Jungheinrich Still on Course for Profitable Growth

Marked increases in incoming orders, net sales and earnings/substantial capital expenditures on a spare parts centre and two new plants/material handling equipment market posts dynamic growth worldwide

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Hamburg—In 2011, Jungheinrich AG stayed its course for profitable growth and closed the financial year with significant rises in incoming orders, net sales and earnings. Buoyed by the stable conditions underlying the global economy, the intralogistics sector saw the world market for material handling equipment expand by 23 per cent, with growth in Europe—Jungheinrich’s core market—amounting to 24 per cent.

Throughout the Group, incoming orders from new truck business based on units rose 21 per cent to 78.7 thousand trucks (prior year: 64.9 thousand units). The value of incoming orders including all business areas was up 13 per cent year on year to 2,178 million euros (prior year: 1,924 million euros). Production output in 2011, which tracked the marked increase in incoming orders with a time lag, advanced by 25 per cent to 75.7 thousand forklifts (prior year: 60.4 thousand units). In sum, however, the Jungheinrich Group’s production output was still 9 per cent below the record level achieved in 2007. Orders on hand in new truck business rose substantially over the course of the year, climbing to 329 million euros as of December 31, 2011 (prior year: 281 million euros).

In the 2011 reporting year, consolidated net sales were up nearly 17 per cent to 2,116 million euros (prior year: 1,816 million euros). New truck business contributed to this, posting an increase of about 24 per cent. All regions participated in the growth in net sales. Compared to the previous year, domestic business was up 16 per cent to 571 million euros (prior year: 493 million euros). Foreign net sales advanced slightly more, rising by 17 per cent to 1,545 million euros (prior year: 1,323 million euros). As in the preceding year, the foreign ratio was 73 per cent. The proportion of Group net sales accounted for by non-European net sales totalled 7 per cent, equalling the year-earlier level.

“Our company has returned to its traditional sales and earnings strength and closed the 2011 financial year with a record result,” said Hans-Georg Frey, Chairman of the Board of Management, taking stock at the annual press conference on March 29, 2012 in Hamburg. In the period being reviewed, the company generated operating earnings before interest and taxes (EBIT) of 146 million euros (prior year: 98 million euros). This corresponds to an advance of 49 per cent. The EBIT return on sales recorded a strong gain, climbing to 6.9 per cent (prior year: 5.4 per cent) and was thus only marginally lower than the all-time high of 7.0 per cent achieved in 2007. The corresponding return on capital employed (ROCE) rose to 26.2 per cent (prior year: 22.7 per cent), also posting a significant increase. Net income improved by 24 million euros to 106 million euros (prior year: 82 million euros), clearly surpassing the record figure achieved so far, which was posted in the preceding year. On this basis, earnings per preferred share amounted to 3.13 euros (prior year: 2.45 euros).

The Board of Management and the Supervisory Board of Jungheinrich AG are taking account of this development and will propose to the Annual General Meeting on June 12, 2012 that a dividend of 0.70 euros be paid per ordinary share (prior year: 0.49 euros) and a dividend of 0.76 euros be paid per preferred share (prior year: 0.55 euros).

By December 31, 2011, a total of 10,711 people were working throughout the Group (prior year: 10,138), of which 5,786 were active abroad (prior year: 5,477) and 4,925 worked in Germany (prior year: 4,661). In the financial year that just came to a close, the labour force thus expanded by 573 staff members, 264 of whom were in Germany. The lion’s share of the workforce expansion was accounted for by the sales companies. Developments at the Moosburg and Norderstedt plants were virtually stable. Jungheinrich currently employs approximately 2,230 individuals in the Hamburg metropolitan area, 1,300 of whom work at the Norderstedt site.

At 38 million euros (prior year: 36 million euros), expenditures by the Jungheinrich Group on research and development in the fiscal year that just ended remained high. Lithium-ion batteries, which have been explored as a potential energy storage of the future, were used in a mass-manufactured product—a low platform truck—for the first time in the year being reviewed. Capital expenditures on tangible and intangible assets rose in 2011 by 19 million euros to 52 million euros (prior year: 33 million euros). Hans-Georg Frey: “This increase reflects our company's investing activity, which is oriented towards growth and shaping the future." This includes the two large-scale capital expenditures initiated in 2011: the construction of a new spare parts centre in Kaltenkirchen (budget: some 35 million euros) and the erection of the factory in Qingpu (Shanghai), China (about 15 million euros), which will ensure an even better supply of products designed to meet the needs of the Asian market—a major sales region. The construction of a new warehousing and system equipment plant in the vicinity of the current production site in Moosburg (Bavaria) with a budget of approximately 40 million euros resolved in early 2012 is fully in line with this year’s motto: ‘Investing in the Future.’ All three of the investment objects are scheduled to be commissioned in 2013.

Current business situation and outlook for 2012

Jungheinrich got off to a good start to the new year: The value of incoming orders across all business areas rose by 14 per cent in the first two months of 2012 to 380 million euros compared to the year-earlier period (prior year: 333 million euros). Orders on hand in new truck business were up 13 per cent to 371 million euros during the same period of time. By the end of February 2012, net sales amounted to an accumulated 328 million euros, which was 18 per cent more than the 279 million euros recorded by the same time in the previous year.

Despite the considerable deterioration of the economic environment—especially in Europe—the prospects for the material handling equipment industry should be generally stable, moving laterally and harbouring slight opportunities for growth, albeit with regional differences, which may be significant in some cases. Therefore, the market should lose considerable momentum following the strong growth achieved last year. Now, Jungheinrich thus only expects the world material handling equipment market to expand by less than 5 per cent in terms of units to some 1 million units. Market growth is likely to take place above all in Asia, Latin America and the USA.

“Based on the market’s anticipated growth and in line with the development of business in the first few weeks of the current year, we expect incoming orders to at least range between 2.0 and 2.1 billion euros, with consolidated net sales displaying corresponding movement. The sales trend should benefit from the high level of orders on hand at the beginning of the year and from potential opportunities for growth above and beyond that. It still cannot be ruled out that the market may shrink significantly contrary to this assessment, primarily owing to the sovereign debt crisis in Europe. In such an event, given that our company is positioned as a full-line supplier and intralogistics service provider with a large proportion of business accounted for by services, it is well equipped for proving itself successfully even against the backdrop of a negative market scenario, as its structures in administration, sales and production are more effective and flexible today," says Hans-Georg Frey.  

Jungheinrich ranks among the world’s leading companies in the material handling equipment, warehousing and material flow engineering sectors. The company is an intralogistics service and solution provider with manufacturing operations, which offers its customers a comprehensive range of forklift trucks, shelving systems, services and advice. Jungheinrich shares are traded on all German stock exchanges.