DGAP-News: Villeroy & Boch AG: Coronavirus crisis leads to lower revenue and earnings

Press Release
Mettlach, 20 July 2020

Interim report on the first half-year of 2020:
Villeroy & Boch: Coronavirus crisis leads to lower revenue and earnings

• Consolidated revenue down 13.4 % year-on-year at € 340.7 million
• Operating result (EBIT) declines significantly to € -10.0 million (previous year: € 15.5 million)
• Net liquidity still high at € 82.4 million
• Full-year forecast updated
• Decline in revenue of not more than -10 % expected in 2020
• Operating result for first six months will be more than offset in the second half of the year but down significantly year-on-year overall

Revenue development: 13.4 % below previous year

The Villeroy & Boch Group generated consolidated revenue of € 340.7 million (including licence income) in the first half of 2020, down € 52.5 million or 13.4 % on the previous year; this was largely due to the weak second quarter as a result of the coronavirus pandemic. The downturn in revenue in the Tableware Division (-21.7 %) was significantly more pronounced than in the Bathroom and Wellness Division (-9.7 %), with the two divisions each seeing a decrease of € 26 million in absolute terms. The second quarter in particular was dominated by the coronavirus crisis, with total revenue declining by € 37.2 million or 19 %.

With incoming orders picking up again in June, orders on hand developed positively, increasing by € 46.1 million compared with 31 December 2019 to total € 90.9 million as at 30 June 2020. € 66.5 million (31 December 2019: € 35.3 million) of this figure relates to the Bathroom and Wellness Division and € 24.4 million (31 December 2019: € 9.5 million) to the Tableware Division.

Operating EBIT declines to € -10.0 million

Owing to the slump in demand as a result of the coronavirus crisis and the plant shutdowns and restrictions initiated, the Group closed the first half of 2020 with operating EBIT of € -10.0 million. After reporting a profit of € 4.3 million in the first quarter of 2020, the operating result declined by € 21.3 million year-on-year in the second quarter.

Development in the divisions

The Bathroom and Wellness Division generated revenue of € 245.4 million in the first half of 2020 (previous year: € 271.6 million), down 9.7 % on the previous year. While the coronavirus pandemic still only affected Asia in the first quarter, with the division's revenue declining by 4.3 % as a result, the impact of the crisis intensified in the second quarter of 2020. The Bathroom and Wellness Division generated revenue of € 119.6 million in this quarter, down 14.7 % year-on-year (previous year: € 140.2 million). The reduction in revenue in the first half of the year was mainly attributable to the ceramic sanitary ware (-11.9 %) and wellness (-11.6 %) business areas. This was offset by a gratifying increase in revenue of 0.7 % in the fittings business area. In the second quarter, business for Villeroy & Boch proved particularly problematic in the countries that were hardest hit by the pandemic and that imposed stricter lockdown measures (UK -61.8 %; Italy -58.4 %; France -37.6 %; China -28.7 %). By contrast, business development was positive in less hard-hit countries such as Germany (+1.5 %), the Netherlands (+6.9 %) and Sweden (+4.1 %). The Group expects the revenue situation to improve in the second half of 2020, particularly as a result of the increase in incoming orders since June.

The Tableware Division generated revenue of € 93.9 million in the first half of 2020, down 21.7 % year-on-year (previous year: € 120.1 million). The significant reduction in revenue is due to the officially ordered worldwide closure of Villeroy & Boch sales outlets and the global slump in demand as a result of the coronavirus crisis. Following a downturn of -14.5 % in the first quarter of 2020, the coronavirus-related reduction in revenue intensified in the second quarter, particularly in April and May, totalling -30.5 %. The negative revenue development in the first half of the year affected all sales channels except e-commerce, which achieved gratifying growth in revenue of 26.0 %. By contrast, revenue at Villeroy & Boch retail stores fell by 34.4 %. Revenue from business with retail outlet partners declined by 21.3 %. Project business with hotel and restaurant clients was also extremely hard hit by the pandemic, with revenue falling by -47.0 % in the first half of 2020.

Investments

The Group invested € 7.1 million in intangible assets and property, plant and equipment in the first half of 2020 (previous year: € 10.0 million). The Bathroom and Wellness Division accounted for € 4.8 million, with the remaining € 2.3 million attributable to the Tableware Division. In the Bathroom and Wellness Division, new facilities for the sanitary ware plants in Thailand and Hungary were acquired in particular. Investment in the Tableware Division mainly included the maintenance and modernisation of the logistics centres in Merzig and new acquisitions for production in Merzig.

Outlook for 2020 as a whole

As public life around the world is still being impacted by the coronavirus pandemic, the second half of the year will also be subject to economic risks that are difficult to predict. However, the Management Board of Villeroy & Boch AG sees the recent upturn in incoming orders as a positive sign for the second half of the year and expects to be able to limit the year-on-year revenue shortfall for 2020 as a whole to less than -10 %. The Management Board also expects to be able to offset the loss in operating EBIT in the first half of the year and report positive earnings for the year as a whole, albeit at a considerably lower level than in the previous year.

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


Further inquiry note:
Katrin May
Head of PR
Tel: (+49) 6864 81-2714
Mail: [email protected]

or

Janna Knörck
Corporate Communications
Tel: (+49) 6864 81-2896
Mail: [email protected]