Jungheinrich Successfully Navigates 2020 Despite Pandemic

The intralogistics company Jungheinrich has managed to hold its ground even in the crisis year. The order intake and revenue amounted to €3.8 billion each, and EBIT was €218 million. The outlook for 2021 is optimistic. As a thank you to the workforce for their outstanding commitment during the crisis, a Corona bonus was distributed. The new corporate strategy 2025+ was presented.

(Hamburg) Despite the economic downturn caused by the coronavirus, Jungheinrich was able to conclude its fiscal year 2020 better than initially expected at the beginning of the COVID-19 pandemic. All key figures are in the upper half of the forecast raised in October 2020, and some targets were exceeded. EBIT, EBT, and the net income have developed well under the special circumstances. Jungheinrich was also able to significantly increase cash flow from operating activities and build a substantial net asset position in the past fiscal year.

“In light of the challenging framework and market conditions exacerbated by the COVID-19 pandemic, we are satisfied with the business performance of the year. Thanks to early measures to reduce costs and increase efficiency, as well as our determined liquidity management, we were able to successfully limit the negative impacts of the pandemic on our business. It is thanks to the outstanding commitment of our employees that we were able to achieve such a result in the year of the greatest medical and economic crisis since World War II,” explains Dr. Lars Brzoska, Chairman of the Board of Jungheinrich.

Liquidity is of High Importance in These Times

In a market environment significantly influenced by the outbreak of the COVID-19 pandemic, revenue in the fiscal year 2020 reached €3.81 billion (previous year: €4.07 billion). The order intake value, which includes the business areas of new business, rental and used equipment, as well as customer service, reached €3.78 billion in 2020 due to a strong fourth quarter (previous year: €3.92 billion). Both values were slightly above the forecast range that had been raised in October 2020. EBIT reached €218 million (previous year: €263 million), placing it in the upper half of the anticipated range, resulting in an EBIT margin of 5.7 percent (previous year: 6.4 percent). The net income amounted to €151 million (previous year: €177 million). Cash flow from operating activities significantly exceeded the previous year with €551 million (previous year: €345 million). As of December 31, 2020, a net asset position of €194 million was achieved, compared to a net debt of €172 million at the same time the previous year. This corresponds to an improvement of €366 million. The drivers of this positive development were lower investments, the reduction of the rental fleet, and the release of working capital.

“Especially in economically challenging times, a strong balance sheet and solid liquidity are of high importance to ensure that we can implement the necessary strategic measures at any time and maintain the financial independence of the group,” explains Dr. Volker Hues, CFO.

The Board of Jungheinrich AG proposes to distribute a dividend of €0.41 (previous year: €0.46) per ordinary share and €0.43 (previous year: €0.48) per preferred share. The dividend proposal results in a total distribution of €43 million (previous year: €48 million). The payout ratio of 28 percent (previous year: 27 percent) is in line with the company’s goal of distributing between 25 percent and 30 percent of net income to shareholders. “We are pleased that we can continue our policy of continuous dividend payments even after this challenging year. A reliable participation of shareholders in the company’s success is essential for us,” says Dr. Hues.

Successful Corona Crisis Management

Right at the beginning of the Corona crisis, Jungheinrich promptly formed a central crisis team and also established local crisis teams in the organizational units and plants to identify emerging risks early and minimize their impact on the company through timely, appropriate, and coordinated measures. The highest priority was the protection of employees, customers, and business partners. For this purpose, Jungheinrich procured more than 215,000 masks and over 20,000 liters of disinfectant in 2020 alone. At the same time, comprehensive precautions were taken to minimize the impact of the pandemic on supply chains and production. Worldwide, local units are in close contact with the respective authorities and continuously implement appropriate measures to ensure supply capability. Thus, Jungheinrich has succeeded in being reliably available to its customers throughout the crisis. The use of short-time work occurred only at a few locations and to a limited extent in 2020.

“Thanks to the great commitment of our employees, our customers, especially those from system-relevant areas of logistics, trade, as well as the food and pharmaceutical industries, could always rely on Jungheinrich. Our colleagues have thus become our ‘Yellow Heroes’. Jungheinrich can be proud of this team, with which we will also master all upcoming challenges and achieve much in the future,” explains Dr. Brzoska.

As a thank you for this extraordinary commitment and in recognition of the additional burden caused by the crisis, Jungheinrich paid its employees a Corona special bonus of a total of €13.5 million at the end of the year.

New Corporate Strategy 2025+

In November 2020, Jungheinrich presented the new corporate strategy 2025+ to the public. In the coming years, Jungheinrich will focus on increasing profitability, efficiency, and sustainability. After the group had already achieved its strategic growth target for 2020 a year earlier than planned, Jungheinrich aims to sustainably create value for all its stakeholders – customers, employees, shareholders, business partners, and society as a whole. The group places particular emphasis on expanding its presence in the markets of Europe, China, and North America. The basis for all activities is a holistic understanding of sustainability that equally considers economic, ecological, and social aspects.

“We want to be the first choice for our customers permanently and provide them with added value through forward-looking solutions and technologies. At the same time, we want to shape economic, ecological, and social developments as a group. To achieve this, we are positioning Jungheinrich to be more profitable, efficient, and sustainable,” explains Dr. Lars Brzoska.

Forecast and Outlook for 2021

In light of the positive market development in recent months and the growth expectations of the IMF for the global economy in the current year of 5.5 percent, Jungheinrich expects that the global market for industrial trucks will grow in the mid to high single-digit percentage range in 2021, with a projected increase in market volume in the mid-single-digit percentage range for the core market of Europe.

Considering this economic and industry outlook, Jungheinrich expects a target range for group revenue in 2021 of €3.9 billion to €4.1 billion. The order intake is also forecasted in a corridor of €3.9 billion to €4.1 billion. EBIT is expected to be between €260 million and €310 million in the current fiscal year. The EBIT margin is expected to be in the range of 6.7 percent to 7.6 percent. Regarding the development of material costs, Jungheinrich expects significantly rising prices in line with the broad economic recovery. EBT is currently estimated to reach €240 million to €290 million, with the EBT margin expected to be 6.2 percent to 7.1 percent. This is based on the assumption that the current financial market environment remains relatively stable. To maintain financial independence and ensure adequate financial flexibility, Jungheinrich continues to maintain a high liquidity position. By the end of 2021, the group aims for a net asset position significantly above €200 million. The ROCE for the fiscal year 2021 is expected to be between 14 percent and 18 percent due to the significantly higher EBIT expectations compared to the previous year.

All forecast values refer to organic growth. Despite the ongoing vaccination campaigns, uncertainties regarding the further spread of the coronavirus and its associated impacts on customer demand and supply chains still exist. The forecast is based on the assumption that there will not be more extensive lockdown measures than in 2020, including plant closures, and that supply chains remain intact. Measures to ensure supply capability will continue.

Photo: © Jungheinrich