The decline in sales in 2012 reported by Wienerberger (Vienna / Austria; www.wienerberger.com) for its core brick business was more than compensated by the first-time consolidation of pipe manufacturer Pipelife. The newly created segment "Pipes & Pavers Europe" posted sales last year of EUR 711m and EBITDA of EUR 67.4m.

Pipelife contributed sales of EUR 479m and EBITDA of EUR 45.5m. The remainder was accounted for by ceramic pipes and concrete pavers. In the five months before the takeover by Wienerberger, Pipelife generated sales of EUR 347m and EBITDA of EUR 28.5m. Together with the results of the Pipelife sectors, which Wienerberger has added to its North America business, the plastic pipe manufacturer reported, for 2012 as a whole, 6.8% growth in sales to EUR 859m and 13% growth in EBITDA to EUR 78m.

Apart from organic volume growth and price increases, Pipelife benefited from the contribution of the French plastic pipe plant of Alphacan, which was acquired in May 2011 – see Plasteurope.com of 08.04.2011. In addition, lower costs improved margins. The individual markets in Europe developed very differently.

In Norway, for example, mounting exports of LLD pipes (with diameters of up to 2.5 m and lengths of up to 600 m) had a positive effect on business development. For these pipes, Pipelife received a large order in August worth around EUR 20m for a power plant project in Ghana. In The Netherlands, on the other hand, the recession in the building industry and the economy measures introduced by the communities had a negative impact on demand, which, with stagnating sales, led to declining earnings. Towards the end of the year, however, a large order arrived from Shell for steel wire-reinforced pipes for a 27 km-long high-pressure water pipeline. Pipelife experienced slight volume decreases in Sweden and Finland.

Despite this, the results remained stable in Finland and even rose slightly in Sweden following restructuring measures. In Germany, the tough competition led to falling income, but in Belgium margins improved despite a small decline in volume sales.

In Austria, the largest Pipelife market in the sales region of eastern Europe, volume sales and the operating result remained virtually stable. Poland, on the other hand, proved to be a very difficult market because demand for pipes in the public sector has fallen considerably. In the Czech Republic, too, earnings fell. In contrast, Pipelife profited in Russia from the dynamics in the construction industry. In Hungary and Slovakia, Pipelife managed to raise its operating result slightly despite a difficult environment. In Turkey, bad weather conditions and a change in legislation on value-added tax affected the results. In crisis-ridden Greece, sales remained stable, but the operating result declined.

For 2013, Wienerberger expects overall positive development in the European pipe and plaster segment. Effects of the first-time consolidation of Pipelife in the first half of the year of around EUR 30m and moderate organic growth in the pipe business should lead to significant sales and earnings increases in this segment, said Wienerberger. For the coming years, the management expects positive effects above all in the fields of rainwater and water management through the need for renovation of the supply lines in western Europe and the need for eastern Europe to catch up. Demand for electricity and broadband should also lift demand for piping for cable and electrical installations. Furthermore, plastic pipes are continuing to win market share over competitive metal and concrete products. In the medium to long term, Wienerberger sees the EBITDA potential of its Pipes & Pavers Europe segment at around EUR 145m.

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Detailed business report 2012 from Wienerberger as a PDF document