Annual Report 2014 - EMEA


Combined sales: € 1 049 million
Capital expenditures (PP&E): € 33 million
Total assets: € 877 million
Employees: 6 900

Economic environment in 2014

Europe saw its economic performance improve somewhat during 2014 with discrepancies across the EU member states. The political instability in Russia and Ukraine and their continued financial uncertainty have hampered a more cohesive growth trend across the EMEA region.

Automotive and construction markets, sectors which are highly relevant for Bekaert’s activities, witnessed a rebound over the course of 2014. The industrial production index improved in most countries with solid growth rates in Central Europe in particular.

Bekaert has a presence in both the mature Western European markets as well as in the Central and Eastern European markets. The company offers a quality portfolio of advanced steel wire products for sectors that are constantly searching for stronger, safer and lighter materials. As a result, opportunities for innovation-oriented technologies continue to exist.

Demand from European markets was quite strong for Bekaert in 2014. This applied to most sectors but was particularly apparent in the automotive sector, the energy-related markets and other industrial sectors. This led to robust volume growth for tire cord, flat and shaped specialty wires, advanced cords and industrial steel wires. Also, Bekaert’s building products platform solidly delivered thanks to an innovation-driven product mix.

Our business activities in Russia in 2014   
Bekaert has been present in Russia with manufacturing operations since the beginning of 2010, and has built a growing customer base in the region. Bekaert Lipetsk supplies steel cord to all tire makers in Russia and is the country’s main producer of advanced rubber reinforcement products. From the start of its investment, Bekaert has been developing local wire rod suppliers to establish a qualitative domestic supply base for our raw materials needs. This approach has proven to be successful and is the reason why trade restrictions have not affected our business continuity and growth in Russia.

Our activity performance

Demand from European markets was strong throughout 2014 across most sectors. Automotive demand, in particular, boosted volume growth for tire cord and other steel wire applications in the region.

Our activities in EMEA delivered solid results driven through increased volumes, continued effects of the cost savings programs of the past years, and a favorable product mix. Bekaert realized a 30% REBIT increase in the region and lifted profit margins to a record high, making this segment the largest contributor to the Group’s consolidated profit for the year 2014.

Bekaert invested in future growth with capacity expansions mainly in Slovakia and Belgium. Europe will become an even bigger contributor to the Group’s consolidated figures as a result of the integration of the steel cord entities acquired from Pirelli in Romania, Italy and Turkey.

Importance for the region of the Pirelli deal 
Bekaert has acquired Pirelli’s steel cord activities and will be the long-term, tire cord supplier to Pirelli on a global scale. In EMEA, the acquisition includes the steel cord manufacturing sites in Figline Valdarno (Italy), Slatina (Romania), and Izmit (Turkey). Outside of Europe, the deal adds production facilities in Brazil and China. The integration of the steel cord activities and our long-term supply agreement will further enhance Bekaert's status as a preferred supplier to the tire industry, and will grow the contribution of the EMEA region to Bekaert’s consolidated figures even further.
Bekaert-Maccaferri Underground Solutions 
Bekaert and Maccaferri have established a global sales and distribution joint venture (50/50) to provide total construction reinforcement solutions for underground infrastructure projects such as road, railway, metro, utility and mining tunnels, as well as hydro power stations.

The joint venture combines the sales and distribution of Bekaert’s Dramix® steel fibers for the reinforcement of concrete in underground construction projects such as shotcrete and precast applications with Maccaferri’s complementary underground solutions.

The joint venture, with headquarters in Belgium, serves underground construction markets on a worldwide basis, except in China and in several Latin American counties where we continue to operate independently.

Bekaert dramix tunnel
Divestment: Bekaert Carding Solutions
Bekaert and Groz-Beckert have signed, after the balance sheet date, an agreement regarding the sale of Bekaert’s Carding Solutions activities to Groz-Beckert, a global company with headquarters in Albstadt, Germany. The transaction covers the carding production facilities in Belgium, India, China and the US and the global sales and services network. The deal involves the employees and assets of the activity platform.

The divestment underpins Bekaert’s strategic direction of building and selecting a value creating product and business portfolio which fully leverages the Group’s core competences in steel wire transformation and coating technologies.