Market opportunities
The economy as a whole may perform better than expected in 2016. In addition, circumstances may occur in the wider market at any time – such as quality problems at competitors or the effects of consolidation – that boost demand for products from the KION Group brands. New, unforeseen regulatory initiatives could be launched, for example the tightening of health and safety regulations or emissions standards, that would push up demand for premium products offered by the KION Group brands. Average prices for procuring commodities over the year may be cheaper than anticipated.
Medium- to long-term market opportunities are presented, in particular, by:
- growing demand for intralogistics products and services as a consequence of globalisation, industrialisation and fragmentation of supply chains;
- high demand for replacement investments, especially in developed markets;
- the trend towards outsourcing service functions to industrial truck manufacturers and growth in demand for finance solutions;
- increased use of electric trucks and warehouse trucks – which count among the KION Group’s particular strengths – partly in connection with the expanding e-commerce sector;
- growing demand for automation solutions and fleet management solutions.
Strategic opportunities
Strategic opportunities are presented, above all, by implementing the Strategy 2020, which is described in detail on pages 78 to 80. The positive impact of strategic activities is already largely reflected in the expectations regarding the KION Group’s financial performance in 2016. Nevertheless, the individual activities could create positive effects that exceed expectations. There is also a possibility that new strategic opportunities that were not part of the planning may arise over the course of the year, for example in the form of acquisitions and strategic partnerships.
The KION Group’s medium- to long-term strategic opportunities arise, in particular, from:
- a greater presence in the economy and volume price segments, particularly as a result of the systematic implementation of the groupwide platform strategy;
- strengthening of its market-leading position in core western European markets by boosting its technological expertise and making greater use of shared modules;
- further consolidation of its market position in the premium segment by offering automation solutions and intralogistics solutions;
- expansion of the service portfolio, including financial services, at every stage of the product lifecycle, taking advantage of the high number of trucks in use;
- harnessing of market potential in fast-growing regions by putting suitable production and sales structures in place;
- continued focus on expanding the business in North America.
Business-performance opportunities
Business-performance opportunities primarily arise from ongoing activities to modernise and streamline the KION Group’s production facilities and from the worldwide integration of the production network. By investing in new locations, products can be assembled nearer to the markets in which they are to be sold, economies of scale can be achieved across the Group and synergies can be leveraged. Further development of the Group’s back-office services will also help to achieve these objectives.
The following may lead to an increase in profitability in the medium term:
- ongoing efficiency increases at production sites (partly resulting from more efficient allocation of work now that the plant in the Czech Republic has come on stream) may boost sales and improve the gross margin;
- effective use of global development capacities within the framework of an overarching modular and platform strategy may create synergies and economies of scale.