R STAHL : The magazine for the Annual Report 2023

Successful.

Together.

Safely.

The magazine for the Annual Report 2023

Key Figures R. STAHL Group 2023

Order intake

342.5

€ million

Sales

330.6

€ million

EBITDA

36.6

€ million

Employees

1,721

R. STAHL Annual Report 2023

2

3

Contents

4

Interview with

Dr. Mathias Hallmann On the road to success

10										30
Safety for all									Employer Branding
kinds of industrial
								The best of
applications
12							two worlds
8		Strategy					26
	on track
R. STAHL -									Sustainability
								Setting a course
A leader in
								for the future
explosion							22
protection
								Digitalization
								Networked
						Successful.	with the future
		16			Together.
				Safely.
			Leading as a team
			The Executive
			Committee

4

I n t e r v i ew E xe c u t i ve Bo a r d

I n t e r v i ew E xe c u t i ve Bo a r d

5

On the road to success

Dr. Mathias Hallmann

Chief Executive Officer / CEO

R. STAHL delivered an impressive performance in 2023. Significant progress was made in almost all areas of the company. In this inter- view, Dr. Mathias Hallmann talks about how this progress came about and how R. STAHL is shaping the future with strategic action.

Dr. Hallmann, R. STAHL has produced some outstanding figures for financial year 2023. What was it that propelled the company forward?

Dr. Mathias Hallmann: Certainly the strategic measures we have implemented are the most important factors driving this development. In recent years, we have continued to press ahead with our Group strategy, laying strong foundations for medium to long-termgrowth. We are now in a position to leverage the effects we have already achieved. The elimination of the restrictive Corona framework conditions allows us to expand even further, especially on the international stage. As a result, our activities are increasingly developing their full poten- tial. In my view, the strong upward trend in our business performance

is clear evidence that our strategy is taking hold and that we are now increasingly reaping the rewards of the strategic work we have done.

Are all areas of the company contributing to the strong upward trend?

Dr. Mathias Hallmann: We have taken the company to what is generally a higher level of performance. We generated an order intake of € 96.7 million in the first quarter of 2023 alone. For the year as a whole, order intake amounted to € 342.5 million. These are new record figures for R. STAHL. But the strategic successes are not only evident in the operating business. We also managed to improve signi­ ficantly in those areas that support

6	I n t e r v i ew E xe c u t i ve Bo a r d				I n t e r v i ew E xe c u t i ve Bo a r d	7

"Business development over the course of the past year demonstrates that our Group strategy is taking hold and facilitating significant progress for the company - both in terms of sales and earnings.The implementation of our strategy also ensures an even stronger performance in the supporting functions, paving the way for further growth and international expansion."

operations. R. STAHL has, for example, long been recognized as an employer of choice. This appeal as an employer was further enhanced in 2023, thus delivering tangible benefits when it comes to competing for talent.

R. STAHL provides solutions that are essential for the fulfillment of international megatrends. How does this impact your business?

Dr. Mathias Hallmann: Our strategy has been designed to be both sustainable and lasting. With this in mind, we primarily address megatrends that are here to stay and from which R. STAHL can benefit for another 20 to 30 years. Such trends include digitalization and decarbonization as well as the rebuilding of domestic value chains in the pharmaceutical industry and automation in the chemical industry. We have systematically focused on these long- term trends from a very early stage. R. STAHL is, for example, an undisputed leader in explosion protection for LNG applications in the field of new energies and is already very well positioned with regard to hydrogen, a key topic for the future. This is now paying off and continues to open up major opportunities for us.

The EXcellence 2030 Group strategy focuses on the value drivers digitalization and internationalization. How have things been progressing in this regard?

Dr. Mathias Hallmann: In terms of in- ternationalization, we have continued to expand our market position in Eu- rope. This expansion has encompassed all areas of luminaires, automation and low-voltagetechnology. From a global perspective, we are now transferring our European successes to the world. Specifically, this means that structures and processes that have proven successful in Europe are being rolled out on a global scale. In this way, we are also gaining market share on other continents and generating above-averagegrowth in these markets. The results of this strategy were already evident in 2023. R. STAHL achieved profitable growth in Singapore, Malaysia, India, Korea and China, with business in India, for example, expanding by almost a third. Although we are only in the early stages of internationalization, we are already more firmly established in Asia and the Middle East after taking these initial steps.

The harmonization of our IT systems is very close to completion in terms of digitalization as a value driver. We can now benefit from a standardized IT architecture throughout the world and thus build on a consistent database. We have also made significant headway in digitalizing production manage-

ment. Not to mention the digitalization of our products - whether it is in terms of the carbon footprint, a requirement that is becoming increasingly important to customers, or in relation to digital product passports and digital twins.

On top of all that, you also entered into a new dimension of Group management with EXcelerate in 2023.

Dr. Mathias Hallmann: EXcelerate is a program for the benefit of the entire R. STAHL Group and the central tool for driving our strategy forward and measuring the successes that are achieved. The program creates transparency across all companies and allows us to increasingly manage the company in real time and on the basis of uniform key performance indicators.

