Total derivatives | Open position |
AUD/EUR | 540 | -8\u00a0866 | -8\u00a0326 |
BRL/EUR | 18\u00a0504 | \u2014 | 18\u00a0504 |
CLP/EUR | 5\u00a0696 | \u2014 | 5\u00a0696 |
CZK/EUR | 23\u00a0458 | 572 | 24\u00a0030 |
EUR/CNY | -19\u00a0024 | \u2014 | -19\u00a0024 |
EUR/GBP | -47\u00a0925 | 11\u00a0669 | -36\u00a0256 |
EUR/INR | -13\u00a0018 | \u2014 | -13\u00a0018 |
EUR/MYR | -13\u00a0114 | \u2014 | -13\u00a0114 |
EUR/RON | -34\u00a0186 | \u2014 | -34\u00a0186 |
EUR/RUB | -46\u00a0298 | \u2014 | -46\u00a0298 |
IDR/USD | -20\u00a0872 | \u2014 | -20\u00a0872 |
JPY/CNY | 6\u00a0695 | -2\u00a0285 | 4\u00a0410 |
USD/BRL | -7\u00a0319 | \u2014 | -7\u00a0319 |
USD/CAD | 14\u00a0569 | -14\u00a0400 | 169 |
USD/CNY | 43\u00a0243 | \u2014 | 43\u00a0243 |
USD/EUR | 161\u00a0321 | -126\u00a0037 | 35\u00a0284 |
USD/GBP | 8\u00a0948 | \u2014 | 8\u00a0948 |
USD/INR | -50\u00a0110 | \u2014 | -50\u00a0110 |
USD/MXN | -6\u00a0641 | \u2014 | -6\u00a0641 |
The reasonably possible changes used in this calculation were based on annualized volatility relating to the daily movement of the exchange rate of the reported year, with a 95%\u00a0confidence interval.
If rates had weakened/strengthened by such changes with all other variables constant, the result for the period before taxes would have been \u20ac\u00a00.5\u00a0million lower/higher (\u20ac\u00a039.7\u00a0million higher or lower if ruble position is included) (2021:\u00a0\u20ac\u00a010.8\u00a0million).
Currency sensitivity in relation to hedge accounting
At 31 December 2022 the Group does not apply hedge accounting (also none at 31 December 2021).
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding. To ensure liquidity and financial flexibility at all times, the Group, in addition to its available cash, has several uncommitted short-term credit lines at its disposal in the major currencies and in amounts considered adequate for current and near-future financing needs. These facilities are generally of the mixed type and may be utilized, for example, for advances, overdrafts, acceptances and discounting. The Group also has committed credit facilities at its disposal up to a maximum equivalent of \u20ac 200 million (2021:\u00a0\u20ac\u00a0200\u00a0million) at floating interest rates with fixed margins. At year-end, nothing was outstanding under these facilities (2021: nil). In addition, the Group has a commercial paper and medium-term note program available for a maximum of \u20ac\u00a0123.9\u00a0million (2021: \u20ac\u00a0123.9\u00a0million). At the end of 2022, no commercial paper notes were outstanding (2021: nil).\u00a0At year-end, no external bank debt was subject to debt covenants (2021: nil). The Group has discounted outstanding receivables per 31 December 2022 for a total amount of \u20ac\u00a0267.5\u00a0million (2021: \u20ac\u00a0224.8\u00a0million) under its existing factoring agreements. Under these agreements, substantially all risks and rewards of ownership of the receivables are transferred to the factor. As a consequence, at the end of 2022, the factored receivables are derecognized.
The following table shows the Group\u2019s contractually agreed (undiscounted) outflows in relation to financial liabilities (including financial liabilities reclassified as liabilities associated with assets held for sale). Only net interest payments and principal repayments are included.
2021 | ||||
in thousands of \u20ac | 2022 | 2023 | 2024-2026 | 2027 and thereafter |
Financial liabilities - principal | ||||
Trade payables | -1\u00a0062\u00a0185 | \u2014 | \u2014 | \u2014 |
Other payables | -9\u00a0122 | -142 | \u2014 | \u2014 |
Interest-bearing debt | -240\u00a0525 | -224\u00a0519 | -494\u00a0605 | -248\u00a0279 |
Derivatives - gross settled | -109\u00a0565 | \u2014 | \u2014 | \u2014 |
Financial liabilities - interests | ||||
Trade and other payables | \u2014 | \u2014 | \u2014 | \u2014 |
Interest-bearing debt | -22\u00a0087 | -18\u00a0049 | -40\u00a0723 | -5\u00a0778 |
Derivatives - net settled | -343 | -272 | -309 | \u2014 |
Derivatives - gross settled | -2\u00a0805 | \u2014 | \u2014 | \u2014 |
Total undiscounted cash flow | -1\u00a0446\u00a0632 | -242\u00a0982 | -535\u00a0637 | -254\u00a0057 |
2022 | ||||
in thousands of \u20ac | 2023 | 2024 | 2025-2027 | 2028 and thereafter |
Financial liabilities - principal | ||||
Trade payables | -921\u00a0113 | \u2014 | \u2014 | \u2014 |
Other payables | -14\u00a0362 | -150 | \u2014 | \u2014 |
Interest-bearing debt | -500\u00a0588 | -95\u00a0656 | -619\u00a0407 | -20\u00a0345 |
Derivatives - gross settled | -121\u00a0843 | \u2014 | \u2014 | \u2014 |
Financial liabilities - interests | ||||
Trade and other payables | \u2014 | \u2014 | \u2014 | \u2014 |
Interest-bearing debt | -27\u00a0705 | -19\u00a0501 | -33\u00a0571 | \u2014 |
Derivatives - net settled | \u2014 | \u2014 | \u2014 | \u2014 |
Derivatives - gross settled | -2\u00a0800 | \u2014 | \u2014 | \u2014 |
Total undiscounted cash flow | -1\u00a0588\u00a0410 | -115\u00a0307 | -652\u00a0978 | -20\u00a0345 |
All instruments held at the reporting date and for which payments had been contractually agreed are included. Forecasted data relating to future, new liabilities have not been included. Amounts in foreign currencies have been translated at the closing rate at the reporting date. The variable interest payments arising from the financial instruments were calculated using the applicable forward interest rates.
Hedging
All financial derivatives the Group enters into, relate to an underlying transaction or forecasted exposure. In function of the expected impact on the income statement and if the stringent IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied. The following sections describe the transactions whereby hedge accounting is applied and transactions which do not qualify for hedge accounting but constitute an economic hedge.
Hedge accounting
The Group did not apply hedge accounting in 2022 (2021: none) so there were no fair value hedges nor cash flow hedges in 2022 (2021: none).
Economic hedging and other derivatives
The Group also uses financial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defined in IFRS 9 \u2018Financial Instruments\u2019 are not met or because the Group has elected not to apply hedge accounting. These derivatives are treated as free-standing instruments held for trading.
\u2022The Group uses cross-currency interest-rate swaps and forward-exchange contracts to hedge the currency risk on intercompany loans involving two entities with different functional currencies. Until now, the Group has elected not to apply hedge accounting as defined in IFRS 9. Since nearly all cross-currency interest-rate swaps are floating-to-floating, the fair value gain or loss on the financial instruments is expected to offset the foreign-exchange result arising from the remeasurement of the intercompany loans. The major currencies involved are US dollar and British pound.
\u2022To manage its interest-rate exposure, the Group uses interest-rate swaps to convert its floating-rate debt to a fixed rate debt. The Group entered into interest-rate swaps for \u20ac\u00a0196.5\u00a0million to hedge the Schuldschein loans with floating interest rates (2021: \u20ac 196.5\u00a0million).
