Villeroy & Boch AG

Quarterly Report • Apr 29, 2008

Interim Report January 1st to March 31st 2008

• Consolidated sales in continued segments up by 6.3%
• Slight improvement in EBT compared with prior year

Overview of the Villeroy & Boch Group

	01/01-03/31/2008	01/01-03/31/2007	Change	Change
		(1)
	Euro million	Euro million	Euro million	%
Sales	220.9	207.9	13.0	6.3
Germany	46.4	48.2	-1.8	-3.7
Abroad	174.5	159.7	14.8	9.3
Result before
Income tax and interest/EBIT	10.2	10.7	-0.5	-4.7
Income tax/EBT	8.3	8.0	0.3	3.8
Capital expenditures	3.2	4.0	-0.8	-20.0
Consolidated results per share	0.22	0.21	0.01	4.8
(Euro)
Employees	9,331	9,151	180	2.0
(1) Prior year comparison: Con
tinued segments

Securities Identification Number: 765 720, 765 723 ISIN: DE0007657207, DE0007657231 Villeroy & Boch AG • D 66688 Mettlach Tel.: 0049 (0)6864 - 81 1520 • Fax: 0049 (0)6864 - 81 7 1520 Internet: http://www.villeroy-boch.com

Cooling Down of the Global Economy

The global economy slowed down noticeably in spring 2008 due to the real estate crisis in the USA and the turmoil that this caused on the international financial markets.

Economic research institutes consider that there is considerable risk of the USA sliding into a recession. There has also been a slight weakening of the economy in Western Europe. Global economic development is also being curbed by the upsurge in prices witnessed over the past few months, as well as by the sustained increase in crude oil prices and the rise in the cost of food. This is causing a withdrawal of spending power on a global scale.

The expansion tempo of the global economy is nevertheless still considerable, mainly due to the substantial increase in production in the emerging nations.

The economy in Germany is expected to cool down in the course of 2008. On the one hand, Germany is profiting from accelerated domestic demand, due, in particular, to substantial increases in income in the wake of job creation measures; on the other hand, very little momentum will be provided by international demand in the face of the increasingly negative mood in the global economy and the upward revaluation of the Euro.

Sales and Net Income above Prior Year Level

The Villeroy & Boch Group achieved sales of €220.9 million in the first quarter of 2008, which is equivalent to a 6.3% improvement over the comparable prior year period for the continued operations.

Adjusted for currency influences resulting, in particular, from the weakness of the dollar, this equates to a 7.8% increase compared with the prior year, with the proportion of foreign sales reaching 79% (prior year 76.8%).

Orders on hand in the Villeroy & Boch Group as of March 31st 2008 stand at €74 million compared with €59.5 million at the beginning of the financial year. The increase of around €14.5 million is accounted for almost entirely by the Tableware Division and is mainly attributable to seasonal effects.

EBT for the first three months of 2008 stands at €8.3 million, which means that it has increased slightly compared with the prior year (€8.0 million; adjusted for the Tile Division).

Development in the Divisions

Bathroom and Wellness: Sales at Prior Year Level

The first three months of 2008 have seen sales achieved by the Bathroom and Wellness Division remain virtually constant at €136.4 million, compared with the corresponding prior year period. A comparison with the prior year should, however, take into account that the Easter break fell in the first quarter of 2008 this time and that it was not until April/May 2007 that the noticeable weakening of construction activity in Germany became evident. The global sales regions show markedly different development:

Western Europe, without the old domestic markets of Germany and France, saw net sales increase by + 6%, whereas a prior year comparison for the two above-mentioned countries shows a clearly negative result at - 9%. In Germany the economic dip in the construction industry continues to persist. However, in most Western European markets, upscale new construction or renovation work continues to be at a good level.

In Northern Europe, particularly Sweden, intense competitive pressure arose at the end of last year, with the result that, overall, the region has not hitherto been able to record any growth rates in 2008.

By contrast, the Division was able to perform strongly in Eastern Europe again. Driven by Poland, Russia, the Czech Republic and Romania, the region increased sales by + 17%.

The positive development on the American continent is being severely impacted in 2008 in the USA by currency effects and the mortgage crisis. The weakening of the US dollar and the recessive economic development are significantly slowing down business in the Division. However, it was still possible to achieve another 8% sales increase in Mexico.

