Ladies and gentlemen, welcome also from our side to this conference call on our results for the first nine months 2018. Wienerberger representatives on today's call are Heimo Scheuch, CEO, and Willy Van Riet, CFO. Mr. Scheuch will open the call with a summary of the key developments of the first nine months, our strategic priorities, as well as our outlook for the rest of the year. Following the opening statement, we will take questions. I now hand over to Mr. Scheuch for the executive summary.
Thank you, Klaus. A wonderful afternoon from all of us from Vienna to you on the conference call. Let me just comment a little bit the third quarter. We have obviously seen a strong performance with respect to turnover, plus 7%, and the EBITDA like-for-like plus 13%. Fully in line with our expectations. We have obviously, due to this strong operational performance, we continued the strong cash generation that we have seen already in the first half of the year. Fully in line with what we have been giving as a guidance. Let me just make a couple of comments with respect to the general economic situation and the markets that we are operating in. Again, when we look at the different regions, the Central Eastern Europe region is performing accordingly.
Markets are still and continue to be strong and sound markets as far as new housing is concerned and infrastructure. There's no change and no foreseeable change in this region of the world. We move to Western Europe. Here again, we have seen fairly the same and similar developments as we have seen in the first half of the year when it comes to the Benelux region, sound and good development. The U.K. has seen a very good trend also continuing in the third quarter, and Germany and Austria have been stable and in some parts, slightly increasing. When we come to France, and you have seen it in our map, which we have attached to this presentation, that's the only country in Western Europe where we have seen a decline.
You remember we talked about the fact that the legislation and fiscal policies has been changing and the change has occurred in France, and therefore, we have a drop in activity in the new residential housing segment. Therefore, obviously, we see this tendency to continue also in 2019 as far as France is concerned. Want to draw your attention to the fact that obviously this market is viewed as a declining market in our market perception also for next year. The Nordic markets are doing accordingly to expectations, and also North America has performed with respect to the new residential housing and infrastructure, our small exposure in pipes accordingly. No major changes as far as the markets are concerned.
When we move to the operational performance, let me just draw your attention also that our Fast Forward program that we have implemented earlier this year is taking full effect. You see a contribution coming in already in quarter three of EUR 8 million from this program. The whole Fast Forward contribution up till the third quarter, including the third quarter, is EUR 16 million. We foresee to achieve from this program approximately EUR 20 million this year. Again, we have shown that we are clearly already in full mode of operation when it comes to the Fast Forward program.
As you recollect, we have guided EUR 120 million efficiency improvement here. As we walk you through a little bit and as we did at the Capital Markets Day, I think it's important to stress again that especially when you talk about manufacturing excellence, procurement, supply chain management, general administration, and turnaround cases, all of these elements are internally based. That means we are in the driver's seat in order to realize them, and we, as Wienerberger, are confident in order to realize such potential. Obviously the project is already running, and we see the fruits coming through, and we are confident as far as the two next years are concerned, 2019 and 2020, to realize such potential. Obviously, in this respect, we have also moved in a simplification of our organization. We have basically in Europe two major parts now, Wienerberger Building Solutions and Wienerberger Paving Solutions.
Two divisions that regroup this. You will see this in full effect from next year onwards, in order to make the organization more efficient and driven by obviously this aspect also to create more of a service and solution-driven product offering for Wienerberger. Let me just also say two words about the general economical and political situation. We have added a slide in today's presentation on Slide 11. Obviously there's a lot of questions coming in from you as shareholders and colleagues of yours with respect to this. Wienerberger as a company and as our exposure to the different market is not affected by global trade wars or potential global trade wars. Because we produce locally and we sell locally. This is important to note. Obviously, the political turmoil around this creates some sort of instability and volatility on financial markets, where we are also affected.
Generally speaking, from the real economy, we are not affected. Second big issue, politically speaking, is the Brexit. A lot of discussion about it. We have had it also on our conference calls throughout the year. We are confident. I've always signaled to you that we remain confident as far as the housing market in the U.K. is concerned. We have a very sound and good demand level there. As you all know, where the U.K. remains underbuilt, there's a lot of pent-up demand still in the U.K. We remain confident that also through this political instability, there is this pent-up demand for the years to come. Our operations are fully running in the U.K. We have prepared ourselves also for eventual hard Brexit events because it's, for us, important.
We rely on spare parts from the European continent as far as our operational entities, our factories are concerned. We need, obviously, to have here the stock available in case of there's delivery shortages or whatever sort of turmoil on potential border issues. We have also lined up our operations as far as logistical issues are concerned, bringing in some of the products from the continent to the U.K. We have done our homework and are about to do it, obviously, we always believe, and I still personally believe that there are reasonable people on both sides of the channel that will negotiate a deal that is not bringing us in such critical situations when it comes to logistics. Let me just touch upon also a subject which is important to us also, the growth subject when it comes to M&A activity.
