VILLEROY & BOCH AG INTERIM REPORT
1 January to 30 September 2023
INTERIM REPORT
1 January to 30 September 2023
- Consolidated revenue in first nine months down 8.8 % year on year at € 650.6 million (on a constant currency basis).
- EBIT of € 56.8 million, 11.7 % lower than in previous year (€ 64.3 million).
- Full-yearrevenue and earnings forecast for 2023 at lower end of forecast range.
THE GROUP - | 1/1/2023 | 1/1/2022 | Change | Change | ||||
AT A GLANCE | - 30/9/2023 | - 30/9/2022 | ||||||
in | in | in | ||||||
€ million | € million | € million | in % | |||||
Revenue | 650.6 | 728.3 | -77.7 | -10.7 | ||||
Revenue - Germany | 183.8 | 213.3 | -29.5 | -13.8 | ||||
Revenue - Abroad | 466.8 | 515.0 | -48.2 | -9.4 | ||||
On a constant currency basis | 664.0 | 728.3 | -64.3 | -8.8 | ||||
EBIT | 56.8 | 64.3 | -7.5 | -11.7 | ||||
EBT | 53.9 | 63.3 | -9.4 | -14.8 | ||||
Group result | 37.7 | 44.3 | -6.6 | -14.9 | ||||
Return on net operating assets | ||||||||
(rolling) | 25.7 % | 31.5 % (1) | - | -5.8 PP | ||||
Investments (without leasing) | 24.6 | 18.6 | 6.0 | 32.3 | ||||
Investments "Leases"- IFRS 16 | 8.5 | 15.4 | -6.9 | -44.8 | ||||
Employees | ||||||||
(FTEs as at end of period) | 6,080 FTE | 6,408 FTE | -328 FTE | -5.1 |
- Return on net operating assets as at 31 December 2022
German Securities Code Numbers (WKN): 765 720, 765 723
ISIN: DE0007657207, DE0007657231
Villeroy & Boch AG • 66688 Mettlach • Germany
Phone: +49 6864 81-1227• Fax: +49 6864 81-71227
Internet:http://www.villeroyboch-group.com
Villeroy & Boch AG | 2 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023
INTERIM MANAGEMENT REPORT OF THE VILLEROY&BOCH GROUP
GENERAL CONDITIONS | FOR THE THIRD QUARTER OF 2023 | ||
OF THE GROUP | million was € 77.7 million or 10.7 % below the | ||
The basic information on the Group as pre- | The nominal consolidated revenue of € 650.6 | ||
sented in the 2022 Group management report | same period of the previous year. | ||
remains unchanged. Information on changes in | |||
the consolidated Group and on research and | Revenue in the region of EMEA (Europe, Middle | ||
development costs can be found on page 15 and | East, Africa) declined by 13.0 % or € 76.4 mil- | ||
in note 15 to the consolidated financial state- | lion. This is due in particular to the weak | ||
ments. | performance in Central Europe, where we had to | ||
ECONOMIC REPORT | accept a decline of 13.5 % or € 32.9 million. By | ||
Overseas, we increased our revenue in China by | |||
contrast, revenue in Southern Europe increased | |||
by 9.6 % or € 3.1 million. | |||
General economic conditions | 13.1 % or € 8.9 million, thanks chiefly to good | ||
project business. This limited the revenue de- | |||
Global economic growth slowed overall, with | cline abroad to 0.9 % or € 1.3 million. | ||
industrialised countries experiencing a more | |||
pronounced slowdown and growth rates far | Incoming orders as at 30 September 2023 was | ||
lower than the average in recent years. | € 128.5 million, € 8.8 million below the level as | ||
Europe especially is feeling the effects of signifi- | at 31 December 2022, due to the declining de- | ||
cantly lower consumer spending and a downturn | velopment of order intake in the first nine | ||
in residential construction in particular. | months of the current financial year. | ||
The German economy fared worse than the | Orders on hand in the Bathroom&Wellness | ||
eurozone on account of high inflation and weak | Division amounted to € 105.9 million (31 De- | ||
global economic performance. | cember 2022: € 116.9 million). The lower level | ||
of incoming orders in Europe due to the eco- | |||
Course of business and position of the | nomic downturn was offset by an increase from | ||
the continued positive development of project | |||
Villeroy&Boch Group | |||
business in China. | |||
Based on the past nine month of the year, the | |||
Orders on hand in the Dining&Lifestyle Divi- | |||
Management Board of Villeroy&Boch AG still | |||
sion amounted to € 22.6 million (31 December | |||
considers the economic position of the Group to | |||
2022: € 20.4 million) and increased mainly due | |||
be positive on the whole. However, economic | |||
to orders already placed for our Christmas range. | |||
development remains a source of considerable | |||
uncertainty. | We generated EBIT of € 56.8 million in the first | ||
Our consolidated revenue (including licence | nine months of 2023, 11.7 % below the previous | ||
year (€ 64.3 million). The downturn in earnings | |||
income) adjusted for currency effects, i.e. using | |||
due to revenue development was only partially | |||
the same exchange rates as for the previous year, | |||
offset by cost savings and income from currency | |||
in the first nine months of 2023 was 8.8 % be- | |||
hedges. | |||
low the same period of the previous year, largely | |||
due to economic conditions. Negative currency | The non-operating result of | € -1.0 million | |
effects resulted primarily from the Chinese yuan | |||
and the Swedish krona. | included in EBIT comprises income from the | ||
partial recognition of the gain on the disposal of | |||
our former plant property in Luxembourg, | |||
Villeroy & Boch AG | 3 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023
which was largely offset by slightly higher expenses in connection with a write-down on an equity investment and project expenses related to the acquisition of Ideal Standard.
