Step-by-step progress
Although Endress+Hauser is in great shape, the company must continually change to stay successful. In an interview, Supervisory Board president Matthias Altendorf and CEO Peter Selders discuss the dynamic between continuity and transformation.
Mr Altendorf, 2023 was your last year as CEO. How did Endress+Hauser perform?
Altendorf: Overall we had a good year, even though we still had challenges with the supply and logistics chains and had to contend with the upheavals caused by the energy crisis. Foreign exchange rates worked against us as well. We nevertheless experienced strong organic growth, improved our result, created jobs around the world and invested like never before.
What impacted the growth of the business?
Altendorf: Some customers reduced their inventories after the situation in the procurement markets had eased somewhat. We felt this impact in various areas, such as the food industry and machine engineering. In the chemical industry we’re seeing a shift in investments from Europe to the Americas, Asia and the Middle East, as well as a relocation of production from China to Southeast Asia and India. Electromobility, renewable energy, resource efficiency and energy savings were once again the drivers of our business.
Mr Selders, you took over as CEO at the turn of the year. Will you be able to present similarly good numbers for 2024?
Selders: Incoming orders have weakened since mid-2023 to varying degrees, depending on the industry and region. We have not yet gotten past that. A lot therefore depends on a potential economic recovery in the second half of the year. But we started the year with a solid order backlog and our salespeople are doing everything they can to bring the numbers up. After years of double-digit growth, we will probably have to be satisfied with single-digit growth again.
What do you see as the challenges for the current year?
Selders: The first major issue for the Group will be to ensure growth and profitability. We are facing different challenges in different regions. In Germany we need to acquire new customers because some segments of industry are leaving the country. In the US the focus is on protecting the strong growth of recent years. And in China we need to position ourselves so that we remain successful in what is now a lower-growth environment. The second major issue is the planned strategic partnership with SICK. Assuming the negotiations are successful, this project will keep us extremely busy – integration of the sales organizations, collaborative innovation and production in a joint venture; something on this scale is new for us.
“The best solution can always be found by addressing an issue from various perspectives.”
Peter Selders
CEO of the Endress+Hauser Group
How does the planned cooperation with SICK fit into the Endress+Hauser strategy?
Selders: I see it as a perfect fit, not only on paper but also from everything we learned during our discussions and visits. SICK and Endress+Hauser share a similar culture and many values. Both companies are people-oriented and act with a long-term mindset. In addition, we both see climate and environmental protection as an opportunity. And we have no overlap in our process industry portfolio. SICK’s products supplement our own, which allows us to support our customers even better.
Altendorf: Our customers must design their production for greater sustainability and a reduced CO2 footprint. The planned partnership would allow us to offer them a comprehensive portfolio to address these challenges. Gas flowmeters and analyzers from SICK should help our customers to operate their plants more efficiently, make better use of resources and precisely monitor the environmental impact.
What remains to be done to make this cooperation possible?
Selders: There are still a lot of details to clarify, such as legal and business issues and how to integrate the IT platforms. Our goal is to have a seamless transition. The start of the cooperation must be completely unnoticeable to our customers. What’s crucial for us is that people are on board with the plan. We operate in a technology environment. Whether it’s innovation and production or sales and service, our success rests on our employees’ knowledge and skills. We have to inspire them and convince them to go down this path with us in order to complete the agreement. Openness and transparency is how we want to get there.
Altendorf: We must make it clear that this is not simply some acquisition. It’s about a long-term partnership between two successful family companies that can be even more successful together.
Looking ahead, Mr Selders, in what direction do you want to develop Endress+Hauser?
Selders: First things first, Endress+Hauser is in excellent shape. We have no reason to abandon the path we are on. But of course as a company we can’t afford to stand still. To stay successful in the future, we must continually develop. As a family company we are ideally situated to do this because we act with a long-term mindset and foster a culture of cooperation and solidarity. This culture will develop too, in order to preserve what defines and distinguishes us today.
What issues will keep you busy in the coming years?
Selders: Our two major issues are sustainability and digitalization: sustainability because unless we protect the climate and the environment, our planet will no longer be livable. But that can’t be solved through idealism and sacrifice alone. We must succeed in combining sustainability with economic advancement and achieving this at competitive cost. That applies to our customers just as it does to us as a company. Digitalization, the second big issue, is the key to a number of things. Those include sustainability as a means to consuming fewer resources and making smarter and more efficient use of them, and for dealing with the challenges of an aging society and the shortage of skilled labor. Digitalization is an extremely important enabler for us. It comes down to making the best possible use of all available technologies in our products, in our interaction with customers and in our internal processes, just the way we formulated it in our strategy.
How will you approach your responsibilities as CEO?
Selders: First off, I don’t consider myself a one-man show. I’m a team player and I always work together with people. I’m convinced that the best solution can always be found by addressing an issue from various perspectives. This is why I listen first to understand and work out what has to be done – and then resolutely follow through. That sometimes requires more time and energy, but it produces a more enduring result. This is why it’s important to get people on board. Every new development requires effort. Things seldom happen by themselves. It requires perseverance so that you don’t give up. And success is much easier when you trust each other.
“It’s also about supporting the generational change within the Endress family. This continuity is important for us.”
Matthias Altendorf
President of the Supervisory Board of the Endress+Hauser Group
Mr Altendorf, you are stepping down after 10 years as CEO. What will you remember as your biggest success and your biggest defeat?
Altendorf: Shutting down the business in Russia was very painful for me personally. I took the job with the goal of never having to let employees go for operational reasons. We had to do exactly that in Russia and part ways with many good colleagues. Although it was obviously a consequence of Russia’s invasion of Ukraine and Western sanctions, it was still my biggest defeat, if you will. We also went through two difficult crises during my time as CEO: the oil price crisis right at the beginning of my tenure and then later the coronavirus pandemic. We did an outstanding job of managing both situations together with our customers, employees and shareholders. And we were able to use them as an opportunity. Endress+Hauser emerged from both crises stronger and with momentum. I see that as our biggest success.
You will continue to have an active presence in the company as president of the Supervisory Board. How do you view your new role?
Altendorf: I will of course do everything I can to make sure Mr Selders gets off to a good start. And I will lead the Supervisory Board and maintain close contact with our shareholders. It’s also about supporting the generational change within the Endress family. This continuity is important for us as a family company. I will continue to travel, visit our entities and customers and represent Endress+Hauser. I want to remain close to the company, the people and the technology, not least so that I can understand decisions made by the Executive Board.
Endress+Hauser will no longer be taking up all your energies, though. What plans do you have for this next phase of your life?
Altendorf: Not to worry, I will continue to have a full working life just like before! Apart from my responsibilities at Endress+Hauser I teach, I’m active in associations and I also sit on other supervisory boards. Where my private life is concerned, I will have more time for my wife and hobbies.
Mr Selders, Mr Altendorf, what will be your personal challenges for 2024? What would you like to have achieved by the end of the year?
Selders: Together with my colleagues on the Executive Board and the entire Endress+Hauser team, I want to do a good job of managing a rather difficult year for business. If by the end of 2024 we can say that we have done our best under the circumstances and developed a bit further, then I will have had a good first year as CEO!
Altendorf: If we’re successful in doing that, and if we find a good common path together as CEO and president of the Supervisory Board, then we will have done everything right!
Published 05.04.2024, last updated 17.04.2024.
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