Bekaert SA · EURONEXT:BEKB
Bekaert SA — FY2012 Earnings Presentation
43 slides from Bekaert SA's earnings presentation, Feb 27, 2013
Slide 1: Annual Results 2012
Annual Results 2012 B. De Graeve, CEO B. Humblet, CFO Brussels, 27 February 2013
Slide 2: Address by B. De Graeve, Chief Executive Officer
Address by B. De Graeve, Chief Executive Officer
Slide 3: Highlights
Highlights - Consolidated sales of € 3.5 billion (+3.6%) and combined sales of € 4.4 billion (-4.6%) - Stable sales volumes - Gross profit of € 479 million (13.8% margin) compared with € 651 million (19.5%) - REBIT of € 118 million (3.4%) compared with € 281 million (8.4%) - Non-recurring costs of €
Slide 4: Highlights
Highlights - Stable volume in very competitive global market - Restructuring related to collapse of sawing wire business fully implemented reducing the related cost base with € 40 million per year - Global cost reduction program on track - Cost savings partly offset by energy cost and wage inflation
Slide 5: Sales
Sales + 320 - 67 3 460 3 340 - 294 + 162 in mio € 2011 Sawing Wire FX M&A Organic 2012 − Sawing wire: market collapse resulting in much lower volume and 60% average price decrease. − FX: average weaker € versus most currencies. − M&A: integration of Chile, Qingdao and Southern wire partly offset by
Slide 6: Sawing wire: recap market collapse – 1 year time
Sawing wire: recap market collapse – 1 year time Date Company Country Official announcements 24 May 2011 REC Norway Heroya 1-2: production temporarily stopped 19 July 2011 REC Norway Glomfyord Multi: production temporarily stopped 2 Sept 2011 Deutsche Solar Germany Freiberg Wafering plant stopped (d
Slide 7: Sawing wire: recap market collapse
Sawing wire: recap market collapse Customer (All) Product LASW Competitor Segmentation (All) Region China Sum of Capacity (MT/M) 12,000 Capacity SW in China: x10 in less than 2 years! Overcapacity SW in China: ca 300% Supplier YBT MKS 10,000 XSD TM HY XY QC 8,000 HF FX SO XF 6,000 ZJG WY TA SM KTS T
Slide 8: The sawing wire collapse: price evolution - worldwide
The sawing wire collapse: price evolution - worldwide Historische prijsevolutie (EUR) PRICE EVOLUTION SOLAR – WORLDWIDE 160% Evolution towards 140% thinner diameters 120% Price war 100% 80% Module Wafer 60% Sawing Wire 40% 20% 2007 2008 2009 2010 2011 2012 0% 7 27 February 2013
Slide 9: REBIT
REBIT in mio € 281 - 184 + 12 +5 +4 118 2011 Sawing Wire FX M&A Organic 2012 − Sawing wire: average 60% price decrease due to structural overcapacity directly impacting profitability. − M&A: profitability of Chile partly offset by divestment of Specialty Films and Industrial Coating business. Newly
Slide 10: Non-recurring: maximum impact in 2012 financials
Non-recurring: maximum impact in 2012 financials Non-recurring items 2012 € mln Non-recurring costs -202 Non-recurring gains (mainly Chile transaction and sale of IC) +35 Total non-recurring items -167 Of the € 202 million non-recurring costs: € 117 million relate to sawing wire € 85 million relate
Slide 11: Non-recurring
Non-recurring 202 167 in mio € 117 65 12 8 -35 Sawing Wire Restructuring Impairments Other Non-recurring M&A Total costs Non-cash Cash − Sawing Wire: € 67 million impairments, € 16 million other non cash items (e.g. inventory write down), € 34 million restructuring and operational costs. − Other res
Slide 12: Global cost reduction program waves
Global cost reduction program 4 waves 3000 2500 2769 ideas 2000 1 100 teams 1500 2 3 4 1000 500 2769 ideas generated 0 1 2 3 4 total accepted to be studied rejected € 500 million reviewed € 100 million savings validated 11 27 February 2013
Slide 13: Global cost reduction program
Global cost reduction program (in mio €) 2012 2013 Ongoing Identified 90 100 100 Implementation started 60 100 100 Impact on cost structure 20 70 100 − 40% of cost reduction are in cost of sales − Wage cost inflation partly offsets cost saving efforts, estimated € 15 million annual − Investment in s
Slide 14: Implementation
Implementation Full restructuring and business realignment status and impact: - The February restructuring plan has been implemented as announced. - Additional actions took place on a global level. Impact of personnel reduction on a global level: June 2011 December 2012 Reduction SW platform 1200 47
Slide 15: Bekaert adapts to a rapidly changing global environment
