Bekaert has achieved solid financial results in the first half of 2011, in line with previous communication. The company delivered a sales growth of 16% and a continued strong cash generation (EBITDA of EUR 342 million, representing an EBITDA margin of 19.2%). The average EBIT margin of 13.0% reflects strong business performance in all regions. Based on the financial performance of the first half of 2011, the board of directors has decided to distribute a gross interim dividend of EUR 0.67.
As reported before, Bekaert anticipated a demand impact as a result of measures for more controlled growth in China, which led to an overall weaker economic activity in the country. Also the expected volatility in the solar energy sector due to changed fiscal stimulus policies in the European end markets materialized, resulting in a significant reduction in demand. Moreover, in both the energy related and automotive sectors, the company faced increased competitive capacities in China and large inventories throughout the supply chain.
Bekaert took appropriate measures to defend its market position in China, including price adjustments. The combined impact of all abovementioned events came into effect in the second quarter of 2011.
Key Figures
| H1 '10 | H1 '11 | Change | |
| Consolidated sales | 1535 | 1780 | 16.0 |
| REBIT | 262 | 242 | -7.6 |
| REBIT margin on sales | 17.1% | 13.6% | -20.5 |
| Non recurring items | -19 | -10 | -47.4 |
| Operating result (EBIT) | 243 | 232 | -4.5 |
| EBIT margin on sales | 15.9% | 13.0% | -18.2 |
| Depreciation, amortization and impairment losses | 106 | 110 | 3.8 |
| EBITDA | 349 | 342 | -2.0 |
| EBITDA margin on sales | 22.7% | 19.2% | -15.4 |
| Combined sales | 2113 | 2412 | 14.2 |
In EUR millions
In the first half of 2011, Bekaert achieved consolidated sales of EUR 1.78 billion and combined sales of EUR 2.41 billion, an increase of 15.9% and 14.2% respectively. The consolidated sales increase was 18.4% from organic growth. The net impact of acquisitions and divestments (-0.4%) and fluctuations in several exchange rates (-2.1%) had an adverse effect on the sales growth. Combined sales4 increased by 15.0% organically. The currency effect was almost neutral (-0.5%).
Consolidated and combined sales by segment
First half consolidated sales
| Consolidated sales | H1 '10 | H1 '11 | Variance | Share |
| EMEA | 526 | 614 | 17% | 34% |
| North America | 313 | 354 | 13% | 20% |
| Latin America | 144 | 173 | 20% | 10% |
| Asia Pacific | 552 | 639 | 16% | 36% |
| Total | 1535 | 1780 | 16% | 100% |
In millions of EUR
First half combined sales
| Combined sales | H1 '10 | H1 '11 | Variance | Share |
| EMEA | 523 | 608 | 16% | 25% |
| North America | 310 | 349 | 13% | 14% |
| Latin America | 727 | 814 | 12% | 34% |
| Asia Pacific | 553 | 641 | 16% | 27% |
| Total | 2113 | 2412 | 14% | 100% |
In millions of EUR
Segment reports
EMEA
| Key figures | H1 '10 | H1 '11 | Change |
| Consolidated sales | 526 | 614 | 16.7 |
| REBIT | 54 | 54 | 0.0 |
| REBIT margin on sales | 10.2% | 8.9% | -12.7 |
| Non recurring items | 2 | -9 | -550.0 |
| Operating result (EBIT) | 52 | 46 | -11.5 |
| EBIT margin on sales | 9.8% | 7.5% | -23.5 |
| Depreciation, amortization and impairment losses | 30 | 28 | -6.7 |
| EBITDA | 81 | 74 | -8.6 |
| EBITDA margin on sales | 15.5% | 12.1% |
In EUR millions
Bekaert's activity platforms performed well in most EMEA markets, with automotive sales recording strong growth in comparison to the first half of 2010. Ongoing initiatives for upscaling industrial technologies, the usual start up costs associated with manufacturing expansions (in Belgium, Slovakia and Russia), and provisions for environmental liabilities, tempered the profitability ratios.
