Wienerberger with sound revenue and earnings growth in Q1 2015
Wienerberger AG today announced results for the first quarter of 2015. From January to March, the Group recorded a year-on-year increase of 5% in revenues to € 613 million and sound growth of 21% in operating EBITDA to € 34 million. This strong operating performance is a direct result of the clear focus on high-quality product and system solutions, innovative power and service expertise in all areas of the Wienerberger Group. Continuous optimization and efficiency improvement measures provide additional support. “I am pleased with our results for the first three months. Even without any tailwinds from the markets, we successfully improved revenues and earnings based on our internal strength“, explained Heimo Scheuch, Chief Executive Officer of Wienerberger AG, on the first quarter results.
Segment Development in the First Quarter of 2015
The Clay Building Materials Europe Division recorded a good start with satisfactory volumes in spite of a stronger winter than the previous year and very different regional developments. Average prices remained constant across all product groups. The initial consolidation of Tondach Gleinstätten had a clear positive effect on division revenues, but EBITDA was adversely influenced by the expected seasonally negative earnings contribution from Tondach Gleinstätten. Revenues rose by 4% to € 332 million, while operating EBITDA fell from € 23 million in the previous year to € 22 million for the reporting period. In view of the stable to slow market development, the focus for the first three months remained on the optimization of cost structures and internal processes.
Improvement in revenues and earnings for Pipes & Pavers Europe
The Pipes & Pavers Europe Division recorded a year-on-year improvement in both revenues and earnings for the first three months. Revenues rose by 3% year-on-year to approx.€ 224 million and operating EBITDA increased 25% to € 15 million. Pipelife, the plastic pipe specialist, recorded a strong development on the European core markets and generated organic growth in the first three months. The expected upturn in the international project business also resulted in a substantially higher contribution to earnings. At Steinzeug-Keramo, the ceramic wastewater systems producer, business development was negatively affected by the weatherrelated later start of the construction season and the company was as expected unable to repeat the very strong prior year results. Semmelrock, the concrete pavers specialist, showed a good development, however was unable to duplicate the very good results from the first quarter of 2014.
Revenues and earnings in North America positively influenced by foreign exchange effects and cost savings
In the North America Division, revenues rose by 19% to € 54 million and operating EBITDA improved by more than € 2.6 million to € 1.1 million. Similar to the previous year, severe weather again slowed the recovery in single- and two-family house construction during the first quarter and led to stable volumes in the brick business. The US plastic pipe benefited from higher activity in the international project business with fiber-reinforced pipes. The revenue and earnings growth in this division was positively supported by foreign exchange effects and cost savings.
Outlook and Strategy
“The sound results in the first quarter provide us with a certain degree of optimism. Despite limited tailwind from the markets, we have again demonstrated our operating strengths. We are therefore confident that we will meet our goal to generate Group EBITDA of € 350 million in 2015“, summarized Heimo Scheuch. Wienerberger still expects a stable to slightly positive market environment in Europe, which should lead to moderate volume growth for the Clay Building Materials Europe Division. Further growth is also projected for the USA and, supported by the stronger US dollar, should lead to an improvement in results for the North America Division. Stable development in the European core markets and good order levels for international projects should have a favorable influence on the plastic pipe business. However, the second quarter of 2015 is expected to bring a shortage of plastic granulate on the raw materials market. Wienerberger has already implemented proactive measures in procurement, production and sales to ensure availability of our products and to handle the volatile costs through price management. Steinzeug-Keramo and Semmelrock should record an improvement in earnings for the year based on their internal strength. Heimo Scheuch added: “Since the momentum on our markets is still subdued, we will continue to focus on the expansion of our positions and on organic growth, above all through premium product and system solutions and innovation in all product groups. We will also continue our optimization and efficiency improvement programs in all areas of the company.“
Continued focus on financial discipline and strong cash flows
The strategic focus remains on financial discipline and the generation of strong cash flows, which will be used primarily for organic growth, a moderate investment policy as well as the reduction of debt and dividends. The evaluation of value-creating acquisitions will focus on the expansion of the Group’s industrial base and an increase of the exposure to the renovation market.