Notwithstanding The Crisis, VELUX Projects Profit In 2009

Cosmina Capalău

As the market for building materials in Romania has been strongly affected by the world economic crisis, the related industries have also taken some of the shockwave. Referring to the market for skylights and roof windows, Hans Wreifalt, CEO of Velux Romania, said: "2009 is a year for which no financial analyst could predict precisely what may happen on this market. As an example, analysts said in the end of 2008 that the building materials market was going to grow 10-15% this year. Since the beginning of 2009, the forecasts have been reconsidered on several occasions. As for VELUX Romania, our intention for this year is to prove more flexibility in relation to any changes that may occur on the market. We expect to close the current financial year with a profit, despite the ongoing economic instability."

• End-users, more careful about what they buy

Since the beginning of the current economic crisis, customers have changed their buying behaviour, being much more attentive to the products they select. "Based on our studies and surveys in 2009, we can conclude that, as quality becomes increasingly influential in the buying decision, the end-users are much more careful about what they buy than they were in the last few years. As macro-economic forecasts turn bleak and the people"s perception of their financial stability in the years to come is taking a turn for the worse, our customers are spending much more of their personal time selecting the offers that best match their needs and budgets," Wreifalt added.

As for the company"s results last year, Hans Wreifalt told BURSA: "The year 2008 was very good for VELUX Romania. It was a dynamic year in the construction industry, with exceptional results and strong growth. Considering the economic crisis, it is unlikely that we manage to match or improve last year"s results in the construction industry in Romania. For a fair and realistic analysis of the market in 2009, we cannot use the growth we achieved in 2008 compared to 2007."

• Investments continue

According to CEO Hans Wreifalt, VELUX Romania will continue to make investments both this year and in the years to come. "Only by continuing to invest can we develop the market for skylights and roof windows in Romania. This market did not even exist before we came here, in 1997. Compared to the previous years, we have reorganized our budget significantly. For instance, in 2009, we have not planned any advertising campaign on television, but we do have a budget for other media and for our country wide distribution network," Wreifalt added.

Hans Wreifalt also spoke of how the global economic crisis was affecting the market for building materials in Romania. "The number of construction permits for new buildings has decreased significantly, based on the figures released by the National Statistics Institute in relation to the decline of the construction market. For instance, the information released by the Institute in end-May indicates a 17.8% year-on-year decrease in the number of construction permits issued in the first five months of the year. However, the number of construction permits increased by 9.9% from April to May," said Wreifalt.

"Referring to our business, VELUX is the preferred brand of the Romanian customers for skylights and roof windows. Our sales have been increasing constantly, despite the current market conditions," Wreifalt added. The company"s best case scenario for this year is to maintain the financial results at the Y2008 level and make investments at least as substantial as last year.

"We are currently in a phase where the market is adjusting to the new conditions. The projects that were in an advanced stage before the crisis are close to finalization. The optimistic scenario would be that the residential market will start recovering in end-2009 or early 2010. The pessimistic scenario would be that the recovery will not start before the second half of 2011," concluded Hans Wreifalt, the CEO of VELUX Romania.