half year results 2005 - steel wire transformation and

Half Year Results 2005

1 August 2005

BUILDING THE FUTURE.

TOGETHER.

WORLDWIDE.

Julien De Wilde, CEO

2

Half Year Results – 1 August 2005

Content

Highlights

Sales

Segment reporting• Advanced wire products• Advanced materials• Advanced coatings

Profitability

Balance sheet

Cash flow

Outlook

3


Introductory remark

Half year results are unaudited

Reporting in line with IFRS re continuing vs discontinued operations: Fencing systems Europe = ‘discontinued operations’

All comparisons re sales and results are made relative to the restated figures for ‘continuing operations’ in first half 2004

2004 figures:• P&L items restated• Balance sheet items on 31 December 2004 (non restated)

Combined sales are sales generated by consolidated companies, joint ventures and associates

4


Highlights first half 2005

Strong sales growth in all regions:

• Higher sales price levels compared to first half 2004, due to increased raw material prices

• Delayed orders due to expected wire rod price decreases

Further investments in capacity optimisation and streamlining ofthe product portfolio

Sale of Bekaert Fencing NV and its subsidiaries

Challenging second half year ahead, due to clear weakening of economic environment

5


Highlights first half 2005

Result from operations: € 85 million, compared to € 71 million

Total net profit: € 130 million, compared to € 79 million:

• Net result from continuing operations: € 76 million, compared to € 64 million

• Net result from discontinued operations: € 54 million (capital gain), compared to € 15 million

6


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

7


Sales

in millions of €

1363

1545

933

430

1096

449

859

449

971

543

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1 H 03 1 H 04 1 H 04 1 H 05

Consolidated Joint ventures and associates

1308

1514+16%

restated

8


Sales by business segment

Advanced wire productsAdvanced materials Advanced coatings

Intersegment and others

Total

variance

Combined salesConsolidated sales

in millions of € in millions of €

1 351636733

1514

+15%+17%

-1%

+16%

8406367

1

971

+11%+17%

-1%

+13%

variance

Combined sales (*)Consolidated sales (*)

advanced wire products

91%

advancedmaterials

4%

advancedcoatings

5%advanced wire products

87%

advancedmaterials

6%

advancedcoatings

7%

(*) excluding intersegment sales and others.

9


Sales by geographical area

EuropeNorth AmericaLatin AmericaAsiaRest of the world

Total

Combined salesConsolidated sales

in millions of € in millions of €

531344487130

22

1514

489323

15127

17

971

+12%+10%+11%+23%+29%

+13%

+12%+11%+22%+23%

+6%

+16%

variance variance

Consolidated sales Combined sales

Latin America

2%

rest of the world

2%

Asia13%

North America

33%

Europe50%

Europe35%

rest of the world

1%

Asia9%

Latin America

32%

North America

23%

10


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

11


Advanced wire products: sales

in millions of €

623

384

751

418

759

418

840

511

0

400

800

1200

1600

1 H 03 1 H 04 1 H 04 1 H 05

Consolidated companies Joint ventures and associates

1 007

1 169

1 351

1 177+15%

restated

12


Advanced wire products

Strong performance in Latin America and also in Asia, especiallyin China

Clear weakening in Europe and North America

Demand for steel cord products increased worldwide

Major investment programmes on schedule

Acquisition of ECC Card Clothing in June 2005

13


Advanced wire products: combined sales

Advanced wire products : +15%

wire Europe -2%wire North America -1%wire Latin America +24%wire Asia +12%building products -2%steel cord China +28%steel cord others +24%other advanced wire products +7%

