Turnover at the global market leader for integrated solutions in the field of cable and connection technology climbed by 31% to 1,864 million euros. The number of employees rose by 10.2% to 5,055 worldwide as at September 30, 2022. Earnings before taxes (EBT) increased to 132.9 million euros.

"We have opened a new chapter at Lapp and have made our company robust and fit for the future in a difficult environment. The core of our transformation is the continuous strengthening of our innovative power, a special focus on services and a comprehensive cultural change that will make our company even faster, more agile and more sustainable," emphasizes Matthias Lapp, CEO of the Lapp Group. Matthias Lapp is realistic about the current financial year (2022/2023). "Together with our customers and partners, last year was a real challenge. We expect this to continue - we are consistently investing in the future."

Fundamentally sound asset and financial position

In the past 2021/2022 financial year, Lapp once again exceeded the sales growth from the 2020/21 financial year. Turnover increased by 441 million euros (+31%) to 1,864 million euros. The increase in the average copper price and currency developments (+1.9%) contributed around 6.5% to this increase in turnover. Adjusted for these copper and currency effects, there was still a significant increase in turnover of 22.6%. "This growth was mainly due to higher capacities and market share gains in our focus markets in combination with higher market prices. There were also general catch-up effects along the supply chains," explains CFO Jan Ciliax.

The Group recorded strong growth in all three of Lapp's regions. EMEA (Europe, Middle East, Africa), the most important region with around two thirds of Group sales, improved by 29.4% to EUR 1,352 million. In the Americas region (USA, Mexico, Canada, South America), sales soared to EUR 192 million - an increase of 40.2%. And in the APAC region (Asia, Pacific, Oceania), sales climbed by 32.7% to EUR 320 million. As Lapp's average order intake for the year was +6.5% higher than sales, the order backlog also increased to € 356 million as at the reporting date of September 30, 2022, which was significantly higher than the previous year's reporting date.

Earnings before taxes (EBT) increased to EUR 132.9 million and the return on sales rose by 1.5 percentage points to 7.1%. The significant pressure on margins due to increased material and logistics costs was offset by improved capacity utilization in the factories and a disproportionately low increase in personnel costs and other expenses. At 44%, the equity ratio was up on the previous year and thus remained at a consistently high level. "Lapp's net assets and financial position remain rock solid and will allow us to continue implementing strategic measures and investments for the benefit of our customers in the coming years," confirms Jan Ciliax.

Pillars for change at Lapp

Lapp has changed significantly in recent years. Under the leadership of Matthias Lapp, previously responsible for the EMEA region with the highest turnover and CEO of the Lapp Group since October 1, 2022, the course has been set for a successful future in all relevant areas of the company and new, bold developments have been initiated. "In order to continue to grow successfully, our family business needs a breath of fresh air and strong entrepreneurship. We want to be at the forefront of technology and culture. To achieve this, we must constantly put ourselves to the test. In view of the current changes in the economy and society, this is no easy task, but it is all the more important," said Matthias Lapp. The central pillars of change are:

1. high investments in digitalization

At EUR 40.2 million (previous year: EUR 25.8 million), Lapp invested even more heavily in intangible assets and property, plant and equipment in the past financial year. The focus was on software acquisitions and digitalization projects as well as the further expansion of the ERP system in order to further optimize automation and processes in the areas of finance, HR, production, supply chain, services and procurement. An important milestone in the digital transformation is the go-live of the new online store and customer portal, the functionalities of which are being continuously expanded and developed. Last but not least, Lapp has pushed ahead with the expansion and further automation of the production plants in France, Germany, India and China.

2. pioneering role in new technologies and services

Lapp is positioning itself as an innovative solution provider and technology leader. To this end, the family-owned company has restructured its global research and development activities and the management of laboratory and test center activities.

"At the same time, we have further expanded our portfolio in our strategically important field of industrial communication. In this area alone, we were able to achieve disproportionately high sales growth compared to the Lapp Group as a whole," adds Georg Stawowy, Chief Innovation and Technology Officer.

3. challenging markets, strong customer relationships

An important focus is the expansion of digital sales. "In a customer-centric solutions business, we need to pay particular attention to establishing the right processes and offering customers added value," emphasizes Dr Christoph Hiller, Chief Sales and Marketing Officer. Lapp's core market continues to be mechanical and plant engineering. Other important sales markets are infrastructure, the food industry, logistics and, within the energy sector, photovoltaics and mobility in particular.

4. employee motivation through cultural change

Due to the strong order situation and the ambitious goals of Strategy 2027, Lapp has significantly increased the number of employees. As of September 30, 2022, Lapp employed 5,055 people worldwide - 10.2% more than in the previous year. "We want to attract, develop and retain the best talent in our industry for Lapp. This is only possible with a culture of constant adaptation and lifelong learning," says Matthias Lapp. "This is also reflected in the organizational structure with new, global and cross-functional collaboration. This is the only way we can be even more effective and faster on the market."

An important building block in the company's change process is the cultural change that Lapp initiated four years ago. And it has been a success: the proportion of satisfied employees has risen by 12.8% to 87.5% in the employee satisfaction barometer. And the most important indicator of employer attractiveness - the probability of recommendation - recorded an increase of 10%. "I am delighted that our efforts are being recognized and rewarded. But we still have a long way to go. We need to grow closer together as a Group globally. Although we started early, we are still at the beginning of the transformation," says Matthias Lapp.

5 The path to sustainability

Lapp is positioning itself on the market in the area of sustainability and offers products specifically for the solar and wind energy sector, for rail transportation and for the charging infrastructure of electric cars. A central credo is: start with yourself. All Lapp national companies worldwide are encouraged to operate their buildings and plants as energy-efficiently as possible. Wherever possible, the sites use green electricity or operate their own PV systems.

The concept of sustainability also plays an important role in logistics. Transport routes are also minimized through decentralized warehouses and delivery partnerships. For example, truck capacity utilization has been increased from 60% to 80% and transport routes have been reduced by a third. However, Lapp's commitment to sustainability also focuses in particular on the product and the manufacturing process. Lapp is committed to the efficient use of raw materials and the environmentally friendly handling of chemicals and waste.

Outlook for the current financial year 2022/2023

The current financial year will also be characterized by higher inflation rates, continued uncertainties regarding the availability of materials and the economic and social impact of geopolitical tensions. "Despite these challenging conditions, we are encouraged by the continued good demand situation and a high order backlog," says Matthias Lapp, adding: "The flexibility of our supply chain was a key success factor in the past financial year. We will continue to build on this." In addition, there is consistent investment in the establishment of a global sales, procurement and production network. Lapp intends to continue to invest just as consistently in digitalization, innovation and sustainability. "And above all in our employees, who make the difference," emphasizes Matthias Lapp. For the current financial year 2022/2023, the company is currently expecting a further moderate increase in turnover.