Interview with the Executive Board
The 2023 result is an initial partial success
More stable production conditions and a comprehensive fitness program have enabled the Rosenbauer Group to return to profitability in 2023. Based on enormously strong customer demand, the Group’s profitability is to be further improved this year and the equity ratio increased for new growth.
Markus Richter (CFO), Sebastian Wolf (CEO), Andreas Zeller (CSO)
The Rosenbauer Group achieved an operational turnaround in the past financial year of 2023 and returned to a positive result for the period. Are you satisfied with this?
Sebastian Wolf We improved our operating result by almost € 50 million in the reporting year. This is a remarkable achievement, especially in light of the ongoing supply disruptions for individual parts and the cyber-attack in February, and I am proud of it. Our “Refocus, Restart” program to reduce manufacturing costs in the Rosenbauer Group contributed to this with 54 individual projects. Many thanks to everyone who helped with this. At the same time, we have adjusted our bid prices for new tenders in line with the increased costs, which will now gradually impact earnings in 2024 and 2025. This result is therefore an important initial partial success, but we must continue to work on our profitability in 2024.
According to unanimous expert opinion, the generally weak economy is likely to improve only marginally this year. What are your expectations for the further course of business?
Andreas Zeller The firefighting industry is a classic laggard of the economy, and as such follows the general economic situation with a time lag of 12 to 24 months. Our customers come almost exclusively from the public sector, which does not cancel existing orders even in these weak phases and instead often invests anti-cyclically. Despite the necessary price adjustments, we were able to post a record level of incoming orders of € 1,450.3 million in 2023. With the exception of the Preventive Fire Protection segment, all of our sales divisions contributed to this. As a result, our order backlog increased to € 1,788.0 million. Consequently, we are also expecting a further increase in our revenues this year and have set ourselves a target of around € 1.2 billion in deliveries.
Improved processes must make a significant contribution to operational excellence in 2024. This will enable us to reduce working capital and further increase our profitability.
SEBASTIAN WOLF, CEO
What will Rosenbauer’s sales department focus on in the next 12 months?
Andreas Zeller Our focus this year will again clearly be on expanding the non-vehicle business, i.e. equipment, service, components, and digital solutions. We want to push standardized products that deliver solid contribution margins, can be produced at short notice, and brought to market quickly. In 2023, for example, we launched a special edition of our FOX to mark the 100th anniversary of the portable fire pump and sold and produced around 100 additional units over a period of 17 weeks. This year, we want to promote the RTE Robot with predefined modules and shorter delivery times. At the same time, we will continue to press ahead with the market launch of our fully electric “Revolutionary Technology” (RT/RTX).
How have the Rosenbauer Group’s net debt and equity ratio developed?
Markus Richter Although we made good operational progress in 2023, we see further challenges ahead of us. Our lead times in vehicle production are too long, which means that our working capital is still too high. Supply chain disruptions are also impairing efficiency. The enormous rise in interest rates in 2023 as part of the fight against inflation also led to significantly higher financing costs. “On time and on budget” is now our motto. At the end of the year, our net debt amounted to € 428.2 million and the equity ratio was just 15.7 %.
In addition to a further improvement in the EBIT margin, the focus is therefore on reducing working capital and thus debt. With a view to rapidly strengthening our equity base, we are planning – subject to the necessary board decisions – a capital increase in the 2024 financial year to lay the foundation for further profitable growth. We have not yet reached our goal, but we are well on the way to realizing the global potential of our Group that is clearly visible in our order backlog.
What specific plans do you have to further increase efficiency in 2024?
Sebastian Wolf Firstly, in the coming weeks until May, we will be taking another close look at the offer-to-cash process, our main process, as part of a strategic project. As part of this project, all processes – from offer preparation to order receipt, order clarification to dispatching, production dispatching to customer acceptance and the associated change order processes – will be analyzed in detail. The aim is to critically evaluate this main process and identify potential for improving efficiency and results. I expect this to lead to positive changes in the sub-processes and make a significant contribution to operational excellence.
Secondly, we will adjust our organizational setup within the Group and bring together the management of all plants worldwide under the responsibility of the CTO in the future. I am confident that the findings from the Efficient Offer-to-Cash Process project will enable us to achieve a sustainable improvement in our profitability.