Media / Press Releases
Wuppertal, 16 June 2005. Continuing the trend of recent years, Vorwerk once again reported very favourable growth in 2004. Business volume now stands at some 2.074 billion euros, 27 per cent more than the previous year. Even considering the special effect of the akf group’s extended fiscal year, the overall increase was 21 per cent. This was due to internal growth of 6 per cent at the direct-sales organisations for household appliances and some 7 per cent at the group’s remaining subsidiaries. Additional growth arose from the acquisition of Jafra Cosmetics in the USA, which joined the Vorwerk group as of 1 June 2004.
Foreign business accounted for 50 per cent of total volume – and even 70 per cent in relation to the core segment, direct sales. Over the past few years, The Vorwerk group has made the transition from a European company with a strong German emphasis to a global player.
Vorwerk reported significantly higher turnover in Germany, too. The German Kobold Systems sales company grew by around 1 per cent to 315 million euros. The market share for Vorwerk vacuum cleaners in Germany stands at approximately 11 per cent and there was a considerable rise in the number of active sales advisers in 2004. Vorwerk Fitted Kitchens, which belongs to Kobold Systems, reported turnover up by 10 per cent to 35 million euros following a year of stagnation. Turnover also rose by 10 per cent (27 million euros) at the German Thermomix sales company. The Feelina Ironing System division continued the systematic expansion of its activities in Germany. Vorwerk Carpets reported a positive operating result despite a difficult market environment. The Vorwerk subsidiaries HECTAS Facility Management and akf Financial Services reported significant growth of 11 and 12 per cent respectively.
Vorwerk succeeded in accomplishing its strategic targets in terms of both quality and quantity. With its combination of personal advice and sales, Vorwerk is able to overcome the buying resistance which is having such negative results on the retail trade and the makers of household appliances in general. While everyone else is talking about rock-bottom prices and cheap production, Vorwerk remains true to its strategy of providing products of high quality and durability.
Setting the Course
A number of decisions were made in 2004 with a view to maintaining controlled and profitable growth:
Vorwerk as a Family Enterprise
The Vorwerk corporate culture is informed by the concept of “family”. Vorwerk projects this family focus outside the company through its brand-image campaign. The idea of the TV commercial “I manage a very successful, small family business!” was received with such enthusiasm that Vorwerk last year collaborated with media partner HÖRZU for the first time to find the “Family Manager 2004”. The campaign is designed to give the housewife and mother – whether she devotes herself entirely to her family or additionally holds down a job – the recognition she has long been denied by society. Last December, Vorwerk and Hörzu held a grand gala in Berlin, at which, in the presence of Germany’s Federal Minister for Family Affairs, Renate Schmidt, they presented the award for outstanding personal achievements to the five chosen family managers.
The Family Manager competition attracted a great deal of attention and is being repeated this year. The flood of applications and nominations received is at present being reviewed. The TV advertisement is also being continued and will additionally be shown in Italy as from October. Cultivating our brand image is an important means to increasing the long-term value of the company.
Vorwerk as an Employer
The Vorwerk group currently provides work for some 52,000 employees, sales advisers and representatives worldwide. This translates into some 3,000 employees and 1,500 sales advisers and representatives more around the world than in the previous year. Added to these are another 435,000 consultants from Jafra. This means that there are around half a million people in Vorwerk’s employ worldwide. The number of people working for Vorwerk in Germany rose by 800 in 2004, bringing their total to an average 16,500.
Outlook on Developments in 2005
Vorwerk expects to see growth sustained throughout 2005. We expect business volume in 2005 to total approximately 2.2 billion euros, half of which should come from the real growth of our various divisions and the other half as a result of a full year of Jafra activities being included in the financial statements. The group plans to pursue its course of growth and to focus on new markets. The share of foreign business in direct sales is expected to increase to 73 per cent.
Contact:
Vorwerk & Co. KG
Corporate Communications
Jürgen Hardt
Mühlenweg 17 – 37
42270 Wuppertal
Tel. 0202 / 564-1221
Fax 0202 / 564-1812
Yet Another Record Year for Vorwerk
Wuppertal, 16 June 2005. Continuing the trend of recent years, Vorwerk once again reported very favourable growth in 2004. Business volume now stands at some 2.074 billion euros, 27 per cent more than the previous year. Even considering the special effect of the akf group’s extended fiscal year, the overall increase was 21 per cent. This was due to internal growth of 6 per cent at the direct-sales organisations for household appliances and some 7 per cent at the group’s remaining subsidiaries. Additional growth arose from the acquisition of Jafra Cosmetics in the USA, which joined the Vorwerk group as of 1 June 2004.
Foreign business accounted for 50 per cent of total volume – and even 70 per cent in relation to the core segment, direct sales. Over the past few years, The Vorwerk group has made the transition from a European company with a strong German emphasis to a global player.
