Experience. Our greatest asset. Annual Report 2018 Groupe Bruxelles Lambert 2 GBL Annual Report 2018 Groupe Bruxelles Lambert (“GBL”) is an established investment holding company, with over sixty years of stock exchange listing, a net asset value of EUR 16 billion and a market capitalisation of EUR 12 billion at the end of 2018. GBL is a leading investor in Europe, focused on long-term value creation and relying on a stable and supportive family shareholder base. GBL strives to maintain a diversifi ed high-quality portfolio composed of global companies, leaders in their sector, in which it can contribute to value creation by being an active professional investor. GBL seeks to provide attractive returns to its shareholders through a combination of asustainable dividend and growth in its netassetvalue. GBL Annual Report 2018 3 Key shareholder information 6 Financial calendar A tribute to Albert Frère • April 23, 2019: Ordinary General Meeting 2019 8 • May 8, 2019: Results as of March 31, 2019 Message from the Chairman of the • July 31, 2019: Half-year 2019 results Board of Directors • October 31, 2019: Results as of September 30, 2019 10 Interview with Ian Gallienne and • March 2020: Annual Results 2019 Gérard Lamarche, co-CEOs of GBL • April 28, 2020: Ordinary General Meeting 2020 14 Strategy Note: some of the above-mentioned dates depend on the dates 20 of the Board of Directors and are thus subject to change. Net asset value 23 Portfolio review Ordinary General Meeting Shareholders are invited to attend the Ordinary General 54 Environmental, social and Shareholders’ Meeting to be held on Tuesday April 23, 2019 at governance (ESG) responsibility 3 pm at the registered offi ce, avenue Marnix 24, 1000 Brussels. 68 Risk management 76 Proposed dividend GBL share The proposed dividend distribution for the 2018 fi nancial year of 80 a gross amount of EUR 3.07 per GBL share, will be submitted Economic presentation of the for approval to the Ordinary General Meeting on April 23, 2019. consolidated result and the This dividend is equal to EUR 2.149 net per share (after a 30% fi nancial position withholding tax). 89 Accounts as of December 31, 2018 Gross dividend per share: EUR 3.07 (+ 2.3%) 160 Corporate Governance Total amount: EUR 495.4 millions 195 Coupon n° 21 Glossary 197 April 30, 2019: Ex-dividend date of coupon n° 21 Inside Responsible persons back cover May 2, 2019: Record date of the positions eligible For further information for coupon n° 21 May 3, 2019: Payment date of coupon n° 21 The dividend will be payable as from May 3, 2019, either by bank transfer to registered shareholders or by transfer to the bank account of the owner of the dematerialized shares. The fi nancial service is provided by ING Belgium bank (System Paying Agent). Investor relations Additional information can be found on our website (www.gbl.be), among which: • Historical information on GBL • Annual and half-yearly reports as well as press releases in relation to quarterly results • Net asset value on a weekly basis • Our press releases • Our investments Online registration in order to receive investor information (notifi cations of publication, press releases, etc) is available on our website. Investor relations: Sophie Gallaire [email protected] Tel.: +32 2 289 17 70 4 GBL Annual Report 2018 Our commitment to investors Solid core values GBL’s strategic objective Patrimonial is to continue to deliver GBL is a long-term, through-the-cycle investor deploying permanent capital in its portfolio companies while keeping a conservative approach towards net fi nancial a total shareholder leverage, in order to maintain a solid fi nancial structure. return outperforming GBL has a solid and stable family shareholder base and is supported by the the reference index over partnership between the Frère and Desmarais families. Active & Engaged the long term through GBL believes in the importance of its infl uence and role as a creative, challenging share price performance and supportive board member. GBL aims at unlocking long-term and sustainable value through its involvement in the key decision-making governance bodies of and continuous dividend its portfolio companies notably regarding their overall strategy, the nomination growth throughout and remuneration of their Executive Management and their capital allocation. Focused thecycle. GBL’s team sources a sizeable deal fl ow but selects and oversees a limited The group strives to develop a quality number of core investments that are primarily listed and within a well-defi ned portfolio focused on a targeted number of geographical and sectoral scope. companies that are leaders in their market A team of about 20 professionals specialised in investment, including in-house and in which it can play an active role as fi nancial, legal and tax