HARTING Technology Group asserts itself in a difficult environment
The HARTING Technology Group based in Espelkamp (Minden-Lübbecke district) stood up well in financial year 2018/19 (to September 30) despite the difficult economic climate. Sales recorded by the globally active family owned and managed business dropped slightly by 1.6 % to stand at € 750 million (previous year € 762 million). This was the second-highest sales figure in the 74-year history of HARTING.
“In view of various indicators, we were expecting this result,” said Chairman of the Board Philip Harting. Political uncertainties, trade wars, Brexit and currency effects had all impacted the result. “After adjusting for currency effects, we would otherwise have repeated our previous year’s record result,” the HARTING Chairman made clear.
At the annual press conference in December 2018 he had previously predicted sub-5 % growth for financial year 2018/19, but by the time of the HANOVER Fair, he referenced the great effort being made to match the previous year’s result and adjusted his guidance. “Measured against the competitive environment and against our customers, we nevertheless stood up well,” the Chairman continued, pointing to the forecast by the industry association VDMA (“these are all our customers”), which assumes a drop of 2 % for both 2019 and 2020.
Regional variations in development
The regions in which HARTING does business worldwide have developed along varying lines in financial year 2018/19. Besides declines there has also been some powerful growth. For example, in Europe (excluding Germany) and in the Middle East and Africa (EMEA), sales climbed 6 % to € 278 million (previous year: € 263 million). In the Asia region HARTING recorded stable performance: Sales here slipped slightly by 0.5 % to € 186 million (previous year: € 187 million). Meanwhile in the Americas, the Technology Group saw sales down by 9 % to € 72 million (previous year: € 79 million). In Germany, too, sales were down 8 % at € 214 million (previous year: € 233 million). Philip Harting stated clearly that “the crisis in the wind power industry, substantial downturns in mechanical and plant engineering as well as trade disputes had a clear impact, and Germany’s engine of growth is faltering.”
Strong gains in E-Mobility and HARTING Customised Solutions
In addition to the positive development in certain regions, HARTING recorded strong growth in some areas of business. For example, the Technology Group recorded clear double-digit growth in the field of charging infrastructures for electromobility. HARTING is therefore stepping up production in Romania. The expansion of the plants in Sibiu and Agnita are due for completion in May 2020.
The HARTING Automotive subsidiary has long been established in the component supplier market, and has recently registered a sharp increase in demand for e-mobility solutions. Based on its decades of experience in the field of connectors and transmission technology, the company develops and produces charging equipment for electric and plug-in hybrid vehicles. “The charging solutions for the Audi e-tron and the Porsche Taycan are two convincing examples of the growing demand in this market,” commented Philip Harting.
The HARTING Customised Solutions division (HCS) is also charting a growth course. From Russia and India to Poland and elsewhere in Europe, HARTING is expanding its local assembly plants making cabling, overmolded cables and other customer-specific solutions. “Especially our customers in the rail industry appreciate our products,” noted Philip Harting. At the beginning of October, HARTING established a Regional Competence Service Center (RCSC) at its plant in the Chinese city of Zhuhai. An HCS team is based there to serve Chinese rail customers.
In January of this year, HCS commissioned a production plant near the Polish city of Bydgoszcz. The customised solutions produced in this 500 m2 factory are destined primarily for the mechanical and plant engineering sector.
Investments in innovations and technologies
HARTING will continue to invest in these growth areas, as well as in developing new products, innovations and technologies. With its patented and standardized, miniaturized Ethernet connectors, HARTING delivers a high-performance foundation for numerous digitization projects being implemented by its customers.
In the Industrial Internet of Things (IIoT), HARTING has taken a decisive step forward: In order to create an end-to-end communications infrastructure and be able in future to reach all industrial Internet participants in the IIoT, HARTING has developed the T1 Industrial connector, and in doing so has set the IEEE connector standard for Single Pair Ethernet (SPE) in the industry. This intelligent connectivity solution will bring miniaturized sensor and actuator technology and a new departure in I4.0 Automation to the Net and into the Cloud.
