Villeroy & Boch : Interim Report March 2024

INTERIM REPORT

1 January to 31 March 2024

INTERIM REPORT

1 January to 31 March 2024

Villeroy & Boch consolidates March figures from Ideal Standard for the first time:

• Consolidated revenue increases by 20.8 % to € 277.1 million (previous year: € 229.3 million) due to the acquisition.
• At € 23.1 million, operating EBIT is up slightly by 0.4 % over the previous year.
• Total assets increase by € 620.8 million to € 1,717.0 million.

THE GROUP	1/1/2024	1/1/2023		Change		Change
AT A GLANCE	- 31/3/2024	- 31/3/2023
		in		in		in
		€ million		€ million		€ million		in %
Revenue	277.1	229.3	47.8	20.8
Revenue - Germany	74.2	66.8	7.4	11.1
Revenue - Abroad	202.9	162.5	40.4	24.9
Operating EBIT	23.1	23.0	0.1	0.4
Operating EBITDA	35.5	32.5	3.0	9.2
EBT	10.5	18.3	-7.8	-42.6
Group result	7.2	12.8	-5.6	-43.8
Return on net operating assets
(rolling)		23.3 %		24.8 %(1)		-		-1.5 PP
Investments (without leasing)	4.0	6.0	-2.0	-33.3
Investments "Leases"- IFRS 16	4.7	3.0	1.7	56.7
Employees
(FTEs as at end of period)		12,516 FTE		6,196 FTE		6,320 FTE	102.0

1. Return on net operating assets as at 31 December 2023

German Securities Code Numbers (WKN): 765 720, 765 723

ISIN: DE0007657207, DE0007657231

Villeroy & Boch AG • 66688 Mettlach • Germany

Phone: [phone]• Fax: [phone]

Internet:http://www.villeroyboch-group.com

Villeroy & Boch AG

2

INTERIM REPORT ON THE FIRST QUARTER OF 2024

INTERIM MANAGEMENT REPORT OF THE VILLEROY&BOCH GROUP

GENERAL CONDITIONS	FOR THE FIRST QUARTER OF 2024
OF THE GROUP		bilities taken over are included in the consoli-
The acquisition of Ideal Standard is one of the	Villeroy&Boch Group. All of the assets and lia-
most significant events in the history of Villeroy	dated statement of financial position.
& Boch. The effects on the Villeroy & Boch	The transaction was financed by existing cash
Group are explained in more detail in the follow-	and cash equivalents and the promissory note
ing management report and in the notes to the	loan that was issued.
consolidated financial statements, especially in	The significant changes are described in the fol-
the note on the basis of consolidation.			lowing passages of the Group management re-
						port.
As before, the operating business is broken down	Please also refer to the explanations in the notes
into the two divisions Bathroom&Wellness and	to the consolidated financial statements.
Dining&Lifestyle. The business activities of the
Ideal Standard companies are an excellent com-
plement to the activities of the Bathroom&Well-
ness Division. The reporting will therefore be	ECONOMIC REPORT
low this procedure.
combined in the Bathroom&Wellness Division
in the future. The segment reporting will also fol-
In terms of organisation, Ideal Standard will be	General economic conditions
managed directly by the CEO for the time being.
The moderate performance of the global econ-
SIGNIFICANT BUSINESS TRANSACTIONS -
also continuing to vary considerably from region
ACQUISITION OF IDEAL STANDARD			to region. While the robust growth in the US
						omy has continued in the first three months of
						the 2024 financial year, but with the momentum
Villeroy & Boch signed binding contracts on 18
September 2023 to acquire all of the operating	slowed slightly, the economy in the euro area re-
companies of	the Ideal Standard Group. The
mains in a phase of stagnation.
Ideal Standard shares were being sold by funds
Following the weak final quarter of last year, no
managed by the Anchorage Capital Group and
tangible signs of an economic revival can be seen
CVC Credit. The acquisition includes all operat-
in the Germany economy at the beginning of
ing Group companies, including the business ac-
2024. Germany is experiencing a noticeable
tivities in the Middle East/Africa that the Ideal
drop-off in comparison with other major Euro-
Standard Group previously operated through a
pean countries.
joint venture with Roots Group Arabia.
		The ongoing conflicts in Ukraine and the Middle
Ideal Standard is a	multinational provider	of
East continue to weigh on the global economy.
bathroom products.	The company	employs
The crisis in the Red Sea, for example, is having
around 7,000 staff around the world and oper-
an impact on shipping, supply chains and the en-
ates 11 production sites in Europe and the Mid-
vironment.
dle East.
					Encouragingly, inflation has weakened, which
The closing of the takeover was completed on 29
can be attributed to the effect that the measures
February 2024 after all antitrust approvals had
introduced to contain it are having an impact.
been issued. The current interim financial state-
ments thus include the business activities of the
Ideal Standard companies from 1 March in the
consolidated	income statement	of	the