Bekaert adapts to a rapidly changing global environment Collapse of the solar sector Continued weak global economic environment Slowdown of industrial growth and maturing markets in key sectors, also in emerging countries (e.g. China, Brazil, …) Overcapacity in some key markets 14 27 February 2013
Slide 16: Transformation of the profile of Bekaert
Transformation of the profile of Bekaert More balanced growth opportunities between different emerging markets Rebalanced exposure to different sectors: - Increased importance of automotive in Asia and construction (mainly Latin America) - Energy sector rebalanced towards oil sector and electricity
Slide 17: Strategies unchanged but rebalanced
Strategies unchanged but rebalanced Innovation: more focused as some markets dropped out Geographical expansion: emerging markets remain the growth engine. More balanced growth across different regions and countries reflecting industrial growth expectations Operational excellence: critical to be cos
Slide 18: Company profile
Company profile Industrial company with unique geographic, product and sector exposure Focus on industrial growth in emerging markets and solid position in mature markets Sector innovator 17 27 February 2013
Slide 19: Address by B. Humblet, Chief Financial Officer
Address by B. Humblet, Chief Financial Officer
Slide 20: Bekaert economic environment
Bekaert economic environment EMEA: Overall challenging market conditions: - Automotive markets: OEM demand in the EU reached the lowest level recorded since 1995. Also tire replacement market was down. - Solar energy sector: wafering industry in Europe has disappeared. - Other markets: stable. North
Slide 21: Sales by segment
Sales by segment 2012 Consolidated sales Combined sales In mio € Variance in mio € variance EMEA 1 044 -10.7% 1 040 -10.0% North America 659 -0.9% 659 +0.3% Latin America 812 +118.3% 1 690 +2.7% Asia Pacific 945 -16.7% 998 -12.5% Total 3 460 +3.6% 4 387 -4.6% Consolidated sales Combined sales 27% 23
Slide 22: Sales per region and per sector
Sales per region and per sector North America EMEA 24% 41% 24% 15% 2002 2012 2002 2012 Latin America Asia-Pacific Automotive 26% 38% Energy & Utilities 23% Construction 9% 2002 2012 Other 2002 2012 21 27 February 2013
Slide 23: Consolidated income statement: key figures
Consolidated income statement: key figures (In mio €) 2011 2012 Sales 3 340 3 461 Cost of sales -2 689 -2 982 Gross profit 651 479 Gross profit margin 19.5% 13.8% − Sales increase with 3.6% reflects: − Organic decline of 10.8% mainly related to collapse of the sawing wire market − 9.6% from M&A acti
Slide 24: Consolidated income statement: key figures
Consolidated income statement: key figures (In mio €) 2011 2012 Gross profit 651 479 Selling expenses -149 -158 Administration expenses -134 -134 R&D expenses -90 -69 Others 3 1 Operating result before non-recurring items (REBIT) 281 118 − Total SG&A reduced from 11.2% to 10.5% of sales − Increase i
Slide 25: Consolidated income statement: key figures
Consolidated income statement: key figures (In mio €) 2011 2012 Operating result before non-recurring items (REBIT) 281 118 REBIT margin on sales 8.4% 3.4% Non-recurring items (*) 8 -167 Operating result (EBIT) (*) 289 -49 EBIT margin on sales (*) 8.7% -1.4% EBITDA (*) 497 275 EBITDA margin on sales
Slide 26: Segment reporting: EMEA
Segment reporting: EMEA (In mio €) 2011 2012 1H2012 2H2012 Consolidated sales 1 169 1 044 557 487 Operating result before non-recurring items (REBIT) 66 63 36 28 REBIT margin on sales 5.6% 6.1% 6.4% 5.7% Non-recurring items (*) 4 -75 -49 -25 Operating result (EBIT) (*) 70 -11 -14 2 Depreciation, amo
Slide 27: Segment reporting: North America
Segment reporting: North America (In mio €) 2011 2012 1H2012 2H2012 Consolidated sales 665 659 351 308 Operating result before non-recurring items (REBIT) 32 30 21 8 REBIT margin on sales 4.8% 4.5% 6.1% 2.6% Non-recurring items (*) 11 -14 -14 0 Operating result (EBIT) (*) 43 16 8 8 Depreciation, amo
Slide 28: Segment reporting: Latin America
Segment reporting: Latin America (In mio €) 2011 2012 1H2012 2H2012 Consolidated sales 372 812 397 416 Operating result before non-recurring items (REBIT) 35 64 29 35 REBIT margin on sales 9.5% 7.8% 7.2% 8.4% Non-recurring items 0 16 19 -3 Operating result (EBIT) 35 79 47 32 Depreciation, amortizati
Slide 29: Segment reporting: Asia Pacific
