WAVIN
Building decline leads to 50% drop in operating profit / Performance falls in all regions / Challenging market
Pipe systems manufacturer Wavin (Zwolle / The Netherlands; www.wavin.com) suffered a 50% year-on-year fall in operating profit (EBITDA) to EUR 45.5m in the first six months of 2009. Sales fell to EUR 572m in the period, compared with EUR 834m in the first half of 2008. The company said that it had operated in difficult market conditions, compounded by a relatively harsh winter, but said that there had been signs of demand stabilisation in recent months.
Operating profit margins fell to 8% in the first half of 2009, compared with 11% in the same period in 2008. However, the second quarter margin of 12.0% almost equalled the 12.1% achieved in the second quarter of 2008. The margin in the first quarter of 2009 was only 2.8%. A net loss of EUR 7.2m in the period includes restructuring charges, relating mainly to redundancy costs, of EUR 12.9m before tax.
Restructuring programmes delivered annualised savings ahead of the targeted EUR 40m. Wavin’s headcount was reduced by 1350 year-on-year in the first half of 2009, including a second wave of job cuts in the UK – see Plasteurope.com of 22.01.2009.
In the building and installation business unit (above ground plastic pipe systems and solutions) revenue decreased 32% to EUR 222m, representing 39% of total first half 2009 revenue. The hot and cold water segment additionally suffered due to Wavin’s strong position in the UK region.
The civils and infrastructure business (below ground plastic pipe systems and solutions) accounted for 60% of total group revenue in the second half of 2009. Compared with the same period in 2008, where the effect of the credit crisis on the building sector was still limited, revenue decreased by 31.4% to EUR 341m.
All geographical regions felt the impact of the credit crisis on the building industry and performed significantly below last year, both in revenue and operating profit. The north west Europe region was relatively less impacted than other parts of Europe, with the German market holding up relatively well with some pick up in demand in the civils and infrastructure business in the second quarter of 2009. The UK/Ireland region was the first area that felt the full effects of the financial crisis with a fall of more than 40% in housing starts in the UK in the period 2007-2009. There were signs of stabilisation in the UK in Q2 compared with Q1, albeit at a very low level, Wavin said.
Looking forward, the company said that developments affecting the building industry are difficult to forecast and that the market will remain challenging throughout the year. Following the successful completion of a EUR 227m rights issue in July, Wavin said that it had created substantial financial headroom to steer the business through economic downturn and to further build on its leading market position. It does not foresee any significant improvement of construction activity levels in 2009, with further revenue decline in the second half of the year. However, it is confident that, as a result of all cost reduction measures, the operating result in the second half of the year will be better than in the first half of 2009.
e-Service:
Detailed Wavin presentation on the first half 2009 with balance sheet figures as a PDF document (105 KB)
Operating profit margins fell to 8% in the first half of 2009, compared with 11% in the same period in 2008. However, the second quarter margin of 12.0% almost equalled the 12.1% achieved in the second quarter of 2008. The margin in the first quarter of 2009 was only 2.8%. A net loss of EUR 7.2m in the period includes restructuring charges, relating mainly to redundancy costs, of EUR 12.9m before tax.
Restructuring programmes delivered annualised savings ahead of the targeted EUR 40m. Wavin’s headcount was reduced by 1350 year-on-year in the first half of 2009, including a second wave of job cuts in the UK – see Plasteurope.com of 22.01.2009.
In the building and installation business unit (above ground plastic pipe systems and solutions) revenue decreased 32% to EUR 222m, representing 39% of total first half 2009 revenue. The hot and cold water segment additionally suffered due to Wavin’s strong position in the UK region.
The civils and infrastructure business (below ground plastic pipe systems and solutions) accounted for 60% of total group revenue in the second half of 2009. Compared with the same period in 2008, where the effect of the credit crisis on the building sector was still limited, revenue decreased by 31.4% to EUR 341m.
All geographical regions felt the impact of the credit crisis on the building industry and performed significantly below last year, both in revenue and operating profit. The north west Europe region was relatively less impacted than other parts of Europe, with the German market holding up relatively well with some pick up in demand in the civils and infrastructure business in the second quarter of 2009. The UK/Ireland region was the first area that felt the full effects of the financial crisis with a fall of more than 40% in housing starts in the UK in the period 2007-2009. There were signs of stabilisation in the UK in Q2 compared with Q1, albeit at a very low level, Wavin said.
Looking forward, the company said that developments affecting the building industry are difficult to forecast and that the market will remain challenging throughout the year. Following the successful completion of a EUR 227m rights issue in July, Wavin said that it had created substantial financial headroom to steer the business through economic downturn and to further build on its leading market position. It does not foresee any significant improvement of construction activity levels in 2009, with further revenue decline in the second half of the year. However, it is confident that, as a result of all cost reduction measures, the operating result in the second half of the year will be better than in the first half of 2009.
e-Service:
Detailed Wavin presentation on the first half 2009 with balance sheet figures as a PDF document (105 KB)
02.09.2009 Plasteurope.com [214260]
Published on 02.09.2009
German version of this article...