Net sales up in the third quarter of 2008/

Demand for material handling equipment declining

Hamburg—In the third quarter of 2008, the Jungheinrich Group proved itself despite a difficult market environment, substantially increasing net sales year on year once again. The company expects to achieve incoming orders of about 2.2 billion euros and consolidated net sales of more than 2.1 billion euros for fiscal 2008.

Global demand for material handling equipment in the third quarter of 2008 declined by 4 per cent due to the worldwide economic downturn compared to the same period last year. The period from January to September saw the sales volume climb three per cent to 713.9 thousand trucks (prior year: 695.9 thousand units). Asia again accounted for an above-average share, or 12 per cent, of this enlargement. Posting a gain of 13 per cent, China confirmed its role as growth engine in this region. In contrast, Europe recorded a decline of just under 1 per cent. While Eastern Europe continued to expand quickly with a rate of increase of 16 per cent, the Western European market continued its downward trend, shrinking by 3 per cent. North America displayed persistently weak development, down 9 per cent.

In the third quarter of 2008, the value of incoming orders rose marginally to 531 million euros (prior year: 527 million euros). The cumulative value of incoming orders was up more than 5 per cent to 1,651 million euros (prior year: 1,568 million euros). Orders on hand in new truck business, which has a high proportion of logistic systems orders with a large share of third-party products, amounted to 361 million euros as of September 30, 2008—down 6 per cent on the 384 million euros achieved a year earlier. This represents a gain of eight per cent compared with the level achieved by the end of 2007.

Net sales in the third quarter of 2008 climbed by 12 per cent to 538 million euros (prior year: 480 million euros). Cumulative net sales after nine months were up about 10 per cent to 1,576 million euros (prior year: 1,435 million euros). The largest contributions came from new truck business as well as short-term hire and used equipment operations, each responsible for some 12 per cent. After-sales services, which benefit from the steady rise in market penetration, posted another increase of five per cent. The foreign ratio was 74 per cent.

In the third quarter, earnings before interest and taxes (EBIT) amounted to 29.7 million euros (prior year: 33.0 million euros). The corresponding return on sales declined to 5.5 per cent (prior year: 6.9 per cent). After the first nine months, EBIT had risen to 93.2 million euros (prior year: 95.2 million euros). The corresponding return on sales decreased to 5.9 per cent (prior year: 6.6 per cent).

In the third quarter, earnings after taxes rose by a disproportionately high 17 per cent to 19.6 million euros (prior year: 16.7 million euros) owing to the lower tax rate. The company closed the first nine months of the year with 60.9 million euros in net income (prior year: 52 million euros). Earnings per share grew to 1.79 euros (prior year: 1.53 euros).

In light of the intensification of the financial crisis, which will impose a huge burden on the economy as a whole, Jungheinrich anticipates that Europe’s material handling equipment market will experience a downward trend in the fourth quarter of 2008 and in the 2009 financial year. The company has prepared itself for this, reacting, e.g., by prolonging the construction period for the new warehousing and system equipment manufacturing plant in Degernpoint near Moosburg (Bavaria) for a limited time. Nevertheless, Jungheinrich anticipates that the market volume will continue to expand worldwide over the long term, going hand in hand with a rise in incoming orders for the company. “We are convinced that our capital expenditures on the sales organization and the expansion of production capacity in Landsberg and Degernpoint will strengthen our competitive position lastingly. The Landsberg site will take up production in the middle of 2009,” says Hans-Georg Frey, Chairman of the Board of Management.

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