Wienerberger AG

VSE:WIE

Earnings Call Transcript 2023-Q1

[Operator]

Welcome, and thank you for joining the Wienerberger's conference call on the Q1 2023 results. [Operator Instructions]

I would now like to turn the conference over to Daniel Merl, Head of Investor Relations. Please go ahead.

[Daniel Merl, executive]

Thank you, operator. Ladies and gentlemen, I hope you're all well. A warm welcome to the earnings call on our Q1 2023 results. Our Board representatives today are our CEO, Heimo Scheuch; and our CFO, Gerhard Hanke. They will walk you through our presentation and will discuss our strong performance in a challenging market environment. After the presentation, as always, we are ready to take your questions.

I will now hand over to Heimo Scheuch for the presentation.

[Heimo Scheuch, executive]

Thank you, Daniel. Ladies and gentlemen, good morning also from my side, and welcome to our first quarter call for 2023. Let's just jump right into it. The first quarter of 2023 from a perspective of macro-economical situation is obviously characterized by also increasing and still increasing interest rates on both sides of the Atlantic, North America and Europe. So increasing rates and -- especially for the mortgages of strong importance. I will come to this in a minute. And then with respect to cost inflation, obviously, with still some strong inflation numbers coming in from the European side, less so in the U.S.

So from our perspective, if you may say, the first quarter is not always the most representative one, as you all are aware of in the building material and the building industry as such, but still it gives an indication where we're going to. And what we have seen so far is, obviously, due to this continuing high cost inflation environment, the mortgage rate highs we have seen in the end markets of Wienerberger, a downward trend since the quarter 2 of 2022 that has continued and has been very pronounced already last year as we reported several times in Eastern Europe and continues to be so.

This is certainly the region that is most hit by this high interest rates. And by the way, ladies and gentlemen, we are talking here interest rates in the high 1 single digit or, more or less also in some countries, in the low 2-digit interest rates. So a strong sort of interest rate environment for these countries, which affects not only the overall industry, but particularly also the new build sector.

Renovation also a little weaker in Western Europe. Still good demand, but weaker in Eastern Europe. In infrastructure, Eastern Europe and North America a little bit down. So from our perspective -- as you know us for pretty much for a long period of time, we are -- we act proactively and very quickly. So from our perspective, strict cost management in such softening market was the top priority. So we focused on these areas. We'll come to this, Gerhard and myself, what measures we've implemented. But obviously, we have already put a lot of actions into place in these affected regions very quickly in order to manage working capital, cost structure and keep us, obviously, in a good performance with respect to cost structure.

On the purchasing side, our sustainable purchasing policy that we've put in place years back is helping us in this inflationary cost environment. So here, we see, obviously, good trends coming through from our purchasing policy. And also on the operational excellence front, again, strong work from the operations in all aspects and incoming contribution from about EUR 11 million already in the first quarter of this year.

So all in all, a very satisfying and strong set of numbers. When we look at Wienerberger's overall revenue perspective, only down 9%. And when we took -- when we take the market environment, especially in new build, it's down double digit. So I think here, we have made, again, a clear sign that we outperformed our underlying market. The EBITDA above EUR 200 million, EUR 209 million. So again, also from an EBITDA perspective, margins perspective, strong result. And also the net result coming in above EUR 100 million in the first quarter.

If you look at the overall market performance in the first quarter, we have tried to put this on a chart so that you have an idea. The new build market overall in the group, 28% down, and this includes all markets, by the way. So you can assume that certain markets have been down sharper than this, and we talk here about Eastern Europe new build. And renovation about 11%, and infrastructure in the first quarter to 20%.

Keep in mind 2 things, and we obviously compare this and all of us tend to compare to other months and other periods. This first quarter has been also particularly wet in a lot of areas. So from a billing perspective, it was not that favorable from a weather one as well. But this doesn't come as an excuse. I think the underlying trends are such that we are living in a phase with softening markets.

Proactive cost management, as I said earlier, was top of the agenda. We obviously were able to cut, obviously, from a perspective of output already, our production output in Eastern Europe by reducing shift patterns, by obviously also consuming over our performance from last year. So extended standstills, maintenance in the first quarter that we have planned. Remember, we told you that, depending on the market demand, we will bring up the plants to stream as we see the demand level coming in. So here, again, I think we have made all the necessary efforts in the first quarter come to being aligned to this situation.

