Wienerberger AG: Wienerberger with revenue and earnings growth in third quarter
Vrsta objave: Rezultati poslovanja
Vienna (pta/13.11.2012/08:00) 1-9/2012: Group revenues +18% and operating EBITDA approx. at prior year level
- Q3 2012: +43% in revenues and +25% in operating EBITDA
- New Business Area Pipes & Pavers Europe brings sound revenue and earnings growth
- Weak residential construction leads to lower brick volumes in Europe
- Price increases implemented to cover cost inflation
- Operating EBITDA for 2012 expected to reach prior year level
- Cost cutting measures on track for brick business
Wienerberger AG today presented sound results for the third quarter of 2012. Against the backdrop of a difficult economic environment, revenues for the first nine months rose by 18% to 1,744 million Euro and operating EBITDA nearly matched the prior year level at 202 million Euro. The third quarter brought even stronger growth: from July to September 2012 revenues rose by 43% to 755 million Euro and operating EBITDA by 25% to 101 million Euro. This positive development resulted, above all, from the newly acquired pipe business. The revenue and earnings contribution from Pipelife, which was acquired in May of this year, more than offset the declines in the brick business. Wienerberger's goal in acquiring Pipelife was to broaden the core business and reduce the dependency on cyclical residential construction. The results presented today confirm the set course. Heimo Scheuch, Chief Executive Officer of Wienerberger AG, explained: "The Pipelife takeover gives the Group a second strong pillar. However, this transaction not only marks a strategic milestone in our company's history. With annual revenues of approx. 800 million Euro, Pipelife has transformed the Wienerberger Group from a brick producer into a modern, application-oriented international building materials corporation that is capable of reacting to market developments with greater flexibility and utilizing more diverse growth perspectives in its various business areas."
New reporting structure for Wienerberger
In order to better reflect the new Group structure, Wienerberger presents business areas with similar market dynamics and growth drivers along the new segments: "Bricks & Tiles Europe", "Pipes & Pavers Europe" and "North America".
Lower revenues and earnings in Bricks & Tiles Europe
Wienerberger is currently facing strong market headwinds in its traditional core brick business. Roughly 90% of revenues are generated in Europe, where new residential construction, the main driver for brick sales, is on a downturn in nearly all countries. In some markets the number of single- and two-family homes completed this year will even fall substantially below the crisis year 2009. These factors had a negative effect on Wienerberger's brick business and led to lower volumes as well as reduced capacity utilization and a resulting decline in earnings for the first nine months of 2012. However, the development of prices in this area underscores Wienerberger's inherent strength. The Group successfully implemented price adjustments to offset cost inflation and also increased the share of premium products in spite of the very difficult market environment. In the Business Area Bricks & Tiles Europe, revenues declined 6% to 1,117 million Euro and operating EBITDA 21% to 156 million Euro. Wienerberger reacted to these developments during the third quarter of 2012 and introduced the necessary optimization measures. Structures are being altered to reflect the weaker market environment through the mothballing of plants, the adjustment of shift models in the production area and a reduction in administrative and selling expenses.
Pipelife supports strong revenue and earnings growth for Pipes & Pavers Europe
Developments in the new Business Area Pipes & Pavers Europe - which now cover the Group's pipe and concrete paver activities - were substantially more positive during the first nine months. Revenues rose from 183 million to 480 million Euro and operating EBITDA from 22 million to 51 million Euro. Pipelife recorded higher volumes, above all due to strong domestic demand in the key markets of Northern Europe. Cost reduction measures implemented in 2011 and shifts in the mix to premium and innovative products also supported an improvement in margins. Steinzeug-Keramo, the market leader for ceramic pipes, also reported higher volumes and a slight increase in average prices. The Semmelrock Group, which is active exclusively in Central Eastern Europe, was faced with intensified price competition due to the decline in construction activity throughout the region and recorded a decline in revenues and earnings. The necessary measures were therefore implemented in this company to increase efficiency and adjust structures to reflect the market climate.
Positive operating EBITDA in North America
Wienerberger is also able to report positive developments in North America. This business area benefited from the recovery in new residential construction and from the initial consolidation of Pipelife's US plastic pipe business. Revenues in this segment rose by 40% to 142 million Euro and operating EBITDA was positive at approx. 6 million Euro for the first nine months of 2012.
Cash Flow, Asset and Financial Position
Cash flow from operating activities improved nearly 10 million to 49 million Euro due to a smaller year-on-year increase in working capital. Net debt rose to 749 million Euro, above all as a result of the Pipelife acquisition. This represents a ratio of net debt to operating EBITDA of 2.7 years, which should fall below the Group's target of 2.5 years by the end of 2012.
Segment Developments in the Third Quarter of 2012
The third quarter brought an improvement in Group revenues which, based on the steady positive development of average prices, rose by 43% to 755 million Euro. Operating EBITDA increased 25% to 101 million Euro. The market environment for bricks continued to weaken, whereby particularly strong declines were noted in Belgium, the Netherlands, France, Poland and the Czech Republic. Lower revenues and earnings in Bricks & Tiles Europe were more than offset by the initial inclusion and the positive development of Pipelife as well as volume growth in North America, Russia and India. Pipelife continued to benefit from the sound demand for pipes in Northern Europe, while business development at Steinzeug-Keramo was driven mainly by stronger exports. The restructuring measures implemented in Bricks & Tiles Europe and at Semmelrock led to non-recurring cash effects of 5.6 million Euro in the third quarter. These costs are not included in operating results but reported separately; the same applies to special write-downs of 3.3 million Euro.