Villeroy & Boch AG

3

INTERIM REPORT ON THE FIRST QUARTER OF 2024

Course of business and position of the Villeroy&Boch Group

Based on the past first quarter of the 2024 financial year, the Management Board of Vil- leroy&Boch AG still considers the economic position of the Group to be positive on the whole. We generated consolidated revenue (including licence income) of € 277.1 million in the first quarter of 2024, which is € 47.8 million or

1. % higher than the previous year as a result of acquisitions. Ideal Standard contributed reve- nue of € 57.1 million to consolidated revenue from 1 March 2024 here.
   We generated strong revenue growth in our main region of EMEA (Europe, Middle East, Af- rica) of 27.6 % or € 50.9 million, which can pri- marily be seen in the Western and Southern Eu- rope regions.
   We had to accept a decline in revenue in the APAC (Asia/Pacific) and Americas regions of

1. %, largely due to economic conditions in South Korea.

Incoming orders increased in the first quarter of 2024, rising by € 92.1 million as against 31 De- cember 2023 to € 202.0 million. They include orders worth € 69.8 million at Ideal Standard.

Orders on hand in the Bathroom&Wellness Division amounted to € 170.9 million (including Ideal Standard) set against € 96.6 million as at 31 December 2023. The organic growth of €

4.5 million results from the continued positive performance of the project business in Asia. Orders on hand in the Dining&Lifestyle Divi- sion amounted to € 31.1 million (31 December 2023: € 13.3 million). This increase was due in particular to the orders that have been already placed by our business customers for our Christ- mas range, which was presented at the Ambiente trade fair in Frankfurt.

We generated operating EBIT of € 23.1 million in the first quarter of 2024, up slightly by 0.4 % on the previous year (€ 23.0 million).

The non-operating result amounted to € -9.4 million (previous year: € -3.4 million) and primarily includes integration and project costs in

connection with the Ideal Standard acquisition. The result in the previous year essentially included project expenses and expenses from a write-down on an equity investment.

Operating earnings before interest, taxes, depre- ciation, and amortisation (operating EBITDA) in the first quarter of 2024 came to € 35.5 mil- lion, 9.2 % higher than in the previous year (€ 32.5 million). Depreciation and amortisation recognised here totalled € 12.4 million and was thus up slightly on the previous year's figure of € 9.5 million.

The Group's rolling return on net operating assets was 23.3 % as at 31 March 2024 (31 De- cember 2023: 24.8 %). The reason for the slight decline was the increase in net operating assets.

The following section contains further information on the development in the divisions, particularly with regard to revenue and earnings.

Course of business and position of the division

Bathroom&Wellness

The Bathroom&Wellness Division generated revenue of € 204.1 million in the first quarter of 2024, up 35.4 % on the previous year (€ 150.8 million) due to the acquisition. Ideal Standard generated revenue of € 57.1 million in the first month after it was consolidated. We have had to accept a slight decline in revenue of

2.5 %, adjusted for acquisitions, on account of the subdued performance of the building sector. We recorded a continued positive market re- sponse to our new products that use our Twist- Flush technology.

In terms of revenue performance, almost every business area - especially in the fittings business (€ +23.7 million) and the ceramics sanitary ware business (€ +22.0 million) - are reporting reve- nue growth.

From a regional perspective, it is primarily our main region of EMEA (Europe, Middle East, Af- rica) that has benefited from the acquisition with an increase in revenue of 42.5 % or € 52.3

Villeroy & Boch AG

4

INTERIM REPORT ON THE FIRST QUARTER OF 2024

million). In addition, we generated predominantly organic growth of 3.6 % in the APAC/Americas region.

