Long-term strategy pays off - SICK back on growth course with increased speed 

Back on its growth course in 2010, SICK even exceeded the orders received and sales achieved in the boom year of 2008. Totaling EUR 809.4 m., incoming orders were not only 36.6 percent above the preceding year’s value, but also 10.2 percent higher than in the previous record year of 2008. This first-class figure could be converted to sales amounting to EUR 748.9 m. Thus sales were 25.5 percent above the previous year’s level and 1.6 percent above the sales achieved in the 2008 fiscal year. The company’s dynamism is also evident in the book-to-bill ratio, which was 108.1 percent at the end of 2010 (previous year: 99.3 percent).
Following the recovery of SICK’s business activities during the last quarter of 2009, demand for SICK sensors grew increasingly during the 2010 fiscal year. There was no fall in the orders received even during the usually weaker summer months. Even if SICK, with its record sales in 2010 was not quite able to achieve the earnings of 2008, it nevertheless almost reached the pre-crisis level with an EBIT of EUR 67.5 m. This result was, however, affected by costs, especially personnel and material costs, attributable to weak capacity utilization at the start of the year.
Against this background, SICK has achieved a very good result.

Strategic industry strengths
SICK was able to achieve double-digit growth rates in every industrial region worldwide during the 2010 fiscal year as a result of its broad international strategic industry positioning. As in the previous year, growth was driven by the Asia-Pacific region. Asia, and particularly China, provided a very special boost in 2010. The sales volume of EUR 118.7 m. achieved in Asia was therefore at the same level as that of North America for the first time.
In South America, Africa and the Middle East it was above all Brazil, the United Arab Emirates, Israel and South Africa that developed very well. SICK took into account the growth in South Africa, and the further growth potentials present there, by founding its own subsidiary in the country.
Growth rates in Europe and North America, 25.7 percent and 25.9 percent respectively, were almost the same. For North America this was despite the still below-average economic dynamism in the USA, and represents excellent business development borne by exchange rate developments between the euro and the US dollar. Europe as a whole presents a very mixed picture. While in Turkey, Sweden, Slovakia and Poland production gained new momentum extremely quickly, the situation in countries such as Spain and France was somewhat sluggish. Overall, however, growth exceeding 25 percent in Europe is an excellent result.

SICK’s domestic market, Germany, is still its largest individual market and thus the major driver of revenues. Although the German economy, supported by the booming export trade, has recovered better and more rapidly than that of other industrial nations, the effects of this growth are somewhat delayed, though already very robust. All the same, the SICK Group’s sales in Germany rose by 20.4 percent to EUR 181.7 m. compared to the previous year.

The results of the individual segments

SICK divides the Group’s business activities into factory, logistics and process automation segments.

From the segment point of view, the Factory Automation segment in particular profited from the good economic situation, achieving double-digit growth in sales in all target strategic industries. Particularly strong growth stimuli came from the electronics and solar industries, as well as from the consumer goods industry. The automotive industry, however, also developed excellently so that segment sales rose by 35.8 percent to EUR 451.0 m., thus exceeding those of 2008.

The Logistics Automation segment was also able to profit strongly from the increasing economic dynamics: the willingness to invest shown by courier, express and parcel service providers, in particular, as well as by equippers for the postal sector and for warehousing and materials handling led to growth in sales of 23.9 percent to EUR 163.8 m. The Logistics Automation segment therefore actually exceeded the sales achieved in 2008 by 6.5 percent.

The strategic industries that are served by the Process Automation segment underwent highly varied development during the 2010 fiscal year. While both the metal and steel industry and the pulp and paper industry achieved high growth rates, other areas, such as the chemical, waste, and natural gas industries, were more restrained. Because Process Automation had grown particularly strongly during previous years, and was much less affected during the crisis year of 2009, with sales of EUR 134.1 m., this segment thus generated a slight increase in sales of 1.2 percent during the 2010 fiscal year. The far higher incoming orders show that Process Automation, too, will return to stronger growth in 2011.

Personnel – the most valuable asset in the company
Thanks to the workforce’s outstanding flexibility and commitment, SICK was able to adapt to the very different economic dynamics worldwide in an optimum manner. The reason why the company succeeded in growing by 25 percent was, above all, because all the employees could be kept on board during the crisis. After entirely scrapping short-time working in March 2010, these employees have been dealing with the considerable incoming orders with great dedication and motivation.

The SICK Group’s growth can also be seen in the constantly rising number of employees: 5,193 personnel were employed in the SICK Group on December 31, 2010 – 274 more than at the start of the year. The number of employees in Germany rose by 4.5 percent to 3,243, while the workforce abroad rose by 7.4 percent to 1,950 employees.

Expenditure on training and further education was EUR 5.8 m. in the 2010 fiscal year (previous year: EUR 5.3 m.) – a rising trend. The number of trainees in the year under review averaged 197, and was thus almost the same as during the previous year.

Research and development – SICK continues its innovative course

SICK invested EUR 67.3 m. in the Research & Development Departments during the 2010 fiscal year (previous year: EUR 64.6 m.). This represents an innovation rate amounting to 9 percent of sales. The high absolute value is, however, a form of advance payment amortized by last year’s record growth. Considerable efforts in Research and Development, and the resultant innovations, are the potential upon whose basis SICK will continue to expand its business in the future.

Prospects:
SICK has made an excellent start to the 2011 fiscal year. The development of sales during the first three months leads to the conclusion that the company will exceed the targeted level of EUR 800 m. in 2011. Major uncertainties such as the euro and debt crises cannot, however, be ignored. Recent events in Japan and the Arab world tragically remind us yet again about how unstable any forecasts can be against this background.