Results in Detail Wienerberger Markets 2009 Financing and Capital Structure Strategy Side Note: Sustainability Outlook 2010

Transcription

1 Final Results 2009 Results in Detail Wienerberger Markets 2009 Financing and Capital Structure Strategy Side Note: Sustainability Outlook 200 March 24, 200 Disclaimer () Not for publication or distribution in the United States, Canada or Japan or Australia This preliminary information document (the "Presentation") has been prepared by Wienerberger AG (the "Issuer ) and is being made available to a limited number of recipients and their advisers for the sole purpose of assisting them to decide whether to proceed with a further consideration of an investment in the securities referred to herein (the "Securities"). None of the Issuer, Erste Group Bank AG Raiffeisen Zentralbank AG AG (the "Joint Bookrunners") or any other person makes any representations or warranties, express or implied, as to the accuracy, completeness or fairness of this Presentation and no responsibility or liability is accepted for its accuracy or sufficiency. 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2 Disclaimer (2) This Presentation and the offer of the Securities based on this Presentation, when made, are only addressed to and directed, in member states of the European Economic Area (other than the United Kingdom) which have implemented the Prospectus Directive (each, a relevant member state ), at persons who are qualified investors within the meaning of Article 2()(e) of the Prospectus Directive (Directive 2003/7/EC) ( Qualified Investors ). Each person who initially acquires any Securities or to whom any offer of Securities may be made will be deemed to have represented, acknowledged and agreed as at the date of this Presentation that it is a qualified investor within the meaning of Article 2()(e) of the Prospectus Directive. The information contained in this Presentation does not constitute an offer of securities for sale in the United States. The Securities have not been and will not be registered under the US Securities Act of 933, as amended (the "Securities Act") and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such terms are defined in Regulation S under the Securities Act) unless registered under the Securities Act or pursuant to an exemption from such registration. The Issuer does not intend to register the Securities under the Securities Act. This Presentation is for advertisement purposes only and nothing in this Presentation constitutes an offer to buy or the solicitation of an offer to sell Securities. A public offer in Austria will only be possible after publication of the base prospectus for the issuance programme of Wienerberger AG (the Prospectus ) and the final terms of any prospective notes (the Final Terms ). Any retail subscription orders made prior to such publications will be rejected. 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4 7 Capacity Adjustments Done 2009 Plant closures 2009 Mothballings Total Central-East Europe North-West Europe Central-West Europe North America Wienerberger Group Reduction of production capacity Wall Roof Facade % - -8% % -2% -5% Total -2% -2% -23% 8

5 9 Investments Limited to a Minimum in mn Chg. in % Maintenance capex in % of depreciation 49% 33% - Growth investments Total investments Target 200: 20 mn ( 95 mn maintenance 25 mn growth) 0

6 Inventories Considerably Decreased in mn Inventories 3/2/ /2/ mn (-23%) Target of 00 mn reduction in inventories clearly outperformed 2

7 3 Strong Increase of Free Cash Flow in mn Chg. in mn Chg. in % Gross cash flow Change in working capital ) >00 Maintenance capex Divestments and other Free cash flow ) Adjusted for changes in the consolidation range 4

8 5 Net Debt Cut by More Than Half in mn Chg. in % Equity ),59.4 2, , , Net debt, ) Including non-controlling interests and hybrid capital (00% equity according to IFRS) 6

9 7 Restructuring Completed Leading market positions - Market leader in our core business Strong capital structure - Gearing of 6% High-quality, innovative product portfolio - Plane ground blocks Dryfix system infill blocks sturmfix Utilize head start: focus on operating business 8

10 Results Key Figures 2009 in mn Chg. in % Revenues 2,43.4, Operating EBITDA ) Operating EBITDA margin 8.%.5% - Operating EBIT ) Restructuring and impairments 2) <-00 Profit after tax 3) <-00 Free cash flow Net debt ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty 2) Including the addition to a provision for an impending antitrust penalty 3) Before non-controlling interests and accrued hybrid coupon 20

11 Results 2009 by Region Revenues:,86.9 mn -25% EBITDA ) : mn -53% Central-West Europe 22% North America 8% Investments & Other -2% Central-East Europe 32% Central-West Europe 5% North America -6% Investments & Other -0% Central-East Europe 52% North-West Europe 40% North-West Europe 49% ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty 2 Change in Revenues 2009 vs ,43-25%,87-2% -% -3% Revenues 2008 Volume Development Price Development FX Revenues 2009 Note: in mn Central-East Europe North-West Europe Central-West Europe North America 22

12 Change in EBITDA by Region 2009 vs xx -53% EBITDA ) 2008 Central-East Europe North-West Europe Central-West Europe North America Investments & Other EBITDA ) 2009 Note: in mn Central-East Europe North-West Europe Central-West Europe North America ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty 23 Wienerberger Markets

