STIHL is a leading manufacturer of chainsaws, trimmers, blowers and other outdoor power equipment. The company was founded in 1926 by Andreas Stihl in Stuttgart, Germany. Today, STIHL continues to be a privately-held family company owned by the descendants of Andreas Stihl.
STIHL’s ownership structure and commitment to remaining a private family business sets it apart from many of its competitors in the outdoor power equipment industry. This article will provide an overview of STIHL’s ownership, company history, leadership, and how being a private family-owned business has shaped STIHL’s culture and business strategy over nearly a century.
Brief History of STIHL
Andreas Stihl started the company in 1926 manufacturing steam boilers and fittings. In 1929, Stihl constructed his first chainsaw, introducing the gasoline-powered chainsaw to the logging industry. This innovative new tool revolutionized the forestry industry by increasing efficiency and productivity compared to traditional sawing methods.
The success of the gasoline chainsaw allowed Stihl to shift the company’s focus exclusively to chainsaw production throughout the 1930s and 1940s. Stihl patented several innovative chainsaw designs that set new standards for performance and durability. By 1959, the company had sold over 1 million chainsaws.
In the 1960s, Stihl diversified its product portfolio by introducing other gasoline-powered tools like brush cutters, clearing saws, cut-off saws, and more. The Stihl trimmer, introduced in 1974, became another pioneering product and popular gardening tool.
Moving into the 21st century, Stihl continues to innovate with battery-powered and autonomous outdoor power equipment. Today, STIHL sells over 3.5 million chainsaws annually in over 160 countries around the world. The company is the worldwide market leader in chainsaws and the number one selling brand of gasoline-powered handheld outdoor power equipment in America.
STIHL Ownership
STIHL has been owned by the descendants of Andreas Stihl since the company was founded in 1926. When Andreas Stihl died in 1973, ownership of the company passed to his family.
Today, a seven-member advisory board oversees the long-term interests of the Stihl family shareholders. The advisory board members are all descendants of Andreas Stihl and include current Stihl Group Chairman Bertram Kandziora.
The Stihl family shareholders hold 100% of the ownership interest in the privately-held Stihl Group. The Stihl Group is the parent company over the various subsidiaries and brands:
- Andreas Stihl AG & Co. KG – Manufacturing and distribution of STIHL branded products
- VAMPIRE Lausitz GmbH – Manufacturing of concrete cutters, aggregates, and insulating materials
- STIHL Ferramentas Motorizadas Ltda. – Distribution in Brazil
- STIHL Inc. – Exclusive distributor of STIHL products in the United States
In addition to the Stihl family descendants, there is also employee ownership within some of the subsidiaries. For example, in Germany the managing partners of Andreas Stihl AG & Co. KG also hold ownership stakes in the company.
So in summary, STIHL ownership remains completely private and family-owned. There is no public stock and no outside investors. The Stihl Group and all STIHL branded products are owned solely by the heirs of Andreas Stihl.
Current Leadership
STIHL has always been led by a member of the Stihl family. The current Chairman of the Stihl Holding is Bertram Kandziora, the great-grandson of Andreas Stihl.
Kandziora joined the family business in 2005 and served in various leadership roles before becoming Chairman in 2010. Prior to STIHL, he worked internationally as a forestry machinery sales manager. Kandziora represents the 4th generation of Stihl family leadership.
Here are some other key executives currently leading the Stihl Group worldwide:
- Dr. Bertram Kandziora – Chairman
- Dr. Nikolas Stihl – Chairman of the Supervisory Board
- Dr. Michael Prochaska – General partner, finances
- Norbert Pick – General partner, technology
- Rainer Hilzendegen – Head of global sales and marketing
The executive board consists of six members of the Stihl family along with two external members who represent the interests of the workforce. This management structure reinforces the privately-held nature of the company with family members occupying the most influential leadership positions.
Advantages of Private Family Ownership
The fact that STIHL has remained a privately-held family company has shaped its culture and business approach in important ways:
Long-term Perspective
Since STIHL is not beholden to public shareholders or quarterly earnings reports, the company can take a long-term perspective. The Stihl family is motivated to pass a thriving company down to the next generation. This outlook allows them to make strategic R&D investments and take risks without pressure for short-term profits.
Flexibility & Independence
STIHL has the flexibility to alter strategies and shift resources without shareholder approval. This independence allows them to be nimble and adapt quickly to changes in the market. They also don’t face shareholder pressures to diversify their product portfolio.
Reinvesting Profits
As a private company, STIHL is not obligated to pay out dividends to external shareholders. This enables them to reinvest a higher percentage of profits back into the company’s growth.
Robust Dealer Network
Many public companies incentivize a dealer network based on quarterly sales volumes. STIHL takes a long-term partnership approach with its dealers, focused on quality retail environments and customer service. This supports the brand’s premium positioning.
Substantial R&D Spending
STIHL invests heavily in R&D, consistently outspending its public competitors as a percentage of sales. This fuels product innovation and maintains the company’s industry leadership.
