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| Wienerberger with strong organic growth in the first half of 2014 Wienerberger AG, the world's largest producer of bricks, and number one on the clay roof tile market in Europe, announced strong results for the first half of 2014. The market leader from Austria recorded a year-on-year increase of 7% in revenues to 1,349.4 million and 27% in operating EBITDA to 135.1 million. Heimo Scheuch, Chief Executive Officer of Wienerberger AG, explained: "We were still confronted with a very challenging market environment in some of our countries during the first six months of 2014. The results show clearly, that we were able to outperform in a number of our key markets such as the Netherlands, France, Italy, the Czech Republic and Hungary, which all have seen stronger declines as originally anticipated. In addition, the recovery of the new residential housing market in Germany and the United States was slower than originally anticipated. The UK, however, has seen a stronger development and improved capacity utilization in our plants led to a substantial increase in margins for our UK business. In order to meet the rising demand for bricks in the UK, we will restart mothballed plants for the first time since the crisis. In general however, we are still faced with a challenging market environment in Europe and I am therefore particularly pleased to report on organic volume growth in all areas of our business. " Earnings, Asset and Financial Position The sound business development led to a significant year-on-year increase in operating EBIT from 4.9 million in the first six months of 2013 to 33.5 million for the reporting period. The earnings growth was also supported by proceeds of 2.4 million from the sale of non-core assets. After the deduction of financial results of -29.0 million, Wienerberger generated a strong improvement in profit before tax to 4.5 million (2013: -29.2 million). The after-tax loss for the first half-year amounted to 1.7 million (2013: -31.0 million). Earnings per share equaled -0.15, compared with -0.40 in the first six months of 2013. The calculation of earnings per share includes an adjustment for the accrued hybrid coupon. 26 million increase in gross cash flow Gross cash flow rose by 26.0 million to 101.9 million for the reporting period based on the improvement in operating earnings. Total investments, which consist primarily of expenditures for maintenance and technical upgrades to production processes, totaled 52 million (2013: 43 million). Bond redeemed in July 2014 as scheduled Net debt, which always rises to a high in the first half of the year for seasonal reasons, amounted to approx. 693 million as of June 30, 2014. This represents gearing of 31% and reflects the Group's strong capital structure. In July Wienerberger redeemed the 250 million bond issued in 2010 out of available cash funds. Business Development in the Divisions during the First Half-year 2014 The Clay Building Materials Europe Division recorded the strongest earnings improvement in the Group with an increase of 10% in revenues to 719.6 million and 52% in operation EBITDA to 97.1 million. Supported by mild weather conditions, the rise in construction activity across Europe brought volume growth in all of the division's product groups. Higher average prices and realized cost savings of 11 million had an additional positive effect on earnings development in the Clay Building Materials Europe Division. Pipes & Pavers Europe: slight increase in revenues In the Pipes & Pavers Europe Division, revenues rose by 5% to 518.1 million in the first six months and operating EBITDA roughly matched the prior year level. The plastic pipe producer Pipelife benefited from sound organic growth in its Nordic core markets, however, was due to weaker demand unable to duplicate the record results in the industrial and special pipe business from the prior year. At Steinzeug-Keramo, specialist for ceramic wastewater pipes, and Semmelrock, concrete paver producer in Central and Eastern Europe, higher demand led to an improvement in revenues and earnings. North America: revenues roughly at prior year The North America Division was exposed to a slower-than-expected recovery in new residential construction. Turnover in this division totaled 108.3 million, which roughly matches the prior year level. Earnings were additionally negatively affected by lower average prices for bricks in some local markets and higher ramp-up costs for production sites. Additionally we have seen a softer housing market in Canada. Therefore operating EBITDA in the North America Division fell from 4.4 million in the first half of 2013 to 2.3 million for the reporting period. Takeover of Tondach Gleinstδtten At the beginning of July Wienerberger set a major strategic milestone for the growth of the Group with the increase of its stake in Tondach Gleinstδtten. The purchase price for the additional shares amounted to 43 million, whereby 23 million will be paid in the form of treasury shares. Tondach is the market leader in Central and Eastern Europe with 15 production sites in eight countries. The Tondach Group is expecting revenues of approx. 155 million and operating EBITDA of approx. 23 million in 2014 as well as net debt of roughly 60 million at year-end. Including the expected realization of nearly 3 million of synergies over the coming years, Tondach has an EBITDA potential of roughly 35 million in a normalized market environment. Tondach offers valuecreating perspectives for Wienerberger Heimo Scheuch explained, "The takeover of Tondach represents a further important development step for Wienerberger in one of our core businesses. Tondach will strengthen our presence in Central and Eastern Europe and expand our offering of application-oriented roofing solutions in Europe. " Both the increasing renovation market and in particular the pent-up demand in Central and Eastern Europe offer interesting value-creating perspectives on the midand long-term. Outlook and Strategy Wienerberger expects a continuation of the market trends in Europe and the USA through the end of this year. Heimo Scheuch added: "In Europe we anticipate an overall stable to slightly positive development in our relevant markets, however, with substantial regional differences. For the Pipes & Pavers Europe Division, we expect a nearly flat development and in the USA the recovery of the new residential housing markets should continue, however, at a slightly slower pace." Tondach, which will be consolidated as of the beginning of July, should contribute approximately 90 million to Group revenues and approximately 15 million to operating Group EBITDA. write your comments about the article :: © 2014 Construction News :: home page |