13 Weakening of All Markets in 2009 Central-East Europe: partly significant decline in demand Major Western European markets at low level - Signs of stabilization in UK North America very disappointing - Rising unemployment -> Foreclosures vs. housing starts 25 Central-East Europe () Results 2009 Central-East Europe (in mn) Chg. in % Revenues Operating EBITDA ) Operating EBITDA margin 29.% 8.7% - Operating EBIT ) ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty Share of Group revenues 2009 Poland - Decline in housing starts lower capacity utilization declining margins optimization/enlargement of existing and closure of four smaller plants Czech Republic - Further market weakness competitive and price pressure imports Slovakia - Strong decline in new residential construction competitive and price pressure as a result of new capacities and imports (introduction of the euro in 2009) 32% Share of Group EBITDA % 26

14 Central-East Europe (2) Results 2009 Central-East Europe (in mn) Chg. in % Revenues Operating EBITDA ) Operating EBITDA margin 29.% 8.7% - Operating EBIT ) ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty Share of Group revenues 2009 Hungary - Macroeconomic instability most difficult market in the region extensive restructuring measures Romania - Sharp drop in building permits Wienerberger gains market share Bulgaria - Market weakness slight volumes decline gain of market share particularly against imports 32% Share of Group EBITDA % 27 North-West Europe () Results 2009 North-West Europe (in mn) Chg. in % Revenues Operating EBITDA ) Operating EBITDA margin 5.9% 4.% - Operating EBIT ) ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty Share of Group revenues % Share of Group EBITDA % Belgium - Decline in new residential construction positive effect of VAT reduction on building materials and subsidies for solar power generation equipment on roofs roof volumes stable, facing brick volumes down stable prices Netherlands - New residential construction strongly dependent on project financing (developer market) -> substantial decline driven by limited financing lower volumes in all product groups 28

15 North-West Europe (2) Results 2009 North-West Europe (in mn) Chg. in % Revenues Operating EBITDA ) Operating EBITDA margin 5.9% 4.% - Operating EBIT ) ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty Share of Group revenues % % Share of Group EBITDA % % France - Strong decline in H trend slows down in H2 clay blocks continue to gain market share facing brick and roof volumes down UK - Highest volume decline in the segment extensive shutdowns and temporary standstills H very weak, but since September sales volumes slightly above (low) prior year levels stable prices 29 Central-West Europe Results 2009 Central-West Europe (in mn) Chg. in % Revenues Operating EBITDA ) Operating EBITDA margin 9.7% 8.3% - Operating EBIT ) <-00 ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty Share of Group revenues 2009 Germany - Market further weakening from low level stable margins due to optimization in sales and administration Italy - Drop in new residential construction structural overcapacities pressure on prices focus on premium products Switzerland - Residential construction slightly weaker clay block volumes on decline, roof stable revenues and results on prior year level 22% % Share of Group EBITDA % 30

16 North America Results 2009 North America (in mn) Chg. in % Revenues Operating EBITDA ) <-00 Operating EBITDA margin 6.4% -8.9% - Operating EBIT ) <-00 ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty Share of Group revenues 2009 USA - Housing starts dropped by 39% - Extended plant standstills very low capacity utilization (<20%) due to reduction in inventories improvement of cost structure - No signs of stabilization - Stable prices 8% Share of Group EBITDA 2009 Canada - Continuing market weakness 3 Financing and Capital Structure 32

17 Strong Balance Sheet in mn Chg. in % Equity ),59.4 2, , , Net debt, Equity ratio 43% 62% 57% 62% - Gearing 73% 2% 36% 6% - ) Including non-controlling interests and hybrid capital (00% equity according to IFRS) 33 Strong Increase of Free Cash Flow and Net Cash Flow in mn Chg. in mn Chg. in % Gross cash flow Change in working capital ) >00 Maintenance capex Divestments and other Free cash flow Growth investments Dividend / hybrid coupon 2) Net cash flow >00 ) Adjusted for changes in the consolidation range 2) Including dividends paid to and other changes in non-controlling interests, dividend payments from associates and purchase of treasury stock 34

18 Rigorous Reduction of Net Debt (3/2/2008 3/2/2009) in mn Net debt 3/2/2008 Gross cash flow Total investments Divestments Hybrid coupon Working capital & others Capital increase Net debt 3/2/ Covenants Waiver / amendment of existing covenants from June 30, 2009 to December 3, 200 Thereafter return to original covenants Covenants from June 30, 2009 Net debt / operating EBITDA ) Operating EBIT ) / interest result Tangible net worth / (Total Assets minus goodwill) Old <3.0 > New <3.75 2) - >35% Target: Net debt / operating EBITDA < 2.5 Valid to Dec. 3, 200 Suspended up to Dec. 3, 200 End of the credit period (205) 3/2/ % Note: for bank covenants, hybrid capital is considered 00% equity; hybrid coupon is not interest ) Before restructuring costs and impairment charges to property, plant and equipment and goodwill, and the addition to a provision for an impending antitrust penalty 2) This is permitted to rise to 4.0 on two occasions 36

