Gordon Riske and John Feldmann

An interview on the Dematic acquisition with Chief Executive Officer Gordon Riske and the Chairman of the Supervisory Board John Feldmann.

2017-03-01

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Gordon, what does the acquisition of Dematic mean for the KION Group?

GR: To put it quite simply: It is the beginning of a new era. It’s an exciting time for KION. From a customer’s viewpoint, markets are changing and more things are being delivered overnight and more quickly. Now you put together a company that has forklifts, autonomous vehicles and complete integrated distribution centers—and you offer this to the customer out of one hand, that’s a very unique business proposition that no other competitor has. It’s a very unique offering. And when you put all that together—30,000 people and almost 8 billion euro in revenue—it is also a company that has the strength to be able to deliver. Apart from the IPO we did in 2013, it is the most important thing that the company has done in the last ten years.

"Apart from the IPO we did in 2013, it is the most important thing that the company has done in the last ten years."


Gordon Riske

CEO of KION Group.

John, what’s your view of KION’s future?

JF: Just as Gordon said, there is a growing demand for optimized and reliable intralogistics solutions all over the world. With the acquisition of Dematic we have now put together the experience, the excellence and the know-how of KION and Dematic. The company is best positioned to be the preferred supplier of logistics solutions to companies in all industries in the world.


So there is great strategic rationale behind this acquisition?

GR: Absolutely, it makes a lot of sense. Both companies complement each other. On the product side, when you look at the strong position of Dematic in North America, the forklift business will profit from them. If you look at the KION brands strength in Europe, China or Brazil, Dematic will certainly profit from that.

Dematic is also operating a business that has been growing 12-15 percent or more per year in the last several years. So we also have a new growth story in front of us that both companies will profit from.

JF: What is most important is that within the company we grow our entrepreneurial spirit. That everybody agrees to use and utilize the opportunities and the know-how and the experience that is there—not only to serve customers and their current demands best but also to shape the future of intralogistics. And I think this is the opportunity that we have with this company.

"The company is best positioned to be the preferred supplier of logistics solutions to companies in all industries in the world."


John Feldmann

Chairman of the Supervisory Board

John, Dematic has seen a lot of changes during the past years. Now they have found a new home. What does that mean for Dematic?

JF: First of all: Change is a common theme, a “Leitmotiv“ as the Germans would say, for all successful companies. So change will continue. And I think this is good news. But Dematic has a long-term home at KION. We do not have an exit strategy. We are all committed to ensuring that it will continue to be a great place to work—and a home for innovation..


Gordon, how is the integration progressing?

GR: The integration is moving along very well. Both companies have a running business and a business plan. We touched on many areas where we can work together. Just one small example: In Brazil we put the operations together. Both companies have saved money and have a better story to tell the market. We have many customer programs working on the sales side to gain the benefits of the strengths of each of the companies in their particular regions. And also on the cost side, we now have a bigger opportunity on the procurement side. We are buying more. There are some similar suppliers.

The integration process is going very well. And if I think of the cultures and how the two companies work together, that’s always the best sign. It’s real simple. The people not only get along with each other, they actually like to be with each other.


There is obviously something in this acquisition for each and every stakeholder?

GR: Absolutely. If we do it right, and I am sure we will, we have the teams in place and everybody cares about what they’re doing, it really is a situation of two complementary businesses in a field of logistics/e-commerce that is growing market share around the world. So we have all the ingredients. And it’s just up to us to make it work, and, as you say, all the shareholders will profit from this acquisition.


And what were the reactions of the stakeholders when the acquisition was announced?

GR: Well first of all, if I look at the capital market, there was surprise. Why would KION do that? But, after a few days, that settled down and they understood the industrial logic behind it. The rating agency Fitch just recently gave us an investment grade rating. On the customer side, many customers are very excited that Dematic now has a long-term home that is not private equity. And for all of our customers, this ability to give a complete offering is very important. But I want to say that the most convincing part of this are the employees. When we were in Grand Rapids on closing day on November 1, 2016—1,300 people in four different town hall meetings—there was such excitement. People were clapping and cheering and were really glad to be part of the new era.

JF: What’s most important is that all of us understand that we have an opportunity—an enormous opportunity—to really shape the future of logistics. It is very exciting. Now we need build our entrepreneurial spirit so we can turn these opportunities into reality.