Business News
Ad Hoc Release Pursuant to Sec. 15 of the German Securities Trading Act (WpHG): H1 2009 Earnings Trend and Outlook for 2009
Tuesday 28. July 2009 - Downward Market and Business Trend Continues/Board of Management Intensifies Adjustment Measures/Earnings Burdened by Substantial One-Off Costs
In light of the persistently negative market and business development, the Board of Management of Jungheinrich AG (ISIN DE0006219934) decided today to significantly intensify the measures taken so far to counter the effects of the economic crisis. The Board of Management will inform the Supervisory Board of the comprehensive package of measures at an extraordinary meeting at the beginning of August. The measures are designed to ensure the company’s future viability over the long term and to return to generating profits commensurate to the economic situation from 2010 onwards.
By deciding to expand the scope of the adjustment measures defined thus far, the Board of Management is reacting to the continued collapse of the world market for material handling equipment, which is still shrinking at a rate of about 50 per cent. Under the caveat of continued uncertainty surrounding market assessments, in fiscal 2009, the world market is likely to decline by approximately 40 per cent to about 520 thousand forklift trucks (prior year: 872 thousand units). The market for material handling equipment is not expected to be revitalized before the second half of 2010.
The company will incur substantial one-off costs in the second half of 2009 as a result of the newly adopted package of measures, primarily in connection with intended personnel-adjustment measures. In addition to the 300 layoffs implemented at the German production sites at the beginning of the year, about 500 more jobs will have to be cut, in order to adapt the plants to the market’s long-term requirements in structural terms. Adjustment measures affecting approximately 400 Jungheinrich sales employees initiated primarily outside Germany will have to be flanked by a further headcount reduction by an anticipated 150 employees in Germany and abroad.
Earnings before interest and taxes (EBIT) are expected to drop to about minus 15 million euros in the first half of 2009 (prior year: plus 63.5 million euros). This includes some 12 million euros in one-off expenses, primarily resulting from the impairment losses recognized for capitalized development costs and investments. EBIT is expected to deteriorate considerably by year-end, above all due to the rising share of sales accounted for by small forklift trucks and the mounting pressure on the prices of incoming orders in the last few months. Additional one-off costs resulting from the structural adjustment measures will cause earnings before interest and taxes (EBIT) for 2009 to be in high negative double-digit million euro territory. If the sector were to recover earlier than anticipated, positive effects would be felt by the Jungheinrich Group’s business and earnings trends in terms of both EBIT and the extent of necessary structural measures.
The company will provide detailed information on its business performance in the first half of 2009 in the interim report which will be published on August 13, 2009.