BLANC & FISCHER Family Holding and E.G.O.-Group again achieve best result in the company’s history
BLANC & FISCHER Family Holding has a new focus – The group is strategically positioning itself for the future – The household appliance supplier E.G.O., which is based in Oberderdingen, is growing steadily
Oberderdingen – BLANC & FISCHER Family Holding has continued to grow despite some unfavorable developments on the markets, the internal transition of BLANC & FISCHER Family Holding from a finance to a management holding company and investment in construction of the new company headquarters. This was the conclusion of the management board of both
BLANC & FISCHER Family Holding and the E.G.O.-Group, its largest subgroup, at the E.G.O. annual meeting on Thursday in Oberderdingen. “With BLANC & FISCHER Family Holding’s new focus and the construction of new company headquarters, we’ve launched two exceptionally large internal projects over the past year”, explains Dr. Johannes Haupt, Chairman of the Management Board of BLANC & FISCHER Family Holding and the E.G.O.-Group. “The stipulation was that our business operations should not suffer as a result of these projects, and we made sure that was the case. BLANC & FISCHER Family Holding continued its steady sales growth of recent years and generated a year-on-year increase of 2.5% to EUR 1.192 billion in 2017. In the four years since 2014, the holding company has boosted its sales by 11.4%”, comments Dr. Haupt. The E.G.O.-Group has also continued on its course of growth, says Wolfgang Bauer, who has been the new Managing Director for the Sales and Product Management divisions since March. “E.G.O. showed a slight increase in sales in 2017 to EUR 609 million. That’s not a bad outcome given the considerable supply bottlenecks in the area of electronic parts at times”, comments Bauer. He goes on to say that the increasing price pressure on large electronic appliances was a challenge for the industry last year. The BLANC & FISCHER Family Holding and E.G.O.-Group Managing Director responsible for Production and Value Creation, Dr. Karlheinz Hörsting, clarifies how E.G.O. is addressing this development by improving productivity in its ten worldwide production plants. “Along with a wealth of individual measures, we are focusing on digitization and, above all, on Industry 4.0 in the continuous optimization of our production”, Dr. Hörsting points out. This year, BLANC & FISCHER Family Holding is aiming to achieve a stronger rate of growth of 5.9% taking it to more than EUR 1.25 billion, according to Dr. Haupt. Growth at E.G.O. should be 5.4% to around EUR 640 million, Bauer says.
More than 8,400 employees worldwide
In addition to the E.G.O.-Group, BLANCO, BLANCO Professional, ARPA and DEFENDI are part of BLANC & FISCHER Family Holding. The E.G.O.-Group accounts for the largest proportion of sales at 49%. The second largest subgroup is BLANCO with a sales share of just under 32%, followed by BLANCO Professional with ten percent, DEFENDI with six and ARPA with three percent. “The distribution within the group has been almost constant for years because the individual subgroups as a whole are very homogeneous in their development in line with the overall strategy of BLANC & FISCHER Family Holding”, states Dr. Haupt. The distribution of sales is also reflected in the number of employees. The subgroup with by far the most employees in BLANC & FISCHER Family Holding is the E.G.O.-Group: at the end of 2017, it employed 5,740 people or almost two-thirds of the 8,415 employees worldwide.
Broken down by region, the largest share of sales by some distance comes from the EMEA region (Europe, the Middle East and Africa) at
73.8%. As in previous years, BLANC & FISCHER Family Holding also recorded stronger growth in 2017 in North, Central and South America, which now accounts for 18.3% of sales, and in the Pacific region, currently at 7.9% of sales. In the future, Dr. Haupt expects the holding company to experience a further shift in favor of these regions, although Europe will remain the core market in the long term.
Debt-free and innovative – a holding company ready for the future
In 2017, BLANC & FISCHER Family Holding once again achieved the best outcome in the company’s history, Dr. Haupt says. In addition, BLANC & FISCHER Family Holding is completely debt-free and has an equity ratio of around 60%. This will enable the holding company to cope with future challenges and the essential investment this entails under its own steam. As Dr. Haupt puts it, the group owes this fact to the policy of the proprietors, all of whom belong to one of the two founding Blanc and Fischer families: “Our shareholders are and always have been happy to refrain from withdrawing most of the earnings from the company in the form of profit distributions; instead, they keep them in the group. This clear commitment unequivocally shows that the shareholders are focused on the ongoing success and sustainability of BLANC & FISCHER Family Holding.”
According to Dr. Haupt, the ability to innovate is crucial to the success of the holding company. It is measured by an innovation quota – the share of sales for products that have been on the market no longer than three or five years, depending on the subgroup. For ARPA, this figure is 32% over a three-year period; for the E.G.O.-Group, it is 29% over the same period. DEFENDI recorded 17% over this period. For BLANCO and BLANCO PROFESSIONAL, the family holding company looks at a five-year cycle, during which the share of new product sales is currently just over half for BLANCO, at 54%, and just under half for BLANCO PROFESSIONAL.
