Overall assessment of the economic situation
The KION Group can look back on a very solid 2013. Despite challenging economic conditions, particularly in western Europe, and customers’ marked reluctance to invest during the first nine months of the year, the Group maintained its strong market position over the year as a whole. Global market share amounted to 14.1 per cent, with a slight increase for the service business. The KION Group therefore again proved that its business model is robust, even in a challenging economic climate. Owing to currency effects, revenue was slightly lower than in 2012 (excluding the hydraulics business). The target of a year-on-year increase for the adjusted EBIT margin was achieved, despite the difficult market conditions. The margin’s rise from 9.0 per cent in 2012 (excluding the hydraulics business) to 9.3 per cent in 2013 can be attributed, above all, to an optimised cost structure and the ability to command higher prices. The more flexible cost structure achieved to date gives the KION Group a significant competitive edge. Nonetheless, the Group invested in its future 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.
The net income generated of €138.4 million was very encouraging. Free cash flow stood at €202.6 million. The successful steps to reduce debt, which had been initiated in late 2012, and the full repayment of the acquisition finance after the IPO, combined with cheaper funding under the new credit facility, quickly resulted in a marked reduction in interest cost in 2013. A vastly improved funding structure provides greater flexibility for generating profitable growth in the future.