The European kitchen market Channels and competition · The European kitchen market Channels and...

1

The European kitchen marketChannels and competitionPresentation by Lennart Rappe, CFO18 September 2003

2

Contents

• The European kitchen market

• The UK market

• The Nordic market

• The German and Dutch markets

3

The European Kitchen Market 2001

MEUR

Source: Nobia

0 500 1 000 1 500 2 000 2 500 3 000

Finland

Belgium/Luxembourg

Austria

Norw ay

Sw itzerland

Sw eden

Denmark

Holland

Spain

France

Italy

UK

Germany • The total European market amounts to approx. EUR 11.4 bn at MSP

• The four largest markets, Germany, UK, Italy, and France account for approx. 70% of the market.

• Scandinavia accounts for approx. 10% of the market

%2421179443333322

4

Market shares 2001

Source: CSIL, Prognoscentret, and Nobia

%

0 1 2 3 4 5 6 7

Miele (D)

Bernstein Group (UK)

Veneta Cucine (I)

Schüller (D)

Bulthaup (D)

Leicht (D)

Bauformat+Bürger (D)

Siematic (D)

Scavolini (I)

Gow er (UK)

Groupe Fournier Frères + SSM (F)

Hacker Küchen (D)

SALM (F)

Kruse & Meinert (D)

Nolte Küchen (D)

MFI (UK)

Snaidero (I)

Nobilia (D)

Alno + Wellman (D)

Nobia (S)• The five largest

companies account for approx. 22% of the market

• No. 6-20 in size account for approx. 19% of the market

5

Kitchen Furniture Export and Import in Europe

Import/ConsumptionExport/Production

1,1

2,4

3,0

5,9

6,6

6,9

7,6

10,3

11,6

15,6

24,2

32,2

32,9

38,4

41,4

43,9

67,4

0 20 40 60 80

I

FIN

D

DK

E

S

UK

EUR

IRL

F

A

GR

NL

N

B

CH

P

%%

1,2

1,3

1,7

2,0

2,2

4,2

6,1

10,9

11,2

14,3

16,0

17,8

20,2

21,1

22,5

28,2

33,7

0 10 20 30 40

N

IRL

GR

FIN

CH

NL

UK

E

F

S

EUR

I

B

A

D

P

DK

Germany and Italy are the largest export countries.Together they account for approx. 70 % of the European Export trade.

France, Switzerland and the Netherlands are thelargest import countries. Together the account forapprox. 45% of the European import trade.

Source: CSIL

6

Kitchen Furniture Consumption, NordicAnnual % changes at constant prices, index 1996=100

Source: CSIL

0,0%

50,0%

100,0%

150,0%

200,0%

250,0%

Denmark 100,0% 108,9% 117,7% 107,4% 112,7% 110,4%

Finland 100,0% 123,9% 158,8% 183,3% 202,5% 208,4%

Norway 100,0% 98,9% 98,0% 62,4% 71,9% 69,3%

Sweden 100,0% 97,2% 95,7% 99,7% 106,0% 109,1%

Europe 100,0% 99,5% 100,9% 104,5% 105,2% 103,2%

1996 1997 1998 1999 2000 2001

• Consumer confidence

• Housing transactions

• New-home construction & renovation

• Interest rates

Factors influencing kitchen demand:

7

Kitchen Furniture Consumption, EuropeAnnual % changes at constant prices, index 1996=100

Source: CSIL

0,0%

50,0%

100,0%

150,0%

200,0%

France 100,0% 100,4% 105,9% 121,7% 123,5% 128,2%

Germany 100,0% 93,5% 92,1% 90,9% 83,9% 75,3%

Italy 100,0% 98,0% 102,2% 105,8% 108,4% 106,2%

Netherlands 100,0% 98,6% 100,3% 111,9% 111,1% 104,8%

UK 100,0% 121,6% 120,1% 141,3% 156,1% 164,2%

Europe 100,0% 99,5% 100,9% 104,5% 105,2% 103,2%

1996 1997 1998 1999 2000 2001

• Consumer confidence

• Housing transactions

• New-home construction & renovation

• Interest rates

Factors influencing kitchen demand

8

The UK Market

9

UK

UK Kitchen Market at RSP

Source: JKMR, Magnet

MGBP

0

500

1 000

1 500

2 000

2 500

3 000

1997 1998 1999 2000 2001 2002

Installation

Sinks & Taps

Worktops

Appliances

Furniture

43%

25%

9%

6%

17%

CAGR 97-02

+4.3%

+2.4%

+9.1%

+8.8%

+1.6%

10

UK

UK Kitchen Market Volumes and AOV (RSP)