The Bathroom&Wellness Division started the first quarter of 2024 with an operating profit (EBIT) of € 17.4 million, which is unchanged from the previous year's level (€ 17.4 million).

The rolling return on net operating assets declined to 23.9 % (31 December 2023: 24.9 %) as a result of the increase in net assets resulting from the acquisition and the fall in rolling operating earnings.

Dining&Lifestyle

The Dining&Lifestyle Division generated revenue of € 72.3 million in the first quarter of 2024, down 7.0 % on the previous year.

This arose primarily in the revenue from our bricks-and-mortar retail partners (€ -6.6 million or -24.9 %), where we have had to accept a relatively high decline in revenue driven in particular by an economic downturn in Korea and the continued weak economy in the US. In contrast, we generated revenue growth in our e-commerce business (€ 1.0 million or 5.6 %) and in our retail stores (€ 0.4 million or 1.8 %).

The Dining&Lifestyle Division recorded an operating result (EBIT) of € 5.7 million, slightly higher than the previous year (€ 5.6 million). The downturn in earnings due to revenue development was offset by cost savings that were achieved.

The rolling operating return on net assets was with 32.9 % slightly down from the level at 31 December 2023 (33.3 %) as a result of the decline in net assets and the lower rolling operating earnings.

Capital structure

Our equity increased as against the end of 2023 by € 5.4 million to € 393.6 million as at 31 March 2024.

The Group result generated in the first quarter of 2024 (€ +7.2 million) was the main contributor to this change.

The equity ratio (including non-controlling inter- ests) fell from 35.4 % as at the end of 2023 to

22.9 % as at 31 March 2024 on account of the significant increase in total assets following the acquisition of Ideal Standard.

Investments

We invested € 4.0 million in property, plant and equipment and intangible assets in the first quarter of 2024 (previous year: € 6.0 million). Of this figure, € 3.1 million (previous year: € 4.3 mil- lion) was attributable to the Bathroom&Well- ness Division and € 0.9 million (previous year:

• 1.7 million) was attributable to the Din- ing&Lifestyle Division.
  Investment activity in the Bathroom&Wellness Division concentrated on pressure casting sys- tems in Thailand and Hungary and new moulds for shower and bath tubs in Belgium and the Netherlands.
  Investment in the Dining&Lifestyle Division mainly related to the modernisation of the pro- duction facilities in Merzig and Torgau, the ac- quisition of new pressing tools and the moderni- sation of our own retail stores.
  The Group had obligations to acquire property, plant and equipment and intangible assets in the amount of € 14.9 million as at the end of the re- porting period (previous year: € 21.2 million).

Net liquidity

Taking into account our financial liabilities of

€ 417.1 million, the cash and bank balances of
-	1
€ 93.1 million	resulted in net liquidity of

€ 324.0 million as at 31 March 2024 (31 De- cember 2023: € 64.9 million). The large change is the result of the acquisition of Ideal Standard and the related purchase price pay- ment, which was partly financed by a promissory note loan that was issued.

We also have unused credit facilities of € 312.0 million at our disposal.

