Phoenix Contact increases its revenue by 20 percent: high growth consistent worldwide

At the press conference on the occasion of the SPS automation trade fair in Nuremberg, Germany, Ulrich Leidecker, Chief Operating Officer at Phoenix Contact, talked about the company's economic development. Despite the continued tense situation in the raw materials markets and energy market, the results of Phoenix Contact will be outstanding. It currently appears that Phoenix Contact will close the 2022 fiscal year with revenue growth of approx. 20 percent and total revenues of €3.58 billion. “Growth in all of our key regions, including Germany, Europe, the Americas, and Asia, will continue at a high level of around 20 percent. All areas of our business have developed equally positively. Worldwide, the number of Phoenix Contact employees has risen to almost 22,000.”

Leidecker described the war in the heart of Europe as a situation with far-reaching consequences: “The impressions it has made on us personally and on Phoenix Contact as an internationally active company have not gone unnoticed.” Due to the continuing military attacks, Phoenix Contact has sold its Russian subsidiary and abandoned its business activities in Russia. “That was not an easy decision, as our company Group is in family hands and we all feel very connected to each other. However, these underlying values are precisely what moved us to take that step,” said Leidecker. Due to the impact on the energy supply, the company has been preparing itself for various scenarios for a long time in order to safeguard its supply of power and heat with an emergency plan.

The biggest challenges continue to be on the material supply side. The tense situation in the semiconductor market, which dominated last year, also limited production this year and led to delivery problems. “On the other hand, we are experiencing a significant increase in demand – partly driven by the shortage – that has led to unheard-of order backlogs,” explained Leidecker. This provides stability for sales in 2023 but also distorts the estimates of actual demand, keeping the situation risky.

Investments

Phoenix Contact is also making significant investments in 2022. The company will invest a total of around €240 million in buildings, tools, and machines worldwide. This year, one focus was the further development of the location in Blomberg. There, the investment for construction work alone will be around €40 million. In line with the situation last year, the worldwide investment sum would have been much higher if shortages had not continued to cause bottlenecks for machines and plants.

To give the company space to grow and develop further in the future, staffing levels have also become a focal area. “In conjunction with the shortage of skilled labor, demographic change will become a limiting factor. This problem is not limited to one industry. Instead, it affects all industries,” said Leidecker.

Sustainability in personnel development

For several decades, Phoenix Contact has relied on thoroughly training its own young talent. In the past two years, the number of apprentices and students in cooperative education programs has almost doubled, since training and cooperative education are key factors in countering the demographic change. Phoenix Contact is breaking ground in new fields such as e-mobility and cybersecurity, both characterized by strong growth and highly dynamic content-related changes. The only way for the company to maintain and expand this position is to continue to develop sufficient specific capacities. “Consequently, training is one of our roles in society that we are fulfilling on regional, national, and international levels,” said Leidecker. For example, Phoenix Contact has set up a new cooperative education program: Digitalization Engineering. It combines structures and areas of expertise from classical digitalization such as data models, networking, and algorithms with the still-real world of production and value creation.

Sustainability in the All Electric Society Park in Blomberg

On an area of 7,590 m², a new entrance is currently being built along the access road to company headquarters. The traffic circle at the location in Blomberg will become the new gateway to Phoenix Contact. It is connected to a new park in which the future vision of the All Electric Society (AES) will be made accessible and explained concisely to everyone. Using the flow of energy – from generation, through conversion, storage, and distribution, right through to its optimized use – the park will demonstrate how the AES can become a reality. Real applications show how sector coupling can function. The park will be a scaled-down reflection of the real world. Cubes made of glass for each application, open-field systems, and a pavilion with meeting rooms are all part of the exhibition areas of the AES Park. The park coneys a holistic image of how to consume resources sparingly by using existing technologies. Its hallmark will be a solar tree with a diameter of 12 meters on the traffic circle, rotating around its central axis to always be at the correct angle to the sun. The new gateway to Phoenix Contact will play an active role in the celebrations surrounding the company's 100-year anniversary and will be open to the general public.

Sustainability through power supply with renewable energy

Phoenix Contact has set itself the goal of mounting photovoltaic systems on the roofs of all German production locations by 2030 to continue increasing its supply of renewable energy-based power. Counting the roof surfaces in Blomberg alone, around 93,000 square meters are available. In the future, solar power will be produced on all the roofs at all Phoenix Contact locations in Germany and worldwide.

Not all roofs can carry the load of conventional photovoltaic systems. The alternative is lightweight modules, which have already been installed on the roofs of some buildings at the location in Blomberg. The flexible panels, with surfaces that intelligently refract sunlight, can be glued to the roof completely flat. With reference to the roof area of a building, their electric capacity is 750 kilowatt-peak (kWp). In the best case, they can produce about 700,000 kilowatt-hours of electricity per year. On balance, that would be enough to supply about 175 single-family homes with electricity in one year. The total capacity of all the roofs in Blomberg, which will be equipped roof by roof, will be between 7,500 and 8,000 kWp. All in all, it will be possible to generate 6.5 to 7.5 MWh of electricity there in the future. This is equivalent to a consumption of around 1,800 single-family houses.