Wavin 2011 revenue up 7.8% to EUR 1.3 billion
(Thomson Reuters ONE) -
Zwolle,29 February 2012 - Following a trading update issued 8 February 2012,
Wavin today announces its Second Half Year and Full Year 2011 results.
Full Year2011
* Revenue EUR 1.3 billion, up 7.8%; 8.3% on a like-for-like basis
* Sharp rise of raw material costs in H1 put significant pressure on margins
* Ebitda EUR 98.0 million, 5.9% below EUR 104.1 million in 2010; Ebitda margin
7.4% (2010: 8.5%)
* Net profit EUR 18.0 million (2010: EUR 7.1 million)
* Net debt EUR 228 million (EUR 256 million in 2010); leverage ratio 2.4
H2 2011
* Growth in Second Half Year levelled off as unrest on financial markets
affected construction activity
* Revenue EUR 645.8 million, up 1.3%, or 4.4% on like-for-like basis
* Ebitda EUR 52.0 million (H2 2010: EUR 56.2 million); H2 Ebitda margin 8.1%
(8.8% in H2 2010)
Henk ten Hove, Wavin CEO:
"After a strong start of 2011, supported by a mild winter, we saw a gradual
deterioration of market circumstances in some of our key countries. Scandinavia
and Eastern Europe performed well, while results in the UK, France and Italy
were disappointing. As already announced, we have taken measures to address this
and will reduce total staff in 2012 with 150 FTEs, saving EUR 5 million annually
at a one-off cost of EUR 3.5 million.
Good progress was made with the Wavin 2015 strategy. We expanded in Sweden and
Czechia, divested continental clay and our French irrigation activities and
closed our small business in Spain. We reduced net debt and have extended our
financing facility until April 2015, with relaxed covenants, while margins and
other conditions remained unchanged."
Outlook
We remain cautious for 2012. Sentiment differs in our key countries. While the
situation in Scandinavia, Germany, Poland and Turkey looks positive, market
expectations in the UK and the Netherlands are less encouraging. In 2012 we will
grasp the opportunities for growth and pursue local leadership in line with the
Wavin 2015 plan. Joining forces with Mexichem, should allow us to further
accelerate our strategy.
Markets
Following a good start of the year - supported by a mild winter - the European
construction market was adversely affected by weakening consumer confidence.
This was fuelled by unrest in the financial markets, cuts in government spending
and further mortgage restrictions.
There were notable differences between countries and regions. The markets in
Scandinavia, Germany, Poland and Turkey were strong, whereas those in the UK,
Italy, the Netherlands and Ireland remained challenging. New residential
building activities recovered somewhat in most Western European countries but
were weak in Eastern Europe. Residential repair, maintenance and improvement
(RMI) was stable, while the non-residential markets did not show signs of
recovery. Developments in the civil engineering sectors in various European
countries were positive, boosted by infrastructure investments like construction
for the Olympic Games in London and the European Football Championships in
Poland and Ukraine.
Wavin's performance in 2011
Wavin recorded a 7.8% revenue growth in 2011. Scandinavia, Germany and Poland
grew double digit, but performance in Italy, the UK, France and Ireland was
disappointing. Operational issues in the South West Europe region, which were
addressed in the course of the year, impacted the results negatively.
The Above Ground business benefitted from a slight recovery in several Western
European residential markets, our continued focus on Hot & Cold systems
(including Surface Heating & Cooling) and the further roll-out of low-noise soil
and waste systems.
Our Below Ground activities performed well, due to our strong market positions
and the high level of infrastructure investments in especially Poland. The
consolidation of our sales joint venture in Czechia and the water business
acquired from KWH Pipe Sverige AB further contributed to this positive
development.
Revenue
Revenue was EUR 1,327 million up 7.8% compared to 2010. On a like-for-like
basis, revenue rose by 8.3%. As we generated 60% of our revenue outside the
Eurozone, the appreciation of non-Euro currencies had a positive effect of 1.2%
on reported revenue. The consolidation of the water business in Sweden, acquired
in 2010, contributed 1.2% towards revenue growth.
H2 revenue was up 1.3% (4.4% on a like-for-like basis).