Our Executive Committee, a management group whose members have global responsibility in their respective areas of expertise, is also a crucial component in the implementation of the strategy. As a management body, the Executive Committee pools the expertise of a wide range of functional areas including Quality, Sales and Op- erations. The close cooperation among the committee members ensures that there are seamless interfaces and that the progress made by the individual areas is synchronized.

What is the outlook for R. STAHL this year? Will business continue to develop well?

Dr. Mathias Hallmann: From today's perspective, we can safely say that we have had a good start to the current year. Business was already developing well in January, with both order intake and sales picking up steam faster than expected at the end of 2023. Price sensitivity on the part of our customers is increasing, however, and it is becoming more difficult to pass on rising costs. Compensating for higher personnel costs resulting from collective bargaining agreements, which we are countering with efficiency measures, is a particular challenge.

Overall, however, I am positively optimistic for the current financial year.

Thank you for taking the time to talk to us, Dr. Hallmann, and all the best.

More on EXcelerate on page 12 The Executive Committee is introduced on page 16

8 R . STA H L - A l e a d e r i n ex p l o s i o n p r o t e c t i o n

59

international	57
offices
	countries

18

operating subsidiaries

R . STA H L - A l e a d e r i n ex p l o s i o n p r o t e c t i o n

9

R. STAHL - A leader in explosion protection

R. STAHL among the leading global suppliers of products for electrical explosion protection in the world. With a comprehensive portfolio of electro-­mechanical, electronic and automation technology components as well as customer-specific system solutions, we deliver uncompromising safety - even in highly demanding applications and extremely challenging locations. Our products from the areas of luminaires, automation and low-voltage technology also impress in the most demanding applications and in extremely challenging locations. Extensive service and support activities complement the product range.

Our strong market position is the result of a high level of technological compe- tence, market-leading products and innovative developments. With subsidiaries,­ production facilities and sales offices, R. STAHL is present in European markets, in the Middle East and South Africa, in the Asia-Pacific region as well as in North and South America.

Strategic market development

Demand for electrical explosion protection solutions is increasing and is driven by global trends. In order to take advantage of the resulting growth options, we are pushing the expansion of our market share. The goal is to at least maintain R. STAHL's strong market position in Europe and to sustainably expand market penetration in all other parts of the world, especially in the Middle East, America and Asia.

10	S a fe t y fo r a l l k i n d s o f i n d u s t r i a l a p p l i c a t i o n s

Safety for all kinds of industrial applications

S a fe t y fo r a l l k i n d s o f i n d u s t r i a l a p p l i c a t i o n s

11

The three most important types of

ignition protection

for safety that is

reliable

Electrical explosion protection is a core aspect of safety engineering­. It plays an essential role wherever flammable substances are industrially produced, transported, stored or processed.The chemical and petrochemical industries are therefore just as de­pendent on electrical explosion protection as the pharmaceutical industry, the energy sector, the food industry and many other industrial sectors.

INTRINSIC SAFETY	INCREASED SAFETY
The energy quantities occurring in	Special design measures prevent
an electrically operated device are	the build-up of ignition sources
reliably kept below the energy lev-	inside sealed and mechanically
el required for ignition. Sparking	robust housings. The outer hous-
therefore does not occur. Ignition	ing surfaces are also free of igni-
protection via intrinsic safety is	tion sources.
suitable for electrical components
with low voltages and currents.

FLAMEPROOF

ENCLOSURES

Electrical equipment is installed in special enclosures that can withstand explosion pressure and prevent explosion propagation to the outside. This type of protection is ideal where contact between electrical sparks and explosive mixtures is unavoidable. It also allows the

With a wide range of innovative products and sophisticated system solutions, R. STAHL ensures reliable protection and a high degree of safety in potentially explosive atmospheres. We offer customers from a wide range of industries a basis for their safe handling of flammable gases, vapors, mists or dusts.

From a technological standpoint, R. STAHL is a leader in all common types of ignition protection. In cooperation with our customers throughout the world, we rely on one-stop solutions and cover all necessary individual tasks related to electrical explosion protection, from consulting and engineering to system integration and project management to certi­ fication and commissioning.

use of non-explosion-proof components in potentially explosive environments.

R. STAHL guarantees the safe operation of electrical systems in areas exposed to explosion hazards - at any time and in almost any place.

12 S t r a t e g y

Strategy on track

R. STAHL's strategic orientation is both consistent and sustainable.The foundation is our EXcellence 2023 strategy, which we are now pressing ahead with as part of the modified EXcellence 2030 corporate strategy. With the EXcelerate program, R. STAHL has also launched an initiative to accelerate strategic progress and enable data-based positioning.

