Endress + Hauser: Strong growth in 2018
by David Fleschen
Endress + Hauser grew strongly in 2018 across all regions, industries and product areas. Stimulus was provided by the ongoing digitization in industry and the positive development in international markets. The group increased sales and profits, invested heavily and created hundreds of jobs worldwide.
"It was good for Endress + Hauser in 2018, practically everywhere in the world," explained CEO Matthias Altendorf at the results press conference in Basel. The group increased its net sales by 9.5 percent to 2.455 billion euros, despite strong headwinds from the exchange rates. In local currencies, sales growth reached 12.7 percent.
USA the new number one
The business was driven by a strong economy in process automation. Persistently high private consumption and the recovery in oil and commodity prices contributed to the positive development. After years of rather weak investment activity, the big projects returned. Chief Financial Officer According to Luc Schultheiss, Endress + Hauser developed "above the industry average".
Endress + Hauser performed well in Europe, and even dynamically in Africa / Middle East and the Asia-Pacific region. The strongest growth was in America. "The US replaced Germany as our largest sales market after 65 years," reported Matthias Altendorf. Business in China also posted double-digit growth. "If things continue like this, China could soon be our number one," said the CEO.
Profit increases strongly
The development of exchange rates not only slowed down sales growth, but also dampened cost development, despite marked price increases on the materials side. The operating result (EBIT) rose by 31.4 percent to 330.6 million euros. Although there were no one-time revenues in 2018, unlike in the previous year, earnings before taxes (EBT) rose again by 14.6 percent to 315.7 million euros. The return on sales (ROS) climbed 0.6 points to 12.9 percent.
Earnings after taxes increased by 11.2 percent to 232.5 million euros. This reflects an effective tax rate of 26.4 percent, which - influenced by the change in the composition of earnings - increased slightly compared with the previous year. The equity ratio reached 71.0 percent, 0.8 percentage points more than in 2017. The group is virtually free of bank debt.
Innovations for the digital age
Endress + Hauser fueled growth with a wealth of innovations. The company launched 54 new products last year. Expenditure on research and development climbed to 184.2 million euros, equivalent to 7.5 percent of sales. For the first time in 2018, the company filed a patent for 287 developments. The IP portfolio comprised almost 7,800 patents and titles at the end of the year.
A good third of the new patents cover topics such as Industry 4.0, digital communication, diagnostics and electronics. "Digitization permeates all areas," emphasized Matthias Altendorf. In addition to the 1,000 developers in the competence centers, various start-ups initiated by the group are also working on products, solutions and services for the digital age. In addition, Endress + Hauser cooperates closely with industrial partners such as the software manufacturer SAP.
Another growth driver was the process analysis. "The optical analysis methods have developed excellently," said Matthias Altendorf. In Lyon, France, Endress + Hauser established a European support center for advanced analyzers; The network of sales specialists is growing in the respective countries. The CEO hopes to gain further momentum for this business area.
Hundreds of additional jobs
The positive development was reflected in numerous new jobs. At the end of 2018, 13,928 people worked for the group around the world, 629 more than a year ago. New employees were recruited primarily in production, production-related areas and in service. Alone in the border triangle around Basel, around 200 jobs were added.
In only five years, Endress + Hauser invested almost three quarters of a billion euros - "everything from self-developed funds", as CFO Luc Schultheiss emphasized. In 2018, 158.6 million euros went into buildings, facilities and IT. The two largest projects concern the expansion of the plants in Reinach in Switzerland and Maulburg in southern Baden. The Group is also pursuing a major project in the US: In Houston, Texas, Endress + Hauser bundles sales, service and support in the region.
Source: Endress + Hauser, Photo: Fotolia