15 October 2007 – Two of Europe’s major rigid PVC extrusion companies have highlighted the downturn in the construction markets in the US and Germany as the reason behind their poorer than expected financial performance.
Window systems and building profiles manufacturer Deceuninck says the crisis in the US housing market and the residential construction market in Germany had a more severe impact on turnover in its third quarter than had been expected.
Group revenue of €178.3m was down 1.2% compared with the same period of 2006, but turnover in the US slumped 27% in euro terms. In addition to the housing downturn, the US results were hit by the weak dollar and the takeover of Deceuninck’s wood-composite products distributor Alcoa Home Exteriors by Ply Gem Industries.
In Europe, reduced demand in Germany was in sharp contrast to the good results achieved in France, Belgium and Eastern Europe, while there was double digit sales growth in the non-fenestration segment in the UK. Overall, Deceuninck’s quarterly turnover in Europe rose 3%.
Following a slower than expected start to autumn trading, pipe manufacturer Uponor has downgraded the forecast of 10% sales growth for 2007 made after both Q1 and Q2. It now says it will meet its minimum long-term target of 6% growth.
Demand, it says, has been short of the management’s expectations and the levels achieved in 2006 in both Germany and the US. Other markets also have not developed as well as expected.
Uponor still expects its 2007 operating profit to be above the 2006 level. Deceuninck, however, says it will not achieve its 5% sales growth target, although an EBITDA margin of at least 10% is expected.
Source: PRW Newsl., 15.10.2007.
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