2009-05-13b



May 13, 2009 - Regulated information: Bekaert reports stable consolidated sales

First quarter trading update 2009

Volume drop offset by integration of Latin American entities and currency movements

Bekaert's first quarter consolidated sales were stable in comparison with the first quarter of an exceptional 2008, with strong differences between regions. Weak market demand in EMEA and North America drove an organic sales decline of 14.3%. This was fully offset by the integration of Prodac (Peru) and Ideal Alambrec (Ecuador) in Latin America, which added 6.5%, and the positive impact of currency movements, which contributed 7.7%.[1]

Combined sales[2] decreased 12.7% in comparison with the first quarter of last year. This was a result of lower market demand that was reflected in an organic decline of 15.0%, slightly tempered by favorable exchange rate differences of 2.3%.


[1] All comparisons are made relative to the first quarter sales of 2008, which have been readjusted according to the new segment reporting.
The figures in this press release are provisional and unaudited.

[2]   Combined sales are sales of consolidated companies plus 100% of sales of joint ventures and associates after intercompany elimination.

Consolidated and combined sales by segment [1]   

First quarter consolidated sales in millions of €

 

2008

2009

Variance

Share

EMEA

290.3

210.3

-28%

35%

North America

134.1

141.9

+6%

24%

Latin America

37.7

80.6

+114%

14%

Asia Pacific

130.5

159.3

+22%

27%

Total

592.6

592.1

-

100%

First quarter c

ombined sales in millions of €    

 

 

2008

2009

Variance

Share

EMEA

288.4

209.1

-28%

26%

North America

133.6

139.2

+4%

18%

Latin America

347.6

279.9

-19%

36%

Asia Pacific

133.1

160.2

+20%

20%

Total

902.7

788.4

-13%

100%

 

[1]   The new segment reporting implemented by Bekaert as from January 2009 implies segmentation by geographical market. More details can  be found on www.bekaert.com -investors-datacenter.

 

Combined sales by segment

EMEA
An overall weak market demand, reflecting both low economic activity and stock depletion, resulted in a sharp drop in sales across all activity platforms.

North America
In North America, sales grew by 4% as a result of a favorable product mix and a strong US dollar, though volumes decreased in line with slowing economic activity.

Latin America
Revenues were down 19% in Latin America due to a decline in market demand and a strong negative currency impact in Brazil, while operations in the rest of Latin America – including Bekaert's subsidiaries which are now structured within the new holding company – showed a stable activity level and sales in line with the first quarter of 2008.

Asia Pacific
The 20% sales growth in Asia Pacific reflects stable nominal sales: Asian activity picked up after the Chinese New Year and benefited from positive exchange rate differences versus a weaker euro.


First quarter market developments
Bekaert is active in many sectors. The largest markets for Bekaert's products are the automotive, construction and energy sectors. In automotive, sales are largely driven by the replacement market which is not as sensitive to economic downturns. In general, Bekaert's automotive-related sales figures showed relatively good performance in North America and Asia, while EMEA sales dropped in line with the overall economic decline in this sector. A long and cold winter, along with the impact of the crisis, affected sales in the North American and EMEA construction markets. Energy-related markets continued to perform well on a global level across many different applications, including petroleum extraction, solar energy and wind energy.


Investment update
Net debt increased to € 697 million (year-end 2008: € 627 million), mainly due to the integration of Prodac and Ideal Alambrec in the consolidation perimeter (€ 42 million), and the impact of exchange rate movements (€ 19 million).
Bekaert issued two bonds on 17 March 2009, which were fully subscribed for the total maximum amount of € 300 million at the date of the issue. The three-year and five-year bonds were each subscribed for an amount of € 150 million. The bond issue fits in with a debt-restructuring plan that aims to provide a better balance between short- and long-term debts. The payment of the bonds was received on Bekaert's account on 16 April 2009.


Outlook
Bekaert has not revised its outlook: market visibility is limited. However, Bekaert does not expect the current activity slowdown to persist on a company-wide scale.

Financial calendar

General Meeting of Shareholders                                                 13      May              2009

Dividend payable (coupon n° 10)                                                  20      May              2009

2009 half-year results                                                                      31      July              2009

Third quarter trading update 2009                                                 13      November   2009

 

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