On June 13, 1731, in Solingen, Peter Henckels entered the Zwilling logo as a trademark in the register of knife makers. That laid the foundation for an extraordinary career. 275 years later, the manufacturer from Germany's knife capital has become a global player with subsidiaries in 10 of the largest industrialized countries.

 

Millions of people all around the world use Zwilling Group products every day from the three product lines: kitchen (knives, scissors, pots and utensils), cutlery and beauty (manicure and pedicure items). ZWILLING J.A. HENCKELS AG enjoys a longstanding international reputation built on the twin pillars of product quality and product functionality.

Distribution synergies bring growth in sales

The Zwilling Group is active in the kitchenware and beauty segments. The kitchenware segment includes the manufacture and marketing of high-quality knives, cutlery, and premium cookware. Innovative manicure, pedicure, and professional hairdressing equipment form the beauty segment.

 

Competition on the consumer goods market increased in the difficult 2009 business year. The global trend towards price-aggressive distribution formats and discount campaigns in trade continued. Brands were still in demand from consumers, but frequently at significantly reduced campaign prices. Even the Zwilling Group was unable to escape these developments.

 

In a tough economic environment, the Zwilling Group recorded a 5 % increase in net sales to € 349 million. Adjusted to allow for the positive currency effect in the amount of € 10 million, the increase in sales is 2 %. This growth was due to the first whole-year inclusion of the Staub Group and Demeyere N.V. in 2009. These companies were acquired in 2008 and successfully integrated into the Group. Since the acquisition, these brands have been distributed worldwide via the Zwilling distribution network. These distribution synergies have contributed to the marked increase in net sales.

 

The Zwilling Group has responded to the harsh economic climate, which has led in part to reduced capacity utilization, by adjusting its product ranges, carrying out restructuring, and optimizing capital lockup. The negative effect on earnings resulting from the drop in margins could only partially be compensated for through clear cost savings. The operating result of the Zwilling Group was less than that of the previous year.

 

In the kitchenware segment, the effects of the fall in demand due to the economic crisis were noticed with a time lag. In the USA, where the business was already noticeably weaker in 2008, the situation stabilized at the end of 2009. Business in Canada continued to be positive, reaching the level of the previous year.

 

The Asian markets developed differently. Tied in with the pleasing development of previous years, the kitchenware segment continued to grow in China. Sales shrank on the Japanese market and consequently so did net sales. Decreased demand for the Zwilling and Miyabi brands could be partially offset against increased net sales for the Staub brand.

 

In Germany, the net sales without special business were slightly above the previous year’s figures. Net sales in specialized trade increased in the significant distribution channels. In contrast, net sales fell at the Zwilling shops, due to lower customer frequency.

 

Outside of Germany, net sales in Europe increased due to the acquisitions of the previous year. However, business in this region was more severely affected by the economic crisis than business in Germany, falling below the figure for the previous year. The UK subsidiary established at the end of 2007 showed positive development.

 

In October 2009, the Zwilling Group acquired the distribution rights in Germany and Austria for the Belgian brand GreenPan. In the Benelux countries, this brand has been distributed via Demeyere for many years. GreenPan is a renowned supplier of innovative ceramic-coated cookware with particular health and eco-friendly properties. GreenPan is a welcome addition to the existing range in the kitchenware segment. After the successful launch in the fourth quarter of 2009, further growth is expected from these products.

 

The beauty segment was also affected by decreased demand, ending the business year with a fall of 5 % compared to its strong performance the previous year. In the high-quality beauty products segment, Zwilling has the strong premium brand Tweezerman. The brand is characterized by innovative products, modern design and eyecatching marketing. A fall in Tweezerman sales on the US market could be offset by increased internationalization endeavors in the UK, Germany, and Spain.

 

The hairdressing supplies segment was burdened by a strong reduction in inventories, trade discounts as well as falling export prices. Jaguar and Tondeo, manufacturers of high-quality professional hairdressing scissors, could not escape this difficult market environment.

 

The Zwilling Group division assumes that the economy has reached the pit of the slump and that the consumer environment will slowly begin to recover in 2010. This applies in particular for the established brands in North America, where the customer base could be expanded, Germany, and the rest of Europe. Further stagnation is to be expected in Japan. It is expected that growth will continue on the Chinese market, although not to the same extent as in the strong previous years. In emerging markets such as Brazil and Russia, a recovery in demand is again to be expected. Sales campaigns in various regions should help to further develop the market position of the Zwilling Group and gain additional market shares in stagnating and only slowly growing markets. The further utilization of distribution synergies with the Staub and Demeyere brands as well as the more intensive marketing of the GreenPan brand will support the growth rate. The Zwilling Group division therefore expects an increase in the operating result in 2010. Overall, moderate annual results are to be expected.