Investment philosophy

Investment report May 2025 - View into the portfolio

Jungheinrich AG
 

With a fund weighting of 6.5%, Jungheinrich is our top 3 position. Because of the attractive valuation, the position was significantly increased at the beginning of the year; the stock was presented in detail in the January report. Now we would like to report on the next milestone, as strategy 2030+ with new medium-term targets was announced on 7 May. A noteworthy item in this context is that we have already experienced (and therefore are able to assess) several of these medium-term targets due to our active PF management. The Management Board of Jungheinrich has an excellent track record, and not just with regard to reaching targets. Accordingly, we are convinced that the new strategy 2030+ will also pay off. 

With this new strategy, Jungheinrich has released a clear timetable for sustainable and profitable growth. The main focus of the strategy is to increase sales revenues to EUR 10 billion by the year 2030, with an EBIT margin of 10 percent.

The company's primary focus in this context is international expansion, particularly in North America, which is supposed to become another large sales market in addition to Europe. Jungheinrich also aims to expand its presence in Asia. 

To this end, the product portfolio is also strategically enhanced at the same time: in addition to high-end solutions, the focus will also be on a new mid-tech segment, in an effort to better service cost-conscious customer groups. The strategic partnership with Chinese manufacturer EP Equipment plays a key role in this regard. The collaboration is supposed to ensure accelerated access to competitive products in the medium market segment, which had not been a focus for Jungheinrich previously. EP contributes cost-efficient vehicles and production capacities, while Jungheinrich provides its sales network and system competence.

The company also invests heavily in automation, robotics and digital solutions - segments that were strengthened with takeovers such as Magazino and Arculus (automated intralogistics solutions). Digitization and artificial intelligence continue to drive the optimization of internal processes, products and services. With this strategy, Jungheinrich underlines its claim to be a globally leading provider of integrated intralogistics solutions. It also means that strategy 2030+ provides investors with a clear vision of how the company wants to utilize and profitably enhance its strong market position in the coming years - while also offering an attractive valuation and significant growth potential. The implicit organic growth rate is supposed to be 11% p.a. in terms of sales revenues, and 15% p.a. in terms of the operating result. Acquisitions would also add to this effect.


Kind regards

Christoph Gebert (fund advisor)
Ehrke & Lübberstedt AG