Bekaert SA · EURONEXT:BEKB
Bekaert SA — FY2009 Earnings Presentation
37 slides from Bekaert SA's earnings presentation, Feb 26, 2010
Slide 1: Annual results 2009
Annual results 2009 B. De Graeve, CEO B. Humblet, CFO Brussels, 26 February 2010
Slide 2: Address by B. De Graeve, Chief Executive Officer
Address by B. De Graeve, Chief Executive Officer
Slide 3: Highlights
Highlights - EBITDA of € 386 million or 15.8% of sales - EBIT of € 232 million vs € 210 million (+10%) - EBIT margin at 9.5% of sales - Net debt reduction of 37% to € 395 million - Gearing of 28.8% - EPS at € 7.69 vs € 8.83 - Consolidated sales € 2.44 billion (-8.5%) - Dividend increase of 5% to € 2
Slide 4: Strategy review
Strategy review Bekaert created Sustainable Profitable Growth during a global recession by focusing on the key strategies: - Innovation: Continued investment to identify new applications and to improve current products - Geographical expansion: Fast growth close to its customers in emerging economie
Slide 5: Innovation
Innovation - Doubling investment in innovation over the last 10 years with simultaneous shift to core competences - Product portfolio renewed with 50% in the last 10 years - Further growth of R&D efforts in China - Enhanced presence in sectors less sensitive to an economic downturn 5 Confidential _
Slide 6: Geographical Expansion
Geographical Expansion Over 80% of expansion capital is spent in emerging markets - Opening of the steel cord plant in Chongqing (China) together with Ansteel - Further increase of tire cord capacity in China reaching 350k T - Broadening of our product offering in Asia - Investments in India for sev
Slide 7: Geographical Expansion: China growth outlook
Geographical Expansion China will continue to lead the world economy in growth. but a much slower rate than in the past 10 years United States EU-15 Japan Other advanced Advanced countries China India Other developing Asia 2000-2008 Latin America 2011-2016 Middle East Africa Central and Eastern Euro
Slide 8: Geographical Expansion: emerging economies share of world output
Geographical Expansion The emerging & developing economy share in total world output (GDP) changes for 1/3 to 2/3 within two decades – China’s share rises to 15% 2000 2008 2016 emerging advanced emerging advanced emerging advanced 2016 China China China US EU‐15 Other advanced China India Brazil Rus
Slide 9: Operational Excellence
Operational Excellence - Implementation of cost reduction programs across all entities and business platforms - Continued focus on quality to differentiate us from our competitors - Leverage internal engineering department to ensure cost competitive equipment - Energy consumption reduction programs
Slide 10: Operational Excellence: labor productivity trend
Operational Excellence Emerging economies have taken strong lead on labor productivity trend Percent 6 Labor productivity growth trend (output per person employed) 5 Advanced Emerging & Developing World 4 3 2 1 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 Note: Trend until 2008 using the Hodrick-P
Slide 11: Address by B. Humblet, Chief Financial Officer
Address by B. Humblet, Chief Financial Officer
Slide 12: Sales by segment
Sales by segment Consolidated Combined In mio € variance In mio € variance EMEA 827 -29% 823 -29% North America 474 -22% 469 -22% Latin America 327 +85% 1 237 -19% Asia Pacific 809 +13% 814 +12% Total 2 437 -9% 3 343 -17% 20% 14% EMEA 25% 34% North America 13% Latin America 37% Asia Pacific 37% 24%
Slide 13: Sales by segment: EMEA and North America
Sales by segment EMEA: − Sales drop of 29% reflecting • Volume 20% below last year. mainly due to weak demand in the first half year • Average sales prices about 10% below last year due to lower wire rod prices − In the second half year business picked up in most sectors − Increased volume in lower
