UPDATE 1-Bekaert brings in new CEO to reverse profit, value dive
* CEO, chairman changes set for May 2014
* Matthew Taylor to replace CEO Bart De Graeve
* Bekaert hit by Asian competition, sawing wire market crash
* Seeks improved operating margin
BRUSSELS, Aug 27 (Reuters) - Steel cable and wire maker Bekaert is banking on a new chief executive to restore profits and a share price that have been hollowed out by Asian competitors.
The Belgian company, whose steel wire reinforces a quarter of the world's automotive tyres, on Tuesday named Malcolm Taylor to take over from Bert De Graeve, the CEO since 2006 who will replace chairman Baron Paul Buysse.
Bekaert is facing fierce competition, particularly from Asian peers such as Xingda, and its market for sawing wire used to make solar panels has collapsed since Chinese rivals ramped up capacity.
Some 70 percent of its market value has been eroded since its peak in 2011, prompting a restructuring designed to cut 1,850 jobs and save around 100 million euros a year.
Bekaert, a pioneer of steel cord in the 1960s, has pledged to raise its operating margin to between 7 and 9 percent. Even with far better than expected first-half results, the result largely of the restructuring, the margin was just 5.4 percent.
"Restoring profitability, that is THE challenge," said Wouter Vanderhaegen, analyst at KBC Securities.
Bekaert's shares were down 5.4 percent at 26.335 euros at 1300 GMT, making them among the greatest fallers in a broadly weaker Euronext Brussels market.
Analysts said they were surprised to learn that De Graeve would be stepping down as CEO, although he will stay on at the company as chairman, with a far more active remit than most.
Filip De Pauw, analyst at ING, said he had expected De Graeve to carry on for a couple of years, with no indication of a planned departure.
"The shares have been hit hard today, but they have outperformed in past weeks and months. It's difficult to believe its related to today's news," he said.
Bekaert said in a statement Taylor, a 53 year-old Briton, would become CEO designate next week and take over fully next May, subject to shareholder approval.
Taylor was managing director of Land Rover when it was part of Ford Motor Company before joining JC Bamford Excavators Ltd where he became chief executive in 2008.
He was CEO of Edwards Group, a vacuum pump specialist, from 2010 until February 2013. Edwards was bought by Atlas Copco earlier this month.
Buysse said Bekaert wanted a transparent and smooth transition.
"He (Taylor) brings a strong international background and knowledge of industrial and high technology."
- Malaysia military tracked missing plane to west coast: source |
- Malaysia air probe finds scant evidence of attack: sources |
- Ukraine forms new defense force, seeks Western help |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source
- Freescale loss in Malaysia tragedy leads to travel policy questions