Techtronic Industries (TTI) took a big gamble early in the pandemic that continues to pay off handsomely now.
Shares of the Hong Kong-based power tools maker soared 11.6% on Wednesday, after announcing a day earlier what it described as “extraordinary” earnings results for the first half of 2021.
TTI’s revenue rose 52% to $6.4 billion in the six months ended June. The company posted strong sales growth across all of its business units and geographic markets: North America sales rose 50.2%, Europe reported a jump of 62.3% and other regions rose 50%.
The company, which is best known for its Milwaukee and Ryobi brands of power tools and the iconic Hoover vacuum-cleaner brand, is benefitting from strong demand for home improvement projects in the U.S. In 2019, TTI derived 78% of its revenues from the U.S. market and just over 14% from Europe.
TTI’s largest client, Home Depot, recently said the current shortage of new housing in the U.S. helped to increase existing home values, which is stimulating home improvement spending.
TTI’s bottom line grew even faster than its sales in the first half. The company beat market expectations when it generated a net profit of $524 million, a 58% jump from the same period last year.
Horst Julius Pudwill, TTI’s cofounder and chairman, was featured in a Forbes Asia magazine cover story, where he and vice chairman Stephan Horst Pudwill (his son) discussed the company’s strategic adjustments for the pandemic.
They said during an interview in January that their management team made a lot of bold decisions in 2020. At a time when its competitors were furloughing people, TTI opted to invest further in its business. It built up inventory to support its customers and it also invested in R&D. And today, those moves are paying off handsomely.
The company’s stock has 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. TTI was established by the pair in 1985, and listed on the Hong Kong Stock Exchange in 1990.
Today, the company has grown to be one of the world’s largest suppliers of cordless power tools and floor care appliances. It employed more than 48,000 people worldwide at the end of last year. Although the bulk of its manufacturing is in the southern Chinese city of Dongguan, TTI has been expanding its operations in Vietnam, Mexico, Europe, and the U.S.