Innovation pays: SICK sets new earnings record
Waldkirch, 11 April 2005. SICK AG sustained its strong growth in the 2004 fiscal year: Group sales grew by 8.7 per cent to EUR 538.2 m despite Germany’s weak economy. With earnings after tax of EUR 29.4 m (+9.9 per cent) the SICK Group has again achieved record results. Growth was once more driven by the factory automation segment, while process automation suffered a slight fall in sales. SICK has founded its own sales subsidiaries in Turkey, Russia and Slovenia in order to participate more intensively in the growth markets of eastern Europe.
For the first time, the SICK Group has presented its results according to the guidelines of the International Financial Reporting Standards (IFRS). According to the IFRS, earnings per share were EUR 1.12, after EUR 1.02 in the previous year. With an equity ratio of 42.3 per cent (41.7 per cent in 2003) the SICK Group remains within its capital structure target corridor.
For SICK AG, listing on the stock exchange is one component of its long-term strategy. In view of the high equity ratio and good cash situation there is, however, still no urgency to take such a step, so that there will not be any activities on the stock exchange in the foreseeable future.
The majority partners, the Sick family, are as before prepared to further enhance their solidarity with the company. Thus the Sick family has purchased a further 5% holding in the BWK GmbH Unternehmensbeteiligungsgesellschaft participation and now holds 77% of SICK AG’s shares.
The principal shareholders continue to support strong organic growth in the global environment. Major expenditures on research and development, and spending to expand the company’s worldwide presence, can be financed from capital resources.
A listing on the stock exchange remains a strategic option for financing any currently unforeseeable larger acquisitions, or for extraordinary expansionary steps.
Investments increased sharply
Investments rose 37.4 per cent, to EUR 39.0 m in the 2004 fiscal year. Of this, EUR 31.4 m (i.e. 80.6 per cent) went towards the factory automation segment and EUR 7.6 m (19.5 per cent) towards the process automation segment. A total of 86.4 per cent of investments took place in Germany.
And thus more employees
On 31 December 2004 the SICK Group had 3,953 employees and thus 2.6 per cent more than in the previous year. 2,709 personnel worked in Germany, 1,244 were employed in foreign companies. Thus SICK created 100 new jobs in Germany last year. Despite the sale of a production site in Poland, with approx. 60 personnel, the number of employees abroad remained stable.
In terms of annual averages, the number of employees rose by 5.1 per cent to 3,949 (previous year 3,758 – this figure is subject to a new calculation basis as a result of the transition to IFRS), whereby 2,685 employees worked for SICK in Germany and 1,264 personnel were abroad. An average of 166 young people were trained in the SICK Group during the 2004 fiscal year, of which 160 in Germany.
Despite the fact that the peak of Germany’s economic development appears to have passed, SICK again expects above-average sales growth for the SICK Group in 2005 and anticipates that both segments will gain further ground in earnings before interest and taxes (EBIT). Because the company assumes that there will again be strong growth in Asia and America, sales activities in these regions have already been enhanced by the founding of further subsidiaries. Thus SICK India Pvt. Ltd. started business in Delhi and Mumbai in February 2005.
A breakdown of the results of both segments:
Factory automation: innovation through industry-oriented intelligence
Factory automation sales rose by 10.7 per cent to EUR 459.9 m in 2004. At the same time, the segment’s EBIT rose to EUR 52.3 m. This corresponds to a rise of 12.2 per cent.
Thanks to the company’s broad positioning, SICK was able to offset the moderate development in certain sectors, particularly in the automotive industry, as a result of the good development in other sectors, such as the machine tool industry or warehouse/product handling. Thus SICK was able to further enhance its strong position in Europe. Company activities strengthened in the most important sectors in eastern Europe, in particular. SICK achieved substantial growth in Asia – especially in China – and in the USA (though nominal sales growth in euros suffered here due to the continuing weakness of the US dollar).
Due to various types of control and communication intelligence, sensors for automation technology have developed into devices that are capable of making decisions. Photoelectric switches autonomously monitor critical functional states. Colour sensors and contrast scanners can decide themselves how to achieve the best detection results. Other devices can automatically readjust their signal thresholds. New CMOS switching circuits and fieldbus connections for bi-directional communication will open up completely new opportunities for future generations of photoelectric switches – from remote adjustment and the prioritisation of signals, to networking capabilities.
In safety technology safety photoelectric switches, light curtains and interlocks monitor access to robots, pallet elevators and other machines with hazardous movements. Intelligent pattern and image processing, distinguishing between persons and material, are as much state-of-the-art as the self-monitoring of devices with certified safety levels. On the communications side, intelligent interface components offer the possibility of integrating safety sensors in relay, PLC and safety-oriented fieldbus environments.
In industrial automatic identification, the bar code is (still) the most frequently used identification technology. Competition from 2-D codes, that can accommodate large amounts of data on just a few mm², is growing. Whether 1-D or 2-D codes – here, too, intelligence is trumps. Decoder algorithms put damaged and poorly legible 1-D codes together like a jigsaw puzzle. Reading devices for 2-D codes can find the codes automatically. Connection modules suitable for industrial use ensure the information-oriented integration of reading devices into the surrounding control environment.
Hand-held reading devices with a CMOS sensor offer a high level of intelligence for image acquisition. Like digital cameras, these take pictures of codes, as well as of figures, characters or signatures, and evaluate them.
Laser measurement systems can monitor areas or determine sizes, contours and volumes by evaluating detected objects of all types, e.g. packages, containers or cars. The accuracy of newly developed systems is so high that it is even possible to create certified, calibrated and legal-for-trade complete solutions.
Process automation – growth through high investments
Overall, the segment’s good incoming orders situation could not be translated into such good sales in 2004. A major proportion of sales in the process automation segment result from orders of a project-based nature. Discrepancies between incoming orders and sales regularly arise as a result of the large time periods involved. SICK MAIHAK sales, at EUR 78.3 m, thus remained slightly below the previous year’s level. Correspondingly, earnings of EUR -2.5 m before interest and taxes (EBIT) failed to match the previous year’s earnings of EUR +0.6 m. After a moderate start to the 2004 fiscal year, by year’s end the process automation segment achieved an order level that fully met expectations – as a result of a good incoming orders situation. Incoming orders developed particularly positive in Asia, especially in China and Japan, as well as in Taiwan.
But in Europe, too – both in eastern Europe, where rising environmental demands continue to lead to a need for upgrading, as well as in western Europe – SICK MAIHAK was able to achieve significant incoming orders. Business in North America, however, was considerably weaker.
Process automation mainly includes the automation market for industrial areas in which continuous incineration or process engineering processes take place with gaseous or liquid media or bulk materials. Within this large area, SICK covers emission and process-oriented analysis measurement and process measurement technology.
The process automation segment offers numerous sensoric possibilities under the brand name of SICK MAIHAK – from continuous in-situ gas and dust measurement technology, through extractive gas analyses, to special applications for water and liquid analyses. In process measurement, moreover, SICK MAIHAK products determine physical values such as gas throughflow quantities or bulk material filling levels.
SICK AG is one of the world’s leading producers of sensors and sensor solutions for industrial applications. Further information on SICK can be obtained on the Internet at http://www.sick.com or by phone at +49 (0)7681 202-3873.