From a procurement strategy, when you look at the cost inflation for Wienerberger in the first quarter, it's about 9% plus, coming especially from the European side of the business. It's a little weaker in the U.S., the inflation. But here, obviously, salaries, wages play an important role still, and some other aspects, less on the plastic granulate side and less also compared to last year, especially on the energy side. But as I said, the overall inflation is probably the environment is higher than the Wienerberger one, again, because we have our sustainable purchasing policy in place.

When we look at the self-help program, again, through innovations, through manufacturing excellence, we have been able to have an additional contribution of EUR 11 million already in the first quarter of this year. So strong performance in this aspect of the business. We will, therefore, deliver the full set of contributions coming in. You remember our 3-year program was about EUR 135 million over the last 3 years, including this one. So we are confident to perform accordingly.

And with this, I hand over to Gerhard, who will go in detail through the financials of this year.

[Gerhard Hanke, executive]

Thank you, Heimo. Good morning. Before we move to the financials of the first quarter, let me explain you the new operational structure. As you have most probably already seen, we have changed with the beginning of this year the operational and the organizational structure. We decided already during 2022 to change the operational and the organizational structure from a product-centric to a regional structure.

And you still have in mind that last year, we reported basically 3 business units, meaning the Wienerberger Building Solutions, the Wienerberger Piping Solutions and North America. And basically already the years before, North America was already a kind of regional structure where we combined all our solutions, meaning for the entire building envelope, and also for the water and for the energy management under basically on steering and under one organizational structure.

And with 1st of January this year, we also changed the organizational structure, the reporting structure and the operational structure into basically 3 regions. The new regions are Europe East, which is around about 30% of our revenues; Europe West, which is the largest region, it's around about 50% of our revenue; and North America, which is around about 20% of our revenues.

Below this region or within these regions, basically, we combine all our, basically, products, system solutions, which are serving for the building envelope, but also for the water and energy management within this region. We believe basically with this new structure that we will promote our synergies, but also basically our transformation to a system and solution provider.

Let us move further to the numbers. As Heimo just mentioned, strong set of financials in the first quarter. When we look more in detail into the regions, we see that the Eastern European markets started weaker with a weaker demand than what we have seen basically in Western Europe, but also in North America. You also see here that basically, EBITDA-wise, that we missed, in Eastern Europe, 30% in EBITDA. Western Europe and North America are above prior year. And I will explain later on what is driving basically revenues and profitability in the first quarter in these regions.

Let me start with the Europe East, the Eastern European region. And we heard it in the beginning, it was the market, basically, where we have seen, in the new build sector, the strongest decline in the end market. But also what we have seen, that renovation, compared to Western Europe, was weaker in Eastern than in the Western Europe region. Infrastructure markets was also below expectations, mainly driven by higher financing costs.

We see that also municipalities are more reluctant and more in a waiting position in starting up new projects. And therefore, we see -- and this is also partly driven, as Heimo mentioned, due to the high interest policies. The central banks of the non-euro countries, especially Poland, Hungary, Czech Republic are quite [ consequent ] or was quite [ consequent ] in increasing interest rates last year. And this is also where we see a kind of a wait-and-see position in some of these fields in the first quarter.

This was definitely one of the reasons why EBITDA is, here, basically affected the most, with minus 30%. And the second effect here is also that most of the standstills, what we had, so we had some standstills in the first quarter and more focused basically in the Eastern European countries, in the clay block markets on the one hand, depending also on market development; on the other side, as we mentioned last year, we had no maintenance standstills during 2022. So it was a combination of doing some maintenance work, but also monitoring how markets are developing. And therefore, we have also seen some standstill costs in the first quarter in the Eastern European markets.

Still, we kept profitability close to a 20% EBITDA margin. So we worked hard on our cost management. We worked hard to make the standstills as cost efficient as possible. We cut costs where feasible and tried to keep the operational leverage in Eastern Europe as high as possible. So meaning a 20% EBITDA margin in the first quarter and the EUR 60 million of EBITDA for the first quarter of Eastern Europe.

