6 The economic complications caused by the coronavirus pandemic continued to be felt in 2021, albeit considerably less than in the previous year. Added to that, the global shortage of raw materials and transport capacity was particularly problematic. Due to the lack of availability, not only did our freight costs for container transport more than triple but the cost of buying our thousands of components in wood, steel, injection-moulded plastic and die-cast aluminium went up rapidly, because the prices of the raw materials used to make them had increased many times over. In order to maintain our production and delivery capability, we temporarily had to massively increase our stocks of materials, especially at Girsberger GmbH in Germany but also at Girsberger AG in Switzerland for our solid wood trading. This huge build-up of stock represented an additional, unplanned investment, which put the liquidity of the whole Group under great strain. During the following financial year, 2022, the global shortage of raw materials and the associated increased cost of materials became even more acute. We therefore needed to keep our stocks of materials at a constantly very high level. Thanks to taking this capital-intensive action, we managed to maintain ongoing availability in our solid wood trading business, and, most importantly, ensure that all our Office and Home product ranges continued to be available with no interruption and our normal delivery times. With the number of incoming orders generally good, our production plants were working at close to full capacity, and for long periods even had more orders than they could cope with. However, there was in fact a negative reason for this excessive strain on our working capacity. Our customers kept postponing delivery of their orders on a scale we had never seen before. The reason for these multiple postponements of the delivery date was that our customers’ renovations and new building work could often not be completed on time because of the shortage of raw materials. In that sense, the shortage of raw materials also had a significant impact on our productivity. That was because the repeated postponements of delivery dates by our customers involved all our production units in a great deal of additional effort: from the sales team to production planning and control, manufacturing, packaging, dispatch and installation at the customer’s premises. It resulted in countless non-productive working hours for which we could not charge. There were also additional costs for external support staff and extra trips to procure and deliver goods, and these costs could also not be passed on. As a consequence of these complications, and the hugely increased cost of materials, only part of which could be passed on, the results for the whole Group in the 2022 financial year were not satisfactory: adjusted for currency and consolidation effects, the figures for 2022 show an increase in total net turnover of +3.2% compared with the previous year. With a company profit after direct taxation of just CHF 7000, only a break-even result was achieved. Since then, the availability of raw materials has improved considerably. However, we are not expecting our material costs to fall, due to the sharp increase in energy prices. The trends that we have seen in the office furniture market over several years are expected to continue: especially in big cities, office space is increasingly being turned into living space, while living space at home is becoming working space. As a result of this trend, personal workspaces will be further reduced in number, and shared workspaces will be smaller. Consequently, companies’ need for office furniture will be less. This in turn means that net sales prices will remain under pressure. Nevertheless, this is counteracted by some current developments that are beneficial to us. There are two fundamental aspects to this: firstly, the social pressure to act in an eco-friendly way and do business sustainably will continue to increase. This means that our procurement criteria will become more and more important, including where exactly our office furniture comes from and how it was really made. The second fundamental issue is purely economic in nature: there is not yet any sign of an easing in the shortage of specialist workers, and it is impossible to say how long the present acute shortage will continue. However, while it continues, every company and organisation is obliged to try to make themselves as appealing as possible as an employer. One of the consequences of this is Business performance of the Girsberger Group Review of 2021|2022 Outlook for the 2023 financial year
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