The Hilti Group increased sales by 4.3 percent in 2019 to CHF (Swiss francs) 5.9 billion (about U.S. $6.2 billion) amid a challenging economic and currency environment. In local currencies growth amounted to 6.3 percent. The operating result rose by 7.4 percent to CHF 783 million despite substantial ongoing investments.
The North America and Europe business regions grew in local currencies by 7.3 and 6.9 percent, respectively. The above-average growth rates in Central and Western Europe were particularly gratifying. Latin America showed an increase of 8.5 percent, similar to 2018, driven by the further recovery of the Brazilian market. The performance in the Eastern Europe / Middle East / Africa region was mixed (+3.7 percent). While the Middle East was affected by political tensions, Hilti realized double-digit growth in Eastern Europe. In the Asia/Pacific region growth slowed to 4.3 percent and was therefore below expectations.
“Against the backdrop of noticeable economic slowdown and negative currency influences we achieved solid growth that was substantially greater than what was seen in the worldwide construction market,” said Hilti CEO Christoph Loos. “Our profitability continues at a high level even though we made significant investments in implementing our corporate strategy and in strengthening the future sustainability of the Group.”
Expenditures on research and development, at CHF 367 million, were 3.2 percent higher than in the previous year. This formed the basis for the high number of innovations (70) brought to market in 2019. At the end of the year the group employed 30,006 team members, roughly 1,000 employees more than at the end of 2018 (+3.5 percent).
Operating results rose 7.4 percent to CHF 783 million, while net income was up 8.2 percent to CHF 591 million, leading to an increase in return on sales (ROS) to 13.3 percent. Return on capital employed (ROCE) was 0.8 percentage points lower than in the previous year, at 19.8 percent, because of a change in accounting practices (IFRS 16 – lease liabilities allocated to operating capital).
In 2020 the Hilti Group expects the market environment to remain challenging because of ongoing political uncertainties and trade conflicts, as well as a possible global effect stemming from the coronavirus. The company is nonetheless adhering to its strategic objectives and will use its solid financial position to make additional significant investments in innovative solutions and in the digitalization of corporate processes. Sales growth over the entire year is anticipated to be in the mid-single digits while the company expects profitability to be around the same level as in 2019.
