Business News
Winkler+Dünnebier on Track for Sales of 100 Million Euros
Friday 29. August 2008 - Sharp rise in incoming orders and orders on hand
Following their very successful participation at Drupa, a print and media trade fair, and the acquisition of the Langhammer mechanical engineering company, the Winkler+Dünnebier Companies (W+D) expect sales in the current financial year to top 100 million. The Neuwied, Germany-based manufacturer of specialized equipment has thus set itself a target for year-on-year sales growth of more than 10 percent. This is based on an appreciable rise in incoming orders and orders on hand. Incoming orders at the W+D Companies, in fact, rose by 80.3 percent to 66.7 million, while orders on hand climbed by as much as 163 percent to 62.4 million.
With sales concentrated in the second half, as is typical for the industry, the first half generated sales of 40 million. This represents a year-on-year increase of 3.3 percent. The expansion of the consolidated companies due to acquisitions benefited the domestic segments in particular, which saw a strong improvement of 8.3 percentage points to 28.5 percent of total sales. The Europe region, excluding Germany, also gained 8.1 percentage points, amounting to 37.8 percent. The distorting effect of the weak US dollar on competition and the feeble U.S. economy, which has been plagued by the financial crisis, led the North America share to drop to 18.8 percent of total sales.
In the core business of envelope machines, the trend toward market stabilization was confirmed in the course of the first half. Dietmar Kurz, chairman of W+Ds management board summed it up thus: “After the market consolidation during the recent years, the Drupa trade show demonstrated that there is now a growing interest in new investments. Thats what the message has been from several new customer contacts, too. By contrast, this was met by a disappointing response in the U.S., because, in addition to the exchange rate, the depressed economy has stifled the investment climate there.”
The concentration of deliveries in the second half resulted in a strong growth of total output, which climbed by 19.8 percent to 48.7 million. The change in the cost structure in the first half was mainly driven by volume and acquisitions. In line with changes in sales, operating results declined year-on-year by 1.5 million to -3 million. In this context, the factors to be highlighted as lowering results are, first, the weak dollar, which is reflected in the calculation of revenue at 0.8 million, but also the concentration of important trade shows in the first half. The result after financing activities and taxes was a net loss for the period of -4 million.
Investments of 6.7 million were appreciably higher than in the previous year. However, 5 million of this total are related to the purchase of real estate in connection with the acquisition.
Kurz sees favorable growth opportunities for the W+D Companies in niche markets. “There is growing demand for folding box machines and automation. Our major development and acquisition efforts are focused on these markets. Were thus well positioned for the future,” he says.
The management board is looking confidently to the year-end. CFO Dr. Manfred Kühn conceded, however, that it is not yet completely foreseeable to what extent the orders on hand will contribute to sales for the current year. Given sales expectations of over 100 million, he described prospects for a year-on-year increase in net profits for the year.
Winkler+Dünnebier is a company of Körber PaperLink, an international supplier of systems solutions for the paper and tissue converting industries. In its core business, Winkler+Dünnebier AG manufactures envelope and handkerchief machines. Another focus is the manufacture of transport and palletizing devices for the paper, tissue, and food industries. At manufacturing sites and sales locations in Germany, the United States of America, China and Malaysia, approximately 950 employees contribute their experience and commitment to the excellent reputation of the company’s machines and outstanding service.