Outlook

Expected macroeconomic conditions

In its most recently available Global Economic Prospects report published at the midway point of the year, the World Bank predicts that global economic output will grow by 5.6 percent across 2021 as a whole after having contracted by 3.5 percent in 2020. This is a further 1.5 percentage points higher than its original forecast in January 2021. It also anticipates a sharp year-on-year rise of 8.3 percent in the volume of global trade.

According to the World Bank, the factors driving global growth include a strong recovery in the US economy as a result of the government’s fiscal stimulus package, reflected in its US growth projection of 6.8 percent for 2021 as a whole. China is perceived as another engine of growth and is forecast to see expansion of 8.5 percent. The expectation is that the European economy will also grow, by 4.2 percent, thanks to rising vaccination rates and the extensive easing of coronavirus restrictions in many countries.

The KION Group believes that forecasts remain inherently uncertain as the future course of the coronavirus pandemic is impossible to predict. An unchecked surge in infections could result in a swift return to local or national lockdown measures and disrupt or even reverse the current recovery.

Expected business situation and financial performance of the KION Group

In the first half of 2021, the results achieved by the KION Group in all key performance indicators were significantly better than in its original forecast. For this reason, in conjunction with the current positive projections for global economic growth over the year as a whole, in particular, the fact that the KION Group’s upturn in revenue looks set to continue for the remainder of the year, the Group is raising the target figures for 2021 that it published in its 2020 outlook. The only exceptions here are the Group’s free cash flow as well as order intake in the Supply Chain Solutions segment (SCS), where the target ranges remain unchanged.

The order intake of the KION Group is expected to be between €10,650 million and €11,450 million. The target figure for consolidated revenue is in the range of €9,700 million to €10,300 million. The target range for adjusted EBIT is €810 million to €890 million. Free cash flow is still expected to be in a range between €450 million and €550 million. The target figure for ROCE is in the range of 9.0 percent to 10.0 percent.

Order intake in the Industrial Trucks & Services segment (ITS) is expected to be between €6,850 million and €7,250 million. The target figure for revenue is in the range of €6,250 million to €6,550 million. The target range for adjusted EBIT is €525 million to €565 million.

The expectation for order intake in the Supply Chain Solutions segment (SCS) is unchanged at between €3,800 million and €4,200 million. The target figure for revenue is in the range of €3,450 million to €3,750 million. The target range for adjusted EBIT is €385 million to €425 million.

Notwithstanding the raising of the target figures, there is still uncertainty in the economic environment. The KION Group continues to see risks, particularly in relation to changes in sales markets and commodity prices and in the availability of intermediate products.