Röchling Growth in 2016-2017

Röchling continued its record of success in the 2016 financial year and Q1 2017, increasing its sales by 15.1% to €474.6 million in the first three months of 2017.

CEO of the Röchling Group Ludger Bartels said: “Our investments paid off. All three divisions got the New Year off to a good start. In particular, the automotive division made another strong contribution to our growth. There, higher demand in Western Europe and China accounted for the positive development. The industrial division benefited from a healthy economy in its key markets.”

New records set in 2016 financial year

For the 2016 financial year, Röchling continued down a sustained path of success and growth.

Bartels added: “We have seen some outstanding developments, once more setting new records.

“We hit our targets for 2016, even though the year started off with many financial market players increasingly worried about a cooling down of economic growth.”

The Röchling Group boosted its consolidated revenue for the 2016 financial year to a new record, growing by 6.6%. For the 2016 financial year, there was also an increase in the number of employees at the Röchling Group, which rose 5% from 8,397 in 2015 to 8,815, including temporary employees as of the reporting date of 31 December 2016.

The Röchling Group had 229 trainees and apprentices for the reporting period, which are being trained for a range of professions from administration to production.

Of the total sales, Germany accounted for 32% while the rest of Europe contributed 32%. The share of revenue coming from the US was 22%, and 14% coming from Asia.

The largest share of total sales is contributed by the automotive division, while 41% comes from the industrial division and 7% from the medical division.

The Röchling Group increased its earnings before taxes (EBT) by €13.3m. This put the earning before tax (EBT) margin, defined as the ratio of EBT to total sales, at 7.4%.

Bartels said “The reasons for this profitable business year include the fact that we have dealt with our challenges consistently and systematically. We pursued our strategic goals without wavering and with intensity, and we further expanded our international presence, for example, by opening our first production plant in Silao, Mexico.”

The Röchling Group also stepped up its investments for the 2016 financial year. Capital spending grew by €41.5m, from €89.7m to €131.2m. Of the total volume of investment, 80.5% was spent on expansion.

Industrial division continued steady growth

The industrial division maintained its steady pace of growth from previous years. All told, the division saw a 1.9% increase in sales to €684.4m.

Executive vice-president of the Röchling Group’s Industrial Division Franz Lübbers said: “We managed to boost our sales volume considerably, but because of the extreme volatility in the cost of our raw materials and the resulting fall in sales prices, we failed to meet our expectations.”

The industrial division also felt the effects of the low oil price on its sales markets. In North America, the UK, and Denmark, there was serious restraint in spending in 2016. Customers from other industrial sectors, such as the chemical industry, mechanical engineering, electrical and electronics made up for only part of the resulting drop in sales. There was very positive growth in demand from the solar energy and from the leisure industry.

Lübbers added: “We are especially pleased to see the overall positive development of the industrial division from an international standpoint. In Brazil, the division increased sales by 17%, in China by 16%, in Japan by 32%, and in India by 14%.”

The industrial division had capital expenditures (CAPEX) of €41.2m for 2016, €9.7m more than the previous year. The investments were again focused primarily on expanding capacity in the US, at four locations in Germany, as well as in Austria.

Lübbers added: “Besides increasing our capacity and optimising our processes, we are persistently adhering to our innovation strategy. For instance, we have further expanded our market position with new and innovative products in every sector.”

In addition, the division unveiled new and advanced materials in 2016. For example, Röchling in Haren developed Polystone® P flex especially for the production of chemical tanks and plants. With its high elasticity, good resistance to chemicals and weldability with polypropylene, thermal and mechanical expansion can be compensated already during construction.

The LubX® also features a high-performance sliding material, which was given antistatic properties. LubX® AST black and LubX® AST color are specially conceived for use in conveyor systems that are run at high speeds and with high-pressure loads, resulting in increased productivity.

For the conversion of the first German container ship to an eco-friendly propulsion using liquefied natural gas (LNG), Röchling is contributing low-temperature insulation made of Lignostone® cryogenic.

Investment in the automotive division for further growth

The automotive division generated sales of €855.9m for Röchling in 2016, a 10.1% increase in revenue over the €777.5m earned in 2015. Viewed as a whole, nearly every region covered by the division saw increased sales compared to the figures for the prior year. Only the Asia region posted a slight drop in sales, mainly attributable to currency effects.

The management board member in charge of the automotive division Erwin Doll said: “We executed the automotive division’s growth strategy at a rapid pace. We built a new facility in Silao, Mexico, and we carried out expansions in Ostrava, Czech Republic, and Wackersdorf, Germany.

“In addition, new engineering centres were opened at our locations in Laives, Italy, in March 2017 and in Worms, Germany, in May 2017, laying the foundation for innovative growth.”

The company opened its new US-based technical centre in Troy, Michigan, back in March 2016. Its facility in Peine has also been expanded to include a new production hall. New facilities are also being built in Spain, China and Eastern Europe, and the site in Romania is being expanded. Altogether, the automotive division increased spending from €49.9m in 2015 to €79.3m in 2016.

Active grill shutters and underbody systems, as well as products for air and water management, were particular drivers of growth. In the future, Röchling Automotive’s expertise in selective catalytic reduction (SCR) technology will help it become the market leader in the segment of SCR tank systems, giving an added strong boost to the growth of the division. With the aid of this technology, catalytic converters remove up to 90% of nitrogen oxides from the exhaust of diesel vehicles.

This makes SCR technology part of the solution to the problem of emissions. At its facility in Laives, the company develops SCR tank systems for a large number of automobile manufacturers and are either already producing or will be producing them in ten factories worldwide.

The air ducts made by Röchling Automotive are just as successful. One big-name German automaker is using actively adjustable air ducts for the new series of two of its models.

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