29 October 2009

Trumpf expects transition year

The Trumpf Group closed out the past fiscal year with a profit despite the massive collapse in the world economy, announced Trumpf President Nicola Leibinger-Kammüller during the company's annual press conference held at its Ditzingen headquarters. During the 2008/2009 fiscal year, the company posted an income before taxes of 52.2 million Euros – although sales declined by 22 percent to 1.66 billion Euros. "This double-digit profit demonstrates the performance capacity of our company and that we implemented the right measures very quickly," said Leibinger-Kammüller.

Nevertheless, the global financial crisis caused sales declines in almost all of Trumpf's business fields. In the current fiscal year, Trumpf is continuing to operate with caution. "The situation in the global manufacturing industry and even in our company remains tense. Though we have identified an economic upswing in individual markets, and there are signs that order declines may be slowing, we still do not see the situation improving greatly," said Leibinger-Kammüller.

A decisive factor for this fiscal year will be liquidity. "We began building up sufficient financial reserves early on to guarantee the company's liquidity," she pointed out. In addition, the equity ratio in the last fiscal year rose from 49 percent to 53 percent. The managing partners increased liable equity capital by 75 million Euros.

In the 2008/2009 fiscal year that ended June 30, 2009, the Group posted a 35 percent decline in orders received to 1.4 billion Euros. Sales fell from 2.14 to 1.66 billion Euros. The only business division that saw any growth was the Medical Technology Division whose sales rose 11 percent. Both of Trumpf’s major business divisions were affected by global investment restraint: Sales for machine tools and power tools fell 29 percent, and sales in laser technology and electronics fell 24 percent. The German company recorded the strongest declines in Eastern Europe and the Pacific Rim. Declines were more moderate in Germany and in the USA.

Trumpf confronted these tough economic conditions early on and with massive efforts. First and foremost, the company initiated a comprehensive innovation campaign in all business fields. The company reduced its costs worldwide and adjusted work capacities in production and administration to the drop in demand, mainly by depleting overtime hours in flexitime accounts and introducing short-time work. This allowed the number of employees to remain almost constant both at home and abroad. At the end of the fiscal year, the Group had a workforce of 7,955 employees.

The new fiscal year has been deemed a transition year. "We are positioning Trumpf as best as we can for the period after the crisis," said Leibinger-Kammüller, describing the company's current goal. Therefore, the company intends to continue investing, budgeting 80 million Euros for new machines, plants and buildings. In the last fiscal year, fixed asset investments totaled 126 million Euros, half of which was was spent in Germany. Expenditures for research and development is also expected to remain high. Last year, Trumpf allocated 9.3 percent of its sales – 155 million Euros – to R&D. In the next few weeks, Trumpf will introduce innovations for production at various trade shows.

"The current fiscal year will definitely not be easy, but we will survive it," said Leibinger-Kammüller. The company is well positioned to respond quickly and effectively to a variety of developments and trends. The flexible structures, high liquidity and strong equity capitalization are excellent tools for riding out the tough times.

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