Press release

Regulated information – Inside information

1 March 2019 – 07:00 a.m. CET

Press - Investors Katelijn Bohez T +32 56 76 66 10

www.bekaert.com

Full Year Results 2018 Bekaert reports € 210 million underlying EBIT on higher sales

Highlights1

Bekaert achieved +8.9% organic sales growth in 2018, reaching € 4.3 billion in consolidated revenue for the year. Part of this growth was offset by adverse currency movements (-2.5%) and divestments (-1.3%), resulting in a topline increase of +5.1%. Combined sales exceeded the € 5 billion mark for the first time in history and reflected an increase of +5.5% year-on-year.

The organic consolidated sales growth stemmed from +2.2% volume growth – driven by firm demand in global automotive markets but largely offset by a significant decline in sawing wire sales and a slowdown in industrial steel wire markets – and from the aggregate effect of passed-on wire rod price increases and price-mix, which added +6.6%.

Continued volatility of wire rod prices, trade tensions and policy changes, growing price pressure, higher than anticipated start-up costs related to various major expansion programs, and loss-generating sawing wire activities (€ -9 million) compared with a profitable business last year (€ +21 million), have all been weighing on our margin performance in 2018. In addition, along with the measures we have been implementing to close certain lossmaking entities and to turn around the profitability of other weaker performing businesses, we have posted a series of provisions and write-offs in the financial statements of 2018. Some of these adjustments affected underlying EBIT (€ -15 million) while others have been recognized as one-off elements in the reported EBIT (€ -63 million).

Underlying EBIT reached € 210 million, representing a margin on sales of 4.9%. Underlying EBITDA totaled € 426 million, -14% down from last year and reflecting a margin of 9.9%. Reported EBIT was significantly impacted by the one-off adjustments and reached € 147 million at a margin of 3.4%.

We have been successful in implementing actions to reduce the net debt position. Net debt was € 1 153 million at year-end 2018, down € -186 million from 30 June 2018 and unchanged from year-end 2017. Net debt on underlying EBITDA improved from 3.1 (30 June 2018) to 2.7 at the close of the year.

Consolidated sales of € 4.3 billion (+5.1%) and combined sales of € 5.1 billion (+5.5%)
Underlying gross profit of € 585 million (13.6% margin) compared with € 704 million (17.2% margin) in 2017
Underlying EBIT of € 210 million (4.9% margin) compared with € 301 million (7.3% margin)
EBIT of € 147 million (3.4% margin) compared with € 318 million (7.8% margin)
Underlying EBITDA of € 426 million (9.9% margin) compared with € 497 million (12.1% margin)
Underlying ROCE of 8.0% compared with 11.2%
€ 198 million capital expenditure (PP&E) versus € 273 million in 2017
Net debt of € 1 153 million. Net debt on underlying EBITDA was 2.7, higher than last year (2.3).
Result for the period attributable to equity holders of Bekaert: € 40 million, down from € 185 million in 2017
EPS (earnings per share): € 0.70 compared with € 3.26

The Board of Directors will propose to the Annual General Meeting of Shareholders of 8 May 2019, a gross dividend of 70 eurocent. In line with the company's dividend policy, the proposed temporary dividend cut is reflecting the lower earnings and high debt leverage of the company.

¹ All comparisons are made relative to the financial year 2017.

Press release – Full Year Results 2018 – 1 March 2019 1/23

Outlook

The business conditions in various sectors have begun to trend somewhat lower as a result of tighter markets and postponed investments. We project the increased economic and political uncertainty to induce some growth moderation in most parts of the world in 2019. We are particularly cautious about the uncertainty that may be caused by Brexit in our markets and in the further developments of trade tensions globally.

Our actions addressing the business elements within our control:

We are resolving the start-up issues in the various expansion programs and will see increased benefits from those investments in the course of 2019. Our results will no longer be affected by the loss generation and one-off closure impacts related to the plants that have been closed in Italy and Costa Rica.
Due to severe price erosion in sawing wire markets, we do not project a significant contribution of the respective activities in 2019 and have impaired most of the related equipment and intangible assets in the financial statements of 2018.
Despite the economic slowdown in China, induced by international trade tensions, the current performance of the rubber reinforcement platform seems to be offsetting the effects by reqaining pricing power and market share.
Bridon-Bekaert Ropes Group is showing underlying business improvement according to the profit restoration plan that has been put in place.
Together with customers and suppliers, we have taken actions to mitigate the anticipated risks of a nodeal Brexit.
Despite the transformation programs that have helped us improve our performance over the past years, we did not achieve the incremental cost effects we expected in 2018. Given the market environment and the disappointing results of 2018, we will look closely at improvement actions that will help reduce our cost structure and improve our performance.
In 2019 we will continue to put in place cash generation actions to reduce the net debt leverage. We project to limit the capital expenditure to between € 130 and 150 million, down from almost € 200 million in 2018.

Alongside the publication of the 2018 FY results, Bekaert today also announces important organizational and leadership changes to enable us to be more agile and customer-centric and to restore Bekaert's business performance.

From today's perspective, and provided there will be no exceptional, unforeseeable circumstances like a largescale recession, we anticipate stable sales in 2019. We are confident that our accelerated transformation drive and the improvement actions we are taking, will help us rebuild the underlying EBIT margin to above 7% over the medium term.

		Underlying	Reported
in millions of €	2017	2018	1H 2018	2H 2018	2017	2018
Consolidated sales	4 098	4 305	2 157	2 148	4 098	4 305
Operating result (EBIT)	301	210	111	99	318	147
EBIT margin on sales	7.3%	4.9%	5.1%	4.6%	7.8%	3.4%
Depreciation, amortization and impairment losses	196	216	103	113	192	240
EBITDA	497	426	214	212	510	387
EBITDA margin on sales	12.1%	9.9%	9.9%	9.9%	12.4%	9.0%
ROCE	11.2%	8.0%			11.8%	5.6%
Combined sales	4 808	5 074	2 537	2 537	4 808	5 074

Financial Statements Summary

Underlying EBIT bridge

Bekaert's underlying EBIT was € 210 million, reflecting a margin of 4.9%. The main factors preventing us from turning improved volumes (contributing € +33 million to underlying EBIT) into incremental profitability were the adverse effect of the sawing wire business decline (decrease of € -30 million versus last year), significant onetime BBRG (€ -14 million) clarifying most of the earnings decline of the segment (down € -22 million from last year), and an aggregate € -36 million reflecting the pass-through effectiveness of increased wire rod prices, inventory valuation effects, and price erosion. The incremental cost savings from transformation programs could not offset the overall cost increases from high start-up costs in plants with expansion programs and inflation. The net effect of divestments (€ -15 million) and adverse currency effects (€ -6 million) added to the underlying EBIT decrease year-on-year.

