Sales growth in the first half of the year

Westag today published its half-year report. In the first half of 2022, the company generated sales revenues of 120.4 million euros. These are 5.3 percent higher than the revenues in the same period of the previous year (114.3 million percent). This was due, on the one hand, to price adjustments to compensate for inflation driven by raw materials and energy in the first half of the year and, on the other, to changes in the use of internal power generation.

Domestic sales developed positively (5.7 million; up 6.8 percent on the previous year), while export sales remained virtually at the previous year’s level (up 0.4 million; up 1.2 percent). The export ratio thus decreased from 27.0 to 26.0 percent.

An analysis by product area shows that sales of doors/ frames in the first half of 2022 were significantly higher than in the same period of the previous year (plus 15.7 percent). The increases were particularly evident in the domestic trading business. Here, in addition to the price increases implemented, both product mix effects to higher-margin products and slight volume increases compared with the previous year are noticeable. The changes in the DIY business of the Doors/Frames product area are also positive compared with the 1st half of 2021. The Surfaces/Elements product area continues to show a significant decline in sales of 9.9 percent, which is predominantly volume-driven. The Executive Board and management are working on various issues, both in terms of sales and costs, to compensate for the impact on earnings. The significant year-on-year increase in sales in Central Operations is attributable to higher sales from the CHP plant (up EUR 2.7 million). This is due to the fact that the electricity volumes generated have been fully marketed again since January 2022 and to the current higher electricity prices.

Adjusted EBITDA in accordance with IFRS, which shows the operating performance of the company, decreased from € 5.9 million to € 5.1 million in the reporting period. In the first half of 2022, procurement costs, which had already risen in the previous year, increased further and had a corresponding negative impact on earnings development. As a result of this development, the company’s own price increases implemented several times since last year have not yet been able to fully offset the cost increases at the present time.

The materials ratio in the first half of 2022 was 57.5 percent, 7.5 percentage points higher than in the same period of 2021, due to the above-mentioned price increases on the procurement markets. As a result of the increase in sales and the reduction in the number of employees, the personnel ratio fell from 34.2 percent to 32.0 percent in the first half of the year.

The company had acquired a further 275,778 preferred shares at a price of 27.50 euros per share in the first half of 2022. The 504,456 preferred shares thus held by the company, which were offset against equity in accordance with Section 272 (1a) of the German Commercial Code (HGB), were retired by the company upon entry in the Commercial Register on April 28, 2022. As a result, subscribed capital decreased by 1,291,407.36 euros to 11,622,673.92 euros.

As of June 30, 2022, Westag AG had an average of 1,157 employees (previous year June 30, 2021: 1,205).

Due to the declining overall economic situation and the unforeseeable further consequences of the Ukraine war and the resulting continued high burden of sharply increased energy prices, Westag AG sees the outlook for the 2nd half of the year as cautious. The cost-cutting measures initiated in the first quarter were continued in the 2nd quarter and will continue to be implemented as planned in the coming months and, if necessary, further intensified. The resulting cost savings are expected to amount to five million euros (full-year effect).