\u2022The Group uses forward exchange contracts to limit currency risks on its various operating and financing activities. For all forward exchange contracts, the fair value change is recorded immediately under other financial income and expenses.
\u2022In June 2019, the Group entered into a renewable energy Virtual Power Purchase Agreement (VPPA) for a wind generation facility located in North America. In addition, in July 2022 the group entered into an additional contract for a solar project located in Texas (North America). The characteristics of the contracts are such that the VPPA constitutes a derivative in accordance with IFRS 9. The fair value of the derivative amounted to \u20ac 7.5 million at 31 December 2022 (2021:\u00a0\u20ac\u00a013.2\u00a0million), as a result of which a loss of \u20ac 5.7 million was recognized in other financial costs.
Derivatives
The following table analyzes the notional amounts of the derivatives according to their maturity date. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31 December 2022, Bekaert does not apply hedge accounting
2021 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 67\u00a0716 | \u2014 | \u2014 |
Interest-rate swaps | \u2014 | 196\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 128\u00a0947 | \u2014 | \u2014 |
Conversion derivative | \u2014 | \u2014 | \u2014 |
Total | 196\u00a0663 | 196\u00a0500 | \u2014 |
2022 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 65\u00a0493 | \u2014 | \u2014 |
Interest-rate swaps | 116\u00a0000 | 80\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 121\u00a0843 | \u2014 | \u2014 |
Total | 303\u00a0336 | 80\u00a0500 | \u2014 |
The following table summarizes the fair values of the various derivatives carried. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31\u00a0December\u00a02022, Bekaert does not apply hedge accounting:
Fair value of current and non-current derivatives | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Financial instruments | ||||
Held for trading | ||||
Forward exchange contracts | 805 | 2\u00a0833 | 654 | 1\u00a0333 |
Interest-rate swaps | \u2014 | 7\u00a0178 | 118 | \u2014 |
Cross-currency interest-rate swaps | 610 | 2\u00a0860 | 2\u00a0255 | 215 |
Conversion derivative | \u2014 | \u2014 | \u2014 | |
Other derivative financial assets | 13\u00a0244 | 7\u00a0500 | \u2014 | \u2014 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Non-current | 13\u00a0244 | 14\u00a0678 | 703 | \u2014 |
Current | 1\u00a0416 | 5\u00a0694 | 2\u00a0324 | 1\u00a0548 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
In 2022, the other derivative financial assets related to the VPPA derivatives for \u20ac 7.5 million (2021: \u20ac 13.2\u00a0million).
The Group has no financial assets and financial liabilities that are presented net in the balance sheet due to set-off in accordance with IAS 32. The Group enters into ISDA (International Swaps and Derivatives Association) master agreements with its counterparties for some of its derivatives, allowing the counterparties to net derivative assets with derivative liabilities when settling in case of default. Under these agreements, no collateral is being exchanged, neither in cash nor in securities.
The potential effect of the netting of derivative contracts is shown below:
Effect of enforceable netting agreements | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Total derivatives recognized in balance sheet | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Enforceable netting | -610 | -215 | -610 | -215 |
Net amounts | 14\u00a0049 | 20\u00a0157 | 2\u00a0416 | 1\u00a0333 |
Financial instruments by fair value measurement hierarchy
The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways:
\u2022\u2018Level 1\u2019 fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in these active markets for identical assets and liabilities. This mainly relates to financial assets at fair value through other comprehensive income such as the investment in Shougang Concord Century Holdings Ltd (see note 6.6.\u00a0\u2018Other non-current assets\u2019).
\u2022\u2018Level 2\u2019 fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward-exchange rates and yield curves derived from quoted interest rates with matching maturities. Interest-rate swaps are measured at
\u2022the present value of future cash flows estimated and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward-exchange rates, quoted interest rates and applicable yield curves derived therefrom.
\u2022\u2018Level 3\u2019 fair value measurement: the fair value of the remaining financial assets and financial liabilities is derived from valuation techniques which include inputs that are not based on observable market data. At the end of 2022, Bekaert had two types of financial instruments, namely the VPPA agreement and several equity investments, for which the fair value measurement can be characterized as \u2018level 3\u2019. The fair value of the VPPA contract is determined using a Monte Carlo valuation model. The main factors determining the fair value of the VPPA agreement are the discount rate (level 2), the estimated energy output based on wind or solar studies in the area and the off-peak/on-peak price volatility (level 3). The fair value of the main equity investment (Xinju Metal Products Co Ltd) is determined using a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption. The main factors determining the fair value are the discount rate and EBITDA.
Derivative in VPPA arrangement | 31 December 2022 |
Level 2 inputs | |
Discount rate | Weighted average of investment grade corporate bond curves |
Level 3 inputs | |
Power forward sensitivity | Estimated on peak/off peak price forecasts |
Production sensitivity | Based on wind / solar studies in the area |
Outcome of the model (in thousands of \u20ac) | |
Fair value of the VPPA derivative | 7500 |
The carrying amount (i.e. the fair value) of the level-3 liabilities/(assets) has evolved as follows:
Level-3 Financial liabilities / (assets) | ||
in thousands of \u20ac | 2021 | 2022 |
At 1 January | -10\u00a0682 | -23\u00a0561 |
(Expenditure) / Disposal | -863 | -8\u00a0537 |
(Gain) / loss in fair value through OCI | -1\u00a0916 | -555 |
(Gain) / loss in fair value through P&L | -10\u00a0100 | 5\u00a0743 |
At 31 December | -23\u00a0561 | -26\u00a0910 |
Gains and losses in fair value are reported in other financial income and expenses (\u20ac\u00a05.7\u00a0million), except for the equity investments where fair value changes are carried through other comprehensive income (\u20ac\u00a0-0.6\u00a0million) (see note 6.6. \u2018Other non-current assets\u2019).
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for King Plains.
Sensitivity analysis King Plains | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 188 | |
-10% | decreased by | -281 | ||
Production sensitivity | +5% | increased by | 375 | |
-5% | decreased by | -469 |
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for Rockhound
Sensitivity analysis Rockhound | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 2\u00a0344 | |
-10% | decreased by | -2\u00a0438 | ||
Production sensitivity | +5% | increased by | 750 | |
-5% | decreased by | -750 |
The sensitivity of the fair value calculation of the equity investment in Xinju Metal Products Co Ltd (\u20ac\u00a06.5 million) is shown below:
\u2022If EBITDA would be CNY\u00a04.0 million lower in all periods of the business plan, the fair value would be \u20ac\u00a05.5\u00a0million;
\u2022If the discount factor would be 1% higher, the fair value would be \u20ac\u00a06.0\u00a0million;
\u2022If EBITDA would be CNY\u00a04.0 million lower in all years of the business plan and the discount factor would be 1% higher, the fair value would be \u20ac\u00a05.1\u00a0million.
The following table provides an analysis of financial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above:
2021 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 1\u00a0416 | 13\u00a0244 | 14\u00a0659 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments | 9\u00a0764 | \u2014 | 10\u00a0317 | 20\u00a0081 |
Total assets | 9\u00a0764 | 1\u00a0416 | 23\u00a0561 | 34\u00a0741 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
Total liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
2022 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 12\u00a0872 | 7\u00a0500 | 20\u00a0372 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments \u00b9 | 6\u00a0614 | \u2014 | 19\u00a0410 | 26\u00a0023 |
Total assets | 6\u00a0614 | 12\u00a0872 | 26\u00a0910 | 46\u00a0395 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Total liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Hedging
All financial derivatives the Group enters into, relate to an underlying transaction or forecasted exposure. In function of the expected impact on the income statement and if the stringent IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied. The following sections describe the transactions whereby hedge accounting is applied and transactions which do not qualify for hedge accounting but constitute an economic hedge.
