Revenue Growth against a Backdrop of Massively Higher Energy and Raw Material Costs
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- Challenging 2022 financial year comes with a significant increase in energy prices
- Annual revenue of 1.323 billion euros with approximately 2,500 employees
- Increased equity ratio of 54.2% ensures independence as a family-run company
As a global company with an export percentage of 67%, the Koehler Group is dependent on global economic conditions to a large extent. Both high inflation and Russia’s war of aggression against Ukraine had a decisive impact on the company’s 2022 financial year. The fact that the family-run business is part of an energy-intensive industry meant that it was heavily affected by massively higher energy prices. Average annual energy prices on the market shot up by just under 170% in comparison to the preceding year. Against this backdrop of significantly higher energy and raw material prices in the 2022 financial year and the resulting price increases for products, the storied company earned annual revenue of 1.323 billion euros while employing approximately 2,500 people.
Revenue Growth as a Result of Massively Higher Energy and Raw Material Costs
According to statistics from the DIE PAPIERINDUSTRIE e. V. association, total sales by paper mills in Germany fell by 6.4% in 2022 compared to the preceding year. At the Koehler Group, the total sales volume for specialty paper came in at 557,619 tonnes in 2022, which was 1.8% lower than the preceding year – in other words, better than the industry trend. The German paper industry, as well as the Koehler Group, exports a large part of its products abroad, and is therefore subject to global economic and trade policy conditions. In comparison to the annual averages for 2021, average annual prices on energy markets surged by 167% for natural gas, 157% for black coal, and 54% for oil in 2022. Kai Furler, CEO of the Koehler Group, said: “The 2022 financial year came with serious challenges for us. The war of aggression in Ukraine turned global conditions on their head, and that’s something we felt right away as a company with global operations.” Despite the tense general situation, the Koehler Group invested more into research and development than the preceding year – a total of around 10.2 million euros, to be precise. This is in line with the company’s goal of researching sustainable solutions for a circular economy for the future and maintaining its image as a technological leader in the paper industry.
The 2022 financial year was a good year for the Koehler Group’s second pillar, that is, renewable energy production. Koehler Renewable Energy earned around 165 million euros. The division, which was founded over ten years ago, plans and operates renewable energy generation plants in Europe. The Koehler Group’s wind turbines, hydropower plants, photovoltaic systems, and biomass power plants brought the family-run enterprise a big step closer to its goal for 2030. Around 70% net of the power needs for the company’s paper production operations were generated from renewable sources in the previous financial year – the goal is for it to be 100% in 2030.
Increased Equity Ratio of 54.2% ensures Independence as a Family-Run Company
The Koehler Group was founded in 1807 and has been a family-run company from that moment to the present day. Koehler is currently in its eighth generation under the management of Kai Furler. In order to ensure that the family-run company will continue to be able to act independently in the long run, Koehler’s long-term goal is an equity ratio greater than 40%. With a figure of 54.2% in the previous financial year, this target was healthily surpassed with an increased balance sheet total, and the company’s equity ratio rose once again in comparison to the preceding financial year (2021 with 51.5%). The aforementioned equity ratio goal of over 40% will ensure the company’s independence.
Outlook for the Ongoing 2023 Financial Year
Like the previous financial year clearly showed, the Koehler Group is considerably subject to international factors due to the fact that its business operations are global. Accordingly, revenue trends need to be considered against this backdrop.
On a related note: It’s certainly no secret that paper production is an energy-intensive activity. Drying paper requires quite a bit of thermal energy, and running paper machines requires a lot of electricity. Not surprisingly, that is why the Koehler Group has been investing in the production of renewable power and steam for over 20 years. However, until sufficient energy is available from renewable sources, the storied company will need urgent support to limit energy costs so that its international competitiveness can continue to be guaranteed. With the current situation, the paper manufacturer’s international competitors have far lower energy costs in many cases, which provides them with a significant pricing advantage. The energy price cap recently announced by the German government will not be nearly enough to ensure the security of the energy-intensive industry’s jobs and sites in Germany.During the course of this ongoing financial year, the Koehler Group published its second sustainability report, doubling as a way for the company to communicate its sustainability strategy. The family-run company’s “2030 Sustainability Strategy” is its roadmap to continued sustainable growth, as well as the key to decoupling its growth from its environmental impact so that it can help make the UN’s Sustainable Development Goals a reality.The entire paper industry is being heavily affected by a considerable drop in incoming orders this financial year, and the Koehler Group was not spared from this trend either. It should be expected that this year’s annual revenue will be lower than the annual revenue for the 2022 financial year. Kai Furler adds: “Given that we are a solid family enterprise, the Koehler Group is perfectly positioned to weather even economically challenging times. This is largely down to our exceptionally high equity ratio, our healthy financing structure, and our successes in past financial years, which also form a sound foundation for our sustainable development as a company.”
Best regards
Alexander M. Stöckle Corporate Director Marketing & Communications Press Spokesperson
Koehler Holding SE & Co. KG
Tel: +49 7802 81-4749 Fax: +49 7802 81-5749 mailto:alexander.stoeckle@koehler.com