Despite a challenging market, Homag Group managed to achieve its targets for 2024. Order volumes remained at the previous year’s levels, while revenue declined by 13 percent, as expected. Profits dropped significantly but remained at the upper end of expectations.
Cost containment and a solid service sector contributed to this positive result. According to preliminary data, in 2024 Homag recorded an order volume of 1,357 million euros, in line with 2023 (1,395 million euros). “There was no significant improvement in demand in 2024, but we managed to stabilize our order intake“, explains ceo Daniel Schmitt, who also emphasized that while the furniture industry remained cautious in investing in single machines, the project sector, particularly in timber construction, performed well.
The company was affected by the gradual depletion of backlogged orders accumulated in previous years, which was reflected in the decline in revenue, down to 1,413 million euros from 1,625 million euros in 2023. The order backlog also decreased, standing at 781 million euros at the end of the year (compared to 841 million euros in 2023).
To counter the decline in sales, Homag implemented flexibility and cost-cutting measures, including reduced working hours and a reduction in workforce. “We have substantially completed the package of measures to adjust production capacity and improve efficiency, launched in the fourth quarter of 2023, which included cutting around 600 jobs worldwide. In Germany, this reduction was achieved without layoffs for economic reasons“, Schmitt points out. The number of employees fell from 7,482 in September 2023 to 6,802 by the end of 2024.
On the profitability front, Ebit, net of extraordinary effects, declined to 50.8 million euros from 129.7 million euros in the previous year. However, according to the ceo, the results align with expectations thanks to cost reductions: “With the savings achieved, we are at the upper end of our own expectations in terms of earnings. The service business, which grew slightly despite the weak market, also made a positive contribution to earnings“.
Looking ahead, Homag does not foresee a recovery in demand before the second half of 2025 and estimates that revenue for the current fiscal year will be in line with 2024. “Our goal is to increase earnings again in 2025, as cost reductions will take full effect for the first time, and we want to further grow service revenue“, Schmitt concludes.
