Bekaert Sa · EURONEXT:BEKB
Bekaert Sa — Investor Day (November 2019)
70 slides from Bekaert Sa's investor day presentation, Nov 15, 2019
Slide 1: Capital Markets Day
Capital Markets Day Bekaert HQ, Zwevegem 15 November 2019
Slide 2: Content
Content 1 Introduction Matthew Taylor, CEO 09:30-09:50 2 Q3 trading update Taoufiq Boussaid, CFO 09:50-10:10 3 Business update per segment Divisional CEOs 10:10-11:50 4 Outlook and conclusions Matthew Taylor, CEO 11:50-12:15 5 Q&A All 12:15-13:00 6 Lunch All + CSO 13:00-14:30 2
Slide 3: Executive Leadership team
Executive Leadership team Four Business Units: Divisional CEO Divisional CEO Divisional CEO Divisional CEO Rubber Reinforcement Steel Wire Solutions Specialty Businesses Bridon-Bekaert Ropes Group Arnaud Lesschaeve Stijn Vanneste Jun Liao Curd Vandekerckhove Four Global Functional Domains: CEO Matth
Slide 4: Our current business context: difficult market conditions
Our current business context: difficult market conditions in all sectors relevant to Bekaert US Steel Nucor John Deere Leoni AG Steel Dynamics Angang Caterpillar ArcelorMittal Halliburton British Steel MICHELIN Vesuvius PLC CONTINENTAL BRIDGESTONE Cargill GOODYEAR PIRELLI Eisenmann NOKIAN Daimler, F
Slide 5: Content
Content 1 Introduction Matthew Taylor, CEO 2 Q3 trading update Taoufiq Boussaid, CFO 3 Business update per segment Divisional CEOs 4 Outlook and conclusions Matthew Taylor, CEO 5 Q&A All 5
Slide 6: Bekaert reports 2% consolidated sales growth in the first 9 months of 2019
BEKAERT Q3 TRADING UPDATE Bekaert reports 2% consolidated sales growth in the first 9 months of 2019 Sales, trends and actions Despite deteriorating market conditions, Bekaert achieved 2% consolidated sales growth in the first nine months of 2019, driven equally by price-mix and favorable currency m
Slide 7: Consolidated and combined sales for the first nine months of 2019
Consolidated and combined sales for the first nine months of 2019 – in millions of € Consolidated sales 2018 2019 Share Variance Organic FX Rubber Reinforcement 1 420 1 494 45% +5% +3% +2% Steel Wire Solutions 1 135 1 108 34% -2% -4% +2% Specialty Businesses 316 311 9% -2% -3% +1% BBRG 341 365 11% +
Slide 8: Working capital: key figures
Working capital: key figures (in mio €) September 2018 Year-end 2018 September 2019 Inventories 989 932 896 Accounts receivable 964 851 799 Accounts payable (959) (908) (777) Working capital 994 875 917 • Average working capital on sales improved to 20.4%, compared to 21.9% at the end of September 2
Slide 9: Net debt
Sales on capital employed (asset rotation) 1.6 1.6 1.6 1.6 Return on capital employed (ROCE) Net debt 8.2% 9.5% 6.8% 7.0% Return on equity (ROE) 3.0% 4.8% (in mio €) September 2018 Year-end 2018 September 2019 Net financial debt 1 303 1 153 1 181 Gearing (net debt to equity) 86.0% 76.0% 76.4% Net de
Slide 10: Debt financing maturity table
Debt financing maturity table B E F O R E B R I D G E L O AN S E TTL E M E N TS AF TE R R E TAI L B O N D AN D B R I D G E L O AN S E TTL E M E N T Retail Bond EIB-loan Bridgeloan Convertible Bond Retail Bond EIB-loan SSD Termloan Bridgeloan Convertible Bond Loans Subsidiaries SSD Termloan Loans Sub
Slide 11: Content
Content 1 Introduction Matthew Taylor, CEO 2 Q3 trading update Taoufiq Boussaid, CFO 3 Business update per segment Divisional CEOs 4 Outlook and conclusions Matthew Taylor, CEO 5 Q&A All 11
Slide 12: Stijn Vanneste, Divisional CEO Steel Wire Solutions
Stijn Vanneste Divisional CEO Steel Wire Solutions
Slide 13: BEKAERT SWS Boiler plate
BEKAERT SWS Boiler plate Consolidated Combined (*) Employees 6 600 8 800 Tons/yr 1.1 mln 1.7 mln Sales € 1.5 bln € 2.1 bln (*) Combined includes BBA Brazil JV Bekaert–ArcelorMittal Main product categories (Consolidated, by Volume) Geographies Served (Consolidated, by Volume) 13
Slide 14: SWS market dynamics, position and competition
SWS market dynamics, position and competition Segment Market growth Market dynamics and future growth potential Bekaert SWS position and competition 2018-19 2019-22 versus a weak 2019 Good presence via global customers and strong • Strongest growth potential in Asia regional positions in Chile and E