Strategy and Outlook
For the full year, Wienerberger expects a continuation of the weak market environment and, depending on the weather up to the end of the year, expects operating EBITDA will match the 2011 level. Lower revenues and earnings in Bricks & Tiles Europe should be offset by the Pipelife consolidation and moderate growth in North America. The cost reduction measures that have already been implemented or are currently in the implementation stage should produce savings of roughly 40 million Euro by the end of 2013, whereby approx. 13 million Euro will be realized this year. In contrast, non-recurring cash expenses of approx. 14 million Euro and special write-downs of approx. 15 million Euro will be recognized in 2012. Depending on the further development of the economy additional optimization steps cannot be excluded. Normal capex was cut from the originally planned 140 million to 110 million Euro for this year, including the capex of Pipelife. Plans also call for a substantial decrease in working capital by the end of 2012 through inventory reductions. Based on current cash flow forecasts, Wienerberger expects to reach the target of less than 2.5 years for net debt to operating EBITDA by year-end.
Future growth potential in in both Business Areas
When asked about a guidance for 2013, Heimo Scheuch answered: "The current limited visibility makes it impossible to venture a forecast for 2013. However, the strength of the brick business model is the generation of high cash flows, also in a difficult market environment. As long as there is no improvement in residential construction, we will concentrate on this business model and position Wienerberger to benefit from strong growth in this area in the event of a future recovery. In Pipes & Pavers, I see further growth opportunities for Pipelife in the active development of applications for building and electro installations as well as an increased focus on special products for water and sewage systems. The medium- and long-term need for renovation of the existing supply networks in Western Europe and the demand for improved networks in Eastern Europe will serve as the central driver for further expansion at Pipelife and Steinzeug-Keramo. I am convinced that Wienerberger is well positioned to realize sustainable growth with these two strong pillars."
Wienerberger with leading positions in bricks, roof tiles, concrete pavers and pipe systems
Wienerberger is the world's largest producer of bricks (Porotherm, Terca) as well as number one on the clay roof tile market in Europe (Koramic, TONDACH) and on the concrete paver market (Semmelrock) in Central-East Europe. In pipe systems (Pipelife plastic pipes and Steinzeug-Keramo ceramic pipes), the company is one of the leading suppliers in Europe. With 226 plants, Wienerberger generated revenues of 1,915 million Euro and operating EBITDA of 240 million Euro in 2011.
Wienerberger AG is a pure free float company, whereby the majority of shares are held by Austrian and international institutional investors. Additional information on the shareholder structure is provided under http://www.wienerberger.com/investor-relations/the-wienerberger-share/the-wienerberger-share/shareholder-structure
Earnings Data 1-9/2011 1-9/2012 Chg. in % Year-end 2011
Revenuesin mill. Euro1,478.11,743.9+181,915.4
Operating EBITDA 1)in mill. Euro200.6201.60240.4
Operating EBIT 1)in mill. Euro56.259.6+640.0
Profit before taxin mill. Euro77.357.3-2647.4
Profit after tax 2)in mill. Euro64.746.7-2839.4
Earnings per sharein Euro0.350.2-430.07
Free cash flow 3)in mill. Euro63.05.3-92132.2
Normal capexin mill. Euro56.965.1+1495.8
Growth capexin mill. Euro44.8160.9>10055.9
Balance Sheet Data 31.12.2011 30.09.2012 Chg. in %
Equity 4)in mill. Euro2,435.42,494.5+2
Net debtin mill. Euro358.8749.2>100
Capital employedin mill. Euro2,656.73,208.4+21
Balance sheet totalin mill. Euro3,998.44,392.9+10
Gearingin %14.730.0>100
Ø Employees11,89312,518+5
Business Areas 1-9/2012 Bricks & Tiles Europe Pipes & Pavers Europe North America Holding & Others Reconciliation
in mill. Euro and %
Third party revenues1,116.9(-6%)479.9(>100%)142.0(+40%)4.0(+21%)
Inter-company revenues1.9(-30%)0.5(>100%)0.1(>100%)6.4(+5%)-7.8
Revenues1,118.8(-6%)480.4(>100%)142.1(+40%)10.4(+11%)-7.8
Operating EBITDA 1)155.6(-21%)51.1(>100%)5.6(>100%)-10.7(+15%)
Operating EBIT 1)56.5(-35%)29.0(>100%)-11.9(+47%)-14.0(+23%)
Total investments45.0(-39%)164.4(>100%)12.9(>100%)3.7(>100%)
Capital employed2,038.2(+1%)656.1(>100%)496.6(+6%)17.5(-30%)
Ø Employees8,806(-2%)2,412(+61%)1,090(-5%)210(+2%)
Business Areas in Q3 2012 Third party revenues Operating EBITDA 1)
in mill. Euro7-9/2011 7-9/2012 Chg. in % 7-9/2011 7-9/2012 Chg. in %
Bricks & Tiles Europe417.8403.5-379.265.6-17
Pipes & Pavers Europe70.1288.6>10011.233.9>100
North America39.961.4+54-0.35.0>100
Holding & Others1.21.5+25-9.5-4.0+58
Wienerberger Group 529.0 755.0 +43 80.6 100.5 +25
1) Adjusted for non-recurring income and expenses
2) Before non-controlling interests and accrued hybrid coupon
3) Cash flow from operating activities minus cash flow from investing activities plus growth capex
4) Equity including non-controlling interests and hybrid capital
Note: In the table of the operating segment data, changes in % to the comparable prior year period are shown in brackets.
web publication: http://www.wienerberger.com
publication date: 13.11.2012
emitter:Wienerberger AG, Wienerbergstraße 11, 1100 Wien, Austria
contact person:Barbara Braunöck
e-mail:communication@wienerberger.com
phone:+43-1-60-192-471
website:www.wienerberger.com
ISIN(s): AT0000831706
Exchanges: official trade in Vienna