Message from the CEO and the Chairman

Dear Reader,

2016 was a year of continued transformation towards higher performance at Bekaert. We achieved good organic volume growth and lifted our profit margins significantly. Our underlying EBIT increased by 32% to € 305 million, with a margin of more than 8%. This solid performance resulted in strong cash generation with an underlying EBITDA of more than half a billion euro.

We are very pleased with these results. We delivered double-digit growth rates in gross and operating profit, ROCE, share price and proposed dividend; and we keep moving forward along our transformation journey towards achieving the true potential of Bekaert.

Pursuing our Vision – to become the preferred supplier for our steel wire products and solutions, by continuously delivering superior value to our customers around the world – we have taken actions in 2016 that have made us stronger as a company. 

  • We have made a clear prioritization of where we want to grow and have narrowed our focus on those parts of the business where we can leverage our strengths. We have also taken measures to remove complexity from processes, plant operations and partnership structures.
  • We expanded the scope of our global transformational programs and their impact has become clearly visible in our plants, in our market approach, and in our results. They have made us outperform the market environment in all regions and businesses.
    • We accelerated the implementation scope and speed of our global manufacturing excellence program, aimed at increasing competitiveness by optimizing the company’s safety, quality, delivery performance and productivity.
    • Moreover, we successfully kicked off a global customer excellence transformation program to drive growth and margin performance. We believe that the value we are creating for our business today is a direct result of creating more value for our customers. We are bringing the customer into the heart of our business, in every location and at every level. We are also gradually improving our business portfolio with products and services that lower the total cost for our customers.
    • In late 2016 we extended the scope of our change programs to supply chain excellence and safety and we expect to start seeing the benefits thereof in the course of 2017.
The worldwide participation of our employees in these programs has added to the collective strength of our company. Together, we are shaping a growth and performance culture which is characterized by strong employee enthusiasm, engagement, and empowerment.

As a result we now leverage our scale and capability in a better way; our margins are improving; we have returned into a value creating position; and we are growing our leading position in target markets all over the world, both through organic and acquisitive growth. In 2016 we concluded the largest merger deal in the history of Bekaert and in the ropes market overall. The Bridon-Bekaert Ropes Group started business at the end of June and we are convinced that the combination of capability and scale will create value over time.

The results of 2016 are a reflection of what we are capable of and have made us more confident and more ambitious about our future. We believe we will repeat in 2017 our current strong performance and we want to build from what we have been achieving. While there will be cycles, and provided there will be no exceptional, unforeseeable circumstances, the improvements we are making within
our business will move our underlying EBIT margin trend towards 10% over the next 5 years.
Based upon the financial performance of 2016 and the confidence in the set direction, the Board has decided to propose, to the General meeting of Shareholders in May of 2017, a gross dividend of € 1.10 per share, up 22% from last year. With the dividend increase, we want to show our commitment in returning value to our shareholders, who provide us the capital to run and grow our business.

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.