Wienerberger AG

Ladies and gentlemen, welcome to today's conference call of Wiener Berger's Q1 2026 results. I am Judith, your operator for today, and I would like to remind you that all participants are in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. And if you would like to ask a question in person via audio line, please click on the raise your hand button. And if you're connected by a phone, please press star key nine to enter the queue on your telephone keypad. And with star key six, you can unmute yourself. We're looking forward to the presentation. And with this, I hand over to Therese Jander.

Good morning, everyone, and thank you, Judith. Warm welcome to our Q1 results call. My name is Tess Janvier, and I'm pleased to be hosting the quarter today from Vienna, our headquarters. And I'm joined here by Zermatt Steinert, our CFO. We will begin with a brief presentation on the key developments and our financials for the quarter, and then we will open the line for questions. So with that, I will hand over now to Tess.

Yeah, thank you, Therese. Good morning, everyone, and a warm welcome from my side as well. Our CEO, Heimo Feuch, is still recovering from an infection, and therefore he is not participating today. So, yeah, let me start with the presentation and jump directly into it. And our first quarter is not a surprise at all. The soft start in the year is fully in line with our expectations. and it was driven by weather-related weakness, especially in January and February. Very important, we saw a clear recovery already in March, and volumes picking up, and our performance was back to prior year's levels. At the same time, of course, we are operating in an environment of increased geopolitical uncertainty, and of course that's related to the conflict in the Middle East, and that is heavily impacting visibility. Under these circumstances, we reiterate our full year's guidance, while of course we see that visibility remains limited. But, of course, we focus on execution, particularly integrating ITA share, where we have the closing by the end of April, and our discipline cost and margin management. Yeah, now coming to our numbers. Our revenues are down by 7% that reflects the soft start into the year. And as you can see, our volume development, the market was down by 6%. Our operating EBTA is close to 100 million, which is significant below previous year's level, but we've already seen a clear recovery in March. And let me just repeat it, it's not a surprise. We expected that. Important is maybe to mention that the first quarter 2025, was a strong quarter, so we compare a soft start in the year with a very strong quarter of previous year. So it's more like a transitional quarter rather than indicative for the full year performance. Let me now come to the market conditions, starting with Eastern and Central Euros. As you can see, our volumes are significantly impacted by, let me say it again, the severe weather conditions early in the quarter, and housing starts remain flat year on year. The renovation market was also temporarily affected by the weather conditions, and especially in the roof segment. On the other hand, our infrastructure market in that region remains fairly stable. So overall, the region shows a mixed picture with selective recovery. For instance, Poland is a good example where the weak start was mainly weather-related. Underlying demand remains intact. In the Czech Republic, we saw early signs of recovery in permits and starts, but on the other hand, very aggressive competition continues. Austria and Hungary, the demand remains subdued. but of course with affordability constraints and therefore it's a mixed picture. Turning now to our region Europe West. There again we see a mixed picture and of course volumes overall are down. Housing starts remained at a low level while the renovation driven demand was solid in that region. Infrastructure and energy transition supported overall our demand, but of course the bad weather was the same issue in that region. And to give you a little bit more of a flavor from some countries, Germany was a very soft market in the first quarter and construction activity was still at a very low level. although we are expecting early signs of recovery. In the UK, the situation continues to deteriorate and we see declining construction activity and weak consumer confidence. Ireland, on the other hand, is positive. We see public investment on a better level and, yeah, Netherlands is showing signs of recovery and France It's still a mixed picture, but we expect an early recovery as well. Belgium, for instance, was quite stable. Overall, the same picture, January and February soft and March far better. Coming now to North America, the North American market, and that was the most impacted region in our first quarter. We see a double-digit volume decline, and that was, of course, driven by the severe winter weather and, as well, weak new residential activity. The new construction activity remains subdued. Single-family market is stabilizing, but the multi-family market is at multi-year lows. The mortgage rates in North America remain at a high level. On the other hand, our roofing business benefited from a strong backlog and that allowed some more solid production volumes. In the piping business infrastructure, the market remains somehow positive, but of course, due to the weather, we've seen there a strong volume decline. And in Canada the situation is even more challenging. So, coming now to some acquisitions. We bought the news group and that is an activity with the turnover of around 20 million euro annually, and we had a closing by the end of April. The news group that will