Gross profit
Gross profit amounted to EUR 288.6 million, 1.3% below 2010. Raw material costs
rose sharply, only levelling off towards the end of the year. The general
economic climate, combined with overcapacity in the industry, caused delays in
passing on higher input cost to the market. This put pressure on margins. Price
competition was noticeably fiercer in the more generic product ranges and in
markets lacking clear market leadership. Our focus on complexity reduction and
manufacturing optimisation contributed to further reduction of production costs.
Ebitda
The Ebitda - operating result before depreciation, amortisation and non-
recurring items - decreased 5.9% to EUR 98.0 million, from EUR 104.1 million in
2010. The increased operational leverage from volume growth partly compensated
higher raw material costs and operational challenges in the UK and France. The
Ebitda margin fell to 7.4%, from 8.5% in 2010. The H2 Ebitda margin came in at
8.1% (2010: 8.8%).
Non-recurring items in operating result
Non-recurring items in the operating result were EUR 5.8 million (2010: EUR 6.4
million). Non-recurring costs of EUR 7.8 million (2010: EUR 7.2 million) related
mainly to restructuring measures. Non-recurring income of EUR 2.0 million was
recorded on sale of assets and the realised negative goodwill related to the
acquisition in Sweden.
Operating result
The drop in Ebitda was partly compensated by lower depreciation and non-
recurring expenses. The 2011 operating result was EUR 35.5 million, a decrease
of EUR 2.4 million or 6.3%, compared to 2010.
Financing costs and tax
Net finance costs were reduced to EUR 28.2 million in 2011, from EUR 34.1
million in 2010. Interest costs were EUR 31.1 million compared to EUR 34.8
million in 2010, due to lower interest margins and a lower average debt. In
2011, the average interest rate paid was 6.4% compared to 7.4% the previous
year. The weakening of the Euro against most other currencies resulted in
exchange rate losses of EUR 0.4 million (2010: EUR 1.0 million).
An income tax benefit of EUR 6.2 million was booked, compared to a benefit of
EUR 1.1 million in 2010. This included the release of a tax provision of EUR
6.8 million related to the sale of associates in 2006.
Associates
Wavin's 40% stake in a joint venture that specialises in pressure fittings for
gas and water applications contributed EUR 2.4 million to the results almost
equal to last year.
Net profit
Net profit rose to EUR 18.0 million in 2011 from EUR 7.1 million in 2010.
Adjusted for one-off charges and benefits, recurring net profit amounted to EUR
10.7 million (2010: EUR 8.9 million). Profits attributable to shareholders
increased from EUR 5.8 million in 2010 to EUR 17.1 million in 2011. Earnings per
share were EUR 0.34, compared to EUR 0.11 in 2010.
Dividend
Given the limitations on paying dividend sunder the terms of the Finance
Facility, the Boards of Wavin have decided to add the 2011 profit attributable
to shareholders to the reserves.
Cash flow
Working capital decreased by EUR 21.7 million to EUR 98.2 million. Although
input costs were substantially higher, inventories were reduced from EUR 171.9
million to EUR 153.2 million. Accounts receivable were in line with last year,
despite revenue growth in emerging markets with longer payment terms. Cash flow
from operating activities improved to EUR 101.1 million (2010: EUR 59.3
million), largely due to the working capital reduction. Depreciation and
amortisation decreased slightly to EUR 59.0 million, well above the net
investment level. Net investments were EUR 50.1 million, compared to EUR 37.6
million in 2010, which included substantially higher divestments of assets.
Net debt
Net debt at year-end was down EUR 28.2 million to EUR 227.9 million, compared to
EUR 256.1 million at year-end 2010. The decrease was primarily related to the
working capital reduction. The company operated well within the bank covenants.
At year-end the leverage ratio (net debt/last twelve months Ebitda) was 2.4,
well below the threshold of 3.0. The interest coverage ratio (Ebitda/net
interest expense) was 4.2 against a minimum of 2.8. Wavin's main source of
funding was a syndicated loan facility of EUR 500 million, which expired in
October 2011 and was replaced with a EUR 475 million syndicated loan facility
expiring in April 2013. Early 2012 we agreed with our main lending banks to
amend and extend the facility to April 2015. The facility was reduced to EUR
440 million and covenants were relaxed, but margins and other conditions
remained unchanged. The amended and extended facility provides Wavin with
sufficient headroom and flexibility to respond to uncertain market conditions
and offers a solid base for executing the Wavin 2015 strategy.
