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- Revenue +5% to EUR 2,025 million
- Operating profit (EBITA) +5% to EUR 219.1 million
- Net profit before amortisation +4% to EUR 152.1 million
- Earnings per share before amortisation +3% to EUR 1.40
- Cash flow from operations +9% to EUR 271.4 million
- Capital expenditure +23% to EUR 103.6 million
- Industrial Services: revenue +3% and good profitability maintained
- Flow Control: revenue +5% and operating profit (EBITA) +8%
in EUR million
2012 2011 Delta
Revenue 2,024.5 1,937.4 5%
Added-value 1,197.1 1,145.9 4%
Added-value margin in % of revenue 59.1 59.1
Operating profit (EBITDA) 296.1 279.4 6%
EBITDA in % of revenue 14.6 14.4
Operating profit (EBITA) 219.1 208.9 5%
EBITA in % of revenue 10.8 10.8
Net profit before amortisation 152.1 145.8 4%
Average number of shares (x million) 108.9 107.5 1%
Earnings per share before amortisation (x EUR 1) 1.40 1.36 3%
Dividend per share (x EUR 1) 0.35 0.34 3%
Total equity as a % of total assets 50.1 44.4
Net debt 541.6 605.6 (11%)
Leverage ratio: Net debt/EBITDA (12 month rolling) 1.8 2.0
Interest cover: EBITDA/Net interest expense (12 month rolling) 14.4 12.9
Net debt / Total equity 0.6 0.7
Cash flow from operations 271.4 250.0 9%
Cash flow (net profit + depreciation + amortisation) 229.1 216.3 6%
Capital expenditure 103.6 84.3 23%
Net working capital 370.0 345.4 7%
Net working capital as a % of revenue 18.3 17.3
Number of employees at end of period (x1) 12,048 12,282
Effective tax rate in % 25.2 21.6
Wim Pelsma, CEO: "In 2012, we realised record revenue of more than EUR 2 billion, an increase of
5% compared to 2011. The operating profit (EBITA) also increased by 5% to EUR 219.1 million with
an EBITA margin of 10.8%. Net profit amounted to EUR 152.1 million, an increase of 4%. This meant
the earnings per share increased by 3% to EUR 1.40. A large number of new projects was commenced
during the year under review and capital expenditure increased by 23% to EUR 103.6 million. The
balance sheet ratios could again be improved.
The good progress was the result of our continued focus on strengthening our marketing and sales
approach, the strong improvement of our product and technology portfolio, and the continued
development of certain market segments. At the same time, we have increased the speed of
innovation and product development, as well as the speed of the implementation of projects to
increase the production efficiency. The mutual cooperation also improved.
At Industrial Services, revenue increased by 3% to EUR 595 million, and the good profitability was
maintained with an operating profit (EBITA) of EUR 79.6 million and an EBITA margin of 13.4%.
These results were achieved thanks to a strong increase in product and technology development,
including a lot of associated engineering activities for new projects. We also offer a combination
of technologies to various major clients on the basis of key account management, with increasing
Despite challenging market conditions, revenue of Flow Control increased by 5% to EUR 1,430
million. The operating profit (EBITA) increased by 8% to EUR 139.5 million and the EBITA margin
amounted to 9.8%. This progress has been made thanks to the increasing marketing and sales focus
on rapidly growing product lines and the intensification of the sales of complete specified
systems. We have also further expanded our positions in the market segments of industry, district
energy, and especially oil & gas.
The company is well equipped for continued profitable growth. There are many strategic, marketing
and sales initiatives in progress, and we continue to pay significant attention to technology and
product development, and continuous improvement of our production efficiency and operating margin.
In addition, in 2013 there will be continued investment in more efficient production, sales force,
engineering capacity and supplementary acquisitions that contribute to strengthening our market
positions. Against this background, we anticipate that 2013 will develop as a good year for the
company, with continued profitable growth.
We look back on a successful 2012. On behalf of the Management Board, I would like to sincerely
thank all of our employees, customers and partners for this achievement. I am fully confident that
we will also be able to present ourselves during the coming year as an innovative, good
profitable, market-driven company that is continuing to improve its performance."
Revenue Revenue amounted to EUR 2,024.5 million (2011: EUR 1,937.4 million), an increase of 5%.
Added-value The added-value (revenue minus raw materials and work subcontracted) amounted to EUR
1,197.1 million, or 59.1% of revenue (2011: EUR 1,145.9 million, or 59.1% of revenue).
Operating profit The operating profit before depreciation and amortisation (EBITDA) increased by
6% to EUR 296.1 million (2011: EUR 279.4 million). The EBITDA margin amounted to 14.6% of revenue
(2011: 14.4%) at Industrial Services 18.6% (2011: 18.6%), and at Flow Control 13.0% (2011:
Depreciation and amortisation amounted to EUR 94.0 million (2011: EUR 84.9 million).
