New location concepts are intended to secure medium-term growth targets

After the crisis year 2009 also had an effect on Wintersteiger AG, the Upper Austrian mechanical engineering company is coming back with impressive figures for the 2010 financial year.  During the past reporting year, the company posted consolidated sales of EUR 93.4 million. The operating profit of EUR 9.6 million is also quite impressive, as it ultimately corresponds to an EBIT margin of 10.3 percent. The export rate was at 88.4 percent in 2010 and shows the international orientation of the Upper Austrian company. For the trio of managers at Wintersteiger AG, the result is by all means respectable, but the end of the flagpole has by far not been reached yet.

Chief Financial Officer, Roland Greul MBA, is satisfied with the company's result and its strategic orientation in the form of the 3-sector policy, but knows that the company holds significantly more potential. Greul sums it up as follows: "Our result is good, but we will only really be satisfied when we utilise our strengths even better and fully exhaust our strategic options." Wintersteiger is involved internationally in completely different target markets with its three divisions, Sports, Seemech and Woodtech. Therefore, the company is in a more crisis-proof position than many other mechanical engineering companies. "We are a global market leader and leading innovator in all three corporate divisions, but still must not overestimate ourselves", warns Greul, about too much self-confidence. And he expresses that at Wintersteiger, attention will always be given to driving innovations forward, as well as operating in a customer-oriented, flexible manner and with maximum efficiency. Only this way, can the company live up to its strong market positions in international competition.

A clear strategy and very good equity ratio

The strategic decisions of the past years prove the managers of Wintersteiger right. Greul on this: "In recent years, we have operated a consistent product and sales policy. With innovative products, we have opened up new markets, industries and thereby also an additional sales potential. At the same time, the entire production process has been optimised and made more flexible. All of these activities have ultimately contributed to emerging stronger from the crisis." In fact, in the midst of the crisis, Wintersteiger increased its efforts to make itself fit for the rising competition. In the meantime, the company produces its machines just-in-time according to MTO criteria (make-to-order) - and that, in the total model mix.

During times of difficult general economic conditions, it pays off to have a healthy equity ratio. This fact was co-responsible for that fact that Wintersteiger came through the crisis so well. At the end of the 2010 financial year, the equity ratio in the Group was at 55.8 percent, while in the Group parent company, Wintersteiger AG, it was even at 61.7 percent. In the coming months, Wintersteiger is starting with the construction of additional production and office premises at its Ried im Innkreis location. The company's very good capital ratio is regarded as a solid foundation for this. In the medium term, the company management is aiming for sales of EUR 130 to 150 million. With the expansion of the location, the necessary requirements are intended to be created for this.

Expansion of the production and office premises at the Ried location

In order to facilitate further company growth, it became necessary to develop a new location concept. In a first step, a new logistics centre was built in St. Martin, Upper Austria, with a size of 6,200 sq.m. Through this, several warehouse and logistics locations in and around Ried im Innkreis have been combined at a central location during the past months. The main warehouse at the Ried production site was also integrated into the logistic centre. At the new location in St. Martin, Wintersteiger currently employs 35 staff. In a further step, extensive expansion activities are to start in Ried. Ing. Walter Aumayr, Director of Technology on this decision: "Through the relocation of the warehouse premises away from the main factory and the new construction, additional production and assembly space is being created of around 2,000 sq.m. Through this, we can further optimise our production processes properly." During the course of this construction, Wintersteiger is also building additional office premises with a size of around 1,600 sq.m. Aumayr assumes that the expansion of the Ried location can already start in early summer. In total, Wintersteiger is investing around EUR 5 million in this project. "With this location concept and the ongoing process optimisation, we are creating the basis for the sales targets that we are aiming at in the medium term", says Walter Aumayr about the prospects for Wintersteiger AG.

Research and development as a basis for innovation

Wintersteiger is a market leader in each of its three corporate divisions. In addition to this, the company is also a leading innovator and sets the tone for key technologies. There is a good reason for the innovation of the Upper Austrian mechanical engineering company, it results from a clear commitment to research and development. During the past financial year, the company invested around EUR 5.5 million in this area, which corresponds to an R&D ratio of 5.9 percent. Walter Aumayr clarifies this on the basis of further figures: "In 2010, we invested around 90,000 hours in development activities. Four years ago, this value was at around 65,000 hours. These figures make it clear that we regard R&D as a key basis for our innovation.

