PRESS FOLDER
ANNUAL PRESS CONFERENCE
3RD AUGUST 2011
PRESS FOLDER
ST. JOHANN, AUGUST 2011
Your contact persons are:
Dr. Thomas Leissing
Head of Finance/Administration/Logistics EGGER Group
Group Management Spokesman
Walter Schiegl
Head of Production/Technology EGGER Group
Ulrich Bühler
Head of Sales/Marketing EGGER Group
For queries:
FRITZ EGGER GmbH & Co.
Holzwerkstoffe
Christina Werthner
Weiberndorf 20
6380 St. Johann in Tirol
Austria
T +43 5 0600-10681
F +43 5 0600-90681
christina.werthner@egger.com
PLEON Publico
Dr. Wolfgang Immerschitt
Paracelsusstraße 4
5020 Salzburg
Austria
T +43 662 620 242-0
F +43 662 620 242-20
w.immerschitt@pleon-publico-sbg.at
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ST. JOHANN, AUGUST 2011
EGGER STRATEGY PROVES SUCCESSFUL
20 % increase in turnover to around EUR 1.8 billion – business conditions
improved in almost all sales markets – significant increase in the number
of employees – investments nearly doubled – raw material costs remain
high – capacity utilisation and order volume very good – 10 % higher
turnover expected in the current business year
EGGER generated its highest turnover in the company’s history for its 50-year
anniversary. Thanks to a clear strategy, the wood-based material
manufacturer was able to take full advantage of the economic recovery.
Responsible action during the crisis paid off for the family company.
“We are especially pleased that we were able to boost our turnover in all sales
regions. This also confirms the excellent positioning of the EGGER Group as a
whole,” says Thomas Leissing, Group Management Spokesman and Head of
Finance/Administration/Logistics. Thanks to the economic recovery in its core
market of Europe, EGGER was able to boost production and significantly improve
capacity utilisation.
The number of employees rose from 5,390 to 6,012 on average over the course of
the year and now stands at approximately 6,500. “The number of employees went
up this year, mainly due to the acquisition of the Roma Plastik plant last year and
Gagarin in the current year,” Leissing says.
Out of the 20 percent increase in turnover from EUR 1.48 billion to EUR 1.771
billion, 14 % came from volume increases and only 6 % from price increases. “As
expected, we were unable to implement sufficient price increases to fully
compensate for the pronounced rise in raw material prices, including wood,
chemicals and paper,” Thomas Leissing says. Earnings before interest, taxes,
depreciation and amortisation (EBITDA) of EUR 229 million in the 2010/11 business
year therefore fell short of the prior-year value of EUR 236 million by 3 %. “We are
satisfied with this result, which exceeds our plans from the beginning of the
business year,” says Leissing. The company expects turnover to increase by 10 %
in the current business year.
INVESTMENTS IN NEW AND EXISTING PLANTS
With total investments of EUR 167 million, EGGER nearly doubled the value from
the crisis year 2009/10. “We have continued improving our competitiveness over the
past year,” says Walter Schiegl, Head of Production/Technology. One of the focal
points was the Romanian plant in Radauti, where investments are being made in a
new OSB plant, a new resin plant and an administration building.
“We also completed the wet chip preparation facility in Rion des Landes, France. In
Great Britain, we expanded our warehouse capacity in Hexham and built a recycling
facility in Barony,” Walter Schiegl says. “In addition to the investments of EUR 167
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million, EUR 70 million was spent on acquiring a majority interest in the Turkish
edging manufacturer Roma Plastik,” says Schiegl.
On the reporting date of 30th June 2011, the takeover of a chipboard plant in
Gagarin, Russia came into effect. The plant has 500 employees, a chipboard
capacity of 500,000 m3 (17,657,333 cubic feet), three short-cycle lamination presses
and a forestry operation of around 80,000 hectares (197,684 acres). “In particular,
the outstanding condition of the plant which was built three years ago was a crucial
factor in favour of this decision,” Schiegl says.
CLEAR STRATEGY FOR FURTHER GROWTH
With the start of the new business year, EGGER has combined all construction
activities in a dedicated division. This means the OSB plant in Wismar, the sawmill
in Brilon and soon also the OSB plant in Radauti present a common face to the
market. “Wood construction is steadily gaining popularity in many markets.
