- With its three divisions Self-Adhesive Materials, Labels, and Labelling Machines,has grown by 6.5 per cent, posting record sales of 342.3 million euros.
- For 2018, the company aims at another plus of just under four percent: “That is bold and challenging, but achievable.”
- To safeguard further growth, HERMA is looking to hire nearly 100 new employees, and will begin commissioning further production capacities at its new location in 2018.
Sales of Self-Adhesive Materials, Labels, and Labelling Machines are continuing on a positive trend: HERMA has once again posted record sales for the 2017 fiscal year, outgrowing the market. Revenues increased by 6.5 percent from 321.5 million euros to a new total of 342.3 million euros. The outlook is positive in all other aspects. According to managing directors Sven Schneller and Dr. Thomas Baumgärtner, HERMA will therefore create just under 100 new jobs – predominantly in development, production, and sales. “Actually finding these new employees is a prerequisite for fully using our growth opportunities”, say both managing directors. Creating new production capacities is just as important. At the end of this year, the new plant for the growing Labelling Machines Division at the headquarters in Filderstadt will be commissioned as scheduled. The Self-Adhesive Materials Division, which is also growing at a fast rate, will start its new production facilities in autumn 2019 according to plan. They are currently being built on the eight-hectare area directly adjacent to the company’s headquarters that the self-adhesives specialist bought three years ago. The number of employees in the HERMA group as a whole has already somewhat increased in 2017: as of December 31, 2017, it was 993 (in the previous year: 966).
Resource shortages put earnings under pressure
Until the end of next year, HERMA will invest a total of 100 million euros in production technology and buildings at their headquarters. With that in mind, both HERMA managing directors regard the earnings performance with increasing concern. While they are content with 2017, the future is overshadowed by dark clouds. “On the one hand, due to exchange rate effects, we are struggling with diminishing returns in euros in the UK. In this market, which is very important for us, we continue to face great uncertainties regarding Brexit. Besides, we are currently registering almost inflationary price increases for important resources such as cellulose which we cannot fully pass on to customers”, say both HERMA managing directors. “This situation will hardly improve over the next years, since the boom in many emerging markets has caused real resource shortages.”
Internationalization strategy continues to bear fruit
On the other hand, HERMA profits from the strong economy in many important business regions: the export ratio is virtually constant at 60%. Not least due to a long-term internationalization strategy, the Self-Adhesive Materials Division has again managed to exceed the positive market development. Sales of the raw materials for label production increased by 5.9 per cent from 192.8 million euros to 204.1 million euros. In Germany and Europe, HERMA was able to gain market shares in this field. Online commerce growth rates that were often in the double digits – which in turn caused an increasing demand for logistics labels –provided a boost for the Labels Division. Combined with a good development in the school products business, sales in this division increased by 4.8 percent from 81.6 million euros to 85.5 million euros. The Labelling Machines Division made the biggest leap: it grew by 16.4 percent from 42.8 million euros to 49.8 million euros. In addition to the continued internationalisation strategy, supplying complete labelling modules in large quantities to manufacturers of complete packaging plants was a growth driver for this division.
For next year, the HERMA managing directors aim at a sales increase of four percent. “That is both bold and challenging, and will certainly require great efforts. But in view of a continuing favourable global outlook, it should be achievable”, affirm Sven Schneller and Dr. Thomas Baumgärtner.