Wienerberger AG · VIE:WIE

Wienerberger — Shareholder Meeting (May 2015)

64 slides from Wienerberger's shareholder meeting presentation, May 22, 2015

  1. Slide 1: 146th Annual General Meeting of Wienerberger AG

    146th Annual General Meeting of Wienerberger AG May 22, 2015

  2. Slide 2: Disclaimer

    Disclaimer Cautionary note regarding forward-looking statements  The information contained in this document has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctn

  3. Slide 3: Overview Financial Year 2014

    Overview Financial Year 2014

  4. Slide 4: Successful year for Wienerberger

    Successful year for Wienerberger ► Sound increase in revenues and earnings ► Wienerberger generates record revenues and exceeds EBITDA goal in 2014 Revenue: Operating EBITDA 1): € 2,834.5 mn € 317.2 mn (2013: € 2,662.9 mn | +6%) (2013: € 266.5 mn | +19%) 1) Adjusted for non-recurring income and expe

  5. Slide 5: Business development in our Divisions

    Business development in our Divisions ► Clay Building Materials Europe  Substantial earnings increase in slightly growing market  Volume growth in all product groups  Successful cost optimization measures and integration of Tondach Gleinstätten ► Pipes & Pavers Europe  Stable earnings developmen

  6. Slide 6: Highlights 2014

    Highlights 2014 Restructuring program successfully completed  Fixed cost savings: € 50 mn Acquisition of controlling majority in Tondach Gleinstätten  Strong mid-term growth potential and increase of renovation share in revenues  Contribution to Group results > Revenues: € 87.3 mn > EBITDA: € 15.

  7. Slide 7: Highlights 2014

    Highlights 2014 ► Strengthening of Group financing structure  Successful exchange of hybrid bond > Exchange of € 272 mn of the 2007 hybrid bond for the new 2014 hybrid bond > Substantial interest in the exchange offer confirms strong confidence of our investors > Further step to protect strong capi

  8. Slide 8: Impairment charges

    Impairment charges ► Impairments relate exclusively to acquisitions and investments dating to 2009 ► Wienerberger records total impairment charges of € 208 mn  Impairments affect: USA, Germany, Italy, Russia, Estonia, Pipelife France and small markets on the periphery  Impairment charges to assets

  9. Slide 9: Dividend increase to € 0.15 per share and strong commitment to dividend policy

    Dividend increase to € 0.15 per share and strong commitment to dividend policy ► Supervisory Board and Management Board propose increase of dividend from financial year 2014 to the Annual General Meeting:  Proposed dividend: € 0.15 per share  Increase by 25% compared to prior year ► Strong commitm

  10. Slide 10: Results 2014

    mL Wienerberger Results 2014

  11. Slide 11: Revenue increase

    Revenue increase 3,000 +3% 2,834.5 +1% 2,800 +3% -1% 2,662.9 in € mn 2,600 2,400 2,200 Revenue 2013 Sales Volume Sales Price FX-Effect Tondach Revenue 2014 Gleinstätten Note: Rounding differences may arise from the automatic processing of data 11

  12. Slide 12: EBITDA by Segment

    EBITDA 1) by Segment 340 26.6 7.5 1.2 317.2 320 -1.9 -7.4 300 24.7 280 in € mn 266.5 260 240 220 200 EBITDA 2013 CBM CBM P&P P&P North Holding & EBITDA 2014 WE EE WE EE America Others 1) Adjusted for non-recurring income and expenses Note: Rounding differences may arise from the automatic processing

  13. Slide 13: Income statement 2014

    Income statement 2014 in € mn 2013 2014 Chg. in % Revenues 2,662.9 2,834.5 +6 Operating EBITDA 1) 266.5 317.2 +19 Depreciation -211.2 -217.0 -3 Operating EBIT 1) 55.3 100.2 +81 Impairment charges to assets 0.0 -100.7 -100 Impairment charges to goodwill 0.0 -106.9 -100 Release of provision for antitr

  14. Slide 14: External input factors influence impairments

    External input factors influence impairments ► Assets and goodwill are tested for indications of impairment as part of the corporate planning process and as required by triggering events ► The weighted average cost of capital (WACC) used for impairment testing increased despite low interest environm

