H1 2016: Sales grow to € 330.2m (+5.8% vs. H1 2015) with 9.9% REBITDA (vs. 8.2% in H1 2015)

Regulated information - H1 2016 results

Under embargo until Friday 26 August 2016 at 7:00 a.m. CET

• Sales increased 5.8% primarily driven by strong business development on the back of superior quality and service, and enabled by further capacity investments

• REBITDA increased to 9.9% thanks to improved operating leverage, further efficiency improvements, and the phase out of certain low margin products. Negative exchange rate fluctuations and higher raw material prices in certain regions are being compensated by price increases.

• Strategic projects in Turkey (new Menemen factory and integration of Gebze factory) and US (new West Coast factory) are on track. This, together with the ambition to invest further in efficiency and new technologies, will result in significantly higher CAPEX levels in both 2016 and 2017.

"We are pleased with our H1 2016 results, which are in line with our expectations, and the progress we are making with the implementation of our operating plan. We however closely monitor the increased macro-economic uncertainty in some of our key markets."

1. Key figures

2. Income Statement

   (in € million)	H1 2015	H1 2016	Var (%)
   Sales	312.1	330.2	5.8%
   Gross profit	90.7	103.6	14.2%
   Gross-margin (%)	29.1%	31.4%
   EBITDA (*)	25.4	34.6	36.4%
   REBITDA	25.6	32.5	27.0%
   REBITDA-margin (%)	8.2%	9.9%
   EBIT	12.0	21.2	75.8%
   Financial result	(4.6)	(5.8)
   EBT	7.5	15.4
   Income taxes	(2.7)	(2.3)
   Net profit	4.7	13.1

   Press release www.deceuninck.com

3. Balance Sheet

   (in € million at June 30)	2015	2016
   Total assets	532.3	596.1	12.0%
   Equity	264.3	279.0	5.6%
   Net debt	92.1	109.1	18.4%
   Capital expenditure	12.5	32.6	160.3%
   Working capital	151.7	161.1	6.2%

4. Management Statement

5. Sales

   Western % of sales Total 1H Europe			Central & Eastern	Turkey & Em erging	North America
   Europe	Markets
   Sales (in € million) 2015	312.1	88.2	78.5	93.3	52.1
   Volume	5.3%	1.9%	(2.4%)	11.3%	11.8%
   Exchange rate	(5.6%)	(1.0%)	(3.5%)	(14.9%)	0.0%
   Other (price & mix)	6.2%	6.6%	3.3%	14.2%	(4.6%)
   Total	5.8%	7.4%	(2.6%)	10.5%	7.2%
   Sales (in € million) 2016	330.2	94.7	76.4	103.2	55.9

   H1 2016 sales in Western Europe increased 7.4% to € 94.7 million (H1 2016: € 88.2 million). This was driven by new product launches and competitive wins as well as a one-off project income, and supported by an on average modest market growth. Higher raw material prices are being compensated by price increases and low margin products are being phased out.

   In Central & Eastern Europe H1 2016 sales expressed in euro decreased by 2.6% to € 76.4 million (H1 2015: € 78.5 million), as the positive effect of new business development and the launch of new products has been offset by the decision to phase out a low margin product range, the further contraction of the Russian market and the depreciation of the ruble.

   The region Turkey & Emerging Markets predominantly serves the domestic market in Turkey, which represents ± 90% of total sales of the region. H1 2016 sales expressed in euro increased by 10.5% to

   € 103.2 million (H1 2015: € 93.3 million), driven by exceptionally strong business development despite the contraction of the Turkish market. Price increases have been implemented to offset the depreciation of the Turkish Lira and the resulting increase of USD denominated raw material costs. At constant exchange rates sales grew 25.3%.

   Sales of Deceuninck North America expressed in euro increased year-on-year by 7.2% to € 55.9 million (H1 2015: € 52.1 million), thanks to strong business development on the back of superior quality and service, and supported by an estimated 4%-6% market growth, which is partially offset by the divestment of the decking business in January 2016. FX (Foreign Exchange) impact is negligible.

