From the Sector

Autoneum has established a new Business Unit Commercial Vehicles to expand its existing truck business and to increase revenue and profitability in this vehicle segment as part of the Group’s strategic focus on profitable growth. To begin with, the Business Unit will focus on the commercial vehicles business in Europe and South America, as these two regions have a comparable customer base. The Business Unit is responsible for the global commercial vehicles business development, while its financial results will be consolidated within the Business Groups.

The new Business Unit focuses primarily on the business with components for medium and heavy trucks as well as agricultural commercial vehicles. Following the acquisition of Borgers Automotive in April last year, Autoneum has significantly expanded its product and technology portfolio for these vehicle segments. In combination with the Company’s global presence and diversified customer structure, this provides an ideal basis for future profitable growth. Autoneum already operates plants which manufacture products for the exterior and interior of commercial vehicles in Belgium, Czech Republic, France, Germany and Poland, as well as in Brazil. With the creation of a dedicated Business Unit Commercial Vehicles, Autoneum aims to leverage its existing production footprint in order to further grow the business worldwide.

As with the product portfolio for light vehicles, Autoneum’s multifunctional, lightweight and sustainable systems and components are suitable for commercial vehicles of all drive types. Autoneum is therefore well positioned for the expected increase in electric models due to more stringent environmental regulations.

A new €26 million manufacturing plant with its own forest has been opened by AkzoNobel in Faisalabad – the company’s largest investment in Pakistan to date.

The 25-acre site, which has facilities for making decorative paint, wood finishes, automotive and specialty coatings, coil coatings and protective coatings, will help to meet increasing customer demand across a variety of markets.

Also incorporated into the Faisalabad location is a forest spanning an area of 5,450 square feet. More than 1,400 native trees and shrubs – planted using the Japanese Miyawaki gardening technique – are expected to grow into a flourishing self-sustaining ecosystem over the next two years.

The site, which employs nearly 200 people, has been constructed to comply with the company’s strict environmental standards and includes a series of sustainability features, such as renewable energy generation and energy efficient design.

The European Chemicals Agency (ECHA), between 2009 and 2023, has performed compliance checks of approximately 15 000 registrations, representing 21 % of full registrations.  The Agency has met its legal target for dossier evaluation, which was increased from 5 % to 20 % in 2019. While, for substances registered at quantities of 100 tonnes or more per year, ECHA has checked compliance for around 30% of them.  

In 2023, the Agency conducted 301 compliance checks, covering more than 1 750 registrations and addressing 274 individual substances. These checks focused on registration dossiers that may have data gaps and aim to enhance the safety data of these substances. As a result, 251 adopted decisions were sent to companies, requesting additional data to clarify long-term effects of chemicals on human health or the environment.

ECHA will now put more focus on following up the requests sent to companies. In the follow-up evaluation process, the Agency assesses the incoming information for compliance. The outcome of the incoming data is shared with the Member States and European Commission to enable prioritisation of substances. ECHA will work closer together with the Member States for enforcement of non-compliant dossiers.  

Compliance of registration dossiers will remain a priority for ECHA for the coming years. This year, the Agency will review the impact of the Joint Evaluation Action Plan, aimed at improving REACH registrations compliance, and, together with stakeholders, develop new priority areas to work on.

SGL Carbon SE is currently evaluating various strategic options for the Business Unit Carbon Fibers (CF). These include a possible partial or complete divestment of the Business Unit. In a first step, potential interested parties shall be approached with the general data of the Business Unit to determine their interest in an acquisition. If there is sufficient interest, a structured transaction process will be carried out in a second step. Overall, a share of sales amounting to around € 179.6 million after nine months in 2023 (9M 2022: € 269.0 million) is therefore under review. The CF sales share corresponded to 21.9% of SGL Carbon's consolidated sales after nine months in 2023 (9M 2022: 31.5%). Adjusted EBITDA of the Business Unit excluding the result from joint ventures amounted to minus € 10,9 million after nine months in 2023 (9M 2022: € 27,9 million). Despite the operating loss of CF after nine months in 2023, SGL Carbon maintains its guidance for fiscal year 2023. This shows the positive development of the three other business units and the resilience of SGL Carbon's business model.

