5. Regions

Everything for the bathroom, anywhere in the world

The Group's current organizational model is based on an integrated corporate unit and functional departments, thus allowing local units to focus on identifying opportunities and developing the business in their respective markets.

Conceptually, the Group is currently organized into four regions, based on the industrial map and the strategic growth objectives:

  • Western Europe, Africa and the Middle East
  • Americas (North, Central and South America)
  • Central Europe, Eastern Europe and Scandinavia
  • Asia-Pacific

The Group currently enjoys balanced geographical coverage, with significant presence in both mature markets and emerging economies. This balance lowers the risk from economic uncertainties.

The following pages describe the performance, business development and relevant milestones of the various regions and their main markets, in the context of a brief overview of the social and economic reality of each country.

Local units focus on identifying opportunities and developing the business in their respective markets.

Balanced presence between regions

The recovery of the Americas meant that all the regions of the Group's business in 2017 posted higher turnover and maintained balanced contributions to total turnover.

% OF SALES

  • WESTERN EUROPE, AFRICA AND MIDDLE EAST
  • CENTRAL EUROPE, EASTERN EUROPE AND SCANDINAVIA
  • AMERICAS (NORTH, CENTRAL AND SOUTH AMERICA)
  • ASIA-PACIFIC

Western Europe, Africa and the Middle East

Spain, UK, Italy, Portugal, France, Morocco, Egypt, Middle East

In the year of the centenary celebration of the founding of Roca, the Group's performance in its traditional markets was again remarkable. Spain led in terms of sales increase in the region, with new growth of 10% and high levels of activity at all levels. The launch of its smart toilet category was very successful. In other European markets, growth in Portugal was mainly driven by the renewal of the range, and in the UK, where global brand visibility has been enhanced.

in millions of euros

29.4%

OF THE GROUP

FACTORIES

23

34.9%

OF THE GROUP

TURNOVER

€627.5M

27.7%

OF THE GROUP

EMPLOYEES

6,535

CONTRIBUTION TO GROUP’S GROSS PROFIT

38.5%

The region's contribution to the Group's gross profit margin remained stable, although affected this year by the depreciation of the UK pound and the Egyptian pound against the euro, which impacts the contribution of these markets to the consolidated P&L.

SANITARYWARE

10

FAUCETS

3

BATHTUBS

3

ACRYLICS

3

FURNITURE

2

TILES

1

FIXTURES

1

BRANDS

Spain

Despite the still slow recovery in the construction sector, Group sales in the Spanish market increased 10%, putting cumulative growth at over 53% compared to 2013. This period witnessed particular efforts in developing new products and commitments to the faucet, furniture and bathroom fixture businesses. Performance during 2017 was marked by intense commercial activity around the release of the In-Wash smart toilet.

A popular advertising campaign was launched, and presentations were made to distributors, installers, architects and designers from around the country. Group brand presence was boosted in all channels, whether traditional retail, big-box stores or online offerings. Business was also strong in the hotel industry due to refurbishments, new agreements signed and involvement in key projects with various chains.

The Roca Tiles division also posted growth this year, both in terms of sales and customer base, driven by diversification of the supply into three brands (Roca, Bellavista and Gala). The excellent performance of the new ThinBig product family and productivity rates achieved by the Castellón plant were also striking.

2017 GDP3.1%
2018 GDP forecast2.8%
Inflation1.1%
Population (in millions)46.49
  • Fourth consecutive year of growth in the Spanish economy (3.1%), above the eurozone average.
  • Growth driven by domestic demand, despite 4th-quarter consumer slowdown due to the social impact of the pro-independence movement in Catalonia.
  • The construction sector remains supported by renovations and the upswing in the hotel market, although new construction has performed better than predicted.
  • United Kingdom

    Sales grew again above market rates in the local currency, although depreciation of the pound had a significant impact on the UK's contribution to the Group's consolidated figures. The positive performance stemmed from remarkable performance by the Roca and Laufen brands in both new construction and nonresidential projects. Strong agreements have been reached with major hotel groups in the country, with proprietary solutions in premier projects and development of the new, recently available bathroom product categories.

