Wienerberger AG · VIE:WIE
Wienerberger — Shareholder Meeting (May 2014)
59 slides from Wienerberger's shareholder meeting presentation, May 16, 2014
Slide 1: 145th Annual General Meeting of Wienerberger AG
145th Annual General Meeting of Wienerberger AG May 16, 2014 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 b
Slide 2: Agenda
Agenda 1 Overview Financial Year 2013 and Markets 2 Results 2013 and Wienerberger Share 3 Corporate Governance and Remuneration 4 Q1 and Outlook 2014 5 Strategy of the Wienerberger Group 3 Overview Financial Year 2013 1 and Markets 4
Slide 3: Difficult Market Environment in 2013
Difficult Market Environment in 2013 WB management assessment: SFH starts 2013 Partially significant USA: Positive development declines in F, NL, B, PL, CZ and HU Mountain Region +9% Midwest -17% Mid-Atlantic -11% -5% -1% -5% -6% SFH +15% -5% -22% -8% -3% Southeast Source: U.S. Census Bureau (growth
Slide 4: Successful Diversification Strategy Yields Stabilization of Earnings Development
Successful Diversification Strategy Yields Stabilization of Earnings Development CBM Europe P&P Europe North America 8% Revenues 2013 53% 39% 200 184 200 200 op. EBITDA in € mn 171 160 160 160 120 120 100 120 80 80 67 80 40 40 40 13 10 0 0 0 2012 2013 2012 2013 2012 2013 CBM…Clay Building Materials
Slide 5: Highlights 2013
Highlights 2013 Operational goals were met: 9 13% growth in revenues: € 2,663 mn 9 9% growth in EBITDA: € 267 mn 9 Sound revenue and earnings growth despite difficult market environment and unfavorable weather at the beginning of the year 9 Dividend proposal: 12 Eurocent per share 9 Optimization Mea
Slide 6: Earnings Increase in Pipes & Pavers Europe Division
Earnings Increase in Pipes & Pavers Europe Division due to Consolidation of Pipelife Significant revenue and earnings growth External revenues 2013 9 € 1,029 mn (+45%) EBITDA 2013 9 € 100 mn (+49%) Consolidation effect Pipelife 9 Revenues: € 348 mn 9 EBITDA: € 31 mn 11 Pipes & Pavers Europe Di
Slide 7: Strong Q4 in CBME Division Cannot Compensate H1 Decline
Strong Q4 in CBME Division Cannot Compensate H1 Decline H1 affected by severe weather H2 shows volume growth in all product groups and an increase in operating EBITDA Price increases in line with cost inflation in Western Europe | Proactive price adjustments result in price declines in Eastern
Slide 8: Income Statement 2013
2 Results 2013 and Wienerberger Share 15 Income Statement 2013 in € mn 2012 2013 Chg. in % Revenues 2,355.5 2,662.9 +13 Operating EBITDA 1) 245.5 266.5 +9 Operating EBITDA margin 10.4% 10.0% - Depreciation -214.5 -211.2 -2 Operating EBIT 1) 31.0 55.3 +78 Operating EBIT margin 1.3% 2.1% - Restructuri
Slide 9: Consolidation Effect Outweighs Organic Revenue Decline in 2013
Consolidation Effect Outweighs Organic Revenue Decline in 2013 2.800 +15% 2,662.9 2.600 Revenues increased by 13% +13% 2.400 2,355.5 0% 1% organic volume -1% decline -1% in € mn 2.200 Stable average prices 2.000 -1% FX effect 1.800 15% revenue change related to Pipelife 1.600 Revenue Sales S
Slide 10: Loss After Tax 2013: € 7.8 mn
Loss After Tax 2013: € 7.8 mn in € mn 2012 2013 Chg. in % EBIT -21.7 64.7 >100 Income from investments in associates 4.5 -2.6 <-100 Interest and similar income 10.7 7.8 -27 Interest and similar expenses -61.4 -63.8 +4 Other financial results 31.7 -9.2 <-100 Financial results -14.5 -67.8 <-100 Profit
Slide 11: Schlagmann; Implementation of Restructuring Program
Schlagmann Producer of clay blocks 4 plants in the south of Germany (Bavaria) Modern and efficient plant network 50% Wienerberger | 50% family-owned Consolidated at equity in financial results Revenue 2013: ~ € 60 mn Earnings increase in 2013 21 Implementation of Restructuring Program
Slide 12: Sale of Non-operating Assets in the Period 2012-2016
Sale of Non-operating Assets in the Period 2012-2016 Carrying Amount as of Investment property (non-operating 31/12/2013 assets) with an historical book value of € 156 mn on the books as of 31/12/2013 H&O 14% NA Carrying amount of € 78 mn P&P 8% as of 31/12/2013 Europe CBM Europe 5% Roughly 50
