28/02/05

60 years of Würth - a worldwide success story

Künzelsau. When, in 1945, Adolf Würth set up a screw wholesale business in Künzelsau (district of Hohenlohe), he could probably never have imagined this business to cover five continents one day. 60 years later, more than 47,000 Würth employees generate sales of more than six billion Euro in 80 countries of the world. It is only a handful of companies that can look back on such a dynamic and at the same time consistent development: ever since its inception, Würth has been in the black and with one exception only (business year 1975) succeeded in increasing its sales volume year after year - and more often than not with double-digit growth rates.
After the early death of his father, Reinhold Würth took over his father's business in 1954; the development of Würth enters a new stage: the two-man business grows into a group of trading companies, selling fasteners and assembly material all over Germany. Encouraged by his success at home, Würth ventures abroad pretty soon: in 1962, a business is set up in The Netherlands, quickly followed by other European countries. The first company in the US is established in 1969. On the occasion of the 25th company anniversary, sales increase by 50 per cent to 32.9 million Euro, and Würth starts its first business in Africa. Australia follows in 1981, and with new foreign subsidiaries in Japan and Malaysia, Würth is finally represented on all five continents of the world. In 1989, sales exceed one billion Euro, and the operating result, too, can keep pace with this speedy growth.

Tried and Tested for 60 Years: the Würth Success Model

The business model has not changed profoundly since 1945, but the range has: Würth no longer only sells screws, but more than 100,000 products in the field of fasteners and assembly technology. One important success factor of the Würth Group is its many small, powerful and flexible units. The Würth sales force with more than 26,000 sales representatives worldwide services more than 2.5 million professional customers from Argentina to Australia, the majority of which being craft businesses and medium-sized companies working in many industrial sectors, from the large automotive workshop to the ornamental carpenter. Therefore, the average order value is relatively low at approximately 200 Euro. Reinhold Würth considers this to be the decisive success factor: "We are lucky enough not to be dependent on large customers." Owing to the fact that Würth is active in many different industries, the business is less sensitive to cyclical influences - an indispensable element of the company's growth over the last 60 years.
The business with "small parts" is a big challenge, too: highly motivated employees, highly sophisticated logistics and fine-tuned marketing are necessary to generate sales of 6.2 billion Euro with such low order values. It has certainly helped tremendously that Würth in the last 60 years has succeeded in making a name for itself concerning competence, quality and closeness to customers. Würth uses this closeness to its customers to find out more about their needs and requirements so that they can be fulfilled completely. It is not only the product range that has been expanded continuously over the last 60 years; Würth is also setting new standards in the industry all the time.

Another success factor is the company's corporate culture that is inextricably linked with Reinhold Würth. Being the role model and exemplary entrepreneur that he is, Würth not only embodies the principle of performance that is deeply rooted in his business. An attractive salary system, a performance-oriented bonus system and as much leeway as possible motivate the staff to do exceptionally well. Social commitment and sponsorship of the arts, culture, science and sports, also by Reinhold Würth personally, constitute an important element of corporate culture that not only provides a pleasant working atmosphere, but also helps the staff to identify with "their" company and shapes human relations also beyond the confines of the business proper.

Family Foundations Safeguard the Company's Future

Focusing on the future of his business, Reinhold Würth started to deal with his succession at a very early point in time. In 1994, he withdrew from operative management and delegated responsibility to a now five-member management body, his daughter Bettina Würth being one of them. As early as 1987, Reinhold Würth transferred the assets of the company to five family foundations to safeguard the continued existence of the Würth Group for generations to come. An experienced and capable management team in place for many years and clearly defined supervisory and controlling bodies in the form of a foundation supervisory board and a company advisory board make sure that the Würth Group can continue its success story way into the future. For ten years now, the Würth Group has been given an A rating by the rating agencies Standard & Poor's and Fitch. For the business year 2004, Standard & Poor's has confirmed the rating "A/outlook stable" to the Würth Group.