When we move further to Western Europe, Western Europe had a strong start into the year. We see that revenues are behind with minus 7%. EBITDA is even above, slightly above prior year. Profitability is high. We see demand wise that the markets -- France, Belgium and the Netherlands, had a very strong and stable development in the first 3 months. Where we have seen a more weaker demand is Germany and the U.K. In the new build activities, renovation is also remaining on a stable level across the region, and the infrastructure activities is also supported by the in-house activity.

What we see is that in-house activity, which has also a big share of renovation activity in it, is much more stable and is supporting also the infrastructure business in the first -- basically the piping business in Western Europe in the first 3 months. So profitability on a very high level. And also here, we -- the profitability is supported, on the one side, that we have a strong pricing and a very attractive cost structure. Also here, in the first 3 months, supported by the initiatives which we initiated already last year on the cost management side and also by the self-help measures, which finally brought us to an EBITDA margin of around about 18.5% in the first quarter.

Moving to North America. North America, basically, we see in the U.S. when it's about the new build activity, that the demand is basically on a low level, but still on a stabilizing level. We see that, yes, demand is weaker. But also in new build, we have seen already last year in the second half that the demand developed or were slowing down basically in new build. And we see this is more stabilizing. The same basically also for Canada, that we see also some stabilizing demand there.

When it's about infrastructure, we see that especially in the first 3 months, infrastructure were slightly behind expectations. But still, when it's about profitability, and you see that profitability is with more than 4% above prior year, which is strongly driven basically by 2 effects. One is the synergies of Meridian, which is also exceeding our expectations. So it is above expectations, the synergies, which we see. And the second impact is the profitability of the piping business. which remains, so far, still on a high level.

This brings us to our group revenue bridge. We have, for the first quarter comparing, and I think we have seen it in the beginning on the slide, where we show how end markets were developing and how we started up. We see that we are having a 9% organic decline, basically, after the first 3 months, which is driven with roundabout 20% on volume, which we are missing; and with around about 15% plus on pricing. And also on the pricing, you know that there is also, on a year-on-year comparison, a carryover from the quarter 2 up to quarter 4 in 2022.

We have some impact from the currencies, mainly from the British pound, from the Turkish lira, but also the Nordic currencies are slightly weaker than last year. And we have some impact out of the M&A activities, mainly from the activities in Croatia last year, Vargon; but also the Danish activities, the Norwegian activities. And also in Germany, what we bought, it was Mayr Dachkeramik and Bergmann, rather small M&As. And they are adding up here, basically, to a contribution of EUR 10 million in revenues.

EBITDA-wise, we were able with all our initiatives and measures which we took to limit basically EBITDA development only to a minus 7%, which is strong compared to market development. So we are moving from EUR 225 million EBITDA to EUR 209 million. In this organic decline of 7%, we have self-help initiatives in it and also cost management in it. Together, these 2 positions are roundabout EUR 20 million, which are supporting the operational leverage or basically the development of the first quarter of this year.

So all in all, a very satisfying performance despite this declining and challenging market environment where we are in, and which resulted in a very positive and strong EBITDA of the first quarter.

And with that, Heimo, I would like to hand over back to you for the rest of the year -- or the outlook for the rest of the year.

[Heimo Scheuch, executive]

Thank you, Gerhard. Ladies and gentlemen, obviously, as you have heard from our explanations, we stick to our scenario that we have developed at the beginning of the year, where we have given you an outlook as far as we see the market developments in our underlying markets -- new build, renovation and infrastructure, in Europe and North America.

It goes without saying, and I think this has been the sort of summary of this call, that the quarter 1 performance of this year of our end markets is weaker than expected, and weaker is the indication that we have given you at the beginning of this year. So obviously, when we talk about this scenario, the underlying markets need to pick up in the following months in order to get to such sort of rates that we have originally anticipated. If they do so, we don't know yet, it's too early to tell. And obviously, the next months, especially May, June, will tell if we are moving in this direction or not.

But on the general note, we obviously stick to our scenario that we have given to you, which leads obviously, due to the fact that we manage inflation well, as Gerhard had put it in his notes on the cost side, especially when we talk on the purchasing side, and obviously, we calculate with the 9% for the overall growth coming stronger from Europe than from North America, as we said.

