STIHL continues growing

Despite the housing crisis in the United States, STIHL’s largest single market, and the weak U.S. dollar, the STIHL Group achieved turnover growth of 3.4 percent in 2007. Worldwide turnover was EUR 2,087.8 million and would have been 2.5 percent higher had foreign exchange rates remained unchanged. Growth was due to higher unit sales. Looking at the future, STIHL Executive Board Chairman Dr. Bertram Kandziora said at the company’s balance sheet press conference:  “We are creating a healthy basis for our future growth with high self-generated investments in product development, production and distribution logistics.“

Finance and housing crises has marked impact
Growth rates in chain saws were recorded in all major markets with the exception of Italy, the U.S. and Germany. The market for gasoline power tools profited from the favorable development in Europe, especially Eastern Europe, and strong growth in Latin America. Turnover declined in the United States. The finance and housing crisis in the U.S. has had considerable impact. The sharp 25 percent fall in new housing starts weakened growth there in 2007. About 76 percent of wood in the U.S. is used in residential construction and renovation. The housing crisis and its effects on the upstream forestry and wood industries contributed to a turndown in unit sales of chain saws. On the other hand, unit sales of outdoor power tools remained steady even though weather conditions across large areas of the United States tended to be unfavorable. The summer in particular was too hot and dry in many places, which meant that unit sales of power tools were below the previous year’s level in those areas. Overall, however, STIHL was able to further strengthen its global market position with above-average unit sales. The share of turnover achieved outside Germany was 88.3 percent. The eurozone accounted for 34.1 percent of total turnover, while 46.8 percent was achieved in the EU as a whole.

Numerous new product launches
STIHL launched a large number of new products and innovations on the market in 2007. The main goals of the developments were the reduction of fuel consumption and emissions, new materials and more convenience for customers. Product launches included the new STIHL MS 171, MS 181 and MS 211 compact saws. By employing a new 2-MIX technology it was possible to reduce exhaust emissions by more than 60 percent and bring down fuel consumption and CO2 emissions by 20 percent. STIHL development engineers also succeeded in reducing vibrations by 50 percent.

Investments at record level
2007 was another year of heavy investments in the STIHL Group. Of the total investment volume of EUR 170.9 million (previous year EUR 164.2 million), the German founding company accounted for 23 percent and the subsidiaries at home and abroad for the remaining 77 percent. About 90 percent of investments went to the manufacturing subsidiaries, primarily for expanding production plant and buildings. The Swiss subsidiary, for example, began construction of a second chain production plant. In the United States, a new bar production plant was completed and has started production. VIKING opened a center of excellence with development and testing facilities in its new extension in Austria. The number of employees grew along with the investments: The worldwide workforce increased 3.4 percent to 9,779 as of December 31, 2007.

Founding company also records growth and takes on 63 new apprentices and trainees
Turnover at the founding company, the seven production plants of ANDREAS STIHL AG & Co. KG in Germany, was up 4.3 percent to EUR 906.5 million. Investments totaled EUR 39.4 million, which was EUR 4.5 million higher than the previous year. The workforce at the founding company increased 1.2 percent to 3,833. As of December 31, 2007, a total of 2,860 men and women are employed in Waiblingen, 312 in Ludwigsburg, 599 in Prüm -Weinsheim and 62 in Wiechs am Randen. 63 new apprentices and trainees were taken on in 2007. STIHL trains young people over and beyond its own requirements and thus demonstrates its social responsibility. Dr. Bertram Kandziora stressed the high quality of training at STIHL: “Vocational training at STIHL is very popular among young people and has an excellent reputation. This is also evident from the growing number of applications which we receive.”

Chairman is cautiously optimistic for 2008
“We are planning carefully this year because the finance and housing crisis in the United States in particular has a considerable bearing on our market segments,“ commented Dr. Kandziora on expectations for the current year. At the present time it is not possible to foresee the end of this crisis and all its worldwide connotations. On top of that, the situation of a strong euro over a weak dollar impacts the turnover numbers, which are presented in euros. Referring to the remainder of the year, the chairman said: “STIHL is well positioned with its products and manufacturing facilities in different currency areas. This means the necessary market price level is reached all over the world in spite of the serious currency fluctuations. Even though the situation in the United States continues to be tense, I view further development over the year with cautious optimism.”

^{Company portrait
The STIHL Group develops, manufactures and distributes power tools for farming, forestry and the construction industry. The garden power tool range from VIKING rounds out the product line. The products are generally distributed by authorized dealers including 32 marketing subsidiaries, more than 120 importers and about 35,000 dealers in over 160 countries. STIHL has been the world’s top-selling chainsaw brand since 1971. The company was founded in 1926 and is based in Waiblingen near Stuttgart. In 2007, STIHL achieved a worldwide sales volume of more than EUR 2 billion with a workforce of 9,800.}

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Caption:

Executive board chairman Dr. Bertram Kandziora informed journalists about the key figures of the financial year 2007.

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