DGAP-News: Braas Monier Building Group S.A. / Key word(s): Preliminary Results
Braas Monier with revenue and earnings growth driven by increasing European tile volumes and value-accretive M&A
- Strong operating performance 2015
- Operating EBITDA, net income and ROIC increased for the third consecutive year
- Operating Cash Flow almost doubled to EUR 121.9 million (2014: EUR 65.4 million)
- Pro-forma net leverage of 1.7 times (Net debt / Operating EBITDA) well within the leverage target of 2.0 times or below
- Proposed dividend to increase by 33% to EUR 0.40 per share, underpinned by solid operational and financial performance
- Course set for profitable growth in 2016
- Overall improving market development expected, based on positive lead indicators for European new build and renovation business
- 'Top Line Growth' programme continues to aim for above-market growth and builds on the successes of the past years
- The Company will continue to evaluate further bolt-on acquisitions, especially in markets where above average growth is expected in the short- to medium-term
Braas Monier has achieved a further significant improvement of its profitability in 2015. For the third consecutive year, the Company increased Operating EBITDA, net income and return on invested capital (ROIC), despite a challenging market development in Asia and uneven developments in the European countries. The strong performance was driven by further recovery in market share in almost all major European markets, value-accretive bolt-on acquisitions, strict management of fixed costs, lower interest expenses and financial discipline.
'Based on the remarkable efforts of our 7,735 employees around the globe, we have again generated strong free cash flows in 2015 and used those proceeds to further strengthen our daily operations and to invest in future growth', Pierre-Marie De Leener, CEO and Chairman of the Board of Braas Monier Building Group summarised. 'Organic growth projects included real product innovation such as the new tile with 'Aerlox' technology and 'WrapTec' which provide additional revenue and earnings potential from 2016 and 2017 on. With our bolt-on acquisitions, we laid another foundation for profitable future growth, enabling us to further increase the value of our Company. We have continued to deliver on our strategic milestones to achieve above-market growth together with ensuring a high operating leverage in recovering markets.'
Braas Monier with clear outperformance in uneven markets
Full year revenues grew by 4%
Operating EBITDA ahead of previous year's level
Net Income strongly increased by 39%
Operating Cash Flow almost doubled
Net leverage well within stated target range, equity position strengthened
Dividend to rise by 33% to EUR 0.40 per share
Operating segments with a mixed development in 2015
On the back of dynamic growth in the UK and the Netherlands, Western Europe achieved a strong revenue increase of 5.5%, which is also reflected in the above-average earnings increase. The Operating EBITDA grew by 11.7% with an EBITDA margin of 15.1% (+90 basis points compared to 2014).
Revenue development in Germany was slightly positive while higher growth rates were achieved in Poland and parts of Scandinavia. This underlying growth was sufficient to compensate for strongly negative exchange rate effects, particularly stemming from the depreciation of the Russian Rouble. Overall, revenues in the Central, Northern & Eastern Europe increased by 0.5% on a reported basis and by 1.9% like-for-like, i.e. excluding currency effects. On a like-for-like basis Operating EBITDA increased by 0.8%. Including changes in the foreign exchange rates, the reported Operating EBITDA of EUR 72.2 million was in line with previous year.
Revenues in Southern Europe grew by 16.8%, driven by the first-time inclusion of Cobert. Operating EBITDA increased by EUR 2.9 million or 9.2% to EUR 36.8 million. Cobert contributed EUR 4.2 million to this improvement. Due to the challenging economic situation in Italy, the like-for-like development was less favourable with -1.7% in revenues and -2.9% in Operating EBITDA.
In Asia & Africa, negative market developments in Malaysia and China in particular, led to strong volume reductions and a decline in revenues of 3.9%. The negative volume effect was also visible in Operating EBITDA which fell by 11.6% in 2015.
At Chimneys & Energy Systems, with its geographical focus on Central and Eastern Europe, revenues fell 1.5% short of the previous year's level. Currency movements have not materially impacted the operating development. Operating EBITDA declined likewise by 7.1%. Business performance improved towards the end of the year with a broadly stable revenue and earnings development in the fourth quarter.
Revenues in Central Products & Services, which mainly resulted from components centrally produced and sold to other segments, were down 1.2% in 2015 . As this segment only includes part of the components business while the majority of components sales were accounted for in the other reporting segments, these numbers did not fully reflect the overall positive development of the components business which, on Group level, grew by 1.7% in the business year under review. The KPI for European Components, which measures the amount of component revenues (excluding the components-only brand Klöber) per square metre roofing tiles sold, increased on a comparable basis in 2015 from EUR 2.37 per square metre by 3.0% to EUR 2.44 per square metre. The positive Operating EBITDA contribution of the components business within this reporting segment was not sufficient to fully compensate for holding and R&D costs that were also accounted for in this segment. The Operating EBITDA reduced by EUR 2.2 million to EUR -5.2 million in 2015.
Further volume growth in 2016 expected on the basis of positive lead indicators in Europe
Lead indicators for the European new build and renovation business, such as building permits or consumer confidence, are generally positive for the majority of countries. Research institutes expect correspondingly the construction activity in Europe to further pick up in the current business year. For Asia, the expectations are less positive, particularly in regards to the Chinese market.
Braas Monier is positive overall with regard to the residential market development in 2016 for its businesses and expects volume growth in the key markets it is active in, barring any extraneous events driven by major geopolitical instability.
Further market growth is expected for the UK and a number of other European countries, such as Spain, the Netherlands, Poland and selected south-eastern European markets. The German market is expected to be stable with positive momentum on the new build side dampened by a less favourable development of the renovation market. Based on positive lead indicators, the French market is expected to return to slight growth during 2016 and the Italian market should at least stabilise. The Chinese market will most likely show a further contraction with Malaysia stabilising. The components business is expected to show an 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. Management is confident to achieve this goal in the coming years through the Group-wide 'Top Line Growth' programme, focussing on customer oriented sales and marketing initiatives, value-adding services, the development of innovative products and solutions, such as 'WrapTec' and the recently launched tile with 'Aerlox' technology, and further opportunistic bolt-on acquisitions.
'In 2016, we will continue 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,' explains Pierre-Marie De Leener.
Based on these assumptions, Braas Monier expects like-for-like revenues to increase by 2% to 3%, driven by growth in European tile volumes. 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, Denmark and Italy is expected to provide another 2% to 3% of revenue growth and approximately
From a cost perspective, management expects slight increases in input costs (raw materials and wage inflation). The currently low energy prices should have the potential to ease some variable cost inflation if they were to stay at these levels throughout the year. Average selling price increases together with efficiency improvements, mainly in the production area, are expected to offset variable and fixed cost inflation. Revenue growth together with the high operating leverage of Braas Monier and an on going 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 65 million, including capex in acquired companies. In addition, approximately EUR 5 million will be invested in future growth projects in 2016.
The strong 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 more information, please visit our website at www.braas-monier.com > Investor Relations > Preliminary Results 2015.
About Braas Monier
|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|