Wienerberger AG · VIE:WIE
Wienerberger — Investor Day (September 2019)
130 slides from Wienerberger's investor day presentation, September 2019
Slide 1: Wienerberger Capital Markets Day
Wienerberger Capital Markets Day September 2019
Slide 2: Our success story began 1819 on a hill south of Vienna
OUR SUCCESS STORY BEGAN 1819 ON OUR KEY SUCCESS FACTOR HAS NOT A HILL SOUTH OF VIENNA CHANGED IN THE LAST 200 YEARS OUR PEOPLE
Slide 3: Wienerberger is built on strong foundations
… OR WHEN INTRODUCING SOCIAL BENEFITS AND WIENERBERGER IS BUILT ON STRONG FOUNDATIONS BUILDING AFFORDABLE HOMES FOR OUR WORKERS CREATING BUILDING FOR VALUE PEOPLE 150 YEARS AS STOCK LISTED COMPANY SUSTAINABLE DRIVING GROWTH INNOVATION
Slide 4: Today we focus on a circular economy
TODAY WE FOCUS ON … Recycled material in plastic pipes 85 75.2 in kg / ton 67.2 64.6 65.4 58.9 A CIRCULAR ECONOMY 2014 2015 2016 2017 2018 2020
Slide 5: We focus on employee safety
WE FOCUS ON … Accident frequency rate * 12 10 8 7 5 5 EMPLOYEE SAFETY © Uwe Strasser 2013 2014 2015 2016 2017 2018 * Number of occupational accidents / number of hours worked x 1,000,000
Slide 6: E4 housing concept for zero energy homes
WE FOCUS ON … E4 HOUSING CONCEPT FOR ZERO ENERGY HOMES
Slide 7: Security of supply using smart infrastructure
WE FOCUS ON … SECURITY OF SUPPLY USING SMART INFRASTRUCTURE
Slide 8: Research & development for innovative solutions and services
WE FOCUS ON … Share of revenues generated by innovative products 30% 29% 28% 27% 25% 24% RESEARCH & DEVELOPMENT FOR INNOVATIVE SOLUTIONS AND SERVICES 2013 2014 2015 2016 2017 2018
Slide 9: Digitalization of our value chain
AND WE FOCUS ON … THE DIGITALIZATION OF OUR VALUE CHAIN © Uwe Strasser
Slide 10: Our mission since 1819
BECAUSE SINCE 1819 IT HAS BEEN OUR MISSION … … TO IMPROVE PEOPLE’S QUALITY OF LIFE BY PROVIDING OUTSTANDING, SUSTAINABLE BUILDING MATERIAL AND INFRASTRUCTURE SOLUTIONS. © Florian Kuettler
Slide 11: Leading international solutions provider for buildings and infrastructure
TODAY WIENERBERGER IS A LEADING INTERNATIONAL SOLUTIONS PROVIDER FOR BUILDINGS AND INFRASTRUCTURE DRIVING DIGITAL SOLUTION CHANGE IN PROVIDER OUR INDUSTRY HIGHLY SKILLED EMPLOYEES STRONG PARTNER INNOVATION FOR OUR LEADER CUSTOMERS
Slide 12: Financial Summary
© Helene Høyer Mikkelsen FINANCIAL SUMMARY
Slide 13: Record H1 results highlights
Record H1 19 results Highlights Record H1 results highlight consistent implementation of value-enhancing growth strategy Revenues € 1,736 mn | +8% EBITDA LFL € 287 mn | +33% Net profit € 127 mn | >100% Excellent progress on Fast Forward Program H1 earnings contribution € 25 mn Cumulative program con
Slide 14: H1 trading environment consistent with expectations
Record H1 19 results Highlights H1 trading environment broadly consistent with expectations at the beginning of the year Improved product mix and favorable pricing drive earnings improvement Strong earnings contribution from bolt-on M&A 14
Slide 15: Wienerberger Building Solutions
Wienerberger Building Solutions Excellent performance in H1 › Growth in almost all our core markets WBS (in € mn) H1 2019 H1 2018 Chg. in % › Early start to building season due to External revenues 1,074.1 978.4 +10 favorable weather conditions EBITDA LFL 219.1 160.5 +37 › Normalization of demand in
Slide 16: Wienerberger Piping Solutions
Wienerberger Piping Solutions Significant earnings growth › Normalization of demand in-line with WPS (in € mn) H1 2019 H1 2018 Chg. in % expectations after strong start to the year › Strong growth in electro business External revenues 497.0 478.5 +4 EBITDA LFL 51.7 35.2 +47 › Earnings increase in wa
Slide 17: North America
North America Mixed developments in H1 › Sound demand for facade solutions in North America (in € mn) H1 2019 H1 2018 Chg. in % our relevant core markets › Strong earnings contribution from External revenues 164.9 149.3 +10 acquired facing brick producer EBITDA LFL 15.8 19.3 -18 › Stricter housing m
Slide 18: Income statement
Income statement Net result more than doubled in € mn H1 2019 H1 2018 Chg. in % Revenues 1,736.4 1,606.9 +8 EBITDA LFL 286.6 214.9 +33 EBITDA LFL margin 16.8% 13.4% - EBITDA 295.7 198.9 +49 EBIT 181.5 107.7 +69 Financial result -14.8 -21.1 +30 Profit before tax 166.7 86.6 +93 Income taxes -32.9 -27.