The highest growth rates, however, were achieved in the Asian countries, particularly in China. Furthermore, the growth rates in both Australia and the Gulf States in the Middle East were above-average.

Sanitary ware, furniture and Wellness innovations were put on show at the important Sanitär- und Handwerksmesse (Trade Fair for Sanitary Installation, Heating and Air Conditioning) in March, being well received by trade visitors from the wholesale sector and by plumbers alike. These innovations primarily involve natural additions to the range and a further offensive in the sphere of bathroom furniture.

In terms of product segments, branded goods were able to show a significant increase in all areas, with the product groups of furniture (+ 12%) and Wellness (+ 10%) deserving particular emphasis. The success of the high investment made in customer exhibitions in 2007 is now being revealed.

The measures for optimizing order processing and logistics processes started in the prior year and enabled significant improvements to be made in delivery punctuality and reliability, in the first quarter of 2008, which has met with a positive response from customers.

In the first quarter, the Bathroom & Wellness Division achieved an EBIT of €6.9 million, which was below the prior year result of €9.6 million, caused mainly by the increased costs incurred in opening up new markets as well as negative effects on currency and economy coming from the USA. In the further course of the year, however, the Division expects to see a slight recovery in sector activity in Germany, strengthening of the competitive position in Scandinavia and further sales successes with the furniture and Wellness innovations placed on the market in the last 12 months. A largescale initiative involving local Wellness ranges is in the process of being launched and will give a positive boost to sales development. Eastern Europe and Asia will continue to make good progress, but the crisis in the USA will also have an impact on the entire year.

Tableware: Significant Increase in Sales and Net Income in a Difficult Market Environment

The Tableware Division was able to hold its own in the first quarter of 2008, even though the current market situation, which has been, and will doubtless continue to be, negatively influenced by uncertain consumer behavior in the wake of the US subprime crisis, provides a very difficult environment.

Sales achieved by the Tableware Division in the first quarter of 2008 were significantly above the prior year's reference values. However, sales are being heavily driven by special business activities in the area of advertising material. Comparable special business activities in financial year 2007 did not start until the second quarter of the year.

Sales in the first 3 months rose to €84.5 million, a €13.8 million or 19.5% increase compared with the prior year. It is particularly Eastern Europe (+60%), Russia (+38%), Poland (+34%) and the Middle East (+52%) that have witnessed a significant increase in sales. Compared with the prior year, sales in the German market also showed a positive development (+11%).

There were pleasing developments in the sales channels of external specialized trade, ecommerce and premium & incentive, due, in this case, to the special order, in particular.

Incoming orders in the first 3 months increased from €82.5 million to €98.7 million, an improvement of €16.2 million over the same period in the prior year. This is, however, influenced by the above-mentioned large-scale order in the advertising area. Adjusted for this effect, incoming orders were still 2% or €1.5 million above the pro rata prior year level. Extremely good orders are currently being placed in the markets of Eastern Europe (including Russia) and the Middle East. However, a good volume of orders has also been received in Italy, France, Austria and Germany, in comparison with the first quarter of 2007. By contrast, business in the UK / Ireland, Switzerland, USA and the Benelux countries has been slightly disappointing.

Operating income (EBIT) in the first quarter of €3.3 million is €2.2 million above that of the prior year's reference value of €1.1 million.

Investment Volume

The first quarter of 2008 saw the Villeroy & Boch Group invest a total of €3.2 million, compared with €4.0 million in the prior year period.

€3.1 million of this figure was accounted for by property, plant and equipment and €0.1 million by intangible assets. According to regions, around 34% was invested in Germany and 66% abroad.

Outlook for Financial Year 2008

The Villeroy & Boch Group will continue its internationalization strategy in 2008. The acquisition of 80% of shares in Nahm Sanitaryware Co. Ltd., the Thai sanitaryware producer, completed in April 2008, meant that another step was taken in the context of this strategy. The intention is to create a platform in the Asian region.

Villeroy & Boch expects to see an increase in sales revenue and net income over the entire year.

Villeroy & Boch Share

The Villeroy & Boch share closed the first quarter on March 31st 2008 at a price of €8.91. Compared with the closing price of financial year 2007, which was €12.32, this is equivalent to a fall of 27.7%. The comparative index of the "Prime Household" sector lost almost the same amount of value in the reporting period.

