Thank you. Welcome everyone to the analyst call on our Q3 trading update.

As usual, I'll read out the Safe Harbor statement before passing on to Seppo Parvi, CFO, who will take us through the sales update, and then to Yves Kerstens, CEO, who will conclude and give an outlook before we take it into Q&A. This presentation 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 presentation as of its date, does not take any obligation to update any forward-looking statements contained in it in light of new information, future events, or otherwise, and we do not disclaim any liability for statements made or published by third parties, and we do not undertake any obligation to correct inaccurate data, information, conclusions, or opinions published by third parties in relation to this or any other publication issued by Bekaert.

I now hand over to Seppo.

Thank you, Dries. Let's start by looking at the top line development.

If I would describe shortly third quarter, it's fair to state that we had and experienced stable sales in the third quarter in difficult markets, and we have continued to focus very much on cash flow generation. Like-for-like sales in the third quarter were broadly in line with last year.

We saw some volume growth in core markets, but like said, we are very much also focused on cash flow and further cost improvements. If you look at the reported sales, we saw 3.8% decline due to the foreign exchange, that is a translation-related.

It relates to operations in US and China. Both currencies have weakened during the year, and obviously when convert into euro, our base currency, we see drop on the sales line.

Adjusting for M&A, as well as some capacity closures, that's another €30 million reduction on the reported sales bringing to €800 and €90 million like-for-like base in Q3 last year, 1% reduction there. Some positive volume improvement and development there, as well as then price mix reduction, mainly pass-through of the lower raw material costs.

Looking at the key drivers and 3% volume growth that we saw during the quarter, we had growth in energy and utilities sector in Steel Wire Solutions, that is transmission wires, especially on the US market. We had also volume growth in China for rubber reinforcement and happy to report that we were running our plants fully over there.

US flooring business was improving in the third quarter for sustainable construction business. However, we still saw some effects of the tariffs, but especially there's number of tenders increasing in data center business, but also in industrial and warehouse-related flooring projects were picking up, but not at the same level as we have been in the previous year.

In the steel ropes business, we saw weaker demand both in Europe and North America. Then moving to nine 9-month sales bridge, where we are year-to-date, and like-for-like sales decline was mainly driven by lower raw material costs.

If you look at the reported 9-month sales, we had about 2% negative effect from the FX, and the M&A and closures had the effect of €26 million. Like-for-like '24 sales were €2,931 million compared to €2 billion 833 million this year.

Then let's look at the various business units and businesses we are in, and let's start with Rubber Reinforcement, where, like said earlier, we saw volume growth both in China and North America. The picture was a bit mixed across regions.

In addition to volume growth in China, where we saw strong domestic markets, we had volume growth also in North America, but lower volumes in Europe, as well as in India, where we saw some increased competition from imports to the market. We have worked on optimizing our plant utilization, especially in China, that has helped us to support profitability and overhead coverage, as well as cash flow in the region.

Also happy to report and tell about new award recognition for our reinforcement innovation work done. We have received Green Point China Sustainable Case Award for advancing low carbon tire manufacturing in ultra and mega tensile solutions.

Then let's not forget our sales in Brazil. Joint venture in Rubber Reinforcement business had sales of €33 million in the third quarter, and these are not included in our consolidated sales, as I'm sure you are aware.

Then moving to Steel Wire Solutions, where we had strong volume growth in energy and utilities business, and happy to report that we had actually like-for-like basis 6% increase in the sales. We had strong volume growth, and higher volumes also in China, supported by strong automotive end market in addition to energy and utilities market, like mentioned earlier.

There you had to remember, if you look at the reported sales, that there's an effect of about 30, 3-0, €30 million from the SWS divestment in LATAM, Costa Rica, Ecuador, and Venezuela businesses that were finalized end of the first half of this year. Sales in Brazil joint venture, €166 million in the third quarter.

Again, to remind that those are not included in the consolidated sales. Before moving to next BU, just to remind and comment also that we are expanding production capacity in US, in Van Buren, as the grid investments are supporting demand for transmission wires, one of our key businesses over there.

We are leveraging on our local US footprint to enforce our position there. Then in BBRG, our ropes business, synthetics business is performing well.

