Early measures reduced impact of COVID-19 on H1 for Jungheinrich
Jungheinrich AG has published its result for the first half of 2020: the key figures have been heavily affected by the global market decline in material handling equipment that resulted from the coronavirus pandemic in the second quarter. Incoming orders were reduced by 12.3% to €1811 million in the first half of 2020. Revenue fell 7.9% to €1801 million. However, effective measures taken early on by the Group to reduce costs and secure liquidity successfully limited the impact of the crisis on Jungheinrich. The company doubled cash flow from operating activities, significantly reduced net debt and maintains a solid liquidity reserve.
Dr Lars Brzoska, chairman of the board of management of Jungheinrich AG said, “The COVID-19 pandemic affected the global economy to an unprecedented extent in the first half of 2020. Even the intralogistics sector could not come out of this global event unscathed. It really helps that we had already made Jungheinrich weatherproof last year in expectation of a global economic slowdown. Because of this, we were ready to react swiftly to the coronavirus pandemic in the spring of 2020 and take successful measures to reduce costs and secure liquidity to minimise the impact of the crisis on Jungheinrich. We have managed to double cash flow from operating activities compared to the previous year and at the same time significantly reduce net debt. Jungheinrich after-sales services also contributed to our ability to withstand the crisis with its high and stable share of revenue. Our expertise in lithium-ion technology makes Jungheinrich outstandingly well positioned for the coming decade of electric mobility. Our automation solutions guarantee a safe and efficient material flow that is stable even in times of crisis. On this basis I am absolutely positive that Jungheinrich will emerge from the coronavirus crisis strengthened.”
At 53.9 thousand units, orders for new trucks in the first half of 2020 were therefore significantly down on the previous year (67.0 thousand units). At €1.81 billion, the value of incoming orders of the Jungheinrich Group also remained below the previous year’s figures (€2.07 billion). Particularly in light of the good level of orders on hand as of the end of the first quarter of 2020, Group revenue amounted to €1.80 billion (previous year: €1.96 billion).
Taking into account the consequences of the COVID-19 crisis that are currently expected, the board of management of Jungheinrich AG published a new forecast for the 2020 financial year on 22 July 2020. According to this forecast, Jungheinrich expects incoming orders for 2020 of between €3.4 billion and €3.6 billion. Group revenue is also expected to range between €3.4 billion and €3.6 billion.
Jungheinrich also aims to slightly increase its market share in Europe against the 2019 financial year (2019: 20.2%).
The global market volume for material handling equipment decreased by 7% year-on-year in the first half of 2020. This corresponds to 52 thousand units. In light of the spread of COVID-19 through European member states, this negative market development was considerably more pronounced in the second quarter of 2020 (minus 28%) than in the first quarter of 2020 (minus 5%). Overall, this decline in the global market for material handling equipment in the reporting period to 80% is due to the steep decline in orders from the European market.
The global market volume for the warehousing equipment product segment declined 5% against the same period of the previous year. This was driven by the negative market development in Europe. 71% of the 13% lower global market volume for battery-powered counterbalanced trucks was also based on declining demand in Europe. The clear decline in demand of 7% around the globe for IC engine-powered forklift trucks was due to a drop in orders from North America and Europe.
Due to the market developments in Europe in particular, incoming orders in the new truck business, based on units, which includes orders for both new forklifts and trucks for short-term rental, declined by 20% in the first half of 2020 to 53.9 thousand units. In addition to the drop in demand, the lower figure also resulted from the clear reduction in orders for Jungheinrich’s own short-term rental fleet. By value, incoming orders for all business fields – new truck business, short-term rental and used equipment, and aftersales services – came to €1811 million in the reporting period, which is 12% below the previous year’s figure of €2065 million.
Orders on hand for new truck business came to €824 million as of 30 June 2020, which is €191 million or 19% t lower than the previous-year figure (€1015 million). Compared with orders on hand of €787 million as of year-end 2019, it nevertheless represents an increase of €37 million or 5%.