Bekaert Investor Presentation

Bekaert Investor PresentationMost recent announcement:

Q1 2020 Trading update + COVID-19 update – 13 May 2020

SEGMENT PERFORMANCE

Content

2 Investor presentation - Bekaert

BEKAERT IN BRIEF

BUSINESS UPDATE1Q2020 priorities and highlights

Market developments first quarter 2020Update on COVID-19

Working capital, Liquidity, outlookProfitability: journey and ambition

FINANCIALS FY2019 / FY2018

OTHER Product and Market PortfolioContact information

INVESTMENT CASEFact Sheet

Market and technological LeadershipCore Competencies

Global PresenceOur History

Investing in BekaertStrategy - Blue SlideSustainabilityShareholder ValueDividend policy

2019 performance2019 EBIT bridge and segment reporting Income statement Key figures Cash flow and working capital Balance sheet, ratio’s, debt

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Segmentation and sectorial breakdownLeadership team

1Q2020 Sales

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Bekaert in brief


Founded in 1880 by Leo Leander Bekaert

The world’s largest independent producer of steel wire products and solutions

Serving customers from a very wide range of industry sectors in 120 countries and operating a global manufacturing platform with 28 000 employees worldwide

Combined sales of € 5.1 billion and consolidated sales of€ 4.3 billion (2019)

Listed on Euronext® Brussels

Often hidden or unknown… but always there…

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About 30% of all tires around the world are reinforced with Bekaert tire cord

Every year, 10 million m³ of concrete is being reinforced with Dramix®

steel fibers invented by Bekaert

Every year over 1 billion bottles of sparkling wines are opened via the muselet made of Bekaert steel wire

Bekaert’s customers annually use 3.5 million kilometer of bookbinding wire

Investor presentation - Bekaert

Bekaert market leadership in diverse sectors – combined sales (FY2019)

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Bekaert has a strong presence in diverse sectors. This makes Bekaert less sensitive to sector-specific trends and it also benefits our customers, because solutions we develop for customers in one sector often form the basis of innovations in others.

6% Equipment

8% Agriculture

46% Tire & Automotive

7% Basic materials

18% Construction

7% Consumer goods

8% Energy & utilities


Bekaert technological leadership

7

€ 62 million in-house R&D in 2019

International R&D teams in Belgium – China – India

About 1800patent rights

Co-creation with customers and suppliers

Outward orientation• internationalization of technologists • cooperation with internationally renowned

research centers & universities• venture capital and R&D partnerships

Intellectual property protection


Bekaert core competencies

8

from wire rod6.5 mm

drawing, bunching, cabling, profiling, welding,

knitting, weaving…

to metal fibers1 µm

from traditional coatings

adhesioncorrosion resistance

wear resistanceanti-fouling

to advanced coatings

steel wire transformation

coating technologies


Bekaert global presence

9

Bekaert production plantsBekaert officesBekaert Technology CentersBBRG production & distribution sites

History

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pioneering transforminginnovating growing diversifying BRIC

1880Leo Leander Bekaert starts a small business in barbed wire in Zwevegem, Belgium

1922First investment abroad: Tréfileries de Bourbourg, France

1948First investments in Latin America: Argentina and Chile

1952Steel cord production start

1964Establishment of R&D center in Deerlijk, Belgium

1965Start-up of Engineering facility for machine design and manufacture

Early 1970sNew steel cord plant openings and expansions in US, Brazil, Belgium, Japan

1972Listing on the Brussels stock exchange to fund continued growth

1975-1977Establishment of JVs in Ecuador and Brazil

Early 1980sBekaert moves into composite materials, non-ferrous forged products, vacuum coatings and filtration

1988New plant openings in Shelbyville and Rogers, US

1990Bekaert has become a truly international company with 15000 employees worldwide

1993Bekaert recognizes China’s huge market potential and builds a first steel cord plantin Jiangyin, Jiangsu Province

Mid 90sInvestments and expansions in Brazil, India, Indonesia, China, Peru and Chile

2000-2010Strong growth in China, Central Europe, and start-up production in Russia

2010-2018The ups and downs in sawing wire market conditions significantly impact Bekaert’s results

2014Matthew Taylor is appointed the new CEO. He drives transformation throughout the business

2014-2016Bekaert concludes its largest acquisition (Pirelli) and merger (Bridon) ever.


