Overall assessment of the economic situation
In the first half of 2013, the KION Group’s integrated business model once again proved to be robust. Although the decrease in the number of industrial trucks ordered was moderate, as European market leader, the KION Group was hit relatively hard by the economic downturn in Germany and the rest of western Europe. However, the KION Group also benefited more than most from the rapid growth in the emerging markets and was able to strengthen its market position. The Group’s service business, which accounts for a high proportion of revenue, also acted as a stabilising force, particularly in western Europe.
Despite a slight decline in the number of orders, year-on-year revenue adjusted for the hydraulics business advanced by 0.7 per cent. Following a muted start to the year, revenue in the KION Group increased significantly in the second quarter. Its consistent, high-margin service business proved to be a key engine of growth with a 1.8 per cent increase in revenue in the first half of the year. As a result, the proportion of consolidated revenue attributable to service rose from 42.4 per cent in 2012 (excluding the hydraulics business) to 42.9 per cent.
Given the uncertainty that remains in the market, the Group’s adjusted EBIT margin of 9.0 per cent is very good. This increase on the comparable value of 8.7 per cent in 2012 (adjusted for the hydraulics business) reflects the KION Group’s more flexible cost structure and its ability to implement price increases in the market. Plant capacity utilisation in the successfully restructured group of production sites was higher than in the first half of 2012.
The KION Group’s net income grew substantially year-on-year. It amounted to € 70.3 million after taxes, compared with € 25.9 million in the first half of 2012.
Business situation and financial performance of the KION Group
Key influencing factors
To improve comparability between the 2013 and 2012 halfyear results, revenue and order intake are additionally stated—at the level of the Group and the Linde Material Handling segment—excluding the contributions made by the hydraulics business, which was sold in December 2012. Consequently, EBIT and EBITDA have been adjusted to take account of the contributions made by the hydraulics business on the basis of the financial results relating to the hydraulics business reported in the Linde Material Handling segment in 2012.
Please also note that the segment structure of the KION Group was changed at the end of the 2012 financial year. Financial services activities were aggregated in the Financial Services segment to enable them to be managed separately.
The first-time adoption of new financial reporting standards (see Notes to the condensed consolidated interim financial statements) did not have a major impact on the financial performance or financial position of the KION Group. Because the rules governing transition to the new IAS 19R “Employee Benefits” require it to be adopted retrospectively, the quarters of 2012 have been restated.