Endress+Hauser holds its own in a difficult environment
Sales stagnate at 2.1 billion euros, but Group achieves solid earnings
Compared to the industry, the Endress+Hauser Group performed well in 2016. While sales grew based on local currencies, the Group experienced a slight decline when consolidated in euros. The earnings situation is solid and the workforce increased slightly from the prior year. The Swiss specialist for measurement and automation engineering continues to invest heavily in its future.
Currency influences affect consolidated sales
Net sales fell in 2016 by 0.2 percent to 2.139 billion euros. “Currencies created a headwind for us last year,” said CEO Matthias Altendorf at the company’s annual media conference in Basel, Switzerland. Foreign exchange rate effects drove down sales by 50 million euros. “Based on local currencies, we grew sales by 2.1 percent.”
Endress+Hauser held its own in industry comparison
Endress+Hauser clearly lagged behind its own expectations. Matthias Altendorf nevertheless emphasized: “When compared to overall industry growth, however, we held our own.” While the Group performed well in Europe, sales in the Americas declined. In Asia-Pacific, business stagnated, but Africa and the Middle East experienced solid growth.
Solid profitability despite sinking margins
Operating profit (EBIT) fell by 14.2 percent to 215.5 million euros, net income declined by 6.8 percent to 153.5 million euros. Return on sales declined by 0.7 points to 10.2 percent. “We failed to meet our expectations here, but for the industry it still represents a good result,” emphasized Chief Financial Officer Dr Luc Schultheiss. The equity ratio decreased slightly by 0.8 points to 72.2 percent due to unfavorable interest rate and currency effects.
Large investments, slight workforce increase
Endress+Hauser invested 148.8 million euros in new buildings, plant and machinery last year. Employment at the family-owned company remained stable. All apprentices were offered positions. Endress+Hauser had a workforce of 13,003 at the end of 2016, an increase of 51 over the previous year. The actual increase was higher due to the divestiture of the Analytik Jena optics business, which resulted in the loss of more than 100 positions.
Endress+Hauser bundles its IIoT activities
Endress+Hauser is tackling the challenges of digitalization by bundling a number of activities. A new subsidiary in Freiburg in Breisgau, Germany, is working exclusively on products, solutions and services related to the Industrial Internet of Things (IIoT). The Group filed 273 patents for the first time in 2016. The intellectual property rights portfolio boasts more than 7,000 active patents. R&D spending rose to 7.8 percent of sales. Endress+Hauser introduced 64 new products to the market.
New year off to a good start
Endress+Hauser is targeting a single-digit increase in net sales for the current year. The company also wants to improve profitability. 161 million euros have been set aside for new buildings, plant and machinery and the company intends on creating up to 150 new jobs globally. “We are currently ahead of plan related to incoming orders,” said Matthias Altendorf. Despite growing political uncertainties around the world, the CEO is confident the Group can achieve sustainable growth again in 2017.