Traditionally, every year and for the past several years, at the close of the financial year, I have addressed the shareholders of Carraro SpA. In the summer of 2021, however, the process of our exit from the stock exchange was successfully concluded, with the aim of proceeding with a reorganisation of the Group to further strengthen it in a way more easily pursued as an unlisted company.
With this in mind, today, I want to broaden my horizon by addressing all of our stakeholders, that is, the key partners who have always been at our side: employees, customers, suppliers, financial partners and institutions.
In 2021, our Group returned to significant growth, both compared to a 2020, heavily impacted by lockdowns and especially compared to 2019, the true benchmark. This was a decisive change of pace.
We recorded volume recovery in virtually all of our target markets. The agricultural sector was driven by the increased financial power of operators, thanks to rising prices of the main commodities. Construction equipment, on the other hand, benefited from the significant sales boost from investments in works and infrastructure put in place at every latitude.
All this saw the Group increase sales by more than 34% compared to 2020 (more than 17% compared to 2019) and achieve a net profit of over 10 million euros. These results are an acknowledgement of our ability to maintain and foster strong business relationships - and beyond - in both traditional industries and new application areas.
Worthy of mention, for example, is the contract agreed with INEOS, concerning axles for the Grenadier off-road vehicle, which will come into full swing this year with production start-up at our Maniago (Pordenone) plant and which has already allowed us to boost our skills, further improving in terms of quality and processes. As too is the recent strategic agreement signed at the beginning of the year with CLAAS, one of the main global manufacturers of agricultural machinery, which, on the one hand, will see us expand the range of specialised tractors we already produce for this brand and, on the other, will allow us to increase axle and transmission volumes.
These are just a few representative examples of a still buoyant market that experienced a particularly positive 2021, and that could have further realised its potential had it not been hampered by significant increases in the prices of raw materials, scarcity of the same, and rising transportation and energy costs.
Critical issues for which there does not appear to be a quick solution today, not least because of the conflict raging in Ukraine in recent months. A dramatic situation for millions of people, a human tragedy that will inevitably have consequences on geopolitical scenarios as well as on the global macroeconomic order. No one today is in a position to make accurate long-term forecasts even though, from our perspective, despite the uncertainties just noted, we see our main target markets maintaining their solidity.
In this context, our Group is looking decisively to the future, working intensively on new technologies that will enable us to be ready to offer product solutions that meet the expectations of tomorrow's markets. Focussing on efficiency and reduced environmental impact, whether it be a single gear, a transmission, or a specialised tractor. Or a hybrid or electric drive system managed by advanced “made in Carraro” electronic control units.
Innovation therefore remains central for us, and also in 2022, we will invest more than 30 million euros in R&D. Just as we will dedicate significant resources – more than 40 million euros – to the development of increasingly interconnected production processes with a 4.0 approach, consistent with the digital transformation process that is shaping the entire Group. Because the factories of tomorrow cannot fail to evolve in this way, in a way that moreover will also increasingly involve our workforce. In both offices as well as factories. But true innovation necessarily involves a sustainable approach, sustainability being the essential cornerstone of our growth path.
And for us, sustainability means really focussing on people, in line with the change management evolutionary process that we have been engaged in over the last two years in the Group, with the aim of building an organisation ready to meet the challenges of tomorrow. An agile organisation based on a culture of listening and initiative, with our Founding Values at the heart of everything we do.
And to accelerate this process, we have decided to invest heavily in growing internal broad-based skills, and for this reason during 2021, we designed and launched the major "Carraro Business School" project (in collaboration with Bologna Business School), with the aim of developing both the technical and management skills of Carraro people, and the "Academy for Professionals", to boost the specific product/process knowledge of our factory employees.
We therefore have a challenging historical period ahead of us. On the one hand, the new-found vitality of markets to which we can respond with our ability for real innovation. On the other, the complexity of the supply chain and the exponential growth in energy costs. All this within a scenario which sees us facing the unknowns that the conflict on Europe's doorstep may bring about.
Precisely because of this complex scenario, never before has it been more crucial to further strengthen existing relationships with all our partners who have contributed to our growth over the years. Side by side, sharing the same goals with a long-term horizon.