experts, support the portfolio’s development based on a professional shareholder over the long strict asset rotation criteria. term. GBL invests and divests depending on companies’ development and Flexible mandate market opportunities in order to achieve GBL’s mandate is broad and fl exible, allowing investment decisions ranging its objective of value creation, while from EUR 250 million up to EUR 2 billion. GBL’s model is built on substantial maintaining a solid fi nancial structure. ownership, in public or private companies, with majority stakes or minority positions with infl uence. GBL’s dividend policy seeks to maintain an appropriate balance between GBL has an increasing exposure to alternative investments through providing an attractive yield and achieving Sienna Capital as well as demonstrated co-investment capabilities. growth of its stock price over the long term. Our investment case As of December 31, 2018 Access to a diversifi ed portfolio of 0.9% Other 8.2% Sienna Capital 1.1% Parques Reunidos high-quality assets and valuable alternative unlisted investments 1.8% Ontex 2.1% GEA 17.2% adidas 4.5% Total EUR At a discount to net asset value 16.7 9.1% Umicore billion 17.1% Pernod Ricard portfolio Solid TSR performance over 10.8% Imerys value the long term 14.9% SGS Dividend yield exceeding the 12.3% LafargeHolcim portfolio’s weighted average Supported by GBL’s operational Five-year Dividend Discount to excellence in terms of: annualized TSR yield net asset value • Financial structure • Governance • Cost effi ciency • Yield enhancement 6.3% 4.0% 24.2% vs. 2.7% for our reference index For more information please refer to the Strategy section GBL Annual Report 2018 5 Messages Strategy Portfolio Risk Share Key highlights for 2018 Net asset value of Cash earnings of Liquidity profi le of EUR 16.2 EUR 456 EUR 2.5 billion million billion at year-end 2018 value Net asset Listed investments Share buyback Authorisation to Disposal on May 9, 2018 Completion by Imerys + EUR + EUR purchase up to 214 million of 6.6% of the on October 11, 2018 228 million EUR to reach a capital of Burberry of the sale of its to reach a 250 million roofi ng division for 17.7% stake 8.5% stake of treasury shares an enterprise ESG Disposal proceeds and value of capital gain of approximately GBP 498 million EUR 1 billion to an affi liate of and GBP 83 million Lone Star Funds respectively Sienna Capital Financing First co-investment transaction Institutional bond placement Investment through Sienna Capital, alongside funds affi liated • Placement in June 2018 of a EUR 500 million institutional with the investment fi rm KKR, of EUR 250 million in Upfi eld, bond, with a coupon of 1.875% and a 7-year maturity Unilever’s spreads business • Issuance oversubscribed more than 2.5 times by a diversifi ed institutional investor base presentation Economic • Success of this placement illustrating the market’s confi dence in GBL’s creditworthiness • Disposal of Alvest Group, Kiloutou and Délices des Convertible bond 7 Vallées, generating a net capital gain of EUR 99 million, • Maturity on October 9, 2018 of the convertible bonds issued GBL’s share for an amount of EUR 450 million on September 27, 2013 Accounts • Acquisition of a majority stake in Climater • Ahead of maturity, early conversion requests received for 81% of the convertible bonds • Gain on the disposals of treasury shares in relation to the conversion of bonds whose settlement was carried out • Acquisition of svt (with consecutive build-up on Rolf Kuhn), through share deliveries amounting to EUR 195 million Beltaste-Vanreusel and Indo Governance Corporate For more information please refer to the sections Portfolio review and Economic presentation of the consolidated result and the fi nancial position 6 GBL Annual Report 2018 Albert Frère left us on December 3, two months before he would have celebrated his rd 93 birthday. He passed away in Gerpinnes, in the countryside where he was born and to which he remained profoundly attached. Like Molière, he remained active, well informed about all things up until his last breath. Albert Frère 1926 - 2018 GBL Annual Report 2018 7 In 1982, at the head of a consortium of industrialists and Baron Frère held honors from several countries distinguishing fi nanciers, he became the CEO of Groupe Bruxelles Lambert. his merits and, beyond Belgium, it is Europe that recognized The Board entrusted him with the Chairmanship several years him as a great leader, making not only his family, but also the later and he then propelled the group to reshape itself and group and all his colleagues proud of him. ultimately play a leading role in European capitalism. He did not seek recognition, but knew how to receive it without From the strength of his experiences as a merchant, industrialist any pride or vanity.