Slide 1: KION Q2 Update Call 2013
KION Q2 UPDATE CALL 2013 Gordon Riske, CEO Thomas Toepfer, CFO Wiesbaden, 14 August 2013
Slide 2: Agenda
AGENDA 1 Successful IPO Gordon Riske 2 Highlights H1 2013 Gordon Riske 3 Financial Update Thomas Toepfer 4 Outlook Gordon Riske 14 August 2013 | Q2 Update Call 2
Slide 3: Agenda
AGENDA 1 Successful IPO Gordon Riske 2 Highlights H1 2013 Gordon Riske 3 Financial Update Thomas Toepfer 4 Outlook Gordon Riske 14 August 2013 | Q2 Update Call 3
Slide 4: Successful IPO: Significant deleveraging
SUCCESSFUL IPO Significant deleveraging IPO as basis for profitable growth Reduction of net financial leverage – Attractive growth industry – Global leader: Western Europe & growth Financial markets leverage 2.6x 1.4x – Technology leader: price premium – Integrated business model – Profitability ben
Slide 5: Agenda
AGENDA 1 Successful IPO Gordon Riske 2 Highlights H1 2013 Gordon Riske 3 Financial Update Thomas Toepfer 4 Outlook Gordon Riske 14 August 2013 | Q2 Update Call 5
Slide 6: H1 2013: Financial Highlights
H1 2013: FINANCIAL HIGHLIGHTS Sustained robust business performance in H1 Order intake at high level Revenue up by 0.7% to record level – €2,250m in H1; slightly below prior year – €2,234m in H1; up 0.7% vs. 2012 by -3.6% – Q2 up by 2.4%; new business and services – Weakness in Western Europe both e
Slide 7: H1 2013: Operational Highlights
H1 2013: OPERATIONAL HIGHLIGHTS Continuation of profitable growth strategy Continued expansion in emerging markets – Absolute unit growth especially in China, Eastern Europe and Brazil – Share of new orders in emerging markets increased to 34% in H1 2013 Further step in optimization of global footpr
Slide 8: Current Market Development
CURRENT MARKET DEVELOPMENT Global pick-up in demand, Western Europe still slow Global market improves by 7% in Q2 Global market Q1 12 – Q2 13 – Global orders above previous year Growth y-o-y (r.s.) – After stable Q1 pick-up in demand in Q2 Order intake in tsd units (l.s.) – Volume growth driven by C
Slide 9: KION Performance
KION PERFORMANCE High order intake level driven by emerging markets growth Overall solid performance in H1 2013 KION global orders – High level of almost 74,000 units after stronger Q2 – Order intake in Q2 just below prior year level in thousands of units – Overall solid demand, but two speed region
Slide 10: Western Europe
WESTERN EUROPE Relative weakness to strong prior year comparison Market development KION performance & activities – Pick-up in Q2 after weak Q1 – Maintaining market leadership with 36% – Slow investment activity in core markets – Balancing profitability and volume growth – Overall weak start in Germ
Slide 11: Eastern Europe
EASTERN EUROPE Solid growth ahead of recovering market Market development KION performance & activities – Russia: solid growth driven by IC trucks – Continued strong growth throughout H1 – Poland: strong E- and WH-truck demand – Strengthening of leading market position – Peripheral markets show heal
Slide 12: Central and South America
CENTRAL AND SOUTH AMERICA Gaining share in rapidly growing market Market development KION performance & activities – Brazil most important market with 46% – Gaining share in competitive Brazilian regional share market – 44% growth in Brazilian market driven by – All product segments addressed in Bra
Slide 13: China
CHINA Participating in Q2 up-turn Market development KION performance & activities – Improvement after government – Highest order level ever change-over – Full IC truck product offering across all – Strong pick-up in second quarter after price segments weak Q1 – New Linde 3-ton IC torque converter t
Slide 14: Major R&D Facilities in China
MAJOR R&D FACILITIES IN CHINA Dedicated R&D platform for global value and economy segments KION R&D in China Employees in full-time equivalents (FTE) Local products developed in China – Within last 3 years: 11 product launches of which 8 were specifically 211 198 for Chinese market – Multiple produc
Slide 15: Services in the Integrated Business Model
SERVICES IN THE INTEGRATED BUSINESS MODEL 43% share of total revenues with strong and stable margins KION service offering – H1 highlights Service revenue split H1 2013 – Stable and profitable service business is H1 2013 service revenues: €958m backbone of KION profitability – Services drive sales g
Slide 16: Agenda
