STIHL continues growth

- Dealer network strengthened
- Stringent emission limits present opportunity for technology leadership
- Range of electric power tools reorganized

The STIHL Group achieved a worldwide turnover of EUR 1,460.2 million in the first eight months of the year. This 5.7 percent increase in turnover over the same period last year is mainly the result of higher unit sales and would have been 8.2 percent had foreign exchange rates remained unchanged. It is primarily the drop in the value of the U.S. dollar against the euro which is responsible for this development. “We were able to boost our unit sales in most of the world’s big markets. We achieved particularly strong growth in Latin America, Eastern Europe and Asia,” explained STIHL Executive Board Chairman Dr. Bertram Kandziora at the company’s autumn press conference.

Turnover up at German founding company, dealer network strengthened
Turnover of the German founding company, ANDREAS STIHL AG & Co. KG, grew 7 percent to EUR 618 million up to the end of August 2007. The founding company’s seven manufacturing plants are part of an international network and supply products to 32 sales subsidiaries and more than 120 importers. Sales to end users in Germany and the rest of the world are through servicing dealers only. “Qualified service is a constituent part of every STIHL product. We will therefore continue to rely on servicing dealers because our customers receive optimal professional advice, service and parts support from them,” stresses Dr. Kandziora. STIHL has a policy of intensive dealer training and supports servicing dealers in many ways – such as seminars, for example, workshop equipment, advertising and showroom design.

Group’s workforce grows
Unit sales have grown in all key product categories, i.e. chainsaws and power tools, guide bars and chains. The demand for VIKING products is also up. Investments, production output and the number of employees increased throughout the Group. The Group’s workforce as of August 31, 2007 has grown 5 percent to 9,852 in the past twelve months. The number of employees at the founding company was up 2.5 percent to 3,948 at the end of August. Of this total 2,948 are employed in Waiblingen, 325 in Ludwigsburg, 602 in Prüm Weinsheim and 73 in Wiechs am Randen.

More effective environmental protection with new products
In addition to steady improvements in performance, functionality and convenience, further reductions in emissions are one of the main aims of research and development at STIHL. In spite of much stricter emission limits in the important U.S. and EU markets, the company will continue to expand its product line. Environment friendly products are seen as an opportunity to consolidate technology leadership in the industry and further improve the company’s own engine technology. The low emission STIHL MS 171, MS 181 and MS 211 chainsaws, which are to be launched in autumn, have been developed to comply with phase II of the EU emissions legislation that comes into force in 2008. Other new products include an axial blower from STIHL and a lawn tractor from VIKING. In addition, the new STIHL TS 410 and TS 420 cut-off machines and the new STIHL HL 90 K long-reach hedge trimmer were presented at the press conference.

STIHL adds hand-held electric power tools to range
Starting in 2008, STIHL will be expanding its range to include hand-held electric power tools for garden and landscape care. Even today, the share of servicing dealers’ customers who are looking for electric power tools to perform work in areas close to the house is more than 50 percent, and it will continue to grow. In order to take account of this development, the STIHL Group has reorganized the STIHL and VIKING product lines: As from the beginning of 2008, all hand-held gasoline or electric power tools will be sold under the STIHL brand name, while VIKING will concentrate on gasoline and electric power tools for tilling soil as well as lawn mowers, ride-on mowers and garden shredders. “This reorganization enables servicing dealers and end users to clearly differentiate between the two product lines,” says Dr. Kandziora.

The following product groups are to be included in the STIHL line of electric power tools: Grass trimmers and brushcutters, hedge trimmers, leaf blowers and vacuums.

The new electric power tools in the STIHL range are characterized by features to which female users attach special importance, i.e. low weight and simple operation, which will enhance the appeal to this potential customer segment.

Favorable growth expected for whole year
In Latin America this year, the markets profited from favorable weather conditions and a beneficial economic climate. The EU market was also in good shape. However, a recession in the forestry and wood processing industry as well as a reduction of inventory levels in the U.S. market resulted in a dip in sales. In euro terms, the North American market suffered losses due to the weak U.S. dollar.  Nevertheless, Dr. Kandziora expects a favorable conclusion to the year: “We expect turnover growth for the STIHL Group to remain on course for the remaining months of 2007.“

Voucher copy requested.

Caption::

Dr. Bertram Kandziora, Chairman and Senior Vice President Manufacturing and Materials.

Photograph: STIHL (Reprint free of charge / voucher copy requested)