NZX/ASX release 28 October 2011
FY2012 earnings guidance
Nuplex Industries expects FY2012 EBITDAi, excluding the contribution from the acquisition of Bayer’s Viverso announced
today, and Acquos’s Masterbatch operations, announced in September, to be approximately in-line with last year’s EBITDA
of $130.9 million. This forecast is based on the use of average 2011 September quarter foreign exchange rates.
Emery Severin, CEO of Nuplex said volumes are expected to be of a similar level as last year, however it was the recent
strengthening in the New Zealand dollar that was likely to have the biggest negative impact on earnings.
“Our forecast is based on average September quarter exchange rates being maintained throughout the year. Had average
exchange rates remained the same as they were last year, EBITDA would be forecast to increase by approximately 5%-6%.
“Pleasingly, as raw material costs have stabilized, we have seen a continued recovery of the lag caused by material cost
increases in FY2011. This has resulted in gross margins returning to more normal levels for the financial year to date.
“NuLEAP remains on track to deliver its FY2012 target of at least $10 million in incremental benefits. New sales
initiatives are contributing to revenues and volumes, procurement initiatives are improving margins and cost initiatives
are helping to offset inflation.
“As mentioned we expect overall volumes to be flat year on year. In Europe and the US, on the back of strong volume
growth last year, we are forecasting flat trading conditions overall in FY2012, indicating a modest slow down from the
previous year. Recently, month to month trading conditions have been quite volatile as customers have been demonstrating
caution in an uncertain, global economic environment. However the forward order books indicate a return to more stable
trading conditions within the next few months.
“In Asia, we expect modest volume growth as we recover lost market share in Southern China, through our Foshan plant as
well as some growth in Indonesia. We also expect volumes to increase in Vietnam later in the year as we bring new
capacity on line. Our East China plant at Suzhou is expected to continue operating at near capacity, and our Malaysian
plant is expected to operate at capacity as it services both its domestic and regional export markets.
“In Australia and New Zealand economic conditions remain subdued and we expect volumes and sales to be down slightly
year on year for both our Resins and Specialties businesses.
“Combining the performance of our existing operations with the positive earnings contribution from our two recently
announced acquisitions, we expect to deliver approximately 10% year on year EBITDA growth in FY2012.
“Our strategy has been set to pursue medium term earnings growth from a variety of sources including operational
efficiency initiatives such as NuLEAP, targeted research and development activities, organic growth projects and
acquisitions. The benefit of having a number of pathways for growth is that it enables us to generate earnings momentum
in relatively challenging markets,” Mr Severin said.
Ends.