We have now, up till now this year, realized about roughly EUR 100 million of this program. We already have indicated for this year we will do up to EUR 200 million. Obviously, there's a month or more left for this year. You won't see us spend so much money before Christmas. Obviously, there are some projects and some very interesting projects in the pipeline, and this will sort of come through probably this year and earlier next year. Just want to make clear here that we pursue our M&A activity and that we have very good projects out there in the marketplace. Finally, to summarize, as far as the other activities are concerned, I just want to draw your activities that we have successfully executed our share buyback program, where we acquired 1.2 million shares earlier this year.
Obviously, when it comes to the outlook for this year, we fully confirm our outlook, which is in the range of EUR 460 million-EUR 470 million EBITDA for this year. All in all, I think if I may summarize, we are continuing our growth paths. We focus, obviously, as we already did and will continue to do so with respect to the company. Innovation. You have seen us, by the way, already also indicating earlier this week that we launched a cooperation with a German high-tech company in this field with respect to new products. It's a very innovative insulation material that we are testing right now and that we will then step by step bring to the market. It's a very good one, easy to install, very healthy for the indoor air quality of the house, and above all, it's very important, 100% recyclable.
In this circular economy that we see picking up in activity in the construction arena, a very important aspect for our future growth. Wienerberger will focus on innovation, drive this. We'll focus obviously, on the performance enhancement, where we are confident in order to reach our targets that we have set, and we will also continue our growth path with respect to the M&A activity, where we'll add these smaller companies or mid-size companies to our platform and therefore improve the quality of our margins. You have seen, by the way, in quarter three, the strong market at the margin expansion already. All in all, a positive outlook for this year, and I look also with optimism beyond that. Thank you very much for your attention, and all of us are here ready to take your questions. Thank you.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from the line of Yves Bromehead of Exane. Please go ahead.
Good afternoon, gentlemen. I'll have three questions, if I may. The first one is on underlying trends in Europe. When we look at leading indicators in some of your key markets in both Western and Eastern Europe, they have started to weaken recently. Do you think that this is rather a blip from a difficult base effect, or have you seen something fundamentally changing? Maybe just to follow up on that one. In Germany, I think there has been a push towards some fiscal initiatives. What is your view on this, and do you expect this to go forward given the current political environment? My second question is on gas costs. Could you give us a sense of how much of your gas and as well electricity requirement in 2019 is hedged already?
I would be interested to understand when those hedging contracts took place, if you can mention that. My last question is on the pipe business. I was looking for an update on the trading conditions on the international pipe business and the large diameter pipe business in terms of the conversion of those projects into your revenue base. Thank you very much.
Thank you for your questions. Let me just answer the first one. We don't see any fundamental changes. The only change that I sort of talked about and alerted you to is the French one, and I think you're perfectly aware of the French situation, so I don't have to add to this. The rest, we don't see any sort of signs of major fundamental changes. As far as the German situation is concerned, yes, there are discussions about some fiscal initiatives. Let's see and what it brings. Again, also here, I remain rather optimistic that the German situation will continue, and hopefully with some fiscal initiatives and positive signals improve. For the gas situation, I will hand over to Willy.
We have roughly, going forward, 80% of our gas and electricity for 2019. I can't give you the dates, but some of those contracts went out after the holiday period. In an environment where prices were already increasing, also the forward prices. We are looking at an increased gas bill for 2019. At this stage, not to an extent that I would say that this is a major headwind or not something that we can cover through our pricing increases. I don't know by heart when, but I know some of those coverage went out after the holiday period, basically. On the pipe business, on the project, the long length large diameter is performing rather well and is basically more or less on track on expectations.
What is still lagging a bit behind is the Soluforce, the reinforced pipe in the Middle East, where we are seeing confirmations of orders coming in, but we're not having the deliveries yet. There, we are a little bit lagging. The growth you see in the Western European part is mainly in the long length diameter.
Okay, thanks. Just coming back on the gas cost, could you give us a sense of what variable cost inflation you'd be looking at in 2019 already?
At this stage, still having to cover some of the costs, yeah, for the year. I would be cautious on giving something at this stage. Yeah. It's going to be a negative. Yeah.
Okay.
Not one that I would worry about too much at this moment.
Okay, thank you.
The next question is from the line of Matthias Pfeifenberger of DB. Please go ahead.
Yes, good afternoon, gents. A couple of questions from me. Firstly, on France, maybe you can still share some details. It's a rather quick reversal in fortunes because you're now saying it's minus 3% or worse for the year, and that's basically down from flattish and up prior to that, so it seems to be like a falling off the cliff. Secondly, on winter, you had a very strong winter, I think, in the last two years. Now, can you just remind us, November is very warm again in parts of Europe. I think I recall you saying that it's really decisive about December, maybe just an update there. Just housekeeping tax rate in Q3, quite low. Can you give us a guidance for the full year and also similarly for depreciation rates? Thanks.
