The Würth Group, renowned for its assembly and fastening systems, is bracing for significant challenges, with its patriarch Reinhold Würth warning of a stark profit decline due to the worsening economic climate.
At age 89, Reinhold Würth has stated he anticipates a staggering reduction of 25 to 30 percent in the company’s profit before taxes for the current fiscal year, which is expected to end with numbers significantly lower than the previous year. To put this perspective, the pre-tax earnings for 2023 was reported at €1.4 billion. For 2024, Würth predicts only minimal decline of 2 percent in revenue, shifting from €20.4 billion earned in 2023 to slightly less the following year.
Stepping back from his longstanding leadership role, Würth is preparing to pass the reins to his grandson, Benjamin Würth, set to officially take over the chairmanship of the foundation supervisory board on January 1, 2025. This transition marks not only a generational shift but raises questions about where the family-owned business will navigate through these turbulent economic waters.
Despite the grim forecasts, Reinhold Würth asserts his confidence in the company’s long-term health, noting, "We have still got an equity ratio of 48 percent. The company is very healthy. We have 9 billion euros of equity on our balance sheet." He acknowledges the inventory reductions among their customers, who have been relying on existing stock but suggests this could soon lead to replenishment orders, providing some respite.
Nonetheless, he expresses considerable concern about the broader geopolitical environment, particularly highlighting the conflict in Ukraine and political shifts such as Donald Trump's return to power as factors influencing the market climate. "What worries me much more is, of course, the political world situation," he remarked, emphasizing the uncertainty surrounding business operations.
Benjamin Würth, who will assume leadership, acknowledged the current challenging environment, stating, "It is difficult to make predictions. We will have to rub on the crystal ball to see what next year will bring." He shared optimism about rising order intake, hinting at potential stabilization and slight growth on the horizon.
Reflecting on the company's standing in the market, he asserted, "We are the world market leader but only have about five percent market share worldwide," highlighting immense growth potential available for Würth Group. This sentiment reflects optimism as the younger Würth looks to propel the organization toward expansion, even amid economic hardships.
Overall, this narrative captures the Würth Group embarking on a pivotal chapter defined by both the stressors of economic downturns and the promise of fresh leadership. The path ahead may be layered with uncertainties, but with resilience and strategic foresight, the Würth legacy aims to persist through adversity.
