Bekaert: 2019 first half-year results
Bekaert improves profitability and reduces debt leverage
Underlying EBIT up 14% to € 126 million – Net debt / underlying EBITDA of 2.6, down from 3.1
Highlights
In challenging market conditions, Bekaert improved its financial performance in the first half of 2019:
- achieved 3% sales growth, particularly in tire and construction markets
- realized major cost savings in operations and overheads
- enhanced our pricing power and product-mix
- improved the business mix of Bridon-Bekaert Ropes Group
- significantly improved the average working capital on sales
- deleveraged and successfully refinanced debt.
Underlying EBIT reached € 126 million for the first half of 2019, up 14% from last year and representing a margin on sales of 5.7%. Underlying EBITDA totaled € 239 million, up 12% and reflecting a margin of 10.8%. Underlying ROCE was 9.3% compared with 8.1% for the same period last year. Net debt on underlying EBITDA improved from 3.1 (as per 30 June 2018) over 2.7 (at the close of 2018) to 2.6 on 30 June 2019.
Outlook
The business conditions in various sectors are trending lower as a result of continued uncertainty. We do not foresee a rebound in our agriculture, automotive OEM, and industrial markets in the near future. We project tire and construction markets to hold up well, but with the normal seasonality of the second half of the year.
We will continue to offset the headwinds with effective cost actions and by making further progress in enhancing our operating performance.
Despite seasonality and a softening demand in various sectors, we will continue to focus on year-on-year underlying EBIT margin improvement as we progressively rebuild to above 7% over the medium term.
We will further strengthen our balance sheet with strict control on working capital and capital expenditure, in order to continue reducing net debt/underlying EBITDA.
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