Employees
Year-end 2011, the Wavin Group had a workforce of 6,221 employees, compared to
6,448 the previous year. The decrease is partly due to the divestment of
activities in France and the sale of the Euroceramic continental clay
operations.
Developments per Business Unit
Wavin is organised in six business units that cover the Above Ground and Below
Ground building segments.
AboveGround
Hot & Cold
Hot & Cold water systems are plastic and metal-plastic systems for the
distribution of tap water in the house, connections to radiators and systems for
surface heating and cooling. Revenue from Hot & Cold systems was EUR 275.8
million, slightly higher than in 2010. Revenue development varied throughout
Europe. Solid growth was achieved in Denmark, Germany, the Netherlands, Poland,
and Turkey, but new residential markets in the UK and Italy as well as export
sales from Turkey, were difficult. In 2011 the new generation Hep2O push-fit
fitting system was rolled out in the UK. After a slow start, when the full range
of fittings was not yet available, sales recovered well.
Revenues of the Surface Heating & Cooling business grew 9.2 % in 2011. Increased
awareness for building sustainability - further supported by international
certifications - boosted the demand for our energy efficient solutions.
Soil & Waste
The Soil & Waste business - which addresses indoor waste water discharge - saw
revenue increase by 6.4% to EUR 170.1 million. Growth was realised across Europe
and is mainly driven by residential and RMI activities, which were relatively
stable. Our low-noise systems are used for both residential and non-residential
construction and are marketed across Europe.
Other Building systems
Products in this segment (such as roof gutters and electrical conduit pipes)
complete the above ground offering in some of Wavin's European markets. Revenue
in this segment decreased 8.5% to EUR 45.2 million.
Below Ground
Foul Water Systems
Foul Water Systems' revenue rose by 12.7% to EUR 420.0 million, excluding the
divestment of the continental clay activities growth was 15.3%. Wavin
particularly benefited from its strong position in the Scandinavian countries,
Germany, Poland and Turkey. Our complete range of inspection chambers continued
to substitute those made of concrete. We increased the use of recycled material
in our PVC multi-layer pipes, making these products even more sustainable. A
good example of our commitment to this is the introduction of Recycore®
technology in the UK for the manufacturing of multi-layer, solid-core pipes,
made with over 50% recycled content.
Water Management
Wavin offers intelligent solutions for managing rain water runoff from hard
surfaces, such as roofs and roads to ground water. As in recent years, most
European countries were again faced with the challenges of storm water
management in urban areas, with flooding following heavy rainfall causing severe
problems. Because of this - and despite the economic situation - the Water
Management business expanded in both the residential and non-residential
sectors. Despite the divestment of irrigation activities in France, Water
Management revenue grew by 3.6% to EUR 147.2 million, from EUR 142.1 million in
2010.
Within this business, the Intesio rainwater management segment grew almost 13%.
This successful concept is now available in nine countries and combines a full
range of products, with project design and calculation tools for civil engineers
and investors
Water & Gas
Revenues in Water & Gas increased by 15.7% to EUR 180.8 million. The acquisition
of the Swedish water business of KWH contributed significantly to this result.
Cable Ducting
The cable ducting business experienced strong growth, driven by the development
of microduct-based solutions for the telecom industry. Revenue increased to EUR
60.4 million, 13.3% above 2010. A recovery of the telecom market was driven by
large projects in Eastern Europe and increasing investments by established
companies in 'fibre to the home'.
Results per region
North West Europe (the Netherlands, Germany, Belgium, Denmark, Norway, Sweden,
Finland)
The North West Europe region's revenue rose by 20.5 % to EUR 489.0 million.
Ebitda came in at EUR 36.8 million, from EUR 30.7 million in 2010. The Ebitda
margin was 7.5%, almost equal to 2010.
After a decline of nearly 30% in the previous two years, the construction market
in the Netherlands showed little growth. With consumer confidence remaining low
Residential new build and renovation segments stabilised, but the non-
residential segment continued to decline. Under these difficult market
conditions Wavin maintained its leading position and market share.
In Germany all sectors showed market growth. With its good position in Below
Ground applications Wavin benefited from the growth in infrastructure
investments, especially in the (bio) gas and water segment. With the completion
of the range of fittings for metalplastic pipes system for hot and cold water
distribution, Wavin's Hot & Cold business achieved strong revenue growth.
