In 2017, Liebherr achieved the highest turnover in the Group’s history, of €9,845 million. Compared to the previous year, this represents an increase of €836 million or 9.3 %.
In 2017, global economic growth stood at 3.7 % and was thus only slightly above the previous year’s level. The economy in the industrialised countries recovered and, at 2.2 %, growth returned to the 2015 level. In the newly industrialised and developing countries, the economy grew more dynamically than in the previous year, at 4.6 %. With a few exceptions, the global economy experienced a boom in 2017. This is expected to continue into the first half of 2018.
There were marked differences in sales performance between the various regions. In Western Europe, Liebherr’s most important sales region, turnover increased significantly. This was due in part to renewed growth in Germany, Liebherr’s largest market, as well as to upward trends in France. In the UK, turnover remained at the previous year’s level.
Sales performance in Eastern Europe, particularly in Russia, was encouraging. In Poland, by contrast, a decline in turnover was recorded. In the Far East / Australia and America, revenues were also above the previous year’s level. The Near and Middle East and Africa, however, recorded a fall.
In the construction machinery and mining segments, as well as in other product areas, Liebherr recorded an increase in turnover. Sales of construction machinery and mining equipment rose by €782 million or 14.5 % to €6,182 million. This figure includes sales by the Earthmoving, Mobile Cranes, Tower Cranes, Concrete Technology and Mining divisions. In the Maritime Cranes, Aerospace and Transportation Systems, Machine Tools and Automation Systems, Domestic Appliances and Components and Hotels divisions overall turnover was up by €54 million or 1.5 %, to €3,663 million.
In 2017, the Liebherr Group achieved a net result for the year of €331 million. Compared to the previous year, this represented an increase of €33 million or 11.1 %. In the reporting year, there was a significant improvement in the operating result. Following the positive effects of currency movements in the previous year, the financial result, on the other hand, fell sharply.
The qualifications, enthusiasm and commitment of the Group‘s employees make a key contribution to its business success. Liebherr‘s long-term commitment to its employees is in keeping with its tradition as a family-owned company.
2017 saw a further increase in the workforce. The Liebherr Group had 43,869 employees worldwide. This represents an increase on the previous year of 1,561 or 3.7 %. While the number of employees in Liebherr companies in Europe, America and the Far East / Australia rose, in Africa and the Middle East there was a fall in the size of the workforce.
Various employer branding measures were implemented worldwide in the reporting year, in order to further strengthen the Group‘s employer brand. Basic and advanced training is of vital importance to the Group. Considerable sums were therefore invested in training during the reporting year.
The Group aspires to generate sustainable value for its employees, customers and suppliers and for society as a whole. As an independent family company with a longterm focus, Liebherr is aware of its responsibilities and is committed to sustainable development. Its products, processes and infrastructure are geared to the minimum possible consumption of resources. The focus in all areas is on safety, efficiency and environmental sustainability. Last year, a large number of the Group’s companies worked on projects looking at social, environmental and economic aspects of sustainability.
As a high-tech company, Liebherr pursues the goal of making a decisive contribution to shaping technological progress in sectors relevant to the Group. Liebherr invested €558 million in research and development last year. The bulk of this was used in the development of new products. A large number of joint research projects with universities, other higher education institutions and research institutes were initiated and continued. For example, last year Liebherr Hausgeräte GmbH was awarded the “European Innovation Impact Award“ in the “Best Innovation Management“ category for this strategic integration of innovation.
Important issues across the wide range of products and services include, as they have done for many years, increasing energy efficiency, networking, automation and lightweight product design. The first field tests of soLITE® high-strength fibre rope began in 2016. Compared with steel ropes, the high-strength fibre rope is not only lighter, but also more durable. This new rope technology will probably be launched onto the market at Bauma 2019. In the aviation field, Liebherr is conducting research into fully electric components for the aircraft of the future. The first system demonstrators for fully electric air-conditioning and de-icing systems were developed in 2017.
Another important project was the development of the HLC 295000 heavy-lift crane. This heavy-lift crane, with a load capacity of 5,000 tonnes and a maximum lifting height of more than 170 m, will be the largest crane Liebherr has ever developed. It is intended for use in the installation of wind farms, in the decommissioning of offshore installations and in the oil and gas sector.
The Group has traditionally emphasised the importance of making regular investments in its production facilities and its global distribution and service networks. Last year, the Group invested €749 million, a slight decrease of 0.3 %. Offset against this was depreciation of €485 million.
Liebherr is entering the promising Indian market, with a new production facility for refrigeration equipment in Aurangabad. The new plant is to produce refrigeration equipment specifically tailored to meet the requirements of this region.
