Bekaert: 2024 Half Year Results
July 26 2024 - 12:00AM
UK Regulatory
Bekaert: 2024 Half Year Results
Strategic progress and financial resilience delivers
improved profit margins
Sales at € 2.1 billion • EBITu of
€ 204 million (margin 9.9%) • EPSu of € 3.04 • Free
Cash Flow of € 43 million • ROCEu 18.5% • Net
debt/EBITDAu of 0.7x
Bekaert delivered another period of improving profit margins and
solid cash flow generation in line with expectations, managing the
challenges of weaker end markets and lower volumes.
Whilst the operational performance was mixed in certain business
areas and there were some delays in growth markets, the ongoing
strategic execution, improving product price and mix and extracting
further cost efficiencies have offset these challenges to deliver a
result in line with expectations. With underlying gross profit
margin improving to 18.4%, EBITu margins up to 9.9% and robust free
cash flow of € 43 million in H1 2024, profit
expectations for the full year 2024 remain unchanged.
Financial highlights
- Consolidated sales of € 2.1 billion (-11.1%) and
combined sales of € 2.5 billion (-12.0%), driven
primarily by lower volumes, passed-on lower raw material costs and
an unfavorable impact from exchange rate movements
- Underlying gross profit margin improved to 18.4% (vs 17.6% in
H1 2023), with underlying gross profit at € 379 million
(vs € 409 million in H1 2023)
- Strong margin performance, driven by ongoing business mix
selection and operational improvements, despite lower volumes
- EBITDAu of € 288 million (-9.1%), delivering a
margin on sales of 14.0% (vs 13.7% in H1 2023)
- EBITu of € 204 million (-9.4%), resulting in a
margin of 9.9% (vs 9.7% in H1 2023)
- Underlying EPS stable at € 3.04 (vs € 3.07 in
H1 2023)
- Stable cash generation, despite lower volumes
- Free Cash Flow (FCF) of € 43 million, compared to
€ 38 million in H1 2023 (excluding H1 2023
cash flows from disposed of businesses)
- Net debt of € 399 million (€ 530 million
H1 2023), after acquisitions and an increased dividend,
resulting in net debt to EBITDAu of 0.7x
Operational and strategic highlights
- Ongoing strategic execution
- Positive M&A momentum with the acquisition of BEXCO to
increase capabilities in synthetic ropes
- Efficiency gains and structural cost improvements across the
business
- Improving business mix
- Three BUs at >10% EBITu margin level, including SWS
improving EBITu margins by +380bps to 11.4% in H1
- Some delays in growth businesses
- +4% volume growth in Sustainable Construction with notable
Dramix® wins for landmark projects and increased adoption rates in
newer markets
- Some delays in Hydrogen demand (12-18 months), but overall
outlook remains robust
- Operational performance challenges in Steel Ropes businesses in
US and UK – but turnaround plan deployed and to be completed during
H2
- Bekaert chosen as one of the top 500 most sustainable companies
in the world by TIME magazine
Outlook
The company’s resilient financial performance in H1 and robust
financial position gives us confidence in our ability to further
deliver on our strategic and financial priorities. There have been
delays to some growth businesses and in this environment,
management now expects a modest decline in sales in FY 2024 against
FY 2023. However, it does anticipate increasing EBITu margins in
2024 and EBITu in-line with current expectations, alongside further
strong free cash flow generation. Looking beyond 2024, management
remains confident in its existing longer term targets.
Conference call
Yves Kerstens, CEO of Bekaert and Taoufiq Boussaid, CFO, will
present the H1 2024 results at 10:00 a.m. CET on
Friday 26th 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.
- p240726E - 2024 Half Year Results
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