Billion-euro mark confirmed once again – clouded outlook on 2024
For the second time the HARTING Technology Group generated sales slightly in excess of one billion euros. Following the record result of € 1.059 billion in the 2021/22 financial year, the Espelkamp-based company generated a turnover of € 1.036 billion in the 2022/2023 financial year (- 2,2 %). "This confirms our forecast of last year - a sideways movement after the previous boom years," as Philip Harting, CEO of the HARTING Technology Group stated.
The distribution of sales in the regions was uneven, "reflecting the increasing volatility and diverging geopolitical conditions," Harting continued. The Americas region benefited from economic policy incentives - such as the Inflation Reduction Act - and grew by € 12 million (+9%) to € 159 million, while Asia contracted by € 24 million (-9%) due to the current weakness of the Chinese market. Germany remained stable at € 277 million (+2%). EMEA (Europe excluding Germany), on the other hand, recorded a sales decline of € 18 million (-5%) to € 355 million. The headcount dropped by 241 employees from 6,446 to 6,205 as at 30 September 2023 - mainly due to the sale of HARTING Systems (-160 employees) and the closure of the companies in Russia (-61 employees).
"By committing investments of € 76 million, which are significantly higher than depreciation, we are strengthening our production and development activities, as well as the organisational structures and processes. These include capacity increases in Romania (Agnita), a new e-mobility line in Mexico and the recently inaugurated, all-new plant in Vietnam. In addition, considerable funds were invested in the further digitalisation and automation of production and processes - including at our Espelkamp and Rahden sites. Our goals are clear: In view of the challenging economic conditions, high energy costs and excessive regulation, we need to position ourselves more robustly and resiliently than ever before," as Philip Harting stated. The aim is to consistently automate and digitalise further, reduce the cost of gas supplies and ensure the long-term access to raw materials at competitive costs. This is the only way the company put down the foundations for further growth - which is increasingly unfolding outside of Germany.
Harting, however, also pointed out that small and medium-sized electrical companies in Germany have outstanding opportunities to promote the climate transition and sustainability with their innovative solutions, as he illustrated with several examples from his company. The HARTING Technology Group is developing and supplying the connectivity for the all-electric society - for an electrified and decarbonised world. "Sustainability, the protection of our environment and our social commitment make up our DNA”.
Not least the war in Ukraine and the subsequent energy crisis have strengthened the company’s resolve to place its energy and heat supply on an independent foundation, and, above all, on a climate-neutral basis. "After relying 100% on green electricity for over ten years, we are now also becoming 100% independent of the gas grid with the acquisition of an additional biogas plant in Espelkamp which will be connected directly to our production. Thus reducing our carbon footprint by 1,200 tonnes at the same time," as Philip Harting reported on an investment in the double-digit million range.
By the year 2027, the Group also aims to reduce CO2 emissions worldwide by 60 per cent and achieve climate neutrality by 2030. In this context, HARTING is once again investing around € 75 million in the 2023/24 financial year in the development of new connectivity solutions for decarbonisation, digitalisation and automation, as well as in structures and processes and in further globalisation through market- and region-specific development and production capacities.
Despite all the efforts the company is undertaking to secure its future, Harting expects clouded economic trends in the current financial year and, as a result of the ten per cent decrease in incoming orders, sales falling short of the billion euro mark. "We are planning for a sales decline in the high single-digit percentage range."
The company is striving to counteract these trends as best it can - with flexible production management and the selective use of short-time working. We are constantly reviewing further measures in light of the current developments. Despite the present challenging situation and possible stagnation beyond 2024, Philip Harting is taking an optimistic view of the long-term future: "Part of our corporate vision is: We want to become a global company. And given the steady development over the last three years, I am certain of this: We must become a global company. We are pursuing this course courageously, consistently and with a great measure of hope."