Bathroom News March 2012

Transcription

1 Bathroom News March 2012 Profit Strategies for the Construction & Energy Industries Newsletter Topics Europe: Euro Zone Economy set to shrink in 2012 Europe: MASCO CORPORATION announces 2011 Results Germany: FRIATEC leaves Sanitary Cisterns Market Italy: SCAVOLINI Launches Ceramic Sanitary Ware Series Netherlands: Dutch Wholesaler PLIEGER acquires Assets in KOEKKOEK Norway: ORAS OY Ceases Production in Norway Slovenia: MERKUR back on Track Sweden: SVEDBERGS enters New Partnership with RAUTESKO UK: IDEAL STANDARD launches IDEAL SOLUTIONS' for Hotels

2 1 Euro Zone Economy set to shrink in 2012 The Euro Zone economy is heading into its second recession in just three years and the wider European Union will stagnate, according to the EU's executive, warning that the currency area has yet to break its vicious cycle of debt. The European Commission forecast that economic output in the 17 nations sharing the euro will contract 0.3% this year, reversing an earlier forecast of 0.5% growth in The euro zone was last in recession in 2009, dubbed 'The Great Recession' worldwide, when the economy contracted 4.3% during the deepest global slump since the 1930s. A poisonous mix of high public debt, evaporating investor and business confidence and rising unemployment killed off the two-year recovery from the global financial crisis. Despite signs of stabilisation this year, economists polled by REUTERS only expect growth to return in The wider, 27-nation European Union, which generates a fifth of global output, will not manage any growth this year. Battered Greece will enter its fifth year of economic contraction and Spain and Italy, which saw their financing costs pushed up to near unaffordable levels last year, will shrink by around 1%, it forecast. With the euro zone's sovereign debt crisis moving from a chronic to an acute phase, the EU's top economic official warned that there would be little clemency for heavily- indebted countries who must meet strict budget targets even as their economies stall. Economists increasingly question the EU's strategy for southern Europe as austerity reaches such extremes that some indebted town halls are unable to pay staff, social services shutter and levels of unemployment reach record levels. But the Commission said budget cuts were the way to regain investor confidence. Separately, EUROPEAN CENTRAL BANK President Mario Draghi told a German newspaper that the euro zone economy is bouncing back after a very weak end to last year and positive signals have increased since the ECB's rate decision meeting two weeks ago. Inflation for the euro zone this year should come nearer to what the EUROPEAN CENTRAL BANK judges' about the right level for stable prices and a healthy economy (2.1%). The growth forecast for the euro zone is a shade more optimistic than the INTERNATIONAL MONETARY FUND's view that output in the currency area will dip 0.5 percent this year. But both agree the bloc will manage only a modest recovery in the final months of The forecasts could still worsen. They rely on the assumption that EU leaders will act to resolve the sovereign debt crisis, which is now in its third year and has shattered investor confidence in a region once regarded as one of the world's safest havens.

3 Adding to the difficulties, the downturn is widening the gap between the wealthy economies of northern Europe and those of the south that are most in need of growth to pay off debt. Germany and France, the euro zone's two largest economies, are likely to escape recession this year, growing 0.6% and 0.4%, respectively. Source: REUTERS 2 MASCO CORPORATION Announces 2011 Results The American MASCO CORPORATION reported that net sales from continuing operations for 2011 were relatively flat, compared to 2010, at $7.5 billion. North American sales decreased by 3%, however, international sales increased by some 8% compared to In local currencies, international sales increased by 3% compared with Income from continuing operations was $.02 per common share and $0.23 per common share for 2011 and 2010, respectively, excluding the items in Exhibit A and with a normalized tax rate of 36%. Including these items, loss from continuing operations, as reported was $(1.34) per common share and $(2.94) per common share for the years ended December 31, 2011 and 2010, respectively. According to the CEO of MASCO, the performance in 2011 was challenged by commodity cost volatility, a competitive retail environment, a flat housing environment in North America and difficult economic conditions in Europe. Despite these headwinds, MASCO continued to strengthen the leading brand positions, including the introduction of new products and programs, to improve their cost structure and productivity, the investment in future growth opportunities and the improvement of their working capital management also marked the completion of MASCO s major rationalization activities, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During 2011 and 2010, MASCO incurred costs and charges of $121 million pre-tax ($.22 per common share, after tax) and $208 million pre-tax ($.38 per common share, after tax), respectively, related to these initiatives. At the same time, MASCO reported its outlook for MASCO will head into 2012 with cautious optimism. The major restructuring activities impacting their installation segment and our North American cabinet operations are now finished and those businesses experienced improving operational trends in the fourth quarter of While their efforts to reduce costs and increase revenues did not improve performance as quickly as anticipated in 2011, MASCO firmly believes that these actions will drive significant improvement in 2012, even if no improvement in the housing markets. In cabinetry, they have taken significant actions to drive improvement both in North America and Europe, but do remain concerned about general economic conditions, in particular, the UK and Europe. MASCO is focused on achieving their 2012 strategic initiatives, which include leveraging their brands, reducing their costs, improving their installation and

