Bekaert SA · EURONEXT:BEKB
Bekaert SA — Investor Day (February 2008)
31 slides from Bekaert SA's investor day presentation, February 2008
Slide 1: Regionalizing Wire
Capital market event 2008 Regionalizing Wire Henri-Jean Velge Group Executive Vice-President 0 Market Capital Event February 2008
Slide 2: Regional AWP (excl steel cord, building, carding, AM and AC)
Regional AWP (excl steel cord, building, carding, AM and AC) North America Europe 16% 32% Asia 14% Latin America 36% Rest of the world 2% 1 Market Capital Event February 2008
Slide 3: Regionalizing Wire: Latin-America, Andina project
Regionalizing Wire Latin-America Andina project Venezuela - Colombia Majority in Vicson (Venezuela) Proalco (Colombia) 2 Market Capital Event February 2008
Slide 4: Venezuela and Colombia: background information
Venezuela and Colombia: background information Venezuela GDP 2007: 210 billion USD (growth about 5 %) Population: 27 million Export products: mainly oil export 50 billion USD Colombia GDP 2007: 150 billion USD (growth about 5 %) Population: 44 million Export products: Manufacturing : 40 % Oil : 28 %
Slide 5: Background Vicson and Proalco
Background Vicson and Proalco Company: Vicson Previous ownership: 50.002% Sivensa 49.998% Bekaert Actual ownership: 100 % Bekaert Location: Valencia and San Joaquin Activities: Advanced Wire Products, Wire Key numbers 2007: - personnel: 650 - Sales: 100 €m - Volume: 100 000 ton Vicson is majority ow
Slide 6: Market
Market - Market Venezuela: High market share with strong local demand High growth over the last periods: +15% p.a. Growth is driven by high oil prices and public construction spending Growth may be affected by an economic slowdown Bekaert sales: 90% local market, 10% export (Caribbean, USA, …). - Ma
Slide 7: Opportunity for Bekaert
Opportunity for Bekaert - Latin American market is changing rapidly - Strategic fit, reinforcing Bekaert’s position in Central and South America - Added value • Strong operational performance and strong local management • Leaders in their markets, growing market share in Colombia • Financially sound
Slide 8: Economics
Economics - Purchase price $m 35.5 (€m 25.4) - Effect on consolidated sales + 7 % p.a. - Effect in fourth quarter sales 2007 €m 35.0 (€m 140 annual change from combined to consolidated) - Share in the result of joint ventures and associates • 2005 €m 2.2 • 2006 €m 3.8 • 1H07 €m 2.0 • 2007 partly to
Slide 9: Regionalizing Wire: India
Regionalizing Wire India Wire opportunities Project in Stainless Steel Project for Flat and Shaped Wire 8 Market Capital Event February 2008
Slide 10: India: background information
India: background information GDP 2007: 800 billion USD Growth about 9 %, second fastest in Asia Steel consumption per capita = 1/8 of USA Population: 1.12 billion Export: 120 billion $ Textile, Jewels, Engineering goods Software and services • India has since 1991 gradually opened its markets throu
Slide 11: India: Bekaert presence
India : Bekaert presence - Pune • Products • Steel cord • Carding products for textile industry • Engineering and business development • People • 200 - Mukand joint venture • 50/50 JV for stainless wires 10 Market Capital Event February 2008
Slide 12: India: Wire opportunities in Stainless Steel
Regionalizing Wire India Wire opportunities in Stainless Steel 11 Market Capital Event February 2008
Slide 13: India: wire opportunity in stainless steel products
India: wire opportunity in stainless steel products - Stainless steel wire rod • Worldwide capacity 2.1 million ton • India and China counts for about 25% of all capacity • Ongoing consolidation - Stainless steel wire products • Cold heading, welding wire, spring wire, 1.2 million ton specialities,
Slide 14: Mukand joint venture
India: wire opportunity in stainless steel products - Mukand joint venture • Goal: • expansion in India with a strategic partner • double the worldwide sales in stainless steel products • supply of top quality to the automotive industry and all sorts of other industrial applications • 50/50 JV • Gre