Slide 19: Operating performance
Operating performance Strong growth of EBITDA LFL 320 300 295.7 286.6 EBITDA -9.1 adjustment (€ mn) H1 19 H1 18 280 EBITDA reported 2) 295.7 198.9 260 FX +1.4 - in € mn 240 Consolidation -8.0 - 220 +16.0 214.9 Sale of assets 3) -3.2 -9.3 Structural 200 198.9 adjustments +0.7 +25.3 Total adjustment -
Slide 20: Impact of IFRS 16 implementation
Accounting change Impact of IFRS 16 implementation › Extension of the balance sheet H1 19 impact › Recognition of “Right of Use Asset” and “Lease Liability” › Effects on income statement Income Statement in € mn › ↑ EBITDA: no rental / leasing expenses EBITDA +21.3 › ↑ EBIT: Rental / lease cost is b
Slide 21: Financial result
Income statement Financial result in € mn H1 2019 H1 2018 Chg. in % Income from investments in associates and joint ventures 0.7 0.5 +47 Interest and similar income 1.5 2.7 -45 Interest and similar expenses -20.6 -21.6 -5 Other financial result 3.6 -2.7 <-100 Financial result -14.8 -21.1 -30 Improve
Slide 22: Cash flow development
Cash flow development Gross cash flow reflects strong earnings increase in € mn H1 2019 H1 2018 Chg. in € mn Chg. in % Gross cash flow 215.4 132.6 +82.8 +62 Change in working capital 1) -210.3 -193.5 -16.7 -9 Normal capex -68.5 -60.7 -7.9 -13 Divestments and other 2) -17.3 +74.2 -91.5 <-100 Free cas
Slide 23: Balance sheet
Balance sheet Sound ratios despite IFRS 16 impact Chg. in % vs. in € mn 30/6/2018 31/12/2018 30/6/2019 31/12/2018 Equity 1) 1,855.9 1,939.1 1,980.4 +2 Equity ratio 47% 52% 49% - Net debt 778.7 631.6 982.3 +56 Net debt / EBITDA 2) 1.8 1.4 1.8 - Gearing 42% 33% 50% - 1) Including non-controlling inter
Slide 24: Outlook
OUTLOOK
Slide 25: Outlook 2019: narrowed guidance range
Outlook 2019 Confident in delivery – narrowed guidance range 600 +77 580 +67 570 550 +41 503 in € mn 500 462 450 400 EBITDA LFL 2018 IFRS 16 EBITDA LFL 2018 EBITDA EBITDA LFL 2019 incl. FX base improvement guidance Note: Rounding differences may arise from automatic processing of data 25
Slide 26: Executive Summary
Executive Summary Record H1 enables narrowing of guidance range Record H1 results highlight consistent implementation of value-enhancing growth strategy Excellent progress on Fast Forward Program Confident in delivering our 2019 growth ambition 26
Slide 27: Governance
GOVERNANCE
Slide 28: Corporate governance: two-tier board system
Corporate governance at Wienerberger Two-tier board system Annual General Meeting reports to Supervisory Managing Board Board appoints, advises, supervises 28
Slide 29: Supervisory Board shareholder representatives
Supervisory Board Shareholder representatives: group of experts Regina Prehofer (Born 1956, Austria) Peter Steiner (Born 1959, Germany) Chairwoman of the Supervisory Board Vice-Chairman of the Supervisory Board Independent, Member since 2011 Independent, Member since 2018 Extensive leadership and su
Slide 30: Supervisory Board: experienced, diverse, independent
Supervisory Board Experienced, diverse, independent Board members Gender Diversity Independence 1) 8 Shareholder Representatives Elected by the Annual general meeting for a fixed term. 36% 27% 3 64% 73% Employee Delegated by the Works Council Representatives for an unlimited amount of time. Independ
Slide 31: Corporate Governance Executive Summary
Corporate Governance Executive Summary › The Supervisory Board supervises and advises on Wienerberger’s operational and strategic development › Wienerberger is managed on the basis of effective governance structures › Wienerberger is led by highly professional and qualified teams of experts with a s
Slide 32: Group Strategy
© Juozas Kamenskas; GROUP STRATEGY
Slide 33: In the early 2000s Wienerberger was focused on
Culture change In the early 2000s Wienerberger was focused on … AGGRESSIVE FINANCIAL HIGH POLICY SHARE OF COMMODITY PRODUCTS LIMITED CAPACITY MARKET EXPANSION FOCUS EXTENSIVE M&A
Slide 34: Since then we have reshaped our Group
Culture change Since then we have fundamentally reshaped our Group STRONG OPERATIONAL FINANCIAL EXCELLENCE DISCIPLINE CUSTOMER PROXIMITY BROAD PORTFOLIO OF DIGITAL UNIQUE INNOVATION PRODUCTS ECOLOGICAL PERFORMANCE
Slide 35: 10-year performance: strong track record