4 cabinet segments and strengthening their balance sheet. They believe these initiatives, coupled with the actions MASCO has taken over the past several years, should position them for improved results in 2012, even in a flat housing market, and continue to believe that they will outperform as the housing market recovers. Headquartered in Taylor, Michigan, MASCO CORPORATION is one of the world's leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products. Source: REUTERS 3 FRIATEC leaves Sanitary Cisterns Market The German company FRIATEC, a specialist in the production of corrosion resistant and wear resistant materials, has announced that it has stopped the supply of W.C. cisterns (FRIABLOC, FRIASET and WIMO) to the market as part of a portfolio adjustment of product wall technology. This decision is part of a comprehensive package of FRIATEC within the ALIAXIS GROUP's medium and long term lead to advancement and development of pipeline systems, especially in drinking water, but also to take in the wastewater sector. Source: FRIATEC AG 4 SCAVOLINI launches Ceramic Sanitary Ware Series The Italian manufacturer SCAVOLINI, one of Italy s leading suppliers of kitchen furniture, has developed a new brand ( BLUE SCAVOLINI ) of bathroom ceramics, which is its first range of bathroom ceramics. The production will be carried out in a new dedicated plant of 13,000 square meters. It will also allow the company to leverage the same distribution chains and synergies. SCAVOLINI has been producing kitchen furniture for more than 50 years and achieved a turnover of some 186 million in The new brand will debut at the upcoming Salone del Mobile exhibition, with a complete range consisting of sanitary ware, plumbing, showers, (wash) basins, mirrors and accessories, together with a line of 30 different lighting systems. According to CEO of the SCAVOLINI GROUP, BLUE SCAVOLINI represents an ambitious and challenging commercial project with an international vocation: a dramatic improvement in our group that sees the entry into a new market. The bathroom is one of the rooms of the house that, in recent years, has been most heavily loaded with symbolic positive: as a local service has become a major player in the home. This, together with the frequent coincidence in international distribution between bathroom and kitchen and the need to offer complete

5 projects for our contract division, SCAVOLINI suggested an extension to its core business, being kitchen furniture. Source: 5 Dutch Wholesaler PLIEGER acquires Assets KOEKKOEK Leading Dutch bathroom wholesaler has acquired all assets in trading company KOEKKOEK, with the intention of reopening a number of closed (installation) wholesaler branches in the Netherlands. Wholesaler KOEKKOEK, which is active in sanity ware, roof materials, steel, installation materials and heating, was declared bankrupt on 22 December The company has its head office in Zaandam, North Holland, and has several branches in the provinces of North and South Holland and Utrecht. PLIEGER is a nationwide wholesaler with more than 50 locations and operates in the same business area. The acquired assets include the existing stock, debtors, the trade and brand name and domain name. PLIEGER's intention is to reopen a number of locations in a way to also guarantee the employment of KOEKKOEK s existing staff. Source: 6 MERKUR back on track Slovenian home improvement retailer MERKUR D.D. has announced that it is successfully back on track after completing a compulsory settlement and increasing sales. Throughout 2011 sales showed consistent growth, with the highest sales achieved in the 4th quarter of The company has optimized its costs and is rebuilding trusting relationships with significant business ties. MERKUR anticipates a positive outlook for 2012 with a 20% sales increase anticipated against MERKUR has become the Slovenian market leader in sales of home products and DIY, electro-installation materials, apparatuses and appliances, machinery and tools, ferrous and non-ferrous metal products, and industrial items for professional use. Source: EDRA 7 ORAS OY Ceases Production in Norway In February 2012, ORAS OY, the Finnish taps and mixer manufacturer, announced that it has closed down its production plant in Leksvik, Norway (ORAS ARMATUR AS). In October 2010, the company had already presented a new strategic business plan, which amongst other things, would see the production in the factory in Leksvik to end. At the same time it was announced that the company would try to raise the production capacity in Poland and