    Roca has also achieved its aim of consolidating its status as a premium brand through a more significant presence in showrooms, backed by intensive new product launch activity and the development of client training programs.

    2017 GDP1.8%
    2018 GDP forecast1.6%
    Inflation2.9%
    Population (in millions))66.57
    • Managing Brexit and forging new trade relations with the continent has kept the UK's economy in limbo, with 1.8% growth in 2017.
    • The momentum of the residential market dampened the collapse of the building industry, which was also affected by the uncertain future and political instability of the country.
  • Italy

    Business in the country continues to be marked by the drastic fall of the construction sector during the economic crisis, which has led to a profound transformation of the bathroom space sector with a revamped offer. Nevertheless, after the 2013 and 2014 restructuring, the Group has enjoyed steady growth in recent years, witnessing a progressive improvement in revenues and gross margin.

    2017 GDP1.5%
    2018 GDP forecast1.5%
    Inflation0.9%
    Population (in millions)59.29
    • Italy regains economic growth levels above 1%, mainly driven by industrial and service sector activity.
    • The building industry has stabilized, although year-on-year rates are still declining.
  • Portugal

    The recovery of the domestic market has driven sales growth of almost 10%, above the industry's performance, confirming the upward trend of recent years. Activities have been undertaken to renovate the product range and to integrate the latest brand launches and events organized for influencers (hospitality, architecture and engineering). Exports are also on the rise to Portuguese-speaking markets, especially Angola and Mozambique.

    Investments in the Group's plants in Portugal are allocated to improving productivity and process automation and to reviewing safety plans. The Anadia plant has introduced a new furniture assembly line, expanding the Solid Surface production area and incorporating new Solid Surface and Gelcoat molds.

    2017 GDP2.7%
    2018 GDP forecast2.4%
    Inflation1.4%
    Population (in millions)10.29
    • Economic growth of 2.7%—the best figure in the last decade—driven by consumer confidence and declining unemployment.
    • Given the scarcity of new construction projects, especially in major cities, the construction sector remains bolstered by the renovation sector.
  • France

    In view of shifts in the distribution market, the year was aimed at improving profitability and scaling back lowoutput operations. Despite the slight decline in sales, significant improvements in gross profit margin and EBITDA have been achieved.

    The Roca brand continues to gain strength in the midand upmarket segments and was present at the Batimat fair in Paris with presentations of the new Armani/Roca collection.

    2017 GDP1.8%
    2018 GDP forecast2.1%
    Inflation1.1%
    Population (in millions)65.23
    • A 1.8% level of growth was better than forecasted, thanks to increased business investment, household consumption and exports.
    • The building industry showed greater activity, driven by higher new-starts and forecasts regarding the 2023 Rugby World Cup and the Olympic Games to be held in 2024 in Paris.
  • Morocco

    The stagnation of the building industry has slowed sales in the domestic market, despite the commercial effort made with the launch of the 'My Bathroom' corporate campaign and the opening or renovation of sales outlets.

    Export activity managed from Morocco led to strong results in Algeria as well as new projects carried out in various West African markets such as Senegal and the Ivory Coast.

    2017 GDP4.2%
    2018 GDP forecast3.1%
    Inflation0.7%
    Population (in millions)36.19
    MAD/EUR trend-4.5%
    • Momentum in the agricultural sector allowed the country to regain a growth rate of over 4%, following a slowdown in 2016.
    • However, construction levels dropped, mainly due to stagnation in the first half of the year.
  • Egypt

    The increased supply of new product categories (faucets, furniture and fixtures) and the launch of the ceramic tile offer solidified the Group as a full-range supplier for the bathroom space in Egypt. This positioning reinforced the presence of Roca brands in major projects in the country, led by the enormous project of the new Egyptian capital. The Group posted outstanding growth in local currency, both domestic sales and exports, undermined in the consolidation into euros by depreciation of the Egyptian pound.

