Wienerberger AG

Ladies and gentlemen, welcome to today's conference call of Wiener Berger's Q1 to Q3 2025 results. I'm Sarah, your operator for today, and I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a questions and answers session. If you would like to ask a question, you may click on the Raise Your Hand button. If you're connected via phone, please press star key 9 on your telephone keypad. We're looking forward to the presentation, and with this, I hand over to Therese Jandér.

Good morning, everyone, and warm welcome to Vinneberg's Q123 results update. Thank you for taking the time to join us today. My name is Therese Jandér, and I'm pleased to be hosting this call from the headquarters in Vienna. I'm joined by our CFO, Dagmar Steinet, and a special welcome also to our CEO, Heimo Schorsch, who is calling in today from Hungary. We will begin with a brief presentation of the key developments and the financials for the period. And afterwards, we will open the line for questions. With that, I will hand over to Mr. Schorsch.

Thank you, Therese, and a warm welcome also from my side. You will wonder why I speak from Hungary. As you recall, we explained to you that roofing is a very major attention point for our future development. As you are well aware, we have been working on two new factories for concrete roof tiles and one is in Hungary, one is in the south-east of London. Both of them are now operational. The one in England is already fully on the market and the one here in Hungary is about to go on stream. And so we are glad to say that in a record time of more or less one year, we have put two new factories up in this market and we grow our exposure to this very important segment of ours, the roofing segment in Europe. So that's why I'm here today with our Hungarian management. But let's go now to our set of results for quarter three. Ladies and gentlemen, if you look at our results and operating EBITDA was 202 million EBITDA in the third quarter comes in more or less or roughly on the level of 2024. So in line with last year's performance, a slight margin expansion when you compare to last year and the revenue is pretty much on the same level of last year as well. All of this is a very strong performance if you look at the underlying market. Why? Because we have seen, as we have told you, in the new residential housing segment, no major developments as far as uptick is concerned. On the contrary, if we move first of all to North America, The North American market has suffered considerably in the segment of new residential housing, one and two family houses especially. Let's start for a change with Canada, Ontario, the Toronto market. down compared to the previous year, 2024. This year was more than 30%. So we had to digest quite a significant decline in activity in this very important market. That's the major market of Canada anyway, Ontario. So you've seen here a strong decline in the new residential housing market. The US as such has also suffered due to a lot of reasons. The mortgage rates are still pretty high. You have here also the instability, volatility, politically speaking. I don't have to expand on that. Everybody follows it very clearly and in detail. So this has obviously also an impact on the new residential housing market in the U.S., and therefore we have a decline of about 10% in this market as well to digest when it comes to our activities. Keep in mind. that this North American operation is the most exposed one to new residential housing market as it comes to Wiener Berge, because this is where we still have a majority of our business that is exposed to new residential housing. If we move now more to Europe, we have here, I would say, a situation where we see in the UK and in Ireland different market development. We have seen that especially now after the summer that the UK is also dropping in activity rate. That's due to mortgage rates have not come down as everybody has expected. There's also some instability in the marketplace and here was about when we Compare running rates about 9% down in your residential housing market when we talk about September, October in this period of the year. So we've seen no pickup. On the contrary, a decline in activity. and also in Ireland a slight decline in this new residential housing market. However, and this is now important because this is a major difference, if you look at the UK-Irish operations of Wienerberger, they have a majority of its exposure already in the roofing and in the piping business, so renovation and infrastructure plays an important role and therefore this business has performed overall better because here stability in turnover and in profitability. So we have not suffered so much when it comes to the profitability of the business in this region due to this new business that we have, a business that is far more oriented to renovation and to infrastructure. So a very important point to mention here to the respect of UK and Ireland. On the continent, as such, we have seen a mixed picture. All of us have expected a better running rate when it comes to new residential housing in all of the European markets. This has not happened. The only market actually that performed according to our expectations is the Netherlands. So the rest of Europe, Western Europe especially, was down. There's no sort of uptick in the market as we speak. There are, however, some encouraging signs, if I may say so, in Germany and France, because the permits are up in these two countries, so we can expect, hopefully, into the next year, a little better development in new residential housing. has supported the strong roofing performance in the region. So there's a lot of activity on, as I may say, so on the roof maintenance. So this has helped our business there. And infrastructures have been more or less stable, the spending. So here, a trend that we have basically built on, on the beginning of the year. If you look now to Eastern Europe, Eastern Europe has been also a market where we have not seen any expansion of new residential housing. So I would say a rather stable subdued market in a lot of these Eastern Europe economies. The only country where we have seen a little uptick is the one I'm currently in, in Hungary. This is to political reasons. Next year we have Hungarian elections, so the Hungarian government has launched a special initiative to give sort of better mortgage rates to be first-time home builders and buyers. So all in all, when you look at Wiener Berger's performance in these geographies, and we have added some charts in the presentation, I don't need to go into the details, but you see actually three things. first of all that the mortgage rates have not come down as we originally expected them to do so in order to stimulate new residential housing so that's the first very important point the second one is that the new residential housing markets nearly in all of the markets except as i mentioned the dutch market and the hungarian are down so there's no uptick in these markets so we were confronted with markets that are below the 24 levels. And thirdly, which is also very positive, that Wiener Burger in ceramics and pipes outperformed the underlying market due to our focus on innovation, very strong focus on our customers and therefore we were able to outperform the underlying market. So I think this is