Bekaert Sa · EURONEXT:BEKB
Bekaert Sa — Investor Presentation (September 2021)
58 slides from Bekaert Sa's investor presentation, September 2021
Slide 1: Bekaert Investor Presentation September 2021
Bekaert Investor Presentation September 2021
Slide 2: Introduction to Bekaert
Introduction to Bekaert OVERVIEW • The global leader in steel wire transformation and coating technologies • Leading market position across diverse markets and geographies 1 800 • Rich 140-year history of value creation and technological innovation patents and patent • Global presence with deep unde
Slide 3: Global presence across diverse end markets
Global presence across diverse end markets Combined sales, including sales of joint ventures in Brazil of ~€0.7Bn in 2020 2020 SALES BY END MARKET 23% 14% 33% 44% 19% Tire & Automotive Construction - Infrastructure 30% 9% Agriculture 9% Basic materials 8% Energy & utilities 6% Equipment 5% Consumer
Slide 4: 140+ years of innovation, growth and value creation
140+ years of innovation, growth and value creation PIONEERING INNOVATING GROWING PERFORMING PURSUING Established in Belgium in First patent application in Global expansion programs Performance Partnerships and 1880 as a small barbed wire June 1881 throughout history culture collaboration manufactur
Slide 5: Bekaert Group Executive
Bekaert Group Executive Leading with a shared ambition Oswald Schmid CEO Stijn Vanneste Arnaud Lesschaeve Curd Vandekerckhove Yves Kerstens Divisional CEO Divisional CEO Divisional CEO Divisional CEO Steel Wire Solutions Rubber Reinforcement Bridon-Bekaert Ropes Group Specialty Businesses Chief Oper
Slide 6: Technological leadership drives innovation
Technological leadership drives innovation € ~60 million International R&D teams in 1 800 patents R&D annually Belgium – China – India – UK and patent rights LEADERSHIP APPROACH STRATEGIC PARTNERSHIPS Co-creation with customers and suppliers Internal and external ecosystem to power business engi
Slide 7: Preferred partner
Preferred partner For the most challenging projects and the most innovative solutions HAMPTON ROADS, BRIDGE & PROVENCE GRAND LARGE, SYNTHETIC DRAGLINE BHP, LTSA TUNNEL, VIRGINIA, US FRANCE AUSTRALIA TRICO Dramix® steel fibers are a solution to Steel and synthetic mooring lines The largest landside c
Slide 8: Strategy Discussion
STRATEGY DISCUSSION Investor presentation - Bekaert 8
Slide 9: Growth strategy
Growth strategy Drive sustainable, value creating growth Megatrends Focus on key markets Leadership positions Moving beyond the core • New mobility • Mobility • Partner of choice • Closer to the end • Renewable energy • Construction & infrastructure • Technology competences customer • Urbanization •
Slide 10: Bekaert's strategic imperatives
Bekaert’s strategic imperatives We PERFORM We TRANSFORM We GROW Execute relentlessly Continually optimize Grow organically, to generate strong our business with innovation operating portfolio and driving sales growth, performance while innovate to meet our and inorganically maintaining financial cus
Slide 11: 2021 H1 results
2021 H1 results Strong sales – vigorous margin growth – strong balance sheet We PERFORM We TRANSFORM We GROW Consolidated Sales uEBIT% uROCE Operating FCF Net Debt +30% +7.2ppt +19.2ppt x2.5 € -436m 2.6 2.5 0.7 H1 2019 H1 2020 H1 2021 H1 2019 H1 2020 H1 2021 H1 2019 H1 2020 H1 2021 H1 2019 H1 2020 H
Slide 12: Rubber Reinforcement
Rubber Reinforcement Market leading position with 30% share of global tire cord market; providing innovative solutions We PERFORM We TRANSFORM We GROW that help our customers sustainably transform the industry In mln € % on sales THROUGH OUR GROWTH DRIVERS LOCAL SERVICE GLOBAL FOOTPRINT 160 20% tire