    In 2017 construction began on a new sanitaryware plant in 6th of October City, to be carried out in two phases and which will reach a total capacity of 2.5 million units annually.

    2017 GDP4.2%
    2018 GDP forecast5.2%
    Inflation23.5%
    Population (in millions)99.37
    EGP/EUR trend-46.7%
    • The country's economic growth remained above 4%, with positive forecasts backed by internal reforms designed to correct imbalances, restore competitiveness and lower unemployment.
    • The year witnessed improved performance in the tourism and construction industries, driven by large projects.
  • Africa and the Middle East

    African markets have had a positive year. Their effort to open outlets and their influencer activities have begun to pay off. The markets with the greatest potential are South Africa—key hub at the project level—and Nigeria. Influencer efforts in the Middle East have picked up, maintaining confidence and brand positioning to keep winning important projects in markets such as Qatar and UAE.

    Rising oil prices have improved the outlook for the Middle East. In African markets, South Africa consolidated its growth whereas Nigeria grew less than 1%.

  • Americas (North, Central and South)

    Brazil, Argentina, US, Mexico

    After two years of declining sales—mainly due to political and economic uncertainty in Brazil—the country's recovery is driving improvement in the region. The Group's growth in Brazil is marked by the momentum of new bathroom space categories and synergies between all brands and the Roca Tiles division. Business in Argentina has been affected by increased competition, although Roca maintains its premium brand position.

    In the US, after rethinking the distribution strategy in recent years, the foundation for growth has been laid for the short term. Finally, in the first year of activity in Mexico, we have worked on expanding the distribution network, investing in improvements to the sanitaryware factory and building the local team.

    in millions of euros

    19.2%

    OF THE GROUP

    FACTORIES

    14

    20.7%

    OF THE GROUP

    TURNOVER

    €372.2M

    19.1%

    OF THE GROUP

    EMPLOYEES

    4,526

    CONTRIBUTION TO THE GROUP'S GROSS PROFIT

    16.6%

    Brazil's recovery drove the surge in regional sales. Industrial investments in Argentina, Brazil and Mexico should lead to growth in new categories in the short term.

    SANITARYWARE

    8

    TILES

    3

    FAUCETS

    1

    ACRYLICS

    1

    FURNITURE

    1

    BRANDS

    Brazil

    Despite the still-weak recovery in private consumption—and after four years of declining sales—the Group achieved a commendable increase in turnover in the domestic market.

    Performance was particularly strong in the categories of sanitaryware, seats and furniture. Major efforts have been made in renewing the range with the launch of over 300 new SKUs from different brands. In terms of industrial activity, work has started on a new line of plastic seats and covers in Jundiaí, boasting capacity for more than 370,000 units per year, and the faucet assembly activity has been focused in Recife. The Group currently has 11 plants in Brazil.

    The domestic situation hampers the development of the ceramic tile business, even though efforts are being made for greater sales integration with the rest of the Group's offer to generate synergies.

    2017 GDP1%
    2018 GDP forecast2.1%
    Inflation2.9%
    Population (in millions)210.87
    BRL/EUR trend6.80%
    • In the wake of the severe recession experienced in 2015 and 2016, Brazil achieved an economic growth of 1%, higher than forecasts issued by the main international organizations.
    • Weak performance of public consumption and investments as well as political uncertainty led to a slow recovery.
    • The construction industry is still underperforming, although it showed the first signs of an uptick in three years.
  • Argentina

    This has been a complex year due to strong competition and penetration of imported products, which led to lower-thanexpected sales performance. Nevertheless, Roca's premium offer continues to earn the trust of some of the largest construction projects in Argentina and Uruguay.