In Belgium the cancellation of tax advantages to stimulate the residential
segment and low consumer confidence, resulted in a drop in applications for new
building permits and a gradual weakening of the residential demand. This was
compensated by increased activity in the non-residential segment. Wavin Belgium
performed strongly in the public sector, where demand for projects to separate
rainwater from foul water was strong.
In Denmark the residential new build market showed strong growth while RMI
residential and infrastructure markets improved. In both Above Ground and Below
Ground systems, Wavin Denmark has a market leading position and improved its
market share.
In Sweden we successfully integrated the water business acquired from KWH and
upgraded the production facility to comply with Wavin's standards. We now have a
stronger overall market position and are number two in the Below Ground segment.
In Norway, where market conditions were stable, we increased our revenues. We
are the market leader in the growing water management segment, in cable ducting
and in soil & waste.
In Finland, the heating and plumbing market grew strongly, and we retained our
leading position in tanks and separators.
South West Europe (United Kingdom, France and Ireland)
The performance in the South West Europe region was disappointing due to a
combination of challenging market conditions and operational issues that were
addressed in the course of the year. Revenue declined by 3.8% to EUR 356
million. In 2011 we divested the Euroceramic continental clay business, the
irrigation and geocomposite business (completed in 2012) in France. Excluding
these divestments revenue increase was 0.6%. Ebitda was EUR 5.7 million,
compared to EUR 25.7 million in 2010. The margin was 1.6%, compared to 6.9% in
2010.
In the UK, the construction market slowed down, with output 2% lower than in
2010. Spending on residential building showed a decline of almost 3% whilst non-
residential building declined as cuts in government funding started to take
effect. After showing encouraging growth in 2010, the number of new housing
starts fell slightly in 2011. Wavin UK's performance was also impacted by the
effects of the slow introduction of the next generation Hep2O fittings and the
related cost inefficiencies. The full Hep2O range was available as of the second
half of the year and market acceptance is good. At the end of the year, we
signed a contract to supply Hep2O to British Gas's network of 10,000 installers.
In France, markets slowed down in the second half of the year. Existing housing
sales declined sharply, while new build activity declined after a change in tax
legislation for investment in rental properties.
Wavin France faced delivery problems at the beginning of the year as a result of
the introduction of a new barcode system. These issues were resolved in the
course of 2011.
In Ireland, after several difficult years during which GDP shrunk by a
cumulative 11.6% in three years, the economy started to stabilise. We maintained
our number one position in the market and managed to increase our market share
within some categories, including Hot & Cold.
Central & Eastern Europe (Poland, Czechia, Lithuania, Estonia, Latvia, Belarus,
Russia, Ukraine and Slovakia)
Revenue in the Central & Eastern Europe region rose by 14.0% from EUR 199.0
million in 2010 to EUR 226.9 million in 2011. Ebitda for the year ended at EUR
29.1 million, slightly above the EUR 28.8 million achieved the previous year.
The Ebitda margin dropped to 12.8% mainly due to the full year consolidation of
the sales joint-venture in Czechia.
In 2011 Poland recorded a relatively high and well-balanced economic growth. The
non-residential market increased by nearly 4%. The infrastructure business
showed strong growth, partly due to the EU subsidised programs and investments
related to the European Football Championships in Poland and the Ukraine.
Wavin Poland saw an increase in demand in below ground systems supported by the
mild winter. After two strong quarters, however, infrastructure demand leveled
off. This was compensated by accelerated growth in, amongst others, the
residential Hot & Cold segment.
The Czech market remained weak in 2011. We transferred the responsibility for
domestic sales to Wavin Osma, a commercial joint venture 65 % owned by Wavin and
35% by Osma, a German manufacturer of plastic pipe systems. With an improved
product portfolio and a stronger organisation, Wavin Osma has successfully
maintained its leading overall market position in the Czech market.
The Baltics (Lithuania, Latvia, Estonia) and Belarus enjoyed economic growth,
predominantly due to increased exports to EU partners and Russia. In 2011 Wavin,
the number two in the region, improved its market positions in Latvia and
Lithuania.
