Miele bucks crisis with record sales

EUR 2.83 bn turnover in Financial 2009/10 / High rates of increase again in Germany and continental Europe / Turnaround in key overseas markets

(PresseBox) (Gütersloh, ) Although the past year was marked by world recession, the family-run Miele company reached for new heights, with the world-leading manufacturer of premium domestic appliances reporting EUR 2.83 bn turnover in the 2009/10 year ending June 30, 2010. This corresponds to growth of 2.2% and also marks the highest turnover in the company's 111-year history. During the same period, the worldwide workforce remained stable at approx. 16,600.

With this year's increase, Miele has more than compensated for the slight drop in turnover of 1.3% suffered in the last business year but one. "This shows once again that persistent pursuit of quality, innovation and sustainability pays its way, even under the most unfavourable economic conditions", says Olaf Bartsch, board member responsible for Finances, Controlling and Administration. With a broad range of appliances covering cooking, baking, steaming, refrigeration, coffee making, dishwashing as well as laundry and floorcare applications, the Miele Group is well represented on all five continents and, for the most part, world market leader at high-end price points. In the key strategic commercial division entitled Miele Professional, the company also offers washer-extractors and dishwashers for heavy-duty use together with washer-disinfectors for reprocessing medical instruments and laboratory equipment.

The 2010/11 financial year just commenced is viewed unanimously by the 5-strong management team at Miele, a company which has been in the private ownership of the Miele and Zinkann families since its inception, as giving reason for reserved optimism. "Should the broadly positive economic forecasts come to fruition, Miele's growth can be consolidated and will gain momentum", says Managing Director and Co-Proprietor, Dr. Markus Miele. This will be aided and abetted by numerous new products and technology to debut shortly at strategically important international trade shows such as the IFA in Berlin, Westphalia's own Kitchen Mile along the A30 motorway, Medica or the LivingKitchen exhibition. The first smart grid enabled home appliances which automatically launch programmes when electricity is at its cheapest are prime examples of such innovations. The same applies to world premieres aimed at convenience and efficiency in the use of detergent or mobile controls for domestic appliances using commonplace computer and telephony equipment such as iPhones or iPads. The extremely energy-efficient and new G 5000 dishwasher generation, first presented in April 2010 in Paris, sets new standards in terms of flexibility, user convenience and design. "With such unique selling propositions, Miele is once again restating its claim to being technology leader in its branch of industry", says Dr. Eduard Sailer, board member responsible for technological issues.

Of equal importance to the business perspectives of the company are well-established sales and service structures the world over as well as the brand image and strong reputation of the Gütersloh-based company. "The near collapse of the financial markets resulted in a general air of insecurity", summarises Managing Director and Co-Owner Dr. Reinhard Zinkann, "but it is precisely in times like these that consumers hold such virtues as quality, credibility, dependability and sustainability in higher esteem than is otherwise the case."

Independent and empirical studies once again underline the credit and esteem which Miele enjoys in these disciplines. For example, Europe's consumers voted Miele 'Most Trusted Brand' for the tenth time in an international survey covering the domestic appliance industry. For the 16th time, Germany's 'Service Monitor' lauded Miele for having the best service operation in its branch of industry. These accolades were seconded by numerous design awards as well as top positions in product comparisons. Miele, for instance, was credited with the 'Best Vacuum Cleaner' in a test by Germany's Stiftung Warentest consumer watchdog magazine (5/2010 edition) after having previously excelled with the best washing machine in a previous test (9/2009). On the dishwasher front, Miele even roped in a double win (4/2010).

Germany once again growth engine

As in the previous financial year, the German home market which, at EUR 840 m, accounts for around 30% of total Miele turnover made a sterling contribution towards the success of the company. Growth in Germany amounted to around EUR 40 m, corresponding to an increase of some 5%. "Miele's premium positioning throughout and a clear focus on dealerships providing quality pre-sales advice is prized by both retailers and consumers alike and has brought us increased market shares", maintains Dr. Reto Bazzi, responsible for Sales and Marketing.

