European Home Improvement Monitor Q 4 2018 Focus

European Home Improvement Monitor Q 4 2018 Focus on: Do-It-Yourself vs Do-It-For-Me

European Home Improvement Monitor Q 4 2018 Preface One of the reason that we started our market study, the European Home Improvement Monitor, six years ago, was TEAM Members the expected change in the European DIY market. Due to the aging population in Europe, we were expecting that the older generation would stop doing home improvement jobs themselves and would hire a professional instead. On top of this, the younger generations were losing interest in developing DIY skills. Both developments could lead to a shift REINIER ZUYDGEEST, MSc from Do-It-Yourself towards more Do-It-For-Me, which is an important trend because it could result in a change in Managing Consultant purchase channels or worse, a decline of spending on home improvement products. This is because of the fact that +31 626936109 the more budget consumers will spent on labour, the less budget remains available for the home improvement @ zuydgeest@usp-mc. nl products. In this report we present how this trend has been evolving over the past 5 years on a European level (chapter 1), and on country level (chapter 2). We also look into consumers’ attitude towards learning DIY skills and bringing them to practice. In chapter 4 you will also find these trend insights for your product category. MAJA MARKOVIC, MSc Senior Research Analyst +31 102066992 @ m. markovic@usp-mc. nl The topics that will be covered in 2019 are: Q 1 Focus: Orientation. Theme topic: New ways of searching Q 2 Focus: Purchase channels. Theme topic: Amazon, threats & opportunities Q 3 Focus: Branding. Theme topic: Buying projects instead of products Mr. DIRK HOOGENBOOM Research consultant +31 652098924 @ hoogenboom@usp-mc. nl Q 4 Focus: DIY vs DIFM. Theme topic: Multi-year developments in home improvement If there any suggestions or remarks on our reports, please let us know. We’re always looking for ways to improve, so your feedback is more than welcome.

Management summary Learnings from the DIY vs DIFM theme Key Findings D D FM Y Do-It-For-Me Do-It-Yourself • • Key finding 1 (in full report) Key finding 2 (in full report) European home improvement barometer • Key finding 3 (in full report) 3

European Home Improvement Monitor Q 4 2018 Contents European developments European overview Focus on DIY vs DIFM Country overview Focus on DIY vs DIFM Home improvement per category

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT Market trends affecting the DIY market DIY stores need people who want to do DIY jobs. Young people are less skilled and for this reason more likely to outsource the jobs. Consumers who traditionally do DIY jobs are becoming older and as the years go by, they grab the toolbox less often. The contractors who are hired to do the home improvement jobs often do not buy their products at the DIY store, but at professional wholesalers. Currently, XX% of all European home improvement jobs are done by consumers themselves (see page 9). In 2014 this was still XX%. This means that. . . Of course, this trend has already been expected years ago by the DIY retailers, and several solutions are being offered to the consumer. Some examples of these solutions are installation services. . . Not only the generational changes have an effect on the DIY market. Two other market circumstances are affecting the DIY market as well. • First, there is an increase in the number of single-person households. XX% of households in the EU were single-person households without children in 2017, compared to XX% in 2010. People who live alone. . . • Second, the requirements to get a mortgage have become stricter since the financial crisis. It became more difficult for homebuyers to obtain additional funding in their mortgage on top of the purchase price… Unfortunately, there is not much the DIY sector can do about these two circumstances. Therefore… 5

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT Importance of gaining knowledge on home improvement Conclusion can be found in full report. 6

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT European spending on home improvement SPENDING (BILLIONS) (labour + material) € 140 € 120 € 100 European spending overview can be found in the report. € 80 € 60 € 40 € 20 € 0 Q 1 15 Q 2 15 Q 3 15 Q 4 15 Q 1 16 Q 2 16 Q 3 16 Q 4 16 ACTUAL Q 1 17 Q 2 17 Q 3 17 Q 4 17 Q 1 18 Q 2 18 Q 3 18 Q 4 18 FORECAST*

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT Share of households conducting a home improvement job 2018 2017 Full overview is shown in the report. The dotted part of the line is a forecast, after 6 months the share of households that conducted a home improvement job becomes definite. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec N = 2. 200 interviews per month Consumer confidence level -3. 7 -4. 1 -4. 8 -5. 0 -5. 4 -5. 3 -5. 5 -6. 2 -5. 9 -6. 6 -8. 3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT DIY/DIFM home improvement market A high percentage of home improvement jobs are still DIY jobs. However, we see a clear trend towards DIFM developing over the years, since it has increased with almost two percent point since 2014. 67. 6% 67. 2% 67. 0% 66. 7% DIY share 65. 8% DIFM share 32. 4% 2014 32. 8% 33. 0% 33. 3% 2015 2016 2017 Q: Who was involved in (performed) the work activities ? Results in this chapter (EU averages) are weighted in order to account for population size. N approximately 13. 000 interviews per year. 34. 2% 2018 9

