|   Schopfloch

HOMAG Group feeling customers' reluctance to invest

Schopfloch, November 7, 2019. The HOMAG Group's sales revenues increased slightly in the first nine months of 2019. The world's leading provider of integrated solutions for production in the woodworking industry and woodworking shops is, however, seeing lower order intake than in the same period of the previous year. This reflects the weaker economy, which is leading to customer reluctance to invest throughout the entire industry.

The HOMAG Group slightly increased its sales revenues to EUR 957 million in the first three quarters of 2019 (prior year: EUR 937 million). At EUR 907 million, order intake was below the high level of the prior year (EUR 1,047 million) and the order backlog was EUR 560 million as of September 30, 2019 (September 30, 2018: EUR 666 million). Operating EBIT fell to EUR 58.5 million (previous year: EUR 65.2 million).

The key reasons for this were falling margins as a result of the decreasing market volume, under-utilization and increasing personnel costs. As of September 30, 2019, the HOMAG Group employed 6,615 people (September 30, 2018: 6,605).

“Our customers' reluctance to invest is naturally noticeable in order intake this year,” explains CEO Pekka Paasivaara. “Particularly in China and also in Germany, demand is moderate.”

As reported, the HOMAG Group is positioning itself for the future with a package of measures. Its core point is optimization of the production structure including adjusting production capacity. The package includes shutting down production at the Hemmoor site and further structural measures to increase efficiency. At the same time, the company will consistently invest in digitalization, innovative products, modern IT systems and efficient production.

Disclaimer

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.

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