Investor & Analyst Meeting Wienerberger 2010 at a Glance | Results 2010 & Financing | Wienerberger Markets 2010 | Strategy | Outlook 2011 | Dividend
February 22, 2011
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2
2010: Turnaround Achieved
Restructuring completed - Action Plan 2009 implemented | no further measures in 2010 - Fixed cost savings of € 35 mn in 2010
Slight increase in EBITDA despite weak weather-related start and end of the year and proactive pricing policy in CEE - EBITDA 2010: € 210.8 mn (+1%)
Broadening of core business – reorganization of industrial portfolio - Acquisition (100%) of Steinzeug Keramo (ceramic sewage pipes) - Acquisition of the remaining 25% stake in Semmelrock (concrete pavers) - Reorganization of roof tile investments in Central-East Europe 3
Reorganization of Roof Tile Investments in Central-East Europe
Wienerberger takes over additional 25% of Tondach Gleinstätten from Monier and transfers its 50% stake in Bramac to Monier
Wienerberger receives cash payment of € 40 mn Transaction is subject to the approval from the antitrust authorities Products
Stake before transaction
Stake after transaction
Consolidation
Clay roof tiles
25%
50%
proportionate consolidation
Concrete roof tiles
50%
0%
deconsolidation
Stronger position in clay roof tiles in Central-East Europe Strengthens position in renovation market 4
Tondach Gleinstätten
Producer of clay roof tiles with 19 plants in 11 countries
50% Wienerberger | 50% family-owned Excellent position in growth markets Modern and efficient plant network 2010: € 180 mn 1) revenues | 2,327 employees - Weak market environment - Declining revenues and earnings - Start-up of new capacities in Hungary and Czech Republic Joint development through bundling of our strengths
1) Total revenues (100%) 5
Semmelrock Leading supplier of high-quality concrete pavers in Central-East Europe
Modern and efficient plant network - 19 plants in 8 countries + 3 export markets - 7 new plants within the last two years Wienerberger held a 75% stake since 1996 – acquisition of the remaining 25% in October 2010 2010: € 127 mn revenues | 983 employees - Significant increase in sales volumes despite weak markets
- Revenues and earnings on prior year level - Market positions strengthened
Semmelrock plants Semmelrock export markets
6
Pipelife One of the leading international suppliers of plastic pipe systems
26 plants in 18 countries (Europe, USA) 50/50 joint venture with Belgian partner Solvay
At-equity consolidated – not included in operating results
2010: € 716 mn revenues | 2,596 employees - Slight increase in revenues | nearly stable EBITDA
- Lower contribution to net income from associates as profit after tax is affected by restructuring costs Pipelife plants Pipelife sales offices
7
Steinzeug-Keramo Operating worldwide; Europe’s largest producer of ceramic sewage pipe systems
3 plants (2 in Germany and 1 in Belgium) Acquired end of 2010 to strengthen business segment pipe systems
Need for renovation in Western European markets | pent-up demand in CEE – extensive enlargement of public sewage network
Realization of synergies 2010: € 73 mn revenues | 400 employees
Steinzeug-Keramo plants Steinzeug-Keramo markets
8
Wienerberger Benefits from a Strong Operational Basis
Leading market positions in core businesses Modern, efficient plant network Sound capital structure - Gearing of only 15%
Premium, innovative product portfolio - Infill blocks | plane ground blocks | sturmFIX
High level of system competence - Dryfix® system | e4 housing concept
Strong customer orientation
Focus on growth 9
Results 2010 | Financing
10
Income Statement in € mn
2009
Revenues
2010 Chg. in %
1,816.9
1,744.8
-4
208.6
210.8
+1
11.5%
12.1%
+5
189.6
200.1
+6
Restructuring costs 2)
-153.7
0.0
>100
Impairment charges to goodwill
