2006-10-05



10 May 2006

Trading update first quarter 2006 - Bekaert confirms sales, despite increased competition

 

In the first quarter of 2006 Bekaert achieved consolidated sales of € 481 million and combined sales of € 795 million, an increase of 4% and 9% respectively. [1] [2] [3]

After the strong growth in 2004 and 2005 Bekaert again recorded an increase in the consolidated sales in the first quarter. While organic growth decreased by 2%, the net changes as a result of acquisitions and divestments contributed to an 2% sales increase and currency movements had a positive impact of 4%.

 

Consolidated and combined sales by business segment

First quarter 2006

Consolidated sales

 

Combined sales

 

in millions of €

variance

 

in millions of €

variance

Advanced wire products

415

+4%

 

717

+10%

Advanced materials

36

+14%

 

36

+14%

Advanced coatings

31

+5%

 

31

+5%

Intersegment sales and others

-1

-

 

11

-

                                            Total

481

+4%

 

795

+9%


 

Combined sales by activity platform

 

Advanced wire products:

+10%

 

Advanced materials

+14%

Wire Europe

-6%

 

Fibre technologies

+45%

Wire North America

+9%

 

Combustion technologies

-19%

Wire Latin America

+23%

 

Composites

+34%

Wire Asia

+7%

 

 

 

Building products

+10%

 

Advanced coatings

+5%

Steel cord China

+43%

 

Industrial coatings

-9%

Steel cord others

-4%

 

Specialized films

+17%

Other advanced wire products

+30%

 

 

 

 

Bekaert recorded a sales increase in advanced wire products, partly due to the positive impact of currency movements.

In Europe Bekaert was faced with lower demand for most of its wire products, compared to the strong first quarter of 2005, while the demand in North America, mainly for cable strands and fencing products, was higher. Bekaert performed strongly in building products, despite the very long winter in most European countries.

The acquisition of Cold Drawn Product Ltd., a supplier of specialized shaped wires for offshore applications, machinery construction and automobile industry, based in the United Kingdom, confirms the company's intention to continue to move into higher added-value products.

Sales in Latin America rose sharply, partly due to the effect of strong local currencies.

Steel cord products’ sales in Europe were lower than in the exceptionally strong first quarter of 2005. With the acquisition of Delta Wire, a major supplier of bead wire in North America, Bekaert wants to support further the growth of its market share on the North-American market. The company has also launched discussions on exclusive cooperation with the Russian company Uralkord. Bekaert saw a significant sales rise in China where a major investment program is ongoing. A start has been made on the new expansion projects in Jiangyin (Jiangsu province) and in Shenyang (Liaoning province) while additional production capacity was made available in Weihai (Shangdong province) for customer supply.

With the acquisition of ECC Card Clothing, Bekaert has also significantly increased sales in its other advanced wire products for the textile industry.

Bekaert achieved a major sales increase in advanced materials. In fiber technologies, the company completed delivery of a major order in environment-friendly gas filtration. The acquisition of Southwest Screens & Filters SA also contributed to the sales growth. Bekaert recorded a lower level of project business in combustion technologies compared to an exceptionally strong first quarter in 2005, but has already received a number of new orders for the current year. With the takeover of Shell’s interest, and the recent acquisition of the Dutch Aluheat, Bekaert intends to strengthen its position in the development of niche products with high added value.

Despite the extremely competitive environment the company realized increased sales in composites.

Bekaert recorded limited growth in advanced coatings. The company recorded a difficult start in industrial coatings, but achieved significant growth in specialized films in Europe and Asia.

Combined sales by geographical area        

First quarter 2006

Combined sales

 

in millions of €

Variance

Europe

241

-9%

North America

175

+8%

Latin America

292

+21%

Asia

75

+34%

Other regions

13

+26%

Total

795

+9%

                                                                                                                                                 

 

Outlook

Bekaert made a good start in 2006, compared to an exceptional first quarter in 2005. Since the company is experiencing growing competition around the world and facing a tendency of further increasing raw materials prices, it remains prudent in its forecasts.

 

Financial calendar

General Meeting of Shareholders                                                        10     May              2006

Dividend payable (coupon nr. 7)                                                          17     May              2006

2006 half year results                                                                             28    July               2006

Third quarter trading update 2006                                                       10     November    2006

Fourth quarter trading update 2006                                                     16     February      2007

2006 results                                                                                            16     March           2007

2006 annual report available on Internet                                              24    April              2007

First quarter trading update 2007                                                         9      May              2007

General Meeting of Shareholders                                                         9      May              2007

Dividend payable (coupon nr. 8)                                                           16    May              2007             

 



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

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

[3] All comparisons are made relative to the first quarter of 2005.

[4]   Excluding ‘intersegment sales and others’.

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