Bekaert SA · EURONEXT:BEKB
Bekaert SA — Investor Day (February 2008)
36 slides from Bekaert SA's investor day presentation, February 2008
Slide 1: Growing steel cord markets
Capital market event 2008 Growing steel cord markets Marc Vandecasteele Group Executive Vice-President 0 Capital Market Event February 2008
Slide 2: Regional steel cord business and production sites
Regional steel cord business and production sites North America Europe 16% 32% Asia 14% Latin America Rest of the world 36% 2% 1 Capital Market Event February 2008
Slide 3: Tire cord growth since 1950
Tire cord growth since 1950 100% 5 E+05 Central Europe India 75% 4 E+05 Indonesia China Turkey 50% 3 E+05 Australia Brazil 25% 1 E+05 USA Spain Belgium 0% 0 2 Capital Market Event February 2008
Slide 4: Radialization is ongoing: passenger cars
Radialization is ongoing: passenger cars 100 90 80 70 60 50 40 30 20 10 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 W. Europe Japan N. America China Russia 3 Capital Market Event February 2008
Slide 5: Radialization is ongoing: trucks and busses
Radialization is ongoing: trucks and busses 100 90 80 70 60 50 40 30 20 10 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 W. Europe Japan N. America China India Russia 4 Capital Market Event February 2008
Slide 6: Tire market per manufacturer
Tire market per manufacturer Others Bridgestone 18% Bridgestone 20% Michelin Goodyear Kumho Continental Toyo Tire 2% Pirelli 2% Sumitomo Cooper Michelin Yokohama 2% 18% Hankook Hankook 3% Yokohama Cooper 3% Toyo Tire Sumitomo Kumho 4% Others Pirelli Goodyear 5% Continental 17% 6% 5 Capital Market Ev
Slide 7: Russia Bekaert Lipetsk Greenfield plant
Growing steel cord business Russia Bekaert Lipetsk Greenfield plant 6 Capital Market Event February 2008
Slide 8: Russia: background information
Russia: background information GDP 2007: 2 100 billion USD Growth about 7.5 % Population: 140 million Export : world's leading natural gas exporter and the second leading oil exporter • Exports of natural resources started decreasing in economic importance as the internal market strengthened conside
Slide 9: Regional steel cord production sites
Regional steel cord production sites New investment 8 Capital Market Event February 2008
Slide 10: Russia: Bekaert presence
Russia: Bekaert presence Moskou Lipetsk Lipetsk • 430 km south of Moscow • Products: tire cord – bead wire • People: 250 9 Capital Market Event February 2008
Slide 11: Scope of the project
Scope of the project Investment driven by a number of considerations • Bekaert supplies tire manufacturers in CIS since many years • Steel cord and bead wire are imported from its European plants. • Strong growth potential of the local market • Continuing investments in new automotive plants (foreig
Slide 12: Russia: steel cord market
Russia: steel cord market In % 100% 1 3 6 7 6 5 75%1 02 5 7 4 50%6 8 3 8 3 25%3 4 1 9 1 0% 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 SC demand SC estimate 11 Capital Market Event February 2008
Slide 13: Lipetsk SEZ
Lipetsk SEZ 12 Capital Market Event February 2008
Slide 14: Lipetsk Special Economic Zone (SEZ)
Scope of the project Lipetsk Special Economic Zone (SEZ) • Only two SEZ’s have been selected to enjoy support from the federal government with federal support towards “Industrial” activities • Located near the center of gravity of target customers and markets • Good logistic situation: easy access f
Slide 15: Project implementation
Project implementation - A “phased” approach 2008-2013 • Phase 1: 15 000 ton capacity finished product Semi product imported • Phase 2: start production semi product in 2011 • Phase 3: doubling capacity up to 30 000 ton in line with market demand - Start production in 2010 - Investment €m 97 14 Capi
Slide 16: Bekaert Slovakia Hlohovec and Sladkovičovo
Growing steel cord business Bekaert Slovakia Bekaert Hlohovec and Sladkovičovo Platforms for sustainable profitable growth 15 Capital Market Event February 2008
Slide 17: Slovakia: background information
Slovakia: background information GDP 2007: 100 billion USD Growth about 8% Population: 5.5 million Export is growing by more than 25% • Slovakia is a fast growing country • Slovakia is among the most attractive countries in the EU for foreign investors mainly because of its lower labour cost, low ta
Slide 18: Slovakia: Bekaert presence
Slovakia: Bekaert presence Hlohovec Sladkovicovo • Wide and flexible range of business activities • A benchmark steel cord manufacturing unit in Europe, being competitive to cheap imports • 70 000 ton (double digit growth) 17 Capital Market Event February 2008
Slide 19: Location: close to our biggest customers
Location: close to our biggest customers } Bridgestone } Michelin } Goodyear } Continental • 150 km from largest } Other tire plants locations truck tire } Bekaert manufacturer platform in the world P U • 100 km from 3rd } } passenger tire } } }} } manufacturer } } }} }}} SK } platform in the world