-123.3
0.0
>100
EBIT
-258.1
10.7
>100
Financial results
-37.5
-51.5
-37
Profit before tax
-295.6
-40.8
+86
-258.7
-34.9
+87
Operating EBITDA 1) Operating EBITDA margin Depreciation
Profit after tax 3) 1) Before restructuring costs and impairment charges to property, plan and equipment and goodwill 2) Including impairments of assets
3) Before non-controlling interests and accrued hybrid coupon 11
Results 2010 by Region Revenues: € 1,744.8 mn | -4% North America 8%
Investments & Other -1%
EBITDA: € 210.8 mn | +1% Central-West Europe 17%
North America 2% Investments & Other
CentralEast Europe 30%
CentralWest Europa 22%
NorthWest Europe 41%
-14%
CentralEast Europe 41%
NorthWest Europe 54%
12
Results 2010 by Product Revenues: € 1,744.8 mn | -4%
EBITDA: € 210.8 mn | +1% Surface 11%
Surface 11%
Wall 36%
Investments & Other -13%
Wall 37%
Facade 21%
Facade 28%
Roof 25%
Roof 44%
13
Change in Revenues 2010 vs. 2009 1,816.9 +2%
-1%
1,744.8
-5%
-4% Lower average prices due to
proactive pricing policy in CEE to increase market share
disproportionate share of (cheaper) commodities
response to aggressive pricing by the competition in the USA and Germany
Revenues 2009
Volume Price Development Development
FX
Revenues 2010
Note: in € mn 14
Change in EBITDA by Region 2010 vs. 2009 +17.8
210.8
208.6 +10.6
+3.3
North-West Europe
Central-West Europe
+1%
-6.8
-22.7
EBITDA 1) 2009
Central-East Europe
North America
Investments & Other
EBITDA 2010
Note: in € mn 1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill 15
Lower Income from Investments (Pipelife, Tondach) Reduces Financial Results in € mn Income from investments in associates Interest and similar income Interest and similar expenses Other financial results Financial results
2009
2010 Chg. in %
6.1
-4.3
100
Change in working capital 1)
238.4
79.1
-159.3
-67
Maintenance capex
-62.7
-61.7
+1.0
+2
22.6
8.1
-14.5
-64
Free cash flow
250.8
176.8
-74.0
-30
Growth investments
-71.4
-88.1
-16.7
-23
Dividend / hybrid coupon 2)
-29.1
-29.5
-0.4
-1
Net cash flow
150.3
59.2
-91.1
-61
Divestments and other
1) Adjusted for changes in the consolidation range 2) Including paid hybrid coupon, changes in non-controlling interests and dividend payments from associates 18
Total Investments of approx. € 150 mn
in € mn
2009
2010 Chg. in %
Maintenance capex
62.7
61.7
-2
in % of depreciation
33%
31%
-
Growth investments
71.4
88.1
+23
Total investments
134.1
149.8
+12
19
Net Debt Further Reduced in 2010
500
+32.5 408.0
+149.8 374.5
400
in € mn
-64.5 300
-151.3 200
100
0 Net debt 31/12/2009
Gross cash flow
Total investments
Dividend and hybrid coupon
Working capital & others
Net debt 31/12/2010
20
Covenants Renegotiated
Beginning of 2011: renegotiation of covenants Agreement on two new key figures: - Net debt / operating EBITDA 1) < 3.5 - Operating EBITDA 1) / interest results > 3.75
Covenants for Wienerberger of minor importance - Valid only for outstanding bank debt of approx. € 120 mn
Tested twice per year (HY | FY) New covenants reflect seasonality and cyclical character of building material business Note: for bank covenants, hybrid capital is considered 100% equity; hybrid coupon is not interest 1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill 21
Financial Homework Done
Cash: € 453 mn Strong capital structure Favorable term structure and debt portfolio 400 in € mn
300 200 100 0 2011
2012
2013
2014
>2015
Goal: maintain financial discipline Note: term structure excluding holding cash; cash and financial liabilities as of 31/12/2010 22
Wienerberger Markets 2010
23
Regions at a Glance
Central-East Europe - Further significant decrease in demand for building materials - Proactive pricing policy to gain market shares - Amount of premium products increased
