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Hermle posts 51 % more new orders in the first half of 2021
Hermle posts 51 % more new orders in the first half of 2021
Turnover still 13 % below previous year, shortfall continuously declining
Operating result of €18.4 million (previous year €29.8 million)
Increase in turnover of 10 % expected for the entire year with the operating result
developing at a significantly lower rate
Gosheim, 31 August 2021 – Business has taken a significant boost at Maschinenfabrik Berthold Hermle AG in the second quarter of 2021 after a restrained beginning of the year. Group-wide orders received by the southern German machine tool and automation specialist rose in the first six months by 51.1 % compared to the same period in the previous year to €180.4 million (previous year €119.4 million). New orders increased domestically by 48.1 % to €65.3 million (previous year €44.1 million) and internationally by 52.9 % to €115.1 million (previous year €75.3 million).
Demand recovered first in pandemic-stable industries such as medical technology, packaging and the electrical industry, then most recently also in parts of the automobile industry not affected by the reversal in the automotive sector and in machine-building. Demand was especially high in the Industry 4.0 area, where Hermle offers a complete range of automated individual machines up to and including fully integrated automation solutions.
On 30 June 2021, orders on hand in the Hermle Group came to €85.9 million. That represents an increase of 91.7 % compared to the figure for the end of 2020 (31 December 2020: €44.8 million) and an increase of 48.6 % compared to the level of the previous year (previous year €57.8 million).
In the first half of 2021, Hermle Group-wide turnover at €139.3 million was 13.4 % lower than the corresponding figure for 2020 (previous year €160.9 million). The reason for the shortfall, which has been successively reduced over the course of the last year, was the low level of orders on hand from the previous year caused by the corona pandemic and the reversal in the automotive industry. Business volume in service and training services already exceeded the level of the previous year and further recovery may also be expected for new machines. Group-wide turnover domestically to the end of June reached €59.5 million (previous year €62.9 million) with an international total of €79.8 million (previous year €98.0 million ), which is equivalent to an export rate of 57.3 % (previous year 60.9 %).
Hermle earnings performance continued to be very adversely affected by below-normal capacity utilisation. In addition, ongoing fierce competition and price increases for purchased materials and energy costs have become noticeable. Previously these have not been passed along to customers. Furthermore, the long-term-oriented human resources policy with the goal of retaining the workforce intact during the corona crisis led to a higher share of personnel costs for a short period. Due to the expected further recovery in demand in the second half of the year, extensive preliminary work was also undertaken in the reporting period.
Overall, the operating result (EBIT) in the Group developed as forecast at a significantly lower rate compared to turnover with €18.4 million in the first six months of 2021, 38.3 % below the figure from the previous year (previous year €29.8 million). The result of normal business activity decreased by 38.8 % to €18.3 million (previous year €29.9 million ), driving the gross margin on turnover down to 13.1 % (previous year 18.6 %). After taxes, a net profit of €13.3 million was reported for the period (previous year: €21.5 million).
The financial and asset position of the Hermle Group continued to remain very stable in the first half of 2021. Although operational cash flow decreased as a result of the lower net profit for the first half of the year to €19.0 million, (previous year €26.6 million), as of 30 June 2021 liquid assets increased by €12.5 million to €117.4 million (31 December 2020: €104.9 million) and the equity capital ratio was a solid 75.3 % (31 December 2020: 79.1 %).
Investments in property, plants and equipment and intangible asset by the Hermle Group in the first half of 2021 totalled €2.9 million. Areas of emphasis included measures for quality assurance, company machines for manufacturing and new warehouse technology for the expanded US location. The high figure of €9.2 million from the previous year was associated with major projects in the USA and at the German production site Zimmern ob Rottweil.
Hermle was able to retain the workforce at a stable level as planned during the corona pandemic. As of 30 June 2021, Hermle counted 1300 employees across the Group compared with 1304 at the end of 2020. Reduced work hours had already been significantly decreased in some areas over the course of last year, especially in service and for the subsidiary that specialises in automation solutions, HLS Hermle Systemtechnik GmbH. The number of apprentices rose from 94 to 96 (this year compared with last year).
Against the backdrop of growing demand from Industry 4.0 customers, Hermle is making the development of new automation and digitization modules for networked manufacturing systems a focus of R&D. For example, the compact RS 1 robot system, suitable for automation of six different Hermle machine models, was presented during the reporting period. External machines such as measuring and cleaning units or automated guided vehicles can then be integrated into a Hermle manufacturing system.
In the second half of the year, based on the stabilised recovery in demand and the solid orders on hand again, the company is counting on significantly improved utilisation. From today's vantage point, that should more than make up for the year-end shortfall in sales compared to the previous year and it should be possible to cut down significantly on reduced working hours in other manufacturing areas. Seen from the perspective of today, for the full year 2021, an increase in turnover of 10 % seems achievable, provided there are no further serous encumbrances from the corona pandemic, disruptions in the supply chain or the reversal in the automotive sector. If the dynamic revival in demand continues, a better trend is possible. The operating result compared to the shortfall in the previous year will also continue to recover in the next quarter, but will continue to develop at a significantly lower rate compared to turnover throughout the entire year. This may be attributed among other factors to the price increases for purchased materials and energy described above. To pass these along, at least to some extent, Hermle is planning on a moderate increase in list prices in the second half of the year. A higher share of personnel costs may be noted, due to factors including additional benefits such as Christmas and vacation bonus, special collective bargaining bonuses and a general bonus for employees, which are provided regardless of reduced working hours in the current year. Thanks to human resources policies that took the long-term view, Hermle can now respond quickly and flexibly to the current upward trend with its workforce intact.
Press contact: Redaktionsbüro tik GmbH, Gabriele Rechinger,
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The complete half-year financial statement is available on the website www.hermle.de under heading Investor Relations / Financial Reports / Half-year financial statements.