DGAP-News: KION Group's profitable growth continues in 2nd quarter of 2011

2011-08-12

KION Group's profitable growth continues in 2nd quarter of 2011

  • Order intake in first half of 2011 climbs by 28 per cent to EUR2.4 billion
  • Revenue increases by 31 per cent to EUR2.1 billion compared to corresponding period of 2010
  •  EBIT[1] margin (without profit from investments) rises to 7.9 per cent

Wiesbaden, 12 August 2011 - The KION Group, one of the two leading global manufacturers of forklift trucks and warehouse technology, is continuing on a trajectory of profitable growth. In the first six months of 2011, the Company particularly benefited from the sharp rise in global demand for warehouse trucks and for efficient counterbalance trucks with electric or internal combustion (IC) engines. Compared with the first half of 2010 the KION Group achieved significant increases in order intake, revenue and earnings.

Global demand for industrial trucks grew considerably in the first half of 2011 and had reached 506,000 units by 30 June. This equates to a gain of almost a third compared to the worldwide demand in the corresponding period of 2010. This year, if the trend continues, the global market for industrial trucks could beat the record of 953,000 units set in 2007. Western Europe remained the largest individual market for material handling products in the first half of 2011, with demand rising by 38 per cent to 150,000 units. Germany, the United Kingdom and France were among the drivers of growth in this region. Demand from the continually expanding Chinese market amounted to 131,000 trucks in the first half of 2011, which means that one in four units worldwide is sold to China - now the second largest market in the world. In Eastern Europe, the Russian, Polish and Czech markets recorded the strongest growth.

Order intake for the KION Group rose to EUR2.353 billion in the first half of 2011, representing a year-on-year increase of 28 per cent (H1 2010: EUR1.843 billion). The KION Group's order backlog had grown to almost EUR1 billion by 30 June 2011. Order intake for new trucks climbed by 26 per cent from 59,100 units to 74,300 units.

Total consolidated revenue increased to EUR2.113 billion, a rise of 31 per cent year-on-year (H1 2010: EUR1.612 billion). Revenue from new trucks advanced by 46 per cent, in particular due to greater demand for higher-value counterbalance trucks. We also achieved growth in hydraulics and service revenue, which rose by 51 per cent and 15 per cent respectively. In the first half of 2011, 43 per cent of revenue was generated from the service business, which encompasses aftersales and services in connection with rental business and pre-owned trucks.

The KION Group's earnings before interest and tax (EBIT[1]), adjusted for one-off items and without profit from investments, rose from EUR21 million in the first half of 2010 to EUR168 million in the first half of 2011. This equates to an EBIT[1] margin of 7.9 per cent. Including profit from investments, which is mainly achieved in the second quarter, the EBIT[1] margin reached 8.3 percent in the first half of 2011. Besides the growth in business volumes, this increase is attributable in particular to the measures taken during the two years of crisis to boost efficiency as well as to the rigorous containment of fixed costs. The EBIT[1] margin has risen steadily over the past five quarters, reaching 8.5 per cent in the second quarter of 2011; including profit from investment the EBIT[1] margin reached 9.2 percent in the second quarter of 2011.

Cash flow from operating activities more than doubled year-on-year to EUR91 million (H1 2010: EUR34 million). Despite the far higher volume of business, working capital rose at a lower rate than revenue. The cash flow from investing activities (including acquisitions) amounted to a cash outflow of EUR71 million (H1 2010: EUR53 million). Free cash flow therefore totalled EUR20 million (H1 2010: minus EUR18 million).

The number of employees (including apprentices and trainees) was 20,515 as at 30 June 2011 - a year-on-year increase of 4.8 per cent (30 June 2010: 19,566 employees). This figure includes the 142 employees of the new brand company Voltas Material Handling, a joint venture with Voltas Limited in India, in which the KION Group holds a majority stake.

