Roto reports success beyond expectations

The Roto Group is on course to achieve its highest ever worldwide sales figures, although the directors have urged there is “no place for euphoria” because the international marketplace remains difficult.

The German manufacturer’s CEO, Dr Eckhard Keill and Chief Finance Officer Michael Stangier were the key speakers addressing 60 journalists from 11 different countries at the company’s fifth annual press conference in Barcelona on 13 October.

Roto chose the Catalan capital as its venue to reflect the fact that the Southern Europe region has been one of its key success areas. In Spain alone, Roto has managed to continue to increase sales by taking a greater market share, even whilst the market there declines in size.

The Roto board were readily prepared to admit they had been slightly too pessimistic in their forecast for 2010 when they made it twelve months ago. At that time, the prediction was for sales to remain fairly static and, in the best case scenario, to begin to pick up towards the end of the year.

“We were completely wrong there”, said Stangier, “but are quite happy about it today”. He went on to report that, following a “sluggish” first quarter, the second and third quarters saw a “completely unexpected increase in demand”. This has led to the total sales revenues for the first three quarters being 16% up on those for the same period of the previous year.

The team were keen to stress that the global construction sector remains far from the pre-crisis level, and that the effect is felt by the directly-reliant door and window industry. Roto claims the “outstanding delivery performance” of its group companies has been a key factor in helping it gain market share as well as cope with the surge in demand for its products.

Michael Stangier also claimed that Roto’s positive ethos of investment, coupled with intelligent cost management, had helped give it the edge. He cited examples such as investments in new manufacturing processes, forays into new markets and the continued development and introduction of new products. He also said withdrawal from relevant markets was never a consideration, even at the height of the global crisis, and that Roto had not chosen options such as mass redundancies, plant closures or relocations.

Eckhard Keill had words of caution for some of his fellow countrymen, saying that many German commentators had been overly euphoric when talking-up the recovery of Germany’s economy. He claimed the growth rate of 2 to 3% expected for 2010 should not be considered alone, because the nation’s GDP had dropped by almost 5% in 2009. He also noted that the upturn by no means affected all branches of industry, and said that although Germany was currently one of the motors for economic recovery in Europe, this was primarily due to its performance as an exporter.

Regarding the European construction sector, the Roto chief sees confirmation of the opinion he has expressed since 2009: that the industry will suffer longest in the crisis.

According to the most recent figures from Euroconstruct, based on data from 19 countries, the volume of construction in Europe will drop for the third consecutive year with a decrease of  -4% in 2010.

This equates to an increase in the total loss since 2008 of approximately 15%. The greatest drop was experienced in the construction of new apartments. According to the forecasts, investments this year will be approximately 40% lower than in 2007. The decrease in the number of completed apartments in the same period was as low as -45%.

However, Dr Keill noted that the renovation market was growing, albeit slowly, and that it had proved to be an enduringly crisis-proof area, making it increasingly important to the entire construction industry.

Roto reported its total number of employees had risen 7% over the last twelve months, and that it was currently employing around 4,000 people worldwide.

The board appeared to be quite optimistic about the prospects for 2011, during which they are aiming for a single-digit percentage growth in Group sales.

As far as the Western Europe organization (Belgium, Holland, UK, Ireland, Luxembourg and Scandinavia) is concerned, growth in 2010 has reflected the group performance figures. Continued investment in personnel and infrastructure in Western Europe sees the organization in a strong position to continue to achieve the results projected for the coming years.

Throughout 2010, Roto has been promoting its brand within the Western Europe fenestration and construction sectors, and continues to introduce new products from both the Hardware and Roof Window divisions as part of its strategic growth plan.

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