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Bekaert
March 2015
March 2015
Bekaert in essence
Strategy review
Annex: Full year results 2014
Content
1
March 2015
Bekaert in essence
2013 2014
Combined sales consolidated
joint ventures
€ 4.1 billion €b 3.2
€b 0.9
€ 4.0 billion €b 3.2
€b 0.8
Operational cash flow (EBITDA) consolidated
joint ventures
€ 413 million €m 297
€m 116
€ 440 million €m 342
€m 98
Worldwide production platform 30 countries
28 000 employees
Listed on Euronext Brussels BEL20®, DJ Stoxx, FTSE, SRI
Market capitalization of € 1.6 billion
2.3 million euro per day
Sustainable Profitable Growth
Worldwide
market and technological leadership
advanced metal transformation and coatings
2
3
Bekaert core competences
to metal fibers
6.5 mm
1 µm
from wire rod from traditional
coatings
to advanced
coatings
Steel wire transformation Coatings
Adhesion
Corrosion
resistance
Wear resistance
Anti-fouling
March 2015
March 2015
Bekaert in brief: market leadership in diverse sectors
Construction 22%
3%
Machinery
9%
Consumption
7%
14%
Agriculture
7% Automotive 38%
Utilities
Basic materials
4
Our Vision
‘Field of Play’
Consistent with our better together aspiration,
we relentlessly pursue to be the preferred supplier for our steel
wire products and solutions,
by continuously delivering superior value to our customers around
the world.
March 2015 5
5 Core Strategies
1. Drive customer into the heart of the business
2. Value driven growth
3. Technology leadership and speed
4. Leverage our scale to greater effect – reduce complexity
5. Lowest total cost
March 2015 6
How to deliver?
Short Term
• Growth and margin enhancement through exploitation of recent
investments and M&A activities
• Ongoing cost focus to offset pricing deterioration, including
structural changes to reduce S,G & A versus planned levels
Medium/Long Term
• Delivery of the 5 core strategies
• Organization
• Manufacturing Excellence
• Complexity reduction/prioritization
• Portfolio optimization
• Footprint optimization
• Confirming an operating profit target of 7% over a 3 year horizon
7 March 2015
72,7
25,827,3
74,2
0
25
50
75
100
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Growth Mature
Geographical expansion: mature and growth markets
Mature
Growth
March 2015 8
Combined sales per region and per sector
Construction
Automotive
Other
Energy & Utilities 14%
35%
9%
42%
65%
10%
12% 13%
42%
20%
18% 20%
40%
15%
21% 24%
March 2015 9
North America
€ 555 million sales
1 600 employees 14%
EMEA
€ 1 049 million sales
6 900 employees 26%
Asia-Pacific
€ 1 014 million sales
25%
Latin America
€ 1 422 million sales
35% 8 300 employees 11 700 employees
Portfolio Management
March 2015 10
2004 2006 2008 2010 2012 2014 2013 2011 2009 2005 2007
Acquis
itio
ns
Div
estitu
res
Fencing
Europe
Fencing
Handling 1 Composites
Diamond
Like
Coatings
Fencing
Handling 2 Window
Films
Industrial
coatings
Carding
Solutions
Wire
Hlohovec
Wire
Orville
Solaronics
Combustion
Wire
CDP
Venezuela (80%)
Columbia (80%)
Peru (38%)
Ecuador(80%)
Tire cord
Bridgestone
Plants
Wire Latam
Integration (52%)
Wire
Chinese
Entities
Wire
Malaysia
BIA Alambres
Costa Rica
Wire
Cimaf Cabos
Advanced
Filtration
Pirelli
2015
Bekaert
Wire Ropes Pty Ltd
2015 focus areas by region
March 2015 11
EMEA
Maintain growth momentum with focus on high value added products.
North America
Turnaround the business momentum to capture growth in a difficult market.
Important investment program impacted to improved product mix
2015 will be impacted by the fire in the bead wire plant in Rome
Latin America
Maintain strong market shares by remaining competitive versus Asian imports.