Slide 15: SWS market dynamics, position and competition
SWS market dynamics, position and competition Segment Market growth Market dynamics and future growth potential Bekaert SWS position and competition 2018-19 2019-22 versus a weak 2019 • Rope wire for lifting, mooring, towing & fishing Stable customers with quality focus Equipment = 2-3% equipment an
Slide 16: BEKAERT SWS manufacturing locations
BEKAERT SWS manufacturing locations Bekaert Bradford NV Bekaert SA Bekaert Orrville Bohumín (CZ) Bekaert Shelbyville* Hlohovec (SK) Bekaert Qingdao Bekaert Van Buren BJWP Jiangyin Inchalam – Acma – Bekaert India Acmanet (CL) IdealAlambrec (EC) Ipoh Malaysia* Prodac (PE) Proalco (CO) PT Bekaert Indo
Slide 17: BEKAERT SWS Challenge #1: improve profitability
BEKAERT SWS Challenge #1: improve profitability in very difficult market circumstances (in mio €) Underlying Reported 1H 2018 1H 2019 1H 2018 1H 2019 Consolidated third party sales 762 751 762 751 Consolidated sales (intersegment) 789 778 789 778 Gross profit 97 82 96 82 EBIT 38 28 48 26 EBIT margin
Slide 18: BEKAERT SWS actions to restore profitability
BEKAERT SWS actions to restore profitability Loss- / low- We will close underperforming entities that do not have the potential to recover: margin entities • Shelbyville, US • Ipoh, Malaysia Profit restoration actions in entities with potential – some recent successful examples: • Qingdao, China
Slide 19: BEKAERT SWS SWOT
BEKAERT SWS SWOT Current strengths, weaknesses, opportunities and threats Established industry player: strong brand Complex legacy footprint, high cost inflation & recognition, diversified portfolio & global presence high overhead The technology reference in various markets Strongly anchored in attr
Slide 20: BEKAERT SWS Ambition and Conclusion
BEKAERT SWS Ambition and Conclusion Our first challenge is to restore profitability – Our ambition is to solidify our business through a globally optimized footprint, technology leadership and strategic value-adding partnering Our strategic priorities Build a customer-centric organization that ren
Slide 21: Arnaud Lesschaeve, Divisional CEO Rubber Reinforcement
Arnaud Lesschaeve Divisional CEO Rubber Reinforcement
Slide 22: Tire market: 2-3% CAGR
TIRE MARKET: 2-3% CAGR 7… PLT TBR 2 000 Million Radial Tires 1 500 1 000 500 0 2010 2014 2016 2018 2019 2020 2021 2022 2023 2024 22 Source: LMC Automotive + Bekaert Analysis - PLT = Passenger & Light Truck tire – TBR =Truck & Bus Radial tire
Slide 23: Tire demand vs tire cord demand
TIRE + RR MARKET: Tire demand vs tire cord demand PLT 7… TBR Tire sales China Tire cord demand China Bekaert TC China 14% 10% 25% 13% 8% 35% 51% 75% 26% 43% Tire sales RoW Tire cord demand RoW Bekaert TC ROW 8% 10% 2% 21% PLT TBR 48% 45% PLT OE TBR OE 55% PLT RE TBR RE 33% Total PLT Total TBR 69% 9%
Slide 24: RR market: tire cord and bead wire demand by region
RR MARKET: tire cord and bead wire demand by region (kton) in 2018 Tire cord: 3500 kton Bead wire: 1350 kton 4% 4% 3% 4% 7% 7% 9% 10% 45% 50% 10% 11% CHINA 17% 19% CHINA EMEA NAM JP/KR SEA INDIA LAM 24
Slide 25: BEKAERT RR: capacity growth by region
BEKAERT RR: capacity growth by region 25
Slide 26: RR market: Competitive positions - 2018
RR MARKET: Competitive positions - 2018 Tire cord: 3500 kton Bead wire: 1350 kton BEKAERT CAPTIVE MAIN COMPETITORS OTHERS OTHER PLAYERS <3% EACH 26
Slide 27: RR market: tire cord producers and footprint
RR MARKET: tire cord producers and footprint In China only: - Snton - ESC - Junma - … KIS: 5 plants in Korea US Brazil JV (3 TC plants) Spain Turkey (2 TC plants) Slovakia Romania Italy Russia China (5 TC plants) India (2 TC plants) Indonesia [Vietnam] + 5 additional sites BW (US, Brazil (2), Venezu
Slide 28: BEKAERT RR SWOT
