DGAP-News: KION GROUP AG lays the foundations for a successful full year in the first six months of 2013 (news with additional features)
(firmenpresse) - DGAP-News: KION GROUP AG / Key word(s): Half Year Results
KION GROUP AG lays the foundations for a successful full year in the
first six months of 2013 (news with additional features)
14.08.2013 / 08:05
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- KION Group's revenue climbs to record level of approx. EUR2.234 billion
in the first six months
- Strong order intake in emerging markets which account for over a third of
all new truck orders
- First-half earnings up again, with EBIT[1] rising by 4.2 per cent year on
year to EUR200.4 million
- Profitability continues to rise; first half year EBIT[1] margin of 9.0
per cent
- Boost to capital structure following successful IPO
- Net income raised to EUR70.3 million
- Expansion in sales and services in fast-growing Turkish market
Wiesbaden, 14 August 2013 - In the first six months of 2013, KION GROUP AG
has laid the foundations for a successful full year and has maintained its
profitable growth trajectory. At the end of the half year, following its
successful flotation on 28 June 2013, the world's biggest specialist
supplier of industrial trucks and associated services achieved
record-breaking revenue, earnings and margins (adjusted for the sale of its
hydraulics business).
The Group's revenue rose steadily to a new record figure of around EUR2.234
billion in the first half of the year. Operating profit (EBIT[1]) was up by
4.2 per cent to its highest-ever level of EUR200.4 million, resulting in a
further improvement of 0.3 percentage points in the KION Group's EBIT[1]
margin, taking it to 9.0 per cent, the highest margin in the first half of
any year.
'Thanks to our excellent position in the emerging markets, KION GROUP AG
succeeded in achieving further profitable growth in the first half of the
year,' said Gordon Riske, CEO of the KION Group. 'We have laid the
foundations for maintaining our successful operating performance of recent
years. Our successful IPO and the strengthening of our capital base are
another key condition for pursuing our global expansion strategy even more
vigorously.'
Around 509,000 new trucks were sold globally in the first half of 2013,
which was up slightly (by 4 per cent) on the high level experienced in the
same period last year. Sales were primarily driven by the US as well as the
emerging markets of China, eastern Europe and Brazil which are crucial for
the KION Group. Meanwhile, demand from western Europe fell to around
132,600 units (down by 3 per cent), contrasting with a rise in demand in
China to around 126,900 units (up by 8 per cent). Unit sales in the eastern
European market rose to 28,600 (up by 5 per cent) while the number of
trucks sold in the Brazilian market increased to 12,500 (up by 44 per
cent). Around 89,800 units were sold in the US market (an increase of 11
per cent).
In this market environment, KION GROUP AG's order intake was boosted by
strong growth in the number of units ordered in the world's emerging
regions, which accounted for more than a third of new truck orders (34 per
cent). The Group benefited from its outstanding market position in the
emerging markets of eastern Europe, Brazil and China. In some of these
countries the KION Group experienced growth above the market average in the
first half of 2013. Despite the weaker level of demand in western Europe
owing to the economic situation, global orders for new trucks placed with
the KION Group totalled around 73,800, only just short of the high
prior-year level (H1 2012: 75,500). In terms of value, the order intake for
the first half of 2013 amounted to approx. EUR2.250 billion, which was 3.6
per cent lower than the first half of the previous year when the order
intake was unusually strong (adjusted for the sale of the hydraulics
business). Nevertheless, the total value of the order intake once more
outstripped revenue.
The KION Group's revenue for the first half of 2013 rose to around EUR2.234
billion, which was 0.7 per cent up on the prior-year when adjusted for the
sale of the hydraulics business. The revenue attributable to new trucks
remained at the same high level as in the first half of 2012. The KION
Group achieved an increase of 1.8 per cent in its service business, which
comprises aftersales business, services relating to used trucks and truck
rental as well as fleet management systems and solutions. Service business
continued to generate more than 40 per cent of total revenue.
In the first half of the year, the KION Group's earnings before interest
and tax (EBIT[1]) - adjusted for non-recurring items and for the sale of
the hydraulics business - rose by 4.2 per cent, from EUR192.3 million to
EUR200.4 million. Optimised cost structures and the ability to command
higher prices were two factors that contributed to this increase. The
EBIT[1] margin rose by 0.3 percentage points to 9.0 per cent in the first
six months of the year, although the KION Group had achieved a margin of
9.4 per cent in the second quarter, which was a new second-quarter record.
