Financial statements



Financial statements Half Year Results 2017

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  • Consolidated income statement

  • Reconciliation of segment reporting


  • Consolidated statement of comprehensive income

  • Consolidated balance sheet


  • Consolidated statement of changes in equity

  • Consolidated cash flow statement

  • Additional key figures



  • Ebit Reported and Underlying

  • Additional disclosure on fair value of financial instruments

    In accordance with IFRS 13, Fair Value Measurement, the Group presents information on fair value measurement of financial assets and liabilities in its interim financial statements.

    The following tables list the different classes of financial assets and liabilities with their carrying amounts in the balance sheet and their respective fair value and analyzed by their measurement category in accordance with IAS 39, Financial Instruments: Recognition and Measurement.

    Cash and cash equivalents, short-term deposits, trade and other receivables, bills of exchange received, loans and receivables primarily have short terms to maturity; hence, their carrying amounts at the reporting date approximate the fair values. Furthermore, the Group has no exposure to collateralized debt obligations (CDOs). Trade and other payables also generally have short times to maturity and, hence, their carrying amounts also approximate their fair values. 

    The following categories and abbreviations are used in the table below:

    The fair value measurement of financial assets and financial liabilities can be characterized in one of the following ways:

    ‘Level 1’ fair value measurement: the fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices in active markets for identical assets and liabilities. This mainly relates to available-for-sale financial assets such as the investment in Shougang Concord Century Holdings Ltd.

    ‘Level 2’ fair value measurement: the fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This mainly relates to derivative financial instruments. Forward exchange contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching the maturities of the contracts. Interest-rate swaps are measured at the present value of estimated future cash flows and discounted using the applicable yield curves derived from quoted interest rates. The fair value measurement of cross-currency interest-rate swaps is based on discounted estimated cash flows using quoted forward exchange rates, quoted interest rates and applicable yield curves derived therefrom. 

    ‘Level 3’ fair value measurement: the fair values of the remaining financial assets and financial liabilities are derived from valuation techniques which include inputs that are not based on observable market data. The share conversion option in the convertible bond issued in June 2016 is a non-closely related embedded derivative that has to be separated from the host debt instrument and measured at fair value through profit or loss. The fair value of the conversion option is determined as the difference between the fair value of the convertible bond as a whole (mid – source: Bloomberg) and the fair value of the host debt contract using a valuation model based on the prevailing market interest rate for similar plain vanilla debt instruments. The main factors determining the fair value of the conversion option are the Bekaert share price (level 1), the reference swap rate (level 2), the volatility of the Bekaert share (level 3) and the credit spread (level 3). Consequently, the conversion option is classified as a level-3 financial instrument. Similarly, the fair value of the put option relating to non-controlling interests has not been based on observable market data, but on the business plan that was agreed between the partners in the business combination with Maccaferri. The fair value was established using discounted cash flows.

    The following table shows the sensitivity of the fair value calculation of the conversion option to the most significant level-3 input.

    Sensitivity analysis

    in thousands of € 

    Change   Impact on derivative liability    
    Volatility
     3.5% increase by  7 611 
      -3.5%  decrease by  -7 741 
    Credit spread  25 bps  increase by  3 507 
      -25 bps  decrease by  -3 507 


    The following table provides an analysis of financial instruments measured at fair value in the balance sheet, in accordance with the fair value measurement hierarchy described above:

  • Other disclosures

    Treasury shares 
    A total of 404 318 treasury shares were disposed of in the course of the first semester in relation to share-based incentive plans for management. A total of 52 719 treasury shares were bought back in the course of the first semester. The number of treasure shares held by NV Bekaert SA amounts to 3 533 847 at 30 June 2017. 

    Related parties
    There were no other related parties transactions or changes that could materially affect the financial position or results of the Group.

    Contingent assets and liabilities
    No material contingent assets and liabilities have been identified since the annual report 2016 was issued.

    Events after the balance sheet date
    There were no material events after the balance sheet date that need to be disclosed.


  • Financial definitions

    Added value
    Operating result (EBIT) + remuneration, social security and pension charges + depreciation, amortization, impairment of assets and negative goodwill. 
    Associates  Companies in which Bekaert has a significant influence, generally reflected by an interest of at least 20%. Associates are accounted for using the equity method. 
    Book value per share  Equity attributable to the Group divided by number of shares outstanding at balance sheet date. 
    Capital employed (CE)  Working capital + net intangible assets + net goodwill + net property, plant and equipment. The average CE is weighted by the number of periods that an entity has contributed to the consolidated result. 
    Capital ratio  Equity relative to total assets. 
    Combined figures  Sum of consolidated companies + 100% of joint ventures and associated companies after elimination of intercompany transactions (if any). Examples: sales, capital expenditure, number of employees.
    Dividend yield  Gross dividend as a percentage of the share price on 31 December. 
    EBIT  Operating result (earnings before interest and taxation). 
    EBIT - Underlying  EBIT before operating income and expenses that are related to restructuring programs, impairment losses, business combinations, business disposals, environmental provisions or other events and transactions that have a one-time effect. 
    EBIT interest coverage  Operating result divided by net interest expense. 
    EBITDA  Operating result (EBIT) + depreciation, amortization, impairment of assets and negative goodwill. 
    EBITDA – Underlying  EBITDA before operating income and expenses that are related to restructuring programs, impairment losses, business combinations, business disposals, environmental provisions or other events and transactions that have a one-time effect. 
    Equity method  Method of accounting whereby an investment (in a joint venture or an associate) is initially recognized at cost and subsequently adjusted for any changes in the investor’s share of the joint venture’s or associate’s net assets (i.e. equity). The income statement reflects the investor’s share in the net result of the investee. 
    Gearing   Net debt relative to equity. 
    Joint ventures  Companies under joint control in which Bekaert generally has an interest of approximately 50%. Joint ventures are accounted for using the equity method.
    Net capitalization  Net debt + equity. 
    Net debt  Interest-bearing debt net of current loans, non-current financial receivables and cash guarantees, short-term deposits, cash and cash equivalents.  
    Return on capital employed
    (ROCE) 
    Operating result (EBIT) relative to the weighted average capital employed. 
    Return on equity (ROE)  Result for the period relative to average equity. 
    Return on invested capital
    (ROIC) 
    NOPLAT on invested capital. NOPLAT is EBIT after tax (using a target tax rate of 27%), and includes the Group’s share in the NOPLAT of its joint ventures and associates. Invested capital is the aggregate of total equity, net debt, non-current employee benefit obligations and non-current other provisions, and includes the Group’s share in the net debt of its joint ventures and associates. 
    Subsidiaries  Companies in which Bekaert exercises control and generally has an interest of more than 50%. 
    Weighted average cost of
    capital (WACC)
    Cost of debt and cost of equity weighted with a target gearing of 50% (net debt/equity structure) after tax (using a target tax rate of 27%). Bekaert calculates a WACC for its three main currency environments: EUR, USD and CNY, the average of which (7.6%) has been rounded to 8% to set a long-term target. 
    Working capital (operating)  Inventories + trade receivables + bills of exchange received + advanced paid - trade payables - advances received - remuneration and social security payables - employment-related taxes. 

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