However, in steel ropes, we have seen a bit softer market conditions. We have seen weak demand in North America, partly due to tariff uncertainties, but also in Europe from lower mining activity, and we expect soft demand to continue also during the rest of the year.

Synthetic business is performing well. Strong performance from the newly acquired Bexco and Flintstone.

Also integration of those businesses has been done well. We continue to optimize our production footprint with additional site closure now in Scotland, and we are now consolidating our activities to Belgium.

In A-Cords business, we were impacted by lower hoisting demand, especially lower elevator demand in China and Europe that reflected subdued construction environment. New long-term sales agreement was signed for elevator hoisting belts with a key OEM.

That is sort of also a bit take our position because earlier we were focusing more on cord side. Then Specialty, where we saw some positive signals in North American flooring market in the third quarter after the slow first half of the year.

Positive momentum in India and Middle East has also continued, and we see nice growth opportunities there going forward. Weak demand in Europe has impacted volumes and in prices due to the subdued construction market that was also visible already during the earlier part of the year.

On the tunneling side, we have won some new projects during the recent months and weeks, and that provides at us greater visibility for future volumes. To look at other segments in Specialty, in hydrogen, weak demand has continued, and that is also a reason why we had decided to pause production in Wetteren to address demand slowdown.

However, I want to remind that we do continue our hydrogen-related production in China and Japan, and we continue our development work with the key electrolyzer OEMs to continue our progress in the area and also to strengthen our position for the growth when that comes. Next to hydrogen, we have seen weak demand in filtration and fiber end markets.

In Combustion Technologies, that business has been resilient in North America and China, while there has been challenges in Europe. In hose and conveyor belts, we saw some volume growth in the third quarter.

Now handing over to you, Yves, on summary and outlook.

Thanks, Seppo. If you look at quarter three of this year, I would say good, stable sales, satisfied with the sales in a very challenging market environment, where we see some volume growth in some businesses and some regions, some country geographical mix evolution, and so we've been very well navigating the challenges or the potential headwinds of the tariffs.

We continue to focus on what we can control, and of course, that's cost optimization, that's balance sheet management, is cash flow generation. Let me give some comments on the footprint changes we've announced.

The consolidation of the synthetic ropes position in Bexco. As mentioned by Seppo, the business development performance, but also, I would say, pipeline of projects for synthetic ropes is developing very well, and so we concentrated all the production into the Bexco operations into Belgium.

On the other side, more driven by a market delay, as mentioned, we had unfortunately to put on hold the production site in Wetteren and focus supply from China and Japan for the business for the upcoming two, three years. We keep on focusing very much on good cost evolution, is both into SG&A, but also in our footprint evolution over the coming years to really be competitive in a global market, and we expect also very good cash flow generation for 2025.

We continue to scrutinize the CapEx spending, and since growth platforms are well invested, there's no additional CapEx needed there. We continue with the share buyback, where we are the half of the program of €200 million, €100 million has been completed year-to-date.

From a full-year outlook point of view, we are targeting a sales of €3.7 billion and an EBITU margin of 8%. Having said that, I hand over to Dries for the Q&A.

Yes, who will we take first in the queue for questions?

Thank you, and good morning. Have a couple of questions around Rubber Reinforcement and then a follow-up on on CapEx.

First on Rubber Reinforcement, China is fully utilizing capacity. Can you maybe give some or shed some light on the capacity utilization levels in the other regions?

Then I'm also very interested in the current profitability breakdown per per region, if you can shed some light on on that, yeah, how is China doing versus the rest is basically the question. Then also is there any impact from from Zenit or from competitive pressures on on pricing in in China, if you can also elaborate on that?

That's on Rubber Reinforcement. Then the follow-up on CapEx is, can you update us on, yeah, given the investments you're you're starting in the US or you're undertaking in the US, how much the the full-year CapEx budget would then would then be, and maybe also shed already a light on on 2026 regarding CapEx?

Those were the questions. Thank you.

Thanks, Wim, for the questions. I propose I start with the RR on the capacity utilization and also on the competitive landscape, and then Seppo can give a perspective on what that means in terms of profitability by region.

