Overall assessment of the economic situation
The Executive Board of the KION Group can look back on a very encouraging 2023. Over the course of the year, the KION Group exceeded its own expectations in terms of business performance thanks to strong growth in the Industrial Trucks & Services segment. At the same time, however, customers in both operating segments were reluctant to invest in view of uncertainty in the global markets, causing a sharp year-on-year fall in order intake.
Consolidated revenue for 2023 slightly exceeded the figure for the prior year by 2.7 percent to reach €11,433.7 million (2022: €11,135.6 million), but the underlying trend was very different in the two operating segments. In the Industrial Trucks & Services segment, revenue generated from external customers went up by a substantial 15.3 percent. This was predominantly due to higher production output and the segment working through the sizeable order book, but also to the price rises implemented in 2022, mainly in the EMEA region. Another factor was the growth of the service business across all categories. By contrast, revenue generated from external customers in the Supply Chain Solutions segment fell by 21.7 percent. Muted customer demand in the long-term project business (business solutions) in the preceding quarters was the main reason for the sharp decline in revenue in the year under review. The consistent and higher-margin service business (customer services) saw revenue rise markedly in 2023, however.
Adjusted EBIT improved significantly year on year to reach €790.5 million (2022: €292.4 million). There was a normalization of financial performance and a sharp rise in profitability during the reporting period. This was due to the price increases introduced in 2022 in respect of sales to customers and the general improvement in the supply chain situation and availability of materials in 2023, alongside an easing of the cost of materials, energy, and logistics. The KION Group’s adjusted EBIT margin rose to 6.9 percent (2022: 2.6 percent).
The sharp increase in financial expenses that resulted from the higher level of interest rates reduced net income. However, this effect was easily offset by the very strong operating profit. Net income increased substantially year on year to €314.4 million (2022: €105.8 million). With the number of shares remaining unchanged, basic earnings per share therefore jumped to €2.33 (2022: €0.75). KION GROUP AG will propose a dividend of €0.70 per share to the 2024 Annual General Meeting (2023: €0.19).
The KION Group’s free cash flow reached an outstanding €715.2 million thanks to the significant rise in operating profit and improved management of working capital (2022: minus €715.6 million). By contrast, the prior-year figure had been adversely affected, in particular, by the considerable growth of net working capital as a result of the extensive supply chain disruptions. Repayments of bank loans, in particular, brought net financial debt down by €460.0 million to €1,210.6 million as at the reporting date, compared with €1,670.5 million at the end of 2022. This equated to 0.7 times adjusted EBITDA (2022: 1.4 times).