Waiblingen, 4/25/2017 | Company press release

STIHL reports record revenue and strong growth in cordless power tools

  • Unit sales in cordless segment exceed expectations
  • Numerous new cordless and gasoline products for domestic and professional users
  • Connected products, the smart garden, Industry 4.0: STIHL is driving digitalization forward

“The STIHL Group’s revenue in 2016 grew 6.6 percent to 3.46 billion euros – a new record in the year of the company’s 90th anniversary. If foreign exchange rates had remained at the previous year’s level, the revenue growth would actually have been 9.5 percent,” said STIHL Executive Board Chairman Dr. Bertram Kandziora at the company’s balance sheet press conference. “We are accelerating the development of new cordless power tools and at the same time will continue to lead the way in gasoline technology.” STIHL is using the opportunities offered by Industry 4.0 and digitalization to further enhance benefits to the customer. STIHL will present new technologies and connected products in 2018. “The trend is moving towards the smart garden,” said Dr. Kandziora. “Compared to last year, I am expecting still much higher demand in 2017 – especially for our cordless power tools.” STIHL is planning significant investments to support growth, particularly at its German parent company. “We are currently looking for about 100 new staff to fill positions at the parent company, especially in the areas of cordless technology, electronics, IT and connected products.”

Unit sales of new cordless electric products exceed expectations

Revenue growth in 2016 was driven by significantly higher unit sales. Once again, the North American market was the most important engine of growth. Demand in Western Europe also markedly increased, in part due to the successful market launch of the COMPACT cordless power system. The Russian market slightly recovered. STIHL also achieved considerable increases in revenue on the German market over the last year. This development has also continued in the first quarter of 2017. The Executive Board Chairman stressed: “The new products and the demand they are generating have significantly exceeded our expectations, illustrating that STIHL quality is highly rated in every price and customer segment.” STIHL sales companies were able to gain market share in many countries. “In this way we are further consolidating our competitive position,” said Dr. Kandziora.

Integration of VIKING to power 2019 growth surge

The Executive Board Chairman expects an additional growth surge in the 2019 season, as the STIHL Group will also be selling the entire product line of garden power tool manufacturer VIKING exclusively under the STIHL brand. “Lawnmowers, which have previously only been available from VIKING and which will be sold under the STIHL brand from 2019, are the classic entry-level product in the market for garden power tools. Integration into a single brand – the STIHL brand which is well-known worldwide – will enable us to make our cordless power systems even more attractive to customers.”

High equity ratio of 70 percent facilitates long-term strategy

Global investment (209 million euros) again exceeded depreciation and amortization (151 million euros). Investments continued to be focused mostly on the company’s production and logistics facilities as well as new product development. “The equity ratio of the STIHL Group remains high at 70.5 percent. This is an important foundation for the independence of our family-owned company and our strategy’s long-term alignment. Furthermore, this healthy financial structure enables us to finance all investments from our own liquid assets,” explained Dr. Kandziora. The increase in unit sales also resulted in an increased headcount. The number of employees in the worldwide Group climbed 4.7 percent to 14,920 as at the end of the year.

Revenue and headcount also increased at the German parent company

In the last fiscal year, revenue at the German parent company, ANDREAS STIHL AG & Co. KG, rose by 2.4 percent to hit one billion euros for the first time. The export quota remains at the previous year’s level, at 88.9 percent. The highest revenue growth recorded was in the EU and North America. Investments totaled 70 million euros and, as in previous years, were higher than depreciation and amortization. Investment funds were allocated mainly to building projects, production facilities and IT activities. The German parent company will also see strong investment in the years ahead. As at the end of 2016, the number of people employed at the parent company increased by 4.3 percent to 4,366. Dr. Kandziora: “We are planning to considerably increase staff in the German parent company. At the moment we have more than 100 vacancies – mostly for first-rate experts. We consider this rising number of employees to be an investment in successful long-term business development. This recruitment boosts our power to grow.”

Digitalization drives increased customer benefits

“STIHL has developed a comprehensive digitalization strategy,” explained Dr. Kandziora. “For us, digitalization is a means of creating additional customer benefits. This may be evident in the characteristics of our products, in the interaction with customers or in new business models.” Industry 4.0 components and sub-systems have been used in the worldwide STIHL production network for some time; intelligent systems and processes are networked with each other worldwide. Collaborative robots are also in use. Dr. Kandziora: “We will also make use of the growing possibilities for further process optimization that digitalization offers.”

