The Bekaert share gained almost 26% in 2019 when comparing the year-end close price of 2019 with 2018, slightly below the performance of our reference index, Euronext Brussels BEL Mid. Where Bekaert’s share price initially surged in the run-up to the full-year results 2018 announcement - to reach €25 on 22 February 2019 - the share dropped below €21 at the end of March, following the Bekaert 2018 results and Belgian restructuring announcements. The share steadily recovered after the dividend distribution in May 2019, to reach a year-high of €28 on 12 November 2019. The share was volatile throughout the year with strong reactions to announcements and policy changes related to US-China trade tensions and to profit warnings and restructuring announcements in sectors relevant to Bekaert.
The Bekaert share is listed on the regulated market of Euronext Brussels as ISIN BE0974258874 (BEKB) and was first listed in December 1972.
The ICB sector code is 2727 Diversified Industrials.
|Price as at 31 December||25.72||26.34||28.38||38.48||36.45
|Price average closing
|Daily volume||126 923||82 813||120 991||123 268||121 686
|Daily turnover (in millions of €)||3.1||2.1||3.1||4.5||5.0
|Annual turnover (in millions of €)||796||527||804||1 147||1 279||1 121
|Velocity (% annual)||54||35||52||53||51
|Velocity (% adjusted free float)||90||59||86||88||86
|Free float (%)||59.9||55.7||56.7||59.2||59.6
The average daily trading volume was about 97 000 shares in 2019. The volume peaked on 21 June, when 399 611 shares were traded.
On 31 December 2019, Bekaert had a market capitalization of € 1.6 billion and a free ﬂoat market capitalization of € 1 billion. The free ﬂoat was 59.31% and the free ﬂoat band 60%.
In connection with the entry into force of the Act of 2 May 2007 on the disclosure of significant participations (the Transparency Act) Bekaert has, in its Articles of Association, set the thresholds of 3% and 7.50% in addition to the legal thresholds of 5% and each multiple of 5%. An overview of the notifications of participations of 3% or more, if any, can be found in the Parent Company Information section of this Annual Report (Interests in share capital).
Stichting Administratiekantoor Bekaert (principal shareholder) owns 34.28% of the shares, while institutional shareholders are estimated to hold 35% of the shares. Retail represents 11.08%, Private Banking 13.16% and treasury shares 6.41%.
On 8 December 2007, Stichting Administratiekantoor Bekaert disclosed in accordance with Article 74 of the Act of 1 April 2007 on public takeover bids that it was holding individually more than 30% of the securities with voting rights of the Company on 1 September 2007.
As of 31 December 2019 the registered capital of the Company amounts to € 177 793 000, and is represented by 60 408 441 shares without par value. The shares are in registered or dematerialized form. All shares have the same rights.
The Board of Directors has been authorized by the General Meeting of Shareholders of 11 May 2016 to increase the Company’s registered capital in one or more times by an aggregate maximum amount of € 176 000 000 (before any issue premium). The authority is valid for five years from 20 June 2016 and can be renewed in accordance with the applicable statutory provisions. Pursuant to this authorization, the Board of Directors may, among others, effect a capital increase under the authorized capital by means of issuing ordinary shares, subscription rights or convertible bonds and may limit or disapply the preferential subscription right of the Company’s shareholders in accordance with the new Code on Companies and Associations.
Furthermore, the Board of Directors has been authorized, for a period of three years from 14 June 2018, to make use of the authorized capital upon receipt by the Company of a notice from the FSMA of a public takeover bid for the Company’s securities.
The Board of Directors will propose to the Extraordinary General Meeting of Shareholders of 26 March 2020 (or of 13 May 2020 should the required quorum not be reached on 26 March 2020) the renewal of the above authorities as part of the amendment to the Articles of Association.
The Board of Directors has made use of its powers under the authorized capital when it resolved on 18 May 2016 to issue senior unsecured convertible bonds due June 2021 for an aggregate amount of € 380 000 000 (the “Convertible Bonds”). These Convertible Bonds carry a zero-coupon and their conversion price amounts to € 50.71 per share.
In connection with the issuance of the Convertible Bonds, the Board of Directors resolved to disapply the preference subscription right of existing shareholders set forth in Articles 596 and following of the former Companies Code applicable at that time. The terms of the Convertible Bonds allow the Company, upon the conversion of the bonds, to either deliver new shares or existing shares or pay a cash alternative amount.
In order to mitigate dilution for existing shareholders upon conversion of the Convertible Bonds, the Board of Directors intends where possible, to repay the principal amount of the Convertible Bonds in cash and, if the then prevailing share price is above the conversion price, pay the upside in existing shares of the Company. The conversion of the Convertible Bonds would then have no dilutive effect for existing shareholders.
Furthermore, the terms of the Convertible Bonds allow the Company to redeem the bonds at their principal amount together with accrued and unpaid interest in certain circumstances, for example on or after 30 June 2019, if the Company’s shares trade at a price higher than 130% of the conversion price during a certain period.
