Wienerberger reports strong growth in 2018
Excellent progression across all Divisions
- Revenues up by 6% to all-time record of € 3.3 billion
- Like-for-like EBITDA increased by 15% to approx. € 470 million
- Strong operational performance due to consistent implementation of corporate strategy
- Dividend proposal for 2018: +70% to € 0.50 per share
Outlook for 2019
- Stable to slightly growing new residential housing and infrastructure markets
- Significant contributions to earnings from Fast Forward 2020 program are anticipated (€ 40 million)
- Target for 2019: Increase in like-for-like EBITDA to € 560-580 million
- The 2019 target includes the first-time application of IFRS 16 accounting standard with positive impact of approx. € 41 million to EBITDA
Our strong growth in 2018 reflects the continuous and sustainable implementation of our corporate strategy: It was driven by, firstly, the strengthening of our market positions and organic growth with innovative product solutions, secondly, the implementation of optimization measures within the framework of our Fast Forward 2020 program, and thirdly, targeted growth through acquisitions in order to add new products to the portfolio and broaden the scope of our existing operations. On this basis, our revenues rose to a new record level and we increased our results significantly. This shows that we successfully achieved all our targets for 2018.
In 2018, the Group increased its revenues by 6% to € 3,305.1 million, as compared to € 3,119.7 million in the previous year. Like-for-like (LFL) EBITDA (adjusted for effects from consolidation, sale of non-strategic and non-operating assets, FX and structural adjustments) rose by 15% to € 469.3 million (from € 406.5 million in 2017). Our Fast Forward 2020 optimization program launched in 2018 contributed approximately € 20 million to EBITDA in its first year. Wienerberger grew its net profit by 8% to € 133.5 million (from € 123.2 million in 2017). Earnings per share increased to € 1.15, representing a plus of 9% from the previous year’s level of € 1.05 per share.
Within the framework of its growth strategy, Wienerberger increased its capital expenditure for acquisitions and plant expansions, as previously announced. The Group’s total investments, comprising growth investments, normal capex and investments in non-current financial assets, increased to € 325.1 million (2017: € 206.3 million).
Given its excellent performance in 2018 and the outlook for the current year, Wienerberger will propose to the Annual General Assembly that the dividend be increased by almost 70% from the previous year’s level to € 0.50 per share (2017: € 0.30 per share).
Divisional business performance
Clay Building Materials Europe Division: Positive market environment and significant earnings growth
Wienerberger’s European brick business delivered a highly satisfactory performance in 2018. Notable growth was achieved in Eastern Europe. The business in Western Europe also recorded substantial growth in a stable environment but was adversely impacted by cost of structural adjustments. The Division’s revenues grew by 7% from € 1,787.0 million to € 1,918.8 million. LFL EBITDA increased significantly by 18% to € 367.1 million.
Pipes & Pavers Europe Division: Revenue and earnings growth
In 2018 Wienerberger’s pipe business benefited from a sound market environment. Plastic pipe sales increased in both Western and Eastern Europe. In Western Europe comprehensive restructuring measures in France resulted in a notable increase in earnings. The recently acquired companies also generated positive contributions to earnings. The restructuring of the ceramic pipe business was completed and had an immediate positive impact on the segment’s operating result. A significant positive contribution to the Division’s performance also came from the Group’s concrete paver business. Overall, revenues increased by 6% from € 1,014.2 million to € 1,070.1 million, while LFL EBITDA grew by 9% to € 91.2 million.
North America Division: Strong increase in earnings
The Division’s strong growth in 2018 was supported by positive contributions from our recent acquisition in the North American brick market. In its pipe business, Wienerberger benefited from higher selling prices and improved cost structures. This positive operational performance was impacted by negative foreign exchange effects. The Division’s revenues of € 306.8 million remained almost stable at the previous year’s level (€ 308.7 million), while LFL EBITDA improved significantly by 23% to € 38.6 million.
Strategic measures and outlook for 2019
In conjunction with our Fast Forward 2020 initiatives, Wienerberger has streamlined its existing organization to make it even more efficient.
As of the beginning of 2019, the Group’s European building materials operations have been grouped within the Wienerberger Building Solutions Business Unit. Wienerberger’s goal is to further enlarge its offer in the wall, façade, roof and paver segments and to strengthen its presence in the relevant European markets. Innovations, new products and selective acquisitions will play an important role in this context.
Wienerberger Piping Solutions comprises all pipe activities in Europe, with the long-term objective of growing and evolving into a full-range provider of smart infrastructure applications in the fields of water supply and waste water disposal, solutions for new building construction and renovation, as well as special applications for industry and the energy sector. Growth will be generated, above all, through selective acquisitions in regional markets and new additions to the product portfolio.
The North America Division will continue to pursue its strategy aimed at organic growth and regional expansion through selective bolt-on acquisitions.
Continuing to deliver on our growth strategy
These measures and the consistent implementation of our optimization program will position Wienerberger for continued growth in 2019. From today’s perspective, the company expects to see a stable/slightly growing European new residential housing market. The infrastructure market in Eastern Europe will continue to benefit from the increasing up-take of EU funding. For its Western European pipe business, Wienerberger foresees healthy demand levels in its core markets. In North America, Wienerberger anticipates a slightly positive development in new residential housing construction and growing demand in the infrastructure segment.
For 2019, Wienerberger aims to achieve an EBITDA on a like-for-like basis of between € 560 and 580 million. Besides a further improvement of the Group’s operational performance, positive contributions are expected through additional earnings of € 40 million to be derived from the Fast Forward 2020 program as well as roughly € 41 million from the first-time application of the new IFRS 16 accounting standard.
This year, Wienerberger celebrates its 200th anniversary and 150 years listing at the Vienna Stock Exchange. Our long success story is possible because the company has always embraced new challenges and designed its own future with foresight. In keeping with this tradition, our goal is to position Wienerberger even more strongly as a system provider in the field of building and infrastructure solutions. Through the reorientation of our Group, an intensified innovative drive, selective acquisitions and a growing focus on digitalization, we are in a better position than ever to embark on this course and take advantage of opportunities for growth.
For details on the 2018 results, please refer to the enclosed financial information. The complete 2018 Annual Report will be published on March 28, 2019 and made available at www.wienerberger.com/en.