Business performance in the Group
The KION Group further expanded its global sales and service network in the first half of 2021. In February, in the Industrial Trucks & Services segment, the KION Group further strengthened Linde Material Handling’s dealer network by acquiring the remaining shares in the Hamburg-based wholesaler and service provider Hans Joachim Jetschke Industriefahrzeuge (GmbH & Co.) KG and JETSCHKE GmbH. As a result of the acquisitions, these companies are now wholly owned subsidiaries. The purchase consideration for 79 percent of the shares totaled €13.9 million. In the Chinese market, KION’s equity investment in a newly established sales company in the Chinese city of Xi’an will help it to expand the local presence of the brand companies Linde and Baoli. KION’s sales network in China is also to be expanded through partnerships and local dealers.
The construction of an additional factory for manufacturing Linde and Baoli counterbalance trucks in the eastern Chinese city of Jinan, which got under way in 2020, continued on schedule during the reporting period. This expansion investment, which is also focused on the value segment in China, amounts to around €100 million. The factory is still scheduled to go into operation in 2022. The new industrial truck plant in Kołbaskowo, near Szczecin in Poland, came on stream in the second quarter of 2021. The total capital expenditure of around €80 million covered not only the construction of a new manufacturing facility but also an additional research and development center.
The capacity and structural program initiated in 2020 in connection with the coronavirus pandemic helped to reduce operating costs in the reporting period. The ongoing program, which mainly affects the Industrial Trucks & Services segment, is aimed at optimizing the organizational structures in production, sales, and service in the EMEA region. The KION Group was able to further reduce its financial debt thanks to the healthy increase in free cash flow in the first quarter of 2021. The variable-rate tranche of the promissory note, which had a face value of €167.0 million and was due to mature in 2024, was repaid ahead of schedule at the end of April 2021, thereby contributing to a further decrease in leverage.