Stuttgart Many traditional family businesses are not entirely impressed with the new traffic light government. But a day after Olaf Schultz (SPD) was appointed federal chancellor, Foyth’s president, Toralf Haag, is almost in a euphoric mood of optimism: “We’re optimistic and we’re going into the new age with the federal government with confidence.” He appreciated the focus on sustainability in the alliance agreement. After all, Voith wants to be climate neutral early next year.
But Haag would be a bad outside manager at the helm of a family business if he didn’t smell additional business for his company. Promises are not kept. If its euphoria continues, it will require, above all, investments in sustainable technology. In his opinion, Foyth would be well armed.
Because Haag realigned his strategy last year, as if anticipating coalition negotiations. The manufacturer of paper machines, hydropower turbines and drive technology wants to strengthen its core business of “Decarbonization and Digitalization” and expand it with new, sustainable and digital businesses.
“Step by step, Voith solidifies the megatrends of digitization and decarbonization in the group and makes industrial sustainability its business model,” Haag emphasized when presenting the numbers for the 2020/21 fiscal year (September 30).
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It suits him Siemens Energy She wanted to give up her minority stake in Voith Hydro. Haag has taken over and can now count on unlimited resources when it comes to hydropower. However, despite the energy transition, there are no major new projects in this country, but rather abroad.
Expansion of the hydrogen business
The paper’s main work also fits Haag’s sustainability theme. Because paper packaging will increasingly replace plastic packaging. Haag wants to make the company a leader in the circular economy.
The turbomachinery division was strengthened through acquisitions. Haag sees growth potential here for smart alternative drives. In addition, the department has entered the field of wind energy by cooperating, developing and producing gearboxes and generators for wind turbines.
Hague identified hydrogen production and use as a new major topic for the next few years. Voith is stepping up its commitment in all areas of the hydrogen value chain – from green hydrogen generation to pipeline transportation and storage in high pressure containers to electric propulsion for hydrogen-powered city buses.
“In addition, Voith is considering strategic options in this area,” explained the company from Heidenheim. In general, a traditional company has funds in the “three million-digit mid-range” available for acquisitions. The 154-year-old family business wants to prepare for transformation with a large number of future businesses.
The coronavirus pandemic is also causing problems for Voith. “But we will come out of the pandemic stronger than before,” Hag is convinced. Incoming orders rose by a quarter to around five billion euros. In the last financial year, Voith generated operating profit of 165 million euros, and sales increased by 2% to 4.26 billion euros.
The bottom line was that the loss could be avoided. The main reasons are restructuring and downsizing. The total additional costs due to the closure of factories in Germany and problems related to the epidemic in Brazil amounted to more than 70 million euros. Overall, the global workforce fell by 700 to just under 20,000 employees.
There is still potential for improvement in other key numbers, such as return on sales of 3.9 percent, equity of 20 percent and research and development ratio, which is currently still less than five percent of sales.
However, Voith’s president, Haag, 55, is confident: “There is a growing demand for sustainable technologies for a climate-neutral industrial society,” he said. Foyth will increasingly benefit from this. After two transitional years, Haag expects a slight increase in sales for this year, but a significant increase in profitability.
The backlog of orders has already reached a record 6.25 billion euros. But with long lead times in the establishment of the plant, this generally cannot be converted immediately to the next annual turnover.
The family business has also become more modern in terms of employees. With Stephanie Holdt as its new chief financial officer, the somewhat conservative group has hired a woman at the top management level for the first time. The 43-year-old financial expert will replace Egon Krachmer, who is retiring. Holdt has worked for the Knauf Group for a long time, and was recently hired for the American Building Materials Group in Chicago.
more: Siemens Energy withdraws from hydroelectric joint venture with Foith
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