Würth Group reports another year of record sales and profits
The Würth Group, global market leader in the sale of assembly and fastening materials, has posted new sales and operating result records. This success confirms the Group's strategic change from a distributor to a manufacturer. The multi-channel strategy remains a driver of growth, with e-business sales growing by 24.6 percent, further supporting the current course.
- Sales grow by 7.1 percent to EUR 13.6 billion—adjusted for exchange rate effects, growth stands at 8.6 percent
- Operating result of EUR 870 million constitutes highest result in corporate history
- Innovation center further boosts transformation from distributor to manufacturer
The year 2018 has been another record year for the Würth Group: Sales grew by 7.1 percent to EUR 13.6 billion (2017: EUR 12.7 billion), currency-adjusted growth came out at 8.6 percent. The operating result increased disproportionately compared to sales, reaching a total of EUR 870 million. The Group is expecting moderate single-digit sales growth in the current fiscal year. In accumulated terms, the Würth Group reported sales growth of 7.1 percent as of April 2019.
The operating result of EUR 870 million (2017: EUR 780 million) is the highest in the Group’s history. In 2018, the rate of return improved to 6.4 percent (2017: 6.1 percent). On the one hand, this improvement can be attributed to internal productivity increases, further bolstered by the good economic conditions. On the other hand, it reflects the company’s focus on the expansion of its multi-channel strategy. Based on the latest economic forecasts, the Group is not expecting the great economic development of 2018 to continue on the same level in 2019. “The continuing trade and tariff wars, the insecurities caused by Brexit—there are many issues that are putting a drag on global growth dynamics. Assuming there will be no major turmoil, we are still expecting satisfactory growth rates in 2019,” states Robert Friedmann, Chairman of the Central Managing Board, with regard to the current fiscal year.
The number of employees was stepped up by 2,921, from 74,159 to 77,080, in 2018, which equals an increase by 3.9 percent. In Germany, the Group has 23,772 employees overall, up 5.1 percent over last year. In the field service, the Group employs 33,218 sales representatives across the world (2017: 32,295). A total 330 employees were added through acquisitions.
Germany remains most profitable region
Among the different regions, it was especially the regions of Southern and Eastern Europe that reported strong sales growth of more than 10 percent, which was mainly driven by the companies of the Würth Line. The Würth Line companies in Spain and Italy reported particularly remarkable results at 11.2 percent and 15.7 percent sales growth, respectively. “Our corporate strategy is based on the ambition of striving for double-digit growth rates,” explains Robert Friedmann, who is very satisfied with these results. “I am especially happy for these companies, as they have emerged from the economic crisis and worked their way back to success.”
Germany continues to be the most important single market for the Group: Sales in Germany, which account for 42.4 percent of overall sales, grew by 7.0 percent to EUR 5.8 billion (2017: EUR 5.4 billion). Germany is also the most profitable region for the Group: EUR 436 million of the Group’s operating result were generated in Germany (2017: EUR 421 million). The Group’s sales outside Germany improved by 7.1 percent to EUR 7.8 billion.
Adolf Würth GmbH & Co. KG’s 7,160 employees achieved sales of EUR 1.7 billion in 2018, outpacing the Group average with a plus of 9.0 percent. This development is a prerequisite for the Group’s investments in forward-looking distribution, logistics and product solutions. The construction of a new transshipment depot directly next to the German A6 highway is just one of the latest examples.
Research and development at the highest level: solution to prevent mobility collapse
In March 2019, the Würth Group celebrated the groundbreaking for its new innovation center at the parent company's location in Künzelsau. Adolf Würth GmbH & Co. KG is investing around EUR 70 million to create state-of-the-art laboratories and workshops equipped with the latest 3D printers, among others, on a total surface area of approximately 15,000 sq. m. A climate chamber and a certified anchor test lab will allow the Group to conduct its own approval tests.
Research will focus on fasteners for earthquake-prone regions or the reinforcement of existing structures such as bridges and tunnels. Pressing problems such as the looming mobility collapse caused by lengthy restoration works on bridges and tunnels are tackled head-on to develop practical solutions. Today, the Würth Group already has developed concrete screws that can be installed at great depths to replace missing or damaged reinforcements to extend the service life of otherwise dilapidated structures. The new innovation center will provide numerous new research opportunities in this field.
Approximately 250 people will be working in the innovation center to implement ideas and make them fit for the future: employees of the research and development department of Adolf Würth GmbH & Co. KG and from Group companies that operate in the manufacturing sector, as well as external researchers. The cooperation with Karlsruhe Institute of Technology KIT and the universities of Innsbruck and Stuttgart will create a cluster of knowledge and know-how.
From a distributor to a manufacturer—created from the ideas of tradespeople, developed by Würth
Würth’s high product quality has always been its core competence because it always focuses on the needs of professional tradespeople. The close contact and direct partnership between them and Würth’s sales force has always given Adolf Würth GmbH & Co. KG a clear view of the customer’s experiences in their daily use of Würth products. In 2018, this feedback from the skilled trades and the industry that Würth collects in its more than 40.000 customer contacts per day have resulted in the company implementing its first cordless power tool range based on a powerful Würth-owned battery system under the heading WÜRTH MASTER. FULL POWER. FULL SERVICE. The cordless drill driver ABS 18 COMPACT is the first power tool of this product range. A new angle grinder was added in April 2019. By the end of 2020, customers will be able to choose from a full 12V and 18V product range based on the new battery system.
The Würth Group’s investment volume of EUR 635 million in 2018 was geared towards the expansion of the IT infrastructure and warehouse capacities for our distribution companies, and an improvement of production facilities, technical equipment and machinery for our manufacturing companies. In 2018, the Würth Group again financed all its investments from its operating cash flow.
Continued financial stability
The Würth Group's equity climbed by 8.2 percent to EUR 5,172 million in the last fiscal year, which corresponds to an increase of EUR 393 million. Thus, the equity ratio amounted to 47.1 percent at the end of the year (2017: 46.5 percent). The rating agency Standard & Poor’s once again confirmed the Würth Group’s “A/outlook stable” rating in 2018.