12.1 Opportunities report

The market for industrial trucks is strongly correlated with industrial output – and therefore also with macroeconomic trends. Growth of the global economy, particularly in terms of world trade, has a corresponding positive effect on the demand for industrial trucks. Greater division of labour and rising inventory turnover rates in the major industrialised nations continue to increase the degree of mechanisation in logistics. These growing demands on warehouse organisation will, in turn, increase demand for efficient warehouse equipment and comprehensive intralogistics solutions. The KION Group is excellently placed in the industrial trucks market and will seize the opportunities presented by market growth, drawing on its outstanding portfolio of products and services.

The KION Group is already very well positioned in the major emerging markets. It is a leading supplier in eastern Europe, the largest international manufacturer in China and the second largest manufacturer in Brazil. Since 2011, it has also had a stronger foothold in India. In the fast-growing markets of eastern Europe, South America and Asia, sales of industrial trucks will continue to benefit from more rapid overall economic growth and associated expansion investment and will therefore rise faster than in the more established markets. Trucks from the economy segment are predominantly offered in the fast-growing regions, enabling the high level of demand in these markets to be met yet also fulfilling the need for high-quality products at an affordable price. Thanks to its brand portfolio, the KION Group is very well placed to satisfy these requirements.

Customers' requirements vary significantly depending on the situation in the individual market and other local characteristics. The KION Group is able to meet these requirements at all times with its six brands – Linde, Fenwick, STILL, OM (from 2012 OM STILL), Baoli and Voltas. They cover the entire spectrum of industrial trucks, from basic warehouse equipment to container handlers. Ergonomics and intelligent intralogistics are the hallmarks of products from Linde, Fenwick, STILL and OM STILL. These brands are industry leaders in technology and innovation thanks to their technologically sophisticated, solution-oriented product portfolios. Baoli und Voltas, on the other hand, cater to the economy segment in the high-growth markets. This broad-based structure enables the KION Group to benefit from growth in all market and product segments and thereby effectively build market share.

In contrast to new truck sales, the service business is largely independent of the economic cycle and gains further support and impetus from growth in the number of active trucks in the market. An increasingly important role is being played by services such as maintenance & repairs, spare-parts business, short-term & long-term truck rentals, the range of finance solutions and IT-based approaches to efficient fleet management. The KION Group's broad spectrum of services and an active fleet of more than one million trucks worldwide provide solid foundations for continued growth of its service volume. Service activities also improve customer loyalty and enable the Company to predict its revenue streams over a longer period. The KION Group will apply its expertise to further expanding its range of efficient service solutions, adapting them to local needs and thereby increasing its market share.

Despite the increasing degree of consolidation, the market for industrial trucks remains highly fragmented and is dominated by suppliers with a regional focus. Besides potential for organic growth, the KION Group continuously evaluates opportunities for growth by acquisition in relevant foreign markets. The Company studies the markets on an ongoing basis, examining not only well positioned manufacturers but also service providers and distributors.

Efforts to reconcile economic and environmental requirements are an important issue when it comes to logistics. As an innovation leader, the KION Group therefore examines eco-friendly, fuel-saving technologies in all product classes. Customers benefit from lower product lifecycle costs, which encompass the purchase, maintenance and repair costs as well as fuel consumption and labour costs. Linde Material Handling regularly looks at how protecting people and the environment can be optimised in each area of the company and is implementing projects to put this into practice. STILL offers forklift trucks with particularly low fuel consumption, while its hybrid technology has elevated it to a leading market position. Developing sustainable technologies and translating them into cost-effective yet environmentally sustainable products will remain a focus for the KION Group in future as they continue to generate further growth opportunities for the Company.