KION Group starts 2012 from a position of strength
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KION GROUP GmbH /
KION Group starts 2012 from a position of strength
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* Order intake increased by 21 per cent to ?4.7 billion
* Revenue grows by 24 per cent year on year to ?4.4 billion
* Operating performance improved: EBIT[1] margin rises further to 8.3 per cent
* KION's brand companies sell three out of every ten new trucks to emerging
markets
* Share of BRIC markets expanded further on the back of Voltas and Liftec
activities: order intake and revenue from BRIC countries doubled compared
with 2008
* Further consolidation of European production facilities
* Financial services separated at the beginning of 2012
* Bonds totalling ?500 million successfully placed with investors
Wiesbaden, 19 March 2012: The KION Group delivered a highly successful
performance in what was a benign market environment in 2011, raising its order
intake and revenue by more than 20 per cent year on year. By pursuing rigorous
cost management policies and constantly making structural improvements, the
Company more than doubled its EBIT[1] margin compared with 2010 to 8.3 per cent.
"Our global footprint and our successful multi-brand strategy, which provides a
perfect way of meeting highly diverse market requirements and customer needs,
have enabled us to benefit from the continued market growth both in western
Europe and in the emerging economies of Asia, eastern Europe and South America",
commented Gordon Riske, the Chief Executive Officer of the KION Group. "The
structural improvements that we have begun to make in recent years already
significantly enhanced our operating performance in 2011. We are starting 2012
from a position of strength."
The global market for industrial trucks exceeded previous all-time highs in
2011: demand for new trucks grew by 23 per cent to 977,000 units, which was
roughly 12 per cent more than in 2008. This upturn was essentially driven by two
factors: first, the continued robust economic growth achieved by the emerging
markets - especially in Asia, South America and eastern Europe - and, second,
the recovery of demand in western Europe and North America.
The country that generated the strongest demand was China, which accounted for
238,000 units. Boosted by considerable expansion investment in fleets of
industrial trucks, demand more than doubled compared with 2008. In western
Europe, which remains the world's largest market for material-handling products,
demand for new trucks grew by 26 per cent year on year to 278,000 units. This
region is therefore still some 7 per cent below the level it had reached in
2008. The eastern European market continued to stage an impressive recovery,
growing by 36 per cent year on year to approximately 54,000 units. The most
significant markets in eastern Europe are Russia, Poland and the Czech Republic.
In this market environment the KION Group raised the total value of its order
intake in 2011 to ?4.682 billion, which represents a year-on-year increase of
21 per cent (2010: ?3.860 billion). The KION Group's order book had grown to
approximately ?1 billion by 31 December 2011. Order intake for new trucks
climbed by 19 per cent from 121,500 units to 144,800 units. KION's brand
companies sold three out of every ten new trucks to emerging markets - two of
those three to the BRIC countries, which are the emerging economies with the
strongest demand for industrial trucks worldwide. By continuing to expand in
these fast-growing regions, the KION Group consolidated its position in the
global market for material-handling trucks: the importance of the BRIC
countries' markets in terms of both order intake and revenue has more or less
doubled in the past three years.
Revenue advanced by 24 per cent year on year to ?4.368 billion (2010: ?3.534
billion). More than 70 per cent of this revenue was generated outside Germany.
Revenue from business in new trucks grew by 33 per cent compared with 2010. KION
achieved an increase of almost 12 per cent in its service business, which
comprises aftersales business as well as services relating to used and rental
trucks. Service business, which is fairly non-cyclical, accounted for 42 per
cent of total revenue.
The KION Group's earnings before interest and tax (EBIT[1]), adjusted for non-
recurring items, rose from ?139 million in 2010 to ?365 million in 2011. This
equates to an EBIT[1] margin of 8.3 per cent.
Cash flow from operating activities grew sharply year on year to ?387 million
(2010: ?199 million). The net cash used for investing activities (including
acquisitions) amounted to ?153 million (2010: ?123 million); consequently, free
cash flow totalled ?234 million (2010: ?76 million).
Total research and development expenditure rose by 16 per cent to ?120 million,
which equates to 4.7 per cent of revenue from new business in trucks and
hydraulics. The fact that more than 125 new patent applications were filed is
proof positive of the KION Group's innovative capabilities.
The number of employees (including apprentices and trainees) rose by 9.5 per
cent to 21,862 as at 31 December 2011 (31 December 2010: 19,968 people). This
figure includes more than 600 employees acquired from first-time consolidations.
62 per cent of the Company's employees work at international locations across
27 countries.
