Satisfactory Business Development

21.05.2014

EagleBurgmann achieved sales of 760.1 million euros in the last business year (prior year: 815.6 million euros). The foreign share of sales amounted to 85 percent, with 15 percent achieved on the domestic market.

A total of 5,881 employees worldwide (prior year: 5,844) worked in the EagleBurgmann group the end of 2013. "In the past business year, the negative development of the exchange rate, particularly that of the Japanese Yen, had a considerable impact on our sales. Without that effect, sales would have been around 817 million euros," Dr. Stefan Sacré (CEO) explains the sales development and the negative impact due to foreign exchange rates. Among other things, the consistent orientation towards end customer business improved the result. This accordingly compensated for the influence of lower sales on the result.

International activities

Each world region had varying forms of business in the year 2013. The market weakness continued in India and there were first indications of decline appearing in other Asian countries. In contrast, the completed business year was better in America, especially South America, and in Europe. In Ecuador, an end customer awarded EagleBurgmann an order valued at more than 20 million US dollars to supply seals for new equipment and repairs to a refinery. Moreover, in 2013 EagleBurgmann designed and supplied to China the world s largest agitator seal weighing 1,500 kilograms for use in a PTA system (Pure Terepthalic Acid).

The integration was completed for Seal Pots, the American company and manufacturer of supply systems acquired in 2012 with subsidiaries in Romeo (Michigan) and Broken Arrow (Oklahoma). With this capacity expansion, EagleBurgmann further strengthened its competitive advantage in the product area of supply systems on the American market. In mid 2013, Seal Pots in Broken Arrow also moved into a new building. The relocation enabled the company to further rationalize procedures and cover the growing demand in North and South America.

Important projects in the Division Mechanical Seals included further process optimization for handling special seal orders and the implementation of cost reduction measures. The relocation of EagleBurgmann Germany s Production to the new hall worth 40 million euros has been completed in the meantime.

During the further optimization of administrative structures, intensive work was done to improve the purchasing processes. The SAP launch was completed at the plants and Service Centers in Germany and also realized at other foreign locations, such as Austria, China and Singapore. More companies will follow in 2014.

Support for the development of new technologies

Since 2013 the Federal Ministry of Education and Research has been supporting the development of new technologies with 2.2 million euros within the MatResource EagleBurgmann initiative as well as six further industrial partners and research institutes. The goal is to increase resource efficiency. The EkoDiSc project concerns the development of a new diamond silicon carbide material system. To enable serial application, EagleBurgmann plans to significantly reduce the manufacturing costs for the new material as compared to the DiamondFace technology while guaranteeing the same ruggedness and comparable frictional rate savings.

Employees

There were 5,881 employees working worldwide in the EagleBurgmann group the end of 2013. Particular attention remains focused on training - in the commercial as well as in the mercantile area. “We have been providing training for more than 40 years and have offered qualified career entries to more than 650 young people,” says Dr. Stefan Sacré. In the autumn of 2013, 17 young people will begin different occupations requiring training in the Wolfratshausen company: 12 industrial mechanics, 3 technical product designers, and 2 industrial sales representatives are now at the beginning of their working lives. Altogether 70 apprentices are currently working and learning during three years of apprenticeship with the seal manufacturer. Every year, EagleBurgmann Germany also chooses technical college graduates who are studying mechanical engineering and business economics at the Baden-Wuerttemberg Cooperative State University (DHBW) while being employed with EagleBurgmann at the same time. Since 2007 the company has offered good career opportunities to a total of 21 mechanical engineers and business economists of the DHBW Stuttgart (Baden-Wuerttemberg Cooperative State University).

Outlook

EagleBurgmann assumes that the growth will continue with lesser rates of increase. Due to the economic situation in the Euro area and in other economies, EagleBurgmann will systematically continue the costs and liquidity management established in the previous years.

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