Building leading companies through long-term engaged and responsible ownership Groupe Bruxelles Lambert Annual Report 2019 2 GBL Annual Report 2019 Groupe Bruxelles Lambert (“GBL”) is an established investment holding company, with over sixty years of stock exchange listing, a net asset value of EUR 20 billion and a market capitalization of EUR 15 billion at the end of 2019. GBL is a leading investor in Europe, focused on long-term and sustainable value creation and relying on a stable and supportive family shareholder base. GBL strives to maintain a diversified high-quality portfolio composed of global companies, leaders in their sector, in which it can contribute to value creation by being an engaged professional investor. GBL seeks to provide attractive returns to its shareholders through a combination of a sustainable dividend and growth in its net asset value. 3 GBL Annual Report 2019 Contents 6 Message from Paul Desmarais, Jr., Chairman of the Board of Directors of GBL 8 Message of Ian Gallienne, CEO of GBL 12 Strategy 20 Net asset value 22 Portfolio review 60 Sustainability report (ESG) 80 Risk management 88 GBL share 94 Economic presentation of the consolidated result and the financial position 102 Accounts as of December 31, 2019 176 Corporate Governance 207 Glossary 209 Responsible persons Inside back For further information cover Key information for shareholders Financial calendar Investor relations • April 28, 2020: Extraordinary General Meeting 2020 Additional information can be found on our • April 28, 2020: Ordinary General Meeting 2020 website (www.gbl.be), among which: • May 6, 2020: Results as of March 31, 2020 • Historical information on GBL • July 30, 2020: Half-year 2020 results • Annual and half-yearly reports as well • November 4, 2020: Results as of September 30, 2020 as press releases in relation to quarterly • March 2021: Annual Results 2020 results • April 27, 2021: Ordinary General Meeting 2021 • Net asset value on a weekly basis Note: some of the above-mentioned dates depend on the dates • Our press releases of the Board of Directors and are thus subject to change • Our investments Extraordinary General Meeting Shareholders are invited to attend the Extraordinary General Shareholders’ Online registration in order to receive investor Meeting to be held on Tuesday April 28, 2020 at 2 pm at the registered office, information (notifications of publication, press avenue Marnix 24, 1000 Brussels. releases, etc) is available on our website. Ordinary General Meeting Shareholders are invited to attend the Ordinary General Shareholders’ Meeting to be held on Tuesday April 28, 2020 at 3 pm at the registered office, avenue Marnix 24, 1000 Brussels. Proposed dividend The proposed dividend distribution for the 2019 financial year of a gross amount of EUR 3.15 per GBL share, will be submitted for approval to the Ordinary General Meeting on April 28, 2020. This dividend is equal to EUR 2.205 net per share (after a 30% withholding tax). Coupon n° 22 Gross dividend per share: EUR 3.15 (+ 2.6%) Total amount: EUR 508.3 million Net dividend: EUR 2.205 May 5, 2020: Ex-dividend date May 6, 2020: Record date of the positions eligible May 7, 2020: Payment date The dividend will be payable as from May 7, 2020, either by bank transfer to Investor relations: Sophie Gallaire registered shareholders or by transfer to the bank account of the owner of the [email protected] dematerialized shares. The financial service is provided by ING Belgium bank Tel.: +32 2 289 17 70 (System Paying Agent). 44 GBLGBL Annual Annual Report Report 2019 2019 Our commitment to investors Solid core values GBL’s purpose is to build sustainable leading Long term & patrimonial companies through long-term engaged and We consistently take a long-term approach to our investments. We responsible ownership. look to invest in high-quality businesses with strong and sustainable We strive to invest in and support European industry market positions and offering long-term growth potential. We seek to leaders with strong market positions and exposure to maintain strong financial discipline and flexibility, and benefit from our positive global long-term trends. As an engaged owner, family DNA and shareholder base, through the partnership between we partner with our portfolio companies and their the Frère and Desmarais families. management teams to create value over the long term for all stakeholders in a sustainable manner. Engaged & supportive We act as an engaged and accountable owner and aim at partnering GBL’s strategic objective is to create value with our portfolio companies and their management teams to support over the long term through continuous and them in their long-term growth and development. We look for efficient sustainable growth of