2019 was not an easy financial year for sensor and automation provider Balluff: although the company closed the year better than expected with total sales of €469 million, the development fell short of targets with a 3.9% decline in sales. "We had targeted growth in the double-digit range for 2019," explains Managing Director Katrin Stegmaier-Hermle. However, economic momentum cooled noticeably in the second half of the year. "The uncertainty in the markets resulting from the escalating international trade conflicts and far-reaching structural change in individual sectors had a significant impact on economic development," says Stegmaier-Hermle. This has particularly affected export-oriented industries such as the automotive sector and mechanical and plant engineering, the company's two most important customer segments. "It was therefore already clear during the year that we would not be able to achieve our targets under such circumstances."

The structural changes resulting from the digital transformation and megatrends such as autonomous driving and e-mobility pose major challenges for manufacturers and suppliers in the automotive sector. "Our home markets - Germany, Austria and Switzerland - are and will remain the problem children. However, sales development in other markets such as North and South America and Asia also fell short of our expectations," explains Stegmaier-Hermle. It is therefore all the more pleasing that the company's diversification strategy is bearing fruit: the Packaging, Food & Beverage (PFB) division grew by around 9% in the past financial year. Balluff's management attributes this positive development in part to increased environmental awareness on the part of consumers, which increases the pressure on manufacturers to innovate and thus leads to investments in modern production facilities. However, this positive development could not offset the losses of 4% in the Machine & Plant Engineering division and 6% in the Mobility division.

Loss of sales due to the coronavirus pandemic

The first quarter of the current financial year ended with a drop in turnover of more than 7%. The outbreak of the coronavirus pandemic led to a slump in incoming orders - first in China and then worldwide from March onwards. The east-west trend of the coronavirus pandemic is also reflected in the respective sales trends of the regions. "It was crucial for us to maintain our ability to deliver and act for our customers in this exceptional situation," says Managing Director Frank Nonnenmann, who took over from Michael Unger as Managing Director on February 1, 2020. "We countered the sharp drop in orders with a corresponding reduction in production volume. We also cut costs across all 38 locations and introduced short-time working for some of the workforce at the Neuhausen site on April 1 - with the exception of the Product Development and IIoT divisions until further notice. Despite these challenges, we were able to maintain our global production and logistics network thanks to comprehensive protective and hygiene measures and a strong team in the supply chain and thus remain able to deliver at all times."

According to Katrin Stegmaier-Hermle, the company is assuming a very slow economic normalization, which will continue to be burdened by the serious effects of the corona crisis. In order to overcome the current situation, Balluff is focusing on the consistent further development of its product and solution portfolio, especially for growth industries such as the pharmaceutical and packaging industries or the areas of e-mobility and renewable energies.