14


Advanced wire products

other advanced wire products

4%wire Europe

14%

wire Latin America

30%

steel cord others31%

wire North America

10%

steel cord China5% building

products5%

wire Asia1%

Combined sales per activity platform

15


Advanced wire products: financials

in millions of €

Sales

EBIT before non-recurringNon-recurring eventsEBITEBIT margin

Depreciation and amortisationEBITDAEBITDA margin

Sales joint venturesShare in result joint ventures

1 H 05

840

1050

10512.6

39145

17.3

51128

%

%

1 H 04restated

759

98-494

12.4

39133

17.6

41824

%

%

16


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

17


Advanced materials: sales

5254 54

63

0

25

50

75

100

1 H 03 1 H 04 1 H 04 1 H 05

in millions of €

+17%

restated

18


Advanced materials

Major sales increase in combustion technologies, with acquisition of

Solaronics

Sales increase for composites but increased competition

Sales for fibre technologies remain stable

Move up the value chain for filtration applications with acquisition of

Southwest Screens & Filters

19


Advanced materials: sales

Advanced materials: +17%

fibre technologies +0%combustion technologies +42%composites +10%

20


Advanced materials


fibre technologies

42%

combustion technologies

44%

composites14%

21


Advanced materials: financials

in millions of €

Sales



63

7-25

8.5

38

12.7

54

505

9.0

38

14.1

%

%

1 H 05

%

%

1 H 04restated

22


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

23


Advanced coatings: sales

54

4

67

0

67

0

67

0

0

25

50

75

100

1 H 03 1 H 04 1 H 04 1 H 05

Consolidated companies Joint ventures and associates

67

58

in millions of €

6767

restated

24


Advanced coatings

Industrial coatings:

• decreased sales from sputter products (project business)• prepare for growth in diamond-like coatings with new facilities in US

Specialised films:

• sales in US stable• launch of new technological developments in window film• extended activities in Asia• negative impact of currency movements

Non-recurring (€ 5.5 million) for reallocation of worldwide production capacity in sputtered films

25


Advanced coatings: sales

Advanced coatings : -1%

industrial coatings -2%specialised films -1%

26


Advanced coatings

specialised films56%

industrial coatings44%


27


Advanced coatings: financials

in millions of €

Sales



67

3-5-2

-3.3

119

13.3

67

000

-0.1

77

10.9

1 H 05

%

%

%

%

1 H 04restated

28


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

29


EBITin millions of €in millions of €

73

107

75

94

0

50

100

150

1 H 03 1 H 04 1 H 04 1 H 05restated

EBIT before non-recurring

68

103

7185

0

50

100

150

1 H 03 1 H 04 1H 04 1 H 05restated

EBIT

30


EBIT on sales

%%

8.88.3

9.4

7.3

0

2

4

6

8

10

12

1 H 03 1 H 04 1 H 04 1 H 05

EBIT on sales

restated

8.7

7.8

9.79.8

0

2

4

6

8

10

12

1 H 03 1 H 04 1 H 04 1 H 05

EBIT on sales before non-recurring

restated

31


EBIT: currency impact

margin on sales

85

0

50

100

150

200

250

Nominal At constant

4

in millions of €

89 9.0%8.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

0 0 . 5 1 1 . 5 2 2 . 5

Nominal At constant

32


Share in the result of joint ventures and associates

19.9

25.9 25.927.7

0

10

20

30

1 H 03 1 H 04 1 H 04 1 H 05

in millions of €

restated

33


Consolidated net result

in millions of €

43.7

78.7

63.7*76.2*

0

25

50

75

100

125

150

1 H 03 1 H 04 1 H 04 1 H 05

15.0**

* from continuing operations** from discontinued operations

54.0**78.7

130.2

restated

34


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

35


Net debt to equity (gearing)

33.7

48.151.1

0

10

20

30

40

50

60

70

80

90

100

1 H 03 1 H 04 1 H 05

%

36


Capital expenditure

in millions of €

41

62

77

20

9

14

97

55

71

0

10

20

30

40

50

60

70

80

90

100

1 H 03 1 H 04 1 H 05


37


Depreciation and amortisation

60 61 57

20 18

18

19

52

0

10

20

30

40

50

60

70

80

90

100

1 H 03 1 H 04 1 H 04 1 H 05


in millions of €

80 79

70

restated

76

38


Working capital

486458

412

20.5

18.5

21.8

0

100

200

300

400

500

600

700

1 H 03 1 H 04 1 H 050

5

10

15

20

25

Working capital Average working capital on sales

% on salesin millions of €

39


Earnings per share

€

2.0

3.6

2.9*

3.5*

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1 H 03 1 H 04 1 H 04 1 H 05restated

*From continuing operations

40


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

41


Cash flow (net)

in millions of €

114

150

188

0

50

100

150

200

1 H 03 1 H 04 1 H 05

Cash flow

42


EBITDAin millions of €

131

167

127

143

0

50

100

150

200

1 H 03 1 H 04 1 H 04 1 H 05restated

43


EBITDA on sales

%

14.714.714.115.3

0.0

5.0

10.0

15.0

20.0

25.0

1 H 03 1 H 04 1 H 04 1 H 05restated

44


Content

Highlights

Sales


Profitability

Balance sheet

Cash flow

Outlook

45


Outlook

Challenging second half ahead:

Slowdown in incoming orders, due to weakening of economicenvironment

Sustainted uncertainty in raw materials’ markets

half year results 2005 - steel wire transformation and

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