Villeroy & Boch’s revenue decreased in the first nine months of 2023

The German Group registered consolidated revenue of € 650.6 million, down 10.7% year on year (or -8.8% on a constant currency basis).

The Villeroy & Boch Group has announced its third-quarter results, which confirm a downturn in both revenue and profitability for the first nine months of 2023. Nominal consolidated revenue of € 650.6 million was down € 77.7 million or 10.7% year on year (-8.8% when adjusted for currency effects).

The negative result was largely due to unfavorable economic conditions.

Revenue in the region of EMEA (Europe, Middle East, Africa) declined by 13% (or € 76.4 million). This is due in particular to the weak performance in Central Europe, where revenue fell by 13.5 % (or € 32.9 million). By contrast, revenue in Southern Europe increased by 9.6% (or € 3.1 million). Overseas, revenue in China increased by 13.1% (or € 8.9 million), thanks chiefly to good project business. This limited the revenue decline overseas to 0.9% (or € 1.3 million).

EBIT in the first nine months of 2023 came to € 56.8 million, down 11.7% on the same period of the previous year (€ 64.3 million). The downturn in earnings due to revenue development was only partially offset by cost savings and income from currency hedges.

Revenue (on a constant currency basis) generated by the Bathroom & Wellness Division in the first nine months of 2023 was 11.5% lower than in the strong previous year (€ 506.3 million), due chiefly to economic factors. Nominal revenue of € 435.8 million was down 13.9% on the same period of the previous year. The downturn in revenue was observed in all business areas. It was particularly pronounced in the ceramic sanitary ware business (€ -39.9 million) due to the slowdown in Europe’s construction industry and in the wellness business (€ -14.4 million).

By contrast, new products such as toilets with new TwistFlush technology met with a positive market response. Thanks to the sustained strength of the company’s project business, on the other hand, Villeroy & Boch achieved substantial revenue growth in Asia with market-specific products including our ViClean shower toilets in particular.

The Bathroom & Wellness Division closed the first nine months of 2023 with an operating result (EBIT) of € 45.7 million (previous year: € 53.9 million). The downturn in earnings due to revenue development was only partially offset by falling procurement prices, especially for energy.

On a constant currency basis, the Dining & Lifestyle Division’s revenue in the first nine months of 2023 was also down 2.7 % year on year (previous year: € 219.5 million) as a result of economic developments. Nominal revenue of € 212.3 million declined by 3.3% or € 7.2 million compared to the same period of the previous year. In terms of revenue performance, project business with hotel and restaurant customers saw particularly strong growth of € 1.6 million on the back of pronounced focus on the high-end segment. Revenue generated in retail stores came to € 61.8 million, slightly higher than in the previous year.

E-commerce business saw a downturn in revenue (€ -8.0 million), again in line with the general trend in online retail. The Dining & Lifestyle Division recorded an operating result (EBIT) of € 12.1 million, slightly lower than in the previous year (€ 12.6 million).

In the first nine months of 2023 the Mettlach-based Group invested € 24.6 million in property, plant and equipment and intangible assets (previous year: € 18.6 million). The Bathroom & Wellness Division accounted for € 16.9 million, with the remaining € 7.7 million attributable to the Dining & Lifestyle Division.

Investment activity in the Bathroom & Wellness Division concentrated on pressure casting machines and a photovoltaic system in Hungary, a washbasin pressure casting system in Romania, a new vertical moulding machine in Belgium and new moulds for the wellness plant in the Netherlands. Investment in the Dining & Lifestyle Division mainly related to the modernisation and acquisition of new production facilities and pressing tools in Merzig and Torgau as well as the modernisation of our own retail stores. In addition, the location development project “Mettlach 2.0” was continued.

Given the further deterioration of conditions in the European construction industry in the third quarter of 2023 and negative currency effects, the Villeroy & Boch AG Management Board expects that the forecast range adjusted at the end of the first half of the year – with a reduction in consolidated sales (at previous year exchange rates) of 3% to 6% and operating EBIT of 5% to 10% – will narrow further to the lower range as a result of the sales and earnings development in the fourth quarter. Based on the revised targets, the return on net operating assets is expected to range between 23% and 25%.

The forecast for investments in property, plant and equipment and intangible assets remains unchanged at an expected € 50 million.

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