Photo: Blum
Blum ended its 2022/23 fiscal year with a drop in sales of 12 per cent compared to the previous year.
Following a period of above-average growth, this was a foreseeable development that had been expected by managing directors Martin and Philipp Blum. The fittings specialist will continue to focus on innovations, investments and its employees.
The Blum Group recorded sales of 2,3 billion euros this fiscal year, a reduction of 317 million euros over the previous year. Philipp Blum, managing director of the Blum Group says that after a period of strong investments in home improvements, “we have been observing a turning of the tide since autumn 2022. High levels of inflation, rocketing prices and the global energy crisis have generated a feeling of immense uncertainty among end users.“This translates into restrained purchasing behaviour."
He said in addition to the challenging market environment, the cost of raw materials, energy and human resources remains high. China's strict COVID policy lasting almost a year and the cessation of deliveries to Russia have also slowed down business.
"After two years of above-average growth, the drop in turnover was a foreseeable development. We were expecting a downturn, however the speed at which it happened was surprising for us. Although we need to adapt to this challenging situation, we are sticking to our basic strategy," says Philipp Blum.
"Our long-standing corporate philosophy and values will remain our compass; we will continue to focus on close customer relations, innovation and the further development of our 9,330 employees across the globe," says managing director Martin Blum.
An insight into international markets
The effects of inflation and uncertainty during the course of the past financial year were felt in the European markets in particular. Turnover was stable in the Asia Pacific region with the exception of China. North American markets are developing satisfactorily, especially in the U.S. where economic conditions are more robust than in Europe. After two years of strong momentum in the furniture industry, fittings manufacturers are now experiencing the downswing: "The drop in orders is challenging and we need to prepare for another difficult year. We have taken on the challenge and believe that markets will recover in the medium term," says Philipp Blum.
Investing in the future
In the meantime, Blum continues to make large investments in its premises in Vorarlberg and around the world. The total volume in the past 2022/2023 financial year amounted to 390 million euros, 255 million of which was spent in Vorarlberg. Over the next few years, 52,000 sq. metres (560,000 sq. ft) of production and storage space for more than 16,000 pallets will be created at the main site in Vorarlberg. Blum will complete Plant 6 in Gaissau this summer, 2023. The extensions to Plant 2 in Hoechst and Plant 4 in Bregenz are also coming along nicely. After three years of building work, the Chinese production site in Shanghai was inaugurated in March.
Blum is also currently evaluating potential sites for a plant in eastern Austria in order to create additional capacity for the production of box systems. The new facility could be up and running in about four to five years' time at the earliest. For Martin Blum, one of the most important investments in the future is training young people at the company. "Our up-and-coming skilled workers will safeguard our future," he says, highlighting apprenticeships as an important factor for success.
And Blum continues its commitment to invest in innovations and with 79 new applications filed, Blum came second in the rankings of the Austrian Patent Office in 2022.
