Press Release 21 September 2011 Financial results for the first half of 2011
Sales of € 1,115 million, an overall increase of 6.2% compared to the first half of last year and a like-for-like* increase of 6.3%.
Operating income (EBIT) of € 116 million includes a non-recurring profit of € 15 million, and is 22.4% higher than the EBIT of the first half of last year. This corresponds to a like-for-like* increase of 22.8%.
Increased sales levels in Europe, but contrasted performance across regions.
Satisfactory performance in North America and Australasia. Good performance in Asia but challenging market conditions in South Africa.
Overall increase of sales in Latin America, difficult conditions persisted in some regions.
The unaudited interim financial information for the first half of the year 2011 was presented to the Board of Directors at its meeting held on 16 September.
COMMENTS During the period there have been no changes in the scope of consolidation. Sales in the first half of 2011 were € 1,115 million (2010: € 1,050 million), an overall increase of 6.2%. Excluding exchange impacts, the underlying increase in sales was 6.3%. Despite a partial recovery, sales still remained below pre-crisis levels as a result of market conditions. Operating income was € 116 million (2010: € 95 million), 10.4% of sales and an overall increase of 22.4%. At constant exchange rates the increase in operating income was 22.8%. This result was positively impacted by a non-recurring profit of € 15.0 million. Excluding this effect, operating income was € 101 million, representing 9.1% of sales and a 6.7% increase versus the comparable period. Net Financial Debt at 30 June 2011 was € 366 million, € 45 million below that at 30 June 2010. This amount was impacted by the funding of the North-American conditional settlement of product liability claims amounting to €30.9 million. In the course of July, the Group finalised a series of agreements to replace the 2005 syndicated credit facility that otherwise would have expired in May 2012. The new agreements consist of a syndicated credit facility (€ 650 million) expiring in 2016, and private placements for an aggregate amount of USD 260 million with maturity dates of 7, 10 and 12 years. During the period, the Group continued its prudent cash management policy focused on strict working capital management and tight control of all costs. As for the comparable period, seasonality mainly accounts for the increase in non cash working capital compared to the position at the end of last year. Budgeted capital expenditures for the year were at normalized levels and key projects have continued to be carried out according to plan. Sales increases during the period mainly originated from our activities in Europe and Latin America. Operating profit margins remained globally stable in an environment where raw material prices substantially increased and even, in some cases, exceed pre-crisis levels.
Europe Sales increases were achieved in an environment where margins remained under pressure. France and Germany were the main exceptions in a trading environment that generally remained disappointing, with difficult conditions in Spain, Italy and the UK. The Utilities and Industry Division performed more satisfactorily than the Building Products and Sanitary Division. North America North American and, in particular, Canadian trading conditions remained at levels broadly in line with those of the recent past and our activities continued to perform well during the period. Australasia, Asia and Africa In Australia and New Zealand, activities stabilised at levels slightly below those of previous periods, while Asia continued to show growth. Despite a recent reorganization, the business in South Africa continued to suffer from challenging circumstances as a result of market overcapacity. Latin America Market conditions in Latin America improved and the operations generally reported growth in sales and margins. In certain markets conditions remain challenging.
OUTLOOK FOR THE SECOND HALF OF 2011 Towards the end of the second quarter and continuing during the Summer, some activities have encountered more difficult conditions in specific markets. Pending stabilisation of the general economy no significant short or medium term improvements are anticipated and certain markets could possibly further deteriorate. In combination with the continued roll out of strategic projects, the Group’s focus will be on margin improvement. The improvement in the results of the first half of 2011 compared to the first half of 2010 can therefore not be extrapolated to the full year.
SUMMARY FINANCIAL INFORMATION First half
Condensed Interim Consolidated Statement of Comprehensive income (€ million)
2011
2010
Sales
1,115
1,050
65
2,123
145
140
5
265
% of sales
13.0%
13.4%
Current EBIT***
101
95
6
176
Operating income (EBIT)
116
95
21
136
10.4%
9.1%
103
86
17
116
73
55
18
71
1
1
-
2
72
54
18
69
Current EBITDA**
% of sales
Profit before income taxes
Net profit,
Inc/(Dec)
Full year 2010
12.5%
6.4%
attributable to : ■
Non-controlling interests
■
Group equity holders
First half Full year 2010
Earnings per share 2011 Basic earnings per share (€)
Condensed Consolidated statement of financial position (€ million)
2010
0.83
0.62
Inc/(Dec) 33.9%
30 June
30 June
Inc /
2011
2010
(Dec)
0.79
31 December 2010
Intangible Assets
590
637
(47)
613
Property, Plant and Equipment
580
622
(42)
609
Non Current Investments
36
37
(1)
37
Other Non Current Assets
21
22
(1)
22
Total Non Current Assets
1,227
1,318
(91)
1,281
Non Cash Working Capital
553
534
19
383
Total
1,780
1,852
(72)
1,664
Equity (attributable to Group)
1,334
1,335
(1)
1,299
10
11
(1)
9
1,344
1,346
(2)
1,308
Non Current Liabilities
43
71
(28)
67
Deferred Tax Liabilities (net)
27 366
24 411
3 (45)
14 275
1,780
1,852
(72)
1,664
Non-controlling interests Total Equity
Net Financial Debt Total
*Like-for-like being at constant exchange rates and excluding the impact of changes in scope of consolidation ** Current EBITDA being EBITDA before non-recurring items *** Current EBIT being EBIT before non-recurring items
Contact: Manuel Monard (Group Corporate Development Finance Manager) Tel. 32-2-775 5050 – Fax. 32-2-775 5051 E-mail: aliaxis@aliaxis.com