Pandemic rewards power tool billionaires
Shares of the Hong Kong-based Techtronic Industries (TTI) soared 11.6 per cent last week, after the power tools maker also announced, what it described as “extraordinary” earnings results for the first half of 2021, according to a recent Forbes report.
After TTI’s revenue rose 52 per cent to $6.4 billion in the six months ended June, the company also posted strong sales growth across all of its business units and geographic markets with its North America sales rising 50.2 per cent and Europe jumping 62.3 per cent while other regions rose 50 per cent, according to the report.
Best known for its Milwaukee and Ryobi brands of power tools and the iconic Hoover vacuum-cleaner brand, TTI is now also benefitting from strong demand for home improvement projects in the U.S, according to the report, with TTI deriving 78 per cent of its revenues from the U.S. market and just over 14 per cent from Europe in 2019.
As its largest client, Home Depot, recently said the shortage of new housing in the US has also helped to boost home values and is also stimulating spending on home improvements.
TTI’s bottom line grew even faster than its sales in the first half, according the Forbes report, with the company beating market expectations when it generated a net profit of $524 million, a 58 per cent jump from the same period last year.
TTI’s Cofounder and Chairman Horst Julius Pudwill recently featured in a Forbes Asia magazine cover story, where he and vice chairman Stephan Horst Pudwill (his son) discussed the company’s strategic adjustments throughout the pandemic.
During the interview they said their management team made a lot of bold decisions in 2020, especially at a time when competitors were furloughing people, TTI opted to further in the business. It built up inventory to support its customers and it also invested in R&D, moves which are now paying off, according to the report.
TTI’s stock has also almost quadrupled over the past three years, giving it a market value of about $38 billion. The share surge has lifted the net worth of Pudwill senior to $8.8 billion, according to the Real-Time Billionaires List, while fellow cofounder Roy Chi Ping Chung’s fortune is estimated at $1.3 billion, according to the report. TTI was established by the pair in 1985, and listed on the Hong Kong Stock Exchange in 1990.
Today, TTI is one of the world’s largest suppliers of cordless power tools and floor care appliances employing 48,000 people worldwide at the end of last year.