Fiscal year 2014/15: lack of demand stimuli

Current fiscal year: moderate growth expected

In the fiscal year 2014/15 (1 October 2014 to 30 September 2015), Wieland Group sales rose by 0.4 percent year-on-year to 2,784 million euros (previous year: 2,772 million euros). At 443,000 tonnes, the sales quantity was 4.7 percent down on the prior-year level (previous year: 465,000 tonnes). Net income for the year was 48 million euros (previous year: 31 million euros).

Lack of demand stimuli

There was no noticeable recovery of the global economy in the fiscal year 2014/15, so the stimuli needed for a revival of demand for products from the Wieland Group failed to materialise. Against this background, incoming orders and sales quantities remained below the prior-year levels.

Result influenced by special factors

The lower quantities sold compared to the previous year burdened the result. However, this fact was more than offset by a higher-grade product mix and cost reductions. The result was bolstered beyond this by special factors such as exchange rate gains resulting primarily from the weakening of the euro against the US dollar. Falling raw materials prices in the second half of the fiscal year and corresponding effects from accrual accounting and the booking of an insurance payout to cover the fire-induced loss at the Vöhringen location had an additional positive impact.

General trends

One reason for the declining trend was the slackening growth in China, which had a negative impact on the economic situation across the Asian region. In addition, business in Europe was affected by the conflicts in the Middle East and in the Ukraine. Conversely, borne by the robust domestic economy, demand in the North American market was stable.

On the whole, demand from the automotive industry improved, although incoming orders showed a significant decline during the last quarter of the fiscal year. Demand for products for electrical and electronic applications was stable, whereas demand from the machine manufacturing, construction equipment and hydraulics industries continued its declining trend.

Capital expenditure

In the fiscal year 2014/15, the Wieland Group invested 65 million euros in tangible assets (prior year: 72 million euros). The emphasis was on replacement investment at the German locations in Langenberg, Vöhringen and Ulm as well as at the companies in the USA and the UK.

Employees

In the fiscal year 2014/15, an average of 6,780 employees (previous year: 6,790) were working for the consolidated companies of the Wieland Group, with Wieland-Werke AG accounting for 4,357 (previous year: 4,365). With the acquisition of Metallschmelzwerk Ulm GmbH, 39 employees joined the Wieland Group.

Dividends

At the annual general meeting of Wieland-Werke AG on 18 March 2016, a dividend in the amount of 12.4 million euros was declared which corresponds to the value of the previous year.

Current fiscal year

Due to the slowdown of growth in China, incoming orders showed a noticeable decline in August 2015. Products for the automotive sector as well as for electrical engineering and communications technology were particularly affected. This led to capacity underutilisation at Wieland-Werke AG in some cases from October to December 2015. Demand has noticeably improved since January 2016, with good capacity utilisation currently being recorded at all locations.

Outlook

The economic scenario continues to be difficult. Demand is still affected by the slowdown of growth in China and the crises in the Ukraine and in the Middle East.

Against the background of waning global economic growth, sales quantities and net income for the fiscal year 2015/16 are expected to show a moderate increase with values slightly up over the previous year.