"We have responded to the challenges in an agile and innovative manner and were thus able to keep economic losses within limits," emphasizes Andreas Lapp, CEO of Lapp Holding. The company recorded a decline in turnover to 1128 million euros, while the number of employees fell by 1.6% to 4,575. Earnings before taxes fell to 29.7 million euros. "Despite this COVID-related decline in earnings, I am optimistic about the future. Above all, our strategy of driving forward the digital transformation together with our customers has proven to be a stabilizing factor in times of the pandemic," explains Andreas Lapp.

In addition to the economic impact of the pandemic, the decline in sales was also influenced by the fall in copper prices (-3.1% on average over the year) and exchange rate fluctuations. Adjusted for these factors, the decline in turnover was -6.5%, with a relatively stable business performance in the first half of the financial year and a significant downturn in quarters 3 and 4.

Developments in the regions

Sales revenue developed very differently in the regions. The EMEA region (Europe, Middle East and Africa) is the strongest region in the Lapp Group, accounting for around 74% of sales. It generated EUR 833.4 million in the past financial year - a decrease of 6.3% compared to the previous year. The Americas region (North, Central and South America) remained stable compared to the previous year at 118.5 million euros. The APAC region (Asia Pacific including India) closed the financial year significantly weaker at EUR 176.4 million, a decrease of 17.3%. Here, the COVID-related slowdown in sales markets had an impact much earlier in the financial year.

The number of employees worldwide fell by 1.6% to 4,575 (previous year: 4,650 employees). At 5.9%, the highest percentage decline was in the North America region. In the EMEA region, the number of employees remained almost constant.

Georg Stawowy, Chief Innovation and Technology Officer at Lapp.

© Lapp

Digitalization and Industry 4.0 are playing an increasingly important role for customers. In numerous countries and regions, such as China, the USA, Italy, Austria and Russia, Lapp has seen double-digit growth in the Industrial Communication segment in some cases. "The growth in these main markets shows that the trend is continuing despite the pandemic. Overall, we had to cope with a decline of one percent worldwide. The losses were therefore significantly lower than in other divisions, meaning that the IC segment has definitely been a stabilizing factor in these difficult times," explains Georg Stawowy, Chief Innovation and Technology Officer. This segment will therefore continue to be the focus for the development of new Ethernet-based products and services in the future.

The Renewable Energies segment has also developed positively. "We have grown by 23% in the Ölflex Solar product groups for photovoltaics. This is a clear indication that the energy transition is progressing. With our connection solutions for renewable energies, we are very much in line with the trend," says Georg Stawowy.

The current 2020/2021 financial year will also be shaped by the pandemic. Lapp therefore expects business performance to remain constant compared to the previous year. Andreas Lapp: "We assume that the markets will only recover slowly. I suspect that we will only see a sustained upturn once the lockdown is over and the population has been sufficiently vaccinated. Like all companies, we are currently taking a cautious approach."