Sales

Bekaert achieved consolidated sales of € 4.3 billion in 2018, an increase of +5.1% compared with last year. The organic volume growth (+2.2%) and the aggregate effect of passed-on higher wire rod prices and price-mix (+6.6%) accounted for an organic sales growth of +8.9%. This was partially offset by the effect of divestments (-1.3%) and adverse currency movements (-2.5%). Combined sales2 totaled € 5.1 billion for the year, up +5.5% from 2017 as a result of strong organic sales growth (+10.3%), adverse currency movements (-4.5%) and a limited effect of divestments (-0.2%).

Consolidated sales	2017	2018	Share	Variance3	Organic	FX	M&A
EMEA	1 273	1 335	31%	+5%	+6%	-	-1%
North America	552	618	14%	+12%	+16%	-4%	-
Latin America	673	692	16%	+3%	+13%	-4%	-6%
Asia Pacific	1 145	1 197	28%	+5%	+8%	-3%	-
BBRG	455	463	11%	+2%	+6%	-4%	-
Total	4 098	4 305	100%	+5%	+9%	-3%	-1%
Combined sales2	2017	2018	Share	Variance3	Organic	FX	M&A
EMEA	1 264	1 322	26%	+5%	+6%	-	-1%
North America	552	618	12%	+12%	+16%	-4%	-
Latin America	1 394	1 474	29%	+6%	+16%	-10%	-
Asia Pacific	1 144	1 197	24%	+5%	+8%	-3%	-
BBRG	454	463	9%	+2%	+6%	-4%	-
Total	4 808	5 074	100%	+6%	+10%	-5%	-

Consolidated and combined sales by segment - in millions of €

2018 quarter-on-quarter progress – in millions of €

Consolidated sales	1st Q	2nd Q	3rd Q	4rd Q	Q4 y-o-y4
EMEA	347	346	316	326	+3%
North America	144	156	160	158	+21%
Latin America	168	177	175	172	+4%
Asia Pacific	283	310	304	301	+1%
BBRG	110	116	115	122	+8%
Total	1 052	1 105	1 070	1 078	+5%
Combined sales2	1st Q	2nd Q	3rd Q	4rd Q	Q4 y-o-y4
EMEA	347	344	314	316	-
North America	144	156	160	158	+21%
Latin America	367	359	377	371	+4%
Asia Pacific	283	310	304	301	+1%
BBRG	110	116	115	122	+8%
Total	1 251	1 286	1 270	1 268	+5%

² Combined sales are sales of fully consolidated companies plus 100% of sales of joint ventures and associates after intercompany elimination.

³ Comparisons are made relative to the financial year 2017, unless otherwise indicated.

⁴ Q4 year-on-year sales: 4th quarter 2018 versus 4th quarter 2017.

Press release – Full Year Results 2018 – 1 March 2019 4/23

Segment reports

EMEA

		Underlying		Reported
Key figures (in millions of €)	2017	2018	1H 2018	2H 2018	2017	2018
Consolidated sales	1 273	1 335	693	642	1 273	1 335
Operating result (EBIT)	141	114	68	46	144	74
EBIT margin on sales	11.1%	8.5%	9.8%	7.1%	11.3%	5.5%
Depreciation, amortization and impairment losses	62	69	32	38	58	80
EBITDA	203	183	100	83	202	153
EBITDA margin on sales	15.9%	13.7%	14.4%	13.0%	15.9%	11.5%
Segment assets	1 018	973	1 083	973	1 018	973
Segment liabilities	299	333	342	333	299	333
Capital employed	718	641	741	641	718	641
ROCE	20.8%	16.8%			21.2%	10.9%

Bekaert's activities in EMEA achieved +4.8% sales growth in 2018, driven by the aggregate effect of passed-on wire rod price increases and price mix (+6.8%), a small organic volume decline (-0.9%) and the divestment effect of the Solaronics business (-0.9%). Demand from automotive and construction markets was strong throughout the year, while demand for industrial, specialty, and stainless products softened in the second half of the year.

The underlying EBIT was € 114 million at a margin of 8.5%. The margin performance was lower due to higher than anticipated start-up costs in plants with major expansion programs in Central Europe, and increased price pressure in various markets, particularly those where we compete with integrated players.

Reported EBIT dropped to 5.5% as a result of the one-off impact of the closure of the Figline plant in Italy (€-40 million) reflecting the operational losses incurred since the announcement of the closure, the impairment losses of the site's assets and the expenses accrued for the closure.

Capital expenditure (PP&E) amounted to € 67 million and included, amongst others, capacity expansions in Romania, Slovakia and Russia.

NORTH AMERICA

	Underlying				Reported
Key figures (in millions of €)	2017	2018	1H 2018	2H 2018	2017	2018
Consolidated sales	552	618	300	318	552	618
Operating result (EBIT)	33	25	14	11	33	25
EBIT margin on sales	6.0%	4.0%	4.6%	3.5%	6.0%	4.0%
Depreciation, amortization and impairment losses	13	13	7	7	13	13
EBITDA	47	38	21	18	47	38
EBITDA margin on sales	8.5%	6.2%	6.9%	5.6%	8.5%	6.2%
Segment assets	299	367	337	367	299	367
Segment liabilities	88	116	105	116	88	116
Capital employed	210	251	232	251	210	251
ROCE	14.9%	10.8%			14.9%	10.7%

Bekaert's activities in North America achieved +12% sales growth. The organic sales growth accounted for +16.4% and stemmed from improved volumes (+5.7%) and passed-on higher wire rod prices and other price-mix effects (+10.6%). The adverse currency impact for the year tempered to -4.4% due to the appreciation of the US\$ in the last quarter.