Carbon Fibers manufactures textile, acrylic and carbon fibers as well as composite materials at seven locations in Europe and North America. Following the temporary drop in demand for carbon fibers from the important wind industry market, the Business Unit's sales and earnings fell significantly in the course of fiscal year 2023. Due to the importance of the wind industry for the European Green Deal, SGL Carbon and many experts assumed that the wind industry recovers quickly. Unfortunately, this is currently not the case. Even if demand picks up, the company assumes that Carbon Fibers will need additional resources to remain competitive in the international market environment and to exploit market opportunities in the best possible way. Against this background, SGL Carbon is reviewing all possibilities to support a positive further development of the Carbon Fibers Business Unit.

Der Vermittlungsausschuss von Bundestag und Bundesrat hat am 21. Februar zum Wachstumschancengesetz getagt. Nach der Verabschiedung des Bundestags am 17. November 2023 wurde der Vermittlungsausschuss Ende November mit der Begründung einberufen, dass die Änderungsvorschläge nur punktuell übernommen und kurzfristige Ergänzungen vorgenommen wurden.

Der gestern beschlossene Kompromiss beinhaltet zwar verschiedene steuerliche Erleichterungen, Förderungen von Investitionen und Bürokratieabbau, streicht aber die zentrale Klimaschutz-Investitionsprämie. Das Entlastungsvolumen beläuft sich nach ursprünglich angestrebten sieben Milliarden Euro nur noch auf 3,2 Milliarden Euro. Der Kompromiss muss nun noch durch Bundestag und Bundesrat bestätigt werden – dieser Schritt steht nach wie vor auf der Kippe.

Als Wirtschafts- und Arbeitgeberverband der baden-württembergischen Textil- und Bekleidungsindustrie sieht Südwesttextil den Beschluss des Vermittlungsausschusses als fatales Signal für die Wirtschaft. Hauptgeschäftsführerin Edina Brenner erklärt: „Die Verabschiedung des Wachstumschancengesetzes in seiner ursprünglichen Form hätte entscheidende Impulse für Wachstum und Bürokratieabbau gesetzt – für alle Unternehmen. Mit Blick auf die großen Herausforderungen unseres Wirtschaftsstandorts, die nicht zuletzt der Jahreswirtschaftsbericht unterstreicht, ist der Kompromiss ernüchternd.“ Dass auch über diesen Kompromiss noch Uneinigkeit herrscht und sich eine Verabschiedung noch weiter hinauszögern könnte, kritisiert Südwesttextil und fordert: „In der aktuellen wirtschaftlichen Situation gilt es für alle demokratische Parteien, Initiativen für die Zukunft der deutschen Wirtschaft überparteilich so schnell wie möglich voranzubringen.“

• Revenues: 477.6 million euros (-6%)
• EBITDA before non-recurring items: 79.0 million euros (-15%)
• Net income: 32.6 million euros (-26%)
• Free cash flow before non-recurring items: 45.3 million euros
• Dividend: €0.36 per share

Lectra’s Board of Directors, chaired by Daniel Harari, reviewed the consolidated financial statements for the fiscal year 2023. Audit procedures have been performed by the Statutory Auditors.

Currency changes between 2022 and 2023 mechanically decreased revenues and EBITDA before non-recurring items by 3.9 million euros (-3%) and 1.7 million euros (-8%) respectively in Q4, and by 11.2 million euros (-2%) and 4.8 million euros (-6%) respectively in the year, at actual exchange rates compared to like-for-like figures.

OUTLOOK
While the 2023 full-year results were affected by the adverse environment, they also attest to the substantial improvement in the fundamentals of the Group's business model, which will have a positive impact on 2024 results. Persistent macroeconomic and geopolitical uncertainties could nevertheless continue to weigh on investment decisions by the Group's customers.