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Segmentation and sectorial breakdown (consolidated sales)

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Rubber Reinforcement (RR) Steel Wire Solutions (SWS) Specialty Businesses (SB) Bridon-Bekaert Ropes Group (BBRG)

Tire cord, bead wire, hose reinforcement wire and

conveyor belt reinforcement

Steel wire products and solutions serving industrial, agricultural, consumer and

construction markets

Building products, fiber technologies, combustion

technology and sawing wireRopes and advanced

cords businesses

95%

5%

31%

18%16%

11%

12%

7%4% 1%

31%16%16%14%11%6%Construction Agriculture Consumer Goods Tire & Automotive Energy & Utilities Basic Materials Equipment Other

69%

11%

9%

8%2%

31%

29%

19%

13%

8%


Executive Leadership team

13

Four Business Units:


Divisional CEO Steel Wire Solutions

Stijn Vanneste

Divisional CEO Rubber Reinforcement

Arnaud Lesschaeve

Divisional CEO Specialty Businesses

Jun Liao

Divisional CEO Bridon-Bekaert Ropes Group

Curd Vandekerckhove

Chief Strategy Officer

Juan Carlos Alonso

Chief Financial Officer Chief HR Officer

Rajita D’Souza

Four Global Functional Domains:

Taoufiq Boussaid

CEO ad interim

Oswald Schmid

Chief Operations Officer

Oswald Schmid

First Quarter 2020 Sales

Investor presentation - Bekaert14

Consolidated sales 2019 2020 Share Variance Organic FX

Rubber Reinforcement 502 417 43% -17% -18% +1%

Steel Wire Solutions 376 345 35% -8% -6% -3%

Specialty Businesses 97 98 10% +1% +1% -

BBRG 117 115 12% -2% -1% -1%

Group 2 2 - - - -

Total 1 094 977 100% -11% -10% -1%

Combined sales 1 294 1 154 100% -11% -8% -3%

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Bekaert’s priorities in the first quarter of 2020


Stabilization priorities on liquidity and profitability to mitigate as far as possible the impact of the pandemic on our business. This includes rigorous control of working capital, capital expenditure, and cost as well as measures to increase liquidity.

Another priority is to stay in close contact with our customers, so we understand their current and projected needs and can adjust our supply chain decisions and actions in an agile way. Bekaert’s global supply network has been extremely helpful in securing the availability of raw material, auxiliaries and Personal Protection Equipment in all sites worldwide.

The first and foremost priority is to continue safeguarding the health and safety of our peopleand their families.

Strong Q1 performance positions Bekaert well to confront the crisisSafe working conditions – customer centricity – strong cash liquidity

Sales

-11%

Highlights first quarter 2020

• Comprehensive measures to safeguard employees, with a limited number of Covid-19 infections• Sales down -11% due to government-mandated lockdowns and global tire & automotive demand decline• Effective cost reduction measures in place• Liquidity more than € 190 million up on year-end 2019 to over € 750 million euro• Debt leverage stable from year-end 2019 at 2.1x underlying EBITDA• Gross dividend reduction to € 0.35 with payment postponed to 20 November 2020

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Liquidity

€ +190 mln

Debt leverage

stable

Dividend

reduced

€ 0.35

Health

Few Covidinfections

Cost

reduction


Market developments in the first quarter of 2020

• Demand from tire and automotive markets• hit hard in China due to the outbreak of Covid-19, with a rebound in domestic sales in March. Increasing impact

on export-oriented Chinese tire makers. • severely affected in the rest of the world:

‒ 25% drop in car production‒ reduced road traffic due to lockdowns and homeworking‒ large-scale temporary plant shutdowns in the tire and automotive industry, particularly in Europe and in the US

• Construction markets• held up relatively well in the first quarter of 2020, with the exception of:• some delays in reopening construction sites• effects of government-mandated lockdowns in Latin America

• Demand from agriculture, utility, and mining markets• strong across the quarter• currently appear to be less affected by the Covid-19 pandemic


Impact of Covid-19 on the Bekaert operations in Q1 2020: 3 February 2020

19

Closed on government decision Partially operational (below 80% utilization)

Closed on company decision Fully operational (above 80% utilization)


Impact of Covid-19 on the Bekaert operations in Q1 2020: 31 March 2020

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Closed on government decision Partially operational (below 80% utilization)

Closed on company decision Fully operational (above 80% utilization)


COVID-19: 8 work streams in our approach


Governance& Coordination

Sales & OperationsPlanning

Procurement

Emerging fromthe Crisis

Communication Way of Workingin the New Normal

Liquidity Mgt& Cost Actions

Health & Safety

Working capital: key figures 31 March 2020 vs previous reporting periods

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(in mio €) March 2019 Year-end 2019 March 2020

Inventories 970 783 785

Accounts receivable 939 721 696

Accounts payable (853) (805) (747)

Working capital 1 055 699 734


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Liquidity position and balance sheet structure: result of 2019 and Q1 2020 actions

Actions 2019:

• significant delivery in reducing costs• effective restructuring measures • successful profit restoration programs• tight control on working capital and CAPEX