Automotive demand remained strong throughout the year. Industrial steel wire and agricultural fencing markets were affected by increased price pressure and by the usual seasonality effects of the second half of the year.

Bekaert's rubber reinforcement activities in the US recorded solid growth. The margins were, however, affected by supply chain issues caused by the continuous changes in trade policy, including quota restrictions and tariffs.

In other steel wire markets, the average price of domestic wire rod increased about 30% compared with last year. Passing on the full price impact to our customers was not possible as we compete with import flows and integrated players (downstream integrated steel mills) there. The margins were, moreover, affected by continued weak demand in agricultural markets.

Both the underlying and reported EBIT amounted to € 25 million at a margin of 4%.

Capital expenditure (PP&E) was € 18 million in North America.

LATIN AMERICA

		Underlying	Reported
Key figures (in millions of €)	2017	2018	1H 2018	2H 2018	2017	2018
Consolidated sales	673	692	344	348	673	692
Operating result (EBIT)	55	43	23	20	80	35
EBIT margin on sales	8.2%	6.2%	6.6%	5.9%	11.9%	5.1%
Depreciation, amortization and impairment losses	20	17	9	8	20	19
EBITDA	74	61	32	28	100	55
EBITDA margin on sales	11.1%	8.7%	9.3%	8.2%	14.8%	7.9%
Combined sales	1 394	1 474	726	748	1 394	1 474
Segment assets	453	477	492	477	453	477
Segment liabilities	120	144	160	144	120	144
Capital employed	332	333	332	333	332	333
ROCE	14.8%	12.9%			21.6%	10.6%

In Latin America, consolidated sales were up +2.7% from last year.

Passed-on higher wire rod prices and other price-mix enhancements contributed +14.3% to the organic revenue growth. An overall weak economic environment in the region drove demand for our products down, resulting in an organic volume loss of -1.8% for the year. Consolidated sales were adversely impacted by the disposal effect (-6.1%) of the Sumaré integration within the JV partnership with ArcelorMittal since 1 July 2017, and by adverse currency movements (-3.7%).

Excluding the effects of currency, royalties from Brazilian joint ventures, and one-time elements, the underlying EBIT of our operations in Latin America slightly improved, compared with last year. Including all elements, underlying EBIT decreased, mainly because of a lower positive net effect of one-time items in 2018 compared with 2017. Last year's records included the effect of the cancellation of the obligations under an onerous supply contract (€ +10 million) and the disposal effect of Sumaré (€ +12 million). The one-time element in 2018 regarded a change in a long-term benefit plan in Ecuador (€ +3.7 million). Royalties from the Brazilian joint ventures were higher in 2018, compared with last year (€ +5.4 million), while currency effects on underlying EBIT were € -1.9 million negative, year-on-year.

Including all elements, underlying EBIT decreased to € 43 million, reflecting a margin of 6.2%. Reported EBIT was significantly lower than last year: in 2017 the gain on the sale of 55.5% of the shares of the Sumaré plant in Brazil was included whereas in 2018 we have incurred one-off expenses related to the closure of the Dramix plant in Costa Rica.

Bekaert invested almost € 18 million in property, plant and equipment across the region, particularly in Chile.

Bekaert's combined sales increase in Latin America (+5.7%) was from strong organic growth (+15.7%), largely offset by the translation impact of currency movements (-9.9%) which was mainly driven by the depreciation of the Brazilian real compared with last year (-19.4% compared with the average rate of 2017).

ASIA PACIFIC

		Underlying		Reported
Key figures (in millions of €)	2017	2018	1H 2018	2H 2018	2017	2018
Consolidated sales	1 145	1 197	593	605	1 145	1 197
Operating result (EBIT)	107	86	40	46	104	54
EBIT margin on sales	9.3%	7.2%	6.8%	7.7%	9.1%	4.5%
Depreciation, amortization and impairment losses	90	97	47	50	89	142
EBITDA	196	183	87	96	193	196
EBITDA margin on sales	17.1%	15.3%	14.7%	15.9%	16.8%	16.3%
Segment assets	1 209	1 175	1 286	1 175	1 209	1 175
Segment liabilities	197	217	208	217	197	217
Capital employed	1 012	958	1 078	958	1 012	958
ROCE	10.9%	8.7%			10.7%	5.5%

Bekaert delivered +7.7% organic sales growth in Asia Pacific, driven by good volume growth (+5.7%) and a positive aggregate effect of passed-on wire rod price increases and price-mix (+2%). The robust growth of rubber reinforcement activities across the region was partly offset by weaker volumes in other sectors, among which the sawing wire activities in China and the steel wire activities in Malaysia. Adverse currency effects (-3.1%) drove top line growth down to +4.6%.

Underlying EBIT decreased to € 86 million at a margin of 7.2%. The margin decrease was a result of loss-making sawing wire activities (€ -9 million compared with € +21 million last year), the weak performance of our activities in Malaysia, and high start-up costs related to the expansion program in India. The rubber reinforcement business progressively improved the margin performance in the second half of the year, particularly in China and in India. This trend is visible in the segment's underlying EBIT of the second half.

Reported EBIT dropped to € 54 million due to the impairment of tangible and intangible assets related to sawing wire in China and the restructuring costs in Ipoh (Malaysia), partly offset by the gain on the sale of land and buildings following the closing of the plants in Huizhou (China) and Shah Alam (Malaysia).

In anticipation of continued growth perspectives, Bekaert invested € 85 million in PP&E in the region in 2018, including expansion investments in China, India and Indonesia.