Slide 20: Steel cord market in Central Europe
Steel cord market in Central Europe 100 90 80 70 60 50 40 30 20 10 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2002 2005 2006 Passenger Heavy truck Light truck • Radialization of passenger tire is quickly reaching maximum saturation level • Radialization of light and heavy truck is slow
Slide 21: China update
Growing steel cord business China update 20 Capital Market Event February 2008
Slide 22: China: background information
China: background information GDP 2007: 3 000 billion USD Growth about 8.5% Population: 1.3 billion • China economy will grow at a high level for the next 3 to 5 years GDP growth rate 8% to 10% • 4th largest economy • Positive co-relation between GDP growth and the growth of road transport. China au
Slide 23: China: Bekaert presence
China: Bekaert presence Shenyang: steel cord Shandong: steel cord Changzhou: carding Jiangyin: • Steel cord • Advanced wire products • Bekaert Learning and Activity center • Technology and Engineering Wuxi: textile machinery Shanghai: • Advanced wire products • Bekaert Management • SAM Logistics Suz
Slide 24: Steel cord market: Growth elements
Steel cord market Growth elements • The Chinese growth is driving the growth of the worldwide steel cord market. • This growth is driven by:the rapidly increasing radialization export of tires • Radial tire market will still grow at a double digit for the next 3 to 5 years • Bias tire makers are mor
Slide 25: Worldwide demand for tire cord products
Worldwide demand for tire cord products 1000000 800000 600000 400000 200000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Europe N. America Japan, S.Korea, Taiwan China China optimistic Other markets 24 Capital Market Event February 2008
Slide 26: Chinese demand for passenger and light truck tires
Chinese demand for passenger and light truck tires PCR/LTR evolution from 2002 to 2007 180 50% 170 160 45% 43% 140 144 40% 118.5 35% 120 34% 30% 100 25% 91.98 25% 29% 80 22% 20% 64.31 18% 60 15% 48.14 40 10% 20 5% 0 0% 2002 2003 2004 2005 2006 2007F PCR/LTR AGR 25 Capital Market Event February 2008
Slide 27: Chinese demand for truck and bus tires
Chinese demand for truck and bus tires TBR evolution from 2002 to 2007 50 80% 45 70% 67% 43 40 63% 61% 37 60% 35 53% 30 50% 25 28 40% 20 32% 30% 18.3 15 11.2 20% 10 16% 6.7 10% 5 0 0% 2002 2003 2004 2005 2006 2007F TBR AGR 26 Capital Market Event February 2008
Slide 28: Chinese demand for steel cord
Chinese demand for steel cord SC market evolution from 2002 to 2007 700.0 70% 600.0 58% 580 60% 57% 500.0 506.0 50% 47% 42% 400.0 40% 34% 300.0 378.0 30% 265.7 200.0 20% 168.2 15% 100.0 107.4 10% 0.0 0% 2002 2003 2004 2005 2006 2007F SC mkt size AGR - In terms of growth rate, the steel cord market g
Slide 29: Bekaert and the Chinese tire market
Bekaert and the Chinese tire market Market shares 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 Est 2007 Bekaert Shougang 28 Capital Market Event February 2008
Slide 30: Bekaert and the Chinese market
Bekaert and the Chinese market - Bekaert moves on in China - Deployment of ambitious investment plan • Increased production capacity up to 250 000 tons in 2007 - More than 5 000 motivated employees work with Bekaert at 15 legal entities - Leading role as worldwide top quality supplier to local and i
Slide 31: Share price benchmark Xingda and Shougang
Share price benchmark Xingda and Shougang 250 220 190 160 130 100 70 40 1/07 2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 Bekaert Shougang Xingda 30 Capital Market Event February 2008
Slide 32: Turkey Beksa Celik Kord Sanayi ve Ticaret A.S.
Growing steel cord business Turkey Beksa Celik Kord Sanayi ve Ticaret A.S. Full ownership 31 Capital Market Event February 2008
Slide 33: Turkey: background information
Turkey: background information GDP 2007: 400 billion USD Growth about 7.0 % Population: 70 million Export: 125 billion USD textile, fruit • One of the fastest growing economies in the world • Highly dynamic industrial complex in the major cities • Key sectors of the Turkish economy are construction,
Slide 34: Turkey: Bekaert presence
Turkey: Bekaert presence Izmit Beksa • Products: steel cord products, Dramix® for automotive, industrial and building applications • People: 330 • Sales: €m 65 in 2007 33 Capital Market Event February 2008
Slide 35: Scope of the project: Full ownership
Scope of the project Full ownership • Fully integration of the additional 50 % of Beksa in Bekaert’s global manufacturing portfolio and business approach on growth, sourcing and customer relations • Export base • Purchase price: €m 40.3 34 Capital Market Event February 2008
Slide 36: better together
better together www.bekaert.com 35 Capital Market Event February 2008