Transcript 20021126 Results Q3/2002 - Presentation of the Managing Board

Press Conference
Report on the third
quarter 2002,
Outlook
and Strategy
Vienna, November 26, 2002
January to September 2002
Highlights
Return to earnings power
Profitable growth
Decisive change in shareholder structure
January to September 2002
Results

Sales +8% to € 1,270.2 mill. (organic +2%)

Operating EBITDA +35% to € 242,1 mill.

Profit after Tax from 29.3 to € 83.2 mill.

Earnings per share € 1.25
Economic conditions

Ongoing downward-adjustments of forecasts on
economic growth

Slow-down in economy in Western Europe

Ongoing decline in housing starts in Germany

Uncertainty about US economy

Growth in Eastern Europe

slight slow-down,
but significantly better than Western Europe
January to September 2002
Results

Significant rise in earnings depite advers business climate
due to internal strengthening

Significantly higher results in all segments

Contribution Hanson BCE:


Sales: € 69.9 mill., EBITDA: € 9.3 mill.
Non-recurring result in total: + € 0.9 mill.

Non-recurring income: € 27.2 mill.

Non-recurring expenses: € 26.3 mill.
(€ 3.7 mill. cash-out)
Wienerberger Group
in € million
1-9/2001
1-9/2002
change
in %
Sales
1,179.6
1,270.2
+8
179.0
242.1
+35
Operating EBIT 1)
65.2
130.4
+100
Profit before tax
35.3
101.6
>100
Profit after tax
29.3
83.2
>100
11,331
11,510
+1
Operating EBITDA 1)
Employees
1) Adjusted for non-recurring income and expenses
Results by Segment
40%
37%
35%
35%
31%
Sales
EBITDA
30%
25%
25%
20%
19%
20%
17%
16%
15%
10%
-1%
5%
1%
tat
e
Re
al
of
ing
I
Ro
&
Pi
pe
Es
nv
.
SA
Br
ick
sU
E
Br
ick
sW
Br
ick
sC
-5%
EE
0%
Wienerberger Group
Value Management
in € million
1-9/2001 1)
1-9/2002
change
in %
Earnings per share (in €)
n.a.
1.25
-
Adjusted earnings per share (in €) 2)
n.a.
1.44
-
Free Cash-flow
n.a.
64.7
-
Capital expenditure
n.a.
67.5
-
Acquisitions
n.a.
66.9
-
EVA 3)
n.a.
19.4
-
1) Complete IAS 34 quarterly financial statements not available as of Sept. 30, 2001
2) Before amortization of goodwill, excluding non-recurring income and expenses
3) WACC 1-9/2002: 7.0%
Wienerberger Goup
Corporate data
in Mio. €
31.12.2001
30.09.2002 change
in %
Equity 1)
1,008.0
993.1
-1
Capital Employed
1,613.9
1,571.9
-3
Balance sheet total
2,431.9
2,486.4
+2
66.9
67.4
-
Gearing
1) Equity plus minority interest
in %
Markets and
activities
Bricks Central and Eastern Europe
Market conditions

120 mill. inhabitants

Backlog demand in quality housing

Bricks: clear No. 1 in wall building materials

Wienerberger with strong market positions

Growth

Positive influence through expansion of European
Union
Bricks Central and Eastern Europe
Highlights

Better results in all markets except Czech Republic

Measures:

Takeover of hollow brick plant Lajsi in Poland

Acquisition of concrete paver plant in Poland by
Semmelrock

Integration of two Hanson facing brick plants in Poland

Construction start for hollow brick plant in Romania
Bricks Central and Eastern Europe
Strategy and Outlook

Expected growth for 2003

Strategy:

Ongoing growth and optimization

Utilization of possibilities to expand in all markets
(bolt-on)

