Growth continues at Jungheinrich
2019/03/19 2:15 PM

Growth continues at Jungheinrich

  • Incoming orders: €3.97 billion, revenue: €3.80 billion, EBIT: €275 million
  • More than 121,000 trucks produced, 10% with lithium-ion technology 
  • Revenue forecast for 2019: €3.85 billion to €4.05 billion
  • Dividend continuity: proposal of €0.50 per preferred share

Hamburg, Germany. Jungheinrich has continued its strong growth, again achieving its forecast targets, despite geopolitical and economic challenges. Last year the company made significant strides towards achieving its strategic growth target of €4 billion in revenue in financial year 2020, with revenue of €3.80 billion and incoming orders of €3.97 billion. EBIT climbed by €16 million to €275 million and the EBIT return on sales (EBIT ROS) came to 7.2 per cent. New truck business in its European core market in particular as well as Asia, and also logistics systems solutions, are driving this positive performance.

Hans-Georg Frey, Chairman of the Board of Management of Jungheinrich AG:

“We are keeping our promise. 2018 saw Jungheinrich grow significantly for the ninth year in succession. Our strategy is working!

This is the result of our innovative products and solutions, as well as our strategic positioning. In 2018, for instance, we presented the world’s first reach truck with a built-in lithium-ion battery and the most powerful small parts stacker crane in its class. We are also building on our energy expertise; almost all our trucks sold in 2018 are battery-powered.

We will continue on this path during the current financial year. Our substantial orders on hand form a good basis for this. We can report a positive performance for the first two months of 2019: incoming orders by value increased by 14 per cent year-on-year (from €584 million to €663 million), incoming orders by units were up by 4 per cent (from 20,700 to 21,500) and revenue by 9 per cent (from €562 million to €613 million). We are therefore cautiously optimistic about 2019, even though we expect the pace of market growth to slow. For the current financial year, we expect to see incoming orders reach €4.05 billion to €4.20 billion, and to generate revenue of between €3.85 billion and €4.05 billion. We estimate that EBIT will be between €275 million and €295 million. This means that we are already within reach of achieving the growth objective of our 2020 strategy.”

The Annual Report 2018 and further information can be found at www.jungheinrich.com.

2018: The Jungheinrich Group at a Glance



FY 2018

FY 2017

Change
(%)

Incoming orders (units)

131,000

123,500

6.1

Incoming orders (million €)

3,971

3,560

11.5

Production (units)

121,000

120,100

0.8

Revenue (million €)

3,796

3,435

10.5

EBIT (million €)

275

259

6.2

EBIT ROS (%)

7.2

7.5

---

EBT (million €)

249

243

2.5

EBT ROS (%)

6.6

7.1

---

Profit or loss (million €)

176

182

–3.3

Number of employees (FTE, 31/12)

17,877

16,248

10.0


Market

In 2018, the global market for material handling equipment again recorded very strong year-on-year growth of 10 per cent, or 143 thousand units. Around 40 per cent of this figure was attributable to an increase in orders from the Chinese market, another 38 per cent was attributable to the marked increase in demand from Europe. Both in China and Europe, the sharp increase in orders for warehousing equipment had the most decisive impact on market developments. Just over half of the 4 per cent rise in market volume in North America was due to higher demand for IC engine-powered forklift trucks. Demand in Europe, Jungheinrich’s core market, rose by 11 per cent, with Western Europe up by 10 per cent and Eastern Europe up by 19 per cent.

Incoming orders and orders on hand

At 131 thousand units, incoming orders in the new truck business, based on units, which includes orders for both new forklifts and trucks for shortterm rental, exceeded the previous year’s figure (123 thousand units) by 6 per cent. This was the result of the sharp rise in demand in Europe. At €3,971 million, the value of incoming orders, which covers the new truck business, short-term rental, used equipment and after-sales services business fields, exceeded the previous year’s figure (€3,560 million) by 12 per cent, or €411 million. More than 20 per cent of this was down to increased demand for logistics systems solutions. Orders on hand in the new truck business amounted to €907 million as of 31 December 2018 (previous year: €692 million). These orders account for almost five months of production. A large amount of the orders on hand are attributable to the “Logistics Systems” division.

