- Yadon and AWEBA tap new market segments
- Savings above target thanks to manufacturing concept
- Equity ratio reaches 39 percent for first time
Press manufacturer Schuler AG raised sales and earnings to new record levels in 2017. The global market leader based in Göppingen, Germany, posted consolidated sales of € 1.23 (prior year: € 1.17) billion with particularly strong growth in North America and China. Compared to the previous year, the operating result (EBITDA) rose to € 141 (€ 123) million. As a ratio of sales, this corresponds to a margin of 11.5 (10.4) percent – putting Schuler among the leaders in Germany’s machine and plant engineering sector. There were important contributions to the successful annual financial statements from the two strategic investments Yadon and AWEBA (included in the full-year consolidated figures for the first time), as well as from improved cost structures in Germany following the implementation of the company’s manufacturing concept. With a record equity ratio of 39.0 percent, Schuler has created excellent conditions for the further development of the Group.
At the balance sheet press conference in Göppingen, CEO Stefan Klebert stated: “The healthy annual financial statements for 2017 reflect the successful changes made over the past few years. Earnings were driven by both the new manufacturing concept and the acquisitions Yadon and AWEBA. These two takeovers have not just been a financial success story, but have also helped Schuler tap strategically important domestic and foreign markets.”
New orders boosted by strong final quarter
New orders received by Schuler in 2017 made uneven progress. There were order increases of over 20 percent in some cases in China, the Industrial division, and for die solutions (mainly AWEBA). By contrast, there was a noticeable decline in orders received by the Automotive division. The main reason for this trend is the decision of major car manufacturers to channel considerable funds into the expansion of electromobility while temporarily postponing investment in new production capacity. Schuler itself is not adversely impacted by the change to new drive technologies. The company also supplies press lines to manufacture body parts for electric vehicles, as well as lines to produce electric motor laminations and batteries.
For the Group as a whole, new orders fell slightly to € 1.14 (€ 1.20) billion in 2017. The strong final quarter of the year accounted for a third of this total. As of December 31, the order backlog stood at € 0.90 (prior year: € 1.01) billion. In the first weeks of 2018, new orders maintained their encouraging momentum from the last quarter of 2017 and continued to make good progress, especially in the Automotive business. All in all, Schuler expects sales and earnings before special items to reach their prior-year levels in 2018.
Largest share of sales in Europe
At € 528 (prior year: € 524) million, Europe accounted for the largest share of consolidated sales totaling just over € 1.23 billion in fiscal year 2017. Sales in China rose to € 310 (€ 290) million. Schuler’s business in North America made strong progress with increased sales of € 328 (€ 271) million. There was a slight decline in Group headcount to 6,570 (6,617) as of December 31, 2017, of which 2,333 (2,284) people are employed outside Germany.
In its first full year of implementation, the new manufacturing concept for the Group’s German facilities already led to savings and efficiency gains of around € 30 million in 2017. These savings were achieved despite the positive sales trend and were well above target.
“Growth from new markets and innovative products”
At over € 106 (€ 95) million, Schuler’s earnings before taxes (EBT) were well above the prior-year figure once again in 2017. One driver of this operating result, with a contribution of around € 18 million, was the Group’s technology and demonstration center in Tianjin, China, which was sold to an industrial partner in 2017 following a successful operational phase. Yadon and AWEBA also made positive contributions to sales and earnings.
CEO Klebert: “Yadon clearly demonstrates that growth is primarily generated via new markets and innovative products. Yadon presses form the basis for successful new product offerings in the USA and, in the future, also in India, Vietnam, Sri Lanka and selected European growth markets. At the same time, Yadon’s link-drive press launched in 2017 is its first product to offer higher press forces of up to 2,500 metric tons – a joint development project of our teams in China, Brazil and Germany.”
Digitization and new Industry 4.0 solutions
Following the roll-out of its MSP2-400 press line, Schuler has been working hard on the development of new products for the medium price-performance segment. Schuler has launched a large number of internal projects for the further digitization of its products and company processes. At its facility in Gemmingen, for example, the company is setting up a center of expertise for the digital monitoring of part position and temperature, as well as data analysis for the optimizing of processes. At the new Schuler Innovation Tower in Göppingen, training rooms are being equipped where Schuler and its customers can prepare for the challenge of increasingly networked press lines. Schuler will be showcasing specific Industry 4.0 applications in its own Smart Press Shop at the leading industry trade show “Euroblech” in Hanover, Germany, in October 2018.
Further improvement in equity base
Against the backdrop of its positive earnings trend in 2017, Schuler – in which the Austrian ANDRITZ Group holds 95 percent of capital stock – was able to make further improvements to its capital base. Shareholders’ equity rose to € 498.4 (€ 438.4) million. As a result, the equity ratio reached 39.0 (32.2) percent – its highest level since the company’s IPO in 1999. CFO Norbert Broger stated: “Schuler boasts an extremely healthy capital and liquidity base that provides scope for growth-enhancing investment while giving us the capability to cushion cyclical dips – although none are currently in view.”
Capital expenditures decreased as planned to € 26.9 (€45.8) million in 2017, but continued to exceed depreciation. The construction of a new technology center in Göppingen – the Schuler Innovation Tower officially opened a few months ago – had led to record capital expenditures in 2016. At € 125.4 (€ 116.3) million, Schuler’s net liquidity (liquid funds less financial debt) was well above the prior-year figure.