2020 will be long remembered. The Covid-19 pandemic brought challenges and changes to the world of a magnitude that was impossible to foresee. As per the publication date of this report the pandemic is still taking a huge toll on economies and people’s lives worldwide and has fundamentally changed long established certainties and priorities.
Despite the turmoil that Covid-19 has created in our markets and in our business, we remained focused on our priorities. This enabled us to secure the business continuity of our customers, the health and safety of our people, and - at the same time – offset the impact of the pandemic on our financial objectives.
As a result of all the efforts undertaken we improved profitability, reinforced the balance sheet and enhanced the strategic position of our businesses. Underlying EBIT for the fiscal year 2020 increased by 13% to € 272 million at a margin on sales of 7.2%, ahead of what we had set ourselves as a target. Driven by an improved margin performance and stringent working capital management, our healthy cash generation significantly strengthened the balance sheet. Net debt on underlying EBITDA decreased from 2.09 at the close of 2019 to 1.26 at the end of 2020.
We are very pleased with these results. They are a reflection of what we are capable of when we focus and deliver on our priorities despite adverse external factors, however challenging those may be.
Moving forward, our ambitions reach higher. The Board of Directors and the Bekaert Group Executive have recently established the company’s strategy for the next five years with the ambition to transform the company’s business portfolio toward higher value creation. Organic growth in core markets will be supported by extending our capabilities in the areas of innovation, digital and sustainability and complemented by selective acquisitions and new partnerships.
For 2021, barring unexpected events, we project consolidated sales to reach at least € 4 billion and intend to improve our underlying EBIT-margin by 40-60 bps over the previous year.
Based upon the financial performance of 2020 and the confidence in the set direction, the Board has decided to propose, to the General Meeting of Shareholders in May of 2021, a gross dividend of € 1.00 per share, in line with the company’s dividend policy.
The progress achieved in a very demanding year is evidence of the commitment, energy and irrepressible spirit of our employees. We would like to thank them as well as our customers, partners and shareholders for their continued trust and support.
Oswald Schmid Jürgen Tinggren
Chief Executive Officer Chairman of the Board of Directors