Mettlach, April 2008

Villeroy & Boch Aktiengesellschaft

The Management Board

Financial Calendar:

May 30th 2008 General Meeting of the Shareholders at Town Hall ("Stadthalle") in Merzig July 29th 2008 Report on the first half of 2008 October 28th 2008 Report on the first nine months of 2008

Villeroy & Boch Group

Consolidated balance sheet as of March 31st 2008

in Euro `000	Notes	31/03/2008	31/12/2007
Assets
Intangible assets	1	47,946	48,163
Property, plant and equipment	2	198,552	205,506
Investment properties		16,370	16,571
Investment accounted for using the equity method		1,122	1,092
Other financial assets	3	24,840	25,046
		288,830	296,378
Other non-current assets		68	78
Deferred tax assets		43,473	46,471
		332,371	342,927
Non-current assets
Inventories	4	176,364	168,726
Trade receivables	5	137,750	135,008
Financial assets	6	20,258	45,219
Other current assets	7	29,916	32,632
Income tax claims		6,193	5,285
Cash and cash equivalents	8	72,734	75,091
		443,215	461,961
Total Assets		775,586	804,888
Shareholders' Equity and Liabilities
TEuro	Notes	31/03/2008	31/12/2007
Equity attributable to Villeroy & Boch AG shareholders
Issued capital		71,909	71,909
Capital surplus		193,587	193,587
Retained earnings	9	77,439	71,723
Consolidated result		5,834	7,171
		348,769	344,390
Equity attributable to minority interests		182	184
Total equity		348,951	344,574
Non-current liabilities
Provisions for pensions		153,618	154,326
Non-current provisions for personnel	10	19,053	19,372
Other non-current provisions Non-current financial liabilities	11	5,198 70,000	5,166 70,000
Other non-current financial liabilities	12	3,634	3,717
Deferred tax liabilities		15,088	15,432
		266,591	268,013
Current liabilities
Current provisions for personnel	10	3,720	8,234
Other current provisions	11	22,201	24,290
Current financial liabilities		2,895	1,972
Other current liabilities	12	64,762	83,750
Trade payables		59,580	66,782
Income Tax liabilities	13	6,886	7,273
		160,044	192,301
Total liabilities		426,635	460,314
Total equity and liabilities		775,586	804,888

Consolidated Income Statement

as of December 31st 2008

		2008	2007
in Euro '000	Notes	01.01.-31.03.	01.01.-31.03.
CONTINUED OPERATIONS
Revenue	14	220,928	207,877
Costs of sales		-132,069	-119,854
Gross profit		88,859	88,023
Selling, marketing and development costs	15	-64,642	-62,254
General and administrative expenses		-12,007	-12,028
Other operating income/expense		-2,089	-3,096
Result of associates accounted for using the equity method		30	30
Operating result (EBIT)		10,151	10,675
Financial results	16	-1,818	-2,638
Earnings before taxes		8,333	8,037
Income taxes		-2,500	-2,495
Net income from continued operations		5,833	5,542
SOLD OPERATIONS
Net income from sold operations		0	280
RESULT AFTER TAX (GROUP)		5,833	5,822
Thereof attributable to minority interests		1	-4
OF WHICH GROUP EQUITY HOLDERS ARE ENTITLED OF (CONSOLIDATED RESULT)		5,834	5,818
EARNINGS PER SHARE in Euros
Consolidated net earnings per ordinary share Consolidated net earnings per preference share		0.20 0.25	0.20 0.25
Thereof continued opertions Net earnings per ordinary share		0.20	0.19
Net earnings per preference share		0.25	0.24

There were no share dilutions effects in the reporting periods.

Consolidated Statement of Equity as of March 31st 2008

in Euro '000 Notes	Issued capital	Capital surplus	Retained earnings 9	Consolidated result	Equity attributable to Villeroy & Boch AG sharesholders	Equity attributable to minority interests	Total Equity
As of 01.01.2007	71,909	193,587	67,556	17,037	350,089	310	350,399
Dividend					0		0
Reclassification of prior-year			17,037	-17,037	0		0
Consolidated result 01.01. - 31.03.				5,818	5,818	4	5,822
Subsequent measurement IAS 39			650		650		650
Acquisition of minority interests					0		0
Currency adjustment			-1,511		-1,511		-1,511
Other changes in equity					0	-86	-86
As of 31.03.2007	71,909	193,587	83,732	5,818	355,046	228	355,274