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT DIY home improvement market Country X consumers are still the most involved in DIY projects. Traditionally, the DIY market is the least popular in Country Y, which is also the case in 2018. Full overview in the report. % of people who did a project on their own (DIY) 2014 Q: Who was involved in (performed) the work activities ? N approximately 13. 000 interviews per year. 2015 2016 2017 2018 10

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT Whether [or not] a consumer decided to conduct a home improvement job on his own, depends on his DIY experience. % of people who did a project on their own (DIY) Full overview in the report. No experience Decorator "Light" DIY-er Renovator [DIY experience] Q: Who was involved in (performed) the work activities ? Results in this chapter (EU averages) are weighted in order to account for population size. N approximately 65. 000 interviews. 11

European developments KEY FINDINGS | EUROPEAN SPENDING | EUROPEAN HI BAROMETER | DIY / DIFM DEVELOPMENT DIY home improvement market – per income category DIY home improvement market – per age group European consumers with a lower income are more likely to … One of the key drivers of DIFM is aging. The older consumers are looking for…. % of people who did a project on their own (DIY) Full overview in the report. Under € 2, 000 to € 4, 000 Over € 4, 000 [Income category] Q: Who was involved in (performed) the work activities ? Results in this chapter (EU averages) are weighted in order to account for population size. N approximately 65. 000 interviews. 18 - 34 35 - 54 55 or older [Age group] 12

European Home Improvement Monitor Q 4 2018 Contents European developments European overview Focus on DIY vs DIFM Country overview Focus on DIY vs DIFM Home improvement per category

European overview INTRODUCTION | DIY PROJECTS | DIFM PROJECTS Theme questions covered in the report In this chapter the European overview regarding DIY and DIFM jobs will be shown. The respondents were asked the following questions about DIY & DIFM: D D FM Y To what degree do you like to do decorative DIY jobs yourself? To what degree do you like to do constructive DIY jobs yourself? Would you like to learn more DIY skills? How do you prefer to learn more about doing DIY jobs? Where do you expect to get advice for doing a DIY job yourself? What would make you do more of your home improvement jobs yourself? For which of the following home improvement jobs would you prefer to hire a professional to do the job for you? In what order would you select the products and professional? How many times a year do you hire a professional to do a home improvement job for you? What are, for you, the most important selection criteria when selecting a professional to do a home improvement job for you? Instead of hiring a professional yourself it is also possible to get a professional via the installation service that is offered by a store or website where you purchased your home improvement products. What are the most important aspects that this installation service should offer you? How do you normally select a professional for your home improvement jobs? Do you prefer to hire a professional that can do all sort of home improvement jobs or do you prefer to hire a specialist for various tasks? What would make you outsource more of your home improvement jobs to professionals? 14

European Home Improvement Monitor Q 4 2018 Contents European overview Focus on DIY vs DIFM Country overview Focus on DIY vs DIFM Home improvement per category 15

Country overview INTRODUCTION | MARKET SIZE & DIY/DIFM DEVELOPMENT | KEY FACTS - DIY | KEY FACTS - DIFM The European overview regarding online buying and purchase channels for home improvement jobs was illustrated in the previous chapters. In this chapter, we will zoom in on the separate countries to give a more specific view of the home improvement market in Europe. We will start with the penetration rate of the home improvement jobs. This is reported by the percentage of households that have done at least one home improvement job in a particular quarter. On the same slide, development of the DIY/DIFM jobs over years will be presented. Next, all the information on theme part is shown per country. Country specific key findings are presented for all 11 countries in the report. D D FM Y 16

Country overview INTRODUCTION | MARKET SIZE & DIY/DIFM DEVELOPMENT | KEY FACTS - DIY | KEY FACTS - DIFM Number of home improvement jobs EU average Belgium Q 1 14 Q 2 14 Q 3 14 Q 4 14 Q 1 15 Q 2 15 Q 3 15 Q 4 15 Q 1 16 Q 2 16 Q 3 16 Q 4 16 Q 1 17 Q 2 17 Q 3 17 Q 4 17 Q 1 18 Q 2 18 Q 3 18 Q 4 18 DIY/DIFM development over years DIY share DIFM share 2014 2015 2016 2017 2018 N = 2. 400 interviews per year. 17

