2007-07-31



31 July 2007

Half year results 2007 - Bekaert posts strong results

–    Record sales in first half

   Steel cord China: +53%

–    Difficult market conditions in North America

   8.5% EBIT margin on sales before non-recurring items, compared with 7.9%
8.1% EBIT margin on sales, compared with 7.5%

–    Earnings per share: € 3.60 compared with € 3.51 (continuing operations)

Sales

In the first half of 2007, Bekaert achieved consolidated sales of € 1.1 billion and combined sales of € 1.7 billion, an increase of 6% and 3% respectively.[1] [2]

The consolidated sales’ increase was 6% from organic growth and 2% from the net movement in acquisitions and divestments. Currency movements had a negative impact of 2%.

 Consolidated and combined sales by business segment

1 H 07

Consolidated sales

 

Combined sales

 

in millions of €

variance

 

in millions of €

variance

Advanced wire products

897

+5%

 

1 508

+4%

Advanced materials

101

+15%

 

101

+15%

Advanced coatings

64

-6%

 

64

-6%

Intersegment sales and others

3

 

-2

Total

1 065

+6%

 

1 671

+3%

                     

 

Consolidated and combined sales by geographical area

1 H 07

Consolidated sales

 

Combined sales

 

in millions of €

variance

 

in millions of €

variance

Europe

536

+12%

 

541

+7%

North America

273

-18%

 

292

-17%

Latin America

18

+17%

 

587

+4%

Asia

217

+32%

 

223

+29%

Other regions

21

+25%

 

28

+9%

Total

1 065

+6%

 

1 671

+3%

 

Advanced wire products

Key figures (in millions of €)

1 H 07

1 H 06

Consolidated sales

897

852

Operating result (EBIT) before non-recurring items

108

94

Operating result (EBIT)

105

92

Depreciation and amortization

50

48

EBITDA

155

140

EBIT margin on sales

11.7%

10.8%

EBITDA margin on sales

17.2%

16.4%

Combined sales

1 508

1 445

Share in result of  the joint ventures

23

28

 

Combined sales growth by activity platform

Wire Europe

Wire North America

Wire Latin America

Wire Asia

+15%

   -7%

  +4%

+18%

Building products

Steel cord China

Steel cord others

Other advanced wire products

+13%

+53%

   -9%

   -2%

                

In the first half of 2007 combined sales of advanced wire products were 4% higher. 

The prices of wire rod, Bekaert’s most important raw material, remained generally high, driven by the strong global demand for steel. At the same time, Bekaert faced sustained price pressure for most of its advanced wire products. The company continues its efforts to constantly improve process and production efficiency. 

In China, where car and truck tire production again saw rapid growth, Bekaert significantly reinforced its leadership position. In the first half of 2007, the company invested another € 50 million in expanding its production capacity and extending its product portfolio. Bekaert recorded a 53% sales growth in its steel cord China activity platform.

Bekaert maintained its position in Europe, but sales of steel cord products in North America were lower.

The effect of a higher level of activity in Latin America was offset by the impact of currency movements and increased price pressure. In Chile in particular, the company faced an increase in Asian imports.

Demand for Bekaert wire products for the automotive, construction and agricultural markets weakened in North America, while the company recorded sustained demand in Europe. Bekaert strengthened its position in wires for offshore applications with the acquisition of Cold Drawn Products Limited, a supplier of specialized profile wires in Western Europe.

Benefiting from the mild winter and spring, Bekaert maintained a strong performance for building products in Europe and Asia.


Advanced materials 

Key figures (in millions of €)

1 H 07

1 H 064

Sales

101

87

Operating result (EBIT) before non-recurring items

10

6

Operating result (EBIT)

10

6

Depreciation and amortization

4

5

EBITDA

14

11

EBIT margin on sales

9.7%

7.0%

EBITDA margin on sales

13.5%

12.2%

 

 

Combined sales growth by activity platform

Stainless

Fiber technologies

  +54%

  +13%

Combustion technologies

Composites

+14%

 -19%

     

In the first half of 2007 sales of advanced materials recorded growth of 15%.

