Maschinenfabrik Berthold Hermle : HERMLE’s business performance in the third quarter of 2023 more stable than expected

HERMLE's business performance in the third quarter of 2023 more stable than expected
Group turnover up by 20% to €m 381 after nine months
Number of orders decreased by 11% to €m 374
2023 sales and results will definitely be at the upper end of forecast - opportunity for slightly higher growth

Gosheim, 14 November 2023 - Maschinenfabrik Berthold HERMLE AG showed steady development in the third quarter of 2023. Based on the good business performance in the first half of the year, Group turnover of the Swabian automation and machine tool specialist increased by 20.3% to €m 380.9 in the first nine months compared to the corresponding period in the previous year (previous year: €m 316.7). This slightly better-than-expected performance was primarily down to the continued high demand for HERMLE automation solutions equipped with HERMLE digitalisation components. Domestically and internationally, HERMLE saw turnover increase by 21.3% to €m 140.2 (previous year: €m 115.6) and by 19.7% to €m 240.7 (previous year: €m 201.1) respectively. This led to an export quota of 63.2% (previous year: 63.5%).

As expected, HERMLE recorded a further decrease in incoming orders in the third quarter. In the period January to September 2023, new orders dropped by 11% to €m 374.1 Group-wide (previous year: €m 420.2). Of which €m 132.0 (previous year: €m 151.0) were attributable to the domestic market and €m 242.1 (previous year: €m 269.2) to the international market. Orders on hand at the end of the third quarter totalled €m 161.1 compared to €m 168.0 at the end of 2022 and €m 211.5 on the same date in the previous year, when there was a huge backlog due to various supply chain disruptions.

The earnings, financial and assets position of HERMLE thus remains very solid: The development of results normalised in the third quarter but, nevertheless, exhibited a disproportionate increase to turnover at the end of September. The fact that HERMLE's price quality remained steady despite the expected economic downturn has had a somewhat positive effect. Furthermore, the HERMLE Group had high liquid funds and an equity ratio of roughly 70% as of 30 September 2023.

This means the company has built a solid foundation for its ongoing, extensive investments. In the first nine months of 2023, HERMLE invested roughly €m 20 in tangible and intangible assets throughout the Group (previous year: €m 6.3). The main focus was on expansion of the production site in Zimmern ob Rottweil, which includes constructing a new large-part production facility, expanding the existing mineral casting production and installing a photovoltaic system. The building envelope for the new large-part production facility has now been completed, thereby enabling interior construction work to be carried out in the winter regardless of the weather outside. Moreover, refurbishment of the former sheet metal production facility at the company headquarters in Gosheim is also progressing well. It should be completed by the end of the year. HERMLE additionally invested in its international service capacities, in particular in a new subsidiary in France and a service office in Phoenix, Arizona, USA. HERMLE installed a logistics centre at the key transport hub in Phoenix, enabling much faster access to customers in the US west and south-west.

The number of employees in the HERMLE Group increased to 1,506 people as of 30 September 2023. This is 131 more people than on the same date in 2022 (previous year: 1,375) and 123 more people than at the end of 2022 (31 December 2022: 1,383). New employees were hired primarily in areas related to automation and at HERMLE's international companies. Furthermore, the number of apprentices increased from 95 to 116 young people. In addition to reporting date effects, slight growth was noticeable as a result of intensified junior staff activities, which the company is using to counteract demographic change.

Against the backdrop of the good performance in the first nine months of 2023, HERMLE expects to finish the full year at the upper end of forecast, i.e. to achieve both an increase in turnover (roughly 10%) and in earnings. In the best-case scenario and in the absence of any external disturbances, both sales and the operating result could increase by slightly more than 10%.

However, there are still some serious risks to future development. At the leading industry trade fair EMO, the strong uncertainty in the industry resulting from the difficult economic climate was tangible, which is why HERMLE expects demand to drop even further in the coming months. At the same time, there was continued high demand for automation solutions such as those offered by HERMLE. Although the order backlog is likely to decrease further by the end of the year, HERMLE, nevertheless, looks set to start 2024 with a robust backlog of orders.

Press contact: Redaktionsbüro tik GmbH, Gabriele Rechinger,
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Image material: Maschinenfabrik Berthold Hermle AG, Udo Hipp,
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