"Challenging fiscal year in 2020"

Schunk Group remains stable even in crisis and generates profit

  • Schunk Group remains stable even in crisis and generates profit
    The Schunk Group's sales fell significantly in the challenging 2020 fiscal year. Nevertheless, the technology company generated a comparatively good result.

Thanks to its strategic orientation, the Schunk Group has once again proven to be highly resistant to the crisis. In view of the Corona pandemic, however, the technology company had to report a significant drop in sales in the 2020 fiscal year.

The global economic crisis resulting from the Corona pandemic also had a massive impact on the Schunk Group: the technology company's sales fell by 11.6 percent to €1.198 billion. "The slump in the automotive industry, our most important sales market, was particularly drastic, especially the European market, which is important for Schunk," explains Dr. Arno Roth, CEO of the Schunk Group. The railroad market, which is also important for Schunk, was similarly hard hit, Dr. Roth continued.

Countermeasures mitigate impact

"2020 was a challenging fiscal year. However, we were prepared for a crisis scenario and were therefore able to implement countermeasures early and decisively. This enabled us to mitigate the effects of the crisis," explains Dr. Roth. Schunk therefore achieved a comparatively good result and thus further increased its already very good equity ratio to now 68.6 percent. This also enabled a Corona special payment to be made to the approximately 9,000 employees worldwide, who will also receive a profit-sharing payment for 2020 this year.

Crisis resistance thanks to diversification

"Our strategically diversified business has undoubtedly helped us during the crisis," emphasizes Dr. Roth. With a total of ten business units, the technology company is active in what are in some cases very different industries and markets. "This orientation already proved to be very stable during the financial crisis in 2009 and has proven itself again now - in conjunction with the high financial stability of the Schunk Group," says Dr. Roth.

Schunk's portfolio includes slip rings for power transmission in a wind turbine as well as vacuum coating systems for the production of high-quality eyeglass lenses. "The core of our business is, on the one hand, our expertise in high-tech materials such as carbon, technical ceramics and sintered metal and, on the other hand, our high level of competence in mechanical engineering in the areas of environmental simulation, air-conditioning technology, ultrasonic welding and optical machines," explains Dr. Roth. It is true that the automotive market is very important for Schunk, accounting for around 40 percent of sales. "However, we are not dependent on it, but are active in many markets, each of which has its own cycles."

Investments remain at a high level

Even during the crisis, the Schunk Group maintained its high level of investment almost unchanged: in 2020, 97.1 million euros were spent on, among other things, the construction of two new innovation centers at the Heuchelheim and Reiskirchen sites, which will open in the fall of 2021 and together comprise an investment volume of almost 30 million euros. The company also built and moved into a new site near Salzburg last year.

High investments are also planned for 2021. These include accelerated automation in production and, in principle, the standardization and optimization of corporate processes, which will be implemented in the OneERP+ project scheduled to run for several years.

Outlook for 2021

"The pandemic will continue to occupy us throughout 2021 and probably beyond. Uncertainty in our business areas remains high. But we do not want to and will not let this slow us down," says Dr. Roth. So far, the Schunk Group has successfully avoided corona infection chains in operations worldwide and has enabled its employees to work on the move wherever possible.

"In the wake of the pandemic, digitalization has received an enormous boost," Dr. Roth continues. "This applies not only to our internal processes and the way we work together digitally, but also and especially with regard to our customers." For example, he said, Schunk launched a digital sales and marketing initiative early on, with virtual tech days for selected customers, webinars and increased use of social media channels. "We've had very good experiences with that, and we want to continue that."

"Success by Innovation" continues

As a technology company, the Schunk Group continues to focus on innovation and is therefore continuing its "Success by Innovation" initiative. Part of the initiative is a €10 million grant fund to support Horizon 3 innovations. "We want to develop novel solutions, replace existing technologies and open up new markets," emphasizes Dr. Roth. "That's why we are deliberately investing in ideas away from our day-to-day business, so that in ten years' time we will still have new, strong sales drivers in our portfolio."

Durafox Ceramics for extreme applications

One example of the innovative spirit of Schunk's developers and evidence of their high level of materials expertise is Durafox. This new ceramic fiber composite material has impressive properties and can withstand extreme loads where other materials reach their limits early on. Components made of Durafox, for example, are resistant to thermal shock and show no brittle behavior. This makes them very suitable, for example, for applications as production aids or as plant components in the smelting of aluminum: Components made of Durafox withstand the extreme stresses in this highly corrosive and oxidizing environment at simultaneously high temperatures and strong temperature fluctuations much better than components made of conventional materials and therefore have a longer service life.