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Bekaert: Full Year Results 2017
Bekaert delivers 10% sales growth and € 301 million underlying EBIT
7.3% Underlying EBIT margin - 7.8% EBIT margin - net result up 76% - stable dividend of € 1.10 per share
Bekaert achieved more than 10% sales growth in 2017, exceeding the € 4 billion consolidated sales mark for the first time in history. Despite of the economic headwinds in Latin America, the various adverse portfolio effects and the unusual volatility in raw materials prices and currencies, we were able to reach broadly the same profit level as in 2016.
Our solid organic volume growth (+3.4%) stemmed from firm demand in global automotive markets and increased sales volumes in industrial steel wire and construction markets. Notwithstanding a delay in fully reflecting the raw materials price hikes in our selling prices, the aggregate effect of passed-on wire rod price increases and price-mix added 5.5% to the topline. The net effect of mergers, acquisitions and divestments was +2.2% while adverse currency movements accounted for -0.9%.
Bekaert achieved solid results in EMEA, further progress in margin improvement in North America, but lower margins in Latin America and Asia Pacific due to adverse mix effects (the Sumaré divestment and the sawing wire business decline respectively). The full-year integration of the Bridon activities in Bekaert's consolidated statements via Bridon-Bekaert Ropes Group tempered our profit performance. Continuously increasing wire rod prices weighed on margins in all segments, particularly in the middle part of the year.
Underlying EBIT decreased 1% to € 301 million, representing a margin on sales of 7.3%. Our underlying EBITDA totaled
€ 497 million, 3% down from last year and reflecting a margin of 12.1%. We achieved an underlying ROCE of 11.2%. Bottom-line, the net result attributable to the Group increased by 76% to € 185 million, or an EPS of € 3.26.
- Consolidated sales of € 4.1 billion (+10%) and combined sales of € 4.8 billion (+11%)
- Underlying gross profit of € 704 million (17.2% margin) compared with € 690 million (18.6% margin) in 2016
- Underlying EBIT of € 301 million (7.3% margin) compared with € 305 million (8.2% margin)
- EBIT of € 318 million (7.8% margin) compared with € 260 million (7.0% margin)
- Underlying EBITDA of € 497 million (12.1% margin) compared with € 513 million (13.8% margin)
- Underlying ROCE of 11.2% compared with 11.8%
- € 273 million capital expenditure (PP&E) versus € 159 million in 2016, in support of future growth
- Net debt of € 1 151 million. Net debt on underlying EBITDA was 2.3, higher than last year (2.1). Excluding Bridon-Bekaert Ropes Group, net debt on underlying EBITDA was 1.5
- Result for the period attributable to the Group: € 185 million, up 76% from € 105 million in 2016
- EPS: € 3.26 compared with € 1.87
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 to distribute a gross dividend of € 1.10 per share, unchanged from last year.
We continue to believe that the improvements we are making throughout our business will allow us to move towards a 10% underlying EBIT margin over the medium term.