Wienerberger 4Q 19 - FY 20 guidance in line but more muted market outlook

A cost-driven operating EBITDA beat and much better EPS stand out in 4Q. The FY 20 outlook caters our and market expectation and thus we do not envisage material consensus changes. Still, the more restrained market perception might trigger a rather muted share price reaction.

Results wrap-up: Earnings were stronger than expected, despite a slight sales shortfall. L-f-l EBITDA of EUR 587 mn and exceeded the upper end of the guided range of EUR 570-580 mn as well as RCBe of EUR 581 mn. The primary reason was higher cost savings as the Fast Forward Programme contributed EUR 50 mn vs. EUR 40 mn guided. Reported EBITDA of EUR 610 mn was also ahead of RCBe of EUR 589 mn due to much higher non-operating gains (totalled EUR 22.5 mn in FY 19 and EUR 12.7 mn for 4Q) from property sales (EUR 9 mn) and lower restructuring costs (were zero after EUR -4 mn in 1-3Q which implies reversal of provisions in 4Q). M&A added EUR 14 mn and FX effects were insignificant. Below the operating line we point to a weaker other financial result (nearly EUR -12 mn driven by FX losses and valuation effects) but also a much lower than expected tax burden due to the capitalisation of loss carry forwards (tax rate ~17% vs. RCBe 25%). The aforementioned effects led to a major EPS beat (EUR 2.18 vs. RCBe EUR 1.94 and consensus EUR 1.96). Cash generation was strong with operating CF coming of EUR 430 mn vs. RCBe of EUR 396 mn. Net debt fell to EUR 871 mn at YE 19 vs. EUR 888 mn in 3Q. The headline increase from EUR 632 mn at YE 18 is driven by the well flagged IFRS 16 impact of EUR 215 mn.