Bekaert Sa · EURONEXT:BEKB
Bekaert Sa — Investor Presentation (October 2020)
63 slides from Bekaert Sa's investor presentation, October 2020
Slide 1: Bekaert Investor Presentation
Bekaert Investor Presentation October 2020
Slide 2: Content
Content BEKAERT IN BRIEF INVESTMENT CASE 4 Fact sheet Investing in Bekaert 40 6 High-tech solution provider Strategy - Blue Slide 41 7 Sustainability ambitions and actions Profitability: journey and ambition 42 8 Global presence Dividend policy 43 9 Technological and Market leadership SEGMENT PERFOR
Slide 3: Content
Content BEKAERT IN BRIEF INVESTMENT CASE 4 Fact sheet Investing in Bekaert 40 6 High-tech solution provider Strategy - Blue Slide 41 7 Sustainability ambitions and actions Profitability: journey and ambition 42 8 Global presence Dividend policy 43 9 Technological and Market leadership SEGMENT PERFOR
Slide 4: Bekaert in brief
Bekaert in brief Founded in 1880 by Leo Leander Bekaert The world’s largest independent producer of steel wire products and solutions Serving customers from a very wide range of industry sectors in 120 countries and operating a global manufacturing platform with 28 000 employees worldwide Combined s
Slide 5: Bekaert in your day-to-day life
Bekaert in your day-to-day life… We’re present in a very wide range of applications 30% of all tires around the Every year, 10 million m³ of Bekaert’s customers use 3.5 Over 1 billion bottles are world are reinforced concrete is being reinforced million kilometer of bookbinding uncorked annually by
Slide 6: High-tech solution provider
High-tech solution provider surfing the waves of megatrends Bekaert develops sustainable We develop innovative steel Our high-tech solutions for realizing Based on our ultra-thin materials for future mobility. and synthetic mooring solutions vertical cities include A-cords for metal fiber technologi
Slide 7: Ambitions and actions for a sustainable future
Ambitions and actions for a sustainable future We conduct and grow our business in a sustainable way so that our employees, customers, shareholders, business partners, and communities all benefit. Our commitment to drive value takes into account the broader environmental and social impacts of our op
Slide 8: Bekaert global presence
Bekaert global presence Bekaert production plants Bekaert offices Bekaert Technology Centers BBRG production & distribution sites 8
Slide 9: Bekaert technological leadership
Bekaert technological leadership € 70 million International R&D teams in About 1800 R&D in 2019 Belgium – China – India – UK patent rights Co-creation with customers and suppliers Outward orientation • internationalization of technologists • cooperation with internationally renowned research centers
Slide 10: Bekaert core competencies
Bekaert core competencies steel wire transformation from wire rod drawing, bunching, cabling, to metal fibers 6.5 mm profiling, welding, 1 µm knitting, weaving… coating technologies from traditional adhesion to advanced coatings corrosion resistance coatings wear resistance anti-fouling 10 Investor
Slide 11: Bekaert market leadership in diverse sectors
Bekaert market leadership in diverse sectors – combined sales (FY2019) 46% Tire & Automotive 18% Construction 8% Agriculture 8% Energy & utilities 7% Consumer goods 7% Basic materials 6% Equipment Bekaert has a strong presence in diverse sectors. This makes Bekaert less sensitive to sector- specific
Slide 12: Content
Content BEKAERT IN BRIEF INVESTMENT CASE 4 Fact sheet Investing in Bekaert 40 6 High-tech solution provider Strategy - Blue Slide 41 7 Sustainability ambitions and actions Profitability: journey and ambition 42 8 Global presence Dividend policy 43 9 Technological and Market leadership SEGMENT PERFOR
