Lapp Group shows moderate growth - Wire & Cable India
Wire & Cable India
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Lapp Group shows moderate growth

February 26, 2013

Characterised by the varying developments in global markets and the uncertainties in the Eurozone, the Stuttgart-based Lapp Group recorded moderate growth in the financial year 2011/2012 (1 October to 30 September). The leading provider of integrated solutions and branded products for cable and connection technology increased revenue by 1.5% to around 860 million euros (previous year: 847 million euros).

“Our company is fundamentally healthy – despite the Eurozone crisis – and we have positioned ourselves well. We will continue to lead the Lapp Group from a position of strength towards a good and successful future”, said Andreas Lapp, Chairman of the Board of Lapp Holding AG.

Uneven development in the regions

The Lapp Group is organised into the three regions Europe, Asia and America. The way countries are allocated into the regions does not always follow geographical lines. South America, Africa and the United Arab Emirates are served by Lapp Europe, for example. North America includes the USA, Canada and Mexico while Asia also covers Australia and New Zealand.

• Europe: The continuing uncertainty around the future of the Eurozone led to a fall in domestic demand. Revenue came in at 594 million euros (previous year: 620 million euros), a drop of 4%. As the strongest single market, Germany maintained its revenue share of 36% of the total group revenue. With a 69% share of total turnover (previous year: 73%), Europe remains the core market for the Lapp Group.

• Asia: The powerful economic growth in Asia has been particularly positive for the Lapp Group’s companies in the region. Growth was at 20%, leading to revenue of 183 million euros (previous year: 153 million euros). Targeted investments in this region supported the above-average growth. This helped the Asia region to increase its share of total company turnover to 21% (previous year: 18%).

• America: Revenue developed very dynamically in America. Revenue rose by 12% to 83 million euros (previous year: 73 million euros). Revenue development in the USA was particularly positive, with growth of 22%.

Significant increase in investments

Lapp Group increased its investments in the 2011/2012 financial year, laying the foundations for further growth. Investments therefore rose to 33 million euros (previous year: 21 million euro). The largest investments came in Germany. For example, the interior construction of the new fully automated service and logistics centre in Ludwigsburg cost 16 million euros. The state-of-the-art goods warehouse (total investment: 48 million euros) entered service last autumn and will be officially opened in mid-2013. Another major investment was the opening of a second Indian production plant in Bhopal and the expansion of production capacities at existing sites such as Contact GmbH in Stuttgart, Camuna Cavi in Italy or Lapp Cable Works in the USA. Further expenses resulted from the 100% acquisition of the long-time sales partner Coelco Trade S.R.L in Romania as well as license payments to SAP for ECC 6.0 of around 1.3 million euros.

Asia will be the focus of investment for the current financial year. For example, a new plant in Shanghai, China (5.5 million euros) and the further expansion of the plant in South Korea (2.7 million euros) for the production of electron beam cross-linked cables, for example for photovoltaics. In Europe, the construction of a new administration and logistics centre in Poland (approx. 4.1 million euros) is in the pipeline. The continuing implementation of SAP alone will cost 1 million euros in the current financial year. This new information and communication technology will enable the Lapp Group to optimise its processes even further, improve service and fulfil customer wishes even quicker. Total investments for the current financial year are 35 million euros.

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