On Saturday 24th of March, it was D-day again for investors in Flanders. VFB organized his congress in the Kinepolis in Antwerp. Around 1500 investors attended this conference. The conference could welcome more than 30 CEOs of Belgian stock listed companies.

Here is the program of the companies that were presenting their company strategy, financials and products. Happening Programma

This year there was also a Real Estate Corner where Belgian REITs presented their investment strategy and future outlook. Take a look at the list in the PDF document.

Standenlijst en Programma ImmoCorner VFB-Happening 2018

So with this full agenda in my hand, and after an 8 hour night flight coming from New York, we arrived around 10.15 at the conference and missed the opening.

I had two main objectives for visiting this event.

Attend company presentations (and workshops if possible)
Visit the different booths of the companies, software vendors, banks, magazines, ….

Find below our report of the day and What did we learn? I attended 3 company presentations, the presentation How to invest for students and the closing day presentation of JP Morgan.

1. Company Presentations

Ageas – CEO Bart De Smet

CEO De Smet explains the transformation journey from 2009 towards 2018. Since 2015 the company had been preparing for the future after cleaning up the past. In 2018 a new growth strategy will be presented. Ageas is an international group with a focus on Europe and Asia. Focus countries are UK, Portugal, China, France and Belgium.

The products diversification and split is 70% in life insurances and 30% in damage claims. In Asia it is 90% life insurances. Nr 6 in China. The split is different in Europe. CAGR is 12%. Disciplined cash upstream from operating companies covers dividend and holding costs. The cash dividend 2018 of 2,10 Euro up 24%.Dividend payout between 40 – 50%. 2,1 Euro dividend is starting base for future dividend payouts.

What is the Ambition and strategy in 2018? What choices will be made? There are 4 trends (see presentation below) The Financial targets have been reached except one.

1,8 billion cash is available. 900 million can be used for investments or acquisitions. Part of the money is available for the Fortis settlement. The M&A strategy is focused on growth markets such as Indonesia or solid markets as Belgium and Portugal.

BNP Paribas is 25% shareholder of Ageas. BNP has a put option to exercise this 25% stake. There is also a distribution agreement of products between BPN Paribas and Ageas. There are 3 possible scenarios for end of June.

Keep 25% shareholder stake + distribution agreement
Divest 25% shareholder + keep distribution agreement
Break apart
Stop distribution + keep shareholder stake seems impossible

Fortis settlement – Progress in solving legal legacies.

Promises will be kept. Additional 100 million will bring total available budget to Euro 1,3 bn. Aiming to address major concerns of the Court. Settlement between Ageas & claimants organizations. Main opposing parties are Modrikamen and Patrinvest. Now 97 % of the parties are supporting the settlement. The court will decide. All the compensation numbers have been increased. The extra 100 million is added to formerly non-active shareholders. After 10 years it is time to close this case…

An indicative timeline has been presented to Court and is now subject to Court approval & administrative process. Hopefully a final ruling will be made before the summer. During the opt-out period, early filers can already receive 70% of their compensation. This settlement case has not hindered the growth strategy of the Ageas company and the sales of products towards customers.

Mithra

Mithra wants to be an expert for women’s health. The presentation explained the product strategy of Estelle – phase 3 and Donesta. 2 potential blockbusters.

Mithra built also expertise in Complex Therapeutics. They built a state of the art CDMO for R&D and Production. The product Estelle has a potential market of 22 billion.

The Growth Strategy is to build partnerships with specialists in Women’s Health.

Financials : Revenue doubled thanks to Benelux sales. Marc Coucke owns 17,89%. Licence revenue comes from Fuji – (Donesta) Mayne (myring) & Libbs (Estelle) Free float : less than 30%. Multiple milestones and product launches will occur at short and midterm timeframe.

The analyst Frank De Mol states that the company has 36 million cash position. Worst case : Donesta does not perform. The answer is that “Mithra is not one product company…” Results of phase 2 of Donesta will provide answers. Estelle in Q3

Sipef – CEO Francois Van Hoydonck

Sven Sterckx introduces Sipef, a sustainable growth company. SIPEF GROUP – palm oil in the world

Palm oil is qualitative product that needs to be sustainable. Palm Oil is a commodity. Rubber is cyclical business – tire industry

Countries of production are: Indonesia, PNG (Papoea New Guinea), Ivory Coast (banans). 22.000 employees – 78k hectare. Palm oil is 89% produced in Indonesia. Agricultural land per capita decreases. Disposable income growth in developing countries.