Evolution from a family holding company to a management holding company
In 2017, BLANC & FISCHER Family Holding developed into a management holding company with additional areas of responsibility. It now handles group-wide tasks that are not part of the individual companies’ core business, bringing them together and thus relieving the burden on the individual companies. The Legal and Compliance, Tax, Risk Management, Treasury, Business Development, Lean Management, Finance, Strategic Purchasing, Corporate Quality Assurance, Process Control and HR Management divisions have therefore been set up in the holding company. “The basic formula for this re-alignment is as follows: everything that is important for brands, customer service and market development stays in the subgroups, which also retain their legal independence. Anything that can be organized better, more efficiently and more professionally across the group will be the responsibility of the holding company in the future”, explains Dr. Haupt in relation to the basic idea behind the reorientation. This alleviates the burden on the subgroups. At the same time, it expands and improves the interaction between the individual companies in the group. Dr. Haupt spoke of a win-win situation for everyone involved: “First and foremost, customers reap the benefits by getting even better support. Employees are also better off by being able to concentrate on their core tasks. That’s why it’s a win-win situation for all the respective companies and for BLANC & FISCHER Family Holding as a whole.”
The family holding company also generates synergies in the area of training. The “BLANC & FISCHER Training Academy” combines the training programs for E.G.O., BLANCO and BLANCO Professional. The companies thus focus the experience of their executives, which further improves the quality of training. In addition, the Academy is a good foundation for strengthening interaction between the companies. The new Academy also makes it easier for trainees to take advantage of opportunities across the group. The BLANC & FISCHER Training Academy is scheduled to open on September 20, 2018 in Oberderdingen.
Changes to the management board
The reorientation entails changes to the management board. The previous overlap of personnel on the management boards of BLANC & FISCHER Family Holding and the E.G.O.-Group is being phased out. Dr. Johannes Haupt, Dr. Karlheinz Hörsting and Benno Rudolf are therefore planning to leave the E.G.O.-Group management board in 2019 to concentrate exclusively on managing BLANC & FISCHER Family Holding. Wolfgang Bauer was appointed as the fourth Managing Director of the E.G.O.-Group in anticipation of this development. He has been in charge of Sales at the E.G.O.-Group for many years and his appointment is instrumental in maintaining the necessary continuity in leadership following the changes. At the same time, interviews are already taking place with potential candidates for the position of Chairman of the Management Board of the E.G.O.-Group – in other words, for its future CEO. “Based on the current state of affairs, we’re operating under the assumption that we will have made a decision about this by the end of the year”, says Dr. Haupt.
Construction of new company headquarters
Back in 2016, the management board of BLANC & FISCHER
Family Holding and the E.G.O.-Group decided to build new headquarters in Oberderdingen. The first foundation stone was laid on December 13, 2017 and construction has been running according to plan ever since. “We are confident that we will be able to complete the construction in the second half of 2019 as planned”, says Haupt. The new building will initially consist of a core structure with three wings. However, it will be possible to add another wing onto the building at a later date. The transparent glass façade will face Bachstraße and fits in well with the surroundings. The new building will shape the cityscape and is an obvious sign of the corporate group’s sense of belonging within the region. “Our new corporate headquarters clearly demonstrate the company’s commitment to our home base”, adds Haupt. With the new building investment, the corporate group is creating sufficient development opportunities for all companies on site. The central administrative offices of BLANC & FISCHER Family Holding will also be located in the new building.
Development of the E.G.O.-Group
Wolfgang Bauer explained exactly how business has developed for the E.G.O.-Group. Sales increased again in 2017 to EUR 609 million, with the group generating the largest share of sales in the HOT business sector. This includes products for cooking, baking and grilling and parts for extractor hoods. E.G.O. generates more than two-thirds of its sales – around EUR 398 million – in this sector. Dishwashing and laundry solutions contribute just under EUR 74 million in sales. The group has generated approximately 10% each from products for professional use in industrial and public facilities and from its product range for commercial kitchens.
Sales drivers of the E.G.O.-Group
In the product groups, induction stovetop parts were the main sales drivers last year. They are increasingly becoming standard in new stovetops in industrialized countries. The E.G.O.-Group has increased its growth in this area by 7%, while induction solutions for professional kitchens have gone up by 8%. Trade in traditional products is not suffering as a result of this growth. Bauer: “Older technologies such as radiant heating elements, hotplates, thermostats and energy regulators tend to be losing relevance in developed countries, but this is largely offset by growing demand in developing countries. On the whole, sales of traditional products remain virtually stable.”
