Earnings Release • Feb 23, 2012
Earnings Release
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Regulated information –2011 Results Under embargo until Thursday 23 February at 7:30 a.m. CET
| In € million | 2010 | 2011 | % var. | 1H 2011 | 2H 2011 |
|---|---|---|---|---|---|
| Net sales | 557.8 | 536.1 | -3.9% | 268.9 | 267.2 |
| Gross profit | 163.7 | 155.0 | -5.3% | 78.2 | 76.8 |
| Gross-margin (%) | 29.3% | 28.9% | 29.1% | 28.7% | |
| REBITDA | 57.7 | 49.4 | -14.4% | 25.1 | 24.3 |
| REBITDA-margin (%) | 10.4% | 9.2% | 9.3% | 9.1% | |
| EBITDA | 57.3 | 48.3 | -15.7% | 24.6 | 23.7 |
| EBITDA-margin (%) | 10.3% | 9.0% | 9.2% | 8.9% | |
| REBIT | 25.7 | 23.4 | -8.9% | 11.8 | 11.6 |
| REBIT-margin (%) | 4.6% | 4.4% | 4.4% | 4.3% | |
| EBIT | 24.4 | 22.3 | -8.6% | 11.3 | 11.0 |
| EBIT-margin (%) | 4.4% | 4.2% | 4.2% | 4.1% | |
| Financial result | -15.0 | -14.0 | -4.8 | -9.2 | |
| EBT | 9.4 | 8.3 | -11.7% | 6.5 | 1.8 |
| Taxes | -0.9 | -2.0 | -3.4 | 1.4 | |
| Net result | 8.5 | 6.3 | -25.8% | 3.1 | 3.2 |
| Net margin (%) | 1.5% | 1.2% | 1.1% | 1.2% |
"Since the successful 2009 restructuring, Deceuninck focused on innovation, margin protection and a sound financial situation.
These results confirm that the company delivered on its commitments during the 2 years since the 2009 restructuring. I would like to extend a sincere word of thanks to all Deceuninck colleagues and Customers worldwide, who made this performance possible."
The impact of government austerity measures in most markets and the general economic environment remain uncertain.
Sales at the beginning of the year are stable, supported by a mild winter in January. Visibility is limited, due to Deceuninck's typical short order book and the seasonally slower construction activity during the winter months.
The PVC cost trend was reversed upward in January 2012. The increase seems to be sustained by increasing ethylene costs and multiple "forces majeures" declared by PVC suppliers. Additionally, titanium dioxide and other additive costs, continue to rise. If this trend continues, Deceuninck remains committed to pass on increased raw material cost to the market. Wage, energy and other increases are compensated by rigorous cost control and continued productivity improvement.
Therefore, the focus throughout 2012 continues to be on innovation, protecting margins and maintaining profitability.
Long term, energy-efficient construction and renovation will continue to grow as an engine of the construction industry. PVC windows and Twinson wood composite products are sustainable, low maintenance applications with a timeless design, which save energy throughout a 50+ year life cycle, and will be recycled at end-of-life.
Deceuninck believes in "Building a sustainable home": Innovation, Ecology and Design.
The greenest energy is the energy you do not consume. Latest generation windows offer excellent insulation, helping families to save over 50,000 litres of heating fuel during a 50+ year lifetime.(°)
In 2011 Deceuninck launched Zendow#neo using Linktrusion technology. Linktrusion links PVC with other composites to obtain the best insulation performance. The combination of glass fibre reinforced PVC profiles and thermal PVC reinforcements is a next step in bringing more energy efficient solutions to the market.
The greenest raw material is the one that you do not consume. Deceuninck's latest window designs provide an improved energy performance at an ever lower weight. They now meet passive house insulation requirements, at up to 40% less material consumption. This helps the users of Deceuninck's products to preserve natural resources.
Deceuninck will further develop its recycling activities to guarantee a closed loop for all the materials and products the company puts on the market: PVC, Twinson wood composite, as well as the newly launched glass fibre reinforced PVC can and will be recycled."