    At the industrial level, the Lanús plant is preparing a new faucet assembly unit, which will expand the offer with new series in the coming years. This plant has also received new toilet casting presses for toilet manufacturing.

    2017 GDP2.9%
    2018 GDP forecast2%
    Inflation25.6%
    Population (in millions)44.68
    ARS/EUR trend-13%
    • Argentina has come out of the 2016 recession with 2.9% growth and a significant reduction in unemployment. The main challenge remains controlling inflation, which has curtailed domestic consumption.
    • Construction is one of the most dynamic sectors. The strong comeback of the construction market is fueled by the resurgence of mortgage loans and public works.
  • United States

    The new retail diversification strategy has been developed to cut back dependence on large DIY chains, momentarily slowing turnover performance for ceramic tile in the US. However, sales to new customers have increased, and brands that have taken hold in the country (BMW, VW, Nissan, Hollister, etc.) are showing confidence in Roca products and including them in their facilities.

    The offer has also been upgraded with new formats manufactured at the plant in Campo Largo, Brazil, led by large tiles and Maiolica wall tiles. Strong commercial activity has taken the company to several trade shows, including Coverings in Orlando, as well as ICFF in New York for the third straight year. A new distribution warehouse has been opened in Chicago, and the showroom in Miami has been remodeled.

    2017 GDP2.3%
    2018 GDP forecast2.9%
    Inflation2.1%
    Population (in millions)326.77
    USD/EUR trend-2%
    • Solid economic growth (2.3% in 2017), after overcoming the uncertainty created by the arrival of Donald Trump to the White House, who has instituted policies to boost business.
    • The construction market is also developing strongly, with a further increase in new housing.
  • Mexico

    Following the acquisition in 2016 of the companies General de Cerámica (Santalia) and Ceramosa, FY 2017 is the first complete year for the Group in Mexico. Business focused on three main areas: expanding the distribution network, making improvements in the Santalia plant and training the team of professionals in the country.

    Expansion of the distribution customer base has initially focused on the northern part of the country to progressively implement improved logistics that can then extend activities to the center and south. Moreover, improvements in the Santalia plant were primarily aimed at improving productivity and performance. Lastly, work was also undertaken to build a permanent team in the country, following the integration of professionals from the two acquired companies.

    2017 GDP2%
    2018 GDP forecast2.3%
    Inflation6.7%
    Population (in millions)130.76
    MXN/EUR trend-3.10%
    • Solidification of US activity allowed Mexico to maintain a growth of 2%, the lowest rate in recent years, mainly based in the service sector and despite the weakening industry.
    • The construction industry remained stalled, growing much less than expected.

    Central Europe, Eastern Europe and Scandinavia

    Switzerland, Russia, Germany, Austria, Poland, Czech Republic, Norway, Denmark, Sweden, Bulgaria, Romania, Croatia, Turkey

    Sales growth in the region is mainly based on Russia's strong performance. The Group's brands continue to lead the market and perform well in markets such as Austria, Bulgaria, Poland and Romania. Industrial investments in Croatia, Poland and Russia should drive sales momentum and the development of new categories and materials in the coming years. The Laufen brand—fully consolidated in central European markets— continues to gain share in the Scandinavian region.

    In the first full year of activity in Turkey, sales of the local brand have been regained, and the local faucet plant has begun to manufacture Roca brand series for European markets.

    in millions of euros

    28.2%

    OF THE GROUP

    FACTORIES

    22

    27.6%

    OF THE GROUP

    TURNOVER

    €497.3M

    27.8%

    OF THE GROUP

    EMPLOYEES

    6,563

    CONTRIBUTION TO THE GROUP'S GROSS PROFIT

    28.5%

    Increased regional contribution to the Group's gross profit, mainly due to improved margins in Russia and stability in Switzerland, with growing contributions by Southeast European markets.

