Earnings Release • Aug 26, 2011
Earnings Release
Open in ViewerOpens in native device viewer
Regulated information – Half year 2011 Results Under embargo until Friday 26 August at 7:30 a.m. CET
€ 12.3 million raw materials cost increases mostly offset by sales prices, productivity improvements and disciplined control of fixed costs resulting in a net profit of € 3.1 million.
| In € million | 1H 2010 | 1H 2011 | % variance |
|---|---|---|---|
| Net sales | 265.3 | 268.9 | +1.3% |
| Gross Profit | 83.3 | 78.2 | -6.1% |
| Gross Profit margin (%) | 31.4% | 29.1% | |
| REBITDA | 29.0 | 25.1 | -13.4% |
| EBITDA | 28.6 | 24.6 | -13.9% |
| EBITDA-margin (%) | 10.8% | 9.2% | |
| EBIT | 12.7 | 11.3 | -11.0% |
| EBIT-margin (%) | 4.8% | 4.2% | |
| Net result | 3.8 | 3.1 | -18.4% |
| Net result margin (%) | 1.4% | 1.1% |
"H1 2011 sales confirmed the brittle recovery of the worldwide economy and regional changes in demand. Whereas the year started rather promising, sales volume weakened in the United States, Central Europe and Russia as of May. Demand continued to be favourable in the Benelux, France, Germany and Turkey.
Raw material cost continued its upward trend until May, resulting in a year-on-year average price index increase of 18%. From June onwards upward pressure of raw material prices eased off. At the end of June 2011, PVC resin price index was 9% higher as compared to the end of 2010.
Gross profit was protected by continued productivity improvement and sales price increases. Cost savings programmes resulted in a decrease of operational expenses of 3.8%, despite wage inflation.
These actions resulted in an EBITDA of € 24.6 million (9.2%) and a net profit of € 3.1 million."
"At the start of the third quarter, sales volumes confirm the Q2 trend, on the back of weakening macro economic indicators. The increase of raw material prices to record levels has now stabilized and the related sales price increases now gradually offset this increased cost. To protect profitability, Deceuninck continues its productivity improvement and cost saving programmes.
Within the current macro-economic environment, we reiterate our July guidance that Deceuninck's top and bottom line for the full year 2011 will be similar to the levels of 2010."
"At Deceuninck, we believe in 'building a sustainable home'. 40% of non-renewable fossil fuels is used for heating and cooling buildings. Plastics only 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. Deceuninck continues to invest its R& D efforts into sustainable building products to reach its sustainability goals in manufacturing, PVC recycling and new product developments.
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 www.deceuninck.com"
| In € million | 1H | 1H | Var. 1H | Var.1H |
|---|---|---|---|---|
| 2010 | 2011 | 2010/11 | loc.curr. | |
| Western Europe | 109.7 | 117.2 | +6.8% | |
| Central & Eastern Europe | 71.8 | 71.8 | 0.0% | |
| Turkey | 51.7 | 52.6 | +1.7% | +10.9% |
| United States | 32.1 | 27.3 | -15.1% | -9.4% |
| Total | 265.3 | 268.9 | +1.3% |
Deceuninck's consolidated sales for the first half-year 2011 were € 268.9 million, a year-on-year increase of 1.3% (1H 2010: € 265.3 million). Mix effects (country, price and product) had a favourable impact of 6.4%. Volume decreased by 2.6%; exchange rates negatively impacted sales by 2.5%.
Half-year sales in Western Europe were € 117.2 million, a year-on-year increase of 6.8%. The growth for the region was driven by strong sales in Benelux, France and Italy. Market conditions continued to be weak in Spain, whereas initial signs of stabilisation of demand in UK were not confirmed in the second quarter.
Half-year sales were stable at € 71.8 million. The increasing sales trend witnessed in the first four months of the year was not confirmed in the traditionally stronger sales months of May and June. Sluggish demand in Russia and Central Europe contrasted with continued double digit sales growth in Germany.
Half-year sales increased by 1.7% to € 52.6 million (1H 2010: € 51.7 million). Sales were impacted by the depreciation of the Turkish lira. At constant exchange rate sales grew 10.9%. Exports from Turkey to Northern Africa were negatively impacted by the political instability in the region. Domestic demand improved further throughout the half-year.
Half-year sales fell by 15.1% to € 27.3 million. At constant exchange rate sales fell by 9.4%. Comparison base with first half-year 2010 was difficult due to 2010 renovation activity supported by various housing tax credits which ran out in April 2010 and December 2010 respectively. Residential renovation activity was additionally affected by falling housing prices, relatively high unemployment and tight credit markets.
