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Growth continues despite turbulent times - SICK completes 2012 fiscal year with new records for sales, orders received, EBIT and annual profit

Apr 11, 2013
  •   Sales: EUR 971.3 m. (previous year: EUR 902.7 m.)
  • Orders received: EUR 994.9 m. (previous year: EUR 922.3 m.)
  • Wide-ranging investments safeguard future growth

The SICK Group can look back at an eventful and strong 2012 fiscal year despite the harsher market environment. SICK was able to continue growing and further increase sales, orders received, EBIT and annual profit. Thus, business with intelligent sensors again proved a guarantee for sustainable worldwide growth. With its continued targeted investments in employees, innovations, and the expansion of its business models, SICK also made provisions for future growth.received, EBIT and annual profit. Thus, business with intelligent sensors again proved a guarantee for sustainable worldwide growth. With its continued targeted investments in employees, innovations, and the expansion of its business models, SICK also made provisions for future growth.

Intelligent sensors as a sustainable engine for growth
“SICK’s success has many facets – and many faces,” says Dr. Robert Bauer, Chairman of the Executive Board of SICK AG. SICK’s direct aim is to offer its range of products and services to customers to provide them with real added value so that they can achieve increased performance. For there is great pressure to rationalize and conserve resources in the automation industry, particularly during more turbulent times. This also changes the demands made of the sensor industry – to which SICK has reacted in recent years. Customers’ complex tasks involve comprehensive consulting, engineering and applications expertise which, in turn, require more personnel in sales, more engineers in research and development, as well as more industry experts and service technicians – and this worldwide. In addition to the development of products, the development of entire systems has also gained in strategic importance for safeguarding the competitiveness of the SICK Group. At the same time, structures within the company have been further developed and expanded in order to be also well prepared organizationally for the new challenges – and thus for future growth. “All these investments, and the necessary changes in the organizational structure that were completed this year with the new Executive Board structure, represent considerable investments in the future that will very quickly prove effective,” Bauer continues.

The strongest orders and sales year in the company’s history
The SICK Group was largely able to overcome the difficult economic conditions and the effects of volatile markets to achieve further growth. 2012 was the strongest orders year ever: with orders received amounting to EUR 994.9 m., exceeding the record year of 2011 by 7.9 percent. Sales also reached a new record by the end of the 2012 fiscal year and, at EUR 971.3 m., were 7.6 percent higher than in the previous year.

Due to the company’s growth, personnel costs and other operating expenditure rose 11.3 and 8.0 percent respectively compared to the previous year. Regarding costs, 2012 was characterized by further intensive expansion in research and development, as well as in worldwide sales. There were also organizational structural adaptations for the future, particularly the consolidation of SICK MAIHAK GmbH in SICK AG on January 1, 2013.

Material costs, on the other hand, fell because the situation on the procurement markets relaxed again and lower strategic stocks were required.

Despite the overall higher costs resulting from the numerous important structural changes, and the considerable investments in building up expertise and in R&D activities, earnings before interest and tax (EBIT) amounted to EUR 84.1 m. in the 2012 fiscal year. The value of the EBIT is only 0.8 percent above that of 2011 (EUR 83.4 m.) because of the investments made in the future and, ultimately, the troubled market environment.

Growth of the Group’s annual profit was considerably stronger: EUR 58.9 m. represents an increase of 13.3 percent compared to the previous year (EUR 52.0 m.).


Growth in all regions of the world
The Asian-Pacific area was again the most important growth market for the SICK Group in 2012, despite the somewhat lower growth rates. Sales of EUR 172.4 m. represent growth of 16.6 percent compared to 2011 (EUR 147.8 m.). This development is mainly due to the further expansion of the Regional Product Centers in Singapore and Malaysia: Our presence there enables the SICK Group to provide the regional markets with products manufactured locally and adapted to regional requirements. The same applies for the region of North, Central and South America, where we also invested in expanding the Regional Product Center in Minneapolis, in the USA, and achieved further sales growth. At EUR 188.7 m., sales during the 2012 fiscal year exceeded those during the previous year (EUR 174.4 m.) by 8.2 percent. Despite the euro crisis, Germany demonstrated its relative strengths during the last year. Sales here increased by 7.9 percent from EUR 215.9 m. to EUR 233.0 m. In the EMEA region, on the other hand, the weakness of several European countries, above all Italy, was noticeable. There was restrained growth here; sales of EUR 377.2 m. were 3.2 percent above those of the previous year (EUR 364.5 m.).

