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Wienerberger AG (0GIK)

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Thursday 12 February, 2009

Wienerberger AG

Financial and economic crisis impact Wienerberg...



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Preliminary results for 2008:
- Slight decrease in revenues; EBITDA decline as expected
- Group revenues -2% to ¤ 2,430.1 million, operating EBITDA -20% to ¤
440.1 million
- Distribution of dividend planned
Outlook on 2009:
- Difficult market climate due to further deterioration of global
economy
- Goal: to safeguard liquidity and financing
- Continuous adjustment of capacity to reflect market conditions

Vienna, February 12, 2009 - Wienerberger AG, the world's largest
producer of bricks and the number two in clay roof tiles in Europe,
recorded a decline in revenues and earnings for 2008 as a result of
the significant deterioration of the global economy in the wake of
the financial crisis. Group revenues declined by 2% only to ¤ 2,430.1
million, but operating EBITDA before restructuring costs fell 20% to
¤ 440.1 million. Operating EBIT before restructuring costs decreased
32% to ¤ 239.8 million. The Group recorded over 2008 non-recurring
restructuring costs of ¤ 55 million as well as impairment charges of
¤ 16.7 million, primarily related to Goodwill in Great Britain. The
company recorded also a one-off provision of ¤ 10 million for a fine
imposed by the German antitrust authority for alleged agreements in
violation of competition law and against which Wienerberger has filed
an appeal. As expected, the fourth quarter was substantially weaker
than the previous months. From October to December 2008 revenues fell
15% below the particularly strong prior year to ¤ 503.3 million,
EBITDA by 41% to ¤ 75.4 million and EBIT by 60% to ¤ 27.4 million.

Spread of financial crisis to Western Europe in April; impact on
Eastern Europe near the end of 2008
"The construction sector was relatively stable in Western Europe at
the beginning of 2008, while business was still growing in Eastern
Europe. The spread of the financial crisis to Europe first led to the
collapse of new residential construction in Great Britain. In the
course of the year, it also had a significant impact on the economy
and construction activity in most other West European countries. The
economic climate in Eastern Europe remained sound during the largest
part of 2008, but the final months showed that the crisis had also
started to take hold of this region. Central-East Europe reported a
slight decline of 7% in EBITDA, which is still very good taking into
account the high prior year level and the continuing strength of the
Polish market. The development of business in North America was much
weaker than expected (EBITDA: -57%). A disappointing new residential
construction market in Germany and rising pressure on prices in Italy
continued to have a negative effect on Central-West Europe (EBITDA:
-44%). Further declines in Great Britain which have negatively
influenced North-West Europe (-22 % EBITDA) have all together
contributed to the 20% year-on-year drop in operating EBITDA",
commented Wolfgang Reithofer, CEO of Wienerberger AG. The 2% decline
in revenues reported for 2008 represents a decrease of 4% in sales
volumes combined with price increases of 2%.

Measures to adjust capacity implemented: 27 plants closed and 11
production lines temporarily shut down
"2008 marked a clear turning point: The crisis has caused extreme
uncertainty on financial markets but - and this is much more
important - also in the real economy and among consumers. We quickly
took the right steps and implemented an extensive range of measures:
since summer 2008 we have closed a total of 27 plants and shut down
11 production lines on a temporary basis. In addition, we also
implemented a cost reduction program to cut administrative and
selling expenses throughout the Group. The costs for these measures
totaled ¤ 55 million, of which ¤ 33 million represent cash costs and
¤ 22 million special write-downs. Extensive temporary plant shut
downs during the winter period formed an integral part of our active
working capital management. Additionally, we have put our growth
program on ice. We have not started any new projects and are only
continuing work to complete the ones already in progress - these
investments equaled ¤ 407.2 million in 2008. We were also able to
reduce maintenance capex from the prior year level to ¤ 98.4
million", added the CEO. As part of the strategy adjustment that was
approved in summer 2008, the protection of the Group's liquidity and
sound financial base were given top priority. The key management tool
to reach this goal is the maximization of cash flow, which should be
guaranteed by the measures outlined above. Willy Van Riet, CFO of
Wienerberger AG explained: "In times like these, liquidity is our
most important goal. We have refinancing requirements of ¤ 429
million up to the end of 2011 which, with liquid funds and undrawn
committed lines of credit, we have already secured."

