First Half Year results 2003

Bekaert confirms profit improvement

Brussels, 28 July 2003 – Bekaert, world leader in advanced metal transformation and coating technologies, headquartered in Belgium, announces today its first half-year results for 2003. 

 

Sales

At constant currencies, consolidated sales are 3.4 % up while combined sales (subsidiaries, joint ventures and associates) were flat. Taking into account the impact of the stronger euro, consolidated sales decreased by 5.4 % and combined sales by 10.4 % compared with 2002.

	Consolidated sales			Combined sales
in millions of euros	1H03	1H02	% Diff.	1H03	1H02	% Diff.
Wire Steelcord Bekaert Fencing Bekaert Advanced Materials Others Intersegment	319 308 217 106 27 (44)	367 306 218 113 26 (44)	-13.2% +0.8% -0.3% -6.2% +3.8%	666 345 260 110 27 (45)	811 343 263 127 26 (48)	-17.9% +0.5% -1.1% -13.7% +3.8%
Total	933	986	-5.4%	1 363	1 522	-10.4%

 

	Consolidated sales			Combined sales
in millions of euros	1H03	1H02	% Diff.	1H03	1H02	% Diff.
European Union Central & Eastern Europe North America Latin America Asia Rest of World	465 95 245 13 102 13	490 51 297 18 86 44	-5.1% +87.8% -17.5% -29.5% +18.9% -71.1%	516 95 287 339 104 22	545 51 363 416 95 52	-5.3% +87.8% -21.0% -18.7% +9.5% -58.0%
Total	933	986	-5.4%	1363	1 522	-10.4%

Combined sales of Bekaert Advanced Materials, excluding Unisolar, decreased by 4.7 %.  At constant currencies, combined sales were up 5.7 %. The hard winter and delayed governmental orders in North America temporarily affected Bekaert Specialised Films.

Combined sales of Steelcord remained at the level of previous year. However, at constant currencies, combined sales were up 13 % confirming the worldwide increase of sales volumes.

Combined sales of Wire were down 18 %. The decrease is largely explained by the weaker demand in Europe and North America, a stronger euro and the effect of the closure of some low margin activities.

Combined sales of Bekaert Fencing decreased by 1.1 % compared with previous year. 

 

Profitability

Margins on sales continue to improve due to a better product mix, a strict cost control, the successful implementation of the restructuring programmes, and the high activity level in Steelcord, particularly in China.

EBIT to sales was 7.3 %. EBIT amounted to € 68.3 million, after € 4.4 million non-recurring charges, to be compared with € 20.8 million, after € 47.5 million restructuring provisions, in 2002.

The share in the result of the joint ventures and associates increased by 52 % to € 18 million, due to the elimination of the losses from Unisolar, which was divested in May 2003, and to the good performance of the Latin American joint ventures. 

Bekaert realised a consolidated net profit of the Group of  € 43.7 million in the first half of 2003 (2002: € 9.4 million).

 

Cash flow

The operational cash flow (EBITDA) amounted to € 131.1 million, an increase of 29 % (EBITDA 2002 : € 101.5 million). This represents 14 % on sales compared with 10 % in 2002. Consolidated cash flow reached € 114.2 million, an increase of 24 %.

 

Capital expenditure

Capital expenditure of the consolidated companies was € 41 million during the first half of 2003 versus € 37 million during the same period last year. A higher figure is expected in the second half, reflecting the impact of the important investment programme in China.   

 

Balance Sheet

The gearing ratio was 46.8 % (2002: 48.1 %). Consolidated net debt decreased from € 463 million (June 2002) to € 412 million (June 2003).

Outlook

Bekaert continues to face difficult macro-economic conditions and the impact of a strong euro. While the demand of several products in Europe and North America is under pressure, Steelcord remains good.  

end of the press release.

 

See annexes : Consolidated Income Statement, Consolidated Balance Sheet, Consolidated cash flow statement, Key figures per share, Additional key figures, and the Profit and Loss Statement for N.V. Bekaert S.A.

Half year statements are unaudited

 

Important dates:

Third quarter trading update                                    14 November  2003
Bekaert Analyst Day                                               19 December  2003
Fourth quarter and provisional 2003 results                 9 February   2004
Announcement of 2003 results                                  18 March       2004

 

The consolidated accounts are established in conformity with the applicable Belgian law and regulations, on the understanding that the permission has been granted by the Belgian Banking and Finance commission to apply valuation rules which depart in some respects from the Belgian accounting legislation, but which are in accordance with the regulations of the 7th European Directive. These departures have been applied for the first time to the annual accounts of 2001 and 2000 (restated in 2001) and are based on the ‘International Financial Reporting Standards’ (previously IAS) issued by the ‘International Accounting Standards Board’, without being fully compliant with IFRS/IAS, due to the incomplete segment reporting provided by Bekaert.

Press release dd. 28 July 2003                                               Appendix 1

Consolidated Income Statement
in thousands of euros	1st half 2003	1st half 2002
Sales Cost of sales	932 698 <734 085>	986 121 <793 143>
Gross profit	198 613	192 978
Distribution & Selling expenses General & Administrative expenses Research and Development expenses Other revenue Other expenses	<57 196> <52 828> <18 734> 9 412 <10 950>	<57 977> <52 695> <18 898> 9 144 <51 726>
Result from operations	68 317	20 826
Interest income & expenses Other non-operating income & expenses	<18 340> <9 474>	<14 922> <5 772>
Result from ordinary activities before taxes	40 503	132
Income taxes	<9 300>	<893>
Result from ordinary activities after taxes	31 203	<761>
Share in the result of the equity companies Amortization goodwill on companies accounted for under the equity method Minority interest Extraordinary items	19 907 <1 937> <5 482> 0	13 895 <2 053> <1 640> 0
CONSOLIDATED NET RESULT OF THE GROUP	43 691	9 441

 

Goodwill Net result before goodwill

4 281 47 972

9 749 19 190

 

 

 

 

Press release dd. 28 July 2003                                                Appendix 3

Consolidated cash flow statement (in thousands of euros)	1st half 2003	1st half 2002
Cash provided by <used in> Operating activities Investing activities Financing activities	38 992 <48 331> 16 689	128 776 <27 899> <103 897>
Net cash increase <decrease>	7 350	<3 020>
Key figures (per share)
EBITDA EBIT EPS (Earnings per share) EPS before goodwill Cash flow Sales Book value Share price per 30 June Number of shares	5.93 3.09 1.98 2.17 5.16 42.16 40.03 40.70 22 121 630	4.58 0.94 0.43 0.87 4.16 44.51 43.43 47.95 22 157 374
Additional key figures (in thousands of euros)
Cash flow Operational cash flow (EBITDA) EBITDA (before non-recurring) Depreciation and amortisation Amortisation of goodwill Capital employed Working capital Net debt EBIT/sales EBIT/sales (before non-recurring) Gearing Average working capital/sales	114 220 131 109 135 509 60 448 4 281 1 290 105 412 059 411 777 7.3 % 7.8 % 46.8 % 20.5 %	92 158 101 490 148 990 72 968 9 749 1 391 360 421 956 462 650 2.1 % 7.0 % 48.1 % 21.4 %
N.V. BEKAERT S.A. – STATUTORY  -  Profit and Loss Statement (in millions of euros)
Sales Operating expenses	257.6 <252.7>	347.7 <338.7>
Operating result	4.9	9.0
Financial results	35.2	3.0
Profit from ordinary results	40.1	12.0
Extraordinary results	32.4	<6.6>
Result before income taxes	72.5	5.4
Income taxes	0	0
Result of the year	72.5	5.4