Slide 13: Cash Flow Development
Cash Flow Development in € mn 2012 2013 Chg. in € mn Chg. in % Gross cash flow 127.0 164.6 +37.6 +30 Change in working capital 1) 102.5 26.2 -76.3 -74 Normal capex -105.3 -106.0 -0.7 -1 Divestments and other 39.4 8.0 -31.4 -80 Free cash flow 163.6 92.9 -70.7 -43 Growth capex -163.4 -0.7 +162.7 +100
Slide 14: Balance Sheet as of 31/12/2013
Balance Sheet as of 31/12/2013 in € mn 31/12/2012 31/12/2013 Non-current assets 2,840.3 2,662.5 thereof property, plant and equipment 1,803.1 1,663.3 Current assets 1,299.4 1,548.8 thereof cash and cash equivalents 242.3 496.7 Balance sheet total 4,139.7 4,211.4 Equity 1) 2,363.7 2,254.2 Non-current
Slide 15: Development of Net Debt in 2013
Development of Net Debt in 2013 700 602.0 +106.7 600 538.9 500 +32.5 -48.3 +10.6 400 -164.6 in € mn 300 200 100 0 31/12/2012 Gross Cash Flow Dividends Hybrid Coupon Total Investments Working Capital & 31/12/2013 received/payed Others 29 Strong Liquidity and Balanced Term Structure Cash 31/12/2013:
Slide 16: Treasury Ratios
Treasury Ratios 3) Treasury Ratios 31/12/2012 31/12/2013 Covenant Net debt / operating EBITDA 1) 2.2 2.0 <3.50 Operating EBITDA 1) / interest result 2) 5.0 4.8 >3.75 1) Adjusted for non-recurring income and expenses; Calculated based on 12-month EBITDA 2) Calculated based on 12-month interest result
Slide 17: Clay Building Materials Western Europe
Clay Building Materials Western Europe Results 2013 Share of Group Ext. Share of Group CBM Western Europe (in € mn) 2012 2013 Chg. in % Revs. 2013 EBITDA 2013 External revenues 1,129.6 1,089.9 -4 Operating EBITDA 1) 136.5 131.1 -4 41% 49% Operating EBITDA margin 12.1% 12.0% - Operating EBIT 1) 31.8
Slide 18: Pipes & Pavers Western Europe
Pipes & Pavers Western Europe Results 2013 Share of Group Ext. Share of Group P&P Western Europe (in € mn) 2012 2013 Chg. in % Revs. 2013 EBITDA 2013 External revenues 392.2 592.8 +51 Operating EBITDA 1) 44.1 65.2 +48 Operating EBITDA margin 11.2% 11.0% - 25% 22% Operating EBIT 1) 27.9 39.3 +40 1) A
Slide 19: North America Results 2013
North America Results 2013 Share of Group Ext. Share of Group North America (in € mn) 2012 2013 Chg. in % Revs. 2013 EBITDA 2013 External revenues 193.8 224.7 +16 8% 5% Operating EBITDA 1) 9.8 13.2 +35 Operating EBITDA margin 5.1% 5.9% - Operating EBIT 1) -14.7 -9.3 +37 1) Adjusted for non-recurring
Slide 20: Individual Financial Statement of the Wienerberger AG
Individual Financial Statement of the Wienerberger AG 39 Wienerberger AG Serves as Holding Company of the Wienerberger Group Wienerberger AG is the parent company of the Wienerberger Group As such Wienerberger AG fulfills the functions of a holding company - Strategic development of the Wienerbe
Slide 21: Balance Sheet of the Wienerberger AG as of 31/12/2013
Balance Sheet of the Wienerberger AG as of 31/12/2013 (according to UGB) in € mn 31/12/2012 31/12/2013 Property, plant and equipment 3,584.9 3,865.5 Current assets 597.9 789.6 thereof cash and bank balances 48.2 101.2 Deferred expenses and accrued income 3.1 4.1 Balance sheet total 4,185.9 4,659.2 E
Slide 22: Proposal for the Use of Profit Available for Distribution 2013
Proposal for the Use of Profit Available for Distribution 2013 in € mn 2012 2013 Net profit for the year 14.0 17.4 Profit carry forward of previous year 1.2 1.3 Profit available for distribution 15.2 18.8 Dividend payment less treasury stock 13.8 13.8 Profit carry forward 1.3 5.0 Dividend proposal
Slide 23: Wienerberger Has a Widely Diversified, International Shareholder Structure
Wienerberger Has a Widely Diversified, International Shareholder Structure 117.5 mn shares of zero par value Shareholder Structure by Country Listing in the Prime Market segment of the Other Vienna Stock Exchange PL 2% 7% 100% free float NOR 3% CH 3% Free float is held by Austrian and GER 4%
Slide 24: Corporate Governance and Remuneration