Difficult market conditions due to low oil price and commodity products
Asia Pacific
Regain business momentum in Rubber Reinforcement China.
Improve profitability in wire activities in China and South-East Asia
March 2015
Operational excellence: based on a strong financial structure
2014 2013 2007 - 2012 1990 – 2006
Growth 0.9% -7.9% 9,7% 2.2%
ROIC > WACC 5.4<8.0 4.8 < 8.0 10,8 > 8.1 6.9 < 9.1
EBITDA on sales 10.6% 9.3% 15,0% 12.0%
REBIT 5.1% 5.2% 9,9 4.9
EBIT 5.3% 4.3% 8,2% 4.9%
WC (mature/growth) 26.7% 26.5% 24,0% 19.4%
Dividend pay out 54% 202% 24% 50%
Tax 41% 89% 26% 21%
Debt 853 574 591 313
Equity / total assets 40% 45% 46% 48%
Gearing (net debt /Equity) 54% 38% 41% 36%
Net debt / EBITDA 2.5 1.9 1.5 1.7
Net debt / REBITDA
2.6 1.8
12
* Due to negative result
March 2015
Shareholder value
-15
-10
-5
0
5
10
15
20
25
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 200120022003 2004 2005 20062007 2008 2009 2010 2011 2012 2013 2014
WACC RoIC
in %
13
March 2015
Shareholders, investors and other interested parties wishing to receive the Group's annual report,
the shareholders guide, the annual accounts of NV Bekaert SA or other information published by
the Group may contact the Investor Relations department at any time.
Contacts
Investor Relations : Mr. Jérôme Lebecque +32 56 23 05 72 [email protected]
Documentation : Mrs. Christine Clarysse +32 56 23 05 41 [email protected]
www.bekaert.com
Agenda
This presentation may contain forward-looking statements. Such statements reflect the current views of management regarding future
events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking statements. Bekaert is providing
the information in this brochure as of its date and does not undertake any obligation to update any forward-looking statements contained
in this brochure in light of new information, future events or otherwise. Bekaert disclaims any liability for statements made or published
by third parties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third
parties in relation to this or any other publication issued by Bekaert.
Disclaimer
14
2014 annual report available on the internet 27 March 2015
First quarter trading update 2015 13 May 2015
General Meeting of Shareholders 13 May 2015
Dividend ex-date 15 May 2015
Dividend payable 20 May 2015
First half year results 2015 31 July 2015
Third quarter trading update 2015 13 November 2015
2015 Results 26 February 2016
Full year results 2014
Highlights
- Consolidated sales of € 3.2 billion (+0.9%) and combined sales of € 4.0 billion (-1.7%)
- Currency impact: € -72 million (-2.3%) on consolidated sales and € -144 million
(-3.5%) on combined sales
- Gross profit of € 486 million (15.1% margin) compared with € 482 million (15.1%)
- REBIT of € 164 million (5.1% margin) compared with € 166 million (5.2%)
- Non-recurring items of € +7 million compared with € -29 million
- EBIT of € 171 million (5.3%) compared with € 137 million (4.3%)
- EBITDA of € 342 million (10.6%) compared with € 297 million (9.3%)
- EPS: € 1.51 compared with € 0.42
March 2015 16
Bekaert economic environment
Global industrial environment was mixed with lower growth in the emerging
markets while Europe and North American markets remain resilient.
Overcapacity in the global steel market mainly due to the slowdown in
China created competitive pressure in SEA and Latin America.
Low commodity prices, mainly copper, and low oil prices negatively impact
the economies in Latin America.
Weaker euro helps to keep the volume momentum in EMEA.
Lower oil prices are expected to have a positive impact on the growth rate
in oil dependent markets moving forward.
March 2015 17
Bekaert economic environment
March 2015 18
EMEA:
Strong demand in most end markets driven by German exports.
Automotive markets growth, both in OEM and aftermarket, fueled growth in tire
cord and other steel wires.
North America:
Improved demand in automotive drove growth in tire cord demand.
Agricultural sector was weak after the very cold winter with no significant
rebound in second half.
