The KION Group is more than the sum of its parts. Pooling the strengths of its brand companies has unleashed huge potential. For customers and investors. Around the world. Jan Koepp creates synergies that add value.

Jan Koepp

Post Merger Integration

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Strong profitability

Mr Koepp, the brand companies with the shortest histories in the KION Group are Baoli and Voltas – both of which are in Asia. You manage their integration into the Group. Do you know how many hours you have spent on planes?

At a rough estimate, I have flown round the world about five times, that’s about 200,000 kilometres, and most of the trips were to China. The remarkable insights that I gain are always worth the long flights. This gives me new ideas, sparks my creativity and recharges my mental batteries. When I land on another continent, I often don’t arrange to be picked up from the airport, I take public transport. I also like to be adventurous with food, which is probably due to the fact that I have lived abroad for 17 of the past 20 years, most of that time in Brazil.

The multi-brand strategy is a key element of the KION Group’s growth policy. What makes it so effective?

We want the right product range that covers all market segments. For this reason, we draw on local experts in every market segment and focus on the requirements of each market – in terms of meeting all needs, ‘one size fits all’ just doesn’t work. We share our knowledge of technology and products and we establish tried-and-tested, standard processes, which makes the brand companies more competitive. The idea is to merge downstream business units and processes and then to make them available to the brand companies. Together, these steps all create value and help to ensure that the KION Group continues to grow profitably and is not just a loose affiliation of brands.

How do you tackle the integration of a new brand company?

You have to understand what is needed locally. First, we summarise the expectations brought by the new company and the KION Group. Companies that have recently joined the Group want to grow faster than before. The KION Group would like to occupy a stronger position in a new company’s market. And KION customers have specific expectations in terms of products, their reliability and the service we offer. We then merge the KION Group’s strengths and experience with those of our colleagues in the new brand company. We can only become more successful in the market by working together.

  • »Travelling to other continents gives me new ideas, sparks my creativity and recharges my mental batteries …«

    »Travelling to other continents gives me new ideas, sparks my creativity and recharges my mental batteries …«

    Jan Koepp
    Post Merger Integration

  • Global: close to the markets and brands

    Global: close to the markets and brands

  • Focus on China: knowledge of other cultures creates an advantage

    Focus on China: knowledge of other cultures creates an advantage

  • Teamwork: We combine skills with experience

    Teamwork: “We combine skills with experience”

How do you ensure that the Group’s new brand companies are able to meet these requirements?

It cannot be done by simply transferring funds for capital expenditure. Our job only starts in earnest when the agreements have been signed. We assess our partners’ internal processes, strategy implementation and conduct. We establish which aspects we want to work on so that we can meet all of our targets and we supply the necessary technologies and methods. The KION Group has a duty to provide each new brand company with what it needs.

The KION Group already had two global brands, Linde and STILL, Baoli is the third. What role does KION’s Chinese brand company play?

Baoli covers the value and economy market range and it has a special role in the multi-brand strategy. The Chinese brand company provides the technical foundation for products for the Indian and South American markets. Baoli receives marketing support from the regional KION companies such as KION South America and KION South Asia. Our Indian brand company Voltas in turn benefits from Baoli technology.

  • Attractive market with growth profile above GDP.

    Global unit sales of new trucks and global economic output (bar chart)

    The KION Group operates in an attractive market that is growing faster than global economic output.

    The worldwide market for industrial trucks grew at roughly 1.4 times the rate of the global economy between 1980 and 2013. Industry experts reckon that this pace is set to accelerate slightly over the period up to 2017.

    This scenario is being driven by three global mega-trends:

    • the industrialisation of the emerging markets,
    • the advancing globalisation of world trade and, as a consequence, the increasing transportation of goods around the world,
    • the growing fragmentation of supply chains and value chains: just-in-time logistics and purchases from online retailers create demand for the KION Group’s products and services.

  • A global leader– strong home base ...

    Strong in key markets – The KION Group’s market shares and market positions in 2013 (pie chart)

    Measured in terms of new trucks sold, the KION Group is currently number one in the European market and number two in the market worldwide. And with a presence in more than 100 countries, the company is the world’s biggest specialist provider of materials handling trucks and associated services.

