DGAP-News: Villeroy & Boch AG / Key word(s): Final Results Villeroy & Boch AG: Villeroy & Boch in the 2014 financial year 12.02.2015 / 12:00 --------------------------------------------------------------------- Press Release Mettlach, 12 February 2015 Villeroy & Boch in the 2014 financial year: * Consolidated revenue up 4.0 % on a constant currency basis, nominal revenue up 2.8 % to Euro 766.3 million. * Operating EBIT improves by 6.1 % to Euro 38.4 million. * Non-recurring income of Euro 4.8 million realised in connection with property project in Sweden (previous year: Euro 7.0 million), resulting in total EBIT of Euro 43.2 million. * Consolidated net income increases year-on-year to Euro 24.3 million (previous year: Euro 23.9 million). * Return on net operating assets up from 12.0 % to 13.0 %. Consolidated revenue up 4.0 % on a constant currency basis In the 2014 financial year, the Villeroy & Boch Group increased its revenue by 4.0 % on a constant currency basis, i.e. applying prior-year exchange rates. Revenue increased by Euro 21.0 million or 2.8 % in nominal terms to Euro 766.3 million. As in the previous years, development in the Group's home market of Germany was robust, with revenue rising by Euro 6.0 million or 2.8 % year-on-year to Euro 218.8 million. In the rest of Europe, the Group recorded substantial revenue growth in the Netherlands (+13.4 %), Belgium (+10.4 %) and Austria (+8.3 %) in particular. By contrast, there was a downturn in revenue in France (-7.4 %) and Italy (-7.0 %), largely as a result of economic factors. Revenue in Eastern Europe increased by 3.8 % to Euro 69.0 million. Despite the strained situation, revenue in Russia, one of Villeroy & Boch's key growth markets, rose by 7.4 % in nominal terms and by as much as 22.7 % in local currency. However, revenue in the comparatively small Ukrainian market fell by 49.2 %. Outside Europe, business in the Asia/Pacific/Africa growth region developed positively (+12.7 %). The encouraging revenue performance in China (+28.1 %) was responsible for this to a large extent. Operating result up 6.1 % year-on-year, non-recurring income from property project in Sweden: Euro 4.8 million The operating result (EBIT) improved by 6.1 % to Euro 38.4 million in the 2014 financial year. The Group's earnings strength was positively impacted by productivity and quality improvements in production and the optimisation of procurement activities. EBIT also benefited from revenue growth and an improvement in the quality of revenue thanks to a corresponding improvement in the product, price and country mix. These effects were also reflected in the gross margin, which rose by 1.1 percentage points year-on-year to 44.6 %. Taking into account the non-recurring income of Euro 4.8 million from the sale of the plant property in Gustavsberg (Sweden), consolidated EBIT amounted to Euro 43.2 million, meaning that EBIT remained essentially unchanged year-on-year despite real estate income being Euro 2.2 million lower. Consolidated net income improved slightly by 1.7 % to Euro 24.3 million. Development in the divisions In the 2014 financial year, the Bathroom and Wellness Division recorded revenue growth of 4.6 % on a constant currency basis. Revenue increased by Euro 13.3 million or 2.9 % in nominal terms to Euro 469.3 million. Revenue in Germany rose by 3.2 %, not least thanks to the strong performance of the bathroom furniture business once again. Within Europe, business in the Baltic States (+28.6 %), the United Kingdom (+16.2 %) and the Netherlands (+12.6 %) also saw an extremely encouraging development. Despite the weakness of the rouble, year-on-year revenue growth in Russia amounted to 11.4 % in nominal terms and as much as 30.9 % in local currency. There was less satisfactory development in Ukraine (-50.2 %) and the economically weak markets of Italy (-15.6 %) and France (-10.0 %), where the housing construction volume that is important for the sanitary ware sector declined in 2014 for the third year in succession. The operating result (EBIT) increased by around 4.7 % to Euro 29.1 million as a result of productivity and quality improvements in production, systematic cost management in the area of administration, and increased and higher-quality revenue. The Tableware Division increased its revenue by 3.1 % on a constant currency basis. Revenue increased by Euro 7.7 million or 2.7 % in nominal terms to Euro 297.0 million. Business in Germany was extremely robust, with year-on-year revenue growth of 2.3 %, while the highest growth rates in Western Europe were generated in the Netherlands (+15.7 %), Austria (+10.3 %) and Sweden (+9.9 %). Lower revenue was recorded in the United Kingdom (-6.9 %), France (-3.3 %) and Italy (-3.1 %) in particular. Outside Europe, the outstanding performers were China (+56.6 %) and South Korea, where revenue almost quadrupled to more than Euro 2 million thanks to a new market cultivation model. Across all markets, intensified sales and marketing activities paid off in the hotel and restaurant sector (+12.6 %) in particular. Revenue growth, higher revenue quality and improved cost structures in the areas of production and administration meant that EBIT in the Tableware Division also increased by 10.7 % to Euro 9.3 million. Orders on hand, operating cash flow and net liquidity all increased Orders on hand amounted to Euro 51.4 million at 31 December 2014, up Euro 6.1 million on the previous year. Of this figure, Euro 36.5 million related to the Bathroom and Wellness Division and Euro 14.9 million to the Tableware Division. In 2014, the net cash flow from operating activities again improved by Euro 19.3 million year-on-year to Euro 50.9 million. This was primarily due to the reduction in inventories and the increase in trade payables. Meanwhile, net liquidity rose by Euro 6.7 million to Euro 15.8 million. In addition to the lower level of inventories, this was due to the net income for the period and the cash inflow from the sale of the plant property in Sweden. Dividend The Management Board and the Supervisory Board will propose to the General Meeting of Shareholders on 27 March 2015 that the unappropriated surplus of Villeroy & Boch AG be used to distribute a dividend in the amount of Euro 0.44 per preference share and Euro 0.39 per ordinary share; once again, this is Euro 0.02 more than in the previous year in each case. Investments At Euro 44.6 million, investments in property, plant and equipment and intangible assets in the 2014 financial year were well above the prior-year level of Euro 26.4 million. At 84.5 %, the majority of investment activities related to the Bathroom and Wellness Division. The largest investment projects were the construction of a new logistics and assembly centre in Gustavsberg (Sweden) and the installation of a combined heat and power plant at the Mettlach site (Germany). Assessment of the company's position "2014 was a good year for Villeroy & Boch. We increased our operating result for the fifth year in succession and revenue grew as well. Encouragingly, both divisions contributed to this development," commented Frank Göring, CEO of Villeroy & Boch AG. The company expects the global economy to see slight growth in 2015 on the back of only moderate momentum. "We want to build on our good results for 2014 and increase our consolidated revenue by between 3 % and 5 % once again," Göring continued. "We expect our operating result to be slightly higher than the forecast revenue growth, and hence in excess of 5 %." Please find the annual financial report 2014 on http://www.villeroyboch-group.com/en/investor-relations/annual-report-2014 .html Further inquiry note: Annette Engelke Head of Press & Public Relations Tel: (+49) 6864 81-1397 Fax: (+49) 6864 81-71331 Mail: [email protected] --------------------------------------------------------------------- 12.02.2015 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: [email protected] 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 --------------------------------------------------------------------- 322095 12.02.2015