Net income increased to EUR70.3 million in the first half of the year, up
from EUR25.9 million in the same period of 2012. Besides an improved
adjusted EBIT, the main contributor to this positive trend were one-off tax
items. Pro forma earnings per share were EUR0.70, based on 98.9 million
shares per 30 June 2013.
The net cash provided by operating activities in the first half of 2013
amounted to EUR55.9 million (H1 2012: EUR68.7 million). Higher consulting
fees and higher tax payments were the principal reasons for the decline,
plus the fact that the cash flow for the same period in 2012 also included
the hydraulics business. The net cash used for investing activities in the
first half of 2013 amounted to EUR40.4 million (H1 2012: EUR60.6 million)
as a result of which there was free cash flow of EUR15.6 million (H1 2012:
EUR8.1 million).
Total R&D spending was EUR57.3 million in the first six months of 2013,
which was level with the same period in 2012 and equated to 2.6 per cent of
revenue.
The number of employees (including apprentices and trainees) had risen by
1.5 per cent, from 21,215 as at 31 December 2012 to 21,533 as at 30 June
2013.
Successful stock market flotation
KION GROUP AG's successful stock market flotation on 28 June 2013 marked a
new chapter in the company's history. A total of 17.2 million new shares
originating from a capital increase were placed at an issue price of
EUR24.00 per share and an additional 2.6 million shares from the stake held
by original shareholder Superlift Holding S.àr.l., Luxembourg, were placed
as an over-allotment. In two accompanying capital increases, Weichai Power
(Luxembourg) Holding S.àr.l., Luxembourg, acquired 13.7 million new shares
in the KION Group at a price of EUR24.00 per share and Superlift Holding
acquired 4.0 million shares at a price of EUR29.21 per share by
contributing a shareholder loan against equity. After deduction of bank
fees, the company received total cash proceeds of around EUR732.5 million
from the capital increases on 28 June and 2 July 2013. The three capital
increases produced additional equity totalling EUR859.9 million before
deduction of the transaction costs directly attributable to the IPO.
The funds received only upon completion of the IPO on 2 July 2013 reduced
KION Group's net financial debt to EUR1.0 billion, which meant that its net
financial leverage effectively halved to 1.4x adjusted EBITDA for the
previous twelve months.
Weichai Power (Luxembourg) Holding S.àr.l., Luxembourg, is a subsidiary of
Weichai Power Co. Ltd, China. The shareholders of Superlift Holding S.àr.l., Luxembourg, are investment funds that are advised by companies in The
Goldman Sachs Group, Inc. (Goldman Sachs) and companies advised by Kohlberg
Kravis Roberts&Co. L.P. (KKR) or associated with KKR.
After completion of all transactions, the share capital of KION GROUP AG
stood at EUR98.9 million, divided into 98.9 million no-par-value shares, of
which 17.7 per cent is in free float (including the final over-allotment at
the end of the stabilisation period). Weichai Power holds 30 per cent,
while 52.3 per cent is held by KKR and Goldman Sachs jointly via Superlift
Holding and by the KION Group's management.
Optimisation of funding structure
The IPO paved the way for further optimisation of the KION Group's funding
structure. In July 2013, the Group repaid all the existing long-term bank
loans totalling EUR1,080 million that related to funding for the
acquisition of the Group. The loans were repaid from the proceeds of the
IPO, the increased capital contributed by Weichai Power (Luxembourg)
Holding S.àr.l., Luxembourg, existing cash reserves and funds drawn down
under a new EUR995.0 million revolving loan facility. Further drawings
under this facility were used to repay EUR175.0 million of floating-rate
notes maturing in 2018. Following these steps and the contribution of the
shareholder loan against equity during the IPO, the Group's long-term
borrowing comprised secured senior notes for amounts of EUR325.0 million
(maturing in 2018) and EUR650.0 million (maturing in 2020). The latter were
placed in the market in February 2013. The combination of the new revolving
credit facility and cash balances provide the company with a substantial
liquidity headroom.
Rating upgrades
KION GROUP AG's improved capital structure is also reflected in its credit
rating, which Moody's Investor Services upgraded by three notches to Ba3 on
2 July 2013. This was based on a 'significant improvement' in its net
leverage following the successful IPO. On 5 July 2013, Standard&Poor's
raised KION's rating by two notches to BB- with a positive outlook.
Expansion of services, development and production in emerging markets
In view of its strong position in the emerging markets, KION GROUP AG is
also expanding its sales and services network. On 28 May 2013, it signed an
agreement to take a controlling interest in STILL dealer Arser??Makineleri Servis ve Ticaret A.?., laying the foundations for its future
operations in Turkey. When the agreement finally comes into effect after it
has been reviewed and approved by the competent authorities - expected to
be in the third quarter of 2013 - STILL will own 51 per cent of the shares
in Arser and Turkey's Arkas Group will own 49 per cent.
