U.S. Markets close in 6 hrs 26 mins

Edited Transcript of WIE.VA earnings conference call or presentation 7-Nov-19 1:00pm GMT

Q3 2019 Wienerberger AG Earnings Call

Vienna Nov 15, 2019 (Thomson StreetEvents) -- Edited Transcript of Wienerberger AG earnings conference call or presentation Thursday, November 7, 2019 at 1:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Heimo Scheuch

Wienerberger AG - Chairman of Managing Board, MD & CEO

* Klaus Ofner

Wienerberger AG - Head of Corporate IR

* Solveig Menard-Galli

Wienerberger AG - Chief Performance Officer & Member of the Managing Board

* Willy Van Riet

Wienerberger AG - CFO & Member of Managing Board

================================================================================

Conference Call Participants

================================================================================

* Ami Galla

Citigroup Inc, Research Division - Senior Associate

* Gregor Kuglitsch

UBS Investment Bank, Research Division - Executive Director, Head of European Building & Construction Research and Equity Research Analyst

* Markus Remis

Raiffeisen CENTROBANK AG, Research Division - Chief Analyst

* Paul Chabran

On Field Investment Research LLP - Analyst

* Yves Brian Felix Bromehead

Exane BNP Paribas, Research Division - Analyst of Building Materials

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Ladies and gentlemen, thank you for standing by. My name is Emma, your Chorus Call operator. Welcome, and thank you for joining the Wienerberger conference call on the results on the third quarter of 2019. (Operator Instructions)

And I would now like to turn the conference over to Mr. Klaus Ofner, Head of Investor Relations. Please go ahead, sir.

--------------------------------------------------------------------------------

Klaus Ofner, Wienerberger AG - Head of Corporate IR [2]

--------------------------------------------------------------------------------

Thank you, operator, and also a warm welcome to the Wienerberger earnings call on Q3 results from our side. Wienerberger representatives on today's call are Heimo Scheuch, CEO; Willy Van Riet, CFO; and Solveig Menard-Galli, CPO. At the beginning of today's call, Heimo Scheuch will summarize the key developments in our financial performance in the first 9 months and speak about our expectations for the remainder of the year. After this introductory statement, he will -- we will take questions.

I now hand over to Heimo Scheuch for the executive summary.

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [3]

--------------------------------------------------------------------------------

Thank you, Klaus, and a warm welcome to all of you from Vienna. Thanks for being on the call.

Going into our set of results, we're obviously very satisfied with the performance during the first 9 months of this year. We have achieved a strong increase in revenues, about 6%, which led obviously to a substantial increase in EBITDA by 27% to nearly a little bit more than EUR 450 million and an impressive growth of net profit to more than EUR 200 million. So all in all, I think a good set of results, satisfactory, considering also the market developments in 2009 (sic) [2019], which I would consider throughout the Wienerberger Group and the activities where we are active in different countries of a more broadly flat market environment.

We have been able to do so, mainly for 3 reasons. First of all, we have continuously focused on our self-help program, which is contributing in a very satisfactory way to EUR 35 million during the first 9 months to this set of results. So the continuous efforts that we've put into our Fast Forward program are paying off, and we are confident for this year to reach the EUR 40 million as predicted. Secondly, and this is I think obviously of a major importance also that Wienerberger has been focusing during the last couple of years in improving and developing its product portfolio and turning towards more innovation in its product assortment and to provide more solutions and services to our customers. Therefore, it is possible also in such market environments that we are currently active in to grow our business. And I think that's the strong message that Wienerberger sends across. Thirdly and finally, obviously we are continuing to focus on M&A. You've seen us doing some smaller deals and recently also in the north of Europe with respect to our brick operations. So these are strongly value-enhancing M&A activities that we want to pursue. We have still a good and strong pipeline of such potential deals in front of us.

So if we look a little bit into this, and I would like to elaborate on 3 items before we go into the discussion. As I said, and I draw your attention to the fact that Fast Forward was delivering the EUR 35 million during the first 9 months. So the program is well on track. We are focusing on all the different projects, in different work streams around the business. And it's not only that we are confident about the EUR 40 million that we will achieve this year. We are confident also that the EUR 60 million that we are aiming at for 2020, we are well on track, and preparing all the projects for achieving such targets for next year. So I think here, a confident message on our self-help program within the company.

