Villeroy & Boch AG

Earnings Release • Oct 21, 2014

News Details

Corporate | 21 October 2014 08:00

Villeroy & Boch AG: Villeroy & Boch increases revenue and earnings / Targets for 2014 confirmed

DGAP-News: Villeroy & Boch AG / Key word(s): Quarter Results/Interim
Report

21.10.2014 / 08:00

---

Press Release
Mettlach, 21 October 2014

Interim report on the third quarter of 2014

Villeroy & Boch increases revenue and earnings / Targets for 2014 confirmed

* Consolidated revenue up 4.4 % year-on-year on a constant currency basis
(nominally by 2.9 % to Euro 558.8 million).

* Operating EBIT climbs 10.5 % year-on-year to Euro 20.0 million.

* Further tranche from sale of plant property in Sweden increases
non-recurring income from this project to Euro 3.2 million.

* Growth and earnings targets for 2014 as a whole confirmed.

Revenue development: up 4.4 % year-on-year (on a constant currency basis)

In the first nine months of the 2014 financial year, the Villeroy & Boch
Group increased its net revenue by 4.4 % to Euro 567.2 million on a
constant currency basis, i.e. assuming unchanged exchange rates as against
the previous year. Nominal consolidated revenue amounted to Euro 558.8
million, up 2.9 % on the same period of the previous year. The relatively
pronounced exchange rate effects were due in particular to the changes in
the Russian rouble, the Swedish krona, the Norwegian krone, the US dollar
and the Australian dollar.
Net revenue on the German domestic market rose by 3.0 % year-on-year to
Euro 160.8 million. Nominal revenue generated outside Germany climbed by
2.8 % to Euro 398.0 million.
Orders on hand amounted to Euro 54.9 million as at 30 September 2014, a
rise of Euro 9.6 million against 1 January of this year - with the Bathroom
and Wellness Division accounting for around 65 % of this.

Operating earnings (EBIT) improve 10.5 %

Operating EBIT climbed by Euro 1.9 million or 10.5 % in the first three
quarters of the current financial year to Euro 20.0 million. As at 30
September 2014, the implementation of further purchase agreements as part
of the property project at the Gustavsberg location in Sweden resulted in
non-recurring income of Euro 3.2 million - total operating earnings
therefore amounted to Euro 23.2 million.
However, as non-recurring income in the same period of the previous year
amounted to Euro 7.4 million, EBIT after three quarters was therefore down
Euro 2.3 million or 9.0 % on the previous year. The total income from the
Gustavsberg property transaction is still expected to amount to Euro 17
million.

Development in divisions

The Bathroom and Wellness Division generated revenue of Euro 362.2 million
on a constant currency basis in the first nine months of 2014, up by Euro
16.0 million or 4.6 % on the same period of the previous year. Nominal
revenue increased by 2.9 % year-on-year to Euro 356.1 million.
Business on the domestic market of Germany improved by 3.2 % in the
financial year to date. Other nominal revenue increases of note were
generated in the UK (up 12.5 %), BeNeLux (up 11.9 %) and Eastern Europe (up
9.3 %). Villeroy & Boch's key growth markets of China and Russia posted
gratifying increases of 37.7 % and 13.5 % respectively.
There was a significant drop in revenue of 47.6 % in Ukraine on account of
the political situation. Revenue declined, predominantly due to economic
effects, in Italy (down 17.8 %), France (down 10.2 %) and Denmark (down 9.3
%).

From January to September 2014, the Tableware Division generated revenue of
Euro 205.0 million on a constant currency basis, and was therefore up by
Euro 7.9 million or 4.0 % on the previous year. Nominal revenue improved by
Euro 5.6 million or 2.8 % to Euro 202.7 million.
The domestic market of Germany posted a solid revenue increase of 2.7 % in
the first nine months. Abroad, the good development of the first half of
the year in many countries continued in the third quarter as well.
Significant (nominal) revenue growth was generated in Poland (up 21.6 %),
Austria (up 19.7 %) and BeNeLux (up 11.8 %). Furthermore, revenue in the
Middle East (up 21.8 %) - Saudi Arabia especially - rose substantially.
Revenue was down by 8.7 % in the UK as a result of the closure of retail
outlets in particular, and by 16.3 % and 7.8 % in Japan and Italy
respectively on account of economic effects.
The performance of the new products presented at the relevant trade fairs
is still highly encouraging. Specifically, revenue from the new "Artesano
Provençal" and "La Classica" collections and the new "Winter Collage"
Christmas series is developing well. The consistently high level of
incoming orders also points to good Christmas business. Moreover, hotel
business posted a particular success with revenue growth of 16.3 % as
against the previous year.

Investment volume in Q1-3 2014: Euro 30.2 million

Villeroy & Boch invested Euro 30.2 million (previous year: Euro 10.5
million) in the first nine months of 2014, 87.1 % of which was accounted
for by the Bathroom and Wellness Division. In line with planning, the main
focus of investment was the construction of the new logistics and assembly
centre in Sweden. Investments also concentrated on the sanitary ware plants
in Mettlach (Germany) and Saraburi (Thailand). The Tableware Division
invested predominantly in the further expansion of its retail network. For
example, new or renovated retail outlets were opened in Lübeck (Germany),
Luxembourg, Marseille (France) and Wijnegem (Belgium).

Outlook for 2014 as a whole

"We still see our current economic situation as positive. The performance
in the first nine months is in line with our revenue forecasts," said Frank
Göring, CEO of Villeroy & Boch AG.
The company is assuming moderate economic growth for 2014 as a whole, which
will be slowed in the euro zone by the disappointing economic development
in France and Italy. Furthermore, the geopolitical unrest in Ukraine is
having a negative impact on the economy - there are further risks on the
financial and commodities markets.
Nevertheless, the forecast for the 2014 financial year is unchanged after
the third quarter. "We are still assuming an increase in consolidated
revenue of 3 % to 5 %. The significantly higher level of orders on hand
compared to the previous year gives us grounds for confidence," emphasised
Göring. As before, an improvement of more than 5 % is anticipated in
operating earnings.

Please find the complete Interim Report as a PDF-file for download here:
http://www.villeroyboch-group.com/en/investor-relations/reports.html

Further inquiry note:
Annette Engelke
Head of Press & Public Relations
Tel: (+49) 6864 81-1397
Fax: (+49) 6864 81-71331
Mail: presse@villeroy-boch.com

---

21.10.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

---

Language: English
Company: Villeroy & Boch AG
Saaruferstraße 1-3
66693 Mettlach
Germany
Phone: +49 (0)6864 81-0
E-mail: information@villeroy-boch.com
Internet: www.villeroy-boch.de
ISIN: DE0007657231
WKN: 765723
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart

End of News DGAP News-Service

292445 21.10.2014