Expansion especially in Poland and Romania, and for
Semmelrock concrete pavers
Bricks Central and Eastern Europe
in € million
1-9/2001
1-9/2002
change
in %
Sales
217.8
256.5
+18
Operative EBITDA
60.5
75.3
+24
Operative EBIT
36.5
51.6
+41
Capex/Acquisitions
n.a.
24.9
-
Capital Employed
n.a.
302.4
-
3,146
3,104
-1
Employees
Bricks Western Europe
Germany



Significant increase in results in spite of stagnating
demand
Restructuring and price increases
Closing of two hollow brick plants



Costs of Restructuring € 6,8 mill.
(thereof € 2.3 mill. cash expenses)
Further decline in 2003 expected
Strategy 2003:

Ongoing optimization

Reasonable price policy
Bricks Western Europe
Austria, Switzerland, Italy

Increase in results in Austria and Switzerland

Italy improved on a very high level

Measurements:

Optimization of activities

Sale of facade insulation business in Switzerland
(Sales: € 10 mill.)
Germany, Austria, Switzerland
Strategy and Outlook


Housing starts under pressure

Germany: in best case stagnating, possible decline of 10%

Continuation of price recovery in Germany!

Austria and Switzerland: slight market decline, maybe
stable
Strategy: ongoing consolidation and optimization
Bricks Western Europe
Belgium, France, UK

Positive development of economy

Increase in hollow and facing bricks market shares

Growing export of facing bricks to UK and Ireland
Bricks Western Europe
Netherlands, North Europe, Baltic

Slowdown of economy

Internal strenthening by adjustment of capacities in
Denmark, Sweden and The Netherlands

Concentration on new products and systems in the
facing brick business

Market entry with hollow bricks in The Netherlands
and Scandinavia
Takeover
Hanson Brick Continental Europe

Takeover as of April 22, 2002

23 plants

Sales (2001): € 150 mill.

EBITDA (2001): € 14 mill.

1.060 employees

Countries: The Netherlands, Belgium, France, Poland
and Germany
Wienerberger
“World Champion in Integration"

Within two months:

only one IT-System

only one administration, sales and marketing per country

Successful tunraround in Germany completed
(closing of plants)

Entry in the facing brick market Poland with 2 plants

Closing of 6 plants

300 employees declared redundant
Results of Hanson Acquisition

Strong No. 1 position in the following markets:

Belgium

The Netherlands

France

Strenthening of profitability in North-Western Europe

Industrial leading positions in the facing brick market in
Continental Europe

Full synergies of € 13 mill. as of January 2003
Bricks Western Europe
Outlook

In total stable development in Western Europe

Slight market decline in Holland

Stable development in Belgium and Italy

France stagnating, but Wienerberger better
performance than the market

Northern Europe stable
Bricks Western Europe
Strategy

Strong local organizations with excellent market
know-how

Focus on product and system development

Ongoing optimization

Acquisitions for market restructuring, strenthening of
market shares and bolt-on
Bricks Western Europe
in € million
1-9/2001
1-9/2002
change
in %
Sales
400.0
471.3
+18
49.2
85.0
+73
Operating EBIT
3.0
38.2
>100
Capex/Acquisitions
n.a.
85.6
-
Capital Employed
n.a.
707.6
-
3,425
3,929
+15
Operating EBITDA
Employees
Bricks USA

US housing starts remain strong

Solid sales volume, prices slightly increased

Significant increase in results despite weaker US Dollar

Measurements:

Construction start of facing brick plant in US
(Total investment of USD 30 mill.)
Bricks USA
Strategy and Outlook

Slight decrease of housing starts expected

Effecting mainly the low-price segment

Brick market share will increase

Solid development of volume for Wienerberger expected

Long-term potential of growth due to demographics

Ongoing expansion of market position

Strenthening of direct sales

Rise in level of automation
Bricks USA
in € million
1-9/2001
1-9/2002
change
in %
218.7
215.8
-1
Operating EBITDA
41.4
46.7
+13
Operating EBIT
19.5
25.8
+32
Capex/Acquisitions
n.a.
13.4
-
Capital Employed
n.a.
367.1
-
2,065
1,957
-5
Sales
Employees
Pipe and Roofing Investments

