H1 19: fine, but the outlook is rather soft
H1 19 results show a decent level of growth with improved margins Rubber Reinforcement and BBRG have done quite well, while Steel Wire and Speciality Businesses weighed The outlook, albeit vague, suggests a slowdown in H2 We will fine-tune our numbers, with no big change to be expected though
26 Jul 19
Solid organic growth in Q3 led by pricing
In a short trading update, Bekaert reported first nine months consolidated sales of €3,227m, up +5%, while organic growth was +10%, led by volumes (+3%) but mainly price increases and a favourable mix (+7%). In Q3, volume growth moderated to +1.4% yoy as strong demand from the automotive and construction markets were partly offset by weaker industrial steel wire markets, reflecting the impact of rising trade tensions in the global economy. The aggregate effect of passed-on wire rod price increases and price-mix added +9.2% to organic sales growth for the third quarter. Currency movements (-0.6%) and divestment effects (-0.5%) were limited. The company expects continued good demand from the automotive and construction markets in Q4 18, while the H2 18 EBIT is expected to be above that in H1 18. The net debt position should also be reduced by year-end.
16 Nov 18
Profit warning harms the company's margin expansion story
Bekaert issued a profit warning on its FY18 profit margin which is likely to be substantially lower than expected (20% below market consensus) while the FY18 EBIT should be lower than last year’s. The company cited many reasons including pricing pressure, the slow recovery of Bridon and changes to trade policies. The warning is disturbing and leadd to a lack of visibility.
20 Jul 18
Margins expected to bottom out in 2018
FY17 results in line with the company’s earlier guidance. The good new is the company was able to pass on wire rod price inreases in Q4 17 without affecting volumes. Bekaert also announced the launch of a new abrasive sawing wire which should start delivering a positive contribution in H2 18. Bridon is expected to turn around progressively thanks to efficiency actions and a better O&G market. The company aims to improve its profitability progressively during 2018 to achieve the same level as in 2017.
06 Mar 18
Higher volumes not enough to boost margins
Bekaert reported Q3 17 revenues which were overall in line with expectations, while other figures pointed to disappointing cash flow generation. Bekaert achieved consolidated sales of €3,073m in the first nine months of 2017, up more than 11% from the same period last year. In Q3 17, Bekaert reported revenue of €977m, +4% yoy driven by Europe (+13%) due to the strong automotive sector, North America (+6%) and Asia (+7%). Bekaert forecasts that it will broadly repeat the underlying EBIT performance of FY2016. Net debt was €1,205m at the end of Q3 17, up €126m yoy due to higher WCR variation and investments.
15 Nov 17
No drama in Q2, but the lack of upward revision is disappointing
Bekaert reported its H117 results The company achieved a 15% increase in consolidated revenue, reaching €2095m in H117. The growth stemmed from strong organic sales (+6.5%), M&A (+6.5%) reflecting the incremental impact of the Bridon integration within the Bridon-Bekaert Ropes Group, and favorable currency movements (+2%). Underlying EBIT increased 12% to €176 million at a margin of 8.4% (versus 8.6%) but above the 2016 level of €157m. Net debt was €1230m. Net debt on underlying EBITDA was 2.2x, unchanged from the same period last year and slightly up from 2.1 at year-end 2016 The FY17 guidance is confirmed as “repeat in 2017 the underlying absolute EBIT of 2016 (€305m)”
28 Jul 17
Strong start to the year, driven by the Automotive market
Bekaert reported strong growth of 20% yoy in Q1 17, as revenue reached €1,061m. The organic growth reached 10%, while the reported growth also benefited from a 3% positive currency impact and a +6.5% growth from M&A. In comparison with last year, most currencies’ exchange rates increased versus the euro, leading to a total favourable currency effect of +3% in Q1 17. The incremental impact of the Bridon integration within the Bridon-Bekaert Ropes division drove consolidated sales up by +6.5%. The organic volume growth exceeded 6% yoy, driven by automotive, industrial steel wire and the construction markets. Bekaert expects it will broadly repeat in 2017 the strong underlying EBIT level of 2016 and will be moving the trend towards a 10% margin over the next five years.
