Bekaert makes strong start to the year
Summary:
In the first quarter of 2016, Bekaert achieved strong organic volume growth in tire cord and other automotive steel wire products, stemming from firm demand in automotive markets and increased market share in Chinese tire markets. The tire industry in China has been boosted in anticipation of new US import duties and increasing raw material prices. This effect will not be repeated in the second half of the year. Demand for Bekaert's Dramix steel fibers for concrete reinforcement increased steadily, especially in EMEA markets.In energy markets, Bekaert recorded robust growth in sawing wire on the wave of continued good demand in solar markets, but saw demand from the oil and gas sector worsen at a global level.
Bekaert achieved consolidated sales of € 884 million in the first quarter of 2016. Compared with the same quarter last year, our robust organic volume growth (+5.5%) was, as forecasted, fully offset by significantly lower wire rod prices (-6%) which were passed on to our customers. Mix improvements (+3%) more than compensated for a continued price erosion in tire markets (-2%). The net effect of acquisitions (+2%) and divestments (-2%) was neutral, but unfavorable currency movements drove consolidated sales down by 2%.
Combined sales decreased by 7% to € 1 030 million as a result of unfavorable currency effects (-6%), mainly driven by the drastic devaluation of the Brazilian real in comparison with the same period last year. The net effect of acquisitions and divestments was negative (-1%) due to a transfer of control in a Chinese partnership. The organic growth was, also on the combined level, entirely offset by lower raw material prices.