Nuremberg/Leinfelden-Echterdingen – (rp) Roto Frank AG reports “fully achieved goals” for 2013. According to the statement by the Board of Directors, the internationally active construction supplier was able to fulfil its own requirement, “to be better and more resilient than markets and competitors”. This is shown by, among other things, the increased turnover of around 1% compared to the previous year, whereas the markets relevant to the company displayed an average decline in value of 8 to 10%. For this reason, the company can indeed speak of the “optimum procedure” it had hoped for several months previously. Despite a “continued difficult market environment with, in part, considerable uncertainties”, the manufacturer of hardware technology and roof windows is also on course for growth in 2014. The good start to the year supports the prediction, but should not be assigned too much significance.
“Many things right”
On the basis of preliminary figures, in 2013 the Roto Group achieved a turnover of close to 658 million euros, explains Dr. Eckhard Keill during “fensterbau/frontale”, held at the end of March in Nuremberg. As the chairman of the Board of Directors explains, the sales revenues not only exceeded the 652 million euros of the previous year by around 1%, it was also higher than the previous record level achieved by the company in the past: namely, 656 million euros in 2011. The new record confirms the success and efficiency of the work put in. Any company able to go against the overall negative market trend with such success must “have done something right”. At Roto, a consistent customer benefit strategy is part of this process.
In the window and door technology division, as represented at the industry trade fair, the turnover remained constant compared to 2012, says Keill. He also added that a “successive catch-up process” was able to compensate for the weak first quarter. Parallels to the previous year’s comparison included the significant regional differences on the one side and, on the other side, the “good Roto position” according to competitor observation. Increases in sales have been achieved, for example, in the USA, Latin America, in some European countries such as France, and in China. Stagnating or even declining sales figures, on the other hand, registered in Germany and Russia.
The head of the company reported strategic acquisitions in Canada (purchase of the company Fasco in autumn of 2012) as “already specifically business relevant” and in Brazil (purchase of the hardware specialist Fermax in spring 2013). The resulting improved growth perspectives and market positions are particularly obvious with the Brazilian acquisition. The investment in the new member of the group “immediately moved us up to second place here”. Further market expansion in the USA and Europe (France, Italy, Turkey) was on the cards.
According to data, the Roof and Solar Technology divisions ended with a moderate plus in turnover in 2013. They had been able to counteract the initial weather-related slump from the beginning of the year with strong growth rates in subsequent quarters. This was primarily a result of the high demand in its core business with roof windows, unlike the general market situation. The recently experienced negativity of the solar sector has reduced, in the meantime, to a negligent “residual size” for future overall development, emphasises Keill. He went on to report that the main market in Germany, along with Italy, Austria and Hungary, contributed good sales figures in 2013. Poland and the Czech Republic, on the other hand, slipped into minus figures.
“Not unsatisfactory”
At the Group level, the relationship between the international and domestic business remains unchanged at two thirds to one third. The number of employees of the construction supplier is, on average throughout the year, approximately 4,400, thus around 300 more people than in 2012. This growth, however, only reflects the company acquisitions in Canada and Brazil. The reduction of asset investments has resulted in negative market development that, at the end of the day, requires no expansion of capacity. The same will probably apply to 2014.
Keill evaluates the profit situation in the reported year as “not unsatisfactory”, particularly in light of the bad market environment. According to him, strict management of costs, efficient processes, as well as the implementation of moderate and, at the same time, necessary price increases have had the desired effects. Overall, Roto has “done major homework”. Thanks to the stable economic condition, it was also possible to finance the investments in acquisitions, for the most part, using own means.
The plan for the first quarter
In his look at 2014, the chairman of the Board of Directors considers the market development to be “once again predominantly sceptical”. As a result, a majority of further declines is to be expected. This is compounded by the “completely unpredictable” nature of individual markets such as Russia. Here, limited regional “torch bearers” are relevant. Whether Germany is one of these and to what extent still remains to be seen.
The Roto Group continues to work towards “continuity in success”. The Group wishes, on the one hand, to detach itself as far as possible from negative markets and, on the other hand, to actively make use of the above-average growth opportunities in North, Middle, and Latin America. A concrete sales target of an increase between 2 and 5% has been named. In the first quarter, the company is “clear about it”. The frequently overused weather argument employed in the construction industry brings relativity to this context. The winter in Germany may have been mild, but this does not apply to other regions, specifically Russia and the USA. Regardless, the current turnover represents a snapshot that cannot be extrapolated to the entire year. Also, the first quarter of the year is generally a period with low significance.
As a foundation for a more positive business policy, Keill described three key factors. First, the company is economically “healthy” and, as a result, offers market partners the necessary security. Second, it is reaching existing growth potential, among other things, by strategic acquisitions and the rapid integration of such into the Group. Third, it is and remains international, innovative, and “close to the customer”. This has been comprehensively documented at “fensterbau/frontale” with numerous product and service innovations as concept studies.