As of 01.01.2008	71,909	193,587	71,723	7,171	344,390	184	344,574
Dividend					0		0
Reclassification of prior-year			7,171	-7,171	0		0
Consolidated result 01.01. - 31.03.				5,834	5,834	-1	5,833
Subsequent measurement IAS 39			539		539		539
Acquisition of minority interests					0		0
Currency adjustment			-1,857		-1,857	-1	-1,858
Other changes in equity			-137		-137		-137
As of 31.03.2008	71,909	193,587	77,439	5,834	348,769	182	348,951

Consolidated Cash Flow Statement as of March 31st 2008

in Euro '000	01.01.-31.03. 2008	01.01.-31.03. 2007
Result after taxes	5,833	5,822
Depreciation of non-current assets	9,362	10,828
Change in non-current provisions	-3,135	-2,725
Profit from dispoal of fixed assets	1	-303
Change in inventories, receivables and other assets	-12,424	3,762
Change in liabilities, current provisions and other liabilities	-31,841	-27,883
Other non-cash income/expenses	5,247	2,389
Cash Flow from operating activities	-26,957	-8,110
Purchase of intangible assets, property, plant and equipment	-3,219	-4,574
Investment in non-current financial assets and cash payments for the acquisition of consolidated companies	-4,351	-1,423
Cash payments for restricted cash	24,961	0
Cash receipts for sold operations	6,666	0
Cash receipts from disposals of fixed assets	316	3,329
Cash Flow from investing activities	24,373	-2,668
Change in financial liabilities/other	0	4,737
Dividend payments	0	0
Cash Flow from financing activities	0	4,737
Sum of cash flows	-2,584	-6,041
Changes due to exchange rates	227	99
Net increase in cash and cash equivalents	-2,357	-5,942
Balance of cash and cash equivalents as of 01.01.	75,091	11,596
Change in consolidated companies	0	0
Net increase in cash and cash equivalents	-2,357	-5,942
Balance of cash and cash equivalents as of 31.03.	72,734	5,654

The balance of cash and cash equivalents consists of the items 'Cash at bank' and 'Cash on hand (including cheques)'.

Group Segment Reporting as of March 31st 2008

Segment report according to division - Primary segments

	BATHROOM & WELLNESS		TABLEWARE			TRANSITION / OTHER	CONTINUED BUSINESS SEGMENT		SOLD BUSINESS SEGMENT
in Euro '000	2008	2007	2008	2007	2008	2007	2008	2007	2008	2007
Revenue
Segment revenue from sales to external customers	136,411	137,175	84,517	70,702	0	0	220,928	207,877	-	40,041
Segment revenue from transactions with other segments	196	324	0	0	-196	-324	0	0	-	0
Result
Segment result	6,907	9,576	3,244	1,099	0	0	10,151	10,675	-	280
Financial result					-1,818	-2,638	-1,818	-2,638	-	0
Other information
Segment assets	387,822	390,690	171,120	176,165	216,644	101,737	775,586	668,592	-	99,886
Segment liabilities	112,265	106,126	41,298	40,538	273,072	230,211	426,635	376,875	-	36,329
Capital expenditures	2,221	2,794	998	1,244	0	0	3,219	4,038	-	535
Scheduled depreciation of segment assets	5,746	5,613	3,616	4,032	0	0	9,362	9,645	-	1,222
Number of employees (average)	6,003	5,878	2,907	2,825	421	448	9,331	9,151	-	946

9

Villeroy & Boch Group Notes to the First Quarterly Report of 2008

General Information

Villeroy & Boch AG, headquartered in Mettlach, is a public limited company under German law. It is quoted on the German stock market and acts as parent company to the Villeroy & Boch Group. The network of companies is divided into the two operational divisions of Bathroom and Wellness and Tableware.

The interim report for the period from January 1st to March 31st, 2008 was released for publication by resolution of the Management Board. It was prepared in accordance with section 315a of the German Commercial Code, applying the IASC rules adopted by the European Commission. In the view of the Management Board, the interim financial statements presented give a true and fair view of the results of operations, financial position and net assets. Pursuant to IAS 34, the interim report contains condensed consolidated statements with selected explanatory notes. For this reason, it should be read in conjunction with the consolidated financial statements as of December 31st, 2007. The accounting, valuation and consolidation methods described in the 2007 Annual Report were continued unaltered in the reporting period. The Annual Report of the Villeroy & Boch Group for 2007 is available on the following webpage:

http://www.villeroy-boch.com/kkm/download/consumer/ir/berichte/geschaeft/VB\_Geschaeftsbericht2007\_en.pdf. An audit or inspection of these interim financial statements has not yet been conducted by an auditing company.

