Wienerberger AG: Wienerberger acquires Tondach Gleinstätten

Additional information on adhoc-release

Vienna (pta004/02.07.2014/08:00 UTC+2) Wienerberger strengthens clay roof tile business and expands presence in Eastern Europe
- Value-creating transaction with above-average growth potential
- Transaction subject to approval by antitrust authorities

Wienerberger yesterday announced (subject to the approval of the antitrust authorities) the acquisition of the Tondach Gleinstätten Group ("Tondach"), the leading producer of clay roof tiles in Central-East Europe. This transaction will not only expand Wienerberger's presence in Eastern Europe, but also strengthen its positions in clay tiles on the European core markets. It will also give the Group additional above-average growth perspectives over the medium- and long-term. Heimo Scheuch, Chief Executive Officer of Wienerberger AG, explained: "Clay roof tiles are the preferred covering material for pitched roofs, both in new construction and renovation, and have steadily increased market shares over alternative materials for many years. Central-East Europe is still characterized by substantial pent-up demand for new construction and renovation, especially after the weak crisis years. There is a current trend toward clay roof tiles, above all in renovation, where we already offer complete solutions for roofing - including thermal insulation and accessories - in Western Europe. Studies in Belgium and the Netherlands have shown that our roofing solutions can help to reduce energy costs by 50% after renovation. Since Tondach offers comparable packages, I see interesting growth opportunities in this area, above all on the renovation market in Eastern Europe. We underscored our clear commitment to clay roof tiles and to Eastern Europe in 2011 when we increased our investment in Tondach from 25% to 50% and divested the concrete roof tile business. This takeover represents the logical consequence and a further milestone in our transformation to a comprehensive provider of application-oriented building material solutions. Tondach will not only complete our offering for the roofing business in Eastern Europe, but is a further value-creating development step for Wienerberger that opens very interesting growth perspectives."

Wienerberger holds 82% of the shares after the transaction; the rest is owned by banks
Prior to the transaction, Tondach was owned by Wienerberger (50%) together with two private family trusts (50%). The purchase of the family-held shares was accompanied by negotiations with Tondach's financing banks regarding the reorganization of the capital structure and long-term financing for Tondach. In connection with these negotiations, the banks agreed to swap Euro 26 million of Tondach's debt for equity. The result is a new ownership structure with Wienerberger holding 82% and the banks together 18% of the shares in Tondach. In addition, Wienerberger received call options for the shares owned by the banks that can be exercised in 2017 and 2018 respectively. Heimo Scheuch expressed his satisfaction over these results: "I would like to thank the representatives of both family trusts and, above all, the Olbrich family for their outstanding and constructive cooperation. They have my greatest admiration for their efforts in developing the company. I would also like to thank the banks, which again proved to be reliable and long-term oriented partners during the negotiations to reorganize the capital structure."

Purchase price: EBITDA multiple of 7.3
The purchase price for the shares acquired by Wienerberger totaled Euro 41 million. The major component, namely Euro 23.4 million, will be paid in the form of treasury shares. Based on budgeted EBITDA of Euro 23 million for Tondach for the full year 2014 and expected net debt of approx. Euro 60 million at year-end 2014, the EBITDA multiple for the takeover equals 7.3 - or 6.5 after the realization of planned synergies of roughly Euro 3 million - which is substantially lower than comparable industry transactions.

Takeover financed with treasury shares and cash
Wienerberger plans to finance the transaction with treasury shares and available cash. Even after the inclusion of Tondach's liabilities, Wienerberger is expected to have a ratio of net debt / operating EBITDA of less than 2.5 at year-end 2014. Heimo Scheuch emphasized: "Strict financial discipline has always been our stated goal, but we also intend to utilize the financial capacity within our internal targets for value-creating acquisitions. We will therefore hold the ratio of net debt / operating EBITDA below 2.5 at the end of this year and, at the same time, continue to evaluate opportunities for further value-creating growth steps."

