Exchanges: Exchange:
WIE - Ordinary Shares
- Vienna
The Group's principal
activity is manufacturing of bricks and roofing systems used as building
materials. The Group operates through three divisions: Bricks, Roofing
Systems and Pavers. The Group's brick division is divided into three regional
segments: Bricks Central and Eastern Europe, Bricks Western Europe and
Bricks USA. These segments produce hollow bricks and related products,
hollow and facing bricks and concrete blocks. The Group's Roofing System
division includes Koramic roofing, ZZ Wancor, Bramac concrete roofing tiles
and Tondach Gleinstaetten clay roof tiles. The Group's Paver division includes
Terca (clay) and Semmelrock (concrete). Pavers are produced as clinkers
made of clay or as concrete tiles and slabs. During the year 2006, the
Group acquired Robinson Brick Co., Bayrische Dachziegelwerke Bogen GmbH
& Ampe Steenbakkerijen NV and the group sold Wienerberger Ofenkachel
GmbH & Co KG
http://www.wienerberger.com/
New
Wienerberger CEO implements comprehensive action plan
Weaker-than
expected new residential construction triggers revenues and earnings decline
–
New CEO Heimo Scheuch launches immediate action plan
–
Cost savings of € 150 million expected for full year
–
Financing secured for Wienerberger
Vienna,
August 18, 2009 – Wienerberger recorded a 29% drop in revenues to €
898.1 million for the first six months of 2009. After a weather-related
very weak first quarter (-37% year-on-year in revenues), the second quarter
decline was more moderate in comparison (-22%). Results for the first half-year
were the consequence of a stronger-than-expected downturn on new residential
construction markets across Europe and North America in the wake of the
global economic and financial crisis. The loss of consumer confidence and
above all a lack of financing have notably slowed the pace of new construction.
A drop in sales volumes, lower average prices and costs arising from extensive
standstills throughout the Group’s plant network to reduce inventories
as part of active working capital management triggered a decline in operating
earnings for Wienerberger: operating EBITDA (before restructuring costs)
fell by 57% to € 100.6 million and operating EBIT by 94% to €
7.8 million for the first six months of 2009. Profit after tax was negative
at
€ -204.0 million, above all due to € 59.1 million of restructuring
costs for optimization measures as well as € 28.1 million of impairment
charges to property, plant and equipment from the write-down of real estate
and € 125.4 million of impairment charges to goodwill.
New
residential construction declines in all key Wienerberger markets
during H1 2009
Record
prior year results in Central-East Europe were followed by the strongest
revenue and earnings declines in the Group due to the spread of the global
financial crisis to the construction industry in this region. Weaker demand,
especially in the UK, had a negative impact on revenues and earnings in
North-West Europe. Earnings in Central-West Europe were influenced by continuing
weakness on the new residential construction market in Germany as well
as the costs of extended plant standstills at the beginning of this year.
The USA reported a further decline in housing starts during the first months
of 2009 from the very low prior year level.
Impairment
charges of € 125.4 million to goodwill
Against
this backdrop, impairment testing for the Group’s assets was based on very
conservative assumptions for the future development of Wienerberger’s business.
These stress tests resulted in impairment charges of € 125.4 million
to goodwill, which were recognized primarily in the USA, the UK, France,
Italy, Germany, Scandinavia and the Baltic States. The impairment charges
of € 50.4 million recognized to goodwill in the North America segment
during the first half-year are related above all to the Group’s regional
business unit in the Midwest. Wienerberger continues to view the USA as
a growth market, but the structurally weak Midwest – where the automobile
industry is a key driver for growth – is not expected to recover significantly
over the mid-term and an impairment charge was therefore required. Weaker
demand for facing bricks as well as expectations for reserved market recovery
after a turnaround, both in the UK and Continental Europe, are the main
reasons for the impairment charges recognized by Wienerberger in the UK,
France and Germany.
Action
plan launched by new management
Heimo
Scheuch, who started as Wienerberger´s CEO on August 1 in a very
difficult market environment, summarized the situation by commenting: “Exceptional
times require exceptional measures. Stronger-than-expected declines on
our markets during the first half-year called for further action, and we
responded quickly to the very weak first quarter by extending our restructuring
program. Specifically, we implemented an action plan that includes additional
adjustments to production capacity, active working capital management,
a reduction in fixed costs and a cutback in investments to a minimum. This
year we intend to close or mothball 26 plants, instead of the originally
planned 20, to adjust our capacity to reflect the weaker demand and also
reduce inventories. We estimate the costs for these measures at €
100 million, whereby approx. € 60 million represent special write-downs.
Wienerberger took 18 plants off-line during the first six months, which
resulted in € 59 million of restructuring costs and unfortunately
also involved nearly 1,000 jobs. In addition, extensive temporary standstills
were scheduled throughout the entire plant network to reduce inventories.
Together with the mothballed production lines, these temporarily closed
locations represent a substantial capacity reserve that we can reactivate
quickly as needed.“ The new Wienerberger Managing Board has also introduced
added measures to optimize administration and sales as a means of cutting
fixed costs and limited investments to the necessary minimum.
Weak
markets and severe winter influence Wienerberger results for Q1
Group
revenues -37% to € 360.3 million; Operating EBITDA -82% to €
16.2 million
–
Wintery weather conditions and deterioration of macroeconomic
environment
–
Continuation of restructuring program to strengthen liquidity
and reduce net debt
Vienna,
May 6, 2009 – In comparison with the record first quarter of the previous
year, Wienerberger AG, the world’s largest producer of bricks and the number
two in clay roof tiles in Europe, recorded as expected a massive revenue
and earnings decline for the first three months of 2009. Group revenues
fell by 37% to € 360.3 million and EBITDA by 82% to € 16.2 million.