While the most recent indicators seem to suggest that the situation is unlikely to deteriorate further, the timing and magnitude of a rebound in new system orders remain uncertain.

Outlook for 2024
To facilitate analysis, the accounts of Lectra excluding the Launchmetrics acquisition ("Lectra 2023 Scope") will be analysed separately from the Launchmetrics accounts in 2024.

The Group has based its 2024 objectives on the exchange rates in effect on December 29, 2023, in particular $1.10/€1. When converting 2023 results using the exchange rates retained for 2024, 2023 revenues are mechanically reduced by 4.7 million euros (to 472.9 million euros) and 2023 EBITDA before non-recurring items is reduced by 2.2 million euros (to 76.8 million euros). Thus, for the Lectra 2023 Scope, the comparisons between 2024 and 2023 printed below are based on constant exchange rates.

At this early stage of 2024, continuing low visibility regarding orders and revenues from new systems makes it impossible to predict the actual timing and scale of the future rebound in this area. On the other hand, visibility is high for recurring revenues, which accounted for 68% of total revenues in 2023 and will continue to grow in 2024.

In light of the above, Lectra has set as its objective for 2024, for the Lectra 2023 Scope, to achieve revenues in the range of 480 to 530 million euros (+2% to +12%) and EBITDA before non-recurring items in the range of 85 to 107 million euros (+10% to +40%).

The low end of the revenues range is based on the absence of a rebound in new systems orders, which would remain stable in 2024 relative to 2023, with a 6% decline in revenues from perpetual software licenses, equipment and accompanying software and non-recurring services, as the order backlog was lower on December 31, 2023 than a year before.

The high end of the revenues range reflects a gradual rebound in new systems orders, which at year-end 2024 would be back to year-end 2022 level.
 
In addition, Launchmetrics revenues (for the consolidation period from January 23 to December 31) are projected to be in the range of 42 to 46 million euros, with an EBITDA margin before non-recurring items of more than 15% (assuming an exchange rate of $1.10/€1).

In the fourth quarter of 2023 Italian textile machinery orders index, drawn up by the Economics Department of ACIMIT, the Association of Italian Textile Machinery Manufacturers, appears to be stationary compared to data recorded for the same period in 2022. In terms of absolute value, the index stood at 82.4 points (basis: 2015=100).

This is the result of an upswing in orders from foreign markets, counterbalanced by declining orders on the domestic front. While orders in Italy decreased at 18% rate, a 4% increase was observed abroad. The absolute value of the index on foreign markets amounted to 77.9 points, whereas it came in at 126.2 points domestically. Overall for the fourth quarter, the average order backlog yielded 3.7 months of assured production.

For the whole 2023 year, the index declined 25% overall compared to the 2022 average (absolute index of 82.4). On the home front however, the index dropped 24% (absolute index of 124.5), while slipping 25% abroad (absolute index of 78.4).
 
ACIMIT president Marco Salvadè commented: "The orders index for October – December 2023, as elaborated by our Economics Department, confirms an intake of orders that is still weak, with a negative trend in demand for machinery that is ongoing for the domestic market."

Nonetheless, the orders index abroad shows a slight increase. We estimate that the global geopolitical context is still a source of concern,” continued Salvadè, specifying that, “For the first nine months of 2023, Italian exports on major global markets (i.e. China, Turkey, India and the United States of America), confirm a widespread decline. However, some positive signs emerged in the fourth quarter of last year, as reflected by the latest orders index. For 2024 we expect a consolidation of this trend reversal."

Messe Frankfurt will extend its footprint in the Central Asian market by establishing seven brand events in Tashkent, Uzbekistan. The country’s strategic location as a crossroads of Europe and Asia positions it as a promising trade gateway and transportation hub, facilitating the economic development of neighbouring countries and access to the wider region. The company’s stronger presence in the market will promote business opportunities and foster the sustainable development of pillar industries, including cosmetics, textiles and clothing, automotive, logistics and transportation.

