However, earnings before taxes fell by 17.6% to EUR 48.3 million. "In view of the ongoing tensions in global trade and the economic slowdown, we can be very proud of what we have achieved. Above all, our strategy of driving forward the digital transformation together with our customers is beginning to bear fruit. This shows us that we can still grow with innovative solutions even in difficult times," says Andreas Lapp, CEO of Lapp Holding. The family-owned company, headquartered in Stuttgart, achieved its greatest growth in Europe. However, Lapp was also able to further increase its turnover in America and Asia. However, the economic downturn was also clearly noticeable at Lapp in the fourth quarter.

Growth initiatives and acquisitions
The increase in sales was influenced by three factors. Firstly, strategic sales initiatives drove growth in the past financial year. Examples of this were the further development of the project business and the increase in sales in the Industrial Communication market segment.

Added to this was the acquisition of CEAM Cavi Speciali. The Italian company was fully consolidated for the first time in the 2018/2019 financial year and supported the positive development with additional sales of EUR 8.2 million.

And copper prices and exchange rates had less influence. Explanation: The actual price of a cable is always calculated on a daily basis using the current copper exchange rate. As the annual average price fell by -3.8% (EUR 547/100 kilograms), total turnover also fell by -1.1%. Exchange rate fluctuations had a slight impact of +0.2%.

"Lapp has grown against the trend. If the copper price had not fallen on average over the year, we would even have been able to report operating growth of 6.9 percent," emphasizes CFO Dr. Ralf Zander.

Successful in EMEA
Sales growth was supported in particular by the EMEA region (Europe, Middle East and Africa), which generated 73% of global sales. Turnover here increased by almost eight percent to 889.9 million euros. Turnover in Germany also developed positively at 359.8 million euros (+ 3.4%). The Central and North America region generated 118.9 million euros (+4%). The APAC region (Asia Pacific including Australia and New Zealand) fell slightly short of expectations and improved its turnover to 213.2 million euros (+ 1%).

Qualification offensive for employees
The number of employees worldwide grew by around 9.5% to 4,650. The increase in the number of employees in the EMEA region was above average (+10.9%).

In the past financial year, the focus was on a global qualification offensive on the subject of industrial communication. Lapp trains all employees with customer contact in this subject area and also supports its customers in finding their way through the jungle of technologies and protocols. To this end, measures such as webinars, traditional classroom seminars and boot camps have been set up. Lapp developed the e-learning courses in collaboration with the Fraunhofer Institute for Cognitive Systems IKS (until December 3, 2019: Fraunhofer Institute for Embedded Systems and Communication Technology).

Investing in the future
In the 2018/2019 financial year, Lapp once again increased its investments by 12.9 million euros to 43.9 million euros. EUR 6.8 million was invested in software and digitalization projects. Investments in property, plant and equipment focused on the sales and production companies. In Poland, a new logistics center with a storage area of over 90,000 square meters was opened for infrastructure lines. Production capacities were also expanded in India and France.

Outlook for the current financial year
Lapp expects business to be difficult in the current financial year. The major uncertainties resulting from the coronavirus crisis, Brexit and the general economic slowdown are expected to lead to a reduction in sales in 2019/20 compared to the previous year. In order to secure financial leeway for future growth, LAPP is paying increased attention to cost efficiency. "It was to be expected that after six years of growth, the economic curve would once again point downwards. However, I am optimistic that the bottom will soon be reached," says Andreas Lapp. as