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Westfalen Group reports strong earnings growth in 2017 - Wolfgang Fritsch-Albert moves to the Supervisory Board

After more than 40 years as Chief Executive Officer, Wolfgang Fritsch-Albert takes over as Chairman of the Supervisory Board of the Westfalen Group. The new Supervisory Board (from left): Michael Brink, Dr Bernhard Klofat (Vice Chairman), Renate Fritsch-Albert, Wolfgang Fritsch-Albert (Chair), Thomas Arnold (new) and Dierk Winter. Anka Wittenberg and Dr Wolf-Albrecht Prautzsch stepped down from the board.

The Westfalen Group reported strong earnings growth in 2017.

The Westfalen Group company headquarters are located at Industrieweg in Münster.

The top-selling Grillmeister cylinder accounted for a 300 percent rise in sales.

Exceptionally strong refrigerant sales prompted a significant increase in earnings in the Gases Europe division. During the successful Innovision on Tour campaign, refrigerants were represented by models.

Another high-performance truck wash, like the first Westfalen Truck Wash in Kerpen, is currently being set up in Münster-Amelsbüren. More are planned for other locations.

The Westfalen Group is expanding its fast food range at service stations: Germany's first Chopstix Noodle Bar opened in June 2017 at the Westfalen Steinfurter Straße service station in Münster.

Münster. 2017 was a very successful financial year for the Münster-based Westfalen Group. Group turnover was 7.7 percent up on 2016 at € 1.71 billion (previous year € 1.59 billion). At € 36.2 million, earnings before interest and taxes (EBIT) in the reporting year were an even more impressive 20.7 percent higher than the previous year (€ 30.0 million). Investments in the 2017 financial year again exceeded the previous year’s already high level, rising by a further 1.2 percent to € 51.4 million (previous year € 50.8 million). Wolfgang Fritsch-Albert: “The outstanding earnings were driven in particular by exceptionally good refrigerant business in the Gases Europe division as well as another record result in the Service stations division”. On 13 July, after more than 40 years as Chief Executive Officer at the traditional family company, Wolfgang Fritsch-Albert moved to the Supervisory Board of the Westfalen Group, taking over as the new chairman. On 1 September 2018, the position of CEO will be assumed by an external successor. Until this time, the company will be managed jointly by the current Executive Board, Reiner Ropohl (Sales), Dr. Meike Schäffler (Production, IT and HR) and Torsten Jagdt (CFO).

Another record year for Service stations

“The operating result in the Service stations division reached a record high for the second year in a row,” reports Head of Sales Reiner Ropohl. This was driven primarily by healthy earnings from the fuel business. The vehicle wash business, by contrast, fell short of expectations due to a high volume of rain over the course of the year.

 

Sales of the nitrogen oxide (NOX) cutting diesel additive AdBlue also developed positively in the year under review. Shop and fast-food earnings were also up year on year. In June 2017, Westfalen expanded its fast-food service, opening the first Chopstix Noodle Bar in Germany at Steinfurter Straße in Münster. The company's own concept brand coffee, Alvore Caffè, was also successfully rolled out to further service stations of the service station network in 2017, and became a major source of earnings. The concept includes the coffee system, service as well as the coffee from one of the oldest roasting companies in Italy.

 

Significant rise in earnings for Gases Europe

Driven, in particular, by exceptionally good refrigerant business, earnings in the Gases Europe division saw a 24-percent increase on the previous year. Both domestic business and the foreign subsidiaries contributed to this positive development. As a result of the F-gas Regulation, which imposes a gradual phase-down of partially fluorinated hydrocarbons be sold in the EU, the refrigerant market is currently in a period of transformation, moving towards products with less environmental impact. In the period under review, securing sufficient supply to keep up with demand for these products proved extremely challenging. The traditional product areas, that is food-grade gases, industrial gases and speciality gases, by contrast, fell short of expectations, remaining at previous-year levels.

 

Chief Financial Officer Torsten Jagdt: “The foreign subsidiaries achieved record earnings in the reporting year. They all, without exception, succeeded in surpassing both the targets and the previous-year figures, most by a long way, more than doubling the operating result of the previous year.” The refrigerant business was a major contributing factor in this case too. In addition, an increase in customer orders at the French subsidiary allowed it to further increase utilisation of the local air separation plant. Healthcare business also developed favourably. For the first time, Westfalen provided more than 10,000 homecare patients in the Netherlands with oxygen therapy.

