Annual Report 2017
Eppendorf can look back at 2017 as a very satisfactory business year. The company increased its Group sales by 7.9% (at constant exchange rates), with accelerated growth in the second half of the year. That means Eppendorf’s development was better than the global market's, which grew by approximately 5%. The growth Eppendorf experienced was broadly based, with all market regions and all major product groups contributing to the positive development. As expected, our operating profit (EBIT) increased at a lower rate than sales, since Eppendorf invested heavily in the further development of the company throughout the reporting year. The investments focused mainly on research and development as well as on new business models and processes in the modernization of our infrastructure and in additional human resources.
Our successful business and strong market position offer ideal conditions for setting our course for the future. Under the banner of be Eppendorf 2021, we worked intensively on various initiatives and projects in 2017 to ensure our company’s stability and competitiveness and to position ourselves for continued successful development over the long term. From a financial point of view, our goal is to achieve organic growth well above the market average over the years. Our efforts concentrated in particular on three strategic subject areas: sales, innovation, and corporate culture. And we have managed to reach important milestones in all those areas. With the “Going-to-Market” initiative, we are working on our sales strategy and sales structure to account for changed market and customer requirements. The aim of the “Innovation” initiative is to accelerate the development of products using an agile methodology to optimally meet these requirements. All of this makes new forms of internal cooperation necessary. The third initiative of be Eppendorf 2021 therefore focuses on the further development of our strong corporate culture, which we want to use to create a dynamic, adaptable work environment. Our new mission statement, which consists of vision, mission, and values, is being communicated to all our employees worldwide.
Addition to the Management Board and organizational orientation toward market requirements
An important result of be Eppendorf 2021 is the new organizational structure that we developed in 2017 and that has been effective since January 1, 2018. Our new structure allows us to improve the alignment of our business with current and future market requirements. Among the most important changes is the creation of two new Management Board mandates: Business Portfolio and Commercial Organization. Headed by Thomas Bachmann, the Business Portfolio unit defines the strategic orientation of Eppendorf: What are our greatest strengths? How do we generate new product ideas? And how can we join forces to develop these products quickly and launch them successfully? The Commercial Organization unit has been headed by our new colleague Eva van Pelt since October 1, 2017. She is responsible for the market regions of Europe and North America as well as Asia Pacific, Africa, and Latin America in addition to overseeing the Global Key Account Management, E-Business, Global Service, and Operational Marketing units.
Innovative products and processes
These organizational changes are closely linked to our innovation initiative. During the year under review, we launched several pilot projects on the basis of agile development so we could provide the products that are currently in demand even more quickly. Agile project teams involve customers in a dynamic, ongoing process. Agile development is not, however, just a method; it is also an attitude and part of our corporate culture.
We see the areas of digitalization and device networking as offering the greatest opportunities in our industry. To manage and drive forward the topic of software and networking throughout the company, we established Software Development as a new global function in 2017. On the product side, we introduced VisioNize®, a new system that allows users to centrally monitor a variety of Eppendorf instruments at the same time. Our new Mastercycler® X50 PCR device, the CryoCube® F740 ULT freezer, and the Innova® S44i shaker all feature the full range of VisioNize functionalities. Some twenty new products were launched in 2017 and made an important contribution to Eppendorf’s growth.
So we can provide our services quickly and in the premium quality our customers expect, we have to be in good shape not only on the market but also behind the scenes: with a modern infrastructure and contemporary processes as well as highly skilled internal service providers. During the reporting year, we managed to take important steps in this context, too.
Outlook for 2018
By launching be Eppendorf 2021, we have laid a solid foundation that will enable us to better exploit the company’s enormous potential in the future. In 2018, our aim is to consistently and sustainably implement the projects we have started. Thanks to our new structures and attractive product portfolio, we are in a good starting position for another successful business year. We expect to achieve solid growth once again, not least thanks to the new products introduced in 2017. Their full impact on sales will be felt in the current year. We have budgeted further substantial investments in our organization, infrastructure, and production capacities as well as in training and continuing education so as to actively forge the company's intended transformation. In view of the higher costs planned for this, we estimate our operating profit adjusted for currency effects will remain at the same level as 2017.