Investor and Analyst Presentation - Results 2016 - MarketScreener.com
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Investor and Analyst Presentation Results 2016
Disclaimer
Cautionary note regarding forward-looking statements
The information contained in this document has not been independently verified and no representation
or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness,
accuracy, completeness or correctness of this information or opinions contained herein.
Certain statements contained in this document may be statements of future expectations and other
forward-looking statements that are based on management‘s current view and assumptions and involve
known and unknown risks and uncertainties that could cause actual results, performance or events to
differ materially from those expressed or implied in such statements.
None of Wienerberger AG or any of its affiliates, advisors or representatives shall have any liability
whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document
or its content or otherwise arising in connection with this document.
This document does not constitute an offer or invitation to purchase or subscribe for any securities and
neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or
commitment whatsoever.
2
2016 successfully completed
Net profit increased to € 82 mn (2015: € 37 mn)
Organic growth of EBITDA by 9%
Free cash flow almost doubled to € 247 mn (2015: € 135 mn)
Dividend increase by 35% to € 0.27 per share
3
2016 at a glance
► Revenues: € 2,973.8 mn (0% | LFL: +1%)
Higher volumes and improvement of average prices
Positive contribution from consolidation offset by
negative foreign exchange effects of € 60.9 mn
► EBITDA: € 404.3 mn (+9% │ LFL: +9%)
FX-effect: € -12.8 mn
Contribution from consolidation: € 1.0 mn
Earnings from the sale of non-core assets: € 17.9 mn
Effect from portfolio optimization: € 2.9 mn
► Increase in cash flow from operating activities by 28% to € 333.8 mn
Strong operating performance and effective management of Working Capital
4
Business development in our Divisions
► Clay Building Materials Europe
Higher volumes and slightly improved average prices
compensate significant negative FX-effect
Positive market environment in Eastern Europe and
regional differences in Western Europe
► Pipes & Pavers Europe
Revenue and earnings decline
> International project business in our plastic pipe activities below record level of 2015
> Weak public investment activity due to delays in project tendering and difficulties to draw on EU
funding negatively affects all business areas in Eastern Europe
► North America
Growth in new build of single- and two-familiy homes leads to higher sales volumes
Significant organic earnings improvement in North American brick business
5
Organic improvement of revenues and earnings
Revenues: EBITDA:
€ 2,973.8 mn € 404.3 mn
(2015: € 2,972.4 mn | 0%) (2015: € 369.7 mn | +9%)
LFL 1): +1% LFL 2): +9%
Net result 3): Free cash flow:
€ 82.0 mn € 246.5 mn
(2015: € 36.5 mn | >100%) (2015: € 135.1 mn | +82%)
1) Adjusted for effects from consolidation and FX
2) Adjusted for effects from consolidation and FX, sale of non-core assets and portfolio optimization
3) Profit after tax less profit attributable to non-controlling interests and hybrid coupon 6
Growth in Q4 2016
► Development of revenues and earnings
External revenues: € 693.2 mn (+1% │ LFL: +2%)
EBITDA: € 101.7 mn (+33% │ LFL: +7%)
► Clay Building Materials Europe
Positive business development in Eastern Europe
Stabilization in B │ Sound demand in F, NL and UK
► Pipes & Pavers Europe
Continuation of trends of the first nine month
> Western Europe: Slight earnings improvement in plastic pipe activities and weak demand in ceramic
pipe business
> Eastern Europe: Declining demand in all business areas
► North America
Organic earnings below previous year´s level due to slight price pressure in our brick and
plastic pipe activities
7
Successful implementation of our clear strategy
OPERATIONAL
ORGANIC GROWTH GROWTH PROJECTS
EXCELLENCE
Digitalization Continuous cost and Selective bolt-on
Innovative products, process optimization projects in core markets
services and solutions Portfolio optimization
8
Results 2016
Stable development of revenues
3,100
+1%
+1%
+1%
3,000 2,972.4 2,973.8
-2%
2,900
in € mn
2,800
2,700
2,600
2,500
Revenue 2015 Sales volume Sales price Consolidation FX-effect Revenue 2016
Note: Rounding differences may arise from automatic processing of data 10Organic EBITDA growth of 9 %
420
410 404.3
400 +12.8 395.1
390
-17.9 1)
380 -2.9 -1.0
in € mn
369.7
370 +17.5 363.9
360
350
-23.3
340
330
320
EBITDA 2015 Sale of Portfolio EBITDA 2015 EBITDA 2016 Sale of Portfolio Consolidation FX-effect EBITDA 2016
reported non-core assets optimization basis reported non-core assets optimization LFL
1) Including the earnings contribution from the sale of two production sites for concrete products and shutdown costs for one facing brick plant in the USA.
