Christophe Gourlan, Hansgrohe: Nachhaltiges Wachstum mit smarter Internationalisierung

Thank you Caroline. Yes, I'm the Frenchman from the Swiss border or a Badener with a French accent. I've lived in Germany for almost 30 years, but I still have my French accent. That's something I can't or haven't managed to lose. I've been Head of Sales for 8 years, and with Hansgrohe for 27 years. Before that, I spent four years in medical technology in Thuringia. So I've been working and living in Germany for 30 years, but the largest part of my career has been at Hansgrohe over those 27 years.

Ah, that's the question people often have, and it needs answering. We're a manufacturer from the Black Forest. We make products for sanitary applications — faucets, showers, drains, but also ceramics and bathroom furniture. We have product extensions, maybe we'll talk about product extensions later. We'll be 125 years old next year, the company was founded in 1901. Now, what's the difference between Hansgrohe and Grohe? Hansgrohe was the founder of the company in 1901 here in Schiltach in the Black Forest, and he produced and offered drains and showers for a long time. One of his sons founded a company in northern Germany in the 1930s, and back then everything was together. In the 1970s there was a separation between these companies, between the father and son, and the family. Since the 1970s, Hansgrohe has been two separate families. At first the products were complementary, but since the 1980s both brands have been active with similar names in the market and we are complete competitors. Grohe is the company Friedrich Grohe, or the brand Grohe belongs today to a Japanese corporation. We have two shareholders at Hansgrohe: one American company called Masco, and the second shareholder is the family. That means the son of Hansgrohe, Klaus Grohe, and his four sons own one-third of Hansgrohe. So two shareholders plus one-third family, but the family hasn't been operationally active at Hansgrohe for eight years now.

Well, the market — when we had the podcast with Alexander, that was the beginning of COVID. We had the challenge that we were at around 1.1 billion at the time, I like to round numbers for the auditors. And in the years since, you have to say we were the winners of the COVID period. Why? Two aspects, as you correctly said. During COVID, many people wanted to improve something at home — small renovations, replacements in the bathroom or kitchen, and many people took action. Housing was an important factor for all end consumers and they invested quite a lot, mainly in bathrooms or in small or larger renovations. So demand was very high, and secondly, the big advantage for Hansgrohe was our in-house manufacturing here in Germany. During COVID we could deliver a lot. We were very autonomous. For some showers and faucets we only need raw materials, the rest is in-house manufacturing. In some lines we can produce everything ourselves, and unlike competitors who had supply chain disruptions, we didn't. So we had very nice growth in 2022 and 2023. We even grew to over 1.5 billion. Huge growth during the COVID period. So high demand, good delivery performance — meaning we gained significant market share. The years 2023-2024 brought other crises, other situations, other challenges. We had a small dip in 2023, and in 2024 we achieved flat development with minus one percent compared to the previous year. Today we're looking at approximately 1.4 billion in revenue, so a big push followed by a small dip in the meantime.

Well, when we talk about the German market, we had the energy law change, or at the time it was a draft, which caused a lot of waves and problems in the German market. There was a lot of unrest — nobody knew which heating system to choose. The plumbers had a lot of interaction with customers and it was complete chaos. This political situation hit the heating industry and had a ricochet effect on sanitary ware too. So 2023 was very, very difficult. There were also other supply chain and delivery problems in 2023, but the main problem in the German market was this heating law, which caused a lot of unrest. People wanted to invest in heating, not in bathrooms. Many had already done smaller bathroom renovations during COVID. And the plumbers focused on heating. Now with the changes, there's again a lot of unrest in the market. We were a few days ago at ISH in Frankfurt, the biggest installer and international sanitary and heating trade fair, and we had a lot of conversations with installers. They say yes, there was a lot of unrest in the heating area, and now some normality is returning to the German market in heating. But our partners, the dealers, have a big challenge with this heating law.

Yes, Germany is by far our number one country. We do about 20% of our 1.4 billion revenue in Germany. We're not that dependent on Germany — if there's a crisis in Germany, we can compensate in other countries. Our second market is China, where we're the first German brand manufacturer in sanitary ware in China. A very important market for us where we had good performance last year even though the market was very negative overall. Then come France, the USA, and other countries as the next largest markets worldwide. We have more than 40 own subsidiaries but are represented in more than 100 countries with importers.

