Bekaert SA · EURONEXT:BEKB
Bekaert SA — FY2016 Earnings Presentation
38 slides from Bekaert SA's earnings presentation, Mar 1, 2017
Slide 1: Slide 1
Slide 2: Bekaert Full Year Results 2016
Bekaert Full Year Results 2016 Matthew Taylor, CEO Beatríz García-Cos, CFO 1 March 2017
Slide 3: 2016 Highlights
2016 Highlights - Consolidated sales of € 3.7 billion (+1%) and combined sales of € 4.4 billion (-1%) - Currency impact: € -65 million (-2%) on consolidated sales; € -96 million (-2%) on combined sales - Gross profit of € 690 million (18.6% margin), up 15% vs € 598 million (16.3%) in 2015 - Underlyi
Slide 4: Economic environment
Economic environment - Continued strong demand from automotive markets - Weak demand from Oil & Gas markets due to continuing low planned investments in extraction projects - Low commodity and oil prices negatively impacted the economies in Latin America. Price rises in recent months haven’t improve
Slide 5: Business review
Business review EMEA: - Good demand from automotive and construction markets - Weak demand from the Oil and Gas sector due to continuing low planned investments, heavily affecting our flexpipe market - So far, Brexit hasn’t affected demand in our sectors, but we remain cautious about a potential imp
Slide 6: Business review (2)
Business review (2) Latin America: - Challenging economic environment across the region - Stable to increased market share in value adding businesses Housing project Ecuador Product portfolio & distribution model Chile Tire cord business Sumaré - Venezuela shutdown periods due to lack of wire
Slide 7: Business review (3)
Business review (3) Bridon-Bekaert Ropes Group: - Weak Oil & Gas markets heavily affected demand for ropes - Advanced cords business: demand remained strong throughout the year - Realignment and improvement actions put in place to seize growth opportunities and improve profitability 7
Slide 8: Combined sales breakdown
Combined sales breakdown 7% 1EMEA By segment 27% 2NORTH AMERICA 24% 3LATIN AMERICA 4ASIA PACIFIC 12% 5BBRG 30% 5% 5% 6% By sector 7% 43% 11% 23% 8
Slide 9: Bekaert global presence
Bekaert global presence @ Bekaert production piants @ Bekaert offices @ Bekaert technology centers @ BBRG production & distribution sites as FY 2016 € min Combined Sales 1147 512 1.320 1052 319 YE 2016 Employees 7297 1344 7144 10.563 2514 Automotive MAgricuture 1B Construction IB Basic Materials I C
Slide 10: Note: terminology changes and restatements
Note: terminology changes and restatements − In accordance with recent ESMA guidance on non-GAAP measures, terminology has been adapted: what was reported as ‘REBIT’, is now referred to as ‘underlying EBIT’. − In accordance to the updated IFRS standard IAS19, 2015 as published has been restated. − I
Slide 11: Consolidated income statement: key figures
Consolidated income statement: key figures (in mio €) 2015 2016 Sales 3 671 3 715 Cost of Sales (3 073) (3 025) Gross Profit 598 690 Gross Profit margin 16.3% 18.6% − Sales growth of 1% reflecting: 4% organic volume growth, net of Vicson Largely offset (-3%) by passed-on lower wire rod prices an
Slide 12: Consolidated income statement: key figures
Consolidated income statement: key figures (in mio €) 2015 2016 Gross Profit 598 690 Selling expenses (156) (175) Administrative expenses (141) (140) R&D expenses (65) (64) Other operating revenue and expenses (17) (52) EBIT 219 260 − SG&A slightly increased to 10.2 % of sales. − The increase in Sel
Slide 13: Consolidated income statement: key figures
Consolidated income statement: key figures (in mio €) Underlying Reported 2015 2016 2015 2016 EBIT 231 305 219 260 EBIT margin 6.3% 8.2% 6.0% 7.0% EBITDA 436 513 441 481 EBITDA margin 11.9% 13.8% 12.0% 13.0% ROCE 9.1% 11.8% 8.7% 10.0% Underlying EBIT : − Underlying EBIT increased by € 74 million (up
