Bekaert’s Liquidity Overhaul: A Catalyst for Resilience and Growth in Volatile Markets

In a world where economic cycles loom large and market volatility reigns, companies with robust liquidity and strategic agility are the ones poised to thrive. Bekaert NV (Bekaert), a global leader in advanced materials and specialty steel, has just unveiled critical upgrades to its liquidity framework—moves that not only fortify its financial position but also create compelling opportunities for investors. Let’s dissect how these changes position Bekaert as a standout play in cyclical markets and why now is the time to act.

The Liquidity Makeover: Stronger Foundations for Uncertain Times

Bekaert’s renewed €300 million revolving credit facility, extended to a five-year tenor, represents a 50% increase from its prior €200 million facility. Paired with a $300 million multi-currency facility (a 20% expansion over its predecessor), this restructuring creates a liquidity buffer of over €500 million—a critical shield against macroeconomic headwinds. The extended terms reduce refinancing risks, allowing Bekaert to focus on executing its growth strategy without pressure to renegotiate credit in volatile markets.

The terms also reflect Bekaert’s improved creditworthiness: interest rates and margins have been reduced compared to prior agreements, slashing borrowing costs and freeing up cash flow. This efficiency is amplified by the company’s low net debt of €283 million (net debt/EBITDA ratio of just 0.5x), which leaves ample room to capitalize on opportunities without overleveraging.

Dynamic Capital Management: A Playbook for Shareholder Value

Bekaert’s €200 million share buyback program is a masterclass in returning capital to shareholders while maintaining flexibility. Recent transactions highlight its tactical precision:

• In May 2025 alone, Bekaert repurchased 2,800 shares at an average price of €35.70, while strategically selling 1,800 shares to rebalance its liquidity portfolio.
• Total owned shares now stand at 5.96% of outstanding stock, a level that signals confidence in intrinsic value while avoiding overexposure.

This approach creates a self-reinforcing cycle: reduced shares boost EPS, attract investors, and support share price stability. Combined with a 6% dividend hike to €1.90 per share, Bekaert offers both capital appreciation and income potential—a rare dual appeal in today’s markets.

Navigating Cyclical Markets: Why Bekaert’s Edge Matters

Cyclical industries like steel and advanced materials are inherently volatile. Bekaert’s upgrades position it to capitalize on upswings and weather downturns:

1. Resilience Through Diversification:
2. Its portfolio spans high-margin segments (e.g., coated steel for automotive, oil-country tubular goods) and low-risk recurring revenue streams (e.g., safety products).

3. Recent divestitures of commoditized South American assets further sharpen its focus on premium, defensible businesses.

4. Operational Discipline:

5. Despite a 8.6% sales dip in 2024, Bekaert maintained an 8.8% EBITu margin, demonstrating cost control.

6. A €193 million free cash flow in 2024 underscores its ability to fund buybacks and dividends without diluting liquidity.

7. Strategic Liquidity Flexibility:

8. The ability to dynamically buy or sell shares under its liquidity agreement (e.g., net sales in April 2025 to adjust to market sentiment) allows Bekaert to optimize its capital structure in real time.

Investment Thesis: Act Now—The Catalysts Are Aligned

The pieces are falling into place for Bekaert shareholders:

• Near-Term Catalyst: Completion of its current €25 million buyback tranche (with over 700,000 shares repurchased in early 2025) will further reduce dilution and signal confidence in undervalued stock.
• Valuation Advantage: At 12.5x forward P/E (vs. sector averages of 15–18x), Bekaert offers a margin of safety.
• Long-Term Growth: Its materials science expertise positions it to capture demand in EVs, renewable energy, and infrastructure—sectors with multi-year tailwinds.

Risks? Yes—But Manageable

No investment is risk-free. Bekaert faces headwinds like trade tariffs and raw material price swings. However, its diversified customer base (across geographies and industries), low leverage, and cash-rich balance sheet mitigate these risks. The liquidity agreement’s extended tenor also buys time to navigate disruptions.

Final Call: Bekaert is a Buy

Bekaert’s liquidity overhaul and capital management strategy are not just defensive moves—they’re a blueprint for outperforming in volatile markets. With a strong balance sheet, shareholder-friendly policies, and exposure to high-growth sectors, Bekaert is primed to deliver asymmetric upside. Investors ignoring this opportunity risk missing a company that’s quietly becoming a titan of resilience and growth.

Action Items:
1. Add Bekaert to your watchlist.
2. Monitor upcoming share repurchase updates and dividend policy announcements.
3. Consider a position now at current valuations—waiting could mean paying a premium later.

The cycle is turning. Bekaert’s got the tools to lead it.

Investor takeaway: Bekaert’s strategic liquidity upgrades and shareholder-focused capital management make it a rare blend of safety and growth—ideal for portfolios navigating today’s uncertain markets.