JCB Reports Most Successful Year Yet

John Patterson

June 9, 2008 • The JCB Group attained record pre-tax profits of $374 million on worldwide revenue of $4.5 billion in 2007, making it the most successful year in company history. JCB reported sales of more than 72,000 machines last year. However, the company officials caution that the impact of the credit crunch, combined with rapidly rising commodity prices specifically that of oil and steel, will pose an economic challenge for 2008.

“2007 saw JCB make great progress,” said John Patterson, chairman and CEO of JCB Inc. “It was our best year ever. The outlook for the remainder of 2008 does look challenging, but I believe we are well positioned to adapt to these difficult conditions.”

JCB's 2007 pre-tax profits were 25 percent higher than the $298 million recorded in 2006. Sales rose by nearly 30 percent above the $3.5 billion achieved in 2006. Machine sales soared to record levels reaching 72,000 units, well above the 2006 peak of 55,000 units.

The company attributed most of its business growth to activity in emerging markets, particularly India, Poland, Russia, Bulgaria and South America. New machines and new product ranges accounted for fully 50 percent of sales growth.

JCB's share of the world construction equipment market increased from 10.4 percent in 2006 to 12 percent last year. The company retained its position as the third-largest manufacturer of construction equipment by volume. JCB also holds the distinction of being the largest privately owned construction-equipment manufacturer in the world.

Patterson said trading conditions throughout 2008 will continue to be difficult because of the credit crunch. He added that there are signs that the downturn in the North American market is now spreading to some Western European and other markets.

JCB also announced that Patterson has decided to step down as worldwide CEO to become chairman and CEO of JCB Inc. He will concentrate on developing the business in North America, the world's largest market for construction equipment. Matthew Taylor, JCB's chief operating officer, will succeed him as CEO.

Patterson joined JCB in 1971 as a field service engineer and rose through the ranks to become chief executive in 1998. He was promoted to managing director and CEO in 2004. Under his leadership, JCB's worldwide business doubled over the past four years as the company opened new manufacturing facilities in the U.S., Brazil, India, China and Germany. It was the company's largest global expansion in its history.

JCB has also revealed aggressive plans to double its distribution network by 2010, as well as investing in a $30 million project to build a new customer support center to serve as both a parts distribution center as well as a training facility for its North American operations.

“This market poses some unique challenges in the face of the credit crunch and the weakening dollar,” Patterson said. “However, it continues to be the single largest market for construction equipment in the world. Some may say that JCB is the best-kept secret here in North America. I plan to change that.”