The Group's net sales rose by 4.8% to 2.241 billion euros in 2017. However, the appreciation of the euro against most currencies distorted the picture. "We grew by 6.5 percent in local currencies and by 8.0 percent in the instrumentation business," explained CEO Matthias Altendorf at the Group's annual media conference in Basel. "We assume that Endress+Hauser has strengthened its position in the market."

Strong private consumption, a stabilizing oil price and low interest rates were reflected in higher investments in the process industry in 2017. "Companies need to expand their capacities and they want to produce in a competitive, safe and environmentally friendly way," said Matthias Altendorf.

Matthias Altendorf (Image: Endress+Hauser)

"We did good business in practically all regions and sectors," says Altendorf. China and the USA - two of the three largest markets - grew dynamically; in Germany, the number one market, sales were still lagging behind the already increasing order intake at the end of the year. The positive development was broadly based across the various sectors. The oil and gas industry also contributed to growth. The energy and power plant sector continued to develop, particularly in the area of renewable energies.

Innovative technology gave the business a major boost. The company launched 57 new products and 571 device options last year. Expenditure on research and development rose to 170.7 million euros. This corresponds to 7.6 percent of turnover. 261 initial applications to patent offices around the world reflect the importance of innovation; the portfolio now comprises 7,479 patents and property rights.

Digitalization is playing an increasingly important role. "Our customers have recognized this: The Industrial Internet of Things is changing the value chains," says Altendorf. "The new transparency makes it possible to optimize processes and increase efficiency." The concepts for Industry 4.0 are taking shape. For example, the Group launched its first digital service for analyzing and managing the installed base of devices.

Three acquisitions strengthen the Group's range for measuring and analyzing quality-relevant parameters. The systems from SensAction measure concentrations in liquids, while the sensors from IMKO Micromodultechnik detect moisture in solids. Blue Ocean Nova's technology allows spectroscopic methods to be integrated directly into the production process. In the laboratory area, Analytik Jena focused even more strongly on its core business with instruments and bioanalytical systems.

Endress+Hauser improved its operating result (EBIT) by 15.0 percent to 251.7 million euros. Despite high costs for foreign currency hedging, earnings before taxes (EBT) rose by 24.9 percent to 275.6 million euros thanks to special effects from the sale of an investment.

Profit after tax grew by 34.2% to 209.1 million euros. The significantly lower effective tax rate of 24.1% compared to the previous year is a result of the change in the local composition of profit. "We are a good taxpayer," emphasized Matthias Altendorf. "This is part of our social responsibility."

The return on sales (ROS) climbed by 2 points to 12.3%. In contrast, the equity ratio fell by 0.3 points to 70.2% due to exchange rate effects. Due to changes in accounting principles, it is 2 to 3 percentage points lower overall than in previous years. Nevertheless, the Group is in a solid financial position and manages practically without bank loans. "We finance investments, acquisitions and dividends from the funds we generate," emphasized Chief Financial Officer Luc Schultheiss.

Endress+Hauser invested 138.7 million euros worldwide. The third plant in China was built in Suzhou with additional production capacities for flow, temperature and analytical measurement technology. This includes the world's largest and most modern flow calibration system of its kind. The new building for the Belgian sales department demonstrates how deeply rooted the concept of sustainability is: the modern building doubles the usable space and halves the energy consumption.

"As a family business, we want to grow sustainably," emphasized CEO Matthias Altendorf. One strategic indicator of this is the annual EcoVadis benchmark, which assesses the sustainability of suppliers. In 2017, Endress+Hauser scored 66 out of 100 points, placing it among the top 2 percent of the companies surveyed.

The company created 296 new jobs last year, significantly more than planned. At the end of 2017, 13,299 people were working for the Group around the globe. Due to rising demand, new jobs were created primarily in production and service. In the tri-border region around Basel, the two production sites for flow measurement technology recorded the most significant increase.

Good prospects for the current year

Endress+Hauser has started the current year with a strong increase in orders on hand. The Group aims to increase sales in the mid-single-digit percentage range and expects profitability to remain stable without special effects. Investments of 223 million euros and up to 500 new jobs worldwide are planned. "We are currently above budget in terms of incoming orders," said Matthias Altendorf. "We expect 2018 to be another good year for Endress+Hauser." kp