Sales Figures Roto Frank AG by liaoqinmei

VIEWS: 4 PAGES: 6

									Press information


Date: 11th May 2011


Roto Group experiencing strong growth / Unexpected surge in demand in
2010 / Record sales instead of stagnation / Better during the crisis – better
out of the crisis / More market shares and more employees / Doubt about
robust economic upturn / Medium-sized companies need “real framework
conditions” / The “raw materials prices” negative factor / Target of 700 million
Euros turnover for 2011 / Building supplier: Success through our own
strengths


A well-founded company boom


Leinfelden-Echterdingen – (rp) Roto Frank AG has declared that it
made a “satisfying mistake” for the business year 2010. Whereas the
building supplier had originally expected only stagnation in terms of
sales, according to the figures now presented its sales revenue
actually increased by 14.5% compared with 2009, and consequently
by the end of the year reached the highest level in the 75-year history
of this family-run company. This is primarily the result of an
“extraordinarily positive company boom” and not a general market
recovery. In 2011 too, the producer is aiming to rely primarily on the
company's “own level of performance” and is therefore aiming for
“high single-digit growth”. The increase in the 1st quarter “clearly”
exceeded the forecast for the year. Nonetheless, the picture is by no
means worry-free. For example, the significant increase in the price of
the most important raw materials over the year has placed a
noticeable strain on the cost side – and therefore also on the earnings
side.


“V-formation” in Russia


In the opinion of Dr. Eckhard Keill, the building sector which is crucial
to Roto is “emerging from the crisis rather sluggishly”. The conclusion
reached by the Board Chairman of the building supplier is that it is still


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lagging far behind the general economic upturn. This picture includes
very different regional trends, with the international windows and
doors markets displaying almost mirror-image development. In 2010,
negative influences predominated here. This applied to, among other
regions, western and southern Europe. The Iberian countries were
particularly affected. On the other hand, the Roto boss once again
reported positive industry trends from Germany, Austria and
Switzerland, as well as from Asia. Russia represents a special case.
Following the extreme collapse in 2009, the market there recovered
significantly overall in 2010. This means that it already forms part of
what is referred to as the “V-formation”, which refers to an immediate
counter-reaction following on from a marked downturn.


For the medium to long term, Keill is sticking to his assessment that
windows will continue to profit from the necessary global climate
protection and energy-savings investments, as well as from the
general tendency towards modernisation. The current discussion
about nuclear power and the associated consequences for future
energy supplies will extend the range of uses for modern generations
of windows. A reliable state support policy will be helpful in this
respect.


A new record


Keill had this to say about the Roto Group's performance: “In 2009, we
performed better than others during the crisis, and in 2010 we also
emerged from it in a better position than others.” Clear indications of
this are the ongoing gains in market shares and the company's ability
to detach itself from negative market developments and participate
fully in positive flows. In all, this led in 2010 to a 14.5% increase in the
group's sales to 641.2 million Euros (after 560 million Euros) that was
“as strong as it was unexpected”. After a “sluggish” 1st quarter, a
“very surprising upswing in demand” ensured – on balance – good
business trends during the following period. At the end, this enabled
the company to set a new sales record that was significantly more



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than the previous record (621 million Euros) set in 2008. This puts the
company some way ahead of the building industry in general, which
will not succeed in making good the losses incurred during the crisis
until 2012 or 2013.


Both divisions of the company each achieved similar growth.
However, regional trends were very different. In the Window and Door
Technology division, a moderate increase in Germany contrasts with a
marked increase in foreign business. This means that Roto made
strong gains on a market that was continuing to decline in southern
Europe. Keill also reports “greater dynamism” in the case of Russia
and Asia.


On the other hand, domestic business was the clear “driving force” in
the Roof and Solar Technology division. The boost here was primarily
a result of high demand for energy roofs. Earnings from sales abroad
were roughly at the same level as in 2009. In the Group as a whole,
the ratio between foreign and domestic settled at around two thirds to
one third.


