Review of operations
The year 2020 was dominated by covid. Looking at the social reality, some sectors have come to a stand still as a result of the lockdown measures while others are thriving. ROTO looks back on a mediocre year. However, we are satisfied with a consolidated after-tax result of € 3.4 million (2019: € 3.6 million). Especially since the result for 2019 was slightly disappointing, partly because of the write-downs due to lower steel and zinc prices and an exceptional non-recurring item regarding the results from shareholding interest. After a further decline initially, steel and zinc prices recovered in 2020. In combination with the uncertain situation during the covid pandemic, the result for 2020 which is almost equal to the result of 2019, is perceived as positive.
2020 was also dominated by changes in the ROTO management: after more than 30 years of employment, Ger de Kwaasteniet transferred his duties as CEO of ROTO to Ditmar Koster on 1 January 2021 and joined the Supervisory Board. Ditmar Koster continues the path taken and concentrates on the strategic focus of both ROTO and the individual Business Units.
ROTO manages its Business Units based on its core values and core themes and guides the Business Units to keep a focus on their mission, vision and strategy. The core themes for which KPIs have been set are safety, people, sustainability, marketing, commerce, digitalisation, innovation and finance. For this purpose, overarching ROTO objectives have been laid down in the group dashboard, supplemented by the objectives set by the individual Business Units themselves. Since 2020, the dashboards have been central to the conversations between ROTO and the Business Units. In 2021, the core values and core themes have been translated into a new ROTO Strategy House.
Market developments in both the steel and zinc markets are showing significant fluctuations. At the beginning of the financial year, the zinc price was US$2,300 and after an initial increase in January, in the two following months the price fell to US$1,774 and then steadily increased again to US$2,724 at the end of the financial year. In the first two months of 2021, the zinc price continued to rise after an initial decrease.
The fluctuation of the zinc price has an opposite effect on the figures of the Business Units Surface treatment and Zinc recycling. On the one hand, the rising zinc price has repercussions on the cost of sales due to the higher purchase price for zinc, while on the other hand, sales are also affected by the fluctuation of the zinc price. The zinc price on the London Metal Exchange (LME) is monitored closely, following a fixed purchase strategy.
LME zinc price per tonne in 2020