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Bekaert: 2022 First half-year results

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Bekaert
Bekaert

Bekaert delivers strong growth and solid financial results in a turbulent macroeconomic environment
Sales up +24% • underlying EBIT of € 283 million • EPS up +14% to € 4.16 • net debt/underlying EBITDA of 0.88

Bekaert delivered robust growth and a solid profit performance in the first half of 2022, driven by strong price realization and excellent operational performance. This was achieved despite increasing volatility, cost inflation, supply chain challenges, lockdowns in China, and weaker demand in selected geographies, compared to a very strong first half last year.

Financial Highlights H1 2022

  • Consolidated sales of € 2 859 million (+24%) and combined sales of € 3 456 million (+24%)

  • High profitability, roughly in line with the very strong first half of 2021 in absolute values:

    • Gross profit of € 472 million, in line with a very strong first half last year (€ 473 million)

    • Underlying EBIT of € 283 million, almost equaling the high profit generation of H1 last year (€ 285 million)

    • Underlying EBITDA of € 381 million, € +5 million higher than for the same period last year (€ 376 million)

  • The pass-through of high cost inflation caused some dilution in a number of ratios, compared to exceptional margin performance last year:

    • Underlying EBIT margin on sales of 9.9% (versus 12.4%)

    • Underlying EBITDA margin on sales of 13.3% (versus 16.3%)

    • Underlying ROCE of 22.8% (versus 26.9%)

  • Very strong net result:

    • The result for the period attributable to equity holders of Bekaert increased by +14% to € 237 million

    • This resulted in EPS of € 4.16 per share, an increase of +14% versus € 3.66 last year

  • Average working capital on sales of 15.0%, compared with 13.0% last year. The working capital increase over last year was mainly driven by cost inflation and negatively impacted the cash flow.

  • Net debt of € 673 million, up from € 519 million on 30 June 2021. Net debt on underlying EBITDA remained well below 1.0 (0.88 versus 0.69 at the close of H1 2021).


Focus and effectiveness of our actions

While facing wide-scale macro imbalances due to supply chain issues, unseen cost inflation, the war in Ukraine, and extensive Covid-19-lockdowns in China, Bekaert continued to execute its transformation agenda at a high pace in the first half of 2022. Our actions have been specifically geared towards:

  • Leveraging the benefits from our global footprint and local services and sourcing channels, which has allowed to:

    • Address the ongoing deglobalization trends

    • Secure supply continuity to our customers worldwide

    • Adjust sourcing channels affected by logistic and other supply disruptions

  • Strong pricing discipline and execution, significantly offsetting the overall cost inflation

  • Seizing the short to medium-term growth opportunities arising from sustainability and innovation trends:

    • Strong growth in low-carbon concrete reinforcement solutions

    • Successful project wins in offshore energy tenders, progress in building a leading innovation position in hydrogen electrolysis technologies, and other product and service solutions supporting the energy transition

  • As a result of these improvement actions, all four business units delivered an underlying EBIT margin between ~9% and ~18%, despite significant adverse margin effects from decreased volumes in most business units.

Outlook 


Our profitability ambitions for the medium term remain unchanged.

However, the 2022 outlook remains particularly volatile due to macroeconomic and geopolitical turbulences.

We therefore remain vigilant and will actively address further changes in market conditions. Similar to the agility demonstrated throughout the Covid pandemic, we will continue to align our business priorities with the market needs, further leverage our pricing discipline, and accelerate the execution of additional structural cost savings.


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