KN36003

KEY NOTE BATHS AND SANITARYWARE : MARCH 2003

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This report covers: baths, sanitaryware, whirlpool baths, combination baths, air injection, bathroom furniture, showers, brassware, legislation, water regulations, shower enclosures, valves, shower trays, vitreous china, plastic baths, metal baths, toilet sets, bathroom mirrors, toilet roll holders, luxury baths, bidets, lavatory pans, flushing cisterns, sinks, washbasins, pedestals, WCs, urinals, porcelain fixtures, ceramic sanitary fixtures, soap dishes, sponge baskets, sanitary pails, bedpans, water closet pans, spittoons, copper sanitaryware, aluminium sanitaryware, stainless steel sinks, iron sanitaryware, pedestals,

Companies covered include: American Standard Plumbing, Jacuzzi, Qualceram Shires, Twyford Bathrooms, Dolphin Fitted Bathrooms, Jacob Delafon, Lecico, Premier Bathrooms, Showerlux, Interbuild, KBB, ISH Frankfurt, The Ideal Home Exhibition, International Trade Exhibitions, Consumer Exhibition,

TABLE OF CONTENTS

REPORT COVERAGE 9

Domestic Sector 9

Contract Sector 9

MARKET SECTORS 10

MARKET TRENDS 10

Wealthier Consumers 10

Table 1: Average Weekly Household Expenditure by Age of Head of Household (000 number and £), 1999/2000 and 2000/2001 10

Property Transactions Broadly Static 11

Table 2: Number of Property Transactions, England and Wales (000), 1996-2002 11

Table 3: Number of Moving Households in England (million and percent), 1984, 1988, 1991 and 1993/1994-2001/2002 12

Home Ownership Increasing 13

Table 4: Households in England by Tenure (000 and percent), 1997/1998-2001/2002 14

Table 5: Owner-Occupier Households by Type of Accommodation (000 and percent), 2001/2002 15

Bathroom Sales Show Strong Growth 15

Design Trends 15

Baths 16

Luxury Baths 16

Brassware and Furniture 17

ECONOMIC TRENDS 17

Population 17

Table 6: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 18

Gross Domestic Product 18

Table 7: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 18

Inflation 18

Table 8: UK Rate of Inflation ( percent), 1998-2002 19

Unemployment 19

Table 9: Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 19

Household Disposable Income 19

Table 10: Household Disposable Income (index 1971=100), 1997-2000 20

MARKET POSITION 20

The UK 20

Table 11: The Bathroom Equipment Market by Sector by Value (£m at msp), 2002 21

Overseas 21

2. Market Size 22

THE TOTAL MARKET 22

Table 12: The Total UK Baths and Sanitaryware† Market by Value at Current Prices (£m at msp), 1998-2002 22

BY MARKET SECTOR 22

Table 13: The UK Baths and Sanitaryware Market† by Sector by Value at Current Prices (£m at msp and percent), 2002 23

Sanitaryware 24

Toilets, Urinals and Cisterns 24

Basins and Pedestals 24

Bidets 24

Baths 24

Table 14: The UK Bath Sector by Type of Material by Value at Current Prices (£m at msp and percent), 2002 25

Luxury Baths 25

OFFICIAL STATISTICS 26

Table 15: The Apparent UK Market for Baths, Sanitaryware, Shower, Baths and Associated Bathroom Accessories by Type of Material (£m at msp), 1998-2001 26

The Domestic Market 28

Contract 29

Table 16: The Estimated Market Share of UK Baths and Sanitaryware Market by Sector by Value ( percent), 2002 29

OVERSEAS TRADE 30

Imports and Exports 30

Plastic 30

Table 17: The Apparent UK Market for Plastic Baths, Shower-Baths and Washbasins by Value at Current Prices (£m at msp and percent), 1998-2001 30

Table 18: The Apparent UK Market for Plastic Baths and Sanitaryware by Value at Current Prices (£m at msp and percent), 1998-2001 31

Vitreous China and Ceramic 31

Porcelain and China 31

Table 19: The Apparent UK Market for Porcelain and China Baths and Sanitaryware by Value at Current Prices (£m at msp and percent), 1998-2001 32

Ceramic 32

Table 20: The Apparent UK Market for Ceramic Baths and Sanitaryware by Value at Current Prices (£m at msp and percent), 1998-2001 33

Metal 33

Copper/Copper Alloys 33

Table 21: The Apparent UK Market for Copper and Copper Alloy Baths and Sanitaryware by Value at Current Prices (£m at ms and percent), 1997-2000 34

Aluminium 34

Table 22: The Apparent UK Market for Aluminium Baths and Sanitaryware by Value at Current Prices (£m at msp and percent), 1997-2000 35

Iron and Steel 35

Table 23: The Apparent UK Market for Iron and Steel Baths and Sanitaryware by Value at Current Prices (£m at msp), 1997-2000 35

