Market developments

Bekaert EMEA figures_2013

Combined sales: € 1 028 million
Capital expenditures (PP&E): € 26 million
Total assets: € 716 million
Employees: 5 800

In the EMEA region, Bekaert has a presence in both the mature Western European markets as well as in Central and Eastern Europe. After a relatively weak start of the year, the demand in Europe gradually improved in the sectors which are relevant to Bekaert’s main business activities in the region.

Automotive markets: on the road to recovery?

The automotive industry is a large user of Bekaert’s steel wires, both in the original equipment and the replacement markets.

Automotive markets picked up moderately starting from the second quarter of 2013. While seeing the market bottom out is certainly positive, any comparison with 2012 is one with a year with low demand.

On the positive side, the entire sector is constantly searching for better, safer and lighter materials. As a result, opportunities for innovation-oriented technologies continue to exist.

After a difficult first quarter, Bekaert posted solid sales in EMEA as a result of improved demand for tire cord and wiper blades, both of which have an OEM and a significant aftermarket.

Energy markets fuel performance

Energy-related sectors started to contract at the beginning of 2013 as a result of delayed projects and investments in both the oil and gas sector and the electric power grid infrastructure. Demand picked up in the second half. Bekaert’s cable armoring wires, flat and shaped wires, and anchorage rope wires, were sold in stable volumes compared to 2012, amidst an increasingly competitive environment.

Building the foundations for further growth

Construction markets remained difficult in Europe in the first half-year due to stagnant housing markets and delayed public infrastructure projects in most countries. The situation improved in the second half of 2013 but there are no signs yet of a global recovery to pre-recession activity levels.

Bekaert withstood the ongoing difficult market circumstances by offering product innovations and optimal service in the many infrastructure and construction segments it serves. Demand for Bekaert’s Dramix® steel fibers for concrete reinforcement remained solid. Sales of prestressed concrete strand picked up in the second half of the year and a number of new applications were added to the portfolio.

Stainless results

Bekaert’s European activities in stainless technologies performed well in 2013, with a solid demand for fiber products, filtration media, and combustion and drying installations and components. Additionally, the stainless steel wire platform performed well with, among others, the medical applications such as Nitinol dental wire, lancet and surgical needle wire.

Operations

Sowing the seeds for future growth

Bekaert invested in future growth opportunities by expanding its Central and Eastern European platforms with manufacturing capacities of bead wire for tire reinforcement and Dramix® steel fibers for concrete reinforcement. In Western Europe, Bekaert continued to invest in promising new technologies and production capacity to serve automotive and energy markets.

Bekaert expanded and upgraded its automotive-oriented manufacturing platforms in Belgium and Slovakia to respond to greater market opportunities for window wiper arms and blades, piston circlips, and bead wire for tire reinforcement. In this way, Bekaert is solidifying its standing as a global key player and an industry reference in high quality steel wires for the automotive sector.

As a technology leader in flat and shaped steel wire solutions for the oil and gas markets, Bekaert initiated new investments in late 2013, to upgrade and expand its related manufacturing sites in Belgium and the UK.

In line with the growing needs of the building industry in Russia and the greater CIS, Bekaert launched a new production line of Dramix® steel fibers in its Lipetsk plant in Russia. This expansion step reflects the Bekaert strategy of always aligning its manufacturing footprint to the demand perspectives in local markets.

Bekaert_Dramix_Lipetsk_2013

The inauguration of the Dramix® plant took place in the presence of representatives of the local authorities and Bert De Graeve, CEO of Bekaert.

Improving our cost base and profitability

As part of its pursuit for operational excellence, and of the specific actions taken in 2013 relating to the cost savings program, Bekaert’s EMEA production plants were able to reduce costs and improve the balance between flexible and fixed costs. Moreover, the cost structure of the regional organization was adjusted by making it leaner and more efficient.

The implementation of these significant cost savings and the 2012 restructuring measures considerably improved the profitability of Bekaert’s operations in EMEA.

Bekaert_EMEAOperations_2013

In pursuit of operational excellence, Bekaert's EMEA production plants were able to improve processes and enhance profitability.


Divestment

On 3 December 2013, Bekaert sold its filtration activities to the American Clarcor group, based in Franklin, Tennessee. The small business activities included a production facility in Sprimont, Belgium, as well as a production plant in Karawang, Indonesia and a global sales network. The transaction included a supply contract under which the business activities which were sold will continue to purchase Bekipor® filtration media from Bekaert Fiber Technologies in Zwevegem, Belgium.

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