Bekaert: 2024 Full Year Results

2024 Full year results

Resilient delivery in challenging business environment

Proposed dividend of € 1.90 (+6%) and ongoing € 200 million share buyback

Bekaert delivered a resilient financial performance in 2024, with stable profit margins (EBITu margin at 8.8%) and robust cash flows (Free Cash Flow of € 193 million). Despite lower volumes and weaker conditions in many of its end markets, the business continues to benefit from the successful execution of Bekaert's strategy of portfolio rationalization, pricing discipline, improving the mix of higher margin products, and driving further cost efficiencies.

Yves Kerstens, CEO of Bekaert, commented: "I am very pleased with the response from our teams in 2024, working incredibly hard to protect margins and cash flows despite falling volumes. These results show the resilience of the Bekaert business, thanks to its streamlined footprint and cost structure, and its ability to perform in difficult markets. We have also announced today the disposal of more commoditized businesses in South America at an attractive valuation, further demonstrating the portfolio transformation of the group. It is likely that 2025 will be equally challenging and uncertain, particularly in light of import duties and tariffs. However, I am confident we have the right strategy in place and, increasingly, the agility to manage these challenges."

Financial highlights

• Consolidated sales of € 4.0 billion (-8.6%) and combined sales¹ of € 4.9 billion (-9.0%)
  • Volumes were -3.5% lower reducing sales by € -151 million
  • Sales were impacted by € -170 million (-3.9%) from the pass through of lower wire rod and energy costs
  • Smaller effects from price and mix (€ -52 million, -1.2%) and currency (€ -31 million, -0.7%)
  • Sales from acquisitions added € +33 million (+0.8%) to the top line
• Stable underlying gross profit margin at 17.3% (vs 17.2% in FY2023) despite lower volumes
  • Strong focus on costs and production capacity optimization
• Solid operating result and stable margin performance in a deteriorating market
  • EBITDAu² of € 520 million (-7.3%), EBITDAu margin on sales of 13.1% (vs 13.0% in FY2023)
  • EBITu² of € 348 million (-10.3%), EBITu margin of 8.8% (vs 9.0% in FY2023)
• Improved performance in the non-consolidated Brazilian joint ventures with higher sales volumes (+3%) and an increased share of net results (+5%, to € 49 million)
• EPS of € 4.56 (-4% vs € 4.75 in FY2023) and EPSu² of € 5.55 (-4% vs €5.76 in FY2023)
• Robust cash generation, despite lower sales
  • Free Cash Flow² (FCF) of € 193 million, compared to € 267 million in FY2023
  • Net debt remains low at € 283 million (€ 254 million at FY2023, € 399 million at H1 2024), resulting in stable net debt to EBITDAu of 0.5x (vs 0.5x at FY2023 and 0.7x at H1 2024)
• Proposed dividend of € 1.90 per share (+6% y-on-y), alongside the ongoing € 200 million share buyback

Operational and strategic highlights

• Improved mix positively contributing to EBIT and minimizing the impact of lower volumes
• Intense focus on cost efficiencies and operational excellence
  • Further initiatives across cost base planned in 2025
• Resolving operational issues in steel rope activities (BBRG) in Europe and North America with a return to normal production output in Q4 2024
  • Order books remain supportive
• Some delays to growth platforms, but long-term outlook remains robust
  • Customer engagement remains excellent
  • Modular ramp-up ensuring capacity is matching demand, and costs are well controlled
• Successful integration of recent acquisitions of BEXCO & Flintstone
• Steel Wire Solutions disposal agreed in Costa Rica, Ecuador and Venezuela for an enterprise value of approximately US$ 73 million and net proceeds of approximately US$ 37 million, representing a EV/EBITDA multiple of 6.3x
• In 2024 Scope 1 and 2 greenhouse gas emissions reduced by around 5% against 2023, in line with our long-term ambition
  
  

Outlook

The conditions in many of our end markets deteriorated through the second half of 2024 and Bekaert took action to protect margins and cash flows despite falling volumes and prices. The weak business environment of H2 2024 is expected to persist into 2025. Therefore, the group expects flat revenues for 2025 and at least stable margins, with a more equally weighted first and second half split.

Committed to return value to our shareholders

The Board of Directors is committed to maintaining a strategic capital allocation policy, balancing investment in future growth and innovation, with maintaining a strong balance sheet and growing shareholder returns over time. The group is continuing its policy of progressively growing the dividend year-on-year and today announces a gross dividend of € 1.90 per share (an increase of 6% y-on-y), to be proposed by the Board at the Annual General Meeting of Shareholders in May 2025. This proposed dividend to shareholders would be alongside the ongoing buyback of up to €200 million of Bekaert shares.

Conference call for analyst and investors

Yves Kerstens, CEO of Bekaert, and Seppo Parvi, CFO, will present the 2024 results to analysts and investors at 10:00 a.m. CET on Friday February 28th. 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.