Earnings Release • Oct 24, 2013
Earnings Release
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Regulated information – 3Q 2013 trading update Under embargo until Thursday 24 October 2013 at 7:00 a.m. CET
| 1Q | 2Q | 3Q | 9M | ||
|---|---|---|---|---|---|
| year-on-year | 2013 | 2013 | 2013 | 2013 | |
| Exchange rates | -0.3% | -1.2% | -4.6% | -2.1% | |
| Volume | -2.0% | -1.2% | +5.1% | +0.8% | |
| Mix | -3.5% | -0.4% | -1.1% | -1.5% | |
| Total | -5.8% | -2.8% | -0.5% | -2.9% |
"Our continued focus on "Building a sustainable home. Innovation-Ecology-Design" contributed to the overall volume growth of the Group in the third quarter.
US and UK residential renovation markets show renewed optimism and increasing activity; and construction markets in the Netherlands and Spain are now bottoming out. These markets were first hit by the economic and financial crisis.
Our participation in this year's GlassBuild show in Atlanta (US) displaying our latest polyurethane glassfibre innovations was a great success and reflected overall optimism of the American housing sector.
Growth continues in Turkey & Emerging Markets. Our product and service offering to the Emerging Markets meets local market needs for energy efficient building solutions at reasonable prices. This has resulted in an impressive number of new Deceuninck Customers in South America and India.
Building markets in Europe show some slight improvement. However, sentiment remains fragile. Macro-economic environment in EU-28 countries is improving and there are first cautious signs of overall economic recovery including in construction. Demand in our home market Belgium, however, remains weak.
Year-on-year sales in Central Europe are nearing stabilisation. In contrast demand in Russia is rather disappointing, contrary to 2012 and in spite of competitive wins.
At the start of the 4th quarter we notice a continuation of the trend seen in the 3rd quarter. Still we remain cautious. In the US we expect continued strong performance after the agreement to temporarily raise the public debt ceiling.
The weak Turkish lira is starting to weigh on input costs which might curb economic activity in the domestic Turkish market.
Recovery signs in Europe are brittle, unemployment levels remain high and consumer confidence is low, but has stopped deteriorating.
This uncertain picture, combined with a short order book, typical to the industry, does not allow Deceuninck to give a quantified guidance for full year 2013. In these economic uncertain times special attention is paid to the evolution of doubtful debtors. We continue to protect our margins through innovation, continuous productivity improvements and rigorous cost control. We confirm the fact that Deceuninck will be profitable in 2013."
| In € million | 1Q | 2Q | 3Q | 3Q | 9M | 9M | Var.2012 |
|---|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | loc.curr. | |
| Western Europe | -15.0% | -8.9% | 43.2 | -0.4% | 137.4 | -8.5% | |
| Central & Eastern Europe | -9.2% | -5.3% | 51.1 | -2.8% | 122.4 | -5.2% | |
| Turkey & Emerging Markets | +14.2% | +4.8% | 30.2 | -6.4% | 92.8 | +3.2% | +6.2% |
| United States | +1.9% | +6.9% | 21.9 | +15.3% | 56.9 | +8.6% | + 11.6% |
| Total | -5.8% | -2.8% | 146.4 | -0.5% | 409.4 | -2.9% |
3Q 2013 sales in Western Europe were stable at € 43.2 million (3Q 2012: € 43.4 million). Strong sales performance in UK and Italy was offset by weak demand in Belgium and France. Demand in the Netherlands and Spain is bottoming out.
Signs of economic recovery and improving consumer confidence are noticed but remain fragile.
3Q 2013 sales in Central & Eastern Europe decreased year-on-year 2.8% to € 51.1 million (3Q 2012: € 52.6 million).
Sales continued to be weak in most countries of the region with the exception of Germany, Romania and the Baltic. Year-on-year sales in Poland and Czech Republic are improving from a low level. Demand in Russia remains weak on the back of low consumer confidence and a weak construction market. Sales were negatively impacted by currencies such as the Russian ruble.
3Q 2013 sales decreased 6.4% to € 30.2 million (3Q 2012: € 32.2 million). At constant exchange rates sales on the domestic market increased +4.4%.
Sales on the domestic Turkish market continued to grow. The weakening of the Turkish lira however resulted in a sales decrease expressed in euro.
Sales growth in the Emerging Markets continued as a result of the gradual build-up of business and growing number of new window fabricators in South America and India.
3Q 2013 sales increased 15.3% to € 21.9 million (3Q 2012: € 19.0 million). At constant exchange rates sales increased 22.0%.
The increasing housing market activity and house prices fuelled optimism and provided additional impetus for remodelling spending.
Deceuninck North America's strategy of introducing innovative products and materials, creating brand awareness, gaining new Customers, and reinforcing current Customer relations paid off and resulted in higher than market average sales growth.
| 18 | February | 2014 | 2013 annual results |
|---|---|---|---|
| 13 | May | 2014 | 1Q 2014 trading update |
| 13 | May | 2014 | Annual Shareholders meeting at 11 am |
| 23 | July | 2014 | 2014 half-year results |
| 23 | October | 2014 | 3Q 2014 trading update |
End of press release
At Deceuninck, our commitment towards innovation, ecology and design provides us with a clear focus: building a sustainable home. A home that is more energy-efficient to live in and more attractive to look at. Deceuninck works worldwide with state-of-the-art materials, resulting in low maintenance, top insulating and long lasting products that can be fully recycled at end of life. Moreover, our values of Candor, Top performance and Entrepreneurship help us build a better world for our Partners and end users. Deceuninck has strong ambitions. We want to build a work environment in which people are proud to contribute, and strengthen our position within the top three market players. Alongside our ecological sustainability, Deceuninck also pursues financial sustainability.
Deceuninck employs about 2700 people in 25 countries, of which 600 in Belgium. Deceuninck sales in 2012 were € 556.9 million with a net positive result of € 4.2 million.
Contact Deceuninck: Ludo Debever • T +32 51 239 248 • M +32 473 552 335 • [email protected]
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