  15. Slide 15: Changes in corporate planning lead to impairment charges: USA, Germany

    Changes in corporate planning lead to impairment charges ► USA  Reasons: > Recovery of residential construction progresses more slowly than expected > Mid-term planning assumptions adjusted for market growth forecasts and sustained price pressure  Effects: > Assumptions for normalized level of hou

  16. Slide 16: Changes in corporate planning lead to impairment charges: Italy

    Changes in corporate planning lead to impairment charges ► Italy  Reasons: > Double digit decline of housing market activity in 2014 | No short-term turnaround expected > Italian brick industry shows significant overcapacity  Effects: > Measures to improve profitability are being implemented > Imp

  17. Slide 17: Cash flow development

    Cash flow development in € mn 2013 2014 Chg. in € mn Chg. in % Gross cash flow 164.6 225.5 +60.9 +37 Change in working capital 1) 26.2 -10.1 -36.3 <-100 Normal capex -106.0 -121.8 -15.8 -15 Divestments and other 8.0 36.9 +28.9 >100 Free cash flow 92.9 130.6 +37.7 +41 Growth capex 2) -0.7 -18.1 -17.4

  18. Slide 18: Development of net debt

    Development of net debt 700 97.2 621.5 600 538.9 163.1 13.7 500 -23.2 400 44.1 in € mn 13.3 300 -225.5 200 100 0 31/12/2013 Gross Cash Flow Paid / Received Hybrid coupon Total investments Change in Working Capital & Consolidation 31/12/2014 Dividends 1) treasury shares Others Tondach 2) 1) Including

  19. Slide 19: 2014 hybrid bond and new credit line

    2014 hybrid bond and new credit line ► Successfull exchange of hybrid bond  Further step to protect strong capital structure  Exchange of € 272 mn of existing 2007 hybrid bond for new 2014 hybrid bond  2014 hybrid bond has an interest rate of 6.5% up to 2017 and thereafter of 5.0% up to the first

  20. Slide 20: Strong liquidity and balanced financing structure

    Strong liquidity and balanced financing structure ► Cash 31/12/2014: € 275.2 mn ► Financing profile: 700 600 500 Credit lines in € mn 400 300 200 Hybrid Hybrid 100 2007 2014 0 2015 2016 2017 2018 2019 2020 2021 WB Maturities Cash Balance Undrawn credit lines until 2019 First-Call Date Hybrid Bond ►

  21. Slide 21: Sale of non-operating assets

    Sale of non-operating assets ► Cash inflow 2014: € 14.3 mn Sale of non-operating assets ► EBITDA-contribution 2014: € 8.4 mn 120 ► 2012-2014 non-operating assets worth 100 100 € 36.5 mn were sold 80 ► Until end of 2016 additional ~ € 64 mn to be realized 60 40 36.5 20 0 in € mn Since 2012 Target 201

  22. Slide 22: Balance sheet as of 31/12/2014

    Balance sheet as of 31/12/2014 in € mn 31/12/2013 31/12/2014 Non-current assets 2,662.5 2,557.5 thereof property, plant and equipment 1,663.3 1,646.3 Current assets 1,548.8 1,355.9 thereof cash and cash equivalents 496.7 275.2 Balance sheet total 4,211.4 3,913.4 Equity 1) 2,254.2 2,046.8 Non-current

  23. Slide 23: Strong balance sheet

    Strong balance sheet in € mn 31/12/2012 31/12/2013 31/12/2014 Chg. in % Equity 1) 2,364 2,254 2,047 -9 Net debt 602 539 622 +15 Equity ratio 57% 54% 52% - Gearing 26% 24% 30% - ► Change in net debt:  Consolidation of Tondach Gleinstätten 1/7/2014: € 97.2 mn ► Strong equity ratio of 52 % 1) Includin

  24. Slide 24: Individual financial statement of the Wienerberger AG

    Individual financial statement of the Wienerberger AG

  25. Slide 25: Wienerberger AG serves as holding company of the Wienerberger Group

    Wienerberger AG serves as holding company of the Wienerberger Group ► Wienerberger AG is the parent company of the Wienerberger Group ► As such Wienerberger AG fulfills the functions of a holding company  Strategic development of the Wienerberger Group  Strategic management of the business units 