During our Capital Markets Day in London, in September of this year, we focused also on our portfolio. And we looked carefully into our portfolio and indicated that we have businesses in the range of about EUR 350 million turnover with a lower margin than the group margin and significantly lower by the way, and that we are very determined in either turning those businesses around by repositioning them, adding certain aspects and efficiency to them, that's mainly due to Fast Forward project, or also to reposition them by means of M&A as we did in certain countries like Germany and Austria. And the final one is obviously if we don't see any option in developing such businesses, to sell it as we did last year with the Austrian paper business.

Coming to this, and I'm glad to announce again that we have been able to conclude and finalize the transaction in Denmark, where we put ourselves in a position to have around roughly EUR 100 million of such turnover that was underperforming. We were able to find a right, good target where we can improve our market position, where we can grab synergies and where we can bring efficiencies towards such a business in order to improve our position and our operations. So this is a clear example for turning around our business and making it a better performer that is in line with our group margins.

Second very important item that I would like to draw your attention to is, again, our CapEx policy and how we handle CapEx within Wienerberger. We have given a clear guidance, and this is, I think, important to note, that Wienerberger has a maintenance requirement, maintenance CapEx requirement around EUR 120 million to EUR 140 million. By the way, this year, it will be around roughly EUR 135 million. And then we have discretionary CapEx, which we call special CapEx, that we put into the business for different reasons, different reasons for, as we said, performance enhancement measures, for organic growth measures or also for stronger digitalization, innovation in our business. This year, this will be EUR 120 million that we put into this business, and it will have a certain payback in the future. By the way, a very good payback. So this is the growth aspects that we focus on in Wienerberger.

And thirdly, we have M&A activity. And you've seen our track record over the last years. And again, a very disciplined and discretionary way of going into this M&A field. And this year up till now, it's about roughly EUR 34 million. And obviously, the transaction in Denmark will add to this in the fourth quarter, but we will, as you see, reasonably spend money that will enhance our value. So these are the items that I briefly wanted to talk about. There's nothing special to report in the different segments of our business. You see the numbers. You have the numbers in front of you. So a strong set of results, the margin improvement, obviously, in -- especially also the pipe area is impressive and strong. It confirms that we are working in the right direction with respect to our pipe business, value-enhancing products and also the discipline on the cost side.

So if we look for the whole of 2019, with the focus on further enhancement of our product portfolio, with a strong focus on innovation, and as I said, to focus on the performance enhancement measures, we are confident to reach the EUR 570 million to EUR 580 million. I am perfectly aware, and I anticipate some questions from you on the call that you will sort of say that probably there's some more to be done in quarter 4. But obviously, I think we -- not that we are prudent, but quarter 4 is always a weather issue, and winter comes and projects might come to a standstill. So there's still a significant effort to be done by Wienerberger and by all of us to achieve this target. So it's not a home run as some might say in the U.S. on a football perspective. So there's still some serious effort that we have to put into the business. So we see this EUR 570 million to EUR 580 million as an ambitious target still for this year.

As I said, the maintenance CapEx will be around EUR 135 million, special CapEx around EUR 120 million for this year. So in a nutshell, very satisfactory development to strong improvement of our results, I think as we have guided at the beginning of the year, is achievable. We have put all our efforts, and all our teams are working hard in order to achieve that. And as I said, in this environment, I think it's a good and satisfactory set of results.

So this is a short summary of our quarter 3 results. And I will hand over to Klaus for the questions.

--------------------------------------------------------------------------------

Klaus Ofner, Wienerberger AG - Head of Corporate IR [4]

--------------------------------------------------------------------------------

Operator, we are ready to take the questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) First question comes from the line of Yves Bromehead with Exane BNP Paribas.

--------------------------------------------------------------------------------

Yves Brian Felix Bromehead, Exane BNP Paribas, Research Division - Analyst of Building Materials [2]

--------------------------------------------------------------------------------

Three questions, if I may. My first one is on the regulatory change in -- could you clarify exactly what is impacting the building industry and if there has been any progress recently on trying to mitigate these measures given permits are down high double digits now? My second question is on the U.K., where some of your peers and some distributors have been commenting on a much more bearish view on the overall market. Can you also here maybe comment on what you're seeing and if there has been a deterioration in Q3 and if you expect that to continue? And my last question is on Eastern Europe, where margins aren't already very high levels, probably not far from the last peak or above. How should we think about next year, given some markets are a bit weaker now?

