LIQUI MOLY well positioned despite a 50 percent profit slump

The lubricant specialist LIQUI MOLY was not spared by the pandemic. Although sales increased by 7.1 percent to a new record value, profits fell sharply by 50 percent due to a multi-million investment program. The lubricant specialist had enough strength to make the necessary investments without external capital and debt and to get through the Corona crisis.

(Ulm) LIQUI MOLY’s sales increased by 7.1% in 2020 to 611 million euros. Given the devastating effects of the pandemic on the global economy and the decline in global oil and fuel consumption, this is a great success. Profits halved to 25 million euros – also because the medium-sized company from Ulm invested almost 45 million euros in marketing measures during the crisis. Additionally, more than 100 new employees were hired, bringing the total number of employees to 989 by the end of 2020. “We took an aggressive approach and distinguished ourselves from our competitors. Despite meticulous implementation of hygiene measures, protection concepts, and home office, we were available for our customers around the clock and significantly increased our presence in all media. Our growth is just the logical consequence of our actions,” describes the managing director his course.

Solid Starting Position

Due to the company’s solid starting position, with a balance sheet total of 208 million euros and an equity base of 168 million euros, as well as an equity ratio of over 80 percent for LIQUI MOLY GmbH, the lubricant specialist had enough strength to make the necessary investments without external capital and debt. These investments paid off, according to Ernst Prost: “Thanks to our strategic decisions, we were able to make significant progress by the end of the year.” At the same time, he emphasizes that LIQUI MOLY could have achieved a much higher increase in sales. “We felt the scarcity economy due to Corona in all areas, lockdown, short-time work, and home office with our suppliers. We lacked raw materials, packaging materials, labels, closures, and logistics as well as freight capacities noticeably decreased,” says the managing director.

Social Responsibility

In 2020, the company also made headlines with its social responsibility. A Corona bonus for all employees and product donations worth more than 5.5 million euros to fire departments, rescue services, first aid organizations, and other non-profit organizations were a matter of course for the medium-sized company. “In such times, we must stick together, and everyone should contribute to the common good as best as they can,” describes Ernst Prost.

Solid Growth Rates in the Domestic Market

Unlike in previous years, LIQUI MOLY’s sales in Germany increased more than in exports this time. Nevertheless, exports also recorded stable growth, as seen in the business in the USA and Canada.

Good Growth Across All Segments

Overall, all divisions of the full-range supplier recorded successes. In the company’s core business of motor oils, the sales increase is 6.4 percent. The fact that people are traveling less and spending more leisure time at home is also reflected in the sales increase of products for motorcycles, bicycles, and boats.

Investments in Logistics

In 2019, July and August were record months with nearly 60 million euros in sales each. The sales in November and December 2020 were also among the best in the company’s history. Ernst Prost is confident that he has a very good starting position for 2021 and can reach or even exceed record sales again: “This year we are reaping the fruits of our advertising offensive from 2020 and will also go full throttle in 2021.” For further growth, the lubricant manufacturer plans additional investments, especially in its own logistics.

Photo: © LIQUI MOLY / Caption: Managing Director Ernst Prost reflects on an eventful and successful business year 2020.
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