LIQUI MOLY: Good news in challenging times
LIQUI MOLY not only closed 2021 with record sales of 733 million euro. Earnings before taxes also soared to 38 million euro – an increase of a good 40 percent. “This is a great result for a difficult year, but it is still a long way from the level we had before the pandemic,” said Managing Director Ernst Prost at the presentation of his last financial statement.
The leap in profit is the result of the countercyclical investment strategy in 2020. Back then, in the midst of the rampant pandemic, when many companies were massively cutting their expenditures, LIQUI MOLY decided to do the opposite. Investments, especially in marketing, were increased sharply. While this approach had an impact on earnings, it also provided a strong boost to brand awareness around the world. The effect was further strengthened by the simultaneous restraint of many competitors. This led to a strong increase in demand. In 2021, LIQUI MOLY’s turnover increased by 20 percent to 733 million euro, more lubricants were produced than ever before at 105,000 tonnes, and the number of employees reached a record high of 1008. “Where many workers at other companies went on short-time work, we increased the number of employees and created new jobs,” reports Ernst Prost.
As in previous years, the increase in sales was greater in the export business (+30%) than in the saturated domestic market of Germany (+13%). The strong increase of 50 percent in the most important export market, the USA, also helped. Growth was also disproportionately high in other countries where LIQUI MOLY has its own subsidiaries, such as Portugal and Spain (46 percent), Italy (101 percent) and Australia (47 percent). LIQUI MOLY now exports around two thirds of its turnover. In Germany, the restructured filling station business and the car accessories trade in particular made gains. “In Germany, of course, it is becoming increasingly difficult for us to grow because we have already achieved very good market penetration here. But we are also continuing to make progress at home, which shows that we are getting a lot of things right,” Ernst Prost is certain.
According to the Managing Director, the cost of materials such as raw materials and packaging has skyrocketed: “Our profit would have been even higher if the prices for raw materials and intermediates had not shot through the roof like this,” explains Ernst Prost. “In some cases, suppliers turned the price screw up every week. We can’t pass that on to our customers so quickly.” LIQUI MOLY needs the profit for future investments, in particular for the expansion of production capacities and for the improvement of the complex logistics with around 4,000 articles. Growth must also be financed beyond these investments, for example for larger inventories (plus 43 percent) and higher receivables (plus 18 percent). Ernst Prost: “That’s the price of growth. You have to be able to afford growth.”
The Managing Director is proud to be able to finance this growth from the company’s own funds: “No loans, no subsidies, no state grants. We have always retained our profits and are guarding our equity ratio of around 80% like the apple of our eye. Without the well-filled war chest, we would not have been able to weather the crisis so easily. And, of course, we pay normal taxes on our profits.”
With the presentation of the financial statement for 2021, Ernst Prost (65) will retire on 22/02/2022. The man who has shaped the company over decades and made it what it is today is now leaving LIQUI MOLY. Ernst Prost joined LIQUI MOLY in 1990 as Sales and Marketing Manager. In the following years, he successively bought the company from its previous owners. Under his leadership, LIQUI MOLY developed into a global player: Internationalization was driven forward, and diversification towards areas such as motorcycles, boats and industry was developed. Since the last global economic crisis in 2008 alone, turnover has tripled from € 232 million and the number of employees has more than doubled from 438 at that time. At the end of 2017, he sold his shares in the company to the Würth Group, but remained in charge as Managing Director. An era has now come to an end.
Ernst Prost: “I know that ‘my LIQUI MOLY’ is in good hands – not only in those of Günter Hiermaier, who now bears sole responsibility for the company’s management, but also in those of my more than 1,000 colleagues. I would like to thank them all for the many wonderful years and decades of fighting together for success.”