Amount of dividend to be lower than last year
"The past year was extremely challenging. However, we still intend to
distribute a dividend to our shareholders all be it significantly
lower than last year. We will decide on the amount of the dividend
when the final results for 2008 are available", indicated Reithofer.
The dividend recommendation and financial results as well as profit
before and after tax will be announced at a press conference on March
17, 2009.

Decline in revenues and earnings n fourth quarter 2008
Wienerberger recorded declines of 15% in Group revenues to ¤ 503.3
million, 41% in EBITDA to ¤ 75.4 million and 60% in EBIT to ¤ 27.4
million for the fourth quarter of 2008. The North America segment
recorded a decrease of 30% in revenues to ¤ 50.9 million and 64% in
EBITDA to ¤ 2.3 million, both in relation to an already very low
prior year period. In Central-West Europe, the weak development of
the construction branch in Germany and pressure on prices in Italy
led to declines in both revenues (-32% to ¤ 65.3 million) and EBITDA
(-45% to ¤ 6.2 million). Results in North-West Europe were influenced
by the market collapse in Great Britain. Revenues fell by 24% to ¤
174.4 million and EBITDA by 53% to ¤ 19.0 million. The financial
crisis and slowdown in market momentum throughout Eastern Europe were
reflected in a fourth quarter drop in results for the Central-East
Europe segment: revenues declined 10% to ¤ 178.9 million and EBITDA
28% to ¤ 52.8 million.

Further deterioration of economic environment expected in 2009
Wienerberger expects the financial crisis will also have a
significant negative influence on the development of the real economy
in 2009 and consequently lead to a further deterioration of the
economic environment. For Central-East Europe, which only began to
feel the impact of the crisis in recent months, the company forecasts
substantially weaker market development this year, but high-quality
products and an earnings-driven price strategy should allow
Wienerberger to do better than its competitors in these countries. In
the markets of North-West Europe, such as Belgium and the
Netherlands, Wienerberger also expects a weak operating environment.
A decline in new residential construction in France should be
moderated by a further increase in the market share of clay blocks at
the expense of concrete. Following the collapse of the construction
sector in Great Britain, there are still no signs of recovery in this
country during 2009. Current information also indicates that there
are no signs of an upward trend in Central-West Europe because of the
weakness in Germany and the strong pressure on prices in Italy. In
North America a further decline of new residential construction is
expected.

Top priority: protect liquidity and healthy financial Base
"Economic forecasts that are revised on an almost daily basis make it
clear that the crisis has not yet bottomed out. From the current
point of view, it is impossible to predict just how long and how deep
this crisis will be. We still consider the protection of liquidity
and our healthy financial base to be our most important objective.
Our strategy was adjusted during the last year to meet this goal, and
the maximization of cash flow was defined as our top priority. In
2009 we will also pursue this goal, take clear steps and use further
shutdowns to ensure that our plant network is able to meet the
changes in markets and sales volumes. We will also continue to focus
on active working capital management and the reduction of fixed
costs. Maintenance capex will not exceed ¤ 80 million this year, and
investments to complete projects in progress will total a maximum of
¤ 100 million. I am convinced that this strategy will place us on a
solid foundation to master this crisis", added Reithofer in
conclusion.

For additional information contact:
Karin Hofmann, Public Relations
T +43(1)60192-463  |  communication@wienerberger.com

Barbara Braunöck, Investor Relations
T +43(1)60192-463  |  investor@wienerberger.com

Internet live transmission of the conference call beginning at 2 pm
(CET) under: www.wienerberger.com

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Wienerberger AG
Wienerbergstraße 11 Vienna Austria

WKN: 83170; 
ISIN: AT0000831706; Index: WBI, ATX , ATX Prime;
Listed: Prime Market in Wiener Boerse AG;