Frequently asked questions

Here you find answers to frequently asked questions about Wienerberger.

Wienerberger is the world’s largest producer of bricks and number one on the clay roof tile market in Europe with 230 plants in 30 countries. We also hold leading positions in concrete pavers in Central-East Europe and pipe systems in Europe. Wienerberger had a market capitalisation of € 819.2 million at year-end 2011 and is listed on the Vienna Stock Exchange (WIE).

Wall: Clay blocks are used for load-bearing exterior and interior walls as well as for non-load-bearing partition walls or fill work. A wall made of clay blocks is normally not seen after completion because it is covered with plaster or paneling.

• Wienerberger's clay block business is run under the brand POROTHERM (POROTON in Germany)
• In FY 2011 it was responsible for 34% of Wienerberger's revenues.

Facade: Facing bricks are used in visible brick architecture: facades and interior walls are made from or covered with these bricks. The necessary functions of the load-bearing walls are provided by hollow bricks or other building materials such as concrete or calcium silicate blocks.

• Wienerberger's facing brick businessis run under the brand TERCA
• In FY 2011 it was responsible for 25% of Wienerberger's revenues.

Roof: Clay roof tiles are used primarily to cover pitched roofs. They not only provide sustainable protection for houses from the weather, but also represent an important design element for architects. Clay roof tiles are not only used in new construction, but also to a large extent in the renovation of existing buildings.

• Wienerberger's clay roof tile business is run under the brands KORAMIC and Tondach Gleinstätten (Wienerberger holds a 50 %-stake in Tondach Gleinstätten)
• In FY 2011 it was responsible for 26% of Wienerberger's revenues.

Surface: Pavers by Wienerberger are produced as clinkers made of clay or as concrete pavers and slabs. These materials are used by homeowners (for driveways, paths, terraces and garden design) as well as in public areas (sidewalks, open areas and pedestrian zones).

• Wienerberger's paving business is run under the brands TERCA (clay) and SEMMELROCK (concrete)
• In FY 2011 it was responsible for 10% of Wienerberger's revenues.

Pipe systems: Pipe systems marketed by Wienerberger comprise ceramic products (Steinzeug Group) that are made of loam, water and grog as well as plastic products (Pipelife). The fields of application of pipe systems are infrastructure (especially drinking water and waste water supply), residential and non-residential (industrial, office and public buildings) construction.

• Wienerberger's pipe system business is run under the brands Pipelife (plastic products) and Steinzeug (ceramic products).

Wienerberger operates in four segments:

• Central-East Europe (29% of revenues)
• Central-West Europe (22% of revenues)
• North-West Europe (40% of revenues)
• North America (7% of revenues)
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¹⁾ Revenues 2011; the segment Investments and Others contributed 2% of group revenues

 In recent years Wienerberger has experienced significant growth and since 1986 has evolved from a local brick maker to the Number 1 brick manufacturer in the world and Number 1 in clay roof tiles in Europe. Wienerberger also holds leading positions in concrete pavers in Central-East Europe and pipe systems in Europe. Since then, the number of production facilities has risen from 11 to 230 plants in 30 countries across Europe and the USA. In 1999, Wienerberger advanced expansion activity to become a global player through the acquisition of General Shale in the USA. 

 The brick and clay roof tile business is capital intensive. It requires a high initial investment and generates stable cash flows. Maintenance capex in the core business averages roughly 60% of depreciation in normal business years. The resulting free cash flows can be used to reduce net debt, pay dividends and invest in growth projects.

After the completion of restructuring, Wienerberger has a strong industrial base with lean cost structures and an efficient plant network. Net debt was reduced to € 442.5 million in 2011. Wienerberger now has a solid capital base with gearing of only 18% at year-end 2011.

After the restructuring phase, we repositioned the company to focus on premium products and system solutions for energy-efficient construction in order to use Wienerberger’s strong operating base as a platform for further growth. These efforts are focused, in particular, on our plane ground block, which will be introduced throughout Eastern Europe, as well as stronger market penetration in Western Europe with our infill blocks – high thermal insulating blocks filled with perlite, a volcanic material, and also filled with mineral wool. Following a successful launch in several Central-East European markets, our Dryfix® system will be rolled out in additional West Euro­pean countries. This special aerosol masonry adhesive is used instead of mortar to “glue“ clay blocks together, and thereby speeds up construc­tion. We are also addressing customer demands for system solutions in the roof segment with KoraTech®. In addition to clay roof tiles, we offer a full range of ceramic and non-ceramic acces­sories for roof construction from a single hand (“one-stop shop”). Our agenda also includes the intensification of sales activities, since we not only want to strengthen our customer ties with better service but also with our premium products. Through these efforts to improve our product mix as well as new programs in the field of marketing and distribution we increased our market shares in many countries during the past year, even though we raised prices to cover cost inflation.

