Anyone who, in 2020 – the first year of the pandemic – thought that the world couldn’t get any more volatile, received a salutary lesson last year: the storming of the Capitol in the USA, the closure of the Suez Canal and the worldwide spread of highly contagious viral mutations; by container and semiconductor shortages, and by price distortions in energy and material costs. In an interview, BENTELER CEO Ralf Göttel tells us how we managed to master these challenges.
Mr. Göttel, we wanted to talk about the past fiscal year. However, the war in Ukraine has changed everything...
We are all following the current developments with deep sorrow. War only knows victims. As BENTELER, we condemn acts of war, stand by basic democratic principles and the rule of law, and live our humanistic values.
We are heartbroken – but we are not helpless: we are already providing local support in various ways to our colleagues who are directly affected. Specifically, for example, in reuniting families, organizing accommodation, visits to doctors and communication or making advance wage payments. My special thanks - on behalf of the entire company - go to all BENTELER employees. Many have committed themselves in different, spontaneous and unbureaucratic ways to help the victims of this war.
As a global company, the war also has a direct economic impact on us. In many cases, supply chains in the automotive industry have been disrupted. This has an impact on our customers' call-offs and therefore on our production - particularly in Northern Europe. We are working at full speed to mitigate these effects.
Stable political conditions are a basic prerequisite for successful economic activity. When this is not, or no longer, the case, agility and resilience are required. In short, current events show how important it was for us to position ourselves flexibly and continue our transformation - despite the difficult conditions that prevailed in the previous year.
What is your summary for the year 2021?
The past year was characterized by a volatile market environment. What we experienced during this period was certainly not included in any annual planning. Not even in ours. Nevertheless, we remained a reliable partner to the automotive industry – we kept our promises to customers. What's more, we successfully continued our transformation at the same time. Consistently, with the goal of becoming even more agile and competitive.
Which transformation measures were essential from your perspective?
In recent years, we have learned to respond quickly, agilely and effectively in a rapidly changing, disruptive market environment. For example, we have mastered various tools to make our costs more flexible. We are now building on this transformation expertise and our improved resilience.
At the same time, we strengthened our core competencies by optimizing our product portfolio, processes, and global footprint accordingly. We continued to gain speed by working collaboratively both internally at BENTELER and with new external partners. We use this momentum to respond quickly and flexibly to changes in the market and new customer needs – actively, on our own initiative. Because as a team, we enjoy shaping mobility.
How did the numerous challenges of the past year affect the financial performance of the BENTELER Group?
The joint efforts of the past months, indeed years, are now being rewarded – we have competitive cost structures, can adapt dynamically to a wide variety of changes, and are also on a good course financially.
Despite the difficult market environment in 2021 - characterized by price increases in energy and material costs, the global semiconductor shortage, and high market volatility - we succeeded in achieving all the goals we had set. We have proven that we are a relevant, reliable partner. This is also confirmed by our customers: They trust us - and rewarded us with a record level of order intake in the previous year.
The result of our efforts is also reflected in the annual financial statements. Despite the exceptional market conditions, in 2021 we increased both our sales (from €6.4 billion to €7.3 billion) and our EBITDA year-on-year – the latter substantially, from €160 million to 332 million. We are continuing our path of profitable growth.
And how does it look in the divisions?
The previous year got off to a promising start for the Automotive division. From the middle of the year, we were hit by the semiconductor shortage – mainly in the form of call-off cancellations at short notice. Nevertheless, the division was able to increase sales by around ten percent to 6.2 billion euros and thus also earnings significantly compared to the previous year - through improved cost management, efficiency enhancement programs and the successful implementation of flexibility measures.
The Steel/Tube Division’s market was above expectations in the previous year, especially the demand in the oil and gas sector. We increased sales year-on-year by around 50% to €1.1 billion. By systematically continuing the transformation and implementing internal measures such as improving cost management, the division was able to significantly improve its performance: Despite sharply increased raw material prices, which can only be passed on this year, the Steel/Tube division ended 2021 successfully.
What do these successes mean for the future of the BENTELER Group and for the further implementation of the transformation program?
If you had asked me five weeks ago when we closed fiscal 2021, I would have said: The global economy is expected to recover in the next two years; this also applies to our markets, despite regional differences - however, this recovery depends on many factors. The effects of the pandemic would have to weaken further, supply shortages would have to be overcome, and inflation would have to ease. None of this is definite. Now, the uncertainties of the Ukraine conflict have been added to this, in addition to the human suffering, the impact on supply chains and energy and raw material prices. So the future remains uncertain.
Nevertheless, we are confident: We will strengthen our financial stability and reinforce our position as a top performer in the industry. Thanks to our transformation, which was initiated early on and implemented consistently, we can now move into a phase of continuous improvement.
And how do you personally look to the coming years?
Thanks to our transformation, as a 25,000-strong team we are ideally equipped to compete in volatile markets and at the same time shape the mobility of tomorrow - making it lighter, safer and more sustainable through our expertise as metal processing specialists. It is precisely this will that drives us. Me personally, too. That's why I recently extended my contract as CEO of the BENTELER Group until 2026. I am very much looking forward to the coming years together with our employees.
A final question: What makes you so confident about the future? And motivates you to continue on this path with BENTELER until at least 2026?
We all need affordable, safe mobility. Worldwide. At BENTELER, we have the know-how to shape this in a sustainable way. Each of us individually, with our strengths. Together as a team, we will master the challenges ahead - from transformation and digitalization to sustainability. We are a people business! We want to live a culture that is characterized by our corporate values - the courage to break new ground, the ambition to strive for top performance every day, and respect in our interactions with one another. I see this as very important for the future. For ourselves, for our customers, and for society.
Thank you for the conversation.
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