2005-08-01



2 August 2004

Half year results 2004 - Strong performance in first half year

 

Ø          Strong sales growth in all regions

Ø          Structural improvement in operational performances

Ø          Major efforts to manage the volatility of raw materials markets 

Ø         Result from operations of €103 million, compared to €68 million

Ø          Net result of €79 million, compared with €44 million

In the first half of 2004, Bekaert achieved significant volume increases in most of its activities. In a generally improved economic context, the company reinforced its leadership position in many of its markets.

Bekaert continued to streamline its product portfolio and intensified attention to specific customer needs. The company succeeded in supplying almost all of its customers without interruption, despite the difficulties around the world concerning the supply of wire rod, Bekaert’s most important raw material. Price increases for raw materials were by necessity reflected in sales prices and also had an effect on the result through the revaluation of stocks. 

In addition to continued attention on quality and cost management, Bekaert increased its Research and Development efforts substantially.

Sales

In the first half of 2004, Bekaert realised combined sales of €1.5 billion and consolidated sales of €1.1 billion, an increase of 13% and 18% respectively.

All business segments contributed to Bekaert’s sustainable profitable growth. The consolidated sales’ increase was 19% from organic growth and 4% from the net movement in acquisitions and divestments, while adverse currency movements amounted to 5%. 

Consolidated and combined sales by business segment 

 

Consolidated sales

Combined sales

 

in millions of €

variance

in millions of €

variance

Advanced wire products

751

+20.6%

1 169

+16.2%

Fencing systems Europe

248

+14.1%

282

+8.5%

Advanced materials

54

+3.8%

54

+3.8%

Advanced coatings

67

+24.2%

67

+15.8%

Others/intersegment

-24

 

-27

 

Total

1 096

+17.5%

1 545

+13.4%

 

Consolidated and combined sales by geographical area

 

Consolidated sales

Combined sales

 

in millions of €

variance

in millions of €

variance

Europe

654

+16.8%

692

+13.1%

North America

296

+20.7%

311

+8.4%

Latin America

14

+14.1%

400

+18.1%

Asia

114

+11.5%

116

+12.1%

Rest of the world

18

+39.2%

26

+20.9%

Total

1 096

+17.5%

1 545

+13.4%


Advanced wire products

Key figures (in millions of €)

1 H 04

1 H 03

 

 

 

 

Consolidated sales

751

623

 

EBIT (result from operations)

94

72

 

EBIT margin on sales

12.5%

11.5%

 

EBITDA (operational cash flow)

133

112

 

Combined sales of advanced wire products increased by 16% (wire Europe: +13%, wire North America: +16%, wire Latin America: +18%, wire Asia: +96%, building products: +41%, steel cord China: +1%, steel cord others: +17%, other wire products: -4%).

The increase is partly due to a better economic environment in Europe and North America, with the exception of wires for the textile and automotive sector. The rise is also due to customers bringing forward orders in anticipation of expected further price increases. Activities in Latin America performed very well. Demand for steel cord products for tyre manufacturing was high worldwide; only growth in China proved to be slower than originally expected. However Bekaert is monitoring market developments closely and continues to pursue its investment program.  

Consolidated sales of advanced wire products were also affected by external growth with the acquisition of Bekaert Hlohovec, a.s. (Slovak Republic) and of the remaining shareholding of Contours Ltd (U.S.).

Fencing systems Europe

 

Key figures (in millions of €)

1 H 04

1 H 03

Consolidated sales

248

217

 

EBIT (result from operations)

32

17

 

EBIT margin on sales

12.7%

7.9%

 

EBITDA (operational cash flow)

40

26

 

Combined sales of fencing systems Europe rose by 9%, due to a major volume increase thanks to a strong season and the further development of project activities in the fencing business. 

An impairment of €5.6 million was recorded for the handling business, which represents circa 10% of the segment’s combined sales; this business is being closely monitored.

Advanced materials

Key figures (in millions of €)

1 H 04

1 H 03

Consolidated sales

 54

52

 

EBIT (result from operations)

4.9

4.7

 

EBIT margin on sales

9.0%

9.1%

 

EBITDA (operational cash flow)

7.6

7.2

 

Combined sales of advanced materials increased by 4%.  In fibre technologies, sales rose by 11%. In combustion technologies, Bekaert achieved an increase of 40%, principally due to the acquisition of Solaronics Technologies. Composites experienced a decrease in sales of 44%, mainly due to the exit from composite profiles at the end of 2003.

