Foreword
Dear shareholders, customers, employees and partners,
2022 saw the 25th anniversary of Hydratec Industries going public: a special milestone that we celebrated to the full. In September, for instance, we marked our anniversary with a well-attended family day for our employees and their families. We gave our loyal shareholders an inside look at two of our companies in November, and on 10 November, we had the honour of opening trading on the Amsterdam Stock Exchange with a gong strike. Looking back, we see that thanks to the commitment of our employees and the trust of shareholders and customers, Hydratec has enjoyed solid, consistent development over the past 25 years. It gives us reason to be proud of what we have achieved while offering confidence in the future.
A turbulent year
Our society is going through a turbulent period. In January, we left the last Covid-19 lockdown behind us and started out with renewed enthusiasm and ambition. But Russia unexpectedly invaded Ukraine in February, which plunged Europe into an international energy crisis, resulting in soaring gas and electricity prices. Supply chain issues arose again, which we had expected to be largely resolved. Inflation soared during the year to its highest point in decades. Wage costs rose, and fears of a recession grew.
“We again achieved higher revenue in 2022, which produced a record net result”
All these developments directly or indirectly affected our performance. Our revenue in Russia and Ukraine understandably collapsed, but our order books were well filled, which enabled us to compensate for this minor loss in other regions. However, orders were distributed differently across our markets compared to previous years. For instance, Mobility got off to a promising start in 2022, but the market suffered another global chip shortage later in the year. The Food market grew significantly due to the importance of chicken as a foodstuff and the need for the availability of water. The future still looks promising for Health, although we have noticed that the speed of developments is determined by technical challenges to a significant extent. We are in a promising position to find solutions to those challenges in partnership with our customers. All in all, our revenue increased over the whole year, once again resulting in record revenue.
Problems in the global supply chain again led to rising prices, which were difficult to pass on under existing agreements. Long and above all unreliable delivery times led to disruptions, higher inventory levels and shrinking margins. This culminated in a final result similar to 2021, despite the increased revenue. Given all the circumstances, this was a satisfactory result, even though we fell short of our target.
Opportunities for innovation
Current societal and economic challenges also present opportunities: rising energy prices and increasing shortages of materials and labour lead to a growing need for raw material savings and automation. Our focus on innovations to reduce waste encourages customers to choose our solutions. We collaborate intensively with knowledge centres, universities and suppliers, and continuously look for ways to improve our products and production processes.
"We continuously look for ways to improve our products and production processes"
Tight labour market
Our work relies strongly on the expertise and employability of our employees. We have a clear interest in retaining and attracting employees for our organisation. Although we were still always able to find new colleagues last year, it took noticeably longer than in previous years. We used every conceivable channel to attract potential talent in 2022, such as an open day in Dedemsvaart, a challenge among technical students in Tilburg and a ‘Kies Techniek’ (Choose Technology) day in Doetinchem. As a result of these efforts, the labour market issues did not cause any problems, although work pressure was high at times. We are convinced that the tangible engagement of employees and their valuable influence on the organisation’s results is essential in today’s dynamic situation. The decentralised organisation has shown itself to be a good structure in the current market conditions. We are therefore continuing our efforts to further increase employee engagement. We also continue to invest in young talent with instructive and exciting traineeships and internships that offer job prospects.
Dividend
We are pleased to have seen an increase in the net result despite exceptional macroeconomic conditions and propose a dividend of €6.00 per share for 2022. We expect many of the turbulent developments from last year - the war, inflation, and problems in the supply chain - to continue into 2023, but for the shock effect to reduce. The order book is well filled.
We would like to take this opportunity to thank all our colleagues for their sterling efforts, flexibility, passion and dedication. We are grateful to our customers, partners, Supervisory Board members and shareholders for their confidence and support as we continue to develop Hydratec Industries.
Bart Aangenendt, CEO