Hedge accounting
The Group did not apply hedge accounting in 2022 (2021: none) so there were no fair value hedges nor cash flow hedges in 2022 (2021: none).
Economic hedging and other derivatives
The Group also uses financial instruments that represent an economic hedge but for which no hedge accounting is applied, either because the criteria to qualify for hedge accounting defined in IFRS 9 \u2018Financial Instruments\u2019 are not met or because the Group has elected not to apply hedge accounting. These derivatives are treated as free-standing instruments held for trading.
\u2022The Group uses cross-currency interest-rate swaps and forward-exchange contracts to hedge the currency risk on intercompany loans involving two entities with different functional currencies. Until now, the Group has elected not to apply hedge accounting as defined in IFRS 9. Since nearly all cross-currency interest-rate swaps are floating-to-floating, the fair value gain or loss on the financial instruments is expected to offset the foreign-exchange result arising from the remeasurement of the intercompany loans. The major currencies involved are US dollar and British pound.
\u2022To manage its interest-rate exposure, the Group uses interest-rate swaps to convert its floating-rate debt to a fixed rate debt. The Group entered into interest-rate swaps for \u20ac\u00a0196.5\u00a0million to hedge the Schuldschein loans with floating interest rates (2021: \u20ac 196.5\u00a0million).
\u2022The Group uses forward exchange contracts to limit currency risks on its various operating and financing activities. For all forward exchange contracts, the fair value change is recorded immediately under other financial income and expenses.
Derivatives
The following table analyzes the notional amounts of the derivatives according to their maturity date. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31 December 2022, Bekaert does not apply hedge accounting
2021 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 67\u00a0716 | \u2014 | \u2014 |
Interest-rate swaps | \u2014 | 196\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 128\u00a0947 | \u2014 | \u2014 |
Conversion derivative | \u2014 | \u2014 | \u2014 |
Total | 196\u00a0663 | 196\u00a0500 | \u2014 |
2022 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 65\u00a0493 | \u2014 | \u2014 |
Interest-rate swaps | 116\u00a0000 | 80\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 121\u00a0843 | \u2014 | \u2014 |
Total | 303\u00a0336 | 80\u00a0500 | \u2014 |
The following table summarizes the fair values of the various derivatives carried. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31\u00a0December\u00a02022, Bekaert does not apply hedge accounting:
Fair value of current and non-current derivatives | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Financial instruments | ||||
Held for trading | ||||
Forward exchange contracts | 805 | 2\u00a0833 | 654 | 1\u00a0333 |
Interest-rate swaps | \u2014 | 7\u00a0178 | 118 | \u2014 |
Cross-currency interest-rate swaps | 610 | 2\u00a0860 | 2\u00a0255 | 215 |
Conversion derivative | \u2014 | \u2014 | \u2014 | |
Other derivative financial assets | 13\u00a0244 | 7\u00a0500 | \u2014 | \u2014 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Non-current | 13\u00a0244 | 14\u00a0678 | 703 | \u2014 |
Current | 1\u00a0416 | 5\u00a0694 | 2\u00a0324 | 1\u00a0548 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
In 2022, the other derivative financial assets related to the VPPA derivatives for \u20ac 7.5 million (2021: \u20ac 13.2\u00a0million).
The Group has no financial assets and financial liabilities that are presented net in the balance sheet due to set-off in accordance with IAS 32. The Group enters into ISDA (International Swaps and Derivatives Association) master agreements with its counterparties for some of its derivatives, allowing the counterparties to net derivative assets with derivative liabilities when settling in case of default. Under these agreements, no collateral is being exchanged, neither in cash nor in securities.
The potential effect of the netting of derivative contracts is shown below:
Effect of enforceable netting agreements | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Total derivatives recognized in balance sheet | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Enforceable netting | -610 | -215 | -610 | -215 |
Net amounts | 14\u00a0049 | 20\u00a0157 | 2\u00a0416 | 1\u00a0333 |
Additional disclosures on financial instruments by class and category
The following tables list the different classes of financial assets and liabilities with their carrying amounts and their respective fair values, analyzed by their measurement category in accordance with IFRS 9 \u2018Financial Instruments\u2019.
Cash and cash equivalents, short-term deposits, trade and other receivables, bills of exchange received, loans and receivables primarily have short terms to maturity; hence, their carrying amounts at the reporting date approximate the fair values. Trade and other payables also generally have short terms to maturity and, hence, their carrying amounts also approximate their fair values. The Group has no exposure to collateralized debt obligations (CDOs).
The following abbreviations are used for the IFRS 9 categories:
Abbreviation | Category in accordance with IFRS 9 |
AC | Financial assets or financial liabilities at amortized cost |
FVTOCI/Eq | Equity instruments designated as at fair value through OCI |
FVTPL/Mnd | Financial assets mandatorily measured at fair value through profit or loss |
FVTPL | Financial liabilities measured as at fair value through profit or loss |
Carrying amount vs fair value | 31 December 2021 | 31 December 2022 | |||
in thousands of \u20ac | Category in accordance with IFRS 9 | Carrying amount | Fair value | Carrying amount | Fair value |
Assets | |||||
Non-current financial assets | |||||
- Financial & other receivables | AC | 12\u00a0549 | 12\u00a0549 | 12\u00a0211 | 12\u00a0211 |
- Equity investments | FVTOCI/Eq | 20\u00a0081 | 20\u00a0081 | 26\u00a0023 | 26\u00a0023 |
- Derivatives | |||||
- Held for trading | FVTPL/Mnd | 13\u00a0244 | 13\u00a0244 | 14\u00a0678 | 14\u00a0678 |
Current financial assets | |||||
- Financial receivables and cash | AC | 6\u00a0475 | 6\u00a0475 | 6\u00a0352 | 6\u00a0352 |
- Cash and cash equivalents | AC | 677\u00a0270 | 677\u00a0270 | 728\u00a0095 | 728\u00a0095 |
- Short term deposits | AC | 80\u00a0058 | 80\u00a0058 | 4\u00a0766 | 4\u00a0766 |
- Trade receivables | AC | 750\u00a0666 | 750\u00a0666 | 730\u00a0786 | 730\u00a0786 |
- Bills of exchange received | AC | 41\u00a0274 | 41\u00a0274 | 39\u00a0764 | 39\u00a0764 |
- Other current assets | |||||
- Other receivables | AC | 43\u00a0437 | 43\u00a0437 | 24\u00a0732 | 24\u00a0732 |
- Derivatives | |||||
- Held for trading | FVTPL/Mnd | 1\u00a0416 | 1\u00a0416 | 5\u00a0694 | 5\u00a0694 |
Liabilities | |||||
Non-current interest-bearing debt | |||||
- Lease liabilities | AC | 56\u00a0425 | 56\u00a0425 | 57\u00a0203 | 57\u00a0203 |
- Cash guarantees received | AC | 204 | 204 | 210 | 210 |
- Credit institutions | AC | 177\u00a0047 | 177\u00a0047 | 146\u00a0413 | 146\u00a0413 |
- Schuldschein loans | AC | 319\u00a0905 | 319\u00a0905 | 131\u00a0582 | 131\u00a0582 |
- Bonds | AC | 400\u00a0000 | 395\u00a0074 | 400\u00a0000 | 347\u00a0800 |
Current interest-bearing debt | |||||
- Lease liabilities | AC | 20\u00a0219 | 20\u00a0219 | 20\u00a0002 | 20\u00a0002 |
- Credit institutions | AC | 217\u00a0523 | 217\u00a0523 | 291\u00a0989 | 291\u00a0989 |
- Schuldschein loans | AC | \u2014 | \u2014 | 188\u00a0598 | 188\u00a0598 |
- Bonds | AC | \u2014 | \u2014 | \u2014 | \u2014 |
Other non-current liabilities | |||||
- Other derivatives | FVTPL | 118 | 118 | \u2014 | \u2014 |
- Other payables | AC | 142 | 142 | 150 | 150 |
Trade payables | AC | 1\u00a0062\u00a0185 | 1\u00a0062\u00a0185 | 921\u00a0113 | 921\u00a0113 |
Carrying amount vs fair value | 31 December 2021 | 31 December 2022 | |||
in thousands of \u20ac | Category in accordance with IFRS 9 | Carrying amount | Fair value | Carrying amount | Fair value |
Other current liabilities | |||||
- Conversion option | FVTPL | \u2014 | \u2014 | \u2014 | \u2014 |
- Other payables | AC | 33\u00a0476 | 33\u00a0476 | 38\u00a0459 | 38\u00a0459 |
- Derivatives | |||||
- Held for trading | FVTPL | 2\u00a0324 | 2\u00a0324 | 1\u00a0548 | 1\u00a0548 |
Aggregated by category in accordance with IFRS 9 | |||||
Financial assets | AC | 1\u00a0611\u00a0729 | 1\u00a0611\u00a0729 | 1\u00a0546\u00a0706 | 1\u00a0546\u00a0706 |
FVTOCI/Eq | 20\u00a0081 | 20\u00a0081 | 26\u00a0023 | 26\u00a0023 | |
FVTPL/Mnd | 14\u00a0659 | 14\u00a0659 | 20\u00a0372 | 20\u00a0372 | |
Financial liabilities | AC | 2\u00a0287\u00a0127 | 2\u00a0282\u00a0201 | 2\u00a0195\u00a0718 | 2\u00a0143\u00a0518 |
FVTPL | 2\u00a0441 | 2\u00a0441 | 1\u00a0548 | 1\u00a0548 |
The fair value of all financial instruments measured at amortized cost in the balance sheet has been determined using level-2 fair value measurement techniques. For most financial instruments the carrying amount approximates the fair value.