The Group's rolling return on net operating assets decreased to 25.7 % as at 30 September 2023 (31 December 2022: 31.5 %). This was due to the increase in rolling net operating assets, especially inventories, and the reduction
in rolling operating earnings.
COURSE OF BUSINESS AND POSITION OF THE DIVISIONS
Bathroom&Wellness
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 mil- lion), 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 aeas. It was particularly pronounced in our ceramic sanitary ware business (€ -39.9 mil- lion) due to the slowdown in the construction industry in Europe and in our wellness business (€ -14.4 million), where revenue from outdoor hot tubs declined as consumers became more reluctant to invest. Nevertheless, we noticed a positive market response to our new products, such as toilets with new TwistFlush technology. Thanks to the sustained strength of our project business, however, we achieved substantial revenue growth in Asia with market-specific products including our ViClean shower toilets in particu- lar.
The Bathroom&Wellness Division therefore closed the first nine months of 2023 with an operating result (EBIT) of € 45.7 million (previ- ous year: € 53.9 million). The downturn in earnings due to revenue development was only partially offset by falling procurement prices, especially for energy.
The rolling return on net operating assets declined significantly to 23.3 % (31 December 2022: 35.6 %) as a result of the lower operating result and the increase in rolling net operating assets.
Dining&Lifestyle
On a constant currency basis, the Dining&Life- style Division's revenue in the first nine months of 2023 was also down 2.7 % year on year (pre- vious year: € 219.5 million) as a result of economic developments. Nominal revenue of
-
212.3 million declined by 3.3 % or € 7.2 mil- lion compared to the same period of the previous year.
In terms of revenue performance, our project business with hotel and restaurant customers saw particularly strong growth of € 1.6 million on the back of our pronounced focus on the high- end segment. Revenue generated in our retail stores came to € 61.8 million, slightly higher than in the previous year. Our e-commerce business saw a downturn in revenue (€ -8.0 mil-
lion), again in line with the general trend in online retail.
The Dining&Lifestyle Division recorded an operating result (EBIT) of € 12.1 million, slightly below the previous year (€ 12.6 million).
The rolling return on net operating assets decreased to 31.5 % (31 December 2022:
35.4 %) as a result of increased rolling net operating assets.
Capital structure
Our equity increased by € 6.3 million as against the end of 2022, amounting to € 378.8 million as at 30 September 2023. The main changes were the net profit for the period (€ +37.7 mil- lion) and the dividend distribution for 2022 (€ -31.1 million).
At 41.9 %, our equity ratio (including non-controlling interests) was 3.9 percentage points higher than in the previous year (31 December 2022: 38.0 %).
Villeroy & Boch AG | 4 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023
Investments
We invested € 24.6 million in property, plant and equipment and intangible assets in the first nine months of 2023 (previous year: € 18.6 mil- lion). 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 Nether- lands.
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.
The Group had obligations to acquire property, plant and equipment and intangible assets in the amount of € 18.2 million as at the end of the reporting period (previous year: € 22.9 million).
Net liquidity
Taking into account our financial liabilities of € 75.5 million, the cash and bank balances of € 175.8 million resulted in net liquidity of
-
100.3 million as at 30 September 2023
(31 December 2022: € 141.2 million). The decline in our net liquidity is mainly due to the distribution of the dividend for the past financial year (€ 31.1 million) and the increase in our net operating assets, in particular inventories.
We also have unused credit facilities of € 274.0 million at our disposal.
