The HOMAG Group continues to experience the impact of customers’ investment hesitancy, resulting in decreased sales and earnings in the first half of 2024. The job cuts in Germany, announced at the end of 2023, were successfully implemented entirely on a voluntary basis, avoiding any operational layoffs.
“As expected, the first half of 2024 has not yet brought a recovery in our industry,” emphasises CEO Dr. Daniel Schmitt. “The weak demand from the furniture and wood construction industries has persisted and is reflected above all in the low level of single machine business.” Dr. Daniel added.
In the first six months of 2024, the HOMAG Group’s order intake increased only slightly by four percent to EUR 699 million compared to the low figure of the previous year (previous year: EUR 671 million), with the second quarter being particularly subdued. The order backlog decreased to EUR 833 million as of June 30, 2024 (6/30/2023: EUR 930 million).
“As a result of this pronounced and prolonged market weakness, we initiated a package of measures in November 2023 to adjust capacity and increase efficiency,” explains Dr. Schmitt. “Our earnings performance this year shows how important it is to implement these measures in order to secure the future of the HOMAG Group and maintain our competitiveness in the long term. A key element of the program was the reduction of approximately 600 jobs worldwide, of which around 350 were in Germany. Here, we were able to achieve the goal through natural fluctuation and a hiring freeze as well as a volunteer program. We have thus avoided layoffs for operational reasons.” Dr. Schmitt concluded.
In the current year, the capacity reduction is expected to cut fixed costs by EUR 25 million; from 2025, the HOMAG Group expects to realide the full savings effect of EUR 50 million.
The ongoing market weakness since the second half of 2022 is evident in the sales figures, which declined by 14% to EUR 706 million in the first half of 2024 (compared to EUR 817 million in the previous year). In contrast, sales in the service sector showed positive development, with various initiatives driving a growth of approximately four percent. EBIT before extraordinary effects dropped to EUR 21.5 million (from EUR 56.8 million the previous year).
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