15/06/2020

15 June 2020
15 June 2020, Comments Comments Off on Eberspaecher’s results show revenue increase of almost 8% to €4.9 billion
Eberspaecher’s results show revenue increase of almost 8% to €4.9 billion

The Eberspaecher Group managed to increase its consolidated revenue by just under eight percent to €4.966 billion in the last year, according to its latest financial report.

“We can be pleased with our performance last year”, says Martin Peters, Managing Partner of the Eberspaecher Group, summarizing the overall results.

Peters continues: “We managed to secure major orders from key clients and simultaneously successfully expanded our global production network.”

The Group’s consolidated annual net income of €58 million (previous year: €53 million) underlines the positive developments.

Last year, the company invested primarily in expanding its production capacity, including in China, India and Mexico, and recorded its highest ever level of capital expenditure (€149 million).

“We specifically invested in our international plants as we are experiencing global growth in our business areas – with products designed to achieve clean mobility for the future”, summarizes Peters.

The further internationalization of the Group is reflected in the proportion of foreign business: almost 80 percent of revenue was generated abroad.

The number of employees rose slightly to an average of 9,928 (+0.7%); 5,422 of them are employed abroad.

Expenditure on research and development remained high at €160 million.

“Innovative products form the basis for our future success. We are focusing firstly on ensuring that our established Business Units are fit for the future by implementing further developments, and secondly on simultaneously developing additional business areas”, says Peters clarifying the Group’s innovation strategy.

The coronavirus pandemic has presented challenges.

“It is doubtful whether we will be able to successfully utilize the investments made in 2019 in 2020”, says Peters expressing restraint concerning recent achievements on account of the current situation.

Eberspaecher has had to deal with the effects of the coronavirus since the start of this year. The protection of its employees is the family-owned company’s top priority. Numerous measures have been introduced throughout the entire global organization, from the wearing of protective masks and the implementation of hygiene rules to the rectification of contact points.

Partition walls have been installed in areas where the minimum distance required between production workstations cannot be observed. Office workers have been working extensively from home since the middle of March.

“The swift and responsible action we have taken to protect our employees has been successful and so far globally we have only had a few isolated infections”, says Peters.

However, the Managing Partner believes that the economic consequences of the pandemic will be serious: “We cannot yet put an exact figure on the economic consequences for 2020 but can only assume that there will be a significant fall in revenue.”

Like all companies in the supplier industry, Eberspaecher has for weeks been affected by global production shutdowns and the very slow and cautious restart by vehicle manufacturers.

The sales markets in Europe and America took a huge hit in March and practically seized up altogether in April. The German sites are on short-time work since April 1, and similar country-specific rules are being introduced all around the world.

“The German production sites in particular are currently under even greater pressure compared to other countries. In order not to jeopardize the entire company during this situation, we need to introduce necessary changes more swiftly than this would be necessary under normal market conditions”, summarizes Peters.

This means, that for example the production plant of fuel operated heaters with about 300 employees in Esslingen, Germany will be phased out by the beginning of 2022.

Progress in the financial year 2020 will depend on further country-specific developments as well as the resulting slow economic recovery. The Chinese sales markets are showing positive initial signs. However, like the entire automotive industry, the company does not expect a return to pre-crisis revenues and earnings levels until the medium term.

The Climate Control Systems Division achieved revenue in 2019 of 506 million euros, which was slightly higher than the previous year. This was partly thanks to an increase in revenue from electrical heaters for passenger cars with hybrid and electric drives. However, due to volatile demand, this was below expectations. Declines were recorded in the Fuel Operated Heaters Business Unit in the passenger car as well as commercial vehicles segments. There was a slight increase in revenue from air-conditioning systems for buses. This was in particular due to new projects in the city bus segment for the US American and French markets. The Division expects to see significant growth in the next few years on account of growing demand amongst customers for e-mobility-related heating and cooling products.

The automotive electronics business was able to achieve the growth spurt which had been forecasted during the previous year. The Automotive Controls Division recorded revenue of 65 million euros (previous year: 54 million euros). This was partly thanks to the start of production of energy storage modules and control units for glow plugs for two automotive manufacturers. Electronics production for electrical vehicle heaters at the Tianjin plant in China also began in 2019. Products for safety-relevant functions of driverless vehicles in particular represent future potential for the Division. Last year, a specially developed safety switch for the vehicle electrical system was the first product to go into series production.

With approximately 10,000 employees at 80 locations worldwide, the Eberspaecher Group is one of the automotive industry’s leading system developers and suppliers. The family business, headquartered in Esslingen am Neckar, in Germany stands for innovative solutions in exhaust technology, automotive electronics and thermal management for a broad range of vehicle types. Eberspaecher components and systems provide more comfort, greater safety and a cleaner environment on or off the road. In 2019, the Group generated revenue of more than €4.9 billion.