-Only Slightly Negative Earnings in Q1

Hamburg—In the first quarter of 2009, the collapse in worldwide demand for material handling equipment cut the global market volume in half to 121 thousand forklift trucks (prior year: 240 thousand units). Nevertheless, the Jungheinrich Group stood its ground in this difficult market environment and expanded its worldwide market position. A package of measures put together early on to manage the crisis and improve earnings showed its first positive effects: The company managed to avoid a higher loss in the first quarter.

The massive contraction of the market and drop in demand are reflected in the Jungheinrich Group’s business trend for the first three months of 2009. The value of incoming orders, including all business areas, decreased by 27 per cent to 405 million euros (prior year: 553 million euros). In the first quarter of 2009, net sales fell by some 16 per cent to 413 million euros (prior year: 491 million euros). New truck business was hit the hardest, recording a drop of 27 per cent, followed by short-term hire and used equipment activities, which experienced a decline of 4 per cent. The used equipment business posted a marginal gain. After-sales services were stable, down 2 per cent.

Earnings before interest and taxes (EBIT) dropped to minus 2.8 million euros in the first quarter of 2009 (prior year: plus 29.6 million euros). The corresponding return on sales fell to minus 0.7 per cent (prior year: plus 6.0 per cent). The tax expense was low, and net income (loss) amounted to minus 3.6 million euros (prior year: plus 18.1 million euros). “Measures initiated in 2008 to adapt production to lower demand started having a positive impact especially in the last month of the reporting period. Thanks to this and the stable after-sales services business, we managed to prevent a higher loss,” explained Hans-Georg Frey, Chairman of the Board of Management.

The permanent workforce decreased by 135 employees in the first quarter of 2009. This affected all business areas. As of March 31, 2009, the headcount was at 10,649 (12/31/2008: 10,784).

In view of this negative economic scenario, the prospects for 2009 remain gloomy. Jungheinrich is braced for a significant reduction in market and business volume this year. Keeping the uncertainty of market estimates in mind, the worldwide market for material handling equipment will at least decline by about 30 per cent to roughly 600 thousand trucks (prior year: 872 thousand units). At present, demand is not anticipated to be revitalized before the second half of 2010. Nevertheless, the company is convinced that it is well equipped to prevail in a difficult market environment. Among the reasons for this are the company’s robust financing and measures initiated to adapt production to the reduction in demand as well as intensified inventory and cost management. Incisive structural projects are also among the measures that have already been defined. “In principle, our objective remains to survive this crisis together with our employees and to safeguard jobs as much as possible,” says Hans-Georg Frey. As mentioned at the annual press conference in April, however, redundancies in certain Group units especially hard hit by the crisis will be unavoidable. It is currently impossible to make a statement on the number of jobs affected. Intense negotiations are presently being conducted with employee representatives.

The company confirms its forecast for incoming orders and net sales in the order of about 1.7 billion euros each (prior year: 2.1 billion euros). 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. At present, the company is working hard to avoid a negative operating result. “Thanks to these numerous efforts, the company is confident that it is well equipped to emerge stronger from the worldwide economic crisis,” says Hans-Georg Frey.

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.