Quarterly report: Einhell continues to drive internationalization
The construction of its own battery production facility in Hungary, corporate investment in South Africa, Thailand and Vietnam, discussions with potential acquisition targets in the USA, the world's largest DIY market, the further diminution of inventories, a significant reduction in current bank liabilities, and a much improved cash flow – Einhell Germany AG is making progress in its internationalization strategy. In its latest financial report, the group reports sales of EUR 755.8 million for the months of January through September. The board of Einhell Germany AG has confirmed the forecast for the 2023 fiscal year that it updated in October, and anticipates posting annual sales of around one billion euros along with a pre-tax return of about 8.0 percent. Overall, the Einhell Group has seen sales grow roughly 87 percent over the last five years.
Andreas Kroiss, CEO of Einhell Germany AG: “Einhell Germany AG is in such a strong position that we will continue our internationalization strategy in what are difficult economic times. Our goal is to gain market share in relevant countries so that we are in the best starting position when consumer demand picks up again from its current weakness. We are aiming for market leadership for battery-operated DIY and garden tools in all target countries.”
That is why Einhell is also stepping up its investment in global marketing and continuing to build on the partnerships with FC Bayern and the Mercedes-AMG PETRONAS F1 Team. “The cooperation we started with the Mercedes-AMG PETRONAS F1 Team at the end of last year is already paying off worldwide in terms of both the visibility and the image of the Einhell brand, underlining our highest technology standards,” says Kroiss. Launched in 2021, the partnership with FC Bayern will also be developed with the aim of ensuring even greater visibility for the Einhell brand.
Implementation of the internationalization strategy essentially hinges on three elements, Kroiss says: “Firstly, the expansion of our Power X-Change battery platform to about 450 products by 2027. Secondly, we will enhance the differentiation of our production sites and build our own battery production facility in Hungary. And thirdly, we are investing in new markets. Our market launches in Canada and Finland in 2022 confirm our expectations of the very great economic potential in both countries. This year we boosted our holding in Lawn Star (Pty) Ltd. and Mould Star (Pty) Ltd. in South Africa to 100 percent, in Vietnam we acquired 100 percent of Swisstec Sourcing Vietnam Joint Stock Company, and in Thailand we took a 66.67 percent stake in Surazinsano Co., Ltd. Our next goal is to break into the largest DIY market in the world – the USA. We’re already holding very promising discussions with potential takeover candidates there.”
Updated forecast confirmed
The Einhell Group posted sales of EUR 755.8 million (prior year EUR 805.7 million) in the first three quarters of 2023. The decline is largely due to the fact that some currencies lost significant ground against the euro. This had a particular impact on sales by the companies in Argentina, Canada, Turkey and Australia. After adjusting for currency differences, group sales came in 2.7 percent down (6.2 percent prior to currency adjustments) on the same period the previous year.
To lay the foundation for further sustainable growth, inventories were significantly reduced to EUR 333.2 million (prior year EUR 469.2 million). They had been stocked up during the coronavirus pandemic in order to ensure supply capacity. The sharp fall in bank liabilities to EUR 105.3 million, from EUR 210.2 million in 2022, is also positive news. Net debt dropped 70.7 percent from EUR 200.6 million in 2022 to EUR 58.8 million now. This led to a significant improvement in cash flow.
In its outlook, the board of Einhell Germany AG confirmed the forecast that it updated in October, and anticipates posting total sales for the 2023 fiscal year of around one billion euros along with a pre-tax return of about 8.0 percent.
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.