Villeroy & Boch AG

5

	INTERIM REPORT ON THE FIRST QUARTER OF 2024
Balance sheet structure			REPORT ON RISKS AND OPPORTUNITIES
Total assets amounted to € 1,717.0 million as at	The acquisition of Ideal Standard has not re-
the end of the reporting period	as against	sulted in any material changes in the risks and
€ 1,096.2 million as at 31 December 2023. The	opportunities. The complementary strengths of
significant increase in total assets of € 620.8 mil-	the two companies in terms of regional presence,
lion is essentially the result of the acquisition of	sales strategies and product and brand portfolios
Ideal Standard. Further details are discussed in	will increase the competitiveness of the
the section on the basis of consolidation in the	Villeroy & Boch Group. On the other hand, the
notes to the consolidated financial statements.	dependency on the construction industry has in-
The share of total assets attributable to non-cur-	creased, especially in Europe, on account of the
rent assets increased here to 52.3 % (31 Decem-	larger revenue volume in the Bathroom&
ber 2023: 26.2 %). This can be seen in particu-	Wellness division.
lar in the increase in intangible assets, which in-	Nevertheless, the risks and opportunities de-
cludes the goodwill produced from the Ideal	scribed in the 2023 annual report remain un-
Standard acquisition. This has to be regarded as	changed.
provisional until the purchase price allocation is	As before, all risk areas are subjected to a contin-
finalised, which is expected to be completed by	uous, focused review.
the end of September.
Current assets decreased	by € 80.0 million as	There is no evidence of any individual risks that
against 31 December 2023. This was mainly due	could endanger the continued existence of the
to the acquisition and is evident in the decrease	Group at this time.
in cash and cash equivalents (€ -281.3 million) as	OUTLOOK FOR THE CURRENT FINANCIAL
(€ +96.7 million).
a result of the payment of the purchase price,
which is offset by	an increase in	inventories
(€ +97.4 million)	and	trade	receivables
The largest changes on the equity and liabilities	The market environment remains characterised
YEAR
side from the end of 2023 are also the result of	by a high degree of uncertainty. This relates
above all to the further development of the con-
the acquisition.
			struction industry. A further risk factor remains,
Within the current liabilities (€ +268.0 million),
as before, a potential escalation of the conflicts
there were increases primarily in other current
in Ukraine and the Middle East.
liabilities (€ +76.4 million), in trade payables (€
+65.2 million), in tax payables (€ +59.9 million)	The Management Board of Villeroy&Boch AG
and in current financial liabilities (€ +53.3 mil-
continues to expect a significant increase in rev-
lion).
			enue, operating result (EBIT) and investments
Non-current liabilities increased by	a total of
due to acquisitions and thus confirms its forecast

€ 347.4 million, mainly due to the increase in fi-	for the full year 2024 made in connection with
nancial liabilities (€ +154.3 million) and pension
the annual financial statements.
provisions (€ +110.6 million).

Villeroy & Boch AG

6

INTERIM REPORT ON THE FIRST QUARTER OF 2024

Mettlach 14 May 2024

Gabriele Schupp

Dr Peter Domma

Esther Jehle

Georg Lörz

Dr Markus Warncke

Villeroy & Boch AG

7

INTERIM REPORT ON THE FIRST QUARTER OF 2024

CONSOLIDATED BALANCE SHEET

as of 31 March 2024 in € million

Assets			Notes	31/3/2024	31/12/2023
Non‐current assets
Intangible assets						452.7				33.4
Property, plant and equipment			1			296.6				188.8
Right‐of‐use assets			2			83.2				44.2
Investment property						5.1				4.8
Investment accounted for using the equity method						16.8				2.7
Other financial assets			3			44.0				13.2
						898.4				287.1
Other non‐current assets			6			37.8			0.1
Deferred tax assets						81.2				29.4
						1,017.4				316.6
Current assets
Inventories			4			326.5				229.1
Trade receivables			5			220.4				123.7
Other financial assets			3			16.8				23.0
Other current assets			6			27.3				12.3
Income tax receivables						15.5				17.1
Cash and cash equivalents			7			93.1				374.4
						699.6				779.6
Total assets					1,717.0		1,096.2
Equity and Liabilities			Notes	31/3/2024	31/12/2023
Equity attributable to Villeroy & Boch AG shareholders
Issued capital					71.9			71.9
Capital surplus					194.7			194.7
Treasury shares					-13.9			-13.9
Retained earnings					232.5			225.4
Revaluation surplus		8		-95.4			-93.7
					389.8			384.4
Equity attributable to minority interests					3.8		3.8
Total equity					393.6			388.2
Non‐current liabilities
Provisions for pensions					258.3			147.7
Non‐current provisions for personnel		9		12.5			11.4
Other non‐current provisions					44.4			29.0
Non‐current financial liabilities		10		305.5			151.2
Non‐current lease liabilities		11		67.5			31.9
Other non‐current liabilities		12		7.4			4.2
Deferred tax liabilities					33.7			6.5
					729.3			381.9
Current liabilities
Current provisions for personnel		9		9.0			17.1
Other current provisions					43.2			30.5
Current financial liabilities		10		111.6			58.3
Current lease liabilities		11		22.1			13.5
Other current liabilities		12		176.1			99.7
Trade payables					157.2			92.0
Income tax liabilities					74.9			15.0
					594.1			326.1
Total liabilities					1,323.4		708.0
Total equity and liabilities					1,717.0		1,096.2

