ARBONIA

Sustainable business strategy

Sustainable business strategy & market orientation

Arbonia considers the long-term orientation of its business model towards future markets and sustainable, profitable growth to be a sustainable business strategy. With a focus on energy-saving and CO2 -efficient products, the group is on the right track. With its product portfolio and its innovative strength, Arbonia is well prepared to meet future needs and hold its own in the market.

Between 2015 and 2019, Arbonia successfully completed an impressive restructuring and repositioning programme. During this period, the company and its four divisions relocated seven production plants, including to best-cost locations, invested over CHF 400 million in new production plants and more efficient processes, and increased its vertical integration.

Arbonia has set itself the goal of offering its employees a secure job and creating value for its shareholders.

Even after the sale of the Windows Division, which is expected to be completed in the second quarter of 2021 and in which all existing employment contracts will be retained, Arbonia will continue to pursue an adapted strategy that is even more focused on sustainability

 

Revenue (in CHF million)

Investments (in million CHF)

EBITDA with one-time effects (in CHF million)

Strategic pillars after the sale of the Windows Division

The Sanitary Equipment Division with its shower doors and shower partitions will be integrated into the Doors Division. The strategic logic of the integration lies in the better use of synergies in joint market development in contract sales on the one hand and in procurement on the other. In addition, the product range of the Doors Division with functional and interior doors made of wood will be expanded to include shower doors, which allows the glass doors and glass partitions area to be expanded for interiors. The Doors Division is strengthening its position as a single-source solution provider for accessibility, including the keyless KIWI access system built into the doors.

Based on this expected and sustainable organic growth, the robust profitability of the divisions, and the liquidity of the group, additional inorganic growth is also being sought by means of targeted acquisitions in existing and/ or neighbouring markets, including Eastern Europe. This brings Arbonia closer and closer to its goal of becoming the leading door supplier in Central Europe.

On the one hand, the HVAC Division continues to focus on organic growth in the product groups of underfloor heating, heat pumps, and residential ventilation, including their patented filter technology, which can also be offered as a system, and on the other hand on consolidation, process optimisation to increase productivity, and cost leadership in steel panel radiators, column radiators, and design radiators.

While the volume in the Western European radiator market will move sideways over the next few years, the division still expects profitable growth in these products through investments in the growth market of Eastern Europe and Russia as well as through the listed measures.

In the past, the division has invested heavily in production processes in order to generate sustainably stable margins above the competition. In addition, it actively participates in the consolidation to gain market shares.

Accelerated growth is pursued with the fast-growing system products such as heat pumps, underfloor heating, as well as ventilation, air-conditioning, and filter technology in order to significantly change the revenue mix of the components and system business by 2025.

The division is focusing its development on the "house of the future": On the basis of existing and new photovoltaic systems in private houses and, in the future, in apartment buildings as well, a system solution is to be developed for heat and cold generation and control, supplemented by storage of the electricity generated by the photovoltaics.

The heat pump market, which has been growing strongly for years, is also benefiting from the European climate targets and their subsidising of CO2 -reducing and energy-saving products. For this reason, the HVAC Division is investing in expanding the capacity for energy-efficient systems at its site in the Czech Republic and will build a new production plant there starting in 2021, which will increase the existing production capacity many times over from 2022 onwards.

It is planned to support the accelerated organic growth in system products with targeted acquisitions.

 

Download Arbonia Sustainability Report 2020 (PDF)