Overall assessment of the economic situation

The KION Group can look back on a successful financial year 2012. Despite the slight market downturn, the Group increased its market share in all of its major sales regions and expanded its service business. KION therefore proved that its business model is stable, even in a difficult economic climate. The targeted increase in revenue was exceeded, with revenue rising by 8.2 per cent on the back of higher volumes and price increases. About half of the growth in revenue was generated by the emerging markets, which are KION's strategic focus region – although the volume of business generated by the mature markets also surpassed the prior-year figure. In western Europe, KION consolidated its premium position and gained market share owing to the close cooperation between its new truck business and service business.

The target of achieving a year-on-year increase for the adjusted EBIT margin was also achieved. The increase from 8.3 per cent in 2011 to 9.3 per cent in 2012 can be attributed, above all, to the extensive restructuring and consolidation programme, which was largely completed in the year under review. As planned, capacity utilisation in the plants was higher than in 2011. The more flexible cost structure now in place gives KION a significant competitive edge.

The net income generated of €161 million was very encouraging and exceeded the anticipated figure. It was partly boosted by a net gain from the transactions conducted with Weichai Power, but also by an improvement in the financial result resulting from the success of the steps taken to reduce debt levels.

KION invested in its continued growth in the reporting year. Spending on research and development equated to 2.5 per cent of revenue, which was once again higher than the industry average. Moreover, KION expanded its production capacity in China and Brazil in line with its strategic objective of increasing the volume of production in emerging markets.

The considerable improvement to the financial position resulting from a capital increase, the conversion of a shareholder loan into equity and the extension of the terms of the loans all give KION greater flexibility with which to generate profitable growth in future. Besides optimising its funding structure, the Group also improved its liquidity position. Another contributing factor was the increase in free cash flow on the back of the sale of significant portions of the hydraulics business, strong earnings performance, and efficient management of working capital.

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