Hamburg—Jungheinrich AG maintained its course for growth in the 2008 financial year although the world economy began cooling considerably in the fourth quarter. The company ended 2008 with record net sales and the second-best earnings in its corporate history. Jungheinrich expects a significant reduction in market and business volume in 2009.

In the 2008 reporting year, Group net sales climbed again, to 2,145 million euros, exceeding the previous year’s level (2,001 million euros) by more than 7 per cent. Domestic business posted year-on-year growth of 10 per cent, while foreign sales advanced less, growing by 6 per cent. As a result, the foreign ratio dropped by one percentage point to 74 per cent. All the divisions contributed to the uptick in net sales. The largest increase was contributed by new truck business, which posted a rise of 9 per cent, followed by the used and short-term hire equipment business, achieving 7 per cent growth. Posting a gain of 8 per cent, short-term hire activities made a somewhat stronger contribution to the rise in net sales. The after-sales services business was up 4 per cent.

The value of incoming orders, including all divisions, climbed by 1 per cent to 2,145 million euros (prior year: 2,120 million euros). By December 31, 2008, the value of orders on hand from new truck business had declined to 242 million euros (prior year: 334 million euros).

“Despite the difficult business environment in the second half of 2008, Jungheinrich managed to close the fiscal year with its second-highest earnings after the record level achieved in 2007,” declared Hans-Georg Frey, Chairman of the Board of Management, at the annual press conference in Hamburg on April 8, 2009. Earnings before interest and taxes (EBIT) were down 13 per cent to 122 million euros compared with the previous year (140 million euros). The corresponding EBIT return on sales declined to 5.7 per cent (prior year: 7.0 per cent). At 19.1 per cent, the EBIT return on capital employed (ROCE) was lower than the 24.1 per cent recorded a year earlier. Income after taxes (net income) amounted to 77 million euros, achieving a high level (prior year: 82 million euros). In consequence, earnings per share totalled 2.26 euros (prior year: 2.40 euros).

As in the preceding years, Jungheinrich invested heavily in research and development, thus strengthening the company’s innovative power. Capital expenditures remained high, at 39 million euros (prior year: 41 million euros). Hans-Georg Frey commented: “We work hard to create new products and services even in times of crisis, in order to win customers in the future.”

The Board of Management and the Supervisory Board will propose to the Annual General Meeting on June 9, 2009 that a marginally lower dividend of 0.49 euros per ordinary share (prior year: 0.52 euros) and of 0.55 euros per preferred share (prior year: 0.58 euros) be paid. The company is thus adhering to the principle of dividend continuity.

The Jungheinrich Group further enlarged its labour force in the 2008 financial year, focussing on sales and after-sales services: As of December 31, 2008, the Group employed 10,784 people (prior year: 10,178), 5,834 of whom worked abroad (54 per cent).

Current business situation and outlook for 2009

After the global market for material handling equipment expanded in the first three quarters of 2008, it declined by about 40 per cent in the fourth quarter—a trend that continued in the first two months of this year. The market was cut in half compared to the very large volume it had in the preceding year.  The trend displayed by the material handling equipment sector is thus in line with the development of the mechanical engineering industry as a whole, which strongly depends on exports and is declining by between 30 and 50 per cent, depending on the branch of industry.

Jungheinrich was unable to decouple itself from this development, but succeeded in strengthening its position on the market. In the first two months of 2009, the value of incoming orders was down some 31 per cent to 254 million euros compared with the year-earlier level (prior year: 368 million euros). By the end of February, net sales amounted to an accumulated 249 million euros, which was 19 per cent less than the 306 million euros recorded by the same time in 2008.

“We prepared ourselves for the difficult environment in our sector and the economy as a whole early on and put together a comprehensive crisis-management package of measures,” explained Hans-Georg Frey. For instance, construction work on the new warehousing and system truck manufacturing plant in Degernpoint near Moosburg (Bavaria) has been postponed for the time being, and production across all factories, which always reflects orders, was rapidly adapted to the decline in demand. Work time account balances and the temporary workforce (about 240 staff) were decreased, and temporary employment contracts (about 80) were not extended. Short-time work was introduced for a total of 2,000 employees at the Norderstedt and Moosburg plants on March 1, 2009, and preparations were made for this at corporate headquarters. Several extensive and incisive cost and structural projects were initiated, which will deliver the first positive results in 2009 and have an even stronger impact in 2010.

The Jungheinrich Group’s Board of Management and executives (about 200) are demonstrating their solidarity with those of their colleagues who are affected by the introduction of short-time work. As proof of their solidarity, the Board of Management and executives decided to accept a voluntary cut in pay.

“In view of the uncertain economic conditions and the major imponderables associated with it, it is very difficult to forecast the future development of business. This is because the duration and intensity of the worldwide recession are also uncertain. Thanks to all our efforts, however, we will master this difficult year as well,” says Hans-Georg Frey, Chairman of the Board of Management. Jungheinrich is braced for a significant reduction in market and business volume in 2009. At present, demand is not anticipated to be revitalized before the second half of 2010. The company expects incoming orders and net sales to be in the order of 1.7 billion euros. Comprehensive measures taken to adapt cost structures to the decline in demand include incisive structural projects. Redundancies in certain Group units especially hard hit by the crisis will be unavoidable.

The extent of the expected earnings decrease in 2009 will depend on the global economic trend in the next few months as well as the scope of structural measures to be taken and the ensuing one-off costs. The company currently anticipates at least being able to avoid posting negative earnings for the fiscal year.  

Despite these difficult times, Jungheinrich has a robust financial basis, is economically healthy and has a motivated team, outstanding products as well as a reliable shareholder structure, making the company well equipped for the future. 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.

About Jungheinrich

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.