BRIDON-BEKAERT ROPES GROUP

		Underlying	Reported
Key figures (in millions of €)	2017	2018	1H 2018	2H 2018	2017	2018
Consolidated sales	455	463	227	237	455	463
Operating result (EBIT)	15	-7	2	-9	12	-20
EBIT margin on sales	3.3%	-1.5%	0.8%	-3.7%	2.7%	-4.3%
Depreciation, amortization and impairment losses	26	29	14	15	26	36
EBITDA	41	22	16	6	38	16
EBITDA margin on sales	9.0%	4.8%	7.1%	2.6%	8.4%	3.4%
Segment assets	574	561	572	561	574	561
Segment liabilities	108	120	115	120	108	120
Capital employed	465	440	457	440	465	440
ROCE	3.1%	-1.5%			2.5%	-4.4%

Bridon-Bekaert Ropes Group (BBRG) achieved 5.5% organic sales growth, part of which was compensated by the adverse currency movements (-3.7%) impacting the topline. The organic growth accelerated in the second half of 2018 (+8.4%) compared with limited growth in the first half of the year (+2.7%) and was mainly driven by a positive price-mix evolution.

Underlying EBIT was € -6.9 million for the year due to significant one-time adjustments without cash impact (including pension plan adjustments and obsolete stock write-offs) totaling € -13.7 million. Excluding these adjustments, underlying EBIT would have reached € 6.8 million (€ +1.8 million in the first half of 2018 and € +5 million in the second half).

Reported EBIT was € -20 million and included the impacts of one-off elements related to the restructuring in Brazil (€ -7 million) and other measures to turn around the business (€ -6 million).

BBRG invested € 19 million in PP&E in 2018, about half of which in support of growing the advanced cords facilities in Belgium and China, and the other half in the ropes manufacturing sites worldwide.

Investment update and other information

Net debt was € 1 153 million at year-end 2018, unchanged from € 1 151 million last year but significantly down from € 1 339 million as at 30 June 2018. Net debt on underlying EBITDA was 2.7, compared with 2.3 last year and 3.1 as at 30 June 2018. The company implemented a series of actions in the second half of 2018 to bring net debt down by € -186 million. The working capital decreased by € -156 million (versus 30 June 2018), mainly driven by successful cash collection actions, the impact of off-balance sheet factoring (€ 73 million of accounts receivable), and more standardized supplier payment terms. The average working capital on sales decreased to 20.4%.

In October 2018, Bekaert completed the refinancing of the outstanding debt incurred by Bridon-Bekaert Ropes Group (BBRG). This included: (1) the temporary refinancing through a financial covenant-free bridge loan with a group of banks for a maximum maturity of two years, preceding a permanent long-term funding decision; (2) the repayment of € 294 million to the BBRG lenders' syndicate; (3) the release of all related security interests; (4) the elimination of the related ring-fenced debt structure; and (5) significantly lower interest charges on the refinanced BBRG debt. The debt of BBRG had been consolidated in Bekaert's consolidated statements since the establishment of Bridon-Bekaert Ropes Group. As a result of this refinancing, all debt of the Bekaert Group is covenant-free.

Bekaert is investing in all continents to expand and upgrade the production capacity to the levels needed. Investments in property, plant and equipment amounted to € 198 million in 2018 and included major tire cord expansion programs in EMEA and Asia Pacific. Bekaert will start a greenfield investment in Quang Ngai Province in the central coastal area of Vietnam. The construction works will start in the course of the 2nd quarter of 2019. The plant will produce rubber reinforcement products and serve customers worldwide.

In addition to the 3 636 280 treasury shares held as of 31 December 2017, Bekaert purchased 352 000 own shares in the course of 2018. A total of 51 200 stock options were exercised in 2018 under Stock Option Plan 2010-2014 and Stock Option Plan 2. 51 200 treasury shares were used for that purpose. 35 048 treasury shares were transferred in the context of the Personal Shareholding Requirement Plan. As a result, Bekaert held an aggregate 3 902 032 treasury shares as of 31 December 2018.

Financial Review

Dividend

Financial results

Bekaert achieved an operating result (EBIT-Underlying) of € 210 million (versus € 301 million in 2017). This equates to a margin on sales of 4.9% (versus 7.3% in 2017). The one-offs amounted to € -63 million (€ +17 million in 2017) and included impairment and lay-off costs related to various restructuring programs and plant closures as well as to other asset impairments and write-offs. Including these one-offs, EBIT was € 147 million, representing an EBIT margin on sales of 3.4% (versus € 318 million or 7.8%). Underlying EBITDA was € 426 million (9.9% margin) compared with € 497 million (12.1%) and EBITDA reached € 387 million, or an EBITDA margin on sales of 9.0% (versus 12.4%).

Overhead expenses (underlying) decreased by € -13 million to 9.1% as a percentage of sales (versus 9.9% in 2017). Selling expenses were stable. The administrative expenses decreased by € -13 million (underlying) due to a lower variable remuneration and favorable currency effects. The reported administrative expenses included € -18 million one-off elements related to the closure of the plant in Figline (Italy), other lay-off expenses and

various corrective actions in BBRG. The research and development expenses amounted to € 65 million, about stable from last year. Underlying other operating revenues and expenses (€ +16 million versus € +1 million last year) mainly reflected an increase of royalty payments received from the Brazilian joint ventures and the positive impact from pension plan adjustments in Latin America. Reported other operating revenues and expenses (€ +33 million) included the gain on the sale of land and buildings related to the plants closed in Huizhou (China) and Shah Alam (Malaysia).

Interest income and expenses amounted to € -85 million, slightly lower than last year (€ -87 million). The lower interest expenses from the debt refinancing of BBRG were largely offset by increased interests from a higher average gross debt. Other financial income and expenses amounted to € -26 million (versus € -6 million last year) due to the amortized cost impact of the BBRG debt refinancing (including bank charges and fees on the repayment of the previous loans) and fees related to the buy-out of OTPP. Income taxes decreased from € -69 million to € -58 million due to lower profitability in various tax paying entities. As the combination of loss making entities only provided an immaterial tax offset to the tax expense incurred by the combination of profit making entities, the overall effective tax rate was 161%.

The share in the result of joint ventures and associated companies was € +25 million (versus € +27 million last year) due to the significantly weaker Brazilian real (-19.4% compared with the average rate of 2017).

