The Würth Group's good start to the business year 2014 gives cause for optimism
- Increase in the operating result of 2013
- Equity capital grows by EUR 195 million
- Focus on further expansion of multi-channel sales
Künzelsau. "2013 meant for us: stagnating sales, but an increase in the result", Robert Friedmann, Chairman of the Central Managing Board of the Würth Group, sums up the business year 2013. The Würth Group generated sales of EUR 9.75 billion, which is less than in the previous year (2012: EUR 9.98 billion). After adjusting sales for the Group's solar activities, which had been dropped in 2012, the overall decline in sales comes to 0.1 percent. While the companies in Germany achieved an adjusted sales plus of 1.6 percent compared to the previous year, the adjusted sales result abroad was 1.4 percent below last year's level.
Germany remains most important single market
Again, the region generating the highest sales volume within the Group was Germany, reporting EUR 4.4 billion, which is a share of 45.2 percent in overall sales. Germany recorded a total operating result of EUR 226 million (2012: EUR 210 million) and is therefore the most profitable region.
Clear result growth in 2013
For Friedmann, the increase in the operating result is a positive sign indicating "that the cost-cutting measures and productivity increases have a noticeable effect". In 2013, the operating result was stepped up to EUR 445 million (2012: EUR 415 million). This corresponds to an increase of 7.2 percent.
Staff buildup 2014
In response to the drop in sales, the headcount at the companies abroad was adjusted in the past fiscal year. Overall, this resulted in a decrease in the number of employees worldwide to 63,571 (-2.5 percent).Given the positive economic development, however, an expansion of the sales force is planned for 2014. About 1,800 sales representatives are to be hired by the end of the year. In the first quarter of 2014, the staff numbers already rose by 834 employees as against December 2013; 360 of these employees are sales representatives.
The future of Würth lies in multi-channel sales
"We rely on linking up all our sales channels, i.e. the direct selling activities in the sales force, a close-knit branch office network as well as e-business activities and telesales. This offers us a unique range of opportunities that others still have to establish", says Friedmann. The e-business strategy was already developed further in 2013. In April 2014, the new online shop was taken into operation. The Würth App enjoys rapidly increasing user numbers each month, and the Click & Collect system also meets with a positive response. The interplay of all sales channels is the key to a successful e-business in the B2B sector. In the medium term, Würth intends to step up e-business sales to 30 percent.
The equity ratio grew to 42.6 percent (2012: 41.9 percent). In total, the equity capital amounted to EUR 3.4 billion (2012: EUR 3.2 billion). Rating agency Standard & Poor‘s currently awards the Würth Group with an "A/outlook stable" rating. Operative cash flow came to EUR 599 million; as of 31 December 2013, the Würth Group reported liquid funds of EUR 749 million (2012: EUR 572 million).
Large number of investments planned
Despite stagnating sales in 2013, Würth invested massively in the growth of its various business units and markets. With EUR 433 million, investments reach the same level as in past years. EUR 201 million were invested in Germany alone. In 2013, the Würth Group again financed all their investments from the operative cash flow.
Among other things, major projects in the business year 2014 comprise the construction of a new warehouse for UNI ELEKTRO Fachgroßhandel GmbH & Co. KG in Eschborn as well as the erection of new warehouses and administrative buildings for Würth Elektronik ICS GmbH & Co. KG in Waldzimmern, Würth Sweden and Würth Canada.
More market shares through acquisitions
Thanks to its subsidiaries, the Würth Group exports successful sales concepts to new markets. Targeted acquisitions complement the Group's organic growth. In February 2014, the Würth Group took over the South Korean company Korea Fasteners Limited. Korea Fasteners Limited sees to the sale of fastening material to industry companies.
In April 2014, the Würth Group acquired the company RL Industries, Inc., trading under the firm of Timberline Fasteners. Timberline Fasteners supplies industry companies with fastening material and tools. The company is based in Commerce City, Colorado (USA), thus rounding off the regional network of Würth Industrie in North America.
"Not only the business and economic outlook, and in particular the growth rates in the European markets, give cause for optimism, but also our own development in the first three months of the year." (Robert Friedmann) The Würth Group reported growth of 4.8 percent in the first quarter, with Germany reporting growth of 7.1 percent and the international Group of 3.0 percent.
The Group's growth is given in euro, which is why currency effects burden the growth of the international Group. If measured in local currency, the Würth Group's sales plus in the first quarter 2014 comes to 6.8 percent. In the business year 2014, the Würth Group strives for sales growth in the medium single-digit range as well as an operating result of more than EUR 500 million.
Robert Friedmann, Chairman of the Central Managing Board of the Würth Group, presents the Würth Group's certified annual financial statement for the fiscal year 2013 at the annual press conference.