Overall assessment of the economic situation
The KION Group’s financial performance in 2022 did not live up to its original expectations. Negative geopolitical and macroeconomic factors weighed heavily on the two operating segments. Thanks to the countermeasures taken across the Group, such as passing on cost increases to customers and expanding the network of suppliers, the KION Group is now more resilient as it enters 2023, a year that is likely to be marked by economic weakness.
Despite a noticeably more sluggish market, the value of the KION Group’s order intake amounted to €11,707.6 million in 2022, which was just 6.2 percent short of the record figure of €12,481.6 million achieved in 2021. The Industrial Trucks & Services segment increased its order intake by 3.2 percent in the reporting year, benefiting from customers bringing orders forward – particularly in the first half of the year – due, in part, to the long delivery times. The sharp drop in orders in the second half of year was more than offset in monetary terms by the price adjustments for new trucks. It was clear that customers were unwilling to make capital expenditure decisions, especially as growth rates had returned to normal levels in the e-commerce sector, and this led to a slump in order intake of 22.3 percent in the Supply Chain Solutions segment. A few big-ticket orders that had already been confirmed were cancelled altogether, while some customer orders whose negotiations had been concluded were postponed until further notice. In contrast with the previous year, currency effects boosted the value of the KION Group’s order intake overall.
Consolidated revenue amounted to €11,135.6 million, exceeding the figure for the previous year (2021: €10,294.3 million) by 8.2 percent. Both operating segments contributed to this growth, predominantly as a result of working through the sizeable order book built up in the previous year. In the Industrial Trucks & Services segment, revenue generated from external customers went up by 12.9 percent. The segment’s new business benefited not only from the plentiful order book but also from progress made on completing the unfinished trucks and shipping them by the end of the year. The service business made a substantial contribution to the increase in revenue, primarily thanks to growing aftersales and rental business. In the Supply Chain Solutions segment, revenue from external customers edged up by 0.2 percent compared with the high prior-year level due to currency effects. Revenue in the service business enjoyed disproportionately strong growth, making up for the decrease in the long-term project business (business solutions).
At €292.4 million, adjusted EBIT was lower than the prior-year figure (2021: €841.8 million) due to the substantial cost pressures and disruptions to supply chains. The KION Group’s adjusted EBIT margin stood at just 2.6 percent (2021: 8.2 percent).
Net income fell sharply year on year to €105.8 million (2021: €568.0 million). In addition to the decrease in operating profit, effects relating to the ITS and SCS segments’ business in Russia reduced net income by €36.8 million in total.
With the number of shares remaining almost unchanged, basic earnings per share therefore decreased to €0.75 (2021: €4.34). KION GROUP AG will propose a dividend of €0.19 per share to the 2023 Annual General Meeting (2021: €1.50).
Free cash flow was firmly in negative territory at minus €715.6 million (2021: €543.8 million). This was due both to the sharp drop in earnings and the high level of net working capital. The resulting funding requirement was met by a net addition to financial debt. Net financial debt rose by €1,102.9 million to €1,670.5 million as at the reporting date, compared with €567.6 million at the end of 2021. This equated to 1.4 times adjusted EBITDA (2021: 0.3 times).