JCB profitable in 2009 and predicts significant improvement in 2010

[PRESS RELEASE]

JCB maintained profitability in 2009 despite the deepest ever recession in the global construction equipment industry. The company saw sales drop by a third to £1.35 billion but was able to increase profit before tax marginally to £29 million (2008 - £28m). In the face of a global market which fell by 46% in 2009 and with total sales of 36,000 machines, JCB increased its market share to an all-time high of 12.2% to reinforce its position as the world’s third largest construction equipment manufacturer. It improved its market-leading position in backhoe loaders, taking more than 40% of the global market, and it also attained world market leadership with its Loadall telescopic handler range with a 28% share. JCB Chairman Sir Anthony Bamford said: “2009 was hugely challenging for the construction equipment industry. The entire JCB organisation pulled together magnificently to respond decisively to the unprecedented downturn, which was particularly severe in the first half of the year. Tough action was taken to adjust our cost base to align it to a much reduced level of demand, and this resulted in an improving profit trend as the year progressed. We have created a strong platform for renewed profitable growth." JCB has now embarked on a £20 million investment in a new generation of its iconic backhoe loader, the machine with an excavator arm at the rear and shovel at the front. The first of the new eco-range of the British-built diggers rolled off the company’s Staffordshire production line in Union Jack colours and embarked on a tour of famous London landmarks to celebrate its launch and the company’s approaching 65th anniversary in October. The JCB 3CX Eco and JCB 4CX Eco backhoe models go into full production next month and will offer a machine which uses up to 16 per cent less fuel compared to its predecessor – saving customers using the digger for an average 1,250 hours a year more than £1,000 in fuel costs. Sir Anthony said: “Despite the economic difficulties, we continued to invest in new products, with 11 innovative machines launched so far this year including the most fuel efficient backhoe loader we’ve ever produced. JCB’s backhoe already leads the market on fuel efficiency and the new eco backhoe offers customers fuel savings of up to 16% compared to the outgoing model, setting a new standard in backhoe technology and placing us in a strong position to capitalise on improving market conditions. JCB began manufacturing its own engines in 2004 and in 2006 two of the JCB Dieselmax engines powered the JCB Dieselmax car to the world diesel landspeed record on the Salt Flats of Bonneville, USA. The company has now made a further huge investment to develop the off-highway sector's cleanest engine in readiness for incoming emissions legislation. Sir Anthony said: “Having invested a total of £80 million in developing the new JCB Dieselmax engine, JCB now has not only the cleanest engine in the off-highway sector, but one which offers fuel savings of up to 10%. As the engine is used in more than half of JCB’s products, this gives our machine customers a huge competitive advantage. These benefits also extend to other equipment suppliers who are now buying the JCB Dieselmax engine in increasing numbers to power their own products.” Sir Anthony also said that in the first half of 2010, the construction equipment industry has seen a “strong recovery” in emerging markets such as India, Brazil and China, although the traditional markets of Western Europe and North America remain weak. And he added: “On balance, we expect to see a significant improvement in both sales and profits this year compared to 2009”. http://www.jcb.com/PressCentre/NewsItem.aspx?ID=810

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JCB profitable in 2009 and predicts significant improvement in 2010

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