10-year performance Strong track record Revenues have doubled EBITDA has more than tripled in € mn in € mn 4000 3,505 583 3500 3000 1,817 2500 2000 158 1500 1000 500 0 1) 1) 2009 2019 2009 2019 Net profit has been turned around Portfolio has been reshaped in € mn 5% 220 25% 10% 15% -289 85% 60% 1,2)
Slide 36: Focused on value creation
Group Strategy Focused on value creation Organic growth Operational Growth projects & Excellence Portfolio optimization Strong track record of consistently improving performance confirms success of our growth strategy 36
Slide 37: Drivers of our success
Group Strategy Drivers of our success Organic growth Operational Growth projects & Excellence Portfolio optimization How we enhance performance and profitability in our existing businesses 37
Slide 38: Drivers of our success
Group Strategy Drivers of our success Organic growth Operational Growth projects & Excellence Portfolio optimization 38
Slide 39: Our customers face many challenges
Organic Growth Our customers face many challenges TIME COMPLEXITY OVERRUNS OF BUILDING PROJECTS RISING BUILDING COSTS CHANGING BUILDING REGULATION
Slide 40: We provide solutions
Organic Growth We provide solutions TRANSFOR- FOCUS ON MATION INNOVATION OF OUR PORTFOLIO DIGITAL CUSTOMER ENGAGEMENT EXTENDING OUR SHARE OF THE VALUE CHAIN BIM READY HOUSING CONCEPTS SMART SOLUTIONS
Slide 41: Driving customer proximity and value creation
Transformation of our business model Driving customer proximity and value creation We are progressing from a product manufacturer … LEVEL OF VALUE › We produce high CREATION performing pumping stations and plastic tanks › Targeting professionals as well as end-customers >> PRODUCTS PIPES & FITTINGS
Slide 42: Provider of system solutions
Transformation of our business model Driving customer proximity and value creation … to a provider of system solutions … LEVEL OF VALUE › Offer of assembled CREATION systems › Support in project planning and calculation › Provide tailor-made solutions FULL SYSTEMS PREFABRICATED AND PLUG&PLAY SOLUTIO
Slide 43: Smart long-term partner
Transformation of our business model Driving customer proximity and value creation … to a smart long-term partner LEVEL OF VALUE › Offering network CREATION monitoring services SMART SOLUTIONS › Remote management MONITORING & CONTROL services › Generating recurring service revenues FULL SYSTEMS PREF
Slide 44: Smart Pumping Stations
Smart Solutions Smart Pumping Stations › Pipelife Finland is pioneering smart pumping stations for private households › A high-performance pumping station is combined with software which › Informs the customer about the system status at the click of a button › Links to weather data to warn of potent
Slide 45: Transformation to service model
Organic growth Transformation to service model › Revenue generated with smart pumping station Potential of a smart pumping station can be multiplied over lifetime 4-7x product revenue › Depending on the model and target customer group by a factor of 4-7 Significant opportunity to drive profitability
Slide 46: Total value of a building envelope
Enhancing our share of the value chain Analysis of the total value of a building envelope Total construction € 300,000 costs 46
Slide 47: Vision to claim 10% of the total value
Enhancing our share of the value chain Vision to claim 10% of the total value Total construction € 300,000 costs Share of building € 100,000 envelope Wall € 4,500 Roof € 1,800 Facade € 4,500 Strong growth Pavers € 2,000 potential Current share of € 12,800 <5% Wienerberger Note: Figures depicted are
Slide 48: Growth opportunities in adjacent & new products
Enhancing our share in of value chain Growth opportunities in adjacent & new products All4Roof Robotics Service Home4life New Website Prefab Bricks & Dryfix Solution Accessories Roof solutions Mineral insulation … and we are evaluating new opportunities Existing Products Adjacent Products New Produc
Slide 49: Global first: certified for hydrogen applications
New applications for proven technologies GLOBAL FIRST – Certified for Hydrogen applications › Certified SoluForce pipe to transport green hydrogen produced by wind mills in the North Sea to companies in the Groningen region › First time that flexible composite technology will be used for high- press
Slide 50: Contributing to feasibility of green energy projects
