2005-05-11



11 May 2005

Trading update first quarter 2005 - Good start, but market conditions becoming more difficult

In the first quarter of 2005, Bekaert generated consolidated and combined sales of € 462 million (+18%) and € 733 million (+20%), respectively [1] [2] [3] .

The consolidated sales’ increase was 2% from the net movement in acquisitions and divestments and 18% from organic growth, while adverse currency movements amounted to 2%.

Consolidated and combined sales by business segment

First quarter 2005

Consolidated sales

Combined sales

 

in millions of €

variance2

in millions of €

variance2

Advanced wire products

400

+18.6%

655

+21.6%

Advanced materials

32

+26.4%

32

+26.4%

Advanced coatings

30

- 2.5%

30

- 2.5%

Intersegment sales and others

0

_

16

_

Total

462

+17.7%

733

+20.1%

 

 

Combined sales by activity platform

Advanced wire products:

+22%

Advanced materials

+26%

Wire Europe

+19%

Fibre technologies

- 6%

Wire North America

+10%

Combustion technologies

+95%

Wire Latin America

+29%

Composites

+ 5%

Wire Asia

+30%

 

 

Building products

+2%

Advanced coatings

-2%

Steel cord China

+1%

Industrial coatings

+1%

Steel cord others

+28%

Specialised films

- 5%

Other advanced wire products

+13%

 

 

 

Bekaert performed strongly in advanced wire products. Sales prices are considerably higher compared to the first quarter of last year, due to the sharp rise in raw materials’ prices which marked 2004. Sales were negatively affected by currency movements.

Combined sales grew most rapidly in Latin America and Asia, whilst the markets in North America came under increased pressure. In Europe, Bekaert is experiencing increasing competition from the ‘dollar countries’ as a result of the strong position of the euro in relation to the dollar. Sales of building products remained at the same level as in the exceptionally strong first quarter of 2004. Sales of steel cord China showed an increase compared to the strong first quarter of 2004. The measures the Chinese authorities took to combat vehicle overloading, as reported previously, only began to have a negative influence on sales from the second quarter of last year. In the other regions, Bekaert achieved a strong growth in sales of steel cord products, backed up in part by supplies from its worldwide production platform. The third steel cord plant in China was officially inaugurated in April.

Bekaert achieved robust sales growth in advanced materials, largely due to the acquisition of Solaronics in combustion technologies.

Sales in advanced coatings dropped slightly, due to currency movements. At the end of March, the remaining shares in Sorevi S.A. were acquired; the company is active in the application of diamond-like coatings in a variety of industrial applications.

 

Combined sales by geographical area

 


Combined sales

 

in millions of €

variance

Europe

262

+21.4%

North America

164

+15.6%

Latin America

241

+24.9%

Asia

56

+10.0%

Rest of the world

10

+9.5%

Total

733

+20.1%

 

Outlook

Whereas last year customers placed advanced orders in anticipation of increased raw materials’ prices, the opposite tendency is noticeable for some product lines in 2005. Due to diverse developments in raw materials’ markets, with regard to both prices and supply, and economic trends which show signs of weakening worldwide, Bekaert faces more uncertainty. The strong position of the euro in relation to the dollar is having more and more influence on the competitive landscape for Bekaert in Europe. Demand for steel cord products for reinforcing tires continues to be a growth-supporting factor worldwide.

Financial calendar

Dividend payable (coupon nr. 6)                                                18  May           2005

2005 interim results                                                                  1  August       2005

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            


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

[2] All comparisons are made relative to the first quarter of 2004. In accordance with IFRS 5 accounting standards regarding reporting on discontinued operations, comparisons are based on restated figures
for 2004 excluding the business segment fencing systems Europe, which was sold off with effect
from 1 January 2005.

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

[4] Excluding ‘intersegment sales and others’.

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