Continued positive business development for Hermle in the first five months of 2022

Continued positive business development for Hermle in the first five months of 2022
New orders rose by 75% to €235 million
Group turnover increased by 50% to €169 million
Result developed disproportionately despite disruptions caused by the war in Ukraine
Forecast for 2022 as a whole remains unchanged
Shareholders' meeting approves increased payout of €9.05 per prefer-ence share (previous year €5.05)
 

Gosheim, 6 July 2022 – Maschinenfabrik Berthold Hermle AG sees continued positive business development in 2022 despite growing risks. Incoming orders throughout the Group of the German automation and machine tool specialist rose by 75.1% to €235.3 million in the first five months of 2022 compared to the same period in 2021 (previous year €134.4 million). Thereof, €82.6 million were generated nationally (previous year €52.7 million) and €152.7 million internationally (previous year €81.7 million). Order backlog increased by 61.5% to €174.3 million compared to the figure at the turn of the year (31 December 2021: €107.9 million). Recorded on the same date in the previous year, the order backlog had amounted to €66.3 million, but it must be noted that the first quarter of 2021 was still massively affected by the Covid-19 pandemic.

Turnover of the Hermle Group had risen by 49.6% to €168.9 million (previous year €112.9 million) by the end of May 2022. As the Management Board explained at today's shareholders' meeting, the company continued to compensate for increasing supply chain disruptions through internal special measures such as overtime, employing alternative materials, swapping suppliers and modifying the constructional design of machines. In the first five months of 2022, turnover increased nationally by 41.6% to €65.7 million (previous year €46.4 million) and internationally by 55.2% to €103.2 million (previous year €66.5 million).

Result of the Hermle Group increased more sharply than turnover between January and May 2022. This was due to the positive effects of the strong increase in capacity utilisation compared to the previous year. This more than compensated for both the additional expenses to counterbalance supply chain disruptions and any economic fall-out due to suspending business operations in Russia. Hermle ceased operations immediately at the start of the war in Ukraine, even before the EU sanctions came into force, and currently sees no prospects for re-launching them again any time soon. Therefore, all assets and outstanding receivables in Russia were written off and the Russian companies were de-consolidated in April.

In view of the good progress to date and the higher-than-expected level of incoming orders, the Management Board explained at the shareholders' meeting that, in normal times, it would expect full-year turnover growth of 20% or more in 2022. But these times, the Board continued, are unfortunately anything but normal. Hermle will foreseeably have to face increasing risks, disruptions and costs in the second half of the year. These result primarily from increasing material and transport shortages worldwide as well as impending energy supply gaps and resulting price hikes. At Hermle, this will lead to increased additional expenditure due to the increasing shortfalls in supplies and the rising material and energy costs. In addition, the generally noticeable reluctance to invest in the industry is becoming tangible. Moreover, total shutdown of the Russian gas supply would have difficult-to-predict consequences, up to and including production downtime in case of a gas supply quota.

Against this backdrop, Hermle continues to hold on to its previous forecast for 2022, which assumes an increase in turnover of at least 10% and a disproportionately low development of results. Despite the loss of Russian business, the operating result is expected to reach at least the previous year's level, depending on the amount of turnover the Group ultimately achieves and further development of material and energy costs.

If the global shortfalls in supplies ease faster than anticipated, the trend could be better than expected. Hermle would be well prepared for this scenario thanks to its solid order backlog. The company also benefits from its decision to specialise in automation from an early stage. With suitable pallet changers, handling and robot systems as well as digitalisation components, Hermle today offers the ideal automation solutions for every machining centre and can thus provide customers with everything they need for 24/7 production all under one roof. Growing internationalisation is also having a positive impact. Hermle is currently establishing its own subsidiary in China. In the area of production, the company continues to rely on its traditional installation location in southern Germany. In order to adapt its own high-tech production to continuing high demands, extensive investments of around €60 million are planned in this segment over the next five years.

At the shareholders' meeting today, which again had to be held virtually, the shareholders approved the increase in dividends as well as the administration's other proposals. The shareholders should receive the same basic dividend of €0.80 per ordinary share and €0.85 per preference share, as well as a bonus that has increased from €4.20 to €8.20. This results in a payout of €9.05 per preference share (previous year €5.05). The employees in Germany also participate in business development and will receive a bonus based on the dividend for the 2021 financial year. This is to honour their excellent motivation and flexibility. 

 

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