Light Increase in Sales at EagleBurgmann
EagleBurgmann sales rose to 806.3 million euros in the past business year (prior year: 765.8 million euros). The foreign share of sales amounted to 85 %, 15 % were achieved on the domestic market. The number of employed personnel was 5,771 (prior year: 5,908) on December 31, 2015. The weak euro resulted in positive effects in the exchange rate which had a considerable influence on the group figures of EagleBurgmann.
International market development and activities
On the whole the market development in the business year of 2015 was slower and marked by uncertainties. The regions of Europe, Middle East, Asia Pacific, India, and Japan fulfilled expectations. For example, orders for spare parts worth more than ten million euros were received for a single refinery in the Middle East. First deliveries have been made in part already in 2015. Japan invested as planned in the international refinery project "Nghi Son" in Vietnam, which had been won the previous year. In total, the order volume in the project business increased to a new record level.
The Indian market is recovering slowly from a two-year weak phase. In China there is currently no market growth in the seal business, which increases the price pressure on the remaining business. A slight recuperation is expected in the second half of 2016. Still, EagleBurgmann reinforced its strategic alignment towards the Chinese end user business with an acquisition and expanded its competence in the compressor seal sector. In mid-2015 the seal manufacturer acquired 100% of the Chinese company Tianjin Nibot Seal Technology Co. Ltd. in Tianjin. The acquired company is an experienced specialist regarding maintenance, retrofit, repair and service of gas seals, e.g. in the oil and gas, petrochemical and chemical industry sectors.
The Americas region is clearly feeling the low investment activity of the customers, such as Canadian oil sand projects, among other things. The state-owned oil companies in Mexico and Brazil are currently undergoing restructuring and are in a difficult situation. On the other hand, EagleBurgmann recorded good incoming orders in Venezuela and Ecuador.
Overall, the low oil price continues to strain the business in the oil/gas and refinery sector due to stopped or slowed new project investments. However, the low price also provided opportunities in industries which use oil products as basic commodity. One example is the important chemical industry market, which caught up on investments. The service business remained stable but the cost pressure from the customers was felt here as well.
Import events and innovation
At the ACHEMA 2015, the internationally leading trade show of the process industry in Frankfurt, EagleBurgmann introduced a new generation of pump seals - the eMG1 and eMG. The eMG1 is 100 % compatible with the million-fold proven MG1. Essential parts have been optimized and functionally enhanced. The eMG is identical in construction with the eMG1, but has a 20 % shorter installation length. Manufacturers now have new possibilities in pump construction: e.g. more compact design due to shorter shafts and the associated material savings and increased efficiency.
EagleBurgmann also continuously worked on process improvement during the reporting year. Projects for optimizing the process chain from customer order to delivery had begun the previous year. They were implemented consistently in order to better comply with customer requirements and achieve the reduction of delivery times as demanded by the market. Reduced delivery times of up to 70 % were realized here for the customers. The standardization of the main components of the mechanical seal product in combination with the bundling of engineering activities in worldwide competence centers is being implemented.
Business Year 2016
Dr. Andreas Raps joined the general management of EagleBurgmann Germany as the new chairman on March 1, 2016. The General Management of the Wolfratshausen seal manufacturer now consists of Dr. Andreas Raps (CEO) and the present Managing Directors Michael Stomberg (COO) and Jochen Strasser (CFO). Due to the macroeconomic environment we will systematically continue the established and proven cost and liquidity management. Incoming orders will be regularly monitored and analyzed by region and industry in order to respond specifically and quickly to positive as well as negative developments.