- Engineered plastics on the way up
- Automotive expands in the US and China
- Restructuring of electronics business shows positive results
- Company goal for 2003: Further improvement of results, additional debt reduction
Mannheim (Germany) June 04, 2003. Gebr. Röchling-Group with its three business segments engineered plastics, automotive and electronics, looks back on a difficult, yet successful business year 2002. "In spite of the unfavorable economic development we raised our profits significantly," reports Georg Duffner, CEO. "Our increased profits are the result of successful restructuring measures in the electronics and automotiove engineering fields as well as the sustained, positive development of the plastics business. Röchling did well in 2002 and faces 2003 optimistically in spite of the continuously unfavorable general conditions."
The group increased its profits before taxes and interests (EBIT) by 51 percent to 54.4 million Euro in the business year 2002. At the same time, profits before taxes increased by 160 percent to 35.1 million Euro. The adverse economic conditions are reflected by a 7 percent decline in sales to 1.53 billion Euro. Incoming orders decreased by 9 percent to 1.48 billion Euro. Due to adjustments to the difficult market situation the number of employees sank by 12 percent to 9,213 employees.
Also, the financial situation was significantly improved: Röchling-Group lowered its net liabilities from 238 million Euro in 2001 to 132 million Euro in 2002, while increasing its free cashflow from 25 million to 94 million Euro. In the year 2000 the company still suffered from a negative free cashflow of -26 million Euro. The successful development was mainly achieved through a drastic lowering of the working capital by about 50 million Euro.
Engineered Plastics on the Way Up
Gebr. Röchling-Group is divided into three business segments: engineered plastics, automotive and electronics. The biggest contribution to the year’s operating profit was delivered by the business segment engineered plastics - despite the worldwide recession in the customer markets for machine building and electrical engineering. This segment raised this year’s operating profit by 6 percent to 35 million Euro compared to previous year’s profit. Incoming orders gained 3.6 percent and reached 288 million Euro. At the same time sales grew by 3.2 percent to 290 million Euro.
Important events of the year 2002 in this business segment were the founding of the joint venture Sustaplast Devol Ltd. in Scotland and of Czech company Röchling Techniké Plasty s.r.o. at Prague, as well as the establishment of Chinese distribution company Röchling International (Shanghai) at Pudong and that of production company Leripa Papertech LLC at Jiangsu, China.
Business Segment Automotive Focuses on Profitable Orders
The business segment automotive continued to suffer the strong pressure on profit margins. Additionally, the financial situation was strained by increased advance financing of developments and manufacturing tools. Nevertheless, this segment was able to raise its profits before taxes by 57 percent to 11 million Euro. Sales dropped by 9 percent to 549 million Euro. The fact that Seeber-Group, being one of the leading manufacturers of plastics parts for the automotive industry now only accepts profitable and financially feasible orders, was crucial to this result. Especially the expansion of market positions China and the US was an incentive for economic growth.
Turnaround in the Electronics Business Segment
In the electronics business segment a growth of results before taxes from -28 million Euro to +4 million Euro in the year 2002 marked the success of the radical restructuring. Sales slumped by 12 percent to 682 million Euro. One of the main reason, among others, is a revision of the business segment’s product portfolio. Incoming orders sank by 16 percent to 625 million Euro, while the number of employees dropped by 23 percent to 4,087 employees. The business of all four divisions of the group involved in this segment - DeTeWe, Francotyp-Postalia, GMC Instruments and BEA-Group - was dominated by a strict tightening of belts. Röchling streamlined and optimized processes and got rid of sources of loss. A number of new products were released and innovations pushed, thus enabling these companies to hold their market positions and increase their cashflow.
These successes were achieved in spite of a clear decrease in sales and incoming orders. The significant slump of the telecommunications market strained DeTeWe’s business. A strong decrease of orders after the introduction of the Euro at the end of 2001 affected the business of Francotyp Postalia, a manufacturer of postage meter machines. Due to the increased demand for new machines and refittings the volume of orders had risen highly above the average level back then.
The Outlook for 2003: Further Improvement of Operating Profits and Finances
For the current business year 2003 Gebr. Röchling-Group expects again - despite the adverse economic situation - a growth in operating results and financial power. "It is decisive that the current policy of austerity is maintained and costs are reduced, and that debts are reduced continuously," explains Duffner the group’s strategy. "We expect signals for growth and simultaneously a gain of market shares through a further pushing of innovations as well as through the expansion of our presence in the US and Chinese market. We envision the best opportunities for continuing on our successful course in the year 2003."
GEBR. RÖCHLING KG COMPANY PORTRAIT:
Gebr. Röchling KG, a worldwide operating technology company belonging to Röchling-Group, focuses strongly on its three business segments engineered plastics, automotive and electronics.
The business segment engineered plastics consists of Röchling Haren-Group and Sustaplast-Group. Its diversified portfolio of high-performance products meets the industry’s growing demand for increasingly lighter materials that also guarantee extreme strength and optimum mouldability. Further characteristics of the diversified portfolio’s materials are their maximum resistance to wear and abrasion, their superior gliding quality as well as outstanding insulation qualities.
Among the automotive business segment’s fields of expertise - together with Seeber-Group and Röchling Kaltwalzwerk - is the manufacturing of lightweight construction parts made from plastics for almost all well-known automotive manufacturers worldwide. Application areas are especially automobile interiors, engine compartments and underbodies. Moreover, the business segment provides cold rolled, phosphated and hardened steel strip primarily for engine parts.
The third business segment electronics is comprised of the group divisions DeTeWe, Francotyp Postalia, GMC Instruments and BEA. Here Gebr. Röchling ranges among the world’s leading manufacturers with their digital postage meter machines, enveloping technology for the automated processing of postal services and their metrology, drive and control technology systems. The group also holds a leading position in Europe with its comprehensive and innovative product palette for voice- and data communications. Another business segment of the group is the construction of industrial plants with a focus on electrical engineering and automation.