"Prepared for further imponderables"

13.04.2022 Dramatic price increases for raw materials, strained supply chains and material bottlenecks coupled with growing demand, as well as difficult production conditions during the fourth corona wave, have placed a heavy burden on the HERMA Group in the 2021 financial year.

HERMA managing directors Sven Schneller (left) and Dr Guido Spachtholz.
© Photo: HERMA
HERMA managing directors Sven Schneller (left) and Dr Guido Spachtholz.

"The focus on our core competencies of pressure-sensitive materials, labels and labelling machines, the continued concentration on sustainable growth, the pronounced commitment and flexibility of our employees and, last but not least, the investments made in recent years in new production facilities have helped us to successfully stay on course during these turbulent times," emphasise managing directors Sven Schneller and Dr Guido Spachtholz. "We have proven that HERMA can maintain its position in the market even under adverse circumstances and even expand it in some areas. This means HERMA is also prepared for further imponderables."

Mixed feelings

Against this background, Sven Schneller and Dr Guido Spachtholz view the development of the HERMA Group's sales, which rose from €380.8M to €428.4M in 2021, with mixed feelings: "The increase in sales of 12.5 percent is largely the result of an increase in sales volumes, but is also partly the consequence of significantly higher raw material costs, for example for paper, and therefore unavoidable sales price increases in the areas of adhesive materials and labels. The difficult procurement situation had a negative impact on the development of the result, which nevertheless increased. We are proud of the fact that, despite this difficult materials situation, HERMA has by and large succeeded in remaining able to deliver." The number of employees rose slightly in the past fiscal year, to 1124 at the end of the year (previous year: 1106). The export ratio remained almost stable at 62.5 percent compared to 62.8 percent in the previous year.

Due to further catch-up effects as the corona pandemic subsides, demand is likely to remain stable for the time being, forecast the two HERMA managing directors. But the general conditions for 2022 would not be any easier: "We cannot yet fully assess the consequences of the war against Ukraine for HERMA at the moment. Among other things, the supply situation for paper remains challenging due to a strike in central paper mills in Finland, which has now lasted several months; we hope that the situation will return to normal in May, or at the latest in June. Energy prices are also likely to increase significantly once again and then remain at a high level." For the current business year, Schneller and Dr Spachtholz are therefore planning for an inflation-driven increase in turnover in the high single-digit range.

Growth in all business areas

Thanks primarily to the new production capacities, which among other things enable a stronger focus on film products, the Labelstock Division was able to continue on the growth course of recent years and significantly increase its external volume. Sales of €283.1M represented an increase of 17.4 percent over the previous year (€241.1M). The Labels division, which includes both classic office labels and school supplies as well as industrial labels, grew by a total of 2.5 percent, from €82.6M in the previous year to €84.6M. However, different trends emerged in the individual sub-segments. The Labelling Machines division profited from its extensive know-how in the pharmaceutical and chemical sectors and grew by 6.8 percent, from €53.3M in the previous year to now €56.9M. Other growth drivers in this area were the good performance in Germany, in the subsidiary HERMA US and the service business, where HERMA is pushing the use of digital offerings.