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Jungheinrich: Strong growth – forecast fully met

Jungheinrich: Strong growth – forecast fully met

The Jungheinrich Group closed the 2016 financial year successfully, posting significant increases in all key performance indicators. The main growth drivers were new truck business and the ‘Logistics Systems’ Division. New record highs were achieved in terms of incoming orders, net sales, production and all earnings figures. The key performance indicators were improved considerably in the first two months of the year underway as well.

Hans-Georg Frey, Chairman of the Board of Management of Jungheinrich AG: “We stayed our strong course for growth in 2016. For the first time, we surpassed the €3 billion mark in terms of both net sales and incoming orders. We outgrew our peer group and expanded our share of the global market. Jungheinrich is right on track towards achieving its strategic goal for 2020. In 2016, the Group’s earnings were boosted to €154 million. Jungheinrich has steadily increased its earnings for the benefit of its shareholders in recent years.

The good level of incoming orders by the end of last year has been maintained this year and gives us a positive outlook on the first six months underway. Based on the good figures posted in the first two months of the current year, if the developments witnessed in 2017 thus far continue, we should be able to achieve incoming orders of between €3.4 and €3.5 billion and consolidated net sales in the range of €3.3 to €3.4 billion. Based on our assessments, EBIT for the current fiscal year should total between €250 and €260 million.”

Growth strategy implemented with resolve

The Jungheinrich Group continued to pursue its growth strategy with resolve in the financial year that just ended. The success of this strategy is reflected in the double-digit growth of incoming orders, net sales and EBIT. Furthermore, the company increased its share of the market the world over.

Adding to its good operating performance, the Jungheinrich Group made strategic progress in the reporting year as well. Net sales recorded by the ‘Logistics Systems’ Division advanced by 16% to €441 million. Slightly more than half of this growth resulted from the fact that MIAS, a specialist in stacker cranes and load handling technology, was included on a full-year basis for the first time. Moreover, by acquiring the dealership business in Chile, we enlarged our global direct sales footprint. A joint venture for forklift truck rentals on the Chinese market was established with Anhui Heli Co. Ltd., China’s largest material handling equipment manufacturer, in order to expand the short-term hire business.

Market

In 2016, the world material handling equipment market displayed positive development, growing by 7%. The driving force was the European market, which expanded by 13%. Following its severe collapse in the last few years, Russia returned to a course for growth (+37%). The Asian market recorded a commendable gain of 7%, with demand in China advancing by as much as 14%. The difference in growth rates was primarily caused by the disparate development of demand for IC engine-powered counterbalanced trucks. North America’s market volume was up 2% on the year-earlier level.

Incoming orders and orders on hand

Unit-based incoming orders in new truck business, including orders for both new forklifts and trucks for short-term hire, amounted to 109 thousand forklifts—up 12% on the year-earlier figure (97 thousand trucks) and clearly outperformed the world market. On the strength of this accomplishment, Jungheinrich grew its share of the global market to 9.1% (prior year: 8.7%). At €3,220 million, the value of the Jungheinrich Group’s incoming orders, encompassing all business fields, was 14% higher than the previous year’s figure (€2,817 million). As of December 31, 2016, orders on hand from new truck business amounted to €610 million (prior year: €477 million). The order range was thus four months.

Production

Totalling 106 thousand forklifts, production in terms of units surpassed the 91 thousand achieved a year before by 16%. Production thus exceeded 100 thousand units for the first time.

Net sales

In the 2016 financial year, net sales climbed by 12% to €3,085 million (prior year: €2,754 million). All business areas contributed to the uptick in net sales. New truck business in particular displayed disproportionately strong growth, posting a gain of 15% from €1,539 million in the preceding year to €1,763 million in the year under review. Net sales in Germany jumped by 7% to €753 million (prior year: €701 million). Foreign net sales climbed by 14% to €2,332 million (prior year: €2,053 million). The foreign ratio thus rose to 76% (prior year: 75%). The portion of consolidated net sales accounted for by countries outside Europe increased to 13% (prior year: 11%).

Earnings

Due to the large number of units manufactured and the sustained positive development displayed by all business areas, earnings before interest and taxes (EBIT) rose by 10% to €235 million (prior year: €213 million). They reflected a positive one-off effect of €4.7 million resulting from the deconsolidation of UK-based Boss Manufacturing Ltd., UK, in the second quarter of 2016. The EBIT return on sales (EBIT ROS) was 7.6% (prior year: 7.7%). At €216 million, earnings before taxes (EBT) were 9% higher than in the previous year (€198 million). The EBT return on sales (EBT ROS) was 7.0% (prior year: 7.2%).

Dividend

The Board of Management and the Supervisory Board of Jungheinrich AG are taking this development into account and will propose to the Annual General Meeting on May 16, 2017 that a dividend of €0.42 euros be paid per ordinary share (prior year: €0.38/retroactively adjusted due to the stock split implemented on June 22, 2016) and a dividend of €0.44 be paid per preferred share (prior year: €0.40/retroactively adjusted due to the stock split implemented on June 22, 2016). This corresponds to an increase of the divided per preferred share of 10%.

Research and development

In 2016, Jungheinrich made further inroads in research and development activities designed to enhance its technological expertise and set itself apart from the competition. Expenditures on research and development including work performed by third parties hit yet another record high, totalling €62 million (prior year: €55 million).

Employees

A record-high 15,010 staff members were on the payroll as of December 31, 2016 (prior year: 13,962 employees) of which 8,499 employees worked outside Germany (prior year: 7,884 employees) and 6,511 employees were active in Germany (prior year: 6,078 employees). A total of 186 employees were added as companies were acquired and established.

As of December 31, 2016, Jungheinrich had a labour force of 2,962 people in the Hamburg metropolitan region (prior year: 2,709 employees) of which 1,293 were working at the Norderstedt location (prior year: 1,224). Personnel figures at the Moosburg site (including the Degernpoint plant) rose to 1,286 (prior year: 1,164 employees).

January to February 2017 and assessment of the market in 2017

Jungheinrich expects the world material handling equipment market to continue growing in 2017, albeit losing some momentum over last year. European market volume should increase. We anticipate a rise of a mid-range, single-digit percentage and thus less momentum than in 2016 here as well. Asia may well post robust market growth. The good demand for electric material handling equipment should persist on the North American market. The shrinkage of the region’s IC engine-powered counterbalanced truck market may be cushioned if the economy posts a respectable performance.

By the end of February 2017, the global material handling equipment market encompassed 205.6 thousand trucks—significantly up on last year’s corresponding figure (167.1 thousand forklifts). During the same period, Europe’s market volume, Jungheinrich’s main sales market, expanded by 11% to 72.3 thousand forklifts (prior year: 65.0 thousand trucks).

Jungheinrich displayed very positive development and maintained its course for growth in this environment. In the first two months of the new financial year, the value of incoming orders in all business areas totalled €550 million—up 17% on the €469 million recorded in the same period last year. During the same period, incoming orders in terms of units rose by 17% to 19.6 thousand trucks (prior year: 16.8 thousand forklifts). Totalling €682 million, orders on hand from new truck business as of the end of February 2017 surpassed the €610 million achieved as of December 31, 2016 by 12%. In the first two months of 2017, the Jungheinrich Group’s net sales amounted to €483 million (prior year: €432 million) exceeding last year’s corresponding figure by 12%. In the same period, production output advanced by 21% to 18.2 thousand trucks (prior year: 15.1 thousand forklifts).

More about the company

Source: Jungheinrich

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