Bekaert: 2020 first half-year results


Press release

Summary & download

Bekaert counters significant impact of Covid-19 through effective mitigating measures and performance improvements

Safe working conditions • strong cash flow and liquidity • solid uEBIT margin in depressed markets

The turnaround of Steel Wire Solutions and Bridon-Bekaert Ropes Group and the effectiveness of implemented measures moderate the impact of Covid-19 on the Rubber Reinforcement business.

Financial highlights H1 2020

• Consolidated sales of € 1 770 million (-20%) and combined sales of € 2 065 million (-21% down vs H1 2019)
• Underlying EBIT of € 92 million, delivering a solid margin on sales of 5.2%, compared to 5.7% in H1 2019
• Underlying EBITDA of € 194 million, generating a higher margin on sales (11.0%) than in H1 last year (10.8%)
• Working capital reduction of € -236 million compared to H1 last year, despite reduced factoring utilization
• Positive cash flow generation: cash flows from operating activities amounted to € 111 million (vs € 134 million)
• Very strong liquidity: € 834 million cash on hand, doubling 30 June 2019 levels
• Net debt of € 955 million, approximately € -300 million down from € 1 253 million as at 30 June 2019, and a further decrease (€ -22 million) from the close of 2019. This resulted in a net debt on underlying EBITDA of 2.5, down from 2.6 on 30 June last year.

Market developments and priorities

Market developments in the first half of 2020

Demand from tire and automotive markets was significantly impacted by the Covid-19 pandemic, first in China and quickly followed in the rest of the world. Global tire demand on average reduced by -40% in the second quarter but showed some signs of demand recovery at the end of the period.

Construction activity was in most parts of the world constrained by the lockdowns of the second quarter, except in China, where stimulus programs started to boost infrastructure investment.

Demand from agriculture, utility, and mining markets remained solid across the first half of 2020 as these sectors – generally considered as ‘essential industries’ – appeared to be less affected by the Covid-19 pandemic.

Bekaert’s priorities in the first half of 2020

Health and Safety of our employees: we proactively implemented actions to promote smart working in all areas of the business and enforced rigorous discipline in protective measures. The safety of our team members and their families was the key priority.

Customer centricity: we have continued to serve our customers throughout the first half of 2020, ensuring that their businesses did not suffer from any supply disruptions. We stayed in close contact with our customers in order to understand their current and future needs and supported them in every possible way.

Managing liquidity and cost to mitigate the impact of the pandemic on our business. We kept strict control on working capital, capital expenditure and debt and we implemented measures to flex our fixed costs and lower the cost structure.

Focus and effectiveness of our actions

• We coordinated and enforced strict measures around the globe to prevent the infection risks in our sites and create awareness in and beyond the workplace. We have, however, been confronted with a number of covid-19 infections among our workforce during the 2nd quarter, particularly in Latin America.

Business Unit performance:
     • The business units Steel Wire Solutions and Bridon-Bekaert Ropes Group accelerated the implementation of profit restoration measures and succeeded in substantially improving their business-mix, driving a solid turnaround in profitability and cash generation.
     • The business unit Specialty Businesses further enhanced its strong margin level through stringent cost control and an improved product-mix in building products.
     • The business unit Rubber Reinforcement implemented extensive measures to partially mitigate the inevitable margin impact from a -43% sales collapse in the second quarter, resulting from the crisis in the tire & automotive industry.

Working capital has been kept under tight control with significantly lower inventory levels, improved payment terms, and successful cash collection actions. Total working capital was € 720 million on 30 June 2020, down € -236 million from the same period last year, despite a reduction in factoring usage of € -32 million.

Capital expenditure was limited to the necessary projects and amounted to € 37 million (PP&E) versus € 48 million in the first half of last year.

The actions implemented during the last 12 months demonstrated their effectiveness in strengthening Bekaert’s resilience. Despite a substantially reduced demand (-30% sales decline in the second quarter and -20% over the first half) we achieved a solid underlying EBIT margin on sales of 5.2% versus 5.7% in the first half of last year.

Profit restoration actions have significantly strengthened the profitability of Steel Wire Solutions and Bridon-Bekaert Ropes Group. Their robust performance improvement partially offset the severe impact of the crisis on the Rubber Reinforcement business.


The Covid pandemic impacted the business significantly in the first half. At present, all Bekaert’s production plants globally are operational, either fully or partially.

We project a gradual recovery in tire markets in the remainder of the year. Demand evolutions in other markets are more difficult to project in the current economic environment.

We will continue to implement mitigating actions and other improvement measures and we expect continued impact from the progress made in strengthening our resilience.

The current evolutions and potential second wave risk of the Covid-19 pandemic continue to create a high level of uncertainty. In this context, we have limited visibility on the full-year impact in our markets and our business.