Mannheim, 21 June 2023 | The Mannheim-based plastics processing company Röchling achieved significant sales growth last year. The sales volume rose by nearly 18 percent in twelve months from EUR 2,207 million to EUR 2,603 million. This increase occurred, despite the economic challenges posed by the war in Ukraine and the ongoing tangible impact of the coronavirus pandemic. The Group achieved growth in sales across all the regions in which it operates: Sales increased to EUR 950 million in Germany (up 10.6 percent), to EUR 718 million in the rest of Europe (up 13.2 percent), to EUR 565 million in the Americas (up 38.8 percent) and to EUR 370 million in Asia (up 20.1 percent), despite China’s strict coronavirus policy. The Röchling Group’s Executive Board presented these figures at the financial press conference in Mannheim on Wednesday, 21 June.
The largest company division is now the Industrial Division, which achieved yet another record year in 2022 with a sales growth of 22.4 percent and total sales of EUR 1,234 million (increase of EUR 226million). The Automotive Division’s sales increased by 12.7 percent, from EUR 1,020 million to EUR 1,150 million, while the Medical Division experienced a sales increase of 21.9 percent, rising from EUR 183 million to EUR 223 million. The number of Röchling Group employees working across the globe (more than 90 locations in 25 countries) went up by 4.3 percent from 11,245 to 11,737. The distribution of employees remained constant at 570 in Baden-Württemberg and 1,108 in Rhineland-Palatinate. The number of trainees and apprentices in Germany totaled 302 at the end of last year (2021: 323).
The Röchling Group had a strong start to 2023 as well. In the first three months of the year, sales grew by another 17.3 percent year-on-year from EUR 618 million to EUR 725 million. Sales increased by 10.3 percent to EUR 343 million in the Industrial Division and by as much as 25.0 percent to EUR 321 million in the Automotive Division. The Medical Division also posted a significant jump in sales of 21.0 percent to EUR 62 million. The employee headcount developed in a similar way, expanding from 11,737 to 11,976 in the first three months of 2023.
Despite ongoing global challenges, the spokesperson of the Executive Board, Raphael Wolfram, expects the Röchling Group to continue to perform well over the course of the year. “We are confident to meet the targets that we have set ourselves for this year!” However, this forecast takes into account the uncertain state of the global economic system. In reference to the interminable war in Ukraine, the protectionist economic policies of some major industrialized countries like the USA and China, and the necessity of further efforts to reset global supply chains. Röchling’s CFO Evelyn Thome states: “We are keeping a very close eye on developments in China in particular. We manufacture products in China for the Chinese market and are taking deliberate steps to push this localization.”
Röchling Automotive: Expansion of the product portfolio in the area of “Battery Solutions” and extension of the production network
2022 proved to be another difficult year for the global automotive supply industry. Ongoing crises, rising inflation, volatile call orders for automotive manufacturers, and continuing supply chain disruptions in some areas have all led to significantly higher production costs. The capital-intensive transition to e-mobility has also continued to pick up speed. Faced with these conflicting priorities, the Automotive Division focused on crucial price negotiations with customers and suppliers, while also building up its product range of battery solutions and expanding its production network with a new location in China, which commenced series production operations for the first time in 2022.
Last year, Röchling Automotive generated total sales of just under EUR 1,150 million, corresponding to year-on-year sales growth of 12.7 percent. The increase of approximately EUR 129 million was driven by all regions, with exceptional contributions from the USA and China to the positive market development. In light of high inflation and the associated increase in input costs, operational optimization and turnaround measures at the locations are a key factor for success. These measures resulted in considerable cost savings of several million euros in 2022, while the employee headcount increased from 5,752 to 6,005.
“With our vision for 2030 ‘We Drive Sustainable Mobility’, the organization has a clear guiding star and purpose for our strategic development,” emphasizes Raphael Wolfram, CEO of Röchling Automotive. “We are placing all our business activities in service of driving sustainable mobility, now and in the future. This entails developing both increasingly efficient combustion- engine-powered cars and vehicles with alternative drive systems.” With this in mind, the division has pushed ahead with consistently cascading the strategy down through the Automotive locations and putting it into practice. At a series of intensive workshops, a number of Plant North Stars were developed as the first plants to actively shape the processes of implementation and transformation. The appointment of Matthias Drehkopf as the new Chief Operating Officer (COO) on the Automotive Board in September 2022 will help the company move forward with this ambitious goal.
Röchling Automotive made total investments of EUR 37.3 million in 2022, an increase of EUR 2 million compared to the previous year. These investments were primarily focused on property, plant, equipment, new customer projects, and the strategic development of expertise in battery solutions. This involved the development of necessary testing and manufacturing expertise and preparation of new products, such as the Active Charging Gate.
“Although the level of orders was encouraging in the first quarter of 2023 and we achieved solid sales figures, production volumes are steadily declining across Europe,” says Wolfram. As a result, the division announced the closure of its plant in Gernsbach by the end of 2023. Its current production activities are to be combined within the Worms and Wackersdorf plants. The Röchling Automotive Board was restored to its full capacity from mid-April with the appointment of Dirk Aikes as the new Chief Financial Officer (formerly the CFO of Röchling Industrial). “Despite a solid result in the first quarter, the volatile situation on the global sales markets gives us grounds for merely cautious optimism as for the entirety 2023. We will remain vigilant and be ready to respond quickly to any changes that may arise,” says Wolfram.
