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Bathroom Newsletter NEWSLETTER November 2006 BATHROOMS TOPICS: August 2005 Poland: ARMATURA KRAKOW to grow its revenue Switzerland: GEBERIT 9-months net profit CHF 293.5 million vs. CHF 218.9 million TOPICS: Germany: DURAVIT determined to increase return on sales Netherlands: BURGBAD (Germany) buys ROMANCERAM Poland: CERSANIT buys 77.85% in Romanian Dutch sales agency VELBERT 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 Germany:JACUZZI BRANDS, INC 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 COUNTRY SPECIAL: AUSTRIA 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 airports. 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 daily. 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 UKRBUDMATERIALY GROUP. 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, SYNDANCE, ZURN and ASTRACAST. 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 well
"NEWSLETTER Bathroom Newsletter"