LIQUI MOLY reports a slump in profits of 50 percent
The lubricant specialist LIQUI MOLY was also not spared from the pandemic. Sales rose by 7.1 percent to a new record level. Earnings, however, fell significantly due to an investment program worth millions. Managing Director Ernst Prost is nevertheless optimistic: “Thanks to our energetic measures, we are continuing to grow and are still operating in the black. Our solid economic performance in recent years, with no bank debt, is helping us cope with the consequences of the crisis.”
LIQUI MOLY’s turnover increased by 7.1 percent to 611 million euro in 2020. Given the devastating effects of the pandemic on the global economy and the decline in global consumption of oil and fuel, this is a great achievement. Revenue halved to 25 million euro – partly because the medium-sized enterprise invested almost 45 million euro in marketing measures during the crisis. In addition, more than 100 new employees were hired. This brings the total number of employees to 989 at the end of 2020. “We fought to set ourselves apart from our competitors. Despite a vigorous implementation of hygiene measures, protection concepts and working from home, we were there for our customers around the clock and increased our presence in all media enormously. The fact that we are growing is only the logical consequence of our actions,” the Managing Director describes his course. Thanks to the company’s solid starting position, with a balance sheet total of 208 million euro together with an equity position of 168 million euro and an equity ratio of over 80 percent, the lubricant specialist had sufficient strength to make the necessary investments without borrowed capital and credit burdens. According to Ernst Prost, these investments have paid off: “Thanks to the course we took, we were able to make good gains by the end of the year.” At the same time, he affirms that LIQUI MOLY could have achieved a much higher sales increase. “We felt the ‘shortage economy’ in all areas, due to coronavirus, lockdown short-time work and working from home at our upstream suppliers. As a result, we experienced a noticeable decline in raw materials, packaging materials, labels, closures and also in the logistics and freight capacities,” says the Managing Director.
The company again made headlines in 2020 with its social responsibility. A coronavirus allowance for all employees as well as product donations worth more than 5.5 million euro to fire brigades, rescue services, first-aid associations and other non-profit organizations were a matter of course for the medium-sized business. “In times like these, we have to stick together and everyone should work for the common good as much as possible,” says Ernst Prost.
High domestic growth rates
Unlike in previous years, LIQUI MOLY’s turnover in Germany increased more strongly this time than in export. Nevertheless, exports are also showing stable growth, such as business in the USA and Canada.
Good growth across all segments
Overall, all divisions of the full-range supplier were successful. In the core business of the company, motor oils, sales increased by 6.4 percent. The fact that people are, of necessity, traveling less and spending more leisure time at home is also reflected in the increase in sales of products for motorcycles, bicycles and boats.
In 2019, July and August were record months with sales of almost 60 million euro each. Sales in November and December 2020 were also among the best in the company’s history. Ernst Prost is certain that the company will hold a very good starting position for 2021 and will be able to again reach or even exceed the sales records: “We’re reaping the rewards of our 2020 advertising push this year, and we’re going full throttle in 2021 as well.” The lubricant manufacturer is planning further investments, especially in its own logistics, to ensure continued growth.