Stihl Reports Challenging Year, New EC Motor Production
In a prepared statement, Stihl reports that its “past eight months have proven challenging.” The company reported a revenue decline of 1.5 percent year on year, noting revenue of 3.84 billion euros in the period from January to August 2023. The company also reported a workforce decreased of 0.5 percent to 20,311 employees worldwide as of August 31, 2023. It cites a number of reasons for the deterioration in business performance. Since the lifting of measures to contain the coronavirus, consumers worldwide have resumed spending more on tourism, cultural activities, and eating out. Weaker economic development, inflation, and the cost of energy have also led to subdued consumer spending in general. Alongside this restraint among consumers around the world, the high inventory levels at authorized Stihl dealers has also had an impact on the company’s sales performance.
Speaking at the press conference held during International STIHL Media Day on September 13, Michael Traub, Chairman of the Stihl Executive Board, said: “After several years of strong growth, our markets find themselves in a period of temporary consolidation in 2023. But with over 100 years of history in the industry, Stihl has plenty of experience in responding to fluctuations in operating business. Our family-owned company has a long-term outlook, and we look to the future with confidence. We have ambitious growth plans and continue to invest a great deal in our business, especially in batteries – the technology of the future – and in our global manufacturing and sales network.” Alongside a new manufacturing facility for battery-operated tools, the company also plans to build its own EC motor plant for professional battery-operated products in Waiblingen, increasing Stihl’s depth of production for battery-operated tools even further.
Battery Strategy Paying Off
“What’s positive is that our battery strategy is paying off and that our customers around the world remain very interested in battery-operated Stihl products,” said Traub. “Sales of battery-operated chainsaws and other battery-operated power tools have increased year on year, and we have also achieved growth with our iMOW robotic mower. Some regional markets are also developing positively. Nevertheless, we are still seeing an overall decline in sales worldwide across all drive types.”
Stihl said that sales decreased in North America, the company’s largest market. Worldwide, Stihl said it remains optimistic and expects further growth in the medium to long term. “As an independent, family-owned company with a high equity ratio of over 60 percent, we can continue to operate and plan with a long-term outlook, despite the challenging market development in the short term,” said Traub. “That’s why we anticipate further growth, particularly in the battery segment, and are investing significantly in the global Stihl Group.”
Investments for Growth
Expanding and renewing the Stihl product range for private consumers and in the professional segment.
Developing high-performance charging solutions for battery-operated products, particularly in the professional segment, to make it easier for people to operate their battery-operated tools without interruption throughout the day and work in and with nature.
Expanding global sales channels with the addition of e-commerce solutions and growing the global network of specialist dealers.
Developing special products for emerging markets to make even better use of market potential there.
In-House EC Motor Manufacturing
STIHL already develops and manufactures many of the parts used in its battery products itself. Now the company plans to begin manufacturing its own EC motors. The company says that producing the components in-house will ensure the electric motors, which are already developed by Stihl, are an even better match for the products as a whole – something that will further enhance the performance and quality of the company’s battery-operated tools. Stihl will establish the facility at the founding company in Waiblingen, Germany, and initially focus on producing EC motors for professional battery-operated products starting in 2025. The total investment amounts to roughly 17 million euros.
“We are now manufacturing the beating heart of any battery-operated tool: the EC motor,” said Traub. “This marks a major strategic step in our transformation and allows us to increase the depth of our added value in the expanding battery market, strengthen our supply chain resilience, and broaden our expertise. Last, but by no means least, the decision to set up the new facility in Waiblingen represents a strong commitment to our founding company in Germany and will enable us to safeguard jobs there in the long term.” In Waiblingen, Stihl currently focuses operations on manufacturing gasoline-powered professional tools and battery packs, as well as components such as guide bars and plastic parts. STIHL will also begin manufacturing professional battery-operated tools at the site in 2024.
