Press release aliaxis h12013 en

PRESS RELEASE

Overall good performance supported by recent acquisitions and benefits from cost management Aliaxis S.A. 2013 Half Year Results Brussels, September 18 2013 – Aliaxis, a leading global manufacturer and distributor of plastic fluid handling systems, today released its half year results which highlight an improved performance, which is the result of the geographical diversification of its operations, contribution of its recent acquisitions and its continued focus on cost management. The unaudited interim financial information for the first half of the year 2013 was presented to the Board of Directors on September 13, 2013.

Highlights for the first half of 2013 

Sales revenues amounted to € 1,267 million; an overall increase of 5.9% compared to the first half of last year. On a like-for-like* basis this results in a decrease of 2.4% compared to the first half of 2012.



Operating income (EBIT) of € 114 million, which is 12.6% higher compared to the same period of last year and on a like-for-like* basis an increase of 2.9%.



Current EBIT amounted to € 114 million, in line with last year.



Solid performance in North America and Australasia, with performance in Central and South America suffering due to lower activity levels in construction.



Acquisition of Ashirvad Pipes in India boosted the Asian operations and the Latin American operations benefitted from the full semester contribution of Vinilit.



No improvement of construction activities in Europe. The market environment in Spain and Italy continued to be particularly challenging.

COMMENTS Sales revenues overall increased by 5.9% to € 1,267 million compared to the first half of 2012 (€ 1,197 million). Changes in the scope of consolidation accounted for an increase of 9.8% and exchange rates impacted revenue negatively by 1.5%. Excluding these effects, like-forlike* revenues decreased by 2.4%.

Operating income (EBIT) amounted to € 114 million representing 9.0% of sales, an increase of 12.6% compared to the same period in 2012 (€ 101 million). Excluding the negative impact of exchange rates of 0.7% and the positive impact in changes in scope of 10.4%, the operating income increased by 2.9%.

The operating income in the first half of 2012 was burdened by € 13 million non-recurring items. In the current period no such items were recorded. The current EBIT in the first half of 2013 remained stable at € 114 million.

Net Financial Debt amounted to € 507 million, € 88 million above the level of 30 June 2012.

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In December 2012, the Group acquired full ownership in Vinilit (Chile) and in March 2013 it acquired the assets of Petzetakis (South Africa), as well as a majority stake in Ashirvad Pipes (India). These investments underpin the strategy to increase revenues in growing and emerging markets affected the Group’s financial indebtedness by € 154 million. Compared to December 2012, the seasonal increase in non cash working capital also added to the financial indebtedness.

As a result of the mandatory application of the amendments of IAS 19 related to employee benefits, the non-current liabilities increased by € 43 million in the Group’s 2013 consolidated financial statements.

The increase in the non-controlling interests (€ 46 million in total) reflects the minority stake in Ashirvad Pipes that continues to be owned by the Group’s joint venture partners in India. To account for a put option that was granted to the minority shareholders, the Group recorded a Put option debt.

The Group pursued its investment strategy and allocated additional substantial funds to key projects to strengthen its operations and to boost growth. As a result capital expenditure will substantially exceed depreciation in 2013.

Prior measures taken to address underperforming businesses supported the financial performance. This focus on lifting performance continues.

Europe The European economy continued to lack confidence, public spending did not recover and consumers remained cautious in the first half of 2013. As a result, construction activity in general remained at low levels and even decreased with particularly challenging conditions in Spain and Italy.

In this environment the European Building and Sanitary Division maintained its operating margin due to a continued focus on costs containment and also benefitted from its restructuring efforts in previous periods.

The Utilities and Industry Division, which is more exposed to international markets, managed to keep its top line performance intact but faced margin pressure.

North America Both in the US and Canada the operations continued to deliver a solid performance, and investments to further strengthen these operations have been initiated.

Australasia, Asia and Africa Performance in Australia and New Zealand remained at good levels.

The acquisition of a majority stake in Ashirvad Pipes significantly strengthened the Group’s position in Asia. Further investments in capacity expansion and range extensions have been approved in order to further develop the business.

In South Africa, the re-commissioning of the Petzetakis assets that were acquired in early 2013 should gradually increase revenues and improve margins from 2014 onwards.

Latin America The performance of the region was impacted by lower activity levels in construction, particularly in larger markets such as Mexico and Colombia. The region benefitted from the consolidation of Vinilit (Chile) which was acquired in December 2012.

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OUTLOOK Aliaxis does not expect any significant short term recovery in European markets. The Group will pursue its focus on margin improvement and will continue to address businesses that are performing below standard in Europe and elsewhere. At the same time the Group will continue its strategy to invest and to reinforce its operations through capital expenditure and selected acquisitions, as well as to increase revenues in growing and emerging markets.

SUMMARY FINANCIAL INFORMATION Condensed Interim Consolidated Statement of Comprehensive income

First half

Full year 2012

(€ million)

2013

2012

Inc/(Dec)

Sales

1,267

1,197

70

2,377

160

154

6

300

% of sales

12.6%

12.9%

Current EBIT***

114

114

% of sales

9.0%

9.5%

Operating income (EBIT)

114

101

% of sales

9.0%

8.4%

Profit before income taxes

96

86

10

179

Net profit,

69

61

8

119

3

1

2

2

66

60

6

118

Current EBITDA**

12.6%

-

219 9.2%

13

179 7.5%

attributable to : ■ Non-controlling interests ■ Group equity holders

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First half Full year 2012

Earnings per share

Basic earnings per share (â‚Ź)

Condensed Consolidated statement of financial position (â‚Ź million)

2013

2012

Inc/(Dec)

0.82

0.75

10.1%

30 June

30 June

Inc /

2013

2012

(Dec)

1.45

31 December 2012

Intangible Assets

781

623

158

646

Property, Plant and Equipment

650

601

49

633

Non Current Investments

15

15

-

16

Other Non Current Assets

33

61

(28)

34

1,479

1,300

179

1,329

612

586

26

455

Total

2,091

1,886

205

1,784

Equity (attributable to Group)

1,288

1,397

(109)

1,401

57

11

46

10

1,344

1,407

(63)

1,411

Non Current Liabilities

84

39

45

41

Deferred Tax Liabilities (net)

58 98

21 -

37 98

29 -

507

419

88

303

2,091

1,886

205

1,784

Total Non Current Assets

Non Cash Working Capital

Non-controlling interests Total Equity

Put option Net Financial Debt Total

* Like-for-like being at constant exchange rates and excluding the impact of changes in scope of consolidation ** Current EBITDA being EBITDA before non-recurring items

*** Current EBIT being EBIT before non-recurring items

Contact: Manuel Monard Group Corporate Development Finance Manager Tel. 32-2-775 5050 Fax. 32-2-775 5051 E-mail: aliaxis@aliaxis.com

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