19 Term Structure as of December 3, in mn Bond: 400 mn Refinancing requirements low through end of : scheduled maturity for 2005 bond since Tender Offer 2005 Bond / Issue of New Bond 38

20 Overview of the Transactions Tender offer for 2005 bond (due in April 202) - Tender at 00% - Maximum volume 200 million Issue of new bond - Up to 200 million - Denomination,000 and 4¼-year term Improvement of term structure up to 203 Increase in financial flexibility 39 Tender Offer Schedule Announcement Settlement date March 200 April 200 Offer period March 3 until April 9 Tender results 40

21 Emission of New Bond Terms of the Notes 200 mn 4.875%* Notes Volume Up to 200 mn Denomination,000 Coupon 4.875%* p.a., payable annually Tenor 4¼ years, bullet Bookbuilding March 24 until March 25, 200 Subscription period March 29 until March 3, 200 Payment date April 7, 200 Redemption July 7, 204 at par Listing Luxemburg, Official List ISIN AT0000A0H999 * The final coupon rate will be determined and disclosed immediately before the offering period 4 Bank Consortium Erste Group Bank AG Raiffeisen Zentralbank Österreich AG 42

22 Wienerberger Bond Attractive Investment With Solid Foundation Solid foundation - Strong capital structure (gearing of 6%) - Strong free cash flow (+28% in crisis year 2009) - Experienced management (successful restructuring) Attractive investment %* coupon (vs. low interest rates) - Reliable payment of coupons and interest in the past, also in difficult years * The final coupon rate will be determined and disclosed immediately before the offering period 43 Wienerberger Strategy 44

23 Focus Remains on Free Cash Flow Maximization Wienerberger Wall, Facade, Roof, Surface Free Cash flow Maximization Growth through innovative products Plane ground blocks / Dryfix System solutions Sustainability in production process and in technical properties of bricks Growth through unutilized capacities Mothballed capacity: - 0% wall - 20% facade (incl. USA) 30-40% through better utilization Growth through development / expansion of markets Intensify marketing / distribution Selective expansion in core business (smaller, profitable acquisitions); focus particularly on Bulgaria, Romania and the Balkans Strengthen position in the renovation market 45 Strategy 200 Focus on operating business and products - Enforce sales and distribution: further strengthen customer relationships - Differentiate from competitors by premium and innovative products Further reduce working capital Grow with the markets benefit from operational leverage of the business Use crisis as a chance for smaller, profitable acquisitions - Target: CFROI > 6% in third year after the investment 46

24 Strategy Product Group Wall Further development and rollout of country specific product solutions - Specific insulation/acoustic/mechanical requirements - Building traditions - Construction costs Further strengthen customer relationships - Increase sales efforts - Offering system solutions - Partner for housing concepts (developers, architects) Increase share of premium products from 20% to 40% in the mid-term 47 Strategy Product Group Facade Improve profitability by - Efficient plant structure after restructuring - Better capacity utilization Benefit from possible market rebound in the USA Strengthen market positions / expand market shares - Continuous product development - Strengthen sales and distribution - Twin wall system as technical solution for low energy houses 48

25 Strategy Product Group Roof Grow with the market (focus on regional markets) Differentiate from competition through innovative products Expand strong market positions in renovation market Benefit from new trading business opportunities (KoraTech ) 49 Side Note: Sustainability at Wienerberger 50

26 Principles of Sustainability For Wienerberger sustainability means: - Focus on economic, ecological and social aspects - Development and production of products from natural raw materials Sustainability is an integral part of our success Wienerberger has implemented numerous measures to support sustainability since 200 Corporate governance as commitment to compliance with strict principles of good management and transparency 5 Wienerberger Sustainability Report 2009 First report published parallel to annual report Annual sustainability report will document progress Strengthening of strategic focus Goal: positioning as reliable partner for sustainable and energy-efficient construction 52

27 Insulation Alone Doesn t Make a House Energy-efficient Primary energy requirements (PER) as key indicator: - Heating energy demand only represents 0% of total energy requirements in many cases - Remaining 90%: warm water, electricity, ventilation and other Integrated view of buildings required (= building solution ) Only possible and reasonable based on PER Consequences: - Focus on eco-balance of products - Introduction of PER as indicator for construction and housing subsidies - Development of really energy-efficient building solutions (quality of building envelope; heating, ventilation and AC; utilization of alternative energy sources) Future measures: - Further development of e 4 house concept as system approach - Pursuit of certification by national/european agencies 53 Wienerberger Tomorrow: System Provider Today Tomorrow Brick producer Producer of building elements Blocks + mortar Statics, sound, thermal insulation, fire resistance System provider (energy-efficient brick house) Readily designed and calculated Partnerships with component producers 54