New applications for proven technologies Contributing to the feasibility of green energy projects 1 PERMEATION-TIGHT Aluminum barrier completely eliminates permeation of gaseous components allowing for safe transportation 2 CORROSION RESISTANT Fully corrosion resistant even in high-pressure hydrogen
Slide 51: e4 house concept
Partner for stakeholders from planning to execution e4 house concept – From digital plan to dream home e4 energy economy environment Pre-designed emotion single-family homes 100 houses in 2019 Cooperation with construction companies, designers
Slide 52: Digital Agenda: driver for organic growth
Digital Business Models Digital Agenda Driver for organic growth Digital Customer Scalable Engagement Solutions Added Value Services Digital Process Improvement Efficiency & Cost Savings
Slide 53: Digitalization enhances organic growth
Digital Agenda Digitalization enhances organic growth Distributors Contractors Developers Designers & Asset Owners Planners PAST Distributors Contractors Developers Designers & Asset Owners Planners FUTURE ONE DIGITAL BUILDING & INFRASTRUCTURE PLATFORM OPEN BIM ECOSYSTEM
Slide 54: BIM: driving industry's digital transformation
Wienerberger Solutions BIM: DRIVING THE INDUSTRY‘S DIGITAL TRANSFORMATION Increased productivity, resource and Building energy efficiency Information Modeling (BIM) addresses challenges facing the construction industry
Slide 55: Wienerberger Building Platform
Wienerberger Solutions WIENERBERGER BUILDING PLATFORM - BUILDING SYSTEMS & SOLUTIONS, SERVICES AND TOOLS BIM Model Plugins for design software and Tooling Digital Building Libraries
Slide 56: Spider – prefabricated electrical power supply
Wienerberger Solutions SPIDER – PREFABRICATED ELECTRICAL POWER SUPPLY Reduces installation time from 16h to 3h Facilitates smart homes – benefit for installers and end customers
Slide 57: Electro Spider end-to-end solutions
Wienerberger Solutions „ELECTRO SPIDER“ - END-TO-END SOLUTIONS Design Pre- fabrication Installation
Slide 58: Digital tools for partners – All4Roof
Wienerberger Solutions DIGITAL TOOLS FOR OUR PARTNERS - ALL4ROOF Platform with tools & applications to make the life of roofers easier Overview of materials and personalized quote with a few clicks
Slide 59: Innovative solutions against flooding
Wienerberger Solutions INNOVATIVE SOLUTIONS AGAINST FLOODING Raineo system as a remedy against Highly resistant and flooding versatile in use
Slide 60: Remote controlled water management solutions
Wienerberger Solutions REMOTE CONTROLLED WATER MANAGEMENT SOLUTIONS Solutions for municipalities, regional governments and utility companies
Slide 61: Smart fittings in water networks
Wienerberger Solutions ADDED VALUE THROUGH SMART FITTINGS IN WATER NETWORKS "Smart Fitting“ Coupler equipped with sensors Added value for utility companies
Slide 62: Remote controlled pumping stations with weather data
Wienerberger Solutions REMOTE CONTROLLED PUMPING STATIONS IN COMBINATION WITH WEATHER DATA Monitoring, In-house controlling & alerting solution for end customers Responsive system solutions for all devices
Slide 63: Prefabrication & robotics
Wienerberger Solutions PREFABRICATION & ROBOTICS Hadrian X Redbloc Boosting efficiency on the construction site
Slide 64: We drive digitalization from single family homes to city developments
WE DRIVE DIGITALIZATION FROM SINGLE FAMILY HOMES TO CITY DEVELOPMENTS FOR AN INTEGRATED BUILT ENVIRONMENT 15.09.2019 64
Slide 65: We are building the future
Digital Agenda Driver for organic growth We are building the future › Our digital solutions are already up and running › Designed for fast scalability across our strong commercial platforms in 30 countries
Slide 66: Organic growth vision
Organic growth Enhance our share of the construction wallet OUR VISION Double our share to approx. 10% Drive the transformation toward service model OUR VISION Substantially grow the share of recurring service revenues Lead the digital transformation of our industry Digital Business Models | Digital
Slide 67: Drivers of our success
Group Strategy Drivers of our success Organic growth Operational Growth projects & Excellence Portfolio optimization 67
Slide 68: Operational Excellence: self-help
