LMH segment

Business performance and order intake

The Linde Material Handling segment, which comprises the Linde, Fenwick and Baoli brand companies, generated order intake of €2,901.8 million in 2013, defending its number-one market position in Europe and in the Chinese premium segment. However this was 4.1 per cent down on the figure achieved last year of €3,026.1 million (excluding the hydraulics business) due, above all, to the difficult sales situation in Germany and negative currency effects. The increased volume of orders in eastern Europe and Asia only partly offset the decline in the western European market.

During the reporting year, LMH improved its position throughout the value chain by acquiring a majority stake in German dealer Willenbrock Fördertechnik Holding GmbH (see the business performance section), expanding service capacity and the sales network with Weichai Power in China and restructuring its container handler and heavy truck business (see the business performance section). The transfer of heavy truck production to a contract plant in the Czech Republic went to plan, and the production site in Wales had largely been shut down by the end of the year. LMH also collaborated successfully with Linde Hydraulics, with which it has a ten-year exclusive supply agreement.

Revenue

Currency effects and difficult market conditions for new truck business meant that the segment’s revenue fell by 2.8 per cent to €2,881.1 million (2012: €2,965.4 million excluding the hydraulics business). Introduced at the start of 2013, the EVO models – which are among the lowest-emission counterweight trucks with an internal combustion engine – made a positive contribution to revenue. The same was true of the new generation of reach trucks, which came on the market in March. However, unit sales of diesel-powered trucks and warehouse trucks declined overall, whereas there was a slight gain for electric forklift trucks in nearly every region. There was also stronger demand for used trucks than in 2012. Coupled with the further growth in service and spare-parts business, this offset most of the downturn in new truck business and segment revenue was only slightly below the 2012 level.

Earnings

Adjusted EBIT totalled €309.1 million, which was just up on the adjusted prior-year result of €301.0 million (excluding the hydraulics business). The decline in revenue was offset by the ability to command higher prices and the increase in productivity, including the reduction in fixed costs. The adjusted EBIT margin therefore improved significantly, from 10.2 per cent in 2012 to 10.7 per cent in 2013.

In 2012, EBIT of €522.9 million had included non-recurring gains arising in connection with the sale of the majority of the hydraulics business (€247.0 million) and remeasurement in connection with the acquisition of the outstanding 51.0 per cent of shares in Linde Creighton (€12.6 million).

Adjusted EBITDA in the LMH segment came to €444.5 million (2012: €432.2 million), corresponding to an adjusted EBITDA margin of 15.4 per cent (2012: 14.6 per cent). >> Table 021