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Interim report on the first half of 2016: Villeroy & Boch increases revenue and earnings/Goals for 2016 confirmed

Press release   •   Jul 20, 2016 08:24 BST

Villeroy & Boch increases revenue and earnings/Goals for 2016 confirmed

  •  Consolidated revenue up 3.0 % to € 398.6 million
  •  Revenue momentum increases in second quarter (+4.4 %)
  •  Operating EBIT improves by 7.0 % to € 16.8 million
  •  Growth and earnings targets confirmed for 2016 as a whole

Revenue development: +3.0 % year-on-year
The Villeroy & Boch Group increased its net revenue by 3.0 % year-on-year to € 398.6 million in the first half of the 2016 financial year. Revenue amounted to € 403.9 million (+4.4 %) on a constant currency basis, i.e. assuming unchanged exchange rates as against the previous year.

Net revenue in the Group’s domestic market of Germany climbed by € 8.3 million or 7.5 % to € 118.4 million. Revenue outside Germany was up by 1.2 % to € 280.2 million. Orders on hand improved by € 31.2 million compared to 1 January 2016 to € 94.5 million as at 30 June 2016, with the Bathroom and Wellness Division accounting for € 71.4 million of this figure.

Operating EBIT improves by 7.0 % to € 16.8 million
Operating EBIT rose by € 1.1 million or 7.0 % to € 16.8 million in the first six months of the financial year. As non-recurring income was not generated from the Gustavsberg real estate project in Sweden in the first half of 2016, operating EBIT is equal to total EBIT. Non-recurring income from this real estate project had amounted to € 1.0 million in the same period of the previous year (total EBIT: € 16.7 million). Income of a similar amount is not expected until later quarters this year. 

Development in the divisions
The Bathroom and Wellness Division generated revenue of € 269.1 million in the first half of 2016, an increase of 6.4 % on the previous year. On a constant currency basis, revenue rose by 8.2 %; significant negative exchange rate effects resulted from developments in the Russian rouble, the Norwegian krone and the Mexican peso.

On the Group’s domestic market of Germany, revenue increased by 12.6 % in the year to date to € 81.9 million, due in part to major demand for DirectFlush WCs. There was also significant growth in revenue in China (+32.9 %), the UK (+12.2 %) and Sweden (+10.1 %). Following a relatively weak previous year, France also posted an increase in revenue again of 2.3 %. Revenue in Russia was down by 24.8 % on account of the prolonged difficult political and economic conditions and the weakness of the rouble; revenue was in decline in Italy (-8.7 %) due to the weak construction industry.

The Tableware Division reported revenue of € 129.5 million in the first half of 2016. This corresponds to a decline in revenue of 3.3 %, though the figure for the previous year includes revenue from secondary brand business, which in 2016 is not expected until the second half of the year. On a constant currency basis, revenue contracted by 2.8 %; significant negative exchange rate effects resulted mainly from the development of the Australian dollar and pound sterling.

Tableware revenue on the domestic market in Germany amounted to € 36.6 million (-2.3 %). Revenue declines were mainly seen in the US (-8.7 %), the UK (-6.6 %) and Italy (-5.5 %). In particular, revenue increases were made possible thanks to strong project business with hotels and restaurants in China (+89.9 %). The division also achieved key improvements in revenue in the Eastern Europe region (+6.5 %) and the major Benelux (+5.2 %) and France (+1.1 %) markets. The company’s own e-commerce business performed well across all sales markets (+11.9 %).

Investment volume in first half of 2016: € 7.4 million
The Villeroy & Boch Group invested € 7.4 million in the first half of 2016 (previous year: € 7.5 million). At 73.0 %, more than two-thirds of the investment volume related to the Bathroom and Wellness Division, where the main areas of investment were new facilities and modernisation work at production sites in Germany, Hungary and Thailand. The Tableware Division also invested in new facilities for the Merzig plant in addition to the expansion and optimisation of retail activities.

Outlook for 2016 as a whole
The Villeroy & Boch Groupis still assuming moderate momentum for the economy as a whole in the financial year. The companyexpects that the economy in Europe, despite the uncertainty caused by political debates, such as the referendum on the UK leaving the EU, will remain robust thanks mainly to strong domestic demand. The difficult conditions in the Russian market environment due to the lingering recession are still seen as cause for concern.

“On the basis of the performance in the year to date, the high level of orders on hand and our market opinion, we are reiterating our revenue and earnings forecast for the year as a whole,” said Frank Göring, CEO of Villeroy & Boch AG. The company is therefore still forecasting an increase in consolidated revenue of between 3 % and 6 %. The operating result is expected to improve by between 5 % and 10 %.

Villeroy & Boch:

Villeroy & Boch is one of the world's leading premium brands for ceramic products. The family business, which was founded in 1748 and is headquartered in Mettlach/Germany, stands for innovation, tradition and exceptional style. As a renowned lifestyle brand, Villeroy & Boch offers products from the sectors Bathroom and Wellness and Tableware, and is active in 125 countries.

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