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Interviews
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a special effect: The International Sanitary and Heating
Fair, ISH, is taking place every two years, recently in
March 2015. When the innovations, which had been
represented on the ISH, are going into production, then
this is leading to start-up costs which are not arising in
the following year, meaning 2016. For that reason, the
profitability is rising concerning the bath- and wellness-
segment.
A target range for the expected turnover is normally
announced by Villeroy. For 2015 it was 3 to 5%, the
result was 4.9%. For this year, the spectrum was
broadened by one percentage point to 3 to 6%. Why?
Despite all optimism the imponderables of our business
have even increased, especially in the emerging
countries.
Please a little more precisely.
Russia will remain a challenge in 2016. If the Rouble
depreciates even further – actually one Euro costs
around 80 Roubles – the business development will
become critical there. We don’t have an own production
in Russia, that means, costs in Euro will arise while
revenues will be earned in Rouble. For that, we have
already increased the prices there, but you cannot
continue that continuously. Further, the hedging-costs
are so high, that it does not add up. But let us be clear:
We are in a position to come through to lean periods in
Russia of several years. In 2015, we have made revenues
of 25 million Euro, of which 85% were for bath- and
wellness-products. In the long term we are regarding
this as a very promising market.
And China?
Last year, we have generated 27.7 million Euro in the
People’s Republic – without Hongkong. This is a rise
of 22% in comparison to 2014. More of 90% of the
revenue is accounted for by bath- and wellness-articles.
In relation to the group turnover, this represents a part
of 3.4%. China is a huge market which is still developing
very dynamically. But there, our sales volume is
vanishingly small regarding the market size. Therefore,
our target is to grow out of the niche existence.
But the Chinese economy situation shows first signs of
a slowdown. Is it also possible for Villeroy to live with
a significant lower rate of GDP growth of e. g. 6% in
comparison to former years?
It has to be noted that a growth of 6% is much more
than most countries can expect for 2016. And you have
to look at this relatively: When the GDP has grown by
14% in 2007, this is a lower increase than 6% today
regarding the GDP at that time. Although we are
cautiously optimistic concerning our China business
in 2016, it is difficult to assess our development there
caused by the growth slowdown and the turbulences on
the stock markets of Shanghai and Shenzhen.
How the revenue increase of 30 to 50 million Euro is to
be reached this year, then?
On the one hand, our optimism is based on the
extremely positive development around the turn of the
year, especially in the last two months of the previous
year business across the group - except Russia - ran
outstandingly. This could be continued. Further, our
range has been expanded by many new products which
are guided by current trends, e. g. “Barbecue”, “Pasta”
and “Pizza” in the segment of fine dining which will
record increasing revenues.
Where have been the Ebit-margins of the group and
the two business divisions ? Do you have long-term
objectives
?
The rate of return before interest and tax in comparison
to the revenue should reach 7% in the long-term. In
2015, it was at 5.2% group-wide. The margin of bath
and wellness should be at 10 % in the long-term, the
margin of fine-dining at 5%. In the previous year the
corresponding values ranged at 6.6 and 3.0%.
How severely Villeroy & Boch is affected by product
copies of China and other countries?
In my perception it decreased a bit. Probably due to
the fact, that in China the mentality concerning this
has changed. There, the instinct and the respect for
trade- and product-rights have increased. But in case
of copying products of the worldwide protected trade
mark Villeroy & Boch – partially these are very brazy
1:1-copies – we will not hesitate to take decisive action
with the support of attorneys at law, police and customs
duty. As an example, we let remove the corresponding
articles from the exhibition stand of the faker – we
cannot take a joke of that. In case of denying the copying
of our product, we would go to court.
Besides plagiates, the cheap-goods from Asia are
bothering European manufacturers. Also for that
reason, competitors had to file for insolvency. How
Villeroy is dealing with that?
I should open a little more the scope of my answer.