GERMANY - The Homag Group Order intake in the first half of 2023 (6M-2023) reflects weaker capital expenditure in the furniture industry.

After a period of extraordinarily high capital expenditure that lasted until mid-2022, the industry is now taking a more cautious stance due to high inflation and interest rates. Accordingly, the new orders of EUR 671.4 million matched  expectations despite the large difference over the previous year.

In May, Homag presented a wide range of innovations at the industry’s leading trade fair Ligna, thus providing new investment incentives.

Sales remained very high thanks to the large order backlog. At EUR 412.9 million in the second quarter of 2023, they came very close to repeating the previous year’s record figure and were up 4.5% in the first half of the year as a whole.

Sales in the service business declined slightly as many customers are not operating at full capacity utilization due to subdued consumer demand and therefore require fewer spare parts and other services.

The slight contraction of the EBIT margin before extraordinary effects in the first half of the year was primarily due to the lower earnings contributed by service business. In addition, one-off costs

and higher R&D costs were incurred for the Ligna trade fair. In the second quarter,  a sequential improvement in the EBIT margin before extraordinary effects was recorded, which widened to 7.2%, up

from 6.7% in the first quarter. This was supported by efficiency and cost-cutting measures that are enabling Homag to adapt to the more difficult market environment and the decline in order intake and to strengthen its profitability. Against this backdrop, the full-year target EBIT margin of 8.0 – 9.5% for 2023 remains realistic.