Result of 2019 actions:

Margin improvement net debt on underlying EBITDA of 2.1 Average working capital on sales of 18.2%

Additional actions 2020:

• dividend reduction to € 0.35 gross • 2020 Board fee reduction by 10%• temporary salary reduction by 10% for the Executive

and Senior leadership team • temporary reduction of working hours worldwide • Drawdown of € 190 million on committed credit lines

Result of our actions:

€ 750 million immediate cash-on-hand net debt on underlying EBITDA of 2.1 Average working capital on sales of 18.4%


Outlook

• We project Q2 sales to markedly decline in different sectors that are relevant to us. While the magnitude of the impact of the Covid-19 pandemic on the global economy has become visible, its duration remains highly uncertain. We therefore have no visibility on a full-year impact in our markets and on our business.

• Bekaert continues to apply strict control on costs, working capital and capital expenditure.

• The actions implemented in 2019 and in the first quarter of 2020 have made us stronger and more resilient to cope with severe challenges. We are convinced that our strong liquidity position, combined with other measures we have implemented and continue to implement, puts us in the right position to weather the crisis.


The Bekaert journey since 2013 + Our Ambition


Pirelli Tire Cord acquisition Q4 ´14Portfolio optimization: exit stainless, carding, Xinyu ChinaBetter market position in RR ChinaTire cord India and SEAS picking upSawing wire 2nd generation Manufacturing excellence program

Automotive demand strong on a global scaleBetter market position in Tire cord China

And growth in Asian Tire Cord markets Customer excellence program

Bridon added as from H2 16

NegativeBridon for full year (still below average margin)Sumaré : integration in JV Brazil (45% BEK)Fast changing raw materials prices & pricing dynamics

Positive :Automotive/Construction remain strongTransformation programs

Negative :Trade war, Brexit, …Inventory valuation impact of steep decline in wire rod pricesSoftening OEM tire cord markets in H2Lower demand in agricultural, industrial and automotivePositive :Pricing and mix improvement in BBRG & Building ProductsMarket share and volume growth in Tire Cord ChinaProfit restoration in weaker business areasManufacturing cost & overhead cost savingsReduced losses in sawing wire business

= Underlying EBIT-margin

2018

8,2%

2016

2013 2014

2015

6,3%

5,1%5,2%

7,3%

2017

Negative:Volatility of wire rod prices and inflationary costsUncertainty related to US trade policy changes and BrexitDifficult business climate in Latin AmericaVery limited demand for our sawing wireStart-up issues in expansion projectsUnfavorable one-time effects in BBRGDivestment of Sumaré in Brazil and SolaronicsPositive:Growth and strengthening position in automotiveImpact of transformation programsBenefits of ongoing expansion investments

4,9%

7%

5,6%

2019

2020Downsides:Impact of Covid-19Political & economic uncertainty + trade warCompetitive landscapeCyclicality in demand end-marketsUpsides:Benefits from restructurings of 2019Benefits of turnaround actionsHigher tire rim sizesContinued pricing discipline & mix improvementBBRG/SWS profit restoration actionsEnvironmental regulationsGrowth & innovation opportunities

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Investing in Bekaert is taking part in

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The growth ambitions of a world market and technology leader in steel wire transformation and coating technologies

Value creation driven by our vision and core strategies

A growth traject to achieving above 7% underlying EBIT margin over the medium term and a continued ambition to move towards 10%

A corporate socially responsible company with approximately 28000 employees worldwide

A stocklisted (Euronext BEKB) multinational attaching great value to corporate governance

Bekaert’s commitment to return value to its shareholders



Business portfolio changes Bekaert


2012 20142013

Acqu

isiti

ons

Div

estm

ents

Industrial coatings

Steel wire entities China

Wire/RopesMalaysia

BIA AlambresCosta Rica

Cimaf CabosCables

Advanced Filtration

Pirellisteel cord

2015

Arrium RopesAustralia

Carding-solutions

StainlessSteel Wires

2016

Wire Latamconsolidation

Bridonmerger

BOSFA

MatcoCablesBJWP JiangyinSouthern Wire MalaysiaSBE Shanghai

Xinyu entities

M&A / Exit

Change in shareholding

Shah AlamMalaysia

2017

Chongqing China

SumaréBrazil

HuizhouChina

2018

BBRG100%

Solaronics

2019

BMUS100%

Agro50%

2020

Slatina100%

Bekaert’s ambitions and actions for a sustainable future

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OUR AMBITION“We conduct and grow our business in a sustainable wayso that our employees, customers, shareholders, business partners, and communities all benefit”

OUR ACTIONSPillars and actions to step up our sustainability performance.