Worldwide sales within Miele Professional reached EUR 294 m during the period under review, generating growth of 2.7%. This was not least attributable to the successful market launch of the new Octoplus range of laundry machines which celebrated its official unveiling at the IFA exhibition in 2009. The current investment focus is on the medical, dental and laboratory areas, where Miele Professional has graduated from manufacturer of machine and equipment to a single-source purveyor of comprehensive solutions. The first step in this direction was taken in autumn 2009 with the purchase of production facilities from Dirschl, a manufacturer of large-chamber washer-disinfectors and container and trolley washers. These entirely new additions to the product portfolio will be integrated into operations at Miele's Austrian plant in Bürmoos during 2011, where a new production building is currently under construction. First installations under the Miele brand have already been sold. Later this year, the second stage involving the in-house production of sterilisers for general practitioners and dentists will follow.

Investments in innovation and growth

In total, the Miele Group invested EUR 137 m worldwide during the past business year, just EUR 50 m less than in Financial 2008/09 which at the time marked the highest investment volume in the company's history. "That year, we invested so heavily in expanding our international sales structures that a drop in investment levels was inevitable", explains Financial Director Olaf Bartsch. Investments in production sites to strengthen Miele's innovative leading edge and leverage Miele's production strength have remained at a consistently high level. In Bünde, for example, a new building aimed at optimising the production of steam cookers was brought on line. A completely new wing at the Bielefeld factory has streamlined the development and production of washer-disinfectors for medical applications, making operations faster, more efficient and more flexible. During the same reporting period, a new electronics plant at Brasov in Romania was completed, providing Miele with urgently needed additional capacities for electronic components and sub-assemblies. This brings the number of production locations to 12, of which 8 are in Germany and one each in Austria, China, the Czech Republic and Romania. A further focus of investment was the building and furnishing of bespoke brand showrooms, so-called Miele Galleries, in Adelaide, Barcelona, Kiev, London, New Delhi and Riga.

Recession weathered without lay-offs

The workforce at Miele remained constant at 16,561. The slightly higher count towards the end of the last but one business year, when figures were just less than 300 higher, was the result of winding up a short venture. The number of employees in Germany now totals 10,324, 117 fewer than a year ago. Statistically speaking, this corresponds to a drop of 1.1% but was solely attributable to natural fluctuation and the termination of fixed-term employment contracts. Of the 6237 employees outside Germany (up 2%), 4949 (80%) are employed in Sales and Service.

Currently, 434 young persons are undergoing apprenticeship training in Germany in around 30 skills and professions. 60 of these are participating in dual education involving a university degree in mechanical or electrical engineering or business studies and a vocational apprenticeship. The last intake of 10 industrial clerks to sit their final examinations achieved an average mark of 1.4 on the German scale, far higher than the average for the federal state of North Rhine-Westphalia. Once again, one Miele apprentice - this time an industrial electrical fitter - ended his training as year's best in the whole of Germany.

Upswing on foreign markets

Business outside Germany, which closed the previous year 4.6% down as a result of the recession, has gained impetus. At EUR 1.97 bn, Miele grew abroad by 1.1% - achieving the second-highest foreign sales figure in its history. Developments outside Germany's borders, however, remained less than uniform. Important subsidiaries among the first ever founded, such as Italy, Belgium and, above all, Austria, reported considerable gains. The same can be said of long-standing overseas markets such as Australia, Canada and Asia, in particular China and Singapore. In the USA, the cradle of the real estate and financial crisis, the market has bottomed out and started to climb out of recession. Here, too, there are clear signs of growth. Some southern and eastern European countries, on the other hand, continue to struggle with the aftermath of the financial and economic crisis, further fuelled by concern about the health of state finances. A slight weakening of the Euro, not least attributable to the above, worked in favour of Miele outside Euroland, reversing an opposite trend which prevailed during the previous business year.

The establishment of a sales subsidiary in India with the opening of a Miele Gallery in New Delhi in autumn 2009 and the assumption of operative business marks a milestone in Miele's efforts to grow its market presence throughout the world. Further new showrooms, presenting the world of the Miele brand in an illustrious and befitting manner, are due to open soon in Shanghai and Santiago de Chile. In total, Miele is represented outside Germany in 45 countries with its own sales subsidiaries as well as in around 50 further countries through importers and distributors.

Recently, the hitherto single biggest order in the company's history, with deliveries of more than 7000 domestic appliances to the world's tallest hotel and apartment building, the Burj Khalifa in Dubai (cf. Miele 2008/09 business report), was topped: In the second half of the year, Miele is to begin equipping the 1000 apartments of the exclusive Mashattan project in Istanbul with appliances to the tune of 9200 units.

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