Slide 14: Underlying EBIT Bridge
Underlying EBIT Bridge 315 295 275 255 235 21S 195 175 EBIT-underlying Restatement FY 2015 Restated EBIT-underlying FY 2015 In & Out's FX impact Vicson 30 Volume Pricing, mix & invent, adjust. 52 Cost Efficiency Other EBIT-underlying FY 2016 @ BEKAERT better together
Slide 15: Segment reporting: EMEA
Segment reporting: EMEA (in mio €) Underlying Reported 2015 2016 H1/2016 H2/2016 2015 2016 Consolidated sales 1 174 1 148 608 541 1 174 1 148 EBIT 128 141 81 60 135 136 EBIT margin 10.9% 12.2% 13.3% 11.1% 11.5% 11.8% Depreciation, amortization 54 59 30 29 55 58 and impairment losses EBITDA 183 200 1
Slide 16: Segment reporting: North America
Segment reporting: North America (in mio €) Underlying Reported 2015 2016 H1/2016 H2/2016 2015 2016 Consolidated sales 528 512 264 248 528 512 EBIT 14 26 13 13 27 26 EBIT margin 2.6% 5.1% 5.0% 5.1% 5.2% 5.1% Depreciation, amortization 11 13 6 7 10 13 and impairment losses EBITDA 24 39 19 19 38 39 EB
Slide 17: Segment reporting: Latin America
Segment reporting: Latin America (in mio €) Underlying Reported 2015 2016 H1/2016 H2/2016 2015 2016 Consolidated sales 712 682 328 353 712 682 EBIT 46 67 33 34 45 67 EBIT margin 6.5% 9.8% 9.9% 9.7% 6.4% 9.8% Depreciation, amortization 23 22 13 9 24 22 and impairment losses EBITDA 69 89 45 43 69 88 E
Slide 18: Segment reporting: Asia Pacific
Segment reporting: Asia Pacific (in mio €) Underlying Reported 2015 2016 H1/2016 H2/2016 2015 2016 Consolidated sales 1 019 1 052 517 535 1 019 1 052 EBIT 69 119 58 62 58 100 EBIT margin 6.8% 11.3% 11.1% 11.5% 5.7% 9.5% Depreciation, amortization 109 103 51 52 121 119 and impairment losses EBITDA 17
Slide 19: Segment reporting: BBRG
Segment reporting: BBRG (in mio €) Underlying Reported 2015 2016 H1/2016 H2/2016 2015 2016 Consolidated sales 239 320 102 219 239 320 EBIT 29 13 10 4 29 (9) EBIT margin 12.3% 4.1% 9.3% 1.7% 12.0% -2.7% Depreciation, amortization 14 21 7 15 14 22 and impairment losses EBITDA 44 35 16 19 43 13 EBITDA
Slide 20: Consolidated income statement: key figures
Consolidated income statement: key figures (in mio €) 2015 2016 EBIT 219 260 Interest income / expense (62) (73) Other financial income and expenses (34) (37) Result before taxes 123 149 Income taxes (36) (62) Result after taxes (consolidated companies) 87 87 − Following the Bridon merger, gross deb
Slide 21: Consolidated income statement: key figures
Consolidated income statement: key figures (in mio €) 2015 2016 Result after taxes (consolidated companies) 87 87 Share in the results of joint ventures and associates 18 25 Result for the period 105 112 Attributable to non-controlling interests 4 7 Attributable to the Group 102 105 Results attribut
Slide 22: Cash flow: key figures
Cash flow: key figures (in mio €) 2015 2016 Gross cash flows from operations 355 376 Cash flows from operations 584 400 Cash flows from investment activities (363) (107) Cash flows from financing activities (268) (302) − Gross cash flows from operations: improved cash generation was offset by higher
Slide 23: Working capital: key figures
Working capital: key figures (in mio €) 2015 2016 Inventories 629 724 Accounts receivable 769 819 Accounts payable (585) (701) Working capital 813 843 − Increase in Working Capital driven by the impact from the merger of the Bridon entities (+ € 52 million) and movements in closing rates of FX (€ +1
Slide 24: Consolidated balance sheet: key figures
Consolidated balance sheet: key figures (in mio €) 2015 2016 Non-current assets 1 922 2 137 Current assets 1 960 2 168 Assets 3 882 4 304 Equity 1 512 1 598 Non-current liabilities 1 083 1 504 Current liabilities 1 287 1 202 Equity and liabilities 3 882 4 304 24
