For plastic pipe manufacturer Wavin (Zwolle / The Netherlands; www.wavin.com), escalating raw material prices in the second half of 2010 put considerable pressure on the company's profits. Although sales rose 8.5% to EUR 637m in the second six months, EBITDA was down 13% at EUR 56.2m, and the operating result fell 31% to EUR 21.3m. For the full year 2010, the Dutch company declared "solid" revenue development of 6.2%, lifting the figure to EUR 1.23 bn.

Wavin generates nearly 60% of its sales outside the euro zone, therefore, the company benefited from positive exchange rate effects. The operating result increased from EUR 32.9m to EUR 37.9m due to lower non-recurring costs and depreciation charges than in 2009. CEO Henk ten Hove described 2010 as a "transition year" after a two-year stretch of managing through the credit crisis. In addition, the harsh winter, the tough competition and the substantial increases in raw material costs had exerted a considerable effect. Significant events for the company in 2010 were the acquisition of KWH Sweden – see Plasteurope.com of 10.11.2010 – and the creation of a sales joint venture in the Czech Republic. Furthermore, the company continued its restructuring program, reorganised its business units and also reduced the number of sales regions.

Wavin achieved double-digit growth last year in Scandinavia and the UK as well as in some larger emerging markets such as Poland and Turkey. In contrast, the company described business development in the Netherlands, Italy and some eastern European countries as "disappointing". In Germany, the building sector recovered but overcapacity in the industry caused delays in passing on raw material price increases to the market.

Wavin remains cautious about the outlook for 2011. It says there are signs of stabilisation in the European construction sector, but the level of recovery differs considerably from one country to another. The company intends to pass on the latest rise in raw material costs to its customers. Overall, the Wavin management expects revenue in 2011 to develop faster than the average for the European construction industry. One of the main reasons for this optimism is the company's strong presence in Europe's emerging markets.