Advanced coatings

Key figures (in millions of €)

1 H 04

1 H 03

Consolidated sales

67

54

 

EBIT (result from operations)

-0.1

-1.8

 

EBIT margin on sales

-0.2%

-3.3%

 

EBITDA (operational cash flow)

7.3

5.3

 

Combined sales for advanced coatings rose by 16%. In industrial coatings sales went up by 25% due to rising demand for coatings on glass and diamond-like coatings on moulds. Sales of specialised films increased by 10%, principally in Europe and Asia thanks to reinforced sales organisations.

Consolidated sales of advanced coatings also rose as a result of the increased stake in Sorevi S.A. (France) and in Precision Surface Technology Pte Ltd (Singapore). 

The result from operations was significantly influenced in the first half by a one off expenditure of €4.1 million in R&D. 

Profitability

Bekaert achieved a consolidated result from operations (EBIT) of €103 million, an increase of 51%.  This result represents a margin of 9.4% on sales.  At constant currencies, the result from operations would have been €116 million. Non-recurring items amounted to -€4 million.
The consolidated net result of the Group amounted to €79 million. Amortization of goodwill amounted to €5 million. The share in the result of the companies accounted for under the equity method amounted to €26 million.

Balance sheet

At the end of June 2004, shareholders’ equity accounted for 40% of total assets. Net debt amounted to €418 million and the gearing ratio, defined as net debt on equity, to 48%.  Working capital amounted to €458 million or 19% on sales. 

In line with the stock option plan, 220 300 shares have been purchased in the first half of 2004 at an average share price of 46.28 euro.

Cash flow

The operational cash flow (EBITDA) reached €167 million. The cash flow amounted to €150 million, or a cash flow per share of €6.8 for the first half year. Capital expenditure for the consolidated companies was €62 million.

NV Bekaert SA (Statutory Accounts)

Sales of the company amounted to €319 million and the profit was €37 million.

Outlook

Bekaert expects that raw materials markets will remain a major challenge and may affect order intake in the second half. Despite a slow down in growth in China, the outlook for the group is favourable.  

These unaudited consolidated interim financial statements have been prepared in full conformity with the International Financial Reporting Standards (“IFRS”), formerly named International Accounting Standards (“IAS”) issued by the International Accounting Standards Board (“IASB”) and the interpretations issued by the Standing Interpretation Committee of the IASB, both of which have been approved by the European Commission. The consolidated interim financial statements have been prepared using the same accounting policies and methods of computation as in the 31 December 2003 annual financial statements. This interim financial report is in compliance with IAS 34, Interim Financial Reporting.

Financial calendar

Third quarter trading update 2005                                       14   November   2005

Fourth quarter trading update 2005                                     17   February    2006

2005 results                                                                     16   March        2006

2005 annual report available on Internet                              21    April          2006

First quarter trading update 2006                                       10    May           2006

General Meeting of Shareholders                                       10    May           2006

Dividend payable (coupon nr. 7)                                         17    May           2006

2006 half year results                                                        28   July            2006

 

 

Annex 1

Press release dd. 1 August 2005

Consolidated Income Statement

in thousands of €

1 H 05

1 H 04*

CONTINUING OPERATIONS

Sales
Cost of sales

970 584
-758 029

859 829
-658 749

Gross profit

212 555

201 080

Distribution & selling expenses
General & administrative expenses
Research & development expenses
Other revenues
Other expenses

-46 780
-49 594
-22 869
7 222
-15 267

-42 638
-51 045
-28 803
4 867
-12 275

Result from operations (EBIT)

85 267

71 186

Interest income & expenses
Non-operating income & expenses

-11 237
3 297

-7 961
422

Result from ordinary activities before taxes

77 327

63 647

Income taxes

-21 622

-18 559

Result from ordinary activities after taxes

55 705

45 088

Share in the result of joint ventures and associates

Amortisation goodwill on joint ventures and associated companies

Minority interests

27 715

-

-7 250

25 915

-1 951

-5 355

Consolidated net result of the Group from continuing operations

76 170

63 697

DISCONTINUED OPERATIONS

Consolidated net result of the Group from
discontinued operations

54 087

15 050

TOTAL CONSOLIDATED NET RESULT OF THE GROUP

130 257

78 747


Annex 2

Press release dd. 1 August 2005

Consolidated balance sheet  

in thousands of €

30 June 2005

31 Dec. 2004

 

