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XtraBlatt issue 02-2016

  • Text
  • Krone
  • Straw
  • Machinery
  • Agricultural
  • Forage
  • Harvest
  • Menschen
  • Alfons
  • Enterprise
  • Rotor

MENSCHEN INTERVIEW

MENSCHEN INTERVIEW Alfons Veer sees real value in terms of trust and security in the factors continuity of the company management and nearness of the owner to market and customers. XtraBlatt: But surely strategic planning, in which you play an important role, does not see in this the end of the road?! Alfons Veer: Certainly not. An important aspect hereby is the winning of further market share in the markets we already serve as manufacturer and, through this, increasing turnover. XtraBlatt: This could be fairly difficult: In Germany, for instance … Alfons Veer: I agree. However, in Europe there is still a lot of potential in this respect, even with the present difficult market situation. XtraBlatt: What makes you optimistic? Alfons Veer: An important aspect for more optimism is the expansion of our sales organisations. But I also see the owner’s nearness to market and customer as a real value. In my assessment, this is unique in its form in our branch and in an enterprise of our size. Virtual affinity, commitment, authenticity, a great continuity in the company management – these engender trust on the part of customers and offer security. XtraBlatt: Keyword security - growth of 400%, such as Krone realised between 2001 and 2016, cannot be financed out of the petty cash. Can a company such as Krone remain “healthy” in the face of the global challenges? Alfons Veer: Absolutely! This can be seen even now, alone in relation to the almost 440 m euro own capital against a balance sheet sum of around 950 m euro. Naturally, the growth you mention here cannot be financed alone from own capital. Credit lines are necessary. However, where you have a 2 bn euro turnover, a net liability of less than 90 m euro is no reason for sleepless nights. In fact, I would say it’s a clear sign of stability. 1 XtraBlatt: Talking of signs … the company owner defined the guideline 20-20-20 in 2014, i.e. up to 2020 at least 20% share to be achieved in all markets. For agricultural machinery, this would point to a turnover target of 800 m euro. As calculated from summer 2016, there therefore remains 235 m euro growth to achieve. Is this not very ambitious? Alfons Veer: I cannot argue with that. But the aim is still not impossible. According to present market analysis, we estimate the truck sector will, in three to four years, once again change and tend towards a downward phase while the current further investment stoppage in agricultural machinery should by that time have changed direction, providing some following wind. We are preparing for this situation by developing our own structures. Take France as an example: There we had a turnover of around 40 m euro in 2015/2016. A market share of 20% represents 80 m euro. In normal market conditions, and with a partially adjusted product range, that would be possible – thanks to the establishment now of our own French sales organisation and, with that, considerably more nearness to our customers. In Great Britain, this change in direction brought us an increase of 6 m euro to a total turnover of around 25 m euro within six years. Clearly, however, we have to first invest heavily in the respective markets. XtraBlatt: In the long term, can Krone remain with a purely European-based production structure? Or in future does it need a factory in Asia? In India, for example? Alfons Veer: If such a step turns out to be practical in the long term, then I see this development first of all in North America, especially with regard to balers and harvesting machinery. This, above all, depends on the relationship of the euro to the dollar. However, these types of considerations are not at the head of the queue. Other actions have precedence. 20

The change in corporate form of the Krone Holding in early 2016 into a European stock corporation (SE) is partly required under the German Stock Corporation Act 2016: But it also represents a resetting of the points as part of medium term restructuring strategy for the concern management. 2 Alfons Veer: Not planned, but naturally such thoughts are regularly discussed in our strategy talks. Cooperation developments are included, where they make sense, but no really “big moves”. After all, we have a clear aim: sustained family ownership and no expensive outside capital with attached voting rights hauled on board. XtraBlatt: For example? XtraBlatt: What’s the background to the changeover which resulted in the legal form SE & Co. KG being adopted in early 2016? Alfons Veer: Currently a new test centre is being prepared that will be suitable for both the green as well as the blue line. And looking further ahead, a common research department could very well join this. XtraBlatt: Especially in such cases, where are the aforementioned synergies to be found? Alfons Veer: Telemetry will certainly be a central theme, to mention only one example. Technologically, I see the green line in front here, i.e. agricultural machinery. However, the truck sector will be the greater user in terms of unit numbers. In this respect, there are enormous challenges from the market, whether these involve load capacity concepts, preventive maintenance or workshop management. On the other hand, the agricultural machinery sector will be in a good positioned to profit long-term or even permanently from any such developments. If we than calculate exploitation of other synergies on product development, and I cannot even begin to count the possibilities in this respect, this contributes massively to the previously mentioned turnover targets. For 2026 – i.e. in 10 years – I calculate 1 bn in agricultural machinery and 2 bn in the trailer sector as not unrealistic. Above all, this is possible without over-proportional leaps in investment. Even now, Krone has set the points for this course and looks to be well prepared. Alfons Veer: Nowadays, the Krone Group generates more than 70 % of its turnover from outside Germany. For this reason, we decided to change the enterprise into a European stock corporation (SE). While German legal forms such as a GmbH & Co.KG are seen as complicated and not transparent over the country’s borders, the form SE needs no extra explanation. Over and above this, the steps in growth we have already described have multiple consequences including, alongside capital market requirements, ones that are purely organisational. This means, among other things, establishing both sectors in terms of business management and administrative board personnel so that the owner family including Bernard Krone is serviced with an interdisciplinary overview enabling concentration on the strategic developments of the Krone family concern. Thus the change of company form under the German Stock Corporation Act and the medium-term planned modification of corporate management. XtraBlatt: Doesn’t this represent a contradiction to nearness of the owner family to customers and market? Alfons Veer: Certainly not! On the contrary, this strategy creates better conditions for this factor. XtraBlatt: Thank you very much for the discussion, Mr Veer. XtraBlatt: Talking of turnovers, are further cooperation agreements planned in the developments mentioned? 21