Slide 14: Sales by segment: Latin America and Asia Pacific
Sales by segment Latin America: − The growth in Latin America reflects the integration of Peru/Ecuador in the consolidated perimeter − In the consolidated entities our sales remained stable in spite of the economic downturn − The businesses in Brazil and Chile – run via JVs – saw a significant volum
Slide 15: Sales per region and per sector
Sales per region and per sector North America EMEA Greenland 24% 14% 41% 25% Alaska 2002 2009 Iceland Sweden Finland Russian Federation Norway 2002 2009 Estonia Canada Latvia Denmark Lithuania Belarus Ireland United Kingdom Netherlands Poland Belgium Germany Czech Rep. Slovakia Ukraine Minnesot a Ka
Slide 16: Consolidated income statement: key figures
Consolidated income statement : key figures (In mio €) 2008 2009 Sales 2 662 2 437 Cost of sales -2 061 -1 903 Gross profit 602 534 Gross profit margin 22.6% 21.9% − Sales decrease of 9% reflects: • Organic decline of 17% reflecting lower volume in the first half year and lower sales prices due to l
Slide 17: Consolidated income statement: key figures
Consolidated income statement : key figures (In mio €) 2008 2009 Gross profit 602 534 Selling expenses -122 -105 Administration expenses -114 -111 R&D expenses -69 -63 Others -4 2 Operating result (EBIT) before non-recurring items 294 257 − SG&A remains at 8.9% of sales: • Increase from including Pe
Slide 18: Consolidated income statement: key figures
Consolidated income statement : key figures (In mio €) 2008 2009 Operating result (EBIT) before non-recurring items 294 257 EBIT margin on sales before non-recurring items 11.1% 10.5% Non-recurring items -84 -25 Operating result (EBIT) 210 232 EBIT margin on sales 7.9% 9.5% EBITDA 412 386 EBITDA mar
Slide 19: Segment reporting: EMEA
Segment reporting: EMEA (In mio €) 2008 2009 1H2009 2H2009 Consolidated sales 1168 827 410 417 Operating result before non-recurring items 68 2 -21 22 (REBIT) REBIT margin on sales 5.8% 0.2% -5.0% 5.5% Non-recurring items -77 -21 -6 -15 Operating result (EBIT) -9 -19 -27 7 EBIT margin on sales -0.7%
Slide 20: Segment reporting: North America
Segment reporting: North America (In mio €) 2008 2009 1H2009 2H2009 Consolidated sales 605 474 263 210 Operating result before non-recurring 25 -5 -5 0 items (REBIT) REBIT margin on sales 4.1% -1.1% -1.7% -0.2% Non-recurring items 1 -3 0 -3 Operating result (EBIT) 25 -8 -5 -4 EBIT margin on sales 4.
Slide 21: Segment reporting: Latin America
Segment reporting: Latin America (In mio €) 2008 2009 1H2009 2H2009 Consolidated sales 177 327 160 167 Operating result before non-recurring 16 28 9 19 items (REBIT) REBIT margin on sales 8.9% 8.4% 5.3% 11.4% Non-recurring items 0 -1 -1 0 Operating result (EBIT) 15 26 8 19 EBIT margin on sales 8.8%
Slide 22: Segment reporting: Asia Pacific
Segment reporting: Asia Pacific (In mio €) 2008 2009 1H2009 2H2009 Consolidated sales 713 809 367 443 Operating result before non-recurring 249 288 128 160 items (REBIT) REBIT margin on sales 34.9% 35.6% 34.9% 36.1% Non-recurring items -5 0 0 0 Operating result (EBIT) 244 288 128 160 EBIT margin on
Slide 23: Consolidated income statement: key figures
Consolidated income statement : key figures (In mio €) 2008 2009 Operating result (EBIT) 210 232 Interest income / expense -41 -57 Other financial result -8 -9 Result from continuing operations before taxes 161 167 Income taxes -25 -34 Result from continuing operations 136 133 (consolidated companie
Slide 24: Consolidated income statement: key figures
Consolidated income statement : key figures (In mio €) 2008 2009 Result from consolidated companies 136 133 Share in the results of JV’s and associates 56 38 Result for the period 192 170 Minority interests 18 19 Attributable to the Group 174 152 − Results in the joint ventures reduced as: • Peru/Ec
