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Kardex Group

The Kardex Group is on the road to recovery from the serious, economic downturn in 2009 and 2010. Bookings have been imp...

Owing to the late-cyclical nature of demand for warehouse logistics solutions, the Kardex Group has only gradually started to recover from the economic crisis this year. Bookings rose by 34% compared to the same period in the previous year, and were even up by 23% against the second half of 2010. Adjusted for acquisitions, bookings increased by 25% in the first half. With an order backlog of EUR 156.8 million at the end of June, the order books are well filled compared to the lows reported on 30 June 2010 (EUR 129.6 million) and at the end of 2010 (EUR 130.0 million). After getting off to a tentative start at the beginning of the year, revenues rose continually month for month, and in June reached year-to-date peaks in every division. Overall, net revenues of EUR 221.5 million (adjusted for the acquisition of Kardex Mlog EUR 188.1 million) were posted, which is 31.2% higher than in the corresponding year-back period (EUR 143.4 million) and almost 8% more than in the − traditionally stronger - second half of 2010. However, the higher volumes did not translate into profitability until the second quarter. The Group achieved total EBITDA of EUR 7.4 million and EBIT of EUR 0.5 million, the newly integrated Kardex Mlog impacting the Group result with a negative EBIT margin of 9.0% and an operating loss of EUR 3.0 million.The result remains unsatisfactory and casts a shadow over the encouraging revenue trend and the associated positive perception of the Kardex Group in the warehouse logistics market. The integration of Kardex Mlog is increasingly bearing fruit in terms of marketing. The potential of the one-stop shop strategy is reflected in initial joint project successes. In the first half of the year, five orders were secured, each with combined offers from at least two of the three divisions.


Kardex Remstar Division

In the first half of 2011, the net revenues of the Kardex Remstar Division (dynamic storage and retrieval systems) increased by 26.7% to EUR 106.2 million (EUR 83.8 million) thanks to a combination of the economic recovery, a redoubling of sales activities and new product launches. Improvements in the utilization of plant capacity led to a recovery of the operating result (EBIT) to EUR 3.2 million (1H 2010: EUR -4.2 million). Bookings are continuing to make positive progress. In the first half of the year, the division booked orders amounting to EUR 119.5 million (EUR 100.5 million). The order backlog as of 30 June increased from EUR 66.3 million to EUR 73.1 million. Further projects designed to optimize the cost structure and adjust it to the order situation are planned or already underway in all areas. The improved order backlog at the end of the first half of 2011 and the implementation of the ongoing projects will continue to have a positive impact on the division's result despite a tougher competitive situation.


Kardex Stow Division
In the first half of 2011, Kardex Stow lifted sales by 37.8% to EUR 82.1 million and achieved an operating result of EUR 1.2 million (1H 2011: EUR 0.1 million). The market environment improved compared with the previous year, although part of the growth in revenues was attributable to around 15% higher steel prices. Bookings increased by 33.5% to EUR 97.2 million and at the end of the period under review the order backlog stood at EUR 46.6 million. The gratifying growth in demand came from all markets served by Kardex Stow. Net revenues in China increased by more than 63%. In 2011, newly launched products, such as the Stow Atlas deep lane shuttle system jointly developed with Kardex Mlog and the silo system offered for the first time, enjoyed strong demand from selected customers.


Kardex Mlog Division

In the first half of 2011, the Kardex Mlog Division posted revenues of EUR 33.4 million. At the same time, EBIT came to a negative EUR -3.0 million. During the period under review, bookings amounted to EUR 35.8 million. The negative operating result is unsatisfactory and, in addition to the amortization of intangible fixed assets amounting to EUR 1.4 million from the first-time consolidation, is essentially attributable to two factors: first, the rising, competition-related pressure on margins, and second, the large pool of fixed costs at the plant in Neuenstadt am Kocher, where capacity is still not fully utilized. This situation calls for rapid corrective measures which are now being introduced, but which will not filter through to the result until the 2012 financial year.

The integration of Kardex Mlog into the Kardex Group is nevertheless showing some initial successes. In the context of the internationalization strategy, initial orders were secured from Turkey, Belgium, Poland, Denmark and Austria. Since the integration in May 2010 a new mini load stacker crane for cartons and boxes for Kardex Stow has been developed, as well as a shuttle for the automation of block storage. Both machines met with a positive market reception and several units have already been sold.


Changes in management structure

After the General Meeting on 26 April 2011, chairmanship of the company was transferred to Philipp Buhofer. As of 1 June 2011, the Board of Directors streamlined the Group's organization with a view to shortening the decision-making process, bringing it closer to the customer and so strengthening the market positioning of the three divisions and the individual companies. The Group will now be headed by a newly created Executive Committee comprising the Chairman and Vice Chairman of the Board of Directors, the three division heads of Kardex Remstar, Kardex Stow and Kardex Mlog, as well as the Group CFO. There is to be a change of division head at Kardex Mlog. As of 1 September 2011, Hans-Jürgen Heitzer, currently responsible for Mlog Logistics' system business, will succeed Stefan Seidl as head of the division.