In addition to its in-house development activities, Wintersteiger cooperates with numerous universities, universities of applied science, higher technical colleges and engineering firms. "We are constantly searching for new findings and new know-how; that is why these cooperations are important to us. In addition to this, contacts are established in this way with possible, new top employees for our company. We are always interested in outstanding talent for our Development department", added Ing. Walter Aumayr.

Development in the three divisions of Wintersteiger AG

The Sports division, which is active on the market with total solutions for rental and service of skis and snowboards, has generated the largest share of sales of all three divisions. This mainly results from the good winter 2010/2011 in Europe and the USA and the economic regeneration on the US market and in Eastern Europe. The rising trend toward high-quality ski rental has also contributed positively to the result. Markus Piber, Director of Marketing and Sales, also sees Wintersteiger's strategic orientation confirmed in this: "The development toward a full supplier for ski rental has proven to be absolutely right. The trend toward high-quality ski rental is increasingly affecting our results. With our single-source supplier concept, we are positioned better than our competitors."

The Seedmech division is active in the area of field testing technology and has ended 2010 with an extremely positive result. In spite of the worldwide reduction of budgets for state research and cultivation operations, the division generated its highest sales ever. This was mainly due to the outstanding order situation in North America and the excellent results of its new subsidiaries in China and Brazil. Four years ago, Wintersteiger started to become even more strongly involved in the BRIC countries (Brazil, Russia, India and China), as the growth dynamics are enormous in these countries. According to Markus Piber, the market launch of the new Dynamic Disc single-grain sowing machine also contributed to this, which was launched on the market in 2010. The reorganisation of international key account management also had a very positive effect on the development of the Seedmech division.

During the crisis year 2009, the Woodtech division was the biggest problem child at Wintersteiger. The division produces machines for high-quality thin wood cutting, for example, for the parquet flooring industry, as well as for window and door manufacturers. Due to the global economic crash, important investments in these industries were held back, but were partially carried out again in 2010.

After years of strong growth, Woodtech felt the effects of the crisis the most. In 2010, the division sales were able to be increased by around 40% again, compared to the crisis year 2009. Markus Piber on this: "At Woodtech, we are very well positioned strategically, however, in the traditionally important markets such as the USA, Spain and Great Britain we are still feeling the aftermath of the crisis. Instead, we are now scoring more points in China and numerous Eastern European countries. With our product range, we should profit more strongly again from a continued recovery of the global economy. According to Piber, the band saw technology is developing very well; the Wintersteiger machines are global leaders in terms of throughput and saw kerf. The company also supplied the appropriate answer to the trend toward fully automated production years ago. With Woodtech Systems, the foundation was laid in order to realise upstream and downstream automation processes for global customers, from planning right up to processing.  

National and international headcount as of December 31, 2010

As of the end of the 2010 financial year, Wintersteiger employs 616 staff in the Group worldwide. 450 staff members work in the Group headquarters in Ried im Innkreis. 48 apprentices are currently in training. Therefore, the company is also one of the top vocational training operations in the region. 16 new apprentices will start at Wintersteiger this year. "For decades, we have relied on training our future skilled workers and management staff ourselves. We regard this as sustainable human resources policy", says CFO Roland Greul. The trio of Wintersteiger AG managers agree that on the basis of the medium-term growth plans, additional, qualified jobs will be created at the Ried location.

The current 2011 financial year

The Board Members of Wintersteiger AG expect a solid financial year 2011. However, there are still exogenous factors that are difficult to assess. So far, it is unclear how sustainable the recovery of the global economy will be and how the development of state expenditures and the economic programmes will affect the investment activity in Wintersteiger's business fields. Wintersteiger's current financial year is characterised by the conversion and expansion plans at the Ried im Innkreis location and the further optimisation of the production, logistics and sales processes.  

Furthermore, the integration of the most recent company acquisition is already fully underway. In April 2011, Wintersteiger announced that it had secured a majority stake in BootDoc Handels GmbH in Liezen. The company mainly produces shoe insoles for the sport sector and generated sales of EUR 1.7 million during the 2009/2010 financial year, with a 55 percent export rate. "BootDoc fits very well into our corporate and growth concept. Particularly with the Sports division, we are expecting significant synergy effects and sustainable growth, as the target groups are ultimately identical. Our global sales network with 15 own branches and 60 representative offices should already move the sales of BootDoc upward in the short term and medium term", says Markus Piber about the acquisition.