When we look at the energy situation, obviously, it has eased considerably. But we are locked in for this year above 90% already. And for next year, above 80%. So here we are in safe territory, and have managed this, I think, this energy situation rather well compared to our competitors. On the other hand, if we look at the market as such, and this is what we have been giving you as the scenario, you have seen how quickly and how strongly we were able to manage the decline last year with respect to the building or underlying markets, especially in the new build segment, and how we are doing this year.

We have anticipated that the market goes down compared to last year, again, significantly, and we will see how this turns out to be in the later part of this year. But as I said, we have taken already all necessary measures to manage this scenario.

Again, I think it shows also that the group, as such, is more resilient to manage these situations, especially due to the fact that we have taken a stronger position in renovation and do so the ongoing acquisition of Terreal, and we are moving nicely and quickly ahead with this. And I really assume that the closing will be either at the end of half year in the third quarter, but that depends on the antitrust authorities, as I said. So I think here, we are in good terrain and moving steadily. And this shows again that the underlying business will be stronger because roofing is, to a big extent, 60% to 70% of turnover goes into renovation. So this is a strong move again for Wienerberger into a more resilient business model.

The market outperformance, I think we have shown you that, that we were able, in this challenging market environment at the beginning of this year, to again outperform our end markets, and we will continue to do so for the rest of the year. You have seen also from the explanations you got from Gerhard and myself that the gross margin has been strong and has been holding up nicely. Pricing is strong throughout our markets. And obviously, this is also due to the fact that we improve our product range to more solution-based activity away from only product.

And M&A, as I said, it is very important that we move ahead in this, and we have done successfully last year and this year, obviously, with Terreal. No results from Terreal are included yet in our scenario. So just to remind you, the revenues of this group takeover is about EUR 740 million and about EUR 100 million on an ongoing basis. You are well aware that we have predicted about EUR 50 million synergies out of this deal will come in, in the 3 years after the integration.

So this is it from my side. I think we have addressed so far the first quarter and are taking your questions with great pleasure.

[Operator]

[Operator Instructions] The first question is coming from Tobias Woerner from Stifel Europe.

[Tobias Woerner, analyst]

Yes. Congrats on this really good performance in Q1. Two, 3 questions from my side very quickly. And the first one is with regard to the current market development, end market developments which you show in the chart. Unfortunately, I'm traveling at the moment, so I can't say what slide it is on. Your minus 9% against. Just confirm to us that we're comparing like-for-like here, i.e., are we looking at sales or are we looking at volumes versus sales? That's the first question.

Secondly, we've seen Aliaxis move in not such a friendly manner on to Uponor. Would you consider to -- or would you consider Uponor as well in that scenario? And you obviously have lots of synergies with your own business and/or potentially could invite the Uponor shareholders to become your shareholders. And then lastly, secondly, if you don't, your pipe business, in my opinion at least, seems to be somewhat under pressure in that sort of repositioning of the markets at the moment.

[Heimo Scheuch, executive]

Thank you for your 2 questions, Tobias. The first one is to be answered very quickly, it's volume versus sales, yes? That's the answer to your question. The second one is, yes, we have, obviously -- as all of you monitor the situation with respect to Aliaxis Uponor, you know this was a situation, a hostile one, which has now gone a little bit away because, apparently, everybody is not happy with this situation. There's one thing from a cultural perspective. Wienerberger is not a company that goes hostile.

You have seen us in a lot of acquisitions, and we have done 40 acquisitions in -- or more than 40 acquisitions in the last decade, and none of them was hostile. It was always in very good spirit with the sellers, with the people and the employees. And that's why, and you see it especially on the Meridian front, how quickly, how fast and how beneficial this is for you all, how the ending went. Hostile situations are not very helpful for anybody. That's one remark that I have. And I think from our side, obviously, we are open to develop our business. We've always said we want to be a leading player in the infrastructure business for water management and for energy management, and that's what we are continuing to be.

We are actually, from a size perspective, if you put the business of Wienerberger together, the piping business, bigger than Uponor. So this is to say -- and our profitability is quite a couple of percentage points better as well. So Tobias, to answer your question, we don't feel under pressure. I think under pressure are others, not us. And we are continuing to grow our business in all the different geographies that we are in and have clear targets already defined.

