Press Release 14 April 2011 Results for the year 2010 •
Revenue €2,123 million, an increase of 10.5% (a like-for-like¹ increase of 3.5%).
•
Operating income (EBIT) € 136 million, an increase of 12.0% (a like-for-like¹ increase of 4.2%).
•
Conditional settlement of product liability claims in North America resulting in a one-off cost of € 30.9m
•
Mixed performance in Europe: low demand levels in the UK, Spain and Italy and resilience in France and Germany.
•
Positive impact of government spending in North America, Canada in particular.
•
Mexican market continued to fall short of the pre-crisis levels and only modest recovery in Central American countries.
•
Good performance in Peru and focus on productivity and range in other South American countries.
•
New Zealand and Asia performed well. Australia impacted by adverse weather conditions. Difficult circumstances in South Africa.
•
Proposed dividend of € 0.27 gross per share (€ 0.2025 net), an increase of 12.5%
On 12 April 2011, the Board of Directors approved the submission of the consolidated accounts for the year 2010 to the General Meeting of Shareholders that will be held on 25 May 2011. COMMENTS Revenue from sales in 2010 was €2,123 million (2009: €1,921 million), an overall increase of 10.5%. On a like-for-like¹ basis, the increase in revenue was 3.5%. There have been no changes in the scope of consolidation in 2010. Operating income was €136 million (2009: €121 million), representing 6.4% (2009: 6.3%) of revenue, an overall increase of 12.0% (a like-for-like¹ increase of 4.2%). Operating income includes charges of €8.9 million (2009: €0.5 million) relating to impairment of goodwill and €30.9 million relating to the conditional settlement in March 2011 of product liability claims in North America. Current EBIT2 was €176 million (2009: €130 million), an increase of 35%. The net profit (Group’s share) of the year was €69 million (2009: €78 million). Excluding the impact of non-recurring items, current net profit3 increased by €37.7 million in 2010, to €100 million.
Whilst the global economy started improving in 2010, the trading environment generally continued to be challenging for construction related industries. Notwithstanding such circumstances, and in a context where resin prices increased to price levels that were prevailing prior to the financial crisis, the Group managed an increase in both turnover and profitability. Year end financial indebtedness was reduced by €54 million (€87 million excluding the impact of exchange rate movements) to €275 million. The improvement resulted from the combination of various elements, including a number of regionally more favourable trading conditions, especially in Canada, and the continuing positive impact of the Group’s action plan implemented to address the crisis. Europe In Europe, performance continued to be mixed. A number of activities in the Building and Sanitary division suffered from the combination of overcapacity in the industry and increased raw material prices. The Utilities and Industry division benefitted from modest improvements in trading conditions as a result of their higher exposure to emerging markets. Geographically the markets in the UK, Spain and Italy continued to face low levels of demand. As in previous periods, our businesses in Germany and France proved to be more resilient. Performance in the Benelux was stable but Eastern European markets continued to be difficult. North America US and Canadian government spending, in particular on infrastructure, continued in 2010. This positively impacted the construction-related industry, especially in Canada, where housing starts increased notably and infrastructure projects remained at a high level. The effect on our US operations was more limited as the constructionrelated industries remained below pre-crisis levels. Latin America Despite a general GDP growth in the region the effects of the economic recovery did not flow through to construction activity. In Mexico, sales levels continued to fall short of those achieved before the financial crisis and only modest recovery characterised other Central American countries. With the exception of Peru, South American markets remained challenging for our operations and focus remained on productivity and range. Australasia, Asia and South Africa In New Zealand, the Canterbury earthquake has generated important reconstruction activity. Our businesses continued to perform well. Rural and irrigation markets in Australia suffered the impact of adverse weather conditions which affected the performance of our operations. This was partially offset by increased export sales. GDP growth in Asia was particularly strong and our operations in China, Malaysia and Singapore continued to perform well. The environment in South Africa remained particularly difficult and a major cost reduction programme was implemented to preserve competitiveness.
OUTLOOK FOR 2011 Looking forward, our market environment is expected to be characterised by some modest improvements in the larger markets where the Group has operations combined with continued increases in raw materials. In the absence of a more general recovery in our markets, the Group will continue to pursue a number of initiatives fundamental to its future strategic direction. The Group will remain vigilant and continue to monitor the particular circumstances of each activity and will, if necessary, take measures to preserve its overall competitiveness.
ANALYSIS OF REVENUE By geographical area
By industrial activity
STATEMENT OF THE AUDITOR The statutory auditor, KPMG Bedrijfsrevisoren – Réviseurs d’Entreprises, represented by Benoit Van Roost, has issued an unqualified audit opinion on the consolidated financial statements.
SUMMARY TRADING INFORMATION
Year ended 31 December (€ million)
2010
2009
Revenue
2,123
1,921
202
265
219
46
12.5%
11.4%
176
130
% of revenue
8.3%
6.8%
Operating income (EBIT)
136
121
% of revenue
6.4%
6.3%
116
112
4
71
79
(8)
2
2
-
69
78
(9)
100
62
38
Current EBITDA
4
% of revenue
Current EBIT ²
Profit before income taxes
Net profit,
Inc/(dec)
46
15
attributable to : ■
Non-controlling interest
■
Equity holders of the Company
Current profit
%
€ per share, share of Equity holders of the 5 Company
2010
2009
Inc/(dec)
Basic earnings per share
0.79
0.90
(12.2)%
Fully-diluted earnings per share
0.79
0.90
(12.2)%
Proposed gross dividend
0.27
0.24
12.5%
SUMMARY CONSOLIDATED FINANCIAL POSITION
At 31 December (€ million)
2010
2009
Inc/(dec)
Intangible Assets
613
579
34
Property, Plant and Equipment
609
596
13
Non Current Investments
37
36
1
Deferred Tax Asset
24
20
4
6
4
2
22
20
2
1,312
1,256
56
383
372
11
Total
1,695
1,628
67
Equity holders of the Company
1,299
1,170
129
9
10
(1)
1,308
1,180
128
Non Current Liabilities
16
18
(2)
Deferred Tax Liability
39
45
(6)
Employee Benefit
57
56
1
275
329
(54)
1,695
1,628
67
Employee Benefit Other Non Current Assets Total Non Current Assets Non-Cash Working Capital
Non-controlling interest Total Equity
Net Financial Debt Total
1
Like-for-like being at constant exchange rates and excluding the impact of changes in scope of consolidation 2
Current EBIT being profit from operations before non recurring items
3
The net amount of non-recurring items (goodwill impairment and other non-recurring items) and the gain on the transaction related to the 49% membership interest in Aliaxis Latinoamerica Cooperatief UA positively impacted net profit in 2009 by €15.5 million. In 2010 non-recurring items (€ 8.9 million of goodwill impairments and, net of taxes, €21.9 million of other non-recurring items) negatively impacted the net profit in 2010 by €30.8 million. 4
Current EBITDA being EBITDA before non recurring items
5
Per share data calculated on the total weighted number of shares in issue, net of treasury shares.
Contact: Manuel Monard (Group Corporate Development Manager) Tel. 32-2-775 5050 – Fax. 32-2-775 5051 E-mail: aliaxis@aliaxis.com