The rise of Victoria PLC
The British group’s ceramic division closed the last fiscal year with revenue up 15.8% to £282.4 million or 42.6% of consolidated group revenue.
The financial year ending 3 April 2021 was the eighth consecutive year of growth for Victoria PLC, the British flooring group with production and sales activities spanning from ceramic tiles to carpet, LVT, underlay and accessories. The group’s consolidated net revenue reached £662.3 million, up 6.6% on the previous year (+7.4% at constant exchange rates), while EBITDA increased to £127.4 million and EBITDA margin to 19.2%.
What is most impressive is the group’s vertiginous growth in the ceramic tile sector, where Victoria PLC is now one of the world’s top players with the companies and brands acquired in the last 4 years: The first acquisition of Italian tile producer Ceramica Serra in 2017 was followed by Keraben, Ibero and Saloni in Spain, then again in Italy by Ceramiche Ascot and Keradom in 2020, and most recently by Ceramiche Colli and Ceramiche Santa Maria on 21 April this year. This last investment of 35 million euros was necessary to expand the Italian operations’ production capacity (it now reaches 25 million sqm/year) and to extend its product and brand portfolio.
In the last fiscal year – therefore excluding the acquisitions in April - ceramic tile segment revenues exceeded (for the first time ever) those of the group’s core business of soft flooring in Europe. Of the group’s three operating divisions, UK & Europe Ceramic Tiles – which includes all tile segment operations in Italy and Spain – was the one with the biggest increase in revenue, up 15.8% to £282.4 million or 42.6% of consolidated group revenue. Keradom, acquired in December 2020, contributed to the business unit’s balance sheet for a period of four months.
The UK & Europe Soft Flooring division, which includes operations in the carpet, underlay, LVT, artificial grass and accessories segments in the UK, Ireland, the Netherlands and Belgium, posted only slightly lower revenues at £280.4 million (down 0.6% on the previous year), equivalent to 42.3% of the total. The Australia BU also operates in the soft flooring segment and reported sales of £99.6 million.
Moreover, the ceramic tile division is the one that generated the highest margins in the last financial year, despite the 7.7% decline in EBITDA caused by the pro forma effects of the acquisitions of Ibero, Ascot and Keradom. In any case, EBITDA margin stood at 22.3% compared to the soft flooring division’s 17.5%.
The standout performance was that of Victoria Italia, which passed the 100-million-euro revenue mark. Although the outbreak of the pandemic delayed the full integration of Ascot by some months following the acquisition in March 2020, revenues generated in Italy grew by 146% in 12 months, from £34.6 million to £85.2 million due to the acquisition of major new customers and the penetration of new markets, especially in Eastern Europe and North America.
Following the acquisitions of Colli and Santa Maria, Victoria Italia is now heading for 150 million euros. Moreover, as Victoria’s board explained, this operation will add no less than 10 million euros of EBITDA in the first year, a figure that will increase in 2022 as the group insources tile production that is currently outsourced due to lack of capacity.
Alongside its acquisition-based growth policy in the ceramic tile sector, the flooring multinational has continued to make major investments in organic growth. During these 4 years, the group has invested tens of millions of euros in its tile facilities with the aim of improving productivity, quality, logistics and service. This is particularly evident in the case of Ascot, where the process of modernising the polishing department has just been completed and which is now running at a steady profit after just one year. Further confirmation is provided by the plan to make 15 million euros of new investments in Italy in 2021-2022, much of which will be focused on organic growth.
Although it is a listed company and is consequently attentive to the financial aspects of its business, “Victoria is an industrial enterprise operating in the flooring business, not a financial investor, and is interested in the long-term development of the sector”, explained the group’s CEO, Philippe Hamers. “We have very specific plans to grow our presence in the ceramics sector and are currently looking at several opportunities, some of them in Italy. We are especially interested in Italy, as well as in Spain, because the quality and style of ceramic products manufactured here are amongst the best in the world.”
Victoria PLC, which is listed on the London Stock Exchange with a capitalisation of 1.5 billion euros, has around 3,500 employees and more than 20 factories in the UK, Europe, Australia and the United States.