Consolidation Companies

Villeroy & Boch AG and fully consolidated companies:	Germany	Abroad	Total
As of January 1st, 2008	16	45	61
Additions due to share purchases	-	1	1
Reductions due to amalgamations	-	-2	-2
As of March 31st, 2008	16	44	60

An umbrella company, headquartered in Hong Kong, was acquired to prepare the way for further expansion in Asia. To optimize the ownership structure within the Villeroy & Boch Group, Villeroy & Boch Wellness AB, Växjö, and Product Design Växjö Aktiebolag, Växjö, were merged into Villeroy & Boch Gustavsberg AB, Gustavsberg.

Acquisitions / Disinvestments / Discontinued Operations

On April 10th 2008, the Villeroy & Boch Group acquired 80 percent of shares in the Thai sanitaryware producer Sanitaryware Co. Ltd., headquartered in Bangkok. Closing requires the approval of the Thai Board of Investment. The Group made a payment to a trust account in March 2008.

Dividend Proposal by Villeroy & Boch AG for the Financial Year 2007

Supervisory Board and Management Board propose that the following dividends should be distributed to voting shareholders:

Dividends on ordinary share certificates Euro 0.37 (2006: Euro 0.37)

Dividends on preference share certificates Euro 0.42 (2006: Euro 0.42)

The ordinary shareholders will vote on this proposal in the General Meeting of the Shareholders on May 30th, 2008.

Seasonal Influences on Business Activity

Easter-related business in the first quarter and, in particular, Christmas-related business in the fourth quarter lead the Tableware Division to regularly expect to attain higher sales and operating profits in these two quarters than in the two others. These influences are also evident at Group level, since no other seasonal effects are identifiable in the remaining product portfolio. In each of the last two years, the fourth quarter enjoyed the biggest growth in sales and profits.

Notes to the Consolidated Balance Sheet

This section describes the composition of selected balance sheet items.

Fixed Assets

Movement of fixed assets in the reporting period was as follows:

In Euro '000	Intangible	Property,	Investment	Investment	Other	Total
	assets	plant and	property	accounted for	financial
		equipment		using the	assets
				equity method
Text reference	1	2			3
Accumulated cost
As of 01/01/2008	61,493	733,157	67,852	1,092	33,051	896,645
Currency adjustment	36	-2,299	0	0	-5	-2,268
Additions	103	3,116	0	30	3	3,252
Disposals	0	-500	0	0	-204	-704
Transfer	3	-3	0	0	0	0
As of 03/31/2008	61,635	733,471	67,852	1,122	32,845	896,925
Accumulated depreciation
As of 01/01/2008	13,330	527,651	51,281	0	8,005	600,267
Currency adjustment	-4	-1,145	0	0	0	-1,149
Scheduled depreciation	363	8,798	201	0	0	9,362
Disposals	0	-385	0	0	0	-385
As of 03/31/2008	13,689	534,919	51,482	0	8,005	608,095
Net book values
as of 03/31/2008	47,946	198,552	16,370	1,122	24,840	288,830

1. Intangible Assets

The change in value of the capitalized goodwill of the Villeroy & Boch Group in the Bathroom and Wellness Division, which amounted to Euro 0.024 million compared with the year-end, is purely exchange rate dependent. The Group acquired intangible assets in the amount of Euro 0.103 million in the reporting period (prior year: Euro 0.085 million). Mainly software licenses from German companies were capitalized.

2. Property, Plant and Equipment

Items of property, plant and equipment in the amount of Euro 3.116 million (prior year: Euro 4.488 million) were acquired during the reporting period, with the foreign share amounting to 68.1%. The focus was on optimizing production processes in Mexico and the Czech Republic. Molds for innovations were acquired in the Netherlands. In Germany, the Group invested Euro 0.994 million, which included optimizing the production processes in Torgau. The same period saw the disposal of property, plant and equipment with a book value of Euro 0.115 million (prior year: Euro 0.226 million). The scheduled depreciation amounted to Euro 8.798 million. The comparative period saw an accumulation of scheduled depreciation in the amount of Euro 10.439 million, with Euro 0.207 million being accounted for by buildings reclassified as "Investment property" in the fourth quarter.

