HERMA Group reports sales growth in difficult year

Revenue increased by 5% to €380.8million last year, boosted by new coating plant and the ability to maintain full production and delivery capabilities during 2020. However, the company’s outlook remains “very cautious”.

Despite the challenging climate, HERMA pushed up sales significantly again in 2020. Business with self-adhesive materials, labels and labelling machines grew by around 5%, from €364.4million in the previous year to €380.8million.

HERMA managing directors Sven Schneller (left) and Dr. Guido Spachtholz praised the company’s considerate and engaged employees for enabling it to maintain deliveries throughout the year

HERMA managing director Sven Schneller commented: “Given conditions shaped by extensive hygiene measures in production and extensive home working, this outcome reflects the great care, tremendous flexibility and huge commitment demonstrated by HERMA’s employees. They enabled us to maintain full production and delivery capabilities throughout the year.”

As in 2019, high depreciation charges from the most recent investments in two new production facilities put pressure on earnings. “All in all, in view of the circumstances, we have reason to be satisfied. We are harvesting the fruits of our profitable organic growth strategy”, continued Mr Schneller.

Since the economic fallout from Covid 19 cannot yet be fully assessed from a global perspective and, as the impact of the Brexit deal remains uncertain, HERMA’s outlook on the current year remains ‘very cautious’, according to Mr Schneller. “We now have to focus all our efforts on re-affirming 2020’s strong sales and generating moderate single-figure growth. Sales and incoming orders in the first two months of the current fiscal year indicate that it’s an ambitious, but achievable target.” The number of employees edged up year-on-year, from 1,097 to 1,106. The export ratio increased from 61 to 62.8%.

The Self-adhesive Materials Division benefited substantially from the new coating plant in Filderstadt, which entered service in spring 2020. Its start-up enabled HERMA to distribute customer orders between two autonomous production facilities and, thus, implement especially thorough hygiene measures. Sales rose by 8% year-on-year, from €223.7million to €241.1million.

“Looking ahead, the new plant also gives us every opportunity to expand further in particularly lucrative product segments”, remarked newly-appointed Dr Guido Spachtholz. He became managing director at the start of 2021 following the planned retirement of Dr Thomas Baumgärtner after 16 years with HERMA.

Business in the Labels Division, where sales fell slightly from €84.5million to €82.6million, was shaped by highly-contrasting trends. Retail lockdowns and the shift to home working reduced the volume of office label sales across Europe. “On the other hand, school products performed exceptionally well and were bolstered by targeted online activities,” commented Mr Schneller. Production stoppages in cyclical business sectors, such as automotive and chemicals, curtailed the demand for industrial labels. Conversely, HERMA expanded its role as a leading supplier of logistics labels for shippers, and recorded good figures with pharmaceutical and healthcare solutions. Thanks to its proven skills in the pharma segment, the Labelling Machines Division likewise resisted the general downward trend in machine building in Germany, and grew by 2%. Its sales climbed from €52.2million to €53.3million.

“Our modular design concept allowed us to deliver to short deadlines”, explained the HERMA managing director. “This gave us a major advantage, as disinfectant production was speedily ramped up and vaccine labelling capacities were expanded.”

Mr Schneller also expressed his satisfaction with success in putting the company on course to reach its climate-neutral target despite the difficult economic situation. “In 2021, we will be producing adhesive materials, labels and labelling machines with a zero-carbon footprint. HERMA’s owners are eager for us to sustain our rigorous pursuit of action to protect the climate. It is hoped that vaccinations will soon put an end to the pandemic, but protecting the climate depends on everyone permanently questioning and continuously modifying their behaviour.”