Growth at LAPP in difficult times - Annual Report 22/23 LAPP

2.9 percent growth in sales, massive investments

LAPP Grows in Difficult Times

Stuttgart, February 21, 2024 - LAPP looks back on the past financial year with satisfaction. The global market leader for integrated solutions in the field of cable and connection technology increased its turnover for the past financial year 2022/2023 (October 1 - September 30) by 2.9 percent to 1.92 billion euros. The number of LAPP employees worldwide rose to 5,551 as of 30 September 2023.

"In view of the weakening economy and despite the increasingly difficult situation in the second half of the year, we are satisfied with the financial year. We are proud of the sales growth we have achieved", says Matthias Lapp, CEO of LAPP Group. Growth excluding negative exchange rate and copper price effects was up 8.2 percent. "Our year was characterized by making the company even more weatherproof. We have invested heavily – not only in making our production and logistics more resilient, but also in gearing them towards future growth and strengthening our innovative power." The Stuttgart-based family business plans to invest several hundred million euros in production capacities, technologies, and digitalization during the current Strategy 2027 period.

Robust Development in Europe

In Europe, which continues to account for the largest share of the company's sales, LAPP defied the difficult economic environment and increased its turnover. Inflation caused procurement prices to rise, particularly for raw materials, and there were also cost increases in transport logistics. "Increasing regulation, planning uncertainties, high energy prices and, last but not least, the shortage of skilled labor are causing us great concern" emphasizes Matthias Lapp. LAPP is therefore increasingly focusing on growth outside Europe.

Massive Investment Program

With a total of 67 million euros, LAPP invested heavily in its productions and technologies worldwide – an increase of 66 percent compared to the previous year. This is LAPP's response to the increasing decoupling of markets, which is clearly noticeable on all continents. The aim is to further optimize product availability and portfolio for customers and to position the company for growth. "It's good that we already have a presence in all major markets around the world and are further improving our proximity to customers with these massive investments", says Matthias Lapp. The focus was on the expansion of Chinese, Indian and European production sites, the increase of production capacities in France, Italy and Switzerland and the development of warehouse and logistics space in the USA. For example, LAPP opened a second plant in Shanghai, which specializes in data cables and Single Pair Ethernet solutions. In Bhopal, LAPP now produces its own plastic compounds for the sheathing of branded cables, for example for ÖLFLEX® connection and control cables, thereby increasing its vertical integration. LAPP has also opened its first production site in Mexico.

Growth Drivers at LAPP

Strong growth was recorded in the area of electromobility. The business saw an increase in turnover of around 35 percent. A new production plant was set up in the Czech Republic in order to further expand business with new OEM customers. Other growth drivers last year included solutions for the battery business. LAPP products are not installed in the batteries themselves, but the connection solutions are used for corresponding automation systems in factories and for energy storage systems. LAPP secured exciting projects in South Korea and the USA. Business with data solutions for industrial communication also grew significantly. This was driven by the trend towards factory automation. In the APAC region alone, LAPP achieved an increase of 20.5 percent.

Financial Year 2023/2024: Growth despite Difficult Signs

"Due to the ongoing economic challenges, particularly in our home market of DACH, we expect a weaker order intake in the current financial year, which we will have to actively counteract in terms of costs and sales. In general, no growth is not an alternative for us", emphasizes Matthias Lapp. LAPP is therefore continuing to focus on North America and Asia, but also sees further growth potential in Europe and the Middle East. "We will continue to strengthen our global competitiveness and create attractive offers for customers locally", says Matthias Lapp, adding: "In our home market of Germany, we also need the help of policymakers to achieve this. The cost-intensive location factors are making it increasingly difficult for us to plan and operate with foresight. I would like to see reliable guard rails instead of sticks between our legs.