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [3]

--------------------------------------------------------------------------------

Thank you, Yves. It's Willy. Well, as a Belgian, I'm always happy to report on the Netherlands, that's good. But first of all, the Dutch government, as far as I'm informed, is coming out tomorrow with announcements on how they will mitigate this issue about nitrogen. It's about that. The issue for those would not weigh -- although the thing is that there's been a high court in the Netherlands who have ruled that nitrogen consumption as the total had to decrease, especially around some of the natural reserve -- preservations they have in the Netherlands. And it has nothing to do as such, and I reiterate that, with our products or any of our products. It is just about the processes and how can you make sure that you do not issue nitrogen in the construction industry.

Secondly, the biggest nitrogen issue is within the agriculture and not in the construction industry. So that really is a small thing. And it has been recognized by the Dutch government that they do not want to stop construction in the country because that would hamper a market which is very sound and still in high demand of housing as well in the Netherlands. So we are very -- we are waiting for the measures to be announced tomorrow. What we have read in the press and what we have heard already on the market is that they will alleviate the concerns and certainly, in the construction industry, probably remove part of that. So we look forward for a further sound Dutch market with a good demand in product.

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [4]

--------------------------------------------------------------------------------

On the U.K., if -- I think what we have seen in quarter 3 is also in line with our forecast and our expectation. We have seen the demand levels being more or less in line with what we have seen the month before in the new residential housing construction and in renovation. So no major changes in the residential part of the business. So for the rest of the year also, I don't see any major change as far as we can see, with the visibility we are having in the U.K. So demand levels are on a level that we have seen throughout the year. And Eastern Europe has also after the summer stated expectations from -- at our levels. So again, I think here, we -- you are rightly pointing that the margins have been up. But please be aware, the margins have been up mostly also by means of our own self-help and our discipline not only in pricing but also on the cost side in Eastern Europe. So I would say that we, as Wienerberger, will put all efforts in and obviously also in this part of the world to keep the margins at this level. I don't exclude that we have obviously some wage increases in Eastern Europe that are definitely high and some pressure from this next year because you all know and are all aware that these pressures on wages are high in this part of Europe. But as I said, we will manage and try to do our best in order to offset this with price increases.

This is a little early to say. We'll see this into the -- as I said, in February of next year. But as we are working right now, we are confident to achieve the numbers that we have indicated to you for this year.

--------------------------------------------------------------------------------

Yves Brian Felix Bromehead, Exane BNP Paribas, Research Division - Analyst of Building Materials [5]

--------------------------------------------------------------------------------

Okay. And just on the U.K., can you confirm whether or not the volumes are actually down year-on-year as of Q3 because -- I mean the industry was up in H1 '19. So just so I understand clearly what you mean by in line with your forecast...

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [6]

--------------------------------------------------------------------------------

Sorry, if I may interrupt you, I can't confirm that the numbers are down in Q3.

--------------------------------------------------------------------------------

Yves Brian Felix Bromehead, Exane BNP Paribas, Research Division - Analyst of Building Materials [7]

--------------------------------------------------------------------------------

Sorry, say again?

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [8]

--------------------------------------------------------------------------------

I cannot confirm that the numbers -- the volumes are down in Q3 in the U.K.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

Next question comes from the line of Paul Chabran with On Field.

--------------------------------------------------------------------------------

Paul Chabran, On Field Investment Research LLP - Analyst [10]

--------------------------------------------------------------------------------

Three questions, if I may. The first one on the price increases. So it looks like at the group level, that your price increases in Q3 were higher than expected and actually maybe, tell me if I'm wrong, but somewhat higher than in Q2. But during H1 results, you had commented about the fact that we should see erosion of price increases through the year. My question is actually simple. Is there any reason for which we would not see the same price momentum in Q4, the same price momentum in Q2 and Q3? One question on the U.S.A., it would be really helpful if you could comment on what you're expecting in terms of pricing for the full year of 2019. And finally, if you could share an update on your M&A pipeline, is there any sizable deal in your pipeline?