Further substantial investments have been made in expanding additional sites in Germany. A new components plant in Oberopfingen has doubled Liebherr‘s production capacity for hydraulic cylinders, dampers and system solutions. Work started on the construction of a training and exhibition building in Ochsenhausen. From spring 2019, customers will be able to experience live demonstrations of numerous domestic appliances at the 350 m² site. In Biberach, preparations are underway for the construction of 3,400 m² hall for surface coating antifriction bearings.
Liebherr invested in the sales and service organisations in various sales regions. A new repair and service centre in the Kuzbass region provides reliable customer service even in this remote area of Siberia. Liebherr opened a new sales and service subsidiary in Rognac, in the south of France. Liebherr has also made further investments in its rental fleet. This chiefly comprises machines manufactured by Liebherr and used by customers under shortterm to long-term leasing agreements.
In order to ensure the sustainable success of the Group, opportunities and risks are identified at an early stage to be evaluated and controlled. The Group has a continually-optimised risk management procedure in place, and an internal control system to help it meet operational, market-related and legal requirements.
To ensure the integrated recording, analysis and evaluation of risks, all managers responsible for the risk management and internal control systems used in the individual Group companies are involved. Risks are identified and assessed locally in the individual companies, then countermeasures to limit the risks are introduced and the impacts are evaluated.
This localised approach also makes it possible to identify and assess areas of opportunity efficiently. The information gained about market-related and technological developments is used in opportunities management to reach decisions about future areas of business and production processes.
At the corporate level, the current risk situation is regularly reviewed and the effectiveness of the systems and processes used is assessed. The internal audit department monitors compliance with Group guidelines and the implementation of the risk management and internal control systems.
Events of particular significance which occur after the reporting date should be recorded here, together with their expected impact on the Group’s assets, financial position and earnings. The Liebherr Group had no such events to report after the end of the 2017 business year.
The International Monetary Fund predicts global economic growth of 3.9 % for 2018 and thus expects it to be similar to the previous year’s level. For newly industrialized and developing countries, growth of 4.9 % is forecast. In particular, Brazil is expected to continue its recovery, while a slight slowdown in the growth rate is forecast for China and Russia. According to forecasts, growth in the industrialized countries will remain at the previous year’s level of 2.3 %.
After a very strong year, the World Trade Organization is forecasting a moderate decline in trade growth in 2018, from 3.6 % to 3.2 %. By contrast, the positive trend in the construction sector is set to continue. The construction industry is expected to continue to grow both in Germany and in other European countries. The International Air Transport Association (IATA) anticipates another strong year for the aviation industry.
According to World Bank forecasts, moderate price increases are expected in 2018 for energy-based commodities (+ 4.0 %) and non-energy-based commodities (+ 1.0 %).
In order to illustrate the individual opportunities and risks, similar types of risks and opportunities have been grouped together.
Macroeconomic opportunities will arise in particular from the continued buoyancy of the global economy, positive expectations for GDP growth in the eurozone and the expected increase in investment in Germany. The situation in the Middle East, the increasingly protectionist US trade policy and the UK’s announcement that it is to leave the European Union are creating geopolitical uncertainties. In addition, the global economy is already in the ninth year of its longest growth phase since the Second World War. It is impossible to predict how long this phase will last.
The sections on each of the divisions contain reports on the opportunities and risks relevant to that division. Specific cost changes due to increasing macroeconomic uncertainty or cyclical factors which cannot be directly passed on through contractual price indexation may pose risks that affect the Group’s performance.
Operational business harbours market price risks, in particular due to exchange rate and interest rate fluctuations. Liebherr monitors these risks continuously and uses appropriate financial instruments to hedge selected transactions. The Group enters into financial transactions only where these are linked to its operational business activity or are for hedging purposes. On principle, Liebherr does not conduct transactions of a speculative nature.
The global nature of our business activities, together with our broadly-diversified product base and the risk management system in the Group in place, ensure that the relevant risks are kept under control. Based on the currently available information, there are no further identifiable risks which could have a substantial detrimental effect on Liebherr’s assets, financial position and earnings in the 2018 business year and threaten the survival of the Group as a whole.
The Group expects a further increase in turnover for 2018. Liebherr anticipates growth in the construction machinery and mining segment, as well as in the other product areas. Appreciable gains are forecast in the Mining, Concrete Technology, Machine Tools, Automation Systems and Earthmoving divisions. This is clear from the order book for 2018, which is already looking very good.
The Liebherr Group will also continue to invest substantially in its international production facilities and in its distribution and service network. The number of people employed by Liebherr companies will again rise slightly.