Financial instruments by fair value measurement hierarchy
The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways:
\u2022\u2018Level 1\u2019 fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in these active markets for identical assets and liabilities. This mainly relates to financial assets at fair value through other comprehensive income such as the investment in Shougang Concord Century Holdings Ltd (see note 6.6.\u00a0\u2018Other non-current assets\u2019).
\u2022\u2018Level 2\u2019 fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward-exchange rates and yield curves derived from quoted interest rates with matching maturities. Interest-rate swaps are measured at
\u2022the present value of future cash flows estimated and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward-exchange rates, quoted interest rates and applicable yield curves derived therefrom.
\u2022\u2018Level 3\u2019 fair value measurement: the fair value of the remaining financial assets and financial liabilities is derived from valuation techniques which include inputs that are not based on observable market data. At the end of 2022, Bekaert had two types of financial instruments, namely the VPPA agreement and several equity investments, for which the fair value measurement can be characterized as \u2018level 3\u2019. The fair value of the VPPA contract is determined using a Monte Carlo valuation model. The main factors determining the fair value of the VPPA agreement are the discount rate (level 2), the estimated energy output based on wind or solar studies in the area and the off-peak/on-peak price volatility (level 3). The fair value of the main equity investment (Xinju Metal Products Co Ltd) is determined using a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption. The main factors determining the fair value are the discount rate and EBITDA.
Derivative in VPPA arrangement | 31 December 2022 |
Level 2 inputs | |
Discount rate | Weighted average of investment grade corporate bond curves |
Level 3 inputs | |
Power forward sensitivity | Estimated on peak/off peak price forecasts |
Production sensitivity | Based on wind / solar studies in the area |
Outcome of the model (in thousands of \u20ac) | |
Fair value of the VPPA derivative | 7500 |
The carrying amount (i.e. the fair value) of the level-3 liabilities/(assets) has evolved as follows:
Level-3 Financial liabilities / (assets) | ||
in thousands of \u20ac | 2021 | 2022 |
At 1 January | -10\u00a0682 | -23\u00a0561 |
(Expenditure) / Disposal | -863 | -8\u00a0537 |
(Gain) / loss in fair value through OCI | -1\u00a0916 | -555 |
(Gain) / loss in fair value through P&L | -10\u00a0100 | 5\u00a0743 |
At 31 December | -23\u00a0561 | -26\u00a0910 |
Gains and losses in fair value are reported in other financial income and expenses (\u20ac\u00a05.7\u00a0million), except for the equity investments where fair value changes are carried through other comprehensive income (\u20ac\u00a0-0.6\u00a0million) (see note 6.6. \u2018Other non-current assets\u2019).
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for King Plains.
Sensitivity analysis King Plains | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 188 | |
-10% | decreased by | -281 | ||
Production sensitivity | +5% | increased by | 375 | |
-5% | decreased by | -469 |
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for Rockhound
Sensitivity analysis Rockhound | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 2\u00a0344 | |
-10% | decreased by | -2\u00a0438 | ||
Production sensitivity | +5% | increased by | 750 | |
-5% | decreased by | -750 |
The sensitivity of the fair value calculation of the equity investment in Xinju Metal Products Co Ltd (\u20ac\u00a06.5 million) is shown below:
\u2022If EBITDA would be CNY\u00a04.0 million lower in all periods of the business plan, the fair value would be \u20ac\u00a05.5\u00a0million;
\u2022If the discount factor would be 1% higher, the fair value would be \u20ac\u00a06.0\u00a0million;
\u2022If EBITDA would be CNY\u00a04.0 million lower in all years of the business plan and the discount factor would be 1% higher, the fair value would be \u20ac\u00a05.1\u00a0million.
The following table provides an analysis of financial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above:
2021 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 1\u00a0416 | 13\u00a0244 | 14\u00a0659 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments | 9\u00a0764 | \u2014 | 10\u00a0317 | 20\u00a0081 |
Total assets | 9\u00a0764 | 1\u00a0416 | 23\u00a0561 | 34\u00a0741 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
Total liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
2022 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 12\u00a0872 | 7\u00a0500 | 20\u00a0372 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments \u00b9 | 6\u00a0614 | \u2014 | 19\u00a0410 | 26\u00a0023 |
Total assets | 6\u00a0614 | 12\u00a0872 | 26\u00a0910 | 46\u00a0395 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Total liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Derivatives
The following table analyzes the notional amounts of the derivatives according to their maturity date. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31 December 2022, Bekaert does not apply hedge accounting
2021 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 67\u00a0716 | \u2014 | \u2014 |
Interest-rate swaps | \u2014 | 196\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 128\u00a0947 | \u2014 | \u2014 |
Conversion derivative | \u2014 | \u2014 | \u2014 |
Total | 196\u00a0663 | 196\u00a0500 | \u2014 |
2022 | |||
in thousands of \u20ac | Due within one year | Due between one and 5 years | Due after more than |
Held for trading | |||
Forward exchange contracts | 65\u00a0493 | \u2014 | \u2014 |
Interest-rate swaps | 116\u00a0000 | 80\u00a0500 | \u2014 |
Cross-currency interest-rate swaps | 121\u00a0843 | \u2014 | \u2014 |
Total | 303\u00a0336 | 80\u00a0500 | \u2014 |
The following table summarizes the fair values of the various derivatives carried. In the case that derivatives are designated for hedge accounting as set out in IFRS 9, a distinction will be made depending on whether these are part of a fair value hedge (FVH) or cash flow hedge (CFH). At 31\u00a0December\u00a02022, Bekaert does not apply hedge accounting:
Fair value of current and non-current derivatives | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Financial instruments | ||||
Held for trading | ||||
Forward exchange contracts | 805 | 2\u00a0833 | 654 | 1\u00a0333 |
Interest-rate swaps | \u2014 | 7\u00a0178 | 118 | \u2014 |
Cross-currency interest-rate swaps | 610 | 2\u00a0860 | 2\u00a0255 | 215 |
Conversion derivative | \u2014 | \u2014 | \u2014 | |
Other derivative financial assets | 13\u00a0244 | 7\u00a0500 | \u2014 | \u2014 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Non-current | 13\u00a0244 | 14\u00a0678 | 703 | \u2014 |
Current | 1\u00a0416 | 5\u00a0694 | 2\u00a0324 | 1\u00a0548 |
Total | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
In 2022, the other derivative financial assets related to the VPPA derivatives for \u20ac 7.5 million (2021: \u20ac 13.2\u00a0million).