Ecological considerations play an important role in this trend, along with the
numerous advantages of this construction method,” explains Ulrich Bühler, Head of
Sales/Marketing. EGGER intends to meet rising demand with its products such as
OSB, DHF and DFF boards as well as timber, and also increasingly offers system
solutions for wood construction companies and industrial suppliers, for example in
the prefabricated home sector.
In the current business year, EGGER is planning additional investments in the
existing plants – including Hexham, Rambervillers and Gifhorn among others. A new
impregnation line and a short-cycle lamination line of the latest generation are being
installed in Hexham. In Rambervillers, a comprehensive extension programme is
being implemented which also encompasses a new lamination line as well as
various warehouse and logistics measures. Gifhorn is getting a new lamination line,
which will meet rising demand for laminates thanks to a higher production capacity.
While the focus of further growth for EGGER is mainly on Eastern Europe, Russia
and Turkey, the company will continue pursuing higher market share in the existing
markets. “As long as the economy remains stable, our additional capacities will
allow us to meet rising demand,” says Bühler. EGGER is also strengthening its
worldwide presence with new sales offices in Chile and Australia.
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CHALLENGES – SKILLED WORKERS, VOLATILITY AND WOOD
EGGER is rising to key current challenges with confidence. In particular, the
industry is concerned with the shortage of wood. ”In order to secure our supply of
raw materials, we are counting on solid long-term partnerships, the reuse of
recycling wood and also increasingly on the backwards integration of forestry
operations and sawmill activities,” says Bühler.
EGGER is responding to volatility in specific markets with an international presence,
a broad product spectrum and various distribution channels as well as its own
competitiveness and innovativeness.
While the shortage of skilled workers is worsening in many operations, EGGER is
also favourably positioned in this regard. “We conduct in-house training, enjoy a
high level of employee loyalty and have always invested heavily in our employees
and their progress,” Leissing says. 17 new apprentices began their careers on
1st August at the headquarters in St. Johann alone.
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MARKET ENVIRONMENT AND DEVELOPMENT DETAILS
EGGER is taking advantage of the economic recovery and boosting
turnover in all sales regions.
Business conditions in the sectors relevant to EGGER continue to improve.
The business year after the crisis was defined by a significant increase in
capacity utilisation at all plants and higher turnover in all sales regions.
Remaining excess capacity in the industry is only being eliminated slowly,
which makes it more difficult to enforce necessary price increases.
While the 2010/11 business year for EGGER was defined by the recovery of the
global economy, regional trends vary widely. The construction industry in Western
Europe, which is significant for EGGER, suffered more severely from the economic
crisis than in Eastern Europe and has not yet recovered to the pre-crisis level.
Turkey and Russia are expected to drive future growth. The furniture industry has
more or less recovered from the downturn and is expected to experience moderate
growth.
EGGER was able to significantly improve the capacity utilisation of its production
facilities in 2010/11. For rawboard (chipboard, MDF, OSB, timber), the production
volume increased from 5.8 million m 3 (204.83 million cubic feet) to 6.3 million m 3
(222.48 million cubic feet) for growth of 9 %. The impregnated paper volume was
boosted from 608.3 million m 2 (6,547.69 million square feet) to 680 million m 2
(7,319.46 million square feet) or by 12 %. Laminate production grew from 19.8 to
22.3 million m2 (213.13 to 240.04 million square feet), and glue production
increased from 317,900 tons to 351,000 tons. Out of the rawboard production
volume, 214 million m2 (2,303.48 million square feet) was laminated, 62 million m 2
(667.36 million square feet) was upgraded into flooring and 33 million m 2 (355.21
million square feet) was upgraded into prefabricated furniture components.
DEVELOPMENTS IN THE “INTERIOR DESIGN AND FURNITURE”
SEGMENT
In North-West Europe with Germany as the leading market, business conditions for
the furniture industry have improved significantly. The order volume for wood and
boards as well as the processing joiner’s trade is good. EGGER was able to boost
turnover by 17 %.
