Velux advances with long beams. The roof window company sees in home renovation an opportunity to grow in the domestic segment. The firm, which already largely dominates that market, has found unexpected impetus for its plans in the European recovery funds, although these are currently experiencing the same turbulence as the economy as a whole. “The level of uncertainty in the short term is high,” admits the new CEO, Lars Petersson, who nonetheless insists that “the potential for growth is enormous.”
Petersson entered the Danish firm on November 1, founded by Villum Kann Rasmussen in the midst of World War II. The first month he spent visiting some of the more than 40 countries where Velux sells its solutions (“I haven’t been to Spain yet, but of course I will soon”, he confesses). The chat with the manager, by videoconference, starts with a certain pessimistic tone, in line with the growth cuts that many organizations predict for Western economies. “There is a general slowdown, a lack of consumer confidence that is causing reforms to be scaled back and volume is falling,” he says. “And it’s a shame because Europe needs better housing, be it new or existing. I am afraid that it will take a step back and I think that in the US we will see a similar development ”, he adds.
In the case of Velux, the loss of business verve has resulted in job cuts. In the same week that the new CEO arrived, the company announced that it will lay off up to 430 workers at its factories in Denmark, Poland, Hungary, Slovakia and Germany. Petersson, who does not specify the final number of departures because he is negotiating with the unions, acknowledges that this is not remotely the dream landing for any executive who arrives at a new company. “Of course we didn’t like it. [la decisión]Because these are people who worked hard for Velux, especially during the pandemic,” he says. But then he argues the need for the measure: “We don’t want to harm the long term by over-reacting to the current situation, but at the same time we have to be careful with costs, protect our resources in order to continue investing in our future.”
That of Velux, a subsidiary of the VKR group (acronym for Villum Kann Rasmussen) that has carried out a powerful purchase activity of other companies in recent years, now goes through above all “organic growth”, says its chief executive. Although he does not rule out expanding the business through new acquisitions: “We also have our sights set on inorganic growth.” VKR billed more than 3,500 million euros in 2021, its latest accounts presented, which was 15% more than in 2020. Profit rose to 672 million, 35% more than a year earlier, and the global workforce totaled 19,900 employees (4,500 more than a year earlier). The group does not detail data by divisions, but that of roof windows is the most important.
The solid economic performance in recent years has helped expansion, but has also allowed it to bet on sustainability. “It is extremely important to provide good value in terms of carbon footprint and consumers are not going to accept anything else in the future, nor are authorities,” says Petersson.
The plans to decarbonise the business include the announcement, in mid-November, of the construction of two solar power plants in Spain. The Danish firm has agreed with the multinational BayWa Re to develop the facilities, in the provinces of Seville and Granada, and will later buy 80% of the energy they produce (167 gigawatt hours per year in total, equivalent to what 45,000 consume homes). This, he calculates, will reduce his carbon footprint by about 40,000 tons of CO2 per year. “The focus is now on green energy for many reasons that are correct,” summarizes Petersson. “If we could combine this drive for renewable energy with energy saving, we could solve the crisis in Europe. We would depend less on unreliable states, and we would also depend less on dirty energy.”
But Velux is not interested in Spain only because of its capacity to generate clean energy, but because of the potential of a small market (25 million billings in 2021, less than 1% of the group’s total) for the size of the country. “We are specialists in dormer windows, but in Spain there are many flat roofs and we want to get closer to all of them,” says Petersson. That is why the company, he says, is now focusing on giving added value to its solutions: “We are strengthening the advisory part to make it easier for a client, an architect or a builder to have a better idea of what we offer” , comment.
And the opportunity to achieve it has found a reinforcement in the European recovery funds, which in Spain will leave more than 3,400 million for energy rehabilitation of buildings. “In many parts of Europe there are a lot of homes that need renovations,” says Petersson, “and there are programs like Next Generation to help people make improvements to their homes.” The manager, however, regrets that “the variations between countries are very pronounced; the trends and the questions are the same, but the solutions are very different”. Something that makes the companies’ strategy difficult: “Perhaps we could do something at the European level to provide more support,” he proposes.
Whatever comes in the near future, Petersson will be caught in a position that he defines as privileged. “We are going to be able to launch ourselves to reach the potential of Velux, I want to take it to the next level”, she affirms. Although an unexpected hint of nostalgia slips through the speech: “At some point a younger colleague will arrive, much more intelligent than me, and then it will be time to move on to something else; but being able to do this now is a blessing, ”he concludes.
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