1 2 3 4 5


Bekaert’s ambitions and actions for a sustainable future

31

12

34

5

ECONOMIC VALUEWe generate economic value throughemployment, investments, dividends, and payments to capital providers and governments.

OUR PEOPLEAs a company and as individuals, we act with integrity and commit to the highest standards of business ethics. We promote equal opportunity, foster diversity and we create a no-harm-to-anyone work environment across our organization.

OUR MARKETSWe promote and apply responsible and sustainable business practices in all our business and community relationships. Our sourcing and innovation programs enhance sustainability throughout the value chain.

THE ENVIRONMENTWe care for the climate and promote a circular economy: we develop and install manufacturing equipment that reduces energy consumption and optimizes recycling. We use renewable energy sources wherever possible and avoid the discharge of untreated effluents and waste.

SOCIETYWe support and develop initiatives that help improve the social conditions in the communities where we are active. Education programs form the backbone of our social funding and other community-building actions.


How do we put our ambitions into action? OUR PROCESS

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For each pillar of sustainability, we formulate a vision statement: it is an expression of our ambition; of what we want to be.Derived from that, we determine measurable targets, and we monitor and report our performance against those targets. Our reporting scope and results are validated by globally recognized standards and labels.

VISION STATEMENT

TARGET SETTING

MONITOR / REPORT

IMPROVE / ACHIEVE

SHORT-TERM +

MID-TERM KPI

PROGRESS EVIDENCE AND

VALIDATION

12

34

5


Shareholder value creation

33

-10

-5

0

5

10

15

20

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Shareholder value Shareholder destruction WACC RoIC


Dividend policy

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It is the policy of the Board of Directors to propose a profit appropriation to the General Meeting of Shareholders which, insofar as the profit permits, provides a stable or growing dividend while maintaining an adequate level of cash flow in thecompany for investment and self-financing in order to support growth. In practice, this means that the company seeks to maintain a pay-out ratio of around 40% of the result for the period attributable to equity holders of Bekaert, over the longer term.

40%

44.5%

0%

20%

40%

60%

80%

-

100

200

300

400

2009 2010 2011 2013 2014 2015 2016 2017 2018 2019

Result Attributable to the Group Dividend pay-outPay-out policy over the years Average pay-out % over the years

In m

illion

s of

€

Pay-out ratio

In view of all measures taken by Bekaert to mitigate, as far as possible, the impact of the Covid-19 pandemic on the Group’s profitability and liquidity, the Annual General Meeting approved to halve the initially proposed dividend to 35 eurocent and to postpone the dividend payment to November 2020.


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2019 Sales

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Consolidated third party sales 2018 2019 Share Variance Organic FX

Rubber Reinforcement 1 908 1 953 45% +2% +1% +2%

Steel Wire Solutions 1 497 1 448 34% -3% -4% +1%

Specialty Businesses 411 414 10% +1% = +1%

BBRG 463 489 11% +5% +4% +1%

Group 26 19 - - - -

Total 4 305 4 322 100% +0.4% -0.7% +1.3%

Combined third party sales 5 074 5 132 +1.1% +0.5% +0.7%


2019 Financial Highlights Improvement Actions and Results

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2018 2019 Δ yoy %

Sales 4 305 4 322 +17 +0.4%

EBITDA-underlying 426 468 +42 +9.9%

EBIT-underlying 210 242 +32 +15.1%

One-off items (63) (87) -24 37.4%

Result of the period 3 48 +45 -

% EBITDA-underlying 9.9% 10.8% 0.9pp +9.1%

% EBIT-underlying 4.9% 5.6% 0.7pp +14.7%

% ROCE-Underlying 8.0% 9.5% 1.5pp +18.8%

Working Capital 875 699 -176 -20.1%

Net Financial Debt 1 153 977 -176 -15.3%

Change in Working Capital (13) (176) -163 -

Net debt on EBITDA-underlying 2.7 2.1 -22.2%

CAPEX (PP&E) 198 98 -100 -50.5%

• Market share increase RR China• Better pricing• Improved mix from better segmentation

• Cost savings from manufacturing excellence programs

• Organizational efficiencies from deployingnew organizational structure

• Turnaround and restructuring programs• Overhead reduction • Less interest expenses from refinancing

• Strong reduction working capital• Stringent CAPEX control• Net debt / underlying EBITDA at 2.1


EBIT-Underlying bridge: by result driver


EBIT-Underlying bridge: by Business Unit


Segment reporting: BU Rubber Reinforcement

40

(in mio €)

2018 2019 H1 2019 H2 2019 2018 2019

Consolidated third party sales 1 908 1 953 1 014 939 1 908 1 953

Consolidated sales 1 939 1 986 1 031 955 1 939 1 986

Gross profit 238 232 126 107 210 215

EBIT 177 172 94 78 152 155

EBIT margin 9.1% 8.7% 9.1% 8.2% 7.9% 7.8%

EBITDA 305 295 157 137 280 286

ROCE 12.9% 13.2% 11.1% 11.9%

ReportedUnderlying

• The rubber reinforcement business achieved 2.4% consolidated sales growth, driven by higher volumes. The effect of passed-on wire rod price decreases (-1.8%) was entirely offset by favorable currency movements.