Production

The production volume follows developments in incoming orders, with a delay. At 121 thousand units, the production volume in the reporting year was up slightly against the very positive prior-year figure (120 thousand units). With a share of 78 per cent of the total production volume, the largest product segment is warehousing equipment. Virtually all trucks produced (97 per cent) are battery-powered. Particularly noteworthy was the 12 per cent increase in the production of battery-powered counterbalanced trucks to more than 22 thousand units.

Revenue

Group revenue exceeded the previous year’s figure (€3,435 million) by 11 per cent, or €361 million, and hit an all-time high at €3,796 million. 87 per cent of revenue was attributable to Europe (previous year: 88 per cent). Revenue growth in Europe was primarily driven by growth in Germany, Italy, Poland, Austria and the Czech Republic. Foreign revenue increased by 12 per cent to €2,896 million (previous year: €2,584 million); correspondingly, the foreign ratio amounted to 76 per cent (previous year: 75 per cent). Revenue generated outside of Europe amounted to €500 million (previous year: €415 million). This corresponds to a 20 per cent increase and a Group revenue share of 13 per cent (previous year: 12 per cent).

Earnings

EBIT increased by €16 million, or 6 per cent, to €275 million (previous year: €259 million). At 7.2 per cent, EBIT return on sales did not quite reach the level recorded in the previous year (7.5 per cent). EBT was up just 2 per cent against the previous year at €249 million (previous year: €243 million). EBT return on sales amounted to 6.6 per cent (previous year: 7.1 per cent). Profit or loss thus decreased by €6 million, or 3 per cent, to €176 million (previous year: €182 million), and the earnings per preferred share accordingly came to €1.73 (previous year: € 1.80).

Dividend

Although profit or loss was slightly down against the previous year, the Board of Management of Jungheinrich AG will propose a dividend consistent with that of the previous year of €0.48 (previous year: €0.48) per ordinary share and €0.50 (previous year: €0.50) per preferred share. This dividend proposal will result in a total payout of €50 million, as in the previous year, and a payout ratio of 28 per cent. Jungheinrich follows a policy of consistent dividend payouts. The target is to pay out between 25 per cent and 30 per cent of the profit or loss to shareholders.

Research and development

R&D expenditure – including the commission of third-party services – has risen again against the previous year at €84 million (previous year: €77 million). This equates to 5.6 per cent (previous year: 5.3 per cent) of the R&D-relevant revenue from new trucks.

Employees

In the year under review, Jungheinrich once again increased its personnel capacities, with the primary focus on European sales. As of 31 December 2018, the Group had 17,877 (previous year: 16,248) employees. This equates to an increase of 10 per cent, or 1,629 employees. In Europe, the sales companies in France, Germany, Spain, Italy and Poland recorded the largest number of new employees. In Eastern Europe, 49 employees joined the Group as part of an acquisition in Serbia. Outside of Europe, employee numbers in sales in South America climbed by 257 people, particularly due to the acquisition of Grupo Agencia Alemana, which has companies in Colombia, Peru and Ecuador. As of 31 December 2018 Jungheinrich had a labour force of 3,429 people in the Hamburg metropolitan region, thereof 1,331 people in Hamburg.

Assessment of the market and forecast for 2019

Taking the lower growth forecasts – both global and for individual regions – into consideration against the previous year, we anticipate that the global market for material handling equipment will also see slower growth in 2019, and will possibly even decline slightly compared to 2018. We therefore expect growth in the low-to mid single-digit percent rage at best. Growth in Asia could reach the mid single-digit percent range. For our core market Europe, we anticipate market growth in the low-tomid single-digit percent range. The possibility of a slight decrease compared to 2018 cannot be eliminated, however. We also expect developments in the individual markets and product segments to vary considerably.

Taking into account the economic and sector forecast described above, Jungheinrich anticipates incoming orders worth between €4.05 billion and €4.20 billion in 2019 (2018: €3.97 billion). Group revenue is expected to range between €3.85 billion and €4.05 billion (2018: €3.80 billion).

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