Bekaert Group

Economic slowdown in China offsets Bekaert’s performance in the rest of the world

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Source: Bekaert Group

Bekaert achieved solid sales growth in most segments throughout the first nine months of 2011, compared with the same period of last year. Business activities in China were affected by reduced growth in the sectors Bekaert serves and by stringent credit restrictions. Moreover, continued low demand and increased price pressure, driven by substantial overcapacity in the solar energy markets, led to a significant reduction of revenues in the sawing wire activities.

Sales
In the first nine months of 2011, Bekaert achieved consolidated sales of € 2 595 million and combined sales of € 3 550 million, an increase of 8.1% and 7.3% respectively.1 2 Strong volumes in most sectors drove an organic consolidated sales growth of 11.4%. The net effect of acquisitions and divestments amounted to -0.5% while currency movements had an adverse effect of -2.8% as a result of the stronger euro (compared with the same period last year). The combined sales increase was 9.3% from organic growth. Both the net movement in acquisitions and divestments (-0.4%) and currency movements (-1.6%) were negative.

Performance by segment

EMEA
Bekaert's activity platforms performed well in most EMEA markets, with automotive sales recording solid growth in comparison to the first nine months of 2010. Sales declined slightly in the third quarter of 2011 due to substantial lower demand in solar energy markets.

North America
Sustained demand in all markets, except construction and agriculture, and a positive product mix led to increased sales in North America. The strong nominal sales growth was, however, to a large extent offset by unfavorable exchange rates.

Latin America
The Bekaert subsidiaries in Latin America continued to deliver robust sales growth throughout the first nine months of the year. Sales volumes were strong, in particular in Venezuela and Peru, while currency movements had an adverse effect of -6%. Due to strong local currencies and a resulting highly competitive environment in Brazil and Chile, the sales growth was tempered to 8% at the combined sales level.

Asia Pacific
Although top line sales in Asia Pacific were in line with the first nine months of 2010, the quarterly trend is negative. The economic slowdown in the sectors Bekaert serves in China and the substantial overcapacity and price fall in the solar energy sector in particular, drove third quarter sales down 24%4 from last year, thereby more than offsetting the continued growth in India and Indonesia.

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