Closes fiscal year with twelve percent drop in sales
Blum closes the 2022/2023 fiscal year as of June 30, 2023, with sales of 2,324.59 million euros. This is 317 million euros less than in the previous year and corresponds to a twelve percent decline in sales compared to the previous year.
After the disproportionate growth, this is an understandable development, which the managing directors Martin and Philipp Blum had expected. This is because the furniture industry has been experiencing a sharp decline in demand since the second half of 2022.
“We have been observing a trend reversal since the fall of 2022 after high investments in our own four walls,” recapitulates Philipp Blum, Managing Director of the Blum Group. “High inflation and price increases, as well as the issue of energy supply, have caused a great deal of uncertainty among end consumers. This is reflected in restrained purchasing behavior.”
Complementing the difficult market environment, costs for raw materials, energy and personnel remain at a high level. China’s strict pandemic policy, which lasted almost a year, and the supply freeze to Russia put an additional brake on business.
“The decline in sales is an understandable development after two years of above-average growth. A downturn was to be expected, but what surprised us was the speed. Even though we have to adapt to this challenging situation, we are sticking to our basic strategy,” says Philipp Blum. Managing Director Martin Blum emphasizes: “Our long-term corporate philosophy and values continue to be our compass, and we are consistently focusing our course on customer proximity, innovations and the further development of our more than 9,330 employees worldwide.”
The effects of inflation and uncertainty in the past fiscal year were particularly noticeable in the European markets. Sales development in the Asia-Pacific region is stable with the exception of China. The North American markets also paint a satisfactory picture, with economic conditions in the USA in particular more robust than in Europe.
Blum continues to operate at a high level of investment in Vorarlberg and worldwide. The total volume in the past fiscal year 2022/2023 was EUR 390 million, of which EUR 255 million is attributable to Vorarlberg. Over the next few years, more than 52,000 m² of production and storage space with more than 16,000 pallet spaces will be built at the main site in Vorarlberg. Blum will complete Plant 6 in Gaißau in the summer of 2023, and the expansions at Plant 2 in Höchst and Plant 4 in Bregenz are also proceeding rapidly. After three years of construction, the Chinese production site in Shanghai was officially opened in March. For another plant, the family-owned company is currently evaluating possible locations in eastern Austria to create additional capacity for the production of box systems. Commissioning is planned in four to five years at the earliest. For Martin Blum, one of the most important investments in the future is training young people in the company. “As future skilled workers, they are our life insurance,” he emphasizes apprenticeship training as a success factor. From September 2023, Blum will expand its training portfolio with an additional apprenticeship in information technology: application development and coding in the Dual Academy training model is aimed at high school graduates, but also students. The family-owned company currently trains a total of 399 apprentices worldwide in eleven different professions, in addition to Vorarlberg also in the USA and Poland. With its long-standing partner, the Vorarlberg University of Applied Sciences, Blum 2022 has established an endowed professorship for Digital Business Transformation. “The fact that we are working with the Vorarlberg University of Applied Sciences to offer a research institute that deals with digital issues, the changes and diverse challenges facing our society, is something we see as a great opportunity to further develop Vorarlberg as a business location,” says Martin Blum.
The innovative strength of the traditional company remains undiminished: In the ranking of the Austrian Patent Office, Blum was in second place in 2022 with 79 new applications.
As of July 1, 2023, Blum has expanded its management team by three people. In addition to Martin and Philipp Blum and Gerhard Humpeler, Wolfgang Heinzle, Alexander Roloff and Klaus Wendel are now on board. They are all long-time employees and proven leaders. Philipp and Martin Blum justify the decision with the increasing size and complexity as well as the growth potential of the company. “We are pleased about the reinforcement by our three competent and experienced colleagues. Together with experts from all areas, our team will continue to develop the company and tackle the challenges. Because this task can only be accomplished together,” explains Philipp Blum.
The two Blum managing directors continue to anticipate a difficult order situation: “We still need more staying power until consumer confidence and thus the markets stabilize again,” says Philipp Blum. “The long-term orientation as well as committed and flexible employees are our strong basis to be a reliable partner for our customers every day. Our thanks and appreciation go to our global team, which withstands the difficult times on a daily basis,” Martin Blum concludes.