6 Finland, all part of a corporate strategy for Therefore, as from 1 February 2012 production has ceased in its Leksvik plant and all production facilities have been moved to Finland and Norway and affected 40 staff members. Its sales office, which was located near the factory has not been affected and will remain in business. At the same time, ORAS announced that from the beginning of February there would be a change of CEOs in ORAS FAUCETS AS. Kaare Astrup, who was previously the Managing Director, would take over the role of Senior Advisor, whereas Thomas Hanche-Olsen would become the new CEO, having previously worked as Director of Sales. Both Kaare Astrup and Thomas Hanche-Olsen will report to the president and CEO of the ORAS GROUP, Pekka Kussniemi. Source: 8 SVEDBERG enters New Partnership with RAUTESKO The Swedish SVEDBERGS, one of Sweden s bathroom manufacturers, has signed a contract with RAUTAKESKO LTD, one of Europe s biggest players in the DIY industry. The new partnership covers all three countries in Scandinavia (Norway, Sweden and Finland), where RAUTAKESKO, owned by the Finnish KESKO GROUP, operates the DIY chains K-RAUTA, RAUTIA and BYGGMAKKER. In Sweden, RAUTAKESKO operates 21 K-RAUTA outlets, in Finland 41 K-RAUTA outlets and 106 RAUTIA outlets in Norway. In addition, it also has 112 BYGGMAKKER stores in Norway. SVEDBERGS is pleased about this new agreement, as it will enable the manufacturer to further develop and deepen cooperation in Sweden and Finland, and will also give them a much stronger foothold in the Norwegian market. SVEDBERGS is trying to intensify growth in Norway through BYGGMAKKER chain. RAUTAKESKO was looking for a long-term partner in the upper bathroom market segment, at a Nordic level, to develop sales further. SVEDBERGS and RAUTAKESKO found strong mutual synergies and SVEDBERGS are pleased to offer RAUTAKESKO its product range and expertise. Therefore, both companies expect strong growth on the Nordic markets and it is RAUTAKESKO s main goal to double sales volumes. According to RAUTAKESKO, SVEDBERGS is a well managed company with good a reputation and during an earlier collaboration, SVEDBERGS already convinced RAUTAKESKO of this, through their active and effective organization and its range of high quality products. Source: 9 IDEAL STANDARD launches IDEAL SOLUTIONS' IDEAL STANDARD INTERNATIONAL, the leading provider of innovative and design-driven bathroom solutions, has launched a new service designed to

7 provide an all-inclusive solution for selecting, installing and maintaining hotel bathrooms. With this new strategic focus, the company aims to increase its market share by enabling hotels, throughout the UK, to attract more visitors and additional revenue throughout 2012 in what has become a tough economic climate. IDEAL STANDARD s marketing manager commented that IDEAL STANDARD understands how valuable the right bathroom can be to both a hotelier and its guests and a hotel bathroom should inspire and excite, be easy to maintain, and look good every day. There is no one size fits all' hotel bathroom solution and so it's important to be flexible. Therefore, IDEAL STANDARD can help with bathroom installations ranging from high-end guest rooms to spas to public washrooms. IDEAL STANDARD developed the simple three-step approach - IDEAL VISION, IDEAL PLAN and IDEAL CARE - to meet a growing demand in the hotel sector for a single company which can help design, plan and then maintain all aspects of a bathroom. These three platforms will support architects and designers with a full project package from visualisation, through project planning and specifications, to dedicated customer contact support and maintenance post-fit. IDEAL VISION IDEAL VISION shows customers the vision of what can be possible with a new bathroom, in an artistic and unique way. IDEAL STANDARD's comprehensive resources include: - the BATH ROOM, a unique resource centre in Clerkenwell, London, which allows you to view, select and build the perfect bathroom - room visualisation, a bathroom vision is brought to life through 3D visuals showing how different product options will work together; - IDEALSPEC, a brand new website that holds all the information needed to create comprehensive specification for the bathroom. IDEAL PLAN IDEAL PLAN guides and supports customers throughout the project to ensure they choose the right product for the job, and that all components work together. This solution includes project tracking, sustainable thinking to reduce water wastage, installation support and mock up training. IDEAL CARE IDEAL CARE begins once the products are fitted, providing ongoing support for a business following installation. The Ideal Care package includes low

8 maintenance products, a bathroom first aid kit' for quick maintenance, fast delivery of parts and spares, and dedicated customer contact. Source: IDEAL STANDARD INTERNATIONAL