Braas Monier Building Group S.A. / Key word(s): Preliminary Results
After a successful year 2014, BRAAS MONIER with a strong focus on innovation and above-market growth against the backdrop of a more positive 2015 market environment
- Excellent operating performance 2014
- Significant increase in Operating EBITDA by 23.3% to EUR 195.4 million
- Strong EBITDA margin improvement from 13.0% to 16.1%
- Positive Net Profit of EUR 39.8 million, an increase of more than EUR 100 million
- Adjusted Free Cash Flow of EUR 89.0 million before one-time effects of EUR 69.4 million
- Net debt to Operating EBITDA ratio continues to decline to 1.7x (prior year: 2.8x)
- Dividend to be initiated at EUR 0.30 per share, underpinned by solid operational and financial performance
- Course set for healthy growth in 2015
- Overall positive market development expected
- 'Top Line Growth' programme continues to aim for above-market growth and build on the successes of the past year
- First-time inclusion of value-accretive acquisition in Spain and Portugal, validating our strategy to make bolt-on acquisitions, rounding out and strengthening our portfolio, especially in markets where above average growth is expected
- Programme on process excellence launched to support high operational leverage, which will drive a substantial improvement in profitability once markets recover
'For many reasons, 2014 has been a remarkable year for Braas Monier. We have shown an outstanding operating performance, significantly improved our financial structure on the debt as well as on the equity side and, what is more, we have set the course for further above-market growth in the future, by continuing to execute successfully our Top Line Growth programme. The acquisition of Cobert and the promising product innovation 'WrapTec' are good examples that we continue to deliver on our strategic milestones,' Pepyn Dinandt, CEO of Braas Monier Building Group S.A. summarised.
With its unique systems approach, Braas Monier has outgrown many of its key markets in 2014. Lean organisational structures and an ongoing focus on improving efficiencies across the whole organisation have enabled the Group to increase its Operating EBITDA by almost one quarter despite only flat revenues. 'We more than achieved our goal of increasing Operating EBITDA by 20% on the back of stable revenues. On the basis of our strong Cash Flow generation of EUR 89 million, we reduced net debt more rapidly than anticipated, even when including the acquisition of Cobert on a pro-forma basis, which has been financed with internal cash flow. Furthermore, we increased net income by more than EUR 100 million and delivered a positive result of close to EUR 40 million, equalling approximately EUR 1.02 per share . This operating and financial performance enables Braas Monier to propose a substantial dividend, which is the first in its history,' Pepyn Dinandt adds.
Through the Group-wide 'Top Line Growth' programme, the management is confident that it will continue to realise profitable, above-market growth in the coming years, based on strong customer focused sales and marketing initiatives, value-adding services, the development of innovative products and solutions, such as the recently launched 'WrapTec' and further value-accretive bolt-on acquisitions. In addition, a multi-year programme has been launched to systematically enhance the Group's internal processes, including administrative, sales support, in-house logistics and production processes. 'It is essential to look forward and systematically exploit Braas Monier's capabilities to maximise the opportunities which inevitably arise in this ever-changing and dynamic environment,' Pepyn Dinandt emphasised the Group's on-going efforts to achieve above-market growth complemented by a culture of strict cost management, continuous profit improvement and a clear focus of increasing cash generation over time.
Full year revenues on last year's level
EBITDA improvement of more than 20%
Positive net profit
Positive Free Cash Flow
Equity position strengthened, financial flexibility increased
Dividend to initiated at EUR 0.30 per share
All operating segments with strong earnings growth
2015 volumes in the pitched roof markets expected to improve over 2014
For 2015, Braas Monier expects further strong growth for the UK and moderate growth in other European countries, such as Spain and Portugal, the Netherlands, Poland, Hungary and Turkey. A stable development is anticipated for Germany, Austria and also Italy, where the market should have reached its trough. France is expected to further decline, albeit at a much lower rate than in 2014, before reaching its low point in 2015. The Russian market, small for Braas Monier, will most likely show a pronounced contraction. In the emerging markets, growth is foreseen especially in Indonesia and South Africa. The components business is expected to show a good improvement in performance supported by rising national and international building standards, especially in regards to energy efficiency and safety. With regard to the Chimney & Energy Systems business, expectations are for a similar development to the roofing business in the respective markets.
Braas Monier will continue to strive for above-market growth by rolling out further initiatives under its 'Top Line Growth' programme to existing and new countries. The Company expects positive effects in the components business from a number of new innovations such as 'WrapTec'. The relevant European market (HVAC claddings and other sealing applications) we estimate at a minimum of EUR 300 million. After the product launch in January 2015 in the pilot market Denmark, first sizeable revenue and EBITDA contributions of 'WrapTec' are expected from 2016.
Through the takeover of Spanish and Portuguese market leader Cobert, Braas Monier has entered new growth markets which will generate additional revenues and earnings. The transaction was closed in January 2015. For the current fiscal year, management expects the Iberian business to generate revenues of approximately EUR 38 million and contribute approximately EUR 5 million to EBITDA (including synergies). Medium-term, in a normalised environment and including synergies, particularly related to the components business, the Group expects this acquisition to generate additional potential of at least some EUR 50 million in revenues and around EUR 10 million in EBITDA (the enterprise value at acquisition was EUR 29.5 million). Management views Braas Monier as being well-positioned for further opportunistic bolt-on acquisitions. The opening of a second plant in India at the end of September 2014 will support organic growth in 2015. Further new openings in Asia are planned for the coming years to support the Company's growth in these large developing markets.
Based on these assumptions, Braas Monier expects revenues to grow by a mid-single-digit percentage figure, driven by growth in volumes and the first time inclusion of Cobert. Average selling price increases are expected to at least offset variable cost inflation. Currency effects will possibly have a marginal positive effect on revenues.
From a cost perspective, management expects slight increases in input costs (raw materials and wage inflation). The currently low energy prices might have the potential to ease some variable cost inflation if they were to stay at these levels throughout the year. Revenue growth together with an onging focus on strict cost control at all levels will further drive growth in the Company's profits.
Sustainable Capex is expected to be at a level of around EUR 62 million. In addition, approximately EUR 8 million (net) will be invested in future growth projects in 2015.
The exceptional cash flows generated by the operating business will continue to allow the Group to achieve consistent and ambitious growth, both organically and through acquisitions, with an unerring focus on return on invested capital while being ever mindful of the Group's net debt ratio and its dividend policy.
For the full Trading Statement and other information on the Group, see the investor relations section on our website www.braas-monier.com.
Braas Monier Building Group shares were included in the SDAX, the Index for Small Caps of the Deutsche Börse AG, with effect from 22 September 2014.
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|Company:||Braas Monier Building Group S.A.|
|5, rue Guillaume Kroll|
|Grand Duchy of Luxembourg|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange|
|End of News||DGAP News-Service|