“Smart Connected” – intelligent networking of STIHL products

At STIHL, extensive development projects aimed at the networking of products are running under the “Smart Connected” banner. Today it is already possible to control the VIKING iMow robotic mower via an app. The new projects go far beyond this, moving towards a “smart garden”. As always, the focus of these developments is on the customer. For example, users of STIHL power tools will receive real-time information on their smartphones about the operational time, consumption or optimal use. Even centralized recording of geolocations of individual power tools is possible. In fact, the opportunities offered by digitalization are set to be more extensively utilized not only for the products themselves, but also in servicing at dealerships. Chairman of the Executive Board, Dr. Kandziora said: “We are working hard on intelligent technologies so that we will be able to present our customers with new digital applications from STIHL for the 2018 season.”

Entering the digital future with startups

To accelerate digital projects and move innovative business models forward to market-readiness more quickly, STIHL is participating in the ACTIVATR program run by Pioniergeist, a Stuttgart-based company. ACTIVATR brings together experienced startup founders with innovation-minded staff from established companies. ACTIVATR is intended to produce innovative ideas which will either stay within STIHL, or be independently active on the market in new startups which STIHL invests in. In three months the interdisciplinary team of founders developed ideas for two new business models. These ideas will be further refined in the course of the year, so that concrete products and services can be developed. There are also other new ideas currently in the pipeline.

In January 2017 the STIHL Group acquired a stake in GreenIQ. This Israeli startup specializes in the development and distribution of networked products for garden applications, such as irrigation and lighting. “This will accelerate our activities in the area of digitalization and connected products, such as the development of our own STIHL Smart Garden Hub,” said Dr. Kandziora.

Upcoming new STIHL products

Several new products will be launched on the market this spring: Adding to the PRO cordless power system will be the STIHL HSA 94 R for cutting back and the STIHL HSA 94 T for trimming – both quiet, high-performance professional cordless hedge trimmers. Also set for launch is the STIHL FSA 130 professional brushcutter with either a bike handle or wraparound handle. This expands the modular cordless power system for professional applications to more than 20 power tools. The range of attractively priced cordless power tools in the entry-level segment will also have some new additions: A hedge trimmer, lawn trimmer and blower, each with integrated battery. Other products have been launched since the beginning of the year, such as the entry-level STIHL HT 56 C-E gasoline pole pruner.

“We are working hard and offering an ever-broader range of cordless products, and we are doing so without compromising even a millimeter on our gasoline products,” summarized Dr. Kandziora. “This spring’s new arrivals are testament to this.” The STIHL COMPACT cordless power system will be extended with a second high-performance chainsaw for green area maintenance and simple trades activities: The STIHL MSA 140 C-BQ chainsaw. It is powered by a replaceable 36V lithium-ion battery which is compatible with all the other power tools in this modular cordless system. As well as chainsaws, the system includes a hedge trimmer, brushcutter, blower and lawn mower.

STIHL has launched the STIHL MS 462 C-M gasoline chainsaw which is designed for professional forestry work in medium and dense stands. Its engine weight of only six kilograms makes it the lightest high-performance saw in its displacement class (70 cubic centimeters). The optimized M-Tronic engine management system and an improved engine concept give this professional saw high power and excellent acceleration – “in other words, more fun and performance during work,” said Dr. Kandziora. Even before being launched to market the power tool made an impact at the innovation show ahead of the demopark trade fair: The demopark panel of experts awarded the STIHL MS 462 C-M the silver medal for its low weight.

New VIKING products

VIKING will also be contributing an additional product to the STIHL COMPACT cordless power system: The MA 235 lawn mower. With its compact tool dimensions, ergonomic mono comfort handlebar, a cutting width of 33 centimeters and weight of only 14 kilograms, the MA 235 is the perfect partner for small gardens with lawn areas of up to 200 square meters.

Hamburg Harbor and Norway to host STIHL TIMBERSPORTS® 2017

The STIHL TIMBERSPORTS® Series will be staged in Hamburg Harbor on May 20. For the Champions Trophy, the world’s eight best athletes compete against each other in four disciplines on the axe and saw, in a knockout tournament. This competition demands not only peak muscle power and technique from the athletes, but also an extreme level of endurance – it is considered to be the toughest format in sports lumberjacking. On the day before, the best young athletes will face each other at the Rookie World Championship in Hamburg. The international season finale, the STIHL TIMBERSPORTS® World Championships, will take place in Lillehammer, Norway on November 3 and 4.

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