Full Year Results 2015: Bekaert on track
Strong margin growth, robust cash generation and significant improvement of net debt/EBITDA
Highlights
Bekaert achieved strong sales growth thanks to the successful integration of acquisitions, favorable currency movements and a better product mix. The company's consolidated top line increased by 14% to € 3.7 billion in 2015. The product mix improved thanks to the increased share of steel cord and sawing wire and the company's exit from loss-generating product groups. These mix effects and sustained cost savings boosted REBIT by 36% to € 223 million, representing a margin of 6.1%. Notwithstanding the economic evolutions and the competitive pressure in China and Latin America, Bekaert's activities reported strong margin growth particularly in those regions. In EMEA we achieved robust, double-digit margins throughout 2015 while in North America results were influenced by one-off effects.
Bekaert outperformed most markets in 2015 and countered the downward pricing and margin effects of raw materials and competitive pressure by improving the portfolio and the underlying structure of the business. The solid performance resulted in a strong operational cash generation, allowing a reduction of net debt in spite of major acquisitions and capital investments.
Key figures:
- Consolidated sales of € 3.7 billion (+14%) and combined sales of € 4.4 billion (+9%)
- Currency impact: € 270 million (+8.4%) on consolidated sales and € 149 million (+3.7%) on combined sales
- Gross profit of € 598 million (16.3% margin) compared with € 486 million (15.1%) in 2014
- REBIT of € 223 million (6.1% margin) compared with € 164 million (5.1%)
- Non-recurring items of € -3 million compared with € +7 million
- EBIT of € 220 million compared with € 171 million or a margin on sales of 6.0% compared with 5.3%
- EBITDA of € 441 million compared with € 342 million or a margin on sales of 12.0% versus 10.6%
- Net debt on EBITDA of 1.9, compared with 2.5 last year
- EPS: € 1.83 compared with € 1.51
Bekaert continued to invest in future growth:
- Bekaert successfully integrated the steel cord activities acquired from Pirelli and the former Arrium ropes business in Australia. Bekaert also reached an agreement with Ontario Teachers' Pension Plan for the intended merger of the ropes and advanced cords activities of Bekaert and Bridon.
- R&D expenses totaled € 65 million (€ 59 million in 2014).
- Capital expenditure (plant, property and equipment) reached € 171 million, up 29% from last year.
- Notwithstanding the significant impact of acquisitions (€ 235 million net of divestitures) and investments, Bekaert reduced net debt to € 832 million from € 853 million as at year-end 2014 and down from € 1 023 million as at 30 June 2015. The reduction was primarily driven by strong cash generation and strict working capital control.
The Board of Directors confirms its confidence in the strategy and future perspectives of the company and will propose to the Annual General Meeting of Shareholders a gross dividend of € 0.90 per share, compared with
€ 0.85 last year.