Development by segment
The SICK Group divides its business activities into the Factory, Logistics and Process Automation segments.

The Factory Automation segment completed the 2012 fiscal year with sales amounting to EUR 559.8 m. This is 6.6 percent higher than in the previous year (EUR 525.2 m.). This was largely due to the high demand from carmakers and automotive suppliers, in particular, for sensors for production processes. In the consumer goods industry, the SICK Group grew in all customer segments last year. However, sales to the electronics and solar industries, as well as those involving drive technologies, remained below the values achieved in 2011.

Business within the Logistics Automation segment also proceeded satisfactorily. Segment sales were EUR 227.3 m. by the end of the year – growing 6.2 percent compared to the EUR 214.0 m. during the previous year. Above all, SICK was able to greatly increase the provision of equipment to the retail trade and to airports. The increased use of self-service bag drop systems at German airports made a particularly large contribution here. The ports, cranes and traffic sectors also developed satisfactorily.

The Process Automation segment exploited its growth opportunities best during the 2012 fiscal year: Sales grew 12.7 percent, from EUR 163.5 m. in the previous year to a total of EUR 184.2 m. in 2012. In particular, the waste incineration and recycling sectors, as well as the equipping of diesel power stations and ships with emission measurement systems, developed very well. Growth also took place in the chemical industry and the mining sector, where increasing numbers of operators use SICK system solutions to ensure the safety of their mines. Process Automation was even able to increase its core business of ultrasonic flow measurement for natural gas pipelines by a third.

Workforce expansion as the foundation for corporate growth
Despite the ever-increasing competition for the ‘best brains’, the SICK Group was able to gain 449 new employees during the past fiscal year in order to be able to sustain its growth strategy. The 6,000th employee was welcomed to the company in April. By the end of the 2012 fiscal year the SICK Group had a total of 6,302 personnel – 7.7 percent more than at the end of 2011. This expansion in competence has made it possible to intensify activities in research and development and reinforce the worldwide sales organization.

Research and development as the basis for competitiveness
Investment in research and development has remained at a constant high level in the SICK Group for many years. EUR 93.5 m. was invested here during the 2012 fiscal year (2011: EUR 80.4 m.). This is equivalent to 9.6 percent of sales (2011: 8.9 percent). An average of 708 employees – 15.9 percent more than during the previous year – worked on the technical progress of the SICK Group and its customers during the 2012 fiscal year.

Prospects
With its active provisions for the future, the SICK Group has intensively used the 2012 fiscal year to enable it to continue exploiting its opportunities on the market against the competition. Economic uncertainties in 2013 will ensure that many sectors see themselves exposed to enormous pressure to rationalize production and logistical processes. Investments will only be undertaken if they contribute towards increasing performance or conserving resources. This applies for all the strategic industries of the SICK Group. Thanks to its wide range of products and services, its system and solution competence, its sector knowledge, and its worldwide presence, the company is in a position to meet the demands of customers for intelligent automation solutions that offer them added value.

The forecast for the development of the SICK Group in 2013 is therefore cautiously optimistic despite the restrained business situation during the first quarter. “We believe that we will achieve low single-digit growth this year as a result of the current economic situation. Aside from these economic highs and lows, we think we are ideally equipped to meet the demands of the markets and customers with our innovative range of products and services, and with our competent employees,” Bauer sums up.

 

The SICK Group (IFRS) 2012 2011  Change in %
 Orders received (in m. EUR)  994.9

922.3 

7.9
Sales (in m. EUR)  971.3 902.7 7.6
 EBIT (in m. EUR)  84.1 83.4 0.8
 Annual profit (in m. EUR)  58.9 52.0 13.3
 R&D expenditure (in m. EUR)  93.5 80.4 16.3
 Employees at end of year  6,302 5,853 7.7
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