Market trends

During the reporting year, the Doors Division achieved a revenue of CHF 357.5 million (previous year: CHF 340.0 million), which represents growth of 5.1%. Adjusted for currency effects, the revenue increased by 2.1%. The division's EBITDA amounted to CHF 39.6 million (CHF 36.7 million in the previous year). Without special effects, EBITDA grew from CHF 36.4 million in the previous year to CHF 40.2 million. The result for the EBIT amounted to CHF 18.7 million (CHF 14.9 million in the previous year). Excluding special effects, this resulted in an EBIT of CHF 19.3 million (CHF 14.7 million in the previous year).

The 2018 reporting year was also marked by a fundamentally promising market environment for the Doors Division. With more than a 60% share of total revenue, Germany was the division's most important market by far, followed by Switzerland and Poland. In Switzerland, however, the division recorded a slight decrease in revenue with RWD Schlatter. This was due to changes in market cultivation activities, as it has increased its focus on profitability in the contractor services business.

The German market also continued to experience very positive growth. The total market for interior doors grew by around 3 – 4% in 2018 compared to the previous year. This continues to be attributed to the positive trend in residential construction, where new constructions in particular have increased. Renovations, on the other hand, recorded a slightly negative performance and non-residential construction remained constant. The revenue growth of Prüm and Garant was above market growth. The division expects the positive market environment to also continue in 2019 and 2020, despite the assumption that new construction activity in particular will decline slightly. The increased availability of tradespeople means that residential renovations are set to increase somewhat over the next few years. Overall, the division anticipates total market growth of 1–2% a year. With Prüm and Garant, the division holds a market share of just over 20% of the German interior door market.

The Swiss residential market remained at the same high level as previous years. The continued high demand for investment properties due to a lack of investment alternatives remains the most important factor supporting the Swiss construction market. The non-residential sector experienced a decline and there were no economic stimuli for commercial properties. Demand for construction in the public sector, including hospitals and schools, on the other hand, recorded steady demand. RWD Schlatter is excellently positioned in this segment. In total, the division achieved a market share of almost 20% in Switzerland.

The Polish residential market continued to benefit from strong economic growth in the country. The number of apartments completed in 2018 increased by 2.5% compared to the previous year. This growth was driven by good labour market conditions with rising wages and falling unemployment. This positive trend is expected to continue in 2019 even though economic growth is anticipated to decline to some extent. With Invado, the division has a market share of 4% in the Polish market.

Products, technology and innovation

In anticipation of the BAU trade fair in Munich (D) in January 2019, the Doors Division has launched a whole host of new products on the market. Highlights include the "SmartDOOR", hotel system doors and the new premium edge.

In October 2018, Arbonia acquired a minority interest in KIWI.KI GmbH, a PropTech company from Berlin (D). KIWI is known for its key-less access system for building and apartment doors in apartment blocks. In conjunction with the company, the Doors Division has developed a "SmartDOOR" with which it intends to take advantage of and shape the opportunities offered by digitisation. Integrating the KIWI access system in the division's doors allows the doors and associated access rights to be managed online via the KIWI portal. Accordingly, users can be created and access rights assigned and then deleted again with ease should the need arise. In addition, the portal also enables doors to be opened at the click of a mouse. Authorised persons can unlock the front door with ease via the KIWI transponder or the KIWI app. As a result, building managers no longer have to engage in unnecessary work or worry about having the right keys at the right time in the right place. The innovative KIWI technology is suitable for all doors within an apartment block and works alongside the conventional locking system.

In conjunction with door fittings specialist Häfele, the division has developed a hotel system door. It is known among experts in the field that door planning and implementation work is one of the most problematic tasks in the construction industry. In addition to meeting the design demands of architects, ensuring the necessary fitting accuracy and fulfilling the requirements of standards, functionality, safety and security and quality in long-term use also come into play. The new concept provides a simple complete solution for the customer and comprises the door leaf, finish, fitting and door frame. The complete solution makes the processes easier for both planners, installers and users alike.

Right from the very beginning, the Doors Division has been focusing on developing new ideas and making improvements to product quality as a way of setting itself apart from the competition. With an innovative and pioneering door edgebanding system involving an invisible joint, Prüm and Garant are ascending to a new level of quality. In total, the division has invested around CHF 22 million in these new systems. Thanks to this new production method, Prüm and Garant are setting completely new standards right across the door industry and demonstrating to their customers that they are innovative partners striving to meet the highest quality standards.

In addition to the new premium edge technology, the division also invested in boosting its productivity and capacity as well as in developing its logistics processes over the course of the reporting year. For example, investments in an additional processing centre for custom doors as well as in a single-sided postforming system has helped ease a major bottleneck in Prüm's production operations. At Garant, the division is also planning to invest in a fully automated processing centre for custom doors. What's more, it will be commencing work on installing a complete frame production line at the end of 2019. At Invado, the new door production hall was completed during the reporting year, meaning that work on installing the new production machinery can be started in 2019.

Sustainability

Energy and material efficiency are permanent areas of focus for the Doors Division. For example, hall lighting is gradually being converted to LED lighting, and when new machines and systems are purchased, efforts are made to ensure that the drives and motors used comply with the latest efficiency classes. In addition, continual improvements to systems ensure that productivity is permanently increasing and the energy required to manufacture each component is continuously decreasing.

Employee well-being is also a matter of great concern for the division. To name just a couple of examples, the canteens and social spaces at Prüm in Germany and Invado in Poland have been modernised over the course of the reporting year.