HERMA: Sales growth in a difficult year

- With an increase of around five percent to now 380.8 million euros, the HERMA Group again achieved significant growth in 2020.
- Thanks to comprehensive hygiene concepts and highly flexible teams, HERMA 2020 remained fully capable of production and delivery and also benefited from the new coating plant.
- However, due to the current general conditions, also with regard to the consequences of Corona and Brexit, HERMA is planning very cautiously for 2021.

Significant increase in sales despite difficult conditions: "This was only possible because we remained capable of delivering throughout the year thanks to our prudent and dedicated teams," said HERMA Managing Directors Sven Schneller (left) and Dr. Guido Spachtholz when they announced the figures for the 2020 financial year.
Source:  Company news

Despite the difficult general conditions, HERMA was once again able to significantly increase sales in 2020. Business with pressure-sensitive materials, labels and labeling machines grew by around five percent, from 364.4 million euros in the previous year to 380.8 million euros now. "Achieving this result under the conditions of comprehensive hygiene concepts in production on the one hand and extensive home office activities on the other was only possible because HERMA employees were very prudent, highly flexible and extremely committed. As a result, we remained fully capable of production and delivery throughout the year," said HERMA Managing Director Sven Schneller. High write-offs resulting from recent investments in two new production facilities again put pressure on earnings, as in the previous year. "All in all, however, we are satisfied given the circumstances. It is paying off that we are pursuing a strategy of profitable, organic growth," said Sven Schneller. As the economic consequences of the pandemic worldwide cannot yet be fully assessed and the effects of the Brexit deal are also still unclear, HERMA is planning for the current year with extreme caution, he added. "It is now a matter of joining all forces to confirm the good sales of 2020 and to achieve an increase in the low single-digit range. Sales and incoming orders in the first two months of the current fiscal year indicate that this is ambitious, but feasible." The number of employees rose slightly over the course of the year from 1,097 to now 1,106. The export ratio rose to 62.8 percent (previous year 61.0 percent).

Stable situation in the business units
The Labelstock division benefited greatly from the new coating plant in Filderstadt, which went into operation in spring 2020. This enabled HERMA to distribute customer orders across two autonomous production sites and thus implement particularly comprehensive hygiene concepts. An increase from €223.7 million to €241.1 million represented an eight percent increase over the previous year. "The new plant also opens up excellent opportunities for us to expand even further in particularly lucrative product areas in the future," explained Dr. Guido Spachtholz. He had taken up his position at the beginning of 2021 as the successor HERMA Managing Director to Dr. Thomas Baumgärtner, who retired as planned after 16 years at HERMA.

Developments in the Labels Division, where sales fell slightly from 84.5 million euros to 82.6 million euros, were characterized by very different trends. Lockdowns in the retail sector and the shift of activities to the home office reduced sales of office labels throughout Europe. "On the other hand, business with school products was excellent, also thanks to targeted online activities," Schneller explained. Production stoppages in already cyclically sensitive sectors such as automotive and chemicals reduced demand for industrial labels. In contrast, HERMA was able to further expand its role as a leading supplier of logistics labels for shippers and score points with pharmaceutical and healthcare solutions.

Thanks to its proven pharmaceutical expertise, the Labeling Machines division was also able to positively decouple itself from the general downward trend in the German mechanical engineering sector and grow by two percent: Sales rose from 52.2 million euros to 53.3 million euros. "We were able to deliver at short notice due to our modular design," explained the HERMA managing director. "This was an important advantage when production of disinfectants was ramping up rapidly in many places and labeling capacities for vaccines were already being expanded."

Schneller was also satisfied that, despite the difficult economic environment, the company had succeeded in setting the course for climate neutrality. "In 2021, we will produce pressure-sensitive materials, labels and labeling machines without leaving a carbon footprint. It is a major concern of HERMA's owners that we continue to act consistently on the issue of climate protection. Vaccination will hopefully soon put an end to the pandemic - when it comes to climate protection, on the other hand, what matters is that we all permanently question our behavior and continuously adapt it."

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