Note: Rounding differences may arise from automatic processing of data 11Income statement 2016 in € mn 2015 2016 Chg. in % Revenue 2,972.4 2,973.8 0 EBITDA 369.7 404.3 +9 EBITDA margin 12.4% 13.6% Depreciation -202.1 -206.6 -2 Operating EBIT 1) 167.6 197.7 +18 Operating EBIT margin 5.6% 6.6% Impairment / Reversal of impairment charges to assets -4.5 -0.2 +95 Impairment charges to goodwill 0 -6.9 -100 EBIT 163.1 190.6 +17 1) Adjusted for impairment charges to assets and goodwill as well as reversal of impairment charges to assets Note: Rounding differences may arise from automatic processing of data 12
Net profit more than doubled
in € mn 2015 2016 Chg. in %
EBIT 163.1 190.6 +17
Income from investments in associates 4.0 6.7 +66
Net interest result -42.3 -34.4 +19
Other financial result -17.8 -4.3 +76
Financial result -56.1 -32.1 -43
Profit before tax 107.0 158.5 +48
Income taxes -37.2 -43.2 -16
Profit after tax 69.8 115.3 +65
Thereof attributable to non-controlling interests 0.8 1.8 >100
Thereof attributable to hybrid capital holders 32.5 31.5 -3
Net profit 36.5 82.0 >100
► Improvement of net interest result due to repayment of financial liabilities and
increased use of short-term bank linkes
Note: Rounding differences may arise from automatic processing of data 13Completion of sales program
► Between 2012 and 2016 Wienerberger sold non-operating assets worth
roughly € 93 mn
► Cash inflow 2016: € 28.0 mn (2015: € 28.2 mn)
► EBITDA-contribution 2016: € 17.9 mn (2015: € 23.3 mn)
► Remaining non-operating assets will be disposed of in the course of an
ongoing and structured sales process
14Free cash flow almost doubled in € mn 2015 2016 Chg. in € mn Chg. in % Gross cash flow 294.5 317.9 +23.4 +8 Change in Working Capital 1) -34.2 +15.9 +50.0 >100 Normal capex -137.7 -137.3 +0.4 0 Divestments and other +12.5 +50.0 +37.5 >100 Free cash flow 135.1 246.5 +111.3 +82 Growth capex -10.1 -43.8 -33.7
Optimization of Working Capital
in € mn 2015 2016 Chg. in %
Change in inventories -57.3 +20.9 >100
Change in trade receivables +20.2 -5.7 100
Change in other net current assets +17.8 -29.8 100
► Significant stock reduction in Q4 and higher trade payables as a result
of effective Working Capital management
► Working Capital of € 519.7 mn stood at 17% of Group revenues at year-
end, which is clearly below the internal target of 20%
Note: Rounding differences may arise from automatic processing of data 16Total investments in line with guidance
in € m 2015 2016 Chg. in %
Normal capex 137.7 137.3 0
in % of depreciation 68% 66%
Growth capex 10.1 43.8 >100
Total investments 147.8 181.1 +23
► Normal capex includes besides replacement investments also
investments for technical upgrades, product innovation and more efficient
production processes as well as for higher occupational safety.
