NV Bekaert (BEKB) H1 2024 earnings summary

Executive summary

• Achieved resilient H1 2024 financial performance with EBIT/EBITU margin at 9.9%-10%, stable profitability despite an 11% sales decline and operational challenges in Steel Ropes; three business units posted margins above 10%.

• Strategic progress included the acquisition and integration of BEXCO and Flintstone, margin improvements, and recognition among the top 500 most sustainable companies globally.

• Operational challenges in Steel Ropes (BBRG) in the US and UK impacted top line and profitability, with a turnaround plan and recovery expected in H2 2024.

Financial highlights

• Revenue of €2.06 billion to €2.1 billion, down 11%-11.1% year-over-year, mainly due to lower volumes and normalization of cost pass-throughs.

• EBIT/EBITU of €204 million, margin at 9.9%-10%; underlying EPS stable at €3.04.

• Free cash flow from operations at €43 million, stable versus prior year; net debt reduced to €399 million (net debt/EBITDAU at 0.7x).

• Working capital reduced by €56 million year-over-year; inventories and receivables decreased.

• CapEx for 2024 expected to be lower than initially projected, around €200 million, due to tactical postponements.

Outlook and guidance

• Management expects a modest 3%-4% sales decline for FY 2024, with higher EBIT/EBITU margins and strong free cash flow; long-term targets remain unchanged.

• CapEx spend to be lower than initially projected due to tactical postponements.