ESG

Automobile Business becomes Engine of Growth of Largely Defence-Oriented ESG

ESG Elektroniksystem- und Logistik-GmbH, one of the most successful IT partners of the German armed forces and the automobile industry, achieved total sales of € 143 million last year. This means that the system and software house continued to grow in 2002 by 13.5 per cent (previous year: € 126 million). New orders totalled € 134 million (previous year: € 117 million), and the number of employees has risen from 916 to over 1000 in the meantime. Thus ESG clearly surpassed its targets for 2002. The company is expecting a turnover of approximately € 150 million in 2003.

Gerhard Schempp, ESG’s CEO, attributes the Company’s continuing success to a number of reasons. “One important success factor is the technology transfer, as practised at ESG, between high-quality military and commercial projects. This and our approach to commercial markets, in particular the automobile industry, have so far made ESG largely independent of the cuts in defence spending and the current crisis in the information technology and communications sector. Added to this is that we define IT as the ‘integration of technologies’. Our electronic and software systems are part of our customers’ high-tech products and not part of their overheads.”

In 2002 ESG earned approximately two thirds of its total turnover from its military activities. The turnover here was € 98 million. Incoming orders amounted to € 91 million (an increase of € 9 million). ESG’s principal customer continues to be the German armed forces. The most important military projects at ESG in 2002 were the development of the HEROS-2/1 Batch 2 computer system, the operation of logistic systems for the German armed forces and the development of new technologies for combat aircraft.

ESG achieved more than half its growth in 2002 with non-military projects. Turnover in this sector rose by almost 30 per cent to € 45 million. The largest non-military category at ESG is its automobile business, which is thus developing into an engine of growth for ESG. Its customers in the automobile industry include BMW, AUDI, DaimlerChrysler, Opel, Volkswagen and Ford and numerous component makers. For these customers, ESG develops and integrates electronic and software systems, supports prototype and production vehicles, provides process advice and trains service personnel.

In the next five years ESG intends to double its turnover in the civilian sector. Total turnover is at ESG planned to exceed the € 200 million mark by 2007. One of the factors for achieving this is the expansion of ESG’s services for the automobile industry to include international customers. Furthermore, ESG intends to play a more active role in civil aviation. ESG will also intensify its 40-year relationship with the German armed forces.

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