2017 : 220 million tons compared to 93 million in 94/95. Palm oil : 31% simply to be used in industry and long shelf life. Indonesia & Malaysia count for world production. 65% consumption in Asia and Middle East

Palm oil is also used in Biodiesel. 35 million ton (2017) 31% is coming from palm oil (11 ton)

Palm oil, soya oil and rapeseed oil prices are fluctuating with similar patterns. SIPEF is 100% certified and >350k tons segregated. The Growth and Expansion strategy is to grow the production land and output.

In 2022 everything is planted. From 2022 production will grow exponentially. (from 140 to 220%) driving the profits higher. SIPEF has a 30% dividend payout and pays a nice 1,6 Euro per share.

Vincent Juvyns, Global Market Strategist, J.P. Morgan

Is the Sky the limit? The title of the presentation was done in January. Should the title now be “When will we hit the bottom?” How things can change in few months…

Macroeconomic view

World economy

Trump decision for Tax reform offers an opportunity to keep the economy going. Companies have more potential to invest in employees and new growth investments.

J.P. Morgan remains positive for US economy for 2018. Trade wars could interrupt but this is part of US negotiations tactics. Inflation is picking up. More in developed countries than in emerging countries.

Growth worldwide will push the company profits much higher.

Bonds markets

Bonds have increased the past 30 years. 100 billion. Historic low value. This will change ! If interest rates will increase to 4 or 4,5% quickly, then there will be a serious problem. The economy and markets are not ready for these hikes. The time for free money is over.

What are the consequences ? All returns of currents bonds are negative today.

Stock markets offer good upward potential, profits not P/E ratios

New reality! Too fast too quickly. Historic highs make investors nervous. A correction is always possible but the conditions are currently not present. A recession does not seem to be on the horizon. But we need to accept the volatility. S&P 500 -3% today. Current valuations are okay and normal.

Should we buy the dip? Stay invested resulted in 4% for 10k. Should we look at the P/E ratios? Nothing is cheap today and you buy at 5 years averages today. Most positive about the US today. In Europe profit growth of 10% is expected. Profit growth is most important.

Higher interest rates are today not yet a threat. Where are the opportunities ?

Banks can profit from higher interest rates. 1% interest rate hike ->2,3 Billion revenue for JP Morgan

Interest rates can be a major boost for banks.

Technology will remain hot topic. AI will have more and more use cases. China will take 30,3% in the MSCI EM Index. This stake will grow to 40%.

Current Asset allocation & positioning

J.P. Morgan remains positive for Stock Markets. Opportunities in Japan and Robotics. Emerging markets are worth investing. Don’t invest in European bonds.

2. Start with Stock Investing

One workshop of Patrick Verelst attracted a full room of students and starting investors. Students could learn about the wonder of compound interest, some key rules how to invest in the stock market and how to start with a portfolio.

A balanced portfolio exists of holdings and dividend paying stocks end ETFs. Take a look at a model portfolio at the VFB website.

3. Our visit to the booths

3.1 Real Estate Bevaks

Several real estate companies active in different sectors were again present at the VFB Happening. This time they were grouped in a Real Estate corner and they also had a 10 minute presentation slot during the day. Find the presentations below

If you want an overview of Belgian real estate, you can find it on the public site of analyst Gert De Mesure.

3.2 Options investing with an edge – Beursbubbels – Jacky De Donder

During the last VFB Technical Analysis Day, we attended the presentation of Jacky De Donder. This time we did meet Jacky and learned about his investment magazine. We also took a subscription to try it out. Check the URL www.beursbubbels.be

Last but not least, you could find software vendors such as Transstock,Excelco and VectorVest.

3.3 Books

The VFB conference is always interesting to discover new books. During one of the VFB events, we purchased the book “Beleggen voor (je) kinderen” written by Wilfried Voorspoels. Wilfried was also present at the Happening. You can read our book review on the following link.

We did not purchase any book this time.

4. Final Conclusion

The VFB Happening is a must for Belgian investors who want to learn about Belgian companies working hard and competing in a global economy.You can learn about the company itself, their growth strategy, their financial performance and their products. The fact that many CEOs came to this event to talk to the retail investor, is fantastic for the investing community, especially in times where the government discourages investing in the stock market with more and higher taxes. Stock market transaction increased to 0,35% PER transaction and the new securities tax (speculation tax 2.0 I call it) is very discriminating.

During this investors event there were many company presentations to give the investor full insight why you should invest in that company. This year there was the REIT Corner where the CEOs of Real Estate investment companies presented their investment strategies. This was a new concept and very appreciated by the visitors. After 24 hours being awake, I drove home with new macroeconomic knowledge, key learnings of companies I am interested to invest in, and the feeling it was worth it.

I will be back next year ! Thanks for reading until the end! Don’t hesitate to leave a comment if you did like this blog post.

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