Thanks to a strong year ending, KION Group beats 2019 expectations

In 2019 the company benefited from steady e-commerce growth, which has resulted in extensive capital expenditure in warehousing and logistics facilities globally. Despite a very difficult market environment, the value of KION Group’s order intake came to a record EUR 9.11 billion in 2019, which was a year-on-year increase of 5.3 percent. The order book saw substantial year-on-year growth and stood at EUR 3.63 billion at the end of the year (up 10.0 percent). Revenue climbed a healthy 10.1 percent to EUR 8.81 billion. Both operating segments contributed to the revenue increase. Adjusted EBIT rose 7.7 percent to EUR 850.5 million. The adjusted EBIT margin stood at 9.7 percent and thus was slightly lower than the corresponding previous year figure of 9.9 percent.

Net income amounted to EUR 444.8 million, a year-on-year hike of 10.7 percent. The positive trend in net income was one of the main factors behind the free cash flow increase, which was up 9.3 percent year-on-year to EUR 568.4 million.

“We are one of the leading companies in our sector globally and, in 2019, we took advantage of our opportunities and continued to press ahead with our KION 2027 Strategy despite challenging market conditions,” explained Riske. “Building on our success in 2019, we plan to focus on capital expenditure for the future in the new financial year. We want to set a course for our medium- and long-term growth.”

Contributions from both operating segments make 2019 a success

In KION’s Industrial Trucks & Services segment - forklift trucks, warehouse trucks and related services - the brands combined took orders for 213,700 new trucks in 2019. The slowdown in the market meant the segment could not match the very high target of 216,700 reported for 2018 (down by 1.4 percent). Still, the total order intake value increased 1.9 percent to EUR 6.33 billion. The growth was primarily due to the expanding service business. Total segment revenue grew 8.2 percent to EUR 6.41 billion and the adjusted EBIT rose by 6.1 percent year-on-year to EUR 695.1 million. The adjusted EBIT margin contracted slightly from 11.1 percent to 10.8 percent.

At EUR 2.77 billion in 2019, order intake in the Supply Chain Solutions segment - automated warehouse systems - was 14.3 percent higher than the figure reported for the previous year. Total segment revenue rose by 15.7 percent to EUR 2.38 billion, thanks primarily to the strong order book as 2018 drew to a close. Adjusted EBIT jumped 26.6 percent to EUR 228.1 million. The adjusted EBIT margin improved 9.6 percent year-on-year (2018: 8.8 percent).

KION Group optimistic about 2020

The outlook for fiscal year 2020 does not take into account possible effects from global pandemics such as COVID-19 or comparable events, since a valid estimate of the resulting outcomes is not possible due to insufficient data.

The global material handling market is likely to see further strong growth in 2020 if economic conditions can stabilize as is anticipated. This is primarily because the fundamental growth drivers will remain intact, particularly the fragmentation of value chains and consumers’ increasing preference to use e-commerce.

Following the slight market correction in 2019, KION Group anticipates new business with industrial trucks in terms of unit sales to hold steady in 2020. The Group is in an excellent position to leverage the continued progress expected in the electrification of warehouses. The high number of trucks in operation worldwide provides a sustainable customer base for the service business.

According to the Group outlook, demand for supply chain solutions involving warehouse automation is likely to be underpinned once again in 2020 by the high investment levels in the main customer industries in conjunction with omni-channel and e-commerce strategies.