HERMLE observes an expected a reluctance by industry

HERMLE observes an expected a reluctance by industry to invest
Incoming orders for the first six months of 2024 fell by 6% to €251 million
Group turnover fell by 7% to €242 million
The operating result at €38.5 million is down 22%
Forecast for the full year remains largely unchanged
Continued growth in demand for automation solutions in the medium term

Gosheim, 29 August 2024 – In line with expectations, weak economic activity and a reluctance on the part of industry to invest have impacted business at Maschinenfabrik Berthold HERMLE AG in 2024. Incoming orders during the first six months at the automation and machine tool specialist from Swabia reduced year on year across the Group by 6.2% to €250.9 million (previous year €267.5 million). Domestic and international business accounted for €88.7 million (previous year: €90.6 million) and €162.2 million (previous year: €176.9 million) respectively. As a result, HERMLE outperformed the German machine tool industry as a whole, which, according to the VDW industry association, reported a slump in demand of 26% in the same period. HERMLE attributes its comparatively solid performance to several factors including its strong position in the area of automation, which had a stabilising effect during the year to date. On the reporting date 30 June 2024, the Group as a whole had a satisfactory order backlog of €139.6 million (31 December 2023: €130.5 million, 30 June 2023: €174.4 million).

HERMLE Group turnover fell by 7.4% to €241.8 million during the first six months of 2024 (previous year: €261.0 million). Business volume in Germany totalled €89.7 million (previous year: €92.1 million) and reached €152.1 million internationally (previous year: €168.9 million), resulting in a continuously high export quota of 62.9% (previous year: 64.7%). The deficit compared with the previous year fell slightly in June when delays in the delivery of machines were made up. In addition, growth in the service business, which is also associated with the increasing turnover share of automation solutions, and the gathering pace of internationalisation due to the subsidiaries abroad had a positive impact.

The operating result of the HERMLE Group from January to June 2024 fell by 22.1% to €38.5 million (previous year: €49.4 million). In addition to lower capacity utilisation, this was attributed to personnel costs due to the expansion of the workforce, standard wage hikes, persistently high levels of sick leave as well as the increasing workload caused by over-regulation and bureaucratisation. The result before taxes during the reporting period amounted to €40.6 million (previous year: €50.4 million), resulting in what is still a solid gross margin on turnover of 16.8% (previous year: 19.3%). After taxes, a net profit of €29.8 million was reported for the period (previous year: €37.1 million).

HERMLE’s financial and asset position during the first six months of the year remained very solid. Cash and cash equivalents at the Group increased from €111.0 million on 31 December 2023 to €137.9 million on 30 June 2024, with equity improving from 72.5% to 73.5% compared to the same reporting date. Investment in tangible and intangible assets at the HERMLE Group increased significantly to €19.4 million in the first six months of 2024 (previous year: €13.0 million). These focused mainly on the expansion of the Zimmern ob Rottweil site, the new spindle assembly centre at the company headquarters in Gosheim and the acquisition of Gebr. Grieswald GmbH & Co. KG, Burladingen, Germany. This specialist manufacturer for high-precision grinding parts, which HERMLE requires for its spindle assembly operations, was acquired on 1 April 2024 as part of an asset deal in order to enhance the Group’s self-sufficiency in this area.

In addition to buildings, machinery and office equipment, HERMLE also took over some 20 employees from its former supplier Grieswald. This was one of the reasons why the workforce at the HERMLE Group increased to 1,555 employees on the reporting date 30 June 2024 (31 December 2023: 1,511, 30 June 2023: 1,442). The company also made new appointments in areas associated with automation and at subsidiaries abroad to add momentum to the internationalisation process. The number of apprentices rose from 77 to 96 compared with the same reporting date the previous year.

After performing generally ahead of expectations during the first six months of 2024, HERMLE also anticipates a further noticeable slow-down in the second half of the year – likewise due to the very restrained demand in July. Current macroeconomic uncertainty as well as increasing regulation and bureaucratisation are having a strong damping effect on investment in the industry. As a result, the company forecast for the full year 2024 remains largely unchanged. Based on current expectations, turnover at the HERMLE Group will fall by a high single-digit percentage even in the best-case scenario, and by around 20% in an unfavourable scenario. We currently anticipate a value in the middle or lower half of this range, although high levels of economic uncertainty could still trigger swings in both directions. Thanks to the slightly reduced but still healthy flexitime accounts at the end of the first half of the year, HERMLE is also well prepared for less favourable scenarios. As was already the case at the end of the first half of the year, the result will fall significantly faster than turnover.

Irrespective of the current challenging economic environment, HERMLE anticipates demand for high-performance machining centres and automation solutions to grow in the medium term. For many industrial sectors, machining systems such as those from HERMLE are essential when it comes to increasing efficiency, actively confronting the shortage of skilled labour and overcoming new technological challenges. From automated stand-alone machines to large-scale production solutions with complex robot systems and intuitive software, HERMLE supplies individually configurable end-to-end solutions from a single source and is continuously optimising its product portfolio. One current focus of development is on the “Generation 2” project, with which the company is redesigning the entire electrical architecture of its machining centres and bringing all interfaces up to the latest state of the art.

HERMLE is also continuing to roll out its extensive capacity expansion program. In Zimmern, the expanded mineral casting production facility and an additional large parts production facility are due to be completed by the end of 2024, while preparations to enlarge the application centre and add a canteen for employees are currently under way in Gosheim.

 

Press contact: Redaktionsbüro tik GmbH, Gabriele Rechinger,
T 0911 988 170 72, E-Mail: info@tik-online.de 
 

Image material: Maschinenfabrik Berthold HERMLE AG, Udo Hipp,
T 07426 95 6238, E-Mail: udo.hipp@hermle.de