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NEWSLETTER Bathroom Newsletter


									  Bathroom Newsletter
                             November 2006
                                 TOPICS:                 August 2005

Poland:       ARMATURA KRAKOW to grow its revenue

Switzerland: GEBERIT 9-months net profit CHF 293.5 million vs. CHF 218.9
Germany:      DURAVIT determined to increase return on sales

     Netherlands: BURGBAD (Germany) buys ROMANCERAM
Poland:      CERSANIT buys 77.85% in Romanian Dutch sales agency
Denmark:     KUMA launches €2.0 million plant in Romania
     China:       ROCA invests €25 million in two new Chinese plants
Finland:     SANITEC to set up bathroom ceramics JV in Ukraine
     Poland:      CERSANIT II completes plant construction
USA:         MASCO posts lower profit and cuts forecasts again
     Bulgaria:    Spanish ROCA buys store in Bulgaria for €2 million
USA:         APOLLO MANAGEMENT L.P. signs agreement to acquire
                  Turnover up at HANSGROHE

    Switzerland: GEORGprofit 96% up (Jan – Sept50% Y/Y H1 2005
Germany:     BURGBAD net FISCHER net profit up 2006)

     Other:         CONSULT GB NEWS & New Study Links

  Special: ROMANIA
Poland: ARMATURA KRAKOW                          resulted in its nine-month net profit by
to grow its revenue                              34%.

Polish bathroom fittings manufacturer            The net profit rose to CHF 293.5 million
ARMATURA KRAKOW, that in 2005                    from CHF 218.9 million in the-on-year
completed the construction of a new plant        period, beating market estimates of around
at the costs of over €10.2 million, is set to    CHF 280 million. Sales rose by 11% to
report a 50% rise in its 2006 net profit to at   CHF 1.65 billion from CHF 1.49 billion.
least €764,000.
                                                 The company said it expects a favourable
Currently, the company manufactures over         business environment for the remainder of
100,000 taps and mixers every month. In          the year, anticipating a sales growth of
2005 the company introduced 50 new               10%, a substantial increase of operating
models of taps and mixers and as the only        margins and of earnings per share for the
company in Poland launched 100 years of          full year.
quarantine for some types of taps and
mixers.                                          Source: Dow Jones International News

The company’s turnover was €26.2 million
in 2005 and it increased export by around        Germany: DURAVIT determined
16% in 2005. The total sales value               to increase return on sales
were 50% higher in 2005 than in 2004. In
2006, the company expects its revenue to         11th October
grow by some 10% year-on-year to
between €29.3 and €30.6 million.                 DURAVIT, the German bathroom
ARMATURA KRAKOW also aims to                     specialist, expects a substantial turnover
further increase the share of exports in its     and profit increase for 2006. The company
overall sales to more than 20% in 2006.          saw turnover rise by almost 17% to €208
                                                 million last year and registered earnings
Source: Polish News Digest                       before interest and tax of almost €20
                                                 million. The company’s management is
                                                 optimistic for 2006 and expects turnover to
Switzerland: GEBERIT 9-months                    grow even more than last year.
net profit CHF 293.5 million vs.
                                                 When DURAVIT was founded 15 years
CHF 218.9 million                                ago, exports accounted for less than 5% of
                                                 turnover.    Nowadays,      the     exports
31st October
                                                 contribute 73% to group turnover. The
                                                 company is determined to further enter
Swiss sanitary systems maker GEBERIT
                                                 new markets abroad via major public
AG announced that growing demand and
the divestment of low-margin businesses
construction projects such as hotels or     30th October
                                            Danish bathtubs and kitchen accessories
DURAVIT is controlled by the Greinert       manufacturer KUMA has recently
family, which holds a majority stake of     launched a 2.0 million euro production
75%. Swiss bathroom specialist LAUFEN       facility in southern Romania.
owns the remaining 25% holding.
                                            The new plant produces 246 bathtubs
Poland: CERSANIT buys 77.85%
in Romanian ROMANCERAM                      The company plans to export 50% of the
                                            annual production to Denmark and other
5th October                                 Scandinavian countries, and sell the
                                            remainder in Romania, Italy, the Czech
Polish bathroom furniture and ceramic       Republic, the Netherlands and Germany.
tiles manufacturer CERSANIT bought
77.85% share in Romanian sanitary ware      KUMA Romania, whose products target
and ceramic products maker and              customers with medium and high incomes,
distributor ROMANCERAM for €2.31            distributes bathroom accessories to hotels
million.                                    managed by French hotel operator
                                            ACCOR in Romania.
CERSANIT agreed to invest some €1.9
million in ROMANCERAM development           KUMA, which has established its
by increasing its capital.                  Romanian operations in 1999, claims that
                                            its turnover from Romanian operations
CERSANIT specialises in production of       rose at an annual rate of 35 to 50%
ceramic tiles, as well as bathroom          between 2000 and 2005. The company
furniture and accessories, bathtubs and     reached a turnover of €5.0 million in
shower stalls.                              Romania in 2005.