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [11]

--------------------------------------------------------------------------------

Well, I will start with your third question. My colleague will take over then after that. M&A activity, as I said, at my introductory statement, we are working on deals. And as you know us, we are very disciplined. So we are not aggressively moving on deals. And as they are more or less deals that we do with family businesses, they tend to take some time. So it is not by calendar year or by quarter that we can announce something. So sometimes, if I take this Danish one, we work for more than 5 years on such a deal in order to complete it. So what I'm trying -- what I tried to say is that we have very interesting deals out there that the pipeline is very nicely filled. But as I said, we are moving at our speed and our pace. And the most important thing, I think, is to create value with such transactions and not to do it in a speedy way. So I think you would count on us that we will deliver M&A activities throughout the years to come also and especially at values that are very interesting and value-enhancing for Wienerberger. So this is on the M&A. And then if we move to the U.S.

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [12]

--------------------------------------------------------------------------------

Yes. On U.S. expectation, I think it's a good -- at the moment, a good market. So we see a good momentum on both volume and pricing to continue for the rest of the year in the absence of any adverse weather conditions. And on your question about price erosion, I don't think we hinted to price erosion. What we've said is throughout the year, of course, the comparatives are getting tougher. If you remember, we had last year price increases throughout the year, and it's also what Heimo hinted to. If you look to Q4 last year, we already had price increases put in the market. We will try the same thing this year. What we had in the course of the year, of course, is more pressure from certain cost inflations which came through, being energy and being a little bit on wages. And that's actually what is going. Against that we have our Fast Forward measures that work and, of course, the performance of the group as a whole.

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [13]

--------------------------------------------------------------------------------

And take note that also the product mix plays a role. And obviously, continuously, I think you will see this in Wienerberger that as we move with our product portfolio to more value-adding products and systems that obviously the pricing is better.

--------------------------------------------------------------------------------

Paul Chabran, On Field Investment Research LLP - Analyst [14]

--------------------------------------------------------------------------------

Yes. Actually, my question was related actually to product mix. I was trying to understand if we could see the same benefit in Q4 that we have seen in Q3 and actually in H1.

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [15]

--------------------------------------------------------------------------------

And as I said in -- as Willy -- I just want to restate what Willy said. It's going to be to a lesser effect because the price increases last year have kicked in, obviously, in -- at a significant way in Q4. So that's why.

--------------------------------------------------------------------------------

Operator [16]

--------------------------------------------------------------------------------

Next question comes from the line of Markus Remis with RCB.

--------------------------------------------------------------------------------

Markus Remis, Raiffeisen CENTROBANK AG, Research Division - Chief Analyst [17]

--------------------------------------------------------------------------------

Firstly, a question related to your energy bill, if you could provide some granularity on how it will develop for the full year '19 and kind of given your hedging policy, if you could already give us some visibility on your expectations for next year. That will be the first one. And then secondly, looking ahead into the fourth quarter, should we expect more restructuring charges? And also would you expect more of asset disposals or to which extent asset disposals will impact 4Q earnings?

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [18]

--------------------------------------------------------------------------------

On energy, this year, we have in total, I think, slight -- a figure of close to about EUR 10 million, which is on a price and volume increase, both of the energy bill as a plus. At this moment, I think I would refrain from giving further guidance into 2020. I would like to package that together in the full guidance for the full year. But as you know, we hedge forward, so we are not open to spot prices and whatever. So we have already moved into 2020 to give us a certainty also on the pricing. Q4, I can -- on restructuring, I can reiterate what we said earlier. It's going to be double-digit -- lower than double-digit figure for the full year. So I do not expect, at this stage, anything major to come along.

--------------------------------------------------------------------------------

Markus Remis, Raiffeisen CENTROBANK AG, Research Division - Chief Analyst [19]

--------------------------------------------------------------------------------

Okay. And on the asset disposal?

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [20]

--------------------------------------------------------------------------------

Asset disposals, not really as a contribution. What you're trying to figure out is how much will we have for the like-for-like comparison, I see no larger things on the agenda at this moment.

--------------------------------------------------------------------------------

Markus Remis, Raiffeisen CENTROBANK AG, Research Division - Chief Analyst [21]

--------------------------------------------------------------------------------

All right. Maybe one question for clarification. In the report, you referred to the further implementation of optimization measures in Germany, Austria, Switzerland. So is that just the implementation of already kind of conclude -- or agreed measures? Or are you mulling plans for a further kind of restructuring already going into next year?

