Hansgrohe Group: 2021 is the most successful financial year in company history
Schiltach, March 23, 2022. “Our most successful financial year in the company’s entire 120-year history” is the Hansgrohe Group’s conclusion at its financial press conference outlining the 2021 results. Based in the Black-Forest town of Schiltach, Germany, the manufacturer of high-quality faucets, showers, and shower systems generated sales of €1.365 billion, which represents a growth of 27 percent compared to the previous year (€1.074 billion). The operating profit increased to €249.7 million, also an increase of 27 percent compared to the previous year (€197.0 million). The resulting profit ratio of 18.3 percent is identical to that of 2020.
“We would especially like to thank all Hansgrohe employees, as these extraordinary results wouldn’t have been possible without them,” says Hans Juergen Kalmbach, Chairman of the Hansgrohe Executive Board. “Our employees responded to the unique situations with a great deal of flexibility and dedication,” says the CEO. “Extraordinarily high demand and developments in the raw material markets proved to be quite challenging. Everyone delivered a top performance, despite the ongoing pandemic situation, allowing us to supply and serve our customers with the Hansgrohe service they’ve come to expect.”
Global Growth
The Hansgrohe Group generated around 74 percent of its sales abroad in 2021, which was a single percentage point higher than in the previous year. The global company delivers its faucets and showers to 152 countries. With sales of around €349 million, the domestic market was again responsible for the largest share of sales for the sanitation manufacturer based in the Black Forest. Compared to 2020 (€291 million), sales in Germany increased by nearly 20 percent, while the German gross domestic product rose by just 2.9 percent. Growth in international business was nearly 30 percent higher than in the previous year, due in large part to development in sales in the Chinese and US American markets. Added to this are sales from the majority shareholding in the Dutch company Easy Sanitary Solutions (ESS) acquired at the end of 2020.
650 New Jobs Worldwide – Nearly 400 in Germany
Due to a variety of strategic initiatives and enormous growth in sales, the number of people employed by Hansgrohe increased drastically. The company employed 5,373 employees (2020: 4,714) worldwide in the 2021 financial year. On December 31, 2021, 3,369 of them worked in Germany (2020: 2,971), and 2,004 at the international locations of the Hansgrohe Group (2020: 1,743). “Our dedicated staff managed to train more than 650 new employees and integrate them into their teams during the pandemic,” says Kalmbach. “That’s an unbelievable achievement.” In recognition of their extraordinary commitment, all employees around the world received an incentive payment totaling €5 million in 2021. Last year, the Hansgrohe Group was awarded the “Top Employer 2021” seal for outstanding working conditions, and the company has already received this award again in 2022.
Hansgrohe continues to invest in safe and modern workplaces at all locations – both in production and administration. Having learned from the pandemic, the company now relies more heavily on individual work time models. In areas where it’s practical, fixed requirements and rigid rules about who can work in the office or remotely, and when, were eliminated in the summer of 2021. Each team decides together on how best to structure internal processes and availability for the benefit of customers and other employees.
Investments in Growth, Innovation, Digitalization, and Sustainability
Despite current political and economic uncertainties, the Hansgrohe Group is sticking to its planned investment in a new location in Serbia. For up to €85 million, the faucet and shower manufacturer plans to build a manufacturing plant in the city of Valjevo. Faucet production by the end of 2023 is expected. “With this investment, we’re reinforcing our production network in Europe,” says Hans Juergen Kalmbach, Chairman of the Hansgrohe SE Executive Board. “It’s part of our global production strategy to keep supply chains and transport routes short and secure.”
At the same time, the company is also investing in its existing German locations. The Schiltach manufacturing plant is being modernized with a price tag of €12 million and, beginning in mid-2022, will operate as a production facility for the design brand AXOR. The Alpirsbach location is also being renovated and will begin operating as an innovation park in summer 2022.
The Hansgrohe Group invested a total of €51.3 million (2020: €46.8 million) in 2021. In addition to investing in modernizing various locations, funds were also dedicated to production – particularly mechanical processing, plastic injection molding, and assembly. There were also key investment projects for advancing digitalization in production, logistics, and administration.
Digital communication is also a must when it comes to marketing new products and has become extremely important for addressing trade customers. Because the most important industry trade fairs were canceled due to the pandemic, the Hansgrohe Group presented its innovations for bathrooms and kitchens virtually at the “Hansgrohe AquaDays” in March 2021. New products, such as the hansgrohe Vivenis faucet program and the AXOR One collection, were the highlights at this digital event, which Hansgrohe regularly complements with online trainings and e-learning courses for trade partners.
The innovative strength of Hansgrohe is regularly confirmed by third parties. For example, the company has been named one of the Top 100 Innovators of German SMEs for the fifth time in a row. The AXOR and hansgrohe brands won numerous design awards in 2021, including German Design Awards in Gold, iF Gold or red dot Winner Awards. Since 1974, Hansgrohe has been making a name for itself with its design expertise; to date the number of design awards has grown to over 700.
In 2021, the manufacturer of high-quality faucets, showers, and shower systems also continued to invest in its sustainability. All German sites are climate neutral in terms of direct emissions and energy consumption. By the end of 2022, all international sites will follow.
2022 Prospects
The past two years were largely shaped by the pandemic and its effects. “Even in 2022, the pandemic will continue to influence our daily lives,” says CEO Hans Juergen Kalmbach. “We’ll also continue to face global supply and material shortages and increasing energy prices. So far, we’ve managed to ensure the supply of our plants without holding up production. In fact, we’ve set some ambitious goals in terms of sales growth and increased efficiency again for 2022. We’re pleased with the first several weeks of this year. However, the current war in Ukraine, the economic downturn, and increasing inflation put everything at risk.” At the beginning of the month, the Hansgrohe Group decided to cease all its activities with Russia until further notice. To begin with, no further products will be delivered to Russia and no new orders accepted. Focus is on the 36 employees in Russia and offering them the best possible support. The Hansgrohe Group does not operate any sales offices or subsidiaries in the Ukraine. However, the company is working with twelve sales representatives, all of whom are in relative safety in the western part of the country. Now, Hansgrohe is helping its business partners to bring their families to safety in Germany and to find accommodations in the Black Forest.
The share in sales of these two markets is not particularly important for the company, which is why the direct effects are not expected to be very high. However, the indirect effects of the war on the global economy, soaring energy prices and inflation, are more difficult to predict for Hansgrohe. “We’re broadly positioned with our international business activities,” says Hansgrohe CEO Hans Juergen Kalmbach. “We are therefore also aiming for above-market growth in 2022. We’ll continue to rely on our Hansgrohe team spirit and our flexibility. Solidarity is at the heart of our thought process and behavior, which has allowed us to overcome many difficult situations. However, more than anything else we hope that no more people, whether Russian or Ukrainian, suffer or die senselessly and that we can all look forward to more peaceful times again through diplomacy, understanding, and the willingness to negotiate on all sides.”