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Introduction & Market Context
NV Bekaert SA (EBR:BEKB) released its Q1 2025 trading update on May 14, 2025, reporting a 3% year-over-year decline in consolidated sales amid challenging market conditions. The steel wire transformation and coatings company has been navigating a complex environment characterized by ongoing overcapacity concerns and uncertainty surrounding tariffs, particularly in its key markets.
Despite these headwinds, Bekaert’s stock has shown resilience, trading at €36.90 as of May 13, 2025, up 2.5% on the day and well above its 52-week low of €27.30, reflecting investor confidence in the company’s strategic positioning.
Quarterly Performance Highlights
Bekaert reported consolidated sales of €991 million for Q1 2025, representing a 3% decrease compared to the same period in 2024. Joint venture sales also declined slightly, falling 2% year-over-year to €214 million. The company noted that challenging market conditions are putting pressure on margins, though specific margin figures were not disclosed in the trading update.
As shown in the following consolidated sales bridge, several factors contributed to the overall sales decline:
The bridge illustrates how raw material impacts (-€23 million), negative price-mix effects (-€11 million), and volume decreases (-€12 million) were partially offset by positive foreign exchange impacts (+€9 million) and portfolio changes (+€4 million).
Detailed Financial Analysis
Performance varied significantly across Bekaert’s business segments, with geographic diversification proving to be a key strength in the current environment.
The Rubber Reinforcement segment, which represents the largest portion of Bekaert’s business, posted sales of €429 million in Q1 2025, down from €447 million in Q1 2024. Strong performance in China helped offset volume decreases in Europe and North America, highlighting the value of the company’s global footprint.
The following chart details the performance drivers for the Rubber Reinforcement segment:
The Steel Wire Solutions segment demonstrated resilience with sales of €280 million, only slightly below the €282 million reported in Q1 2024. The segment benefited from solid volume and mix performance, which nearly compensated for other negative factors.
The performance breakdown for Steel Wire Solutions shows the relative stability of this business unit:
Bridon-Bekaert Ropes Group (BBRG) was the only segment to report growth, with sales increasing to €141 million from €130 million in Q1 2024, primarily driven by portfolio changes:
Meanwhile, Specialty Businesses experienced the most significant decline, with sales dropping to €139 million from €165 million in Q1 2024, largely due to project delays in the US Sustainable Construction business and lower contributions from other subsegments:
Strategic Initiatives
A key focus of Bekaert’s presentation was its strategy to mitigate the impact of tariffs, particularly in the US market. The company emphasized that its global presence allows for production and sourcing shifts to adapt to changing trade policies.
As illustrated in the following charts, Bekaert has positioned itself well to minimize tariff exposure:
The data shows that 70% of US sales are local-for-local, with only 9% of imports coming from China. Similarly, 65% of wire rod for US business is locally sourced, with the remainder primarily coming from Brazil (23%) and other sources (12%). This strategic positioning has allowed Bekaert to successfully negotiate with customers to pass on additional costs related to tariffs.
The company also highlighted other strategic initiatives, including:
- Lower capital expenditure requirements for 2025
- Intensive focus on working capital management
- Ongoing €200 million share buyback program (approximately €50 million purchased to date)
- Proposed dividend of €1.90 per share
Forward-Looking Statements
Looking ahead, Bekaert provided a cautiously optimistic outlook for the remainder of 2025, while acknowledging the continued market challenges:
Management expects stable sales and underlying EBIT margins for 2025 compared to 2024, with a more equally weighted split between the first and second half of the year. This outlook assumes no changes to currently proposed tariffs and reflects the continuation of weak market conditions that began in the second half of 2024.
CEO Yves Kerstens emphasized that Bekaert’s strategic transformation has made the company more resilient in the face of current challenges, and that the financial impacts of tariffs have been minimal to date. However, he noted that business confidence and outlook remain fragile, particularly in sectors affected by tariff uncertainty.
Despite these challenges, Bekaert maintains a robust financial position, supported by its strong balance sheet and disciplined capital allocation approach, positioning the company to navigate the uncertain market environment while continuing to deliver value to shareholders.
Full presentation:
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