CEO Letter

Dear Shareholders,

2024 marked the third-best year in our company’s history, reflecting the strength of our strategy, our resilience, and our strong operational performance. Despite a challenging market environment, particular in the new residential housing segment, we maintained robust margins through disciplined cost management and operational efficiency. This achievement was only possible thanks to the contribution of our more than 20,000 highly skilled colleagues who continuously focus on customer orientation, operational excellence and delivering the highest quality of our products and services.

The construction sector faced significant headwinds in 2024, including a sharp decline in single- and multi-family home construction especially in markets such as Germany and Austria which saw declines of more than 25% compared to the previous year. Rising interest rates and increasing construction costs contributed to weak demand, while political uncertainties linked to elections, changing regulatory frameworks and the proliferation of reporting requirements created further complexity. The high volatility in market demand made long-term planning challenging, further amplifying the pressure on our capacity utilization. Against this backdrop, the anticipated recovery in new residential housing markets did not materialize as originally planned, significantly impacting our volumes, especially in our ceramic wall division in continental Europe.

To address these challenges and to maintain robust margins we swiftly implemented disciplined and proactive cost management and operational efficiency measures. We increased the flexibility of our production cost structure, drove innovation, and expanded our system solution portfolio. We intensified restructuring measures, made extensive capacity adjustments, and delivered significant fixed cost savings. These measures have contributed € 100 million in profits, securing a solid group-level operating EBITDA margin of around 17%, and enabling us to deliver an operating EBITDA of € 760 million, in line with our guidance. In addition, we put a strong focus on working capital by reducing inventory. As a result, we generated free cash flow of close to € 420 million.

The resilience of our diversified product and system solution portfolio was confirmed by the strong performance of our roofing segment throughout our European operations. With its significant exposure to the renovation market our roofing segment showed a strong performance throughout its European markets. We are currently adding two new plants to our roofing network in the UK and Hungary.

Our piping operations continued to grow and gained market shares in the infrastructure segment for water and energy management. By upgrading our plant network and adding new system solutions, the piping division contributed significantly to the overall performance of the group and represents the biggest unit within the wienerberger group at 30% of 2024 revenues.

Strengthening Our Market Position: Accelerated Integration, Synergies and Strategic Growth

A major milestone in 2024 was the successful completion and integration of Terreal, further strengthening our market position and our solution offering for the entire building envelope. The integration process advanced ahead of schedule, delivering a positive contribution to our overall profitability. Lower market activity allowed us to accelerate our proactive restructuring efforts, optimizing resources, and realizing synergies faster than initially anticipated. Beyond Terreal, additional strategic acquisitions during the year expanded our portfolio, enhanced our supply chain efficiency, and positioned us for sustainable long-term growth.

Another well executed example is the integration of FloPlast and Cork Plastics, which has strengthened the resilience of the UK & Ireland business, reduced its exposure to the declining new build residential sector, and enabled the company to achieve like-for-like sales revenue growth in 2024 despite a market decline of over 10%.

Also, North America serves as a strong best-practice example of the impact of our measures. While 2024 saw the same level of housing starts as in 2020, we successfully grew our EBITDA by 140% since then. This clearly highlights the effectiveness of our cost-cutting initiatives and the synergies realized across our businesses.

Following significant M&A in 2024, our near-term priority is on consolidating these investments and further strengthening our balance sheet. We are focused on prudent financial management and will take a balanced approach to capital expenditures and acquisitions. In 2025, we will continue our operational efficiency efforts and adhere to our disciplined and shareholder value-oriented capital allocation policy.

Ambitious Sustainability Goals: Driving Decarbonization through Targeted Investment

Sustainability has always been an integral part of wienerberger’s strategy. Our goal is to ensure that future generations can enjoy a high quality of life. To this end, we are committed to fighting climate change and contributing to achieving the European Green Deal’s target of net zero emissions by 2050.

In 2024, we were fully committed to our sustainability strategy, setting, and delivering against ambitious goals in decarbonization, circular economy, and biodiversity to create a livable future for generations to come.

One of our key achievements in relation to our decarbonization strategy and our commitment to sustainable construction solutions was the opening of wienerberger’s modernized nearly CO₂-neutral brick plant in Uttendorf, Austria, where we installed the world’s largest electric industrial kiln. Thanks to this innovation, we now operate Europe’s most sustainable brick production facility within wienerberger, setting new industry standards. In the future, other sites will also benefit from the expertise and technologies developed there.

Strong Financial Discipline in 2024

We maintained strict financial discipline, focusing on working capital management, capacity efficiency, and the divestment of non-operational properties and surplus assets. As a result, we achieved free cash flow generation of close to € 420 million.

Our robust financial position allows us to continue generating sustainable value for our shareholders. We remain committed to a balanced approach to capital allocation, and we propose a total dividend payout at approximately the same level as prior year, corresponding to a dividend per share of € 0.95. This represents a dividend payout ratio of 33% of free cash flow and implies an attractive dividend yield. Share buybacks remain an important part of our capital allocation strategy which, together with an attractive dividend policy, offer an enhanced shareholder return. In the beginning of 2025, we successfully completed our latest share buyback program. To further enhance shareholder value, we will cancel up to 2% of the share capital.

Outlook

Looking ahead, while market conditions are improving slowly, we acknowledge the continued low visibility and high uncertainty in our end markets. Given this challenging environment, we remain committed to strict cost discipline and operational efficiency to expand operating EBITDA margin for the group to 17.5%. Our strategic priorities include optimizing operations, increasing efficiency, and seizing growth opportunities. With a strong financial position and a clear strategic direction, we are confident in continuing to generate substantial long-term value for our shareholders through disciplined capital allocation and sustainable growth.

Under the assumptions that (i) our relevant end markets show a stable development throughout 2025 and (ii) interest rates will be cut further by the respective central banks throughout 2025 in line with current market expectations, wienerberger should achieve an operating EBITDA of approximately € 800 million.

wienerberger is more resilient, innovative, and efficient than ever – already generating 33% of our revenue from innovative products today, with a goal of reaching 35% by 2026. One major step was the launch of Wioniq, bringing together four innovative companies – Inter Act, I-Real, Wideco, and Slatek. In doing so, Wioniq establishes a platform for expansion in the infrastructure sector for water and energy management, which offers significant growth potential.

Innovation and sustainability go hand in hand, which is why sustainability is at the core of our identity, driving both progress and our positive impact on the planet and people. With the Sustainability Program 2023-2026, we have set ambitious targets that expand our environmental and social commitments, strengthening both our internal processes and our contributions to zero-emission buildings and climate resilience – a path we are committed to continuing in the future.

Thank you for your continued trust and support,

Heimo Scheuch
Chairman of the Managing Bard of Wienerberger AG
CEO