We're keeping our feet on the ground and staying calm. We're observing the situation. We're analyzing, like all companies I think, the situation and following the daily news. But for now, we're observing, we haven't taken any action, we haven't made any political statements or reactions. We're watching the current negotiations, and depending on those negotiations we will react. Our strategy has led to the situation where we manufacture in all parts of the world. We've been in Atlanta since 1995 with manufacturing for the USA — we manufacture in the USA for the USA. We've also been in Asia with our own manufacturing for 25 years, and of course in Germany with many production facilities. So our Local for Local strategy, which we've built up over many years, will help us here. Still, we need to see how we organize material flows and tariff situations.

It's still the case. We have design products with two beautiful brands, and AXOR always has distribution that primarily goes through the plumber. If someone wants to replace a small shower head in their bathroom, that's something the user can do alone — a consumer can handle that themselves. But mostly for our installations, for our products, we need the plumber, and he is and remains our main target group worldwide. As I explained before, we have three target groups. The first is the plumber. The second target group is the so-called specifier, or the influencer, the person who specifies — the architect, the interior architect who recommends our brands but doesn't buy. And we have the consumer, the one online who chooses their bathroom or tries to gather ideas via Pinterest, Instagram, TikTok — whatever platforms exist today. Those are our three target groups, and depending on the market or the country, we deal with different installer ecosystems. In some countries we need to do much more training and support for installers. In a market like Germany, we deal with very professional installers. And these three groups buy through our partner, the dealer. The main partner is the wholesaler, the three-tier distribution as you described it. There are also other channels like hardware stores or online customers who also sell our products. The plumber mostly buys from the wholesaler, but also sometimes from hardware stores or online.

So we have no online shop. We still have no direct-to-consumer approach. We always evaluate the strategy and analyze developments, but we say very clearly: our job is to have perfect content up to the transaction, but the transaction is not our job, not our role. We continue to sell — Amazon is the biggest, of course. We sell to Bauhaus, OBI, all the well-known brands, but we also sell to large retailers. So we're active in all channels, but without a direct-to-consumer approach. And the review of our strategy over recent years doesn't show that we'll change that in the future.

The plumber is already quite digital — they order digitally. Some plumbers on a construction site scan a barcode or take a photo and it gets delivered right away by the dealer partner. So there are many digitalization processes with the plumber, with the wholesaler, or with the various players. Today the plumber buys online from wholesale or e-commerce players, and it's mainly about product availability — where are the products available? There are already several players in the market offering such platforms to plumbers, to source all our products or even spare parts. Now, regarding spare parts — we have a very large number of spare parts, so a small volume of our spare parts are sold on online platforms. Through our range, not that many people are interested in selling spare parts. So as I said before, we have online shops in a few countries for spare parts, but it's very small — more of a service than a sales channel.

It's still very important. We started in 2015-2016. We had the BORA-hansgrohe topic for many years, and as you may have seen, about a year ago Red Bull even joined as a major brand. We continue to activate our sponsorship heavily with the plumber theme. There are many cycling fans among the plumbers, and we do many customer event activations with plumbers very often. Why did we get into cycling sponsorship? We want to be First Choice as a brand, as we just discussed. We want to be requested as a brand, and it's about visibility. We have to deal with competitive products and also combat private labels. So we need to make ourselves visible as a brand. And cycling is extremely popular — many people watch it. We've had a partnership in cycling for eight years now, and a few colleagues were in recent days at the Tour de France in Belgium, and again there were thousands, hundreds of thousands of people lining the streets. That's good advertising for us and also good for employee engagement. We have our own cycling team at the company. Many employees ride a lot themselves. So we do a lot with customers but also internally around the topic of sports, and we've been doing this for eight years. We're now the third sponsor. In terms of investment, of course Red Bull arrived as the main sponsor and even became a shareholder of the cycling team. So now we're playing in a different league, and we're happy about the exchange with — to learn from Red Bull, a proper marketing and digital machine, you have to say.

We do that occasionally in some countries, but it's not our core marketing investment. When we look at end-consumer branding, we've done a lot. If we look at China, we've done a lot of TV shows, product presentations, many videos — the way we sell in China is different than in Europe. There, many videos for TV channels or digital tools are used more in China than in Europe. But in Europe, we do have occasional campaigns outside of TV campaigns, but not regularly. We're also too small for that — it's not our main investment.