BEKAERT RR SWOT Current strengths, weaknesses, opportunities and threats Global market share Process efficiency during plant expansions and Global footprint new product/process start-ups Technological leadership > preferred supplier and co-creation partner No major threats from new technologies S ST
Slide 29: BEKAERT RR ACTIONS
BEKAERT RR ACTIONS Growth • Secure our market positions • Grow share Chinese tire manufacturers Customer excellence • Constantly introduce new innovations, anticipating the market needs • Segmentation approach • Pricing competitiveness Quality leadership • Improve program development (launch a
Slide 30: BEKAERT RR Ambition and Conclusion
BEKAERT RR Ambition and Conclusion Overall, Bekaert RR is a very robust business Our ambition is to grow volume, market share, EBIT and ROCE Current context not easy: demand slowdown, continuous trade tariff changes, weaker profit performance of customers Our priorities Be the undisputed technolog
Slide 31: Curd Vandekerckhove, Divisional CEO Bridon-Bekaert Ropes Group
Curd Vandekerckhove Divisional CEO Bridon-Bekaert Ropes Group
Slide 32: Bridon-Bekaert Ropes Group: general overview
BRIDON-BEKAERT ROPES GROUP: general overview ROPES Segments / applications served Geographies Served Wire Other ANZO EMEIA Surface mining Structures SEA Fishing & Marine Underground Mining NAS Cranes & Industrial NAM LATAM Onshore Oil & Gas Offshore Oil & Gas Global Footprint • 2 Wire mills • 13 Rop
Slide 33: Ropes market: global players and many local and regional players
ROPES MARKET: 5 global players and many local and regional players 5 global players: ~15-20% of global market EU CIS …and many small Many others CHINA local/ NAM …and regional many players: small ~80-85% others of global market Rest of Asia LATAM Africa & ANZO 33
Slide 34: BBRG: actions to solidify and grow our Ropes position
BRIDON-BEKAERT ROPES GROUP: actions to solidify and grow our Ropes position Segment Competitors BBRG BBRG strengths and challenges BBRG Actions Position Surface WireCo Market • Leading performance and lowest TCO Solidify market position with new product devel- Mining Haggie leader • Local presence i
Slide 35: Surface Mining – Current product offering BBRG
Surface Mining – Current product offering BBRG (roughly 30% of ropes sales) Surface Mining Shovel ropes Pendants • Hoist (7-8 weeks) • Pendants (5-7 years) • Crowd-retract (4-8 weeks) Dragline ropes Material Handling • Drive ropes for conveyor belts (3-10 years) • Hoist (5-6 months) • Dragline (2-3
Slide 36: Underground Mining – Current product offering BBRG
Underground Mining – Current product offering BBRG Underground Mining Hoist ropes • (1.5-6 years) Balance ropes • (2-10 years) Guide ropes • (1.5–4 years) 36
Slide 37: Offshore Oil & Gas – Current product offering BBRG
Offshore Oil & Gas – Current product offering BBRG (about 13% of ropes sales) Offshore Oil & Gas Exploration ropes Production • Moorings • Platform cranes • Deck cranes • Moorings • Deck cranes Construction ropes • Heavy lift cranes Deep Water Mooring • Installation market • A&R winches • Lifetime 2
Slide 38: Onshore Oil & Gas – Current product offering BBRG
Onshore Oil & Gas – Current product offering BBRG Onshore Oil & Gas Drilling rigs • Drilling lines Well servicing • Tubing lines • Sand lines 38
Slide 39: Crane & Industrial – Current product offering BBRG
Crane & Industrial – Current product offering BBRG (about 20% of ropes sales) Crane & Industrial Construction Port & Maritime • Tower Cranes • Ship-To-Shore Cranes (STS) • Rubber-tired Mobile Cranes (RTM) • Rubber-tired Gantry (RTG) • Crawler cranes • Rail Mounted Gantry (RMG) • Piling / Foundation
Slide 40: Fishing & Marine – Current product offering BBRG
Fishing & Marine – Current product offering BBRG (about 10% of ropes sales) Fishing & Marine Wild Catch Fishing Marine • Fishing ropes • Single Point Mooring (SPM) • Nets • Floating Liquefied Natural Gas (FNLG) • Ship-terminal mooring lines • Navy Aquaculture • Arrestor cables • Anchor lines • Sonar
Slide 41: Structures – Current product offering BBRG