• Strong sales increase in China, driven by 10% volume growth from increased market share and strong demand, particularly in H1. Sales were about stable in EMEA and North America, but fell short in India and Indonesia.

• Significant wire rod price decreases led to inventory valuation corrections that drove gross profit and EBIT downGross profit improved across Asia but declined in EMEA and in North-America.Underlying EBIT decreased by € -4.6 million, resulting in a margin on sales of 8.7%.

• The difference between Underlying and Reported is due to one-off elements. Full disclosure of one-offs: cf page 39.


Segment reporting: BU Steel Wire Solutions

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(in mio €)

2018 2019 H1 2019 H2 2019 2018 2019

Consolidated third party sales 1 497 1 448 751 697 1 497 1 448

Consolidated sales 1 555 1 491 778 714 1 555 1 491

Gross profit 169 164 82 82 162 142

EBIT 57 51 28 23 59 25

EBIT margin 3.7% 3.4% 3.5% 3.2% 3.8% 1.7%

EBITDA 103 106 55 51 108 93

ROCE 8.5% 7.9% 8.8% 3.9%

ReportedUnderlying

• Steel Wire Solutions reported a sales decrease of -3.3%. The positive effects of price-mix (+3.7%) and currency movements (+0.8%) partially offset the impact from passed-on wire rod price decreases (-2.6%) and lower volumes (-5.2%).

• Sales volumes declined in all regions except in China and India where robust growth was achieved.

• Significant wire rod price decreases led to inventory valuation corrections that drove gross profit and EBIT down. Underlying EBIT decreased by € -6.5 million versus last year.

• Plant closures were announced in Q4 to improve the business portfolio (Shelbyville (US) + Ipoh (Malaysia)). • The difference between Underlying and Reported is due to one-off elements. Full disclosure of one-offs: cf page 39.


Segment reporting: BU Specialty Businesses

42

(in mio €)

2018 2019 H1 2019 H2 2019 2018 2019

Consolidated third party sales 411 414 202 212 411 414

Consolidated sales 425 426 208 218 425 426

Gross profit 98 120 60 60 82 105

EBIT 26 52 25 27 -33 34

EBIT margin 6.0% 12.2% 12.0% 12.4% (7.9%) 8.0%

EBITDA 48 67 33 34 43 51

ROCE 11.4% 22.4% (14.8%) 14.6%

ReportedUnderlying

• Specialty Businesses reported about stable sales (+0.8%), with significant differences between the respective activity platforms.

• Building products achieved +6% sales growth driven by strong volumes and a positive price mix.Fiber technologies reported stable sales. The combustion (heating) business ended the year 4% below last year’s performance and sales of (diamond) sawing wire were limited.

• Underlying EBIT increased by € +26.4 million, resulting from strong growth in building products and less loss in the sawing wire business, partially offset by the lower profitability in the combustion technology business. Altogether the Business Unit doubled its underlying EBIT margin and ROCE for the year, and repeated its strong H1 throughout the year.



Segment reporting: BU Bridon-Bekaert Ropes Group (BBRG)

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(in mio €)

2018 2019 H1 2019 H2 2019 2018 2019

Consolidated third party sales 463 489 242 246 463 489

Consolidated sales 466 491 244 247 466 491

Gross profit 60 73 41 31 53 72

EBIT -7 12 6 6 -20 9

EBIT margin (1.5%) 2.4% 2.6% 2.3% (4.3%) 1.9%

EBITDA 22 44 19 25 16 40

ROCE (1.5%) 2.5% (4.4%) 1.9%

ReportedUnderlying

• BBRG reported 5.5% higher sales which stemmed from solid organic growth (+4.2%) and favorable currency movements (+1.2%).

- The ropes activities made significant progress in enhancing the business mix by focusing on quality business and by reducing their presence in lower margin segments. This strategy accounted for a volume decrease of -8%, while increasing revenues and margins.

- A-cords activities saw continued strong demand in timing belt markets and an uplift in hoisting applications in the second half of the year.

• Underlying EBIT improved by € +18.8 million, mainly from the performance improvement in ropes.Underlying EBITDA doubled to € 44 million, reaching a margin of 9.0%.

• Difference between Underlying and Reported: cf one-off elements summarized on slide 39.