Balance sheet structure
Total assets amounted to € 904.6 million as at the end of the reporting period as against
- 980.2 million as at 31 December 2022, a decrease of € 75.6 million.
The share of total assets attributable to non-current assets increased by 2.0 percentage points to 31.3 % (31 December 2022: 29.3 %).
Current assets decreased by € 78.9 million as against 31 December 2022, mainly as a result of
the decrease in | cash and | cash equivalents |
(€ -50.8 million), | current | financial assets |
(€ -25.0 million) and trade receivables (€ -15.9 million), which was partly offset by a increase in inventories (€ 11.7 million).
On the equity and liabilities side of the statement of financial position, the biggest changes as against the end of 2022 were within current liabilities (€ -70.4 million), with mainly a reduction in other current liabilities (€ -38.9 million) and trade payables (€ -19.7 million). Non-current liabilities decreased by a total of € 12.7 mil- lion, mainly due to the reduction of pension provisions (€ -4.5 million) and other non-current liabilities (€ -4.5 million).
REPORT ON RISKS AND OPPORTUNITIES
The risks and opportunities described in the 2022 annual report are unchanged. As pre- viously, a regular, focused re-examination of all risk areas is continuously performed. The continuing relaxation of the procurement markets and the resulting decrease in purchase prices, especially for energy, have further reduced the risks in this regard. By contrast, the consequences of the ongoing slowdown in the European construction industry could intensify further.
There is no evidence of any individual risks that could endanger the continued existence of the Group at this time.
Outside of our operating business, we believe there is further earnings potential to be generated from the development and marketing of our property in Luxembourg that is no longer required for operating purposes in addition to the income recognised in the second quarter of 2023.
Villeroy & Boch AG | 5 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023 OUTLOOK FOR THE CURRENT FINANCIAL
YEAR
The market environment remains characterised by an unusually high degree of uncertainty. This relates in particular to the continued development of the construction industry and the negative impact of the further rise in interest rates on the propensity to invest. Adverse effects could also result from a renewed escalation of the trade dispute and the political conflict between the US and China.
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 3.0 % to 6.0 % and operating EBIT of 5.0 % to 10.0 % - will narrow further to the lower range as a result of the sales and earnings development in the fourth quarter.
The return on net operating assets is expected to be between 23 % and 25 % due to the new targets.
The forecast for investments in property, plant and equipment and intangible assets remains unchanged at an expected € 50 million.
Mettlach 17 October 2023
Frank Göring | Dr Peter Domma | Esther Jehle |
Georg Lörz | Gabriele Schupp | Dr Markus Warncke |
Villeroy & Boch AG | 6 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023
CONSOLIDATED BALANCE SHEET
as of 30 September 2023 in € million | 30/9/2023 | 31/12/2022 | ||||||||||
Assets | Notes | |||||||||||
Non‐current assets | ||||||||||||
Intangible assets | 33.2 | 33.3 | ||||||||||
Property, plant and equipment | 1 | 177.6 | 175.4 | |||||||||
Right‐of‐use assets | 2 | 38.1 | 41.3 | |||||||||
Investment property | 4.8 | 4.6 | ||||||||||
Investment accounted for using the equity method | 2.8 | 2.4 | ||||||||||
Other financial assets | 3 | 26.7 | 29.8 | |||||||||
283.2 | 286.8 | |||||||||||
Other non‐current assets | 6 | 5.7 | 3.0 | |||||||||
Deferred tax assets | 31.3 | 31.5 | ||||||||||
320.2 | 321.3 | |||||||||||
Current assets | ||||||||||||
Inventories | 4 | 250.1 | 238.4 | |||||||||
Trade receivables | 5 | 113.5 | 129.4 | |||||||||
Financial assets | 3 | - | 25.0 | |||||||||
Other current assets | 6 | 26.8 | 30.4 | |||||||||