Slide 13: Steel Wire Solutions
Steel Wire Solutions Solidifying our diversified portfolio through business optimization, technology leadership and We PERFORM We TRANSFORM We GROW strategic partnering in growth areas In mln € % on sales THROUGH OUR GROWTH DRIVERS LOCAL SERVICE GLOBAL FOOTPRINT 140 18% technology 120 16% infrastruc
Slide 14: Specialty Businesses
Specialty Businesses Expanding our technology leadership position in growth markets and pushing the boundaries We PERFORM We TRANSFORM We GROW of application opportunities; 40% global market share for concrete reinforcement fibers and thin metal fibers In mln € % on sales THROUGH OUR GROWTH DRIVERS
Slide 15: Bridon-Bekaert Ropes Group
Bridon-Bekaert Ropes Group The leading innovator and provider of the best performing ropes and advanced cords globally We PERFORM We TRANSFORM We GROW In mln € % on sales THROUGH OUR GROWTH DRIVERS LOCAL SERVICE GLOBAL FOOTPRINT 30 20% floating wind turbine projects 18% oil & gas investments 2 337 e
Slide 16: Key elements of our business strategy
Key elements of our business strategy We PERFORM We TRANSFORM We GROW PORTFOLIO ORGANIZATIONAL MANAGEMENT DIGITAL INNOVATION SUSTAINABILITY CAPABILITIES • Invest for growth • Leadership • Operations • Continuous • Clear commitment to: improvement • Scale-up • Performance • Customer − Environment man
Slide 17: We are actively managing our business portfolio
We are actively managing our business portfolio We PERFORM We TRANSFORM We GROW ACTIVE PORTFOLIO MANAGEMENT ACTION FOCUS BUSINESS MIX Strategic Invest for Exit loss-making businesses without turnaround Sales EBITDA potential Scale-Up Growth diamond sawing wire commodity activities of SWS Tur
Slide 18: Thoughtful approach to accretive growth
Thoughtful approach to accretive growth We PERFORM We TRANSFORM We GROW Develop innovative services Move into services that address mega trends. Go downstream Move beyond the core and closer to the end customer by providing differentiated services and solutions. Develop adjacencies v Create opportun
Slide 19: Our business focus is aligned with mega trends
Our business focus is aligned with mega trends We PERFORM We TRANSFORM We GROW NEW MOBILITY Light-weight, smart and green materials for tires URBANIZATION Advanced cords for vertical city requirements; smart glazing solutions with thin fiber technologies; low-carbon concrete reinforcement RENEWABLE
Slide 20: Creativity is at the center of our strategy
Creativity is at the center of our strategy DIGITALIZATION INNOVATION Beyond digital working to Data intelligence platforms Beyond products to New solutions & services Beyond existing areas of expertise to Emerging subsegments CREATIVITY BEYOND STEEL to shape the way we live and move CULTURE Beyond
Slide 21: Investing in innovative solutions
Investing in innovative solutions We PERFORM We TRANSFORM We GROW STRONG INVESTMENTS REBALANCING OUR PIPELINE TO INNOVATE WITH THREE BUSINESS ENGINES Focused and prioritized €60M Cost and process improvements World-class operations E0 Efficient - accelerate through digital and smart and remote servi
Slide 22: Digitalization is employed across the organization
Digitalization is employed across the organization We PERFORM We TRANSFORM We GROW CUSTOMER PRODUCT PROCESS OPERATION Customer Data-driven Smart Accelerated Enterprise Intelligent End-to-End Experience pricing solutions R&D 2.0 production Supply chain Engagement Advanced Data driven Digital twins In
