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HOMAG Group cautiously optimistic, poised for slow recovery

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HOMAG Group CEO Pekka Paasivaara


The HOMAG Group has seen its order intake and sales revenue decline significantly in the first half of 2020.
Since June, however, the Group has recorded a slight increase in customer activity in most countries.
"As expected, the period of worldwide lockdowns has had an impact on our half-year figures," says CEO Pekka Paasivaara.
"However, we are cautiously optimistic that the markets have bottomed out in the second quarter."
In the first six months of 2020, HOMAG Group's sales revenue dropped by 13 per cent to EUR 552 million (prior year: EUR 637 million) and order intake by 17 per cent to EUR 493 million (prior year: EUR 591 million). The order backlog as of June 30, 2020 stood at EUR 480 million (Dec. 31, 2019: EUR 546 million). In the first half of 2020, the HOMAG Group generated operating EBIT of EUR 10.7 million (prior year: EUR 39.4 million). As of June 30, 2020, the Group employed 6,498 people (June 30, 2019: 6,592).
Thanks to stable supply chains, the HOMAG Group has been able to maintain production. However, customers have been very reluctant to invest.
"Demand in the first half of the year was very moderate, particularly in the project business with large-scale plants,” says Paasivaara.
“Although we are seeing the beginning of a recovery in customer activities, we are still far from the pre-crisis level. From today's perspective, we expect the market environment to improve slightly in the second half of the year. Nevertheless it remains difficult to predict the start of a real upturn."
Despite the challenging situation, the HOMAG Group made important investment decisions in the second quarter to ensure a successful future. With the acquisition of the remaining 75 per cent of the shares in its long-term sales and service partner in China, the company has put itself in an even better position for the expected market growth in China.
The remaining 24 per cent of the shares in WEINMANN Holzbausystemtechnik GmbH, the Group's expert for timber construction, were also acquired. This way, the HOMAG Group is strengthening its commitment to the solid wood sector.

 

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