Roland Berger Strategy Consultants
Roland Berger Strategy Consultants
Strong performance in a
difficult market
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Munich (ots)
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- Growth is once again well above the industry average in 2002 thanks to more globalized consulting services
- Successful strategy of focusing on top management issues that bring are critical to sustainable value creation for our clients
- Seven strategic priorities for outperformers: How strategically and operationally excellent companies can grow their sales, profit, and company value at above-average rates
- Heavy investment in innovation, employees, and knowledge management
In a persistently difficult market, Roland Berger Strategy Consultants remains resolutely on course for sustained success. While the market as a whole is growing only modestly, Roland Berger is expecting another above-average increase in revenues and profit - as in 2001 - and hence another record year. Annual revenues will increase 8-10 percent to around EUR 550 million and profit will climb 14 percent. In other words, in 2002, Roland Berger will grow at about three times the industry average. While competitors are having to lay people off, Roland Berger will increase its staff this year by at least 3 percent, to 1'700.
"In a strained economic situation and faced with intense competitive pressure, we are increasing our revenues and profit, boosting our shareholder value, and creating new jobs for highly-qualified people," said Burkhard Schwenker, member of the Executive Committee, at today's press conference in Munich. "Once again, our international offices have been the strongest growth drivers, providing consulting services to our clients around the globe. All in all a positive performance in such difficult times." Fee volume will rise particularly sharply in the US (+70 percent), Asia (+50 percent), and Central and Eastern Europe (+60 percent). Global consulting activities are expected to grow by 21 percent - four times the 5 percent increase estimated for Germany in 2002.
2001 fiscal year: Outperforming the market - once again
With fee volume up 16 percent to EUR 504 million, the Munich-based international strategy consultancy also grew at three times the overall market rate in 2001. On average, the top 50 management consultancies posted growth of just 3-5 percent. Roland Berger Strategy Consultants, however, seamlessly continued its track record of above-average growth from previous years: since 1995, the company has achieved average annual revenue growth of 20 percent. In the same period, the global market for strategy consulting expanded at only 11 percent p.a. This result confirmed the company's own performance trend: over the past 31 years (since 1970), Roland Berger has seen its profits increase at an average of 27 percent per year, with 18.2 percent annual growth in fee volume. One of the keys to this impressive performance lies in the fact that every consultant currently generates revenues of an outstanding EUR 457'000. This figure puts Roland Berger among the industry's front-runners, ranking the company second in the world.
The 2001 fiscal year also saw the workforce hit a new peak of 1'650 employees, 1'170 of whom are consultants. Roland Berger was the only international strategy consultancy to expand its workforce last year, increasing staff numbers by 10 percent. Both the number of consultants and the total number of employees have doubled since 1995.
Continued internationalization in 2001
The company's international offices experienced significant expansion in the period 1999-2001. Growth of 29 percent put them well ahead of the 20 percent growth posted by Roland Berger in Germany. The US business recorded the strongest growth, at 76 percent, followed by Asia (+68 percent). Roland Berger's Western European offices (excluding Germany) saw business expand by 30 percent in the same period.
Roland Berger Strategy Consultants currently has 32 offices in 22 countries. Our consultants come from a wide variety of countries, with 57 percent having a nationality other than German. Projects with an international focus for clients operating internationally account for more than three-quarters (76 percent) of the total fee volume.
Striking a balance between strategic consulting and operational implementation
In 2001, 51 percent of the total fee volume generated by Roland Berger Strategy Consultants was earned from developing strategic concepts (19 percent of which were restructuring concepts), and 49 percent came from operational implementation strategies. Of those, operations in the narrower sense (logistics, purchasing, production optimization, and R&D management) contributed 25 percent. Innovative IT strategies, which are increasingly becoming a key competitive issue for our clients, and also lay the foundation for process optimization, made up 12 percent. The remaining 12 percent came from marketing and sales consulting.
