"Our operating profit improved in 2017, but there is still potential for further improvement. "

Questions to Dr. h.c. Isolde Liebherr, Vice-Chairman of the administrative board of Liebherr-International AG, and Dr. h.c. Willi Liebherr, Chairman of the administrative board of Liebherr-International AG.

Ms Liebherr, Mr Liebherr, following a fall in sales in the 2016 financial year, in 2017 the Liebherr Group achieved a record turnover. To what do you attribute this success?

Willi Liebherr: What is most important to us is healthy growth, as we take a long-term view in planning and running our business. In 2017, we benefited from the favourable economic conditions in the various sectors, so most of our divisions managed to turn in a very strong performance. The extraction industry is a good example of this. Demand for mining equipment has picked up again dramatically. But we have also benefited from very favourable market conditions in the earthmoving sector, for example.

Isolde Liebherr: At the same time, we have reaped the first fruits of a number of development projects that had already been brought to the market. In addition, some divisions have significantly expanded their product ranges in recent years. We are now also profiting from this. Of course we are delighted about the new record level of sales. But as my brother has pointed out, the most important thing for us is that our company is basically set on a sound course.

Is Liebherr's divisional structure a model for success?

Isolde Liebherr: Our diversification is the main thing that makes us strong. Each division differs slightly, and the various markets and sectors in which we operate function differently. Generally speaking, the economic situation also varies somewhat from sector to sector. For this reason, our divisions develop at different rates: in some the pace of development is rapid, while in others it is more moderate.

Willi Liebherr: Each of our divisions has therefore drawn up its own strategy for its future course, which it pursues consistently. It is important to us that the focus is always on the future and that our group of companies as a whole enjoys healthy growth.

But to go back to 2017 again. The operating profit was also up on the previous year. How do you view this development?

Willi Liebherr: Our operating profit improved in 2017, but there is still potential for further improvement. However, long-term growth also requires continuous investment. We are therefore reinvesting almost all of our revenues back into our divisions. The resulting broad-based growth will in turn establish a sound basis for further improvement of the operating result.

What were your personal highlights of 2017 and how do you rate the performance of the individual divisions?

Willi Liebherr: For me, one milestone in 2017 was the delivery of around a hundred large engines to the US-based generator manufacturer Kohler. This family of engines is the most powerful in Liebherr's portfolio, the twelve-cylinder variant, which delivers up to 2,700 kW, being the smallest cylinder configuration in this series. But this is just the beginning, and even more powerful units will soon follow in the shape of the 16- and 20-cylinder engines. A highlight in the aerospace sector was of course the maiden flight of a primary flight control component in an Airbus A380 which we manufactured using 3D-printing technology. For many years now, we have also been making use of our aerospace expertise in transportation systems. Our environmentally friendly air-cycle air-conditioning system has already been successfully tested in a Deutsche Bahn ICE on behalf of the German Federal Environment Agency.

Isolde Liebherr: To stay with the subject of cooling. We are specialists in refrigeration and freezing, which present many areas of application. The Domestic Appliances division is continuing to perform well. We are currently focussing on opening up the Indian market. To gain access to the market, we have invested in a new plant in Aurangabad. Digitalisation remains a further focus in the domestic appliances sector. We always design our products with specific benefits for our customers in mind. In this way, current social megatrends, such as individualisation, are consistently factored into product development.

Ms Liebherr, how is the maritime cranes division performing?

Isolde Liebherr: The past year was definitely dominated by the HLC 295000 heavy lift offshore crane project, and this will continue to be the case in 2018. In order to be able to produce and load this and other cranes of similar dimensions, we are expanding the Rostock site to include one of the largest land-based heavy-duty cranes in the world. The new TCC 78000 portal crane has a maximum lifting capacity of 1,600 tonnes and will move on rails between the Liebherr-MCCtec Rostock GmbH factory site and the adjacent quay wall.

Liebherr manufactures most of its products in Europe, where production costs are higher than in other continents. Nonetheless, your approach is endorsed by your success. Why?

Willi Liebherr: Liebherr is a European company and we continue to generate most of our sales in this region. We are convinced that you must first be established on your home territory. But that does not mean that we focus exclusively on Europe. On the contrary: we have European roots, but have long taken a global approach to the way we plan and run our business. We are very well positioned right around the globe.

Which markets will be particularly important for you in the future?

Willi Liebherr: In addition to the traditionally important countries in Western Europe, important future markets will be first and foremost North America (USA and Canada), as well as the BRICS countries: Brazil, Russia, India, China and South Africa. In China, for example, we aim to combine our activities even more in the future. There is already a promising level of demand for products from our aerospace, machine tools and automation systems and components sectors and our mining program in China - and we need to build on this.

Ms Liebherr, where do you see further potential for growth?

Isolde Liebherr: As already mentioned, we have a strong focus on the Indian market, which holds enormous potential. Our range of household appliances is manufactured directly at the new site in Aurangabad, which gives us a major competitive advantage, as it avoids the need for expensive imports. However, India also holds an attraction for other divisions. In the USA, we have pooled the activities of almost all our divisions through the establishment of Liebherr USA, Co. as a central sales and service company.

The number of employees rose again last year to around 44,000, yet there is a shortage of skilled workers everywhere. How is Liebherr responding to this?

Willi Liebherr: Basically, our employees are our greatest asset, and we must treat them responsibly - that was how our father saw things and that is what we do, as does the third generation. The key factor for us in countering the shortage of skilled workers is our own in-company training. The dual training system is hugely important, because if we did not provide comprehensive training ourselves, we would have a major recruitment problem. So we train our own specialists and do everything in our power to attract people who will work passionately day in day out to improve our products for the benefit of our customers.

We have already talked about the future. How will the company develop in the years to come?

Isolde Liebherr: We will continue to strive for stable growth in the next few years, and we anticipate a moderate increase in sales in 2018. As already mentioned, we always have to take into account the different sectoral economic conditions under which our divisions operate, but in the future we will be able to reap the rewards of numerous projects and developments that we have long been investing in.

Two new representatives of the third generation, Johanna Platt and Philipp Liebherr, are now taking responsibility for the company. How difficult is it for you to hand over responsibility?

Isolde Liebherr: The transfer of responsibility is a long-term linear process and that is what we wanted and planned. After all, it would be a big mistake to believe that we are irreplaceable. I am happy and grateful that our children are gradually growing into their future tasks and that they have the skills required for this job. The third generation is already taking on much of the workload, so it is not difficult for us to transfer responsibility gradually to our children.

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