Business model and organizational structure

>>The KION Group’s business model is designed so that customers of all sizes and from all sectors can obtain a comprehensive range of material handling products and services for different degrees of automation from a single source. Thanks to its broad technology base, diversified product portfolio, and worldwide service network, the KION Group is able to bring a comprehensive portfolio of such products and services to the market.

For internal management purposes, the KION Group has divided its operating business into two segments that correspond to the operating segments as required by international financial reporting standards (IFRS 8). The Industrial Trucks & Services (ITS) segment encompasses the industrial truck business and the related automation and lifecycle solutions, including financial and logistics services in support of sales. The Supply Chain Solutions (SCS) segment offers services and solutions that cater to every level of automation, right up to full automation. The two segments complement each other in terms of their portfolios and access to regional markets, while the marketing of stand-alone automation solutions covers both segments.

The KION Group’s market activities were divided into four Operating Units in 2024: KION ITS EMEA, KION ITS APAC, KION ITS Americas, and KION SCS. The KION ITS EMEA Operating Unit focuses on the ITS business in Europe, the Middle East, and Africa and takes a cross-brand approach. KION ITS APAC and KION ITS Americas hold cross-brand responsibility for the ITS business in the Asia-Pacific region and the Americas respectively. KION SCS, featuring the Dematic brand, is the global warehouse automation solutions business. While KION GROUP AG is the strategic management holding company and is responsible for the groupwide strategy, the allocation of resources, and groupwide business standards, the Operating Units have full commercial responsibility for their business.

Corporate Services includes activities other than those of the operating business and the holding functions of the KION Group. These include service companies that provide services such as IT and general administration across all segments.

Industrial Trucks & Services segment

The KION Group’s portfolio of industrial trucks and services makes it one of the world’s leading providers of industrial trucks and the market leader in the EMEA region, based on the number of units sold in 2023 and backed by data from research institute Interact Analysis (Interact Analysis, November 2024). Based on its revenue in 2023, it is the world’s second-largest supplier (Modern Material Handling, August 2024). In China, the KION Group is still the leading non-domestic manufacturer and number three overall in terms of revenue (China Forklift Network, April 2024). The segment also partners with customers on stand-alone automation solutions, offering autonomous mobile robots (AMRs), automated guided vehicle systems (AGVs), and other solutions.

The segment encompasses the activities of the international brand companies Linde, STILL and Baoli, the local brand companies Fenwick and OM, plus the financial services business.

• Linde is an international and technologically innovative premium brand that manufactures forklift and warehouse trucks and provides accompanying fleet management solutions, driver assistance systems, and service options, meeting demanding customer requirements in terms of technology, efficiency, functionality, and design. In France, Linde products are sold under the Fenwick brand.
• STILL, a provider of forklift trucks, warehouse trucks, and intralogistics systems, drives innovation in its field and has a particular focus on the European market and Brazil.
• Baoli is the international brand for the lower end of the volume segment and the economy segment.
• OM is the local brand company for the Indian market, through which the KION India Pvt. Ltd. subsidiary manufactures and sells electric and IC industrial trucks and warehouse trucks.
• KION Financial Services is an internal funding partner for the Industrial Trucks & Services segment, providing finance solutions to support sales.

The business model of the Industrial Trucks & Services segment covers all of the key steps of the value chain that are required to fully cater to the needs of customers worldwide. These are product development, manufacturing, sales and service, truck rental and used trucks, fleet management, and financial services that support the industrial truck operating business.

The segment generated nearly half of its revenue in 2024 from sales of new industrial trucks, including stand-alone automation solutions. In this field, the KION Group operates more than 21 production facilities for industrial trucks and components in nine countries around the world. The segment’s global research and development activities focus on automation solutions and sustainable, energy-efficient drive systems.

Some of the products in the multi-brand portfolio are built on a modular platform for diesel and electric forklift trucks, which is intended to ensure a high standard of quality at competitive costs. Key modular components are mostly produced in the segment’s own manufacturing facilities. This allows it to ensure security of supply for special customer requirements and to provide a reliable supply of major components for its spare parts business. Energy-efficient lithium-ion battery systems are manufactured by KION Battery Systems GmbH (KBS). Other standard modules are purchased through a global procurement organization.

As at December 31, 2024, the segment had a sales and service network that comprised around 2,000 outlets in over 100 countries and was staffed by some 9,300 service employees and a large number of external service engineers. The worldwide vehicle fleet, which consisted of more than 1.9 million industrial trucks at the end of 2024, provides a broad base for the service business. This helps to smooth out fluctuations in the segment’s revenue and is aimed at reducing dependency on market cycles and supporting new truck sales by maintaining long-term customer relationships. The service business has a broad range of offerings that even extends to digital fleet management. It also handles individual orders for repairs and maintenance work as well as for spare parts. In addition, the Operating Units have a complementary used truck and rental truck business, allowing peaks in capacity requirements to be met and customers to be supported after their leases have expired.

Financial services support the sale of new trucks in many markets, forming another pillar of the service business. Its activities comprise the financing of long-term lease business for external customers and the internal financing of the short-term rental business, as well as the related risk management. In the large sales markets with a high volume of financing and lease activities, legally independent KION Financial Services companies handle this business. About half of all new trucks are financed via the KION Group itself or via external banks and financing partners. Offering financial services is therefore part of the truck sales process. Leases are generally linked to a service contract covering the term of the finance agreement.

Supply Chain Solutions segment

The Supply Chain Solutions segment, featuring the Dematic brand, is the world’s leading provider in the market for warehouse automation solutions, based on revenue figures for 2023 and data from Interact Analysis (Interact Analysis, November 2024). The data also shows that Dematic has achieved particularly strong market share in the general merchandise sector. In addition, the KION Group was ranked as one of the leading vendors in the fast-growing AMR segment in 2023 (Interact Analysis, November 2024).

Dematic provides stand-alone solutions and end-to-end solutions for manual processes and for the automation of all operational processes, predominantly piece picking, storage and transportation of pallets, transportation, picking, and storage of cartons, and sorting and palletizing of goods.

Warehouse automation solutions are managed using Dematic’s proprietary software, which can be integrated into the customer’s existing application landscape. Dematic software enables material flow data to be visualized and order fulfillment processes to be optimized.

Customers can use Dematic solutions to boost efficiency, scale up sustainably, and maintain a clear overview of their machinery and equipment. Dematic continually deploys innovative technologies and integrates software into operating solutions in order to help customers to achieve their growth targets. The segment constantly enhances its integrated solutions through strategic partnerships, for example with Google Cloud.

The KION Group’s SCS segment mainly caters for customer-specific, longer-term project business. The (new) project business (business solutions) covers every phase of a new installation. Automation solutions are planned and implemented worldwide by nine production sites in North America, Europe, China and Australia and by teams of experts at regional level. The system components, which are specified for each customer project, such as automated guided vehicle systems, palletizers, storage and picking equipment including automated storage and retrieval systems, sorters, and conveyors, are manufactured mainly inhouse or, in some cases, by third parties. As at the end of 2024, modernization work and services (customer services) were being provided to customers at their sites by more than 2,300 employees and other external staff in around 25 countries.

Production sites of the KION Group

For an interactive map of KION sites visit www.kiongroup.com.

ESRS 2 SBM-1 paragraph 40 a i. and ii.) <<*

* This disclosure is part of the Group sustainability report of the KION Group for the 2024 financial year.