12/05/05

3. Business Year 2004 of the Würth Group (detailed version)

  • Würth Group increases sales by 13.8 percent to new record value of EUR 6.203 billion
  • Operating result goes up by 19.7 percent to EUR 395 million
  • Equity ratio remained unchanged at 48.0 percent
  • An additional 5,021 employees hired worldwide

Künzelsau/Hohenlohe Region. “With a sales leap of 13.8 percent and an operating-result increase of 19.7 we have even exceeded our own expectations. The fact that the profit rose even faster than the sales underlines the sound growth course of our 60-year-old company.” With these words, Dr. Walter Jaeger, Chairman of the Board of Directors of the Würth Group, commented on the annual financial statement of the financial year 2004 at the corporate headquarters in Künzelsau-Gaisbach. According to Dr. Jaeger, the consistent expansion of the worldwide sales activities linked with the recruitment of 2,597 new sales representatives and 2,424 internal employees have contributed to the company’s success.

The worldwide biggest company in the field of fastening and assembly technology increased the consolidated Group sales by 13.8 percent to EUR 6.203 billion (previous year: EUR 5.45 billion). Adjusted for the effects of exchange-rate fluctuations and company acquisitions the total sales of the Würth Group went up by 10 percent.

With EUR 395 million (preceding year: EUR 330 million), the 314 companies of the Würth Group also generated a new record in terms of profit before tax and thus exceeded its old record of EUR 330 million of the financial year 2003 by 19.7 percent. Compared to the preceding year, the net income for the year went up by EUR 39 million to EUR 258 million.

On account of acquisitions, higher growth rate in Germany than abroad

In contrast to the previous years, sales in Germany went up faster than abroad in financial year 2004. The German companies generated 14.6 percent higher sales reaching the level of EUR 2.5 billion (previous year: EUR 2.2 billion).This growth can partly be put down to acquisitions, which in all make up annual sales of EUR 161 million. Adjusted for acquisitions, sales in Germany rose by 6.8 percent despite the difficult economic conditions. Among the companies acquired in Germany are the Nuremberg-based electrical wholesaler LICHT Zentrale Thurner GmbH and the Wuppertal-based DIY World GmbH, which supplies DIY stores across Europe. 40.7 percent of the EUR 6.2 billion generated by the Würth Group worldwide have been achieved by the German companies.

The foreign share in the total sales of the Würth Group amounted to 59.3 percent (previous year:. 59.6 percent). Outside Germany, the sales volume increased by 13.2 percent to EUR 3.7 billion (previous year: EUR 3.3 billion). Adjusted for the effects of exchange-rate fluctuations and acquisitions the growth rate of the international Group amounted to 12.1 percent. The business in the USA developped particularly well: The 18 US companies stepped up their sales by 32.2 percent to US$ 763 million solely by organic growth. While the share of the US business in the total Group sales was still at 1.4 percent ten years ago, it has meanwhile risen to some 10 percent.

Strongest Growth in Allied Companies and Industry Division

The sales growth of the Allied Companies, those companies not trading under the Würth name and mainly operating as trading companies in similar business fields, amounted to 22.4 percent, and was above that of the Würth Line totaling 8.7 percent. With EUR 3.7 billion (previous year EUR 3.4 million), the Würth Line contributed 60.3 percent to the total sales, while the Allied Companies acheived EUR 2.5 billion (preceding year: EUR two billion) corresponding to 39.7 percent. The Würth Line comprises 120 out of the total of 314 companies of the Würth Group, all of them are trading companies in the field of assembly and fastening technology. Among the five divisions of the Würth Line the Industry Division attained the highest growth rate with a sales increase of 29 percent to EUR 391 million.

Cash flow, equity and capital expenditure go up

The equity of the Würth Group went up to EUR 1.734 billion. The Würth Group thus still has an impressive equity ratio of 48 percent (preceding year: 48 percent) with which the company is far above the average of European trading companies. The gross cash flow rose from EUR 431 to 487 million, capital expenditure in tangible assets, intangible assets and financial assets grew by EUR 20 million to EUR 237 million.

According to the latest assessment of the financial situation of the Würth Group, that was again carried out by the rating agency Standard & Poor’s, the credit standing and the development of the company are positive and, as before, the agency confirmed the former rating “A / Outlook stable”.

5,021 additional employees

In the past five years, the number of employees in the Würth Group went up by more than 15,000. As of 31 December 2004, the number of employees increased by 5,021 from 41,952 (2004) to 46,973. This corresponds to an increase of 12 per cent.

“We consider additional employees to be an investment in our future success and an opportunity to open up new accounts and markets. For with a worldwide market share of some four percent, Würth has by far not exhausted its growth potential", Dr. Jaeger states.

“With over 5,000 new employees, sales, logistics and internal departments have the necessary resources to convince more customers of the quality of our products. So the foundations for the further success of Würth have been laid”.

1,395 of the 5,021 new jobs have been related to the companies acquired. Due to theses acquisitions the number of in-house staff grew faster (20,888 / + 13.1 percent) than the number of sales representatives (26,085 / + 11.1 percent). In Germany, there were 8.6 percent more employees on the payroll (13,941), abroad, the number went up by 13.4 percent to 33,032.

Partner to the Craft

It is with great concern that the Würth Group observes the difficult situation of the German craft, the most important customer group of the company. Therefore, Adolf Würth GmbH & Co. KG choses the motto “Ein Hoch dem Handwerk“ (Three Cheers for the Craft) for its anniversary year 2005. Würth wants to be a reliable partner to the German craft, which for years has been fighting against stagnating or declining sales, and it wants to help them find a way out of the crisis. On the occasion of the anniversary celebrations, Reinhold Würth presented the craft magazine “manufactum”, analyzing and offering opportunities, profiles and solutions to the craft.