The total number of outstanding subscription rights under the Stock Option Plan 2005-2009 and convertible into Bekaert shares is 173 570. In 2019, no subscription rights were exercised under the Stock Option Plan 2005-2009.
On 31 December 2018, the Company held 3 902 032 treasury shares. Of these 3 902 032 treasury shares, 13 787 shares were transferred to the Chairman of the Board of Directors as part of his fixed remuneration and 13 670 shares were transferred to members of the BGE pursuant to the Company share-matching plan. In addition, 1 500 stock options were exercised under the Stock Option Plan 2015-2017 and 1 500 treasury shares were used for that purpose. The Company did not purchase any shares in the course of 2019 and no treasury shares were cancelled. As a result, the Company held an aggregate 3 873 075 treasury shares on 31 December 2019.
A first grant of 178 233 equity settled performance share units under the Performance Share Plan 2018-2020 was made on 15 February 2019. In addition, a mid-year grant of 35 663 performance share units was made on 26 July 2019 under the Performance Share Plan 2018-2020. Each performance share unit entitles the beneficiary to acquire one performance share subject to the conditions of the Performance Share Plan 2018-2020.
These performance share units will vest following a vesting period of three years, conditional to the achievement of a preset performance target. The precise vesting level of the performance share units will depend upon the actual achievement level of the vesting criterion, with no vesting at all if the actual performance is below the defined minimum threshold. Upon achievement of said threshold, there will be a minimum vesting of 50% of the granted performance share units; full achievement of the agreed vesting criterion will lead to a par vesting of 100% of the granted performance share units, whereas there will be a maximum vesting of 300% of the granted performance share units if the actual performance is at or above an agreed ceiling level.
Detailed information about capital, shares, stock option plans and performance share plans is given in the Financial Review (Note 6.12 to the consolidated financial statements).
The Board of Directors will propose that the Annual General Meeting to be held on 13 May 2020 approve the distribution of a gross dividend of € 0.70 per share, unchanged from last year.
The Board reconfirms the Dividend Policy which foresees, insofar as the profit permits, a stable or growing dividend while maintaining an adequate level of cash flow in the Company for investment and self-financing in support of growth. Over the longer term, the Company strives for a pay-out ratio of 40% of the result for the period attributable to equity holders of Bekaert.
|Total gross dividend||0.850||0.900||1.100||1.100||0.700||0.700|
(1)The dividend is subject to approval by the General Meeting of Shareholders 2020.
(2)Subject to the applicable tax legislation.
ADDENDUM: The Board of Directors has decided, during its meeting held on 2 April 2020, to propose to the Annual General Meeting of 13 May 2020, to pay a gross dividend of € 0.35, half the initially announced € 0.70, and to postpone the payment from 18 May 2020 to 20 November 2020. Subject to the applicable tax legislation, a total gross dividend of € 0.35 would result in a net dividend of € 0.245.
The Annual General Meeting was held on 8 May 2019. An Extraordinary General Meeting was held on the same day. A second Extraordinary General Meeting was held on 3 July 2019. The resolutions of the meetings are available at www.bekaert.com.
Bekaert is committed to providing transparent financial information to all shareholders.
All shareholders can count on access to information and on our commitment to share relevant updates on market evolutions, performance progress and other relevant information. All such updates can be found online in the investors section of the website and are presented live in meetings with analysts, shareholders, and investors. The calendar of investor relations conferences, roadshows and group visits to our premises is published on our website.
On Friday 15 November 2019, Bekaert hosted a Capital Markets Day at its headquarters in Zwevegem, Belgium. Such event is organized to provide financial stakeholders the opportunity to meet the executive management of the company, get more information on the company in general, and an update on the strategy.
The event comprised a series of presentations by Bekaert’s Executive Management providing insights on performance, outlook and strategy. 16 analysts and fund/portfolio managers attended the live meeting. The Capital Markets event coincided with the day of Bekaert’s third quarter trading update.
The Articles of Association contain no restrictions on the transfer of Company shares, except in the case of a change of control, for which the prior approval of the Board of Directors has to be requested in accordance with Article 11 of the Articles of Association.
Subject to the foregoing, the shares are freely transferable.
The Board is not aware of any restrictions imposed by law on the transfer of shares by any shareholder.
According to the Articles of Association, each share entitles the holder to one vote. The Articles of Association contain no restrictions on the voting rights, and each shareholder can exercise his voting rights provided he was validly admitted to the General Meeting and his rights had not been suspended. The admission rules to the General Meeting are laid down in the new Code on Companies and Associations and in the Articles of Association. Pursuant to the Articles of Association, the Company is entitled to suspend the exercise of rights attaching to securities belonging to several owners.
No person can vote at General Meetings of Shareholders using voting rights attaching to securities that had not been timely reported in accordance with the law.
The Board is not aware of any other restrictions imposed by law on the exercise of voting rights.
The Board of Directors is not aware of any agreements among shareholders that may result in restrictions on the transfer of securities or the exercise of voting rights.
