As per the publication date of this report, the Covid-19 virus spread is taking a huge toll on the economy and on people’s lives worldwide. It is heavily impacting industries and companies around the world, including ours. What we have achieved in 2019 has made us better equipped to deal with the challenges ahead. We are a robust company with a very resilient team and we are prepared to take on the unprecedented challenges posed by the pandemic.
In 2019 Bekaert made significant steps in improving underlying performance. We strengthened the balance sheet through better cash generation and improved our margins through a combination of stronger pricing actions and broad cost reductions, including the closure of loss-making operations.
Net debt in relation to underlying EBITDA decreased from 2.7 at the close of 2018 to 2.1 at the end of 2019. In addition, we refinanced our debt, spreading the maturity over a longer period and lowering the interest charges. All these actions significantly improved the balance sheet.
These measures led to an improvement in underlying EBIT of 15%, a significant increase in Operating Free Cash Flow, and a higher net profit, despite the substantial restructuring costs. The progress made in 2019 is a reflection of our decisiveness to deliver and the strong engagement of our teams. We want to thank our employees for their active contribution and irrepressible spirit.
As per the issuance date of this Annual Report, it is not yet clear to what extent and within which timeframe the markets will recover from the impact of Covid-19. The Board of Directors, the leadership team and our employees are committed to implementing all actions necessary to safeguard the health and safety of our people and their families, to understand and serve the customer needs, and to mitigate as far as possible the impact of the pandemic on our liquidity and results.
Chief Executive Officer
Chairman of the Board