Jungheinrich achieved a decent EBIT of 172 million euros in light of the decline in economic output in the Eurozone. The company posted record incoming orders of 2,357 million euros and recorded another marginal rise in consolidated net sales, increasing them to 2,290 million euros. The world material handling equipment market grew by 7 per cent, whereas market volume in Jungheinrich’s core markets in Western Europe stagnated. Jungheinrich’s business displayed positive development in the first two months of 2014.
The value of incoming orders encompassing all business fields—new truck business, short-term hire and used equipment as well as after-sales services—was up 5 per cent year on year to 2,357 million euros (prior year: 2,251 million euros). This growth was mainly driven by the strong level of incoming orders in new truck business—especially in the fourth quarter of 2013.Incoming orders in new truck business in terms of units advanced by 7 per cent to 78.2 thousand units from 73.2 thousand units in the preceding year. Production output, which tracked incoming orders with a time lag, amounted to 72.5 thousand units in 2013—down 3 per cent on the 73.2 thousand units recorded in the previous year. As of December 31, 2013, orders on hand from new truck business totalled 366 million euros and were thus markedly higher than the 298 million euros achieved a year earlier.
In 2013, the world material handling equipment market surpassed the million unit mark for the first time, expanding by 7 per cent to 1.01 million units, driven by strong growth in Asia and the Americas. Europe, Jungheinrich’s main sales market, posted a gain of 2 per cent, growing to 315,500 units, with demand in Western Europe stagnating and market volume in Eastern Europe rising by 8 per cent.
Jungheinrich adjusted the comparable figures for fiscal 2012 due to changes in accounting policies and accounting treatment for increased transparency in reporting from January 1, 2013 onwards. On a like-for-like basis, consolidated net sales in the year being reviewed were up 1 per cent to 2,290 million euros (prior year: 2,270 million euros). Domestic net sales climbed by 1 per cent to 613 million euros (prior year: 607 million euros) although the German market for material handling equipment shrank by 4 per cent. Foreign net sales also advanced by 1 per cent, to 1,677 million euros (prior year: 1,663 million euros). As in the previous year, the foreign ratio was 73 per cent. The portion of consolidated net sales accounted for by countries outside Europe remained at 8 per cent.
“In light of the persistently difficult environment in our core markets, our company achieved a record high in incoming orders and decent figures for both net sales and EBIT,” declared Hans-Georg Frey, Chairman of the Board of Management, at the annual press conference on March 26, 2014 in Hamburg. Achieving operating earnings before interest and taxes (EBIT) of 172 million euros, Jungheinrich fell just shy of the record level of 177 million euros recorded in the previous year. The EBIT return on sales totalled 7.5 per cent (prior year: 7.8 per cent). The corresponding return on capital employed (ROCE) was 18.7 per cent (prior year: 21.6 per cent). Net income declined by 5 per cent to 107 million euros (prior year: 112 million euros). Earnings per preferred share dropped to 3.18 euros (prior year: 3.33 euros).
Taking account of this development, the Board of Management and the Supervisory Board of Jungheinrich AG will propose to the Annual General Meeting on May 15, 2014 that a dividend of 0.80 euros per ordinary share (prior year: 0.70 euros) and of 0.86 euros per preferred share (prior year: 0.76 euros) be paid, as last year.
As of December 31, 2013, the Group employed 11,840 people (prior year: 11,261), 6,484 of whom worked abroad (prior year: 6,094) and 5,356 of whom worked in Germany (prior year: 5,167). The permanent workforce thus rose by 579 staff members in the financial year that just ended, 189 of whom were active in Germany. More than 80 per cent of the increase in headcount was attributable to the sales units—primarily abroad. As of December 31, 2013, Jungheinrich had 2,466 people (prior year: 2,411 people) on its payroll in the Hamburg metropolitan region, of which 1,125 worked at the Norderstedt site after the employees of the spare parts management unit had moved to the new spare parts centre in Kaltenkirchen in August 2013 (prior year: 1,362 employees at the Norderstedt site). The number of staff members at the Moosburg site (including the Degernpoint plant) rose by 64 to 1,030 (prior year: 966 employees).
At 45 million euros, Jungheinrich’s research and development expenditures in 2013 were slightly up on the high level achieved in the preceding year (prior year: 44 million euros). In 2013, capital expenditures on tangible and intangible assets climbed by 13 million euros, or 17 per cent, to 91 million euros (prior year: 78 million euros). Hans-Georg Frey: “By successfully completing our strategic large-scale projects, we have established the prerequisites for benefiting from the positive developments expected on the market in the years ahead. This year, we will spend a similar amount of capital on our company’s future.” The new spare parts centre in Kaltenkirchen (capex volume: approximately 35 million euros) and the new factories in Degernpoint near Moosburg (about 40 million euros) and in Qingpu/China (about 18 million euros) were commissioned on schedule in 2013. Furthermore, capital was spent on the construction of two new sales centres in Bavaria and Baden-Württemberg.
Current business situation and outlook for 2014
Jungheinrich got off to a good start to the new year. In the first two months of the new fiscal year, the value of incoming orders in all business lines totalled 384 million euros and was thus 4 per cent higher than the 371 million euros recorded a year earlier. By the end of February, orders on hand in new truck business amounted to 383 million euros, surpassing the 366 million euros recorded as of December 31, 2013 by 5 per cent. Incoming orders in new truck business in terms of units advanced by 7 per cent to 13.0 thousand units in the first two months of the year. Production volume climbed by 33 per cent year on year to 14.5 thousand units during the same period. At the end of February 2014, cumulative net sales amounted to 375 million euros (prior year: 326 million euros) and were thus 15 per cent higher than the year-earlier figure.
In view of the global economic growth forecast and the much more positive estimate in respect of the Eurozone’s economic development compared to 2013, Jungheinrich expects the size of the world material handling equipment market to increase further. Market volume in Europe should also display positive development. Demand in Eastern Europe should continue to rise and the recovery of the Western European economy should present opportunities for growth. Jungheinrich anticipates that the Asian market will record further growth if the good development of the Chinese market persists. The North American market should also continue to grow. It is impossible to predict the effects of the current developments in Ukraine on the markets.
“Based on these positive assessments, subject to the continued developments in Ukraine, we expect that incoming orders will range between 2.4 and 2.5 billion euros and that consolidated net sales will range between 2.3 and 2.4 billion euros. Based on our estimate, EBIT should amount to between 170 and 180 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, logistics systems, services and advice. Jungheinrich shares are traded on all German stock exchanges.
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