the nutshell of the current environment that we are in. I don't see any major changes, by the way, for the rest of the year. So after the third quarter into October, November, December, we'll see the same trend. So this declining environment will continue for the rest of the year. So this is, I think, from my perspective, the major sort of underlying developments. If we now move a little bit on from the macro and the sort of performance-oriented one to some of the numbers that Dagmar will elaborate a little later. So from a revenue perspective, you see here that we are more or less a little bit up by 4% compared to last year to about 3.5 billion. The ABTR is slightly down from last year. This is obviously due to the fact that we have a lesser contribution from the new residential housing segment and also some cost pressure when it comes to labor costs and energy costs. But here Dagmar will elaborate a little bit. more in detail. On the profit after tax side and the earnings per share side with a strong increase due to the fact that obviously there's no impact on some of the balance sheet issues that we had due to the sale of the Russian business last year. This year obviously is a normalized year, so we have a strong uptick in these two aspects. If we now move on a little bit more to the migration, as I call it, from Wiener Berger's perspective, you see here that over the years, and I explained this already a few times, but you see it especially in these tough market environments. that Wienerberg is operating in, how important it is and it was to migrate the business from a purely new residential housing business to now a much stronger resilient business based on new built infrastructure and especially renovation. So I think this has shown clearly that from a strategic path, we are on the right way forward. We will continue to do so. And I think the current environment offers us opportunities. Let's move a little bit on in this external growth field. We have done several acquisitions. I mean, when we look at Wiener Bell over the last 10 years, it's by far more than 41 acquisitions that we did. So all of them are very strongly value enhancing. We have been very disciplined, first of all, with the purchase price, with the integration and the synergies. When we take the biggest one that we did, Terreal, last year, we are fully on track with respect to synergies. So all the synergies that we have originally planned for are coming in actually a little bit better already. The market as such, the underlying, is obviously weaker. I don't have to explain that, I did it already at the introduction. So here in this difficult market environment from a pricing perspective and synergy perspective we are doing better as we originally planned. So here we see the strong operational leverage that we have when we do such acquisitions. So they are from the first day onwards value enhancing. When you look at the RER, I would say what the difference or what the change is in prediction is that we see that the full contribution in EBITDA due to the fact that the markets are not yet picking up, will be probably a year more that we gain this 150 million EBITDA contribution. I have put here the chart clearly in line for you that we expect this contribution a year later. However, as I said, from a synergy and cost perspective, we have already achieved all of it. Let's look a little bit what we have done so far in this year 2025. Again, here, an interesting set of development because we have focused on water management, clearly, when it comes to all sorts of innovative features like creating a scalable platform for capturing growth when it comes to water quality, to measure the volume of water and to help water companies in managing the water systems, so that's Vionic, a strongly growing business when it comes to IT-based and artificial intelligence-based solutions for water management. Then we have done a very important step in Ireland in order to consolidate further the market when it comes to infrastructure, drainage, roofline and cable induction systems as a consolidation in this market, so fully effective there as well. And then we have bought 100% of our GSI business, that's a framing business for solar panels, that's not solar panels as such, it's a framing operation, where we have now 100% which is growing fast, because here we have this integrated solution for roofs, and we grow not only in France, but especially also outside of France very quickly. So when we look strategically speaking, Infrastructure and renovation are the key drivers also this year in this market circumstances where new residential housing is under pressure. So we'll focus on this more when we talk about infrastructure. It's the expansion of our piping operations, water management especially. Here we see a high degree of growth potential in all of our markets that we are active in. Keep in mind that Wiener Burger is now with its operations in the north of Europe, now clear number one. We grow our business strongly in UK and Ireland and we are also very strongly growing in the Benelux, especially in the Netherlands. And the next focus areas will be the eastern part of Europe where we want to grow this business and obviously also in Western Europe where we see still potential for further growth. So here organic and inorganic growth is on the list for Wiener Berger in the years to come. Let's move then a little bit to the renovation market. The renovation market is for Wiener Berger especially the roof market. Here with the acquisition of Terrial and now the framing business for solar panels, we see here a strong potential for further growth. We will focus on accessories and parts that the roof needs on the roof and under the roof. We have here the necessary platform to do so. And we have seen that especially in situations where the markets get a little tougher, we have now strong market shares in order to have pricing power on one side, but also to push innovation and solutions through. So these are two especially very important markets for growth for Wiener Berger. And if I may, before I hand over to Dagmar, say a general word with respect to acquisitions as such. When we look at the current market environment in North America and in Europe, it offers unique opportunities for being a builder for attractive growths. Why? Because a lot of small and mid-sized companies, family-owned businesses, in such difficult moments, they are not only driven by the macroeconomic development, but also the regulatory development, especially in Europe with all the new regulations coming its way. So here we have a strong potential for further growths. in order to expand our operations and to deepen the value creation when we talk about solution businesses on the roof and in the infrastructure field, but also in the residential housing. So I think here we are ideally positioned as Wiener Berger to go We have shown that we are a world-class operator when we integrate all these sort of operations very quickly, very efficiently on the platform side when it comes to systems like the whole back office, but on the front office as well due to our strong sales approach in the different geographies that we are active in. So a good place for further growth at Avena Berger. So Dagmar, I may hand over to you to elaborate a little bit more on the financial. Thank you.