Operational Excellence Self-help is a core performance driver › Continuously striving for the improvement of internal processes is part of our Group’s culture › In the period 2009 to 2017 we have optimized fixed costs by € 300 mn › In 2018 we bundled all standing improvement initiatives into the Fas
Slide 69: Clear structure and performance goals
Operational Excellence Clear structure and performance goals 30% Manufacturing Excellence 35% Commercial Excellence € 120 mn 15% Procurement Target EBITDA improvement 2% Supply Chain Management 3% General & Administration vs. 2017 baseline 15% Turnaround cases Expected program contribution 69
Slide 70: All targets achieved successfully to date
Operational Excellence All targets achieved successfully to date 30% Manufacturing Excellence 35% Commercial Excellence € 120 mn 15% Procurement On € 75 mn track 2% Supply Chain Management Already € 45 mn achieved 3% General & Administration vs. 2017 baseline 15% Turnaround cases Expected program co
Slide 71: Fast Forward 2020
Fast Forward 2020 TOGETHER WE BUILD THE FUTURE
Slide 72: Fast Forward 2020: Performance Enhancement Program
FAST FORWARD 2020: PERFORMANCE ENHANCEMENT PROGRAM
Slide 73: Fast Forward 2020 is accelerating operational excellence
FAST FORWARD 2020 IS ACCELERATING OPERATIONAL EXCELLENCE Operational Organic Growth Growth projects Excellence
Slide 74: Step change in operational excellence
FAST FORWARD 2020 IS A STEP CHANGE IN HOW WE DO OPERATIONAL EXCELLENCE Fast Forward 2020 delivers a sustainable EBITDA improvement vs. our baseline 2017 The program was set-up assuming stable volume developments between 2020 and 2017 All ongoing improvement initiatives bundled under the umbrella of
Slide 75: Clear structure and performance goals
Fast Forward 2020 Clear structure and performance goals 30% Manufacturing Excellence 35% Commercial Excellence € 120 mn 15% Procurement Target EBITDA improvement 2% Supply Chain Management 3% General & Administration vs. baseline 2017 15% Turnaround cases 75
Slide 76: Manufacturing Excellence
Fast Forward 2020 Clear structure and performance goals 30% Manufacturing Excellence We are operating at a solid level of capacity utilization: ~ 80% across the Group Further optimization at already high level € 120 mn Automation of production processes Increase of process efficiency with dedicated
Slide 77: Step change in lean manufacturing
STEP CHANGE IN LEAN MANUFACTURING PLANT DIAGNOSTICS DRIVE EFFICIENCY & AUTOMATION INITIATIVES Opportunity Observation Prioritisation Identification 10 % average saving potential Rollout of in energy, best practices maintenance & personnel
Slide 78: Robotics for higher efficiency
STEP CHANGE IN PRODUCTION COSTS USING ROBOTICS FOR HIGHER EFFICIENCY & FEWER SAFETY HAZARDS CAPEX € 360k EBITDA € 130k Higher efficiency & accuracy and fewer health & safety hazards
Slide 79: Step change in energy consumption
STEP CHANGE IN ENERGY CONSUMPTION GREATER ENERGY EFFICIENCY WITH NEW ROTARY FAN & FLOW GUIDES 28% less energy consumption during drying Potential rollout to Saving: 40-50 block plants € 50k per plant
Slide 80: Commercial Excellence
Fast Forward 2020 Clear structure and performance goals 30% Manufacturing Excellence 35% Commercial Excellence € 120 mn Closer to the customer with new sales approaches Dedicated teams for project sales offering the whole building envelope Target EBITDA improvement Shift from commodity products to h
Slide 81: Sales transformation in Semmelrock Poland
STEP CHANGE IN PRODUCT PORTFOLIO SALES TRANSFORMATION IN SEMMELROCK POLAND Comprehensive commercial enhancement Positive program mix-effect of > € 1.5 mn
Slide 82: Dedicated project teams for multi storey buildings
STEP CHANGE IN SALES APPROACH DEDICATED PROJECT TEAMS FOR MULTI STOREY BUILDINGS Increasing market share in Skyline project growing multi- in Belgrade as storey segment regional success story Project Set-up of Standard CRM definition per project sales roll-out and country teams steering tools
Slide 83: Procurement
Fast Forward 2020 Clear structure and performance goals 30% Manufacturing Excellence 35% Commercial Excellence € 120 mn 15% Procurement New centrally-led organizational set-up Target EBITDA improvement Optimizing input costs by leveraging group purchasing power Enhancing strategic supplier relations
Slide 84: Step change in packaging costs and sustainability