Slide 23: Focused on delivering sustainable solutions
Focused on delivering sustainable solutions We PERFORM We TRANSFORM We GROW CUSTOMERS COMPETITIVE ADVANTAGE • Increasing requirements on suppliers • First mover advantage • Sustainable solutions outgrow others • Significant cost savings • End-industry disruptions • Opportunity to differentiate PEOPL
Slide 24: Committed to ambitious sustainability goals
Committed to ambitious sustainability goals 2030 goals vs. 2019 baseline We PERFORM We TRANSFORM We GROW ENVIRONMENTAL SOCIAL GOVERNANCE Towards Carbon Neutrality Working conditions Highest Ethical Standards Ethics and Code of Conduct -45% Reduce GHG emissions in line with Science Based Targets 0 St
Slide 25: Innovation in action
Innovation in action We PERFORM We TRANSFORM We GROW DIGITALIZATION NEW MOBILTY CLEAN ENERGY Together with VisionTek, BBRG developed the first Bekaert invested in Cargo Sous Terrain and is Bekaert participates in a consortium to develop mobile 3D rope measuring and visioning technology advisor on th
Slide 26: Enabling new, sustainable solutions
Enabling new, sustainable solutions We PERFORM We TRANSFORM We GROW ENERGY AND UTILITIES Beyond current markets and solutions Digital Twin Synthetic & hybrid Strategic Bezinox® models solutions Partnerships cable armoring Enabling the future Investor presentation - Bekaert 26
Slide 27: Reducing environmental impact
Reducing environmental impact We PERFORM We TRANSFORM We GROW Dramix® solutions reducing input intensity SigmaSlabTM, a new Dramix® solution co-developed with post-tensioning leader CCL Heavy, labor-intensive More efficient and easy to use traditional reinforcement steel fiber reinforced concrete Co
Slide 28: Better together
Better together With our customers, employees, shareholders and communities We make our We are truly We commit to We care for customers succeed better together high performance the world around us Customer centricity is at the The true strength of Bekaert lies Our commitment to high We develop solut
Slide 29: Financial Outlook
Financial Outlook Investor presentation - Bekaert 29
Slide 30: Sales growth driven by strategic focus
Sales growth driven by strategic focus STRATEGIC FOCUS consolidated sales in billions of euro • market positioning • mix improvements • pricing discipline • customer success • operational excellence Investor presentation - Bekaert 30
Slide 31: Increased profit from sales growth and stronger business model
Increased profit from sales growth and stronger business model SALES GROWTH underlying EBIT in millions of euro and as a % on sales • in the right markets • with higher-end solutions • with successful customers • at the right price BUSINESS MODEL • Improved footprint • structural savings • high degr
Slide 32: Cash flow generation is at the center of our strategy
Cash flow generation is at the center of our strategy WORKING CAPITAL CAPITAL ALLOCATION • Decreased by 40% in 2 years (YE 2020 vs YE 2018) • ROCE improved by +50% in 2 years (FY 2020 vs FY 2018) • Average working capital on sales decreased • H1 2021: very high ROCE of 27% from 20% (FY 2018) to 13%
Slide 33: Solid cash generation from higher profitability
Solid cash generation from higher profitability SOLID CASH GENERATION OCF in millions of euro • Objectives: − step up OCF (1) − FCF yield (2) of ~100% • Funding opportunities to grow: − organic and inorganic − investments in innovation, sustainability, digital − dividend (1) OCF = uEBITDA + delta wo
