With an increase in turnover of around 8 % to 2.45 billion euros in the 2014 financial year (2013: 2.28 billion euros), the Festo Group consolidated its global market position and continued its successful growth of the past few years. The regions of Asia, the Americas and Europe were also marked by growth. The German market grew the most strongly in a year-on-year comparison. Significant impulse for growth was given by the Customer Solutions, Process Automation and Electric Automation divisions. The Didactic division further extended its presence on the market and registered a very good year. Over the coming years, the company intends to extend its leading market position even further with its new LEAD strategy (Leadership in Automation and Didactic) in pneumatic and electric actuation for industrial automation and in vocational education.
The financial year 2014 in summary
With growth of around 8 % to 2.45 billion euros in 2014, Festo surpassed its predicted increase in turnover of 6 to 7 %. Broken down by region, the year-on-year increase amounted to 8 % in Asia, 5 % in the Americas and 8 % in Europe. Sales on the German domestic market grew by 9 %.
In addition to the strategic business fields, the growth generators in Germany were development in the field of Electronic Light Assembly (electronics and assembly of small components) and new projects in the automotive industry. Cooperation with major customers was also extended.
Customer Solutions (CS), Process Automation (PA) and Electric Automation (EA) number among the important pillars of growth for Festo. The CS division grew by 8 %, and PA by under 4 %. The EA division grew the most strongly, with a rate of 18 %. Didactic, the world market leader in vocational education and training, consolidated its position and rounded off a very positive year with a growth rate of more than 17 %.
“Festo has grown rapidly and successfully over the past few years. From this position of strength, we shall now invest in the future with our new LEAD strategy and further extend our leading position in the market for pneumatic and electric actuation in industrial automation and in vocational education,” said Dr. Eberhard Veit, Chairman of the Management Board of Festo AG.
Customer Solutions in high demand
The demand for custom-designed systems solutions expedited growth in the Customer Solutions division. “In view of the high demand for Customer Solutions, we are constantly extending our global network of Technical Engineering Centres and Application Centres. This enables us to realise customer projects rapidly and in an agile manner on location in all regions,” said Dr. Veit.
Positive growth was also recorded by the MedLab unit with its automation solutions for medical and laboratory technology: its annual increase in turnover registered over the past ten years amounts to almost 13 %.
Growth in Process Automation
The special solutions competence of Festo is reflected not only in Factory Automation, but also in Process Automation; this has led to an increase in turnover in the fields of water/wastewater and biotech/pharmaceuticals.
Electric automation acquires increasing significance
In addition to pneumatic automation technology, increasing significance is also being acquired by its electric counterpart. “With 18 %, Electric Automation was the division with the highest growth rate,” explained Dr. Veit.
“Electric automation and pneumatics are important technological keys to the production of the future. Production processes must become even more flexible, while system functions are frequently becoming increasingly complex with more stringent requirements placed on networked communication. Festo has the right solution here: we offer our customers technology-neutral automation – both pneumatic and electric,” said Dr. Veit in clarifying the target.
Festo Didactic strengthens its market position
The networked flexible production of the future also places new practical demands on the qualification of students and specialist employees. In this regard, Festo Didactic consolidated its leading position on the market last year with new education concepts and learning systems in the context of Industry 4.0.
With the takeover of the Canadian-US company Lab-Volt in June 2014, the company extended its portfolio in the field of technical learning systems for electronics, electrical engineering and energy management. The new “LabVolt Series” learning systems for the sectors of electronics, electrical engineering and energy management are produced in Canada and the USA and represent an invaluable supplement to the product range of Festo Didactic.
Technological leadership extended
“Our innovation pipeline is completely full for the next few years,” emphasised Dr. Veit. To further enhance its position as the technological market leader, the company is also investing in the development of electric automation engineering in addition to pneumatics. Dr. Eberhard Veit: “Customers want integral solutions – from the product, to systems, up to custom-designed solutions and the appropriate software. We are therefore investing more than 7 % of our global annual turnover in research and development, and thus in new smart, intuitive product innovations along with more than 10,000 individual solutions that help boost our customers’ productivity even further,” Dr. Veit added.
Festo has important topics on its agenda: “Current megatrends such as energy efficiency, globalisation, digitalisation, Industry 4.0 and the life sciences open up interesting opportunities. For this reason, our company will be extending its range of products and solutions in the fields of medical engineering and laboratory automation over the coming years. Likewise, we are increasing our range of offers in process automation to include Industrial Water, Chemical (fine chemicals) and Food Processing. In view of recent developments and trends such as big data, smart services and electromobility, we are expecting short- and long-term impulses for products and markets that support the technology portfolio of Festo and reinforce its current market position, while at the same time helping to open up new markets,” explained the Chairman of the Management Board.
The focus of research is on Industry 4.0
The research and development activities in the context of Industry 4.0 are being given special emphasis. “We at Festo see Industry 4.0 as a highly interdisciplinary future project, on which we are constantly working in cooperation with partners from science and industry. Festo is involved for example in a number of joint research projects that deal with various aspects of future production. However, not only the latest technical developments are important here, but also the question of what status the human operator will have in the overall context of future production, and how a company can prepare its employees for this development. We are addressing this matter with our Didactic unit,” said Dr. Veit.
“Practical examples of this are our Cyber Physical Factory, a modular production facility for vocational education and training in Industry 4.0 at our Didactic unit; and the Multi-Carrier System in Electric Automation, an innovative transport system for greater flexibility in production processes,” Dr. Veit added. “The Multi-Carrier System incorporates important options relevant to Industry 4.0. Our flagship product, the CPX automation platform, will also be capable of integration into Industry 4.0 environments via OPC-UA.” Festo has initiated many further customer projects in the field of digitalisation of industrial automation. Our customers set store by the competence of Festo in technology and innovation, and in vocational education.
