Clearview Midlands January 2014 - Issue 146

HARDWARE&SECURITY “Slowly but steadily catching up” CFO Michael Stangier outlined the current situation and future prospects for Roto Group. He recalled the starting point in 2012: sales volume of 652 million Euros, just slightly below the previous year’s record level (657 million Euros). With the market downturn looming or already a reality in some sub-sectors, this slight decline, coupled with a gain in market share, marked a business success for Roto. The company’s goal for 2013 (“Outperforming markets and our competitors”) was translated into a key message: “When markets are shrinking, stagnation can actually represent success.” Roto has been able to live up to this and may even exceed its own expectations. As of the end of September, the turnover of the Window and Door Technology Division was only slightly down compared to same period of the previous year. It was possible to compensate for the weak first quarter by “slowly but steadily catching up”, Mr. Stangier explained. Just like 2012, the year 2013 has been characterised by significant regional differences and a strong position of Roto compared to its competitors. In the USA, Latin America, China and some European countries like France, Roto but the acquisition “immediately put us in second place”. Roto has also succeeded in gaining market share in the USA and Europe (France, Italy and Turkey). Core business thriving The situation of the Roof and Solar Technology Division as of the end of September shows a moderate sales increase compared to last year. Two-digit growth rates during the second and third quarters succeeded in evening out the sharp downturn caused by unusual weather conditions at the beginning of the year. The main reason for this reversal in trends was high demand for the Division’s core business – roof windows. Solar technology, which has previously generated negative results, has been reduced to “a residual share” and therefore will no longer represent a burden in the future. Core markets such as Germany, Italy, Austria and Hungary have produced sound sales figures; Poland and the Czech Republic have slipped into the red. The bottom-line for the 4th quarter is positive, so the optimistic annual growth forecast for this Division seems justified. Increased headcount due to acquisitions has been able to achieve sales growth. By contrast, Germany and Russia saw stagnation or declining sales figures. The CFO also emphasised that strategic acquisitions in Canada (Fasco takeover in fall 2012) and Brazil (acquisition of hardware specialist Fermax in spring 2013) “are already having an impact”. These acquisitions have lead to significantly increased growth potential and improved market positions, as demonstrated in Brazil. Before acquiring Fermax, Roto had been barely present on the Brazilian market, To read more, visit www.clearview-uk.com The total revenue of the Roto Group as of September 30, 2013 amounts to 506 million Euro, Stangier said. This is 0.5% less than in the previous year, but in the light of an average market loss of 8 to 10%, it can be considered “quite satisfactory”. The main task now is to sustain this trend, so that the company can reach last year’s sales figures of 652 million Euro by the end of 2013. If “everything goes well” there might even be a slight increase. The ratio of international and domestic business on group level is roughly 2/3 to 1/3. The annual average company headcount amounts to 4,400 – an increase of more than 300 employees compared to 2012, due to company acquisitions in Canada and Brazil. Investment in real assets has been reduced, since negative market trends mean that no additional capacities are needed. The picture for 2014 is similar. Thanks to the company’s solid economic position, it was possible to finance recent acquisitions almost entirely from Roto’s own resources, Stangier explained. In terms of profits, the situation “is far from euphoric”, but given the negative market environment it is “not unsatisfactory”. Stringent cost management, efficient processes and moderate but necessary price increases have made this possible. In summary, Roto “has done its homework”. These efforts were also confirmed by the “Hoppenstedt Top Rating” Award 2013 for “creditworthiness”. Focus on increasing sales  Eckhard Keill’s prognosis for 2014 is for another “difficult year”. A downturn is expected on most markets, only counterbalanced by a few regional “sources of optimism”. The Roto Group is still striving for “Continuity in success”, by disconnecting from flagging markets and tapping into extraordinary growth opportunities in North, Middle and Latin America. A sales target of 2 to 5% plus has been set. The group’s financial stability also makes further corporate acquisitions possible, the next of which may be announced as early as the first quarter of 2014. Dr. Keill concluded with five key points: Roto has been able to stand its ground during a difficult 2013 and has been able to maintain high sales levels. The company remains financially “sound and stable”, offering its market partners the stability and reliability they need. Roto seeks extraordinary growth opportunities by making strategic acquisitions and integrating them seamlessly into the group. It has the strength to gain additional market share in 2014. Th

Clearview Midlands January 2014 - Issue 146 | Page 61