Bekaert Sa · EURONEXT:BEKB
Bekaert Sa — H1 2024 Earnings Presentation
34 slides from Bekaert Sa's earnings presentation, Jul 26, 2024
Slide 1: Bekaert H1 2024 Results
Bekaert H1 2024 Results 26 July 2024
Slide 2: Safe harbor
Safe harbor 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 results
Slide 3: Agenda
Agenda 1 Introduction and highlights Yves Kerstens, CEO 2 Financial review Taoufiq Boussaid, CFO Yves Kerstens, CEO 3 Strategic and operational review Yves Kerstens, CEO 4 Outlook Yves Kerstens, CEO 5 Q&A Taoufiq Boussaid, CFO 3
Slide 4: Introduction and highlights
Yves Kerstens, CEO Introduction and highlights 4
Slide 5: Key developments – H1 2024
Key developments – H1 20241 Another period of robust results delivery Ongoing strategic execution One of the top 500 most • Positive M&A momentum – acquired BEXCO sustainable companies in the world • Efficiency gains & structural cost improvements across the business Improving business mix • Three B
Slide 6: H1 2024 financial highlights
H1 2024 financial highlights Robust results delivery despite challenges Sales EBITu2 EBITu margin improvement -11%1 -9%1 +20bps1 €2.1bn €204m 9.9% Underlying EPS Net debt Net debt / EBITDAu -1%1 -25%1 -0.2x1 €3.04 €399m 0.7x 1 All comparisons are relative to H1 2023 2 EBITu is underlying EBIT as def
Slide 7: Strategic developments in H1 2024
Strategic developments in H1 2024 Recycled-steel tires Critical approval received Flintstone fully integrated Goodyear unveiled a tire comprised of Bekaert obtained SFRC1 guidelines for Flintstone’s connector and tensioner 90% sustainable materials using Segmental Lining in Delhi (India), a key prod
Slide 8: Financial review
Taoufiq Boussaid, CFO Financial review 8
Slide 9: Consolidated sales
Consolidated sales Robust results delivery despite challenges Consolidated Sales Variance (%) Raw (in millions of €) Material Price- + mix + Volume = Organic + FX + M&A = Growth & energy 0.4 2,318 2,060 -1.5 -1.0 -11.1% -5.1 -3.8 -10.4 -11.1 RM, energy H1 2023 H1 2024 Price-mix + Volume = Organic +
Slide 10: Rubber Reinforcement H1 2024 Review
Rubber Reinforcement H1 2024 Review Improved operational performance and profitability on lower volumes in a challenging environment -4% volumes vs H1 2023 • Lower sales from reversal of raw material cost inflation • Price pressure in China in more commoditized products Sales EBITu +2% volume growth
Slide 11: Steel Wire Solutions H1 2024 Review
Steel Wire Solutions H1 2024 Review Strong operational and business mix improvements from continued strategic transformation -4% volumes vs H1 2023 • Lower sales from reversal of raw material cost inflation Sales EBITu in €m in €m, % +4% volume growth vs H2 2023 • Strong volume growth vs H2 2023 in
Slide 12: Specialty Businesses H1 2024 Review
Specialty Businesses H1 2024 Review Strong volume growth in Sustainable Construction, Sustainable Construction Hydrogen ramp-up continues despite sector delays +4% volume growth vs H1 2023 • Improved market penetration • Strong order book c50% volumes from 4D/5D Dramix® Sales EBITu in €m in €m, % •
Slide 13: Bridon-Bekaert Ropes Group H1 2024 Review
Bridon-Bekaert Ropes Group H1 2024 Review Operational issues and project delays in Steel Ropes businesses, recovery expected during H2 2024 Issues fully identified, recovery expected during H2 2024 • Steel Ropes businesses in US & UK impacted by Sales EBITu manufacturing issues and re-phasing of pro
Slide 14: EBITu bridge
EBITu bridge Improved margins from plant utilization, cost efficiencies and mix offsetting lower volumes and operational challenges in Steel Ropes in millions of € EBITu margin EBITu margin 9.7% 9.9% +20bps 226 410 204 * Net of FIFO inventory valuation of +€37m 14
Slide 15: Consolidated income statement – key figures
Consolidated income statement – key figures One-off items H1 2023 H1 2024 In €m Reported Reported €13m EBIT 220 192 €5m Interest income / expense -14 -9 H1 2023 H1 2024 Other financial income and expenses -21 -8 Result before taxes 185 174 EBITu1 Income taxes -45 -44 9.7% 9.9% Effective tax rate 24%
Slide 16: Working capital management
Working capital management Continued focus on working capital In millions of €, average as % of sales H1 2023 H1 2024 937 884 819 750 763 717 • Total working capital down €56m vs H1 2023 20.5% 20.3% • Inventories and accounts receivables 17.1% 15.6% 16.4% 16.1% decreased, partly offset by a decrease
Slide 17: Stable cash flow generation