Table 24: The Apparent UK Market for Iron and Steel Baths Sanitaryware by Value at Current Prices (£m at msp and percent), 1997-2000 36

Stainless Steel 37

Table 25: The Apparent UK Market for Stainless Steel Baths and Sanitaryware by Value at Current Prices (£m at msp and percent), 1997-2000 37

Imports 38

Table 26: Imports for Porcelain and China Sanitaryware by Country of Origin (£000), 2001 and Year Ending June 2002 38

Table 27: Imports of Other Ceramic Sanitaryware† by Country of Origin (£000), 2001 and Year Ending June 2002 40

Exports 41

Table 28: Exports of Porcelain and China Sanitaryware by Country of Destination, 2001 and Year Ending June 2002 41

Table 29: Exports of Other Ceramic Sanitaryware by Country of Destination (£000), 2001 and Year Ending June 2002 42

3. Industry Background 43

RECENT HISTORY 43

INDUSTRY SYNOPSIS 43

Table 30: Average Financial Performance of Ceramic Goods Sector ( percent, days and £), 2001 44

Number of Companies 44

Table 31: Number of UK VAT-Based Enterprises Engaged in the Manufacture of Ceramic Sanitary Fixtures by Turnover Sizeband (£000), 2000 and 2002 45

Table 32: Number of UK VAT-Based Enterprises Engaged in the Manufacture of Builders' Ware of Plastic Including Plastic Floor Coverings and Other Plastic Products by Turnover Sizeband (£000), 2002 45

Employment 46

Table 33: Number of UK VAT-Based Local Units Engaged in the Manufacture of Ceramic Sanitary Fixtures by Employment Sizeband (number of employees), 2000 and 2002 46

Table 34: Number of UK VAT-Based Local Units Engaged in the Manufacture of Builders' Ware of Plastic and Plastic Floor Coverings and Other Metal Products by Employment Sizeband (number of employees), 2002, 47

REGIONAL VARIATIONS IN THE MARKETPLACE 48

DISTRIBUTION 48

Table 35: Distribution of Baths and Sanitaryware by Type of Outlet by Volume ( percent), 2000 and 2002 49

HOW ROBUST IS THE MARKET? 49

LEGISLATION 50

KEY TRADE ASSOCIATIONS 51

The Bathroom Association 51

The Confederation of European Bath Manufacturers 51

Féderation Européenne des Fabricants de Ceramiques Sanitaires 51

The Independent Bathroom Specialists Association 51

4. Competitor Analysis 52

THE MARKETPLACE 52

Table 36: The UK Baths and Sanitaryware Market by Market Share by Value ( percent), 2002 53

MARKET LEADERS 53

American Standard Plumbing (UK) Ltd 53

Company Structure 53

Current and Future Developments 53

Financial Results 54

Jacuzzi UK Group PLC 54

Company Structure 54

Current and Future Developments 54

Financial Results 55

Qualceram Shires PLC 55

Company Structure 55

Current and Future Developments 55

Financial Results 55

Twyford Bathrooms 56

Company Structure 56

Current and Future Developments 56

Financial Results 57

Other Companies 57

Dolphin Fitted Bathrooms 57

Heritage Bathrooms PLC 57

Jacob Delafon 57

Lecico PLC 57

Premier Bathrooms Ltd 58

Showerlux UK 58

OUTSIDE SUPPLIERS 58

Marketing Activity 59

Main Media Advertising 59

Table 37: Main Media Advertising Expenditure on Bathroom Furniture and Fittings by Selected Companies (£000), Year Ending September 2002 59

Trade Exhibitions 60

Bathrooms & Kitchens Expo 60

Interbuild 61

KBB, Kitchens, Bedrooms and Bathrooms 61

Consumer Exhibition 61

The Ideal Home Exhibition 61

International Trade Exhibitions 61

ISH Frankfurt 61

5. Strengths, Weaknesses, Opportunities and Threats 62

STRENGTHS 62

WEAKNESSES 62

OPPORTUNITIES 63

THREATS 64

6. Buying Behaviour 66

INTRODUCTION 66

Customer Profile 66

Domestic Consumers 66

Table 38: Home Ownership and Dwelling Stock in the UK (million), 1991-2001 67

Consumer Penetration 67

Table 39: Penetration of Baths, Basins, Toilets and Bidets (000 and percent), 2002 68

Table 40: Penetration of Bathroom Fittings (000 and percent), 2002 68

Table 41: Penetration by Social Grade, Age and Household Income (000 of households, years and percent) 69

Housing Affordability Issues 69

Table 42: Housing Affordability Indicators (£ and percent), 1996-2002 70

Contract, Professional Buyers 71

Table 43: New Orders Obtained by Contractors by Value by Type of Work at Constant 1995 Prices (£m and percent), 1998-2002 72

