Bekaert announces CEO appointment and FY 2020 results

The Board of Directors appoints Oswald Schmid as CEO of Bekaert

The Board of Directors of Bekaert has appointed Oswald Schmid as Chief Executive Officer. Oswald Schmid has been leading the Bekaert Group Executive as interim CEO since 13 May 2020, when he was appointed member of the Board of Directors.

Jürgen Tinggren, Chairman of the Board of Directors, comments: “On behalf of the Board of Directors, I am proud to announce the appointment of Oswald Schmid as the CEO of Bekaert. The Board is convinced that Oswald is the right person at the helm of Bekaert. His leadership capabilities have been critically important in guiding the company toward a higher level performance, despite the unprecendented challenges faced throughout the health crisis. We are raising our ambitions for the near future and consider continuity in successful leadership at the CEO level an important enabler to reach those ambitions.”

The appointment of Oswald Schmid as CEO of Bekaert takes immediate effect.

Bekaert delivers solid profit growth and strengthens the balance sheet
uEBIT of € 272 million or 7.2% margin on sales – uROCE up +28% to 12.2% – net debt/uEBITDA of 1.26

Bekaert has successfully implemented the first steps of its transformation toward higher performance and delivered on all priorities set forth to restore a healthy balance sheet and improve the margin performance. Strong on execution, the Company has effectively captured the opportunities resulting from a fast and significant rebound in various markets in the second half of 2020 while efficiently countering the significant impact of Covid-19 through mitigating measures and structural performance improvements.

Financial highlights FY2020

• Consolidated sales of € 3.8 billion (-10%) and combined sales of € 4.4 billion (-7%)

• Underlying EBIT of € 272 million, up +13% from last year, resulting in a margin of 7.2% (versus 5.6%)

• EBIT of € 257 million, up +65% from last year and resulting in a margin of 6.8% (versus 3.6%)

• Underlying EBITDA of € 479 million (+2%), delivering a solid double-digit margin on sales (12.7%)

• Underlying ROCE of 12.2%, significantly up from 9.5% in 2019

• EPS of € 2.38 per share (versus € 0.73 last year)

• Working capital reduction of -23%, resulting in a working capital on sales ratio of 14% at year-end and 16% average during the year

• Solid Operating Free Cash Flow of € 449 million, up +8% versus last year

• Net debt of € 604 million, down from € 977 million at the close of 2019, resulting in net debt on underlying EBITDA of 1.26, significantly down from 2.09 last year

Focus and effectiveness of our actions in 2020

• Structural improvements to the overall Bekaert performance:

  • Improved product and business mix, in line with our strategy to upgrade the business portfolio

  • Robust progress in profit restoration programs: all four Business Units of Bekaert delivered an underlying EBIT margin of 7% or more as well as a double-digit underlying EBITDA margin

  • Continued implementation of organizational efficiencies and manufacturing excellence programs

  • Tight control on working capital and capital expenditure to deleverage the debt

• Effective and agile Covid-19 response:

  • Protective measures to limit the impact of the Covid-19 pandemic on the health and safety of our employees and their families

  • Customer centricity and agile supply chain management across the value chain, ensuring supply continuity to customers both during the (H1) downturn and (H2) demand rebound

  • Effective mitigating actions to decrease cost

Bottom-line result and dividend proposal

• The result for the period attributable to equity holders of Bekaert amounted to € 135 million, more than tripling compared to last year (€ 41 million) driven by a strong profit performance, a reduction of the effective tax rate (from 73% in 2019 to 33% in 2020), and the robust increase in the results of the Brazilian joint ventures.

• The Board of Directors will propose to the Annual General Meeting of Shareholders of 12 May 2021, a gross dividend of € 1.00, in line with the company’s pay-out policy.
  

Outlook

Despite a fast and strong rebound in several markets in the past months, the global economic uncertainty remains high.

The structural improvement actions we have been implementing since the end of 2019 and our agile response to Covid-19 have demonstrated their effectiveness in strengthening Bekaert’s overall performance.

Actions to further step up our performance should generate robust progress towards our long term goals:
• We project FY 2021 consolidated sales to reach at least € 4 billion, subject to demand and currency evolutions.
• We intend to exceed the solid underlying EBIT margin of 2020 by 40-60 bps in 2021.
• Net debt on underlying uEBITDA is projected to stay below 1.5 in 2021.

The strong performance we delivered in the difficult year 2020 and our determination to stimulate value creation by further enhancing our business portfolio and seizing value growth in robust markets, have made us more confident about the future potential of Bekaert. We are therefore raising our ambitions for the coming years.

Attachment

• p210303E - Bekaert announces CEO appointment and FY 2020 results