Good morning, and welcome to the Bekaert 2025 results call. At this time, all participants are on a listen-only mode, and we will open the floor for your questions after the presentation. If you require assistance, you may press star 0 on your keypad at any time, and an operator will assist you. If you wish to join the queue to ask a question at any time, you may press star one, and should you wish to remove yourself from the queue, press star two. As a reminder, this conference is being recorded. It is now my pleasure to turn the floor over to your host, Mr. Dries Van Hamme, Director of Investor Relations. Sir, the floor is yours.
Thank you. Welcome to our analysts and investors. I will first read out the safe harbor statement, then hand over to Yves Kerstens, CEO, and Seppo Parvi, the CFO, who will comment on the results and the outlook before we go indeed into Q&A. This presentation may contain forward-looking statements. These 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 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 today, does not undertake any obligation to update any forward-looking statements contained in it in light of new information, future events, otherwise.
Bekaert disclaims any liability for statements made or published by third parties and will not undertake any obligation to correct inaccurate data, information, conclusions, or opinions published by such third parties in relation to this or any other publication issued by Bekaert. I now hand over to Yves Kerstens.
Thank you, Dries, and, welcome all. Many thanks for joining today's full year's result presentation. As per usual, I will cover some introductory comments, highlights, and then Seppo will take us more through the financials in details and also by business unit. I will wrap up with some updates on operational strategy direction, including the outlook for 2026. 2025, clearly a year with a lot of market volatility and trade tensions. In that context, we've been working on passing through and mitigating all the effects of the tariffs. We've seen stable volumes in our Rubber Reinforcement business and some volume growth in our energy and utilities business. On the other end, we've seen some project delays in steel ropes and construction business, mainly in the first half of 2025 in U.S. and in some other markets.
During 2025, we also adjusted our hydrogen footprint in line with the weaker outlook on the green hydrogen business. In 2025, we've been focusing on the things we can control, meaning making our company structure more leaner, more agile. We took a big step in reducing the overhead cost by EUR 40 million. We created around EUR 40 million, EUR 39 million efficiency in operational excellence. That means how we purchase wire rod, but also how we operate the factories, and also by good utilization of some of the factories creating operational leverage. In 2025, we have 162 of one-off charges, which has a limited only EUR 8 million cash impact by adjustment we did on the footprint to align with the future demand expectations.
Clearly, we work on a lower cost base, creating us also a lower cost base moving forward. We are also further working on the portfolio evolution of the company. We took a further step in divesting the Latam North in Ecuador, Venezuela, and Costa Rica business in Latin America, in our SWS business. From a financial performance point of view, a lot of focus. We delivered an 8% EBIT thanks to this well, good cost control, on top, a strong, very free cash flow generation by working on all the levers of the working capital. Free cash flow above EUR 300 million.
We propose with that strong performance, dividend increase from EUR 1.90-EUR 1.95 per share, and we will continue our share buyback until the end of the program this year. I hand over now for Seppo for some more color on the overall financials, but also some insights per business area.
Thanks, Yves, and welcome also on my behalf to this full year result call. Now, let's start with the Q4 sales performance. We are now seeing gradual recovery after a soft start in the first half of 2035, when tariffs caused significant project delays for our customers, especially in our flooring business in U.S. and steel ropes business in U.S. In the last quarter of the year, we continued the improvements we saw in the third quarter of 2025. In Q4, like-for-like volume increased about 2% compared to 3% increase in the third quarter, the quarter before. In SWUS, energy and utilities had strong growth, especially in the U.S., and also in Rubber Reinforcement, our upper reinforcement business in China, we continued to see volume growth, and that helped us to increase the capacity utilization at the plants.
Happy to see that we have full plant utilization there continued. However, there was continued softness in steel ropes, both in EU and North America. Weaker demand in hydrogen prompted us to adjust our footprint and cost base, leading towards a hydrogen impairment, as I'll return to those later in the presentation. Looking at the full year sales, as said already earlier, soft start for the year in the first half due to tires, had an effect on the full year sales development as well. Positivity is that with the second half of the year, we started to see recovery across many of the BUs. We are not back to normal levels yet, but I think the development in Q3 and Q4 was encouraging.
