Bathroom September 2010

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1 International Market Strategy Topics Austria Egypt India Russia Slovakia World World BAUMAX Increased Its Profit LECICO Q2 Profit Hit by Warehouse Fire RAK CERAMICS Plans 2nd Plant ONNINEN Express Offices Project Deemed Promising BAUMAX Opens 15th Shop in Slovakia DURAVIT Investing Despite Crisis GROHE Grows Strongly and Continues to Invest Monthly Special Europe The European Bathroom Reports Published International strategic market research and consultancy on building product and related markets

2 Austria: BAUMAX Increased Its Profit BAUMAX managed to increase its revenue in H by 2.2% to 315 million, despite the unfavourable weather conditions in Austria and despite the fact that the sector in general grew only by 1.8%. BAUMAX operates 147 outlets in nine countries, of which 67 are located in Austria. Source: APA - Austria Presse Agentur Egypt: LECICO Q2 Profit Hit by Warehouse Fire Egyptian sanitary ware and ceramics manufacturer LECICO posted a decline in second-quarter revenue and net profit, hit by costs from a fire at one of its export warehouses. LECICO exports a third of its sanitary ware including toilets and sinks and has a significant presence in UK and France. The firm posted net profit of EGP 25.7 million ( 3.3 million) for the second quarter of 2010, a 15% decline from a year earlier. Revenue was EGP million ( 32.9 million) for the quarter, a drop of 6%. The fire caused damage worth EGP 70 million ( 9 million), the firm said in June. The company said an increase in energy prices for non energy-intensive industries in Egypt from 1 st July would raise LECICO's costs and it would increase those higher costs and currency fluctuations. It said it was concerned about potential overcapacity with new entrants into the Egyptian ceramics market, but added that it expected to see growth in export volumes to the Middle East and Europe from the third quarter onwards. Source: Daily News Egypt 2

3 India: RAK CERAMICS Plans 2nd Plant RAK CERAMICS, multinational and the world's largest tile manufacturer with global sales of over million, plans to invest nearly 34.1 million over the next seven years to set up its second plant near Ahmedabad, with an initial capacity to manufacture 10,000 m 2 of tiles a day. The company currently manufactures 11 million m 2 or 5.5 million pieces of sanitary ware a year at its Andhra Pradesh plant. Source: India Business Journal Russia: ONNINEN Express Offices Project Deemed Promising The ONNINEN chain is established by the Russian division of the Finnish distributor of plumbing fixtures, ventilation and electrical equipment. The first office was opened in Moscow. The project entails opening four stores in Russian cities, including St. Petersburg, until the end of According to DIY trading house PETROVICH (St. Petersburg and Leningrad region), ONNINEN should include products of various manufacturers into its range to increase competitiveness. Opening of one outlet costs about RUB 6-8 million ( 153, ,827), of which RUB 2 million is for equipment purchase, RUB 4-6 million will be invested into creation of trading stock. Source: Kommersant - Sankt-Peterburg 3

4 Slovakia: BAUMAX Opens 15th Shop in Slovakia BRG Consult Newsletter BAUMAX is continuing its expansion in Slovakia. In the beginning of August the group opened its fourth building materials store in the Bratislava, the capital of Slovakia. This is also the 15 th shop in Slovakia. The new store in Bratislava Lamac with a surface area of 14,000 m 2 biggest BAUMAX store in Slovakia. and 105 employees is the BAUMAX has now extended its permanently low price concept to Slovakia. The decision was announced at the opening of the new store in Bratislava, headquarters for Slovakia and the Czech Republic. The premises are directly adjacent to the new DIY store. The staff will be responsible for around 40 outlets in the two countries with regard to procurement, product range selection, marketing and distribution. The company is reacting to the impact of the financial and economic crisis on the consumer behaviour of the population in central and eastern European countries. Last year it introduced the permanently low price concept into Croatia. Source: APA - Austria Presse Agentur 4

5 World: DURAVIT Investing Despite Crisis BRG Consult Newsletter After doubling sales in a period of five years before 2008, DURAVIT was forced to halt growth in 2009 and recorded a decline in sales for the very first time because of the global economic crisis. On the international markets, both within and outside the EU, sales in the group as a whole declined in the single to double digit range. In Germany, DURAVIT AG recorded a slight decline in sales. Overall, group sales fell by 12.6% and, in 2009, totalled million. Despite the downturn in sales, in 2009 the bathroom manufacturer with headquarters in Hornberg in the Black Forest, Germany, still succeeded in implementing a substantial package of future investments: DURAVIT completed construction of its new factory in India, opened showrooms in Egypt and Tunisia and extended the central warehouse in Achern, Germany, to include a completely new high-bay warehouse. With the foundation of its own sales company in Australia, DURAVIT also invested in a local presence with a view to the entire Oceanic region. At the same time it also established a sales company in South Africa. In addition to a new, complete range of ceramics, in 2009, DURAVIT launched its first sauna on the market as well as pools and ceramic kitchen sinks. DURAVIT also kept the personnel structures stable and did not scale them down in line with the downturn. Source: Gulf Industry Worldwide 5

6 World: GROHE Grows Strongly and Continues to Invest GROHE achieved respectable growth in the first half of Consolidated sales increased by 24% to 490 million. Earnings before interest, taxes, depreciation and amortisation rose by 51% to 97 million. GROHE is planning to invest roughly 1.3 million in the expansion of the new Research and Development Centre in Hemer, which will be equipped with state-of-the-art future technology. The R&D Division, which is partly still based in Menden, will move to Hemer and be concentrated there. Having invested more than 25 million in the German plants over the past years, GROHE will further strengthen its German base through this new Research and Development Centre. Moreover, GROHE will hire another 300 people for its global sales organisation. Within the next 12 months, GROHE will open another plant in Thailand. The company invests around 25 million in the construction of a new production facility in the immediate vicinity of the Klaeng plant, which was taken into service in Source: 6

7 Monthly Special: The European Bathroom Reports Published In August 2010, BRG CONSULT published full country reports on Bathroom Products in 30 European countries. European market studies analyse the 2009 market and are available for the following: - 16 West European countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the UK; - 14 East European countries: Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, Turkey and Ukraine. The reports can be purchased in different packages (30 European countries; 16 West European countries, 14 East European countries) or per individual country. The product sections covered in the reports are as follows: - baths - shower trays - ceramic sanitary ware and alternatives - taps and mixers - shower enclosures, conventional shower cubicles and bath screens - hydromassage baths, hydrotherapy cubicles, combined products and shower panels. For more detailed information on BRG CONSULT's heating studies, please contact Mr. David Harrop (dharrop@brgconsult.com) or alternatively call +44 (0) Source: BRG CONSULT 7

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