The Group has no financial assets and financial liabilities that are presented net in the balance sheet due to set-off in accordance with IAS 32. The Group enters into ISDA (International Swaps and Derivatives Association) master agreements with its counterparties for some of its derivatives, allowing the counterparties to net derivative assets with derivative liabilities when settling in case of default. Under these agreements, no collateral is being exchanged, neither in cash nor in securities.
The potential effect of the netting of derivative contracts is shown below:
Effect of enforceable netting agreements | Assets | Liabilities | ||
in thousands of \u20ac | 2021 | 2022 | 2021 | 2022 |
Total derivatives recognized in balance sheet | 14\u00a0659 | 20\u00a0372 | 3\u00a0026 | 1\u00a0548 |
Enforceable netting | -610 | -215 | -610 | -215 |
Net amounts | 14\u00a0049 | 20\u00a0157 | 2\u00a0416 | 1\u00a0333 |
Additional disclosures on financial instruments by class and category
The following tables list the different classes of financial assets and liabilities with their carrying amounts and their respective fair values, analyzed by their measurement category in accordance with IFRS 9 \u2018Financial Instruments\u2019.
Cash and cash equivalents, short-term deposits, trade and other receivables, bills of exchange received, loans and receivables primarily have short terms to maturity; hence, their carrying amounts at the reporting date approximate the fair values. Trade and other payables also generally have short terms to maturity and, hence, their carrying amounts also approximate their fair values. The Group has no exposure to collateralized debt obligations (CDOs).
The following abbreviations are used for the IFRS 9 categories:
Abbreviation | Category in accordance with IFRS 9 |
AC | Financial assets or financial liabilities at amortized cost |
FVTOCI/Eq | Equity instruments designated as at fair value through OCI |
FVTPL/Mnd | Financial assets mandatorily measured at fair value through profit or loss |
FVTPL | Financial liabilities measured as at fair value through profit or loss |
Carrying amount vs fair value | 31 December 2021 | 31 December 2022 | |||
in thousands of \u20ac | Category in accordance with IFRS 9 | Carrying amount | Fair value | Carrying amount | Fair value |
Assets | |||||
Non-current financial assets | |||||
- Financial & other receivables | AC | 12\u00a0549 | 12\u00a0549 | 12\u00a0211 | 12\u00a0211 |
- Equity investments | FVTOCI/Eq | 20\u00a0081 | 20\u00a0081 | 26\u00a0023 | 26\u00a0023 |
- Derivatives | |||||
- Held for trading | FVTPL/Mnd | 13\u00a0244 | 13\u00a0244 | 14\u00a0678 | 14\u00a0678 |
Current financial assets | |||||
- Financial receivables and cash | AC | 6\u00a0475 | 6\u00a0475 | 6\u00a0352 | 6\u00a0352 |
- Cash and cash equivalents | AC | 677\u00a0270 | 677\u00a0270 | 728\u00a0095 | 728\u00a0095 |
- Short term deposits | AC | 80\u00a0058 | 80\u00a0058 | 4\u00a0766 | 4\u00a0766 |
- Trade receivables | AC | 750\u00a0666 | 750\u00a0666 | 730\u00a0786 | 730\u00a0786 |
- Bills of exchange received | AC | 41\u00a0274 | 41\u00a0274 | 39\u00a0764 | 39\u00a0764 |
- Other current assets | |||||
- Other receivables | AC | 43\u00a0437 | 43\u00a0437 | 24\u00a0732 | 24\u00a0732 |
- Derivatives | |||||
- Held for trading | FVTPL/Mnd | 1\u00a0416 | 1\u00a0416 | 5\u00a0694 | 5\u00a0694 |
Liabilities | |||||
Non-current interest-bearing debt | |||||
- Lease liabilities | AC | 56\u00a0425 | 56\u00a0425 | 57\u00a0203 | 57\u00a0203 |
- Cash guarantees received | AC | 204 | 204 | 210 | 210 |
- Credit institutions | AC | 177\u00a0047 | 177\u00a0047 | 146\u00a0413 | 146\u00a0413 |
- Schuldschein loans | AC | 319\u00a0905 | 319\u00a0905 | 131\u00a0582 | 131\u00a0582 |
- Bonds | AC | 400\u00a0000 | 395\u00a0074 | 400\u00a0000 | 347\u00a0800 |
Current interest-bearing debt | |||||
- Lease liabilities | AC | 20\u00a0219 | 20\u00a0219 | 20\u00a0002 | 20\u00a0002 |
- Credit institutions | AC | 217\u00a0523 | 217\u00a0523 | 291\u00a0989 | 291\u00a0989 |
- Schuldschein loans | AC | \u2014 | \u2014 | 188\u00a0598 | 188\u00a0598 |
- Bonds | AC | \u2014 | \u2014 | \u2014 | \u2014 |
Other non-current liabilities | |||||
- Other derivatives | FVTPL | 118 | 118 | \u2014 | \u2014 |
- Other payables | AC | 142 | 142 | 150 | 150 |
Trade payables | AC | 1\u00a0062\u00a0185 | 1\u00a0062\u00a0185 | 921\u00a0113 | 921\u00a0113 |
Carrying amount vs fair value | 31 December 2021 | 31 December 2022 | |||
in thousands of \u20ac | Category in accordance with IFRS 9 | Carrying amount | Fair value | Carrying amount | Fair value |
Other current liabilities | |||||
- Conversion option | FVTPL | \u2014 | \u2014 | \u2014 | \u2014 |
- Other payables | AC | 33\u00a0476 | 33\u00a0476 | 38\u00a0459 | 38\u00a0459 |
- Derivatives | |||||
- Held for trading | FVTPL | 2\u00a0324 | 2\u00a0324 | 1\u00a0548 | 1\u00a0548 |
Aggregated by category in accordance with IFRS 9 | |||||
Financial assets | AC | 1\u00a0611\u00a0729 | 1\u00a0611\u00a0729 | 1\u00a0546\u00a0706 | 1\u00a0546\u00a0706 |
FVTOCI/Eq | 20\u00a0081 | 20\u00a0081 | 26\u00a0023 | 26\u00a0023 | |
FVTPL/Mnd | 14\u00a0659 | 14\u00a0659 | 20\u00a0372 | 20\u00a0372 | |
Financial liabilities | AC | 2\u00a0287\u00a0127 | 2\u00a0282\u00a0201 | 2\u00a0195\u00a0718 | 2\u00a0143\u00a0518 |
FVTPL | 2\u00a0441 | 2\u00a0441 | 1\u00a0548 | 1\u00a0548 |
The fair value of all financial instruments measured at amortized cost in the balance sheet has been determined using level-2 fair value measurement techniques. For most financial instruments the carrying amount approximates the fair value.
Financial instruments by fair value measurement hierarchy
The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways:
\u2022\u2018Level 1\u2019 fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in these active markets for identical assets and liabilities. This mainly relates to financial assets at fair value through other comprehensive income such as the investment in Shougang Concord Century Holdings Ltd (see note 6.6.\u00a0\u2018Other non-current assets\u2019).
