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© bellemedia-dreamstime.com Electronics Production | June 27, 2013

Hella steps up investments in R&D

Automotive supplier, Hella KGaA Hueck & Co, successfully continued its globalization strategy in a challenging environment in the past fiscal year 2012/2013.
According to the preliminary financial results, Hella's group turnover grew by about 4 per cent to EUR 5.0 billion year on year (previously: EUR 4.8 billion). This increase in turnover was driven particularly by the international growth markets in Asia and North America that contributed 20 per cent each. With incremental R&D expenses of about 1 per cent to 9 per cent of turnover and a more than 30 per cent increase of investments to about EUR 430 million, Hella generated operating earnings (EBIT) of about EUR 280 million (previous year: EUR 346 million).

Stronger presence in important growth markets

Success in the past fiscal year was driven particularly by the company's globalization strategy Hella has been implementing consistently for years. Over the past years, Hella has continually increased the international operations' contribution to turnover and is now generating 47 per cent of its turnover outside of Europe.

"Our strong international presence enables us to engage even better in partnerships with our clients globally", says Dr Jürgen Behrend, Chairman and President. "We are therefore very well prepared for the current market situation and can compensate margin pressure in Europe with high demand in the global growth markets."

Investments in research and development

Hella again stepped up investments in research and development by about 1 per cent to approximately 9 per cent of group turnover in the past fiscal year. Today, more than 5'500 people work across the global research and development network.

"We are currently in a position to develop tailored products for each market and customize them on site," says Dr Rolf Breidenbach, President and CEO. "We will continue to systematically build on these strengths."

Outlook:

Hella expects international markets to develop at different speeds over the long term. International markets have outpaced the stagnating European market and continue to grow strongly. Hella responds to this situation by enhancing its international network - and continuing to transform the group headquarters in Lippstadt into a center of excellence and a technology hub. From this foundation, The company again expects group-wide business activities to develop positively in fiscal year 2013/2014.

In spite of another increase in turnover, however, the company does not expect earnings to increase year on year. This is due to higher expenses for structural enhancements and investments in the continued capacity build-out for research and development in Europe, Asia and America that will also be required over the next fiscal year.

"The systematic build-out of Lippstadt into a leading research and development hub and a global technology center will be a particular priority," stress Dr Behrend and Dr Breidenbach. "At the same time, we will continue to expand our international network and make our corporate organization sustainable. More than ever, innovation and technology leadership that relies on Hella's global network with its 30'000 employees at home and abroad is a prerequisite for a successful partnership with our clients.”

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