Earnings Release • Oct 20, 2011
Earnings Release
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Regulated Information – Third quarter 2011 trading update Under embargo until Thursday 20 October 2011 at 7:30 a.m. CET
"Sales have continued the downward trend since June. During the third quarter, Deceuninck's customers observed a slowdown in demand. The worldwide economic environment impacted consumer confidence and reduced the willingness to invest in insulation improvements in their homes. Unfavourable currencies, especially the Turkish lira and Russian ruble, further impacted the top line.
From June onwards, the upward pressure of PVC resin prices eased off. Prices remained at historically high levels throughout the quarter. Titanium dioxide and other additive costs further increased. The 8.6% mix increase (country, price and product) is mainly driven by higher sales prices, which confirms that Deceuninck is gradually succeeding in a delayed pass-through of the record-high raw material cost increases. Due to stronger demand in countries selling higher added value, a more favourable geographic mix contributed to the increase.
Continuing weak economic indicators result in a more cautious outlook for full year 2011.Taking into account the slow-down of demand and continuing unfavourable currencies, we expect 2011 full year sales to show a decline between 3% and 4%.
Raw material prices are now stable and we continue our rigorous control of operational expenses. Our competitive position is strengthening in most markets. All of our production units show improved productivity. Working capital and fixed costs are being managed strictly and our balance sheet has been strengthened. Under these conditions, Deceuninck expects to show a positive net result for full year 2011.
"At Deceuninck, we believe in 'building a sustainable home'. 40% of non-renewable fossil fuels is used for heating and cooling buildings. Plastics use 4% and PVC uses less than 1%. 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. To reach its sustainability goals, Deceuninck continues to invest in innovative building products, eco-efficient manufacturing and recycling.
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, see www.deceuninck.com"
| In € million | Q1 | Q1 | Q2 | Q2 | Q3 | Q3 | YTD | YTD | Var.YTD |
|---|---|---|---|---|---|---|---|---|---|
| 2011 | YoY | 2011 | YoY | 2011 | YoY | 2011 | YoY | loc.curr. | |
| Western Europe | 54.3 | +10.3% | 62.9 | +4.0% | 47.5 | -3.5% | 164.7 | +3.6% | |
| Central & Eastern Europe | 27.8 | +6.6% | 44.0 | -3.8% | 51.2 | -10.1% | 123.0 | -4.5% | |
| Turkey | 22.4 | +5.8% | 30.2 | -1.1% | 26.4 | -4.1% | 79.0 | -0.3% | +12.5% |
| United States | 12.0 | -5.3% | 15.2 | -21.5% | 14.8 | -20.9% | 42.1 | -17.2% | -8.8% |
| Total | 116.6 | +6.8% | 152.3 | -2.4% | 139.9 | -8.2% | 408.8 | -2.1% |
Sales for the nine months 2011 were € 408.8 million, a year-on-year decrease of 2.1% (YTD September 2010: € 417.7 million). Mix effects (country, price and product) had a favourable impact of 7.2%. Volume decreased by 5.7%; exchange rates negatively impacted sales by 3.6%.
Sales for the third quarter 2011 were € 139.9 million, a year-on-year decrease of 8.2% (Q3 2010: € 152.4 million). Mix effects (country, price and product) had a favourable impact of 8.6%, volume decreased by 11.2%. Exchange rates, especially the Turkish lira and Russian ruble, had a negative impact on sales of 5.6% in the quarter.
Third quarter sales in Western Europe were € 47.5 million, a year-on-year decrease of 3.5%. The impact of a weakening economic environment was noticed in nearly all countries of the region. Sales were stable in France and showed a slight decline in the Benelux. In Italy sales benefitted from increasing market share of highly energy efficient PVC windows. Demand in UK and Spain remained weak.
Year-to-date September sales in Western Europe were € 164.7 million, a year-on-year increase of 3.6%.
Third quarter sales in Central and Eastern Europe were € 51.2 million, a year-on-year decrease of 10.1%. Further weakening of sales combined with year-on-year unfavourable evolution of currencies was seen in nearly all countries of the region. Sales growth on the German market slowed down to a low single digit due to deteriorating business climate.
Year-to-date September sales were € 123.0 million, a year-on-year decrease by 4.5%.
Third quarter sales in Turkey decreased by 4.1% to € 26.4 million. Sales were impacted by further weakening of the Turkish lira. At constant exchange rates sales increased by 15.2%. Exports from Turkey to Northern Africa continued to be negatively impacted by the political instability in the region. Domestic demand remained solid throughout the quarter.
Year-to-date September sales were stable at € 79.0 million (YTD September 2010: € 79.2 million). At constant exchange rate sales increased 12.5%.
Third quarter sales at Deceuninck North America decreased by 20.9% to € 14.8 million. Sales were impacted by a year-on-year weaker US dollar. At constant exchange rates sales decreased by 7.8%. Residential renovation activity continued to be affected by falling housing prices, relatively high unemployment and tight credit markets.
Year-to-date September sales decreased by 17.2% to € 42.1 million. At constant exchange rates sales fell by 8.8%.
| 26 | January | 2012 | Q4 2011 trading update |
|---|---|---|---|
| 23 | February | 2012 | 2011 annual results |
| 8 | May | 2012 | Q1 2012 trading update |
| 8 | May | 2012 | Annual Shareholders meeting at 11 am |
| 12 | July | 2012 | Q2 2012 trading update |
| 28 | 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 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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