2021-07-29

KION Group raises its outlook for 2021 – impressive path of recovery in the first half of the year

The KION Group recorded significant year-on-year improvements in all key performance indicators in the first half of 2021. The Group recorded sharp growth in order intake and revenue along with even stronger improvement in its earnings, with both operating segments – Industrial Trucks & Services (ITS) and Supply Chain Solutions (SCS) – contributing to this growth. Combined with a positive outlook for the financial year 2021 in line with the current forecasts for the global economy and, in particular, the fact that the KION Group’s upturn in revenue looks set to continue for the remainder of the year, KION has also raised its target figures for 2021 as a whole.

The KION Group’s order intake increased by 33.7 percent to €5.882 billion in the first half of 2021 (H1 2020: €4.400 billion). This exceptionally strong increase is primarily a reflection of pent-up demand in the Industrial Trucks & Services (ITS) segment. In particular, the pandemic-related restrictions in place in 2020 resulted in a significant boost to demand in the current reporting period. The effect of customers bringing forward their purchases in anticipation of global supply bottlenecks and significantly longer lead times had a positive impact as well.

Against a backdrop of continued rapid growth in the market as a whole, the Industrial Trucks & Services (ITS) segment recorded its highest ever level of order intake in a half-year period. The increase in the Supply Chain Solutions (SCS) segment was attributable not just to the service business but also, in particular, to the project business. In the prior-year period, order intake in the segment had been far less affected by the coronavirus pandemic than order intake in the Industrial Trucks & Services (ITS) segment. The Group’s order book increased to €5.409 billion compared with the end of 2020 (December 31, 2020: €4.441 billion). The Industrial Trucks & Services (ITS) segment made the biggest contribution to this growth, but the order book in the Supply Chain Solutions (SCS) segment also increased again.

The first six months of the year have been very successful for us. And we intend to continue benefiting from the recovery of the global market – despite the uncertainties caused by rising commodity costs and potential supply issues in procurement. We have laid solid foundations for this in terms of our technology, production capabilities, and financial strength.

Gordon Riske, CEO KION GROUP AG

Consolidated revenue increased too, by 26.5 percent to €4.968 billion (H1 2020: €3.927 billion). The year-on-year revenue growth in the Supply Chain Solutions (SCS) segment was particularly pronounced at 52.8 percent. In addition to the high overall volume of orders, this was because the segment worked through big-ticket orders for warehouse automation that had been placed in North America and Europe in 2020. The Industrial Trucks & Services (ITS) segment also saw a jump in its revenue, by 14.9 percent. This was partly due to the pandemic-related restrictions on production in the prior-year period and to the resulting pent-up demand, particularly at the beginning of 2021.

Adjusted EBIT for the first six months of 2021 amounted to €462,2 million, which was more than double the figure of €204.8 million for the first half of 2020. The adjusted EBIT margin recovered significantly to 9.3 percent (H1 2020: 5.2 percent). This improvement in profitability was attributable to the higher gross margin combined with a relatively low increase in selling expenses, development costs, and administrative expenses. The net income increased sharply to €291.2 million (H1 2020: €50.6 million). Basic earnings per share rose to €2.21 (H1 2020: €0.46). Free cash flow amounted to €301.5 million (H1 2020: minus €219.6 million), which strengthened the Group’s financial position. This increase in free cash flow was due mainly to the rise in operating profit.

The number of employees (stated in full-time equivalents) rose by 4.2 percent, from 36,207 as at December 31, 2020 to 37,718 as at June 30, 2021.

We are well on course for success once again – our revenue is up sharply and profitability has also recovered markedly. Following last year’s pandemic-related decline, we are now edging close again to our medium-term target range for the adjusted EBIT margin of 10 to 12 percent.

Anke Groth, CFO KION GROUP AG

Expected business situation and financial performance of the KION Group

In conjunction with the current positive projections for global economic growth over the year as a whole, in particular, the fact that the KION Group’s upturn in revenue looks set to continue for the remainder of the year, the Group is raising the target figures for 2021 that it published in its 2020 outlook. The only exceptions here are the Group’s free cash flow as well as order intake in the Supply Chain Solutions (SCS) segment, where the target ranges remain unchanged.

The order intake of the KION Group is expected to be between €10,650 million and €11,450 million. The target figure for consolidated revenue is in the range of €9,700 million to €10,300 million. The target range for adjusted EBIT is €810 million to €890 million. Free cash flow is still expected to be in a range between €450 million and €550 million. The target figure for ROCE is in the range of 9.0 percent to 10.0 percent.

Order intake in the Industrial Trucks & Services (ITS) segment is expected to be between €6,850 million and €7,250 million. The target figure for revenue is in the range of €6,250 million to €6,550 million. The target range for adjusted EBIT is €525 million to €565 million.

The expected volume of order intake in the Supply Chain Solutions (SCS) segment remains unchanged at between €3,800 million and €4,200 million. The target figure for revenue is in the range of €3,450 million to €3,750 million. The target range for adjusted EBIT is €385 million to €425 million.

Notwithstanding the raising of the target figures, there is still uncertainty in the economic environment. The KION Group continues to see risks, particularly in relation to changes in sales markets and commodity prices and in the availability of intermediate products.

Links:

provisional results HY 2021

Q2 2021

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