Wienerberger Doubles Net Profit in 2016
For 2017, Wienerberger foresees a continuation of the progressive recovery in European residential construction.
Wienerberger AG recently announced its financial results for 2016. At the group level, revenues remained almost stable at approximately €3 billion (~ $3.2 billion) in 2016. Over the same period, EBITDA increased by 9% over 2015 to €404.3 million (~ $426.6 million). The company more than doubled its 2015 net profit to €82 million (~ $86.5 million) in 2016.
In 2016, the Clay Building Materials Europe Division generated revenues of approximately €1.7 billion (~ $1.8 billion), up by 2% from the previous year. In a moderately growing European residential construction market with diverging regional trends, Wienerberger increased its sales volumes at slightly increased average prices. The level of activity in Western Europe was satisfactory, according to the company. The strong performance of the Eastern Europe region was supported by government funding for housing construction in several markets. The division’s operating result increased to €290.7 million (~ $306.8 million), up by 17% from the previous year’s level. In addition to business development, this was due to improved costs of goods sold, lower energy prices, the high share of innovative products and the growing popularity of brick as a building material. Future-oriented products, such as brick filled with mineral wool, accounted for approximately 25% of the division’s revenues.
The Pipes & Pavers Europe Division experienced a decline in revenues by 5% to €988.2 million (~ $1 billion) in 2016. EBITDA dropped by 9% to €98.5 million (~ $103.9 million) over the same period. Business in all product groups—plastic pipes, ceramic pipes and concrete pavers—was characterized by an extreme reticence by the public sector to invest in infrastructure projects in Eastern Europe, which in turn depressed the development of business in the division.
The North America Division reported satisfactory results for both the U.S. brick business and activities in Canada. Housing construction in the U.S. was positive, and Wienerberger benefited from the growing number of new housing starts in the single- and two-family home segment. Canada experienced increased demand in the relevant markets as well. Overall, revenues increased by 5% to €292.7 million (~ $308.9 million), while EBITDA remained stable at €32.7 million (~ $34.5 million). Adjusted for contributions from real estate sales and the disposal of two production sites for concrete products, as well as optimization costs and foreign exchange effects, the North America Division recorded a 5% organic increase in earnings.
For 2017, Wienerberger foresees a continuation of the progressive recovery in European residential construction, but expects business in the renovation segment to remain subdued. In terms of infrastructure, demand is projected to stay at a satisfactory level in the group’s Western and Northern European markets. Wienerberger is cautiously optimistic that a slight recovery of public sector investment activities may occur in Eastern Europe in the second half of the year. In North America, there are strong indications of continued growth in the residential construction market.
“We are confident to be able to further improve our operational performance in 2017,” said Heimo Scheuch, CEO. “We will pursue our strategy, focusing consistently on value-creating projects to round out our industrial portfolio, operational excellence and sound, organic growth in our markets through customer orientation and innovation. The economic environment will still be characterized by a great deal of uncertainty throughout the year, but we expect to be able to increase our organic EBITDA at group level to €415 million [~ $437.9 million].”
For more information, visit www.wienerberger.com.