How did LAPP manage to achieve such growth in these difficult times?

It wasn’t easy. We are therefore proud of this sales growth and I would like to thank all employees who have contributed to this success. Our figures would actually be much better. Without negative exchange rate and copper price trends, our growth would have been as much as 8.2 per cent. The financial year was characterised by making our 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. We plan to invest several hundred million euros in production capacities, technologies and digitalisation during the current Strategy 2027 period.

Matthias LAPP
Matthias Lapp, CEO of the LAPP Group.

Investments as a growth driver?

This is an important component of our strategy. In the past financial year, we invested a very substantial total of 67 million euros in production and technologies – an increase of 66 per cent compared to the previous year. This is our response to the increasing decoupling of the markets, which is clearly noticeable on all continents. Our aim is to further optimise product availability and portfolio for our customers and to position ourselves for growth. Although we already have a presence in all major markets around the world, we need to further improve our proximity to customers. We therefore focussed on expanding our Chinese, Indian and European production sites, strengthening our production capacities in France, Italy and Switzerland and expanding our warehouse and logistics space in the USA.

What are some specific examples of this?

We opened a second plant in Shanghai, for example, which specialises in data cables and Single Pair Ethernet solutions. In Bhopal, we now make our compounds ourselves. This means that we now produce the plastic compounds required for the sheathing of our branded cables, for example for ÖLFLEX® connection and control cables, ourselves, thereby increasing our vertical integration. We also opened our first production site in Mexico.

We are reading more and more about economic problems, especially in Central Europe. Was LAPP not affected by this?

Of course it was. LAPP is not an island of the blessed. We are also feeling the effects of the weakening economy, which hit us particularly hard in the second half of 2023. Inflation caused procurement prices to rise, especially for raw materials, and there were also cost increases in transport logistics. And in Germany, we are very concerned about increasing regulation, planning uncertainty, high energy prices and, last but not least, the shortage of skilled labour. We are therefore increasingly focussing on growth outside Europe.

In which sectors are there nevertheless great opportunities for LAPP?

The electromobility sector has grown strongly. The business recorded an increase in turnover of around 35 per cent. In order to further expand growth with new OEM customers, we have set up a new production unit in the Czech Republic. Other growth drivers last year included solutions for the battery business. Although our products are not installed in the batteries themselves, the connection solutions are used for corresponding automation systems in factories and for energy storage systems. We can look forward to exciting orders in South Korea and the USA. Our business with data solutions for industrial communication also grew significantly. This is driven by the trend towards factory automation. In the APAC region alone, we achieved an increase of 20.5 per cent.

Are there any initial trends for the current 2023/2024 financial year?

Due to the ongoing economic challenges, we anticipate a weaker order intake for the current financial year, particularly in our home market of DACH, which we will have to actively counteract in terms of costs and sales. In general, no growth is not an option for us. Our focus therefore remains on North America and Asia, but we also continue to see growth potential in Europe and the Middle East. We will continue to strengthen our global competitiveness and create attractive local offers for customers.

Is there any cause for concern?

No, LAPP is a very healthy company and we have positioned ourselves well for the challenges of the future.

The past financial year was the first financial year under your responsibility as CEO. How did you experience it?

It was very challenging, but also a lot of fun. We have positioned ourselves well in recent years, and now we need to continue to implement the strategy and develop it consistently. I am delighted to be able to help shape our family business as CEO. And I am grateful to have such an outstanding team. Our employees have achieved a great deal – that was fantastic.