The stainless activities were substantially affected by the unprecedented rise in the prices of nickel-based wire rod in the first half of the year. In fiber technologies, Bekaert posted a strong sales growth, helped by a substantial single order in industrial process filtration.

Bekaert continued to advance its position in combustion technologies with its environment-friendly burners for domestic heating systems. The acquisition in 2006 of Aluheat B.V. in the Netherlands, which specializes in the latest technologies for condensing boilers also contributed to this growth. Less projects were registered for industrial burner systems.

In composites, Bekaert remains confronted with an extremely competitive market environment.

4 Following the internal repositioning of its advanced materials’ activities, Bekaert is reporting on its activities in stainless as a
  separate activity platform within the advanced materials business segment as from 1 January 2007. Previously, stainless was
  part of wire Europe. The figures for 2006 have been restated accordingly.


Advanced coatings 

Key figures (in millions of €)

1 H 07

1 H 06

Sales

64

68

Operating result (EBIT) before non-recurring items

-1

2

Operating result (EBIT)

-1

1

Depreciation and amortization

5

6

EBITDA

4

7

EBIT margin on sales

-1.1%

2.1%

EBITDA margin on sales

6.9%

11.0%

 

Combined sales growth by activity platform

Industrial coatings

   +3%

Specialized films

-11%

 

In the first half of 2007 sales of advanced coatings were down by 6%.

Sales in industrial coatings were higher for both sputtered products and diamond-like coatings. The weak construction and automotive sectors in North America adversely impacted sales in specialized films. Additionally currency movements had a negative impact. Due to sustained sales efforts, the company generated a sales growth in Europe and Asia. 

 

Other activities

As well as further optimizing its sales organizations, Bekaert also continued to invest heavily in research and development. The company is also further developing its technology center in Jiangyin (Jiangsu province, China) into a state-of-the-art, customer-focused research facility, in support of its growing Asian business.  

The engineering department, which is a major supplier of machinery for the company’s investment programs, maintained a high level of activity. 

The divestment in 2006 of the 50% share in the handling business, had an impact of -2% on the combined sales of the company.

Profitability

Bekaert posted an operating result (EBIT) before non-recurring items of € 90 million, compared with € 80 million. EBIT margin on sales before non-recurring items was 8.5%, compared with 7.9%. Including non-recurring items of € 4 million, the operating result (EBIT) totaled € 87 million, compared with € 76 million. EBIT margin on sales was 8.1%, compared with 7.5%. 

Income taxes were € 15 million, compared with € 16 million. 

The share in the result of the joint ventures and associates amounted to € 23 million, compared with € 28 million. 

The result for the period was € 78 million, compared with € 76 million. Taking into account the result attributable to minority interests (€ 6 million compared with € 1 million), the result for the period attributable to the Group totaled € 73 million, compared with € 76 million.

 

Balance sheet

At 30 June 2007, equity represented 46% of total assets. Net debt amounted to € 493 million and the gearing ratio (net debt to equity) was 47%.

 

Cash flow

EBITDA increased to € 145 million, compared with € 132 million. Cash flow attributable to the Group (continuing operations) amounted to € 131 million, compared with € 132 million. 

Cash from operating activities amounted to € 76 million. Depreciation and amortization was € 58 million. Operating working capital increased to € 504 million.

Investments in respect of the consolidated companies represented a cash outflow of € 48 million. Purchase of property, plant and equipment totaled € 73 million, mainly due to the expansion of production capacity in China, while received dividends amounted to € 27 million. 

To further optimize the company’s balance structure, Bekaert purchased 1 110 660 shares, of which 546 779 were cancelled in the first half of 2007.

On 4 July 2007, Bekaert cancelled the remaining 563 881 shares. Together with the issue of
40 507 new shares, following the exercise of subscription rights, the number of outstanding shares of the company totals 19 876 626.

 

NV Bekaert SA (statutory accounts)

Sales amounted to € 315 million, compared with € 301 million. The result for the period was € 72 million, equal to the same period in 2006.

 

Outlook

Worldwide Bekaert expects raw material prices to stay high, yet with some regional variances. 

In North America, market conditions remain challenging, notably in the automotive, construction and agricultural sectors. In Latin America, the company will continue its efforts in order to maintain its leadership positions.

