OPINION
Managers forecast double-digit profit growth in 2011
A European study shows that managers, including those in chemicals and base material industries, forecast a major profit boost of 12 per cent or more. They want to grow profitably, start investing again in capacities and R&D, and press ahead with international expansion.
Une étude européenne a démontré que les responsables exploitants, notamment ceux des secteurs de la chimie et des matières premières, prévoient une augmentation notoire des bénéfices s’élevant à 12 pour cent ou plus. Ils souhaitent se développer de façon rentable, commencer à réinvestir dans leurs capacités de production et dans les recherche et développement, et notamment pousser leur expansion internationale.
Einer europäischen Studie zufolge stellen Führungskräfte unter anderem in der chemischen und Rohstoffindustrie erhebliche Gewinnzuwächse von 12 Prozent oder mehr in Aussicht. Sie wünschen sich ein Wachstum in der Gewinnzone und möchten wieder in Kapazitäten sowie in Forschung und Entwicklung investieren und die internationale Expansion vorantreiben.
E
uropean companies are forecasting double-digit profit growth in 2011. They also want to focus on long-term
investments. These are among the findings of an online study conducted by Simon- Kucher & Partners among 200 managers in the construction, chemicals and base material industries in Europe. The respondents aim to improve sales while taking advantage of pricing measures; cost cuts will be kept to a minimum. Beyond this, over half of the managers plan to strengthen investments in R&D and step up their international expansion. “The managers show that they now place
more trust in long-term strategies. We won’t be seeing many snap decisions for quick profit wins,” says Sebastian Strasmann, co-author of the study and director at Simon-Kucher & Partners. The managers have diverging opinions
about the levels of profit growth: over 10 per cent of the respondents foresee a profit surge of more than 20 per cent in 2011. 18 per cent, mostly from the building material industry, expect stagnating profits. Managers from the building technology industry are most optimistic; they plan on a 20 per cent profit increase. Base material, building material and chemical sectors foresee a lower rate of 12 to 14 per cent.
Boosting sales, lowering costs The profit surge, contend two-thirds of the managers, will result from sales improvements. Two-thirds of the respondents plan on
boosting sales levels by expanding their products and services. Only one-third is relying on larger market shares to increase sales figures. Managers from chemical and base material companies are expecting their added profits to come from pricing measures. While more than 70 per cent of the chemical and base material managers see price increases as a source of higher profits, 40 per cent of the building material and building technology managers agree with them. “Price increases in the chemical and base
material industries will translate into higher costs for industries further down the value chain, especially the construction industry. The problem for construction companies is that they haven’t fully developed a plan for higher prices to compensate for the rising costs. This could throw a major obstacle in their path toward higher profits,” warns Dr Karl-Heinz Sebastian, head of the Chemical, Construction and Commodities Competence Center of Simon-Kucher & Partners. Yet the construction industry respondents
seem to recognize the necessity to improve sales efficiency more than their counterparts in the chemical and base material industries. Sixty per cent of the construction managers are focusing on sales optimisation as opposed to only 30 per cent of the chemical and base material respondents. “They are throwing away the
opportunity to get more out of sales and cost opportunities,” comments Sebastian. The importance of classic cost reduction measures such as lower overhead costs,
“Price increases in the chemical and base material industries will translate into higher costs for industries further down the value chain.”
Dr Karl-Heinz Sebastian, head of the Chemical, Construction and Commodities Competence Centre of Simon-Kucher & Partners
3 ECE
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