Second half, we saw 2.5% volume growth for the group on like-for-like basis, and for the full year, we were still 2% behind like-for-like, mainly due to lower raw material input cost pass-through, as well as on top of that, there was FX and M&A related issues, why the sales came down from close to EUR 4 billion to EUR 3.7 billion during the year. On the EBIT view, and I would say that, first of all, we have continued to defend the margins. We had to support the margins by cost reductions and footprint optimization. There, I think the work done is paying off well.
We managed to protect margins well despite lower volumes, thanks to cost control, both overheads as well as operational improvements when it comes to efficiency at our plants. We had high plant utilization in China, leading to better fixed cost absorption in RR, and cost savings were done in all levels. I think throughout the organization, our teams have been contributing in all plants, all functions, as well as in the corporate center, to the margin protection work through the cost savings. We had EUR 40 million reduction when it comes to overheads, as well as another EUR 39, close to about EUR 40 million, when it comes to operational cost savings and better plant utilization. We continue to focus on cost base and to protect margin and cash flows also going forward.
It's important to notice that we are more cost competitive now than ever before, so that when volume growth returns, our improved operational leverage will support our higher profitability levels going forward. Let's look at the various business units, how the business was developing. Let's start with Rubber Reinforcement, where we had stable margins in challenging environment. Despite the significant challenges in the market that we exposed as to weak truck tire market and intensive competition in many of the markets, our cost and footprint actions allowed us to report stable volumes and margins.
Full year, volumes were slightly up 0.2%. The lower wire prices, with the exception of U.S. and lower selling prices, due to pass-through mechanism, as well as with the more volumes in China, led to 2.7% mix and raw material price impact. Organic sales decreased 2%. Like I said earlier, in the group level, we also saw here encouraging development, especially in the second half, when the volumes were up 2%, and especially we saw positive development in China and North America. Important step was also our acquisition of the captive tire cord production plants of Bridgestone in China and Thailand. This was announced after the new year, but it's worth to mention also here.
It is, I think, important step to strengthen our position in the growing Asian market, as well as amongst the big five customers, where Bridgestone is one of the most important customers we have global. As many of you know, we have a good track record when it comes to consolidating captive production from key customers. I think this also reflects Bridgestone's confidence in our quality and operational excellence when it comes to running tire cord production. The sales on annual level will be increased about EUR 80 million, thanks to this acquisition and cash consideration that we paid is about EUR 60 million. We expect to close the deal during the next month or two, once we get all the antitrust approvals in place.
Next, moving to Steel Wire Solutions, where strong volume growth was driven by energy and utilities demand, and also profitability was strong. Important to note that following the Latin disposals back in 2023 as well as last year in 2025, we have now repositioned business into higher margin markets, whereas the energy and utility is now 30% of the sales. We are seeing double-digit growth in North America in this business, and that is, I think, an important proof point of our position already in the electrification market, which we think is an interesting growth opportunity area in general as well. For the full year, like for like, sales were up 4%. Of course, the divestments and previous capacity closures are having effect on the reported sales.
An important note is that there is good underlying growth. Our EBITDA margin remains close to 10%, despite temporary delays in pass-through of raw material costs in North America and unfavorable mix in Europe, where we had more agricultural and construction wire business and some project delays in energy and utilities. Let's look at our ropes business, PPRG, where, like I said earlier, steel ropes were affected by tariffs uncertainty, but synthetic business has been performing well throughout the year, and I think it's fair to say that the BEXCO acquisition that we had done a couple years ago has been well integrated and created new business growth opportunities. There are two good proof points also when it comes to two largest ever contracts that they have been able to win recently.
I think he will mention about those later a bit more. When it comes to A-cords, they were at slightly lower volumes due to weaker construction markets in China and Europe. Otherwise, I would say that A-cord has continued also stable performance throughout the year. Moving to specialties, where I would say that the challenges were probably largest, looking at different BUs. There we had slower growth and that has led to adjustments across the businesses. In the constructions, like I said earlier, tariff uncertainty was high, especially in the first half, and U.S. customers were delaying projects until more visibility was available, and that had significant impact in the first half, followed by a recovery in the second half. Like I said, we are not yet back to normal.
