“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. 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,” said Hilti CEO Christoph Loos in explaining the 2019 annual results.
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. Similarly to the previous year, Latin America posted an increase of 8.5 percent, driven by the further recovery of the Brazilian market. The performance in the Eastern Europe / Middle East / Africa region was mixed (+3.7%). While the Middle East was affected by political tensions, Eastern Europe saw double-digit growth. In the Asia/Pacific region growth slowed to 4.3 percent and was therefore below expectations.
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 1000 employees more than at the end of 2018 (+3.5%).
The operating result rose 7.4 percent, at CHF 783 million, while net income was up 8.2 percent to CHF 591 million, leading to an increase in the return on sales (ROS) to 13.3 percent. The return on capital employed (ROCE) was 0.8 percentage points lower than in the previous year, at 19.8 percent, due to 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 due to 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. Without the insecurity from the corona virus a continuation of the current momentum is expected: mid-single digit sales growth with a similar profitability as in 2019. An assessment of the additional virus impact on the business results 2020 is not possible yet.
The 2019 Company Report and the 2019 Financial Report are available online