In March 2013, a new plant was also officially opened in Indaiatuba (São
Paulo), Brazil where the KION Group produces warehouse trucks, IC trucks
and electric forklift trucks for the rapidly growing South American
markets.
In the first half of 2013, the KION Group further expanded its research and
development capacity in China where 211 people were employed in R&D by
mid-year. This large R&D unit is developing a new series of products for
the value segment in China and other emerging markets.
Cooperation agreement with Konecranes
On 30 April 2013, the KION Group signed a cooperation agreement in the area
of container handling with Konecranes, a global market leader in the
lifting business. Since then, Konecranes has become a long-term supplier of
container handling equipment for Linde Material Handling's global
distribution network.
Outlook: rising demand and higher net income
The global market for industrial trucks gradually picked up in the first
half of 2013, growing by around 3.8 per cent. Accordingly, the KION Group
expects to see a slight recovery in demand for 2013 as a whole, compared
with 2012.
The KION Group essentially reaffirms the forecasts made in the 2012 group
management report. Nevertheless, economic and sectoral conditions have
become more challenging. Given cost-related measures, this is not expected
to have any significant impact on the financial position or financial
performance of the KION Group. Provided the macroeconomic environment
performs as expected and does not significantly weaken in the second half
of the year, the KION Group's objectives of moderate rises in revenue and
adjusted EBIT (both excluding the hydraulics business) will remain
unchanged.
Besides new truck sales, the service business is expected to contribute to
revenue growth. For 2013 as a whole, the service business is expected to
contribute over 40 per cent of revenue, which is slightly more than was
forecast at the end of 2012. The emerging markets are expected to make a
significant contribution to revenue growth. The reduction in borrowings
should also be reflected in a rise in net income. In departure from the
forecast for a positive net income at the end of 2012, the KION Group now
expects net income to be significantly higher, partly due to one-off tax
items arising from the capitalisation of deferred taxes.
[1] EBIT adjusted for KION acquisition items and non-recurring items; key
figures for 2012 have also been adjusted to reflect the sale of the
hydraulics business
About KION Group
The KION Group - comprising the six brands Linde, STILL, Fenwick, OM STILL,
Baoli and Voltas - is the largest manufacturer of industrial trucks in
Western and Eastern Europe, the global number two in the industry and the
leading non-domestic supplier in China. The 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 a market
leader in India. The KION Group employed more than 21,000 people and
generated revenue of EUR4.73 billion in 2012. KION Group is present in more
than 100 countries and has a global market share of around 15 percent.
Disclaimer
This document and the information contained herein are for information
purposes only and do not constitute a prospectus or an offer to sell or a
solicitation of an offer to buy any securities in the United States or in
any other jurisdiction.
This release contains forward-looking statements that are subject to
various risks and
uncertainties. Future results could differ materially from those described
in these forward-looking statements due to certain factors, e.g. changes in
business, economic and competitive conditions, regulatory reforms, results
of technical studies, foreign exchange rate fluctuations, uncertainties in
litigation or investigative proceedings, and the availability of financing.
We do not undertake any responsibility to update the forward-looking
statements in this release.
Further information for the media
Michael Hauger
Head of Corporate Communications
Tel.: +49 (0) 611.770-655
michael.hauger(at)kiongroup.com
Frank Brandmaier
Head of Corporate Media Relations
Tel.: +49 (0) 611.770-752
frank.brandmaier(at)kiongroup.com
Further information for investors
Frank Herzog
Head of Corporate Finance
Tel.: +49 (0) 611.770-303
frank.herzog(at)kiongroup.com
Silke Glitza
Head of Investor Relations&M&A
Tel.: +49 (0) 611.770-450
silke glitza(at)kiongroup.com
End of Corporate News
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Additional features:
Document: http://n.equitystory.com/c/fncls.ssp?u=ERWTSBKWYB
Document title: KION GROUP AG lays foundations for full year
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14.08.2013 Dissemination of a Corporate News, transmitted by DGAP - a
company of EQS Group AG.
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Language: English
Company: KION GROUP AG
Abraham-Lincoln-Str. 21
65189 Wiesbaden
Germany
Phone: +49 (0)611 770-0
Fax: +49 (0)611 770-690
E-mail: info(at)kiongroup.com
Internet: www.kiongroup.com
ISIN: DE000KGX8881
WKN: KGX888
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart
End of News DGAP News-Service
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