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Growth spurt: E/D/E Group exceeds trading volume of 6 billion euros for the first time in 2017

  • Organic growth and growth due to new strong members result in an increased trading volume of 8.8 percent 
  • Business division steel: Trading volume surpasses one-billion threshold 
  • Strategy and organisation development process EVOLUTION: 2018 is the year of acting

Wuppertal – The E/D/E Group achieves a trading volume of 6.04 billion euros in 2017. Dr. Andreas Trautwein, Chairperson of the E/D/E Executive Board: „More than 6 billion euros trading volume is a success reflecting the efficiency of our members and cooperation partners. Every day, they assert their position in an increasingly fierce competition. Our task is to provide them with the best possible support. In 2018, we will therefore fully concentrate on further strengthening our services for our members and cooperation partners in the day-to-day business. 

The successes of the past financial year form the basis for this project: The trading volume of the E/D/E Group increased by 486.7 million euros or 8.8 percent com-pared to the previous year. While the growth rates of the international business had been significantly higher than those in Germany in the past few years, now the pos-itive growth of the national E/D/E core business is dominating: It achieves a plus of 408.1 million euros or 9.5 percent. Key driver – besides a strong organic growth – are the positive growth in the steel segment, with a trading volume breaking through the one-billion-euro threshold, as well as building services and strong new members. The warehouse business has also seen very good growth this year, its turnover increased by 11.6 percent to 292.9 million euro. 

The cash flow of 28.1 million euros (2016: 27.3) allows investments into the core business from own resources in order to safeguard the future. The annual surplus dropped slightly to 14.5 million euro (2016: 15.6). The predominant part will be ploughed back to increase the financial strength of the corporate group. The equity as to 31st December 2017 amounted to 378.1 million euros.

The positive growth of the E/D/E association results from the very good collabora-tion with members, suppliers and cooperation partners. “This relationship of trust which was built up over the years, provides the basis for successfully responding to the dramatic market changes of industrial B2B together”, says Dr. Trautwein.

In the context of the strategic and organisation development process EVOLUTION, the year 2017 was used to gather and evaluate comprehensive feedback from the E/D/E partners.

Programme for strengthening the services in the daily business 

2018 is the year of acting. One result stemming from the feedback of the E/D/E partners is a programme for strengthening the services in the daily business, covering numerous projects in all areas of the company. These are designed to meet especially the requirements of the members and will be realised consistently in 2018 and 2019 to improve the competitiveness of our partners.

„The strengthening of our core functions, such as purchasing and logistics, are important focal points“, says Dr. Trautwein. The merger of purchasing potential through the EHH (EURO HAUSTECHNIK-HANDEL) already was a successful model in the building services sector in 2015. In 2017, this was transferred to the construction equipment sector by establishing the Mittelstands-Allianz Baugeräte GmbH (MAB), a joint venture from E/D/E and EVB BauPunkt. With this, two important buying associations within the construction equipment sector, whose distributors represent a market volume of more than 750 million euros, have bundled their joint purchasing potential. In 2018, the activities of the new alliances are being further extended. Additionally, the E/D/E will develop and implement a concept for supplier management.

„Also in the logistics business, we have set ourselves a number of tasks for the upcoming months“, says Dr. Trautwein. In 2017 already, the volume of deliveries to the end customer with optimised process costs was increased: Overall, 73 percent of the E/D/E distributors’ orders at the central warehouse were delivered directly to the end customers of our distributors from trade and industry. „We will follow this path consequently and therefore extend the production capacities of the E/D/E warehouse eLC and, thus, achieve a further performance optimisation.“

In addition, E/D/E is active in various other future fields. In order to further develop the business model Toolineo, dialogues were sought with a large number of important distributors. The results of these exchanges were discussed thouroughly by the E/D/E Partner Advisory Board. Based on these conclusions, the E/D/E Partner Advisory Board has made a recommendation, to further develop the E/D/E e-commerce and e-business concepts – and therewith Toolineo – customer-oriented and compliant with the requirements of the association. 

At the same time, we are working with urgency on further developing the electronic conncetion systems, such as e-procurement-modules Multishop and the electronic data center eDC. The department digital marketing was established in order to consult and support distributors when having questions concerning their digital strategy.

