2.2.2 Segment overview

Linde Material Handling – Engineered for your Performance

Linde Material Handling manufactures material-handling products under the Linde and Fenwick brands as well as producing hydraulic components in its Linde Hydraulics business that are used both in its own trucks and in the products of external manufacturers. As a global provider of high-quality material-handling products and services, the Linde brand stands for technological and innovation leadership and is the world's second-largest producer of industrial trucks, with a market share of 9 per cent. Linde Material Handling is the sole manufacturer to offer an extensive portfolio of products and is therefore able to satisfy any requirement, whether small pallet trucks for moving goods around the warehouse or large container handlers for use in ports and rail freight depots.

All products and services are designed to increase customers' efficiency, something that is reflected in the company's slogan 'Engineered for your Performance'. An efficiency test for forklift trucks certified by TÜV Nord, a technical inspection, testing and certification organisation, has enabled an objective comparison of the costs and performance of forklifts for the first time. These tests, which measured the overall cost of the loading cycle for a lorry, found that Linde's trucks had 20 per cent lower costs than competitors' products.

Linde Material Handling employs innovative technologies and user-friendly, ergonomic concepts as well as designing ground-breaking solutions in order to create more efficient products. Its truck design has already won numerous awards. Linde Material Handling also has a wealth of service expertise and a comprehensive product portfolio ranging from warehouse equipment to heavy trucks and container handlers as well as extensive aftersales support. This enables it to meet each customer's individual requirements.

In 2010, Linde Material Handling launched a variety of new products. One of these was the CiTi Truck, a world premiere in the material-handling market. This new type of pallet truck, with motors for driving and lifting, enables effortless load handling, particularly when it comes to deliveries in city centres – and can even cope with kerbs. The company won an EVA Award in the Corporate Events category in recognition of its marketing concept for the CiTi Truck product presentation. Linde Material Handling is the first industrial truck manufacturer in Europe to add a fuel-cell powered truck to its product range. Instead of the 80-volt batteries that are usually installed, the trucks have a fuel cell and fuel tank that holds 1.6kg of hydrogen gas at a pressure of 350 bars. Using the trucks does not generate any emissions, thereby representing a key step towards fully tapping the benefits of innovative drive technologies. Following on from the electric counterbalance trucks, Linde H20-50 trucks with IC engines now come fitted with 'eco mode' as standard. This technology enables the driver to control the power and energy consumption of the truck as required. Depending on how it is used, the truck operator can therefore reduce energy consumption and tyre wear.

The new online module of the truck data management system, LFM, enables the collection, retrieval and analysis of data about truck fleets spread across multiple locations. Data is transferred via the mobile phone network. The module gives customers maximum transparency about where and how their truck fleets are being used.

Linde Material Handling is also a major producer of hydraulic components and hydrostatic drives. In 2010, the company celebrated 50 years of the Linde truck with hydrostatic drive. The drive system of this Linde truck provides the basis for sensitive and precise lifting and handling, low fuel consumption and ease of maintenance. Linde Material Handling thereby combines both truck development and drive technology development. Major brand manufacturers around the world install its hydraulic products in their equipment for the construction, agricultural and forestry sectors. In 2010, Linde Hydraulics and Eaton Corporation (USA) entered into a strategic alliance for the global marketing of each other's hydraulic products that allows them to offer all-in-one drive systems. This will create a broad product range for many different applications – not just mobile machinery such as agricultural equipment, but also stationary drive systems. Another advantage of the alliance is that the two partners complement each other in terms of regional market coverage.

As at the balance sheet date, Linde Material Handling employed 12,240 people worldwide. The head office of Linde Material Handling is located in Aschaffenburg, Germany. Driven by the upturn in the German market as well as in the emerging markets of China, South America and eastern Europe, new truck order intake rose by 34 per cent to 72,600 units, generating revenue of €2,254 million. Adjusted EBIT increased by over 100 per cent to €139 million. Linde Material Handling has an extensive global distribution and service network with over 700 sales outlets. Depending on the country and region, products are sold by Linde Material Handling's own sales outlets or via dealers that cover the market. Overall, the company has a balanced distribution mix, with about half of its business generated via its own distribution network and the other half through external dealers. International production sites are located in Châtellerault (France), where warehouse handling equipment is produced, and Merthyr Tydfil (UK), which focuses on extra heavy-duty trucks and container handlers. To cater to local needs and requirements, Linde Material Handling manufactures region-specific products in Summerville, South Carolina (USA), and in Xiamen (China).

The Baoli brand operates as an independent brand in the market, focusing on the economy segment in China and other growth markets. The attractive product range, combined with the KION Group's excellent distribution network, enables Baoli to quickly satisfy demand for sturdy, low-cost trucks, above all in emerging markets such as South America. As an integral part of the Linde Material Handling segment, Baoli generated an order intake of 3,100 units in 2010. Worldwide, it has more than 110 sales and service outlets, the bulk of which are in Baoli's home Chinese market. Production is located at its headquarters in Jingjiang, China. At the end of 2010, Baoli employed a workforce of 523.

STILL – First in Intralogistics

The STILL brand has positioned itself as a leading provider of intelligent intralogistics management tools.

In addition to core products (forklifts, warehouse handling equipment and tow tractors), the range includes cutting-edge material flow services. STILL is traditionally one of the market leaders in western and eastern Europe and is also excellently positioned in South America. The company is one of the leading brands in Europe, where it has a market share of more than 11 per cent. It celebrated its 90th anniversary in 2010.