Bekaert will further sustain its investment programs, mainly in Asia and will remain focused on worldwide operational excellence and innovation for maximum support of the company’s growth.

 

Financial calendar

Third quarter trading update 2007                                                           9      November      2007

Fourth quarter trading update 2007                                                       15      February        2008

2007 results                                                                                               14     March           2008

2007 annual report available on the Internet                                           24     April              2008

First quarter trading update 2008                                                            14      May              2008

General Meeting of Shareholders                                                            14      May              2008

Dividend payable (coupon nr. 9)                                                              21      May              2008

2008 half year results                                                                                  1      August          2008

 

These unaudited consolidated interim financial statements have been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union.  The consolidated interim financial statements have been prepared using the same accounting policies and methods of computation as in the 31 December 2006 annual consolidated financial statements. 

This interim financial report is in compliance with the requirements issued by the CBFA and by Euronext.

 

Annex 1: Press release 31 July 2007

Consolidated income statement

 

(in thousands of €)

1 H 07

1 H 06

 

 

 

CONTINUING OPERATIONS

 

 

Sales

Cost of sales

Gross profit

1 065 105

-851 093

214 012

1 009 398

-811 151

198 247

 

 

 

Selling expenses

Administrative expenses

Research and development expenses

Other operating revenues

Other operating expenses

Operating result (EBIT) before non-recurring items 

-48 858

-47 255

-30 562

8 409

-5 422

90 324

-50 428

-49 354

-25 521

12 355

-5 325

79 974

Non-recurring items

Operating result (EBIT)

-3 777

86 547

-4 000

75 974

 

 

 

Interest income
Interest expense

Other financial income and expenses

Result from continuing operations before taxes

891

-17 633

80

69 885

2 147

-15 710

1 324

63 735

 

 

 

Income taxes

Result from continuing operations (consolidated companies)

-14 864

55 021

-15 537

48 198

 

 

 

Share in the results of joint ventures and associates

Result from continuing operations

23 401

78 422

27 820

76 018

 

 

 

DISCONTINUED OPERATIONS

 

 

Result from discontinued operations

-

-

 

 

 

RESULT FOR THE PERIOD

78 422

76 018

Attributable to :

-          the Group

-          minority interests

 

72 640

5 782

 

75 511

507

 

 

Annex 2 : Press release 31 July 2007

Consolidated balance sheet

(in thousands of €)

30 June 2007

31 Dec. 2006

Non-current assets

1 300 969

1 302 581

Intangible assets

Goodwill

Property, plant and equipment

Investments accounted for using the equity method

Other non-current assets

Deferred tax assets

56 391

75 848

841 701

246 633

63 425

16 971

57 510

76 965

824 158

237 747

90 591

15 610

Current assets

1 009 465

914 269

Inventories

Trade receivables

Other receivables

Short-term deposits

Cash and cash equivalents

Other current assets

Assets classified as held for sale

422 743

424 371

50 355

10 516

71 846

27 989

1 645

368 764

398 928

53 814

29 019

52 139

9 918

1 687

TOTAL ASSETS

2 310 434

2 216 850

 

 

 

Equity

1 056 893

1 121 347

Share capital

Share premium

Hedging and revaluation reserves

Retained earnings

Cumulative translation adjustments

Equity attributable to the Group

Minority interests

173 300

11 032

4 097

919 095

-96 171

1 011 353

45 540

173 300

11 032

-1 553

1 000 473

-110 755

1 072 497

48 850

Non-current liabilities

538 691

501 006

Employee benefit obligations

Provisions

Interest-bearing debt

Other non-current liabilities

Deferred tax liabilities

134 895

25 667

317 177

4 099

56 853

135 589

26 664

274 373

3 845

60 535

Current liabilities

714 850

594 497

Interest-bearing debt

Trade payables

Employee benefit obligations

Provisions

Income taxes payable

Other current liabilities

Liabilities associated with assets classified as held for sale

295 870

251 847

83 213

11 926

21 891

50 103

-

217 952

227 827

76 042

13 379

16 270

43 027

-

TOTAL EQUITY AND LIABILITIES

2 310 434

2 216 850


 

