PRESS RELEASE
Aliaxis posts substantial performance improvement in the first half of 2015 Aliaxis S.A. 2015 - Half-year results
Brussels, 15 September 2015 Aliaxis, a global leader in the manufacturing and distribution of plastic fluid handling systems, releases its 2015 half-year results today. Newly appointed CEO Laurent Lenoir comments: “I am pleased to announce that Aliaxis has posted excellent results in the first half of 2015, despite challenging market conditions. Our strong focus on performance improvement is clearly paying off. The integration of Vinidex in Australia is starting to deliver and will further strengthen our geographic diversification.” The unaudited interim financial information for the first half of 2015 was presented to the board of directors on 10 September 2015.
Highlights •
Revenue of € 1.531 billion, an increase of 22.3% compared to the first half of 2014 1
•
Current EBITDA 2 of € 205 million, up 31.4%
•
Current EBIT 3 of € 152 million, up 34.1%
•
Group’s net profit of € 83 million, a € 22 million increase year-on-year
•
Two small, bolt-on acquisitions (US and Singapore) in line with the group’s development strategy
•
Successful refinancing of € 850 million, supporting Aliaxis’ growth objectives
Trading review Aliaxis achieved a major performance improvement in the first half of 2015. This is the result of a number of cost reduction initiatives the group successfully implemented in order to improve its overall efficiency and enhance its profitability across the various regions. The integration of Vinidex, Australia’s leading manufacturer and supplier of thermoplastic pipe and fitting systems acquired in August 2014, and the effect of currency exchange rates also positively impacted both top- and bottomline results. On average, Aliaxis recorded limited organic growth. In India however, growth reached double digits. The price of raw material varied significantly across the continents. While resin shortages were recorded in certain geographies, the group successfully managed to ensure a steady supply for its customers.
1
All comparisons are made relative to the first half of 2014, except where otherwise stated Current EBITDA being EBITDA before non-recurring items 3 Current EBIT being profit from operations before non-recurring items 2
Aliaxis faced difficult conditions in Europe as most of its markets showed no signs of recovery. Demand weakened in building and infrastructure, especially in France. However, a number of cost management initiatives have positively contributed to the group’s performance improvement. North America recorded a slow start to the year due to the severe winter in Canada and major parts of the US, but the group managed to catch up with a strong performance during the second quarter. While the supply to the mining and oil businesses in Canada has shown signs of weakening, the housing market remains robust. Furthermore, Aliaxis continued to do well in the US construction market. In line with its growth strategy to strengthen its position in the US, the group acquired Naco Industries, a leading manufacturer of fabricated fittings and low pressure valves, serving infrastructure, irrigation and industrial markets with four manufacturing plants and warehouses across the US. Most markets were down in Latin America, especially in South America, which was hit by the global mining industry and regional housing sector slowdown. However, performance improved significantly through focused margin and cost management, in line with the objectives of the transformation plan launched in 2014. Revenue grew solidly in Asia, boosted by a double-digit growth in India. The group continued to expand its presence in this promising, yet highly competitive market, by strengthening its sales and marketing efforts and launching a series of new products tailored to the Indian market. Aliaxis also entered the Singapore building market by acquiring Snow, a leading brand in uPVC pipes and fittings, and its related manufacturing and commercial assets. In Australasia, the group faced a difficult economic environment, especially in market segments affected by the drop in commodity prices. Even though the group managed to mitigate the impact thereof by securing important supply contracts to the coal seam gas industry, margin pressure negatively impacted the group’s profitability. Nevertheless, the integration of Vinidex is progressing well and will offer opportunities to strengthen the group’s global position, going forward. In the first half of 2015, Aliaxis delivered a number of key customer projects, such as the roof drainage systems for a large car manufacturer’s warehouse in Germany, the supply of major pipe systems to the expansion of the Panama canal and above and below-ground pipework and electrical ducting for various major government projects in New Zealand as part of the Christchurch earthquake rebuild. The group also progressed well in the further development of its manufacturing footprint. Expansion of its plant in western Canada is nearing completion and a new production facility is being built in Malaysia. Furthermore, a new test facility for long-shafted, vertical metal pumps was inaugurated last June in Germany. This will speed up innovation and improve the logistic flow, to further raise customer service levels. In addition, the group continued to invest in R&D and innovation. At the Aliaxis Innovation Days, held in March, the group awarded special recognition to several new product launches. These included, amongst others, the newest low-maintenance and highly efficient irrigation system, the new-generation electrical junction boxes and the unique two-way ball valve for linear flow regulation.
