FLLYR: NPX: Nuplex FY2010 Results Release

26 Aug 2010 9:33 am

NPX 26/08/2010 FLLYR

REL: 0933 HRS Nuplex Industries Limited

FLLYR: NPX: Nuplex FY2010 Results Release

Nuplex Industries Limited Results announcement to the market

Reporting period 12 months to 30 June 2010 Previous reporting period 12 months to 30 June 2009

Amount (000s) Percentage change Revenue from ordinary activities $1,459,933 down 2.3% Profit from ordinary activities after tax attributable to security holder $71,444 up 203% Net profit attributable to security holders $64,210 up 284%

Interim/Final dividend Amount per security Imputed amount per security Final 11.0 cents per share 0.0 cents per share

Record date 1 October, 2010 Dividend payment date 8 October, 2010

Comments Unusual (gains)/losses after tax for the current year comprise:

NZD '000 Nuplex Resins LLC waste water discharge legal provision 1,220 NZ Securities Commission legal costs provision 910 Impairment of assets and reversals thereof 4,455 Remediation provisions 693 Other (45)

Total unusual losses after tax 7,233

ASX/NZX Media Release

26 August 2010

Record profit by Nuplex

- EBITDA up 52% - NPAT up 284% - Final dividend up 120%

Nuplex Industries Limited, the international resins and specialty chemicals group and one of Australasia's leading global manufacturers, today announced a record after-tax profit of NZ$64.2 million for the year to 30 June 2010, up 284% from FY2009 ($16.7 million). This was after unusual items totalling $7.2 million (FY2009: $6.9 million).

Earnings before interest, tax, depreciation and amortisation (EBITDA) were NZ$139.4 million (F2009: $91.5 million), slightly ahead of guidance of $125 - $135 million. This was after non-recurring costs of $9.2 million principally related to restructuring. Earnings were affected by the strength of the New Zealand dollar compared with the previous year; at 2009 exchange rates, EBITDA increased by 65% for the full year.

Operating cash flow was NZ$104.7 million (FY2009: $123.2 million), with continued focus on working capital management resulting in a lower ratio of working capital to sales. Gearing (net debt to net debt plus equity) fell to 12% from 20% at 30 June 2009, due to the strong operating cash flow and relatively low level of expenditure on acquisitions and capital equipment.

The directors have declared a final dividend of 11 NZ cents per share (FY2009: 5.0 cents), payable on 8 October 2010 to shareholders on the register at 1 October 2010. This will bring total dividends for the year to 21 cents per share, compared with 8.5 cents in FY2009. The final dividend will be franked to 40% for Australian shareholders, but will not carry any New Zealand imputation credits. The dividend re-investment plan will apply to the final dividend, with a strike price equivalent to the weighted average share price during the period 21-27 September 2010, less a discount of 15 cents per share.

Results summary for the year to 30 June 2010 (NZ$m) 30 June 2009 (NZ$m) Change (%) Sales revenue 1,459.9 1,493.7 -2.3 EBITDA 139.4 91.5 52.3 EBIT 116.6 67.0 74.1 Operating profit 71.4 23.6 203 Net profit 64.2 16.7 284 Earnings per share (cents) 34.0 28.0 21.4 Final dividend per share (cents) 11.0 5.0 120 Total dividends per share (cents) 21.0 8.5 147

Group results by region in NZD 30 June 2010 (NZ$m) 30 June 2009 (NZ$m) Change (%) Sales revenue Australia 583.6 588.1 -0.8 New Zealand 164.6 178.1 -7.6 Asia 228.2 212.2 7.6 Europe 358.0 366.4 -2.3 Americas 125.5 148.9 -15.7 Total sales revenue 1,459.9 1,493.7 -2.3 EBITDA Australia 50.7 41.4 22.5 New Zealand 6.8 3.2 110.8 Asia 33.5 24.4 37.1 Europe 35.1 11.6 203.4 Americas 13.3 10.9 22.0 Total EBITDA 139.4 91.5 52.3

Mr Emery Severin, chief executive officer, said: 'This substantial profit increase, for a period when economic conditions were volatile and difficult, demonstrates the strength of our businesses and market positions. It also reflects the actions taken a year ago to improve productivity, increase margins, and reduce operational costs and working capital.'

'Sales volumes of our manufactured resins were up 11% compared with FY2009 and earnings in local currencies were higher in all our four regions - Australasia, Asia, Europe and the Americas. While there was a small decline in reported sales revenue in New Zealand dollars, overall sales revenue in local currencies was higher than the previous year, with stand-out performances in Asia and Europe. Lower raw material costs would normally have lead to lower selling prices, but a strong focus on margin management ensured that margins returned to more acceptable and sustainable levels.'

'Improved margins also contributed to higher earnings by our Specialties business, which operates in Australia and New Zealand, although sales were affected by lower demand.'

'Maintaining world-class health, safety and environmental standards in all our operations is a priority for the company. During the year, our lost time injury frequency rate fell from 3.4 in July 2009 to 2.1 in June 2010. Energy and water consumption continued to decline as did the greenhouse gas emission rate. Further progress is targeted in FY2011.'