STEP CHANGE IN PACKAGING COSTS AND SUSTAINABILITY UK: 36% SAVINGS BY USING A THINNER STRETCH HOOD FOIL Successful strategic supplier relationship management Pilot project: € 100k savings 21 tons less material
Slide 85: Boosting environmental performance and cost efficiency
STEP CHANGE IN PRODUCTION COSTS AND SUSTAINABILITY BOOSTING ENVIRONMENTAL PERFORMANCE AND COST EFFICIENCY Vision 300 year pipe Target Increase kg of recycled material per ton produced by 25% Vision Specific pipes made of 100% recycled material
Slide 86: Supply chain management & general administration
Fast Forward 2020 Clear structure and performance goals 30% Manufacturing Excellence 35% Commercial Excellence € 120 mn 15% Procurement Target EBITDA improvement 5% Supply Chain Management & General Administration Digitalization of stockyard processes leading to higher efficiency vs. baseline 2017 O
Slide 87: Digital stockyard
STEP CHANGE IN DISTRIBUTION COSTS DIGITAL STOCKYARD Pilot project: Fewer forklifts and reduction of driven km Increased customer satisfaction
Slide 88: Order intake using robotic process automation
STEP CHANGE IN ADMINISTRATION EFFICIENCY ORDER INTAKE USING ROBOTIC PROCESS AUTOMATION Shifting resources to 40% time value-creating saving & operations fewer errors
Slide 89: Turnaround cases
Fast Forward 2020 Clear structure and performance goals 30% Manufacturing Excellence 35% Commercial Excellence € 120 mn 15% Procurement Target EBITDA improvement 5% Supply Chain Management & General Administration 15% Turnaround cases vs. baseline 2017 Plant network optimization New organizational s
Slide 90: Well on track to meet 2019 Fast Forward targets
H1 2019 Well on track to meet 2019 Fast Forward targets All targets achieved in 2018 Delivery on track in 2019 Target € 120 mn EBITDA improvement › Strong improvement of product mix › Automation projects, efficiency improvements and energy savings On € 75 mn track › New procurement organization and
Slide 91: Clear project design, non-linear realization
Fast Forward 2020 Clear project design, non-linear realization 2020 € 120 mn EBITDA € +20 mn € +25 mn EBITDA EBITDA 2018 H1 19 FY 19 H1 20 FY 20 Investments, project costs Contribution to EBITDA Note: Schematic visualization. Each bar represents an example for the timing of run-up costs and the star
Slide 92: Successful implementation is a Group effort
Fast Forward 2020 Successful implementation is a Group effort Target € 120 mn EBITDA improvement On € 75 mn track More than 900 initiatives in more than 30 countries already successfully implemented, Already achieved € 45 mn >300 initiatives currently running vs. baseline 2017 Steered & executed by
Slide 93: Drivers of our success
Group Strategy Drivers of our success Organic growth Operational Growth projects & Excellence Portfolio optimization Enhancing our position in strategic growth areas and creating value through disciplined capital allocation 93
Slide 94: Strong track record of value-creating deals
Growth projects Strong track record of value-creating deals › Since 2017 we have executed bolt-on deals Avg. EV/EBITDA multiples for an average weighted EV/EBITDA multiple of 6.8x pre synergies 7.1 6.8 › Post synergies the 6.7 5.9 6.1 average weighted 5.2 multiple declines to 5.2x 4.6 4.8 High confi
Slide 95: Acquisition of BPD Group
Growth projects 2019 Acquisition of BPD Group › Important further step towards becoming an Manufacturing Presence integrated supplier of full-range roofing and building envelope solutions › Acquisition of BPD grows our addressable share of the total value of the building envelope › BPD is a producer
Slide 96: Strong track record of consistent execution
Group Strategy Strong track record of consistent execution Organic growth Operational Growth projects & Excellence Portfolio optimization Drive profitability improvement and free cash flow 96
Slide 97: Free Cash Flow Generation
FREE CASH FLOW © Daniel Hopkinson GENERATION
Slide 98: Clear drivers for free cash flow generation
Free cash flow Clear drivers for free cash flow generation Portfolio Profitability enhancement Capex optimization Free cash flow generation 98
Slide 99: Clear drivers for free cash flow generation
Free cash flow Clear drivers for free cash flow generation Portfolio Profitability enhancement Capex optimization Free cash flow generation 99
Slide 100: Analyzing capex
