New Wienerberger CEO implements comprehensive action plan
(Thomson Reuters ONE) - Corporate news announcement processed and transmitted by Hugin AS.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------------ - Weaker-than expected new residential construction triggers revenuesand earnings decline- New CEO Heimo Scheuch launches immediate action plan- Cost savings of ? 150 million expected for full year- Financing secured for WienerbergerVienna, August 18, 2009 - Wienerberger recorded a 29% drop inrevenues to ? 898.1 million for the first six months of 2009. After aweather-related very weak first quarter (-37% year-on-year inrevenues), the second quarter decline was more moderate in comparison(-22%). Results for the first half-year were the consequence of astronger-than-expected downturn on new residential constructionmarkets across Europe and North America in the wake of the globaleconomic and financial crisis. The loss of consumer confidence andabove all a lack of financing have notably slowed the pace of newconstruction. A drop in sales volumes, lower average prices and costsarising from extensive standstills throughout the Group's plantnetwork to reduce inventories as part of active working capitalmanagement triggered a decline in operating earnings forWienerberger: operating EBITDA (before restructuring costs) fell by57% to ? 100.6 million and operating EBIT by 94% to ? 7.8 million forthe first six months of 2009. Profit after tax was negative at ?-204.0 million, above all due to ? 59.1 million of restructuringcosts for optimization measures as well as ? 28.1 million ofimpairment charges to property, plant and equipment from thewrite-down of real estate and? 125.4 million of impairment charges to goodwill.New residential construction declines in all key Wienerberger marketsduring H1 2009Record prior year results in Central-East Europe were followed by thestrongest revenue and earnings declines in the Group due to thespread of the global financial crisis to the construction industry inthis region. Weaker demand, especially in the UK, had a negativeimpact on revenues and earnings in North-West Europe. Earnings inCentral-West Europe were influenced by continuing weakness on the newresidential construction market in Germany as well as the costs ofextended plant standstills at the beginning of this year. The USAreported a further decline in housing starts during the first monthsof 2009 from the very low prior year level.Impairment charges of ? 125.4 million to goodwillAgainst this backdrop, impairment testing for the Group's assets wasbased on very conservative assumptions for the future development ofWienerberger's business. These stress tests resulted in impairmentcharges of ? 125.4 million to goodwill, which were recognizedprimarily in the USA, the UK, France, Italy, Germany, Scandinavia andthe Baltic States. The impairment charges of ? 50.4 millionrecognized to goodwill in the North America segment during the firsthalf-year are related above all to the Group's regional business unitin the Midwest. Wienerberger continues to view the USA as a growthmarket, but the structurally weak Midwest - where the automobileindustry is a key driver for growth - is not expected to recoversignificantly over the mid-term and an impairment charge wastherefore required. Weaker demand for facing bricks as well asexpectations for reserved market recovery after a turnaround, both inthe UK and Continental Europe, are the main reasons for theimpairment charges recognized by Wienerberger in the UK, France andGermany.Implementation of comprehensive action plan by Heimo Scheuch and histeamHeimo Scheuch, who started as Wienerberger's CEO on August 1 in avery difficult market environment, summarized the situation bycommenting: "Exceptional times require exceptional measures.Stronger-than-expected declines on our markets during the firsthalf-year called for further action, and we responded quickly to thevery weak first quarter by extending our restructuring program.Specifically, we implemented an action plan that includes additionaladjustments to production capacity, active working capitalmanagement, a reduction in fixed costs and a cutback in investmentsto a minimum. This year we intend to close or mothball 26 plants,instead of the originally planned 20, to adjust our capacity toreflect the weaker demand and also reduce inventories. We estimatethe costs for these measures at ? 100 million, whereby approx. ? 60million represent special write-downs. Wienerberger took 18 plantsoff-line during the first six months, which resulted in ? 59 millionof restructuring costs and unfortunately also involved nearly 1,000jobs. In addition, extensive temporary standstills were scheduledthroughout the entire plant network to reduce inventories. Togetherwith the mothballed production lines, these temporarily closedlocations represent a substantial capacity reserve that we canreactivate quickly as needed." The new Wienerberger Managing Boardhas also introduced added measures to optimize administration andsales as a means of cutting fixed costs and limited investments tothe necessary minimum.Cost savings of ? 90 million already in H1In spite of the tough times, Heimo Scheuch draws a positive picture:"During the past half-year we were able to realize savings of ? 90million in personnel and maintenance costs compared with the firstsix months of 2008. This reduction in fixed costs resulted mainlyfrom capacity adjustments and the optimization of administration andsales beginning in mid-2008, but also includes positive effects frommeasures launched in early 2009. Maintenance capex totaled ? 