Following the transitional year of 2013, Eberspaecher is on the threshold of a surge in growth: in the past financial year the Esslingen group of companies recorded a moderate growth in revenue of 3.2 percent. As expected, results fell significantly. The reason for this was the high levels of advance payments for future growth – in particular for business involving commercial vehicle exhaust systems complying with the new Euro 6 emission standard. The good order position in this strategically important market segment will begin to have a positive impact from 2014 onwards. Overall, the company expects a substantial increase in revenue and results in the current as well as the following financial years.
In 2013, the revenue of the Eberspaecher Group rose to 2,916.4 million euros – compared to 2,826.5 million euros in the previous year. The growth can be attributed essentially to the starting business in commercial vehicle exhaust systems complying with the new Euro 6 emission standard. At 19.5 million euros, the Group’s annual net income is significantly below the previous year’s figure of 71.5 million euros. Results were heavily affected by the high levels of advance payments not only for the European commercial vehicle business but also for safeguarding the future competitiveness of the Eberspaecher Group’s largest production plant in the Saarland town of Neunkirchen, Germany.
“Our high level of advance payments in 2013 will have a positive impact by the next reporting period”, stressed Managing Partner Martin Peters during the annual press conference at Esslingen Group headquarters. “The first quarter of 2014 is thus already showing an upward trend, making us altogether confidentwhen it comes to the current financial year.” Based on existing orders, Peters is assuming average revenue growth of 10 percent per year for each of the years 2014 to 2016.
Increase in workforce
As an annual average, the number of employees rose in 2013 by 7.3 percent to 7,888. 4,234 co-workers were employed in Germany, 3,654 abroad.
Automotive Controls established as a new Division
Over the past financial year, for the first time Eberspaecher has been reporting on its activities in vehicle electronics in the newly established Automotive Controls Division. This Division focuses primarily on electronic control units – for example for vehicle electrical system components for environmentally-friendly start-stop systems, for electro-transparent glazing or for high-voltage applications in electric vehicles. At the beginning of the year Dr. Dirk Walliser, a PhD-qualified physicist and a leading expert in vehicle electronics, was appointed COO. Under Walliser’s direction, Eberspaecher intends to expand its presence in the vehicle electronics market on a consistent basis.
In 2013, Eberspaecher Automotive Controls generated revenue of 39.9 million euros, i.e. 31.3 percent above the previous year’s figures which in 2012, however, were still being added to those of another Division. The biggest driver of growth was products designed for on-board power supply stabilization, which were increasingly in demand. In order to provide the required capacity, Eberspaecher has built a new plant for the development and production of electronic systems at the Landau in der Pfalz site, Germany. Here, the previously separated functions of Automotive Controls from the Herxheim and Kandel sites have been consolidated. It is also here that suitable potential for expansion exists for the planned growth of the new Division.
Exhaust Technology Division on the threshold of a surge in growth
In 2013 the Eberspaecher Exhaust Technology Division, which specializes in exhaust systems for passenger cars and commercial vehicles, increased its revenue by 2.2 percent to 2,449.4 million euros. Following the start-up of the production of Euro 6 exhaust systems for commercial vehicles in 2013, from 2014 onwards Eberspaecher is expecting a strong surge in growth in this segment. “In future, a large proportion of the new trucks on Europe’s roads will be driving with exhaust systems from Eberspaecher”, said Martin Peters, highlighting the market-leading position of the company in this strategically relevant business segment. In North America too, following a large increase over the previous year, the commercial vehicle exhaust systems business was able to hold its own at a high level. “Generally speaking, across all vehicle segments in Europe, North America and China, Eberspaecher Exhaust Technology made forward-looking progress overall in 2013”, is how Martin Peters summed up the performance of by far the largest Division in the Eberspaecher Group.
The restructuring of the largest exhaust technology production plant in the Saarland town of Neunkirchen, announced back in 2013, is not yet complete. By 2016, the plan is to bring cost structures, manning levels and the order position into line in such a way that the plant will again become internationally competitive. The necessary changes may entail a reduction in personnel of up to 500 co-workers over the next three years. Enforced redundancies will be avoided as far as possible but cannot be entirely ruled out.
Strategic realignment in the Climate Control Systems Division
The second largest Division, Climate Control Systems, offers products and solutions covering the area of thermal management in the vehicle. In 2013, revenue was 427.0 million euros. This is equivalent to an increase of 6.8 percent – not taking into account sales involving vehicle electronics which, in the previous year, had still been allocated to this Division.
Over the past year, the original equipment of passenger cars and commercial vehicles has ensured growth in fuel-operated heaters. In the aftermarket business, sales both domestically and abroad varied within a range slightly above the level of the previous year. Overall, the electrical heaters business proved to be satisfactory despite the slight fall in Germany. Here, Eberspaecher was able to profit from the strong growth in North and Central America and from moderate increases in Europe excluding Germany. Although the market for electric cars was on the whole less dynamic than expected, the demand for heaters for battery-operated vehicles firmed up strongly. When it came to the bus air-conditioning systems of Eberspaecher Suetrak, the trend was less gratifying. Due to the sales crisis in the main markets of Southern Europe, ultimately revenues were significantly below the previous year’s level.
In order to be able to service the requirements of customers even better in the future, the Climate Control Systems Division underwent a strategic realignment in 2013. The focus was on the rigorous division of the organization into the Original Equipment and Special Markets Business Units, where Eberspaecher successfully positioned itself as a competent partner for special vehicle manufacturers and the international trade.
