News story

Jungheinrich grows in tough market

Wednesday, 13 November 2019 ( #949 ) - Hamburg, Germany
Jungheinrich continued to grow in the first nine months of 2019. Revenue rose 10% to EUR2.97 billion (USD3.28 billion). The main driver of this growth was the new truck business. However, incoming orders fell to 94,100 units (previous year: 100,600 units), though the value of orders grew 1% to EUR3.01 billion (USD3.32 billion). Volker Hues, member of the board of management - finance, says while the revenue growth is pleasing, they recognise "the economic downturn in the declining market figures". "Our customers have become more cautious due to political risks such as escalating trade conflicts and the ongoing uncertainty with Brexit. They are deferring capital expenditure, particularly in our core market, Europe. The transformation in German key industries is also posing additional challenges for mechanical engineering. This is having an impact on our incoming orders. We believe that these developments will continue in the coming year if the macroeconomic and political conditions do not improve." Hues remains convinced about the growth opportunities that automation and digitalisation will provide, and believes that lithium-ion technology will assert itself. "It is foreseeable that this technology will completely replace lead acid batteries and IC engine-powered trucks in intralogistics. For this reason, we are currently building our sector's largest European production, development and recycling centre for lithium-ion technology, named JT Energy Systems. We are now also making our unique expertise in the field of integrated lithium-ion based drive technology available to other branches of the industry, such as manufacturers of agricultural and construction machinery. In this way, we are setting the right course for the successful development of Jungheinrich." The latest Jungheinrich results note that the global market volume for materials handling equipment decreased by 4% year-on-year from January to September 2019. This corresponds to around 50,000 units. The decrease is primarily due to the decline in orders in the European and North American markets. Around half of the steep drop in demand in North America is the result of a decrease in demand for IC engine-powered forklifts. In contrast, incoming orders rose slightly in China. The driving force behind this was the solid demand for warehousing equipment, which was partially negated by the downturn in the market for counterbalance trucks - particularly IC engine-powered models. The global market volume for the warehousing equipment product segment declined 2% against the same period of the previous year. In this environment, the robust growth on the Chinese market was almost completely cancelled out by the negative market developments in Europe. Just over half of the 5% lower global market volume for battery-powered counterbalance trucks was based on declining demand in Europe. The decline in demand of 7% around the globe for IC engine-powered forklift trucks was due to a drop in orders in North America, Asia and Europe.