30.7million, which is 38% or roughly ? 19 million less than the firsthalf of last year, and growth investments of ? 60.3 million will onlybe used to complete the projects started in 2008. Even though theoperating environment is adverse we were able to generate free cashflow of ? 7.9 million for the first six months. Active workingcapital management also helped us to reduce inventories by roughly ?58 million during the first half of 2009, even though the buildingmaterials market remains difficult. I am therefore confident that wewill be able to reach our goal to reduce net debt by ? 100 millionthis year."Refinancing requirements reduced up to the end of 2011; higherflexibility with covenantsIn connection with steps to safeguard the Group's financing, HeimoScheuch pointed out the good, longstanding business relationshipswith Wienerberger's banks and explained: "We actively opened adialogue with our banks during the past spring and, through theextension of existing loan terms, were able to substantially reduceour refinancing requirements up to the end of 2011. This year ourliquid funds will more than cover the loans due for repayment.Refinancing is required for a total of ? 150 million in 2010 and2011, which is contrasted by ? 290 million of undrawn, committedcredit lines. In addition, the banks have recently agreed to a changein the covenants that will provide us with greater flexibility."Savings of ? 150 million expected in 2009Wienerberger expects a further drop in revenues and earnings duringthe second six months of 2009, but these declines should be moremoderate than the first half-year because of the lower prior yearvalues. "From today's perspective it is too early to speak of arecovery since the economic outlook remains uncertain. Cashpreservation and the reduction of net debt by ? 100 million are ourtop priorities in this difficult operating environment. We willtherefore continue to focus on the implementation of our action planover the coming months. For the full year, I expect cost savings of ?150 million. The steps taken in 2009 should bring additional savingsof at least ? 25 million beginning in 2010, or a cumulative reductionof ? 175 million in fixed costs. We will limit investments to aminimum in 2010, whereby my estimates call for ? 80 million that willbe invested almost exclusively in maintenance capex. From my point ofview, we have taken all the necessary steps. In spite of thechallenging market environment, I am convinced that Wienerberger willbe able to emerge from this crisis as an even stronger player. Thebalanced country portfolio and innovative product range ofWienerberger form a sound basis to realize long-term benefits from arecovery", summarized Heimo Scheuch.Earnings Data 1-6/2008 1-6/2009 Chg. Year-end in % 2008Revenues in ? 1,263.6 898.1 -29 2,431.4 mill.Operating EBITDA 1) in ? 235.6 100.6 -57 440.1 mill.Operating EBIT 1) in ? 136.0 7.8 -94 239.8 mill.Profit after tax 2) in ? 98.6 -204.0 <-100 103.3 mill.Earnings per share in ? 0.97 -2.65 <-100 0.81Adjusted earnings in ? 1.04 -0.17 <-100 1.69per share 3)Free cash flow 4) in ? 30.2 7.9 -74 195.4 mill.Maintenance capex in ? 49.9 30.7 -38 98.4 mill.Growth investments in ? 203.9 60.3 -70 407.2 mill.Employees 5) 15,162 13,104 -14 -Segments 1-6/2009 in ? mill. and % Central- Central- North- West North America Investments East Europe West Europe Europe 6) and Other 7) 6)Revenues 275.5 (-39%) 182.4 (-18%) 380.2 (-23%) 76.3 (-36%) -16.3 (+34%)Operating 48.5 (-64%) 11.4 (-37%) 61.4 (-32%) -7.9 (<-100%) -12.8 (+14%)EBITDA 1)Total 38.8 (-53%) 7.9 (-57%) 28.4 (-72%) 8.4 (-63%) 7.5 (-74%)investmentsEmployees 5,391 (-8%) 2,180 (-10%) 4,137 (-15%) 1,153 (-48%) 243 (+14%)5)1) Adjusted for non-recurring income and expenses2) Before minority interest and accrued hybrid coupon3) Adjusted for non-recurring income and expenses; after hybridcoupon4) Cash flow from operating activities minus cash flow from investingactivities plus growth investments5) Average number of employees for the period6) Crossborder trading activities of the Netherlands and Germany weretransferred to the Central-West Europe segment as of January 1, 2009(previously: North-West Europe); the comparable figures from prioryear period were adjusted accordingly7) Including Group eliminations and holding costs; negative revenuesare due to the offset of inter-company salesNote: in the table of segment data, changes in % to the comparableprior year period are shown in bracketsVisit www.wienerberger.com to download the interim financial reportwith detailed information and view a live Internet transmission ofthe press conference at 9:00 a.m. CET.For additional information contact:Barbara Braunöck, Investor and Public RelationsT +43(1)60192-463 | communication(at)wienerberger.comIf you do not wish to receive the Wienerberger newsletter any longer,send an e-mail with subject: "unsubscribe newsletter" tocommunication(at)wienerberger.com.http://hugin.info/132489/R/1335400/317351.pdf --- End of Message ---Wienerberger AGWienerbergstraÿe 11 Vienna AustriaWKN: 83170; ISIN: AT0000831706; Index: WBI, ATX , ATX Prime;Listed: Prime Market in Wiener Boerse AG;
Datum: 18.08.2009 - 08:00 Uhr
Sprache: Deutsch
News-ID 4803
Anzahl Zeichen: 0
contact information:
Town:
London
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 298 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"New Wienerberger CEO implements comprehensive action plan"
steht unter der journalistisch-redaktionellen Verantwortung von
Wienerberger AG (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