South East Europe (Italy, Turkey Hungary, Romania, Croatia, Serbia)
In the South East Europe region, revenue was almost the same as in 2010 at EUR
196.8 million. Ebitda increased to EUR 10.1 million from EUR 9.0 million.
The construction sector in Italy declined for the fourth consecutive year. Both
residential and non-residential output dropped by more than 6% in 2011. Under
these market conditions credit control is extremely important. In this
fragmented market with no clear market leader, raw material cost increases were
difficult to pass on.
In Turkey, a key growth market for Wavin, the construction market grew by 10% in
2011. We have a strong position in Below Ground and are now focusing to grow our
market position in the Above Ground segment. In 2011 good progress was made in
this segment. The important export business from Turkey to neighbouring
countries was affected by strict credit control. We implemented a number of
initiatives to reduce costs and align the organisation to the 2015 strategy.
Hungary's economic climate remained challenging, and construction output dropped
for the sixth year in a row. We hold strong market positions in both the Above
Ground and Below Ground sectors and were able to increase our overall market
share during the year. In December, the Hungarian Competition Authority started
an investigation of Hungarian pipe producers suspected of forming a price fixing
cartel. We are co-operating actively with the authorities, providing any
information required and have no reason to believe that we violated anti-trust
rules.
Wavin Overseas and others
A number of entities of the Wavin Group are not included in the regional
structure, including Wavin Overseas, Wavin China, Wavin Technology & Innovation
and Group holding companies.
Wavin Overseas is responsible for our commercial activities outside Europe and
sells Wavin products and technologies globally through a network of 120 agents
and licensees. In 2011, growth was particularly strong in the Middle East and
Asia. Wavin Overseas expanded its licensing base of the proprietary Biax
technology for PVC pipe systems. This technology enables pipes to be
manufactured with less raw material and with better properties than pipes
manufactured using traditional methods. In Asia, sales of our patented Compact
Pipe system for trenchless pipe rehabilitation grew.
Financial Calendar 2012
14 March Publication Annual Report 2011 on corporate website
28 March Registration date for General Meeting of Shareholders
19 April Trading Update Q1 2012
25 April Annual General Meeting of Shareholders
23 August Publication of H1 figures 2012
18 October Trading Update Q3 2012
About Wavin
Wavin is the leading supplier of plastic pipe systems and solutions in Europe.
The company provides essentials: plastic pipe systems and solutions for tap
water, surface heating and cooling, soil and waste, rain- and storm water,
distribution of drinking water and gas and telecom applications. Wavin is
headquartered in Zwolle (The Netherlands) and has a presence in 25 European
countries. The company employs approximately 6,200 people and reported revenue
of approximately EUR 1.3 billion for 2011. Outside Europe, it has a global
network of agents, licensees and distributors. Wavin is listed on the NYSE
Amsterdam stock exchange (WAVIN). More details about Wavin can be found at
www.wavin.com
For further information:
Media Relations: Investor Relations :
Herbert van Zijl Ton Bruijne
Telephone: +31 38 429 4209 Telephone: +31 38 429 4357
Mobile: +31 6 51461442 Mobile : +31 6 51234949
E-mail: media(at)wavin.com E-mail: InvestorRelations(at)wavin.com
Cautionary note regarding forward-looking statements
This announcement contains forward-looking statements. Forward-looking
statements are statements that are not based on historical fact, including
statements about our beliefs and expectations. Any statement in this
announcement that expresses or implies our intentions, beliefs, expectations or
predictions (and the assumptions underlying them) is a forward-looking
statement. Such statements are based on plans, estimates and projections as
currently available to the management of Wavin. Forward-looking statements
therefore speak only as of the date they are made and we assume no obligation to
publicly update any of them in the light of new information or future events.
Annexes:
* Consolidated income statement
* Consolidated balance sheet
* Consolidated statement of cash flows
* Consolidated statement of changes in equity
* Key figures last three years
* Revenue and Ebitda breakdown per region, revenue breakdown per Business Unit
Click here for the release in PDF:
http://hugin.info/143050/R/1589869/499385.pdf
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Wavin N.V. via Thomson Reuters ONE
[HUG#1589869]
Unternehmensinformation / Kurzprofil:
Datum: 29.02.2012 - 08:16 Uhr
Sprache: Deutsch
News-ID 119822
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