Bekaert SA · EURONEXT:BEKB
Bekaert SA — Investor Day (December 2004)
11 slides from Bekaert SA's investor day presentation, Dec 17, 2004
Slide 1: Sustained profitability
1 Sustained profitability Bert De Graeve CF&AO IR041217 - p1/77 Analysts’ day – (17 December 2004)
Slide 2: Currency profile
2 Currency profile Current situation Currency exposure protection mechanisms Impact on financial ratios and on WACC IR041217 - p2/77 Analysts’ day – (17 December 2004)
Slide 3: Euro versus US dollar
3 Euro versus US dollar EUR versus USD 1,5 1,4 1,3 Index 1,2 1,1 1,0 0,9 0,8 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 IR041217 - p3/77 Analysts’ day – (17 December 2004)
Slide 4: Currency profile
4 Currency profile Currency profile Combined sales Elements of capital employed CZK CAD Other SKK 3% 2% 2% Dollar Euro 4% sensitive sensitive GBP 49% Euro 51% 4% 48% CNY 12% USD 25% IR041217 - p4/77 Analysts’ day – (17 December 2004)
Slide 5: Currency profile – protection mechanisms
5 Currency profile – protection mechanisms Currency exposure protection mechanisms: • Matching principle: - Match between assets and liabilities - Match between revenue generation and costs incurred • Hedging instruments IR041217 - p5/77 Analysts’ day – (17 December 2004)
Slide 6: Currency profile – impact on financial ratio's
6 Currency profile – impact on financial ratio’s Based on the current situation, the impact of currency fluctuations on selected financial ratio’s is limited. The implicit credit rating strengthens with appreciation of the EUR and vice versa. Even a strong currency change would not lead to a rating
Slide 7: Currency profile : evaluation
7 Currency profile : evaluation Matching principle: Foreign currency debt as natural hedge of foreign currency assets: • USD (+ CNY) debt : €m 324 equivalent • USD (+ CNY) assets : €m 460 equivalent - There are still more assets than liabilities in USD zone (US + China) - In addition to that, there
Slide 8: Currency profile : evaluation
8 Currency profile : evaluation Matching principle: Proportionality of assets & liabilities by currency: • USD (+ CNY) debt : 75 % of total debt (31.12.03) • USD (+ CNY) assets : 37 % of total capital employed IR041217 - p8/77 Analysts’ day – (17 December 2004)
Slide 9: Currency profile : evaluation
9 Currency profile : evaluation Adjusting currency profile towards more proportionality • Hedging : Changing the currency profile by means of hedging instruments (e.g. cross currency swap) has an IFRS impact : revaluation of derivative more P&L volatility • Tax optimization : Changing currency profi
Slide 10: Currency profile – impact on overall cost of funding
10 Currency profile – impact on overall cost of funding Scenario analysis show only a limited impact of the currency profile on the WACC (Weighted Average Cost of Capital). 15 10 5 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 -5 to create shareholders value -10 Shareholdersvalu
Slide 11: Currency profile – conclusion
11 Currency profile Conclusion Bekaert can maintain its current currency profile of the consolidated debt : • USD denominated debt is a natural hedge, reducing the USD exposure of Bekaert: more assets in USD zone than liabilities. • Allocation of group debt over the legal entities is also driven by