Annual report 2016
Sales record and double-digit increase in operating result: The Würth Group presents its 2016 financial statement
- Sales grow by 7.1 percent
- Operating result increases by 17.1 percent to EUR 615 million
- E-business sales rise by 18.3 percent
Künzelsau/Schwäbisch Hall. With sales in the amount of EUR 11.8 billion, the Würth Group set a new sales record in 2016. The market leader in fastening and assembly material reported double-digit growth with a 17.1 percent increase in its operating result.
Multi-channel strategy proves effective
In the 2016 fiscal year, the Würth Group set a new sales record of EUR 11.8 billion (previous year: EUR 11.0 billion), corresponding to 7.1 percent growth. Adjusted for exchange rate effects, growth came out to 7.9 percent. This development clearly demonstrates that the company’s focus on multiple sales channels is bearing fruit, proving just as successful in the field of e-business as with the expansion of our branch office network and sales force. “Multi-channel sales allow us to increase our sales volume per customer considerably. With 1,700 branch offices, 32,000 sales representatives and a wide array of e-business activities – we are growing at roughly 20 percent in this area – the Würth Group is able to maintain a very competitive position on the market,” emphasizes Robert Friedmann, Chairman of the Central Managing Board of the Würth Group.
Operating result achieves double-digit growth
In 2016, the Group reported the second-highest operating result in the history of the company: EUR 615 million in sales (2015: EUR 525 million). This represents an increase on the previous year of 17.1 percent. “In Southern Europe, our earning power has increased significantly. Even the individual companies such as the parent company Adolf Würth GmbH & Co. KG, Würth Finland, Würth Industrie Service and Würth Elektronik eiSos reported outstanding improvements in earnings. Furthermore, we were able to increase our productivity while at the same time reducing costs,” explained Friedmann as the reason for the substantial increase.
Germany continues to be the most important market
In 2016, the Group’s largest and most important single market, Germany, achieved 6.0 percent sales growth to achieve a satisfactory sales volume of EUR 5.1 billion. Growth abroad came out to 8.0 percent. The development in Eastern and Southern Europe is especially pleasing. Sales in Southern Europe have increased steadily since 2014, rising by 9.3 percent in 2016. Eastern Europe reported the strongest sales growth within the Group with a 25.8 percent increase on the previous year.
For the first time ever, the number of employees exceeded the 70,000 mark. The number of total employees increased by 2,413 to 71,391 in 2016. The number of employees in Germany rose by 552 to 21,697. In 2017, the Group is planning to hire 1,500 new sales representatives in addition to 60 new employees in the field of e-business in order to concentrate its efforts in this area.
Digitalization prevails when customers discover a benefit for themselves and are able to influence costs in a positive way. In light of this, Würth is focusing on expanding and improving all of its digital services and activities, including: ordering platforms such as the classic online shop or the Würth App, as well as the option of using e-procurement to optimize customers’ processes, or automated warehouse management (Kanban or Orsymat). The significant jump in growth of 18.3 percent compared with the previous year is evidence of the fact that this concept is a viable complement to the classic sales force and the brick-and-mortar business. E-business accounts for 14 percent of the Group’s total sales volume.
Continued financial stability
In the 2016 fiscal year, the Würth Group's equity rose to EUR 4,470 million (2015: EUR 4,083 million). This represents a EUR 387 million increase. Thus, the equity ratio amounted to 46.1 percent at the end of the year (2015: 44.3 percent). The rating agency Standard & Poor’s once again confirmed the Würth Group’s “A/outlook stable” rating in 2016. At EUR 903 million, the operative cash flow was up considerably on the previous year (2015: EUR 630 million). As per 31 December 2016, the Würth Group reported liquid funds in the amount of EUR 874 million (2015: EUR 616 million).
With EUR 481 million, the Würth Group invested slightly less in 2016 than in the previous year (2015: EUR 525 million). The investments were geared towards the expansion of the IT infrastructure and warehouse capacities for our distribution companies, with a focus on production facilities, technical equipment and machinery for our manufacturing companies.
In April 2015, Arnold Umformtechnik, a specialist for screws and fastening technology located in Dörzbach, invested EUR 37 million to lay the foundation for three further production facilities fully equipped with the latest machinery. The grand opening took place on 09 June 2016. In June 2016, Adolf Würth GmbH & Co. KG inaugurated a new branch office and office building at its corporate headquarters in Künzelsau-Gaisbach – representing an investment volume of EUR 28.5 million. Würth Industrie Service in Bad Mergentheim is currently expanding its logistics capacities: One of the most sophisticated logistics centers for industrial supplies in Europe will be inaugurated on 16 May 2017.
The company is particularly excited about the inauguration of the new Carmen Würth Forum on 18 July 2017, in celebration of the 80th birthday of Carmen Würth, the wife of Prof. Dr. h. c. mult. Reinhold Würth. This exclusive convention center was designed by the firm David Chipperfield Architects in Berlin. The multifunctional building, measuring a total of approx. 11,000 square meters, will contain an event hall that can be divided into several rooms, the Great Hall with room for more than 2,000 visitors, and the Reinhold Würth Hall, a chamber music hall large enough for 600 people. In addition, it will feature a foyer and a terrace for get-togethers and evening events. The park in front of the forum offers enough space to host up to 10,000 guests. Carmen Würth Forum can be used for all sorts of events organized by the Würth Group or can be hired out to third parties.
During the 2017 fiscal year, the Würth Group expects to achieve sales growth in the mid single-digit range and an operating result of between EUR 660 million and EUR 680 million.
About the Würth Group
The Würth Group is the world's market leader in its core business, the trade of assembly and fastening materials. It currently consists of more than 400 companies in over 80 countries with more than 72,000 employees on its payroll. Approximately 32,000 of them are salaried sales representatives.
In the Group's core business, the Würth Line, the sales program for craft and industry comprises more than 125,000 products: from screws, screw accessories, and anchors to tools, chemical-technical products and personal protective equipment.
The Allied Companies of the Würth Group, which either operate in business areas related to its core business or in diversified business areas, round off the range by offering products for DIY stores, material for electrical installations, electronic components such as circuit boards, and financial services. They account for more than 40 percent of the Würth Group's sales volume.