New Housing in the Private and Public Sectors 72

Table 44: Number of Housing Starts in Great Britain (000 of dwellings), 1995/1996-2001/2002 73

Table 45: Number of Housing Completions in Great Britain (000 of dwellings), 1995/1996-2001/2002 73

7. Current Issues 74

THE ROLE OF THE INTERNET 74

EUROPEAN HOUSING MARKET ACTIVITY 74

PRODUCT DEVELOPMENT 75

DESIGN 75

INSTALLATION PROBLEMS 76

brand development 76

Avante 76

Armitage Shanks 76

Bronte Whirlpools 76

Duravit 77

Gerberit 77

Ideal Standard 77

Join Series 77

Kaldewei 77

Laufen 77

PWS 77

LEGISLATIVE AND ENVIRONMENTAL ISSUES 77

Water Regulations 77

Part M of The Building Regulation Act 78

Disability Discrimination Act 2004 78

8. The Global Market 79

Leading Global Players 79

Table 46: Total Annual Sanitaryware Production Capacity by Leading Manufacturers (number of pieces), 2001 79

OVERVIEW OF KEY PLAYERS 80

MAJOR TRENDS 81

US Manufacturers Develop Global Markets 81

The Far East Offers Growth in Sanitaryware 81

The Future 82

9. Forecasts 83

INTRODUCTION 83

The Economy 83

Trends in the Housing Sector 83

Table 47: The Forecast Total Housing Output by Value at Constant 1995 Prices (£m and percent), 2001-2004 84

Trends in the Construction Sector 84

Table 48: The Forecast Total UK Construction Output by Value at Constant 1995 Prices (£m and percent), 2001-2004 85

FORECASTS 2003 to 2007 85

Table 49: The Forecast Total UK Baths and Sanitaryware† Market by Value at Current Prices (£m at msp and percent), 2003-2007 86

FUTURE TRENDS 86

Population Trends 86

Table 50: UK Population Projections by Sex and Age (000 and percent), 1996-2021, 87

Household Trends 87

Table 51: Household Estimates and Projections by Composition (000), 1996-2021, 88

Global Product Development 89

Competition 89

10. Company Profiles 90

American Standard Plumbing (uk) Ltd 91

Jacuzzi Uk Group Plc 93

Twyford Bathrooms 95

11. Further Sources 97

Associations 97

General Sources 97

Bonnier Information Sources 98

Government Publications 99

EXECUTIVE SUMMARY

In 2002, the total UK baths and sanitaryware market was worth £370.5m at manufacturers' selling prices (msp), accounting for 37.5 percent of the total bathroom equipment market of £988m. The baths and sanitaryware market had a growth rate of 3.5 percent from 2001 to 2002. However, baths and sanitaryware has not been the fastest growing market in the total bathroom equipment industry as it has been outpaced by shower, brassware and furniture sales.

Within the baths and sanitaryware market, the domestic replacement business is by far the largest compared with contract replacement. It is dependent upon consumer expenditure on home improvements, which has been strong over the past 2 years, as consumers invest in their properties, given the rising house prices. New housing also presents opportunities for new bathrooms, although growth has been slightly restricted in recent years.

The market is divided into the broad sectors of baths and sanitaryware. The largest individual subsectors are toilets, urinals and cisterns, followed by basins and pedestals. These sanitaryware pieces are composed primarily of vitreous china and, to a lesser extent, plastics and metals. The bath sector also incorporates luxury baths, such as whirlpools and spas. Baths are primarily made of plastic or composite material - the fastest growing areas - with a market also existing for steel baths and cast iron. Bidets show low penetration within the UK market and are not viewed as an essential purchase, especially when space in the typical British bathroom is at a minimum.

The UK baths and sanitaryware market is heavily influenced by overseas manufacturers. First, the leading sanitaryware manufacturers are now owned by overseas groups. Second, given legislative changes in 2001, which permitted the use of a flushing valve and the reduction of UK toilet cistern capacity to 6 litres - in line with the Continent - imports of other brands have increased, with the prospect of even more intense competition in the future.

There are generally mixed forecasts regarding the potential for ongoing buoyancy within the housing market, an essential driver of replacement and new bathrooms. Moreover, consumer confidence is further influenced by economic and global events, such as falling levels in the stock market. In addition, threats of war are likely to have some effect on consumer expenditure in the mid-term. However, given the current strength of the home improvement industry and the growth in the number of en-suites and cloakrooms, there are relatively favourable prospects for housing and construction developments in the public and private sectors.

Key Note forecasts that the baths and sanitaryware market will continue to grow over the period 2003 to 2007, although 2003 is likely to experience a slight slowdown growth compared to 2002.

Text © 2003 Key Note

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Last updated by Amanda Porteous July 2003