Endress+Hauser has ended the year 2011 with figures far exceeding expectations. Surprisingly powerful business developments made for new records in sales, headcount and profit. For the current year, the global measurement engineering group, headquartered in Reinach, Switzerland, expects solid growth.
Presenting the financial results in Basel, CEO Klaus Endress made no secret of his surprise regarding these positive developments. The sovereign debt crisis and resulting currency upheavals, as well as the natural disasters in Asia that led to bottlenecks in the supply of electronic components had, he said, stretched the company’s employees to their limit. “But we nonetheless grew across most regions and industrial sectors.”
Endress+Hauser increased net sales by 16 percent to 1.5 billion euros. The Americas showed even stronger dynamic growth than Asia, but sales in Europe also grew with double-digit figures. Only Africa and the Middle East fell behind expectations, a consequence of the political unrest in the Arab region and Northern Africa.
Strong drivers boost development
As COO and the CEO’s deputy in charge of sales, Michael Ziesemer sees “strong driving forces” behind these successful business figures – global megatrends such as the growing demand for energy and resources, or the necessity of energy efficiency and environmental protection. Important issues with substantial future impact, he said, could only be solved with the help of measurement engineering.
The Group achieved the biggest growth in the oil & gas industry. The Enterprise Framework Agreement with the energy group Shell shows that Endress+Hauser has established itself as a serious supplier in this industry. Sales in the chemical industry developed strongly, followed by power & energy, food & beverage, primaries, life sciences and water & wastewater industries.
Growth creates new jobs
The powerful growth in sales went hand in hand with a boost in employment. The Group counted 9,414 employees at the end of 2011, 820 more than the year before (plus 10 percent). 474 of these jobs were created in Europe, 297 of these in the Swiss-German-French region around Basel where the two biggest production centers, several Group companies and the holding company are located.
High productivity raises profit levels
Effective capacity utilization in the plants was reflected in higher productivity. Operating profit rose by 32 percent to 247 million euros, with earnings before tax rising by 46 percent to 243 million euros. The financial year was marked by strong currency exchange fluctuations. Although the euro fell by an average of 10 percent against the Swiss franc, the exchange rate at the year-end closing date was only 2.5 percent lower than the year before – unlike in 2010, the impact on the financial result was therefore moderate.
Net income exceeded 177 million euros (plus 40 percent), another record-high figure, and the equity ratio reached almost 70 percent. The Group has over 443 million euros in liquid assets, with just 40 million euros in bank liabilities. Endress+Hauser, said CFO Dr Luc Schultheiss, stands on financially firm ground. At the end of 2011, the 50-year-old took over from Fernando Fuenzalida (69). The former CFO will join the Group’s Supervisory Board.
Endress+Hauser Group invests and acquires
After two years of reticence, the Group increased investments by 49 percent to 85 million euros. Expansion focused mainly on production capacity, for example in Maulburg, Gerlingen and Waldheim in Germany, Greenwood, Indiana in the USA, and Cernay in France. The Dutch sales center moved into a new building in Naarden. Endress+Hauser set up a sales subsidiary in Saudi Arabia and opened a representative office in Vietnam.
The capital resources allowed the Group two strategic acquisitions. Endress+Hauser bought a minority share in Finesse Solutions, a US company specializing in single-use solutions for biotechnological processes. Klaus Endress sees this as a ‘key technology’ for many spin-offs in process engineering. Another promising acquisition, the CEO says, is Systemplan headquartered in Durmersheim, Germany. The engineering bureau offers businesses its consulting services in energy efficiency, supplementing Endress+Hauser’s respecting offerings in measurement engineering, software and engineering services.
Confidence in spite of uncertainties
Endress+Hauser has set a growth target of 11 percent for the current year. Figures are moderately below budget at present, said Klaus Endress, with China in particular not living up to expectations. “But our figures are robust. There is neither recession nor crisis right now.” Nevertheless the CEO mentioned severe uncertainties owing to the continuing sovereign debt crisis and tensions in the euro zone.
Endress+Hauser aims to invest 140 million euros this year, mainly in production facilities in Germany, France and Switzerland, but also in the United States, China and Brazil where a new production facility is under construction for flow, level and pressure measurement engineering. Around 700 new jobs are expected to be created worldwide. By the end of the year, Endress+Hauser will most likely top the 10,000 mark in terms of headcount.
The Endress+Hauser Group