Würth Finance Group
Annual Report 2022
Short overview of the
Würth Finance Group
Profit before taxes
66.3
million EUR
Total operating income
103.0
million EUR
Balance sheet total
3.85
billion EUR
Number of employees
121
employees (FTEs)
Key Events 2022
A further demonstration of the impressive competitive strength and stability of the Würth Group’s core business: The Würth Group increased its sales by 16.9% to EUR 19,950 million, thereby gaining further market share. In addition, with an operating result of EUR 1,500 million, the Würth Group succeeded in defending its profit margin of 7.5% (based on preliminary figures).
Successful completion of a comprehensive refinancing phase in an unfavourable capital market environment: with two notes issued in the amounts of EUR 600 million and CHF 300 million, as well as the renewal of the committed revolving credit facility in the amount of EUR 500 million, the Würth Group’s inhouse bank fulfilled its most important mandate: to safeguard the availability of liquidity for the companies of the Würth Group at all times.
Income at the Würth Finance Group exceeds EUR 100 million for the first time: driven by a marked increase in lending volumes and higher interest income on cash investments, operating income increased by 19.4% to EUR 107.0 million and pre-tax profit was even up 26.6% at EUR 70.3 million (adjusted figures).
Solid target achievement despite a challenging environment in the insurance brokerage market: with revenue growth of just under 5% and brokered premium volume up 6%, Würth Financial Services AG clearly exceeded expectations in a market environment that remained difficult.
Successful establishment of digital distribution of insurance products: With its innovative online insurance platform InsurHub, Würth Financial Services AG established a new mainstay in digital distribution and is thereby continuing on its digitalisation path. The potential of this bancassurance solution is far from exhausted and offers promising prospects for the future.
Report of the Board of Directors
The Supervisory Board supported the Management in an advisory capacity, closely monitoring in particular the company’s development and the effectiveness of risk management. The Board of Directors approves the Financial Statements and would like to thank the Management, the employees and the clients of the Würth Finance Group for their commitment and trust in the financial year 2022.
Report of the Management
The 2022 year under review was very successful for the Würth Finance Group in financial terms. At EUR 107 million, adjusted income exceeded the EUR 100 million mark for the first time in the company’s history. With an adjusted pre-tax profit of EUR 70.3 million, the Würth Finance Group achieved a record-high result.
The world is in a state of constant flux. Changing needs continually give rise to new frameworks and demands. This requires flexibility and anticipation – including in the financial services industry. The Würth Finance Group accepts new challenges and evolves on an ongoing basis. At the same time, it remains reliable and offers its clients constancy in this volatile environment.
In collaboration with the Swiss studio Ploy, a series of images has been created in which the interplay between change and constancy is conveyed in an artistic way by means of thematic projections onto 3D models of the locations in ’s-Hertogenbosch and Rorschach. Change and constancy are not opposites but complementary elements in the Würth Finance Group’s self-image.
Report Inhouse Banking
Inhouse Banking reported an adjusted pre-tax operating result of EUR 69.5 million in the 2022 financial year, hugely exceeding the previous year’s record level. Inhouse Banking provided close support to the parent company and Group companies, in particular for financial and liquidity management.
Trading/securities investments: income development
Report External Financial Services
The reporting year was marked by an increasingly challenging insurance market. Despite this environment, Würth Financial Services AG pushed forward in all key areas – in sales, organisation and digitalisation – and can look back on a successful financial year 2022 with revenue growth of just under 5% and brokered premium volume up 6%.
Development of premium volume
Risk Management and Control
Basic principles of our risk management system:
The Management bears the responsibility for all risks incurred as a result of the company’s business activities and seeks to achieve a healthy balance between risk and returns.
An independent control process forms an integral part of the corporate structure.
Employees are familiar with and alert to the principal risks specific to their area of activity. A central element of risk control is the comprehensive, transparent and objective disclosure of risks to the Group and company management, owners, supervisory authorities and other stakeholders.
Income is protected on the basis of risk tolerance – i.e. the maximum risk that the Würth Finance Group can bear given its financial and earning power.
Ultimately, the Würth Finance Group’s reputation depends on effective risk management and control.
Key Figures
The primary objective of the Management of the Würth Finance Group is to create continuous value added for the Würth Group. The Management is responsible for generating adequate risk-adjusted returns. In order to be successful in the long term, the Würth Finance Group needs to generate an overall return that is higher than the risk-adjusted cost of capital.
Key figures from the consolidated income statement
| in TEUR | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|
| Net interest income | 9,730 | 14,284 | 13,789 | 14,170 | 29,576 |
| Income from factoring activities | 16,018 | 16,419 | 16,275 | 16,234 | 17,733 |
| Income from commission and service fee activities | 35,272 | 35,897 | 37,668 | 43,725 | 48,348 |
| Income from trading activities and financial instruments | 7,320 | 14,713 | 12,376 | 14,789 | 11,289 |
| Other ordinary income | 3,292 | 2,870 | 1,709 | 797 | 653 |
| Expected credit loss (expenses) / recovery | -3,698 | 1,005 | –7,886 | 6,846 | –4,615 |
| Total operating income | 67,934 | 85,189 | 73,931 | 96,561 | 102,984 |
| Total operating expenses | -29,418 | -32,397 | -31,519 | -34,031 | –36,656 |
| Profit before taxes | 38,516 | 52,792 | 42,412 | 62,530 | 66,328 |
Operating income adjustments Inhouse Banking
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Hedge accounting effect management accounting | 3,742 | 2,993 | 1,492 | -548 | –619 |
| Impairment for credit loss | 3,698 | -739 | 8,558 | -6,450 | 4,615 |
| Total operating income (adjusted) | 75,374 | 87,443 | 83,981 | 89,563 | 106,980 |
| Profit before taxes (adjusted) | 45,956 | 55,046 | 52,462 | 55,532 | 70,324 |