DECEUNINCK: Operating profit rises by 27% in H1 / Strong business development pushes sales up / Gains across most geographic markets
Belgian PVC window profile manufacturer Deceuninck (Hooglede-Gits; www.deceuninck.com) has posted a 27% year-on-year increase in operating profit (REBITDA) to EUR 32.5m in the first half of 2016. The company said that improved operating performance, efficiency gains and the phase-out of some low-margin products had contributed to the gain. Operating profit in the period benefited from a one-off EUR 3m capital gain related to the divestment of the company’s US decking business. Sales in the period rose by 5.8%, to EUR 330m, driven by strong business development, improved quality and service and capacity investments.
Francis van Eeckhout, Deceuninck CEO, said: “We are pleased with our H1 2016 results, which are in line with our expectations, and the progress we are making with the implementation of our operating plan. We however closely monitor the increased macro-economic uncertainty in some of our key markets.
Sales in western Europe increased by 7.4% to EUR 94.7m in the period, driven by product launches and project income supported by modest market growth. Price increases compensated for higher raw material prices and low margin products are being phased out. In central and eastern Europe sales expressed in euros decreased by 2.6% to EUR 76.4m as the Russian market contracted and the ruble depreciated. The benefits of product launches in the region had been offset by the decision to phase out a low margin product range, the company added.
H1 2016 sales in the Turkey & emerging markets region expressed in euro increased by 10.5% to EUR 103m, driven by strong business development despite the contraction of the Turkish market. This region predominantly serves the latter’s domestic market, which accounts for around 90% of total sales in the region.
Sales in the period at Deceuninck North America expressed in euro increased by 7.2% to EUR 55.9m, thanks to strong business development on the back of improved quality and service, supported by an estimated 4-6% market growth, which is partially offset by the divestment of the decking business in January 2016.