Ad hoc: Wienerberger six-month revenues weaker than expected

- Strong first three months followed by lower revenues in second
quarter of 2008
- Decline of approx. 10% in operating EBITDA expected for first
half-year
- Optimization of plant network capacity to reflect market
developments
 
Vienna, July 10, 2008 - The continuing downturn in the global economy
and the resulting uncertainty among consumers and investors has
affected the entire building materials industry, and Wienerberger has
been unable to detach from this development. After a strong first
three months with a plus of 13%, revenues recorded by the
Wienerberger Group remained below expectations in the second quarter
with a decline of 4% versus the comparable period of 2007. The growth
in revenues totaled 3% for the first half of this year. However, it
should also be noted that the exceptionally high second quarter
results in 2007 were driven by a boom in Poland. Final results for
the first half of 2008 are not yet available, and will be announced
on August 19. Preliminary revenue figures indicate that a decline of
roughly 10% in operating EBITDA for the first six months and a
year-on-year decline in earnings for the full 12 months of 2008 are
to be expected.
 
Collapse of residential construction in UK; USA significantly weaker
than expected
The spread of the financial crisis to Great Britain triggered a slump
in new residential construction beginning in April. Moreover, the
contraction on the US market was stronger than expected with a 40%
drop in housing starts since the beginning of this year. In Germany,
where building permits reached a historical low in 2007, there is
still no recovery in sight. Developments in Central-East Europe
remained positive, but with weaker momentum on individual markets.
The main growth drivers in this region are Bulgaria, Romania and
Russia, while the demand for bricks in Poland continued at a high
level. In the Czech Republic and Slovakia, the margin driven price
strategy of Wienerberger and rising import activity by German brick
producers was reflected in lower sales volumes. The Hungarian market
for single- and two-family houses declined significantly in recent
months as forecasted, after a surprisingly good first quarter.
 
Optimization measures scheduled for plant network
Against the backdrop of higher inflation, rising interest rates and a
growing credit shortage, further weakness can be expected on markets
across Europe. In addition to the optimization activities implemented
during the previous year, which focused above all on extensive plant
shutdowns in the USA, the Wienerberger Managing Board has introduced
a further package of measures that is designed to counter these
developments quickly through active capacity management. Optimization
steps that were scheduled for the plant network over the mid-term
will now be moved forward to adjust capacity and thereby better
reflect current market conditions. Smaller and unprofitable plants
will be shut down and their production will be shifted to larger
facilities. These measures will result in approximately ¤ 25 million
of cash expenses and extraordinary write-downs of approx. ¤ 25
million. These plant shutdowns are expected to reduce costs by
roughly ¤ 30 million (not adjusted for inflation) beginning in 2009.
 
Increased focus on growth projects in CEE and emerging markets
In spite of the deteriorating economic conditions, Wienerberger will
continue its long-term expansion program to strengthen its geographic
portfolio. Activities are designed to focus above all on growth in
Central-East Europe and the emerging markets. These investments will
total roughly ¤ 500 million in 2008. Selected growth projects are
also planned for 2009, whereby the volume will be less than
investments made during the accelerated growth program in 2007 and
2008.
 
For additional information contact:
Karin Hofmann, Public Relations
T +43(1)60192-463  |  communication@wienerberger.com
 
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