Jungheinrich Shows Strong Development After Three Quarters of 2023

Jungheinrich AG recorded strong growth in revenue and results in the first nine months of the 2023 fiscal year, but also noted a weakening of market demand over the course of the year. Across all business areas, Jungheinrich’s order intake from January to September 2023 amounted to €3,873 million, which is 8 percent higher than the previous year’s figure of €3,594 million.

(Hamburg) However, vehicle orders in new business noticeably declined in the third quarter. “Jungheinrich achieved new record levels in revenue and results in the first three quarters. However, the economy has significantly cooled down, especially in Europe and the USA, over the course of the year. Geopolitical risks have also further increased. Against this backdrop, we had to register a noticeable decline in vehicle orders in the third quarter. Cumulatively, we are still above last year’s order intake,” says Dr. Lars Brzoska, CEO of Jungheinrich AG.

The order backlog for new business amounted to €1,587 million as of September 30, 2023. This was €169 million or 10 percent lower than a year earlier (€1,756 million) and corresponded to the level of the order backlog from December 31, 2022 (€1,595 million). One reason for the development of the order backlog is the further normalization of supply chains, which allowed for efficient processing of existing orders.

18 Percent More Revenue Than in 2022

Jungheinrich’s group revenue reached €4,020 million in the first nine months, which is 18 percent higher than the previous year’s figure (€3,397 million). The main driver of growth was new business. In addition to strong increases in new vehicles, the revenue from the Storage Solutions group acquired by Jungheinrich this year, amounting to €136 million, of which €67 million was in the third quarter of 2023, also contributed to this development.

The earnings before interest and taxes (EBIT) increased by €72.9 million or 27 percent to €338.8 million from January to September 2023 (previous year: €265.9 million). The EBIT margin was also above the previous year’s figure at 8.4 percent (7.8 percent). The EBIT benefited from the implementation of measures to secure margins, which more than compensated for cost increases due to rising material prices, tariff effects, and the hiring of personnel – also through acquisitions. The operational contribution to earnings from the Storage Solutions group from March to September 2023 amounted to €21 million. With €314.6 million, the earnings before taxes (EBT) rose significantly by 34 percent compared to the previous year (€234.6 million). The EBT margin reached 7.8 percent (previous year: 6.9 percent). The net income amounted to €231.3 million (previous year: €174.8 million). The earnings per preferred share reached €2.28 (previous year: €1.72).

As of September 30, 2023, Jungheinrich Group had a net debt of €360 million (December 31, 2022: €75 million). The significant increase of €285 million compared to the end of 2022 was primarily due to the negative free cash flow in the first half of 2023, which was burdened by €307 million from the purchase price payment for the Storage Solutions group. The free cash flow from January to September 2023 amounted to -€98 million (previous year -€273 million). Without considering the acquisition, Jungheinrich shows a positive free cash flow.

The number of employees in the Jungheinrich Group increased by 1,262 to 20,845 compared to the nine-month period (previous year: 19,583). A large part of the increase was due to the acquisitions of the Storage Solutions group and Magazino, the expansion of the nearshoring organization, and the start of production at the new plant in the Czech Republic.

Forecast for 2023 Annual Results Remains Unchanged

Jungheinrich maintains its forecast for the current fiscal year, which was published on April 24, 2023, and confirmed in the interim report as of June 30, 2023, unchanged. The management’s assessments regarding the expected development of the company have not changed significantly since the last reporting.

Jungheinrich expects an order intake for the entire year 2023 between €5.0 billion and €5.4 billion (2022: €4.8 billion). For group revenue, a range of €5.1 billion to €5.5 billion (2022: €4.8 billion) is forecasted. These ranges take into account an order intake of €0.3 billion and revenue of €0.2 billion from the Storage Solutions group.

EBIT is expected to be between €400 million and €450 million in 2023 (2022: €386 million). It includes one-time transaction-related costs of around €8 million from the acquisition of the Storage Solutions group and, after the final purchase price adjustment and completed purchase price allocation, burdensome effects of €13 million. The EBIT corridor also considers about half of the variable, performance-related compensation component for the management of the Storage Solutions group amounting to €15 million, which was determined according to the conditions established during the transaction. The burdensome effects will be partially compensated by the proportional operational earnings of the Storage Solutions group amounting to €25 million to €30 million. The EBIT margin is expected to be in the range of 7.8 percent to 8.6 percent (2022: 8.1 percent). EBT is expected to reach €370 million to €420 million (2022: €347 million) with a resulting EBT margin between 7.2 percent and 8.0 percent (2022: 7.3 percent). We anticipate a ROCE value between 15 percent and 18 percent (2022: 16.3 percent).

Significantly Better Value for Free Cash Flow

Furthermore, Jungheinrich expects that the free cash flow will achieve a significantly better value compared to the previous year (-€239 million), but will remain negative when considering the acquisition of the Storage Solutions group. The free cash flow forecast includes €307 million according to the contractually agreed final purchase price adjustment following the completion of the acquisition. Part of the purchase price was used to pay off bank liabilities and is therefore not part of the free cash flow. Without considering the acquisition, Jungheinrich expects a positive free cash flow from its operational business.

Photo: © Jungheinrich