Message from the CEO and the Chairman

Dear Reader,

2015 was a year of strong growth for Bekaert. We achieved 14% sales growth, reaching € 3.7 billion in consolidated revenue. REBIT increased by 36% to € 223 million, with a margin of more than 6%. This solid performance resulted in strong cash generation, allowing us to reduce net debt, in spite of the major acquisitions and capital investments of last year.

We grew our leading position in tire markets thanks to the integration of Pirelli’s steel cord activities, Bekaert’s largest acquisition in history. We also grew our position in mining markets by acquiring and integrating a ropes plant in Australia; and our largest deal is yet to come, with the announced merger of the ropes and advanced cords activities of Bekaert and Bridon.

We also exited some businesses last year and narrowed our focus on those parts of the business where we can really leverage our strengths and create value. We ended some partnerships where they were creating too much non value-adding complexity and limiting our options going forward. So we took full ownership, or prepared for an exit.

In 2015 we increased the mix of innovative and higher value adding products, which help lower total costs for our customers. This has been especially significant within the growth of the steel cord and sawing wire businesses.
Internally, we see our global transformational programs gain impact as they increase in speed and scope across the organization. The Bekaert manufacturing excellence program, for instance, is aimed at increasing competitiveness by optimizing the company’s safety, quality, delivery performance and productivity. We see clear benefits from this program which we began at the end of 2014 and are rolling out in all our manufacturing sites worldwide, over a period of four years. We also recently launched a customer excellence program to drive growth and margin performance. By understanding and responding better to our customers’ needs and creating more value for them, we will both benefit from this program in the current and coming years.

We are confident of the impact and potential of these underlying business improvement programs. They are part of why we performed strongly in 2015, and why we are convinced of our ability to do even better in 2016. We are ready to make another significant step towards our REBIT target of 7%.
Based upon the financial performance of 2015 and the confidence in the set direction, the Board has decided to propose, to the General meeting of Shareholders in May of 2016, a gross dividend of € 0.90 per share. With the dividend increase, 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.