    SANITARYWARE

    13

    FAUCETS

    3

    ACRYLICS

    4

    FURNITURE

    3

    BRANDS

    SWITZERLAND

    Market stagnation and a trend towards concentration in the industry resulted in more restrained growth for the Group than in previous years. The trend remained upward thanks to the prestige of Laufen—a leading brand known for innovation and design—and a very active product launching calendar. A good example of this activity was on display at the ISH fair in Frankfurt, which showcased SaphirKeramik parts, the Riva smart toilet and the expansion of the successful Kartell by Laufen collection.

    In order to strengthen its market position, the Group is working on new distribution agreements and on strengthening its relationship with influencers, in the context of in-house events. Industrial investments were made in the Laufen plant for SaphirKeramik production and in the Similor plant for the development of new faucet collections that will be released during the course of 2018.

    2017 GDP1.1%
    2018 GDP forecast2.3%
    Inflation0.8%
    Population (in millions)8.5
    MXN/EUR trend-1.90%
    • Economic growth stood at 1% in a year of transition in Switzerland, which must address issues such as corporate taxation, payment of pensions and energy renewal in upcoming years.
    • The bathroom space market remains stable thanks to a small increase in new building starts, which tend to focus more on rental markets.
  • RUSSIA

    Russia's contribution to the Group's turnover is one of the strongest in recent years due to increased sales in all categories, especially in sanitaryware and furniture. The strength of the local product inspires optimism about coming years, despite increased competition and price pressure.

    The sanitaryware plant in Ugrakeram has received significant investment to increase throughput by over 400,000 units per year, reaching about 2.5 million units. Among other things, the plant has a new kiln, new diecast machines and a new drying chamber, making it one of the Group's largest plants in the world.

    2017 GDP1.5%
    2018 GDP forecast1.7%
    Inflation2.5%
    Population (in millions)143.96
    BRL/EUR trend12.40%
    • After two years in recession, Russia saw 1.5% growth in 2017, driven by rising oil prices, increased business confidence and a more accommodating monetary policy.
    • The construction market remains active due to the investment in infrastructures associated with the 2018 FIFA World Cup.
  • GERMANY AND AUSTRIA

    In Germany, the Group has witnessed the transformation of the bathroom space market, marked by the aggressive foray of competitors into new channels (online, DIY, etc.) and the consequent loss of market share for traditional retail. However, SaphirKeramik product collections has shown strong performance, which strengthened the Group's position in the premium segment.

    Despite price competition, Laufen Austria successfully defended its position as market leader and grows in line with market trends. DIY sales were particularly strong—enjoying significant growth in recent years. The project channel also saw increased activity.

    GERMANY

    2017 GDP2.5%
    2018 GDP forecast2.5%
    Inflation1.6%
    Population (in millions)82.29

    AUSTRIA

    2017 GDP2.9%
    2018 GDP forecast2.6%
    Inflation2.15%
    Population (in millions)8.75
    • Fueled by strong performance of the labor market, increases in investment and domestic consumption pushed Germany to a growth of 2.5%.
    • In Austria, economic expansion resulted in high GDP growth of 2.9%, driven by export activity, resulting in a strong and stable construction market.
  • POLAND

    The Group's turnover has increased remarkably. All brands and channels have performed positively. The growth of Laufen is particularly striking, thanks mainly to the excellent performance of the Pro S collection and new product categories. Likewise, Roca has a very strong position in traditional retail, which witnessed significant efforts in developing new showrooms by the Roca Club project, and the DIY channel.

    The expansion project of the sanitaryware plant in Gliwice, which began in 2015, was completed in 2017. This expansion has brought production capacity to 1.2 million units, thus allowing the plant to also manufacture the main Laufen series. A new line of Stonex shower trays was also commissioned in Gryfice.

