Success Story #1 Building for People – 200 Years of Wienerberger
“To stand up to competition, it all comes down to one single factor that determines whether you will be successful or not, and that is the people who help a company identify opportunities, take the initiative and act.” Heimo Scheuch, CEO of Wienerberger AG
Putting the customer center stage
Building for People – 200 Years of Wienerberger
“Building for People” means putting people center stage, a promise that Wienerberger has been fulfilling for 200 years with entrepreneurial spirit and the power to innovate. This corporate culture goes all the way back to our founding fathers: Alois Miesbach, who purchased the brickworks on Wienerberg and turned them into Europe’s most important brick factory of the 19th century, and his nephew and successor Heinrich Drasche, who led the company on a trajectory of growth and innovation. He installed the first continuous kiln and had the company listed on the Vienna Stock Exchange in 1869.
An outstanding personality of the more recent past is Christian Dumolin. In 1996, he contributed Terca Bricks, Europe’s largest manufacturer of facing bricks, to Wienerberger. As a major shareholder and member of the Supervisory Board, he played an important role in shaping the development of the company up to 2013.
Our entrepreneurial spirit will continue to drive us in the years to come and motivate us in our efforts to improve people’s quality of life through sustainable and outstanding building material and infrastructure solutions.
To stand up to competition, it all comes down to one single factor that determines whether you will be successful or not, and that is the people who help a company identify opportunities, take the initiative and act.
Heimo Scheuch, CEO of Wienerberger AG
Success Story #2 Building for People – Digitalization
“For me, ‘Building for People’ means joining forces to improve people’s quality of life. This is the path we are consistently pursuing at Wienerberger.” Jörg Reinold, Chief Information and Digital Officer of Wienerberger AG
We are shaping the digital future of our industry
Building for People – Digitalization
Digitalization changes the way we communicate, work, interact and innovate. State-of-the-art technologies help us raise our customer relations and business processes to a higher level. This applies to Wienerberger’s entire business model – from sales to administration to production. We take the lead in shaping the digital transformation of the building materials industry.
We focus on solutions that generate added value for our customers and partners. The virtual reality app, complete with VR goggles, which takes customers on a virtual tour of their future home, is an excellent example. Digital processes open up new fields of business for us: The first completely digital e4 house is under construction in the Czech Republic. It is designed and built by means of Building Information Modelling (BIM). Our innovations would not be possible without our highly qualified employees – in a joint effort with them, we are advancing the digital transformation.
For me, “Building for People” means joining forces to improve people’s quality of life. This is the path we are consistently pursuing at Wienerberger.
Jörg Reinold, Chief Information and Digital Officer of Wienerberger AG
Success Story #3 Building for People – Fast Forward 2020
“To me, ‘Building for People’ means harnessing all the potential at Wienerberger in the best possible manner. Together we can achieve a lot.” Solveig Menard-Galli, Chief Performance and Transformation Officer of Wienerberger AG
We are developing the potential at Wienerberger
Building for People – Fast Forward 2020
We are striving to become top of the class in everything that we do. With the Fast Forward 2020 program we are a big step closer to achieving this goal. As part of our operational excellence, the program makes a substantial contribution to the implementation of our corporate strategy. The program aims at improving the company’s financial performance and tapping into available potential throughout the Group. The objective is clear: increasing Wienerberger’s EBITDA by EUR 120 million in the three years from 2018 to 2020.
Fast Forward 2020 is being implemented in six work streams – from more efficient production processes to strategic pricing and portfolio structuring to procurement optimization. By 2020, we will invest approx. EUR 50 million to leverage the potential for improvements. At the same time, we are developing the expert know-how of our employees to make Wienerberger fit for the future.
To me, “Building for People” means harnessing all the potential at Wienerberger in the best possible manner. Together we can achieve a lot.
Solveig Menard-Galli, Chief Performance and Transformation Officer of Wienerberger AG
Success Story #4 Building for People – Innovation
“For me, “Building for People” means creating affordable housing where people feel at home. This is the goal we pursue every day at Wienerberger.” Alexander Lehmden, Head of International Product Management Wall of Wienerberger AG
We never stop thinking about the future of housing
Building for People – Innovation
Wienerberger regards the transformation of the industry as an opportunity. As a market leader in terms of technology and innovation, we shape the market of the future and explore new fields of business. We develop energy-efficient building systems, safe and secure supply networks, and environment-friendly pavers for our customers. In all these areas, innovation plays an important role. Our development priorities range from building design to execution to the re-use of products.
Cooperation with partners is an essential component of successful innovation. For example, we are testing the masonry robot designed by Fastbrick, a company based in Australia, for the European market. The robot helps to save time and costs at the construction site. Strategic cooperation also opens up new fields of business for us, such as high-performance insulating materials for residential construction or pre-insulated pipe for infrastructure applications. There is a strong driving force behind all these developments: the innovative power of our employees.
For me, “Building for People” means creating affordable housing where people feel at home. This is the goal we pursue every day at Wienerberger.
