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tesa SE posts stable development
Strong growth in the U.S., weak business in Asia
- Sales up 5.9%, EBIT margin at 16.8%
- Disproportionate development in the United States with products for cars
- Consumer business: new marketing concepts bring growth
- Industry: system for two-tone painting sets standards in automotive manufacturing
tesa SE posted stable development in 2015. Sales rose 5.9% in nominal terms (adjusted for exchange rate effects: +0.3%), to € 1,139.6 million (previous year: € 1,076.3 million). The operating result (EBIT) without special factors reached € 191.2 million, resulting in an EBIT margin of 16.8% without special factors (previous year: 17.0%). tesa achieved growth in sales in both the direct business and the retail trade in Europe and the Americas. The development in the U.S. was highly positive, especially in terms of sales of adhesive tapes for the automotive sector. The Asia region, by contrast, saw more muted growth, due in particular to a slowdown in the project business with the electronics industry.
“2015 was a stable year for tesa. Both sales and results were at the same high level as the previous year,” said Dr. Robert Gereke, CEO of tesa SE, at today’s press conference in Norderstedt, near Hamburg. “The business in Asia fell well short of our expectations, but we were able to compensate for the decrease through positive developments in the other markets. This shows that we are in the right position and can overcome even tough market conditions.”
Investments support future growth; relocation complete
To further expand its technological expertise and ensure future growth, tesa has consistently continued to pursue important investment projects. For example, an additional state-of-the-art laminating system for the production of foam adhesive tapes was commissioned at the company’s plant in China. These products are intended for use in the regional electronics, automotive, and solar industries.
The company completed the relocation of its headquarters and technology and research center to the newly constructed site near the Hamburg airport on schedule by the end of 2015. The site was officially dedicated in January 2016. This means the approximately 1,000 employees of tesa SE’s three central divisions are now together in a single location. Gereke comments: “We have created a modern, pleasant working environment that improves communication and teamwork and offers us sufficient room for future growth.” At € 160 million, the new building is the largest investment project in the company’s history.
Group-wide, the number of employees rose slightly, to 4,109 (previous year: 4,081).
Consumer & Craftsmen: new marketing concepts promote sales
The business in products for consumers and craftsmen, which is focused on Europe and Latin America, saw positive development in 2015. Sales grew by 2.8% in organic terms. In many countries, tesa achieved significant growth with products for painters and painting companies. Major contributing factors included the internationalization of the training concept for sales employees and customers and modernization of the company’s presentation at the point of sale. The international brand campaign launched in 2014 was continued in 2015, as a new TV ad for “Powerstrips” brought significant increases in distribution and sales volume for these products across all sales channels in Poland, Italy, and Spain, the countries that were the focus of the ad campaign. The introduction of an innovative product concept for painter’s tapes provided important impetus at German hardware and home improvement stores.
Industrial business: electronics business down, growth in the automotive sector
The Industry division, which accounted for 76.8% of sales (previous year: 73.7%), saw stable development, with sales growing by 0.1% in organic terms. The project business with the electronics industry, which focuses on Asia, posted a significant decline, while the automotive business grew disproportionately, especially in the United States. New products were launched, bringing fresh impetus to this sector. The company’s innovations included the new version of the ACXplus high-performance tape, which has viscoelastic material properties. The tape is used to bond car parts such as emblems, decorative trim, and antennas. tesa introduced all-in-one masking systems featuring an applicator for two-tone auto body paintwork, a segment that is increasingly in demand, thereby setting new standards for the technical implementation of this trend.
Sales up 17.3% in the Americas, weakness in Asia
The business region of the Americas posted the strongest growth. Sales rose by 17.3% in nominal terms (adjusted for exchange rate effects: +6.4%), to € 167.2 million. The main growth driver was the business with the automotive industry in the United States. This region accounted for 14.7% of Group sales. The development of sales in the Asia business region, which is heavily focused on the project business with the electronics industry, stood at +9.7% at current exchange rates. Adjusted for exchange rate effects, there was a decrease of 4.3%. This region’s share of total sales stood at 30.0%. The business in Europe grew slightly, posting a gain of 1.3% (adjusted for exchange rate effects).
Outlook for 2016
The familiar geopolitical risks and their effects on the development of the overall economy will continue to influence tesa’s business in 2016, as in the past. In Europe, the stable development trend is expected to continue, while the still-unresolved political and economic conflicts and the budget situation in Russia due to the trend in oil prices could have negative effects on the markets, especially in Eastern Europe. The ongoing recovery in the economies of Southern Europe should have a positive impact on developments in the distribution and end customer business. In Asia, tesa expects to see moderate growth in 2016, depending on how the economy performs. tesa will participate in this growth primarily in the automotive segment. The business with the electronics industry remains attractive, but growth is expected to be slight overall in this customer segment. The project-related nature of this business continues to pose a risk.
In the Americas, positive momentum from the North American automotive industry is expected during the current fiscal year, as in the past. The volatility of currency exchange rates, especially the much stronger U.S. dollar, will affect the development of tesa’s business in 2016 as well. Ongoing investments in research and development, and thus in innovative products, will strengthen tesa’s market position with sustained effects. On this basis, tesa is predicting sales growth of 2 - 4% for 2016. The EBIT margin from operations is expected to be similar to the prior-year level.
tesa SE is one of the world’s leading manufacturers of technical adhesive tapes and self-adhesive system solutions (more than 7,000 products) for industrial and professional customers as well as end consumers. Since 2001, tesa SE (4,109 employees) has been a wholly owned affiliate of Beiersdorf AG (whose products include NIVEA, Eucerin, and la prairie). Applications for various industrial sectors, such as the automotive industry, the electronics sector (e.g. smartphones, tablets), printing and paper, building supply, and security concepts for effective brand and product protection, account for about three-quarters of the tesa Group’s sales (2015: 1.1396 billion euros). tesa also partners with the pharmaceuticals industry to develop medicated patches. tesa earns just under one-quarter of its sales in the consumer segment, where 300 products for end consumers make working in the home and the office easier.
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