Feb 21 2007
Wienerberger AG (Vienna, Austria) has reported that it met all earnings targets in 2006. Group revenues rose by 14% to €2.225.1 billion, operating EBITDA by 10% to €471.9 million and operating EBIT by 11% to €299.7 million despite the high 2006 level of investment activity.
After a strong third quarter, clear two-digit growth rates were also recorded during the last three months of the year. Results for October to December show a 17% increase in revenues over the comparable prior year period to €569.2 million as well as a plus of 25% in EBITDA to €120.4 million and 38% in EBIT to €71.6 million.
"A number of factors influenced the development of revenues and earnings during the past year: strong and steady demand on nearly all European markets, above all the recovery in Germany, provided support for our growth, whereas the sharp drop of up to 30% in new residential construction in the USA and significantly higher energy prices worked against this favorable trend," commented Wolfgang Reithofer, CEO of Wienerberger AG. As clear confirmation of the Wienerberger growth strategy and the strength of the geographic portfolio, Mr Reithofer sees the group's ability to more than offset the earnings decline in the USA (-5% in EBITDA) and an additional €47 million in energy costs through an improvement in results, above all in Germany, Belgium, France, Great Britain, Poland, Romania and Hungary. In 2006 non-recurring expenses of €7.2 million were incurred for plant shutdowns in the USA and Czech Republic, but were nearly offset by the sale of a non-operating property in the south of Vienna for €5.1 million.
"Our strong geographic portfolio and numerous profitable growth projects again made it possible for Wienerberger to meet all our ambitious earnings targets," emphasised Mr Reithofer. "We also want our shareholders to benefit from the sound development of business in 2006, and the Managing Board will therefore recommend that the annual general meeting approve a further increase in the dividend.
"I am confident concerning the development of our business in the future and expect the Wienerberger Group will remain on its growth course during 2007. We do not see any recovery in new residential construction in the United States before the middle of the year, and are forecasting additional costs of roughly €30 million from higher energy prices. However, positive market development in most of the European countries, the ongoing optimization of our plants in the United States and the continuation of our expansion strategy should more than offset these factors and form the basis for a further improvement in earnings during 2007."
Forecasts for Central-East Europe call for continued favourable market conditions and steady high demand for bricks, especially in Poland, Romania and Bulgaria. In the growth market of Russia, Wienerberger has started work on the construction of a second plant 800km east of Moscow after the first plant near Moscow entered the start-up phase during October 2006. Wienerberger also expects a generally positive business climate in Western Europe. In Belgium and France indicators show continued strength in residential construction, and the Netherlands and Great Britain should record slight growth. The recently optimistic sentiment in Germany leads to expectations of at least stable development and in Switzerland construction activity should remain at a high level. In the USA new residential construction is not forecast to recover before the second half of 2007 after the high stock of unsold houses has again reached a reasonable level. However, capacity adjustments and the further optimisation of plants should allow Wienerberger to also record an improvement in earnings in the USA.
"We used 2006 to expand our capacity and further optimize our cost structures. In connection with the successful pursuit of our profitable growth strategy, I am therefore optimistic that we will again be able to meet our goal for above-average growth (of approximately 10%) in earnings during 2007," added Mr Reithofer in conclusion.