Half-year results 2016 confirm Wienerberger‘s operational strength
In the first half of 2016, the Wienerberger Group generated a consolidated turnover of € 1468.9 mill. (HY 2015: € 1474.9 mill.), mainly as a result of constant sales volumes and slight price increases. Group revenues were impacted by negative foreign exchange effects. Standing at € 178.3 mill., the operating EBITDA fell slightly short of the previous year’s level. In addition, Wienerberger had significantly lower gains from real estate sales than in 2015. Adjusted for foreign exchange and real estate effects, Wienerberger recorded a 9 % organic increase in its operating EBITDA.
Revenue and earnings growth in Clay Building Materials Europe Division
In the first six months, the European brick business performed well throughout Eastern Europe, except for Russia. Wienerberger was able to significantly increase the sales of clay blocks and roofing tiles in the region at stable average prices. In contrast, widely diverging developments were seen in the countries of Western Europe. In Great Britain, demand slowed down in the run-up to the EU referendum. Taking account of this development, Wienerberger promptly initiated capacity adjustments. In Belgium the market trended downward from a very high level. At the same time, new residential construction in the Netherlands was marked by positive dynamics. Germany and France recorded favourable developments in the construction of new detached and semi-detached homes, which resulted in higher clay block sales. A trend to the contrary was seen in Italy and Switzerland, with construction activity in the detached and semi-detached home segment slowing down.
Altogether, the Clay Building Materials Europe Division accounted for a satisfactory € 818.2 mill. share in Group revenues (up 3 % on the previous year’s level). Operating EBITDA increased significantly in the reporting period by 11 % to € 124.8 mill.
Pipes & Pavers Europe: decline in revenues and operating EBITDA
The environment for the ceramic waste water pipe operations remained challenging, although a moderate increase in public-sector orders was seen in Germany in the second quarter. In Eastern Europe, tendering activity for infrastructure projects was down, as reflected in the results of the pipe operations. Therefore, the Division’s revenues dropped by 7 % to € 503.9 mill. and operating EBITDA decreased from € 56.6 mill. to € 52.9 mill.
Satisfactory development of the brick business in the USA and Canada
In North America, both the US brick business and the Canadian operations performed extremely well. The Division showed a positive operating performance and generated revenues of € 141.4 mill., up by 7 % on the previous year. However, the costs of the closure of one production site and gains from real estate sales that were significantly lower than in 2015 resulted in a drop in operating EBITDA from € 20.7 mill. to € 10.9 mill. in the reporting period.
Outlook and strategy
For the full year, Wienerberger predicts a slightly positive development in European residential construction, though with major regional differences. For the Pipes & Pavers Division, a continued, sound development in North-Western Europe in the second half of the year, subdued tendering activities in Eastern Europe, and a lower result from international project business is foreseen. Developments in the North American brick business should remain positive.
Wienerberger maintains its projections for 2016 and confirms its target of € 405 mill. operating EBITDA.
The Group aims to combat negative foreign currency effects by stepping up its optimization measures and cutting costs through more efficient processes in production, sales and administration. In highly volatile markets the Group is reacting promptly by adjusting its production capacities. At the same time, Wienerberger will continue to pursue its efforts to develop innovative, future-oriented and profitable products and services in the coming months.
Wienerberger AG
www.wienerberger.com
