14.3 Outlook for the KION Group

In 2011, the KION Group will benefit substantially from the upward trend in the markets as well as from the cost-saving measures initiated in 2009 under the KIARA performance enhancement programme. Capacity utilisation in the plants will continue to rise. The full integration of products following the relocation of production from the Basingstoke plant and some areas of production from the Reutlingen plant have helped to raise the large-scale plants in Aschaffenburg and Hamburg to a more efficient level of production. In 2011, the KION Group will be implementing more measures to further enhance the performance and efficiency of its plants. The five brands in the KION Group represent a strong, global product portfolio that it will continue to use in 2011 to meet the specific local needs and different requirements profiles of its customers in different regions around the world. As the operational improvements made in 2010 were greater than originally planned in 2010, the KION Group will remain below the threshold values defined its financial covenants in 2011. As a result, the interest terms will be slightly more favourable.

Further improvement to the margin

At the start of 2011, the KION Group is optimistic that the further improvement in the market environment will enable it to increase its revenue by around 10 per cent. Growth will mainly be achieved by generating new business, but it will also be driven by all other product categories. The Company's profitability will increase substantially on the back of long-term structural improvements coupled with economies of scale. In late 2010/early 2011, the brand companies in the KION Group also responded to the rise in commodity prices and staff costs by raising their gross list prices. The KION Group believes its adjusted EBIT margin will increase significantly in 2011 but will be below its pre-crisis level (2008: 7.9 per cent). Further restructuring costs aimed at improving future operational performance mean the KION Group will again make a net loss, although the loss will be smaller than in 2010 due to ongoing improvements to operations.

Provided the market continues to improve, the KION Group is expecting a further rise in revenue, a higher adjusted EBIT margin and, therefore, a further improvement in its net income in 2012.

Wiesbaden, 17 March 2011


Gordon Riske

Harald Pinger

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