Alin Trusca, EVOhoreca: The budget invested in furnishing public spaces has doubled compared to the pre-pandemic era

EVOhoreca, one of the relevant players in the HoReCa fitting solutions, ended 2022 with a turnover of 1.6 million euros, a 33% increase compared to the previous year. The company’s business in 2022 even surpassed the results of 2019, considered the best year before the onset of pandemic restrictions. Regarding orders, their number was 18% lower than the previous year, but their value increased by 33% YoY. Thus, in 2019, the average value of a fitting project was 6,000 euros, comparing to 2022 when the average rose to 15,000 euros. In 2022, the company invested 100,000 euros in increasing storage space, inventory, and product portfolio, amid the revitalization felt in the industry after the lifting of all restrictions caused by the pandemic. Business Review talked to Alin Trusca, CEO EVOhoreca, to find out more about the business and the market.

Business Review: How did EVOhoreca perform in terms of turnover and growth during the first half of 2023?

Alin Trusca: During the initial half of 2023, we have sustained the positive trajectory set in the second quarter of 2022, culminating in a Q1 revenue of 700,000 euros. Our ongoing commitment is reflected in an average project value of 15,000 euros, with an upper limit of 100,000 euros per order. The first quarter was marked by dynamic activity as we successfully executed projects for hotels, restaurants, and coffee shops, supporting their preparations for the summer season.

Capitalizing on the traditionally quieter summer period, we strategically invested in fortifying our sales team and enhancing business development strategies, aligning with our vision for the latter part of 2023. Looking ahead, we foresee a comparable pattern in client engagements for Q2, with heightened project activity anticipated from September to November, aligned with a forward focus on the upcoming year’s tourist season. The forthcoming months will predominantly center around hotel projects, particularly those encompassing 20-50 rooms, as we project a year-on-year growth of 10-15% by the close of 2023.

Have there been any notable changes in customer preferences or demands for hotel furnishings and design in the first half of 2023?

EVOhoreca has experienced significant growth and transformation in recent years, expanding from a horeca furniture provider to becoming a comprehensive one-stop-shop for various public spaces. Our expertise now extends to catering to the specific needs of businesses, banks offices, factory canteens, petrol stations, and, with particular focus, hotels. Noteworthy collaborations with prominent players in the industry, such as Hampton by Hilton in Iași, Double Tree in Sighișoara, and Alcor Hotel in Mamaia, have solidified our position as a trusted partner in the hospitality sector.

The current market dynamics have driven a notable shift in customer behavior, particularly regarding budget allocation. The budget invested in furnishing public spaces has doubled compared to the pre-pandemic era, with investors placing heightened emphasis on product quality and durability. In this era of growth and heightened customer attention to detail, design has gained more importance than ever before.

A striking trend is the increasing number of small business hotels collaborating with talented designers – as opposed to in-house projects – to craft remarkable projects aimed at fostering customer loyalty. These projects are designed to create a welcoming atmosphere, encourage repeat visits, and increase customer retention rates.

When it comes to design preferences, we have observed two distinct directions among hotels. Chain hotels opt for a modern yet inviting ambiance, incorporating warmer elements like a tapestry in the rooms, indirect LED lighting, and a color palette featuring turquoise, dusty pink, green, or greige taupe.

On the other hand, boutique hotels and new rental accommodation facilities lean towards a homely atmosphere while retaining neutral furniture in natural wood colors and various shades of gray. To infuse vibrancy and character, cheerful color accents such as yellow, green, blue, and viva magenta—the color of the year 2023—are strategically integrated.

At EVOhoreca, we pride ourselves on our ability to stay attuned to the evolving industry landscape and offer tailored solutions that align with our client’s visions. Our commitment to providing high-quality, durable, and aesthetically pleasing furniture remains unwavering, making us the preferred choice for businesses seeking to create exceptional public spaces that leave a lasting impression on their customers.

How has EVOhoreca’s profitability evolved in recent years, and what factors have contributed to its financial success?

I believe that consistency in providing quality products and services, fast and on-time, are keys to EVOhoreca’s success in recent years. Indeed, EVOhoreca has experienced a remarkable evolution in profitability over the past years, and that was thanks to a combination of strategic initiatives and market dynamics. The company’s financial success can be attributed to several key factors, including diversification of portfolio, rapidly responding to changing customer behavior, strategic partnerships, along organic market growth and opportunity.

EVOhoreca’s decision to transform from an Horeca furniture provider into a comprehensive one-stop-shop for various public spaces has proven to be a wise move. By expanding its offerings to cater to businesses, bank offices, factory canteens, petrol stations, or hotels, the company tapped into new revenue streams and diversified its customer base. With a keen focus on the hospitality industry, EVOhoreca aligned its services and products to meet the specific needs of hotels in an ever-growing market in Romania.

EVOhoreca’s ability to adapt to evolving customer preferences and behavior has been pivotal to its financial success. As the pandemic brought about changes in the way people interacted with public spaces, EVOhoreca identified the shift in customer priorities, particularly a greater focus on product quality and durability. The company responded by providing high-quality furniture and solutions that met these demands, resulting in increased customer satisfaction and recurring clients or recommendations for new ones. This constitutes around 40% of our overall client base.

