Würth Group banks on digitalization strategy and innovative ideas for more sustainability

In spite of the COVID-19 crisis, the Würth Group managed to improve sales slightly to EUR 14.4 billion in the 2020 fiscal year (2019: EUR 14.3 billion). This represents an increase of 1.0 percent. Adjusted for currency effects, growth came out at 2.0 percent. At EUR 775 million, the operating result also came out slightly higher than last year (2019: EUR 770 million), a result of the Group’s strict cost control measures. Reduced travel and conference costs in the wake of the pandemic contributed significantly to these cost savings, helping to compensate for COVID-induced sales collapses in usually profitable business units.

• Sales and operating result growth despite pandemic
• Digital sales channels continue growing: disproportionate sales growth in e-business
• More new employees
• Adolf Würth GmbH & Co. KG takes the lead: carbon-neutral by 2024
• Innovative ideas for more sustainability: Würth Delivery Day and packaging from recycled materials
• Q1 growth in the double digits
• Outlook 2021: uncertain situation of global economy complicates outlook

The Group’s sales development in 2020 was driven by two decisive factors: The skilled trades, which Würth supplies with assembly and fastening materials in its core business, the Würth Line, were widely regarded as essential businesses and continued operating at a very high output. At the same time, the Würth Group’s multi-channel strategy offered customers the right solutions for contactless material procurement: The digitalization strategy in the shape of online shops, e-procurement solutions and Würth App perfectly rounds off sourcing from local Würth shops. E-business sales developed accordingly in 2020, rising by 5.8 percent to EUR 2.8 billion, with e-business sales now accounting for 19.3 percent of the Group’s overall sales volume.

“We had laid the groundwork well before the pandemic hit: Our customers are familiar with our digital ordering options, with the sales reps offering expert advice when needed. Our strategy has paid off: 100 percent flexibility in procurement, even in times of COVID restrictions,” explained Robert Friedmann, Chairman of the Central Managing Board of the Würth Group.

Growth despite COVID crisis

In Germany, the Würth Group closed the 2020 fiscal year with a sales plus of 2.9 percent. The pandemic’s impact on the individual industries supplied by the Würth Group varied greatly: Both the Construction Division (+12.2 percent) and the Electrical Wholesale unit in Germany (+10.8 percent) reported sales growth in the double digits. All units supplying the automotive and mechanical engineering industries, on the other hand, saw sales dwindle. Already faced with enormous pressure to help combat climate change, sales in the automotive industry collapsed in the wake of declining demand and weeks of production standstills. The mechanical engineering sector suffered as well. The Group’s companies outside Germany saw sales drop by 0.4 percent.

Adolf Würth GmbH & Co. KG, the largest company in the Group, showed a stable performance during the crisis: In the 2020 fiscal year, the company reported a sales plus of 7.4 percent. The potential of digital sales channels during the pandemic is reflected in the key figures: The websites of Adolf Würth GmbH & Co. KG register almost 1,000 search queries per minute. Customers log into the online shop and the Würth App almost one million times each month.

Group structure helps brave pandemic

The Group’s international orientation with more than 400 companies in more than 80 countries boosts its stability in times of crisis. The wide variety of different industries ensures the Group is not dependent on a single economic sector: In the Würth Line’s core business, the sale of assembly and fastening materials, Würth Group companies supply customers in the metalworking, automotive, industrial, woodworking and construction sectors. The Allied Companies operate in related industries such as electronics, electrical wholesaling or chemicals. This strategic position combined with the multi-channel strategy has turned out to be a major advantage during the pandemic.

Sustainability in logistics: The Würth Delivery Day

Logistics is one of the Würth Group’s main fields of expertise. To support customers with a high ordering frequency in making their inventory management more efficient and reliable, Adolf Würth GmbH & Co. KG is now offering the new “Würth Delivery Day”. Different individual orders of the same customer are consolidated into one fixed delivery date per week. The customer chooses the delivery date. This helps save up to 30 percent CO2 emissions per customer.