Key milestones achieved in 2011
The KION Group continually expanded its product range and its presence in the
emerging markets last year. In São Paulo (Brazil) the Company began to build a
new plant that will start to produce counterbalance trucks in the second half of
2012. The recent acquisition of the Voltas brand has enabled the KION Group to
break into the rapidly growing market in India, where it is also currently
constructing a new production facility. The Company has been operating in China
for almost two decades with its own Linde-branded production plant and an
extensive sales and service network. The China-based Baoli brand, which was
acquired at the beginning of 2009 and whose products are positioned in the lower
price segment, is becoming increasingly active in export markets. In Russia and
Kazakhstan, Linde has integrated the business of Liftec, a dealer, into its own
network. STILL has strengthened its Russian market presence by opening an
additional branch in St. Petersburg.
KION is constantly optimising the structure of its business in western Europe as
well. It acquired the remaining shares in UK-based dealer Linde Sterling, which
is therefore now a wholly owned subsidiary. In order to improve the
competitiveness of its European production plants, KION has started the legal
process to transfer the manufacturing of warehouse trucks from Montataire
(France) to Luzzara (Italy) and to relocate production of counterbalance trucks
from Bari (Italy) to Hamburg (Germany).
KION consolidated its financial services activities in 2011 and organizationally
separated them at the beginning of 2012. Legally and organisationally
independent companies focusing on finance operations were launched in the five
core European markets of Germany, France, the United Kingdom, Italy and Spain at
the start of this year. This means that KION would be able to report its
industrial business and financial services separately in future, thereby further
improving transparency, efficiency and risk management in this key area of
activity.
KION Finance S.A. placed bonds totalling ?500 million with investors in April
2011. By issuing these bonds, which fall due in 2018, and using the proceeds
from their issuance to repay bank debt, the KION Group enhanced the maturity
profile of its financial liabilities and tapped the capital markets for the
first time, acquiring a new investor base in the process.
Outlook: further improvement in margins
The KION Group has started 2012 with the benefit of a significant order backlog.
Provided that no severe events have an adverse impact on either the global
industrial-truck markets or the Company itself, the KION Group is optimistic
that it will manage to achieve further modest year-on-year revenue growth. The
measures that it has started to implement - especially those aimed at increasing
capacity utilisation at its production plants - should further strengthen its
profitability.
The pace of growth in the industrial-truck market is likely to return to more
normal levels in 2012 owing to the higher prior-year figures that will then be
used in year-on-year comparisons. The sovereign debt crisis in public finances
continues to pose a risk to global macroeconomic trends and has had a visible
impact on the real economy in recent months, especially in western European
countries.
The market for industrial trucks, which form the backbone of the global
logistics industry, will retain its appeal over the long term. By expanding its
business in emerging markets, the KION Group is excellently placed to benefit
from future market trends and developments; and by optimising the structure of
its production facilities in Europe, it is laying the foundations underpinning
the long-term competitiveness of its trucks.
[1] EBIT and EBITDA adjusted for KION acquisition items and non-recurring items
The Company
The KION Group with its six brands - Linde, STILL, Fenwick, OM, Baoli and Voltas
- is Europe's market leader for industrial trucks, the global number two in the
industry and the leading international supplier in China. Its Linde and STILL
brands serve the premium segment worldwide. Fenwick is the largest supplier of
material-handling products in France, while OM/STILL is a market leader in
Italy. The Baoli brand focuses on the economy segment, and Voltas is one of the
two market leaders in India. In 2011 the KION Group employed around 22,000
people and generated revenue of around ?4.4 billion.
Disclaimer
This press release contains forward-looking statements involving known and
unknown risks, uncertainties and other factors, many of which are outside the
control of the KION Group ('KION'), are difficult to predict and may cause
future developments to differ significantly from assumed developments as
expressed or implied in the forward-looking statements in this press release.
Any liability (including in respect of direct, indirect or consequential loss or
damage) of any member of KION with a view to the information contained in this
press release is expressly disclaimed. This press release does not purport to
contain all of the information that may be required to evaluate any proposed
transaction, and any recipient hereof should seek its own legal, accounting and
other relevant professional advice.
No member of KION undertakes any obligation or expects to update or revise this
press release, including forward-looking statements or any other information
contained herein, whether as a result of new information, future events or
otherwise.
For further information please contact
Michael Hauger
Head of Corporate Communications
Tel.: +49 (0)611 770 655
Email: michael.hauger(at)kiongroup.com
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Source: KION GROUP GmbH via Thomson Reuters ONE
[HUG#1595258]
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