Wienerberger triples net result with € 69 million
Wienerberger AG remained on track throughout the first nine months of 2016. In total, the Group generated nearly stable revenues of € 2,279.7 million. Operating EBITDA amounted to € 302.6 million, up by 3 % from the same period of the previous year. Since the beginning of the year, Wienerberger’s net profit increased significantly to € 68.7 million, as compared with € 23.3 million in the previous year.
Commenting on the results achieved, Heimo Scheuch, CEO of Wienerberger AG, notes: “Most of the trends seen during the first six months continued in the period from July to September. Thus, the third quarter performance of the Wienerberger Group was in line with our expectations. We were able to increase our sales moderately and obtain slight price increases. We are particularly happy to report that our net profit, as compared with 2015, has almost tripled since the beginning of the year. The development of revenues and earnings is highly satisfactory as well - especially against the backdrop of negative foreign exchange effects, primarily from the British pound. Adjusted for this effect, we generated 1 % organic revenue growth and achieved a 9% increase in operating EBITDA. This confirms that we are well on track, despite the challenging market environment for our Eastern European infrastructure business. The strong performance of our plastic pipe business in the Nordic markets as well as growth in our brick business in Europe, the USA and Canada were among the main factors accounting for the positive development.”
Clay building materials Europe: 2 % increase in revenues and 15 % EBITDA growth
Residential construction in Europe trended slightly upward during the first nine months of the year. Especially the development in Eastern Europe stayed strong. Wienerberger benefited from the pickup of the residential construction market in the region and was able to further increase the sales of clay blocks and roof tiles. Combined with slightly improved average prices, these developments led to a significantly higher operating result. Western Europe remained at a highly satisfactory level, although the strongly diverging regional trends observed earlier in the year continued. Positive developments were seen in the German, Dutch and French housing markets. Product deliveries in Belgium declined during the first six months of the year, but picked up again in the third quarter. After Great Britain’s vote to leave the European Union, the UK brick and roof tile market developed better than expected, as ongoing housing projects were completed and inventories along the supply chain returned to normal. As a result, facing brick sales exceeded the previous year’s volume, and also the roof tile business performed better than in 2015 in the UK. In contrast, our continental roof tile business fell short of the previous year’s results, which was primarily due to spending restraint in the renovation market, an important driver of the roofing business. Altogether, the Clay Building Materials Europe Division generated revenues of € 1,277.8 million from January to September 2016, up by 2 % from the same period of the year before. Operating EBITDA increased sharply by 15 % to € 216.9 million during the reporting period.
Continued positive development of North American and Canadian brick business
The US brick business and our activities in Canada were highly satisfactory in the third quarter of 2016. Owing to intensive competitive pressure, the result of the North American plastic pipe business however remained below the previous year’s level. In total, the North America Division reported a 5% increase in revenues to € 220.3 million in the first nine months of the year. Despite the strong organic growth, the Division’s EBITDA, amounting to € 17.5 million, stayed below the previous year’s level, mainly due to significantly lower contributions to earnings from real estate sales. Adjusted for these effects, the Division reported 25% organic earnings growth.
Outlook and strategy
Looking to the year as a whole, Wienerberger expects a slightly positive development of new residential construction in Europe. Above all, the positive trends seen in Eastern Europe are projected to continue, whereas Western Europe will still be marked by strongly diverging developments. Overall, a significant increase in earnings is forecast for the Division Clay Building Materials Europe for the full year. In the pipe segment, no major changes in the development of business are foreseen for the fourth quarter. Consequently, Wienerberger expects the Pipes & Pavers Division to close the year with a decrease in earnings. The positive development of the brick business in North America and Canada is likely to continue, whereas the earnings are expected to remain weak in the US plastic pipe segment. Overall, however, the North America Division is projected to achieve both revenue growth and a significant improvement in earnings.
Wienerberger AG
www.wienerberger.com
