Consumables

2019 financial year: slight increase despite headwind

Thursday 12. March 2020 - A sharp drop in demand, particularly in the cyclically sensitive mechanical engineering sector, and a weakening global economy are slowing HERMAs further growth. The company, which specialises in adhesive materials, labels and labelling machines, nevertheless managed to grow by around one percent in 2019.

Group sales rose from EUR 361.3 million to EUR 364.4 million. “With this small plus we are still well above the general economic growth in Germany. But we are not happy with the course of the past year as a whole,” said Managing Directors Sven Schneller and Dr. Thomas Baumgärtner. “We were not able to escape the global downturn in the industrial economy despite our best efforts.” For 2020, the HERMA managing directors are expecting the economy to pick up again slightly and have planned an increase of five percent. “This planning is very sporty. After all, it is characterised by many political and economic uncertainties. The consequences of the corona virus cannot yet be estimated. The crisis in the automotive and supplier industries may lead to further job cuts and thus to increasing consumer reticence. This has an immediate impact on the demand for labelstock and labels. We are also concerned about the further spread of brexite, as we are very active in the UK.
Market shares gained
Nevertheless, the number of HERMA employees rose slightly over the course of the year, from 1,051 at the end of 2018 to 1,097, and the export ratio also increased slightly from 60.2 percent to 61.0 percent. By contrast, earnings fell significantly in the 2019 fiscal year, albeit also as a result of the first write-downs following the major investment project with a volume of over 100 million euros in Filderstadt. “On the credit side, we can post We have now concentrated state-of-the-art production for all three divisions at a single location. This is probably unique in this form in our industry,” emphasized Schneller. In addition, the new coating plant for self-adhesive materials is now on the verge of going into operation – an important prerequisite for further exploiting potential. “Because especially in the pressure sensitive labelstock business unit, we have been able to grow much faster than the market and gain market share over the past few years – this was again the case in 2019,” reported
Dr. Baumgärtner. Sales increased by 4.0 percent to now 223.7 million euros (previous year: 215.2 million euros). At EUR 84.5 million, the Labels division was just about able to maintain the previous year’s sales level of EUR 84.7 million, but had to accept a decline in earnings, among other things due to rigorous cost-cutting measures in the important customer sectors of the automotive and chemical industries. The Labelling Machines division was hardest hit by the downturn. Sales fell by 10.1 percent from 58.1 million euros in the previous year to 52.2 million euros.