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Grohe_Status_Quo_06.03.07_EN by gegeshandong

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									PRESS RELEASE


GROHE: Efficient and global


Success factors for a lifestyle premium brand


GROHE – Enjoy Water®: a global brand which cannot be stopped.
Grohe AG is growing – at double-digit rates and sustainably.
From 2005 to 2006, sales increased by twelve percent, from EUR
838 to EUR 939 million. In the past fiscal year, Grohe AG
achieved EBITDA of EUR 171 million, thus increasing operative
results by more than eleven percent.


David J. Haines, CEO of Grohe AG: "In 2006, we succeeded in
expanding our position as Europe’s largest and worldwide leading
brand of faucets, showers and sanitary systems. There is growth
in all sales regions and product categories and we are very
satisfied that despite the dramatic increase of raw material prices,
we have achieved such good results and thus secured the future
of the company for the long term.”


Capital market financing


This success is also evident elsewhere. Since January 2007,
GROHE has been financed up to 60 percent by the capital market.
The company negotiated a preferred secured loan for EUR 800
million, which was 2.5 times oversubscribed. “We were largely
able to redeem our bank loan and, due to the refinancing, we have
more flexibility for additional investments in corporate growth,”
according to David Haines.

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An independent advisory opinion created in the run-up to the
private equity law by request of the Federal Finance Ministry of
Germany investigated private equity investments in general and
the example of GROHE in particular. This opinion confirms the
strength of Grohe AG: the result: GROHE is an example of the
successful restructuring of a medium-sized German company and
it can now, under its own power, advance the globalisation of the
brand and thus assure the company’s future in the long term.


Measures for success


An important success factor is the GROHE product philosophy,
which makes high demands of its products. For GROHE, this
philosophy means a perfect balance of quality, technology and
design. Only this way is a product truly a GROHE product.


Another success factor is innovation as a driver of growth.
Expenditures for research and development have increased more
than 16 percent since 2003. With an annual innovation rate of 25
percent, GROHE has regenerated its product line and orientated
itself optimally to the needs of its customers and the market.
Therefore it is no wonder that in 2006, 40 percent of sales were
achieved with products which are younger than three years. And in
2007, GROHE will continue to build on its power of innovation -- at
this year's ISH, among other things, GROHE will celebrate the
world premiere of the absolute design highlight GROHE Ondus.
                                                           ®
The new premium lifestyle collection in GROHE StarLight
chrome, mysterious Velvet Black or glossy Moon White is unique:
it breaks the boundaries of pure minimalism and entices

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interaction – both in its mechanical two-handle variant and as an
ultra-modern digital bath element.


No success without a clearly-defined direction. At GROHE, this
means lean mentality as a holistic approach of management. For
GROHE, value orientation is essential; this means that sustainable
value should be created and waste avoided. To achieve this,
processes must be synchronised and structures optimised in order
to avoid overlaps and use resources optimally. This is a consistent
and consecutive process.


David Haines: “Lean mentality is our way of realising earnings
potential on all levels. This way, we secure our future in the long
term, both in Germany and as a global brand."


Forecast for 2007


In the future, the goal of GROHE is to offer the most innovative
and market-attuned product portfolio possible. Therefore, in the
next 24 months, GROHE will focus particularly on brand,
innovation and additional increases in efficiency. The global
GROHE brand policy will focus, together with our partners in the
three-level sales path – wholesale and trade – consistently on
consumers.


06.03.2007


For further details, please contact
Dr. Ulrike Heuser-Greipl
Head of Public & Investor Relations
Tel.: +49 (0)2372/93-27 110
E-mail: ulrike.heuser-greipl@grohe.com


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