EQS-News: Wienerberger AG: Wienerberger reports strong start to first quarter of 2023

EQS-News: Wienerberger AG / Key word(s): Quarterly / Interim Statement
Wienerberger AG: Wienerberger reports strong start to first quarter of
2023

11.05.2023 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.

══════════════════════════════════════════════════════════════════════════

Wienerberger reports strong start to first quarter of 2023

Highlights

• Challenging macroeconomic environment, rising mortgage rates and high
inflation lead to weakening of end markets
• Sales development in line with expectations
• Stable Q1 2023 revenues at Group level of € 1,052 million (Q1 2022: €
1,157 million)
• Strong EBITDA of € 206 million in the first quarter (Q1 2022: €228
million) in consideration of market declines

Outlook for 2023

• Market development in line with expectations
• Wienerberger confirms EBITDA of > € 800 million (excluding earnings
generated by planned Terreal acquisition)

Vienna, May 11, 2023 – The first quarter was characterized by challenging
macroeconomic conditions. With partly strong declines in the end markets,
Wienerberger achieved stable first quarter revenues at Group level of €
1,052 million (Q1 2022: € 1,157 million) and generated a strong EBITDA of
€ 206.3 million (Q1 2022: € 228.3 million). The company once again
succeeded in growing against declining end markets due to the positive
development and outperformance of its end markets. Wienerberger’s ability
to master such economic challenges is attributable to its transformation
into a provider of innovative and sustainable system solutions for
ecological new build and renovation as well as water management. The
company is determined to consistently maintain its focus on these areas
and again outperform its end markets in the future.

“In the first quarter of 2023, we impressively succeeded in growing
organically against our declining end markets. Thanks to the combination
of excellent cost management and our efficient forward-looking purchasing
policy, we successfully covered rising cost inflation and succeeded in
maintaining profitability at a high level despite weakening demand. This
goes to show that the Wienerberger Group is well able to adapt to changing
market conditions and confirms the resilience of our business model”, says
Heimo Scheuch, Chairman of the Wienerberger Managing Board.

Striving for continuous optimization, the Wienerberger Group decided to
adjust its operating structure in Europe as of 2023, changing from a
product-centric structure – with Wienerberger Building Solutions and
Wienerberger Piping Solutions – to a regional structure based on Western
and Eastern Europe. Hence, the Group’s European regions also provide
solutions for the entire building envelope as well as for water and energy
management. Commenting on this move, Heimo Scheuch notes, “Given our
increased focus on system solutions, the reorientation of operational
management to three regions constituted the next logical step. The new
structure will help to leverage synergies between the various business
units within the countries and regions.”

Performance of the Regions
Increased mortgage rates led to lower activity in the areas of new build,
renovation and infrastructure. This development is reflected in the
results of the regions.

The Region Europe West reported a slight decline in external revenues by
7% to € 556.0 million (Q1 2022: € 600.2 million). Operating EBITDA
increased by 4% to € 102.3 million (Q1 2022: € 98.2 million).

The slowdown in new residential construction was particularly pronounced
in Germany and the UK, while business in France, Belgium and the
Netherlands performed comparatively well. Demand in the renovation
segment, especially for our roofing solutions, remained high across all
regions. Through the acquisition of FloPlast and Cork Plastics in Great
Britain and Ireland in 2021 and thanks to the company’s transformation
into an all-in solutions provider in the roofing segment, Wienerberger was
able to leverage significant synergies and increased its share in the
attractive renovation market.

In our plastic pipe business, first-quarter sales volumes declined
compared to the record results of 2022. In Northern Europe, harsh winter
weather delayed the implementation of infrastructure projects, and the
in-house segment was affected by the downward trend in new build. By
contrast, our plastic pipe business in the Western part of Region Europe
West, which is strongly driven by in-house solutions, benefited from the
growing portfolio of solutions and delivered a satisfactory performance.

In the first three months of 2023, the Region Europe East recorded a
decline in external revenues by 14% to € 300.9 million (Q1 2022: € 348.6
million) due to a sharp double-digit rise in mortgage rates and a
significant weakening of the economy. Operating EBITDA dropped by 30% and
came to € 59.0 million in the first quarter of 2023 (Q1 2022: € 84.8
million).

The high levels of inflation and interest rates led to a strong downturn
in new-build activities. Weakening demand was also observed in the
renovation segment. As regards pipe production, rising financing costs had
a negative impact on investments in infrastructure. However, by taking
immediate measures such as adjusted plant capacities, Wienerberger was
able to reduce costs promptly and counter these developments.

The North America Region reported external revenues of € 195.2 million (Q1
2022: € 207.5 million). By contrast, operating EBITDA rose by 11% from €
42.5 million to € 47.4 million.

The rise in mortgage rates as a result of the high level of inflation
continued in the first quarter of 2023 and had a dampening effect on
new-build activity in the USA and Canada. In the western US, particularly
in Texas, new housing construction slumped after several very strong
years. By comparison, continued high migration rates in the southeastern
US led to a boost in demand. The company also recorded stable demand in
Canada. Thanks to excellent management, the integration of Meridian Brick
proceeded fast, and the synergy effects achieved exceeded Wienerberger’s
expectations. Overall, Meridian Brick contributed significantly to strong
earnings growth in the North American façade business.

