1 Milestones in 2010

Market recovery generates strong growth – market position strengthened

Driven by strong growth in key markets such as Germany, China, South America and eastern Europe, the KION Group's business situation increasingly improved in 2010 and it gradually stepped up production levels. Besides generating new business, the upturn also led to higher demand in the market for services such as aftersales, rentals and used trucks because customers were using their products to a greater extent. However, despite the improved market situation, levels were still below where they had been before the start of the economic crisis in the fourth quarter of 2008. Although at 121,500 trucks, the order intake in 2010 was 32 per cent higher than in 2009, it was just 76 per cent of the record level achieved in 2007.

The KION Group's global market share contracted slightly to 15.3 per cent (2009: 16.8 per cent). Gains in market share in the major western European markets were not able to fully make up for the structural shift resulting from strong growth in China, which now represents a quarter of the global market. However, the KION Group was able to extend its position as the number two in the global market and the market leader in Europe due to its excellent foothold in all high-growth regions and its balanced product mix compared to its main direct competitors.

Production is relocated successfully

The KION Group has successfully adapted its production structure to the new market conditions, thereby benefiting from economies of scale and more efficient production processes. Production at the UK plant in Basingstoke ended in the first quarter of 2010 and was relocated to Linde Material Handling's core site in Aschaffenburg, Germany, and STILL's core site in Hamburg. The plant in Reutlingen, Germany, focuses on VNA (very narrow aisle) trucks and has been upgraded to a cross-group centre of competence for VNA trucks and systems engineering.

The KION Group remains a reliable employer

To address the issue of overcapacity, the KION Group again used short-time working in Germany and similar measures in other countries during 2010. At times, over 7,000 employees in Germany alone were affected by short-time working. Short-time working was gradually reduced during the course of the year as the market picked up. A high proportion of the affected employees enrolled on continuing professional development programmes. In 2010, the first year after the worst crisis to hit the sector, the number of employees (19,968) remained relatively stable compared to 2009. The KION Group therefore retained the valuable expertise of its employees for the future.

STILL and OM combine their strengths

In 2010, the STILL and OM brands began to bundle their activities, enabling them to boost their competitiveness by benefiting from each other's product range and distribution capability. OM focuses on its home Italian market and is integrating the STILL Group's activities in Italy into its operations, making OM the clear market leader in that country. In the medium term, STILL will integrate the OM Group's activities outside Italy into its network. STILL is also using attractive products from OM to supplement its own product range. It is therefore significantly expanding its coverage of the market for these products and greatly improving their market penetration via its excellent distribution network. The STILL and OM brands will be managed jointly from 2011.

Strategic course set at early stage in China, complete control of Baoli assumed

During the second quarter of 2010, the KION Group assumed complete management control of the KION Baoli joint venture, which it had established with Chinese joint venture partners in January 2009. The KION Group has therefore consolidated its position in the Chinese market against a background of sustained market growth and, along with Linde, now has two brands in the country, which cover different customer and product segments. The KION Group is by far the largest international competitor in the Chinese market. China is now the third-largest individual market for the KION Group in terms of unit sales, behind Germany and France.

Linde Hydraulics forms strong alliance with Eaton

In 2010, Linde Hydraulics entered into a distribution and product partnership with the US industrial manufacturer Eaton. Eaton's hydraulics business makes it one of the global market leaders for hydraulic components and drive systems. The two strategic partners complement each other in terms of product range and regional presence. As a result of the alliance with Eaton, Linde Hydraulics has direct access to an outstanding global distribution network and can offer a more comprehensive range of hydraulic system technologies and services to its international customers in the construction, agricultural, commercial vehicles and manufacturing sectors.

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