Press Release
22 April 2015
Editor: Kay Hoffmann
Embargoed until: 22 April 2014 / 11:00 a.m.
Strong key figures, profitable growth:
Wilo Group looks to the future with optimism
Dortmund-based pump specialist records further revenue growth and
presses ahead with largest location development program in the
company’s history.
Dortmund/Düsseldorf. The 2014 financial year was characterised by difficult
political
and
uncertain
general
economic
conditions.
Geopolitical
risks
continued to rise, while the upturn in the global economy forecast by
economic researchers failed to live up to expectations and varied significantly
across different regions. In this challenging environment, the Wilo Group
performed well and continued on its profitable growth path throughout the
2014 financial year.
Revenues in excess of EUR 1.23 billion
After adjustment for exchange rate effects, the company grew by three
percent and exceeded the record revenue levels of recent years. The
geopolitical tensions in the year under review led to significant volatility on
the currency markets, among other things. Some of the economically
significant countries for Wilo in the emerging markets experienced major
currency depreciations. The Russian rouble and the Turkish lira saw further –
at times double-digit – depreciation against the euro in 2014. Despite these
negative currency effects, the Dortmund-based pump specialist generated
revenues of EUR 1,234.7 million.
Operating earnings at a high level
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Although lower than the previous year’s figure in absolute terms, operating
earnings (EBIT) remained at a high level of EUR 111.2 million. “The EBIT
margin of nine percent is within our strategic corridor for relative profitability
of between nine and eleven percent. In the context of the current
environment, this is a satisfactory result overall,” commented Wilo CEO Oliver
Hermes at the press conference on the 2014 annual financial statements in
Düsseldorf, adding: “Without the negative currency effects, EBIT would have
been EUR 4.9 million higher in absolute terms.”
Expansion of global market presence
The premium provider of pumps and pump systems also expanded its global
market presence with new subsidiaries in the high-growth regions of Mexico,
Tunisia and Nigeria, invested more than EUR 50 million in research and
development, and launched the largest location development program in its
history at its headquarters in Dortmund. “Despite the global economic
uncertainties, we resolutely pursued activities of strategic importance to us.
Our investment as well as R&D activities were consistently intensified,”
commented Oliver Hermes. In this context, the 44-year-old also highlighted
product innovations such as the Wilo-Stratos PICO smart home, which was
developed in cooperation with Wilo’s strategic partner iEXERGY GmbH. It is
the world’s first electronically regulated circulation pump that can be
integrated into a smart home environment via an open radio link.
Varied business development in the regions
In the Europe region, the Wilo Group generated slight year-on-year revenue
growth of 0.4 percent in 2014. Revenues increased by EUR 2.8 million to
EUR 700.9 million, with the substantial upturn in revenues in the Eastern
European EU states, the British Isles and the Benelux nations more than
offsetting the lower revenues in the German-speaking nations, France and the
Nordic and Baltic states.
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EMEA region drives growth
In the EMEA (East, Middle East, Africa) region, revenues increased by 10.9%
after adjustment for exchange rate effects, meaning that this region was the
growth driver within the Wilo Group once again. Despite the strained political
situation and its pronounced negative consequences for Russia and Turkey in
particular, business activities in both countries enjoyed excellent development
in local currency. Revenues in Russia increased by 12 percent, while revenues
in Turkey rose by 10.8 percent. However, development in euro was impacted
by the conflict between Russia and Ukraine and the political uncertainties in
Turkey, which resulted in the significant depreciation of the Russian rouble,
the Ukrainian hryvnia and the Turkish lira.
Concentration of research and development activities
A global research and development network serves to ensure that the Wilo
Group can successfully conduct a wide range of research projects. All
activities are managed on a Group-wide basis by three central research and
technology centres in Dortmund. A technology centre focusing on production
systems and technologies was established in the 2014 financial year in order
to address the future challenges posed by Industry 4.0 more quickly and
intensively.
High investment secures profitable growth
Capital expenditure, which primarily related to capacity expansion, new
manufacturing technologies and the expansion of the existing sales and
production locations, increased by EUR 2.2 million to EUR 66.1 million in the
year under review. The modernisation and expansion of production capacities
in the important European markets of Germany and France accounted for
EUR 50.6 million of this figure alone. “This underlines the major significance of
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the European locations for the strategic orientation of the Wilo Group,”
explained Oliver Hermes. Among other things, investments were made in
facilities for the production of ErP-compliant products, as well as in increased
production capacities to reflect the growth in demand for electronics
components. With the acquisition of an equity interest in iEXERGY GmbH,
which specialises in the development of smart home solutions, the Group also
expanded its expertise as a systems and solutions provider in the area of
building services. New subsidiaries were established in Mexico, Tunisia and
Nigeria, while a new assembly line and test basin were inaugurated in Brazil.