CAGR 97-02

-0.2%

+4.5%

Source: JKMR, Magnet

820

840

860

880

900

920

1997 1998 1999 2000 2001 2002

Kitc

hens

000

s

1000

1500

2000

2500

3000

3500

4000

Ave

rage

ord

er v

alue

£

Volumes

AverageOrderValues

11

UK

Consumer Confidence Indicator UK-EU

-20

-15

-10

-5

0

5

10

1998:11998:2

1998:31998:4

1999:11999:2

1999:31999:4

2000:12000:2

2000:32000:4

2001:12001:2

2001:32001:4

2002:12002:2

2002:32002:4

2003:12003:2

UKEU

Source: European Commission

12

UK

Private consumption, annual growth rate UK

0,0%1,0%

2,0%3,0%

4,0%5,0%

6,0%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

UK

Source: EUROCONSTRUCT

13

UK

UK Kitchen Furniture Market Channel Map2002 Sales at MSP

Source: JKMR/Magnet

Manufacturers

£920m

Manufacturers DistributorsDistributors

Multiples

B&QFocus WickesHomebase

Multiples

Vertically Integrated

ConsumersConsumersMerchantsMerchants

Independent retailers

Independent retailers

DirectSales

DirectSales

HouseBuildersHouse

Builders

£265m 29%

£303m 33%

£118m 13%

£47m 5%

£57m 6%

£130m 14%

Vertically Integrated

MFIMagnetMoben

14

UK

Magnet/CP Hart7%

MFI/Howden25%

Moben4%

B&Q6%

Independents37%

Contract Market10% Merchants

4%

Homebase1%

Focus/Wickes4%

Premium Manufacturers

2%

Overall UK Market by Distribution Channel 2002 Sales at RSPThe UK Kitchen market is dominated by five companies accounting for over half of the retail market. MFI/Howden is the largest retailer in the UK.

Source: Magnet

15

UK

Magnet Retail10%

Independents69%

High End Manufacturers

5%

Moben7%

MFI Schreiber9%

The upper & upper-middle sector accounts for around half of the UK market and is dominated by the independent sector. Magnet is the leading retailer in this sector.

Upper & upper-middle Market2002 sales at RSP

Source: Magnet

16

UK

UK Kitchen Retailers

Source: Magnet

Magnet is the leading company in the upper-middle sector

17

UK

Main competitors in the UK upper-middle market

• MFI: – vertically integrated manufacturer with its own store network– Strategic priorities:

refurbishment of MFI out-of-town stores roll-out of Howden joinery stores extension of product offer to every room in the house

• Moben– limited role of store network– sales mainly through direct sales force

• Independent retailers– very fragmented structure– mainly local and small business supplied by a variety of local

manufacturers and import companies

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UK

Main competitors in the UK flat-pack market• The flat-pack market is dominated by DIY-chains and builders’ merchants• B&Q

– 320 points of sale– supplied by a few manufacturers– part of the Kingfisher Group

• Focus Wickes– 440 points of sales– supplied by Gower– owned by financial investors and management

• Homebase– 270 points of sale– supplied by Magnet/Optifit– owned by the GUS Group

• Jewson/Graham– 650 points of sale– supplied by Gower– part of the StGobain Group

19

UK

Profile - UK Market• The UK market has achieved strong growth in the past five years,

particularly prior to the millennium

• Vertically integrated manufacturers and a few large DIY-multiples occupy 50% of the market

• The distribution structure at the upper & upper-middle sector remains fragmented

• Upper & upper-middle sector is dominated by independents. Magnet (retail) is the largest individual retailer in this market

• Vertically integrated manufacturers and DIY-multiples have grown the number of outlets and gained market share at the expense of the independent sector

• The manufacturing structure is well consolidated with six manufacturers holding more than 50% of the market

• Small import and export trade

20

The Nordic Market

21

Nordic

Consumer Confidence IndicatorNordic - EU

-20

-10

0

10

20

30

40

1998 :11998 :21998 :31998 :41999 :11999 :21999 :31999 :42000 :12000 :22000 :32000 :42001 :12001 :22001 :32001 :42002 :12002 :22002 :32002 :42003 :12003 :2

SENODKSFEU


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Nordic

Housing Transactions, Nordic

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

1999

:119

99:2

1999

:319

99:4

2000

:120

00:2

2000

:320

00:4

2001

:120

01:2

2001

:320

01:4

2002

:120

02:2

2002

:320

02:4

2003

:1

SwedenNorwayDenmarkFinland

Number of housing transactions per quarter, 1+2 family homes.