For further information on our vision: http://www.deceuninck.com/en/about-us.aspx
(°) Source: Inoutic energy savings calculation: (see: http://inoutic.venus-werbung.de/en/navi_oben/tips-on-window purchase/saving-energy/energy-saving-calculator/energiesparrechner.html)
Calculation base: replacement of 35m² single glazed windows. Results may vary in function of the region and PVC window system used to replace the single glazed window.
| In € million | Q1 | Q2 | Q3 | Q4 | FY | 2011 | 2011 |
|---|---|---|---|---|---|---|---|
| YoY | YoY | YoY | YoY | 2011 | YoY | loc.curr. | |
| Western Europe | +10.3% | +4.0% | -3.5% | -3.3% | 211.6 | +2.0% | |
| Central & Eastern Europe | +6.6% | -3.8% | -10.1% | -10.2% | 161.9 | -5.9% | |
| Turkey | +5.8% | -1.1% | -4.1% | -6.3% | 106.0 | -1.9% | +13.7% |
| United States | -5.3% | -21.5% | -20.9% | -25.0% | 56.6 | -19.3% | -12.1% |
| Total | +6.8% | -2.4% | -8.2% | -9.1% | 536.1 | -3.9% |
Deceuninck's 2011 consolidated sales were € 536.1 million, a year-on-year decrease by 3.9% (2010: € 557.8 million).
Sales volume: -6.8%; exchange rates: -4.1%; price and mix effects: +7.0%.
Full year 2011 sales in Western Europe increased by 2.0% to € 211.6 million (2010: € 207.5 million). Sales increased in the Benelux, France and Italy. In UK and Spain sales declined.
Full year 2011 sales were € 161.9 million, a year-on-year decrease by 5.9% (2010: € 172.1 million). Sales were impacted by weak demand in some countries combined with year-on-year unfavourable evolution of currencies.
Full year 2011 sales decreased by 1.9% to € 106.0 million (2010: € 108.0 million). At constant exchange rate sales increased 13.7%. Domestic demand continued to improve throughout the year. Exports from Turkey to Northern Africa were negatively impacted by the political instability in the region.
Full year 2011 sales decreased by 19.3% to € 56.6 million. At constant exchange rates sales fell by 12.1%. Comparison base all through 2011 was difficult due to 2010 renovation activity supported by various housing tax credits which ran out. Residential renovation activity was additionally affected by falling housing prices, relatively high unemployment and tight credit markets.
Gross margin was 28.9% (2010: 29.3%). € 15.5 million higher raw material costs, both PVC resin and additives, were mostly compensated by sales price increases and productivity improvements.
The operating cash flow (EBITDA) amounted to € 48.3 million against € 57.3 million in 2010, resulting in a 9.0% EBITDA margin (2010: 10.3%). Operating expenses were € 5.8 million lower as a result of currency translations and cost management.
REBITDA (recurring operating cash flow) was € 49.4 million (2010: € 57.7 million).
The operating result (EBIT) was € 22.3 million (2010: € 24.4 million) resulting in an EBIT margin of 4.2% compared to 4.4% in 2010.
Non cash costs are € 25.9 million against € 32.9 million in 2010. Depreciations and impairment decreased by € 4.3 million mainly due to lower capex level of the past years. Bad debt was € 2.0 million lower as a result of strict credit management.
Financial result was € -14.0 million (2010: € -15.0 million), driven by € 1.7 million lower interest expenses as a result of a lower average net debt level during the year and the cash sweep early 2011. Unfavourable exchange rates had a negative impact of € 2.4 million on foreign currency denominated loans.
Income tax expense was € 2.0 million compared to a € 0.9 million income tax expense in 2010. Lower earnings before taxes were offset by an unfavourable legal entity mix.
The net result of 2011 is a profit of € 6.3 million resulting in a 1.2% net margin compared to a 1.5% net margin in 2010.
Working capital increased from € 111.1 million on 31 December 2010 to € 119.2 million on 31 December 2011.
The operational working capital on 31 December 2011 was 18.2% of sales as compared to 16.6% on 31 December 2010.
