The Group’s business is divided into two segments: Technology and Services. The Technology segment generates around 70 percent of total revenue. In this business area technotrans develops and sells equipment and systems based on its core skills of cooling/temperature control, filtering/separating, as well as spraying/pumping of liquids, along with the corresponding control and process engineering. The core skills of technotrans AG in liquid technology are organised into three business units (BU). Its special knowledge of temperature control (“temperature control” BU), filtering and separating (“fluid conditioning” BU) and spraying and pumping liquids (“ink & fluid technology” BU) is the result of intensive research and many years of experience. The focus is on customer-specific equipment and systems that technotrans develops as a leading systems supplier for performing essential functions as part of a specific application, therefore contributing towards optimising the overall quality and efficiency of the user’s processes. The company is steadily broadening its product range in close collaboration with existing and potential customers, including many renowned industrial enterprises, with a view to opening up new application areas and sales markets in order to safeguard its long-term growth.
The Technology segment is complemented by the Services segment. A large range of services, for example the worldwide parts supply, as well as repair and installation services, completes the activities of technotrans. These include providing customer support for the installation, maintenance and operation of systems. Other services in the Technical Documentation area also come under this segment. The subsidiaries gds GmbH, gds Sprachenwelt GmbH and Ovidius GmbH primarily compile and translate technical documentation and also market their self-developed software solutions, which can be used to compile and manage documents.
Following the acquisition of GWK Gesellschaft Wärme Kältetechnik mbH in the course of the 2016 financial year, a strategically important market – the plastics industry – was added to the existing market portfolio of the technotrans Group. Sales and Service now focus their worldwide activities on four subsidiary markets within the mechanical and plant engineering sector: the printing industry, the plastics processing industry, the laser and machine tool industry, and the growth markets of medical technology and electric mobility.
technotrans has been an important supplier and reliable partner to the global printing industry for very many years. After the financial crisis, the market for print products has now stabilised with a worldwide print volume in excess of € 400 billion annually. In terms of the technology involved, sheet-fed offset, flexographic and digital printing methods account for two-thirds of the print volume. In the sphere of the printing industry, technotrans supplies almost all leading printing press manufacturers. The company’s market share here is well over 50 percent. The large installed base and the cyclical nature of the propensity to invest mean that – in addition to service business in the narrower sense – modernisation and retrofit business directly with end customers likewise generates a significant proportion of revenue.
In the plastics industry, GWK now means technotrans has a high-performance partner for mould temperature control and machine cooling in injection moulding and plastic extrusion. Temperature control and cooling have a huge influence on the quality of moulded parts and the economic efficiency of the production process.
Robust cooling technology that is ideally matched to the application is a prerequisite for a stable and economical production process in the laser and machine tool industry. technotrans has been serving this market for many years with high-quality system solutions for the cooling, temperature control and filtering of liquids.
Charging points for batteries as well as inverters generate dissipated heat in the energy conversion process, impacting system efficiency. A constant, steady temperature profile for the components assures long-term performance efficiency. technotrans supplies cooling systems for lithium-ion batteries for mobile and stationary applications. In medical and scanner technology, technotrans’ tailormade cooling solutions are used as integral components and as external, central overall concepts.
The principal business processes encompass the development, assembly, testing and sale of equipment, along with all relevant services for major customers and their end users. technotrans’ chosen manufacturing penetration enables it to respond flexibly and cost-effectively to the requirements of customers.
The investment propensity of the target industries in which the technotrans Group is active regularly has a major impact on the group’s business performance. That propensity is in turn influenced by the present and anticipated economic situation. In view of its focus on the German mechanical and plant engineering sectors, cyclical fluctuations there have a marked influence on its business performance. The specific branching-out of business activities into high-growth industries such as the laser industry as well as energy storage or medical technology help to further significantly reduce that correlation in future.
Alongside technotrans AG, the market for suppliers of peripheral equipment to the printing industry includes a relatively small number of competitors which have predominantly regional operations. In the other lines of industry in which technotrans is active, the supplier market is highly fragmented. A major success factor for technotrans is its approach of positioning itself as a systems supplier of complex, custom-made solutions with its own international service network, and not as an out-and-out component supplier. technotrans is steadily consolidating its target position as market leader in its chosen niche markets. The market entry barriers for potential competitors are therefore for the most part high.
The drupa was the dominant event of 2016. This printing industry exhibition takes place only once every four years and is of high importance for technotrans – even if the printing press industry no longer achieves the steep growth rates that it did prior to the financial crisis of 2008. A large number of development activities were again entirely geared up to this leading exhibition, where technotrans was able to showcase numerous new and more advanced products. There were new products aimed both at delivering energy efficiency and at the growth areas within the printing press industry: refrigeration technology for the growing digital printing sector and innovative ink supply systems for packaging printing, but also new systems with energy-saving technologies and components, such as speed control in refrigeration technology.
technotrans also addressed the topic of “Industrie 4.0”: ultrasonic sensors make information such as ink levels available in a cloud in order to promote connectivity-based cooperation. The scope of web visualisation was also presented in conjunction with newly developed control concepts. This facilitates the tracking, transmitting and analysis of machine status data in order to optimise e.g. maintenance processes at the customer. Such functionalities often come under the blanket headings of “predictive maintenance” and “condition monitoring” – technotrans infuses them with reality by offering matching system solutions.
