Strong together, for the future
Chairman of the E/D/E Management Board
E/D/E Managing Director
Member and Supplier Management, Tools, PPE/Technical Trade, Construction
E/D/E Managing Director
Building Services, Steel, Logistics, Construction Equipment
E/D/E Managing Director
Digital Services, Marketing, E-Business/E-Commerce
E/D/E Managing Director
E/D/E Managing Director IT
The year 2022 was marked by the effects of the Ukraine war and the resulting crises, some of which were characterised by a certain overlap. Therefore, it was also a challenging and eventful year for the industrial B2B sector. In this environment, we reacted flexibly and were thus able to seize the opportunities that were offered to us together as an association. In many sectors, we successfully generated growth with stable demand.
Our trading volume increased by EUR 2.1 billion compared to the previous year, to a total of EUR 9.68 billion. This was the result of a robust goods business, growth in international business and a highly dynamic development of the ETRIS BANK in buying association business.
In our core area of goods, trading volume in Germany and in Europe grew at approximately the same rate of around 4 percent. In 2022 we achieved a trading volume of EUR 2 billion outside Germany, corresponding to 20 percent of overall trading volume. The main share of international growth came from the Netherlands, Austria, Spain and Poland. With a turnover of approximately EUR 356 million, the warehouse business once again achieved a new record.
The product groups developed differently in 2022: on balance, the year began with strong rates of growth, but from the second half of the year, especially in the winter months, growth slowed down. In the construction sector, E/D/E recorded a high level of orders from its members. The craft sector, in particular, enjoyed good business even in the weaker second half of the year thanks to high order backlogs. Additional growth impulses come from the areas of energy-efficient construction measures, as well as refurbishment and upgrading. In the course of fairly robust overall economic development, the industrial business was stable in 2022. However, business was fraught with uncertainty for customers in the energy-intensive industries.
From the summer onwards, the reluctance of private consumers to invest led to a decline in retail sales, which was also noticeable in the sanitary and installation sector. Steel trading achieved significant double-digit trading volume growth for the second year in a row. The war in Ukraine and the sanctions imposed on Russia as a result led to a tightening of steel supplies worldwide, and initially caused prices to skyrocket. E/D/E members also allocated and stored large quantities in the first half of the year. Then, in the second half of the year, a high level of supply met low demand, and steel prices fell.
Business in the sectors of industrial B2B continued to be characterised by disrupted supply chains, as well as uncertainty regarding energy supply. Price increases also influenced the trading volume. As the E/D/E, we offer our members – unlike the conditions under which we all operate – stability. The consolidated net profit was EUR 21.7 million, significantly above the level of the previous year. As we retained the majority of this amount, equity grew to EUR 456.2 million. This highly desirable position means that we are well-established and able to make the investments necessary for the SME industrial B2B sector – particularly in the area of digitalisation. At around EUR 188 million, reimbursements to our members were significantly above the level in 2021.
The ETRIS BANK continued its expansion course and exceeded the ambitious growth targets set for 2022. The business volume in central payments for third-party buying associations rose to EUR 1.46 billion. Once again, this level of success is proof of the bank’s professional and forward-looking alignment of its activities. Within factoring, positive growth was also clearly recognisable; the factoring volume processed in the financial year amounted to EUR 499.7 million. With its banking services, the ETRIS BANK meets the needs of today’s business world, and creates security within the association. The reorganisation of the Management in autumn 2022 will also lead to a further strengthening of its strategic orientation.
We are also delighted to report the consistently positive development of our Toolineo online marketplace. For the second time in 2022, the number of traders represented there – now more than 50 – and the order value generated via Toolineo registered an increase. The number of items on offer also increased significantly. In line with our objective, we have worked to further consolidate the trader network and make comprehensive improvements to the marketplace’s IT infrastructure – to serve the customer even better, optimise processes and make it easier for traders to offer their goods and services. The trading volume via our members’ multishops also registered a positive development. As has been the case for a number of years, the volume traded via the multishops continued to grow in the double digits in 2022. Procurement platforms such as Ariba and Coupa, in particular, are becoming increasingly popular with buyers and sellers. The e-procurement channel of the multishops and the demand registered via the direct OCI connection from the industry’s procurement systems also continue to grow disproportionately. It is evident that our members are professionalising digital sales and consistently expanding multi-channel strategies, in order to provide their customers with organised purchasing processes and, in this way, efficiently strengthen digital sales with the support of the solutions offered by E/D/E.
A significant proportion of our partners would like to further develop their online shops in 2023. As such, we have implemented and initiated numerous innovation and digitalisation projects at E/D/E in the last year. In addition, new solution partnerships continue to strengthen our digitalisation efforts. We have strengthened content marketing, in particular, in the various social media formats, as well as online portals.
Successful e-commerce is based on strong digital processes running in the background. Effective data management – up-to-date, quickly available and prepared in a structured manner – has long since become a strategic success factor for companies. As to how the benefits for the industrial B2B sector can be further increased was the subject of lively discussion at our industry and user meetings this year. E/D/E is investing in existing platforms, in order to constantly develop further, and it is creating offers based on the latest technologies that are met with a resounding response. Demand for our solution offerings, such as ERPcloud360, remains high. The cloud-based system nextPIM also got off to a successful start. Thanks to the PIM system, retailers can efficiently optimise their product data management. More than 25 new installations speak for themselves.