Inventories were € 12.6 million higher as compared to 31 December 2010 due to higher valuation of raw materials and pull forward purchase of raw materials in Turkey anticipating price increases early 2012.
Accounts receivables developed favourably and in line with lower business volume at the end of 2011. This is the result of a continued rigorous control throughout the year.
Accounts payable were lower as a result of lower purchased volume in the second half of 2011.
Capital expenditures in 2011 increased by 40.4% to € 21.9 million as compared to € 15.6 million in 2010. This includes € 15.6 million operational capex and 6.3 million capex for new products.
The net financial debt at 31 December 2011 amounted to € 101.8 million compared to € 100.7 million on 31 December 2010. A positive cash generation was offset by higher capex spending and pull forward purchase of raw materials in Turkey anticipating price increases at the start of 2012.
Shareholders' equity decreases € 6.1 million to € 205.9 million mainly due to the negative impact of currency translation adjustments (CTAs), mainly on TRY and PLN. Gearing was 49.4% as compared to 47.5% at 31 December 2010.
On 31 December 2011 Deceuninck employed worldwide 2,735 full time equivalents (FTEs) (including temporary workers and outsourced FTEs) (31 December 2010: 2,821).
| 30 | March | 2012 | 2011 annual report online www.deceuninck.com |
|---|---|---|---|
| 8 | May | 2012 | Q1 2012 trading update |
| 8 | May | 2012 | Annual Shareholders meeting at 11 am |
| 12 | July | 2012 | Q2 2012 trading update |
| 23 | August | 2012 | 2012 half-year results |
| 18 | October | 2012 | Q3 2012 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 2700 people in 25 countries, of which 700 in Belgium. Deceuninck sales in 2011 were € 536 million with a € 6.3 million net profit.
Contact Deceuninck: Ludo Debever • T +32 51 239 248 • M +32 473 552 335 • [email protected]
| Annexe 1: Deceuninck Consolidated Income Statement | |||
|---|---|---|---|
| -- | -- | -- | ---------------------------------------------------- |
| In thousand € | 2010 | 2011 |
|---|---|---|
| Net sales | 557,758 | 536,129 |
| Cost of goods sold | -394,093 | -381,102 |
| Gross profit | 163,665 | 155,027 |
| Marketing, sales and distribution expenses | -92,545 | -88,139 |
| Research and development expenses | -5,177 | -5,782 |
| Administrative and general expenses | -40,852 | -38,808 |
| Other net operating result | -686 | 17 |
| Operating result | 24,405 | 22,315 |
| Financial charges | -30,685 | -27,795 |
| Financial income | 15,709 | 13,788 |
| Profit (+) / loss (-) before taxes | 9,429 | 8,308 |
| Income taxes | -881 | -1,960 |
| Profit (+) / loss (-) for the period | 8,548 | 6,348 |
| The result for the financial year is attributable to: | 8,378 | 6,210 |
| Shareholders of the parent company | 170 | 138 |
| Non-controlling interests | ||
| Earnings (+) /loss (-) per share distributable to the shareholders of the parent company (in €): |
0.08 | 0.06 |
| Normal earnings (+) / loss (-) per share | 0.08 | 0.06 |
| Diluted earnings (+) / loss (-) per share |
| Annexe 2: Deceuninck Consolidated Statement of Financial Position | ||
|---|---|---|
| In thousand € | 2010 | 2011 |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | 4,733 | 3,428 |
| Goodwill | 10,860 | 10,806 |
| Tangible fixed assets | 204,574 | 193,180 |
| Financial fixed assets | 1,310 | 1,433 |
| Deferred tax assets | 14,475 | 16,209 |
| Long-term receivables | 1,670 | 1,412 |
| Non-current assets | 237,622 | 226,468 |