By working closely with these professionals, the company developed exceptional projects that enhanced the overall guest experience and contributed to higher customer retention rates. Also, we made strategic partnerships with one of the most reliable companies on the market – Autonom – for an innovative product on the Romanian market: leasing for furniture.

What’s the percentage of international clients and what industries do they come from?

Despite delivering projects in 12 European countries since our business’s inception, our current focus remains primarily on the Romanian market, and we have not actively pursued expansion beyond national borders. Our projects have been secured through organic means, including recommendations and proactive outreach through “cold calls.” Our online presence has significantly contributed to our visibility, making it easy for potential clients to find us on the internet.

Our clientele includes Romanian expats who have established Horeca businesses in their respective adoptive countries, as well as international corporations. Our expertise lies in designing a range of establishments, including restaurants, event halls, guesthouses, and hotels. While the value of international orders may vary from year to year, it constitutes a modest portion, averaging around 10% annually, when compared to our domestic business.

Nonetheless, we value every international project as a learning experience, and we leverage the knowledge gained to enhance our offerings in the domestic market. We actively share these insights with our partner investors, ensuring that the expertise acquired abroad contributes to the continued growth and success of our projects in Romania.

What are the key factors that differentiate EVOhoreca from competitors in the European market?

Our extensive experience in both the Romanian and European markets has equipped us with a wealth of knowledge in handling diverse projects across various industries. With a significant tenure in the industry, we have honed a recipe for success, combining top-quality products always readily available in our inventory and a robust network of business partners. This well-established framework allows us to consistently meet delivery timelines without compromise. Our commitment to timeliness and product excellence has been instrumental in building our reputation as a reliable and trustworthy partner in the market.

Are there any plans to expand EVOhoreca’s operations to new European countries or regions in the near future?

In the upcoming years, our strategic focus will be directed towards strengthening our presence within the national market and expanding our product portfolio within Romania. As part of this growth strategy, we have already taken significant steps by introducing a new leasing service for horeca furniture this year, as previously mentioned.

The primary objective of this innovative leasing service is to offer valuable support to investors in managing their cash flow effectively, especially during these uncertain times. Additionally, it provides a risk-mitigation solution, allowing investors to test their business models without the burden of owning the furniture outright, should their plans not unfold as expected.

We firmly believe that this forward-thinking leasing service will prove to be an invaluable asset in the years ahead. As the market embraces its flexibility and financial benefits, we anticipate it will gain popularity rapidly, becoming an essential and sought-after offering within the horeca industry. Our commitment to adapting to the evolving needs of our clients further reinforces our position as a leading provider in the market, dedicated to assisting investors in achieving their goals while minimizing potential risks.

What turnover do you expect for 2023 and how would you divide it between industries?

As we approach the end of 2023, our outlook remains cautiously optimistic, and we have set a target of achieving a 10-15% growth in revenue. While we have reason to believe that this increase could potentially surpass expectations, certain factors may influence the outcome. The continuation of financing programs with European funds has played a crucial role in sustaining investment momentum within the horeca segment. Should these programs persist, they may further bolster the growth potential.

However, it is important to acknowledge that unforeseen challenges could arise, impacting the overall trajectory. Drawing from our past experiences, we have learned the importance of prudence and preparedness in navigating any uncertainties that may come our way. By maintaining a cautious approach, we are better equipped to adapt to changing circumstances and ensure the continued success of our endeavors in the ever-evolving business landscape. Our commitment to sound financial planning and vigilance will remain at the core of our strategies as we strive to achieve our growth objectives for the year ahead.

We expect to further increase our revenue from HoReCa industry, focusing on big projects, hotels mainly, as the tourism industry in Romania is expanding. Our orders have a medium delivery time of xxx weeks, depending on the complexity of the project and we faced the past 3 months an increase in demand.

What were the most sought-after products for EVOhoreca in the first half of 2023, and are there any plans to expand the product range?

Horeca entrepreneurs started 2023 with a focus on outdoors space, preparing their locations for the warm weather in spring, summer, and early autumn. Thus, the most sought-after products were outdoor-resistant chairs, armchairs, sofas and tables, umbrellas.

For this year we budgeted 100.000 euros for continuing the investments we started in 2022 in our own storage spaces near Bucharest, we are increasing the budgets for logistics and supply of goods to be able to serve our customers as quickly as possible. It’s very important for us that this continues to be one of the reasons our clients choose us. As mentioned, we do our best to keep our delivery dates reasonable for every client.

Can you provide insights into the distribution of revenue between online and offline sales for EVOhoreca? How has the online store contributed to the company’s overall turnover?

Currently, approximately 20% of our orders are conducted through offline channels, while the majority, over 80%, are received remotely. However, it is important to note that not all remote orders are placed through our online store. Nevertheless, the proportion of online orders made directly on our website is steadily increasing, accounting for almost 10% of EVOhoreca’s total revenue.

The remaining remote orders still necessitate the involvement of a company consultant, given their complex nature and numerous technical specifications. We recognize the importance of streamlining this process, and we are actively working on enhancing our online store to offer customers greater customization options. Our vision is to significantly simplify the product customization experience, making showroom visits even less essential in the future.

By continually improving our online platform, we aim to provide customers with a seamless and efficient way to tailor their orders according to their specific requirements. As we progress towards this goal, we anticipate a substantial increase in the proportion of online orders, fostering a more convenient and accessible purchasing experience for our valued customers.

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