Basically, as mentioned, strong demand in all automotive sector in China and a pull-through to tire cord, plants are fully loaded between 95%, 100% fully utilization. We continue to work, of course, to optimize the output of the existing footprint we have over there.

In terms of competitive landscape, the overcapacity, as mentioned before, has been there before the last couple of years, correct? No drastic change there except then Zenit further scaling up, but you see that we are holding a very good position in China and a good balance of market share and profitability.

That I would say. Then in terms of the regional mix, I think you asked Europe and you said Europe...

Yeah.

...and US. From a figures point of view, top of my mind, I think we'll be around 60%, 65% of utilization in Europe and US, close to 70%, yeah.

When it comes to regional profitability, this, of course, a trading update, we don't go into profit and loss more in detail, but on more general higher levels. I think the challenge, of course, is that when looking at the profitability in some regions, and as the volumes are shifting more and more to China and more the production in China, is, of course, that how you manage your business portfolio.

There our team is working very much on focusing on customers who appreciate quality, service, innovative products, performance, and there we are able to, of course, get better margins than on those customers who are only interested into volume and the good of volume. I think there our team has been doing good job.

That if you look at the year-to-date figures we reported for the first half in RR, I think it's a proof point that we have been able to keep profitability on a good level in RR despite the pressures on profitability-related pricing of some of the competitors. Then your question on capital expenditure, as Yves mentioned, we have €145 million for this year as expected CapEx.

We are well invested and in our growth platforms. €145 million is reasonable figure keeping in mind our maintenance needs, which is roughly half of that 145, and that leaves us still with CapEx that we can spend on some growth projects, as well as improvement projects, as well as, for instance, energy efficiency improvements that we are working on in various plants.

When it comes to next year CapEx, we will come with more detailed guidance related to next year in connection to our full-year report in February, and then we can share with you more outlook there.

Yeah. Wim, if I'm right, you had also a question on CapEx in the US, is that correct?

No, it was a more general CapEx given that you announced some investments in the US, but I think the question has been answered. Thank you very much.

All right. Thank you.

Can you hear me now? Yes,

Good morning. There I am.

Thanks. Sorry.

Good morning. Two questions, please.

On your margin guidance, you've lowered that, let's say, from the range 8 8.5% to the lower end, to 8%. Where do you see the gap, let's say, the difference between those margins versus a couple of months ago?

Why have you lowered that to the lower end? Let's put it this way.

That's my first question. Secondly, on the import tariffs in the US, have you been able to pass it on all now, or is there still some to come?

How is the local demand environment reacting? Do you see impacts of these tariffs, or yeah, some words on that, please.

Thank you. Frank,

I propose I start with the last one on the tariffs in the US and the situation on the economic activity in our volumes there. I think we can say that we are now in a stable situation, correct, where the imported tariffs are clear, translate also in terms of agreements with our customers, what it means in terms of pricing.

We've seen, of course, a local uptick in the wire rod price in the US as an input material, and that means also for us translating that to our customers, and that has been done. Secondly, we see a slightly better local demand, but not yet, I would say, to the expected benefit of the import duties, which is to promote local production.

I think it's too early to see that, but certainly we see a slightly increase in that amount for local production. Then

when it comes to 8% EBITU margin that we are guiding now for full year, first of all, like you said, it is within the guidance range we had given earlier from 8% to 8.5%, but at the lower end of the range. If you look at the businesses and also like commented, I think we have seen positive momentum continue in SWS, as an example, but also like mentioned in the report, we have seen the soft market to continue on steel ropes, as an example.

We see still quite a lot of uncertainties when it comes to year-end in many other businesses. Like construction, we saw some improvement in the volumes in Q3, but winter months are always a bit shaky in construction business, and typically they slow down.

In some other businesses as well, I think it's very much still around the uncertainties that we have seen and continue to see, partly because of the tariffs and partly because of the economic situation, which is not really picking up currently compared to past.

Thanks. Thank you very much.

Hey, hello. Thank you for taking my questions.

On Steel Wire Solutions and BBRG, I think last quarter there were delays in American energy and utility sector that was attributed to the tariff uncertainty. Now this quarter, I see that this is somewhat resolved, reflected in the order book.

