Hansgrohe releases annual report
Maintaining a safe course through innovations Hansgrohe AG records a good year in fiscal 2009 – and is ready to take off in the course of the recovery
Stuttgart/Schiltach, May 19, 2010. “No short-time work, no lay-offs, no cuts to wages and benefits, no investment stop, no radical budget cuts,” is how Siegfried Gänßlen, Chairman of the Management Board of Hansgrohe AG (www.hansgrohe.com), summed up the last financial year during today's financial press conference in Stuttgart. “2009 was definitely a challenging year. As a company operating with a global reach, we certainly felt the effects of the economic crisis on world trade and on the construction industry – as did the entire international sanitation sector. However, the drop in revenues anticipated in these general economic conditions was contained within the single-digit percentage range thanks to the countermeasures we adopted at an early stage, and as a result of the joint efforts we undertook together with our market partners.” Total net sales of Hansgrohe AG in fiscal 2009 amounted to € 610 million (2008: € 668 million) – which represents a decline of 8.6 percent year-on-year. Earnings before interest, taxes and depreciation of this Black Forest-based fittings and shower manufacturer even improved in spite of lower sales, setting a new record at € 140 million (2008: € 131 million). The EBITDA margin climbed to 22.9 percent in the last financial year (2008: 19.7 percent). Similarly, it was possible to maintain personnel levels at the previous year’s level with around 3,100 employees worldwide, more than 60 percent of whom working in Germany. “We managed to further improve our market position both on the home market and abroad,” was the positive assessment by the CEO of Hansgrohe. “2009 was a good year for our company.”
Germany as a growth driver Unlike the position in previous years, in 2009 the impetus for growth originated mainly in the domestic business, where the company again succeeded in boosting its market share. While sales revenues generated locally grew by three percent to € 140 million (2008: € 137 million), order receipts outside Germany’s borders were well below the previous year’s level, especially during the first six months of 2009. A drop of 12 percent was recorded in foreign markets for 2009, with revenues down to € 470 million (2008: € 531 million). This meant that the contribution to net sales from international business declined to 77 percent (2008: 80 percent) in the last financial year.
“The impact of the economic crisis on the different markets varied greatly,” explained Hansgrohe CEO Gänßlen. “In central Europe, the Far East and Africa, we even recorded significant growth in 2009 compared with the previous year. By contrast, in markets such as the United States, Spain and the UK, where the economic slump coincided with a severe crisis in the property and construction industries, we had to absorb drops in revenues in the double-digit percentage range.” And yet, he added, even in those markets the company had succeeded in arresting or slowing the decline in revenues during the second half of the year. “Beginning in the third quarter of 2009, our foreign and project business operations picked up markedly,” declared Siegfried Gänßlen. “Order receipts for September 2009 were the best in Hansgrohe’s corporate history. Since then, we have recorded year-on-year increases in sales across all distribution channels.
Germany’s No. 1 in China The positive business performance in China also contributed to this trend. After a rather weak start into the last financial year, the Chinese Hansgrohe distribution company based in Shanghai managed a return to growth as early as the spring. Operating in a less dynamic environment than in previous years, the company boosted sales in the "Middle Kingdom" by 12 percent in 2009, as well as gaining a considerable share of the market. “In doing so," said Siegfried Gänßlen, “we further consolidated our position as the No. 1 of German fittings and shower manufacturers in China.”
One the one hand, it is the great reputation of the Hansgrohe and Axor brands that is responsible for this successful performance which went against prevailing market trends, as is the esteem in which Hansgrohe’s design partners are held in China. This is because in China, the brand awareness of the upper and middle strata with their considerable purchasing power is much more pronounced than in other markets. “With a broad range of products tailored to suit the needs and opportunities represented by these buyer groups and through appropriate marketing campaigns, we have now successfully positioned ourselves as a premium brand,” reported the Hansgrohe CEO. "Our marketing success is not least due to the fact that our strong local management team has established close relationships with customers, and on this basis was the first German company in the sanitary goods industry to set up a dense network of dealerships in China’s gigantic market.” In 2009 alone, Hansgrohe added a further 90 shops to its network. In April 2010, the first flagship store with a display area of more than 300 square meters opened its doors in the heart of Shanghai.
