Lenze looks back on a dynamic and eventful financial year 2018/2019. On one hand, it was characterised by the deteriorating global economy during 2019. Raw material, production and HR costs also rose. On the other hand, Lenze achieved a number of strategic and operational milestones.
For example, Lenze managed to increase consolidated revenue by 6.3 per cent to a new high of EUR 787.6 million. Lenze even exceeded the expectations at the beginning of the financial year. All regions of the Lenze Group (Europe, America, Asia) contributed to its growth. Contributions from business with customers in Lenze's five focus industries - automotive, consumer goods, converting & printing, intralogistics and textiles - were, as planned, major growth drivers.
During the last financial year, the Lenze Group made massive financial and personnel investments in skills expansion. Net investments increased to a new high of EUR 37.5 million during the 2018/2019 financial year, exceeding the previous year's level by 72.0 per cent (previous year: EUR 21.8 million). In order to meet its projected growth and altered skills requirements in the age of digitalisation, a number of new staff were appointed in key areas, meaning that the headcount at the end of the financial year rose to 3,969 (previous year: 3,739).
By investing in key skills for the future, the company has further improved its starting position for successful development - and can provide its customers with an extensive, further optimised service portfolio as a flexible partner for automation and digitalisation.
During the 2018/2019 financial year, Lenze also achieved a number of strategic and operational milestones that will secure its successful future development:
The clear growth and the financial and personnel development of skills are also reflected in earnings performance during the 2018/2019 financial year. Overall, this fell short of expectations. Higher material prices, lower material throughput with limited material availability, as well as additional expenses in production and logistics, had a negative impact on profitability. In addition, HR costs increased disproportionately compared with overall performance. As a result, operational earnings before interest and taxes (EBIT) and one-off items amounted to EUR 52.4 million. After profit-reducing one-off items, EBIT totalled EUR 35.5 million (previous year: EUR 65.7 million). EBIT margin before one-off items was 6.7 per cent. Consolidated earnings before the deduction of minority interests were EUR 21.0 million in the reporting year, compared with EUR 47.2 million the previous year.
As part of the FIT2020+ efficiency programme, the Executive Board has agreed a wide range of efficiency-enhancing measures, many of which have already begun. Thus, everything has been set in motion to enable Lenze to once again improve its profitability in the short to medium term.
The Lenze Group continues to enjoy financial strength and stability. Net cash flow from operating activities, which is the sum of gross cash flow and change in net working capital, increased by 16.0 per cent to EUR 50.2 million year-on-year (previous year: EUR 43.4 million).
Investments during the 2018/2019 financial year reached a new record level. Net investments of EUR 37.5 million once again exceeded the previous year's level by 72.0 per cent (previous year: EUR 21.8 million).
Despite this much higher level of investment, the Lenze Group had positive free cash flow of EUR 12.7 million and liquid assets of EUR 72.7 million as of 30 April 2019 (previous year: EUR 80.7 million).
The Lenze Group balance sheet also continues to be stable. With a balance sheet total of EUR 500.8 million, equity capital amounted to EUR 316.1 million as of 30 April 2019 (previous year: EUR 321.3 million). This represents an equity ratio of 63.1 per cent (previous year: 66.5 per cent). Despite higher financial debts due to increased investment activity, the net financial assets of the Lenze Group totalled a very robust EUR 45.7 million on the reporting date (previous year: EUR 63.0 million).
The Executive Board believes Lenze is still well prepared for its successful medium-term development. As Chairman of the Executive Board, Christian Wendler, explains at this year's SPS trade fair in Nuremberg: "Last year, we invested heavily in developing and expanding our expertise. In 2018/2019, this led to a reduction in our positive result. At the same time, we laid important foundations for extending our leading role in the automation sector and will reap the benefits of our optimised set-up in the future."
With regard to short-term opportunities and risks, he adds: "Our industry will soon become extremely strained, because the opportunities arising from digital transformation are offset by significant risks from a further, global, economic slowdown, trade disputes and also financial crises."
The industry association, VDMA, therefore remains cautious about the future of mechanical engineering. It expects production to fall by 1.6 per cent in 2019 and even decline by 2.0 per cent in 2020.
Summarising the outlook for Lenze, Christian Wendler says: "Lenze is well prepared to maintain its position, even in choppy waters. We will also be able to further increase our market share in the systems business and in Asia. In this respect, we continue to see growth potential for Lenze."
Learn more at www.lenze.com.