Festo on course for global growth
In-demand partner for innovative automation
The family-owned company Festo remained a much sought after partner for factory and process automation, as well as Didactic services, even in the difficult economic year 2009. The global expansion of new business fields, such as the solar and flat panel industry, as well as the fields of electric drives, process automation and didactics paid off for the company. Despite a noticeable weakening of the global economy, especially in the engineering sector, Festo was able to stabilise global sales at a level of over € 1.3 billion in 2009 (prior year: € 1.7 billion). With its innovative strength and sustainable approach, customers value Festo as a partner in the crisis. As a result, the company was able to enlarge its global share of the automation market during 2009 while the sector as a whole shrank by a third. Assuming the positive trend since early 2010 continues, the company expects to raise sales by 11-15 % in the current year. With a flexible model for optimal global market delivery and an R+D ratio of 9.5 %, the company set the right course in 2009 to emerge even stronger from the economic crisis. A headcount of 13,500 was maintained throughout 2009, thus safeguarding valuable know-how in the company. With 75 new products and Future Concepts, Festo will set the trend at the Hanover Fair 2010 in areas ranging from safe automation and intelligent mechatronic solutions to new bionic handling and gripper technologies, energy efficiency and green production.
Esslingen/Hanover, 19 April 2010
“Our strategy in the crisis has been proven right: we focused all our resources on providing optimal support for our customers. With our innovative strength and sustainable approach, customers value Festo as a reliable partner in the crisis. With the aid of Festo, they have more time to manage the challenges faced in the development of new products. The result for us means: we were able to capture market share in key domestic and foreign markets during 2009,” explained Dr. Eberhard Veit, Chairman of the Management Board of Festo AG.
Above all, the company’s close integration with its key accounts is now bearing fruit and finding its expression in a marked upturn in new orders. For example, Festo received several development orders for automated production processes for new products which have been exhibited at the Cebit. In these cases, German know-how prevailed over the global competition.
“As a family-owned company, Festo places its emphasis on sustainability. This pays off in particular during times of crisis and is also helping us in the current situation. As a consequence, we still have the strength and the staying power to invest in the future and to lay the right foundations for the coming years,” stressed Dr. Veit and added: “During the preparation of our new Corporate Strategy 2015 there were already signs that market redistribution and increasing demands for greater customer proximity in the booming regions of Asia and the Americas would present considerable challenges to us. As a learning company, however, our ability to change means we are used to meeting such adjustment needs. With the aid of staff training and the simultaneous adaptation of our structures, we continue to work hard on enhancing the competitiveness of our facilities. Cost positions must be optimised further. Above all, our high level of value added in Germany must continually stand up to international comparison. This is the only way we can secure long-term employment and know-how at our German sites.”
High R+D investments in future technologies and Future Concepts
Despite the crisis, Festo reached a record R+D ratio of 9.5 % in 2009. The main focus of these R+D activities was placed on the areas of man-machine cooperation, energy efficiency, ease of operation, machine availability and process reliability. “Our products support this, for example, with their outstanding design, intelligent sensors and remote adjustment possibilities – from component level to complete system solutions,” explained Dr. Veit.
“We also focus on our Bionic Learning Network and Future Concepts as a platform for detecting new products or product ideas and testing their market relevance in discussions with our customers at exhibitions, such as the Hanover Fair. Our Future Concepts help us secure a sustainable lead over our global competitors while testing future technologies. All with a single aim: to offer our customers added value,” stressed Dr. Veit.
Sustainable growth impetus from electric drives and process automation
In the crisis year 2009 in particular, Festo’s sustained development of new business fields over many years – such as the solar and flat panel industry, electric drives and process automation – paid off for the company and will continue to provide an important boost to growth in the current year 2010.
“In the estimation of our customers, we have rapidly enhanced our profile in new business fields, such as electric drives, over the last ten years and are already among the top 10 global suppliers,” emphasised Dr. Veit.
“In the field of electric drives, we can offer customers an extensive portfolio in electric drive and control technology and with our Mechatronic Motion Solutions provide answers – not only in pneumatics – to key issues like Green Production, Energy Saving, Safety and Condition Monitoring,” explained Dr. Veit.
Fiscal year 2009: stable partner in the crisis
While the global market for automation technology was hit hard by the economic crisis and shrank by a third in volume, the family-owned company Festo succeeded in posting global sales of over € 1.3 billion in its fiscal year 2009. Festo was thus able to continue its trend of many years standing and increase market shares once again in 2009.
Following initial cyclical difficulties, there was a strong upturn in Asian and American sales during 2009, and there are already signs that the record sales level of 2008 will be exceeded during the course of 2010. Western Europe and Germany were able to pick up on this positive trend from the beginning of the current year.
With a year-on-year increase in sales of 8.9 %, the company’s Didactic division displayed above-average growth. Both training and consulting services for industrial clients and the division’s sales of learning systems contributed to this impressive development.
In the Automation Technology division, there was a positive impetus from the fields of Food and Packaging, Process Automation and Handling Technology.
As in the previous year, Festo employed around 13,500 people world-wide as of the end of December.
Outlook 2010: positive market signals
In 2010, Festo AG’s regions Western and Eastern Europe, and the domestic German market, were able to capitalise on the positive trend which has been coming from Asia over the last six months and from America for the last three months.
“The double-digit growth in new orders received in early 2010 gives us cause for optimism – although our customers will continue to feel the effects of the crisis over the next few years. The long-term prospects for our sector are encouraging, though, and demand is currently high. We are doing everything necessary to ensure our delivery capability meets market needs as demand picks up again,” stated Dr. Veit.
In order to secure optimal flexibility and quality in its global deliveries to customers, Festo will continue to expand its Solution Engineering Centres (SEC). The SEC NAFTA was founded in early 2010 and further SECs are in the pipeline – such as the SEC ASEAN and SEC South America. The aim is to make further reductions in the company’s time-to-market, especially for international customer-specific projects.
Based on the current situation, Festo plans to achieve global sales growth of between 11 and 15 % in 2010. The company will continue its innovation strategy and maintain its R+D ratio at the current high level. Intelligent products for safe and energy-efficient manufacturing will continue to determine Festo’s growth in the coming years.
Please refer to: Festo press photo CC_04_10_Dr_Veit.tif
Caption to illustration: Dr. Eberhard Veit, Chairman of the Management Board of Festo AG, Bionic Handling Assistant (photo: Festo)
Please refer to: Festo press photo CC_04_10_Customers.tif
Caption to illustration: Festo: In-demand partner for innovative automation (photo: Festo)
Please refer to: Festo press photo CC_04_10_Bionic_Handling_Assistant_1.tif
Festo press photo CC_04_10_Bionic_Handling_Assistant_2.tif
Caption to illustration: High investments in R+D and Future Concepts, Bionic Handling Assistant (photos: Festo)
Please refer to: Festo press photo CC_04_10_TechnologyCenter.tif
Caption to illustration: Festo Technology Center in Esslingen: focus on sustainability and energy efficiency (photo: Festo)
Please refer to: Festo press photo CC_04_10_Didactic.tif
Caption to illustration: Growth in 2009 for the Didactic division,
here Training and Consulting (photo: Festo)
Please refer to: Festo press photo CC_04_10_Energy_Saving_Services.tif
Caption to illustration: Efficient and safe mechatronic turnkey solutions for the flexible, “green” production of the future; Festo Energy Saving Services with Energy Monitoring (photo: Festo)