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [22]

--------------------------------------------------------------------------------

No. Clear answer, no.

--------------------------------------------------------------------------------

Operator [23]

--------------------------------------------------------------------------------

(Operator Instructions) The next question comes from the line of Gregor Kuglitsch with UBS. Kuglitsch seems to have withdrawn his question. We move on to Ami Galla with Citi.

--------------------------------------------------------------------------------

Ami Galla, Citigroup Inc, Research Division - Senior Associate [24]

--------------------------------------------------------------------------------

Just 2 questions from me. The first one is really a clarification or a follow-up on the pricing questions. I mean I was wondering if you could give us some color as to what was the mix effect within the sort of price effect for the 9-month period. The second one is if you could give us some more color on the regional split of the Fast Forward benefit that you have accrued so far. Again, are there any additional businesses or divisions which you're looking to do in terms of the restructuring side of things?

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [25]

--------------------------------------------------------------------------------

I will hand over to Solveig to answer the Fast Forward question.

--------------------------------------------------------------------------------

Solveig Menard-Galli, Wienerberger AG - Chief Performance Officer & Member of the Managing Board [26]

--------------------------------------------------------------------------------

As we explained, Fast Forward is -- is it correct?

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [27]

--------------------------------------------------------------------------------

That's correct.

--------------------------------------------------------------------------------

Solveig Menard-Galli, Wienerberger AG - Chief Performance Officer & Member of the Managing Board [28]

--------------------------------------------------------------------------------

Is a program that -- with goals over 3 years. So we have a full program, set it up in the different streams that we do with a focus on commercial excellence, manufacturing, procurement, also supply chain and administration. The 3 big ones are commercial excellence, manufacturing and procurement. Obviously, in commercial excellence, procurement, it's not about restructuring. It's about optimization, how we do things and how we enhance our efficiency, how we improve our product portfolio and set up our sales force on the commercial side. And procurement is really how we do our supplier relationship management, how we bundle the contracts on a group level and how we optimize the way we do this. And of course, they are very much countermeasure inflation rate on our input costs. So now the area in -- where it's really about optimization, considering also FTEs is the manufacturing part. Of course, there is an element in it with automation that we do. But this is not a specific reach nor anything. This is across all our 200 plant sites. So this is what is -- very broad initiatives, we go in all sites. We analyze them very deeply on what's the cost structure, what's energy, what scrap rates, what are process inefficiencies, and we take them very structurally out. And that's what we do to them. There are left and right, of course, reduction of people but not on a broad scale.

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [29]

--------------------------------------------------------------------------------

Then for the pricing, Willy?

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [30]

--------------------------------------------------------------------------------

For the pricing, as you know, we are running our business on a regional scale. And regional scale means that you follow there the mix of how things are going. If we would guide you on a group level on the mix, it would be wrongly guided because you then have to consider in what regions are you selling certain products more. And we would have to start getting a mix of countries and products, and that would not be correct. So we rather not misguide you to anything mix effects.

--------------------------------------------------------------------------------

Ami Galla, Citigroup Inc, Research Division - Senior Associate [31]

--------------------------------------------------------------------------------

Can I have a follow-up on the Fast Forward question? I mean is that fair to assume then that the EUR 35 million of benefit is evenly spread across the building solutions and the piping division?

--------------------------------------------------------------------------------

Solveig Menard-Galli, Wienerberger AG - Chief Performance Officer & Member of the Managing Board [32]

--------------------------------------------------------------------------------

It's spread according to their share. Obviously, the building solutions division is much bigger and heavier also in terms of assets and number of sites that we have. So obviously, they have a bigger share in there.

--------------------------------------------------------------------------------

Operator [33]

--------------------------------------------------------------------------------

The next question comes from the line of Anastasia Solonitsyna with UBS.