Uponor has certainly, in certain areas, very interesting businesses like in North America or the building side, which is what Gerhard explained, on the in-house where we are less active in certain areas of Europe. The infrastructure business is not such an appealing business to us, if I may say. So now you have the whole set strategically. But there's no -- Wienerberger is a company that is open to a lot of things if they make sense for the shareholders and for the development of the company. So I think from our perspective, we are monitoring all sorts of situations. But we, certainly with respect to our piping business, feel more confirmed with our strategy than under pressure.

[Tobias Woerner, analyst]

Okay. But I mean the potential of -- if it was friendly for them to be invited into your shareholder base, is an option in a way?

[Heimo Scheuch, executive]

You are not negotiating for Uponor, nor am I for Wienerberger. So options are -- there are hundreds of options. But I would say, from our perspective, we will certainly look closely to all the options that are available.

[Operator]

The next question is coming from Gregor Kuglitsch from UBS.

[Gregor Kuglitsch, analyst]

I have a few questions. So maybe, firstly, just sort of some numbers. If you could just maybe quickly run through the sort of volume/price evolution in the new 3 segments, that would be helpful. Secondly, I don't know if I may have missed it. I thought I caught something. But did you actually quantify how much fixed cost you took out during the quarter. So over and above the EUR 11 million fast forward program, is there sort of any fixed cost reduction that actually occurred in the quarter?

Third question is on the pricing. So you had 15%. Can you give us a sense how much of that was sort of carryover from last year? And how much was new price increases and, therefore, kind of what we can be thinking about for the year assuming pricing holds from here? And then maybe third -- sorry, fourth question, which is sort of on the resegmentation and the new organizational setup. So what's changed? Is it now that you have a -- basically a CEO for Europe East, Europe West and he has to sort of manage all the different product categories? Could you just give us a little bit more sense of what you've actually done on the management side, the organizational side and the benefits that you expect from that.

[Heimo Scheuch, executive]

Gregor, as always, thank you very much for your very precise and to-the-point questions. Let me start with your last one on the organization front. Yes, you're absolutely spot on. For us, it's very important that in the regions East, West Europe and North America, where we have it already, there's one CEO in charge of these businesses. They run the business in a way that all different products are included. Therefore, we get the most synergies out of these operations.

You remember also we have explained to you from a back office side, we have completely or we are completely integrating the businesses as well. So this makes a lot of sense for us to manage route to market, sales operations and also the overall human resource aspect from one person or when you break it down for the different regions under him and then the management. So you have obviously an integrated management by country, per region, where we regroup, for example, a region like the Benelux together with France, makes a lot of sense with the new acquisition of Terreal, with renovation, with infrastructure and with wall.

There are obviously the whole back office with the digitalization, the data management is done centrally for such a region in the different countries. And then obviously, from an overall strategic perspective, managing the clients, the customers, the route to market, as I said, is an important target for us. Therefore, this makes our performance more efficient in these regions. And therefore, we think also from a solution perspective to put these together, like the whole wall management, the facade and the roof management is then done over a region by the appropriate management.

We keep overall, on the group side, certain aspects like categories, we call them, that means roof and piping, for example, where we obviously manage technology, business innovation on the group's perspective in order to ensure here maximum of synergies over the different regions. So I hope I have addressed your #4 question. Gerhard, do you want to jump in on 1 of the 3 others?

[Gerhard Hanke, executive]

Right. Maybe speaking about the carryover, what you mentioned Gregor, it is -- as we said, it's a 15% plus of pricing, and carryover is roundabout 11% from last year between quarter 2 and quarter 4 2022. You mentioned, as far as I remember, the topic cost management. We benefited from self-help with EUR 11 million, and with taking out fixed costs in the first quarter, it was EUR 9 million. So these are the EUR 20 million what I mentioned, which was supporting first quarter results. And I guess was the first one, it was about volume and price, and maybe to make that sure, as we said, it is a minus 20% volume and plus 15% of pricing, which is basically influenced by the carryover, also strongly.

What we see is this price-volume split is represented basically also for Western Europe, so that fits quite well. We see that North America is, volume-wise, better than what we have seen across the group. On the other side, Eastern Europe, slightly weaker. And on the other side, pricing is in Eastern Europe, let's say, slightly above the 15% of the group, and North America slightly below that. So this is, I think, how it should help you kind of an orientation how we have splitted volume and price across the first quarter.

