Value Creation Awards 2011-2021

Every year since 2007, Value Square has calculated the fundamental value creation over the past ten years of all Belgian companies, which have also been listed on the stock market for at least ten years. Their performance is compared to that of Berkshire Hathaway, Warren Buffett's investment vehicle. Over the period from late 1964 to the end of 2021 — Buffett was able to increase the book value of his holding company by an astronomical rate of 1,762,634% (in USD), or 18.71% per year, for 57 years. He more than beat the S&P 500 return index, which “only” rose by 30,209%, yielding a return of 10.5% per year. Since 1964, Berkshire Hathaway's share price has risen by 3,641,613%, or 20.1% per year.

The evolution of book value is a good measure of the evolution of intrinsic or “real” value. In our study, we assess fundamental value creation using the following formula: we calculate the evolution of book value per share (end of 2021 compared to the end of 2011) and add the net dividends received by a private shareholder over the past 10 years. The book value per share is obtained by dividing the consolidated equity (group share) by the number of shares at the end of the year (excluding the number of treasury shares). We also make adjustments for capital increases at prices above book value (for the financial year prior to the capital increase).

By the way, such an analysis of fundamental economic performance over at least 10 years is one of the pillars on which Value Square assesses the quality and risks of all listed companies it tracks.

This fundamental analysis approach is independent of the evolution of stock prices, which a manager has no control over. The track record of managers is therefore better evaluated based on the evolution of the fundamental figures. In the short term, stock prices are strongly influenced by emotions. In the long term, stock prices must, of course, follow or even exceed the evolution of the underlying fundamental asset, as is the case with Berkshire Hathaway.

For the eighth consecutive year, Value Square Awards are awarded to the three highest-scoring companies in this study, and management is awarded a gold, silver and bronze “Value Creation Award”. Due to the coronavirus pandemic, the annual physical event of the “Value Creation Awards” in 2020 and 2021 could not take place. This year, we are pleased that the event will take place on Monday, May 16, 2022 at the Handelsbeurs on the Kouter in Ghent.