There has been increased competition at the EU market and Australia, impacting volumes and prices, and it's fair to say that EU market has remained rather slow. We see strong growth in the new regions, Middle East and India, where we are building a position and penetrating the markets at the moment. Of course, starting from low base, but quite encouraging development there. In hydrogen, slower demand outlook has been visible now for some time. It's very much linked to the regulatory delays in Europe and U.S., and that has led us to adjust footprint and cost base, and also the impairments that we have taken to be aligned with the new demand outlook.
Profitability specialties was impacted by weaker demand and unfavorable mix in construction, especially in the first half, and low demand in energy transition-related end markets, not only in hydrogen, but also in some of the others. Let's take a look at the joint ventures that we have and how they have been performing. Top line was slightly coming down. That's mainly driven by the foreign exchange rates, a bit also lower volumes. Important to note is that they continue good cash flow generators for us. If you look at the dividends received again last year, about EUR 50 million, in line with the year before. This is an important contributor to our cash flow continues. To summarize the restructure and impairment charges that we have taken last year, EUR 162 million in total.
Important to note is that only EUR 8 million cash impact on net basis is coming from here. In Rubber Reinforcement, in total, we had EUR 40 million. That is related to restructuring China. We closed some plants there a couple of years ago, and there were some additional one-offs still, as we have not been divesting those plants yet. So we had to take that. In Europe also related to restructuring, streamlining, and right sizing. Steel Wire Solutions, EUR 50 million. Big part of that relates to Latam disposal, as communicated also earlier, and EUR 13 million to impairment and restructuring costs, mainly in Belgium. In the Ropes Business, EUR 14 million. That relates to consolidation of synthetics ropes business from Scotland to Belgium. Finally, specialties.
In total, 61, out of which 51, EUR 55 million relates to hydrogen business impairments and consolidation of the activities to China. Important to note this year, we are not exiting hydrogen business. We are adjusting our footprint and capacity to the current demand, and we are ready to ramp up the production in Belgium when we see that the demand is coming back. We need to, of course, face the realities of the market currently. Looking at the full profit and loss, I don't start to go through it line by line, but maybe a couple of comments to summarize a bit the development during the year. Strict cost control has improved our cost base, reduced SGA costs and other overheads have safeguarded our margins.
Our reported EBIT and profit was significantly impacted by the mentioned one-offs, even though that they were quite neutral when it comes to cash impact. You might notice that the ETR, effective tax rate, is quite high for the year, 69%. If you exclude and neutralize the effect of the one-offs and impairments, ETR would have been 24% in line with the year before. I think that's reasonable level also looking into the future. We obviously work on optimizing the ETR going forward. To another focus area. In addition to costs in 2025, we were very much focusing also on working capital and cash flow. There, I think our teams have been doing excellent work in addition to cost control.
We have decreased working capital from EUR 650 million to EUR 520 million, so EUR 130 million reduction on working capital. Working capital is now 15% of the turnover, coming down from 17.3% a year earlier. Actually reaching the target level we set internally some time ago for the working capital. Of course, work continues. It's, of course, more difficult going forward to take out another EUR 100 million from working capital, but I'm sure there are still some smaller pockets that where we can release some cash. This led also to excellent free cash flow, EUR 314 million, up from EUR 193 million a year before. That also led to reduced net debt.
Net Debt came down EUR 100 million during the year. Balance sheet is very strong. Our leverage is 0.4, if you look at the Net Debt/EBITDA. That means that we have acquisition firepower when and when we find suitable targets to apply. Working capital or in addition to working capital, also capital expenditures was reduced to EUR 139 million, as we did not foresee needs for any major growth CapEx. We had done some smaller steps during the year. I would say that the level EUR 139 is still reasonable and we are able to take care of the asset base, so I don't see any issue with the current level that we would not that we would put our asset quality in danger.
What we expect in the year that has started in 2026, is that it would go up to about around EUR 170 million level, depending a bit on the execution of growth project, depending a bit how the year develops during the coming months. Let's look at the shareholder returns before I hand over back to Yves. We have consistently generated strong cash flows, and that has enabled us to also increasingly give better and better returns to our shareholders, and we continue this also in 2026. The proposal by the board to AGM, that we would increase dividend to EUR 1.95 a share.
That's 3% increase about year-over-year, and we continue our share buyback program that was already announced a year and a half ago. We continue that still until end of November this year. Now back to you, Yves.