A significant currency effect results from the volatility of the Hungarian forint, which caused the acquisition costs to fall by Euro 1.316 million and depreciation by Euro 0.762 million.

At the time of reporting, the Villeroy & Boch Group had liabilities relating to the acquisition of property, plant and equipment to the amount of Euro 0.535 million (as of 12/31/2007: Euro 1.034 million).

3. Other Financial Assets

Other financial assets comprise securities held on a long-term basis, investments and loans.

in Euro '000	03/31/2008	12/31/2007
Available-for-sale financial assets
Equity instruments of unrelated companies ( at cost investments)	12,280	1,280
Loans measured at costs
Loans to related companies	10,719	10,719
Loans to 3rd parties	1,841	2,047
Other financial assets	24,840	25,046

4. Inventories

On the balance sheet date, inventories comprise:

in Euro '000	03/31/2008	12/31/2007
Raw materials and supplies	28,016	29,103
Work in progress	29,420	28,306
Finished goods	118,329	110,178
Advance payments	572	1,138
Emission allowances	27	1
	176,364	168,726

Value adjustments on inventories increased by Euro 1.967 million, from Euro 23.329 million on January 1st to Euro 25.296 million, which had an effect on the operating result. Euro 0.599 million (as of 12/31/2007: Euro 1,139 million) of the inventories reported on the balance sheet date are accounted for at net realizable value.

5. Trade Receivables

For sales of goods and merchandise, payment terms are granted specific to the respective countries and industries. Regionally, these receivables are distributed as follows:

in Euro '000	03/31/2008	Remaining term	12/31/2007	Remaining term
		more than 1		more than 1
		year		year
Germany	84,373	73	76,771	74
Rest of Eurozone	10,835	0	32,965	0
Other international destinations	42,542	0	25,272	0
Trade receivables	137,750	73	135,008	74

The reporting period saw the individual and portfolio-based allowances on trade receivables increase, on balance, by Euro 0.085 million to Euro 5.475 million. With respect to receivables that are neither impaired nor delinquent, there is, as of the balance-sheet date, no indication of a possible default by the debtor.

6. Current Financial Assets

Time deposits with a maximum term of up to 12 months are reported as current financial assets. The banks are located in the following regions:

in Euro '000	03/31/2008	12/31/2007
Germany	20,258	20,000
Rest of Eurozone	0	25,219
Book value	20,258	45,219

Within the first quarter of 2008, Euro 25.219 million became due; the remaining time deposits will be redeemed by no later than November 2008.

7. Non-Current and Current Other Assets

The changes which non-current and current other assets underwent in the reporting period were as follows:

	Book	Remaining term		value value	Book	Remaining term
		up to	over		up to	over
in Euro '000	03/31/2008	1 year	1 year	12/31/2007	1 year	1 year
Original financial instruments
Security deposits	960	960	0	974	974	0
Advance payments	987	987	0	2,043	2,043	0
Receivables from associates	3,742	3,742	0	5,037	5,037	0
Remaining other assets	11,908	11,877	31	13,675	13,644	31
Derivative financial instruments
Currency futures	3,824	3,824	0	2,099	2,099	0
Commodities futures	36	36	0	0	0	0
Other items
Other tax receivables	6,090	6,090	0	6,684	6,684	0
Prepaid expenses	2,437	2,400	37	2,198	2,151	47
	29,984	29,916	68	32,710	32,632	78

8. Cash and Cash Equivalents

On the balance sheet date, cash and cash equivalents comprise the following:

in Euro '000	03/31/2008	12/31/2007
Cash on hand and checks	177	900
Cash in demand accounts with banks	19,691	29,064
Cash equivalents	52,866	45,127
	72,734	75,091

At the time of reporting, the Group holds 81% of all cash in Germany. The cash balance in banks for the entire Group was consolidated by Villeroy & Boch AG with bank liabilities in the amount of Euro 1.626 million (prior year: Euro 1.371 million), since the necessary netting facts and conditions and the intention of net settlement are present (IAS 32.42).