► Growth capex includes acquisitions, capacity expansions and the
development of new product segments or regional markets.
Note: Rounding differences may arise from automatic processing of data 17Exercise of call option for the buyback of 2007
hybrid bond results in higher net debt due to…
800
700
1)
+240.9 631.6
Reduction of net debt by ~ € 140 mn
600
534.1
500
+181.1
in € mn
390.7
400
-62.5
300 +32.5
+23.4
200
-317.9
100
0
31/12/2015 Gross cash flow Dividend Hybrid coupon Total investments Working Capital & Subtotal 2007 31/12/2016
Others hybrid bond
1) Including the 2007 hybrid bond with a market value of € 222.7 mn as at December 15, 2016 and the recognition of the accrued coupon of € 12.2 mn payable for the hybrid bond for the
period 9/2/2016 – 14/12/2016 as well as the partial buyback of 2007 hybrid bonds of € 6.0 mn in the first quarter of 2016.
Note: Rounding differences may arise from automatic processing of data 18…the reclassification from equity to debt
Equity and liabilities 31/12/2015 Equity and liabilities 31/12/2016
Equity 2,054 Equity 1,849
thereof: Hybrid capital 491 thereof: Hybrid capital 266
Non-current provisions and liabilities 829 Non-current provisions and liabilities 809
Current provisions and liabilities 809 Current provisions and liabilities 979
thereof: Short-term financial liabilities 240 thereof: Short-term financial liabilities 400
Total equity and liabilities 3,692 Total equity and liabilities 3,637
► As a consequence of the exercise of the call option, the 2007 hybrid bond no
longer qualifies as equity according to IFRS and is recognized in the short-term
financial liabilities as at 31/12/2016
► Short-term financial liabilities increase to a lesser extent due to the repayment of
other debt by means of strong cash flow
Note: Rounding differences may arise from automatic processing of data 19Substantial liquidity reserve at year-end
► Cash 31/12/2016: € 197 mn
► Credit lines: € 550 mn
thereof drawn 31/12/2016: € 80 mn
thereof undrawn 31/12/2016: € 470 mn
► Term structure:
700
600
500
in € mn
400 Undrawn credit lines
300 Hybrid
200 2007
First-Call Date
100 Drawn Hybrid 2014
credit lines
0
2017 2018 2019 2020 2021
WB maturities Cash balance
Note: Term structure of gross debt; cash position and financial liabilities as of 31/12/2016 20Net debt / EBITDA clearly below 2.0 years
Treasury ratios 31/12/2014 1) 31/12/2015 31/12/2016 Covenant
Net debt / EBITDA 1.9 1.4 1.6 3.75
1) Pro-forma calculation, including 12 months of EBITDA and interest result for Tondach Gleinstätten
► Repayment period clearly below internal target of 2.0 years at year-end
despite reclassification of 2007 hybrid bond from equity to debt
► Optimized financing costs due to increased use of bank lines
► Update Corporate Family Rating by Moody’s: Ba2 │ Outlook positive
21Dividend increase by 35% to € 0.27 per share
in € mn 2015 2016
Free cash flow 135.1 246.5
Payment of hybrid coupon -20.9 -32.5
Free cash flow post hybrid coupon 114.2 214.0
Dividend 23.4 31.6
Share 20% 15%
► Conditions for reasonable and continuous increase in the dividend:
Free cash flow for the reporting year
Liquidity planning
Consideration of potential growth projects
Note: Rounding differences may arise from automatic processing of data 22Segments at a glance
Results 2016 by Segment
Revenues: € 2,973.8 mn | 0% EBITDA: € 404.3 mn | +9%
Clay Building Pipes & Pavers North Holding
Materials Europe Europe America & Others
+0% +11% +7% +28% -3% -4% -9% -16% +5% +1%
1400
1.174
1200
1000
800
in € mn
577
600 507
412
400 293
185
200 106 63 35 33 9
0
-18
-200
CBM Western CBM Eastern P&P Western P&P Eastern North America Holding & Others
Europe Europe Europe Europe
External revenues EBITDA
CBM…Clay Building Materials | P&P…Pipes & Pavers 24Results 2016 by Product Group
EBITDA margin improved to 13.6% (2015: 12.4%)
EBITDA
14% 22% 16% 9% 9%
margin
1.000 937
800
671 695
600 554
in € mn
400
