Brose achieves turnover of 2 billion euros for the first time
Despite the sluggish domestic market and the constant cost-driven pressure in the international supplier industry, Brose presented a positive balance at its annual press conference today. Turnover will increase by 4 per cent to some 2 billion euros in 2004 and is expected to increase again significantly in the coming year. “With the focus on extending our position as a technology leader as well as on a new product segment and innovations in all of our product fields, we are determined to achieve our aims despite difficult general conditions,” said Michael Stoschek, President and CEO of the Brose Group.
Brose posted an 8% growth rate in window regulators with revenues totaling 820 million euros; the seat adjuster business business grew by 5% to 340 million euros. The closure system business division’s turnover remained unchanged at 220 million euros as did the door system business’s at 620 million euros.
Due to falling prices which could not be offset on the costs side, the result lagged behind the development in turnover, failing to achieve the internal targets. The company’s cash flow however sufficed to finance further expansion and capital expenditure of over 170 million euros without having to borrow outside funds – not least because of the low dividend payouts made to the shareholders. Likewise, the company does not expect in the coming year to be able to completely recoup price increases, in particular in the case of steel, from its customers.
The company’s management expects significant growth in the door system and seat adjuster business divisions abroad in 2005. According to Michael Stoschek: “Our foreign business will grow by more than 30 percent. In Germany however there will be a slight decline. In the coming year, Brose will, for the first time ever, generate more than half its turnover outside Germany.”
At the press conference, Michael Stoschek said he was convinced that given the fierce competitive pressure, Brose would be able to succeed over the mega-suppliers, in particular, if the company could extend its position as a quality and innovation leader in all areas. „Innovations are not however just an end in themselves,“ said Stoschek. “They have to provide the car driver with benefits in terms of comfort and safety or lead to lower product costs. That is why strict standards are applied to research and development expenditure.” Every ninth employee at Brose is engaged in the development of new products or manufacturing processes; that means almost 1,000 engineers and technicians worldwide. 160 patents and utility models are filed annually.
In 2004, Brose spent almost nine percent of its business volume on innovations in research and development, information technology and personnel training and development.
The innovative expertise and the high quality standards at Brose can be seen in the success of the products: the family-owned company represented at locations worldwide is the market leader in window regulators, door systems and seat adjusters. Brose focused at a very early stage on the development of electric motors with electronic control-units, benefiting today both from its leading technological position in this field and with its 30 million units from economies of scale as well. Brose intends to extend this position and its existing product portfolio to include power closure systems for sliding doors, liftgates and trunk lids. Brose sees a growing market in this area due to new vehicle concepts in the USA, in Japan and increasingly in Europe, too.
„Being innovative at Brose is not just restricted to products and manufacturing procedures,“ said Stoschek. “It is equally important to have the courage to break new ground in the way structures and processes are designed. Our intention is to increasingly come up with progressive solutions in the areas of staff training and development, information technology, office communication as well as working and remuneration models. We want to be at the leading edge of the industry in these areas, too,” explained Stoschek. The company particularly made a name for itself in its industrial sector, when it introduced the “New Brose Organizational Model”, a working environment concept which is exemplary in Germany.
Some four years after the introduction of this concept, positive results are evident: costs have been cut, performance increased and the employees’ motivation boosted. Further proof of employee satisfaction with the Brose Organizational Model can be seen in the employee turnover rate (1.7%) which has dropped to a third of what was before the concept was introduced. Absenteeism has also fallen by 30 percent.
In recent years, Brose has made significant investments in information technology, particularly in SAP software, which has been implemented worldwide. It is now possible for new locations to go operational with this software within four to six weeks through the central organization of solutions. Stoschek praised the international collaboration with SAP over the last six years which was of benefit to both parties.
Cost savings measures will play a major role primarily at the German locations over the next few years. The company does not intend to increase its personnel costs in Germany in the coming business year and plans to significantly reduce them over the following years. The aim is to keep as many jobs as possible at the German locations.
„We are working on new solutions as to how we can reduce the cost impact on our products caused by personnel costs, if possible, without reducing the net income of our employees,” said Stoschek. Brose plans to implement measures which have already been agreed to in the automotive supplier industry, such as waiving collective agreement pay rises, cutting back on vacation entitlement or increasing working hours without any compensatory wage increase. Another possibility under consideration, for example, is to claim vacation days for company training courses.
Press contact:
Christian Treinies
Phone: +49 9561 21 2332
Telefax: +49 9561 21 1704
E-mail: christian.treinies@brose.net
