Preliminary results for 2006:
- Two-digit growth in revenues and earnings; Revenues +14% to € 2,225.1 million, EBITDA + 10% to
€ 471.9 million
- Increase in dividend planned
Outlook on 2007:
- Continuation of profitable growth course in all segments
- Goal: above-average (vs. industry) increase in EBITDA and earnings per share
Vienna, February 15, 2007 - Wienerberger AG, the world's largest producer of bricks and the number two in clay roof tiles in Europe, met all earnings targets in 2006: Group revenues rose by 14% to € 2,225.1 million, operating EBITDA by 10% to € 471.9 million and operating EBIT by 11% to € 299.7 million despite the high 2006 level of investment activity. After a strong third quarter, clear two-digit growth rates were also recorded during the last three months of the year. Results for October to December show a 17% increase in revenues over the comparable prior year period to € 569.2 million as well as a plus of 25% in EBITDA to € 120.4 million and 38% in EBIT to € 71.6 million.
Success through expansion of geographic portfolio
"A number of factors influenced the development of revenues and earnings during the past year: strong and steady demand on nearly all European markets, above all the recovery in Germany, provided support for our growth, whereas the sharp drop of up to 30% in new residential construction in the USA and significantly higher energy prices worked against this favorable trend", commented Wolfgang Reithofer, CEO of Wienerberger AG, on the preliminary results that were presented today. As clear confirmation of the Wienerberger growth strategy and the strength of the geographic portfolio, Reithofer sees the Group's ability to more than offset the earnings decline in the USA (-5% in EBITDA) and an additional € 47 million in energy costs through an improvement in results, above all in Germany, Belgium, France, Great Britain, Poland, Romania and Hungary. In 2006 non-recurring expenses of € 7.2 million were incurred for plant shutdowns in the USA and Czech Republic, but were nearly offset by the sale of a non-operating property in the south of Vienna for € 5.1 million.
Increase in dividend planned
"Our strong geographic portfolio and numerous profitable growth projects again made it possible for Wienerberger to meet all our ambitious earnings targets", emphasized Reithofer. "We also want our shareholders to benefit from the sound development of business in 2006, and the Managing Board will therefore recommend that the annual general meeting approve a further increase in the dividend", announced Reithofer. The final dividend recommendation as well as financial results and profit before and after tax will be presented together with the financial statements on March 27.
€ 420 million in growth investments for ca. 50 projects with attractive returns
Wienerberger invested approximately € 525 million in 2006. Of this total, roughly € 420 million were spent on growth projects and € 105 million for maintenance capex and the optimization of production facilities. Acquisitions in the USA (Robinson Bricks) and Europe represented 53% of growth investments, while the remaining 47% comprised the construction of new plants and expansion of capacity. A total of approximately 50 bolt-on projects were started or completed during the past year. These investments were funded primarily through free cash flow, with any additional financing requirements covered by debt. "After realizing the expected synergies and potentials for optimization from these bolt-on projects, our aim is to record a cash flow return on investment (CFROI) substantially above the current return generated by the Wienerberger Group", explained Reithofer, "and our past performance has shown that we are able to meet this goal."
Strong Q4 increase for revenues and earnings in Europe
During the last three months of 2006, Group revenues rose by an impressive 17% to € 569.2 million and EBITDA by 25% to € 120.4 million. This sound development at the end of the year was driven above all by the mild winter and high demand in Central-East Europe, Germany and Belgium as well as positive development at Bramac and Semmel¬rock. In total, these factors more than offset the decline in the USA. Revenues recorded from October to December in Central-West Europe increased 36% to € 126.2 million and EBITDA rose 70% to € 23.9 million. Top-line growth in this region was influenced by recovery on the residential construction market in Germany, while the improvement in earnings resulted from the better utilization of capacity and the continuous optimization of production costs. Sound results were also recorded in Central-East Europe. In particular, a high level of demand in Poland and strong growth in Romania and Bulgaria contributed to an increase of 29% in revenues to € 163.9 million and an improvement of 48% in EBITDA to € 49.4 million.
Downward trend in USA accelerates at year-end
In North-West Europe, Wienerberger recorded an increase of 14% in revenues to € 211.7 million and 16% in EBITDA to € 45.2 million from October to December 2006. This development was mainly supported by strong demand in Belgium and France as well as solid earnings growth in Great Britain. A further decline in results was recorded during the last quarter in the United States, where residential construction fell by nearly 30% during the course of the year. As a consequence of this market downturn, revenues in the USA segment declined 9% to € 77.6 million and EBITDA fell 15% to € 14.2 million.
Positive outlook for 2007 despite further decline in USA
"I am confident concerning the development of our business in the future and expect the Wienerberger Group will remain on its growth course during 2007", stated Reithofer. "We do not see any recovery in new residential construction in the United States before the middle of the year, and are forecasting additional costs of roughly € 30 million from higher energy prices. However, positive market development in most of the European countries, the ongoing optimization of our plants in the United States and the continuation of our expansion strategy should more than offset these factors and form the basis for a further improvement in earnings during 2007."
Optimistic outlook for Europe in 2007
Forecasts for Central-East Europe call for continued favorable market conditions and steady high demand for bricks, especially in Poland, Romania and Bulgaria. In the growth market of Russia, Wienerberger has started work on the construction of a second plant 800 km east of Moscow after the first plant near Moscow entered the start-up phase during October 2006. Wienerberger also expects a generally positive business climate in Western Europe. In Belgium and France indicators show continued strength in residential construction, and the Netherlands and Great Britain should record slight growth. The recently optimistic sentiment in Germany leads to expectations of at least stable development, and in Switzerland construction activity should remain at a high level. In the USA new residential construction is not forecasted to recover before the second half of 2007, after the high stock of unsold houses has again reached a reasonable level. However, capacity adjustments and the further optimization of plants should allow Wienerberger to also record an improvement in earnings in the USA.
Goal for above-average growth in earnings confirmed
"We used 2006 to expand our capacity and further optimize our cost structures. In connection with the successful pursuit of our profitable growth strategy, I am therefore optimistic that we will again be able to meet our goal for above-average growth (of approximately 10%) in earnings during 2007", added Reithofer in conclusion.
