Wienerberger Revenues Climb 5% in 2017
The group achieved record revenue of more than €3.1 billion (approximately $3.8 billion) for the year, an increase of 5% compared to 2016.
Wienerberger AG recently announced its financial results for 2017. The group achieved record revenue of more than €3.1 billion (approximately $3.8 billion) for the year, an increase of 5% compared to 2016. According to the company, its net profit for 2017 reached a 10-year high, at €123.2 million (~ $152.5 million). Net profit in 2016 was €82.0 million (~ $101.5 million).
“2017 was a good year,” said Heimo Scheuch, CEO. “We generated record revenues of over €3.1 billion, the highest ever in the history of the company. Our dedication to improving operations continues to deliver results as we succeeded in increasing our EBITDA for the fifth consecutive year, reaching €415 million (~ $513.6 million) in 2017. These convincing earnings translated into a significantly higher net profit, now at its ten-year high of €123 million (~ $152.3 million).”
By taking over the Belgian Preflex Group, the company reportedly strengthened its presence in the fast-growing and profitable segment of pre-wired electric conduits. Acquisitions in Germany, Austria and North America broadened the geographic scope of the brick business. An acquisition in Romania is still subject to approval by the local competition authority. Overall, Wienerberger invested €58.8 million (~ $72.8 million) in value-accretive growth and acquired companies with revenue run rates of €90 million (~ $111.4 million) and EBITDA of €16 million (~ $19.8 million).
Wienerberger reports that 2017 was marked by diverging developments in its different markets. Nevertheless, new housing starts and infrastructure spending increased. This trend was particularly pronounced in Eastern Europe and the U.S. Overall, it led to higher sales volumes. The development of business benefited from increased average prices and constant improvements of cost structures.
In 2018, Wienerberger again expects to see slight growth in the European residential construction market. While housing construction in Eastern Europe will continue to gain momentum, Western Europe will still be marked by diverging regional trends. The renovation segment of the region should remain stable. The infrastructure market in Eastern Europe will benefit from the increasing take-up of EU funds. Moreover, the optimistic macroeconomic outlook for the region should have a positive impact on the propensity of private households to invest. In Western Europe, Wienerberger is confident to see a sound development of its core markets. In addition, contracts won in international project business at the beginning of this year will make direct contributions to earnings.
The costs of raw material for plastic granulate will remain high and be subject to fluctuations. The foreseeable development of costs will be reflected in the company’s pricing policy for the plastic pipe business. For North America, the group forecasts a further increase in residential construction and growth in the pipe business.
Wienerberger reportedly aims to fully utilize its long-term growth potential. To drive the business forward, the company’s management is pursuing a clear strategy focused on three pillars: organic growth, operational excellence and growth projects. The group’s industrial base and the continuous development of innovative products, services, and solutions provide a solid foundation for future growth. Initiatives aimed at enhancing efficiency, optimizing cost structures and improving operational processes lead to organizational improvements. In areas that fall short of management’s expectations, efficiency-enhancing measures were initiated in the fourth quarter of 2017. In the coming 18 months, the company will step up these efforts and implement additional measures. The costs involved will come to about €30 million (~ $37.1 million). Along with the already ongoing cost optimization program, management expects to achieve total savings of €15 million (~ $18.6 million) in the course of this year.
Wienerberger will continue to broaden and diversify its platform through the acquisition of high-margin, growth-oriented companies. Having identified a variety of attractive development opportunities, the group has earmarked at least €200 million (~ $247.5 million) for this purpose. Currently, the company is reviewing all its business areas for their strategic orientation. If assets are identified for which value can be improved by means of disposal, sales processes will be initiated. Based on current estimates, Wienerberger may generate proceeds from sales in the amount of up to €100 million (~ $123.7 million) during the coming 24 months.
“The Wienerberger Group will continue to grow in 2018,” said Scheuch. “Our optimism is based on our strategy and the implementation of the measures planned. In addition, we have a strong balance sheet that enables us to achieve our growth targets. We have an experienced local management determined to support and implement accelerated growth. And above all, we have strong platforms in all our business areas—infrastructure, new residential construction and renovation—both in Europe and in North America.”
For additional information, visit www.wienerberger.com.