Financial review In the first half of 2015, Aliaxis’ revenue rose by 22.3% to € 1,531 million, compared to € 1,252 million in the same period last year, of which 10.0% is due to favorable currency effects. The group posted limited organic growth, while the integration of Vinidex in the consolidation scope contributed significantly to the strong revenue growth. The group’s operating income (EBIT) showed a major increase, by 38.6% to € 147.6 million, which equates to an EBIT margin on sales of 9.6%, compared to 8.5% in the same period last year. Key contributors were the performance improvement initiatives that are being implemented in the various regions. Positive currency effects accounted for 12.4% of the increase. The Vinidex integration also contributed to the bottom line.
Aliaxis S.A. - Half-year results 2015 - 2/5
The impact of non-recurring costs on the EBIT totaled € 4.3 million, mainly related to a number of industrial reorganization projects in Europe and Latin America, largely offset by gains on disposals of non-core real estate in Europe. Current EBIT increased by 34.0% to € 152.0 million (9.9% margin on sales, up from 9.1%). Current EBITDA was € 204.7 million, an increase of 31.4% (13.4% margin on sales, up from 12.5%). Net profit attributable to the group’s equity holders amounted to € 83.0 million, a € 22 million increase year-on-year. Net financial debt rose to € 703 million, following the usual seasonal pattern. July marked the group’s successful refinancing, which will support Aliaxis’ strategy to seize future growth opportunities on a global level.
Outlook Overall, the macro-economic environment is expected to remain challenging for most of the markets in which the group operates. Aliaxis will continue to focus on its cost reduction program and on innovation to support its sustainable, profitable growth.
Aliaxis S.A. - Half-year results 2015 - 3/5
Consolidated income statement (in â‚Ź million) Revenue Current
EBITDA2
as % of sales
Current
EBIT3
as % of sales
Operating income (EBIT) as % of sales
Profit before income taxes Net result
1HY2015
1HY2014
Change1
FY2014
1,531.3
1,251.6
+22.3%
2,693.6
204.7
155.9
+31.4%
317.0
13.4%
12.5%
152.0
113.4
9.9%
9.1%
147.6
106.5
9.6%
8.5%
123.5
91.3
+35.3%
161.8
85.1
60.8
+39.9%
102.1
11.8%
+34.0%
225.7 8.4%
+38.6%
195.6 7.3%
attributable to: - non-controlling interests - group equity holders 1
2.1
0.2
1.6
83.0
60.7
100.6
All comparisons are made relative to the first half of 2014
2 Current
EBITDA being EBITDA before non-recurring items
3 Current
EBIT being profit from operations (EBIT) before non-recurring items
Earnings per share (in â‚Ź) Basic earnings
1HY2015
1HY2014
FY2014
1.04
0.76
1.26
Aliaxis S.A. - Half-year results 2015 - 4/5
Consolidated financial position (in € million)
30 June 2015
31 Dec. 2014
30 June 2014
Intangible assets
919
887
748
Property, plant & equipment
873
835
689
Investment properties
12
13
13
Other assets
23
29
22
Deferred tax assets
24
24
22
Derivatives
61
45
18
Employee benefits
41
37
36
Non-current assets
1,953
1,870
1,548
676
522
593
2,629
2,392
2,141
1,514
1,381
1,328
66
58
54
1,580
1,439
1,382
Deferred tax liabilities
98
94
79
Employee benefits
85
87
76
Derivatives
27
25
17
Other non-current liabilities
135
122
116
Net financial debt
703
626
471
2,629
2,392
2,141
Non-cash working capital TOTAL Equity attributable to group equity holders Non-controlling interests Total equity
TOTAL
About Aliaxis Aliaxis is a global leader in the manufacturing and distribution of plastic fluid handling systems, generating annual revenue of € 2.7 billion (in 2014). Present in over 40 countries with more than 100 manufacturing and commercial entities, the group totals 16,200 employees around the globe, serving customers in residential and commercial construction, as well as in industrial and public infrastructure applications. Aliaxis’ well-known brands such as Ashirvad, Durman, Friatec, IPEX, Nicoll and Vinidex have a strong identity and are firmly established in the geographic markets they serve. Thanks to the entrepreneurial spirit of its people, balanced with the strengths, know-how and international reach of the group, Aliaxis continues to develop and improve its positions in key construction applications throughout the world. More on www.aliaxis.com Contact Françoise VANTHEMSCHE Group Communications Director +32 2 775 50 50 – communications@aliaxis.com Aliaxis S.A. – Avenue de Tervueren 270 – 1150 Brussels – Belgium
Aliaxis S.A. - Half-year results 2015 - 5/5