Income tax receivables | 13.8 | 9.1 | ||||||||||
Cash and cash equivalents | 7 | 175.8 | 226.6 | |||||||||
580.0 | 658.9 | |||||||||||
Assets held for sale | 4.4 | - | ||||||||||
Total assets | 904.6 | 980.2 | ||||||||||
Equity and liabilities | Notes | 30/9/2023 | 31/12/2022 | |||||||||
Equity attributable to V & B AG shareholders | ||||||||||||
Issued capital | 71.9 | 71.9 | ||||||||||
Capital surplus | 194.2 | 194.2 | ||||||||||
Treasury shares | -14.5 | -14.5 | ||||||||||
Retained earnings | 202.2 | 195.8 | ||||||||||
Revaluation surplus | 8 | -78.7 | -78.7 | |||||||||
375.1 | 368.7 | |||||||||||
Equity attributable to minority interests | 3.7 | 3.8 | ||||||||||
Total equity | 378.8 | 372.5 | ||||||||||
Non‐current liabilities | ||||||||||||
Provisions for pensions | 122.4 | 126.9 | ||||||||||
Non‐current provisions for personnel | 9 | 12.0 | 13.0 | |||||||||
Other non‐current provisions | 10 | 17.6 | 18.8 | |||||||||
Non‐current financial liabilities | 11 | 75.0 | 75.0 | |||||||||
Non‐current lease liabilities | 12 | 27.9 | 29.2 | |||||||||
Other non‐current liabilities | 13 | 3.9 | 8.4 | |||||||||
Deferred tax liabilities | 5.7 | 5.9 | ||||||||||
264.5 | 277.2 | |||||||||||
Current liabilities | ||||||||||||
Current provisions for personnel | 9 | 13.7 | 17.5 | |||||||||
Other current provisions | 10 | 30.1 | 28.4 | |||||||||
Current financial liabilities | 11 | 0.5 | 10.4 | |||||||||
Current lease liabilities | 12 | 10.6 | 12.7 | |||||||||
Other current liabilities | 13 | 104.2 | 143.1 | |||||||||
Trade payables | 79.7 | 99.4 | ||||||||||
Income tax liabilities | 21.3 | 19.0 | ||||||||||
260.1 | 330.5 | |||||||||||
Liabilities held for sale | 1.2 | - | ||||||||||
Total liabilities | 525.8 | 607.7 | ||||||||||
Total equity and liabilities | 904.6 | 980.2 |
Villeroy & Boch AG | 7 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023
CONSOLIDATED INCOME STATEMENT
for the period 1 January to 30 September 2023
in € million
Notes | 1/1/2023 | 1/1/2022 | ||||||||
- 30/9/2023 | - 30/9/2022 | |||||||||
Revenue | 14 | 650.6 | 728.3 | |||||||
Costs of sales | -371.3 | -426.4 | ||||||||
Gross profit | 279.3 | 301.9 | ||||||||
Selling, marketing and development costs | 15 | -193.5 | -196.0 | |||||||
General administrative expenses | -33.4 | -33.7 | ||||||||
Other operating income and expenses | 3.9 | -8.3 | ||||||||
Result of associates accounted for using the equity method | 0.5 | 0.4 | ||||||||
Operating result (EBIT) | 56.8 | 64.3 | ||||||||
Financial result | 16 | -2.9 | -1.0 | |||||||
Earnings before taxes | 53.9 | 63.3 | ||||||||
Income taxes | 17 | -16.2 | -19.0 | |||||||
Group result | 37.7 | 44.3 | ||||||||
Thereof attributable to: | ||||||||||
Villeroy & Boch AG shareholders | 37.5 | 44.0 | ||||||||
Minority interests | 0.2 | 0.3 | ||||||||
37.7 | 44.3 | |||||||||
EARNINGS PER SHARE | in € | |||||||||
Earnings per ordinary share | 1.39 | 1.64 | ||||||||
Earnings per preference share | 1.44 | 1.69 |
During the reporting period there were no share dilution effects.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period 1 January to 30 September 2023
in € million
1/1/2023 | 1/1/2022 | ||||||
- 30/9/2023 | - 30/9/2022 | ||||||
Group result | 37.7 | 44.3 | |||||
Other comprehensive income | |||||||
Items to be reclassified to profit or loss: | |||||||
Cash flow hedge | 3.6 | 2.4 | |||||
Gains or losses on translations of exchange differences | -2.8 | -5.9 | |||||
Deferred income tax effect on items to be reclassified to profit or loss | -1.4 | 1.1 | |||||
Items not to be reclassified to profit or loss: | |||||||
Actuarial gains or losses on defined benefit plans | -0.1 | 54.4 | |||||
Other valuation results | 0.7 | -3.9 | |||||
Deferred income tax effect on items not to be reclassified to profit or loss | 0.0 | -16.3 | |||||
Total other comprehensive income | 0.0 | 31.8 | |||||
Total comprehensive income net of tax | 37.7 | 76.1 | |||||
Thereof attributable to: | |||||||
Villeroy & Boch AG shareholders | 37.5 | 75.7 | |||||
