How we move forward from here.

PALFINGER operates in a highly complex environment. It was and still is impressive to see how broadly PALFINGER is positioned, which applies to products and regional customer requirements alike. But all of this has to be managed with precision. I am also enthusiastic about the team, the family spirit in the Company, and the skills and expertise of the employees. I was highly impressed by the growth of the past years: PALFINGER has really grown very quickly from an export-oriented company to a global player.

After this growth spurt, we now need a phase of consolidation to leverage synergies in research and development as well as in production. From the close, coordinated networking of the individual areas of the PALFINGER Group, we will form a powerful Group that can react flexibly and efficiently and also with agility to market and customer requirements. I see the new organization as a basis for new growth, but also as a proactive preparation for the expected economic slowdown and volatile markets.

Therefore, the immediate development and implementation of the GLOBAL PALFINGER ORGANIZATION (GPO) was the dominant topic of the first months: After a successful kick-off in mid-September, the new organization came into effect at the beginning of 2019. This transformation was the biggest change at PALFINGER in the past twenty years. The new organizational structure was designed by our managers as a team, not by an external consultant.

Our focus is on the regions and product groups. All functions are mapped in the new global structure and the goals are defined in the form of specific key figures. We analyse the achievement of objectives on a monthly basis and can therefore react quickly and flexibly to fluctuations or new customer requirements.

There is no doubt that economic growth will slow down again, but above all the volatility of individual markets will increase. The performance of the individual business areas within the regions will also be heterogeneous, a development we are already seeing in Europe.

At present, however, there is no downturn on the horizon. We continue to record growth in the markets that are important to us, namely Germany, North America and CIS. In South America, we expect new growth after the long crisis, and the joint venture in China is growing steadily. The oil price is also showing an upward trend – despite the decline in autumn – so that we definitely see a positive future for our marine business. We expect further organic growth for PALFINGER in the coming years.

Our customers expect more and more one-stop-shop solutions, that is to say, not only products, which are the hardware if you will, but also software and automation technology, including services. This confirms the digitalization path we have embarked on, where we see various important topics: the first is communication with dealers and customers, or, in other words, customer relationship management; the second is service, that is, which tools are integrated into solutions, especially for predictive maintenance; and the third has to do with product innovations: how we can use data to become more efficient in research and development.

We will use data primarily for the benefit of our customers and will not make a business model out of the product data gained. We are striving for an open system that allows customers to access and use their data for their own purposes.

Our biggest challenge on the product side in the short term is to design the interface between truck manufacturers and our products in such a way that customers can work with a uniform data flow, with only one monitor. We will coordinate with truck manufacturers to ensure the greatest extent of uniformity in interfaces. Our marine business is mainly positioned in the deck equipment segment, where in my opinion there is still potential for growth.

PALFINGER’s greatest strength is clearly innovation coupled with reliability. We will improve our development speed; the time to market has to become shorter. And we will do a better job of marketing our USP, which is to say highlighting the benefits and advantages for our customers even more strongly than in the past. I would like us to communicate this more loudly and clearly. The new GLOBAL PALFINGER ORGANIZATION is also helping us to be even closer to the markets in order to create more benefits for our customers. And it will make us more efficient, especially in planning and controlling sales to make our products available to our customers in the fastest and best manner possible. 

Other strengths are our excellent product portfolio in the field of lifting solutions and, of course, our global product and production footprint. Another thing that distinguishes us from our competitors is PALFINGER’s extraordinary team spirit.

What first comes to my mind is the enhancement of the ability to deliver our products against the backdrop of volatile markets. Then there are apps and other applications we are developing. Through the use of software, we are becoming more of a service provider for lifting solutions. Automation, which makes the operation of our products easier, will play an important role because of the increasing lack of skilled workers. Assistance systems and similar solutions will therefore become more important.

On the market side, we also reckon with stable demand from the construction industry, as well as logistics and recycling in the future. I am sure that we will also generate revenue from additional digital business areas.

With our new structure, we can react more quickly to regional customer requirements and at the same time achieve internal savings through higher efficiency, in other words, we can improve our profitability. For many product groups, there is also potential to gain additional market shares. In the case of investments, the focus will be on servicing and renewing production facilities. 

The SEA segment is currently still undergoing restructuring. After this process has been completed, we will also integrate this business into the new organizational structure. I also expect a significant improvement from this.

We established PALFINGER 21st at the end of 2017. PALFINGER 21st is a separate unit, which allows us to come up with brand-new ideas and approaches independent from our structures. Cooperation and open innovation are important strategies in this context. The Vienna development hub at the start-up centre weXelerate and our participation in hackathons promote exchange with technology partners. PALFINGER 21st will not just generate additional revenue through the development of new business models but will also maintain and further expand our competitiveness.

For the next twelve to 18 months we will focus on integration and the resulting potential to increase profitability and optimize organic growth. Our greatest priorities are cooperation and partnerships. Future growth will increasingly come from the use of new features and services, whose technology we do not necessarily have to own in order to be successful in the market.

Our goal is to increase revenue to approximately 2 billion euros through organic growth by 2022. I expect the EBIT margin to have risen to 10 per cent on average over the economic cycle by then. Similarly, the return on capital employed over the economic cycle should be 10 per cent on average.

All of this is to be based on sustainable successful growth, which is why sustainability plays a central role in our business model. As a matter of principle, all employees must contribute towards daily value creation.