However, in BBRG, that uncertainty persists. Could you maybe elaborate on the uncertainties or the differences in the underlying dynamics between the two segments and maybe explain why the uncertainty has been alleviated for one and not the other?

Then second question, if you care to give an update on the mid-term guidance, because I think there's mid-term guidance of higher than 10% EBIT margins. Do you now expect that to be like '27 or '28?

I know you have never pinned down a date, but it would be handy to know. Then third question would be probably a quick one.

It's basically on the steel tariffs in Europe. I think as of next year, steel tariffs are going to be implemented.

Would you consider that a net positive or a net negative for Bekaert in the current state that the tariffs are going to be implemented? Thank you very much.

All right, Alexander. Good.

Let me take them one by one, and please, Seppo, fill in to complement. Your first question was about the difference about business opportunity or challenge for SWS and BBRG in the US based on the tariffs.

What we see, SWS, the main business we do in energy and utilities is basically the reinforcement cable for overhead conductors. The initial situation in the US was that, let's say, the import duties on the steel components, but not on the finished conductors.

That has been through the local businesses and ecosystem players clarified, correct, and there is a more competitive situation again now for local production. I think it was a time to, I would say, settle down the tariff setup for the full value chain.

We saw that in Q3 and also for the rest of the year a good continuation of that business. While that value chain or supply chain setup for ropes is different, correct, there is a local production, there is export to Canada, there's another competitive landscape than in SWS, where there are couple of competitors for these finished or the reinforcement cables for conductors, while, of course, the competitive landscape on ropes is different.

There's a really clear driver why that is slightly improving. Then on the mid-term guidance, as communicated, I think the mid of the year, correct, in the Capital Markets Day based on the situation, the plans, and the outlook on the sustainability agenda that we saw in '23, we were predicting a 10% EBIT levels from 2026 onwards.

We already updated in the last updates that projection, I have to say, based on the delay in the growth platforms and driven by a different sustainability agenda on hydrogen and also some other segments like the floating offshore wind. We moved that target to a mid-term targets without specific date and will mainly dependent on the program of further scaling up new growth platforms, and also economic situation.

The good thing is that with all the actions we've been taking, we will get a lot of operational leverage, which means that with an economic uptick, that should certainly be a lever to work towards that 10% EBIT. I think then the last question, if my memory is good, was about Europe, correct?

Steel tariffs.

Steel tariffs. Steel tariffs in Europe, yeah.

Good. I think we are still in the middle of the deployment of the policies of the European Commission, correct, which want to safeguard the steel industry in Europe with a reduction of the quota on tariff-free imports and also a doubling on the import duties, correct.

This is mid of next year, if I'm right, will be the implementation date, so that's in full proper preparation. Still need to be voted in the European Parliament.

We will have to see, we are monitoring same like we did for the US in terms of our supply chain, our flows, our competitive situation, what it means for the different businesses and the different flows. Coming back to the intention, to protect the steel industry, but it's not only to protect upstream, but it's also to make sure that the whole steel industry in Europe is having fair competition with imports.

I think these discussion are, if I'm right informed, still ongoing on the European level to make sure how the full value chain in the steel will have a fair playing field. A little bit too early to tell concrete, but we can confirm that we are clearly close to it and monitoring what opportunities and challenges this gives, and we will adopt accordingly.

Of course, key is that like in the case of US tariffs, we will monitor situation and then react fast if we see that the steel prices are increasing to pass through the raw material price changes, as always the logic being. That remains to be seen what is the effect and when.

Correct, Seppo. If you look from the intention of the Metal and Steel Act for Europe is to make the whole steel industry more competitive, and that should not lead to price increases normally, but should lead into more local production, quite more competitiveness for the whole industry.

Thank you, operator. Good morning, gentlemen.

A number of questions. I'll do them one by one.

Yves, coming back to the European import duties, if I understood correctly, that in the US, the local wire rod prices have gone up after the import duties. We don't know the outcome yet of the European vote, but let's assume that Europe votes for these import duties, wouldn't it be fair to assume that prices in Europe would also go up?

If so, given the price pressure that we've seen lately for various reasons, how would you deal with that in that situation? That would be question one.

Good. Let's see, Martijn, what's going to happen.

