Recovery in demand gaining momentum, forecasted operating result[2] of ? 80-85 million of which ? 46-51 million is expected for H2 2010 (up 34-49% vs. H2 2009)
Net result[2] of ? 50-55 million expected in 2010

 

 

  • Market conditions improving compared with H2 2009 and H1 2010. Recovery in both industry-related cable activities and communication cable activities. European construction markets stable overall, with slowing decline in the Benelux compensated by modest growth in the Scandinavian countries. Pressure on prices has not increased, pressure on margins from higher raw-material prices (polymers) has eased.
  • Volume growth 3.5% in period from 1 July to 31 October 2010; growth gathering pace after +0.9% in Q2 2010 and -2.5% in Q1 2010, driven mainly by stronger demand for high-end special-purpose cables and optical fiber telecommunication cables.
  • EBITDA[2] expected to rise to ? 142-147 million in 2010 (? 138.2 million in 2009).
  • Operating result[2] of ? 80-85 million expected in 2010 compared with ? 75.3 million in 2009. This implies a forecasted result of ? 46-51 million in H2 2010, up 34-49% vs. H2 2009.
  • Result for the year[2] expected to be around ? 50-55 million compared with ? 48.3 million in 2009.
  • Maintaining momentum in cost-reduction programmes: projects already in progress are on track and new programmes have been started. Reduction in cost base of around ? 30 million in 2010 and additional circa ? 10 million in 2011.
  • Operating working capital as a percentage of revenue expected to rise slightly to 14-15% from 13.7% in 2009. Higher working capital due to volume growth, considerably higher copper prices and exchange effects offset by free cash flow. Net debt expected to remain stable relative to year-end 2009 (? 295 million).
  • Unsolicited indicative non-binding proposal by Nexans: after careful consideration the Boards of Draka are of the view that the current proposal is inadequate and have initiated a review of its strategic alternatives, including continuing the stated stand-alone strategy.

 

 

This trading update for 2010 is issued by Draka Holding N.V., one of the world`s leading producers of low-voltage cable, cable for OEMs and communication cable, ahead of the publication of the full-year figures on Tuesday, 15 February 2011 (before start of trading).

 

Commenting on the expected results in 2010, Frank Dorjee, Chairman and CEO of Draka Holding N.V, said: `The cautious recovery in demand that started in the second quarter has continued and gathered pace in the second half of 2010. This is expected to translate into a considerably higher operating result - excluding non-recurring items - in H2 2010 compared with both H2 2009 and H1 2010. With demand picking up, we are deriving extra benefit from the strong reduction in our cost base we have achieved in the past two years and we have embarked on new initiatives that will yield a further reduction in our cost base in 2011. It is also encouraging that price pressure has not intensified and the pressure on margins from higher raw-material prices is easing.
We look forward to 2011 with confidence built on consistent pursuit of our strategy, including new growth initiatives and cost-reduction measures, and the market recovery which is now in evidence.
We remain of the view that the current proposal from Nexans is not in the interests of our stakeholders and are reviewing our alternatives. We are making good progress with this review and will keep all of our stakeholders informed of any significant developments.`

 

[1] All figures are unaudited.
[2] Excluding non-recurring items. Gross non-recurring items in 2010 are expected to be around ? 45 million negative (2009: ? 66.5 million negative).

 

 

Pdf version of the press release:
http://hugin.info/130732/R/1461319/400548.pdf

 

Pdf versie van het persbericht:
http://hugin.info/130732/R/1461319/400549.pdf

 

 

NOTE FOR EDITORS: for more information, please contact:
Draka Holding N.V.:
Michael Bosman - Director Investor Relations      +31 20 568 9805; michael.bosman@draka.com:
mailto:michael.bosman@draka.com

 

 

Cautionary note regarding forward-looking statements

 

This announcement contains forward-looking statements. Forward-looking statements are statements that are not based on historical fact, including statements about our beliefs and expectations. Any statement in this announcement that expresses or implies our intentions, beliefs, expectations or predictions (and the assumptions underlying them) is a forward-looking statement. Such statements are based on plans, estimates and projections as currently available to the management of Draka. Forward-looking statements therefore speak only as of the date they are made and we assume no obligation to publicly update any of them in the light of new information or future events.

 

Forward-looking statements involve inherent risks and uncertainties. A number of significant factors could therefore cause actual future results to differ materially from those expressed or implied in any forward-looking statement. Such factors include but are not limited to conditions on the markets in Europe, the United States and elsewhere from which we derive a substantial portion of our revenue, potential defaults on the part of borrowers or trading counterparties, the implementation of our restructuring programme including the envisaged reduction in headcount and the reliability of our risk management policies, procedures and methods. For more information on these and other factors, please refer to our annual report. The forward-looking statements contained in this announcement are made as of the date hereof and the companies assume no obligation to update any forward-looking statement contained in this announcement.

 

 

2011 Financial calendar (provisional)
Publication of 2010 full-year figures Tuesday 15 February 2011
(before start of trading)
General Meeting of Shareholders, Holiday Inn
Amsterdam		 Monday 8 May 2011
Start at 14.30h
Publication of trading update for the first half of 2011 Wednesday 18 May 2011
(before start of trading)
Publication of 2011 half-year figures Thursday 4 August 2011
(before start of trading)
Publication of trading update for the second half of 2011 Tuesday 15 November 2011
(before start of trading)

 

Company profile

 

Draka Holding N.V. (`Draka`) is the holding company of a number of operating companies that are active worldwide in the development, production and sale of cable and cable systems. Draka`s activities are divided into three groups: Energy & Infrastructure, Industry & Specialty and Communications.

 

Within these three groups, the activities are organised into divisions. Energy & Infrastructure consists of the Europe and Asia-Pacific divisions; Industry & Specialty consists of the Automotive & Aviation, Elevator Products, Cableteq USA, Industrial and Offshore divisions and the Communications Group comprises the Telecom Solutions, Multimedia and Specials, Americas and Optical Fiber divisions.

 

Draka has 68 operating companies in 31 countries throughout Europe, North and South America, Asia and Australia. Worldwide, the Draka companies employ some 9,600 people. Draka Holding N.V.`s head office is in Amsterdam. In 2009, Draka reported revenue of ? 2.0 billion and net income of ? 48.3 million (excluding non-recurring items).

 

Draka Holding N.V. ordinary shares and subordinated convertible bonds are listed on NYSE Euronext

 

Amsterdam. The company is included in the Next150 index and the AMX index (Amsterdam Midkap index). Options on Draka shares are also traded on the NYSE Euronext Amsterdam Derivative Markets.

 

More information on Draka Holding N.V. can be found at www.draka.com:
http://www.draka.com/.

 

 

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This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

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(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Draka Holding NV via Thomson Reuters ONE


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