Slide 13: 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 ad in
Slide 14: Segmentation and sectorial breakdown (consolidated sales H1 2020)
Segmentation and sectorial breakdown (consolidated sales H1 2020) Rubber Reinforcement (RR) Steel Wire Solutions (SWS) Specialty Businesses (SB) Bridon-Bekaert Ropes Group (BBRG) Tire cord, bead wire, hose Steel wire products and Building products, fiber reinforcement wire and solutions serving indu
Slide 15: Rubber Reinforcement
Rubber Reinforcement Combined revenue data FY2019 15 Investor presentation - Bekaert
Slide 16: Steel Wire Solutions
Steel Wire Solutions Combined revenue data FY2019 Combined revenue per sector - 2019 16 Investor presentation - Bekaert
Slide 17: Specialty Businesses
Specialty Businesses Revenue data FY2019 19 sites Revenue per sector - 2019 17 Investor presentation - Bekaert
Slide 18: Bridon-Bekaert Ropes Group
Bridon-Bekaert Ropes Group Revenue data FY2019 2 450 15 Revenue per sector - 2019 18 Investor presentation - Bekaert
Slide 19: 2020 H1 Sales
2020 H1 Sales Consolidated sales 2019 2020 Share Variance Organic FX Rubber Reinforcement 1 014 709 40% -30% -30% - Steel Wire Solutions 751 639 36% -15% -12% -3% Specialty Businesses 202 185 10% -9% -8% -1% BBRG 242 229 13% -6% -4% -2% Group 10 9 - - - - Total 2 218 1 770 100% -20% -19% -1% Combine
Slide 20: Content
Content BEKAERT IN BRIEF INVESTMENT CASE 4 Fact sheet Investing in Bekaert 40 6 High-tech solution provider Strategy - Blue Slide 41 7 Sustainability ambitions and actions Profitability: journey and ambition 42 8 Global presence Dividend policy 43 9 Technological and Market leadership SEGMENT PERFOR
Slide 21: H1 2020 Bekaert counters significant impact of Covid-19
H1 2020 Bekaert counters significant impact of Covid-19 through effective mitigating measures and performance improvements The turnaround of SWS and BBRG and the effectiveness of implemented measures moderate the impact of Covid-19 on the Rubber Reinforcement business
Slide 22: Market developments and Covid-19 impact in the first half of 2020
Market developments and Covid-19 impact in the first half of 2020 Main applications • Demand from tire and automotive markets Tire cord ‒ Hit hard, first in China and quickly followed in the rest of the world Bead wire ‒ Up to -30% drop in global car/truck production over the first half Heat resista
Slide 23: Our response
Our response Health Customer Liquidity Profit Supply & Safety Centricity & Cost Restoration Chain Mgt • Early, rigorous • Close contact to • Strict control on • Acceleration of the • Secured supplies of measures to limit understand current and working capital and turnaround of SWS critical products
Slide 24: H1 2020 Financial Highlights
H1 2020 Financial Highlights • Underlying EBIT margin of 5.2% (5.7% H1 2019) on a revenue decrease of -20% • Robust performance improvement SWS and BBRG – SB remaining strong – RR significantly affected • Proactive actions and mitigating response to Covid-19: reduction of cost and working capital •
Slide 25: H1 2020 Financial Highlights
H1 2020 Financial Highlights H1 2019 2020 Δ yoy % Sales 2 218 1 770 -448 -20% EBITDA-underlying 239 194 -45 -19% EBIT-underlying 126 92 -34 -27% % EBITDA-underlying 10.8% 11.0% +0.2pp +2% % EBIT-underlying 5.7% 5.2% -0.5pp -9% Working Capital 956 720 -236 -25% Net Financial Debt 1 253 955 -298 -24%
Slide 26: EBIT-Underlying bridge
EBIT-Underlying bridge 130 6 -2 110 90 30 70 126 -138 50 17 92 18 30 10 34 -10 EBIT Underlying Inventory Valuation FX effects COVID 19 COVID 19 business mix cost + overheads EBIT Underlying 2019.06 volume + cost mitigation 2020.06 external levers internal levers 26
Slide 27: EBIT-Underlying bridge by Business Unit
