Annual Report of the Würth Group 2010

156 Pages·2011·4.51 MB·English

AN ENTERPRISING
Annual Report of the Würth Group 2010
BE ENTERPRISING.
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14 steps to make your ideas a success
FACTS AND FIGURES
2010
WÜRTH IN BRIEF BOARDS GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
1 WÜRTH IN BRIEF
1 Company profi le The units of the
1 Highlights 2010 Allied Companies:
2 The Würth Group at a glance 31 Electrical Wholesale
3 Operational units 2010 32 Trade
33 reca Group
34 Production
4 BOARDS 35 Tools
36 Electronics
4 Report of the Advisory Board 37 Screws and Standard Parts
8 Foreword by the Chairman of 38 Financial Services
the Central Managing Board
12 Legal structure and organization 39 Results of operations, net assets
of the Würth Group and fi nancial position
13 Advisory Board 44 Research and development
14 Central Managing Board 46 Risk and opportunities report
15 Executive Board 50 Employees
16 Milestones in Würth’s history 53 Corporate social responsibility
17 Celebrations in 2010 54 Corporate governance report
55 Subsequent events
56 Outlook
18 GROUP MANAGEMENT REPORT
59 CONSOLIDATED FINANCIAL STATEMENTS
18 Economic environment
19 Business development 60 Consolidated income statement
20 Sales by region 61 Consolidated statement of
comprehensive income
24 The operational units 62 Consolidated statement
of the Würth Group of fi nancial position
64 Consolidated statement of cash fl ows
The Würth Line 66 Consolidated statement
divisions: of changes in equity
26 Metal 67 Consolidated value added statement
27 Auto 68 Notes to the consolidated
28 Wood fi nancial statements
29 Industry
30 Construction
COMPANY PROFILE
Family business on course for growth. The parent company of the Würth Group, Adolf Würth
GmbH & Co. KG, was founded by Adolf Würth in 1945 in the town of Künzelsau in Baden-Württemberg,
Germany. After the sudden death of his father in 1954, Prof. Dr. h. c. mult. Reinhold Würth, today
Chairman of the Supervisory Board of the Würth Group’s Family Trusts, took over the business at the
age of 19. He turned the screw business, which started out with sales of EUR 80,000, into a global
market leader in trade with assembly and fastening technology.
The Würth Group has two operational units: the Würth Line companies and the Allied Companies.
The Würth Line companies focus on the traditional core business, the sale of assembly and fastening
materials. Allied Companies are companies that operate as trade or production businesses in related
business areas, as well as fi nancial service providers. The business segment ‘Diversifi cation’ that also
belongs to the group of Allied Companies includes service businesses in logistics and the hotel and
restaurant trade as well as one junior company.
The Group’s strategy and further development are characterized by a focus on its own core compe-
tencies and the corporate culture. The sales organization in particular, which is geared to customer
proximity, the associated service concept and top quality are some of the features that set the services
and products of the Würth Group apart.
Würth stands for quality and customer proximity. The visionary approach of management
and all employees drives the company to continually reach new milestones. The management style
is characterized by respect for the employees and their work. This refl ects the company’s aim of being
optimistic, dynamic and responsible and not just keeping its customers satisfi ed, but inspiring them.
HIGHLIGHTS 2010
» Sales of the Würth Group rise by 14.8 percent to EUR 8.6 billion.
» At EUR 385 million, the operating result increases at a stronger rate than forecast.
» The Würth Group has 408 entities serving the market in 84 countries.
» There are 62,433 employees in the Würth Group worldwide,
more of 30,000 of whom are permanently employed sales representatives.
