Investor Relations

Financing at Wienerberger

A strong capital base, a balanced maturity profile and ample liquidity reserves. Learn more about how Wienerberger is financed.

IR Team
Investor Relations
Wienerberger AG
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We are pursuing clear targets with our financial policies: the establishment of an adequate liquidity position, a strong capital structure and unrestricted access to capital and credit markets. The finances of the Wienerberger Group are regulated centrally by the holding company using a balanced combination of financial instruments.

Wienerberger’s financial policies

The basis of Wienerberger’s finances is its strong internal financing power, resulting from the sustainable generation of free cash flow and a healthy equity base. Over the past years, we have improved our mid and long-term financial structures, reduced costs and broadened our scope to act financially.

“Wienerberger’s financial policies are focused on clear targets. We want to ensure sufficient liquidity, develop a strong capital structure and maintain unrestricted access to capital and credit markets.”

Willy Van Riet, CFO Wienerberger AG

Willy Van Riet

CFO

By determining the duration of our financial liabilities, we are establishing a balanced maturity profile, avoiding the need to refinance.

We are committed to adhering to strict, financial criteria and are thereby striving towards a debt repayment period (net debt/ EBITDA) of less than 2.5 years by the end of the year. 

Key financial indicator

We are very satisfied with the progress of our key financial indicators, which are important for contracts with banks and credit ratings. This is highlighted by the current debt repayment period (net debt/EBITDA):

Key financial indicator31/12/201731/12/2018Threshold
Net debt/EBITDA1.41.4<3.9

Wienerberger’s credit rating

Wienerberger AG is advised by the international credit rating agency Moody’s.

Moody’s Rating
Corporate FamilyBa1/stable
Corporate bondsBa1/stable
Corporate hybrid bondsBa3/stable

Short-term liabilities

Wienerberger’s short-term, interest-bearing financial liabilities include a commercial paper programme, as well as various credit lines. With the fixed-interest commercial paper programme that was concluded in 2005, we have a flexible and short-term means of covering the financial needs of the business up to 200 million Euros. The duration of these has been agreed with the investors and ranges from one week to a year.

In 2018, we concluded a revolving line of credit of 400 million Euros with ten banks. It is available for general corporate purposes and can be drawn on at least until November 2023 with the option to extend it for another two years.

Long-term liabilities

The corporate bonds make up the majority of the long-term, interest-bearing financial liabilities. All of Wienerberger’s bonds may be traded on the Vienna Stock Exchange. You can find information about current rates here: The Vienna Stock Exchange.

In December 2016, a loan agreement of over 150 million Euros, which lasted for eight years, was concluded. The help of five long-standing partner banks and refinancing by the Österreichischen Kontrollbank (Austrian Kontrollbank) enabled this to be achieved financially.

The hybrid bond is designed as deeply subordinated capital with fixed interest. The bond has a perpetual maturity and Wienerberger has the unilateral right to call the hybrid bond. It is classified as an equity instrument according to IFRS.

Q&A Hybrid bond

What is a hybrid bond?
The hybrid bond is designed as deeply subordinated capital with fixed interest. The bond has a perpetual maturity and Wienerberger has the unilateral right to call the hybrid bond. It is classified as an equity instrument according to IFRS.
  • Issuer: Perpetual deeply subordinated hybrid bond issued by Wienerberger AG
  • Principal amount: € 272,188,000.-
  • Coupon: 5.00% fixed coupon per annum, payable annually in arrears until 2021; thereafter the coupon is determined every five years based on the then prevailing 5-year Swap Rate and a margin of 5.95%
  • Denomination: € 1,000.-
 
 
Wienerberger holds an option to call the perpetual instrument. When can you exercise the call option, and do you intend to make us of this right?
The first date to call the hybrid instrument at 100% is February 9, 2021. After that, the hybrid bond can be called on each coupon date. At this moment, Wienerberger has not committed itself to calling or not calling the hybrid instrument on the first call date.
 
 
Could Wienerberger buy back the hybrid bond before the first call date (February 9, 2021)?
Wienerberger can buy back the hybrid bond through a tender offer to bond holders, through participating in trading on the stock exchanges, where the hybrid bond is traded, or in the case of certain predetermined events, which have not occurred to date.
 
 
How does the tax treatment compare to corporate bonds or other senior debt?
Under local GAAP and tax law, and in contrast with IFRS, the hybrid is considered a debt instrument and as a result, the coupon payments are fully tax deductible.
 
 
Can the hybrid bond be traded?
The primary listing of the hybrid bond is on the Vienna Stock Exchange and the instruments can be traded daily. The security identification number (ISIN) is DE000A1ZN206.
 
 
The coupon on the hybrid bond is currently higher than the interest on outstanding corporate bonds or other senior debt. Have you considered refinancing the bond?
The Managing Board of Wienerberger is highly committed to executing our value creating growth strategy. Strict financial discipline and a comprehensive catalogue of criteria are applied when evaluating projects with respect to shareholder value creation. In relation to liability management, these criteria include, but are by no means limited to, the following:
 
1. Financial benefit
We assess both the potential earnings impact and the net present value or internal rate of return of any such transaction.
 
In each case, our analysis takes into account:
  • The premium that would be required to the prevailing market “ask” price, considering the size of the tender sought and the liquidity of the instrument subject to tender;
  • Dealer manager costs;
  • New debt issuance fees and related legal expenses;
  • The likely interest costs associated with any new debt; and
  • Any tax implications that may arise
 
When we consider our capital structure, our primary focus is on whether a proposed refinancing generates a positive internal rate of return (IRR).
 
2. Corporate strength and flexibility
We are focused on ensuring that Wienerberger maintains a strong liquidity position, to accommodate our seasonal working capital requirements and provide strategic flexibility. We are also committed to maintaining a robust leverage and financial covenant position, in line with our previously stated leverage objectives. In addition, we have and seek to maintain a positive dialogue and rating trajectory with Moody’s in support of our credit rating.
 
Our assessment against this broad range of criteria has, in certain circumstances, allowed us to identify and execute upon value enhancing opportunities – for example, the partial buyback of our hybrid instrument in 2016. As a matter of course, we continuously and rigorously review opportunities that may be available to us in order to optimize our balance sheet.
BondsISINCouponVolumeTermRedemption
Wienerberger bond 2013AT0000A100E24.00%300 million Euros7 years17/04/2020
Wienerberger corporate hybrid bond 2014DE000A1ZN2065.00%272 million Eurosperpetual-
Wienerberger bond 2018AT0000A20F932.00%250 million Euros6 years02/05/2024

Further information

The Wienerberger Investment Case

Investment Case

Wienerberger pursues clear goals in its strategy.

Strategy

Wienerberger CEO Heimo Scheuch and CFO Willy Van Riet

Management

Wienerberger Information Center

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