Bekaert SA · EURONEXT:BEKB
Bekaert SA — Q1 2010 Earnings Presentation
34 slides from Bekaert SA's earnings presentation, May 2010
Slide 1: Bekaert
® BEKAERT better together Bekaert May 2010
Slide 2: Content
Content Bekaert in essence Trading update 1Q10 Business update Shareholdings 1 May 2010
Slide 3: Bekaert in essence: Sustainable Profitable Growth
Bekaert in essence Sustainable Profitable Growth Worldwide market and technological leadership advanced metal transformation and coatings 2008 2009 Combined sales € 4.0 billion € 3.3 billion consolidated €b 2.7 €b 2.4 joint ventures €b 1.3 €b 0.9 Operational cash flow € 628 million € 520 million con
Slide 4: Core competences
Core competences Metal transformation Advanced coatings From wire rod From traditional coatings 6.5 mm Adhesion Corrosion resistance Wear resistance Anti-fouling 1 µm to advanced to metal fibers coatings 3 May 2010
Slide 5: Strategy review
Strategy review Bekaert creates Sustainable Profitable Growth by focusing on the key strategies: - Geographical expansion: fast growth close to its customers in emerging economies maintaining strategic presence in mature markets - Innovation: continued investment to identify new applications improve
Slide 6: Geographical expansion
Geographical expansion Over 80% of expansion capital is spent in emerging markets - Opening of the steel cord plant in Chongqing (China) together with Ansteel - Further increase of tire cord capacity in China reaching 400 000 ton in 2010 - Broadening of our product offering in Asia - Investments in
Slide 7: Geographical expansion: established and emerging markets
Geographical expansion: established and emerging markets 100 75 Emerging 50 25 Established 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1Q10 Emerging Developed 6 May 2010
Slide 8: Geographical expansion: sales per region and per sector
Geographical expansion: sales per region and per sector North America EMEA Greenland 24% 15% 41% 25% Alaska 2002 1Q10 Iceland Sweden Finland Russian Federation Norway 2002 1Q10 Estonia Canada Latvia Denmark Lithuania Belarus Ireland United Kingdom Netherlands Poland Belgium Germany Czech Rep. Slovak
Slide 9: Innovation
Innovation - Doubling investment in innovation over the last 10 years with simultaneous shift and focus on core competences - Product portfolio renewed with 50% in the last 10 years - Further growth of R&D efforts in China - Enhanced presence in sectors less sensitive to an economic downturn 8 May 2
Slide 10: Innovation: technological leadership
Innovation: technological leadership Focus on innovation • 63 million euro in-house R&D (3% consolidated sales) • International Research and Development team in Belgium (350 employees) • Research and Development in China (250 employees) • Close to 2 000 patent rights (of which 350 inventions) with t
Slide 11: Innovation: presence in sectors less sensitive to a downturn
Innovation: presence in sectors less sensitive to a downturn Consumer goods Agriculture Automotive 8% 8% 36% Equipment 75% replacement market 4% 65% emerging market Energy & Utilities 21% Construction Basic materials ©Alain Pierot 19% 4% Growth driver Project and infrastructure related 60% Latin Ame
Slide 12: Operational excellence
Operational excellence - Implementation of cost reduction programs across all entities and business platforms - Continued focus on quality to differentiate us from our competitors - Leverage internal engineering department to ensure cost competitive equipment - Energy consumption reduction programs
Slide 13: Operational excellence: market leadership enhances effectiveness
Operational excellence: market leadership enhances effectiveness Bekaert strives to be number one globally, in well selected markets Fibers Dramix® Sawing wire Coated wires Flexible pipes Tire cord 12 May 2010
Slide 14: Operational excellence: based on a strong financial structure
Operational excellence: based on a strong financial structure L/T 2005 - 1990 – 2009 2008 guidance Actual 2004 Growth GDP + -8.5% 22.50% 6.2% 1.5% ROIC > WACC > 10.5 >8.6 13.0 >8.7 10.9>8.1 6.5<9.3 EBITDA on sales 15% 15.8% 15.5% 14.3% 11.8% EBIT 7%-9% 9.5% 7.9% 8.0% 4.6% Recurring EBIT 10.5% 11.1%
Slide 15: Operational excellence: cost control
Operational excellence: cost control - Decrease SG&A 7% (as % of sales) 6% 5% - Increase R&D investments 4% 3% 2% 1% 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 Selling expenses Administrative expenses R&D investments - 50% Decreasing staff costs 40% 30% 20% 10% 0% 1995 1996 1997 1998 1999 2000
Slide 16: Operational excellence: debt management
