Profits up at machinery manufacturer Claas

By: Chris McCullough

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IT’S been quite a good year for the family owned Claas Group as latest accounts show a substantial increase in profitability during the 2017/2018 financial year

German company has excelled with an overall sales increase of 3.4 percent to €3.889 billion (US$4.42 billion).
German company has excelled with an overall sales increase of 3.4 percent to €3.889 billion (US$4.42 billion).
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Despite customer purchasing setbacks including farm produce market uncertainties and droughts in many areas, the German company has excelled with an overall sales increase of 3.4 percent to €3.889 billion (US$4.42 billion).

The increased revenue was mainly boosted by sales in the core markets of Germany, France and the UK. This in turn increased overall profits before taxes by 22 percent to €226 million (US$257 million), up from €186 million (US$211 million) the previous year.

Over the past 10 years, the company’s spending on research and development has doubled and reached a new record level of €233 million (US$265 million), a rise of 7.3 percent.

During the year, this resulted in the launch of the new Jaguar Terra Trac, the first forage harvester with integrated crawler tracks, plus the new generation Tucano including Montana hillside versions.

Claas has invested heavily in its fixed assets which included modernising the main assembly line at its tractor factory at Le Mans, plus the construction of a new high-bay warehouse at the world parts centre at Hamm.

Also, a new machinery test centre at Harsewinkel, the start of the redevelopment of the Claas UK headquarters at Saxham and the distribution centre for Claas France completed this investment which totalled €160 million (US$182 million).

Hermann Lohbeck, speaker of the Claas executive board, said: "We have continued our growth in a volatile market environment and once again significantly improved our profitability. A strong impetus originated from Germany and Western Europe in particular."

The global market for professional agricultural technology developed stably this year, in line with association expectations. Although Claas noticed improved revenue in Germany, France and the UK, there was a slight decline in Eastern Europe.

It was a mixed picture for sales in the countries outside of Europe with sales in North America increasing in the local currency, but China recorded a decline as a result of market uncertainty.

The number of employees around the world grew slightly to 11,132 on September 30, 2018 compared to 10,961 the previous year. A similar trend can also be seen in Germany where 5,295 employees were employed by the end of the business year which was an increase of 195.  

Looking ahead into the future Claas says it expects stable development in the global agricultural engineering markets for the current 2019 fiscal year, despite regional uncertainties.

The increasing demand for professional agricultural technology continues to be a driving force behind the German company’s forecast.

It does admit that the general risks lie particularly in global trade disputes that also affect agricultural goods. In view of this market assessment, Claas expects sales revenue slightly above the level of the previous year for the current business year and a stable result before taxes.

Only time will tell how any uncertainties or trading difficulties thrown up by Brexit will affect the business dealings of Claas post March 2019 when the UK is scheduled to leave the European Union. 

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