Slide 25: Cash flow: key figures
Cash flow: key figures (In mio €) 2008 2009 Gross cash from operations 411 310 Net cash from operations 222 497 Cash from investment activities -243 -127 Cash from financing activities 67 -341 − Gross cash from operations reflect strong EBITDA, partly offset by cash outflow for employee related bene
Slide 26: Working capital: key figures
Working capital: key figures (In mio €) 2008 2009 Inventories 511 358 Accounts receivable 498 511 Accounts payable -356 -350 Working capital 653 519 − Important reduction in working capital mainly driven by a significant reduction in inventory only partly offset by inclusion of Peru/Ecuador − Averag
Slide 27: Consolidated balance sheet: key figures
Consolidated balance sheet: key figures Assets Equity and Liabilities in mio € 2 830 in mio € 2 830 2 667 2 667 Non-current 1 536 1 172 1 374 1 409 Equity assets Non-current 514 liabilities 821 Current 1 258 1 294 assets 981 Current 635 liabilities 2008 2009 2008 2009 − Non-current liabilities incre
Slide 28: Balance sheet: key figures
Balance sheet: key figures (In mio €) 2008 2009 Net financial debt 627 395 Gearing (net debt to equity) 53.5% 28.8% − Significant reduction of net debt reflecting • Very healthy cash generation of the business • Strong reduction in working capital • Positive impact of cost reduction measures initiat
Slide 29: Ratios: key figures
Ratios: key figures 2008 2009 EBITDA on sales 15.5% 15.8% REBIT margin on sales before non-recurring items 11.1% 10.5% EBIT margin on sales 7.9% 9.5% Sales on capital employed (asset rotation) 1.6 1.4 Return on capital employed 12.5% 12.9% Return on equity 16.5% 13.4% Debt on EBITDA 1.5 1.0 29 Confi
Slide 30: Key figures per share
Key figures per share (in €) 2008 2009 Share price at 31 December 48.32 108.50 Number of existing shares at 31 December 19 783 625 19 834 469 Book value 59.26 69.25 Earnings per share 8.83 7.69 Weighted average number of shares 19 796 210 19 740 206 Cash flow attributable to the Group 19.06 15.46 Di
Slide 31: Address by B. De Graeve, Chief Executive Officer
Address by B. De Graeve, Chief Executive Officer
Slide 32: What customers say
What customers say Risks Opportunities • Poor market visibility • Sustainability of current signs • Growth in emerging markets of recovery • Record low customer inventory • Volatile raw material costs • Credit availability 2010: The Need for Prudence 32 Confidential _ 26 February 2010
Slide 33: 2010 Outlook
2010 Outlook - Stabilization of economic activity in mature markets at a low level - Further investment in emerging markets to support the forecasted growth but • Uncertainties from changing monetary policies and positions in Asia and Latin America • Hyper inflation in Venezuela impacting the busine
Slide 34: Bekaert–Bridgestone Deal
Bekaert–Bridgestone Deal The agreement between Bridgestone and Bekaert, announced on 1 February 2010, involves: • A long term agreement for the supply of steel tire cord to the Bridgestone group • The full acquisition (100% of the shares) by Bekaert of two tire cord plants - Bridgestone Metalpha Ita
Slide 35: Contact
Contact Bekaert is always near to you. Any questions? Please do not hesitate to contact us: Jacques Anckaert Katelijn Bohez Investor Relations Manager Corporate Communications Manager Press Relations President Kennedypark 18 President Kennedypark 18 BE-8500 Kortrijk BE-8500 Kortrijk T +32 56 23 05 7
Slide 36: Contact
Contact For more information, welcome @ www.bekaert.com or www.bekaert.mobi 36 Confidential _ 26 February 2010
Slide 37: better together
better together www.bekaert.com 37 Confidential _ 26 February 2010