our intrinsic value governance with aligned interests and aim at driving value through and dividend distribution. engaged and supportive board participation. We aim at delivering an annualized Total Shareholder Return (TSR) outperforming our reference index, the Performance-driven & disciplined Stoxx Europe 50, over the long term through the increase We pursue long-term value creation and seek double-digit Total in the net asset value and an attractive dividend yield. Shareholder Returns throughout cycles. With our expertise and rigor, we set ambitious standards and strive for excellence and discipline in the deployment of our asset rotation strategy. Transparent & responsible We believe that business performance cannot be achieved over the long term without integrity, sense of responsibility and transparency. We embrace our responsibility to create sustainable and shared value for all stakeholders’ benefit. GBL’s investment case offers an attractive risk-reward Diversified & Solid track record of returns resilient portfolio to shareholders Portfolio composed of high quality investments with TSR (1) outperforming by 326bps the 12.0% upside potential reference Stoxx Europe 50 index vs. 8.7% • Global companies, primarily Investment Grade, in which GBL contributes to unlocking value through its involvement Attractive dividend policy as an engaged and responsible investor and yield (1) 3.4% • Valuable alternative assets through Sienna Capital Discount to NAV (1) evolving in a tight range (21 to 27% (2)) 25.5% As of December 31, 2019 Lean cost structure (measured as 0.6% Other 8.7% Sienna Capital operating expenses (3) to NAV (2)) with any 1.1% Parques Reunidos 19bps € material tax leakage 1.5% Ontex 19.2% adidas 2.2% GEA 3.9% Total 4.2% Webhelp EUR Ability to seize new quality investment 20.6 7.8% Imerys opportunities billion 15.4% Pernod Ricard Portfolio value EUR 19 billion 9.3% Umicore Active asset rotation Transactions carried out since the initiation of our new strategy in 2012 11.2% LafargeHolcim 15.0% SGS EUR 4.0 billion Solid financial Significant available liquidity position 3.7% Loan To Value Ability to move quickly Sound governance Management remuneration (1) TSR, dividend yield and discount to NAV as of December 31, 2019, with TSR aligned with shareholders’ interests on an annualized basis with reinvested dividends, as from year-end 2011 (2) Over the last 3 years (3) As presented in the cash earnings For more information please refer to the Strategy section GBL Annual Report 2019 5 Messages Key highlights for 2019 Net asset value of Active asset rotation of Liquidity profile of Cash earnings of EUR 20.3 EUR 3.5 EUR 4.0 EUR 595 Strategy billion billion billion million at year-end 2019 in 2019 at year-end 2019 at year-end 2019 Monetization of assets, enabling GBL to derisk its portfolio and value Net asset to reinforce its financial flexibility to seize investment opportunities • Finalization of the exit from the energy • Disposal of 1.03% of the capital of • Disposal of 1.7% of the capital of Portfolio sector initiated in 2013 adidas, for a total amount of LafargeHolcim, for a total amount of • Disposal of 0.6% of the capital of Total EUR 499 million EUR 499 million through prepaid forward sales maturing • Capital gain of EUR 333 million (1) • Capital gain of EUR 106 million (1) in January 2020 for a total amount of • Residual stake of 6.8% of the capital of • Residual stake of 7.6% of the capital of EUR 771 million adidas LafargeHolcim • Capital gain of EUR 411 million (1) ESG Increased exposure to private and alternative assets Risks • T ransaction closing on November 19, 2019 • Voluntary takeover bid successfully • Net asset value reaching EUR 1.8 billion • Investment of EUR 0.9 billion for closed in September 2019 with a as of December 31, 2019, an ownership of 65% of the capital of delisting effective in December 2019 i.e. 9% of GBL’s net asset value Webhelp, European leader in the Customer • 23% indirect ownership, • New commitments for a total amount Share Relationship Management - Business alongside EQT AB and of EUR 403 million, including Process Outsourcing (CRM-BPO) space Corporación Financiera Alba EUR 199 million deployed into • Ambition, together with the co-founders • Take-private transaction aiming at two additional external fund managers, and the high-quality management team, to accelerating the implementation of the i.e. Marcho Partners specialized in support the group in its transition from a value creation strategy within the group innovation and technology, and European player to a global leader Carlyle International Energy Partners II focused on the energy sector presentation Economic For more information please refer to the Sienna Capital section Reinforcement of our ESG approach GRI