EBIT-Underlying bridge by Business Unit 27
Slide 28: Rubber Reinforcement: significantly affected by Covid-19
Rubber Reinforcement: significantly affected by Covid-19 impact on tire & automotive markets in Q2 (in mio €) Underlying Reported H1 2019 H1 2020 H1 2019 H1 2020 Consolidated third party sales 1 014 709 1 014 709 Consolidated sales 1 031 725 1 031 725 Gross profit 126 55 123 54 EBIT 94 28 91 27 EBIT
Slide 29: Steel Wire Solutions: robust profit improvement on lower sales
Steel Wire Solutions: robust profit improvement on lower sales (in mio €) Underlying Reported H1 2019 H1 2020 H1 2019 H1 2020 Consolidated third party sales 751 639 751 639 Consolidated sales 778 655 778 655 Gross profit 82 93 82 93 EBIT 28 40 26 39 EBIT margin 3.5% 6.0% 3.4% 5.9% EBITDA 55 67 53 64
Slide 30: Specialty Businesses: continued strong profit contribution
Specialty Businesses: continued strong profit contribution (in mio €) Underlying Reported H1 2019 H1 2020 H1 2019 H1 2020 Consolidated third party sales 202 185 202 185 Consolidated sales 208 188 208 188 Gross profit 60 57 54 56 EBIT 25 24 18 23 EBIT margin 12.0% 12.9% 8.6% 12.0% EBITDA 33 31 27 30
Slide 31: Bridon-Bekaert Ropes Group: exceptionally strong step-up in performance
Bridon-Bekaert Ropes Group (BBRG): exceptionally strong step-up in performance (in mio €) Underlying Reported H1 2019 H1 2020 H1 2019 H1 2020 Consolidated third party sales 242 229 242 229 Consolidated sales 244 230 244 230 Gross profit 41 50 43 50 EBIT 6 24 8 24 EBIT margin 2.6% 10.3% 3.4% 10.3% EB
Slide 32: Consolidated income statement: key figures
Consolidated income statement: key figures (in mio €) Underlying Reported H1 2019 H1 2020 H1 2019 H1 2020 Sales 2 218 1 770 2 218 1 770 Cost of sales (1 909) (1 518) (1 916) (1 521) Gross profit 309 252 302 249 • Sales decreased by -20.2%: • -17.7% organic volume decline (-26.5% in Q2) • -1.1% passe
Slide 33: Consolidated income statement: key figures
Consolidated income statement: key figures (in m io €) Underlying Reported H1 2019 H1 2020 H1 2019 H1 2020 Gross profit 309 252 302 249 Selling expenses (88) (81) (89) (81) Administrative expenses (70) (59) (71) (60) R&D expenses (33) (25) (33) (26) Other operating revenue and expenses 8 4 7 4 EBIT
Slide 34: Other information
Other information • CAPEX in PP&E: € 37 million, € -11 million below the level in H1 last year • In July 2020, Bekaert reached final agreements with buyers on the sale of properties in Belgium: ‒ Hemiksem land: net cash impact of € +23 million and income statement impact of € +36 million in Q4 ‒ Moe
Slide 35: Outlook
Outlook • We project a gradual recovery in tire markets in the remainder of the year • Demand evolutions in other markets are more difficult to project in the current economic environment • We will continue to implement mitigating actions and other improvement measures • We expect continued impact f
Slide 36: Debt management: new bond issue, strong liquidity, reducing net debt
Debt management: new bond issue – strong liquidity – reducing debt & net debt leverage • New retail bond issue (€ 200 mln – 7 years – 2.75% annual gross coupon): (over)subscribed in one day – settlement date is 23 October. Proceeds will be used to pay back the convertible bond (€ 380 mln) maturing i
Slide 37: Debt maturity table
Debt maturity table In millions of € 600 60 mio € will be paid back on 24/12/2020 400 Pay-back on 9 June 2021 200 0 2020 2021 2022 2023 2024 2025 2026 2027 -200 -400 -600 -800 -1 000 Bond Convertible LT ST Schuldschein Cash 37 Investor presentation - Bekaert
Slide 38: Net debt and leverage evolution