  26. Slide 26: Balance sheet of Wienerberger AG as of 31/12/2013 (according to UGB)

    Balance sheet of Wienerberger AG as of 31/12/2013 (according to UGB) in € mn 31/12/2013 31/12/2014 Property, plant and equipment 3,865.5 3,639.1 Current assets 789.6 578.0 thereof cash and bank balances 101.2 22.9 Deferred expenses and accrued income 4.1 2.9 Balance sheet total 4,659.2 4,220.1 Equit

  27. Slide 27: Income statement 2014 of Wienerberger AG (according to UGB)

    Income statement 2014 of Wienerberger AG (according to UGB) in € mn 2013 2014 Revenues 37.8 42.3 EBIT -15.7 -6.7 Financial results 38.9 42.0 Profit before tax 23.2 35.2 Taxes and reversal of untaxed reserves -5.8 -16.8 Net profit for the year 17.4 18.5 ► Positive financial results due to income from

  28. Slide 28: Proposal for the use of profit available for distribution 2014

    Proposal for the use of profit available for distribution 2014 in € mn 2013 2014 Net profit for the year 17.4 18.5 Profit carry forward of previous year 1.3 5.0 Profit available for distribution 18.8 23.4 Divided payment less treasury stock 13.8 17.5 Profit carry forward 5.0 5.9 ► Divided proposal:

  29. Slide 29: Wienerberger share

    mL Wienerberger Wienerberger share

  30. Slide 30: WIE vs. Peer Index & ATX

    WIE vs. Peer Index* & ATX 1/1/2014-30/4/2015 15 +26% 1,400,000 14 1,200,000 13 +12% 1,000,000 12 800,000 11 600,000 10 400,000 +2% 9 200,000 28.11.2014 8 0 01/14 03/14 05/14 07/14 09/14 11/14 01/15 03/15 05/15 Volume (RHS) Wienerberger Peer Index ATX * Peer Index consists of: Lafarge, Imerys, CRH, S

  31. Slide 31: Q1 2015

    ; MN Wienerberger Q1 2015

  32. Slide 32: Revenue and earnings increase

    Revenue and earnings increase Revenue: Operating EBITDA 1): € 612.5 mn € 34.0 mn (Q1 2014: € 584.6 mn | +5%) (Q1 2014: € 28.1 mn | +21%) Net debt: Build-up Working Capital: € 841.1 mn € 182.2 mn (31/3/2014: 733.1 Mio. € | +15 %) (31/3/2014: € 150.1 mn | +21%) 1) Adjusted for non-recurring income and

  33. Slide 33: Business development in our Divisions

    Business development in our Divisions ► Clay Building Materials Europe  Moderate increase in revenues  Consolidation contribution from Tondach Gleinstätten ► Pipes & Pavers Europe  Organic growth and an increase in the international project business lead to substantial earnings increase at Pipeli

  34. Slide 34: Outlook 2015

    mL Wienerberger Outlook 2015

  35. Slide 35: Slight increase in housing starts in Europe | Growth in USA

    Slight increase in housing starts in Europe | Growth in USA Mountain Region Midwest Mid-Atlantic +7% +5% +5% +9% +1% -2% +2% +1% -2% +8% -5% -3% +3% Southeast Source: Management estimate (housing starts) -7% +5% Market growth (>2 %) Stable development Market decline (<-2 %) Source: Management estima

  36. Slide 36: Moderate growth in RMI spending

    Moderate growth in RMI spending +3% +3% +1% +3% +3% +3% 0% +3% -2% +1% +3% +1% +1% +3% Market growth (>2 %) Stable development Market decline (<-2 %) Source: Euroconstruct November 2014 (RMI spending in residential construction) 36

  37. Slide 37: Clay Building Materials Europe: Outlook 2015

    Clay Building Materials Europe: Outlook 2015 ► Stable to slightly positive development of European residential construction activity ► Moderate volume increase ► Price increases in line with cost inflation ► Implementation of measures to optimize the cost structure and improve the efficiency of inte

