Wienerberger Ag · VIE:WIE
Wienerberger — Investor Day (September 2020)
58 slides from Wienerberger's investor day presentation, Sep 29, 2020
Slide 1: Wienerberger Capital Markets Day
© Alan Williams / Storey Field Wienerberger Capital Markets Day Strong Foundations for Sustainable Growth September 29, 2020
Slide 2: Disclaimer
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 correctn
Slide 3: Our speakers today
Our speakers today Heimo Scheuch Peter Johnson Peter Steiner Chief Executive Officer Chairman Supervisory Board 1st VC Supervisory Board Strategy Update and Corporate Remuneration Outlook Governance Update 3
Slide 4: Wienerberger today
Wienerberger today © Aalst/KAAN architecten, Rotterdam (Netherlands) Stockyard for pipes in Ljung, Sweden
Slide 5: Resilient, diversified and innovative
Wienerberger today Resilient, diversified and innovative 1 INNOVATIVE SYSTEM SOLUTIONS BALANCED PORTFOLIO WITH 2 DIVERSIFIED END MARKETS IMPROVED VALUE CREATION VIA 3 PERFORMANCE ENHANCEMENT 4 RESILIENT BUSINESS MODEL 5
Slide 6: Transformation to a system solutions provider
Wienerberger today 1 Transformation to a system solutions provider Innovation focus triggers gross margin Focused on system solutions growth over revenue growth CAGR 2011-2019 1), % The old Wienerberger 8.3% › Volume driven and production focused manufacturer of commodity products 6.8% Wienerberger
Slide 7: Balanced portfolio with diversified end market exposure and enhanced resilience
Wienerberger today 2 Balanced portfolio with diversified end market exposure and enhanced resilience Diversified end markets Broad geographic exposure Operating 200 plants 25% in 30 countries Infra- structure 55% REVENUE SHARE 1) New Build 20% Residential 80% Europe Renovation 10% UK 10% North Ameri
Slide 8: Improved value creation
Wienerberger today 3 Improved value creation Clear measures Significantly improved Return on Capital › Optimization of internal processes and ROCE1) development, % organizational structure 10.6% › Improved pricing strategy and product mix › Strengthened industrial setup 0.2% 2010 2019 Continuous foc
Slide 9: Enhanced cash generation and robust balance sheet
Wienerberger today 4 Enhanced cash generation and robust balance sheet prove strength also in challenging times STRONG RESILIENT OPERATING CASH FLOW EBITDA MARGIN H1 2020: € 34.6 mn H1 2020: 16.0% H1 2019: € 5.2 mn H1 2019: 17.0% ROBUST EFFICIENT BALANCE SHEET WORKING CAPITAL MANAGEMENT Net debt Wor
Slide 10: Q3 stronger than expected
Covid-19 update Q3 stronger than expected Developments in Q3 2020 › Wienerberger Q3 performance better than expected due to › price increases to cover cost inflation › positive impact of performance enhancement measures › Volume declines, especially in WBS, mostly compensated EBITDA LFL for 2020 exp
Slide 11: Exceptional 10 year track record
Wienerberger today Exceptional 10 year track record Ambitious 2020 earnings target of € 600 mn achieved one year ahead: 2019 EBITDA reported € 610 mn 2020 target for asset disposals already achieved: € 150 mn value generated through asset disposals Building on >200 years of experience Signific
Slide 12: Turnaround reflected in strong financial performance
Wienerberger today Turnaround reflected in strong financial performance 108% Revenue growth 208% EBITDA growth 3,466 610 1,664 € mn € mn 198 2010 2019 2010 2019 472% Net Income growth 17.6% EBITDA Margin at 12-year high 249 17.6% € mn 11.9% -67 2010 2019 2010 2019 12
Slide 13: Sustainability is integrated into our strategy and business model
ESG Highlights At Wienerberger, sustainability is integrated into our strategy and business model We have been reporting on our We support key international initiatives: environmental, social and societal › Wienerberger Social Charter complied with commitment annually since 2009 International Labor
Slide 14: Home stretch of Sustainability Roadmap 2020
Wienerberger on the home stretch of its Sustainability Roadmap 2020 ~ AREA TARGET ACHIEVEMENT EMPLOYEES Zero accidents - 6%1) Achieve more than 25% PRODUCTS of Group revenues from innovative products > 30% in 2019 ~ Reduce energy consumption PRODUCTION and CO2 emissions in WBS ceramic production b
Slide 15: Wienerberger Strategy 2023
Wienerberger Strategy 2023 © Alan Williams/ Storey Field Center © Alan Williams/ Storey Field Center
Slide 16: Wienerberger Group Strategy
Wienerberger Group Strategy Enabler Innovation & Digitalization GROUP STRATEGY E M&A E n n a and a b ESG Portfolio b l Become full system Strengthen our l e Increase our solutions provider in market position in Optimi- e r VALUE CREATION zation r ENERGY & WATER NORTH AMERICA within the HOUSE MANAGEM
