Annual Report 2014

Business Model of the Group

Organisational Structure of the Group

The technotrans Group is an international technology and service company that concentrates on customer-specific applications in the field of liquid technology. It comprises technotrans AG and 14 subsidiaries in which technotrans AG directly has an interest, as well as 5 companies in which it holds an interest indirectly. The parent company technotrans AG, with its registered office in Sassenberg (Westphalia), directly or indirectly has a majority interest in all subsidiaries. The ownership structure within the group is presented in the Notes, under "Consolidated Companies“ and "Shareholdings".

Segments

The Group’s business is divided into two segments: Technology and Services. The Technology segment generates just under two-thirds 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, spraying/pumping of liquids, along with the corresponding control and process engineering. Its customers come from a variety of industries such as the printing industry, the laser industry, machine tool engineering, and stamping and forming technology; their background is increasingly in other markets, too, such as energy storage technology as well as scanner and medical technology.

The Technology segment is complemented by the Services segment. technotrans’ activities (worldwide parts supply and hotline) are rounded off by an extensive range of services. These include providing customer support for the installation, maintenance and operation of systems. The subsidiaries gds GmbH and gds-Sprachenwelt GmbH, which likewise come under this segment, mainly produce technical documentation, including in translation. They also sell proprietary software, which is used to generate that documentation.

Locations

With 22 locations, numerous joint undertakings and 781 employees (December 31, 2014), the technotrans Group enjoys a presence in all major markets worldwide.

Products and Services

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 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 in order to safeguard its long-term growth. Activities outside the printing industry brought in around 33 percent of revenue in 2014; the aim is to increase this share gradually to at least 50 percent.

Business Processes

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. Its low manufacturing penetration enables technotrans to respond flexibly and cost-effectively to the requirements of customers.

Sales Markets

The technotrans Group’s largest customers come from the printing industry, the laser industry, machine tool engineering and medical technology. In the sphere of the printing industry, we supply almost all leading printing press manufacturers worldwide. The market share of technotrans 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.

Alongside technotrans AG, the market for suppliers of peripheral equipment to the printing industry includes merely a relatively small number of companies which have a predominantly regional focus. In the other lines of industry in which technotrans is active, the supplier market is highly fragmented. A major success factor for technotrans is the 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 position as market leader in its chosen niche markets; the market entry barriers for potential competitors are for the most part high.

External Factors Influencing Business

The investment propensity of the target industries in which the technotrans Group is active regularly has a major influence on the group’s business performance. That propensity is in turn determined 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 is designed to significantly reduce that correlation in future. This is also loosening the group’s exposure to the structural difficulties that have long been a defining feature of the printing industry.