Uzbekistan has a promising consumer market with significant potential. It is the largest in Central Asia and is expected to increase due to population growth, rising incomes and the modernisation of economic and industry sectors.
 
The nation has actively sought to diversify its economy in recent years, undertaking reforms for greater entrepreneurial freedom and opening up to more international and regional cooperation. The country already exports precious metals, textiles and agricultural produce. It imports machinery, equipment, means of transportation, and vehicle components from foreign trading partners. Attracting overseas investment is also apparent through incentives such as tax benefits, reduced import duties and simplified procedures for overseas investors.
 
In addition, shifting global supply chains and trading patterns could also drive opportunities in the region. The nation benefits from its geographical location owing to its position between Asia and Europe, to which the Uzbek Government recognises the prospects of investing in infrastructure, such as transportation and logistics, to create an efficient transit hub. Against this backdrop, China acknowledges the importance of developing routes along the Belt and Road while Europe has expressed a readiness to support Uzbekistan’s efforts to diversify transport corridors.

Line-up of shows include:

• Automechanika Tashkent; Futuroad Expo Tashkent; and, Scalex Tashkent: 23 – 25 October 2024
• Heimtextil Uzbekistan; Texworld Tashkent; and, Apparel Sourcing Tashkent: 6 – 8 November 2024
• Beautyworld Central Asia: 21 – 23 November 2024

Archroma introduced Super Systems+. These end-to-end systems combine fiber-specific processing solutions and intelligent effects to help textile and apparel brands, retailers and mills positively impact their economic and environmental sustainability.

Archroma’s Super Systems+ suite encompass wet processing solutions that deliver measurable environmental impact; durable colors and functional effects that add value and longevity to the end product; and technologies that eliminate harmful or regulated substances. It will allow brands and mills to achieve their desired level of sustainability through measurable resource savings and cleaner chemistries.

Products and technologies that are be used in Super Systems+ solutions include: AVITERA® SE for resource savings, an improved cost-to-performance ratio for cotton and its blends and chlorine fastness; DIRESUL® EVOLUTION BLACK for shade and wash-down effects on black denim and an overall impact reduction of 57%*; aniline-free** DENISOL® PURE INDIGO 30 LIQ for authentic blue denim; ERIOPON® E3-SAVE all-in-one auxiliary for resource-intensive polyester dyeing that reduces processing time and conserves water and energy; and PHOBOTEX® NTR-50 LIQ for bio-based, PFAS-free, formaldehyde-free and crosslinker-free durable water repellence.

*As determined by Ecoterrae, a leading Spain-based sustainability consulting firm, through a Life Cycle Analysis (UNE-EN ISO 14044:2006) at the synthesis stage, using the ReCiPe 2016 Impact calculation methodology.
**Below limits of detection according to industry standard test methods.

The testing service provider and research partner Hohenstein is joining the Innovation Park for Artificial Intelligence (IPAI) in Heilbronn. There are already points of contact with AI applications in some interdisciplinary research projects. In addition, there is the cooperation with the Munich-based start-up Sizekick and its AI-based technology for size recommendations, which aims to reduce size-related returns in online fashion retail.

"We expect the connection to the IPAI AI network to provide us with valuable impulses to remain fit for the future," explains Hohenstein CEO Dr. Timo Hammer, "This unique platform brings together a wide variety of players with their experience and knowledge. New ideas, projects and even products can be generated with great dynamism in the network as an intelligent response to future requirements. Because one thing is clear - artificial intelligence is THE key technology of the future".

The Innovation Park for Artificial Intelligence (IPAI) in Heilbronn (www.ip.ai) sees itself as an innovation platform for applied AI and a German lighthouse project with international appeal. The center is intended to map the entire AI value chain, from the qualification of specialists to the application of ethically responsible AI. The aim is to use the AI ecosystem to bring together companies, start-ups, research institutions, scientists, and public institutions and to secure Germany's digital independence and competitiveness in a key future technology.