Consolidated income statement: key figures

44

(in mio €)

2018 2019 2018 2019

Sales 4 305 4 322 4 305 4 322

Cost of sales -3 720 -3 734 -3 779 -3 795

Gross profit 585 588 527 527

Underlying Reported

• Sales increased by 0.4 %

• -1.2 % organic volume decline• +2.4 % better price-mix• -2.0% passed-on changes in wire rod prices• -0.1 % less sales from the divestment of Solaronics SA (July 2018)• +1.3 % favorable impact of exchange rate movements

• Underlying Gross profit increased by € +3 million (+0.5 %) resulting in a margin on sales of 13.6% - Performance improvements in the Business Units contributed € +75 million extra Gross Profit (profit restoration, mix, pricing, OPEX, ..)- Inventory valuation corrections deducted € -59 million- The improvement was cancelled out by the gross profit decline (€ -16 million) in Bekaert Engineering (weak activity in 2019). - Favorable impact from exchange rates (€ +5 million)- Adverse impact from Solaronics divestment (€ -2 million)




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• Overheads decreased by € -27.5 million, a reduction to 8.4% as a percentage on sales (9.1% at YE 2018 ; 8.6% at 1H 2019)Main reasons:

- lower spend in consultancy - lower personnel cost from restructuring measures taken in 2018

• Underlying EBIT improved by € +31.8 million to € 241.9 million.• Underlying EBIT margin to 5.6% (4.9% for FY 2018 ; 5.7% for 1H 2019).


(in mio €)

2018 2019 2018 2019

Gross profit 585 588 527 527

Selling expenses -178 -183 -180 -189

Administrative expenses -149 -118 -167 -128

R&D expenses -64 -62 -65 -71

Other operating revenue and expenses 16 17 33 15

EBIT 210 242 147 155

ReportedUnderlying



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(in mio €)

2018 2019 2018 2019

EBIT 210 242 147 155

EBIT margin 4.9% 5.6% 3.4% 3.6%

EBITDA 426 468 387 403

EBITDA margin 9.9% 10.8% 9.0% 9.3%

ROCE 8.0% 9.5% 5.6% 6.1%

Underlying Reported

• Improvement in EBIT, EBITDA and ROCE



Consolidated income statement: one-off items

47

2019:• € -87 million one-off items:

- € -82.4 million related to restructuring - € -4.4 million from losses incurred as a result of go-slow actions in a number

of sites, partly offset by positive depreciation adjustments in BBRG• Main elements in one-off costs:

- RR: Rome (US, relocation)- SWS: plant closures Ipoh (Malaysia) and Shelbyville (US)- SB: Dramix plant closures in Costa Rica and Belgium- BBRG: restructuring programs in EMEA- Lay-offs in Group functions (mainly Belgium)

• No one-off revenues in 2019

(in mio €) 2018 2019

EBIT - Underlying 210 242

Restructuring programs (62) (82)

(25) (15)

2 (23)

(18) (16)

(13) (5)

(8) (23)

Other (1) (4)

EBIT 147 155

Group

Rubber Reinforcement

Steel Wire Solutions

Specialty Businesses

Bridon-Bekaert Ropes Group (BBRG)

2018:• € -63 million one-off items:

- € -62 million from restructuring programs and € -1 million other- net effect of € -108 million one-off costs and € +45 million one-off revenues

• Main elements in one-off costs: - RR: Figline (Italy plant closure)- SWS: restructurings in Latin America and Shah Alam Malaysia- SB: asset impairments sawing wire + closure of Dramix plant in Costa Rica- BBRG: expenses turnaround program and restructuring Brazil

• Main elements in one-off revenues:- RR: the gain on the sale of land and buildings of Huizhou (China) - SWS: the gain on the sale of land and buildings in Shah Alam (Malaysia)



48

(in mio €) 2018 2019

EBIT 147 155

Interest income / expense (85) (66)

Other financial income and expenses (26) (18)

Result before taxes 36 70

Income taxes (58) (51)

Result after taxes (consolidated companies) (22) 19

• Net interest expenses significantly declined since the refinancing of the BBRG debt (mid October 2018). Partly offset by the interest impact from introducing IFRS 16 (Leases): € -3.6 million.

• Other financial result was less negative. The results in 2019 included the fair value of a Virtual Power Purchase Agreement(€ +2.5 million). The result in 2018 included, amongst other, expenses related to the refinancing and partner buy-out at BBRG, partly offset by a drop in fair value of the option embedded in the convertible bond.

• Income tax expense. As a consequence of the significant amount of one-off expenses, the overall Effective Tax Rate (ETR) was 72.6%. The effective tax rate for all of the profit making entities further decreased from 20.0% to 16.5%.



