I attended my first AGM! Hermle AG experience report
An experience report of attending an AGM and comments on the future of Hermle + valuation
Corporate governance is an important aspect investors should pay attention to. What’s a better way to learn about it than at an Annual General Meeting? Yesterday I attended my first ever AGM in Gosheim for Maschinenfabrik Berthold Hermle AG. Let’s talk about the AGM, my experience and the future of the company.
The AGM
First off I want to thank Florian and Martin, seasoned AGM veterans, who took me with them to the event. Attentive readers might be a bit confused now: “I’ve read your latest portfolio update, you do not own Hermle shares. How did you get in?”
I have not bought Hermle and sold out of the company in late March, but thanks to Florian I got a guest invite to attend with him. With that out of the way let’s quickly talk about the experience of going to an AGM, followed by a discussion about the future for Hermle.
Attendees got free drinks and breakfast as well as nicely printed out annual reports. What really surprised me was the very high average age of attendees, the vast majority above retirement age. As a local small cap, I’d assume that a lot of locals own a few shares and like to attend the AGM alongside retired employees. Hermle prides itself in its culture and as a the chairman said “Nobody really leaves Hermle”.
The AGM took around 1.5 hours and included a discussion on the last year, voting and Q&A. The voting process was honestly incredibly boring, especially in a company with 80% insider ownership. You do not matter as a small shareholder and management gave you exactly that feeling. Listening to all the regulatory necessities was pretty boring and the chairman itself was vocal about the unnecessary procedures and EU bureaucracy throughout the AGM.
The presentation of the FY 2024 results were not too insightful, most of it was covered in the annual report in more detail. What was interesting was a comment on performance in 2025 up to May, but it did not offer surprises. The full year guidance is intact and unchanged, but I expect the lower parts of the range to be more realistic.
The Q&A is the interesting part of most quarterly and annual presentations and it turns out the same can be said about an AGM. Unfortunately, Hermle does not like to answer questions. They avoided or plainly didn’t answer most questions and often gave snarky comments. Some of them were funny, but they also did not inspire confidence in me. The topics that interested me were all asked, but not really answered:
Percentage of services in the sale mix
Capital allocation, especially buybacks
reducing cyclicality
After the disappointing Q&A we got lunch: Schwäbische Maultaschen, as expected from a company located in Swabia. I’ve heard that many people see a big upside of attending AGMs is talking with management and other high ranking employees after the formalities. Hermle’s management disappeared very quickly after the conference ended.
After lunch we had a round trip through the manufacturing plant in Zimmern ob Rottweil, which was very interesting. We saw how the employees worked and the level of in-house manufacturing Hermle does. The group leader also reaffirmed that Hermle wants to do as much in-house as possible. Some steps however need to be bought of course, often limited to very large machines or situations where they could technically do a step, but it would involve too much effort. The Zimmern plant is around half an hour away from the HQ in Gosheim, so there is some level of logistics necessary, also done in-house with an owned truck.
Overall I was impressed by the round trip through the plant, but very disappointed by the evasiveness of management towards questions.
Hermle’s future
In the next part I’ll address:
one AGM question towards capital allocation that really disappointed me
some comments on growth and margins for Hermle
putting it all together to a valuation