Slide 25: Balance sheet: key figures
Balance sheet: key figures (in mio €) Underlying Reported 2015 2016 2015 2016 Net financial debt 837 1 068 837 1 068 Gearing (net debt to equity) 55.4% 66.8% 55.4% 66.8% Net debt on EBITDA 1.9 2.1 1.9 2.2 − Net Debt increased by € 279 million as a result of the Bridon transaction. − Adjusting for th
Slide 26: Ratios: key figures
Ratios: key figures Underlying Reported 2015 2016 2015 2016 EBITDA margin 11.9% 13.8% 12.0% 13.0% EBIT margin 6.3% 8.2% 6.0% 7.0% Sales on capital employed (asset rotation) 1.4 1.4 1.4 1.4 Return on capital employed (ROCE) 9.1% 11.8% 8.7% 10.0% Return on equity (ROE) 6.9% 7.2% 26
Slide 27: Key figures per share
Key figures per share (in €) 2015 2016 Share price at year-end 28.39 38.49 Number of existing shares 60 125 525 60 347 525 Book value 22.99 24.31 Earnings per share (EPS) 1.82 1.87 Weighted average number of shares 55 841 843 56 263 172 27
Slide 28: Transformation programs in the numbers: shareholder value
Transformation programs in the numbers: shareholder value 25 20 15 10 5 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 -5 -10 -15 Shareholder value WACC RoIC 28
Slide 29: Our Vision - Our Field of Play
Our Vision - Our Field of Play Consistent with our better together aspiration, we relentlessly pursue to be the preferred supplier for our steel wire products and solutions, by continuously delivering superior value to our customers around the world. » Goal Statement » Goal Statement for the Heart f
Slide 30: Market developments and consolidation scope
Market developments and consolidation scope Firm demand from automotive markets has been a consistent driver of value creating growth throughout 2016. We project automotive to continue to perform well in the first half of 2017. We expect demand from oil and gas markets to remain weak due to the cont
Slide 31: Our actions
Our actions We continue to drive transformation in our business: - we have made a clear prioritization of where to grow and how to improve the business portfolio - we have narrowed our focus on those parts of the business where we can leverage our strengths and drive value creating growth - and we h
Slide 32: Transformation programs in the numbers: underlying EBIT bridge
Transformation programs in the numbers: underlying EBIT bridge 32
Slide 33: Our actions
Our actions We take actions where needed and do expect more benefits from our investments and realignment actions in the near future - Bridon-Bekaert Ropes Group: taking actions to grow volumes and leveraging scale, while making the necessary footprint adjustments: closure of ScanRope plant in Norwa
Slide 34: Outlook
Outlook Despite the changes to our consolidation scope and some unfavorable or uncertain market developments, we believe we will broadly repeat in 2017 our current strong underlying EBIT level as we expect our transformation programs will compensate for the downward elements. 34
Slide 35: Outlook
Outlook We want to build from what we have been achieving. Our current performance encourages us to extend our transformation programs and take more significant steps going forward. While there will be cycles, and provided there will be no exceptional, unforeseeable circumstances, the improvements w
Slide 36: Dividend proposal
Dividend proposal The Board of Directors confirms its confidence in the strategy and future perspectives of the company and will propose to the Annual General Meeting of Shareholders a gross dividend of € 1.10 per share, compared with € 0.90 last year. 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.
Slide 37: better together
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Slide 38: Disclaimer
Disclaimer This document 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, per