Bekaert SA · EURONEXT:BEKB
Bekaert SA — Investor Presentation (December 2011)
36 slides from Bekaert SA's investor presentation, December 2011
Slide 1: Bekaert
® BEKAERT better together Bekaert December 2011
Slide 2: Content
Content Bekaert in essence Strategy review Annex: Trading update 3th quarter 2011 1 Half results 2011 1 December 2011
Slide 3: Bekaert in essence: Sustainable Profitable Growth
Bekaert in essence Sustainable Profitable Growth Worldwide market and technological leadership advanced metal transformation and coatings 2010 3Q 2011 Combined sales € 4.5 billion € 3.5 billion consolidated €b 3.3 €b 2.6 joint ventures €b 1.2 €b 0.9 1st half 2011 Operational cash flow € 853 million
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 December 2011
Slide 5: Bekaert in brief: market leadership in diverse sectors
Bekaert in brief: market leadership in diverse sectors Basic materials 4% Automotive Agriculture 33% 6% Equipment 7% Consumption 8% Energy Construction 24% 18% 4 December 2011
Slide 6: Strategy review
Strategy review Bekaert creates Sustainable Profitable Growth by focusing on key issues: - Diversified geographic presence with a broad product portfolio Continue investments in growth markets Be close to the customers Maintain a strategic presence in mature markets - Innovation Continue investments
Slide 7: Geographical expansion
Geographical expansion Over 80% of expansion capital is spent in emerging markets in order to support the future growth - Continue investments in the growth markets - Further increase of tire cord capacity in Emerging Europe and Asia - Broadening of the product offering in Asia (Xinyu, Qingdao Hansu
Slide 8: Geographical expansion: established and emerging markets
Geographical expansion: established and emerging markets 100 Emerging 74,2 75 71,5 50 28,5 25 25,8 Established 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 3Q 2011 Emerging Established 7 December 2011
Slide 9: With a focus on growth markets
With a focus on growth markets North America EMEA 24% 15% 41% 25% 2002 3Q11 2002 3Q11 Asia-Pacific 25% 9% Latin America 2002 3Q11 Automotive 26% 35% Energy & Utilities Construction 2002 3Q11 Agriculture, consumer goods, engineering and basic materials 8 December 2011
Slide 10: Innovation
Innovation - R&D increased by 17% in 1H 2011, mainly in Belgium and China - Doubling investment in innovation over the last 10 years, with simultaneous shift and focus on core competences - Sales product portfolio renewed with 50% in the last 10 years - Enhanced presence in sectors less sensitive to
Slide 11: Innovation: technological leadership
Innovation: technological leadership Focus on innovation • 80 million euro in-house R&D (3% consolidated sales) • International R&D team in Belgium (350 employees) • R&D in China (350 employees) and start up in India • About 2 000 patent rights with the right partners and priorities: • Customer focu
Slide 12: Operational excellence
Operational excellence - Continued focus on quality to differentiate us from our competitors - Customer focus to improve total value creation - Leverage propriety engineering department to ensure quality and cost competitive equipment - Implementation of cost reduction programs across all entities a
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® Coated wires Flexible pipes Sawing wire Tire cord 12 December 2011
Slide 14: Operational excellence: based on a strong financial structure
Operational excellence: based on a strong financial structure L/T guidance 1H 2011 2010 2009 2005 - 1990 – Actual 2004 Growth GDP + 15.9% 33.9% -8.5% 11.3% 1.5% ROIC > WACC > 15.1 > 8.0 21.3 > 8.6 10.5 > 8.5 12.6 > 8.2 6.5 < 9.3 EBITDA on sales 15% 19.2% 22.2% 15.8% 15.6% 11.8% EBIT 7-9% 13.0% 16.4%
Slide 15: Shareholder value
Shareholder value in % 25 20 15 10 5 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1H11 -5 WACC RoIC -10 14 December 2011
Slide 16: Operational excellence: cash flow
Operational excellence: cash flow Cash flow allocation In €m 800 700 600 - Capital investments 500 2011 :estimated at €m 260 400 2012: estimated at €m 180 300 200 100 - Depreciation and 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1H amortization 2011 estimated a
Slide 17: Influences on Bekaert stock price
Influences on Bekaert stock price Fact sheet 2010 31/10/11 Number of shares : 59 973 198 Average closing 53.82 63,20 Number of VVPR strips 12 645 201 High price 86.96 87.98 Average daily traded volume 289 000 Low price 32.86 27,80 Average daily traded value €m 15-20 Closing price 85.90 30,87 Market
Slide 18: Internationalized shareholder structure
Internationalized shareholder structure 2001 2011 Principal shareholder 40.1% 38.3% Institutional shareholdings 15.1% 48,3% Public (unidentified) 44.8% 13,4% Institutional (Belgium) 82% 10% Institutional (International) 18% 90% Rest 100% 100% Rest Ireland 90% 90% Japan Canada 80% 80% Switzerland 70%
Slide 19: Trading update 3Q
® BEKAERT better together Trading update 3Q 2011
Slide 20: Highlights third quarter 2011
