Interim report on the first quarter of 2019: First quarter characterised by non-recurring effects

• Consolidated revenue (€ 197.7 million) and operating result (€ 8.5 million) down on strong prior year quarter due to temporary effects in the Bathroom and Wellness Division
• Positive business performance in the Tableware Division
• Revenue and earnings targets for 2019 as a whole confirmed

Consolidated revenue: € 197.7 million

The Villeroy & Boch Group generated revenue of € 197.7 million in the first quarter of 2019. Excellent revenue growth in the Tableware Division (up 6.2 %) was offset by the weak start to the year in the Bathroom and Wellness Division, which was affected by temporary non-recurring effects. However, the significant upturn in incoming orders in the first three months of 2019 caused orders on hand to pick up by € 13.0 million to € 72.8 million against 31 December 2018. Of this figure, € 55.6 million related to the Bathroom and Wellness Division and € 17.2 million to the Tableware Division.

EBIT: € 8.5 million

EBIT fell by € 2.6 million to € 8.5 million in the first quarter of 2019 on account of declining revenue.

Division performance

The Bathroom and Wellness Division generated revenue of € 131.4 million in the first three months of the financial year (previous year: € 147.2 million). The € 15.8 million decline in revenue primarily reflects temporary non-recurring effects, as it was not possible in the reporting period to achieve the levels of the first quarter of 2018, which was exceptionally positive thanks to processing supply backlogs resulting from changing the central warehouse software at the end of 2017. These effects resulted in similar revenue declines in key markets in the EMEA region (Europe, Middle East, Africa), totalling a fall of 8.4 %. Abroad, changes to terms of payment brought about a shift in revenue, with an impact of € -5.4 million. Nonetheless, a considerable upturn in incoming orders makes the company confident about the further performance of the Bathroom and Wellness Division over the course of the year.

The Tableware Division achieved revenue of € 65.5 million in the first quarter, up 6.2 % on the prior year’s figure. While revenue declined in Russia (down 33.9 %) and northern Europe (down 8.8 %), revenue picked up sharply in key markets including Germany (up 6.7 %) and the US (up 28.3 %). In the US, this good performance was driven in particular by project business with hotels and restaurants. E-commerce business also performed well, climbing 22.9 % in the EMEA region.

Investment volume: € 4.2 million

The Villeroy & Boch Group invested € 4.2 million in the first three months (previous year: € 4.8 million), of which the Bathroom and Wellness Division accounted for € 3.6 million. This focused on investments in new facilities for ceramics factories in Thailand and France. Investments in the Tableware Division were essentially used for new facilities and modernisation measures at the production sites in Merzig and Torgau.

Outlook for 2019 as a whole

Due to the impact of non-recurring effects on business in the first three months and the return to growth in incoming orders, the Management Board of Villeroy & Boch AG is confident that the revenue and result forecast (rise of 3 % to 5 % in each case) can be achieved in 2019. This works on the company’s continued assumption of moderate global growth, even though momentum is slowing again at present. In particular, the company considers revised economic forecasts and increasing fears of a recession in the euro area as posing risks.

Regarding the sale of a former plant property in Luxembourg, which has the potential to generate high eight-figure earnings, Villeroy & Boch AG entered exclusive negotiations with an investor in February of this year and expect this to be completed in the second half of 2019.