Supply Chain Solutions segment

Business performance and order intake

Order intake in the Supply Chain Solutions segment went up by 18.5 percent to €4,329.4 million in 2021 (2020: €3,654.5 million), driven by continued strong demand from customers for warehouse automation. Customers became more willing to invest as the year went on, resulting in a particularly robust volume of orders in the second half of 2021. The segment secured attractive new projects and projects for the modernization and expansion of existing facilities, primarily in North America and western Europe. The projects were of various durations and sizes and mainly for customers in the e-commerce, general merchandise, and grocery sectors. The expanding installed base of completed projects also resulted in a greater volume of orders in the service business. Despite the segment working through the high volume of orders received in the previous year, the order book continued to grow in the reporting year, which will ensure a good level of project-based capacity utilization well into 2022. Currency effects – primarily in relation to the US dollar – reduced order intake by a total of €44.4 million.

Revenue

The total revenue of the Supply Chain Solutions segment increased year on year to €3,796.2 million (2020: €2,627.1 million). This very substantial rise of 44.5 percent was primarily attributable to the growth of the long-term project business (business solutions), where revenue jumped by 55.4 percent. Revenue growth was particularly significant in North America and western Europe, mainly because the segment worked through the order book that it had built up in 2020 and maintained a consistently high level of capacity utilization. The global supply bottlenecks had an especially noticeable impact on the Supply Chain Solutions segment in the fourth quarter, resulting in delays to projects. Revenue in the service business (customer services) increased by 13.1 percent year on year. However, the proportion of the segment’s external revenue generated by the service business fell to 20.5 percent (2020: 26.1 percent) due to the above-average rise in revenue attributable to business solutions. Negative currency effects reduced segment revenue by €52.4 million.

Earnings

The adjusted EBIT of the Supply Chain Solutions segment amounted to €409.5 million (2020: €277.5 million). This year-on-year rise of €132.0 million was largely due to the increased volume of business. The gross margin was substantially lower than in the previous year owing to the relatively small volume increase in the high-margin service business, higher material prices, and inefficiencies resulting from supply and resource bottlenecks. This was offset by the smaller increase in other functional costs. The adjusted EBIT margin stood at 10.8 percent, which was slightly higher than the margin of 10.6 percent for 2020. After taking into account non-recurring items amounting to an expense of €6.6 million, which were partly attributable to the intra-group allocation of costs of KION GROUP AG to subsidiaries in the SCS segment, and an expense of €83.1 million for purchase price allocations, EBIT rose to €319.8 million (2020: €176.0 million).

Adjusted EBITDA increased to €476.6 million (2020: €341.1 million). The adjusted EBITDA margin was 12.6 percent (2020: 13.0 percent).