Hilti AG

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Hilti AG

Feldkircherstrasse 100
Postfach 333
FL-9494 Schaan
Liechtenstein
Telephone: +423 234 2111
Fax +423 234 2965
Web site: http://www.hilti.com

Public Company
Incorporated: 1941 as Maschinenbau Hilti OHG
Employees: 14,390
Sales: SFr 2.99 billion ($2.02 billion)(2002)
Stock Exchanges: Swiss
Ticker Symbol: HILTI
NAIC: 332722 Bolt, Nut, Screw, Rivet, and Washer Manufacturing; 325211 Plastics Material and Resin Manufacturing; 332510 Hardware Manufacturing

Hilti AG is the largest industrial corporation in tiny Liechtenstein and one of the world’s leading manufacturers of power tools for the professional construction and building maintenance markets. Hilti’s trademark red-and-white cases enclose a full range of power tools including direct fastening systems, anchors and screw technologies, positioning systems, drilling and demolition equipment and technology, diamond coring systems, installation systems, and fire-stop and foam systems. The company has also been developing a laser measuring unit since the early 2000s, including a joint-venture with Germany’s Jenoptik, concluded in January 2003. In addition to manufacturing, Hilti also runs a strong service operation, providing consulting and technical assistance on major construction projects worldwide. Hilti has long been an internationally operating company, with production plants in Austria, Germany, the United States, Mexico, Hungary, China and in its home base of Schaan, Switzerland. Hilti also operates its own sales and marketing network, extending its reach into more than 120 country markets. Europe is the group’s largest market, accounting for 63 percent of the group’s sales of nearly SFr 3 billion in 2002. (Like most Liechtenstein companies, Hilti uses the Swiss currency.) North America is also an important market for the company, at 25 percent of sales, while the Asia/Pacific region accounts for 10 percent of sales. While Hilti is a public company, all voting rights are held by the family-controlled Martin Hilti Foundation, and only participatory shares are listed on the Swiss stock exchange. In February 2003, Hilti announced plans to buy back all participatory shares in order to take the company private. The company is led by chairman and son of company founder Michael Hilti and CEO Pius Baschera.

Garage Origins During World War II

Martin Hilti and older brother Eugene set up a mechanical workshop in their garage in the town of Schaan, in Liechtenstein, in 1941. Then just 26, Martin Hilti’s background included studies in mechanical engineering and automotive design at the Wismar Engineering College in Germany and the brothers began producing equipment and components on contract for the German automotive industry. If tiny Liechtenstein adopted a neutral status during World War II, Martin Hilti did not. In fact, he edited a Nazi-sympathizing newspaper during the war and was later suspected of having helped Nazi leaders launder assets. (At the end of his life, Hilti admitted to having served what he called an “inhuman regime.”)

Hilti’s support for the Nazi government helped the company win contracts in Germany, and the company, Maschinenbau Hilti OHG, quickly grew to more than 100 employees. While at first the company manufactured products based on other designs, the Hiltis became interested in developing their own product designs. With the collapse of the Nazi government, the Hiltis were forced to find new markets. The company turned to Switzerland, and began contract manufacturing of equipment for that country’s textile industry.

The Hilti business grew strongly over the next decade, leading the company to begin extending its sales into other countries. The importance of the Italian textile market made that country a natural choice for the company’s first new international market, and in 1952, Hilti opened a representative office there. The following year, Hilti turned to Belgium, turning to a third party, Pastiels SA, to handle its sales and distribution. Meanwhile, Hilti continued to search for a new line of products that the company would be able to develop itself.

At the end of the 1940s, Martin Hilti discovered power tools—or more specifically, a new type of tool for fastening nails using a piston device to drive the nails in a variety of surfaces, including concrete and steel. Hilti was so enthusiastic about the machine’s potential that he bought up the original design and patent rights. Hilti then set to work refining the device, and, especially, developing a safer design. In 1952, Hilti released its first hand-tool for driving threaded studs. That design was followed in 1953 with the group’s first high-velocity fastener, at first sold under the Perfix brand name. By 1954, the company had adopted its own name as the brand name for its growing tool line. In 1956, the company improved on the design, adding a trigger-firing mechanism.