Slide 17: Operational Excellence: Further enhancement beyond 2020
Operational Excellence Further enhancement beyond 2020 › Operational Excellence has always been part of our Performance Enhancement strategy beyond Fast Forward › Fast Forward methodology to further enhance the EBITDA contribution, € mn Group’s performance is meant to stay 70 › Further optimization
Slide 18: Special capex investments to support innovative portfolio
Innovation & Digitalization Special capex investments will further support development of our innovative portfolio › Continuously drive the decarbonization and recyclability Investments for innovation, of the product portfolio with new product design digitalization and optimization › Continue the tr
Slide 19: Dedicated investments will further improve ESG performance
ESG Dedicated investments will further improve our ESG performance › Continuous upgrade of our industrial set-up and drive ESG investments for a automation and specialization sustainable future › Roll out of existing technologies to reduce energy demand and CO2e 1) emissions in € mn 2021 2022 2023 ›
Slide 20: Value creation of € >1 bn until 2023
Wienerberger will deliver a value creation of € >1 bn until 2023 Capex allocation 2021-2023 Lifting EBITDA from own strength € mn € mn Further upside Maintenance potential 120 p.a. capex from market Special capex 80 p.a. growth/ recovery € 135 mn 1) incremental EBITDA and M&A ESG capex 60 p.a. enhan
Slide 21: Active role in further consolidating the industry
We will take an active role in further consolidating the industry Build on strong WBS position to further expand the portfolio with 1 adjacent products and piping solutions in CEE 2 Build on strong positions in WBS and WPS with adjacent 2 products and new materials to increase our system competence
Slide 22: Strong track record of value-creating deals
M&A and Portfolio Optimization Strong track record of value-creating deals Strong M&A track record Strict financial discipline 7.2 6.7 6.8 3.0 6.5 5.9 2.5 5.2 Financial 4.9 headroom 4.8 2.0 1.5 1.0 2017 2018 2019 2017 - 2019 2013 2014 2015 2016 2017 2018 2019 Avg. stand-alone multiple in the acquisi
Slide 23: Value generation through asset disposals
M&A and Portfolio Optimization Value generation through asset disposals Mid-term target for disposals of Further value generation potential non-core assets achieved through disposals › Non-core assets do not meet internal › Continuous portfolio review of operating assets requirements for with regard
Slide 24: Returning capital to shareholders
Wienerberger stockyard, UK Returning capital to shareholders Wienerberger Building
Slide 25: Strong cash generation over last 10 years
Wienerberger consistently showed strong cash generation with further enhancement in last 10 years Free cash flow › Free cash flow is defined as cash flow from € mn operating activities minus maintenance capex CAGR 6% › Strong track record of free cash flow 286.0 generation over the last 10 years › H
Slide 26: Clear commitments to use cash generation for business development
Clear commitments to use strong cash generation for further business development Capex allocation 2021-2023 € mn Maintenance capex 120 p.a. Special capex 80 p.a. ESG capex 60 p.a. M&A No guidance Clear investment plan for Strategy 2023 to deliver further growth 26
Slide 27: Returning capital to shareholders
Capital allocation Returning capital to shareholders › Strong business performance Strong increase of dividend per share1) reflected in significant increase in in € per share dividend per share › Payout 2019: 30% of free cash flow 0.60 or € 87 mn returned to shareholders 0.50 0.30 0.27 0.20 0.15 0.1
Slide 28: Hybrid bond and buyback
Capital allocation Hybrid bond and buyback › Hybrid bond issued in 2014: € 272 mn, Hybrid Hybrid Pro-forma impact current coupon 5.00% p.a. included excluded of hybrid call 1) in equity from equity › Continuous buybacks of the hybrid bond in the Equity ratio 50% 44% open market at break-even price o
Slide 29: Offering the right solutions for global trends
© Alan Williams/ Storey Field Center Offering the right solutions for global trends Fresh water pipelines in Aegina, Greece
Slide 30: Key underlying mega trends
Wienerberger 2023 We base our commercial development on key underlying mega trends These trends are shaping our business (In)House Solutions Infrastructure Solutions Lack of skilled labor Impact of climate change Construction industry faces skill for water management shortages and the need for Clima