Good. Thanks, Seppo. Clearly, in the current environment, we've been really working on strict cost control and good cash generation. Bekaert is really coming out of the current environment stronger and more cost competitive than ever before, and our operational level has really improved. In parallel, we've been continuing to work on our transformation of the portfolio with the divestment of SWS, footprint changes, making each of the BUs more market-driven, but also more independent, and exploring M&A opportunities in the area of sustainable construction, energy and utilities, electrification, and the lifting and mooring segment. Let me pivot now to each of the business segments or the end markets we operate in. Let me first start with the tire reinforcement and give some comments how we see the global tire market, and it's a complete...
It's a different message or a picture by region. If you look at China, very strong demand, of course, driven by local demand, but also global business of the tire makers out of China and Asia. We see in Europe, a more subdued demand, mainly in the B2B business for the tires, combined with an increased import of, let's say, tire imports from Asian countries. In the U.S., we've seen in 25 a pretty strong tire demand, but also there an increase of import tires from Asia, up to almost 80% imported tires. That means for us, a more very strong position, tire cord demand in China and Asia, and a more subdued demand for local tire cord in Europe and in the U.S.
We continue to evolve in our strategic strengthening of our position in tire reinforcement. We have an additional two acquisitions of two plants of Bridgestone, one in Thailand and one in China, and will strengthen our position moving forward and strengthen our relationship with the Bridgestone Corporation and the top five premium players worldwide. If I move to the transmission and performance wires, as mentioned, we've seen a nice demand growth in our power and data transmission markets, supported by funding in the different regions, and certainly in the U.S., with the modernization of the grid. Thanks to also the divestment in Latam, and the further mix improvement, 30% of our Steel Wire Solutions business is now focusing on energy and utilities, and we'll continue that trend.
Moving to advanced lifting and mooring markets, we serve with our BBRG business, both steel wires or steel ropes and synthetic ropes. We've seen weaker demand in North America, linked to the uncertainty of the tariff, certainly first half of the year, and also in Europe, due to less mining activities. We've seen a very strong order book and business in our synthetic ropes business. I want to highlight two nice projects in this business that we've been attributed. One is the Coral North project, where BEXCO will deliver the synthetic ropes for the mooring solution of a floating LNG platform in Mozambique.
The second win is a project in the Tiber-Guadalupe project, which is in the Gulf of Mexico, where is an oil and gas platform, where the connectors of f will be used to connect the platform. Nice wins in new businesses we are focusing on. Pivoting to sustainable construction, as a couple of time mentioned, North America was a difficult market in the first half, second half of 25 recovery, and we see this constant recovery in the first couple of months of 2026. Increased competition in Europe and Australia, local competition, but also due to imports.
On the positive side, we continue to have nice growth and nice wins in the Middle East and India, and also pivoting, you know, we have tunnels, we have the mine application, we have the flooring application, we are in precast, but also moving into new applications like rafts. I would like to highlight two, let's say, important projects here is one is the win of the Dubai Metro Blue Line project, where, let's say, the segment lining reinforcement will be done with our Dramix. On the other, closer to home in Antwerp, where the new AD Works headquarters in Belgium has been built, using the Dramix fibers for the foundations for the rafts, which gives a very strong TCO advantage also in a new application area like the rafts. Moving to the last segment, energy transition.
Covering our filtration business, covering our conversion technology business, and also the hydrogen business. As reported in the last one year, one year and a half, we've, of course, seen the delay there. If I give you some perspective on how we look at that market, is that two years ago, we were looking at the installed base of electrolyzers cumulatively by 2030 worldwide at under 70 GW. Then, one year and a half ago was revised to 80 GW. Today we look at the market for 2030 at 35 GW. You see a constant evolution of the outlook of the market and the demand. On the positive side, we've seen an increase of 30% of the final investment decisions of big projects investment.
On the ground, it continues to further scale, but of course, at a much more lower growth rate than initially predicted. We continue to invest in the business in terms of R&D. However, as mentioned, we have been rightsizing our footprint in line with the market outlook. In our customer base, we delivered, let's say, all big electrolyzers OEMs, of course, some of them did some strategic reviews and repositioned the business. On the other end, we have some of the really big companies who are speccing in our current PTL in their future products. That's a positive news and a positive evolution. A segment to be monitored, to be watched in the future.
