Wienerberger with stable sales and sharply declining profit in the first half of 2024
According to a press release dated 14 August 2024, Wienerberger achieved solid results in the first half of 2024. The group‘s revenues totalled EUR 2,213 million in the first half of 2024 and were almost on a par with the prior year period (H1 2023: EUR 2,203 million). Operating EBITDA totalled EUR 400 million (H1 2023: EUR 454 million).
In contrast, profit fell significantly compared to the same period of the previous year. According to the financial figures presented, profit after taxes from January to June 2024 totalled just EUR 500,000 (H1 2023: EUR 223.5 million).
At EUR 2.83 billion, equity on 30 June 2024 was around 7 percent higher than a year ago (30 June 2023: EUR 2.65 billion). Net debt increased by 69 percent to EUR 2.05 billion compared to the previous year (30 June 2023: EUR 1.21 billion). The group‘s gearing ratio has thus risen from 45.7 percent to 72.5 percent.
Assessment by Wienerberger
“Wienerberger delivered a solid 2024 half-year performance and is well-placed for market recovery in the future. With our sustainable solutions for affordable housing construction, energy-efficient renovation, and water management, we are not only continuously improving people’s quality of life but are also proactively part of the solution when it comes to tackling climate change and its effects”, comments Heimo Scheuch, CEO Wienerberger on this result.
The acquisition of Terreal, a key European provider of products for roof repair and renovation also made a significant contribution to earnings. By combining the expertise and product portfolio of both companies, Wienerberger became the leading European pitched-roof expert for innovative, all-in roofing and solar solutions as well as solutions for the entire building envelope in Europe and North America. The integration of Terreal into the group is well underway.
Heimo Scheuch: “The acquisition of Terreal was the biggest step to date in our value-creating growth strategy, and we have continuously worked on a swift integration. By combining our portfolios, Wienerberger positions itself as the European pitched-roof expert capable of integrating solar, rainwater, and additional innovative solutions. This allows us to play a key role in renovating the European building stock and establishes a strong platform for future growth.”
End Market Development in first half 2024
Globally, the market for renovations has been relatively stable in the first six months of 2024, and the infrastructure sector has even seen a slight increase. For new residential housing, the developments have been more diverse across Wienerberger’s end markets.
The recovery of new residential housing markets in Eastern Europe has made a strong contribution to Wienerberger’s results in the first haf of 2024. In addition, end markets in the United Kingdom and Ireland have seen a slight increase in demand and activity. Less positive developments can be observed in Central Western Europe, where the market has likely bottomed out, and in Northern America. In most regions, the rebound of new residential housing markets through public incentive programs has been delayed to 2025. Combined with the global political uncertainty, this has created challenging macroeconomic circumstances in all end markets. The positive result achieved by Wienerberger was attributed to the group’s efficient cost management, its ongoing self-help program and timely restructuring measures in selected markets.
Shaping the future with innovative strength
Amidst a changing macroeconomic situation, Wienerberger holds firm in its commitment to sustainability. Last year, the company had reached the goals of its last three-year sustainability program and set itself extended and more ambitious targets for 2026, particularly with regard to a further reduction in emissions and the promotion of a circular economy. The new sustainability program includes new benchmarks for water and waste management. In addition, Wienerberger will generate 75 percent of its total revenue from building products contributing to net zero buildings by 2026, such as integrated roof solutions, exterior walls and facades, heating and cooling solutions and systems for the use of solar energy. By offering innovative solutions, supported by modern cutting-edge technology, Wienerberger is helping to reduce emissions, save natural resources and mitigate the effects of climate change on people and the environment. Wienerberger is also committed to promoting diversity and inclusion as part of its new social goals.
Outlook: 2024 and beyond
The initial market assumptions for 2024 were based on the expectation of a recovery in residential housing markets. This has not fully come to pass, caused in part by slower-than-expected interest rate cuts, subduing bank lending. In particular, demand for single-family housing is below expectations. Several national governments in Wienerberger’s end markets have launched or announced public subsidy programs for their respective construction sectors, but their impact will only be felt next year in most cases. Political uncertainty will remain a negative factor in several major countries and at least until after the presidential elections in the USA.
For the 2024 financial year, the company nevertheless continues to expect a solid performance and operating EBITDA guidance of EUR 800 – 820 million. Looking beyond the bottom-building year 2024, an overall recovery shift across markets is expected for next year, when governmental stimulus programs will take effect and interest rates are likely to be cut further. For Wienerberger, the cost-efficiency measures taken in H1 2024 will still contribute positively to results in 2025 with a full market recovery expected. For 2026, a normalization of the market level is expected.
