Defying the crisis with innovations

Group sales in 2024 will remain at the previous year's level. The past few years have been mixed for us, but positive overall. The recovery after the coronavirus pandemic brought us steady growth in 2022 and the first half of 2023. In the following half of the year, the markets in Europe and Asia initially developed less strongly than forecast, followed by our business in Germany from autumn 2023. The economic situation stagnated in 2024. There are many reasons for these developments in a globalized world. For example, the transformation of the automotive industry remains a challenge for German manufacturers, which is being increased by new competitors from China. Asian competitors are also challenging us directly if, for example, property rights have little application in local markets. In addition, there is increased price and cost pressure due to rising purchase prices, falling sales prices and rising wage costs. The markets in Europe and Asia are developing in a mixed fashion. In contrast, we see the USA as a growth driver for our family of companies.

That's right. Our corporate family continues to grow internationally. This has included our company in Slovenia since September 2023. The country is an up-and-coming economy. With our local team, we support customers from Serbia, Croatia, Bosnia-Herzegovina, Kosovo, Montenegro and North Macedonia with all questions relating to our complete product portfolio. We have also been represented in Vietnam since August. The country is one of the fastest-growing economies in Asia and offers us a broad customer base in the Southeast Asia region. Numerous companies are setting up factories there in order to expand their activities and their network in Asia. Our newest branch opens up the market to the entire Southeast Asia region for us. In addition, Schmalz Flexible Gripping in Boston has been our second location in the USA since August. This is where we develop and manufacture the mGrip finger gripper. This summer, we took over this product family from the US company Soft Robotics (SRI). This was a strategic move into the food industry for us. We have been in the Czech Republic since October 2022 and are building up additional production capacity in Poland alongside our established sales office. We see a lot of potential for growth there. The new locations give us better access to local markets and allow us to support our customers directly on site with our automation solutions.

We cannot win the competition with good products alone. And our employees are our most valuable goods. That is why we are strengthening our corporate culture. Because this is precisely what has made us so successful for decades. This year, we developed and rolled out our Schmalz Compass. With specific content, it serves as a framework for our daily actions. It ensures that all employees worldwide agree on what is important at Schmalz. A common, strong and lived corporate culture connects us and motivates us. Our goal is to be a pioneer in electrical vacuum generation and to offer our customers added value, for example through energy efficiency. From 2026, we want to be a positive energy company; we already use over six million kilowatt hours a year from our own renewable energy generation. We support local associations and promote education at Campus Schwarzwald. We also offer a comprehensive range of benefits for our employees.

Despite the challenging situation, we have set ourselves ambitious global growth targets for the medium term. This applies in particular to the USA, but we also expect a slight increase in sales in Germany. We remain the market leader in automation with vacuum and ergonomic handling systems. To ensure that this remains the case and that we can generate sustainable growth, we are focusing on diversification, innovation, expansion and acquisitions. With a diversified offering, we want to tap into new industries and markets and, for example, enter the battery handling or pharmaceutical and food product industries. Medium and long-term growth is not possible without innovation. High-performance solutions for robotics and intelligent grippers are on our agenda. We supplement this with flexible system solutions, optimizing the coordination of different components. In the digital area, services such as C-parts management in the Schmalz Connect Suite are added. In addition, targeted selective acquisitions are required for a diversified offering. This enables us to enter markets quickly and access new technologies - for example, the mGrip finger gripper for the food industry.

We expect the economy to remain weak in the coming year and anticipate a difficult start, at least in the first half of the year. This assessment is also in line with various forecasts. Nevertheless, we are optimistic and expect to see a noticeable increase in sales again. In terms of exports, individual growth markets in Europe are delivering significant growth, while the USA dominates in absolute terms. We are even expecting slight sales growth in Germany. Our pioneering solutions, which will make an important contribution to sales in Germany as well as worldwide, will contribute to this - especially the grippers in the mGrip product family. We have the right answers to many questions and are continuing to invest in our locations, in our employees and in sustainability.