DGAP-News: Braas Monier Building Group S.A. / Key word(s): Interim Report
Braas Monier with positive European volume trend in the third quarter and value-accretive bolt-on acquisitions
- European tile volumes increased Q3 2015 by approx. 11% (like-for-like up approx. 1%)
- Difficult third quarter in Asia with particularly strong volume declines in China
- Q3 2015 revenues of EUR 352.4 million up 2.9% (like-for-like -0.2%) compared to the previous year through 'Top Line Growth' programme
- Operating EBITDA increased in Q3 by 2.0% to EUR 68.8 million (like-for-like -1.5%)
- Strong Free Cash Flow of EUR 60.8 million in Q3 2015 (+21.3% compared to Q3 2014)
- Value-accretive bolt-on acquisitions in 2015 to strengthen our leadership positions in roofing tiles in Spain and Portugal, Italy and in the Asia-Pacific region
- Full year Group revenues expected to grow by 3% to 4%,
'In a challenging environment, we have consequently executed our 'Top Line Growth' programme enabling us to clearly outperform in our two most important markets, Germany and the United Kingdom. In addition, we continued to tapped further growth potential via our bolt-on acquisitions in Spain/Portugal, Malaysia and by acquiring selected assets in Italy', says Pepyn Dinandt, CEO of Braas Monier Building Group.
Uneven and challenging market environment
Q3 2015 with positive volume trends in Europe and growth in the components business
From January to September 2015, revenues reached EUR 938.4 million, EUR 30.7 million or 3.4% more than in the first nine months of 2014 (EUR 907.7 million). Like-for-like revenues in the first nine months were slightly negative (-0.9%).
High operating leverage in Europe masked by declines in Asia
In the first nine months, Operating EBITDA declined by 1.3% to EUR 146.4 million (9M 2014: 148.4 million). On a like-for-like basis, the decline amounted to 5.0%.
Increasing net result for the period
In the third quarter, the net result increased by 2.4% from EUR 23.0 million to EUR 23.5 million and in the first nine months by 17.7% to EUR 33.2 million (9M 2014: EUR 28.2 million). The net result divided by the number of shares outstanding (39,166,667) improved from EUR 0.59 in Q3 2014 to EUR 0.60 in Q3 2015. For the nine months period it grew by EUR 0.13 to EUR 0.85 per share (9M 2014: EUR 0.72 per share).
Strong cash flow profile maintained
Year-to-date, the net cash from operating activities increased by EUR 32.5 million from EUR -4.6 million in 2014 to EUR 27.9 million in 2015.
Equity position strengthened, lower interest expenses expected
Net debt at the end of September 2015 stood at EUR 384.5 million. Through the strong cash flow generation of the Company it was slightly below the level of September 2014 (EUR 387.9 million) despite exceptional cash outs in the last twelve months of EUR 79.2 million. Such exceptional cash outs related to the value-accretive acquisition of Cobert (EUR 27.0 million), the payment of a first dividend (EUR 11.8 million), one-time cash effects resulting from the refinancing and the IPO in 2014 (EUR 8.1 million) and cash-effective legacy provisions (EUR 26.8 million, mainly related to the restructuring in 2012/2013).
The leverage ratio, defined as net debt to Operating EBITDA (LTM), stood at 2.0 times at the end of the September 2015, thus at the same level as one year earlier. The company's Term Loan B (EUR 200 million) as well as its Revolving Credit Facility (EUR 100 million, undrawn as at 30 September 2015) contain ratchets directly related to the leverage ratio, one of which was triggered with effect as of April 2015. Based on the current leverage ratio, the Group is benefitting from a margin step-down of 50 basis points in the Term Loan B and by 75 basis points in the Revolving Credit Facility, accounting for annualised savings on interest expenses of approximately EUR 1 million.
Revenues expected to grow by 3% to 4% in 2015
Management forecasts a moderate growth of 3% to 4% over 2014 revenues (2014: EUR 1,211.3 million) for 2015. Such growth will be mainly driven by the first-time inclusion of Cobert, contributing approx. EUR 34 million, and positive currency effects of a high single-digit to low double-digit million Euro amount. On a like-for-like basis, revenues are expected to fall slightly short of last year's level with lower tile volumes not being fully compensated for by a positive development of average selling prices and components sales. The already positive development of European tile volumes in the first nine months 2015 is expected to further improve in the months of October to December. Sizeable volume reduction for the full year are expected in Asia & Africa, foremost in China but also in Malaysia. The Chimneys & Energy Systems business is excepted to show further improvements in trend over the last months of the year, resulting in an almost flat like-for-like development in 2015 as a whole.
Operating EBITDA expected around previous year's level
Strong cash flow generation
Braas Monier already today achieves a strong cash flow generation and sustainably high EBITDA margins with many key markets still offering significant upside potential. The Group is in very good shape to profit from this future volume growth and the roll-out of additional measures under its 'Top Line Growth' programme, including the execution of further value-accretive bolt-on acquisitions that are currently being evaluated. Braas Monier will continue to use its resources sensibly to create value for its shareholders. Management expects the financial leverage of the Company, defined as net debt to Operating EBITDA to remain below the target level of 2.0 times or below, including bolt-on acquisitions in the fourth quarter on a pro-forma basis, which is also an important criteria outlined in the Company's dividend policy.
Future growth supported by value-accretive M&A
On 3 November 2015 Braas Monier acquired selected assets, most importantly the customer base, of Muto & Tegolaia S.r.L. (Muto), a manufacturer of concrete roof tiles, based with in Cutro in Southern Italy, withdrawing from the roof tiles market. Through the acquisition, Monier Italy takes an active step to consolidate the local market and gains additional potential for selling roofing components to a wider customer base. The total investment for the acquisition amounts to EUR 2.8 million, including the purchase price, the financing of additional working capital needs and transaction costs. Management expects an Operating EBITDA contribution in 2016 of approximately EUR 0.6 million (including synergies). The acquisition is financed from free cash flow.
'While the three transactions differ materially in size, scope, strategic approach, geographic position and product group, they all have in common the clear commitment to increase shareholder value by further strengthening the Group's footprint in future areas of profitable growth', says Pepyn Dinandt, CEO of Braas Monier Building Group.
In the context of further potential bolt-on acquisitions, active discussions are currently being held in a number of countries.
The strong cash flows generated by the operating business should allow Braas Monier to achieve consistent and ambitious growth in the future, 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.
About Braas Monier
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|Company:||Braas Monier Building Group S.A.|
|4, rue Lou Hemmer|
|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|