Blum – growth with innovative fittings systems
and services

Creative products, new services and committed and well-qualified employees make the 2007/2008 business year a success.

Hoechst, Austria – July 2008

Fittings manufacturer Julius Blum GmbH achieved a further slight growth in the 2007/2008 business year ended 30 June 2008. In comparison to the last business year, the turnover of the entire Group increased by 3.4 % to 1,120.2 billion euros. Although the figure is below that targeted by the fittings specialist, it was still another successful financial year considering the global economic framework. On average, 5,070 employees all over the world contributed to the operating result.

Developments in markets

The second half of 2007 developed well, but growth slowed in important markets after the turn of the year. Economic activity differed greatly over the year in Western European sales regions, whereas business went very well throughout the year in Eastern Europe and Asia.
The most difficult situation we were facing in our U.S. market. It was triggered by the real estate crisis and led to falling sales. This development in Blum’s largest market was further aggravated by the weakness of the dollar against the euro.

Inspiring products

The addition of BLUMOTION – that closes doors and drawers softly and silently – to drawer, hinge and lift systems has become a standard feature of kitchen cabinets and furniture in many markets. There is also a growing trend towards comfortable, electrically driven systems. More and more importance is being attached to the design of the interior of kitchen furniture. This can be seen in the good response to Blum’s TANDEMBOX intivo drawer system. The system offers kitchen manufacturers great scope for differentiation with various materials.

The growing importance of services

Customers and partners regularly use Blum’s programme of electronic services that are available on the internet. Currently, the company provides information on orders, products and marketing measures online. The fittings manufacturer’s presentation on the internet is available in more than 20 languages.

Material prices

The price of raw materials was high in the last business year, but it at least remained at a relatively stable level. However, Blum is currently faced with increases in steel prices of more than 40%. At least some of these costs will have to be passed on to customers.

Investments in production plants and sales organisations

Employees moved into the new office building at Plant 2 early 2008. The extension and renovation work have been completed at Plant 6, and most important production processes have been moved to the plant. The last business year also saw the start of a third building phase for a new Zinc Diecasting Department at Plant 5. Good progress is being made on Blum’s largest building project, Plant 7 in Dornbirn. The new plant for production and logistics should be completed by summer 2009. Investments have also been made in the expansion of production facilities for TANDEM plus and in the enlargement of the Plastics Processing Department at Blum’s US plant. The decision to make these investments is currently helping Blum maintain its market shares, especially in view of the weakness of the dollar.
In August 2008, employees will move into the new main office in China, close to Shanghai, 2008. Construction work has been started on larger business premises in France. Construction work has also been started on a new office and warehouse at existing premises in Hungary. In the 2007/2008 business year, the investments of the Blum Group totalled 113.7 million euros, the major part of which was invested in the Vorarlberg.

Looking ahead to the 2008/2009 business year

Despite the unpredictability of the global economy, Blum’s plans for the 2008/2009 financial year are again characterised by guarded optimism. Blum believes that the greatest elements of uncertainty for the coming business year are the strength of the euro against other important currencies, the instability of the raw materials market and last but not least, the economic development on a global scale – particularly in the large American market.