Earnings under pressure from costs


On average for the year in 2010, the number of employees working for
the family-owned building supply company increased by around 7% to
some 4,000 (up from 3,750). Investments remained at the previous
level. This means that “Roto is investing in the areas that will advance
the company and its customers”.


It also earned money in the year just ended. Nevertheless, the
earnings situation must still be characterised as “unsatisfactory”.
According to Keill, the reasons for this were the in some cases much
higher procurement costs for important raw materials such as zinc and
steel. Otherwise, this trend will continue unchanged in 2011 despite
the most recent slight easing of the situation, which means that it is
necessary “to talk to customers about price adjustments”.



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Cautious optimism


The trend should also be upward in 2011. Since Keill expects “high
single-figure growth in sales” in both the Group and the two divisions,
the short-term target of 700 million Euros in total is “at least coming
within reach”. The positive developments in the first quarter, with
growth rates well above the forecast for the year, supports this
optimism. Nevertheless, Roto does not want to put forward estimates
for individual markets. The main reason cited for this is the existing
potential uncertainty that may be increased again due to recent
international events. Possible economic risks could also result from
the extremely high levels of national debt coupled with the need for
drastic savings packages, unstable financial and currency markets
and the expiry of most “gigantic” support programmes. Keill: “The
upturn is by no means as robust as many people believe.”


In Germany in particular, he warns politicians of the need for the “right
framework conditions” for small businesses. In his view, the current
discussion about temporary work (for example) cannot be reconciled
with this. Instead, it threatens “the foundations” of companies. His
opinion is that only with temporary workers is it possible to cover the
often marked seasonal order and production fluctuations. Keill states
that anyone wishing to limit or even eliminate this possibility puts at
risk German locations and thus, of course, “normal” jobs also. This
means that at the same time, the path repeatedly taken at Roto of
transforming temporary jobs into permanent ones is being obstructed.
He feels that contrary to the polemics of IG Metall boss Berthold
Huber, temporary work is neither “rubbish” nor “exploitation”, but an
essential flexibility tool in a global economic structure.




Strengths safeguard perspectives



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Irrespective of this, the number of employees in the Roto Group will
probably continue to increase with a view to the expected increase in
turnover. In addition, the targeted investment policy with respect to
markets and products will continue to be pursued thoroughly in 2011.
As a result, the introduction of a comprehensive new generation of
locks is planned for the middle of the year, which will make the
manufacturer the most complete door technology supplier.


The Roto boss summarises that the on balance “satisfying company
data and perspectives” that also open up the possibility of “appropriate
acquisitions” create a stable and healthy economic basis within the
company. He cites the sustained ability to supply, professional
customer support in the field of production optimisation, the innovative
product portfolio of both divisions that is geared towards the market
and the building supplier's high level of international competence as
being some of the Group's assets. Current awards from neutral
institutions such as “Top German Employer 2011”, “Best Factory in
Germany” and “Factory of the Year”, as well as inclusion in the
“Lexicon of German World Market Leaders”, are likewise concrete
evidence of Roto's good position.




Photo captions


The trend in the Roto Group should continue on an upward curve for
2011 also. According to Dr. Eckhard Keill, the company is expecting
“high single-figure growth in sales”. The Board Chairman emphasises
that in general, the building supplier enjoys a stable basis for a
sustained company boom.


Photo: Roto                                               Dr_Keill.jpg




                                                                           Page 5/6
Roto Frank AG has declared that it made a “satisfying mistake” for the
business year 2010. Whereas the building supplier had originally
expected only stagnation in terms of sales, according to the figures
now presented its sales revenue actually increased by 14.5%
compared with 2009, to 641.2 million Euros, and consequently
reached the highest level in the 75-year history of this family-run
company. It also reports “significant market share gains”.


Graphics: Roto                                               Gruppenumsatz.jpg




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