Emerging markets becoming increasingly important for KION Group
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KION GROUP GmbH /
Emerging markets becoming increasingly important for KION Group
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* Order intake in the first nine months of 2011 rises by roughly a quarter to
?3.5 billion
* Revenue compared with the corresponding period of 2010 grows by 27 per cent
to ?3.2 billion
* EBIT[1] margin reaches 8.2 per cent in the first nine months of 2011
* KION Group supplies almost 30 per cent of its new trucks to emerging markets
Wiesbaden, 14 November 2011 - The KION Group, one of the two leading global
manufacturers of forklift trucks and warehouse technology, successfully
continued its globalisation strategy in the third quarter of 2011 by increasing
its order intake and generating profitable revenue growth. Three out of every
ten trucks supplied by the KION Group in the first nine months of 2011 went to
customers in emerging markets.
Global demand for industrial trucks grew considerably in the first three
quarters of 2011. As expected, the pace of growth slowed in the third quarter of
2011. Global demand had risen to 740,000 units as of 30 September 2011, which
equates to an increase of 28 per cent compared with the corresponding period of
2010.
Demand in Western Europe grew by 32 per cent, mainly driven by replacement
investment. Western Europe therefore remained the largest individual market for
material handling products worldwide, with demand totalling 212,000 units.
The Chinese market for industrial trucks grew by 27 per cent in the first nine
months of 2011 - largely on the back of expansion investment - and generated
total demand of almost 190,000 units, which made it the second-largest single
market after Western Europe. One quarter of industrial trucks worldwide are now
sold to China.
The Eastern European market continued to stage a strong recovery, growing by 46
per cent compared with the first three quarters of 2010 to approximately 41,000
units. Almost half of the total demand generated in Eastern Europe comes from
Russia.
In this market environment the KION Group raised the total value of its order
intake in the first three quarters of 2011 to ?3.464 billion, which represents
an increase of 24 per cent on the corresponding period of 2010 (?2.795 billion).
The KION Group's order backlog had grown to more than ?1 billion as of 30
September 2011. Order intake for new trucks climbed by 22 per cent from 88,200
units to 107,800 units.
Revenue advanced by 27 per cent year on year to ?3.157 billion (Q1-Q3 2010:
?2.492 billion). Revenue from business in new trucks grew by 40 per cent
compared with the corresponding period of 2010. More than 40 per cent of the
revenue generated in the first nine months of the current year stemmed from
service business, which comprises aftersales as well as services relating to
used and rental trucks.
The KION Group's earnings before interest and tax (EBIT[1]) - adjusted for non-
recurring items - rose from ?77 million in the first three quarters of 2010 to
?260 million in the same period of 2011. This equates to an EBIT[1] margin of
8.2 per cent.
Cash flow from operating activities more than doubled year on year to ?146
million (Q1-Q3 2010: ?66 million). The net cash used for investing activities
(including acquisitions) amounted to ?96 million (Q1-Q3 2010: ?67 million).
Consequently, free cash flow came to ?50 million (Q1-Q3 2010: minus ?1 million).
The number of employees (including apprentices and trainees) rose by 8.5 per
cent to 21,536 as of 30 September 2011 (as of 30 September 2010: 19,845 people).
This figure includes 494 employees from first-time consolidations.
KION Group strengthens its presence in emerging markets
The KION Group is constantly broadening its offering in the emerging markets -
of which Brazil, Russia, India and China are the most significant - and is
continually expanding its sales and service network as well as its local
production facilities in these regions. In the first nine months of 2011 almost
30 per cent of the new truck orders (in units) placed with the KION Group were
from customers in emerging markets.
The KION Group has been operating in China for almost two decades with its own
Linde-branded production plant and an extensive sales and service network, and
it is now the leading international supplier. Since 2010 this position has been
reinforced by KION's local Baoli brand, which also serves economy segment
markets outside China.
The KION Group has gained access to the rapidly growing Indian market by
establishing Voltas Material Handling Private Limited, an India-based joint
venture that develops, manufactures, sells and services forklift trucks and
warehouse technology. Voltas is one of the two local market leaders and
maintains its own production facilities as well as a nationwide sales and
service network.
In São Paulo, Brazil, the KION Group is setting up a plant for manufacturing IC
trucks. Production in São Paulo is scheduled to start in 2012. The existing
Brazilian plant in Rio de Janeiro manufactures warehouse technology for KION's
STILL and Linde brands.
The KION Group also continues to enhance the position occupied by its two
premium brands - Linde and STILL - in Russia. STILL has further strengthened its
Russian market presence by opening an additional branch in St. Petersburg. In
September the Linde brand announced plans to acquire the businesses of its
longstanding dealer partner Liftec in Russia, Ukraine and Kazakhstan. This will
provide Linde with even better direct access to the growth potential of these
major eastern European emerging markets. With more than 18,000 new trucks sold
in the first nine months of 2011, Russia is the fifth-largest market for
industrial trucks in Europe.
Outlook: previous earnings margins realistic
The KION Group is confident that it will be able to bring 2011 to a successful
conclusion by generating substantial year-on-year revenue and earnings growth
amid market conditions that are still clearly marked by the effects of recovery
following the crisis of 2009/2010. Although revenue for 2011 is likely to be
well below its pre-crisis level of 2008, the KION Group already expects to
return to its previous EBIT[1] margins this year.
Market growth will probably continue to slow over the coming months. One reason
for this is that in the meantime the comparative figures for the corresponding
periods of last year are now very strong. Another is that the threats to global
economic growth are still on the increase. The sovereign debt crisis has heavily
impacted global financial markets and is showing the first tangible signs of
affecting the real economy.
Industrial trucks form the backbone of the global logistics industry and will
remain a highly attractive growth market over the long term. By rapidly
expanding its business in emerging markets, the KION Group is well placed to
benefit from future market trends and developments. Moreover, its plans to
optimise the structure of its production facilities in Europe will support the
long-term competitiveness of its trucks.
[1] EBIT and EBITDA adjusted for non-recurring items prior to purchase price
allocation (PPA)
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 is Italy's market leader. The
Baoli brand focuses on the economy segment, and Voltas is one of the two market
leaders in India. In 2010 the KION Group employed around 20,000 people and
generated revenue of more than ?3.5 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
--- End of Message ---
KION GROUP GmbH
Abraham-Lincoln-Strasse 21 Wiesbaden Germany
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