Hilti continues on profitable growth path
March 22, 2016
Hilti Group, headquartered in Schaan, Lichtenstein, has reported that it closed the 2015 financial year with sales growth of 5.8% in local currencies. Despite the strong Swiss franc, operating result, return on sales and return on capital employed (ROCE) were all stated to be up again over the record figures of the previous year.
Business was particularly vibrant in North America where double-digit growth resulted in sales exceeding the US $1 billion mark for the first time in the company’s history. In Europe, business stabilised further and not only the markets in Northern Europe continued to show high growth, but also Central, Western and Southern Europe performed well across the board.
On the other hand, many emerging countries were faced with a challenging environment caused by investment freezes due to the low oil price along with other economic and geopolitical tensions. As expected, the massive appreciation of the Swiss franc had a negative impact on overall sales and turned the positive growth of 5.8% in local currencies into a slightly negative sales curve of -2.5% to CHF 4,384 million (previous year: CHF 4,497 million).
Despite strong exchange rate pressure and continued high investments, the operating result grew yet again from CHF 537 million to CHF 547 million (+2%). As a result, return on sales (ROS) was up from 11.9 to 12.5%. Due to higher tax expenses, net income was slightly below previous year at CHF 410 million (-4%). With a rise from 16.8 to 19.0%, return on capital employed (ROCE) was another key metric that showed improvement over 2014.
“2015 was a challenging year for us with highly satisfying results in the end. Over the next few years we will benefit from having made substantial investments to accelerate our growth,” stated CEO Christoph Loos. In line with this, Hilti further stepped up its investments in new products, services, software and sales resources. The Group’s R&D spending grew by +8.1% to CHF 240 million. Headcount was up to 23,385, an increase of +5.1%.
For the current year, Hilti expects moderate market growth at best. As far as the overvalued Swiss franc is concerned, the Group does not anticipate any substantial improvement and reckons with persistent substantial exchange rate volatility. “Nevertheless, we are confident that the investments made over the past few years will trigger higher growth in local currencies, that the operating result will be increased again and that we will be able to grow our global market shares further,” added Loos.