Slide 31: Spider concept for prefabricated solutions
(In)House Solutions With the Spider concept we widen our inhouse portfolio and aim it towards prefabricated solutions 1 Convert architect’s 3D plan into circuit layout 2 Pre-cut and pre-assemble 3 Lay out ready solution at building site 4 Connect Reduces workload from 16 to 3 hours and supports soci
Slide 32: Expanding portfolio to deepen the value chain
(In)House Solutions By expanding our portfolio we deepen the value chain, offer full solutions and save time on site Ceramic roof roof tiles accessories insulation and underlays Non-ceramic accessories Ceramic wall Insulation- accessories Ceiling filled block cooling Facade solutions Aim: Increase W
Slide 33: Architectural and design services in a digital business model
(In)House Solutions Our solutions are extended by architectural and design services in a digital business model › Wienerberger experts today offer full service solutions for entire housing projects – from start to finish: › Planning and regulatory documentation › Product advice › Designing of house
Slide 34: Sustainable solutions improve indoor climate
(In)House Solutions Our sustainable solutions are perfectly suited to improve indoor climate › Building materials made of natural resources › Strong sound insulation and fire protection with zero additional insulation over the entire lifespan › High lasting value and low long-term maintenance costs
Slide 35: Key underlying mega trends
Wienerberger 2023 We base our commercial development on key underlying mega trends These trends are shaping our business (In)House Solutions Infrastructure Solutions Lack of skilled labour Impact of climate change for water management Construction industry faces skill Climate change creates more sho
Slide 36: Full system provider for smart water management
Infrastructure Solutions We will develop into a full system provider for smart water management… …to prevent floods in times of excessive rain and store the water for long periods of drought Weather station Stormwater box Raineo Road gully with manifold and filter / with manhole segregation system*
Slide 37: Soluforce: transition to renewable energy
Infrastructure Solutions Soluforce – our solution for the transition from fossil-based to renewable energy › We leverage our position in the New Energy market › Soluforce offers the first global certified pipe for hydrogen transportation › In combination with existing pressurized gas networks it is
Slide 38: Geothermics: renewable energy source
Infrastructure Solutions Geothermics - making use of a constant source of renewable energy › We offer sustainable heating and cooling system for large scale apartment projects › Wienerberger offers end-to-end design of the installation concept 38 © Architekt Dipl. Ing. Josef G. Knötzl
Slide 39: Positive EU sentiments will support our business
Positive EU sentiments will further support our business in the mid- and long-term 2020 2020+ › Green Deal still on track with › New recovery plan for Europe focus on climate neutrality, to help repair the economic transition to circular economy etc. and social damage caused by Covid-19 will boost i
Slide 40: EU Green Deal will fuel the renovation wave
EU Green Deal will fuel the renovation wave › Buildings are responsible for 1/3 of global energy consumption1) › Around 75% of the building stock across Europe is energy inefficient2) › Renovation is a key initiative addressed in the European Green Deal and central to post-Covid 19 economic recovery
Slide 41: Renovation
Renovation Our solutions improve the energy efficiency of buildings Roof system solutions > 80%1) to CO savings compared an old building stock 2 Facade system solutions CO2 savings compared > 80% 1) to an old building stock 30% of WBS revenue exposed to renovation today and further increase targeted
Slide 42: Circular economy could boost Europe's resource productivity
Circular economy could boost Europe’s resource productivity by up to 3% p.a. by 2030 › Only about 30% of plastic waste is currently recycled › Construction and Demolition Waste1) accounts for approx. 25-30% of all waste generated in the EU 1) According to the EU-Commission – C&DW consists of numerou
Slide 43: Plastic pipes are the most environmentally friendly solution
Plastic pipes are the most environmentally friendly solution for water management Impact of pipes on global warming 38.7 kg CO2 equivalent1) › Lifetime CO2e impact of a plastic -78% pipe is only 25% in comparison to a non-polymer pipe alternative › Plastic pipes have competitive 8.4 advantage for re