Our goal of comprehensively maintaining industrial B2B sector ranges in the eDC structure took on real shape in 2022. With the new E/D/E data portal as an innovative “Data as a Service” offer, the industrial B2B sector will, in future, enjoy cloud-based, simple and intuitive access to all relevant data. The new approach to data derivation is part of our IT master plan. This creates added value for partners and real prospects for growth for the E/D/E Group through the development and implementation of a high-performance IT infrastructure along the requirements from the industrial B2B sector. Part of this master plan also involves the launch of our Digital Partner Management. In doing so, we are creating the conditions for holistic member management.
The implementation of one of ETRIS BANK’s most important projects was also possible with the help of the modern technical infrastructure in 2022: the complete takeover of the central payment operations for MITEGRO, a cooperation of eleven medium-sized and owner-managed electrical wholesale companies in Germany and Austria with more than 250 locations.
The E/D/E trading volume increased by EUR 2.1 billion compared to the previous year, to a total of EUR 9.68 billion. This is the result of the triad of a robust goods business, growth in international business and a highly dynamic development of the ETRIS BANK in buying association business.
The processes in the industrial B2B sector are changingrapidly and so are the demands on the association and distribution. E/D/E enables its members to seize the opportunities inherent in the process of change. One example is the division of building components: here, door elements and the corresponding technology are increasingly being planned in one single step. With the newly founded ELEMENTec specialist group, we are specifically addressing distributors with a core competence in the specialist area of construction elements, thereby creating a new service area. In the area of building services, we have established a hybrid training programme on renewable energies, and have already trained 500 professionals. In Plumbing, Heating, and Air Conditioning wholesale, end consumers today are using a variety of digital sources which provide them with precise ideas. With the digital bathroom assistant BADDY, we are replacing paper- and catalogue-based planning at the distributors, and are instead providing support for digital bathroom planning and quotation preparation.
The organisation of market-relevant supply systems for industry and trade is part of the E/D/E vision for the future. E/D/E’s strengthened service portfolio in the area of supply networks/industrial services goes hand-in-hand with a market development in which individual supply concepts and sustainable solutions are increasingly in demand. With ETT BASIC, we have already taken a successful step towards output solutions for the craft sector in 2021. Our new ECO-Consulting module is also catching on. With this service, the buying association is supporting its members in the area of sustainability. Our newly designed eFabrik (eFactory) in our presentation centre in Wuppertal is very popular. There, the systems and solutions of E/D/E and its partners can be experienced on site along the entire value chain.
In international markets, we were repeatedly able to win new cooperation partners, members and suppliers, and to further expand our numerous sales activities. Our partners appreciate our strengths: the diversified distribution of product groups and the international orientation of the E/D/E Group again proved to be major strengths. It is our ambition to intensify international cooperation along the entire value chain. We are driving the strategic realignment forward, in particular, with the digitalisation of our sales concepts.
Personal encounters at home and abroad have taken on a new significance. We are glad that we were able to return to in-person sales support last year. E/D/E continues to use the added value of hybrid cooperation. Thus, we have succeeded in combining the best of both worlds in numerous events such as the “Branchentreff total”, the “Forum Bauelemente” and the sales forum “Arbeitsschutz und Technischer Handel”, as well as various training courses.
E/D/E has not only been intensively involved with the “new working worlds” since the onset of the Coronavirus, because these were already part of our EVOLUTION process at an early stage. For many of our members, the topic was (and remains) on the agenda. Hybrid working models, for example, create the right framework so that employees can efficiently complete tasks with greater personal responsibility and flexibility, all adapted to the individual situation. The stated goal: to further increase performance and innovative strength in the interests of the members, and to position E/D/E as a sustainable employer. The E/D/E AKADEMIE is also embracing the topic in terms of methodology and content, in the form of numerous learning formats.
The outlook for German economic development in the coming year brightened a little recently. Economic activity is forecast to grow at a low rate in 2023.
Nevertheless, the coming financial year remains to be characterised by influences that are difficult to predict. According to our estimates, the order situation in the craft sector and industry will stagnate. For the construction sector, the E/D/E Group expects impulses from public construction and renovation projects, while development in residential and commercial construction is expected to decline. We assume that the issues pertaining to the availability of goods and supply chain difficulties will continue to affect business in the industrial B2B sector this year. Investments in energy efficiency measures are becoming more important. In the field of energy renovation, we see participation opportunities for the medium-sized industrial B2B sector. On balance, we expect lower growth for the industrial B2B sector in 2023 compared to the previous year, and a weakening earnings situation.
With due caution, the E/D/E Management looks to the future with confidence. Our strategic and organisational development process EVOLUTION continues to be the benchmark for the further transformation of the association. The guiding theme for 2023 is: “Growing sustainably together and driving forward digitalisation”. We are and will remain a reliable partner and work consistently on making the industrial medium-sized B2B sector simpler, more digital and more resilient. We will develop the service portfolio in a manner that is appropriate to the market, effectively slim down our processes, and optimise our logistics on a proactive basis. The latter is an essential leverage to reduce the legal costs of our members. Thanks to new partnerships – both nationally and internationally – we believe that the buying association is well-positioned for sustainable growth. Overall, the E/D/E Group forecasts that the trading volume will grow by 5.9 percent to EUR 10.3 billion in 2023. The ETRIS BANK continues to expect a strong buying association business, as well as an increasing business volume in factoring.
Thus, the ETRIS BANK remains a driving force behind the successful development of the entire E/D/E Group on the basis of a stable product business.
Only by working together as an alliance were we able to achieve this growth in 2022: we would like to thank our members, suppliers and cooperation partners for the close process of exchange and the trust they have placed in us. In particular, we would like to express enormous gratitude to our employees who, even in another challenging year, did their utmost for the association with incredible commitment, loyalty and responsibility. They are the ones who shape E/D/E!
The Management Board
Einkaufsbüro Deutscher Eisenhändler GmbH