The operating profit after depreciation and before amortisation (EBITA) increased by 5% to EUR
219.1 million (2011: EUR 208.9 million). The EBITA margin amounted to 10.8% of revenue (2011:
10.8%). Industrial Services achieved an EBITA margin of 13.4% (2011: 13.8%), and Flow Control
achieved an EBITA margin of 9.8% (2011: 9.5%).
Net finance cost Net finance cost amounted to EUR 20.2 million (2011: EUR 26.6 million); net
interest cost was EUR 20.5 million (2011: EUR 23.0 million). This decrease was thanks to the
average lower interest rates and lower surcharges of the banks because of the improved leverage
Tax on profits The total tax on profits was EUR 45.9 million (2011: EUR 36.3 million); the
effective tax rate was 25.2% (2011: 21.6%). The relatively low tax rate in 2011 was particularly
the result of (non-recurring) contributions from tax credits from previous years, the use of
offsetting for losses, and decreasing European tax rates.
Net profit Net profit before amortisation amounted to EUR 152.1 million (2011: EUR 145.8
million), an increase of 4%. Earnings per share before amortisation were EUR 1.40 (2011: EUR
1.36), an increase of 3%.
Dividend proposal The number of shares issued at the end of 2012 was 109.4 million (at the end of
2011: 108.1 million). The increase was the result of the stock dividend for 2011. It will be
proposed to the General Meeting that the dividend for 2012 be set at EUR 0.35 in cash per share,
or in shares, according to the shareholder's preference. This means that Aalberts Industries is
continuing its policy to pay approximately 25% of the realised net profit before amortisation as
dividend. This implies an increase of 3% compared to 2011 (EUR 0.34). The stock dividend will be
fixed on 17 May 2013 after close of trading on the basis of the volume-weighted average share
price of all traded shares in Aalberts Industries N.V. as at 13, 14, 15, 16, and 17 May 2013, in
such a way that the value of the dividend in shares is virtually equivalent to the value of the
Capital expenditure and cash flow Capital expenditure amounted to EUR 103.6 million (2011: EUR
84.3 million), of which EUR 56.5 million was at Industrial Services and EUR 47.1 million at Flow
At the end of 2012, net working capital amounted to EUR 370.0 million, 18.3% of revenue (at the
end of 2011: EUR 345.4 million, or 17.3%).
The cash flow from operations increased by 9% to EUR 271.4 million (2011: EUR 250.0 million). The
cash flow (net profit plus depreciation and amortisation) increased by 6% to EUR 229.1 million
(2011: EUR 216.3 million). This clearly indicates the strong cash flow generating ability of
Balance sheet ratios At the end of 2012, total equity amounted to EUR 980.0 million (2011: EUR
858.5 million), 50.1% of the balance sheet total (2011: 44.4%). Solid balance sheet ratios were
thus maintained, which is also evidenced by the development of the three ratios important for the
company: the leverage ratio improved from 2.0 to 1.8; the interest cover ratio went from 12.9 to
14.4, and the gearingwas 0.6 compared to 0.7 in 2011.
Industrial Services At Industrial Services, revenue increased by 3% to EUR 595 million (2011: 579
million). The organic revenue growth amounted to 3.7% negative. The operating profit (EBITA)
amounted to EUR 79.6 million (2011: EUR 79.8 million), or 13.4% of revenue (2011: 13.8%). Capital
expenditure increased by 37% to EUR 56.5 million (2011: EUR 41.2 million).
The markets for Industrial Services showed a mixed picture. In some markets, volume decreased
during the year, while in various other markets sales continued at normal level. The good profit
could especially be achieved due to the continued focus on innovation of new products and
technologies in cooperation with customers. In addition this approach yielded a lot of engineering
work. It also enabled the benefits to be reaped from the considerable investments during recent
years. The expansion of the operations, including in North America, Poland, Slovakia and China,
brought additional growth. The sales and engineering capacity was expanded with dozens of
employees during the year under review. In 2012, several investment projects were started for new
and existing customers in the Netherlands, Germany, France, Scandinavia, the United Kingdom,
Poland, and the United States. In India production was started in the second half of the year. The
establishment in China showed a significant growth with many new products; all the preparations
have been made for the realisation of a second manufacturing location in China in 2013.
The market demand in the semiconductor industry was good in the first half-year, but decreased
somewhat in the second half-year. The flattening demand could partially be offset by the
development of new technologies for a new generation of semiconductor manufacturing machines,
which increased the engineering work. Continuous innovation and intensive joint key account
management provided Industrial Services with ample opportunities in this market. A positive
revenue boost came from the many new customers who have begun to use the high-purity gas
technology from Lamers High Tech Systems, which was acquired in 2011. Industrial Services was also
able to achieve a strong growth in vacuum systems for the semiconductor industry and other
industries. The activities for LED production lines remained at a low level.
