Bekaert SA · EURONEXT:BEKB
Bekaert SA — H1 2008 Earnings Presentation
39 slides from Bekaert SA's earnings presentation, Aug 1, 2008
Slide 1: Half year results 2008
0 Half year results 2008 1 August 2008 Bert De Graeve, Chief Executive Officer Bruno Humblet, Chief Financial Officer 0 Half year results - 1 August 2008
Slide 2: Address by Bert De Graeve, Chief Executive Officer
1 Address by Bert De Graeve, Chief Executive Officer 1 Half year results - 1 August 2008
Slide 3: Introductory remark
2 Introductory remark The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Half year results are unaudited. All comparisons are made relative to the figures of the first half of 2007. Combined
Slide 4: Content
3 Content - Highlights - Business review - Financials - Key challenges & Outlook 3 Half year results - 1 August 2008
Slide 5: Highlights first half 2008
4 Highlights first half 2008 - Consolidated sales +22%, combined sales +18% - Steel cord China +80%, wire Latin America +25% - Increased selling prices reflecting mainly the increase in raw material prices - 12.5% REBIT margin on sales, compared with 8.5% - 11.2% EBIT margin on sales, compared with
Slide 6: Content
5 Content - Highlights - Business review - Financials - Key challenges & Outlook 5 Half year results - 1 August 2008
Slide 7: Business Review
6 Business Review - Strategic choices to focus on innovation, emerging markets and fast growing new industries deliver record results - Important price increases of raw material and energy force substantial price increases in all regions - Recent significant investments in emerging markets offer mor
Slide 8: SPG: Growth
7 SPG: Growth - Consolidated sales growth of 22.3% +20% organic growth +7.6% from acquisitions: Venezuela & Columbia -5.3% translation effect due to strong euro - Combined sales growth of 18% - Widely spread growth provides resilience to downturn in mature markets and automotive and constructi
Slide 9: Profitability
8 Profitability - EBIT margin of 11.2% - EBITDA of € 225 mio - Result attributable to the Group increases to € 126 mio, up 73% - Maximum capacity utilization in nearly all plants, mainly in emerging markets - Constant focus on operational excellence further optimizes cost structure and reduces waste
Slide 10: Sustainability
9 Sustainability - Broad based sales growth - Healthy cash flow generation providing the financial capacity to further invest in future growth - Acceleration of capital investments to support organic growth - Increased effort in R&D to identify future growth opportunities - Gross margin improvement
Slide 11: Sales
10 Sales 2007 Organic Acquisitions/ Effect currency 2008 in mio € growth divestments movements 7.6% 20.0% -5.3% Consolidated +22.3% 1 065 1 303 21.8% -3.9% +18.0% Combined 1 671 1 971 - Strong organic growth driven by emerging markets - Acquisition of our JV partner’s shares in Vicson results in the
Slide 12: Reinforcing Bekaert's global presence
11 Reinforcing Bekaert’s global presence Europe North America 41% 29,4% 24% 14,3% 2002 1H2008 2002 1H2008 Asia 8% 17,8% 2002 1H2008 Latin America Other regions 26% 37,5% 1% 1,1% Offices Production plants 2002 1H2008 2002 1H2008 11 Half year results - 1 August 2008
Slide 13: Sales by business segment
12 Sales by business segment Consolidated sales Combined sales 1H 2008 in millions of € variance in millions of € variance Advanced wire products 1 138 +26.8% 1 811 +20.1% Advanced materials 101 +0.1% 101 +0.1% Advanced coatings 61 -4.1% 61 -4.1% Intersegment and others 3 -2 Total 1 303 +22.3% 1 971
Slide 14: Sales by geographical area
13 Sales by geographical area Consolidated sales Combined sales In mio € variance in mio € variance Europe 576 7.6% 579 6.9% North America 267 -2.3% 282 -3.1% Latin America 101 461.5% 738 25.8% Asia 343 58.3% 350 57.0% Other regions 16 -26.7% 22 -23.0% Total 1 303 22.3% 1 971 +18.0% Consolidated sal