Sustainability has been a very important topic for more than 100 years at Hansgrohe. Our logo is green, and that's no coincidence, as Klaus Grohe said a few years ago. Now, we need to think about it from the end consumer's perspective. When you look at a shower head, the consumer doesn't know if it's 5 liters, 10 liters, or 15 liters. It's hard to explain digitally how many liters of water come from a shower head or a faucet. We set standards by limiting water consumption at faucets to 4 to 5 liters for single-lever mixers, and for shower heads we have different standards depending on the certification. But it's difficult for us as manufacturers to explain to everyone what's 8 liters, what's 12 liters, and what the difference is. Because when you see 8 or 12 liters, can I shower with 8? Can I not shower with 12? That's difficult. But we set standards and we're launching — we will launch our EcoSmart products worldwide and globally by 2030. So we're very active on the topic of water consumption or energy consumption. Actually, when you reduce water consumption, you also reduce energy consumption. When you as a consumer look at your bill, you sometimes have more energy costs than water costs. If you need less water, you need less energy, and that gives you nice savings. Through our interactions with our customers, we're working on this, and we will manage to only sell EcoSmart products by 2030. That means all products with high consumption will be phased out. We're already at about 60 to 70% with our European customers. So it's a journey, but we're one of the companies that will enable water savings and protect the environment. And that's day-to-day business, I would say.

A shower head uses on average 9 liters, and on average we shower for 5 to 7 minutes. There's always the trend that after 8 minutes you sometimes need more water for a shower than for a bath, depending on the installation. But on average, a user showers for 5 minutes — that's roughly the number we have. So 5 minutes is 45 liters.

Well, on average a consumer changes their bathroom two to three times — well, twice in their lifetime they do a complete bathroom renovation and build a complete bathroom. The plumber does it daily, but the end consumer only does it twice in their lifetime. The renovation activity was high during COVID with many replacement purchases, also many small renovations. As a shower manufacturer, we're very strong in the replacement business. A hand shower and a hose need to be replaced more often than a faucet. The faucet stays in the wall. A hand shower can fall on the ground and gets replaced, or a shower head in a hotel is replaced every 7-8 years on average, and at home every 15 years. So we're in the replacement business and in new construction, and depending on the new construction situation — which is difficult in Germany right now — we have new construction business, but we're more active in renovation and replacement. How do we grow? We want to defend our position with innovation, with beautiful products — we just presented some two weeks ago at ISH — and grow our core business. But we're also investing in new product categories and new markets. A new product category: five or six years ago we launched so-called smart toilets, or Japanese-style WCs in China with great success, and three weeks ago we showed them for the first time in Europe and will launch them in Europe too. So we're entering a new category with smart toilets. We've shown product additions in Europe — new ceramics and bathroom furniture. Our offering is becoming more and more complete in the bathroom. People talk about being a full-range provider — are we complete? No, we don't have tiles or shower enclosures, but we're offering more and more components for the bathroom. So we're growing through new product categories, but we have to be careful to maintain our core business well. On the topic of markets: we're not present in all markets. We have many subsidiaries worldwide, but in some countries we had small market gaps or an old importer, and we're now building up a direct presence. Two years ago we established a subsidiary in Romania. In Greece, because we had a traditional importer for a long time, we had no direct control. We'll set up in Greece by the end of the year. So in many parts we're also just two European countries. We're looking at new structures in Africa or in Asia, and we're opening up new markets. That's our growth through investment in new sales structures and new customer structures abroad.

In business? Ah, good question. Well, I was very pleased — two weeks ago we had ISH, we had about 55,000 visitors at our booth alone. We had a lot of customer interaction, a lot of positive customer exchanges, and that was very positive. I look forward to every trip. I'm traveling extensively to all parts of the world. If I were to give a personal opinion, I would be happy to fly to Ukraine and Russia again. We had a long-standing presence there, unfortunately not anymore today, and it would make me very happy to be able to travel there again — which would mean an end to this stupid situation and this war. I saw a few customers from Ukraine a few weeks ago, and for three years I've told them I'll come as soon as I'm allowed and we can. It would give me great joy to go there and to revisit customers I saw in Germany or old customers I saw 20 years ago in Eastern Europe. So if I had a wish or if I could fulfill a dream, it would be to see an end to this, because those are two beautiful countries that don't deserve this.