Ladies and gentlemen,
the year 2018 was also a successful fiscal year for the Würth Group: Sales grew by 7.1 percent to EUR 13.6 billion—and even by 8.6 percent when adjusted for exchange rate effects. Operating results increased by 11.5 percent to EUR 870 million.
The challenge of the 2018 fiscal year lay in the short word “also”: Becoming successful is one thing. Remaining successful on the other hand requires a balancing act. To keep the balance between what has been achieved, what has been tried and tested and the courage to go purposefully into the future with innovative ideas. The added value from both sources of impetus can be seen in -ing as an expression of lively growth: We are grow-ing. This balance of tradition and progress unleashes the dynamism with which our more than 77,000 employees worldwide continue to develop our products and services. Always aware that the trust of the 3.6 million Würth customers is based on the expectation and the rendering of outstanding service and on a successful partnership. We want to maintain this balance.
Growth trends in Germany, the Group’s largest sales market, have now continued for the tenth year in succession since the 2009 financial crisis. We are in the longest upswing phase since the Second World War. The various institutes have now revised their forecasts for economic growth slightly downwards at the beginning of 2019: The German Council of Economic Experts (Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung) forecasts that the German economy will grow by 1.5 percent in 2019, just below the 2018 level. The global economy is also losing some of its momentum: According to the OECD, global economic output will grow by 3.5 percent in the coming years, slightly behind previous years. This slows economic growth as well. But at the same time, it shows that solid and healthy growth is possible despite volatile foreign trade peripheries. The construction boom continued in 2018, and the order books in the craft trades were full. This trend was also reflected at Würth, which clearly shows: Würth is a strong partner at the side of its customers. The Construction division, for example, increased its sales by 10.5 percent in 2018 and was thus the most successful division within the Würth Line. The largest division, the Metal division, surpassed the EUR 2 billion revenue threshold in 2018 with growth of 8.6 percent. What particularly pleases us is the double-digit growth in the regions of Southern and Eastern Europe—above average compared to Group sales. Double-digit growth is a target that has a firm place in our strategy. In Italy, which was severely hit by the crisis just a few years ago, the figure is over 15 percent!
Nevertheless, the pace will be more moderate in 2019. In its annual economic report, the Federal Government in Germany only expects growth of 1.0 percent for 2019. This shows the uncertainty in our assessment of developments ahead, such as concerns about a no-deal Brexit. Deal or no deal is no longer just a game. Britain will set the precedent for the exit of other EU countries that prefer protectionism to the community spirit of half a billion people. The world stage is repositioning itself. The world order is positioning itself against national solo attempts. Chancellor Angela Merkel’s passionate plea for multilateralism at the Security Conference in Munich received a standing ovation and is synonymous with the fact that peace and freedom cannot be walled in. We have anchored our economic interests in this context. Growth-oriented action and innovative strength are future-oriented and therefore only make sense if we also have a future.
The fact that success in a globally networked world does not work if you go it alone becomes apparent when Germany’s largest car manufacturers cooperate so that they can withstand the race for autonomous driving in competition with the USA and China. Thus, opportunities from digitalization and artificial intelligence become a challenge at the same time. Dealing with this, and using synergies to create value, is a task that we are also positioning ourselves to face: Transporting concepts and ideas into a globally active group of 400 companies in 80 countries, each operating in its own individual environment, requires tact, market knowledge and, last but not least, an understanding of culture. In this context, we benefit from our decentralized structure, which creates the necessary freedom while at the same time committing ourselves to a common goal.
Times of change are also always times for trust. Reliability, predictability and consistency in our business relationships have regained their well-earned position and draw their strength from uncertainty in the global environment. Our customers view us, on the one hand, through the consistently high quality of our products and services, and as problem solvers for questions outside of the box, on the other. That is our core competency. We listen, appreciate requirements and fulfill them.
The groundbreaking ceremony for the new innovation center was held at the parent company’s site in Künzelsau in March 2019. A place where the employees from Adolf Würth GmbH & Co KG who are involved in research and development can meet students from three universities as well as the developers of our subsidiaries from the Allied Companies—an agglomeration of knowledge and experience. This is an example of how tradition and innovation create opportunities.
With this in mind, the Central Managing Board of the Würth Group thanks each and every employee, the Councils of Confidence and Works Councils, the members of the Customer Advisory Boards, the Supervisory Board of the Würth Group’s Family Trusts, the Advisory Board, the Würth family, and especially Prof. Dr. h. c. mult. Reinhold Würth and Bettina Würth for a working relationship based on trust.
On behalf of the Central Managing Board of the Würth Group
Robert Friedmann
Chairman of the Central Managing Board of the Würth Group
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