Highlights third quarter 2011 - Economic slowdown in China offsets Bekaert’s performance in the rest of the world. - China affected by reduced growth and stringent credit restrictions - Continued low demand and increased price pressure in saw wire, driven by substantial overcapacity in the solar mar
Slide 21: Sales 3Q11
Sales 3Q11 in mio € 274 66 13 2 595 2 401 Consolidated 3 307 309 53 13 3 549 Combined 3Q10 Organic FX Acq 3Q11 - EMEA: All platforms performed well, with solid growth in automotive but substantial lower demand in solar energy markets - North America: Sustained demand and improved mix, except constru
Slide 22: Consolidated 3Q11 sales by segment
Consolidated 3Q11 sales by segment 2010 2011 variance share EMEA 797 907 +14% 35% North America 484 528 +9% 20% Latin America 233 269 +16% 10% Asia Pacific 887 893 +1% 35% Total 2 401 2 595 +8% 100% 1Q11 2Q11 3Q11 3Q10-3Q11 EMEA 307 308 293 +8% North America 176 178 172 +1% Latin America 82 90 97 +1
Slide 23: Combined 3Q11 sales by segment
Combined 3Q11 sales by segment 2010 2011 variance share EMEA 792 897 +13% 25% North America 478 519 +9% 15% Latin America 1 147 1 236 +8% 35% Asia Pacific 890 897 +1% 25% Total 3 307 3 350 +7% 100% 1Q11 2Q11 3Q11 3Q10-3Q11 EMEA 305 303 289 +7% North America 174 175 171 +1% Latin America 401 413 422
Slide 24: Mix analysis 3Q11
Mix analysis 3Q11 Consolidated sales Combined sales +8,1% +7,3% Volume +5,0% +4,4% Raw materials +6,5% +7,2% Price/mix 0% -2,2% FX -2,8% -1,6% Mergers and acquisitions -0,6% -0,4% EMEA North America Latin America Asia Pacific Consolidated +13,8% +8,7% +15,8% +0,6% Volume +1,9% +7,4% +7,7% +5,0% Raw
Slide 25: Outlook 2011
Outlook 2011 - Bekaert expects a growing impact from the global financial turbulence and the uncertain economic developments in most markets. - Increased competition, stringent credit restrictions and cost increases will continue to create challenging conditions in China. - In solar, substantial ove
Slide 26: Business update Half
® BEKAERT better together Business update 1 Half 2011
Slide 27: Highlights first half 2011
Highlights first half 2011 - Consolidated sales € 1.8 billion (+16%) Combined sales € 2.4 billion (+14%) - Gross profit € 448 million (margin 25,2%) EBITDA € 342 million (margin 19,2%) EBIT € 232 million (margin 13,0%) - Selling expenses: incremental reserves for bad debt for €m 21 Non-recurring cha
Slide 28: Business review
Business review - Consolidated sales increased with 16% versus strong first half in 2010 - Margin decline reflects weaker demand in China, combined with more competitive supply situation - EBITDA of € 342 million or 19.2% of sales, well above long-term target - Sustained investment in R&D (+17%) - C
Slide 29: Sales
Sales +18% -2% -0% 1 780 in mio € 283 -6 1 535 -32 Consolidated 317 11 6 2 412 2 113 Combined 15% -0% -0% - - 1H2010 Organic FX Acq 1H2011 - Organic growth reflects continued volume growth and better mix/pricing, except for sawing wire - Negative exchange rate effect in consolidated businesses mainl
Slide 30: Sales by segment
Sales by segment First Half 2011 Consolidated sales Combined sales In mio € variance in mio € variance EMEA 614.1 +17% 607.6 +16% North America 353.9 +13% 348.8 +13% Latin America 172.5 +20% 814.1 +12% Asia Pacific 639.1 +16% 641.3 +16% Total 1 779.6 +16% 2 411.8 +14% Consolidated sales Combined sal
Slide 31: Business update: segment review EMEA
Business update: segment review EMEA Europe Other Industries • Strong growth, mainly in automotive 23% Automotive • Other platforms performed well 35% • Margins impacted by : • Upscale industrial activities Construction • Start-up costs expansions in 19% Belgium, Slovakia and Russia Energy & Utiliti
Slide 32: Business update: segment review North America
Business update: segment review North America Back on course Other Industries • Solid organic sales growth 27% Automotive • Strong demand in most platforms as 40% automotive and energy related markets, as well as for specialty Construction 13% films Energy & Utilities • Construction at a low level 2
Slide 33: Business update: segment review Latin America
Business update: segment review Latin America A balanced performance Other Automotive 18% • Strong organic growth in most platforms Industries 38% (world cup 2014, Olympics 2016) • Strong sales in Venezuela • Weak construction market Energy & • Stable solid margins Utilities 16% Construction 28% Joi
Slide 34: Business update: segment review Asia Pacific
Business update: segment review Asia Pacific Other Industries China: maintaining a steady course 10% Construction • Lower growth rates due to Government 4% measures for more controlled growth • Lower demand for tire cord in China due to Automotive 50% overcapacity in the transport markets • Signific
Slide 35: Outlook
Outlook Prudent short to mid-term outlook due to uncertain global financial and economic conditions Continued measures to defend our market position in a more competitive environment, mainly in China Early signs of a demand pick-up indicate that the solar market downturn might have bottomed out Conf
Slide 36: Contacts
Contacts 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 repor