Alexander Lehmden, Head of International Product Management Wall of Wienerberger AG
Chief Executive’s Review
Ladies and Gentlemen,
In 2019, Wienerberger is celebrating the 200th anniversary of its foundation and the 150th anniversary of its listing on the Vienna Stock Exchange. It is our constant focus on people in everything we do that has made this impressive double jubilee possible. This is why our 2018 Annual Report is entitled “Building for People”. Consistent customer orientation has always been a central pillar of our corporate identity. This was true in the 19th century, when Wienerberger contributed substantially to the construction of the imperial city of Vienna. And it is still true in the 21st century, as we continue to evolve from a supplier of building materials to become a full provider of innovative system solutions for buildings and infrastructure. We are determined to remain as close to our customers as possible and have therefore reorganized our business units. Wienerberger Business Solutions offers our customers the complete range of innovative products for wall, facade, roof, and paving applications. Wienerberger Piping Solutions will be developed into a full-range provider of smart infrastructure in the fields of water and sewage, building installations and special solutions for industrial and energy applications. In the North America Business Unit, our aim is to further pursue our strategy of expansion through organic growth and, at the same time, contribute to market consolidation and improve our regional presence through acquisitions.
In the 21st century, we are taking exactly the same customer-focused, sustainable and forward-looking management approach as the founding fathers of our company in the 19th century.
Alongside this ongoing cultural change, we are working on a comprehensive strategy of digitalization in order to make our processes even more efficient in the years to come and to offer our customers an attractive range of innovations: from building design apps to virtual reality solutions. This is our way of pursuing the sustainable and forward-looking approach that characterized the work of our founding fathers in the 19th century.
Today, innovative products account for more than one quarter of our total revenues. This is attributable to the successful development of new products and services, on the one hand, and a selective policy of acquisitions, on the other hand, which we are pursuing consistently. In 2018, we acquired a stake in the Interbran Group with whom we will work as strategic partners on the development of new and sustainable materials with outstanding thermal insulating properties.
Acquisitions in Europe and the USA, as well as the divestment of our Austrian paver operations, are other examples of how we implemented our strategy of acquisitions and portfolio optimization in 2018.
Wienerberger has delivered an excellent performance. We therefore propose that the Annual General Meeting increases the dividend by 70% to € 0.50 per share.
Trendsetting solutions demand a holistic approach and responsible action. We have therefore made sustainability an integral part of our corporate strategy. We have set ourselves ambitious targets and are well on track toward further improving our ecological, social and societal performance. We will continue along these lines and intensify our efforts.
Wienerberger delivered an excellent performance in 2018. We generated a 6% increase in revenues to a new record high of € 3.3 billion. EBITDA on a like-for-like basis rose significantly by 15% year on year to € 469.3 million. This strong growth is attributable to the persistent and sustainable implementation of our corporate strategy: first of all, through the improvement of our market position and organic growth generated by innovative products and services; secondly, through the implementation of optimization measures within the framework of our Fast Forward 2020 program; and thirdly, through targeted bolt-on acquisitions aimed at diversifying and strengthening our current operations. In each of these areas, we have met all our targets for 2018.
We are continuously improving our customer proximity. This ongoing cultural change goes hand in hand with a comprehensive strategy of digitalization.
The strong development of earnings and the ongoing optimization of our portfolio led to a substantial 55% increase in free cash flow to € 236.5 million (as compared to € 152.5 million in 2017). Our strategic growth investments of € 158.9 million were therefore financed exclusively from free cash flow. Our Fast Forward 2020 program enabled us to identify potential for improvements in all business areas. On this basis, we agreed on a comprehensive set of measures that are now being implemented. In the first year of the program, we recorded savings of roughly € 20 million. This shows that our target of achieving sustainable improvements in EBITDA totaling € 120 million between 2018 and 2020 is ambitious, but realistic. Our balance sheet, with a debt repayment period of 1.4 years at the end of 2018, is very sound. In view of these positive developments, we will propose to the Annual General Meeting that the dividend be increased by almost 70% from the previous year’s level to € 0.50 per share.
Notwithstanding existing factors of uncertainty the successful results of 2018 provide a solid basis for Wienerberger’s continued growth in 2019. In the year of our 200th anniversary, in particular, we are confident of being able to reap the benefits of our long-term orientation: In stable to slightly growing markets, we plan to generate organic growth on the basis of our innovative product range. Our Fast Forward 2020 program of optimization measures is making excellent progress and will enable us to realize an EBITDA contribution of another € 40 million in 2019. Moreover, we are working on a highly attractive acquisition pipeline. We therefore regard a further substantial increase in EBITDA on a like-for-like basis to between € 560 and 580 million at Group level as a realistic target. We are full of optimism taking our company forward into its third century.
Wienerberger delivered an excellent performance in 2018. We increased our revenues to a new record level of € 3.3 billion. Organic EBITDA rose significantly by 15% to € 469.3 million.
This steep growth is attributable to the persistent implementation of our corporate strategy: first of all, through organic growth generated by innovative products and services; secondly, through the implementation of our Fast Forward 2020 program of optimization measures; and thirdly, through targeted acquisitions aimed at further growth. In each of these areas, we have met our targets for 2018.
We live by our values and share our visions and our goals. Based on our strong corporate culture, successful local teams join forces in a dynamically evolving, international company.
Our employees are crucially important for the success of our company. Thanks to their professionalism, their passion and their entrepreneurial spirit we can seize opportunities, take purposeful action, and create value for our shareholders.
We want to be the most highly regarded producer of building materials and infrastructure solutions and the preferred employer in our markets. We share our values, our knowledge, our experience and our success.
We improve people’s quality of life by providing outstanding, sustainable building material and infrastructure solutions.
The primary goal of our entrepreneurial activities is to achieve a sustainable increase in the value of the company in accordance with ecological, social and economic principles.