Bekaert Model update – Cash is king

We lowered our forecasts following the FY25 underlying EBIT margin guidance adjustment (from an 8-8.5% range to c. 8%), whilst welcoming the return to positive volume growth in 3Q. Bekaert has been struggling to grow recently as many of its important end markets (like automotive & construction) are inherently mature whilst some of the growth areas have not been living up to expectations (e.g. green hydrogen). Management is also looking at M&A to accelerate growth, but sizeable M&A is having a tough time to compete against share buybacks in terms of attractivity, in our opinion. The healthy free cash flow generation and solid balance sheet allow Bekaert to work on both tracks, and the current SBB pace (c. €100m/y) in combination with the dividend imply a yearly attractive return to shareholders of over 10%. With valuation very compelling, we maintain our BUY rating and € 55 TP.