Dear employees, dear colleagues,
Looking back on the year 2024, we must speak of a challenging phase. Sales in the entire industry unfortunately did not fully meet our expectations. The year did not get off to a particularly good start. Prices in key assortments fell, and the market seemed saturated. Admittedly, in the second half of the year, the situation improved, and the outlook became better. Sales stabilized and were even higher than the previous year. Despite this improvement in the second quarter, the market remains highly competitive, and the oversupply from abroad affects us.
The last two years can be divided relatively clearly: The period from 2020 to 2022 was a clear boom phase in the Swiss construction industry due to the changes brought about by Corona and the procurement market. This was followed by a correction phase in 2023. The past year 2024, I would describe as a year of consolidation. The earnings situation fell short of expectations. Nevertheless, we at the Kuratle Group decided to focus on the opportunities. I am convinced that the year 2024 will remain in our memory as a formative year because we were able to set important courses. I will report on these in the course of the year.
A lot has changed in the European market. In comparison, the Swiss market is doing better. When I look at the pure quantities in the domestic market, we can be satisfied. We remained economical. But in the weak markets of Germany and Austria, the situation is different. Here, too, the environment has become difficult, including prices. These two markets, together with France, will continue to strongly influence the price level depending on their economic development.
Therefore, we are budgeting the coming year slightly more optimistically than the years 2023 and 2024, but we remain cautious in our expectations. 2025 will also be a challenging year for the construction industry, including currency-wise concerning the Euro and the Dollar. Compared to the years before 2020, we see much stronger volatility in the individual assortments concerning prices and procurement times. However, I am encouraged by the fact that our customers, especially those in the timber construction sector, can look forward to full order books. Therefore, I expect a slightly better year than 2024. However, we will have to do our homework. We will have to continue to position our ecosystem more efficiently and customer-oriented in the market to create added value. We want to take problems away from our customers and offer solutions in a positively developing timber and construction industry.
Megatrends in the global market
In this volatile market environment, we want to strategically position our unique overall solutions around wood on the construction market - nationally and internationally. I see the prospects for the Kuratle Group as extremely positive. More than that: When I look into the distant future, I see great growth potential for our ecosystem. Why? This has to do with the so-called megatrends.
These megatrends (source: Zukunftsinstitut GmbH, Germany) are developments that affect all levels of society and thus strongly influence companies and people in the coming decades. For the Kuratle Group, I see long-term and sustainable growth potential based on these megatrends, which can be tapped into with the know-how of our employees and the available technologies.
One megatrend identified by researchers is globalization. Population growth, migration waves across the globe, and a changing world order play a role here. The modern working life, the phenomenon of nomadism - living here today, there tomorrow - will play into the hands of timber construction.
Another extremely important trend is urbanization. People are increasingly flocking to cities. Megacities will emerge. High-rise buildings made of wood will grow out of the ground. There will be a greater interest in architecture based on natural principles and promoting healthy living.
Climate change leads to the awareness that we have finite resources on Earth and that their use must be sustainable. Thus, the desire for more sustainability will increase. The megatrend of neo-ecology will lead to more and more avoidance of synthetic materials such as plastic or building materials such as concrete. The importance of the circular economy (decarbonization) and the awareness of not wasting raw materials will increase worldwide.
New forms of work (New Work) will lead to a platform economy and corporate culture. Meaningful offers will be increasingly desired. The development towards individualization will lead to increased demand in the do-it-yourself market. Our ecosystem will also offer competent solutions for the desire for increased quality of life (natural raw materials, more mindfulness for nature).
Outlook for 2025
What is new at the Kuratle Group?
In 2025, we will continue to strengthen our ecosystem, align it precisely with customer needs, and position it even better in the market.
Organization
We are pleased to welcome further growth at the Kuratle Group. New to the group is Timber Concept GmbH. Markus Tiling, who founded and built the company together with Michaela Schlimm and Ansgar Knill, is starting a new phase of life after more than 40 years in the forestry and timber industry. As of November 1, 2024, the two co-founders and still shareholders took over the management. In this context, we have decided to take a majority stake in Timber Concept. As co-shareholders, we are pleased to be able to broaden our ecosystem with Timber Concept and expand our customer-oriented service offering.
The internationally positioned Timber Concept fits perfectly into the ecosystem. It is located in the Engineering & Production area and will take on a strong role alongside Wilma. Without being a classic engineering office, it will take on tasks in statics and preliminary planning for our timber-concrete composite systems. It will enable our customers, for example in the area of cross-laminated timber, which requires precise planning, to receive needs-based support. We can also broaden our solution offering for timber builders in external factory planning.
We are pleased to be able to strengthen our customer-oriented ecosystem in 2025 with further companies. South Africa is a positive market that is developing very well. A new company from South Africa is joining the Kuratle Group: In addition to our involvement around the Wood Conference and Universal Plywood LTD, we have taken a stake in Xlam South Africa LTD PTY. Xlam is a local producer of cross-laminated timber in the South African market with regional procurement.
