DORMA reports rise of over 65% in earnings before taxes
A year of consolidation and restructuring
 Düsseldorf/Ennepetal. World market leader in door closer technology, DORMA, succeeded in increasing earnings before taxes (EBT) for fiscal 2003/04 (June 30) by 65.3 % to €45.8 million (previous year: €27.7 million). This was announced in Düsseldorf by DORMA CEO Dr. Michael Schädlich at the October 4 press conference convened to present DORMA’s annual financial results. “In a year of consolidation, the company has stuck closely to its aims of reducing costs, restructuring its businesses and increasing efficiency,” he emphasised. Foreign currency influences impacted the net sales figure of the Group to the tune of €18.5 million, leaving a total figure that, at €648.7 million, was 2.2% below prior-year. Acquisitions in the period under review only had a minor influence amounting to a plus of €2.1 million. “This leaves us with a comparable sales volume of €665.1 million, which roughly corresponds to the €663.1 million achieved in the previous year,” explained Dr. Schädlich. Earnings before interest and income tax (EBIT) significantly boosted the return on sales figure, causing it to rise to 7.4% (previous year: 4.7%). Cash flow during the year under review increased by €6.8 million to €64.9 million.
Domestic German performance far outstripped by developments abroad
The company’s core market of Germany underwent no discernible economic recovery during fiscal 2003/04. DORMA’s business has, however, significantly improved when seen on a global scale. Encouraging growth (in euro) was achieved particularly in its business regions Emerging Markets (+31.6%), Gulf (+29.6%), Australasia (+20.6%), Southern Europe (+20.1%) and France (+8.7%). Due largely to foreign exchange effects, there were downturns in the regions North America (-19.5%), Scanbalt (-7.4%), Central Europe (-6.3%) and Asia
(-2.1%). Dr. Schädlich regarded the company’s international growth as a welcome counterweight to the German situation.
Focus on cost management and restructuring
The objectives for the financial year were to reduce costs, effectively restructure and enhance efficiency. This approach was particularly necessary, for example, due to the knock-on effect arising from the events of September 11. The ensuing postponement of plans involving numerous new building works resulted in a significant downturn in the company’s US-wide project business in 2003/2004, especially at its Movable Walls division. Dr. Schädlich commented: "We responded immediately by quickly instigating a number of structural adjustments at our US subsidiary Modernfold Inc.” Further measures affected the structure of the company’s automatic door systems business. During the year under review, a competence centre for curved doors was established at its Cologne production facility. The restructuring process initiated at Bonn subsidiary MBB Gelma also continued. Finally, the CEO explained, a portion of the locks product line had been transferred to a joint venture with the german company WILKA, with a further subsegment being moved to the DORMA facility in Ennepetal.
In addition, the resolutely pursued cost reduction measures implemented within the framework of the “Fit for Future” project had enabled DORMA to actually exceed its original objectives. Dr. Schädlich: "Since December 2002, we have achieved a total improvement on earnings amounting to €43.5 million.”
The annual average number of employees at DORMA fell to 5,510, or 80 less than in the previous twelve months. The CEO also pointed out that 86 employees had been added as a result of minor acquisitions. Investments in property, plant and equipment amounted to €30.7 million, roughly matching the level of the previous year (€30.2 million).
Good prospects for DORMA going forward
"A company cannot live from cost-cutting alone," underlined the CEO. DORMA therefore also intends to constantly improve its customer focus through increased efforts on the sales side, the introduction of innovative products and a more vigorous application of the systems approach worldwide. One of the main points of emphasis here will lie on increased benchmarking for both inside and outside the DORMA Group. Associated activities had already been instigated in the year under review in the form of two projects: “Fit for Sales” and “Focus Sales”.
"Our objective is to open up new business prospects for our customers on the basis of our innovative offerings,” emphasised Dr. Schädlich. And he went on: "Our customers and employees can continue to count on us as a dependable factor in business.” DORMA, he said, is proud of its long-standing client relationships and high-performing personnel. Armed with these assets, the company can look forward to excellent future prospects – despite the likelihood of increasingly tough competition.
Ennepetal, october 4, 2004
DORMA is a globally active supplier of door technology systems and is the world market leader in the door control and mobile room partitioning sectors. It is also the number two worldwide in the automatic door systems segment. DORMA is subdivided structurally into five divisions: Door Control, Automatic, Glass, Security/Time and Access Control (STA) and Movable Walls. Its main production plants are located in Europe, Singapore, Malaysia, China and North and South America. With a worldwide workforce numbering 5,500, the Group realised sales of €649 million in fiscal 2003/2004 (June 30). The DORMA Group headquartered in Ennepetal, Germany, operates on an international scale with 62 wholly-owned companies in 44 different countries.
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CEO Dr. Michael Schädlich
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