Structures – Current product offering BBRG Structures Cable bridges Stadium roof Other structures • Installation market • Lifetime 20-100 years • Bespoke design per project • Piece weights up to 70 t 41
Slide 42: BBRG: A-Cords general overview
BRIDON-BEKAERT ROPES GROUP: A-Cords general overview Segments / applications served Main product categories Heating Cord Other Fine galvanized steel cords used as reinforcement material in elevator belts and timing belts Window Fine galvanized steel cords used in automotive – eg window Regulator
Slide 43: BBRG A-Cords – Current product offering
BBRG A-Cords – Current product offering fine steel cord • Used to reinforce elevator belts Flexisteel® coated rope • Final product used in elevators Window regulator Cord (WRC) Heating Cord (HTC)
Slide 44: A-Cords: actions to solidify and grow our market position
BRIDON-BEKAERT A-CORDS: actions to solidify and grow our market position Segment Competitors BBRG BBRG strengths and challenges BBRG Actions Position Elevator Fasten, • Technology leadership - IP protected Support further penetration of innovative solutions Market Britx, • Urbanization trends to sup
Slide 45: BBRG (Ropes + A-Cords) SWOT
BRIDON-BEKAERT ROPES GROUP (ROPES + A-CORDS) SWOT Current strengths, weaknesses, opportunities and threats Brand recognition Heavy global overhead structure Global footprint Technology: combined wire & rope expertise, application know-how, cross-fertilization between ropes and a-cords S STRENGTHS W
Slide 46: BBRG Ambition and Conclusion
BRIDON-BEKAERT ROPES GROUP Ambition and Conclusion “BBRG is the world's premier ropes and advanced cords solution provider that best understands and satisfies the product and service needs of customers globally. We are committed to be the leading innovator and provider of the best performing ropes a
Slide 47: Jun Liao, Divisional CEO Specialty Businesses
Jun Liao Divisional CEO Specialty Businesses
Slide 48: Building Products
Building Products Building Products Fiber Technologies Combustion Technologies Sawing Wire
Slide 49: BEKAERT BUILDING PRODUCTS: general overview
BEKAERT BUILDING PRODUCTS: general overview Segments / applications served Main product categories C Overground Underground O CONCRETE PLASTERING MASONRY ROAD N C R E T E Insitu flooring Shotcrete mining & tunnelling Precast segmental lining M P R A L O S A A Widra® Murfor® Compact Fortifix® O S D N
Slide 50: Building Products market position, competitors, trends
BUILDING PRODUCTS market position, competitors, trends Segment Competitors Bekaert Demand drivers Opportunities and challenges Position Customers are flooring contractors and readymix Increase penetration of steel fibers in the global producers concrete reinforcement market (today: limited to • TCO:
Slide 51: BEKAERT BUILDING PRODUCTS SWOT
BEKAERT BUILDING PRODUCTS SWOT Current strengths, weaknesses, opportunities and threats Moving towards a more attractive cost base with S reduced total cost Stronger organization with centralized global operations, and regional leadership to shape global as well as regional strategies STRENGTHS W WE
Slide 52: BEKAERT BUILDING PRODUCTS Ambition and Conclusion
BEKAERT BUILDING PRODUCTS Ambition and Conclusion We want to further develop our leading positions by offering the best value solutions to existing and new customers Our priorities Maintain market share in the mature segments: be the preferred supplier with convenient solutions at the right price
Slide 53: Fiber Technologies
Building Products Fiber Technologies Fiber Technologies Combustion Technologies Sawing Wire
Slide 54: BEKAERT FIBER TECHNOLOGIES: general overview
BEKAERT FIBER TECHNOLOGIES: general overview Segments / applications served Main product categories New Business conductive plastics Filtration (polymer, hot gas, semicon, inkjet) Cables (car seat heating, Adblue heating) ECT (shielding, RFID, anti-static) HRT (majority autoglass) Footprint Geograph
Slide 55: Fiber Technologies: market positions, competitors, trends
