Hella Reports Positive Operating Results for 2008-2009 Year
LIPPSTADT, Germany--Hella KGaA Hueck & Co., a leading supplier of OEM lighting and electronics products to the automobile industry and one of the top players in the automotive parts and accessories aftermarket, released its preliminary results for the past 2008-2009 fiscal year (June 1, 2008 to May 31, 2009). Owing to the severe global crisis on the automotive market, Hella’s group sales were down 17 percent to $4.7 billion in the 2008-2009 fiscal year (2007-2008: $6.1 billion). Despite the difficult market environment and the significant decrease in sales, a positive operating result before interest and tax (EBIT) of $69 million was achieved. That is a decline of $144 million versus the comparable figure for the previous year. “Against the background of the dramatic and sustained market slump in the automobile industry since October 2008, we can be satisfied that we have achieved a positive result,” Dr. Jürgen Behrend, President of the company, commented on the figures.
Key success factors for Hella’s stabilization in the market downswing were the cost-cutting measures that were launched immediately in November 2008. This mainly included a reduction of leased external labor, the rapid implementation of short-time working, and further cost savings in all operating and administrative areas. Hella’s balanced business model, combining original equipment business with automobile manufacturers, on the one hand, and aftermarket business with distributors of automotive parts and garages, on the other, proved to be a particular asset in the crisis. “We intend to further reinforce this strategic balance by also building up a non-automotive segment,” Dr. Behrend commented. “The strategy is to transfer Hella’s technological competence in the automotive sector to non-automotive applications.” Two developments pursued for instance in the past fiscal year were an energy-efficient LED street lighting system and a high-precision camera-based people counting system (“people counter”). Both of these products are due to be launched in the market in the current fiscal year.
At $432 million, Hella’s overall spending on research and development was maintained at the previous year’s level in 2008-2009. This is a reflection of the long-term orientation of its development and investment strategy and the company’s underlying strength. In its choice of innovation themes, Hella is largely pursuing the core mega trends in the automobile industry: environment, safety and comfort. Development focuses in the past fiscal year were energy management (e.g. components for CO2 reduction), comfort and safety-enhancing driver assistance systems (e.g. “glare-free” headlights, lane change assistant) and LED technology (e.g. full-LED front lighting). This focusing will further strengthen Hella’s market position in the future.
Hella’s underlying strength is also reflected in the fact that the company’s long-term financing was secured in the past fiscal year despite the global crisis on the financial markets and the tighter lending conditions. An important milestone in this context was the successful refinancing of the syndicated loan that was due to expire in August 2010 with a new $777 million credit line (“Forward Start Facility”) running until August 2012 provided by a broad international syndicate of 22 banks.
Although the first signs of a recovery of the world economy are visible on the horizon, Hella’s management does not yet see an end of the crisis. Rather, all the indicators suggest that demand in the automobile market will be much lower than before the crisis in the next few years, too. “The situation remains strained. Thanks to Hella’s good strategic positioning and the solid financial situation, however, we are well placed to weather the crisis successfully,” Dr. Behrend commented.
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Hella KGaA Hueck & Co., Lippstadt: Hella is a global independent family-owned company with 23,000 employees at 70 locations in more than 30 countries. The Hella Group develops and produces lighting technology components and systems and also electronics for the automotive industry; it also has one of the world's largest trade organizations for car parts, accessories, diagnosis and services. In addition, joint-venture companies produce complete vehicle modules, air-conditioning systems and vehicle electric systems. With more than 3,200 employees working in the research and development field, Hella is one of the most important innovation drivers in the market. The Hella group, which generates a turnover of $4.7 billion Euros in fiscal year 2008-09, is one of the top 50 automotive suppliers in the world and one of the top 100 largest German industrial companies.