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Wienerberger: Strategic transition reduces cyclicality, volume recovery on the cards - TP to €40

Strategic transformation has shaped a more resilient model — The group has been undergoing strategic transformation including: a) from wall&façade to roofs (wall&façade 50% of revenue in 2012 to c.40% in 2024); b) from new build to renovation (new build two-thirds of revenue in 2012 to 47% in 2024, c) from product to solutions (share of innovation products 23% in 2012 to 33% in 2024). As a result, there has been step change in EBITDA margin (11-13% between ’09-’18 to 17%-20% between ’19-’24) and substantial improvement in pricing power (unable to offset inflation before 2014, in line with inflation 2014-2017 and deliver a positive spread over inflation from 2018).

Volume recovery represents key upside catalyst, but more likely in the mid-term — with volume 27% lower than 2021 level and 40% lower than pre-GFC level, there are significant upsides on earning growth and margin expansion from volume recovery. We forecast a 3% volume growth for 2025, supported by recovery in Europe and UK but partially dragged by US. We expect volume recovery to accelerate beyond 2025 supported by accelerated rate cuts.

Mid-term upside potential of EBITDA €1.4bn with margin of 22.4% — group EBITDA has the potential to grow to €1.4bn with a margin of 22.4% in the mid-term when volume recovers to 2021 level while strategic transformation continues. Our analysis on best-in-class margin in the sector also supports the feasibility of achieving the 22.4% margin level in the mid-term.

Valuation attractive — stock trading in line with long term average of 6x EV/EBITDA but still at significant discount to peers. Our SoTP suggests an equity value of €50, which represents 55% upside to current share price and 27% to our TP.

Citigroup

Wienerberger hat irischen Rohrspezialisten MFP Sales gekauft

Der nach Eigenangaben weltgrößte Ziegelhersteller Wienerberger hat in Irland zugekauft. Übernommen wurde die MFP Sales Ltd., eine Firma für Rohrlösungen für Entwässerung, Dachrinnen und Kabelschutz. Im Vorjahr hatte MFP einen Erlös von 25 Mio. Euro erwirtschaftet. Zum Kaufpreis machte Wienerberger keine Angaben. Man hoffe auf den Bauboom in Irland, der kräftig staatlich gefördert werde. Auch im Infrastrukturbereich rechnen sich die Wiener gute Chancen aus.