--------------------------------------------------------------------------------

Gregor Kuglitsch, UBS Investment Bank, Research Division - Executive Director, Head of European Building & Construction Research and Equity Research Analyst [34]

--------------------------------------------------------------------------------

It's actually Gregor Kuglitsch. I pressed the wrong button. I hang up instead of un-muting, so there you go. So I've got 3 questions please. So the first one is could you just actually tell us what the volume and price effect was for the 9 months for the group. I think you gave 0% and 6% for the first half, if I'm not mistaken. Just interested what the sort of 9-month trend is. And then just coming back on the guidance, I know you kind of preempted the question, but on my math, it kind of suggests a flat to even down EBITDA for the fourth quarter, kind of excluding the impact from M&A and IFRS. I just want to understand, is that -- is my math right? And I guess why would that be? Is it because last year you had a good end to the year? Or are you just trying to make sure you don't miss because of an early winter, as you kind of suggested, which is unpredictable? And then finally on CapEx. So this year, if I take the 2 CapEx lines together, I think you're at EUR 255 million. Can you give us sort of a direction of travel into next year? Will that be down, flat, up? Just -- I appreciate you're not guiding specifically, but just if you could just give us a directionality would be helpful.

--------------------------------------------------------------------------------

Heimo Scheuch, Wienerberger AG - Chairman of Managing Board, MD & CEO [35]

--------------------------------------------------------------------------------

Gregor, I just -- thank you for the 3 questions. The third one on the CapEx front, I would say it's a little down. So not -- certainly not up and not flat, but down. I hope that's enough for this stage, and you will bear with me hopefully till February to have then an accurate guidance. But so you have the first feel. On the guidance to quarter 4, I'm not arguing against your math and -- but...

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [36]

--------------------------------------------------------------------------------

But we had -- last year, we had a fantastic season up to the very end of the quarter with uninterrupted delivery in all -- nearly all the markets where we are. I'm not going to forecast any weather or anything, but this was really a fantastic run. Yes. It was a good run. Also -- we also said that very clearly last year.

--------------------------------------------------------------------------------

Gregor Kuglitsch, UBS Investment Bank, Research Division - Executive Director, Head of European Building & Construction Research and Equity Research Analyst [37]

--------------------------------------------------------------------------------

Understood. Volume and price, roughly?

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [38]

--------------------------------------------------------------------------------

Volume and price, we said we're not going to guide, so...

--------------------------------------------------------------------------------

Gregor Kuglitsch, UBS Investment Bank, Research Division - Executive Director, Head of European Building & Construction Research and Equity Research Analyst [39]

--------------------------------------------------------------------------------

No, no, just the 9 months, just what you actually -- the history.

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [40]

--------------------------------------------------------------------------------

On the 9 months? You've seen what the evolution is, and you know that the contribution of both FX and of M&A is low or lower, not as a percent -- not big as a percentage. We hinted for flat markets. So there, you have your answer.

--------------------------------------------------------------------------------

Operator [41]

--------------------------------------------------------------------------------

(Operator Instructions) We have a follow-up question from Mr. Bromehead, Exane BNP Paribas.

--------------------------------------------------------------------------------

Yves Brian Felix Bromehead, Exane BNP Paribas, Research Division - Analyst of Building Materials [42]

--------------------------------------------------------------------------------

Just a follow-up actually on a previous question on the energy cost this year. Willy, I think you said that you had EUR 10 million of cost inflation on energy, and that includes price and volume. Is that correct?

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [43]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Yves Brian Felix Bromehead, Exane BNP Paribas, Research Division - Analyst of Building Materials [44]

--------------------------------------------------------------------------------

So sorry, but would that imply that in H2 you're actually looking at some energy cost decline already?

--------------------------------------------------------------------------------

Willy Van Riet, Wienerberger AG - CFO & Member of Managing Board [45]

--------------------------------------------------------------------------------

No. I said we are hedged -- we are hedging forward. We are not support -- we're not open.

--------------------------------------------------------------------------------

Operator [46]

--------------------------------------------------------------------------------

Mr. Ofner, there are no further questions at this time.

--------------------------------------------------------------------------------

Klaus Ofner, Wienerberger AG - Head of Corporate IR [47]

--------------------------------------------------------------------------------

Thank you, operator. At the end of today's call, I would like to look ahead and invite you to join us again for our earnings call on full year results, which is scheduled for February 26 next year. All that is left for today is to thank you for dialing in and to wish you a good afternoon. Goodbye.

--------------------------------------------------------------------------------

Operator [48]

--------------------------------------------------------------------------------

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephones. Thank you for joining, and have a pleasant day. Goodbye.