Order Backlog with slight increase
First quarter 2020 at a good level
Despite the corona pandemic, the HOMAG Group’s first quarter of 2020 was at a good level. Production was almost without interruptions at all major plants. Nevertheless, in March the first effects of the corona pandemic became apparent. The acquisition of the sales & service partner in China was completed.
HOMAG Group's sales revenue in the first three months of 2020 amounted to EUR 290 million, down nine percent on the prior-year period (EUR 319 million). Order intake also fell by nine percent to EUR 304 million (prior year: EUR 335 million). The order backlog stood at EUR 556 million as of 31 March 2020 and was slightly higher than at the end of 2019 (December 31, 2019: EUR 546 million). In the first quarter of 2020, the HOMAG Group generated operating EBIT of EUR 16.1 million (prior year: EUR 20.5 million). As of March 31, 2020, the Group employed 6,613 people (March 31, 2019: 6,633).
CEO Pekka Paasivaara explains: "We have made a good start to the year and in January and February our order intake was noticeably higher than in the previous year. However, in March the corona pandemic had a significant impact on us, as it did on the entire industry. Despite this currently challenging situation, we acquired the remaining 75% of the shares in our long-term sales and service partner in China at the beginning of May. We are thus investing in our global presence and are very well positioned for the expected market growth in China.
The HOMAG Group has been able to maintain production to a large extent even during the crisis. "We could keep our supply chain stable," says Pekka Paasivaara. "Our hygiene measures are taking effect and I am very proud of how disciplined and responsible our employees deal with this challenging situation. As a result, we are able to keep up our operative processes".
Contact with customers also remained stable overall, as Paasivaara continues to explain. "We see a very dynamic development globally, with partially significant differences in the individual countries and regions. But in all markets we can support our customers with our digital tools and communication channels. This includes, for example, virtual planning with the digital twin or our wide range of service apps." Nevertheless, the reluctance of customers to invest is clearly noticeable. For the time being, the HOMAG Group expects the market to remain cloudy, which will lead to a significant year-on-year decline in order intake, particularly in the second quarter of 2020. A gradual recovery is expected in the second half of the year.
The HOMAG Group is the world's leading provider of integrated solutions for production in the woodworking industry and woodworking shops. Its 14 specialized production sites, about 20 Group-owned sales and service companies and approximately 60 exclusive sales partners worldwide make the company a unique system provider. Backed by a workforce of some 6,600 employees the HOMAG Group offers its customers solutions for digitized production, based on digital data continuity from point of sale through the entire production process, combined with a comprehensive software suite. In addition, the open ecosystem "tapio" (open Internet-of-Things platform) maps the data flow along the entire value chain of the timber industry. The HOMAG Group has been majority-owned by the Dürr Group since October 2014.
This press release contains certain statements relating to the future. Futureoriented statements are all those statements that do not pertain to historical facts and events or expressions pertaining to the future such as “believes”, “estimates”, “assumes”, “forecasts”, “intend”, “may”, “will”, “should” or similar expressions. Such future-oriented statements are subject to risks and uncertainty since they relate to future events and are based on current assumptions of the Company, which may not occur in the future or may not occur in the anticipated form. The Company points out that such future-oriented statements do not guarantee the future; actual results including the financial position and the profitability of the HOMAG Group as well as the development of economic and regulatory framework conditions may deviate significantly (and prove unfavorable) from what is expressly or implicitly assumed or described in these statements. Even if the actual results of the HOMAG Group including the financial position and profitability as well as the economic and regulatory framework conditions should coincide with the future-oriented statements in this press release, it cannot be guaranteed that the same will hold true in the future