Villeroy & Boch AG

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INTERIM REPORT ON THE FIRST QUARTER OF 2024

CONSOLIDATED INCOME STATEMENT

	for the period 1 January to 31 March 2024
	in € million				1/1/2024	1/1/2023
				Notes
				- 31/3/2024	- 31/3/2023
	Revenue			13			277.1	229.3
	Costs of sales						-161.9				-129.7
	Gross profit						115.2				99.6
	Selling, marketing and development costs			14			-73.2			-67.2
	General administrative expenses						-15.0				-11.2
	Other operating income and expenses						-13.3				-1.6
	Result of associates accounted for using the equity method						0.0				0.0
	Operating result (EBIT)						13.7				19.6
	Financial result			15			-3.2			-1.3
	Earnings before taxes						10.5				18.3
	Income taxes						-3.3			-5.5
	Group result						7.2				12.8
	Thereof attributable to:
	Villeroy & Boch AG shareholders						7.1				12.8
	Minority interests						0.1				0.0
	Group result						7.2				12.8
	Earnings per share										in €
	Earnings per ordinary share						0.24				0.46
	Earnings per preference share						0.29				0.51

During the reporting period, there were no share dilution effects.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the period 1 January to 31 March 2024

in € million

	1/1/2024	1/1/2023
	- 31/3/2024	- 31/3/2023
Group result			7.2	12.8
Other comprehensive income
Items to be reclassified to profit or loss:
Gains or losses on translations of exchange differences			-3.7				-0.4
Gains or losses on cash flow hedge			0.7				2.6
Deferred income tax effect on items to be reclassified to profit or loss			1.1				-0.8
Items not to be reclassified to profit or loss:
Actuarial gains or losses on defined benefit plans			0.1				0.0
Gains or losses on other value changes of securities			0.1				0.6
Deferred income tax effect on items not to be reclassified to profit or loss			0.0				0.0
Total other comprehensive income			-1.7				2.0
Total comprehensive income net of tax	5.5	14.8
Thereof attributable to:
Villeroy & Boch AG shareholders			5.4				15.0
Minority interests			0.1				-0.2
Total comprehensive income net of tax			5.5				14.8

Villeroy & Boch AG

9

INTERIM REPORT ON THE FIRST QUARTER OF 2024

CONSOLIDATED CASH FLOW STATEMENT

for the period 1 January to 31 March 2024

in € million

	1/1/2024	1/1/2023
		- 31/3/2024	- 31/3/2023
Group result	7.2	12.8
Depreciation of non‐current assets			10.5				11.1
Change in non‐current provisions			-3.2				-2.5
Profit from disposal of fixed assets			-0.1				-0.6
Change in inventories, receivables and other assets			19.8				8.9
Change in liabilities, current provisions and other liabilities	-74.6	-34.1
Other non‐cash income/expenses			52.6				1.5
Cash Flow from operating activities			12.2				-2.9
Purchase of intangible assets, property, plant and equipment	-4.0	-6.0
Investment in non‐current financial assets			-0.6				-1.1
Expenditure for acquisitions less cash and cash equivalents acquired			-414.6				-
Expenses for the acquisition of associated companies			-12.7				-
Proceeds from the disposal of financial assets			-1.1				-
Proceeds from the sale of subsidiary	7.1	-
companies and other business divisions
Proceeds from disposals of fixed assets			3.8				-0.4
Cash Flow from investing activities			-422.1				-7.5
Proceeds from the issue of promissory note loans	153.1	-
Payments for the repayment of financial liabilities			-18.0				-10.2
Cash repayments of lease liabilities			-6.3				-5.0
Dividends paid to minority shareholders			-0.2				-0.1
Cash Flow from financing activities			128.6				-15.3
Sum of cash flows		-281.3		-25.7
Balance of cash and cash equivalents as at 1 January	374.4	226.6
Net increase in cash and cash equivalents			-281.3				-25.7
Balance of cash and cash equivalents as at 31 March			93.1				200.9

Villeroy & Boch AG

10