TRUMPF Reports 8% Fiscal Year-End Sales Decline

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DITZINGEN, Germany, Oct. 14, 2020 — TRUMPF recorded a fiscal year 2019-2020 (ending June 30, 2020) decline in sales revenue of 8%, to €3.5 billion, compared to €3.8 billion for fiscal year 2018-2019. The company’s order intake fell to €3.3 billion, down €0.4 billion year over year, representing a drop of 11%. TRUMPF sales revenues exceeded incoming orders by €210 million.

At €309 million, the group’s operating earnings before interest and taxes (EBIT) also declined in line with sales and fell by 11.5% compared to fiscal year 2018-2019 (€349 million). Due to the scaling back of capital expenditure and nonpersonnel costs as well as efficiency improvements, the company reported an overall return of 8.9%, down from the previous year’s 9.2%.

“We have been experiencing a slowdown in the global economy since fall 2018,” Nicola Leibinger-Kammüller, chair of the Group Management Board of TRUMPF, said. “Coronavirus has further intensified the decline, as a crisis within a crisis. However, our sales revenues fell much less than in the mechanical engineering sector as a whole. In addition, consistent cost management allowed us to keep the return almost at the previous year’s level.”

Commenting on the outlook for fiscal 2020-2021, Leibinger-Kammüller said, “The decline in sales revenues and new orders was halted in the first three months. We see cautious signs that the economic downturn is coming to an end, although there is still no upturn.” 

Largest single markets
TRUMPF’s three largest markets worldwide in fiscal year 2019-2020 were Germany (sales revenue of €610 million); the U.S. (sales revenue of €490 million); and the Netherlands (sales revenue of €480 million). TRUMPF supplies its Dutch customer ASML with special lasers for systems that use extreme ultraviolet radiation (EUV) to expose surfaces of chips for the computer industry, and the company again in this area increased sales revenues by 19%, from €388 million in the previous year to €460 million . As a result, EUV contributed almost as much to group sales as TRUMPF’s entire U.S. subsidiary, the company said.

In fourth place was China with €350 million. In many European core markets such as Italy and Spain, as well as in Eastern Europe, TRUMPF reported falling sales revenues, in some cases by double digits, as a result of the weak global economy and the coronavirus shutdown.

Investments and acquisitions
TRUMPF cut investments by 33% to €194 million, compared to €288 million in the previous year. TRUMPF, in the fiscal year, took over Aixtooling through its subsidiary INGENERIC (effective July 2019), and in October 2019, TRUMPF Photonics in the U.S. acquired a 100% stake in Stellar Industries. In December 2019, TRUMPF acquired a minority stake in French laser technology startup GLOphotonics; in January 2020, it acquired HBH Microwave.

TRUMPF R&D costs amounted to €377 million, compared with €396 million in fiscal year 2018-2019. In relation to the decline in sales revenues, the R&D ratio increased to 10.8%, up 0.3% from the previous year.

Changes, Appointments, and Partnerships
Effective Oct. 1, TRUMP appointed Oliver Maassen, former head of human resources, as a member of the Group Management Board with responsibility for human resources. Before joining TRUMPF, Maasen worked for the consulting company Pawlik and was responsible for human resources at HypoVereinsbank/UniCredit.

In October 2020, a new smart factory, in which TRUMPF invested €6 million, will open at the group's headquarters in Ditzingen. There are now 30 networked machines on an area of 5000 sq. m. The new smart factory is open to customers, and together with the smart factories in Chicago and in Taicang, China, TRUMPF said it is now represented with factories in all major markets.

TRUMPF is also breaking new ground on business models. With the re-insurance company Munich Re Group, TRUMPF signed a strategic partnership for laser cutting machine distribution, enabling customers to use full-service laser machines for sheet metal processing without having to buy or lease the machines. Customers instead pay a previously agreed price for each cut sheet metal part, also known as the pay-per-part model. The Munich Re Group will finance the machine, and its subsidiary Relayr will facilitate the financing model using data analyses. TRUMPF will supply the machines, software, and services for manufacturing the sheet metal components. The operational headquarters of the project will be at the TRUMPF site in Neukirch, Saxony, Germany.

In its annual report released Oct. 14, TRUMPF, citing data from the German Machine Tool Builders’ Association (VDW), said it expects a drop in orders of 30% in 2020, and a year-over-year decrease in production of 31%. The company said it expects a slight decline in order intake in the next fiscal year compared to 2019-2020.

“With regard to our two business divisions, Machine Tools and Laser Technology, we do not expect the current difficult market situation to recover in the coming fiscal year,” the company stated in its annual report. “In contrast, our forecasts for the EUV, Electronics, and Additive Manufacturing business fields are optimistic. We anticipate a further significant increase in sales revenues in EUV lithography for coating microprocessors.”

Full information is available in TRUMPF’s 2019-2020 annual report, A World in Transition. 

*€1 million = $1.18 million U.S. 

Published: October 2020
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