From Left: Dr. Markus Beukenberg (CTO), Eric Lachambre (COO), Oliver Hermes (Chairman of the Executive Board & CEO), Mathias Weyers (CFO), Carsten Krumm (COO)

Editorial by the Executive Board

Dear Ladies and Gentlemen,

We can look back on a successful 2016 in which the Wilo Group once again generated profitable growth. With net sales of EUR 1.33 billion, the previous year’s record figure was exceeded again slightly by 0.8 percent. We thus increased our net sales for the seventh time in a row. Adjusted for exchange rate effects, net sales rose by as much as 3.9 percent. Profitability remained at a high level with an EBIT margin of 8.1 percent. We invested heavily in the future, with capital expenditure reaching a new high of almost EUR 110 million. We also sustainably underpinned our goal of setting new standards as an innovation leader and digital pioneer. A total of EUR 65 million was invested in research and development: more than ever before! The Wilo-Stratos MAXO, the world’s first smart pump*, is just one example of our successful research and development work. We also took a major step forward with regard to the digital transformation in the medium to long term and launched key projects for the implementation of our digitalisation strategy. With the formulation of Ambition 2020+, we also enhanced our successful corporate strategy, adapting it to the changed economic and technological conditions, thereby strengthening our basis for accelerated profitable growth.

On behalf of the entire Executive Board, I would like to take this opportunity to thank all employees of the Wilo Group, without whose commitment, courage and perseverance this success in the 2016 financial year would not have been possible.

Intensified globalisation

Regional diversification, which reflects our strategy of intensified globalisation, was again an important factor in the Wilo Group’s positive economic performance in 2016. We posted strong growth in China, Korea and Russia, in certain emerging economies of Africa and in the Gulf States. In Europe, we sustainably increased our business activities in the German-speaking countries, Scandinavia and the Mediterranean region in particular. Overall, the Wilo Group was well able to compensate for the varying developments in individual countries and markets and the significantly negative exchange rate effects.

Important investments in the Wilo Group’s future prospects were made consistently and on schedule. For example, in June last year we opened a new factory and office building in the Moscow region in the presence of the Russian Prime Minister Dmitry Medvedev. With this new building, the Wilo Group is localising its economic activities in Russia to an even greater extent and increasing the depth of its value chain.

The Wilo Group is implementing the biggest location development project in its history at its headquarters in Dortmund. In October 2016, the construction of the new smart factory was officially started with a symbolic ground-breaking ceremony. The foundation stone was laid at the beginning of this year already in the presence of Hannelore Kraft, Minister President of the state of North Rhine-Westphalia. Dortmund will be the Wilo Group’s top digital location and will also set benchmarks within Wilo and in the pump industry as a whole in line with our goal.

WILO BRINGS THE FUTURE.

Alongside the difficult geopolitical and macroeconomic developments, the digital transformation is the greatest challenge of our time. Companies must respond to this transformation proactively. In order to survive in a competitive market characterised by technological upheaval, we have defined a clear direction and a shared path as a Group.

In this context, we adapted our successful corporate strategy Ambition 2020 to the changed conditions and developed it into Ambition 2020+ in the 2016 financial year. Our long-term goals still remain valid. In addition to our existing corporate strategy, we have defined eight distinct growth initiatives and incorporated the digital transformation even more specifically in Ambition 2020+. We have therefore explicitly enshrined our goal of being a digital pioneer in the pump sector in Ambition 2020+.

In the 2016 financial year, we took key steps with regard to digitalisation. We know that any company that does not play a leading role here may risk disappearing from the market. The transformation that Wilo is currently undergoing is strongly influenced by this recognition. In 2015, we expanded our corporate strategy with a digitalisation strategy and we are now in the middle of implementing this. 2016 was an important year in this respect.

WILO BRINGS THE FUTURE. This is our guiding principle for becoming the digital pioneer in the pump sector. At the heart of our new digital products, systems and solutions is the Wilo-Stratos MAXO. With the Wilo-Stratos MAXO, we have succeeded in developing another ground-breaking product that will set standards in terms of energy efficiency, installation, customer convenience and ease of use. The Wilo-Stratos MAXO, the world’s first smart pump*, will be manufactured at our smart factory in Dortmund. The development of the Stratos MAXO underscores our claim to be a technology leader in our sector as an international premium provider of high-tech pumps and pump systems. At the leading international trade fair ISH in March this year, the Stratos MAXO was already awarded the “Design Plus powered by ISH” distinction. This seal of quality stands for products that combine innovative design with energy-efficient technology.

Think tank established

Wilo is continuing to press ahead with the digital transformation of the Group in 2017. With the establishment of our internal think tank, the Wincubator, at the EUREF-Campus in Berlin, we have taken another important step towards becoming a digital pioneer in the pump sector. The name Wincubator combines the words “Wilo” and “incubator” and describes an incubator for innovative ideas and entrepreneurial commitment in the digital world and the start-up scene.

The world is facing particular challenges, with geopolitical risks growing and nationalist and protectionist tendencies on the rise. All these factors will continue to have a sustained impact on the global economic development. Wilo is countering these tendencies with intensified globalisation, continuing to advance the digital transformation and anticipating new developments and trends in order to stay on a successful track.

We have laid the foundations for accelerated profitable growth in the past and purposefully expanded them in the present. This strong basis gives me confidence that we will continue on our successful path in 2017 despite all the adverse geopolitical conditions.

The digital transformation offers an abundance of new opportunities. At Wilo, we are excellently positioned to seize these opportunities: We have a future-oriented strategy, smart products, intelligent solutions and, above all, the right team.

Yours,

Oliver Hermes
Chairman of the Executive Board & CEO

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WILO SE
Corporate Communications
Nortkirchenstraße 100
44263 Dortmund
T +49 231 4102-0
F +49 231 4102-7363

Contact

WILO SE
Corporate Communications
Nortkirchenstraße 100
44263 Dortmund
T +49 231 4102-0
F +49 231 4102-7363