The result for the period thus totaled € 3 million, compared with € 183 million in 2017. The result attributable to non-controlling interests was € -37 million (versus € -2 million) and mainly reflected the net loss representation of BBRG as non-controlling interest until the end of October of 2018. After non-controlling interests, the result for the period attributable to equity holders of Bekaert was € +40 million, compared with € +185 million last year. Earnings per share amounted to € 0.70, down from € +3.26 in 2017.

Balance sheet

As at 31 December 2018, shareholders' equity represented 34.1% of total assets, down from 35.6% in 2017. The gearing ratio (net debt to equity) was 76.0% (versus 72.7%).

Net debt was € 1 153 million, down from € 1 339 million as at 30 June 2018 and unchanged from € 1 151 million as at year-end 2017. Net debt on underlying EBITDA was 2.7, compared with 2.3 on 31 December 2017.

Cash flow statement

Cash from operating activities amounted to € 244 million, unchanged from € 244 million in 2017, as the lower cash generation was offset by a reduction in cash-outs to fund working capital.

Cash flow attributable to investing activities amounted to € -102 million (versus € -209 million): € -185 million related to substantially lower capital expenditure (intangibles and PP&E) while the net impact of acquisitions and divestments dropped from € 38 million to € 3 million. Proceeds from disposal of property from closed plants in China and Malaysia amounted to € 55 million.

Cash flows from financing activities totaled € -157 million (versus € +30 million in 2017). The major cash-ins from gross financial debt in 2018 as well as the repayments are mainly related to the debt restructuring of BBRG and the refinancing of a € 100 million bond.

NV Bekaert SA (statutory accounts)

The Belgium-based entity's sales amounted to € 375 million, compared with € 410 million in 2017. The operating profit before non-recurring results was € 42 million, compared with € 23 million last year, while non-recurring result as part of the operating result was nil in 2018, compared to € 50 million last year. The financial result was € 270 million (versus € 15 million in 2017) and included € 336 million dividends from Chinese operations. This led to a result for the period of € +315 million compared with € +91 million in 2017.

Financial Calendar

2018 results 1 March 2019 The CEO and the CFO ad interim of Bekaert will present the results to the investment community at 02:00 p.m. CET. This conference can be accessed live upon registration via the Bekaert website in listen-only mode.

2018 annual report available on www.bekaert.com	29	March	2019
First quarter trading update 2019	8	May	2019
General Meeting of Shareholders	8	May	2019
Dividend ex-date	9	May	2019
Dividend payable	13	May	2019
2019 half year results	26	July	2019
Third quarter trading update 2019	15	November	2019

Changes in the segment reporting

In line with the organizational changes, Bekaert's segment reporting will be changed in 2019. The new segmentation will drive transparency into the business dynamics of each reporting unit and replace the previous geographic segmentation, to which Bridon-Bekaert Ropes Group had been added as a separate reporting segment. The Group's business units (BU) are characterized by BU-specific product and market profiles, industry trends, cost drivers, and technology needs tailored to specific industry requirements.

Statement from the statutory auditor

The statutory auditor has confirmed that the audit procedures on the consolidated financial statements have been substantially completed and have revealed no material adjustments that would have to be made to the accounting information included in this press release. In preparing the consolidated financial statements, the same accounting policies and methods of computation have been used as in the 31 December 2017 annual consolidated financial statements, except for the changes entailed by the coming into effect of IFRS 9 'Financial Instruments' and IFRS 15 'Revenue from Contracts with Customers'. Both of these standards require retrospective restatement, but hold an option to report the restatement effect in the opening balance of the reporting period in which an entity first applies the standard. The Group elected that option and did not restate the comparative information for 2017; please refer to annex 8 'Restatement effects' in this report.

Statement from the responsible persons

The undersigned persons state that, to the best of their knowledge:

the consolidated financial statements of NV Bekaert SA and its subsidiaries as of 31 December 2018 have been prepared in accordance with the International Financial Reporting Standards, and give a true and fair view of the assets and liabilities, financial position and results of the whole of the companies included in the consolidation; and
the comments and analyses in this press release give a fair view of the development and the results of the business and of the position of the whole of the companies included in the consolidation.

On behalf of the Board of Directors,

Matthew Taylor - Chief Executive Officer Bert De Graeve - Chairman of the Board of Directors

Disclaimer

This press release may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Bekaert is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release in light of new information, future events or otherwise. Bekaert disclaims any liability for statements made or published by third parties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other press release issued by Bekaert.

Company Profile

Bekaert (www.bekaert.com) is a world market and technology leader in steel wire transformation and coating technologies. We pursue to be the preferred supplier for our steel wire products and solutions by continuously delivering superior value to our customers worldwide. Bekaert (Euronext Brussels: BEKB) is a global company with 30 000 employees worldwide, headquarters in Belgium and € 5 billion in combined revenue.

Annex 1: Press release 1 March 2019

Consolidated income statement

(in thousands of €)	2017	2018
Sales	4 098 247	4 305 269
Cost of sales	-3 396 431	-3 778 660
Gross profit	701 816	526 609

Selling expenses	-180 100	-179 651
Administrative expenses	-164 411	-167 346
Research and development expenses	-62 670	-65 368
Other operating revenues	48 863	72 578
Other operating expenses	-25 436	-39 942
Operating result (EBIT)	318 062	146 880
of which
EBIT - Underlying	301 095	210 140
One-off items	16 967	-63 260

Interest income	3 117	3 035
Interest expense	-89 852	-87 990
Other financial income and expenses	-6 408	-25 547
Result before taxes	224 919	36 378

Income taxes	-69 276	-58 465
Result after taxes (consolidated companies)	155 643	-22 087
Share in the results of joint ventures and associates	26 857	24 875
RESULT FOR THE PERIOD	182 500	2 788
Attributable to
equity holders of Bekaert	184 720	39 768
non-controlling interests	-2 220	-36 980
EARNINGS PER SHARE (in € per share)
Result for the period attributable to equity holders of Bekaert
Basic	3.26	0.70
Diluted (*)	2.74	0.51

(*) restated for 2017, cf. annex 8

Reported and Underlying

(in thousands of €)	2017	2017	2017	2018	2018	2018
		of which	of which		of which	of which
	Reported	underlying	one-offs	Reported	underlying	one-offs
Sales	4 098 247	4 098 247		4 305 269	4 305 269
Cost of sales	-3 396 431	-3 393 978	-2 453	-3 778 660	-3 720 317	-58 343
Gross profit	701 816	704 269	-2 453	526 609	584 952	-58 343