Hilti focused more and more of its attention on developing its fastener tool range, and especially its piston-driven fastener device. By the mid-1950s, the company had settled on gunpowder as a means of delivering thrust to the fastener piston and by 1957, Hilti had perfected his design. In that year, the company launched the DX 100 power-actuated fastening tool. That product was to put Hilti on the map among the world’s professional hand tool manufacturers.

The success of the DX 100 led Hilti to expand its international presence, extending its sales network into Sweden, Ireland, England, South Africa, the United States, and Peru before the end of the decade. In 1960 the company converted to a limited liability company, changing its name to Hilti Corporation. In that year, the company founded two new international subsidiaries, Hilt France SA and Hilti Australia Pty. Ltd., as its sales continued to enjoy international growth.

The success of the DX 100 encouraged the company to exit its textile equipment production and to focus entirely on the professional power tool market. In the 1960s, Hilti began adding new product lines, such as a range of drilling and anchoring tools and systems in 1964. While a number of its products remained based on third-party designs, Hilti introduced its first in-house designed rotary hammer drill in 1967. Much of the company’s later success came as a result of its growing commitment to research and development, which took on steam with the building of a technical center in 1964. Meanwhile the company’s expanding product line led it to construct a new factory in Liechtenstein, which took over it powder-actuated tool production.

As Hilti moved to take control of its own product designs, it also took more and more control of its distribution network, acquiring a number of formerly independent distributors. The company also set up a number of new foreign subsidiaries including in Canada in 1961, Greece and Japan in 1963, and Mexico in 1964. The following year, the company set up sales agencies in Chile, Ecuador and Spain, and established the Hilti Charter, created a unified international marketing and sales program.

Global Power Tool Powerhouse in the 1980s

Eugene Hilti had died in 1964 and Martin Hilti had assumed full control of the company. Over the next decade, Hilti built the company into one of the world’s professional power tool leaders. In 1970, the company added its first international production site, in Austria, which was followed by two more foreign plants, in Germany and in the United States, in 1971. By then, too, Hilti had begun taking control of its US sales representative, a move completed in 1972. Hilti had meanwhile been redeveloping its corporate structure, adopting a board of directors in 1969 and establishing three corporate areas, finance, engineering and marketing, in 1973. In that year, the company established a second research and development facility, in Germany.

Hilti added two more production plants at the end of the 1970s, a plastics manufacturing operation in Germany, acquired in 1975, and a factory for anchor production in England, acquired in 1978. The following year, the company transferred its US production operations to Tulsa, Oklahoma, which also became its headquarters for its North and South American operations. Hilti’s growth proved especially strong in the United States, and North America quickly became the company’s single most important country market.

In 1980, the Hilti family created the Hilti Family Trust (later renamed the Martin Hilti Family Trust), which held all of the company’s family-held shares in the company, a move designed to keep the company under the Hilti family’s control. This move was a build-up to the company’s public offering in 1986, with a listing on the Swiss stock exchange through the issuing of nonvoting participation certificates. The company also issued a limited number of registered shares. By then, the company had added a new product range, that of diamond coring tools. In 1985, Hilti reorganized its production into three divisions: drilling and demolition; powder-actuated fastening; and anchor technology. In 1986, Hilti added another new product line, that of construction chemicals.

Through the 1980s, Hilti entered a number of new markets, including China in 1981, while continuing to integrate its international sales and marketing network. In 1986 the company established a subsidiary in Korea to take over its operations in that country. The following year, the company created a new subsidiary in Chile as well. In 1989, Hilti strengthened its presence in Central Europe—the company had been operating in Poland and Czechoslovakia since the late 1960s—with the establishment of a chisel manufacturing plant in Hungary.