 

 

Energy supply: Lower margins in propane business – significant sales growth in barbecue gas segment

In the reporting year, earnings in the Energy supply division remained below expectations. The company failed to make up for the earnings shortfall from the first (traditionally the strongest) quarter despite targeted cost savings throughout the remainder of the year. This was primarily attributable to lower margins in the propane business while sales volumes were in fact marginally higher than the previous year. In the up-and-coming barbecue gas segment, the Grillmeister cylinder was again a bestseller, seeing a 300 percent rise in year-on-year sales.

 

There was a continued expansion of the Machwerker network in 2017. Ropohl: “Through the Machwerker concept, Westfalen hopes to grow its share of the sanitary and heating market. The aim of the programme is to help customers make energy savings and cut energy costs thanks to expert partners, efficient complete heating packages and optimum customer advice.” Integral to on-site implementation at users’ premises are the ‘Machwerker’, that is, a community of experienced partners from the sanitation, heating and air-conditioning sector. “By the end of the year, the network had been expanded to 76 trade firms, and sales had been increased significantly compared with the previous year,” Ropohl adds.

 

 

Greater flexibility and productivity thanks to new processes

On 31 December 2017, the Westfalen Group employed 1,663 employees in total, 1,373 in Germany. This represents a marginal 2.8 percent decline in the number of employees compared to the previous year. At the end of 2017, there were 80 apprentices across the group.

 

Given the great importance that Westfalen attaches to employee development, the reporting year commenced with a newly designed talent management programme that is to be rolled out across the group in 2018. For a modern family company such as the Westfalen Group, supporting a healthy work-life balance is a top priority. For example, Westfalen helped fund the establishment of the association “Working Moms - Pro Kinder Pro Karriere Münster e.V.”. Since 2017, a cooperation has also been established with Care.com Europe GmbH. Its services range from connecting families with childcare and senior care providers to free advice on debt and addiction.

 

Digitisation is creating more opportunities for mobile working. Greater flexibility and productivity are just two of the many benefits associated with this. In 2017, Westfalen was awarded the highest score in the employer attractiveness Index (EAI) 2016 by the Nyckeltal Institut Deutschland, and was thus named Germany's most attractive employer.

 

The company also launched the “Jump” initiative in 2017. The focus of the programme is the continuous improvement of processes (CIP). Initial successes were seen at the Nohfelden and Wanzleben plants, achieving shorter travel distances, greater filling productivity and faster setup times.

 

Outlook

“In light of the positive economic environment of the core European markets, we expect a further increase in the turnover and operating result of Gases Europe in 2018,” summarises Fritsch-Albert. “Results from the first quarter suggest that refrigerants will once again make a significant contribution to this.” In the Energy supply division, Westfalen intends to continue expanding its non-seasonal business. This will involve increasing the proportion of customers with liquefied petroleum gas meters and growing the electricity and liquefied natural gas business. In 2018, the company is also planning the systematic expansion of its Machwerker network to drive stronger growth in the attractive sanitation and heating market. In the Service stations division, mobility of the future is a major focus. Ropohl: “Besides offering alternative fuels, such as LPG, electricity and hydrogen, Westfalen continues to invest in conventional diesel and petrol fuels.” In connection with this, Westfalen is to greatly increase the number of AdBlue pumps available at its service stations in 2018. “In the coming years, investments in new food concepts and the further expansion of the passenger car and truck washes will continue to drive growth of the Service station business share outside of the classic fuel market,” Ropohl continues.

 

 

Westfalen Group

The Westfalen Group is a technology company in the energy sector with 23 subsidiaries and associated companies in Germany, Belgium, France, the Netherlands, Austria, Poland, Switzerland and the Czech Republic. This family company, which was founded in 1923, is headquartered in Münster and has more than 20 production sites throughout Europe. Its business activities encompass the gases, energy supply and service stations sectors. In the 2017 financial year, the Westfalen Group and its approximately 1,700 employees generated turnover in excess of € 1.7 billion.