  38. Slide 38: Pipes & Pavers Europe: Outlook 2015

    Pipes & Pavers Europe: Outlook 2015 ► Pipelife  Volume increase in Nordic markets | Currency devaluation burdens earnings | Proactive measures in the areas of procurement, production and distribution to overcome shortage of raw materials and cost increases  Strong international project business 

  39. Slide 39: North America: Outlook 2015

    North America: Outlook 2015 ► Bricks  Continued market recovery in new residential construction of single- and two-family houses in the USA and market stabilization in Canada  Continuation of a challenging price environment in some regional markets ► Plastic Pipes  Stable development of demand 

  40. Slide 40: Wienerberger Group: Outlook 2015

    Wienerberger Group: Outlook 2015 Group-EBITDA ~ € 350 mn Tondach Contribution ~ € 8 mn consolidation effect in H1 15 (part of EBITDA-target) Real Estate Sales ~ € 10 mn EBITDA contribution (part of EBITDA-target) Price | Costs ~ 1.0% price increase | ~ 1.5% cost inflation Depreciation ~ € 220 mn Int

  41. Slide 41: Wienerberger Development & Strategy

    Wienerberger Development & Strategy

  42. Slide 42: Wienerberger is an international system building materials supplier

    Wienerberger is an international system building materials supplier with a strong base in Europe India, Russia and Turkey (4%) Europe (88%) North America (8%) 42

  43. Slide 43: Today, we are not only market leader in the brick business…

    Today, we are not only market leader in the brick business… WALL SOLUTIONS ROOF SOLUTIONS FACADE SOLUTIONS 43

  44. Slide 44: …but also supplier of pipe systems and pavers…

    …but also supplier of pipe systems and pavers… WALL SOLUTIONS ROOF SOLUTIONS FACADE SOLUTIONS CERAMIC PIPES PLASTIC PIPES PAVERS 44

  45. Slide 45: …with leading positions worldwide

    …with leading positions worldwide Clay blocks: Nr. 1 worldwide Facing bricks: Nr. 1 in Europe, Co-Leader in the USA Clay roof tiles: Nr. 1 in Europe Plastic pipes: Leading positions in Europe Ceramic pipes: Nr. 1 in Europe Concrete pavers: Nr. 1 in Central-East Europe 45

  46. Slide 46: Our products contribute to great accomplishments

    Our products contribute to great accomplishments: One new city and 11x around the world 143,000 242,000 470,000 12,700,000 homes built roofs covered km pipes installed m² pavers laid 46

  47. Slide 47: Strong diversified industrial base drives revenue growth

    As a result of our strong and diversified industrial base we realize revenue growth Revenues Revenues 2007 Revenues by Product2013 Revenues 3,000 2,834.5 2,500 2,000 1,663.9 1,500 1,000 500 0 in € mn 2010 2014 2010 2014 47

  48. Slide 48: Growing faster than the market…

    Through the expansion of our core business we are growing faster than the market… ► Wienerberger recorded an average revenue growth rate of 14.3% between 2010 and 2014 ► Growth rate for single- and two-family housing starts equaled 3.4% during the same period 2010 2011 2012 2013 2014 Housing starts

  49. Slide 49: …and increasing Group EBITDA for the fifth time in a row in 2015

    …and are increasing Group EBITDA for the fifth time in a row in 2015 ► Bundle of measures supports organic growth  Fixed cost savings of € 250 mn  Holding cost reduction by 19% between 2010 and 2014  Focus on Operational Excellence 350 317 267 240 246 198 2010 2011 2012 2013 2014 2015e 49

  50. Slide 50: Two success factors for sustainable growth

    Two success factors for sustainable growth ORGANIC GROWTH POTENTIAL  Utilize existing capacity and capitalize on operational leverage GROWTH INVESTMENTS 50

  51. Slide 51: Great Britain confirms organic growth potential

    Great Britain confirms organic growth potential ► Wienerberger uses market recovery for sound increase in revenues and earnings since 2012  Housing starts 2012-2014: +39% | Revenues 2012-2014: +60% 17 %  Operating results reach record level in 2014  Residential construction still 20% below a norm