Capital Expenditures Analyzing capex › We are updating our capex reporting based on a thorough comparative analysis of our peer group › Going forward we will differentiate between: › Maintenance capex › Special capex › M&A › Free cash flow will better represent the cash generation of our operations
Slide 101: Update to capex structure and terminology
Capital Expenditures Update to capex structure and terminology Maintenance capex Special capex M&A › Recurring maintenance › Fast Forward projects › M&A transactions investments › Organic growth › Health & Safety investments incl. green- and brownfield investments and line extensions › Digitalizatio
Slide 102: Capex bridge 2018
Capital Expenditures Capex bridge 2018 in € mn Total capex € 325.1 mn Purchase of non- 30.1 controlling interests 73.1 M&A Growth capex 158.9 91.7 Special capex Normal capex 166.3 130.3 Maintenance capex 2018 2018 102
Slide 103: Update to capex guidance for 2019
Capital Expenditures Update to capex guidance for 2019 Maintenance capex Special capex M&A ~ € 135 mn ~ € 120 mn H1 19 € 33.5 mn We continue to work on a highly attractive deal pipeline and expect to move ahead on a number of M&A opportunities Recurring Discretionary capex to maintenance capex drive
Slide 104: Clear drivers for free cash flow generation
Free cash flow Clear drivers for free cash flow generation Portfolio Profitability enhancement Capex optimization Free cash flow generation 104
Slide 105: Portfolio optimization: driver for profitability
Portfolio Optimization Driver for profitability and strategic development Portfolio analysis Businesses with unsatisfactory Core businesses profitability and growth potential Further development of profitable core Revenues € 350 mn activities based on our growth strategy Avg. EBITDA-margin <10% 105
Slide 106: Management of underperforming businesses
Portfolio Optimization Management of underperforming businesses M&A as catalyst › M&A opportunities have been identified as catalysts for repositioning certain businesses and unlocking the growth potential for repositioning › Examples: German and Austrian WBS organizations Repositioning within the ›
Slide 107: Target: € 150 mn value from disposals 2018-2020
Portfolio Optimization Target: € 150 mn value from disposals in 2018-2020 Disposals of non-core businesses Sale of non-operating assets › These businesses commonly show › Structured sale processes several of the following characteristics › Book value as of 30/6/2019: € 65 mn › Low growth and unsatis
Slide 108: Clear drivers for free cash flow generation
Free cash flow Clear drivers for free cash flow generation Portfolio Profitability enhancement Capex optimization Drive free cash flow generation 108
Slide 109: Significant impact on free cash flow
Free cash flow Significant impact on free cash flow › Free cash flow will better represent the cash Indicative impact on free cash flow 1) generation of our in € mn operations and the funds 300 available for capital 274 273 allocation 250 247 237 › Cash conversion 200 consistently exceeds 70% 182 16
Slide 110: Capital Allocation
CAPITAL ALLOCATION
Slide 111: Clear allocation priorities
Capital Allocation Clear allocation priorities Capital Allocation Return of capital Balance sheet Growth projects to shareholders management 111
Slide 112: Clear allocation priorities
Capital Allocation Clear allocation priorities Capital Allocation Return of capital Balance sheet Growth projects to shareholders management 112
Slide 113: Strong commitment to distributing capital
Return of capital to shareholders Strong commitment to distributing capital › Our commitment to dividend payments Strong increase of dividend per share 1) reflecting the performance in € improvement of our 0.50 businesses resulted in a significant increase of 0.50 dividends per share 0.50 0.40 0.30
Slide 114: Selective share buybacks complement dividend
Return of capital to shareholders Selective share buybacks complement dividend › Our progressive dividend is complemented by Substantial increase of capital returned to shareholders selective share buybacks in € mn › After buying back 2% of 100 share capital in 2018, we 82 retired 1% of shares in 80
Slide 115: Initiation of new share buyback