The development of business was significantly influenced by the continued
deterioration of macroeconomic conditions on all markets as well as severe
weather during most of the first quarter. “Extremely mild winters during
the past two years were followed this season by heavy snows that restricted
construction activity. In addition to the already weak markets, this situation
had a further unfavorable influence on our business. One of our current
goals is to reduce inventories by the end of this year. We therefore extended
the winter standstills at our plants, but the resulting costs had an added
negative effect on earnings. However, it should be noted that the first
quarter of the year provides only a limited basis for an analysis of the
building materials industry because of seasonal and weather-related factors
– and for this reason, an evaluation of developments at Wienerberger over
the coming months is only possible to a limited extent“, commented Wolfgang
Reithofer, Chief Executive Officer of Wienerberger AG, on the results presented
today.
Bad
weather and weak markets lead to sharp drop in demand
Wienerberger
recorded significantly lower demand on all markets during the period from
January to March, whereby the decrease in Eastern Europe was the most pronounced
because of the strong first quarter of 2008 with its historical record
results. The strongest revenue declines were reported by Hungary, Romania
and Russia but volumes were also low in Poland, the Czech Republic and
Slovakia. Moreover, foreign exchange effects had a negative influence on
the development of revenues in the region. Western Europe also reported
top-line declines on all markets, but to a lesser extent. New residential
construction in the USA remained weak. The operating EBITDA decreased because
of weaker demand and the costs arising from extended production standstills.
EBIT
clearly negative at € -29.0 million
Operating
EBIT for the first quarter was clearly negative at € -29.0 million,
compared with € 42.6 million in the prior year. The shutdown of nine
plants and further cost savings in sales and administration led to restructuring
costs of € 42.6 million, which included € 11.4 million of cash
expenses and € 31.2 million of special write-downs. Wienerberger recorded
a loss in profit after tax of € 61.0 million for the first three months
of 2009, as opposed to profit of € 30.2 million in the prior year.
Adjusted earnings per share fell from € 0.26 for the first quarter
of 2008 to € -0.39 in the first quarter of 2009 (after deduction of
the hybrid coupon and an adjustment for restructuring costs).
Seasonal
increase in net debt
“Net
debt rose from € 890.2 million at the beginning of the year to €
1,067.9 million as of March 31, 2009 due to seasonal factors. Cash flow
from operating activities was negative at € 85.3 million because of
the decline in earnings and the seasonal increase in working capital. However
in spite of very weak market activity, Wienerberger was able to reduce
inventories in a period that is normally characterized by increases in
this area. Cash outflows of € 49.6 million for investments and acquisitions
include € 37.7 million for the completion of projects started in the
previous year as well as € 11.9 million of maintenance capex. Group
equity declined from € 2,497.2 million at the beginning of the year
to € 2,364.0 million as of March 31, 2009, chiefly due to the payment
of the hybrid coupon and negative foreign exchange differences“, explained
Chief Financial Officer Willy Van Riet.
Central-East
Europe with massive drop in earnings after record prior year
Central-East
Europe reported massive declines in comparison with the record first quarter
of the prior year due to a sharp drop in sales volumes. Revenues fell by
54% to € 93.2 million and EBITDA by 85% to € 9.4 million. Among
the Wienerberger regions, Central-East Europe was the most heavily affected
by the severe snow. “Results in this segment were negatively influenced
by the difficult market and weather conditions as well as by unfavorable
foreign exchange effects, above all from Poland, the Czech Republic, Romania
and Hungary“, explained Johann Windisch, member of the Managing Board with
responsibility for Central-East Europe and North America. “It is not possible
to separately identify the influence of the bad weather and the effects
of market weakness on earnings, and that makes it difficult to evaluate
the development of business in this region. In any event we are expecting
substantial volume declines in all countries, whereby the more stable macroeconomic
environment in Poland, the Czech Republic and Slovakia should allow these
countries to perform better than Hungary, Romania and Russia.“
Bad
weather leads to earnings decline in Central- and North- West Europe
In
Central-West Europe, revenues fell by 29% to € 66.4 million, while
a loss of € 5.5 million was recorded at the EBITDA level. Heimo Scheuch,
designated CEO and member of the Managing Board with responsibility for
North-West Europe and Germany added: “Sales volumes in this segment declined
by more than 30% – also as a result of the bad weather. Although prices
remained stable, earnings were negative above all due to the costs resulting
from extended seasonal plant standstills. For the full year we expect a
further weakening of demand in all markets and increasing pressure on prices
in Italy.“ In North-West Europe revenues fell by 26% to € 172.4 million
and EBITDA by 36% to € 25.1 million. In addition to the cost of production
standstills, earnings were negatively affected by the bad weather and the
related drop in sales volumes. For example, sales volumes of facing bricks
and clay roof tiles in Great Britain were roughly 40% below the still sound
first quarter of 2008 (before the market collapse in April). “Great Britain
will remain weak. In France we are expecting only a slight volume decline
because of the continuing market shift from concrete to bricks. On the
market in Belgium, the VAT reduction for building materials and construction
services could provide positive effects. The negative trend will continue
in the Netherlands“, summarized Heimo Scheuch.
US-housing
starts in Q1 still declining
Revenues
in the North America segment dropped 33% to € 35.2 million and EBITDA
declined to € -5.8 million. Housing starts in the USA continued to
contract sharply, falling by more than 50% year-on-year during the first
three months of 2009. For this reason, earnings were also affected by plant
standstills and the related the costs of idle capacity. Johann Windisch
described the outlook for this region as follows: “We expect weaker demand
from the US market, in any case during the first six months. However, stabilization
may be possible after this summer since we already saw an extremely low
level of residential construction during the second half of 2008.“
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