Overview of the business divisions

The ESH EURO STAHL-Handel recorded an increase of 32.7 percent to 1 billion euros trading volume. Thereby, the E/D/E positions itself as the market leader among the buying associations in the steel sector and becomes an important partner for medium-sized steel traders. The ESH benefited from a very good economic situation especially in the construction sector. New strong members contributed to the growth. The strategic partnership with the market-tested steel.shop, which was announced in the beginning of 2018, opens up new paths for the distributors of the ESH in their digital competition with big steel traders and producers.

The E/D/E business division building services with its distributor groups WUPPER-RING, VGH International and mah proves robust with a high capacity utilisation in the craft sector. Overall, the sales volume increased by 12,2 percent to nearly 1.4 billion euros. In particular, the WUPPER-RING grew at home and abroad disproportionately by 37.7 percent, due to the successful acquisition of new members.

For 2018, too, the necessary personnel conditions for a continuing positive development are provided. Since 1st February 2018, Georg Wolf – with his long-standing industry experience – has taken over responsibility for the business division building services. He succeeds Rolf Kaps, whose major impulses over many years contributed to the positive development of the building services distributors at E/D/E.

The other product areas of the E/D/E business divisions, such as tools, building fittings, PPE, etc. also maintained a positive tone. The trading volume of the business division I (precision tools, hand tools, machines) grew by 2.4 percent to 581 million euros. Besides the expansion of the warehouse business, the optimization of the sales tools for the respective distributor groups was a central point. 

The business division II (building and furniture fittings, safety engineering, fastening systems, building components) confirmed the high level of the previous year - its trading volume grew slightly by 0.4 percent to 1.3 billion euros. In the previous year, special attention was paid to the digital process chain from the distributors to the customers of the craft sector. In doing so, it was achieved, for example, that the craftsmen had direct access to the E/D/E shop system without having to leave their own individual software environment. Moreover, using a direct data connection, the planning and production processes in the craft sector were optimised. 

The business division III (power tools, construction equipment and tools, factory equipment, welding technology) increased its trading volume in 2017 at high level by 1.7 percent to 941 million euros. The main focus of the activities was the foundation of the MAB. „We want to counteract the heterogeneous dealership structure, which is divided into numerous groups, and provide more planning security and commitment for the contract suppliers“, says Dr. Trautwein. Further priorities were set on the optimisation of the purchasing advantages for the sectors factory equipment and power tools, which increasingly face pressure on margins due to the growing online business. Advantages were achieved for the distributors through new foreign suppliers and precise agreements with leading brand manufacturers.

Innovations and efficiency enhancement build the focus of the business division IV (PPE, technical trade, workshop materials). Its trading volume grew by 6.8 percent to 656 million euros in 2017. The E/D/E trademark ForSec has developed very positively in the sectors lenses and earmoulds during the past few years. Due to exclusive procurement structures as well as a nationwide distribution network, ForSec could be established among the respective leading brands. As a service for the industry customers, the "Personal Safety Manager" went live in the PPE sector. With more than 200 000 products, it supports the PPE experts in retail by creating individual plans for the personal safety equipment (PSA) of the industrial customers’ sector.

Outlook: Continuing the growth path in the core business

For 2018, the E/D/E group expects a trading volume of 6.3 billion euros which represents a growth of 226 million euros or nearly 4 percent in the product areas. Thereby, it intends to pursue its course of growth. The growth momentum of the fourth quarter 2017 again showed itself in January: The trading volume increased by almost 13 percent. All core areas developed positively, particularly the steel sector exceeded the forecasts significantly with a plus of nearly 40 percent. 

The main focus of the financial year 2018 lies in the increasing expansion of the E/D/E service offerings according to the specific requirements of industrial B2B. The competitiveness of the distributors will be significantly shaped by the ability of individual adaption to the requirements of the customers in the (regional) market and through the digital connection of customers from the industry and craft sector. Accordingly, the E/D/E invests more in individual catalogue concepts, digital connection solutions, e-commerce systems and logistics expansions.

These investments contribute to the E/D/E strategy and organisation development process EVOLUTION with the primacy of 2018 being the „year of acting“. The results will be noticeable through the strengthening of service offerings within the daily business of the E/D/E members. Dr. Trautwein: „As a first step, we will present the results and insights from the innovative stakeholder analysis (ISA) within the specialist circles and sales groups and discuss further conclusions together with our members. Main focus here: the benefit that our members and cooperation partners have to expect.“

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