You know me, I’m a bit of a business nerd. So when a company sends me a their trading update, I’m always happy to publish it on here and give it a bit of a going over. #nerd
This time round it’s Deceuninck and they have announced their first half year trading results. Not a bad first 6 months at all.
Here’s the release in full direct from Deceuninck:
Deceuninck Group reports EBITDA growth up 10%
Deceuninck, one of the top three PVC-U and composite systems companies worldwide reports a strong start to 2018.
Results for H1 2018 show group sales grew 0.8% to €341.5 million, with adjusted EBITDA growth up 10.4%. Growth is driven by recent investments and strong business development in the United States and Emerging Markets.
Deceuninck CEO Francis Van Eeckhout comments: “We are in general pleased with the progress we made in the first half of 2018. Recent investments are paying off and our innovations are well received by the market. We continue to work on further reducing the ecological footprint of our products.”
Rob McGlennon, Deceuninck UK MD adds: “These are very promising results which show a good start to 2018. We’re very pleased with the UK’s strong performance. In July 2018 Deceuninck UK recorded sales 27% up on July 2017, with year to date sales up 13% on the same period last year.
“Our success comes from giving customers the tools to grow with the right products, service and support. In a market that’s 5-10% down, Deceuninck customers are flying high with our unbeatable 26 colourways from stock and innovative products like the award-winning Heritage Flush Sash and Slider24+ patio door. Commercial is also growing exceptionally strongly.”
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization and is a metric used to evaluate a company’s operating performance.
Not too shabby. The UK has performed very well within the group, which is a clear sign that there is still plenty of potential in the UK market, and that others might well be losing some market share.
Here’s my quick take on it.
0.8% growth across the group is OK. It won’t set the world alight, but growth is growth. You have to look deeper at the figures to see where the diamonds are in this report, and the UK is one of them. 27% growth in the UK market is electric. Figures to be proud of. With Brexit on the horizon it would have been easy for any company who might have posted lesser figures that leaving the political union was causing a drag on business. This is not the case for Deceuninck in the UK who have steamed the first half of this year.
EBITDA growth of over 10% is also a very good showing. We all know that prices of our goods in the supply chain are in a highly fluctuating state right now, so to post such a strong figure in this column is good going. Proof that their investments are starting to pay off.
There is a note of caution however. The statement says that some of the growth has come from emerging markets. When we say emerging markets, these are economies around the world that we would know as developing countries, not first world countries. So places like South Africa, Turkey, Russia, Saudi Arabia etc would be classed as emerging markets.
Back to my nerdy-ness again for a moment. For those that follow such things, emerging markets have been battered and battered hard in the past couple of months. Venezuela is in utter crisis, so much so they had to invent a new currency. Argentina is facing yet another economic meltdown and needs the IMF to keep them afloat. Turkey is in the midst of a currency crisis that threatens to bring down the whole economy. The South African rand is on a steep decline and the country is now in recession. The Indian Rupee is at all time lows against the Dollar. Indonesia’s Rupiah is struggling too. These are just a handful of countries that are facing major and systemic problems domestically, that is causing huge contagion concerns around the world. Emerging market indexes are now in bear market territory (where markets lose 20% or more of their value from their highs).
So growth in H2 for Deceuninck in emerging markets might be very stunted in comparison to H1. I am sure they are already on top of this and will be looking for new ventures and alternatives to keep the growth machine going.
All in all, a very good H1 and good signs that the UK market still has plenty of life in it yet, Brexit or not Brexit.
Founded in 1937, Deceuninck is one of the world’s major PVC-U window and door systems companies, and a leading supplier of roofline, cladding and decking made with its patented Twinson, an extremely durable, low-maintenance composite decking material. The company also has an aluminium window and door system, Decalu, which is sold in its Benelux market. Deceuninck has been established for over 30 years in the UK, with production, distribution and head office in Calne, Wiltshire. It is in the top three in most major world markets, and is a leader in innovation, sustainability, colour and design.
(Provided by the company)
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