Slide 15: Advanced wire products: sales
14 Advanced wire products: sales +20.1% +23.8% in mio € Combined sales 673 679 Wire Europe +15.7% 610 Wire North America +8.5% Wire Latin America +24.9% Wire Asia +63.3% Building Products +18.0% 1138 1188 897 Steel Cord China +80.5% Steel Cord Others -4.7% Other advanced wire products -21.8% 1H 2007
Slide 16: Advanced materials: sales
15 Advanced materials: sales in mio € + 0.1% Stainless -32.2% Fiber technologies +3.3% Combustion technologies +5.2% Composites +38.6% 100,7 100,8 1H 2007 1H 2008 - Stainless: lower sales reflect lower demand and price reduction of nickle-based wire rod - Fiber technologies: growth in diesel particu
Slide 17: Advanced coatings: sales
16 Advanced coatings: sales - 4.1 Industrial coatings -8.8% % Specialized films -0.6% 64 61 1H 2007 1H 2008 - Industrial coating: weak market demand mainly for sputter target products - Specialized films: strong growth (+14%), mainly in Asia and for industrial applications. This is fully offset by e
Slide 18: Address by Bruno Humblet, Chief Financial Officer
17 Address by Bruno Humblet, Chief Financial Officer 17 Half year results - 1 August 2008
Slide 19: Content
18 Content - Highlights - Business review - Financials - Key challenges & Outlook 18 Half year results - 1 August 2008
Slide 20: Consolidated income statement: key figures
19 Consolidated income statement : key figures (in mio €) 1H 2007 1H 2008 Sales 1065.1 1303.1 Cost of sales -851.1 -995.1 Gross profit 214.0 308.0 Gross profit margin 20.1 % 23.6% - Gross margin increase with 3.5% points of sales reflecting: Better geographical mix Better product mix with more i
Slide 21: Consolidated income statement: key figures
20 Consolidated income statement : key figures (in mio €) 1H 2007 1H 2008 Gross profit 214.0 308.0 Selling expenses -48.9 -58.7 Administrative expenses -47.3 -53.3 R&D expenses -30.6 -32.9 Others 3.0 -0.3 Operating result (EBIT) before non-recurring items 90.3 162.9 - Increase in S&A: Including ne
Slide 22: Consolidated income statement: key figures
21 Consolidated income statement: key figures (in mio €) 1H 2007 1H 2008 Operating result (EBIT) before non-recurring items 90.3 162.9 EBIT margin on sales before non-recurring items 8.5% 12.5% Non-recurring items -3.8 -17.5 Operating result (EBIT) 86.5 145.3 EBIT margin on sales 8.1% 11.2% EBITDA 1
Slide 23: Segment reporting: advanced wire products
22 Segment reporting: advanced wire products (in mio €) 1H 2007 1H 2008 Consolidated sales 897 1 138 Operating result (EBIT) before non-recurring 108 183 items Operating result (EBIT) 105 169 Depreciation and amortization 50 66 EBITDA 155 235 EBIT margin on sales 11.7% 14.9% EBITDA margin on sales 1
Slide 24: Segment reporting: advanced materials
23 Segment reporting: advanced materials (in mio €) 1H 2007 1H 2008 Sales 101 101 Operating result (EBIT) before non-recurring 10 7 items Operating result (EBIT) 10 4 Depreciation and amortization 4 9 EBITDA 14 13 EBIT margin on sales 9.7% 3.7% EBITDA margin on sales 13.5% 12.5% - Lower demand for s
Slide 25: Segment reporting: advanced coatings
24 Segment reporting: advanced coatings (in mio €) 1H 2007 1H 2008 Sales 64 61 Operating result (EBIT) before non-recurring items -1 4 Operating result (EBIT) -1 4 Depreciation and amortization 5 5 EBITDA 4 9 EBIT margin on sales -1.1% 7.2% EBITDA margin on sales 6.9% 14.7% - Lower sales mainly refl
Slide 26: Consolidated income statement: key figures
25 Consolidated income statement: key figures (in mio €) 1H 2007 1H 2008 Operating result (EBIT) 86.5 145.3 Interest income/expense -16.4 -17.1 Other financial result 0.1 -5.2 Result from continuing operations before taxes 70.2 123.0 Income taxes -15.0 -25.5 Result from continuing operations 55.3 97
Slide 27: Consolidated income statement: key figures
