February 28, 2013

Overcapacity in most markets and an overall slowdown in global demand led to fierce competition and persistent price and margin pressure in 2012. The sawing wire business collapsed even further in 2012 and the measures taken to rightsize the respective activities with the new business reality substantially affected Bekaert’s financial performance for the year. The company incurred a total of € 202 million non-recurring costs, of which € 117 million related directly to the restructuring and impairments in the sawing wire activities, and € 85 million to other realignment measures.

Notwithstanding this difficult economic and business climate, Bekaert managed to achieve stable sales volumes and a solid cash flow from operating activities, and significantly reduced its net debt position.

• Consolidated sales of € 3.5 billion (+3.6%) and combined sales of € 4.4 billion (-4.6%)

• Gross profit of € 479 million (13.8% margin) compared with € 651 million (19.5%)

• EBITDA of € 275 million (7.9%) compared with € 497 million (14.9%)

The company continued to invest in future growth while strongly reducing net debt:

• R&D expenses totaled € 69 million, representing 2% of sales

• Capital expenditures reached € 127 million

• Net debt decreased to € 700 million from € 856 million, resulting in a net debt on REBITDA of 2.1

Market Developments

Bekaert is active in many sectors. The largest markets for Bekaert’s products are the automotive, energy and construction sectors. In the automotive sector, sales demand was down in our markets. Weak OEM markets in Europe, a global downturn of truck sales, tire replacement delays in most markets, and increased competition as a result of overcapacity and currency-driven import flows, created unfavorable business conditions on a global scale. While solar energy market conditions further worsened at a global level, other energy-related sectors continued to perform well across different applications. In construction markets, Bekaert was able to gain market share in difficult economic circumstances thanks to successful product innovation.