Wienerberger AG

Good morning, everyone, and a warm welcome to Vinneberg SQ1 2025 update call. Thank you for taking the time to join us today. My name is Therese Jande, and I'm pleased to hosting this call from our head office here in Vienna. And I'm also joined here by our CFO Dagmar Steinert, who is here with me in person. And I'm also super delighted to welcome our CEO, Harmo Scheuch, who is calling in from the United States today. We will begin with a brief presentation of the key developments and then the financials for this quarter. Afterwards, we will open the line for questions. So with that, I hand over to Mr. Heimo Scholl.

Thank you, Therese, and a wonderful good morning also from my side to everybody on the call. Let me start with a general remark on the overall geopolitical and economical situation. I think all of us have been exposed to a very volatile, a very dynamic situation. geopolitical issues left and right and also on the financial and economical side with the discussions on tariffs and other issues especially coming out from the US administration that significantly influenced the financial markets but also end markets when we talk about the building environment. Looking in more detail to our end markets, we have seen, I would say, a solid start into the year with respect to European operations, especially in the renovation part of our business. We have seen, due to our strong exposure in the roofing field, a very good start and good demand levels inward. Western Europe, in the UK, also in Eastern Europe, so that we can say that this is a very satisfactory environment to start with, so fully in line with our expectations. Looking to the infrastructure market, where we are to the water and energy transportation when it comes to infrastructure. Here we have seen a relatively solid start in the Nordic part of Europe, Western Europe also, a little lighter in Eastern Europe that has to do with subsidies through so here not at the level that we originally expected and a very good level also in our demands when we come to our US operations in piping. When we then come to the new residential housing market we have seen in the one and two family houses a certain pickup in the Eastern European hemisphere so coming and I stressed it clearly from a very low level, because obviously these markets have suffered a lot over the last two years. So from this very low level, we have seen some pickup and some good sort of progress when we talk about demand and underlying business. In Western Europe, however, when we look especially to Germany and France, the market can be qualified as rather sluggish and still sort of on a weak demand level. And good signs out of the Netherlands with a certain amount of growth in new residential housing, a slight growth in the UK, good underlying demand in Ireland. When we move then across the Atlantic to North America, especially to the US first, the new residential housing market has considerably suffered. First of all, I think also from the weather conditions. There has been a rather wet start and difficult weather in big parts of the United States at the beginning of this year. but also when you talk about the underlying sort of trends with relatively high interest rates not coming down and no indication of further cuts in interest rates. Here obviously due to this effect and also the political instability with the tariffs and the discussion about this sort of instability. This led to a decline in the new residential housing market at the beginning of this year compared to last year. So this is an underlying trend that is obviously a little different from what we have expected. earlier. On the Canadian side, obviously you are absolutely aware of the political instability at the beginning of the year and this has obviously contributed again with interest rates and rather cold weather start to decline in activity when we come to new residential housing market. However, we see there that I think this trend will then reverse throughout the year and will come to the normal development of this market in So all in all, when we look at this sort of underlying development market-wise, I do believe we have shown a very resilient and strong development when it comes to revenues with a growth of 15% to 1.1 billion turnover. And also on the EBITDA front, we lie perfectly in line with our expectations, 130%. All in all, I'm glad obviously that Dagmar is leading the call out of Vienna. She will then go more into detail with the financial result. But we have shown, obviously due to our strong work on the comes into this year also the effects, good underlying trend on the self-help program and here also I think we will make good progress throughout the year. The continuous focus on innovation and the system solution helps us in this market environment and especially when we talk about the roofing part of our business, we see here clear signs that our concept also under the newly acquired Terrial that made also a great contribution. in the first quarter of this year is helping to improve our results. On another note, I think it's also interesting to mention on this call that on the innovation front, we now regrouped all of our activities on the piping side, when we talk about new technology, when we talk about digital, under the brand name of Vionic. together with our piping system and we do expect to grow this business substantially over the years because it's perfectly in the trend with the sustainability and the necessity obviously for the water and energy providers to check and manage their systems in a forward-looking way. So with this and with my general remarks on the underlying markets I hand over to Dagmar who will of this year. Dagmar.

