Wienerberger AG ((AT:WIE)) has held its Q4 earnings call. Read on for the main highlights of the call.
Wienerberger AG’s recent earnings call conveyed a cautiously optimistic sentiment amid challenging market conditions. The company reported significant achievements, including strong EBITDA, increased free cash flow, and successful strategic acquisitions. However, challenges such as a decline in the new residential housing market and substantial restructuring costs were also highlighted. The focus remains on maintaining margin expansion and disciplined capital management.
Strong Operating EBITDA
Wienerberger reported an operating EBITDA of EUR 760 million, marking the third-best year in terms of EBITDA. This performance underscores the resilience of their business model despite market volatility.
Free Cash Flow Increase
The company achieved nearly EUR 420 million in free cash flow through efficient management of working capital and capacity, demonstrating a strong cash generation capability.
Successful Terreal Acquisition
The acquisition of Terreal positively impacted EBITDA, with an EBITDA margin above 20%. The integration is progressing faster than expected, boosting the roofing business.
Piping Segment Expansion
The piping segment now accounts for over 30% of Wienerberger’s revenues, making it the fastest-growing segment within the company.
Disciplined Capital Management
Wienerberger proposed a dividend increase from EUR 0.90 to EUR 0.95 per share and continued share buyback plans, highlighting disciplined capital allocation.
Growth in North America
Despite challenges in new residential housing, EBITDA in North America increased by 140% compared to 2020, showcasing efficient management.
Decline in New Residential Housing Market
Both North America and Europe experienced a decline in the new residential housing market due to high interest rates and political instability.
Volume and Price Pressure
The overall group volume declined by 3%, with pricing pressure particularly noted in the Eastern European new residential housing product group.
Restructuring Costs
The company incurred substantial restructuring costs, including EUR 78 million in structural adjustments, impacting the net result.
Challenges in Europe West
Recovery in Western Europe was slower than expected, with countries like France and Germany facing ongoing challenges.
Energy Cost Fluctuations
Energy prices slightly increased in the second half of 2024, affecting cost management despite some forward buying strategies.
Forward-Looking Guidance
For the fiscal year 2025, Wienerberger projects an operating EBITDA of approximately EUR 800 million, assuming stable end markets and anticipated interest rate cuts. The company aims to expand its operating EBITDA margins to 17.5% through disciplined cost management and efficiency improvements. They also plan to maintain a net debt to EBITDA ratio of 2x, focusing on sustainable long-term growth and strategic capital allocation.
In summary, Wienerberger AG’s earnings call reflected a cautiously optimistic outlook, with strong financial performance and strategic initiatives. Despite challenges in the housing market and restructuring costs, the company remains committed to margin expansion and disciplined capital management, setting a promising path for future growth.