Industry observers are quick to point out that 2004 was an improved year for materials handling equipment suppliers. And that was certainly true for the largest systems suppliers too.

To begin, all 20 of the companies that made Modern's list a year ago have returned for 2004. Among them, 16 companies showed revenue increases, two reported virtually identical revenues to 2003 and two experienced revenue declines. And that's much stronger than 2003 when only 11 companies reported gains, eight saw revenue decreases and one remained flat.

Combined revenue for the top 20 systems suppliers was the highest in many years, as total revenue for all companies hit $13.8 billion—nearly $1.9 billion higher than last year. The average increase per company was approximately 15%—far outstripping the average 4% gain in 2003.

For the first time in two years, the top five saw a member drop from its ranks as well as some readjustments among the top five.

Due primarily to divestment activity, Swisslog fell out of that group. As a result, the company's revenues dropped by $60 million to $540 million in 2004, following the sell off of Transnorm System GmbH, which concluded a reorganization that had already divested four business units. This year, Swisslog is 6 on the list. Taking Swisslog's spot at number five was Murata Machinery Ltd., which reported 2004 revenues of $550 million, an $80 million jump.

Siemens topped the list for a fourth consecutive year, ringing in a $400 million revenue increase over 2003. FKI leapfrogged Daifuku and Schaefer to the second position with 2004 revenues exceeding $2.4 billion. Daifuku remained in the third spot by outflanking Schaefer, which saw a modest gain of 3.6% over 2003 revenues. Daifuku reported a 14.1% 2004 revenue increase; primarily a result of increased demand for the company's automation offerings.

And yes, there is a major difference in size between the five largest suppliers and the other companies on the list. The industry's top five companies reported total revenues of $9.49 billion compared to a combined $4.56 billion for all others.

Europe continued its reign as the hotbed for system suppliers—13 of the top 20 hail from this continent. Japan placed two companies on the list, both in the top five. Meanwhile, four companies are U.S. based and one is from Australia.

European companies performed well in 2004 with an average increase of 8%. That number would have been even higher had Durr's revenue not fallen $186 million. That pushed the company from the 11 spot a year ago to 20 today.

U.S. companies experienced a modest average increase of 4.25% in 2004. Both Japanese companies on the list saw gains exceeding 14% over 2003 revenue totals.

And once again, the bar was raised in 2004 for minimum revenues to make the list. While last year's threshold was $115 million, set by Flexlink, AB, 2004's mark was set by Durr, at $139 million.

Eligibility requirements in Modern's survey stipulate that companies must not only provide equipment, but supply materials handling systems as well. Companies must also maintain a North American operations center and manufacture a minimum of two major handling system components. In addition to manufacturing, companies must have a full-time staff that designs, installs, integrates and implements materials handling systems that include two or more major equipment installations. Eligible components include transportation devices, picking units, storage and staging equipment, information management systems, sortation systems, data capture technologies and other systems. The table below illustrates which components each listed company supplies.

While no companies entered or exited this year's top 20, several made notable moves beyond FKI, Murata, Swisslog and Durr.

Witron continued its assault on the top 10 as the company jumped three spots to 13 this year—the survey's biggest positive mover—posting a 23.8% revenue increase from 2003. A family-owned corporation headquartered in Germany, Witron made its top 20 debut just last year.

Flexlink moved up from the bottom spot to 18 with a $47 million dollar increase in revenues. Although the position move was slight, 2004 revenues totaled a 40% increase from 2003 numbers, thanks to vastly improved sales.

The Brambles Group also saw a notable percentage increase (25%) in revenues and a two-spot jump from 18 to 16—moving past Knapp which posted static revenues of $180 million. Eisenmann posted a 20% earnings gain compared to 2003 revenues— equaling a one-position move to 9 on this year's survey.

Locked in a two-way tie at last year's 7 slot, each reporting $450 million in annual revenues, Kardex and Columbus McKinnon broke ranks this year. Kardex posted impressive gains of $65 million over last year's numbers to stay at 7. Columbus McKinnon, now settled in the 8 spot, also saw gains, though a more modest $30 million.

Organic growth dominated this year's list as merger and acquisition activity was slow. Mecalux reported that the company has purchased Esmena, S.L., a Spanish storage systems provider. That boosted Mecalux' 2004 revenues by 23%, bringing it in at 12.

And with any kind of luck, revenue for all of these companies will continue to increase this year. We'll just have to wait to see by how much.

Click on the icon to read last year's report. (Top 20 systems suppliers - April 2004)