Industry overview
The Mining of coal and lignite sector across Germany comprises approximately 7 enterprises employing about 13,011 people and generating €2.1 bn in net turnover in 2017. The average enterprise size is – employees per firm. This is a useful yardstick when assessing whether your own operation sits within the typical scale band of the sector.
Profitability
With a robust operating margin of 23.9% of revenue in 2017, the sector reports €505 M of gross operating surplus (Eurostat's EBITDA-equivalent, before depreciation). This figure provides the headline benchmark against which an individual operator can sanity-check their own bottom line, values significantly below indicate cost or pricing pressure, those above suggest competitive advantage worth defending.
Cost structure
Personnel costs are the dominant cost driver in Mining of coal and lignite, absorbing 45.0% of revenue. Cost of revenue accounts for 69.9% and energy purchases –. The labour-intensive nature of activities in this sector means that productivity gains and wage discipline have an outsized effect on margin. Note that small percentage shifts in labour cost ratios translate quickly into operating result.
Trend & trajectory
Over the period 2008 to 2017 the operating margin moved from 13.7% to 23.9% (+10.2 percentage points), an encouraging upward trajectory. Sectors with stable or improving margins tend to reflect successful pass-through of input costs and disciplined capacity management; declining margins typically point to either over-supply or a structural cost squeeze that warrants strategic review.