I would like to take a moment to step back a little bit on the perform, transform, grow of the company, and certainly focus on the first one, the perform, and look at three periods, pre-COVID, COVID, post-COVID. If you look at pre-COVID, it was a market environment. It was pretty positive, stable demand, low inflation, and on average, we delivered a 6% EBIT. During the COVID period, 2020, 2021, 2022, of course, a sharp contraction of the market, but also a strong rebound of many demands, market, supply chain. In that context, we delivered on average, an 8.6% EBIT margin. I would say post-COVID, 2023, 2024, 2025, characterized by geopolitical challenges, the war, energy crisis, inflation, slow growth around the regions.
We delivered also consistently 8.6% of profit. Well delivered on the performance, well delivered on the cash generation, the certainly the focus points moving forward continues to further improve the profitability by operational leverage, but also by growth. Good. I would like to wrap up 2025 from our perspective, a resilient performance, strong cash flow generation, position the company from a cost structure for the future, continue to transform the portfolio, nice shareholder returns. If you look at 2026, with what we see today, we see a continued evolution in the geopolitical situation and trade uncertainty. We see some recovery in construction, some growth, further utilities, energy and utilities, some more challenging market environment in core markets.
In that context, we look at at a stable 2026 on the top line and on the margin side, if you look at from a like, for like basis. I would like to wrap up here and open the session for Q&A.
Thank you. Ladies and gentlemen, the floor is now open for your questions. If you wish to join the queue to ask a question at this time, please press star one. We do ask, if listening on speaker phone today, you please pick up your handset while posing your question to provide optimum sound quality. Once again, please press star one on your phone at this time to join the queue to ask a question. Please hold a moment while we pull for questions.
Thank you. Our first question today is coming from Wim Hoste with KBC Securities. Your line is live.
Yes, thank you and good morning. I have a couple of questions. First, around Rubber Reinforcement. Can you elaborate on the competitive landscape in China? I'm specifically making a reference to Zenith. How is that impacting the overall market structure and pricing levels in the markets? Can you then also elaborate a little bit on, yeah, the balance of your volumes, between, yeah, core contracts and maybe filler business? How is that evolving. Then also, can you comment on the profitability per, yeah, per geographic region, in Rubber Reinforcement? Is China at group levels or division levels or above? Now, then a question on the overall regulatory environment.
It looks like, yeah, there's gonna be changes to U.S. tariffs, also in the EU regulation, on steel quota, et cetera, it's changing. Can you maybe impact on how you view that regulatory environment? How is that factored into your guidance? Thank you.
Good. Thanks. Good morning, Wim, and thanks for your questions. Let me first start with the RR and the competitive landscape. As we know, where Zenith is scaling up their business and their operations. As we know from history, making tires at the right quality, the right performance, consistency, it's I would not say it's art, but it's something you need to get experience with. They gradually are scaling up. Their primary focus, of course, is more on the lower end, the commoditized businesses, which we are less in. We less feel the price competition in these segments. Of course, over time, they will further, let's say, develop and further increase their capabilities.
For the moment, I would say from that competitive landscape, no big change. Our position in China remains very strong. That brings me to the second question of your point, and is the combination of the core business and what you call the filler business. Now, out of competitive situation, we don't give details here, but so we had a very strong 25 loading of the factories in China, with good outcomes of mix, but also resulting in good financial performance. I think, of course, the majority is our base good businesses, and the minority is, of course, the filler business, where we opportunistically trade off the volume effect of the plans and the business we can generate with that.
In terms of profitability, as you know, we don't give profitability per region for RR, but you can assume and that the profitability is on average across the board, correct? With, of course, different mixes, but on average, all our business are very well profitable and around the average levels of RR.
Of course, I think you refer to Chinese and China market, there you have to remember, we focus more on high premium segment of the market. It's fair to say that customers globally, not only in China but also elsewhere, especially in China, they appreciate our innovativeness, our good quality service level, which supports that we're able to keep margin level, also the domestic market there at a reasonable level. We are very selective also when it comes to customer product portfolio. That's important part of the business management, how you manage your portfolio.
