Trading update for the three months to March 2024
Solid start to the year, with trading in line with expectations for the full year 2024
Bekaert has started the year well and in line with expectations. Whilst Q1 2023 provides a tough comparison benefiting from customer restocking in China, foreign exchange tailwinds and the priced-in higher raw material and energy costs, Bekaert has delivered in the first three months of 2024 consolidated sales of € 1 025 million (-14% against the same period in 2023) and combined sales of € 1 245 million (-15%).
Strategically, Bekaert continues to develop its growth platforms, capitalize on an improving mix of higher-margin products and drive structural cost efficiencies from its operational footprint. Therefore, management remains confident in the financial expectations for FY 2024 and its mid-term targets on sales growth, margin progression and ROCE delivery.
Highlights
- Q1 2024 consolidated sales of € 1 025 million (-14% vs Q1 2023) and combined sales of € 1 245 million (-15%) driven by the reversal of raw material costs, lower volumes (which reduced by -5%) and an unfavorable impact from exchange rates
- Q1 2024 consolidated sales increased 5.3% vs Q4 2023 driven primarily by higher volumes
- Strong focus on cost efficiencies and effective working capital management continues
- Rubber Reinforcement - continue to drive margins through both higher performance tire cords and further production cost optimization; increasing customer interest for recycled steel applications
- Steel Wire Solutions - continued strong demand in energy and utility markets, with lower demand in most other end markets; benefitting from mix improvements and ongoing operational footprint optimization
- Specialty Businesses - strong volumes in Construction Decarbonization and Hydrogen businesses offset by weak demand in the Combustion Technologies and Hose and Conveyor Belt sub-segments
- BBRG - lower volumes from project re-phasing and some manufacturing issues
Outlook
The performance delivered to date in 2024 and the company's robust financial position give us confidence in our ability to further deliver on our strategic priorities. Whilst economic uncertainties continue and a number of end markets remain challenging, our trading in 2024 has started in line with expectations and management continues to anticipate modest sales growth and at least stable margins in 2024.
Looking beyond 2024, we also remain confident in our targets of a sales growth rate of more than 5% per year in the mid-term and from 2026 an EBITu margin of more than 10%, ROCEu of more than 20% and over 50% of sales generated from sustainable solutions.
