03.08.2016
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DGAP-News: Braas Monier in Q2 2016 with positive earnings development in an uneven environment
DGAP-News: Braas Monier Building Group S.A. / Key word(s): Quarterly /
Interim Statement
Braas Monier in Q2 2016 with positive earnings development in an uneven
environment
03.08.2016 / 06:55
The issuer is solely responsible for the content of this announcement.
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Braas Monier in Q2 2016 with positive earnings development in an uneven
environment
- Strong performance in selected markets such as Germany, Poland and
South-Eastern Europe as well as first-time inclusion of newly acquired
businesses mostly compensating for negative exchange rate effects and
more challenging geographies
- Q2 2016 revenues of EUR 329.0 million down 1.8% (like-for-like -1.0%)
- Operating EBITDA growth of 2.4% to EUR 61.9 million in Q2 2016 (like-
for-like 2.2%),
Operating EBITDA margin improved by 0.8 percentage points to 18.8%
- Strong future cash flow profile further enhanced sizeably by successful
refinancing in June
- Bolt-on M&A strategy continued with acquisitions in South Africa and
the Netherlands
- Full-year revenues expected to grow by around 1% on a like-for-like
basis, additionally around 3% growth stemming from recent acquisitions
Luxembourg, 3 August 2016. Braas Monier today published its results for the
first half year and the second quarter 2016. 'Braas Monier has shown a
solid operational, financial and strategic performance since the start of
the year,' summarised Pierre-Marie De Leener, CEO and Chairman of the Board
of Directors of Braas Monier Building Group. 'We have strengthened our
Operating EBITDA, executed three further value-accretive acquisitions and
with the very successful refinancing, we reduced our cash interest charge
by more than EUR 10 million on an annualised basis. However, harsh weather
conditions in wide parts of continental Europe in June and increased
uncertainty around the UK referendum have not allowed for achieving our
full revenue potential during the second quarter.'
Revenue development dampened by weak June
Revenues decreased in the second quarter 2016 by 1.8% or EUR 5.9 million to
EUR 329.0 million (Q2 2015: EUR 334.9 million). Negative foreign exchange
effects during the period amounted to EUR -10.8 million, stemming
predominantly from a strengthening of the Euro against the South African
Rand, the British Pound and the Malaysian Ringgit. The first-time inclusion
in full of acquisitions such as Technicrete in South Africa (consolidated
as of June 2016), J.A. Plastindustri in Denmark (consolidated as of January
2016), Ceprano Coperture in Italy (consolidated as of December 2015) and
Golden Clay Industries in Malaysia (consolidated as of October 2015), had a
positive effect on revenues in the second quarter of 2016 of EUR 8.1
million or 2.4%.
On a like-for-like basis, excluding these effects, revenues were 1.0% below
the previous year's level due to lower volumes, particularly in Italy,
China and Malaysia. From April to May 2016 European tile volumes grew on a
like-for-like basis, continuing the positive trend of the first quarter
(+3.5%), but declined in June, resulting in a marginal negative like-for-
like development for the second quarter as a whole. While volumes in Asia &
Africa still decreased in the second quarter of 2016, all countries showed
an improving trend compared to the first three months of 2016, resulting in
higher growth rates in South Africa and significantly less reductions in
Malaysia. Average selling prices were slightly positive in the second
quarter 2016.
The components business showed a solid performance in the first half year
2016 and a particularly strong performance in Germany. The KPI for European
Components, which measures the amount of component revenues per square
metre roof tiles sold, reached EUR 2.37 per square metre in the six months
of 2016, exceeding the level of last year's period by 1.3%.
Revenues of the Chimneys & Energy Systems business were stable at previous
year's level in the second quarter (Q2 2016: EUR 44.2 million vs. Q2 2015:
EUR 44.0 million) with a flat volume and positive pricing development being
offset by negative currency effects. On a like-for-like basis, revenues
increased by 2.6% in the second quarter 2016.
