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Wienerberger AG recently issued an update on the development of business in the first six months and an estimate for market trends during the remainder of this year. “Business is generally proceeding as planned, but the expected catchup effects in the Bricks & Tiles Europe Division failed to materialize in the second quarter and are no longer expected to come through during the rest of the year,” said Heimo Scheuch, CEO.
The Bricks & Tiles Europe Division was faced with a difficult market environment and, above all, with severe weather conditions during the first half of the year. “Construction activity in Europe, which only started during the second week in April because of the unusually long winter, was further slowed by heavy rainfall and flooding in parts of the region at the end of May and the beginning of June,” said Scheuch. “This had a particularly strong effect on sales of roof tiles, which make an important contribution to EBITDA in this division. The construction industry did not expand capacity during the second quarter to handle the backlog from the early part of the year but simply postponed projects, and the expected catchup effects in the relevant markets did not materialize.
“As a result, the Bricks & Tiles Europe Division lost roughly €20 million (~ $26 million) of the operating EBITDA forecasted for 2013 during the first six months. Developments like this are, unfortunately, not predictable and count even more because the division’s employees are working very hard to meet this year’s targets.”
Average prices in the Bricks & Tiles Europe Division are expected to be slightly lower than the prior year at the end of the first six months, whereby Western Europe was able to offset cost inflation with price adjustments despite a market-related decline in volumes. In Eastern Europe, the weaker demand for building materials in some regions reportedly led to increased pressure on prices. Wienerberger said it was able to use its cost advantages as the basis for sales promotions in selected markets and thereby strengthened its market positions. Volumes in Eastern Europe remained stable during the second quarter, in spite of the market trends, and supported an increase in market shares.
For additional information, visit www.wienerberger.com.