Successful centenary year for DORMA
Substantial increase in sales in the boom regions, high investment outlays in Germany
 Düsseldorf/Ennepetal. In fiscal 2007/08 (June 30) the DORMA Group increased total sales revenue by 6.7% to €894 million (previous year: €838 Million). Currency adjusted growth amounted to 10% with just 0.6% or €5 million attributable to acquisitions. Despite €17.4 million in exceptional charges and negative foreign exchange effects, DORMA was able to outstrip the strong prior-year EBT (earnings before taxes) by 4.3%, posting €65 million this time (previous year: €62.3 million). Group investments in infrastructure, aligned to current and future business growth, included the Premium project in Ennepetal, site expansion work in Bad Salzuflen and the construction of new facilities in China and Dubai. Total capital expenditure therefore underwent a further significant increase from €31.4 million last time to €35.6 million in the year under review. "In Germany we generate something less than one quarter of our total sales yet have deliberately invested more than 55 percent of our capital spend in this, our core market," explained DORMA CEO Dr. Michael Schädlich, speaking at the press conference held to announce the results for the fiscal year. As of June 30, 2008, the Group had a workforce of 6,911 employees.
Growth in the boom regions, employee numbers in Germany stable
With the economic environment in 2007 remaining favourable, DORMA was able to report growth across all its regions, outperforming the markets in many instances. With an increase in sales of 2.7%, the Group’s core German market lagged considerably behind developments in the neighbouring countries of Switzerland and Benelux (total growth 7%).
The product innovations of the company and the market-aligned portfolios have been well received in the boom regions. The emerging markets – particularly those of Russia and India – are proving to be a good, stable source of revenue with sales rising this time by 24.7%. DORMA’s performance in the Gulf region was, in the words of the CEO, also fantastic with growth averaging almost 40%. There was a disproportionate increase in sales in China, although the rate of rise has so far lagged behind that of the other regions. However, as Dr. Schädlich pointed out, the speed of growth in China following the completion of the new plant in the financial year just passed was considerably higher at +36.8%.
Needless to say, there was also an increase in personnel numbers, although, with an average headcount for the fiscal year of 6,767, the rate of expansion remained below that of revenue. DORMA owner Karl-Rudolf Mankel and
CEO Dr. Michael Schädlich expressed there pride in what the company and its employees had achieved in this 100th anniversary of DORMA’s existence. For both these members of DORMA’s executive it is important that the company is able, over the long term, to retain its workforce in its German home market at around 2,500 employees as an annual average. This year, the headcount numbered 2,673, representing 39.5% of total employees worldwide, the first time this figure had fallen below the 40% mark.
Growth-led investment with Germany attracting much of the expenditure
As an innovative company, DORMA has long invested well above the level of its depreciation and amortisation expense. Expenditures on the Premium project at its Ennepetal headquarters in Germany, the new plant constructed in China and the building of the new production and administration complex in Dubai meant that investments underwent a further significant increase as planned. The year under review saw additions of €35.6 million to property, plant and equipment. Remarkably, and as emphasised by Dr. Schädlich: "While Germany only accounts for something less than one quarter of total sales, we are investing more than 55 percent of our capital resources in this, our home market."
Activity on the acquisitions front was relatively muted. "In September 2007, DORMA purchased the distribution company Milenyum of Turkey, which has developed into a solid and reliable supporter of our business activities in that country," commented the CEO.
Economic slow-down also to be given weight in pay agreements
The company sees opportunities for further growth primarily in the boom regions such as the Gulf States, the emerging markets headed by Russia and India, and in Asia. “Moreover, we intend to significantly further develop our premium band strategy, focusing even more on the essential factors of quality, supply reliability, portfolio alignment and advisory competence,” assured Dr. Schädlich. On the risk side, he said that it was hard to predict what the consequences of the US financial crisis on DORMA’s business prospects would be. It was also becoming more and more difficult, the CEO said, to anticipate – let alone plan for – the foreign exchange impact likely to emanate from the strength of the euro versus the US dollar. Unreasonable pay rises likewise constituted a risk factor that should not be underestimated, particularly in Germany: "Due weight must be given to the likelihood of economic slowdown in the annual pay negotiations," Dr. Schädlich stressed.
Proprietor Karl-Rudolf Mankel and the entire management are optimistic that, with the inherent financial stability of the company, it will be able to meet and successfully master the future challenges of the world market. The whole DORMA community comprising its some 7,000 employees is motivated and well positioned to generate further success as it moves into the company’s second century of business endeavour. "In all that we do and undertake, our focus will need to remain firmly fixed on serving our customers to the very best of our ability – and to this we are utterly committed," emphasised Dr. Schädlich.
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DORMA Sales by Regions, FY 2007/08
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Karl-Rudolf Mankel, Owner of the DORMA Group
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Dr. Michael Schädlich, CEO of the DORMA Group
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DORMA Personnel, FY 2007/08
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Impressions of the DORMA Centenary Event
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DORMA Employees Poster
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