Wienerberger : Presentation - Acquisition of Meridian Brick | PDF 2 MB

Acquisition of Meridian Brick 18 December, 2020

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Wienerberger is taking a historic value-creating growth step

• creating a new leader for masonry solutions in key regions Drive further consolidation in North American brick
• market and enhance our product portfolio for our customers
• Generate strong EBITDA enhancement, including significant synergies
  Continue our strong focus on ESG, innovation
• and digitalizationMore than double our revenue in North America,

Delivering on our Group strategy to strengthen our market position in North America

Enabler

Innovation & Digitalization

			GROUP STRATEGY
					M&A
E
n					and
a	ESG
b	Increase our	Become full system	Strengthen our	Portfolio
l		solutions provider in	competitiveness in	Optimi-
e		VALUE CREATION	ENERGY & WATER	NORTH AMERICA	zation
r
		within the HOUSE	MANAGEMENT

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Operational Excellence

E n a b l e r

Enabler

Meridian Brick

Excellent strategic fit for Wienerberger

Largest manufacturer of clay facade solutions by capacity in North America

Highly complementary product portfolio and production footprint

Operating 20 brick plants in key regions, well invested asset base

Strong position in Texas, the US state with the greatest brick usage

Adds ~$ 400 mn of revenues to the North American Business unit

Becoming #1 masonry solutions provider in our key regions

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Wienerberger footprint

Today: strong footprint in growing regions

Ideal industrial set-up in core brick regions

Core region in

US Brick

Torontoshipments in mn SBE 1)

Strong market fundamentals

› Already present in core brick regions in US and

Canada

› Brick is a preferred siding material with usage

> 30%

› Strong recovery of Housing activities expected

Wienerberger plants

<1mn to >500mn

Housing starts

2009-2019 % change

Midwest+74%

Northeast+86%

West+175%

South+146%

Texas+130%

TOTAL+133%

to continue

› Region South accounts for > 50% of total US

housing starts

Excellent momentum for

further growth steps

1) SBE: Standard Brick Equivalent	6
Source: Brick Industry Association (BIA) Survey, BIA BIDS, Industry Insights assessment and estimations

Wienerberger & Meridian

Creating a new #1 in core regions

Wienerberger + Meridian = a new leader

Core region in	US Brick
Toronto
shipments
	in mn SBE 1)
	<1mn to > 500mn

Strengthening our competitive position

• Leading provider for masonry solutions in US core regions
• Expansion to Texas, the largest brick- consuming state in the US
• Leading supplier of masonry solutions in Ontario, Canada's #1 brick region

Wienerberger plants Meridian plants

Highly complementary

footprint leading to great

synergy potential

1) SBE: Standard Brick Equivalent	7
Source: Brick Industry Association (BIA) Survey, BIA BIDS, Industry Insights assessment and estimations

Wienerberger & Meridian

Significant synergy potential

Plant network optimization

Reduced overhead costs

Streamlined & optimized commercial

strategy (e.g. rebranding, route to market)

Lean back office structure

Improved ESG performance

(e.g. improved utilization rates and less GHG emissions)

Expected annual synergies

EBITDA impact, $ mn

		~20
	~15
~5
2021	2022	2023

Expected run-rate synergies of
$ 20mn by 2023	8

Wienerberger & Meridian combined:

Commercial segment as new growth platform for thin brick/panel solutions

Three key end markets:

1 RESIDENTIAL NEW BUILD		2 COMMERCIAL

				Panelization	Detail system
Facing bricks	Thin bricks	Webshop	Facing bricks	to aid design
(clip systems)	professionals

3 RENOVATION

Thin	DIY	My designs
bricks	channels	visualizer app

• Creating North America's top facing brick producer, offering a wide range of colors and textures for residential and commercial
• Strengthened exposure to commercial segment with big potential for easy to install Thin Clads and Panelization systems
• Leading supplier for Thin Brick Solutions in North America, further growing the renovation segment
• Strengthened solutions offering with complementary products (e.g. mortar, adhesives, steel, stone, stucco)  ~ 1/3 of total Meridian revenues are complements

› Digital tools targeting end customers (e.g. webshop, visualizer apps, DIY Videos, CADD library for design professionals)	9

Leveraging our know-how and competencies to become stronger and more competitive

Enhance competitiveness

• Solution-drivenand customer- centric approach
• Build on strong production and cost management know how to leverage significant synergies

Building on strong regional footprint

• Meridian's technological know how and strong industrial set-up in key markets
• Highly complementary, innovative product portfolio

New regional leader of masonry solutions with strong focus on ESG, innovation and digitalization

• Establish highly efficient production and logistical processes
• Expand our solutions-driven customer approach through substantial R&D and innovation/digitalization efforts
• Build on strong local brands and local value creation
• Transparent ESG targets with a positive impact on climate change

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Executive summary: Acquisition of Meridian Brick

Significant step-up of financial performance

Operating EBITDA potential of combined business in flat market environment by 2023

$ mn

			~120
		20
	50
~50
Wienerberger	Meridian targeted	Synergies	Combined
standalone 2020e	performance		business in 2023

Expected operating EBITDA phasing of combined business in flat market environment

$ mn

		~120
	~100
~85
2021	2022	2023

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Financial implications of the transaction for the Business Unit North America

REVENUE

EBITDA AND

SYNERGIES

SALE OF NON-

OPERATING ASSETS

RESTRUCTURING

PURCHASE PRICE

DEAL FINANCING

• Double North America revenues to roughly $ >800mn as immediate benefit
• Total run-rate synergy potential $ 20mn
• Fully synergized EBITDA after three years $ 120mn
• Additional proceeds from the sale of non-operatingassets in the amount of up to $ 60mn are envisaged
• One-offcash costs of $ 10mn expected in the first year
• $ 250mn purchase price
• No goodwill
• Financing via existing credit lines
• Robust Group liquidity position and financial leverage ~2.0 x at year end 2020

Attractive synergized EV/EBITDA-multiple of < 5x after three years	12

Acquisition of Meridian Brick - a perfect strategic fit to expand and strengthen our business in North America

Building on 200+ years of experience

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Creation of a new leader of masonry solutions with strong focus on ESG, innovation and digitalization

Leading in core US and Canadian brick regions with strong local brands and local value creation

Strong EBITDA enhancement through synergies leading to further value creation in the Business Unit

Deliver on group-wideESG goals of Decarbonization, Circular Economy and Biodiversity

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