Hermle continued to perform well in 2020
Hermle continued to perform well in 2020
Solid profit of €40.1 million (previous year: 84.2) despite
a significant dip in turnover to €296.9 million (previous year: 463.1)
Positive impetus from Industry 4.0 projects
In a favourable scenario, an increase in turnover is possible in 2021
with the operating result developing at a significantly lower rate
Gosheim, 30 April 2021 – Maschinenfabrik Berthold Hermle AG continued to perform well in 2020, a year that was turned on its head by Covid-19. However, as expected, business performance of the southern German machine tool and automation specialist was impacted significantly by the pandemic. After a deep slump in the second quarter, demand picked up moderately through the rest of the year, but overall the number of orders received in 2020 fell by 41.5% to €242.5 million (previous year: €414.4 million. ). Of that total, 99.1 million was generated within Germany (previous year: €154.5 million) and €143.4 million on international markets (previous year: €259.9 million). The increasing demand for Industry 4.0 projects had a positive impact on business: Hermle is increasingly designing completely automated and networked manufacturing processes for its customers, with the machining centres and machines integrated by the company along with supplementary functionalities such as measuring and cleaning.
Hermle Group-wide turnover dropped by 35.9% to €296.9 million. (previous year: €463.1 million ). The service and spare parts sectors saw stronger growth than the new machines business. Due to the relatively stable exports to China, foreign volume decreased by 30.4 % to €184.7 million (previous year. €265.5 million), while domestic sales, which are strongly influenced by the automotive industry, dropped by 43.2 % to €112.2 million (previous year €197.6 million). The export ratio therefore increased from 57.3% to 62.2%.
In spite of the abrupt decline in turnover caused by Covid-19, Hermle still achieved a satisfactory, albeit significantly reduced, operating result of €54.2 million across the Group in 2020 (previous year: €114.2 million). The basis for this was provided by very flexible processes as well as the breathing company concept with an individual flexi-time model, which allows Hermle to adapt to fluctuations in demand to a certain extent. The result before taxes was €54.3 million (previous year €114.1 million ). This results in a gross margin on turnover
of 18.3% (previous year: 24.6%). After taxes, a solid annual net profit of €40.1 million was reported (previous year €84.2 million).
On this basis, the board of management and supervisory board will propose, as announced to the shareholders’ meeting on 7 July 2021, a payout unchanged from the previous year of €0.80 per ordinary share and €0.85 per preference share, as well as a bonus of €4.20 per share.
The financial and net asset situation of the Hermle Group remained robust in the past business year: Thanks to the solid result, the company’s own funds increased by 5.4% to €274.4 million by the end of 2020 (31 December 2019: €260.4 million), while the balance sheet total fell by 3.6 % to €347.0 million (31 December 2019: €360.1 million). The equity ratio thus rose to 79.1% (previous year: 72.3 %).
The operating cash flow in the period under review was €50.5 million (previous year: €94.6 million) and thus significantly higher than the investments in tangible and intangible assets. These increased by 62.4% to €21.6 million (previous year: €13.3 million), mainly due to two major future-oriented projects that have been completed in the meantime. One focus was the company’s innovative, highly automated new sheet metal production facility at the site in Zimmern ob Rottweil, which commenced operation at the end of 2020. Further, Hermle invested in the expansion of its US subsidiary in Franklin/Wisconsin due to a growing customer base in the key North American market.
As of 31 December 2020, Hermle counted 1304 employees across the Group (31 December 2019: 1319). As a direct result of Covid-19 related demand drops, positions that became vacant in the year under review were not filled, if possible. Since May 2020, a large part of the workforce has been working reduced hours. In order to meet its responsibility towards young professionals and to address an increasing shortage of skilled workers, the company has again retained the services of all apprentices who successfully completed their training in 2020 and filled the apprenticeship positions that became available as a result. The number of apprentices has, therefore, increased by 12 to 112 young people compared to the same date in the previous year.
The Covid-19 pandemic posed major challenges for the workforce, which were overcome thanks to their great commitment. Employees will therefore receive a bonus for the year 2020 unchanged from the previous year.
At the beginning of 2021, Hermle’s business remained relatively stable compared to the final quarter of 2020, despite further Covid-19 related restrictions in many countries. While demand from the medical, packaging and electronics industries, for example, has picked up, sales remain subdued in sectors such as aerospace and automotive supply industries. Due to heightened uncertainty about the economic outlook due to the pandemic, Hermle can only make limited forecasts about developments over the coming months. Based on the low orders on hand at the end of 2020 of €44.8 million (31 December 2019: €99.3 million), the company currently expects turnover for the full year 2021 to decrease slightly in the negative scenario and is hopeful of a small increase at best. The operating result is likely to develop at a significantly lower rate than turnover, as we must expect higher costs associated with the reduced working hours in the second half of the year due to changes in legal regulations and continued heavy price and competitive pressure.
As a highly flexible and financially robust company capable of quick response, Hermle sees itself as well equipped for a complete restart after the end of the pandemic-conditioned restrictions and with stabilized demand in important consumer industries. The company's increasing internationalisation as well as other Industry 4.0-related automation projects will contribute to this.
Press contact: Redaktionsbüro tik GmbH, Gabriele Rechinger,
Telephone: +49 (0)911 95 97 870, Email: info@tik-online.de
Image material: Maschinenfabrik Berthold Hermle AG, Udo Hipp,
T 07426 95 6238, E-mail: udo.hipp@hermle.de