North America
| Key figures | H1 '10 | H1 '11 | Change |
| Consolidated sales | 313 | 354 | 13.1 |
| REBIT | 21 | 28 | 33.3 |
| REBIT margin on sales | 6.7% | 7.8% | 16.4 |
| Non recurring items | -1 | -1 | 0.0 |
| Operating result (EBIT) | 20 | 27 | 35.0 |
| EBIT margin on sales | 6.5% | 7.6% | 16.9 |
| Depreciation, amortization and impairment losses | 9 | 7 | -22.2 |
| EBITDA | 29 | 34 | 17.2 |
| EBITDA margin on sales | 9.3% | 9.7% | 4.3 |
In millions of EUR
Sustained high demand in most markets led to increased sales and solid profitability in North America. Bekaert's specialty films activities, as well as most wire and cord products for the automotive and energy-related markets performed well.
Bekaert North America's organic sales growth (+21%) was negatively impacted by unfavorable exchange rate movements (-6%) and the disposal of diamond-like carbon coating and composites activities in the US (-2%).
Latin America
| Key figures | H1 '10 | H1 '11 | Change |
| Consolidated sales | 144 | 173 | 20.1 |
| REBIT | 14 | 16 | 14.3 |
| REBIT margin on sales | 9.5% | 9.3% | -2.1 |
| Non-recurring items | -12 | 0 | -100.0 |
| Operating result (EBIT) | 1 | 16 | 1500.0 |
| EBIT margin on sales | 0.9% | 9.3% | 933.3 |
| Depreciation, amortization and impairment losses | 19 | 6 | -68.4 |
| EBITDA | 20 | 22 | 10.0 |
| EBITDA margin on sales | 13.9% | 12.6% | -9.4 |
| Combined sales | 727 | 814 | 12.0 |
In millions of EUR
The Bekaert subsidiaries in Latin America delivered strong results and robust sales growth, particularly in Venezuela. Overall currency movements had an adverse effect of -4.6%.
Combined revenues were up 12% in Latin America. Sales of the Brazilian joint ventures were tempered by the downward adjusted selling prices to compensate for the effect of the strong Real. Also the market conditions in Chile endured higher competition from imports.
Asia Pacific
| Key figures | H1 '10 | H1 '11 | Change |
| Consolidated sales | 552 | 639 | 15.8 |
| REBIT | 206 | 185 | -10.2 |
| REBIT margin on sales | 37.4% | 29.0% | -22.5 |
| Non-recurring items | -3 | -1 | -66.7 |
| Operating result (EBIT) | 203 | 185 | -8.9 |
| EBIT margin on sales | 36.8% | 28.9% | -21.5 |
| Depreciation, amortization and impairment losses | 48 | 71 | 47.9 |
| EBITDA | 252 | 256 | 1.6 |
| EBITDA margin on sales | 45.6% | 40.0% | -12.3 |
In millions of EUR
Sales increased by 16% in Asia Pacific, with strong growth in India and Indonesia. Government measures for more controlled growth in China and a downturn in the solar energy sector started to affect top line sales during the second quarter. Bekaert also faced increased competitive capacities and adjusted its prices to defend its market position.
Transport markets in China suffered from overcapacity, a reduced impact of previous stimulus packages and limited access to credit and to financial resources in general. Bekaert felt the impact in the course of the second quarter with lower demand for truck tire cord and longer outstanding receivables. Changed fiscal stimulus policies in European end markets resulted in a significant demand reduction in the solar energy markets.
While Bekaert has never incurred a credit loss in China in the past, the company raised, in line with its prudent valuation rules, the bad debt reserve by EUR 21 million. Notwithstanding the abovementioned impact on its China business, Bekaert realized a continued strong cash generation in the region.