Let me pivot to your second questions on the evolution of the tariffs. There's two components. First of all, on the U.S. tariffs, the steel tariffs and the aluminum tariffs under Section 232, basically, there is no change, and they remain in place and there is no changes. The only change that there is on the reciprocal 10%, 15%, which is applicable for non-steel and non-aluminum products. That is I'm not saying it's not irrelevant for us because it's, it improves a little bit how the market and the trade looks, but basically for us, from a tariffs point of view, it's not changing versus the last year.
On EU, I think there we go into 2026, where the European Steel and Metals Action Plan will come in place by the mid of the year, correct? To be monitored, how that will be influencing the demand and supply balance of steel in Europe and the pricing, not active in the first half of the year and to be monitored for the second half of the year.
Okay, understood. Thank you. Very helpful.
Thank you. Our next question is coming from Frank Claassen with Degroof Petercam. Your line is live. Hello, Frank. I'm afraid we can't hear you, sir.
Hello?
Frank, I can hear you. I can hear you now, sir.
Yeah. Okay. Sorry for that. Good morning, Frank Claassen, Degroof Petercam. I've got a question on your margin guidance, the flat margin for 2026. Can you say anything about what you see in phasing, let's say? The first half, first to second half, and a bit similar for the different BUs. Do you expect all BUs to be around about the same level as 2025, or do you see some pluses and minuses there? Thank you.
Well, typically, look at the pacing of our business. Typically, first half is stronger than second half. You remember, you have to remember the second half, what we have is that there is, of course, holiday season in most of our markets, as well as Christmas, New Year, which is having an effect on the volumes and cost coverage. When it comes to businesses, I think if you look at the guidance and outlook, we do see some, like I mentioned, also recovery on construction and steel ropes in U.S., where the first half of last year was quite challenging and difficult. And growth opportunities continue in SWUS, North America utilities segment. Other than that, I would say that it's rather flat or flattish.
Yeah, same, same seasonality as well. Yeah.
Okay. Maybe last question on your CapEx, it's going up. What are the main growth projects for 2026?
On the different components of the CapEx consists, first of all, about what we call our compliance CapEx and maintenance CapEx. Secondly, is what we do, the improvement in terms of productivity aspect. And what we see now, what we have foreseen for next year is less on the growth because we don't need extra capacity in some businesses, but it's more on automation, correct? To get productivity up, cost down, efficiency. That's what's the more main, but more driving the increase than really growth initiatives.
Okay.
We have some growth CapEx in NSA and Utilities in U.S. Relatively small in the total, but some.
Yeah.
Some to be able to capture the growth we see there on the market.
Okay. Thank you.
Thank you. As a reminder, ladies and gentlemen, please press star one for any questions. Our next question is coming from Alexandre De Keyzer with Kepler Cheuvreux. Your line is live.
Hello, thank you for taking my questions. Yeah, I'm looking at CapEx these days, and it's now standing at 3.7% of sales versus I think it was 5% historical level. I'm wondering how long we can keep the CapEx at these levels? Maybe a somewhat related question, which is what is the normalized levels of working capital at the moment? I thought that was standing around like 16%, but now we see that 14% of sales, which is obviously a nice improvement. Yeah, again, wondering how sustainable it is on the long term. Third question would be on the, on Bridgestone. You acquired a plant there in Asia.
I'm just wondering, considering that these are relatively old plants, if you also see some CapEx for these in 2026. Maybe if you can just shed a bit of light on what the long-term supply agreements look like with the deal here. That's my questions for now. Thank you.
Thanks. Maybe I start with the CapEx and working capital, and then hand over to IYves Kerstens to Bridgestone related questions. First of all, on CapEx. If you look at the CapEx structure needs, we need roughly EUR 80 million-EUR 100 million a year for the maintenance and compliance CapEx. As you can see, with EUR 140 million level last year, we are above that. Even that allows for some additional improvement and growth CapEx. If you compare the previous year's levels, you have to remember that there we had quite significant growth investments, including, for instance, in hydrogen, which are now not needed as we are well invested for the current demand on the market, not only hydrogen, but also in other businesses.
