Matador Increases Profits and Turnover

A lot has happened for Slovakian tyre manufacturer, Matador, since it first exhibited under its new name back in 1994. Back then a 3×3 metre cubicle sufficed, this year Matador covered about 200 square metres of floor space in Hall 3. It is no coincidence that this is the case because about 10 years ago the Slovakian manufacturer founded its distribution subsidiary on the German market under the leadership of Dr Miroslav Rosina. Since then Germany has become one of the most important markets for Matador.

With the establishment of the German Matador Deutschland GmbH on the 1st May, 1997, the Slovakian manufacturer had one intention above all: “In the mid-term Germany was envisaged to become the biggest market for us,” managing director Miroslav Rosina explains in retrospect. Dr Rosina is also vice president of the parent company, which is run together with his brother Stefan Rosina. According to Miroslav Rosina there is only one answer to the question of whether or not the intention has been made a reality: “Clearly it has been achieved.” About three years ago the German market replaced the domestic Slovakian and Czech market as the most important sales market.

Now Matador sells about 700,000 passenger car and light truck tyres per year (2005 figure) in Europe’s largest replacement market and furthermore it claims a market share of about three per cent on the German truck tyre market. Matador also supplies commercial tyres to the renowned German OE customer Fahrzeugwerk Bernhard Krone for example, which produces trailers, etc.

Talking to Tyres & Accessories during the Reifen show, Miroslav Rosina announced Matador’s 2005 annual results as well as the first quarter results for the current financial year. Last year the manufacturer increased its turnover from 300 to 414 million euros. Two thirds of this turnover was generated with Matador’s tyre business unit (272 million euros). The turnover growth equals a growth rate of 38 per cent. At the same time Matador’s annual net results grew from 15 to 16.4 million euros (+9.3 %). “The group’s turnover increase in 2005 was mainly thanks to the tyre division. EBIT of the tyre division was 22.2 million euros,” Dr Rosina explains.

Last year Matador produced 5.2 million tyres in Puchov. Another 495,000 truck tyres were produced on the site under the joint venture with Continental AG. The Matador-Omskshina joint venture which is a co-operation with Russia’s leading tyre manufacturer Sibur-Russian Tires has produced yet another 2.817 million tyres. Together with 233,000 tyres which are produced at its facility in Ethiopia, Matador produced about 8.7 million tyres last year.

The good development of Matador’s business figures during 2005 continued during the first quarter of this year. So for example the turnover again was increased by 19.6 per cent to 103 million euros. 67 million of this was generated within the tyre business unit which has achieved an EBIT margin of 10.8 per cent (whole group: 8.7 per cent). With regards to profitability, it is the machinery business unit in particular which added to these results with an EBIT margin of 26.4 per cent during the first quarter.

For its stand in Essen the tyre and machinery manufacturer chose to present most of its new and latest products. In particular the new MP 81 Conquerra SUV all-season tyre as well as some new truck tyre tread patterns. This is where Matador has experienced good growth rates in the most recent past.

A part of this growth can be attributed to the company’s new B2B online platform which was launched two years ago for some customers. This webshop was always seen as a customer loyalty programme, Dr Rosina continues. However, in the near future more customers will have the opportunity to use Matador’s system.

Those responsible in Puchov are currently even contemplating the possible advantages of launching an online B2C platform – a webshop for end consumers. “By these means we will be able to save a lot of time and money,” says the vice president and managing director on the intensified use of modern online communication technology.

But the tyre manufacturer will also strengthen its own retail base on the market. Currently there are more than 75 Matador retail shops in Hungary, Slovakia and in Czech Republic. For these countries the envisaged B2C online platform will be used as a potential tool to direct even more customers to the local retailer; thus it is not a traditional mail-order business. Later on this year Matador’s retail shops will be operated under a new name, too. The retail chain will be called “PneuBox”, explains Dr Rosina. Although Germany is the most important market in terms of turnover it is not planned to expand the B2C shop concept there. It is not very likely that Matador will launch its retail network in the UK either.

Markets where Matador wants to enlarge its retail basis are exclusively Eastern European countries. In this context Dr Rosina for example refers to Poland, Hungary or the Ukraine. But franchise distribution systems are a possibility here and in other similar markets too.