6. Operating results

   Gross-margin increased to 31.4% (H1 2015: 29.1%). Gross margin improved as a result of improved operating leverage and the phase out of selected low margin products. Negative exchange rate fluctuations and higher raw material prices in certain regions are being compensated by price increases. REBITDA* increased to € 32.5 million or 9.9% of sales (H1 2015: € 25.6 million or 8.2% of sales) as a result of the improved gross margin and operating leverage. This, combined with a one time € 3.0m capital gain related to the divestment of the US decking business, resulted in an EBITDA increase to

   € 34.6 million (H1 2015: € 25.4 million)

   Operating result (EBIT) was € 21.2 million (H1 2015: € 12.0 million). Depreciation charges amount to

   € 13.5 million against € 13.3 million in H1 2015.

   Financial result was € (5.8) million (H1 2015: € (4.6) million). Interest expenses were € 1 million higher mainly due to higher net debt. Income tax expense amounted to € 2.3 million (H1 2015: € 2.7 million). Tax expenses were lower year-on- year as higher profitability has been offset by a more favourable country mix and tax incentives related to the new factory in Menemen (TR).

   The net profit in H1 2016 was € 13.1 million versus € 4.7 million in H1 2015.

7. Balance sheet

   Trade working capital at 30 June 2016 amounted to 24.3% of LTM (Last Twelve Months) sales as compared to 22.2% on 2015 sales at 31 December 2015, due to seasonal fluctuations and the advance payment of certain investments. Total factoring amounted to € 34.8 million at 30 June 2016. Capital expenditures in H1 2016 amounted to € 32.6 million compared to € 12.5 million in H1 2015 which reflects the impact of the large strategic investments in Turkey and the United States.

   The net financial debt at 30 June 2016 amounted to € 109.1 million against € 92.1 million

   at 31 December 2015. This increase is explained by the fact that the increased profitability as well as the € 6m proceeds of the US decking divestment have been offset by higher working capital and the ongoing strategic investments.

8. Outlook

9. Assuming no material macro-economic disturbance in our key regions, growth is expected to continue throughout 2016 on the back of innovative product launches and superior quality and service.

   *(R)EBITDA has been redefined. EBITDA is EBIT excluding depreciation/ impairments of fixed assets as well as amortisation/impairment of goodwill and effect of negative goodwill.

   REBITDA is defined as EBITDA excluding non-recurring costs/benefits,eg restructuring costs.

   Financial calendar 2016

   21 October 2016 3Q 2016 trading update

   End of press release

   About Deceuninck

   Founded 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 14 vertically integrated manufacturing facilities, which together with 22 warehousing and distribution facilities guarantee the necessary service and response time to Customers. Deceuninck strongly focuses on innovation, ecology, design.

   Contact Deceuninck: Ludo Debever • T +32 51 239 248 • M +32 473 552 335 • ludo.debever@deceuninck.com

   Annexe 1: consolidated income statement

   For the six month period ended 30 June (in € thousand)	2015 Unaudited	2016 Unaudited
   Sales	312,114	330,187
   Cost of goods sold	(221,426)	(226,590)
   Gross profit	90,688	103,597
   Marketing, sales and distribution expenses	(54,732)	(55,449)
   Research and development expenses	(4,131)	(4,356)
   Administrative and general expenses	(21,358)	(22,844)
   Other net operating result	1,581	227
   Operating profit (EBIT)	12,048	21,176
   Financial charges Financial income	(16,218) 11,647	(11,380) 5,588
   Profit before taxes (EBT)	7,478	15,383
   Income taxes	(2,745)	(2,256)
   Net profit	4,732	13,127

   The net profit is attributable to:
   Shareholders of the parent company	4,748	13,036
   Non-controlling interests	(16)	90

   Earnings per share distributable to the shareholders of the parent company (in €):
   Normal earnings per share	0.04	0.10
   Diluted earnings per share	0.03	0.09