ROMANCERAM is located in north-             Source: Romanian News Digest
eastern city of ROMAN. The company
also manufactures construction materials.
                                            Finland: SANITEC to set up
Source: Polish News Digest                  bathroom ceramics JV in Ukraine
                                            27th October
Denmark: KUMA launches €2.0
million plant in Romania                    Finnish bathroom ceramics company
                                            SANITEC Corporation signed on 26th
                                            October and agreement to set up a sanitary
ceramics joint venture in Ukraine with       USA: MASCO posts lower profit
local building materials manufacturer        and cuts forecast again
                                             31st October
SANITEC will own a 51% stake in the
venture, while UKRBUDMATERIALY               Building-products maker MASCO Corp.
will hold remaining 49%.                     announced its quarterly profit fell by 4%
                                             as the declining U.S. housing market cut
The two partners plan to restructure the     into orders, and lowered its full-year profit
bathroom ceramics factory of local           forecast for the second time this year.
sanitary ceramics maker SLAVUTSKIY
PLANT BUDFARFOR, part of the                 MASCO, a key supplier to homebuilders
UKRBUDMATERIALY GROUP. The                   and retailers such as HOME DEPOT Inc.
restructuring      will    include     the   and LOWE’s Cos., is one of many
modernisation of existing buildings and      companies with ties to housing that has
construction of adjacent production          been influence by weaker home
facilities. This refurbishment is expected   construction.
to improve the productivity and cost-
efficiency of the plant.                     Even though in September new home-
                                             builds rose 5.9% from August, they were
The plant, located in Slavuta in             down 17.9% in a year-on-year
northwestern Ukraine, currently produces     comparison.
2.5 million ceramic sanitary pieces
annually. The production range comprises     Source: Reuters News
over 50 types of ceramic bathroom
products. The new joint company will also
design new series of products for the
Ukrainian market, as well as for exports.
                                             USA: APOLLO MANAGEMENT
                                             L.P. signs agreement to acquire
SANITEC has 28 plants in Europe and its      JACUZZI Brands, Inc.
products are sold under a number of
brands, including ALBATROS, ALLIA,           11th October
IDO,     IFO,    KERAMAG,      KOLO,
KORALLE, LEDA, POZZI-GINORI,                 APOLLO Management L.P. announced
REVITA, SELLES, SPHINX AND                   that its affiliates have signed a definite
TWYFORD.                                     merger agreement to purchase JACUZZI
                                             BRANDS, Inc. in a transaction having a
Source: Finnish News Digest                  total value of $1.25 billion.

                                             The transaction, which is expected to close
                                             in the first quarter of 2007, will be
financed through a combination of equity      The company’s sales reached €55.8
and debt.                                     million, up 1 %.

APOLLO also announced that JACUZZI            Based on the positive development of
BRANDS’ Bath and Spa businesses               BURGBAD’s financial results in the third
(“JACUZZI BATH”), the global leader in        quarter and the first nine months of 2006,
branded bath, spa and shower products,        the management decided to upgrade its net
will become a standalone company,             profit forecast for the whole year to
retaining the JACUZZI name.                   between €4.0 million and €4.5 million.