Significant increase in results for Pipelife and Steinzeug

Bramac remaining unchanged on a solid level

Measurements:

Sale of minority investment in clay pipe plant in
Malaysia

Valuation adjustments with respect to weaker
expectations for economy

Cost of restructuring € 19.5 mill.
(thereof € 1.3 Mio. cash-expenses)
Pipe and Roofing Investments
in Mio. €
1-9/2001
1-9/2002
change
in %
Sales
335.1
323.1
-4
Operating EBITDA
34.1
39.7
+16
Operating EBIT
14.8
20.9
+41
Capex/Acquisitions
n.a.
9.2
-
Capital Employed
n.a.
194.5
-
2,545
2,381
-6
Employees
Strategy
Shareholder structure
Koramic (B)
20%
Treasury
stock
1%
65,3 Mio. Aktien
Free float
53%
Bank
Austria
Creditanstalt
(A)
26%
... Free float as of
January 2002
Development of shareholder
structure

Reduction of Bank Austria/Koramic shares below 50%
 Target realized

Koramic sold 7% to Austrian insurance group Wiener
Städtische and will remain minority shareholder, current
stake approx. 20%

Bank Austria: no sale of shares planned, will remain
minority shareholder, current stake approx 26%

Wienerberger free float: currently 53%
 Target: further increase of free float
Mid-term Strategy



Bricks
 Core business
 Maximization of Cash-flows
 Expansion of market positions / market shares / new markets
Pipe and Roofing Investments
 Optimization of Cash-flows (Dividends)
 Dissolve joint-venture structures ("in or out")
Real Estate and Other
 Realization within the next 5 years and re-invest in bricks
 Value: € 160 to 180 mill.
Wienerberger brick markets 2002
Mature markets
Turnaround markets
Growth markets
No Wienerberger presence
+ USA: growth market
Expansion strategy
New
products
e.g.: roofing
Existing
products
Brick products
in our existing
markets
Existing
Markets
Russia,
Romania,
Bosnia,...
New
Markets
Main focus in strategy

Ongoing optimization and internal strengthening

Growth:

Various small projects in brick business (bolt-on)

Few major projects

re-investment of cash-flows

Further sale of real estate assets

Dissolve joint-venture structures

Development of a segment (brick related)

Increase of free-float of our share
Goals 2002 and 2003

2002:
Operating EBIT significantly higher than € 100 mill.
(and close to comparable record level in 2000 of € 147 mill.)

2003:

Profitable growth

Further increase in earnings
Solid Financial Basis

Strong increase in profitability

High cash-flows and crisis resistance

Maintenance capex below amortization (only 50 - 60%)

Solid financing structure: 67% Gearing

Approx. € 150 mill. annually for growth

Profitable growth through bolt-on acquisitions

Attractive dividends
Development of dividends
Goal: Attractive Dividends
0,9
4,5%
0,80
0,8
4,0%
0,7
3,5%
0,60
0,6
3,0%
0,50
0,5
0,38
0,4
0,3
0,21
0,23
0,38
0,42
0,45
2,5%
2,0%
0,25
1,5%
0,2
1,0%
0,1
0,5%
0
0,0%
1992
1993
1994
1995
1996
DPS (lhs)
1997
1998
1999
Dividend yield (rhs)
2000
2001
2002e
Strong industrial basis

Worldwide leader in bricks (hollow and facing bricks)

The Consoliditor of the brick industry

Well-balanced geographical portfolio

Leading positions in all major brick markets

Strong presence and results in Eastern Europe (growth)

Lean and transparent structure
 Wienerberger stands for Stability and Growth
Our Mission
Building Value
for Investors,
Customers
and Employees
Wienerberger Investor Relations
Wienerberger AG, A-1100 Vienna, Wienerbergstrasse 11
T +43 1 60192 - 463, F +43 1 60192 - 466
[email protected] | www.wienerberger.com