Business model and organisational structure

The KION Group’s business model is designed so that customers of all sizes and from all sectors can obtain the full spectrum of material handling products and services from a single source. Thanks to its broad technology base, diversified product portfolio and worldwide service network, the KION Group is able to bring a comprehensive portfolio of such products and services to the market.

The KION Group’s market activities are divided into five operating units: LMH EMEA, STILL EMEA, KION APAC, KION Americas and Dematic. LMH EMEA and STILL EMEA each concentrate on Europe, the Middle East and Africa. KION APAC and KION Americas hold cross-brand responsibility for industrial truck business in the Asia-Pacific region and the Americas respectively. Dematic is the global supply chain solutions business. While the Operating Units have full operational and commercial responsibility within their markets, KION Group AG is the strategic management holding company and is responsible for the groupwide strategy and groupwide business standards.

For internal management purposes, the KION Group has divided its operating business into two segments that correspond to the segments as required by international financial reporting standards (IFRS 8). The industrial truck business, including the supporting financial services, is shown in the Industrial Trucks & Services segment, while activities focusing on end-to-end supply chain solutions make up the Supply Chain Solutions segment. The two segments complement each other in terms of their respective market position and regional presence. The Corporate Services segment comprises the other activities and holding functions of the KION Group. These include service companies that provide services such as IT and logistics across all segments.

Industrial Trucks & Services segment

The Industrial Trucks & Services segment encompasses the activities of the international brand companies Linde, STILL and Baoli, the local brand companies Fenwick and OM Voltas plus the financial services business.

• Linde is an international premium brand and technology leader that manufactures forklift and warehouse trucks and provides accompanying fleet management solutions, driver assistance systems and service options, meeting even the most demanding customer requirements in terms of technology, efficiency, functionality and design. In France, Linde products are sold under the Fenwick brand.
• STILL, a provider of forklift trucks, warehouse trucks and intralogistics systems, is a leading innovator in its field and has a particular focus on the European and Latin American markets.
• Baoli is the international brand for the lower end of the volume segment and the economy segment.
• OM Voltas is the local brand company for the Indian market, through which the KION India Pvt. Ltd. subsidiary manufactures and sells electric and IC forklift trucks and warehouse trucks.
• KION Financial Services (FS) is an internal funding partner for the Industrial Trucks & Services segment, providing finance solutions to support sales.

So that it can fully cater to the needs of material handling customers worldwide, the business model of the Industrial Trucks & Services segment covers the key steps of the value chain: product development, manufacturing, sales and service, truck rental and used trucks, fleet management and financial services that support the core industrial truck business.

The segment earns just over half of its revenue from the sale of industrial trucks. The product portfolio includes counterbalance trucks powered by an electric drive or internal combustion engine, warehouse trucks (ride-on and hand-operated) and towing vehicles for industrial applications covering all load ranges. Worldwide research and development activities enable the Industrial Trucks & Services segment to consolidate its technology leadership, which it is extending in the areas of energy-efficient and low-emission drive technologies and automation solutions. In this field, the KION Group operates 16 production facilities for industrial trucks and components in eight countries. So that it can ensure security of supply and the availability of spare parts for important components in order to meet customers’ specific requirements, the segment manufactures major components itself – notably lift masts, axles, counterweights and safety equipment. Other components – such as hydraulic components, electronic components, rechargeable batteries, engine components and industrial tyres – are purchased through the global procurement organisation.

As a rule, industrial trucks are built according to the customer’s individual specifications. Networked fleet management solutions and the advantages for customers in terms of total cost of ownership (TCO) support the international Linde and STILL brands’ premium positioning. The segment is underpinned by an extensive sales and service network comprising around 1,800 outlets in over 100 countries and staffed by more than 18,000 service employees, roughly half of whom are employed by the KION Group.

The worldwide vehicle fleet, which consisted of around 1.5 million industrial trucks at the end of 2019, provides a broad base for the service business. This business helps to smooth out fluctuations in the segment’s revenue, reduces dependency on market cycles and supports new truck sales by maintaining lasting customer relationships. Extensive services such as software-based fleet management are offered, mainly for premium products. There are also individual orders for repairs and maintenance work as well as for spare parts. In addition, the Operating Units have extensive used truck and rental truck businesses, allowing peaks in capacity requirements to be met and customers to be supported after their leases have expired.

Financial services support new truck business in many markets, forming another pillar of the service business. Its activities comprise the financing of long-term lease business for external customers, the internal financing of the short-term rental business and the related risk management. In the large sales markets with a high volume of financing and lease activities, legally independent FS companies handle this business. About half of all new trucks are financed via the KION Group itself or via external banks and financing partners. Offering financial services is therefore part of the truck sales process. Leases are generally linked to a service contract covering the term of the finance agreement.

Supply Chain Solutions segment

Through the Dematic brand, the Supply Chain Solutions segment is, in terms of revenue, the leading global supplier of state-of-the-art integrated automation technology, software and services for the optimisation of supply chains.

Manual and automated solutions are provided for all functions along customers’ supply chains, from goods inward and multishuttle warehouse systems to picking, automated palletising and automated guided vehicle systems. Picking equipment controlled by radio, voice or light is available for nearly all goods and packaging types. Automated storage and retrieval systems (ASRS), robotic picking systems and compact, powerful split-case and pallet picking stations can be used to achieve very fast throughput times and picking rates. At the same time, cross-docking solutions increase the efficiency of the system as a whole by eliminating the unnecessary handling and storage of goods. The micro-fulfilment system was developed to speed up the processing of retailers’ online orders.

Real-time management of the supply chain solutions is based on the proprietary software platform Dematic iQ, which can be easily integrated into the customer’s existing application landscape. By providing real-time material flow data analyses, among other things, Dematic iQ can help with the data-based optimisation of all processes to ensure seamless order processing. It also supports performance management functions for measuring and controlling performance.

The segment is primarily involved in customer-specific, longer-term project business. With nine production facilities in North America, Europe, China and Australia and regional teams of experts, Dematic is able to plan and deliver logistics solutions with varying degrees of complexity anywhere in the world.

The (new) project business (business solutions) covers every phase of a new installation: analysis of the customer’s needs and the general parameters, provision of appropriate advice, computer simulation of bespoke intralogistics solutions in the customer’s individual environment, technical planning and design of the system, implementation of the control technology and its integration into the customer’s existing IT infrastructure, site and project management, plant monitoring and support for the customer during implementation of the system, including training for the workforce.

The system components, which are specified in detail for each customer project, such as automatic guided vehicles, palletisers, storage and picking equipment including automated storage and retrieval systems, sorters and conveyors, are manufactured inhouse or, in some cases, by third parties.

Modernisation work and services (customer services), which usually cover the entire lifetime of an installed system, are provided to local customers by approximately 1,500 employees in over 20 countries. The service business benefits from an installed base of more than 6,000 systems. > DIAGRAM 003

For diagram 003 see the interactive production sites map at www.kiongroup.com.