KION GROUP AG’s IPO and the accompanying capital increases have greatly improved the KION Group’s financial situation and increased its financial flexibility. The Group used the proceeds to significantly reduce its net financial debt and create a basis from which to drive forward its successful policy of global expansion. Details can be found in the ‘Financial position’ section.
As a result of the IPO and the subsequent reduction in financial debt, there was a significant improvement in the KION Group’s credit profile, and consequently in its credit rating. Rating agency Moody’s upgraded its corporate family rating by three notches, from B3/positive to Ba3/stable, while Standard & Poor’s improved its rating for the KION Group from B/stable to BB-/positive. As a result, the KION Group will be able to obtain funding on the bond market on better terms in future.
Key strategic measures in 2013
The KION Group boosted its sales organisation in the European market in the year under review by acquiring four companies.
In Germany, Linde Material Handling increased its stake in Willenbrock Fördertechnik Holding GmbH – an exclusive dealer focusing on the Bremen and Hannover sales regions – from 23.0 per cent to 74.0 per cent at the end of 2013. This transaction was part of the succession planning for a founding shareholder who was leaving Willenbrock. As yet unaudited figures show that the company employed more than 500 people and generated revenue of around €165.0 million in 2013.
In Turkey, STILL acquired 51.0 per cent of the shares in Arser İş Makineleri Servis ve Ticaret A.Ş. (referred to below as Arser) in August. The company was already the exclusive dealer for the substantial Turkish market – a major hub for European trade with the Middle East – and will enable the KION Group to step up its business here.
The KION Group has also strengthened its presence in France by purchasing the remaining shares in two dealers. The outstanding 45.7 per cent stake in Bretagne Manutention S.A. (Pacé), a dealer for LMH, was acquired on 23 July 2013, followed on 11 September 2013 by the outstanding stake of 49.9 per cent in Manusom SAS (Rivery), which sells STILL products.
Within the production organisation, LMH’s container handler and heavy truck business was restructured. Product rights and other assets from the container handler division were sold to Konecranes, a global market leader in the lifting business. Since then, Konecranes has been a long-term supplier of container handlers for Linde Material Handling’s global distribution network. The alliance is improving efficiency in research and development and will enable LMH to continue to offer a broad range of reach stackers and container handlers. LMH’s extra heavy-duty truck plant in Merthyr Tydfil (Wales, UK) was closed in October 2013, with the bulk of production initially transferring to a contract plant in the Czech Republic. The Czech plant reached full production volume, with the customary high level of quality and security of supply, in the fourth quarter. The restructuring is enabling the KION Group to make further efficiency gains in the European production network. In the medium term, extra heavy-duty truck production is to transfer to China.
In Brazil, KION South America officially opened its new plant in Indaiatuba (São Paulo) in March 2013. This has doubled production capacity in Brazil, the largest individual market in South America; capacity utilisation was good. By pooling production in São Paulo and stepping up cross-brand cooperation, the KION Group can leverage synergies and respond faster to customer requirements. At the same time, KION South America works closely with the Chinese KION brand Baoli (Jiangsu) Forklift Co., Ltd., whose truck platform is used to meet South American demand and is fitted with local components. The increase in production capacity was accompanied by expansion of the sales organisation.
The joint venture JULI Motorenwerk s.r.o., in which LMH and STILL together hold 50.0 per cent of shares, has established a production facility for electric motors in China in order to achieve faster penetration of the Chinese market, particularly in the value and economy segments. The start-up phase was a success. This will make it possible to fit locally built motors into electric forklift trucks and warehouse trucks from 2014.