CAPITAL MARKETS DAY 2014 Heusenstamm, Germany 26 November 2014
Germany Latest Developments & Trends Georg Harrasser, Regional President, Central, Northern and Eastern Europe
Die Nummer 1 am Dach in Deutschland! Page 2
Agenda Germany a big and stable market Megatrends in German residential building Braas Germany s excellent position in this important market Future key priorities Page 3
GERMANY A BIG AND STABLE MARKET Page 4
Construction investments stable on high level Increase of 12.4% over last 5 years Development of construction investments EUR billion, in prices of the previous year +12.4% 280 260 240 270 253 247 238 229 240 239 238 230 237 257 259 259 220 200 180 160 140 120 100 80 60 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Statistical Office Page 5
Residential construction is the biggest part With growing importance Split-Up of construction investment 12% 26% 44% 1970 2013 30% 58% 30% Residential Commercial Public Source: Statistical Office Page 6
Germany has one of the biggest pitched roof markets in Europe Size of the German pitched roof market in European comparison in million m 2 100 90 80 70 60 50 40 30 20 10 0 2010 2011 2012 2013 Germany France UK Italy Source: Based on management estimates Page 7
with rather stable structures... No significant changes in used roofing materials Stable new build market, but RMI lacking behind in % 100 90 80 29% 28% 28% 26% Market volume in million m 2 120 100 70 60 50 22% 22% 22% 23% 80 60 44 34 31 29 30 35 35 34 35 35 40 30 20 10 50% 50% 50% 51% 40 20 62 52 49 48 48 50 46 42 41 41 0 2010 2011 2012 2013 0 2006 2007 2008 2009 2010 2011 2012 2013 2014P 2015P Other materials Clay tiles New build Concrete tiles RMI Source: Based on management estimates Small- and large-sized roof solutions for roof inclinations starting from 7 Source: Grüne-Henze, October 2014 Page 8
and no signs of a bubble Range of orders in residential building Completed flats in new built residential houses per 1,000 inhabitants in Europe Months 3,0 2,5 2,0 1,5 1,0 0,5 0,0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Norway 6.5 Switzerland 6.3 France 5.0 Finland 4.9 Austria 4.9 Poland 3.9 Belgium 3.8 Sweden 3.0 Total 3.0 Slovakia 2.9 Germany 2.8 Netherlands 2.8 Czech Republic 2.3 England 2.1 Denmark 2.1 Italy 1.9 Ireland 1.4 Portugal 1.4 Hungary 1.0 Spain 1.0 0 1 2 3 4 5 6 7 Source: lfo Institute Source: Eurostat, ibr 1/2014 Page 9
MEGATRENDS IN GERMAN RESIDENTIAL BUILDING Page 10
Megatrends of the 21st century Energy Efficiency Architectural style and requirements Urbanisation Digitalisation Health Demographic change Page 11
URBANISATION Page 12
For the first time, completions of flats in multi-family house will be higher than in 1&2 family houses in 2014 400 350 Completions of flats in 1&2 family houses vs. flats in multi-family houses in residential buildings MFH SFH Opportunities Multi-family with a pitched roof tend to have concrete tiles rather than clay tiles 300 250 200 150 100 50 0 139 101 81 230 185 173 2000 2001 2002 71 71 62 165 177 151 2003 2004 2005 71 61 56 150 124 96 2006 2007 2008 64 53 55 84 85 97 2009 2010 2011 120 76 86 100 102 103 2012 20132014e Challenges Trend to MFH leads to lower demand as m 2 of roof/ m 2 of living space is significantly lower In the hinterland of big cities more and more flat roofs used More demanding standard increase house construction costs often beyond affordability for the middle class Source: Statistical office 2014: Prognosis ZDB Page 13
Urbanisation is a clearly visible trend Population change in Germany 2006 2011 Index 2006=100 102.0 101.5 101.0 100.5 100.0 99.5 99.0 98.5 98.0 97.5 97.0 2006 2007 2008 2009 2010 2011 Big cities Rural areas Small cities Germany on average Source: BBSR-housing market observations, Statistics of the population of the federal government and federal states Page 14
...and offers opportunities in many regional markets. It is key to be there! Completed flats in new build residential buildings per 1,000 inhabitants in the "Big Seven" Munich 3.3 Frankfurt/Main 3.2 Cologne 2.7 Stuttgart 2.2 Hamburg Düsseldorf 1.3 Berlin 1.0 1.8 Opportunities Still relatively low numbers compared to many European countries (upside) Pockets of opportunities beyond the big seven (with pitched roofs) Challenges Lead generation requires targeting new customer groups: mainly architects 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Source: Statistical office 2014: Prognosis ZDB Page 15
ENERGY EFFICIENCY Page 16
