PresseBox
Press release BoxID: 174037 (Bekaert Advanced Coatings NV)
  • Bekaert Advanced Coatings NV
  • President Kennedypark 18
  • 8500 Kortrijk
  • http://www.bekaert.com
  • Contact person
  • Katelijn Bohez
  • +32 (56) 2305-71

Bekaert accelerates growth

First quarter trading update 2008

(PresseBox) (Herford, ) In the first quarter of 2008 Bekaert achieved consolidated sales of € 593 million and combined sales of € 903 million, an increase of 15.3% and 11.4%2 3 respectively compared with the same period in 2007.

The consolidated sales' increase was 13.5% from organic growth and 7.1% from the net movement in acquisitions and divestments, while fluctuations in several exchange rates had an adverse effect of 5.3%.

Bekaert advanced wire products posted vigorous sales growth. The Asian and Latin American activity platforms in particular performed excellently, as did building products.

Wire Europe had a strong quarter, with higher demand for galvanized wire products mainly. Wire North America's firm sales increase (+13.2%), driven partly by the start-up of a trading operation for wire products, was canceled out entirely by exchange rate movements. Wire Latin America's sound growth was the product of higher volumes and higher selling prices reflecting the immediate pass-through of price increases of raw material. Wire Asia performed well, thanks to the successful start-up of galvanized wire production in Karawang, Indonesia. The growth in building products sales was due partly to increased market penetration in Turkey and the Middle East.

Strong local demand for various Bekaert products on the Chinese market and the company's increasing market share combined to produce remarkable growth in steel cord China. This achievement was made possible by the completion of major capital investment projects which boosted annual production capacity of tire cord, for example, to 275 000 metric tons. North America's lower level of activity and exchange rate movements accounted for the lower sales of steel cord others.

Revenues from advanced materials were stable. Compared with a strong first quarter in 2007, sales of stainless and combustion technologies were down, while rising demand for metal fibers for diesel particulate filters contributed largely to the sales growth in fiber technologies.

Sales of advanced coatings were down, due to a lower level of project business in industrial coatings and the termination of the small-scale diamond-like coating activities in Asia. Specialized film coatings performed strongly (+15%), but all growth was canceled out by exchange rate movements.

Investment Update

In the first quarter of 2008, Bekaert issued a five-year € 100 million bond loan at 5.30% and bought back 161 000 shares for € 13.6 million (average price per share € 84.52). The repurchased shares were canceled in March 2008.

The strong balance sheet and the low gearing, in line with previous years, support the high investment level, mainly due to the capital investment programs in Asia and Belgium. Bekaert also decided to invest in a new steel cord plant in the Lipetsk Special Economic Zone in Russia. This investment of more than € 97 million will take place in phases over the period 2008-2013. NV Bekaert SA and Haci Ömer Sabanci Holding A.S. have signed a letter of intent concerning the acquisition by Bekaert of the remaining 50% of the shares in Beksa Celik Kord Sanayi ve Ticaret A.S. (Turkey). The acquisition price has been estimated at € 40.3 million.

Outlook

Bekaert expects to achieve strong sales growth in the first half of the year, thanks to its strategic positioning in the growth markets.

Financial calendar
General Meeting of Shareholders 14 May 2008
Dividend payable (coupon no. 9) 21 May 2008
2008 half-year results 1 August 2008
Third quarter trading update 2008 7 November 2008
Fourth quarter trading update 2008 20 February 2009
2008 results 13 March 2009
2008 annual report available on Internet 17 April 2009
First quarter trading update 2009 13 May 2009

Bekaert Advanced Coatings NV

Bekaert (www.bekaert.com) seeks sustainable profitable growth based on its two core competences: advanced metal transformation and advanced materials and coatings. Bekaert aims to consolidate its position as both market and technological leader around the world. With its broad range of high technological products, systems and services, Bekaert offers high added value for its customers. Bekaert (Euronext Brussels: BEKB) is an European based company, headquartered in Belgium, employing 20 400 people. Bekaert, present in 120 countries, generates combined annual sales of more than € 3.4 billion.