The forecasts in this section are derived from the KION Group’s multiple-year market, business, and financial planning, which is based on various assumptions. Market planning takes into account macroeconomic and industry-specific performance, which is described below. Business planning and financial planning are based on expected market performance, but also draw on other assumptions, such as those relating to changes in the cost of materials, labor costs, sale prices, and movements in exchange rates.
With regard to the further course of the coronavirus pandemic, the market assumptions of the International Monetary Fund (IMF), on which this outlook is predicated, are based on the expectation of a continued need for contact restrictions until vaccination rates rise and treatments improve over the course of the year. According to the assumptions, this will enable the potential transmission of infection to gradually be brought down to a low level.
Expected macroeconomic conditions
Following the global economic slump triggered by the coronavirus pandemic in 2020, the IMF’s outlook for 2021 – published at the end of January 2021 – anticipates that global economic output will recover with a rise of 5.5 percent, taking it above the pre-crisis level in 2019. The strength of the recovery will vary significantly from country to country, for example because of differences in access to medical resources to contain the coronavirus pandemic and the extent and effectiveness of government support packages.
The IMF predicts growth of 4.3 percent for the developed economies in 2021. This will be underpinned by the continuation of the central banks’ expansionary monetary policy, fiscal stimulus packages, and an economic recovery resulting from the increased containment of the coronavirus pandemic as various vaccines become more widely available. However, this would not fully compensate for the decline in economic output in 2020. US growth is expected to be above the 4.3 percent mark at 5.1 percent, while the eurozone’s growth of 4.2 percent will be slightly below this level.
The IMF predicts that the economic output of the emerging markets and developing countries will increase by 6.3 percent in 2021. This will be driven by the strong recovery in China, where economic growth of 8.1 percent is expected.
Reflecting the economic recovery, the volume of global trade will increase by 8.1 percent in 2021 according to the IMF. In absolute terms, global trade will thus remain significantly below the level recorded in the years before the coronavirus pandemic. In this context, the IMF also predicts that commodity prices will rise sharply, which would likely affect the purchase prices of the materials used by the KION Group.
According to the IMF, the main risks to the macroeconomic outlook are the continued spread and further mutations of coronavirus, delays in procuring and distributing the vaccines, rising government debt and an increasing number of company insolvencies. On the other hand, opportunities could arise, in particular, if the pandemic is brought under control sooner because of more efficient vaccination programs and improved treatment.
Expected sectoral conditions
In the KION Group’s view, the global material handling market should see strong growth in 2021 if economic conditions improve as expected. This is being driven by the increasing market momentum of the supply chain solutions market and a further gradual recovery of the global market for industrial trucks. Overall, the global material handling market is expected to grow at a higher rate than global GDP. This is primarily because of the fundamental growth drivers, particularly the fragmentation of value chains and consumers’ increasing preference for e-commerce, which the KION Group believes has become even more important as a result of the coronavirus pandemic. Growth at regional level, especially in the more cyclical market for industrial trucks, will again depend heavily on economic conditions in the main sales markets.
Following the impact from the pandemic in 2020, the KION Group is expecting a gradual market recovery for new business with industrial trucks in 2021, with a percentage rise in unit sales that is in the mid-single-digit range and above the medium-term growth trend of around 4 percent. This rise is expected to be driven primarily by the recovery of the EMEA region, which was heavily affected by the pandemic in 2020, and by sustained growth in China. However, the latter is likely to be significantly lower than the exceptionally strong growth seen in 2020. The KION Group is in an excellent position from which to take advantage of the continuing electrification and automation of warehouses. The high number of trucks in operation worldwide provides a sustainable customer base for the service business.
The market for supply chain solutions is likely to continue expanding in 2021, particularly as a result of the sustained uptrend in e-commerce, which was further reinforced by the changes in consumer buying behavior during the pandemic. The trend for micro-fulfillment warehouses is also expected to continue. From a technology perspective, automation and robotics solutions will remain the main drivers. In the medium-term double digit market growth is expected.