[Operator]

The next question is coming from Patrick Steiner from Kepler Cheuvreux.

[Patrick Steiner, analyst]

It's Patrick Steiner. Congratulations on this quite good results despite such a difficult market environment. And 3 quick questions from my side. First one would be, why was the new build activity so weak in Germany and U.K., but much stronger in France, Belgium and Netherlands? Is there any specific reason for this?

Second question would be, why are the operating margins much higher in Europe East than Europe West? Is this due to a higher piping share in the West? Or are there other factors as well? And the last question would be, during the presentation, you talked about an attractive cost structure in Western Europe. Can you give us some more color on that and especially compared to East Europe?

[Heimo Scheuch, executive]

Thank you very much, Patrick. The situation, I mean, when you look at Germany, we were surprised as well. But I don't want to blame anybody so that you don't get me wrong. But politically, Germany is in a turmoil. I think you have followed also the different approaches to the government takes. And on one side, the responsible minister, the federal one, says she wants that 400,000 houses are built, and the others say they don't know how they want to build it and what sort of structure they define for it. So -- and you have heard also some declarations by homebuilders in Germany that they stopped completely due to this mess, legally speaking and regulations wise.

So there's a lot of turmoil right now. This needs reorientation. This needs stability. You know that it is very bad for a country if there's instability, legally speaking and with the whole legal framework, with respect to new build. Obviously, also the interest rates have played a role. And you understand also culturally, our German friends are always very reluctant to build if they have not a clear vision what the future brings. So this is something which is very particular to Germany. And unfortunately, hits Germany hard. And this is unfortunate for all of us, but especially for Germany.

U.K., a little different story because, obviously, here again, politically, there has been some turmoil. And obviously, when interest rates play in, then we had some sort of weakening and softening of the market in quarter 4 of last year already and now into quarter 1. However, we see a little bit of positive trend coming out of the U.K. And I can say so far because we monitor very closely our competitors' numbers, we are pretty much ahead of those compared to the other players in the industry with respect to our sales volume. Then we have -- sorry, then we have one more, it's the margins.

[Gerhard Hanke, executive]

And maybe if I may start with the last one, I think you asked for the cost structure between Western Europe and Eastern Europe, also how this is impacting your profitability. I think what you have to keep in mind, yes, we had -- in both regions, we have standstills. We had in the Eastern part, as I tried to explain a little bit, more extended standstill than in Western Europe. As we mentioned last year, there was no maintenance work done, no major maintenance work during 2022. So we also shifted some of them into the first quarter.

So we did them also in the first quarter of 2022 in Eastern Europe, and therefore, also the margin suffered a little bit more than what you have seen in Western Europe. You see also the impact of the standstill cost of the -- more extended standstill costs, and therefore, the profitability in Q1 is, in Eastern Europe, lower than in Western Europe. And this is why we see basically the drop of the profitability in Eastern Europe stronger than in Western Europe. The other questions, Patrick, was about operating margin, I guess, just help me once more about your second question.

[Patrick Steiner, analyst]

Yes. Thanks for answering the first 2 questions. The third one was basically why are the operating margins much higher in Eastern Europe than in Western Europe. And if this is due to higher piping share or if there are other factors?

[Gerhard Hanke, executive]

It is basically, historically, still cost structures in Eastern Europe are still more attractive when it's about fixed cost structures. So this is still the major driver. Our margins are originally higher than in Western Europe. What we mentioned before is that we had, basically in the first quarter, this topic of most standstill, and therefore, this somehow shifted. But basically, the profitability and the fixed cost -- or the share of the fixed cost is, in Eastern Europe, still more attractive than in Western Europe.

[Operator]

The next question is coming from Manfredi Bizzarri from Morgan Stanley.

[Manfredi Bizzarri, analyst]

Just 2 questions from me. In terms of margins for the U.S. business, we basically saw a big improvement over the 2 years. Obviously, there is Meridian inside the equation there. I was just wondering how should we think about medium to long-term margin for the U.S. business? Is 24% sort of a sustainable new number we should be thinking about? And my second question is on price/cost, particularly in Europe. You clearly had a strong benefit on realized cost versus spot prices? How do we think about the gap narrowing going forward?

