Bekaert Sa · EURONEXT:BEKB
Bekaert Sa — FY2023 Earnings Presentation
34 slides from Bekaert Sa's earnings presentation, Mar 1, 2024
Slide 1: Bekaert FY 2023 Results
Bekaert FY 2023 Results 1 March 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 and operational review Taoufiq Boussaid, CFO Yves Kerstens, CEO 3 Strategy review Yves Kerstens, CEO 4 Q&A Taoufiq Boussaid, CFO 3
Slide 4: Introduction and highlights
Yves Kerstens, CEO Introduction and highlights 4
Slide 5: 2023 Highlights
2023 Highlights Good financial results1; delivering strong cash generation and improved margins Ramping-up higher margin and growth activities • Strong focus on price and mix optimization across BUs • BBRG delivering significant margin improvement with EBITu2 margin of 12.3% (+200bps) • Increased pe
Slide 6: 2023 Financial highlights
2023 Financial highlights Improved margins despite lower sales; strong cash flows and low leverage Sales growth EBITu2 growth EBITu margin improvement -14% -5% +80bps 2022 vs 20231 2022 vs 20231 2022 vs 20231 €4.3bn €388m 9.0% 2023 sales 2023 EBITu 2023 EBITu margin Working capital Free Cash Flow (F
Slide 7: Continue to progress ESG ambitions
Continue to progress ESG ambitions Ongoing recognition from ESG rating agencies 80% Rating % Sales from Sustainable Solutions2 Protect the Planet Latest rating agency 70% >65% B 46% Reduction in scope 1 and 2 GHG 60% emissions in line with science- 751 based targets by 2030 >50% 50% AA c45% 20% 48 4
Slide 8: Financial review
Taoufiq Boussaid, CFO Financial review 8
Slide 9: Consolidated sales
Consolidated sales Robust performance despite challenging end markets Consolidated Sales Variance (%) (in millions of €) Price-mix + Volume = Organic + FX = Growth 5,004 4,328 -3.7 -3.0 -13.5% -6.7 -10.5 -13.5 2,198 1.3 1,881 -4.0 Rubber Reinforcement -14.4% -10.3 -11.6 -14.4 1,427 -1.9 Steel Wire S
Slide 10: Rubber Reinforcement 2023 Review
Rubber Reinforcement Strong volumes in Asia and mix and cost improvements more than offset lower demand in EU and NAM 2023 Review Sales EBITu • Volumes ahead of last year (+1.3%) in €m in €m, % • Strong volume recovery in China and continued growth in India 9.6% • Lower volumes in Europe and North A
Slide 11: Steel Wire Solutions 2023 Review
Steel Wire Solutions Improved margin mix in a context of demand decline across segments except Energy and Utilities Sales1 EBITu1 2023 Review in €m in €m, % • Strong pricing and cost management mitigated 7.5% volume declines and cost inflation 6.8% • Improved margins from increased focus on attracti
Slide 12: Specialty Businesses 2023 Review
Specialty Businesses Good progress in Dramix® and Currento® against strong comparative year 2023 Review • Construction Decarbonization: Sales EBITu • Sales reduction broadly in-line with normalization of input costs in €m in €m, % • New tunnel projects (India and China) and higher adoption for indus
Slide 13: Bridon-Bekaert Ropes Group 2023 Review
Bridon-Bekaert Ropes Group Strong price and mix performance despite lower volumes, delivering further margin improvements Sales EBITu 2023 Review in €m in €m, % • Strong demand in Mining and Oil & Gas end markets 12.3% offsetting demand decline in construction in China 10.3% • Strong focus on pricin
Slide 14: EBITu bridge
EBITu bridge Significant contribution from price and mix offsetting the impact of lower volumes in millions of € 459 410 388 * Net of FIFO inventory valuation of €-48m 14
Slide 15: Consolidated income statement – key figures
Consolidated income statement – key figures One-off items 2022 2023 In €m Reported Reported €93m EBIT 317 334 €54m Interest income / expense (30) (27) 2022 2023 Other financial income and expenses (10) (39) Result before taxes 278 268 EBITu1 Income taxes (74) (62) €410m €388m Effective tax rate 27%
Slide 16: Working capital management
Working capital management Continued focus on working capital In millions of €, average as % of sales1 2022 2023 967 789 694 676 • Total working capital down €35m vs 2022 637 641 20.3% • Average working capital on sales 18.8% 15.4% 15.2% increased to 15.2% as a result of: 14.1% 12.0% • 2022 inflated
Slide 17: Strong cash flow generation