Vorwerk reported significantly higher turnover in Germany, too. The German Kobold Systems sales company grew by around 1 per cent to 315 million euros. The market share for Vorwerk vacuum cleaners in Germany stands at approximately 11 per cent and there was a considerable rise in the number of active sales advisers in 2004. Vorwerk Fitted Kitchens, which belongs to Kobold Systems, reported turnover up by 10 per cent to 35 million euros following a year of stagnation. Turnover also rose by 10 per cent (27 million euros) at the German Thermomix sales company. The Feelina Ironing System division continued the systematic expansion of its activities in Germany. Vorwerk Carpets reported a positive operating result despite a difficult market environment. The Vorwerk subsidiaries HECTAS Facility Management and akf Financial Services reported significant growth of 11 and 12 per cent respectively.
Vorwerk succeeded in accomplishing its strategic targets in terms of both quality and quantity. With its combination of personal advice and sales, Vorwerk is able to overcome the buying resistance which is having such negative results on the retail trade and the makers of household appliances in general. While everyone else is talking about rock-bottom prices and cheap production, Vorwerk remains true to its strategy of providing products of high quality and durability.
Setting the Course
A number of decisions were made in 2004 with a view to maintaining controlled and profitable growth:
- The most significant change in the structure and culture of the company was marked by Vorwerk’s entry into the direct sales of cosmetics and facial and body care through its acquisition of Jafra Cosmetics. While other forms of trading are stagnating or even in decline, direct sales continues to show constant growth all around the globe, especially in the subsegment cosmetics. Now Vorwerk also has a strong presence in the Americas, especially in Mexico and the USA. With turnover of around 450 million US dollars, Jafra is a key player on the worldwide cosmetics market.
- Vorwerk paved the way in 2004 for its entry into Russia. In the light of the tremendous growth potential there, Vorwerk plans to gain a long-term foothold in Europe’s largest state for all of its direct-sales organisations – not only with Vorwerk Kobold Systems and Vorwerk Thermomix but also with Jafra Cosmetics. Vorwerk will be testing its sales systems in Russia in 2005 and then building up the sales organisations step by step.
- International expansion continues apace. Vorwerk is continually setting up new sales companies. Thermomix is starting up in Taiwan – and at the same time, there is a trial run in progress for Thermomix in the People’s Republic of China. Feelina Ironing System is now going to Spain.
- A forward-looking decision has also been taken to make water purifiers the fourth main focus among our household appliances. One and a half billion people on the planet, most of them in Asia, have no access to clean drinking water. Thanks to modern technology, of which Vorwerk already has experience as a manufacturer and supplier of water purifiers in Indonesia, Thailand and Japan, it is possible to purify water reliably, to eliminate odours and the taste of chlorine, and to kill germs. Water purifiers such as our Aquaguard product help to solve one of the most pressing problems of the 21st century. Vorwerk plans to create a competence centre for water purifiers in Shanghai with the aim of developing and producing the best appliance available for the purpose. The ultimate goal is to set up a direct-sales organisation for water purifiers in China.
Vorwerk as a Family Enterprise
The Vorwerk corporate culture is informed by the concept of “family”. Vorwerk projects this family focus outside the company through its brand-image campaign. The idea of the TV commercial “I manage a very successful, small family business!” was received with such enthusiasm that Vorwerk last year collaborated with media partner HÖRZU for the first time to find the “Family Manager 2004”. The campaign is designed to give the housewife and mother – whether she devotes herself entirely to her family or additionally holds down a job – the recognition she has long been denied by society. Last December, Vorwerk and Hörzu held a grand gala in Berlin, at which, in the presence of Germany’s Federal Minister for Family Affairs, Renate Schmidt, they presented the award for outstanding personal achievements to the five chosen family managers.
The Family Manager competition attracted a great deal of attention and is being repeated this year. The flood of applications and nominations received is at present being reviewed. The TV advertisement is also being continued and will additionally be shown in Italy as from October. Cultivating our brand image is an important means to increasing the long-term value of the company.
Vorwerk as an Employer
The Vorwerk group currently provides work for some 52,000 employees, sales advisers and representatives worldwide. This translates into some 3,000 employees and 1,500 sales advisers and representatives more around the world than in the previous year. Added to these are another 435,000 consultants from Jafra. This means that there are around half a million people in Vorwerk’s employ worldwide. The number of people working for Vorwerk in Germany rose by 800 in 2004, bringing their total to an average 16,500.
Outlook on Developments in 2005
Vorwerk expects to see growth sustained throughout 2005. We expect business volume in 2005 to total approximately 2.2 billion euros, half of which should come from the real growth of our various divisions and the other half as a result of a full year of Jafra activities being included in the financial statements. The group plans to pursue its course of growth and to focus on new markets. The share of foreign business in direct sales is expected to increase to 73 per cent.
Contact:
Vorwerk & Co. KG
Corporate Communications
Jürgen Hardt
Mühlenweg 17 – 37
42270 Wuppertal
Tel. 0202 / 564-1221
Fax 0202 / 564-1812