Selling expenses	-180 100	-179 400	-700	-179 651	-178 254	-1 397
Administrative expenses	-164 411	-161 905	-2 506	-167 346	-148 787	-18 559
Research and development expenses	-62 670	-62 640	-30	-65 368	-63 559	-1 809
Other operating revenues	48 863	14 278	34 585	72 578	27 463	45 115
Other operating expenses	-25 436	-13 507	-11 929	-39 942	-11 675	-28 267
Operating result (EBIT)	318 062	301 095	16 967	146 880	210 140	-63 260

Interest income	3 117			3 035
Interest expense	-89 852			-87 990
Other financial income and expenses	-6 408			-25 547
Result before taxes	224 919			36 378

Income taxes	-69 276			-58 465
Result after taxes (consolidated companies)	155 643			-22 087
Share in the results of joint ventures and associates	26 857			24 875
RESULT FOR THE PERIOD	182 500			2 788
Attributable to
equity holders of Bekaert	184 720			39 768
non-controlling interests	-2 220			-36 980

Annex 2: Press release 1 March 2019

Reconciliation of segment reporting

Key Figures per Segment

	Underlying
(in millions of €)	EMEA	N-AM	L-AM	APAC	GROUP1	BBRG	RECONC2	2018
Consolidated sales	1 335	618	692	1 197	-	463	-	4 305
Operating result (EBIT)	114	25	43	86	-59	-7	8	210
EBIT margin on sales	8.5%	4.0%	6.2%	7.2%	-	-1.5%	-	4.9%
Depreciation, amortization, impairment losses	69	13	17	97	8	29	-18	216
EBITDA	183	38	61	183	-52	22	-10	426
EBITDA margin on sales	13.7%	6.2%	8.7%	15.3%	-	4.8%	-	9.9%
Segment assets	973	367	477	1 175	189	561	-238	3 506
Segment liabilities	333	116	144	217	110	120	-132	908
Capital employed	641	251	333	958	79	440	-105	2 598
ROCE	16.8%	10.8%	12.9%	8.7%	-	-1.5%	-	8.0%
Capital expenditure - PP&E3	67	18	17	85	9	19	-17	198

					Reported
(in millions of €)	EMEA	N-AM	L-AM	APAC	GROUP1	BBRG	RECONC2	2018
Consolidated sales	1 335	618	692	1 197	-	463	-	4 305
Operating result (EBIT)	74	25	35	54	-69	-20	48	147
EBIT margin on sales Depreciation, amortization,	5.5%	4.0%	5.1%	4.5%	-	-4.3%	-	3.4%
impairment losses	80	13	19	142	8	36	-58	240
EBITDA	153	38	55	196	-61	16	-10	387
EBITDA margin on sales	11.5%	6.2%	7.9%	16.3%	-	3.4%	-	9.0%
Segment assets	973	367	477	1 175	189	561	-238	3 506
Segment liabilities	333	116	144	217	110	120	-132	908
Capital employed	641	251	333	958	79	440	-105	2 598
ROCE	10.9%	10.7%	10.6%	5.5%	-	-4.4%	-	5.6%
Capital expenditure - PP&E3	67	18	17	85	9	19	-17	198

¹ Group and business support

² Reconciliations

³ Gross increase of PP&E

Annex 3: Press release 1 March 2019

Consolidated statement of comprehensive income

(in thousands of €)	2017	2018
Result for the period	182 500	2 788
Other comprehensive income (OCI)
Other comprehensive income reclassifiable to income statement in subsequent periods
Exchange differences	-123 933	-35 725
Inflation adjustments	2 032	2 535
Cash flow hedges	-247	475
Available-for-sale investments	-1 389	-
Deferred taxes relating to reclassifiable OCI	-75	-76
OCI reclassifiable to income statement in subsequent periods,
after tax Other comprehensive income non-reclassifiable to income statement in subsequent periods:	-123 612	-32 791
Remeasurement gains and losses on defined-benefit plans	15 089	-1 387
Net fair value gain (+)/loss (-) on investments in equity instruments designated as at fair value through OCI	-	-5 311
Share of non-reclassifiable OCI of joint ventures and associates	16	21
Deferred taxes relating to non-reclassifiable OCI	-1 176	-3 707
OCI non-reclassifiable to income statement in subsequent
periods, after tax	13 929	-10 384
Other comprehensive income for the period	-109 683	-43 175
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	72 817	-40 387
Attributable to
equity holders of Bekaert	87 481	-79
non-controlling interests	-14 664	-40 308

Annex 4: Press release 1 March 2019

Consolidated balance sheet

(in thousands of €)	2017	2018
Non-current assets	2 124 225	2 049 559
Intangible assets	125 217	114 502
Goodwill	149 895	149 255
Property, plant and equipment	1 501 028	1 459 449
Investments in joint ventures and associates	165 424	153 671
Other non-current assets	41 944	34 279
Deferred tax assets	140 717	138 403
Current assets	2 320 506	2 399 930
Inventories	779 581	931 808
Bills of exchange received	55 633	57 727
Trade receivables	836 809	772 731
Other receivables	126 876	130 379
Short-term deposits	50 406	50 036
Cash and cash equivalents	418 779	398 273
Other current assets	44 329	58 430
Assets classified as held for sale	8 093	546
Total	4 444 731	4 449 489

Equity	1 583 036	1 516 002
Share capital	177 690	177 793
Share premium	37 278	37 751
Retained earnings	1 529 268	1 484 600
Other Group reserves	-256 581	-303 213
Equity attributable to equity holders of Bekaert	1 487 655	1 396 931
Non-controlling interests	95 381	119 071
Non-current liabilities	1 448 734	906 540
Employee benefit obligations	150 810	141 550
Provisions	46 074	29 031
Interest-bearing debt	1 180 347	686 665
Other non-current liabilities	27 121	11 402
Deferred tax liabilities	44 382	37 892
Current liabilities	1 412 961	2 026 947
Interest-bearing debt	454 401	942 041
Trade payables	665 196	778 438
Employee benefit obligations	130 204	118 427
Provisions	9 181	37 194
Income taxes payable	91 597	88 128
Other current liabilities	62 382	62 634
Liabilities associated with assets classified as held for sale	-	85
Total	4 444 731	4 449 489