One of the most important trends in new residential construction is the increasing focus on sustainability and energy efficiency. In order to realize our vision for healthy, energy-efficient and sustainable buildings that are attractive and affordable, we joined together with partners from heating technology, thermal insulation and other fields to develop a building model – the e4 BRICKHOUSE concept. This concept meets all applicable requirements, including the strict near-zero energy standards defined by the European Union that will take effect in 2020. Our e4 BRICKHOUSE concept offers families an energy-efficient, healthy house that is also affordable. It reflects the growing wish of many private builders to make a statement in support of climate protection with their own building plans. We want to give people a home where they can feel well throughout their entire lifetime. Wienerberger does not act as the house developer, but supplies easy to realize, individual solutions plus the appropriate product recommendations. The first e4 BRICKHOUSE is currently being realized as a pilot project by a private investor in Zwettl, Austria, a region with a harsh climate. After completion, which is planned for spring 2012, independent experts will monitor the energy consumption and production of the house over the next three years. This project is intended to demonstrate that a high quality of life and energy-efficient living can indeed be harmonized.

In addition to internal growth, we also want to use the challenging market environment to realize external growth by selectively expanding our core business through smaller, value-creating acquisitions. We will only invest in projects that can generate a CFROI (cash flow return on investment) of more than 16% in the third year after investment, and thereby support our CFROI goal of over 11.5% for the Group. We plan to realize these projects in all markets to strengthen our positions. We are also working to improve our position in the renovation market, since this sector is more anti-cyclical than new residential construction. 

Wienerberger spent € 158.8 million on investments in 2011. Normal capex amounted to € 102.5 million or 53% of ordinary depreciation for the year. This represents the part of capital expenditure that is required to maintain current production capacity and modify equipment to meet the latest technical standards. A total of € 56.3 million was spent for acquisitions and the completion of previously started growth projects. For 2012 we expect roughly € 120 million of maintenance capex or about 60% of ordinary depreciation. Additionally, € 162 million was committed to the takeover of the remaining 50%-stake in Pipelife.

The full takeover of Pipelife, one of the leading producers of plastic pipe systems in Europe, represents a milestone in our strategy to expand the core business. With this transaction, we – together with our subsidiary Steinzeug-Keramo, which holds leading positions in ceramic pipes – will become one of the most important European players in pipe systems. For Wienerberger, this not only means lower dependence on cyclical new residential construction, but also additional and sustainable growth potential. Plastic pipes continue to gain market shares over competing metal and concrete products, and this segment is therefore growing faster than the market. The integration of Pipelife will also allow us to expand our business, especially in building and electro installations. We intend to use the combined innovative power and strong market structures of Pipelife and Wienerberger to generate growth and further strengthen our market presence. This transaction reflects our sustainable growth strategy, and also creates immediate added value for our shareholders. Pipelife was previously included at equity, and full consolidation will increase Wienerberger Group revenues by approx. € 800 million or roughly one-third, and EBITDA by more than 20%, or approx. € 70 million, per year. The acquisition price for the remaining 50%-stake in Pipelife amounts to € 162 million.

Generally, the brick and roof tile industries are made up of local producers that serve regional markets. There are several regional manufacturers and only very few international producers.

The brick business requires high initial investment and relatively low subsequent replacement investments. It is a seasonal industry, with low levels of sales occurring during the winter months. The primary market segment of the Group’s products (approximately 70% of revenues) is the new residential housing construction. The choice of products typically depends on traditions and the availability of raw materials and climate. Commercial construction (e.g. office or public buildings) and renovation as well as infrastructure investments account for an increasing share of group revenues due to the renovation driven strength of the roof business, the contribution of the Steinzeug-Keramo Group as well as the future contributions of Pipelife.

For bricks, the competition consists of producers of brick substitute products like aerated concrete or limestone blocks and other brick manufacturers. For clay blocks, Wienerberger is the world’s largest producer and does not have any competing international industrial groups. Wienerberger’s brick competition arises mainly from family businesses and smaller emerging groups. For facing bricks, Wienerberger is number one in Europe and faces competitors such as CRH and Hanson (HeidelbergCement) and family businesses. In the USA, Wienerberger is a co-leader with Boral, and other competitors are ACME, CRH and Hanson (HeidelbergCement). The big five account for two thirds of the facing brick market share in the USA.

Within its roof tile activities, the Group competes with producers of substitute products for pitched roofing like metal covering, asphalt shingles or natural stone and with other clay and concrete roof tile manufacturers. In this product area, Wienerberger’s competitors in Europe are Lafarge and Etex (businesses of global and European scale) as well as Imerys and Terreal (both in France and surrounding countries). Consolidation in the roof tile industry is further advanced than in the brick industry.

Demand trends are best illustrated by the residential construction sector, which accounts for the vast majority of hollow brick and facing brick demand worldwide. The remainder represents commercial and public building demand and renovation for roof tiles. Brick sales are mainly driven by single and two-family housing starts. Due to its exposure to the residential construction sector, the brick industry is subject to typical macroeconomic drivers such as GDP, consumer confidence and to a lesser extent long-term interest rates (i.e. mortgage rates). In addition, weather is an important external factor affecting demand, as bad weather negatively impacts house builders ability to operate.