Technology and efficiency

Sustainably and growth

5

DIGITA-

LIZATION

• Products and services
• Processes

S t r a t e g y

13

6

INTERNATION-

ALIZATION

• Processes and structures
• Culture

1

EFFICIENCY

• Lean management

• Sales excellence

The EXcellence 2030 Group strategy is defined by six complementary dimensions that leverage potential in a wide variety of areas. As well-established value levers, the technology and efficiency dimensions pave the way for operational performance gains. From a technological perspective, this involves securing technology leadership, market-driven innovations and future-oriented portfolio renewal. These are objectives for which we are tapping into our unique set of skills in the field of electrical explosion protection. In terms of efficiency, the focus is on making continued progress when it comes to lean management and sales excellence.

The sustainability and growth dimensions have also been among the company's strategic value levers for quite some time. The focus here is on solutions for market-driven demands as well as on the growing interest of our stakeholders in sustainable business practices. In terms of sustainability, we are working specifically on an expanded implementation of ESG criteria, including data-based documentation of successes achieved. Both of these aspects reinforce our corporate growth, which we promote through targeted business development and focused segment management.

4

SUSTAIN­ ABILITY

• ESG

• Data management

2

TECHNOLOGY

• Portfolio renewal

• Market-driven innovations

3

The six dimensions of our Excellence 2030 Group strategy

GROWTH

• Business development
• Segment management

EXcellence 2023

EXcellence 2030

14 S t r a t e g y

S t r a t e g y

15

The three advantages of our EXcelerate strategy

Internationalization and digitalization

One program, multiple advantages

EFFICIENCY	COST	SALES
GAINS	REDUCTIONS	GROWTH

The EXcelerate strategic program supports the implementation of our strategy. Not only does it increase sales, it also boosts efficiency and reduces costs.

The digitalization and internationalization dimensions were added in 2022 with the launch of the EXcellence 2030 strategy. Within the framework of the internationalization strategy, we are charting a clear course for the global expansion of our market share. The focus is on further harmonizing our structures and processes and strengthening our corporate culture across national borders. In the area of digitaliza- tion, we are focusing on three main areas: promoting digital business processes, digital products and digital business models. The digitalization transformation is still in its infancy, but is steadily picking up speed.

EXcelerate - another success booster

Best-in-class, also in performance management. To achieve this goal, R. STAHL launched the EXcelerate project in 2023. Under the motto "Together towards data-driven Corporate EXcellence", we are moving forward with the implementation of the Group strategy while simultaneously raising the management and control of our global business to a completely new level. The project focuses on the areas of Group management, cost-performance accounting and global financial organization. From an organizational point of view, it encompasses the entire R. STAHL Group, with the Finance & Controlling department taking center stage.

EXcelerate makes it possible for us to manage the Group even more efficiently and precisely on the basis of clearly-defined key performance indicators. With the optimization of planning, management and control, our agility increases. For example, EXcelerate provides us with an accurate overview of the current level of target achievement in real time. This is complemented by the Group-wide increase in transpar- ency, including comparability. Established measures can be reviewed promptly with regard to their effectiveness and adjustments can be make wherever they might be needed.

Successes are already evident

The individual activities associated with EXcelerate are extensive. They include, for example, the standardization of our global structures and processes. We are implementing new tools, taking measures to exploit the full potential of our IT systems and focusing to an even greater degree on initiatives such as harmonization and automation. In line with its wide reach, EXcelerate has been designed as a multi-year project. Following the successful concept design last year, the implementation phase began at the start of 2024 and is expected to be largely completed by the middle of next year. Additional stabilization and any adjustments will then be made in the following years. The first positive effects of the program are already visible.

16 E xe c u t i ve C o m m i tt e e

Leading as a team

The Executive Commitee of the R. STAHL Group: Timo Dworschak, Holger Angrick, Christian Frielinghaus, Dr. Mathias Hallmann, Martin Wilkens, Thomas Merkel, Tobias Popp (from left to right)

E xe c u t i ve C o m m i tt e e

17

Behind R. STAHL's success is a strong community. A community consisting of about 1,700 employees working in 57 countries around the world. Our Executive Committee serves as the central management body for this community. It is made up of specialists from all key functional areas - including information technology, production, sales and human resources.There are seven highly-qualified managers on the committee whose job it it to s who guide and manage the Group together with the Chief Executive Officer / CEO.

Global guidelines, local implementation responsibility

As the most senior management body, the Executive Committee plays a pivotal role in determining our Group strategy and driving it forward worldwide. The members of the Executive Committee set the strategic guidelines relating to their area of responsibility. These are then translated into day-to-day operations by the Managing Directors of the subsidiaries and thus implemented. Within the overall organization, each member of the Executive Committee has global responsibility for their specific area of expertise throughout the R. STAHL Group.

Competence forum with combined expertise

Key topices for the Group are taken up at regular meetings of the Executive Committee, priorities are set and important corporate decisions are made. The diverse range of specialist skills are brought ideally interwoven, resulting in a maximum of pooled ex- pertise. Close coordination within the committee also ensures that projects are set up in a highly coordinated manner. Seamless interfaces among the functional areas involved are ensured right from the start.