Imports from Asia and overcapacity in the local market continue to weigh on
profitability.
Bekaert economic environment
March 2015 19
Latin America:
Weak demand due to low commodity prices constraining public spending and
political changes in some countries.
Price pressure from Asian imports.
Bottoming out of downward trend as of second half.
Weakening local currencies increased competitiveness and allowed for targeted
price increases.
Market share remained stable or increased during the year.
Asia Pacific:
Slowdown of the industrial growth rate reduced capacity utilization and resulted in
price erosion.
Increased competitive pressure for industrial wires in SEA and tire cord in China.
Weak final quarter reflecting corrective actions taking place in the market due to
slowdown of growth rate.
Sales by segment
2014 Consolidated sales Combined sales
In mio € Variance in mio € variance
EMEA
North America
Latin America
Asia Pacific
1 064
555
631
966
+2%
+1%
-2%
+1%
1 049
555
1 422
1 014
+2%
+1%
-7%
+1%
Total 3 216 +1% 4 040 -2%
North America
Latin America
Asia Pacific
EMEA
33%
17% 20%
30%
Consolidated sales
26%
14%
35%
25%
Combined sales
March 2015 20
Impact of currency
March 2015 21
Consolidated sales (in millions of €)
2013 2014 FX full year FX Q4
EMEA 1 040 1 064 -9 -2
North America 548 555 -5 +11
Latin America 645 631 -47 -1
Asia Pacific 953 966 -11 +17
TOTAL 3 186 3 216 -72 +25
Combined sales (in millions of €)
Latin America 1 534 1 422 -118 -4
TOTAL 4 111 4 040 -144 +24
Combined sales per region and per sector
Construction
Automotive
Other
Energy & Utilities 14%
35%
9%
42%
65%
10%
12% 13%
42%
20%
18% 20%
40%
15%
21% 24%
March 2015 22
North America
€ 555 million sales
1 600 employees 14%
EMEA
€ 1 049 million sales
6 900 employees 26%
Asia-Pacific
€ 1 014 million sales
25%
Latin America
€ 1 422 million sales
35% 8 300 employees 11 700 employees
March 2015 23
Consolidated income statement: key figures
(In mio €) 2013 2014
Sales 3 186 3 216
Cost of sales (2 703) (2 730)
Gross profit 482 486
Gross profit margin 15.1% 15.1%
− Sales increase of 1% reflects a volume increase of 3% partly offset by negative 2% from
exchange rate movements.
− Gross margin remains stable as the negative impact of price erosions - mainly in tire cord
China - and cost inflation have fully been offset due to the higher volume and by cost savings.
March 2015 24
Consolidated income statement: key figures
(In mio €) 2013 2014
Gross profit 482 486
Selling expenses (128) (138)
Administrative expenses (125) (127)
R&D expenses (62) (59)
Others (1) 3
Operating result before non-recurring items (REBIT) 166 164
− SG&A increases from 9.9% to 10.1% of sales.
− Selling expenses increase due to:
− € 10 million reversal of bad debt in 2013
− € 5 million increase mainly in Latam reflecting distributor margins and additional
distribution branches in Chile and building products
− € 5 million positive impact from exchange rate movements
− Administrative expense increase reflects cost related to M&A activities.
March 2015 25
Consolidated income statement: key figures
(In mio €) 2013 2014
Operating result before non-recurring items (REBIT) 166 164
REBIT margin on sales 5.2% 5.1%
Non-recurring items (29) 7
Operating result (EBIT) 137 171
EBIT margin on sales 4.3% 5.3%
EBITDA 297 342
EBITDA margin on sales 9.3% 10.6%
− Rebit margin reduced from 6.3% in H1 to 3.9% in H2 reflecting seasonality in Europe and US
and the drop in profitability in Asia in Q4.
− Non-recurring reflects positive impacts of: i) sale of land, ii) negative goodwill on acquisitions
and iii) reversal of environmental provisions partly offset by i) impairments in Asia and Russia
and ii) pension related provision.
