Hans-Georg Frey

The global materials handling equipment market will probably decline by at least 30% from the previous year's 872,000 units to 600,000 units this year, Jungheinrich estimates.

Demand for materials handling equipment is not expected to recover before the second half of 2010, the leading forklift manufacturer said at its AGM last week.

"Jungheinrich is well equipped to prevail in this difficult market environment. Our solid business refinancing, the various measures we have initiated show that Jungheinrich maintains its course even on rough seas," says Hans-Georg Frey, chairman of the board of management.

Measures the company has initiated to cope with the changing economic environment include the adjustment of production to lower demand, intensifying inventory and cost management, and further strategic investments in products and markets.

At the AGM, company shareholders were presented with a draft resolution to decrease the dividend for fiscal 2008 by EUR0.03 (USD0.04) to EUR0.49 (USD0.68) per ordinary share and EUR0.55 (USD0.76) per preferred share.

Shareholders heard that the contraction of the market volume for the first four months of this year to 164,000 units from the previous year's 333,000 units was reflected in the group's business trend.

The value of incoming orders for all business areas for the first four months of 2009 decreased by 28% from last year's EUR750 million (USD1.038 billion) to EUR542 million (USD750 million). By the end of April, net sales had fallen by about 20% to EUR545 million (USD754 million) compared to the prior year's EUR680 million (USD941 million).

New truck business was hit the hardest, recording a 32% drop, followed by short-term hire and used equipment activities, which experienced a 6% decline. Only Jungheinrich's used equipment business posted a marginal gain while after-sales services were relatively stable.

As of April 30, 2009, orders on hand totalled EUR234 million (USD324 million) and were 40% lower than last year's EUR391 million (USD541 million).

Jungheinrich says it forecasts its 2009 incoming orders and net sales to be about EUR1.7 billion (USD2.4 billion) each compared to the prior year's EUR2.1 billion (USD2.9 billion). It is working hard to avoid a negative operating result but the extent of the expected earnings decrease in 2009 will depend on the economic trend of the next few months, the scope of structural measures to be taken and the ensuing one-off costs.

Negotiations are currently being conducted with employee representatives regarding redundancies in group units hit hard by the crisis, the company says.