Country overview INTRODUCTION | MARKET SIZE & DIY/DIFM DEVELOPMENT | KEY FACTS - DIY | KEY FACTS - DIFM 25% of Belgian consumers would like to learn more DIY skills. They prefer to learn it by doing the job with someone experienced, or by watching online videos on Google. They would do more DIY if their skills would be improved. About DIY behaviour in Belgium Would you like to learn more DIY skills? HOW? – Top 5 Yes/Maybe YES MAYBE 25% NO 45% 28% Online videos 47% By doing with someone experienced 47% 26% Reading articles Main motivations for doing more DIY WHERE? – Top 5 Improve skills 43% Easier to install 29% More time If I had less budget 11% Easier to get support 24% Workshop in a DIY store 23% Yes/Maybe 18% Staff in DIY store 54% 43% 5 4 3 2 1 24% 15% By doing with a professional Documentation 35% www. DIY store Manufacturer 34% 33% N = 561

Country overview INTRODUCTION | MARKET SIZE & DIY/DIFM DEVELOPMENT | KEY FACTS - DIY | KEY FACTS - DIFM About DIFM behaviour in Belgium Belgian consumers mainly hire a professional to do a roof window installation or kitchen/bathroom renovation. They prefer to hire a specialist based on his reliability. They usually hire him via friends and family. The main limitation for DIFM jobs is expenses. They would do more DIFM if hiring was cheaper. PREFERRED JOB [Top-3] Roof window 59% Kitchen renovation 56% Bathroom renovation 56% PREFERRED PROFESSIONAL Specialist 49% Generic professional SELECTION CRITERIA SELECTION METHOD [Top-3] Reliability of the professional Clear and specified invoice Guarantees that are given 11% 65% 42% WHEN TO CONSIDER MORE DIFM? Friends and family I know several professionals I already have a regular professional 32% 28% 20% 14% If hiring was cheaper If I was older / less capable Having a higher budget 38% 27% N = 561

European Home Improvement Monitor Q 4 2018 Contents European overview Focus on DIY vs DIFM Country overview Focus on DIY vs DIFM Home improvement per category Paint

European Home Improvement Monitor Q 4 2018 Contents Available product categories: • • • • Adhesives & sealants Bathroom products Fixings Flooring HVAC products Insulation Kitchen products Paint and paint supplies Tools Roof daylight Safety & security Wallpaper Window decoration 21

Home improvement per category HOME IMPROVEMENT BAROMETER | DIY / DIFM DEVELOPMENT Share of households conducting a paint job [Total] Full overview is shown in the report. 2017 2018 The dotted part of the line is a forecast, after 6 months the share of households that conducted a home improvement job becomes definite. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Share of households conducting a paint job [Quarter comparison per country] 8. 7% 9. 5% 9. 6% 9. 9% 11. 5% 11. 6% 14. 3% 13. 8% 12. 9% 13. 0% 16. 4% 15. 6% 11. 4% 11. 0% 9. 1% 9. 4% 8. 5% 8. 9% 11. 7% 13. 2% Q 4 -17 Q 4 -18 Full overview is shown in the report.

Home improvement per category HOME IMPROVEMENT BAROMETER | DIY / DIFM DEVELOPMENT DIY/DIFM home improvement market (EU) DIY share DIFM share 2014 2015 2016 Q: Who was involved in (performed) the work activities ? Sample size depends on the incidence rate for this category – share of households conducting a job 2017 Doing a paint job is most often a DIY job, but the share of DIFM is growing over the years. 2018 23

Home improvement per category HOME IMPROVEMENT BAROMETER | DIY / DIFM DEVELOPMENT DIY/DIFM development (per country) DIY 2014 80, 5% 85, 0% 78, 5% 37, 9% 81, 7% 73, 1% 72, 3% 81, 1% 72, 7% 66, 7% 68, 5% 2015 75, 0% 82, 4% 74, 4% 40, 7% 86, 4% 73, 0% 63, 3% 79, 3% 70, 8% 74, 0% 67, 8% 2016 73, 6% 86, 2% 76, 2% 36, 8% 74, 6% is 66, 6% 58, 7% Full overview shown in the report. 72, 1% 65, 6% 76, 7% 66, 7% 2017 76, 0% 81, 3% 76, 4% 34, 1% 68, 3% 54, 0% 48, 6% 77, 4% 60, 7% 71, 7% 55, 0% 2018 72, 3% 81, 9% 79, 8% 25, 8% 71, 2% 55, 0% 58, 8% 65, 6% 55, 4% 67, 0% 64, 5% Full overview is shown in the report. DIFM 2014 19, 5% 15, 0% 21, 5% 62, 1% 18, 3% 26, 9% 27, 7% 18, 9% 27, 3% 33, 3% 31, 5% 2015 25, 0% 17, 6% 25, 6% 59, 3% 13, 6% 27, 0% 36, 7% 20, 7% 29, 2% 26, 0% 32, 2% 2016 26, 4% 13, 8% 23, 8% 63, 2% 25, 4% 33, 4% 41, 3% 27, 9% 34, 4% 23, 3% 33, 3% 2017 24, 0% 18, 7% 23, 6% 65, 9% 31, 7% 46, 0% 51, 4% 22, 6% 39, 3% 28, 3% 45, 0% 2018 27, 7% 18, 1% 20, 2% 74, 2% 28, 8% 45, 0% 41, 2% 34, 4% 44, 6% 33, 0% 35, 5% Q: Who was involved in (performed) the work activities ? Sample size depends on the incidence rate for this category – share of households conducting a job 24