APOLLO, founded in 1990, is a                 Source: Die Welt
recognised leader in private equity, debt
and capital markets investing.

JACUZZI BRANDS, Inc., through its
subsidiaries, is a global manufacturer and
distributor of branded bath and plumbing
products for the residential, commercial
and institutional markets. These include
whirlpool baths, spas, showers, sanitary
ware and bathtubs, as well as professional
grade drainage, water control, commercial
faucets and other plumbing products. It
products are marketed under various brand
names,          including       JACUZZI,

Source: Business Wire

Germany: BURGBAD net profit
96% up (Jan – Sept 2006)
24th October

German bathroom equipment maker
BURGBAD AG reached a €3.2 million net
profit in the first nine months of 2006, up
96% in a year-on-year comparison.
                        AUSTRIA BATHROOM SPECIAL

Background information

The territory of the Austrian Republic extends 294 km North to South and 573 km East to West.
With a surface area covering 83,859 km2, Austria is slightly smaller than Portugal or Hungary.
With a resident population of 8,225,609 inhabitants in 2005 and a population density of 98
inhabitants per km2, Austria may not be regarded as a densely populated country in comparison
with other European countries.

Thanks to its strategic position right in the centre of Europe, and due to historical reasons, Austria
makes the link between western Europe and central and eastern Europe. Austria has common
borders with Germany, Switzerland, Liechtenstein, Italy, Slovenia, Hungary, Slovakia and the
Czech Republic.

Administratively, Austria is divided into 9 administrative regions (Bundesl…nder).

The Austrian economy has maintained a positive position in Europe, however its GDP growth of
1.8% in 2005 is incomparable with its fast track neighboring countries in the east. The main
driving force of the recovery has been growing exports, mainly to new EU-countries. Since the
EU enlargement in 2004, Austria has been profiting most of all (out of the former EU-15
countries) from the existence of new export markets which is expected to increase Austrian GDP
by a further 0.2% annually in the next ten years. Since 2002, the share of Austria in terms of total
foreign direct investment into Central and Eastern Europe has been growing, with the Czech
Republic ranking first among the receivers. Moreover, some companies have relocated its
production into these countries due to lower labour costs and a better tax environment.

Austrian specific

According to a pan-European study, Austria is the country in Europe where people spend the
largest amount of money to equip and furnish their bathrooms. According to the industry, one of
the reasons is that the bathroom industry as a whole, in co-operation with wholesalers and
installers, has done its best from the very beginning to promote bathroom products and turn the
bathroom into a room to live in. Austria is also the country with the highest number of
showrooms (Badausstellungen) per capita. For sanitary products alone, there are about 800
showrooms in Austria, and many installers have their own showroom.
The 2005 Market

In 2005, the Austrian bathroom market enjoyed growth, driven mainly by growing renovation
and modernisation activities. All sectors, except taps and mixers, have recorded growth compared
to 2004.

The major trend has been the disappearance of the middle segment and the bi-polarisation
towards cheap products (mainly imports to DIY chains) on one side and high end products on the
other side.

The Austrian sanitary market is characterised by the overwhelming presence of foreign suppliers,
and in particular German and Italian companies. There are indeed few domestic manufacturers of
bathroom products, however, the trend is towards closing them down and relocating production
to low cost countries or to existing plants abroad to achieve economies of scale.

The number of DIY stores in Austria has been growing strongly in the past 10 years (partly due
to joining of EU). As a result, the Austrian DIY market is already over saturated, as the density
of DIY outlets is among the highest world-wide (Austria has the highest number of square metres
of sales area for building products in the world). Due to this, many Austrian DIY chains are
getting into financial difficulties and it is expected that the total number of stores will decline in
the future. There are currently some 2,350 DIY stores in Austria with around 16,800 employees
and annual turnover of €2.1 billion. There is a strong trend towards megastores. BAUMAX is
the Austrian leader with 30% market share (based on retail area).

                     If you want to receive more information regarding
                       our Austrian Bathroom report, please email our
                                      country manager.

                   For general information, please send us an email as

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