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28 October 2019

Liebherr on course for 2019 growth but warn of more challenging 2020

First publishedon www.AggBusiness.com
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Members of the global construction equipment trade media enjoyed a tour of Liebherr's manufacturing and assembly facilities in Kirchdorf an der Iller, Germany

Liebherr look set to post healthy turnover growth in full-year 2019, but the global construction equipment giant’s management warn that 2020 is set to be tougher.

The German group, one of the world’s biggest construction machine makers, achieved a record-breaking year in 2018, achieving a turnover of more than €10.5bn. The first half of 2019 has seen group turnover of over €5.7bn – a 12.4% increase on the €5bn posted in H1 2018.

But Andreas Böhm, a member of Liebherr Group’s board of directors, warned such growth was unlikely to continue next year.

Speaking at a press conference during Liebherr’s International Construction Trade Media Information Tour, he said: “It is tremendous that that in 2019 we are on target to achieve our growth target for a fourth year in a row. Nevertheless, [machine] demand is slowing down a bit. This might result in a bit lower turnover in 2020.”

Böhm said Liebherr Group had seen growth in nearly all regions to date in 2019, particularly in the Americas, which had more than compensated for a slight decrease in turnover in Africa and the Near and Middle East.

He continued: “Our received orders have also grown, while orders on hand remain at a high level. This indicates that the industries we are supplying are also still doing well and continue to turn to us for their needs.

“The only area where we anticipate a decrease is in our investments, which are forecasted to be roughly around 25% less than 2018. While this looks like a significant cutback, it’s important to note that our investments in 2018 were higher than in past years.

“What’s more, even our ‘lower’ rate of investment in 2019 will be around 5%, which is still significantly above industry average. We continue to invest heavily in our international manufacturing facilities and in our sales and service network.”

Böhm said, for example, that Liebherr Group had invested in new facilities throughout China to meet increasing demand from Chinese customers. China represents an important market for the Group— and Böhm said the opportunities there for our solutions are growing.

He added: “With China’s growth model shifting from quantitative growth to qualitative growth, there is more demand for quality and sustainability— two values that are core to our Group.”

Böhm noted that Liebherr Group’s (Liebherr) recent investments in China included the founding of Liebherr-Transportation Systems (China) Co., Ltd, which will develop, produce and service components and systems for Liebherr’s transportation business in China, which is considered to be the largest rail transport market in the world. The new company will also manufacture environmentally-friendly airborne air-conditioning systems, electro-hydraulic actuation systems and high-performance cooling technology.

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Liebherr's pre series TA230 articulated hauler was showcased during the group's 2019 International Construction Trade Media Information Tour
Within the Gear Technology and Automation Systems division, Liebherr opened a new production site in Yongchuan for gear hobbing and gear grinding machines. The new facility supports the group’s objective of direct added value in China and proximity to Chinese customers, who make China one of Liebherr’s most important markets for gear cutting machines and automation systems.


Also in China is a new cooperation between Liebherr-Components and Shanghai Diesel Engine Co. Ltd., a subsidiary of China's largest vehicles and components manufacturer, SAIC Motor Corporation Limited. Through the cooperation, Liebherr will supply its hydraulic injection systems for use in decentralised power generation to produce new high-performance off-highway engines.

Liebherr has also invested in new facilities sites in Germany, including a new domestic appliances customer centre in Ochsenhausen and a new cranes and deep foundation equipment sales and service centre at Hamburg port.

“All of these investments help position Liebherr to better serve customers around the world, while becoming even closer to markets where we see significant growth,” said Böhm.

“In addition to opening new facilities, we will also continue to invest in our people. We anticipate that the number of Liebherr employees worldwide will again increase in 2019, from more than 46,000 last year to over 49,000 by the end of the year.

“This growth— both our recent investments and our anticipated results— comes despite changes in the political landscape and global economic uncertainty.”

While Liebherr’s “well-filled books and turnover” so far give “reason to be optimistic”, Böhm stressed that global growth remains subdued, with a forecasted rate of 3.2%. GDP releases so far this year, together with generally softening inflation, point, he said, to weaker-than-anticipated global activity.

Meanwhile, Böhm said that shifts in the political arena are also impacting market growth. He continued: “Intensified US-China trade and technology tensions, as well as prolonged uncertainty on Brexit, have meant slowed momentum in global activity in the first half of 2019. While there were positive surprises to growth in advanced economies, we’ve seen weaker-than-expected activity in emerging market and developing economies, including a projected 6.2% growth rate in Asia.

“Spending patterns are also reflected in global trade, which tends to be intensive in investment goods and consumer durables. Trade volume growth declined to around 0.5% year-on-year in the first quarter of 2019 after dropping below 2% in the fourth quarter of 2018.”

Böhm also took the opportunity during the press conference to stress how Liebherr is committed to free trade, emphasising its importance across the many industries the group serves.

The International Construction Trade Media Information Tour on 24-25 October was co-hosted by Liebherr’s facilities in Kirchdorf an der Iller, Germany, and Nenzing, Austria.

Among pre series and prototype machines showcased during the event were three pre series 30-ton (27 tonnes) TA320 articulated haulers and the LB 16 unplugged piling rig, said to be the world’s first battery-powered piling rig. The model was initially highlighted at the bauma 2019 construction equipment trade exhibition in Munich, Germany.

Companies in this article

Liebherr
www.Liebherr.com