WarehousingIreland.ie – Jungheinrich Proved Itself Well in 2012

Jungheinrich Proved Itself Well in 2012

Apr 04, 2013 Warehousing Ireland News 0

Incoming orders, net sales and earnings increased/large-scale strategic projects largely implemented/research and development stepped up significantly/world material handling equipment market nearly stable

In 2012, Jungheinrich proved itself well in an environment marked by cyclical uncertainty, posting year-on-year gains in incoming orders, net sales and earnings. The global material handling equipment market displayed essentially stable lateral movement, with the size of Jungheinrich’s key market in Europe shrinking by 6 per cent.

The value of incoming orders encompassing all divisions—new truck business, short-term hire and used equipment as well as after-sales services—was up 3 per cent year on year to 2,251 million euros (prior year: 2,178 million euros). This growth was driven in particular by the logistics system business and the IC engine-powered truck product segment. Incoming orders in new truck business in terms of units dropped by 7 per cent to 73.2 thousand units from 78.7 thousand units in the preceding year. Production output, which tracked incoming orders with a time lag, amounted to 73.2 thousand units in 2012—down 3 per cent on the 75.7 thousand units recorded in the previous year. Production volume thus remained below the record level achieved in 2007 when 82.4 thousand forklifts were manufactured. As of December 31, 2012, the value of orders on hand from new truck business totalled 298 million euros (prior year: 305 million euros).

In the year under review, consolidated net sales were up 5 per cent to 2,229 million euros (prior year: 2,116 million euros). New truck business made a contribution, posting an increase of about 8 per cent. All regions contributed to the rise in net sales. Domestic business was up 5 per cent year on year to 598 million euros (prior year: 571 million euros). Foreign net sales posted a somewhat stronger rise, advancing by 6 per cent to 1,631 million euros (prior year: 1,545 million euros). As in the previous year, the foreign ratio was 73 per cent. The non-European share of consolidated net sales rose marginally, from 7 per cent to 8 per cent.

“Our company posted new all-time highs in terms of net sales and EBIT in a difficult market environment,” declared Hans-Georg Frey, Chairman of the Board of Management, at the annual press conference on March 26, 2013 in Hamburg. Achieving operating earnings before interest and taxes (EBIT) of 150 million euros, Jungheinrich eclipsed the record level of 146 million euros recorded in the previous year. The EBIT return on sales totalled 6.7 per cent (prior year: 6.9 per cent). The corresponding return on capital employed (ROCE) was 24.1 per cent (prior year: 26.2 per cent). Net income improved by 4 per cent to 110 million euros (prior year: 106 million euros). The record earnings posted in the preceding year were thus surpassed. Accordingly, earnings per preferred share grew to 3.27 euros (prior year: 3.13 euros).

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 June 11, 2013 that a dividend of 0.80 euros be paid per ordinary share (prior year: 0.70 euros) and a dividend of 0.86 euros be paid per preferred share (prior year: 0.76 euros).

As of December 31, 2012, the Group employed 11,261 people (prior year: 10,711) 6,094 of whom worked abroad (prior year: 5,786) and 5,167 of whom worked in Germany (prior year: 4,925). The permanent workforce thus rose by 550 staff members in the financial year that just ended, 242 of whom were active in Germany. More than 80 per cent of the increase in headcount was attributable to the sales companies—primarily abroad. The labour force at the Norderstedt location expanded by 45 employees, while the number of people working at the Moosburg site increased by 21 to 966. As of December 31, 2012, Jungheinrich had 2,411 individuals on its payroll in the Hamburg metropolitan region (prior year: 2,303 employees) of which 1,362 were working at the Norderstedt location.

The Jungheinrich Group’s research and development expenditures were increased considerably, amounting to 45 million euros in the fiscal year that just came to a close (prior year: 38 million euros). In 2012, capital expenditures on tangible and intangible assets climbed by 26 million euros, or 50 per cent, to 78 million euros (prior year: 52 million euros). Hans-Georg Frey: “Thanks to this forward-looking investing activity, we are well prepared for the growth opportunities arising in the years ahead.” Major capex projects included the new spare parts centre in Kaltenkirchen (project volume: approximately 35 million euros), the warehousing and system equipment factory in Degernpoint near Moosburg (approximately 40 million euros) and the construction of the factory in Qingpu (Shanghai, China) (approximately 18 million euros). All three investment assets are scheduled to be commissioned in 2013. In addition, capital was spent on expanding domestic production plants, focussing on the Norderstedt site. The capital spending-to-net sales ratio rose to 3.5 per cent (prior year: 2.5 per cent).

Current business situation and outlook for 2013

Jungheinrich got off to a moderate start to the new year. In the first two months, the value of incoming orders in all divisions totalled 371 million euros and was thus 2 per cent lower than the 380 million euros recorded a year earlier. At the end of February 2013, orders on hand from new truck business totalled 343 million euros and were thus 15 per cent higher than the corresponding figure on December 31, 2012 (298 million euros). At the end of February 2013, cumulative net sales amounted to 326 million euros (prior year: 335 million euros).

In view of the global economic growth forecast and the more positive estimate in respect of the Eurozone’s economic development compared to 2012, Jungheinrich expects the size of the world material handling equipment market to remain stable and there to be opportunities for marginal growth. The regional differences will continue to exist. Europe’s market volume is likely to display stable development and provide opportunities for marginal growth. Jungheinrich has also identified potential for growth in Asia, but the Chinese market is expected to recover no earlier than in the second half of this year. The North American market should also continue to expand.

“Based on an initially restrained economic development with moderate opportunities over the remaining course of the year and a stable market volume in Europe in 2013, we expect incoming orders to range between 2.1 and 2.3 billion euros and consolidated net sales to move within a similar corridor. Based on our estimate, EBIT should amount to between 140 and 150 million euros,” 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.