Overview

We have seven lean brick years ahead of us

22/03/2012

Knack article (2 March 2012)

The façade brick, the symbol of Batibouw, is a product of boom-bust cycles. Vandersanden, the largest independent producer, sometimes effortlessly achieves 30 per cent return, but CEO Wuytack predicts there are hard times ahead.

In the production of façade bricks, Wienerberger commandeers almost half of the domestic market. Number 2 is Vandersanden, the largest independent producer of façade bricks in the Benelux. In 2011 group sales for the company based in Limburg were 110 million euros, an increase of 14 million. CEO Jean-Pierre Wuytack speaks plainly of a one-off peak. "The seven fat years in the construction industry are over," he states. "The seven lean years have started." The son-in-law of former CEO Constant Vandersanden has identified an overcapacity of 25 per cent in this niche. Compared to our record year of 2008, the market has shrunk by a quarter. "And it will remain at that level," he predicts. "There will be casualties, but we will not be one of them. Our company's internal buffer can absorb these shocks. And through Vandersanden Finance in Luxembourg, we also set up an external rainy day fund." Under Vandersanden Finance, the family saved money in the form of investments in companies and real estate. For example, in Poland they financed the development of a business estate for the amount of 30 million euros.

Under this umbrella there is also a huge operational dairy farm in Michigan. The operations are led by Guido Wauters, also CFO of Vandersanden Bricks, of which brother-in-law Wuytack is CEO. "It is the bank of the group," says Wauters. "This company intervenes in certain projects or if the market dips."

Vandersanden Steenfabrieken NV reached a turnover of 65 million euros in 2011. On top of that, the Dutch plants achieved a turnover of 35 million and the sales channel SCU 10 million. EBITDA of the Belgian branch is almost 20 per cent, and in peak years even 30 per cent. For the consolidated margins the norm is 20 per cent. "There is nothing else for it," the CEO has calculated. "A new plant costs 45 million euros and annually it achieves a turnover of 14 million. With 15 to 20 per cent EBITDA, it takes 20 years before you start earning back your capital."