Good Roto performance
The forecast issued a year ago, which predicted that there would be a global economic slump in 2020, seems to have hit the target. Dr Eckhard Keill made reference to this at the 15th International Roto Trade Press Day, while emphasising that he “would happily have been wrong”. The primary cause of this predominantly negative development is the pandemic, which the Roto Frank Holding AG board of directors believes is currently “in resurgence” and which increases the risk of damage due to other issues. During the “global disruption caused by the coronavirus“, the internationally active construction supplier has performed well, increasing both sales and income and ultimately achieving all its goals. The Group hopes to achieve “ambitious aims” in 2021 as well.
Articulating doubts about quality
In his statement, Keill initially discussed a few points that had previously not played a major role in public discussions on the subject of “The coronavirus and the economy”. He discussed how “sobering” it seems that more or less substantial free trade limitations caused by continuing sanctions (USA / China, EU / Russia, etc.) seem to still be functioning. In this field, at least, he said, politics is lacking in “reasoning and learning abilities”. The frequent disregard for market economic principles could, in the age of COVID-19, prove fatal.
The Holding board of directors once again expressed their criticism of the quality of many economic research institutes. They have found themselves in “permanent correction mode” again, thereby solely contributing to uncertainty. While forecasts immediately after the pandemic broke out seemed to predict “the end of the world”, this no longer seems to be the case. Instead, current prognoses now seem to say that “things won’t be so bad after all”. Rapidly changing “expert votes” were of little or no help as a well-founded guide to corporate strategies and decisions. Keill also has a skeptical view of the frequently voiced opinion that the world of work will fundamentally change as a result of the coronavirus: “I don’t see a revolution coming – it will be a process of evolution at most.”
The window industry has been affected by a specific consequence of COVID-19. The media and people around the world are becoming aware of the importance of opening windows and ensuring proper ventilation.
“Coronavirus caveats” lead to opportunity
The economic turbulence caused by the pandemic has, of course, not left the markets and regions relevant for Roto untouched. A tangible slowdown in our own business would have been no surprise. However, a glance at developments at group level as of 30th September 2020 shows the opposite. On this date, total sales amounted to €511.8 million (after €509.4 million) – an amount even higher than the corresponding figure from the previous year.
The estimate that the fourth quarter of the year, as in previous years, will not result in any significant differences is of course a “coronavirus caveat”. If things remain relatively stable on this front, Keill anticipates group turnover of a little over €675 million “+X” in total (after €668 million) in 2020. There is, therefore, a chance of nominal growth of almost 2%.
The ratio between foreign and domestic business remains at around two-thirds to one-third within the Group. There has also been a slight downward trend in the number of employees, which is currently around 4800 worldwide. The investment program that was continued in a targeted manner in 2020 is carrying on “at a level suited to the situation”, focusing primarily on replacement procurement and digitization.
Flexibility and consistency
During the first Trade Press Day to be held digitally, Keill described two scenarios in his general forecast. His positive scenario involves the COVID-19 situation easing up in the long term, allowing markets to recover sooner than expected around the world. It also foresees increased restoration work. In his negative scenario, a second global lockdown leads to economic collapse, with the result that markets head into a second nosedive, followed by new financial and currency crises. Since neither possibility can be ruled out at the moment, there is no basis for a reliable forecast.
Ultimately, however the situation develops, Roto will adapt to the resulting situation as flexibly as before; however, the company will not deviate from its adopted course and implement its proven customer benefit strategy.
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