strengthen our position in water management, in the water management segment, it's a very attractive niche for us, and it's a growing market. It's a perfect strategic fit, and it complements our infrastructure and piping portfolio. It's a small transaction, but long-term we see there a big growth potential. Coming now to our recent acquisition, ItalShare, there as well, we had closing by the end of April, and I just would like to repeat a little bit, to finance that, Acquisition, we don't need a capital increase. We have a strong balance sheet, and we will finance it by ourselves. We have a clear roadmap. Integration, deleveraging, and, of course, next year we have the call option, the opportunity to get the full ownership. With EtherShare, we enter the high-end tiles market. It's strong in the renovation segment. And, of course, we see synergies, which will rise. And, on the other hand, EtherShare is active. in the facade market and that will even turn our synergies which we see on a quite high level. eCulture in total is a company which is at the high end, has high margins. and has a strong multi-brand position, not only across Europe, but also in North America. Turning now to our numbers. Starting with revenues and EBITDA, our revenues, as already mentioned, are down by 7%, operating EBITDA Even further, it came in at 97 million. That is far below the previous year's number, but to remember you, the first quarter 2025 was a very strong quarter. The key driver for that, of course, is the reduced volumes we have seen. And here again, March far better compared with the soft start in the year. Having a look at our revenue and EVGA bridge, as you can see, of course, volume driven, we have a negative organic growth. So organic growth, Our revenues are down by 6%. We lose a little bit on the currency side. And regarding our operating EBITDA, again, you see quite significant negative organic growth. But that's all. volume driven and related to the soft start into the year and that was already expected when we published our outlook. So it's not a surprise at all. We have seen in the first quarter overall a cost inflation of 2% and that is again mainly driven by labor and energy cost. And we don't see in the first quarter more or less any impact of the conflict regarding the Middle East. That will be visible in the second quarter and, of course, the rest of the year. Our cost inflation with 2% is somehow moderate. And on the energy side, as you know, we have our fixed positions in not only natural gas, but as well, of course, overall in energy. And there, more or less now, 80% of our needed volumes are fixed. Therefore, we are there in a quite good position. We remain to focus on, of course, cost discipline and operational excellence. We are still working on optimizing our production. And, of course, we are driving an active margin management to overcome all the pressure we see in the running years. Coming now to our regions, starting with Europe East, our revenues are down by 7%. That is in line with the group development operating APTA quite weak because it's even below the decrease within the group. There we had not only the decreased volumes what we've seen, but we've seen on the cost side a higher inflation than regarding the group average and the volume decline hit all segments, all markets in the eastern region. Especially the pricing in that region was under pressure. Towards the end of the quarter, we are seeing a year recovery as well. Western Europe, our, let me say, most stable region in the first quarter, revenues only down by 3% and operating FTA by 14%. As already mentioned, we've seen quite a strong renovation demand and that of course supported the performance of that region. Energy transition continues to drive our roof and piping demand and the weakness was mainly in the beginning of the year from new build and of course the severe weather conditions. It's a mixed regional picture, but the most stable development in our first quarter. Coming now to our North America segment, that was the most challenging region because markets have been very soft, very weak, and revenues are down by 21%, operating EBITDA by 37%. As already mentioned, the very soft new-build market with weak residential construction is still a topic in North America, and in combination with an ongoing pressure on prices in piping, of course, that's not a nice environment. The US single-family Market is stabilizing, but multifamily remains very, very low. And within North America, especially Canada, is more challenging than ever. With that, I'm coming now to our outlook. And just to remain you a little bit in our assumptions for the current year, we are expecting not a structural recovery in residential construction, flat infrastructure and renovation market. And, of course, we expect that we cover the inflation, which will increase, of course, during the year due to the Middle East conflict, the price increases. But the Middle East conflict gives us as well a really limited visibility of the total year impact so far. We have mitigation measures already in place and that's not only price increases. Of course, it's a strict and strong cost management with cost discipline. We have a strong execution. We are ongoing working on working capital management as well as having a focus on our capex and spending. And still, the Fit for Growth program, which we implemented in autumn last year, is of course in place and is running. Despite the high volatility and everything, we believe we are well positioned to deliver and, of course, we are supported by our mitigation measures. And with that, I would like to close the presentation and I'm open to take your questions.