Tuesday, May 26, 2020
Danzer, a hardwood company focusing on wood from temperate forests in the Northern hemisphere reports sales of EUR 180 million in 2019; a 11% drop from sales of EUR 202 million in the year 2018. Two main drivers caused the sales decrease: the closure of Danzer’s flooring deck layer production in France and sharply declining lumber sales out of North America, due to the US-Chinese trade war. The company responded with a rightsizing of its operations and its overhead cost structure. Going forward, Danzer continues to focus on businesses for which it maintains competitive advantages.
44% of Danzer’s 2019 EUR 180 million sales originated from sliced products, 33% from sawn products; the remaining 23% of Danzer’s sales in 2019 were logs, specialties and services. In 2019, Danzer shipped products to 76 countries. The top 10 countries accounted for 76% of sales and were, in this order: USA, UK, Germany, Canada, China, Austria, Poland, Mexico, India and Slovakia. Sales to most regions remained stable or grew over 2018. Sales to China shrunk by two thirds, mostly due to lower hardwood lumber sales. In Europe, Danzer’s sales decreased as well: Classic veneer production there had been limited to profitable species that could be procured sustainably. With the closure of Danzer France, flooring deck layer production did not compensate the planned reduction of classic veneer production.
Cost-reductions
In the face of shrinking sales, Danzer streamlined operations and reduced cost throughout Europe and North America. Hans-Joachim Danzer, CEO explains: “The latest adjustments have brought Danzer in a strong position to realize our strategy: using technology for a customer-oriented and more efficient use of the valuable hardwood resource; as well as promoting hardwood products and hence use. Examples include avoiding waste by slicing instead of sawing; the use of scanners and artificial intelligence to fulfill customer requirements; and the development of new hardwood products with superior decorative or functional characteristics.” Assets and activities that do not fit are under review. Danzer’s recently sold off almost all of its forest holdings in North America.
Sales split by hardwood species
In 2019, Danzer sold more than 150 different hardwood species: 61% of the sales were North American species, 31% European, 7% African and 1% from other regions in the World. The top 10 species accounted for 83% of sales. Top three selling species were European Oak, American Walnut and American White Oak, followed by Hard Maple, European Ash, American Black Cherry, American Red Oak, Sapelli and American White Ash. Danzer continues to process all wood procured as close to the source as possible.
Outlook 2020
Danzer’s financial results in the first quarter 2020 were satisfactorily and reflected the changes made. In April 2020, Corona led to a month over month sales drop in the order of 30%. “For May, we expect sales to recover slowly”, Mr. Danzer concludes.
Tags: 11% drop, 2018, CEO, Danzer, EUR 180 million, EUR 202 miliion, Hans-Joachim Danzer, hardwood specialist, Northern hemisphere, sales, temperate forest
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