Expanding footprint in high-growth markets
The joint venture Voltas Material Handling Private Limited was established in the second quarter of 2011. KION used existing funds to acquire a majority share of this joint venture for developing, manufacturing, selling and servicing forklift trucks and warehouse technology. Voltas Material Handling is currently building a new plant in Pune (India) in order to fully exploit the strong growth potential offered by the Indian market.

Linde Material Handling acquired the remaining 51 per cent of shares in its United Kingdom based dealer Linde Sterling Ltd in June 2011. Linde Sterling is north-west UK's leading provider of new and pre-owned industrial trucks as well as rental trucks and in the aftersales business. With this transaction the KION Group has further strengthened the leading position of its Linde brand and its sales and service organization in the UK.

The KION Group is also expanding its production capacities in Brazil. In April, the Group began to set up a plant in São Paulo for manufacturing IC trucks, which will enhance the Company's ability to satisfy local customer demand. Production in São Paulo is scheduled to start in early 2012. The existing Brazilian plant in Rio de Janeiro manufactures warehouse technology for KION's STILL and Linde brands.

Further optimization of European production
In addition, the KION Group is planning two projects to concentrate its European production of warehouse trucks. Current production in Montataire - one of two warehouse technology sites in France - is planned to be transferred to Luzzara, Italy. The second project would merge the production of counterbalance trucks for the STILL (Hamburg, Germany) and OM (Bari, Italy) brands at the Hamburg site. Even after implementation of these plans, the KION Group will continue to have by far the strongest European production footprint within the industry, with factories in all major national markets. Currently, the KION Group is consulting with trade unions and employee representatives in France and Italy. The KION Group intends to implement the planned measures, which are of crucial importance to the long-term competitiveness of the Company, with high social responsibility.

Optimization of funding base
In April 2011, KION successfully placed secured corporate bonds with a total volume of EUR500 million in the capital markets. This has enabled the KION Group to improve the maturity profile of its debt. The proceeds from the issuance of the bonds were used to pay back existing loans.

Outlook
The global economic environment is increasingly volatile. Nevertheless, based on its strong order book, KION Group expects further growing revenue and EBIT[1] in the second half of 2011. As the corresponding comparative periods in 2010, which already reflected the market recovery, are becoming increasingly strong, the rates of growth for order intake and revenue should return to a more normal level in the third and fourth quarters of 2011. Revenue for 2011 as a whole is still likely to be lower than it was in 2008. However, if economic conditions remain stable, the EBIT[1] margin may reach former peak levels.

KION Group - H1 2011
Since 1 January 2011, KION has aggregated its STILL and OM brands in the STILL/OM segment.

EUR million H1 2011 H1 2010 Change
Order intake 2,353 1,843 +28%
Revenue
of which:
2,113 1,612 +31%
Linde Material Handling 1,387 1,023 +36%
STILL/OM 816 649 +26%
EBITDA[1] incl. profit from investments
EBITDA[1] margin
322
15.2%
182
11.3%
+77%
EBIT[1] without profit from investments
EBIT[1] margin
EBIT[1] including profit from investments
EBIT[1] margin
168
7.9%
175
8.3%
21
1.3%
24
1.5%
> 100%
 
> 100%
 
Cash flow from operating activities
Free cash flow
91
 
20
34
 
-18
> 100%
 
> 100%
Employees
(FTEs, incl. apprentices/trainees)
20,515 19,566 +4.8%
 

[1] EBIT / EBITDA adjusted for one-off items and 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. In 2010, the KION Group employed around 20,000 people and generated revenue of more than EUR3.5 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 Communications and Investor Relations
Tel.: +49 (0)611.770-655
Email: michael.hauger@kiongroup.com 

Frank Kopfinger
Head of Investor Relations
Tel.: +49 (0)611.770-220
Email: frank.kopfinger@kiongroup.com

Contact

Contact

Michael Hauger

Senior Vice President Corporate Communications

Contact

Frank Grodzki

Senior Director Corporate External Communications & Group Newsroom

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