Slide 44: Our products – ideal for the circular economy
Our products – ideal for the circular economy Production waste (=scrap) is already 100% re-used Our product solutions can be re-used or recycled in our production processes Building partnerships and increased collaboration along all supply chains is key to improve circular economy across Europe 44
Slide 45: Governance: Our ESG Commitment
Governance Our ESG Commitment © Delfino Sisto and Marco Cappelletti / Utopia © Delfino Sisto and Marco Cappelletti / Utopia
Slide 46: Supervisory Board Key Achievements
Supervisory Board Key Achievements › Key objective is to meet international governance standards whilst remaining best- in-class by Austrian standards › Supervisory Board Chairman’s duties were executed through new Committee setups which deal with key governance and future strategic topics (Audit an
Slide 47: Feedback from external evaluations integrated into governance planning
Corporate Governance Feedback from external evaluations integrated into governance enhancement planning We consulted and listened What We Heard What We Are Doing Structured succession process for Peter Johnson in place who will Review the Chair’s succession plan stand for re-election at the AGM 2021
Slide 48: Structured Chair succession process
Supervisory Board Structured Chair succession process driven by the Nomination Committee PROFILE LONG LIST SHORT LIST EVALUATION NOMINATION DECISION DEFINITION DEFINITION DEFINITION PROCESS › Development of a › Search in › Candidates are › Assessment of › Shortlisted › Final profile based on coopera
Slide 49: Short-term incentive plan re-aligned to stakeholder expectations
Remuneration Update The short-term incentive plan re-aligned to meet stakeholder expectations Remuneration Policy – STI 2020 (pre Covid-19) Remuneration Committee Adjustments (post Covid-19) › Short-term variable remuneration for all members is capped at › As the Covid-19 developments during the cur
Slide 50: Sustainability: Our ESG Commitment
Sustainability Our ESG Commitment Wienerberger, Vienna, Biodiversity project Wienerberger, Lanaken, Biodiversity project
Slide 51: Sustainability Strategy 2020+
Sustainability Strategy 2020+ We continue our sustainability commitment and consider the bigger picture when managing our business 2023 2050 PROGRAM We are committed Wienerberger’s to NET ZERO GHG short-term emissions target in line with the EU Green Deal We are acting responsibly, improving people’
Slide 52: Sustainability targets 2023 in line with EU Green Deal
Our sustainability targets 2023 are fully in line with the EU Green Deal ENVIRONMENT SOCIAL GOVERNANCE Committed to highest Climate Protection Diversity national and Less CO 1) emissions international 15% vs. 20202e >15% Female employees in senior management governance standards and with focus on: C
Slide 53: Step-by-step towards CO2e neutrality
Step-by-step towards CO2e neutrality Rollout of existing Product innovation Breakthrough technologies and design technologies 2050 Short-term Mid-term Long-term CO2e Compensation projects neutrality ›1 Product development and design optimization (dematerialisation, recipes optimization) Measures to
Slide 54: Executive Summary
Executive Summary © Aalst/KAAN architecten, Rotterdam (Netherlands) © Hehnpohl Archiiiiitektur bda/ Linaqua Vino
Slide 55: Enhanced cash generation and robust balance sheet
Wienerberger today Enhanced cash generation and robust balance sheet prove strength also in challenging times STRONG RESILIENT OPERATING CASH FLOW EBITDA MARGIN H1 2020: € 34.6 mn H1 2020: 16.0% H1 2019: € 5.2 mn H1 2019: 17.0% ROBUST EFFICIENT BALANCE SHEET WORKING CAPITAL MANAGEMENT Net debt Worki
Slide 56: EBITDA contribution of € 135 mn until 2023
EBITDA contribution of € 135 mn until 2023 to be delivered with self-help measures and dedicated investments Capex allocation 2021-2023 Lifting EBITDA from own strength € mn € mn Further upside Maintenance potential 120 p.a. capex from market Special capex 80 p.a. growth/ recovery € 135 mn 1) increm
Slide 57: Strong foundations for sustainable growth
Wienerberger 2023 Strong foundations for sustainable growth Further enhance innovative 1 system solutions Performance Enhancement 2 beyond Fast Forward Continue sustainability 3 commitment with new ambitious targets Use strong cash generation 4 for further growth 57
Slide 58: wienerberger
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