Business performance in the Group
Significantly improved profitability amid subdued order levels
The KION Group delivered an encouraging financial performance in 2024 thanks to a considerable increase in earnings and profitability in the two operating segments. Whereas revenue held steady year on year, the Group achieved an increase in adjusted EBIT and in the adjusted EBIT margin that was better than anticipated. This was because the Industrial Trucks & Services (ITS) segment particularly benefited from the positive effect of being able to push through higher prices, which – combined with a slight reduction in the cost of materials – led to a disproportionately strong increase in gross profit. Another major driver of earnings was the robust growth of the high-margin service business in the Supply Chain Solutions (SCS) segment, reflecting its installed customer base.
However, order intake for new business and project business in the ITS and SCS segments respectively was subdued in 2024, with the continued good level of orders in both segments’ service business only partly making up for this situation. Although order numbers for new business rose slightly in the Industrial Trucks & Services segment, the value of order intake declined year on year owing to shifts in the product mix and country mix. The segment is facing growing competition from manufacturers in China. Demand remained flat in the project business (business solutions) of the Supply Chain Solutions segment, which meant a further decrease in the level of orders.
In 2024, the KION Group initiated a performance program in order to further strengthen the resilience of its business model. The objectives of the program are to reduce product costs, optimize internal processes, and unlock potential for efficiency in the two operating segments. The resulting positive effects that materialized in the reporting year were reflected in gross profit.
In recent years, the KION Group has also invested in the rollout of the SAP S/4HANA system. The aim is to transform its business processes (‘Business Transformation’) and establish an optimized and standardized process and IT landscape across the Group. Initial migration milestones were reached in 2024 when the system was successfully implemented at the subsidiaries in Italy.
Systematically strengthening the market position and technological position
The KION Group continued to forge ahead with strengthening its market position and technological position in 2024.
Investment in the implementation of the growth strategy in selected regions of the KION Group was delivered as planned. This included the further expansion of the new supply chain solutions plant and integrated technology center in Jinan, China. Products such as conveyor belts, racks for the Dematic Multishuttle, and automated guided vehicle systems are being manufactured here for the APAC region. The construction of an automated distribution center in Kahl am Main, Germany, is aimed at raising the efficiency of parts delivery in Europe to customers of both operating segments. In the Industrial Trucks & Services segment, there was investment in expansion of the industrial truck plant at the Summerville (South Carolina) site in the US in order to increase the degree of inhouse production locally, while optimizing procurement costs and productivity.
The KION Automation Center Antwerp in Belgium opened in October 2024 as a center of excellence for research and development, testing, and customized production of automation solutions in EMEA. The teams working at the center develop and test hardware and software solutions – including driverless and interoperable robotics products – and provide support for customer projects and sales teams by taking a systematic cross-segment approach.
As well as projects focused on organic growth, the KION Group is using alliances and strategic acquisitions in order to further strengthen its market position. In August 2024, for example, the Industrial Trucks & Services segment purchased a controlling interest (51.0 percent) in the Spanish dealer Sociedad Gallega de Carretillas, S.A., which will bolster the regional sales and service network of Linde Material Handling (LMH). At the end of October 2024, the remaining shares were acquired in Pelzer Fördertechnik GmbH, an LMH distributor located in Kerpen, Germany. The total amount invested in these two acquisitions is in the low-double-digit millions of euros.
In the first quarter of 2024, official approval was granted for the sale of ITS’s Russia business, which had been agreed in 2023. The liquidation of the Supply Chain Solutions segment’s Russian entity, which has already closed down, was still not completed as at the reporting date.
Robust financial position with very good liquidity
At €702.0 million, the KION Group once again generated a high level of free cash flow in 2024 (2023: €715.2 million). This was thanks to its robust financial performance and rigorous management of working capital. The very good liquidity position enabled the Group to further reduce its net financial debt compared with the previous year as well as improve its leverage.
In November 2024, KION GROUP AG successfully placed an unsecured bond of €500.0 million on the capital markets under its established EMTN program. The bond has a coupon of 4.0 percent and a five-year term. The proceeds from issuing the bond are to be used to refinance the financial liabilities maturing in 2025, thereby improving the maturity profile of KION GROUP AG’s borrowing.