Bekaert Sa · EURONEXT:BEKB
Bekaert Sa — Investor Presentation (September 2023)
37 slides from Bekaert Sa's investor presentation, September 2023
Slide 1: Bekaert Presentation to Investors
Bekaert Presentation to Investors September 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: Content
Content − Highlights − Financial Review H1 2023 − Operations and Strategy − Outlook − Sustainability Investor presentation – Bekaert 3
Slide 4: Highlights
Highlights Investor presentation – Bekaert 4
Slide 5: 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 6: 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 7: 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 8: Strategy: a reminder
Strategy: a reminder Our Core and Beyond approach aims to future proof our portfolio Investor presentation – Bekaert 8
Slide 9: 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 10: Financial review H1 2023
Financial review H1 2023 Investor presentation – Bekaert 10
Slide 11: Consolidated Sales
Consolidated Sales Good performance against a strong competitor period, stand-out delivery from BBRG Consolidated Sales (€m) Variance (%) 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% -1
Slide 12: EBITu bridge: consolidated view
EBITu bridge: consolidated view Significant contribution from price and mix partially offsetting the impact of lower volumes Investor presentation – Bekaert 12
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 18: 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 19: Shareholder returns
Shareholder returns Robust financial position supporting enhanced shareholder returns Dividend per share (€) and payout ratio (%)1 In 2022 Bekaert increased its dividend by 50% and executed a €120 million share buyback +68% 34% 21% For 2023, proposing a dividend of €1.65 per share, 42% representing:
Slide 20: Operational and strategic review
Operational and strategic review Investor presentation – Bekaert 20
Slide 21: Strategic delivery
Strategic delivery Benefitting from fast-growing, higher margin activities, alongside a robust and growing ‘core’ +81% +100% 14.2% 3Y CAGR BBRG+SPB 37% 44% BBRG+SPB 7.6% 7.1% 22% 13% 6.6% BBRG+SPB RR+SWS 63% RR+SWS BBRG+SPB RR+SWS RR+SWS 78% 2019 2022 2019 2022 EBITu1 (€m) EBITu1 margin (%) − Group
Slide 22: Disposal of Steel Wire Solutions businesses in Chile and Peru
Disposal of Steel Wire Solutions businesses in Chile and Peru US$ 136 million disposal in-line with Group strategy and representing a 6x EV/EBITDA multiple Sales 2022 Sales 2022 By region By segments Rationale - Regional: reduces exposure in Reduce regional All other economically volatile markets in
Slide 23: Bekaert's activity in hydrogen
Bekaert’s activity in hydrogen Bekaert is growing its role in the hydrogen value chain Production Distribution & Transport Application End of Inputs Generation Transport Storage Distribution Trading Application life/recycling Electrolyzer components Pipe and hose reinforcement Hydrogen burner soluti
Slide 24: Hydrogen update
Hydrogen update Preparation for significant growth underway 2022 Focus Achievements… 2023… Production capacity +2 GW capacity in China and EU Expansion initiated in China and EU growth Start of construction of EU giga factory (5 GW) Commercial Triple-digit growth (conversion of new Long-term supplie
Slide 25: 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 26: 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 27: 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 28: 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 29: 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 30: Outlook
Outlook Investor presentation – Bekaert 30
Slide 31: 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 32: 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 33: Sustainability as an opportunity
Sustainability as an opportunity Investor presentation – Bekaert 33
Slide 34: We have a clear ambition across all ESG dimensions
We have a clear ambition across all 3 ESG dimensions We offer products and solutions We create a diverse, inclusive We embed transparency and that embed sustainable practices and safe environment for our accountability in our collaborative across their lifecycle and our employees and make a positive
Slide 35: Investor presentation – Bekaert
Investor presentation – Bekaert 35
Slide 36: Our validated science-based targets
Our validated science-based targets Scope 1 4% Scope 3 other CO 2 14% 2 targets set to comply with SBTi1 1.5°C guidance Scope 2 18% Scope 1 & Scope 2 combined target 1 Absolute reduction2 of 46.2% by 2030 compared to 2019 baseline Total inventory Scope 3 – purchased goods target 2 Absolute reduction
Slide 37: Bekaert
= Bekaert