Minority interests | 0.2 | 0.4 | |||||
Total comprehensive income net of tax | 37.7 | 76.1 |
Villeroy & Boch AG | 8 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023
CONSOLIDATED INCOME STATEMENT
for the period 1 July to 30 September 2023
in € million
Notes | 1/7/2023 | 1/7/2022 | ||||||||
- 30/9/2023 | - 30/9/2022 | |||||||||
Revenue | 14 | 212.8 | 238.0 | |||||||
Costs of sales | -124.9 | -138.6 | ||||||||
Gross profit | 87.9 | 99.4 | ||||||||
Selling, marketing and development costs | 15 | -61.0 | -62.3 | |||||||
General administrative expenses | -10.9 | -11.0 | ||||||||
Other operating income and expenses | 1.7 | -3.4 | ||||||||
Result of associates accounted for using the equity method | 0.4 | 0.3 | ||||||||
Operating result (EBIT) | 18.1 | 23.0 | ||||||||
Financial result | 16 | -1.0 | 0.1 | |||||||
Earnings before taxes | 17.1 | 23.1 | ||||||||
Income taxes | 17 | -5.2 | -6.9 | |||||||
Group result | 11.9 | 16.2 | ||||||||
Thereof attributable to: | ||||||||||
Villeroy & Boch AG shareholders | 11.8 | 16.1 | ||||||||
Minority interests | 0.1 | 0.1 | ||||||||
11.9 | 16.2 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period 1 July to 30 September 2023
in € million
1/7/2023 | 1/7/2022 | ||||||
- 30/9/2023 | - 30/9/2022 | ||||||
Group result | 11.9 | 16.2 | |||||
Other comprehensive income | |||||||
Items to be reclassified to profit or loss: | |||||||
Cash flow hedge | 0.0 | -0.1 | |||||
Gains or losses on translations of exchange differences | 0.9 | -3.8 | |||||
Deferred income tax effect on items to be reclassified to profit or loss | 0.0 | 0.3 | |||||
Items not to be reclassified to profit or loss: | |||||||
Actuarial gains or losses on defined benefit plans | 0.0 | 15.3 | |||||
Other valuation results | 0.0 | -0.6 | |||||
Deferred income tax effect on items not to be reclassified to profit or loss | 0.0 | -4.6 | |||||
Total other comprehensive income | 0.9 | 6.5 | |||||
Total comprehensive income net of tax | 12.8 | 22.7 | |||||
Thereof attributable to: | |||||||
Villeroy & Boch AG shareholders | 12.5 | 22.7 | |||||
Minority interests | 0.3 | 0.0 | |||||
Total comprehensive income net of tax | 12.8 | 22.7 |
Villeroy & Boch AG | 9 |
INTERIM REPORT ON THE THIRD QUARTER OF 2023
CONSOLIDATED CASH FLOW STATEMENT
for the period 1 January to 30 September 2023
in € million
1/1/2023 | 1/1/2022 | ||||||
- 30/9/2023 | - 30/9/2022 | ||||||
Group result | 37.7 | 44.3 | |||||
Depreciation and attribution of non‐current assets | 33.2 | 30.1 | |||||
Change in non‐current provisions | -10.8 | -5.9 | |||||
Profit from disposal of fixed assets | -10.6 | -3.0 | |||||
Change in inventories, receivables and other assets | -5.6 | -63.7 | |||||
Change in liabilities, current provisions and other liabilities | -47.3 | 16.9 | |||||
Other non‐cash income/expenses | 2.2 | 5.4 | |||||
Cash flow from operating activities | -1.2 | 24.1 | |||||
Purchase of intangible assets, property, plant and equipment | -24.6 | -18.6 | |||||
Investment in non‐current financial assets | -4.2 | -1.1 | |||||
Cash receipts from disposals of financial assets | 25.2 | 1.9 | |||||
Cash receipts from disposals of fixed assets | 8.1 | - | |||||
Cash flow from investing activities | 4.5 | -17.8 | |||||
Change in financial liabilities | -9.8 | -4.7 | |||||
Cash payments for the principal portion of the lease liabilities | -12.9 | -13.8 | |||||
Dividend paid to minority shareholders | -0.3 | -0.2 | |||||
Dividend paid to shareholders of Villeroy & Boch AG | -31.1 | -25.8 | |||||
Cash flow from financing activities | -54.1 | -44.5 | |||||
Sum of cash flows | -50.8 | -38.2 | |||||
Balance of cash and cash equivalents as at 1 Jan | 226.6 | 264.1 | |||||
Net increase in cash and cash equivalents | -50.8 | -38.2 | |||||
Balance of cash and cash equivalents as at 30 Sept | 175.8 | 225.9 |
Villeroy & Boch AG | 10 |
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Villeroy & Boch AG published this content on 20 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 October 2023 06:08:05 UTC.
