Group holds its ground despite pandemic and starts 2021 with momentum.
Endress+Hauser weathered the 2020 pandemic year well. Despite declining sales, the company, which specialises in measurement and automation technology, maintained profitability at a high level. The group created new jobs and expanded its global sales and production network.
Business creates value for society
Endress+Hauser succeeded in protecting people’s health and continuing to provide solid support to customers, CEO Matthias Altendorf said at the annual press conference in Basel, Switzerland. “We helped to keep important areas of our daily lives running during the pandemic. Our work is important for our customers and for society.” Endress+Hauser products are used, for example, to produce vaccines; subsidiary Analytik Jena supplies PCR technology to detect the coronavirus.
Digitisation played an important role, picking up speed during the pandemic – in products, in collaboration and in internal processes. Customers have long been able to conduct everyday transactions via the Endress+Hauser website. The number of registered users on the platform doubled, and online business grew by 39 percent. If needed, the visual support app brings service technicians virtually to customers’ plants. Even factory acceptance tests can now take place remotely with video support.
Strong currency effects impact sales
Nevertheless, the group’s sales fell by 2.8 percent to 2.577 billion euros in 2020. However, this figure is heavily influenced by exchange rate developments. Apart from the Swiss franc, all major currencies depreciated against the euro. Without these effects, according to chief financial officer Dr Luc Schultheiss, Endress+Hauser would have almost reached the previous year’s level in sales. “In local currencies, we are above the industry average and have performed well in the market.”
Individual regions, industries and segments developed differently. Of the three countries with the highest sales, only China achieved growth and is now Endress+Hauser’s largest single market. In Germany and the USA, on the other hand, sales declined. In contrast to process engineering, laboratory instrumentation recorded strong growth. Cyclical industries suffered in the crisis, while non-cyclical sectors were stable. “The broad backing in the market helped us,” said Matthias Altendorf.
Profit at a high level
Endress+Hauser’s profitability did not suffer last year. On the cost side, exchange rates had a positive effect in 2020, for example on material expenses. Because many business trips and activities were cancelled, operating expenses fell. Personnel expenses grew at a below-average rate. Overall, operating profit (EBIT) decreased.
Major investments and plenty of innovation
The company spent 195.1 million euros on R&D, equating to 7.6 percent of sales. Endress+Hauser filed patents for 276 inventions for the first time, 42 less than in 2019. For CEO Matthias Altendorf, this demonstrates the disadvantage of working from home: “People are more creative when they inspire each other and search for solutions collaboratively.” However, the group’s innovative strength is intact: 40 new products were launched in 2020; in the current year, the figure is expected to be 74.
“The outlook continues to be characterised by uncertainty,” emphasised Altendorf. In addition to further pandemic waves and new virus variants, the supply chain continues to cause concern throughout the industry, he said. Endress+Hauser is therefore increasing inventories and strengthening its supplier network. New efficient logistics centres have been put into operation in China and Germany.