10 May 17
EBIT margin trending towards 10%
Bekaert reported its FY16 results which showed impressive progress in all metrics resulting from cost-cutting actions and portfolio reshaping including acquisitions and business disposals. - Consolidated revenue reached €3.7bn (up 1%). - Q4 16 sales were up 9% vs Q4 15. Mergers and acquisitions accounted for 6% and organic sales growth was 3% driven by strong volume growth in Asia Pacific. - Gross profit increased by 15% in 2016: €690m (18.6% of sales) vs €598m in 2015 (16.3% of sales). - Underlying EBIT has risen by 32% (from €231m in 2015 to €305m in 2016) reflecting a margin of 8.2% versus 6.3% (+210bp). - EBIT has reached €260m vs €219m in 2015 and the EBIT margin has increased from 6% to 7%. - The ROCE is at 11.8% compared with 9.1% in 2015. - Net debt is €1068m including the €279m acquisition impact of the Bridon merger deal. - EPS is €1.87 vs €1.82 in 2015.
02 Mar 17
A mixed bag in Q3, as the solar market weighed
The 9M revenues reached €2,759m (-1% yoy) as organic volume growth of 4.5% was more than offset by the lower wire rod prices (-3.2%), while the effect of mergers, acquisitions and disvestments was +1.6%. The company expects continuing strong demand from the automotive and construction markets in Q4 16 and anticipates a moderate pick-up in demand from solar markets after the Q3 decline. A reduction in feed-in tariffs is expected in China in April 2017 and demand is projected to strengthen ahead of this change. The oil and gas markets will remain weak. Bekaert believes its transformational excellence programmes will continue to underpin its move towards a sustainable higher level performance and has revised its previous target range (between 7% and 8% REBIT) for full-year 2016 and now expects to achieve between a 7.5% and 8% REBIT margin on sales.
18 Nov 16
Strong H1 margins lead to a rise in FY16 guidance
Bekaert reported robust H1 16 results. Main facts: H1 16 revenue reached €1.82bn (-4% yoy), strong currency impact of €-63m (3% of revenue). Recurring EBIT margin of 8.6% (€157m) to be compared with 5.9% in H1 15. Net income was impacted by “other financial income and expenses” of €-53.2m (versus €-13.9m) and reflected the increase in the fair value of the conversion option of the previous convertible bond (€-42.7m) in line with the evolution of the share price. The EPS was, consequently, €0.58 versus €0.93 in H1 15. Net debt was €1,151m (versus €1,023m in H1 15)including the €298m acquisition impact of the Bridon merger deal. Net debt/EBITDA was 2.4x, unchanged from the same period last year and up from 1.9x at year-end 2015. Excluding the Bridon impact, net debt/EBITDA was 1.8x, slightly down from year-end 2015. The company expects it will end the year ahead of the target goal of 7% recurring EBIT, achieving between 7% and 8% REBIT for full-year 2016.
29 Jul 16
Negative FX and prices offset Q1 16 volume growth
Bekaert reported Q1 16 revenue showing mixed figures. The company also looks more cautious for the second half of the year. Bekaert achieved consolidated sales of €884m in Q1 16, a 2% yoy decrease. The solid organic volume growth (+5.5%) was fully offset by significantly lower wire rod prices (-6%) which were passed on to customers. At the same time, mix improvements (+3%) were more than offset by continued price erosion in tyre markets (-2%). The net effect of acquisitions (+2%) and divestments (-2%) was neutral, but unfavourable currency movements – driven by LatAm and Brazil – drove consolidated sales down by 2%.
11 May 16
Strong prospects ahead despite some tailwinds
Bekaert reported strong FY15 results and 2016 guidance, both above market expectations and our forecasts. Main figures: * 2015 revenue at €3.67bn, in line with expectations, corresponding to an organic growth of 2% (+14% reported). * The 2015 adj. EBIT reached €223m vs €164m last year, corresponding to an operating margin of 6.1% above expectations. * 2015 EPS €1.83 versus market estimate of €1.65. * Dividend raised to €0.90/share as expected (vs €0.85 last year). * Net debt €832m at year-end vs est. €991m despite acquisitions (€235m net of divestiture). Bekaert forecasts a significant step in 2016 towards the goal of a 7% adj. EBIT margin, and expects to outperform the market environment as it anticipates strong demand in the automotive sector (>40% of sales) to continue, while, seeing pressure across most other industries due to global overcapacities.
26 Feb 16
Increased volumes offset by pricing pressure
Bekaert reported Q3 15 revenues of €898m, 10% higher than last year, with acquisition and FX accounting for more than 15%. The organic decline was therefore 5% due to the positive price mix and volume effects (+1%) and significantly lower wire rod prices (-6%).
13 Nov 15