Yeah, thank you, Heimo, and a warm welcome from my side as well. I will give you an overview about our results. And as you can see on slide number 10, yes, quite a lot is already said, but our revenues for the first quarter 2025 reached 1.1 billion, and that is a 15% increase compared with previous year's quarter. Our operating EBITDA also grew by 13%, reaching 130 million euro. And our EBITDA margin, operating EBITDA margin, more or less is on the level of previous year's quarter. Of course, we have benefits from our cost savings and we always, of course, increase our efforts to deliver there more. As well, we have seen a positive contribution from our terrarial business, not only in sales, as well as in operating earnings. Coming now to the next slide. On this slide you can see our volume increase of 5%. As already mentioned, as Heimo said and gave you some overview about our end markets, it's mainly driven by ceramics in Europe. And as you can see, overall, Europe contributed plus 6% to this volume increase. North America is a little bit down with minus 3%, and it's already mentioned that we've seen bad weather conditions in North America, and of course, already elaborated about our end markets, ceramics, roofing and infrastructure across the regions. So I don't want to repeat everything here. With that, I would like to come to our revenue bridge and we have a strong solid performance in our first quarter with this 15% increase and we are able to show 4% organic growth. And that reflects our good performance in the first quarter, especially in Europe. And out of our scope, that's of course our M&A activities, these 101 contributions, mainly contributions from Terrial, which we have of course included completely in this first quarter. and in the first quarter 2024 it was just one month. And with that, I would like to go a little bit deeper into our operating EBTA. And there you can see our operating EBTA bridge. And overall, this 13% increase in results, which is, of course, on the one hand, driven by these positive volume impact what we have on the sale side and we see a 2% organic growth. Why is it just 2% and not 4%? Well, we faced a little bit higher inflation costs as originally expected and that is mainly driven by higher energy costs, personal costs and slightly higher raw material costs like polymer prices. On the other hand, of course, we benefit from contributions from our self-help initiative and have there, of course, cost savings as well with our ongoing cost management. Overall, we benefit as well in the first quarter from a higher utilization compared with our first quarter 2024, what as well is reflected in our volume increase. If you look now a little bit deeper into our operating segments, into our regions, I think regarding the sales increase, more or less everything is already set. But looking a little bit deeper into our earnings position into operating EBITDA, You can see that the increase in operating EBITDA of 48% in Western Europe is driven by some factors. We have higher renovation volumes that plays, of course, a significant role, particularly in the roofing segment. And we have seen a strong demand in the Netherlands and Belgium. Of course, the integration of the terrial business contributed positively and added substantial value through these established market presence and product offerings. Cost savings from restructuring measures which were implemented in the previous year have further helped our performance. And therefore, we show an increase in operating EVTA in Western Europe by 48%. The increase in operating EVTA in Eastern Europe is significant as well with 24%. Of course, we see here as well a benefit from increased volumes, especially in the new residential housing, particularly in clay blocks. And of course, Terrial as well added some value to our business there. North America faced several challenges in this quarter. We saw these severe weather conditions where we also had some disruptive production and North America overall is a little bit challenging. and therefore we couldn't increase our operating FUTA. We see there a decrease by 34%. I would like to come to some KPIs from our strong balance sheet and just giving you a little bit more overview about our working capital and our net debt development. Our working capital is below previous year's quarter and that is a very good development because we increased our volume by 5% compared with previous year's quarter and managed to stay below the previous year's absolute working capital figure. Of course, it is higher compared with the year end, but that's just the normal seasonality, what is typical for our business. Working capital to revenues, this figure by the year end, it was 23%. We see here now at the end of the first quarter, roughly 28%, a much better figure compared with previous year with nearly 34%. And therefore, of course, I'm very confident that we will see by the year end, much lower percentage and that of course counts as well for our net debt what is of course a little bit burdened in the first quarter by the increase of our working capital but i'm very confident that we will bring that number down by the year end to our target two times net debt to operating abt Another information I would like to share with you if not already seen that we finished our most recent share buyback and we successfully bought back about 30 million euro shares between December 24 and February 25 and we already made the cancellation of this share capital in March. And that, of course, is something where we are very proud not only to deliver dividend payout, what we just approved in the AGM last Friday, but as well to add or deliver value to you by doing share buyback programs. And with that, we come to our ongoing business, our assumptions for 2025. That is unchanged compared with our assumptions we made with a full year presentation of our figures in March. The only maybe little bit new thing we added is of course the tariff topic which came from the US. But regarding tariffs, we have not a direct impact, it's more or less indirect or limited impact and therefore we don't see it as a major downturn. Regarding our action plan for 2025 that is unchanged, of course we want to increase our revenues from system innovations. We already mentioned that for the full year we see depreciation by 380 million euro and we have a capex in total of 290 million euro, and that's more or less half a split between gross capex and maintenance capex. Overall, of course, we want to expand our operating EBITDA margin to 17.5%. And with all that, of course, based on a more or less overall stable development of our end markets through the remaining year 2025 and further interest rate cuts, mainly of course the long-term interest rates, estimate for the full year 2025 800 million operating ebda and confirm our guidance which we gave to you in march 2025 when we published our full year figures and with that to sum it up um we've seen a very solid good performance in the first quarter 2025 and we are confident to reach our full year targets. And I'm very confident that we will see more positive moments in the markets and not some downturns. With that, I would like to finish our presentation and hand back to the operator.