Western Europe - Stable or slightly positive development in Western Europe - Exceptions: significant decline in the Netherlands and Scandinavia
North America - Ongoing difficult market environment - Positive effects from restructuring measures and better capacity utilization 24
Central-East Europe (1) Results 2010 Central-East Europe (in € mn)
2009
2010
Chg. in %
Revenues
582.7
531.7
-9
108.8
86.1
-21
18.7%
16.2%
-
-29.8
20.6
>100
Operating EBITDA
1)
Operating EBITDA margin EBIT
Share of Group revenues 2010
Share of Group EBITDA 2010
30%
41%
1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill
Poland - Weather-related drop in demand in H1 | significant increase of volumes in H2 due to successful proactive pricing policy
Czech Republic | Slovakia - Housing starts still declining | strengthening market position with proactive pricing policy and focus on premium products
25
Central-East Europe (2) Results 2010 Central-East Europe (in € mn)
2009
2010
Chg. in %
Revenues
582.7
531.7
-9
108.8
86.1
-21
18.7%
16.2%
-
-29.8
20.6
>100
Operating EBITDA
1)
Operating EBITDA margin EBIT
Share of Group revenues 2010
Share of Group EBITDA 2010
30%
41%
1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill
Hungary - Ongoing difficult market environment | positive EBITDA due to extensive capacity adjustments
Romania | Bulgaria - Further decline in new residential construction | Wienerberger strengthens market position
26
Product Innovation Clay Blocks: Wienerberger DRYFIX System
Launch: 2007 in Austria Vigorous growth despite crisis 2010: launch of Dryfix extra Czech Republic
Austria
+116% +46% +266%
+59%
2008
2009
2010
2008
2009
2010
Note: figures repesent volume development of plane ground blocks with Dryfix 27
Wienerberger DRYFIX System: Geographical Expansion and Market Potential Successful introduction in Austria, Czech Republic, Slovenia, Croatia, Slovakia, Hungary, Poland and France
Volume share in plane ground blocks: Czech Rep.
2008
2009
2010
2015
Start: 10%
35%
60%
80%
Start: 30%
50%
80%
25%
40%
80%
Start: 100%
100%
100%
Hungary Austria
Start: 10%
Slovenia
Pending approval procedures in: - Italy, Germany, Switzerland
Dryfix already sold Pending approval procedures 28
North-West Europe (1) Results 2010 North-West Europe (in € mn)
2009
2010
Chg. in %
Revenues
729.2
716.4
-2
Operating EBITDA
1)
Operating EBITDA margin EBIT
102.5
113.1
+10
14.1%
15.8%
-
-41.1
44.6
>100
Share of Group revenues 2010
Share of Group EBITDA 2010
54%
41%
1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill
Belgium - Flat housing starts | sound renovation market | stable facing brick and roof tile volumes | stable prices | optimization of plant network and better capacity utilization | improvement in margins
Netherlands - Difficult market environment | lower facing brick and clay paver volumes | only slightly declining volumes in the roof segment | lower average prices trigger declining margins 29
North-West Europe (2) Results 2010 North-West Europe (in € mn)
2009
2010
Chg. in %
Revenues
729.2
716.4
-2 +10
Operating EBITDA
1)
Operating EBITDA margin EBIT
102.5
113.1
14.1%
15.8%
-
-41.1
44.6
>100
Share of Group revenues 2010
41 %
Share of Group EBITDA 2010
54 %
1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill
France - Slight increase in housing starts | clay blocks gain further market share | new clay block plant strengthens market position in western France | slight volume increase in roof tiles | higher capacity utilization triggers increase in margins
Great Britain - Strong momentum during Q1 – Q3 | weakness in Q4 reinforced by severe winter weather | substantial increase in facing brick and roof tile volumes | better capacity utilization | earnings improved despite lower average prices 30
Wienerberger as ”One-stop Shop” for Roofers KoraTech® Technical Roof Accessories KoraTech:
Enlargement of the Wienerberger product portfolio through technical fittings
Non-ceramic, technical accessories for the roof 1
2
Ridge and hip roll 6
Ventilation system
3
Snow retention
7
Storm fixation
Solar system
8
Chimney connection roll
4
Valley 9
Roof inspection
5
Underlay 10
11
Eave
Roof window
31
KoraTech® – Rationale and Potential
Started in 2006 in the Benelux | meanwhile distributed in all clay roof tile markets +20%
Objectives:
+38%
- System approach – “one-stop shop” for the roofer
- Create higher revenues per m2 roof
Currently about 4% of clay roof tile
2009
2010
2011e
revenues
Offers growth potential of 10% p.a. in the mid-term Note: figures represent revenue development of KoraTech® 32
Central-West Europe Results 2010 Central-West Europe (in € mn)
2009
2010
Chg. in %
Revenues
391.1
384.4
-2
32.3
35.6
+10
Operating EBITDA
1)
Operating EBITDA margin
8.3%
9.3%
-
EBIT
-62.3
1.5
>100
Share of Group revenues 2010
Share of Group EBITDA 2010
17% 22%
1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill
Germany - Moderate recovery in new residential construction | drop of exports to CEE intensifies competitive and price pressure | double-digit growth in sales volumes of infill blocks | positive development of renovation market | earnings reached prior year level
Italy
- Further decline in housing starts | structural overcapacity | ongoing pressure on prices | decline in margins | focus on premium products
Switzerland - Stable volumes and prices | increase in earnings 33
Product Innovation Clay Blocks: Infill Blocks
Clay blocks filled with Perlite (volcanic material) or mineral wool
Integrated insulation – no additional insulation material needed
Example: volume development in Germany +17% +25%
2008
2009
2010
Note: figures represent volume development of plane ground blocks with thin-bed mortar 34
North America Results 2010 North America (in € mn)
2009
2010
Chg. in %
Revenues
149.0
144.5
-3
-13.3
4.5
>100
-8.9%
3.1%
-
-97.8
-22.2
+77
Operating EBITDA
1)
Operating EBITDA margin EBIT
Share of Group revenues 2010 8%
Share of Group EBITDA 2010 2%
1) Before restructuring costs and impairment charges to property, plant and equipment and goodwill
USA - Still difficult market environment - 6% increase of housing starts to 586,000 units compared to 2009 record low (NAHB) - Positive effects from restructuring measures - Substantial improvement in capacity utilization (~50%) brings break even Canada - Slight improvement of market environment | positive development Arriscraft 35
Wienerberger Strategy
36
Capacity Development 2007 – 2010 Spare Mothballed Capacity
Closed
Clay blocks
8%
~30%
-13%
Roof tiles
0%
~30%
-2%
30%
~30%
-32%
0%
~20%
0%
Facing
bricks1)
Pavers 1)
New
Capacity change
CEE, France, +23% Germany, India
+10%
+12% Sandtoft
+10%
+22% Baggeridge, CEE
-10%
+50% Concrete pavers CEE
+50%
Data includes 2006 and 2007
Modern efficient plant network Huge operational leverage from spare and mothballed capacity Strong operational base in the right markets 37
Core Elements of Wienerberger Strategy
Focus on value based (CFROI > 11.5%) growth: - Internal (innovative products | system solutions | operational leverage) - External (strengthen and broaden position in core markets | strengthen position in renovation segment)
Financial discipline Returns used for investments and dividend payout Remuneration of Top Management linked with short- and longterm performance goals (earnings, CFROI targets)
38
Wienerberger Product Portfolio Strong exposure to new built and private sector: New built Clay blocks
Renovation Roof
Facing bricks
Private sector
Public sector
Infrastructure
Clay blocks
Pavers
Pavers
Facing bricks
Pipes*)
Pipes*)
Roof
GROUP (in % of revenues)
70%
30%
75%
25%
€ 500 mn Keep strong balance sheet Group CFROI > 11.5%
46
