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Report on the First Quarter 2001 Unchanged growth strategy despite bad weather – Consistent focus on building materials – Tighter organizational structure and reorganization of business segments – Bad weather lowers first quarter earnings, but has low predictive value for 2001 – Successful takeover of Optiroc brick activities in North Europe The first quarter of the year has low predictive value for the development of business in the building materials industry, and earnings are dependent primarily on weather conditions in key markets. Extremely favorable weather during the first three months of 2000 led to unusually high sales growth of 72%, but construction activity during the current year was severely impaired by frequent and heavy rain. In addition, the German market deteriorated further from its weak prior year level. Building materials sales therefore declined by 2% to € 302.2 million over the comparable prior year period. The 14% decrease in Group revenues is a result of the divestment of Treibacher Industrie AG, which recorded sales of € 46.5 million during the first quarter of 2000. Unfavorable weather for construction industry during First Quarter Operating EBIT decreased from € 17.1 to -11.3 million after adjustment for divested segments. This was due primarily to weather-related problems for the construction industry and, in particular, to difficult market conditions in Germany, Austria, and Switzerland. Moreover, energy costs are still high and therefore represent a drain on earnings. In spite of lower earnings during the first quarter, estimates for our different regional markets and related industrial strategy remain unchanged. In addition, we will place increased emphasis on marketing, the development of technology, cost management, and reorganization. Lower earnings, but no predictive value for 2001 After successfully focusing the Company on building materials, the first quarter of this year was used to implement a range of future-oriented measures such as new segmentation for the business units and tighter organizational structure. This will provide shareholders with a high degree of transparency. In addition, the publicly traded Wienerberger Baustoff- Higher transparency through new segmentation industrie AG will also serve as the operating lead company for the Group. This step will permit the elimination of an entire decision level and further increase efficiency. Division of core business into 3 regions The new segmentation of the Group’s business areas is as follows: the previous Wall and Ceiling Systems and Semmelrock concrete pavers have been combined into a “Brick” unit and divided into three regional segments: – – – Independent joint ventures Bricks Central and Eastern Europe includes hollow bricks, related building materials, and pavers for Austria and Eastern Europe Bricks Western Europe includes hollow and facing bricks in Germany, France, Switzerland, Italy, Benelux and Northern Europe Bricks USA includes facing bricks, concrete blocks and arkalite in the USA. Strategic building material investments in Pipelife plastic pipes (50%), Steinzeug sewage disposal systems (50%), Bramac concrete tiles (50%) and Tondach Gleinstätten clay tiles (25%) will operate as independent joint ventures and form the “Pipe and Roofing Investments” segment. The business unit “Real Estate and Other” will include all remaining real estate activities, non-core assets, stove tiles, and holding company costs. Bricks Central and Eastern Europe Long-term profitable growth in East Europe Sales of Bricks Central and Eastern Europe totaled € 45.7 million, or 10% less than in the comparable prior year period. EBIT equaled € 0.9 after 3.7 million in the prior year. Excess capacity on the Austrian brick market led to further prices declines. Temporary weakness was noted in construction activity on the Polish market, but we expect lasting improvement over the short-term. In total, building materials activities in Eastern Europe are expected to show excellent development and generate above-average growth rates in the future. Bricks Western Europe Difficult market situation in Germany On April 10 the acquisition of the Optiroc brick activities in North Europe was successfully completed retroactively as of January 1, 2001. The integration of the plants is currently in progress. High excess capacity on the German market led to further price declines. In addition, bad