Segment reporting: Asia Pacific (In mio €) 2011 2012 1H2012 2H2012 Consolidated sales 1 134 945 478 468 Operating result before non-recurring items (REBIT) 224 37 35 2 REBIT margin on sales 19.8% 3.9% 7.4% 0.4% Non-recurring items (*) -6 -70 -18 -52 Operating result (EBIT) (*) 218 -33 18 -50 Depreci
Slide 30: Consolidated income statement: key figures
Consolidated income statement: key figures (In mio €) 2011 2012 Operating result (EBIT) (*) 289 -49 Interest income / expense -66 -79 Other financial income and expenses (*) 26 -3 Result before taxes 250 -131 Income taxes -68 -68 Result after taxes (consolidated companies) 182 -199 − Higher interest
Slide 31: Consolidated income statement: key figures
Consolidated income statement: key figures (In mio €) 2011 2012 Result after taxes (consolidated companies) 182 -199 Share in the results of JV’s and associates 25 10 Result for the period 207 -189 Attributable to non-controlling interests 15 6 Attributable to the Group 193 -195 − Lower results from
Slide 32: Cash flow: key figures
Cash flow: key figures (In mio €) 2011 2012 Gross cash flows from operations 324 205 Cash flows from operations 106 439 Cash flows from investment activities -185 -81 Cash flows from financing activities 20 -272 − Cash flow from operations: solid cash generation in the business combined with a signi
Slide 33: Working capital: key figures
Working capital: key figures (In mio €) 2011 January 2012 2012 Inventories 578 667 568 Accounts receivable 861 931 774 Accounts payable -408 -446 -443 Working capital 1 031 1 152 898 − € 254 million working capital reduction versus beginning of 2012 (including Chile) − 15% inventory reduction − Acco
Slide 34: Consolidated balance sheet: key figures
Consolidated balance sheet: key figures Assets Equity and Liabilities in mio € 4 169 in mio € 4 169 3 668 3 668 1 900 1 766 Non-current assets 1 747 Equity 1 604 Non-current 1138 liabilities 1 110 2 269 Current 1 921 assets Current 1 265 954 liabilities 2011 2012 2011 2012 − Reduction of current ass
Slide 35: Balance sheet: key figures
Balance sheet: key figures (In mio €) 2011 (*) 2012 (*) Net financial debt 856 700 Gearing (net debt to equity) 48.5% 43.7% Net debt / EBITDA 1.7 2.6 Net debt / REBITDA 1.8 2.1 − Net debt reduction due to: − Working capital reduction − Solid cash generation from the business − Limited investment act
Slide 36: Ratios: key figures
Ratios: key figures 2011 2012 EBITDA margin on sales (*) 14.9% 7.9% REBIT margin on sales 8.4% 3.4% EBIT margin on sales (*) 8.7% -1.4% Sales on capital employed (asset rotation) 1.4 1.4 Return on capital employed (ROCE) (*) 12.0% -2.0% Return on equity (ROE) 12.0% -11.2% (*) 2011: Gain disposal BSF
Slide 37: Key figures per share
Key figures per share (in €) 2011 2012 Share price at 31 December 24.79 21.88 Number of existing shares at 31 December 59 976 198 60 000 942 Earnings per share (EPS) 3.27 -3.30 Weighted average number of shares 58 933 624 59 058 520 Cash flow attributable to the Group 6.78 2.33 36 27 February 2013
Slide 38: Address by B. De Graeve, Chief Executive Officer
Address by B. De Graeve, Chief Executive Officer
Slide 39: 2013 focus areas by region
2013 focus areas by region EMEA Operational optimization: continue selective research and capital investments in technologies with promising return generation. North America Improve profitability and product mix. Latin America Continue consolidation and integration. Mitigate risks in Venezuela. In v
Slide 40: Outlook
Outlook Restructuring related to the market collapse of sawing wire has been implemented. No turnaround in market conditions is expected. Bekaert is on track with the implementation of the cost reduction measures. Tough economic conditions: - Difficult business environment and no consistent indicato
Slide 41: Contact
Contact Bekaert is always near to you. Any questions? Please do not hesitate to contact us: Jérôme Lebecque Katelijn Bohez Investor Relations Manager Chief Communications Officer Press Relations President Kennedypark 18 President Kennedypark 18 BE-8500 Kortrijk BE-8500 Kortrijk T +32 56 23 05 72 T +
Slide 42: Welcome online
Welcome online For more information, welcome @ www.bekaert.com and www.bekaert.mobi Copyright © by NV Bekaert SA, 2013 Annual report 2012: Available on web on 29 March 2013 41 27 February 2013
Slide 43: better together
better together www.bekaert.com - www.bekaert.mobi 42 27 February 2013