Similarly, HARTING has also succeeded in establishing a new standard for miniaturized Ethernet interfaces in the market with its ix Industrial®. “Digitization requires fast Ethernet – and we are delivering the powerful connectivity this calls for,” Philip Harting emphasized.
The company is likewise broadening the field of software solutions powered by HARTING to cover all aspects of its MICA® portfolio and create a link between electro-mechanics and smart manufacturing as a basis for further growth, the Chairman explained.
HARTING – a reliable partner for other companies
Philip Harting considers the Technology Group to be well positioned with its current portfolio of innovative products and solutions. In the summer of 2019, the HARTING Applied Technologies subsidiary joined forces with the Sennheiser company to develop and manufacture a production plant to produce miniature converters, the central element responsible for audio quality. The resulting components are used in premium headphones and headsets for professional applications on stage. “This underscores the core competences of the Technology Group,” said the Chairman.
In the past financial year the Technology Group has recorded an above-average level of investments. As Senior Vice President, Finance and Purchasing Maresa Harting-Hertz stated clearly, “We set a new record total of around € 66 million.” A large part of this was accounted for by the European Distribution Center (EDC), which was officially opened in June with a spectacular show at the GOP Theater. There were also investments in new products and technologies, digital customer services and the expansion at the HARTING locations in Zhuhai (China) and Elgin (USA) as well as Agnita and Sibiu (Romania). “In this way the Technology Group is paving the way for growth in the coming years, as well as enhancing its production flexibility,” emphasized Andreas Conrad, Senior Vice President Operations.
288 new jobs created worldwide
The investments in added growth and future security are also to be felt in personnel development, as Senior Vice President HR Dr. Michael Pütz explained. The number of employees (including trainees) rose in the course of financial year 2018/19 to 5,268 (previous year 4,980). This equates to an increase of 5.8 %. 36 new jobs were created in Germany (+ 1.4 %), with a further 252 new staff employed at production plants and subsidiaries abroad (+ 9.5 %). This means that for the first time by September 30, 2019 the total of 2,655 persons employed abroad exceeded the number in Germany (2,613). “Growth in the EMEA region and in expanding our plants in Romania has had a clearly visible effect,” explained Dr. Pütz.
There are currently 140 commercial and trade and technical trainees and work-study students preparing for future employment in over 20 occupations. A new vocation to join the list in 2019 is that of electronics technician in industrial engineering. Training in 2020 will be extended to include surface coating technicians, design mechanics and industrial electricians for equipment and systems.
“Creating values for people” – local support, social responsibility and climate protection
The third part of our corporate vision formulated in 1996 reads, “We aim to create values for people”. As Margrit Harting emphasized, “Whether locally, regionally or worldwide, this applies at every location at which our company is present.”
In the past financial year, the Technology Group has supported the following projects in particular in the fields of education, culture, sport and medical care:
- The HARTING Research Prize for Children was awarded this summer for the eighth time. The theme of the KiTec project (Children Discovering Technology) was “Everything interacts”. The HARTING Research Prize is a highlight at all of the elementary schools in Espelkamp. “Since 2012 around 1,500 Espelkamp elementary school pupils have received KiTec materials and some 370 of them have submitted projects within the framework of the HARTING Research Prize,” said Margrit Harting, explaining the reach of this program to communicate knowledge.
- The socio-cultural center Isy7 in Espelkamp received a donation of € 5,000 to remodel its grounds. The occasion for the donation was the inauguration of the European Distribution Center (EDC), which was officially opened at the end of June 2019 with a spectacular program of events. The guests drawn from the worlds of politics, business and administration took the opportunity to support Isy7 with a donation.
- The adult education scheme, the cultural program “Paths across the land” and the Northwest German Philharmonic orchestra et al with a concert for children.
- With its striking logo on trousers and shirts, HARTING has an open heart for football, handball and athletics as a means of supporting young people and adults – locally and nationally. “It is important to us to establish a link with our employees, potential trainees and managers and at the same time earn the company a positive reputation that goes beyond our product and industry quality. That’s why we were so delighted not only at the success of the men’s’ team in the world championships here in our own country, but also at the packed audiences for the U 17 junior internationals against France in Hille and Minden in July,” said Philip Harting. Over 3,500 school students, parents and teachers filled the halls, and browsed the stands detailing the training opportunities available at HARTING. Players and supervisors experienced these first-hand during a visit to the new HARTING Training Center.
