Bekaert: Q1 Revenue of €917 Million, Down 7% Year-on-Year
Belgian metallurgical solutions specialist Bekaert reported a consolidated revenue of €917 million for the first quarter, marking a 7% decline year-on-year. Behind this apparent contraction lies a mixed reality: volumes on a like-for-like basis increased by 3%, but were offset by currency effects (-5%) and a price-mix erosion (-3%). Despite growing pressures from geopolitical conflicts and rising cost inflation, the group maintains its annual outlook unchanged.
Volume Growth Despite Decline in Consolidated Revenue
The total consolidated sales of €917 million reflect an operational dynamic that is offset from the overall financial results. In like-for-like terms, volumes increased by 3%, or an additional €32 million, driven particularly by growth in Asia and a recovery in North America within the Rubber Reinforcement segment. However, this growth was overwhelmed by three negative effects: price-mix changes penalized sales by €30 million (-3%), divestments in Latin America subtracted €31 million (-3%), and most significantly, currency fluctuations reduced revenue by €45 million (-5%) due to the weakness of the dollar and yuan. The Rubber Reinforcement segment recorded solid volume growth, notably in Asia, with an increase in North America offsetting lower volumes in Europe. The group also announced the completion of the acquisition of Bridgestone plants in Thailand and China at the end of April. The BBRG segment (steel and synthetic ropes) suffered from increasing geopolitical uncertainty affecting global demand and project implementation delays.
Margins Under Pressure Amid Inflationary Pressures from Middle East Conflict
Bekaert states that operational efficiency and cost reduction measures continued during the quarter, with a specific focus on mitigating margin pressures related to the inflation of energy and raw material costs stemming from the conflict in the Middle East. To date, the group claims to have mitigated the direct impacts of the conflict, but acknowledges that ongoing geopolitical and trade uncertainties, coupled with inflationary pressures and supply chain disruptions, continue to exert increasing pressure on margins. Disciplined management of working capital and capital investments has supported cash flow generation. The balance sheet shows sufficient robustness to support distributions to shareholders: a dividend of €1.95 per share is proposed at the general meeting, and the €200 million share buyback program over two years continues with approximately €145 million already spent.
Annual Outlook Maintained Despite External Uncertainties
Bekaert expects sales and margins to be at similar levels to the previous year on a like-for-like basis, according to previously communicated outlooks. This stance remains unchanged despite worsening geopolitical and trade uncertainties, including inflationary pressures and supply disruptions related to the conflict in the Middle East, which could continue to impact global demand and increase supply costs.