Annex 5: Press release 1 March 2019

Consolidated statement of changes in equity

(in thousands of €)	2017	2018
Opening balance	1 597 893	1 583 036
Restatements (*)	-	-2 585
Opening balance (restated)	1 597 893	1 580 451
Total comprehensive income for the period	72 817	-40 387
Capital contribution by non-controlling interests	9 870	71
Effect of acquisitions and disposals	-17 020	44 914
Creation of new shares	762	576
Treasury shares transactions	3 978	-11 281
Dividends to shareholders of Bekaert	-62 441	-62 153
Dividends to non-controlling interests	-27 949	-2 881
Other	5 126	6 692
Closing balance	1 583 036	1 516 002

(*) Cf. annex 8

Annex 6: Press release 1 March 2019

Consolidated cash flow statement

(in thousands of €)	2017	2018
Operating result (EBIT)	318 062	146 880
Non-cash items included in operating result	191 588	268 272
Investing items included in operating result	-16 194	-31 261
Amounts used on provisions and employee benefit obligations	-50 098	-36 371
Income taxes paid	-87 059	-68 972
Gross cash flows from operating activities	356 299	278 548
Change in operating working capital	-109 544	-28 948
Other operating cash flows	-2 609	-5 880
Cash flows from operating activities	244 146	243 720

Other portfolio investments (*)	-342	-411
Proceeds from disposals of investments	37 596	2 835
Dividends received	28 615	24 113
Purchase of intangible assets (**)	-3 853	-3 698
Purchase of property, plant and equipment (**)	-272 666	-181 302
Proceeds from disposals of fixed assets	1 404	56 088
Cash flows from investing activities	-209 246	-102 375
Interest received	3 284	3 204
Interest paid	-60 066	-63 995
Gross dividends paid	-90 163	-64 593
Proceeds from long-term interest-bearing debt	179 274	468 356
Repayment of long-term interest-bearing debt	-29 829	-408 782
Cash flows from / to (-) short-term interest-bearing debt	69 629	-62 590
Treasury shares transactions	3 978	-11 280
Sales and purchases of NCI (*)	-17 020	-7 379
Other financing cash flows	-28 916	-10 234
Cash flows from financing activities	30 171	-157 293

Net increase or decrease (-) in cash and cash equivalents	65 071	-15 948

Cash and cash equivalents at the beginning of the period	365 546	418 779
Effect of exchange rate fluctuations	-20 079	-4 558
Cash and cash equivalents reclassified as held for sale	8 241	-
Cash and cash equivalents at the end of the period	418 779	398 273

(*) restated, cf. annex 8

(**) 2018: difference vs total capex is explained by related payable balances

Annex 7: Press release 1 March 2019

Additional key figures

(in € per share)	2017	2018

Number of existing shares at 31 December	60 373 841	60 408 441
Book value	24.64	23.12
Share price at 31 December	36.45	21.06
Weighted average number of shares
Basic	56 741 126	56 453 134
Diluted (*)	64 716 429	64 095 106
Result for the period attributable to equity holders of Bekaert
Basic	3.26	0.70
Diluted (*)	2.74	0.51
(*) restated for 2017
(in thousands of € - ratios)	2017	2018
EBITDA	509 602	386 504
EBITDA - Underlying	496 925	426 007
Depreciation and amortization and impairment losses	191 541	239 624
Capital employed	2 663 725	2 597 862
Operating working capital	887 586	874 656
Net debt	1 150 857	1 152 878
EBIT on sales	7.8%	3.4%
EBIT - Underlying on sales	7.3%	4.9%
EBITDA on sales	12.4%	9.0%
EBITDA - Underlying on sales	12.1%	9.9%
Equity on total assets	35.6%	34.1%
Gearing (net debt on equity)	72.7%	76.0%
Net debt on EBITDA	2.3	3.0
Net debt on EBITDA - Underlying	2.3	2.7
NV Bekaert SA - Statutory Profit and Loss Statement	2017	2018
(in thousands of €)
Sales	409 874	375 395
Operating result before non-recurring items	22 853	42 298
Non-recurring operational items	49 587	-736
Operating result after non-recurring items	72 440	41 562
Financial result before non-recurring items	19 334	386 535
Non-recurring financial items	-4 027	-116 860
Financial result after non-recurring items	15 307	269 675
Profit before income taxes	87 748	311 237
Income taxes	3 657	3 372
Result for the period	91 405	314 609

Annex 8: Press release 1 March 2019

Restatement effects

Following elements have given rise to restatements and/or reclassifications in these financial statements:

1. The coming into effect of IFRS 9 'Financial instruments' as from 1 January 2018 entailed two restatements. In accordance with the option elected by the Group not to restate comparative information for 2017 in the transition to the new standard, both restatements were accounted for through the 2018 opening balance:
a. Under the new IFRS 9 guidance on how to account for a modification of financial liabilities that does not lead to derecognition, the difference between the amortized cost of the financial liability at the date of modification and the discounted modified cash flows at the initial effective interest rate should be recognized in profit or loss, while under IAS 39 this difference was amortized over the remaining term of the modified liability. The new guidance was applied to the € 380 million convertible bond issued in 2016, the better part of which served to early settle an existing convertible bond. This resulted in the recognition of an increase in the amortized cost of the convertible bond of € 2.6 million against a decrease in retained earnings as at 1 January 2018. In accordance with the deferred tax policy used for the issuing company, the resulting decrease in deferred tax liabilities was offset by an equivalent net decrease in deferred tax assets.
b. Equity investments were formerly accounted for as available-for-sale financial assets. Under the new guidance on equity investments, the Group elected to carry its main non-consolidated strategic investments at fair value through OCI (FVTOCI). Consequently, the accumulated impairment losses (€ 10.2 million) on these investments formerly recognized through income statement were reclassified within equity from retained earnings to the revaluation reserve for equity investments carried at FVTOCI as at 1 January 2018. When an equity investment at FVTOCI is disposed, its revaluation reserve is not reclassified to income statement under IFRS 9.

