Endress+Hauser weathering the crisis

The effects of last year’s economic crisis have been felt at Endress+Hauser, with sales dropping for the first time in the company’s history. But the international Swiss-based Group remained profitable during the past year and the financial power of the family-owned business even increased. After a good start in 2010, Endress+Hauser expects sustained recovery and considerable growth.

Speaking at the Annual Media Conference of Endress+Hauser AG in Basel, Chief Executive Officer Klaus Endress said the company had “experienced one of the most difficult years in its history.” Net sales of the Group fell to €1.096 billion in 2009 (–9.5%). The number of employees, however, remained virtually unchanged, with a staff of 8,419 worldwide at the end of 2009 – only 15 fewer than the year before (–0.2%). “We wanted to avoid job losses,” said Klaus Endress. “We wanted everybody to be on board when business started to gain momentum again.” Endress+Hauser created 2,125 jobs over the past five years, 1,418 of which in Europe. In the region around Basel between Switzerland, France and Germany alone, 775 new jobs were created during that period.

The setback was particularly painful in the chemical industry, one of the company’s mainstays. The slump in sales was heftiest in the established industrialised countries such as the United States, Germany and Japan, said Chief Operating Officer Michael Ziesemer, the CEO’s deputy. Business declined sharply in Russia, but recovered early in China, where sales reached the same level as 2008. India, Korea, the Middle East and Latin America showed positive developments. All in all, Endress+Hauser fared better than the process automation industry as a whole which shrank by 16%.

Worldwide sales and production network strengthened

Despite the crisis, Endress+Hauser continued to strengthen its global sales and production network, setting up its own branch office in Qatar to intensify business in the Middle East and opening a sales centre in Lithuania to improve customer support in the Baltic countries. With €67.2 million (–37.1%) investments were well below the 2008 reference, but no important projects were stopped or postponed. “We have invested over €400 million in the course of the past five years,” stressed Fernando Fuenzalida.

Additionally, Endress+Hauser increased its R & D expenses to €94.1 million (+6%), accounting for 9.6% of net sales. 200 patent applications – as many as in 2008 – demonstrate the company’s unbroken powers of innovation. By acquiring a majority in the English company MHT Technology Ltd, Endress+Hauser strengthened its competence in tank gauging and in tank farm automation.

A good start to the new year

Endress+Hauser has had a good start to the new year. After just four months, incoming orders increased by double-digit figures against the previous year. The growth in sales is well above the cautious target of 5-6%. Business in the US and Germany has picked up, Russia is catching up fast and China shows dynamic growth again. Only the Scandinavian countries are still deep in the recession. If this development continues, the Group anticipates that as much as 10% growth is well within reach.

Klaus Endress calls for caution: “Basically, the causes of the economic crisis are still with us.” Future developments are characterised by many uncertainties. “2009 was a difficult year and 2010 won’t be much easier,” the CEO believes. “We are pretty certain that the crisis will be with us for some time to come.”

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