Frequently asked questions – FAQ
(To view the anwers just click on a headline question)
How will Einhell continue to grow in the future?
The strategy of the Einhell Group is based on a steady organic growth.
This should be achieved mainly by the development of new countries with own subsidiaries or business partners.The additional acquisition of a company, which fits to the strategy of Einhell, is principally not excluded.
The aim is a long-term profitable growth.
Which regions are the future markets?
The Einhell Group has reached a very good market position in Europe. In the ancestral markets like Germany, Austria and Switzerland we have reached a very good market exploitation which is just partly gradable. In other single countries of Western Europe like in France and United Kingdom, we don’t have exhausted the complete potential yet.
In the last years we have increased in countries in Eastern Europe. But because of the worldwide financial crisis, the growth rate in these countries has decreased massively. After dealing with the worldwide crisis, we will see further growth in Eastern Europe for Einhell. In addition, we further want to expand in countries like Greece and Turkey.
The Einhell Group is already making strategic preparations for the growth drivers for the following years. We already have a distribution company in Chile, which is operating well. We are also moving to the Brazilian market. Both countries have been identified as having a strong expanding middle class, which is continually increasing its spending power. With our products we will participate on the growth potential of these countries. Einhell is also working towards building up business in other South American countries. In five years time, South America will probably be Einhell’s growth driver even when the growth rates in Eastern Europe will probably decrease. Therefore we are positioning Einhell in a strategically very interesting growth market. In addition, today Einhell tries to build up the markets in Australia, South Africa, India and Russia.
Who are the customers of Einhell?
The biggest part of the customers are DIY stores. Additional customers are trade markets, C*C markets and super markets/consumer markets.
How is Einhell positioning itself on markets?
In competition, Einhell is positioning itself between the “A-label” and the “no name suppliers”. Einhell is differentiated:
- From the “A-label” by a price advantage of 30 % - 50 % with a similar quality level. This is possible because of a very efficient purchase strategy in Asia, an extremely smart corporate structure and the abstinence of a typical marketing.
- From the “no name suppliers” because of the quality and the after-sales service. Enabled by a substantial know how for products and production, ensured by company-owned controller in Asia and rechecked by the after-sales service in Germany. All sub areas are combined in an ambitious own-developed ERP system.
How will Einhell finance the growth?
Einhell has a strong equity financing with an equity ratio of more than 50 %. For a reasonable and solid financing of the future growth, the capital demand was planned with the help of the projected amount of receivables and the stock turnover for the years 2009 - 2014.
In July 2009, the expired bonded loan of about 30 million EUR was paid up and replaced with a non-current refinancing with bilateral credit agreements.
How does Einhell see the relationship to its shareholders?
As listed on the prime standard, we offer a maximum of transparency. Therefore also private shareholders receive the whole information always in time. In addition, our designated sponsor makes sure, that every shareholder can deal with his shares. We certainly know our biggest groups of shareholders, who consist of funds, investment managements and other institutional investors. But also private shareholders contact us directly. We don’t know the certain portion of it, because the shares could change daily their owners. A lot of these private shareholders, which are loyal to Einhell over many years, invest over a very long period. They are also very present in our annual shareholders’ meeting. Because of the success during the last years, we have a very comfortable dialog with our private shareholders. We are glad about every single shareholder and we would like to encourage every interested person to contact us.
How is Einhell affected by different consumer behaviour?
Einhell is also affected by the worldwide finance crisis. But you have to consider how the revenues develop in different regions. You can see, especially the revenues in Eastern Europe have decreased because of the worldwide economic crisis. The consumers in Eastern Europe have to struggle with unemployment and a low real income. The result is a weakness in demand. In addition, a lot of Eastern European currencies show massive rejections in exchange rates. So in part, our revenues are mathematically lower annualised in our Group currency EUR. In Germany and the neighboring countries like Switzerland, Austria and Netherlands we are working with very stable revenues. The markets turn out to be very strong and we maintain our good market position. Possibly the consumer would buy increased our products, which offer a very good price performance ratio. Even when money is tight its consumer sensibility is very high. We don’t exclude, that in economical strong phases the consumer demand for our products could increase. More work is carried out in house and garden during difficult economic periods and this could help increase private consumer spending in this area. Therefore Einhell would offer a good quality to fair prices. Because of this, we maintain also during the worldwide crisis very profitable.
How does the development of the USD affect income statement?
The Einhell Group hedges its USD demand regularly for the next few months. Thus the exchange rate risk can be reduced significantly. In addition this proceeding offers a fixed basis for calculation.
Which accounting principles is Einhell using for the consolidated accounts?
The consolidated accounts are made since 2002 as a releasing group statement in terms of § 292a German Commercial Code (HGB) according to the International Accounting Standards/International Financial Reporting Standards (IAS/IFRS).
How is the risk management of Einhell structured?
The Einhell group insures an overall risk management because of the structuring of the risk management in local units at group’s companies and in a central risk management at the parent company. All business units of the group are integrated in the risk system as well as the complete planning, reporting and controlling.
When will the common share be placed at the stock exchange?
Actually there are no plans to place the common share at any stock exchange.
When will the preferred shares be turned into common shares?
At the moment there are no plans about turning the preferred shares into common shares.