The HOMAG Group continues to feel the effects of the customers’ reluctance to invest. Sales and earnings decreased in the first half of 2024. The job cuts in Germany announced at the end of 2023 could be achieved entirely on a voluntary basis without operational layoffs.
“As expected, the first half of 2024 has not yet brought a recovery in our industry,” says CEO Dr. Daniel Schmitt. “The weak demand from the furniture and wood construction industries has persisted and is reflected above all in the low level of single machine business.” In the first six months of 2024, the HOMAG Group’s order intake increased only slightly by four percent to 699 million euro compared to the low figure of the previous year (671 million euro), with the second quarter being particularly subdued. The order backlog decreased to 833 million euro as of June 30, 2024, from 930 million euro for the same period last year.
The persistent market weakness since the second half of 2022 is also reflected in sales, which fell by 14 per cent to 706 million euro in the first half of 2024 (previous year: 817 million euro).
In contrast, sales in the service business developed positively. In this area, various initiatives led to an increase of around four percent. EBIT before extraordinary effects decreased to 21.5 million euro (previous year: 56.8 million euro).
“As a result of this pronounced and prolonged market weakness, we initiated a package of measures in November 2023 to adjust capacity and increase efficiency,” says Schmitt. “Our earnings performance this year shows how important it is to implement these measures in order to secure the future of the HOMAG Group and maintain our competitiveness in the long term. A key element of the program was the reduction of approximately 600 jobs worldwide, of which around 350 were in Germany. Here, we were able to achieve the goal through natural fluctuation and a hiring freeze as well as a volunteer program. We have thus avoided layoffs for operational reasons.”
In the current year, the capacity reduction is expected to cut fixed costs by 25 million euro with the full savings of 50 million euro kicking in next year.
