Struggling Times for Young Heinrich
Jungheinrich Faces Challenges Amidst Weak Economic Momentum and Restructuring
German forklift manufacturer Jungheinrich is navigating through a tough financial period in 2025, contending with economic sluggishness, intensified competition, and restructuring efforts. This has led to a revised profit outlook, despite maintaining stable revenue and order guidance.
On Friday morning, Jungheinrich's stock was one of the worst performers in the MDax, falling by around 2%. The company's current market value stands at EUR 3.4 billion. The downward trend continues, with a loss of around one-fifth of its value in the past four weeks.
Despite an approximately 4% increase in orders in the second quarter, Jungheinrich's revenue remained virtually stagnant at around EUR 1.3 billion. After-tax profit decreased by around 7% to EUR 70 million, and operating profit before interest and taxes (EBIT) fell by more than 6% to EUR 106 million.
The challenges facing Jungheinrich are partly due to the disposal of its Russian subsidiary, Jungheinrich Lift Truck OOO, which was sold at a price substantially below book value. This affected profitability forecasts but left revenue and order targets unchanged.
In response to the challenging environment, Jungheinrich has initiated a transformation or restructuring program. The aim is to cut costs and adapt to the evolving market conditions. The savings program, which will incur one-time expenses of around EUR 90 million in the current year, is expected to reduce the company's costs by around EUR 100 million per year in the medium term.
Peter Rothenaicher of Baader Bank attributes the weaker margin to the weaker economic momentum, despite the increase in orders. He notes a "clear deterioration in international competition with increasing pressure on prices in new business."
Despite the setbacks, Jungheinrich remains a key player in the logistics and forklift industry. The company expects revenues and incoming orders between €5.3 billion and €5.9 billion, with free cash flow anticipated to exceed €250 million. The management's outlook for the year anticipates orders and revenue of between EUR 5.3 and 5.9 billion.
Notably, the share price of Jungheinrich's preferred stock listed in the MDax has increased by around 30% this year. This outperformance is despite the index for mid-cap stocks having risen by almost a quarter since the end of 2024.
The majority of Jungheinrich's share capital is held by the families of the two daughters of the company's founder, Friedrich Jungheinrich. The company's management acknowledges uncertainties from geopolitical, economic, and industry factors which may influence future results.
[1] "Jungheinrich: Erste Halbjahresergebnisse 2025" (Jungheinrich: First Half-Year Results 2025), Jungheinrich AG, 2025. [2] "Jungheinrich: Veränderte Erwartungen für das Jahr 2025" (Jungheinrich: Revised Expectations for the Year 2025), Jungheinrich AG, 2025. [3] "Jungheinrich: Erste Halbjahresergebnisse 2025" (Jungheinrich: First Half-Year Results 2025), Jungheinrich AG, 2025. [4] "Jungheinrich: Veränderte Erwartungen für das Jahr 2025" (Jungheinrich: Revised Expectations for the Year 2025), Jungheinrich AG, 2025.
[1] In the face of economic sluggishness and intense competition, Jungheinrich, a key player in the logistics and forklift industry, is implementing a cost-cutting restructuring program to adapt to the evolving market conditions, with a goal of reducing costs by approximately EUR 100 million per year in the medium term.
[2] Amidst this financial restructuring, the business outlook for Jungheinrich has been revised, despite maintaining stable revenue and order guidance, causing a significant decrease in the company's stock value in the MDax by around 2% on a Friday morning.
