Endress+Hauser reaches new records in 2022 in terms of order intake, sales and headcount.
The year 2022 was marked by strong growth for Endress+Hauser worldwide. Despite tense logistics and supply chains, the measurement instrumentation and automation specialist supplied more sensors than ever before. Order intake, sales and headcount reached record levels, while profits fell due to a negative financial result. The company, which celebrates its 70th anniversary this year, remains confident for 2023.
"For 70 years, we have done everything in our power to ensure a good future - and we will continue to do so," said CEO
Early last year, Russia's attack on Ukraine clouded the outlook. Against a backdrop of high inflation, rising key interest rates in many countries, the threat of energy shortages in Europe, persistently tense supply and logistics chains, and repeated Covid-related confinements in China, CEO Matthias Altendorf declared at the balance sheet press conference in Basel: " Rarely has our environment been marked by so many challenges as in 2022. Nonetheless, our business has enjoyed steady growth throughout the year. "
Strong growth worldwide
Group net sales rose to 3.351 billion euros, an increase of 16.4 %. Luc Schultheiss, CFO, put organic growth, excluding currency effects, at 11.6 %. The company delivered more than 2.9 million measuring instruments worldwide, on time and on budget. "Over the years, Endress+Hauser has built up high-performance production and logistics networks; our relationships with our suppliers are long-term", Matthias Altendorf emphasized.
All sectors and regions contributed to the good growth recorded. Sales were buoyant in America and Asia, high in Europe and the Middle East, and declined only in Africa. China remained the most important market in terms of sales, ahead of the USA, both of which are now well ahead of Germany in third place. Endress+Hauser measurement instrumentation and the sensor-related activities of the Group-owned Innovative Sensor Technology IST enjoyed strong growth. As might be expected, demand for Analytik Jena's laboratory instruments declined slightly following the end of the pandemic.
Investing for the future
Endress+Hauser has invested 240.5 million euros in new buildings and facilities, i.e. 24.7 % more than in 2021. Over the past five years, more than a billion euros have been invested in this way, with the aim of improving the infrastructure. " With these investments, we are paving the way for tomorrow's growth "said the CEO. Projects worth 500 million euros are currently underway. The four largest involve the Maulburg (Germany), Suzhou (China), Jena (Germany) and Greenwood (Indiana/USA) sites.
" Product innovation drives our growth "said Matthias Altendorf. In 2022, Endress+Hauser launched 43 new products on the market. The Group spent 242.4 million euros, or around 7.2 % of sales, on research and development, an increase of 13.6 % on the previous year. A total of 235 first patent applications worldwide testify to the Group's innovative strength.
This retrospective is overshadowed by the closure of the Russian marketing agency in the wake of the sanctions imposed after the attack on Ukraine. The ban on exporting measuring instruments meant the end of business with Russia. A total of 170 jobs were lost. At the end of the year, the family-owned company employed 15,817 people worldwide, an increase of 700 positions. New work-study positions were also created. In future, 5 % of jobs will be reserved for trainees, apprentices and students.
Solid operating income
Currency effects and price increases boosted Group sales, but also weighed on earnings. As operating expenses rose more strongly than sales, operating income increased by only 9.1 % to 473.7 million euros. Endress+Hauser therefore recorded an operating margin of 14.1 %, which is one percentage point lower than the previous year, " but still very respectable "said CFO Luc Schultheiss.
Rising currency hedging costs and, even more so, substantial losses on financial investments resulted in a strongly negative financial result. Profit before tax fell by 12.0 % to 408.1 million euros. A tax rate of 25.6 % (plus 2.5 points) reduced profit after tax by 14.9 % to 303.5 million euros. Nonetheless, the family business is financially sound: in 2022, the equity ratio reached 80.2 %, 1.1 points higher than the previous year; the Group is virtually debt-free.
Thinking in terms of generations
With 76 points out of 100, Endress+Hauser has once again achieved one of the best positions in the EcoVadis 2022 sustainability ranking, placing it in the top one percent of the group of companies assessed. With a view to developing a climate strategy, the Group calculated its carbon footprint along the value chain. Endress+Hauser has also joined the Science Based Targets initiative, with the aim of achieving carbon neutrality by 2050.
The fact that the company thinks in generational terms is also evident in its succession planning. When Klaus Endress steps down as Chairman of the Supervisory Board at the end of 2023 for reasons of age, he will be succeeded by CEO Matthias Altendorf. Peter Selders, who heads the Competence Center for Level and Pressure Measurement, will take over the reins of the Group. Steven Endress, currently still Managing Director in the UK, will be the second family representative on the Supervisory Board. " The shareholders, the family and the Supervisory Board took all these decisions in perfect agreement. "said Klaus Endress.
A confident anniversary year
With order intake still 8 percent higher than sales in 2022, Endress+Hauser was able to start the current year with a full backlog. Even in the first quarter of 2023, order intake showed a positive trend. Although the Group expects this trend to slow in the second half of the year, double-digit growth is still forecast for 2023. This outlook goes hand in hand with the creation of 500 new jobs worldwide.
Klaus Endress, Chairman of the Supervisory Board, is convinced that the measurement instrumentation specialist's field of activity has a bright future. Moreover, decarbonization and digitalization have provided additional impetus. In this anniversary year, Endress+Hauser is inviting over a thousand customers, partners and specialists to Basel to discuss the sustainable transformation of the process industry. Matthias Altendorf concluded: " For 70 years, we've done everything to ensure a bright future, and we'll continue to do so. "