weather led to a decrease in volume sales. Construction activity in Switzerland also remained below expectations due to the weather. We will use this difficult situation to further strengthen our market position through directed development. In spite of heavy rain, brick sales generally remained stable in our other West European markets. Sales in this segment decreased by 2% to € 106.5 million. The market situation in Germany had a negative impact on EBIT, which fell from € 5.9 to -9.7 million. Bricks USA Continuing high level of housing construction in USA In the USA prices remained high, even though bad weather led to a decline in the sale of facing bricks. Exchange rate movements led to a 2% increase in sales to a level of € 60.4 million. However temporary plant standstills and higher energy costs exerted downward pressure on EBIT, which declined from € 8.3 to 1.5 million. Significant earnings growth is expected following improvement in the weather since new housing construction remains unchanged at the high level of roughly 1.7 million units, and this is expected to generate strong demand for facing bricks. In spite of these optimistic forecasts, major investment projects in the USA have been postponed while we await further economic developments. Pipe and Roofing Investments Sales in the Pipe and Roofing Investments segment increased by 1% to € 89.6 million following the initial consolidation of the Pipelife Jet Stream plastic pipe plant in the USA. The concrete tile producer Bramac recorded good development. In contrast, low infrastructure investments in the key German market led to a decline in prices and volume sales for Steinzeug Abwassersysteme GmbH. EBIT in this segment decreased from € 16.0 to -1.8 million, chiefly due to the book gain of € 15.2 million on the sale of Wiekor in 2000. Solid development of Bramac Real Estate and Other Revenues in this segment declined significantly from € 48.7 to 2.5 million following the sale of Treibacher Industrie AG, which recorded sales of € 46.5 million for the comparable prior year period. EBIT for the first quarter of 2000 included € 3.4 million from Treibacher. Outlook The 2000 Business Year was positively influenced by non-recurring gains of € 95.6 million on the sale of Treibacher, Wipark and Wiekor. This year, we will focus on the lasting improvement of earning power for our building materials activities. Maximizing Total Shareholder Return has absolute priority over the mid- to long-term. Maximizing Total Shareholder Return In Eastern Europe we expect higher earnings in 2001 and continued profitable growth over the long-term. We will invest the high cash flows generated by stable West European markets to expand our activities in growth regions. In the turnaround markets of Germany, Austria and Switzerland, Wienerberger must use our role as market leader to actively work toward the restructuring of brick markets in order to trigger an adjustment of capacity and bring prices back to a normal level. We view the USA as a growth market with high sales potential for facing bricks over the mid- to long-term. Growth and turnaround potentials Wienerberger Baustoffindustrie AG The Managing Board Vienna, May 3, 2001 E. Schaschl W. Reithofer For additional information contact: Thomas Melzer, Corporate Communications / Investor Relations Tel.: +43 (1) 60192-463, Fax: +43 (1) 60192-473 [email protected] | www.wienerberger.com P. Tanos First Quarter Results 2001 Sales Bricks Central and Eastern Europe Bricks Western Europe Bricks USA Bricks Pipe and Roofing Investments Building Materials Real Estate and Other 1) incl. € 46.5 million in sales from the divested Treibacher Industrie AG 1– 3 / 2001 Change in € mill. in € mill. in % 50.8 45.7 -10 108.5 106.5 -2 59.4 60.4 +2 218.7 212.6 -3 88.3 89.6 +1 307.0 302.2 -2 2.5 -95 48.7 1) Wienerberger Group 355.7 304.7 -14 Wienerberger Group excluding divested units 309.2 304.7 -1 1– 3 / 2000 1– 3 / 2001 Vdg. in € mill. in € mill. in % EBIT 1) incl. € 15.2 million gain on sale of the Wiekor Group 2) incl. € 3.4 million in operating EBIT from the divested Treibacher Industrie AG 1– 3 / 2000 Bricks Central and Eastern Europe 3.7 0.9 -76 Bricks Western Europe 5.9 -9.7 >100 Bricks USA 8.3 1.5 -82 Bricks 17.9 -7.3 >100 Pipe and Roofing Investments 16.0 1) -1.8 >100 Building Materials 33.9 -9.1 >100 -2.2 >100 Real Estate and Other 1.8 2) Wienerberger Group 35.7 -11.3 >100 Wienerberger Group excluding divested units 17.1 -11.3 >100