In the current unstable economic situation, Roland Berger, like other market players, witnessed an increase in demand for consulting projects whose purpose was, on the one hand, to adjust capacity and cut unit costs and, on the other hand, to sustainably increase the value of the client company. One particularly notable trend has emerged of late: while restructuring projects were in the spotlight in late 2001 and early 2002, attention is now increasingly shifting back toward implementation-oriented growth strategies.
"One reason for the gratifying results we achieved in 2001 is undoubtedly our clear focus on top management issues - issues that help our clients achieve sustainable value added," says Burkhard Schwenker. "Excellently trained people, flexible structures, and a global network of Functional and Industry Competence Centers enable us to find tailor-made solutions to even the most difficult problems. Our clients especially value the close, trusting collaboration we offer them while developing strategies, and the hands-on support we provide during implementation - which we see as our duty. We want to make sure that what we recommend really works."
The seven strategic priorities for outperformers: How strategically and operationally excellent companies can grow their sales, profit, and company value at above-average rates
When the economy is in poor shape, forward-looking corporate strategies naturally have to apply selected, intelligent cost-cutting measures. However, a global study by Roland Berger Strategy Consultants found that it is also important to focus on creative growth. Why? Because only strong corporate growth goes hand in hand with sustainable, above-average profit and value growth. The study examined 1'700 companies worldwide. Of these, 441 form the top tier, the "outperformers", who increased their profit and value at above-average rates. During the period analyzed (1996-2001), this group saw sales leap by an average of 33.8 percent p.a., compared to the average of just 11.8 percent annual sales growth among the entire group of companies surveyed. Pre-tax profits for the leading group rose by 37.3 percent annually; the corresponding figure for the entire group of 1'700 companies was a mere 8.5 percent. At 23.6 percent p.a., the total shareholder return (the increase in stock price plus dividends) likewise easily outstripped the overall group average of just 17.3 percent p.a.
According to Roland Berger, the company's founder and Chairman of the Executive Committee, "Seven strategic priorities - which can be mixed and matched depending on the industry and the competitive environment - are of critical importance to above-average growth in sales, profit, and company value." These seven strategic priorities are:
* Innovation and branding * Forcing new rules on others * Globalization * A focused portfolio * Reducing vertical integration through outsourcing * Market presence and consolidation through M&As * Networks, partnerships, and virtualization
One of the key findings of the study was that merely cutting costs can boost profit and company value in the short term only. It takes rule-breaking growth strategies to generate sustainable increases in profit and value - even in times when the economy is weak.
Knowledge is the future - Roland Berger invests heavily in global innovation and knowledge management
In the fiscal year under review, Roland Berger sharply stepped up its investment in concept innovation, knowledge management, employee development, and efforts to promote the global exchange of knowledge between the scientific community and practical consulting. Over EUR 90 million - or 18 percent of revenues - was invested in these areas in 2001.
"This commitment is an investment in the future: our success hinges on developing our people, on increasing the skills and professionalism of our 1'200 or so international consultants. At the same time, we, as a global strategy consultancy, see it as our duty to make a significant contribution to the advancement of research and education," says Burkhard Schwenker.
Endowed chairs in e-business and information technology at the INSEAD business school, for innovative IT business models at the Technical University of Munich, and in new business startups at the Brandenburg University of Technology in Cottbus are just one aspect of Roland Berger's commitment to innovation, alongside the activities of the Academic Network, a collaborative venture with 16 international chairs for business and technology. The company also invests substantial sums in Ph.D. and MBA programs for its employees at globally leading universities and business schools, including such respected institutions as INSEAD, LBS (London Business School), Harvard, Wharton, the IMD (Institute for Management Development in Switzerland) and the IESE (in Spain). The Roland Berger Foundation for Management Research primarily devotes itself primarily to developing innovative management concepts.
Contact:
Ralph Driever
Roland Berger Strategy Consultants
Tel. +49/89/923'083'18
Fax +49/89/923'085'99
mailto:ralph_driever@de.rolandberger.com
Susanne Horstmann
Roland Berger Strategy Consultants
Tel. +49/89/923'083'49
Fax +49/89/923'085'99
mailto:susanne_horstmann@de.rolandberger.com