JCB show resilience as BRIC markets decline

18 May, 2015

Company continuing to invest heavily in all business areas despite sharp falls in emerging markets

JCB have reported underlying earnings in excess of £300 million for the fourth successive year, as improvements in western economies were eclipsed by sharp falls in developing construction equipment markets.

Earnings for 2014 on an EBITDA basis were £303 million (2013: £313 million), before one-off restructuring costs of £11 million (2013: nil). Sales turnover was £2.51 billion against £2.68 billion the previous year, and machine sales were 64,028 (2013: 66,227).

JCB chairman Lord Bamford said: ‘For different reasons, each of the ‘BRIC’ markets of Brazil, Russia, India and China were sharply down in 2014. However, the broad spread of our business enabled us to benefit from better conditions in North America, Western Europe and particularly the UK.’

The construction equipment market in Brazil dropped by 17% in 2014, Russia fell by 27%, India by almost 15% and China by 17%. Markets in the UK and North America grew by 30% and 13% respectively. JCB’s sales in North America grew by 23% – outpacing the market and making it a record year for the company in North America, which is now JCB’s third biggest market behind India and the UK.

Lord Bamford continued: ‘Global market uncertainty has continued into 2015, though our home market of the UK remains a rare bright spot. The need for infrastructure in much of the developing world remains acute and will eventually drive a resumption of growth. Our resilient performance in 2014 demonstrates we are well placed to capitalize on improving trends as they emerge.’

Since 2010, JCB have created 2,000 new jobs at their 11 UK plants, boosting employment levels to 6,000. Globally, the company now employs 12,500 people. JCB are currently investing in UK manufacturing by increasing production capacity at their World HQ in Rocester, Staffordshire.

The company also completed a 700,000 sq ft factory development in Jaipur, India, in 2014, costing £62 million, and construction of a new €25 million headquarters for JCB Germany is also under way. Lord Bamford added: ‘We continue to invest heavily in all areas of our business despite the difficult markets, and this is the best demonstration of our confidence in the future.’