In Central Southern Europe, Austria remains stable at a high level in the distribution
business while the expected recovery in the furniture industry remains restrained.
EGGER continues to benefit from a strong construction industry in Switzerland
which is carrying the business. Customers in Italy are struggling with a weak
domestic economy and moderate exports. EGGER was able to increase turnover by
9 % in this region.
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The U.K. and Ireland sales region remained stable overall. EGGER experienced
rising demand, partly due to lower domestic production and reduced import
volumes. Turnover was boosted by 14 %.
In South-West Europe, the situation remains challenging in Spain and Portugal as
prices are at a very low level. EGGER was nevertheless able to increase turnover
for the French plants by 12 %.
The economy is once again recovering in Central Eastern Europe, in part thanks to
exports to Western Europe and especially Germany. Exchange rate problems and
aggressive pricing by competitors continue to impair developments for EGGER.
Turnover was boosted by 8 %. However, investments in the Radauti plant will
further improve the competitive position. The market and turnover situation for the
plant in Turkey was favourable.
In Russia the market is moving towards the pre-crisis level. Distributors report that
the order volume is favourable and the capacity utilisation of furniture manufacturers
is good. EGGER was mainly able to score points in the residential and bedroom
furniture segments as well as the take-home furniture segment. Turnover increased
by 23 %.
In the overseas region, developments differed between the two leading markets of
Japan and China. Turnover increased by 17 % overall.
DEVELOPMENTS IN THE “FLOORING” SEGMENT
The laminate flooring market has once again stabilised in terms of volume after the
crisis year 2009. With the exception of Spain and Portugal, the market in Western
Europe is more uniform than in Eastern Europe. Market developments in Turkey
were highly dynamic. Capacity utilisation in the industry remains unsatisfactory,
mainly due to high levels of excess capacity. As a result, rising raw material costs
cannot be sufficiently passed on to the market. With a market share that has
increased to around 14 %, EGGER is among the largest manufacturers in Europe
and was able to increase turnover by approximately 13 %.
DEVELOPMENTS IN THE “TIMBER AND OSB” SEGMENT
Building products, which have been bundled in their own division since the
beginning of May just like flooring, developed very well in the past business year.
EGGER is generating one-tenth of its turnover with timber and OSB in the
meantime. Business developments in wood construction and the packaging industry
are favourable. EGGER was able to increase turnover by 31 % compared to the
previous year.
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EGGER CELEBRATES ITS 50TH BIRTHDAY IN 2011
The Tyrolean wood-based material manufacturer has been following its
motto “More from Wood” for over 50 years now.
From a small chipboard plant founded in St. Johann in Tirol, the family
company EGGER has developed into a leading wood-based material
manufacturer over the last five decades. Fritz Egger Senior laid the foundation
in 1961 for an international family company with regional roots. Today EGGER
based in St. Johann in Tirol has around 6,500 employees in 22 countries
around the world.
“We value personal relationships and manufacture tangible products. EGGER
stands for innovation as well as reliability,” says Thomas Leissing, member of Group
Management along with Ulrich Bühler and Walter Schiegl.
ENTREPRENEURIAL COURAGE AND VISION
In 1961, Fritz Egger Senior decided to invest in a chipboard plant with the equivalent
of around EUR 25,000 in start-up capital. Even back then, he recognised that the
raw material wood was too valuable to throw away the waste generated by sawmill
production. He put his money on the comparatively new material chipboard. He
closed the family’s modern sawmill, which was doing well, in favour of the new
venture. Chipboard production commenced in St. Johann in Tirol on 18 th December
1961.
“Much of what EGGER stands for today can be traced back to Fritz Egger Senior,”
says Ulrich Bühler. “He exhibited entrepreneurial courage and vision when he
founded our company. His values, such as honesty, reliability and hard work, define
us to this day.”
PARTNERSHIPS FOR SUCCESS
A key entrepreneurial principle of Fritz Egger Senior also remains very important
today: partnerships. In 1961, he decided to close the existing sawmill so that he
would not be a competitor to his future suppliers – the sawmill operators. However,
this example also illustrates how things change over time. Today EGGER operates
its own sawmill, which is not only a key component of the newly founded EGGER
Building Products Division, but also makes the Brilon plant in Germany a full-scale
integrated location, securing the supply of wood for board production there.
