Increasing demand for steel cord products for the reinforcement of radial tyres continued unabated, particularly in China. Sales in fencing activities in Europe, since it was low season, remained weak. There was a revival in demand for various wire products in the United States and Europe. These activities performed well in Central Europe, Latin America and Asia.
Activities in advanced materials and coatings performed well, with only composites and film coatings below expectations. In order to focus on its core competencies worldwide, Bekaert decided in December to sell its activities in composite profiles to the Finnish Exel Oyj.
Bekaert also sold the management consultancy firms Bekaert-Stanwick and Bekaert Consulting.
Financial year 2003
Bekaerts consolidated sales decreased by 3.5%, due to the strong depreciation of the US dollar. Despite the difficult economic circumstances, at constant currencies, Bekaert would have increased its consolidated sales by 4%.
Combined sales[1] decreased by 7%. At constant currencies, combined sales would have increased by 3%.
Bekaert realised growth in consolidated sales, at constant currencies, mainly due to the increasing activities in Asia. In China, sales of steel cord products rose by more than 30%. Expansion in steel cord plants is on schedule. With its three Chinese plants, Bekaert will reach an annual production capacity of 120,000 tons by the end of 2004. In this region, other wire products also strengthened their position. 2003 was a difficult year for wire products in Western Europe and North America. However, Central and Eastern Europe were important growth markets, where Bekaert has strengthened its competitive position.
In its fencing activities in Europe, Bekaert is shifting its portfolio to products with a higher added value. As a result of discontinuing certain product lines, which do not fit into this strategic objective, consolidated sales decreased.
At constant currencies, consolidated sales in advanced materials rose. This is due to the good activity level in combustion technology, which grew by more than 30 %. Advanced coatings also grew. Weak market demand for film coatings in the United States was compensated by an increasing activity in Europe and Asia.
Bekaert performed well in the joint ventures due to the good activity level in Latin America in the whole range of wire products.
Outlook
Orders remain high for steel cord products and are increasing slightly for the other wire products. The season for fencing activities in Europe is gradually getting up to speed. Expectations for advanced materials and coatings are good.
However, the economic outlook, the continuing increases of wire rod prices and the low dollar force Bekaert to express caution for the current year.
The information contained in this press release is provisional and as yet unaudited. Bekaert will announce the full results for the financial year 2003 on 18 March 2004.
Strong performance in Asia and Latin America supports Bekaert sales
Fourth quarter consolidated sales for Bekaert were in line with expectations. Due to the price increases of wire rod, Bekaerts most important raw material, operating margins came under increased pressure.