Röchling Industrial: High productivity combined with clear alignment of the product portfolio and a stringent pricing policy
2022 was another record year for Röchling’s Industrial Division. Its positive development was driven by high productivity levels alongside a clear strategy of refining the product range and a stringent pricing policy. All the division’s product lines made an equal contribution to its success. Composites benefited from strong demand from the rail vehicle manufacturing and electrical industries.
Innovation is hugely important for Röchling Industrial, underlying its decision to systematically expand its Research & Development department and consolidate all development activities at the Industrial headquarters in Haren/Germany. It was also part of its reasoning to set up an outstandingly appointed Technology Center covering an area of more than 1,000 square meters. The division’s objective is to develop new products while constantly refining existing products and to evaluate new or enhanced manufacturing processes.
Röchling Industrial invested more than EUR 80 million in 2022. It invested heavily across all regions in the expansion of its production facilities, particularly for industrial plastics, high-temperature plastics, and composites. In Europe, the main investment targets were the locations in Haren/Germany, Lahnstein/Germany, Tabor/Czech Republic, and Nancy/France. In North America, Röchling Industrial invested in the sites in Dallas, Gastonia, North Carolina/USA, Cleveland, Ohio/USA, and Orangeville/Canada, and in Asia in the sites in Vadodara/India and Suzhou/China.
Röchling Industrial acquired the Swiss company Compotech AG based in Weinfelden, effective retroactively from 1 January 2023. “Compotech AG perfectly complements the existing activities of the Composites segment involving pre-finished interior cladding and assembly kits for the rail vehicle industry,” says Franz Lübbers, CEO of Röchling Industrial.
The division is resolutely continuing the strategy it has consistently taken for the past seven years of developing the regions and markets, applying a professional industrial management approach. This will underpin Röchling Industrial’s future success. The Industrial Division’s success in 2022 is largely based on the exceptional dedication and competence of its 4,337 employees (2021: 4,196) across its 43 locations worldwide.
The first quarter of 2023 started off positively for Röchling Industrial. However, the division is continuing to monitor the volatile situation on global markets considering tensions between the USA and China, the war in Ukraine, the high level of inflation, and elevated energy costs. “Nevertheless, we are still anticipating successful business development for 2023,” underlines Lübbers.
Röchling Medical: New UNIMED strategy harmonizes processes and creates synergies with simultaneous profile development of the sites
The previous year presented Röchling Medical with opportunities for consolidation as it streamlined its product portfolio and integrated its six locations in Germany, the USA, and China. In July 2022, Dr. Daniel Bühler assumed the role of CEO at Röchling Medical. On 1 June 2023, the 51-year-old Roman Borkowski, formerly working at Berlin-based medical technology company Biotronik, joined the Medical Board as the Chief Quality & Regulatory Officer and will be responsible for all global quality issues and regulatory matters at Röchling Medical.
Over the past few months, the division has developed a new strategy called UNIMED. It is designed both to allow Röchling Medical to take advantage of greater synergies and shared innovations thanks to harmonized processes and systems while also allowing each location to establish a distinct profile. The acronym UNIMED stands for the key strategic areas: Unity, Nucleus, Innovation, Mastery, Employee and Deliver.
The implementation of the strategy has already yielded positive results, including the establishment of a global matrix structure, the stabilization of the location in Waldachtal, a record-breaking result in Lancaster/ USA and the introduction of a new management team in Rochester/USA. In the fourth quarter of 2022, incoming orders were 14.7 percent higher year-on-year at EUR 73 million. The division also closed the first quarter of 2023 with sales of EUR 62 million, marking a 21 percent improvement on the first quarter of 2022. In its seventh year, the division also achieved a new sales record, with total sales amounting to EUR 223 million in 2022. The EUR 40 million increase year-on-year was driven by excellent development in the USA, while business at the German locations showed signs of improvement.
Over the course of the year, the uncertainties affecting global supply chains led to investment and production delays in some areas, which the company did not catch up until the end of the year. Due to the cancellation of a major order at short notice, the Brensbach/Germany location faced a difficult year. The customer had misjudged the development of the coronavirus pandemic and had significantly cut back the production of coronavirus tests.
Röchling Medical invested a total amount of nearly EUR 26 million in property, plant, and equipment. The investments focused on the construction of a new production hall in Neuhaus am Rennweg/Germany, which was inaugurated in the fall of 2022, as well as on machinery and automation. The sales growth and investment were accompanied by an increase in the headcount as well. At the end of December 2022, Röchling Medical had a total of 1,334 employees, 106 more than at the end of the previous year.
Röchling Medical is forecasting continued sales growth for 2023. “Growth will continue to be driven by the strong America business and by strategic measures to strengthen the Brensbach location. The new production hall in Neuhaus am Rennweg will support a positive sales performance as well,” says Bühler. He is confident that Röchling Medical’s market prospects will continue to develop: “The medical technology and pharmaceutical industry are set to experience steady growth in the years to come. We have a good baseline that will help us gain a substantial share of this market and we already have a very sound customer base.” Over time, the plan is for the Medical Division is to grow to become a third major division within Röchling. This ambitious plan is being supported by continued expansion in automation and digitalization.