Rebit evolution
March 2015 26
in mio €
166 164 -3 -4 -4
+42 -35
-27
+39 -10
100
125
150
175
200
225R
EB
IT 2
013
Scop
e c
ha
ng
es
FX
tra
nsla
tion
Ven
ezue
la
Volu
me
Pricin
g
Cost in
fla
tio
n
Cost S
avin
gs
Bad
De
bt
revers
al in
201
3
RE
BIT
20
14
March 2015 27
Segment reporting: EMEA
(In mio €) 2013 2014 1H2014 2H2014
Consolidated sales 1 040 1 064 555 509
Operating result before non-recurring items (REBIT) 88 114 64 51
REBIT margin on sales 8.5% 10.8% 11.5% 10.0%
Non-recurring items (3) 2 7 (5)
Operating result (EBIT) 85 116 70 46
Depreciation, amortization and impairment losses 48 49 22 27
EBITDA 133 165 93 72
EBITDA margin on sales 12.8% 15.5% 16.7% 14.2%
− Flat sales in H2; the final quarter was slightly below last year.
− Profitability remains strong reflecting a good product mix and overall high capacity utilization.
− Non recurring reflect the gain on sale of land, impairment in Russia and pension related
adjustments.
March 2015 28
Segment reporting: North America
(In mio €) 2013 2014 1H2014 2H2014
Consolidated sales 548 555 281 274
Operating result before non-recurring items (REBIT) 19 20 14 6
REBIT margin on sales 3.4% 3.6% 5.1% 2.1%
Non-recurring items (11) 8 1 7
Operating result (EBIT) 8 28 15 13
Depreciation, amortization and impairment losses 14 10 5 5
EBITDA 22 38 20 17
EBITDA margin on sales 4.0% 6.8% 7.2% 6.4%
− Sales in H2 similar to H1 but this reflects 9% lower volume due to seasonality offset by
exchange rate movements.
− Lower margin in H2 due to lower volumes.
− Non-recurring reflects the insurance revenue related to the Rome fire for € 5 million.
March 2015 29
Segment reporting: Latin America
(In mio €) 2013 2014 1H2014 2H2014
Consolidated sales 645 631 295 336
Operating result before non-recurring items (REBIT) 44 26 11 15
REBIT margin on sales 6.8% 4.1% 3.9% 4.4%
Non-recurring items (0) 8 10 (2)
Operating result (EBIT) 44 34 21 13
Depreciation, amortization and impairment losses 20 6 (3) 9
EBITDA 64 40 18 22
EBITDA margin on sales 9.9% 6.3% 6.2% 6.4%
− H2 sales was up 15% versus same period last year while H1 was down 16%.
− Total year volumes were in line with last year excluding the impact of acquisitions and
Venezuela which saw a significant drop due to lack of wire rod.
− Margins slightly improved but are still depressed due to competitive pressure from imported
products from Asia and low demand due to overall economic slowdown related to low prices
for oil, copper and other commodities.
March 2015 30
Segment reporting: Asia Pacific
(In mio €) 2013 2014 1H2014 2H2014
Consolidated sales 953 966 478 488
Operating result before non-recurring items (REBIT) 77 63 43 20
REBIT margin on sales 8.1% 6.5% 8.9% 4.2%
Non-recurring items (4) (9) (4) (6)
Operating result (EBIT) 73 54 39 15
Depreciation, amortization and impairment losses 80 106 49 57
EBITDA 153 159 88 71
EBITDA margin on sales 16.1% 16.5% 18.4% 14.6%
− Sales in H2 positively impacted by exchange rate movements while volume and pricing were
below H1.
− Lower margin reflects the weak tire cord business in quarter 4 and the losses in wire in SEA.
− Non-recurring are due to asset impairments on activities in SEA.
March 2015 31
Consolidated income statement: key figures
(In mio €) 2013 2014
Operating result (EBIT) 137 171
Interest income / expense (64) (63)
Other financial income and expenses (20) (4)
Result before taxes 54 105
Income taxes (48) (42)
Result after taxes (consolidated companies) 6 62
− Interest expenses remained stable as the average higher gross debt was financed at lower
interest costs.