49

(in mio €) 2018 2019

Result after taxes (consolidated companies) (22) 19

Share in the results of joint ventures and associates 25 29

Result for the period 3 48

Attributable to non-controlling interests (37) 7

Attributable to equity holders of Bekaert 40 41

• The share in the results of joint ventures and associates reflects the better performance in Brazil, both in the rubber reinforcement and in the steel wire activities.

• Results attributable to non-controlling interests no longer include the result attributed to BBRG’s former minority partner (€ - 37.4 million in 2018) since the buy-out of OTPP in October 2018). Moreover, the non-fully-owned companies in Chile and China improved their profitability in 2019.


Cash flow: key figures

50

(in mio €) 2018 2019

Gross cash flows from operating activities 279 342

Cash flows from operating activities 244 524

Cash flows from investment activities (102) (91)

Cash flows from financing activities (157) (269)

Very strong cash flow generation:

• Cash flows from operating activities amounted to € +524 million (versus € +244 million in 2018) as a result of higher cash generation and a reduction in cash-outs to fund working capital by tight inventory control, significant efforts done in collecting outstanding receivables, and extended use of off-balance sheet factoring.

• Cash flow attributable to investing activities amounted to € -91 million (versus € -102 million in 2018): cash-out from capital expenditure was substantially lower in 2019 (PP&E + Intangible Fixed Assets: € -99 million versus € -185 million last year). The 2019 cash-out from investing activities additionally included the payment related to the land use right in Vietnam (€ -13 million). The 2018 cash flow included the cash from the sale of land and buildings in China and Malaysia (€ +56 million).

• Cash flows from financing activities totaled € -269 million, compared with € -157 million last year. The cash-in from the Schuldschein (€ 320.5 million) and the retail bond (€ 200 million) was used to repay the bridge loan (€ 410 million) and the retail bond that matured in December 2019 (€ 195 million).


Working capital: key figures

51

• We strongly reduced the Working Capital with effective and tangible improvement actions:

• Working Capital decreased by € -176 million versus year-end 2018: the result of lower outstanding trade receivables and lower inventory levels, partially offset by lower trade payables.

- Tight inventory control brought inventories down by € -149 million.

- Accounts Receivable decreased by € -130 million thanks to successful cash collection efforts and increased use of off-balance sheet factoring (€ +48 million to € 121 million at year-end 2019 versus € 73 million at year-end 2018).

- Accounts Payable decreased by € -103 million due to lower (CAPEX & other) spend > lower payable balances at YE.

• Average working capital on sales was 18.2% (down from 20.4% in 2018). Working capital on sales was 16.2% at the close of the year, a record low in the last 25 years.

(in mio €) 2018 2019

Inventories 932 783

Accounts receivable 851 721

Accounts payable (908) (805)

Working capital 875 699


Consolidated balance sheet: key figures

52

(in mio €) 2018 2019

Non-current assets 2 050 2 048

Current assets 2 400 2 257

Total assets 4 449 4 305

Equity 1 516 1 532

Non-current liabilities 907 1 367

Current liabilities 2 027 1 406

Total equity and liabilities 4 449 4 305

• Main change: shift from current to non-current liabilities due to debt refinancing with maturity spread.


Ratios: key figures

53

• As per introduction of IFRS 16 (Leases), € 83.5 million additional net debt was recognized.

• Improvement of Underlying EBITDA following IFRS 16: € 25.1 million.

• Impact IFRS 16 on Net Debt to EBITDA (underlying): would have been 2.0 instead of 2.1.

2018 2019 2018 2019

Gross profit margin 13.6% 13.6% 12.2% 12.2%EBITDA margin 9.9% 10.8% 9.0% 9.3%EBIT margin 4.9% 5.6% 3.4% 3.6%Sales on capital employed (asset rotation) 1.6 1.7 1.6 1.7 Return on capital employed (ROCE) 8.0% 9.5% 5.6% 6.1%Return on equity (ROE) 0.2% 3.2%

(in mio €) 2018 2019

Net financial debt 1 153 977

Gearing (net debt to equity) 76.0% 63.8%

Net debt on EBITDA (underlying) 2.7 2.1

Net debt on EBITDA (reported) 3.0 2.4

Underlying Reported


Key figures per share

54

(in €) 2018 2019

Share price 21.06 26.50

Number of existing shares 60 408 441 60 408 441

Book value 23.12 23.76

Earnings per share (EPS) 0.70 0.73

Weighted average number of shares 56 453 134 56 514 831


Debt maturity table


-800-700-600-500-400-300-200-100

0100200300400500

2020 2021 2022 2023 2024 2025 2026 2027

Milli

ons

Retail bond Convertible LT ST Schuldschein EIB-loan Cash

1151

1153

977

986

2.3

2.7

2.1 2.1

0

0.5

1

1.5

2

2.5

3

0

200

400

600

800

1000

1200

2017 2018 2019 1Q 2020

Net debt Net debt/EBITDA-Underlying

Net debt and leverage evolution


In millions of €

SEGMENT PERFORMANCE

Content


BEKAERT IN BRIEF











4689

10

121314

1618192225

2728303334

3638445052

5865


1Q2020 Sales

Tire & Automotive (46%)

58

In the tire & automotive sector, we set ourselves apart by consistently creating high-quality and innovative products that are tailored to our customers’ needs. We supply specialized wire products that meet the highest quality standards.

