Message from the Chairman and the Chief Executive Officer

Message from the Chairman and the Chief Executive Officer


Dear reader,

In 2010 the world sighed with relief as economies worldwide showed signs of strong recovery from the global financial crisis that dominated the two previous years. Business in the emerging markets had already picked up in the second half of 2009. In the second quarter of 2010 the mature markets followed suit.

Overall, Bekaert achieved a strong performance in 2010. Having succeeded in securing our position in the challenging year 2009 thanks to swift cost-control measures and proactive production alignment, we were able to respond fast to the opportunities created in 2010 as demand picked up again. As a result, all of our plants recorded excellent capacity utilization.

Bekaert is well on track, we are proud to say. The operating result (EBIT) amounted to € 534 million or 16.4% margin on sales, while operational cash flow (EBITDA) grew to                  € 725 million and EBITDA on sales to 22.2%, both a historic high. In October we acknowledged our shareholders’ continued trust in our strategy by issuing a gross intermediate dividend of € 2 per share (pre-split).

On course by systematically following our strategy

The theme of this 2010 annual report is ‘Staying on course in a changing world’. It reflects our firm belief that Bekaert’s consistent strategy, relying on a diversified geographic presence and product portfolio, combined with innovation and operational excellence, pays off in an economic climate prone to geographic dynamics and cyclic fluctuations.

By systematically following our strategy we can respond swiftly to opportunities whenever and wherever these arise in the world. The worldwide economic recovery in 2010 brought Bekaert many such opportunities, which we seized quickly and decisively in both the mature and emerging markets.

In the mature markets recovery set in and sales demand developed positively throughout 2010. In all segments, except for the still beleaguered construction sector, customers were restocking to cater for new orders and also benefited from the upturn in the economy.

As regards the emerging markets, the recovery that had begun in 2009 continued throughout 2010. China remained a major consumer of Bekaert steel cord. South Asia and Eastern and Central Europe, too, recorded an upswing in demand while our customer portfolio continued to expand there.


Bekaert's quality products and unique flexibility in the area of renewable energy have ensured solid performance in the past years. The exceptional growth experienced in 2010, however, will be difficult to sustain as the market is increasingly subject to volatility of incentive programs, increased capacity, and uncertain technological development paths.


Consolidating the track towards sustainable growth

In 2010, we took a number of initiatives that will keep us on track for sustainable growth – both geographically and technologically – in the years to come. We invested heavily to support our growth strategy: in hiring and training employees around the world, in expanding production capacity, in a broader product portfolio, in technological leadership and in environmentally-friendly processes.

In the emerging markets we stepped up and broadened our investments. Not just in China, but also in India, Indonesia, Latin America, Central Europe and Russia. In Latin America, these efforts took the shape of further integration of our activities in Colombia, Ecuador, Venezuela and Peru, for example.

In 2010, we kept our investments in technological leadership on track too: we celebrated the official opening of the Bekaert India Technical Center near Pune (India) and of the Bekaert Asia Research and Development Center in Jiangyin, Jiangsu Province (China). These facilities represent important milestones in working better together with our customers in Asia.

Innovation at Bekaert is more than just a driver of economic growth. In 2010, China was also the backdrop for a landmark achievement in the sustainable development of our manufacturing footprint. We seized the opportunity of the expansion of our plant in Shenyang, Liaoning Province, to build the greenest Bekaert steel cord plant ever. In the areas of optimized energy conservation, reduced environmental impact and enhanced workspace comfort we achieved major improvements.

Determined to maintain our steady course

Bekaert continuously expands its presence in countries where industrial growth is predominant. In that sense, our global development reflects the global political and economical dynamics. Striking examples of new market conditions are the economic power balance shift to the East and the emergence of the automotive market in China and India. With a manufacturing footprint that is spanning the globe, we are particularly well equipped to monitor how the world is seeking to attain its geopolitical balance. It allows us to respond to new developments swiftly, too, by leveraging our balanced geographic positions.

Bekaert has always enjoyed the trust of its shareholders in the Bekaert strategy as we set out on our endeavors. We take this opportunity to thank them for their loyalty and trust.

The shareholder value we create is a consequence of our strategy. In order to keep creating shareholder value we will need to focus on business potential on the one hand and on the challenges that lay ahead on the other. The Bekaert values – resilience, trust and integrity – remain the foundation of all our actions.

In the coming years, we will keep implementing our strategy systematically by stepping up investments in the growth markets and in the development of our product portfolio. As our strategy is guiding us towards continued growth, one of our biggest challenges for the future lies in ensuring that our organizational structures support this growth while maintaining our corporate standards.

We are convinced that the track we have laid down for Bekaert is the right one. And we will keep consolidating that track together with our 27 000 employees worldwide. They have shown unequaled dedication to the better together philosophy that so accurately describes Bekaert’s overall approach. We extend our heartfelt gratitude to them and we are convinced that in 2011 they will again be the driving force behind another successful Bekaert year.

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