The activities focused on the automotive industry continued at a stable, high level. This was
particularly visible in the German market, where Industrial Services has a good market position
and benefits from the strong German exports. For many new models from major car manufacturers,
projects for new products and heat and surface treatment processes have been approved and ordered.
One example of these is the automated surface treatment of turbo parts for certain engine types;
the production has meanwhile been expanded. There were also orders received for production and
surface treatment of the inner front fork of motorcycles. The outer front fork is already
produced. Due to the very high demand for specialised thin chrome treatments, further expansion of
the capacity is being developed. At Galvanotechnik Baum, which was acquired in 2011, various
projects have been initiated and the capacity has been increased to meet the growing demand in
countries including Germany, Poland, Czech Republic and Slovakia. With a view to the market
opportunities and the future growth, the sales facilities in the latter three countries have been
additionally strengthened. In Poland and Slovakia, orders increased for industrial products, and a
new site for surface treatment was opened in the fourth quarter. The activities for the heat
treatment of customer-specific products also developed well in North America, and the capacity was
further increased. The reduced demand from French customers could be partially compensated by many
new product initiatives, such as the development of new types of connectors.
The activities in the turbine and aerospace industry grew strongly, particularly in North America,
France, and the United Kingdom. Investments are planned in these countries for further growth and
the development of complementary technologies. A strong growth was realised in Germany with
aluminium extrusion products for use in aerospace. The activities in surface treatment also did
well, which was the result of the acquisition of new customers, improving the efficiency, and
strengthening of the management resulting from the acquisition of DEC. The capacity in the United
Kingdom was also increased to enable the surface treatment activities to continue growing. The
demand for vacuum welding of components for aircraft engines and gas turbines continued to
increase in North America. This market, for which the production capacity was expanded in 2012,
offers good prospects for further growth, partly on the basis of a joint approach.
A lot of attention has been paid to the development of the market positions in the oil and gas
market. The significant expansion of the sales and engineering capacity led to a sharp increase in
orders and project requests. In addition to the continued improvement of the key account
management, it is mainly the combination of technologies - for example long-hole precision
drilling and heat and surface treatments - that provides Industrial Services with a unique
position in this strongly growing market that yields many new opportunities.
Market demand in machine building also showed a stable, good development. Full benefit was
realised from the strong market position of Industrial Services in Germany. Previous investments
realised returns and provided additional revenue and orders. The increasing number of projects
enabled the capacity to be increased further at several German establishments.
In the metal and electronics market the demand from French customers declined, a situation which
was partly offset by innovative product developments. Various projects are gradually reaching
their completion, and a lot of added value is expected from these activities during the coming
years. In China and Poland, revenue increased and the engineering and sales efforts have been
further expanded. Additional added value was realised as a result of the development of more
complete products through the combination of activities such as engineering, precision stamping,
heat treatment, overmoulding, and assembly.
Flow Control Revenue increased by 5% to EUR 1,430 million (2011: EUR 1,358 million). The organic
revenue growth amounted to 2.1%. The operating profit (EBITA) amounted to EUR 139.5 million (2011:
EUR 129.0 million), an increase of 8% with an EBITA margin of 9.8% of revenue (2011: 9.5%).
Capital expenditure increased by 9% to EUR 47.1 million (2011: EUR 43.1 million).
The markets for Flow Control showed divergent trends. While the market for building installations
in Europe remained unchanged and challenging, there was a visible improvement in North America. In
the markets for climate control, industry, and oil & gas, good growth could be realised. A lot of
attention has been paid to strengthening the market positions: by improving the product portfolio,
by sharpening the management focus on specific market segments, product and brand development, by
joint marketing, through the presentation of and training on the product and system portfolio for
employees, end users, and prescribing bodies, through the specification and tracking of projects,
and by strengthening the key account management. A lot has been invested in marketing support, and
dozens of employees have been recruited in marketing and sales. Many projects to improve
production efficiency and capital expenditure on production automation contributed to further cost
In the market segment building installations in Europe, it was mainly the new build construction
that continued to be difficult. In contrast, the renovation, repair and maintenance market
remained reasonably stable. In Western Europe, there were fewer projects for commercial buildings,
with the exception of Germany. In contrast to a still very weak market in Southern Europe, the
markets in Eastern Europe, North Africa and the Middle East developed well. By focusing on
fast-growing product lines for metal and plastic piping systems with associated regulator valves
for a safe, easy to use, and swift system installation, good growth could be realised. Much
attention was given to training installers to stimulate the use of fast growing product lines.
