Sales increase, orders decline for industrial laser maker TRUMPF

TRUMPF (Ditzingen, Germany), which specializes in industrial lasers, has reported an increase in sales in the 2018-2019 fiscal year that ended June 30, 2019, while its orders received and profits declined. The company's sales rose 6.1% to €3.78 billion, up from €3.57 billion in the 2017-2018 fiscal year. Orders received decreased by 3.1% to €3.68 billion (down from €3.80 billion in 2017-2018). Earnings before interest and taxes (EBIT) amounted to €349.3 million, which was 34.7% below the prior year figure (€534.7 million). The EBIT margin was 9.2%, down from 15% in 2017-2018. 

In addition to the high backlog of orders from the previous year, the expansion of the extreme ultraviolet (EUV) business field was a key driver of TRUMPF’s growth in sales revenue. The company supplies special lasers to ASML, a customer in The Netherlands—these lasers are integrated into systems that use EUV radiation to expose chip surfaces for the computer industry. Sales revenue from this business climbed from €0.26 billion in the previous year to €0.39 billion in the year under review, an increase of 48%. EUV consequently accounted for a significant share of company's revenues. 

The Machine Tools and Laser Technology business divisions were, by contrast, unable to maintain the high growth rates achieved in the previous year. Revenues for the Machine Tools division rose by a slight 1.2% to €2.39 billion (up from €2.36 billion). The Laser Technology division posted revenues of €1.38 billion, marginally (-2.1%) below the prior-year level of €1.41 billion. This decline was attributable to the slowing market in Asia (in particular, in China and South Korea) as well as to the automotive industry’s reluctance to invest. 

“As a company operating in the investment goods sector, we are particularly exposed to the impact of cyclical highs and lows,” explains Nicola Leibinger-Kammüller, TRUMPF President and Chairwoman of the Managing Board. “That is currently the case. Given the uncertainty due to the U.S.-China trade conflict and the structural change in the automotive industry, many customers have become more cautious and are postponing investments.”

As in previous years, Germany was the largest individual market for TRUMPF, with sales of €721 million, up 0.2% compared to the previous year (€719 million). Sales revenue in the U.S., the company’s second-biggest market, grew by 23.2% to €547 million (previous year: €444 million). At around €460 million, The Netherlands is the third-biggest individual market due to the good development of EUV business, followed by China at €415 million (previous year: €457 million). 

Group-wide, the TRUMPF workforce grew by 8% from 13,420 to 14,490 employees in 2018-2019. There were 7427 people employed in Germany as of June 30, 2019 (previous year: 6778), with around 4400 working at the Ditzingen headquarters. The number of employees outside Germany rose by 6.3% to 7,063 (previous year: 6642).

In the year under review, 485 young people completed a training course or co-op work-study program (previous year: 450). The Group’s training rate was 3.4% (previous year: 3.5%). There were two reasons for this development: first, continuing growth in employee numbers at TRUMPF, and second, the incipient shortage of qualified staff in the market, especially in the STEM professions.

After a strong rise in the previous year, investments increased yet again—by 33.3% to €288 million (previous year: €216 million)—in line with the company’s growth strategy. More than half of this expenditure concerned projects in Germany. Construction projects, the majority of which are being carried out at the headquarters in Ditzingen, accounted for in excess of €70 million. Completed projects included a lightweight hall, which is being used for the EUV business field, and a daycare center for employees’ children. 

TRUMPF further pursued its strategy to enhance its technological expertise with new acquisitions. Effective April 1, 2019, TRUMPF completed the acquisition of Photonics GmbH from Philips. As of the same date, the company set up a new business field, TRUMPF Photonic Components. In May 2019, TRUMPF acquired the remaining shares in the Chinese subsidiary JFY and now owns the company outright. To reflect this change, TRUMPF introduced a new organizational structure with a CEO China.

TRUMPF aims to achieve a CO₂-neutral energy balance at its production sites worldwide by the end of 2020 and therefore intends to increase investments in measures to protect the climate. By its own reckoning, the company currently emits around 90,000 metric tons of CO₂ worldwide per year. Of this amount, 80% is accounted for by electricity consumption. In this area, TRUMPF is pursuing a policy of concluding further green power contracts and purchasing certificates under carbon trading schemes to offset emissions from the combustion of heating oil, natural gas and other fossil fuels. A similar approach is being applied in markets with limited availability of renewable energies in the electricity mix. All TRUMPF sites in Germany already cover 100% of their electricity needs through green power contracts. Worldwide, 60% of the electricity needs are covered by green power contracts.

Between now and June 2021, in addition to efforts to close this gap and become 100% green, if necessary by purchasing certificates, TRUMPF intends to invest some 6.4 million euros in improving energy efficiency, for example by using its own cogeneration or photovoltaic plants to generate electricity. Other areas of improvement include process optimization, generation and distribution of cooling energy, lighting systems, and systems for the generation, recovery and distribution of heat. In the medium term, the company aims to significantly reduce its use of emissions trading certificates.

For more information, please visit trumpf.com.

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