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WÜRTH IN BRIEF BOARDS GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS
THE WÜRTH GROUP AT A GLANCE
Würth Group
2006 2007 2008 2009 2010
Sales in millions of EUR 7,748 8,489 8,816 7,522 8,633
Employees Number 54,906 63,699 62,811 57,882 62,433
Pre-tax operating result* in millions of EUR 515 640 545 235 385
Return on sales % 6.7 7.5 6.2 3.1 4.5
EBIT in millions of EUR 549 679 575 267 398
EBITDA in millions of EUR 749 908 853 549 690
Net income for the year in millions of EUR 307 419 367 111 268
Cash fl ow from operating activities in millions of EUR 411 506 434 800 216
Capital expenditures in millions of EUR 425 479 453 261 283
Equity in millions of EUR 2,278 2,402 2,517 2,600 2,867
Total assets in millions of EUR 5,083 5,680 6,107 6,292 6,826
Rating by Standard & Poor’s ** A/stable A/stable A/stable A/neg. A/stable
Rating by Fitch Ratings ** A/stable A/stable A/stable A–/neg. A–/stable
The consolidated fi nancial statements of the Würth Group are prepared in accordance with the International Financial Reporting Standards (IFRSs).
* Earnings before taxes, impairment of goodwill and fi nancial assets, and changes recognized in profi t or loss of non-controlling interests disclosed as liabilities
** Rating abbreviations: Negative outlook: /neg.
SALES OPERATING RESULT
WÜRTH GROUP in millions of EUR WÜRTH GROUP in millions of EUR
Operating result in millions of EUR
Return on sales as a percentage
8,816
8,489 8,633 640
8,000 7,748 7,522 600 12.0
545
515
6,000 450 9.0
385
4,000 300 6.0
235
2,000 150 3.0
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
2
OPERATIONAL UNITS 2010
SHARE IN SALES
Würth Line divisions
2010 2010 2009 Change
% in millions of in millions of %
EUR EUR
Metal 16.8 1,452 1,317 +10.3
Auto 15.1 1,305 1,172 +11.3
Wood 10.4 895 853 +4.9
Industry 7.8 677 540 +25.4
Construction 6.1 526 473 +11.2 Allied Companies
Total 56.2 4,855 4,355 +11.5
SHARE IN SALES
Units of the Allied Companies
2010 2010 2009 Change
% in millions of in millions of %
EUR EUR
Electrical Wholesale 10.3 890 789 +12.8
Trade 8.2 707 662 +6.8
reca Group 5.3 460 421 +9.3
Production 5.2 444 374 +18.7
Tools 3.4 291 259 +12.4
Elektronics 6.5 561 343 +63.6
Würth Line
Screws and Standard Parts 2.8 246 177 +39.0
Financial Services 0.8 71 71 –
Other 1.3 108 71 +52.1
Total 43.8 3,778 3,167 +19.3
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WÜRTH IN BRIEF BOARDS GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF THE ADVISORY BOARD
Bettina Würth, Chairwoman of the Advisory Board of the Würth Group
Ladies and Gentlemen,
2010 was a special anniversary year for the Würth Group. My father celebrated his 75th birthday and the company celebrated
65 years in existence. Both of these events are of symbolic meaning for the entrepreneurial spirit that has allowed the Würth
Group to enjoy such lively development over the years. At the birthday and anniversary celebrations, Adolf Würth GmbH &
Co. KG put on an impressive display of the developments it has introduced throughout its history. At the same time, it was clear
that the lively development is continuing even now, with clever user solutions, new sales channels and logistics developments,
all of which add value for our customers.
These developments are nurtured by one important quality, which my father has anchored across the entire Würth Group. It is
our enterprising spirit that keeps us moving forward. An enterprising spirit makes lots of things easier. It heightens alertness and
attention, enabling us to quickly recognize the signals of relevance for our business. It gives us the confi dence to tackle new
tasks and maintains that element of fun at work.
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AN ENTERPRISING SPIRIT
HEIGHTENS ALERTNESS.