3 Corporate Governance and Remuneration Corporate Governance and Risk Management Full commitment to Austrian Corporate Governance Code (high transparency) Risk management system with annual risk evaluation implemented Audit of the Internal Control System conducted by Internal Audit department
Slide 25: High Corporate Governance Standards
High Corporate Governance Standards Supervisory Board undergoes self evaluation on regular basis Measures for improvement of efficiency are defined New remuneration scheme for Managing Board and Top-Management is in-line with international standards 49 Remuneration Scheme for Top-Management
Slide 26: Long-Term Variable Remuneration for Managing Board
Long-Term Variable Remuneration for Managing Board and Selected Top-Managers (LTI program) Members of the Managing Board of Wienerberger AG as well as selected Top-Managers are eligible to the new remuneration scheme; eligible Top-Managers of the following groups are selected every year: - Managin
Slide 27: Short-Term Variable Component
Remuneration Scheme for the Managing Board (2/4) Short-Term Variable Component Targets for following year are defined by the Supervisory Board Short-Term Variable Component : - Bonus linked to financial targets (75%; EBITDA und free cash flow) and strategic targets (25%) - If targets are met bon
Slide 28: Summary of Variable Remuneration
Remuneration Scheme for the Managing Board (4/4) Summary of Variable Remuneration Managing Board waived bonus in 2012 due to restructuring program Targets were met in part during 2013 Payout of short-term bonus is effected in 2 installments, payout of LTI program in 3 installments Var. Remuner
Slide 29: Remuneration Scheme of Supervisory Board
Remuneration Scheme of Supervisory Board (Unchanged Since 2011) Index fixed remuneration for Supervisory Board: - Member: € 15,000 - Vice-chairmen: € 22,500 - Chairwoman: € 30,000 Index fixed remuneration for Committee: - Member: € 7,500 - Vice-chairmen: € 11,250 - Chairman: € 15,000 Attendanc
Slide 30: Business Development in Q1 2014
4 Q1 and Outlook 2014 59 Business Development in Q1 2014 Benefited from Mild Weather in Europe 9 Mild weather in Europe translates into strong volume growth compared to weak Q1 2013 9 Significant growth of Group revenues and earnings 9 CBM Western Europe records most significant earnings increase 9
Slide 31: Strong Increase in Revenues and Earnings
Strong Increase in Revenues and Earnings Revenue: Operating EBITDA 1): € 584.6 mn € 28.1 mn (Q1 13: € 491.9 mn | +19%) (Q1 13: € 2.1 mn | >100%) Net Debt: Gearing: € 733.1 mn 33.7% (31/3/13: € 877.8 mn | -16%) (31/3/13: 38.6% | -4.9%p) 1) Adjusted for non-recurring income and expenses 61 Organic Vol
Slide 32: CBM Western Europe with Significant Increase in Earnings in Q1 2014
CBM Western Europe with Significant Increase in Earnings in Q1 2014 35 +4.4 30 +5.8 28.1 -1.9 -1.2 25 -1.2 +20.3 20 in € mn 15 10 5 2.1 0 EBITDA CBM CBM P&P P&P North Holding & EBITDA Q1 2013 WE EE WE EE America Others Q1 2014 1) Adjusted for non-recurring income and expenses CBM … Clay Building Mat
Slide 33: Stabilization to Slight Growth of Housing Starts in Europe
Stabilization to Slight Growth of Housing Starts in Europe | Growth in the USA WB management forecast: SFH starts 2014 Mountain Region Midwest +10% -9% Mid-Atlantic +5% +2% -1% -1% 0% SFH +15% 0% -14% -3% -2% +2% +5% Southeast -4% Source: Management expectation (SFH starts) +2% Market growth (>2%) S
Slide 34: Clay Building Materials Europe: Outlook 2014
Clay Building Materials Europe: Outlook 2014 Moderate volume growth expected in 2014 Price increases should cover cost inflation - Expectation: Price increases ~ 1.5% | Cost inflation ~ 2.0% - Q1 price increases in Eastern Europe need to be confirmed in Q2 to reliably assess the pricing environm
Slide 35: Pipes & Pavers Europe: Outlook 2014
Pipes & Pavers Europe: Outlook 2014 Pipelife - Stable development of European core markets - 2013 record result in project business is unlikely to be matched in 2014 - Slight earnings decline possible Steinzeug-Keramo - Slight revenue growth - Significant earnings growth as non-recurring costs d
Slide 36: What happened at Wienerberger since 2007?