Home improvement per category HOME IMPROVEMENT BAROMETER | DIY / DIFM DEVELOPMENT DIY home improvement market – per DIY experience % of people who did a project on their own (DIY) 84. 5% 74. 8% Full overview is shown in the report. 63. 4% No experience Decorator "Light" DIY-er The more DIY experience a consumer has, the more likely … Renovator [DIY experience] Q: Who was involved in (performed) the work activities ? Sample size depends on the incidence rate for this category – share of households conducting a job 25

Home improvement per category HOME IMPROVEMENT BAROMETER | DIY / DIFM DEVELOPMENT DIY home improvement market – per income category DIY home improvement market – per age group % of people who did a project on their own (DIY) 71. 0% 74. 3% 68. 2% Full overview is shown in the report. Under € 2, 000 to € 4, 000 Over € 4, 000 [Income category] Q: Who was involved in (performed) the work activities ? Sample size depends on the incidence rate for this category – share of households conducting a job 69. 2% 18 - 34 35 - 54 55 or older [Age group] 26

European Home Improvement Monitor Q 4 2018 Contents APPENDIX: FOCUS ON METHODOLOGY 27

Background of the sample Overview We use a national representative sample for our study. This includes all type of consumers aged 18+. Men and women, house renters and owners, people who conduct DIY jobs themselves and people that outsource it to professionals. GENDER DISTRIBUTION % of interviewed men 51% 48% 48% 45% 50% 55% 49% 50% 52% 49% % of interviewed women 49% 52% 52% 55% 50% 45% 51% 50% 48% 51% 55 years and more 36% 37% 39% 40% 29% 33% 35% 34 -54 years 35% 38% 35% AGE DISTRIBUTION 18 -34 years 36% 30% 36% 35% 34% 26% 26% 27% 29% 38% 43% 36% 31% 32% 35% 29% 25% 32% 28

Methodology Overview INCLUDED CATEGORIES WEIGHING FACTOR General home improvement figures are based on 37 selected products: All European figures are weighted in order to account for the population size of the countries. 1 "BATHROOM" 20 "FLOOR" 2 "KITCHEN PLUS appliances" 21 "RADIATOR" 3 “GARDEN" 22 "RADHEAT" 4 “LIVING ROOM" 23 "SWITCH MATERIAL" 5 “BEDROOM" 24 "SEALANTS" 6 “ATTIC" 25 "MORTARS" 7 “OTHER ROOMS" 26 "WALLPAPER" 8 “EXTERIOR" 27 "INTERIOR DOOR" 9 "HVAC" 28 "WINDOW DECORATION" 10 “SECURITY PRODUCTS" 29 "TILES" 11 "TOOLS" 30 "PLUMBING" 12 "GYPSUM BLOCKS" 31 "TILE GROUT" 13 "DRYWALL" 32 "FILLER" 14 "WOOD&BOARD MATERIAL" 33 "TAPES" 15 "INSULATION MATERIAL" 34 "SANDPAPER" 16 "PLASTER" 35 "BRUSH" 17 "PAINT" 36 "ROLLER" 18 "LIGHTING" 37 "PAINT SPRAYER" SAMPLE SIZE 1 st chapter: EU results are based on 26, 400 interviews per year 2 nd chapter – Theme part: EU level based on 6, 282 interviews conducted in Q 4 -18 3 rd chapter – Incidence rate (number of home improvement jobs) is based on 2, 400 per country; Theme questions on approx. 600 interviews per country 4 th chapter – sample size depends on the incidence rate of the product category (see page 65 – share of households conducting a job) 19 "TILE ADHESIVES" 29

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