2014 was a year of solid organic growth for Bekaert. We have been defending our strategic positions in highly competitive markets and in spite of a weakening final quarter, our volumes increased by 3%, on the wave of increased demand in automotive markets.
Our revenues were about stable in comparison with 2013, reflecting the price erosion we have been dealing with in China, the adverse effects from currency movements, and the decline in raw material prices, which we pass on to our customers.
The operating result was € 171 million, up 25% from last year and the operational cash flow increased to almost 11% on sales. However, these figures reflected positive non-recurring effects in comparison with last year.
Overall, we achieved better results than in 2013, but so far, we have not been able to reach our long-term profitability goals. When looking ahead, neither the global market demand nor the price competition in China will be enablers in turning the tide.
We need to do better and we know we can do better. Therefore, we have started a plan that will ensure we do better.
Our goal is to consistently create value for our shareholders, and we firmly believe that starts with creating value for our customers.
That is why we have raised the bar and set ambitious goals for 2015 and for the years to come.
We are determined to leverage our market and technology leadership, because we know through our history and experience that this will lead to sustainable profitable growth.
As we enter 2015, we are growing our leading position in tire markets, thanks to the integration of Pirelli’s steel cord activities – Bekaert’s largest acquisition in history. This will allow us to drive further economies of scale in our steel cord activities and improve our technology and service position in this sector. We also obtained a global leading position in mining ropes after the acquisition of a ropes plant in Australia.
Acquisitive growth is, of course, not our only strategy. Over the last year we have been refining the strategies which we will use to drive sales growth, margin growth and better return on invested capital. These are the core of how we will become a stronger business.
We have determined 5 key strategies that will make our company stronger and help us deliver our goals. They represent our direction and priorities for the company to deliver upon, as from now:
- We will bring the customer into the heart of our business;
- drive growth by providing superior customer value;
- accelerate Bekaert’s technology leadership and speed-to-market in target products and processes;
- leverage our scale to greater effect, and reduce our complexity to facilitate this;
- deliver the value proposition we want to offer the customer, at the lowest total cost.
These five strategies will be transformational for us, as a company, and we are organizing ourselves to put them into reality, for the benefit of our customers and all our stakeholders.
We believe the strategy is clear, the goals are clear, and the entire Board of Directors and the management team are determined to succeed.
Based upon the financial performance of 2014 and the confidence in the set direction, the Board has decided to propose, to the General meeting of Shareholders in May of 2015, a gross dividend of € 0.85 per share. This way, 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 and drive to take on the challenges to realize our goals.
Matthew Taylor, CEO - Bert De Graeve, Chairman