FIBER TECHNOLOGIES: market positions, competitors, trends Segment Competitors Bekaert Demand drivers Opportunities and challenges Position • Industrial filtration CAGR: +6% - Diesel particulate filter media: market currently down • Customers: filter element producers - Polymer filtration: overcapaci
Slide 56: BEKAERT FIBER TECHNOLOGIES Ambition and Conclusion
BEKAERT FIBER TECHNOLOGIES Ambition and Conclusion Our objective: pushing the boundaries beyond metal fiber technology to enable new applications which contribute to a cleaner, safer, quieter and more comfortable world. Our priorities Maintain our market share in mature segments by keeping quality
Slide 57: Combustion Technologies
Combustion Technologies Building Products Fiber Technologies Combustion Technologies Sawing Wire
Slide 58: BEKAERT COMBUSTION TECHNOLOGIES: general overview
BEKAERT COMBUSTION TECHNOLOGIES: general overview Segments / applications served Main product categories Large commercial Hex Burners Commercial Hex Residential Hex Footprint Geographies Served Geographies served Asia 18% Americas 15% ERMEA 67% 58 Hex: heat exchangers
Slide 59: Combustion Technologies: market positions, competitors, trends
COMBUSTION TECHNOLOGIES: market positions, competitors, trends Segment Competitors Demand drivers Opportunities and challenges Worgas/Beckett, - Temporary slowdown in the transition from coal Gas burners to gas heating in China (current challenge, future Polidoro CAGR: 5% residential – 3% commercial
Slide 60: BEKAERT COMBUSTION TECHNOLOGIES Ambition and Conclusion
BEKAERT COMBUSTION TECHNOLOGIES Ambition and Conclusion Solidify leading position in gas premix combustion for the heating industry by offering high quality burner solutions and aluminum heat exchangers Grow sales and EBIT Our priorities Grow the business of commercial Heat Exchangers Grow our b
Slide 61: Sawing Wire
Building Products Sawing Wire Fiber Technologies Combustion Technologies Sawing Wire
Slide 62: BEKAERT SAWING WIRE SWOT
BEKAERT SAWING WIRE SWOT Current strengths, weaknesses, opportunities and threats High-quality thin diameter product Customer network in both PV and semiconductor Engineering and processing technology S STRENGTHS W WEAKNESSES Limited production scale Continuous growth in PV market Product solution f
Slide 63: BEKAERT SAWING WIRE Ambition and Conclusion
BEKAERT SAWING WIRE Ambition and Conclusion Define how we can grow a sustainable position in target markets, so we can benefit from increased scale and offset the price erosion Our priorities Process and cost breakthrough in diamond wire and grow in the thinner diameter products Be a leader in c
Slide 64: Content
Content 1 Introduction Matthew Taylor, CEO 2 Q3 trading update Taoufiq Boussaid, CFO 3 Business update per segment Divisional CEOs 4 Outlook and conclusions Matthew Taylor, CEO 5 Q&A All 64
Slide 65: Summary of Actions
SUMMARY OF ACTIONS From a business development perspective Continued growth in target markets Improving the product and business mix Driving customer centricity Accelerating technological leadership From an organizational & B/S health side The execution of the restructuring program in Belg
Slide 66: Outlook
OUTLOOK The business conditions have trended lower in various sectors as a result of tighter markets and continued uncertainty. Our tire markets held up well in the first nine months of 2019 but are expected to slow down in the fourth quarter as a result of the normal seasonality and destocking ac
Slide 67: Footprint Actions
FOOTPRINT ACTIONS We are implementing actions to improve our footprint and business-mix. These will have an impact on the one-off provisions for 2019: We have started executing the restructuring program in Belgium after having reached, on 1 October 2019, an agreement with the unions on the related
Slide 68: 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
Slide 69: Content
Content 1 Introduction Matthew Taylor, CEO 2 Q3 trading update Taoufiq Boussaid, CFO 3 Business update per segment Divisional CEOs 4 Outlook and conclusions Matthew Taylor, CEO 5 Q&A All 69
Slide 70: Bekaert – better together
® BEKAERT better together