Quarterly Letter 31/12/2025

Dear co-investors,

We wish you and your loved ones a healthy and prosperous year!

The last quarter of 2025 was marked by a continuation of the positive sentiment that dominated most of the year. In both the United States and Europe, stock markets ended the year at strong levels, supported by declining inflation and continued strong profitability among large companies, particularly in the technology sector. For European investors who invested in US stocks, the 11.85% decline in the dollar against the euro did throw a spanner in the works.

On average, we see normal valuations for profitable and growing companies among the companies in our portfolios. In Europe, the positive effect of the large investments in infrastructure in Germany should be felt in the course of 2026. In America, further interest rate cuts are expected, which could give oxygen to the markets. On the other hand, questions arise about the enormous expenditure on AI developments and how these can be recouped through sufficiently high revenues. Time will tell.

As always, we will continue to focus on attractive valuations and diversify across sectors and countries.

Internally, we also pay a lot of attention to the so-called “combined ratio”. By this, we mean the sum of, on the one hand, the dividend that our companies pay and, on the other hand, the percentage of their own shares that they purchase and destroy. These are things that help support the stock price.

Capital gains tax

Many of you asked us questions about capital gains tax. The bill was introduced in the House in December and is likely to be approved in the spring. However, it is already applicable as of 1 January 2026.

We will briefly list a few important things:

• The rate is 10%.
• It applies to all kinds of investments, including funds, branch 23 insurance, gold and foreign exchange.
• It is a tax applicable to individuals living in Belgium and to non-profit organizations and foundations, unless they are recognized for tax-deductible donations.
• There is no retroactive effect. The added value that was accrued before 31/12/2025 remains unaffected.
• In the case of split ownership, the naked owners must pay the tax.
• The tax only applies when selling. So not with inheritances and donations. However, if the heir or beneficiary later sells the investment, capital gains tax will be levied on the capital gain at the original purchase price or against the value on 31/12/2025 if the investment was purchased before this date.
• Every year, you can achieve up to €10,000 in added value without tax. This therefore provides a tax benefit of a maximum of €1000.
• No doubt there will still be a lot of ink about this and we will follow closely how this tax will work in practice.

We would also like to mention that our team of financial analysts and fund managers was strengthened by Emiel Beirens. He joined the team in November. Emiel is a Commercial Engineer specializing in Finance and has worked at Rothschild & Co in Brussels for the past two years.

As usual, we end with the service announcements. There is only one date set for the first quarter of 2026, but things could be added:

Saturday, March 21, at 2 pm at NOA Outdoor Living, Polydore Rensonstraat 8, 9770 Kruisem: our annual Investor Meeting

A formal invitation will follow, but in any case, all investors in our funds are welcome. Highly recommended!

We look forward to meeting you at one of our events or in a personal conversation.

In the meantime, be sure to stay up to date by following us via our LinkedIn page: https://www.linkedin.com/company/value-square/.

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Best regards,

Pascal Cornelis - Kris Hermie - Patrick Millecam - Cynthia Peeters - Tibo Dewispelaere - Astrid Verlot - Pauline Verhelst - Dieter Engels - Thomas Maes - Jens De Maeseneire - Koen Van de Vyver - Jens Verbrugge - Petrick Step - Wouter Verlinden - Wim Descamps - Emiel Beirens - Koen Hoffman