Resins

The Resins business manufactures raw materials used by the coating, composites, construction, adhesive, textile, printing ink and paper industries. It supplies coatings in 85 countries and provides composite raw materials to businesses throughout the Asia-Pacific region.

Resins: results by region in local currencies 30 June 2010 30 June 2009 Change (%) Sales revenue Australasia (AUD million) 368.4 373.1 -2 Asia ($US million) 147.2 126.8 16 Europe (Euro million) 181.2 159.1 14 Americas ($US million) 86.6 88.4 -2 EBITDA Australasia (AUD million) 29.4 20.8 41 Asia ($US million) 22.9 14.8 55 Europe (Euro million) 17.7 5.1 250 Americas ($US million) 9.4 6.5 43

Coatings

Sales volumes and earnings were higher in all coatings businesses. Revenue increased in Europe and Asia, although reported total revenue was down slightly when converted into New Zealand dollars due to currency fluctuations and the impact of lower raw material costs on selling prices.

In Australia, sales to some market segments were helped by the robustness of the Australian economy, while New Zealand sales were impacted by weakness in the economy and low housing starts. Exports were hampered by relative strength in the Australian and New Zealand dollars. Margins increased overall, costs and working capital were reduced, and customer delivery times improved.

Sales in Asia grew strongly, taking advantage of increased economic activity more focused on domestic demand, although demand from the Chinese automotive industry began to slow in the fourth quarter. Operational efficiency increased, and the performance of the composites business in Indonesia started to improve. The group's Asian businesses are now working at close to full capacity; new sites are being sought in China and there are plans to expand capacity in Vietnam to take advantage of growing demand.

In Europe, sales volume grew by 16% over the previous year, resulting in increased revenue in local currencies. This was helped by a recovery in the automotive industry, government stimulus programs in the northern industrial countries, and increased exports of consumer goods to Asia. Market share increased following the introduction of VOC-compliant products and technologies. Margins improved and costs were reduced, leading to a significant increase in earnings, particularly in The Netherlands.

The American business benefited from the major restructuring in 2009; operational efficiency continued to improve and margins increased following greater focus on specialty resins and environmentally-friendly technology. Demand in the US was restrained by high unemployment and low consumer spending, although there were signs of a recovery in the fourth quarter. Sales to South America continued to improve.

Composites

Despite a slight drop in volume, the composites business increased its EBITDA by over 74%, due to improved margins and cost reductions. It maintained its market share in Australasia despite increased competition by overseas companies and benefited from increased expenditure on water infrastructure and on leisure products resulting from the Australian government's stimulus package. New technologies, lowering emissions and reducing labour costs, were introduced and the business increased its focus on expanding sales to South-east Asian markets.

Specialties

30 June 2010 (NZ$m) 30 June 2009 (NZ$m) Change (%) Sales revenue 290.2 303.6 -4.4 EBITDA 19.5 17.9 9.1

The Specialties business markets functional raw materials to the chemical, plastic, construction, coatings, food and pharmaceuticals sectors in Australia and New Zealand.

Sales revenue was constrained by reduced demand from industrial sectors, especially in New Zealand where several customers closed their manufacturing operations, and by delays in receiving product due to suppliers' inventory reduction programs. The food and pharmaceuticals markets, however, were more resilient, and overall revenue began to recover in the second half after a weak first half.

Earnings increased strongly in the second half compared with the previous year, helped by increased focus on margins and lower costs. Masterbatch's results also improved as its Vietnam` manufacturing facility returned to profit following the fire in October 2008.

The Med-Chem ingredients business, acquired in March 2010, made a positive contribution in line with expectations.

Outlook

'Nuplex has strong market positions, especially in Asia's fast-expanding markets, underpinned by our investment in world-class technology. We are continuing to focus on improving and sustaining margins. This will be supported in FY2011 and 2012 by implementing the "Step Change" program. We have a robust balance sheet to enable us to take advantage of growth opportunities,' said Mr Severin. 'The group's performance in FY2011 will depend upon economic activity in our markets; while current volumes remain below the levels of 2008, demand is significantly stronger than a year ago.'

An update on Nuplex's performance for the first quarter of FY2011 will be given at the annual general meeting on 3 November.

Nuplex Industries Limited is listed on the Australian and New Zealand stock exchanges, with market capitalisation of A$450 million or NZ$560 million. The group is a leading global manufacturer of polymer resins which are essential ingredients in a wide range of products used every day, from basic necessities, through consumer durables to luxury goods. It has manufacturing operations in ten countries on four continents and sells to some 85 countries.

Nuplex also distributes raw materials to the chemical, plastics, general industrial, food and pharmaceutical sectors in Australia and New Zealand.

For further information, please contact: Emery Severin, Nuplex Group Managing Director, +612 9666 0331

Media enquiries: Ashley Rambukwella, Financial & Corporate Relations, +612 8264 1004 / +61 407 231 282 Amanda West, Merlin Consulting, +649 585 1519 / +64 210 439 674

NB: ALSO ATTACHED TO THIS RELEASE ARE COPIES OF THE FINANCIAL STATEMENTS AND POST RESULTS PRESENTATION, TOGETHER WITH A COPY OF THE ASX APPENDIX 4E End CA:00198875 For:NPX Type:FLLYR Time:2010-08-26:09:33:55

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