    2017 GDP4.6%
    2018 GDP forecast4.1%
    Inflation2.1%
    Population (in millions)38.1
    • The Polish economy continues to grow at a brisk pace (4.6% in 2017), thanks mainly to domestic consumption encouraged by rising wages and falling unemployment.
    • The construction market reflects the country's development and increased quality of life—with a record number of new homes.
  • CZECH REPUBLIC

    In line with market activity and increased quality of life, the Group has increased sales above 5%. A rebranding effort has also been undertaken through the remodeling of the Prague showroom, showcasing both the Roca and the Laufen lines, and the centenary celebration of the Roca brand with local events and influencer visits to Barcelona.

    Group plants in the country have also received several investments aimed at process automation and adjustments, culminating in new product collections.

    2017 GDP4.3%
    2018 GDP forecast3.5%
    Inflation2.3%
    Population (in millions)10.63
    CZK/EUR trend2.70%
    • Outstanding export performance drove growth of the Czech economy to 4.3%.
    • Domestic consumption also remained very high, thanks to higher wages and contained inflation.
  • SCANDINAVIA

    Scandinavia had another year of growth, in which brand awareness efforts are beginning to bear fruit. In an increasingly complex and more competitive market, the projects channel (residences, hotels, hospitals, etc.) has seen increased presence and visibility thanks to premium products such as Laufen's Riva smart toilet, successfully launched at the VVS fair in Odense (Denmark).

    Agreements with major market players contributed to development in Denmark, Iceland and Finland, whereas the first showrooms were opened in Sweden (Gothenburg and Stockholm). The Norwegian market enjoyed the strongest presence. Riva enjoyed strong results, new agreements were signed with wholesalers, and channel development projects were undertaken. The upcoming launch of new Nordic collections should continue to stimulate growth throughout the entire region.

    NORWAY

    2017 GDP1.8%
    2018 GDP forecast2.1%
    Inflation1.6%
    Population (in millions)5.35

    SWEDEN

    2017 GDP2.4%
    2018 GDP forecast2.6%
    Inflation1.7%
    Population (in millions)9.98

    DENMARK

    2017 GDP2.1%
    2018 GDP forecast2%
    Inflation1%
    Population (in millions)5.75
    • Norway is recovering from the 2016 slump caused by falling exports, growing about 2% thanks to increased investment and domestic consumption.
    • Export recovery pushed growth in Sweden 2.4%, whereas Denmark reached full employment with a growth rate also well over 2%.
  • SOUTHEAST EUROPE (SEE)

    The Group posted 10% sales increase in Bulgaria, where it has expanded the Roca product offering by launching new categories for the bathroom space (faucet and furniture collections and activation of the installation systems market). The performance of the Group's brands was also outstanding in Romania, thanks to solid performance by all brands in the country, the gradual renewal of the range and the various projects won.

    In Croatia the expansion project at the sanitaryware plant in Zapresic, launched in 2015, has been completed, doubling its capacity to 900,000 units annually. This investment made it possible to take on production for some of the most successful Roca series (The Gap and Debba). Domestic sales maintained the positive trend of previous years.

    BULGARIA

    2017 GDP3.6%
    2018 GDP forecast3.8%
    Inflation2%
    Population (in millions)7.03

    ROMANIA

    2017 GDP7%
    2018 GDP forecast5.1%
    Inflation1.3%
    Population (in millions)19.58

    CROATIA

    2017 GDP2.8%
    2018 GDP forecast2.8%
    Inflation1.1%
    Population (in millions)4.164
    • Bulgaria grew by 3.6% despite high levels of poverty and corruption.
    • Romania has one of the highest growth rates in the EU (7%), thanks to rising wages and tax cuts.
    • Croatia's growth rate remained steady (2.8%), in an year marked by positive construction performance.
  • TURKEY

    In the first full year of operations in Turkey after the acquisition of the NSK faucet company, which has its own plant in the town of Eskisehir, local brand sales growth has been remarkable, and some of the most important residential and public works projects in the country have been won. The NSK range has been enhanced with built-in mechanisms and shower panels—complementary to its superb faucet range.

    The Eskisehir plant, equipped with the latest machinery for high-end products and finishes, has begun production of various lines of Roca brand faucets for European markets.