200 119 112 116
93 89
11 0
0
-20
-200
Wall Roof Facade Pavers Pipes Holding & Others
Revenues EBITDA
25Clay Building Materials Western Europe
Results 2016
CBM Western Europe (in € mn) 2015 2016 Chg. in % External revenues 2016
External revenues 1,170.2 1,174.4 0
EBITDA 166.7 185.0 +11 40%
EBITDA margin 14.2% 15.8% -
► Significant organic increase in earnings compared to previous year
► Slight growth in new construction │ Investment restraint in renovation market
Realization of ongoing projects and normalization of inventory levels along the value chain have a
positive effect on the volume development in UK
Increase in sales volumes and earnings despite slight slowdown of market growth in NL
Lower sales volumes partially offset by improved average prices in BEL
Revenue and earnings growth due to higher clay block sales volumes in GER and FR
Housing activity in one- and two-family home segment below previous year´s level in CH and IT
26Clay Building Materials Eastern Europe
Results 2016
CBM Eastern Europe (in € mn) 2015 2016 Chg. in % External revenues 2016
External revenues 472.8 506.8 +7
EBITDA 82.6 105.7 +28
EBITDA margin 17.5% 20.9% -
17%
► Positive market and business development in almost all countries
► New construction and renovation supported by government subsidies
► Significant growth in revenues and earnings on account of higher clay block and
roof tile sales
Continuation of positive growth dynamics in new housing construction lead to significant sales volume
increases in Poland, Hungary, Bulgaria and Romania
Slight positive market environment in Austria, the Czech Republic and Slovakia
Market decline under the impact of persistent recession in Russia
27Pipes & Pavers Western Europe
Results 2016
P&P Western Europe (in € mn) 2015 2016 Chg. in % External revenues 2016
External revenues 592.7 576.7 -3
EBITDA 65.6 63.1 -4
19%
EBITDA margin 11.1% 10.9% -
► Plastic pipes:
Slight revenue and earnings growth
Solid development of demand results in earnings improvement in Nordic core markets
Satisfactory development and earnings contribution from the aquisition of a Finnish manufacturer
French business positively impacted by implemented structural adjustments
Order volume in the international project business clearly below record level of 2015
► Ceramic pipes:
Significant decline in revenues and earnings due to downturn in demand in German home market and
in export volumes to Eastern Europe and Middle East
28Pipes & Pavers Eastern Europe
Results 2016
P&P Eastern Europe (in € mn) 2015 2016 Chg. in % External revenues 2016
External revenues 450.8 411.5 -9
EBITDA 42.3 35.4 -16 14%
EBITDA margin 9.4% 8.6% -
► Massive delays in the tendering activity of EU-subsidised infrastructure projects
have an adverse impact on the development of both business areas
► Plastic pipes:
Significant earnings decline in Poland, Romania, Hungary, Bulgaria and Greece
Healthy development of demand in core business leads to earnings improvement in Austria and Turkey
► Concrete pavers:
Earnings drop as a result of weak demand from the public-sector and persistent price competition
Focus lies on strict cost discipline and optimization of distribution and sales activities
29North America
Results 2016
North America (in € mn) 2015 2016 Chg. in % External revenues 2016
External revenues 277.5 292.7 +5 10%
EBITDA 32.2 32.7 +1
EBITDA margin 11.6% 11.2% -
► Organic earnings improvement by 5% in the Division
Earnings contribution from the sale of non-core real estate of € 9.5 mn (2015: € 12.6 mn) │ Disposal of
two production sites for concrete products and shutdown costs for one facing brick plant total
€ 2.9 mn │ Negative foreign exchange effects of € 0.3 mn
► Growth in new construction of single- and two-familiy homes in the USA leads to
higher volumes and significant organic earnings increase
► Higher prices and sales volumes due to improved market demand in Canada
