UZIN UTZ on course for the future
UZIN UTZ AG, a global full-range supplier of flooring systems, closed the 2018 financial year with a record turnover. In a complex market environment, consolidated sales increased by 16.9 % to EUR 345.7 million (2017: EUR 295.8 million). At EUR 20.9 million, the Group's result from ordinary activities was above the average for the last five years, but below the previous year's figure (EUR 24.4 million) due to price increases for raw materials and transport costs and a one-off special effect. Due to the unchanged robust earnings situation, the Management Board and Supervisory Board of UZIN UTZ AG will propose an unchanged dividend of EUR 1.30 per share to the Annual General Meeting in May.
The UZIN UTZ Group was able to increase its sales in 2018 from 295.8 million euros to 345.7 million euros and thus by 16.9 % in a demanding market environment with good construction activity on the one hand and strong competition on the other hand. This was mainly due to the positive sales development of the subsidiary codex GmbH & Co. KG, UZIN UTZ South Pacific Ltd. and business in North America. In addition, the new subsidiaries acquired in 2018, Forinn B.V. and Bosgoed Groothandel B.V. from the Netherlands and the tool manufacturer Pajarito from Mettmann, were included in the consolidated financial statements and thus also contributed to the increase in sales. The company's strategy of investing in future markets, which it has been pursuing for years, is thus showing clear success. The foreign share of total sales rose by a further 3.4 percentage points to 62.3% (58.9%) in 2018.
"Last year's sales development clearly shows that we are excellently positioned in the market and that our market strategy of organic growth, combined with targeted acquisitions to optimize our value chain, is successful," says Heinz Leibundgut, CFO of UZIN UTZ AG.
On the earnings side, the Ulm-based construction chemicals specialist had to contend with rising raw material prices across the industry as a result of the construction industry and the sharp rise in logistics costs, above all due to the loss of ship capacity. At EUR 21.3 million, earnings before interest and taxes were therefore above the average for the last four years, but below the very successful previous year's figure of EUR 24.3 million.
For example, the increasing shortage of raw materials in the raw materials sector led to price increases, in some cases in the double-digit percentage range. Logistics costs also rose in the high single-digit percentage range, irrespective of the weather-related special situation in shipping. "In order to cushion this price pressure and for reasons of risk management, we already switched some raw materials with high purchase values to cheaper suppliers in 2018 and, as a result of our research and development, replaced some raw material components with cheaper and at the same time more sustainable products," explains Leibundgut. "In addition, since January 2019 we have been passing on the development of raw material costs to the market in the form of company-wide price increases. We have thus laid the foundations for showing the same dynamic earnings performance as sales in the current fiscal year."
In 2018, UZIN UTZ AG further intensified its investments in research and development at its worldwide locations in order to consolidate and further expand its market and innovation leadership in the focus regions and to actively exploit growth potential. The total investments of the group increased by 5 million euros to a new record value of 22.4 million euros in the reporting year.
In 2018, the company thus generated a profit from ordinary activities of 20.9 million euros (2017: 24.4 million euros).
In the year under review, the Group had 1,268 (2017: 1,118) employees. Of these, 658 (602) worked in Germany and 611 (516) abroad. In addition, 51 (46) young people were offered vocational training. In the increasingly difficult battle for specialists and junior staff, UZIN UTZ AG once again proved its attractiveness as an employer in 2018. For the fourth time in a row, the Ulm-based company was named "Best Employer" in its industry. "Our employees are our most important resource and at the same time an important competitive differentiator. We are therefore proud to have received this award again. At the same time, it helps us recruit new staff," said Leibundgut. "Our customers, the craftsmen, have to struggle even harder with the problem of a shortage of skilled workers and processors than we do. We support our customers by serving them as efficiently as possible so that they can achieve maximum added value with the limited manpower available to them".
Despite a weakening global economy, UZIN UTZ AG expects the dynamics in the construction industry in the company's focus regions to remain intact in 2019. The measures already taken by the company in response to rising raw material and logistics costs will contribute to a further increase in earnings.
For the current year, the company plans to invest around EUR 24 million in order to continue to drive innovation and to be able to respond even better to the different needs of international markets and future trends.
"We will continue to expand our market and innovation leadership in the long term and focus above all on the two central themes of the future: sustainability and digitization. In the area of sustainability, we will continue to pursue the course we have set ourselves and will provide impetus both for raw materials and for packaging and transport. Our strategic initiatives in the area of digitization, on the other hand, focus in particular on the availability of goods and warehousing and the expansion of digital dialogue and digital services with and for our customers," Leibundgut concluded.