Flender received the prestigious award for pioneering this sustainable transformation at the award ceremony at the Maritim Hotel in Düsseldorf. Flender CEO Andreas Evertz obtained the award from sustainability researcher Professor Kai Niebert.
According to the jury, Flender is the quality leader for wind and industrial drives and thus makes an outstanding contribution to the energy transition. In addition, the company had made significant, exemplary contributions to the transformation by setting an example and sending positive signals to its industry and beyond, the jury explained. This places the innovative gearbox manufacturer from Bocholt at the forefront of sustainable pioneers in mechanical engineering.
“I am proud that Flender, along with other companies, plays a significant role in the energy transition and industrial transformation. It is an honor to receive this award, and we extend our gratitude to the jury and the German Sustainability Award Foundation. My sincerest thanks go to the Flender team and our partners. This award is a very special milestone for us. It is a testament to the passion and commitment of our global team in tackling these critical challenges. Furthermore, it serves as additional inspiration and motivation towards our ambitious objectives. Ultimately, the awards themselves are secondary to the meaningful achievements we attain together. The industry has a duty to take the lead in addressing the climate, environmental, and social challenges,” stated Andreas Evertz, CEO of the Flender Group at the award ceremony.
Products for the energy transition and avoiding CO2 emissions
Sustainability is a pillar of Flender’s comprehensive approach to corporate social responsibility (CSR). The drive manufacturer has continuously aligned its strategy with the needs of the energy transition and a sustainable economy. This includes promotion of the circular economy through a complementary service concept. CO2 emissions prevention measures have also been implemented across the company. As a result, Scope 1 and 2 CO2 emissions have been decreased by 79% since 2015.
As a leading company in wind power drive technology, Flender has installed 350 gigawatts of gear and generator capacity worldwide, which is enough to supply the average electricity needs of nearly 270 million European households. The newest drive advancements, like the HybridDrive, decrease the demand for important raw materials, such as copper and rare earths, by up to 90 percent. This reduction is vital in ensuring the future growth of wind energy and the success of the energy transition.
Digital drives make industry more efficient and conserve raw materials
The new Flender One standard gearbox series and Flender’s AIQ digital gearbox intelligence set new standards for sustainability and energy efficiency in industrial applications. The power loss reduction of up to 50 percent, when compared to previous standard gearboxes, is significant. Flender One is customized for the specific application, saving resources and valuable raw materials. AIQ analyzes operating data of the drives in use for added efficiency. This allows industrial companies to optimize production processes and enhance efficiency. The gearboxes can also be further tailored to meet specific requirements.
Flender’s Head of CSR, Kimberley ten Broeke, highlights that the company’s achievements are a culmination of a strategic path initiated several years ago. “Sustainability is a key component of our corporate strategy, and we remain committed to this cause throughout our global team. This approach has propelled the progress we have achieved thus far. In addition to EcoVadis Gold recognition, we are proud to have received the German Sustainability Award.”
The German Sustainability Award Foundation assessed Flender and other companies according to their sustainability profiles based on the UN Agenda 2030 and EU reporting standards CSRD and ESRS for corporate social responsibility and sustainability. Winners were chosen by an independent panel of experts, who selected pioneers in each sector based on a scoring system developed for the Sustainability Award.
About the German Sustainability Award
In 2023, the GSA will be presenting awards for pioneering contributions to the transformation towards a sustainable future for the 16th time. It shows the best examples of how ecological and social progress can be achieved more quickly. It is the most comprehensive award of its kind in Europe. The award is based on the goals of the 2030 Agenda and thus on the key areas of transformation such as climate, biodiversity, resources, supply chain and society. The GSA is awarded on German Sustainability Day, which has evolved into the leading international convention on sustainability since 2008. The event, with more than 150 speakers, connects relevant stakeholders, allowing them to exchange and benefit from each other’s experiences.
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GF continues to actively drive innovation and sustainability. In April, it inaugurated two production sites in Shenyang and Yangzhou (both in China) that combine state-of-the-art production technology and the highest environmental standards in the production of lightweight car components and innovative piping systems. In Switzerland, GF officially unveiled its completely refurbished headquarters in Schaffhausen in June, featuring a modern, open space office, high sustainability standards and plenty of room for collaboration and innovation.
Through its Clean Water Foundation and long-standing partner Water Mission, GF was also able to quickly mobilize financial and material aid in early 2023 for survivors of a devastating earthquake in Turkey, helping increase access to clean water.
Corporate results
Sales amounted to CHF 1’961 million (2022: CHF 1’971 million), slightly below the previous year’s level. This represents solid organic growth of 7.5%, supported by strong global demand for sustainable solutions. Negative currency effects had a substantial impact of CHF 123 million, partially offset by price adjustments.
The operating result (EBIT) rose to CHF 184 million, with a corresponding EBIT margin of 9.4%. In the first half of 2022, these were CHF 179 million and 9.1%, respectively. Net profit attributable to GF shareholders amounted to CHF 123 million, compared with CHF 125 million in the first half of 2022. Free cash flow came in at minus CHF 131 million (2022: minus CHF 37 million). Before acquisitions/divestments, the free cash flow was minus CHF 66 million (2022: minus CHF 98 million).
