LIQUI MOLY in the black during the corona crisis
July 2020 – The German lubricant company LIQUI MOLY also is not being spared by the global pandemic. Thanks to an aggressive strategy to overcome the crisis, sales had nevertheless grown by the halfway point of the year – almost three percent compared to the previous year. Earnings declined, however. For Managing Director Ernst Prost, this is no cause for concern: “Through our determined actions and our excellent products, we have asserted ourselves on the market and continue to be in the black.”
LIQUI MOLY’s sales at mid-year rose by 2.9% compared to the same period last year. Considering the global economic crisis and the massive decline in fuel consumption worldwide due to the lockdown, this is a remarkable success in the highly competitive oil business. “Our products are systemically relevant. Logistics, agriculture, workshops, emergency services and industry are dependent upon lubricants,” Managing Director Ernst Prost emphasizes. The greatest effect for the extraordinary success of the company was provided by LIQUI MOLY’s proactive strategy. For example, 18 million euro were invested in classic advertising measures, print, TV and radio, over and above the estimated annual budget. In addition, over 4 million euro were donated in the form of products for rescue and mobile care services.
No state aid measures and 36 new hires during the crisis
“I won’t save on the backs of my people!” Ernst Prost stands by this pithy statement. The company did not apply for state assistance, such as short-time work compensation – on the contrary. Each co-entrepreneur, as the employees at LIQUI MOLY are called, received a corona bonus of € 1500. In addition, internal processes were restructured at short notice and production ramped up. A total of 36 new co-entrepreneurs were hired in order to cope with the growth. The company continued to work in several shifts during the crisis. LIQUI MOLY was fully staffed while other companies sent their employees home. “Customers and partners can count on us. We are always there for them. If need be, right around the clock. This of course distinguishes us from competitors and large corporations, where often only the mailbox answers,” Prost asserts, praising his team, who stand united behind his course. Sales partners and workshops in particular benefit enormously from the company’s effective publicity measures.
High domestic growth rates
In Germany, LIQUI MOLY’s sales increased by over 5%. In the international market (approx. 150 countries), the overall growth was more than one percent. Some countries, including China and Russia, have been hit particularly hard by the crisis, and the lubricant specialist is also feeling the effects. But LIQUI MOLY is broadly positioned both with its product range – around 4000 different articles (B2B and B2C) – and in the international consumer market. “We thus achieve a wide spreading of risk, which makes us a resilient company,” explains Günter Hiermaier, the second Managing Director of LIQUI MOLY.
Strong growth in the oil, motorcycle and bicycle segments
LIQUI MOLY was able to achieve high growth rates in the motor oil sector. In Germany, the increase in sales here was 17.8%. Transmission fluids increased by 16%. “Oils are our core competence. Our customers and partners appreciate the premium quality and our excellent service. Made in Germany and our social commitment are very well received. This confirms the correctness of our approach,” explains Prost.
However, other segments, such as Motorbike, Marine and Bike, also displayed a significant increase in sales in the first half of 2020. Ernst Prost says that in this regard the lockdown is showing the other side of the coin: “People now have time to pursue their hobbies. With all the hardships caused by the pandemic, this is a positive aspect. When people combine their hobbies such as motorcycling with LIQUI MOLY, I am particularly pleased. They don’t want just any oil – they want quality, and they choose LIQUI MOLY."
LIQUI MOLY also has a unique selling point with its specialized oils and additives. "We have the right product for every conceivable climatic condition and for the most extreme requirements. More and more customers, from Afghanistan to Cyprus, are relying on this,” affirms Prost.
Thanks to extreme efforts, social commitment and sound business management, LIQUI MOLY has come through the crisis in good shape. The increase in sales of around 3% in a generally weakening global and oil market proves that LIQUI MOLY and Ernst Prost are on the right track: “Especially in times of crisis, we have to invest. I am certain that we will emerge from the crisis stronger than ever before and continue our growth course of recent years.”
In 2019, July and August were record months with sales of almost 60 million euro each. Ernst Prost is certain that the company will be able to regain or even surpass these highs in the coming years. As in the 2008 financial crisis, the helmsman places his full trust in his team. Diligence, commitment and the willingness to go the extra mile are the prime ingredients for his company’s success. “The tasks have grown, and so have we.” For Ernst Prost, the second half of the year will be marked by a catch-up process: “We are well positioned to continue undermining our competition.”