9. Retained Earnings

The following revaluation surpluses are accounted for in retained earnings, pursuant to IAS 39:

in Euro '000	12/31/2007	Increase	Reduction	03/31/2008
Revaluation of currency futures	2,001	2,092	-1,577	2,516
Revaluation of interest rate swaps	-248	24	0	-224
	1,753	2,116	-1,577	2,292

In addition, this takes into account exchange rate-based changes in loans which were classified as net investment in foreign Group companies:

in Euro '000	12/31/2007	Increase	Reduction	03/31/2008
Currency translation pursuant to IAS 21.32	-4,341	0	-698	-5,039

Essentially, this effect is based on the exchange rate movement of the Mexican peso. This results in a reduction in equity, totaling Euro 0.636 million.

10. Non-Current and Current Personnel Provisions

Movement in non-current and current personnel provisions in the reporting period was as follows:

in Euro '000	03/31/2008	12/31/2007
Non-current personnel provisions	19,053	19,372
Thereof from partial retirement	10,078	10,470
anniversary bonuses	5,179	5,115
severance payments	3,796	3,787
Current personnel provisions	3,720	8,234
Thereof from royalties, bonuses and similar obligations	3,487	7,889
other matters	233	345

11. Non-Current and Current Other Provisions

Movement in non-current and current other provisions in the reporting period, was as follows:

in Euro '000	03/31/2008	12/31/2007
Non-current other provisions	5,198	5,166
Thereof from recultivation projects	3,818	3,818
other matters	1,380	1,348
Current other provisions	22,201	24,290
Thereof from guarantees	11,082	11,266
restructuring	4,013	4,513
sales commission	1,108	897
other taxes (excluding income taxes)	979	1,008
other matters	5,019	6,606

12. Other Non-Current and Current Liabilities

Non-current and current liabilities comprise the following items:

	Book value		Remaining term	Book value	Remaining term
	03/31/2008	up to 1	over 1	12/31/2007	up to 1	over 1
in Euro '000		year	Year		year	year
Original financial instruments
Advances received on purchase orders	1,129	1,129	0	5,213	5,312	0
Bonuses and rebates	20,737	20,737	0	37,057	37,057	0
Other liabilities	4,973	3,615	1,358	6,680	5,223	1,358
Derivative financial instruments
Interest rate swaps	224	80	144	1.007	793	214
Currency futures	501	501	0	60	60	0
Commodities futures	183	183	0	666	666	0
Other items
Personnel liabilities	28,785	28,101	684	25,683	24,999	684
Other tax liabilities	9,739	9,739	0	8,868	8,868	0
Government grants	1,270	198	1,072	1,283	198	1,085
Deferred income	855	479	376	950	574	376
	68,396	64,762	3,634	87,467	83,750	3,717

13. Non-Current and Current Income Tax Liabilities

Non-current and current income tax liabilities comprise:

	Book value	Remaining term		Book value	Remaining term
	03/31/2008	up to 1	over 1	12/31/2007	up to	over
in Euro '000		year	year		1 year	1 year
Income tax liabilities	12	12	0	795	795	0
Income tax provisions	6,874	6,874	0	6,478	6,478	0
	6,886	6,886	0	7,273	7,273	0

Notes to the Consolidated Income Statement

14. Revenue

Sales revenue is itemized in segment reporting.

15. Selling, Marketing and Development Costs

This item contains the following expenses for research and development in the reporting period:

in Euro '000	2008	2007
	1st quarter	1st quarter
Bathroom and Wellness	1,916	1,780
Tableware	670	558
	2,586	2,338

16. Financial Results

The financial results are itemized as follows:

in Euro '000	2008	2007
	1st quarter	1st quarter
Interest income	1,949	1,414
Interest expenses	-1,770	-1,315
Total net interest income	179	99
Interest from changes to the provisions for pensions
and other obligations	-2,139	-2,125
Other financial income	142	1
	-1,818	-2,025

Other Notes

17. Financial Instruments

The derivative financial instruments accounted for at fair value are reported in No. 7 if they have positive market values and in No. 12 if they have negative market values. Reclassifications between the individual valuation categories were not carried out in the first quarter. In the reporting period, there were neither changes to risk exposures faced by the Villeroy & Boch Group nor changes in the way in which risk is controlled and measured.

18. Events after the Balance Sheet Date

No significant events emerged up to the time the interim financial statements were released.

Mettlach, April 28th 2008

Manfred Finger Frank Göring Volker Pruschke