Herma: "Prepared for further imponderables" - 2021 financial year / 2022 outlook

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 wave of corona, placed a heavy burden on the HERMA Group in fiscal 2021. "The focus on our core competencies of pressure-sensitive materials, labels and labeling 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 manufacturing facilities have helped us to successfully stay on course during these turbulent times," emphasize Managing Directors Sven Schneller and Dr. Guido Spachtholz. "We have proven that HERMA can maintain its position in the market and even expand it in some areas, even under adverse circumstances. This means that HERMA is also prepared for further imponderables." Against this backdrop, Managing Directors Sven Schneller and Dr. Guido Spachtholz view the development of HERMA Group sales, which rose from 380.8 million euros to 428.4 million euros in 2021, with mixed feelings: "The 12.5 percent increase in sales 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 in part on the development of earnings, 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 increased slightly in the past fiscal year, reaching 1,124 at the end of the year (previous year: 1,106). 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, the two HERMA managing directors forecast. But the general conditions for 2022 would not get any easier: "At the moment, we cannot yet fully assess the consequences of the war against Ukraine for HERMA. Among other things, due to a strike in central paper mills in Finland that has now lasted several months, the supply situation with paper remains challenging; we hope that the situation will return to normal overall in May, or at the latest in June. Energy prices are also expected to increase significantly once again and then remain at a high level." For the current fiscal year, Schneller and Dr. Spachtholz are therefore planning for an inflation-driven increase in sales in the high single digits.

Growth in all business areas
Thanks mainly to the new production capacities, which among other things enable a stronger focus on film products, the Labelstock Business Unit was able to continue the growth trend of recent years and significantly increase external volume. Sales of 283.1 million euros represented an increase of 17.4 percent over the previous year (241.1 million euros). The Labels Division, which includes both classic office labels and school stationery as well as industrial labels, grew by a total of 2.5 percent, from 82.6 million euros in the previous year to 84.6 million euros. However, different trends emerged in the individual sub-segments. The Labeling Machines business unit benefited from its extensive expertise in the pharmaceutical and chemical sectors and grew by 6.8 percent, from 53.3 million euros in the previous year to 56.9 million euros. Other growth drivers in this area were the good development in Germany, in the subsidiary HERMA US and the service business, where HERMA is pushing the use of digital offerings.