8 November 2004
Trading update third quarter 2004 - Bekaert expects double-digit growth for 2004
Bekaert sustained its strong organic sales growth in the third quarter across all business segments and regions. The company has made further major efforts to manage continuing volatility in the raw materials markets, which has nevertheless inevitably translated into higher sales prices.
In the first nine months of 2004, Bekaert achieved an increase in consolidated and combined sales of 19% and 17% respectively.
[1]
[2]
The consolidated sales' increase was 20% from organic growth and 3% from the net movement in acquisitions and divestments, while adverse currency movements amounted to 4%.
First nine months 2004 |
Consolidated sales |
Combined sales |
|
in millions of € |
variance |
in millions of € |
variance |
Advanced wire products |
1 137 |
+23.5% |
1 802 |
+20.8% |
| Fencing systems Europe |
353 |
+13.9% |
398 |
+9.1% |
Advanced materials |
86 |
+11.3% |
86 |
+11.3% |
Advanced coatings |
97 |
+15.8% |
97 |
+9.6% |
Intersegment sales and others |
-38 |
- |
-42 |
- |
Total |
1 635 |
+18.7% |
2 341 |
+16.6% |
Combined sales by geographical area
First nine months 2004 |
Combined sales |
|
in millions of € |
variance |
Europe |
1 006 |
+14.5% |
North America |
477 |
+12.0% |
Latin America |
638 |
+25.5% |
Asia |
179 |
+10.5% |
Rest of the world |
41 |
+22.4% |
Total |
2 341 |
+16.6% |
In a generally favourable economic environment, Bekaert performed well for most of its products in Western Europe and North America. In addition, the company performed well in the growth markets in Latin America and Central Europe. In China, strict government regulations have resulted in temporary slow-down in the market growth for (steel cord reinforced) radial tyres. With its investment programme, Bekaert, however, is convinced that the Chinese Government’s long-term objectives, which are to bring the logistical costs of the infrastructure down to the same level as those in Europe and North America, will lead to an important increase in the pace of radialisation, i.e. the rate at which consumers switch from using diagonal tyres to radial tyres.
Advanced wire products
Combined sales of this whole business segment increased by 19%. Sales in wire Europe and wire North America both increased by 22%. The markets for wire Latin America and wire Asia performed well and sales increased by 26% and 65% respectively. Sales for building products rose by 37%. Sales of steel cord China decreased by 4%, while sales of the activity platform ‘steel cord others’ increased by 20%.
Consolidated sales of advanced wire products improved with the acquisition of Bekaert Hlohovec, a.s. (Slovak Republic) and of the remaining shareholding of Contours Ltd (U.S.).
Fencing systems Europe
Combined sales of fencing systems Europe rose by 10%. Sales of Bekaert Fencing NV increased by 14%, while sales of the Handling activity decreased by 20%.
Advanced materials
Combined sales of advanced materials increased by 11%. In fibre technologies, sales rose by 11%. Combustion technologies achieved an increase of 44%, amongst others due to the acquisition of Solaronics Technologies. Composites experienced a sales’ decrease of 26%, mainly due to the exit from composite profiles.
Advanced coatings
Combined sales for advanced coatings rose by 10%. In industrial coatings, sales went up by 16%. Sales of specialised films increased by 5%. Consolidated sales also rose as a result of the increased stake in Sorevi S.A. (France) and in Precision Surface Technology Pte Ltd (Singapore).
Outlook
Bekaert expects a double-digit growth in 2004.
Financial calendar
Analyst day 17 December 2004
Fourth quarter trading update and provisional 2004 results 21 February 2005
2004 results 17 March 2005
2004 annual report available on internet 22 April 2005
First quarter trading update 11 May 2005
General Meeting of Shareholders 11 May 2005
Dividend payable (coupon nr. 6) 18 May 2005
2005 interim results 1 August 2005
Third quarter trading update 14 November 2005