Slide 34: Continuous focus on maintaining conservative balance sheet
Continuous focus on maintaining conservative balance sheet net debt on uEBITDA Investor presentation - Bekaert 34
Slide 35: Liquidity position is strong and debt maturities are balanced
Liquidity position is strong and debt maturities are balanced Investor presentation - Bekaert 35
Slide 36: Focused on shareholder returns through dividend policy
Focused on shareholder returns through dividend policy 250 80% 200 60% 150 Pay-out ratio 45% In millions of € 40% 40% 100 20% 50 0 0% 2011 2013 2014 2015 2016 2017 2018 2019 2020 Result Attributable to the Group Dividend pay-out Pay-out policy over the years Average pay-out % over the years At the A
Slide 37: Value creation in our financial projections 2021-2026
Value creation in our financial projections 2021-2026 Consolidated uEBIT FCF Net debt sales margin yield leverage Restated mid-term targets 3%+ CAGR 9%-11% ~100% < 1.5 (2022-2026) organic through the cycle FCF/net result net debt/uEBITDA Restated short-term € ~4.6 bln 10%+ < 1.0 guidance (2021) Chan
Slide 38: Conclusion
Conclusion Investor presentation - Bekaert 38
Slide 39: Why invest in Bekaert
Why invest in Bekaert PERFORMANCE-DRIVEN MARKET LEADER • Delivering on priorities and focused on higher value opportunities • Global scale, partnerships and intellectual property to protect and enhance position in key end markets FOCUSED EXECUTION OF STRATEGIC PLAN • Strong track record of consisten
Slide 40: Save the date
Save the date Third quarter trading update 2021 19 November 2021 Full year results 2021 25 February 2022 Integrated report 2021 22 March 2022 Capital Markets Day - See the content or watch the replay of the of 28 May 2021 on Our performance Bekaert Investment Case – IR presentations – Let’s Meet Rec
Slide 41: Contact
Contact Investor Relations: Katelijn Bohez Dries Van Hamme katelijn.bohez@bekaert.com dries.vanhamme@bekaert.com Documentation: Christine Clarysse Christine.clarysse@bekaert.com Shareholders, investors and other interested parties wishing to receive the Group's annual report, the shareholders guide,
Slide 42: H1 2021 Financial Supplement
H1 2021 Financial Supplement Investor presentation - Bekaert 42
Slide 43: Our business context in Q2 2021
Our business context in Q2 2021 Macro-economic developments • Significant surge of demand • Global supply chain interruptions • Commodity price increases • Reverse globalization trend • Continued uncertainties about Covid-19 Investor presentation - Bekaert 43
Slide 44: Our business context in Q2 2021
Our business context in Q2 2021 Demand developments for Bekaert • Very strong tire markets in EMEA and India and pick-up in North America • Tailing off demand in China at the end of Q2 • Demand from automotive OEM not yet to pre-Covid levels due to global chip shortage • Strong demand from construct
Slide 45: Focus and priorities in H1 2021
Focus and priorities in H1 2021 Actions geared towards three main areas Further development and deployment of our strategic transformation o Capture the growth from volume recovery to pre-Covid-19 levels Strategy validation and start of implementation: ̵ global demand rebound ̵ customer-centric and
Slide 46: 2021 H1 results
2021 H1 results Strong sales – vigorous margin growth – strong balance sheet Consolidated Sales uEBIT% uROCE Operating FCF Net Debt +30% +7.2ppt +19.2ppt x2.5 € -436m 2.6 2.5 0.7 H1 2019 H1 2020 H1 2021 H1 2019 H1 2020 H1 2021 H1 2019 H1 2020 H1 2021 H1 2019 H1 2020 H1 2021 H1 2019 H1 2020 H1 2021 €
Slide 47: 2021 H1 Sales
