VKR Holding – acceptable profit level despite crisis in the building material sector
In 2011, VKR Holding increased its revenue by just below 5% primarily driven by acquisitions. The operating profit (EBITA) amounted to DKK 1.8 billion (2010: DKK 2.2 billion). Return on financial investments was affected by stock market developments in 2011 and amounted to DKK -8 million (2010: DKK +356 million). The year was characterised by adjustments as well as significant costs in preparation for launch of new products in 2012.
As anticipated, continued macroeconomic uncertainty was experienced in 2011, generally leading to lower activity level within the building industry across most of Europe and North America, the main markets for VKR Holding's business areas.
• Net revenue totalled DKK 17.6 billion
• The operating margin (EBITA%) was 10.2%
• Return on assets was slightly above 20%
• Cash flow from operating activities totalled DKK 2.5 billion
• Net result after taxes was DKK 1.0 billion (2010: DKK 1.8 billion)
• Dividend for the shareholders was DKK 1.0 billion, unchanged from 2010
Roof windows and skylights (VELUX) had a year influenced by the development of a new product platform but developed as planned, whereas developments in construction, primarily new-build, have caused difficulties for Vertical windows, both in Northern Europe (DOVISTA) and in North America. Thermal solar energy (SolarCAP) has undergone a strategic restructuring process which is nearly completed. The business area Ventilation & indoor climate is reporting sound growth.
Management summarises that results were achieved under difficult market conditions and were affected by developments in the financial markets, but that the overall result is considered less than satisfactory compared to plans. In recent years, major adjustments have been made in the production entities, and at the end of 2011 the workforce in the holding company was halved. The adjustment is complete and the final stage in the restructuring process has been changes to the boards to avoid dual roles and to further intensify focus. The changes in the board composition have been carried out at the recently held annual general meetings. The chairmen of the boards of both VKR Holding and the business areas remain unchanged. New members of the board of VKR Holding A/S are Ms. Anne Broeng, Group director and CFO, and Mr. Kristian Stubkjær professor and head of department. Ms. Lykke Friis, former minister and member of the Danish Parliament, has been elected new member of the board of VELUX A/S.
Expectations are that 2012 will be another year with substantial challenges and great uncertainty in the construction sector. All business areas have prepared plans for handling different scenarios. Based on current market prospects, the result is expected to be in line with or slightly improved compared to 2011, but will be influenced by financial market developments. At the beginning of 2012, developments have been positive and are favoured by a relatively mild winter.
ABOUT VKR HOLDING
VKR Holding is a holding and investment company owning companies within four business areas. VKR Holding's objective as a financial investor is to create value through investments in and ownership of companies bringing daylight, fresh air and a better environment into people's everyday lives. VKR Holding owns companies offering solutions such as roof windows, vertical windows, thermal solar energy as well as ventilation & indoor climate and employing a total of approx. 15,000 employees in more than 40 countries. VKR Holding is privately owned by the founder family and the VILLUM FOUNDATION, which is the main shareholder.
Mr. Jan Lundsgaard Jensen, CEO, VKR Holding A/S
Contact person: Ms. Astrid Bohn Bosworth, Executive Secretariat, +45 39 57 05 43 www.vkr-holding.com