“We are also providing fresh impulse in the areas of our Bionic Learning Network and our Future Concepts again this year," said Dr. Veit. At the Hannover Messe 2015 trade fair, this is particularly relevant in the light of the motto “Join the Network!” The projects illustrate how networked communication between individual systems can be combined into an intelligent overall system and provide interesting approaches to future production.
Investments in Germany as a production location
In 2015, it is readily apparent that Festo is also investing in Germany to an increasing extent and is setting store by this country as an industrial location. No less than three new buildings are being occupied and officially opened this year: the Automation Center at the corporate headquarters in Esslingen, the Technology Factory in Ostfildern-Scharnhausen and the Global Production Centre Hassel in Rohrbach (Saarland) with its emphasis on new materials and polymers. At this site alone, the company has invested a total of around 150 million euros in the development of know-how and competence and in state-of-the-art working environments.
The Technology Factory currently under construction represents a significant step towards the production of the future. New concepts from Industry 4.0 are also being applied and tested here. On completion of this complex, control elements, valves, valve manifolds and electronic components will be manufactured here. The Ostfildern-Scharnhausen location is designed as a future-proof adaptable factory: approaches from Industry 4.0 are being realised at this facility, and the CPX platform and the Multi-Carrier System will be in operation in many production units there. In addition, the insights gained in various research projects will be implemented and tested in a pilot area. All components for the AS interface – a data and energy supplier for actuators and sensors – will also be manufactured in this factory.
Global investments in know-how and technology
The focus on growth and on customer requirements calls for investments. “Customers in Asia and America now expect the same service, excellent delivery reliability and consultation that our customers enjoy in Europe,” explains Dr. Eberhard Veit. Festo is making investments worldwide to meet these demands on a global basis. Altogether, around 300 million euros have been invested in the development of the global development, production and logistics network as well as in new buildings. These investments are focused on the USA, Hungary, Bulgaria, Switzerland and China along with Korea, India, Indonesia and Vietnam.
More than 40 million US dollars are being invested in America alone. On a site in Mason, Ohio measuring more than 15,000 m², a new production and logistics centre is being built that will commence operations this year and be officially opened in 2016. The new Regional Service Centre (RSC) caters to additional growth in the USA, Canada and Mexico. With its centrally located new RSC, Festo offers its customers in North America innovative tailor-made solutions and even better service. “This will further consolidate our position in the American automation market,” said Dr. Veit.
Festo is thus continuing with its successful two-pronged strategy. In Germany, Festo is pursuing the development of know-how, research and development, new technologies and technology factories; and at its locations in the global growth markets, production is carried out in the region for the region. The modules are adapted on location to suit specific regions or customers, and tailor-made individual solutions are devised. With the national companies and production centres outside Germany, Festo has been making a major contribution toward improving the innovative power and production quality of the new markets. "This has boosted the technological standards and demands in the local markets; for us, this in turn increases the demand for competitive automation solutions,” explains Dr. Veit.
Global growth markets open up new opportunities: focus on the USA and China
To assert itself on the future growth markets and remain competitive on a global scale, Festo already underwent a restructuring process last year. “In future, growth will take place not only in Germany and Europe, but above all in Asia and America. We shall therefore greatly increase our presence in the high-focus countries of the USA and China; we have already been making preparations for this over the past few years. We shall also establish a broader basis for our activities and invest in new growth sectors such as electric light assembly (ELA). Nevertheless, we shall not lose sight of our core business: in pneumatics, we intend to open up additional market segments with a focused, competitive product range. In our Electric Automation, Process Automation, Customer Solutions and Didactic divisions, too, we shall extend our range of activities and enhance our position on the market,” said Dr. Veit.
In future, Festo will be concentrating to a greater extent on its traditional fields of expertise: excellent consultation for its customers, a high level of solutions competence for individual requirements, a first-class product range, excellent logistics performance, technology and innovations competence in many areas, a global market presence and competent service.
Festo as a top employer: a professional future with career opportunities
Over the past few years, Festo has constantly grown not only in terms of turnover. The workforce grew in 2014 to 17,800 worldwide (previous year: 16,700), including 8,100 employees in Germany (previous year: 7,700) and 9,700 abroad (previous year: 9,000).
In 2014, Festo once again numbered among the top 100 employers for engineers in Germany and the top 500 in Europe. The company provides ideal working conditions, career opportunities and the possibility of lifelong learning and internal or external further education for trainees, first-time employees and young professionals, but also for employees with long professional experience. Junior employees are strategically supported with a talent management programme. Added to this are specific offers for on-the-job studies. Young aspirants are also given support in the form of a stipend or as part of the Stay Inspired student development programme.
Last year, a total of around 120 trainees and bachelor students in Germany and 25 in China embarked on a course of education with Festo. Two of them can look forward to a very special year ahead: as the winners of the preliminary round of national professional competitions, they will represent Germany in the mechatronics section of the WorldSkills vocational championship in Brazil later this year.
Software will play an increasingly significant role in future production. After all, there can be no intelligent products without the appropriate software. For the automation specialist Festo, it is therefore increasingly important for interdisciplinary teams to develop uniform solutions with a consistent architecture at the interface of hardware and software. “We offer exciting career prospects in the environment of Industry 4.0, also for software developers,” emphasised Dr. Veit.