DORMA: Robust sales growth with big improvement in profit
Strong performance overseas secures jobs in Germany
 Düsseldorf/Ennepetal, Germany. The DORMA Group registered a marked increase in sales of 9.6 percent to €767 million (previous year: €700 million) for fiscal 2005/06 (June 30), a financial year characterised by widely differing markets worldwide. The revenue figure was boosted to the tune of €25.5 million or 3.6 percent by acquisitions, and by positive foreign exchange effects amounting to €13.2 million or 1.9 percent. DORMA CEO Dr Michael Schädlich, speaking at the year-end press conference, was also able to report an encouraging improvement in the profit situation. At €49.6 million, earnings before taxes (EBT) rose by 19.5 percent, twice the sales growth rate. ‘Exceptional charges amounting to €6.1 million and a currency impact of €5.3 million burdened results, so that comparable EBT excluding these effects would have amounted to €61 million – equivalent to an eight-percent return on sales,’ he explained. As the result of a jump in sales revenue from the company’s international business with glass fittings and accessories, moreover, DORMA has also now taken over the position of world market leader in this business segment.
Growth abroad secures jobs in Germany
Although there have been signs of an upturn in the German construction market since spring 2006, the natural delay between order intake and interior outfitting means that, in the case of major projects, DORMA will not be feeling any positive benefit until about two years hence. Consequently, DORMA was only able to grow sales by 1.5 percent in Central Europe with its core home market of Germany. Once again, therefore, the company’s foreign markets were the main growth drivers, accounting for a share of revenue which has, in the meantime, risen to 74 percent. High double-digit expansion rates were exhibited by the DORMA regions Emerging Markets, Australasia, the Gulf States and North America. At the end of the fiscal year, the DORMA Group had a worldwide workforce numbering 6,245. Within this figure, the company has also succeeded in keeping its complement of employees in Germany stable at around 2,600.
Dr Schädlich further commented: ‘At this juncture I would like to emphasise that we in Germany are responsible for generating around 26 percent of our total sales while employing around 42 percent of our total workforce.’ According to a statement by DORMA proprietor Karl-Rudolf Mankel, this clearly shows ‘that our consistently strong growth overseas is serving to secure jobs at home.’
Anticipating challenges, proactively forging future viability
High costs and changing markets characterised by decreasing margins mean that effective programmes for sustainable efficiency enhancement are becoming increasingly necessary. Dr Schädlich elucidated: ‘Last year, we geographically reorganised and restructured our entire sales effort in Germany. Having created identical sales territories for each division, we now expect substantially improved and more efficient cooperation between our sales people in the various divisions operating at the local level.’ At the DORMA headquarters in Ennepetal, the ‘Premium’ project aligned to securing the site over the long term, continued to proceed to plan. The restructuring and relocation activities involving DORMA’s automatics production activities have also now been completed.
The Regional Logistics Centre (RLC) was established with the facility going into operation right on schedule after a major move in which all the associated activities were transferred to the new Wuppertal (Germany) facility between Christmas 2005 and the New Year.
Already today it is apparent that the new MOVEO range of partitions is destined to revolutionise the market for operable walls. ‘It’s been a long road – in the course of the fiscal year, we had to convert the entire production facility in Ocholt,’ explained the DORMA CEO. This resulted in a complete halt in production from December 2005 to the middle of March 2006. ‘We have now been shipping out these new systems since March/April of this year. We are convinced that the effort and expense has been well worthwhile and that the MOVEO concept will be a success for the DORMA Group in both technical and commercial terms,’ said Dr Schädlich. Many resources in the Door Control division in Ennepetal were tied up with the preparations and start of construction of a new manufacturing facility in China. ‘This plant will initially be geared to production for the Chinese and Japanese markets. In future, however, it will also offer the possibility of manufacturing products in the lower price segment as competitive alternatives for all our markets worldwide,’ explained the CEO. DORMA also completed a new sales and production facility in Sofia, Bulgaria, and a further manufacturing plant in Dubai is being constructed.
DORMA on track and well equipped for the future
The DORMA CEO regards the boom regions of the world’s economic landscape as offering particular opportunities going forward, with the Japanese market also looking promising in the long term. In addition, he expressed his confidence in the future success likely to be engendered by in-house product innovations. The primary risk factors identified by DORMA relate to the threat of increasing Asian competition and high material costs.
The company has made a satisfactory start to fiscal 06/07. Necessary restructuring projects have been initiated and are already taking effect. ‘We believe that 2006/07 will see us once again raise the bar a notch higher. To the extent that anything can be predicted based on the current situation, we anticipate continuing stable organic growth in the order of 4 to 6 percent,’ was the measured forecast offered by Dr Schädlich.
back
| Picture download: |
 |
DORMA Sales Volume
|
 |
DORMA Human Resources Development
|
 |
Karl-Rudolf Mankel - Proprietor DORMA Group
|
 |
Dr. Michael Schädlich - CEO DORMA Group
|
|
|
|
|
|
|
|
|
|
|