    The company's ongoing growth will continue to be driven through commissioning of a new plant to produce built-in mechanisms for wall-mounted toilets and as the firm opens up to new international customers.

    2017 GDP7.4%
    2018 GDP forecast4.4%
    Inflation11.9%
    Population (in millions)81.9
    TRY/EUR trend-18.9%
    • The strength of industry, services and construction has led Turkey to its strongest growth in recent years (7.4%), exceeding forecasts.
    • Growth in the bathroom sector market is in line with strong construction performance, above 6%.
  • Asia-Pacific

    China, India, Malaysia, Thailand, Australia

    The region reached an all-time high sales figure, bolstered by growth in its two main markets. China attained overall increases in all brands, with a new expansion of sales outlets and strengthening of Roca as a premium brand through the opening of the Roca Beijing Gallery. Growth was more moderate in India, with the Parryware brand repositioning during the year and heavy promotional activity and relationship-building with Roca influencers.

    In other markets, strategic agreements were reached with major retail chains in Thailand, the Malaysia business was expanded to new markets in Southeast Asia and new products were launched in Australia. In 2017 operations also ramped up in Indonesia through a joint venture with local retailers. Business began immediately with the opening of a sales office and the start of construction for a sanitaryware factory.

    in millions of euros

    23.1%

    OF THE GROUP

    FACTORIES

    18

    16.8%

    OF THE GROUP

    TURNOVER

    €302.4M

    25.3%

    OF THE GROUP

    EMPLOYEES

    5,991

    CONTRIBUTION TO THE GROUP'S GROSS PROFIT

    16.4%

    The region's contribution to the Group's gross profit margin held steady, also thanks to improvements in this aspect of the business in India and China. As far as other markets are concerned, depreciation of the Malaysian ringgit did have an adverse impact on consolidation of the results.

    SANITARYWARE

    8

    FAUCETS

    2

    INJECTION MOLDING

    2

    FURNITURE

    1

    SHOWER SCREENS

    1

    FIXTURES

    1

    SMART TOILETS

    1

    BATHTUBS

    1

    ACRYLICS

    1

    BRANDS

    China

    Construction industry performance in the country has allowed the Group to enjoy a sales increase of almost 20% in local currency, above the average growth for the sector. Strong performance of the Roca, Ying and especially Laufen brands was driven by expansion of the traditional retail channel to new cities and the excellent results for built-in, wall-mounted toilets. In 2017, 85 new sales points were opened, with the Roca flagship shops in Hangzhou and Changsha, located in the southeast.

    Roca's positioning as a benchmark in the medium-high segment became even more robust with the opening of the Roca Beijing Gallery in May, designed by renowned architect Ma Yansong and the second Roca Gallery in the country after the one inaugurated in 2013, in Shanghai.

    In terms of industrial activity, the country also saw the inclusion of a new smart toilet assembly line and a new training center in the Suzhou plant.

    2017 GDP6.9%
    2018 GDP forecast6.6%
    Inflation1.8%
    Population (in millions)1,415
    CNY/EUR trend-3.80%
    • Despite a gradual structural deceleration and transformation process, China again posted impressive growth at 6.9%, higher than 2016, mainly due to the resurgence of net exports.
    • Contrary to forecasts, the construction market has again increased thanks to continued demand for new housing.
  • India

    Domestic market ups-and-downs have slowed the Group's turnover, which still rose 3% over the previous year. FY 2017 was key for the local Parryware brand, which developed a strategy to reposition itself in the market to target younger, more modern buyers and to expand its sales network through traditional retail and by leveraging its faucet offer. Meanwhile, the Roca brand has continued to grow in the premium segment and has gained visibility through the 'My Bathroom' corporate campaign and influencer activity with architects. Laufen and Armani/Roca have benefited from new showrooms that have opened their doors.