“By the year 2024, Adolf Würth GmbH Co. & KG wants to be carbon-neutral and take on a pioneering role in the Group. Today, our shipments to customers are already carbon-neutral. We plan to establish a circular value chain by 2030, which is why we are already permanently working on sustainable ordering processes: including digital invoices as well as sustainable packaging and delivery systems,” Friedmann said.

Thanks to these services, the customers will benefit in several ways: They will have to handle less packaging and packing materials and need fewer deliveries, which automatically means less resources used and a smaller environmental impact. In addition, customers can better plan their personnel needs in line with their delivery schedules. This delivery model will be rolled out across all Würth Line companies.

“This example shows how much potential is available and what we can achieve if we rethink our processes. It is not only about achieving faster, but also more efficient processes. Sustainable practices are something that the skilled trades are asking for more and more,” Friedmann added about the new service offering.

Sustainable product packaging from recycled plastics

Together with our packaging manufacturer, Würth developed packaging solutions that are made to 100 percent from recycled plastics (PCR = post-consumer recycled plastics) for machining tools. This type of packaging is almost entirely carbon-neutral, consisting to 100 percent of recycled plastics. Even the labels are made entirely of recycled plastics and are applied with an environmentally safe adhesive. This made it possible to achieve Cradle to Cradle™ certification. The advantages of sustainable packaging: It protects the product very well, while requiring very little material. It is reusable and resistant to oil, grease and moisture. This changeover will save roughly 45 tons of new plastic every year, reducing CO2 emissions for this product group by 77 percent.

“By the year 2025, Adolf Würth GmbH & Co. KG will have changed over 50 percent of its packaging to recyclable solutions and lowered its use of packaging materials by 20 percent compared to 2020,” Friedmann added.

Employees

The number of employees increased slightly from 78,686 to 79,139 employees. In Germany, the Würth Group employs 24,514 people, 0.7 percent more than last year, with 33,176 employees worldwide working in the sales force.

Equity secures jobs and guarantees independence

The Würth Group remains a reliable and financially stable partner: The Würth Group's equity climbed 6.6 percent to EUR 5.9 billion in the last fiscal year, which corresponds to an increase of EUR 366 million. Thus, the equity ratio amounted to 43.8 percent at the end of the year (2019: 44.0 percent). The rating agency Standard & Poor’s confirmed the Würth Group’s “A/outlook stable” rating in 2020, underlining the stability of the Würth Group’s business model.

Optimistic outlook

Projections by leading economic institutes are again more optimistic, even though the dynamically developing rate of infections does not allow for accurate forecasts yet. The Group needs to continue to generate organic growth: by always being there for its customers, being active on the market, expanding its sales capacities and not least by gaining new market share through high performance and financial stability. The figures reported at the beginning of 2021 show that Würth keeps doing well throughout the pandemic: In the first quarter, the Group reported a sales plus of 10.3 percent year over year.

In Germany, Würth Group sales grew by 7.2 percent in the first three months, while sales growth came out at 12.6 percent outside Germany. Adolf Würth GmbH & Co. KG also started well into the new year, achieving year-over-year sales growth of 11.0 percent in the first three months.

About the Würth Group

The Würth Group is the global market leader in its core business—the sale of fastening and assembly materials. It consists of more than 400 companies in over 80 countries with more than 80,000 employees on its payroll. Approximately 33,000 of those employees are salaried sales representatives.

In the Group's core business, the Würth Line, the sales program for the skilled trades and industry comprises more than 125,000 products: from screws, screw accessories and anchors to tools, technical chemicals and personal protective equipment.

The Allied Companies of the Würth Group, which operate in business areas related to its core business, round off the range by offering products for DIY stores, material for electrical installations, electronic components such as circuit boards, tools, and financial services. They account for more than 40 percent of the Würth Group’s sales volume.