Modern industrial base and implementation of restructuring program
In the years before the crisis Tondach invested in a modern, efficient plant network and created a very strong industrial base in Eastern Europe. The sharp drop in construction in this region led the company to carry out an extensive restructuring program in 2012 and 2013 to align corporate structures to the market. The related measures focused primarily on the streamlining of production capacity, the optimization of administrative structures and strict working capital management. Heimo Scheuch added: "The rapid and targeted implementation of these optimization measures as well as the modern and efficient plant network give Tondach an excellent industrial base and strong market positions to support further development. The turnaround has been completed, and I expect Tondach to generate substantial growth in 2014."

EBITDA of approx. Euro 23 million expected in 2014
In answer to a question on the effects on the Group's balance sheet in 2014, Heimo Scheuch explained: "This depends on the timing of the approval by the antitrust authorities, which is the requirement for full consolidation. For Tondach, I expect an improvement in revenues to roughly Euro 160 million and of EBITDA to approx. Euro 23 million in 2014. Net debt should amount to approx. Euro 60 million at the end of this year based on the conversion of bank liabilities, projected free cash flow and the sale of non-core real estate. The transaction will also result in positive non-recurring evaluation effects on our consolidated accounts. However, these effects are dependent on the result of the pending purchase price allocation and the timing of the approval by the antitrust authorities."

Tondach with substantial growth potential
The Wienerberger CEO expects significant growth impulses from Tondach over the medium- and long-term. Based on the current production capacity and the realization of expected synergies, Heimo Scheuch sees an EBITDA potential of roughly Euro 35 million in a normalized market environment. Heimo Scheuch explained: "I am very optimistic that we will be able to generate this organic growth together with the Tondach management team. Wienerberger has returned to a growth course after the crisis, and Tondach will make a positive contribution to this growth over the coming years."

Tondach Gleinstätten
Tondach Gleinstätten, which is headquartered in Gleinstätten (A), operates 15 production sites in 8 countries and is the market leader for high-quality, innovative clay roof tiles in Central-East Europe. In 2013 the company generated revenues of Euro 153.6 million (2012: Euro 166.7 million) and operating EBITDA of Euro 19.5 million (2012: Euro 22.7 million) with 1,830 employees. Tondach has positioned itself as a comprehensive supplier on the roofing market. The product portfolio includes high-quality clay roof tiles in various shapes, colors and sizes as well as an extensive range of ceramic and technical accessories and consulting services. This allows customers to realize creative solutions for modern residential construction, traditional pitched roofs, innovative renovation concepts and historical preservation. The company's most important markets are Austria, Czech Republic, Serbia, Hungary and Croatia, where it holds leading positions in clay roof tiles. Tondach has a modern, efficient plant network, innovative strength, durable and innovative products plus committed well-trained employees and an experienced management team. After the conclusion of extensive restructuring measures and the successful reorientation of the financing structure, Tondach is very well positioned to benefit from future recovery on the residential construction market in Central-East Europe.

Wienerberger AG
Wienerberger is the world's largest producer of bricks (Porotherm, Terca) as well as number one on the clay roof tile market (Koramic, Tondach) in Europe and on the concrete paver market (Semmelrock) in Central-East Europe. In pipe systems (Steinzeug-Keramo ceramic pipes and Pipelife plastic pipes), the company is one of the market leaders in Europe. With 213 plants, Wienerberger generated revenues of Euro 2,663 million and operating EBITDA of Euro 267 million in 2013.

For additional information contact:
Barbara Braunöck, Head of Corporate Communications Wienerberger
T +43 1 601 92 - 10221 | communication@wienerberger.com

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Wienerberger AG is a pure free float company, whereby the majority of shares are held by Austrian and international institutional investors. Additional information on the shareholder structure is provided under http://www.wienerberger.com/investor-relations/the-wienerberger-share/the-wienerberger-share/shareholder-structure.

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Emitter:	Wienerberger AG Wienerbergstraße 11 1100 Wien Austria
Contact Person:	Barbara Braunöck
Phone:	+43 1 60192 10221
E-Mail:	communication@wienerberger.com
Website:	www.wienerberger.com
ISIN(s):	AT0000831706 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Official Trade)