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Annual Report 2014 - Zeppelin Group produces positive balance sheet


Despite the negative impact of the Ukraine crisis, the Zeppelin Group achieved a good result in the 2014 fiscal year.

  • Group revenues: EUR 2.3b
  • Group's earnings before taxes: EUR 71.6m (EUR 79.0m from operations)
  • Average number of employees for the year: 7,882 (including trainees)
  • Further expansion of the competence in solutions
  • Modest outlook for 2015


The Zeppelin Group posted revenues of EUR 2.3b for the 2014 fiscal year (previous year: EUR 2.43b). However, earnings from operations before taxes were up on the previous year and amounted to EUR 79.0m (previous year: EUR 77.3m). The Group achieved this positive result in an increasingly difficult market thanks to the hard work and professionalism of its employees. Considering the depreciation of goodwill from acquisitions, earnings before taxes of EUR 71.6m were reported, up sharply on the previous year's figure of EUR 64.4m. The average number of employees was 7,882 (including trainees).

The impact of the Ukraine conflict has had a significant adverse effect on Zeppelin's activities in Russia and Ukraine because the company has dealer contracts that are linked to territory.As expected, revenues fell most sharply in the Construction Equipment CIS strategic business unit. Thanks to stable service business and sound cost and risk management, the business unit still achieved a very attractive result.The Power Systems and Rental strategic business units also had to accept falling revenues and depressed earnings in these countries. While the Rental business unit offset this with a positive trend in Central Europe and inorganic growth, the Power Systems business unit posted slightly lower revenue and earnings figures with otherwise stable business development. The Construction Equipment EU business unit showed an extremely positive trend; its success was secured by the clear focus on stability and improving operating efficiency. The restructuring of the Plant Engineering business unit started in 2013 was mostly completed, with the business unit achieving another positive result from its operations after just one year.

"Despite a difficult market, the Zeppelin Group further consolidate its market position and increased its earnings before taxes in 2014. In strategic terms, we enhanced individual business areas, thus noticeably mitigating the negative effects of the regions in crisis," explains Peter Gerstmann, Chairman of the Management Board of ZEPPELIN GmbH. Christian Dummler, Member of the Management Board and CFO of ZEPPELIN GmbH adds, "Overall, our diversification and conservative financing and risk policy ensured the company's stability and earning power in a difficult and uncertain economic and geopolitical environment. On balance, the Zeppelin Group has done superbly in an extremely volatile 2014."

Expanding competence in solutions

In 2014, the Zeppelin Group pressed further ahead with the strengthening of its market position in the various business areas. The overground and underground mining business acquired from Caterpillar was integrated quickly and successfully thanks to the foundation of a competence center for the mining area.

By taking over the project service business area of Streif Baulogistik GmbH, the Rental business unit made the second-largest acquisition in the history of the Zeppelin Group. The business unit also took over BIS Blohm + Voss Inspection Service GmbH with retrospective effect from October 1, 2013. These acquisitions significantly extended the range of services in the areas of construction logistics, electrical installations for construction sites, energy supply, modular room systems, and mobile materials testing and represent a further step in the sustainable reinforcement of Zeppelin's competence in solutions to enable customers to process their projects even more efficiently. In July 2014, the Rental business unit concluded an agreement with Ramirent A/S to establish the joint venture Fehmarnbelt Solution Services. As a result, the skills and resources of two leading European rental service providers in supporting large construction sites have been pooled for the major international project "Fehmarn Belt Fixed Link".

In September 2014, the Power Systems business unit concluded an exclusive partnership agreement with Norwegian company Optimarin AS for the sale of system solutions for regulating ballast water. The business unit also obtained distribution rights for gas engine sets from Caterpillar Energy Solutions GmbH.

New organizational structure for Plant Engineering

The restructuring of the Plant Engineering business unit was largely completed in the 2014 fiscal year. Processes were optimized, core competencies pooled at the relevant production sites, and management levels streamlined. A necessary adjustment of staff numbers was carried out in a socially acceptable manner without redundancies. The business unit achieved positive earnings from its operations once more in 2014. In addition to the successful restructuring program, the Group also appointed an outstanding industry expert to the top plant engineering management position.

Strong partnership

Zeppelin and Caterpillar celebrated the 60th anniversary of their partnership in 2014. In a ceremony at the Colosseum Theater in Essen, both companies pledged to continue their cooperation based on trust and respect. Caterpillar also awarded the Zeppelin Group the title of "Best Sales and Service Partner in Europe" for the second time in a row. The Construction Equipment EU, Rental, and Power Systems business units were joint winners, and the Construction Equipment EU business unit was also honored for its business success with used machines. Zeppelin's excellent result in Caterpillar's customer loyalty survey, in which the Group came first for the whole EAME region, is also worth highlighting.

Outlook for 2015

Prospects for 2015 are modest. In view of the current developments in Russia and Ukraine, the Zeppelin Group does not expect the economic conditions in these count¬ries to improve and is forecasting a further reduction in business volume. The reluctance to invest in shale gas exploration due to the trend in oil prices is having an adverse effect on the project situation in plant engineering in the USA and Eastern Europe. The raw material extraction markets will also remain at a low level in 2015. The construction equipment business area and energy sector are expected to develop positively in Europe, bolstered by the need for investment in infrastructure and pressure to act from governments. Increasing flexibility and the trend towards short-term rental harbor great potential for the Rental business unit. The short-term rental business in Russia will be incorporated into the existing sales and service organization in 2015 and resized as a result. 

In 2015, the Zeppelin Group will focus particularly on continuing to integrate the recent acquisitions and increasing efficiency with the aim of further expanding its position in the market on a sustainable basis.