Gross margin was 29.1% (1H 2010: 31.4%). Higher raw material costs were mostly offset by sales price increases and productivity improvements
The operating cash flow (EBITDA) amounted to € 24.6 million against € 28.6 million last year. The EBITDA margin was 9.2% against 10.8% in 1H 2010. The higher raw material costs resulted in a lower gross profit generation of € 5.0 million.
Operating expenses are under control at € 67.6 million (year-on-year -3.8%). REBITDA (recurring operating cash flow) was € 25.1 million (1H 2010: € 29.0 million).
The operating result (EBIT) was € 11.3 million (1H 2010: € 12.7 million) resulting in an EBIT margin of 4.2% compared to 4.8% in 1H 2010.
Depreciations and other non cash costs were € 13.4 million against € 15.9 million in first half of 2010. Depreciations decreased by € 1.5 million due to lower capex level of the past years. Bad debt provision was lower as a result of hands on and strict credit management.
Financial result was € -4.8 million (1H 2010: € -9.7 million), driven by the favourable exchange rate impact of USD denominated loans (€ +0.7 million versus € -3.0 million in 1H 2010) and lower net interest expenses (€ -4.8 million versus € -5.6 million in 1H 2010) as a result of debt reduction.
Income tax expense was € 3.4 million compared to an income tax benefit of € 0.8 million in first half of 2010. The tax expense relates to a year-on-year € 3.5 million higher profit before taxes, a tax rate change in Belgium as a result of the phasing out of the coordination centre and the impact of a changed legal entity mix.
The net result of 1H 2011 is a profit of € 3.1 million against a profit of € 3.8 million in the first half of 2010.
Working capital increased from € 111.1 million on 31 December 2010 to € 142.3 million on 30 June 2011.
Accounts receivables increased due to the seasonality of business.
Inventories are € 10.9m higher as compared to inventory level on 30 June 2010. Inventory increase relates to higher valuation of raw materials cost and sales volume decline at the end of the second quarter.
The operational working capital on 30 June 2011 was 21.7% of the annualized sales compared to 16.6% on 31 December 2010.
Capital expenditures during the first half of 2011 were € 8.3 million (1H 2010: € 7.8 million)
€ 6.0 million spent relates to operational capex. The remainder (€ 2.3 million) relates to new extrusion tools.
The net financial debt amounted to € 122.7 million compared to € 100.7 million in December 2010 and € 142.5 million in June 2010. The seasonal character of the business results in a working capital peak in the middle of the year. In comparison with end of June 2010 net debt is 13.9% (almost € 20 million) lower as a result of the accelerated debt reduction.
Shareholders' equity decreases € 4.5 million to € 207.5 million mainly due to currency translation adjustments (TRY)
On 30 June 2011 Deceuninck employed worldwide 2,868 full time equivalents (including temporary workers and outsourced FTEs) (30 June 2010: 2,967). At the end of the second quarter measures were taken to reduce headcount in the regions affected by the sudden drop in demand.
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]
| For the six month period ended 30 June In thousand € |
2010 Unaudited |
2011 Unaudited |
|---|---|---|
| Net sales | 265,295 | 268,866 |
| Cost of goods sold | -182,008 | -190,623 |
| Gross profit | 83,287 | 78,243 |
| Marketing, sales and distribution expenses | -47,007 | -45,504 |
| Research and development expenses | -2,786 | -2,792 |
| Administrative and general expenses | -20,526 | -19,349 |
| Other net operating result | -252 | 677 |
| Operating result | 12,716 | 11,275 |
| Financial charges | -26,740 | -14,103 |
| Financial income | 17,001 | 9,330 |
| Profit (+) / loss (-) before taxes | 2,977 | 6,502 |
| Income taxes | 827 | -3,414 |
| Profit (+) / loss (-) for the period | 3,804 | 3,088 |
| The result for the period is attributable to: | ||
| Shareholders of the parent company | 3,688 | 3,039 |
| Non-controlling interests | 116 | 49 |
| Earnings (+) /loss (-) per share distributable to the shareholders of the parent company (in €): |
