Stuttgart For more than 17 years, Robert Friedmann has managed the Würth Group, the world market leader in assembly technology. In the shadow of the powerful company patriarch Reinhold Würth, this can only be achieved with a great deal of diplomatic skill.
Because the now 87-year-old entrepreneur always picks up his pen and sends circulars directly to his employees. “Lightning from Zeus” is what his daughter Bettina called it in an interview with the Handelsblatt last year.
Other operational CEOs would quickly feel duped. The 55-year-old Friedmann remains calm in such situations. “The owner has every right to express his opinion in an election campaign,” said Friedmann on Wednesday about the latest letter.
In the run-up to the works council election this Tuesday, Reinhold Würth called on his workforce not to vote for the candidates on the IG Metall list. In the letter to the approximately 7,000 employees of the parent company of the globally active group, Würth attacked the union “as a company that is financed by membership fees”.
Würth hates external influences. He points out that his employees were better off in terms of working conditions and pay than the union’s collective agreements had provided for. That should remain so in the future. The company pays well, but traditionally with performance-related components, especially in sales.
Würth has always held its employees in high esteem and acts according to the motto “As you shout into the forest, so it echoes out,” Friedmann added to the owner. Like Würth, the company boss is not a friend of the union, but prefers to keep sensitive issues small. Friedmann emphasized that the company had not had any problems with the works council in the past three years.
The company patriarch interferes from time to time.
(Photo: dpa)
The company had a council of trust at its headquarters in Künzelsau for 36 years, but without any legal basis. In 2019, after weeks of quarreling, a works council was elected for the first time. The IG Metall list ended up in third place with 15.8 percent of the votes. It was not clear on Wednesday how she performed in the election on Tuesday.
Reinhold Würth built up the company, which was founded in 1945, from a small screw dealer to a global corporation. The company supplies craftsmen and industry with tools, aids and small parts such as screws. The billionaire is one of the richest Germans and the largest art collectors. Although Würth gave up operational management almost three decades ago, as Chairman of the Supervisory Board of the Foundation, he still has the last word on major decisions.
Under Friedmann’s leadership, the group has proven to be very resilient in the Corona years. Sales grew by 18.4 percent to 17.1 billion euros in 2021. The company has grown by almost a fifth during the pandemic. The operating result reached a new high of 1.3 billion euros. The bottom line was a net profit of 965 million euros in 2021, after 604 million euros in the previous year.
Growth of almost 20 percent in the first four months
Despite the war in the Ukraine and supply bottlenecks, the rate of growth in the first four months of the current year is undiminished, as Friedmann explained on Wednesday. The increase in sales was 18.8 percent, adjusted for currency effects it is 17.2 percent. According to the Würth boss, more than half of the growth is due to inflation. Due to the cost increases in freight, warehousing and preliminary products, the operating result is growing less in comparison and is eleven percent above the previous year’s value.
“We started 2022 very optimistically – until February 24, when the conflict between Russia and Ukraine escalated,” said Friedmann. “Now it is a matter of overcoming this unprecedented constellation of uncertainties every day.”
The direct loss of revenue is small. In Russia, Würth said it only had sales of 70 million euros. Business is closed, the 900 affected employees in Russia and Ukraine would continue to be paid, said the Würth boss.
Friedman, like many other CEOs, did not want to make a concrete forecast for 2022. Ten percent growth is possible: “Despite growing concerns, we are cautiously optimistic.”
Customers fill their warehouses.
(Photo: Würth)
However, the challenges posed by the corona pandemic have multiplied with the conflict in Ukraine and the corona lockdowns in China. “We are concentrating on anticipating the challenges such as delays in the supply chain, material bottlenecks and price increases in order to remain a reliable partner for our customers in the future,” said Friedmann.
However, Würth is one of the companies with significant reserves. The Group’s equity increased by a good 5.3 percent to more than seven billion euros in the past financial year. This corresponds to more than 45.2 percent of the total capital. The rating agency Standard & Poor’s confirmed the group’s robust rating of “A/outlook stable” for 27 years in 2021.
Electronics business is booming
Friedmann is among the company bosses who recognized the importance of availability early in the pandemic. “Now it depends on the ability to deliver,” said the manager. Stock purchases by customers have increased. “Customers hoard and fill their warehouses”. explains Friedman. This leads to production bottlenecks, delivery delays and thus to rising manufacturing and procurement prices.
But Würth is also hoarding. Inventories are 800 million euros higher than a year ago, as CFO Joachim Kaltmaier confirms. That pushes the cash flow from 1.6 to currently one billion euros.
Würth senses the changed behavior of customers in electronics. In the ongoing chip crisis that arose with the pandemic, demand for electronic products such as printed circuit boards and electronic and electromechanical components rose particularly sharply: the Würth Electronics Group increased sales by 32 percent to over 1.1 billion euros, and electrical wholesale by 29 percent to over 2.8 billion euros.
Friedmann was particularly proud of the fact that Würth had gained 275,000 customers and, with four million customers worldwide, had achieved a ten percent market share in fastening and assembly technology. “We still have a lot of potential once the circumstances normalize again,” said Friedmann. Even in these difficult times, the company is moving towards a turnover of 20 billion euros.
More: Full order books, full warehouses: How the economy itself causes bottlenecks