Source: Prognoscentret

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Nordic

Market Share, Nordic

21%

45%

3%

5%9%

17%

Nobia

IKEA

Ballingslöv

Vedum

Others

Kvänum

35%39%

4%

4%4%

14%

Nobia

IKEAHuseby

Strai Drömmekjökkenet

Others

29%

48%

8%7%

8%

Others

Nobia

Topi-Kalustaja

Harjavalta(Puustelli)

Isku

Sweden Norway

Denmark Finland

Nobia combined market share approx. 28% in 2002:

– Sweden 21%– Norway 35%– Denmark 28%– Finland 29%

28%

6%

41%

4%

7%

7%

7%

Nobia

Svane

KVIK

IKEATVIS

Others

JKE

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Nordic

Main competitors in the Nordic market

• The Nordic countries each have approx. 5-10 local actors

• Ikea and HTH are brands that operate in all Nordic countries

• Nobia’s main competitors per country are:– Sweden: Ballingslöv, Kvänum, Vedum and Ikea– Denmark: JKE (Ballingslöv), Kvik, Tvis and Ikea – Norway: Drömmekjökken (Ballingslöv), Strai, Huseby and Ikea – Finland: Harjavalta (Puustelli), Isku and Topi-Kalustaja

25

19%

23%

1%

42%

15%

8%

8%

0%

42%

42%

27%

18%

5%

10%

40%

8%

8%

2%

67%

15%

Distribution Structure Overview - Nordic

Merchants

DIY

Others/Direct sales

Kitchen/Bathroom Specialists

Furniture Chains(IKEA)

Turnover shares in per centDenmark Sweden

Norway Finland

DIY

Merchants

DIY

Others/Direct sales

Kitchen/Bath-room Specialists


Source: KMC Research, Interviews

Nordic

Merchants

DIY

Others/Direct sales

Kitchen/Bathroom Specialists


Merchants

DIY

Others/Direct sales

Kitchen/Bath-room Specialists

Furniture Chains(IKEA+3)

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Profile - Nordic Markets

• Stable overall YOY in total over the past years with variations between countries

• The Nordic market consists of four countries with different distribution structures– kitchen specialists leading channel in Denmark– Builders’ merchants leading channel in Sweden

• Nobia, Ikea and Ballingslöv are active in several Nordic countries

• Ikea and HTH are the only pan-Nordic brands

• Manufacturing structure reasonably well consolidated

• Import/export trade mainly from Denmark to Norway

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The German and Dutch markets

28

DE & NL

Kitchen Furniture Consumption

Kitchen furniture, actual consumption. Annual % changes at constant prices.

%

-15

-10

-5

0

5

1996 1997 1998 1999 2000 2001 2002

GermanyEurope

Source: CSIL, Nobia

29

DE & NL

Disposable Income

Average monthly income per employee in Germany (EUR)

18301650

1910 1940 2010 2040 2040 2060 2090 2120 2160 2205 2255

140014351410137013401320130013201320131013101250

1150111011001100114011501160

11901120 1120 1120 1070

11901150

0

500

1000

1500

2000

2500

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

GrossNetReal

Forecast

*

* Purchasing power from 1991 (after deducting price increases)

Source: GfK

30

DE & NL

-30

-20

-10

0

10

20

30

40

1998:11998:21998:31998:41999:11999:21999:31999:42000:12000:22000:32000:42001:12001:22001:32001:42002:12002:22002:32002:42003:12003:2

DENLEU

Consumer Confidence IndicatorGermany - Netherlands - EU


31

DE & NL

Private consumption, annual growth rateGermany – Netherlands

-1,0%0,0%1,0%2,0%3,0%4,0%5,0%6,0%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

DE

NL


32

DE & NL

Sales Channels in Germany

Kitchen % distribution per sales channel in Germany

Strong power is being exercised through co-ordinated purchasing by all channels

0

10

20

30

40

50

60

Furniture stores Kitchen Specialists DIY

%

Upper-middle, middle, and economysegment

Upper and Upper-middlesegment

Economysegment

Source: GfK

33

DE & NL

Market Share, DE & NL

12%

3%

41%

18%

4%

7%

4%

4%4%

3%

Nobilia

Alno + Casawell

Nolte

Häcker

Schüller

Nobia

Others

BauformatKruse+Meinert

Siematic

Germany Netherlands

Nobia’s combined market share in Germany and the Netherlands was approx. 5 per cent in 2002:

- Germany 4%- Netherlands 13%

35%

15%

5%

5%

5% 6%

7%

9%

13%Nobia

Bruynzell

Keller

Rotpunkt

Others

BribusSiematic

Häcker

34

DE & NL

Main competitors in the German and NL markets in the upper-middle segment

• The “Einkaufsverbände” is the dominating distribution channel for kitchens within the upper middle segment

• The largest “Einkaufsverbände” are MHK, Der Kreis and VKG who together operate 4000 stores in Germany

• Nobia’s main competitors are those manufacturers who supply these chains and the upper/middle segment of the market

• Main competitors are Häcker, Schüller, Leicht and Siematic

• The furniture chain is the overall dominating distribution, but it focuses on the middle and economic segment

• The largest manufacturers in Germany dominate the supply of furniture chains and the middle and economic segments of the market

• These manufacturers are Alno/Casawell, Nobilia, Nolte, K&M

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Profile - German Market

• Market decline since 1995

• Distribution dominated by large purchasing associations for kitchen specialists and furniture stores

• Kitchens are re-branded by the retail chains

• Trend towards lower AOV in recent years

• Fragmented manufacturing structure (130 manufacturers)

• Consolidation among manufacturers and reduction of production capacity ongoing

• Large export trade and small import trade

• The Netherlands is by far the largest export market for German kitchen manufacturers

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Thank you for listening!

37

Appendix

38

UK

GDP annual growth rate – UK

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

UK


39

UK

Housing Transactions - UK

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

1999

:119

99:2

1999

:319

99:4

2000

:120

00:2

2000

:320

00:4

2001

:120

01:2

2001

:320

01:4

2002

:120

02:2

2002

:320

02:4

2003

:120

03:2

UK

90% of all housing transactions, estimated to be the residential share of total property transactions.


40

UK

R&M Residential Buildings – The UKBuilding Investments 1999 – 2005 (EUR bn in 2002 prices)

27,5

28,5

29,5

30,5

31,5

32,5

33,5

1999 2000 2001 2002 2003 2004 2005

UK

Source: Euroconstruct - CFR.

41

UK

New Residential Buildings – The UKHousing starts 1999 - 2005

160000

170000

180000

190000

200000

1999 2000 2001 2002 2003 2004 2005

UK

Source: Euroconstruct - CFR.

42

Nordic

R&M Residential Buildings – Nordic AreaBuilding Investments 1999 – 2005 (Bill. EUR in 2002 prices)

2,5

3,0

3,5

4,0

4,5

5,0

1999 2000 2001 2002 2003 2004 2005

SEDKNOSF

Sources: Euroconstruct – Prognosesenteret AS (NO), CIFS (DK), VTT (SF), Prognoscentret AB (SE).

43

Nordic

New Residential Buildings – Nordic AreaHousing starts 1999 - 2005

10000

15000

20000

25000

30000

35000

1999 2000 2001 2002 2003 2004 2005

SEDKNOSF

Source: Prognoscentret AB.

44

DE & NL

Housing Transactions

Number of housing transactions per quarter, 1+2 family homes.Figures for Germany not available.

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

1999

:119

99:2

1999

:319

99:4

2000

:120

00:2

2000

:320

00:4

2001

:120

01:2

2001

:320

01:4

2002

:120

02:2

2002

:320

02:4

2003

:120

03:2

NL


45

DE & NL

R&M Residential Buildings – DE, NLBuilding Investments 1999 – 2005 (EUR bn in 2002 prices)

2,5

12,5

22,5

32,5

42,5

52,5

62,5

1999 2000 2001 2002 2003 2004 2005

NLDE

Sources: Euroconstruct – EIB (NL), ifo (DE).

46

DE & NL

New Residential Buildings – DE, NLHousing starts 1999 - 2005

50000

100000

150000

200000

250000

300000

350000

400000

450000

1999 2000 2001 2002 2003 2004 2005

NLDE

Sources: Euroconstruct – EIB (NL), ifo (DE).

The European kitchen market Channels and competition · The European kitchen market Channels and...

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