All three divisions were able to generate value in the first half of the year. The shift toward less cyclical businesses makes GF Casting Solutions and GF Machining Solutions in particular more resilient.
GF continues to jointly report financial and non-financial KPIs, underscoring the importance of a holistic business approach to both financial success and sustainability. GF is on track to reach its ESG targets for the year, including total sales with social and environmental benefits, a reduction in CO2 emissions, a reduction in waste and water intensity, as well as its targets for diversity and inclusion. In April 2023, GF was again included in “the top 100 companies globally” in the third edition of Europe’s Climate Leaders – a listing by the Financial Times of the companies that are leading the way in tackling the negative impacts of climate change.
GF Piping Systems
The division saw lower demand in its Building Technology and Gas Utility business, however, its presence in growth markets and segments, such as high-end microelectronics production and process automation for water reclamation and treatment, made up for it. Sales amounted to CHF 1’065 million in the first half of 2023 (2022: CHF 1’094 million), representing an organic increase of 4.2%. The operating profit came in at CHF 141 million (2022: CHF 158 million), for an EBIT margin of 13.2% (2022: 14.4%).
In June, GF Piping Systems announced it had received Intel’s EPIC Distinguished Supplier Award, a milestone that highlights the division’s customer focus and commitment to excellence, and rewards a consistent level of strong performance.
With its state-of-the-art manufacturing layout for the production of process automation applications, its clean room for pre-fabrication and the modern training center, the newly inaugurated site in Yangzhou (China) is ready to meet the increasing customer demand for sustainable solutions.
In July 2023, GF Piping Systems received the EcoVadis gold medal for its sustainability performance. This award positions the division among the top 5% of companies assessed worldwide.
GF Casting Solutions
Growth in sustainable mobility reached an all-time high, with 86% of high-pressure die casting lifetime order intake related to e-vehicles. Sales reached CHF 471 million (2022: CHF 449 million), an organic increase of 20.0%, due in part to strong demand for e-vehicles. Operating profit increased substantially to CHF 35 million (2022: CHF 14 million), for an EBIT margin of 7.5% compared with 3.2% in 2022. The division is increasingly recognized for its innovation strength and capabilities to produce mega castings, which are a key differentiator in the production and assembly of e-vehicles. The ramp-up of the factory in Shenyang (China) is also progressing according to plan.
GF Casting Solutions earned its first EcoVadis gold medal for its sustainability performance in March 2023. This award positions the division among the top 4% of companies in the “Casting of Metals Industry” segment.
GF Machining Solutions
Considering the current demanding macroeconomic environment, GF Machining Solutions achieved a good order intake of CHF 461 million (2022: CHF 478 million), resulting in a book-to-bill ratio of 1.1. Sales reached CHF 426 million in the first half of this year (2022: CHF 431 million), organically up 3.7%, thanks to a rebound in the aerospace sector, where global order intake returned to pre-COVID-19 levels. Operating profit reached CHF 20 million (2022: CHF 17 million), leading to an EBIT margin of 4.7% (2022: 4.0%), supported by a strong MedTech segment and a high share of innovative solutions in the EDM technology.
The division continues to be an industrial technology leader, pursuing its strategy to strengthen customer experience and service offerings, including digital services.
GF Machining Solutions launched new high-performance laser machines for applications in several segments. One of these applications is anti-scratch surfaces on plastic components, where laser textured molds make it possible to reduce plastic coating chemicals, a big step in the sustainability journey of its customers.
Tender offer launched to acquire leading Finnish company Uponor
On 12 June 2023, GF announced its voluntary recommended cash tender offer to acquire the Finnish company Uponor, which, if successful, will pave the way for GF to become a global leader in the Water and Flow Solutions business, and increase its resilience and growth prospects. This is a transformative step for GF, which, upon successful completion, will accelerate the execution of its Strategy 2025 to drive profitable growth. The transaction is expected to close in Q4 2023.
Outlook for the full year 2023
The present volatile environment is likely to persist in the short term, but with a different situation per market segment. GF Piping Systems is dealing with a subdued worldwide construction industry, and gas utilities in Europe and Asia are facing headwinds. At the same time, the industrial segments are continuing to enjoy good momentum globally. GF Casting Solutions’ good position in the e-vehicle and high-end segments is expected to support its business, also in the second half of the year. GF Machining Solutions faces subdued ICT markets, especially in China, but MedTech and aerospace order intakes are solid.
Overall, GF is set to benefit from strong positions in resilient market segments. In particular, the sustainability needs of our customers continue to offer excellent long-term business opportunities. Barring unforeseen circumstances, for the full year 2023 GF expects to achieve organic sales growth in line with its Strategy 2025 and an operating profitability within the Strategy 2025 corridor (EBIT margin 9-11%).
Source: Georg Fischer AG