2004-05-12



Trading update first quarter 2004

Sharp sales’ increase in first quarter


In the first quarter of 2004, Bekaert achieved an increase in consolidated and combined [1] sales of 14% and 12%, respectively, compared to the first quarter of 2003 [2]

Consolidated sales first quarter 2004 by segment

 

Consolidated sales

 

in € millions

share

Δ 2003

Advanced wire products

Fencing systems Europe

Advanced materials

Advanced coatings

Others and intersegment sales

         333

         117

          25

          30

            2

          66%

          23%

           5%

           6%

              -

      +16%

      +15%

        +1%

      +13%

            -

Total

        507

        100%

      +14%

All segments contributed to Bekaert’s sustainable profitable growth.  The consolidated sales’ increase in the first quarter of 2004 was 14% from organic growth and 6% from the net movement in acquisitions and divestments. Adverse currency movements amounted to -6%.

Advanced wire products expanded by the acquisition of Bekaert Hlohovec (Slovak Republic) and of the remaining shareholding of Contours (U.S.). 

Advanced materials experienced a decrease in consolidated sales due to the divestment of composite profiles, but this was balanced by a sharp increase in the other activities of this segment in the first quarter of 2004. 

Consolidated sales of advanced coatings also increased due to the increased participation in Sorevi (France) and Precision Surface Technology (Singapore).   

 Combined sales first quarter 2004 by segment

 

Combined sales

 

in € millions

share

Δ 2003

Advanced wire products

Fencing systems Europe

Advanced materials

Advanced coatings

         535

         135

          25

          30

          74%

          19%

           3%

           4%

        +13%

         +8%

         +1%

          +7%

Total

         725

        100%

        +12%

Combined sales of advanced wire products rose by 13%. Further price increases in wire products are generally expected in the market due to raw materials’ supply issues and wire rod price increases. It is believed that customers are bringing forward orders in anticipation of these increases. 

Combined sales in wire Europe were up by 9%. Sales from wire North America rose by 2%. The markets for wire Latin America and wire Asia were strong and sales rose by nearly 20% and more than 80%, respectively. Sales of building products were up by more than 20%. Sales of steel cord China also increased by more than 20%, while sales of the activity platform steel cord others rose by 15% due to continuing high demand for steel cord products for tire reinforcement.

Combined sales of fencing systems Europe rose by 8%. This increase stems from a good seasonal start and can also be partly attributed to orders being placed early because of announced price increases in the market. Sales of the Bekaert Handling joint venture dropped by more than 20%, compared to an exceptionally good first quarter in 2003.

Combined sales in advanced materials and advanced coatings rose by 1% and 7%, respectively.

In advanced materials, combined sales of fibre technologies and combustion technologies were up by 13% and 20%, respectively. Composites experienced a decrease in sales of 38% due to the exit from composite profiles.

In advanced coatings, sales in industrial coatings increased by 12%. Sales in specialised films are mostly achieved in North America and are therefore very heavily influenced by the strong position of the euro in relation to the dollar, so that despite improved activities, the sales increase was limited to 4%. 

Sales by area

 

Combined sales

 

in € millions

share

Δ 2003

European Union[3]

Central and Eastern Europe

North America

Latin America

Asia

Rest of World

         263

          58

         143

         194

          55

          12

          36%

           8%

          20%

          27%

           8%

           1%

          +4%

        +87%

          -1%

        +20%

        +11%

        +27%

Total

         725

        100%

        +12%

Geographically, the increase in combined sales can be explained by the continued growth of activities in Central and Eastern Europe, Latin America and Asia. Combined sales in North America almost remained stable as improved activity was offset by the impact of the weakness of the dollar against the euro.

Outlook

The sales increase in the first quarter and the increased order book have given a good start to the year. Despite some caution due to the uncertain evolution of the position of the dollar compared to the euro and due to the early placement of orders in anticipation of expected further price increases, the outlook is favourable.

 

Financial calendar

Dividend payable (coupon nr. 5)                                     19  May           2004

Second-quarter and 2004 interim results                          2  August       2004

Third-quarter trading update                                            8  November   2004

Analyst Day                                                                17  December  2004

Fourth-quarter trading update and provisional results       21  February    2005

Announcement of 2004 results                                      17  March        2005

 



[1] Combined sales are the sales realised by the consolidated companies, joint ventures and associated
companies.

[2] All comparisons are with the first quarter of 2003.

[3] Status as of 31 March 2004.

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