Trade in thick-film heating systems, which are used in dishwashers for example, grew by 20.5%. Thick-film heating elements have a high heating capacity, precise and reliable electronic controls and require little space. According to Bauer, the E.G.O.-Group sees great potential in this technology, which is why it formed a partnership in the household appliance sector with the Canadian start-up Datec at the beginning of February. Since then the E.G.O.-Group has had a 33.5% holding in the company, which specializes in coating heating elements. “In this way, we are securing our long-term expertise and have a technology partner by our side who will take us further and strengthen our competitive position”, explains Bauer in connection with this strategic involvement.
Growth opportunities in the Asia-Pacific region
Europe is a largely saturated market when it comes to the household appliance industry. That’s why the E.G.O.-Group has its eye on growth opportunities outside Europe in particular: “We want to remain strong in Europe but also increase the sales share of other regions through disproportionate growth in the medium and long-term. Our long-term goal is to achieve 60% of sales in Europe and 20% each in the Americas and the greater Asia/Pacific region”, explains Bauer. He sees great opportunities especially in the Asia/Pacific region. E.G.O. accordingly strengthened its position in the Asian market and opened two new sales branches in 2017. New offices in Shanghai, China, and Seoul, South Korea are creating a foundation for even better customer service in the region.
E.G.O. has its eye on the future
“As a company, it's enormously important to think outside the box”, says Bauer. In the kitchen, trends such as digitization and the demand for convenience are already apparent today. In particular, the trend towards open kitchens that integrate the living area has a strong influence on products. “Modern kitchens are at the heart of home life. They are not just a place of work, but also a place to live where people feel good”, Bauer emphasizes. For maximum convenience, kitchen appliances have to be perfectly integrated into the living space of the kitchen. In other words: they have to be functional, fit in visually and be really quiet. “So the dishwasher can run without making too much noise in the area around it”, says Bauer. “The kitchen has advanced by leaps and bounds. For E.G.O., it’s the basis for all further innovations and decisions.”
The E.G.O.-Group’s sustainable production network
The E.G.O.-Group invests in the future of its worldwide locations. “Above all, we will be further intensifying, focusing and developing our solutions for activities that we’ve already started in connection with Industry 4.0”, says Dr. Hörsting. Thus the E.G.O. site in Oberderdingen has established a working group that is focusing on a number of activities related to electronics production as a pilot. A new module concept for future generations of induction ensures shorter development times, greater version flexibility and optimized production conditions. The “Robot Colleague” project is focusing on cooperation between humans and robots. Data management is to be improved by a central production control system. In 2017, changes were also made to the innovative thick-film production facility in Oberderdingen: relocation to another hall was a great success. “The group's press conference was held in the new hall last year, just before the move. After the smooth relocation, we were able to increase our capacity quickly. Now we’ve reached the maximum capacity of the plant so we’ll have to expand soon”, reports Dr. Hörsting.
“People take the use of their smartphones for granted: they are controlled by tapping symbols or swiping. We’ve applied this philosophy to SmartKii stovetops”, explains Dr. Hörsting. The touch control produced in Oberderdingen is designed for induction stovetops and radiant heating elements. With SmartKii technology, E.G.O. is integrating touch sensors and light symbols in one element. The user operates the appliance by directly touching the light symbols. To make things easier for the user, the SmartKii only lights up the buttons that are required in the specific situation. “This gives you intuitive control of up to five cooking zones”, Dr. Hörsting says.
Development of production in China
The E.G.O.-Group has a production facility in Taicang, China. “The site has been successfully developed and is currently the competence center for induction coils within the entire production group", Dr. Hörsting explains. The opening of a semi-automated production line last year led to a further increase in capacity. “Due to rapid growth, the production area is currently being used to its capacity six years after moving in. An expansion is on the agenda for next year”, adds Hörsting.
Investing in innovative products
The hopes for growth mainly relate to innovative products. The E.G.O.-Group has therefore created an electronics competence center in Łódź, Poland. The factory is located in the immediate vicinity of various home appliance manufacturers. Major launches of electronic products in the professional WET sector and a new location and production layout with investment in expansion of capacity are strengthening the E.G.O. site in Mexico. At the Spanish site in Llica de Vall, E.G.O. has rearranged the material flows and integrated an SMD line into the assembly cell.
Investing in traditional products
With a view to improving the supply of thermostats, E.G.O. has moved production from the Slovenian plant in Cerkno to the Croatian production site in Zagreb. At ETA in Cerkno, the E.G.O.-Group has invested extensively in a hotplate foundry: a new smelting concept reduces energy consumption and maintenance costs while improving occupational safety, the environmental footprint, reliability and performance.