• tire cord • clutch spring wire• bead wire • wheel weights• wires for windscreen wiper arms and blades • steering column profiles• wires and cables for window systems • insulation wire and fiber yarns for car seat heating• heating cord • conductive yarns in tires• heating cables for SCR tubes and tanks • metal fiber media for exhaust filtration, etc.

Construction (18%)

59

By offering wire, mesh and fiber products in numerous construction applications, we seek out more environment-friendly solutions with a focus on better materials, greater safety, improved ease-of-use and lower energy consumption, all with an eye on cost-efficiency.

• Dramix® steel fibers for concrete reinforcement • gabions• Stucanet® plaster lath • steel strands for cable stay bridges• Mesh Track® and Fortifix® road reinforcement • prestressed concrete strands• Murfor® and Murfor® Compact masonry reinforcement • post-tensioning strands• wires and cables for hoisting applications • environmentally friendly gas burners• a-cords for elevators • residential, public and industrial fencing solutions• welded mesh • etc.

Agriculture (8%)

60

Across the agricultural sector, Bekaert provides innovative solutions that make day-to-day work easier. Through our global footprint and our mix of trading and manufacturing, we can offer total packages to our customers.

• tensioning wire for plant support and binding • fencing systems• vineyard wire • fishing ropes• spiral wire for the livestock feed industry • etc.• barbed wire

Energy & Utilities (8%)

61

Whether it concerns onshore or offshore oil extraction, gas mining, power transmission, solar energy, or even telecommunications, Bekaert products are key contributors to sustainable, safer and more cost-efficient operations.

• wire and ropes for oil and gas exploration • profiled wires for wedge filters• steel wires and strands for overhead power lines • sawing wire / diamond wire• telecom armoring wire • hose coupling• profiled wires for flexible pipes • etc.

Consumer goods (7%)

62

As ever higher quality and comfort standards and functionalities are required, the demand for more advanced coated steel wire products evolves accordingly. Often unknown, but always there: Bekaert is a part of the products we all use every day.

• champagne cork wire • bookbinding and stitching wire• wire for kitchen utensils • Bezinal® XP/XC spring wire for medical instruments• spring wire for bedding and seating • stainless steel fibers for smart clothing• brassiere wire • stainless steel fibers for composite materials• staple wire • etc.

Basic Materials (7%)

63

Many Bekaert products are used in exploring and producing raw materials, from coal and metals to pulp and paper, to chemicals and textiles. We make cable and wefts for conveyor belts that are used across many industries. We continue to find new ways to span every step of the value chain.

• steel ropes for mining applications • pulp baling wire• sintered metal fiber filtration media • Fleximat® steel cord fabric for mining belts• heat-resistant separation materials • etc.• fibers for conductive and protective clothing

Equipment (6%)

64

Bekaert supplies heavy equipment makers and operators with a range of specialized steel wire products. As we build our own proprietary machinery, we know exactly what it means to make high-performance equipment. This allows Bekaert to focus on innovation and machine makers to focus on operational excellence.

• hoisting ropes for cranes • hose reinforcement wire• shovel ropes • Syncrocord® a-cords reinforcing synchronous belts• Bezinal® XP/XC coated spring wires • customized profiled components• brush wire • fiber media for sound attenuation• Fleximat® for conveyor belts • etc.

Contact


Shareholders, investors and other interested parties wishing to receive the Group's annual report, the shareholders guide, the annual accounts of NV Bekaert SA or other information published by the Group may contact the Investor Relations department at any time.

Investor Relations : Katelijn Bohez +32 56 76 66 10 [email protected] Van Hamme +32 51 33 34 23 [email protected]

Documentation : Christine Clarysse +32 56 76 66 13 [email protected]

Agenda

This presentation may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Bekaert is providing the information in this brochure as of its date and does not undertake any obligation to update any forward-looking statements contained in this brochure in light of new information, future events or otherwise. Bekaert disclaims any liability for statements made or published by third parties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other publication issued by Bekaert.

Disclaimer

2020 half year results 31 July 2020Dividend payable (new date) 20 November 2020Third quarter trading update 2020 20 November 2020

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Documents

Bekaert Investor Presentation