AGENDA 1 Successful IPO Gordon Riske 2 Highlights H1 2013 Gordon Riske 3 Financial Update Thomas Toepfer 4 Outlook Gordon Riske 14 August 2013 | Q2 Update Call 16
Slide 17: Key Financials H1
KEY FINANCIALS H1 Strong performance - growth of revenues and profitability Order intake1 (€m) Revenues1 (€m) Adj. EBIT1,2 (€m) Net income and growth (%) and growth (%) and margin (%) and growth (%) -3.6% +0.7% 8.7% 9.0% 2,334 2,250 2,218 2,234 +4.2% 200 192 >100% 70 26 H1 2012 H1 2013 H1 2012 H1 20
Slide 18: Key Financials Q2
KEY FINANCIALS Q2 Strong performance - growth of revenues and profitability Order intake1 (€m) Revenues1 (€m) Adj. EBIT1,2 (€m) Net income and growth (%) and growth (%) and margin (%) and growth (%) 9.1% 9.4% -5.2% +2.4% 1,166 1,149 1,105 1,122 >100% +5.6% 42 102 108 9 Q2 2012 Q2 2013 Q2 2012 Q2 201
Slide 19: Revenue Growth
REVENUE GROWTH Revenue growth across all product categories in Q2 H1 2013: revenue by product categories Q2 2013: revenue by product categories (€m) (€m) +0.7% +2.4% Services Services -0.1% +1.8% +1.8% +3.3% 1 3 2,234 1,149 11 11 3 3 12 -1 2,218 1,122 1 1 H1 2012 New After Sales Rental Used & H1 201
Slide 20: Continuing Margin Expansion
CONTINUING MARGIN EXPANSION Strong profitability through price assertion & cost improvement Adjusted EBIT and margin1,2 Key drivers for improved profitability 8.7% 9.0% 9.1% 9.4% – Gross profit improvement in all main product segments 200 – Significant new truck margin increase 192 supported by posi
Slide 21: Adjusted EBIT to Net Income H1 2013
ADJUSTED EBIT TO NET INCOME H1 2013 Significant increase of net income 1 € million H1 2013 H1 2012 Change Adjusted EBIT1,2 200 192 4.2% Non-recurring items -7 21 <-100% KION acquisition items -15 -18 16.3% Reported EBIT 178 195 -8.9% Net financial expenses -112 -125 10.6% EBT 66 70 -6.0% Taxes 4 -44
Slide 22: Adjusted EBIT to Net Income Q2 2013
ADJUSTED EBIT TO NET INCOME Q2 2013 Significant increase of net income € million Q2 2013 Q2 2012 Change – 2012 includes reversal of EBIT from Hydraulics Adjusted EBIT1,2 108 102 5.6% of €9m Non-recurring items -8 12 <-100% – 2013 includes IPO and minor restructuring costs KION acquisition items -8 -
Slide 23: Cash Flow Performance
CASH FLOW PERFORMANCE Free cash flow in H1 above prior year – 2012 incl. ca. €28m of Hydraulics EBITDA € million H1 2013 H1 2012 Change – Total TWC with €599m ca. €100m lower than EBITDA (excl. FS segment) 313 335 -6.5% 2012 (excl. LHY) Change of trade working capital -98 -82 -19.6% – Regular tax pa
Slide 24: Net Debt Improvement
NET DEBT IMPROVEMENT Corporate style capital structure post IPO IPO effects on net debt (€m) Pro forma LTM leverage1 2,607 392 Financial leverage 1.4x Net leasing 513 liabilities Total adj. leverage 2.7x 1,905 392 Net 1,702 702 pension liabilities 513 Improved credit ratings Net financial 1,000 debt
Slide 25: Post IPO Refinancing
POST IPO REFINANCING Long maturity profile with significant liquidity headroom Debt repayments post IPO Total outstanding financial debt in € million1 – New Revolving Credit Facility (RCF3) of €995m – Only bonds issued in 2011 and 2013 as term debt for ongoing liquidity and term debt repayment – RCF
Slide 26: Agenda
AGENDA 1 Successful IPO Gordon Riske 2 Highlights H1 2013 Gordon Riske 3 Financial Update Thomas Toepfer 4 Outlook Gordon Riske 14 August 2013 | Q2 Update Call 26
Slide 27: Outlook
OUTLOOK Confirming our previous outlook Global economic growth forecasts have recently been reduced by the IMF – Continued weakness in Western Europe – Lower growth in emerging markets Slight recovery of global forklift truck demand in 2013 vs. 2012 after pick-up in H1 – Stable demand in Western Eur
Slide 28: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Attractive market with growth profile above GDP 2 Global leader – strong home base and well positioned in growth markets 3 Technology leadership drives premium positioning and customer value 4 Robust integrated business model with high contribution from services 5 Profitabili
Slide 29: We Keep the World Moving
WE KEEP THE WORLD MOVING 14 August 2013 | Q2 Update Call 29
Slide 30: Disclaimer
DISCLAIMER This document has been prepared by KION GROUP AG (the “Company”) solely for informational purposes. For the purposes of this notice, the presentation that follows shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on behalf of t