It's correct that you see that the first impact in the US was wire rod price up, but the normal intended of the measure is that there would be more local steel production, correct, which the utilization of the mills in US and Europe are low. That's also why these protective measures are taken.

Economically, people should expect a price reduction and efficiency to make the whole downstream industry more competitive. I think we need to monitor and see how it plays out first in the US, but then also, and you're right, the next step is here in Europe.

If it's, let's say, two scenarios, if it would lead to wire rod prices increase in Europe, a couple of levers we have is how much we source wire rod locally here in Europe and how much we import, including the free quota that there are, correct, to have a competitive offering. Secondly, is on some of the product segments, depending on the competitive landscape, do we compete with local competitors, do we compete with import products, we will pass through, correct, these increases like we've been doing in the US.

There could be third segments where the competitive landscape is strengthening or where we would, on the other hand, have more competitive advantage of being local. I think your assessment is right, that we have to see what's going to happen.

That's fair. Then on RR, forgetting about Q4, can you tell us a little bit what your clients are saying when they talk about 2026 in the truck bus segment and also in the PCR light commercial vehicle segment?

What are they telling you in terms of well, RFPs, RFQs, just a general sense of how they're thinking about 2026, please?

Of course, it's a little bit earlier. We're in the discussions with our customers.

That we make with most of them pretty long-term agreements for the upcoming years and have long-term relationship, and so we're in the midst of discussing the volumes, the shares. I think in general, I would say, without disclosing specifics, but overall, the tire demand is a pretty mature business, correct, in terms of global demand, with left and right some growth, but also let's assume on average stable plus +1%, 2% growth, moderate growth in the whole tire industry.

Then you have the evolution of the competitive landscape of the tire makers between the Indian, Asian, European, US players, and then we need to see their actions, correct. We've seen evolutions in market share of some spare players, and because these players are not standing still, and they are taking actions to recover market share.

That's what we expect for next year. Again, I want to repeat, we are in a good position that we are supplying all of them, and we are present in all regions, and with that dynamic, I see playing out next year.

Good. Thank you.

Then moving on to BBRG and specifically A-Cords. A-Cords volume was down in 2024 by roughly 1%, year-to-date -7%, that's mainly elevator-driven.

Can you talk a little bit about what you're seeing specifically in the elevator business, not so much the regions, that's specified in the press release, but talk a little bit about competition, perhaps also touching a little bit on the demand side? Non-resi Europe is not going to improve material, China has plans, but they've had plans in before.

What are your thoughts on the elevator market going forward?

From a competitive landscape, we don't see an evolution or new elements in the advanced cords there. It's, as you mentioned rightly, the downturn we are in, first of all, it's still good business for us, but, of course, from a top line point of view, it's linked to the China construction.

We know that half of the elevators are installed and are maintained in China, so that construction market revitalization in China is a key role. What are we doing in the meantime as a player is further, let's say, work on innovation with our main customers and also being part of their strategic approaches into markets like China, for example.

That's how we are working on this segment.

There's no immediate need to do something about the production footprint at this point in time?

No. Do you mean in terms of expansion or in terms of different locations?

Cost containment, correct.

No, we have no expansion, but... How to deal with lower...

No. Also no need to right-size.

Small adjustments, but not really significant.

More normal continuous improvement type of actions, but no capacity reduction needs, if that's what you refer to.

Okay. Great.

Thank you. My last question, with regards to the additional cost-saving measures that you've announced, can you elaborate a little bit on the effects of those cost savings, in millions of euros, and when to expect them?

What do you mean exactly with that optimizing capacity in Japan and I can't think of the other region? Maybe a little bit of additional color there, please.

Let me start with helicopter view, and then Seppo can chime in with how it flows to the P&L and what we expect. I think it's not new what I'm sharing is that the strategy from an organization point of view is to go really to a BU-centric organization where each of the business units have really end-to-end responsibilities and capabilities.

One of the streams is that we've been right-sizing and making a leaner corporate structure and integrating as much as possible into the BUs, that's one. A second initiative we are taking, and that's continuously, is, of course, on the journey of shared services, digitalization, and expanding that, bringing shared services together of all the function, having really integration and digitizing.