5 Strategy of the Wienerberger Group 71 What happened at Wienerberger since 2007? We have geared Wienerberger towards future growth We have repositioned Wienerberger - Broadening of Core Business We have overcome the - Portfolio Optimization crisis together - Product Innovation and System Solutions
Slide 37: Comprehensive Restructuring Program
Comprehensive Restructuring Program We have geared Wienerberger towards future growth 1 We have repositioned Wienerberger We have overcome the crisis together 73 We Have Adjusted Our Structures to the Market Environment Operating EBITDA Reduction of fixed costs by € 250 mn 600 551 ~ 75 plants cl
Slide 38: Strengthened Balance Sheet and Financial Discipline
We Have Strengthened Our Balance Sheet and Are Committed to Financial Discipline Working Capital in % of Revenues Strict Working Capital Management 32% 28% Implementation of a Group wide 24% 20% Supply Chain Management 16% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Term Structure as of 31/12/2
Slide 39: Repositioning of the Wienerberger Group
Repositioning of the Wienerberger Group We have geared Wienerberger towards future growth 2 We have repositioned Wienerberger - Broadening of Core Business We have overcome the - Portfolio Optimization crisis together - Product Innovation and System Solutions 77 Four Transactions to Broaden the Core
Slide 40: New Organizational Structure with Strong Management
New Organizational Structure with Strong, Well-Established Management Wienerberger Clay Building Pipes & Pavers North America Materials Europe Europe Clay blocks Plastic pipes Facing bricks Facing bricks Ceramic pipes Concrete products Roof tiles Concrete pavers Plastic pipes 79 Br
Slide 41: Successful Diversification Strategy Yields Stabilization of Earnings
Successful Diversification Strategy Yields Stabilization of Earnings CBM Europe P&P Europe North America 8% Revenues 2013 53% 39% 200 184 200 200 Op. EBITDA in € mn 171 160 160 160 120 120 100 120 80 80 67 80 40 40 40 13 10 0 0 0 2012 2013 2012 2013 2012 2013 CBM…Clay Building Materials | P&P…Pipes
Slide 42: The Product World of Wienerberger
The Product World of Wienerberger CBM Europe P&P Europe North America Some examples from the Wienerberger world… 83 Ceramic Pipes from Steinzeug-Keramo are Cradle to Cradle® Certified Our ceramic pipes meet demanding ecological criteria of the Cradle to Cradle® certification STEINZEUG-KERAMO. Ce
Slide 43: Carbon Neutral Vitrified Clay Pipes
For Future Generations: Carbon Neutral Vitrified Clay Pipes Steinzeug-Keramo produces carbon neutral vitrified clay pipes with innovative fast-firing technology in Germany All emissions (from mining of raw materials up to construction site delivery) are offset by tested and registered climate pr
Slide 44: Pipelife Holds the World Record for Extruded Plastic Pipes
Pipelife Holds the World Record for Extruded Plastic Pipes Pipelife is the leading producer of Long Length Large Diameter PE pipe systems The innovative pipes with a diameter of up to 2.5 meters and a length of up to 600 meters are shipped worldwide, e.g. to: - Ghana - Algeria - Venezuela - Spai
Slide 45: Construction and Maintenance Costs in Comparison
Construction Costs in Comparison (U-Value = 0.18 W/m²K) Concrete Timber Frame Brick House Internal plaster € 10 € 10 Plasterboard (internal) € 20 External wall, on site concrete construction, € 55 d = 24 cm (€ 230/m³) Steel reinforcement ca. 15 kg/m² a € 1.3/kg € 20 Timber frame construction with in
Slide 46: Investment in Insulation Filled Clay Blocks
Wienerberger Invests in Production Capacity for Insulation Filled Clay Blocks in AT and CZ Investment in a production line for the top product Porotherm W.i. in Haiding, Austria and Novosedly, Czech Republic Stone wool is integrated in the clay block as insulation material Construction time an
Slide 47: Endurance RS4 Structural Brick in the USA
