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Stable basis in 2016, strong growth in 2017 – E/D/E positions itself for the future

  • High level confirmed: Trading volume 2016 of EUR 5.56 bn
  • Building services and steel: major members acquired
  • Burst of growth in 2017: EUR 5.89 bn trading volume planned
  • Market logic and value-added chain: Changes require a new way of thinking and innovative services with added value
  • Future: EVOLUTION – strategical and organisational development process launched

Wuppertal – The Wuppertal-based E/D/E association recorded high-level growth again in 2016, with particular emphasis being placed on foreign business. The various business divisions saw a development either in line with or above the market level. At the same time, the core projects of the strategy programme CHALLENGE 2020 developed positively.

In the past financial year, the E/D/E Group increased its trading volume with members and cooperation partners to EUR 5.56 billion. This corresponded to year-on-year growth of 1.1 percent or EUR 58 million. The trading volume achieved abroad rose by 5.3 percent to EUR 1.24 billion. The E/D/E Group’s consolidated net income amounted to EUR 15.6 million in 2016 (2015: EUR 16.1 million). Cash flow came to EUR 27.3 million (2015: EUR 27.3 million) and equity as of the reporting date of 31/12/2016 was EUR 367 million (2015: EUR 353 million). As of 31/12/2016, the equity ratio stands at 45.5 percent (2015: 44.4).

Important new members
Major traders from the areas of building services, steel and tools, including Partner für Technik and FAMO-Gruppe, opted for E/D/E. The group is involved in advanced discussions with other traders about a cooperation.

The company EHH EURO HAUSTECHNIK-HANDEL, jointly founded by mah and WUPPER-RING in 2015, completed its first financial year very successfully: product ranges were combined, design bath projects implemented with the manufacturing industry and a new trademark line for heating products established. A major trend towards consolidation in the area of building technology led to a significant reduction in the trading volume following the loss of members due to the sale of companies. Despite this, it was possible to almost reach a level on par with the previous year of EUR 1.22 billion (minus 1 percent) thanks to organic growth and new business. Adjusted for structural effects, growth was at 4.9 percent. In particular, growth abroad supported the positive development. The E/D/E cooperation partner VGH International, who operates in 15 European countries with foreign sales of over EUR 3.6 billion, again made a significant contribution and continued on its course of growth seen in past years. Dr Andreas Trautwein, Chairman of the E/D/E Management Board: “With our new partners, we are steering towards a clear path for growth. In 2017, we will achieve a centrally regulated trading volume of over EUR 1.3 billion in building services in Europe. We will also continue to strengthen PVH exclusively with our services.”

E/D/E is also taking advantage of opportunities abroad in Europe: EDE International acquired new members, cooperation partners and suppliers in defined countries in 2016. In the meantime, the E/D/E Group generates nearly 23 percent of its total trading volume abroad.

The ESH EURO STAHL-Handel founded out of the business division Steel in October 2016 is focused on business in Europe as well and broadens product expertise. Mutual supplier options are already being used with members in Austria and Switzerland. Partners in Benelux and Scandinavia are to follow soon. The volatile prices last year remain only slightly noticeable in the trading volume following strong demand for steel products from autumn – it reached EUR 792 million (minus 3 percent).

The other product groups benefited in many ways from the consistently good performance in the construction industry and a good level of utilisation in the core target group of craftsmen. In the tool area, there was little impetus from the industry as key sectors such as engineering tended to develop sideways. E/D/E and its members were able to make gains on the market through a number of customer-oriented sales activities. Almost every division was able to increase its stock turnover in 2016 by tailoring its product range more closely to the needs of members. In 2016, the central warehouse eLC in Wuppertal surpassed the threshold of 100,000 stock items.

Over the past two years, ETRIS BANK has developed and set up a modern and high-performance IT platform as part of the core project ZR 2020. It won its first third-market customer in 2016, which it also linked into the new system. Consequently, all centralised settlement processes are handled automatically and digitally through ETRIS BANK. The third-market business will be pushed in 2017. In addition to this, the bank is expanding its factoring service.

The core projects of the strategy programme CHALLENGE 2020 developed positively. In 2016, the electronic Data Center (eDC) processed data from over 600,000 items and sent them to participating traders, thereby offering significant added value in day-to-day business. The core key figures at Toolineo are developing positively, such as the repurchase rate and marketing efficiency as well as traffic and turnover. Further product range growth will now be achieved through the connection to trader warehouses. The technical solution has been available since 2016. Together with traders, work is currently under way to create the additional conditions needed to increase the product range from 80,000 today to 200,000 items by the end of 2017. This means a good foundation has been laid after just one year so as to scale Toolineo. All of E/D/E’s future projects are consistently evaluated on an ongoing basis and adjusted to the needs of the market and its members.

Dr Andreas Trautwein: “We succeeded in 2016 in increasing our trading volume again in a persistently demanding market environment, and we have set the course for the future. We see that the market logic and the value chain are currently undergoing fundamental changes – the market is being reshaped. In order to safeguard our ability to perform in the future too, we have launched EVOLUTION, a company-wide strategy and organisation development process.”

Investments in the future.
E/D/E’s development mandate states that it should promote the commercial autonomy of its members, as well as help the suppliers and cooperation partners to be able to lead their business successfully and sustainably. Dr Trautwein: “The largest portion by far of the net income for the year is always reinvested so as to further booth the financial strength of the E/D/E group. Furthermore, it is our declared objective to create added value for our partners and to develop custom-fit, competitive services that cash in on evolving market requirements. This is why we have launched EVOLUTION and will also make significant investments in the future in 2017.”

As of 31 December 2016, the companies in the E/D/E Group had 1,103 employees, including trainees, across Europe (2015: 1,085). Within the scope of the outlined consolidation trends and the situation among competitors, the number of members changed to 972 specialist retailers (minus 19) and 263 retailers (minus 15).

In 2017, E/D/E plans to achieve an increase in its trading volume of 6.1 percent or EUR 336 million to EUR 5.89 billion (ZR plus 5.8 percent / EUR 306 million, warehouse plus 11.4 percent / EUR 30 million). Dr Trautwein: “We have made a very optimistic start to the new financial year, but are aware of the volatile underlying political and economic conditions in Europe. We will align our corporate management correspondingly. Following a phase of consolidated, we now find ourselves again on a clear track for growth in our core business.”

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