Vaillant Group with excellent start in 2012

Düsseldorf / Remscheid, 21 May 2012

• Business development in first quarter very positive

• Significant increase in operating result in 2011

• Strategic expansion of combined heat and power (CHP) business

The Remscheid-based heating, ventilation and air-conditioning specialist Vaillant Group increased its sales in the first three months of this year to €563 million, a plus of 5 per cent compared to the same quarter in 2011. The operating result (EBIT) for the same period improved by 24 per cent. "The Vaillant Group had a very good first quarter in 2012," said Dr Carsten Voigtländer, Vaillant Group CEO, at the company's annual press conference in Düsseldorf today. "The disproportionately high increase of the operating result shows that our strategic focus on especially profit-yielding businesses continues to bear fruit. We are benefiting in particular from the demand for efficient technologies that make up our core business. These include highly efficient condensing technology, solar thermal collectors, heat pumps and decentralised cogeneration of heat and power. Besides Central Europe, regional growth focal points are Eastern Europe and Turkey. As in 2011, a key area of our product strategy is decentralised CHP stations. With our acquisition of the Hamburg manufacturer Cogenon at the beginning of this month, we have enhanced our product portfolio with powerful, environment-friendly systems for the production of heat and power in larger properties."

Vaillant Group boosted profitability in 2011 despite difficult markets

For the Vaillant Group, the first quarter of 2012 follows up on an equally positive financial year 2011. Despite difficult markets in numerous European countries, the EBIT in 2011 rose by more than 15 per cent to €204 million (2010: €177 million). Net sales came to €2.276 million and thus were almost at the high level of the previous year (2010: €2.314 million). Adjusted for exchange rate effects, net sales were €17 million higher than in the year before. With almost 60 per cent, efficient technologies and heating technology based on renewable energy sources once again accounted for the greatest share of product sales in 2011.

In Central Europe, sales totalling €606 million were slightly above the previous year (2010: €602 million). In Germany in particular, the Vaillant Group posted sales increases in core business fields. These include decentralised CHP systems in the low output range, solar thermal systems for hot water supply and heating support, and air-water heat pumps. In the last two business fields mentioned, the Vaillant Group in 2011 boosted sales and won further market share. In addition, the Vaillant Group was the first supplier to successfully introduce a micro-CHP system for single-family houses to the market.

In Northern Europe, sales totalling €699 million were lower compared to the previous year (2010: €740 million). This was due in particular to the development in the high-volume UK market. Because of expiring subsidies for condensing technology, there was a one-off special bandwagon business effect from which both the market in general and the Vaillant Group benefited in 2010. As expected, there was a market consolidation in 2011.

The Vaillant Group once again posted very dynamic sales growth in the Eastern Europe region. With €490 million, sales increased by about 12 per cent (2010: €437 million). Besides the positive sales development in Turkey of 20 per cent, the strong economy in Russia also contributed to this result.

Total sales in the Southern Europe region declined to €606 million (2010: €655 million). The main reason for this is the weak economy in many countries of the region and the local impacts of the European sovereign debt crisis. The market for heating technology, especially in Italy and Spain, could not elude the overall economic situation.

In China, the Vaillant Group once again significantly boosted sales, by €17 million to €53 million. Due to increasing demand, in 2011 the Group set up additional capacity at its production site in Wuxi. The products are sold mainly in China and other Asian markets.

Workforce virtually constant

As at 31 December 2011, the Vaillant Group had 12,166 employees (2010: 12,423). In Germany the workforce remained constant. The Research and Development department was once again reinforced with more personnel in 2011. More than 600 employees Group-wide form one of the largest R&E teams in the industry.

Strategic focus on highly efficient technologies and renewable energies

Besides its course to growth in the renewable energies sector, the Vaillant Group is continuing to concentrate on highly efficient gas technologies. The simultaneous production of heat and power by environment-friendly cogeneration is playing an ever more important role. The focus is on mini- and micro-CHP systems for residential and business properties. Since mid-2011 the Remscheid-based company has offered with its ecoPOWER 1.0 for the first time in Germany a system conceived especially for economical operation in single- and two-family houses. The ecoPOWER 1.0 'family power station' was distinguished in 2011 as the most sustainable product in Germany. Besides the development of this completely new market segment, the capacity for the production of the higher output mini-CHP models ecoPOWER 3.0 and 4.7 in Gelsenkirchen was increased. By means of an acquisition in May 2012, the Vaillant Group rounded out its product portfolio upwards by a mini-CHP system with a higher output range. Thus the Vaillant Group now offers its customers CHP systems with an electrical output ranging from 1 kW to 20 kW.

At the same time, the company is pushing the development of condensing technology further ahead. “With the use of extremely economical condensing technology for the urgently needed energy refurbishment of existing buildings, about one-third of the energy consumed in buildings and one-third of the CO₂ emissions can be saved already today. The greater use of highly efficient condensing technology in existing building stock along with an increase in the speed of modernisation is therefore indispensable for achieving a sustainable energy change in Germany,” Dr Voigtländer emphasised.