Deceuninck’s 1Q11 sales increased by 6.8% to € 116.6m which was slightly lower than our € 119.5m forecast (+9.5% y/y). Volumes grew by 2.4% (KBCS +6%), price/mix improved by 4.6% (KBCS +2.5%) and FX accounted for -0.2% (KBCS +1%). The geographic breakdown of sales was as follows: Western Europe grew revenue by 10.3% to € 54.3m, with strong performances in France, Belgium and Italy. The CEE zone, which includes Germany, grew by 6.6% to € 27.8m, with a soft take off of demand due to the long winter period. Turkey grew revenue by 5.8% to € 22.4m which represents a growth of 8% assuming constant currencies. Sales declined by 5.3% to € 12.0m in the US (-4% at constant currencies) as demand was effected by the termination of the $ 1500 renovation tax credit at year-end 2010. Deceuninck sticks to its guidance of continued sales and profit growth in 2011 but comments the guidance depends on the success with efforts to raise selling prices in generally very competitive markets in order to pass on higher rawmat costs (pvc up 8% so far this year) along with cost reductions. The order intake at beginning of the second quarter was said to show a similar trend as in 1Q11. Conclusion: 1Q revenue was slightly lower than expected with the shortfall mainly coming from volumes as price/mix was slightly better than expected and showing some effect of efforts to raise selling prices. The evolution of raw materials prices – PVC price up 8% so far in 2011 and prices now 19% above the level a year ago –remains a reason for concern. After the fairly strong share price performance of the past few months we downgrade our rating from Accumulate to Hold while maintaining our € 2 target price.