    The main industrial investments have been aimed at acquiring new facilities for the manufacture and assembly of plastic seats, ensuring a production of over two million units per year. The production of plastic products in Indian plants is aimed at the entire Asian market.

    2017 GDP6.7%
    2018 GDP forecast7.4%
    Inflation4%
    Population (in millions)1,354
    INR/EUR trend1.20%
    • The uncertainty generated by government measures to fight corruption and facilitate economic integration between states has led to below-forecast growth (6.7%).
    • After years of steady growth and accumulation of housing stock, the residential construction market has entered a period of stability, with credit restrictions.
  • Thailand

    Stronger relations with the country's main retail chains and presence at new points of sale, plus strategic agreements with new partners, mark the Group's third year of operations in the country. The Group collaborated with the largest project developer in the country and has agreements with regional operators, thus ensuring greater penetration throughout the whole country.

    Launching the Armani/Roca line will also help secure the premium segment and gain visibility for new project contracts.

    2017 GDP3.9%
    2018 GDP forecast3.9%
    Inflation1%
    Population (in millions)69.18
    THB/EUR trend-3.6%
    • The recovery in exports and growth in key sectors (tourism, manufacturing, building and services) propelled economic growth of 3.9%.
    • The positive trend is expected to continue, mainly due to government investment in transport infrastructures.
  • Malaysia

    New competitors have entered the market, and prices have been dropping, thus impacting the Group's sales volume in Malaysia after several years of commendable growth. The Group is expanding into other markets in Southeast Asia through signing new distribution agreements in Bangladesh, Cambodia and Vietnam, where significant projects have also been awarded.

    The Batang Barjuntai plant has stepped up production of its first one-piece toilet, mainly aimed at the domestic market, and has implemented plans to improve productivity.

    2017 GDP5.9%
    2018 GDP forecast5.3%
    Inflation3.8%
    Population (in millions)32.042
    MYR/EUR trend-5.5%
    • Economic growth was 5.9%, above the most optimistic forecasts, mainly due to private sector demand.
    • After years of steady growth and accumulation of housing stock, the residential construction market has entered a period of stability, with credit restrictions.
  • Indonesia

    In keeping with the current expansion strategy—which focuses on high-population markets with considerable prospects for construction—in 2017 the Group signed a joint venture with two local distributors totaling more than 2,700 outlets across the country and covering the main distribution channels in the industry (traditional, DIY and projects).

    Once the company was established, commercial operations were launched and work began on a sanitaryware plant less than 40 kilometers from Jakarta. The new plant will begin operations in 2018 and will have a final capacity of 500,000 units/year.

    2017 GDP5.1%
    2018 GDP forecast5.3%
    Inflation3.6%
    Population (in millions)266.79
    IDR/EUR trend-12.7%
    • Indonesia is the fourth most populous country in the world, with 260 million people. In 2017, it experienced an economic growth of 5.1% thanks to increased investment and consumption, and recovery of exports.
    • The country exhibited some positive macroeconomic indicators, with solid growth in employment and wages, strong consumer confidence and a uniform exchange rate.
  • Australia

    The year was characterized by a strengthening of the Group's offer through launch of products with great potential to grow and add value to the brand. New products include the In-Wash Inspira smart toilet, among others, presented... at about 300 showrooms in connection with Roca's centenary events, ensuring a high profile among key specifiers.

    The project channel also experienced good growth in both the hotel and public works industries. The flagship project was the installation of toilets featuring the exclusive InTank technology in the Perth Concert Hall.

    2017 GDP2.3%
    2018 GDP forecast3%
    Inflation1.9%
    Population (in millions)24.77
    AUD/EUR trend-4.9%
    • With 2.3% growth in 2017, Australia is celebrating 25 years in a row without a recession. Because household debt is high, the current driver is high levels of capital investment.
    • After strong growth in recent years, the new construction market has begun to show signs of weakening: the number of projects has dropped, prices are leveling off and access to credit is not as easy.