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• The FY23 results and 2024 outlook were more encouraging than anticipated which are more proof points of its successful transformation. • At its recent CMD, Bekaert raised its 2026 growth target for top line (>5%) and EBIT margin (from >9% to >10%) underlining its confidence.• Buy reiterated. We raise our TP from EUR 58 to EUR 63, based on a 4-5% increase EBIT estimates and lower net debt. This TP is based on our 2025E SOTP with a still undemanding overall target EV/EBIT of 8x.
NV Bekaert Bekaert SA
• FY23 results were slightly better than expected, despite the already detailed guidance given in November and at its CMD in December.• Trading started well in 2024 and FY24 guidance (modest sales growth, at least stable margins) means low-single digit EBIT upgrades. • This confirms our positive stance as outline in our recent in-depth report called 'Transformation means higher valuation'. We reiterate our Buy and TP of EUR 58, based on our 2025E SOTP with target EV/EBIT of 8x.
• Report 28p: Bekaert recently raised its medium-term growth target for top line (>5%) and EBIT margin (>10%) underlining its successful transformation. • 2024 looks to become a more flattish year though due to ongoing challenging macro-economic conditions and lower raw material prices.• Buy reiterated. We raise our TP from EUR 52 p/s to EUR 58 p/s by moving our SOTP to our 2025E estimates (was 2024E), based on a still undemanding overall target EV/EBIT of 8x.
At today's CMD Bekaert updated its medium-term targets which confirms our positive stance. The new 5% sales growth target and underlying EBIT margin of >10% for 2026 are at the higher end of our expectations. In our view its successful transformation should lead to a higher valuation. We therefore reiterate our Buy rating and TP of EUR 52, based on our 2024 SOTP.
Bekaert published Q3 23 revenues which missed street forecasts as the slump in volume came in worse-than-expected. Consolidated sales declined by 8% sequentially, when consensus was expecting a c. +5% rebound. Bekaert finally issued a quantitative FY23 guidance, calling for a 7% cut to our top line expectation. Our 8.6% underlying EBIT forecast met the freshly issued FY23 target. The first comments on the FY24 perspectives lacked optimism. We expect the 7 December CMD to be focused on growth drivers and guarding profitability.
• Q3-23 revenues missed due to reversal of raw material cost inflation. • Bekaert new FY23 guidance range for REBIT misses our and consensus estimates by some 3-4%.• Although Bekaert is not immune, we stick to our view that its successful transformation should lead to a higher valuation. We reiterate our Buy
• H1-23 REBIT exceeded our estimate by 19% and consensus by 12%.• Bekaert remains confident to continue to deliver and repeats its medium-term target (e.g. REBIT margin 9-11%). • This confirms our positive stance as outlined in our in-depth report called 'Transformation should lead to higher valuation'. We reiterate our Buy and TP of EUR 52, based on our 2024E with a target EV/REBIT of 8.0x.
• Q1-23 revenues exceeded our and consensus estimates by 4-5%. Most divisions outperformed, except for Specialty products.• Bekaert is confident to deliver on its expectations, reiterating its medium-term targets (e.g. REBIT 9-11%). We expect to slightly lift our REBIT estimates.• This trading update confirms our positive stance as described in our recent report 'Transformation should translate in higher valuation'. We reiterate our Buy rating and our TP of EUR 52.
FY22 results showed that Bekaert has improved its resilience in tougher trading conditions due to pricing discipline, mix improvements and cost control.The transformation to a structurally higher margin company is continuing, with the sale of part of the lower-end steel wire solutions in Chili/Peru Buy reiterated. In this 20p report, we raise our TP from EUR 48 to EUR 52, based on our 2024E SOTP (was 2023E) and on 4-8% higher REBIT estimates.Showing resilience and structurally higher marginsDespite a rather tough environment with cost inflation and lower volumes (-9%), Bekaert reached a solid REBIT margin of 8.1% in 2022 (was
Bekaert reported FY22 results in line with the guidance, underlined by better-than-expected FCF generation stemming from well-managed WC. The return to shareholders looks attractive with a yield at 8.8% based on €90m of dividend payments and the unexpected €120m of buyback (again). Given the health of Bekaert’s balance sheet, this return could have been higher but external growth remains a priority. The FY23 performance will depend on the rebound of the Chinese market. “New Bekaert” appears to be more diversified and profitable, and to have its sights on the hydrogen market.
• H2-22 REBIT was in line, at the high end of the FY22 EUR 450-460m guidance range.• Bekaert indicates that trading started well in 2023, but that economic uncertainties remain. A new SBB program of EUR 120m was announced.• Buy reiterated. In our view its undemanding valuation (<7x EV/EBIT) ignores the structural improvements on margins, ROCE (19.5%), FCF, and balance sheet.
Bekaert’s Q3 trading update came in with a strong price effect, yet decreasing sequentially on tougher comps, and plunging volumes on par with the performance in H1 22. The company finally issued a guidance for FY22, topping our expectation on top-line growth but slightly falling short of our adjusted EBIT forecast. The company also confirmed its mid-term targets, which point to structural improvements and decreased cyclicality. 2023 is likely to be a good stress test.
Bekaert’s Q1 trading update was above expectations on the back of a huge price effect offsetting the weak volumes especially in China. Despite the split between price mix and pass-through pricing being unknown, this once again confirmed the company’s good pricing power coupled with the positive trend in the ongoing portfolio rotation. The initial comments on the FY22 outlook call for an increase in our top line and EBIT expectations. Chinese lockdowns remain the key uncertainty.
Bekaert reported a guidance-beating set of FY21 results on the back of revenue growth combining a +9% volume effect and a +19% price effect. Despite the seasonally lower profitability in H2 and cost headwinds, the company comfortably met its outlook, with underlying EBIT landing 50bps ahead of the AV estimate. The absence of guidance for FY22 reflects the high uncertainty on the market environment although the management has reiterated its mid-term outlook as a sign of confidence. A €120m buyback programme has been announced.
Bekaert posted record H1 21 on every line. With a positive alignment of the volume rebound, skyrocketing raw material prices, and improving price/mix, the underlying EBIT margin landed at 12.4%. Management has started to weigh up M&A options to use the rapidly growing cash pile. Mid-term outlook was upgraded only two months after Bekaert’s CMD.
Having postponed the date from last March to give the new CEO time to settle in, Bekaert finally held its CMD with an expected upgrade to FY21 guidance, and a mid-term outlook in radical continuation of its current strategy. The main limitations remain the uncertainties about raw material headwinds which could lead to sticky margins on the worst-case scenario. Uncertainty also surrounds M&A targets and the magnitude of cost reductions, while the most recent track record calls for management effectiveness.
Bekaert posted strong results in every respect. Despite FY20 consolidated sales down by 13% yoy, profitability and cash generation came in at record levels (FY20: underlying EBITDA margin of 12%, FCF up by 8% yoy) and paved the way for a massive deleveraging (net debt down 40% yoy). The company’s new CEO shows confidence looking into 2021.
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