Strong cash flow generation Allowing the group to invest in growth and to enhance shareholder returns Cash Flows from Operating Activities (€m) Free Cash Flow1 (€m) Strong cash flows from operating activities 440 • €440m in 2023 (+29% y-o-y) • Improved working capital management 340 • Lower income t
Slide 18: Commitment to significant shareholder returns
Commitment to significant shareholder returns Dividend per share (€) +80% Total returns of more than €400m (2022-2023) 1.65 1.80 Dividend grown materially... 1.50 1.00 • +50% 2021 vs 2020 • +10% 2022 vs 2021 2020 2021 2022 2023 ...alongside significant share buyback program (€240m) Total returns to
Slide 19: Operational and strategy review
Yves Kerstens, CEO Operational and strategy review 19
Slide 20: Delivering our strategy to date
Delivering our strategy to date We Perform We Transform We Grow Financially Products and portfolio Higher margin applications 20
Slide 21: Fundamental and sustainable improvement in margin and portfolio mix
Fundamental and sustainable improvement in margin and portfolio mix EBITu margin (%) EBITu breakdown +340bps 10.6% 9.0% 23% 8.1% 40% Growth 7.2% platforms1 BBRG and SpB 5.6% 77% 60% Core businesses1 RR and SWS 2019 2020 2021 2022 2023 2019 2023 21 1 Core businesses = Rubber Reinforcement (RR) and St
Slide 22: Continue to implement business improvements across the group
Continue to implement business improvements across the group Ongoing production Procurement Operational excellence rationalization − Improved buying throughout − Simplification of global − Closure of RR plant in China and 2023, especially in Freight and maintenance protocols and best closing SWS pla
Slide 23: Improved price and mix from innovative products
Improved price and mix from innovative products Further innovation across all business units Rubber Steel Wire Specialty BBRG Reinforcement Solutions Businesses • c50% of sales from • Growing demand for • First sales of higher tensile • Installed new ropes stronger tensile cords armoring wires for d
Slide 24: Strategic focus for 2024
Strategic focus for 2024 Our ambition is to be the leading partner for shaping the way we live and move – safe, smart and sustainable Developing Where we How we will win in The key capabilities management will play the chosen markets we will need capabilities ✓ Create and build highly differentiated
Slide 25: Our chosen markets
Our chosen markets Prioritizing large and growing end-markets €7bn1 €7bn1 €5bn1 €2bn1 Tire Energy Advanced Lifting Construction Reinforcement Transition and Mooring Decarbonization Growth driven by Significant growth Strong growth Fast growing population and from trends of outlook in targeted constr
Slide 26: Developing portfolio of valuable brands to drive growth
Developing portfolio of valuable brands to drive growth Tire Energy Advanced Energy Construction Lifting and Reinforcement Transition Transition Mooring Decarbonization Established Bekaert tire cord & bead wire Currento® Bridon® Dramix® brands powered by Global market leader in tire Porous transport
Slide 27: Summary and outlook
Yves Kerstens, CEO Summary and outlook 27
Slide 28: 2023 Summary
2023 Summary Resilient financial performance despite weaker conditions in many end markets Pricing discipline and commercial execution • Fast-paced tactical pricing response • EBITu margin 9.0% (+80bps), driven by improved business mix and cost efficiencies Improving business mix from innovative pro
Slide 29: Outlook
Outlook The Group remains confident in its mid-term targets: >5% >10% >20% >50% Whilst economic uncertainties remain, trading has started well across majority of business units and in 2024 the Group expects modest sales growth and at least stable margins Mid-term 2026 2026 2026 Annual sales EBITu RO
Slide 30: Q&A
Q&A 30
Slide 31: Appendix
Appendix 31
Slide 32: Strategy delivery
Strategy delivery Building a balanced business by end-market and by region Consolidated sales Consolidated sales Consolidated sales by business unit by region by end-market LATAM BBRG Other1 Mobility NAM 7% EMEA 14% RR SpB 26% 21% 43% 40% 16% 47% 17% 27% 32% 10% Construction & SWS infrastructure Ene
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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