| Inventories | 65,171 | 77,809 |
| Trade receivables | 107,619 | 99,227 |
| Other receivables | 8,433 | 7,548 |
| Cash and cash equivalents | 43,856 | 24,443 |
| Fixed assets held for sale | 8,693 | 8,239 |
| Current assets | 233,772 | 217,266 |
| Total ASSETS | 471,394 | 443,734 |
| EQUITY and LIABILITIES | ||
| Issued capital | 42,495 | 42,495 |
| Share premiums | 46,355 | 46,355 |
| Consolidated reserves | 141,495 | 147,480 |
| Treasury shares | -651 | -261 |
| Currency translation adjustments | -19,134 | -31,520 |
| Equity excluding non-controlling interest | 210,560 | 204,549 |
| Non-controlling interest | 1,466 | 1,376 |
| Equity including non-controlling interest | 212,026 | 205,925 |
| Interest-bearing loans | 93,551 | 93,361 |
| Long-term provisions | 21,247 | 20,805 |
| Deferred tax liabilities | 5 ,063 | 3,890 |
| Non-current liabilities | 119,861 | 118,056 |
| Interest-bearing loans | 51,054 | 32,907 |
| Trade debts | 61,656 | 57,817 |
| Tax liabilities | 5,149 | 5,963 |
| Employee related liabilities | 12,130 | 13,357 |
| Other liabilities | 9,518 | 9,709 |
| Current liabilities | 139,507 | 119,753 |
| Total EQUITY and LIABILITIES | 471,394 | 443,734 |
| In thousand € | 2010 | 2011 |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Profit (+) / loss (-) for the period | 8,548 | 6,348 |
| Depreciation (in)tangible fixed assets | 28,174 | 24,872 |
| Impairments of (in)tangible fixed assets | 1,729 | 714 |
| Provision for pensions, restructuring and other risks & charges | 811 | -688 |
| Impairments on current assets | 2,208 | 1,042 |
| Net financial charges | 14,976 | 14,006 |
| Profit on sale of tangible fixed assets | -235 | -174 |
| Loss on sale of tangible fixed assets | 127 | 267 |
| Income taxes | 881 | 1960 |
| Share based payment transactions settled in equity | 203 | 166 |
| Cash flow from operating activities before movements in working capital and provisions |
57,422 | 48,513 |
| Decrease/(increase) in trade debtors and other receivables | -11,429 | 622 |
| Decrease/(increase) in inventories | -4,875 | -13,512 |
| Increase/(decrease) in trade debts | 4,689 | -1,623 |
| Decrease/(increase) in other non-current assets | 376 | 259 |
| Decrease/(increase) in other current assets | -1,878 | -696 |
| Increase/(decrease) in other non-current liabilities | 349 | -1,443 |
| Increase/(decrease) in other current liabilities | 414 | 570 |
| Cash flow generated from operating activities | 45,068 | 32,690 |
| Interest received | 1,862 | 1,209 |
| Income tax paid | -4,579 | -4,357 |
| CASH FLOW FROM OPERATING ACTIVITIES | 42,351 | 29,542 |
| In thousand € | 2010 | 2011 |
|---|---|---|
| INVESTING ACTIVITIES | ||
| Cash receipts on sale of tangible fixed assets | 3,749 | 705 |
| Purchases of tangible fixed assets | -15,481 | -21,783 |
| Purchases of intangible fixed assets | -162 | -99 |
| Other transactions | -392 | -123 |
| CASH FLOW FROM INVESTING ACTIVITIES | -12,286 | -21,300 |
| FINANCING ACTIVITIES | ||
|---|---|---|
| Repayments of long-term debts | -21,976 | -23,955 |
| Repayments (-) / New (+) short-term debts | -6,216 | 753 |
| Interest paid | -7,629 | -7,891 |
| Other financial items | 1,061 | 6,156 |
| CASH FLOW FROM FINANCING ACTIVITIES | -34,760 | -24,937 |
| Net increase (+) / decrease (-) in cash and cash equivalents | -4,695 | -16,695 |
| Cash and cash equivalents as per 1 January | 50,902 | 43,856 |
| Impact of exchange rate fluctuations | -2,351 | -2,718 |
| Cash and cash equivalents as per 31 December | 43,856 | 24,443 |
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