In the first half of 2020, the Liebherr Group achieved a turnover of more than 4.9 billion euros, 13.5% below the revenue level of the previous year. Overall, the area of Construction Machines and Mining recorded smaller drops than the other product areas of the Liebherr Group. Within Construction Machines and Mining, the Tower Cranes and Earthmoving divisions were more affected than the Mining, Mobile Cranes and Concrete Technology divisions, where the revenues only fell moderately.
The performance of the company across the regions differed greatly. There was a significant reduction in turnover in Central and South America, followed by Europe and North America. However, Liebherr was able to maintain its sales level in Africa and the Near and Middle East, and even achieve growth in Asia and Oceania. As the regional differences show, the sales performances in the first half of the year can mainly be traced back to the effects of the COVID-19 pandemic, which restricted business operations in numerous markets worldwide.
Despite the effects of the pandemic on the business, the Liebherr Group maintained its level of employment. As of June 30, 2020, Liebherr employed a total of 47,991 employees.
Improved Demand in Third Quarter
On the whole, demand improved in the third quarter of 2020 compared with the second quarter, even though it did not reach the level of the previous year. Both the incoming orders and orders on hand of the Liebherr Group give reason to be confident. There had been no significant numbers of cancellations of construction machines and mining equipment in spring and summer, and the order situation for construction machines is currently steady in the majority of the product segments. For example, the demand for wheel loaders remains constant, even increasing in the segment of small wheel loaders. There is also strong interest in the 8th generation of Liebherr crawler excavators.
In contrast, some product segments for medium-sized and large machines, including crawler tractors have yet to gain momentum. This also applies to material handling technology. Particularly in the scrap handling segment, sales haven’t met the level of 2020. While the market demand for Concrete Technology has achieved a lower level than the previous year, the interest from customers in tower cranes has stabilized again.
The new LTM 1150-5.3 has a 66-meter telescopic boom.
In the Mobile Crane market, there is currently a strong demand for large machines. Conversely, customers are more reluctant or cautious with regard to medium-sized telescopic mobile cranes. For crawler cranes up to 300 tonnes, the incoming orders are steady and are at the level of the previous year. The same applies to special deep foundation machines.
In the area of mining, mine operators are currently investing less in new machines than in the previous year. However, Liebherr was able to increase its market share for mining excavators in a declining overall market. Business with spare parts is steady.
Service and Technological Advances in Response to Pandemic
Even at the peak of the pandemic, work continued on construction sites in most countries. Liebherr maintained close contact with its customers and provided the usual fast and reliable service. Furthermore, the company continued its work on innovative products and technologies. For instance, in the first half of the year, the company presented numerous new products for the construction and mining industry. Further product presentations are planned for the second half of the year.
Some of the new products include the telescopic wheel loader L 509 Tele, as well as the new wheel loader models L 526, L 538, L 546. With the R 940 Demolition, the Earthmoving division launched a new crawler excavator at the end of September. Furthermore, the TA 230 Litronic articulated dump truck celebrated its product launch at the end of October. In addition, the division announced the start of a strategic partnership with Leica Geosystems and now provides 2D and 3D machine control systems for their mobile and crawler excavators of the 6th and 8th generations in-house.
A new Liebherr crawler excavator for 2020 is the R 940 Demolition, which replaces the R 944 C.
Decline in Sales Expected
Following three fast-growing years in succession and a record turnover of 11.75 billion euros in 2019, the Liebherr Group is currently expecting a decline in sales of between 10% and 15% for the current business year. However, this forecast is conditional due to the uncertainties surrounding the COVID-19 pandemic. The Group is prepared for the current situation with declining sales figures regardless of the effects of the pandemic, as a slight slowdown of the longstanding economic growth had become apparent, which likely would have led to a slight reduction in turnover anyway.
Some of the strengths of Liebherr include its financial independence, the decentralized corporate structure and the broad diversification by countries and markets. This ensures a high degree of autonomy in decision-making and freedom of action and makes the Liebherr Group less sensitive to economic fluctuations, andable to quickly adapt to changes in demand and set trends.
