A hundred-year balance Annual Report 2010 - Uzin Utz AG

Uzin Utz Aktiengesellschaft, Ulm (Donau)
Situation Report of the Uzin Utz Group for the Business Year
from 1st January 2010 to 31st December 2010*
Business performance and framework conditions
Business performance, business activities and
framework conditions
Development of the sector and the overall economy
Following the greatest recession of the post-war era in
the year 2009, the world economy recovered faster than
expected in the year 2010. According to the information
of the World Bank, global GDP growth in the past year
reached 3.9%. This however gives rise to the question
of the sustainability of this positive development. National
economic programmes to cushion the recession
have created budget deficits and debt levels of almost
unheard-of dimensions. In addition to the concerns over a
relapse in the USA and the prospect of a more restrictive
monetary policy in China, the European Union in particular
is also faced with a major challenge. Continual reports
of Euro-countries with severe financial problems
are putting increasing pressure on the system of the European
Union and its common currency.
» The German economy in the year 2010 was typical
of the worldwide upturn. Germany is justifiably referred
to as the “growth engine” of the European economic region.
At the end of the year 2010, Germany had achieved
a GDP growth of 3.6%. Strong growth was achieved
particularly in the engineering and automotive sectors.
Medium-sized German companies in particular benefited
from the economic upturn, with consequent noticeable
positive effects on the employment market. The main
supporting pillar of economic development in Germany
is the export boom. In the future however, the heavy dependency
on China and the financial difficulties of many
EU-countries will constitute a risk factor for German foreign
trade. Nevertheless, economic institutes continue
to forecast growth of 2.1% to 2.4% for the German economy
in the year 2011.
» In the construction sector, the upturn which started
at the end of 2009 could not be continued into the early
months of 2010 because of the weather. The unusually
cold winter caused a declined in turnover in the construction
sector of 17.2% in the first 3 months in comparison
to the same period of the previous year. The sector
recovered over the course of the year, although with
an overall decline in turnover of 1%, it was not able to
join in the general economic upturn.
» With a decline in turnover of 4.5% in the year 2010,
the German commercial construction sector was a major
contributor to the low level of optimism in the construction
sector as a whole. If the overall economic upturn
continues in the year 2011 however, commercial
construction will also benefit accordingly. In this case,
experts forecast an increase in turnover of around 1%.
» The economic programmes instituted by the central
government were also unable to revitalise business in the
public construction sector, as becomes clear from the fall
in turnover of 3% in the year 2010. Nor is any recovery
expected in this area in the near future. Severely affected
by the low willingness to invest in the communal
area, a further decline in turnover of 4.5% is anticipated
in the year 2011.
» A clear recovery trend can be seen in residential construction,
where turnover increased by 6%. This has been
brought about mainly by the stabilisation of income expectations
in the course of the economic upturn, a revival
of interest of investors in residential properties, continuing
low interest rates and the high level of subsidisation
for the energy renovation of the housing stock.
» In 2011, the positive developments in residential construction
will most probably not suffice to compensate
satisfactorily for the decline in public construction. As the
President of the Hauptverband der Deutschen Bauindustrie
(National Association of the German Construction Industry),
Dipl.-Ing. Herbert Bodner announced at the beginning
of the year, the best that could be hoped for was
stable turnover, or possibly even a further decline.
Assessment of the company management
The year 2010 was a very successful business year for
the Uzin Utz Group. Sales rose by almost 7%. Against
the background of the continuing tough competition,
some areas and regions succeeded in further increasing
their market share, and operating successfully as international
market leaders and complete suppliers in the
area of flooring. This is particularly encouraging on the
occasion of the 100-year company Jubilee in the year
2011, and in the light of the still difficult but stabilising
market environment.
» The strength of the group is reflected even better in
the result. The result from ordinary activities, at around
€14.4 million, represents an improvement of 31.7% over
the previous year. On the one hand, this result gives the
Uzin Utz Group the security of being able to handle crisis
management, while on the other, the Group benefits
from its firm foundation of diversification, particular
closeness to the customer and strong company culture.
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