Q1 2023: Einhell maintains growth trajectory
“In 2023 we will continue to build on the success of our Power X-Change battery platform, with which we aim to become the market leader for cordless DIY and garden tools,” said Andreas Kroiss, CEO of Einhell Germany AG, commenting on another strong quarter in the company’s history. Having crossed the EUR 1 billion threshold for sales in 2022, it is predicted to set another revenue record this year too: “We expect organic sales this fiscal year to increase by around 3 percent on the previous year. On earnings before tax, we are looking for a pre-tax return of about 8 to 8.5 percent. Difficult economic times also offer constant opportunities. We remain committed to our path.” To drive international growth even further, this summer Einhell will acquire two companies in Asia, while next year it is to begin work on establishing a dedicated production facility for batteries and chargers in Europe.
Sharp improvement in cash flow thanks to reduction in inventories
While the company was able to increase sales slightly in eastern Europe and overseas even after the record in the 1st quarter of 2022, there was consolidation in the DACH area – as expected – because inventories were reduced following the outbreak of the war in Ukraine. Revenue for the 1st quarter of 2023 totaled EUR 249.9 million, well above the EUR 229.6 million for the 1st quarter of 2021 but down on the EUR 292.3 million for the 1st quarter of 2022. At the same time, the reduction in inventories led to a sharp improvement in cash flow and a significant fall of EUR 107.8 million in bank liabilities.
In the 1st quarter of 2023 the Einhell Group posted earnings before tax (EBT) of EUR 20.3 million with a pre-tax return of 8.1 percent, corresponding to a rise of 16 percent on the 1st quarter of 2021. In the same quarter the previous year EBT had come to EUR 24.6 million.
Further expansion: Einhell acquires two companies in Asia
Before the end of the summer, Einhell Germany AG will acquire a 66.67 percent majority stake in an established company in Thailand in order to gain direct access to the local DIY market. The second transaction this summer is a sourcing company based in Vietnam, which Einhell will acquire in its entirety. The company specializes in screws, fixing materials, and various hand tools, and its main customers are DIY chain stores in Europe and Canada. The acquisition will allow the Einhell Group to significantly strengthen its expertise in the field of accessories and hand tools. “This is another step in our second-source strategy, which we hope will enable us to put our procurement process on a broader footing,” said Kroiss, explaining the investment.
To develop the Einhell brand further on the international stage, Einhell is counting on cooperation with two strong partners. Alongside the partnership with soccer club Bayern Munich, which has been in place since 2021, Einhell has also been “Official Tool Expert” of the Mercedes AMG-PETRONAS F1 Team since 2023. Both partnerships feature in the TV campaign that is being rolled out internationally. “We are continuing to focus on driving the internationalization of our group and increasing our market share in the target markets,” Kroiss added in conclusion.
About Einhell Germany AG
Einhell is a leading manufacturer of state-of-the-art tools and devices for the house and garden and will be celebrating its 60th anniversary in 2024. From its headquarters in Landau/Isar (Bavaria), the internationally successful company has continuously expanded its innovative rechargeable battery platform Power X-Change and is now the market leader in the area of cordless tools and garden devices. For many years Einhell has set new standards in terms of endurance, performance, and safety. Einhell customers appreciate the freedom of cordless operation for all their DIY projects, as well as the excellent value for money that Einhell products represent and the first-class customer service offered by the company.