Stable cash flow generation Allowing the group to invest in growth and to enhance shareholder returns Stable cash flows from operating activities Cash Flows from Operating Activities (€m) Free Cash Flow1 (€m) • €116m in H1 2024 • Despite lower sales and operational challenges in Steel Ropes business
Slide 18: Strategic review
Yves Kerstens, CEO Strategic review 18
Slide 19: Strategic overview
Strategic overview Strategic objectives H1 2024 scorecard 1 2 • Margin up +20bps Move toward market driven, Transform business portfolio to despite lower sales focused & self-sufficient BUs capture growth opportunities • Three BUs at >10% margin level 3 4 Perform • Stable cash generation Drive innov
Slide 20: Prioritizing large and growing end-markets
Prioritizing large and growing end-markets Further clarity on SWS’s priority end-markets €7bn1 €7bn1 €5bn1 €2bn1 €1bn1 Tire Energy Advanced Lifting Sustainable Transmission & Reinforcement Transition and Mooring Construction Performance Wires Growth driven by Significant growth Strong growth Fast gr
Slide 21: Energy Transition – significant opportunity remains
Energy Transition – despite industry slowdown >12GW green H2 projects reached significant opportunity remains Final Investment Decision Bekaert’s modular capacity build-up and customer backing key to navigating industry dynamics Historical growth for various technologies compared with low-carbon hyd
Slide 22: Advanced Lifting & Mooring – Acquisition of BEXCO
Advanced Lifting & Mooring – Acquisition of BEXCO strengthens our position High quality business and template for future acquisitions BEXCO at a glance • Acquired BEXCO for cash consideration of c€40m • Leading global player with >50 years experience • Combination of Bekaert and BEXCO creates a synt
Slide 23: Operational review
Yves Kerstens, CEO Operational review 23
Slide 24: Sustainable Construction – continued adoption of Dramix
SpB Sustainable Construction – continued adoption of Dramix® +4% volume growth despite sluggish overall construction market Key developments Engineering capabilities critical New applications Innovative applications in mature markets • High tensile fibers • Residential rafts in Germany (Stuttgart &
Slide 25: BBRG operational update
BBRG operational update Issues only in Steel Ropes businesses in US & UK A-Cords and Synthetics unaffected Challenges related to the closure of Pointe-Claire plant (Canada) and Gelsenkirchen (Germany) and transfer of operations respectively to US and UK steel rope plants • Delays from transferred eq
Slide 26: Summary and outlook
Yves Kerstens, CEO Summary and outlook 26
Slide 27: H1 2024 summary
H1 2024 summary1 Another period of robust results delivery Ongoing strategic execution One of the top 500 most • Positive M&A momentum – acquired BEXCO sustainable companies in the world • Efficiency gains & structural cost improvements across the business Improving business mix • Three BUs at >10%
Slide 28: Outlook
Outlook • H1 2024 results are another milestone in the ongoing transformation of the group • Resilient financial performance in H1 and robust financial position gives us confidence in our ability to further deliver on our strategic and financial priorities • However, there have been delays to some g
Slide 29: Q&A
Q&A 29
Slide 30: Appendix
Appendix 30
Slide 31: Driving growth and expansion of our Sustainable Solutions portfolio
Driving growth and expansion of our Sustainable Solutions portfolio Multiple end-markets Sustainable Construction Energy Transition Lifting & Mooring 65%1 ST/UT tire cord Dramix® Currento® Synthetic ropes Higher tensile strength Up to 50% less steel and Critical element for green Synthetic mooring r
Slide 32: Setting up Market Driven Verticals to unleash our full potential
Setting up Market Driven Verticals to unleash our full potential Our ambition remains the same Be the leading partner for shaping the OUR CAPABILITIES OUR FOCUS way we live and move – safe, smart, • Our brands: Currento®, Dramix®, Bridon® ... • Digitally forward, sustainability-focused & sustainable
Slide 33: Alternative Performance Measures
Alternative Performance Measures Definitions Metric Definition Capital employed (CE) Working capital + net intangible assets + net goodwill + net property, plant and equipment + net RoU Property, plant and equipment. The weighted average CE is weighted by the number of periods that an entity has con
Slide 34: Bekaert
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