Operating EBITDA increase backed by lower energy costs and strict cost
management
Operating EBITDA increased in the period from April to June 2016 by 2.4%
(like-for-like 2.2%) to EUR 61.9 million (Q2 2015: EUR 60.5 million). The
Operating EBITDA margin rose by 0.8 percentage points to 18.8% (Q1 2015:
18.1%). Currency effects in the second quarter 2016 of EUR -1.6 million
were compensated by the Operating EBITDA contribution of EUR 1.7 million
from the recently acquired businesses.
The effect of lower volumes on Operating EBITDA was moderate during the
second quarter of 2016, average selling prices showed a slightly positive
development. Lower energy costs helped to improve the variable cost base,
in particular in Germany and France. Improvements in fixed costs were
especially realised in geographies with a challenging market environment,
such as Italy and Asia & Africa.
The Net financial result in the second quarter 2016 amounted to EUR -38.3
million. The change of EUR -27.8 million compared to the second quarter
2015 (EUR -10.5 million) was driven by one-time costs related to the
refinancing in June 2016, in particular the full amortisation effect
stemming from transaction cost in relation with the former financing (EUR
-15.0 million) and the close out of the interest rate swaps (EUR -14.3
million).
Applying a consolidated effective tax rate for the Group of 33.7% (Q2 2015:
32.2%), the Net income for the period amounted to EUR -11.0 million for the
first half 2016 (H1 2015: EUR 9.7 million) and to EUR 1.6 million in the
second quarter 2016 (Q2 2015: EUR 17.0 million). Divided by the number of
shares outstanding at 30 June 2016 (39,166,667), the Net income per share
for the second quarter 2016 amounted to EUR 0.04 (Q2 2015: EUR 0.43) and to
EUR -0.28 for the first half 2016 (H1 2015: EUR 0.25).
Successful refinancing further improves attractive cash flow profile
In June 2016 we successfully refinanced and reduced our external debt
including the issuance of EUR 435.0 million Senior Secured Notes with a
coupon of 3.00% per annum and a new Revolving Credit Facility of EUR 200.0
million. The proceeds, together with available cash, were foremost used to
redeem in full the EUR 315.0 million Senior Secured Floating Rate Notes due
2020, to fully repay the Term Loan B of EUR 200.0 million and to pay-down
the amount drawn under the old Revolving Credit Facility (EUR 15.0
million). Thanks to the successful refinancing, we expect that our cash
interest charge was reduced by more than EUR 10 million on an annualised
basis. Based on current management expectations, down-payments of the
currently drawn Revolving Credit Facility during the second half of 2016
will lead to an expected gross deleveraging of approx. EUR 80 million at
year-end.
Consistent bolt-on M&A strategy continued
In May 2016, Braas Monier acquired a concrete tile plant in South Africa,
operating under the brand name of Technicrete. Through the acquisition of
the plant, Coverland South Africa takes an active step to consolidate the
local market and gains additional potential for selling roofing components
to a wider customer base. It also complements its regional footprint,
enabling the company to better service the northern part of South Africa at
lower transport costs.
In July 2016, Braas Monier acquired Ontop B.V., a well-established European
manufacturer of stainless steel flue systems, with end-product applications
ranging from industrial bakery ovens, diesel and gas engines, boilers, fire
places and stoves. Ontop, headquartered in Middelburg, the Netherlands,
serves the European market with one production location each in the
Netherlands and Poland as well as a distribution centre in Germany and a
sales office in France. Following the acquisition of J.A. Plastindustri in
January, we have now successfully executed three bolt-on acquisitions this
year and the seventh within the last 19 months. We believe that our
disciplined M&A strategy supports our ability to generate profitable growth
and to further increase the value of our business.
Launch of new concrete tile with 'Aerlox' technology
Based on our extensive experience, know-how and long-term R&D efforts, we
have achieved an innovation, which we expect to be highly attractive to the
markets: 'Aerlox', a concrete tile, up to 40% lighter than a traditional
one, but with similar technical properties such as high strength, long-term
aesthetics and frost resistance. Roofers strongly benefit from the lower
weight of the tile as they have to carry and move significantly less weight
per day. Working with the new tile with 'Aerlox' technology will thus be
less tiring over the day, enabling the roofer to lay the tiles faster.