Return of capital to shareholders Initiation of new share buyback › New share buyback program commenced on September 10, 2019 Key data › We are targeting to buy up to 1% of share capital until November 29, 2019 Buyback 2019 shares 1,163,514 › After completing the buyback program we Percentage of sha
Slide 116: Update to guidance for distribution of capital
Return of capital to shareholders Update to guidance for distribution of capital Previous guidance Updated guidance Dividends Progressive dividend payout of 10-30% of free cash flow after Distribution of 20-40% hybrid coupon of free cash flow by means of a progressive Share annual dividend and Selec
Slide 117: Clear allocation priorities
Capital Allocation Clear allocation priorities Capital Allocation Return of capital Balance sheet Growth projects to shareholders management 117
Slide 118: Disciplined balance sheet management
Balance sheet management Disciplined balance sheet management › We are allocating free cash flow to reducing financial debt Strong equity ratio in-line with peers › We remain committed to our target for financial discipline: 52% Net debt / EBITDA < 2.5x at year-end 48% 45% (ex. hybrid capital) Disci
Slide 119: Balanced and diversified funding
Balance sheet management Balanced and diversified funding Diversified funding sources Balanced maturity profile (in € mn) 7% 600 Commercial 7% paper 45% Revolving Senior bonds 500 credit facility 8% 400 Money Undrawn credit lines market 300 200 11% Bank debt First-Call Date Hybrid 100 0 22% 2019 202
Slide 120: Further optimization of financing costs
Balance sheet management Further optimization of financing costs › We have a significant potential to further optimize financing costs › The corporate bond maturing in 2020 and the first call date of the hybrid bond in Coupon Volume Redemption / 2021 present attractive opportunities to Bonds (in %)
Slide 121: Intention to exercise first call option for hybrid
Balance sheet management Intention to exercise first call option for hybrid › We intend to exercise the first call option for the hybrid bond in 2021 › Call of outstanding volume at 100% › Strong balance sheet can easily Pro-forma impact 2018 2018 accommodate refinancing of equity incl. hybrid excl.
Slide 122: Clear allocation priorities
Capital Allocation Clear allocation priorities Capital Allocation Return of capital Balance sheet Growth projects to shareholders management 122
Slide 123: Focus on value creation and strategic development
Growth projects Focus on value creation and strategic development › Successful track record of value creating bolt-on acquisitions Strict capital discipline › Structured and disciplined approach to evaluation of 3.0 transaction targets 2.5x 2.5 › Financial headroom to move decisively on value- 2.0 F
Slide 124: Steady pipeline of bolt-on acquisitions
Growth projects Steady pipeline of bolt-on acquisitions Bolt-on acquisitions › Steady pipeline of bolt-on acquisitions, each with an enterprise value of below € 50 mn › Strategic focus on core regions and products to drive › Market consolidation › Improvement of market positions › Further developmen
Slide 125: Attractive opportunities to step beyond bolt-ons
Growth projects Attractive opportunities to step beyond bolt-ons Discretionary mid-sized acquisitions › More sizeable transactions in core businesses need to › Show strong strategic and cultural fit with manageable integration risk › Represent fundamental extensions to existing platforms or constitu
Slide 126: Executive Summary
EXECUTIVE SUMMARY
Slide 127: Performance
Performance Excellent progress on Fast Forward Program Confident in delivery of € 120 mn EBITDA enhancement Strong M&A track record below Group multiple EV/EBITDA multiple post synergies of ~5x Strict spending discipline Maintenance capex of € 120 - 140 mn 127
Slide 128: Value creation
Value creation Focus on free cash flow Strong commitment to disciplined financial policy Sustainable value creation for our shareholders Distribution of 20-40% of free cash flow 128
Slide 129: Growth
Growth Significant potential to drive organic growth through innovation and digital transformation Attractive deal-pipeline for discretionary bolt-on and mid-sized acquisitions 129
Slide 130: Wienerberger Investor Relations
Wienerberger Investor Relations Wienerbergstrasse 11 1100 Vienna, Austria T: +43 1 60 192 10221 investor@ Wienerberger.com