How does Bekaert manage nowadays

Purchasing globally

Ton Geurts

CPO, Bekaert

June, 2015

Content

2

Bekaert overview

2014 results and way ahead

Purchasing KPI dashboard 2015

Integrated supply chains

Key Supplier Management

Sustainability/Ecovadis

One Bekaert moving forward

Consistent with our better together aspiration,

we relentlessly pursue to be the preferred supplier

for our steel wire products and solutions,

by continuously delivering superior value

to our customers around the world.

A One Bekaert team with the passion to

win, by delivering the best value adding

solutions for our customers in the most

cost effective way, and through that,

create value for our business.

1. Passion for excellence

2. Outside-in orientation

3. Agile innovation

4. Everyone a Bekaert leader

5. One Bekaert

1. Cut the crap

2. Build a winning business portfolio

3. Install manufacturing excellence

4. Create the highest value TC business in China

5. Be the global top of mind ropes solution provider

1. drive the customer into the heart of our business

2. value driven growth

3. Technology leadership and speed

4. leverage scale and reduce complexity

5. lowest total cost

Increase, within 3 years:

Revenue by 25%

Profit by 50%

ROCE by 100%

Our Vision - Our Field of Play

Goal statement for the Heart:

Our Mission

Our 5 Guiding Principles

Our 5 Core Strategies

Goal statement for the Head:

Our 25-50-100 plan

Our 5 urgent Must Win Battles

Integrity Trust Resilience

Our Values

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Sales by segment 2014

4

Combined sales per region and per sector 2014

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Our vision & 5 core strategies

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‘Field of Play’:

Consistent with our better together aspiration,

we relentlessly pursue to be the preferred supplier for our steel wire

products and solutions,

by continuously delivering superior value to our customers around the world

5 core strategies:

1. Drive customer into the heart of the business

2. Value driven growth

3. Technology leadership and speed

4. Leverage our scale to greater efforts – reduce complexity

5. Lowest total cost

Purchasing KPI Dashboard 2015

Financials Business impact: 1. Bottom line savings

(current Bekaert conventions X mln € to be aligned with

Bekaert Manufacturing System)

2. WC - payment terms + stocks (X miln € of free cash;/purchasing directive)

Enablers/operational: 1. Competitive edge/indices

2. On time delivery

Supplier Relation

1.Partnerships - Key supplier agreement (Wire Rod + selective other

categories; target: 65% of WW Wire Rod spend)

- Have aligned action plan for key suppliers (to be included

in way of working)

2. CSR - % Suppliers code of conduct (50% of the spend; TOP 10

suppliers for each category)

- Comply with GRI G4 guidelines (target: 100%

implementation of agreed actions by end 2015)

Processes

1. P2P efficiency (supported by the purchasing

policy) - PO coverage

- Contract/Catalogue coverage

2. Selective e-Sourcing and EDI

3. Optimal support BMS and Pirelli

People

1. Full transparency on authorization and R&R

2. Focused training curriculum

3. Well defined succession planning and execution

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We use PMO to facilitate KPI & process management

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PMO CPO

Proc. Controller

Category Mgr.

WR

Category Mgr.

Dies & Pack.

Category Mgr.

Trans. & Log.

Category Mgr.

RM

Category Mgr.

Corp. Serv.

Category Mgr.

OEM & CAPEX

Category Mgr.

IT & Telecom

Category Mgr.

Spools

Category Mgr.

Utilities

Frequency:

The PMO takes place 1 time per

month for each Category.

Roles:

The PMO is chaired by CPO

Category Managers report to the

PMO.

PMO Partners are Regional Purchase

Managers, and P2P Process

Manager.

PMO

Partners

PMO covered programs

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The PMO manages the process & performance management

including the following programs:

Savings

tracking

Efficiency

P2P

Corporate

Services

Systematic project management

Savings tracing towards annual target

Payment terms and process management

Efficiency optimization

Travel and consultancy spend reduction

Sustainability Code of conduct compliance

Ecovadis execution

Category

& Region

Category & Region specifics

(e.g. contract and supplier management etc.)

