Wienerberger AG delivered a very strong operational performance and boost in profitability in the first half of 2018.
- Revenues up by 5% to € 1,606.9 million
- Adjusted EBITDA up by 18% to € 214.2 million
- Net profit increased by 28% to € 53.2 million
Strategy & Outlook for 2018:
- Target of LFL EBITDA between € 450 and 470 million confirmed
- € 200 million earmarked for growth investments in 2018
- Total value of € 150 million to be generated through disposals of operational and non- operational assets until 2020
- Operational Excellence target significantly increased from € 45 million to € 120 million until 2020
The performance of the Wienerberger Group during the first six months of 2018 was extremely satisfactory. Wienerberger is clearly gaining momentum as the company pursues its growth ambitions. The group achieved profitability gains and recorded notable organic earnings growth in all Divisions.
This confirms the success of our strategy: We will therefore continue to invest in growth projects, pursue the optimization of our portfolio and implement efficiency-enhancing measures. In this area, we intend to realize EBITDA improvements of around € 120 million by 2020, relative to 2017. This means that we plan to intensify all our optimization measures and with € 120 million, we are aiming significantly beyond our previously outlined target of € 45 million.
The dynamics of Wienerberger’s excellent first quarter performance continued throughout the second quarter of 2018. From April to June, the Group recorded a 7% increase in revenues over the prior period’s level to € 931.5 million and a 7% increase in EBITDA to € 154.8 million. As a result, Wienerberger’s revenues at Group level grew by 5% to € 1,606.9 million in the first half of the year, despite unfavorable foreign exchange effects. Organic EBITDA (excluding one-off costs and income) grew by 18% to € 214.2 million. Irrespective of the costs of structural adjustments, the Group’s net profit improved by 28% to € 53.2 million, up from € 41.7 million in the first half of 2017.
Business performance at Division level
In the first half of the year, Wienerberger’s European brick business delivered improved revenues and earnings. The company’s strong position in the Eastern European growth markets was reflected in notable double-digit revenue and earnings growth in the region. Business in Western Europe remained stable at the previous year’s level. The consistent implementation of measures aimed at improving profitability led to a highly satisfactory rise in organic EBITDA. In total, the Division’s revenues came to € 918.7 million in the first half of 2018, up by 6% from the first half of 2017. At € 158.7 million, EBITDA was 7% higher than in the comparable period of the previous year.
The Pipes & Pavers Europe Division succeeded in increasing its revenues by 7% to € 534.1 million in the first half of the year. Non-recurrent restructuring costs caused a drop in EBITDA from € 37.8 million to € 28.4 million. However, the consistent reorientation of operations in France have already led to improved earnings in the Western European plastic pipe business. All other improvement measures taken in 2017 and the first quarter of 2018 are producing results, e.g. in the ceramic pipe business. Relative to the comparable period of the previous year, revenues of the Division grew by 9% to € 315.0 million in the first quarter of 2018 and EBITDA rose significantly by 20% to € 37.4 million.
Business in North America was marked by a steep increase in earnings in both bricks and pipes. This successful performance is due to the consistent reorientation of the Division over recent years. Despite a currency-related reduction in revenues of 3% to € 149.3 million, EBITDA grew by 79% to € 23.6 million.
Strategic measures and outlook for 2018
For 2018 as a whole, Wienerberger expects to see substantial revenue and earnings growth in the Clay Building Materials Europe Division. For the Pipes & Pavers Europe Division, the positive market trend is projected to continue and further earnings growth is expected. In the USA, the economic environment is anticipated to remain favorable and should enable the North America Division to generate significant growth in earnings.
The strategic optimization of our portfolio is making good progress. Until 2020, we plan to generate a total value of up to € 150 million through the disposal of assets, including operational as well as non-operational assets. At the same time, in pursuit of our growth strategy, we recently took over a brick producer in the Netherlands, a pipe specialist in Norway and a paver plant in Romania. With a view to further attractive possibilities, we have earmarked approximately € 200 million for growth investments over the course of 2018.
Overall and from today’s perspective, Wienerberger confirms its target of increasing its adjusted EBITDA at Group level to the projected range of € 450 million to € 470 million for the full year.