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Photo: Hilti: CEO Jan Doongaji in his office

Dear Readers,

2023 proved to be another year of significant challenges resulting from ongoing economic and geopolitical volatility. The Russia-Ukraine and Hamas-Israel conflicts, continued inflation and subsequent increases in interest rates all shape the current environment. 

The construction market outlook, particularly in Central Europe, has continuously softened throughout the year. On the other hand, markets in South Asia and parts of the Middle East remain strong. In addition, strategies to ensure critical technologies in several regions and growing energy needs globally have resulted in major investments in the energy and industry area. 

In this volatile environment, we have recorded growth of 9.0 percent in local currencies, in line with our expectations defined at the beginning of the year. This growth is well distributed across the globe and represents a significant outperformance of the market. The strongest driver of this market outperformance is clearly our new cordless platform Nuron, combined with our proven Fleet Management approach. As always in uncertain times, the Swiss franc appreciated against all major currencies and brought our sales growth down to 2.7 percent in Swiss francs, resulting in turnover of more than CHF 6.5 billion. We continue to invest in the future of our company at the highest level. Expenditures for research and development equaled 7.0 percent of sales. Despite this development, our return on sales has again increased to 11.8 percent, after falling in the previous year. Totaling CHF 770 million, the operating result grew at a considerably stronger rate than sales. This increase was primarily driven by solid margin improvements. 

2023 was also the year in which we completed the global rollout of our new group strategy Lead 2030. Our new purpose, “Making Construction Better,” reflects our conviction that innovation, direct sales and the trust customers place in our brand make us best positioned to help our customers address the challenges that the construction industry faces. One of these challenges is productivity. In our ambition to be our customers’ best partner for productivity, we defined that next to driving productivity improvements on the jobsite, we need to help our customers run their businesses better. And in order to do that, we need a strong software offer. In 2023, we took the next important step in that direction with the acquisition of 4PS, a Netherlands-based market leader in the area of business management software.

Photo: Hilti: CEO Jahangir Doongaji standing next to a Hilti tool, in the back there are some screens

Another key priority in our strategy is the increased focus on becoming our customers’ best partner for sustainability. In 2023, we achieved an important milestone by reaching carbon neutrality in our own operations. In addition, we have committed to the Science Based Targets initiative and thus to achieving net zero by 2050. To do so, we have started to integrate sustainability targets seamlessly into our new product development process. This approach goes hand in hand with our circular Fleet Management business model that enables us to drive circularity in our customers’ tool parks. In terms of our social engagement activities, our corporate volunteering program enabled our team members around the globe to participate in community outreach and charitable endeavors. Our teams volunteered roughly 72,000 hours to support more than 850 projects. 

Our new purpose, “Making Construction Better”, reflects our conviction that innovation, direct sales and the trust customers place in our brand make us best positioned to help our customers address the challenges that the construction industry faces.

Our strategy is built on the foundation of a passionate and inclusive global team. In 2023, we were able to further increase the engagement of our people. For the first time ever, we are now in the top quartile of the global benchmark of employee engagement. 

And finally, 2023 was also the first year after the changes in our Board of Directors and our Executive Board. At the end of 2022, Christoph Loos took over as Chairman of the Board of Directors, while I assumed the role of the Group’s CEO. Both of these handovers, along with other significant changes on both boards, had been prepared well in advance and were thus completed smoothly.   

Looking back, we can say that 2023 was a good year for the Hilti Group. Despite the challenging environment, we gained substantial market share and delivered strong financial results. In addition, we rolled out our new group strategy and invested strongly in the future of our company. I would like to extend my sincere gratitude to all 34,000 Hilti team members worldwide, whose hard work and dedication throughout the year formed the basis of our success. Another big thank-you goes to our customers, suppliers and partners for their loyalty and trust over many years. We look forward to “Making Construction Better” together with all of you in the years to come. 

Jahangir Doongaji