The Articles of Association and the Bekaert Corporate Governance Charter contain specific rules concerning the (re)appointment, induction and evaluation of Directors.
Directors are appointed for a term not exceeding four years by the General Meeting of Shareholders, which can also dismiss them at any time. An appointment or dismissal requires a simple majority of votes. The candidates for the office of Director who have not previously held that position in the Company must inform the Board of Directors of their candidacy at least two months before the Annual General Meeting.
Only if and when a position of Director prematurely becomes vacant, can the remaining Directors appoint (co-opt) a new Director. In such a case, the next General Meeting will make the definitive appointment.
The appointment process for Directors is led by Chairman and the Nomination and Remuneration Committee, which submits a reasoned recommendation to the full Board. On the basis of such recommendation, the Board decides which candidates will be nominated to the General Meeting for appointment. Directors can, as a rule, be reappointed for an indefinite number of terms, provided they are at least 30 and at most 66 years of age at the moment of their initial appointment and they have to resign in the year in which they reach the age of 69.
The Articles of Association can be amended by an Extraordinary General Meeting in accordance with the new Code on Companies and Associations. Each amendment to the Articles requires a quorum of at least 50% of the share capital (if the quorum is not met, a second meeting with the same agenda should be called, for which no quorum requirement applies) and a qualified majority of 75% of the votes cast at the meeting (a majority of 80% applies for changes to the corporate purpose and the transformation of the legal form of the company).
The Board of Directors is authorized by Article 44 of the Articles of Association to increase the registered capital in one or more times by a maximum amount of € 176 000 000. The authority is valid for five years from 20 June 2016, but can be extended by the General Meeting.
Within the framework of that authority the Board can also, during a period of three years from 14 June 2018, increase the registered capital, upon receipt by the Company of a notice from the FSMA of a public takeover bid, and provided that:
This authority can also be extended by the General Meeting.
The Board of Directors is authorized by Article 12 of the Articles of Association to acquire a maximum number of own shares that, in the aggregate, represent no more than 20% of the issued capital, during a period of five years from 20 June 2016 (that can be extended by the General Meeting), at a price ranging between minimum € 1.00 and maximum 30% above the arithmetic average of the closing price of the Bekaert share during the last thirty trading days preceding the Board’s resolution to acquire. The Board is authorized to cancel all or part of the purchased shares during such five-year period.
The Board is also authorized by Article 12 of the Articles of Association to acquire own shares, if required to prevent a threatened serious harm to the Company, including a public takeover bid. Such authority is granted for a period of three years from 5 September 2019 and can be extended by the General Meeting.
Articles 12bis and 12ter of the current Articles of Association provide rules for the disposal of purchased shares and for the acquisition and disposal of Company shares by subsidiaries.
The Board of Directors will propose to the Extraordinary General Meeting of Shareholders of 26 March 2020 (or of 13 May 2020 should the required quorum not be reached on 26 March 2020) the renewal of the above authorities as part of the amendment of the Articles of Association.
The powers of the Board of Directors are more fully described in the applicable legal provisions, the Articles of Association and the Bekaert Corporate Governance Charter.
The Company is a party to a number of significant agreements that take effect, alter or terminate upon a change of control of the Company following a public takeover bid or otherwise.
To the extent that those agreements grant rights to third parties that affect the assets of the Company or that give rise to a debt or an obligation of the Company, those rights were granted by the Special General Meetings held on 13 April 2006, 16 April 2008, 15 April 2009, 14 April 2010 and 7 April 2011 and by the Annual General Meetings held on 9 May 2012, 8 May 2013, 14 May 2014, 13 May 2015, 11 May 2016, 10 May 2017, 9 May 2018 and 8 May 2019 in accordance with Article 556 of the former Companies Code; the minutes of those meetings were filed with the Registry of the Commercial Court of Gent, division Kortrijk on 14 April 2006, 18 April 2008, 17 April 2009, 16 April 2010, 15 April 2011, 30 May 2012, 23 May 2013, 20 June 2014, 19 May 2015, 18 May 2016, 2 June 2017, 7 February 2019 and 23 May 2019 respectively and are available at www.bekaert.com.
Most agreements are joint venture contracts (describing the relationship between the parties in the context of a joint venture company), contracts whereby financial institutions, retail investors or other investors commit funds to the Company or one of its subsidiaries, and contracts for the supply of products or services by or to the Company. Each of those contracts contains clauses that, in the case of a change of control of the Company, entitle the other party, in certain cases and under certain conditions, to terminate the contract prematurely and, in the case of financial contracts, also to demand early repayment of the loan funds. The joint venture contracts provide that, in the case of a change of control of the Company, the other party can acquire the Company’s shareholding in the joint venture (except for the Chinese joint ventures, where the parties have to agree whether one of them will continue the joint venture on its own, whereupon that party has to purchase the other party’s shareholding), whereby the value for the transfer of the shareholding is determined in accordance with contractual formulas that aim to ensure a transfer at an arm’s length price.