[Heimo Scheuch, executive]

Thank you for your 2 questions. I will be very outspoken for the first one. I think when you are spot on when you say 24%, is it sustainable? We have explained last year that, especially on the piping front, we are on a very high level of profitability and margin wise, so this will gradually come down. From my perspective, if I were to say a long-term sustainable margin in North America is around 20%. Okay?

[Manfredi Bizzarri, analyst]

Yes. And on the price -- yes.

[Heimo Scheuch, executive]

And then on the price-cost side?

[Gerhard Hanke, executive]

The price/cost, I think you mentioned the benefits out of the forward buying of the energy contracts. Yes, we still are benefiting out of that. We will also benefit not only this year, based not on the forwards, what we see also for 2024 and 2025, we still feel comfortable with our fixings, what we have done. So it is difficult to say or to [ forespeak ] how long we will basically benefit out of that. But we will, from today's perspective, and depending also if energy prices are -- will be moving to in the next 2 to 3 years, we still feel comfortable that we have a kind of a benefit out of that.

[Heimo Scheuch, executive]

And by the way, I mean, we are significantly below spot, obviously, today, with our fixed ones, so that you are aware of that.

[Operator]

The next question is coming from Augustin Cendre from Stifel.

[Augustin Cendre, analyst]

Augustin Cendre from Stifel. I just have one, if I may, which is on the competitive environment. Last year, you mentioned that some competitors had to close some plants due to energy prices in Europe. And I believe they started reopening them at the end of last year. Could you please elaborate on the competitive environment at the moment and also on the evolution of your market share? And that would be especially in context of your piping business in Eastern Europe where you cut capacity this quarter, apparently.

[Heimo Scheuch, executive]

Yes, obviously, you are right that some -- when we talk now about Europe only, some of the competitors have come back over the last 4, 5 months. gradually. Gradually, I must say, not all of them, by the way, and not in full force. Because I think the difference between this scenario that we are living through and the past ones is that everybody understands that the market is going down. So we have a lower demand level and it's no use to fully produce and just try to sit on your products and wait what's happening.

So everybody is concerned about this. Everybody is also concerned about the fact that energy prices might go in the -- again, in the other direction. And by the way, the spot prices are not that cheap either. Keep in mind that on the inflation side, wages and others have been up as well. So the cost price or the cost structure for the small- and medium-sized competitors is huge. And logistics is also not that easy.

And from this perspective, I think all of them have behaved rather well, if I may say so, and we have not seen big sort of price erosions or whatsoever. I mean, on certain projects, you have probably then a little bit of competition. But on the other hand, I think, overall speaking, everybody is doing his job in the sense of managing the cost structure as well as the production output.

On the other hand, also in the U.S., we have seen that people from a perspective of new market structure, have hold back on volumes because, obviously, volumes are not there. And if you -- especially in the facing brick business, roofing business, et cetera, out of the market, it's very difficult to make your way into the market again, because projects are there and you can't sort of sell into ongoing project, for example. So this is, I think, different from the scenarios before. So it's a long answer to your to your question. But from my perspective, this will stay rather stable throughout the year.

[Augustin Cendre, analyst]

Okay. And if I may just follow up on that. If you could remind me, you gained market share last year thanks to competitors closing plants, is that right? And with...

[Heimo Scheuch, executive]

Yes. we had -- I mean, when we explained to you the exceptionally good results last year, the EBITDA of above EUR 1 billion. We told you that, first of all, we had certain market share gains due to the fact that we produced right through the year and had available product. So this was one aspect. And we have not so far seen major erosions of this as we speak. So in some areas, obviously, you give way to some low-commodity producers or low-end producers that come into the market, but it's not of a significant size at this stage after the first quarter.

[Augustin Cendre, analyst]

All right. Congratulations on the results.

[Heimo Scheuch, executive]

Thank you very much indeed.

[Operator]

[Operator Instructions] There are no further questions at this time. So I hand back to Daniel Merl.

[Daniel Merl, executive]

Thank you, operator. Ladies and gentlemen, thank you all very much for taking the time and dialing in today. Our next conference call, as a little reminder, will be held on the 10th of August when we release our results for the first half of 2023. For today, I wish you a nice remaining afternoon. Stay safe, and goodbye.

[Operator]

Ladies and gentlemen, the conference has now concluded, and you may disconnect. Thank you for joining, and have a pleasant day.