Jungheinrich with a Successful First Half of 2023

The Jungheinrich AG looks back on a very successful first half of the fiscal year 2023. Despite the ongoing difficult market situation, particularly due to the weak economic development in the Eurozone, the group recorded a solid growth in order intake of 9 percent to 2,684 million euros (previous year: 2,461 million euros) in the first half of the year. The order intake attributable to the acquisition of the Storage Solutions Group, completed on March 15, amounted to 89 million euros.

(Hamburg) The order backlog of new business at Jungheinrich reached a value of 1,731 million euros at the end of the first half of 2023, including the order backlog of the Storage Solutions Group amounting to 145 million euros. Compared to the backlog value of 1,595 million euros at the end of 2022, this represents an increase of 136 million euros or 9 percent. The group revenue in the first half of 2023 reached 2,658 million euros, which is 21 percent higher than in the same period of the previous year (2,202 million euros). A key driver for this was the new business. In addition to the very good increases in new vehicles, the revenue from the new business of the Storage Solutions Group, amounting to 69 million euros, also contributed to this development. EBIT increased significantly in the first six months of 2023 by 74 million euros or 46 percent to 236 million euros (previous year: 162 million euros). The operational result contribution from the Storage Solutions Group amounted to 12 million euros. Taking into account the one-time transaction-related costs, the purchase price allocation, and the variable compensation component totaling 19 million euros in the first half of 2023, the net EBIT contribution from the Storage Solutions Group amounted to minus 7 million euros. Jungheinrich’s EBIT margin (EBIT-ROS) was significantly above the previous year’s value at 8.9 percent (7.4 percent).

“The first half of the year was very successful for Jungheinrich. Our recently strong revenue growth has continued. We also recorded a very positive development in results with an increase of 46 percent. Through the acquisition of the Storage Solutions Group, we have acquired an important platform for growth within the areas of racking systems and warehouse automation in the USA. This is now reflected for the first time in the consolidated financial statements. We continue to drive the implementation of our Strategy 2025+ consistently and confirm our forecast for the current year. Jungheinrich is very well positioned for the future,” explains Dr. Lars Brzoska, CEO of Jungheinrich AG.

EBT Increased by 61 Percent Compared to Previous Year

EBT exceeded the previous year’s value (138 million euros) significantly in the first half with 222 million euros, an increase of 61 percent. The EBT margin (EBT-ROS) was 8.3 percent (previous year: 6.3 percent). The net income amounted to 163 million euros (previous year: 103 million euros). The earnings per preferred share reached 1.61 euros (previous year: 1.02 euros). The ROCE increased significantly to 18.2 percent (previous year: 14.4 percent). This was primarily due to the significantly higher EBIT of the “Intralogistics” segment compared to the previous year. In contrast, the average tied-up capital increased disproportionately. This was mainly due to the increase in working capital in the third and fourth quarters of 2022, while working capital developed relatively stably in the first and second quarters of 2023 due to targeted working capital management. The free cash flow, as the sum of cash flow from operating activities and investing activities, improved significantly to -182 million euros (previous year: -270 million euros). Without the acquisition of the Storage Solutions Group, a positive free cash flow would have resulted from the operating business.

Significant activities of Jungheinrich in the field of research and development (R&D) focused in the first half of 2023 on the further development of efficient energy storage systems based on lithium-ion technology, the associated improvements in the design of new industrial trucks, and digital products. Another R&D focus was the development of mobile robots and the optimization of automated systems. Total R&D expenditures, which mainly include internal services, increased in the first half of 2023 by 11 million euros to 72 million euros (previous year: 61 million euros). The activation rate was significantly above the previous year at 31 percent (21 percent) due to the increase in significant product developments.

As of June 30, 2023, Jungheinrich employed a total of 20,445 employees on a full-time basis, of which 41 percent were in Germany and 59 percent abroad. This is an increase of 638 employees or 3 percent compared to December 31, 2022 (19,807). The change during the reporting period compared to the end of December was due to the expansion of personnel capacity in sales and the acquisition made in the USA (Storage Solutions) with 176 employees.

Forecast for the Fiscal Year 2023 Maintained

The board confirms its forecast from April 24, 2023, for the current fiscal year. The forecast includes the proportional effects from the acquisition of the US-based Storage Solutions Group completed on March 15, 2023. The values considered are subject to exchange rate fluctuations.

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

EBIT is expected to be between 400 million euros and 450 million euros in 2023 (2022: 386 million euros). It includes one-time transaction-related costs of around 8 million euros from the acquisition of the Storage Solutions Group and – after the final purchase price adjustment and the completed purchase price allocation – negative effects of 13 million euros. 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 euros, which was determined according to the conditions set out in the transaction. The negative effects will be partially offset by the proportional operational result from Storage Solutions amounting to 25 million euros to 30 million euros. 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 euros to 420 million euros (2022: 347 million euros) with a resulting EBT margin between 7.2 percent and 8.0 percent (2022: 7.3 percent). We expect a ROCE value between 15 percent and 18 percent (2022: 16.3 percent).

Free Cash Flow Improved but Still Negative

Furthermore, Jungheinrich expects that the free cash flow will achieve a significantly better value compared to the previous year (-239 million euros), but will remain negative when considering the acquisition of Storage Solutions. The free cash flow forecast includes 307 million euros 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 the operating business.

Photo: © Jungheinrich