The Würth Group’s first quarter of 2009: sales decline while operating result remains positive
Künzelsau. The multinational Würth Group recorded a considerable sales decline in the first three months of the 2009 fiscal year. Nevertheless, the company still managed to generate a positive operating result in the first quarter.
Robert Friedmann, Chairman of the Central Managing Board: “Our customers all over the world have been affected by the crisis already since late last year. Of course, this is also having an effect on our business development. We are expecting a sales decline in the Würth Group also for the overall year. To actively combat the crisis, we are developing the markets individually with our sales force, expanding our customer base especially in the current situation. At the same time, we are cutting costs with care and consideration in order to maintain a positive operating result even with decreasing sales."
From January until the end of March 2009, the Würth Group’s sales volume decreased by 16.1 percent compared with last year’s first quarter against the backdrop of the worldwide financial and economic crisis. Another negative factor have been the extraordinarily severe winter months of January and February in Europe as well as a decrease of the invoicing days by 0.4 days in the first quarter, which are of key importance for the Würth Group.
Despite the sales decline, the Würth Group was able to generate a positive operating result of EUR 32.4 million in the first quarter of 2009 (2008: EUR 162 million).
For 2009, the Würth Group is expecting a sales decline which will be between 10 and 20 percent on 2008, depending on the development of the global economy. “It would not be reputable to give a valid prognosis. We expect a potential recovery for 2010 at the earliest,” according to Mr. Friedmann.
Getting through the crisis by stepping up liquidity
In the midst of the crisis, the company is relying on intensive liquidity management and an offensive sales force geared towards expanding the customer base worldwide.
“Cash is king! Liquidity is of paramount importance. As of the end of March 2009, the Würth Group has approximately EUR 270 million in liquid funds. Safeguarding our financial standing is the prime objective of the entire Group,” says Mr. Friedmann. Investments requiring liquidity will have to bring about competitive edges very quickly. At the same time, costs are being cut throughout the group of companies. The entire Würth Group imposed a hiring freeze quite a while ago. As of the end of March 2009, the number of employees working for the Group has shrunk to approximately 60,000 worldwide.
The over 400 companies of the Würth Group are implementing the necessary cost-cutting and rationalization measures all over the world. “We think conservatively and are taking serious countermeasures across the board in this difficult situation, always with the consideration that as many jobs as possible be saved. Our objective is safeguarding the future of the company and jobs,” explains Robert Friedmann.
Getting through the crisis by resolutely utilizing sales opportunities
Despite a slowdown in economic activity, the Group considers broadening its customer base to be a catalyst for considerable growth opportunities. “We remain ambitious. If we shrink less in the crisis than the competition, we will gain market shares. Therefore we are focusing all our strength and capital expenditure on customer service and customer acquisition. We are in good shape and will be one of the first companies to take advantage of an improvement of the economic situation,” according to Mr. Friedmann.