30 June 2005

31 Dec. 2004

Non-current assets

1 233 551

1 222 943

Equity

1 060 374

958 539

Intangible assets

39 695

42 438

Share capital

171 000

171 000

Goodwill and negative goodwill

81 924

75 982

Reserves, retained earnings and others

840 107

738 708

Property, plant & equipment

772 557

791 620

Minority interests

49 267

48 831

Investments accounted for under the equity method

254 105

219 707

Non-current liabilities

537 424

463 172

Financial assets & others

85 270

93 196

Employee benefit obligations and provisions

192 190

216 440

Current assets

957 334

948 251

Financial liabilities

342 588

246 477

Inventories

361 907

419 300

Other amounts payable

2 646

255

Trade receivables

391 391

385 176

 

Current liabilities

545 363

704 212

Other receivables

31 575

36 531

Financial liabilities

225 147

314 370

Financial assets

54 513

45 457

Trade payables

179 971

250 798

Cash and cash equivalents

109 068

57 059

Other current liabilities

128 021

131 890

Deferred charges and accrued income

8 880

4 728

Accrued charges and deferred income

12 224

7 154

Non-current assets classified as held for sale

 

 

Liabilities associated with non-current assets classified as held for sale

 

 

Deferred tax assets

9 254

18 153

Deferred tax liabilities

56 978

63 424

TOTAL ASSETS

2 200 139

2 189 347

TOTAL EQUITY AND LIABILITIES

2 200 139

2 189 347



 

 

Annex 3

 Press release dd. 1 August 2005

 

 

 

Changes in shareholders’ equity
(in thousands of €)                                                                                Changes in Shareholders’ equity    (in thousands of €)
1 H 05
1 H 04
Opening balance
Consolidated net result of the Group
Result attributable to minority interest

Cumulative translation adjustments and others

Purchase of shares

Dividends to parent shareholders
Dividends to minority interests

Closing balance

958 539

130 257

7 250

49 556

 

-33 218

-43 747

-8 263

1 060 374

834 178

78 747

5 481

5 418

 

-9 958

-38 579

-6 877

868 410

Consolidated cash flow statement (in thousands of €)
Cash provided by (used in)

- operating activities

- investing activities

·    cash proceeds from         discontinued operations

·    other

- financing activities

 

37 640

12 099

87 786

 

-75 687

268

 

78 935

-68 930

-

 

-68 930

11 580

Net increase in cash and cash equivalents

50 007

21 585

 Key figures (in € per share)

Number of existing shares
Book value
Share price at 30 June
Basic figures

- weighted average number of shares
- EBITDA from continuing operations
- EBIT from continuing operations
- EPS from continuing operations
- EPS from continuing and discontinued
  operations

- Cash flow from continuing and
  discontinued operations
Diluted figures

- weighted average number of shares

- EPS from continuing operations
- EPS from continuing and discontinued
  operations

21 323 705

49.73

62.10

 

21 823 491

6.53

3.91

3.49

5.97

 

8.61

 

 

21 942 191

3.47

5.94

22 070 300
39.35
47.35

 

21 991 324
5.76
3.24
2.90
3.58

6.83


22 011 607
2.89
3.58


 

Annex 3 (continued)

 Press release dd. 1 August 2005

 

 

                                                                                          Changes in Shareholders’ equity    (in thousands of €)
1 H 05
1 H 04
Additional key figures (in thousands of €)

Cash flow from continuing and discontinued

operations

Operational cash flow (EBITDA) from continuing operations

Depreciation and amortisation

Amortisation of goodwill from continuing operations

Capital employed

Working capital

Net debt

EBIT on sales

EBITDA on sales

Gearing

Average working capital on sales

187 849

 

142 536

 

57 269

-

 

1 380 279

486 103

357 452

8.8%

14.7%

33.7%

21.8%

150 272

 

126 694*

 

52 124*

3 384*

 

1 376 494

457 754

417 512

8.3%*

14.7%*

48.1%

18.5%

NV BEKAERT SA – STATUTORY - Profit and Loss Statement (in millions of €)

Sales

Operating expenses

Operating result

Financial result

Profit from ordinary activities

Extraordinary results

Profit before income taxes

Income taxes

Profit for the year

326.8

305.9

20.9

43.6

64.5

67.4

131.9

-4.5

127.4

319.2

-300.7

18.5

20.4

38.9

2.3

41.2

-4.6

36.6

 

 



[1] The figures in this press release are unaudited.

[2]           Combined sales are sales generated by consolidated companies, joint ventures and associates.

[4] Excluding ‘intersegment sales and others’.

* Figures for 2004 were restated in accordance with IFRS accounting standards regarding reporting on continuing respectively discontinued operations (see ‘accounting & reporting policies’ on p.6 of this press release).

* Figures for 2004 were restated in accordance with IFRS accounting standards regarding reporting on continuing respectively discontinued operations (see ‘accounting & reporting policies’ on p.6 of this press release).

 

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