Regulated information - 2016 results
Under embargo until Thursday 23 February 2017 at 7:00 a.m. CET
Deceuninck 2016: growth continues. Sales: € 670.9m (+4.1%), REBITDA: € 65.1(+16.5%) and net result: € 21.0m (+ 57.1%)Sales grow 4.1% to € 670.9m driven by strong business development especially in Turkey and US, which is partially offset by the decision to phase out certain low margin products. Negative FX largely compensated by price increases.
Strong performance in Turkey despite challenging market conditions. Outlook Turkey remains uncertain, however both IMF and OECD forecast continued real GDP growth.
REBITDA increased to €65.1m thanks to higher sales, one-off raw material gains in certain markets and efficiency improvements which are offset by one-off costs and the Brexit impact.
Net profit increases to €21.0m explained by higher REBITDA, the recognition of one time tax benefits and the capital gain on the sale of the US decking business.
The Board will propose to the Annual General Meeting to increase the dividend to
€ 0.03 per share.
Strong investments in efficiency and growth financed with operating cash flow, proceeds from sale US decking business and extension of payment terms from suppliers
Key 2016 projects delivered
Optimization manufacturing footprint Turkey is well on track. Construction of the new Menemen factory and the expansion of the Kartepe site have been finalized, which will allow us to serve customers from two state-of-the-art facilities by Q2 2017.
US manufacturing capacity has been expanded thanks to the successful start of a new facility in Fernley, Nevada (Q4 2016) which will allow us to better service West Coast customers.
Commercialization of various new products and the acquisition of an innovative ventilation and aluminium system, which will over time strengthen our entire product portfolio.
"We are pleased with our 2016 result and would like to thank all our partners for their trust. Our performance further improved in all key markets, which confirms our strategy.
Key 2016 projects like the realisation of 2 state-of-the-art manufacturing facilities in Turkey, the start of the new plant in Fernley (US) and the acquisition of an innovative ventilation and aluminium system have been successfully delivered.
Uncertainty in Turkey is likely to remain high but experts like IMF and OECD see continued growth and our management team in the region has a strong track record. In addition we carefully monitor the recent rise in raw material prices and will take appropriate action."
Press release www.deceuninck.com
Key figures
Income Statement
(in € million)
2015
2016
Var (%)
1H 2016
2H 2016
Sales
644.5
670.9
4.1%
330.2
340.7
Gross profit
182.0
204.7
12.5%
103.6
101.1
Gross-margin (%)
28.2%
30.5%
31.4%
29.7%
EBITDA(1)
53.4
67.0
25.4%
34.6
32.3
REBITDA(1)
55.9
65.1
16.5%
32.5
32.5
REBITDA-margin (%)
8.7%
9.7%
9.9%
9.6%
EBIT
26.9
36.1
34.5%
21.2
14.9
Financial result
(10.0)
(13.9)
(5.8)
(8.1)
EBT
16.9
22.2
31.8%
15.4
6.8
Income taxes
(3.5)
(1.3)
(2.3)
1.0
Net profit
13.3
21.0
57.1%
13.1
7.8
(1): EBITDA has been redefined as EBIT excluding depreciations of fixed assets and amortization of goodwill. REBITDA has been redefined as EBITDA excluding non recurring costs or benefits such as capital gains or major restructuring programs.
Under the previous definitions EBITDA would have amounted to €71.3m and REBITDA €74.3m
Balance Sheet
(in € million)
2015
2016
Var (%)
Equity
269.3
275.0
2.1%
Net debt
92.1
88.4
(4.0%)
Total assets
562.6
601.1
6.8%
Capital expenditure
38.7
79.4
105.0%
Working capital
142.9
111.1
(22.2%)
Management Statement
Sales
% of sales
total
Western Central & Eastern Europe Europe
Turkey & Emerging markets
North America
Sales (in € million) 2015
644.5
170.5
169.7
193.1
111.2
Volume
3.6%
2.7%
(4.7%)
9.2%
7.6%
Exchange rate
(4.4%)
(2.1%)
(1.9%)
(11.0%)
0.3%
Other (price,mix)
4.9%
2.9%
2.0%
12.8%
(1.3%)
Total
4.1%
3.5%
(4.7%)
10.8%
6.6%
Sales (in € million) 2016
670.9
176.5
161.8
214.0
118.6
2016 Sales in Western Europe increased by 3.5% to € 176.5 million (2015: € 170.5 million). This is driven by one-off project sales (€ 3.1m sound walls) and strong growth in NL, IT and UK (in local currency) which have been partially offset by weak market conditions and competitive pressure in FR and the 13% GBP weakening (-€3.5m) which was only partially compensated by price increases.
