Endress+Hauser Paving the way for the future
The Endress+Hauser Group (Reinach, Switzerland) increased its net sales by more than 7 percent to over 1.8 billion euros last year. While foreign exchange rates slowed growth, acquisitions, particularly in the field of analytics, provided a boost. Besides venturing into new markets, the change at the head of the Group was the dominant feature of 2013.
After 19 years as Chief Executive Officer of the Endress+Hauser Group, Klaus Endress retired from the operational management of the measurement and automation specialist, leaving behind impressive figures and a healthy financial statement. The Group achieved a record operating profit of 277 million euros, as well as a best ever net income of 187 million euros. At the end of 2013 the company employed 11,919 people. The Group invested around 130 million euros in its world-wide production and sales network.
The Group’s financial key indicators are strongly influenced by acquisitions. In addition to the takeover of the business and employees of a former representative in Indonesia and the purchase of the US optical analytics company Kaiser Optical Systems, a share in Analytik Jena is a major factor. The share enables Endress+Hauser to develop a foothold in the laboratory business. The publicly traded German company produces analytic instrumentation and bioanalytical systems. Endress+Hauser currently holds over 50 percent of shares in Analytik Jena; a further 27 percent of shares can be acquired from October 2014. The objective is a complete takeover.
About 2 percent of the growth in net sales is due to the acquisitions. Of 1,853 new positions in the company worldwide, about 1,300 resulted from the purchases; a further 550 posts have been organically created in the Group. The share in Analytik Jena had an effect on the equity capital ratio, which was reduced by more than 2 points to 67.8 percent – “still an impressive level for our industry,” emphasized Chief Financial Officer Dr Luc Schultheiss. “The Endress+Hauser Group has a solid financial base.” Bank loans, which have increased to 50 million euros as a result of the acquisitions, are balanced against cash equivalents of 384 million euros.
Stiff breezes from the currency front
Developments in exchange rates left the Group facing headwinds last year. The dollar, pound, yen and yuan dropped in value against a strong euro. The depreciation of currencies in the emerging markets of India, Indonesia, South Africa, Brazil and Turkey also influenced figures. According to the CFO, this cost the Group 3 percentage points of sales growth and reduced profits through net foreign exchange losses of 11 million euros.
Last year business developed at an above-average rate primarily in Africa, the Middle East and South East Asia, as well as in Europe. Germany, the top-selling market, showed significant growth, while sales in Switzerland recovered. In contrast, France suffered from a weak economy. After a difficult previous year, China regained double-digit growth in 2013. The Unites States – like the entire Nafta region – was not able to maintain the strong growth of the previous years. In Russia and India the dynamic growth rates also weakened. However, Brazil showed strong development, boosted by the new production facility for flow, level and pressure measurement engineering in Itatiba.
“Our growth was broadly supported across the various industries,” reported Chief Operating Officer Michael Ziesemer. Major projects in the chemical industry were also key drivers. Business with services and automation solutions developed above average. “Our strategy of providing customer support beyond process measurement engineering is proving successful,” summarized Michael Ziesemer. More and more customers are putting their faith in the competence of Endress+Hauser for the calibration of measuring points.
Smooth change at the top
For the family-owned business, the handing on of the baton at the end of the year was of particular significance. Klaus Endress, son of the company founder, who has managed the Endress+Hauser Group since 1995, joined the Supervisory Board, replacing Klaus Riemenschneider as President. The Group’s new CEO is Matthias Altendorf, with 25 years’ experience at Endress+Hauser and formerly Managing Director of the competence center for level and pressure measurement engineering in Maulburg, Germany. “We have set a significant course for the future of the company,” underlined Klaus Endress, referring to the change at the top and the acquisitions in the field of analytics.
Matthias Altendorf sees the challenges ahead to be in leading the Group’s new analytics strategy to success. “On the one hand we want to open up the laboratory analysis market and thereby offer our customers continuous support and service, from the development of products and processes right through to process engineering production,” explained the CEO. “On the other hand we want to increasingly install advanced analyzers in the process industry. This will allow our customers to monitor product quality at every stage and to continuously optimize processes.”
Cautious start to the new year
For 2014 Endress+Hauser has set the target of over 2.1 billion euros of net sales – a plus of over 15 percent due to the acquisitions. Beyond the new business areas, an organic growth of around 9 percent is planned. The company intends to create 500 new jobs and increase the equity capital ratio to significantly over 70 percent again. So far the start to the current year has been modest. “Incoming orders are increasing, but we are still below our target in net sales,” stated Luc Schultheiss – “in part because the exchange rates are costing us growth.”
Investments of around 160 million euros are planned. One focus is on the European production sites: in Reinach, Switzerland, Endress+Hauser is extending the competence center for flow measurement engineering, and expansion continues at the Maulburg location. In addition the sales centers in Spain, Italy and Malaysia have started on the construction of their own buildings.
The Endress+Hauser Group
Endress+Hauser is a global leader in measurement instrumentation, services and solutions for industrial process engineering. The Group employs 12,000 personnel across the globe, generating net sales of 1.8 billion euros in 2013.
With dedicated sales centers and a strong network of partners, Endress+Hauser guarantees competent worldwide support. Our production centers in 11 countries meet customers’ needs and requirements quickly and effectively. The Group is managed and coordinated by a holding company in Reinach, Switzerland. As a successful family-owned business, Endress+Hauser is set for continued independence and self-reliance.
Endress+Hauser provides sensors, instruments, systems and services for level, flow, pressure and temperature measurement as well as analytics and data acquisition. The company supports customers with automation engineering, logistics and IT services and solutions. Our products set standards in quality and technology.
We work closely with the chemical, petrochemical, food & beverage, oil & gas, water & wastewater, power & energy, life science, primaries & metal, renewable energies, pulp & paper and shipbuilding industries. Endress+Hauser supports its customers in optimizing their processes in terms of reliability, safety, economic efficiency and environmental impact.
Founded in 1953 by Georg H Endress and Ludwig Hauser, Endress+Hauser has been solely owned by the Endress family since 1975. The Group has developed from a specialist in level measurement to a provider of complete solutions for industrial measuring technology and automation, with constant expansion into new territories and markets.
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Monique Juillerat Email email@example.com
Corporate Director Corporate Communications Phone +41 61 715 7729
Endress+Hauser AG Fax +41 61 715 2888
4153 Reinach BL 1