Villeroy & Boch in the 2004 Business Year:
– consolidated sales rise 3.7% after structural adjustments
– operating result (EBIT) of Euro 33.8 mill. again clearly positive
– dividends increase to Euro 0.37 per individual ordinary-share certificate and Euro 0.42 per individual preference-share certificate
When compared with prior-year figures of Euro 948.6 mill., Group sales recorded an absolute rise of 1.2% to Euro 959.9 mill.. Following structural adjustment, consolidated sales rose 3.7%. The Villeroy & Boch Group recorded sales increases in virtually all foreign markets. Again accounting for roughly 70% of total sales, the share of foreign sales remained stable and was thus able to compensate for the slightly reduced domestic sales. Against the background of persistently weak domestic demand and declining levels of capital spending on new construction, when compared with prior-year figures, domestic sales in the Villeroy & Boch Group fell by a minimal 0.6% to a total of Euro 285. 7 mill..
A clear improvement was recorded in the Villeroy & Boch Group operating result (EBIT), which rose from Euro -17.7 mill. to Euro 33.8 mill. This positive trend is strengthened even more by the increased financial results, allowing the result from ordinary operations (EBT) to rise Euro 54.5 mill. from Euro -30.8 mill. in 2003 to Euro 23.6 mill. The Euro 16.7 mill. results for the year after taxes are clearly higher than those of Euro -25.4 mill. in the previous year.
This increased result is to be attributed above all to the rise in contribution margins and the cuts made in production costs per unit. Effects can be seen here essentially from the production conversions initiated at the tableware factories in Merzig and Luxembourg in the previous year, and also from the improved utilisation and specialisation of factory capacity in the Bathroom and Wellness Division.
As the result in 2004 improved greatly in comparison with prior-year figures, the Management Board and Supervisory Board propose a dividend which is higher than that of the previous year, namely Euro 0.42 per individual preference-share certificate and Euro 0.37 per individual ordinary-share certificate. This constitutes a dividend increase of 40% per individual preference-share certificate and 48% per individual ordinary-share certificate.
Divisions Sales in the Bathroom and Wellness Division rose from Euro 410.6 mill. to Euro 421.0 mill. Compared with prior-year figures, the operating result (EBIT) increased Euro 14.7 mill. to total Euro 26.0 mill. A contribution was made towards this improved performance by both the Wellness and the Bathroom and Kitchen Business Segments.
Tableware Division sales rose 11.0% in 2004, bringing the total to Euro 317.1 mill. In addition to the slight, 1.3% increase in domestic sales, it was primarily the 15.2% sales increase secured in foreign markets which helped the Division achieve its record sales level. The result (EBIT) improved considerably from Euro 1.4 mill. to Euro 20.2 mill.. Wendelin von Boch commented on this improvement as follows: “The capital expended to automate our tableware factories is beginning to show its effects. The technological quantum leap has brought about a higher degree of efficiency and a clear rise in productivity. A considerable contribution towards this result was also made by the internationally-strong demand for innovative tableware design.”
Compared with prior-year figures Tile Division sales fell 3.2% from Euro 229.1 mill. to Euro 221.8 mill., after structural adjustments to exclude the effect of divestments. The operating result (EBIT) rose Euro 18.0 mill. to total Euro -12.4 mill.. Consideration must be given here, however, to the special expenses of Euro 17.4 mill. incurred in the previous year for restructuring measures.
Net Liquid Assets Increased As of December 31st 2004 liquid assets rose Euro 14.3 mill. in the Villeroy & Boch Group, from Euro 37.0 mill. to Euro 51.3 mill.. The liabilities to banks and notes payable totalled Euro 4.8 mill., and are clearly below the prior-year level of Euro 38.9 mill.. At the end of the business year, net liquidity, therefore, rose to Euro 46.5 mill., as compared with Euro -1.9 mill. in 2003.
Slight Decrease in Number of Persons Employed After adjustments have been made for part-time workers, the number of persons employed in the Villeroy & Boch Group, decreased 11.5%, from 10,254 to 9,074.
As the economic outlook remains strained, an easy 2005 business year is not expected for Villeroy & Boch, who still, however, aims to improve its consolidated result. Owing to the divestments carried out in the Tile Division in 2004, it is not expected that consolidated sales in the 2005 business year will exceed those of the prior year.
1st Quarter of 2005 Compared with the prior-year period, sales experienced a decline of 6.5% in the first quarter of 2005, the greatest contribution being made towards this decline by the Tile Division and Wellness Business Segment. Tableware Division sales and sales in the Bathroom and Kitchen Business Segment, however, were only slightly below the prior-year level.
Despite this sales decline, the Villeroy & Boch Group expects the result in the first quarter of 2005 to be only slightly lower than that of the previous year.