- The HARTING Technology Group and the Baskets 96 Rahden continue their sponsorship cooperation in this 2019/20 season. The successful partnership is thus entering its sixth year. The first team of the Baskets has held their own ground there after their promotion in the first wheelchair basketball league (RBBL), the second team plays in the 2nd RBBL for the first three places.
“Medici – The Medical Center in Espelkamp", a milestone for the local community
Margrit Harting described the “Medici – The Medical Center in Espelkamp” as a beacon project for the town. The Center celebrated its topping out ceremony in November. The “Medici” is intended to counter the shortage of doctors making itself felt in many parts of the region. “It is a milestone in local support which will help to safeguard the availability of health care in Espelkamp and the surrounding area for the long term,” explained Maresa Harting-Hertz.
The Medical Center gives people a sense of security and offers quality of life through into old age. “With the Medici we are taking a stand against the shortage of doctors, the health and social care emergency and the problems in accessing medical care in Espelkamp and the rural areas,” Maresa Harting-Hertz added. The opening is planned for summer 2020. Eight practices will be established in the new Medical Center, including gynecology, ENT, podiatry, psychiatry and general medicine.
Climate protection as a corporate philosophy: Reconciling ecology and economy
It is a tenet of our corporate philosophy that “ecological responsibility is a fundamental part of what we do”. For almost four decades the company has been striving and working to reconcile ecology and economy. As long ago as 1989, HARTING introduced an internal environmental award, as Margrit Harting explained.
The Technology Group has been a consistent supporter of the energy transition and is a founder member of the Association of Climate Protection Companies. “Since 2012, HARTING has used exclusively CO2-free energy in its production. A substantial 25 percent alone originates from the company’s own biomethane gas plant in Uchte, in Lower Saxony,” explained Dietmar Harting. This gas is used for heating, but also for smelting aluminum and in the paintshops. “The waste heat is used to heat the neighboring public swimming pool.” In 2012, HARTING received the Energy Efficiency Award presented by the German Energy Agency (dena) for systematically reducing its energy consumption.
In building the EDC, HARTING has undershot the strict requirements specified by the Kredit-Anstalt für Wiederaufbau (KFW 55) by a further 27 %. This was enabled by intelligent energy management with energy supplied by a geothermal installation and a solar power system on the roof.
Further steps taken to minimize the CO2 balance up to the end of the financial year include the erection of additional biomethane-fuelled thermal power plants for Works 1 and 9 in Espelkamp. “This will further improve both the energy balance and efficiency,” as Dietmar Harting went on to comment. Since financial year 2011/12, HARTING has already succeeded in saving around 168,00 tonnes of CO2 or around 24,000 CO2 per year.
2020 set to be a challenging year
"The new year promises, once again, to be challenging. As things stand today, the uncertainties are have not become less,” said Philip Harting, referring to the upheavals in the automobile and component supply industries in conjunction with the ongoing climate protection debates and e-mobility. An entire sector of industry is facing radical change – and the outcome is completely unknown.
It is very difficult at present to make any definitive forecasts for financial year 2019/2020. Economic research institutes are presuming modest gross domestic product growth (GDP) of 0.4 % to 0.5% at best for the 2020 calendar year, while sector associations such as VDMA and ZVEI are anticipating slight declines. “We too are oriented towards these cautious forecasts, and are anticipating renewed sidewards developments,” as Philip Harting stated.
Looking forward to our 75th anniversary
In the coming year, HARTING will be celebrating its 75th anniversary. To mark the occasion, a ceremony will be held in the Botta Building in Minden on September 1, the date on which the company was founded. “Our anniversary will be a recurring theme throughout the year on a variety of occasions – including at the HANOVER FAIR,” said Philip Harting with a view to the upcoming company highlights.