In Central & Eastern Europe 2016 sales decreased by 4.7% to € 161.8 million (2015: € 169.7 million). This is mainly explained by our decision to phase out selected low margin products and the further decline of the Russian market, which is partially compensated by strong business development in the Balkans. The 9% RUB depreciation has been compensated by price increases.
Turkey & Emerging Markets predominantly serves the domestic market in Turkey. 2016 Sales increased by 10.8% to € 214.0 million (2015: € 193.1 million). Despite a slowdown of real GDP growth to 2.9% volumes increased 9.2% thanks to superior products, service and branding in Turkey and further growth in Emerging Markets (mainly Chile). The TRY depreciation has been compensated by price increases.Sales in North America increased by 6.6% to € 118.6 million (2015: € 111.2 million). Sales growth was driven by strong business development on the back of superior service, which has been partially offset by the sale of the decking business in January 2016. The sale of the decking business had a negative impact on sales of an estimated 5%. USD/EUR remained stable at 1.11.
Financial results
REBITDA(1) increased to € 65.1 million or 9.7% on sales (2015: € 55.9 million or 8.7% on sales). The REBITDA improvement was the result of higher volumes in all regions except for Central and Eastern Europe, efficiency improvements (integration of Gebze into Kartepe plant in Turkey and the integration of Enwin in the Protvino plant in Russia, the phase out of low margin products), and one-off raw material savings. The improvement was partially offset by the impact of the Brexit and one-off costs (restructuring, start-up costs Tunal and Isora, development of SAP template). EBITDA(1) increased to € 67.0 million (2015: € 53.4 million) explained by higher REBITDA and the one- off € 2.8 million capital gain realized on the divestment of the US decking business. Operating result (EBIT) was € 36.1 million (2015: € 26.9 million). Depreciation and amortisation expenses increased due to higher capex and impairment on Czech building following the decision to integrate the Czech warehousing operations in Poland. Financial result was € (13.9) million (2015: € (10.0) million). The increase in financial expenses is explained by FX (revaluation of EUR denominated loans in Turkey) and the higher interest cost of the retail bond. Income tax expenses amounted to € 1.3 million (2015: € 3.5 million) and include the one time recognition of US tax assets and tax incentives for construction of new facility in Turkey, partially compensated by the reversal of previously recognized tax assets in BelgiumThe net profit in 2016 was € 21.0 million versus € 13.3 million in 2015.
Balance sheet
Trade working capital on sales reduced to 16.6% compared to 22.2% end 2015, which is mainly explained by increased factoring from €16.2m in 2015 to €27.9m in 2016 and the €21.0m extension of payment terms to suppliers in Turkey. Capital expenditures in 2016 amounted to € 79.4 million compared to € 38.7 million in 2015. This increase is mainly explained by the investments in new factories in Turkey (Menemen) and the United States (Fernley), development of new products and a further improvement of the productivity of our operational processes.The net financial debt at 31 December 2016 amounted to € 88.4 million against € 92.1 million at 31 December 2015, implying that investments have been financed by operating cash flow, the sale of the US decking business and the extension of supplier terms in Turkey.
Outlook
Assuming no material macro-economic disturbance in our key regions, growth is expected to continue throughout 2017 on the back of innovative product launches and superior quality and service, and supported by further efficiency gains. We however closely monitor the recent evolution of currencies and raw material prices as well as the increased level of uncertainty in some of our end markets.
Financial calendar 2017
23
February
2017
2016 Annual results
25
April
2017
Annual Shareholders Meeting at 4 pm
24
August
2017
H1 2017 results
End of press release
About DeceuninckFounded in 1937, Deceuninck is a top 3 independent manufacturer of PVC and composite profiles for windows and doors, outdoor living, roofline & cladding and interior applications.
Headquartered in Hooglede-Gits (BE), Deceuninck is organised in 4 geographical segments: Western Europe, Central & Eastern Europe, North America and Turkey & Emerging Markets.
Deceuninck operates 15 vertically integrated manufacturing facilities, which together with 21 warehousing and distribution facilities guarantee the necessary service and response time to Customers. Deceuninck strongly focuses on innovation, ecology, design.
Contact Deceuninck: Bert Castel • T +32 51 239 204 • M +32 474 212 414 • bert.castel@deceuninck.com
Deceuninck NV published this content on 23 February 2017 and is solely responsible for the information contained herein.
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