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The Lenze Group continues its growth trajectory. The specialist for automation solutions in the machine-manufacturing industry surpassed its forecasts in the 2016/2017 financial year (1st May 2016 to 30th April 2017). At the press conference for the Annual Report, the company directors also presented their Lenze 2020+ strategy for the international group of companies, which is currently celebrating its 70th anniversary in business. This strategy firmly positions the Group for further global growth.
"Lenze is doing well, and we want to keep growing in the future - worldwide. To achieve this we will focus more strongly on our competence as a systems supplier for the automation of machines," said Chief Executive Officer Christian Wendler, who at the same time announced a comprehensive programme of investment.
Financial strength and stability ensures sustainability
The company was able to set new records for sales revenue and profitability in the 2016/2017 financial year.
The Group's sales revenue rose by 31.9m euros to 678.3m euros (+4.9 %). The biggest absolute increase in sales was achieved in Europe. Here, sales revenue increased by 17.8m euros (+3.6 %) to 514.0m euros. But the Lenze Group also made significant gains in other regions. The growth in sales in Asia by 12.3 % to 83.7m euros was particularly pleasing. Sales revenue in America climbed 6.4 % to 77.9m euros.
Contributing to this success is the fact that Lenze has massively boosted its marketing and sales strength over the last two years. The aim is to continue doing this in the coming years. Also, the various new devices in the portfolio were very well received by the market. For example, the universally deployable generation of i500 frequency inverters gave Lenze the best product launch in the history of the company. This product sets new standards with regard to size, individual tailoring to applications, and easy commissioning, and it also meets the highest demands in terms of resource efficiency.
The operative result before interest and tax (EBIT) amounted to 58.5m euros, 20.7 % higher than the previous year. The EBIT margin improved from 7.5 % to 8.6 %. The result after tax increased from 31.5m euros to 38.1m euros.
The healthy state of the consolidated balance sheet reflects the financial strength of the European stock corporation, which is completely owned by the founding family. The gross cash flow from operating activities was increased as a result of the improved result, rising by 17.1 % to 56.1m euros. This created space for investments and acquisitions. So in the last financial year, Lenze acquired a majority stake in logicline GmbH from Sindelfingen in the German state of Baden-Württemberg. Logicline enhances the Lenze portfolio by adding enterprise cloud applications, mobile apps and innovative Internet of Things (IoT) solutions. Despite this investment, the Lenze Group's free cash flow rose by 11.7 % to 36.4m euros.
The equity capital was also strengthened. The equity ratio came to 64.1 % (previous year: 63.7 %) with a balance sheet total of 466.3m. At the same time, the financial liabilities were reduced by 27.9 % to 21.2m euros.
Biggest investment in the history of the company
To implement the strategy the company is earmarking well over 100m euros in the coming years for future-related investments above and beyond the current level of investment. A major part of this will go into the core project Mechatronic Competence Campus in Extertal, starting in the 2017/2018 financial year. This is the biggest investment in the company's history so far, and it will merge three production complexes into one ultra-modern plant with state-of-the-art logistics.
Lenze 2020+ growth strategy points the way into the future
Digitalisation, software, and the creation of machine networks are moving more into the spotlight as a result of Industry 4.0. Lenze sees itself as being well prepared for this development. The Group works together with its customers to automate more than 1,000 machines a year worldwide. The Lenze 2020+ growth strategy is a resolute continuation of the journey that the company started several years ago, heading for a clear orientation towards market segments, and it lays the foundations for stable and sustained growth in the core business. At the same time it takes on the challenges of digitalisation and creates space alongside the core business in order to develop new, future-oriented areas of business.
Lenze's portfolio builds on three pillars. Firstly, there are the mechatronic products and packages. Then there are the hardware and software-based automation systems - the company's core business. And the third pillar is formed by future-oriented digital services. In this latter area, Lenze's 15-year-old subsidiary encoway is a software supplier of solutions for the process of configuring, pricing and quoting (CPQ) and this gives Lenze more specialist experience than other players in the market. In 2017, Lenze has also boosted its potential in the Industrial Internet of Things (IIoT) by acquiring a majority stake in logicline.
Lenze is already able to accompany its customers throughout the entire life cycle of a machine, and to offer value-adding services in every phase, services which sustainably maintain or improve their customers' power to compete. "With our strengths in technology and innovation we can shape the progress that our customers make," says Wendler. "We have a very detailed knowledge of machines, systems and markets, and thanks to our global network we have a local presence near our customers."
Highly qualified employees are a success factor
The employees in the Lenze Group make a crucial contribution to the success of the company. At the end of the year under review, Lenze employed 3,457 people - 160 more than the year before. The number is set to rise by a similar amount in the current financial year. The number of apprentices and "dual" work-and-study students is to be almost doubled in the coming year. "In our business, employees with the right skills and motivation are essential. They have to be open for fast-moving developments and they must have an 'ear' for the needs of our customers," says Wendler. Lenze believes in the value of international and practically oriented training, offering exchange programmes and the new Lenze Automation Camp, where young engineers are given a faster, more effective and more goal-oriented training for their duties in the different companies around the world. It is not for nothing that Lenze was yet again named a Top Training Company and a Top Employer by different organisations in 2017.
Prospects
The Board of Directors sees the future development of Lenze in a positive light. For the current financial year 2017/2018 they expect an increase in sales revenue that should be slightly higher than the increase in the year under review. The profitability (EBIT margin) should also continue to improve.
Over the medium term, the new strategy should ensure dynamic growth with sustained profitability. Sales revenue should hit the one-billion-euro mark within a few years.
The first digital Annual Report for specific target groups
To mark its 70th anniversary, the company is also breaking new ground in the field of communication: for the first time, the report on the last financial year is being made available in multimedia form for specific target groups, in a digital Annual Report entitled "70 Lenze. Industry 4.0."