Earnings Release • May 10, 2011
Earnings Release
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Regulated Information – First quarter 2011 trading update Under embargo until Tuesday 10 May 2011 at 7:30 a.m. CET
"Sales during the first quarter of 2011 developed in line with our expectations, despite a difficult environment. Sales were strong in the Benelux, France and Germany. The negative impact of year end pull forward sales, due to the phase out of government incentive programs was limited to the United States.
We expect sales growth to continue, with regional differences. Order intake at the beginning of the second quarter shows similar trends as in the first quarter. Sustainability and energy efficiency continue to drive demand.
Current geopolitical developments and the continued rising raw material costs remain cause for caution. Raw material costs have been rising for 15 consecutive months. The European PVC Price index in April 2011 was 8% higher compared to December 2010, and 19% higher than April 2010.
Oil and PVC forecasts are being monitored closely. We continue our efforts to push the increased raw material costs in our sales prices within very competitive market conditions.
Assuming that this will be successful, and considering further measures to maintain profitability, we confirm the previous guidance : within the current environment we expect to continue sales and profit growth into 2011."
"At Deceuninck, we believe in 'building a sustainable home'. Plastics only use 4% of non-renewable fossil fuels and PVC uses less than 1%. 40% is used for heating buildings. Plastic building products are light-weight, long lasting and provide superior insulation. PVC and Twinson wood composite are low maintenance materials, which save energy throughout a 50+ year life cycle, and will be recycled at end of life. Last year, the industrywide "Vinyl2010" initiative collected and recycled 250.000 tonnes of postconsumer PVC from building applications. Deceuninck continues to invest its R&D efforts into sustainable building products. In line with its business plan, Deceuninck will double its capital expenditures to reach its sustainability goals in manufacturing, PVC recycling and new product development.
Long term, energy-efficient construction and renovation will continue to grow as an engine of the construction industry. For energy savings, PVC windows remain the 'best value for money'. Deceuninck brings this message to the market through 'Building a sustainable home'. For more details on the Deceuninck story, see the redesigned www.deceuninck.com"
Deceuninck's consolidated sales for the first quarter 2011 were € 116.6 million, a year-on-year increase of 6.8% (Q1 2010: € 109.2 million). Mix effects (country, price and product) had a favourable impact of 4.6%. Volume increased by 2.4%; exchange rates hardly had any impact (-0.2%).
| In € million | Q1 2010 | Q1 2011 | Variance |
|---|---|---|---|
| Western Europe | 49.2 | 54.3 | +10.3% |
| Central & Eastern Europe (incl. Germany) | 26.1 | 27.8 | +6.6% |
| Turkey | 21.2 | 22.4 | +5.8% |
| United States | 12.7 | 12.0 | -5.3% |
| Total | 109.2 | 116.6 | +6.8% |
First quarter sales in Western Europe were € 54.3 million, a year-on-year increase of 10.3%. The double digit growth for the region was driven by strong sales in France, the Benelux and Italy. Market conditions continued to be weak in Spain, whereas demand in UK remained unchanged in comparison with the same quarter a year before.
First quarter sales increased year-on-year by 6.6% to € 27.8 million.
Demand take off at the beginning of the quarter was weak due to a long winter period. Towards the end of the quarter sales developed favourably in most countries. Sales were strong in Germany.
Sales increased by 5.8% to € 22.4 million (Q1 2010: € 21.2 million). At constant exchange rate sales grew 8%. Exports from Turkey to Northern Africa were negatively impacted by the political instability in the region. Domestic demand continued to be robust.
First quarter sales were € 12.0 million compared to € 12.7 million a year ago, a decrease of 5.3% (-4% at constant exchange rate). Sales were impacted by the 2010 year end termination of the \$1500 renovation tax credit. Residential renovation activity was negatively affected by falling housing prices and relatively high unemployment.
Financial calendar
| 14 | July | 2011 | Q2 trading update |
|---|---|---|---|
| 26 | August | 2011 | 2011 halfyear results |
| 20 | October | 2011 | Q3 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 3000 people in 25 countries, of which 700 in Belgium. In 2010 Deceuninck attained a net result of € 8.5 million from a turnover of € 558 million.
Contact Deceuninck: Ludo Debever • T +32 51 239 248 • M +32 473 552 335 • [email protected]
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