Increased specialisation creates record high result at R&D
R&D emerges with a record high result for the latest financial year. The ambition for the future is a doubling of the bottom line figures to 48 million DKK over the next three years.
The Aarhus-based engineering company R&D emerges from the financial year of 2015/2016 with a record high result measured in both gross profit and net income from 6.8 million DKK to 23.5 million DKK.
For the two owners, Morten Storm Pedersen and Carsten Vejby Møller, this year´s record high result is only a step on the way towards new goals. The ambition is a doubling of the net income over the next three years to 48 million DKK. This will happen through a continued specialisation in specifically selected niches as well as an increased internationalisation.
Increased revenue is not a goal in itself
Many will probably choose to set the goals for future growth in both the gross profit and the bottom line figures. However, it is deeply integrated into R&D's culture that the goals for future growth are primarily based on the net income.
"For us, a sharp increase in the gross profit is crucial. The most important thing for us is to have a solid and healthy business and solve problems in a way which creates value for the customers, our employees and R&D," Morten Storm Pedersen says. "Thus, we set the goal in the net income, well aware that the gross profit most often will follow".
In theory, a company can create a substantial revenue and gross profit growth by saying yes to jobs at a very low price. R&D aims for a different strategy by taking a larger responsibility for the separate projects and thereby creating more value for the customer. Here the focus is on delivering a total competitive solution which R&D is recognised for.
We need to increase the specialisation
The continued development of R&D must primarily happen through a focused specialisation within specific niches. R&D is one of the world's leading suppliers of test benches to the wind industry and is currently working on developing and building one of the world's biggest test benches to LORC on Lindoe.
"Throughout the years, we have acquired specialised competences within test benches for the wind industry, so today we can take the full responsibility for a turnkey project. We have transferred this knowledge to the aviation industry where we are working for a large, international and well-esteemed company with the same niche focus," Morten Storm Pedersen says and continues:
"We need to continue this specialisation, and we are currently faced with several important choices to make in order to become more focused. As an example, this applies to Tools & Structures which is one of our other services. Here, we also need to focus our competences further, so we can create an even higher value for our customers by taking a bigger responsibility for all the parts of their projects."
As a step in the continued specialisation, R&D has turned into a group company and has divided into three subsidiaries (R&D Engineering A/S, R&D Tools & Structures A/S and R&D Test Systems A/S) each with their own services.
"We have grown from being a traditional engineering company to selling system solutions within three different business areas," Morten Storm Pedersen says. "Dividing the company gives us even better opportunities for continuing the specialisation and possessing specialised competences, while also continuing the collaboration across the different departments".
The two owners of R&D are looking abroad where a lof of interesting customers can be found. Initially, it concerns Germany where they are far in the planning of a new department. "When we look abroad, we are very focused on where we can make a difference," Morten Storm Pedersen says. "Therefore, we have selected specific fields that we want to work with at first, and then we can grow further based on that".
The course is set
For R&D, the course is set for the future growth and related to this, a lot of attention has been paid to holding on to the culture and the values which are the entire foundation of R&D. "Here, it is very valuable that we have the right key employees, who are also the culture bearers in the company. Furthermore, we continuously work with the development of the international processes and systems, so they are also geared for growth," Morten Storm Pedersen says. "Our staff of employees has grown from 75 to 120 during the last year, and we continue to be on the lookout for the most skilled people in the business. All in all, we have big expectations for the future."