Thank you, Matthias. France is not falling off a cliff, obviously due to these measures which can be qualified, sort of legislation and fiscal policy, we will see as a mid-ranged single-digit number of decline in the marketplace. That's what my estimation is at this stage. From the winter perspective, remember last year we had also a very mild fall. We had obviously the possibility on our not our construction sites, but the customer's construction sites to work through till about Christmas. From our perspective, you're right, the weather currently is also more or less the same and good. I can also everybody inform that also the month of October was in line with our expectations. I think, again, when we have the same running rates, we are set for reaching our guidance. For the tax rate, I let Willy answer.
Please don't think that we do every quarter of complete tax calculation. What we're doing is actually a rolling forward of our tax position in the various tax-paying environments where we are. What you've seen in the third quarter is basically a little bit of an adjustment on what we already had in our books for the first half of the year. Because we are coming closer to the year-end and our estimates of our taxable income get better and also our deferred taxes. I can simply confirm that we still look at a 25% average tax rate for the full year. That's why it is, don't take really a guidance in a quarter as a guidance for a full year. I think that would be not too good, either on the upside or on the downside.
Okay. That would imply very high, like 30%+ in the fourth quarter, and then maybe on depreciation, if you can.
Depreciation for the year, I think roughly EUR 180 million-EUR 190 million, excluding any impairments. Impairments, we will still look at in the course of our Usually we do that in the last quarter when we look at the impairment valuation of our balance sheet.
Yes.
Yep.
Okay, thanks. Could you just remind us of the volume versus price in the nine months or into Q3, if you can? Thanks.
Yeah. We have 6% on reported growth in the top line. We communicated also 5% like-on-like, so that means that consolidation and FX was 1%. Then on volume, I would say is 1% and price, 4%.
Okay, great. Thanks a lot.
Again, if you have a question, please press star then one. The next question is the line of Gregor Kuglitsch of UBS. Please go ahead.
Hi, good afternoon. I want to explore a little bit the third quarter in pipes and pavers. It is not perhaps that straightforward to calculate, but it looks like on an underlying basis, there was a little bit of margin pressure and kind of reversing some of the gains in the first half. I want to just understand, A, if that conclusion is correct, appreciate that obviously some of the one-offs are not as easy to allocate, although you do give some help for the nine months. If you could just comment if there is anything specific going on that impacted the third quarter. Similarly, in the U.S. obviously we are hearing about slowdown in housing starts, and a lot of your kind of wider building product tiers have started to see a reasonably substantial slowdown.
If you care to comment whether you are seeing that as well or whether that is not relevant for your particular end market. Can I just come back to the energy cost point. Can you just remind us this year in 2018, including hedging and so on, will your gas and electricity cost be. What will be the change compared to 2017? I guess you already should have a pretty good picture what it will be. I do not know if you have a percentage inflation or deflation, that would be helpful. Thanks.
Yeah. Okay.
Can I just comment before Willy jumps in? I think on the U.S., obviously we monitor also the market, our relevant market. Please keep in mind, we are not a pan-U.S. player. We are in smaller markets of the U.S. and regional ones. We have never sort of took into consideration a booming U.S. environment, so a slight growth in the market. Obviously we, with our products and how we operate in the U.S., we see obviously in line with our expectations, the market developments.
It's too early to see what will happen in the next coming years. Obviously, as I said, we are operating in this environment, and we continue to see our trends and our demand volume coming through. On the energy, I think when you compare 2017 to 2018, it's a flattish scenario with no major increases. Then we have the pipes for Willy.
On the pipes, we've seen a little bit of, I would say flattening out rather in the third quarter, especially in some of the orders in Eastern Europe. That's, I think, just a reaction to the fact that the beginning of the year, on the first two quarters, there was a very big high demand, then it seems to be normalizing more or less. Still a growth, still positive. If you remember in the beginning of the year, we had a bit of a winter, then all of a sudden everything took place at the same time. We had a very strong expansion all of a sudden. This is just a counterreaction to this.
Okay. Excellent.
Nothing that indicates that the market is weakening or the demand is there. Actually to the contrary. Projects are still coming in, but it's a bit on the other side.
I guess I was looking at the EBITDA. It looks like it's down, but maybe my math isn't right. It is sort of excluding the one-off. I don't know if that's correct in the third quarter.
No. EBITDA is up, actually.
Okay. Thank you.
Yeah.
There are no further questions at this time. I hand back to Mr. Ofner.
Thank you, operator. Ladies and gentlemen, thanks again for your interest and for dialing in today. Actually, all that is left for today is to thank you for attention and to wish you a nice day. Bye.