The “Global Player from the Black Forest” also did well in the up-market project business – which in China suffered only relatively briefly as a result of the economic crisis – with quality products “Made in Germany”, and thanks to a customer-oriented service structure and a great deal of flexibility. “The contract for supplying a large-scale project on the Chinese prestige location Sanya Phoenix Island was won not least because Hansgrohe was able to deliver the required 1,800 high-end shower systems in the form of modified custom models with a very short lead time.” It was therefore no great surprise that the Schiltach-based bathroom specialist was ranked among the top ten industrial companies in China for its exceptional after-sales service.
2009 – the year of innovations Indeed, the focus on improving our customer service, the continuation of the international expansion strategy, an intelligent cost management system and the increase in its innovative power have all contributed towards keeping the company on a steady course. “The fact that we succeeded in improving our competitive position in an uncertain market environment can be attributed to the fact that we persisted with our strategy and continued to invest heavily in innovation in 2009,” stressed the Hansgrohe CEO. The 35 patents, 304 registered designs and 45 trademarks submitted by Hansgrohe AG last year are testimony of the very high rate of innovation and the fruitful interaction between research, development and production at our German home location. “For Hansgrohe AG, 2009 was not so much the year of the crisis, but the year of innovations.” The exceedingly positive response to the new Hansgrohe PuraVida fittings and shower program, the Axor Urquiola designer collection and the extension of the Pontos AquaCycle technology with the optional heat recovery system have all boosted Hansgrohe’s fortunes. This is evident in the fact that 30 percent of total net sales were generated for fittings, showers and shower systems that have been rolled out on the market within the last three years.
In addition to its ability to continually stay ahead of the competition by introducing innovations in technology and design that meet the needs of markets and consumers alike, Hansgrohe AG also relies on its innovative power to constantly boost both the efficiency of processes and the quality of its products along the entire value-added chain. For instance, in fiscal 2009 the targeted restructuring in the production layout of all plants, the systematic changeover to assembly line production and the expansion of the hybrid assembly lines succeeded in streamlining manufacturing processes, increasing flexibility and boosting the output per manufacturing unit. Moreover, redesigned logistics procedures and their continued automation by means of RFID technology resulted in greater efficiencies in the control of processes in manufacturing, warehouse and dispatch operations, as well as providing more streamlined warehouse management and reducing throughput times.
Investing in the future The fact that there was sufficient scope last year to make strategic investments in growth areas, in the further development of international markets and in its own junior talent staff was due to having an intelligent cost management system and flexible cost structures in place. Under the efficiency enhancement program “Hansgrohe Plus 21”, which has been rolled out systematically since 2001, the company realized savings in the order € 33 million alone.
The constant improvement of our cost structures while maintaining the same high standard of quality is also creating the necessary conditions for investing in the development of new ideas and the exploitation of additional growth potentials in the current financial year. The company will spend about € 37 million – more than ever before in the history of Hansgrohe – in upgrading its production facilities and in innovations in terms of technologies, design, quality and sustainability. “Of this total, some 30 million euros will be invested in our German locations," announced Siegfried Gänßlen. “In 2010, we will be building again to enlarge our fittings manufacturing plant in Offenburg by about 50 percent. This will involve the creation of some 50 to 100 new jobs, depending on our business performance.”
Moreover, the Hansgrohe Group will continue with its strategy of internationalization and further boost its sales team. Following the establishment of subsidiaries in South Africa, Australia, Croatia and Mexico in 2009, the Black Forest-based fittings and shower manufacturer opened a regional office in Abu Dhabi as well as a flagship store in Dubai in January this year. “Preparations for the continued expansion in South America, South East Asia and the Middle East are already in full swing,” reported Hansgrohe's Chairman of the Management Board. “Because we are confident that our quality products ‘Made in Germany’ will prove successful in these promising regions as well. Together with our market partners we will emerge from this crisis stronger than before and return to growth this year. We are ready to take off at full throttle as soon as the economy picks up.”
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