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2015/05/05

Following a record year in 2014 Körber AG prepares for structural and strategic adjustments

The leading international technology group Körber closed the business year 2014 with a record result and the Group is addressing the structural changes in its markets at an early stage. The company continues to focus on strengthening its technological leadership in a challenging economic and political environment, and remains committed to a roadmap of internationalization in order to be close to its customers.

The leading international technology group Körber closed the fiscal year 2014 with a record result and the Group is addressing the structural changes in its markets at an early stage. The company continues to focus on strengthening its technological leadership in a challenging economic and political environment, and remains committed to a roadmap of internationalization in order to be close to its customers.

In fiscal 2014, Körber AG continued its growth trajectory. The international technology group increased its sales by seven percent to 2.342 billion euros (2013: 2.194 billion euros). Incoming orders increased slightly by three percent to 2.320 billion euros (2013: 2.252 billion euros). Earnings went up across the Group by 16 percent to 258 million euros (2013: 222 million euros). This corresponds to a return on sales of 11 percent (2013: 10 percent). Net income for the year rose to 150 million euros (2013: 137 million euros). The positive result comes primarily from the alignment of the Group on a diversified portfolio strategy, strong customer orientation in all seven Business Areas, and future-oriented acquisitions.

Richard Bauer, Chief Executive Officer of Körber AG, commented: “We are delighted by the excellent result of the previous fiscal year. At the same time, our market environment is more challenging today than ever before.” In view of the deep-seated structural changes in individual markets – due among other factors to the increasing regulation in the tobacco industry – the Group must meet the intensifying challenge by adjusting its operations to structural change and exploiting new market opportunities. “Our success is based on the fact that our decision-making has always been geared toward a sustained development of our company,” added Bauer. “This demands the ability to adapt, long-term-oriented planning and flexibility. These capabilities have been and will be a key element of the Körber DNA. This will continue to be our approach to achieving success in the future.”
 
Stephan Seifert, Chief Financial Officer of Körber AG, emphasized: “Our healthy financial foundation permits consistent implementation of our initiatives, which are all geared toward long-term, sustained growth.”

The growth trajectory of the Group was also reflected in the employment figures. At the end of 2014, a total of 11,950 employees (2013: 11,190) were employed across the world in the companies of the Group. “Our committed employees working in more than 100 individual entities of the Group are due thanks for the outstanding result in 2014,” explained Bauer. “Our joint success is the result of hard work and forward-looking planning.”

The further development of the Group structure in 2014 into one with seven Business Areas and a reinforced market and customer focus forms a central foundation for future growth. Strategic investments constituted another building block. The objective and aspiration at Körber AG is for each Business Area to be optimally aligned with their individual market and customer requirements. This is how the Group can implement its diversification consistently.

In 2014, the Group took over two software companies. This move was intended to meet changed customer requirements and to position the Group with a clear future-oriented approach focused on the trend “Industry 4.0”. In March 2014, Körber acquired Werum IT Solutions GmbH with headquarters in Lüneburg. Werum is the world’s leading provider of software for production control and monitoring in the pharmaceuticals and biopharmaceuticals industry. In April 2014, the Group acquired a majority of the shares in Inconso AG based in Bad Nauheim near Frankfurt am Main. Inconso is the leading consulting and software provider for logistics solutions such as warehouse management systems and supply chain execution solutions.

Körber also laid further foundations in order to strengthen its strategic position in the Business Area Tobacco. This industry is currently beset by significant structural changes that are long term rather than temporary. Last year already, increasing regulation in the tobacco industry was reflected in a significant slowdown in purchasing and production throughout the entire industry. At the same time, consolidation continued within the sector. Demand has also been impacted by political and cultural conflicts – for example in the Middle East and Asia. Action was taken to adjust the strategic approach to these challenges by the acquisition of Garbuio Dickinson, one of the world’s leading manufacturers of machinery for tobacco processing by Hauni Maschinenbau AG at the end of June 2014. The headquarters of the Garbuio Dickinson Group is located in Treviso, Italy. “The outstanding products from Garbuio, their comprehensive R&D capacities and their additional international locations have meant that the takeover was an additional building block on the roadmap for safeguarding and strengthening this Business Area over the long term,” said Bauer.
 
The Group has also continued to drive forward internationalization during the current fiscal year with strategic acquisitions. The takeover of Efacec Handling Solutions S.A. based in Porto, Portugal, complements and expands the Business Area Logistics Systems. The company is one of the leading providers of automated conveyor technology and warehouse systems with additional locations in the Czech Republic, Spain, India and Singapore. Körber is thus positioning itself for further international growth in logistics at an early stage and is continuing to pursue the Group’s principle of operating close to customers and markets.

A joint venture with Swiss company ‘inspire AG’, which specializes in 3D printing, is intended to strengthen the focus of the Group on future technologies. The ETH Zurich technology and science university has a major involvement in ‘inspire AG’. The joint venture named ‘Irpd AG’ has its headquarters in St. Gallen (Switzerland) and is concentrating on the manufacture of industrial metal and plastic prototypes through to manufacture of complex workpieces in small batches. The joint venture focuses on innovative production methods, in particular on Selective Laser Sintering (SLS), Selective Laser Melting (SLM) and 3D printing. The joint venture enables the United Grinding Group AG, the holding company of Körber’s Business Area Machine Tools, to expand its expertise in the sphere of future-proof additive production methods and laser-based manufacturing technology.

As a key element of its future-oriented direction Körber strives to achieve technological leadership in all its Business Areas. Innovations with a focus on customer benefits play a key role here.

In fiscal 2014 expenses for research and development rose to 129 million euros (2013: 120 million euros). This corresponds to an R&D ratio of 5.5 percent (2013: 5.4 percent). In 2014 alone, Körber companies were granted nearly 190 new patents. This takes the number of patents held by the Group to almost 3,000.

Although the past year resulted in positive business success, the overall forecast is restrained. “This year we expect a decline in developments for sales and earnings,” commented Stephan Seifert. “The figures for the first quarter support this assessment. Challenging markets with restrained or even declining investment activity by our customers as well as economic effects from currency fluctuations will depress our earnings.” The increase in the value of the Swiss franc exerted a negative impact on locations in Switzerland.

“We are continuously reviewing our entire portfolio, in order to position ourselves correctly in rapidly changing markets at an early stage. This is an integral element of our future-oriented approach,” added Bauer. Körber has also been working intensively on existing programs to enhance efficiency, optimize costs and improve the structural organization in all parts of the Group. “Not only our result for the year was at a record level, the current challenges are also unparalleled,” stated Bauer. “In order to be successful in today’s challenging environment, it is important to keep analyzing our own position and to carry out a continuous process of improvement. This is by no means an easy thing to do. It requires a great deal of discipline and frequently strength of purpose. Nevertheless, our robust foundation allows us to position our company to master the future successfully,” explained the Chief Executive Officer.

Press Release May 5, 2015 (pdf)