HELLER back on course for growth

By: Marcus Kurringer

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It seems that the global economy has bottomed out. After an unprecedented 60% slump in 2009, Germany’s metal-cutting machine tool industry has experienced a 93% increase in order intake in 2010.

HELLER also posted a significant gain in order intake of 70% (2009: -56%) to EUR 392m. However, the year 2010 was characterised by significant fluctuations in order intake. “After an initially sluggish development due to the cautious investment behaviour of our domestic and international customers following the crisis, order intake gained significant momentum from mid-2010 onwards,” says Chairman and Managing Director Klaus Winkler. We received approx. 37% of all orders (EUR 144m) in the year’s fourth quarter.

Again, the geographical distribution of orders received clearly shifted to overseas markets in 2010. Approx. 50% of orders came from Germany and the rest of Europe, whilst 25% came from Asia, especially China, but also India and North and South America, respectively.

“In Asia and North America project business, especially in terms of expansion investments, has played a major role for us”, explains Winkler. Many customers are launching new engines and transmissions providing low emissions and high fuel efficiency. In Europe and South America, project business and single-machine sales clearly recovered during the second half of the year in the individual submarkets.

Traditionally, the machine building industry is the second most important customer group for HELLER after the automotive industry. In 2010, HELLER diversified into new customer segments including aerospace and mould & toolmaking. Recent developments in our product portfolio combined with innovative and efficient technologies, such as gear milling and simultaneous 5-axis machining have provided interesting technological manufacturing solutions for many sectors and industries dealing with metal-cutting applications.

At EUR 339m, turnover in 2010 was approx. 10% below that of the previous year. Business with new machines accounted for 75% of sales and after-sales business for 25%.

The sales trend in 2010 was still strongly impacted by the effects of the crisis with a very weak start at the beginning of the year following the slump in sales in 2009. As a result, the company had to deal with low utilisation and extensive reductions in working time. Approx. 70% of the annual turnover (EUR 235m) were generated in the second half of the year. At the same time, production output increased again by 15% year on year. Despite incurring considerable restructuring costs, HELLER managed to get back in the black in 2010.

“The year 2010 was also characterised by further expansion of our international operations”, says Winkler. The opening of a TechnologyCentre in Pune/India in the middle of June 2009 was followed by the founding of HELLER India in 2010. Since autumn last year, HELLER also has a presence in Yekaterinburg/Russia. Winkler adds: “We have been represented in Scandinavia for quite a number of years now. By founding a cooperative venture we aim to strengthen our partnership and expand our European service network.”

 

Outlook 2011

HELLER continues to focus on success factors

Having mastered the financial and economic crisis and following a first turbulent catching-up process we expect to see stronger growth in order intake in the coming months. Domestic and foreign demand are equally contributing to growth by now. Overseas business is expected to hold a share of at least 50% again. As a result, we will see higher and more consistent utilisation of the installed capacities. In 2011, we expect to generate a sales revenue of min. EUR 400m despite staff cutbacks of 14% and a total of approx. 2,150 employees worldwide. As a result, we need to be more flexible in terms of our global corporate structure and business processes. There is no doubt that the machine building industry will continue to be subject to cyclical developments in the future.

With an order intake of EUR 150m in the first quarter of 2011, we have been able to continue the positive development started in the second half of the previous year. However, at approx. EUR 75m, turnover still lags behind previous results.

Winkler summarises: “We are well-placed to successfully master the tasks of the years ahead and take on a consistent and systematic approach to these developments. As the crisis comes to an end, our product portfolio has been totally revised and updated. We will continue and intensify our development efforts and the refinement of our products with regard to the constantly changing requirements of our customers in the automotive and non-automotive industry. To achieve this goal, HELLER is combining cutting-edge machine technology with a high level of solution competence from extensive technical consulting through to turnkey production systems offering comprehensive solutions to our customers. We will cater to the needs of the growing markets in Eastern Europe and overseas with investments helping to enhance customer proximity. Two of the regions in our focus will be Russia and China. With the construction of an assembly plant in the Shanghai area we hope to send a clear message to the Asian market.”

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