► Growing pressure from competitors have a negative impact on pricing and
earnings in our brick and plastic pipe business
30Outlook 2017
Growth in time of high volatility
► Political and economic uncertainties determine
the market environment
Interest rate and FX rate fluctuations
BREXIT and its impacts on UK and continental Europe
Greek sovereign debt crisis
Public investments in new construction and infrastructure
Elections in the Netherlands, Germany and France
Battle against high unemployment
Fears of terrorism and refugee crisis
32Market development 2017 for clay block,
facing brick and roof tile activities
Mountain Region
Midwest
Mid-Atlantic
Southeast
Market growth (>2%)
Stable development
Market decline (Market development 2017 for pipe activities
Revenues by application
8%
17%
47%
28%
Wastewater and rainwater management
Supply and transport
Building installations
Special applications
Market growth (>2%)
Stable development
Market decline (Outlook for our Divisions
► Clay Building Materials Europe
Slight growth in new construction and investment restraint
in renovation in Western Europe
> Increase in new housing construction in France and Germany
> Positive development of demand in UK in H1
> Slowdown of market growth in the Netherlands
> Stable development in Belgium, Switzerland and Italy
Positive market environment in Eastern Europe
> Continuation of positive development of demand
> New construction and renovation measures supported by
govnernment subsidies
35Outlook for our Divisions
► Pipes & Pavers Europe
Plastic pipes:
> Healthy market environment in Western Europe
> Potential recovery of demand in Eastern Europe in H2
> Stable development in the international project business
Ceramic pipes:
> Slight market improvement in European core markets
Concrete pavers:
> Slow recovery of public-sector demand
► North America
Continuation of positive trends in the one- and two-familiy
home segment
Challenging price environment in certain regions in our
brick and plastic pipe business
36Significant EBITDA growth in 2017
► Organic development includes EBITDA development
Increase in sales volumes and prices
Savings from Operational Excellence of ~ € 10 mn 440
► Not included are impacts from 430
420 415
Foreign exchange effects
410
Consolidation
in € mn
400
Sale of non-core assets
390
382
Portfolio optimization
380
► For 2017 we expect negative foreign exchange 370
effects and a positive earnings contribution from 360
the sale of non-core assets 350
EBITDA 2016 1) Organic EBITDA 2017
basis development LFL
1) Adjusted for effects from the sale of non-core assets, consolidation and portfolio optimization 37Outlook 2017
EBITDA LFL € 415 mn │ +9%
Depreciation ~ € 190 mn
Net interest result ~ € -35 mn
Working Capital in % of revenue at year-end ~ 20%
Normal capex ~ € 145 mn
Growth capex ~ € 25 mn
38Maximizing shareholder value through value
creative capital allocation
Sustainable growth of Free Cash Flow
Financial discipline
1
Net Debt / EBITDA < 2.0x at year-end
Optimization of financing costs
Spending discipline
2
Normal capex remains below depreciation until 2020
Continuous evaluation of value creative growth projects
Return capital to shareholders
3 Commitment to dividend payouts in indicative range of
10-30% of Free Cash Flow post hybrid coupon
Periodic evaluation of share buyback program
39Clear strategy for reaching our goals 2020
OPERATIONAL
ORGANIC GROWTH GROWTH PROJECTS
EXCELLENCE
Digitalization Continuous cost and Selective bolt-on
Innovative products, process optimization projects in core markets
services and solutions Portfolio optimization
GROUP EBITDA TARGET 2020 > € 600 MN
40Wienerberger Investor Relations Wienerberger AG, A-1100 Vienna, Wienerberg City, Wienerbergstrasse 11 T +43 1 60192 10221 / F +43 1 60192 10425, investor@wienerberger.com / www.wienerberger.com Thank you for your attention!
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