Annual Report 2003 - Kardex

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8 DYNAMIC STORAGE AND RETRIEVAL SYSTEMS DIVISION Net revenues in 2003 by markets 24.2% 12.8% 4.6% Euro countries Other European countries North, Central, and South America Asia, Pacific Rim 58.4% Number of employees at December 31, 2003 286 156 254 1241 total Development and production Engineering and sales Installation and maintenance Administration 545 The Dynamic Storage and Retrieval Systems Division (KRM) was hit by low worldwide demand for capital goods. Net revenues at KRM, the largest division in the Kardex Remstar Group, fell by 3% from CHF 263.8 million to CHF 255.9 million. As a result, KRM’s contribution to total Group revenue dropped from 48% to 41.7%. America posted a decline of 12.4%, the largest in the Group, despite the fact that sales in local currency were up by 1.5%. In central Europe, KRM’s most important sales region, the decline in revenues amounted to 3%, despite the rise in the value of the euro. An increase of 3.7% was reported by northern Europe, which contributed almost a quarter of the division’s revenues. Central and South America; and the Middle and Far East/Pacific Rim. This arrangement reflects KRM’s strategy of maintaining a worldwide presence and at the same time creates the focus necessary for the successful running of the division’s operations. KRM FOLLOWS WORLDWIDE INDUSTRIALIZATION KRM systems are designed to guarantee customers a high degree of rationalization and are most effective in environments where automation, modernization and rationalization are required or where space is restricted or expensive. Since most of KRM’s customers are to be found in industry, KRM naturally follows the industrialization process. Good current examples of this can be seen in Korea, China and India. Former bastions of industrial activity, in Europe for instance, are no longer as dynamic as they used to be. Manufacturing centers are shifting increasingly to eastern Europe and the Far East. This development – quite literally – points the way forward for KRM’s marketing. KRM has three main options for establishing a worldwide presence. The first of these is export. KRM can export from its production centers in Germany and the USA to other countries. In the case of orders like these, the project planning, delivery, installation and maintenance all come from abroad, which means the solution offered may be slightly more expensive for the customer. This, in turn, reduces KRM’s chances of landing the order. In order to remain competitive in its markets, whether established or young, KRM must have distribution and service facilities locally. In recent years, KRM has amassed a great deal of experience with distributors. At first sight, the national or regional distributor who works on his own account may appear to be the least risky solution. However, the lower investment cost involved is often reflected in lower chances of success. To help with project management distributors often draw on the services of all-rounders, who are responsible for several brands and systems. This means the sophisticated features that set KRM systems apart are not always demonstrated to their fullest advantage. Apart from this, working through a distributor often
dilutes the sense of loyalty that usually develops between KRM and its customers. This is important because customer loyalty is a prerequisite for follow-up business, which in KRM’s case accounts for half of sales. ADVANTAGES FOR KRM DISTRIBUTION POINTS With its internationalism and vast range of systems, KRM is always a difficult team to beat when the staff of a KRM branch located close to the customer can handle project management. Having a company-owned operation in a market with sufficient potential means being able to speak the same language, understanding the customer’s needs better, being closer to the user – and not only the buyer –, working out solutions with the help of the customers and being able to pass on feedback to development headquarters. Customers benefit faster and more directly from the company’s innovations and can look forward to shorter reaction times when service is required. And it should not be forgotten that 75% of all industrial customers opt for the advantages of a tailor-made service agreement. KRM’s policy of maintaining local operations, however, also has an international aspect. In an increasingly global economy, for example, it is not unusual for a project to be planned in Munich, decided in Barcelona and implemented in Paris. Apart from this, there is also a not insignificant local aspect. KRM’s competitors include not only comparable international organizations in the materials handling sector but also many local and regional suppliers who set the standards for customer proximity. KRM: AMBITIONS IN THE FAR EAST KRM has been gathering experience in the Far East for eight years now. Initial steps were taken by Kardex’s gateway to the Far East, Kardex Systems Ltd. in Cyprus. This was followed by premises shared with other allied European companies, and customers were mainly European investors. Today, KRM has its own offices in China (Shanghai and Peking), Taiwan, Singapore and India, and one distributor in Japan. Even if sales are still relatively modest compared with the massive potential, the start-up phase is now quite definitely over. A quarter of the business is already being conducted with local customers. www.krm-division.com DYNAMIC STORAGE AND RETRIEVAL SYSTEMS DIVISION 1) KRM follows industrialization (pale-blue zone) and today has distribution and service centers at 39 locations worldwide. 2) Kardex’s gateway to the Middle and Far East is in Limassol, Cyprus. 3) With 10 000 km between it and headquarters, the Singapore branch is the one furthest away from the center of operations. 9
Page 1 and 2: Annual Report 2003 The Far East get
Page 3 and 4: KEY FIGURES Kardex Remstar Group CH
Page 5 and 6: Five-year summary KEY FIGURES Karde
Page 7 and 8: Ladies and Gentlemen A glance at th
Page 9 and 10: of measures that will lead to incre
Page 11: Dynamic Storage and Retrieval Syste
Page 15 and 16: Industrial Automation and Conveyor
Page 17 and 18: early as possible, has short decisi
Page 19 and 20: Static Storage Systems Division STO
Page 21 and 22: ay shelving system. The remaining 1
Page 23 and 24: Special-Purpose Handling Systems Di
Page 25 and 26: and customized conveying systems. f
Page 27 and 28: Under intangible assets, goodwill d
Page 29 and 30: TCHF ASSETS FINANCIAL INFORMATION R
Page 31 and 32: 1: Accounting principles GENERAL IN
Page 33 and 34: RETIREMENT BENEFITS Most Group comp
Page 35 and 36: 12: Inventories 31.12.2003 31.12.20
Page 37 and 38: Maturities of long-term debt: 31.12
Page 39 and 40: 25: Currency exchange rates Average
Page 41 and 42: FINANCIAL INFORMATION REGARDING THE
Page 43 and 44: CHF ASSETS FINANCIAL INFORMATION RE
Page 45 and 46: INVESTMENTS FINANCIAL INFORMATION R
Page 47 and 48: FINANCIAL INFORMATION REGARDING KAR
Page 49 and 50: TASKS OF THE BOARD OF DIRECTORS The
Page 51 and 52: Richard Flury 1942, Swiss citizen,
Page 53 and 54: Shareholders’ participation right
Page 55 and 56: KARDEX REMSTAR COMPANIES AND DISTRI
Page 57 and 58: The Group publishes Annual Reports

Annual Report 2003 - Kardex

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