2007-02-16



16 February 2007

Fourth quarter trading update 2006 - Bekaert achieves 5% sales growth in 2006

 

 

In the financial year 2006, Bekaert achieved consolidated sales of € 2.0 billion and combined sales of € 3.2 billion, an increase of 5% and 4% respectively. [1] [2]

The consolidated sales’ increase was 1% from organic growth and 4% from the net movement in acquisitions and divestments .

Consolidated and combined sales by business segment

 2006

Consolidated sales

 

Combined sales

 

in millions of €

variance

 

in millions of €

variance

Advanced wire products

1 724

+5%

 

2 890

+5%

Advanced materials

156

+11%

 

156

+11%

Advanced coatings

136

+3%

 

136

+3%

Intersegment sales and others

-6

 

13

Total

2 010

+5%

 

3 195

+4%

 

 

Combined sales by activity platform

Advanced wire products

+5%

 

Advanced materials

+11%

Wire Europe

+8%

 

Fiber technologies

+15%

Wire North America

-6%

 

Combustion technologies

+9%

Wire Latin America

+7%

 

Composites

+4%

Wire Asia

+7%

 

 

 

Building products

+11%

 

Advanced coatings

+3%

Steel cord China

+54%

 

Industrial coatings

+1%

Steel cord others

-6%

 

Specialized films

+4%

Other advanced wire products

+6%

 

 

 

                                             

Combined sales of advanced wire products were 5% higher in 2006.

In China, where the market recorded strong and uninterrupted growth last year, sales of steel cord products, mainly for truck tire reinforcement, were up 54%. Supported by its substantial investment program, Bekaert was able to advance its market position in China significantly despite the heightened competition. In Europe, the company recorded a lower demand for steel cord products. In North America, Bekaert acquired Delta Wire, a major supplier of bead wire for tire reinforcement in Clarksdale (Mississippi). The strike at Goodyear in the United States in the fourth quarter had a significant impact on sales. Already facing a steady decline in demand for steel cord products on the North American market, Bekaert decided to close the manufacturing facility in Dyersburg (Tennessee).

Bekaert recorded a lower demand in other advanced wire products for the automotive sector in the mature markets. With the acquisition of Cold Drawn Products Ltd., a supplier of specialized profile wires in Western Europe, the company strengthened its position in wire products for offshore applications. The company further expanded its activities in Central Europe, thus consolidating its competitive position. In North America, Bekaert noted a distinct weakening of some industry sectors in which the company operates.

Despite the higher level of activity in Latin America, the company faced increasing competition from Asian imports and hence sustained pressure on prices. Sales benefited from a positive impact of currency movements, most notably in Brazil and Chile.

Helped by the mild winter, Bekaert maintained high sales of building products during 2006 in Europe and Asia. Sales of other advanced wire products were higher, partly due to the acquisition of ECC Card Clothing in 2005.

Sales of advanced materials were 11% higher in 2006. Bekaert achieved vigorous organic growth in fiber technologies while sales also benefited from the acquisition in June 2005 of Southwest Screens & Filters SA, which serves the industrial process filtration market. In combustion technologies, project business for industrial burner systems had a difficult year, but Bekaert advanced its position in environment-friendly burners for domestic heating systems and the recent acquisition of Aluheat, which specializes in cutting-edge technologies for condensing boilers, also contributed to this growth. In composites, Bekaert maintained its position in an extremely competitive environment.

Sales of advanced coatings were 3% higher in 2006. After two difficult quarters, industrial coatings picked up in the second half of the year. Bekaert achieved sustained growth in specialized films, mostly in North America and Asia.   

Outlook

Bekaert will continue in 2007 to strive for sustainable profitable growth in its various business segments and regions. The company will respond proactively to the rising demand from the growth markets and intends to further strengthen its position, most significantly in the BRIC countries.

Financial calendar

2006 results                                                                                       16      March             2007

2006 annual report available on the 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

2007 half year results                                                                          31      July               2007

Third quarter trading update 2007                                                      9      November    2007

Fourth quarter trading update 2007                                                 15      February       2008

2007 results                                                                                        14      March            2008

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