Reduced revenue and profit incomes were observed by Sto during the initial half of the year
Sto, the renowned paint and insulation specialist, has reported a revenue decrease of approximately 2% from January to June 2023, totaling 777 million euros. This decline, compared to the previous year, is due in part to a weather-related sales gap in the first quarter that could not be made up in the second quarter.
The management, led by CEO Rainer Hüttenberger, Deputy CEO Michael Keller, Finance Director Désirée Konrad, and Process Technology and Innovation Head Jost Bendel, has initiated a cost-cutting program to counteract the negative business development and reduced utilization. This program includes wage measures and a more restrictive hiring policy.
As a result of these measures, the company's employment numbers have decreased, with around 4% of the workforce shrinking, mainly outside Germany. The operating result fell by almost 16% compared to the previous year, to 25.6 million euros. Despite this, the profit attributable to shareholders fell from 20.4 million euros to 16.3 million euros.
Sto's projected revenue for the year is 1.57 billion euros, a decrease of approximately 2.5%. The management has so far achieved about half of its minimum target for 2025, which remains unchanged at 50 to 70 million euros.
Industry experts expect minor positive effects from the special fund for infrastructure projects, but Sto does not anticipate significant benefits from this fund announced by the German government in 2023. The management has been countering increasing competitive and pricing pressure with cost savings, particularly in personnel.
Despite the challenges, the management of Sto confirmed its forecast for the full year. The cost-cutting measures have not been limited to Germany and were initiated by the management last year. The company does not expect major improvements until at least 2026.
At the end of June, Sto still employed around 5,500 people. The management's forecast for the full year, however, is made more difficult due to growing uncertainty. Sto, a colour and insulation specialist, will continue to navigate these challenges with a focus on cost savings and strategic initiatives to ensure long-term success.
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