(new: management statements from interview, further details, current share price)

HAMBURG (dpa-AFX) - Forklift manufacturer Jungheinrich expects headwinds in its day-to-day business from high energy costs again this year. The operating margin is only likely to reach the level of 2022 in the best case scenario, the company announced on Friday when presenting its figures for the past year in Hamburg. In 2022, raw materials and energy in particular had also become much more expensive for Jungheinrich. In addition, steel had become scarce. The Jungheinrich management wants to reduce the increased working capital resulting from the production backlog this year, as it reported in an interview with the financial news agency dpa-AFX. This should also improve the free cash flow. The preferred shares listed on the stock exchange buckled.

Management led by Group CEO Lars Brzoska expects sales of 4.9 billion to 5.3 billion euros in 2023, up from just under 4.8 billion euros last year. Of this, earnings before interest and taxes (Ebit) are expected to remain between 7.3 and 8.1 percent. Last year, operating profit rose by seven percent to 386 million euros, which was better than analysts had expected.

Due to tight supply chains and scarce parts availability, Jungheinrich was unable to process many orders last year or was only able to do so with delays. The higher costs weighed on profitability. Working capital increased due to higher inventories and stock levels, but this is expected to change in the foreseeable future: "We will not see working capital build up again in 2023 like it did in 2022," said Chief Financial Officer Volker Hues in an interview. Instead, Jungheinrich is working on reducing it again. The increased working capital burdened the free cash flow in 2022, as did the outflow to build up the short-term hire fleet.

According to Hues, this will still be influenced by the acquisition of Storage Solutions in 2023. The Hamburg-based company announced the acquisition of the US company in January. By 2024, 2025 at the latest, nothing will be felt of these technical peculiarities, Hues said.

Jungheinrich is quite capable of realizing free cash inflows well in excess of 100 million euros, which is the medium-term target advised for 2025, he said. For this year, Hues expects the ratio to remain negative, but better than in 2022, when Jungheinrich recorded cash outflows of 239 million euros, after inflows of 39 million euros in 2021.

The share fell more than nine per cent at times on Friday as the bottom performer in the MDax, losing its gains from the previous days. Most recently, it was down 6.6 percent. The stock had developed positively, particularly in January, and moved mainly sideways in February. The share then slipped somewhat in mid-March, from which it had subsequently recovered by Friday's price slide.

In an initial reaction, analyst Peter Rothenaicher from Baader Bank attested to the forklift manufacturer's strong results for 2022, and analysts from investment house Stifel also see stabilizing trends in the intralogistics market. However, the weakening sales growth bears witness to a subdued development in order intake, especially from customers in the online retail sector.

In the final quarter of 2022, Jungheinrich's net sales rose by just under twelve per cent. In the third quarter, the increase amounted to almost 16 per cent. According to Stifel analyst Alexander Koller, the ratio of sales to incoming orders ("book-to-bill") declined towards the end of the year, with major orders being the most affected.

The bottom line remained around 270 million euros in 2022, slightly more than a year earlier. Preferred shareholders are therefore to receive a dividend of 0.68 euros per share certificate, as in 2021. They account for just under half of Jungheinrich's capital. The rest are ordinary shares owned by the heirs of the company's founder./lew/jkr/he