	Restatement
Restated items	effects
in thousands of €	1 Jan 2018
Consolidated balance sheet
Deferred tax assets (a)	-646
Non-current assets	-646
Total assets	-646
Retained earnings (a)	-2 585
Retained earnings (b)	10 240
Revaluation reserve for non-consolidated equity investments (b)	-10 240
Equity attributable to equity holders of Bekaert	-2 585
Interest-bearing debt (a)	2 585
Deferred tax liabilities (a)	-646
Non-current liabilities	1 939
Total equity and liabilities	-646

(a) IFRS 9: effect of the convertible bond issued in 2016

(b) IFRS 9: effect of designating certain equity investments as at FVTOCI

Diluted earnings per share for 2017 have been restated for a previously incorrect interpretation of the effect of convertible bonds on the weighted average number of ordinary shares (diluted).

			Restatement
2017	Reported	Restated	effect
Weighted average number of ordinary shares (basic)	56 741 126	56 741 126	-
Dilution effect of share-based payment arrangements	560 669	560 669	-
Dilution effect of convertible bond	9 125 704	7 414 634	-1 711 070
Weighted average number of ordinary shares (diluted)	66 427 499	64 716 429	-1 711 070
2017			Restatement
in thousands of €	Reported	Restated	effect
Result for the period attributable to ordinary
shareholders of Bekaert	184 720	184 720	-
Effect on earnings of convertible bond	-7 249	-7 249	-
Diluted earnings	177 471	177 471	-
Diluted earnings per share (in €)	2.672	2.742	0.070

In accordance with IAS 7 'Statement of cash flows', cash flows relating to purchases or sales of noncontrolling interests should be reported as cash flows from financing activities and not as cash flows from investing activities. This resulted in a € -17.0 million reclassification in the comparative information for 2017. The amount relates to the purchase of the remaining non-controlling interests held by Ansteel in Bekaert (Chongqing) Steel Cord Co.

Restated items in thousands of €	Restatement effects 2017
Consolidated cash flow statement
Other portfolio investments	17 020
Cash flows from investing activities	17 020
Sales and purchases of NCI	-17 020
Cash flows from financing activities	-17 020

Annex 9: Press release 1 March 2019

Alternative performance measures: definitions and reasons for use

Metric	Definition	Reason for use
Capital employed (CE)	Working capital + net intangible assets + net goodwill + net property, plant and equipment. The weighted average CE is weighted by the number of periods that an entity has contributed to the consolidated result.	Capital employed consists of the main balance sheet items that operating management can actively and effectively control to optimize its financial performance, and serves as the denominator of ROCE.
Capital ratio (financial autonomy)	Equity relative to total assets.	This ratio provides a measure of the extent to which the Group is equity-financed.
Combined figures	Sum of consolidated companies + 100% of joint ventures and associates after elimination of intercompany transactions (if any). Examples: sales, capital expenditure, number of employees.	In addition to Consolidated figures, which only comprise controlled companies, combined figures provide useful insights of the actual size and performance of the Group including its joint ventures and associates.
EBIT	Operating result (earnings before interest and taxation).	EBIT consists of the main income statement items that operating management can actively and effectively control to optimize its profitability, and a.o. serves as the numerator of ROCE and EBIT interest coverage.
EBIT – underlying	EBIT before operating income and expenses that are related to restructuring programs, impairment losses, business combinations, business disposals, environmental provisions or other events and transactions that have a material one-off effect that is not inherent to the business.	EBIT – underlying is presented to enhance the reader's understanding of the operating profitability before one-off items, as it provides a better basis for comparison and extrapolation.
EBITDA	Operating result (EBIT) + depreciation, amortization and impairment of assets + negative goodwill.	EBITDA provides a measure of operating profitability before non-cash effects of past investment decisions.
EBITDA – underlying	EBITDA before operating income and expenses that are related to restructuring programs, impairment losses, business combinations, business disposals, environmental provisions or other events and transactions that have a material one-off effect that is not inherent to the business.	EBITDA – underlying is presented to enhance the reader's understanding of the operating profitability before one-off items and non-cash effects of past investment decisions, as it provides a better basis for comparison and extrapolation.
EBIT interest coverage	Operating result (EBIT) divided by net interest expense.	The EBIT interest coverage provides a measure of the Group's capability to service its debt through its operating profitability.
Gearing	Net debt relative to equity.	Gearing is a measure of the Group's financial leverage and shows the extent to which its operations are funded by lenders versus shareholders.
Margin on sales	EBIT, EBIT-underlying, EBITDA and EBITDA underlying on sales.	Each of these ratios provides a specific measure of operating profitability expressed as a percentage on sales.
Net capitalization	Net debt + equity.	Net capitalization is a measure of the Group's total financing from both lenders and shareholders.
Net debt	Interest-bearing debt net of current loans, non-current financial receivables and cash guarantees, short-term deposits, cash and cash equivalents.	Net debt is a measure of debt after deduction of financial assets that can be deployed to repay the gross debt.
Net debt on EBITDA	Net debt divided by EBITDA.	Net debt on EBITDA provides a measure of the Group's capability (expressed as a number of years) to repay its debt through its operating profitability.
Return on capital employed (ROCE)	Operating result (EBIT) relative to the weighted average capital employed.	ROCE provides a measure of the Group's operating profitability relative to the capital resources deployed and managed by operating management.
Return on equity (ROE)	Result for the period relative to average equity.	ROE provides a measure of the Group's net profitability relative to the capital resources provided by its shareholders.
Working capital (operating)	Inventories + trade receivables + bills of exchange received + advanced paid - trade payables - advances received - remuneration and social security payables - employment-related taxes.	Working capital includes all current assets and liabilities that operating management can actively and effectively control to optimize its financial performance. It represents the current component of capital employed.

AI Terminal

Bekaert NV

3915_er_2019-03-01_56eb37f1-b119-4a5d-a900-d4bab993755a.pdf