Load-Bearing Clay Block Walls in the USA: The Endurance RS4 Structural Brick Traditionally load-bearing walls are built using timber frame construction in the USA Wienerberger brings clay block for load-bearing external walls to the US market Clay block has compelling benefits - Good insulatio
Slide 48: Office Building Without Heating System
Office Building Without Heating System Office Building without heating system or air conditioning in Lustenau, Austria People, lamps and computers are the only heat sources Massive brick walls made from Porotherm N+F, high ceilings and deep embrasures maintain room temperatures of 22-26°C 95 F
Slide 49: Capital Allocation Strategy
Capital Allocation Strategy Wienerberger Business Model Strong Cash Flow Generation 1 2 Growth Dividends Debt reduction Organic Growth Investments 3 3 97 Future Growth Along a Clear Strategy 1 2 Organic Growth Potential Growth Investments Utilize existing capacity (especially in Clay Selective,
Slide 50: Clear Strategy for Each Business Unit
Clear Strategy for Each Business Unit Wienerberger AG Clay Building Pipes & Pavers North America Materials Europe Europe 99 Clear #1 Market Position in All of Our Core Markets in Europe Clay Building Materials Europe 1 1 1 1 2 3 3 1 2 1 1 1 2 1 1 2 4 1 1 1 1 1 1 1 1 1 1 4 1 1 1 Market positions 1 Cl
Slide 51: Clay Building Materials Europe Strategy
Clay Building Materials Europe Strategy Operational • Continuous optimization of plant network Excellence • Reduction of energy consumption • Roll-out of innovative products (e.g. infill brick) Market Orientation • One-stop shop solution for roofs • Emphasize marketing efforts • Strengthening of bus
Slide 52: Pipelife Market Position and Strategy
Top 3 Market Position in the Relevant Markets of Our Applications Pipelife Core markets: Pipelife plants Pipelife sales offices 103 Pipelife Strategy Operational • Improve margins Excellence • Continuous optimization of efficiency • Increase revenue share of accessories Innovative • Focus on system
Slide 53: Steinzeug-Keramo Position and Strategy
Clear #1 Position in Our European Core Markets Steinzeug-Keramo Core markets: Steinzeug-Keramo plants Steinzeug-Keramo export markets 105 Steinzeug-Keramo Strategy • Increasing need for renovation of existing Organic Growth in sewage networks Europe • Grow market share in Eastern / Southern Europe •
Slide 54: Semmelrock Position and Strategy
Clear #1 Position in Central-Eastern Europe Semmelrock Core markets: Semmelrock plants Semmelrock export markets 107 Semmelrock Strategy • Improve capacity utilization Organic Growth • Grow market share in relevant markets • Roll-out of innovative products in all CEE Product markets Innovation • Inc
Slide 55: Clear Strategy for Each Business Unit
Clear Strategy for Each Business Unit Wienerberger AG Clay Building Pipes & Pavers North America Materials Europe Europe 109 Clear #1 Position in Our Relevant Markets North America 1 1 2 3 3 2 2 1 2 1 1 1 1 5 4 1 Market positions 1 Facing bricks 110
Slide 56: North America Strategy
North America Strategy Operational • Utilize strong industrial base Excellence • Improve capacity utilization • Sales excellence / building expert Customer • Optimization of distribution channels, Orientation logistics and product portfolio • Strengthening of business activities in core Growth Proje
Slide 57: Summary: Group Summary
Summary 113 Group Summary Diversification strategy has added strong and stable businesses Wienerberger has a clear strategy for all business units Wienerberger is well positioned to benefit from strong industrial base through operating leverage in volume recovery 114
Slide 58: Group Summary
Group Summary Continuous optimization is part of our corporate culture Product innovation, system solutions and customer orientation are central to our growth strategy Value creating portfolio optimization measures are an important part of our forward strategy 115 The Homework Is Done – Wiener
Slide 59: Our Goals for 2014
Our Goals for 2014 Join Us on Our Course Return to Profit Zone Operating EBITDA of ~ € 300 mn 117