2021 H1 Sales In millions of € Consolidated sales H1 2020 H1 2021 Variance Organic FX Rubber Reinforcement 709 991 +40% +43% -3% Steel Wire Solutions 639 849 +33% +35% -3% Specialty Businesses 185 227 +23% +24% -1% BBRG 229 236 +3% +5% -1% Group 9 3 - - - Total consolidated sales 1 770 2 306 +30% +3
Slide 48: Consolidated income statement: key figures
Consolidated income statement: key figures In millions of € Underlying Reported H1 2020 H1 2021 H1 2020 H1 2021 Sales 1 770 2 306 1 770 2 306 Cost of sales (1 518) (1 833) (1 521) (1 847) Gross profit 252 473 249 459 Selling expenses (81) (88) (81) (87) Administrative expenses (59) (78) (60) (76) R&
Slide 49: EBIT-Underlying bridge: Consolidated view
EBIT-Underlying bridge: Consolidated view In millions of € 300 16 280 (13) 260 61 240 220 200 65 180 285 160 140 120 65 100 80 92 0 60 EBIT-Underlying FX effects Inventory Volume Price-Mix Structural cost Other EBIT-Underlying H1 2020 Valuation improvement H1 2021 actions Investor presentation - Bek
Slide 50: Rubber Reinforcement
Rubber Reinforcement SALES uEBIT H1|H2 MARGINS Joint Venture Brazil € 81 mln sales 18.3% 18.4% +58% 15.3% 14.4% 11.1% 13.8% CAPEX 991 12.6% 139 € 12 mln 709 9.1% 8.2% 28 3.9% uROCE H1|20 H1|21 H1|20 H1|21 H1|19 H2|19 H1|20 H2|20 H1|21 uEBIT% uEBITDA% 24.6% Investor presentation - Bekaert 50
Slide 51: Steel Wire Solutions
Steel Wire Solutions SALES uEBIT H1|H2 MARGINS Joint Venture Brazil € 397 mln sales +57% 15.9% 11.6% 10.2% 13.4% 849 CAPEX 639 7.1% 7.1% € 11 mln 116 8.0% 6.0% 40 3.5% 3.2% uROCE H1|20 H1|21 H1|20 H1|21 H1|19 H2|19 H1|20 H2|20 H1|21 uEBIT% uEBITDA% 43.2% Investor presentation - Bekaert 51
Slide 52: Specialty Businesses
Specialty Businesses SALES uEBIT H1|H2 MARGINS CAPEX 20.4% € 8 mln 16.6% 15.7% 15.8% 14.6% 227 17.3% 185 40 12.0% 12.4% 12.9% 10.1% 24 uROCE H1|20 H1|21 H1|20 H1|21 H1|19 H2|19 H1|20 H2|20 H1|21 35.4% uEBIT% uEBITDA% Investor presentation - Bekaert 52
Slide 53: Bridon-Bekaert Ropes Group
Bridon-Bekaert Ropes Group SALES uEBIT H1|H2 MARGINS CAPEX 17.2% 16.5% € 10 mln 12.7% 229 236 10.0% 8.0% 24 23 9.8% 10.3% 5.1% uROCE 2.6% 2.3% H1|20 H1|21 H1|20 H1|21 H1|19 H2|19 H1|20 H2|20 H1|21 10.9% uEBIT% uEBITDA% Investor presentation - Bekaert 53
Slide 54: Consolidated income statement: key figures
Consolidated income statement: key figures ETR1 In millions of € H1 2020 H1 2021 53% EBIT 87 288 26% Interest income / expense (28) (23) H1|20 H1|21 Other financial income and expenses (15) 4 Share in JVs2 Result before taxes 44 268 34 Income taxes (23) (71) 13 Result after taxes (consolidated compa
Slide 55: Working capital: key figures
Working capital: key figures In millions of € WORKING CAPITAL H1|20 YE|20 H1|21 1000 896 757 758 720 683 667 626 660 535 500 13% 0 Working capital on sales -500 -663 -809 -1000 -987 -1500 inventories accounts accounts total receivable payable working capital Investor presentation - Bekaert 55
Slide 56: Key figures per share
Key figures per share H1 2020 H1 2021 Share price 17.45 37.58 Number of existing shares 60 408 441 60 414 841 Book value 22.61 28.23 x6 Earnings per share (EPS) 0.59 3.66 EPS Weighted average number of shares 56 543 997 56 813 437 Investor presentation - Bekaert 56
Slide 57: Business units with multiple growth drivers
Business units with multiple growth drivers Consolidated sales by business unit (FY 2020) Rubber Reinforcement (RR) Steel Wire Solutions (SWS) Specialty Businesses (SB) Bridon-Bekaert Ropes Group (BBRG) Tire cord, bead wire, hose Steel wire products and Building products, fiber Ropes and advanced re
Slide 58: ‘® BEKAERT
‘® BEKAERT