Germany’s SHW AG has reported an increase in Group sales of 23.9% to EUR 104.8 million (previous year EUR 84.6 million). At the same time, order intake for the period from January to March 2014 increased by 13.9% to EUR 112.2 million (previous year: EUR 98.5 million). The groups Powder Metallurgy division boosted its sales by 11.9% to EUR 7.5 million in the first quarter.
SHW stated that in the first quarter of 2014 high customer orders led to logistical and operational pressure on the existing technical capacity in the Powder Metallurgy division at the Aalen-Wasseralfingen site. This had a negative impact on the performance of pump production at the Bad Schussenried site, the main customer of the Powder Metallurgy division, added SHW.
“The constant increase of customer orders was a real challenge for our organisation, which ate into our profits,” stated CEO Dr Thomas Buchholz, who is in charge of the Pumps and Engine Components business segment. “I am confident, however, that the investments initiated to expand our capacity and the measures aimed at optimising our business processes will allow us to respond more flexibly to such fluctuations in demand, while at the same time leveraging our earnings potential more effectively.”
Although sales increased by 23.9% or EUR 20.2 million, working capital was reduced by EUR 7.5 million or 14.1% compared to the previous year to EUR 45.6 million. “A working capital ratio of 11.8% in the first quarter of 2014 means that we have come a great deal closer to our target of 11%,” stated Sascha Rosengart, Chief Financial Officer of SHW AG.
At EUR 80.6 million (previous year: EUR 63.3 million), the Pumps and Engine Components segment generated the highest quarterly sales in the history of the company. Against the background of high customer orders, the product ramp up of a variable oil/vacuum pump (tandem pump) for a 3-cylinder engine and the capacity expansion for a start/stop pump, the Passenger Car division reported a 31.8% increase in sales to EUR 65.3 million (previous year: EUR 49.5 million).
The group’s Truck & Off-Highway division benefited from growing demand from manufacturers of agricultural and construction machinery and generated sales of EUR 7.8 million (previous year: EUR 7.4 million).