STIHL puts its faith in new products to combat the crisis

The turnover of the STIHL Group in the period from January to August 2009 dipped 7.5 percent to EUR 1,376 million; the influence of foreign exchange rates was negligible at 0.1 percent. As the overall downturn in the markets was greater, the company has gained further market shares worldwide in almost all product categories. “On the whole we expect a single-digit drop in turnover for the current year,” said STIHL Executive Board Chairman Dr. Bertram Kandziora at the company’s autumn press conference. “In the face of the global economic crisis we are putting our faith in new product developments and investing in the future. We profit from our sound financial basis, which is underscored by an equity ratio of 60 percent.”

Worldwide unit sales down – German market stable
Unit sales of chain saws and power tools were down. Significant declines were recorded in several Eastern European markets. Unit sales of cut-off machines, which are used in the construction industry, were particularly hard hit by the collapse of building activity in North America and much of Western Europe. From STIHL’s point of view, however, business on the German market was relatively stable and increased slightly over the same period last year. “We also expect to see further growth in Germany in future. In order to be prepared for that we are investing EUR 25 million in expanding our distribution logistics facilities,” explained Dr. Kandziora. The new logistics center at the German sales subsidiary in Dieburg will be officially opened on September 25.

Employment levels down
The STIHL Group’s worldwide workforce increased to 11,065 as of August 31, 2009, due to the acquisition of carburetor manufacturer Zama at the end of 2008. Without Zama, the workforce totals 9,907, which represents a decline of 1.6 percent over the previous year. The fall in the number of employees is a direct result of the lower production output at all factories compared to last year.

STIHL braves crisis by developing new products
The company is implementing a broadly based cost-cutting program in the group, but is not saving on the development of future technologies. Dr. Kandziora outlined the corporate strategy: “Being a technology leader we do not save in the wrong places. On the contrary, our strategy in the global economic crisis is to extend our lead over the competition by developing new products and new technologies. In this process we are increasingly utilizing the advantages of electronic systems in products in order to make it easier for our customers to operate the machines.” For example, STIHL entered a new product segment in spring with its HSA 65 and HSA 85 cordless hedge trimmers. Further cordless power tools for forestry and landscape maintenance are to follow. They will offer the same performance as gasoline-powered units and are equally suitable for professional users and demanding private users.

Other examples of new product developments: Simple, push-button starts are now possible with the electric starter of the new FR 480 C-F backpack brushcutter announced in summer. The new MS 441 C-M chain saw will be launched in autumn and is the first model to be equipped with “M-Tronic”. This electronic engine management system makes manual carburetor adjustments superfluous and automatically ensures optimum timing and fuel metering. This is reflected in a particularly convenient and much simpler starting procedure, optimum power delivery and spontaneous acceleration. Also new are the SR 430 and SR 450 sprayers de-signed for use in fruit, wine and vegetable growing, which have an excellent spraying range of up to 14.5 meters.

Furthermore, VIKING will be launching robot mowers in 2010. The two iMow models MI 322 C and MI 555 C automatically mow and mulch areas between 400 and 2,000 square meters.

Fewer employees at German founding company, jobs of permanent staff secure
Turnover of the German founding company, i.e. the seven manufacturing plants of ANDREAS STIHL AG & CO. KG, dipped 21 percent to EUR 438 million. The main reason for this development is the building slump in a number of countries. STIHL is the world market leader in cut-off machines, which the group manufactures only at the founding company, and with a high level of in-house machining. The production output and unit sales of professional chain saws also dropped. The workforce at the founding company decreased over the last 12 months to a total of 3,720 as of August 31, 2009. This is mainly due to a reduction in the number of workers on limited-term contracts of employment. At the same time, employees were able to considerably reduce credits in their work-ing time accounts. At the end of August the number of employees at the German plants was 2,793 in Waiblingen, 296 in Ludwigsburg, 577 in Prüm Weinsheim and 54 in Wiechs am Randen.

In July this year the founding company gave the regular staff of 3,300 men and women in Germany a job guarantee up to 2015. It was agreed that there will be no layoffs for operational reasons for the next six years. The founding company guarantees a regular workforce of 3,300 men and women. Furthermore, the company has undertaken to continue its practice of offering 60 new training places per year. The present level of the company’s voluntary social benefits will also be maintained.

(Voucher copy requested.)

Caption:

Picture 1:
STIHL executive board members (from left): Wolfgang Zahn, Dr. Klaus Detlefsen, Jürgen Steinhauser, Dr. Bertram Kandziora, Günther Gaßlbauer.

Picture 2:
Executive board chairman Dr. Bertram Kandziora informed journalists about the previous key figures of 2009.

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