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INTERNATIONAL GROWTH
EGGER manufactured its products exclusively in Austria until Fritz Egger Senior
suddenly died in an accident. His three sons Michael, Fritz and Edmund carried on
his life work and successfully expanded abroad. The first plant outside of Austria
was established in 1984 in Hexham (UK). The number of plants has grown to a total
of 17 in the meantime. Since July 2011, the latest addition is the Gagarin plant in
Russia where EGGER is now represented with two production facilities.
FOCUS ON CUSTOMER BENEFITS
Wood is a versatile material. No wonder the EGGER motto is “More from Wood”. In
the course of its 50-year history, the company has managed to set industry
standards time and time again. An example for this is the development of decors
and textures that meet current interior design trends. Innovative materials are also
part of this trend, for example the EUROLIGHT lightweight board which EGGER has
been producing on an industrial scale since 2006 – as the first company to do so –
at the headquarters in St. Johann in Tirol. The focus is always on additional benefits
for the customer and on costs. One of the latest EGGER innovations pursues this
direction as well: the digital solutions, which range from digital decor development to
digital printing to the digital presentation of decors using the Virtual Design Studio.
This allows the decor development and selection process to be significantly
accelerated while reducing costs.
CREATING SUSTAINABLE VALUE
For EGGER, sustainability is not a trend but the basis of economic success. Not
only did the company invest in sustainable production concepts early on, for
example in its own biomass plants. It has also applied the concept of sustainability
to its business relationships and especially to its employees.
“Not only do we have highly modern, state-of-the-art plants, we also have the right
employees,” explains Walter Schiegl, Head of Technology/Production EGGER
Group. “Without them the best plants would be no good to us. We are more than a
family company, we are a team. EGGER is defined by its employees and we want to
promote their development in the company. This process starts with our
apprentices.”
In appreciation for the performance of its employees, EGGER therefore announced
the payment of a 50-year anniversary bonus to all employees so they can partake in
the success of the company.
The wood-based material manufacturer has always viewed its employees as a key
success factor for the company as a whole. Accordingly EGGER puts a
corresponding focus on offering opportunities for progress to the employees.
EGGER is known as an employer opening up numerous career paths today. “We at
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EGGER are the sum of our employees. Many of our managers today started out as
apprentices,” says Walter Schiegl, who once joined EGGER as an apprentice
himself.
OUTLOOK
Notwithstanding the tremendous challenges faced by the industry, such as the
scarcity of the wood supply, volatile markets and a lack of skilled workers, which are
demanding more and more flexibility and creativity among all participants, Ulrich
Bühler believes the group is well positioned for the future. “We are a highlyrespected family company. We are changing as the world around us also changes.
But we remain true to our core values.”
ABOUT EGGER
The Tyrolean family company with around 6,500 employees and turnover of
approximately EUR 1.8 billion has 17 production plants in seven countries across
Europe. EGGER supplies its products to the furniture industry, wood distributors, the
joinery, flooring installer and carpenter trades as well as wood construction
companies, pre-fabricated home manufacturers and DIY markets. A total of 22 sales
offices and an international network of distribution partners ensure the worldwide
distribution of EGGER products. These are found in many different areas of private
and public life: in kitchens, bathrooms, offices, living rooms and bedrooms.
Following the guiding principle “More from Wood”, the Tyrolean wood processor
offers a comprehensive product range of wood-based materials, timber and
laminate flooring under the EGGER umbrella brand.
EGGER BUSINESS DEVELOPMENT 2010/11
 Highest turnover in the history of
the company:
EUR 1.771 billion
 Growth in all sales regions
 Significant improvement in plant
capacity utilisation
 Results slightly below prior-year
value due to rising raw material
costs
 Expansion strategy continues to be
pursued
 Focus on developing new markets in
Southern and Eastern Europe as well as
Eurasia
 Investments in new and existing plants
 Clear strategy to meet the major
challenges facing the industry
 New plant in Russia
 New EGGER Building Products division
for construction products
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