− Lower other financial expenses related to a weaker Euro which created a gain; this effect was
more than offset by a reserve to cover for potential exchange issues in Venezuela.
− Tax expenses include an increase in the global tax reserves reflecting the increasingly
challenging tax environment.
March 2015 32
Consolidated income statement: key figures
(In mio €) 2013 2014
Result after taxes (consolidated companies) 6 62
Share in the results of JV’s and associates 30 25
Result for the period 36 88
Attributable to non-controlling interests 11 0
Attributable to the Group 25 87
− The share in the results of Joint Ventures reflects a more difficult economic environment in
Brazil.
− Results attributable to the minorities decreased to zero due to the losses and impairments in
SEA and the reserves set up to cover for potential issues in Venezuela.
March 2015 33
Cash flow: key figures
(In mio €) 2013 2014
Gross cash flows from operations 234 261
Cash flows from operations 306 187
Cash flows from investment activities (72) (225)
Cash flows from financing activities (192) 88
− Cash from operations well below 2013 as working capital increased in 2014 while it showed a
decrease in 2013.
− Investment activities include the acquisition of 3 of the 5 plants of Pirelli Steel Cord.
March 2015 34
Working capital: key figures
(In mio €) 2013 2014
Inventories 539 641
Accounts receivable 716 847
Accounts payable (462) (513)
Working capital 793 975
− Working capital increase reflects:
− Inclusion of 3 Pirelli steel cord plants for € 55 million.
− Exchange rate impact of € 61 million.
− Organic increase of € 66 million.
− Average working capital as % of sales remained stable at 27%.
March 2015 35
Consolidated balance sheet: key figures
1 772 2 107
1 609
1 851
2013 2014
in mio € in mio €
972 1 187
905 1 205
1 504
1 566
2013 2014
Assets Equity and Liabilities
Non-current
assets
Current
assets
Non-current
liabilities
Current
liabilities
Equity
3 380 3 380
3 958 3 958
− Increase in non-current assets reflects Pirelli tire cord acquisition.
− Current assets increase reflecting the proceeds of the convertible bond and the increase in
working capital.
− Non-current liabilities increase due to the issuance of the convertible bond.
Balance sheet: key figures
March 2015 36
(In mio €) 2013 2014
Net financial debt 574 853
Gearing (net debt to equity) 38.2% 54.5%
Net debt on EBITDA 1.9 2.5
Net debt on REBITDA 1.8 2.6
− Net debt increase reflects € 207 million related to part of the Pirelli acquisition and the share
buy back to cover potential dilution of the convertible bond.
− Net debt / EBITDA was 1.9X excluding the above.
March 2015 37
Ratios: key figures
2013 2014
EBITDA margin on sales 9.3% 10.6%
REBIT margin on sales 5.2% 5.1%
EBIT margin on sales 4.3% 5.3%
Sales on capital employed (asset rotation) 1.4 1.4
Return on capital employed (ROCE) 6.1% 7.7%
Return on equity (ROE) 2.3% 5.7%
March 2015 38
Key figures per share
(in €) 2013 2014
Share price at 31 December 25.72 26.35
Number of existing shares at 31 December 60 063 871 60 111 405
Book value 22.41 22.74
Earnings per share (EPS) 0.42 1.51
Weighted average number of shares 58 519 782 57 599 873
Number of treasury shares 1 652 677 4 275 010
Outlook
March 2015 39
We expect the low running rate of the fourth quarter of 2014, driven
particularly by a downturn in Asia, to continue in the first quarter of
2015. However, we do expect a positive impact of currency movements
as of the first quarter and we anticipate improved demand in the
balance of the year.
Given the economic environment and the company’s current
performance, Bekaert is undertaking a set of actions to drive value
creation over time. In addition, the recently acquired tire cord and ropes
businesses will be important contributors to our strategy of improving
our product portfolio and financial performance.
40
Welcome online
For more information, welcome @ www.bekaert.com
Copyright © by NV Bekaert SA, 2013
March 2015
better together
March 2015 41