There is also a change in the group organization as of January 1, 2025, which I am very pleased about. As mentioned on Christmas Eve, it is a privilege for me to continue developing the group together with my siblings. And an important and essential part of our group is our real estate. While Hanspeter Gerber, as CEO of Kuratle Immobilien AG, is responsible for our construction activities, Fabian Kuratle has been responsible for the strategic direction, management, and all projects in residential construction in recent years. Fabian will now lead and be responsible for the "Real Estate" area at the group level as Head of Real Estate.
Projects
Our logistics project, the warehouse management system (LFS), was started more than two years ago at the Füllinsdorf site. It is an ambitious project that optimizes our logistics processes. On the way we have already traveled, we have learned a lot. We will now be able to bundle the insights gained and our learnings from the past for our main site in Leibstadt.
During the course of this year, we realized that the implementation in Leibstadt would be delayed due to the high complexity. The processes and structures in Leibstadt were complex, partly poorly documented, and insufficiently optimized for us to map this in a new system. This led to a project stop and reorganization in the summer to work out the solution in many sub-steps, simplify the complex structures, and focus on quality and process reliability.
There is a concrete background for the new scheduling of the go-live of the warehouse management system: A new cassette warehouse is currently under construction in Leibstadt. This will create new capacities for construction timber in a compact space. On the newly gained space, HTA Mittelland will install an additional Hundegger Speedcut. This will increase capacity and efficiency at our production company. With the completion of the construction work in March 2025 (commissioning in April), we also want to start the warehouse management system in Leibstadt.
To break the complexity and ensure a seamless introduction until the commissioning of the cassette warehouse, the phased introduction of the LFS is currently planned so that nothing stands in the way of the successful introduction of the warehouse management system and commissioning of the cassette warehouse in April.
Further innovations in 2025 at a glance
Setting the course for sustainability - this could be the keyword for our activities in reviving the railway tracks in Leibstadt. In 2025, we want to import more goods from abroad by train for sustainability reasons. After negotiations with the SBB, we have invested in the railway tracks at Leibstadt station and the switches. Further work is now pending so that the first trains can roll in during the new year.
The Swiss Timber Production (STP) generation project has launched the new business plan. The next step is to start initial investor talks. STP will also play an important role in rail transport. The freight trains will arrive in Full-Reuenthal, from where the goods will then reach Leibstadt. Overall, I see a strong market for the STP project.
There is also a new title for our production company Wilma, where I also see a strongly growing market. The circular economy is becoming increasingly important, and with our composite system, we have the perfect solution for it. We want to take up this trend and strengthen the role of Wilma under the simplified name Wilma AG (previously: Wilma Vertriebs AG).
At Kuratle & Jaecker, we can also report activities. There is a new "Technology & Objects" department, which combines our competencies in the object business and the technical teams in the areas of doors, timber construction, and surface technology. The department is directly subordinated to Remo Gspandl, analogous to a sales region, and will include the areas of surface technology, object business, timber construction technology, and the construction arena. Samuel Halter will take over the management of this growing department. I wish him much joy and success in his new role.
General outlook and acknowledgement
Looking at the geopolitical situation, I must note that much is currently in flux. Whether the situation is good or bad will be shown by the future. The elections in the USA are decided, and a new president will take the helm in 2025. New elections are coming up in Germany - with an uncertain outcome. The EU is also facing challenges for which it must find new solutions, hopefully with less bureaucracy and leaner authorities.
I am therefore watching with excitement what changes there will be. One thing is clear to me: There is potential for an escalation of conflicts - and there is a lot of potential for good solutions that will help us as a society. My wish is that in the current situation, more emphasis is placed on dialogue rather than confrontation.
In this outlook, I would also like to emphasize that growth only makes sense for us if it serves a clear strategy and vision to sustainably secure our value as an ecosystem in the long term. Under this premise, we are well aware that the foundation and basis of the group, regardless of its size, are always the employees and customers. It is important to appreciate the trust of customers and the performance of all employees with great respect.
I assure you that we will continue to invest and grow sustainably, and thus have the strength to actively shape innovations and changes in the industry and make the construction industry more sustainable step by step. Always keeping our attractiveness to our employees, but also customers and suppliers in mind.
Let us remain optimistic and take the year of consolidation 2024 as a basis for further improvements in our group. For the past financial year, I would like to thank all the companies and their employees for their commitment, the members of the management and the executive board of the Kuratle Group. My sincerest thanks also go to our board of directors, with my father George Kuratle as chairman of the board, as well as Peter Bodmer, Jürg Frefel, Benno Studer, and Albert Infanger. I am also very grateful to our customers and suppliers for the sometimes long-standing business relationships, as well as to my siblings Corinne and Fabian for their great support.
I wish you, you, and all of us a good start to the new year 2025.