In the plastic pipe business, the decline in demand seen in the fourth
quarter of 2022 continued as expected in the reporting period. The price
of plastic granulates showed a downward trend during the fourth quarter of
2022 after peaking in the summer months and stabilized in the first
quarter of 2023. Thanks to the overall high price discipline and proactive
margin management, the Wienerberger Group succeeded in maintaining a high
level of profitability and generated a very strong contribution to
earnings.

Outlook for 2023
At the beginning of the business year we communicated our assessment of
developments expected in our end markets new build, renovation and
infrastructure as a scenario for 2023. Developments in the first quarter
were below these expectations. However, we assume that the markets will
improve slightly in the subsequent quarters of 2023 and continue to expect
the following developments for the business year 2023:

  Europe North America
New Build -15% -20%
Rennovation -3%  -3%
Infrastructure -5% -5%

For 2023, Wienerberger expects to see persistently high inflation rates
across the Group and a continuation of the previous year’s upward trend in
financing costs. With mortgages becoming more expensive, Wienerberger
anticipates a further drop in the number of new building permits issued.
High energy prices will again lead to an increasing focus on the
renovation of buildings, especially the renewal of roofs. This trend will
be supported by public incentive programs (EU Green Deal and national
initiatives), as well as stricter regulations aimed at enhancing energy
efficiency. Wienerberger therefore expects to see continued lively
activity in the renovation segment and generally stable market
development. In the infrastructure segment, muted demand and shifts in
project business are foreseeable as a result of rising financing costs.

The proven forward-buying strategy for energy will be continued throughout
the Group. For the current business year, 93% of the gas volumes required
have already been secured. Wienerberger’s ongoing Self-Help Program aimed
at increasing earnings and efficiency is expected to deliver a
contribution to earnings of € 45 million in 2023. Despite softening
markets and increased competition, the < 9% cost inflation anticipated for
the current year is to be covered through strict and proactive cost and
margin management.

In December 2022, the Wienerberger Group announced its intention to take
over significant parts of the Terreal Group, a successful European
provider of innovative roof and solar solutions. As planned, the
transaction is to be closed in the second half of 2023 and is subject to
approval by the competition authorities and compliance with the remedies
typically imposed on a transaction of this nature.

For the 2023 financial year, the company expects a strong performance and
confirms its target of generating > € 800 million in EBITDA. The earnings
expectations do not take into account the results generated by the planned
Terreal acquisition.

For the complete report on the first quarter of 2023, please visit
[1]Wienerberger – The future of building

Wienerberger Group
The Wienerberger Group is a leading international provider of smart
solutions for the entire building envelope and for infrastructure.
Wienerberger is the world’s largest producer of bricks (Porotherm, Terca)
and the market leader in clay roof tiles (Koramic, Tondach) in Europe as
well as concrete pavers (Semmelrock) in Eastern Europe. In pipe systems
(Steinzeug-Keramo ceramic pipes and Pipelife plastic pipes), the company
is one of the leading suppliers in Europe. By acquiring Meridian Brick,
Wienerberger further strengthened its position as a leading supplier of
facade products in North America. With its more than 200 production sites,
the Wienerberger Group generated revenues of approx. € 5.0 billion and
EBITDA of € 1 billion in 2022. 

For further information, please contact:
Claudia Hajdinyak, Head of Corporate Communications Wienerberger AG
t +43 664 828 31 83 | [2]claudia.hajdinyak@wienerberger.com

Daniel Merl, Head of Investor Relations Wienerberger AG
t +43 1 601 92 – 10221 | [3]investor@wienerberger.com 

══════════════════════════════════════════════════════════════════════════

11.05.2023 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com

══════════════════════════════════════════════════════════════════════════

Language: English
Company: Wienerberger AG
Wienerbergerplatz 1
1100 Wien
Austria
Phone: +43 1 60 192-0
Fax: +43 1 60 192-10159
E-mail: office@wienerberger.com
Internet: www.wienerberger.com
ISIN: AT0000831706
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1629837

 
End of News EQS News Service

1629837  11.05.2023 CET/CEST

References

Visible links
1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=73daea6b23342f5e72a38c678cae5a71&application_id=1629837&site_id=apa_ots_austria&application_name=news
2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=442a3ea2059a3a18464564f3212ab978&application_id=1629837&site_id=apa_ots_austria&application_name=news
3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=079ebabb981f2c926f38c86c5f918dbe&application_id=1629837&site_id=apa_ots_austria&application_name=news

OTS-ORIGINALTEXT PRESSEAUSSENDUNG UNTER AUSSCHLIESSLICHER INHALTLICHER VERANTWORTUNG DES AUSSENDERS. www.ots.at
© Copyright APA-OTS Originaltext-Service GmbH und der jeweilige Aussender