Austria's Wienerberger plans more takeovers as targets higher profit

VIENNA, Aug 16 (Reuters) - Austria's Wienerberger, the world's largest brickmaker, said on Thursday it planned further takeovers and would step up an efficiency drive to reach its core profit target of more than 600 million euros by 2020.

The group, which has to deal with sluggish brick sales in its key German and Austrian markets, increased both second-quarter core earnings and sales by 7 percent, largely due to continued strong demand in eastern Europe.

Earnings before interest, tax, depreciation and amortisation (EBITDA) reached 154.8 million euros ($176.3 million) on sales of 931.5 million euros.

Its British operations, which generate around 10 percent of annual group sales, benefited from strong construction activity and sold more bricks at higher prices, Wienerberger said.

"Britain is still a growth market for us," said Chief Executive Heimo Scheuch at a news conference in Vienna, adding that he saw a need for some catching up in residential construction in Britain, whose government has made it a priority to boost house-building.

Asked whether Wienerberger had a plan B in case of a hard Brexit, he said: "Yes, of course, we have to prepare for everything," without elaborating.

However, Scheuch said he was optimistic. "I think there will be no hard brexit, that's something that's been blown up by the media."

Wienerberger, which also sells pipes and paving stones, confirmed its full-year EBITDA target of between 450 and 470 million euros and its 2020 EBITDA target of more than 600 million.

"We are well on track to deliver what we promised," the chief executive said.

Wienerberger's mid-term goal is based on internal growth, efficiency gains and acquisitions.

"To a growing extent we are focusing on the takeover of companies in the regions we operate in. We want to strengthen our presence there," Scheuch said.

The group, which generates 90 percent of its sales in Europe, has a 2018 acquisition budget of 200 million euros. It bought a brick producer in the Netherlands, a pipe specialist in Norway and a paving stone plant in Romania in recent months.

Wienerberger also said it would intensify its efforts to streamline operations and that efficiency gains would contribute much more to the targeted mid-term profit growth than initially anticipated.

In addition to the 100 million euros it hopes to cash in from selling non-core divisions, it aims to make a further 50 million from the disposal of properties and machinery it no longer needs, the group said.

Wienerberger shares rose as much as 3.2 percent to 20.92 euros, making it the top gainer at the European construction index, which traded 0.1 percent lower at 0915 GMT. ($1 = 0.8779 euros) (Reporting by Kirsti Knolle; Editing by Subhranshu Sahu and Adrian Croft)

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