\u2022\u2018Level 2\u2019 fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward-exchange rates and yield curves derived from quoted interest rates with matching maturities. Interest-rate swaps are measured at
\u2022the present value of future cash flows estimated and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward-exchange rates, quoted interest rates and applicable yield curves derived therefrom.
\u2022\u2018Level 3\u2019 fair value measurement: the fair value of the remaining financial assets and financial liabilities is derived from valuation techniques which include inputs that are not based on observable market data. At the end of 2022, Bekaert had two types of financial instruments, namely the VPPA agreement and several equity investments, for which the fair value measurement can be characterized as \u2018level 3\u2019. The fair value of the VPPA contract is determined using a Monte Carlo valuation model. The main factors determining the fair value of the VPPA agreement are the discount rate (level 2), the estimated energy output based on wind or solar studies in the area and the off-peak/on-peak price volatility (level 3). The fair value of the main equity investment (Xinju Metal Products Co Ltd) is determined using a 5-year forecast timeframe of cash flows based on the latest business plan, followed by a terminal value assumption. The main factors determining the fair value are the discount rate and EBITDA.
Derivative in VPPA arrangement | 31 December 2022 |
Level 2 inputs | |
Discount rate | Weighted average of investment grade corporate bond curves |
Level 3 inputs | |
Power forward sensitivity | Estimated on peak/off peak price forecasts |
Production sensitivity | Based on wind / solar studies in the area |
Outcome of the model (in thousands of \u20ac) | |
Fair value of the VPPA derivative | 7500 |
The carrying amount (i.e. the fair value) of the level-3 liabilities/(assets) has evolved as follows:
Level-3 Financial liabilities / (assets) | ||
in thousands of \u20ac | 2021 | 2022 |
At 1 January | -10\u00a0682 | -23\u00a0561 |
(Expenditure) / Disposal | -863 | -8\u00a0537 |
(Gain) / loss in fair value through OCI | -1\u00a0916 | -555 |
(Gain) / loss in fair value through P&L | -10\u00a0100 | 5\u00a0743 |
At 31 December | -23\u00a0561 | -26\u00a0910 |
Gains and losses in fair value are reported in other financial income and expenses (\u20ac\u00a05.7\u00a0million), except for the equity investments where fair value changes are carried through other comprehensive income (\u20ac\u00a0-0.6\u00a0million) (see note 6.6. \u2018Other non-current assets\u2019).
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for King Plains.
Sensitivity analysis King Plains | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 188 | |
-10% | decreased by | -281 | ||
Production sensitivity | +5% | increased by | 375 | |
-5% | decreased by | -469 |
The following table shows the sensitivity of the fair value calculation to the most significant level-3 inputs of the VPPA agreement for Rockhound
Sensitivity analysis Rockhound | ||||
in thousands of \u20ac | Change | Impact on VPPA derivative | ||
Power forward sensitivity | +10% | increased by | 2\u00a0344 | |
-10% | decreased by | -2\u00a0438 | ||
Production sensitivity | +5% | increased by | 750 | |
-5% | decreased by | -750 |
The sensitivity of the fair value calculation of the equity investment in Xinju Metal Products Co Ltd (\u20ac\u00a06.5 million) is shown below:
\u2022If EBITDA would be CNY\u00a04.0 million lower in all periods of the business plan, the fair value would be \u20ac\u00a05.5\u00a0million;
\u2022If the discount factor would be 1% higher, the fair value would be \u20ac\u00a06.0\u00a0million;
\u2022If EBITDA would be CNY\u00a04.0 million lower in all years of the business plan and the discount factor would be 1% higher, the fair value would be \u20ac\u00a05.1\u00a0million.
The following table provides an analysis of financial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above:
2021 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 1\u00a0416 | 13\u00a0244 | 14\u00a0659 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments | 9\u00a0764 | \u2014 | 10\u00a0317 | 20\u00a0081 |
Total assets | 9\u00a0764 | 1\u00a0416 | 23\u00a0561 | 34\u00a0741 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
Total liabilities | \u2014 | 3\u00a0026 | \u2014 | 3\u00a0026 |
2022 | ||||
in thousands of \u20ac | Level 1 | Level 2 | Level 3 | Total |
Financial assets mandatorily measured as at fair value through profit or loss | ||||
Derivative financial assets | \u2014 | 12\u00a0872 | 7\u00a0500 | 20\u00a0372 |
Equity instruments designated as at fair value through OCI | ||||
Equity investments \u00b9 | 6\u00a0614 | \u2014 | 19\u00a0410 | 26\u00a0023 |
Total assets | 6\u00a0614 | 12\u00a0872 | 26\u00a0910 | 46\u00a0395 |
Financial liabilities held for trading | ||||
Other derivative financial liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Total liabilities | \u2014 | 1\u00a0548 | \u2014 | 1\u00a0548 |
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the net debt and equity balance. The Group\u2019s overall strategy remains unchanged from 2021.
The capital structure of the Group consists of net debt, as defined in note 6.18. \u2018Interest-bearing debt\u2019, and equity (both attributable to equity holders of Bekaert and to non-controlling interests).
Gearing ratio
The Group\u2019s Audit, Risk and Finance Committee reviews the capital structure on a semi-annual basis. As part of this review, the committee assesses the cost of capital and the risks associated with each class of capital. The Group has a target gearing ratio of 50% determined as the proportion of net debt to equity. To realize this target (excluding the impact of IFRS 16 \u2018Leases\u2019), the Group is following systematically a number of guidelines, a.o.
\u2022strict cost control to improve profitability;
\u2022managing working capital levels by:
\u2013operational excellence;
\u2013cash collection actions;
\u2013better aligned payment terms;
\u2013optimized factoring usage;
\u2022strict control of capital expenditure;
\u2022active business portfolio management, including M&A and divestments.
Gearing | ||
in thousands of \u20ac | 2021 | 2022 |
Net debt | 417\u00a0329 | 487\u00a0118 |
Equity\u00b9 | 2\u00a0097\u00a0663 | 2\u00a0229\u00a0556 |
Net debt to equity ratio | 19.9% | 21.8% |
As at 31 December, the important contingencies and commitments were:
in thousands of \u20ac | 2021 | 2022 |
Contingent liabilities | 4\u00a0200 | 6\u00a0840 |
Commitments to purchase fixed assets | 48\u00a0984 | 67\u00a0935 |
Commitments to invest in venture capital funds | 3\u00a0269 | 2\u00a0600 |
As at 31 December, the important contingencies and commitments were:
in thousands of \u20ac | 2021 | 2022 |
Contingent liabilities | 4\u00a0200 | 6\u00a0840 |
Commitments to purchase fixed assets | 48\u00a0984 | 67\u00a0935 |
Commitments to invest in venture capital funds | 3\u00a0269 | 2\u00a0600 |
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. Transactions with other related parties are disclosed below.
Transactions with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Sales of goods | 13\u00a0231 | 21\u00a0951 |
Purchases of goods | 18\u00a0509 | 21\u00a0152 |
Services rendered | 81 | 64 |
Royalties and management fees received | 14\u00a0981 | 18\u00a0374 |
Interest and similar income | \u2014 | 6 |
Dividends received | 44\u00a0847 | 42\u00a0508 |
Outstanding balances with joint ventures | ||
in thousands of \u20ac | 2021 | 2022 |
Trade receivables | 6\u00a0116 | 6\u00a0592 |
Other current receivables \u00b9 | 27\u00a0452 | 5\u00a0881 |
Trade payables | 4\u00a0945 | 3\u00a0557 |
Other current payables | 54 | \u2014 |
\u00b9 The other current receivables are at year-end 2021 significantly higher due to outstanding receivables for dividends from the Brazilian joint ventures (\u20ac\u00a027.5 million).