There are initiatives ongoing, some announced, on footprint consolidation. We, of course, are competing sometimes with competitors who have a bigger size, more scale, it's important that through the journey of the footprint we continue to look at opportunities.

That doesn't mean closure of factories, doesn't mean always because the business is going down. Take the example of synthetic ropes, where the business is growing year-on-year, but we consolidate, we strengthen the footprint depending on the needs of the local.

Other driver of initiatives is the synergies between the plants. Even if we have different locations, how do we manage plants across businesses?

There's a number of initiatives that we take step-by-step, making the organization lean and agile. The big benefit we are creating is that despite some of the volume challenges, we deliver strong performance, and we, of course, have good operational leverage moving forward.

Then more specifically on overhead cost improvements and reductions and SG&A-related actions, a good proof point is that if you look back to our first-half report, you could see there already €20 million plus reduction on overheads, and we continue that reduction program through the rest of the year also going beyond new year. We keep continuously focus on those costs.

That means streamlining the organization and taking actions to reduce costs.

All right. Thank you very much, gentlemen.

Those were my questions.

Yep.

Hi. Good morning.

My first question is a follow-up on the capacity utilization in the Rubber Reinforcement division in China. If I understand, the capacity is fully loaded, and do you expect to increase this capacity?

Do you think that maybe you can be more selective right now, and in the future, you have a high pricing power, and maybe in the future your pricing power will be lower if you cannot increase the capacity?

Good. No.

It's correct that utilization is high this year, was also last year pretty high, even a little bit more higher this year, correct, through the strong demand, and that's great. We have four plants in China.

We have no plans to expand capacity in the near term, correct. As mentioned, there is since more than 10 years or decades overcapacity in the China tire cord market.

In that context, we've been performing very well on selecting, as Seppo said, the businesses we want to have and the customer we want to work with, and that remains our strategy. Having said that, within the four walls, I would say, of course, like every industrial company, we are doing, let's say, optimization to maximize what we call the OEE and the equipment utilization, to improve the output and create more leverage, but we have currently no plans to expand capacity in China.

Thank you. Maybe for the Steel Wire Solution, could you give us a kind of indication of the split between the height volume in China in automotive and the grid investment in the US, which part reflect the price increase and which part reflect the volume increase in this division?

The most relevant is the energy utilities in the US, that's the bigger driver than automotive.

Okay. Thank you.

Yes, good morning. Thanks.

Two questions from my end. First one is on pricing.

When you would separate the impact from the pass-through effect in your group revenue, are there strong differences between the different divisions? Then secondly, a follow-up on Alexandre's question on EU trade action, can you share your current sourcing distribution in Europe?

How much is now being sourced from Asia? Thanks.

Yeah. Good, let me take the second one, and perhaps, Seppo, you could take the first one.

If I understand correctly, Steijn, your question is on our sourcing in Europe on wire rod and steel, correct? Is that your question?

Correct. Yes.

Yes. Yeah.

Yeah. Correct.

For Europe, we have a pretty local-for-local sourcing strategy with wire rod players, above 80% is sourced locally, complemented with some other sources coming from UK or even import Japan depending on the wire rod grade and the needs we have. In summary, it's basically a local-for-local today, but we have flexibility on what we can do.

Then when it comes to pricing at BUs, I would say that we have a good capability in all BUs across the board to pass through the raw material price changes to our customers. That works well, and we are very much on top of that and follow very carefully continuously that we are not falling behind.

I think that the pricing differences and developments is then more driven by mixing changes when it comes to product portfolio or geographical mix. Example in construction, for instance, volumes in US has been lower in relative terms compared to US that has meant that average prices are different because of the different markets served, or in SWS, for instance, there's been a bit more agri compared to past versus other businesses.

Those are driving sometimes up or down the average price, but that's then a difference compared to pass-through mechanism of the raw material price changes.

I think in the past you separated the price/mix from the pass-through at least on group level. Can you do this for Q3?

It's about 50/50 in the latest quarter.

Okay. All right.

Thank you.

No, thanks for first of all joining the call. Thanks for the good questions.

Hopefully, that our perspective gives you some additional insights, and wish you a nice day and nice weekend. Thank you very much.

Thank you.