Overall assessment of the economic situation
In the first half of 2019, despite a modest downturn in the market for industrial trucks, the KION Group recorded a substantial revenue increase of 12.6 per cent and a significant improvement in its adjusted EBIT margin, which rose by 0.4 percentage points to 9.3 per cent. Order intake was 2.6 per cent down on the very strong prior-year result, which had been bolstered by particularly high order levels in the Supply Chain Solutions segment.
Both operating segments contributed to a generally encouraging set of results. The Industrial Trucks & Services segment maintained its order intake and revenue in a generally declining market. It was helped by a favourable product mix that contained a high proportion of electric-powered forklift trucks and warehouse trucks. The Supply Chain Solutions segment saw a significant increase in revenue on the back of the strong order book built up in the prior year and registered growth in key customer segments.
Adjusted EBIT increased by 18.2 per cent or €62.7 million to €407.6 million and thus grew at a much faster rate than revenue. This means that the KION Group remains on track to meet the earnings targets that it set itself for 2019 as a whole. Importantly, the operational challenges related to the bottlenecks at suppliers that arose in the Industrial Trucks & Services segment over the course of 2018 were largely resolved. Slightly positive currency effects and only a modest rise in the price of materials also contributed to the improvement in earnings. A temporary year-on-year increase in net working capital in the first half of 2019 resulted in an overall negative free cash flow of €31.6 million (up by €9.0 million).
Net income for the period improved to €218.3 million, which was significantly higher than the figure for the prior-year period (€147.7 million). Basic earnings per share rose to €1.87 (H1 2018: €1.26). EBIT, bolstered by a budgeted reduction in the impact of purchase price allocations, contributed to this increase, as did a continued improvement in net interest expense. Net financial debt equated to 1.3 times adjusted EBITDA on an annualised basis.
Business situation and financial performance of the KION Group
Level of orders
The KION Group’s order intake amounted to €4,196.8 million, which was 2.6 per cent lower than the figure for the prior-year period (€4,309.0 million). Order intake in the Industrial Trucks & Services segment grew by a solid 1.7 per cent to €3,083.7 million despite the subdued market environment (H1 2018: €3,031.6 million). At €1,108.9 million, the value of order intake in the Supply Chain Solutions segment was 12.7 per cent lower than the strong level achieved in the prior-year period (H1 2018: €1,270.4 million), which had been bolstered by major orders placed in the second quarter of 2018. Currency effects had a small positive impact on the value of the KION Group’s overall order intake, raising it by €35.0 million. These effects were predominantly attributable to the stronger US dollar.
The Group’s order book contracted by 5.2 per cent, from €3,300.8 million at the end of 2018 to €3,130.7 million.