KION Group achieves strong results and increases profitability in the first nine months of FY 2024

Posted on Oct 30, 2024 in Nuts & Bolts

KION Group achieves strong results and increases profitability in the first nine months of FY 2024

• Revenue up 1.1 percent to € 8.435 billion (2023: € 8.347 billion)
• Adj. EBIT improves 16.6 percent to € 666.7 million (2023: € 571.9 million)
• Adj. EBIT margin increases to 7.9 percent (2023: 6.9 percent)
• Free cash flow rises to € 431.3 million (2023: € 329.3 million)
• Outlook for 2024 confirmed with further narrowed bandwidths

The KION Group significantly improved its profitability in the first nine months of the financial year. The company achieved an adjusted EBIT of € 666.7 million (2023: € 571.9 million) on the back of € 8.435 billion (2023: € 8.347 billion) in revenues. Consequently, the adjusted EBIT margin increased 1.0 percentage point year-on-year to 7.9 percent.

Rob Smith

“Macroeconomic and political uncertainties continue to affect the business climate in the major economies of Europe, Asia, and the Americas throughout 2024. Against the backdrop of this challenging environment, we are well on track to achieve our targets for the financial year,” said Rob Smith, Chief Executive Officer of KION GROUP AG. ”With the confidence of a strong performance in the first nine months, we are narrowing the target bandwidths further and confirm our outlook for the year.”

Total revenue in the Industrial Trucks & Services segment increased by 2.4 percent to € 6.305 billion (2023: € 6.160 billion), mainly driven by higher unit sales and improved prices. The service business grew revenues by 2.2 percent and accounted for 48.0 percent of external segment revenue – which was in line with the previous year (48.1 percent). In the Supply Chain Solutions segment, revenues came in at € 2.161 billion (2023: € 2.216 billion). The project business revenue declined by 12.1 percent, and the higher-margin service business grew significantly by 15.8 percent. The service share of external segment revenue grew to 41.5 percent (2023: 34.9 percent).

The adjusted EBIT of the Industrial Trucks & Services segment rose significantly to € 672.9 million (2023: € 613.6 million). Revenue growth and stable material costs led to a significantly increased gross margin and an adjusted EBIT margin of 10.7 percent (2023: 10.0 percent). Adjusted EBIT also improved significantly in the Supply Chain Solutions segment, doubling year-on-year to € 70.5 million (2023: € 30.7 million). Higher earnings contribution from the service business, efficiency measures in project implementation and the progress in completing lower-margin legacy orders were the key drivers of adjusted EBIT improvement. The adjusted EBIT margin improved to 3.3 percent (2023: 1.4 percent).

At € 255.6 million, net income was higher year-on-year (€ 228.3 million). This corresponds to undiluted earnings per share of € 1.90 (2023: € 1.70). At € 431.3 million, free cash flow was significantly higher than in the previous year (€ 329.3 million).

Outlook confirmed with further narrowed bandwidths

In the quarterly statement for the period ended September 30, the Executive Board of KION GROUP AG confirms the outlook. It has further narrowed the ranges for the Group and the two operating segments:

A new member of the Supervisory Board appointed

Dr. Sun Shaojun has been appointed to the Supervisory Board for the period until the end of the Annual General Meeting in May 2025. He succeeds Tan Xuguang, who retired from the Supervisory Board on September 16, 2024. Dr. Sun is an experienced leader with deep expertise in mechanical engineering and in the intralogistics industry. Since 2007, he is a member of the Board of Directors of Weichai Holding Group Co., Ltd. in Weifang, People’s Republic of China.

“I would like to express our sincere thanks to Tan Xuguang. He has contributed his considerable expertise, strategic vision, and industrial foresight to our Supervisory Board during his tenure,” said Hans Peter Ring, Chairman of the Supervisory Board of KION GROUP AG. “At the same time, we are glad that Sun Shaojun and I have found a successor who is familiar with the business and KION’s markets in EMEA thanks to his many years of professional experience in Germany.”

Since 2013, Dr. Sun has been a member of the Management Board of Hydraulics Drive Technology Beteiligungs GmbH in Aschaffenburg, Germany. He started his career in 1998 at Weifang Diesel Engine Works in Weifang, People’s Republic of China. Dr. Sun holds a PhD in Engineering from Tianjin University in Tianjin, People’s Republic of China.

Continuity in the Executive Board – Ching Pong Quek appointed until 2030

The Supervisory Board of KION GROUP AG has extended the appointment of the incumbent CTO & President, KION ITS Asia Pacific, Ching Pong Quek, by a further five years until June 30, 2030. Quek began his career at the KION Group in 2006 as CEO of Linde (China) Forklift Truck Corp. based in Xiamen. Since 2008, he has been responsible for the Asian business of the Industrial Trucks & Services segment, and from 2021 until the end of 2023, he has been acting as President of ITS Americas as well. In 2024, he took on the role of Chief Technology Officer of the KION Group in addition to the Asian business. Quek has been a member of the Executive Board of KION GROUP AG since 2013.

“Ching Pong Quek is the longest-serving member of the KION Group Executive Board and has been shaping the company for 19 years with his in-depth expertise in the material handling industry,” said Hans Peter Ring, Chairman of the Supervisory Board of KION GROUP AG. “CP will continue to play a key role in driving forward both ITS’s Asian business and the further development of the CTO organization.”

Key performance indicators for the KION Group and its two operating segments for the first nine months of 2024 and for the third quarter ending September 30, 2024

[1] Adjusted for effects of purchase price allocations as well as non-recurring items.

[2] Net income attributable to shareholders of KION GROUP AG: € 249.5 million (2023: € 223.1 million). EPS calculation is based on an average number of shares of 131.1 million.

[3] Free cash flow is defined as cash flow from ongoing business and from investment activity.

[4] The prior-year order intake and order book figures have been definition-related adjusted in the SCS segment.

[5] Figures as of September 30, 2024, compared to the balance sheet date of Dec. 31, 2023.

[6] Number of full-time equivalents incl. apprentices, and trainees as of September 30, 2024, compared to balance sheet date Dec. 31, 2023.