HELLER reports stable development and good results in 2018
Below the line, the HELLER Group achieved good results in 2018. During the past fiscal year, the Nürtingen-based family business generated a sales volume of EUR 558.3m, remaining three percent, or 19.3m, below the previous year. Whereas the recorded order intake reached a record level in 2018. The company booked orders worth EUR 695.2m, corresponding to a plus of EUR 82.3m or 13.4 percent. With orders worth EUR 546m, the current order volume has also reached a high. The number of employees increased moderately from 2,440 in 2017 to 2,590 in 2018. The equity ratio increased to just under 35 percent.
“The slight drop in sales is primarily due to order deferrals in project business. However, we are very pleased with the performance of our after-sales business which accounts for a fourth of the overall business volume,” explains Klaus Winkler, CEO of the HELLER Group. The machine tool manufacturer generated EUR 142m in service sales, exceeding the planned target. Machine business contributed EUR 412m to revenues. In 2018, Germany remained the most important market for the group with a sales volume of EUR 192m (34.4 percent). Throughout the rest of Europe the company recorded a slight decline in sales revenues. Particularly pleasing was the development on the Asian continent. At the end of the year, this reflected in a rise of approx. 27 percent (EUR 148m). Business in South America also developed very well with a 46 percent sales increase.
Europe clearly the strongest region in terms of order intake
Order intake from new-machine business is due to the very positive development of project and single-machine business. Despite the continuing slowdown in automotive project business throughout the course of the year, order intake in this sector accounts for more than 50 percent of new-machine business due to a major project. Investments in electromobility gained in significance. Business with cylinder bore coating, contributing to a significant reduction in CO2 emissions of modern combustion engines, was successful again. The strongest growth was achieved with applications outside of the traditional automotive business, especially with 5-axis machining. We also noted a strong increase in investments in production automation and in the demand for digital services. In terms of project business, order intake was more or less in line with forecasts, still accounting for more than 50 percent of new-machine business. Looking at the development of order intake according to region, then Europe was the strongest sales region for HELLER machines and services. More than two thirds of new orders in 2018 came from the European market. Of particular note was the development on our domestic market in Germany, contributing the lion share to the development of European business with just under 30 percent. 17 percent of orders came from Asia, 12 percent from the Americas.
In the past fiscal year, the HELLER Group invested a total of EUR 18.5m in measures to increase capacity and in modernisation. One priority was the digitisation of our own processes. An additional assembly hall is currently under construction in Nürtingen which will house the final assembly of our 5-axis machining centres, using state-of-the-art assembly concepts in the future. The completion of the new ‘spindle line’ at our manufacturing facilities completes the investments at our company’s headquarters in Swabia. At the Brazilian production plant in Sorocaba and in Troy, MI in the US, we invested in the modernisation of machinery and office equipment. Moreover, the company group was expanded in 2018 with the acquisition of Paatz Viernau GmbH based in Thuringia.
Optimistic outlook on the future despite uncertainties
Political uncertainties, disputes about mutual trade barriers, especially between the US and China, the high debt burden of many countries, but also the seemingly endless debate about BREXIT are becoming increasingly visible. The politically driven discussions about future drive concepts are an additional source of uncertainty and impact the investment decisions. They give further reason for the globally apparent decline in short-term awarded automotive projects, although discussions in Germany are more intense than elsewhere. After all, competitive and price pressure within the industry remains high and also the procurement market and material supply remain bottleneck factors.
The forecasts for the global economic situation in 2019 continue to be cautiously optimistic for the international markets as well as for Germany. The global consumption of machine tools will remain at a high level throughout 2019. HELLER also expects this development to be reflected in the submarkets in which the company is present. The start of the first quarter was slightly below expectations which was mainly due to a slowdown in automotive project business.
“Due to full order books we expect a good capacity utilisation, growing sales revenues and a good annual result for 2019,” predicts Klaus Winkler, taking a positive view of the current development. Moreover, 2019 is a very special year for HELLER. The company celebrates its 125-year anniversary. In 1894, Hermann Heller, only 25 years at the time, founded the company ‘Hermann Heller Handelsgeschäft und Produktion von geschützten Artikeln und Uhrmacherwerkzeug’ in Nürtingen – specialising in the trade and manufacture of patented products and watchmaker’s tools – and thus laid the foundations for today’s company. Another highlight will be EMO, the machine tool industry’s leading trade show, to take place in Hanover in September. The industry meeting provides HELLER and numerous visitors with an excellent platform to discuss current manufacturing requirements, developments and trends and to lay the foundations for investments. All things considered, the company considers itself well set up for the forthcoming challenges.
The 2018 figures at a glance
Order intake: EUR 695.2m
North and South America: 12%
Turnover: EUR 558.3m
Total operating revenue: EUR 590.4m
Equity capital: EUR 124.7m (ratio: 34.8%)