Energy Efficiency becomes more and more important 70% of today's energy consumption of households goes into heating Further energy efficiency laws to be implemented step by step. By 31/12/2020 all new buildings are nearly zeroenergy buildings Renovation ratio is currently <1% in Germany, while 2% is considered required We have the right solutions for the new requirements Opportunities Additional value/ns potential can be captured through insulation offer and our roofing know-how Requirements will lead to increased demand in renovation Challenges We do not have own production in insulation: trading with low margin and low differentiation Our product offer is limited to the roof and can be attacked by insulation generalists, who cover all applications Page 17
BRAAS GERMANY S EXCELLENT POSITION IN THIS IMPORTANT MARKET Page 18
Braas Germany the No. 1 in pitched roofs Nation-wide presence, close to the customer Idstedt Rahmstorf Heisterholz Dülmen Monheim Heusenstamm Hainstadt Östringen Oberursel Karstädt Berlin Rehfeld Heyrothsberge Nuremberg/ Herzogenaurach Mainburg Obergräfenhain Central administration Sales region office Braas customer service Plant/warehouse for concrete tiles Seven concrete tile plants Four clay tile plants Six concrete tile warehouses Ten Sales regions One central Braas customer center 929 employees Altheim Plant/warehouse for clay tiles Warehouses Page 19
Clear profile as leading system provider Roofing know-how with system The leading provider of complete system-solutions for pitched roofs in Germany High product quality and comprehensive services Dense distribution network with qualified specialist advisors Sophisticated user-friendly systems For the highest demands for comfort and safety of a roof Optimal fit of colours, functions and materials Material warranty period of thirty years on all roof tiles, additional guarantee on frost resistance Page 20
Most comprehensive service offer of the building supplier industry with over fifty different services Building contractors, owners & developers 14'000 roofers & 6'000 carpenters 4'000 Building merchants 50'000 architects & planners Marketing support Support and advise Technical and product information Logistic services Page 21
Leading market position No. 1 in the German Pitched Roof Market We are the only comprehensive manufacturer and supplier of roof tiles and components Concrete Tiles Clay Tiles Page 22
LOW PITCH Page 23
Braas 7GRAD Dach The Low Pitch Solution Architecture Solution for the trend of modern architecture with flattish roofs System/Products Only system allowing the use of new and innovative tiles on a pitch below 10 Complete system with concrete tiles and components Advantages Lower risk of water infiltrations compared to a flat roof better sound poof compared to other materials (especially metal) Lower initial and life cycle cost compared to flat and metal roofs Challenge Low adaptation rate as this innovative solution is not (yet) in the code of practice of the German Roofer Association Page 24
Full Roof System Know-how is key Ridge & Hip Fixings Underlays Roof outlets Abutments Safety Insulation Windows Solar Fixings Valleys Snow Gutters Eaves Equipment Page 25
ENERGY EFFICIENCY Page 26
Right insulation means higher savings Heating loss without insulation Roof 12,120 kwh/a 75% Saving Heating loss with insulation Roof 3,000 kwh/a Windows 4,700 kwh/a Windows 2,520 kwh/a Walls 10,100 kwh/a Walls 2,900 kwh/a Soil/Basement 1,764 kwh/a Soil/Basement 714 kwh/a Source: Dena Page 27
Full Roof System Know-how is key Ridge & Hip Fixings Underlays Roof outlets Abutments Safety Insulation Windows Solar Fixings Valleys Snow Gutters Eaves Equipment Page 28
'Protegon' the active concrete tiles of the future Special infrared reflective pigments reduce heating up of the roof surface 'Protegon' concrete tiles reflect up to 300% more infrared radiation than conventional concrete and clay tiles Temperature of the tile body up to 10 C lower Reduction of the indoor temperature below the roof by up to 2 C (dependent on roof structure) Page 29
FUTURE KEY PRIORITIES Page 30
Four key priorities in Sales and Marketing in Germany in 2015 Protect market share in concrete tiles Provide more intensive sales support towards developers, housing associations and planners/architects Further improve perceived quality and price-value ratio for Braas concrete tiles to justify price premium Start innovation initiatives for new state-of-the art concrete tile (Tegalit and FP) Further selectively increase market share in clay tiles Introduce new clay products: Rubin 15V, Topas 11V, Opal and fittings Further improve merchant relationships Components: continue to push for an increase in components sales Insulation with Clima comfort and new supplier for Divodämm Several further product improvements (e.g. Braas clip) Further strengthen position of Braas as the #1 supplier in products and service Mid-term goal: develop best-in-class service level Page 31
Die Nummer 1 am Dach in Deutschland! Page 32