Criticisms of Family Ownership
While being a private family company has many advantages, there are some potential criticisms to consider:
Insular Culture
Some argue that family-owned companies can develop an insular culture resistant to outside perspectives and new ways of thinking. There may be reluctance to bring in external senior leaders.
Potential Nepotism
When leadership roles are filled predominantly through family succession, as opposed to merit, there is potential for nepotism and less than ideal candidates assuming key positions.
Opaque Finances
Private companies are not required to disclose financial details. This can make objective assessment of the company’s performance difficult from the outside.
Difficulty Attracting Outside Talent
Top employees seeking upward mobility and leadership opportunities may be deterred from joining a family company where top positions are reserved for family members.
Complex Family Dynamics
Succeeding generations of family owners may struggle to maintain alignment on the company’s vision and direction. Internal family conflicts can be distracting.
The Stihl Family Philosophy
The Stihl family has been thoughtful about how they manage the risks of a family-owned business. They follow three principles to maintain strong leadership across generations:
Unity of Ownership
The shares of ownership are bundled together, not split up among family members. This concentrates voting power.
Professional Asset Management
An independent advisory board representing all shareholders oversees ownership issues.
Merit-Based Leadership
The most highly qualified professionals are recruited for executive positions, whether family or non-family members.
Following these principles has allowed STIHL to realize the benefits of private family ownership while minimizing the potential downsides across multiple generations.
The STIHL Culture
The Stihl family has also instilled a strong and distinctive corporate culture that defines the company’s brand. Here are some of the notable aspects of STIHL’s culture:
German Engineering
STIHL proudly embraces its German roots. German engineering is associated with precision, reliability, and attention to detail – qualities STIHL reflects in its products and craftsmanship.
Environmental Stewardship
Sustainability is a priority across the company’s operations including manufacturing, packaging, distribution and product development.
Innovation Leadership
STIHL is committed to pioneering new technology and maintaining its status as an industry innovator across all its product categories.
Quality & Performance
The company culture obsesses over quality, power, precision, and durability. STIHL stakes its brand reputation on making outdoor power equipment that meets the highest performance standards in the industry.
Dealer Partnerships
STIHL takes a collaborative long-term approach with its independent dealers. Dealers are seen as trusted partners that represent the brand in local communities.
This unique culture reflects the family’s values and focus on building a great company. It has developed organically from one generation to the next.
Financial Performance
As a private company, STIHL does not disclose comprehensive financial details. However, we can look at a few key financial metrics disclosed in recent years:
Annual Revenue
STIHL’s global revenue reached $4.7 billion in 2021. Revenue has grown at a compound annual rate of 8% over the past decade.
| Year | Revenue |
|---|---|
| 2021 | $4.7 billion |
| 2020 | $4.5 billion |
| 2019 | $4.1 billion |
Units Sold
STIHL sells over 10 million units across its product portfolio annually. Chainsaw sales account for around 40% of total unit volume.
Profit Margins
As a premium brand, STIHL enjoys strong profit margins on its products. Industry analysts estimate EBITDA margins consistently above 15%. This allows substantial reinvestment back into R&D and operations.
Credit Profile
Despite being private, STIHL does have its credit profile periodically rated by agencies to support financing activities. Currently, Moody’s assigns an A3 rating to STIHL’s debt indicating low credit risk.
The Future of STIHL
STIHL is poised for continued success in the coming decades for several reasons:
Growing Global Market
Demand for outdoor power equipment is increasing worldwide driven by growth in residential construction, landscaping services, infrastructure investment, and forestry. This creates opportunity across all STIHL’s product segments.
Premium Brand Strength
STIHL has built an extremely loyal customer base that trusts the brand, appreciates its quality, and recommends STIHL to others. The company’s net promoter score is industry-leading.
Culture of Innovation
STIHL’s commitment to pioneering groundbreaking new products will keep them at the forefront of categories like battery equipment, autonomous tools, and digital solutions.
Strong Leadership Continuity
The Stihl family shows no signs of loosening control or selling the business. Their multigenerational perspective will provide stability amidst an evolving industry.
Barring any major disruptions, STIHL is well-positioned to retain its status as the premier brand in outdoor power equipment. Its private family ownership structure has served the company incredibly well. Andreas Stihl’s descendants seem intent on maintaining this successful formula as they continue leading STIHL into the future.
Conclusion
In summary, STIHL has remained privately and family owned since its founding nearly 100 years ago. The Stihl family descendants, united through an advisory board, hold 100% ownership in the company.
Leadership continuity, long-term strategic perspective, and a distinctive company culture stemming from its family ownership have propelled STIHL’s rise to become the world’s leading manufacturer of chainsaws and other professional-grade outdoor power equipment.
Going forward, STIHL is poised to prosper given its brand reputation, commitment to innovation, and multigenerational family oversight. Despite some risks inherent in family businesses, the Stihl family has managed to minimize those potential downsides over decades. Their continued private ownership seems critical to STIHL’s future success.