26 Consolidated income statement: key figures (in mio €) 1H 2007 1H 2008 Result from consolidated companies 55.3 97.5 Share in the results of JV’s and associates 23.4 35.7 Result for the period 78.7 133.2 Minority interests -5.8 -7.1 Results for the Group 72.9 126.1 - Results from JV’s even after ta
Slide 28: Cash flow: key figures
27 Cash flow: key figures (in mio €) 1H 2007 1H 2008 Gross cash from operations 132.1 210.8 Net cash from operations 76.0 44.2 Cash from investment activities -48.3 -62.8 Cash from operational financing activities -167.8 -82.1 - Working capital increase of € 148 million in line with business growth
Slide 29: Working capital: key figures
28 Working capital: key figures (in mio €) 1H 2007 1H 2008 Inventories 422.7 473.6 Accounts receivable 424.4 550.4 Accounts payable -343.2 -372.3 Working capital 503.9 651.7 - Working capital increase in line with sales growth - Average working capital on sales of 22.0%, compared to 22.4% 28 Half ye
Slide 30: Consolidated balance sheet: key figures
29 Consolidated balance sheet: key figures Assets Equity and Liabilities 2 582 2 582 2 313 2 313 Current 758 liabilities 640 1353 Non-current assets 1335 Non-current 633 liabilities 526 Equity Current assets 1229 1147 1191 977 31 Dec 07 30 June 08 31 Dec 07 30 June 08 - Increase in current assets ma
Slide 31: Balance sheet: key figures
30 Balance sheet: key figures (in mio €) 1H 2007 1H 2008 Net financial debt 493 534 Gearing (net debt to equity) 47 % 45% - Net debt increased as higher cash from operations is more than offset by increase in working capital and accelerated capital investments - Gearing remains close to target of 50
Slide 32: Ratios: key figures
31 Ratios: key figures (in mio €) 1H 2007 1H 2008 EBITDA on sales 13.6% 17.3% EBIT margin on sales before non-recurring items 8.5% 12.5% EBIT on sales 8.1% 11.2% Sales on capital employed (asset rotation) 1.5 1.6 Return on capital employed 12.0% 18.0% Return on equity 14.6% 22.8% - Strong ratio’s fo
Slide 33: Key figures per share
32 Key figures per share In € 1H 2007 1H 2008 Share price at 30 June 108.85 98.05 Number of existing shares at 30 June 20 400 000 19 670 000 Book value 56.21 60.55 Result for the period attributable to the Group 3.61 6.40 Weighted average number of shares 20 202 311 19 692 333 Cash flow attributable
Slide 34: Content
33 Content - Highlights - Business review - Financials - Key challenges & Outlook 33 Half year results - 1 August 2008
Slide 35: Key challenges
34 Key challenges - Impact on global market demand due to additional price increases to offset further raw material price increases - Alignment of global footprint to constantly changing market demand - Capacity expansion to capture growth in a competitive market environment - Invest in innovation t
Slide 36: Outlook
35 Outlook - Maintain solid top line growth for the balance of the year - Raw material prices further increased in Q3, more uncertainty for the next quarters - Mature market conditions are expected to remain challenging reflecting low demand and significant cost increases - Further accelerate invest
Slide 37: Financial calendar
36 Financial calendar Third quarter trading update 2008 07 November 2008 Fourth quarter trading update 2008 20 February 2009 2008 results 13 March 2009 2008 annual report available on internet 17 April 2009 First quarter trading update 2009 13 May 2009 General meeting of shareholders 13 May 2009 Div
Slide 38: Contact
37 Contact We like to keep on listening to you. Any questions? Please do not hesitate to contact us: Jacques Anckaert Katelijn Bohez Investor Relations Corporate Communication President Kennedypark 18 President Kennedypark 18 BE-8500 Kortrijk BE-8500 Kortrijk T +32 56 23 05 72 T +32 56 23 05 71 F +3
Slide 39: better together
38 better together www.bekaert.com 38 Half year results - 1 August 2008