The international specialty glass manufacturer SCHOTT achieved positive financial results for the 2020/21 fiscal year: sales rose to EUR 2.5 billion, amounting to an increase of 13 percent, compared to the previous year.
Operating income (EBIT) also increased by EUR 102 million to EUR 390 million (+35 percent), resulting in a consolidated net profit of EUR 289 million (+45 percent). This positive development was particularly driven by exceptional demand in the household appliances sector.
Additionally, products for the pharmaceutical industry contributed to achieving these positive results. Despite the complications resulting from the pandemic, SCHOTT was able to realize its record investment of EUR 350 million; investments were made primarily at locations in Germany, China and the USA, which also resulted in over 1,000 additional jobs.
“Thanks to our diverse product portfolio, we were able to stay on course and successfully close out the fiscal year,” said CEO Dr. Frank Heinricht at the annual press conference in Mainz, adding, “With a new record investment of EUR 450 million, we are laying the foundation for further profitable growth in the coming years.”
However, rising energy, raw material, and logistics costs, as well as strained supply chains and chip shortages, pose new challenges for the company.
Growth strategy yields results, positive net liquidity
Through profitable growth and strong productivity increases, all business units contributed to overall earnings. Furthermore, investments from the last three years are also yielding results.
“Our strategy of investing well above depreciation is paying off,” said CFO Dr. Jens Schulte. “With net liquidity of EUR 79 million and an equity ratio of 41 percent – seven percentage points higher than last year – we are in a strong position.”
According to the balance sheet, the company created around 1,000 new jobs by the end of September, totalling to 17,300 current employees (+5 percent), with approximately 6,000 located in Germany.
Pharmaceutical solutions and products for household appliances and consumer electronics are top performers
In 2021, SCHOTT supplied pharmaceutical vials for over 5 billion doses of COVID-19 vaccines. Moreover, solutions for the pharmaceutical industry also developed well regardless of the pandemic. Pharmaceutical companies were particularly in demand for “high-value” products such as pre-fillable syringes, coated vials or ready to use packaging.
Many people redesigned their homes during the pandemic while “cocooning.” For SCHOTT, this meant double-digit growth rates for CERAN® cooktop panels and ROBAX® fire-viewing panels and flat glass used in ovens and microwaves.
Consumer Electronics also showed signs of growth. The increasing demand for premium smartphones had a positive effect on cover glass: SCHOTT’s specialty glass enables manufacturers like Samsung and Vivo to produce unique designs for extremely break-resistant covers and ultra-flexible cover glass for foldable cell phones.
Successful M&A activities and investments in focus markets
SCHOTT has set the course for the future with strategic acquisitions and divestments. By acquiring the American diagnostics company AMI, SCHOTT is building up expertise in the booming diagnostics market and strengthening its presence in the USA. The company also sold the Gemtron subsidiary in North America after deciding to focus its future flat glass business on Europe and South America.
In record time, SCHOTT established a production facility in China for FIOLAX® pharmaceutical tubing, making it the company’s first fusion site in the focus region at the same time. In India, the company also expanded FIOLAX® manufacturing to supply the Indian pharmaceutical industry and neighbouring countries with high-quality pharmaceutical glass.
The company also invested millions of EUR in a modern manufacturing facility at the Turkish flat glass site SCHOTT Orim in Bolu, which is scheduled to operate at the beginning of 2022. In Germany, more precisely in Müllheim, Baden, the company invested more than EUR 100 million in a new manufacturing facility for polymer syringes, including those used for mRNA vaccines. As the largest investment project is the history of the company, production is scheduled to start in Spring 2022.
“Despite the corona crisis, all of our projects remain on track thanks to the incredible commitment of our teams,” said CEO Heinricht.
Outlook: innovation as a driver of growth
For the first time, the United Nations has dedicated a material as the motto of the year, designating 2022 as the “UN International Year of Glass.” Thanks to its versatility, glass is a pioneer in many high-tech applications, offering unimaginable possibilities for current challenges in today’s society.
More computing power for microchips is made possible by high-precision FLEXINITY® connect glass wafers, which will replace polymer as a material.
Leading smartphone manufacturers such as Vivo will launch the first devices with the extremely break-resistant Xensation® α cover glass.
New CERAN® Luminoir glass ceramic cooktops will bring new lighting designs to smart kitchens.
Further steps towards climate neutrality
By switching to certified green electricity, SCHOTT has come much closer to reaching its goal of becoming climate neutral by 2030. With ambitious projects, some of which are publicly funded, the company is developing new technology that can heat energy-intensive melting tanks without using fossil fuels in the future. The company is thus setting new standards for the glass industry.
Record investment despite increasing costs
SCHOTT expects to grow between three to five percent within the new fiscal year, which has started successfully. “The rising energy and raw material costs present us with major challenges. In order to offset these effects, we will need to increase efficiency and raise prices,” said Heinricht.
Nevertheless, SCHOTT remains committed to its profitable growth strategy and is planning another record investment of EUR 450 million. Among other things, the company aims to triple the production of pharmaceutical solutions in China. Heinricht added “We have a balanced portfolio and offer customers innovations for future technologies. Our solid balance sheet and planned investment projects leave me optimistic that we will perform well in the upcoming fiscal year once again.”