Mettlach, 7 February 2019
2018 financial year:
Villeroy & Boch increases earnings by 7.6 %
Consolidated revenue rises by 2.0 %
The Villeroy & Boch Group increased its consolidated revenue by 2.0 % to EUR 853.1 million in the 2018 financial year. For the first time, this figure includes income from licence business, which was reported as other operating income in the previous year. On a constant currency basis and adjusted for licence, revenue growth amounted to 2.8 %. In particular, negative exchange rate effects resulted from the depreciation of the Swedish krona, the Russian rouble, the US dollar and the Chinese renminbi.
EBIT up 7.6 % on previous year
The Group's earnings before interest and taxes (EBIT) improved by 7.6 % to EUR 53.6 million in the 2018 financial year. This was above all thanks to the excellent revenue and earnings development in the Bathroom and Wellness Division and to effective cost management.
Group result and equity ratio
The improvement in Group result was especially strong, rising by 13.8 % to EUR 33.9 million. The main factors driving this were the positive operating performance and the lower tax rate compared to the previous year of 31.1 %.
The equity ratio likewise benefited from the positive business performance, climbing by 2.4 percentage points to 30.7 %.
Development in the divisions
The Bathroom and Wellness Division increased its revenue by 4.7 % to EUR 584.3 million in the 2018 financial year. On a constant currency basis, revenue was up by 6.2 %.
Revenue on the domestic European market grew by 0.4 % to EUR 453.7 million, or by 2.0 % on a constant currency basis.
In particular, revenue in Germany continued to rise at a higher level (+1.3 %). This growth was driven by strong demand for rimless DirectFlush WCs and thin-walled TitanCeram washbasins, and by recovering showroom business. The UK experienced a decline in revenue partly as a result of exchange rate effects (-7.3 %), while Southern Europe enjoyed an outstanding revenue performance (+7.6 %).
Revenue outside Europe increased by 22.8 % overall to EUR 130.1 million. The Asia-Pacific region again achieved strong growth of 33.4 %, bringing its revenue volume to EUR 100.1 million, thereby passing the 100-million-mark for the first time. As the most important growth market, China contributed greatly to this with a strong surge in revenue of 31.5 %. The performance there is characterised in particular by high demand for ViClean shower toilets.
The Tableware Division generated a revenue volume of EUR 266.2 million in the 2018 financial year, down 4.4 % on the previous year. The effects of currency changes and licences cancelled each other out almost entirely.
In particular, the development in revenue was influenced by the transition in the distribution model on various markets, the changes in pricing and discount policy that were initiated in the previous year and the optimisation of the shop network.
While revenue in Europe declined by 4.7 %, on the markets outside Europe revenue increased by 3.7 % in the US on a constant currency basis. However, the depreciation of the US dollar made for a decrease in revenue of 0.4 % in nominal terms.
Intensified e-commerce sales and marketing activities increased online revenue by 9.2 % across all markets. E-commerce activities now account for around 17 % of the Tableware Division's total revenue.
Orders on hand
Orders on hand amounted to EUR 59.8 million as at 31 December 2018. The Bathroom and Wellness Division accounted for EUR 48.7 million of orders on hand and the Tableware Division for EUR 11.1 million. The change as against the previous year (EUR 107.0 million) primarily relates to ceramic sanitary ware: Delivery times were reduced significantly thanks to investment, allowing customers to place their orders with less lead time. Orders on hand are therefore back at their long-term average.
Investments in property, plant and equipment and intangible assets amounted to EUR 43.6 million in the past financial year. The Bathroom and Wellness Division accounted for the majority of this at 86.5 %, focusing on the acquisition of new production facilities for ceramic sanitary ware plants in Germany and abroad. The Tableware Division invested mainly in new production facilities and the optimisation of its retail network.
At the General Meeting of Shareholders on 29 March 2019, the Supervisory Board and the Management Board will propose that the unappropriated surplus of Villeroy & Boch AG be used to distribute a dividend of EUR 0.60 per preference share and EUR 0.55 per ordinary share, three cents higher than in the previous year.
Assessment of the company's position
"I am delighted that we have increased our revenue and our result again in 2018. Even though we anticipate only moderate economic growth of the world economy in 2019, we regard the market environment for our company as being fundamentally intact. We therefore expect our consolidated revenue to rise by between 3 % and 5 %," said Frank Göring, CEO of Villeroy & Boch AG.
Operating EBIT is likewise forecast to grow by between 3 % and 5 % in 2019.
Please find the complete Consolidated Financial Statements and Group Management Report for the 2018 financial year as a PDF-file for download here:
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