  52. Slide 52: Two success factors for sustainable growth

    Two success factors for sustainable growth ORGANIC GROWTH POTENTIAL  Utilize existing capacity and capitalize on operational leverage  Innovative products and system solutions 52

  53. Slide 53: Success story Infilled clay block

    Success story Infilled clay block ► Innovation leadership through ongoing product development ► Continuous roll-out 2001 ► Strengthening of marketing and 2014 sales activities ► Increasing share of 2013 total clay block revenues  Share of revenues in 2014: > Bavaria: 53% > Austria: 9% Production of

  54. Slide 54: International project business

    International project business Special solutions for a global market Long Length Large Diameter Pipes (LLLD)  Pipes for industrial facilities | Diameter of up to 2,5 m | Length of up to 600 m Soluforce  High pressure applications in the oil and gas industry Reference countries 54

  55. Slide 55: Two success factors for sustainable growth

    Two success factors for sustainable growth ORGANIC GROWTH POTENTIAL  Utilize existing capacity and capitalize on operational leverage  Innovative products and system solutions  Cost and technology leadership 55

  56. Slide 56: Operational Excellence

    Operational Excellence Higher profitability through our internal strength PLANT IMPROVEMENT PROGRAM (PIP) ENERGY EFFICIENCY SUPPLY CHAIN MANAGEMENT LEAN SIX SIGMA 56

  57. Slide 57: Plant Improvement Program (PIP)

    Plant Improvement Program (PIP) Continuous improvement of processes Uniform production management standard Streamlining the organization Qualification profile for managers Working conditions and safety standards Optimize technical processes 45 plants were included in the program at year-end 2014 Tar

  58. Slide 58: Energy Efficiency

    Energy Efficiency Reduction of energy use and CO² emissions Reduction of energy use in the drying and firing process Recycling of waste heat Reduction in breakage rate Optimization of products Innovative process technologies Reduction of specific energy use by 2 % – 3 % annually Target: Reduce speci

  59. Slide 59: Two success factors for sustainable growth

    Two success factors for sustainable growth ORGANIC GROWTH POTENTIAL GROWTH INVESTMENTS  Selective, value creating growth projects  Diversification of product portfolio  Clear financial criteria 59

  60. Slide 60: Clear strategic goals for growth projects

    Clear strategic goals for growth projects DEPENDENCE ON RENOVATION AND NEW RESIDENTIAL INFRASTRUCTURE CONSTRUCTION BROADENING OF DEVELOPMENT CAPACITY ACQUISITIONS PRODUCT OF REGIONAL EXPANSION PORTFOLIO MARKETS GROUP-WIDE CFROI TARGET OF 11.5% 60

  61. Slide 61: Realization of value-creating growth investments

    Realization of value-creating growth investments Steinzeug-Keramo Pipelife Ceramic pipes Plastic pipes CFROI 2014: 15% CFROI 2014: 18% 2010 2011 2012 2013 2014 Tondach (50%) Tondach (82%) Clay roof tiles Clay roof tiles CFROI 2014: 13% CFROI 2014: 13% Share of revenues from residential new build dec

  62. Slide 62: Clear growth strategy for each business unit

    Clear growth strategy for each business unit CLAY BUILDING PIPES & PAVERS NORTH AMERICA MATERIALS EUROPE EUROPE  Focus on organic growth  Organic growth potential  Evaluate growth projects to  Smaller bolt-on projects  Industry consolidation complement product expected portfolio / regional cove

  63. Slide 63: Our medium-term goals

    Our medium-term goals 2015 Medium-term planning Revenue development 5 4 GROUP REVENUES GROUP REVENUES in € bn 3 ~ € 3 bn 2 ~ € 4 bn 1 0 EBITDA development 700 GROUP EBITDA 600 GROUP EBITDA 500 in € mn 400 ~ € 350 mn 300 > € 600 mn 200 100 0 < 2.5x Net debt / op. EBITDA < 2.0x 63

  64. Slide 64: Thank you for your attention!

    Wienerberger Investor Relations Wienerberger AG, A-1100 Vienna, Wienerberg City, Wienerbergstrasse 11 T +43 1 60192 10221 / F +43 1 60192 10425, [email protected] / www.wienerberger.com Thank you for your attention!

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