There were also numerous new developments in the divisions away from the printing market. technotrans developed its first new spray lubrication system and commissioned it. On a high-dynamic production line it wets sheet metal coils, now performing its task dynamically instead of statically thanks to synchronised independent movement. At the EuroBlech in Hanover in October 2016, the spotlight was on the extended product range of our low-mist spray lubrication system “spray.xact”. For example a new “spray.xact easy” system with flexible-to-position nozzles for easy applications made its debut. As well as the extended product portfolio, new control systems were integrated for better remote access to the production systems. Connectivity in line with the “Industrie 4.0” vision therefore also plays a prominent role here.
The products and new developments for battery and energy storage technology were the centre of attention at the Innotrans 2016 in Berlin, the leading exhibition for rail technology. In the field of energy storage technology, the industry continues to focus on projects with an array of niche applications, and therefore with small unit totals. There is nevertheless evidence of steady growth in this promising market. Whether for cooling of energy storage devices or charging points, technotrans is promoting the electrification of transport technology such as bus and rail through its products, and is equipping a large number of applications in specific projects. The latest project is a train powered by fuel cell, which again is fitted with technotrans equipment.
As in previous years, technotrans fundamentally recognises development spending in the Income Statement. If the appropriate requirements are satisfied, development expenditure is booked as an intangible asset pursuant to IAS 38 and recognised as such on the balance sheet. The R&D ratio (development spending in relation to overall revenue) was 3.6 percent in the past financial year (previous year: 3.5 percent). If R&D spending is expressed as usual in relation to revenue for the Technology segment, the figures as shown in the following table are as follows:
|Research & Development|
|Financial year||FY 2016||FY 2015||FY 2014||FY 2013||FY 2012|
|R&D spending 1||€ '000||5,534||4,293||3,382||2,985||2,241|
|Innovation ratio 2||%||5.3||5.3||4.6||4.5||4.2|
|Capitalisation ratio 3||%||0.0||4.1||4.9||22.6||21.4|
|Capitalised development 4||€ '000||832||1,195||1,439||1,583||851|
|1 R&D spending persuant to Consolidated Income Statement, in 2016 thereof € 479 thousand from acquisitions
2 R&D spending refers to the revenue for the Technology segment
3 Capitalised development costs refer to R&D spending
4 Residual carrying amounts
2016 saw the R&D spending ratio maintain the upward trend which was established after the crisis years. technotrans is investing in new markets, products and the expansion of the product portfolio. The capitalisation ratio, in other words the ratio of development expenditure recognised as an intangible asset to R&D spending, fell to zero percent in 2016.
Procurement and supply chain management are very important activities for technotrans. Organic and non-organic growth as well as product diversification entail a raft of new requirements for the entire materials management side.
Alongside growth in business operations and the expansion of supplier management, optimisation concepts need to be put into practice in Procurement. Flexibility for the technotrans locations in conjunction with an expansion of the lead buyer principle remain the focus.
The latest acquisition of GWK opens up new synergies in purchasing that we aim to identify and implement as swiftly as possible. The purchasing volume has increased significantly by approximately 40 percent. From the perspective of Procurement the aim is to realise the synergy potential available so that the entire group can tap into it profitably. It already started to do so for certain categories of materials in 2016. This process will be gradually rolled out.
technotrans AG has consequently experienced organic growth in production volume of around 10 percent. The next step along the path of non-organic growth was taken with the acquisition of GWK. Since August 2016 this has not merely fuelled considerable production growth, but also led to the addition of a sixth location to our network of production plants.
technotrans has implemented a continuous improvement process at all production locations. Programmes to boost productivity and efficiency are continuously being implemented, and potential improvements identified and gradually rolled out. Reducing interfaces in production processes, new production concepts, the adoption of shop floor management and optimised internal logistics concepts are some of the priority topics that we are focusing on at the locations. Lean concepts and internal supply chain management reflect the approach and objective. Because different products and product ranges are made at all locations, the challenge is to adopt appropriate optimisation concepts and generate mutual benefits by systematically sharing findings.
With that in mind, multi-site management was introduced in 2016. This move simultaneously involved an audit of the new quality management certificate to DIN/ISO 9001:2015. This attaches greater importance to strategic and processing aspects. Because it was implemented as a multi-site process, as already mentioned, this produces harmonization between the locations while at the same time cutting the burden of auditing work. Here too, the group benefits from a strategic approach that also encompasses the subsidiaries. 2016 saw quality – expressed in terms of the rate of warranty cases – improve year on year or remain at a consistently low level. Following the acquisition of GWK, quality themes over and above these became relevant.