Bekaert: 2022 Full Year Results

Bekaert

2022 Full Year Results

Bekaert delivers strong sales growth and robust financial results in challenging market conditions
Sales up +17% • EBITu of € 459 million (margin 8.1%) • Net debt/EBITDAu of 0.7x • Proposed dividend of € 1.65 per share and continued share buyback

Bekaert achieved strong sales growth responding quickly to the challenges of high raw material and energy cost inflation with product price rises. These swift actions, along with further operational efficiencies, helped to protect profitability despite higher input costs and lower utilization. These results also reflect the successful execution of Bekaert’s strategy, where the core businesses have been further strengthened, whilst also repositioning to target new markets with opportunities from energy transition and decarbonization trends.

Financial Highlights

• Consolidated sales of € 5.7 billion (+16.8%) and combined sales of € 6.9 billion (+17.1%), driven by significant pricing discipline to manage increased costs, principally raw materials and energy

• Robust profitability despite a dilutionary effect on margins from the pass through of increased costs, lower volumes and an absence of 2021 tailwinds

  • EBITDAu of € 654 million (-5%), delivering a margin on sales of 11.6% (vs 14.2% in FY2021)

  • EBITu of € 459 million (-10.5%), resulting in a margin of 8.1% (vs 10.6% in FY2021)

• Strong cash conversion, despite lower volumes impacting profitability and payables

  • Average working capital on sales ratio of 13.5%, compared with 12.6% last year

  • Free Cash Flow (FCF) of € +190 million, compared to € +221 million last year

• Net debt of € 487 million (€ 417 million FY2021), resulting in net debt to EBITDAu of 0.7x

• Proposed dividend of € 1.65 per share (+10%) and continued share buyback of up to € 120 million
  
  

Operational and strategic highlights

• Fast-paced and significant pricing discipline to offset rapidly rising energy and material costs

  • Sales up 16.8%, despite lower volumes in many areas and organic growth of 11.8%

• As part of our strategic re-positioning, the disposal of Steel Wire Solutions businesses in Chile and Peru, with a total enterprise value of approximately US$ 350 million, resulting in net proceeds for our stake of US$ 136 million

• Ongoing business-mix improvements and organizational efficiencies

  • Consolidation of BBRG Steel Rope activities in the UK; consolidation of global burner activities in Romania

  • Impairment of Lipetsk plant in Russia

• Continued progress on our strategic transformation focusing on growth markets, innovation, and sustainability

  • Scale production for Hydrogen applications

  • Further contract awards for Dramix® from the Toronto Metrolinx Subways and Sydney metro

  • First synthetic offshore mooring contracts and a growing pipeline of floating wind development projects

• Sustainability: Safety improved for the 5th consecutive year; our ambitious CO₂ targets validated by the Science Based Targets initiative (SBTi); and inclusion in the BEL ESG index
  
  

Committed to return value to our shareholders

The Board of Directors seeks to maintain a prudent approach to capital allocation, balancing investment in future growth, maintenance of a strong balance sheet and shareholders’ returns. The successful execution of the strategic plan and robust financial performance have strengthened Bekaert’s balance sheet position and overall cash generation through time, and therefore potential returns to shareholders. In 2022, the dividend was increased by 50% and a share buyback program of up to € 120 million was commenced, executed over four equal tranches and completed in February 2023.

Against this robust financial position and the policy set out above, the Group intends to take a balanced approach with the following returns:

• A gross dividend of € 1.65 per share (an increase of 10% vs FY2021), to be proposed by the Board at the Annual General Meeting of Shareholders in May 2023

• To continue the share buyback program up to a total of € 120 million over a period of twelve months

As before, the purpose of the program will be to reduce the issued share capital of the company and shares repurchased will be cancelled.

Outlook

Whilst trading in 2023 has started well across all business units, economic uncertainties remain. The robust performance delivered in 2022 and the company’s strong financial position, gives us confidence in our ability to deliver further on our strategic priorities. We therefore continue to confirm our ambition to reach the mid-term targets (2022-2026) of organic sales growth of 3%+ CAGR and an underlying EBIT margin level of 9% to 11% through the cycle.

 

Attachment

• p230301E - Annual results 2022