Operational excellence: debt management - Balanced financing 400 short / long 300 financial instruments 200 100 0 - No covenants -100 -200 - Currency profile -300 • EUR 48% -400 • USD 20% -500 • RMB 23% 2010 2011 2012 2013 2014 2015 • Rest 9% Long term Bonds Bonds 2009 Short term Cash - Blended inte
Slide 17: Operational excellence: cash flow
Operational excellence: cash flow - Capital investments • Estimated range of €m 175 - 200 - Depreciation and amortization • Estimated around €m 150 - Share buy back • Not material In €m 400 300 200 100 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Capex Acquisiton Divi
Slide 18: Trading update 1Q 2010
® BEKAERT better together Trading update 1Q 2010
Slide 19: Highlights 1st quarter 2010: emerging markets drive recovery
Highlights 1 quarter 2010: emerging markets drive recovery - Consolidated sales up 17 % • + 23.9% organic growth (strong volume increase) • - 6.7% currency movements (particularly Venezuela) - Combined sales up 20.9% - Emea: sustained recovery, all platforms, high capacity utilization - North Americ
Slide 20: Sales per segment 1st quarter 2010
Sales per segment 1st quarter 2010 Consolidated sales Combined sales 1st quarter 2010 in millions of € variance in millions of € variance EMEA 244.0 +16% 243.0 +16% North America 141.0 -1% 139.3 +0% Latin America 67.0 -17% 328.9 +18% Asia Pacific 242.2 +52% 241.6 +51% Total 694.2 +17% 952.8 +21% *fi
Slide 21: Sales per segment 1st quarter 2010
Sales per segment 1st quarter 2010 Consolidated sales Combined sales Asia Pacific EMEA 25% 25% Asia Pacific EMEA 35% 35% North America 15% Latin America North America Latin America 10% 20% 35% 20 May 2010
Slide 22: Sales 1Q10
Sales 1Q10 in mio € 142 40 0 694 592 Consolidated 1Q09 Organic FX Acq 1Q10 167 3 0 953 Combined 788 1Q09 Organic FX Acq 1Q10 21 May 2010
Slide 23: Business update
® BEKAERT better together Business update
Slide 24: 2010 Outlook
2010 Outlook - Continued strong performance in the second quarter of 2010 - Remain cautious about market developments for the second half of the year - Stabilization of economic activity in mature markets - Earthquake in Chili will have little impact on Bekaert’s activities - Further investment in e
Slide 25: Business update: markets - Europe and Russia
Business update: markets Regional overview PMI index 53 51 54 57 58 Europe 51 52 48 • Sustained recovery in all platforms 42 37 • Strong sales volumes • High capacity utilization • Limited visibility for 2H10 • Continued cost control measures 2007 H1 H2 H1 Q3 Q4 Jan- Feb- Mar- Apr- Avg 2008 2008 200
Slide 26: Business update: markets - North and Latin America
Business update: markets Regional overview PMI index - North America 58 57 60 60 • Challenge remains 53 51 49 51 55 • Increased volumes 42 39 • Sales effect offset by lower selling prices • Unfavorable currency movements vs 1Q09 • Continued cost reduction programs 2006 2007 H1 H2 H1 Q3 Q4 Jan- Feb-
Slide 27: Business update: markets - China and South East Asia
Business update: markets Regional overview PMI index - China 55 55 54 56 57 56 57 55 • Activity platforms operate at full capacity 45 48 utilization rate and support the margins • Strong GDP growth rate continued, based on strong industrial development across the region and “Go West” program. 2007 H
Slide 28: Consensus 2010
Consensus 2010 Reviewed March 2010 Consensus 2010 in € millions 2010 Low High Sales 2.589 2.503 2.733 Sales growth 6,2% 2,7% 12,1% REBIT 316 284 356 REBIT margin 12,2% 11,4% 13,0% EBIT 296 259 341 EBIT margin 11,4% 10,4% 12,5% Financial result -52 -44 -66 Income taxes -64 -57 -72 Share in J.V.'s 41
Slide 29: Shareholdings
® BEKAERT better together Shareholdings
Slide 30: Shareholder value
Shareholder value in % 15 10 5 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -5 WACC RoIC -10 29 May 2010
Slide 31: Bekaert share fact sheet and dividend
Bekaert share Fact sheet 31.12.08 2009 2010 Number of shares : 19 834 469 Average closing 88.53 75.43 120.14 Number of VVPR strips 4 058 470 High price 121.24 109.40 141.50 Average daily traded volume 50 000 Low price 43.70 37.25 98.60 Average daily traded value €m 7 Closing price 48.32 108.50 Marke
Slide 32: Internationalized shareholder structure
Internationalized shareholder structure 2002 2009 Principal shareholder 40.1% 39.0% Institutional shareholdings 15.1% 48.0% Public (unidentified) 43.9% 13.0% Institutional (Belgium) 82% 9% Institutional (International) 18% 91% Declaration AXA S.A. - 3.0% 100% 100% Rest Rest 90% 90% Ireland Canada 80
Slide 33: Contacts
Contacts b ª ¡ www.bekaert.com Investor Relations : Mr. Jacques Anckaert +32 56 23 05 72 jacques.anckaert@bekaert.com Documentation : Mrs. Christine Clarysse +32 56 23 05 41 christine.clarysse@bekaert.com Shareholders, investors and other interested parties wishing to receive the Group's annual repo
Slide 34: www.bekaert.com
www.bekaert.com