According to preliminary figures released by the group, Homag increased its turnover in 2023 to EUR 1,625 million (previous year: EUR 1,602 million) from the very high figure of the previous year. “We benefited from the high order backlog at the beginning of the year, which we gradually disposed of. The service sector also recorded growth,’ explained CEO Daniel Schmitt. While turnover increased, the order backlog consequently decreased to EUR 841 million as at 31 December 2023 (31 December 2022: EUR 1,102 million).
The slight increase in turnover is also reflected in the profit before special effects, which increased by about four per cent to EUR 129.7 million (previous year: EUR 124.8 million). The group attributes this increase, among other things, to efficiency improvements achieved in previous years and cost reductions in response to the market downturn.
Despite a major order from China at the end of the year, orders for 2023 decreased significantly by around 18 per cent to EUR 1,395 million (previous year: EUR 1,706 million) compared to the previous year, which was still characterised by the particular economic situation in the furniture industry due to the pandemic. “We are dealing with a marked cyclical weakness in the market, which has resulted in a sharp drop in orders,” Schmitt continues. ‘Weexpected a slowdown in the furniture sector, but hoped for a better performance in the wooden house sector. The sharp rise in interest rates has led to a crisis in the construction industry, which has significantly slowed down investments in the production technology of timber construction elements.”
“TheHomag Group,” the group explained in the press release, ” reacted to the weakness in orders in November 2023 with a package of capacity adjustment measures to avoid losses in the current year. The key element is the reduction of around 600 jobs worldwide in order to reduce fixed costs by EUR 25 million initially and by a total of EUR 50 million annually from 2025 onwards. Extraordinary expenses for this amounted to just over EUR 50 million and were largely accounted for in Q4 2023. As a result, EBIT after extraordinary effects fell to EUR 71.1 million (previous year: EUR 107.5 million).”
“We donot expect a general market recovery before the end of 2024 and, in the current outlook, we expect order intake in the current fiscal year to be at most at the previous year’s level,” Schmitt concludes. “Due to the continued weakness in orders, we anticipate a sharp decline in sales and earnings. Our capacity adjustment measures aim to sustainably increase our flexibility, so that future market fluctuations will have less of an impact on profits.”