Adjustments to the implementation of strategy

From a long-term perspective, the Kardex Group's current areas of business are attractive and its combined expertise is meeting with a positive echo from the market. However, there is a need for structural and organizational measures to implement strategy and at the same time sustainably enhance profitability.

Kardex Remstar is operating in an environment which has become increasingly competitive in recent years, which calls for a continuous improvement of cost structures in addition to innovative efforts to remain the technological leader. Among other things, a review of the optimum use of the various company sites is underway. The feasibility of implementing the optimization projects prepared internally under the leadership of new division head Jens Fankhänel is currently being examined in collaboration with external industry specialists.

Kardex Stow is operating in a competitive market environment. Thanks to its highly automated Belgian plant and the established plant in Shanghai, this division is well positioned on the cost front compared with its competitors. As the division's geographical sphere of action is limited by high transport costs, various strategic options are presently being looked into, including the acquisition of local suppliers and entering into partnerships.

In the case of Kardex Mlog, cost and complexity considerations mean that the drive to internationalize the business will be confined to neighboring European countries in the medium term. At the same time, it will be essential to reduce the cost of manufacturing the Group's successful products. An external team of experienced logistics experts is preparing solutions for this in conjunction with the respective company managers.


Plans to convert financial accounting to Swiss GAAP ARR (FER)

The Board of Directors of Kardex AG has decided to convert the Kardex Group's financial accounting from IFRS (International Financial Reporting Standards) to Swiss GAAP ARR (FER) with effect from the 2011 annual financial statements as of 1 January 2011. In the Board's view, the ever more complex detailed provisions of IFRS do not create any additional transparency for small and mid caps and have become increasingly unattractive owing to the considerable amount of work involved and the resulting costs. Swiss GAAP ARR (FER) is a recognized accounting standard which in future will allow the company to continue to publish high-quality, transparent financial reports, including segment reporting, at half-yearly intervals in compliance with the requirement to present a true and fair picture.


The change in the market segment on SIX Swiss Exchange is linked to the conversion of the accounting standard. After the change, the company's shares will no longer be traded in the Main Standard, but in the Domestic Standard.


Capital increase in preparation

In order to strengthen its equity base and increase its financial flexibility, Kardex AG will be undertaking a capital increase with full subscription rights for all shareholders in the third quarter. The approximately CHF 30 million in new funds which the Group plans to raise will enable it to refinance with shareholders' equity roughly half of the convertible bond issue which matured at the end of June 2011. It has in the meantime been repaid with a bank loan. To assure its medium-term debt financing, the Kardex Group has concluded financing agreements with Swiss and foreign banks which adequately cover its need to finance working capital, as well as to granting of guarantees.



Seen from the present perspective, the market recovery is continuing across all divisions. According to management’s estimates, the results for the second half of the year should be higher than those for the first six months. However, the medium-term economic impact of the persisting global debt crisis is difficult to assess. For this reason, the main focus of the entire organization is on further cost reductions and at the same time on maintaining innovative capacity and intensive marketing.

 You will find the complete Interim Report 2001 on


Key figures of the Kardex Group in EUR millions

 1 January to 30 June 2011


 1 January to 30 June 2010









Order backlog (30 June)




Net revenues




Operating result (EBIT)



– 6.7

EBIT in % of revenues, net



– 4.4%

Operating result before depreciation (EBITDA)



– 0.5

EBITDA in % of revenues, net



– 0.3%

Result for the period



– 7.6

Result for the period in % of net revenues



– 5.0%









Capital expenditure (gross)




Net cash flow



– 6.6

Net cash flow in % of revenues, net



– 4.4%

Free cash flow



– 34.0

Free cash flow  in % of revenues, net



– 22.6%

As of




Net debt








Equity ratio in %




Employees (full-time equivalents)

2 136

2 122

2 130





Kardex Remstar operating segment

1 January to 30 June 2011


1 January to 30 June 2010





Order backlog (30 June)




Segment net revenues




Operating result (EBIT)



– 4.2

EBIT as % of segment net revenues



– 5.0%

Employees (full-time equivalents as of 30 June)

1 292


1 311





Kardex Stow operating segment








Order backlog (30 June)




Segment net revenues




Operating result (EBIT)




EBIT in % of segment net revenues




Employees (full-time equivalents as of 30 June)








Kardex Mlog operating segment (since 1 May 2010)








Order backlog (30 June)




Segment net revenues




Operating result (EBIT)



– 1.0

EBIT in % of segment net revenues



– 13.9%

Employees (full-time equivalents as of 30 June)








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