None of the related parties have entered into any other transactions with the Group that meet the requirements of IAS 24 \u2018Related Party Disclosures\u2019. The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm\u2019s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. Advances have been received for ongoing capex projects. More information on transactions with joint ventures are disclosed in note 6.5. \u2018Investments in joint ventures and associates\u2019.
Key Management includes the Board of Directors, the CEO, the members of the Bekaert Group Executive (BGE) and the Senior Vice Presidents (see last page of this report).
Key Management remuneration
in thousands of \u20ac | 2021 | 2022 |
Number of persons | 34 | 32 |
Short-term employee benefits | ||
Basic remuneration | 8\u00a0407 | 8\u00a0368 |
Variable remuneration | 4\u00a0126 | 6\u00a0314 |
Remuneration as directors of subsidiaries | 511 | 513 |
Post-employment benefits | ||
Defined-benefit pension plans | 327 | 190 |
Defined-contribution pension plans | 1\u00a0551 | 1\u00a0594 |
Share-based payment benefits | 11\u00a0719 | 6\u00a0467 |
Total gross remuneration | 26\u00a0641 | 23\u00a0446 |
Average gross remuneration per person | 784 | 733 |
Number of performance share units granted (cash-settled and equity-settled) | 131\u00a0442 | 111\u00a0135 |
Number of matching share units to be granted | 9\u00a0112 | 13\u00a0757 |
Number of shares granted | 10\u00a0940 | 12\u00a0080 |
Key Management includes the Board of Directors, the CEO, the members of the Bekaert Group Executive (BGE) and the Senior Vice Presidents (see last page of this report).
Key Management remuneration
in thousands of \u20ac | 2021 | 2022 |
Number of persons | 34 | 32 |
Short-term employee benefits | ||
Basic remuneration | 8\u00a0407 | 8\u00a0368 |
Variable remuneration | 4\u00a0126 | 6\u00a0314 |
Remuneration as directors of subsidiaries | 511 | 513 |
Post-employment benefits | ||
Defined-benefit pension plans | 327 | 190 |
Defined-contribution pension plans | 1\u00a0551 | 1\u00a0594 |
Share-based payment benefits | 11\u00a0719 | 6\u00a0467 |
Total gross remuneration | 26\u00a0641 | 23\u00a0446 |
Average gross remuneration per person | 784 | 733 |
Number of performance share units granted (cash-settled and equity-settled) | 131\u00a0442 | 111\u00a0135 |
Number of matching share units to be granted | 9\u00a0112 | 13\u00a0757 |
Number of shares granted | 10\u00a0940 | 12\u00a0080 |
During 2022, the statutory auditor and persons professionally related to him performed additional services for fees amounting to \u20ac 191\u00a0088.
These fees essentially relate to further assurance services (\u20ac\u00a0150\u00a0588), tax advisory services (\u20ac\u00a06\u00a0500) and other non-audit services (\u20ac\u00a034\u00a0000). The additional services were approved by the Audit, Risk and Finance Committee.
Companies forming part of the Group as at 31 December 2022\u00a0
Subsidiaries
Industrial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Advanced Cords Aalter NV | Aalter, Belgium | EUR | 100 |
Bekaert Bohum\u00edn sro | Bohum\u00edn, Czech Republic | CZK | 100 |
Bekaert Bradford UK Ltd | Bradford, United Kingdom | GBP | 100 |
Bekaert Combustion Technology BV | Assen, Netherlands | EUR | 100 |
Bekaert Heating Romania SRL | Negoiesti, Brazi Commune, Romania | RON | 100 |
Bekaert Hlohovec as | Hlohovec, Slovakia | EUR | 100 |
Bekaert Izmit \u00c7elik Kord Sanayi ve Ticaret AS | Izmit, Turkey | EUR | 100 |
Bekaert Kartepe \u00c7elik Kord Sanayi ve Ticaret AS | Kartepe, Turkey | EUR | 100 |
Bekaert Petrovice sro | Petrovice, Czech Republic | CZK | 100 |
Bekaert Sardegna SpA | Assemini, Italy | EUR | 100 |
Bekaert Slatina SRL | Slatina, Romania | RON | 100 |
Bekaert Slovakia sro | Sl\u00e1dkovi\u010dovo, Slovakia | EUR | 100 |
Bekintex NV | Wetteren, Belgium | EUR | 100 |
Bridon International GmbH | Gelsenkirchen, Germany | EUR | 100 |
Bridon International Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias del Ubierna SA | Burgos, Spain | EUR | 100 |
OOO Bekaert Lipetsk | Gryazi, Russian Federation | RUB | 100 |
VisionTek Engineering Srl | Rovereto, Italy | EUR | 100 |
North America | |||
Bekaert Corporation | Wilmington (Delaware), United States | USD | 100 |
Bridon-American Corporation | New York, United States | USD | 100 |
Latin America | |||
Acma SA | Santiago, Chile | CLP | 52 |
Acmanet SA | Talcahuano, Chile | CLP | 52 |
BBRG - Osasco Cabos Ltda | S\u00e3o Paulo, Brazil | BRL | 100 |
BIA Alambres Costa Rica SA | San Jos\u00e9-Santa Ana, Costa Rica | USD | 58 |
Ideal Alambrec SA | Quito, Ecuador | USD | 58 |
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Industrias Chilenas de Alambre - Inchalam SA | Talcahuano, Chile | CLP | 52 |
Prodinsa SA | Maip\u00fa, Chile | CLP | 100 |
Productora de Alambres Colombianos Proalco SAS | Bogot\u00e1, Colombia | COP | 40 |
Productos de Acero Cassad\u00f3 SA | Callao, Peru | USD | 38 |
Vicson SA | Valencia, Venezuela | USD | 80 |
Asia Pacific | |||
Bekaert Applied Material Technology (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Binjiang Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
Bekaert (China) Technology Research and Development Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert (Chongqing) Steel Cord Co Ltd | Chongqing, China | CNY | 100 |
Bekaert Industries Pvt Ltd | Taluka Shirur, District Pune, India | INR | 100 |
Bekaert (Jining) Steel Cord Co Ltd | Jining City, Yanzhou district (Shandong Province), China | CNY | 60 |
Bekaert Jiangyin Wire Products Co Ltd | Jiangyin (Jiangsu province), China | CNY | 100 |
Bekaert Mukand Wire Industries Pvt Ltd | Pune, India | INR | 100 |
Bekaert New Materials (Suzhou) Co Ltd | Suzhou (Jiangsu province), China | CNY | 100 |
Bekaert (Qingdao) Wire Products Co Ltd | Qingdao (Shandong province), China | CNY | 100 |
Bekaert (Shandong) Tire Cord Co Ltd | Weihai (Shandong province), China | CNY | 100 |
Bekaert (Shenyang) Advanced Cords Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Shenyang Advanced Products Co Ltd | Shenyang (Liaoning province), China | CNY | 100 |
Bekaert Toko Metal Fiber Co Ltd | Tokyo, Japan | JPY | 70 |
Bekaert Vietnam Co Ltd | Son Tinh District, Quang Ngai Province, Vietnam | USD | 100 |
Bekaert Wire Ropes Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon (Hangzhou) Ropes Co Ltd | Hangzhou (Zhejiang province), China | CNY | 100 |
China Bekaert Steel Cord Co Ltd | Jiangyin (Jiangsu province), China | CNY | 90 |
PT Bekaert Indonesia | Karawang, Indonesia | USD | 100 |
