19/05/10

Würth Group reports a smooth start into the business year 2010 - Positive operating result also in the year of crisis of 2009

  • January to April 2010: Sales plus of 6.3 percent, operating result of EUR 115 million
  • 2009: Positive operating result of EUR 235 million despite economically difficult conditions
  • Annual sales volume 2009 declines by 14.7 percent to EUR 7.52 billion
  • Focus on sales

The worldwide operating Würth Group started the business year 2010 with growth of 6.3 percent in the first four months of the year. “In spite of the long and rough winter which gripped Europe and North America in the first two months of the year we are back on track with double-digit growth in March and April. We want to step up annual sales by 8 percent”, said Robert Friedmann, Chairman of the Würth Group’s Central Managing Board, at the press conference on the annual financial statement in Zurich.

“We are still monitoring the global economic development in 2010 with great caution even though individual markets will certainly recover somewhat”, this is how Mr. Friedmann explained the prospects for the current year. “Despite this situation, we nevertheless intend to grow even further. We have done our homework as regards cost savings. We continue concentrating on intensive work in sales with the aim of not simply satisfying our customers but inspiring them also in 2010. If we want to grow we have to extend our customer base.“ This also included investing in further employees in the Group. Since the beginning of the year, the number of employees has increased by 953 to 58,835 employees.

The Würth Group’s operating result has also shown a pleasant development in the first four months of the year. Thanks to a clear increase over the previous year, an operating result of EUR 115 million could be generated in the first third of the year (+85.5 percent as against the same period under review last year), thus laying the foundations for further profitable growth.

Taking measures early on paid off

In spite of declining sales due to the economically difficult conditions, the Würth Group generated an operating result of EUR 235 million in the business year 2009. Robert Friedmann, Chairman of the Central Managing Board: “As expected, the economically difficult situation left its mark on 2009. We nevertheless managed to attain a definitely positive operating result. This goes to show that Würth is among the companies that showed successful and profitable development despite the crisis. Already reacting at an early stage and taking appropriate measures proved to be the right thing to do. Our strategy to cut costs and at the same time focus on sales paid off. In sales, we pulled out all the stops to gain additional market share. At the same time we prudently reduced costs. It also helps that we took the necessary precautions in the profitable years – for instance, we have always seen to an outstanding liquidity situation and a high equity ratio. We now benefit from it.”

The world market leader in the trade with fastening and assembly material generated a total sales volume of EUR 7.52 billion in 2009. This corresponds to sales decline of 14.7 percent. Particularly industry-related sectors such as the automotive industry or mechanical engineering have been hit especially hard by the poor economy. By contrast, the classic trades proved to be relatively robust and crisis-resistant in the past year, which is why sales generated by Würth Companies serving the trades did not slump as much as the average sales of the corporate group.

In the second half of 2009, a certain stabilization of the situation could be observed in some regions. Whereas the Würth Group’s sales decline came up to approximately 18 percent in the first half of 2009, the second half could be closed reporting considerably better figures. As a result, the sales decrease of the entire year could be forced down to 14.7 percent. In 2010, a turnaround in the number of orders received is clearly visible.

German market contributes greatly to safeguarding the result

The 78 German companies of the Group, above all Adolf Würth GmbH & Co. KG, contributed greatly to safeguarding the Würth Group’s sales and result in the past year. In their domestic market, the German companies generated sales of EUR 3.30 billion. This corresponds to a decline of 9.8 percent compared to the same period under review of last year. Adolf Würth GmbH & Co. KG still contributes the lion’s share when it comes to sales and result, with EUR 938 million having a share of 12.5 percent in the overall sales of the Würth Group. The companies outside of Germany pulled in a total of EUR 4.22 billion and thus 18.1 percent less than last year.

Investments mainly in sales

In 2009, the Würth Group invested a total of EUR 261 million worldwide; of these, EUR 142 million abroad and EUR 119 million in Germany. The Group thus invested EUR 192 million less than last year. “Last year, the global economic development was uncertain which is why our investments and acquisitions were quite conservative. However, we will certainly step up our acquisition and investment activities in 2010”, explained Mr. Friedmann. “We defined clear priorities and mainly strengthened sales-related areas in order to set the course for future growth.”

“Cash is king - that was our maxim last year, determining all our crucial decisions. As a result, we successfully optimized working capital which in turn led to the cash flow from operative business increasing by 84.3 percent to EUR 800 million - a level never before achieved in the history of the Würth Group (2008: EUR 434 million)”, Mr. Friedmann continued.

Equity ratio remains stable

In 2009, the equity capital of the Würth Group went up by EUR 83 million to EUR 2.60 billion. This increase by 3.3 percent strengthened the financial stability of the company which now reports an equity ratio of 41.3 percent (previous year: 41.2 percent). The Würth Group is thus much better off than average European trading businesses. International rating agencies, too, confirm the solid financial state of the Würth Group. Standard & Poor’s rate the Group “A” and Fitch Ratings award an “A-“, although the outlook is now “negative” on account of the deterioration of the economic climate. “The rating reflects our still good financial standing. It furthermore illustrates our continuous and successful development as well as the stability of our business model”, said Mr. Friedmann.

Employees: Specific and individual adjustments

Last year, the Würth Group had 57,882 employees on the payroll. This is 7.8 percent less than in 2008. Wherever possible, measures such as short-time work or salary waivers were taken to make adjustments in capacity, which had become necessary because of the economic situation. Some companies, for example in Spain and the U.S., required much more drastic measures as their sales virtually plummeted last year. In addition to that, a general hiring freeze for in-house employees was enforced at almost all companies of the Würth Group in 2009. All in all, steps were taken bearing in mind the individual situation of the respective companies. Some companies even strengthened their sales force.