    Our strong position in western Europe, where we have a market share of 35 per cent (2013), is the basis for the global expansion of the KION Group. The foundation of our business is stable in this region because of replacement purchases and a strong service business.

    After plunging into a deep crisis, Europe’s market for industrial trucks is now recovering. Since 2010 the KION Group has benefited from this trend with a double-digit percentage increase in revenue in Germany and the rest of Europe.

  • ... and well positioned in growth markets.

    Growing proportion of new trucks ordered from the KION Group in emerging markets (Balkendiagramm)

    The KION Group’s leading position in emerging markets such as India, China, South America and eastern Europe means that it is excellently placed to fully exploit the growth opportunities available there. In 2013 the KION Group’s brand companies sold 35 per cent of their new trucks in emerging markets – and this proportion is set to rise sharply.

    A case in point is China, which is the world’s largest individual market for the KION Group’s products. The Company has been firmly established here with its offering of development, production and services for more than two decades and is the leading non-domestic supplier. The KION Group is the third-largest player in this market, where it employs some 3,200 people. China is now the Company’s second-biggest market in terms of unit sales (behind only Germany).

  • Technology leadership drives premium positioning ...

    The KION Group’s staff working in research and development (bar chart)

    The KION Group is right in the vanguard when it comes to technology and innovation. By spending in excess of €114 million on research and development in 2013, the Company is a leader in its sector.

    Over 900 people work at ten research centres in Europe, Asia and the Americas to devise forward-looking solutions; more than a quarter of them are based in China so that they are close to their market. This continuous R&D investment means that clients in all markets and segments can expect to have a fully customised range of trucks and services to choose from.

    In 2013 the KION Group launched more than a dozen new trucks and truck families in the market, thereby providing added impetus for 2014, and a number of new products and services are set to be introduced this year as well.

  • ... and customer value.

    The KION Group’s service business in China (bar chart)

    Customers of the KION Group particularly benefit from the industrial trucks’ good handling capacity and very low running costs throughout their lifecycle.

    The cost benefits for customers mean that the KION Group can set prices at a level that enables it to achieve higher margins than its competitors. After all, personnel expenses and the cost of operating a truck over its lifecycle constitute a significant portion of the purchase price, especially in highly developed markets.

    The proximity of the KION Group’s brand companies to their customers also ensures a high level of availability for the trucks. Around the world, around 12,900 inhouse and external service engineers work for the KION Group. This business offers considerable potential also outside of Europe: in China, revenue from services has risen substantially in recent years.

  • Robust integrated business model with high contribution from services.

    The KION Group’s strong global network with more than 1,200 sales and/or service outlets (world map)

    This provides the basis for the KION Group’s lasting business success. Customer services, truck rentals, used trucks and spare parts together contribute more than 40 per cent of revenue. This business is very resilient to fluctuations in the economic cycle. Moreover, it generates particularly good margins for the KION Group.

    There are around 1.2 million KION trucks in use around the globe, forming a broad basis for a strong and integrated service business.

    A comprehensive network of more than 1,200 sales and/or service outlets worldwide ensures that the KION Group is never far from its customers. This creates strong customer loyalty, which in turn offers more potential for growth and provides a lasting competitive advantage.

  • Strong profitability – well prepared for future value creation.

    The KION Group’s earnings before interest and tax (bar chart)

    Constantly improving efficiency and profitability is a clear objective for the KION Group. Size and synergies – a combination that makes the KION Group stand head and shoulders above other truck manufacturers.

    This involves collaborating on research and development, improving plant structures and fully exploiting the economies of scale created by a worldwide production network. Other areas of focus are the optimal use of shared, cross-brand modules and platforms and the ongoing expansion of the service business.

  • Highly motivated and qualified employees with proven track record.

    KION Group employees by country (pie chart)

    International, highly qualified and highly motivated: the KION Group’s more than 22,000 employees, who demonstrate dedication and creativity day in, day out, are both the heart and the backbone of the company.

    Their hard work underpins the operational success of the company and ensures a strong financial performance. This was one of the key elements in the successful stock market flotation of the KION Group in June 2013.

    The company’s growth strategy is reflected in the structure of the workforce. In 2013, the Group recruited extra staff for its service and sales operations and notably invested in new employees in the emerging markets and growth regions. The KION Group is increasingly hiring local management in all its markets in order to utilise their strong market knowledge and expertise.