We use Monthly Report to track RM indices development

Key topics

1. Executive Summary

2. Raw material cost evaluation

3. Market price update (CRU)

4. Bekaert Wire rod price development

50

60

70

80

90

100

110

120

130

5/0

3/1

4

19

/03

/14

2/0

4/1

4

16

/04

/14

30

/04

/14

14

/05

/14

28

/05

/14

11

/06

/14

25

/06

/14

9/0

7/1

4

23

/07

/14

6/0

8/1

4

20

/08

/14

3/0

9/1

4

17

/09

/14

1/1

0/1

4

15

/10

/14

29

/10

/14

12

/11

/14

26

/11

/14

10

/12

/14

24

/12

/14

7/0

1/1

5

21

/01

/15

4/0

2/1

5

18

/02

/15

Low Price

High Price

As an example

Integrated supply chains (1/3)

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Procurement

Spend

€1.8 – 2 bln

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Integrated supply chains (2/3)

Raw

materials

Own

operations

Energy/resource benefits in

use

Cost savings

Reduced material

and energy use

Engaged

suppliers

Cost savings

Reduced energy

use

Engaged

employees

Improve revenue

and margin

Reduced material

and energy use

in customer

processes, and

application

Engaged

customers

Improve revenue and margin

Reduced material and

energy use in product use

Engage customers

and users

Business

Sustainability

Resource

efficiency

People

capability &

engagement

Foundations: HSE, product stewardship, employee practices, community involvement, Code of Conduct

Customer

operations

End

user

End

of life

Our commitment to the Global Reporting Initiative

Annual report 2013 – GRI 3.0

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Bekaert’s global Corporate Social Responsibility (CSR) strategy is centered on four main

pillars: our responsibility in the 1) workplace, in the 2) marketplace, towards the 3)

environment and towards (4) society. Our CSR efforts and activities are therefore focused in

such a way that balanced consideration is given to the interests of all respective

stakeholders, i.e. employees, customers, shareholders, partners, local governments and the

communities in which we are active.

Existing Spend

Expand current

Businesses

-commercialize running projects

- increase overall supply share

Improve Total Cost of

Ownership

- supply chain - financial &

transactional

- rationalization

Joint Innovation

- joint projects

- based on mutually agreed rules and principles

Foster Relationship - top management commitment and support

- mgmt exchange of all relevant functions

Partnership for mutual profitable growth

Key Supplier Management builds on 4 main pillars

Supply Continuity

✓Longer term agreements

✓Automatic provisions for growth

✓Product discontinuation guidelines

✓Two way toll manufacturing

Cutting Edge Technology

✓First look at new products.

✓Potential for exclusivity

✓Technical project management.

Joint projects, joint strategies

Price Management

✓Most Favored Nations Pricing.

All products, all regions

✓Meet or Release Clauses

for competitive threats

✓Adequate notification,

Minimum quarterly fixed prices

✓Single price list per region

Commission for Growth

✓ Above and beyond other regional or product

rebates/ commissions

✓ Rewards overall global growth

Working Capital Management

✓ Extended invoice terms

✓ Management of inventories.

✓Consignment

✓On line VMI

✓ Short Lead Times

Preferred Supplier

✓ Inclusion in new product development where

capabilities exist

✓ Senior Management meetings

✓ Active support in emerging markets

✓ Long term strategy development

Key Supplier Management contract conditions for Key Suppliers

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Bekaert Key Suppliers Agreement

Key Supplier Region

Moravia Europe

Saarstahl Europe

Posco NAS

Shagang NAS

XingCheng NAS

Georgetown NAM

Belgo NAM

GERDAU NAM

Keystone NAM

EVRAZ NAM

AM EU EMEA

Our mission on Sustainable Supply

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To integrate practical sustainability elements into our daily

commercial relationships in order to:

raise awareness

reduce risk

continuously improve the sustainability of our supply

chains

deliver on our promises

for the benefit of our customers, employees, shareholders,

communities and the environment.

Supplier Sustainability Framework 2015

Bekaert Supplier Sustainability Compass

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Values and Principles: Our foundation for sustainable sourcing

- Code of Conduct - Safety, Integrity, Sustainability

Processes: Builds capability & capacity; Supports meaningful supplier development & risk reduction

1. Code of conduct

2. Auditing

Mission: An engaged and continuously improving supply chain

- Measurable supplier development and delivery

Vision: Sustainable Integrated Supply Chains

Sustainable

Supply

Mission Measurable

Developme

nt

Delivery

Values Integrity

Trust

Resilience

Code of

Conduct

Process 1

Code of

Conduct

Process 2

Ecovadis

Auditing

Ecovadis

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Ecovadis solution addresses Sustainability issues by providing web-based

collaboration tools for buyers and suppliers, which allows purchasing executives to

get access to easy-to-use dynamic scorecards, and to monitor the Sustainability

performance of their suppliers as well as their continuous improvement actions.

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Thank you very much!

www.bekaert.com

better together