Net debt and leverage evolution In millions of € 1200 3 1000 2.7 2.5 2.5 2.6 2.3 800 2 2.1 600 1.5 400 1 200 0.5 1151 1153 1253 977 955 0 0 2017 2018 1H 2019 2019 1H 2020 Net debt Net debt/EBITDA-Underlying 38 Investor presentation - Bekaert
Slide 39: Content
Content BEKAERT IN BRIEF INVESTMENT CASE 4 Fact sheet Investing in Bekaert 40 6 High-tech solution provider Strategy - Blue Slide 41 7 Sustainability ambitions and actions Profitability: journey and ambition 42 8 Global presence Dividend policy 43 9 Technological and Market leadership SEGMENT PERFOR
Slide 40: Investing in Bekaert
Investing in Bekaert is taking part in The growth ambitions of a world market and technology leader A transformation towards 7% underlying EBIT margin over the medium term and higher beyond A high-tech solution provider focusing on product and application innovations in attractive growth marke
Slide 41: Strategy - Blue Slide
41 Investor presentation - Bekaert
Slide 42: The Bekaert journey since 2013 + Our Ambition
The Bekaert journey since 2013 + Our Ambition Negative: Volatility of wire rod prices and inflationary costs Uncertainty related to US trade policy changes and Brexit Difficult business climate in Latin America Very limited demand for our sawing wire 2020 Start-up issues in expansion projects Unfavo
Slide 43: Dividend policy
Dividend policy 400 80% It is the policy of the Board of Directors to propose a 300 60% profit appropriation to the General Meeting of Shareholders which, insofar as the profit permits, Pay-out ratio 44% provides a stable or growing dividend while In millions of € 200 40% maintaining an adequate lev
Slide 44: Content
Content BEKAERT IN BRIEF INVESTMENT CASE 4 Fact sheet Investing in Bekaert 40 6 High-tech solution provider Strategy - Blue Slide 41 7 Sustainability ambitions and actions Profitability: journey and ambition 42 8 Global presence Dividend policy 43 9 Technological and Market leadership SEGMENT PERFOR
Slide 45: 2019 Sales
2019 Sales Consolidated third party sales 2018 2019 Share Variance Organic FX Rubber Reinforcement 1 908 1 953 45% +2% +1% +2% Steel Wire Solutions 1 497 1 448 34% -3% -4% +1% Specialty Businesses 411 414 10% +1% = +1% BBRG 463 489 11% +5% +4% +1% Group 26 19 - - - - Total 4 305 4 322 100% +0.4% -0.
Slide 46: 2019 Financial Highlights
2019 Financial Highlights Improvement Actions and Results 2018 2019 Δ yoy % Sales 4 305 4 322 +17 +0.4% • Market share increase RR China EBITDA-underlying 426 468 +42 +9.9% • Better pricing • Improved mix from better segmentation EBIT-underlying 210 242 +32 +15.1% One-off items (63) (87) -24 37.4% •
Slide 47: EBIT-Underlying bridge: by result driver
EBIT-Underlying bridge: by result driver 47 Investor presentation - Bekaert
Slide 48: Consolidated income statement: key figures
Consolidated income statement: key figures (in mio €) Underlying Reported 2018 2019 2018 2019 EBIT 210 242 147 155 EBIT margin 4.9% 5.6% 3.4% 3.6% EBITDA 426 468 387 403 EBITDA margin 9.9% 10.8% 9.0% 9.3% ROCE 8.0% 9.5% 5.6% 6.1% • Improvement in EBIT, EBITDA and ROCE • The difference between Underl
Slide 49: Consolidated income statement: one-off items
Consolidated income statement: one-off items (in mio €) 2018 2019 EBIT - Underlying 210 242 Restructuring programs (62) (82) Rubber Reinforcement (25) (15) Steel Wire Solutions 2 (23) Specialty Businesses (18) (16) Bridon-Bekaert Ropes Group (BBRG) (13) (5) Group (8) (23) Other (1) (4) EBIT 147 155
Slide 50: Ratios: key figures
Ratios: key figures Underlying Reported 2018 2019 2018 2019 Gross profit margin 13.6% 13.6% 12.2% 12.2% EBITDA margin 9.9% 10.8% 9.0% 9.3% EBIT margin 4.9% 5.6% 3.4% 3.6% Sales on capital employed (asset rotation) 1.6 1.7 1.6 1.7 Return on capital employed (ROCE) 8.0% 9.5% 5.6% 6.1% Return on equity
Slide 51: Content