28 Outlook Outlook 200 Visibility Limited North America / UK Continental Europe CEE / Emerging Markets Market UK: slight upward trend North America: bottoming out, uncertainty about further development Market Downward trend slowing GER: slight improvement expected NL: decline expected B: further slight weakening F: slight improvement possible I: competitive pressure Market No turnaround visible yet Further development unclear 56

29 Our Major Concerns vs. Upside Potential Availability of financing Rising unemployment Low consumer confidence Increase of inflation Increase of interest rates Development of foreclosures in the US Faster than expected recovery Access to financing easing Pent-up demand in CEE can boost sales Stronger governmental spending on housing markets 57 Very Weak Q 200 Due to Bad Weather Most severe winter in over 20 years in Europe and the USA - Construction at low level in all countries - Sharp volume declines at the beginning of the year - Market evaluation more difficult because of the weather Negative operating EBITDA expected for Q 58

30 Dividend Recommendation for 2009 Capital increase in September 2009 (net proceeds of 320 mn) Visibility still limited Careful use of proceeds to create value Waiver of dividend 59 Despite Low Visibility and Weak Q: Improvement in Earnings Expected For 200 Cost savings Lower energy bill Lower interest result + Capacity reserves 0% wall (mothballed) 20% facade incl. USA (mothballed) 30-40% from better utilization Increase in earnings 60

31 Wienerberger Investor Relations Wienerberger AG, A-00 Vienna, Wienerbergstrasse Tel , Fax Appendix: Wienerberger Group Wienerberger at a Glance Market Positions Product Groups Competitive Advantage Shareholder Structure 62

32 Wienerberger at a Glance International building materials group - 27 countries + 5 export markets plants in Europe, North America and India Founded 89 in Vienna Focus on ceramic based building materials - Clay blocks (wall) - Facing bricks (facade) - Clay roof tiles (roof) - Pavers (surface) Listed on Vienna Stock Exchange: 00% free float 63 Wienerberger Brick Markets in Europe Europe (total): No. Clay Blocks: - No competing international groups - Mainly family businesses (local producers) - Wienerberger the only multinational player Facing Bricks: - Family businesses (local producers) as main competitors - CRH and HeidelbergCement in selected countries Wienerberger plants Wienerberger export markets # Market positions with clay blocks and / or facing bricks 64

33 Wienerberger Roofing Markets in Europe Europe (total): No. in clay roof tiles Major competitors: Monier (formerly Lafarge Roofing), Etex, Imerys, Terreal Some privately owned mid-size competitors in Germany Wienerberger plants Wienerberger export markets JVs Bramac (50%) and / or Tondach Gleinstätten (25%) # Market positions in clay roof tiles and / or concrete roof tiles 65 Wienerberger Brick Markets in North America USA: 5 major players totaling ~65% of market share Main competitors: Boral, ACME, HeidelbergCement and CRH Canada: Market entry in 2007 West 3% 2 6 Southwest 20% Midwest 20% 6 Ontario Quebec Southeast 50% Northeast 7% Note: Data below regions = share of total brick consumption within USA # Market positions with facing bricks 66

34 Restructuring Completed Restructuring costs and impairment of assets: 53.7 mn mn cash out mn special write-downs mn impairment of assets Restructuring program Impairment charges to goodwill in mn North America North-West Europe Central-West Europe Central-East Europe Wienerberger Group Competitive Advantage of Wienerberger in the Brick Industry Cost Leadership Know-How Transfer Leadership in technology Economies of scale Fast adaptation of fixed cost base to market conditions Transfer of engineering know-how across operations Leverage innovation process and subsequent roll-out across markets Efficient Plant Network Optimization of plant network (transportation radius, capacity optimization, capacity adjustments) Offering broad product range Customer Access Better and direct access to customers Adaptations to local preferences Brand Recognition Capital High market recognition for Wienerberger products Premium relationships with large building materials distributors Better access to capital compared to small local players Strong balance sheet and regained financial flexibility post capital increase 68

35 Wienerberger Shareholder Structure by country Northern Europe 3 % Germany 5 % Switzerland 2 % France 6 % Other 6 % USA 36 % 00% free float One major institutional investor disclosed: - Dodge & Cox, USA, owns more than 0% of the shares Austria 3 % Canada % UK & Ireland 28 % Status: December mn shares issued 69