Also the market for products and systems for specific sub-segments, such as renovation packages,
underfloor heating, piping systems in metal and plastic for sprinkler systems, flexible adapter
connections of composite materials, and gas pressure regulators for the utilities market, showed a
In the market segment building installations inNorth America, there was increasing benefit from
the joint marketing and sales approach of a complete portfolio for each market segment.
Consequently, and by offering an improved portfolio per market segment combined with associated
regulator valves, growth was realised. The number of new houses, building applications, and
renovations accompanying the increasing sales of houses increased gradually during the year. The
number of projects in the commercial building sector declined somewhat. By the improved portfolio
also in this segment, good progress could be recorded. There was growth in the retail activities,
particularly in the sale of plastic and metal regulator valves. The joint activities in the
irrigation sector had a successful year. In different locations investments were made in improving
the efficiency of production and assembly.
In the climate control market segment, efforts were concentrated on the supplying of complete
energy-efficient systems for heating and cooling in residential and commercial buildings. There is
an ever-increasing demand for the supply of a combined system of various customer-specific boiler
pump groups with associated controls, and valves that regulate the (hot) water flow in buildings,
in combination with thermostatic valves and underfloor heating. The end user receives a complete
energy-efficient system which delivers optimum building comfort. Where possible, this is offered
in combination with metal and plastic piping systems with corresponding regulator valves. The
marketing and sales attention, training and education have been strengthened and focused on the
organisations that specify the projects. The product development of additional electronic
applications for (hot) water measurement systems and the control of complete (sub) systems has
increased significantly. The number of electrical specialists, measurement system specialists and
associated software specialists has been greatly expanded during the year under review. There were
very good sales developments in Eastern Europe. The first successful projects in Asia were also
The position in the European, North American and Asian industry markets has been additionally
strengthened. The sale of regulator valves to sub-segments such as power stations, the pulp and
paper industry, (petro)chemical industry and the food industry showed an upward trend, again
partly as a result of improving and expanding the product portfolio and the sharpened focus on
marketing and sales. The favourable market development in North America and the combined offering
of industrial plastic connection systems with corresponding regulator valves yielded growth
acceleration. The sales team in this area has been further expanded, as has the production
capacity for the larger steel and stainless steel regulator valves. The market for high-pressure
regulator valves for the automotive, technical gas, and medical industries also developed well,
with a considerable increase in orders. The district energy activities also experienced a good
year. This was mainly thanks to the sharpened management focus and the greatly improved portfolio
of recent years: larger diameters, expansion of the system offering for so-called heating
sub-stations, the complete offering of underground regulator valves, new products for
higher-pressure applications, and a competitive offering of regulator valves of smaller
dimensions. Also, the sales and project specification organisation was expanded in countries
including Germany, Russia, Kazakhstan, Ukraine, Poland and Romania. Good growth was realised in
these countries. The beer and soft drinks market continued to show a strong development, partly as
a result of the joint marketing and sales approach, not only in North America and Europe, but also
Substantial growth was able to be realised in the oil and gas market. This was mainly the result
of the expansion of the portfolio of regulator valves for larger dimensions with higher pressures
and lower temperatures. The business progress was also favourably influenced by the business unit
organisation set up in 2012 with new management, and the strengthening of the sales efforts in
countries including Poland, Ukraine, Russia, Turkmenistan, Kazakhstan, and Azerbaijan. To meet the
rising demand, the production capacity has been further increased in Poland and Russia. Plans are
in preparation to expand the marketing and sales activities in these countries. A joint approach
to the strongly growing market for oil and gas in North America is also being developed. BSM
Valves, acquired in January 2013, will contribute to the strengthening of the market position,
especially in the area of high-quality regulator valves made of customer specific materials that
can be rapidly delivered worldwide. In particular, the expertise in engineering and materials
science can be used elsewhere within the company for the production of larger ranges for other
segments in this market.
Organisation and Personnel
The average number of employees grew from 12,246 to 12,399. At the 2012 year-end, the number of
employees was 12,048 (2011: 12,282). This decrease was mainly due to the improvement of production
After achieving record revenue and profit in 2012, Aalberts Industries will also in 2013 continue
strengthening the technology and product portfolio, plus the marketing and sales force, expand the
engineering capacity, increase the production efficiency, and widen the position in specific
The management is sharply focused on achieving the many plans for profitable growth and higher
operational margins, complemented by acquisitions that add value and strengthen the market
positions, while making the best possible use of the solid balance sheet ratios.
The expectation is that this will enable revenue, profit and capital expenditure to further
increase in 2013 - barring unforeseen circumstances.
For more information Wim Pelsma / Jan Aalberts / John Eijgendaal
Phone + 31 (0)343 56 50 80
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