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DORMA increases sales by 7.8 percent to €700 million

Return to organic growth despite difficult market environment

Düsseldorf/Ennepetal. Having achieved an increase in sales of 7.8% to around €700 million (previous year: €649 million), the DORMA Group made an impressive return to growth in fiscal 2004/05 (30 June). Encouragingly for the company, this rise is attributable to a reasonably equal split between organic growth ( 5.1%) and growth from acquisitions ( 4.2%) after adjusting for a negative foreign exchange impact (-1.5%). Speaking at the annual press conference held in Düsseldorf to report DORMA’s results, CEO Dr. Michael Schädlich announced the following numbers: Earnings before interest and taxes on income (EBIT) produced a return on sales of 6.5%, falling just short of the 7.4% achieved in the previous year. Before exceptional items, EBIT for the fiscal year amounted to €55 million (previous year: €51.6 million), giving an adjusted return on sales of 7.9% to match that of fiscal 2003/04. “Operating profit has thus kept pace with our growth in sales,” Dr. Schädlich underlined.

Markets abroad again the main growth drivers
Despite the persistent sluggishness encountered in DORMA’s core German market, the company generated an increase in domestic sales of 2%. However, the main source of improving revenues was once again its international market which now accounts for more than 70% of total Group sales. The regions North and South America, Emerging Markets, Gulf States, France, Australasia and China each produced double-digit increases in sales measured in local currency. “At constant foreign exchange rates, Group sales worldwide actually increased by 9.3% to around €709 million,” the CEO explained.

Commitment to German manufacturing
The strategic thrust for DORMA in fiscal 2004/05 was predominantly aligned to increasing Group competitiveness. In the UK and the USA, for example, several long-standing site concentration programmes were brought to fruition. However, a large part of the overall planning work focused on the PREMIUM project with the aim of securing the future of the main Ennepetal facility in Germany. A complete production restructuring and process optimisation programme introduced at this lead plant is expected to yield savings in the region of €8 million per year, with all the logistics activities having also been transferred to a regional Logistics Centre. Despite difficult macro and micro-economic conditions, DORMA and in particular its proprietor Karl-Rudolf Mankel have given a commitment to the Ennepetal site, and thus to maintaining its German manufacturing base. “As long as it remains essentially viable in economic terms, we intend to maintain production in Ennepetal at world class levels,” DORMA’s owner emphasised. A clear sign of this engagement is that the company has plans in place that will see upgrade investments amounting to around €10 million flowing into the site.

DORMA’s German-based workforce accounts for 45% of the Group total, while its domestic business makes up 28% of aggregate sales. “We hope that the economic and political conditions, and also in particular the collective bargaining situation, will allow us to long maintain this imbalance, which in itself should be regarded as quite positive,” said CEO Dr. Schädlich.

The average headcount for the fiscal year amounted to 5,817 employees. This represents an increase of 6% or 307 people, 225 being attributable to acquisitions, thus remaining significantly below the business growth rate for the Group as a whole.

Securing the future
The 15 DORMA innovations showcased at BAU 2005, of which three were true world-firsts, attracted much attention right across the architectural hardware industry. “These are development projects that will have a significant impact on the market over the next two to five years,” predicted Dr. Schädlich. Added to this are further undertakings to optimise production worldwide. In the view of the company, the introduction of computer-aided configurators, a process that is still at its beginnings, will lead to substantial improvements in efficiency in the sale of products requiring a high level of advice and customisation.

During the year, DORMA acquired six companies in the USA, Australia, New Zealand and Germany with a view to strengthening is sales and service organisation. By far the largest of these was Carolina Door Controls in Durham, NC/USA with around 240 employees and annual sales of roughly €37 million. CDC has 24 sites in eastern USA, making it the largest manufacturer-independent service organisation in the US market prior to the take-over.

DORMA on track for further success
The first few months of the new financial year have produced some encouraging results for the company. DORMA has re-initiated the process of organic expansion. Aside from Germany, its markets are growing. Certain projects and processes necessary in order to combat the global decline in prices and the aggressively tough competitive situation have been put in place. “Our product innovations have provided us with a technological lead. While we cannot afford to rest on the development front, these achievements constitute further proof of DORMA’s ability and determination to maintain its standing as a premium supplier. Our strategic alignment is clear and has been effectively communicated worldwide. It is vital, of course, that we quickly implement our good ideas internally and ensure that they are rapidly brought to market,” declared DORMA’s CEO, concluding that “DORMA is indeed ideally equipped for the way ahead!”

DORMA is a globally active supplier of door technology products and systems. The company is the world market leader in door controls, movable walls and automatic door systems. The DORMA Group is subdivided structurally into five divisions: Door Control, Automatic, Glass, STA (Security / Time and Access) and Movable Walls. DORMA maintains major production plants in several European countries plus Singapore, Malaysia, China and North and South America. With an international workforce of around 6,100 employees, the Group realised sales of €700 million in fiscal 2004/5 (30 June). The DORMA Group headquartered in Ennepetal, Germany, operates on an international scale with 65 wholly-owned companies in 44 different countries.



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DORMA Sales Volume

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Karl-Rudolf Mankel - Proprietor DORMA Group

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Dr. Michael Schädlich - CEO DORMA Group

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