Bekaert SA · EURONEXT:BEKB
Bekaert SA — FY2014 Earnings Presentation
37 slides from Bekaert SA's earnings presentation, Feb 27, 2015
Slide 1: Annual Results 2014
Annual Results 2014 Matthew Taylor, CEO Bruno Humblet, CFO & EVP Regional Operations Latin America
Slide 2: Matthew Taylor, Chief Executive Officer
Matthew Taylor Chief Executive Officer
Slide 3: Highlights
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
Slide 4: Bekaert economic environment
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.
Slide 5: Bekaert economic environment
Bekaert economic environment 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
Slide 6: Bekaert economic environment
Bekaert economic environment 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 all
Slide 7: Sales by segment
Sales by segment 2014 Consolidated sales Combined sales In mio € Variance in mio € variance EMEA 1 064 +2% 1 049 +2% North America 555 +1% 555 +1% Latin America 631 -2% 1 422 -7% Asia Pacific 966 +1% 1 014 +1% Total 3 216 +1% 4 040 -2% Consolidated sales Combined sales 25% 26% 30% 33% EMEA North Ame
Slide 8: Impact of currency
Impact of currency 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 11
Slide 9: Combined sales per region and per sector
Combined sales per region and per sector 21% 18% 20% 24% North America EMEA € 555 million sales € 1 049 million sales 20% 15% 14% 26% 1 600 employees 6 900 employees 40% 42% Latin America Asia-Pacific € 1 422 million sales € 1 014 million sales 35% 8 300 employees 25% 11 700 employees 9% 12% 13% 10%
Slide 10: Bruno Humblet, Chief Financial Officer
Bruno Humblet Chief Financial Officer
Slide 11: Consolidated income statement: key figures
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 remai
Slide 12: Consolidated income statement: key figures
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. − Sellin
Slide 13: Consolidated income statement: key figures
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% − Reb
Slide 14: REBIT evolution and Venezuela FX translation
in mio € 100 125 150 175 200 225 13 REBIT 2013 166 Scope changes -3 Rebit evolution FX translation -4 Venezuela -4 Volume +42 Pricing -35 Cost inflation -27 Cost Savings +39 -10 Bad Debt reversal in 2013 REBIT 2014 164
Slide 15: Segment reporting: EMEA
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, amortizat
Slide 16: Segment reporting: North America
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
Slide 17: Segment reporting: Latin America
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, amortiza
Slide 18: Segment reporting: Asia Pacific
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, amorti
Slide 19: Consolidated income statement: key figures
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 rema
Slide 20: Consolidated income statement: key figures
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
Slide 21: Cash flow: key figures
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
Slide 22: Working capital: key figures
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 i
Slide 23: Consolidated balance sheet: key figures
Consolidated balance sheet: key figures Assets Equity and Liabilities in mio € in mio € 3 958 3 958 3 380 3 380 Non-current 1 851 1 566 assets Equity 1 609 1 504 Non-current 1 205 liabilities 905 2 107 Current 1 772 assets Current 972 1 187 liabilities 2013 2014 2013 2014 − Increase in non-current a
Slide 24: Balance sheet: key figures
Balance sheet: key figures (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 d
Slide 25: Ratios: key figures
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% 24
Slide 26: Key figures per share
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
Slide 27: Matthew Taylor, Chief Executive Officer
Matthew Taylor Chief Executive Officer
Slide 28: Outlook
Outlook 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 yea
Slide 29: Our Vision: 'Field of Play'
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. 28
Slide 30: Core Strategies
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 29
Slide 31: How to deliver?
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 • O
Slide 32: Pirelli steel cord acquisition
Pirelli steel cord acquisition 150 KT tire cord - 2127 employees - € 300 million sales Sumaré, Brazil Figline, Valdarno, Italy Slatina, Romania Izmit, Turkey Yanzhou, China 31
Slide 33: Bekaert Global Ropes Platform: Ropes acquisition Australia
Bekaert Global Ropes Platform: Ropes acquisition Australia Bekaert Aalter Bekaert Hlohovec WRI Canada Bekaert Shenyang Bekaert Qingdao Belton Texas US China Brivensa Venezuela Bekaert Southern Wire Malaysia Procables Peru Prodinsa Chile CIMAF Brasil Bekaert roperies Bekaert rope wire plants Bekaert
Slide 34: Arrium's Ropes activities
Arrium’s Ropes activities The acquired Ropes business is the leading supplier of wire rope products in Australia and a significant participant in the global mining rope market segment - Established, well-invested business - Approx. 100 employees, based in Newcastle, NSW Australia - 90 years of exper
Slide 35: Bekaert Ropes Platform
Bekaert Ropes Platform - Global platform – 50 years ropes manufacturing history – € 250 million sales - Growth in wire ropes is a key priority at Bekaert - Including the wire ropes business of Moly-Cop, Bekaert becomes the leading mining ropes producer in the world - Excellent processing technology
Slide 36: Bekaert Carding Solutions divestment
Bekaert Carding Solutions divestment • Bekaert Carding Solutions and Groz-Beckert have signed an agreement on the sale of Bekaert’s Carding Solutions activities • The transaction is consistent with Bekaert’s focus on steel wire transformation and coatings. Bekaert (NV Bekaert SA and BJWP China) will
Slide 37: Moving Forward - October 2014
2014 Moving Forward - 8 October 2014