Kion Group AG, the German forklift-maker which listed shares in June, is looking to expand its global sales network via acquisitions to catch up with main competitor Toyota Industries Corp.
Kion is prepared to spend as much as 100 million euros ($136 million) on individual deals to extend its presence in the U.S. and beyond, Chief Financial Officer Thomas Toepfer said in a phone interview yesterday.
“We will continue to make acquisitions, particularly in sales and distribution,” said Toepfer, who joined Kion initially as CFO of the Still brand in 2011 before taking the top finance job last year. “There’s no doubt that Toyota is very strong in the U.S., we are underrepresented in that market right now. But of course we want to target greater share.”
The Wiesbaden, Germany-based company’s ambitions to make purchases echo those of Toyota Industries, whose $19.5 billion in annual sales still dwarf Kion’s $6.1 billion. The Kariya, Japan-based affiliate of the carmaker is also looking for acquisitions that will expand its forklift and tractor business, company President Akira Onishi told Bloomberg Aug. 6. He added that deals above about $1 billion would be difficult.
Kion, which was part of industrial-gas maker Linde AG before a 4 billion-euro buyout in 2006, will probably issue a dividend next year at the low end of its targeted range of 25 percent to 35 percent of net income, according to Toepfer.
“This corridor is valid for the next few years and it’s fair to assume we will start at the bottom end,” he said.
Kion raised 404 million euros in its June share sale to help restructure debt. The listing saw KKR & Co. and Goldman Sachs Group Inc., the two biggest shareholders, reduce their stakes while Weichai Power Co Ltd. increased its share to 30 percent. Weichai has the option to buy a further 3.3 percent stake by the end of the year.
Weichai and Kion are “working systematically through areas of cooperation such as sales in China, purchasing in China, crossover in products,” Toepfer said. “Weichai’s goal is not to buy the whole company.”
Kion today dropped 0.6 percent to 29 euros in Frankfurt trading as of 1:01 p.m. , valuing the company at 2.9 billion euros. The stock has gained 22 percent since the June listing.
Kion still expects a “slight” increase in operating profit this year, according to Toepfer. Earnings before interest and taxes climbed 12 percent to 747 million euros in 2012, representing 11.6 percent of sales.
“It is no secret that the western European market has been bereft of any impetus, but it’s been balanced out by our strong setup in emerging markets,” he said. “Our capex number last year was 155 million euros and we will continue to invest on a similar level.”
Of Kion’s 21,215 employees globally at the and of last year, 3,133 were in China, including a quarter of its research and development staff. It has two manufacturing sites there, in addition to one in India and another in Brazil. At 7,397, the biggest share of workers still reside in its home German market.