Tony Jacobsen, Managing Director, Endress+Hauser, South Africa

Instrumentation and automation specialist, Endress+Hauser, has announced impressive results for the 2005 financial year with an increase in both turnover and profits. The group, based in Reinach, Switzerland, boosted net sales by 12.8% to € 885.1m which is an increase of €100.0m.

The pre-tax result increased by 60.3% to €100.9 m and the company made investments of €62.8 m and strengthened its equity ratio by 1.5 points to 52%. At the end of 2005 the company employed 6,719 employees worldwide - 425 more than the previous year.

"In 2005 we improved in every respect,” says group Chief Executive Officer Klaus Endress.

The company grew at a rate of 12.8% which was significantly faster than the process automation market as a whole, which expanded by 7 to 8% worldwide. "This is evidence that we have continued to gain market share,” says Endress. "The fact that we have consistently focused on the needs of individual sectors and systematically transformed Endress+Hauser from an instrumentation supplier into a provider of automation solutions has paid off.”

Chief Financial Officer Fernando Fuenzalida adds that the company's growth is equivalent to the turnover of a medium-sized company and minor adjustments in exchange rates and the slight depreciation of the euro favoured this success. Thanks to a lower effective tax rate, Endress+Hauser achieved a net income of €69.8 m (a 67.9% increase).

The operating result (EBIT) rose - despite another slight decline in margins - by 52.7 % to €101.9m

"This reflects the significant increase in productivity,” says Fuenzalida. The growing number of orders ensured that the production sites worked to capacity. Moreover, improved processes also had a positive effect, as did closer collaboration within the group - such as in the purchase of electronic components.

Endress+Hauser further improved its cash flow to the current figure of €108.8m (an increase of 30.5%). Equity capital increased by 20% to €375.9 m. The balance sheet total rose by 16.6% to €723.0m, so that the equity capital ratio, which was already high, once more increased by 1.5 points to 52%. Endress+Hauser's full financial strength becomes apparent when the group's bank loans of €73m (a reduction of €2.7m) are compared with its cash and cash equivalents of €117.1m (an additional €19.4m). "This will allow us to handle the major projects planned for the coming years using our own resources,” notes Endress.

Almost all markets developed positively. Europe enjoyed upper single-digit growth thanks to a well-positioned engineering and plant construction sector. In Asia, growth remained consistently strong and the upswing in Japan proved to be stable. The strongest growth, however, was recorded in North and South America. Africa - essentially South Africa and the Maghreb countries - also developed positively.

"Drawing on the strong performance of the Endress+Hauser group, we've taken advantage of the momentum and have achieved good order intakes and recorded excellent growth in many areas. Endress+Hauser South Africa is well poised to further contribute to the group's success with its further expansion into the Southern African region,” says Tony Jacobsen, managing director, Endress+Hauser, South Africa.

Endress+Hauser invested €62.8m in tangible assets last year, an increase of 24.4%. Acquisitions and the establishment of new companies strengthened Endress+Hauser both in the market and on the product side.

Expenses for research and development increased in 2005 by 5.8% to €74.2m, thus making up 8.4% of net sales. There is a strong focus on innovation at all levels of the company. To a considerable extent, this is due to the 'Patent Rights Incentive Program', which provides incentives for lodging patent applications throughout the company. Endress+Hauser registered 173 patents in 2005, once again an increase over the previous year.