Endress+Hauser sees itself as well positioned

Endress+Hauser per­formed well across all fields of activ­i­ty, indus­tries and regions in 2019. The Group cre­at­ed hun­dreds of new jobs, invest­ed record amounts and improved in the area of sus­tain­abil­i­ty. Accord­ing to CEO Matthias Altendorf, the fam­i­ly com­pa­ny is thus in a strong posi­tion to address the chal­lenges of the coro­na crisis.

“2019 was a sol­id year for Endress+Hauser,” empha­sized Matthias Altendorf. “Growth was broad-based and bal­anced.” The mea­sure­ment and automa­tion tech­nol­o­gy spe­cial­ist for process and lab­o­ra­to­ry appli­ca­tions increased net sales by 8.0 per­cent to 2.652 bil­lion euros, despite a weak­en­ing econ­o­my. Dur­ing the annu­al media con­fer­ence on finan­cial state­ments in Basel, the CEO explained that instead of large-scale orders, this growth was dri­ven by small­er and medi­um-sized projects.

Focus on innovation and sustainability

Accord­ing to the CEO, this suc­cess is also tied to the company’s undi­min­ished inno­v­a­tive spir­it. In 2019 Endress+Hauser filed 318 patent appli­ca­tions and invest­ed 7.6 per­cent of sales in research and devel­op­ment. More than 1,100 peo­ple are work­ing on new prod­ucts, solu­tions and ser­vices. By the end of 2019 Endress+Hauser had 14,328 employ­ees world­wide. 400 new jobs have been cre­at­ed with­in one year.

The com­pa­ny also made progress in the area of sus­tain­abil­i­ty. In the annu­al Eco­Vadis audit, Endress+Hauser achieved 72 points, 4 more than in 2018, plac­ing it in the top 2 per­cent of the com­par­i­son group. By switch­ing to green elec­tric­i­ty in pro­duc­tion, the Group was able to reduce CO₂ emis­sions by more than one-third. New build­ings meet the high­est envi­ron­men­tal stan­dards. Endress+Hauser is cur­rent­ly con­struct­ing a new ener­gy self-suf­fi­cient cus­tomer expe­ri­ence and train­ing cen­ter in Canada.

USA still the largest market; China overtakes Germany

In 2019, Asia pro­vid­ed strong growth impuls­es. Europe per­formed well and South Amer­i­ca record­ed excel­lent growth. North Amer­i­ca fell behind expec­ta­tions, how­ev­er, while the busi­ness in Africa and the Mid­dle East declined. Chi­na over­took Ger­many based on sales vol­ume and just trails the US, which con­tin­ues to be the largest sales mar­ket for Endress+Hauser. Accord­ing to Chief Finan­cial Offi­cer Dr Luc Schultheiss, the Group com­pa­nies were able to gain mar­ket share.

The changed mar­ket envi­ron­ment is reflect­ed in an oper­at­ing prof­it (EBIT) of 343.4 mil­lion euros, a plus of 3.9 per­cent. Prof­it before tax­es (EBT) grew by 9.9 per­cent to 346.9 mil­lion euros. Behind this is a sig­nif­i­cant­ly improved net finan­cial result com­pared to 2018. Although for­eign exchange hedg­ing con­tin­ued to incur high costs, the pos­i­tive stock mar­ket envi­ron­ment allowed finan­cial invest­ments to gen­er­ate sol­id returns in 2019. Return on sales (ROS) climbed 0.2 points to 13.1 percent.

Strong financial cushion despite higher investments

Net income rose 14.3 per­cent to 265.9 mil­lion euros. This reflects a low­er effec­tive tax rate of 23.4 per­cent, which result­ed from the one-time effects of cor­po­rate tax reforms in Switzer­land. The equi­ty ratio reached an out­stand­ing 75.6 per­cent, an increase of 4.6 per­cent­age points over 2018. Among oth­er things, this devel­op­ment was influ­enced by the trans­fer of Ger­man retire­ment ben­e­fit oblig­a­tions to a sep­a­rate fund.

Despite world­wide invest­ments of 231.1 mil­lion euros, the Group is vir­tu­al­ly free of bank loans. Over the past five years the com­pa­ny has invest­ed more than 840 mil­lion euros in new build­ings, plants and machin­ery. Accord­ing to CFO Luc Schultheiss, Endress+Hauser enjoys a liq­uid­i­ty cush­ion of near­ly 800 mil­lion euros thanks to a pru­dent div­i­dend pol­i­cy and years of striv­ing for con­tin­u­ous improve­ment. “This will help us do a good job of man­ag­ing the cur­rent eco­nom­ic sit­u­a­tion,” added the CFO.

Digital intimacy bridges the physical distance

Endress+Hauser start­ed 2020 with a fur­ther increase in incom­ing orders. How­ev­er, the coro­n­avirus pan­dem­ic makes it mas­sive­ly more dif­fi­cult to achieve the orig­i­nal goals. “Although we are still unable to pre­dict the eco­nom­ic impacts of the cri­sis, we and our cus­tomers will cer­tain­ly feel the effects,” under­lined CEO Matthias Altendorf. The Group respond­ed ear­ly to the spread of the virus and used all means at its dis­pos­al to pro­tect people’s health and con­tin­ue to offer cus­tomers sol­id support.

“We bridge the phys­i­cal dis­tance through dig­i­tal and emo­tion­al prox­im­i­ty,” said Matthias Altendorf. The CEO has been dri­ving dig­i­ti­za­tion at Endress+Hauser for years – in the prod­uct and ser­vices areas, as well as in cus­tomer inter­ac­tion and inter­nal col­lab­o­ra­tion. At peak peri­ods, up to 10,000 employ­ees are cur­rent­ly work­ing from home. Cus­tomers can use the web­site to order instru­ments or track orders, and an online tool enables remote sup­port aid­ed by video.

Group aims to safeguard employment

“Our every­day heroes are those work­ing in pro­duc­tion, logis­tics and ser­vice, or under dif­fi­cult con­di­tions from home or in the office,” said Matthias Altendorf. Through hard work, the com­pa­ny has been suc­cess­ful in ensur­ing the avail­abil­i­ty of mate­ri­als, keep­ing the logis­tics chains intact and sup­port­ing cus­tomers in all respects. “The Group’s plants are oper­at­ing, and Endress+Hauser is still able to deliv­er.” The CEO there­fore believes that the com­pa­ny is well pre­pared for dif­fi­cult times.

“We have always run a sound busi­ness and as a com­pa­ny we are very well posi­tioned,” said Matthias Altendorf. “We will do every­thing we can to safe­guard jobs and bring Endress+Hauser through this cri­sis. This will ben­e­fit cus­tomers, employ­ees and share­hold­ers.” The share­hold­er fam­i­ly sup­ports this course and accepts a decline in prof­its, said Super­vi­so­ry Board Pres­i­dent Dr Klaus Endress. “We would like to have as many peo­ple as pos­si­ble on board when the wind shifts and things pick up again.”