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Basler implements cost-cuts as orders slow

30 Mar 2023

But machine vision components provider to pay shareholder dividend following record sales last year.

Basler, the Germany-based supplier of components used in machine vision, has confirmed record-breaking sales of €272 million for 2022, but also announced cost-cutting plans amid a “very gloomy” macroeconomic environment.

Up 27 per cent on the 2021 figure, last year’s revenues generated pre-tax earnings of €28.3 million - and have prompted the Ahrensburg firm’s management to propose paying out a shareholder dividend of €4.2 million.

But with market demand slowing during the year, particularly in Asia and the Americas, Basler said that its order intake dropped 23 per cent year-on-year, to €248 million.

Planned actions now include a recruitment freeze, and a temporary reduction in working hours affecting some of its employees in Germany.

Transitional year
Due to that slowdown in demand during the year and a simultaneous increase in sales as a result of better availability of semiconductor components, Basler’s order backlog decreased to just over €102 million as of the end of last year.

The company added that the continued weak level of incoming orders from Asia and the US has made its managers cautious about the company’s prospects for the rest of the year.

“The management is familiar with such market cycles from the past and, against this backdrop and the currently weak economic forecasts for 2023, expects a transitional year with continued geopolitical uncertainties,” it said.

With that in mind, the firm’s executive team has pencilled in expectations that sales will drop to somewhere between €235 million and €265 million this year, with increased personnel costs eating into profits.

And as a result, Basler’s management and supervisory boards have decided to implement a savings program.

“This program provides for a restrictive investment behavior and material cost management,” announced the firm. “With regard to personnel expenses, further increases in headcount will be halted until further notice, and variable compensation for the management board and senior management will be suspended.”

That will be complemented by a temporary reduction in working hours for some employees at the firm’s German sites that is planned to begin in the June quarter, and intended to flexibly manage expenses during the year in line with incoming orders.

“In addition, the company's liquidity is to be preserved in order to be resilient to geopolitical uncertainties,” Basler stated.

Long-term targets unchanged
Despite the anticipated slowdown this year, the company’s leadership remains confident in its longer-term prospects and sales targets.

“Although the current macroeconomic and geopolitical outlook for the current fiscal year is very gloomy, the company is highly motivated, determined, and optimistic to achieve its mid-term target,” it said.

Those targets include hitting the annual sales milestone of €400 million in 2025, alongside increased profitability.

“This will require the markets to pick up again in the second half of the year at the latest, and return to their long-term growth path in the following years,” it admitted. “The general trend toward greater automation and the increasing use of machine vision outside the factory support this assumption.

“Despite the current headwinds, the entire team is working with passion and dedication to transform the company into a full-range provider with solutions expertise.”

• Following the latest update, Basler's stock price dropped in value by around 17 per cent on the Xetra exchange in Frankfurt.

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