Zwolle, 29 August 2008 – Wavin N.V., leading supplier of plastic pipe systems and solutions in Europe, today announces its First Half Year 2008 results:
Financial highlights H1 2008
. Revenue increased 1% to EUR 833.8 million (H1 2007: EUR 824.4 million)
. Organic revenue at constant currency decreased 3%
. Ebitda(1) EUR 91.9 million (H1 2007: 107.3 million)
. Ebitda margin 11.0%, compared to 13.0% in very strong H1 2007
. Restructuring charge of EUR 9.1 million taken for UK/Ireland
. Net profit EUR 24.8 million (H1 2007: EUR 44.5 million)
. Interim dividend EUR 0.12 per share

Operational highlights
. Market conditions in particularly UK/Ireland very difficult
. Varying picture in other Western European markets
. Continued growth in emerging markets of Europe, which account for around a quarter of total revenue
. Workforce reduction of approx. 300 FTE’s (4% of total) in ongoing operations compared to same period 2007
. Restructuring measures in Ireland and UK on track, delivering annual savings of EUR 6 million from 2009
. Recently acquired Pilsa Plastic (Turkey) performs ahead of expectations
High revenue growth in segments Water Management (15%), Hot & Cold (11%) and Cable Ducting (20%)

Philip Houben, Wavin CEO:”The construction markets in Europe have weakened significantly in the first half of 2008, compared to the very favourable conditions in the same period last year. The impact of the credit crunch on building activities is apparent throughout Europe and is affecting us severely in the UK/Ireland region. We have taken immediate action to deal with these negative market developments. The announced restructuring measures in the UK and Ireland are on track and will deliver a structural cost reduction of EUR 6 million in the region. At the same time, we have reduced our workforce on a Group wide level by 300 FTE’s. Our latest acquisition, Pilsa Plastic in Turkey, is performing well and has further increased the share of higher growth markets in our portfolio. Around a quarter of our sales now comes from emerging economies in Europe.”

Revenue
In the first half year total revenue grew by 1.1% to EUR 833.8 million. Organic revenue at constant currencies decreased by 2.9%. Acquisitions less divestments contributed EUR 45.8 million or 5.5%. Exchange rate differences had a negative impact of 1.5%. All regions, except UK/Ireland, delivered revenue improvement.

In Civils & Infrastructure (below-ground pipe systems and solutions) revenue rose marginally with 0.3% to EUR 496.8 million. Continued growth in Water Management and Cable Ducting was partly offset by a decline in Foul Water systems as a result of negative housing developments in UK, Ireland and to a lesser extent Denmark.
In Building & Installation (above-ground pipe systems and solutions) revenue grew by 4.9% to EUR 325.4 million.
Growth in the important Hot & Cold segment was 11%, supported by penetration in emerging markets.

Ebitda and Ebitda margin
Ebitda in H1 2008 decreased by EUR 15.4 million or 14.4% to EUR 91.9 million. The impact of currency translation losses on Ebitda was approximately EUR 1.2 million.
Higher costs for raw material, energy and transportation as well as labour, could not be fully offset by volume growth and price increases. As a percentage of revenue, Ebitda amounted to 11.0%, against 13.0% in the first half of 2007.
The drop in margin was especially felt in the regions UK/Ireland, Nordic Europe and Central and Eastern Europe. In the UK/Ireland region significantly lower volumes could only partly be compensated by cost reductions whilst Nordic Europe was affected by the slowdown in Denmark. The CEE region margin decrease was mainly a result of pressure from dollar-denominated competition and incidental charges.

Non-recurring items in operating result
In response to the sharp sales decline in the UK/Ireland region, a restructuring programme was immediately undertaken. This resulted in a non-recurring charge of EUR 9.1 million and will bring cost savings of EUR 6 million annually from 2009.

Financing costs and tax
Financing costs amounted to EUR 20.0 million versus EUR 17.2 million in the same period last year. This increase was a result of additional net debt for acquisitions as well as foreign exchange losses. In line with the lower operating profit, income tax expense decreased to EUR 9.2 million (H1 2007: EUR 11.7 million). The effective tax rate increased from 20.7% to 27.1% mainly because last year’s results included substantial deferred tax rate benefits. Additionally, the H1 2008 geographical spread of results was less favourable from a tax perspective.

Net profit
The lower operational performance, higher financing costs and increased restructuring charges resulted in a net profit in the first half year of EUR 24.8 million, compared to EUR 44.5 million in H1 2007, a decline of 44%.
On a recurring base, net profit amounted to EUR 31.8 million, a decrease of 32%.
The number of outstanding shares in H1 2008 was 79.5 million and the earnings per share came to EUR 0.30 (EUR 0.39 on a recurring basis).

Cash flow
Wavin generates most of its cash flow in the second half of the year. The seasonal peak of working capital requirement was in line with the previous year. Cash flow from operating activities amounted to negative EUR 4.7 million in H1 2008 compared to a cash inflow of EUR 10.5 million in H1 2007. Lower operating results explain this difference.
Net cash used in investing activities amounted to EUR 74.1 million. This includes acquisitions of EUR 47.0 million and capital expenditure, less disposal of assets, of EUR 29.6 million (3.6% of revenue).
Dividend cash out amounted to EUR 9.9 million, out of total declared dividend of EUR 18.8 million.

Net debt
Due to the seasonal nature of the activities and a sizeable acquisition , net debt at the end of the first half year rose to EUR 681.4 million (EUR 654.2 million per 30 June 2007, EUR 542.4 million per 31 Dec 2007).

The company stayed well within the covenants of its EUR 750 million financing facility. The leverage ratio was 3.2 per 30 June 2008 compared to a level of just below 3.0 at the end of H1 2007. The interest coverage at 30 June was 6.2.
The main finance facility does not expire until October 2011. The interest rate risk on EUR 447 million is hedged at an average interest rate of 4.1% and with an average duration of 2.7 years.

Workforce reduction
Excluding the acquisition of Pilsa, Wavin’s workforce was reduced by approx 300 FTE’s (4.0 % of total workforce) compared to 30 June 2007. In light of the changed market circumstances, temporary labour employment has been scaled back substantially. The announced restructuring in the UK/Ireland region (affecting over 100 employees in total) and other efficiency measures will lead to further reductions during the remainder of the year.

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Dividend
The H1 2008 profit attributable to equity holders of Wavin N.V. amounted to EUR 24.1 million. Reported earnings per share in H1 2008 were EUR 0.30. In accordance with Wavin’s dividend policy, 40% of the net profit in H1 will be paid as interim dividend, leading to an interim dividend of EUR 0.12 per share. This dividend will be paid out either fully in cash or fully in shares, at the discretion of each individual shareholder.
As per 1 September 2008, the ordinary shares will be registered ex-dividend. The interim dividend payment will take place on 26 September 2008.

Outlook
Management is increasingly cautious on its outlook for the rest of 2008. We foresee a further deterioration of the construction markets in the UK and Ireland. On the basis of current indicators we also expect other Western European markets to weaken. At the same time, we remain positive about the emerging markets of Europe, where the company has an increasing presence.

Management will continue to take firm actions to respond to local market conditions. Focus will be on tight cost control as well as on managing cash flow by reducing working capital and capital expenditure.

Raw material prices, energy and transportation costs will significantly increase in the second half on the back of higher oil prices. We expect to be able to offset these cost increases in our sales prices, albeit with some delay.

Long term developments such as urbanisation, climate change, smaller households, energy efficiency of buildings and substitution of traditional materials by plastics are in favour of our business and we are confident that our markets will reflect those trends on a structural level.