Bekaert below analyst forecasts across the board

The steel wire group Bekaert’s turnover in the first quarter remained well below the average expectations of analysts. This applies to the four divisions.

Bekaert

recorded consolidated revenues of 1.025 billion euros in the first three months of the year. That is not only a decrease of 14 percent compared to the same period last year, it is also a lot lower than the analyst consensus. The analysts had put forward an average of 1.1 billion euros.

The group itself spoke in its press release on Wednesday about a result ‘in line with the (own, ed.) expectations’. She also points out that the first quarter of 2023 is “a difficult basis for comparison.” There are three reasons for this: the strong restocking of customers in China at the time, positive exchange rate effects and higher raw material and energy costs passed on.

In the first quarter of this year, Bekaert suffered from the reversal of previously increased raw material costs, unfavorable exchange rate effects and 5 percent lower volumes. The rollback weighed most heavily (41% of the sales decline), followed by lower volumes (35%). Compared to the fourth quarter of 2023, group turnover increased by 5.3 percent, because Bekaert was able to sell more.

Bekaert did less well across the board than the average analysts had predicted. The largest division, rubber reinforcement or the steel wires used in tires, achieved a turnover of 447 million euros at the end of March. That is a decrease of almost 100 million euros or 17 percent compared to the 539 million a year earlier. The analysts had aimed for 485 million euros here. No other division did worse.

The group is also talking about volumes ‘in line with (one’s own, ed.) forecasts’. The first quarter of 2023 saw significant customer restocking, mainly in China. Only in India and Southeast Asia did volumes increase this year. For the entire year of 2024, Bekaert expects the global market to remain subdued.

For the entire group, CEO Yves Kerstens is counting on ‘modest turnover growth’ this year with ‘at least stable margins’. To achieve this, Bekaert must achieve an average turnover of 1.1 billion euros each subsequent quarter. It is confident that this is feasible and continues to believe in the medium-term objectives. Pro memorie: for the 2023 financial year, Bekaert achieved a turnover of 4.3 billion and a profit margin of 9 percent.

Bekaert did not announce any profit figures on Wednesday. For the first quarter, it only talks about a continued strong focus on cost efficiency and working capital management. Financial director Taoufiq Boussaid called this a constant and increasing point of attention, without there being any specific restructuring plans. Also on Wednesday, the general meeting gave the green light for the gross dividend of 1.80 euros per share.