Hilti’s growth remained strong throughout the 1980s, with sales jumping from SFr 1 billion at the beginning of the decade to more than SFr 2 billion by decade’s end. By then, Martin Hilti was approaching retirement, and in 1990 son Michael Hilti was placed at the head of day-to-day operations. Martin Hilti remained on as chairman of the board of directors until 1994, at which time Michael Hilti assumed that role as well. Martin Hilti died in 1997.

Company Perspectives:

Throughout the world, we strive to be the leading supplier of high-quality selected tools and fastening systems for professional customers in the construction and building maintenance industries.

3Cs for the New Millennium

In the late 1990s, Hilti shifted its target to the fast-growing Asian markets—site of the many of the world’s largest construction projects. In 1994, the company established a new office in Hong Kong, which took over direction of Hilti’s Asian operations, until then conducted from the company’s Schaan, Liechtenstein headquarters. The following year, Hilti inaugurated a new production plant in China; the increased production capacity led the company to expand its sales and marketing networks into Thailand, Vietnam, Indonesia, India, and the Philippines between 1995 and 2000.

Hilti added two new product lines in 1998, those of laser positioning equipment and cutting and sanding tools. The company had also become an industry leader in fire-stopping equipment and systems, adding to a long list of company-held patents. By then, the company had rolled out a new corporate strategy, that had been in the works since 1966, launching what it called its Champion 3C Strategy, which stood for customer focus, remaining competitive, and concentrating on its core markets.

The 3C strategy helped Hilti remain a champion, as the company continued to build on its global industry leadership position at the turn of the century. Hilti had also moved to tighten its shareholding—at the end of 1999, the company bought up the 12 percent of registered voting rights not already held by the company, effectively eliminating any attempt at a hostile takeover. The company remained public however, leaving its non-voting participatory shares on the market.

Hilti topped SFr 3 billion in sales at the turn of the century. The company continued to expand its operations with the new decade, and particularly by targeting growth in its laser positioning segment. In 2001, the company acquired Ammann Holding AG, a Swiss company specialized in rotating lasers and laser tools for construction of sewers. The following year, Hilti began a cooperation with Germany’s Jenoptik to produce laser-based distance measurement devices. In January 2003, the two companies expanded their partnership, setting up the joint-venture company Hillos GmbH, to expand their collaboration into other laser-based positioning tools and equipment. The next month, citing an uncertain global financial climate, Hilti management announced that it intended to buy back all outstanding Hilti shares traded on the Swiss stock exchange and take the company private. Management stressed that in doing so, Hilti would remain committed to its growth strategy and core industrial businesses.

Principal Divisions

Positioning Systems; Cutting and Sanding; Screw Fastening Systems; Diamond Systems; Drilling and Demolition; Direct Fastening; Anchoring Systems; Installation Systems; Firestop Systems; Foam Systems.

Principal Competitors

Adolf Wurth GmbH und Co. KG; Cooper Industries Ltd.; Danaher Corp.; Nursery Supplies Inc.; Stanley Works; Snap-On Inc.; Industria e Comercio Metalac S.A.; United Southern Industries; Fimalac S.A.; Toro Co.; Fiskars Oy Ab; Grupo Ficosa International; Facom S.A.; Sandvik S.A.

Key Dates:

1941:: Martin and Eugene Hilti set up a machine shop in the garage in Schaan, Lichtenstein.
1948:: Hilti acquires patents to piston-driven nail fastener.
1952:: Company establishes sales subsidiary in Italy, beginning company’s internationalization.
1957:: The DX 100 powder-actuated nail fastener debuts.
1960:: Company converts to limited liability status and adopts Hilti Corporation name.
1964:: Eugene Hilti dies, and Martin Hilti takes full control of company’s direction
1970:: Company opens first foreign production site, in Austria, followed by plants in Germany and in the United States in 1971.
1980:: Hilti family places all shares in company in Hilti Family Trust.
1986:: Hilti goes public, placing participatory shares on Swiss stock exchange.
1990:: Michael Hilti, son of Martin Hilton, becomes company chairman.
1995:: A production facility in China is set up.
2003:: Jenoptik and Hilti form the Hillos joint-venture; company announces intention to be delisted from the Swiss exchange and go private.