The Rupp Report: Monforts Reshaped - And Successful
After 127 years of being at the same address in Mönchengladbach, Germany, traditional textile
machinery manufacturer A. Monforts Textilmaschinen GmbH & Co. KG will leave its headquarters
and move to new premises at the so-called "Schlafhorst Businesspark" in Mönchengladbach. One may
say, and especially for its tenter frames, that Monforts is an internationally recognized label of
quality for finishing machinery. The company employs 148 people at its site in Germany and some
1,000 worldwide. And the results for 2010 are very positive.
Monforts is one of the global market leaders in textile finishing machinery, with an export share of more than 90 percent and a newly rented office space of some 2,200 square meters and production area of about 3,700 square meters. The Rupp Report asked Klaus A. Heinrichs, vice president, marketing, about the reasons for the move: "Well, of course," he said, "there is some melancholy over leaving the old site. However, we can't win anything with melancholy. With the new premises at the business park, we will improve a lot. The internal channels are much shorter; the organization is much leaner and more compact."
Nothing In Common With Other Group Members
The people who know Monforts' old premises are aware of the fact that all the divisions and productions sites were spread all over a huge area at the Schwalmstrasse. The company was acquired in March 2006 by the holding company L. Possehl & Co. mbH, but the other companies of the Possehl Group have nothing in common with Monforts' textile machinery activities. "This is another reason to concentrate Monforts' textile core business in one place," Heinrichs said.The Possehl textile finishing business unit — including the Monforts production centers in Mönchengladbach; St. Stefan, Austria; and Monforts Fong's Textile Machinery Co. Ltd., a joint venture (JV) with Fong's Industries Co. Ltd. in Shenzhen, China — is gaining ground. "On the Chinese market alone, we could sell almost 1,200 finishing lines from the joint venture production," Heinrichs explained. JV project management, however, is in the hands of the people in Mönchengladbach.
Parent Company's Best Result Ever
The Possehl Group is a diversified group that comprises nine independently operating divisions organized within a decentralized structure. The group includes L. Possehl & Co. mbH and its 130-plus subsidiaries in more than 30 countries. Net group sales totaled some 1.72 billion euros for fiscal year (FY) 2010. The company has approximately 8,600 employees worldwide, with more than half based in Germany. This represents an increase of 2,300 employees, or 36 percent, over the previous year, and reflects mainly acquisition activities concentrated in the domestic market.
Heinrichs said that for FY 2010, Possehl realized the best operating result in its 163-year history, leaving the crisis year of 2009 far behind. FY 2010 preliminary earnings before taxes (EBIT) are reported to be approximately 81 million euros and exceeding the record earnings reported in FY 2007 by some 8 percent. All corporate divisions realized profits last year.
The Rupp Report also asked about Monforts' share in terms of turnover and benefit. Heinrichs replied that "A. Monforts Textilmaschinen GmbH & Co. KG, together with the joint venture Monforts Fong's, contributed a considerable amount worth millions to the pleasing results of the Possehl Group." Even in 2009, when the markets were quite shaky, Monforts achieved a positive result.
It was reported that many of the group's companies posted record profits, and emerged from the crisis stronger than before. Possehl also benefited from the global economic recovery.
Solid Cash Flow
Consolidated net sales totaled a record 1.72 billion euros, returning Possehl to a track for long-term growth after only one year of decline. The company reported sales increases were strongest in the domestic market, which now accounts for well over 50 percent of total sales. Excluding acquisitions, sales rose by some 33 percent, much greater than most industries in Germany. In addition to rising orders reported by nearly all group divisions, increased commodities and precious metals prices — particularly for gold — boosted sales.
The group's net cash position improved despite the strong organic and acquisition-related growth in FY 2010, although Possehl financed all acquisitions entirely using its existing cash holdings. Year-end net cash totaled 48.7 million euros, compared with 28.1 million euros at the end of FY 2009, and Possehl continues to remain debt-free on a net basis.
Possehl reported that the excellent capitalization and liquidity also creates sustained growth opportunities — including additional acquisitions — going forward. Heinrichs' look toward the future is positive: "After the consequences of the economic crisis, the atmosphere has brightened up further thanks to an increasing demand for our machines. We at Monforts want to further enhance the good result from the previous year. The markets in general and particularly in Latin America, but also in Asia, are further showing a stable upswing."
And how does Heinrichs judge the impact of Possehl's acquisition in the last five years? "The Possehl philosophy of a long-term commitment secures and tightens further the strong position of Monforts as a premium supplier of German high-tech textile machinery," he said.
March 1, 2011