HELLA KGaA Hueck & Co., one of the world‘s leading automotive suppliers, successfully continued with its globalisation strategy in the fiscal 2014/2015 ending May 31, 2015, and generated group sales of €5.8 billion (previous year: €5.3 billion). This represents a 9.2 per cent increase, 2.3 per cent of which is based on currency effects. Adjusted operating earnings (EBIT) grew to €445 million (previous year: €399 million). Accordingly, the group improved its adjusted EBIT margin by 0.1 per cent to 7.6 per cent.
“The past fiscal year was very successful for HELLA”, says Dr. Rolf Breidenbach, CEO of HELLA. “We achieved our targets: HELLA continued its growth significantly above the market level and we also increased profitability.”
The Automotive business of the company again benefited from strong demand during the year. External sales grew by 11 per cent to €4.4 billion (previous year: €3.9 billion) and profits in this business rose to about €354 million (previous year €291 million). This continued growth was driven by market demand as well as several new product launches, particularly headlamps with complex LED technology and electronic systems for driver assistance and energy management.
The Aftermarket segment, which had been weak in the first half, had higher external revenues at €1.13 million (previous year: €1.08 billion) mainly on the back of wholesale activities in Denmark and Poland. Adjusted operating earnings decreased slightly to €73 million (previous year: €78 million). The Special Applications business was severely hit by weak agricultural demand in the past fiscal, particularly as a result of the Ukrainian crisis. External sales fell by 10 per cent to about €308 million (previous year: €343 million), and EBIT declined to €19 million (previous year: €28 million).
Focus on technology leadership
Research and development expenditures were again high in 2014/2015 reaching €544 million or 9.3 per cent of sales (previous year: 9.6 per cent). The number of employees working globally in research and development increased by three per cent to over 6,000. With its focus on research and development as a crucial element of corporate strategy, HELLA is further strengthening its technology leadership.
“Technologically leading products are key to the HELLA strategy”, says Dr. Breidenbach. “They create a competitive edge and at the same time build the foundation for our future growth.”
In the past financial year, development in the Lighting business division centred mainly on concepts that enable a comprehensive use of LED technologies across all vehicle segments. In Electronics, the main development focus was on technologies that help reduce CO2 emissions and a new generation of radar sensors for a 360 degree capture of the surroundings.
The reinvested profits and the 11 per cent capital increase in connection with the IPO give HELLA a very solid financial base. As at May 31, 2015, the equity ratio had grown substantially year on year to 39 per cent (previous year: 30 per cent). Adjusted for the high liquidity position of €1 billion, the equity ratio is 49 per cent (previous year: 39 per cent). “Sustainable growth requires long-term financing base”, says Dr Wolfgang Ollig, CFO. “Solid financing to provide an adequate scope for action therefore forms an integral part of our strategy.”
International network expansion
Joint ventures with partners have been a key component of HELLA’s growth strategy for over 15 years and give the company access to new markets. Overall, external sales of companies accounted at equity amounted to €2.9 billion, the pro rata at-equity result reached €55 million. External sales are not included in group sales.
The company concluded a purchase contract on August 13 for the outstanding 50 per cent of the shares in wholesale activities (Inter-Team) in Poland. This move strengthens the Aftermarket business and HELLA‘s strategic growth potential in Eastern European wholesaling.
HELLA expects the positive business outlook to continue in the current financial year. Beyond strengthening its market position through technological leadership in key product areas and exploiting growth opportunities from global expansion, it also expects to contribute to this development by improving its operating excellence. For 2015/2016, the group plans to grow sales and EBIT in to a high single-digit percentage range.