"I would like to express my sincerest thanks on behalf of the Executive Board to all our staff worldwide for their commitment, cooperation and willingness to keep operations running in spite of the difficulties prevailing."
Wolfgang Leitner
Letter to the shareholders
Dear Ladies and Gentlemen,
dear Shareholders,
dear Colleagues:
Development of the ANDRITZ GROUP in the 2020 business year was, of course, marked by the Covid-19 pandemic and by the global economic downturn it has caused. All our business areas were affected by the negative economic impact of this crisis – albeit to different extents. Nevertheless, we succeeded largely in limiting the financial impact, especially due to the enormous flexibility of all our employees.
In this context, I would like to express my sincerest thanks on behalf of the Executive Board to all our staff worldwide for their commitment, cooperation and willingness to keep operations running in spite of the difficulties prevailing. This alone enabled us to master the many challenges of the Covid-19 crisis well and achieve a solid business result overall in the reporting year.
Of course, the safety and good health of our employees has always been our highest priority during the pandemic. We started buying protective masks worldwide immediately at the end of January 2020. Our Italian subsidiary ANDRITZ Diatec not only developed a new production line for face masks very quickly – and a considerable number of these lines have already been sold worldwide – but also produced masks as well for the ANDRITZ GROUP.
We organized repatriation of our staff from job sites in countries with inadequate medical care. In spite of very adverse conditions in some cases, we succeeded in evacuating all our staff where this was necessary and bringing them home. We have implemented comprehensive rules of conduct and health protection measures at all our locations. As a result, virtually all our manufacturing operations were able to keep on working to a large extent throughout the pandemic, and we were able to continue deliveries to our customers. And on our job sites worldwide, our customer projects continued to make progress as far as possible thanks to the enormous dedication of our employees worldwide.
Due to the solid order backlog that we had at the beginning of the reporting year and the fact that we were largely able to maintain our operations, we succeeded in keeping our total revenue for the 2020 business year at a favorable level. At 6.7 billion euros, it was basically unchanged compared to the figure for the previous year’s reference period. And the order intake of the Group also saw solid development considering the general economic environment and reached a reasonable level at around 6.1 billion euros. Nevertheless, it was well below the previous year’s reference figure of just under 7.3 billion euros, which included two large orders. All business areas recorded a decline in order intake, although to different extents.
In the Pulp & Paper business area, the Covid-19 related sharp increase in worldwide demand for nonwovens to produce hygiene articles had a very positive effect on development of the order intake. Our Nonwoven division, which covers all activities in nonwovens within the Pulp & Paper business area and of which ANDRITZ Diatec is also a part, even achieved a new record in order intake. Service and aftermarket business for the Group developed satisfactorily, although there was a decline here too because of the restrictions on travel worldwide as well as some constraints on production at our customers' facilities due to Covid-19.
As we do not anticipate any substantial change in the overall economic environment during the 2021 business year and only expect a slight recovery in the markets we serve, we must adapt our cost structures on a sustained basis to the lower level of global economic activity to be expected.
This concerns all four of our business areas, although much more extensive adjustments are needed in the Metals business area than in the rest of our company due to the structural problems already present in the global steel and automotive industries before the Covid-19 crisis. Aside from Covid-19, the Hydro business area is also struggling with a much smaller market volume for hydropower as a result of the continuing boom in solar and wind energy plants. With the measures implemented, we are confident that we have defined a future-proof structure that will largely be put into place in the course of 2021.
Due to our cautious financial policy, we have had high liquidity during the crisis and were able to fulfill all of our obligations at all times without having to enter into talks with banks or government institutions to protect our liquidity. With gross cash of around 1.7 billion euros, we are very well positioned and hence able to continue pursuing our long-term growth targets in spite of the current general economic crisis.
As far as the focus in the coming business year is concerned, we are concentrating on increasing our ability to compete in the automotive and steel sectors in addition to adapting to the lower business volume expected. The goal is to achieve a sustainable turnaround in the Metals Forming segment. We will not only continue our research and development projects in all business areas, but also intensify work on the most promising of them and keep a close eye on our business environment, looking out for possible new acquisitions. Similarly, we will continue our investment activities without constraint in order to keep our production facilities right up to date.
On behalf of the Executive Board, I would like to thank all of our employees for their commitment as well as our numerous shareholders at home and abroad and our customers worldwide for the trust they have placed in us.
Wolfgang Leitner
President and CEO
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