VIENNA, Austria, Jan. 10, 2003 (PRIMEZONE) -- Wienerberger AG (Vienna:WIE) (Other OTC:WBRBY) has taken a decisive step towards the development of roof tiles as a second core business. On January 9, 2003, Wienerberger signed an agreement with Koramic Building Products NV to acquire 50% of Koramic's clay roof tile business ("Koramic Roofing") in a first step. The purchase price for the 50% stake amounts to $ 211.5 million on a cash and debt-free basis. Wienerberger intends to take over the remaining 50% of the shares in the mid-term and holds call options, which are exercisable on predefined terms. The two step procedure established for this transaction will allow a smooth transfer of roofing activities to Wienerberger and maintain the financial latitude required to further expand the core brick business.
Koramic Roofing has a strong geographic complementarity with Wienerberger's existing roofing operations comprising the 100% Swiss roofing subsidiary ZZ Wancor and the Bramac and Tondach Gleinstatten roof tile joint ventures in Eastern Europe. This acquisition will make Wienerberger the No. 2 roof tile producer in Europe. Roof tiles are a complementary product to bricks, where Wienerberger is already the leader and serves the same markets. Both bricks and tiles represent basic materials for housing construction and renovation. As a result, there is potential for synergies arising from similar end-users, distribution channels, logistics, raw materials, production technology, and environmental requirements.
Koramic Roofing operates 13 clay roof tile plants in Belgium, the Netherlands, France, Germany, Poland and Estonia. Over recent years the company has pursued a substantial investment program. In 2002 one new plant each in Poland and the Netherlands commenced production. Additionally, one plant in the Netherlands was completely reconstructed. Total capex for these measures reached $ 110 million. As a result of this investment program, Wienerberger believes that Koramic's roofing production facilities are amongst the most modern in Europe. The company holds leading market positions in Belgium, the Netherlands, France, Poland and Estonia. The two plants in Germany offer an interesting platform for the expected consolidation of the fragmented German clay roof tiles market.
In the year to December 31, 2001 (the last full-year for which financial information is available), Koramic Roofing recorded sales of $ 203.3 million and EBITDA of $ 49.4 million. In the nine months to September 2002, the joint venture had pro-forma sales of $ 142.8 million and EBITDA of $ 33.9 million. 2002 has been a year of transition for Koramic Roofing. During the year, the structure of its production facilities was improved in order to further strengthen the market position and increase capacity. The benefits accruing from recent investments will be reflected in earnings during the coming years.
The company will initially be operated as a joint venture between Wienerberger and Koramic. Heimo Scheuch will be Chief Executive of the joint venture in addition to his responsibilities as Chief Operating Officer of Wienerberger for North and West Europe. Christian Dumolin, President of Koramic Building Products NV, will serve as President of the JV. A combination of the brick and tile businesses will allow Wienerberger and Koramic Roofing to benefit from synergies, and Wienerberger can take advantage from Koramic's 120 years of experience in the roof tile industry.
The financial results of the joint venture will be proportionally consolidated at 50%. Wienerberger anticipates that this acquisition will enhance EPS on a pre-goodwill amortization basis from the year ending December 31, 2003.
The transaction reinforces the overall position of Wienerberger in the building materials market, provides a "second leg" to its expansion strategy, and creates additional growth opportunities. As one of the largest producers in Europe, the company offers Wienerberger a strong platform to further develop the clay roof tile business.
Attractions of the clay roof tile industry include:
- a stable income stream because of relatively high exposure to the renewals and maintenance business, as opposed to the more cyclical new residential construction segment - continuously increasing market shares of clay roof tiles throughout Europe - high EBITDA margins and low maintenance capex
Commenting on this major strategic move, Wolfgang Reithofer, Chief Executive Officer of Wienerberger said: "Koramic Roofing offers an attractive development opportunity in the building materials sector to complement our core brick business. This acquisition is a unique opportunity to enlarge our operations in a brick-related area. Our involvement in the clay roof tile industry provides us with enhanced growth and margin improvement potential. Furthermore, the transaction offers Wienerberger attractive cash flows and returns, and is forecast to be immediately earnings enhancing for our shareholders."
This transaction has been approved by the independent Directors of the Supervisory Board of Wienerberger (excluding the Koramic representatives) and will close on January 13, 2003. Shareholder approval for the transaction is not required. Wienerberger has obtained a fairness opinion from UBS Warburg on the financial terms of the transaction.
Wienerberger AG
The Managing Board
Vienna, January 10, 2003