STIHL’s revenue exceeds the 2 billion euro mark

stihl_montage_ts_2007_rdax_100Г—151.jpgThe STIHL Group’s revenue exceeded the 2 billion euro mark for the first time in 2006. Group turnover grew to 2,019 billion euro, 11.4 per cent higher than the previous year’s thanks to increased sales. Currency fluctuations had only a slight, positive influence on the result. Chairman of the STIHL AG board, Dr Bertram Kandziora, said at the company’s results press conference on 24 April 2007: “This record is a significant achievement of the STIHL team worldwide in this, the 80th anniversary year of the company. We would like to thank all our employees for this outstanding collective effort.”

Percentage of revenue overseas remains high
Overseas revenue again made up around 88 per cent of total earnings. In some of the bigger markets, high growth rates in earnings on chainsaws, frequently in double figures, were recorded. Leading the charge were Eastern European countries as well as France and Canada. STIHL also enjoyed considerable growth in the German market. STIHL recorded above average growth for its power tools, particularly in south-western Europe, Latin America and North America. Around one third of overall revenue came from within the Eurozone and 44 per cent from within the EU. In terms of units, more chainsaws than power tools were sold by the STIHL Group in 2006, a reversal of the previous year’s result.

STIHL exploits new technologies
The product range on the market was considerably expanded in 2006, with 21 new products and product variants on offer. Numerous new products, such as the world’s first chainsaw with an electronically controlled carburetor, were introduced on the market. In readiness for the new European Union emissions laws coming into force in 2008, the company has prepared a wide product range of tools with reduced emissions.

Production in some areas reaches capacity limits
As a result of higher sales, chainsaw, power tool, guide bar and sawchain production was increased. In some areas, production capacity reached its limit. The increase in production within Germany and internationally resulted in the creation of more jobs. The number of employees of the group grew last year by 10.2 per cent to 9,449 as of 31 December 2006, amounting to 873 new jobs.

Investment up again
Investment by the group rose again in 2006, reaching 164 million euro (2005: 138 million euro), 22 per cent of which was invested in the German founding company an 78 percent in affiliated companies both in Germany and abroad. The main area of investment was in manufacturing, and according to Dr Kandziora, “about 90 per cent of the investment capital was put into manufacturing companies. In particular, this money was used to expand and modernise factories and other manufacturing facilities.” Nearly all investment was financed using the company’s own liquid assets.

STIHL strengthens its manufacturing location and worldwide distribution networks
Swiss operations acquired a new piece of land in the canton St. Gallen on where construction of a second factory to produce chains began on March 30th, 2007. In the USA, a new raw materials storage building was completed and construction work was begun on a facility for manufacturing guide bars. In Brazil, capital was invested in the expansion of cylinder production facilities.  In China, the new manufacturing facility in Qingdao was completed and production began in autumn 2006. A building extension to expand capacity is currently underway at VIKING in Austria. The distribution companies in Australia and Bulgaria both moved into new corporate offices. Canada completed building work to expand its warehouse capacity. The German distribution centre in Dieburg acquired more land to ensure the company’s logistics operations can cope with company growth in the future.

Founding company also grows
Turnover at the founding company, i.e. the seven manufacturing facilities operated by ANDREAS STIHL AG & Co. KG in Germany, rose by 10.9 per cent to 869 million euro.  In particular, guide bar manufacturing was at or near capacity limits. The founding company’s workforce grew by 3.5 per cent to 3,788 employees. Most of the 127 new positions are at the company headquarters in Waiblingen. As of 31 December 2006, 2,842 of parent company employees were working at Waiblingen, 298 in Ludwigsburg, 584 in Prüm-Weinsheim and 64 in Wiechs am Randen.

Training programs on the rise
In recent years, the number of participants in training programs at the founding company has risen considerably, growing from 127 in 1996 to 215 by the end of 2006. 64 new participants were recruited last year. All suitable candidates interested in remaining with the company were offered a job.

Growth forecast for 2007
STIHL expects further growth for the coming year. The Chairman of the Board warned however of the dangers of agreements setting wages too high, which could threaten growth in the metal and electronics industries. “By featuring growth as a component of wage agreements, employees will be able to benefit from the positive economic environment without endangering the long-term economic competitiveness of German companies”, said Dr Kandziora. In this way, he added, economic recovery could be sustained and employment increased.

Company profile
The STIHL Group develops, manufactures and distributes power tools for farming, forestry and the construction industry. The garden power tool range from VIKING rounds out the product line. The products are generally distributed by authorized dealers including 32 marketing subsidiaries, more than 120 importers and about 35,000 dealers in over 160 countries. STIHL has been the world’s top-selling chainsaw brand since 1971. The company was founded in 1926 and has its headquarters in Waiblingen near Sttutgart

press-release STIHL Group

April 2007

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