Macroeconomic and sector-specific conditions

Macroeconomic conditions

There was a further slowdown in global economic growth in the first half of the year. Heightened political uncertainty, a slackening of global trade and a deceleration in capital investment around the world all had a significant negative impact. The economic situation deteriorated, particularly in the eurozone, as a result of the weakness in exports and in capital expenditure. In the US, increased government spending and tax incentives led to further solid growth. However, the effects of these supportive measures are increasingly waning. The growth situation in China progressively stabilised after a weak start to the year, thanks to support from Beijing in the form of monetary and fiscal policy and despite a reduction in trade activity because of the trade dispute with the US. For 2019 as a whole, economic experts now expect global economic growth to be down both on 2018 and on the original forecasts. The biggest risks are a further escalation of trade disputes, the growing debt levels of emerging and developing economies and the fallout from a possible no-deal Brexit.

Sectoral conditions

Sales markets

In the first half of 2019, the global market for industrial trucks was unable to replicate the growth seen in previous years. The number of new trucks ordered fell by 5.2 per cent to 759.5 thousand compared with the first half of 2018. In the EMEA region (western Europe, eastern Europe, Middle East and Africa), new orders were down by 7.0 per cent. The Americas region (North, Central and South America) saw a significant year-on-year decline of 14.2 per cent. Order intake in the APAC region (Asia-Pacific) grew slightly by 0.8 per cent.

Global new orders for IC trucks shrank by 9.0 per cent. There were also declines in order intake for electric forklift trucks (down by 4.5 per cent) and warehouse trucks (down by 2.2 per cent). > TABLE 02

According to the KION Group’s estimates, the trend towards warehouse automation and towards sorting solutions and automated goods transport is continuing and it generated strong demand in the market for supply chain solutions. This trend was further bolstered by capital investment in connection with multichannel and e-commerce strategies. A growing number of businesses invested in the expansion and optimisation of their warehouse and logistics capacities and in automated warehouse systems that include not only solutions for individual processes, such as picking and packing, but also fully integrated end-to-end solutions. Against this backdrop, the Supply Chain Solutions segment achieved a solid level of order intake in the second quarter, but was unable to match the record volume of orders received in the equivalent quarter of 2018.

Procurement markets and conditions in the financial markets

On the whole, prices for the commodities used by the KION Group fell slightly during the first half of 2019. The steel price held steady after having risen in 2018. The average copper price in the first half of 2019 was slightly down on the prior-year period. Crude oil (Brent) fluctuated around an average price of US$66.1 per barrel over the course of the reporting period. It had stood at US$71.03 at the midway point of 2018. The price of rubber recovered the losses that it had recorded in 2018 and surged further ahead.

Currency effects had only a negligible impact on the KION Group’s business situation in the first half of 2019. Despite a rally in the second quarter, the euro recorded modest falls against the US dollar and the Chinese renminbi compared with the prior-year period.