The signifi cance of this philosophy for the Würth Group was evident already in the crisis year 2009. Despite the adverse
circumstances, we never lost our enthusiasm for the company. We accepted the challenges and overcame them through our
decisive action. In 2010 things were looking up. Although not all Würth entities were fortunate enough to be buoyed by an
economic upturn, we were able to progress full steam ahead in many areas.
However, it is not only in crisis situations that we subject ourselves to scrutiny and determine how to pave the way for our future.
It is one thing to lay valuable groundwork and focus on strengths in troubled times. But it is another to keep an eye on the ball
and get back in the game at full creativity when our market environment appears to have returned to a comfortable level. The
Würth Group has skillfully mastered both of these challenges in the past two years, thanks to all of our employees. Taking re-
sponsibility as if they were their own boss, they developed new measures and implemented them enthusiastically. As a result,
they actively assumed a share of the responsibility for the Würth Group’s economic success. For this, I am especially grateful.
So what does “assuming responsibility” actually mean? For me, it means having the courage to make decisions and act diligently.
I am certain that like many other family businesses, Würth can set an example in this respect. The strategist Prof. Dr. Venohr dis-
covered that 70 percent of small and medium-sized businesses worldwide are family-owned, and that their system of values is
what sets them apart from a simple shareholder value orientation. The same applies for the Würth Group. Our absolute prior-
ity is the sustainable growth of the company, and not simply profi t. That is why we aff ord our employees considerable freedom
in defi ning their tasks and developing new ideas. Furthermore, we have a high rate of reinvestment. We are convinced that,
among other things, our long-term success hinges on continuing to invest in employee training, and we act accordingly.
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WÜRTH IN BRIEF BOARDS GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS
Work of the Advisory Board
This fundamental approach also guided the work of the Advisory Board of the Würth Group in 2010. The board held three
in-depth meetings in 2010, each of which was based on reports from the Central Managing Board on the business situation,
planning, and risk and opportunity management. All transactions subject to approval pursuant to the company statutes were
submitted to the Advisory Board for decision in good time and considered in detail; in urgent cases, resolutions were passed
by circularization.
As 2010 began, the work of the Advisory Board was still heavily infl uenced by the economic crisis. At this stage, the aim was
to “weatherproof” the company’s fi nancing and maintain its high level of liquidity. This was also with a view to securing a good
rating for the Würth Group, which is essential for our activities on the capital market. Over the course of the year as the eco-
nomic recovery picked up pace, the Advisory Board turned its attentions increasingly to the Group’s risk management, with the
aim of incorporating the experiences gained from the crisis into future precautions. Numerous developments at the company
and in the regulatory framework meant that compliance also became a focus of the Advisory Board’s work. The board looked
specifi cally at the challenges faced by our global Group with its decentralized structure.
The Advisory Board maintained close contact with the Central Managing Board and the management of the entities and was
kept up to date of all important transactions and current events, enabling it to support and advise management on any strate-
gic decisions.
The Advisory Board has formed three committees, namely the audit committee, the investment committee and the personnel
committee. These serve to increase the effi ciency of the Advisory Board and carry out preparatory work on complex issues.
The committee chairs each report regularly to the Advisory Board on the work of the committees.
The Advisory Board’s audit committee met four times in 2010. At the meeting on 13 and 14 April 2011 it closely examined
the 2010 consolidated fi nancial statements including the Group management report and the audit report prepared by Ernst
& Young GmbH Wirtschaftsprüfungsgesellschaft. Ernst & Young audited the consolidated fi nancial statements and the Group
management report and issued an unqualifi ed opinion thereon. The audit committee examined these documents and approved
them. The audit committee also focused on the risk management system, the compliance and corporate governance structure
as well as internal audit.
The Advisory Board’s investment committee met a total of three times in 2010. The investment projects proposed were as-
sessed and classifi ed according to urgency and signifi cance. The Würth Group will continue to exercise the necessary caution
in pursuing its traditional investment culture as a prerequisite for growth of the company. In line with this, capital expenditures
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