Bekaert Sa · EURONEXT:BEKB
Bekaert Sa — H1 2023 Earnings Presentation
28 slides from Bekaert Sa's earnings presentation, Jul 28, 2023
Slide 1: Bekaert H1 2023 Results
Bekaert H1 2023 Results 28 July 2023
Slide 2: Safe Harbour
Safe Harbour 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 result
Slide 3: Agenda
Agenda 1 Introduction and highlights Oswald Schmid, CEO Financial review Oswald Schmid 2 CEO Taoufiq Boussaid, CFO 3 Operational review and outlook Oswald Schmid, CEO Taoufiq Boussaid CFO Bekaert H1 Results 2023 3
Slide 4: H1 2023 – Highlights
H1 2023 – Highlights Another period of strategic and financial progress, despite broader uncertainties Weaker Credit & Uncertainty demand banking pressures in China Cost inflation Recession Supply chain & price volatility concerns pressures TRANS- PERFORM GROW FORM Our execution shows continuous imp
Slide 5: H1 2023 – Financial highlights
H1 2023 – Financial highlights Robust financial performance despite lower volumes Revenue EBITu1 EBITDAu margin EPSu € 2 318 m € 226 m 13.7% € 3.07 -8.2% -10.2% +20 bps -24.0% ROCEu Free Cash Flow (FCF)2 Working capital as % on Net debt/EBITDAu sales 20.5% € 80 m 16.1% 0.8x -240 bps € +160 m -240 bp
Slide 6: Strategic execution
Strategic execution H1 2023 was another period of strategic execution - across our Core and faster growing Beyond activities Focus 2023 Various customer awards for performance excellence, Vietnam: new approvals; customers technical collaboration and quality express appreciation for new supply source
Slide 7: ESG is a central pillar of strategy
ESG is a central pillar of strategy Continued ESG progress in H1 2023 Key H1 2023 updates Remain on track towards carbon reduction targets Rating agency Latest rating Scope 1 and 2 reduction of 8.3% in 2022 (vs 2021) Scope 3 reduction of 12.6% in 2022 (vs 2021) Supply chain focus B 96% of supp
Slide 8: Financial review
Taoufiq Boussaid, CFO Financial review Bekaert H1 Results 2023 8
Slide 9: Consolidated Sales
Consolidated Sales Strong performance from BBRG, with reductions in sales elsewhere Variance (%) Consolidated Sales (€m) Price mix + Volume = Organic + FX = Growth -8% -3% -4% -8% -7% -1% -9% 3% -6% -8% -8% Rubber Reinforcement -2% -1% -11% -12% -13% -13% Steel Wire Solutions -1% -13% -1% Specialty
Slide 10: EBITu bridge: consolidated view
EBITu bridge: consolidated view Significant contribution from price and mix partially offsetting the impact of lower volumes Bekaert H1 Results 2023 10
Slide 11: H1 2023 - Rubber Reinforcement
H1 2023 - Rubber Reinforcement Strong margin performance across regions H1 22 H2 22 H1 23 change H1 Highlights Sales (€m) 1 110 1 087 1 019 -8% — Volumes ahead of last year and strong start of the year EBITu (€m) 101 78 105 +4% — Higher sales in China, at lower prices, but with better plant occupati
Slide 12: H1 2023 - Steel Wire Solutions
H1 2023 - Steel Wire Solutions Energy and Utilities robust, other markets have been more challenged H1 22 H2 22 H1 23 change H1 Highlights Sales (€m) 733 694 635 -13% — Ongoing volume and margin performance from US Utilities segment, offsetting weakness EBITu (€m) 75 25 49 -34% elsewhere — Mixed per
Slide 13: H1 2023 - Specialty Businesses
H1 2023 - Specialty Businesses Continued strategic progress, with shorter term headwinds H1 22 H2 22 H1 23 change H1 Highlights Sales (€m) 399 373 349 -13% — BPR: despite weak construction market, excellent business mix and pricing led by EBITu (€m) 74 58 64 -13% 4D/5D — BFT: weaker demand from semi
Slide 14: H1 2023 - Bridon-Bekaert Ropes Group