Slide 15: Economics
Economics - Investments Greenfield €m 18 (Rs. 100 Crores) at 50 % - Effect on consolidated sales 0 - Effect on combined sales + €m 30 (first sales expected in 2009) 14 Market Capital Event February 2008
Slide 16: India: Wire opportunities in Flat and Shaped Wire
Regionalizing Wire India Wire opportunities in Flat and Shaped Wire 15 Market Capital Event February 2008
Slide 17: India: wire opportunity in flat and shaped wire
India: wire opportunity in flat and shaped wire - Annual wire production in India 2.0 million ton • Tata Group • Usha Martin • Ramsarup • Bansal • Mika • Arti • Raj Ratan • Mukand • Aradhya • H D Wire Organized Un-organized • Etc. - Expected growth x2 in upcoming 5 years 16 Market Capital Event Febr
Slide 18: Scope of the project
Scope of the project Investment in a wire production plant in Pune for flat and profiled wires in line with the needs of the local Indian market for automotive wires • Clutch and valve spring wires • Springs made out of flat and profiled wires a.o. seat recliners and belt tensioners, circlips and wi
Slide 19: Product: wire for flexible pipes
Product: wire for flexible pipes Zeta wires Flat wires 18 Market Capital Event February 2008
Slide 20: Product: wire for automotive components
Product: wire for automotive components Window regulator/recliner springs circlips Wires for clutch springs 19 Market Capital Event February 2008
Slide 21: The automotive industry in India
The automotive industry in India - 10 million vehicles are produced in India (7 million two wheelers) (amounting to US$ 28 billion) - The penetration rate of passenger cars is only at 7 cars per 1000 people - The Indian automotive industry has grown with more than 15% p.a. (but only 2% of the world
Slide 22: Flat and shaped wires: product segments to consider
Flat and shaped wires: product segments to consider - The market in India for flat and shaped wires could be split into: • Existing market: circlips, bobby pin wires and some others. • Finished parts made of flat and shaped wires are currently imported but increasingly made locally (belt tensioners,
Slide 23: Economics
Economics - Investments €m 15 - Effect on consolidated sales + €m 20 (gradually built up to 2012) 22 Market Capital Event February 2008
Slide 24: Regionalizing Wire: Indonesia
Regionalizing Wire Indonesia Wire opportunities Project galvanizing plant Dramix® 23 Market Capital Event February 2008
Slide 25: Indonesia: background information
Indonesia: background information GDP 2007: 410 billion USD Growth about 5% Population: 225 million Export: 85 billion $ petroleum, natural gas, textiles, apparel, and mining. Major agricultural products include palm oil, rice, tea, coffee, spices, and rubber. • The growth rate, however, is not enou
Slide 26: Indonesia: Bekaert presence
Indonesia: Bekaert presence - Karawang • Products • Coated advanced wire products (Bezinal, colored, galvanized, etc.) • Baling wire, fencing wire, etc. • People • 200 25 Market Capital Event February 2008
Slide 27: Scope of the project
Scope of the project Investment driven by a number of considerations: • Growth in pulp baling industry in Asia and difficult to compete from Europe (strong Euro) • Cable armoring wire market, an opportunity again in Japan • Steady Bezinal wire demand in South-east Asia and Australia • Limited capaci
Slide 28: Regionalizing Wire: Dramix sales
Regionalizing Wire: Dramix sales In % 100% 75% 50% 25% 0% 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 sales Estimate 27 Market Capital Event February 2008
Slide 29: Regional AWP Dramix production sites
Regional AWP Dramix® production sites New investment 28 Market Capital Event February 2008
Slide 30: Economics
Economics - Investment in galvanizing capacity and in capacity for fibres for concrete reinforcement €m 22 - Effect on consolidated sales 40 000 ton €m 35 (gradually built up to 2010) 29 Market Capital Event February 2008
Slide 31: better together
better together www.bekaert.com 30 Market Capital Event February 2008