Maschinenfabrik Berthold Hermle AGMaschinenfabrik Berthold Hermle AG

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Hermle in the financial press.

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Gabriele Rechinger

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Pictorial material: 

Maschinenfabrik Berthold Hermle AG

Udo Hipp / Marketing Manager

Phone: 07426 95-6238

E-mail: udo.hipp@hermle.de

Hermle celebrates exceptional business year 2016

27.04.2017

Group turnover increased by 10.5% to €394 m
Profits for the year rose from €59.2 m to €73.8 m
Incoming orders increased by 1% to €364.5 m
Normalisation expected for 2017

Gosheim, 27 April 2017 – Maschinenfabrik Berthold Hermle AG saw an upturn in sales and profits in 2016: the group sales of the German machine tool manufacturer increased by 10.5% to €394 m (previous year €356.6 m). The company’s business volume in Germany rose by 8.3% to €160.3 m (previous year €147.9 m) and international sales grew by
12% to €233.7 m (previous year €208.7 m). Large-scale projects and the recovery of markets in southern Europe had, among other things, a positive effect on performance. Additionally, new products, such as the compact machining centre C 250 from Hermle’s Performance-Line, were highly sought after. Group-wide exports grew from 58.5% to 59.3%.

Company earnings (earnings before interest and tax, EBIT) of the Hermle Group rose from €80.4 m to €99.8 m during the reporting year. This was based on a growth in sales, the high degree of capacity utilisation and the overall efficiency of processes at Hermle. Moreover, the previous year’s EBIT was negatively influenced by the special effects of changes in the exchange rate. Including the financial result, the earnings before tax climbed from €80.6 m to €100.3 m. This resulted in a pre-tax sales margin of 25.4% (previous year 22.6%). Group profit rose from €59.2 m to €73.8 m.

Against the background of this exceptional business development, the management and supervisory board will recommend increasing the distribution of dividends for the business year 2016 at the Annual General Meeting on 5 July 2017: it is planned for the shareholders to receive the same basic dividend of €0.80 per ordinary share and €0.85 per preference share, plus a bonus of €12 for each share (previous year €10). This would mean an increase in the dividends for a preference share to €12.85 (previous year €10.85).

The strong profit situation has also has helped to further cement Hermle’s healthy financial and assets position: the Group-wide operative cash flow during the reporting year rose from €65.4 m to €80.8 m and the equity ratio improved from 72.8% to 74.3%.

Investments of the Hermle Group rose sharply in 2016 from €7.1 m to €16.4 m. The reason for this was two large-scale projects intended to boost capacities for future growth. On the one hand, Hermle began modernising and expanding the mechanical machining sector at its headquarters in Gosheim in the second half of 2016. An existing workshop is being converted and equipped with state-of-the-art technology during on-going production and should be completed by the summer of 2017. On the other hand, the company purchased an additional site on an industrial estate in the neighbouring district of Rottweil in May 2016. This is where a new building for the in-house production of machine beds is currently being constructed. Work commenced in September 2016 and should be completed in the second quarter of 2017. The site also offers plenty of space for additional activities. The new site will pave the way for future growth and help secure the future of the facility in Gosheim, which is subject to space and building restrictions.

On 31 December 2016, the Hermle Group employed 1,018 people, 41 people more than at the end of 2015 (previous year 977). Almost half of the new employees work in the commercial sector. This is where a number of young employees were given full-time contracts after successfully completing their training, and new apprentices were taken on to fill the resulting vacancies. On 31 December 2016, a total of 95 young people (previous year 96) were learning a profession at Hermle that would stand them in good stead for the future. This continues to represent a high trainee quota of 10.7% (previous year 11.3%) relative to the overall workforce of the parent company, Hermle AG. Moreover, new members of staff were hired in the areas of generative manufacturing and service.

Commitment, experience and know-how of the workforce are a key factor in the success of the company. Therefore those employed by the Hermle AG are, once again, to receive a bonus of 70% of a monthly salary plus a fixed lump sum following disbursement of the dividends.

Incoming orders of the Hermle Group increased by 1% in 2016 to €364.5 m (previous year €360.7 m). New domestic orders rose by 0.6% to €156.8 m (previous year €155.8 m), and orders from overseas grew by 1.4% to €207.7 m (previous year €204.9 m). Demand eased off slightly as expected in the fourth quarter. On 31 December 2016, the backlog of orders totalled €93.8 m, 23.9% below the previous year’s total (previous year €123.2 m).

Hermle expects this reduction in the backlog of orders and various economic uncertainties to bring about a normalisation of business conditions in 2017 but remains confident of good results. Imponderables result, among other things, from the unforeseeable impacts of the Brexit vote and the unclear future policies of the new US government. Risks continue to loom large due to the precarious financial situation in certain southern European countries, the increasing political differences within the EU and the consequences of the diesel emissions scandal. Increasing trade restrictions when exporting to countries such as China, Russia and Turkey threaten to further hamper growth prospects.

The currently discernible trend is doing better than expected at the end of last year when a slight decline in the course of business was planned. Encouraged by this positive development, Hermle will adjust its targets upward. The company however also points out that the world is currently facing a number of problems that could have a negative impact on the current positive trend at any time. Hermle is, nonetheless, well prepared for any future challenges due to its concept of a breathing enterprise, highly flexible structures and its very healthy financial and assets position. This also enables anti-cyclical investments. Today, Hermle is already able to secure the long-term development and success of the business thanks to the two large-scale projects for enhancing overall capacity, which will be completed in 2017.

 

The full annual financial statements can be accessed at www.hermle.de/investorrelations/finanzberichte.

Maschinenfabrik Berthold Hermle AG is one of the world's leading manufacturers of milling machines and machining centres. Owing to their high quality and precision, Hermle machine tools are used in high-tech sectors such as toolmaking and mould construction, medical technology, the optical industry, energy technology, the aircraft, automotive and motor sport industries including their subcontractors. Hermle shares are traded on the regulated Stuttgart and Frankfurt stock markets.

Press contact: Redaktionsbüro tik GmbH, Gabriele Rechinger,
Tel.: +49 (0)911 95 97 870, Email: info@tik-online.de

Image material: Maschinenfabrik Berthold Hermle AG, Udo Hipp,
T 07426 95 6238, Email: udo.hipp@hermle.de

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