Content BEKAERT IN BRIEF INVESTMENT CASE 4 Fact sheet Investing in Bekaert 40 6 High-tech solution provider Strategy - Blue Slide 41 7 Sustainability ambitions and actions Profitability: journey and ambition 42 8 Global presence Dividend policy 43 9 Technological and Market leadership SEGMENT PERFOR
Slide 52: News updates
News updates: https://www.bekaert.com/en/about-us/news-room € 200 million bond (over) subscribed in one day Launch of € 200 million retail bond – 7 years Merger of steel wire players in Colombia Floating offshore wind partnership with Ideol H1 2020 results Sale of real estate: € +36 million P&L impa
Slide 53: History
History pioneering innovating growing diversifying BRIC transforming 1880 1952 Early 1970s Early 1980s 1993 2013 Leo Leander Bekaert Steel cord production New steel cord plant Bekaert moves into Bekaert recognizes China’s Bekaert lifts its ambition level starts a small business start openings and co
Slide 54: Tire & Automotive (46%)
Tire & Automotive (46%) In the tire & automotive sector, we set ourselves apart by consistently creating high-quality and innovative products that are tailored to our customers’ needs. We supply specialized wire products that meet the highest quality standards. • tire cord • clutch spring wire • bea
Slide 55: Construction (18%)
Construction (18%) By offering wire, mesh and fiber products in numerous construction applications, we seek out more environment-friendly solutions with a focus on better materials, greater safety, improved ease-of-use and lower energy consumption, all with an eye on cost-efficiency. • Dramix® steel
Slide 56: Agriculture (8%)
Agriculture (8%) Across the agricultural sector, Bekaert provides innovative solutions that make day-to-day work easier. Through our global footprint and our mix of trading and manufacturing, we can offer total packages to our customers. • tensioning wire for plant support and binding • fencing syst
Slide 57: Energy & Utilities (8%)
Energy & Utilities (8%) Whether it concerns onshore or offshore oil extraction, gas mining, power transmission, solar energy, or even telecommunications, Bekaert products are key contributors to sustainable, safer and more cost-efficient operations. • wire and ropes for oil and gas exploration • pro
Slide 58: Consumer goods (7%)
Consumer goods (7%) As ever higher quality and comfort standards and functionalities are required, the demand for more advanced coated steel wire products evolves accordingly. Often unknown, but always there: Bekaert is a part of the products we all use every day. • champagne cork wire • bookbinding
Slide 59: Basic Materials (7%)
Basic Materials (7%) Many Bekaert products are used in exploring and producing raw materials, from coal and metals to pulp and paper, to chemicals and textiles. We make cable and wefts for conveyor belts that are used across many industries. We continue to find new ways to span every step of the val
Slide 60: Equipment (6%)
Equipment (6%) Bekaert supplies heavy equipment makers and operators with a range of specialized steel wire products. As we build our own proprietary machinery, we know exactly what it means to make high-performance equipment. This allows Bekaert to focus on innovation and machine makers to focus on
Slide 61: Contact
Contact Investor Relations : Katelijn Bohez +32 56 76 66 10 [email protected] Dries Van Hamme +32 51 33 34 23 [email protected] Documentation : Christine Clarysse +32 56 76 66 13 [email protected] Shareholders, investors and other interested parties wishing to receive
Slide 62: Investor section online @ www.bekaert.com
Investor section online @ www.bekaert.com 62 Investor presentation - Bekaert
Slide 63: better together
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