Other building materials such as metal and fibre cement are typically used
on houses with a light building and roof structure, thus being unable to
carry the weight of standard tiles. Here the light tile with 'Aerlox'
technology enables the entry into an additional market segment that had
been out of reach for tile makers in the past. We have introduced the new
tile with 'Aerlox' technology in the Danish market in March 2016. Depending
on experience and feedback gathered in this first market, we would consider
further market entries in 2017.
Industry experience in the Board of Directors strengthened
With the election of Emmanuelle Picard and Christopher Davies as Non-
Executive Directors at the Annual General Meeting in May 2016, Braas Monier
further strengthens the industry experience in its Board of Directors.
Emmanuelle Picard serves as General Manager for the Industrial Fabrics
Europe at Adfors, a subsidiary of Saint-Gobain with operations in Spain,
the Netherlands, the Czech Republic and Poland. Christopher Davies was
employed at SIG plc from 1994 to 2013, serving for the last five years as
Group CEO.
Positive outlook for 2016 adjusted
In 2016, we continued to invest in profitable growth. Our product
innovations have the potential to further enrich our product mix and we
continue to actively search for and evaluate further potential M&A targets
to strengthen our operations, consolidate markets and thereby profit
further from a future market recovery. Compared to the beginning of the
year, overall volume growth expectations are dampened by uncertainties
following the UK referendum, a weak development of the Italian market as
well as a slower stabilisation in Malaysia and further strong declines in
China. Those effects are expected to be only partially offset by a better
market development in Germany, Poland and South-Eastern Europe in
particular.
Based on these assumptions, Braas Monier expects like-for-like revenues to
increase by around 1%. Average selling prices are expected to increase
slightly to cover increasing input costs. On top, the first-time inclusion
in full of acquisitions in Malaysia, Italy, Denmark, South Africa and the
Netherlands is expected to generate of around 3% of revenue growth and
approximately 4% in Operating EBITDA growth.
'Our strong components business provides a reliable platform for future
growth and real innovations further enrich our product mix. Together with
effective sales and marketing activities in all our countries, we are
confident to provide value-adding products and services for our customers,
allowing us to grow faster than the markets. Earnings are expected to
benefit from our high operating leverage and our strict cost discipline',
said Pierre-Marie De Leener, CEO and Chairman of the Board of Directors of
Braas Monier Building Group. 'We believe that the solid performance of
Braas Monier gives evidence to our ability to achieve these goals - even in
tough markets.'
Key financial figures /
For the full Interim Financial Statement and further information on the
Group, please visit our website at www.braas-monier.com > Investor
Relations > Financial Statements & Presentations.
About Braas Monier
Braas Monier Building Group is a leading manufacturer and supplier of
pitched roof products in Europe, parts of Asia and South Africa. The Group
covers all steps of the manufacturing process, offering a comprehensive
range of concrete and clay tiles for pitched roofs and is one of the few
suppliers to also manufacture and sell complementary roofing components
designed to cover various functional aspects of pitched roof construction.
The portfolio also includes ceramic and steel chimneys and energy system
solutions. Braas Monier had operations in 36 countries and
118 production facilities and employed 7,707 people as at 30 June 2016. The
Company is headquartered in Luxembourg.
Contact
Achim Schreck
Director Group Communications / Investor Relations
Braas Monier Building Group
Tel: +49 6171 61 28 59
E-mail: [email protected]
Website: www.braas-monier.com
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03.08.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Braas Monier Building Group S.A.
4, rue Lou Hemmer
1748 Senningerberg
Grand Duchy of Luxembourg
Internet: www.braas-monier.com
ISIN: LU1075065190
WKN: BMSA01
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Munich,
Stuttgart, Tradegate Exchange
End of News DGAP News Service
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488821 03.08.2016
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