 

Annex 3 : Press release 31 July 2007

Consolidated statement of changes in equity

(in thousands of €)

1 H 07

1 H 06

Opening balance

Result for the period as reported

Result recognized directly in equity

Creation of new shares

Acquisitions of own shares

Dividends to shareholders of NV Bekaert SA

Dividends to minority interests

Other

Closing balance

1 121 347

78 422

22 774

-

-106 953

-49 590

-5 124

-3 983

1 056 893

1 130 278

76 018

-28 961

-

-

-64 591

-7 613

2 402

1 107 533


 

Annex 4 : Press release 31 July 2007

Consolidated cash flow statement  

(in thousands of €)

1 H 07

1 H 06

Operating result (EBIT)

Non-cash and investing items included in operating result

Income taxes paid

86 547

53 870

-8 323

75 974

52 481

-9 683

Gross cash from operating activities

132 094

118 772

Change in operating working capital

Other operating cash flows

-52 103

-3 958

-61 681

6 158

Cash from operating activities

76 033

63 249

New portfolio investments

Proceeds from disposals of investments

Dividends received from joint ventures, associates and other minority investments

Purchase of intangible assets

Purchase of property, plant and equipment

Other investing cash flows

-2 539

4 284

 

27 003

-4 109

-73 492

602

-22 547

-46

 

13 232

-5 779

-67 761

2 076

Cash from investing activities

-48 251

-80 825

Interest received

Interest paid

Gross dividend paid

Other financing cash flows

891

-18 176

-43 589

52 930

2 147

-15 137

-55 205

34 841

Cash from financing activities

-7 944

-33 354

Net increase or decrease (-) in cash and cash equivalents

19 838

-50 930

Cash and cash equivalents at the beginning of the period

52 139

132 248

Effect of exchange rate fluctuations

-131

-1 648

Cash and cash equivalents at the end of the period

71 846

79 670


Annex 5 : Press release 31 July 2007

Additional key figures

(in € per share)

1 H 07

1 H 06

Number of existing shares at 30 June

Book value

Share price at 30 June

Weighted average number of shares

Basic

Diluted

Result for the period attributable to the Group

Continuing and discontinued operations

Basic

Diluted

Continuing operations only

Basic

Diluted

Cash flow attributable to the Group

Continuing operations only

Basic

Diluted

20 400 000

51.81

108.85

 

20 202 311

20 346 526

 

 

3.60

3.57

 

3.60

3.57

 

 

6.48

6.44

21 530 195

51.44

75.10

 

21 530 195

21 653 925

 

 

3.51

3.49

 

3.51

3.49

 

 

6.13

6.09

 

(in thousands of €)                                                                             

Cash flow attributable to the Group (continuing operations)

EBITDA

Depreciation and amortization

Capital employed

Operating working capital

Net debt

EBIT on sales before non-recurring items

EBIT on sales

EBITDA on sales

Equity on total assets

Gearing (net debt on equity)

Average working capital on sales

130 983

144 890

58 343

1 479 493

503 908

492 980

8.5%

8.1%

13.6%

45.7%

46.6%

22.4%

131 965

132 428

56 454

1 413 755

480 929

345 147

7.9%

7.5%

13.1%

49.6%

31.2%

22.6%

 

NV Bekaert SA – Statutory Profit and Loss Statement (in thousands of €)

Sales

Operating result

Financial result

Profit from ordinary activities

Extraordinary results

Profit before income taxes

Income taxes

Result for the period

314 583

26 994

46 760

73 754

190

73 944

-2 012

71 932

300 613

17 472

52 261

69 733

1 072

70 805

724

71 529

 



[1] Combined sales are sales generated by consolidated companies plus 100% of sales of joint ventures and associates after

   intercompany elimination.

[2] All comparisons are made relative to the figures of the first half of 2006.

[3] Excluding ‘intersegment sales and others’.

We use cookies in order to let you fully experience this website. Cookies are small files we put in your browser to mainly track usage or remember your settings of our site but they don’t tell us who you are. Want to know more about how we use these Cookies please read our Cookie policy.
Close