In the second quarter of 2010, the STILL and OM brands announced plans to bundle their activities and better leverage the potential of the two brands. The regional OM brand will focus on the home Italian market in conjunction with STILL, making STILL/OM the clear market leader there. OM is significantly expanding its range of products as a result of gaining access to STILL's comprehensive product portfolio. STILL will take on OM's activities outside Italy and integrate them into its own operations. This step greatly improves the market penetration and coverage of the combined products of STILL and OM. From 2011, the KION Group will report on the STILL and OM brands as one entity.

One-stop aftersales activities as well as advice on the following issues are becoming more and more important to STILL: warehouse logistics and the design of companies' internal logistics processes, goods flow management and fleet management. Fully and partially autonomous industrial trucks are increasingly being integrated into these types of solutions. STILL is already using computer-guided turret order pickers, which are navigated by laser and use Optispeed software to reach the selected rack independently and by the quickest available route.

STILL has added further innovative forklift and warehouse material-handling products and services to its modern product range. In 2010, STILL greatly expanded and updated its portfolio of warehouse handling equipment, showcasing the EXU-SF low-lift pallet truck for horizontal transport and two new double-stacker trucks. This modular group of warehouse handling equipment aims to make the flow of material more effective when goods are received or dispatched, loaded onto or unloaded from lorries or moved to the production line from the warehouse. The equipment is therefore highly suited to use in distribution logistics, industry and the retail sector. STILL also presented the new EXU-H low-lift pallet truck with an order picking lift, which is particularly useful for replenishing supermarket shelves and changing tools in industrial applications. In early 2010, STILL exclusively launched a complete tugger train system with new 'liftrunner' trailers, for which it received excellent feedback. The new system enables the just-in-time transport of materials at production sites that operate a modern lean manufacturing concept. STILL presented CiTi One in the second quarter of 2010. This innovative truck for inner-city deliveries can easily transport goods weighing up to 500kg. Its name indicates its main areas of application: deliveries to companies in city-centre locations and other delivery zones where there is contact with the public.

STILL has also expanded its range of diesel and LPG trucks with the launch of the RC 40 series, which features a torque converter and load capacities between 1.5 and 3.0 tonnes. The RC 40 is the first product to emerge from the cooperation between the STILL and OM brands. It means that STILL can now offer a lower-price starter model via its large distribution network that lends itself well to applications in the high-growth regions of eastern Europe, Asia and South America.

The diesel-powered RX 70 truck earned STILL two international awards in 2010: the GOOD DESIGN Award for pioneering industrial design from the Chicago Athenaeum and the Green DOT Award for ground-breaking, environmentally responsible products in the transport category. The STILL RX 70, which has load capacities of between 2.2 and 3.5 tonnes, is the most economical diesel truck in its class. It combines an IC engine and electric drive system with efficiency-boosting hybrid technology components.

STILL uses its own direct sales organisation in Germany, France and large parts of Europe. It uses dealers to supplement its own direct sales operations in its UK, Spanish and Italian markets. Other countries such as Norway, Sweden, Israel and Portugal are covered by dealers. In 2010, STILL again expanded its distribution and service network, extending the distribution alliance that it had entered into with the Finnish company KONEKESKO in 2009 to cover the Baltic states. It also enlarged its direct sales organisation in Sweden with STILL Sverige AB. Worldwide, STILL operates 230 sales outlets, consisting of its own sales operations and dealers.

STILL employs 6,271 people worldwide and has its head office in Hamburg, Germany, where it produces both electric and IC forklift trucks. Following the relocation of production from the Linde Material Handling plants in Basingstoke (UK) and Reutlingen (Germany), STILL has been manufacturing the R07 and R08 tow tractors as well as reach trucks in Hamburg since March 2010. Warehouse equipment is produced at the plant in Montataire (France). It also has two production sites that serve the entire KION Group: KION Warehouse Systems in Reutlingen (Germany) and KION South America in Rio de Janeiro (Brazil). KION Warehouse Systems focuses on the complex technologies required for very narrow aisle (VNA) trucks and systems engineering, while KION South America specialises in trucks for the South and Central American markets.

The market upturn, particularly in Germany and Brazil, was of great benefit to STILL, which was able to boost its new truck order intake by 38 per cent to 35,300 units. Revenue rose by 14 per cent to €1,245 million, enabling STILL to generate EBIT – adjusted for one-off items – of €26 million.

OM – Reliable. Always.

As a leading Italian manufacturer, OM offers reliable electric and diesel trucks as well as warehouse handling equipment with high-quality technology to customers in the value segment.

In 2010, OM launched the TL series of low-lift pallet trucks as part of its range of warehouse equipment. The new series offers improved features, such as optimised ergonomics. It is designed to transport pallets around the warehouse and meets the needs of customers in various sectors. As a result of the new partnership with STILL, OM will include a new electric lift truck from STILL in its product range so that it can expand its offering for the Italian market. OM has an extensive distribution and service network in its home markets in southeast Europe, consisting of its distribution network and external dealers. In total there are around 150 OM sales outlets.

The production and distribution alliance with the Japanese manufacturer Komatsu expired in 2010. This does not cause any material changes for OM.

OM's head office is located in Lainate (Italy). It produces counterbalance trucks at its plant in Bari (Italy) and warehouse equipment in Luzzara (also Italy).

OM increased its order intake by 10 per cent to 10,400 units in 2010, generating revenue of €202 million and EBIT – adjusted for one-off items – of minus €5 million. This reflected the continuing difficulties in OM's home markets of Italy and Spain.

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