12.04.2018

Record year for Liebherr

Liebherr has reported its results for 2017, with revenues up 9.3 percent to a record €9.84 billion and pre-tax profits jumping almost 22 percent to €576 million.

Sales of construction and mining equipment - which includes mobile and tower cranes - increased 14.5 percent to €6,182 million, while revenues for the rest of the group, including maritime cranes, was 1.5 percent higher at €3,663 million.

Sales of mobile cranes - wheeled and crawler - were roughly flat at €2.06 billion and marginally lower than in 2016. Sales of All Terrain, Rough Terrain and truck mounted cranes declined in a flat market although sales of three to six axle models remained stable. It claims that its share of the All Terrain market declined in 2017 to just over 52 percent. Sales in Germany, the UK, Australia and Japan increased sharply, while Italy also improved and Eastern Europe remained flat. Sales to Denmark, Austria, Belgium all declined.

The Middle East saw a sharp fall, with a more modest decline in the Americas, although the sales of All Terrains in the USA increased, but were offset by a fall in crawler crane sales. Argentina and Canada both saw across the board improvements, while Mexico declined following a good year in 2016.

The company expects a significant improvement in 2018, with order intake running sharply higher than a year ago.

Tower crane sales in comparison jumped 31 percent to €537 million, with sharp increases in Western Europe which represents over 80 percent of sales. Germany and France posting particularly strong growth, along with Eastern Europe and Russia. Sales in the Far East, Australia and the Americas were also higher, while the Middle East and Africa saw revenue declines.

The Maritime Cranes division achieved revenues of €733 million - a fall of 10.2 percent on the year.

At the end of the year Liebherr has increased employment to 43,869 employees worldwide, capital investment remaining at almost the same levels of 2016 at €749 million. The money was spent on new facilities in Aurangabad, India, Rognac in the south of France and in the Kuzbass region in Russia. While facilities in southern Biberach, Ochsenhausen and Oberopfingen in southern Germany were all expanded.

Vertikal Comment

Liebherr is like a big bulldozer, it just moves forward at a steady pace, almost regardless of what the market does around it. It is good to see a company where the operating profit is almost the same as the pre-tax profits, the company earns almost as much interest as it pays.

Its position in the mobile crane market makes further growth challenging, but holding its position is tougher still. It needs to be paying attention at what Kato is doing with its small city type cranes, but it will take a lot of these units to replace falling demand for the largest All Terrains.

It has a good deal of room for growth in the smaller crawler crane market but has tremendously strong competition in the form of Kobelco and other Japanese producers. The company has a good number of geographic areas where it could be stronger and it is interesting to note that it has made some significant progress in Japan this year.

Regardless of the challenges the company will surely break through the €10 billion revenue barrier this year and possibly come close to exceeding €3 billion of mobile and tower crane sales although the weaker dollar will cause some difficulties, especially for its new Rough Terrain product line. It was hoping that sales of these models would replace falling sales of big All Terrains, but that looks to be some way off yet.

Interesting times.