Bekaert Textiles, the world’s leading specialist for the development and manufacturing of woven and knitted mattress textiles, was added to the Haniel Group’s portfolio in June 2015. The company has continued its previous growth path since that time, with both revenue and operating profit coming in significantly positive.
Market position further expanded
Bekaert Textiles is a growth-oriented company that seeks the long-term expansion of its global market position through both organic growth and acquisitions. This growth will be achieved in existing regional markets on the one hand, but also by entering new, as yet nottapped markets. In addition to the search for attractive acquisition targets, the division’s emphasis in its first months as a member of the Haniel Group was on organically strengthening its market position.
Supported by a growing mattress market, in 2015 Bekaert Textiles succeeded in further expanding its position in the market segment for mattress textiles. The decidedly positive business development in the US, Argentina and Asia contributed in particular to that achievement. This success was due to the company’s consistent focus on quality, service, and innovation. This understanding of the business is also followed in a targeted sales approach: As part of a 360-degree approach centred on the customers’ needs, Bekaert Textiles has in-depth discussions with customers on all decisive corporate levels in order to use specific solutions to increase added value for the customers. Among the key departments included in the customer dialog are Sales & Marketing, Design, Development, Finance, but also Production, Logistics and Procurement. Beyond this, the company further improved its go-to market strategy and invested in its sales force, mainly in emerging markets in order to expand the geographical reach.
The market for mattress textiles is characterised by a long-term trend towards higher-value materials, which is attributable in particular to the increasing prosperity and the concomitant readiness to purchase upmarket mattresses. The upmarket materials include primarily knitted mattress textiles because – in addition to special product characteristics such as promoting health – these textiles enable the use of sophisticated, three-dimensional designs. Due to its many years’ experience with knitted textiles, Bekaert Textiles can benefit from this trend and hence from high growth rates and higher margins in this product area.
Cost initiatives successfully continued
In addition to focusing on sales, the company continued two initiatives in 2015 to reduce costs by leveraging the international setup of the company. Lean manufacturing has been rolled out to all production facilities and has increasingly delivered savings. In addition, the centralisation and standardisation of yarn purchases was an important part of the procurement initiative. With the growing share of centrally sourced yarns, Bekaert Textiles managed to increase its buying power and further reduce yarn prices. Low oil prices and favourable capacities with its suppliers also had a positive effect on the company’s costs.
Encouraging revenue and operating profit
In a positive market environment and supported by the strategic initiatives, Bekaert Textiles generated revenue of EUR 139 million from June to December 2015. The revenue trend was encouraging, driven by the company’s solid business growth, first and foremost in the US, Argentina and Asia. The growing demand for knitted mattress textiles also contributed to that achievement. Its share of total revenue amounted to almost 50 per cent in 2015. The remaining revenue shares were attributable primarily to woven mattress textiles, but also to a small extent to other products such as ready-made mattress covers.
Development of operating profit at Bekaert Textiles was encouraging amounting to EUR 16 million in the period from June to December 2015. In addition to the increased share of upmarket and thus higher-margin mattress textiles, the procurement initiative introduced and the lean manufacturing initiative made a positive contribution to this result. Operating profit was weighed down by the scheduled amortization arising from the purchase price allocation amounting to EUR 5 million. Adjusted for the scheduled amortization arising from the purchase price allocation, the operating profit was EUR 21 million. Overall, the performance of Bekaert Textiles exceeded expectations and was downright positive in 2015.
* The figures refer to the period from June 2015 through December 2015.