Wienerberger Investor Relations Wienerberger AG, A-1100 Vienna, Wienerbergstrasse 11 Tel +43 1 60192 - 471, Fax +43 1 60192 - 466
[email protected] | www.wienerberger.com
47
Appendix: Wienerberger Group Wienerberger at a Glance | Shareholder Structure | Product Groups | Market Positions | Competitive Advantage
48
Wienerberger at a Glance
International building materials group - 27 countries + 5 export markets - 229 plants in Europe, North America and India
Founded 1819 in Vienna Switzerland 8%
Shareholder structure:
Other 6%
USA 36%
France 6%
- 100% free float - One major international investor disclosed: Dodge & Cox, USA owns more than 10% of Wienerberger shares
Northern Europe 7% Germany 4% Canada 2%
Austria 12% UK & Ireland 19%
Status: July 2010 | 117.5 mn shares issued 49
Wienerberger Product Groups
Clay blocks (Wall)
Roof tiles (Roof)
Facing bricks (Facade)
Pavers (Surface)
Pipe systems
No. 1 worldwide
No. 1 in Europe 1)
No. 1 in Europe, CoLeader in USA
Leading positions in Europe
Leading positions in Europe
Revenues: € 625mn EBITDA: € 78mn
Revenues: € 441mn EBITDA: € 93mn
Revenues: € 487mn EBITDA: € 43mn
Revenues: € 192mn EBITDA: € 23mn
Revenues: € 73mn EBITDA: € 6mn 50% Pipelife at equity
Source: Company information; operating figures refer to FY2010 1) Concerning clay roof tiles
Revenues: € 358mn EBITDA: € 28mn 50
Leading Positions in Core Business
Wall systems – No. 1 worldwide
Roof systems – No. 1 in Europe1)
Facade – No. 1 in Europe; Co-leader in the USA
Surface – Leader in Europe
1) Concerning clay roof tiles 51
Wienerberger Brick Markets in Europe 1
Europe (total): No. 1
1
1
Clay Blocks: - No competing international groups - Mainly family businesses (local producers) - Wienerberger the only multinational player
2
33
- Family businesses (local producers) as - CRH and HeidelbergCement in selected countries
1
11 1
Facing Bricks: main competitors
1
2 1
1
1
1 1
4
1
1
1 1 1 1 1
1
1 1 1 1 1 11 1 41 1
1
1
1
Wienerberger plants Wienerberger export markets #
Market positions with clay blocks and / or facing bricks
52
Wienerberger Roofing Markets in Europe
1
Europe (total): No. 1 in clay roof tiles
1 1 1
Major competitors: Monier (formerly
3
Lafarge Roofing), Etex, Imerys, Terreal
1
competitors in Germany
4
2
1
2
2
11 1
Some privately owned mid-size
1 1
1
1 1 1 1 1 11 1 1 1 1 11 1 1
11
1
4 Wienerberger plants Wienerberger export markets JV Tondach Gleinstätten (50%) * #
Market positions in clay roof tiles and / or concrete roof tiles * Subject to the approval of the stock swap Bramac – Tondach by the antitrust authorities
53
Wienerberger Brick Markets in North America
USA: 5 major players totaling ~65% of market share
Quebec
Main competitors:
Ontario
Boral, ACME, HeidelbergCement and CRH
1
Canada: Market entry in 2007
Midwest 20%
5
1 West 3%
6 2
3
1
1
Southwest 20%
3
2
2
1
1
1
4
5 6
4
3
1
1 6
Northeast 7%
3
2
1
Southeast 50%
4 Note: Data below regions = share of total brick consumption within USA # Market positions with facing bricks
54
Competitive Advantage of Wienerberger in the Brick Industry Cost Leadership
Leadership in technology Economies of scale Fast adaptation of fixed cost base to market conditions
Know-How Transfer
Transfer of engineering know-how across operations Leverage innovation process and subsequent roll-out across markets
Efficient Plant Network
Optimization of plant network (transportation radius, capacity optimization, capacity
Customer Access
Better and direct access to customers Adaptations to local preferences
Brand Recognition
High market recognition for Wienerberger products Premium relationships with large building materials distributors
Capital
Better access to capital compared to small local players Strong balance sheet as well as balanced financial portfolio and term structure
adjustments)
Offering broad product range
55
