Sharp Rise in Procurement Costs and Disruptions in Supply Chains hit Q1 2022 Results of KION Group

KION GROUP AG has started the 2022 financial year with good results for order intake and revenue. However, the substantial increase in procurement costs and the global supply chain disruptions continued to impact the Group’s profitability. In addition, the already troubled situation has intensified further due to the war in Ukraine. There have also been new coronavirus lockdowns, which affected the Asian region in particular.

KION Group’s order intake rose by 10.4 percent to €2.900 billion (previous year: €2.626 billion) in the reporting period. KION Group started the new financial year with a well-filled order book from 2021. Thanks to the ongoing positive order situation, and also due to long delivery times continuing, the Group’s order book rose by €196.1 million to €6.855 billion compared with the end of 2021 (€6.658 billion). Group revenue increased by 15.1 percent to €2.734 billion (previous year: €2.375 billion). The year-on-year revenue growth was due to the order book being well filled by the end of 2021. Consistently strong revenue growth in service business was also achieved in the first quarter of the new financial year. Services accounted for 40.2 percent (previous year: 40.8 percent) of Group revenue.

Adjusted EBIT fell to €170.3 million (previous year: €215.0 million). The adjusted EBIT margin dropped to 6.2 percent (previous year: 9.1 percent) as a result. At €80.2 million, the Group net income was down from the previous year (€137.0 million). This included non-recurring items from Russian business (after tax) of €-29.2 million in total. At €-432.6 million, free cash flow was significantly lower than in the previous year (€262.1 million) due to the increase in unfinished products and higher stocks of raw materials and supplies to safeguard the Group’s ability to fulfill orders.

“The ongoing escalation of material and logistics costs and the continuing bottlenecks in procurement markets impacted our business, as was already the case in Q4 2021,” said Rob Smith, CEO of KION GROUP AG. “Despite these circumstances, we were able to significantly increase order intake and revenue compared to the previous year thanks to ongoing demand.” He believes the Group is still in a strong position going forward: “We are represented on all key global markets as a leading full-service provider in intralogistics. The fundamental drivers of our industry are still intact, as demonstrated by the full order books. We will continue to focus on profitable growth and the implementation of our strategy, ‘KION 2027’.”

Political and Economic Uncertainties

In view of the ongoing and substantial uncertainties in the procurement markets, which are being significantly exacerbated by the war in Ukraine and renewed coronavirus lockdowns (especially in Asia), the Executive Board of KION GROUP AG decided on April 4, 2022 to withdraw the outlook for 2022 that had been published in the 2021 annual report.

Although the KION Group believes that the fundamental driving factors in the intralogistics indus-try remain intact, there are significant uncertainties with regard to evaluating the Group’s business performance over the further course of the year. From the current perspective, it is not possible to reliably assess how the war in Ukraine or the coronavirus pandemic will unfold or what their eco-nomic impact will be. The bottlenecks in the procurement markets, which are persisting for much longer than anticipated, and continuing sharp rises in the cost of materials and logistics costs will have a particularly adverse effect on the KION Group’s adjusted EBIT and free cash flow. This applies to both segments in equal measure. The KION Group intends to produce a new outlook later in the year.

You can find our business results for Q1 2022 at a glance in our

More detailed information on business performance you can find in our

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