PT Bekaert Wire Indonesia | Karawang, Indonesia | USD | 100 |
PT Bridon | Bekasi, West Java, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Bekaert Emirates LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Figline SpA | Milano, Italy | EUR | 100 |
Bekaert France SAS | Lille, France | EUR | 100 |
Bekaert Gesellschaft mbH | Vienna, Austria | EUR | 100 |
Bekaert GmbH | Neu-Anspach, Germany | EUR | 100 |
Bekaert Middle East LLC | Dubai, United Arab Emirates | AED | 49 |
Bekaert Norge AS | Oslo, Norway | NOK | 100 |
Bekaert Poland Sp z oo | Warsaw, Poland | PLN | 100 |
Bekaert (Schweiz) AG | Baden, Switzerland | CHF | 100 |
Bekaert Svenska AB | Gothenburg, Sweden | SEK | 100 |
Bridon-Bekaert ScanRope AS | Tonsberg, Norway | NOK | 100 |
Bridon Middle East FZE | Sharjah, United Arab Emirates | AED | 100 |
Bridon Scheme Trustees Ltd | Doncaster, United Kingdom | GBP | 100 |
British Ropes Ltd | Doncaster, United Kingdom | GBP | 100 |
Leon Bekaert SpA | Milano, Italy | EUR | 100 |
OOO Bekaert Wire | Moscow, Russian Federation | RUB | 100 |
Rylands-Whitecross Ltd | Bradford, United Kingdom | GBP | 100 |
Scheldestroom NV | Zwevegem, Belgium | EUR | 100 |
Twil Company | Bradford, United Kingdom | GBP | 100 |
North America | |||
Wire Rope Industries Ltd/Industries de C\u00e2bles d\u2019Acier Lt\u00e9e | Montr\u00e9al, Canada | CAD | 100 |
Latin America | |||
Bekaert Guatemala SA | Ciudad de Guatemala, Guatemala | GTQ | 58 |
Bekaert Specialty Films de Mexico SA de CV | Monterrey, Mexico | MXN | 100 |
Bekaert Trade Mexico S de RL de CV | Mexico City, Mexico | MXN | 100 |
Procables SA | Cercado de Lima, Peru | PEN | 96 |
Prodac Contrata SAC | Callao, Peru | USD | 38 |
Prodalam SA | Santiago, Chile | CLP | 52 |
Prodicom Selva SAC | Ucayali, Peru | USD | 38 |
Prodimin SAC | Lima, Peru | USD | 38 |
Specialty Films de Services Company SA de CV | Monterrey, Mexico | MXN | 100 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
Asia Pacific | |||
Bekaert Japan Co Ltd | Tokyo, Japan | JPY | 100 |
Bekaert Korea Ltd | Seoul, South-Korea | KRW | 100 |
Bekaert Malaysia Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Management (Shanghai) Co Ltd | Shanghai, China | CNY | 100 |
Bekaert Shah Alam Sdn Bhd | Kuala Lumpur, Malaysia | MYR | 100 |
Bekaert Singapore Pte Ltd | Singapore | SGD | 100 |
Bekaert Taiwan Co Ltd | Taipei City | TWD | 100 |
Bekaert (Thailand) Co Ltd | Tambol Pluakdaeng, Amphur Pluakdaeng,Thailand | USD | 100 |
BOSFA Pty Ltd | Mayfield East, Australia | AUD | 100 |
Bridon Hong Kong Ltd | Hong Kong, China | HKD | 100 |
Bridon New Zealand Ltd | Aukland, New Zealand | NZD | 100 |
Bridon Singapore (Pte) Ltd | Singapore | SGD | 100 |
Bridon (South East Asia) Ltd | Hong Kong, China | HKD | 100 |
PT Bekaert Trade Indonesia | Karawang, Indonesia | USD | 100 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Financial companies | Address | FC \u00b9 | % \u00b2 |
Acma Inversiones SA | Santiago, Chile | CLP | 100 |
BBRG Finance (UK) Ltd | Doncaster, United Kingdom | EUR | 100 |
Becare DAC | Dublin, Ireland | EUR | 100 |
Bekaert Building Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Carding Solutions Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Co\u00f6rdinatiecentrum NV | Zwevegem, Belgium | EUR | 100 |
Bekaert do Brasil Ltda | Contagem, Brazil | BRL | 100 |
Bekaert Holding Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Ib\u00e9rica Holding SL | Burgos, Spain | EUR | 100 |
Bekaert Ideal SL | Burgos, Spain | EUR | 80 |
Bekaert Investments NV | Zwevegem, Belgium | EUR | 100 |
Bekaert Investments Italia SpA | Milano, Italy | EUR | 100 |
Bekaert North America Management Corporation | Wilmington (Delaware), United States | USD | 100 |
Bekaert Services Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Singapore Holding Pte Ltd | Singapore | SGD | 100 |
Bekaert Specialty Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Stainless Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Steel Cord Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Strategic Partnerships Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Products Hong Kong Ltd | Hong Kong, China | EUR | 100 |
Bekaert Wire Rope Industry NV | Zwevegem, Belgium | EUR | 100 |
Bridon-Bekaert Ropes Group Ltd | Doncaster, United Kingdom | EUR | 100 |
Bridon Holdings Ltd | Doncaster, United Kingdom | GBP | 100 |
Bridon Ltd | Doncaster, United Kingdom | GBP | 100 |
Industrias Acmanet Ltda | Talcahuano, Chile | CLP | 52 |
InverVicson SA | Valencia, Venezuela | USD | 80 |
Procercos SA | Talcahuano, Chile | CLP | 52 |
Joint ventures
Industrial companies | Address | FC \u00b9 | % \u00b2 |
Latin America | |||
Agro-Bekaert Colombia SAS | Malambo - Atl\u00e1ntico, Colombia | COP | 40 |
Belgo Bekaert Arames Ltda | Contagem, Brazil | BRL | 45 |
BMB-Belgo Mineira Bekaert Artefatos de Arame Ltda | Vespasiano, Brazil | BRL | 45 |
Servicios Ideal AGF Inttegra Cia Ltda | Quito, Ecuador | USD | 29 |
Sales offices, warehouses and others | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Netlon Sentinel Ltd | Blackburn, United Kingdom | GBP | 50 |
Asia Pacific | |||
Bekaert Engineering (India) Pvt Ltd | New Delhi, India | INR | 40 |
Financial companies | Address | FC \u00b9 | % \u00b2 |
EMEA | |||
Agro - Bekaert Springs SL | Burgos, Spain | EUR | 40 |
\u00b9 Functional currency
\u00b2 Financial interest percentage
Changes in 2022
1. Subsidiaries acquired through business combinations
Subsidiaries | Address | % \u00b9 |
VisionTek Engineering Srl | Rovereto, Italy | 100 |
2. Mergers
Subsidiaries | Merged into |
Sujetar del Peru SAC | Productos de Acero Cassad\u00f3 SA |
3. Liquidated
Companies | Address |
Bekaert AS | Hellerup, Denmark |
Bekaert Architectural Design Consulting (Shanghai) Co Ltd | Shanghai, China |
Bekaert Heating Technology (Suzhou) Co Ltd | Taicang City (Jiangsu province), China |
In accordance with Belgian legislation, the table below lists the registered numbers of the Belgian companies.
Companies | Company number |
Bekaert Advanced Cords Aalter NV | BTW BE 0645.654.071 RPR Gent, division Gent |
Bekaert Co\u00f6rdinatiecentrum NV | BTW BE 0426.824.150 RPR Gent, division Kortrijk |
Bekaert Investments NV | BTW BE 0406.207.096 RPR Gent, division Kortrijk |
Bekaert Wire Rope Industry NV | BTW BE 0550.983.358 RPR Gent, division Kortrijk |
Bekintex NV | BTW BE 0452.746.609 RPR Gent, division Dendermonde |
NV Bekaert SA | BTW BE 0405.388.536 RPR Gent, division Kortrijk |
Scheldestroom NV | BTW BE 0403.676.188 RPR Gent, division Kortrijk |