Jungheinrich's Strategy 2030+: Future Avenues and Global Advancements
Chinese Competition Set to Intensify as Jungheinrich Boss Prepares for Increased Rivalry
Once more, the CEO of Jungheinrich, Lars Brzoska, has unveiled a new strategic blueprint—Strategy 2030+. Approved by the Supervisory Board on September 26, 2022, this plan builds on its previous strategy launched amidst the COVID-19 crisis in 2020. The primary focus is to push boundaries, boost profits, and achieving sustainability.
Technologically, the Strategy 2030+ centers around automation, digitalization, and cutting-edge energy systems. There's also a strong emphasis on expanding the company's footprint, with particular attention paid to Europe, China, and North America. As Brzoska looks back on the implementation of the previous strategy, he sees the "most important goals" as having been met.
The company's stock market journey has seen its fair share of twists and turns. Despite reaching an all-time high of 47.32 euros in April 2021, it dipped to over 20 euros in September 2022. However, the share price rebounded significantly, recovering from a 23% drop to 25.66 euros in 2024 and surpassing 33 euros. The only major setback has been the disruptive U.S. customs policy impacting the spare parts sector. The focus now shifts to expanding beyond the European core market, which accounts for around 83% of annual sales in 2024.
Brzoska acknowledges that there's potential for Jungheinrich, even as a "still very European player." Opportunities lie in seeking growth beyond the Old Continent. With a global mindset, the company aims to become "significantly more global," especially in North America and the Asia-Pacific region.
Competitive pressure is intensifying, as Chinese companies are rapidly advancing in terms of technology and manufacturing at low costs. They've also managed to capture significant market share in various product segments in Germany through a combination of quality products, export strength, a robust dealer network, and competitive pricing.
During economic downturns, customers tend to favor more budget-friendly options, says Brzoska, who's been with the company since 2014 and initially handled sales and technology. The "mid-tech market" is a sizeable market not only in Asia but also in Europe and the USA, and Chinese firms are currently dominating this market. Brzoska assures his team will tackle this challenge soon and is confident that Jungheinrich won't succumb to the "Chinese wave."
The financial year report published at the end of March reveals some optimistic projections. For 2025, Jungheinrich aims for a higher order intake of between 5.5 and 6.1 billion euros and sales of between 5.4 and 6 billion euros. The EBIT margin expected in 2025 is between 7.8 and 8.6%, which, if achieved, will land just within the previous target range of 8 to 10%.
To improve its cost base, Jungheinrich continues to focus on its digital transformation and the expansion of its automation business. Last year, the company trimmed close to 200 jobs as a response to the challenging market conditions. The successor for the board member who left due to disagreements regarding the department structure and direction is yet to be appointed.
Jungheinrich made its mark in the Asia-Pacific region with the appointment of Manojit Acharya as Vice President. The company plans to bolster its market presence by cultivating strong customer and distributor partnerships, delivering automation solutions, and enriching the product portfolio with sustainable material handling solutions. It also aims to secure strategic partnerships, like the recent collaboration with EP Equipment, to support the Mid-Tech segment through its AntOn by Jungheinrich brand.
In the context of Jungheinrich's strategic plans, the company aims to become "significantly more global," particularly in North America and the Asia-Pacific region, as part of itsexpanding business beyond the European core market (Industry, Business). The company's financial projections for 2025 include an expected EBIT margin of between 7.8 and 8.6% and sales of between 5.4 and 6 billion euros, which stresses the importance of finance in the grand strategy (Finance).
