120-year-old Vienna-based facility services company REIWAG has a fascinating corporate success story. It is also at the forefront of some of the most modern approaches in its sector. We spoke to Managing Director Viktor Wagner about thriving in an unheralded niche.
In 1903, a cleaning company was created in the Austrian capital by a certain Mr Jakob Wagner. It traded consistently throughout the first part of the twentieth century. They were troubled times, however. Following World War Two and the devastation it brought, Mr Wagner’s grandson, Viktor, now the company CEO, did not immediately assume his birthright.
“After completing military service, I actually went into banking,” Mr Wagner explains. “My father felt that the post-war era was not a good time for a cleaning company, although he retained the trade license. So I went off to banking and learnt a lot, but I was not happy. I wanted to try to make something happen. So I flew to New York, where I used the Austrian Trade Delegate to arrange a meeting with a local businessman called Mr Norman Davis.
“This meeting has proven to have a great impact on my future. Norman Davis was vice president of National Cleaning, a large operation with 10,000 employees. His insights, experience and know-how were truly eye-opening.” What followed was a kind of corporate boot camp, after which Mr Wagner returned to Austria “filled with entrepreneurial spirit,” as he puts it. He spoke to his father about obtaining the trade license for the family business.
Starting fresh
“At the time, my father was a little reluctant,” he recalls. “So I literally went out into the streets, knocking on doors, telling people that I was a young entrepreneur and offering to clean windows or other services. Things started okay, and before long I had one employee. So I started from the very bottom and began building the business from scratch.”
By the late sixties, the economic environment was looking more favourable. The cities of Germany and Austria had been largely rebuilt following wartime bombing raids. Demonstrating keen business instincts, Mr Wagner saw an opportunity. Vienna was full of newly constructed buildings. Someone would acquire the contracts to service and clean them. Why should that not be him?
“My business aspirations particularly benefited from the fact that at that time, my competitors had little knowledge about work scheduling, organisation and know-how,” Mr Wagner says. “I had studied all of this in the USA. I therefore was able to generate more profits than my competitors while asking for the same price. This enabled us to go from strength to strength.”
Cleaning up
It was from this starting point that the modern incarnation of REIWAG was truly born. Today the company is a regional leader with a subsidiary in the Czech Republic and operations in Romania, Serbia, Croatia and Slovakia. The company employs more than 3000 people and thrives in the face of very stiff competition with an annual turnover of more than 88m EUR. Several large international companies operate in the same sector, meaning that Wagner must stay ahead of the game in order to maintain this position.
“Throughout all this time, the most important thing for me are my employees,” Mr Wagner states. “You need people with character, knowledge and diligence. I have people who have worked with me for more than thirty years. This is vital as you grow. You know, alone you can do something, of course, but you cannot do everything. REIWAG would not be what it is today without all of their inputs.”
In addition to the importance of human capital, the REIWAG story has branched in other directions too. The company runs a profit share scheme, meaning employees benefit directly from the company success. In this way, everybody at REIWAG “feels like an entrepreneur.”
The wave of the future
Perhaps the standout feature of REIWAG’s current offering, the element which really sets it apart from its competitors is something far more modern and innovative. With technology and mechanisation steadily creeping into all industrial sectors, REIWAG has taken a position at the vanguard of the digital revolution in facility services.
The company’s Romanian operation makes extensive use of drone technology to maintain roofs, for example. Meanwhile, REIWAG has invested in and partnered with LionsBot, a Singaporean robotics company which specialises in smart cleaning robots. Such forward-thinking elements form a key part of the company’s future plans.
“In the medium term, I have to be honest, we are facing a challenging situation because of economic conditions in Europe,” Mr Wagner explains. “The real estate market is heavily affected, and of course, energy costs are increasing all the time. Many of our clients will not look for new buildings, which means it is harder to grow our business. There have been other trends too. After the coronavirus pandemic, home working became much more popular, meaning less office space is being used. So we have to look for ways around all of these things.”
Accelerating climate change means air conditioning has been identified as a potential area for growth. REIWAG is in the process of acquiring an air conditioning service company, which will add further variety to their portfolio of services.
“So the air conditioning could be an important growth area for us, but the robotics I think is something very fundamental,” the managing director states. “In the business world, you have to think ahead. You look at world events, recessions, wars and so on and think how you can save your business. We are the leading investor in cleaning robotics. This is for sure a part of the future of the cleaning business and will compensate a great deal for labour shortages. We also intend to use our investment in LionsBot as a springboard to expand our operations into Asia.”
A clear view
Despite uncertainties surrounding global events, REIWAG appears in a very stable position. Revenue growth has been consistently maintained, while the company’s foundation is secure. The company is self-financed, rather than dependent on bank loans like many similar sized companies. Rising interest rates are therefore not as much of a concern as they may have been otherwise.
“My philosophy has always been to live within my means,” Mr Wagner summarises. “As a company, we spend money if we have the money.”
It’s a steady strategy which has reaped impressive long-term results while ensuring that REIWAG’s exposure to risk has stayed within sensible limits. At the moment, that puts the company in an enviable position at the forefront of its sector. It appears to be one it looks to sustain.
“Try to learn every day,” Mr Wagner concludes. “I think this is what it is about. Try to learn every day and do the best you can!”
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