Bekaert: 2023 Half Year Results
28 Juillet 2023 - 7:00AM
Bekaert: 2023 Half Year Results
2023 Half Year Results
Another period of strategic progress and financial
resilience in difficult markets
Sales at € 2.3 billion •
EBITu of € 226
million (margin 9.7%) • Free Cash Flow of € 80m • ROCE
20.5% • Net debt/EBITDAu of
0.8x
Bekaert delivered another period of robust profitability and
cash flows, and has addressed pro-actively weaker conditions in
many of its end markets. Despite lower volumes, the core businesses
continue to benefit from the successful execution of Bekaert’s
strategy, alongside swift actions in the period to maintain pricing
discipline and cost efficiencies. Whilst looking beyond, the
repositioning to target new opportunities from the energy
transition and decarbonization trends continues, with growing
demand in a range of new products.
Financial Highlights
- Consolidated sales of € 2.3 billion (-8.2%) and combined
sales of € 2.9 billion (-8.6%), driven primarily by lower
volumes, passed-on lower raw material costs and an unfavorable
impact from exchange rate movements
- Gross profit remained stable at € 409 million (vs € 411 million
in H1 2022) at a margin of 17.6% (vs 16.3% in H1 2022)
- Robust operating profitability and strong margin performance,
driven by ongoing business mix improvements, despite the lower
volumes
- EBITDAu of € 317 million (-6.8%),
delivering a margin on sales of 13.7% (vs 13.5% in H1 2022)
- EBITu of € 226 million (-10.2%),
resulting in a margin of 9.7% (vs 9.9% in H1 2022)
- Underlying EPS of € 3.07 (vs € 4.04 in H1 2022) impacted by
lower EBIT and significant non-cash currency movements
- Strong cash conversion, despite lower volumes
- Free Cash Flow (FCF) of € +80 million,
compared to € -80 million in H1 2022, benefiting from improved
working capital management
- Net debt of € 530 million (€ 563 million H1 2022), resulting in
net debt to EBITDAu of 0.8x
- Share buyback program of up to € 120 million continues
Operational and strategic
highlights
- Fast-paced, tactical pricing discipline and business selection
to mitigate lower volumes
- Intense focus on cost efficiencies and procurement savings with
an ongoing range of initiatives, including supplier rationalization
and optimized operating models
- Ongoing successful strategic execution, re-positioning the
business towards higher margin, higher growth and less commoditized
sectors, and focusing on growth markets, innovation, and
sustainability:
- Increased customer penetration of
higher margin 4D and 5D Dramix® products
- Scale production in Currento® (Hydrogen
electrolyzer component)
- Significant demand growth for Armofor®
in both traditional and clean energy applications
- Launch of Ampact™ (component for the
next generation of electric vehicles) and first customer samples
delivered
- Production ramp-up and customer approval received in Vietnam,
balancing the plant footprint in Asia
- The disposal of Steel Wire Solutions businesses in Chile and
Peru remains on track and is expected to close in the second half
of 2023, subject to applicable regulatory approvals
Outlook
Despite facing a challenging market environment, the Group has
delivered robust results in H1 2023, particularly in terms of
operating margin and cash flow performance. As we noted earlier
this year, we anticipate the competitive and demanding environment
to persist across most of our business sectors for the rest of
2023. Nevertheless, Bekaert remains committed to responding to
these pressures and will continue to implement its strategy to
strengthen its core business and capitalize on growth
opportunities.
While we recognize the Group's typical seasonality in the second
half and anticipate some additional volume pressures, both
expectations for the full year of 2023 and our profitability
ambitions of 9-11% EBITu margin in the medium term, remain
unchanged.
Note on disposal adjustments
All sales and income statement items (up to Result for the
Period from Continued Operations) exclude any contribution from the
Steel Wire Solutions businesses in Chile and Peru subject to the
proposed disposal. In-line with IFRS 5, the 2022 comparative data
has been restated on the same basis enabling a like for like
comparison. On the balance sheet, all H1 2023 assets and
liabilities related to the business under disposal are presented as
held for sale, however the 2022 balance sheet data has not been
restated. The cash flow statement was not adjusted for the disposed
entities.
Net debt, working capital and most ratios and alternative
performance measures (APM) have been restated to provide a like for
like comparison for the continued operations (see note 15). A
separate earnings per share (EPS) from continued operations is
provided (note 9). Ratios that relate to equity do not fully
exclude the businesses under disposal.
Note 11 on Discontinued Operations provides more information on
the content of the result from discontinued operations, the related
cash flows and the nature of the assets and liabilities held for
sale. Note 14 provides more information on the impact of the
disposal adjustments versus the results of 2022 as published on
29th of July 2022 and 1st of March 2023.
Conference Call
The CEO and the CFO of Bekaert will present the H1 2023 results
at 10:00 a.m. CET on Friday 28th July. This presentation can be
accessed live upon registration via the Bekaert website
(bekaert.com/en/investors) and will be available on the website
after the event.
- p230728E - 2023 Half Year Results
NV Bekaert (EU:BEKB)
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