Also in 2016, market conditions will be very challenging. Price levels are expected to continue to be at historically low levels and we do not foresee any substantial improvement in this area in 2016.  Capacity reductions in the Chinese steel industry and anti-dumping measures in Europe appear to have some impact and could initiate an upward price trend for welded materials. Producers of seamless pipes have also announced capacity reduction measures. However, without any serious upward movement in the price of oil, the price of materials is not expected to increase significantly.

Throughout the world, virtually all upstream-related investments have been postponed or cancelled. In terms of the recovery of demand in the Energy segment, we are largely dependent on the development of the price of oil. In the Industry market, depending on country and region, we do not expect any change in comparison to 2015, with very moderate price levels and little growth in volume. Opportunities, however, could emerge as certain competitors are eliminated or reduce their distribution network. The optimization of our distribution channels and increasing our services to the customer will continue to be a priority for Van Leeuwen in 2016.

We will further reduce our operating costs in 2016. The cost measures taken in 2015, are expected to support the 2016 result. Where necessary, additional cost reduction measures will be implemented to enable us to compensate for the reduction of the gross margin on sales due to the decline in prices. In spite of difficult market conditions, we will continue to develop new initiatives in the coming year, particularly in relation to new product groups or in areas that further strengthen our network.  Long-term stability and continuity remain the guideline.

There is uncertainty in many areas around us in the world. Political, as well as economic developments are increasingly less predictable. Nevertheless, we see opportunities in our various markets around the globe. With a dedicated and committed group of employees, Van Leeuwen has access to a great deal of knowledge and experience in terms of products, markets, processes and applications throughout the world. We also rely on the long-term and good relationships with our customers and suppliers. This once again enables us to exploit opportunities in the market and to move the company forwards in 2016.

Zwijndrecht, the Netherlands, 24 March 2016

Management Board
P.L. Rietberg (Chairman)
J.M. Sassen

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