“The long-term focus of our investment policy serves to ensure that we will
continue to enjoy profitable growth in line with our corporate strategy in
future,” stressed the Wilo CEO. The Group intends to increase its revenues to
more than two billion euros by 2020. This target was systematically pursued
once again in the 2014 financial year.
Strong liquidity reinforces independent position
At EUR 149.1 million, the Wilo Group’s liquidity position remains extremely
solid. In the 2014 financial year, the Group further reduced its financial
liabilities and generated a positive free cash flow of EUR 38.0 million, the
second-highest figure in the past five years. With its strong balance sheet
structure and a high degree of internal financial strength, Wilo has further
reinforced its independence with regard to the international financial and
capital markets.
Early response to heightened geopolitical risks
In the course of the 2014 financial year, it became evident that the recovery
in the euro area was progressing more cautiously than expected despite the
extremely low level of interest rates, while growth in the emerging markets
was flatter than in the previous years. The Ukraine-Russia crisis, armed
conflicts in the Middle East, the outbreak of the Ebola epidemic in West Africa
and the – in some cases massive – depreciation of key currencies also
contributed to an increasingly complex and uncertain business environment.
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The Wilo Group responded to these developments at an early stage, with the
management taking measures to further reduce the Group’s risk positions and
adjust the planned cost increases to reflect actual business performance in a
timely manner. However, strategically important activities continued to be
pursued as planned.
Slight increase in global workforce
“Our qualified employees are the driving force for the Wilo Group’s sustainable
economic success worldwide,” commented Oliver Hermes, underlining the
importance of staff development and recruitment measures for the company.
Taken as an average for 2014, the total number of employees increased by
3.2 percent to 7,425, with all regions benefiting from the creation of new
jobs. For the second time in succession, the number of employees in research
and development was increased by more than 25 percent with the aim of
consolidating and further expanding the Group’s leading position in terms of
technological development and innovation.
Global energy revolution offers huge business potential
Global energy consumption is continuing to rise unabated. However, reserves
of fossil fuels are finite. This is driving the rapid expansion in the use of
renewable energies in many countries. “An energy revolution is well
underway,” noted the Wilo CEO. “However, a renewable energy mix alone is
not enough to halt the process of climate change, one of the six global megatrends that are vitally important to the Wilo Group.” Hermes believes there is
a need for global action: “The problem can only be solved through a dramatic
reduction in energy consumption accompanied by a significant increase in
energy efficiency.” As a premium manufacturer of pumps and pump systems,
the Wilo Group has committed itself to the task of developing and providing
highly efficient, environmentally friendly technology for building services,
water management and industry. The global energy revolution offers huge
business potential that Wilo intends to harness in a targeted manner in the
course of its continued profitable growth.
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Largest location development program in Wilo’s history
The Group’s headquarters in Dortmund will set new standards in the pump
industry with pioneering production processes and technologies. As part of the
largest location development program in Wilos’ near-150-year history, a new
production complex and state-of-the-art R&D, sales and administration
buildings will be constructed on an area of 120,000 square metres by 2020.
The total investment volume is in the high eight figures. “This once-in-alifetime project is a long-term investment with a view to the next 50 years,”
commented CEO Oliver Hermes. “It will take the Wilo Group into new
dimensions.” The ground-breaking ceremony for the plant will take place in
late 2015, with operations set to begin in spring 2018. The entire new Wilo
Campus, which will concentrate the research and development, production,
logistics and administration activities of the traditional company at its
historical headquarters in Dortmund, is scheduled for completion in 2020.
WILO SE is one of the world’s leading manufacturers of pumps and pump
systems for building technology, the entire water management sector and
industry. The Group, which generated revenues in excess of EUR 1.2 billion in
the past year, is heavily involved in research and development with a view to
the future. The Dortmund-based company is increasingly evolving from a
component supplier into a system supplier. Wilo is synonymous internationally
with high-end technology in the pump segment. The company has around
7,500 employees at over 60 subsidiaries worldwide.
Wilo press contact and image requests
Wilo corporate news
Corporate Communications
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Press Release
Kay Hoffmann
T +49 231 4102-7745
kay.hoffmann@wilo.com
Wilo product news and innovations
Yvonne Daschek
T +49 231 4102-6647
yvonne.daschek@wilo.com
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