Plansee reports stable business in challenging environment

July 10, 2024

Karlheinz Wex, chairman of Plansee Group’s executive board, reported that the company demonstrated strength and resilience in a challenging environment, and has remained stable (Courtesy Plansee/Andi Mayr)
Karlheinz Wex, chairman of Plansee Group’s executive board, reported that the company demonstrated strength and resilience in a challenging environment, and has remained stable (Courtesy Plansee/Andi Mayr)

Plansee Group, headquartered in Reutte, Austria, has reported a stable fiscal year despite declining demand in some markets, including China and Europe. Highlighting its high shares of products in key future markets and clearly defined sustainability programme, the company believes it is still well positioned for the future.

Sales in the 2023/24 fiscal year fell by three percent to €2.28 billion compared to the previous year. Although volumes were also down, this was mainly due to a change in the product mix with lower volumes and higher added value. Rising costs were largely offset by price adjustments. High pricing pressure was felt especially in the Chinese market.

While the Plansee Group’s share of sales in the mechanical engineering and automotive industries declined, its share in the aerospace and energy technology sectors and in some areas of the semiconductor industry increased. The equity ratio rose to 57% due to the net profit generated for the year and the reduction in working capital.

“Nevertheless, the Plansee Group has demonstrated strength and resilience in this challenging environment and has remained stable,” stated Karlheinz Wex, chairman of the executive board.

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Global presence and high share of new products

Wex sees reason for optimism in the company’s positioning. In the face of increasing isolationism and deglobIsation trends, the company is reportedly well positioned, having a sales and production network in all important regions of the world.

“We continue to focus on developing new applications for our materials – tungsten and molybdenum – in all of our markets, pushing the envelope of what is technically and physically feasible,” emphasised Wex.

A key indicator for this is the share of sales from new products in the core business. This includes products that are five years old or younger. At 38%, the share of sales from new products in the past fiscal year was close to the target value of 40%. For example, tools for aircraft construction, components for semiconductor technology and power transmission, wires for medical surgical robots and carbide inserts for agricultural technology were developed and brought to the market.

Investments 17% higher than in the previous year

The Plansee Group’s investment and innovation volume rose by 17% year-over-year to €297 million. The main areas of investment included capacity expansions at the production plants in Poland and Bulgaria and the purchase of industrial land in India for the expansion of production. In Franklin, Massachusetts, USA, a new clean room was built for the production of components for the semiconductor industry. The infrastructure for the planned large-scale electrolyser was prepared in Reutte, Austria. It will be used to produce hydrogen with electricity from renewable sources.

A high-performance IT infrastructure is becoming increasingly important – especially to support the automation and digitalisation of sales and production processes. The Plansee Group also invested in this area in the past fiscal year. Further investments were made in new machinery and equipment as well as in product and technology developments.

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Tools business strengthened

The Plansee Group strengthened its tools division with the acquisition of two companies: Xceliron Corp and Changzhou CW Toolmaker Inc.

Xceliron Corp was acquired via the business area Ceratizit. The US company manufactures specialty tools made of solid carbide for the aerospace and automotive industries. Through the joint venture CB-Ceratizit, 70% of the shares in Changzhou CW Toolmaker in China were acquired. The privately owned company specialises in the development, production and sale of carbide cutting tools for the electronics industry and a range of other industries.

Achieving climate neutrality largely from within

“Our efforts are currently focused on reducing our carbon footprint and recycling our valuable materials molybdenum and tungsten,” stated Wex.

The Plansee Group published its first-ever sustainability report covering the past fiscal year. It was highlighted that the group used 90% recycled tungsten in production. By purchasing electricity from renewable sources and implementing energy-saving measures, the group’s corporate carbon footprint was reduced by 21% to 305,000 tons CO2e compared to the base year 2020/21.

The share of electricity from renewable sources across the group is now 92%. With the installation of a large-scale electrolyser, the recycling of hydrogen and the decarbonisation of the Towanda site, measures are being implemented intended to contribute to achieving the goal of climate neutrality in the coming years.

“With our products and tools, we often find ourselves very far up the production chain. If our products and tools have a low carbon footprint, all downstream processors and ultimately the end consumer benefit,” added Wex.

The Plansee Group can calculate for each product or tool the volume of greenhouse gas emissions caused by its manufacture (product carbon footprint).

Number of occupational accidents significantly improved

The number of employees worldwide fell slightly to 11,208 – a decrease of 2% compared to the previous year, which was due to natural fluctuation (retirement, employees giving notice) at most sites. The company’s attention in particular centred around the number of occupational accidents in the past fiscal year, taking numerous prevention and avoidance measures. The number of work-related accidents decreased.

Outlook

The Plansee Group Executive Board expects economic conditions to remain largely unchanged in the current fiscal year. The uncertainty caused by ongoing geopolitical conflicts will continue to influence consumer behaviour and investment activity. In addition, the company is observing a decline in the competitiveness of European sites due to persistently high energy, personnel and bureaucracy costs.

Many sites are still suffering from a shortage of qualified workers. Even though the Chinese markets are not expected to recover quickly, Wex is said to anticipate a slight recovery in the global economy towards the end of the year. In addition to the semiconductor industry, aircraft construction in particular could be growth drivers again.

www.plansee.com

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