Like we have said earlier, that if and not only if, but when the growth comes back, we are ready to increase the CapEx levels from the levels we are currently having to, say, EUR 200 million, or depends on the needs. I mean, we have balance sheet to do it when the need comes. When it comes to working capital level, we are now at 15% level, and there's a quite a nice significant improvement year on year from over 13% earlier. It's sustainable. I dare to say we have been working a lot on structural improvements. We have worked on improving our processes to reduce overdue receivables when it comes to dunning. So we have better processes in place there. There's been significant reduction of overdues.
We have improved our inventory management, our sales and operations planning, to be able to reduce the inventory levels that we have. We have worked on improvements of our supplier payment terms, so our procurement team has been doing their good work and continue to do it. Also, on the sales side, in addition to collections, we have been working on the customers, the payment terms. I would say that it's a sustainable level. Of course, the challenge is that the lower you get, the more challenge it's to reduce more. That's, I think, fair to say and important to keep in mind that it's more, like I said in my part of the presentation, that I see some pockets that we could still reduce the working capital, but do not expect another EUR 100 million.
Just to be realistic.
Good. Let me pivot to a question on the Bridgestone acquisitions, tire cord factory. Two factories, one in China, one in Thailand. In China, we have our own factories, and of course, this is a complementary location here, which will also give opportunities for, let's say, for synergies with our China operations. Secondly, in Thailand, which is a country where we didn't have tire cord production, another additional supply base for us. This, of course, like usual, is going together with a multi-year supply agreement, not only for this plant, but also part of course, of our continuing collaboration with Bridgestone globally. From a CapEx point of view, we know this technology, we know the operation. We've been acquiring Bridgestone plants before.
We've been supplying Bridgestone with all our factories worldwide, so we know their products, and we know their technology. There will be opportunities for optimization with smaller CapEx, but there's no exceptional CapEx needed for these operations. They're in a good shape, we can integrate them in our operations.
maybe if I can just have one follow-up there. On that multi-year supply agreement, is there like sort of, yeah, agreement that you would bring in maybe technologies that are present in Europe, that maybe Bridgestone uses here already, to those plants there? Like, or what was the trigger for them to, yeah, basically sell this business with a multi-year supply?
I don't want to comment instead of the CEO of Bridgestone, correct, on their strategic rationale. It was part of their strategic plan to focus on the core businesses and basically to create a leverage here by allocating these two plans to an existing supplier.
Okay, thank you. Just one, for housekeeping. I think you mentioned that the hydrogen plan came up and is now being depreciated, which weighed on specialty business margins. Could you maybe remind us of as of when in 2025 the plans started appreciating? Thank you.
Full year on top of my mind.
Yeah.
Yeah, full year.
Cool. Okay, thank you.
Thank you. If there will be any further questions, please indicate so now by pressing star one. Thank you. Our next question is coming from Louis Billon with AlphaValue. Your line is live.
Hi, good morning. My question is on the expected dividend from the, your JV in Brazil in 2026. How is the market environment in Brazil? Could you give us more details on the competitive landscape in Brazil?
Of course, when it comes to joint venture development, we don't give guidance there. If you look at the history and trend, they have been quite steady performers as well as when it comes to cash flow and joint ventures there. The dividend flow has been quite steady. Last year, they suffered from currency translation effect if you look at the weak local currency, and there has been some increasing imported volumes. I think they are well positioned on their markets, and in that sense, we are confident they continue solid performance. I cannot go more into the details of those joint ventures. We are a minority shareholder there, so that's keep in mind.
Okay, maybe on the competition, competitive landscape in Brazil?
Yeah, perhaps I can give you some color there. The two businesses we are in the Steel Wire Solutions, and then in the Rubber Reinforcement business. Steel Wire Solutions, very local, very good presence, strong competitive position there for our joint venture. If you talk about the Rubber Reinforcement or the tire cord business, there you have a more a different little bit picture with more competition coming also from import. I think you should. The biggest part of that joint venture is the Steel Wire Solutions.
Okay. Very clear. Thank you.
Thank you. As we have no further questions on the lines at this time, I'd like to turn the call back over to management for any closing remarks.
Good. Now, thanks for participation. Thanks for your questions. Thanks for following the company. Wish you I'm not, but I suppose a very nice, beautiful day, and thanks for attending.
Thank you.
Bye-bye.
Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time and have a wonderful rest of your day. We thank you for your participation.