Dear reader,
2017 was a year of solid growth for Bekaert. We achieved more than 10% sales growth, exceeding the € 4 billion consolidated sales mark for the first time in history.
Our robust organic growth exceeded the market averages in our industry as well as overall GDP growth. Moreover, our growth was value creating with ROIC well above WACC in 2017.
We achieved solid results in EMEA and continued margin improvement in North America. Our margins in the other segments were lower than last year due to various adverse mix effects. Underlying EBIT decreased 1% to € 301 million, representing a margin on sales of 7.3%. Our underlying EBITDA totaled € 497 million at a margin of 12.1%. Bottom-line, the net result attributable to the Group increased by 76% to € 185 million, resulting in EPS of € 3.26.
We have been going through a major transformation over the past years and it is not easy to assess the transformation impact from one single year’s results, but when looking back, it becomes clear just how much has changed. The worldwide participation of our employees in Bekaert‘s global transformation towards higher performance has added to the collective strength of our company. Our teams feel engaged and empowered to always do better and push our shared ambitions to greater heights. Our transformation journey will continue to build from what we have been achieving.
We recognize that the same factors that affected our performance at some point last year will continue to weigh on our margins in 2018. However, we are confident we will improve our profitability during the year and we know what to do in order to make progress.
- We expect to continue improving the pass-through of wire rod price increases, without adversely affecting our sales volumes, and this should help improve margins.
- We have made a breakthrough in the development of fixed abrasive sawing wire and expect to be delivering a positive contribution as from the second half of 2018 onwards.
- Bridon-Bekaert Ropes Group has started to roll out the same transformation tools that we have implemented successfully within Bekaert, to help create a turnaround of the ropes business.
- The global transformational programs supporting our vision and strategies are expected to gain further ground. They include our manufacturing excellence program aimed at gaining competitiveness by improving the company’s safety, quality, delivery performance and productivity, our customer excellence program to drive growth and margin performance; our supply chain excellence program to improve our planning and inventory management capability; our global safety program to enhance our safety performance and culture; and the newly added Fit for Growth program aimed at driving functional excellence and capability throughout Bekaert.
- In addition, we will start to see some benefits from the ongoing expansion and cost improvement investments.
That is why we are confident we will improve our profitability progressively during the year to achieve the same profitability level of 2017. We continue to believe that the improvements we are making throughout our business will allow us to move towards a 10% underlying EBIT margin over the medium term.
We conduct and grow our business in a sustainable way so that our stakeholders all benefit. An important component of delivering value to our shareholders and earning their trust over the long term is returning capital in a consistent and transparent way. Based upon the financial performance of 2017 and the confidence in the set direction, the Board of Directors has decided to propose, to the General Meeting of Shareholders in May of 2018, a gross dividend of € 1.10 per share.
We want to thank our customers, partners and shareholders for their continued trust. And we want to thank our employees for their commitment, energy and irrepressible drive to always improve our capability, as One Bekaert team.