||
| Normal earnings (+) / loss (-) per share | 0.03 | 0.03 |
| Diluted earnings (+) / loss (-) per share | 0.03 | 0.03 |
| In thousand € | 31 December 2010 Audited |
30 June 2011 Unaudited |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | 4,733 | 3,932 |
| Goodwill | 10,860 | 10,817 |
| Tangible fixed assets | 204,574 | 194,242 |
| Financial fixed assets | 1,310 | 1,395 |
| Deferred tax assets | 14,475 | 13,179 |
| Long-term receivables | 1,670 | 2,106 |
| Non-current assets | 237,622 | 225,671 |
| Inventories | 65,171 | 90,066 |
| Trade receivables | 107,619 | 109,390 |
| Other receivables | 8,433 | 10,402 |
| Cash and cash equivalents | 43,856 | 14,758 |
| Fixed assets held for sale | 8,693 | 7,943 |
| Current assets | 233,772 | 232,559 |
| Total ASSETS | 471,394 | 458,230 |
| EQUITY and LIABILITIES | ||
| Issued capital | 42,495 | 42,495 |
| Share premiums | 46,355 | 46,355 |
| Consolidated reserves | 141,495 | 144,684 |
| Treasury shares | -651 | -651 |
| Currency translation adjustments | -19,134 | -26,749 |
| Equity excluding non-controlling interest | 210,560 | 206,134 |
| Non-controlling interest | 1,466 | 1,331 |
| Equity including non-controlling interest | 212,026 | 207,465 |
| Interest-bearing loans | 93,551 | 92,224 |
| Long-term provisions | 21,247 | 21,144 |
| Deferred tax liabilities | 5,063 | 4,159 |
| Non-current liabilities | 119,861 | 117,527 |
| Interest-bearing loans | 51,054 | 45,232 |
| Trade debts | 61,656 | 57,193 |
| Tax liabilities | 5,149 | 7,671 |
| Employee related liabilities | 12,130 | 13,311 |
| Other liabilities | 9,518 | 9,831 |
| Current liabilities | 139,507 | 133,238 |
| Total EQUITY and LIABILITIES | 471,394 | 458,230 |
| For the six month period ended 30 June In thousand € |
2010 Unaudited |
2011 Unaudited |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Profit (+) / loss (-) for the period | 3,804 | 3,088 |
| Depreciation (in)tangible fixed assets | 14,247 | 12,727 |
| Impairments of (in)tangible fixed assets | 692 | 216 |
| Provision for pensions, restructuring and other risks & charges | -554 | 218 |
| Impairments on current assets | 1,484 | 189 |
| Net financial charges | 9,739 | 4,773 |
| Profit on sale of tangible fixed assets | -125 | -50 |
| Loss on sale of tangible fixed assets | 52 | 170 |
| Income taxes | -827 | 3,414 |
| Share based payment transactions settled in equity | 110 | 150 |
| Cash flow from operating activities before movements in working capital and provisions |
28,622 | 24,895 |
| Decrease/(increase) in trade debtors and other receivables | -29,362 | -3,691 |
| Decrease/(increase) in inventories | -19,141 | -24,768 |
| Increase/(decrease) in trade debts | 7,867 | -4,463 |
| Decrease/(increase) in other non-current assets | 84 | -521 |
| Decrease/(increase) in other current assets | -803 | -397 |
| Increase/(decrease) in other non-current liabilities | 778 | -3,668 |
| Increase/(decrease) in other current liabilities | 3,107 | 4,158 |
| Cash flow generated from operating activities | -8,848 | -8,455 |
| Interest received | 1,072 | 636 |
| Income tax paid | -1,723 | -2,717 |
| CASH FLOW FROM OPERATING ACTIVITIES | -9,499 | -10,536 |
| For the six month period ended 30 June In thousand € |
2010 Unaudited |
2011 Unaudited |
|---|---|---|
| INVESTING ACTIVITIES | ||
| Cash receipts on sale of tangible fixed assets | 650 | 456 |
| Purchases of tangible fixed assets | -7,803 | -8,281 |
| CASH FLOW FROM INVESTING ACTIVITIES | -7,153 | -7,825 |
| FINANCING ACTIVITIES | ||
|---|---|---|
| Repayments of long-term debts | 0 | -24,051 |
| New short-term debts | 0 | 19,467 |
| Repayments short-term debts | -10,319 | 0 |
| Interest paid | -5,892 | -4,004 |
| Other (incl. net financial charges, other than interests | 13,485 | -3,931 |
| CASH FLOW FROM FINANCING ACTIVITIES | -2,726 | -12,519 |
| Net increase (+) / decrease (-) in cash and cash equivalents | -19,378 | -30,880 |
|---|---|---|
| Cash and cash equivalents as per 1 January | 50,902 | 43,856 |
| Impact of exchange rate fluctuations | -3,385 | 1,782 |
| Cash and cash equivalents as per 30 June | 28,139 | 14,758 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.