BENTELER mastered a 2018 full of challenges. Despite the turbulence in the global economy and within the sector, revenue topped 8 billion EUR for the first time and growth outpaced the market.
2018 financial year – record revenues and strategic adjustment
- Highest revenues in the Company´s history, 8.072 billion EUR
- BENTELER Automotive had successful start-ups in Eastern Europe
- BENTELER Steel/Tube – record revenues and successful ramp-up of the mill in
Shreveport, USA - BENTELER Distribution with increased revenues and operational improvements
The excellent order-book situation – and the strong growth associated with this – gave rise to costs above plan. Added to this were external factors such as the trade conflict between the US and China which started with punitive tariffs, and the introduction of the testing procedure for exhaust emissions, WLTP. In combination this led to an EBIT of 119.3 million EUR. The result of operating activities was 66 million EUR below that of 2017 (adjusted for a special effect from a land sale).
The BENTELER Group generated a consolidated net profit of 31.2 million EUR in the 2018 financial year. Total assets rose slightly, liquid assets remained at a high level, and the equity ratio was slightly above that of the previous year. As such the financing structure remains solid.
At the same time BENTELER made use of the year to adjust its strategic orientation. “We are placing our focus on balanced growth and increased profitability. In future we will be concentrating even more closely on our core business. As a process specialist we offer our customers excellent products, processes and services,” said Ralf Göttel, CEO of BENTELER International AG. “In addition, we will invest in a targeted way in selected areas that fit with our core competence – for example in the field of electromobility.”
Results of the Divisions
Although the market declined in the second half of the year, the Automotive Division generated revenues of 6.304 billion EUR in 2018, matching those of the previous year. This corresponds to a share of 76.2 percent of Group revenues. The start-up of the module plant in the Polish town of Września had a particularly positive effect, as did the growth in China. The excellent order-book situation also brought the challenge of increasing production in the form of new launches and ramp-ups. This incurred costs above plan. The markets them-selves are intact, which is why catch-up effects are expected.
The Steel/Tube Division achieved revenues in the year of report of 1.206 billion (share of Group revenues: 14.6 percent). This is an increase of 18.0 percent compared to 2017. EBIT, too, rose, attributable also to the capacity utilization of the German plants because of high demand in the US for OCTG tubes. In the second half-year significant progress was made in ramping up the hot rolling mill in Shreveport, USA. The trend in the US market makes it very clear that this major investment in the USA was strategically the right step.
The Distribution Division increased revenues by 6.3 percent in 2018 to 761 million EUR (share of Group revenues: 9.2 percent). Earnings before interest and tax (adjusted for a land sale in Switzerland) also rose – with the same sales volumes as in the previous year. This pleasing trend is based on now higher market prices, consistent operational improvements and rigorous adjustment of the product portfolio.
Outlook for 2019
The concentration on profitable growth mentioned above will start to take effect in 2020. In 2019 the Executive Board of the BENTELER Group is again expecting a significant increase in revenues, thanks to the very good order-book situation. With the initiatives already started and the measures still in the pipeline, BENTELER is well equipped to continue to be successful: In all three Divisions in 2019 an improvement in operating results is expected – and that despite the fact that political and economic developments around the world are not showing signs of quietening down.
Longer-term forecast
The main corporate goals of the BENTELER Group continue to be a constant, long-term increase in corporate value and maintaining financial independence. The basis for the Five-Year Plan is to increase profitability and competitiveness – whilst achieving balanced growth in all Divisions.
“Again in 2019 we are looking forward to developing solutions that make the difference for our customers,” said Ralf Göttel. He added, “On behalf of the entire Executive Board of BENTELER International AG I warmly thank our customers for the trust they have placed in us, and our employees for their tireless efforts.”