H1 2023 - Bridon-Bekaert Ropes Group Another strong performance across all sector and products, order book remains strong H1 22 H2 22 H1 23 change H1 Highlights Sales (€m) 268 318 309 +16% — Ropes: Ongoing strong demand in Mining and Oil & Gas, especially in LATAM and US EBITu (€m) 35 * 25 40 +13% —
Slide 15: Consolidated income statement: key figures
Consolidated income statement: key figures EPS impacted by significant non-cash currency movements ETR 1 In €m H1 2022 H1 2023 24% 20% EBIT underlying 251 226 One-off items (3) (5) H1 2022 H1 2023 EBIT reported 248 220 Interest income / expense and other financial expenses 4 (35) Share in JVs (€m) 2
Slide 16: Average working capital on sales
Average working capital on sales Working capital continues to be tightly managed; driving significant cash flow performance In % on sales H1 2022 H1 2023 20.6 20.5 Average working 16.0 15.6 16.1 capital on sales 13.7 16.1% Absolute working capital € 819m (-5% vs H1 2022) -20.0 -22.8 Inventories Acco
Slide 17: Operational review and outlook
Oswald Schmid, CEO Operational review and outlook Bekaert H1 Results 2023 17
Slide 18: Strategy: a reminder
Strategy: a reminder Our Core and Beyond approach aims to future proof our portfolio Bekaert H1 Results 2023 18
Slide 19: Continue to strengthen the Executive Team
Continue to strengthen the Executive Team Barry Snyder Track record of leadership in operations, procurement, EHS, quality, innovation and Chief Operations technology Officer Career includes Rohm and Haas Company, Celanese Corporation, HB Fuller Company (US), Orion Engineered Carbons (Germany),
Slide 20: PERFORM Highlight | BBRG
PERFORM Highlight | BBRG Profit restoration plan now complete; now moving the business towards clean energy production Profit restoration plan Delivering both sales growth and cost Our portfolio is poised to capture successfully executed control further opportunities 2018 - full control and Bekaert
Slide 21: TRANSFORM Highlight | Armofor®
TRANSFORM Highlight | Armofor® Demand growth for current applications continues; with significant further potential in hydrogen transmission Leveraging our unique technology, Market demand in energy markets supported by Armofor set-up and experience in sustainability and TCO savings traditional mar
Slide 22: GROW Highlight | Ampact
GROW Highlight | Ampact Component for next gen EVs, enabling faster charging and longer ranges Fast-growing market as electric mobility moves towards higher A critical component built on our Ampact™ Wired to power up technology leadership in steel, in voltage copper and in coatings efficient 800V Ex
Slide 23: China update
China update Navigating an increasingly complex business environment China remains a significant business for Bekaert Risks in China 22% of sales in 2022 • Geopolitical tensions 30% of production volumes in 2022 • Credit and financing concerns Bekaert has a long history in China • Intensifie
Slide 24: Summary and outlook
Oswald Schmid, CEO Summary and outlook Bekaert H1 Results 2023 24
Slide 25: Segment outlook
Segment outlook Rubber Reinforcement Steel Wire Solutions — Soft demand in most markets, strong in India — Mixed picture across regions and segments — Increasing interest in premium and sustainable — US continuing to benefit from federal programs solutions — Subdued demand in EMEA, Latin America and
Slide 26: Summary and outlook
Summary and outlook Strong performance in H1, despite challenging markets Continued strategic execution and transformation of the Group Continued tactical pricing and cost discipline Continue to build financial track record EBITu margin 9.7% Strong Free Cash Flow generation ROCEu of 20
Slide 27: Q&A
Q&A Bekaert H1 Results 2023 27
Slide 28: = Bekaert
= Bekaert